`[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5 Reported in House (RH)]





                                                  Union Calendar No. 60

105th CONGRESS

  1st Session

                                H. R. 5

                          [Report No. 105-95]

_______________________________________________________________________

                                 A BILL

     To amend the Individuals with Disabilities Education Act, to 
 reauthorize and make improvements to that Act, and for other purposes.

_______________________________________________________________________

                              May 13, 1997

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                  Union Calendar No. 60
105th CONGRESS
  1st Session
                                 H. R. 5

                          [Report No. 105-95]

     To amend the Individuals with Disabilities Education Act, to 
 reauthorize and make improvements to that Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 1997

   Mr. Goodling (for himself, Mr. Riggs, Mr. Castle, Mr. Petri, Mr. 
    Ballenger, Mr. Barrett of Nebraska, Mr. McKeon, Mr. Talent, Mr. 
 Greenwood, Mr. Knollenberg, Mr. Graham, Mr. Souder, Mr. McIntosh, Mr. 
 Norwood, and Mr. Cunningham) introduced the following bill; which was 
        referred to the Committee on Education and the Workforce

                              May 13, 1997

 Additional sponsors: Mr. Sam Johnson of Texas, Mr. Bono, Mr. Latham, 
                            and Mr. McGovern

                              May 13, 1997

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on January 
                                7, 1997]

_______________________________________________________________________

                                 A BILL


 
     To amend the Individuals with Disabilities Education Act, to 
 reauthorize and make improvements to that Act, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Individuals with Disabilities 
Education Act Amendments of 1997''.

 TITLE I--AMENDMENTS TO THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT

SEC. 101. AMENDMENTS TO THE INDIVIDUALS WITH DISABILITIES EDUCATION 
              ACT.

    Parts A through D of the Individuals with Disabilities Education 
Act (20 U.S.C. 1400 et seq.) are amended to read as follows:

                      ``PART A--GENERAL PROVISIONS

``SEC. 601. SHORT TITLE; TABLE OF CONTENTS; FINDINGS; PURPOSES.

    ``(a) Short Title.--This Act may be cited as the `Individuals with 
Disabilities Education Act'.
    ``(b) Table of Contents.--The table of contents for this Act is as 
follows:

                      ``Part A--General Provisions

``Sec. 601. Short title; table of contents; findings; purposes.
``Sec. 602. Definitions.
``Sec. 603. Office of Special Education Programs.
``Sec. 604. Abrogation of State sovereign immunity.
``Sec. 605. Acquisition of equipment; construction or alteration of 
                            facilities.
``Sec. 606. Employment of individuals with disabilities.
``Sec. 607. Requirements for prescribing regulations.

  ``Part B--Assistance for Education of All Children with Disabilities

``Sec. 611. Authorization; allotment; use of funds; authorization of 
                            appropriations.
``Sec. 612. State eligibility.
``Sec. 613. Local educational agency eligibility.
``Sec. 614. Evaluations, eligibility determinations, individualized 
                            education programs, and educational 
                            placements.
``Sec. 615. Procedural safeguards.
``Sec. 616. Withholding and judicial review.
``Sec. 617. Administration.
``Sec. 618. Program information.
``Sec. 619. Preschool grants.

            ``Part C--Infants and Toddlers with Disabilities

``Sec. 631. Findings and policy.
``Sec. 632. Definitions.
``Sec. 633. General authority.
``Sec. 634. Eligibility.
``Sec. 635. Requirements for statewide system.
``Sec. 636. Individualized family service plan.
``Sec. 637. State application and assurances.
``Sec. 638. Uses of funds.
``Sec. 639. Procedural safeguards.
``Sec. 640. Payor of last resort.
``Sec. 641. State interagency coordinating council.
``Sec. 642. Federal administration.
``Sec. 643. Allocation of funds.
``Sec. 644. Federal interagency coordinating council.
``Sec. 645. Authorization of appropriations.

  ``Part D--National Activities to Improve Education of Children with 
                              Disabilities

