213
‘‘(D) A plan under subparagraph (A) is not re-
quired for an individual if the individual signs a
waiver stating that such a plan is not necessary for
the individual.
‘‘(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, including
representatives of the client assistance program
under section 510.
‘‘(B) Representatives of business, industry,
and labor.
214
‘‘(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
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.
215
‘‘(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.
‘‘(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
216
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.
‘‘(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,
217
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-
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
218
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.
‘‘(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.
219
‘‘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.
‘‘(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-
220
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
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
221
(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 Rehabilitation
Act for the fiscal year ending June 30, 1973, such State
shall be entitled to an additional payment (subject to the
same terms and conditions applicable to other payments
under this title) equal to the difference between the pay-
ment under this section and the amount so received by
it.
‘‘(2) If a State receives as its Federal share pursuant
to this section for any fiscal year less than the applicable
Federal share of the expenditure of such State for fiscal
year 1972 for vocational rehabilitation services under the
plan for such State approved under section 101 as in ef-
fect for such year (including any amount expended by such
State for the administration of the State plan but exclud-
ing any amount expended by such State from non-Federal
sources for construction under such plan), such State shall
be entitled to an additional payment for such fiscal year,
subject to the same terms and conditions applicable to
222
other payments under this title, equal to the difference
between such payment pursuant to this section and an
amount equal to the applicable Federal share of such ex-
penditure for vocational rehabilitation services.
‘‘(3) Any payment attributable to the additional pay-
ment to a State under this subsection shall be made only
from appropriations specifically made to carry out this
subsection, and such additional appropriations are hereby
authorized.
‘‘SEC. 108. STATE OPTION FOR WAIVERS REGARDING AL-
TERNATIVE DELIVERY SYSTEMS.
‘‘(a) IN GENERAL.—In the case of the requirements
specified in subsection (b), the Secretary shall provide to
a State a waiver of such requirements as the State elects,
if (subject to the other provisions of this section) the fol-
lowing conditions are met:
‘‘(1) The Governor, through the collaborative
process under section 103 of the Consolidated and
Reformed Education, Employment, and Rehabilita-
tion Systems Act, develops a proposed plan for alter-
native approaches (to be implemented by the State
in lieu of the requirements involved).
‘‘(2) The proposal is approved by each local
workforce 
development 
board 
in 
whose 
local
223
workforce development area the proposal (or any
component of the proposal) is to be effective.
‘‘(3) The local workforce development boards
involved, and the Governor, determine that the fol-
lowing conditions have been met:
‘‘(A) The proposal will better fulfill the
purposes of this title than would compliance
with the requirements involved.
‘‘(B) In the development of the alternative
approaches, the public was afforded a reason-
able opportunity to comment on the proposed
alternative approaches.
‘‘(4) The Governor submits to the Secretary the
following documents:
‘‘(A) A notification that the State is elect-
ing to receive a waiver under this section.
‘‘(B) A copy of the plan involved.
‘‘(C) Such documents as the Secretary
may require for purposes of verifying that the
conditions 
established 
in 
paragraphs 
(1)
through (3) have been met.
‘‘(b) CERTAIN REQUIREMENTS REGARDING STATE
ADMINISTRATIVE STRUCTURE FOR DELIVERY OF SERV-
ICES.—The requirements referred to in subsection (a) are
as follows:
224
‘‘(1) The allocation under section 102 of
amounts between State administrative agents and
local workforce development boards.
‘‘(2) The allocation under sections 103 and 104
of responsibilities between State administrative
agents and local workforce development boards (in-
cluding the use of integrated career center systems
to provide vocational rehabilitation services).
‘‘(3) The specification under section 103(a) of
the State officials who are to administer the require-
ments of section 103.
‘‘(c) APPLICABILITY OF WAIVER; REVIEW AND REVI-
SION OF PLAN.—
‘‘(1) APPLICABILITY.—A waiver under sub-
section (a) is effective for a fiscal year only if the
documents under paragraph (4) of such subsection
are submitted to the Secretary not later than 60
days before the beginning of the fiscal year.
