I
104TH CONGRESS
1ST SESSION
H. R. 1883
To strengthen parental, local, and State control of education in the United
States by eliminating the Department of Education and redefining the
Federal role in education.
IN THE HOUSE OF REPRESENTATIVES
JUNE 16, 1995
Mr. SCARBOROUGH
(for himself, Mr. BOEHNER, Mr. CHABOT, Mr.
BROWNBACK, Mr. ARMEY, Mr. DELAY, Mr. COX of California, Ms. MOL-
INARI, Mr. PAXON, Mr. BARR, Mr. BONO, Mr. CHRISTENSEN, Mr.
FORBES, Mr. FUNDERBURK, Mr. GRAHAM, Mr. HASTINGS of Washing-
ton, Mr. HOSTETTLER, Mr. HUTCHINSON, Mr. ISTOOK, Mr. SAM JOHN-
SON of Texas, Mr. JONES, Mr. METCALF, Mr. MILLER of Florida, Mr.
NETHERCUTT, Mr. RIGGS, Mr. SALMON, Mr. SOUDER, Mr. TALENT, Mr.
BACHUS, Mr. BAKER of California, Mr. BARTLETT of Maryland, Mr.
BARTON of Texas, Mr. BASS, Mr. BRYANT of Tennessee, Mr. BURR, Mr.
BURTON of Indiana, Mr. CAMP, Mr. CALLAHAN, Mr. CHAMBLISS, Mrs.
CHENOWETH, Mr. CANADY of Florida, Mr. CRAPO, Mr. CHRYSLER, Mr.
COBURN, Mr. CONDIT, Mr. COOLEY, Mr. CRANE, Mrs. CUBIN, Mr.
CUNNINGHAM, Mr. DREIER, Mr. DOOLITTLE, Mr. DORNAN, Mr. EMER-
SON, Mr. ENSIGN, Mr. FOLEY, Mr. GANSKE, Mr. GOSS, Mr.
GUTKNECHT, Mr. HANCOCK, Mr. HASTERT, Mr. HAYWORTH, Mr.
HEFLEY, Mr. HEINEMAN, Mr. HERGER, Mr. HILLEARY, Mr. HOKE, Mr.
HUNTER, Mr. INGLIS of South Carolina, Mr. KASICH, Mr. KING, Mr.
LAHOOD, Mr. LARGENT, Mr. LATHAM, Mr. LEWIS of Kentucky, Mr.
LINDER, Mr. LIVINGSTON, Mr. MANZULLO, Mr. MCCOLLUM, Mr.
MCINTOSH, Mr. MCCRERY, Mr. MICA, Mrs. MYRICK, Mr. NEUMANN, Mr.
NORWOOD, Mr. PARKER, Mr. POMBO, Mr. RADANOVICH, Mr. REGULA,
Mr. ROHRABACHER, Mr. SANFORD, Mrs. SEASTRAND, Mr. SHADEGG,
Mrs. SMITH of Washington, Mr. SMITH of Michigan, Mr. SOLOMON, Mr.
STOCKMAN, Mr. STUMP, Mr. TATE, Mr. TAYLOR of North Carolina, Mr.
THORNBERRY, Mr. TIAHRT, Mr. WATTS of Oklahoma, Mr. WELDON of
Pennsylvania, Mr. WELDON of Florida, Mr. WHITE, Mr. WHITFIELD, and
Mr. WICKER) introduced the following bill; which was referred to the
Committee on Economic and Educational Opportunities, and in addition
to the Committees on the Budget and Government Reform and Oversight,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To strengthen parental, local, and State control of education
in the United States by eliminating the Department of
Education and redefining the Federal role in education.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Back to Basics Edu-
cation Reform Act’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings.
Sec. 4. Purposes.
TITLE I—ABOLITION OF DEPARTMENT OF EDUCATION
Sec. 101. Abolition of Department.
Sec. 102. Establishment and sunset of Office of Economic Opportunities in the
Department of Health and Human Services, and transfer of
functions.
Sec. 103. Principal officers.
Sec. 104. Continuation of service of Department officer.
Sec. 105. Reorganization.
Sec. 106. Plan for winding up affairs.
Sec. 107. GAO report.
Sec. 108. Conforming amendments.
Sec. 109. Effective date.
Sec. 110. Limitation on expenditures.
TITLE II—EDUCATION PROGRAMS
Subtitle A—Elementary and Secondary Education
CHAPTER 1—ELEMENTARY AND SECONDARY EDUCATION BLOCK GRANT
Sec. 201. Goals of elementary and secondary education block grant program.
Sec. 202. Program authorized.
Sec. 203. State eligibility.
Sec. 204. General State requirements.
Sec. 205. Amount of State allotment.
Sec. 206. Local fiscal accountability.
Sec. 207. Participation of children enrolled in private schools.
Sec. 208. Definitions.
Sec. 209. Authorization of appropriations.
CHAPTER 2—OTHER ELEMENTARY AND SECONDARY EDUCATION PROGRAMS
Sec. 210. Amendments and repeals of certain education provisions.
Subtitle B—Conforming Amendments to the Individuals with Disabilities
Education Act
Sec. 211. Amendments to provisions referencing secretary of education and de-
partment of education.
Sec. 212. Amendments to definitions.
Sec. 213. Transfer of administering authority to Office of Economic Opportuni-
ties.
Sec. 214. Outreach services for certain institutions of higher education.
Subtitle C—Higher Education Programs
CHAPTER 1—ELIMINATION AND REDUCTION OF PROGRAMS
Sec. 221. Repeal of higher education laws.
Sec. 222. Amendment to the Federal Credit Reform Act.