    ``subpart 1--state program improvement grants for children with 
                              disabilities
``Sec. 651. Findings and purpose.
``Sec. 652. Eligibility and collaborative process.
``Sec. 653. Applications.
``Sec. 654. Use of funds.
``Sec. 655. Minimum State grant amounts.
````subpart 2--coordinated research, personnel preparation, technical 
         assistance, support, and dissemination of information
``Sec.``chapter 1--improving early intervention, educational, and 
   transitional services and results for children with disabilities 
         through coordinated research and personnel preparation
``Sec. 671. Findings and purpose.
``Sec. 672. Research and innovation to improve services and results for 
                            children with disabilities.
``Sec. 673. Personnel preparation to improve services and results for 
                            children with disabilities.
``Sec.``chapter 2--improving early intervention, educational, and 
   transitional services and results for children with disabilities 
through coordinated technical assistance, support, and dissemination of 
                              information
``Sec. 681. Findings and purposes.
``Sec. 682. Parent training and information centers.
``Sec. 683. Community parent resource centers.
``Sec. 684. Technical assistance for parent training and information 
                            centers.
``Sec. 685. Coordinated technical assistance and dissemination.
``Sec. 686. Authorization of appropriations.
``Sec. 687. Technology development, demonstration, and utilization, and 
                            media services.
    ``(c) Findings.--The Congress finds the following:
            ``(1) Disability is a natural part of the human experience 
        and in no way diminishes the right of individuals to 
        participate in or contribute to society. Improving educational 
        results for children with disabilities is an essential element 
        of our national policy of ensuring equality of opportunity, 
        full participation, independent living, and economic self-
        sufficiency for individuals with disabilities.
            ``(2) Before the date of the enactment of the Education for 
        All Handicapped Children Act of 1975 (Public Law 94-142)--
                    ``(A) the special educational needs of children 
                with disabilities were not being fully met;
                    ``(B) more than one-half of the children with 
                disabilities in the United States did not receive 
                appropriate educational services that would enable such 
                children to have full equality of opportunity;
                    ``(C) 1,000,000 of the children with disabilities 
                in the United States were excluded entirely from the 
                public school system and did not go through the 
                educational process with their peers;
                    ``(D) there were many children with disabilities 
                throughout the United States participating in regular 
                school programs whose disabilities prevented such 
                children from having a successful educational 
                experience because their disabilities were undetected; 
                and
                    ``(E) because of the lack of adequate services 
                within the public school system, families were often 
                forced to find services outside the public school 
                system, often at great distance from their residence 
                and at their own expense.
            ``(3) Since the enactment and implementation of the 
        Education for All Handicapped Children Act of 1975, this Act 
        has been successful in ensuring children with disabilities and 
        the families of such children access to a free appropriate 
        public education and in improving educational results for 
        children with disabilities.
            ``(4) However, the implementation of this Act has been 
        impeded by low expectations, and an insufficient focus on 
        applying replicable research on proven methods of teaching and 
        learning for children with disabilities.
            ``(5) Over 20 years of research and experience has 
        demonstrated that the education of children with disabilities 
        can be made more effective by--
                    ``(A) having high expectations for such children 
                and ensuring their access in the general curriculum to 
                the maximum extent possible;
                    ``(B) strengthening the role of parents and 
                ensuring that families of such children have meaningful 
                opportunities to participate in the education of their 
                children at school and at home;
                    ``(C) coordinating this Act with other local, 
                educational service agency, State, and Federal school 
                improvement efforts in order to ensure that such 
                children benefit from such efforts and that special 
                education can become a service for such children rather 
                than a place where they are sent;
                    ``(D) providing appropriate special education and 
                related services and aids and supports in the regular 
                classroom to such children, whenever appropriate;
                    ``(E) supporting high-quality, intensive 
                professional development for all personnel who work 
                with such children in order to ensure that they have 
                the skills and knowledge necessary to enable them--
                            ``(i) to meet developmental goals and, to 
                        the maximum extent possible, those challenging 
                        expectations that have been established for all 
                        children; and
                            ``(ii) to be prepared to lead productive, 
                        independent, adult lives, to the maximum extent 
                        possible;
                    ``(F) providing incentives for whole-school 
                approaches and pre-referral intervention to reduce the 
                need to label children as disabled in order to address 
                their learning needs; and
                    ``(G) focusing resources on teaching and learning 
                while reducing paperwork and requirements that do not 
                assist in improving educational results.
            ``(6) While States, local educational agencies, and 
        educational service agencies are responsible for providing an 
        education for all children with disabilities, it is in the 
        national interest that the Federal Government have a role in 
        assisting State and local efforts to educate children with 
        disabilities in order to improve results for such children and 
        to ensure equal protection of the law.
            ``(7)(A) The Federal Government must be responsive to the 
        growing needs of an increasingly more diverse society. A more 
        equitable allocation of resources is essential for the Federal 
        Government to meet its responsibility to provide an equal 
        educational opportunity for all individuals.
            ``(B) America's racial profile is rapidly changing. Between 
        1980 and 1990, the rate of increase in the population for white 
        Americans was 6 percent, while the rate of increase for racial 
        and ethnic minorities was much higher: 53 percent for 
        Hispanics, 13.2 percent for African-Americans, and 107.8 
        percent for Asians.
            ``(C) By the year 2000, this Nation will have 275,000,000 
        people, nearly one of every three of whom will be either 
        African-American, Hispanic, Asian-American, or American Indian.
            ``(D) Taken together as a group, minority children are 
        comprising an ever larger percentage of public school students. 
        Large-city school populations are overwhelmingly minority, for 
        example: for fall 1993, the figure for Miami was 84 percent; 
        Chicago, 89 percent; Philadelphia, 78 percent; Baltimore, 84 
        percent; Houston, 88 percent; and Los Angeles, 88 percent.
            ``(E) Recruitment efforts within special education must 
        focus on bringing larger numbers of minorities into the 
        profession in order to provide appropriate practitioner 
        knowledge, role models, and sufficient manpower to address the 
        clearly changing demography of special education.
            ``(F) The limited English proficient population is the 
        fastest growing in our Nation, and the growth is occurring in 
        many parts of our Nation. In the Nation's 2 largest school 
        districts, limited English students make up almost half of all 
        students initially entering school at the kindergarten level. 
        Studies have documented apparent discrepancies in the levels of 
        referral and placement of limited English proficient children 
        in special education. The Department of Education has found 
        that services provided to limited English proficient students 
        often do not respond primarily to the pupil's academic needs. 
        These trends pose special challenges for special education in 
        the referral, assessment, and services for our Nation's 
        students from non-English language backgrounds.
            ``(8)(A) Greater efforts are needed to prevent the 
        intensification of problems connected with mislabeling and high 
        dropout rates among minority children with disabilities.
            ``(B) More minority children continue to be served in 
        special education than would be expected from the percentage of 
        minority students in the general school population.
            ``(C) Poor African-American children are 2.3 times more 
        likely to be identified by their teacher as having mental 
        retardation than their white counterpart.
            ``(D) Although African-Americans represent 16 percent of 
        elementary and secondary enrollments, they constitute 21 
        percent of total enrollments in special education.
            ``(E) The drop-out rate is 68 percent higher for minorities 
        than for whites.
            ``(F) More than 50 percent of minority students in large 
        cities drop out of school.
            ``(9)(A) The opportunity for full participation in awards 
        for grants and contracts; boards of organizations receiving 
        funds under this Act; and peer review panels; and training of 
        professionals in the area of special education by minority 
        individuals, organizations, and historically black colleges and 
        universities is essential if we are to obtain greater success 
        in the education of minority children with disabilities.
            ``(B) In 1993, of the 915,000 college and university 
        professors, 4.9 percent were African-American and 2.4 percent 
        were Hispanic. Of the 2,940,000 teachers, prekindergarten 
        through high school, 6.8 percent were African-American and 4.1 
        percent were Hispanic.
            ``(C) Students from minority groups comprise more than 50 
        percent of K-12 public school enrollment in seven States yet 
        minority enrollment in teacher training programs is less than 
        15 percent in all but six States.
            ``(D) As the number of African-American and Hispanic 
        students in special education increases, the number of minority 
        teachers and related service personnel produced in our colleges 
        and universities continues to decrease.
            ``(E) Ten years ago, 12 percent of the United States 
        teaching force in public elementary and secondary schools were 
        members of a minority group. Minorities comprised 21 percent of 
        the national population at that time and were clearly 
        underrepresented then among employed teachers. Today, the 
        elementary and secondary teaching force is 13 percent minority, 
        while one-third of the students in public schools are minority 
        children.
            ``(F) As recently as 1991, historically black colleges and 
        universities enrolled 44 percent of the African-American 
        teacher trainees in the Nation. However, in 1993, historically 
        black colleges and universities received only 4 percent of the 
        discretionary funds for special education and related services 
        personnel training under this Act.
            ``(G) While African-American students constitute 28 percent 
        of total enrollment in special education, only 11.2 percent of 
        individuals enrolled in preservice training programs for 
        special education are African-American.
            ``(H) In 1986-87, of the degrees conferred in education at 
        the B.A., M.A., and Ph.D levels, only 6, 8, and 8 percent, 
        respectively, were awarded to African-American or Hispanic 
        students.
            ``(10) Minorities and underserved persons are socially 
        disadvantaged because of the lack of opportunities in training 
        and educational programs, undergirded by the practices in the 
        private sector that impede their full participation in the 
        mainstream of society.
    ``(d) Purposes.--The purposes of this title are--
            ``(1)(A) to ensure that all children with disabilities have 
        available to them a free appropriate public education that 
        emphasizes special education and related services designed to 
        meet their unique needs and prepare them for employment and 
        independent living;
            ``(B) to ensure that the rights of children with 
        disabilities and parents of such children are protected; and
            ``(C) to assist States, localities, educational service 
        agencies, and Federal agencies to provide for the education of 
        all children with disabilities;
            ``(2) to assist States in the implementation of a 
        statewide, comprehensive, coordinated, multidisciplinary, 
        interagency system of early intervention services for infants 
        and toddlers with disabilities and their families;
            ``(3) to ensure that educators and parents have the 
        necessary tools to improve educational results for children 
        with disabilities by supporting systemic-change activities; 
        coordinated research and personnel preparation; coordinated 
        technical assistance, dissemination, and support; and 
        technology development and media services; and
            ``(4) to assess, and ensure the effectiveness of, efforts 
        to educate children with disabilities.

``SEC. 602. DEFINITIONS.

    ``Except as otherwise provided, as used in this Act:
            ``(1) Assistive technology device.--The term `assistive 
        technology device' means any item, piece of equipment, or 
        product system, whether acquired commercially off the shelf, 
        modified, or customized, that is used to increase, maintain, or 
        improve functional capabilities of a child with a disability.
            ``(2) Assistive technology service.--The term `assistive 
        technology service' means any service that directly assists a 
        child with a disability in the selection, acquisition, or use 
        of an assistive technology device. Such term includes--
                    ``(A) the evaluation of the needs of such child, 
                including a functional evaluation of the child in the 
                child's customary environment;
                    ``(B) purchasing, leasing, or otherwise providing 
                for the acquisition of assistive technology devices by 
                such child;
                    ``(C) selecting, designing, fitting, customizing, 
                adapting, applying, maintaining, repairing, or 
                replacing of assistive technology devices;
                    ``(D) coordinating and using other therapies, 
                interventions, or services with assistive technology 
                devices, such as those associated with existing 
                education and rehabilitation plans and programs;
                    ``(E) training or technical assistance for such 
                child, or, where appropriate, the family of such child; 
                and
                    ``(F) training or technical assistance for 
                professionals (including individuals providing 
                education and rehabilitation services), employers, or 
                other individuals who provide services to, employ, or 
                are otherwise substantially involved in the major life 
                functions of such child.
            ``(3) Child with a disability.--
                    ``(A) In general.--The term `child with a 
                disability' means a child--
                            ``(i) with mental retardation, hearing 
                        impairments (including deafness), speech or 
                        language impairments, visual impairments 
                        (including blindness), serious emotional 
                        disturbance (hereinafter referred to as 
                        `emotional disturbance'), orthopedic 
                        impairments, autism, traumatic brain injury, 
                        other health impairments, or specific learning 
                        disabilities; and
                            ``(ii) who, by reason thereof, needs 
                        special education and related services.
                    ``(B) Child aged 3 through 9.--The term `child with 
                a disability' for a child aged 3 through 9 may, at the 
                discretion of the State and the local educational 
                agency, include a child--
                            ``(i) experiencing developmental delays, as 
                        defined by the State and as measured by 
                        appropriate diagnostic instruments and 
                        procedures, in one or more of the following 
                        areas: physical development, cognitive 
                        development, communication development, social 
                        or emotional development, or adaptive 
                        development; and
                            ``(ii) who, by reason thereof, needs 
                        special education and related services.
            ``(4) Educational service agency.--The term `educational 
        service agency'--
                    ``(A) means a regional public multiservice agency--
                            ``(i) authorized by State law to develop, 
                        manage, and provide services or programs to 
                        local educational agencies; and
                            ``(ii) recognized as an administrative 
                        agency for purposes of the provision of special 
                        education and related services provided within 
                        public elementary and secondary schools of the 
                        State; and
                    ``(B) includes any other public institution or 
                agency having administrative control and direction over 
                a public elementary or secondary school.
            ``(5) Elementary school.--The term `elementary school' 
        means a nonprofit institutional day or residential school that 
        provides elementary education, as determined under State law.
            ``(6) Equipment.--The term `equipment' includes--
                    ``(A) machinery, utilities, and built-in equipment 
                and any necessary enclosures or structures to house 
                such machinery, utilities, or equipment; and
                    ``(B) all other items necessary for the functioning 
                of a particular facility as a facility for the 
                provision of educational services, including items such 
                as instructional equipment and necessary furniture; 
                printed, published, and audio-visual instructional 
                materials; telecommunications, sensory, and other 
                technological aids and devices; and books, periodicals, 
                documents, and other related materials.
            ``(7) Excess costs.--The term `excess costs' means those 
        costs that are in excess of the average annual per-student 
        expenditure in a local educational agency during the preceding 
        school year for an elementary or secondary school student, as 
        may be appropriate, and which shall be computed after 
        deducting--
                    ``(A) amounts received--
                            ``(i) under part B of this title;
                            ``(ii) under part A of title I of the 
                        Elementary and Secondary Education Act of 1965; 
                        or
                            ``(iii) under part A of title VII of that 
                        Act; and
                    ``(B) any State or local funds expended for 
                programs that would qualify for assistance under any of 
                those parts.
            ``(8) Free appropriate public education.--The term `free 
        appropriate public education' means special education and 
        related services that--
                    ``(A) have been provided at public expense, under 
                public supervision and direction, and without charge;
                    ``(B) meet the standards of the State educational 
                agency;
                    ``(C) include an appropriate preschool, elementary, 
                or secondary school education in the State involved; 
                and
                    ``(D) are provided in conformity with the 
                individualized education program required under section 
                614(d).
            ``(9) Indian.--The term `Indian' means an individual who is 
        a member of an Indian tribe.
            ``(10) Indian tribe.--The term `Indian tribe' means any 
        Federal or State Indian tribe, band, rancheria, pueblo, colony, 
        or community, including any Alaskan Native village or regional 
        village corporation (as defined in or established under the 
        Alaska Native Claims Settlement Act).
            ``(11) Individualized education program.--The term 
        `individualized education program' or `IEP' means a written 
        statement for each child with a disability that is developed, 
        reviewed, and revised in accordance with section 614(d).
            ``(12) Individualized family service plan.--The term 
        `individualized family service plan' has the meaning given such 
        term in section 632.
            ``(13) Infant or toddler with a disability.--The term 
        `infant or toddler with a disability' has the meaning given 
        such term in section 632.
            ``(14) Institution of higher education.--The term 
        `institution of higher education'--
                    ``(A) has the meaning given that term in section 
                1201(a) of the Higher Education Act of 1965; and
                    ``(B) also includes any community college receiving 
                funding from the Secretary of the Interior under the 
                Tribally Controlled Community College Assistance Act of 
                1978.
            ``(15) Local educational agency.--
                    ``(A) The term `local educational agency' means a 
                public board of education or other public authority 
                legally constituted within a State for either 
                administrative control or direction of, or to perform a 
                service function for, public elementary or secondary 
                schools in a city, county, township, school district, 
                or other political subdivision of a State, or for such 
                combination of school districts or counties as are 
                recognized in a State as an administrative agency for 
                its public elementary or secondary schools.
                    ``(B) The term includes--
                            ``(i) an educational service agency, as 
                        defined in paragraph (4); and
                            ``(ii) any other public institution or 
                        agency having administrative control and 
                        direction of a public elementary or secondary 
                        school.
                    ``(C) The term includes an elementary or secondary 
                school funded by the Bureau of Indian Affairs, but only 
                to the extent that such inclusion makes the school 
                eligible for programs for which specific eligibility is 
                not provided to the school in another provision of law 
                and the school does not have a student population that 
                is smaller than the student population of the local 
                educational agency receiving assistance under this Act 
                with the smallest student population, except that the 
                school shall not be subject to the jurisdiction of any 
                State educational agency other than the Bureau of 
                Indian Affairs.
            ``(16) Native language.--The term `native language', when 
        used with reference to an individual of limited English 
        proficiency, means the language normally used by the 
        individual, or in the case of a child, the language normally 
        used by the parents of the child.
            ``(17) Nonprofit.--The term `nonprofit', as applied to a 
        school, agency, organization, or institution, means a school, 
        agency, organization, or institution owned and operated by one 
        or more nonprofit corporations or associations no part of the 
        net earnings of which inures, or may lawfully inure, to the 
        benefit of any private shareholder or individual.
            ``(18) Outlying area.--The term `outlying area' means the 
        United States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(19) Parent.--The term `parent'--
                    ``(A) includes a legal guardian; and
                    ``(B) except as used in sections 615(b)(2) and 
                639(a)(5), includes an individual assigned under either 
                of those sections to be a surrogate parent.
            ``(20) Parent organization.--The term `parent organization' 
        has the meaning given that term in section 682(g).
            ``(21) Parent training and information center.--The term 
        `parent training and information center' means a center 
        assisted under section 682 or 683.
            ``(22) Related services.--The term `related services' means 
        transportation, and such developmental, corrective, and other 
        supportive services (including speech-language pathology and 
        audiology services, psychological services, physical and 
        occupational therapy, recreation, including therapeutic 
        recreation, social work services, counseling services, 
        including rehabilitation counseling, orientation and mobility 
        services, and medical services, except that such medical 
        services shall be for diagnostic and evaluation purposes only) 
        as may be required to assist a child with a disability to 
        benefit from special education, and includes the early 
        identification and assessment of disabling conditions in 
        children.
            ``(23) Secondary school.--The term `secondary school' means 
        a nonprofit institutional day or residential school that 
        provides secondary education, as determined under State law, 
        except that it does not include any education beyond grade 12.
            ``(24) Secretary.--The term `Secretary' means the Secretary 
        of Education.
            ``(25) Special education.--The term `special education' 
        means specially designed instruction, at no cost to parents, to 
        meet the unique needs of a child with a disability, including--
                    ``(A) instruction conducted in the classroom, in 
                the home, in hospitals and institutions, and in other 
                settings; and
                    ``(B) instruction in physical education.
            ``(26) Specific learning disability.--
                    ``(A) In general.--The term `specific learning 
                disability' means a disorder in one or more of the 
                basic psychological processes involved in understanding 
                or in using language, spoken or written, which disorder 
                may manifest itself in imperfect ability to listen, 
                think, speak, read, write, spell, or do mathematical 
                calculations.
                    ``(B) Disorders included.--Such term includes such 
                conditions as perceptual disabilities, brain injury, 
                minimal brain dysfunction, dyslexia, and developmental 
                aphasia.
                    ``(C) Disorders not included.--Such term does not 
                include a learning problem that is primarily the result 
                of visual, hearing, or motor disabilities, of mental 
                retardation, of emotional disturbance, or of 
                environmental, cultural, or economic disadvantage.
            ``(27) State.--The term `State' means each of the 50 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, and each of the outlying areas.
            ``(28) State educational agency.--The term `State 
        educational agency' means the State board of education or other 
        agency or officer primarily responsible for the State 
        supervision of public elementary and secondary schools, or, if 
        there is no such officer or agency, an officer or agency 
        designated by the Governor or by State law.
            ``(29) Supplementary aids and services.--The term 
        `supplementary aids and services' means, aids, services, and 
        other supports that are provided in regular education classes 
        or other education-related settings to enable children with 
        disabilities to be educated with nondisabled children to the 
        maximum extent appropriate in accordance with section 
        612(a)(5).
            ``(30) Transition services.--The term `transition services' 
        means a coordinated set of activities for a student with a 
        disability that--
                    ``(A) are designed within an outcome-oriented 
                process, which promotes movement from school to post-
                school activities, including post-secondary education, 
                vocational training, integrated employment (including 
                supported employment), continuing and adult education, 
                adult services, independent living, or community 
                participation;
                    ``(B) are based upon the individual student's 
                needs, taking into account the student's preferences 
                and interests; and
                    ``(C) include instruction, related services, 
                community experiences, the development of employment 
                and other post-school adult living objectives, and, 
                when appropriate, acquisition of daily living skills 
                and functional vocational evaluation.

``SEC. 603. OFFICE OF SPECIAL EDUCATION PROGRAMS.

    ``(a) Establishment.--There shall be, within the Office of Special 
Education and Rehabilitative Services in the Department of Education, 
an Office of Special Education Programs, which shall be the principal 
agency in such Department for administering and carrying out this Act 
and other programs and activities concerning the education of children 
with disabilities.
    ``(b) Director.--The Office established under subsection (a) shall 
be headed by a Director who shall be selected by the Secretary and 
shall report directly to the Assistant Secretary for Special Education 
and Rehabilitative Services.
    ``(c) Voluntary and Uncompensated Services.--Notwithstanding 
section 1342 of title 31, United States Code, the Secretary is 
authorized to accept voluntary and uncompensated services in 
furtherance of the purposes of this Act.

``SEC. 604. ABROGATION OF STATE SOVEREIGN IMMUNITY.

    ``(a) In General.--A State shall not be immune under the eleventh 
amendment to the Constitution of the United States from suit in Federal 
court for a violation of this Act.
    ``(b) Remedies.--In a suit against a State for a violation of this 
Act, remedies (including remedies both at law and in equity) are 
available for such a violation to the same extent as those remedies are 
available for such a violation in the suit against any public entity 
other than a State.
    ``(c) Effective Date.--Subsections (a) and (b) apply with respect 
to violations that occur in whole or part after the date of the 
enactment of the Education of the Handicapped Act Amendments of 1990.

``SEC. 605. ACQUISITION OF EQUIPMENT; CONSTRUCTION OR ALTERATION OF 
              FACILITIES.

    ``(a) In General.--If the Secretary determines that a program 
authorized under this Act would be improved by permitting program funds 
to be used to acquire appropriate equipment, or to construct new 
facilities or alter existing facilities, the Secretary is authorized to 
allow the use of those funds for those purposes.
    ``(b) Compliance With Certain Regulations.--Any construction of new 
facilities or alteration of existing facilities under subsection (a) 
shall comply with the requirements of--
            ``(1) appendix A of part 36 of title 28, Code of Federal 
        Regulations (commonly known as the `Americans with Disabilities 
        Accessibility Guidelines for Buildings and Facilities'); or
            ``(2) appendix A of part 101-19.6 of title 41, Code of 
        Federal Regulations (commonly known as the `Uniform Federal 
        Accessibility Standards').

``SEC. 606. EMPLOYMENT OF INDIVIDUALS WITH DISABILITIES.

    ``The Secretary shall ensure that each recipient of assistance 
under this Act makes positive efforts to employ and advance in 
employment qualified individuals with disabilities in programs assisted 
under this Act.

``SEC. 607. REQUIREMENTS FOR PRESCRIBING REGULATIONS.

    ``(a) Public Comment Period.--The Secretary shall provide a public 
comment period of at least 90 days on any regulation proposed under 
part B or part C of this Act on which an opportunity for public comment 
is otherwise required by law.
    ``(b) Protections Provided to Children.--The Secretary may not 
implement, or publish in final form, any regulation prescribed pursuant 
to this Act that would procedurally or substantively lessen the 
protections provided to children with disabilities under this Act, as 
embodied in regulations in effect on July 20, 1983 (particularly as 
such protections relate to parental consent to initial evaluation or 
initial placement in special education, least restrictive environment, 
related services, timelines, attendance of evaluation personnel at 
individualized education program meetings, or qualifications of 
personnel), except to the extent that such regulation reflects the 
clear and unequivocal intent of the Congress in legislation.
    ``(c) Policy Letters and Statements.--The Secretary may not, 
through policy letters or other statements, establish a rule that is 
required for compliance with, and eligibility under, this part without 
following the requirements of section 553 of title 5, United States 
Code.
    ``(d) Correspondence From Department of Education Describing 
Interpretations of This Part.--
            ``(1) In general.--The Secretary shall, on a quarterly 
        basis, publish in the Federal Register, and widely disseminate 
        to interested entities through various additional forms of 
        communication, a list of correspondence from the Department of 
        Education received by individuals during the previous quarter 
        that describes the interpretations of the Department of 
        Education of this Act or the regulations implemented pursuant 
        to this Act.
            ``(2) Additional information.--For each item of 
        correspondence published in a list under paragraph (1), the 
        Secretary shall identify the topic addressed by the 
        correspondence and shall include such other summary information 
        as the Secretary determines to be appropriate.
    ``(e) Issues of National Significance.--If the Secretary receives a 
written request regarding a policy, question, or interpretation under 
part B of this Act, and determines that it raises an issue of general 
interest or applicability of national significance to the 
implementation of part B, the Secretary shall--
            ``(1) include a statement to that effect in any written 
        response;
            ``(2) widely disseminate that response to State educational 
        agencies, local educational agencies, parent and advocacy 
        organizations, and other interested organizations, subject to 
        applicable laws relating to confidentiality of information; and
            ``(3) not later than one year after the date on which the 
        Secretary responds to the written request, issue written 
        guidance on such policy, question, or interpretation through 
        such means as the Secretary determines to be appropriate and 
        consistent with law, such as a policy memorandum, notice of 
        interpretation, or notice of proposed rulemaking.
    ``(f) Explanation.--Any written response by the Secretary under 
subsection (e) regarding a policy, question, or interpretation under 
part B of this Act shall include an explanation that the written 
response--
            ``(1) is provided as informal guidance and is not legally 
        binding; and
            ``(2) represents the interpretation by the Department of 
        Education of the applicable statutory or regulatory 
        requirements in the context of the specific facts presented.

  ``PART B--ASSISTANCE FOR EDUCATION OF ALL CHILDREN WITH DISABILITIES

``SEC. 611. AUTHORIZATION; ALLOTMENT; USE OF FUNDS; AUTHORIZATION OF 
              APPROPRIATIONS.

    ``(a) Grants to States.--
            ``(1) Purpose of grants.--The Secretary shall make grants 
        to States and the outlying areas, and provide funds to the 
        Secretary of the Interior, to assist them to provide special 
        education and related services to children with disabilities in 
        accordance with this part.
            ``(2) Maximum amounts.--The maximum amount of the grant a 
        State may receive under this section for any fiscal year is--
                    ``(A) the number of children with disabilities in 
                the State who are receiving special education and 
                related services--
                            ``(i) aged three through five if the State 
                        is eligible for a grant under section 619; and
                            ``(ii) aged six through 21; multiplied by
                    ``(B) 40 percent of the average per-pupil 
                expenditure in public elementary and secondary schools 
                in the United States.
    ``(b) Outlying Areas and Freely Associated States.--
            ``(1) Funds reserved.--From the amount appropriated for any 
        fiscal year under subsection (j), the Secretary shall reserve 
        not more than one percent, which shall be used--
                    ``(A) to provide assistance to the outlying areas 
                in accordance with their respective populations of 
                individuals aged three through 21; and
                    ``(B) for fiscal years 1998 through 2001, to carry 
                out the competition described in paragraph (2), except 
                that the amount reserved to carry out that competition 
                shall not exceed the amount reserved for fiscal year 
                1996 for the competition under part B of this Act 
                described under the heading ``SPECIAL EDUCATION'' in 
                Public Law 104-134.
            ``(2) Limitation for freely associated states.--
                    ``(A) Competitive grants.--The Secretary shall use 
                funds described in paragraph (1)(B) to award grants, on 
                a competitive basis, to Guam, American Samoa, the 
                Commonwealth of the Northern Mariana Islands, and the 
                freely associated States to carry out the purposes of 
                this part.
                    ``(B) Award basis.--The Secretary shall award 
                grants under subparagraph (A) on a competitive basis, 
                pursuant to the recommendations of the Pacific Region 
                Educational Laboratory in Honolulu, Hawaii. Those 
                recommendations shall be made by experts in the field 
                of special education and related services.
                    ``(C) Assistance requirements.--Any freely 
                associated State that wishes to receive funds under 
                this part shall include, in its application for 
                assistance--
                            ``(i) information demonstrating that it 
                        will meet all conditions that apply to States 
                        under this part;
                            ``(ii) an assurance that, notwithstanding 
                        any other provision of this part, it will use 
                        those funds only for the direct provision of 
                        special education and related services to 
                        children with disabilities and to enhance its 
                        capacity to make a free appropriate public 
                        education available to all children with 
                        disabilities;
                            ``(iii) identify the source and amount of 
                        funds, in addition to funds under this part, 
                        that it will make available to ensure that a 
                        free appropriate public education is available 
                        to all children with disabilities within its 
                        jurisdiction; and
                            ``(iv) such other information and 
                        assurances as the Secretary may require.
                    ``(D) Termination of eligibility.--Notwithstanding 
                any other provision of law, the freely associated 
                States shall not receive any funds under this part for 
                any program year that begins after September 30, 2001.
                    ``(E) Administrative costs.--The Secretary may 
                provide not more than five percent of the amount 
                reserved for grants under this paragraph to pay the 
                administrative costs of the Pacific Region Educational 
                Laboratory under subparagraph (B).
            ``(3) Limitation.--An outlying area is not eligible for a 
        competitive award under paragraph (2) unless it receives 
        assistance under paragraph (1)(A).
            ``(4) Special rule.--The provisions of Public Law 95-134, 
        permitting the consolidation of grants by the outlying areas, 
        shall not apply to funds provided to those areas or to the 
        freely associated States under this section.
            ``(5) Eligibility for discretionary programs.--The freely 
        associated States shall be eligible to receive assistance under 
        subpart 2 of part D of this Act until September 30, 2001.
            ``(6) Definition.--As used in this subsection, the term 
        'freely associated States' means the Republic of the Marshall 
        Islands, the Federated States of Micronesia, and the Republic 
        of Palau.
    ``(c) Secretary of the Interior.--From the amount appropriated for 
any fiscal year under subsection (j), the Secretary shall reserve 1.226 
percent to provide assistance to the Secretary of the Interior in 
accordance with subsection (i).
    ``(d) Allocations to States.--
            ``(1) In general.--After reserving funds for studies and 
        evaluations under section 674(e), and for payments to the 
        outlying areas and the Secretary of the Interior under 
        subsections (b) and (c), the Secretary shall allocate the 
        remaining amount among the States in accordance with paragraph 
        (2) or subsection (e), as the case may be.
            ``(2) Interim formula.--Except as provided in subsection 
        (e), the Secretary shall allocate the amount described in 
        paragraph (1) among the States in accordance with section 
        611(a)(3), (4), and (5) and (b)(1), (2), and (3) of this Act, 
        as in effect prior to the enactment of the Individuals with 
        Disabilities Education Act Amendments of 1997, except that the 
        determination of the number of children with disabilities 
        receiving special education and related services under such 
        section 611(a)(3) may, at the State's discretion, be calculated 
        as of the last Friday in October or as of December 1 of the 
        fiscal year for which the funds are appropriated.
    ``(e) Permanent Formula.--
            ``(1) Establishment of base year.--The Secretary shall 
        allocate the amount described in subsection (d)(1) among the 
        States in accordance with this subsection for each fiscal year 
        beginning with the first fiscal year for which the amount 
        appropriated under subsection (j) is more than $4,924,672,200.
            ``(2) Use of base year.--
                    ``(A) Definition.--As used in this subsection, the 
                term `base year' means the fiscal year preceding the 
                first fiscal year in which this subsection applies.
                    ``(B) Special rule for use of base year amount.--If 
                a State received any funds under this section for the 
                base year on the basis of children aged three through 
                five, but does not make a free appropriate public 
                education available to all children with disabilities 
                aged three through five in the State in any subsequent 
                fiscal year, the Secretary shall compute the State's 
                base year amount, solely for the purpose of calculating 
                the State's allocation in that subsequent year under 
                paragraph (3) or (4), by subtracting the amount 
                allocated to the State for the base year on the basis 
                of those children.
            ``(3) Increase in funds.--If the amount available for 
        allocations to States under paragraph (1) is equal to or 
        greater than the amount allocated to the States under this 
        paragraph for the preceding fiscal year, those allocations 
        shall be calculated as follows:
                    ``(A)(i) Except as provided in subparagraph (B), 
                the Secretary shall--
                            ``(I) allocate to each State the amount it 
                        received for the base year;
                            ``(II) allocate 85 percent of any remaining 
                        funds to States on the basis of their relative 
                        populations of children aged 3 through 21 who 
                        are of the same age as children with 
                        disabilities for whom the State ensures the 
                        availability of a free appropriate public 
                        education under this part; and
                            ``(III) allocate 15 percent of those 
                        remaining funds to States on the basis of their 
                        relative populations of children described in 
                        subclause (II) who are living in poverty.
                    ``(ii) For the purpose of making grants under this 
                paragraph, the Secretary shall use the most recent 
                population data, including data on children living in 
                poverty, that are available and satisfactory to the 
                Secretary.
                    ``(B) Notwithstanding subparagraph (A), allocations 
                under this paragraph shall be subject to the following:
                            ``(i) No State's allocation shall be less 
                        than its allocation for the preceding fiscal 
                        year.
                            ``(ii) No State's allocation shall be less 
                        than the greatest of--
                                    ``(I) the sum of--
                                            ``(aa) the amount it 
                                        received for the base year; and
                                            ``(bb) one third of one 
                                        percent of the amount by which 
                                        the amount appropriated under 
                                        subsection (j) exceeds the 
                                        amount appropriated under this 
                                        section for the base year;
                                    ``(II) the sum of--
                                            ``(aa) the amount it 
                                        received for the preceding 
                                        fiscal year; and
                                            ``(bb) that amount 
                                        multiplied by the percentage by 
                                        which the increase in the funds 
                                        appropriated from the preceding 
                                        fiscal year exceeds 1.5 
                                        percent; or
                                    ``(III) the sum of--
                                            ``(aa) the amount it 
                                        received for the preceding 
                                        fiscal year; and
                                            ``(bb) that amount 
                                        multiplied by 90 percent of the 
                                        percentage increase in the 
                                        amount appropriated from the 
                                        preceding fiscal year.
                            ``(iii) Notwithstanding clause (ii), no 
                        State's allocation under this paragraph shall 
                        exceed the sum of--
                                    ``(I) the amount it received for 
                                the preceding fiscal year; and
                                    ``(II) that amount multiplied by 
                                the sum of 1.5 percent and the 
                                percentage increase in the amount 
                                appropriated.
                    ``(C) If the amount available for allocations under 
                this paragraph is insufficient to pay those allocations 
                in full, those allocations shall be ratably reduced, 
                subject to subparagraph (B)(i).
            ``(4) Decrease in funds.--If the amount available for 
        allocations to States under paragraph (1) is less than the 
        amount allocated to the States under this section for the 
        preceding fiscal year, those allocations shall be calculated as 
        follows:
                    ``(A) If the amount available for allocations is 
                greater than the amount allocated to the States for the 
                base year, each State shall be allocated the sum of--
                            ``(i) the amount it received for the base 
                        year; and
                            ``(ii) an amount that bears the same 
                        relation to any remaining funds as the increase 
                        the State received for the preceding fiscal 
                        year over the base year bears to the total of 
                        all such increases for all States.
                    ``(B)(i) If the amount available for allocations is 
                equal to or less than the amount allocated to the 
                States for the base year, each State shall be allocated 
                the amount it received for the base year.
                    ``(ii) If the amount available is insufficient to 
                make the allocations described in clause (i), those 
                allocations shall be ratably reduced.
    ``(f) State-Level Activities.--
            ``(1) General.--
                    ``(A) Each State may retain not more than the 
                amount described in subparagraph (B) for administration 
                and other State-level activities in accordance with 
                paragraphs (2) and (3).
                    ``(B) For each fiscal year, the Secretary shall 
                determine and report to the State educational agency an 
                amount that is 25 percent of the amount the State 
                received under this section for fiscal year 1997, 
                cumulatively adjusted by the Secretary for each 
                succeeding fiscal year by the lesser of--
                            ``(i) the percentage increase, if any, from 
                        the preceding fiscal year in the State's 
                        allocation under this section; or
                            ``(ii) the rate of inflation, as measured 
                        by the percentage increase, if any, from the 
                        preceding fiscal year in the Consumer Price 
                        Index For All Urban Consumers, published by the 
                        Bureau of Labor Statistics of the Department of 
                        Labor.
                    ``(C) A State may use funds it retains under 
                subparagraph (A) without regard to--
                            ``(i) the prohibition on commingling of 
                        funds in section 612(a)(18)(B); and
                            ``(ii) the prohibition on supplanting other 
                        funds in section 612(a)(18)(C).
            ``(2) State administration.--
                    ``(A) For the purpose of administering this part, 
                including section 619 (including the coordination of 
                activities under this part with, and providing 
                technical assistance to, other programs that provide 
                services to children with disabilities)--
                            ``(i) each State may use not more than 
                        twenty percent of the maximum amount it may 
                        retain under paragraph (1)(A) for any fiscal 
                        year or $500,000 (adjusted by the cumulative 
                        rate of inflation since fiscal year 1998, as 
                        measured by the percentage increase, if any, in 
                        the Consumer Price Index For All Urban 
                        Consumers, published by the Bureau of Labor 
                        Statistics of the Department of Labor), 
                        whichever is greater; and
                            ``(ii) each outlying area may use up to 
                        five percent of the amount it receives under 
                        this section for any fiscal year or $35,000, 
                        whichever is greater.
                    ``(B) Funds described in subparagraph (A) may also 
                be used for the administration of part C of this Act, 
                if the State educational agency is the lead agency for 
                the State under that part.
            ``(3) Other state-level activities.--Each State shall use 
        any funds it retains under paragraph (1) and does not use for 
        administration under paragraph (2) for any of the following:
                    ``(A) Support and direct services, including 
                technical assistance and personnel development and 
                training.
                    ``(B) Administrative costs of monitoring and 
                complaint investigation, but only to the extent that 
                those costs exceed the costs incurred for those 
                activities during fiscal year 1985.
                    ``(C) To establish and implement the mediation 
                process required by section 615(e), including providing 
                for the costs of mediators and support personnel.
                    ``(D) To assist local educational agencies in 
                meeting personnel shortages.
                    ``(E) To develop a State Improvement Plan under 
                subpart 1 of part D.
                    ``(F) Activities at the State and local levels to 
                meet the performance goals established by the State 
                under section 612(a)(16) and to support implementation 
                of the State Improvement Plan under subpart 1 of part D 
                if the State receives funds under that subpart.
                    ``(G) To supplement other amounts used to develop 
                and implement a Statewide coordinated services system 
                designed to improve results for children and families, 
                including children with disabilities and their 
                families, but not to exceed one percent of the amount 
                received by the State under this section. This system 
                shall be coordinated with and, to the extent 
                appropriate, build on the system of coordinated 
                services developed by the State under part C of this 
                Act.
                    ``(H) For subgrants to local educational agencies 
                for the purposes described in paragraph (4)(A).
            ``(4)(A) Subgrants to Local Educational Agencies for 
        Capacity-Building and Improvement.--In any fiscal year in which 
        the percentage increase in the State's allocation under this 
        section exceeds the rate of inflation (as measured by the 
        percentage increase, if any, from the preceding fiscal year in 
        the Consumer Price Index For All Urban Consumers, published by 
        the Bureau of Labor Statistics of the Department of Labor), 
        each State shall reserve, from its allocation under this 
        section, the amount described in subparagraph (B) to make 
        subgrants to local educational agencies, unless that amount is 
        less than $100,000, to assist them in providing direct services 
        and in making systemic change to improve results for children 
        with disabilities through one or more of the following:
                    ``(i) Direct services, including alternative 
                programming for children who have been expelled from 
                school, and services for children in correctional 
                facilities, children enrolled in State-operated or 
                State-supported schools, and children in charter 
                schools.
                    ``(ii) Addressing needs or carrying out improvement 
                strategies identified in the State's Improvement Plan 
                under subpart 1 of part D.
                    ``(iii) Adopting promising practices, materials, 
                and technology, based on knowledge derived from 
                education research and other sources.
                    ``(iv) Establishing, expanding, or implementing 
                interagency agreements and arrangements between local 
                educational agencies and other agencies or 
                organizations concerning the provision of services to 
                children with disabilities and their families.
                    ``(v) Increasing cooperative problem-solving 
                between parents and school personnel and promoting the 
                use of alternative dispute resolution.
            ``(B) Maximum subgrant.--For each fiscal year, the amount 
        referred to in subparagraph (A) is--
                    ``(i) the maximum amount the State was allowed to 
                retain under paragraph (1)(A) for the prior fiscal 
                year, or for fiscal year 1998, 25 percent of the 
                State's allocation for fiscal year 1997 under this 
                section; multiplied by
                    ``(ii) the difference between the percentage 
                increase in the State's allocation under this section 
                and the rate of inflation, as measured by the 
                percentage increase, if any, from the preceding fiscal 
                year in the Consumer Price Index For All Urban 
                Consumers, published by the Bureau of Labor Statistics 
                of the Department of Labor.
            ``(5) Report on Use of Funds.--As part of the information 
        required to be submitted to the Secretary under section 612, 
        each State shall annually describe--
                    ``(A) how amounts retained under paragraph (1) will 
                be used to meet the requirements of this part;
                    ``(B) how those amounts will be allocated among the 
                activities described in paragraphs (2) and (3) to meet 
                State priorities based on input from local educational 
                agencies; and
                    ``(C) the percentage of those amounts, if any, that 
                will be distributed to local educational agencies by 
                formula.
    ``(g) Subgrants to Local Educational Agencies.--
            ``(1) Subgrants required.--Each State that receives a grant 
        under this section for any fiscal year shall distribute any 
        funds it does not retain under subsection (f) (at least 75 
        percent of the grant funds) to local educational agencies in 
        the State that have established their eligibility under section 