‘‘(2) REVIEW OF PLAN.—A waiver under sub-
section (a) is effective for such fiscal years as the
State involved elects, except that, not less than once
during each period of three fiscal years, the plan
under the waiver is required (as a condition of the
waiver remaining in effect) to be reviewed, and ap-
proved, by the Governor (through the collaborative
225
process referred to in such subsection) and by the
local workforce development boards involved.
‘‘(3) REVISION OF PLAN.—The plan under a
waiver under subsection (a) may be revised. Such
subsection applies to such a revision to the same ex-
tent and in the same manner as the subsection ap-
plies to the original plan.
‘‘(d) PERFORMANCE ACCOUNTABILITY SYSTEM.—A
waiver under subsection (a) for a State does not, with re-
spect to carrying out the program under this title in the
State, affect the applicability to the State of section 110
of the Consolidated and Reformed Education, Employ-
ment, and Rehabilitation Systems Act.’’.
(b) CERTAIN FUNDING PROVISION.—Effective Octo-
ber 1, 1995, the Rehabilitation Act of 1973 (29 U.S.C.
701 et seq.) is amended by inserting after section 3 the
following section:
‘‘AVAILABILITY OF FUNDS
‘‘SEC. 3A. Notwithstanding any other provision of
law, funding to carry out titles II through VII for any
fiscal year is available only to such extent and in such
amounts as may be provided in advance in appropriations
Acts.’’.
(c) CONFORMING AMENDMENTS.—Effective October
1, 1995, the Rehabilitation Act of 1973 (29 U.S.C. 701
226
et seq.) is amended in the table of contents in the first
section—
(1) by inserting after the item relating to sec-
tion 3 the following item:
‘‘Sec. 3A. Availability of funds.’’;
(2) by striking the items relating to sections
100 through 109, to sections 110 through 112, to
sections 120 through 124, to section 130, and to
sections 140 and 141;
(3) by striking the items relating to the title
designation and heading for title I, and to the part
designations and headings for parts A, B, C, D, and
E of title I;
(4) by inserting after the item relating to sec-
tion 21 the following items:
‘‘TITLE I—VOCATIONAL REHABILITATION SERVICES
‘‘Sec. 100. Purpose.
‘‘Sec. 101. Formula grants.
‘‘Sec. 102. Allocation within State of administrative responsibilities.
‘‘Sec. 103. Responsibilities of State administrative agent.
‘‘Sec. 104. Responsibilities for local boards and service centers.
‘‘Sec. 105. Eligible individual.
‘‘Sec. 106. State Rehabilitation Advisory Council.
‘‘Sec. 107. Amount of allotment.
‘‘Sec. 108. State option for waivers regarding alternative delivery systems.’’;
and
(5) by inserting after the item relating to sec-
tion 509 the following item:
‘‘Sec. 510. Client assistance program.’’.
227
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—
(i) by striking subsections (c) and (f);
and
(ii) by redesignating subsections (d)
and (e) as subsections (c) and (d), respec-
tively;
(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 (e); and
(C) by inserting such subsection at the end of
section 311 (as amended by paragraph (1)(C) of this
subsection);
228
(3)(A) by transferring subsection (g) of section
802 from the current placement of the subsection;
(B) by redesignating such subsection as sub-
section (f); and
(C) by inserting such subsection at the end of
section 311 (as amended by paragraph (2)(C) of this
subsection);
(4)(A) by transferring subsection (c) of section
803 from the current placement of the subsection;
(B) by redesignating such subsection as sub-
section (g); and
(C) by inserting such subsection at the end of
section 311 (as amended by paragraph (3)(C) of this
subsection);
(5)(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 subsection at the end of
section 302; and
(6) by striking the remaining provisions of title
VIII.
(b) CONFORMING AMENDMENTS.—Effective October
1, 1995, the Rehabilitation Act of 1973 (29 U.S.C. 701
229
et seq.) is amended in the table of contents in the first
section—
(1) by striking the items relating to sections
303, 304, 312, and 316;
(2) by striking the items relating to sections
801 through 803 of title VIII; and
(3) by striking the item relating to the title des-
ignation and heading for title VIII.
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;
(3) by striking part D; and
(4) in part B, by striking the part designation
and heading.
