```

[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5 Enrolled Bill (ENR)]

        H.R.5

                       One Hundred Fifth Congress

                                 of the

                        United States of America

                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Tuesday,
 the seventh day of January, one thousand nine hundred and ninety-seven

                                 An Act

 
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.
``Sec. 656. Authorization of appropriations.

   ``subpart 2--coordinated research, personnel preparation, technical 
          assistance, support, and dissemination of information

``Sec. 661. Administrative provisions.

       ``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. 674. Studies and evaluations.

       ``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 proficient 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 Alaska 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 636.
        ``(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) is 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) is based upon the individual student's needs, taking 
        into account the student's preferences and interests; and
            ``(C) includes 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 3 through 5 if the State is eligible for a 
            grant under section 619; and
                ``(ii) aged 6 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 3 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) the identity of 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 3 through 5, but does not make a free 
        appropriate public education available to all children with 
        disabilities aged 3 through 5 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 aged 3 to 5, inclusive, who are enrolled in 
        programs affiliated with the 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 court or a State's 
    highest 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 do 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 10 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 title 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 2, 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 through 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 3 through 5 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 3 through 5 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 allotments 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 with disabilities 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), 
consistent with State law 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 635(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 infant or toddler are not known or 
    cannot be found or the infant or toddler 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.--At least one representative from 
        a Head Start agency or program in the State.
            ``(I) Child care agency.--At least one 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 subsection, 
    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 distributed 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 allotments to such States for such year.
            ``(B) Additional funds.--If additional funds become 
        available for making payments under this subsection for a 
        fiscal year, allotments 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 two 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 Education 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--
        ``(1) is consistent with the purposes of chapter 1, chapter 2, 
    or both; and
        ``(2) involves--
            ``(A) research;
            ``(B) personnel preparation;
            ``(C) parent training and information;
            ``(D) technical assistance and dissemination;
            ``(E) technology development, demonstration, and 
        utilization; or
            ``(F) 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 that 
        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 paragraph (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 3 through 5, 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 environ- ments; 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.
            (D) Sections 611 and 619.--Sections 611 and 619, as amended 
        by title I, shall take effect beginning with funds appropriated 
        for fiscal year 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.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
```