Sec. 223. Sale of FDSL loan portfolios.
Sec. 224. Student loan program; statement of policy.
Sec. 225. Elimination of in-school interest subsidies.
CHAPTER 2—HIGHER EDUCATION BLOCK GRANT
Sec. 231. Purpose.
Sec. 232. Distribution of funds.
Sec. 233. State assurances.
Sec. 234. Use of funds.
Sec. 235. Public disclosure.
Sec. 236. Authorization of appropriations.
Sec. 237. Definitions.
Subtitle D—Miscellaneous Provisions
Sec. 241. Construction.
Sec. 242. Regulations.
Sec. 243. Consolidated application.
Sec. 244. Appropriations.
Sec. 245. Federal civil rights.
TITLE III—GENERAL PROVISIONS
Sec. 301. References.
Sec. 302. Exercise of authorities.
Sec. 303. Savings provisions.
Sec. 304. Transfer of assets.
Sec. 305. Delegation and assignment.
Sec. 306. Authority of office of management and budget with respect to func-
tions transferred.
Sec. 307. Proposed changes in law.
Sec. 308. Definition of transfer.
Sec. 309. Definitions.
TITLE IV—STATEMENTS OF POLICY
Sec. 401. Statement of policy regarding Federal education funding.
Sec. 402. Statement of policy regarding job training programs.
Sec. 403. Statement of policy regarding Indian education.
SEC. 3. FINDINGS.
The Congress finds the following:
(1) Principles of federalism embodied in the
Constitution of the United States entrust authority
over issues of educational policy to the States and
the people and a Federal Department of Education
is inconsistent with such principles.
(2) Tradition and experience dictate that the
governance and management of schools in the Unit-
ed States are best performed by parents, teachers
and communities.
(3) The intrusion by the Department of Edu-
cation into education policy has not benefited the
quality of education in this nation.
(4) The Department of Education has weak-
ened the ability of parents to make essential deci-
sions about their children’s education and has un-
dermined the capacity of communities to govern
their schools.
(5) In the 15 years of its existence, the Depart-
ment of Education has grown from 130 programs
and a budget of $14 billion to over 240 separately
authorized programs which cost almost $32 billion
annually. Meanwhile, education performance has
stagnated or deteriorated.
(6) Since 1980, the year the Federal role in
education was elevated to department status, the
graduation rate has dropped 1.3 percent. Only 71.2
percent of students who enroll in the ninth grade
now graduate from high school.
(7) The Department of Education has fostered
over-regulation, standardization, bureaucratization,
and litigation in United States education.
(8) The Department of Education expends
large amounts of money on its own maintenance and
overhead. As an organization, it is inefficient, ill-
managed, and wasteful.
(9) Recent tests reflect poor results in mathe-
matics and reading for American students compared
with students from other nations.
(10) Only through initiatives led by parents and
local communities with the power to act can the
United States elevate educational performance to-
ward an acceptable level.
(11) The Department of Education has been
hostile to many promising reform ideas.
SEC. 4. PURPOSES.
The purposes of this Act are—
(1) to improve the quality of elementary and
secondary and higher education programs in the Na-
tion;
(2) to return the responsibility and authority
for education to parents, teachers, communities, stu-
dents, and States, and provide them greater control
over education spending;
(3) to ensure that the Federal Government does
not overregulate and interfere in the decisionmaking
of parents, local communities, teachers, and students
regarding education; and
(4) to ensure that Americans are able to com-
pete in the global economy of the 21st century.
TITLE I—ABOLITION OF
DEPARTMENT OF EDUCATION
SEC. 101. ABOLITION OF DEPARTMENT.
The Department of Education is abolished.
SEC. 102. ESTABLISHMENT AND SUNSET OF OFFICE OF
ECONOMIC OPPORTUNITIES IN THE DEPART-
MENT OF HEALTH AND HUMAN SERVICES,
AND TRANSFER OF FUNCTIONS.
(a) ESTABLISHMENT OF OFFICE.—There is estab-
lished in the Department of Health and Human Services
the Office of Economic Opportunities.
(b) DIRECTOR.—
(1) IN GENERAL.—There shall be at the head
of the Office a Director for Economic Opportunities,
who shall be appointed by the President and con-
firmed with the advice and consent of the Senate.
The Office shall be administered under the super-
vision and direction of the Assistant Secretary for
the Administration for Families and Children. The
Director for Economic Opportunities shall receive
compensation at the rate prescribed for level V of
the Executive Schedule under section 5315 of title
5, United States Code.
(2) 
INITIAL
APPOINTMENT
OF
ADMINIS-
TRATOR.—Notwithstanding any other provision of
this Act or any other law, the President may, at any
time after the date of the enactment of this Act, ap-
point an individual to serve as Director of Economic
Opportunities, as such position is established under
paragraph (1). An appointment under this para-
graph may not be construed to affect the position of
Secretary of Education or the authority of the Sec-
retary before the effective date specified in section
109(a).
(c) DUTIES.—The Director shall be responsible for—
(1) the administration of all functions of the
Office pursuant to section 102 and other provisions
of law;
(2) the administration and wind-up of any out-
standing obligations of the Federal Government
under any programs terminated or repealed by this
Act; and
(3) taking such other actions as may be nec-
essary to wind up any outstanding affairs of the De-
partment of Education and the Office.
(d) TRANSFER OF FUNCTIONS.—Except as otherwise
provided in this Act, the Director shall perform all func-
tions that, immediately before the effective date of this
section under section 109(a), were functions of the De-
partment of Education (or any office of the Department)
or were performed by the Secretary of Education or any
other officer or employee of the Department in the capac-
ity as such officer or employee.