(b) PROJECTS WITH INDUSTRY.—Effective October
1, 1998, title VI of the Rehabilitation Act of 1973, as
amended by subsection (a) of this section, is repealed.
(c) CONFORMING AMENDMENTS.—Effective October
1, 1995, the Rehabilitation Act of 1973 (29 U.S.C. 701
et seq.) is amended in the table of contents in the first
section by striking the items relating to sections 611
230
through 617, to sections 631 through 638, and to section
641; and by striking the items relating to the part des-
ignations and headings for parts A, B, C, and D of title
VI. Effective October 1, 1998, such table of contents is
amended by striking the items relating to sections 621
through 623; and by striking the item relating to the title
designation and heading for title VI.
SEC. 523. CERTAIN AMOUNTS.
(a) AMOUNTS REGARDING FISCAL YEAR 1996.—
With respect to the aggregate amount that was available
for fiscal year 1995 as direct spending for carrying out
the programs under section 311(c), section 316, and part
C of title VI of the Rehabilitation Act of 1973 (as such
provisions were in effect for such fiscal year), an amount
equal to such aggregate amount is hereby made available
for fiscal year 1996 as direct spending for carrying out
title I of such Act (in addition to the amount of direct
spending that otherwise is available for such title I for
fiscal year 1996).
(b) AMOUNTS REGARDING FISCAL YEAR 1999.—
With respect to the amount made available in appropria-
tions Act for fiscal year 1998 for carrying out title VI
of the Rehabilitation Act of 1973 (as such title was in
effect for such fiscal year), an amount equal to such
amount is hereby made available for fiscal year 1999 as
231
direct spending for carrying out title I of such Act (in
addition to the amount of direct spending that otherwise
is available for such title I for fiscal year 1999).
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-
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-
232
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
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.—
233
‘‘(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, and the Association shall con-
tinue to carry out the purposes of such section. The
Holding Company and its affiliates other than the
Association shall not be entitled to any of the rights,
privileges and obligations, and shall not be subject to
the limitations and restrictions, applicable to the As-
sociation under section 439 of this Act as in effect
on the effective date of this section, except as spe-
cifically provided in this section. The Holding Com-
pany and its subsidiaries (other than the Associa-
tion) shall not purchase loans insured under this Act
until such time as the Association ceases acquiring
such loans, except that the Association shall con-
tinue to acquire loans as a lender of last resort pur-
suant to section 439(q) of this Act or under an
agreement with the Secretary described in section
440(c)(6).
‘‘(2) TRANSFER OF CERTAIN PROPERTY.—Ex-
cept as specifically provided in this section, at the
234
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
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
235
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
the Association again complies with the capital
standards.
‘‘(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-
236
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 program assets described
in section 439(d) of the Act other than—
‘‘(A) in connection with (i) student loan
purchases through September 30, 2003, and (ii)
contractual 
commitments 
for 
future
warehousing advances or pursuant to letters of
credit or standby bond purchase agreements
which are outstanding as of the reorganization
effective date;
‘‘(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, enters into an agreement with the Associa-
tion for the continuation or resumption of its
secondary market purchase program because
237
the Secretary determines there is inadequate li-
quidity for loans made under this part.
The Secretary is authorized to enter into an agree-
ment described in subparagraph (C) with the Asso-
ciation covering such 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) ISSUANCE OF DEBT OBLIGATIONS DURING
THE TRANSITION PERIOD; ATTRIBUTES OF DEBT OB-
LIGATIONS.—After the reorganization effective date,
the Association shall not issue debt obligations which
mature later than September 30, 2007, except in
connection with serving as a lender-of-last-resort
pursuant to section 439 of this Act or with purchas-
ing loans under an agreement with the Secretary as
described in paragraph (6) of this subsection. Noth-
ing in this subsection shall modify the attributes ac-
corded the debt obligations of the Association by sec-
tion 439, regardless of whether such debt obligations
are incurred prior to, or at any time following, the
238
reorganization effective date or 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-
cerning (i) the financial risk to the Association
resulting from the activities of any of its associ-
ated persons, to the extent such activities are
reasonably likely to have a material impact on
the financial condition of the Association, in-
cluding its capital ratio, its liquidity, or its abil-
ity to conduct and finance its operations, and
(ii) the Association’s policies, procedures, and
systems for monitoring and controlling any
such financial risk. 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
239
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) SEPARATE OPERATION OF CORPORA-
TIONS.—
‘‘(i) The funds and assets of the Asso-
ciation shall at all times be maintained
separately from the funds and assets of the
Holding Company or any of its other sub-
sidiaries and may be used solely by the As-
sociation to carry out its purposes and to
fulfill its obligations.
