[Pages H10783-H10802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

GOVERNMENT-SPONSORED ENTERPRISE PRIVATIZATION ACT OF 1996

Mr. McKEON. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 1720) to amend the Higher Education Act of 1965 to provide
for the cessation of Federal sponsorship of two Government-sponsored
enterprises, and for other purposes, as amended.
The Clerk read as follows:

H.R. 1720

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the
``Government-Sponsored Enterprise Privatization Act of
1996''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--REORGANIZATION AND PRIVATIZATION

Sec. 101. Reorganization of the Student Loan Marketing Association
through the formation of a holding company.
Sec. 102. Connie Lee privatization.
Sec. 103. Eligible institution.

TITLE II--MUSEUMS AND LIBRARIES

Sec. 201. Museum and library services.
Sec. 202. National Commission on Libraries and Information Science.
Sec. 203. Transfer of functions from Institute of Museum Services.
Sec. 204. Service of individuals serving on date of enactment.
Sec. 205. Consideration.
Sec. 206. Transition and transfer of funds.

TITLE III--EXTENSION OF PROGRAMS

Sec. 301. Extension of National Literacy Act of 1991.
Sec. 302. Adult Education Act Amendments.
Sec. 303. Extension of Carl D. Perkins Vocational and Applied
Technology Education Act.

TITLE IV--REPEALS AND CONFORMING AMENDMENTS

Sec. 401. Repeals.
Sec. 402. Conforming amendments.
TITLE I--REORGANIZATION AND PRIVATIZATION

SEC. 101. REORGANIZATION OF THE STUDENT LOAN MARKETING
ASSOCIATION THROUGH THE FORMATION 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 amended by inserting
after section 439 (20 U.S.C. 1087-2) the following new
section:

``SEC. 440. REORGANIZATION OF THE STUDENT LOAN MARKETING
ASSOCIATION THROUGH THE FORMATION OF A HOLDING
COMPANY.

``(a) Actions by the Association's Board of Directors.--The
Board of Directors of the Association shall take or cause to
be taken all such action as the Board of Directors 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 Directors (the
terms of which shall be consistent with this section) so that
all of the outstanding common shares of the Association shall
be directly owned by a Holding Company. Such actions may
include, in the Board of Director's discretion, a merger of a
wholly owned subsidiary of the Holding Company 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 incorporated. As part of the
restructuring, the Board of Directors may cause--
``(1) the common shares of the Association to be converted,
on the reorganization effective date, to common shares of the
Holding Company on a one for one basis, consistent with
applicable State or District of Columbia law; and
``(2) Holding Company common shares to be registered with
the Securities and Exchange Commission.
``(b) Shareholder Approval.--The plan of reorganization
adopted by the Board of Directors pursuant to subsection (a)
shall be submitted to common shareholders of the Association
for their approval. The reorganization shall occur on 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.--In the event the shareholders of the
Association approve the plan of reorganization under
subsection (b), the following provisions shall apply
beginning on the reorganization effective date:
``(1) In general.--Except as specifically provided 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, and the
Association shall continue to carry out the purposes of such
section. The Holding Company and any subsidiary of the
Holding Company (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 Association under section 439, except as
specifically provided in this section. The Holding Company
and any subsidiary of the Holding Company (other than the
Association or a subsidiary of the Association) shall not
purchase loans insured under this Act until such time as the
Association ceases acquiring such loans, except that the
Holding Company may purchase such loans if the Association is
merely continuing to acquire loans as a lender of last resort
pursuant to section 439(q) or under an agreement with the
Secretary described in paragraph (6).
``(2) Transfer of certain property.--
``(A) In general.--Except as provided in this section, on
the reorganization effective date or as soon as practicable
thereafter, the Association shall use the Association's best
efforts to transfer to the Holding Company or any subsidiary
of the Holding Company (or both), as directed by the Holding
Company, all real and personal property of the

[[Page H10784]]

Association (both tangible and intangible) other than the
remaining property. Subject to the preceding sentence, such
transferred property shall include all right, title, and
interest in--
``(i) direct or indirect subsidiaries of the Association
(excluding special purpose funding companies in existence on
the date of enactment of this section and any interest in any
government-sponsored enterprise);
``(ii) contracts, leases, and other agreements of the
Association;
``(iii) licenses and other intellectual property of the
Association; and
``(iv) any other property of the Association.
``(B) Construction.--Nothing in this paragraph shall be
construed to prohibit the Association from transferring
remaining property from time to time to the Holding Company
or any subsidiary of the Holding Company, subject to the
provisions of paragraph (4).
``(3) Transfer of personnel.--On the reorganization
effective date, employees of the Association shall become
employees of the Holding Company (or any subsidiary of the
Holding Company), and the Holding Company (or any subsidiary
of the Holding Company) shall provide all necessary and
appropriate management and operational support (including
loan servicing) to the Association, as requested by the
Association. The Association, however, may obtain such
management and operational support from persons or entities
not associated with the Holding Company.
``(4) Dividends.--The Association may pay dividends in the
form of cash or noncash distributions 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
Association's capital would be in compliance with the capital
standards and requirements set forth in section 439(r). If,
at any time after the reorganization effective date, the
Association fails to comply with such capital standards, the
Holding Company shall transfer with due diligence to the
Association additional capital in such amounts as are
necessary to ensure that the Association again complies with
the capital standards.
``(5) Certification prior to dividend.--Prior to the
payment of any dividend under paragraph (4), the Association
shall certify to the Secretary of the Treasury that the
payment of the dividend will be made in compliance with
paragraph (4) and shall provide copies of all calculations
needed to make such certification.
``(6) Restrictions on new business activity or acquisition
of assets by association.--
``(A) In general.--After the reorganization effective date,
the Association shall not engage in any new business
activities or acquire any additional program assets described
in section 439(d) other than in connection with--
``(i) student loan purchases through September 30, 2007;
``(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;
``(iii) the Association serving as a lender-of-last-resort
pursuant to section 439(q); and
``(iv) the Association's purchase of loans insured under
this part, if the Secretary, with the approval of the
Secretary of the Treasury, enters into an agreement with the
Association for the continuation or resumption of the
Association's secondary market purchase program because the
Secretary determines there is inadequate liquidity for loans
made under this part.
``(B) Agreement.--The Secretary is authorized to enter into
an agreement described in clause (iv) of subparagraph (A)
with the Association covering such secondary market
activities. Any agreement entered into under such clause
shall cover a period of 12 months, but may be renewed if the
Secretary determines that liquidity remains 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 obligations.--After the
reorganization effective date, the Association shall not
issue debt obligations which mature later than September 30,
2008, except in connection with serving as a lender-of-last-
resort pursuant to section 439(q) or with purchasing loans
under an agreement with the Secretary as described in
paragraph (6). Nothing in this section shall modify the
attributes accorded the debt obligations of the Association
by section 439, regardless of whether such debt obligations
are incurred prior to, or at any time following, the
reorganization effective date or are transferred to a trust
in accordance with subsection (d).
``(8) Monitoring of safety and soundness.--
``(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 concerning--
``(i) the financial risk to the Association resulting from
the activities of any associated person, to the extent such
activities are reasonably likely to have a material impact on
the financial condition of the Association, including the
Association's capital ratio, the Association's liquidity, or
the Association's ability to conduct and finance the
Association's operations; and
``(ii) the Association's policies, procedures, and systems
for monitoring and controlling any such financial risk.
``(B) Summary reports.--The Secretary of the Treasury may
require summary reports of the information described in
subparagraph (A) to be filed no more frequently than
quarterly. If, as a result of adverse market conditions or
based on reports provided pursuant to this subparagraph or
other available information, the Secretary of the Treasury
has concerns regarding the financial or operational condition
of the Association, the Secretary of the Treasury may,
notwithstanding the preceding sentence and subparagraph (A),
require the Association to make reports concerning the
activities of any associated person whose business activities
are reasonably likely to have a material impact on the
financial or operational condition of the Association.
``(C) Separate operation of corporations.--
``(i) In general.--The funds and assets of the Association
shall at all times be maintained separately from the funds
and assets of the Holding Company or any subsidiary of the
Holding Company and may be used by the Association solely to
carry out the Association's purposes and to fulfill the
Association's obligations.
``(ii) Books and records.--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 subsidiary of the
Holding Company.
``(iii) Corporate office.--The Association shall maintain a
corporate office that is physically separate from any office
of the Holding Company or any subsidiary of the Holding
Company.
``(iv) Director.--No director of the Association who is
appointed by the President pursuant to section 439(c)(1)(A)
may serve as a director of the Holding Company.
``(v) One officer requirement.--At least one officer of the
Association shall be an officer solely of the Association.
``(vi) Transactions.--Transactions between the Association
and the Holding Company or any subsidiary of the Holding
Company, including any loan servicing 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) Credit prohibition.--The Association shall not
extend credit to the Holding Company or any subsidiary of the
Holding Company nor guarantee or provide any credit
enhancement to any debt obligations of the Holding Company or
any subsidiary of the Holding Company.
``(viii) Amounts collected.--Any amounts collected on
behalf of the Association by the Holding Company or any
subsidiary of the Holding Company with respect to the assets
of the Association, pursuant to a servicing contract or other
arrangement between the Association and the Holding Company
or any subsidiary of the Holding Company, shall be collected
solely for the benefit of the Association and shall be
immediately deposited by the Holding Company or such
subsidiary to an account under the sole control of the
Association.
``(D) Encumbrance of assets.--Notwithstanding any Federal
or State law, rule, or regulation, or legal or equitable
principle, doctrine, or theory to the contrary, 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 be
construed to limit the right of the Association to pay
dividends not otherwise prohibited under this subparagraph or
to limit any liability of the Holding Company explicitly
provided for in this section.
``(E) Holding company activities.--After the reorganization
effective date and prior to the dissolution date, all
business activities of the Holding Company shall be conducted
through subsidiaries of the Holding Company.
``(F) Confidentiality.--Any information provided by the
Association pursuant to this section shall be subject to the
same confidentiality obligations contained in section
439(r)(12).
``(G) Definition.--For purposes of this paragraph, the term
`associated person' means any person, other than a natural
person, who is directly or indirectly controlling, controlled
by, or under common control with, the Association.
``(9) Issuance of stock warrants.--On the reorganization
effective date, the Holding Company shall issue to the
Secretary of the Treasury a number of stock warrants that is
equal to one percent of the outstanding shares of the
Association, determined as of the last day of the fiscal
quarter preceding the date of enactment of this section, with
each stock warrant entitling the holder of the stock warrant
to purchase from the Holding Company one share of the
registered common stock of the Holding Company or the Holding
Company's successors or assigns, at any time on or before
September 30, 2008. 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 the date of enactment of this section on the
exchange or market which is then the primary exchange

[[Page H10785]]

or market for the common stock of the Association. The number
of shares of Holding Company common stock subject to each
warrant and the exercise price of each warrant shall be
adjusted as necessary to reflect--
``(A) the conversion of Association common stock into
Holding Company common stock as part of the plan of
reorganization approved by the Association's shareholders;
and
``(B) any issuance or sale of stock (including issuance or
sale of treasury stock), stock split, recapitalization,
reorganization, or other corporate event, if agreed to by the
Secretary of the Treasury and the Association.
``(10) Restrictions on transfer of association shares and
bankruptcy of association.--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
Association or cause the Association to file a petition for
bankruptcy under title 11, United States Code, without prior
approval of the Secretary of the Treasury and the Secretary
of Education.
``(d) Termination of the Association.--In the event the
shareholders of the Association approve a plan of
reorganization under subsection (b), the Association shall
dissolve, and the Association's separate existence shall
terminate on September 30, 2008, 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 Secretary of
Education and the Secretary of the Treasury of the
Association's intention to dissolve, unless within 60 days
after receipt of such notice the Secretary of Education
notifies the Association that the Association continues to be
needed to serve as a lender of last resort pursuant to
section 439(q) or continues to be needed to purchase loans
under an agreement with the Secretary described in paragraph
(6). On the dissolution date, the Association shall take the
following actions:
``(1) Establishment of a trust.--The Association shall,
under the terms of an irrevocable trust agreement that is 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 irrevocably 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 direct noncallable obligations of the
United States 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 provide
money or qualifying obligations in the amount required, the
Holding Company shall be required to transfer money or
qualifying obligations to the trust in the amount necessary
to prevent any deficiency.
``(2) Use of trust assets.--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 remaining obligations assumed by the trust.
``(3) Obligations not transferred to the trust.--The
Association shall make proper provision for all other
obligations of the Association not transferred to the trust,
including the repurchase or redemption, or the making of
proper provision for the repurchase or redemption, of any
preferred stock of the Association outstanding. Any
obligations of the Association which cannot be fully
satisfied shall become liabilities of the Holding Company as
of the date of dissolution.
``(4) Transfer of remaining assets.--After compliance with
paragraphs (1) and (3), any remaining assets of the trust
shall be transferred to the Holding Company or any subsidiary
of the Holding Company, as directed by the Holding Company.
``(e) Operation of the Holding Company.--In the event the
shareholders of the Association approve the plan of
reorganization under subsection (b), the following provisions
shall apply beginning on the reorganization effective date:
``(1) Holding company board of directors.--The number of
members and composition of the Board of Directors of the
Holding Company shall be determined 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
permitted under the laws of the jurisdiction of the Holding
Company's 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
Association or the Holding Company deems appropriate.
``(3) Use of sallie mae name.--Subject to paragraph (2),
the Association may assign to the Holding Company, or any
subsidiary of the Holding Company, the `Sallie Mae' name as a
trademark and service mark, except that neither the Holding
Company nor any subsidiary of the Holding Company (other than
the Association or any 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 Company or any subsidiary of the Holding Company
(other than a debt obligation or other security issued to and
held by the Holding Company or any subsidiary of the Holding
Company). The Association shall remit to the Secretary of the
Treasury $5,000,000 within 60 days of the reorganization
effective date 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 the Holding Company's
securities, a statement that the obligations of the Holding
Company and any subsidiary of the Holding Company are not
guaranteed 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 mark, a statement that neither
the Holding Company nor any subsidiary of the Holding Company
is a government-sponsored enterprise or instrumentality of
the United States.
``(f) Strict Construction.--Except as specifically set
forth in this section, nothing 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 corporation.
``(g) Right To Enforce.--The Secretary of Education or the
Secretary of the Treasury, as appropriate, may request that
the Attorney General bring an action in the United States
District Court for the District of Columbia for the
enforcement of any provision 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:
``(1) Association.--The term `Association' means the
Student Loan Marketing Association.
``(2) Dissolution date.--The term `dissolution date' means
September 30, 2008, or such earlier date as the Secretary of
Education permits the transfer of remaining obligations in
accordance with subsection (d).
``(3) Holding company.--The term `Holding Company' means
the new business corporation established pursuant to this
section by the Association under the laws of any State of the
United States or the District of Columbia for the purposes of
the reorganization and restructuring described in subsection
(a).
``(4) Remaining obligations.--The term `remaining
obligations' means the debt obligations of the Association
outstanding as of the dissolution date.
``(5) Remaining property.--The term `remaining property'
means the following assets and liabilities of the Association
which are outstanding as of the reorganization effective
date:
``(A) Debt obligations issued by the Association.
``(B) Contracts relating to interest rate, currency, or
commodity positions or protections.
``(C) Investment securities owned by the Association.
``(D) Any instruments, assets, or agreements described in
section 439(d) (including, without limitation, all student
loans and agreements relating to the purchase and sale of
student loans, forward purchase and lending commitments,
warehousing advances, academic facilities obligations,
letters of credit, standby bond purchase agreements,
liquidity agreements, and student loan revenue bonds or other
loans).
``(E) Except as specifically prohibited by this section or
section 439, any other nonmaterial assets or liabilities of
the Association which the Association's Board of Directors
determines to be necessary or appropriate to the
Association's operations.
``(6) Reorganization.--The term `reorganization' means the
restructuring event or events (including any merger event)
giving effect to the Holding Company structure described in
subsection (a).
``(7) Reorganization effective date.--The term
`reorganization effective date' means the effective date of
the reorganization as determined by the Board of Directors of
the Association, which shall not be earlier than the date
that shareholder approval is obtained pursuant to subsection
(b) and shall not be later than the date that is 18 months
after the date of enactment of this section.
``(8) Subsidiary.--The term `subsidiary' means one or more
direct or indirect subsidiaries.''.
(b) Technical Amendments.--
(1) Eligible lender.--
(A) Amendments to the higher education act.--
(i) Definition of eligible lender.--Section 435(d)(1)(F) of
the Higher Education Act of 1965 (20 U.S.C. 1085(d)(1)(F)) is
amended by

