100
(B) LIMITATION.—Not more than 5 per-
cent of the amount reserved by the Governor
under paragraph (1) may be used for adminis-
tration by the State of programs under this
subtitle.
(b) WITHIN STATE ALLOCATION.—The Governor of
the State shall allocate the remainder of the amount allot-
ted to the State under section 303(b) to workforce devel-
opment areas designated under title I of this Act for the
purpose of providing employment, job training, and relat-
ed assistance for adults in such areas in accordance with
section 306.
SEC. 305. ADDITIONAL STATE PLAN REQUIREMENTS.
The State shall, as part of the State workforce devel-
opment and literacy plan under title I of this Act, submit
to the Secretary the following additional information:
(1) A description of how the State will serve the
employment and training needs of dislocated work-
ers, economically disadvantaged individuals, older
workers, individuals with disabilities, and individuals
with multiple barriers to employment, including indi-
viduals who are basic skills deficient.
(2) A description of how the State will provide
rapid response assistance to workers experiencing
dislocation as a result of mass layoffs and plant clos-
101
ings, either through the direct provision of services
or through the transfer of funds to local workforce
development areas for the provision of such services.
SEC. 306. USE OF AMOUNTS.
(a) CORE SERVICES.—Amounts allocated under sec-
tion 304(b) shall be used to provide core services to adults
through one-stop career centers in accordance with title
I of this Act.
(b) INTENSIVE SERVICES.—
(1) IN
GENERAL.—Amounts allocated under
section 304(b) may be used to provide intensive
services to adults—
(A) who are unable to obtain employment
through core services under subsection (a); and
(B) who have been determined to be in
need of more intensive services in order to gain
employment.
(2) DELIVERY
OF
SERVICES.—Such intensive
services shall be provided—
(A) directly through one-stop career cen-
ters in accordance with title I of this Act; or
(B) through contracts through such cen-
ters with service providers approved by the local
workforce development board.
102
(3) TYPES OF SERVICES.—Such intensive serv-
ices may include the following:
(A) Comprehensive and specialized assess-
ments of the skill levels and service needs of
adults, which may include—
(i) diagnostic testing and other assess-
ment tools; and
(ii) in-depth interviewing and evalua-
tion to identify employment barriers and
appropriate employment goals.
(B) Development of an individual employ-
ment plan, to identify the employment goals,
appropriate achievement objectives, and the ap-
propriate combination of services for the adult
to achieve the employment goal.
(C) Group counseling.
(D) Individual counseling and career plan-
ning.
(E) Case management for adults receiving
education and training services under sub-
section (c) or supportive services under sub-
section (d).
(F) Followup counseling for adults placed
in training or employment, for up to 1 year.
(c) EDUCATION AND TRAINING SERVICES.—
103
(1) IN
GENERAL.—Amounts allocated under
section 304(b) may be used to provide education and
training services to adults—
(A) who are unable to obtain employment
through core services under subsection (a); and
(B) who are in need of education and
training services in order to gain employment
as a result of determinations made through—
(i) preliminary assessments under sec-
tion 108(f)(1)(B) of this Act; or
(ii) comprehensive and specialized as-
sessments under subsection (b)(3)(A).
(2) DELIVERY OF SERVICES.—Such education
and training services shall be provided through edu-
cation and training providers certified in accordance
with title I of this Act.
(3) TYPES OF SERVICES.—Such education and
training services may include the following:
(A) Basic skills training, including reme-
dial education, literacy training, and English
literacy program instruction.
(B) Occupational skills training.
(C) On-the-job training.
(D) Programs that combine workplace
training with related instruction.
104
(E) Training programs operated by the
private sector.
(F) Skill upgrading and retraining.
(G) Entrepreneurial training.
(H) Employability training to enhance
basic workplace competencies.
(I) Customized training conducted with a
commitment by an employer or group of em-
ployers to employ an individual upon successful
completion of the training.
(4) ADDITIONAL REQUIREMENTS.—
(A) USE OF VOUCHERS.—(i) To the extent
practicable, education and training services
under this subsection shall be provided through
the use of vouchers in accordance with section
109.
(ii) A portion of the total payment for the
education and training provided by a service
provider to a participant pursuant to a voucher
issued under this subparagraph may be with-
held from such provider until—
(I) the participant has successfully
completed the training; and
105
(II) the participant has been employed
and retained employment for a period not
less than 90 days.
(B) LINKAGE
TO
OCCUPATIONS
IN
DE-
MAND.—Education and training services under
this subsection shall be directly linked to occu-
pations for which there is a demand in the local
workforce development area, or in another area
to which an adult receiving such services is will-
ing to relocate.
(d) ADDITIONAL SERVICES.—
(1) SUPPORTIVE
SERVICES.—Supportive serv-
ices may be provided for individuals—
(A) who are receiving assistance under any
of subsections (a) through (c); and
(B) who are unable to receive such services
through other programs providing such services.
(2) NEEDS-RELATED PAYMENTS.—
(A) 
IN
GENERAL.—Amounts 
allocated
under section 304(b) may be used to provide
needs-related payments to adults who are un-
employed and do not qualify for (or have ceased
to qualify for) unemployment compensation for
the purpose of enabling such adults to partici-
106
pate in education and training programs under
subsection (c).
(B) ADDITIONAL
ELIGIBILITY
REQUIRE-
MENTS.—In addition to the requirements con-
tained in subparagraph (A), a dislocated worker
who has exhausted unemployment insurance
benefits shall be eligible to receive needs-related
payments under this paragraph only if such
worker was enrolled in education or training by
the end of the 8th week of the worker’s initial
unemployment compensation benefit period, or,
if later, by the end of the 8th week after the
worker is informed that a short-term layoff will
in fact exceed 6 months.
(e) PROHIBITION ON PRIVATE RIGHT OF ACTION.—
Nothing in this section shall be construed to establish a
right for a participant to bring an action to obtain services
under a program established under this section.
SEC. 307. CORE STANDARDS, PERFORMANCE GOALS, AND
MEASURES.
(a) GENERAL AUTHORITY.—
(1) STANDARDS AND MEASURES.—Each State
receiving a grant under this title shall have devel-
oped or shall develop and implement a statewide sys-
tem of core standards and measures of performance
107
for programs established under this title, based upon
performance standards described in paragraph (2),
and consistent with the State’s goals and objectives,
and benchmarking process described in the State
plan required under section 104.
(2) STATEWIDE SYSTEM.—Each statewide sys-
tem shall—
(A) establish or have established perform-
ance goals to define the level of performance to
be achieved by adults served under this title
and to evaluate the quality and effectiveness of
services and activities under this title;
(B) express such goals in an objective,
quantifiable, and measurable form;
(C) establish performance indicators or
benchmarks that the State and local recipients
of funds will use in measuring or assessing
progress toward achieving such goals; and
(D) provide biennial reports to the public
and to the Secretary on the States progress in
achieving its goals.
(b) REQUIREMENTS.—Each system developed under
subsection (a) shall include measures of—
(1) placement, retention, and earnings of par-
ticipants in unsubsidized employment, including re-
108
tention and earnings at 6 months, and at one year
after program termination, respectively;
(2) the provision of services to dislocated work-
ers, economically disadvantaged individuals, older
workers, individuals with disabilities and individuals
with multiple barriers to employment, including indi-
viduals who are basic skills deficient; and
(3) acquisition of skills certificates pursuant to
a skill standards and skill certification system en-
dorsed by the National Skill Standards Board, once
such system is established.
Subtitle B—Federal Programs
SEC. 311. NATIONAL DISCRETIONARY GRANTS.
(a) GRANTS FOR DISLOCATED WORKERS.—
(1) IN
GENERAL.—From amounts reserved
under section 303(a)(2) for any fiscal year, the Sec-
retary is authorized to award national discretionary
grants to address major economic dislocations that
result from plant closures, base closures, or mass
layoffs.
(2) APPLICATION.—To receive a grant under
this section, an eligible entity shall submit an appli-
cation to the Secretary at such time, in such man-
ner, and accompanied by such information as the
Secretary determines is appropriate.
109
(3) ELIGIBLE
ENTITIES.—Grants under this
section may be awarded to—
(A) the State;
(B) a local workforce development board
administering assistance under this Act;
(C) employers and employer associations;
(D) worker-management transition assist-
ance committees and other employer-employee
entities;
(E) representatives of employees;
(F) community development corporations
and community-based organizations; and
(G) industry consortia.
(b) INCENTIVE GRANTS.—From amounts reserved
under section 303(a)(2) for any fiscal year, the Secretary
may provide performance awards to States that have
achieved exceptional performance through the implemen-
tation of statewide workforce development systems.
SEC. 312. DISASTER RELIEF EMPLOYMENT ASSISTANCE.
(a) IN GENERAL.—From amounts reserved under
section 303(a)(2) for any fiscal year, the Secretary may
provide assistance to the Governor of any State within
which is located an area that has suffered an emergency
or a major disaster as defined in paragraphs (1) and (2),
respectively, of section 102 of the Robert T. Stafford Dis-
110
aster Relief and Emergency Assistance Act (referred to
in this section as the ‘‘disaster area’’).
(b) USE OF FUNDS.—
(1) 
PROJECTS
RESTRICTED
TO
DISASTER
AREAS.—Funds made available under this section—
(A) shall be used exclusively to provide em-
ployment on projects to provide food, clothing,
shelter, and other humanitarian assistance for
disaster victims and on projects regarding dem-
olition, cleanup, repair, renovation, and recon-
struction of damaged and destroyed structures,
facilities, and lands located within the disaster
area; and
(B) may be expended through public and
private agencies and organizations engaged in
such projects.
(2) ELIGIBILITY REQUIREMENTS.—An individ-
ual shall be eligible to be offered disaster employ-
ment under this section if such individual is a dis-
located worker or is temporarily or permanently laid
off as a consequence of the disaster.
(3) LIMITATIONS
ON
DISASTER
RELIEF
EM-
PLOYMENT.—No individual shall be employed under
this part for more than 6 months for work related
to recovery from a single natural disaster.
111
SEC. 313. RESEARCH, DEMONSTRATION, EVALUATION, AND
CAPACITY BUILDING.
(a) IN GENERAL.—From amounts reserved under
section 303(a)(2) for any fiscal year, the Secretary shall
establish and carry out research, demonstration, and ca-
pacity building activities in accordance with this section.
(b) ACTIVITIES.—The Secretary shall carry out the
following activities under this section:
(1) RESEARCH.—The Secretary shall conduct
continuing research, which may include studies and
other methods and techniques, that will aid in the
solution of the employment and training problems of
the United States.
(2) DEMONSTRATIONS.—The Secretary shall
conduct pilot and demonstration projects for the
purpose of developing and improving methods and
techniques for addressing employment and training
needs. The Secretary may award grants and enter
into contracts with entities to carry out such
projects.
(3) EVALUATION.—
(A) ACTIVITIES.—
(i) JOB
TRAINING
ACTIVITIES.—The
Secretary shall provide for the continuing
evaluation of activities conducted under
this Act, including the cost-effectiveness of
113
(iii) the extent to which such pro-
grams enhance the employment and earn-
ings of participants, reduce income support
costs, 
improve 
the 
employment 
com-
petencies of participants in comparison to
comparable persons who did not partici-
pate in such programs, and to the extent
feasible, increase the level of total employ-
ment over the level that would have existed
in the absence of such programs.
(4) NATIONAL
PARTNERSHIP
AND
SPECIAL
TRAINING.—The Secretary may award special grants
to eligible entities to carry out activities that are
most appropriately administered at the national
level. Such activities may include—
(A) partnerships with national organiza-
tions with special expertise in developing, orga-
nizing, and administering employment and
training services at the national, State, and
local levels, such as industry and labor associa-
tions, public interests groups, community-based
organizations representative of groups that en-
counter special difficulties in the labor market,
in education and training; and
(B) activities that—
114
(i) address industrywide skill short-
ages;
(ii) meet training needs that are best
addressed on a multistate basis;
(iii) further the goals of increasing the
competitiveness of the United States labor
force; and
(iv) require technical expertise avail-
able at the national level to serve the needs
of particular client groups that encounter
significant barriers to employment and who
the Secretary determines requires special
assistance.
(5) CAPACITY BUILDING AND TECHNICAL AS-
SISTANCE.—
(A) IN
GENERAL.—The Secretary shall
provide, through grants, contracts, or other ar-
rangements, staff training and technical assist-
ance to States, local workforce development
boards, career centers, communities, business
and labor organizations, service providers, in-
dustry consortia, and other entities, to enhance
their capacity to develop and deliver effective
employment and training services.
115
(B) ACTIVITIES.—The staff training and
technical assistance authorized under subpara-
graph (A) may include—
(i) development of management infor-
mation systems;
(ii) development and maintenance of a
national capacity building, information and
dissemination network; and
(iii) grants for the replication of suc-
cessful employment and training models
and activities.
SEC. 314. WORKFORCE SKILLS AND DEVELOPMENT LOANS.
(a) AUTHORIZATION.—
(1) IN
GENERAL.—From amounts reserved
under section 303(a)(2) for any fiscal year, the Sec-
retary of Labor may use a portion of such amounts
to provide grants to States to provide loans to eligi-
ble entities described in paragraph (2) to assist such
entities in providing skills upgrading for non-mana-
gerial employees.
(2) ELIGIBLE ENTITIES.—An eligible entity de-
scribed in this paragraph is—
(A) an employer;
(B) a representative of employees;
(C) a business association;
116
(D) a trade organization; or
(E) a consortium consisting of—
(i) more than 1 of the entities de-
scribed in subparagraphs (A) through (D);
or
(ii) an institution of higher education
(as such term is defined in section 481 of
the Higher Education Act of 1965 (20
U.S.C. 1088) which continues to meet the
eligibility and certification requirements
under section 498 of such Act) and 1 or
more of the entities described in subpara-
graphs (A) through (D).
(b) APPLICATION.—The Secretary may provide a
grant to a State under subsection (a) only if such State
submits to the Secretary an application which contains
such information as the Secretary may reasonably require.