‘‘(ii) The Association shall maintain
books and records that clearly reflect the
assets and liabilities of the Association,
separate from the assets and liabilities of
the Holding Company or any of its other
subsidiaries.
‘‘(iii) The Association shall maintain a
corporate office that is physically separate
240
from any office of the Holding Company or
any of its subsidiaries.
‘‘(iv) No director of the Association
that is appointed by the President pursu-
ant to section 439(c)(1)(A) may serve as a
director of the Holding Company.
‘‘(v) At least one officer of the Asso-
ciation shall remain an officer solely of the
Association.
‘‘(vi) Transactions between the Asso-
ciation and the Holding Company or its
other subsidiaries, including any loan serv-
icing arrangements, shall be on terms no
less favorable to the Association than the
Association could obtain from an unrelated
third party offering comparable services.
‘‘(vii) The Association shall not extend
credit to the Holding Company or any of
its affiliates, nor guarantee or provide any
credit enhancement to any debt obligations
of the Holding Company or any of its af-
filiates.
‘‘(viii) Any amounts collected on be-
half of the Association by the Holding
Company or any of its other subsidiaries
241
with respect to the assets of the Associa-
tion, pursuant to a servicing contract or
other arrangement between the Association
and the Holding Company or any of its
other direct or indirect subsidiaries, shall
be collected solely for the benefit of the As-
sociation and shall be immediately depos-
ited by the Holding Company or such
other subsidiary to an account under the
sole control of the Association.
‘‘(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-
trary, under no circumstances shall the assets
of the Association be available or used to pay
claims or debts of or incurred by the Holding
Company. Nothing in this subparagraph shall
limit the right of the Association to pay divi-
dends not otherwise prohibited hereunder or
limit any liability of the Holding Company ex-
plicitly provided for in this part.
‘‘(D) HOLDING
COMPANY
ACTIVITIES.—
After the reorganization effective date and prior
to the dissolution of the Association in accord-
242
ance with section 440(d), Holding Company ac-
tivities shall be limited to ownership of the As-
sociation and any other subsidiaries. All busi-
ness activities shall be conducted through sub-
sidiaries.
‘‘(9) ASSOCIATION
BOARD
OF
DIRECTORS.—
Notwithstanding any other provision of part B of
this title, after the reorganization effective date, the
14 directors of the Association elected by the Asso-
ciation’s stockholders (which immediately after the
reorganization effective date shall be the Holding
Company) shall no longer be required to meet the
eligibility requirements set forth in section 439(c).
‘‘(10) ISSUANCE OF STOCK WARRANTS.—At the
reorganization effective date, the Holding Company
shall issue to the Secretary of the Treasury 200,000
stock warrants, each entitling the holder of the stock
warrant to purchase from the Holding Company one
share of the registered common stock of the Holding
Company at any time on or before September 30,
2007. The exercise price for such warrants shall be
an amount equal to the average closing price of the
common stock of the Association for the 20 business
days prior to and including the date of enactment of
this section on the exchange or market which is then
243
the primary exchange or market for the common
stock of the Association, subject to any adjustments
necessary to reflect the conversion of Association
common stock into Holding Company common stock
as part of the plan of reorganization approved by
the Association’s shareholders.
‘‘(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 liquidation of the Associa-
tion or cause the Association to file a petition for
bankruptcy under title 11, United States Code, with-
out prior approval of the Secretary of the Treasury
and the Secretary of Education.
