(2) In today’s world a high school education is
only the foundation of the lifelong learning process
which will permit individuals and nations to prosper
in the highly changing international economy of the
21st century. A college education remains an excel-
lent investment both for students and for America.
(3) The right of every American to a free, pub-
licly financed education through high school and the
responsibility of State and local governments to pro-
vide this education is recognized by the basic laws
of every State and Commonwealth within the United
States. Approximately, 90 percent of all Americans
receive their basic education through the locally gov-
erned and managed public schools.
(4) Postsecondary education, in contrast, is de-
livered through a diverse system of public and pri-
vate institutions. Students, families, the Federal
Government, States, and the private sector provide
the funds for this education through a system which
is neither rational nor adequate. A new partnership
is necessary which redefines and makes more ration-
al the respective roles of students, families, govern-
ment, nonprofit, and the private sector in ensuring
financial access to the high quality educational op-
portunities which students are academically prepared
to undertake.
(5) At the same time that the need for post-
secondary education is becoming universal, the cost
of this education has increased, causing financial
strain for all but the most affluent American fami-
lies to afford.
(6) The interstate mobility of the modern
workforce and the integrated nature of the American
economy make it appropriate for the national gov-
ernment to expand its contribution to the financing
of postsecondary education so that it is a more equal
partner with State governments and families in fi-
nancing postsecondary education.
(7) It is therefore important that adequate fi-
nancial resources are available to assure that every
high school graduate has access to the postsecondary
training which his or her efforts have qualified them
for academically.
(8) As the Federal contribution increases, how-
ever, it will be necessary to ensure that future in-
creases in the cost of attendance for students, in-
cluding tuition charges, is constrained so that Fed-
eral assistance is directed to the students rather
than to the institutions or to State governments.
The principle must be that additional Federal sup-
port is intended to supplement public resources for
education not to substitute Federal dollars for exist-
ing State expenditures.
(9) It is appropriate that the Federal Govern-
ment in exchange for the financial assistance pro-
vided, require that students meet appropriate aca-
demic standards both for initial eligibility and for
continuing support.
SEC. 3. AMERICAN OPPORTUNITY GRANTS.
(a) DESIGNATION OF PROGRAM; ELIGIBLE INSTITU-
TIONS.—Section 401(a) of the Higher Education Act of
1965 (20 U.S.C. 1070a(a)) is amended by striking para-
graph (3) and inserting the following:
‘‘(3) Basic grants made under this subpart shall be
known as ‘American Opportunity Grants’.
‘‘(4) Notwithstanding section 481, for purposes of
this section the terms ‘eligible institution’ and ‘institution
of higher education’ have the meaning given the term ‘in-
stitution of higher education’ by section 1201 of this
Act.’’.
(b) REVISION OF GRANT PROGRAM.—Section 401(b)
of the Higher Education Act of 1965 (20 U.S.C.
1070a(b)) is amended by striking paragraphs (2) through
(5) and inserting the following:
‘‘(2) 
DETERMINATION
OF
AMOUNT
OF
GRANT.—The amount of the basic grant for a stu-
dent eligible under this part for academic year
1998–1999 is determined on the basis of the ad-
justed income of the student’s family and is equal to
the sum of the basic award, the ‘B’ average merit
award, and the public service award as determined
under the following table:
If the adjusted income is—
The basic award
is—
The ‘‘B’’ average
merit award is—
The public service
award is—
Less than $10,000 ..............
$3,000
$1,000
$1,000
10,001 to 15,000 ................
2,950
900
1,000
15,001 to 20,000 ................
2,900
800
1,000
20,001 to 25,000 ................
2,850
800
1,000
25,001 to 30,000 ................
2,800
700
1,000
30,001 to 35,000 ................
2,750
600
1,000
35,001 to 40,000 ................
2,700
500
1,000
40,001 to 45,000 ................
2,650
500
1,000
45,001 to 50,000 ................
2,600
500
1,000
50,001 to 55,000 ................
2,550
500
1,000
55,001 to 60,000 ................
2,450
500
1,000
60,001 to 65,000 ................
2,200
500
1,000
65,001 to 70,000 ................
1,700
500
1,000
70,001 to 75,000 ................
1,000
500
1,000
75,001 to 80,000 ................
500
500
1,000
80,001 to 90,000 ................
500
1,000
More than 90,000 ...............