(c) USE OF AMOUNTS.—A State shall use amounts
received from a grant under subsection (a) to establish
a loan guarantee program to assist eligible entities de-
scribed in paragraph (2) of such subsection to provide
skills upgrading for non-managerial employees. In carry-
ing out such program, the State shall meet the following
requirements:
117
(1) ESTABLISHMENT OF RESERVE FUND FOR
LOAN GUARANTEES.—The State shall establish a re-
serve fund from amounts received from such grant
for the purpose of making commitments to guaran-
tee the payment of principal and interest on loans
made by financial institutions to such eligible enti-
ties to provide skills upgrading for non-managerial
employees.
(2) CRITERIA
FOR
LOAN
GUARANTEES.—The
State, in conjunction with appropriate financial in-
stitutions, shall establish and publish criteria for
providing loan guarantees to eligible entities under
the program, including criteria that provides for the
following:
(A) A loan guarantee may be issued under
the program only if, at the time such guarantee
is issued the eligible entity agrees to pay as an
insurance premium an amount equal to 1 per-
cent of the principal received by such entity
under the loan to the State’s reserve fund.
(B)(i) Subject to clause (ii), the eligible en-
tity will use amounts received from the loan to
provide skills upgrading for mid- and lower-level
employees, which may include—
118
(I) training in total quality manage-
ment, statistical process control, produc-
tion techniques, office automation, mate-
rials resource planning; and
(II) training to improve basic skills,
including reading, writing, and arithmetic.
(ii) In providing such skills upgrading, the
eligible 
entity 
shall 
give 
priority 
to
nonmanagerial employees who—
(I) directly produce or deliver goods
or services; or
(II) are in danger of being terminated
or laid off as a result of modernization in
the workplace, corporate downsizing, for-
eign or domestic competition, or Federal
policies adversely affecting 1 or more in-
dustries.
(C) Amounts from a loan shall not be used
to pay the wages or other benefits of any em-
ployee receiving assistance under the program.
(3) PAYMENT BY STATE TO FINANCIAL INSTI-
TUTIONS IN CASES OF DEFAULT.—
(A) IN GENERAL.—In accordance with cri-
teria developed by the Secretary, the State shall
make payments from the State’s reserve fund to
119
financial institutions that have provided loans
to eligible entities that have defaulted on such
loans for the purpose of reimbursing such insti-
tutions for the amount of principal and interest
remaining unpaid to the institutions by reason
of such default.
(B) NO FULL FAITH AND CREDIT OF THE
UNITED STATES.—Loans provided by financial
institutions to eligible entities under loan guar-
antee programs under this section shall not be
obligations of, or guaranteed in any respect by,
the United States.
(4) LIMITATIONS ON LOAN GUARANTEES.—The
authority of a State to extend loan guarantees under
this section shall not at any time exceed an amount
equal to 1,000 percent of the aggregate principal
amount in the State’s reserve fund.
(5) INTEREST
FROM
AMOUNTS
IN
RESERVE
FUND.—Any interest earned from amounts in the
State’s reserve fund shall be credited to such fund.
(d) FEDERAL AND STATE SHARE.—
(1) FEDERAL
SHARE.—The Federal share
under this section may not exceed 50 percent of the
total cost of the program established under sub-
section (c) for any fiscal year.
120
(2) STATE SHARE.—The State share shall be
provided from non-Federal sources and may be in
cash or in-kind, fairly evaluated.
SEC. 315. EMPLOYMENT, TRAINING, AND EDUCATION AS-
SISTANCE FOR NATIVE AMERICANS.
(a) AUTHORIZATION.—From amounts reserved under
section 303(a)(2) for any fiscal year, the Secretary of
Labor shall provide grants to, or enter into contracts or
cooperative agreements with, Indian tribes and tribal or-
ganizations, tribally-controlled colleges, tribally-controlled
postsecondary vocational institutions, Indian-controlled
organizations serving off-reservation areas, Alaska Native
village and regional entities serving areas as described in
the Alaska Native Claims Settlement Act and Hawaiian
Native-controlled organizations to provide employment,
training, vocational rehabilitation, library services, and
education assistance for Native Americans.
(b) TRANSFER
OF AUTHORITY
FOR VOCATIONAL
EDUCATION ACTIVITIES.—In carrying out subsection (a),
the Secretary of Labor may enter into an agreement with
the Secretary of Education to carry out any portion of
assistance under such subsection devoted to vocational
educational activities, including support for the United
Tribes Technical College and Crowpoint Institute of Tech-
nology.
121
(c) CONSOLIDATION OF FUNDS.—Entities receiving
assistance under subsection (a) may consolidate such as-
sistance with assistance received from related programs in
accordance with the provisions of the Indian Employment,
Training and Related Services Demonstration Act (Public
Law 102–477).
(d) REGULATIONS.—The Secretary shall consult with
Indian, Alaska Native and Hawaiian Native groups in es-
tablishing regulations to carry out this section, including
performance standards for entities receiving assistance
under subsection (a), taking into account the economic cir-
cumstances of such groups.
SEC. 316. EMPLOYMENT, TRAINING, AND EDUCATION AS-
SISTANCE FOR MIGRANT AND SEASONAL
FARMWORKERS.
(a) AUTHORIZATION.—
(1) IN
GENERAL.—From amounts reserved
under section 303(a)(2) for any fiscal year, the Sec-
retary of Labor shall provide grants to, or enter into
contracts or cooperative agreements with, entities
described in paragraph (2) to provide employment,
training, and education assistance for migrant and
seasonal farmworkers.
(2) ENTITIES DESCRIBED.—An entity described
in this paragraph is an entity the Secretary deter-
122
mines to have the capacity to administer effectively
a diversified development program for migrant and
seasonal farmworkers.
(b) USE OF AMOUNTS.—An entity shall use amounts
received under subsection (a) to provide employment,
training, educational development, high school equiva-
lency, postsecondary education assistance, vocational reha-
bilitation, literacy, English as a second language, work-
based education and development, worker safety training,
employability enhancements, emergency or other disaster
relief, technical assistance, outreach, intake, assessment,
follow-up, stipend support, supportive services, other
needs-based assistance, and self-employment and related
business enterprise development education.
(c) TRANSFER OF AUTHORITY FOR EDUCATION AC-
TIVITIES.—In carrying out subsection (b), the Secretary
of Labor may enter into an agreement with the Secretary
of Education to carry out any portion of assistance under
such subsection devoted to education activities.
TITLE IV—ADULT EDUCATION,
FAMILY LITERACY, AND LI-
BRARY 
TECHNOLOGY 
CON-
SOLIDATION GRANT
SEC. 401. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds as follows:
123
(1) According to the 1990 census, 21 percent of
our Nation’s adults (more than 38 million persons)
lack a high school credential or are limited English
proficient.
(2) The National Adult Literacy Survey, con-
ducted under the Adult Education Act, found that
20 percent of all adults in the United States, or
about 40 million people, have minimal levels of lit-
eracy skills and that the lack of such skills is related
to unemployment, low wages, and fewer weeks
worked.
(3) The success of State efforts to reform and
improve public education are dependent on the abil-
ity of the United States to break intergenerational
cycles of illiteracy and inadequate education by en-
suring that parents possess a strong educational
foundation and, as the first and most continuous
teachers of their children, model for, and instill in,
their children a commitment to family literacy and
life-long learning.
(4) Generations of immigrants have contributed
to our communities and our economy, but for them
to continue to do so given recent technologies and
the competitive global economy, they must master
English as rapidly as possible.
124
(5) Studies have found that incarcerated adults
are twice as likely as nonincarcerated adults to lack
a good education and that such lack is a significant
statistical indicator of recidivism.
(6) Certain short-term and long-term goals of
the Nation may not be met unless the United States
improves its current system of adult education and
lifelong learning through Federal leadership.
(b) PURPOSE.—The purposes of this title are as
follows:
(1) To assist States to provide—
(A) to adults, the basic educational skills
necessary for employment and self-sufficiency;
(B) to adults who are parents, the edu-
cational skills necessary to be full partners in
the educational development of their children;
(C) to adults, the basic English language
skills necessary to participate in the civic, so-
cial, and economic life of the United States; and
(D) to adults, the opportunity to attain a
high school degree or its equivalent in order to
permit them to pursue further education and
training or improve their family and work situa-
tions.
125
(2) To provide electronic linkages among librar-
ies and one-stop career center systems.
SEC. 402. DEFINITIONS.
As used in this title:
(1) CORRECTIONAL EDUCATION AGENCY.—The
term ‘‘correctional education agency’’ means an en-
tity that provides programs for criminal offenders in
corrections institutions and for other institutional-
ized individuals which include academic programs
for basic education, special education, bilingual or
English language instruction, vocational training, li-
brary development, corrections education programs,
guidance and counseling, and other supportive serv-
ices for criminal offenders which may emphasize co-
ordination of educational services with educational
institutions, community-based organizations of de-
monstrative effectiveness, and the private sector, de-
signed to provide education and training.
(2) 
EDUCATIONALLY
DISADVANTAGED
ADULT.—The term ‘‘educationally disadvantaged
adult’’ means an adult who—
(A) demonstrates basic skills equivalent to
or below that of students at the fifth grade
level; or
126
(B) has been placed in the lowest or begin-
ning level of an adult education program when
that program does not use grade level equiva-
lencies as a measure of students’ basic skills.
(3) FAMILY
LITERACY
SERVICES.—The term
‘‘family literacy services’’ means services that inte-
grate all of the following activities and are of suffi-
cient intensity in terms of hours, and of sufficient
duration, to make sustainable changes in a family:
(A) Interactive literacy activities between
parents and their children.
(B) Training for parents on how to be
their children’s primary teacher and full part-
ners in the education of their children.
(C) Parent literacy training.
(D) Early childhood education.
(4) LIBRARY.—The term ‘‘library’’ includes—
(A) a public library;
(B) a public elementary or secondary
school library;
(C) an academic library;
(D) a research library; and
(E) a private library, but only if the State
in which such private library is located deter-
127
mines that the library should be considered a li-
brary for purposes of this title.
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Education.
Subtitle A—Funding
SEC. 411. RESERVATIONS FROM AMOUNTS APPROPRIATED.
(a) NATIONAL COMPETITIVE INCENTIVE GRANTS.—
For fiscal year 1998 and any succeeding fiscal year, the
Secretary shall reserve $20,000,000 of the amount appro-
priated under section 4 to provide the grants under section
431.
(b) NATIONAL INSTITUTE FOR LITERACY.—For any
fiscal year, the Secretary shall reserve $4,500,000 of the
amount appropriated under section 4 to carry out the ac-
tivities of the National Institute for Literacy described in
section 432.
(c) NATIONAL LEADERSHIP ACTIVITIES.—For any
fiscal year, the Secretary shall reserve $4,500,000 of the
amount appropriated under section 4 to establish and
carry out the program of national leadership and evalua-
tion activities described in section 433.
SEC. 412. ALLOTMENT.
(a) INITIAL ALLOTMENT.—From the sums available
for the purpose of making grants under subtitle B for any
fiscal year, the Secretary shall allot—
128
(1) $100,000 each to Guam, American Samoa,
the Commonwealth of the Northern Mariana Is-
lands, and the Virgin Islands; and
(2) $250,000 to each of the other States.
(b) ADDITIONAL ALLOTMENT.—
(1) DIVISION
OF
REMAINING
AMOUNTS.—For
any fiscal year, the Secretary shall divide the re-
mainder of the sums available for the purpose of
making grants under subtitle B for the year after
the application of subsection (a) into—
(A) a portion equal to 66 and 2⁄3 percent
of such remainder; and
(B) a portion equal to 33 and 1⁄3 percent
of such remainder.
(2) FORMULAS.—
(A) IN
GENERAL.—The additional allot-
ment to a State for a fiscal year shall equal the
sum of the allotment to the State under sub-
paragraph (B) and the allotment to the State
under subparagraph (C) for the year.
(B) ALLOTMENT
BASED
ON
QUALIFYING
ADULTS.—From the portion referred to in
paragraph (1)(A), the Secretary shall allot to
each State an amount which bears the same
ratio to such portion as the number of qualify-
129
ing adults in the State bears to the number of
such adults in all States.
(C) 
ALLOTMENT
BASED
ON
POPU-
LATION.—From the portion referred to in para-
graph (1)(B), the Secretary shall allot to each
State an amount which bears the same ratio to
such portion as the population of the State
bears to the population of all the States.
(3) QUALIFYING
ADULT.—For purposes of
paragraph (2)(B), the term ‘‘qualifying adult’’
means an adult who—
(A) is at least 16 years of age, but less
than 61 years of age;
(B) is beyond the age of compulsory school
attendance under State law;
(C) does not have a certificate of gradua-
tion from a school providing secondary edu-
cation (or its equivalent); and
(D) is not currently enrolled in elementary
or secondary school.
Subtitle B—Grants to States
SEC. 421. REQUIREMENT TO MAKE GRANTS.
The Secretary shall make a grant for a fiscal year
to a State in an amount equal to the initial and additional
allotments of the State for the year if the State—
130
(1) has satisfied the requirements of title I and
section 423(a)(1);
(2) enters into a written agreement with the
Secretary that the State—
(A) will not expend the grant for any pur-
pose other than in accordance with section 422;
(B) will satisfy the grant requirements in
section 423(a)(2) and 423(b); and
(C) will not expend the grant for the pur-
pose of supporting or providing programs, serv-
ices, or activities for individuals who are not
adults, except if such programs, services, or ac-
tivities are related to family literacy services.
SEC. 422. USES OF FUNDS.
(a) STATE USES OF FUNDS.—
(1) GRANTS TO LOCAL SERVICE PROVIDERS.—
Of the funds paid to a State under this title, at least
55 percent shall be distributed as grants made by
the State on a competitive basis, and consistent with
subsection (b) and section 423(b)(2), to local service
providers to establish, conduct, or expand programs,
services, or activities to achieve the purposes of this
title. Such local service providers may include the
following:
(A) Local educational agencies.
131
(B) Correctional educational agencies.
(C) Community-based organizations.
(D) Public or private nonprofit agencies.
(E) Institutions of higher education.
(F) Libraries.
(G) Other institutions that the State deter-
mines to have the ability to provide literacy
services to adults and families.