[[Page H10786]]

inserting after ``Student Loan Marketing Association'' the
following: ``or the Holding Company of the Student Loan
Marketing Association, including any subsidiary of the
Holding Company, created pursuant to section 440,''.
(ii) Definition of eligible lender and federal
consolidation loans.--Sections 435(d)(1)(G) and 428C(a)(1)(A)
of such Act (20 U.S.C. 1085(d)(1)(G) and 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 Marketing Association, including any subsidiary
of the Holding Company, created pursuant to section 440''.
(B) Effective date.--The amendments made by this paragraph
shall take effect on the reorganization effective date as
defined in section 440(h) of the Higher Education Act of 1965
(as added by subsection (a)).
(2) Enforcement of safety and soundness requirements.--
Section 439(r) of the Higher Education Act of 1965 (20 U.S.C.
1087-2(r)) is amended--
(A) in the first sentence of paragraph (12), by inserting
``or the Association's associated persons'' after ``by the
Association'';
(B) by redesignating paragraph (13) as paragraph (15); and
(C) by inserting after paragraph (12) the following new
paragraph:
``(13) Enforcement of safety and soundness requirements.--
The Secretary of Education or the Secretary of the Treasury,
as appropriate, may request that the Attorney General bring
an action in the United States District Court for the
District of Columbia for the enforcement of any provision 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.''.
(3) Financial safety and soundness.--Section 439(r) of the
Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is further
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
(iii) by adding at the end the following new subparagraph:
``(C)(i) financial statements of the Association within 45
days of the end of each fiscal quarter; and
``(ii) reports setting forth the calculation of the capital
ratio of the Association within 45 days of the end of each
fiscal quarter.'';
(B) in paragraph (2)--
(i) by striking clauses (i) and (ii) of subparagraph (A)
and inserting the following:
``(i) appoint auditors or examiners to conduct audits of
the Association from time to time to determine the condition
of the Association for the purpose of assessing the
Association's financial safety and soundness and to determine
whether the requirements of this section and section 440 are
being met; and
``(ii) obtain the services of such experts as the Secretary
of the Treasury determines necessary and appropriate, as
authorized by section 3109 of title 5, United States Code, to
assist in determining the condition of the Association for
the purpose of assessing the Association's financial safety
and soundness, and to determine whether the requirements of
this section and section 440 are being met.''; and
(ii) by adding at the end the following new subparagraph:
``(D) Annual assessment.--
``(i) In general.--For each fiscal year beginning on or
after October 1, 1996, the Secretary of the Treasury may
establish and collect from the Association an assessment (or
assessments) in amounts sufficient to provide for reasonable
costs and expenses of carrying out the duties of the
Secretary of the Treasury under this section and section 440
during such fiscal year. In no event may the total amount so
assessed exceed, for any fiscal year, $800,000, adjusted for
each fiscal year ending after September 30, 1997, by the
ratio of the Consumer Price Index for All Urban Consumers
(issued by the Bureau of Labor Statistics) for the final
month of the fiscal year preceding the fiscal year for which
the assessment is made to the Consumer Price Index for All
Urban Consumers for September 1997.
``(ii) Deposit.--Amounts collected from assessments under
this subparagraph shall be deposited in an account within the
Treasury of the United States as designated by the Secretary
of the Treasury for that purpose. The Secretary of the
Treasury is authorized and directed to pay out of any funds
available in such account the reasonable costs and expenses
of carrying out the duties of the Secretary of the Treasury
under this section and section 440. None of the funds
deposited into such account shall be available for any
purpose other than making payments for such costs and
expenses.''; and
(C) by inserting after paragraph (13) (as added by
paragraph (2)(C)) the following new paragraph:
``(14) Actions by secretary.--
``(A) In general.--For any fiscal quarter ending after
January 1, 2000, the Association shall have a capital ratio
of at least 2.25 percent. The Secretary of the Treasury may,
whenever such capital ratio is not met, take any one or more
of the actions described in paragraph (7), except that--
``(i) the capital ratio to be restored pursuant to
paragraph (7)(D) shall be 2.25 percent; and
``(ii) if the relevant capital ratio is in excess 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 percent.
``(B) Applicability.--The provisions of paragraphs (4),
(5), (6), (8), (9), (10), and (11) shall be of no further
application to the Association for any period after January
1, 2000.''.
(4) Information required; dividends.--Section 439(r) of the
Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is further
amended--
(A) by adding at the end of paragraph (2) (as amended in
paragraph (3)(B)(ii)) the following new subparagraph:
``(E) Obligation to obtain, maintain, and report
information.--
``(i) In general.--The Association shall obtain such
information and make and keep such records as the Secretary
of the Treasury may from time to time prescribe concerning--
``(I) the financial risk to the Association resulting from
the activities of any associated person, to the extent such
activities are reasonably likely to have a material impact on
the financial condition of the Association, including the
Association's capital ratio, the Association's liquidity, or
the Association's ability to conduct and finance the
Association's operations; and
``(II) the Association's policies, procedures, and systems
for monitoring and controlling any such financial risk.
``(ii) Summary reports.--The Secretary of the Treasury may
require summary reports of such information to be filed no
more frequently than quarterly. If, as a result of adverse
market conditions or based on reports provided pursuant to
this subparagraph or other available information, the
Secretary of the Treasury has concerns regarding the
financial or operational condition of the Association, the
Secretary of the Treasury may, notwithstanding the preceding
sentence and clause (i), require the Association to make
reports concerning the activities of any associated person,
whose business activities are reasonably likely to have a
material impact on the financial or operational condition of
the Association.
``(iii) Definition.--For purposes of this subparagraph, the
term `associated person' means any person, other than a
natural person, directly or indirectly controlling,
controlled by, or under common control with the
Association.''; and
(B) by adding at the end the following new paragraphs:
``(16) Dividends.--The Association may pay dividends in the
form of cash or noncash distributions 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
Association's capital would be in compliance with the capital
standards set forth in this section.
``(17) Certification prior to payment of dividend.--Prior
to the payment of any dividend under paragraph (16), the
Association shall certify to the Secretary of the Treasury
that the payment of the dividend will be made in compliance
with paragraph (16) and shall provide copies of all
calculations needed to make such certification.''.
(c) Sunset of the Association's Charter if No
Reorganization Plan Occurs.--Section 439 of the Higher
Education Act of 1965 (20 U.S.C. 1087-2) is amended by adding
at the end the following new subsection:
``(s) Charter Sunset.--
``(1) Application of provisions.--This subsection applies
beginning 18 months and one day after the date of enactment
of this subsection if no reorganization of the Association
occurs in accordance with the provisions of section 440.
``(2) Sunset plan.--
``(A) Plan submission by the association.--Not later than
July 1, 2007, the Association shall submit to the Secretary
of the Treasury and to the Chairman and Ranking Member of the
Committee on Labor and Human Resources of the Senate and the
Chairman and Ranking Member of the Committee on Economic and
Educational Opportunities of the House of Representatives, a
detailed plan for the orderly winding up, by July 1, 2013, of
business activities conducted pursuant to the charter set
forth in this section. Such plan shall--
``(i) ensure that the Association will have adequate assets
to transfer to a trust, as provided in this subsection, to
ensure full payment of remaining obligations of the
Association in accordance with the terms of such obligations;
``(ii) provide that all assets not used to pay liabilities
shall be distributed to shareholders as provided in this
subsection; and
``(iii) provide that the operations of the Association
shall remain separate and distinct from that of any entity to
which the assets of the Association are transferred.
``(B) Amendment of the plan by the association.--The
Association shall from time to time amend such plan to
reflect changed circumstances, and submit such amendments to
the Secretary of the Treasury and to the Chairman and Ranking
Minority Member of the Committee on Labor and Human Resources
of the Senate and Chairman and Ranking Minority Member of the
Committee on Economic and Educational Opportunities of the
House of Representatives. In no case may any amendment extend
the date for full implementation of the plan beyond the
dissolution date provided in paragraph (3).

[[Page H10787]]

``(C) Plan monitoring.--The Secretary of the Treasury shall
monitor the Association's compliance with the plan and shall
continue to review the plan (including any amendments
thereto).
``(D) Amendment of the plan by the secretary of the
treasury.--The Secretary of the Treasury may require the
Association to amend the plan (including any amendments to
the plan), if the Secretary of the Treasury deems such
amendments necessary to ensure full payment of all
obligations of the Association.
``(E) Implementation by the association.--The Association
shall promptly implement the plan (including any amendments
to the plan, whether such amendments are made by the
Association or are required to be made by the Secretary of
the Treasury).
``(3) Dissolution of the association.--The Association
shall dissolve and the Association's separate existence shall
terminate on July 1, 2013, 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 Secretary of Education
and the Secretary of the Treasury of the Association's
intention to dissolve, unless within 60 days of receipt of
such notice the Secretary of Education notifies the
Association that the Association continues to be needed to
serve as a lender of last resort pursuant to subsection (q)
or continues to be needed to purchase loans under an
agreement with the Secretary described in paragraph (4)(A).
On the dissolution date, the Association shall take the
following actions:
``(A) Establishment of a trust.--The Association 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 a trust and
irrevocably 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 direct noncallable
obligations of the United States 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.
``(B) Use of trust assets.--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 remaining obligations assumed by the trust. Upon the
fulfillment of the trustee's duties under the trust, any
remaining assets of the trust shall be transferred to the
persons who, at the time of the dissolution, were the
shareholders of the Association, or to the legal successors
or assigns of such persons.
``(C) Obligations not transferred to the trust.--The
Association shall make proper provision for all other
obligations of the Association, including the repurchase or
redemption, or the making of proper provision for the
repurchase or redemption, of any preferred stock of the
Association outstanding.
``(D) Transfer of remaining assets.--After compliance with
subparagraphs (A) and (C), the Association shall transfer to
the shareholders of the Association any remaining assets of
the Association.
``(4) Restrictions relating to winding up.--
``(A) Restrictions on new business activity or acquisition
of assets by the association.--
``(i) In general.--Beginning on July 1, 2009, the
Association shall not engage in any new business activities
or acquire any additional program assets (including acquiring
assets pursuant to contractual commitments) described in
subsection (d) other than in connection with the
Association--

``(I) serving as a lender of last resort pursuant to
subsection (q); and
``(II) purchasing loans insured under this part, if the
Secretary, with the approval of the Secretary of the
Treasury, enters into an agreement with the Association for
the continuation or resumption of the Association's secondary
market purchase program because the Secretary determines
there is inadequate liquidity for loans made under this part.

``(ii) Agreement.--The Secretary is authorized to enter
into an agreement described in subclause (II) of clause (i)
with the Association covering such secondary market
activities. Any agreement entered into under such subclause
shall cover a period of 12 months, but may be renewed if the
Secretary determines that liquidity remains inadequate. The
fee provided under subsection (h)(7) shall not apply to loans
acquired under any such agreement with the Secretary.
``(B) Issuance of debt obligations during the wind up
period; attributes of debt obligations.--The Association
shall not issue debt obligations which mature later than July
1, 2013, except in connection with serving as a lender of
last resort pursuant to subsection (q) or with purchasing
loans under an agreement with the Secretary as described in
subparagraph (A). Nothing in this subsection shall modify the
attributes accorded the debt obligations of the Association
by this section, regardless of whether such debt obligations
are transferred to a trust in accordance with paragraph (3).
``(C) Use of association name.--The Association may not
transfer or permit the use of the name `Student Loan
Marketing Association', `Sallie Mae', or any variation
thereof, to or by any entity other than a subsidiary of the
Association.''.
(d) Discrimination in Secondary Markets Prohibited.--Part B
of title IV of the Higher Education Act of 1965 (20 U.S.C.
1071 et seq.) is amended by adding after section 440 (as
added by subsection (a)) the following new section:

``SEC. 440A. DISCRIMINATION IN SECONDARY MARKETS PROHIBITED.

``The Student Loan Marketing Association (and, if the
Association is privatized under section 440, any successor
entity functioning as a secondary market for loans under this
part, including the Holding Company described in such
section) shall not engage directly or indirectly in any
pattern or practice that results in a denial of a borrower's
access to loans under this part because of the borrower's
race, sex, color, religion, national origin, age, disability
status, income, attendance at a particular eligible
institution, length of the borrower's educational program, or
the borrower's academic year at an eligible institution.''.
(e) Repeals.--
(1) In general.--Sections 439 of the Higher Education Act
of 1965 (20 U.S.C. 1087-2) and 440 of such Act (as added by
subsection (a) of this section) are repealed.
(2) Effective date.--The repeals made by paragraph (1)
shall be effective one year after--
(A) the date on which all of the obligations of the trust
established under section 440(d)(1) of the Higher Education
Act of 1965 (as added by subsection (a)) have been
extinguished, if a reorganization occurs in accordance with
section 440 of such Act; or
(B) the date on which all of the obligations of the trust
established under subsection 439(s)(3)(A) of such Act (as
added by subsection (c)) have been extinguished, if a
reorganization does not occur in accordance with section 440
of such Act.
(f) Association Names.--Upon dissolution in accordance with
section 439(s) of the Higher Education Act of 1965 (20 U.S.C.
1087-2), the names ``Student Loan Marketing Association'',
``Sallie Mae'', and any variations thereof may not be used by
any entity engaged in any business similar to the business
conducted pursuant to section 439 of such Act (as such
section was in effect on the date of enactment of this Act)
without the approval of the Secretary of the Treasury.
(g) Right to Enforce.--The Secretary of Education or the
Secretary of the Treasury, as appropriate, may request that
the Attorney General bring an action in the United States
District Court for the District of Columbia for the
enforcement of any provision of subsection (f), 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 subsection (f).

SEC. 102. CONNIE LEE PRIVATIZATION.

