172
(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;
(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-
173
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; and
(E) 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-
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
174
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
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—
175
(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
(III) providers of services receiv-
ing assistance under this subtitle;
(ii) businesses that have demonstrated
interest in literacy programs;
(iii) literacy students;
(iv) experts in the area of literacy re-
search;
(v) State and local governments; and
(vi) representatives of employees.
(2) DUTIES.—The Board shall—
176
(A) make recommendations concerning the
appointment of the Director and staff of the In-
stitute;
(B) provide independent advice on the op-
eration of the Institute; and
(C) receive reports from the Interagency
Group and the Director.
(3) TERMS.—
(A) IN GENERAL.—Each member of the
Board shall be appointed for a term of 3 years,
except that the initial terms for members may
be 1, 2, or 3 years in order to establish a rota-
tion in which 1⁄3 of the members are selected
each year.
(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.
177
(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.
(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,
178
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.
(j) REPORT.—The Institute shall submit a biennial
report to the Interagency Group and the Congress.
SEC. 442. NATIONAL LEADERSHIP ACTIVITIES.
(a) IN GENERAL.—The Secretary shall establish and
carry out a program of national leadership and evaluation
activities to enhance the quality of adult education and
family literacy programs nationwide.
(b) REQUIRED ACTIVITY.—
(1) IN
GENERAL.—The program of national
leadership and evaluation activities under subsection
(a) shall include a national evaluation, conducted by
the Secretary, of the programs and activities carried
out by States and local service providers with Fed-
179
eral funds received under this subtitle. Such evalua-
tion shall include information on the following:
(A) The manner in which States and local
service providers use Federal funds, including
the manner in which States allocate such funds
among such providers.
(B) The manner in which States establish
goals and performance standards and use such
goals and standards to manage and improve
programs.
(C) The effectiveness of the funds used
under subparagraphs (B) and (C) of section
432(a)(3).
(D) The manner in which economically dis-
advantaged individuals and educationally dis-
advantaged adults are being served by States
and local service providers.
(E) The coordination between programs
and activities carried out with Federal funds re-
ceived under titles II and III and programs and
activities carried out with Federal funds re-
ceived under this subtitle.
(F) The percentage of individuals receiving
a service from an integrated career center sys-
tem who are referred by such system to a local
180
service provider providing adult education or lit-
eracy services.
(2) REPORT.—Not later than September 30,
2001, the Secretary shall provide to the Congress
and publicly publish the results of the evaluation
conducted under paragraph (1).
(c) AUTHORIZED ACTIVITIES.—
(1) IN
GENERAL.—The program of national
leadership and evaluation activities under subsection
(a) may include the following:
(A) Assisting States in developing levels of
performance.
(B) Research and development.
(C) Demonstration of model and innovative
programs.
(D) Evaluations, including independent
evaluations of adult education and family lit-
eracy programs carried out with financial as-
sistance received pursuant to this subtitle.
(E) Data collection.
(F) Professional development.
(G) Technical assistance to States and
local service providers receiving Federal finan-
cial assistance pursuant to this subtitle.
181
(H) Making grants to State or regional
networks of literacy resource centers described
in section 432(a)(3)(D).
(I) Other activities to enhance the quality
of adult education and family literacy programs
nationwide.
(2) GRANTS, CONTRACTS, AND
COOPERATIVE
AGREEMENTS.—The Secretary may carry out the ac-
tivities described in paragraph (1) directly or
through grants, contracts, and cooperative agree-
ments.
Subtitle B—Library Services and
Technology Consolidation Grant
SEC. 451. PURPOSES.
The purposes of this subtitle are—
(1) to consolidate Federal library service pro-
grams;
(2) to improve public access to information
through electronic networks; and
(3) to provide linkages among and between li-
braries and integrated career center systems.
SEC. 452. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—There are authorized to be appro-
priated to carry out this subtitle $110,000,000 for each
of the fiscal years 1997 through 2002.
182
(b) ADVANCE NOTICE OF FUNDING.—For the pur-
pose of affording adequate notice of funding available
under this subtitle, an appropriation to carry out this sub-
title is authorized to be included in an appropriation Act
for the fiscal year preceding the fiscal year for which such
appropriation is first available for obligation.
SEC. 453. ALLOTMENTS.
(a) INITIAL ALLOTMENTS.—
(1) IN GENERAL.—From the sums appropriated
under section 452 for any fiscal year, the Secretary
shall allot—
(A) $40,000 each to Guam, American
Samoa, the Commonwealth of the Northern
Mariana Islands, and the Virgin Islands; and
(B) $200,000 to each of the other States.
(2) RATABLE REDUCTION.—If the sums appro-
priated under section 452 for any fiscal year are in-
sufficient to pay all of the allotments under para-
graph (1), each such allotment shall be ratably re-
duced.
(b) ADDITIONAL ALLOTMENTS.—
(1) IN GENERAL.—From the remainder of the
sums appropriated under section 452 for any fiscal
year after the application of subsection (a), the Sec-
retary shall allot to each State an amount which
183
bears the same ratio to such remainder as the popu-
lation of the State bears to the population of all
States.