(2) LIBRARY TECHNOLOGY.—Of the funds paid
to a State under this title, the State shall provide 30
percent to the State library administrative agency
for the State. Such agency shall expend such funds
for one or more of the following purposes:
(A) Electronically connecting libraries with
one-stop career center systems designated or es-
tablished under section 108 and local service
providers receiving grants under paragraph (1).
(B) Establishing or enhancing linkages
among libraries.
(C) Assisting libraries in accessing infor-
mation through electronic networks.
(D) Encouraging libraries in different Fed-
eral, State, and local jurisdictions, and different
types of libraries, to establish consortia and
share resources.
132
(E) Paying costs for libraries to acquire or
share computer systems and telecommuni-
cations technologies.
(3) OTHER STATE ACTIVITIES.—A State may
use not more than 10 percent of the funds paid to
the State under this title for one or more of the fol-
lowing purposes:
(A) The establishment or operation of pro-
fessional development programs to improve the
quality of instruction provided in local adult
education and literacy programs, including in-
struction provided by volunteers.
(B) The provision of technology assistance
to local service providers to enable them to im-
prove the quality of their programs, services,
and activities that achieve the purposes of this
title, including—
(i) providing hardware and software;
(ii) paying for service connection fees
associated with gaining access to comput-
erized databases; and
(iii) upgrading the technological capa-
bilities of local service providers to improve
the quality of their services and to assist
them in providing services on a flexible
133
schedule that meets the needs of diverse
populations.
(C) The support of State or regional net-
works of literacy resource centers that—
(i) enhance the coordination of lit-
eracy services across public and private
programs and State agencies;
(ii) enhance the capacity of the State
and local service providers to provide lit-
eracy services through the diffusion and
adoption of state-of-the-art teaching meth-
ods and technologies;
(iii) provide linkages between the Na-
tional Institute for Literacy established
under section 432 and local service provid-
ers for the sharing of literacy information,
research, and resources;
(iv) encourage government and indus-
try partnerships; and
(v) provide training and technical as-
sistance to literacy instructors in reading
instruction, the use of state-of-the-art
methodologies, instructional materials, and
technologies, and professional development.
134
(D) Monitoring and evaluating the quality
of, and the improvement in, services and activi-
ties conducted with Federal financial assistance
under this title, including carrying out section
423(a)(2).
(E) Carrying out other activities of state-
wide significance that promote the purposes of
this Act.
(4) ADMINISTRATIVE EXPENSES.—In any fiscal
year, a State may use not more than 5 percent of
the funds paid to the State under this title or
$50,000, whichever is greater, for—
(A) planning, administration, technical as-
sistance to local service providers, and inter-
agency coordination, associated with a grant
under this title; and
(B) support for one-stop career center sys-
tems described in section 108.
(b) LOCAL USES OF FUNDS.—A State shall require
that a local service provider that receives a grant from
the State under subsection (a)(1) use the grant to estab-
lish or operate one or more programs that provide instruc-
tion or services within one or more of the following cat-
egories:
135
(1) Adult basic education that is designed for
an adult who—
(A) has minimal competence in reading,
writing, or computation;
(B) is not sufficiently competent in read-
ing, writing, or computation to meet the re-
quirements of adult life in the United States; or
(C) is not sufficiently competent in speak-
ing, reading, or writing the English language to
obtain employment commensurate with the
adult’s intellectual abilities.
(2) Adult secondary education that is designed
for an adult who is literate and can function in ev-
eryday life, but who—
(A) has not acquired basic educational
skills, including reading, writing, and computa-
tion; or
(B) does not have a certificate of gradua-
tion from a school providing education to stu-
dents in grade 12, or its equivalent.
(3) English literacy instruction that is designed
for an adult—
(A) who—
(i) has limited ability in speaking,
reading, writing, or understanding the
136
English language and whose native lan-
guage is a language other than English; or
(ii) lives in a family or community en-
vironment where a language other than
English is the dominant language; and
(B) who, by reason of a condition de-
scribed in subparagraph (A), has sufficient dif-
ficulty reading, writing, or understanding the
English language the adult is unable—
(i) to learn successfully in a classroom
where the language of instruction is Eng-
lish; or
(ii) to participate fully in the society
of the United States.
(4) Family literacy services.
SEC. 423. ADDITIONAL GRANT REQUIREMENTS.
(a) GOALS, PROGRESS INDICATORS, PERFORMANCE
MEASURES.—
(1) PLANNING REQUIREMENTS.—A State that
desires to receive a grant under this title shall ac-
complish the following:
(A) Establish, through the collaborative
process described in section 103, measurable
goals for improving literacy levels, retention in
138
receives a grant under section 422(a)(1), annu-
ally assess the degree to which the provider is
meeting or exceeding the progress indicators
applicable to the provider.
(C) Annually report to the Secretary on
the performance measures described in section
424 for each category described in such section.
(b) OTHER REQUIREMENTS.—A State that receives
a grant under this title shall ensure the following:
(1) 
EXPENDITURES
OF
NON-FEDERAL
FUNDS.—For any fiscal year for which a grant is
made to the State under this title, the State shall
expend, on programs and activities relating to adult
education and family literacy services, an amount,
derived from sources other than the Federal Govern-
ment, equal to 25 percent of the State’s initial and
additional allotments for the year.
(2) PRIORITY
FOR
PLANNING
WITH
BOARDS
AND SYSTEMS.—In awarding grants to local service
providers under section 422(a)(1), the State shall
give priority to providers that demonstrate joint
planning with local workforce development boards
and one-stop career center systems.
(3) EQUITABLE
ACCESS.—Local educational
agencies, public or private nonprofit agencies, com-
139
munity-based organizations, correctional education
agencies, institutions of higher education, libraries,
and institutions which serve educationally disadvan-
taged adults shall be provided equitable access to
Federal funds provided under this title in accordance
with this title.
(4) PAYMENTS BY ONE-STOPS TO LOCAL SERV-
ICE PROVIDERS.—A one-stop career center system
that refers an individual to a local service provider
that—
(A) is receiving a grant from the State
under section 422(a)(1) shall pay to such pro-
vider, in accordance with the biennial strategic
plan of the local workforce development board
pursuant to which such center is established or
designated, an amount appropriate to pay for
the services required by the individual with re-
spect to which the reference is made; or
(B) is not receiving such a grant but is
providing adult education or literacy services
shall pay to such provider, in accordance with
such plan, such amount if the State has cer-
tified that such provider is eligible to receive
such funds.
140
SEC. 424. PERFORMANCE MEASURES.
A State that receives a grant under this title for a
fiscal year shall measure the performance in the following
categories for such year of the programs, services, and ac-
tivities carried out by each local service provider receiving
a grant under section 422(a)(1):
(1) The percentage of adults served who, based
on skills or abilities acquired through such a pro-
gram, service, or activity—
(A) read to their children;
(B) provide support to their children in the
completion of homework assignments;
(C) participate on an ongoing basis in ac-
tivities that support their childrens’ schools;
(D) enrolled in institutions of higher edu-
cation or occupational training;
(E) obtained a job;
(F) advanced in their job; or
(G) performed new job requirements essen-
tial to retaining their job.
(2) The percentage of adults served who, based
on skills or abilities acquired through such a pro-
gram, service, or activity—
(A) obtained a high school diploma;
(B) obtained a high school equivalency di-
ploma; or
141
(C) increased their literacy skills in a man-
ner that enabled them to operate more effec-
tively in their home and community.
(3) The percentage of adults served who, based
on skills or abilities acquired through such a pro-
gram, service, or activity—
(A) register to vote;
(B) obtain United States citizenship; or
(C) seek preventive health services.
(4) The percentage of incarcerated adults
served who, based on skills or abilities acquired
through such a program, service, or activity, upon
the termination of the period of their incarcer-
ation—
(A) enrolled in job training or education
programs;
(B) obtained employment; or
(C) returned to society prepared to func-
tion independently.
Subtitle C—National Programs
SEC. 431. NATIONAL COMPETITIVE INCENTIVE GRANTS.
(a) AUTHORITY TO SELECT ELIGIBLE STATES.—
(1) STATE PLAN.—A State that desires to re-
ceive an incentive grant under this section shall sub-
mit to the Secretary, by a date specified by the Sec-
142
retary, a plan, to be implemented in the fiscal year
preceding any fiscal year for which the State desires
the grant, that describes—
(A) a methodology by which the State edu-
cational agency for the State will collaborate
with other State agencies to provide to the tar-
get populations described in subsection (c) serv-
ices to raise their level of education and im-
prove their employment skills; and
(B) goals and performance measures that
permit the success of such methodology and
services to be measured objectively.
(2) SELECTION
OF
STATES.—Based on the
quality of the plans submitted under paragraph (1)
for a fiscal year, the Secretary shall designate not
more than 10 States as meeting the preliminary cri-
terion for receipt of an incentive grant under this
section for such year.
(3) PLAN
IMPLEMENTATION.—A State des-
ignated under paragraph (2) that desires to receive
an incentive grant shall implement the plan submit-
ted under paragraph (1).
(4) EVALUATION
OF
SUCCESS.—Not earlier
than the termination of the 1-year period beginning
on the date a State is designated under paragraph
143
(2), the Secretary shall determine whether the State
is successfully implementing the plan submitted by
the State under paragraph (1) and achieving the
goals set forth in the plan.
(b) REQUIREMENT TO MAKE GRANTS.—
(1) IN
GENERAL.—Beginning in fiscal year
1998 and thereafter, the Secretary shall make an in-
centive grant for a fiscal year to each State that the
Secretary determines, under subsection (a)(4), is
successfully implementing the plan submitted by the
State under subsection (a)(1) and achieving the
goals set forth in the plan.
(2) AMOUNT OF GRANT.—A grant to a State
for a fiscal year under paragraph (1) shall be in an
amount equal to the allotment of the State for the
year under paragraph (3).
(3) ALLOTMENT.—
(A) IN GENERAL.—From the sums avail-
able for a fiscal year for the purpose of making
grants under this section, the Secretary shall
allot to each State described in paragraph (1)
an amount determined through the application
of the formula described in subparagraph (B).
(B) FORMULA.—The Secretary shall de-
velop a formula for determining an appropriate
144
allotment to a State under this subsection.
Such formula shall be based on the population
of the State and the success of the State in
achieving the goals set forth in the plan submit-
ted by the State under subsection (a)(1).
(c) TARGET POPULATIONS.—The target populations
referred to in subsection (a) are the following:
(1) Parents who are educationally disadvan-
taged adults and who have a child who is less than
8 years of age.
(2) Families on public assistance (as deter-
mined by the State submitting the plan under sub-
section (a)(1)).
(3) Adults with more than one barrier to self-
sufficiency such as being unemployed or an educa-
tionally disadvantaged adult.
SEC. 432. NATIONAL INSTITUTE FOR LITERACY.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—There shall be established a
National Institute for Literacy (in this section re-
ferred to as the ‘‘Institute’’). The Institute shall be
administered under the terms of an interagency
agreement entered into by the Secretary of Edu-
cation with the Secretary of Labor and the Secretary
of Health and Human Services (in this section re-
145
ferred to as the ‘‘Interagency Group’’). The Sec-
retary may include in the Institute any research and
development center, institute, or clearinghouse estab-
lished within the Department of Education whose
purpose is determined by the Secretary to be related
to the purpose of the Institute.
(2) BOARD
RECOMMENDATIONS.—The Inter-
agency Group shall consider the recommendations of
the National Institute for Literacy Advisory Board
(in this section referred to as the ‘‘Board’’) estab-
lished under subsection (d) in planning the goals of
the Institute and in the implementation of any pro-
grams to achieve such goals.
(3) DAILY OPERATIONS.—The daily operations
of the Institute shall be carried out by the Director
of the Institute appointed under subsection (g).
(b) DUTIES.—
(1) IN GENERAL.—The Institute shall—
(A) provide national leadership for the im-
provement and expansion of the system for de-
livery of literacy services;
(B) coordinate the delivery of such serv-
ices;
(C) support the creation of new methods of
offering improved services; and
146
(D) serve as a national resource for adult
education and family literacy services by provid-
ing to the public the best and most current in-
formation available on the subjects.
(2) AUTHORIZED
ACTIVITIES.—In order to
carry out the duties described in paragraph (1), the
Institute may—
(A) establish a national electronic database
of information that includes—
(i) information on—
(I) effective practices in the pro-
vision of literacy and basic skills in-
struction;
(II) public and private literacy
and basic skills programs and Fed-
eral, State, and local policies affecting
the provision of literacy services at the
national, State, and local levels; and
(III) technical assistance, meet-
ings, conferences, and other opportu-
nities that lead to the improvement of
literacy and basic skills services; and
(ii) a communication network for lit-
eracy programs, providers, and students;
147
(B) coordinate support for the provision of
literacy and basic skills services across Federal
agencies and at the State and local level;
(C) coordinate the support of research and
development on literacy and basic skills in fami-
lies and adults across Federal agencies and
carry out basic and applied research and devel-
opment on topics that are not being inves-
tigated by other organizations or agencies.
(D) collect and disseminate information on
methods of advancing literacy that show prom-
ise of success.
(E) work with the National Education
Goals Panel established under Goals 2000:
Educate America Act to assist local, State, and
national organizations and agencies in making
and measuring progress toward the National
Education Goals established under such Act;
and
(F) assist in the development of policy with
respect to literacy and basic skills.
(3) GRANTS, CONTRACTS, AND AGREEMENTS.—
The Institute may enter into contracts or coopera-
tive agreements with, or make grants to, individuals,
public or private institutions, agencies, organiza-
148
tions, or consortia of such institutions, agencies, or
organizations to carry out the activities of the Insti-
tute. Such grants, contracts, or agreements shall be
subject to the laws and regulations that generally
apply to grants, contracts, or agreements entered
into by Federal agencies.
(c) LITERACY LEADERSHIP.—
(1) FELLOWSHIPS.—The Institute, in consulta-
tion with the Board, may award fellowships, with
such stipends and allowances as the Director consid-
ers necessary, to outstanding individuals pursuing
careers in adult education or literacy in the areas of
instruction, management, research, or innovation.