        613, and to State agencies that received funds under section 
        614A(a) of this Act for fiscal year 1997, as then in effect, 
        and have established their eligibility under section 613, for 
        use in accordance with this part.
            ``(2) Allocations to local educational agencies.--
                    ``(A) Interim procedure.--For each fiscal year for 
                which funds are allocated to States under subsection 
                (d)(2), each State shall allocate funds under paragraph 
                (1) in accordance with section 611(d) of this Act, as 
                in effect prior to the enactment of the Individuals 
                with Disabilities Education Act Amendments of 1997.
                    ``(B) Permanent procedure.--For each fiscal year 
                for which funds are allocated to States under 
                subsection (e), each State shall allocate funds under 
                paragraph (1) as follows:
                            ``(i) Base payments.--The State shall first 
                        award each agency described in paragraph (1) 
                        the amount that agency would have received 
                        under this section for the base year, as 
                        defined in subsection (e)(2)(A), if the State 
                        had distributed 75 percent of its grant for 
                        that year under section 611(d), as then in 
                        effect.
                            ``(ii) Allocation of remaining funds.--
                        After making allocations under clause (i), the 
                        State shall--
                                    ``(I) allocate 85 percent of any 
                                remaining funds to those agencies on 
                                the basis of the relative numbers of 
                                children enrolled in public and private 
                                elementary and secondary schools within 
                                the agency's jurisdiction; and
                                    ``(II) allocate 15 percent of those 
                                remaining funds to those agencies in 
                                accordance with their relative numbers 
                                of children living in poverty, as 
                                determined by the State educational 
                                agency.
            ``(3) Former chapter 1 state agencies.--
                    ``(A) To the extent necessary, the State--
                            ``(i) shall use funds that are available 
                        under subsection (f)(1)(A) to ensure that each 
                        State agency that received fiscal year 1994 
                        funds under subpart 2 of part D of chapter 1 of 
                        title I of the Elementary and Secondary 
                        Education Act of 1965 receives, from the 
                        combination of funds under subsection (f)(1)(A) 
                        and funds provided under paragraph (1) of this 
                        subsection, an amount equal to--
                                    ``(I) the number of children with 
                                disabilities, aged 6 through 21, to 
                                whom the agency was providing special 
                                education and related services on 
                                December 1 of the fiscal year for which 
                                the funds were appropriated, subject to 
                                the limitation in subparagraph (B); 
                                multiplied by
                                    ``(II) the per-child amount 
                                provided under such subpart for fiscal 
                                year 1994; and
                            ``(ii) may use those funds to ensure that 
                        each local educational agency that received 
                        fiscal year 1994 funds under that subpart for 
                        children who had transferred from a State-
                        operated or State-supported school or program 
                        assisted under that subpart receives, from the 
                        combination of funds available under subsection 
                        (f)(1)(A) and funds provided under paragraph 
                        (1) of this subsection, an amount for each such 
                        child, aged 3 through 21 to whom the agency was 
                        providing special education and related 
                        services on December 1 of the fiscal year for 
                        which the funds were appropriated, equal to the 
                        per-child amount the agency received under that 
                        subpart for fiscal year 1994.
                    ``(B) The number of children counted under 
                subparagraph (A)(i)(I) shall not exceed the number of 
                children aged 3 through 21 for whom the agency received 
                fiscal year 1994 funds under subpart 2 of part D of 
                chapter 1 of title I of the Elementary and Secondary 
                Education Act of 1965.
            ``(4) Reallocation of funds.--If a State educational agency 
        determines that a local educational agency is adequately 
        providing a free appropriate public education to all children 
        with disabilities residing in the area served by that agency 
        with State and local funds, the State educational agency may 
        reallocate any portion of the funds under this part that are 
        not needed by that local agency to provide a free appropriate 
        public education to other local educational agencies in the 
        State that are not adequately providing special education and 
        related services to all children with disabilities residing in 
        the areas they serve.
    ``(h) Definitions.--For the purpose of this section--
            ``(1) the term `average per-pupil expenditure in public 
        elementary and secondary schools in the United States' means--
                    ``(A) without regard to the source of funds--
                            ``(i) the aggregate current expenditures, 
                        during the second fiscal year preceding the 
                        fiscal year for which the determination is made 
                        (or, if satisfactory data for that year are not 
                        available, during the most recent preceding 
                        fiscal year for which satisfactory data are 
                        available) of all local educational agencies in 
                        the 50 States and the District of Columbia); 
                        plus
                            ``(ii) any direct expenditures by the State 
                        for the operation of those agencies; divided by
                    ``(B) the aggregate number of children in average 
                daily attendance to whom those agencies provided free 
                public education during that preceding year; and
            ``(2) the term `State' means each of the 50 States, the 
        District of Columbia, and the Commonwealth of Puerto Rico.
    ``(i) Use of Amounts by Secretary of the Interior.--
            ``(1) Provision of amounts for assistance.--
                    ``(A) In general.--The Secretary of Education shall 
                provide amounts to the Secretary of the Interior to 
                meet the need for assistance for the education of 
                children with disabilities on reservations aged 5 to 
                21, inclusive, enrolled in elementary and secondary 
                schools for Indian children operated or funded by the 
                Secretary of the Interior. The amount of such payment 
                for any fiscal year shall be equal to 80 percent of the 
                amount allotted under subsection (c) for that fiscal 
                year.
                    ``(B) Calculation of number of children.--In the 
                case of Indian students ages 3 to 5, inclusive, who are 
                enrolled in programs affiliated with Bureau of Indian 
                Affairs (hereafter in this subsection referred to as 
                `BIA') schools and that are required by the States in 
                which such schools are located to attain or maintain 
                State accreditation, and which schools have such 
                accreditation prior to the date of enactment of the 
                Individuals with Disabilities Education Act Amendments 
                of 1991, the school shall be allowed to count those 
                children for the purpose of distribution of the funds 
                provided under this paragraph to the Secretary of the 
                Interior. The Secretary of the Interior shall be 
                responsible for meeting all of the requirements of this 
                part for these children, in accordance with paragraph 
                (2).
                    ``(C) Additional requirement.--With respect to all 
                other children aged 3 to 21, inclusive, on 
                reservations, the State educational agency shall be 
                responsible for ensuring that all of the requirements 
                of this part are implemented.
            ``(2) Submission of information.--The Secretary of 
        Education may provide the Secretary of the Interior amounts 
        under paragraph (1) for a fiscal year only if the Secretary of 
        the Interior submits to the Secretary of Education information 
        that--
                    ``(A) demonstrates that the Department of the 
                Interior meets the appropriate requirements, as 
                determined by the Secretary of Education, of sections 
                612 (including monitoring and evaluation activities) 
                and 613;
                    ``(B) includes a description of how the Secretary 
                of the Interior will coordinate the provision of 
                services under this part with local educational 
                agencies, tribes and tribal organizations, and other 
                private and Federal service providers;
                    ``(C) includes an assurance that there are public 
                hearings, adequate notice of such hearings, and an 
                opportunity for comment afforded to members of tribes, 
                tribal governing bodies, and affected local school 
                boards before the adoption of the policies, programs, 
                and procedures described in subparagraph (A);
                    ``(D) includes an assurance that the Secretary of 
                the Interior will provide such information as the 
                Secretary of Education may require to comply with 
                section 618;
                    ``(E) includes an assurance that the Secretary of 
                the Interior and the Secretary of Health and Human 
                Services have entered into a memorandum of agreement, 
                to be provided to the Secretary of Education, for the 
                coordination of services, resources, and personnel 
                between their respective Federal, State, and local 
                offices and with State and local educational agencies 
                and other entities to facilitate the provision of 
                services to Indian children with disabilities residing 
                on or near reservations (such agreement shall provide 
                for the apportionment of responsibilities and costs 
                including, but not limited to, child find, evaluation, 
                diagnosis, remediation or therapeutic measures, and 
                (where appropriate) equipment and medical or personal 
                supplies as needed for a child to remain in school or a 
                program); and
                    ``(F) includes an assurance that the Department of 
                the Interior will cooperate with the Department of 
                Education in its exercise of monitoring and oversight 
                of this application, and any agreements entered into 
                between the Secretary of the Interior and other 
                entities under this part, and will fulfill its duties 
                under this part.
        Section 616(a) shall apply to the information described in this 
        paragraph.
            ``(3) Payments for education and services for indian 
        children with disabilities aged 3 through 5.--
                    ``(A) In general.--With funds appropriated under 
                subsection (j), the Secretary of Education shall make 
                payments to the Secretary of the Interior to be 
                distributed to tribes or tribal organizations (as 
                defined under section 4 of the Indian Self-
Determination and Education Assistance Act) or consortia of the above 
to provide for the coordination of assistance for special education and 
related services for children with disabilities aged 3 through 5 on 
reservations served by elementary and secondary schools for Indian 
children operated or funded by the Department of the Interior. The 
amount of such payments under subparagraph (B) for any fiscal year 
shall be equal to 20 percent of the amount allotted under subsection 
(c).
                    ``(B) Distribution of funds.--The Secretary of the 
                Interior shall distribute the total amount of the 
                payment under subparagraph (A) by allocating to each 
                tribe or tribal organization an amount based on the 
                number of children with disabilities ages 3 through 5 
                residing on reservations as reported annually, divided 
                by the total of those children served by all tribes or 
                tribal organizations.
                    ``(C) Submission of information.--To receive a 
                payment under this paragraph, the tribe or tribal 
                organization shall submit such figures to the Secretary 
                of the Interior as required to determine the amounts to 
                be allocated under subparagraph (B). This information 
                shall be compiled and submitted to the Secretary of 
                Education.
                    ``(D) Use of funds.--The funds received by a tribe 
                or tribal organization shall be used to assist in child 
                find, screening, and other procedures for the early 
                identification of children aged 3 through 5, parent 
                training, and the provision of direct services. These 
                activities may be carried out directly or through 
                contracts or cooperative agreements with the BIA, local 
                educational agencies, and other public or private 
                nonprofit organizations. The tribe or tribal 
                organization is encouraged to involve Indian parents in 
                the development and implementation of these activities. 
                The above entities shall, as appropriate, make 
                referrals to local, State, or Federal entities for the 
                provision of services or further diagnosis.
                    ``(E) Biennial report.--To be eligible to receive a 
                grant pursuant to subparagraph (A), the tribe or tribal 
                organization shall provide to the Secretary of the 
                Interior a biennial report of activities undertaken 
                under this paragraph, including the number of contracts 
                and cooperative agreements entered into, the number of 
                children contacted and receiving services for each 
                year, and the estimated number of children needing 
                services during the 2 years following the one in which 
                the report is made. The Secretary of the Interior shall 
                include a summary of this information on a biennial 
                basis in the report to the Secretary of Education 
                required under this subsection. The Secretary of 
                Education may require any additional information from 
                the Secretary of the Interior.
                    ``(F) Prohibitions.--None of the funds allocated 
                under this paragraph may be used by the Secretary of 
                the Interior for administrative purposes, including 
                child count and the provision of technical assistance.
            ``(4) Plan for coordination of services.--The Secretary of 
        the Interior shall develop and implement a plan for the 
        coordination of services for all Indian children with 
        disabilities residing on reservations covered under this Act. 
        Such plan shall provide for the coordination of services 
        benefiting these children from whatever source, including 
        tribes, the Indian Health Service, other BIA divisions, and 
        other Federal agencies. In developing the plan, the Secretary 
        of the Interior shall consult with all interested and involved 
        parties. It shall be based on the needs of the children and the 
        system best suited for meeting those needs, and may involve the 
        establishment of cooperative agreements between the BIA, other 
        Federal agencies, and other entities. The plan shall also be 
        distributed upon request to States, State and local educational 
        agencies, and other agencies providing services to infants, 
        toddlers, and children with disabilities, to tribes, and to 
        other interested parties.
            ``(5) Establishment of advisory board.--To meet the 
        requirements of section 612(a)(21), the Secretary of the 
        Interior shall establish, not later than 6 months after the 
        date of the enactment of the Individuals with Disabilities 
        Education Act Amendments of 1997, under the BIA, an advisory 
        board composed of individuals involved in or concerned with the 
        education and provision of services to Indian infants, 
        toddlers, children, and youth with disabilities, including 
        Indians with disabilities, Indian parents or guardians of such 
        children, teachers, service providers, State and local 
        educational officials, representatives of tribes or tribal 
        organizations, representatives from State Interagency 
        Coordinating Councils under section 641 in States having 
        reservations, and other members representing the various 
        divisions and entities of the BIA. The chairperson shall be 
        selected by the Secretary of the Interior. The advisory board 
        shall--
                    ``(A) assist in the coordination of services within 
                the BIA and with other local, State, and Federal 
                agencies in the provision of education for infants, 
                toddlers, and children with disabilities;
                    ``(B) advise and assist the Secretary of the 
                Interior in the performance of the Secretary's 
                responsibilities described in this subsection;
                    ``(C) develop and recommend policies concerning 
                effective inter- and intra-agency collaboration, 
                including modifications to regulations, and the 
                elimination of barriers to inter- and intra-agency 
                programs and activities;
                    ``(D) provide assistance and disseminate 
                information on best practices, effective program 
                coordination strategies, and recommendations for 
                improved educational programming for Indian infants, 
                toddlers, and children with disabilities; and
                    ``(E) provide assistance in the preparation of 
                information required under paragraph (2)(D).
            ``(6) Annual reports.--
                    ``(A) In general.--The advisory board established 
                under paragraph (5) shall prepare and submit to the 
                Secretary of the Interior and to the Congress an annual 
                report containing a description of the activities of 
                the advisory board for the preceding year.
                    ``(B) Availability.--The Secretary of the Interior 
                shall make available to the Secretary of Education the 
                report described in subparagraph (A).
    ``(j) Authorization of Appropriations.--For the purpose of carrying 
out this part, other than section 619, there are authorized to be 
appropriated such sums as may be necessary.

``SEC. 612. STATE ELIGIBILITY.

    ``(a) In General.--A State is eligible for assistance under this 
part for a fiscal year if the State demonstrates to the satisfaction of 
the Secretary that the State has in effect policies and procedures to 
ensure that it meets each of the following conditions:
            ``(1) Free appropriate public education.--
                    ``(A) In general.--A free appropriate public 
                education is available to all children with 
                disabilities residing in the State between the ages of 
                3 and 21, inclusive, including children with 
                disabilities who have been suspended or expelled from 
                school.
                    ``(B) Limitation.--The obligation to make a free 
                appropriate public education available to all children 
                with disabilities does not apply with respect to 
                children:
                            ``(i) aged 3 through 5 and 18 through 21 in 
                        a State to the extent that its application to 
                        those children would be inconsistent with State 
                        law or practice, or the order of any court, 
                        respecting the provision of public education to 
                        children in those age ranges; and
                            ``(ii) aged 18 through 21 to the extent 
                        that State law does not require that special 
                        education and related services under this part 
                        be provided to children with disabilities who, 
                        in the educational placement prior to their 
                        incarceration in an adult correctional 
                        facility:
                                    ``(I) were not actually identified 
                                as being a child with a disability 
                                under section 602(3) of this Act; or
                                    ``(II) did not have an 
                                Individualized Education Program under 
                                this part.
            ``(2) Full educational opportunity goal.--The State has 
        established a goal of providing full educational opportunity to 
        all children with disabilities and a detailed timetable for 
        accomplishing that goal.
            ``(3) Child find.--
                    ``(A) In general.--All children with disabilities 
                residing in the State, including children with 
                disabilities attending private schools, regardless of 
                the severity of their disabilities, and who are in need 
                of special education and related services, are 
                identified, located, and evaluated and a practical 
                method is developed and implemented to determine which 
                children with disabilities are currently receiving 
                needed special education and related services.
                    ``(B) Construction.--Nothing in this Act requires 
                that children be classified by their disability so long 
                as each child who has a disability listed in section 
                602 and who, by reason of that disability, needs 
                special education and related services is regarded as a 
                child with a disability under this part.
            ``(4) Individualized education program.--An individualized 
        education program, or an individualized family service plan 
        that meets the requirements of section 636(d), is developed, 
        reviewed, and revised for each child with a disability in 
        accordance with section 614(d).
            ``(5) Least restrictive environment.--
                    ``(A) In general.--To the maximum extent 
                appropriate, children with disabilities, including 
                children in public or private institutions or other 
                care facilities, are educated with children who are not 
                disabled, and special classes, separate schooling, or 
                other removal of children with disabilities from the 
                regular educational environment occurs only when the 
                nature or severity of the disability of a child is such 
                that education in regular classes with the use of 
                supplementary aids and services cannot be achieved 
                satisfactorily.
                    ``(B) Additional requirement.--
                            ``(i) In general.--If the State uses a 
                        funding mechanism by which the State 
                        distributes State funds on the basis of the 
                        type of setting in which a child is served, the 
                        funding mechanism does not result in placements 
                        that violate the requirements of subparagraph 
                        (A).
                            ``(ii) Assurance.--If the State does not 
                        have policies and procedures to ensure 
                        compliance with clause (i), the State shall 
                        provide the Secretary an assurance that it will 
                        revise the funding mechanism as soon as 
                        feasible to ensure that such mechanism does not 
                        result in such placements.
            ``(6) Procedural safeguards.--
                    ``(A) In general.--Children with disabilities and 
                their parents are afforded the procedural safeguards 
                required by section 615.
                    ``(B) Additional procedural safeguards.--Procedures 
                to ensure that testing and evaluation materials and 
                procedures utilized for the purposes of evaluation and 
                placement of children with disabilities will be 
                selected and administered so as not to be racially or 
                culturally discriminatory. Such materials or procedures 
                shall be provided and administered in the child's 
                native language or mode of communication, unless it 
                clearly is not feasible to do so, and no single 
                procedure shall be the sole criterion for determining 
                an appropriate educational program for a child.
            ``(7) Evaluation.--Children with disabilities are evaluated 
        in accordance with subsections (a) through (c) of section 614.
            ``(8) Confidentiality.--Agencies in the State comply with 
        section 617(c) (relating to the confidentiality of records and 
        information).
            ``(9) Transition from part c to preschool programs.--
        Children participating in early-intervention programs assisted 
        under part C, and who will participate in preschool programs 
        assisted under this part, experience a smooth and effective 
        transition to those preschool programs in a manner consistent 
        with section 637(a)(8). By the third birthday of such a child, 
        an individualized education program or, if consistent with 
        sections 614(d)(2)(B) and 636(d), an individualized family 
        service plan, has been developed and is being implemented for 
        the child. The local educational agency will participate in 
        transition planning conferences arranged by the designated lead 
        agency under section 637(a)(8).
            ``(10) Children in private schools.--
                    ``(A) Children enrolled in private schools by their 
                parents.--
                            ``(i) In general.--To the extent consistent 
                        with the number and location of children with 
                        disabilities in the State who are enrolled by 
                        their parents in private elementary and 
                        secondary schools, provision is made for the 
                        participation of those children in the program 
                        assisted or carried out under this part by 
                        providing for such children special education 
                        and related services in accordance with the 
                        following requirements, unless the Secretary 
                        has arranged for services to those children 
                        under subsection (f):
                                    ``(I) Amounts expended for the 
                                provision of those services by a local 
                                educational agency shall be equal to a 
                                proportionate amount of Federal funds 
                                made available under this part.
                                    ``(II) Such services may be 
                                provided to children with disabilities 
                                on the premises of private, including 
                                parochial, schools, to the extent 
                                consistent with law.
                            ``(ii) Child-find requirement.--The 
                        requirements of paragraph (3) of this 
                        subsection (relating to child find) shall apply 
                        with respect to children with disabilities in 
                        the State who are enrolled in private, 
                        including parochial, elementary and secondary 
                        schools.
                    ``(B) Children placed in, or referred to, private 
                schools by public agencies.--
                            ``(i) In general.--Children with 
                        disabilities in private schools and facilities 
                        are provided special education and related 
                        services, in accordance with an individualized 
                        education program, at no cost to their parents, 
                        if such children are placed in, or referred to, 
                        such schools or facilities by the State or 
                        appropriate local educational agency as the 
                        means of carrying out the requirements of this 
                        part or any other applicable law requiring the 
                        provision of special education and related 
                        services to all children with disabilities 
                        within such State.
                            ``(ii) Standards.--In all cases described 
                        in clause (i), the State educational agency 
                        shall determine whether such schools and 
                        facilities meet standards that apply to State 
                        and local educational agencies and that 
                        children so served have all the rights they 
                        would have if served by such agencies.
                    ``(C) Payment for education of children enrolled in 
                private schools without consent of or referral by the 
                public agency.--
                            ``(i) In general.--Subject to subparagraph 
                        (A), this part does not require a local 
                        educational agency to pay for the cost of 
                        education, including special education and 
                        related services, of a child with a disability 
                        at a private school or facility if that agency 
                        made a free appropriate public education 
                        available to the child and the parents elected 
                        to place the child in such private school or 
                        facility.
                            ``(ii) Reimbursement for private school 
                        placement.--If the parents of a child with a 
                        disability, who previously received special 
                        education and related services under the 
                        authority of a public agency, enroll the child 
                        in a private elementary or secondary school 
                        without the consent of or referral by the 
                        public agency, a court or a hearing officer may 
                        require the agency to reimburse the parents for 
                        the cost of that enrollment if the court or 
                        hearing officer finds that the agency had not 
                        made a free appropriate public education 
                        available to the child in a timely manner prior 
                        to that enrollment.
                            ``(iii) Limitation on reimbursement.--The 
                        cost of reimbursement described in clause (ii) 
                        may be reduced or denied--
                                    ``(I) if--
                                            ``(aa) at the most recent 
                                        IEP meeting that the parents 
                                        attended prior to removal of 
                                        the child from the public 
                                        school, the parents did not 
                                        inform the IEP team that they 
                                        were rejecting the placement 
                                        proposed by the public agency 
                                        to provide a free appropriate 
                                        public education to their 
                                        child, including stating their 
                                        concerns and their intent to 
                                        enroll their child in a private 
                                        school at public expense; or
                                            ``(bb) 10 business days 
                                        (including any holidays that 
                                        occur on a business day) prior 
                                        to the removal of the child 
                                        from the public school, the 
                                        parents did not give written 
                                        notice to the public agency of 
                                        the information described in 
                                        division (aa);
                                    ``(II) if, prior to the parents' 
                                removal of the child from the public 
                                school, the public agency informed the 
                                parents, through the notice 
                                requirements described in section 
                                615(b)(7), of its intent to evaluate 
                                the child (including a statement of the 
                                purpose of the evaluation that was 
                                appropriate and reasonable), but the 
                                parents did not make the child 
                                available for such evaluation; or
                                    ``(III) upon a judicial finding of 
                                unreasonableness with respect to 
                                actions taken by the parents.
                            ``(iv) Exception.--Notwithstanding the 
                        notice requirement in clause (iii)(I), the cost 
                        of reimbursement may not be reduced or denied 
                        for failure to provide such notice if--
                                    ``(I) the parent is illiterate and 
                                cannot write in English;
                                    ``(II) compliance with clause 
                                (iii)(I) would likely result in 
                                physical or serious emotional harm to 
                                the child;
                                    ``(III) the school prevented the 
                                parent from providing such notice; or
                                    ``(IV) the parents had not received 
                                notice, pursuant to section 615, of the 
                                notice requirement in clause (iii)(I).
            ``(11) State educational agency responsible for general 
        supervision.--
                    ``(A) In general.--The State educational agency is 
                responsible for ensuring that--
                            ``(i) the requirements of this part are 
                        met; and
                            ``(ii) all educational programs for 
                        children with disabilities in the State, 
                        including all such programs administered by any 
                        other State or local agency--
                                    ``(I) are under the general 
                                supervision of individuals in the State 
                                who are responsible for educational 
                                programs for children with 
                                disabilities; and
                                    ``(II) meet the educational 
                                standards of the State educational 
                                agency.
                    ``(B) Limitation.--Subparagraph (A) shall not limit 
                the responsibility of agencies in the State other than 
                the State educational agency to provide, or pay for 
                some or all of the costs of, a free appropriate public 
                education for any child with a disability in the State.
                    ``(C) Exception.--Notwithstanding subparagraphs (A) 
                and (B), the Governor (or another individual pursuant 
                to State law), consistent with State law, may assign to 
                any public agency in the State the responsibility of 
                ensuring that the requirements of this part are met 
                with respect to children with disabilities who are 
                convicted as adults under State law and incarcerated in 
                adult prisons.
            ``(12) Obligations related to and methods of ensuring 
        services.--
                    ``(A) Establishing responsibility for services.--
                The Chief Executive Officer or designee of the officer 
                shall ensure that an interagency agreement or other 
                mechanism for interagency coordination is in effect 
                between each public agency described in subparagraph 
                (B) and the State educational agency, in order to 
                ensure that all services described in subparagraph 
                (B)(i) that are needed to ensure a free appropriate 
                public education are provided, including the provision 
                of such services during the pendency of any dispute 
                under clause (iii). Such agreement or mechanism shall 
                include the following:
                            ``(i) Agency financial responsibility.--An 
                        identification of, or a method for defining, 
                        the financial responsibility of each agency for 
                        providing services described in subparagraph 
                        (B)(i) to ensure a free appropriate public 
                        education to children with disabilities, 
                        provided that the financial responsibility of 
                        each public agency described in subparagraph 
                        (B), including the State Medicaid agency and 
                        other public insurers of children with 
                        disabilities, shall precede the financial 
                        responsibility of the local educational agency 
                        (or the State agency responsible for developing 
                        the child's IEP).
                            ``(ii) Conditions and terms of 
                        reimbursement.--The conditions, terms, and 
                        procedures under which a local educational 
                        agency shall be reimbursed by other agencies.
                            ``(iii) Interagency disputes.--Procedures 
                        for resolving interagency disputes (including 
                        procedures under which local educational 
                        agencies may initiate proceedings) under the 
                        agreement or other mechanism to secure 
                        reimbursement from other agencies or otherwise 
                        implement the provisions of the agreement or 
                        mechanism.
                            ``(iv) Coordination of services 
                        procedures.--Policies and procedures for 
                        agencies to determine and identify the 
                        interagency coordination responsibilities of 
                        each agency to promote the coordination and 
                        timely and appropriate delivery of services 
                        described in subparagraph (B)(i).
                    ``(B) Obligation of public agency.--
                            ``(i) In general.--If any public agency 
                        other than an educational agency is otherwise 
                        obligated under Federal or State law, or 
                        assigned responsibility under State policy or 
                        pursuant to subparagraph (A), to provide or pay 
                        for any services that are also considered 
                        special education or related services (such as, 
                        but not limited to, services described in 
                        sections 602(1) relating to assistive 
                        technology devices, 602(2) relating to 
                        assistive technology services, 602(22) relating 
                        to related services, 602(29) relating to 
                        supplementary aids and services, and 602(30) 
                        relating to transition services) that are 
                        necessary for ensuring a free appropriate 
                        public education to children with disabilities 
                        within the State, such public agency shall 
                        fulfill that obligation or responsibility, 
                        either directly or through contract or other 
                        arrangement.
                            ``(ii) Reimbursement for services by public 
                        agency.--If a public agency other than an 
                        educational agency fails to provide or pay for 
                        the special education and related services 
                        described in clause (i), the local educational 
                        agency (or State agency responsible for 
                        developing the child's IEP) shall provide or 
                        pay for such services to the child. Such local 
                        educational agency or State agency may then 
                        claim reimbursement for the services from the 
                        public agency that failed to provide or pay for 
                        such services and such public agency shall 
                        reimburse the local educational agency or State 
                        agency pursuant to the terms of the interagency 
                        agreement or other mechanism described in 
                        subparagraph (A)(i) according to the procedures 
                        established in such agreement pursuant to 
                        subparagraph (A)(ii).
                    ``(C) Special rule.--The requirements of 
                subparagraph (A) may be met through--
                            ``(i) State statute or regulation;
                            ``(ii) signed agreements between respective 
                        agency officials that clearly identify the 
                        responsibilities of each agency relating to the 
                        provision of services; or
                            ``(iii) other appropriate written methods 
                        as determined by the Chief Executive Officer of 
                        the State or designee of the officer.
            ``(13) Procedural requirements relating to local 
        educational agency eligibility.--The State educational agency 
        will not make a final determination that a local educational 
        agency is not eligible for assistance under this part without 
        first affording that agency reasonable notice and an 
        opportunity for a hearing.
            ``(14) Comprehensive system of personnel development.--The 
        State has in effect, consistent with the purposes of this Act 
        and with section 635(a)(8), a comprehensive system of personnel 
        development that is designed to ensure an adequate supply of 
        qualified special education, regular education, and related 
        services personnel that meets the requirements for a State 
        improvement plan relating to personnel development in 
        subsections (b)(2)(B) and (c)(3)(D) of section 653.
            ``(15) Personnel standards.--
                    ``(A) In general.--The State educational agency has 
                established and maintains standards to ensure that 
                personnel necessary to carry out this part are 
                appropriately and adequately prepared and trained.
                    ``(B) Standards described.--Such standards shall--
                            ``(i) be consistent with any State-approved 
                        or State-recognized certification, licensing, 
                        registration, or other comparable requirements 
                        that apply to the professional discipline in 
                        which those personnel are providing special 
                        education or related services;
                            ``(ii) to the extent the standards 
                        described in subparagraph (A) are not based on 
                        the highest requirements in the State 
                        applicable to a specific profession or 
                        discipline, the State is taking steps to 
                        require retraining or hiring of personnel that 
                        meet appropriate professional requirements in 
                        the State; and
                            ``(iii) allow paraprofessionals and 
                        assistants who are appropriately trained and 
                        supervised, in accordance with State law, 
                        regulations, or written policy, in meeting the 
                        requirements of this part to be used to assist 
                        in the provision of special education and 
                        related services to children with disabilities 
                        under this part.
                    ``(C) Policy.--In implementing this paragraph, a 
                State may adopt a policy that includes a requirement 
                that local educational agencies in the State make an 
                ongoing good-faith effort to recruit and hire 
                appropriately and adequately trained personnel to 
                provide special education and related services to 
                children with disabilities, including, in a geographic 
                area of the State where there is a shortage of such 
                personnel, the most qualified individuals available who 
                are making satisfactory progress toward completing 
                applicable course work necessary to meet the standards 
                described in subparagraph (B)(i), consistent with State 
                law, and the steps described in subparagraph (B)(ii) 
                within three years.
            ``(16) Performance goals and indicators.--The State--
                    ``(A) has established goals for the performance of 
                children with disabilities in the State that--
                            ``(i) will promote the purposes of this 
                        Act, as stated in section 601(d); and
                            ``(ii) are consistent, to the maximum 
                        extent appropriate, with other goals and 
                        standards for children established by the 
                        State;
                    ``(B) has established performance indicators the 
                State will use to assess progress toward achieving 
                those goals that, at a minimum, address the performance 
                of children with disabilities on assessments, drop-out 
                rates, and graduation rates;
                    ``(C) will, every two years, report to the 
                Secretary and the public on the progress of the State, 
                and of children with disabilities in the State, toward 
                meeting the goals established under subparagraph (A); 
                and
                    ``(D) based on its assessment of that progress, 
                will revise its State improvement plan under subpart 1 
                of part D as may be needed to improve its performance, 
                if the State receives assistance under that subpart.
            ``(17) Participation in assessments.--
                    ``(A) In general.--Children with disabilities are 
                included in general State and district-wide assessment 
                programs, with appropriate accommodations, where 
                necessary. As appropriate, the State or local 
                educational agency--
                            ``(i) develops guidelines for the 
                        participation of children with disabilities in 
                        alternate assessments for those children who 
                        cannot participate in State and district-wide 
                        assessment programs; and
                            ``(ii) develops and, beginning not later 
                        than July 1, 2000, conducts those alternate 
                        assessments.
                    ``(B) Reports.--The State educational agency makes 
                available to the public, and reports to the public with 
                the same frequency and in the same detail as it reports 
                on the assessment of nondisabled children, the 
                following:
                            ``(i) The number of children with 
                        disabilities participating in regular 
                        assessments.
                            ``(ii) The number of those children 
                        participating in alternate assessments.
                            ``(iii)(I) The performance of those 
                        children on regular assessments (beginning not 
                        later than July 1, 1998) and on alternate 
                        assessments (not later than July 1, 2000), if 
                        doing so would be statistically sound and would 
                        not result in the disclosure of performance 
                        results identifiable to individual children.
                            ``(II) Data relating to the performance of 
                        children described under subclause (I) shall be 
                        disaggregated--
                                    ``(aa) for assessments conducted 
                                after July 1, 1998; and
                                    ``(bb) for assessments conducted 
                                before July 1, 1998, if the State is 
                                required to disaggregate such data 
                                prior to July 1, 1998.
            ``(18) Supplementation of state, local, and other Federal 
        funds.--
                    ``(A) Expenditures.--Funds paid to a State under 
                this part will be expended in accordance with all the 
                provisions of this part.
                    ``(B) Prohibition against commingling.--Funds paid 
                to a State under this part will not be commingled with 
                State funds.
                    ``(C) Prohibition against supplantation and 
                conditions for waiver by Secretary.--Except as provided 
                in section 613, funds paid to a State under this part 
                will be used to supplement the level of Federal, State, 
                and local funds (including funds that are not under the 
                direct control of State or local educational agencies) 
                expended for special education and related services 
                provided to children with disabilities under this part 
                and in no case to supplant such Federal, State, and 
                local funds, except that, where the State provides 
                clear and convincing evidence that all children with 
                disabilities have available to them a free appropriate 
                public education, the Secretary may waive, in whole or 
                in part, the requirements of this subparagraph if the 
                Secretary concurs with the evidence provided by the 
                State.
            ``(19) Maintenance of state financial support.--
                    ``(A) In general.--The State does not reduce the 
                amount of State financial support for special education 
                and related services for children with disabilities, or 
                otherwise made available because of the excess costs of 
                educating those children, below the amount of that 
                support for the preceding fiscal year.
                    ``(B) Reduction of funds for failure to maintain 
                support.--The Secretary shall reduce the allocation of 
                funds under section 611 for any fiscal year following 
                the fiscal year in which the State fails to comply with 
                the requirement of subparagraph (A) by the same amount 
                by which the State fails to meet the requirement.
                    ``(C) Waivers for exceptional or uncontrollable 
                circumstances.--The Secretary may waive the requirement 
                of subparagraph (A) for a State, for one fiscal year at 
                a time, if the Secretary determines that--
                            ``(i) granting a waiver would be equitable 
                        due to exceptional or uncontrollable 
                        circumstances such as a natural disaster or a 
                        precipitous and unforeseen decline in the 
                        financial resources of the State; or
                            ``(ii) the State meets the standard in 
                        paragraph (18)(C) of this section for a waiver 
                        of the requirement to supplement, and not to 
                        supplant, funds received under this part.
                    ``(D) Subsequent years.--If, for any year, a State 
                fails to meet the requirement of subparagraph (A), 
                including any year for which the State is granted a 
                waiver under subparagraph (C), the financial support 
                required of the State in future years under 
                subparagraph (A) shall be the amount that would have 
                been required in the absence of that failure and not 
                the reduced level of the State's support.
                    ``(E) Regulations.--
                            (i) The Secretary shall, by regulation, 
                        establish procedures (including objective 
                        criteria and consideration of the results of 
                        compliance reviews of the State conducted by 
                        the Secretary) for determining whether to grant 
                        a waiver under subparagraph (C)(ii).
                            ``(ii) The Secretary shall publish proposed 
                        regulations under clause (i) not later than 6 
                        months after the date of the enactment of the 
                        Individuals with Disabilities Education Act 
                        Amendments of 1997, and shall issue final 
                        regulations under clause (i) not later than 1 
                        year after such date of enactment.
            ``(20) Public participation.--Prior to the adoption of any 
        policies and procedures needed to comply with this section 
        (including any amendments to such policies and procedures), the 
        State ensures that there are public hearings, adequate notice 
        of the hearings, and an opportunity for comment available to 
        the general public, including individuals with disabilities and 
        parents of children with disabilities.
            ``(21) State advisory panel.--
                    ``(A) In general.--The State has established and 
                maintains an advisory panel for the purpose of 
                providing policy guidance with respect to special 
                education and related services for children with 
                disabilities in the State.
                    ``(B) Membership.--Such advisory panel shall 
                consist of members appointed by the Governor, or any 
                other official authorized under State law to make such 
appointments, that is representative of the State population and that 
is composed of individuals involved in, or concerned with, the 
education of children with disabilities, including--
                            ``(i) parents of children with 
                        disabilities;
                            ``(ii) individuals with disabilities;
                            ``(iii) teachers;
                            ``(iv) representatives of institutions of 
                        higher education that prepare special education 
                        and related services personnel;
                            ``(v) State and local education officials;
                            ``(vi) administrators of programs for 
                        children with disabilities;
                            ``(vii) representatives of other State 
                        agencies involved in the financing or delivery 
                        of related services to children with 
                        disabilities;
                            ``(viii) representatives of private schools 
                        and public charter schools;
                            ``(ix) at least one representative of a 
                        vocational, community, or business organization 
                        concerned with the provision of transition 
                        services to children with disabilities; and
                            ``(x) representatives from the State 
                        juvenile and adult corrections agencies.
                    ``(C) Special rule.--A majority of the members of 
                the panel shall be individuals with disabilities or 
                parents of children with disabilities.
                    ``(D) Duties.--The advisory panel shall--
                            ``(i) advise the State educational agency 
                        of unmet needs within the State in the 
                        education of children with disabilities;
                            ``(ii) comment publicly on any rules or 
                        regulations proposed by the State regarding the 
                        education of children with disabilities;
                            ``(iii) advise the State educational agency 
                        in developing evaluations and reporting on data 
                        to the Secretary under section 618;
                            ``(iv) advise the State educational agency 
                        in developing corrective action plans to 
                        address findings identified in Federal 
                        monitoring reports under this part; and
                            ``(v) advise the State educational agency 
                        in developing and implementing policies 
                        relating to the coordination of services for 
                        children with disabilities.
            ``(22) Suspension and expulsion rates.--
                    ``(A) In general.--The State educational agency 
                examines data to determine if significant discrepancies 
                are occurring in the rate of long-term suspensions and 
                expulsions of children with disabilities--
                            ``(i) among local educational agencies in 
                        the State; or
                            ``(ii) compared to such rates for 
                        nondisabled children within such agencies.
                    ``(B) Review and revision of policies.--If such 