(e) ABOLITION OF OFFICE.—The Office and all of
its functions are abolished effective upon the expiration
of the authorization for the programs under its jurisdic-
tion.
SEC. 103. PRINCIPAL OFFICERS.
(a) DIRECTORS.—There shall be in the Office—
(1) an Assistant Director of Childhood School-
ing; and
(2) an Assistant Director of Advanced School-
ing.
(b) APPOINTMENT.—Each of the Assistant Directors
in the Office of Economic Opportunities shall be appointed
by the Secretary of Health and Human Services.
SEC. 104. CONTINUATION OF SERVICE OF DEPARTMENT OF-
FICER.
(a) CONTINUATION OF SERVICE OF SECRETARY.—
The individual serving as the Secretary of Education on
the effective date of this title may serve as Director until
the date an individual is appointed under this title to the
position of Director, or until the end of the 120-day period
provided for in section 3348 of title 5, United States Code
(relating to limitations on the period of time a vacancy
may be filled temporarily), whichever is earlier.
(b) COMPENSATION FOR CONTINUED SERVICE.—Any
individual who acts as the Director under subsection (a)
after the effective date of this title and before the first
appointment of a person to such position after such date
shall be compensated pursuant to section 102(b)(1) for so
serving or acting.
SEC. 105. REORGANIZATION.
The Secretary of Health and Human Services may
allocate or reallocate any function of the Office pursuant
to this Act among the officers of the Office, and may, in
accordance with the transfer of functions by this Act, con-
solidate, alter, or discontinue in the Office any organiza-
tional entities that were entities of the Department of
Education, as the Secretary of Health and Human Serv-
ices considers necessary or appropriate. Notwithstanding
any other provision of law, the Secretary of Health and
Human Services may not transfer any function or person-
nel of the Office to any agency outside of the Office.
SEC. 106. PLAN FOR WINDING UP AFFAIRS.
Not later than 180 days after the date of the enact-
ment of this Act, the President shall submit to the Con-
gress a plan for winding up the affairs of the Department
of Education in accordance with this Act.
SEC. 107. GAO REPORT.
Not later than 180 days after the date of enactment
of this Act, the Comptroller General of the United States
shall submit to the Congress a report which shall include
recommendations for the most efficient means of achiev-
ing, in accordance with this Act—
(1) the complete abolition of the Department of
Education; and
(2) the termination or transfer or other con-
tinuation of functions of the Department of Edu-
cation.
SEC. 108. CONFORMING AMENDMENTS.
(a) PRESIDENTIAL SUCCESSION.—Section 19(d)(1)
of title 3, United States Code, is amended by striking
‘‘Secretary of Education,’’.
(b) EXECUTIVE DEPARTMENTS.—Section 101 of title
5, United States Code, is amended by striking the follow-
ing item:
‘‘The Department of Education.’’.
(c) SECRETARY’S COMPENSATION.—Section 5312 of
title 5, United States Code, is amended by striking the
following item:
‘‘Secretary of Education.’’.
(d) COMPENSATION FOR POSITIONS AT LEVEL II.—
Section 5313 of title 5, United States Code, is amended
by striking the following item:
‘‘Deputy Secretary of Education.’’.
(e) COMPENSATION FOR POSITIONS AT LEVEL III.—
Section 5314 of title 5, United States Code, is amended
by striking the following item:
‘‘Under Secretary of Education.’’;
(f) COMPENSATION FOR POSITIONS AT LEVEL IV.—
Section 5315 of title 5, United States Code, is amended—
(1) by striking the following items:
‘‘Assistant Secretaries of Education (10).
‘‘General Counsel, Department of Education.
‘‘Inspector 
General, 
Department 
of 
Edu-
cation.’’;
(2) by striking the following item:
‘‘Chief Financial Officer, Department of Edu-
cation.’’; and
(3) by striking the following item:
‘‘Liaison for Community and Junior Colleges,
Department of Education.’’.
(g) COMPENSATION FOR POSITIONS AT LEVEL V.—
Section 5316 of title 5, United States Code, is amended
by striking the following item:
‘‘Additional officers, Department of Education
(4).’’.
(h) INSPECTOR GENERAL ACT OF 1978.—The In-
spector General Act of 1978 (5 U.S.C. App.) is
amended—
(1) in section 9(a)(1), by striking subparagraph
(D);
(2) in section 11(1), by striking ‘‘Education,’’;
and
(3) in section 11(2), by striking ‘‘Education,’’.
SEC. 109. EFFECTIVE DATE.
Except as otherwise provided, this title shall take ef-
fect on the date that is one year after the date of enact-
ment of this Act.
SEC. 110. LIMITATION ON EXPENDITURES.
The amount expended by the United States each fis-
cal year for the administration of a function transferred
by this Act shall not exceed 70 percent of the total amount
expended for the administration of that function during
fiscal year 1995.
TITLE II—EDUCATION
PROGRAMS
Subtitle A—Elementary and
Secondary Education
CHAPTER 1—ELEMENTARY AND
SECONDARY EDUCATION BLOCK GRANT
SEC. 201. GOALS OF ELEMENTARY AND SECONDARY EDU-
CATION BLOCK GRANT PROGRAM.
The Director of the Office of Economic Opportunities
under the Administration for Children and Families in the
Department of Health and Human Services is authorized
to provide the Governor of each State that complies with
the requirements of section 203 a grant in an amount de-
termined under section 205.
SEC. 202. PROGRAM AUTHORIZED.
Each State shall, subject to the requirements of this
Act and appropriations Acts, receive a grant under this
subtitle in each fiscal year to carry out the purposes of
this subtitle.