‘‘(d) TERMINATION OF THE ASSOCIATION.—The As-
sociation shall dissolve, and its separate existence shall
terminate on September 30, 2007, after discharge of all
outstanding debt obligations and liquidation pursuant to
this subsection. The Association may dissolve pursuant to
this subsection prior to such date by notifying the Sec-
retary of Education and the Secretary of the Treasury of
its intention to dissolve, unless within 60 days of receipt
of such notice the Secretary of Education notifies the As-
244
sociation that it continues to be needed to serve as a lend-
er 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 subsection
(c)(6) of this section. On the dissolution date, the Associa-
tion 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
Secretary of the Treasury, the Association and the
appointed trustee, irrevocably transfer all remaining
obligations of the Association to the trust and irrev-
ocably deposit or cause to be deposited into such
trust, to be held as trust funds solely for the benefit
of holders of the remaining obligations, money or di-
rect noncallable obligations of 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 determined
by the Secretary of the Treasury to be sufficient,
without consideration of any significant reinvestment
of such interest, to pay the principal of, and interest
on, the remaining obligations in accordance with
their terms. To the extent the Association cannot
245
provide money or qualifying obligations in the
amount required, the Holding Company shall be re-
quired to transfer money or qualifying obligations to
the trust in the amount necessary to prevent any de-
ficiency.
‘‘(2) USE OF TRUST ASSETS.—All money, obli-
gations, or financial assets deposited into the trust
pursuant to this subsection shall be applied by the
trustee to the payment of the remaining obligations
assumed by the trust. Upon the fulfillment of the
trustee’s duties under the trust, any remaining as-
sets of the trust shall be transferred to the Holding
Company or its subsidiaries, or both, as directed by
the Holding Company.
‘‘(3) OBLIGATIONS NOT TRANSFERRED TO THE
TRUST.—The Association shall make proper provi-
sion for all other obligations of the Association, in-
cluding the repurchase or redemption, or the making
of proper provision for the repurchase or redemp-
tion, of any preferred stock of the Association then
outstanding. Any obligations of the Association
which cannot be fully satisfied shall become liabil-
ities of the Holding Company as of the date of dis-
solution.
246
‘‘(4) TRANSFER OF REMAINING ASSETS.—After
compliance with paragraphs (1), and (3), the Asso-
ciation shall transfer to the Holding Company any
remaining assets of the Association.
‘‘(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 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 applicable State or District of Columbia law,
‘Sallie Mae’, or variations thereof or such other
names as the Board of Directors of the Associa-
tion of the Holding Company shall deem appro-
priate.
247
‘‘(3) USE OF SALLIE MAE NAME.—Without lim-
iting paragraph (2), the Association may assign to
the Holding Company, or any other subsidiary of the
Holding Company, the ‘Sallie Mae’ name as a trade-
mark and service mark, except that neither the
Holding Company nor any subsidiary of the Holding
Company other than the Association or a subsidiary
of the Association may use the ‘Sallie Mae’ name on,
or to identify the issuer of, any debt obligation or
other security offered or sold by the Holding Com-
pany or any such subsidiary. The Association shall
remit to the Secretary of Treasury $5,000,000 dur-
ing fiscal year 1996 as compensation for the right
to assign such trademark or service mark.
‘‘(4) DISCLOSURE
REQUIRED.—Until 3 years
after the dissolution date, the Holding Company,
and any subsidiary of the Holding Company other
than the Association, shall prominently display—
‘‘(A) in any document offering its securi-
ties, that the obligations of the Holding Com-
pany and any such subsidiary are not guaran-
teed by the full faith and credit of the United
States; and
‘‘(B) in any advertisement or promotional
materials which use the ‘Sallie Mae’ name or
248
mark, a statement that neither the Holding
Company nor any such subsidiary is a Govern-
ment-sponsored enterprise or instrumentality of
the United States.
‘‘(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
Company as a State or District of Columbia chartered cor-
poration.
‘‘(g) RIGHT TO ENFORCE.—The Secretary of Edu-
cation or the Secretary of the Treasury, as appropriate,
may request the Attorney General of the United States
to bring an action in the United States District Court for
the District of Columbia for the enforcement of any provi-
sions of this section, or may, under the direction or control
of the Attorney General, bring such an action. Such court
shall have jurisdiction and power to order and require
compliance with this section.