                discrepancies are occurring, the State educational 
                agency reviews and, if appropriate, revises (or 
                requires the affected State or local educational agency 
                to revise) its policies, procedures, and practices 
                relating to the development and implementation of IEPs, 
                the use of behavioral interventions, and procedural 
                safeguards, to ensure that such policies, procedures, 
                and practices comply with this Act.
    ``(b) State Educational Agency as Provider of Free Appropriate 
Public Education or Direct Services.--If the State educational agency 
provides free appropriate public education to children with 
disabilities, or provides direct services to such children, such 
agency--
            ``(1) shall comply with any additional requirements of 
        section 613(a), as if such agency were a local educational 
        agency; and
            ``(2) may use amounts that are otherwise available to such 
        agency under this part to serve those children without regard 
        to section 613(a)(2)(A)(i) (relating to excess costs).
    ``(c) Exception for Prior State Plans.--
            ``(1) In general.--If a State has on file with the 
        Secretary policies and procedures that demonstrate that such 
        State meets any requirement of subsection (a), including any 
        policies and procedures filed under this part as in effect 
        before the effective date of the Individuals with Disabilities 
        Education Act Amendments of 1997, the Secretary shall consider 
        such State to have met such requirement for purposes of 
        receiving a grant under this part.
            ``(2) Modifications made by state.--Subject to paragraph 
        (3), an application submitted by a State in accordance with 
        this section shall remain in effect until the State submits to 
        the Secretary such modifications as the State deems necessary. 
        This section shall apply to a modification to an application to 
        the same extent and in the same manner as this section applies 
        to the original plan.
            ``(3) Modifications required by the secretary.--If, after 
        the effective date of the Individuals with Disabilities 
        Education Act Amendments of 1997, the provisions of this Act 
        are amended (or the regulations developed to carry out this Act 
        are amended), or there is a new interpretation of this Act by a 
        Federal or State Supreme court, or there is an official finding 
        of noncompliance with Federal law or regulations, the Secretary 
        may require a State to modify its application only to the 
        extent necessary to ensure the State's compliance with this 
        part.
    ``(d) Approval by the Secretary.--
            ``(1) In general.--If the Secretary determines that a State 
        is eligible to receive a grant under this part, the Secretary 
        shall notify the State of that determination.
            ``(2) Notice and hearing.--The Secretary shall not make a 
        final determination that a State is not eligible to receive a 
        grant under this part until after providing the State--
                    ``(A) with reasonable notice; and
                    ``(B) with an opportunity for a hearing.
    ``(e) Assistance Under Other Federal Programs.--Nothing in this 
title permits a State to reduce medical and other assistance available, 
or to alter eligibility, under titles V and XIX of the Social Security 
Act with respect to the provision of a free appropriate public 
education for children with disabilities in the State.
    ``(f) By-Pass for Children in Private Schools.--
            ``(1) In general.--If, on the date of enactment of the 
        Education of the Handicapped Act Amendments of 1983, a State 
        educational agency is prohibited by law from providing for the 
        participation in special programs of children with disabilities 
        enrolled in private elementary and secondary schools as 
        required by subsection (a)(10)(A), the Secretary shall, 
        notwithstanding such provision of law, arrange for the 
        provision of services to such children through arrangements 
        which shall be subject to the requirements of such subsection.
            ``(2) Payments.--
                    ``(A) Determination of amounts.--If the Secretary 
                arranges for services pursuant to this subsection, the 
                Secretary, after consultation with the appropriate 
                public and private school officials, shall pay to the 
                provider of such services for a fiscal year an amount 
                per child that does not exceed the amount determined by 
                dividing--
                            ``(i) the total amount received by the 
                        State under this part for such fiscal year; by
                            ``(ii) the number of children with 
                        disabilities served in the prior year, as 
                        reported to the Secretary by the State under 
                        section 618.
                    ``(B) Withholding of certain amounts.--Pending 
                final resolution of any investigation or complaint that 
                could result in a determination under this subsection, 
                the Secretary may withhold from the allocation of the 
                affected State educational agency the amount the 
                Secretary estimates would be necessary to pay the cost 
                of services described in subparagraph (A).
                    ``(C) Period of payments.--The period under which 
                payments are made under subparagraph (A) shall continue 
                until the Secretary determines that there will no 
                longer be any failure or inability on the part of the 
                State educational agency to meet the requirements of 
                subsection (a)(10)(A).
            ``(3) Notice and hearing.--
                    ``(A) In general.--The Secretary shall not take any 
                final action under this subsection until the State 
                educational agency affected by such action has had an 
                opportunity, for at least 45 days after receiving 
                written notice thereof, to submit written objections 
                and to appear before the Secretary or the Secretary's 
                designee to show cause why such action should not be 
                taken.
                    ``(B) Review of action.--If a State educational 
                agency is dissatisfied with the Secretary's final 
                action after a proceeding under subparagraph (A), such 
                agency may, not later than 60 days after notice of such 
                action, file with the United States court of appeals 
                for the circuit in which such State is located a 
                petition for review of that action. A copy of the 
                petition shall be forthwith transmitted by the clerk of 
                the court to the Secretary. The Secretary thereupon 
                shall file in the court the record of the proceedings 
                on which the Secretary based the Secretary's action, as 
                provided in section 2112 of title 28, United States 
                Code.
                    ``(C) Review of findings of fact.--The findings of 
                fact by the Secretary, if supported by substantial 
                evidence, shall be conclusive, but the court, for good 
                cause shown, may remand the case to the Secretary to 
                take further evidence, and the Secretary may thereupon 
                make new or modified findings of fact and may modify 
                the Secretary's previous action, and shall file in the 
                court the record of the further proceedings. Such new 
                or modified findings of fact shall likewise be 
                conclusive if supported by substantial evidence.
                    ``(D) Jurisdiction of court of appeals; review by 
                united states supreme court.--Upon the filing of a 
                petition under subparagraph (B), the United States 
                court of appeals shall have jurisdiction to affirm the 
                action of the Secretary or to set it aside, in whole or 
                in part. The judgment of the court shall be subject to 
                review by the Supreme Court of the United States upon 
                certiorari or certification as provided in section 1254 
                of title 28, United States Code.

``SEC. 613. LOCAL EDUCATIONAL AGENCY ELIGIBILITY.

    ``(a) In General.--A local educational agency is eligible for 
assistance under this part for a fiscal year if such agency 
demonstrates to the satisfaction of the State educational agency that 
it meets each of the following conditions:
            ``(1) Consistency with state policies.--The local 
        educational agency, in providing for the education of children 
        with disabilities within its jurisdiction, has in effect 
        policies, procedures, and programs that are consistent with the 
        State policies and procedures established under section 612.
            ``(2) Use of amounts.--
                    ``(A) In general.--Amounts provided to the local 
                educational agency under this part shall be expended in 
                accordance with the applicable provisions of this part 
                and--
                            ``(i) shall be used only to pay the excess 
                        costs of providing special education and 
                        related services to children with disabilities;
                            ``(ii) shall be used to supplement State, 
                        local, and other Federal funds and not to 
                        supplant such funds; and
                            ``(iii) shall not be used, except as 
                        provided in subparagraphs (B) and (C), to 
                        reduce the level of expenditures for the 
                        education of children with disabilities made by 
                        the local educational agency from local funds 
                        below the level of those expenditures for the 
                        preceding fiscal year.
                    ``(B) Exception.--Notwithstanding the restriction 
                in subparagraph (A)(iii), a local educational agency 
                may reduce the level of expenditures where such 
                reduction is attributable to--
                            ``(i) the voluntary departure, by 
                        retirement or otherwise, or departure for just 
                        cause, of special education personnel;
                            ``(ii) a decrease in the enrollment of 
                        children with disabilities;
                            ``(iii) the termination of the obligation 
                        of the agency, consistent with this part, to 
                        provide a program of special education to a 
                        particular child with a disability that is an 
                        exceptionally costly program, as determined by 
                        the State educational agency, because the 
                        child--
                                    ``(I) has left the jurisdiction of 
                                the agency;
                                    ``(II) has reached the age at which 
                                the obligation of the agency to provide 
                                a free appropriate public education to 
                                the child has terminated; or
                                    ``(III) no longer needs such 
                                program of special education; or
                            ``(iv) the termination of costly 
                        expenditures for long-term purchases, such as 
                        the acquisition of equipment or the 
                        construction of school facilities.
                    ``(C) Treatment of Federal funds in certain fiscal 
                years.--
                            (i) Notwithstanding clauses (ii) and (iii) 
                        of subparagraph (A), for any fiscal year for 
                        which amounts appropriated to carry out section 
                        611 exceeds $4,100,000,000, a local educational 
                        agency may treat as local funds, for the 
                        purpose of such clauses, up to 20 percent of 
                        the amount of funds it receives under this part 
                        that exceeds the amount it received under this 
                        part for the previous fiscal year.
                            ``(ii) Notwithstanding clause (i), if a 
                        State educational agency determines that a 
                        local educational agency is not meeting the 
                        requirements of this part, the State 
                        educational agency may prohibit the local 
                        educational agency from treating funds received 
                        under this part as local funds under clause (i) 
                        for any fiscal year, only if it is authorized 
                        to so by the State constitution or a State 
                        statute.
                    ``(D) Schoolwide programs under title i of the 
                esea.--Notwithstanding subparagraph (A) or any other 
                provision of this part, a local educational agency may 
                use funds received under this part for any fiscal year 
                to carry out a schoolwide program under section 1114 of 
                the Elementary and Secondary Education Act of 1965, 
                except that the amount so used in any such program 
                shall not exceed--
                            ``(i) the number of children with 
                        disabilities participating in the schoolwide 
                        program; multiplied by
                            ``(ii)(I) the amount received by the local 
                        educational agency under this part for that 
                        fiscal year; divided by
                            ``(II) the number of children with 
                        disabilities in the jurisdiction of that 
                        agency.
            ``(3) Personnel development.--The local educational 
        agency--
                    ``(A) shall ensure that all personnel necessary to 
                carry out this part are appropriately and adequately 
                prepared, consistent with the requirements of section 
                653(c)(3)(D); and
                    ``(B) to the extent such agency determines 
                appropriate, shall contribute to and use the 
                comprehensive system of personnel development of the 
                State established under section 612(a)(14).
            ``(4) Permissive use of funds.--Notwithstanding paragraph 
        (2)(A) or section 612(a)(18)(B) (relating to commingled funds), 
        funds provided to the local educational agency under this part 
        may be used for the following activities:
                    ``(A) Services and aids that also benefit 
                nondisabled children.--For the costs of special 
                education and related services and supplementary aids 
                and services provided in a regular class or other 
                education-related setting to a child with a disability 
                in accordance with the individualized education program 
                of the child, even if one or more nondisabled children 
                benefit from such services.
                    ``(B) Integrated and coordinated services system.--
                To develop and implement a fully integrated and 
                coordinated services system in accordance with 
                subsection (f).
            ``(5) Treatment of charter schools and their students.--In 
        carrying out this part with respect to charter schools that are 
        public schools of the local educational agency, the local 
        educational agency--
                    ``(A) serves children with disabilities attending 
                those schools in the same manner as it serves children 
                with disabilities in its other schools; and
                    ``(B) provides funds under this part to those 
                schools in the same manner as it provides those funds 
                to its other schools.
            ``(6) Information for state educational agency.--The local 
        educational agency shall provide the State educational agency 
        with information necessary to enable the State educational 
        agency to carry out its duties under this part, including, with 
        respect to paragraphs (16) and (17) of section 612(a), 
        information relating to the performance of children with 
        disabilities participating in programs carried out under this 
        part.
            ``(7) Public information.--The local educational agency 
        shall make available to parents of children with disabilities 
        and to the general public all documents relating to the 
        eligibility of such agency under this part.
    ``(b) Exception for Prior Local Plans.--
            ``(1) In general.--If a local educational agency or State 
        agency has on file with the State educational agency policies 
        and procedures that demonstrate that such local educational 
        agency, or such State agency, as the case may be, meets any 
        requirement of subsection (a), including any policies and 
        procedures filed under this part as in effect before the 
        effective date of the Individuals with Disabilities Education 
        Act Amendments of 1997, the State educational agency shall 
        consider such local educational agency or State agency, as the 
        case may be, to have met such requirement for purposes of 
        receiving assistance under this part.
            ``(2) Modification made by local educational agency.--
        Subject to paragraph (3), an application submitted by a local 
        educational agency in accordance with this section shall remain 
        in effect until it submits to the State educational agency such 
        modifications as the local educational agency deems necessary.
            ``(3) Modifications required by state educational agency.--
        If, after the effective date of the Individuals with 
        Disabilities Education Act Amendments of 1997, the provisions 
        of this Act are amended (or the regulations developed to carry 
        out this Act are amended), or there is a new interpretation of 
        this Act by Federal or State courts, or there is an official 
        finding of noncompliance with Federal or State law or 
        regulations, the State educational agency may require a local 
        educational agency to modify its application only to the extent 
        necessary to ensure the local educational agency's compliance 
        with this part or State law.
    ``(c) Notification of Local Educational Agency or State Agency in 
Case of Ineligibility.--If the State educational agency determines that 
a local educational agency or State agency is not eligible under this 
section, the State educational agency shall notify the local 
educational agency or State agency, as the case may be, of that 
determination and shall provide such local educational agency or State 
agency with reasonable notice and an opportunity for a hearing.
    ``(d) Local Educational Agency Compliance.--
            ``(1) In general.--If the State educational agency, after 
        reasonable notice and an opportunity for a hearing, finds that 
        a local educational agency or State agency that has been 
        determined to be eligible under this section is failing to 
        comply with any requirement described in subsection (a), the 
        State educational agency shall reduce or shall not provide any 
        further payments to the local educational agency or State 
        agency until the State educational agency is satisfied that the 
        local educational agency or State agency, as the case may be, 
        is complying with that requirement.
            ``(2) Additional requirement.--Any State agency or local 
        educational agency in receipt of a notice described in 
        paragraph (1) shall, by means of public notice, take such 
        measures as may be necessary to bring the pendency of an action 
        pursuant to this subsection to the attention of the public 
        within the jurisdiction of such agency.
            ``(3) Consideration.--In carrying out its responsibilities 
        under paragraph (1), the State educational agency shall 
        consider any decision made in a hearing held under section 615 
        that is adverse to the local educational agency or State agency 
        involved in that decision.
    ``(e) Joint Establishment of Eligibility.--
            ``(1) Joint establishment.--
                    ``(A) In general.--A State educational agency may 
                require a local educational agency to establish its 
                eligibility jointly with another local educational 
                agency if the State educational agency determines that 
                the local educational agency would be ineligible under 
                this section because the local educational agency would 
                not be able to establish and maintain programs of 
                sufficient size and scope to effectively meet the needs 
                of children with disabilities.
                    ``(B) Charter school exception.--A State 
                educational agency may not require a charter school 
                that is a local educational agency to jointly establish 
                its eligibility under subparagraph (A) unless it is 
                explicitly permitted to do so under the State's charter 
                school statute.
            ``(2) Amount of payments.--If a State educational agency 
        requires the joint establishment of eligibility under paragraph 
        (1), the total amount of funds made available to the affected 
        local educational agencies shall be equal to the sum of the 
        payments that each such local educational agency would have 
        received under section 611(g) if such agencies were eligible 
        for such payments.
            ``(3) Requirements.--Local educational agencies that 
        establish joint eligibility under this subsection shall--
                    ``(A) adopt policies and procedures that are 
                consistent with the State's policies and procedures 
                under section 612(a); and
                    ``(B) be jointly responsible for implementing 
                programs that receive assistance under this part.
            ``(4) Requirements for educational service agencies.--
                    ``(A) In general.--If an educational service agency 
                is required by State law to carry out programs under 
                this part, the joint responsibilities given to local 
                educational agencies under this subsection shall--
                            ``(i) not apply to the administration and 
                        disbursement of any payments received by that 
                        educational service agency; and
                            ``(ii) be carried out only by that 
                        educational service agency.
                    ``(B) Additional requirement.--Notwithstanding any 
                other provision of this subsection, an educational 
                service agency shall provide for the education of 
                children with disabilities in the least restrictive 
                environment, as required by section 612(a)(5).
    ``(f) Coordinated Services System.--
            ``(1) In general.--A local educational agency may not use 
        more than 5 percent of the amount such agency receives under 
        this part for any fiscal year, in combination with other 
        amounts (which shall include amounts other than education 
        funds), to develop and implement a coordinated services system 
        designed to improve results for children and families, 
        including children with disabilities and their families.
            ``(2) Activities.--In implementing a coordinated services 
        system under this subsection, a local educational agency may 
        carry out activities that include--
                    ``(A) improving the effectiveness and efficiency of 
                service delivery, including developing strategies that 
                promote accountability for results;
                    ``(B) service coordination and case management that 
                facilitates the linkage of individualized education 
                programs under this part and individualized family 
                service plans under part C with individualized service 
                plans under multiple Federal and State programs, such 
                as title I of the Rehabilitation Act of 1973 
                (vocational rehabilitation), title XIX of the Social 
                Security Act (Medicaid), and title XVI of the Social 
                Security Act (supplemental security income);
                    ``(C) developing and implementing interagency 
                financing strategies for the provision of education, 
                health, mental health, and social services, including 
                transition services and related services under this 
                Act; and
                    ``(D) interagency personnel development for 
                individuals working on coordinated services.
            ``(3) Coordination with certain projects under elementary 
        and secondary education act of 1965.--If a local educational 
        agency is carrying out a coordinated services project under 
        title XI of the Elementary and Secondary Education Act of 1965 
        and a coordinated services project under this part in the same 
        schools, such agency shall use amounts under this subsection in 
        accordance with the requirements of that title.
    ``(g) School-Based Improvement Plan.--
            ``(1) In general.--Each local educational agency may, in 
        accordance with paragraph (2), use funds made available under 
        this part to permit a public school within the jurisdiction of 
        the local educational agency to design, implement, and evaluate 
        a school-based improvement plan that is consistent with the 
        purposes described in section 651(b) and that is designed to 
        improve educational and transitional results for all children 
        with disabilities and, as appropriate, for other children 
        consistent with subparagraphs (A) and (B) of subsection (a)(4) 
        in that public school.
            ``(2) Authority.--
                    ``(A) In general.--A State educational agency may 
                grant authority to a local educational agency to permit 
                a public school described in paragraph (1) (through a 
                school-based standing panel established under paragraph 
                (4)(B)) to design, implement, and evaluate a school-
                based improvement plan described in paragraph (1) for a 
                period not to exceed 3 years.
                    ``(B) Responsibility of local educational agency.--
                If a State educational agency grants the authority 
                described in subparagraph (A), a local educational 
                agency that is granted such authority shall have the 
                sole responsibility of oversight of all activities 
                relating to the design, implementation, and evaluation 
                of any school-based improvement plan that a public 
                school is permitted to design under this subsection.
            ``(3) Plan requirements.--A school-based improvement plan 
        described in paragraph (1) shall--
                    ``(A) be designed to be consistent with the 
                purposes described in section 651(b) and to improve 
                educational and transitional results for all children 
                with disabilities and, as appropriate, for other 
                children consistent with subparagraphs (A) and (B) of 
                subsection (a)(4), who attend the school for which the 
                plan is designed and implemented;
                    ``(B) be designed, evaluated, and, as appropriate, 
                implemented by a school-based standing panel 
                established in accordance with paragraph (4)(B);
                    ``(C) include goals and measurable indicators to 
                assess the progress of the public school in meeting 
                such goals; and
                    ``(D) ensure that all children with disabilities 
                receive the services described in the individualized 
                education programs of such children.
            ``(4) Responsibilities of the local educational agency.--A 
        local educational agency that is granted authority under 
        paragraph (2) to permit a public school to design, implement, 
        and evaluate a school-based improvement plan shall--
                    ``(A) select each school under the jurisdiction of 
                such agency that is eligible to design, implement, and 
                evaluate such a plan;
                    ``(B) require each school selected under 
                subparagraph (A), in accordance with criteria 
                established by such local educational agency under 
                subparagraph (C), to establish a school-based standing 
                panel to carry out the duties described in paragraph 
                (3)(B);
                    ``(C) establish--
                            ``(i) criteria that shall be used by such 
                        local educational agency in the selection of an 
                        eligible school under subparagraph (A);
                            ``(ii) criteria that shall be used by a 
                        public school selected under subparagraph (A) 
                        in the establishment of a school-based standing 
                        panel to carry out the duties described in 
                        paragraph (3)(B) and that shall ensure that the 
                        membership of such panel reflects the diversity 
                        of the community in which the public school is 
                        located and includes, at a minimum--
                                    ``(I) parents of children with 
                                disabilities who attend such public 
                                school, including parents of children 
                                with disabilities from unserved and 
                                underserved populations, as 
                                appropriate;
                                    ``(II) special education and 
                                general education teachers of such 
                                public school;
                                    ``(III) special education and 
                                general education administrators, or 
                                the designee of such administrators, of 
                                such public school; and
                                    ``(IV) related services providers 
                                who are responsible for providing 
                                services to the children with 
                                disabilities who attend such public 
                                school; and
                            ``(iii) criteria that shall be used by such 
                        local educational agency with respect to the 
                        distribution of funds under this part to carry 
                        out this subsection;
                    ``(D) disseminate the criteria established under 
                subparagraph (C) to local school district personnel and 
                local parent organizations within the jurisdiction of 
                such local educational agency;
                    ``(E) require a public school that desires to 
                design, implement, and evaluate a school-based 
                improvement plan to submit an application at such time, 
                in such manner, and accompanied by such information as 
                such local educational agency shall reasonably require; 
                and
                    ``(F) establish procedures for approval by such 
                local educational agency of a school-based improvement 
                plan designed under this subsection.
            ``(5) Limitation.--A school-based improvement plan 
        described in paragraph (1) may be submitted to a local 
        educational agency for approval only if a consensus with 
        respect to any matter relating to the design, implementation, 
        or evaluation of the goals of such plan is reached by the 
        school-based standing panel that designed such plan.
            ``(6) Additional requirements.--
                    ``(A) Parental involvement.--In carrying out the 
                requirements of this subsection, a local educational 
                agency shall ensure that the parents of children with 
                disabilities are involved in the design, evaluation, 
                and, where appropriate, implementation of school-based 
                improvement plans in accordance with this subsection.
                    ``(B) Plan approval.--A local educational agency 
                may approve a school-based improvement plan of a public 
                school within the jurisdiction of such agency for a 
                period of 3 years, if--
                            ``(i) the approval is consistent with the 
                        policies, procedures, and practices established 
                        by such local educational agency and in 
                        accordance with this subsection; and
                            ``(ii) a majority of parents of children 
                        who are members of the school-based standing 
                        panel, and a majority of other members of the 
                        school-based standing panel, that designed such 
                        plan agree in writing to such plan.
            ``(7) Extension of plan.--If a public school within the 
        jurisdiction of a local educational agency meets the applicable 
        requirements and criteria described in paragraphs (3) and (4) 
        at the expiration of the 3-year approval period described in 
        paragraph (6)(B), such agency may approve a school-based 
        improvement plan of such school for an additional 3-year 
        period.
    ``(h) Direct Services by the State Educational Agency.--
            ``(1) In general.--A State educational agency shall use the 
        payments that would otherwise have been available to a local 
        educational agency or to a State agency to provide special 
        education and related services directly to children with 
        disabilities residing in the area served by that local agency, 
        or for whom that State agency is responsible, if the State 
        educational agency determines that the local education agency 
        or State agency, as the case may be--
                    ``(A) has not provided the information needed to 
                establish the eligibility of such agency under this 
                section;
                    ``(B) is unable to establish and maintain programs 
                of free appropriate public education that meet the 
                requirements of subsection (a);
                    ``(C) is unable or unwilling to be consolidated 
                with one or more local educational agencies in order to 
                establish and maintain such programs; or
                    ``(D) has one or more children with disabilities 
                who can best be served by a regional or State program 
                or service-delivery system designed to meet the needs 
                of such children.
            ``(2) Manner and location of education and services.--The 
        State educational agency may provide special education and 
        related services under paragraph (1) in such manner and at such 
        locations (including regional or State centers) as the State 
        agency considers appropriate. Such education and services shall 
        be provided in accordance with this part.
    ``(i) State Agency Eligibility.--Any State agency that desires to 
receive a subgrant for any fiscal year under section 611(g) shall 
demonstrate to the satisfaction of the State educational agency that--
            ``(1) all children with disabilities who are participating 
        in programs and projects funded under this part receive a free 
        appropriate public education, and that those children and their 
        parents are provided all the rights and procedural safeguards 
        described in this part; and
            ``(2) the agency meets such other conditions of this 
        section as the Secretary determines to be appropriate.
    ``(j) Disciplinary Information.--The State may require that a local 
educational agency include in the records of a child with a disability 
a statement of any current or previous disciplinary action that has 
been taken against the child and transmit such statement to the same 
extent that such disciplinary information is included in, and 
transmitted with, the student records of nondisabled children. The 
statement may include a description of any behavior engaged in by the 
child that required disciplinary action, a description of the 
disciplinary action taken, and any other information that is relevant 
to the safety of the child and other individuals involved with the 
child. If the State adopts such a policy, and the child transfers from 
one school to another, the transmission of any of the child's records 
must include both the child's current individualized education program 
and any such statement of current or previous disciplinary action that 
has been taken against the child.

``SEC. 614. EVALUATIONS, ELIGIBILITY DETERMINATIONS, INDIVIDUALIZED 
              EDUCATION PROGRAMS, AND EDUCATIONAL PLACEMENTS.

    ``(a) Evaluations and Reevaluations.--
            ``(1) Initial evaluations.--
                    ``(A) In general.--A State educational agency, 
                other State agency, or local educational agency shall 
                conduct a full and individual initial evaluation, in 
                accordance with this paragraph and subsection (b), 
                before the initial provision of special education and 
                related services to a child with a disability under 
                this part.
                    ``(B) Procedures.--Such initial evaluation shall 
                consist of procedures--
                            ``(i) to determine whether a child is a 
                        child with a disability (as defined in section 
                        602(3)); and
                            ``(ii) to determine the educational needs 
                        of such child.
                    ``(C) Parental consent.--
                            ``(i) In general.--The agency proposing to 
                        conduct an initial evaluation to determine if 
                        the child qualifies as a child with a 
                        disability as defined in section 602(3)(A) or 
                        602(3)(B) shall obtain an informed consent from 
                        the parent of such child before the evaluation 
                        is conducted. Parental consent for evaluation 
                        shall not be construed as consent for placement 
                        for receipt of special education and related 
                        services.
                            ``(ii) Refusal.--If the parents of such 
                        child refuse consent for the evaluation, the 
                        agency may continue to pursue an evaluation by 
                        utilizing the mediation and due process 
                        procedures under section 615, except to the 
                        extent inconsistent with State law relating to 
                        parental consent.
            ``(2) Reevaluations.--A local educational agency shall 
        ensure that a reevaluation of each child with a disability is 
        conducted--
                    ``(A) if conditions warrant a reevaluation or if 
                the child's parent or teacher requests a reevaluation, 
                but at least once every 3 years; and
                    ``(B) in accordance with subsections (b) and (c).
    ``(b) Evaluation Procedures.--
            ``(1) Notice.--The local educational agency shall provide 
        notice to the parents of a child with a disability, in 
        accordance with subsections (b)(3), (b)(4), and (c) of section 
        615, that describes any evaluation procedures such agency 
        proposes to conduct.
            ``(2) Conduct of evaluation.--In conducting the evaluation, 
        the local educational agency shall--
                    ``(A) use a variety of assessment tools and 
                strategies to gather relevant functional and 
                developmental information, including information 
                provided by the parent, that may assist in determining 
                whether the child is a child with a disability and the 
                content of the child's individualized education 
                program, including information related to enabling the 
                child to be involved in and progress in the general 
                curriculum or, for preschool children, to participate 
                in appropriate activities;
                    ``(B) not use any single procedure as the sole 
                criterion for determining whether a child is a child 
                with a disability or determining an appropriate 
                educational program for the child; and
                    ``(C) use technically sound instruments that may 
                assess the relative contribution of cognitive and 
                behavioral factors, in addition to physical or 
                developmental factors.
            ``(3) Additional requirements.--Each local educational 
        agency shall ensure that--
                    ``(A) tests and other evaluation materials used to 
                assess a child under this section--
                            ``(i) are selected and administered so as 
                        not to be discriminatory on a racial or 
                        cultural basis; and
                            ``(ii) are provided and administered in the 
                        child's native language or other mode of 
                        communication, unless it is clearly not 
                        feasible to do so; and
                    ``(B) any standardized tests that are given to the 
                child--
                            ``(i) have been validated for the specific 
                        purpose for which they are used;
                            ``(ii) are administered by trained and 
                        knowledgeable personnel; and
                            ``(iii) are administered in accordance with 
                        any instructions provided by the producer of 
                        such tests;
                    ``(C) the child is assessed in all areas of 
                suspected disability; and
                    ``(D) assessment tools and strategies that provide 
                relevant information that directly assists persons in 
                determining the educational needs of the child are 
                provided.
            ``(4) Determination of eligibility.--Upon completion of 
        administration of tests and other evaluation materials--
                    ``(A) the determination of whether the child is a 
                child with a disability as defined in section 602(3) 
                shall be made by a team of qualified professionals and 
                the parent of the child in accordance with paragraph 
                (5); and
                    ``(B) a copy of the evaluation report and the 
                documentation of determination of eligibility will be 
                given to the parent.
            ``(5) Special rule for eligibility determination.--In 
        making a determination of eligibility under paragraph (4)(A), a 
        child shall not be determined to be a child with a disability 
        if the determinant factor for such determination is lack of 
        instruction in reading or math or limited English proficiency.
    ``(c) Additional Requirements For Evaluation and Reevaluations.--
            ``(1) Review of existing evaluation data.--As part of an 
        initial evaluation (if appropriate) and as part of any 
        reevaluation under this section, the IEP Team described in 
        subsection (d)(1)(B) and other qualified professionals, as 
        appropriate, shall--
                    ``(A) review existing evaluation data on the child, 
                including evaluations and information provided by the 
                parents of the child, current classroom-based 
                assessments and observations, and teacher and related 
                services providers observation; and
                    ``(B) on the basis of that review, and input from 
                the child's parents, identify what additional data, if 
                any, are needed to determine--
                            ``(i) whether the child has a particular 
                        category of disability, as described in section 
                        602(3), or, in case of a reevaluation of a 
                        child, whether the child continues to have such 
                        a disability;
                            ``(ii) the present levels of performance 
                        and educational needs of the child;
                            ``(iii) whether the child needs special 
                        education and related services, or in the case 
                        of a reevaluation of a child, whether the child 
                        continues to need special education and related 
                        services; and
                            ``(iv) whether any additions or 
                        modifications to the special education and 
                        related services are needed to enable the child 
                        to meet the measurable annual goals set out in 
                        the individualized education program of the 
                        child and to participate, as appropriate, in 
                        the general curriculum.
            ``(2) Source of data.--The local educational agency shall 
        administer such tests and other evaluation materials as may be 
        needed to produce the data identified by the IEP Team under 
        paragraph (1)(B).
            ``(3) Parental consent.--Each local educational agency 
        shall obtain informed parental consent, in accordance with 
        subsection (a)(1)(C), prior to conducting any reevaluation of a 
        child with a disability, except that such informed parent 
        consent need not be obtained if the local educational agency 
        can demonstrate that it had taken reasonable measures to obtain 
        such consent and the child's parent has failed to respond.
            ``(4) Requirements if additional data are not needed.--If 
        the IEP Team and other qualified professionals, as appropriate, 
        determine that no additional data are needed to determine 
        whether the child continues to be a child with a disability, 
        the local educational agency--
                    ``(A) shall notify the child's parents of--
                            ``(i) that determination and the reasons 
                        for it; and
                            ``(ii) the right of such parents to request 
                        an assessment to determine whether the child 
                        continues to be a child with a disability; and
                    ``(B) shall not be required to conduct such an 
                assessment unless requested to by the child's parents.
            ``(5) Evaluations before change in eligibility.--A local 
        educational agency shall evaluate a child with a disability in 
        accordance with this section before determining that the child 
        is no longer a child with a disability.
    ``(d) Individualized Education Programs.--
            ``(1) Definitions.--As used in this title:
                    ``(A) Individualized education program.--The term 
                `individualized education program' or `IEP' means a 
                written statement for each child with a disability that 
                is developed, reviewed, and revised in accordance with 
                this section and that includes--
                            ``(i) a statement of the child's present 
                        levels of educational performance, including--
                                    ``(I) how the child's disability 
                                affects the child's involvement and 
                                progress in the general curriculum; or
                                    ``(II) for preschool children, as 
                                appropriate, how the disability affects 
                                the child's participation in 
                                appropriate activities;
                            ``(ii) a statement of measurable annual 
                        goals, including benchmarks or short-term 
                        objectives, related to--
                                    ``(I) meeting the child's needs 
                                that result from the child's disability 
                                to enable the child to be involved in 
                                and progress in the general curriculum; 
                                and
                                    ``(II) meeting each of the child's 
                                other educational needs that result 
                                from the child's disability;
                            ``(iii) a statement of the special 
                        education and related services and 
                        supplementary aids and services to be provided 
                        to the child, or on behalf of the child, and a 
                        statement of the program modifications or 
                        supports for school personnel that will be 
                        provided for the child--
                                    ``(I) to advance appropriately 
                                toward attaining the annual goals;
                                    ``(II) to be involved and progress 
                                in the general curriculum in accordance 
                                with clause (i) and to participate in 
                                extracurricular and other nonacademic 
                                activities; and
                                    ``(III) to be educated and 
                                participate with other children with 
                                disabilities and nondisabled children 
                                in the activities described in this 
                                paragraph;
                            ``(iv) an explanation of the extent, if 
                        any, to which the child will not participate 
                        with nondisabled children in the regular class 
                        and in the activities described in clause 
                        (iii);
                            ``(v)(I) a statement of any individual 
                        modifications in the administration of State or 
                        districtwide assessments of student achievement 
that are needed in order for the child to participate in such 
assessment; and
                            ``(II) if the IEP Team determines that the 
                        child will not participate in a particular 
                        State or districtwide assessment of student 
                        achievement (or part of such an assessment), a 
                        statement of--
                                    ``(aa) why that assessment is not 
                                appropriate for the child; and
                                    ``(bb) how the child will be 
                                assessed;
                            ``(vi) the projected date for the beginning 
                        of the services and modifications described in 
                        clause (iii), and the anticipated frequency, 
                        location, and duration of those services and 
                        modifications;
                            ``(vii)(I) beginning at age 14, and updated 
                        annually, a statement of the transition service 
                        needs of the child under the applicable 
                        components of the child's IEP that focuses on 
                        the child's courses of study (such as 
                        participation in advanced-placement courses or 
                        a vocational education program);
                            ``(II) beginning at age 16 (or younger, if 
                        determined appropriate by the IEP Team), a 
                        statement of needed transition services for the 
                        child, including, when appropriate, a statement 
                        of the interagency responsibilities or any 
                        needed linkages; and
                            ``(III) beginning at least one year before 
                        the child reaches the age of majority under 
                        State law, a statement that the child has been 
                        informed of his or her rights under this title, 
                        if any, that will transfer to the child on 
                        reaching the age of majority under section 
                        615(m); and
                            ``(viii) a statement of--
                                    ``(I) how the child's progress 
                                toward the annual goals described in 
                                clause (ii) will be measured; and
                                    ``(II) how the child's parents will 
                                be regularly informed (by such means as 
                                periodic report cards), at least as 
                                often as parents are informed of their 
                                nondisabled children's progress, of--
                                            ``(aa) their child's 
                                        progress toward the annual 
                                        goals described in clause (ii); 
                                        and
                                            ``(bb) the extent to which 
                                        that progress is sufficient to 
                                        enable the child to achieve the 
                                        goals by the end of the year.
                    ``(B) Individualized education program team.--The 
                term `individualized education program team' or `IEP 
                Team' means a group of individuals composed of--
                            ``(i) the parents of a child with a 
                        disability;
                            ``(ii) at least one regular education 
                        teacher of such child (if the child is, or may 
                        be, participating in the regular education 
                        environment);
                            ``(iii) at least one special education 
                        teacher, or where appropriate, at least one 
                        special education provider of such child;
                            ``(iv) a representative of the local 
                        educational agency who--
                                    ``(I) is qualified to provide, or 
                                supervise the provision of, specially 
                                designed instruction to meet the unique 
                                needs of children with disabilities;
                                    ``(II) is knowledgeable about the 
                                general curriculum; and
                                    ``(III) is knowledgeable about the 
                                availability of resources of the local 
                                educational agency;
                            ``(v) an individual who can interpret the 
                        instructional implications of evaluation 
                        results, who may be a member of the team 
                        described in clauses (ii) through (vi);
                            ``(vi) at the discretion of the parent or 
                        the agency, other individuals who have 
                        knowledge or special expertise regarding the 
                        child, including related services personnel as 
                        appropriate; and
                            ``(vii) whenever appropriate, the child 
                        with a disability.
            ``(2) Requirement that program be in effect.--
                    ``(A) In general.--At the beginning of each school 
                year, each local educational agency, State educational 
                agency, or other State agency, as the case may be, 
                shall have in effect, for each child with a disability 
                in its jurisdiction, an individualized education 
                program, as defined in paragraph (1)(A).
                    ``(B) Program for child aged 3 through 5.--In the 
                case of a child with a disability aged 3 through 5 (or, 
                at the discretion of the State educational agency, a 2 
                year-old child with a disability who will turn age 3 
                during the school year), an individualized family 
                service plan that contains the material described in 
                section 636, and that is developed in accordance with 
                this section, may serve as the IEP of the child if 
                using that plan as the IEP is--
                            ``(i) consistent with State policy; and
                            ``(ii) agreed to by the agency and the 
                        child's parents.
            ``(3) Development of iep.--
                    ``(A) In general.--In developing each child's IEP, 
                the IEP Team, subject to subparagraph (C), shall 
                consider--
                            ``(i) the strengths of the child and the 
                        concerns of the parents for enhancing the 
                        education of their child; and
                            ``(ii) the results of the initial 
                        evaluation or most recent evaluation of the 
                        child.
                    ``(B) Consideration of special factors.--The IEP 
                Team shall--
                            ``(i) in the case of a child whose behavior 
                        impedes his or her learning or that of others, 
                        consider, when appropriate, strategies, 
                        including positive behavioral interventions, 
                        strategies, and supports to address that 
                        behavior;
                            ``(ii) in the case of a child with limited 
                        English proficiency, consider the language 
                        needs of the child as such needs relate to the 
                        child's IEP;
                            ``(iii) in the case of a child who is blind 
                        or visually impaired, provide for instruction 
                        in Braille and the use of Braille unless the 
                        IEP Team determines, after an evaluation of the 
                        child's reading and writing skills, needs, and 
                        appropriate reading and writing media 
                        (including an evaluation of the child's future 
                        needs for instruction in Braille or the use of 
                        Braille), that instruction in Braille or the 
                        use of Braille is not appropriate for the 
                        child;
                            ``(iv) consider the communication needs of 
                        the child, and in the case of a child who is 
                        deaf or hard of hearing, consider the child's 
                        language and communication needs, opportunities 
                        for direct communications with peers and 
                        professional personnel in the child's language 
                        and communication mode, academic level, and 
full range of needs, including opportunities for direct instruction in 
the child's language and communication mode; and
                            ``(v) consider whether the child requires 
                        assistive technology devices and services.
                    ``(C) Requirement with respect to regular education 
                teacher.--The regular education teacher of the child, 