‘‘(3) LIMITATIONS ON CALCULATIONS.—
‘‘(A) COST OF ATTENDANCE LIMITATIONS
ON
CALCULATIONS.—Notwithstanding 
para-
graph (2)—
‘‘(i) the basic award determined under
the table contained in such paragraph shall
not exceed 50 percent of the cost of at-
tendance for the eligible student; and
‘‘(ii) the ‘B’ average merit award de-
termined under such table shall not exceed
15 percent of such cost of attendance.
‘‘(B) GRADE RECOGNITION.—A student is
eligible for a ‘B’ average merit award for any
academic year immediately following an aca-
demic year for which the student has main-
tained a grade average of ‘B’ or better (or the
equivalent of such a grade as determined in ac-
cordance with regulations prescribed by the
Secretary), except that no institution may grant
such a merit award to more than one-half of its
students for any academic year.
‘‘(C) SERVICE
RECOGNITION.—A student
is eligible for a public service award for any
academic year immediately following an aca-
demic year in which the student has performed
195 or more hours of qualifying public service
(as determined in accordance with regulations
prescribed by the Secretary).
‘‘(D) DETERMINATION OF ADJUSTED IN-
COME.—For purposes of subparagraph (A), a
family’s adjusted income is equal to the sum
of—
‘‘(i) the family’s adjusted gross in-
come; and
‘‘(ii) a contribution from assets deter-
mined by—
‘‘(I) determining net worth in the
manner 
required 
by 
sections
475(d)(2), 476(c)(2), and 477(c)(2);
‘‘(II) subtracting any portion of
such net worth that is attributable to
farm assets, a tax-deferred retirement
savings account or plan (as defined by
the Secretary by regulation); and
‘‘(III) subtracting $50,000;
except that such contribution from assets
shall not be less than zero.
‘‘(3) BASELINE EXPENDITURE AND REVENUE
LIMITATIONS.—
‘‘(A) IN GENERAL.—In order to be an eli-
gible institution under the American Oppor-
tunity Grant program, the governing authority
of the institution of higher education shall cer-
tify to the Secretary that—
‘‘(i) the institution has maintained—
‘‘(I) an average annual expendi-
ture for the applicable academic year
that is at least equal to the average
annual 
expenditure 
per 
full-time
equivalent student for the 3 preceding
academic years; or
‘‘(II) an annual education and
general expenses expenditure for the
applicable academic year that is at
least equal to the average annual edu-
cation and general expenses expendi-
ture for the 3 preceding academic
years; and
‘‘(ii) the tuition increase (if any) for
the applicable academic year does not ex-
ceed 120 percent the average annual tui-
tion increase for all similar institutions for
the 3 preceding academic years, as deter-
mined in accordance with regulations pre-
scribed by the Secretary.
‘‘(B) REVIEW
OF
CERTIFICATION.—The
review of such certification by the Secretary
shall be limited to such criteria which the Sec-
retary believes necessary to assure that en-
hanced Federal assistance has not been used to
supplant existing funding by the institution.
‘‘(C) WAIVERS.—The Secretary may waive
the requirements of this paragraph if the review
conducted 
under 
subparagraph 
(B) 
dem-
onstrates that the failure to comply was caused
by extraordinary and compelling circumstances.
‘‘(4) PART-TIME STUDY.—In any case where a
student attends an institution of higher education on
less than a full-time basis (excluding a student who
attends an institution of higher education on less
than a half-time basis) during any academic year,
the amount of the basic grant to which that student
is entitled shall be reduced in proportion to the de-
gree to which that student is not so attending on a
full-time basis, in accordance with a schedule of re-
ductions established by the Secretary for the pur-
poses of this division, computed in accordance with
this subpart. Such schedule of reductions shall be es-
tablished by regulation and published in the Federal
Register in accordance with section 482 of this Act.
(c) PERIOD OF ELIGIBILITY.—Section 401(c) of the
Higher Education Act of 1965 (20 U.S.C. 1070a(c)) is
amended to read as follows:
‘‘(c) PERIOD OF ELIGIBILITY.—
‘‘(1) BACCALAUREATE
DEGREE
STUDENTS.—
An undergraduate student enrolled full-time in a
program leading to a baccalaureate degree shall be
entitled to 4 academic years of support, if the stu-
dent is certified prior to the beginning of each aca-
demic term as making satisfactory progress toward
such degree. The Secretary shall promulgate regula-
tions for providing an equivalent period of support
for less than full-time students.