‘‘(h) 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.
‘‘(i) DEFINITIONS.—For purposes of this section:
249
‘‘(1) The term ‘Association’ means the Student
Loan Marketing Association.
‘‘(2) The term ‘dissolution date’ shall mean
September 30, 2007, 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
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
250
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.
‘‘(7) The term ‘reorganization’ means the re-
structuring event or events (including any merger
event) giving effect to the holding company structure
described in subsection (a) of this section.
‘‘(8) The term ‘subsidiary’ or ‘subsidiaries’ shall
mean one or more direct or indirect subsidiaries of
the Holding Company.’’.
(b) TECHNICAL AMENDMENTS.—
251
(1) AMENDMENTS TO THE HIGHER EDUCATION
ACT.—Effective on the reorganization effective date
(as defined in section 440(h)(3) of the Higher Edu-
cation Act of 1965, as added by subsection (a))—
(A) section 435(d)(1)(F) of such Act (20
U.S.C. 1085(d)(1)(F)) is amended by inserting
after ‘‘Student Loan Marketing Association’’
the following: ‘‘or the Holding Company of the
Student Loan Marketing Association, including
all subsidiaries of such Holding Company, cre-
ated pursuant to section 440 of this Act,’’; and
(B) 
sections 
435(d)(1)(G) 
and
428C(a)(1)(A) 
of 
such 
Act 
(20 
U.S.C.
1085(d)(1)(G); 
1078–3(a)(1)(A)) 
are 
each
amended by inserting after ‘‘Student Loan
Marketing Association’’ the following: ‘‘or the
Holding Company of the Student Loan Market-
ing Association, including all subsidiaries of
such Holding Company, created pursuant to
section 440 of this Act’’.
(2) ENFORCEMENT
OF
SAFETY
AND
SOUND-
NESS REQUIREMENTS.—Section 439(r) of the High-
er Education Act of 1965 (20 U.S.C. 1087–2(r)) is
amended—
252
(A) by redesignating paragraph (13) as
paragraph (15); and
(B) by inserting after paragraph (12) the
following new paragraph:
‘‘(13) ENFORCEMENT OF SAFETY AND SOUND-
NESS REQUIREMENTS.—The Secretary of Education
or the Secretary of the Treasury, as appropriate,
may request the Attorney General of the United
States to bring an action in the United States Dis-
trict Court for the District of Columbia for the en-
forcement of any provisions of this subsection, or
may, under the direction or control of the Attorney
General, bring such an action. Such court shall have
jurisdiction and power to order and require compli-
ance with this subsection.’’.
(3) CAPITAL
RATIO
AMENDMENTS.—Section
439(r) of the Higher Education Act of 1965 is fur-
ther amended—
(A) in paragraph (1)—
(i) by striking ‘‘and’’ at the end of
subparagraph (A);
(ii) by striking the period at the end
of subparagraph (B) and inserting ‘‘;
and’’; and
253
(iii) by adding at the end the follow-
ing new subparagraph:
‘‘(C) within 45 days of the end of each fis-
cal quarter, (i) financial statements of the Asso-
ciation, and (ii) a report setting forth the cal-
culation of the capital ratio of the Associa-
tion.’’;
(B) in paragraph (11), by striking ‘‘para-
graphs (4) and (6)(A)’’ and inserting ‘‘para-
graphs (4), (6)(A), and (14)’’; and
(C) by inserting after paragraph (13) (as
added by paragraph (2) of this subsection) the
following new paragraph:
‘‘(14) ACTIONS BY SECRETARY.—If the share-
holders of the Association shall have approved a re-
organization plan in accordance with section 440(b)
and, for any fiscal quarter ended after January 1,
2000, the Association shall have a capital ratio of
less than 2.25 percent, the Secretary of the Treas-
ury may, until such capital ratio is met, take any
one or more of the actions described in paragraph
(7), except that—
‘‘(A) the capital ratio to be restored pursu-
ant to paragraph (7)(D) shall be 2.25 percent;
and
254
‘‘(B) if the relevant capital ratio is in ex-
cess of or equal to 2 percent for such quarter,
the Secretary of the Treasury shall defer taking
any of the actions set forth in paragraph (7)
until the next succeeding quarter and may then
proceed with any such action only if the capital
ratio of the Association remains below 2.25 per-
cent.