                as a member of the IEP Team, shall, to the extent 
                appropriate, participate in the development of the IEP 
                of the child, including the determination of 
                appropriate positive behavioral interventions and 
                strategies and the determination of supplementary aids 
                and services, program modifications, and support for 
                school personnel consistent with paragraph (1)(A)(iii).
            ``(4) Review and revision of iep.--
                    ``(A) In general.--The local educational agency 
                shall ensure that, subject to subparagraph (B), the IEP 
                Team--
                            ``(i) reviews the child's IEP periodically, 
                        but not less than annually to determine whether 
                        the annual goals for the child are being 
                        achieved; and
                            ``(ii) revises the IEP as appropriate to 
                        address--
                                    ``(I) any lack of expected progress 
                                toward the annual goals and in the 
                                general curriculum, where appropriate;
                                    ``(II) the results of any 
                                reevaluation conducted under this 
                                section;
                                    ``(III) information about the child 
                                provided to, or by, the parents, as 
                                described in subsection (c)(1)(B);
                                    ``(IV) the child's anticipated 
                                needs; or
                                    ``(V) other matters.
                    ``(B) Requirement with respect to regular education 
                teacher.--The regular education teacher of the child, 
                as a member of the IEP Team, shall, to the extent 
                appropriate, participate in the review and revision of 
                the IEP of the child.
            ``(5) Failure to meet transition objectives.--If a 
        participating agency, other than the local educational agency, 
        fails to provide the transition services described in the IEP 
        in accordance with paragraph (1)(A)(vii), the local educational 
        agency shall reconvene the IEP Team to identify alternative 
        strategies to meet the transition objectives for the child set 
        out in that program.
            ``(6) Children with disabilities in adult prisons.--
                    ``(A) In general.--The following requirements do 
                not apply to children with disabilities who are 
                convicted as adults under State law and incarcerated in 
                adult prisons:
                            ``(i) The requirements contained in section 
                        612(a)(17) and paragraph (1)(A)(v) of this 
                        subsection (relating to participation of 
                        children with disabilities in general 
                        assessments).
                            ``(ii) The requirements of subclauses (I) 
                        and (II) of paragraph (1)(A)(vii) of this 
                        subsection (relating to transition planning and 
                        transition services), do not apply with respect 
                        to such children whose eligibility under this 
                        part will end, because of their age, before 
                        they will be released from prison.
                    ``(B) Additional requirement.--If a child with a 
                disability is convicted as an adult under State law and 
                incarcerated in an adult prison, the child's IEP team 
                may modify the child's IEP or placement notwithstanding 
                the requirements of sections 612(a)(5)(A) and 
                614(d)(1)(A) if the State has demonstrated a bona fide 
                security or compelling penological interest that cannot 
                otherwise be accommodated.
    ``(e) Construction.--Nothing in this section shall be construed to 
require the IEP team to include information under one component of a 
child's IEP that is already contained under another component of such 
IEP.
    ``(f) Educational Placements.--Each local educational agency or 
State educational agency shall ensure that the parents of each child 
with a disability are members of any group that makes decisions on the 
educational placement of their child.

``SEC. 615. PROCEDURAL SAFEGUARDS.

    ``(a) Establishment of Procedures.--Any State educational agency, 
State agency, or local educational agency that receives assistance 
under this part shall establish and maintain procedures in accordance 
with this section to ensure that children with disabilities and their 
parents are guaranteed procedural safeguards with respect to the 
provision of free appropriate public education by such agencies.
    ``(b) Types of Procedures.--The procedures required by this section 
shall include--
            ``(1) an opportunity for the parents of a child with a 
        disability to examine all records relating to such child and to 
        participate in meetings with respect to the identification, 
        evaluation, and educational placement of the child, and the 
        provision of a free appropriate public education to such child, 
        and to obtain an independent educational evaluation of the 
        child;
            ``(2) procedures to protect the rights of the child 
        whenever the parents of the child are not known, the agency 
        cannot, after reasonable efforts, locate the parents, or the 
        child is a ward of the State, including the assignment of an 
        individual (who shall not be an employee of the State 
        educational agency, the local educational agency, or any other 
        agency that is involved in the education or care of the child) 
        to act as a surrogate for the parents;
            ``(3) written prior notice to the parents of the child 
        whenever such agency--
                    ``(A) proposes to initiate or change; or
                    ``(B) refuses to initiate or change;
        the identification, evaluation, or educational placement of the 
        child, in accordance with subsection (c), or the provision of a 
        free appropriate public education to the child;
            ``(4) procedures designed to ensure that the notice 
        required by paragraph (3) is in the native language of the 
        parents, unless it clearly is not feasible to do so;
            ``(5) an opportunity for mediation in accordance with 
        subsection (e);
            ``(6) an opportunity to present complaints with respect to 
        any matter relating to the identification, evaluation, or 
        educational placement of the child, or the provision of a free 
        appropriate public education to such child;
            ``(7) procedures that require the parent of a child with a 
        disability, or the attorney representing the child, to provide 
        notice (which shall remain confidential)--
                    ``(A) to the State educational agency or local 
                educational agency, as the case may be, in the 
                complaint filed under paragraph (6); and
                    ``(B) that shall include--
                            ``(i) the name of the child, the address of 
                        the residence of the child, and the name of the 
                        school the child is attending;
                            ``(ii) a description of the nature of the 
                        problem of the child relating to such proposed 
                        initiation or change, including facts relating 
                        to such problem; and
                            ``(iii) a proposed resolution of the 
                        problem to the extent known and available to 
                        the parents at the time; and
            ``(8) procedures that require the State educational agency 
        to develop a model form to assist parents in filing a complaint 
        in accordance with paragraph (7).
    ``(c) Content of Prior Written Notice.--The notice required by 
subsection (b)(3) shall include--
            ``(1) a description of the action proposed or refused by 
        the agency;
            ``(2) an explanation of why the agency proposes or refuses 
        to take the action;
            ``(3) a description of any other options that the agency 
        considered and the reasons why those options were rejected;
            ``(4) a description of each evaluation procedure, test, 
        record, or report the agency used as a basis for the proposed 
        or refused action;
            ``(5) a description of any other factors that are relevant 
        to the agency's proposal or refusal;
            ``(6) a statement that the parents of a child with a 
        disability have protection under the procedural safeguards of 
        this part and, if this notice is not an initial referral for 
        evaluation, the means by which a copy of a description of the 
        procedural safeguards can be obtained; and
            ``(7) sources for parents to contact to obtain assistance 
        in understanding the provisions of this part.
    ``(d) Procedural Safeguards Notice.--
            ``(1) In general.--A copy of the procedural safeguards 
        available to the parents of a child with a disability shall be 
        given to the parents, at a minimum--
                    ``(A) upon initial referral for evaluation;
                    ``(B) upon each notification of an individualized 
                education program meeting and upon reevaluation of the 
                child; and
                    ``(C) upon registration of a complaint under 
                subsection (b)(6).
            ``(2) Contents.--The procedural safeguards notice shall 
        include a full explanation of the procedural safeguards, 
        written in the native language of the parents, unless it 
        clearly is not feasible to do so, and written in an easily 
        understandable manner, available under this section and under 
        regulations promulgated by the Secretary relating to--
                    ``(A) independent educational evaluation;
                    ``(B) prior written notice;
                    ``(C) parental consent;
                    ``(D) access to educational records;
                    ``(E) opportunity to present complaints;
                    ``(F) the child's placement during pendency of due 
                process proceedings;
                    ``(G) procedures for students who are subject to 
                placement in an interim alternative educational 
                setting;
                    ``(H) requirements for unilateral placement by 
                parents of children in private schools at public 
                expense;
                    ``(I) mediation;
                    ``(J) due process hearings, including requirements 
                for disclosure of evaluation results and 
                recommendations;
                    ``(K) State-level appeals (if applicable in that 
                State);
                    ``(L) civil actions; and
                    ``(M) attorneys' fees.
    ``(e) Mediation.--
            ``(1) In general.--Any State educational agency or local 
        educational agency that receives assistance under this part 
        shall ensure that procedures are established and implemented to 
        allow parties to disputes involving any matter described in 
        subsection (b)(6) to resolve such disputes through a mediation 
        process which, at a minimum, shall be available whenever a 
        hearing is requested under subsection (f) or (k).
            ``(2) Requirements.--Such procedures shall meet the 
        following requirements:
                    ``(A) The procedures shall ensure that the 
                mediation process--
                            ``(i) is voluntary on the part of the 
                        parties;
                            ``(ii) is not used to deny or delay a 
                        parent's right to a due process hearing under 
                        subsection (f), or to deny any other rights 
                        afforded under this part; and
                            ``(iii) is conducted by a qualified and 
                        impartial mediator who is trained in effective 
                        mediation techniques.
                    ``(B) A local educational agency or a State agency 
                may establish procedures to require parents who choose 
                not to use the mediation process to meet, at a time and 
                location convenient to the parents, with a 
                disinterested party who is under contract with--
                            ``(i) a parent training and information 
                        center or community parent resource center in 
the State established under section 682 or 683; or
                            ``(ii) an appropriate alternative dispute 
                        resolution entity;
                to encourage the use, and explain the benefits, of the 
                mediation process to the parents.
                    ``(C) The State shall maintain a list of 
                individuals who are qualified mediators and 
                knowledgeable in laws and regulations relating to the 
                provision of special education and related services.
                    ``(D) The State shall bear the cost of the 
                mediation process, including the costs of meetings 
                described in subparagraph (B).
                    ``(E) Each session in the mediation process shall 
                be scheduled in a timely manner and shall be held in a 
                location that is convenient to the parties to the 
                dispute.
                    ``(F) An agreement reached by the parties to the 
                dispute in the mediation process shall be set forth in 
                a written mediation agreement.
                    ``(G) Discussions that occur during the mediation 
                process shall be confidential and may not be used as 
                evidence in any subsequent due process hearings or 
                civil proceedings and the parties to the mediation 
                process may be required to sign a confidentiality 
                pledge prior to the commencement of such process.
    ``(f) Impartial Due Process Hearing.--
            ``(1) In general.--Whenever a complaint has been received 
        under subsection (b)(6) or (k) of this section, the parents 
        involved in such complaint shall have an opportunity for an 
        impartial due process hearing, which shall be conducted by the 
        State educational agency or by the local educational agency, as 
        determined by State law or by the State educational agency.
            ``(2) Disclosure of evaluations and recommendations.--
                    ``(A) In general.--At least 5 business days prior 
                to a hearing conducted pursuant to paragraph (1), each 
                party shall disclose to all other parties all 
                evaluations completed by that date and recommendations 
                based on the offering party's evaluations that the 
                party intends to use at the hearing.
                    ``(B) Failure to disclose.--A hearing officer may 
                bar any party that fails to comply with subparagraph 
                (A) from introducing the relevant evaluation or 
                recommendation at the hearing without the consent of 
                the other party.
            ``(3) Limitation on conduct of hearing.--A hearing 
        conducted pursuant to paragraph (1) may not be conducted by an 
        employee of the State educational agency or the local 
        educational agency involved in the education or care of the 
        child.
    ``(g) Appeal.--If the hearing required by subsection (f) is 
conducted by a local educational agency, any party aggrieved by the 
findings and decision rendered in such a hearing may appeal such 
findings and decision to the State educational agency. Such agency 
shall conduct an impartial review of such decision. The officer 
conducting such review shall make an independent decision upon 
completion of such review.
    ``(h) Safeguards.--Any party to a hearing conducted pursuant to 
subsection (f) or (k), or an appeal conducted pursuant to subsection 
(g), shall be accorded--
            ``(1) the right to be accompanied and advised by counsel 
        and by individuals with special knowledge or training with 
        respect to the problems of children with disabilities;
            ``(2) the right to present evidence and confront, cross-
        examine, and compel the attendance of witnesses;
            ``(3) the right to a written, or, at the option of the 
        parents, electronic verbatim record of such hearing; and
            ``(4) the right to written, or, at the option of the 
        parents, electronic findings of fact and decisions (which 
        findings and decisions shall be made available to the public 
        consistent with the requirements of section 617(c) (relating to 
        the confidentiality of data, information, and records) and 
        shall also be transmitted to the advisory panel established 
        pursuant to section 612(a)(21)).
    ``(i) Administrative Procedures.--
            ``(1) In general.--
                    ``(A) Decision made in hearing.--A decision made in 
                a hearing conducted pursuant to subsection (f) or (k) 
                shall be final, except that any party involved in such 
                hearing may appeal such decision under the provisions 
                of subsection (g) and paragraph (2) of this subsection.
                    ``(B) Decision made at appeal.--A decision made 
                under subsection (g) shall be final, except that any 
                party may bring an action under paragraph (2) of this 
                subsection.
            ``(2) Right to bring civil action.--
                    ``(A) In general.--Any party aggrieved by the 
                findings and decision made under subsection (f) or (k) 
                who does not have the right to an appeal under 
                subsection (g), and any party aggrieved by the findings 
                and decision under this subsection, shall have the 
                right to bring a civil action with respect to the 
                complaint presented pursuant to this section, which 
                action may be brought in any State court of competent 
                jurisdiction or in a district court of the United 
                States without regard to the amount in controversy.
                    ``(B) Additional requirements.--In any action 
                brought under this paragraph, the court--
                            ``(i) shall receive the records of the 
                        administrative proceedings;
                            ``(ii) shall hear additional evidence at 
                        the request of a party; and
                            ``(iii) basing its decision on the 
                        preponderance of the evidence, shall grant such 
                        relief as the court determines is appropriate.
            ``(3) Jurisdiction of district courts; attorneys' fees.--
                    ``(A) In general.--The district courts of the 
                United States shall have jurisdiction of actions 
                brought under this section without regard to the amount 
                in controversy.
                    ``(B) Award of attorneys' fees.--In any action or 
                proceeding brought under this section, the court, in 
                its discretion, may award reasonable attorneys' fees as 
                part of the costs to the parents of a child with a 
                disability who is the prevailing party.
                    ``(C) Determination of amount of attorneys' fees.--
                Fees awarded under this paragraph shall be based on 
                rates prevailing in the community in which the action 
                or proceeding arose for the kind and quality of 
                services furnished. No bonus or multiplier may be used 
                in calculating the fees awarded under this subsection.
                    ``(D) Prohibition of attorneys' fees and related 
                costs for certain services.--
                            ``(i) Attorneys' fees may not be awarded 
                        and related costs may not be reimbursed in any 
                        action or proceeding under this section for 
                        services performed subsequent to the time of a 
                        written offer of settlement to a parent if--
                                    ``(I) the offer is made within the 
                                time prescribed by Rule 68 of the 
                                Federal Rules of Civil Procedure or, in 
                                the case of an administrative 
                                proceeding, at any time more than ten 
                                days before the proceeding begins;
                                    ``(II) the offer is not accepted 
                                within 10 days; and
                                    ``(III) the court or administrative 
                                hearing officer finds that the relief 
                                finally obtained by the parents is not 
                                more favorable to the parents than the 
                                offer of settlement.
                            ``(ii) Attorneys' fees may not be awarded 
                        relating to any meeting of the IEP Team unless 
                        such meeting is convened as a result of an 
                        administrative proceeding or judicial action, 
                        or, at the discretion of the State, for a 
                        mediation described in subsection (e) that is 
                        conducted prior to the filing of a complaint 
                        under subsection (b)(6) or (k) of this section.
                    ``(E) Exception to prohibition on attorneys' fees 
                and related costs.--Notwithstanding subparagraph (D), 
                an award of attorneys' fees and related costs may be 
                made to a parent who is the prevailing party and who 
                was substantially justified in rejecting the settlement 
                offer.
                    ``(F) Reduction in amount of attorneys' fees.--
                Except as provided in subparagraph (G), whenever the 
                court finds that--
                            ``(i) the parent, during the course of the 
                        action or proceeding, unreasonably protracted 
                        the final resolution of the controversy;
                            ``(ii) the amount of the attorneys' fees 
                        otherwise authorized to be awarded unreasonably 
                        exceeds the hourly rate prevailing in the 
                        community for similar services by attorneys of 
                        reasonably comparable skill, reputation, and 
                        experience;
                            ``(iii) the time spent and legal services 
                        furnished were excessive considering the nature 
                        of the action or proceeding; or
                            ``(iv) the attorney representing the parent 
                        did not provide to the school district the 
                        appropriate information in the due process 
                        complaint in accordance with subsection (b)(7);
                the court shall reduce, accordingly, the amount of the 
                attorneys' fees awarded under this section.
                    ``(G) Exception to reduction in amount of 
                attorneys' fees.--The provisions of subparagraph (F) 
                shall not apply in any action or proceeding if the 
                court finds that the State or local educational agency 
                unreasonably protracted the final resolution of the 
                action or proceeding or there was a violation of this 
                section.
    ``(j) Maintenance of Current Educational Placement.--Except as 
provided in subsection (k)(7), during the pendency of any proceedings 
conducted pursuant to this section, unless the State or local 
educational agency and the parents otherwise agree, the child shall 
remain in the then-current educational placement of such child, or, if 
applying for initial admission to a public school, shall, with the 
consent of the parents, be placed in the public school program until 
all such proceedings have been completed.
    ``(k) Placement in Alternative Educational Setting.--
            ``(1) Authority of school personnel.--
                    ``(A) School personnel under this section may order 
                a change in the placement of a child with a 
                disability--
                            ``(i) to an appropriate interim alternative 
                        educational setting, another setting, or 
                        suspension, for not more than 10 school days 
                        (to the extent such alternatives would be 
                        applied to children without disabilities); and
                            ``(ii) to an appropriate interim 
                        alternative educational setting for the same 
                        amount of time that a child without a 
                        disability would be subject to discipline, but 
                        for not more than 45 days if--
                                    ``(I) the child carries a weapon to 
                                school or to a school function under 
                                the jurisdiction of a State or a local 
                                educational agency; or
                                    ``(II) the child knowingly 
                                possesses or uses illegal drugs or 
                                sells or solicits the sale of a 
                                controlled substance while at school or 
                                a school function under the 
                                jurisdiction of a State or local 
                                educational agency.
                    ``(B) Either before or not later than 10 days after 
                taking a disciplinary action described in subparagraph 
                (A)--
                            ``(i) if the local educational agency did 
                        not conduct a functional behavioral assessment 
                        and implement a behavioral intervention plan 
                        for such child before the behavior that 
                        resulted in the suspension described in 
                        subparagraph (A), the agency shall convene an 
                        IEP meeting to develop an assessment plan to 
                        address that behavior; or
                            ``(ii) if the child already has a 
                        behavioral intervention plan, the IEP Team 
                        shall review the plan and modify it, as 
                        necessary, to address the behavior.
            ``(2) Authority of hearing officer.--A hearing officer 
        under this section may order a change in the placement of a 
        child with a disability to an appropriate interim alternative 
        educational setting for not more than 45 days if the hearing 
        officer--
                    ``(A) determines that the public agency has 
                demonstrated by substantial evidence that maintaining 
                the current placement of such child is substantially 
                likely to result in injury to the child or to others;
                    ``(B) considers the appropriateness of the child's 
                current placement;
                    ``(C) considers whether the public agency has made 
                reasonable efforts to minimize the risk of harm in the 
                child's current placement, including the use of 
                supplementary aids and services; and
                    ``(D) determines that the interim alternative 
                educational setting meets the requirements of paragraph 
                (3)(B).
            ``(3) Determination of setting.--
                    ``(A) In general.--The alternative educational 
                setting described in paragraph (1)(A)(ii) shall be 
                determined by the IEP Team.
                    ``(B) Additional requirements.--Any interim 
                alternative educational setting in which a child is 
                placed under paragraph (1) or (2) shall--
                            ``(i) be selected so as to enable the child 
                        to continue to participate in the general 
                        curriculum, although in another setting, and to 
                        continue to receive those services and 
                        modifications, including those described in the 
                        child's current IEP, that will enable the child 
                        to meet the goals set out in that IEP; and
                            ``(ii) include services and modifications 
                        designed to address the behavior described in 
                        paragraph (1) or paragraph (2) so that it does 
                        not recur.
            ``(4) Manifestation determination review.--
                    ``(A) In general.--If a disciplinary action is 
                contemplated as described in paragraph (1) or paragraph 
                (2) for a behavior of a child with a disability 
                described in either of those paragraphs, or if a 
                disciplinary action involving a change of placement for 
                more than 10 days is contemplated for a child with a 
                disability who has engaged in other behavior that 
                violated any rule or code of conduct of the local 
                educational agency that applies to all children--
                            ``(i) not later than the date on which the 
                        decision to take that action is made, the 
                        parents shall be notified of that decision and 
                        of all procedural safeguards accorded under 
                        this section; and
                            ``(ii) immediately, if possible, but in no 
                        case later than 10 school days after the date 
                        on which the decision to take that action is 
                        made, a review shall be conducted of the 
                        relationship between the child's disability and 
                        the behavior subject to the disciplinary 
                        action.
                    ``(B) Individuals to carry out review.--A review 
                described in subparagraph (A) shall be conducted by the 
                IEP Team and other qualified personnel.
                    ``(C) Conduct of review.--In carrying out a review 
                described in subparagraph (A), the IEP Team may 
                determine that the behavior of the child was not a 
                manifestation of such child's disability only if the 
                IEP Team--
                            ``(i) first considers, in terms of the 
                        behavior subject to disciplinary action, all 
                        relevant information, including--
                                    ``(I) evaluation and diagnostic 
                                results, including such results or 
                                other relevant information supplied by 
                                the parents of the child;
                                    ``(II) observations of the child; 
                                and
                                    ``(III) the child's IEP and 
                                placement; and
                            ``(ii) then determines that--
                                    ``(I) in relationship to the 
                                behavior subject to disciplinary 
                                action, the child's IEP and placement 
                                were appropriate and the special 
                                education services, supplementary aids 
                                and services, and behavior intervention 
                                strategies were provided consistent 
                                with the child's IEP and placement;
                                    ``(II) the child's disability did 
                                not impair the ability of the child to 
                                understand the impact and consequences 
                                of the behavior subject to disciplinary 
                                action; and
                                    ``(III) the child's disability did 
                                not impair the ability of the child to 
                                control the behavior subject to 
                                disciplinary action.
            ``(5) Determination that behavior was not manifestation of 
        disability.--
                    ``(A) In general.--If the result of the review 
                described in paragraph (4) is a determination, 
                consistent with paragraph (4)(C), that the behavior of 
                the child with a disability was not a manifestation of 
                the child's disability, the relevant disciplinary 
                procedures applicable to children without disabilities 
                may be applied to the child in the same manner in which 
                they would be applied to children without disabilities, 
                except as provided in section 612(a)(1).
                    ``(B) Additional requirement.--If the public agency 
                initiates disciplinary procedures applicable to all 
                children, the agency shall ensure that the special 
                education and disciplinary records of the child with a 
                disability are transmitted for consideration by the 
                person or persons making the final determination 
                regarding the disciplinary action.
            ``(6) Parent appeal.--
                    ``(A) In general.--
                            ``(i) If the child's parent disagrees with 
                        a determination that the child's behavior was 
                        not a manifestation of the child's disability 
                        or with any decision regarding placement, the 
                        parent may request a hearing.
                            ``(ii) The State or local educational 
                        agency shall arrange for an expedited hearing 
                        in any case described in this subsection when 
                        requested by a parent.
                    ``(B) Review of decision.--
                            ``(i) In reviewing a decision with respect 
                        to the manifestation determination, the hearing 
                        officer shall determine whether the public 
                        agency has demonstrated that the child's 
                        behavior was not a manifestation of such 
                        child's disability consistent with the 
                        requirements of paragraph (4)(C).
                            ``(ii) In reviewing a decision under 
                        paragraph (1)(A)(ii) to place the child in an 
                        interim alternative educational setting, the 
                        hearing officer shall apply the standards set 
                        out in paragraph (2).
            ``(7) Placement during appeals.--
                    ``(A) In general.--When a parent requests a hearing 
                regarding a disciplinary action described in paragraph 
                (1)(A)(ii) or paragraph (2) to challenge the interim 
                alternative educational setting or the manifestation 
                determination, the child shall remain in the interim 
                alternative educational setting pending the decision of 
                the hearing officer or until the expiration of the time 
                period provided for in paragraph (1)(A)(ii) or 
                paragraph (2), whichever occurs first, unless the 
                parent and the State or local educational agency agree 
                otherwise.
                    ``(B) Current placement.--If a child is placed in 
                an interim alternative educational setting pursuant to 
                paragraph (1)(A)(ii) or paragraph (2) and school 
                personnel propose to change the child's placement after 
                expiration of the interim alternative placement, during 
                the pendency of any proceeding to challenge the 
                proposed change in placement, the child shall remain in 
                the current placement (the child's placement prior to 
                the interim alternative educational setting), except as 
                provided in subparagraph (C).
                    ``(C) Expedited hearing.--
                            ``(i) If school personnel maintain that it 
                        is dangerous for the child to be in the current 
                        placement (placement prior to removal to the 
                        interim alternative education setting) during 
                        the pendency of the due process proceedings, 
                        the local educational agency may request an 
                        expedited hearing.
                            ``(ii) In determining whether the child may 
                        be placed in the alternative educational 
                        setting or in another appropriate placement 
                        ordered by the hearing officer, the hearing 
                        officer shall apply the standards set out in 
                        paragraph (2).
            ``(8) Protections for children not yet eligible for special 
        education and related services.--
                    ``(A) In general.--A child who has not been 
                determined to be eligible for special education and 
                related services under this part and who has engaged in 
                behavior that violated any rule or code of conduct of 
                the local educational agency, including any behavior 
                described in paragraph (1), may assert any of the 
                protections provided for in this part if the local 
                educational agency had knowledge (as determined in 
                accordance with this paragraph) that the child was a 
                child with a disability before the behavior that 
                precipitated the disciplinary action occurred.
                    ``(B) Basis of knowledge.--A local educational 
                agency shall be deemed to have knowledge that a child 
                is a child with a disability if--
                            ``(i) the parent of the child has expressed 
                        concern in writing (unless the parent is 
                        illiterate or has a disability that prevents 
                        compliance with the requirements contained in 
                        this clause) to personnel of the appropriate 
                        educational agency that the child is in need of 
                        special education and related services;
                            ``(ii) the behavior or performance of the 
                        child demonstrates the need for such services;
                            ``(iii) the parent of the child has 
                        requested an evaluation of the child pursuant 
                        to section 614; or
                            ``(iv) the teacher of the child, or other 
                        personnel of the local educational agency, has 
                        expressed concern about the behavior or 
                        performance of the child to the director of 
                        special education of such agency or to other 
                        personnel of the agency.
                    ``(C) Conditions that apply if no basis of 
                knowledge.--
                            ``(i) In general.--If a local educational 
                        agency does not have knowledge that a child is 
                        a child with a disability (in accordance with 
                        subparagraph (B)) prior to taking disciplinary 
                        measures against the child, the child may be 
                        subjected to the same disciplinary measures as 
                        measures applied to children without 
                        disabilities who engaged in comparable 
                        behaviors consistent with clause (ii).
                            ``(ii) Limitations.--If a request is made 
                        for an evaluation of a child during the time 
                        period in which the child is subjected to 
                        disciplinary measures under paragraph (1) or 
                        (2), the evaluation shall be conducted in an 
                        expedited manner. If the child is determined to 
                        be a child with a disability, taking into 
                        consideration information from the evaluation 
                        conducted by the agency and information 
                        provided by the parents, the agency shall 
                        provide special education and related services 
                        in accordance with the provisions of this part, 
                        except that, pending the results of the 
                        evaluation, the child shall remain in the 
                        educational placement determined by school 
                        authorities.
            ``(9) Referral to and action by law enforcement and 
        judicial authorities.--
                    ``(A) Nothing in this part shall be construed to 
                prohibit an agency from reporting a crime committed by 
                a child with a disability to appropriate authorities or 
                to prevent State law enforcement and judicial 
                authorities from exercising their responsibilities with 
                regard to the application of Federal and State law to 
                crimes committed by a child with a disability.
                    ``(B) An agency reporting a crime committed by a 
                child with a disability shall ensure that copies of the 
                special education and disciplinary records of the child 
                are transmitted for consideration by the appropriate 
                authorities to whom it reports the crime.
            ``(10) Definitions.--For purposes of this subsection, the 
        following definitions apply:
                    ``(A) Controlled substance.--The term `controlled 
                substance' means a drug or other substance identified 
                under schedules I, II, III, IV, or V in section 202(c) 
                of the Controlled Substances Act (21 U.S.C. 812(c)).
                    ``(B) Illegal drug.--The term `illegal drug'--
                            ``(i) means a controlled substance; but
                            ``(ii) does not include such a substance 
                        that is legally possessed or used under the 
                        supervision of a licensed health-care 
                        professional or that is legally possessed or 
                        used under any other authority under that Act 
                        or under any other provision of Federal law.
                    ``(C) Substantial evidence.--The term `substantial 
                evidence' means beyond a preponderance of the evidence.
                    ``(D) Weapon.--The term `weapon' has the meaning 
                given the term `dangerous weapon' under paragraph (2) 
                of the first subsection (g) of section 930 of title 18, 
                United States Code.
    ``(l) Rule of Construction.--Nothing in this part shall be 
construed to restrict or limit the rights, procedures, and remedies 
available under the Constitution, the Americans with Disabilities Act 
of 1990, title V of the Rehabilitation Act of 1973, or other Federal 
laws protecting the rights of children with disabilities, except that 
before the filing of a civil action under such laws seeking relief that 
is also available under this part, the procedures under subsections (f) 
and (g) shall be exhausted to the same extent as would be required had 
the action been brought under this part.
    ``(m) Transfer of Parental Rights at Age of Majority.--
            ``(1) In general.--A State that receives amounts from a 
        grant under this part may provide that, when a child with a 
        disability reaches the age of majority under State law (except 
        for a child with a disability who has been determined to be 
        incompetent under State law)--
                    ``(A) the public agency shall provide any notice 
                required by this section to both the individual and the 
                parents;
                    ``(B) all other rights accorded to parents under 
                this part transfer to the child;
                    ``(C) the agency shall notify the individual and 
                the parents of the transfer of rights; and
                    ``(D) all rights accorded to parents under this 
                part transfer to children who are incarcerated in an 
                adult or juvenile Federal, State, or local correctional 
                institution.
            ``(2) Special rule.--If, under State law, a child with a 
        disability who has reached the age of majority under State law, 
        who has not been determined to be incompetent, but who is 
        determined not to have the ability to provide informed consent 
        with respect to the educational program of the child, the State 
        shall establish procedures for appointing the parent of the 
        child, or if the parent is not available, another appropriate 
        individual, to represent the educational interests of the child 
        throughout the period of eligibility of the child under this 
        part.

``SEC. 616. WITHHOLDING AND JUDICIAL REVIEW.

    (a) Withholding of Payments.--
            ``(1) In general.--Whenever the Secretary, after reasonable 
        notice and opportunity for hearing to the State educational 
        agency involved (and to any local educational agency or State 
        agency affected by any failure described in subparagraph (B)), 
        finds--
                    ``(A) that there has been a failure by the State to 
                comply substantially with any provision of this part; 
                or
                    ``(B) that there is a failure to comply with any 
                condition of a local educational agency's or State 
                agency's eligibility under this part, including the 
                terms of any agreement to achieve compliance with this 
                part within the timelines specified in the agreement;
        the Secretary shall, after notifying the State educational 
        agency, withhold, in whole or in part, any further payments to 
        the State under this part, or refer the matter for appropriate 
        enforcement action, which may include referral to the 
        Department of Justice.
            ``(2) Nature of withholding.--If the Secretary withholds 
        further payments under paragraph (1), the Secretary may 
        determine that such withholding will be limited to programs or 
        projects, or portions thereof, affected by the failure, or that 
        the State educational agency shall not make further payments 
        under this part to specified local educational agencies or 
        State agencies affected by the failure. Until the Secretary is 
        satisfied that there is no longer any failure to comply with 
        the provisions of this part, as specified in subparagraph (A) 
        or (B) of paragraph (1), payments to the State under this part 
        shall be withheld in whole or in part, or payments by the State 
        educational agency under this part shall be limited to local 
        educational agencies and State agencies whose actions did not 
        cause or were not involved in the failure, as the case may be. 
        Any State educational agency, State agency, or local 
        educational agency that has received notice under paragraph (1) 
        shall, by means of a public notice, take such measures as may 
        be necessary to bring the pendency of an action pursuant to 
        this subsection to the attention of the public within the 
        jurisdiction of such agency.
    ``(b) Judicial Review.--
            ``(1) In general.--If any State is dissatisfied with the 
        Secretary's final action with respect to the eligibility of the 
        State under section 612, such State may, not later than 60 days 
        after notice of such action, file with the United States court 
        of appeals for the circuit in which such State is located a 
        petition for review of that action. A copy of the petition 
        shall be forthwith transmitted by the clerk of the court to the 
        Secretary. The Secretary thereupon shall file in the court the 
        record of the proceedings upon which the Secretary's action was 
        based, as provided in section 2112 of title 28, United States 
        Code.
            ``(2) Jurisdiction; review by united states supreme 
        court.--Upon the filing of such petition, the court shall have 
        jurisdiction to affirm the action of the Secretary or to set it 
        aside, in whole or in part. The judgment of the court shall be 
        subject to review by the Supreme Court of the United States 
        upon certiorari or certification as provided in section 1254 of 
        title 28, United States Code.
            ``(3) Standard of review.--The findings of fact by the 
        Secretary, if supported by substantial evidence, shall be 
        conclusive, but the court, for good cause shown, may remand the 
        case to the Secretary to take further evidence, and the 
        Secretary may thereupon make new or modified findings of fact 
        and may modify the Secretary's previous action, and shall file 
        in the court the record of the further proceedings. Such new or 
        modified findings of fact shall likewise be conclusive if 
        supported by substantial evidence.
    ``(c) Divided state agency responsibility.--For purposes of this 
section, where responsibility for ensuring that the requirements of 
this part are met with respect to children with disabilities who are 
convicted as adults under State law and incarcerated in adult prisons 
is assigned to a public agency other than the State educational agency 
pursuant to section 612(a)(11)(C), the Secretary, in instances where 
the Secretary finds that the failure to comply substantially with the 
provisions of this part are related to a failure by the public agency, 
shall take appropriate corrective action to ensure compliance with this 
part, except--
            ``(1) any reduction or withholding of payments to the State 
        is proportionate to the total funds allotted under section 611 
        to the State as the number of eligible children with 
        disabilities in adult prisons under the supervision of the 
        other public agency is proportionate to the number of eligible 
        individuals with disabilities in the State under the 
        supervision of the State educational agency; and
            ``(2) any withholding of funds under paragraph (1) shall be 
        limited to the specific agency responsible for the failure to 
        comply with this part.

``SEC. 617. ADMINISTRATION.

    ``(a) Responsibilities of Secretary.--In carrying out this part, 
the Secretary shall--
            ``(1) cooperate with, and (directly or by grant or 
        contract) furnish technical assistance necessary to, the State 
        in matters relating to--
                    ``(A) the education of children with disabilities; 
                and
                    ``(B) carrying out this part; and
            ``(2) provide short-term training programs and institutes.
    ``(b) Rules and Regulations.--In carrying out the provisions of 
this part, the Secretary shall issue regulations under this Act only to 
the extent that such regulations are necessary to ensure that there is 
compliance with the specific requirements of this Act.
    ``(c) Confidentiality.--The Secretary shall take appropriate 
action, in accordance with the provisions of section 444 of the General 
Education Provisions Act (20 U.S.C. 1232g), to assure the protection of 
the confidentiality of any personally identifiable data, information, 
and records collected or maintained by the Secretary and by State and 
local educational agencies pursuant to the provisions of this part.
    ``(d) Personnel.--The Secretary is authorized to hire qualified 
personnel necessary to carry out the Secretary's duties under 
subsection (a) and under sections 618, 661 and 673 (or their 
predecessor authorities through October 1, 1997) without regard to the 
provisions of title 5, United States Code, relating to appointments in 
the competitive service and without regard to chapter 51 and subchapter 
III of chapter 53 of such title relating to classification and general 
schedule pay rates, except that no more than twenty such personnel 
shall be employed at any time.

``SEC. 618. PROGRAM INFORMATION.

    ``(a) In General.--Each State that receives assistance under this 
part, and the Secretary of the Interior, shall provide data each year 
to the Secretary--
            ``(1)(A) on--
                    ``(i) the number of children with disabilities, by 
                race, ethnicity, and disability category, who are 
                receiving a free appropriate public education;
                    ``(ii) the number of children with disabilities, by 
                race and ethnicity, who are receiving early 
                intervention services;
                    ``(iii) the number of children with disabilities, 
                by race, ethnicity, and disability category, who are 
                participating in regular education;
                    ``(iv) the number of children with disabilities, by 
                race, ethnicity, and disability category, who are in 
                separate classes, separate schools or facilities, or 
                public or private residential facilities;
                    ``(v) the number of children with disabilities, by 
                race, ethnicity, and disability category, who, for each 
                year of age from age 14 to 21, stopped receiving 
                special education and related services because of 
                program completion or other reasons and the reasons why 
                those children stopped receiving special education and 
                related services;
                    ``(vi) the number of children with disabilities, by 
                race and ethnicity, who, from birth through age two, 
                stopped receiving early intervention services because 
                of program completion or for other reasons; and
                    ``(vii)(I) the number of children with 
                disabilities, by race, ethnicity, and disability 
                category, who under subparagraphs (A)(ii) and (B) of 
                section 615(k)(1), are removed to an interim 
                alternative educational setting;
                    ``(II) the acts or items precipitating those 
                removals; and
                    ``(III) the number of children with disabilities 
                who are subject to long-term suspensions or expulsions; 
                and
            ``(B) on the number of infants and toddlers, by race and 
        ethnicity, who are at risk of having substantial developmental 
        delays (as described in section 632), and who are receiving 
        early intervention services under part C; and
            ``(2) on any other information that may be required by the 
        Secretary.
    ``(b) Sampling.--The Secretary may permit States and the Secretary 
of the Interior to obtain the data described in subsection (a) through 
sampling.
    ``(c) Disproportionality.--
            ``(1) In general.--Each State that receives assistance 
        under this part, and the Secretary of the Interior, shall 
        provide for the collection and examination of data to determine 
        if significant disproportionality based on race is occurring in 
        the State with respect to--
                    ``(A) the identification of children as children 
                with disabilities, including the identification of 
                children as children with disabilities in accordance 
                with a particular impairment described in section 
                602(3); and
                    ``(B) the placement in particular educational 
                settings of such children.
            ``(2) Review and revision of policies, practices, and 
        procedures.--In the case of a determination of significant 
        disproportionality with respect to the identification of 
        children as children with disabilities, or the placement in 
        particular educational settings of such children, in accordance 
        with paragraph (1), the State or the Secretary of the Interior, 
        as the case may be, shall provide for the review and, if 
        appropriate, revision of the policies, procedures, and 
        practices used in such identification or placement to ensure 
        that such policies, procedures, and practices comply with the 
        requirements of this Act.

``SEC. 619. PRESCHOOL GRANTS.

    ``(a) In General.--The Secretary shall provide grants under this 
section to assist States to provide special education and related 
services, in accordance with this part--
            ``(1) to children with disabilities aged 3 to 5, inclusive; 
        and
            ``(2) at the State's discretion, to 2-year-old children 
        with disabilities who will turn 3 during the school year.
    ``(b) Eligibility.--A State shall be eligible for a grant under 
this section if such State--
            ``(1) is eligible under section 612 to receive a grant 
        under this part; and
            ``(2) makes a free appropriate public education available 
        to all children with disabilities, aged 3 through 5, residing 
        in the State.
    ``(c) Allocations to States.--
            ``(1) In general.--After reserving funds for studies and 
        evaluations under section 674(e), the Secretary shall allocate 
        the remaining amount among the States in accordance with 
        paragraph (2) or (3), as the case may be.
            ``(2) Increase in funds.--If the amount available for 
        allocations to States under paragraph (1) is equal to or 
        greater than the amount allocated to the States under this 
        section for the preceding fiscal year, those allocations shall 
        be calculated as follows:
                    ``(A)(i) Except as provided in subparagraph (B), 
                the Secretary shall--
                            ``(I) allocate to each State the amount it 
                        received for fiscal year 1997;
                            ``(II) allocate 85 percent of any remaining 
                        funds to States on the basis of their relative 
                        populations of children aged 3 through 5; and
                            ``(III) allocate 15 percent of those 
                        remaining funds to States on the basis of their 
                        relative populations of all children aged 3 
                        through 5 who are living in poverty.
                    ``(ii) For the purpose of making grants under this 
                paragraph, the Secretary shall use the most recent 
                population data, including data on children living in 
                poverty, that are available and satisfactory to the 
                Secretary.
                    ``(B) Notwithstanding subparagraph (A), allocations 
                under this paragraph shall be subject to the following:
                            ``(i) No State's allocation shall be less 
                        than its allocation for the preceding fiscal 
                        year.
                            ``(ii) No State's allocation shall be less 
                        than the greatest of--
                                    ``(I) the sum of--
                                            ``(aa) the amount it 
                                        received for fiscal year 1997; 
                                        and
                                            ``(bb) one third of one 
                                        percent of the amount by which 
                                        the amount appropriated under 
                                        subsection (j) exceeds the 
                                        amount appropriated under this 
                                        section for fiscal year 1997;
                                    ``(II) the sum of--
                                            ``(aa) the amount it 
                                        received for the preceding 