(a) Status of the Corporation and Corporate Powers;
Obligations Not Federally Guaranteed.--
(1) Status of the corporation.--The Corporation shall not
be an agency, instrumentality, or establishment of the United
States Government, nor a Government corporation, nor a
Government controlled corporation, as such terms are 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 allowable against the
United States based on the actions of the Corporation.
(2) Corporate powers.--The Corporation shall be subject to
the provisions of this section, and, to the extent not
inconsistent with this section, to the District of Columbia
Business Corporation Act (or the comparable law of another
State, if applicable). The Corporation shall have the powers
conferred upon a corporation by the District of Columbia
Business Corporation Act (or such other applicable State law)
as from time to time in effect in order to conduct the
Corporation's affairs as a private, for-profit corporation
and to carry out the Corporation's purposes and activities
incidental thereto. The Corporation shall have the power to
enter into contracts, to execute instruments, to incur
liabilities, to provide products and services, and to do all
things as are necessary or incidental to the proper
management of the Corporation's affairs and the efficient
operation of a private, for-profit business.
(3) Limitation on ownership of stock.--
(A) Secretary of the treasury.--The Secretary of the
Treasury, in completing the sale of stock pursuant to
subsection (c), may not sell or issue the stock held by the
Secretary of Education to an agency, instrumentality, or
establishment of the United States Government, or to a
Government corporation or a Government controlled
corporation, as such terms are defined in section 103 of
title 5, United States Code, or to a government-sponsored
enterprise as such term is defined in section 3 of the
Congressional Budget Act of 1974 (2 U.S.C. 622).
(B) Student loan marketing association.--The Student Loan
Marketing Association shall not increase its share of the
ownership of the Corporation in excess of 42 percent of the
shares of stock of the Corporation outstanding on the date of
enactment of this Act. The Student Loan Marketing Association
shall not control the operation of the Corporation, except
that the Student Loan Marketing Association may participate
in the election of directors as a shareholder, and may
continue to exercise the Student

[[Page H10788]]

Loan Marketing Association's right to appoint directors under
section 754 of the Higher Education Act of 1965 (20 U.S.C.
1132f-3) as long as that section is in effect.
(C) Prohibition.--Until such time as the Secretary of the
Treasury sells the stock of the Corporation owned by the
Secretary of Education pursuant to subsection (c), the
Student Loan Marketing Association shall not provide
financial support or guarantees to the Corporation.
(D) Financial support or guarantees.--After the Secretary
of the Treasury sells the stock of the Corporation owned by
the Secretary of Education pursuant to subsection (c), the
Student Loan Marketing Association may provide financial
support or guarantees to the Corporation, if such support or
guarantees are subject to terms and conditions that are no
more advantageous to the Corporation than the terms and
conditions the Student Loan Marketing Association provides to
other entities, including, where applicable, other monoline
financial guaranty corporations in which the Student Loan
Marketing Association has no ownership interest.
(4) No federal guarantee.--
(A) Obligations insured by the corporation.--
(i) Full faith and credit of the united states.--No
obligation that is insured, guaranteed, or otherwise backed
by the Corporation shall be deemed to be an obligation that
is guaranteed by the full faith and credit of the United
States.
(ii) Student loan marketing association.--No obligation
that is insured, guaranteed, or otherwise backed by the
Corporation shall be deemed to be an obligation that is
guaranteed by the Student Loan Marketing Association.
(iii) Special rule.--This paragraph shall not affect the
determination of whether such obligation is guaranteed for
purposes of Federal income taxes.
(B) Securities offered by the corporation.--No debt or
equity securities of the Corporation shall be deemed to be
guaranteed by the full faith and credit of the United States.
(5) Definition.--The term ``Corporation'' as used in this
section means the College Construction Loan Insurance
Association as in existence on the day before the date of
enactment of this Act, and any successor corporation.
(b) Related Privatization Requirements.--
(1) Notice requirements.--
(A) In general.--During the six-year period following the
date of enactment of this Act, the Corporation shall include,
in each of the Corporation's contracts for the insurance,
guarantee, or reinsurance of obligations, and in each
document offering debt or equity securities of the
Corporation, a prominent statement providing notice that--
(i) such obligations or such securities, as the case may
be, are not obligations of the United States, nor are such
obligations or such securities, as the case may be,
guaranteed in any way by the full faith and credit of the
United States; and
(ii) the Corporation is not an instrumentality of the
United States.
(B) Additional notice.--During the five-year period
following the sale of stock pursuant to subsection (c)(1), in
addition to the notice requirements in subparagraph (A), the
Corporation shall include, in each of the contracts and
documents referred to in such subparagraph, a prominent
statement providing notice that the United States is not an
investor in the Corporation.
(2) Corporate charter.--The Corporation's charter shall be
amended as necessary and without delay to conform to the
requirements of this section.
(3) Corporate name.--The name of the Corporation, or of any
direct or indirect subsidiary thereof, may not contain the
term ``College Construction Loan Insurance Association'', or
any substantially similar variation thereof.
(4) Articles of incorporation.--The Corporation shall amend
the Corporation's articles of incorporation without delay to
reflect that one of the purposes of the Corporation shall be
to guarantee, insure, and reinsure bonds, leases, and other
evidences of debt of educational institutions, including
Historically Black Colleges and Universities and other
academic institutions which are ranked in the lower
investment grade category using a nationally recognized
credit rating system.
(5) Requirements until stock sale.--Notwithstanding
subsection (d), the requirements of sections 754 and 760 of
the Higher Education Act of 1965 (20 U.S.C. 1132f-3 and
1132f-9), as such sections were in effect on the day before
the date of enactment of this Act, shall continue to be
effective until the day immediately following the date of
closing of the purchase of the Secretary of Education's stock
(or the date of closing of the final purchase, in the case of
multiple transactions) pursuant to subsection (c)(1) of this
Act.
(c) Sale of Federally Owned Stock.--
(1) Sale of stock required.--The Secretary of the Treasury
shall sell, pursuant to section 324 of title 31, United
States Code, the stock of the Corporation owned by the
Secretary of Education as soon as possible after the date of
enactment of this Act, but not later than six months after
such date.
(2) Purchase by the corporation.--In the event that the
Secretary of the Treasury is unable to sell the stock, or any
portion thereof, at a price acceptable to the Secretary of
Education and the Secretary of the Treasury, the Corporation
shall purchase, within six months after the date of enactment
of this Act, such stock at a price determined by the
Secretary of the Treasury and acceptable to the Corporation
based on the independent appraisal of one or more nationally
recognized financial firms, except that such price shall not
exceed the value of the Secretary of Education's stock as
determined by the Congressional Budget Office in House Report
104-153, dated June 22, 1995.
(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 subsection for all reasonable costs
related to such sale, including all reasonable expenses
relating to one or more independent appraisals under this
subsection.
(4) Assistance by the corporation.--The Corporation 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 subsection.
(d) Repeal of Statutory Restrictions and Related
Provisions.--Part D of title VII of the Higher Education Act
of 1965 (20 U.S.C. 1001 et seq.) is repealed.

SEC. 103. ELIGIBLE INSTITUTION.

(a) Amendment.--Section 481(b) of the Higher Education Act
of 1965 (20 U.S.C. 1088(b)) is amended by inserting after the
end of the first sentence the following new sentence: ``For
the purposes of determining whether an institution meets the
requirements of clause (6), the Secretary shall not consider
the financial information of any institution for a fiscal
year that began on or before April 30, 1994.''.
(b) Effective Date.--The amendment 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 (20 U.S.C.
1088(b)(6)).
TITLE II--MUSEUMS AND LIBRARIES

SEC. 201. MUSEUM AND LIBRARY SERVICES.

The Museum Services Act (20 U.S.C. 961 et seq.) is amended
to read as follows:
``TITLE II--MUSEUM AND LIBRARY SERVICES
``Subtitle A--General Provisions

``SEC. 201. SHORT TITLE.

``This title may be cited as the `Museum and Library
Services Act'.

``SEC. 202. GENERAL DEFINITIONS.

``As used in this title:
``(1) Commission.--The term `Commission' means the National
Commission on Libraries and Information Science established
under section 3 of the National Commission on Libraries and
Information Sciences Act (20 U.S.C. 1502).
``(2) Director.--The term `Director' means the Director of
the Institute appointed under section 204.
``(3) Institute.--The term `Institute' means the Institute
of Museum and Library Services established under section 203.
``(4) Museum board.--The term `Museum Board' means the
National Museum Services Board established under section 275.

``SEC. 203. INSTITUTE OF MUSEUM AND LIBRARY SERVICES.

``(a) Establishment.--There is established, within the
National Foundation on the Arts and the Humanities, an
Institute of Museum and Library Services.
``(b) Offices.--The Institute shall consist of an Office of
Museum Services and an Office of Library Services. There
shall be a National Museum Services Board in the Office of
Museum Services.

``SEC. 204. DIRECTOR OF THE INSTITUTE.

``(a) Appointment.--
``(1) In general.--The Institute shall be headed by a
Director, appointed by the President, by and with the advice
and consent of the Senate.
``(2) Term.--The Director shall serve for a term of 4
years.
``(3) Qualifications.--Beginning with the first individual
appointed to the position of Director after the date of the
enactment of the Government-Sponsored Enterprise
Privatization Act of 1996, every second individual so
appointed shall be appointed from among individuals who have
special competence with regard to library and information
services. Beginning with the second individual appointed to
the position of Director after the date of enactment of the
Government-Sponsored Enterprise Privatization Act of 1996,
every second individual so appointed shall be appointed from
among individuals who have special competence with regard to
museum services.
``(b) Compensation.--The Director may be compensated at the
rate provided for level III of the Executive Schedule under
section 5314 of title 5, United States Code.
``(c) Duties and Powers.--The Director shall perform such
duties and exercise such powers as may be prescribed by law,
including awarding financial assistance for activities
described in this title.
``(d) Nondelegation.--The Director shall not delegate any
of the functions of the Director to any person who is not an
officer or employee of the Institute.
``(e) Coordination.--The Director shall ensure coordination
of the policies and activities of the Institute with the
policies and activities of other agencies and offices of the
Federal Government having interest in and responsibilities
for the improvement of museums and libraries and information
services.

[[Page H10789]]

``SEC. 205. DEPUTY DIRECTORS.

``The Office of Library Services shall be headed by a
Deputy Director, who shall be appointed by the Director from
among individuals who have a graduate degree in library
science and expertise in library and information services.
The Office of Museum Services shall be headed by a Deputy
Director, who shall be appointed by the Director from among
individuals who have expertise in museum services.

``SEC. 206. PERSONNEL.

``(a) In General.--The Director may, in accordance with
applicable provisions of title 5, United States Code, appoint
and determine the compensation of such employees as the
Director determines to be necessary to carry out the duties
of the Institute.
``(b) Voluntary Services.--The Director may accept and
utilize the voluntary services of individuals and reimburse
the individuals for travel expenses, including per diem in
lieu of subsistence, in the same amounts and to the same
extent as authorized under section 5703 of title 5, United
States Code, for persons employed intermittently in Federal
Government service.

``SEC. 207. CONTRIBUTIONS.

``The Institute is authorized to solicit, accept, receive,
and invest in the name of the United States, gifts, bequests,
or devises of money and other property or services and to use
such property or services in furtherance of the functions of
the Institute. Any proceeds from such gifts, bequests, or
devises, after acceptance by the Institute, shall be paid by
the donor or the representative of the donor to the Director.
The Director shall enter the proceeds in a special interest-
bearing account to the credit of the Institute for the
purposes specified in each case.
``Subtitle B--Library Services and Technology

``SEC. 211. SHORT TITLE.

``This subtitle may be cited as the `Library Services and
Technology Act'.

``SEC. 212. PURPOSE.

``It is the purpose of this subtitle--
``(1) to consolidate Federal library service programs;
``(2) to stimulate excellence and promote access to
learning and information resources in all types of libraries
for individuals of all ages;
``(3) to promote library services that provide all users
access to information through State, regional, national and
international electronic networks;
``(4) to provide linkages among and between libraries; and
``(5) to promote targeted library services to people of
diverse geographic, cultural, and socioeconomic backgrounds,
to individuals with disabilities, and to people with limited
functional literacy or information skills.

``SEC. 213. DEFINITIONS.

``As used in this subtitle:
``(1) Indian tribe.--The term `Indian tribe' means any
tribe, band, nation, or other organized group or community,
including any Alaska native village, regional corporation, or
village corporation, as defined in or established pursuant to
the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.), which is recognized by the Secretary of the Interior
as eligible for the special programs and services provided by
the United States to Indians because of their status as
Indians.
``(2) Library.--The term `library' includes--
``(A) a public library;
``(B) a public elementary school or secondary school
library;
``(C) an academic library;
``(D) a research library, which for the purposes of this
subtitle means a library that--
``(i) makes publicly available library services and
materials suitable for scholarly research and not otherwise
available to the public; and
``(ii) is not an integral part of an institution of higher
education; and
``(E) a private library, but only if the State in which
such private library is located determines that the library
should be considered a library for purposes of this subtitle.
``(3) Library consortium.--The term `library consortium'
means any local, statewide, regional, interstate, or
international cooperative association of library entities
which provides for the systematic and effective coordination
of the resources of school, public, academic, and special
libraries and information centers, for improved services for
the clientele of such library entities.
``(4) State.--The term `State', unless otherwise specified,
includes each of the 50 States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, the Republic of
the Marshall Islands, the Federated States of Micronesia, and
the Republic of Palau.
``(5) State library administrative agency.--The term `State
library administrative agency' means the official agency of a
State charged by the law of the State with the extension and
development of public library services throughout the State.
``(6) State plan.--The term `State plan' means the document
which gives assurances that the officially designated State
library administrative agency has the fiscal and legal
authority and capability to administer all aspects of this
subtitle, provides assurances for establishing the State's
policies, priorities, criteria, and procedures necessary to
the implementation of all programs under this subtitle,
submits copies for approval as required by regulations
promulgated by the Director, identifies a State's library
needs, and sets forth the activities to be taken toward
meeting the identified needs supported with the assistance of
Federal funds made available under this subtitle.

``SEC. 214. AUTHORIZATION OF APPROPRIATIONS.

``(a) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
$150,000,000 for fiscal year 1997 and such sums as may be
necessary for each of the fiscal years 1998 through 2002 to
carry out this subtitle.
``(2) Transfer.--The Secretary of Education shall--
``(A) transfer any funds appropriated under the authority
of paragraph (1) to the Director to enable the Director to
carry out this subtitle; and
``(B) not exercise any authority concerning the
administration of this title other than the transfer
described in subparagraph (A).
``(b) Forward Funding.--
``(1) In general.--To the end of affording the responsible
Federal, State, and local officers adequate notice of
available Federal financial assistance for carrying out
ongoing library activities and projects, appropriations for
grants, contracts, or other payments under any program under
this subtitle are authorized to be included in the
appropriations Act for the fiscal year preceding the fiscal
year during which such activities and projects shall be
carried out.
``(2) Additional authorization of appropriations.--In order
to effect a transition to the timing of appropriation action
authorized by subsection (a), the application of this section
may result in the enactment, in a fiscal year, of separate
appropriations for a program under this subtitle (whether in
the same appropriations Act or otherwise) for two consecutive
fiscal years.
``(c) Administration.--Not more than 3 percent of the funds
appropriated under this section for a fiscal year may be used
to pay for the Federal administrative costs of carrying out
this subtitle.

``CHAPTER 1--BASIC PROGRAM REQUIREMENTS

``SEC. 221. RESERVATIONS AND ALLOTMENTS.