SEC. 203. STATE ELIGIBILITY.
(a) IN GENERAL.—To be eligible to receive a grant
under this subtitle, a State shall submit an application to
the Director of Economic Opportunities which contains
the assurances required by this title. Such application
must be submitted at such time, in such form and manner
as the Director may reasonably require.
(b) ASSURANCES.—Such application shall include the
following assurances:
(1) IMPROVE EDUCATION.—The Governor shall
use funds received to improve education.
(2) DISTRIBUTION.—The Governor shall estab-
lish a procedure to distribute funds to local edu-
cational entities or to provide services to children at-
tending local educational entities.
(3) ASSURANCES
FROM
LOCAL
EDUCATIONAL
ENTITIES.—The Governor shall require a local edu-
cational entity that seeks funds under this title to
provide assurances that—
(A) funds will be used to improve edu-
cation;
(B) parents, members of the community,
and community leaders will be involved in deci-
sionmaking at the local level; and
(C) such entity that receives funds under
this title will comply with Federal civil rights
laws.
SEC. 204. GENERAL STATE REQUIREMENTS.
(a) FUNDS FOR LOCAL USE.—
(1) IN GENERAL.—Not less than 98 percent of
the amount of funds received by a State under this
title shall be made available to local educational enti-
ties.
(2) LOCAL
DISCRETION.—A local educational
entity that receives funds from a State will have the
discretion to spend funds received from the State to
develop programs that improve education.
(b) ADMINISTRATIVE COSTS.—Not more than 2 per-
cent of funds received under this title may be used by a
State or a local educational entity for administrative pur-
poses.
SEC. 205. AMOUNT OF STATE ALLOTMENT.
(a) IN GENERAL.—Except as provided in subsections
(b) and (c), there shall be allotted to each State, which
for purposes of this section shall not include the terri-
tories, an amount which bears the same ratio to the
amount of funds appropriated for this title in any fiscal
year as the population of children, aged 5 through 17
years of age, of such State bears to the population of such
children of all the States.
(b) STATE MINIMUM.—Of the total amount appro-
priated to carry out this subtitle in any fiscal year each
State shall receive not less than one quarter of one percent
of such amounts.
(c) SET-ASIDE FOR TERRITORIES.—Of the amount
allotted under subsection (a), the Director shall allot not
more than one quarter of one percent among Puerto Rico,
the Commonwealth of the Northern Mariana Islands,
American Samoa, Guam, and the Virgin Islands.
SEC. 206. LOCAL FISCAL ACCOUNTABILITY.
A local educational entity that receives funds from
a State under this subtitle in any fiscal year shall be re-
quired to make reasonably available—
(1) a proposed budget regarding how such
funds shall be used;
(2) an accounting of the actual use of such
funds at the end of such entity’s fiscal year.
SEC. 207. PARTICIPATION OF CHILDREN ENROLLED IN PRI-
VATE SCHOOLS.
(a) SECULAR, NEUTRAL, NONIDEOLOGICAL.—Any
educational services or other benefits, including materials
and equipment, provided to children enrolled in private
schools shall be secular, neutral, and nonideological.
(b) BYPASS.—
(1) IN GENERAL.—If under law a State is pro-
hibited from providing for the participation under
this chapter of eligible children enrolled in private el-
ementary and secondary schools, the Office of Eco-
nomic Opportunities, at the request of the Governor,
shall arrange for services for such children to the ex-
tent consistent with the number of eligible children
identified under section 205 in a local educational
agency who are enrolled in private elementary and
secondary schools.
(2) EQUITABLE
SERVICES.—Services provided
under this section shall be equitable in comparison
to services and other benefits provided for public
school children participating in programs under this
chapter.
(3) REDUCTION.—The amount of funds appro-
priated to the State pursuant to section 205 shall be
reduced by the amount necessary to carry out this
section.
SEC. 208. DEFINITIONS.
Except as otherwise provided, for the purposes of this
subtitle, the following terms have the following meanings:
(1) DIRECTOR.—The term ‘‘Director’’ means
the Director of Economic Opportunities under the
Administration for Children and Families in the De-
partment of Health and Human Services.
(2) LOCAL EDUCATIONAL ENTITY.—The term
‘‘local educational entity’’ means a local educational
agency or a public or private elementary or second-
ary school.
(3) STATE.—The term ‘‘State’’ means any of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands,
American Samoa, Guam, and the Commonwealth of
the Northern Mariana Islands.
SEC. 209. AUTHORIZATION OF APPROPRIATIONS.
There 
are 
authorized 
to 
be 
appropriated
$9,000,000,000 for each of the fiscal years 1998 through
2000 to carry out the programs authorized under this sub-
title.
CHAPTER 2—OTHER ELEMENTARY AND
SECONDARY EDUCATION PROGRAMS
SEC. 210. AMENDMENTS AND REPEALS OF CERTAIN EDU-
CATION PROVISIONS.
(a) ELEMENTARY AND SECONDARY EDUCATION ACT
OF 1965.—
439, and 443, and paragraph (3) of section 431(a) of the
General Education Provisions Act are repealed.
(e) NATIONAL
EDUCATION
STATISTICS
ACT
OF
1994.—The National Education Statistics Act of 1994 is
repealed.
(f) EFFECTIVE DATE.—The repeals and transfers
made by subsections (a), (b), (c), (d), and (e) shall take
effect on the date that is one year after the date of enact-
ment of this Act.
Subtitle 
B—Conforming 
Amend-
ments to the Individuals with
Disabilities Education Act
SEC. 211. AMENDMENTS TO PROVISIONS REFERENCING
SECRETARY OF EDUCATION AND DEPART-
MENT OF EDUCATION.