(2) 
USE
OF
FELLOWSHIPS.—Fellowships
awarded under this subsection shall be used, under
the auspices of the Institute, to engage in research,
education, training, technical assistance, or other ac-
tivities to advance the field of adult education or lit-
eracy, including the training of volunteer literacy
providers at the national, State, or local level.
(3) INTERNS
AND
VOLUNTEERS.—The Insti-
tute, in consultation with the Board, may award
paid and unpaid internships to individuals seeking to
assist the Institute in carrying out its mission. Not-
withstanding section 1342 of title 31, United States
149
Code, the Institute may accept and use voluntary
and uncompensated services as the Institute deter-
mines necessary.
(d) NATIONAL INSTITUTE FOR LITERACY ADVISORY
BOARD.—
(1) ESTABLISHMENT.—
(A) IN GENERAL.—There shall be a Na-
tional Institute for Literacy Advisory Board.
The Board shall consist of 10 individuals ap-
pointed by the President with the advice and
consent of the Senate from individuals who—
(i) are not otherwise officers or em-
ployees of the Federal Government; and
(ii) are representative of entities or
groups described in subparagraph (B).
(B) ENTITIES OR GROUPS DESCRIBED.—
The entities or groups referred to in subpara-
graph (A) are—
(i) literacy organizations and provid-
ers of literacy services, including—
(I) nonprofit providers of literacy
services;
(II) providers of programs and
services involving English language in-
struction; and
151
(B) VACANCY APPOINTMENTS.—Any mem-
ber appointed to fill a vacancy occurring before
the expiration of the term for which the mem-
ber’s predecessor was appointed shall be ap-
pointed only for the remainder of that term. A
member may serve after the expiration of that
members’ term until a successor has taken of-
fice. A vacancy in the Board shall be filled in
the manner in which the original appointment
was made. A vacancy in the Board shall not af-
fect the powers of the Board.
(4) QUORUM.—A majority of the members of
the Board shall constitute a quorum but a lesser
number may hold hearings. Any recommendation
may be passed only by a majority of its members
present.
(5) CHAIRPERSON AND VICE CHAIRPERSON.—
The chairperson and vice chairperson of the Board
shall be elected by the members. The term of office
of the chairperson and vice chairperson shall be 1
year.
(6) MEETINGS.—The Board shall meet at the
call of the chairperson or a majority of its members.
152
(e) GIFTS, BEQUESTS, AND DEVISES.—The Institute
may accept, administer, and use gifts or donations of serv-
ices, money, or property, both real and personal.
(f) MAILS.—The Board and the Institute may use the
United States mails in the same manner and under the
same conditions as other departments and agencies of the
United States.
(g) STAFF.—The Interagency Group, after consider-
ing recommendations made by the Board, shall appoint
and fix the pay of a Director.
(h) APPLICABILITY
OF CERTAIN CIVIL SERVICE
LAWS.—The Director and staff of the Institute may be
appointed without regard to the provisions of title 5,
United States Code, governing appointments in the com-
petitive service, and may be paid without regard to the
provisions of chapter 51 and subchapter III of chapter 53
of that title relating to classification and General Schedule
pay rates, except that an individual so appointed may not
receive pay in excess of the maximum rate payable under
section 5376 of title 5, United States Code.
(i) EXPERTS AND CONSULTANTS.—The Board and
the Institute may procure temporary and intermittent
services under section 3109(b) of title 5, United States
Code.
153
(j) REPORT.—The Institute shall submit a biennial
report to the Interagency Group and the Congress.
SEC. 433. NATIONAL LEADERSHIP ACTIVITIES.
(a) IN GENERAL.—The Secretary may establish and
carry out a program of national leadership and evaluation
activities to enhance the quality of adult education and
family literacy programs nationwide. Such activities may
include the following:
(1) Research and development.
(2) Demonstration of model and innovative pro-
grams.
(3) Evaluations, including independent evalua-
tions of adult education and family literacy pro-
grams carried out with financial assistance received
pursuant to this title.
(4) Data collection.
(5) Professional development.
(6) Technical assistance to States and local
service providers receiving Federal financial assist-
ance pursuant to this title.
(7) Other activities to enhance the quality of
adult education and family literacy programs nation-
wide.
(b) 
GRANTS, 
CONTRACTS, 
AND
COOPERATIVE
AGREEMENTS.—The Secretary may carry out the activi-
154
ties described in subsection (a) directly or through grants,
contracts, and cooperative agreements.
TITLE V—AMENDMENTS TO
REHABILITATION ACT OF 1973
Subtitle A—Vocational
Rehabilitation Consolidation Grant
CHAPTER 1—TRANSITION PERIOD
SEC. 501. TRANSITION.
With respect to the amendment made by section
511(4) to title I of the Rehabilitation Act of 1973, the
Secretary of Education, acting through the Commissioner
of the Rehabilitation Services Administration, shall admin-
ister the amendment in accordance with the following:
(1) During fiscal year 1996, the Secretary shall
develop administrative policies for implementing the
amendment.
(2) During the fiscal years 1997 and 1998, the
Secretary shall begin implementing the amendment
in accordance with paragraph (4).
(3) The Secretary shall ensure that, by the first
day of fiscal year 1999, the amendment is fully im-
plemented.
(4) For purposes of paragraph (2), the Sec-
retary shall ensure that, before the first day of fiscal
year 1999, the following requirements (administered
155
as conditions on the receipt of grants under such
title) have been met:
(A) The States have complied with section
103(b)(4) of such title (as amended by section
511) regarding the participation of certain pro-
viders.
(B) The States have established policies
and made arrangements for the operation of the
system of vouchers described in section 103(c)
of such title, including with respect to the reim-
bursement of providers.
(C) The States have established policies
and 
made 
arrangements 
under 
section
103(b)(11) of such title regarding the training
of the management and staff of one-stop career
centers with respect to individuals with disabil-
ities.
(D) The States have established policies
and made arrangements under section 104 of
such title regarding the establishment of such
centers, including providing for the significant
participation of community-based providers in
the program carried out by the State pursuant
to such title.
156
(E) Such other requirements under the
amendment as the Secretary determines to be
appropriate.
(5)(A) Notwithstanding the amendment, during
the fiscal years 1996 through 1998, the provisions
of title I of the Rehabilitation Act of 1973 that were
in effect on the day before the date of the enactment
of this Act continue to be in effect, subject to para-
graphs (1) through (4). In implementing the amend-
ment, the Secretary shall seek to avoid unnecessarily
disrupting the provision of services under such title
to individuals who, as of the date of the enactment
of this Act, were receiving services pursuant to an
individualized plan under such title.
(B) On and after the first day of fiscal year
1999, the provisions referred to in the first sentence
of subparagraph (A) do not have any legal effect.
CHAPTER 2—REVISION OF TITLE I OF
REHABILITATION ACT OF 1973
SEC. 511. COMPREHENSIVE REVISION.
Effective October 1, 1995, the Rehabilitation Act of
1973 (29 U.S.C. 701 et seq.) is amended—
(1) by transferring section 112 from the cur-
rent placement of the section;
157
(2) by redesignating such section as section
510;
(3) by adding such section at the end of title
V; and
(4) by amending title I to read as follows:
‘‘TITLE I—VOCATIONAL
REHABILITATION SERVICES
‘‘SEC. 100. PURPOSE.
‘‘The purpose of this title is to assist States in mak-
ing available to individuals with disabilities a program of
employment, training, and rehabilitation services that
maximizes an individual’s control over their vocational and
career choices, and is in accordance with the goal of assur-
ing equality of opportunity, full participation, independent
living, and economic self-sufficiency for such individuals.
‘‘SEC. 101. FORMULA GRANTS.
‘‘(a) IN GENERAL.—
‘‘(1) FORMULA GRANTS.—In the case of each
State that submits to the Secretary a workforce de-
velopment and literacy plan for fiscal year 1999 or
any subsequent fiscal year that meets the require-
ment of section 103 of the Consolidated and Re-
formed Education, Employment, and Rehabilitation
Systems Act, the Secretary shall make a grant for
the year to the State as the Federal share of carry-
158
ing out the purposes specified in this title. The grant
shall consist of the allotment determined for the
State under section 107.
‘‘(2) CONDITIONS FOR GRANT.—A State may
receive a grant under paragraph (1) for a fiscal year
only if the State meets the conditions described in
this title for the State for the fiscal year.
‘‘(b) ADMINISTRATOR OF FEDERAL PROGRAM.—The
Secretary shall carry out this title acting through the
Commissioner of the Rehabilitation Services Administra-
tion, except as indicated otherwise.
‘‘(c) RULE OF CONSTRUCTION.—The purpose speci-
fied in section 100 shall be carried out only in accordance
with the other provisions of this title.
‘‘(d) FUNDING.—
‘‘(1) AUTHORIZATION
OF
APPROPRIATIONS.—
For the purpose of carrying out this title, there are
authorized to be appropriated such sums as may be
necessary for each of the fiscal years 1999 through
2002, except that the amount to be appropriated for
a fiscal year shall not be less than the amount of the
appropriation under this subsection for the imme-
diately preceding fiscal year, plus the amount of the
Consumer Price Index addition determined under
159
paragraph (2) for the immediately preceding fiscal
year.
‘‘(2) ADJUSTMENTS PURSUANT TO CONSUMER
PRICE INDEX.—
‘‘(A) Not later than November 15 of each
fiscal year, the Secretary of Labor shall publish
in the Federal Register the percentage change
in the Consumer Price Index published for Oc-
tober of the preceding fiscal year and October
of the fiscal year in which such publication is
made.
‘‘(B) If in any fiscal year the percentage
change published under subparagraph (A) indi-
cates an increase in the Consumer Price Index,
then the amount to be appropriated under para-
graph (1) for the subsequent fiscal year shall be
at least the amount appropriated for the fiscal
year in which the publication is made under
subparagraph (A) increased by such percentage
change.
‘‘(C) If in any fiscal year the percentage
change published under subparagraph (A) does
not indicate an increase in the Consumer Price
Index, then the amount to be appropriated
under paragraph (1) for the subsequent fiscal
160
year shall be at least the amount appropriated
for the fiscal year in which the publication is
made under subparagraph (A).
‘‘(D) For purposes of this paragraph, the
term ‘Consumer Price Index’ means the
Consumer Price Index for All Urban Consum-
ers, published monthly by the Bureau of Labor
Statistics.
‘‘(3) AUTOMATIC
EXTENSION
OF
AUTHORIZA-
TION.—
‘‘(A) Unless, in the regular session that
ends prior to the beginning of the last fiscal
year for which an authorization of appropria-
tions is provided in paragraph (1), legislation
has been enacted that has the effect of extend-
ing such authorization, such authorization is
automatically extended for one additional year.
‘‘(B) The amount authorized to be appro-
priated for the additional fiscal year described
in subparagraph (A) shall be an amount equal
to the amount appropriated for such program
for fiscal year 2002, plus the amount of the
Consumer Price Index addition determined
under paragraph (2) for the immediately pre-
ceding fiscal year.
161
‘‘(C) In any case where the Commissioner
is required under an applicable statute to carry
out certain acts or make certain determinations
that are necessary for the continuation of the
program authorized by this title, and such acts
or determinations are required during the last
fiscal year for which an authorization of appro-
priations is provided in paragraph (1), such
acts and determinations shall be required dur-
ing any fiscal year for which subparagraph (A)
is in operation.
‘‘SEC. 102. ALLOCATION WITHIN STATE OF ADMINISTRA-
TIVE RESPONSIBILITIES.
‘‘(a) IN GENERAL.—For purposes of section 101(a),
a State, subject to subsection (b)—
‘‘(1) will reserve not more than 10 percent of
the grant under such section for the fiscal year in-
volved for carrying out the responsibilities of a State
administrative agent under section 103; and
‘‘(2) will reserve not less than 90 percent of the
grant for carrying out the responsibilities under sec-
tion 104 of local workforce development boards and
one-stop career centers with respect to workforce de-
velopment areas.
162
‘‘(b) WAIVER.—With respect to the expenditure by
a State of a grant under section 101(a) for a fiscal year,
the Secretary may provide to the State a waiver under
which the State is authorized to reduce the reservation
of funds under subsection (a)(2) by 10 percent and expend
the resulting funds for the administration, by the State
administrative agent, of responsibilities that otherwise
would be carried out under section 104 by local workforce
development boards or one-stop career centers. The Sec-
retary may provide such a waiver only if the Secretary
determines that the waiver is justified for reasons regard-
ing the efficient and equitable provision in the State of
services under this title.
‘‘(c) CERTAIN DEFINITIONS.—For purposes of this
Act, the terms ‘State administrative agent’, ‘local
workforce development area’, ‘local workforce development
board’, and ‘one-stop career center’ have the meanings
given such terms in sections 105 through 108, respec-
tively, of the Consolidated and Reformed Education, Em-
ployment, and Rehabilitation Systems Act.
‘‘SEC. 103. RESPONSIBILITIES OF STATE ADMINISTRATIVE
AGENT.
‘‘(a) STATE ADMINISTRATIVE AGENT.—In carrying
out the requirement of section 105 of the Consolidated
and Reformed Education, Employment, and Rehabilita-
163
tion Systems Act that a Governor must designate a State
administrative agent to carry out this title, a Governor
may designate—
‘‘(1) one State administrative agent to be re-
sponsible for carrying out this title for individuals
who are blind; and
‘‘(2) a different State administrative agent to
carry out the remaining responsibilities in this title.
‘‘(b) RESPONSIBILITIES.—For purposes of section
101(a) and the operation in a State of the program under
this title:
‘‘(1) This subsection, and subsection (d) (as ap-
plicable), will be carried out by State administrative
agents designated by the Governor in accordance
with subsection (a), through the collaborative proc-
ess established under section 103 of the Consoli-
dated and Reformed Education, Employment, and
Rehabilitation Systems Act.
‘‘(2)(A) The State will provide to the public an
explanation of the methods by which the State will
provide vocational rehabilitation services to all eligi-
ble individuals (as defined in section 105(d)) in the
State.
‘‘(B) In the event that such services cannot be
provided to all eligible individuals who apply for the
164
services, the State will show and provide the jus-
tification for the order to be followed in selecting in-
dividuals to whom the services will be provided.