Upon approval by the shareholders of the Associa-
tion of a reorganization plan in accordance with sec-
tion 440(b) for any period after January 1, 2000,
the provisions of paragraphs (4), (5), (6), (8), (9),
and (10) shall be of no further application to the As-
sociation.’’.
(4) REPEAL
OF
THE
ASSOCIATION’S
CHAR-
TER.—Effective on the dissolution date (as defined
in section 440(h)(2) of the Higher Education Act of
1965, as added by subsection (a)), section 439 of
such Act (20 U.S.C. 1087–2) is repealed.
SEC. 602. 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.—
255
(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
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-
256
ment offering the Corporation’s securities, in any
contracts for insurance, guarantee, or reinsurance of
obligations, and in any advertisement or promotional
material, a statement 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’’.
(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
257
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-
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
258
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 make every effort to sell, pursu-
ant 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
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 firms.
Such firms shall be selected by the Secretary of the
259
Treasury in consultation with the Secretary of Edu-
cation and the Corporation.
(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).
TITLE VII—REPEALERS AND
OTHER AMENDMENTS
SEC. 701. 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.
260
(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 an early
awareness information program.
(8) Chapter 8 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–81), relating to technical assist-
ance for teachers and counselors.
(9) Subpart 8 of part A of title IV (20 U.S.C.
1070f), relating to special child care services for dis-
advantaged college students.
(10) Section 428J (20 U.S.C. 1078–10), relat-
ing to loan forgiveness for teachers, individuals per-
forming national community service and nurses.
(11) Section 486 (20 U.S.C. 1093), relating to
training in financial aid services.
(12) Subpart 1 of part H of title IV (20 U.S.C.
1099a et seq.) relating to State postsecondary re-
view entity programs.
261
(13) Part A of title V (20 U.S.C. 1102 et seq.),
relating to State and local programs for teacher ex-
cellence.
(14) Part B of title V (20 U.S.C. 1103 et seq.),
relating to national teacher academies.
(15) Subpart 1 of part C of title V (20 U.S.C.
1104 et seq.), relating to Douglas teacher scholar-
ships.
(16) Subpart 3 of part C of title V (20 U.S.C.
1106 et seq.), relating to the teacher corps.
(17) Subpart 3 of part D of title V (20 U.S.C.
1109 et seq.), relating to class size demonstration
grants.
(18) Subpart 4 of part D of title V (20 U.S.C.
1110 et seq.), relating to middle school teaching
demonstration programs.
(19) Subpart 1 of part E of title V (20 U.S.C.
1111 et seq.), relating to new teaching careers.
(20) Subpart 1 of part F of title V (20 U.S.C.
1113 et seq.), relating to the national mini corps
programs.
(21) Section 586 (20 U.S.C. 1114), relating to
demonstration grants for critical language and area
studies.
262
(22) Section 587 (20 U.S.C. 1114a), relating to
development of foreign languages and cultures in-
structional materials.
(23) Subpart 3 of part F of title V (20 U.S.C.
1115), relating to small State teaching initiatives.
(24) Subpart 4 of part F of title V (20 U.S.C.
1116), relating to faculty development grants.
(25) Section 597 and section 599(b) (20 U.S.C.
1117a, 1117c(b)), relating to early childhood staff
training and professional enhancement.
(26) Section 605 (20 U.S.C. 1124a), relating to
intensive summer language institutes.
(27) Section 607 (20 U.S.C. 1125a), relating to
foreign language periodicals.
(28) Part A of title VII (20 U.S.C. 11326 et
seq.), relating to academic and library facilities.
(29) Title VIII (20 U.S.C. 1133 et seq.), relat-
ing to cooperative education programs.
(30) Part A of title IX (20 U.S.C. 1134a et
seq.), relating to women and minority participation
in graduate education.
(31) Part B of title IX (20 U.S.C. 1134d et
seq.), relating to Harris fellowships.