(a) TRANSFER OF AUTHORITY FROM SECRETARY OF
EDUCATION TO SECRETARY OF HEALTH AND HUMAN
SERVICES.—The Individuals with Disabilities Education
Act (20 U.S.C. 1400 et seq.) is amended in sections
602(a)(14), 611(f), and 684(b)(5) by striking ‘‘Secretary
of Education’’ each place such term appears and inserting
‘‘Secretary of Health and Human Services’’.
(b) TRANSFER OF AUTHORITY FROM DEPARTMENT
OF EDUCATION
TO DEPARTMENT
OF HEALTH
AND
HUMAN SERVICES.—The Individuals with Disabilities
Education Act (20 U.S.C. 1400 et seq.) is amended in
sections 610 and 621(a)(3) by striking ‘‘Department of
Education’’ each place such term appears and inserting
‘‘Department of Health and Human Services’’.
SEC. 212. AMENDMENTS TO DEFINITIONS.
(a) DEFINITION OF EXCESS COSTS.—Subparagraph
(A) of section 602(a)(21) of the Individuals with Disabil-
ities Education Act (20 U.S.C. 1401(a)(21)(A)) is amend-
ed to read as follows:
‘‘(A) amounts received—
‘‘(i) under this part, or
‘‘(ii) under subtitle A of title II of the
Back to Basics Education Act, and’’.
(b) DEFINITION OF NATIVE LANGUAGE.—Paragraph
(22) of section 602(a) of the Individuals with Disabilities
Education Act (20 U.S.C. 1401(a)(22)) is amended to
read as follows:
‘‘(22) 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 an individual aged
3 through 21, the language normally used by the
parents of the individual.’’.
SEC. 213. TRANSFER OF ADMINISTERING AUTHORITY TO
OFFICE OF ECONOMIC OPPORTUNITIES.
The Individuals with Disabilities Education Act (20
U.S.C. 1400 et seq.) is amended—
(1) by striking section 603 and inserting the
following:
‘‘OFFICE OF ECONOMIC OPPORTUNITIES
‘‘SEC. 603. The Secretary of Health and Human
Services, acting through the Director for Economic Oppor-
tunities, shall administer and carry out this Act. The Of-
fice of Economic Opportunities shall be the principal agen-
cy in the Department of Health and Human Services for
administering and carrying out programs and activities
concerning the education and training of individuals with
disabilities.’’;
(2) in section 621(f)(1), by striking ‘‘Office of
Special Education Programs’’ and inserting ‘‘Office
of Economic Opportunities’’; and
(3) in section 685(b)(1), by striking ‘‘Office of
Special Education Programs;’’ and inserting ‘‘Office
of Economic Opportunities;’’.
SEC. 214. OUTREACH SERVICES FOR CERTAIN INSTITU-
TIONS OF HIGHER EDUCATION.
Subclause (II) of section 610(j)(2)(C)(ii) of the Indi-
viduals with Disabilities Education Act (20 U.S.C.
1409(j)(2)(C)(ii)(II)) is amended to read as follows:
‘‘(II) institutions of higher education which
have an enrollment which includes a substantial
percentage of needy students (as determined by
the Director) and the average educational and
general expenditures of which are low, per full-
time equivalent undergraduate student, in com-
parison with the average educational and gen-
eral expenditures per full-time equivalent under-
graduate student of institutions that offer simi-
lar instruction;’’.
Subtitle C—Higher Education
Programs
CHAPTER 1—ELIMINATION AND
REDUCTION OF PROGRAMS
SEC. 221. REPEAL OF HIGHER EDUCATION LAWS.
(a) IN GENERAL.—Except as provided in subsection
(b) and (c), the Higher Education Act of 1965 (20 U.S.C.
1001) is repealed effective one year after the date of the
enactment of this Act.
(b) EXCEPTIONS.—Subsection (a) shall not apply to
the following:
(1) The first section, containing the short title
of such Act.
(2) Subpart 1 of part A of title IV, relating to
Pell Grants.
(3) Part B of such title, relating to the Federal
Family Education Loan Program.
(4) Part E of such title, relating to Perkins
Loans.
(5) Parts F, G, and H of such title, relating to
needs analysis, general provisions, and the program
integrity triad.
(6) Section 1201, relating to definitions.
(c) CONTINUING AUTHORITY TO COLLECT LOANS.—
Subsection (a) shall not affect the authority of the United
States to collect any loan made under any provision re-
pealed by such subsection.
(d) PERKINS LOANS.—Section 461(b) of the Higher
Education Act of 1965 is amended to read as follows:
‘‘(b) CONTRIBUTIONS DISCONTINUED.—No funds
are authorized to be appropriated for fiscal year 1997 or
any succeeding year for the purpose of making contribu-
tions to student loan funds established under this part.’’.
(e) LIMITATION ON FUNDS FOR HOWARD UNIVER-
SITY.—Section 8 of the Act of March 2, 1867 is
amended—
(1) by inserting ‘‘(a)’’ after ‘‘SEC. 8.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) Notwithstanding subsection (a) and any provi-
sion of the Howard University Endowment Act, the total
amount that is authorized to be appropriated pursuant to
this section and such Endowment Act shall not exceed the
total amount appropriated pursuant to this section and
such Endowment Act for fiscal year 1995, and of such
total amount—
‘‘(1) not less than 30 percent of the amount ap-
propriated for fiscal year 1998 shall be appropriated
for purposes of such Endowment Act;
‘‘(2) not less than 60 percent of the amount ap-
propriated for fiscal year 1999 shall be appropriated
for purposes of such Endowment Act; and
‘‘(3) not less than 100 percent of the amount
appropriated for fiscal year 2000 shall be appro-
priated for purposes of such Endowment Act.