``(a) Reservations.--
``(1) In general.--From the amount appropriated under the
authority of section 214 for any fiscal year, the Director--
``(A) shall reserve 1\1/2\ percent to award grants in
accordance with section 261; and
``(B) shall reserve 4 percent to award national leadership
grants or contracts in accordance with section 262.
``(2) Special rule.--If the funds reserved pursuant to
paragraph (1)(B) for a fiscal year have not been obligated by
the end of such fiscal year, then such funds shall be
allotted in accordance with subsection (b) for the fiscal
year succeeding the fiscal year for which the funds were so
reserved.
``(b) Allotments.--
``(1) In general.--From the sums appropriated under the
authority of section 214 and not reserved under subsection
(a) for any fiscal year, the Director shall award grants from
minimum allotments, as determined under paragraph (3), to
each State. Any sums remaining after minimum allotments are
made for such year shall be allotted in the manner set forth
in paragraph (2).
``(2) Remainder.--From the remainder of any sums
appropriated under the authority of section 214 that are not
reserved under subsection (a) and not allotted under
paragraph (1) for any fiscal year, the Director shall award
grants to each State in an amount that bears the same
relation to such remainder as the population of the State
bears to the population of all States.
``(3) Minimum allotment.--
``(A) In general.--For the purposes of this subsection, the
minimum allotment for each State shall be $340,000, except
that the minimum allotment shall be $40,000 in the case of
the United States Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, the Republic of
the Marshall Islands, the Federated States of Micronesia, and
the Republic of Palau.
``(B) Ratable reductions.--If the sum appropriated under
the authority of section 214 and not reserved under
subsection (a) for any fiscal year is insufficient to fully
satisfy the aggregate of the minimum allotments for all
States for that purpose for such year, each of such minimum
allotments shall be reduced ratably.
``(C) Special rule.--
``(i) In general.--Notwithstanding any other provision of
this subsection and using funds allotted for the Republic of
the Marshall Islands, the Federated States of Micronesia, and
the Republic of Palau under this subsection, the Director
shall award grants to Guam, American Samoa, the Commonwealth
of the Northern Mariana Islands, the Republic of the Marshall
Islands, the Federated States of Micronesia, or the Republic
of Palau to carry out activities described in this subtitle
in accordance with the provisions of this subtitle that the
Director determines are not inconsistent with this
subparagraph.
``(ii) Award basis.--The Director shall award grants
pursuant to clause (i) on a competitive basis and pursuant to
recommendations from the Pacific Region Educational
Laboratory in Honolulu, Hawaii.
``(iii) Termination of eligibility.--Notwithstanding any
other provision of law, the Republic of the Marshall Islands,
the Federated States of Micronesia, and the Republic of Palau
shall not receive any funds under

[[Page H10790]]

this subtitle for any fiscal year that begins after September
30, 2001.
``(iv) Administrative costs.--The Director may provide not
more than 5 percent of the funds made available for grants
under this subparagraph to pay the administrative costs of
the Pacific Region Educational Laboratory regarding
activities assisted under this subparagraph.
``(4) Data.--The population of each State and of all the
States shall be determined by the Director on the basis of
the most recent data available from the Bureau of the Census.

``SEC. 222. ADMINISTRATION.

``(a) In General.--Not more than 4 percent of the total
amount of funds received under this subtitle for any fiscal
year by a State may be used for administrative costs.
``(b) Construction.--Nothing in this section shall be
construed to limit spending for evaluation costs under
section 224(c) from sources other than this subtitle.

``SEC. 223. PAYMENTS; FEDERAL SHARE; AND MAINTENANCE OF
EFFORT REQUIREMENTS.

``(a) Payments.--Subject to appropriations provided
pursuant to section 214, the Director shall pay to each State
library administrative agency having a State plan approved
under section 224 the Federal share of the cost of the
activities described in the State plan.
``(b) Federal Share.--
``(1) In general.--The Federal share shall be 66 percent.
``(2) Non-federal share.--The non-Federal share of payments
shall be provided from non-Federal, State, or local sources.
``(c) Maintenance of Effort.--
``(1) State expenditures.--
``(A) Requirement.--
``(i) In general.--The amount otherwise payable to a State
for a fiscal year pursuant to an allotment under this chapter
shall be reduced if the level of State expenditures, as
described in paragraph (2), for the previous fiscal year is
less than the average of the total of such expenditures for
the 3 fiscal years preceding that previous fiscal year. The
amount of the reduction in allotment for any fiscal year
shall be equal to the amount by which the level of such State
expenditures for the fiscal year for which the determination
is made is less than the average of the total of such
expenditures for the 3 fiscal years preceding the fiscal year
for which the determination is made.
``(ii) Calculation.--Any decrease in State expenditures
resulting from the application of subparagraph (B) shall be
excluded from the calculation of the average level of State
expenditures for any 3-year period described in clause (i).
``(B) Decrease in federal support.--If the amount made
available under this subtitle for a fiscal year is less than
the amount made available under this subtitle for the
preceding fiscal year, then the expenditures required by
subparagraph (A) for such preceding fiscal year shall be
decreased by the same percentage as the percentage decrease
in the amount so made available.
``(2) Level of state expenditures.--The level of State
expenditures for the purposes of paragraph (1) shall include
all State dollars expended by the State library
administrative agency for library programs that are
consistent with the purposes of this subtitle. All funds
included in the maintenance of effort calculation under this
subsection shall be expended during the fiscal year for which
the determination is made, and shall not include capital
expenditures, special one-time project costs, or similar
windfalls.
``(3) Waiver.--The Director may waive the requirements of
paragraph (1) if the Director determines that such a waiver
would be equitable due to exceptional or uncontrollable
circumstances such as a natural disaster or a precipitous and
unforeseen decline in the financial resources of the State.

``SEC. 224. STATE PLANS.

``(a) State Plan Required.--
``(1) In general.--In order to be eligible to receive a
grant under this subtitle, a State library administrative
agency shall submit a State plan to the Director not later
than April 1, 1997.
``(2) Duration.--The State plan shall cover a period of 5
fiscal years.
``(3) Revisions.--If a State library administrative agency
makes a substantive revision to its State plan, then the
State library administrative agency shall submit to the
Director an amendment to the State plan containing such
revision not later than April 1 of the fiscal year preceding
the fiscal year for which the amendment will be effective.
``(b) Contents.--The State plan shall--
``(1) establish goals, and specify priorities, for the
State consistent with the purposes of this subtitle;
``(2) describe activities that are consistent with the
goals and priorities established under paragraph (1), the
purposes of this subtitle, and section 231, 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 the activities described in paragraph (2);
``(4) describe the methodology that such agency will use to
evaluate the success of the activities established under
paragraph (2) in achieving the goals and meeting the
priorities described in paragraph (1);
``(5) describe the procedures that such agency will use to
involve libraries and library users throughout the State in
policy decisions regarding implementation of this subtitle;
and
``(6) provide assurances satisfactory to the Director that
such agency will make such reports, in such form and
containing such information, as the Director 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 the purposes of this subtitle.
``(c) Evaluation and Report.--Each State library
administrative agency receiving a grant under this subtitle
shall independently evaluate, and report to the Director
regarding, the activities assisted under this subtitle, prior
to the end of the 5-year plan.
``(d) Information.--Each library receiving assistance under
this subtitle shall submit to the State library
administrative agency such information as such agency may
require to meet the requirements of subsection (c).
``(e) Approval.--
``(1) In general.--The Director shall approve any State
plan under this subtitle that meets the requirements of this
subtitle and provides satisfactory assurances that the
provisions of such plan will be carried out.
``(2) Public availability.--Each State library
administrative agency receiving a grant under this subtitle
shall make the State plan available to the public.
``(3) Administration.--If the Director determines that the
State plan does not meet the requirements of this section,
the Director shall--
``(A) immediately notify the State library administrative
agency of such determination and the reasons for such
determination;
``(B) offer the State library administrative agency the
opportunity to revise its State plan;
``(C) provide technical assistance in order to assist the
State library administrative agency in meeting the
requirements of this section; and
``(D) provide the State library administrative agency the
opportunity for a hearing.

``CHAPTER 2--LIBRARY PROGRAMS

``SEC. 231. GRANTS TO STATES.

``(a) In General.--Of the funds provided to a State library
administrative agency under section 214, such agency shall
expend, either directly or through subgrants or cooperative
agreements, at least 96 percent of such funds for--
``(1) establishing or enhancing electronic linkages among
or between libraries and library consortia; and
``(2) targeting library and information services to persons
having difficulty using a library and to underserved urban
and rural communities, including children (from birth through
age 17) from families with incomes below the poverty line (as
defined by the Office of Management and Budget and revised
annually in accordance with section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)) applicable to a
family of the size involved.
``(b) Special Rule.--Each State library administrative
agency receiving funds under this chapter may apportion the
funds available for the purposes described in subsection (a)
between the two purposes described in paragraphs (1) and (2)
of such subsection, as appropriate, to meet the needs of the
individual State.

``CHAPTER 3--ADMINISTRATIVE PROVISIONS

``Subchapter A--State Requirements

``SEC. 251. STATE ADVISORY COUNCILS.

``Each State desiring assistance under this subtitle may
establish a State advisory council which is broadly
representative of the library entities in the State,
including public, school, academic, special, and
institutional libraries, and libraries serving individuals
with disabilities.

``Subchapter B--Federal Requirements

``SEC. 261. SERVICES FOR INDIAN TRIBES.

``From amounts reserved under section 221(a)(1)(A) for any
fiscal year the Director shall award grants to organizations
primarily serving and representing Indian tribes to enable
such organizations to carry out the activities described in
section 231.

``SEC. 262. NATIONAL LEADERSHIP GRANTS OR CONTRACTS.

``(a) In General.--From the amounts reserved under section
221(a)(1)(B) for any fiscal year the Director shall establish
and carry out a program awarding national leadership grants
or contracts to enhance the quality of library services
nationwide and to provide coordination between libraries and
museums. Such grants or contracts shall be used for
activities that may include--
``(1) education and training of persons in library and
information science, particularly in areas of new technology
and other critical needs, including graduate fellowships,
traineeships, institutes, or other programs;
``(2) research and demonstration projects related to the
improvement of libraries, education in library and
information science, enhancement of library services through
effective and efficient use of new technologies, and
dissemination of information derived from such projects;
``(3) preservation or digitization of library materials and
resources, giving priority to projects emphasizing
coordination, avoidance of duplication, and access by
researchers beyond the institution or library entity
undertaking the project; and
``(4) model programs demonstrating cooperative efforts
between libraries and museums.
``(b) Grants or Contracts.--
``(1) In general.--The Director may carry out the
activities described in subsection (a)

[[Page H10791]]

by awarding grants to, or entering into contracts with,
libraries, agencies, institutions of higher education, or
museums, where appropriate.
``(2) Competitive basis.--Grants and contracts under this
section shall be awarded on a competitive basis.
``(c) Special Rule.--The Director shall make every effort
to ensure that activities assisted under this section are
administered by appropriate library and museum professionals
or experts.

``SEC. 263. STATE AND LOCAL INITIATIVES.

``Nothing in this subtitle shall be construed to interfere
with State and local initiatives and responsibility in the
conduct of library services. The administration of libraries,
the selection of personnel and library books and materials,
and insofar as consistent with the purposes of this subtitle,
the determination of the best uses of the funds provided
under this subtitle, shall be reserved for the States and
their local subdivisions.
``Subtitle C--Museum Services

``SEC. 271. PURPOSE.

``It is the purpose of this subtitle--
``(1) to encourage and assist museums in their educational
role, in conjunction with formal systems of elementary,
secondary, and postsecondary education, and with programs of
nonformal education for all age groups;
``(2) to assist museums in modernizing their methods and
facilities so that the museums are better able to conserve
the cultural, historic, and scientific heritage of the United
States; and
``(3) to ease the financial burden borne by museums as a
result of their increasing use by the public.

``SEC. 272. DEFINITIONS.

``As used in this subtitle:
``(1) Museum.--The term `museum' means a public or private
nonprofit agency or institution organized on a permanent
basis for essentially educational or aesthetic purposes, that
utilizes a professional staff, owns or utilizes tangible
objects, cares for the tangible objects, and exhibits the
tangible objects to the public on a regular basis.
``(2) State.--The term `State' means each of the 50 States
of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States Virgin
Islands, Guam, American Samoa, the Commonwealth of the
Northern Mariana Islands, the Republic of the Marshall
Islands, the Federated States of Micronesia, and the Republic
of Palau.

``SEC. 273. MUSEUM SERVICES ACTIVITIES.

``(a) Grants.--The Director, subject to the policy
direction of the Museum Board, may make grants to museums to
pay for the Federal share of the cost of increasing and
improving museum services, through such activities as--
``(1) programs that enable museums to construct or install
displays, interpretations, and exhibitions in order to
improve museum services provided to the public;
``(2) assisting museums in developing and maintaining
professionally trained or otherwise experienced staff to meet
the needs of the museums;
``(3) assisting museums in meeting the administrative costs
of preserving and maintaining the collections of the museums,
exhibiting the collections to the public, and providing
educational programs to the public through the use of the
collections;
``(4) assisting museums in cooperating with each other in
developing traveling exhibitions, meeting transportation
costs, and identifying and locating collections available for
loan;
``(5) assisting museums in the conservation of their
collections;
``(6) developing and carrying out specialized programs for
specific segments of the public, such as programs for urban
neighborhoods, rural areas, Indian reservations, and penal
and other State institutions; and
``(7) model programs demonstrating cooperative efforts
between libraries and museums.
``(b) Contracts and Cooperative Agreements.--
``(1) Projects to strengthen museum services.--The
Director, subject to the policy direction of the Museum
Board, is authorized to enter into contracts and cooperative
agreements with appropriate entities, as determined by the
Director, to pay for the Federal share of enabling the
entities to undertake projects designed to strengthen museum
services, except that any contracts or cooperative agreements
entered into pursuant to this subsection shall be effective
only to such extent or in such amounts as are provided in
appropriations acts.
``(2) Limitation on amount.--The aggregate amount of
financial assistance made available under this subsection for
a fiscal year shall not exceed 15 percent of the amount
appropriated under this subtitle for such fiscal year.
``(3) Operational expenses.--No financial assistance may be
provided under this subsection to pay for operational
expenses.
``(c) Federal Share.--
``(1) 50 percent.--Except as provided in paragraph (2), the
Federal share described in subsections (a) and (b) shall be
not more than 50 percent.
``(2) Greater than 50 percent.--The Director may use not
more than 20 percent of the funds made available under this
subtitle for a fiscal year to make grants under subsection
(a), or enter into contracts or agreements under subsection
(b), for which the Federal share may be greater than 50
percent.
``(d) Review and Evaluation.--The Director shall establish
procedures for reviewing and evaluating grants, contracts,
and cooperative agreements made or entered into under this
subtitle. Procedures for reviewing grant applications or
contracts and cooperative agreements for financial assistance
under this subtitle shall not be subject to any review
outside of the Institute.

``SEC. 274. AWARD.

``The Director, with the advice of the Museum Board, may
annually award a National Award for Museum Service to
outstanding museums that have made significant contributions
in service to their communities.

``SEC. 275. NATIONAL MUSEUM SERVICES BOARD.