‘‘(2) 
NONBACCALAUREATE
DEGREE
STU-
DENTS.—An undergraduate student who is not en-
rolled full-time in a program leading to a bacca-
laureate degree shall be entitled to up to 2 terms of
support, each of which may not exceed 1 year in
length. The Secretary shall promulgate regulations
for providing an equivalent period of support for less
than full-time students.
‘‘(3) SINGLE GRANT.—No student is entitled to
receive a basic grant concurrently from more than 1
institution for any academic year.
(d) EFFECTIVE DATES.—Except as provided in sec-
tion 4, the amendments made by this section shall be ef-
fective with respect to grants to students for academic
years beginning on or after July 1, 1998.
SEC. 4. PRESERVATION OF PELL GRANTS FOR PROPRI-
ETARY SCHOOL STUDENTS.
(a) IN GENERAL.—Notwithstanding the amendments
made by section 3 of this Act, students attending propri-
etary institutions of higher education or postsecondary vo-
cational institutions (as such terms are defined in section
481 of the Higher Education Act of 1965 (20 U.S.C.
1088)) shall continue to be eligible to receive Pell grants
in accordance with section 401 of such Act as in effect
on the day before the date of enactment of this Act, except
that the maximum grant under subsection (b)(2)(A) of
such section 401 shall be $2,500.
(b) GAO EVALUATION.—Within 18 months after
such date of enactment, the Comptroller General shall
submit a report to the Economic and Educational Oppor-
tunities Committee of the House of Representatives and
the Labor and Human Resources Committee of the Senate
a report evaluating the financial aid needs of students at-
tending the institutions described in subsection (a), and
containing such alternatives and recommendations as the
Comptroller General considers appropriate to address
those financial aid needs.
SEC. 5. EVALUATION.
Section 491 of the Higher Education Act of 1965 (20
U.S.C. 1098) is amended by adding at the end the follow-
ing new subsection:
‘‘(m) AMERICAN OPPORTUNITY GRANT STUDY.—The
Advisory Committee shall conduct a study of the baseline
expenditure and revenue limitations contained in section
401(b)(3) of this Act and the need for any modifications
to such limitations. Such report shall include recommenda-
tions to restrain the annual rate of tuition increases and
increases in the cost of attendance. The Advisory Commit-
tee shall submit a report on the results of such study to
the Congress not later than December 31, 1998.’’.
SEC. 6. COMMISSION ON CORPORATE WELFARE.
(a) PURPOSE.—It is the purpose of this section to
establish a Commission on Corporate Welfare.
(b) ESTABLISHMENT.—There is hereby established
an independent agency in the executive branch a commis-
sion to be known as the Commission on Corporate Welfare
(hereafter in this section to be referred to as the ‘‘Commis-
sion’’).
(c) MEMBERSHIP.—The Commission shall be com-
posed of 7 members, 3 whom shall be appointed by the
President from the business community, one of whom shall
be appointed by the Speaker of the House of Representa-
tives, 1 of whom shall be appointed by the minority leader
of the House of Representatives, one of whom shall be ap-
pointed by the majority leader of the Senate, and 1 of
whom shall be appointed by the minority leader of the
Senate. The members of the Commission shall be ap-
pointed not later than 30 days after enactment of this Act.
Members of the Commission shall be appointed for the life
of the Commission and any vacancy shall be filled in the
manner of the original appointment. The Commission
shall select a chairperson from among its members.
(d) MEETINGS.—The Commission shall meet at the
call of the chair, and 5 members shall constitute a
quorum, but a lesser number may hold hearings.
(e) DUTIES.—The Commission shall recommend
changes in existing law relating to Federal expenditures
and revenues that would reduce direct or indirect subsidies
to corporations that in total produce a net savings that
would fully offset the expenditures resulting from section
3 of this Act, as determined by the Congressional Budget
Office.
(f) REPORT AND RECOMMENDATIONS.—The Com-
mission shall submit a final report to the President and
the Congress on the Commission’s recommendations with-
in 6 months of the date of enactment of this Act.
(g) POWERS OF THE COMMISSION.—
(1) HEARINGS.—The Commission may hold
hearings, sit and act at such times and places, take
such testimony, and receive such evidence as the