‘‘(C) The order of selection under subparagraph
(B) will be determined on the basis of serving first
those individuals with the most severe disabilities, in
accordance with criteria established by the State.
‘‘(3) The State will establish guidelines provid-
ing that, in the case of an individual to whom the
State will provide a service (in accordance with the
order of selection under paragraph (2) and the as-
sessment of needs under section 105(b)(2)(A)), the
individual will have the option of receiving the serv-
ice from a provider designated by the center or from
a provider selected by the individual pursuant to
vouchers under subsection (c).
‘‘(4) Pursuant to section 109 of the Consoli-
dated and Reformed Education, Employment, and
Rehabilitation Systems Act, the State will make sig-
nificant efforts to encourage the participation in the
State program of community-based private provid-
ers, with special consideration given to providers
who have been recipients of funds under this Act re-
garding projects with industry or supported employ-
ment services.
165
‘‘(5) The State will establish provisions to gov-
ern determinations under section 105 (relating to
the eligibility of individuals).
‘‘(6) The State will establish provisions to gov-
ern assessments under section 104(b)(1) (relating to
the need of individuals for services).
‘‘(7) The State will ensure that vocational reha-
bilitation services under this title are provided by
personnel who are qualified to provide the services
involved.
‘‘(8) The State will establish plans, policies, and
procedures to be followed in carrying out the pro-
gram under this title in the State (including enter-
ing into a formal interagency cooperative agreement
with education officials responsible for the provision
of a free appropriate public education to students
who are individuals with disabilities). The State will
ensure that such plans, policies, and procedures are
designed in accordance with the following:
‘‘(A)(i) To facilitate the development and
accomplishment of the goals and objectives de-
scribed in clause (ii) (including the specification
of plans for coordination with the educational
agencies in the provision of transition services),
to the extent that the goals and objectives are
166
included in an individualized education program
of a student.
‘‘(ii) The goals and objectives referred to
in clause (i) are long-term rehabilitation goals;
intermediate rehabilitation objectives; and goals
and objectives related to enabling a student to
live independently before the student leaves a
school setting.
‘‘(B) To facilitate the transition from the
provision of a free appropriate public education
under the responsibility of an educational agen-
cy to the provision of vocational rehabilitation
services under this title, including the specifica-
tion of plans for coordination with educational
agencies in the provision of transition services
to an individual.
‘‘(C) To provide for—
‘‘(i) provisions for determining State
lead agencies and qualified personnel re-
sponsible for transition services;
‘‘(ii) procedures for outreach to and
identification of youth in need of such
services; and
167
‘‘(iii) a timeframe for evaluation and
followup of youth who have received such
services.
‘‘(9) The State will provide for coordination and
working relationships with the Statewide Independ-
ent Living Council established under section 705
and independent living centers within the State.
‘‘(10) The State will provide for interagency co-
operation with, and the utilization of the services
and facilities of, the State agencies administering
the State’s public assistance programs, and other
programs for individuals with disabilities.
‘‘(11) With respect to the one-stop career cen-
ters operated pursuant to section 104, the State will
provide for the appropriate training of the manage-
ment and staff of the centers regarding the effective
provision of services to individuals with disabilities.
‘‘(c) AVAILABILITY OF VOUCHER SYSTEM REGARD-
ING SERVICES.—For purposes of section 101(a) and the
operation in a State of the program under this title:
‘‘(1) The State will provide for the establish-
ment of a system to carry out this subsection.
‘‘(2) In the case of an eligible individual who
(in accordance with the order of selection under sub-
section (b)(2) and the assessment of needs under
168
section 105(b)(2)(A)) will receive vocational rehabili-
tation services under this title, the one-stop career
center involved will, upon request of the individual,
provide to the individual vouchers in accordance with
this subsection.
‘‘(3) Vouchers under this subsection will enable
such individual to obtain the vocational rehabilita-
tion services involved from providers selected by the
individual from among a list of providers approved
by the State for such purpose in accordance with
section 109 of the Consolidated and Reformed Edu-
cation, Employment, and Rehabilitation Systems
Act.
‘‘(4) The State will ensure that the monetary
value of a voucher provided to the individual for a
particular type of service is calculated at a fair mar-
ket value.
‘‘(5) To the extent practicable, the list of pro-
viders under paragraph (3) will provide for the avail-
ability within each local workforce development area
of a broad range of services.
‘‘(d) STATE OPTIONS.—With respect to compliance
with this section, a State may, in the discretion of the
State, expend a grant under section 101 for the following:
169
‘‘(1) To provide technical assistance to local
boards, one-stop career centers, and providers relat-
ing to the provision of vocational rehabilitation serv-
ices under this title.
‘‘(2) To disseminate findings from research re-
garding vocational rehabilitation services, after con-
sideration of requests from local workforce develop-
ment boards and one-stop career centers regarding
the types of information needed by such boards and
centers.
‘‘(3) To conduct demonstration projects regard-
ing improvements with respect to vocational rehabili-
tation services, subject to providing the results of
such projects to the Commissioner and as appro-
priate disseminating the results within the State.
‘‘SEC. 104. RESPONSIBILITIES FOR LOCAL BOARDS AND
SERVICE CENTERS.
‘‘(a) PROVISION OF VOCATIONAL REHABILITATION
SERVICES.—For purposes of section 101(a) and the oper-
ation in a State of the program under this title:
‘‘(1) This section will be carried out by the one-
stop career centers in the State, with each such cen-
ter acting under the guidance of the local workforce
development board for the local workforce area with-
in which the center operates.
170
‘‘(2) In accordance with the order of selection
under section 103(b)(2), a one-stop career center
will, in expending amounts provided to the center
from a grant under section 101—
‘‘(A) make determinations under section
105 of the eligibility of individuals for voca-
tional rehabilitation services; and
‘‘(B) provide for such goods or services for
eligible individuals as are—
‘‘(i) necessary to render the individ-
uals employable and achieve an employ-
ment outcome; and
‘‘(ii) provided in response to needs
that arise, to a significant extent, from the
disability involved and do not duplicate, to
any significant extent, the core services
available under title I of the Consolidated
and Reformed Education, Employment,
and Rehabilitation Systems Act.
‘‘(b) CERTAIN SERVICES.—With respect to compli-
ance with this section, vocational rehabilitation services
under this title (as defined in subsection (f)) may include
the following:
‘‘(1) An assessment of the needs of eligible indi-
viduals for such services.
171
‘‘(2) Counseling, guidance, and work-related
placement services for individuals with disabilities,
including job search assistance, placement assist-
ance, job retention services, personal assistance serv-
ices, 
and 
followup, 
follow-along, 
and 
specific
postemployment services necessary to assist such in-
dividuals to maintain, regain, or advance in employ-
ment.
‘‘(3) Vocational and other training services for
individuals with disabilities, including personal and
vocational adjustment, books, or other training ma-
terials, and such services to the families of such in-
dividuals as are necessary to the adjustment or reha-
bilitation of such individuals.
‘‘(4) Development of written plans for the pro-
vision of services.
‘‘(5) Rehabilitation technology services.
‘‘(6) Supported employment services.
‘‘(7) Physical and mental restoration services.
‘‘(8) Interpreter services for individuals who are
deaf, and reader services for individuals who are
blind.
‘‘(9) Rehabilitation teaching services and ori-
entation and mobility services for individuals who
are blind.
173
‘‘(d) PERFORMANCE PAYMENTS REGARDING VOUCH-
ERS.—For purposes of section 101(a), the local board will
ensure that, in providing for the payment of services pro-
vided pursuant to vouchers, a provider does not receive
full payment until the delivery of the services involved is
completed in reasonable accordance with the outcome des-
ignated for the service pursuant to a prior understanding
with the provider.
‘‘(e) PAYOR OF LAST RESORT REGARDING MEDICAL
SERVICES
AND EDUCATIONAL ASSISTANCE.—For pur-
poses of section 101(a), a State will not expend a grant
under section 101 to pay for training services in institu-
tions of higher education, or to pay for medical services,
unless maximum efforts have been made to secure pay-
ments, in whole or in part, from other sources.
‘‘(f) DEFINITION.—For purposes of this title, the
term ‘vocational rehabilitation services’ means goods and
services described in subsection (a)(2)(B).
‘‘SEC. 105. ELIGIBLE INDIVIDUAL.
‘‘(a) IN GENERAL.—For purposes of section 101:
‘‘(1) An individual will not receive vocational re-
habilitation services under this title unless the indi-
vidual—
‘‘(A) is an individual with a disability
under section 7(8)(A); and
174
‘‘(B) 
requires 
vocational 
rehabilitation
services to prepare for, enter, engage in, or re-
tain gainful employment.
‘‘(2) If the individual has a disability or is blind
as determined pursuant to title II or title XVI of the
Social Security Act, the individual will be considered
to have—
‘‘(A) a physical or mental impairment
which for such individual constitutes or results
in a substantial impediment to employment
under section 7(8)(A)(i); and
‘‘(B) a severe physical or mental impair-
ment which seriously limits one or more func-
tional capacities in terms of an employment
outcome under section 7(15)(A)(i).
‘‘(b) PROCESS.—For purposes of section 101(a), a
State will ensure that, subject to the order of selection
under section 102(b)(2), the following applies to an indi-
vidual:
‘‘(1) Once the individual makes a request in
person for a determination of eligibility:
‘‘(A) An adviser will be made available to
the individual regarding the process of obtain-
ing services under this title.
175
‘‘(B) An initial interview will be conducted,
followed by an initial assessment.
‘‘(C) A final determination will be made
not later than 30 days after the request (sub-
ject to the cooperation of the individual in the
process of determination).
‘‘(D) The determination of eligibility will
be based on the review of existing data de-
scribed in clause (i) of section 7(22)(A), and, to
the extent necessary, the preliminary assess-
ment described in clause (ii) of such section.
‘‘(E) If it is determined that the individual
is not an eligible individual, the individual will
be provided a written statement explaining the
basis of the determination.
‘‘(2) If it is determined that the individual is an
eligible individual:
‘‘(A) The needs of the individual for voca-
tional rehabilitation services will be assessed.
‘‘(B) Upon the request of the individual,
assistance will be provided to the individual in
the development of a written plan for the indi-
vidual regarding the provision of services pursu-
ant to subparagraph (A).
176
‘‘(c) RULE OF CONSTRUCTION.—This title may not
be construed as establishing an entitlement in any individ-
ual.
‘‘(d) DEFINITION.—For purposes of this title, the
term ‘eligible individual’ means an individual described in
subsection (a)(1).
‘‘SEC. 106. STATE REHABILITATION ADVISORY COUNCIL.
‘‘(a) IN GENERAL.—For purposes of section 101(a):
‘‘(1) A State will establish a State Rehabilita-
tion Advisory Council (referred to in this section as
the ‘Council’) in accordance with this section.
‘‘(2) The Council will be composed of the fol-
lowing:
‘‘(A) Representatives of organizations with-
in the State providing services to individuals
with disabilities and their families.
‘‘(B) Representatives of business, industry,
and labor.
‘‘(C) Representatives of disability advocacy
groups representing a cross section of—
‘‘(i) individuals with physical, cog-
nitive, sensory, and mental disabilities; and
‘‘(ii) parents, family members, guard-
ians, advocates, or authorized representa-
tives, of individuals with disabilities who
177
have difficulty in representing themselves
or are unable due to their disabilities to
represent themselves;
‘‘(3) The State administrative agent will be an
ex officio member of the Council.
‘‘(4) Members of the Council will be appointed
by the Governor or another entity that has appoint-
ment authority under State law.
‘‘(5) A majority of Council members will be per-
sons who are—
‘‘(A) individuals with disabilities described
in section 7(8)(B); and
‘‘(B) not employed by the designated State
administrative agent.
‘‘(6)(A) Except as provided in subparagraph
(B), the Council will select a chairperson from
among the membership of the Council.
‘‘(B) In States in which the Governor does not
have veto power pursuant to State law, the Governor
will designate a member of the Council to serve as
the chairperson of the Council or will require the
Council to so designate such a member.
‘‘(7) Each member of the Council will serve for
a term determined by the Governor or another entity
that has appointment authority under State law.
178
‘‘(8) Any vacancy occurring in the membership
of the Council will be filled in the same manner as
the original appointment. The vacancy will not affect
the power of the remaining members to execute the
duties of the Council.
‘‘(b) FUNCTIONS OF COUNCIL.—For purposes of sec-
tion 101(a), the Council will carry out the following:
‘‘(1) Advise the collaborative process under sec-
tion 103 of the Consolidated and Reformed Edu-
cation, Employment, and Rehabilitation Systems
Act, and the State administrative agent, in the prep-
aration of the State workforce development and lit-
eracy plan and other plans, reports, needs assess-
ments, and evaluations required by this title.
‘‘(2) To the extent feasible, conduct a review
and analysis of the effectiveness of, and consumer
satisfaction with, the delivery of core services and
vocational rehabilitation services to individuals with
disabilities within the State.
‘‘(3) Prepare and submit an annual report to
the collaborative process or appropriate State admin-
istrative agent and the Commissioner on the status
of vocational rehabilitation programs operated within
the State, and make the report available to the pub-
lic.
179
‘‘(4) Coordinate with other councils within the
State established to address the needs of individuals
with disabilities.
‘‘(5) Perform such other functions, consistent
with the purpose of this title, as the State Rehabili-
tation Advisory Council determines to be appro-
priate, that are comparable to the other functions
performed by the Council.
‘‘(c) RESOURCES.—
‘‘(1) PLAN.—For purposes of section 101(a),
the Council will prepare, in conjunction with the
State administrative agent, a plan for the provision
of such resources, including such staff and other
personnel, as may be necessary to carry out the
functions of the Council under this section. The re-
source plan shall, to the maximum extent possible,
rely on the use of resources in existence during the
period of implementation of the plan.
‘‘(2) RESOLUTION
OF
DISAGREEMENTS.—For
purposes of section 101(a), to the extent that there
is a disagreement between the Council and the State
administrative agent in regard to the resources nec-
essary to carry out the functions of the Council as
set forth in this section, the disagreement will be re-
180
solved by the Governor or appointing agency identi-
fied in subsection (a)(4).