``(a) Establishment.--There is established in the Institute
a National Museum Services Board.
``(b) Composition and Qualifications.--
``(1) Composition.--The Museum Board shall consist of the
Director and 14 members appointed by the President, by and
with the advice and consent of the Senate.
``(2) Qualifications.--The appointive members of the Museum
Board shall be selected from among citizens of the United
States--
``(A) who are members of the general public;
``(B) who are or have been affiliated with--
``(i) resources that, collectively, are broadly
representative of the curatorial, conservation, educational,
and cultural resources of the United States; or
``(ii) museums that, collectively, are broadly
representative of various types of museums, including museums
relating to science, history, technology, art, zoos, and
botanical gardens; and
``(C) who are recognized for their broad knowledge,
expertise, or experience in museums or commitment to museums.
``(3) Geographic and other representation.--Members of the
Museum Board shall be appointed to reflect persons from
various geographic regions of the United States. The Museum
Board may not include, at any time, more than 3 members from
a single State. In making such appointments, the President
shall give due regard to equitable representation of women,
minorities, and persons with disabilities who are involved
with museums.
``(c) Terms.--
``(1) In general.--Each appointive member of the Museum
Board shall serve for a term of 5 years, except that--
``(A) of the members first appointed, 3 shall serve for
terms of 5 years, 3 shall serve for terms of 4 years, 3 shall
serve for terms of 3 years, 3 shall serve for terms of 2
years, and 2 shall serve for terms of 1 year, as designated
by the President at the time of nomination for appointment;
and
``(B) any member appointed to fill a vacancy shall serve
for the remainder of the term for which the predecessor of
the member was appointed.
``(2) Reappointment.--No member of the Museum Board who has
been a member for more than 7 consecutive years shall be
eligible for reappointment.
``(3) Service until successor takes office.--
Notwithstanding any other provision of this subsection, a
member of the Museum Board shall serve after the expiration
of the term of the member until the successor to the member
takes office.
``(d) Duties and Powers.--The Museum Board shall have the
responsibility to advise the Director on general policies
with respect to the duties, powers, and authority of the
Institute relating to museum services, including general
policies with respect to--
``(1) financial assistance awarded under this subtitle for
museum services; and
``(2) projects described in section 262(a)(4).
``(e) Chairperson.--The President shall designate 1 of the
appointive members of the Museum Board as Chairperson of the
Museum Board.
``(f) Meetings.--
``(1) In general.--The Museum Board shall meet--
``(A) not less than 3 times each year, including--
``(i) not less than 2 times each year separately; and
``(ii) not less than 1 time each year in a joint meeting
with the Commission, convened for purposes of making general
policies with respect to financial assistance for projects
described in section 262(a)(4); and
``(B) at the call of the Director.
``(2) Vote.--All decisions by the Museum Board with respect
to the exercise of the duties and powers of the Museum Board
shall be made by a majority vote of the members of the Museum
Board who are present. All decisions by the Commission and
the Museum Board with respect to the policies described in
paragraph (1)(A)(ii) shall be made by a \2/3\ majority vote
of the total number of the members of the Commission and the
Museum Board who are present.
``(g) Quorum.--A majority of the members of the Museum
Board shall constitute a quorum for the conduct of business
at official meetings of the Museum Board, but a lesser number
of members may hold hearings. A majority of the members of
the Commission and a majority of the members of the Museum
Board shall constitute a quorum for the conduct of business
at official joint meetings of the Commission and the Museum
Board.
``(h) Compensation and Travel Expenses.--

[[Page H10792]]

``(1) Compensation.--Each member of the Museum Board who is
not an officer or employee of the Federal Government may be
compensated at a rate to be fixed by the President, but not
to exceed the daily equivalent of the maximum rate authorized
for a position above grade GS-15 of the General Schedule
under section 5108 of title 5, United States Code, for each
day (including travel time) during which such member is
engaged in the performance of the duties of the Museum Board.
All members of the Museum Board who are officers or employees
of the Federal Government shall serve without compensation in
addition to compensation received for their services as
officers or employees of the Federal Government.
``(2) Travel expenses.--The members of the Museum Board may
be allowed travel expenses, including per diem in lieu of
subsistence, in the same amounts and to the same extent, as
authorized under section 5703 of title 5, United States Code,
for persons employed intermittently in Federal Government
service.
``(i) Coordination.--The Museum Board, with the advice of
the Director, shall take steps to ensure that the policies
and activities of the Institute are coordinated with other
activities of the Federal Government.

``SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

``(a) Grants.--For the purpose of carrying out this
subtitle, there are authorized to be appropriated to the
Director $28,700,000 for the fiscal year 1997, and such sums
as may be necessary for each of the fiscal years 1998 through
2002.
``(b) Administration.--Not more than 10 percent of the
funds appropriated under this section for a fiscal year may
be used to pay for the administrative costs of carrying out
this subtitle.
``(c) Sums Remaining Available.--Sums appropriated pursuant
to subsection (a) for any fiscal year shall remain available
for obligation until expended.''.

SEC. 202. NATIONAL COMMISSION ON LIBRARIES AND INFORMATION
SCIENCE.

(a) Functions.--Section 5 of the National Commission on
Libraries and Information Science Act (20 U.S.C. 1504) is
amended--
(1) by redesignating subsections (b) through (d) as
subsections (d) through (f), respectively; and
(2) by inserting after subsection (a) the following:
``(b) The Commission shall have the responsibility to
advise the Director of the Institute of Museum and Library
Services on general policies with respect to the duties,
powers, and authority of the Institute of Museum and Library
Services relating to library services, including--
``(1) general policies with respect to--
``(A) financial assistance awarded under the Museum and
Library Services Act for library services; and
``(B) projects described in section 262(a)(4) of such Act;
and
``(2) measures to ensure that the policies and activities
of the Institute of Museum and Library Services are
coordinated with other activities of the Federal Government.
``(c)(1) The Commission shall meet not less than 1 time
each year in a joint meeting with the National Museum
Services Board, convened for purposes of providing advice on
general policy with respect to financial assistance for
projects described in section 262(a)(4) of such Act.
``(2) All decisions by the Commission and the National
Museum Services Board with respect to the advice on general
policy described in paragraph (1) shall be made by a \2/3\
majority vote of the total number of the members of the
Commission and the National Museum Services Board who are
present.
``(3) A majority of the members of the Commission and a
majority of the members of the National Museum Services Board
shall constitute a quorum for the conduct of business at
official joint meetings of the Commission and the National
Museum Services Board.''.
(b) Membership.--Section 6 of the National Commission on
Libraries and Information Science Act (20 U.S.C. 1505) is
amended--
(1) in subsection (a)--
(A) in the first sentence, by striking ``Librarian of
Congress'' and inserting ``Librarian of Congress, the
Director of the Institute of Museum and Library Services (who
shall serve as an ex officio, nonvoting member),'';
(B) in the second sentence--
(i) by striking ``special competence or interest in'' and
inserting ``special competence in or knowledge of''; and
(ii) by inserting before the period the following: ``and at
least one other of whom shall be knowledgeable with respect
to the library and information service and science needs of
the elderly'';
(C) in the third sentence, by inserting ``appointive''
before ``members''; and
(D) in the last sentence, by striking ``term and at least''
and all that follows and inserting ``term.''; and
(2) in subsection (b), by striking ``the rate specified''
and all that follows through ``and while'' and inserting
``the daily equivalent of the maximum rate authorized for a
position above grade GS-15 of the General Schedule under
section 5108 of title 5, United States Code, for each day
(including traveltime) during which the members are engaged
in the business of the Commission. While''.

SEC. 203. TRANSFER OF FUNCTIONS FROM INSTITUTE OF MUSEUM
SERVICES.

(a) Definitions.--For purposes of this section, unless
otherwise provided or indicated by the context--
(1) the term ``Federal agency'' has the meaning given to
the term ``agency'' by section 551(1) of title 5, United
States Code;
(2) the term ``function'' means any duty, obligation,
power, authority, responsibility, right, privilege, activity,
or program; and
(3) the term ``office'' includes any office,
administration, agency, institute, unit, organizational
entity, or component thereof.
(b) Transfer of Functions From the Institute of Museum
Services and the Library Program Office.--There are
transferred to the Director of the Institute of Museum and
Library Services established under section 203 of the Museum
and Library Services Act--
(1) all functions that the Director of the Institute of
Museum Services exercised before the date of enactment of
this section (including all related functions of any officer
or employee of the Institute of Museum Services); and
(2) all functions that the Director of Library Programs in
the Office of Educational Research and Improvement in the
Department of Education exercised before the date of
enactment of this section and any related function of any
officer or employee of the Department of Education.
(c) Determinations of Certain Functions by the Office of
Management and Budget.--If necessary, the Office of
Management and Budget shall make any determination of the
functions that are transferred under subsection (b).
(d) Delegation and Assignment.--Except where otherwise
expressly prohibited by law or otherwise provided by this
section, the Director of the Institute of Museum and Library
Services may delegate any of the functions transferred to the
Director of the Institute of Museum and Library Services by
this section and any function transferred or granted to such
Director of the Institute of Museum and Library Services
after the effective date of this section to such officers and
employees of the Institute of Museum and Library Services as
the Director of the Institute of Museum and Library Services
may designate, and may authorize successive redelegations of
such functions as may be necessary or appropriate, except
that any delegation of any such functions with respect to
libraries shall be made to the Deputy Director of the Office
of Library Services and with respect to museums shall be made
to the Deputy Director of the Office of Museum Services. No
delegation of functions by the Director of the Institute of
Museum and Library Services under this section or under any
other provision of this section shall relieve such Director
of the Institute of Museum and Library Services of
responsibility for the administration of such functions.
(e) Reorganization.--The Director of the Institute of
Museum and Library Services may allocate or reallocate any
function transferred under subsection (b) among the officers
of the Institute of Museum and Library Services, and may
establish, consolidate, alter, or discontinue such
organizational entities in the Institute of Museum and
Library Services as may be necessary or appropriate.
(f) Rules.--The Director of the Institute of Museum and
Library Services may prescribe, in accordance with chapters 5
and 6 of title 5, United States Code, such rules and
regulations as the Director of the Institute of Museum and
Library Services determines to be necessary or appropriate to
administer and manage the functions of the Institute of
Museum and Library Services.
(g) Transfer and Allocations of Appropriations and
Personnel.--Except as otherwise provided in this section, the
personnel employed in connection with, and the assets,
liabilities, contracts, property, records, and unexpended
balances of appropriations, authorizations, allocations, and
other funds employed, used, held, arising from, available to,
or to be made available in connection with the functions
transferred by this section, subject to section 1531 of title
31, United States Code, shall be transferred to the Institute
of Museum and Library Services. Unexpended funds transferred
pursuant to this subsection shall be used only for the
purposes for which the funds were originally authorized and
appropriated.
(h) Incidental Transfers.--The Director of the Office of
Management and Budget, at such time or times as the Director
shall provide, may make such determinations as may be
necessary with regard to the functions transferred by this
section, and make such additional incidental dispositions of
personnel, assets, liabilities, grants, contracts, property,
records, and unexpended balances of appropriations,
authorizations, allocations, and other funds held, used,
arising from, available to, or to be made available in
connection with such functions, as may be necessary to carry
out this section. The Director of the Office of Management
and Budget shall provide for the termination of the affairs
of all entities terminated by this section and for such
further measures and dispositions as may be necessary to
effectuate the purposes of this section.
(i) Effect on Personnel.--
(1) In general.--Except as otherwise provided by this
section, the transfer pursuant to this section of full-time
personnel (except special Government employees) and part-time
personnel holding permanent positions shall not cause any
such employee to be separated or reduced in grade or
compensation for 1 year after the date of transfer of such
employee under this section.
(2) Executive schedule positions.--Except as otherwise
provided in this section, any

[[Page H10793]]

person who, on the day preceding the effective date of this
section, held a position compensated in accordance with the
Executive Schedule prescribed in chapter 53 of title 5,
United States Code, and who, without a break in service, is
appointed in the Institute of Museum and Library Services to
a position having duties comparable to the duties performed
immediately preceding such appointment shall continue to be
compensated in such new position at not less than the rate
provided for such previous position, for the duration of the
service of such person in such new position.
(j) Savings Provisions.--
(1) Continuing effect of legal documents.--All orders,
determinations, rules, regulations, permits, agreements,
grants, contracts, certificates, licenses, registrations,
privileges, and other administrative actions--
(A) that have been issued, made, granted, or allowed to
become effective by the President, any Federal agency or
official of a Federal agency, or by a court of competent
jurisdiction, in the performance of functions that are
transferred under this section; and
(B) that were in effect before the effective date of this
section, or were final before the effective date of this
section and are to become effective on or after the effective
date of this section;

shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked in
accordance with law by the President, the Director of the
Institute of Museum and Library Services or other authorized
official, a court of competent jurisdiction, or by operation
of law.
(2) Proceedings not affected.--This section shall not
affect any proceedings, including notices of proposed
rulemaking, or any application for any license, permit,
certificate, or financial assistance pending before the
Institute of Museum Services on the effective date of this
section, with respect to functions transferred by this
section. Such proceedings and applications shall be
continued. Orders shall be issued in such proceedings,
appeals shall be taken from the orders, and payments shall be
made pursuant to the orders, as if this section had not been
enacted, and orders issued in any such proceedings shall
continue in effect until modified, terminated, superseded, or
revoked by a duly authorized official, by a court of
competent jurisdiction, or by operation of law. Nothing in
this paragraph shall be construed to prohibit the
discontinuance or modification of any such proceeding under
the same terms and conditions and to the same extent that
such proceeding could have been discontinued or modified if
this section had not been enacted.
(3) Suits not affected.--This section shall not affect
suits commenced before the effective date of this section,
and in all such suits, proceedings shall be had, appeals
taken, and judgments rendered in the same manner and with the
same effect as if this section had not been enacted.
(4) Nonabatement of actions.--No suit, action, or other
proceeding commenced by or against the Institute of Museum
Services, or by or against any individual in the official
capacity of such individual as an officer of the Institute of
Museum Services, shall abate by reason of the enactment of
this section.
(5) Administrative actions relating to promulgation of
regulations.--Any administrative action relating to the
preparation or promulgation of a regulation by the Institute
of Museum Services relating to a function transferred under
this section may be continued by the Institute of Museum and
Library Services with the same effect as if this section had
not been enacted.
(k) Transition.--The Director of the Institute of Museum
and Library Services may utilize--
(1) the services of such officers, employees, and other
personnel of the Institute of Museum Services with respect to
functions transferred to the Institute of Museum and Library
Services by this section; and
(2) funds appropriated to such functions for such period of
time as may reasonably be needed to facilitate the orderly
implementation of this section.
(l) References.--A reference in any other Federal law,
Executive order, rule, regulation, or delegation of
authority, or any document of or relating to--
(1) the Director of the Institute of Museum Services with
regard to functions transferred under subsection (b), shall
be deemed to refer to the Director of the Institute of Museum
and Library Services; and
(2) the Institute of Museum Services with regard to
functions transferred under subsection (b), shall be deemed
to refer to the Institute of Museum and Library Services.
(m) Additional Conforming Amendments.--
(1) Recommended legislation.--After consultation with the
appropriate committees of Congress and the Director of the
Office of Management and Budget, the Director of the
Institute of Museum and Library Services shall prepare and
submit to the appropriate committees of Congress recommended
legislation containing technical and conforming amendments to
reflect the changes made by this section.
(2) Submission to congress.--Not later than 6 months after
the effective date of this section, the Director of the
Institute of Museum and Library Services shall submit to the
appropriate committees of Congress the recommended
legislation referred to under paragraph (1).

SEC. 204. SERVICE OF INDIVIDUALS SERVING ON DATE OF
ENACTMENT.

Notwithstanding section 204 of the Museum and Library
Services Act, the individual who was appointed to the
position of Director of the Institute of Museum Services
under section 205 of the Museum Services Act (as such section
was in effect on the day before the date of enactment of this
Act) and who is serving in such position on the day before
the date of enactment of this Act shall serve as the first
Director of the Institute of Museum and Library Services
under section 204 of the Museum and Library Services Act (as
added by section 201 of this title), and shall serve at the
pleasure of the President.

SEC. 205. CONSIDERATION.

Consistent with title 5, United States Code, in appointing
employees of the Office of Library Services, the Director of
the Institute of Museum and Library Services shall give
strong consideration to individuals with experience in
administering State-based and national library and
information services programs.

SEC. 206. TRANSITION AND TRANSFER OF FUNDS.

(a) Transition.--The Director of the Office of Management
and Budget shall take appropriate measures to ensure an
orderly transition from the activities previously
administered by the Director of Library Programs in the
Office of Educational Research and Improvement in the
Department of Education to the activities administered by the
Institute for Museum and Library Services under this title.
Such measures may include the transfer of appropriated funds.
(b) Transfer.--The Secretary of Education shall transfer to
the Director the amount of funds necessary to ensure the
orderly transition from activities previously administered by
the Director of the Office of Library Programs in the Office
of Educational Research and Improvement in the Department of
Education to the activities administered by the Institute for
Museum and Library Services. In no event shall the amount of
funds transferred pursuant to the preceding sentence be less
than $200,000.
TITLE III--EXTENSION OF PROGRAMS

SEC. 301. EXTENSION OF NATIONAL LITERACY ACT OF 1991.