(2) 
DETERMINATION
OF
POPULATION
OF
STATES.—For the purpose of this subsection, the
population of each State, and the total population of
all States, shall be determined by the Secretary on
the basis of the most recent census data available to
the Secretary, and the Secretary shall use for such
purpose, if available, the annual interim current cen-
sus data produced by the Secretary of Commerce
pursuant to section 181 of title 13, United States
Code.
SEC. 454. GRANTS TO STATES.
(a) IN GENERAL.—The Secretary shall make a grant
for a fiscal year to a State if the State—
(1) has submitted to the Secretary for the year
an annual application that has been approved by the
Secretary under section 456; and
(2) has entered into a written agreement with
the Secretary that—
(A) the State will provide 100 percent of
the funds paid to the State under this subtitle
for the year to the State library administrative
agency for the State;
184
(B) such agency will be required to use
such funds to carry out activities that—
(i) are described in such annual appli-
cation;
(ii) achieve the purposes of this sub-
title; and
(iii) satisfy the requirements of sec-
tion 455;
(C) there will be available from State and
local sources for expenditure by such agency to
carry out such activities an amount that equals
or exceeds 25 percent of the total cost (as de-
termined by the Secretary) of carrying out such
activities for the year; and
(D) such agency has the fiscal and legal
authority and capability to administer all as-
pects of such activities.
(b) AMOUNT OF GRANTS.—The amount of a grant
to a State under subsection (a) for a fiscal year shall equal
the lesser of the following:
(1) The sum of the initial and additional allot-
ments of the State for the year.
(2) 75 percent of the total cost (as determined
by the Secretary) of carrying out the activities de-
scribed in subsection (a)(2)(B) for the year.
185
SEC. 455. USES OF FUNDS.
(a) IN GENERAL.—Of the funds provided to a State
library administrative agency under section 454(a)(2)(A),
the agency shall expend (either directly or through
subgrants or cooperative agreements) at least 97 percent
for one or more of the following purposes:
(1) Electronically connecting libraries with inte-
grated career center systems designated or estab-
lished under section 107 and local service providers
receiving grants under paragraph (1) or (2) of sec-
tion 432(a).
(2) Establishing or enhancing linkages among
libraries.
(3) Assisting libraries in accessing information
through electronic networks.
(4) Encouraging libraries in different Federal,
State, and local jurisdictions, and different types of
libraries, to establish consortia and share resources.
(5) Paying costs for libraries to acquire or
share computer systems and telecommunications
technologies.
(6) Improving library and information services
for individuals who have difficulty using a library or
who need special library materials or services, in-
cluding individuals under the age of 18.
186
(b) ADMINISTRATIVE EXPENSES.—In any fiscal year,
a State library administrative agency may use not more
than 3 percent of the funds provided to the agency under
section 454(a)(2)(A) for planning, administration, evalua-
tions, and interagency coordination associated with a
grant under this subtitle.
SEC. 456. ANNUAL APPLICATIONS.
(a) SUBMISSION.—A State that desires to receive a
grant under this subtitle for a fiscal year shall submit to
the Secretary, in such form and manner and before such
deadline as the Secretary shall specify in regulations, an
application for such year. Such application shall—
(1) establish goals, and specify priorities, for
the State consistent with the purposes of this sub-
title;
(2) describe activities that are consistent with
such goals and priorities, the purposes of this sub-
title, and the requirements of section 455 that the
State library administrative agency will carry out
during such year using such grant;
(3) describe the procedures that such agency
will use to carry out such activities;
(4) describe the methodology that such agency
will use to evaluate the success of such activities in
achieving such goals and meeting such priorities;
187
(5) describe procedures that such agency will
use to involve libraries and library users throughout
the State in policy decisions regarding implementa-
tion of this subtitle; and
(6) provide assurances satisfactory to the Sec-
retary that such agency will make such reports, in
such form and containing such information, as the
Secretary may reasonably require to carry out this
subtitle and to determine the extent to which funds
provided under this subtitle have been effective in
carrying out its purposes.
(b) APPROVAL.—
(1) IN GENERAL.—The Secretary shall approve
each application submitted under subsection (a) that
satisfies the requirements of the subsection.
(2) RIGHTS OF STATES UPON DISAPPROVAL.—
If the Secretary determines that an application sub-
mitted by a State under subsection (a) does not sat-
isfy the requirements of such subsection, the Sec-
retary shall—
(A) immediately notify the State of such
determination and the reasons for such deter-
mination; and
(B) offer the State an opportunity to re-
vise its application to correct any deficiencies.
188
TITLE V—MISCELLANEOUS
PROVISIONS
SEC. 501. EFFECT ON REHABILITATION ACT OF 1973.
Notwithstanding any other provision of this Act, this
Act does not have any legal effect on any program under
the Rehabilitation Act of 1973.
TITLE VI—HIGHER EDUCATION
PRIVATIZATION
SEC. 601. 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.) is amend-
ed 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-