Notwithstanding subsection (a) and any provision of the
Howard University Endowment Act, no funds are author-
ized to be appropriated pursuant to this section or such
Endowment Act for fiscal year 2001 or any succeeding
fiscal year.’’.
SEC. 222. AMENDMENT TO THE FEDERAL CREDIT REFORM
ACT.
(a) AMENDMENT.—Section 502(5)(B) of the Con-
gressional Budget Act is amended to read as follows:
‘‘(B) The cost of a direct loan shall be the
net present value, at the time when the direct
loan is disbursed, of the following cash flows for
the estimated life of the loan—
‘‘(i) loan disbursements;
‘‘(ii) repayments of principal;
‘‘(iii) payments of interest and other
payments by or to the Government over
the life of the loan after adjusting for esti-
mated defaults, prepayments, fees, pen-
alties and other recoveries; and
‘‘(iv) in the case of a direct loan made
pursuant to a program for which the Office
of Management and Budget estimates that
for the coming fiscal year (or for any prior
fiscal year) loan commitments will equal or
exceed $5,000,000,000, direct expenses, in-
cluding but not limited to the following: ex-
penses arising from activities related to
credit extension; loan origination; loan
servicing; technical assistance; training;
program promotion; payments to contrac-
tors, other government entities, and pro-
gram participants; collection of delinquent
loans; and write-off and close-out of
loans.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to all fiscal years beginning on
or after October 1, 1995, and to statutory changes made
on or after the date of enactment of this Act.
SEC. 223. SALE OF FDSL LOAN PORTFOLIOS.
The Higher Education Act of 1965 Act (20 U.S.C.
1087h) is amended by inserting after section 458 the fol-
lowing new section:
‘‘SEC. 459. SALE OF FEDERAL DIRECT STUDENT LOAN
PORTFOLIOS.
‘‘(a) AUCTION SALES OF LOAN PORTFOLIOS.—The
Secretary shall conduct auctions to sell the outstanding
portfolio of loans made pursuant to this part. Such auc-
tions shall consist of sales of portfolios representative of
the overall characteristics of the direct loans held by the
Secretary. Auctions shall be held for portfolios of not less
than $40,000,000 of loans per sale. The first sale of loans
shall take place not later than 120 days after the date
of enactment of this section, and shall not include Federal
guarantees or reinsurance against the contingency of bor-
rower default, death, or disability.
‘‘(b) LOAN
TERMS
SUBJECT
TO
PROMISSORY
NOTE.—Such loans shall be subject to the terms and con-
ditions as specified in the borrower promissory note, and
shall not be subject to further Federal regulations pursu-
ant to this Act.
‘‘(c) DISPOSITION OF PROCEEDS.—All proceeds re-
ceived as a result of the auctions conducted pursuant to
this part shall be returned to the United States Depart-
ment of the Treasury after deduction of expenses incurred
by the Department of Education in connection with the
auctions required pursuant to this section.’’.
SEC. 224. STUDENT LOAN PROGRAM; STATEMENT OF
POLICY.
The Congress finds that the Federal student loan
programs should be reviewed to evaluate whether reforms
need to be made to the programs based on the principles
of risk sharing, market-based orientation, privatization,
and deregulation.
SEC. 225. ELIMINATION OF IN-SCHOOL INTEREST SUB-
SIDIES.
(a) GUARANTEED LOANS.—Section 428(a) of the
Higher Education Act of 1965 (20 U.S.C. 1078(a)) is
amended by adding at the end the following new para-
graph:
‘‘(8) TERMINATION OF INTEREST SUBSIDIES.—
Notwithstanding paragraph (3), no portion of the in-
terest shall be paid by the Secretary under this sub-
section on any loan made on or after October 1,
1995. Interest on the unpaid principal amount of
any such loan—
‘‘(A) which accrues prior to the beginning
of the repayment period of the loan, or
‘‘(B) which accrues during a period in
which principal need not be paid (whether or
not such principal is in fact paid) by reason of
a provision described in subsection (b)(1)(M) of
this section or in section 427(a)(2)(C),
shall, at the option of the borrower—
‘‘(i) be paid monthly or quarterly, or
‘‘(ii) be added by the lender to the prin-
cipal amount of the loan at the commencement
of the repayment period.’’.
CHAPTER 2—HIGHER EDUCATION BLOCK
GRANT
SEC. 231. PURPOSE.
It is the purpose of this part to authorize block grants
to States to assist institutions of higher education in order
to improve access to higher education and to improve the
quality of educational programs.
SEC. 232. DISTRIBUTION OF FUNDS.
(a) IN GENERAL.—From the funds appropriated
under section 236, the Director shall allocate to the Gov-
ernor of each State that has submitted the assurances re-
quired by section 233 an amount that bears the same ratio
to the amount so appropriated as the number of students
enrolled in institutions of higher education in such State
bears to the total number of students so enrolled in all
the States.
(b) EXCEPTION FOR SMALL STATES.—Notwithstand-
ing subsection (a), no State shall be allocated less than
0.25 percent of the funds appropriated under section 236.
(c) DETERMINATION OF NUMBER OF STUDENTS.—
The Director shall determine the number of students in
each State on the basis of a certification from the Gov-
ernor of each State.
SEC. 233. STATE ASSURANCES.
Any State seeking to obtain an allocation under sec-
tion 232 shall submit to the Director an application that
contains the following assurances:
(1) The Governor of such State will establish a
procedure for the distribution of funds to participat-
ing institutions of higher education.