(a) National Workforce Literacy Assistance Collaborative.--
Subsection (c) of section 201 of the National Literacy Act of
1991 (20 U.S.C. 1211-1(c)) is amended by striking
``$5,000,000'' and all that follows through the period and
inserting ``such sums as may be necessary for fiscal year
1997.''.
(b) Functional Literacy and Life Skills Program for State
and Local Prisoners.--Paragraph (3) of section 601(i) of the
National Literacy Act of 1991 (20 U.S.C. 1211-2(i)) is
amended by striking ``$10,000,000'' and all that follows
through the period and inserting ``such sums as may be
necessary for fiscal year 1997.''.

SEC. 302. ADULT EDUCATION ACT AMENDMENTS.

The Adult Education Act (20 U.S.C. 1201 et seq.) is
amended--
(1) in section 312--
(A) in each of subparagraphs (A) and (B) of paragraph (11),
by moving the margins two ems to the right;
(B) in each of paragraphs (11) through (15), by moving the
margins two ems to the right; and
(C) by adding at the end the following:
``(16) The term `family literacy services' means services
that are of sufficient intensity in terms of hours, and of
sufficient duration, to make sustainable changes in a family
and that integrate all of the following activities:
``(A) Interactive literacy activities between parents and
their children.
``(B) Training for parents on how to be the primary teacher
for their children and full partners in the education of
their children.
``(C) Parent literacy training.
``(D) An age-appropriate education program for children.'';
(2) in section 313(a), by striking ``the fiscal year
1991,'' and all that follows through ``1995'' and inserting
``fiscal year 1997'';
(3) in section 321, by inserting ``and family literacy
services'' after ``and activities'';
(4) in the first sentence of section 322(a)(1), by
inserting ``and family literacy services'' after ``adult
education programs'';
(5) in section 341(a), by inserting ``and for family
literacy services'' after ``adult education'';
(6) in section 356(k), by striking ``$25,000,000'' and all
that follows through the period and inserting ``such sums as
may be necessary for fiscal year 1997.'';
(7) in section 371(e)(1), by striking ``the fiscal year
1991,'' and all that follows through the period and inserting
``fiscal year 1997.'';
(8) in section 384, by striking subsections (c) through
(n); and
(9) by adding at the end the following:

``SEC. 386. NATIONAL INSTITUTE FOR LITERACY.

``(a) Establishment.--
``(1) In general.--There is established the National
Institute for Literacy (in this section referred to as the
`Institute'). The Institute shall be administered under the
terms of an interagency agreement entered into by the
Secretary of Education with the Secretary of Labor and the
Secretary of Health and Human Services (in this section
referred to as the `Interagency Group'). The Interagency
Group may include in the Institute any research and
development center, institute, or clearinghouse established
within the

[[Page H10794]]

Department of Education, the Department of Labor, or the
Department of Health and Human Services whose purpose is
determined by the Interagency Group to be related to the
purpose of the Institute.
``(2) Offices.--The Institute shall have offices separate
from the offices of the Department of Education, the
Department of Labor, and the Department of Health and Human
Services.
``(3) Board recommendations.--The Interagency Group shall
consider the recommendations of the National Institute for
Literacy Advisory Board (in this section referred to as the
`Board') established under subsection (d) in planning the
goals of the Institute and in the implementation of any
programs to achieve such goals.
``(4) 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 improve the quality
and accountability of the adult basic skills and literacy
delivery system by--
``(A) providing national leadership for the improvement and
expansion of the system for delivery of literacy services;
``(B) coordinating the delivery of such services across
Federal agencies;
``(C) identifying effective models of basic skills and
literacy education for adults and families that are essential
to success in job training, work, the family, and the
community;
``(D) supporting the creation of new methods of offering
improved literacy services;
``(E) funding a network of State or regional adult literacy
resource centers to assist State and local public and private
nonprofit efforts to improve literacy by--
``(i) encouraging the coordination of literacy services;
``(ii) carrying out evaluations of the effectiveness of
adult education and literacy activities;
``(iii) enhancing the capacity of State and local
organizations to provide literacy services; and
``(iv) serving as a reciprocal link between the Institute
and providers of adult education and literacy activities for
the purpose of sharing information, data, research,
expertise, and literacy resources;
``(F) supporting the development of models at the State and
local level of accountability systems that consist of goals,
performance measures, benchmarks, and assessments that can be
used to improve the quality of adult education and literacy
activities;
``(G) providing information, and other program improvement
activities to national, State, and local organizations, such
as--
``(i) improving the capacity of national, State, and local
public and private organizations that provide literacy and
basic skills services, professional development, and
technical assistance, such as the State or regional adult
literacy resource centers referred to in subparagraph (E);
and
``(ii) establishing a national literacy electronic database
and communications network;
``(H) working with the Interagency Group, Federal agencies,
and the Congress to ensure that such Group, agencies, and the
Congress have the best information available on literacy and
basic skills programs in formulating Federal policy with
respect to the issues of literacy, basic skills, and
workforce and career development; and
``(I) assisting with the development of policy with respect
to literacy and basic skills.
``(2) Grants, contracts, and agreements.--The Institute may
make grants to, or enter into contracts or cooperative
agreements with, individuals, public or private institutions,
agencies, organizations, or consortia of such institutions,
agencies, or organizations to carry out the activities of the
Institute. 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 consultation with the
Board, may award fellowships, with such stipends and
allowances as the Director considers 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 activities to advance the
field of adult education or literacy, including the training
of volunteer literacy providers at the national, State, or
local level.
``(3) Interns and volunteers.--The Institute, in
consultation with the Board, may award paid and unpaid
internships to individuals seeking to assist the Institute in
carrying out its mission. Notwithstanding section 1342 of
title 31, United States Code, the Institute may accept and
use voluntary and uncompensated services as the Institute
determines necessary.
``(d) National Institute for Literacy Advisory Board.--
``(1) Establishment.--
``(A) In general.--There is established a National
Institute for Literacy Advisory Board. The Board shall
consist of 10 individuals appointed by the President, with
the advice and consent of the Senate, from individuals who--
``(i) are not otherwise officers or employees 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 subparagraph (A) are--
``(i) literacy organizations and providers of literacy
services, including--

``(I) nonprofit providers of literacy services;
``(II) providers of programs and services involving English
language instruction; and
``(III) providers of services receiving assistance under
this title;

``(ii) businesses that have demonstrated interest in
literacy programs;
``(iii) literacy students;
``(iv) experts in the area of literacy research;
``(v) State and local governments; and
``(vi) representatives of employees.
``(2) Duties.--The Board--
``(A) shall make recommendations concerning the appointment
of the Director and staff of the Institute;
``(B) shall provide independent advice on the operation of
the Institute; and
``(C) shall receive reports from the Interagency Group and
the Director.
``(3) Federal advisory committee act.--Except as otherwise
provided, the Board established by this subsection shall be
subject to the provisions of the Federal Advisory Committee
Act (5 U.S.C. App.).
``(4) 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 rotation in which \1/3\ of the members are
selected each year. Any such member may be appointed for not
more than 2 consecutive terms.
``(B) Vacancy appointments.--Any member appointed to fill a
vacancy occurring before the expiration of the term for which
the member's predecessor was appointed shall be appointed
only for the remainder of that term. A member may serve after
the expiration of that member's term until a successor has
taken office. 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 affect the powers of the Board.
``(5) Quorum.--A majority of the members of the Board shall
constitute a quorum but a lesser number may hold hearings.
Any recommendation of the Board may be passed only by a
majority of the Board's members present.
``(6) Election of officers.--The Chairperson and Vice
Chairperson of the Board shall be elected by the members of
the Board. The term of office of the Chairperson and Vice
Chairperson shall be 2 years.
``(7) Meetings.--The Board shall meet at the call of the
Chairperson or a majority of the members of the Board.
``(e) Gifts, Bequests, and Devises.--The Institute may
accept, administer, and use gifts or donations of services,
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 Federal
Government.
``(g) Director.--The Interagency Group, after considering
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 competitive 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 report
biennially to the Committee on Economic and Educational
Opportunities of the House of Representatives and the
Committee on Labor and Human Resources of the Senate. Each
report submitted under this subsection shall include--
``(1) a comprehensive and detailed description of the
Institute's operations, activities, financial condition, and
accomplishments in the field of literacy for the period
covered by the report;
``(2) a description of how plans for the operation of the
Institute for the succeeding two fiscal years will facilitate
achievement of the goals of the Institute and the goals of
the literacy programs within the Department of Education, the
Department of Labor, and the Department of Health and Human
Services; and
``(3) any additional minority, or dissenting views
submitted by members of the Board.
``(k) Funding.--Any amounts appropriated to the Secretary
of Education, the Secretary of Labor, or the Secretary of
Health and Human Services for purposes that the Institute is
authorized to perform under this section may be provided to
the Institute for such purposes.
``(l) Authorization of Appropriations.--There are
authorized to be appropriated

[[Page H10795]]

$10,000,000 for fiscal year 1997 and such sums as may be
necessary for each of the fiscal years 1998 through 2002 to
carry out this section.''.

SEC. 303. EXTENSION OF CARL D. PERKINS VOCATIONAL AND APPLIED
TECHNOLOGY EDUCATION ACT.

Subsection (a) of section 3 of the Carl D. Perkins
Vocational and Applied Technology Act is amended by striking
``appropriated'' and all that follows through ``1995'' and
inserting ``appropriated for fiscal year 1997 such sums as
may be necessary''.
TITLE IV--REPEALS AND CONFORMING AMENDMENTS

SEC. 401. REPEALS.

(a) General Immediate Repeals.--The following provisions
are repealed:
(1) Section 204 of the Immigration Reform and Control Act
of 1986 (8 U.S.C. 1255a note).
(2) Title II of Public Law 95-250 (92 Stat. 172).
(3) The Library Services and Construction Act (20 U.S.C.
351 et seq.).
(4) Part F of the Technology for Education Act of 1994
(contained in title III of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7001 et seq.)).
(5) Section 211 of the Appalachian Regional Development Act
of 1965 (40 U.S.C. App. 211).
(6) Title VII of the Stewart B. McKinney Homeless
Assistance Act (42 U.S.C. 11421 et seq.), except subtitle B
and section 738 of such title (42 U.S.C. 11431 et seq. and
11448).
(b) Immediate Repeal of Higher Education Act of 1965
Provisions.--The following provisions of the Higher Education
Act of 1965 (20 U.S.C. 1001 et seq.) 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 3 of subpart 2 of part A of title IV (20 U.S.C.
1070a-31 et seq.), relating to presidential access
scholarships.
(5) Chapter 4 of subpart 2 of part A of title IV (20 U.S.C.
1070a-41 et seq.), relating to model program community
partnerships and counseling grants.
(6) Section 409B (20 U.S.C. 1070a-52), relating to an early
awareness information program.
(7) Chapter 8 of subpart 2 of part A of title IV (20 U.S.C.
1070a-81), relating to technical assistance for teachers and
counselors.
(8) Subpart 8 of part A of title IV (20 U.S.C. 1070f),
relating to special child care services for disadvantaged
college students.
(9) Section 428J (20 U.S.C. 1078-10), relating to loan
forgiveness for teachers, individuals performing national
community service and nurses.
(10) Section 486 (20 U.S.C. 1093), relating to training in
financial aid services.
(11) Subpart 1 of part H of title IV (20 U.S.C. 1099a et
seq.) relating to State postsecondary review programs.
(12) Part A of title V (20 U.S.C. 1102 et seq.), relating
to State and local programs for teacher excellence.
(13) Part B of title V (20 U.S.C. 1103 et seq.), relating
to national teacher academies.
(14) Subpart 1 of part C of title V (20 U.S.C. 1104 et
seq.), relating to Paul Douglas teacher scholarships.
(15) Subpart 3 of part C of title V (20 U.S.C. 1106 et
seq.), relating to the teacher corps.
(16) Subpart 3 of part D of title V (20 U.S.C. 1109 et
seq.), relating to class size demonstration grants.
(17) Subpart 4 of part D of title V (20 U.S.C. 1110 et
seq.), relating to middle school teaching demonstration
programs.
(18) Subpart 1 of part E of title V (20 U.S.C. 1111 et
seq.), relating to new teaching careers.
(19) Subpart 1 of part F of title V (20 U.S.C. 1113),
relating to the national mini corps programs.
(20) Section 586 (20 U.S.C. 1114), relating to
demonstration grants for critical language and area studies.
(21) Section 587 (20 U.S.C. 1114a), relating to development
of foreign languages and cultures instructional materials.
(22) Subpart 4 of part F of title V (20 U.S.C. 1116),
relating to faculty development grants.
(23) Section 597 and subsection (b) of section 599 (20
U.S.C. 1117a and 1117c), relating to early childhood staff
training and professional enhancement.
(24) Section 605 (20 U.S.C. 1124a), relating to intensive
summer language institutes.
(25) Section 607 (20 U.S.C. 1125a), relating to periodicals
and other research material published outside the United
States.
(26) Part A of title VII (20 U.S.C. 1132b et seq.),
relating to improvement of academic and library facilities.
(27) Title VIII (20 U.S.C. 1133 et seq.), relating to
cooperative education programs.
(28) Part D of title X (20 U.S.C. 1135f), relating to the
Dwight D. Eisenhower leadership program.
(c) Immediate Repeal of Education Amendments of 1986
Provisions.--The following provisions of the Higher Education
Amendments of 1986 are repealed:
(1) Part D of title XIII (20 U.S.C. 1029 note), relating to
library resources.
(2) Part E of title XIII (20 U.S.C. 1221-1 note), relating
to a National Academy of Science study.
(3) Part B of title XV (20 U.S.C. 4441 et seq.), relating
to Native Hawaiian and Alaska Native culture and art
development.
(d) Immediate Repeal of Education Amendments of 1974
Provision.--Section 519 of the Education Amendments of 1974
(20 U.S.C. 1221i) is repealed.
(e) Immediate Repeal of Education Amendments of 1992
Provisions.--The following provisions of the Higher 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), relating to
American Indian teacher training.
(3) Section 1406 (20 U.S.C. 1221e-1 note), relating to a
national survey of factors associated with participation.
(4) Section 1409 (20 U.S.C. 1132a note), relating to a
study of environmental hazards in institutions of higher
education.
(5) Section 1412 (20 U.S.C. 1101 note), relating 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 postsecondary education materials.
(7) Part C of title XV (20 U.S.C. 1101 note), relating to a
school-based decisionmakers demonstration program.
(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.

SEC. 402. CONFORMING AMENDMENTS.