‘‘(3) SUPERVISION
AND
EVALUATION.—For
purposes of section 101(a), the Council will, consist-
ent with State law, supervise and evaluate such staff
and other personnel as may be necessary to carry
out its functions under this section.
‘‘(4) PERSONNEL
CONFLICT
OF
INTEREST.—
For purposes of section 101(a), while assisting the
Council in carrying out its duties, staff and other
personnel will not be assigned duties by the State
administrative agent or any other agency or office of
the State, that would create a conflict of interest.
‘‘(d) CONFLICT OF INTEREST.—For purposes of sec-
tion 101(a), no member of the Council will cast a vote
on any matter that would provide direct financial benefit
to the member or otherwise give the appearance of a con-
flict of interest under State law.
‘‘(e) MEETINGS.—For purposes of section 101(a), the
Council will convene meetings and conduct such forums
or hearings as the Council considers appropriate. The
meetings, hearings, and forums will be publicly an-
nounced. The meetings will be open and accessible to the
general public unless there is a valid reason for an execu-
tive session.
181
‘‘(f) COMPENSATION AND EXPENSES.—For purposes
of section 101(a), the Council may use funds appropriated
under this title to reimburse members of the Council for
reasonable and necessary expenses of attending Council
meetings and performing Council duties (including child
care and personal assistance services), and to pay com-
pensation to a member of the Council, if such member is
not employed or must forfeit wages from other employ-
ment, for each day the member is engaged in performing
the duties of the Council.
‘‘(g) RULE OF CONSTRUCTION.—Nothing in this sec-
tion prohibits a State from establishing and providing
funds to a separate council to carry out functions de-
scribed in subsection (b) with respect to vocational reha-
bilitation services for individuals who are blind.
‘‘SEC. 107. AMOUNT OF ALLOTMENT.
‘‘(a)(1) Subject to the provisions of subsection (d),
for each fiscal year beginning before October 1, 1978, each
State shall be entitled to an allotment of an amount bear-
ing the same ratio to the amount authorized to be appro-
priated under section 101(d) for allotment under this sec-
tion as the product of (A) the population of the State,
and (B) the square of its allotment percentage, bears to
the sum of the corresponding products for all the States.
182
‘‘(2)(A) For each fiscal year beginning on or after
October 1, 1978, each State shall be entitled to an allot-
ment in an amount equal to the amount such State re-
ceived under paragraph (1) for the fiscal year ending Sep-
tember 30, 1978, and an additional amount determined
pursuant to subparagraph (B) of this paragraph.
‘‘(B) For each fiscal year beginning on or after Octo-
ber 1, 1978, each State shall be entitled to an allotment,
from any amount authorized to be appropriated for such
fiscal year under section 101(d) for allotment under this
section in excess of the amount appropriated under such
section for the fiscal year ending September 30, 1978, in
an amount equal to the sum of—
‘‘(i) an amount bearing the same ratio to 50
percent of such excess amount as the product of the
population of the State and the square of its allot-
ment percentage bears to the sum of the correspond-
ing products for all the States; and
‘‘(ii) an amount bearing the same ratio to 50
percent of such excess amount as the product of the
population of the State and its allotment percentage
bears to the sum of the corresponding products for
all the States.
‘‘(3) The sum of the payment to any State (other
than Guam, American Samoa, the Virgin Islands, and the
183
Northern Mariana Islands) under this subsection for any
fiscal year which is less than one-third of 1 percent of the
amount appropriated under section 101(d), or $3,000,000,
whichever is greater, shall be increased to that amount,
the total of the increases thereby required being derived
by proportionately reducing the allotment to each of the
remaining such States under this subsection, but with
such adjustments as may be necessary to prevent the sum
of the allotments made under this subsection to any such
remaining State from being thereby reduced to less than
that amount.
‘‘(4) For each fiscal year beginning on or after Octo-
ber 1, 1984, for which any amount is appropriated pursu-
ant to section 101(d), each State shall receive an alloca-
tion (from such appropriated amount) in addition to the
allotment to which such State is entitled under paragraphs
(2) and (3) of this subsection. Such additional allocation
shall be an amount which bears the same ratio to the
amount so appropriated as that State’s allotment under
paragraphs (2) and (3) of this subsection bears to the sum
of such allotments of all the States.
‘‘(b)(1) If the payment to a State pursuant to this
section for a fiscal year is less than the total payments
such State received under section 2 of the Vocational Re-
habilitation Act for the fiscal year ending June 30, 1973,
185
Subtitle B—Other Amendments to
Rehabilitation Act of 1973
SEC. 521. TRAINING AND DEMONSTRATION PROJECTS.
(a) IN GENERAL.—Effective October 1, 1995, the
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) is
amended—
(1) in title III—
(A) by striking section 303;
(B) by striking section 304;
(C) in section 311, by subsection (f);
(D) by striking section 312; and
(E) by striking section 316;
(2)(A) by transferring subsection (a) of section
802 from the current placement of the subsection;
(B) by redesignating such subsection as sub-
section (f); and
(C) by inserting such section at the end of sec-
tion 311 (as amended by paragraph (1)(C) of this
subsection);
(3)(A) by transferring subsection (g) of section
802 from the current placement of the subsection;
(B) by redesignating such subsection as sub-
section (g); and
186
(C) by inserting such section at the end of sec-
tion 311 (as amended by paragraph (2)(C) of this
subsection);
(4)(A) by transferring subsection (b) of section
803 from the current placement of the subsection;
(B) by redesignating such subsection as sub-
section (j); and
(C) by inserting such section at the end of sec-
tion 302; and
(5) by striking the remaining provisions of title
VIII.
(b) SECTION 311(c).—Effective October 1, 1997, sec-
tion 311 of the Rehabilitation Act of 1973 (29 U.S.C.
777a), as amended by subsection (a) of this subsection,
is amended—
(1) by striking subsection (c); and
(2) by redesignating subsections (d) through (g)
as subsections (c) through (f), respectively.
SEC. 522. EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS
WITH DISABILITIES.
(a) IN GENERAL.—Effective October 1, 1995, title VI
of the Rehabilitation Act of 1973 (29 U.S.C. 795 et seq.)
is amended—
(1) by striking part A;
(2) by striking part C;
187
(3) by striking part D; and
(4) in part B, by striking the part designation
and heading.
(b) PROJECTS WITH INDUSTRY.—Effective October
1, 1997, title VI of the Rehabilitation Act of 1973, as
amended by subsection (a) of this section, is repealed.
TITLE VI—AMENDMENTS TO THE
HIGHER EDUCATION ACT OF
1965
SEC. 601. PURPOSE OF TITLE.
The purpose of this title is to provide for the ces-
sation of Federal sponsorship of two Government spon-
sored enterprises, the Student Loan Marketing Associa-
tion and the College Construction Loan Insurance Asso-
ciation now that both corporations are economically viable
and have successfully fulfilled the purposes for which they
were created.
Subtitle A—Student Loan
Marketing Association
SEC. 611. REORGANIZATION OF THE STUDENT LOAN MAR-
KETING ASSOCIATION THROUGH THE FOR-
MATION OF A HOLDING COMPANY.
(a) AMENDMENT.—Part B of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1071 et seq. (1988))
188
is amended by inserting after section 439 (20 U.S.C.
1087–2) the following new section:
‘‘SEC. 440. REORGANIZATION OF THE STUDENT LOAN MAR-
KETING ASSOCIATION THROUGH THE FOR-
MATION OF A HOLDING COMPANY.
‘‘(a) ACTIONS BY THE ASSOCIATION’S BOARD OF DI-
RECTORS.—The Board of Directors of the Association
shall take or cause to be taken all such action as it deems
necessary or appropriate to effect, upon the shareholder
approval described in subsection (b), a restructuring of the
common stock ownership of the Association, as set forth
in a plan of reorganization adopted by the Board of Direc-
tors (the terms of which shall be consistent with this Act)
so that all of the outstanding common shares shall be di-
rectly owned by an ordinary business corporation char-
tered under State or District of Columbia law (the ‘Hold-
ing Company’), as the Board of Directors may determine.
Such actions may include, in the Board’s discretion, a
merger of a wholly owned subsidiary of the Holding Com-
pany with and into the Association, which would have the
effect provided in the plan of reorganization and the law
of the jurisdiction in which such subsidiary is incor-
porated. As part of the restructuring, the Board of Direc-
tors may cause (1) the common shares of the Association
to be converted, at the reorganization effective date, to
189
common shares of the Holding Company on a one for one
basis, consistent with applicable State or District of Co-
lumbia law, and (2) Holding Company common shares to
be registered with the Securities and Exchange Commis-
sion.
‘‘(b) SHAREHOLDER APPROVAL.—The plan of reor-
ganization adopted by the Board of Directors pursuant to
subsection (a) shall be submitted to common stockholders
of the Association for their approval. The reorganization
shall occur at the reorganization effective date, provided
that the plan of reorganization has been approved by the
affirmative votes, cast in person or by proxy, of the holders
of a majority of the issued and outstanding shares of the
Association common stock.
‘‘(c) TRANSITION.—
‘‘(1) IN GENERAL.—Except as specifically pro-
vided in this section, until the dissolution date the
Association shall continue to have all of the rights,
privileges and obligations set forth in, and shall be
subject to all of the limitations and restrictions of,
section 439 of this Act as in effect on the effective
date of this section. The Holding Company and its
affiliates other than the Association shall not be en-
titled to any of the rights, privileges and obligations,
and shall not be subject to the limitations and re-
190
strictions, applicable to the Association under section
439 of this Act as in effect on the effective date of
this section, except as specifically provided in this
section.
‘‘(2) TRANSFER OF CERTAIN PROPERTY.—Ex-
cept as specifically provided in this section, at the
reorganization effective date or as soon as prac-
ticable thereafter, the Association shall use its best
efforts to transfer to the Holding Company or its
subsidiaries (or both), in each case, as directed by
the Holding Company, all real and personal property
of the Association (both tangible and intangible)
other than the remaining property. Without limiting
the preceding sentence, such transferred property
shall include all right, title and interest in (A) direct
or indirect subsidiaries of the Association (excluding
any interest in any government sponsored enter-
prise), (B) contracts, leases, and other agreements,
(C) licenses and other intellectual property, and (D)
any other property of the Association. Notwithstand-
ing the preceding provisions of this paragraph, noth-
ing in this paragraph shall be construed to prohibit
the Association from transferring remaining prop-
erty from time to time to the Holding Company or
191
its subsidiaries, subject to the provisions of para-
graph (4).
‘‘(3) TRANSFER OF PERSONNEL.—At the reor-
ganization effective date, employees of the Associa-
tion shall become employees of the Holding Com-
pany (or of the subsidiaries), and the Holding Com-
pany (or the subsidiaries or both) shall provide all
necessary and appropriate management and oper-
ational support (including loan servicing) to the As-
sociation, as requested by the Association. The Asso-
ciation may, however, obtain such management and
operational support from other persons or entities.
‘‘(4) DIVIDENDS.—The Association may pay
dividends in the form of cash or noncash distribu-
tions so long as at the time of the declaration of
such dividends, after giving effect to the payment of
such dividends as of the date of such declaration by
the Board of Directors of the Association, the Asso-
ciation’s capital would be in compliance with the
capital standards set forth in section 439(r) of this
Act. If, at any time after the reorganization effective
date, the Association fails to comply with such cap-
ital standards, the Holding Company shall be obli-
gated to transfer to the Association additional cap-
ital in such amounts as are necessary to ensure that
192
the Association again complies with the capital
standards, but not to exceed that amount received
by the Holding Company as dividends during the 6-
month period immediately preceding such failure.
‘‘(5) VALUATION
OF
NONCASH
DISTRIBU-
TIONS.—After the reorganization effective date, any
distribution of noncash assets by the Association to
the Holding Company shall be valued at book value
on the date the Association’s Board of Directors ap-
proved such distribution for purposes of calculating
compliance with section 439(r) of this Act.
‘‘(6) RESTRICTIONS ON NEW BUSINESS ACTIV-
ITY OR ACQUISITION OF ASSETS BY ASSOCIATION.—
After the reorganization effective date, the Associa-
tion shall not engage in any new business activities
or acquire any additional assets other than—
‘‘(A) prior to the last day of the 36th full
calendar month immediately following the reor-
ganization effective date in connection with con-
tractual commitments for future student loan
purchases or warehousing advances or pursuant
to letters of credit or standby bond purchase
agreements, in either case which are outstand-
ing as of the reorganization effective date;
193
‘‘(B) in connection with its serving as a
lender-of-last-resort pursuant to section 439 of
this Act; and
‘‘(C) in connection with its purchase of
loans insured under this part, if the Secretary,
with the approval of the Secretary of the Treas-
ury, requests the Association to continue or re-
sume its secondary market purchase program
because the Secretary determines there is inad-
equate liquidity for loans made under this part,
the Secretary is authorized to enter into agree-
ments with the Association covering these addi-
tional secondary market activities.
Any agreement entered into under subparagraph (C)
shall cover a period of 12 months, but may be re-
newed if the Secretary determines that liquidity re-
mains inadequate. The fee provided under section
439(h)(7) shall not apply to loans acquired under
any such agreement with the Secretary.
‘‘(7) RESTRICTIONS ON ADDITIONAL INDEBTED-
NESS OF THE ASSOCIATION; ATTRIBUTES OF DEBT
OBLIGATIONS.—After the reorganization effective
date, the Association shall not incur indebtedness
which at any given time would exceed the aggregate
book value of its assets, to the extent such assets are
194
permitted to be held under this subsection. The As-
sociation shall not issue new debt obligations after
the last day of the 36th full calendar month imme-
diately following the reorganization effective date,
except in connection with its serving as a lender-of-
last-resort pursuant to section 439 of this Act or
with purchasing loans under an agreement with the
Secretary described in section 440(c)(6). Notwith-
standing the foregoing, nothing in this subsection
shall in any way whatsoever modify the attributes
accorded the debt obligations of the Association by
section 439 of this Act, regardless of whether such
debt obligations are incurred (A) prior to the reorga-
nization effective date, (B) after the reorganization
effective date and prior to the last day of the 36th
month period described above, or (C) after any such
obligations are transferred to a trust in accordance
with subsection (d).