                                        fiscal year; and
                                            ``(bb) that amount 
                                        multiplied by the percentage by 
                                        which the increase in the funds 
                                        appropriated from the preceding 
                                        fiscal year exceeds 1.5 
                                        percent; or
                                    ``(III) the sum of--
                                            ``(aa) the amount it 
                                        received for the preceding 
                                        fiscal year; and
                                            ``(bb) that amount 
                                        multiplied by 90 percent of the 
                                        percentage increase in the 
                                        amount appropriated from the 
                                        preceding fiscal year.
                            ``(iii) Notwithstanding clause (ii), no 
                        State's allocation under this paragraph shall 
                        exceed the sum of--
                                    ``(I) the amount it received for 
                                the preceding fiscal year; and
                                    ``(II) that amount multiplied by 
                                the sum of 1.5 percent and the 
                                percentage increase in the amount 
                                appropriated.
                    ``(C) If the amount available for allocations under 
                this paragraph is insufficient to pay those allocations 
                in full, those allocations shall be ratably reduced, 
                subject to subparagraph (B)(i).
            ``(3) Decrease in Funds.--If the amount available for 
        allocations to States under paragraph (1) is less than the 
        amount allocated to the States under this section for the 
        preceding fiscal year, those allocations shall be calculated as 
        follows:
                    ``(A) If the amount available for allocations is 
                greater than the amount allocated to the States for 
                fiscal year 1997, each State shall be allocated the sum 
                of--
                            ``(i) the amount it received for fiscal 
                        year 1997; and
                            ``(ii) an amount that bears the same 
                        relation to any remaining funds as the increase 
                        the State received for the preceding fiscal 
                        year over fiscal year 1997 bears to the total 
                        of all such increases for all States.
                    ``(B) If the amount available for allocations is 
                equal to or less than the amount allocated to the 
                States for fiscal year 1997, each State shall be 
                allocated the amount it received for that year, ratably 
                reduced, if necessary.
            ``(4) Outlying areas.--The Secretary shall increase the 
        fiscal year 1998 allotment of each outlying area under section 
        611 by at least the amount that that area received under this 
        section for fiscal year 1997.
    ``(d) Reservation for State Activities.--
            ``(1) In general.--Each State may retain not more than the 
        amount described in paragraph (2) for administration and other 
        State-level activities in accordance with subsections (e) and 
        (f).
            ``(2) Amount described.--For each fiscal year, the 
        Secretary shall determine and report to the State educational 
        agency an amount that is 25 percent of the amount the State 
        received under this section for fiscal year 1997, cumulatively 
        adjusted by the Secretary for each succeeding fiscal year by 
        the lesser of--
                    ``(A) the percentage increase, if any, from the 
                preceding fiscal year in the State's allocation under 
                this section; or
                    ``(B) the percentage increase, if any, from the 
                preceding fiscal year in the Consumer Price Index For 
                All Urban Consumers published by the Bureau of Labor 
                Statistics of the Department of Labor.
    ``(e) State Administration.--
            ``(1) In general.--For the purpose of administering this 
        section (including the coordination of activities under this 
        part with, and providing technical assistance to, other 
        programs that provide services to children with disabilities) a 
        State may use not more than 20 percent of the maximum amount it 
        may retain under subsection (d) for any fiscal year.
            ``(2) Administration of part c.--Funds described in 
        paragraph (1) may also be used for the administration of part C 
        of this Act, if the State educational agency is the lead agency 
        for the State under that part.
    ``(f) Other State-Level Activities.--Each State shall use any funds 
it retains under subsection (d) and does not use for administration 
under subsection (e)--
            ``(1) for support services (including establishing and 
        implementing the mediation process required by section 615(e)), 
        which may benefit children with disabilities younger than 3 or 
        older than 5 as long as those services also benefit children 
        with disabilities aged 3 through 5;
            ``(2) for direct services for children eligible for 
        services under this section;
            ``(3) to develop a State improvement plan under subpart 1 
        of part D;
            ``(4) for activities at the State and local levels to meet 
        the performance goals established by the State under section 
        612(a)(16) and to support implementation of the State 
        improvement plan under subpart 1 of part D if the State 
        receives funds under that subpart; or
            ``(5) to supplement other funds used to develop and 
        implement a Statewide coordinated services system designed to 
        improve results for children and families, including children 
        with disabilities and their families, but not to exceed one 
        percent of the amount received by the State under this section 
        for a fiscal year.
    ``(g) Subgrants to Local Educational Agencies.--
            ``(1) Subgrants required.--Each State that receives a grant 
        under this section for any fiscal year shall distribute any of 
        the grant funds that it does not reserve under subsection (d) 
        to local educational agencies in the State that have 
        established their eligibility under section 613, as follows:
                    ``(A) Base payments.--The State shall first award 
                each agency described in paragraph (1) the amount that 
                agency would have received under this section for 
                fiscal year 1997 if the State had distributed 75 
                percent of its grant for that year under section 
                619(c)(3), as then in effect.
                    ``(B) Allocation of remaining funds.--After making 
                allocations under subparagraph (A), the State shall--
                            ``(i) allocate 85 percent of any remaining 
                        funds to those agencies on the basis of the 
                        relative numbers of children enrolled in public 
                        and private elementary and secondary schools 
                        within the agency's jurisdiction; and
                            ``(ii) allocate 15 percent of those 
                        remaining funds to those agencies in accordance 
                        with their relative numbers of children living 
                        in poverty, as determined by the State 
                        educational agency.
                    ``(2) Reallocation of funds.--If a State 
                educational agency determines that a local educational 
                agency is adequately providing a free appropriate 
                public education to all children with disabilities aged 
                three through five residing in the area served by that 
                agency with State and local funds, the State 
                educational agency may reallocate any portion of the 
                funds under this section that are not needed by that 
                local agency to provide a free appropriate public 
                education to other local educational agencies in the 
                State that are not adequately providing special 
                education and related services to all children with 
                disabilities aged three through five residing in the 
                areas they serve.
    ``(h) Part C Inapplicable.--Part C of this Act does not apply to 
any child with a disability receiving a free appropriate public 
education, in accordance with this part, with funds received under this 
section.
    ``(i) Definition.--For the purpose of this section, the term 
`State' means each of the 50 States, the District of Columbia, and the 
Commonwealth of Puerto Rico.
    ``(j) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated to the 
Secretary $500,000,000 for fiscal year 1998 and such sums as may be 
necessary for each subsequent fiscal year.

            ``PART C--INFANTS AND TODDLERS WITH DISABILITIES

``SEC. 631. FINDINGS AND POLICY.

    ``(a) Findings.--The Congress finds that there is an urgent and 
substantial need--
            ``(1) to enhance the development of infants and toddlers 
        with disabilities and to minimize their potential for 
        developmental delay;
            ``(2) to reduce the educational costs to our society, 
        including our Nation's schools, by minimizing the need for 
        special education and related services after infants and 
        toddlers with disabilities reach school age;
            ``(3) to minimize the likelihood of institutionalization of 
        individuals with disabilities and maximize the potential for 
        their independently living in society;
            ``(4) to enhance the capacity of families to meet the 
        special needs of their infants and toddlers with disabilities; 
        and
            ``(5) to enhance the capacity of State and local agencies 
        and service providers to identify, evaluate, and meet the needs 
        of historically underrepresented populations, particularly 
        minority, low-income, inner-city, and rural populations.
    ``(b) Policy.--It is therefore the policy of the United States to 
provide financial assistance to States--
            ``(1) to develop and implement a statewide, comprehensive, 
        coordinated, multidisciplinary, interagency system that 
        provides early intervention services for infants and toddlers 
        with disabilities and their families;
            ``(2) to facilitate the coordination of payment for early 
        intervention services from Federal, State, local, and private 
        sources (including public and private insurance coverage);
            ``(3) to enhance their capacity to provide quality early 
        intervention services and expand and improve existing early 
        intervention services being provided to infants and toddlers 
        with disabilities and their families; and
            ``(4) to encourage States to expand opportunities for 
        children under 3 years of age who would be at risk of having 
        substantial developmental delay if they did not receive early 
        intervention services.

``SEC. 632. DEFINITIONS.

    ``As used in this part:
            ``(1) At-risk infant or toddler.--The term `at-risk infant 
        or toddler' means an individual under 3 years of age who would 
        be at risk of experiencing a substantial developmental delay if 
        early intervention services were not provided to the 
        individual.
            ``(2) Council.--The term `council' means a State 
        interagency coordinating council established under section 641.
            ``(3) Developmental delay.--The term `developmental delay', 
        when used with respect to an individual residing in a State, 
        has the meaning given such term by the State under section 
        635(a)(1).
            ``(4) Early intervention services.--The term `early 
        intervention services' means developmental services that--
                    ``(A) are provided under public supervision;
                    ``(B) are provided at no cost except where Federal 
                or State law provides for a system of payments by 
                families, including a schedule of sliding fees;
                    ``(C) are designed to meet the developmental needs 
                of an infant or toddler with a disability in any one or 
                more of the following areas--
                            ``(i) physical development;
                            ``(ii) cognitive development;
                            ``(iii) communication development;
                            ``(iv) social or emotional development; or
                            ``(v) adaptive development;
                    ``(D) meet the standards of the State in which they 
                are provided, including the requirements of this part;
                    ``(E) include--
                            ``(i) family training, counseling, and home 
                        visits;
                            ``(ii) special instruction;
                            ``(iii) speech-language pathology and 
                        audiology services;
                            ``(iv) occupational therapy;
                            ``(v) physical therapy;
                            ``(vi) psychological services;
                            ``(vii) service coordination services;
                            ``(viii) medical services only for 
                        diagnostic or evaluation purposes;
                            ``(ix) early identification, screening, and 
                        assessment services;
                            ``(x) health services necessary to enable 
                        the infant or toddler to benefit from the other 
                        early intervention services;
                            ``(xi) social work services;
                            ``(xii) vision services;
                            ``(xiii) assistive technology devices and 
                        assistive technology services; and
                            ``(xiv) transportation and related costs 
                        that are necessary to enable an infant or 
                        toddler and the infant's or toddler's family to 
                        receive another service described in this 
                        paragraph;
                    ``(F) are provided by qualified personnel, 
                including--
                            ``(i) special educators;
                            ``(ii) speech-language pathologists and 
                        audiologists;
                            ``(iii) occupational therapists;
                            ``(iv) physical therapists;
                            ``(v) psychologists;
                            ``(vi) social workers;
                            ``(vii) nurses;
                            ``(viii) nutritionists;
                            ``(ix) family therapists;
                            ``(x) orientation and mobility specialists; 
                        and
                            ``(xi) pediatricians and other physicians;
                    ``(G) to the maximum extent appropriate, are 
                provided in natural environments, including the home, 
                and community settings in which children without 
                disabilities participate; and
                    ``(H) are provided in conformity with an 
                individualized family service plan adopted in 
                accordance with section 636.
            ``(5) Infant or toddler with a disability.--The term 
        `infant or toddler with a disability'--
                    ``(A) means an individual under 3 years of age who 
                needs early intervention services because the 
                individual--
                            ``(i) is experiencing developmental delays, 
                        as measured by appropriate diagnostic 
                        instruments and procedures in one or more of 
                        the areas of cognitive development, physical 
                        development, communication development, social 
                        or emotional development, and adaptive 
                        development; or
                            ``(ii) has a diagnosed physical or mental 
                        condition which has a high probability of 
                        resulting in developmental delay; and
                    ``(B) may also include, at a State's discretion, 
                at-risk infants and toddlers.

``SEC. 633. GENERAL AUTHORITY.

    ``The Secretary shall, in accordance with this part, make grants to 
States (from their allocations under section 643) to assist each State 
to maintain and implement a statewide, comprehensive, coordinated, 
multidisciplinary, interagency system to provide early intervention 
services for infants and toddlers with disabilities and their families.

``SEC. 634. ELIGIBILITY.

    ``In order to be eligible for a grant under section 633, a State 
shall demonstrate to the Secretary that the State--
            ``(1) has adopted a policy that appropriate early 
        intervention services are available to all infants and toddlers 
        with disabilities in the State and their families, including 
        Indian infants and toddlers with disabilities and their 
        families residing on a reservation geographically located in 
        the State; and
            ``(2) has in effect a statewide system that meets the 
        requirements of section 635.

``SEC. 635. REQUIREMENTS FOR STATEWIDE SYSTEM.

    ``(a) In General.--A statewide system described in section 633 
shall include, at a minimum, the following components:
            ``(1) A definition of the term `developmental delay' that 
        will be used by the State in carrying out programs under this 
        part.
            ``(2) A State policy that is in effect and that ensures 
        that appropriate early intervention services are available to 
        all infants and toddlers with disabilities and their families, 
        including Indian infants and toddlers and their families 
        residing on a reservation geographically located in the State.
            ``(3) A timely, comprehensive, multidisciplinary evaluation 
        of the functioning of each infant or toddler with a disability 
        in the State, and a family-directed identification of the needs 
        of each family of such an infant or toddler, to appropriately 
        assist in the development of the infant or toddler.
            ``(4) For each infant or toddler with a disability in the 
        State, an individualized family service plan in accordance with 
        section 636, including service coordination services in 
        accordance with such service plan.
            ``(5) A comprehensive child find system, consistent with 
        part B, including a system for making referrals to service 
        providers that includes timelines and provides for 
        participation by primary referral sources.
            ``(6) A public awareness program focusing on early 
        identification of infants and toddlers with disabilities, 
        including the preparation and dissemination by the lead agency 
        designated or established under paragraph (10) to all primary 
        referral sources, especially hospitals and physicians, of 
        information for parents on the availability of early 
        intervention services, and procedures for determining the 
        extent to which such sources disseminate such information to 
        parents of infants and toddlers.
            ``(7) A central directory which includes information on 
        early intervention services, resources, and experts available 
        in the State and research and demonstration projects being 
        conducted in the State.
            ``(8) A comprehensive system of personnel development, 
        including the training of paraprofessionals and the training of 
        primary referral sources respecting the basic components of 
        early intervention services available in the State, that is 
        consistent with the comprehensive system of personnel 
        development described in section 612(a)(14) and may include--
                    ``(A) implementing innovative strategies and 
                activities for the recruitment and retention of early 
                education service providers;
                    ``(B) promoting the preparation of early 
                intervention providers who are fully and appropriately 
                qualified to provide early intervention services under 
                this part;
                    ``(C) training personnel to work in rural and 
                inner-city areas; and
                    ``(D) training personnel to coordinate transition 
                services for infants and toddlers served under this 
                part from an early intervention program under this part 
                to preschool or other appropriate services.
            ``(9) Subject to subsection (b), policies and procedures 
        relating to the establishment and maintenance of standards to 
        ensure that personnel necessary to carry out this part are 
        appropriately and adequately prepared and trained, including--
                    ``(A) the establishment and maintenance of 
                standards which are consistent with any State-approved 
                or recognized certification, licensing, registration, 
                or other comparable requirements which apply to the 
                area in which such personnel are providing early 
                intervention services; and
                    ``(B) to the extent such standards are not based on 
                the highest requirements in the State applicable to a 
                specific profession or discipline, the steps the State 
                is taking to require the retraining or hiring of 
                personnel that meet appropriate professional 
                requirements in the State;
        except that nothing in this part, including this paragraph, 
        prohibits the use of paraprofessionals and assistants who are 
        appropriately trained and supervised, in accordance with State 
        law, regulations, or written policy, to assist in the provision 
        of early intervention services to infants and toddlers with 
        disabilities under this part.
            ``(10) A single line of responsibility in a lead agency 
        designated or established by the Governor for carrying out--
                    ``(A) the general administration and supervision of 
                programs and activities receiving assistance under 
                section 633, and the monitoring of programs and 
                activities used by the State to carry out this part, 
                whether or not such programs or activities are 
                receiving assistance made available under section 633, 
                to ensure that the State complies with this part;
                    ``(B) the identification and coordination of all 
                available resources within the State from Federal, 
                State, local, and private sources;
                    ``(C) the assignment of financial responsibility in 
                accordance with section 637(a)(2) to the appropriate 
                agencies;
                    ``(D) the development of procedures to ensure that 
                services are provided to infants and toddlers and their 
                families under this part in a timely manner pending the 
                resolution of any disputes among public agencies or 
                service providers;
                    ``(E) the resolution of intra- and interagency 
                disputes; and
                    ``(F) the entry into formal interagency agreements 
                that define the financial responsibility of each agency 
                for paying for early intervention services (consistent 
                with State law) and procedures for resolving disputes 
                and that include all additional components necessary to 
                ensure meaningful cooperation and coordination.
            ``(11) A policy pertaining to the contracting or making of 
        other arrangements with service providers to provide early 
        intervention services in the State, consistent with the 
        provisions of this part, including the contents of the 
        application used and the conditions of the contract or other 
        arrangements.
            ``(12) A procedure for securing timely reimbursements of 
        funds used under this part in accordance with section 640(a).
            ``(13) Procedural safeguards with respect to programs under 
        this part, as required by section 639.
            ``(14) A system for compiling data requested by the 
        Secretary under section 618 that relates to this part.
            ``(15) A State interagency coordinating council that meets 
        the requirements of section 641.
            ``(16) Policies and procedures to ensure that, consistent 
        with section 636(d)(5)--
                    ``(A) to the maximum extent appropriate, early 
                intervention services are provided in natural 
                environments; and
                    ``(B) the provision of early intervention services 
                for any infant or toddler occurs in a setting other 
                than a natural environment only when early intervention 
                cannot be achieved satisfactorily for the infant or 
                toddler in a natural environment.
    ``(b) Policy.--In implementing subsection (a)(9), a State may adopt 
a policy that includes making ongoing good-faith efforts to recruit and 
hire appropriately and adequately trained personnel to provide early 
intervention services to infants and toddlers with disabilities, 
including, in a geographic area of the State where there is a shortage 
of such personnel, the most qualified individuals available who are 
making satisfactory progress toward completing applicable course work 
necessary to meet the standards described in subsection (a)(9) within 3 
years.

``SEC. 636. INDIVIDUALIZED FAMILY SERVICE PLAN.

    ``(a) Assessment and Program Development.--A statewide system 
described in section 633 shall provide, at a minimum, for each infant 
or toddler with a disability, and the infant's or toddler's family, to 
receive--
            ``(1) a multidisciplinary assessment of the unique 
        strengths and needs of the infant or toddler and the 
        identification of services appropriate to meet such needs;
            ``(2) a family-directed assessment of the resources, 
        priorities, and concerns of the family and the identification 
        of the supports and services necessary to enhance the family's 
        capacity to meet the developmental needs of the infant or 
        toddler; and
            ``(3) a written individualized family service plan 
        developed by a multidisciplinary team, including the parents, 
        as required by subsection (e).
    ``(b) Periodic Review.--The individualized family service plan 
shall be evaluated once a year and the family shall be provided a 
review of the plan at 6-month intervals (or more often where 
appropriate based on infant or toddler and family needs).
    ``(c) Promptness After Assessment.--The individualized family 
service plan shall be developed within a reasonable time after the 
assessment required by subsection (a)(1) is completed. With the 
parents' consent, early intervention services may commence prior to the 
completion of the assessment.
    ``(d) Content of Plan.---The individualized family service plan 
shall be in writing and contain--
            ``(1) a statement of the infant's or toddler's present 
        levels of physical development, cognitive development, 
        communication development, social or emotional development, and 
        adaptive development, based on objective criteria;
            ``(2) a statement of the family's resources, priorities, 
        and concerns relating to enhancing the development of the 
        family's infant or toddler with a disability;
            ``(3) a statement of the major outcomes expected to be 
        achieved for the infant or toddler and the family, and the 
        criteria, procedures, and timelines used to determine the 
        degree to which progress toward achieving the outcomes is being 
        made and whether modifications or revisions of the outcomes or 
        services are necessary;
            ``(4) a statement of specific early intervention services 
        necessary to meet the unique needs of the infant or toddler and 
        the family, including the frequency, intensity, and method of 
        delivering services;
            ``(5) a statement of the natural environments in which 
        early intervention services shall appropriately be provided, 
        including a justification of the extent, if any, to which the 
        services will not be provided in a natural environment;
            ``(6) the projected dates for initiation of services and 
        the anticipated duration of the services;
            ``(7) the identification of the service coordinator from 
        the profession most immediately relevant to the infant's or 
        toddler's or family's needs (or who is otherwise qualified to 
        carry out all applicable responsibilities under this part) who 
        will be responsible for the implementation of the plan and 
        coordination with other agencies and persons; and
            ``(8) the steps to be taken to support the transition of 
        the toddler with a disability to preschool or other appropriate 
        services.
    ``(e) Parental Consent.---The contents of the individualized family 
service plan shall be fully explained to the parents and informed 
written consent from the parents shall be obtained prior to the 
provision of early intervention services described in such plan. If the 
parents do not provide consent with respect to a particular early 
intervention service, then the early intervention services to which 
consent is obtained shall be provided.

``SEC. 637. STATE APPLICATION AND ASSURANCES.

    ``(a) Application.--A State desiring to receive a grant under 
section 633 shall submit an application to the Secretary at such time 
and in such manner as the Secretary may reasonably require. The 
application shall contain--
            ``(1) a designation of the lead agency in the State that 
        will be responsible for the administration of funds provided 
        under section 633;
            ``(2) a designation of an individual or entity responsible 
        for assigning financial responsibility among appropriate 
        agencies;
            ``(3) information demonstrating eligibility of the State 
        under section 634, including--
                    ``(A) information demonstrating to the Secretary's 
                satisfaction that the State has in effect the statewide 
                system required by section 633; and
                    ``(B) a description of services to be provided to 
                infants and toddlers with disabilities and their 
                families through the system;
            ``(4) if the State provides services to at-risk infants and 
        toddlers through the system, a description of such services;
            ``(5) a description of the uses for which funds will be 
        expended in accordance with this part;
            ``(6) a description of the procedure used to ensure that 
        resources are made available under this part for all geographic 
        areas within the State;
            ``(7) a description of State policies and procedures that 
        ensure that, prior to the adoption by the State of any other 
        policy or procedure necessary to meet the requirements of this 
        part, there are public hearings, adequate notice of the 
        hearings, and an opportunity for comment available to the 
        general public, including individuals with disabilities and 
        parents of infants and toddlers with disabilities;
            ``(8) a description of the policies and procedures to be 
        used--
                    ``(A) to ensure a smooth transition for toddlers 
                receiving early intervention services under this part 
                to preschool or other appropriate services, including a 
                description of how--
                            ``(i) the families of such toddlers will be 
                        included in the transition plans required by 
                        subparagraph (C); and
                            ``(ii) the lead agency designated or 
                        established under section 636(a)(10) will--
                                    ``(I) notify the local educational 
                                agency for the area in which such a 
                                child resides that the child will 
                                shortly reach the age of eligibility 
                                for preschool services under part B, as 
                                determined in accordance with State 
                                law;
                                    ``(II) in the case of a child who 
                                may be eligible for such preschool 
                                services, with the approval of the 
                                family of the child, convene a 
                                conference among the lead agency, the 
                                family, and the local educational 
                                agency at least 90 days (and at the 
                                discretion of all such parties, up to 6 
                                months) before the child is eligible 
                                for the preschool services, to discuss 
                                any such services that the child may 
                                receive; and
                                    ``(III) in the case of a child who 
                                may not be eligible for such preschool 
                                services, with the approval of the 
                                family, make reasonable efforts to 
                                convene a conference among the lead 
                                agency, the family, and providers of 
                                other appropriate services for children 
                                who are not eligible for preschool 
                                services under part B, to discuss the 
                                appropriate services that the child may 
                                receive;
                    ``(B) to review the child's program options for the 
                period from the child's third birthday through the 
                remainder of the school year; and
                    ``(C) to establish a transition plan; and
            ``(9) such other information and assurances as the 
        Secretary may reasonably require.
    ``(b) Assurances.--The application described in subsection (a)--
            ``(1) shall provide satisfactory assurance that Federal 
        funds made available under section 643 to the State will be 
        expended in accordance with this part;
            ``(2) shall contain an assurance that the State will comply 
        with the requirements of section 640;
            ``(3) shall provide satisfactory assurance that the control 
        of funds provided under section 643, and title to property 
        derived from those funds, will be in a public agency for the 
        uses and purposes provided in this part and that a public 
        agency will administer such funds and property;
            ``(4) shall provide for--
                    ``(A) making such reports in such form and 
                containing such information as the Secretary may 
                require to carry out the Secretary's functions under 
                this part; and
                    ``(B) keeping such records and affording such 
                access to them as the Secretary may find necessary to 
                ensure the correctness and verification of those 
                reports and proper disbursement of Federal funds under 
                this part;
            ``(5) provide satisfactory assurance that Federal funds 
        made available under section 643 to the State--
                    ``(A) will not be commingled with State funds; and
                    ``(B) will be used so as to supplement the level of 
                State and local funds expended for infants and toddlers 
                with disabilities and their families and in no case to 
                supplant those State and local funds;
            ``(6) shall provide satisfactory assurance that such fiscal 
        control and fund accounting procedures will be adopted as may 
        be necessary to ensure proper disbursement of, and accounting 
        for, Federal funds paid under section 643 to the State;
            ``(7) shall provide satisfactory assurance that policies 
        and procedures have been adopted to ensure meaningful 
        involvement of underserved groups, including minority, low-
        income, and rural families, in the planning and implementation 
        of all the requirements of this part; and
            ``(8) shall contain such other information and assurances 
        as the Secretary may reasonably require by regulation.
    ``(c) Standard for Disapproval of Application.--The Secretary may 
not disapprove such an application unless the Secretary determines, 
after notice and opportunity for a hearing, that the application fails 
to comply with the requirements of this section.
    ``(d) Subsequent State Application.--If a State has on file with 
the Secretary a policy, procedure, or assurance that demonstrates that 
the State meets a requirement of this section, including any policy or 
procedure filed under part H (as in effect before July 1, 1998), the 
Secretary shall consider the State to have met the requirement for 
purposes of receiving a grant under this part.
    ``(e) Modification of Application.--An application submitted by a 
State in accordance with this section shall remain in effect until the 
State submits to the Secretary such modifications as the State 
determines necessary. This section shall apply to a modification of an 
application to the same extent and in the same manner as this section 
applies to the original application.
    ``(f) Modifications Required by the Secretary.--The Secretary may 
require a State to modify its application under this section, but only 
to the extent necessary to ensure the State's compliance with this 
part, if--
            ``(1) an amendment is made to this Act, or a Federal 
        regulation issued under this Act;
            ``(2) a new interpretation of this Act is made by a Federal 
        court or the State's highest court; or
            ``(3) an official finding of noncompliance with Federal law 
        or regulations is made with respect to the State.

``SEC. 638. USES OF FUNDS.

    ``In addition to using funds provided under section 633 to maintain 
and implement the statewide system required by such section, a State 
may use such funds--
            ``(1) for direct early intervention services for infants 
        and toddlers with disabilities, and their families, under this 
        part that are not otherwise funded through other public or 
        private sources;
            ``(2) to expand and improve on services for infants and 
        toddlers and their families under this part that are otherwise 
        available;
            ``(3) to provide a free appropriate public education, in 
        accordance with part B, to children with disabilities from 
        their third birthday to the beginning of the following school 
        year; and
            ``(4) in any State that does not provide services for at-
        risk infants and toddlers under section 637(a)(4), to 
        strengthen the statewide system by initiating, expanding, or 
        improving collaborative efforts related to at-risk infants and 
        toddlers, including establishing linkages with appropriate 
        public or private community-based organizations, services, and 
        personnel for the purposes of--
                    ``(A) identifying and evaluating at-risk infants 
                and toddlers;
                    ``(B) making referrals of the infants and toddlers 
                identified and evaluated under subparagraph (A); and
                    ``(C) conducting periodic follow-up on each such 
                referral to determine if the status of the infant or 
                toddler involved has changed with respect to the 
                eligibility of the infant or toddler for services under 
                this part.

``SEC. 639. PROCEDURAL SAFEGUARDS.

    ``(a) Minimum Procedures.---The procedural safeguards required to 
be included in a statewide system under section 635(a)(13) shall 
provide, at a minimum, the following:
            ``(1) The timely administrative resolution of complaints by 
        parents. Any party aggrieved by the findings and decision 
        regarding an administrative complaint shall have the right to 
        bring a civil action with respect to the complaint in any State 
        court of competent jurisdiction or in a district court of the 
        United States without regard to the amount in controversy. In 
        any action brought under this paragraph, the court shall 
        receive the records of the administrative proceedings, shall 
        hear additional evidence at the request of a party, and, basing 
        its decision on the preponderance of the evidence, shall grant 
        such relief as the court determines is appropriate.
            ``(2) The right to confidentiality of personally 
        identifiable information, including the right of parents to 
        written notice of and written consent to the exchange of such 
        information among agencies consistent with Federal and State 
        law.
            ``(3) The right of the parents to determine whether they, 
        their infant or toddler, or other family members will accept or 
        decline any early intervention service under this part in 
        accordance with State law without jeopardizing other early 
intervention services under this part.
            ``(4) The opportunity for parents to examine records 
        relating to assessment, screening, eligibility determinations, 
        and the development and implementation of the individualized 
        family service plan.
            ``(5) Procedures to protect the rights of the infant or 
        toddler whenever the parents of the child are not known or 
        cannot be found or the child is a ward of the State, including 
        the assignment of an individual (who shall not be an employee 
        of the State lead agency, or other State agency, and who shall 
        not be any person, or any employee of a person, providing early 
        intervention services to the infant or toddler or any family 
        member of the infant or toddler) to act as a surrogate for the 
        parents.
            ``(6) Written prior notice to the parents of the infant or 
        toddler with a disability whenever the State agency or service 
        provider proposes to initiate or change or refuses to initiate 
        or change the identification, evaluation, or placement of the 
        infant or toddler with a disability, or the provision of 
        appropriate early intervention services to the infant or 
        toddler.
            ``(7) Procedures designed to ensure that the notice 
        required by paragraph (6) fully informs the parents, in the 
        parents' native language, unless it clearly is not feasible to 
        do so, of all procedures available pursuant to this section.
            ``(8) The right of parents to use mediation in accordance 
        with section 615(e), except that--
                    ``(A) any reference in the section to a State 
                educational agency shall be considered to be a 
                reference to a State's lead agency established or 
                designated under section 635(a)(10);
                    ``(B) any reference in the section to a local 
                educational agency shall be considered to be a 
                reference to a local service provider or the State's 
                lead agency under this part, as the case may be; and
                    ``(C) any reference in the section to the provision 
                of free appropriate public education to children with 
                disabilities shall be considered to be a reference to 
                the provision of appropriate early intervention 
                services to infants and toddlers with disabilities.
    ``(b) Services During Pendency of Proceedings.--During the pendency 
of any proceeding or action involving a complaint by the parents of an 
infant or toddler with a disability, unless the State agency and the 
parents otherwise agree, the infant or toddler shall continue to 
receive the appropriate early intervention services currently being 
provided or, if applying for initial services, shall receive the 
services not in dispute.

``SEC. 640. PAYOR OF LAST RESORT.

    ``(a) Nonsubstitution.--Funds provided under section 643 may not be 
used to satisfy a financial commitment for services that would have 
been paid for from another public or private source, including any 
medical program administered by the Secretary of Defense, but for the 
enactment of this part, except that whenever considered necessary to 
prevent a delay in the receipt of appropriate early intervention 
services by an infant, toddler, or family in a timely fashion, funds 
provided under section 643 may be used to pay the provider of services 
pending reimbursement from the agency that has ultimate responsibility 
for the payment.
    ``(b) Reduction of Other Benefits--Nothing in this part shall be 
construed to permit the State to reduce medical or other assistance 
available or to alter eligibility under title V of the Social Security 
Act (relating to maternal and child health) or title XIX of the Social 
Security Act (relating to medicaid for infants or toddlers with 
disabilities) within the State.

``SEC. 641. STATE INTERAGENCY COORDINATING COUNCIL.

    ``(a) Establishment.--
            ``(1) In general.--A State that desires to receive 
        financial assistance under this part shall establish a State 
        interagency coordinating council.
            ``(2) Appointment.--The council shall be appointed by the 
        Governor. In making appointments to the council, the Governor 
        shall ensure that the membership of the council reasonably 
        represents the population of the State.
            ``(3) Chairperson.--The Governor shall designate a member 
        of the council to serve as the chairperson of the council, or 
        shall require the council to so designate such a member. Any 
        member of the council who is a representative of the lead 
        agency designated under section 635(a)(10) may not serve as the 
        chairperson of the council.
    ``(b) Composition.--
            ``(1) In general.--The council shall be composed as 
        follows:
                    ``(A) Parents.--At least 20 percent of the members 
                shall be parents of infants or toddlers with 
                disabilities or children with disabilities aged 12 or 
                younger, with knowledge of, or experience with, 
                programs for infants and toddlers with disabilities. At 
                least one such member shall be a parent of an infant or 
                toddler with a disability or a child with a disability 
                aged 6 or younger.
                    ``(B) Service providers.--At least 20 percent of 
                the members shall be public or private providers of 
                early intervention services.
                    ``(C) State legislature.--At least one member shall 
                be from the State legislature.
                    ``(D) Personnel preparation.--At least one member 
                shall be involved in personnel preparation.
                    ``(E) Agency for early intervention services.--At 
                least one member shall be from each of the State 
                agencies involved in the provision of, or payment for, 
                early intervention services to infants and toddlers 
                with disabilities and their families and shall have 
                sufficient authority to engage in policy planning and 
                implementation on behalf of such agencies.
                    ``(F) Agency for preschool services.--At least one 
                member shall be from the State educational agency 
                responsible for preschool services to children with 
                disabilities and shall have sufficient authority to 
                engage in policy planning and implementation on behalf 
                of such agency.
                    ``(G) Agency for health insurance.--At least one 
                member shall be from the agency responsible for the 
                State governance of health insurance.
                    ``(H) Head start agency.--A representative from a 
                Head Start agency or program in the State.
                    ``(I) Child care agency.--A representative from a 
                State agency responsible for child care.
            ``(2) Other members.--The council may include other members 
        selected by the Governor, including a representative from the 
        Bureau of Indian Affairs, or where there is no BIA-operated or 
        BIA-funded school, from the Indian Health Service or the tribe 
        or tribal council.
    ``(c) Meetings.--The council shall meet at least quarterly and in 
such places as it deems necessary. The meetings shall be publicly 
announced, and, to the extent appropriate, open and accessible to the 
general public.
    ``(d) Management Authority.--Subject to the approval of the 
Governor, the council may prepare and approve a budget using funds 
under this part to conduct hearings and forums, to reimburse members of 
the council for reasonable and necessary expenses for attending council 
meetings and performing council duties (including child care for parent 
representatives), to pay compensation to a member of the council if the 
member is not employed or must forfeit wages from other employment when 
performing official council business, to hire staff, and to obtain the 
services of such professional, technical, and clerical personnel as may 
be necessary to carry out its functions under this part.
    ``(e) Functions of Council.--
            ``(1) Duties.--The council shall--
                    ``(A) advise and assist the lead agency designated 
                or established under section 635(a)(10) in the 
                performance of the responsibilities set forth in such 
                section, particularly the identification of the sources 
                of fiscal and other support for services for early 
                intervention programs, assignment of financial 
                responsibility to the appropriate agency, and the 
                promotion of the interagency agreements;
                    ``(B) advise and assist the lead agency in the 
                preparation of applications and amendments thereto;
                    ``(C) advise and assist the State educational 
                agency regarding the transition of toddlers with 
                disabilities to preschool and other appropriate 
                services; and
                    ``(D) prepare and submit an annual report to the 
                Governor and to the Secretary on the status of early 
                intervention programs for infants and toddlers with 
                disabilities and their families operated within the 
                State.
            ``(2) Authorized activity.--The council may advise and 
        assist the lead agency and the State educational agency 
        regarding the provision of appropriate services for children 
        from birth through age 5. The council may advise appropriate 
        agencies in the State with respect to the integration of 
        services for infants and toddlers with disabilities and at-risk 
        infants and toddlers and their families, regardless of whether 
        at-risk infants and toddlers are eligible for early 
        intervention services in the State.
    ``(f) Conflict of Interest.--No member of the council shall cast a 
vote on any matter that would provide direct financial benefit to that 
member or otherwise give the appearance of a conflict of interest under 
State law.

``SEC. 642. FEDERAL ADMINISTRATION.

    ``Sections 616, 617, and 618 shall, to the extent not inconsistent 
with this part, apply to the program authorized by this part, except 
that--
            ``(1) any reference in such sections to a State educational 
        agency shall be considered to be a reference to a State's lead 
        agency established or designated under section 635(a)(10);
            ``(2) any reference in such sections to a local educational 
        agency, educational service agency, or a State agency shall be 
        considered to be a reference to an early intervention service 
        provider under this part; and
            ``(3) any reference to the education of children with 
        disabilities or the education of all children with disabilities 
        shall be considered to be a reference to the provision of 
        appropriate early intervention services to infants and toddlers 
        with disabilities.

``SEC. 643. ALLOCATION OF FUNDS.

    ``(a) Reservation of Funds for Outlying Areas.--
            ``(1) In general.--From the sums appropriated to carry out 
        this part for any fiscal year, the Secretary may reserve up to 
        one percent for payments to Guam, American Samoa, the Virgin 
        Islands, and the Commonwealth of the Northern Mariana Islands 
        in accordance with their respective needs.
            ``(2) Consolidation of funds.--The provisions of Public Law 
        95-134, permitting the consolidation of grants to the outlying 
        areas, shall not apply to funds those areas receive under this 
        part.
    ``(b) Payments to Indians.--
            ``(1) In general.--The Secretary shall, subject to this 
        subsection, make payments to the Secretary of the Interior to 
        be distributed to tribes, tribal organizations (as defined 
        under section 4 of the Indian Self-Determination and Education 
        Assistance Act), or consortia of the above entities for the 
        coordination of assistance in the provision of early 
        intervention services by the States to infants and toddlers 
        with disabilities and their families on reservations served by 
        elementary and secondary schools for Indian children operated 
        or funded by the Department of the Interior. The amount of such 
        payment for any fiscal year shall be 1.25 percent of the 
        aggregate of the amount available to all States under this part 
        for such fiscal year.
            ``(2) Allocation.--For each fiscal year, the Secretary of 
        the Interior shall distribute the entire payment received under 
        paragraph (1) by providing to each tribe, tribal organization, 
        or consortium an amount based on the number of infants and 
        toddlers residing on the reservation, as determined annually, 
        divided by the total of such children served by all tribes, 
        tribal organizations, or consortia.
            ``(3) Information.--To receive a payment under this 
        paragraph, the tribe, tribal organization, or consortium shall 
        submit such information to the Secretary of the Interior as is 
        needed to determine the amounts to be allocated under paragraph 
        (2).
            ``(4) Use of funds.--The funds received by a tribe, tribal 
        organization, or consortium shall be used to assist States in 
        child-find, screening, and other procedures for the early 
        identification of Indian children under 3 years of age and for 
        parent training. Such funds may also be used to provide early 
        intervention services in accordance with this part. Such 
        activities may be carried out directly or through contracts or 
        cooperative agreements with the BIA, local educational 
        agencies, and other public or private nonprofit organizations. 
        The tribe, tribal organization, or consortium is encouraged to 
        involve Indian parents in the development and implementation of 
        these activities. The above entities shall, as appropriate, 
        make referrals to local, State, or Federal entities for the 
        provision of services or further diagnosis.
            ``(5) Reports.--To be eligible to receive a grant under 
        paragraph (2), a tribe, tribal organization, or consortium 
        shall make a biennial report to the Secretary of the Interior 
        of activities undertaken under this subsection, including the 
        number of contracts and cooperative agreements entered into, 
        the number of children contacted and receiving services for 
        each year, and the estimated number of children needing 
        services during the 2 years following the year in which the 
        report is made. The Secretary of the Interior shall include a 
        summary of this information on a biennial basis to the 
        Secretary of Education along with such other information as 
        required under section 611(i)(3)(E). The Secretary of Education 
        may require any additional information from the Secretary of 
        the Interior.
            ``(6) Prohibited uses of funds.--None of the funds under 
        this subsection may be used by the Secretary of the Interior 
        for administrative purposes, including child count, and the 
        provision of technical assistance.
    ``(c) State Allotments.--
            ``(1) In general.--Except as provided in paragraphs (2), 
        (3), and (4), from the funds remaining for each fiscal year 
        after the reservation and payments under subsections (a) and 
        (b), the Secretary shall first allot to each State an amount 
        that bears the same ratio to the amount of such remainder as 
        the number of infants and toddlers in the State bears to the 
        number of infants and toddlers in all States.
            ``(2) Minimum allotments.--Except as provided in paragraphs 
        (3) and (4), no State shall receive an amount under this 
        section for any fiscal year that is less than the greatest of--
                    ``(A) one-half of one percent of the remaining 
                amount described in paragraph (1); or
                    ``(B) $500,000.
            ``(3) Special rule for 1998 and 1999.--
                    ``(A) In general.--Except as provided in paragraph 
                (4), no State may receive an amount under this section 
                for either fiscal year 1998 or 1999 that is less than 
                the sum of the amounts such State received for fiscal 
                year 1994 under--
                            ``(i) part H (as in effect for such fiscal 
                        year); and
                            ``(ii) subpart 2 of part D of chapter 1 of 
                        title I of the Elementary and Secondary 
                        Education Act of 1965 (as in effect on the day 
                        before the date of the enactment of the 
                        Improving America's Schools Act of 1994) for 
                        children with disabilities under 3 years of 
                        age.
                    ``(B) Exception.--If, for fiscal year 1998 or 1999, 
                the number of infants and toddlers in a State, as 
                determined under paragraph (1), is less than the number 
                of infants and toddlers so determined for fiscal year 
                1994, the amount determined under subparagraph (A) for 
                the State shall be reduced by the same percentage by 
                which the number of such infants and toddlers so 
                declined.
            ``(4) Ratable reduction.--
                    ``(A) In general.--If the sums made available under 
                this part for any fiscal year are insufficient to pay 
                the full amounts that all States are eligible to 
                receive under this subsection for such year, the 
                Secretary shall ratably reduce the allocations to such 
                States for such year.
                    ``(B) Additional funds.--If additional funds become 
                available for making payments under this subsection for 
                a fiscal year, allocations that were reduced under 
                subparagraph (A) shall be increased on the same basis 
                they were reduced.
            ``(5) Definitions.--For the purpose of this subsection--
                    ``(A) the terms `infants' and `toddlers' mean 
                children under 3 years of age; and
                    ``(B) the term `State' means each of the 50 States, 
                the District of Columbia, and the Commonwealth of 
                Puerto Rico.
    ``(d) Reallotment of Funds.--If a State elects not to receive its 