(a) References to Section 204 of the Immigration Reform and
Control Act of 1986.--The table of contents for the
Immigration Reform and Control Act of 1986 is amended by
striking the item relating to section 204 of such Act.
(b) References to Title II of Public Law 95-250.--Section
103 of Public Law 95-250 (16 U.S.C. 79l) is amended--
(1) by striking the second sentence of subsection (a); and
(2) by striking the second sentence of subsection (b).
(c) References to Library Services and Construction Act.--
(1) Technology for education act of 1994.--The Technology
for Education Act of 1994 (20 U.S.C. 6801 et seq.) is amended
in section 3113(10) by striking ``section 3 of the Library
Services and Construction Act;'' and inserting ``section 213
of the Library Services and Technology Act;''.
(2) Omnibus education reconciliation act of 1981.--Section
528 of the Omnibus Education Reconciliation Act of 1981 (20
U.S.C. 3489) is amended--
(A) by striking paragraph (12); and
(B) by redesignating paragraphs (13) through (15) as
paragraphs (12) through (14), respectively.
(3) Elementary and secondary education act of 1965.--
Section 3113(10) of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 6813(10)) is amended by striking
``section 3 of the Library Services and Construction Act''
and inserting ``section 213 of the Library Services and
Technology Act''.
(4) Community improvement volunteer act of 1994.--Section
7305 of the Community Improvement Volunteer Act of 1994 (40
U.S.C. 276d-3) is amended--
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) through (6) as
paragraphs (1) through (5), respectively.
(5) Appalachian regional development act of 1965.--Section
214(c) of the Appalachian Regional Development Act of 1965
(40 U.S.C. App. 214(c)) is amended by striking ``Library
Services and Construction Act;''.
(6) Demonstration cities and metropolitan development act
of 1966.--Section 208(2) of the Demonstration Cities and
Metropolitan Development Act of 1966 (42 U.S.C. 3338(2)) is
amended by striking ``title II of the Library Services and
Construction Act;''.
(7) Public law 87-688.--Subsection (c) of the first section
of the Act entitled ``An Act to extend the application of
certain laws to American Samoa'', approved September 25, 1962
(48 U.S.C. 1666(c)) is amended by striking ``the Library
Services Act (70 Stat. 293; 20 U.S.C. 351 et seq.),''.
(8) Communications act of 1934.--Paragraph (4) of section
254(h) of the Communications Act of 1934 (47 U.S.C.
254(h)(4)) is amended by striking ``library not eligible for
participation in State-based plans for funds under title III
of the Library Services and Construction Act (20 U.S.C. 335c
et seq.)'' and inserting ``library or library consortium not
eligible for assistance from a State library administrative
agency under the Library Services and Technology Act''.
(d) Reference to School Dropout Assistance Act.--Section
441 of the General Education Provisions Act (42 U.S.C.
1232d), as amended by section 261(f) of the Improving
America's Schools Act of 1994, is further amended by striking
``(subject to the provisions of part C of title V of the
Elementary and Secondary Education Act of 1965)''.
(e) References to Title VII of the Stewart B. McKinney
Homeless Assistance Act.--
(1) Table of contents.--The table of contents of the
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 1142
et seq.) is amended by striking the items relating to title
VII of such Act, except subtitle B and section 738 of such
title.
(2) Title 31, united states code.--Section 6703(a) of title
31, United States Code, is amended--

[[Page H10796]]

(A) by striking paragraph (15); and
(B) by redesignating paragraphs (16) through (19) as
paragraphs (15) through (18), respectively.
(f) References to Institute of Museum Services.--
(1) Title 5, united states code.--Section 5315 of title 5,
United States Code, is amended by striking the following:
``Director of the Institute of Museum Services.'' and
inserting the following:
``Director of the Institute of Museum and Library
Services.''.
(2) Department of education organization act.--Section 301
of the Department of Education Organization Act (20 U.S.C.
3441) is amended--
(A) in subsection (a)--
(i) by striking paragraph (5); and
(ii) by redesignating paragraphs (6) and (7) as paragraphs
(5) and (6), respectively; and
(B) in subsection (b)--
(i) by striking paragraph (4); and
(ii) by redesignating paragraphs (5) through (7) as
paragraphs (4) through (6), respectively.
(3) Elementary and secondary education act of 1965.--
(A) Sections 2101(b), 2205(c)(1)(D), 2208(d)(1)(H)(v), and
2209(b)(1)(C)(vi), and subsections (d)(6) and (e)(2) of
section 10401 of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6621(b), 6645(c)(1)(D), 6648(d)(1)(H)(v),
6649(b)(1)(C)(vi), and 8091 (d)(6) and (e)(2)) are amended by
striking ``the Institute of Museum Services'' and inserting
``the Institute of Museum and Library Services''.
(B) Section 10412(b) of such Act (20 U.S.C. 8102(b)) is
amended--
(i) in paragraph (2), by striking ``the Director of the
Institute of Museum Services,'' and inserting ``the Director
of the Institute of Museum and Library Services,''; and
(ii) in paragraph (7), by striking ``the Director of the
Institute of Museum Services,'' and inserting ``the Director
of the Institute of Museum and Library Services,''.
(C) Section 10414(a)(2)(B) of such Act (20 U.S.C.
8104(a)(2)(B)) is amended by striking clause (iii) and
inserting the following new clause:
``(iii) the Institute of Museum and Library Services.''.
(g) References to Office of Libraries and Learning
Resources.--Section 413(b)(1) of the Department of Education
Organization Act (20 U.S.C. 3473(b)(1)) is amended--
(1) by striking subparagraph (H); and
(2) by redesignating subparagraphs (I) through (M) as
subparagraphs (H) through (L), respectively.
(h) References to State Postsecondary Review Entity
Programs.--The Higher Education Act of 1965 is amended--
(1) in section 356(b)(2) (20 U.S.C. 10696(b)), by striking
``II,'';
(2) in section 453(c)(2) (20 U.S.C. 1087c(c)(2))--
(A) by striking subparagraph (E); and
(B) by redesignating subparagraphs (F) through (H) as
subparagraphs (E) through (G), respectively;
(3) in section 487(a)(3) (20 U.S.C. 1094(a)(3)), by
striking subparagraph (B) and redesignating subparagraphs (C)
and (D) as subparagraphs (B) and (C), respectively;
(4) in section 487(a)(15) (20 U.S.C. 1094(a)(15)), by
striking ``the Secretary of Veterans Affairs, and State
review entities under subpart 1 of part H'' and inserting
``and the Secretary of Veterans Affairs'';
(5) in section 487(a)(21) (20 U.S.C. 1094(a)(21)), by
striking ``, State postsecondary review entities,'';
(6) in section 487(c)(1)(A)(i) (20 U.S.C.
1094(c)(1)(A)(i)), by striking ``State agencies, and the
State review entities referred to in subpart 1 of part H''
and inserting ``and State agencies'';
(7) in section 487(c)(4) (20 U.S.C. 1094(c)(4)), by
striking ``, after consultation with each State review entity
designated under subpart 1 of part H,'';
(8) in section 487(c)(5) (20 U.S.C. 1094(c)(5)), by
striking ``State review entities designated under subpart 1
of part H,'';
(9) in section 496(a)(7) (20 U.S.C. 1099b(a)(7)), by
striking ``and the appropriate State postsecondary review
entity'';
(10) in section 496(a)(8) (20 U.S.C. 1099b(a)(8)), by
striking ``and the State postsecondary review entity of the
State in which the institution of higher education is
located'';
(11) in section 498(g)(2) (20 U.S.C. 1099c(g)(2)), by
striking everything after the first sentence;
(12) in section 498A(a)(2)(D) (20 U.S.C. 1099c-1(a)(2)(D)),
by striking ``by the appropriate State postsecondary review
entity designated under subpart 1 of this part or'';
(13) in section 498A(a)(2) (20 U.S.C. 1099c-1(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
(14) in section 498A(a)(3) (20 U.S.C. 1099c-1(a)(3))--
(A) by inserting ``and'' after the semicolon at the end of
subparagraph (C);
(B) by striking ``; and'' at the end of subparagraph (D)
and inserting a period; and
(C) by striking subparagraph (E).

The SPEAKER pro tempore (Ms. Greene of Utah). Pursuant to the rule,
the gentleman from California [Mr. McKeon] and the gentleman from
Missouri [Mr. Clay] each will control 20 minutes.
The Chair recognizes the gentleman from California [Mr. McKeon].
Mr. MCKEON. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise today in support of H.R. 1720, the Government
Sponsored Enterprise Privatization Act of 1996.
This important legislation will: privatize two government sponsored
enterprises, Sallie Mae and Connie Lee; eliminate over 40 unfunded
higher education programs including the State Postsecondary Review
Entities or SPREE's; consolidate and improve Federal library and museum
programs; and extend for 1 year the National Literacy Act, the Adult
Education and Literacy Act, and the Carl D. Perkins Vocational and
Applied Technology Education Act, which otherwise will expire on
September 30 of this year.
I would like to focus my remarks on the higher education provisions
in this legislation, and in particular the privatization of Sallie Mae
and Connie Lee.
The Student Loan Marketing Association, or Sallie Mae, was
established in 1972 under a Federal charter authorized by part B of
title IV of the Higher Education Act. At that time, there was a
tremendous need for a secondary market that would purchase student
loans from lenders, freeing up capital so that those lenders could
continue to make student loans. Under it Federal charter, Sallie Mae
gained certain advantages, including the ability to raise large amounts
of capital in a cost effective way. People across the nation invested
in this public-private partnership, knowing that their investment was
also fostering access to higher education.
However, times have changed. Today, there is an extremely competitive
secondary market for student loans, and the practice of securitization
has made it far easier for financial institutions to raise capital for
student loans. Now there is ample private capital available for student
loans, and virtually every eligible student has access to student
loans. The Federal charter which initially helped Sallie Mae assist
students is now hampering Sallie Mae's ability to put its expertise to
work in the private market to provide services outside of the student
loan arena. Clearly the time has come when it is advantageous to both
the taxpayer and Sallie Mae to allow Sallie Mae to become a fully
private company with no Federal ties and no government sponsored
advantages.
The legislation before us today gives Sallie Mae's stockholders the
right to vote to reorganize and become a private company. Upon voting
to reorganize, the existing Government Sponsored Enterprise [GSE] will
continue to purchase student loans until September 30, 2007. On
September 30, 2008, the GSE will dissolve, and 1 year later the charter
legislation found in the Higher Education Act will be repealed. In the
event Sallie Mae's stockholders vote against reorganization, Sallie Mae
will have until July 1, 2013 to wind down its business and dissolve the
GSE.
In privatizing Sallie Mae, both the taxpayer and Sallie Mae are
clearly winners. Sallie Mae is freed from a burdensome Federal charter
and allowed to apply its expertise to compete in new markets. And, as
Sallie Mae profits, so will the taxpayer. Upon privatization, Sallie
Mae will be required to pay for the use of the Sallie Mae name. In
addition, the Government will receive stock warrants from Sallie Mae.
If a new and private Sallie Mae is successful and the price of its
stock rises, the Treasury will be able to cash in these warrants, and
the taxpayer will profit along with the new company.
As with Sallie Mae, the College Construction Loan Insurance
Association, or Connie Lee, is another example of a successful public-
private partnership which has served its purpose. Connie Lee was
created by Congress under title VII of the Higher Education Amendments
of 1986. At that time, the deterioration of physical infrastructure
such as buildings and physical plants was a pressing problem for
institutions of higher education, and financing facilities improvements
was an option only for schools of the highest credit caliber. Connie
Lee was created to underwrite the financing of these needed
improvements; leveraging large amounts of capital with little risk to
the government.

[[Page H10797]]

However, Connie Lee has never enjoyed the advantages of most
government sponsored enterprises. In fact, the only Government help
Connie Lee has received was start-up capital, in return for which
Government received stock in Connie Lee. And, the law which created
Connie Lee also narrowly limited the business activities which Connie
Lee could pursue. Clearly, Connie Lee was always meant to be a private
company.
For Connie Lee, privatization means the ability to determine its own
destiny. Privatization will allow Connie Lee to use its expertise in
facilities underwriting to help secure funding for elementary and
secondary schools, higher education facilities, and local municipal
projects. In return, the taxpayer is relieved of any implicit risk,
should Connie Lee have future financial difficulties.
This legislation simply repeals the authorizing legislation which
created Connie Lee, thereby freeing Connie Lee of from the restrictions
of the Higher Education Act which limit the types of business in which
Connie Lee can engage. The Treasury is directed to sell the stock
currently owned by the U.S. Government within a set period of time in
order to fully sever all Federal ties. In the event that the Treasury
Department is unable to sell this stock, this legislation requires
Connie Lee to buy it back at a price that is fair to both Connie Lee
and the taxpayer. Connie Lee will no longer have any Federal charter or
any ties to the Federal Government.
Privatizing Sallie Mae and Connie Lee is simply good government for
the 1990's. This legislation frees the American taxpayer from
subsidizing activities which will flourish long after government
sponsorship has ceased. It also shows a willingness on the part of this
Congress to take a public-private partnership and turn it into a fully
private venture when Government support is no longer necessary. This
legislation represents a carefully crafted compromise between Connie
Lee and Sallie Mae, the administration, and the potential competitors
of these newly privatized firms. In the process, it paves the way to a
future of smaller, less intrusive government. Both of these companies
want to be fully private firms. It is time for us as a Congress to
sever our ties to them.
In addition to privatizing two Government sponsored enterprises, the
legislation before us today begins to streamline the Higher Education
Act by eliminating over 40 programs which are completely unfunded. I am
pleased to note that among these programs is the State Postsecondary
Review Entities, or SPREEs, which creates excessive and burdensome
paperwork requirements for schools, represents an unwarranted State
intrusion into their campuses, and in some cases poses a threat to
their educational missions. As with the SPREEs, all of these programs
were enacted with the best of intentions. However, eliminating these
unfunded provisions will simplify our higher education law and help
reduce the size of government.
Unfortunately, the legislation before us today represents only a
fraction of the reform in the area of job training and education that
I, along with other members on the Opportunities Committee, worked so
hard in moving forward during the last 2 years. Under H.R. 1617,
otherwise referred to as the Careers Act, over 120 programs would have
been consolidated into block grants to States and localities;
communities would have had more flexibility to target resources where
they were most needed; and thousands of Americans would have been able
to secure training vouchers in order to upgrade their skills at
educational institutions of their choosing. Unfortunately, change is
always difficult, and there was a ground swell of support for the
status quo--which is why today we are able to move only a small portion
of the original Careers legislation. But let me make this very clear. I
fully intend to continue this endeavor. I will push forward with a job
training system which provides flexibility to States; maintains
accountability and empowers individuals to learn.
Madam Speaker, the Government Sponsored Enterprise Privatization Act
is straight-forward, commonsense legislation. It represents a modest
but earnest effort to reduce the size and scope of government, and it
does so in a way that benefits both the taxpayer and private
enterprise. This legislation does not cost the government or the
taxpayer a dime, and in fact it will save money, but it will also pave
the way to a future of smaller, less intrusive government. I urge my
colleagues to support this legislation and vote ``yes'' on H.R. 1720.
Madam Speaker, I reserve the balance of my time.
Mr. CLAY. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I reluctantly rise in support of H.R. 1720 which
provides straight reauthorizations for three education programs
scheduled to expire at the end of this year. Those programs are the
National Literacy Act, the Adult Education Act, and the Carl D. Perkins
Vocational and Applied Technology Education Act. The 1-year extensions
included in this bill will help add some certainty to these programs as
they continue to compete for funding through the appropriations
process.
In addition, the legislation includes changes to other programs that
were worked out through bipartisan negotiations involving both the
House and the Senate earlier this year.
This bill provides for the privatization of two Government-sponsored
enterprises, Sallie Mae and Connie Lee. I have already voted in support
of privatization and will do so again today, but, as I said, with
reluctance. Let me explain my apprehension.
Last Thursday, in response to a request by a member of my staff for
harmless information from Sallie Mae regarding privatization revenue,
Sallie Mae mistakenly faxed him a document which strongly suggests
possible partisan work by Sallie Mae officials on behalf of the
Republicans.
There are at least two very disturbing things about the document.
First, the document is referred to as a ``candidate's package,'' and it
is a highly charged, partisan document that will help Republicans
attack the direct loan program and gives them ammunition to defend
themselves against the accurate charges that they have tried to cut
student loans.
The second alarming thing about the fax is that it includes a cover
page showing that the document was sent to a Republican representative,
the gentleman from Virginia, Mr. Tom Davis, by one of Sallie Mae's
House lobbyists. That fax page has a note on it to Mr. Davis that says,
and I quote, ``Here's the full candidate's package.'' Other details
about this bizarre and potentially illegal activity are described in
this morning's Washington Post.
However, I might say in defense of Sallie Mae that the president and
chief executive officer wrote a letter to me dated September 18, where
he says that, and I quote, ``The document which I have subsequently
read is completely inappropriate in its language and tone, and I am at
a loss to express my disappointment that this should have happened.
This material was not sanctioned nor reviewed by either myself or
senior management.''
Also, the chairman of the board wrote to President Clinton and he
noted that he had directed that an internal investigation be conducted
and that appropriate disciplinary action be taken against those
individuals responsible for this document.
Madam Speaker, I think that the appropriate agencies and
congressional committees have an obligation to fully investigate this
matter, and until that happens, a dark cloud will hang over the issue
of Sallie Mae's privatization.
Madam Speaker, I reserve the balance of my time.
Mr. McKEON. Madam Speaker, I yield 2 minutes to the gentleman from
Wisconsin [Mr. Gunderson], a strong supportive member of the committee.
(Mr. GUNDERSON asked and was given permission to revise and extend
his remarks.)
Mr. GUNDERSON. Madam Speaker, I regret we are not here passing a
comprehensive careers bill. I regret, like Mr. Clay, that there was any
political activity that was in any way involved in this, and I think we
all ought to make sure that does not happen again.
But having said all that, I rise in strong support of this bill
because if this is the best that we can do this session, then this is
exactly what we should do.
Many of us are aware that we tried to define priorities in this
Congress, balancing the budget, figuring out what programs ought to
still be a primary Federal role and which ones ought not.