‘‘(8) MONITORING
OF
SAFETY
AND
SOUND-
NESS.—
‘‘(A) OBLIGATION TO OBTAIN, MAINTAIN,
AND REPORT INFORMATION.—The Association
shall obtain such information and make and
keep such records as the Secretary of the
Treasury may from time to time prescribe con-
195
cerning the Association’s policies, procedures,
or systems for monitoring and controlling finan-
cial risk to it resulting from the activities of
any of its associated persons, to the extent such
activities are reasonably likely to have a mate-
rial impact on the financial condition of the As-
sociation, including its capital ratio, its liquid-
ity, or its ability to conduct and finance its op-
erations, except that the Association’s obliga-
tions under this subsection with respect to any
associated person which is a third party servicer
(as defined in 34 C.F.R. 682.200(b)) shall be
limited to providing to the Secretary of the
Treasury copies of any reports or other infor-
mation provided to the Secretary of Education
pursuant to 34 C.F.R. 682.200 et seq. The Sec-
retary of the Treasury may require summary
reports of such information to be filed no more
frequently than quarterly. For purposes of this
paragraph, the term ‘associated person’ shall
mean any person, other than a natural person,
directly or indirectly controlling, controlled by,
or under common control with the Association.
‘‘(B) MAINTENANCE OF SEPARATE ENTI-
TIES.—After the reorganization effective date,
196
the Holding Company and other corporate af-
filiates of the Association shall take all reason-
able actions to—
‘‘(i) preserve the separate corporate
identities of each company within the hold-
ing company structure for purposes of any
legal or equitable proceeding that could in-
volve the Association, including the mainte-
nance of separate books and records and
the separation of the funds and assets of
the separate entities;
‘‘(ii) maintain arms length relation-
ships between the Association and its cor-
porate affiliates; and
‘‘(iii) maintain independent manage-
ment between the Association and Holding
Company and its other subsidiaries, includ-
ing the disqualification of at least one offi-
cer of the Association from serving as an
officer or employee of the Holding Com-
pany or such other subsidiaries.
‘‘(C) ENCUMBRANCE
OF
ASSETS.—Not-
withstanding any otherwise applicable Federal
or State law, rule, or regulation, or legal or eq-
uitable principle, doctrine, or theory to the con-
198
warrant to purchase from the Holding Company one
share of the registered common stock of the Holding
Company at any time on or before December 31,
2004. The exercise price for such warrants shall be
an amount equal to (A) the average closing price
of the common stock of the Association for the 20
business days prior to and including the date of en-
actment of this section on the exchange or market
which is then the primary exchange or market for
the common stock of the Association, plus (B) 10
percent of the average price described in clause (A)
subject to any adjustments necessary to reflect the
conversion of Association common stock into Hold-
ing Company common stock as part of the plan of
reorganization approved by the Association’s share-
holders.
‘‘(11) RESTRICTIONS ON TRANSFER OF ASSO-
CIATION
SHARES
AND
BANKRUPTCY
OF
ASSOCIA-
TION.—After the reorganization effective date, the
Holding Company shall not sell, pledge, or otherwise
transfer the outstanding shares of the Association,
or agree to or cause the Association to file bank-
ruptcy, without prior approval of the Secretary of
the Treasury; except, that such approval shall not be
withheld if, after giving effect to such event, the
199
safety and soundness provisions of section 439(r)
are maintained.
‘‘(d) DISCHARGE OF REMAINING OBLIGATIONS, LIQ-
UIDATION AND DISSOLUTION OF THE ASSOCIATION.—The
Association shall dissolve and its separate existence shall
terminate on December 31, 2004, after discharge of its
remaining obligations and liquidation pursuant to this
subsection. The Association may dissolve pursuant to this
subsection prior to December 31, 2004 by notifying the
Secretary of Education of its intention to dissolve, unless
within 60 days of receipt of such notice the Secretary noti-
fies the Association that it continues to be needed to serve
as a lender of last resort pursuant to section 439(q) of
this Act or continues to be needed to purchase loans under
an agreement with the Secretary described in section
440(c)(6). On the dissolution date, the Association shall
take the following actions:
‘‘(1) ESTABLISHMENT OF A TRUST.—The Asso-
ciation shall, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the
Association and the appointed trustee, irrevocably
transfer the remaining obligations to the trust and
irrevocably deposit or cause to be deposited into
such trust the following assets, as trust funds solely
200
for the benefit of holders of the remaining obliga-
tions—
‘‘(A) money or noncallable obligations of or
guaranteed by the United States of America or
any agency thereof for which payment the full
faith and credit of the United States is pledged,
maturing as to principal and interest in such
amounts and at such times as are sufficient
without consideration of any significant rein-
vestment of such interest to pay the principal of
and interest on such remaining obligations to
stated maturity,
‘‘(B) securities or financial assets (which
may include student loans) in such amounts
and of such kind as to ensure the highest credit
rating from a nationally recognized bond rating
agency for such trust, and as to which the
Holding Company shall agree to take all actions
necessary to maintain such rating, or
‘‘(C) a combination of subparagraphs (A)
and (B).
All money, obligations, or financial assets deposited
into the trust pursuant to this subsection shall be
applied by the trustee to the payment of the obliga-
tions assumed by the trust. Upon the fulfillment of
201
the trustee’s obligations under the trust, any re-
maining assets of the trust shall be transferred to
the Holding Company or its subsidiaries, or both,
as directed by the Holding Company. To the extent
that such money, obligations, and financial assets
are insufficient to pay the obligations assumed by
the trust at the time such obligations become due,
the Holding Company shall agree to fully and un-
conditionally guarantee the payment of such obliga-
tions.
‘‘(2) OBLIGATIONS NOT TRANSFERRED TO THE
TRUST.—The Association shall make proper provi-
sion under applicable State law (which, in the ab-
sence of any other applicable law shall be deemed
the District of Columbia law) for all other obliga-
tions of the Association (including the repurchase or
redemption or the making of proper provision for the
repurchase or redemption on or prior to December
31, 2004 of any preferred stock of the Association
then outstanding).
‘‘(3) TRANSFER OF REMAINING ASSETS AND LI-
ABILITIES.—The Association shall transfer to the
Holding Company or its subsidiaries, or both, as di-
rected by the Holding Company, all remaining assets
202
and liabilities of the Association not deposited in the
trust.
‘‘(e) OPERATION OF THE HOLDING COMPANY.—
‘‘(1) HOLDING
COMPANY
BOARD
OF
DIREC-
TORS.—The number and composition of the Board
of Directors of the Holding Company shall be deter-
mined as set forth in the Holding Company’s charter
or like instrument (as amended from time to time)
or bylaws (as amended from time to time) and as
permissible under the laws of the jurisdiction of its
incorporation.
‘‘(2) HOLDING COMPANY NAME.—The names of
the Holding Company and any direct or indirect
subsidiary of the Holding Company other than the
Association (A) may not contain the name ‘Student
Loan Marketing Association’, and (B) may contain
(to the extent permitted by the applicable State or
District of Columbia law), ‘Sallie Mae’, or variations
thereof or such other name as the Board of Direc-
tors of the Association or the Holding Company
shall deem appropriate.
‘‘(f) STRICT CONSTRUCTION.—Except as specifically
set forth in this section, nothing contained in this section
shall be construed to limit the authority of the Association
as a federally chartered corporation, or of the Holding
203
Company as a State or District of Columbia chartered cor-
poration.
‘‘(g) DEADLINE FOR REORGANIZATION EFFECTIVE
DATE.—This section shall be of no further force and effect
in the event that the reorganization effective date does not
occur on or before 18 months after the date of enactment
of this section.
‘‘(h) DEFINITIONS.—For purposes of this section—
‘‘(1) The term ‘Association’ means the Student
Loan Marketing Association.
‘‘(2) The term ‘dissolution date’ shall mean De-
cember 31, 2004, or such earlier date as the Sec-
retary of Education permits the transfer of remain-
ing obligations in accordance with subsection (d) of
this section.
‘‘(3) The term ‘reorganization effective date’
means the effective date of the reorganization as de-
termined by the Board of Directors of the Associa-
tion, which shall not be earlier than the date that
stockholder approval is obtained pursuant to sub-
section (b) of this section and shall not be later than
the date that is 18 months after the date of enact-
ment of this section.
‘‘(4) The term ‘Holding Company’ means the
new business corporation formed pursuant to this
204
section by the Association under the laws of any
State of the United States or the District of Colum-
bia.
‘‘(5) The term ‘remaining obligations’ shall
mean the debt obligations of the Association out-
standing as of the dissolution date.
‘‘(6) The term ‘remaining property’ shall mean
the following assets and liabilities of the Association
which are outstanding as of the reorganization effec-
tive date: (A) debt obligations issued by the Associa-
tion, (B) contracts relating to interest rate, cur-
rency, or commodity positions or protections, (C) in-
vestment securities owned by the Association, (D)
any instruments, assets, or agreements described in
section 439(d) of this Act (including without limita-
tion all student loans, forward purchase and lending
commitments, warehousing advances, academic fa-
cilities obligations, letters of credit, standby bond
purchase agreements, liquidity agreements, and stu-
dent loan revenue bonds or other loans), and (E) ex-
cept as specifically prohibited by this Act, any other
nonmaterial assets or liabilities of the Association
which the Association’s Board of Directors deter-
mines to be necessary or appropriate to its oper-
ations.
206
the Higher Education Act of 1965 (20 U.S.C. 1087–
2) is repealed.
Subtitle B—College Construction
Loan Insurance Association
SEC. 621. PRIVATIZATION OF COLLEGE CONSTRUCTION
LOAN INSURANCE ASSOCIATION.
(a) REPEAL OF STATUTORY RESTRICTIONS.—Part D
of title VII of the Higher Education Act of 1965 (20
U.S.C. 1132f et seq.) is repealed.
(b) STATUS OF THE CORPORATION.—
(1) STATUS OF THE CORPORATION.—The Cor-
poration shall not be an agency, instrumentality, or
establishment of the United States Government and
shall not be a ‘‘Government corporation’’ nor a
‘‘Government controlled corporation’’ as defined in
section 103 of title 5, United States Code. No action
under section 1491 of title 28, United States Code
(commonly known as the Tucker Act) shall be allow-
able against the United States based on the actions
of the Corporation.
(2) CORPORATE
POWERS.—The Corporation
shall have the power to engage in any business or
other activities for which corporations may be orga-
nized under the laws of any State of the United
States or the District of Columbia. The Corporation
207
shall have the power to enter into contracts, to exe-
cute instruments, to incur liabilities, to provide prod-
ucts and services, and to do all things as are nec-
essary or incidental to the proper management of its
affairs and the efficient operation of a private, for-
profit business.
(c) RELATED PRIVATIZATION REQUIREMENTS.—
(1) NOTICE
REQUIREMENTS.—During the 5-
year period following the date of the enactment of
this Act, the Corporation shall include in any docu-
ment offering the Corporation’s securities a state-
ment that—
(A) the Corporation is not a Government-
sponsored enterprise or instrumentality of the
United States; and
(B) the Corporation’s obligations are not
guaranteed by the full faith and credit of the
United States.
(2) CORPORATE CHARTER.—The Corporation’s
charter shall be amended as necessary and without
delay to conform the requirements of this Act.
(3) CORPORATE NAME.—The name of the Cor-
poration, or of any direct or indirect subsidiary
thereof, may not contain the term ‘‘College Con-
struction Loan Insurance Association’’.
208
(4) ARTICLES OF INCORPORATION.—The Cor-
poration shall amend its articles of incorporation
without delay to reflect that one of the purposes of
the Corporation shall be to guarantee, insure and re-
insure bonds, leases, and other evidences of debt of
educational institutions, including Historically Black
Colleges and Universities and other academic insti-
tutions which are ranked in the lower investment
grade category using a nationally recognized credit
rating system.
(5) TRANSITION REQUIREMENTS.—
(A) REQUIREMENTS UNTIL STOCK SALE.—
Notwithstanding subsection (a), the require-
ments of section 754 of the Higher Education
Act of 1965 (20 U.S.C. 1132f–3), as in exist-
ence as of the day before enactment of this Act,
shall continue to be effective until the day im-
mediately following the date of closing of the
purchase of the Secretary’s stock (or the date
of closing of the final purchase, in the case of
multiple transactions) pursuant to subsection
(d) of this section.
(B) REPORTS AFTER STOCK SALE.—The
Corporation shall, not later than March 30 of
the first full calendar year immediately follow-
209
ing the sale pursuant to subsection (d), and
each of the 2 succeeding years, submit to the
Secretary of Education a report describing the
Corporation’s efforts to assist in the financing
of 
education 
facilities 
projects, 
including
projects for elementary, secondary, and post-
secondary educational institution infrastructure,
and detailing, on a project-by-project basis, the
Corporation’s business dealings with edu-
cational institutions that are rated by a nation-
ally recognized statistical rating organization at
or below the organization’s third highest rat-
ings.
(d) SALE OF FEDERALLY OWNED STOCK.—
(1) SALE OF STOCK REQUIRED.—The Secretary
of the Treasury shall, upon the request of the Sec-
retary of Education sell, pursuant to section 324 of
title 31, United States Code, the voting common
stock of the Corporation owned by the Secretary of
Education not later than one year after the date of
the enactment of this Act.
(2) PURCHASE BY THE CORPORATION.—In the
event that the Secretary of the Treasury is unable
to sell the voting common stock, or any portion
thereof, at a price acceptable to the Secretary of
210
Education and the Secretary of the Treasury within
the period specified in paragraph (1), the Corpora-
tion shall purchase such stock at a price determined
by the Secretary of the Treasury and acceptable to
the Corporation based on independent appraisal by
one or more nationally recognized financial advisory
firms. Such firms shall be selected by the Secretary
of the Treasury in consultation with the Secretary of
Education and the Corporation.
(3) REIMBURSEMENT OF COSTS OF SALE.—The
Secretary of the Treasury shall be reimbursed from
the proceeds of the sale of the stock under this sec-
tion for all reasonable costs of any contracts related
to such sale, including all reasonable expenses relat-
ing to one or more independent appraisals under this
section.