allotment under subsection (c), the Secretary shall reallot, among the 
remaining States, amounts from such State in accordance with such 
subsection.

``SEC. 644. FEDERAL INTERAGENCY COORDINATING COUNCIL.

    ``(a) Establishment and Purpose.--
            ``(1) In general.--The Secretary shall establish a Federal 
        Interagency Coordinating Council in order to--
                    ``(A) minimize duplication of programs and 
                activities across Federal, State, and local agencies, 
                relating to--
                            ``(i) early intervention services for 
                        infants and toddlers with disabilities 
                        (including at-risk infants and toddlers) and 
                        their families; and
                            ``(ii) preschool or other appropriate 
                        services for children with disabilities;
                    ``(B) ensure the effective coordination of Federal 
                early intervention and preschool programs and policies 
                across Federal agencies;
                    ``(C) coordinate the provision of Federal technical 
                assistance and support activities to States;
                    ``(D) identify gaps in Federal agency programs and 
                services; and
                    ``(E) identify barriers to Federal interagency 
                cooperation.
            ``(2) Appointments.--The council established under 
        paragraph (1) (hereafter in this section referred to as the 
        ``Council'') and the chairperson of the Council shall be 
        appointed by the Secretary in consultation with other 
        appropriate Federal agencies. In making the appointments, the 
        Secretary shall ensure that each member has sufficient 
        authority to engage in policy planning and implementation on 
        behalf of the department, agency, or program that the member 
        represents.
    ``(b) Composition.--The Council shall be composed of--
            ``(1) a representative of the Office of Special Education 
        Programs;
            ``(2) a representative of the National Institute on 
        Disability and Rehabilitation Research and a representative of 
        the Office of Educational Research and Improvement;
            ``(3) a representative of the Maternal and Child Health 
        Services Block Grant Program;
            ``(4) a representative of programs administered under the 
        Developmental Disabilities Assistance and Bill of Rights Act;
            ``(5) a representative of the Health Care Financing 
        Administration;
            ``(6) a representative of the Division of Birth Defects and 
        Developmental Disabilities of the Centers for Disease Control;
            ``(7) a representative of the Social Security 
        Administration;
            ``(8) a representative of the special supplemental 
        nutrition program for women, infants, and children of the 
        Department of Agriculture;
            ``(9) a representative of the National Institute of Mental 
        Health;
            ``(10) a representative of the National Institute of Child 
        Health and Human Development;
            ``(11) a representative of the Bureau of Indian Affairs of 
        the Department of the Interior;
            ``(12) a representative of the Indian Health Service;
            ``(13) a representative of the Surgeon General;
            ``(14) a representative of the Department of Defense;
            ``(15) a representative of the Children's Bureau, and a 
        representative of the Head Start Bureau, of the Administration 
        for Children and Families;
            ``(16) a representative of the Substance Abuse and Mental 
        Health Services Administration;
            ``(17) a representative of the Pediatric AIDS Health Care 
        Demonstration Program in the Public Health Service;
            ``(18) parents of children with disabilities age 12 or 
        under (who shall constitute at least 20 percent of the members 
        of the Council), of whom at least one must have a child with a 
        disability under the age of 6;
            ``(19) at least 2 representatives of State lead agencies 
        for early intervention services to infants and toddlers, one of 
        whom must be a representative of a State educational agency and 
        the other a representative of a non-educational agency;
            ``(20) other members representing appropriate agencies 
        involved in the provision of, or payment for, early 
        intervention services and special education and related 
        services to infants and toddlers with disabilities and their 
        families and preschool children with disabilities; and
            ``(21) other persons appointed by the Secretary.
    ``(c) Meetings.--The Council shall meet at least quarterly and in 
such places as the Council deems necessary. The meetings shall be 
publicly announced, and, to the extent appropriate, open and accessible 
to the general public.
    ``(d) Functions of the Council.--The Council shall--
            ``(1) advise and assist the Secretary of Education, the 
        Secretary of Health and Human Services, the Secretary of 
        Defense, the Secretary of the Interior, the Secretary of 
        Agriculture, and the Commissioner of Social Security in the 
        performance of their responsibilities related to serving 
        children from birth through age 5 who are eligible for services 
        under this part or under part B;
            ``(2) conduct policy analyses of Federal programs related 
        to the provision of early intervention services and special 
        educational and related services to infants and toddlers with 
        disabilities and their families, and preschool children with 
        disabilities, in order to determine areas of conflict, overlap, 
        duplication, or inappropriate omission;
            ``(3) identify strategies to address issues described in 
        paragraph (2);
            ``(4) develop and recommend joint policy memoranda 
        concerning effective interagency collaboration, including 
        modifications to regulations, and the elimination of barriers 
        to interagency programs and activities;
            ``(5) coordinate technical assistance and disseminate 
        information on best practices, effective program coordination 
        strategies, and recommendations for improved early intervention 
        programming for infants and toddlers with disabilities and 
        their families and preschool children with disabilities; and
            ``(6) facilitate activities in support of States' 
        interagency coordination efforts.
    ``(e) Conflict of Interest.--No member of the Council shall cast a 
vote on any matter that would provide direct financial benefit to that 
member or otherwise give the appearance of a conflict of interest under 
Federal law.
    ``(f) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply to the establishment or 
operation of the Council.

``SEC. 645. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated $400,000,000 for fiscal year 1998 and such sums as 
may be necessary for each of the fiscal years 1999 through 2002.

  ``PART D--NATIONAL ACTIVITIES TO IMPROVE EDUCATION OF CHILDREN WITH 
                              DISABILITIES

    ``Subpart 1--State Program Improvement Grants for Children with 
                              Disabilities

``SEC. 651. FINDINGS AND PURPOSE.

    ``(a) Findings.--The Congress finds the following:
            ``(1) States are responding with some success to multiple 
        pressures to improve educational and transitional services and 
        results for children with disabilities in response to growing 
        demands imposed by ever-changing factors, such as demographics, 
        social policies, and labor and economic markets.
            ``(2) In order for States to address such demands and to 
        facilitate lasting systemic change that is of benefit to all 
        students, including children with disabilities, States must 
        involve local educational agencies, parents, individuals with 
        disabilities and their families, teachers and other service 
        providers, and other interested individuals and organizations 
        in carrying out comprehensive strategies to improve educational 
        results for children with disabilities.
            ``(3) Targeted Federal financial resources are needed to 
        assist States, working in partnership with others, to identify 
        and make needed changes to address the needs of children with 
        disabilities into the next century.
            ``(4) State educational agencies, in partnership with local 
        educational agencies and other individuals and organizations, 
        are in the best position to identify and design ways to meet 
        emerging and expanding demands to improve education for 
        children with disabilities and to address their special needs.
            ``(5) Research, demonstration, and practice over the past 
        20 years in special education and related disciplines have 
        built a foundation of knowledge on which State and local 
        systemic-change activities can now be based.
            ``(6) Such research, demonstration, and practice in special 
        education and related disciplines have demonstrated that an 
        effective educational system now and in the future must--
                    ``(A) maintain high academic standards and clear 
                performance goals for children with disabilities, 
                consistent with the standards and expectations for all 
                students in the educational system, and provide for 
                appropriate and effective strategies and methods to 
                ensure that students who are children with disabilities 
                have maximum opportunities to achieve those standards 
                and goals;
                    ``(B) create a system that fully addresses the 
                needs of all students, including children with 
                disabilities, by addressing the needs of children with 
                disabilities in carrying out educational reform 
                activities;
                    ``(C) clearly define, in measurable terms, the 
                school and post-school results that children with 
                disabilities are expected to achieve;
                    ``(D) promote service integration, and the 
                coordination of State and local education, social, 
                health, mental health, and other services, in 
                addressing the full range of student needs, 
                particularly the needs of children with disabilities 
                who require significant levels of support to maximize 
                their participation and learning in school and the 
                community;
                    ``(E) ensure that children with disabilities are 
                provided assistance and support in making transitions 
                as described in section 674(b)(3)(C);
                    ``(F) promote comprehensive programs of 
                professional development to ensure that the persons 
                responsible for the education or a transition of 
                children with disabilities possess the skills and 
                knowledge necessary to address the educational and 
                related needs of those children;
                    ``(G) disseminate to teachers and other personnel 
                serving children with disabilities research-based 
                knowledge about successful teaching practices and 
                models and provide technical assistance to local 
                educational agencies and schools on how to improve 
                results for children with disabilities;
                    ``(H) create school-based disciplinary strategies 
                that will be used to reduce or eliminate the need to 
                use suspension and expulsion as disciplinary options 
                for children with disabilities;
                    ``(I) establish placement-neutral funding formulas 
                and cost-effective strategies for meeting the needs of 
                children with disabilities; and
                    ``(J) involve individuals with disabilities and 
                parents of children with disabilities in planning, 
                implementing, and evaluating systemic-change activities 
                and educational reforms.
    ``(b) Purpose.--The purpose of this subpart is to assist State 
educational agencies, and their partners referred to in section 652(b), 
in reforming and improving their systems for providing educational, 
early intervention, and transitional services, including their systems 
for professional development, technical assistance, and dissemination 
of knowledge about best practices, to improve results for children with 
disabilities.

``SEC. 652. ELIGIBILITY AND COLLABORATIVE PROCESS.

    ``(a) Eligible Applicants.--A State educational agency may apply 
for a grant under this subpart for a grant period of not less than 1 
year and not more than 5 years.
    ``(b) Partners.--
            ``(1) Required partners.--
                    ``(A) Contractual partners.--In order to be 
                considered for a grant under this subpart, a State 
                educational agency shall establish a partnership with 
                local educational agencies and other State agencies 
                involved in, or concerned with, the education of 
                children with disabilities.
                    ``(B) Other partners.--In order to be considered 
                for a grant under this subpart, a State educational 
                agency shall work in partnership with other persons and 
                organizations involved in, and concerned with, the 
                education of children with disabilities, including--
                            ``(i) the Governor;
                            ``(ii) parents of children with 
                        disabilities;
                            ``(iii) parents of nondisabled children;
                            ``(iv) individuals with disabilities;
                            ``(v) organizations representing 
                        individuals with disabilities and their 
                        parents, such as parent training and 
                        information centers;
                            ``(vi) community-based and other nonprofit 
                        organizations involved in the education and 
                        employment of individuals with disabilities;
                            ``(vii) the lead State agency for part C;
                            ``(viii) general and special education 
                        teachers, and early intervention personnel;
                            ``(ix) the State advisory panel established 
                        under part C;
                            ``(x) the State interagency coordinating 
                        council established under part C; and
                            ``(xi) institutions of higher education 
                        within the State.
            ``(2) Optional partners.--A partnership under subparagraph 
        (A) or (B) of paragraph (1) may also include--
                    ``(A) individuals knowledgeable about vocational 
                education;
                    ``(B) the State agency for higher education;
                    ``(C) the State vocational rehabilitation agency;
                    ``(D) public agencies with jurisdiction in the 
                areas of health, mental health, social services, and 
                juvenile justice; and
                    ``(E) other individuals.

``SEC. 653. APPLICATIONS.

    ``(a) In General.--
            ``(1) Submission.--A State educational agency that desires 
        to receive a grant under this subpart shall submit to the 
        Secretary an application at such time, in such manner, and 
        including such information as the Secretary may require.
            ``(2) State improvement plan.--The application shall 
        include a State improvement plan that--
                    ``(A) is integrated, to the maximum extent 
                possible, with State plans under the Elementary and 
                Secondary Education Act of 1965 and the Rehabilitation 
                Act of 1973, as appropriate; and
                    ``(B) meets the requirements of this section.
    ``(b) Determining Child and Program Needs.--
            ``(1) In general.--Each State improvement plan shall 
        identify those critical aspects of early intervention, general 
        education, and special education programs (including 
        professional development, based on an assessment of State and 
        local needs) that must be improved to enable children with 
        disabilities to meet the goals established by the State under 
        section 612(a)(16).
            ``(2) Required analyses.--To meet the requirement of 
        paragraph (1), the State improvement plan shall include at 
        least--
                    ``(A) an analysis of all information, reasonably 
                available to the State educational agency, on the 
                performance of children with disabilities in the State, 
                including--
                            ``(i) their performance on State 
                        assessments and other performance indicators 
                        established for all children, including drop-
                        out rates and graduation rates;
                            ``(ii) their participation in postsecondary 
                        education and employment; and
                            ``(iii) how their performance on the 
                        assessments and indicators described in clause 
                        (i) compares to that of non-disabled children;
                    ``(B) an analysis of State and local needs for 
                professional development for personnel to serve 
                children with disabilities that includes, at a 
                minimum--
                            ``(i) the number of personnel providing 
                        special education and related services; and
                            ``(ii) relevant information on current and 
                        anticipated personnel vacancies and shortages 
                        (including the number of individuals described 
                        in clause (i) with temporary certification), 
                        and on the extent of certification or 
                        retraining necessary to eliminate such 
                        shortages, that is based, to the maximum extent 
                        possible, on existing assessments of personnel 
                        needs;
                    ``(C) an analysis of the major findings of the 
                Secretary's most recent reviews of State compliance, as 
                they relate to improving results for children with 
                disabilities; and
                    ``(D) an analysis of other information, reasonably 
                available to the State, on the effectiveness of the 
                State's systems of early intervention, special 
                education, and general education in meeting the needs 
                of children with disabilities.
    ``(c) Improvement Strategies.--Each State improvement plan shall--
            ``(1) describe a partnership agreement that--
                    ``(A) specifies--
                            ``(i) the nature and extent of the 
                        partnership among the State educational agency, 
                        local educational agencies, and other State 
                        agencies involved in, or concerned with, the 
                        education of children with disabilities, and 
                        the respective roles of each member of the 
                        partnership; and
                            ``(ii) how such agencies will work in 
                        partnership with other persons and 
                        organizations involved in, and concerned with, 
                        the education of children with disabilities, 
                        including the respective roles of each of these 
                        persons and organizations; and
                    ``(B) is in effect for the period of the grant;
            ``(2) describe how grant funds will be used in undertaking 
        the systemic-change activities, and the amount and nature of 
        funds from any other sources, including part B funds retained 
        for use at the State level under sections 611(f) and 619(d), 
        that will be committed to the systemic-change activities;
            ``(3) describe the strategies the State will use to address 
        the needs identified under subsection (b), including--
                    ``(A) how the State will change State policies and 
                procedures to address systemic barriers to improving 
                results for children with disabilities;
                    ``(B) how the State will hold local educational 
                agencies and schools accountable for educational 
                progress of children with disabilities;
                    ``(C) how the State will provide technical 
                assistance to local educational agencies and schools to 
                improve results for children with disabilities;
                    ``(D) how the State will address the identified 
                needs for in-service and pre-service preparation to 
                ensure that all personnel who work with children with 
                disabilities (including both professional and 
                paraprofessional personnel who provide special 
                education, general education, related services, or 
                early intervention services) have the skills and 
                knowledge necessary to meet the needs of children with 
                disabilities, including a description of how--
                            ``(i) the State will prepare general and 
                        special education personnel with the content 
                        knowledge and collaborative skills needed to 
                        meet the needs of children with disabilities, 
                        including how the State will work with other 
                        States on common certification criteria;
                            ``(ii) the State will prepare professionals 
                        and paraprofessionals in the area of early 
                        intervention with the content knowledge and 
                        collaborative skills needed to meet the needs 
                        of infants and toddlers with disabilities;
                            ``(iii) the State will work with 
                        institutions of higher education and other 
                        entities that (on both a pre-service and an in-
                        service basis) prepare personnel who work with 
                        children with disabilities to ensure that those 
                        institutions and entities develop the capacity 
                        to support quality professional development 
                        programs that meet State and local needs;
                            ``(iv) the State will work to develop 
                        collaborative agreements with other States for 
                        the joint support and development of programs 
                        to prepare personnel for which there is not 
                        sufficient demand within a single State to 
                        justify support or development of such a 
                        program of preparation;
                            ``(v) the State will work in collaboration 
                        with other States, particularly neighboring 
                        States, to address the lack of uniformity and 
                        reciprocity in the credentialing of teachers 
                        and other personnel;
                            ``(vi) the State will enhance the ability 
                        of teachers and others to use strategies, such 
                        as behavioral interventions, to address the 
                        conduct of children with disabilities that 
                        impedes the learning of children with 
                        disabilities and others;
                            ``(vii) the State will acquire and 
                        disseminate, to teachers, administrators, 
                        school board members, and related services 
                        personnel, significant knowledge derived from 
                        educational research and other sources, and how 
                        the State will, when appropriate, adopt 
                        promising practices, materials, and technology;
                            ``(viii) the State will recruit, prepare, 
                        and retain qualified personnel, including 
                        personnel with disabilities and personnel from 
                        groups that are underrepresented in the fields 
                        of regular education, special education, and 
                        related services;
                            ``(ix) the plan is integrated, to the 
                        maximum extent possible, with other 
                        professional development plans and activities, 
                        including plans and activities developed and 
                        carried out under other Federal and State laws 
                        that address personnel recruitment and 
                        training; and
                            ``(x) the State will provide for the joint 
                        training of parents and special education, 
                        related services, and general education 
                        personnel;
                    ``(E) strategies that will address systemic 
                problems identified in Federal compliance reviews, 
                including shortages of qualified personnel;
                    ``(F) how the State will disseminate results of the 
                local capacity-building and improvement projects funded 
                under section 611(f)(4);
                    ``(G) how the State will address improving results 
                for children with disabilities in the geographic areas 
                of greatest need; and
                    ``(H) how the State will assess, on a regular 
                basis, the extent to which the strategies implemented 
                under this subpart have been effective; and
            ``(4) describe how the improvement strategies described in 
        paragraph (3) will be coordinated with public and private 
        sector resources.
    ``(d) Competitive Awards.--
            ``(1) In general.--The Secretary shall make grants under 
        this subpart on a competitive basis.
            ``(2) Priority.--The Secretary may give priority to 
        applications on the basis of need, as indicated by such 
        information as the findings of Federal compliance reviews.
    ``(e) Peer Review.--
            ``(1) In general.--The Secretary shall use a panel of 
        experts who are competent, by virtue of their training, 
        expertise, or experience, to evaluate applications under this 
        subpart.
            ``(2) Composition of panel.--A majority of a panel 
        described in paragraph (1) shall be composed of individuals who 
        are not employees of the Federal Government.
            ``(3) Payment of fees and expenses of certain members.--The 
        Secretary may use available funds appropriated to carry out 
        this subpart to pay the expenses and fees of panel members who 
        are not employees of the Federal Government.
    ``(f) Reporting Procedures.--Each State educational agency that 
receives a grant under this subpart shall submit performance reports to 
the Secretary pursuant to a schedule to be determined by the Secretary, 
but not more frequently than annually. The reports shall describe the 
progress of the State in meeting the performance goals established 
under section 612(a)(16), analyze the effectiveness of the State's 
strategies in meeting those goals, and identify any changes in the 
strategies needed to improve its performance.

``SEC. 654. USE OF FUNDS.

    ``(a) In General.--
            ``(1) Activities.--A State educational agency that receives 
        a grant under this subpart may use the grant to carry out any 
        activities that are described in the State's application and 
        that are consistent with the purpose of this subpart.
            ``(2) Contracts and subgrants.--Each such State educational 
        agency--
                    ``(A) shall, consistent with its partnership 
                agreement under section 652(b), award contracts or 
                subgrants to local educational agencies, institutions 
                of higher education, and parent training and 
                information centers, as appropriate, to carry out its 
                State improvement plan under this subpart; and
                    ``(B) may award contracts and subgrants to other 
                public and private entities, including the lead agency 
                under part C, to carry out such plan.
    ``(b) Use of Funds for Professional Development.--A State 
educational agency that receives a grant under this subpart--
            ``(1) shall use not less than 75 percent of the funds it 
        receives under the grant for any fiscal year--
                    ``(A) to ensure that there are sufficient regular 
                education, special education, and related services 
                personnel who have the skills and knowledge necessary 
                to meet the needs of children with disabilities and 
                developmental goals of young children; or
                    ``(B) to work with other States on common 
                certification criteria; or
            ``(2) shall use not less than 50 percent of such funds for 
        such purposes, if the State demonstrates to the Secretary's 
        satisfaction that it has the personnel described in paragraph 
        (1)(A).
    ``(c) Grants to Outlying Areas.--Public Law 95-134, permitting the 
consolidation of grants to the outlying areas, shall not apply to funds 
received under this subpart.

``SEC. 655. MINIMUM STATE GRANT AMOUNTS.

    ``(a) In General.--The Secretary shall make a grant to each State 
educational agency whose application the Secretary has selected for 
funding under this subpart in an amount for each fiscal year that is--
            ``(1) not less than $500,000, nor more than $2,000,000, in 
        the case of the 50 States, the District of Columbia, and the 
        Commonwealth of Puerto Rico; and
            ``(2) not less than $80,000, in the case of an outlying 
        area.
    ``(b) Inflation Adjustment.--Beginning with fiscal year 1999, the 
Secretary may increase the maximum amount described in subsection 
(a)(1) to account for inflation.
    ``(c) Factors.--The Secretary shall set the amount of each grant 
under subsection (a) after considering--
            ``(1) the amount of funds available for making the grants;
            ``(2) the relative population of the State or outlying 
        area; and
            ``(3) the types of activities proposed by the State or 
        outlying area.

``SEC. 656. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this subpart 
such sums as may be necessary for each of the fiscal years 1998 through 
2002.

  ``Subpart 2--Coordinated Research, Personnel Preparation, Technical 
         Assistance, Support, and Dissemination of Information

``SEC. 661. ADMINISTRATIVE PROVISIONS.

    ``(a) Comprehensive Plan.--
            ``(1) In general.--The Secretary shall develop and 
        implement a comprehensive plan for activities carried out under 
        this subpart in order to enhance the provision of educational, 
        related, transitional, and early intervention services to 
        children with disabilities under parts B and C. The plan shall 
        include mechanisms to address educational, related services, 
        transitional, and early intervention needs identified by State 
        educational agencies in applications submitted for State 
        program improvement grants under subpart 1.
            ``(2) Participants in plan development.--In developing the 
        plan described in paragraph (1), the Secretary shall consult 
        with--
                    ``(A) individuals with disabilities;
                    ``(B) parents of children with disabilities;
                    ``(C) appropriate professionals; and
                    ``(D) representatives of State and local 
                educational agencies, private schools, institutions of 
                higher education, other Federal agencies, the National 
                Council on Disability, and national organizations with 
                an interest in, and expertise in, providing services to 
                children with disabilities and their families.
            ``(3) Public comment.--The Secretary shall take public 
        comment on the plan.
            ``(4) Distribution of funds.--In implementing the plan, the 
        Secretary shall, to the extent appropriate, ensure that funds 
        are awarded to recipients under this subpart to carry out 
        activities that benefit, directly or indirectly, children with 
        disabilities of all ages.
            ``(5) Reports to congress.--The Secretary shall 
        periodically report to the Congress on the Secretary's 
        activities under this subsection, including an initial report 
        not later than the date that is 18 months after the date of the 
        enactment of the Individuals with Disabilities Act Amendments 
        of 1997.
    ``(b) Eligible Applicants.--
            ``(1) In general.--Except as otherwise provided in this 
        subpart, the following entities are eligible to apply for a 
        grant, contract, or cooperative agreement under this subpart:
                    ``(A) A State educational agency.
                    ``(B) A local educational agency.
                    ``(C) An institution of higher education.
                    ``(D) Any other public agency.
                    ``(E) A private nonprofit organization.
                    ``(F) An outlying area.
                    ``(G) An Indian tribe or a tribal organization (as 
                defined under section 4 of the Indian Self-
                Determination and Education Assistance Act).
                    ``(H) A for-profit organization, if the Secretary 
                finds it appropriate in light of the purposes of a 
                particular competition for a grant, contract, or 
                cooperative agreement under this subpart.
            ``(2) Special rule.--The Secretary may limit the entities 
        eligible for an award of a grant, contract, or cooperative 
        agreement to one or more categories of eligible entities 
        described in paragraph (1).
    ``(c) Use of Funds by Secretary.--Notwithstanding any other 
provision of law, and in addition to any authority granted the 
Secretary under chapter 1 or chapter 2, the Secretary may use up to 20 
percent of the funds available under either chapter 1 or chapter 2 for 
any fiscal year to carry out any activity, or combination of 
activities, subject to such conditions as the Secretary determines are 
appropriate effectively to carry out the purposes of such chapters, 
that--
            ``(A) is consistent with the purposes of chapter 1, chapter 
        2, or both; and
            ``(B) involves--
                    ``(i) research;
                    ``(ii) personnel preparation;
                    ``(iii) parent training and information;
                    ``(iv) technical assistance and dissemination;
                    ``(v) technology development, demonstration, and 
                utilization; or
                    ``(vi) media services.
    ``(d) Special Populations.--
            ``(1) Application requirement.--In making an award of a 
        grant, contract, or cooperative agreement under this subpart, 
        the Secretary shall, as appropriate, require an applicant to 
        demonstrate how the applicant will address the needs of 
        children with disabilities from minority backgrounds.
            ``(2) Outreach and technical assistance.--
                    ``(A) Requirement.--Notwithstanding any other 
                provision of this Act, the Secretary shall ensure that 
                at least one percent of the total amount of funds 
                appropriated to carry out this subpart is used for 
                either or both of the following activities:
                            ``(i) To provide outreach and technical 
                        assistance to Historically Black Colleges and 
                        Universities, and to institutions of higher 
                        education with minority enrollments of at least 
                        25 percent, to promote the participation of 
                        such colleges, universities, and institutions 
                        in activities under this subpart.
                            ``(ii) To enable Historically Black 
                        Colleges and Universities, and the institutions 
                        described in clause (i), to assist other 
                        colleges, universities, institutions, and 
                        agencies in improving educational and 
                        transitional results for children with 
                        disabilities.
                    ``(B) Reservation of funds.--The Secretary may 
                reserve funds appropriated under this subpart to 
                satisfy the requirement of subparagraph (A).
    ``(e) Priorities.--
            ``(1) In general.--Except as otherwise explicitly 
        authorized in this subpart, the Secretary shall ensure that a 
        grant, contract, or cooperative agreement under chapter 1 or 2 
        is awarded only--
                    ``(A) for activities that are designed to benefit 
                children with disabilities, their families, or the 
                personnel employed to work with such children or their 
                families; or
                    ``(B) to benefit other individuals with 
                disabilities who such chapter is intended to benefit.
            ``(2) Priority for particular activities.--Subject to 
        paragraph (1), the Secretary, in making an award of a grant, 
        contract, or cooperative agreement under this subpart, may, 
        without regard to the rule making procedures under section 553 
        of title 5, United States Code, limit competitions to, or 
        otherwise give priority to--
                    ``(A) projects that address one or more--
                            ``(i) age ranges;
                            ``(ii) disabilities;
                            ``(iii) school grades;
                            ``(iv) types of educational placements or 
                        early intervention environments;
                            ``(v) types of services;
                            ``(vi) content areas, such as reading; or
                            ``(vii) effective strategies for helping 
                        children with disabilities learn appropriate 
                        behavior in the school and other community-
                        based educational settings;
                    ``(B) projects that address the needs of children 
                based on the severity of their disability;
                    ``(C) projects that address the needs of--
                            ``(i) low-achieving students;
                            ``(ii) underserved populations;
                            ``(iii) children from low-income families;
                            ``(iv) children with limited English 
                        proficiency;
                            ``(v) unserved and underserved areas;
                            ``(vi) particular types of geographic 
                        areas; or
                            ``(vii) children whose behavior interferes 
                        with their learning and socialization;
                    ``(D) projects to reduce inappropriate 
                identification of children as children with 
                disabilities, particularly among minority children;
                    ``(E) projects that are carried out in particular 
                areas of the country, to ensure broad geographic 
                coverage; and
                    ``(F) any activity that is expressly authorized in 
                chapter 1 or 2.
    ``(f) Applicant and Recipient Responsibilities.--
            ``(1) Development and assessment of projects.--The 
        Secretary shall require that an applicant for, and a recipient 
        of, a grant, contract, or cooperative agreement for a project 
        under this subpart--
                    ``(A) involve individuals with disabilities or 
                parents of individuals with disabilities in planning, 
                implementing, and evaluating the project; and
                    ``(B) where appropriate, determine whether the 
                project has any potential for replication and adoption 
                by other entities.
            ``(2) Additional responsibilities.--The Secretary may 
        require a recipient of a grant, contract, or cooperative 
        agreement for a project under this subpart--
                    ``(A) to share in the cost of the project;
                    ``(B) to prepare the research and evaluation 
                findings and products from the project in formats that 
                are useful for specific audiences, including parents, 
                administrators, teachers, early intervention personnel, 
                related services personnel, and individuals with 
                disabilities;
                    ``(C) to disseminate such findings and products; 
                and
                    ``(D) to collaborate with other such recipients in 
                carrying out subparagraphs (B) and (C).
    ``(g) Application Management.--
            ``(1) Standing panel.--
                    ``(A) In general.--The Secretary shall establish 
                and use a standing panel of experts who are competent, 
                by virtue of their training, expertise, or experience, 
                to evaluate applications under this subpart that, 
                individually, request more than $75,000 per year in 
                Federal financial assistance.
                    ``(B) Membership.--The standing panel shall 
                include, at a minimum--
                            ``(i) individuals who are representatives 
                        of institutions of higher education that plan, 
                        develop, and carry out programs of personnel 
                        preparation;
                            ``(ii) individuals who design and carry out 
                        programs of research targeted to the 
                        improvement of special education programs and 
                        services;
                            ``(iii) individuals who have recognized 
                        experience and knowledge necessary to integrate 
                        and apply research findings to improve 
                        educational and transitional results for 
                        children with disabilities;
                            ``(iv) individuals who administer programs 
                        at the State or local level in which children 
                        with disabilities participate;
                            ``(v) individuals who prepare parents of 
                        children with disabilities to participate in 
                        making decisions about the education of their 
                        children;
                            ``(vi) individuals who establish policies 
                        that affect the delivery of services to 
                        children with disabilities;
                            ``(vii) individuals who are parents of 
                        children with disabilities who are benefiting, 
                        or have benefited, from coordinated research, 
                        personnel preparation, and technical 
                        assistance; and
                            ``(viii) individuals with disabilities.
                    ``(C) Training.--The Secretary shall provide 
                training to the individuals who are selected as members 
                of the standing panel under this paragraph.
                    ``(D) Term.--No individual shall serve on the 
                standing panel for more than 3 consecutive years, 
                unless the Secretary determines that the individual's 
                continued participation is necessary for the sound 
                administration of this subpart.
            ``(2) Peer-review panels for particular competitions.--
                    ``(A) Composition.--The Secretary shall ensure that 
                each sub-panel selected from the standing panel that 
                reviews applications under this subpart includes--
                            ``(i) individuals with knowledge and 
                        expertise on the issues addressed by the 
                        activities authorized by the subpart; and
                            ``(ii) to the extent practicable, parents 
                        of children with disabilities, individuals with 
                        disabilities, and persons from diverse 
                        backgrounds.
                    ``(B) Federal employment limitation.--A majority of 
                the individuals on each sub-panel that reviews an 
                application under this subpart shall be individuals who 
                are not employees of the Federal Government.
            ``(3) Use of discretionary funds for administrative 
        purposes.--
                    ``(A) Expenses and fees of non-Federal panel 
                members.--The Secretary may use funds available under 
                this subpart to pay the expenses and fees of the panel 
                members who are not officers or employees of the 
                Federal Government.
                    ``(B) Administrative support.--The Secretary may 
                use not more than 1 percent of the funds appropriated 
                to carry out this subpart to pay non-Federal entities 
                for administrative support related to management of 
                applications submitted under this subpart.
                    ``(C) Monitoring.--The Secretary may use funds 
                available under this subpart to pay the expenses of 
                Federal employees to conduct on-site monitoring of 
                projects receiving $500,000 or more for any fiscal year 
                under this subpart.
    ``(h) Program Evaluation.--The Secretary may use funds appropriated 
to carry out this subpart to evaluate activities carried out under the 
subpart.
    ``(i) Minimum Funding Required.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall ensure that, for each fiscal year, at least the following 
        amounts are provided under this subpart to address the 
        following needs:
                    ``(A) $12,832,000 to address the educational, 
                related services, transitional, and early intervention 
                needs of children with deaf-blindness.
                    ``(B) $4,000,000 to address the postsecondary, 
                vocational, technical, continuing, and adult education 
                needs of individuals with deafness.
                    ``(C) $4,000,000 to address the educational, 
                related services, and transitional needs of children 
                with an emotional disturbance and those who are at risk 
                of developing an emotional disturbance.
            ``(2) Ratable reduction.--If the total amount appropriated 
        to carry out sections 672, 673, and 685 for any fiscal year is 
        less than $130,000,000, the amounts listed in (1) shall be 
        ratably reduced.
    ``(j) Eligibility for Financial Assistance.--Effective for fiscal 
years for which the Secretary may make grants under section 619(b), no 
State or local educational agency or educational service agency or 
other public institution or agency may receive a grant under this 
subpart which relates exclusively to programs, projects, and activities 
pertaining to children aged three to five, inclusive, unless the State 
is eligible to receive a grant under section 619(b).

      ``Chapter 1--Improving Early Intervention, Educational, and 
   Transitional Services and Results for Children with Disabilities 
         through Coordinated Research and Personnel Preparation

``SEC. 671. FINDINGS AND PURPOSE.

    ``(a) Findings.--The Congress finds the following:
            ``(1) The Federal Government has an ongoing obligation to 
        support programs, projects, and activities that contribute to 
        positive results for children with disabilities, enabling 
        them--
                    ``(A) to meet their early intervention, 
                educational, and transitional goals and, to the maximum 
                extent possible, educational standards that have been 
                established for all children; and
                    ``(B) to acquire the skills that will empower them 
                to lead productive and independent adult lives.
            ``(2)(A) As a result of more than 20 years of Federal 
        support for research, demonstration projects, and personnel 
        preparation, there is an important knowledge base for improving 
        results for children with disabilities.
            ``(B) Such knowledge should be used by States and local 
        educational agencies to design and implement state-of-the-art 
        educational systems that consider the needs of, and include, 
        children with disabilities, especially in environments in which 
        they can learn along with their peers and achieve results 
        measured by the same standards as the results of their peers.
            ``(3)(A) Continued Federal support is essential for the 
        development and maintenance of a coordinated and high-quality 
        program of research, demonstration projects, dissemination of 
        information, and personnel preparation.
            ``(B) Such support--
                    ``(i) enables State educational agencies and local 
                educational agencies to improve their educational 
                systems and results for children with disabilities;
                    ``(ii) enables State and local agencies to improve 
                early intervention services and results for infants and 
                toddlers with disabilities and their families; and
                    ``(iii) enhances the opportunities for general and 
                special education personnel, related services 
                personnel, parents, and paraprofessionals to 
                participate in pre-service and in-service training, to 
                collaborate, and to improve results for children with 
                disabilities and their families.
            ``(4) The Federal Government plays a critical role in 
        facilitating the availability of an adequate number of 
        qualified personnel--
                    ``(A) to serve effectively the over 5,000,000 
                children with disabilities;
                    ``(B) to assume leadership positions in 
                administrative and direct-service capacities related to 
                teacher training and research concerning the provision 
                of early intervention services, special education, and 
                related services; and
                    ``(C) to work with children with low-incidence 
                disabilities and their families.
            ``(5) The Federal Government performs the role described in 
        paragraph (4)--
                    ``(A) by supporting models of personnel development 
                that reflect successful practice, including strategies 
                for recruiting, preparing, and retaining personnel;
                    ``(B) by promoting the coordination and integration 
                of--
                            ``(i) personnel-development activities for 
                        teachers of children with disabilities; and
                            ``(ii) other personnel-development 
                        activities supported under Federal law, 
                        including this chapter;
                    ``(C) by supporting the development and 
                dissemination of information about teaching standards; 
                and
                    ``(D) by promoting the coordination and integration 
                of personnel-development activities through linkage 
                with systemic-change activities within States and 
                nationally.
    ``(b) Purpose.--The purpose of this chapter is to provide Federal 
funding for coordinated research, demonstration projects, outreach, and 
personnel-preparation activities that--
            ``(1) are described in sections 672 through 674;
            ``(2) are linked with, and promote, systemic change; and
            ``(3) improve early intervention, educational, and 
        transitional results for children with disabilities.

``SEC. 672. RESEARCH AND INNOVATION TO IMPROVE SERVICES AND RESULTS FOR 
              CHILDREN WITH DISABILITIES.

    ``(a) In General.--The Secretary shall make competitive grants to, 
or enter into contracts or cooperative agreements with, eligible 
entities to produce, and advance the use of, knowledge--
            ``(1) to improve--
                    ``(A) services provided under this Act, including 
                the practices of professionals and others involved in 
                providing such services to children with disabilities; 
                and
                    ``(B) educational results for children with 
                disabilities;
            ``(2) to address the special needs of preschool-aged 
        children and infants and toddlers with disabilities, including 
        infants and toddlers who would be at risk of having substantial 
        developmental delays if early intervention services were not 
        provided to them;
            ``(3) to address the specific problems of over-
        identification and under-identification of children with 
        disabilities;
            ``(4) to develop and implement effective strategies for 
        addressing inappropriate behavior of students with disabilities 
        in schools, including strategies to prevent children with 
        emotional and behavioral problems from developing emotional 
        disturbances that require the provision of special education 
        and related services;
            ``(5) to improve secondary and postsecondary education and 
        transitional services for children with disabilities; and
            ``(6) to address the range of special education, related 
        services, and early intervention needs of children with 
        disabilities who need significant levels of support to maximize 
        their participation and learning in school and in the 
        community.
    ``(b) New Knowledge Production; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities, consistent with the 
        objectives described in subsection (a), that lead to the 
        production of new knowledge.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Expanding understanding of the relationships 
                between learning characteristics of children with 
                disabilities and the diverse ethnic, cultural, 
                linguistic, social, and economic backgrounds of 
                children with disabilities and their families.
                    ``(B) Developing or identifying innovative, 
                effective, and efficient curricula designs, 
                instructional approaches, and strategies, and 
                developing or identifying positive academic and social 
                learning opportunities, that--
                            ``(i) enable children with disabilities to 
                        make effective transitions described in section 
                        674(b)(3)(C) or transitions between educational 
                        settings; and
                            ``(ii) improve educational and transitional 
                        results for children with disabilities at all 
                        levels of the educational system in which the 
                        activities are carried out and, in particular, 
                        that improve the progress of the children, as 
                        measured by assessments within the general 
                        education curriculum involved.
                    ``(C) Advancing the design of assessment tools and 
                procedures that will accurately and efficiently 
                determine the special instructional, learning, and 
                behavioral needs of children with disabilities, 
                especially within the context of general education.
                    ``(D) Studying and promoting improved alignment and 
                compatibility of general and special education reforms 
                concerned with curricular and instructional reform, 
                evaluation and accountability of such reforms, and 
                administrative procedures.
                    ``(E) Advancing the design, development, and 
                integration of technology, assistive technology 
                devices, media, and materials, to improve early 
                intervention, educational, and transitional services 
                and results for children with disabilities.
                    ``(F) Improving designs, processes, and results of 
                personnel preparation for personnel who provide 
                services to children with disabilities through the 
                acquisition of information on, and implementation of, 
                research-based practices.
                    ``(G) Advancing knowledge about the coordination of 
                education with health and social services.
                    ``(H) Producing information on the long-term impact 
                of early intervention and education on results for 
                individuals with disabilities through large-scale 
                longitudinal studies.
    ``(c) Integration of Research and Practice; Authorized 
Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities, consistent with the 
        objectives described in subsection (a), that integrate research 
        and practice, including activities that support State systemic-
        change and local capacity-building and improvement efforts.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Model demonstration projects to apply and 
                test research findings in typical service settings to 
                determine the usability, effectiveness, and general 
                applicability of such research findings in such areas 
                as improving instructional methods, curricula, and 
                tools, such as textbooks and media.
                    ``(B) Demonstrating and applying research-based 
                findings to facilitate systemic changes, related to the 
                provision of services to children with disabilities, in 
                policy, procedure, practice, and the training and use 
                of personnel.
                    ``(C) Promoting and demonstrating the coordination 
                of early intervention and educational services for 
                children with disabilities with services provided by 
                health, rehabilitation, and social service agencies.
                    ``(D) Identifying and disseminating solutions that 
                overcome systemic barriers to the effective and 
                efficient delivery of early intervention, educational, 
                and transitional services to children with 
                disabilities.
    ``(d) Improving the Use of Professional Knowledge; Authorized 
Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities, consistent with the 
        objectives described in subsection (a), that improve the use of 
        professional knowledge, including activities that support State 
        systemic-change and local capacity-building and improvement 
        efforts.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Synthesizing useful research and other 
                information relating to the provision of services to 
                children with disabilities, including effective 
                practices.
                    ``(B) Analyzing professional knowledge bases to 
                advance an understanding of the relationships, and the 
                effectiveness of practices, relating to the provision 
                of services to children with disabilities.
                    ``(C) Ensuring that research and related products 
                are in appropriate formats for distribution to 
                teachers, parents, and individuals with disabilities.
                    ``(D) Enabling professionals, parents of children 
                with disabilities, and other persons, to learn about, 
                and implement, the findings of research, and successful 
                practices developed in model demonstration projects, 