(2) The Governor will use the funds obtained
under this part only for the improvement of higher
education.
(3) The Governor will require each participating
institution to submit assurances to the State that
they will use funds obtained under this part only for
the improvement of higher education.
(4) The Governor will require each participating
institution to submit assurances that the institution
will comply with Federal civil rights laws.
SEC. 234. USE OF FUNDS.
(a) IN GENERAL.—Any funds obtained by a partici-
pating institution under this part may, subject to the pro-
visions of this part, be used for any existing or new pro-
gram.
(b) LIMITATION ON ADMINISTRATIVE COSTS.—Not
more than 2 percent of the funds allocated to any State
or institution under this chapter may be used for adminis-
trative costs.
SEC. 235. PUBLIC DISCLOSURE.
Institutions receiving funding under this chapter
shall make reasonably available to the community, par-
ents, and students a listing of the uses of such funds.
SEC. 236. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out
this subtitle $2,000,000,000 for each of fiscal years 1998
through 2000.
SEC. 237. DEFINITIONS.
As used in this subtitle—
(1) unless otherwise provided, the terms used in
this part that are defined in section 1201 of the
Higher Education Act of 1965 have the meanings
provided in such section;
(2) the term ‘‘State’’ means the several States
and the District of Columbia; and
(3) the term ‘‘Director’’ means the Director of
Economic Opportunities in the Department of
Health and Human Services.
Subtitle D—Miscellaneous
Provisions
SEC. 241. CONSTRUCTION.
Notwithstanding the provisions of this Act, nothing
in this Act shall be construed to affect continued funding
for Galludet University, the American Printing House for
the Blind, or the National Institute for the Deaf at fiscal
year 1995 levels through fiscal year 2000.
SEC. 242. REGULATIONS.
For purposes of this title, the Secretary of Health
and Human Services shall consult with Congress before
issuing regulations regarding the grants provided under
chapter 1 of subtitle A and chapter 2 of subtitle C of this
title and shall only issue regulations that are necessary
for the timely distribution of funds to the States.
SEC. 243. CONSOLIDATED APPLICATION.
The Secretary of Health and Human Services shall
provide for a consolidated application for grants provided
under chapter 1 of subtitle A and chapter 2 of subtitle
C of this title. Consolidated applications also shall be per-
mitted at the local level.
SEC. 244. APPROPRIATIONS.
The amount that is authorized to be appropriated for
programs under chapter 2 of subtitle A, subtitle B, and
chapter 1 of subtitle C shall not exceed the amount appro-
priated for such programs for fiscal year 1995. Such pro-
grams shall be authorized through fiscal year 2000.
SEC. 245. FEDERAL CIVIL RIGHTS.
(a) IN GENERAL.—
(1) APPLICABILITY.—Nothing in this title shall
be construed to affect the applicability of civil rights
laws relating to any program established, trans-
ferred, or consolidated under this Act.
(2) DUTIES.—The Secretary of Health and
Human Services shall be responsible for carrying out
any other civil rights functions performed by the
Secretary of Education as such functions were per-
formed on the day before the date of the enactment
of this Act.
(b) HEALTH AND HUMAN SERVICES.—The Director
of the Office of Civil Rights of the Department of Health
and Human Services shall submit a report annually to the
Secretary of Health and Human Services, the President,
and the appropriate committees of Congress summarizing
the compliance and enforcement activities of the Office of
Civil Rights as such activities pertain to the Office of Eco-
nomic Opportunities. The report shall identify significant
civil rights or compliance problems for which the Office
of Civil Rights has made a recommendation for corrective
action and which, in the judgment of the Director of the
Office of Civil Rights, adequate progress is not being
made.
(c) DEPARTMENT OF JUSTICE.—The Assistant At-
torney General in charge of the Civil Rights Division of
the Department of Justice shall submit annually a report
to the Attorney General, the President, and the appro-
priate committees of Congress summarizing the activities
of the Civil Rights Division as such activities pertain to
the grantees of programs authorized by this Act.
TITLE III—GENERAL
PROVISIONS
SEC. 301. REFERENCES.
Any reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any
document of or pertaining to an office from which a func-
tion is transferred by this Act—
(1) to the Secretary of Education or an officer
of the Department of Education, is deemed to refer
to the head of the department or office to which
such function is transferred; or
(2) to the Department of Education is deemed
to refer to the department or office to which such
function is transferred.
SEC. 302. EXERCISE OF AUTHORITIES.
Except as otherwise provided by law, a Federal offi-
cial to whom a function is transferred by this Act may,
for purposes of performing the function, exercise all au-
thorities under any other provision of law that were avail-
able with respect to the performance of that function to
the official responsible for the performance of the function
immediately before the transfer of the function under this
Act.
SEC. 303. SAVINGS PROVISIONS.
(a) LEGAL DOCUMENTS.—All orders, determinations,
rules, regulations, permits, grants, loans, contracts, agree-
ments, certificates, licenses, and privileges—
(1) that have been issued, made, granted, or al-
lowed to become effective by the President, the Sec-
retary of Education, any officer or employee of any
office transferred by this Act, or any other Govern-
ment official, or by a court of competent jurisdic-
tion, in the performance of any function that is
transferred by this Act, and
(2) that are in effect on the date of such trans-
fer (or become effective after such date pursuant to
their terms as in effect on the date of such transfer),
shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked in
accordance with law by the President, any other author-
ized official, a court of competent jurisdiction, or operation
of law.