(e) ASSISTANCE BY THE CORPORATION.—The Cor-
poration shall provide such assistance as the Secretary of
the Treasury and the Secretary of Education may require
to facilitate the sale of the stock under this section.
(f) DEFINITION.—As used in this section, the term
‘‘Corporation’’ means the Corporation established pursu-
ant to the provision of law repealed by subsection (a).
211
TITLE VII—REPEALERS AND
OTHER AMENDMENTS.
SEC. 701. CARL D. PERKINS VOCATIONAL AND APPLIED
TECHNOLOGY EDUCATION ACT.
The Carl D. Perkins Vocational and Applied Tech-
nology Education Act (20 U.S.C. 2301 et seq.) is repealed.
SEC. 702. SCHOOL-TO-WORK OPPORTUNITIES ACT.
The School-to-Work Opportunities Act of 1994 (20
U.S.C. 6101 et seq.) is repealed.
SEC. 703. ADULT EDUCATION ACT.
(a) IN GENERAL.—The Adult Education Act (20
U.S.C. 1201 et seq.) is repealed.
(b) CONFORMING AMENDMENTS.—
(1) ESEA.—The Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6301 et seq.) is
amended—
(A) in section 1202(c)(1), by striking ‘‘the
Adult Education Act,’’ and inserting ‘‘title IV
of the CAREERS Act,’’;
(B) in section 1205(8)(B), by striking ‘‘the
Adult Education Act,’’ and inserting ‘‘title IV
of the CAREERS Act,’’;
(C) in section 1206(a)(1)(A), by striking
‘‘the Adult Education Act;’’ and inserting ‘‘title
IV of the CAREERS Act;’’; and
212
(D) in section 9161(2), by striking ‘‘sec-
tion 312(2) of the Adult Education Act.’’ and
inserting ‘‘section 5 of the CAREERS Act.’’.
(2) TECHNOLOGY FOR EDUCATION ACT.—The
Technology for Education Act of 1994 (20 U.S.C.
6801 et seq.) is amended in section 3113(1) by
striking ‘‘section 312 of the Adult Education Act;’’
and inserting ‘‘section 5 of the CAREERS Act;’’;
SEC. 704. NATIONAL LITERACY ACT.
The National Literacy Act of 1991, except section
101 of such Act, is repealed.
SEC. 705. LIBRARY SERVICES AND CONSTRUCTION ACT.
(a) IN GENERAL.—The Library Services and Con-
struction Act (20 U.S.C. 351 et seq.) is repealed.
(b) CONFORMING AMENDMENT.—The Technology for
Education Act of 1994 (20 U.S.C. 6801 et seq.) is amend-
ed in section 3113(10) by striking ‘‘section 3 of the Li-
brary Services and Construction Act;’’ and inserting ‘‘sec-
tion 5 of the CAREERS Act;’’.
SEC. 706. TECHNOLOGY FOR EDUCATION ACT OF 1994.
Sections 3601 through 3605 of the Technology for
Education Act of 1994 (20 U.S.C. 7001 et seq.) (relating
to the library media resources program) are repealed.
213
SEC. 707. JOB TRAINING PARTNERSHIP ACT.
(a) IN GENERAL.—The Job Training Partnership
Act (29 U.S.C. 1501 et seq.), except sections 421 through
439 and section 441 of such Act (29 U.S.C. 1691 et seq.)
(relating to the Job Corps), is hereby repealed.
(b) CONFORMING AMENDMENTS TO JOB CORPS.—
The Job Training Partnership Act (29 U.S.C. 1501 et
seq.) is amended—
(1) by redesignating sections 421 through 439
as sections 1 through 20, respectively;
(2) in section 1 (as redesignated), by striking
‘‘part’’ each place it appears and inserting ‘‘Act’’;
(3) in section 3(4) (as redesignated), by strik-
ing ‘‘sections 424 and 425’’ and inserting ‘‘sections
4 and 5’’;
(4) in section 4 (as redesignated)—
(A) in subsection (a), by striking ‘‘entities
administering programs under title II of this
Act,’’; and
(B) in subsection (b), by striking ‘‘part’’
and inserting ‘‘Act’’;
(5) in section 6 (as redesignated)—
(A) in subsection (a), by striking ‘‘section
428’’ and inserting ‘‘section 8’’; and
(B) by striking subsection (d);
(6) in section 7 (as redesignated)—
214
(A) by striking subsection (b); and
(B) by redesignating subsection (c) as sub-
section (b);
(7) in section 13 (as redesignated)—
(A) in subsection (a)(4), by striking ‘‘part’’
and inserting ‘‘Act’’;
(B) in subsection (c)(1), by striking ‘‘and
activities authorized under sections 452 and
453’’; and
(C) in subsection (e), by striking ‘‘section
431’’ and inserting ‘‘section 11’’;
(8) in section 14 (as redesignated)—
(A) in subsection (a)—
(i) in the matter preceding paragraph
(1), by striking ‘‘section 427’’ and insert-
ing ‘‘section 7’’; and
(ii) in paragraph 4(A), by striking
‘‘section 428’’ and inserting ‘‘section 8’’;
(B) in subsection (c)(3), by striking ‘‘sec-
tion 423’’ and inserting ‘‘section 3’’;
(C) in subsection (d), by striking ‘‘sections
424 and 425’’ and inserting ‘‘sections 4 and 5’’;
and
(D) in subsection (e), by striking ‘‘, pursu-
ant to section 452(d),’’;
215
(9) in section 16 (as redesignated), by striking
‘‘part’’ each place it appears and inserting ‘‘Act’’;
(10) in section 19 (as redesignated), by striking
‘‘part’’ each place it appears and inserting ‘‘Act’’;
(11) in section 20 (as redesignated), by striking
‘‘part’’ and inserting ‘‘Act’’; and
(12) by adding at the end the following new
section:
‘‘AUTHORIZATION OF APPROPRIATIONS
‘‘SEC. 21. There are authorized to be appropriated
such sums as are necessary to carry out this Act.’’.
SEC. 708. STEWART B. McKINNEY HOMELESS ASSISTANCE
ACT.
(a) ADULT EDUCATION.—Section 702 of the Stewart
B. McKinney Homeless Assistance Act (42 U.S.C. 11421)
is repealed.
(b) SUBTITLE C.—
(1) IN GENERAL.—Subtitle C of title VII of the
Stewart B. McKinney Homeless Assistance Act (42
U.S.C. 11441 et seq.), except section 738, is hereby
repealed.
(2) TABLE OF CONTENTS.—The table of con-
tents of such Act is amended by striking the items
relating to sections 731 through 737 and sections
739 through 741.
216
SEC. 709. HIGHER EDUCATION PROVISIONS.
(a) HIGHER EDUCATION ACT
OF 1965 PROVI-
SIONS.—The following provisions of the Higher Education
Act of 1965 are repealed:
(1) Part B of title I (20 U.S.C. 1011 et seq.),
relating to articulation agreements.
(2) Part C of title I (20 U.S.C. 1015 et seq.),
relating to access and equity to education for all
Americans through telecommunications.
(3) Title II (20 U.S.C. 1021 et seq.), relating
to academic libraries and information services.
(4) Chapter 2 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–21 et seq.), relating to national
early intervention scholarships.
(5) Chapter 3 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–31 et seq.), relating to presi-
dential access scholarships.
(6) Chapter 4 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–41 et seq.), relating to model pro-
gram 
community 
partnerships 
and 
counseling
grants.
(7) Chapter 5 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–52 et seq.), relating to a database
and information line concerning student financial as-
sistance.
218
(17) Subpart 1 of part C of title V (20 U.S.C.
1104 et seq.), relating to Douglas teacher scholar-
ships.
(18) Subpart 3 of part C of title V (20 U.S.C.
1106 et seq.), relating to the teacher corps.
(19) Subpart 3 of part D of title V (20 U.S.C.
1109 et seq.), relating to class size demonstration
grants.
(20) Subpart 4 of part D of title V (20 U.S.C.
1110 et seq.), relating to middle school teaching
demonstration programs.
(21) Subpart 1 of part E of title V (20 U.S.C.
1111 et seq.), relating to new teaching careers.
(22) Subpart 1 of part F of title V (20 U.S.C.
1113 et seq.), relating to the national mini corps
programs.
(23) Section 586 (20 U.S.C. 1114), relating to
demonstration grants for critical language and area
studies.
(24) Section 587 (20 U.S.C. 1114a), relating to
development of foreign languages and cultures in-
structional materials.
(25) Subpart 3 of part F of title V (20 U.S.C.
1115), relating to small State teaching initiatives.
219
(26) Subpart 4 of part F of title V (20 U.S.C.
1116), relating to faculty development grants.
(27) Subpart 5 of part F of title V (20 U.S.C.
1117), relating to early childhood staff training and
professional enhancement.
(28) Section 605 (20 U.S.C. 1124a), relating to
intensive summer language institutes.
(29) Section 607 (20 U.S.C. 1125a), relating to
foreign language periodicals.
(30) Part A of title VII (20 U.S.C. 11326 et
seq.), relating to academic and library facilities.
(31) Title VIII (20 U.S.C. 1133 et seq.), relat-
ing to cooperative education programs.
(32) Part A of title IX (20 U.S.C. 1134a et
seq.), relating to women and minority participation
in graduate education.
(33) Part B of title IX (20 U.S.C. 1134d et
seq.), relating to Harris fellowships.
(34) Part C of title IX (20 U.S.C. 1134h et
seq.), relating to Javits fellowships.
(35) Part E of title IX (20 U.S.C. 1134r et
seq.), relating to the faculty development fellowship
program.
220
(36) Part F of title IX (20 U.S.C. 1134s et
seq.), relating to legal training for the disadvan-
taged.
(37) Part G of title IX (20 U.S.C. 1134u et
seq.), relating to law school clinical programs.
(38) Section 1011 (20 U.S.C. 1135a–11), relat-
ing to special projects in areas of national need.
(39) Subpart 2 of part B of title X (20 U.S.C.
1135c et seq.), relating to science and engineering
access programs.
(40) Part C of title X (20 U.S.C. 1135e et
seq.), relating to women and minorities science and
engineering outreach demonstration programs.
(41) Part D of title X (20 U.S.C. 1135f), relat-
ing to Eisenhower leadership programs.
(42) Title XI (20 U.S.C. 1136 et seq.), relating
to community service programs.
(b) EDUCATION AMENDMENTS
OF 1986 PROVI-
SIONS.—The following provisions of the Education
Amendments of 1986 are repealed:
(1) Part E of title XIII (20 U.S.C. 1221–1
note), relating to a National Academy of Science
study.
221
(2) Title XV (20 U.S.C. 4401 et seq.), relating
to American Indian, Alaska Native, and Native Ha-
waiian culture and art development.
(c) EDUCATION
AMENDMENTS
OF
1992 PROVI-
SIONS.—The following provisions of the Education
Amendments of 1992 are repealed:
(1) Part F of title XIII (25 U.S.C. 3351 et
seq.), relating to American Indian postsecondary
economic development scholarships.
(2) Part G of title XIII (25 U.S.C. 3371), re-
lating to American Indian teacher training.
(3) Section 1406 (20 U.S.C. 1221e–1 note), re-
lating to a national survey of factors associated with
participation.
(4) Section 1409 (20 U.S.C. 1132a note), relat-
ing to a study of environmental hazards in institu-
tions of higher education.
(5) Section 1412 (20 U.S.C. 1101 note), relat-
ing to a national job bank for teacher recruitment.
(6) Part B of title XV (20 U.S.C. 1452 note),
relating to a national clearinghouse for postsecond-
ary education materials.
(7) Part C of title XV (20 U.S.C. 1101 note),
relating to school-based decisionmakers.
222
(8) Part D of title XV (20 U.S.C. 1145h note),
relating to grants for sexual offenses education.
(9) Part E of title XV (20 U.S.C. 1070 note),
relating to Olympic scholarships.
(10) Part G of title XV (20 U.S.C. 1070a–11
note), relating to advanced placement fee payment
programs.
(d) CONFORMING AMENDMENTS.—The Higher Edu-
cation Act of 1965 is amended—
(1) in section 453(c)(2)—
(A) by striking subparagraph (E); and
(B) by redesignating subparagraphs (F)
through (H) as subparagraphs (E) through (G),
respective;
(2) in section 487(a)(3), by striking subpara-
graph (B) and redesignating subparagraphs (C) and
(D) as subparagraphs (B) and (C), respectively;
(3) in section 487(a)(15), by striking ‘‘the Sec-
retary of Veterans Affairs, and State review entities
under subpart 1 of part H’’ and inserting ‘‘and the
Secretary of Veterans Affairs’’;
(4) in section 487(a)(21), by striking ‘‘, State
postsecondary review entities,’’;
(5) in section 487(c)(1)(A)(i), by striking
‘‘State agencies, and the State review entities re-
223
ferred to in subpart 1 of part H’’ and inserting ‘‘and
State agencies’’;
(6) in section 487(c)(4), by striking ‘‘, after
consultation with each State review entity designated
under subpart 1 of part H,’’;
(7) in section 487(c)(5), by striking ‘‘State re-
view entities designated under subpart 1 of part
H,’’;
(8) in section 496(a)(7), by striking ‘‘and the
appropriate State postsecondary review entity’’;
(9) in section 496(a)(8), by striking ‘‘and the
State postsecondary review entity of the State in
which the institution of higher education is located’’;
(10) in section 498(g)(2), by striking everything
after the first sentence;
(11) in section 498A(a)(2)(D), by striking ‘‘by
the appropriate State postsecondary review entity
designated under subpart 1 of this part or’’;
(12) in section 498A(a)(2)—
(A) by inserting ‘‘and’’ after the semicolon
at the end of subparagraph (E);
(B) by striking subparagraph (F); and
(C) by redesignating subparagraph (G) as
subparagraph (F); and
(13) in section 498A(a)(3)—
224
(A) by inserting ‘‘and’’ after the semicolon
at the end of subparagraph (C);
(B) by striking ‘‘; and’’ at the end of sub-
paragraph (D) and inserting a period; and
(C) by striking subparagraph (E).
SEC. 710. EFFECTIVE DATE.
The repeals and amendments made by this title shall
take effect on October 1, 1996.
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