                relating to the provision of services to children with 
                disabilities.
                    ``(E) Conducting outreach, and disseminating 
                information relating to successful approaches to 
                overcoming systemic barriers to the effective and 
                efficient delivery of early intervention, educational, 
                and transitional services, to personnel who provide 
                services to children with disabilities.
    ``(e) Balance Among Activities and Age Ranges.--In carrying out 
this section, the Secretary shall ensure that there is an appropriate 
balance--
            ``(1) among knowledge production, integration of research 
        and practice, and use of professional knowledge; and
            ``(2) across all age ranges of children with disabilities.
    ``(f) Applications.--An eligible entity that wishes to receive a 
grant, or enter into a contract or cooperative agreement, under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1998 through 2002.

``SEC. 673. PERSONNEL PREPARATION TO IMPROVE SERVICES AND RESULTS FOR 
              CHILDREN WITH DISABILITIES.

    ``(a) In General.--The Secretary shall, on a competitive basis, 
make grants to, or enter into contracts or cooperative agreements with, 
eligible entities--
            ``(1) to help address State-identified needs for qualified 
        personnel in special education, related services, early 
        intervention, and regular education, to work with children with 
        disabilities; and
            ``(2) to ensure that those personnel have the skills and 
        knowledge, derived from practices that have been determined, 
        through research and experience, to be successful, that are 
        needed to serve those children.
    ``(b) Low-Incidence Disabilities; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities, consistent with the 
        objectives described in subsection (a), that benefit children 
        with low-incidence disabilities.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Preparing persons who--
                            ``(i) have prior training in educational 
                        and other related service fields; and
                            ``(ii) are studying to obtain degrees, 
                        certificates, or licensure that will enable 
                        them to assist children with disabilities to 
                        achieve the objectives set out in their 
                        individualized education programs described in 
                        section 614(d), or to assist infants and 
                        toddlers with disabilities to achieve the 
                        outcomes described in their individualized 
                        family service plans described in section 636.
                    ``(B) Providing personnel from various disciplines 
                with interdisciplinary training that will contribute to 
                improvement in early intervention, educational, and 
                transitional results for children with disabilities.
                    ``(C) Preparing personnel in the innovative uses 
                and application of technology to enhance learning by 
                children with disabilities through early intervention, 
                educational, and transitional services.
                    ``(D) Preparing personnel who provide services to 
                visually impaired or blind children to teach and use 
                Braille in the provision of services to such children.
                    ``(E) Preparing personnel to be qualified 
                educational interpreters, to assist children with 
                disabilities, particularly deaf and hard-of-hearing 
                children in school and school-related activities and 
                deaf and hard-of-hearing infants and toddlers and 
                preschool children in early intervention and preschool 
                programs.
                    ``(F) Preparing personnel who provide services to 
                children with significant cognitive disabilities and 
                children with multiple disabilities.
            ``(3) Definition.--As used in this section, the term `low-
        incidence disability' means--
                    ``(A) a visual or hearing impairment, or 
                simultaneous visual and hearing impairments;
                    ``(B) a significant cognitive impairment; or
                    ``(C) any impairment for which a small number of 
                personnel with highly specialized skills and knowledge 
                are needed in order for children with that impairment 
                to receive early intervention services or a free 
                appropriate public education.
            ``(4) Selection of recipients.--In selecting recipients 
        under this subsection, the Secretary may give preference to 
        applications that propose to prepare personnel in more than one 
        low-incidence disability, such as deafness and blindness.
            ``(5) Preparation in use of braille.--The Secretary shall 
        ensure that all recipients of assistance under this subsection 
        who will use that assistance to prepare personnel to provide 
        services to visually impaired or blind children that can 
        appropriately be provided in Braille will prepare those 
        individuals to provide those services in Braille.
    ``(c) Leadership Preparation; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support leadership preparation activities that 
        are consistent with the objectives described in subsection (a).
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Preparing personnel at the advanced graduate, 
                doctoral, and postdoctoral levels of training to 
                administer, enhance, or provide services for children 
                with disabilities.
                    ``(B) Providing interdisciplinary training for 
                various types of leadership personnel, including 
                teacher preparation faculty, administrators, 
                researchers, supervisors, principals, and other persons 
                whose work affects early intervention, educational, and 
                transitional services for children with disabilities.
    ``(d) Projects of National Significance; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities, consistent with the 
        objectives described in subsection (a), that are of national 
        significance and have broad applicability.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Developing and demonstrating effective and 
                efficient practices for preparing personnel to provide 
                services to children with disabilities, including 
                practices that address any needs identified in the 
                State's improvement plan under part C;
                    ``(B) Demonstrating the application of significant 
                knowledge derived from research and other sources in 
                the development of programs to prepare personnel to 
                provide services to children with disabilities.
                    ``(C) Demonstrating models for the preparation of, 
                and interdisciplinary training of, early intervention, 
                special education, and general education personnel, to 
                enable the personnel--
                            ``(i) to acquire the collaboration skills 
                        necessary to work within teams to assist 
                        children with disabilities; and
                            ``(ii) to achieve results that meet 
                        challenging standards, particularly within the 
                        general education curriculum.
                    ``(D) Demonstrating models that reduce shortages of 
                teachers, and personnel from other relevant 
                disciplines, who serve children with disabilities, 
                through reciprocity arrangements between States that 
                are related to licensure and certification.
                    ``(E) Developing, evaluating, and disseminating 
                model teaching standards for persons working with 
                children with disabilities.
                    ``(F) Promoting the transferability, across State 
                and local jurisdictions, of licensure and certification 
                of teachers and administrators working with such 
                children.
                    ``(G) Developing and disseminating models that 
                prepare teachers with strategies, including behavioral 
                interventions, for addressing the conduct of children 
                with disabilities that impedes their learning and that 
                of others in the classroom.
                    ``(H) Institutes that provide professional 
                development that addresses the needs of children with 
                disabilities to teachers or teams of teachers, and 
                where appropriate, to school board members, 
                administrators, principals, pupil-service personnel, 
                and other staff from individual schools.
                    ``(I) Projects to improve the ability of general 
                education teachers, principals, and other 
                administrators to meet the needs of children with 
                disabilities.
                    ``(J) Developing, evaluating, and disseminating 
                innovative models for the recruitment, induction, 
                retention, and assessment of new, qualified teachers, 
                especially from groups that are underrepresented in the 
                teaching profession, including individuals with 
                disabilities.
                    ``(K) Supporting institutions of higher education 
                with minority enrollments of at least 25 percent for 
                the purpose of preparing personnel to work with 
                children with disabilities.
    ``(e) High-Incidence Disabilities; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities, consistent with the 
        objectives described in subsection (a), to benefit children 
        with high-incidence disabilities, such as children with 
        specific learning disabilities, speech or language impairment, 
        or mental retardation.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include the following:
                    ``(A) Activities undertaken by institutions of 
                higher education, local educational agencies, and other 
                local entities--
                            ``(i) to improve and reform their existing 
                        programs to prepare teachers and related 
                        services personnel--
                                    ``(I) to meet the diverse needs of 
                                children with disabilities for early 
                                intervention, educational, and 
                                transitional services; and
                                    ``(II) to work collaboratively in 
                                regular classroom settings; and
                            ``(ii) to incorporate best practices and 
                        research-based knowledge about preparing 
                        personnel so they will have the knowledge and 
                        skills to improve educational results for 
                        children with disabilities.
                    ``(B) Activities incorporating innovative 
                strategies to recruit and prepare teachers and other 
                personnel to meet the needs of areas in which there are 
                acute and persistent shortages of personnel.
                    ``(C) Developing career opportunities for 
                paraprofessionals to receive training as special 
                education teachers, related services personnel, and 
                early intervention personnel, including 
                interdisciplinary training to enable them to improve 
                early intervention, educational, and transitional 
                results for children with disabilities.
    ``(f) Applications.--
            ``(1) In general.--Any eligible entity that wishes to 
        receive a grant, or enter into a contract or cooperative 
        agreement, under this section shall submit an application to 
        the Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(2) Identified state needs.--
                    ``(A) Requirement to address identified needs.--Any 
                application under subsection (b), (c), or (e) shall 
                include information demonstrating to the satisfaction 
                of the Secretary that the activities described in the 
                application will address needs identified by the State 
                or States the applicant proposes to serve.
                    ``(B) Cooperation with state educational 
                agencies.--Any applicant that is not a local 
                educational agency or a State educational agency shall 
                include information demonstrating to the satisfaction 
                of the Secretary that the applicant and one or more 
                State educational agencies have engaged in a 
                cooperative effort to plan the project to which the 
                application pertains, and will cooperate in carrying 
                out and monitoring the project.
            ``(3) Acceptance by states of personnel preparation 
        requirements.--The Secretary may require applicants to provide 
        letters from one or more States stating that the States--
                    ``(A) intend to accept successful completion of the 
                proposed personnel preparation program as meeting State 
                personnel standards for serving children with 
                disabilities or serving infants and toddlers with 
                disabilities; and
                    ``(B) need personnel in the area or areas in which 
                the applicant proposes to provide preparation, as 
                identified in the States' comprehensive systems of 
                personnel development under parts B and C.
    ``(g) Selection of Recipients.--
            ``(1) Impact of project.--In selecting recipients under 
        this section, the Secretary may consider the impact of the 
        project proposed in the application in meeting the need for 
        personnel identified by the States.
            ``(2) Requirement on applicants to meet state and 
        professional standards.--The Secretary shall make grants under 
        this section only to eligible applicants that meet State and 
        professionally-recognized standards for the preparation of 
        special education and related services personnel, if the 
        purpose of the project is to assist personnel in obtaining 
        degrees.
            ``(3) Preferences.--In selecting recipients under this 
        section, the Secretary may--
                    ``(A) give preference to institutions of higher 
                education that are educating regular education 
                personnel to meet the needs of children with 
                disabilities in integrated settings and educating 
                special education personnel to work in collaboration 
                with regular educators in integrated settings; and
                    ``(B) give preference to institutions of higher 
                education that are successfully recruiting and 
                preparing individuals with disabilities and individuals 
                from groups that are underrepresented in the profession 
                for which they are preparing individuals.
    ``(h) Service Obligation.--
            ``(1) In general.--Each application for funds under 
        subsections (b) and (e), and to the extent appropriate 
        subsection (d), shall include an assurance that the applicant 
        will ensure that individuals who receive a scholarship under 
        the proposed project will subsequently provide special 
        education and related services to children with disabilities 
        for a period of 2 years for every year for which assistance was 
        received or repay all or part of the cost of that assistance, 
        in accordance with regulations issued by the Secretary.
            ``(2) Leadership preparation.--Each application for funds 
        under subsection (c) shall include an assurance that the 
        applicant will ensure that individuals who receive a 
        scholarship under the proposed project will subsequently 
        perform work related to their preparation for a period of 2 
        years for every year for which assistance was received or repay 
        all or part of such costs, in accordance with regulations 
        issued by the Secretary.
    ``(i) Scholarships.--The Secretary may include funds for 
scholarships, with necessary stipends and allowances, in awards under 
subsections (b), (c), (d), and (e).
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1998 through 2002.

``SEC. 674. STUDIES AND EVALUATIONS.

    ``(a) Studies and Evaluations.--
            ``(1) In general.--The Secretary shall, directly or through 
        grants, contracts, or cooperative agreements, assess the 
        progress in the implementation of this Act, including the 
        effectiveness of State and local efforts to provide--
                    ``(A) a free appropriate public education to 
                children with disabilities; and
                    ``(B) early intervention services to infants and 
                toddlers with disabilities and infants and toddlers who 
                would be at risk of having substantial developmental 
                delays if early intervention services were not provided 
                to them.
            ``(2) Authorized activities.--In carrying out this 
        subsection, the Secretary may support studies, evaluations, and 
        assessments, including studies that--
                    ``(A) analyze measurable impact, outcomes, and 
                results achieved by State educational agencies and 
                local educational agencies through their activities to 
                reform policies, procedures, and practices designed to 
                improve educational and transitional services and 
                results for children with disabilities;
                    ``(B) analyze State and local needs for 
                professional development, parent training, and other 
                appropriate activities that can reduce the need for 
                disciplinary actions involving children with 
                disabilities;
                    ``(C) assess educational and transitional services 
                and results for children with disabilities from 
                minority backgrounds, including--
                            ``(i) data on--
                                    ``(I) the number of minority 
                                children who are referred for special 
                                education evaluation;
                                    ``(II) the number of minority 
                                children who are receiving special 
                                education and related services and 
                                their educational or other service 
                                placement; and
                                    ``(III) the number of minority 
                                children who graduated from secondary 
                                and postsecondary education programs; 
                                and
                            ``(ii) the performance of children with 
                        disabilities from minority backgrounds on State 
                        assessments and other performance indicators 
                        established for all students;
                    ``(D) measure educational and transitional services 
                and results of children with disabilities under this 
                Act, including longitudinal studies that--
                            ``(i) examine educational and transitional 
                        services and results for children with 
                        disabilities who are 3 through 17 years of age 
                        and are receiving special education and related 
                        services under this Act, using a national, 
                        representative sample of distinct age cohorts 
                        and disability categories; and
                            ``(ii) examine educational results, 
                        postsecondary placement, and employment status 
                        of individuals with disabilities, 18 through 21 
                        years of age, who are receiving or have 
                        received special education and related services 
                        under this Act; and
                    ``(E) identify and report on the placement of 
                children with disabilities by disability category.
    ``(b) National Assessment.--
            ``(1) In general.--The Secretary shall carry out a national 
        assessment of activities carried out with Federal funds under 
        this Act in order--
                    ``(A) to determine the effectiveness of this Act in 
                achieving its purposes;
                    ``(B) to provide information to the President, the 
                Congress, the States, local educational agencies, and 
                the public on how to implement the Act more 
                effectively; and
                    ``(C) to provide the President and the Congress 
                with information that will be useful in developing 
                legislation to achieve the purposes of this Act more 
                effectively.
            ``(2) Consultation.--The Secretary shall plan, review, and 
        conduct the national assessment under this subsection in 
        consultation with researchers, State practitioners, local 
        practitioners, parents of children with disabilities, 
        individuals with disabilities, and other appropriate 
        individuals.
            ``(3) Scope of assessment.--The national assessment shall 
        examine how well schools, local educational agencies, States, 
        other recipients of assistance under this Act, and the 
        Secretary are achieving the purposes of this Act, including--
                    ``(A) improving the performance of children with 
                disabilities in general scholastic activities and 
                assessments as compared to nondisabled children;
                    ``(B) providing for the participation of children 
                with disabilities in the general curriculum;
                    ``(C) helping children with disabilities make 
                successful transitions from--
                            ``(i) early intervention services to 
                        preschool education;
                            ``(ii) preschool education to elementary 
                        school; and
                            ``(iii) secondary school to adult life;
                    ``(D) placing and serving children with 
                disabilities, including minority children, in the least 
                restrictive environment appropriate;
                    ``(E) preventing children with disabilities, 
                especially children with emotional disturbances and 
                specific learning disabilities, from dropping out of 
                school;
                    ``(F) addressing behavioral problems of children 
                with disabilities as compared to nondisabled children;
                    ``(G) coordinating services provided under this Act 
                with each other, with other educational and pupil 
                services (including preschool services), and with 
                health and social services funded from other sources;
                    ``(H) providing for the participation of parents of 
                children with disabilities in the education of their 
                children; and
                    ``(I) resolving disagreements between education 
                personnel and parents through activities such as 
                mediation.
            ``(4) Interim and final reports.--The Secretary shall 
        submit to the President and the Congress--
                    ``(A) an interim report that summarizes the 
                preliminary findings of the assessment not later than 
                October 1, 1999; and
                    ``(B) a final report of the findings of the 
                assessment not later than October 1, 2001.
    ``(c) Annual Report.--The Secretary shall report annually to the 
Congress on--
            ``(1) an analysis and summary of the data reported by the 
        States and the Secretary of the Interior under section 618;
            ``(2) the results of activities conducted under subsection 
        (a);
            ``(3) the findings and determinations resulting from 
        reviews of State implementation of this Act.
    ``(d) Technical Assistance to LEAS.--The Secretary shall provide 
directly, or through grants, contracts, or cooperative agreements, 
technical assistance to local educational agencies to assist them in 
carrying out local capacity-building and improvement projects under 
section 611(f)(4) and other LEA systemic improvement activities under 
this Act.
    ``(e) Reservation for Studies and Technical Assistance.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        notwithstanding any other provision of this Act, the Secretary 
        may reserve up to one-half of one percent of the amount 
        appropriated under parts B and C for each fiscal year to carry 
        out this section.
            ``(2) Maximum amount.--For the first fiscal year in which 
        the amount described in paragraph (1) is at least $20,000,000, 
        the maximum amount the Secretary may reserve under paragraph 
        (1) is $20,000,000. For each subsequent fiscal year, the 
        maximum amount the Secretary may reserve under paragraph (1) is 
        $20,000,000, increased by the cumulative rate of inflation 
        since the fiscal year described in the previous sentence.
            ``(3) Use of maximum amount.--In any fiscal year described 
        in paragraph (2) for which the Secretary reserves the maximum 
        amount described in that paragraph, the Secretary shall use at 
        least half of the reserved amount for activities under 
        subsection (d).

      ``Chapter 2--Improving Early Intervention, Educational, and 
   Transitional Services and Results for Children With Disabilities 
Through Coordinated Technical Assistance, Support, and Dissemination of 
                              Information

``SEC. 681. FINDINGS AND PURPOSES.

    ``(a) In General.--The Congress finds as follows:
            ``(1) National technical assistance, support, and 
        dissemination activities are necessary to ensure that parts B 
        and C are fully implemented and achieve quality early 
        intervention, educational, and transitional results for 
        children with disabilities and their families.
            ``(2) Parents, teachers, administrators, and related 
        services personnel need technical assistance and information in 
        a timely, coordinated, and accessible manner in order to 
        improve early intervention, educational, and transitional 
        services and results at the State and local levels for children 
        with disabilities and their families.
            ``(3) Parent training and information activities have taken 
        on increased importance in efforts to assist parents of a child 
        with a disability in dealing with the multiple pressures of 
        rearing such a child and are of particular importance in--
                    ``(A) ensuring the involvement of such parents in 
                planning and decisionmaking with respect to early 
                intervention, educational, and transitional services;
                    ``(B) achieving quality early intervention, 
                educational, and transitional results for children with 
                disabilities;
                    ``(C) providing such parents information on their 
                rights and protections under this Act to ensure 
                improved early intervention, educational, and 
                transitional results for children with disabilities;
                    ``(D) assisting such parents in the development of 
                skills to participate effectively in the education and 
                development of their children and in the transitions 
                described in section 674(b)(3)(C); and
                    ``(E) supporting the roles of such parents as 
                participants within partnerships seeking to improve 
                early intervention, educational, and transitional 
                services and results for children with disabilities and 
                their families.
            ``(4) Providers of parent training and information 
        activities need to ensure that such parents who have limited 
        access to services and supports, due to economic, cultural, or 
        linguistic barriers, are provided with access to appropriate 
        parent training and information activities.
            ``(5) Parents of children with disabilities need 
        information that helps the parents to understand the rights and 
        responsibilities of their children under part B.
            ``(6) The provision of coordinated technical assistance and 
        dissemination of information to State and local agencies, 
        institutions of higher education, and other providers of 
        services to children with disabilities is essential in--
                    ``(A) supporting the process of achieving systemic 
                change;
                    ``(B) supporting actions in areas of priority 
                specific to the improvement of early intervention, 
                educational, and transitional results for children with 
                disabilities;
                    ``(C) conveying information and assistance that 
                are--
                            ``(i) based on current research (as of the 
                        date the information and assistance are 
                        conveyed);
                            ``(ii) accessible and meaningful for use in 
                        supporting systemic-change activities of State 
                        and local partnerships; and
                            ``(iii) linked directly to improving early 
                        intervention, educational, and transitional 
                        services and results for children with 
                        disabilities and their families; and
                    ``(D) organizing systems and information networks 
                for such information, based on modern technology 
                related to--
                            ``(i) storing and gaining access to 
                        information; and
                            ``(ii) distributing information in a 
                        systematic manner to parents, students, 
                        professionals, and policymakers.
            ``(7) Federal support for carrying out technology research, 
        technology development, and educational media services and 
        activities has resulted in major innovations that have 
        significantly improved early intervention, educational, and 
        transitional services and results for children with 
        disabilities and their families.
            ``(8) Such Federal support is needed--
                    ``(A) to stimulate the development of software, 
                interactive learning tools, and devices to address 
                early intervention, educational, and transitional needs 
                of children with disabilities who have certain 
                disabilities;
                    ``(B) to make information available on technology 
                research, technology development, and educational media 
                services and activities to individuals involved in the 
                provision of early intervention, educational, and 
                transitional services to children with disabilities;
                    ``(C) to promote the integration of technology into 
                curricula to improve early intervention, educational, 
                and transitional results for children with 
                disabilities;
                    ``(D) to provide incentives for the development of 
                technology and media devices and tools that are not 
                readily found or available because of the small size of 
                potential markets;
                    ``(E) to make resources available to pay for such 
                devices and tools and educational media services and 
                activities;
                    ``(F) to promote the training of personnel--
                            ``(i) to provide such devices, tools, 
                        services, and activities in a competent manner; 
                        and
                            ``(ii) to assist children with disabilities 
                        and their families in using such devices, 
                        tools, services, and activities; and
                    ``(G) to coordinate the provision of such devices, 
                tools, services, and activities--
                            ``(i) among State human services programs; 
                        and
                            ``(ii) between such programs and private 
                        agencies.
    ``(b) Purposes.--The purposes of this chapter are to ensure that--
            ``(1) children with disabilities, and their parents, 
        receive training and information on their rights and 
        protections under this Act, in order to develop the skills 
        necessary to effectively participate in planning and 
        decisionmaking relating to early intervention, educational, and 
        transitional services and in systemic-change activities;
            ``(2) parents, teachers, administrators, early intervention 
        personnel, related services personnel, and transition personnel 
        receive coordinated and accessible technical assistance and 
        information to assist such persons, through systemic-change 
        activities and other efforts, to improve early intervention, 
        educational, and transitional services and results for children 
        with disabilities and their families;
            ``(3) appropriate technology and media are researched, 
        developed, demonstrated, and made available in timely and 
        accessible formats to parents, teachers, and all types of 
        personnel providing services to children with disabilities to 
        support their roles as partners in the improvement and 
        implementation of early intervention, educational, and 
        transitional services and results for children with 
        disabilities and their families;
            ``(4) on reaching the age of majority under State law, 
        children with disabilities understand their rights and 
        responsibilities under part B, if the State provides for the 
        transfer of parental rights under section 615(m); and
            ``(5) the general welfare of deaf and hard-of-hearing 
        individuals is promoted by--
                    ``(A) bringing to such individuals understanding 
                and appreciation of the films and television programs 
                that play an important part in the general and cultural 
                advancement of hearing individuals;
                    ``(B) providing, through those films and television 
                programs, enriched educational and cultural experiences 
                through which deaf and hard-of-hearing individuals can 
                better understand the realities of their environment; 
                and
                    ``(C) providing wholesome and rewarding experiences 
                that deaf and hard-of-hearing individuals may share.

``SEC. 682. PARENT TRAINING AND INFORMATION CENTERS.

    ``(a) Program Authorized.--The Secretary may make grants to, and 
enter into contracts and cooperative agreements with, parent 
organizations to support parent training and information centers to 
carry out activities under this section.
    ``(b) Required Activities.--Each parent training and information 
center that receives assistance under this section shall--
            ``(1) provide training and information that meets the 
        training and information needs of parents of children with 
        disabilities living in the area served by the center, 
        particularly underserved parents and parents of children who 
        may be inappropriately identified;
            ``(2) assist parents to understand the availability of, and 
        how to effectively use, procedural safeguards under this Act, 
        including encouraging the use, and explaining the benefits, of 
        alternative methods of dispute resolution, such as the 
        mediation process described in section 615(e);
            ``(3) serve the parents of infants, toddlers, and children 
        with the full range of disabilities;
            ``(4) assist parents to--
                    ``(A) better understand the nature of their 
                children's disabilities and their educational and 
                developmental needs;
                    ``(B) communicate effectively with personnel 
                responsible for providing special education, early 
                intervention, and related services;
                    ``(C) participate in decisionmaking processes and 
                the development of individualized education programs 
                under part B and individualized family service plans 
                under part C;
                    ``(D) obtain appropriate information about the 
                range of options, programs, services, and resources 
                available to assist children with disabilities and 
                their families;
                    ``(E) understand the provisions of this Act for the 
                education of, and the provision of early intervention 
                services to, children with disabilities; and
                    ``(F) participate in school reform activities;
            ``(5) in States where the State elects to contract with the 
        parent training and information center, contract with State 
        educational agencies to provide, consistent with subparagraphs 
        (B) and (D) of section 615(e)(2), individuals who meet with 
        parents to explain the mediation process to them;
            ``(6) network with appropriate clearinghouses, including 
        organizations conducting national dissemination activities 
        under section 685(d), and with other national, State, and local 
        organizations and agencies, such as protection and advocacy 
        agencies, that serve parents and families of children with the 
        full range of disabilities; and
            ``(7) annually report to the Secretary on--
                    ``(A) the number of parents to whom it provided 
                information and training in the most recently concluded 
                fiscal year; and
                    ``(B) the effectiveness of strategies used to reach 
                and serve parents, including underserved parents of 
                children with disabilities.
    ``(c) Optional Activities.--A parent training and information 
center that receives assistance under this section may--
            ``(1) provide information to teachers and other 
        professionals who provide special education and related 
        services to children with disabilities;
            ``(2) assist students with disabilities to understand their 
        rights and responsibilities under section 615(m) on reaching 
        the age of majority; and
            ``(3) assist parents of children with disabilities to be 
        informed participants in the development and implementation of 
        the State's State improvement plan under subpart 1.
    ``(d) Application Requirements.--Each application for assistance 
under this section shall identify with specificity the special efforts 
that the applicant will undertake--
            ``(1) to ensure that the needs for training and information 
        of underserved parents of children with disabilities in the 
        area to be served are effectively met; and
            ``(2) to work with community-based organizations.
    ``(e) Distribution of Funds.--
            ``(1) In general.--The Secretary shall make at least 1 
        award to a parent organization in each State, unless the 
        Secretary does not receive an application from such an 
        organization in each State of sufficient quality to warrant 
        approval.
            ``(2) Selection requirement.--The Secretary shall select 
        among applications submitted by parent organizations in a State 
        in a manner that ensures the most effective assistance to 
        parents, including parents in urban and rural areas, in the 
        State.
    ``(f) Quarterly Review.--
            ``(1) Requirements.--
                    ``(A) Meetings.--The board of directors or special 
                governing committee of each organization that receives 
                an award under this section shall meet at least once in 
                each calendar quarter to review the activities for 
                which the award was made.
                    ``(B) Advising board.--Each special governing 
                committee shall directly advise the organization's 
                governing board of its views and recommendations.
            ``(2) Continuation award.--When an organization requests a 
        continuation award under this section, the board of directors 
        or special governing committee shall submit to the Secretary a 
        written review of the parent training and information program 
        conducted by the organization during the preceding fiscal year.
    ``(g) Definition of Parent Organization.--As used in this section, 
the term `parent organization' means a private nonprofit organization 
(other than an institution of higher education) that--
            ``(1) has a board of directors--
                    ``(A) the majority of whom are parents of children 
                with disabilities;
                    ``(B) that includes--
                            ``(i) individuals working in the fields of 
                        special education, related services, and early 
                        intervention; and
                            ``(ii) individuals with disabilities; and
                    ``(C) the parent and professional members of which 
                are broadly representative of the population to be 
                served; or
            ``(2) has--
                    ``(A) a membership that represents the interests of 
                individuals with disabilities and has established a 
                special governing committee that meets the requirements 
                of paragraph (1); and
                    ``(B) a memorandum of understanding between the 
                special governing committee and the board of directors 
                of the organization that clearly outlines the 
                relationship between the board and the committee and 
                the decisionmaking responsibilities and authority of 
                each.

``SEC. 683. COMMUNITY PARENT RESOURCE CENTERS.

    ``(a) In General.--The Secretary may make grants to, and enter into 
contracts and cooperative agreements with, local parent organizations 
to support parent training and information centers that will help 
ensure that underserved parents of children with disabilities, 
including low-income parents, parents of children with limited English 
proficiency, and parents with disabilities, have the training and 
information they need to enable them to participate effectively in 
helping their children with disabilities--
            ``(1) to meet developmental goals and, to the maximum 
        extent possible, those challenging standards that have been 
        established for all children; and
            ``(2) to be prepared to lead productive independent adult 
        lives, to the maximum extent possible.
    ``(b) Required Activities.--Each parent training and information 
center assisted under this section shall--
            ``(1) provide training and information that meets the 
        training and information needs of parents of children with 
        disabilities proposed to be served by the grant, contract, or 
        cooperative agreement;
            ``(2) carry out the activities required of parent training 
        and information centers under paragraphs (2) through (7) of 
        section 682(b);
            ``(3) establish cooperative partnerships with the parent 
        training and information centers funded under section 682; and
            ``(4) be designed to meet the specific needs of families 
        who experience significant isolation from available sources of 
        information and support.
    ``(c) Definition.--As used is this section, the term `local parent 
organization' means a parent organization, as defined in section 
682(g), that either--
            ``(1) has a board of directors the majority of whom are 
        from the community to be served; or
            ``(2) has--
                    ``(A) as a part of its mission, serving the 
                interests of individuals with disabilities from such 
                community; and
                    ``(B) a special governing committee to administer 
                the grant, contract, or cooperative agreement, a 
                majority of the members of which are individuals from 
                such community.

``SEC. 684. TECHNICAL ASSISTANCE FOR PARENT TRAINING AND INFORMATION 
              CENTERS.

    ``(a) In General.--The Secretary may, directly or through awards to 
eligible entities, provide technical assistance for developing, 
assisting, and coordinating parent training and information programs 
carried out by parent training and information centers receiving 
assistance under sections 682 and 683.
    ``(b) Authorized Activities.--The Secretary may provide technical 
assistance to a parent training and information center under this 
section in areas such as--
            ``(1) effective coordination of parent training efforts;
            ``(2) dissemination of information;
            ``(3) evaluation by the center of itself;
            ``(4) promotion of the use of technology, including 
        assistive technology devices and assistive technology services;
            ``(5) reaching underserved populations;
            ``(6) including children with disabilities in general 
        education programs;
            ``(7) facilitation of transitions from--
                    ``(A) early intervention services to preschool;
                    ``(B) preschool to school; and
                    ``(C) secondary school to postsecondary 
                environments; and
            ``(8) promotion of alternative methods of dispute 
        resolution.

``SEC. 685. COORDINATED TECHNICAL ASSISTANCE AND DISSEMINATION.

    ``(a) In General.--The Secretary shall, by competitively making 
grants or entering into contracts and cooperative agreements with 
eligible entities, provide technical assistance and information, 
through such mechanisms as institutes, Regional Resource Centers, 
clearinghouses, and programs that support States and local entities in 
building capacity, to improve early intervention, educational, and 
transitional services and results for children with disabilities and 
their families, and address systemic-change goals and priorities.
    ``(b) Systemic Technical Assistance; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall carry out or support technical assistance 
        activities, consistent with the objectives described in 
        subsection (a), relating to systemic change.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Assisting States, local educational agencies, 
                and other participants in partnerships established 
                under subpart 1 with the process of planning systemic 
                changes that will promote improved early intervention, 
                educational, and transitional results for children with 
                disabilities.
                    ``(B) Promoting change through a multistate or 
                regional framework that benefits States, local 
                educational agencies, and other participants in 
                partnerships that are in the process of achieving 
                systemic-change outcomes.
                    ``(C) Increasing the depth and utility of 
                information in ongoing and emerging areas of priority 
                need identified by States, local educational agencies, 
                and other participants in partnerships that are in the 
                process of achieving systemic-change outcomes.
                    ``(D) Promoting communication and information 
                exchange among States, local educational agencies, and 
                other participants in partnerships, based on the needs 
                and concerns identified by the participants in the 
                partnerships, rather than on externally imposed 
                criteria or topics, regarding--
                            ``(i) the practices, procedures, and 
                        policies of the States, local educational 
                        agencies, and other participants in 
                        partnerships; and
                            ``(ii) accountability of the States, local 
                        educational agencies, and other participants in 
                        partnerships for improved early intervention, 
                        educational, and transitional results for 
                        children with disabilities.
    ``(c) Specialized Technical Assistance; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall carry out or support activities, consistent 
        with the objectives described in subsection (a), relating to 
        areas of priority or specific populations.
            ``(2) Authorized activities.--Examples of activities that 
        may be carried out under this subsection include activities 
        that--
                    ``(A) focus on specific areas of high-priority need 
                that--
                            ``(i) are identified by States, local 
                        educational agencies, and other participants in 
                        partnerships;
                            ``(ii) require the development of new 
                        knowledge, or the analysis and synthesis of 
                        substantial bodies of information not readily 
                        available to the States, agencies, and other 
                        participants in partnerships; and
                            ``(iii) will contribute significantly to 
                        the improvement of early intervention, 
                        educational, and transitional services and 
                        results for children with disabilities and 
                        their families;
                    ``(B) focus on needs and issues that are specific 
                to a population of children with disabilities, such as 
                the provision of single-State and multi-State technical 
                assistance and in-service training--
                            ``(i) to schools and agencies serving deaf-
                        blind children and their families; and
                            ``(ii) to programs and agencies serving 
                        other groups of children with low-incidence 
                        disabilities and their families; or
                    ``(C) address the postsecondary education needs of 
                individuals who are deaf or hard of hearing.
    ``(d) National Information Dissemination; Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall carry out or support information dissemination 
        activities that are consistent with the objectives described in 
        subsection (a), including activities that address national 
        needs for the preparation and dissemination of information 
        relating to eliminating barriers to systemic-change and 
        improving early intervention, educational, and transitional 
        results for children with disabilities.
            ``(2) Authorized Activities.--Examples of activities that 
        may be carried out under this subsection include activities 
        relating to--
                    ``(A) infants and toddlers with disabilities and 
                their families, and children with disabilities and 
                their families;
                    ``(B) services for populations of children with 
                low-incidence disabilities, including deaf-blind 
                children, and targeted age groupings;
                    ``(C) the provision of postsecondary services to 
                individuals with disabilities;
                    ``(D) the need for and use of personnel to provide 
                services to children with disabilities, and personnel 
                recruitment, retention, and preparation;
                    ``(E) issues that are of critical interest to State 
                educational agencies and local educational agencies, 
                other agency personnel, parents of children with 
                disabilities, and individuals with disabilities;
                    ``(F) educational reform and systemic change within 
                States; and
                    ``(G) promoting schools that are safe and conducive 
                to learning.
            ``(3) Linking states to information sources.--In carrying 
        out this subsection, the Secretary may support projects that 
        link States to technical assistance resources, including 
        special education and general education resources, and may make 
        research and related products available through libraries, 
        electronic networks, parent training projects, and other 
        information sources.
    ``(e) Applications.--An eligible entity that wishes to receive a 
grant, or enter into a contract or cooperative agreement, under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.

``SEC. 686. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out sections 681 
through 685 such sums as may be necessary for each of the fiscal years 
1998 through 2002.

``SEC. 687. TECHNOLOGY DEVELOPMENT, DEMONSTRATION, AND UTILIZATION, AND 
              MEDIA SERVICES.

    ``(a) In General.--The Secretary shall competitively make grants 
to, and enter into contracts and cooperative agreements with, eligible 
entities to support activities described in subsections (b) and (c).
    ``(b) Technology Development, Demonstration, and Utilization; 
Authorized Activities.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall support activities to promote the development, 
        demonstration, and utilization of technology.
            ``(2) Authorized activities.--Activities that may be 
        carried out under this subsection include activities such as 
        the following:
                    ``(A) Conducting research and development 
                activities on the use of innovative and emerging 
                technologies for children with disabilities.
                    ``(B) Promoting the demonstration and use of 
                innovative and emerging technologies for children with 
                disabilities by improving and expanding the transfer of 
                technology from research and development to practice.
                    ``(C) Providing technical assistance to recipients 
                of other assistance under this section, concerning the 
                development of accessible, effective, and usable 
                products.
                    ``(D) Communicating information on available 
                technology and the uses of such technology to assist 
                children with disabilities.
                    ``(E) Supporting the implementation of research 
                programs on captioning or video description.
                    ``(F) Supporting research, development, and 
                dissemination of technology with universal-design 
                features, so that the technology is accessible to 
                individuals with disabilities without further 
                modification or adaptation.
                    ``(G) Demonstrating the use of publicly-funded 
                telecommunications systems to provide parents and 
                teachers with information and training concerning early 
                diagnosis of, intervention for, and effective teaching 
                strategies for, young children with reading 
                disabilities.
    ``(c) Educational Media Services; Authorized Activities.--In 
carrying out this section, the Secretary shall support--
            ``(1) educational media activities that are designed to be 
        of educational value to children with disabilities;
            ``(2) providing video description, open captioning, or 
        closed captioning of television programs, videos, or 
        educational materials through September 30, 2001; and after 
        fiscal year 2001, providing video description, open captioning, 
        or closed captioning of educational, news, and informational 
        television, videos, or materials;
            ``(3) distributing captioned and described videos or 
        educational materials through such mechanisms as a loan 
        service;
            ``(4) providing free educational materials, including 
        textbooks, in accessible media for visually impaired and print-
        disabled students in elementary, secondary, postsecondary, and 
        graduate schools;
            ``(5) providing cultural experiences through appropriate 
        nonprofit organizations, such as the National Theater of the 
        Deaf, that--
                    ``(A) enrich the lives of deaf and hard-of-hearing 
                children and adults;
                    ``(B) increase public awareness and understanding 
                of deafness and of the artistic and intellectual 
                achievements of deaf and hard-of-hearing persons; or
                    ``(C) promote the integration of hearing, deaf, and 
                hard-of-hearing persons through shared cultural, 
                educational, and social experiences; and
            ``(6) compiling and analyzing appropriate data relating to 
        the activities described in paragraphs (1) through (5).
    ``(d) Applications.--Any eligible entity that wishes to receive a 
grant, or enter into a contract or cooperative agreement, under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 1998 through 2002.''.

                   TITLE II--MISCELLANEOUS PROVISIONS

 SEC. 201. EFFECTIVE DATES.

    (a) Parts A and B.--
            (1) In general.--Except as provided in paragraph (2), parts 
        A and B of the Individuals with Disabilities Education Act, as 
        amended by title I, shall take effect upon the enactment of 
        this Act.
            (2) Exceptions.--
                    (A) In general.--Sections 612(a)(4), 612(a)(14), 
                612(a)(16), 614(d) (except for paragraph (6)), and 618 
                of the Individuals with Disabilities Education Act, as 
                amended by title I, shall take effect on July 1, 1998.
                    (B) Section 617.--Section 617 of the Individuals 
                with Disabilities Education Act, as amended by title I, 
                shall take effect on October 1, 1997.
                    (C) Individualized education programs and 
                comprehensive system of personnel development.--Section 
                618 of the Individuals with Disabilities Education Act, 
                as in effect on the day before the date of the 
                enactment of this Act, and the provisions of parts A 
                and B of the Individuals with Disabilities Education 
                Act relating to individualized education programs and 
                the State's comprehensive system of personnel 
                development, as so in effect, shall remain in effect 
                until July 1, 1998.
    (b) Part C.--Part C of the Individuals with Disabilities Education 
Act, as amended by title I, shall take effect on July 1, 1998.
    (c) Part D.--
            (1) In general.--Except as provided in paragraph (2), part 
        D of the Individuals with Disabilities Education Act, as 
        amended by title I, shall take effect on October 1, 1997.
            (2) Exception.--Paragraphs (1) and (2) of section 661(g) of 
        the Individuals with Disabilities Education Act, as amended by 
        title I, shall take effect on January 1, 1998.

 SEC. 202. TRANSITION.

    Notwithstanding any other provision of law, beginning on October 1, 
1997, the Secretary of Education may use funds appropriated under part 
D of the Individuals with Disabilities Education Act to make 
continuation awards for projects that were funded under section 618 and 
parts C through G of such Act (as in effect on September 30, 1997).

 SEC. 203. REPEALERS.

    (a) Part I.--Effective October 1, 1998, part I of the Individuals 
with Disabilities Education Act is hereby repealed.
    (b) Part H.--Effective July 1, 1998, part H of such Act is hereby 
repealed.
    (c) Parts C, E, F, and G.--Effective October 1, 1997, parts C, E, 
F, and G of such Act are hereby repealed.`