(b) PROCEEDINGS.—This Act shall not affect any
proceedings or any application for any benefits, service,
license, permit, certificate, or financial assistance pending
on the effective date of this title with respect to a function
transferred by this Act, but such proceedings and applica-
tions shall be continued. Orders shall be issued in such
proceedings, appeals shall be taken therefrom, and pay-
ments shall be made pursuant to such orders, as if this
Act had not been enacted, and orders issued in any such
proceeding shall continue in effect until modified, termi-
nated, superseded, or revoked by a duly authorized official,
by a court of competent jurisdiction, or by operation of
law. Nothing in this subsection shall be considered to pro-
hibit the discontinuance or modification of any such pro-
ceeding under the same terms and conditions and to the
same extent that such proceeding could have been discon-
tinued or modified if this Act had not been enacted.
(c) SUITS.—This Act shall not affect suits com-
menced before the effective date of this title and in all
such suits, proceeding shall be had, appeals taken, and
judgments rendered in the same manner and with the
same effect as if this Act had not been enacted.
(d) NONABATEMENT OF ACTIONS.—No suit, action,
or other proceeding commenced by or against the Depart-
ment of Education or the Secretary of Education, or by
or against any individual in the official capacity of such
individual as an officer or employee of an office trans-
ferred by this Act, shall abate by reason of the enactment
of this Act.
(e) CONTINUANCE OF SUITS.—If, before the effective
date of this title, any officer of the Department of Edu-
cation in the official capacity of such officer is party to
a suit with respect to a function of the officer, and under
this Act such function is transferred to any other officer
or office, then such suit shall be continued with the other
officer or the head of such other office, as applicable, sub-
stituted or added as a party.
SEC. 304. TRANSFER OF ASSETS.
Except as otherwise provided in this Act, so much
of the personnel, property, records, and unexpended bal-
ances of appropriations, allocations, and other funds em-
ployed, used, held, available, or to be made available in
connection with a function transferred to an official by
this Act shall be available to the official at such time or
times as the President directs for use in connection with
the functions transferred.
SEC. 305. DELEGATION AND ASSIGNMENT.
Except as otherwise expressly prohibited by law or
otherwise provided in this Act, an official to whom func-
tions are transferred under this Act (including the head
of any office to which functions are transferred under this
Act) may delegate any of the functions so transferred to
such officers and employees of the office of the official as
the official may designate, and may authorize successive
redelegations of such functions as may be necessary or ap-
propriate. No delegation of functions under this section
or under any other provision of this Act shall relieve the
official to whom a function is transferred under this Act
of responsibility for the administration of the function.
SEC. 306. AUTHORITY OF OFFICE OF MANAGEMENT AND
BUDGET 
WITH 
RESPECT 
TO 
FUNCTIONS
TRANSFERRED.
(a) DETERMINATIONS.—If necessary, the Director of
the Office of Management and Budget shall make any de-
termination of the functions that are transferred under
this Act.
(b) INCIDENTAL TRANSFERS.—The Director of the
Office of Management and Budget, at such time or times
as the Director shall provide, may make such determina-
tions as may be necessary with regard to the functions
transferred by this Act, and to make such additional inci-
dental dispositions of personnel, assets, liabilities, grants,
contracts, property, records, and unexpended balances of
appropriations, authorizations, allocations, and other
funds held, used, arising from, available to, or to be made
available in connection with such functions, as may be nec-
essary to carry out the provisions of this Act. The Director
of the Office of Management and Budget shall provide for
the termination of the affairs of all entities terminated by
this Act and for such further measures and dispositions
as may be necessary to effectuate the purposes of this Act.
SEC. 307. PROPOSED CHANGES IN LAW.
Not later than 90 days before the effective date speci-
fied in section 109, the Director of the Office of Manage-
ment and Budget shall submit to the Congress a descrip-
tion of any changes in Federal law necessary to reflect
abolishments, transfers, terminations, and disposals under
this Act.
SEC. 308. DEFINITION OF TRANSFER.
For purposes of this title, the vesting of a function
in a department or office pursuant to reestablishment of
an office shall be considered to be the transfer of the func-
tion.
SEC. 309. DEFINITIONS.
For purposes of this title, the following definitions
shall apply:
(1) DIRECTOR.—The term ‘‘Director’’ means
the Director for Economic Opportunities in the Ad-
ministration for Families and Children in the De-
partment of Health and Human Services, estab-
lished under section 102(a).
(2) FUNCTION.—The term ‘‘function’’ includes
any duty, obligation, power, authority, responsibility,
right, privilege, activity, or program.
(3) OFFICE.—The term ‘‘Office’’ means the Of-
fice of Economic Opportunities in the Department of
Health and Human Services, established under sec-
tion 102(a).
TITLE IV—STATEMENTS OF
POLICY
SEC. 401. STATEMENT OF POLICY REGARDING FEDERAL
EDUCATION FUNDING.
Congress finds that there should be a review and eval-
uation as to the feasibility of further enhancing the ability
of States and local communities to fund education by re-
ducing the Federal tax burden and commensurately elimi-
nating Federal Government involvement in providing
grants for education programs.
SEC. 402. STATEMENT OF POLICY REGARDING JOB TRAIN-
ING PROGRAMS.
The Congress finds that all job training programs
under the jurisdiction of the Department of Education—
(1) should be reviewed and transferred to the
Department of Labor; and
(2) should be consolidated into one or more
block grants.
SEC. 403. STATEMENT OF POLICY REGARDING INDIAN EDU-
CATION.
Congress finds that any program transferred as a re-
sult of this Act to the Department of the Interior should
be reviewed by Congress to ensure that such programs
benefit Native American children that live on reservations.
Æ
HR 1883 IH——2
HR 1883 IH——3
HR 1883 IH——4