(32) Part C of title IX (20 U.S.C. 1134h et
seq.), relating to Javits fellowships.
263
(33) Part E of title IX (20 U.S.C. 1134r et
seq.), relating to the faculty development fellowship
program.
(34) Part F of title IX (20 U.S.C. 1134s et
seq.), relating to legal training for the disadvan-
taged.
(35) Part G of title IX (20 U.S.C. 1134u et
seq.), relating to law school clinical programs.
(36) Section 1011 (20 U.S.C. 1135a–11), relat-
ing to special projects in areas of national need.
(37) Subpart 2 of part B of title X (20 U.S.C.
1135c et seq.), relating to science and engineering
access programs.
(38) Part C of title X (20 U.S.C. 1135e et
seq.), relating to women and minorities science and
engineering outreach demonstration programs.
(39) Part D of title X (20 U.S.C. 1135f), relat-
ing to Eisenhower leadership programs.
(40) 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 Higher Education
Amendments of 1986 are repealed:
266
(5) in section 487(c)(1)(A)(i), by striking
‘‘State agencies, and the State review entities re-
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
267
(C) by redesignating subparagraph (G) as
subparagraph (F); and
(13) in section 498A(a)(3)—
(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. 702. ELIGIBLE INSTITUTION.
(a) AMENDMENTS.—Section 481(b) of the Higher
Education Act of 1965 (20 U.S.C. 1088(b)) is amended—
(1) by inserting before the period at the end of
the first sentence the following: ‘‘on the basis of a
review by the institution’s independent auditor using
generally accepted accounting principles’’; and
(2) by inserting after the end of such first sen-
tence the following new sentences: ‘‘For the purposes
of clause (6), revenues from sources that are not de-
rived from funds provided under this title include
revenues from programs of education or training
that do not meet the definition of an eligible pro-
gram in subsection (e), but are provided on a con-
tractual basis under Federal, State, or local training
programs, or to business and industry. For the pur-
poses of determining whether an institution meets
268
the requirements of clause (6), the Secretary shall
not consider the financial information of any institu-
tion for a fiscal year began on or before April 30,
1994.’’.
(b) EFFECTIVE DATE.—Notwithstanding section 713
of this Act, the amendments made by subsection (a) shall
apply to any determination made on or after July 1, 1994,
by the Secretary of Education pursuant to section
481(b)(6) of the Higher Education Act of 1965.
SEC. 703. 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. 704. SMITH-HUGHES ACT.
(a) REPEAL.—The Smith-Hughes Act (39 Stat. 929
as amended (20 U.S.C. 11–15, 16–28)) is repealed.
(b) EFFECTIVE DATE.—Notwithstanding section 713
of this Act, the repeal in subsection (a) of this section shall
take effect on October 1, 1995.
SEC. 705. SCHOOL-TO-WORK OPPORTUNITIES ACT OF 1994.
The School-to-Work Opportunities Act of 1994 (20
U.S.C. 6101 et seq.) is repealed.
269
SEC. 706. SCHOOL DROPOUT ASSISTANCE ACT.
The School Dropout Assistance Act, (part C of title
V of the Elementary and Secondary Education Act (20
U.S.C. 7261)) is repealed.
SEC. 707. 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
(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
270
striking ‘‘section 312 of the Adult Education Act;’’
and inserting ‘‘section 5 of the CAREERS Act;’’;
SEC. 708. NATIONAL LITERACY ACT.
The National Literacy Act of 1991, except section
101 of such Act, is repealed.
SEC. 709. 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. 710. TECHNOLOGY FOR EDUCATION ACT OF 1994.
Part F of the Technology for Education Act of 1994
(contained in title III of the Elementary and Secondary
Education Act (20 U.S.C. 7001 et seq.)) is repealed.
SEC. 711. JOB TRAINING PARTNERSHIP ACT.
(a) IN GENERAL.—The Job Training Partnership
Act (29 U.S.C. 1501 et seq.), except section 1, sections
421 through 439 (relating to the Job Corps), and section
441 of such Act (relating to veterans’ employment pro-
grams), is hereby repealed.
(b) CONFORMING AMENDMENTS.—