[[Page H10798]]

I think there is little doubt in this body on a bipartisan basis that
we have come to that point in time when Sallie Mae and Connie Lee no
longer justify being Government-sponsored enterprises. More than that,
they do not want to continue to be Government-sponsored enterprises
constrained by those restrictions. And, more than that, by privatizing
them, we actually can make some money that we can direct toward other
human resource programs that are so important.

{time} 1330

So we have done that in this bill, we have done it with Sallie Mae
over a period of time, making sure that before the year 2005 they would
continue to use Sallie Mae for its primary purposes. Any other business
activities would have to occur by a separately created business
enterprise.
Likewise with Connie Lee. We have made it clear that, as we look at
the changing dynamics in school construction certainly on the higher
education level, that they ought to be freed up once they disavow
themselves of any Federal Government bonds to go into that private
sector and provide that kind of insurance.
But this bill also does some other things that everyone ought to be
for. For example, we not only reauthorize the library and museum
programs, but we move them into important incentives for distance
learning and the Internet use. We target funds for the disabled and the
illiterate, and we limit administrative expenses so that more dollars
can actually be spent on services and delivery of services to people.
Finally, as was mentioned by our leader, the gentleman from
California [Mr. McKeon], we do important things in adult education and
literacy. I encourage all of my colleagues to vote for this bill.
Mr. CLAY. Madam Speaker, I yield 2 minutes to the gentleman from
Florida [Mr. Deutsch].
Mr. DEUTSCH. Madam Speaker, I rise in support of this legislation. As
all of us are aware, the existence of the direct student loan program
is limiting the market for guaranteed student loans. Sallie Mae's
restrictive Federal charter provides it with no viable option for
replacing business loss to direct lending and to other student loan
financing vehicles and to the other 40 or more secondary markets. These
factors dim Sallie Mae's future financial prospects. Sallie Mae's
privatization will relieve taxpayers of over $50 billion in implicit
liabilities.
On September 20, in a speech in Portland, OR, President Clinton said,
and I quote:

``We're going to privatize organizations that can now work
better in the private sector, like Sallie Mae. We've got the
direct student loan program. They need to be able to do some
other things as well.''

In return for its privatization, Sallie Mae will pay to the
Government $5 million for the use of the Sallie Mae name and issue
500,000 stock warrants to the Government, allowing taxpayers to benefit
from the future success of the fully private Sallie Mae; subsidizing an
effort that will no longer need subsidizing; and making the Government
more efficient.
Madam Speaker, I urge the support of the bill.
Mr. McKEON. Madam Speaker, I yield 2 minutes to the gentleman from
Wisconsin [Mr. Klug].
Mr. KLUG. Madam Speaker, I thank my colleague from California for
yielding me this time and congratulate him and also the chairman of the
full committee, the gentleman from Pennsylvania [Mr. Goodling] for this
important piece of legislation on privatizing Sallie Mae.
When the Speaker asked me at the beginning of the last session of
Congress to lay out a number of targets of opportunity for
privatization, this was high on everyone's list, and we have actually
had a fair amount of success this Congress with the naval petroleum
reserves and selling off the United States Enrichment Corporation,
getting the National Weather Service out in some specialty crop
forecasting, asking the IRS to use private debt collection firms to
augment its collection of outstanding taxpayer bills. But this piece of
legislation today I think is extraordinarily important for one major
reason, and that is for the first time in history we have a Government-
sponsored enterprise stepping forward and saying we no longer want any
ties with the Government; we want the ability to stand on our own.
And it makes sense because when Sallie Mae was first established in
1972 to create a secondary market for federally guaranteed student
loans, there was a huge shortage in the marketplace. But since that
time there are now 47 different participants and thousands of lenders
nationwide who are now originating loans and financing them in a
variety of ways.
Madam Speaker, Sallie Mae at this point is essentially handicapped
from being able to enter new lines of business. It is a Government-
sponsored enterprise which is withering on the vine. Today we will get
the Government regulations out of the way and allow Sallie Mae and also
Connie Lee to compete in the private sector, and perhaps fundamentally
more important, we will remove nearly $50 billion, that is $50 billion,
in implicit liabilities now insured by U.S. taxpayers.
I know that my colleagues on the Committee on Economic and
Educational Opportunities were disappointed that they could not move
forward a comprehensive career bill, but I think at the end of the day,
privatizing Sallie Mae is a tremendous accomplishment for both the
committee itself and also this Congress as a whole.
Mr. CLAY. Madam Speaker, I yield 4 minutes to the gentlewoman from
Florida [Mrs. Meek].
Mrs. MEEK of Florida. Madam Speaker, I rise to sort of prick the
Congress' conscience about some of the things that happen in H.R. 1720.
I was one of the 79 people on this floor who voted against this bill
when it came before us before, and today, as I read the conference
report on the Privatization Act, I do not see too many changes in the
concerns which I had the very first time.
I voted against the bill at that time not because of the Sallie Mae
situation, in that I thought that was a progressive move to try to
consolidate and to try to make the entire program move more smoothly,
but I cannot sit here and not tell my colleagues that some of the
things that they left out of this bill which were so appealing and so
begged for in their committee, they still did not make any changes this
time.
First of all, I disagree vehemently about the way they decided to
close out some of the programs which are currently funded as if they
were just by Topsy, be able to adjust themselves to the changes which
they have made or did not make in 1790 that were so many.
First of all, I want to give my colleagues just a little bit of
information. I worked in higher education for 40 odd years straight
through, and I saw how these Federal programs worked as far as the
scholarship programs, financial aid, all of them worked. Many of them
worked very haphazardly, and many students were left out, but at least
we did much better than we are doing in 1720 because in 1720 we are
stopping most of these programs; I think about 40 of them have been
eliminated. I may have that figure wrong, but about 53 of them have
been eliminated according to their report here.
Now I call Members' attention to the fellowships which allow many
students to not be able to continue. I also call their attention to the
fact that they have completely ignored the needs of disabled students
who desire and who really must have some access to higher education.
Disabled students have their rights. They passed the American
Disabilities Act some time ago, so these disabled students really need
the rights which they had in the first in the beginning, and they
decided to eliminate those at this time. They repeal the development
grants which would allow faculty people to be trained so that they
could work with disabled students. There are many, many disabled
students throughout the colleges and institutions in this country could
benefit if they had faculty members who were trained to the point that
they could help these students. Disabled students, I want my colleagues
to understand, desire and need the ability to have good teaching and
good instruction as well as any other students. So they do need
teachers who are trained to teach them how to read, just as one would
any other students.

[[Page H10799]]

I thought some of the dissenting views at the back of this bill
really incorporated the kinds of things that I am calling to my
colleagues' attention this morning, and there will be others this
morning who will disagree and not support this bill, not because of the
privatization of Sallie Mae. That is not why. But they will because
they failed to pay any attention to the needs of students throughout
this country.
Now if it were not for some of the minority education programs that
they have funded in the past, many minorities and women would not have
received postgraduate education. It is because they really received
some Federal aid in terms of education. So there is a reciprocal reward
for people having received graduate education and how to be able to
train women to teach women and to do minorities and to allow them to
get the professional training and graduate training which they need to
carry this on.
I could go on and on because of the 53 programs that they cut out,
but I cannot sit down without appealing a little bit for the libraries
of this country. My colleagues have heard, and I know my time is out so
I will say, by their repealing 53 programs, they made no attempt to put
them back is not a good thing.
Mr. McKEON. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, just in response to my dear friend from Florida, let
me just say that this maybe is a different version of the bill than she
has seen. Of the 41 programs on the list that we have in this bill,
four of them did receive a total of $8.8 million in fiscal year 1995.
However, in 1996 the administration did not request any funds for these
four programs nor were funds requested for fiscal year 1997, and none
were provided. So there is no funding for any of the programs that we
have cut.
Madam Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois
[Mr. Hastert] who has been very supportive in getting this bill to the
floor.
Mr. HASTERT. Madam Speaker, I wish to thank the majority leader, the
gentleman from Texas [Mr. Armey], the Committee on Economic and
Educational Opportunity chairman, the gentleman from Pennsylvania [Mr.
Goodling], and certainly the opportunity to work with the chairman of
the opportunity subcommittee in answering my request in bring
legislation to authorize library services to the House floor. H.R.
1720, the Government sponsored Enterprise Privatization Act improves
the provisions of the Library Services and Technology Act. This bill
authorizes $150 million for library services for fiscal year 1977 and
insures the authorization necessary for fiscal years 1998 through the
year 2002.
Madam Speaker, the program has wide bipartisan support in both houses
of congress, and it is important that we continue it. I am very pleased
it will be continued. Many local libraries have used these funds to
assist them with expansion projects and to purchase new equipment. This
legislation will make these programs even more effective by making
these programs more flexible and easier to use. At the same time it
will give libraries the ability to keep up with the information age
with access to new technologies and allowing them to share resources.
Communities in my district have greatly benefitted from this program.
In the past year along Elgin, Aurora, and Mendota have greatly improved
their community services in libraries in addition to towns like Geneva
and St. Charles and Warrenville in order to better serve the needs of
its residents. Because of these grants, Mendota Graves Hume Public
Library is proceeding with its Multi-county Rural Cooperative
Collection Management program. This program allows libraries to fill
specific needs for one another; Aurora public library's implementing
its changing resources and changing world, and in Elgin, the public
library's district resources through shared technology.
Madam Speaker, I ask for a positive vote on this bill.
Mr. CLAY. Madam Speaker, I yield 3 minutes to the gentleman from
Pennsylvania [Mr. Kanjorski].
Mr. KANJORSKI. Madam Speaker, first of all may I congratulate both
the gentlemen on the majority side and minority side for taking up in
the closing moments of the 104th Congress a very important piece of
legislation that will allow for the privatizing of Sallie Mae. There
are members of the minority such as the gentleman from Florida [Mr.
Peterson] and the gentleman from Texas [Mr. Edwards] and myself who
have worked diligently during this session of the Congress to promote
privatization of Sallie Mae. It is an institution that has matured, and
under this legislation it will meet new needs of college students and
colleges and universities after the privatization of both Sallie Mae
and Connie Lee. It is an effort that we can all move forward with
pride.
It is, I think, a very good example of the privatization from the
standpoint that I think what the American people really want us to do
is to recognize when organizations become mature and can be self-
sufficient and can enter into the private market to assume risks that
government no longer has to underwrite. This is a perfect example of
this accomplishment. It also allows for direct lending to continue, but
it provides that Sallie Mae, by being able to enter into other
activities, can make itself much more self-sufficient and supportive of
the obligations that presently exist in the marketplace and otherwise
would have to be guaranteed by the United States Government.
To my friend from Florida, I should say, ``Dr. Meek,'' we are remiss
if we did not call to her attention that some of the programs that have
been left out of this bill pending on the floor are only programs that
have been unfunded and they are being now deauthorized, but this
legislation will not have an adverse impact and is nothing nearly as
severe as what previously came out of the committee.
What is now being offered is a very streamlined bill. It provides
primarily for privatization, of Sallie Mae and Connie Lee, and then it
does reauthorize some programs and, of course, provides for the
development of a program for library services.
I would urge my colleagues both on the minority side and the majority
side, in the spirit of the statements of the gentleman from Wisconsin
[Mr. Gunderson] to the full House just a few minutes ago to the effect
that here is an opportunity for all of us in a very mature manner who
have studied this for a long period of time to see something done
right. Passage of this bill does mean reform or change, and it means
privatization, but in none of those instances is it radical or extreme.
It is using the marketplace and the free market system to perform what
government had to perform before, and it does so in a very positive,
straightforward and open method.
So I simply compliment the leadership on the majority side and the
minority side for having attained this compromise, and I urge my
colleagues to support the bill, in spite of the fact that there were
some political problems that did arise. None of us are innocent of
those kinds of problems. Sometimes our staff and some of our friends
have excesses, we have to allow for that, but I think everybody on both
sides of the aisle and the White House are comfortable with this bill.
I urge all my colleagues to support its passage.

{time} 1345

Mr. CLAY. Madam Speaker, I yield back the balance of my time.
Mr. McKEON. Madam Speaker, I yield 2 minutes to the gentleman from
California [Mr. Cunningham], a good friend who is chairman of the
Subcommittee on Early Childhood, Youth, and Families, and has
responsibility for the library portion of the bill.
[Mr. CUNNINGHAM asked and was given permission to add extraneous
materials.)
Mr. CUNNINGHAM. Madam Speaker, I rise in support of H.R. 1720. Let me
tell the Members why. I think especially there are three main parts:
The creation of the Institute for Museum and Library Services; adult
education and literacy programs; privatization of Sallie Mae.
We had a monumental debate here on the House floor with the issue of
85-15, which I believe will be resolved in this particular case. Rather
than speak from my notes, Madam Speaker, let me tell the Members why I
think it is even more important.
In education we have less than 12 percent of our schools that have
even a

[[Page H10800]]

single phone jack. If we are going to prepare our children for the 21st
century, there must be the fiber optics and the modernization. Even
there the schools do not have library services enough to meet those
needs.
If we can link up those libraries in our colleges, our public
libraries, and yes, even here in Washington, DC, think about how that
will help this country. When we talk about the delta, the difference
between the successful and the poor, the answer is education. We will
find chronologically gifted folks at libraries; we will find the very
young at libraries, as well. Whether it is through job training or
whether it is through education services, this bill goes a long way to
help that.
I think the telecommunications bill that we passed encourages that,
and I think there are ways we can work with Members on the other side
of the aisle as far as reform in our tax system, to where we can
encourage those private enterprises that will invest in our children,
which is a way of investing in the future. Part of that is our library
services and our job training.
Perhaps we have not gone far enough in this particular Congress in
job training. I will give that to my colleagues on the other side of
the aisle. But I think there is an area which we can work on in the
next Congress that will be beneficial as far as the libraries.
The library portion was being threatened because it was in a portion
of the bill that we placed it in that may not make it through by the
end of this Congress. This legislation, I think, helps remedy that. It
has bipartisan support. I would like to thank the gentlemen on both
sides of the aisle.
Madam Speaker, I rise in support of H.R. 1720. I would like to bring
attention to four important parts of this legislation: The creation of
the Institute for Museum and Library Services, the renewal of certain
adult education and literacy programs, the privatization of Sallie Mae,
and the resolution of the so-called 85-15 issue.
The Institute of Museum and Library Services:
With the close help of America's museum and library communities, this
legislation creates an Institute of Museum and Library Services. It
merges the Institute of Museum Services and our Federal Library
Services and Construction Act programs into one organization. We do
this for three reasons.
First, museums and libraries are first and foremost deliverers of
information. Through books and exhibits, microfiche, video, and the
Internet, they can and do work together for the benefit of citizens and
communities.
Second, the advance of the information age is transforming how people
obtain information. So we have placed a new focus on the Federal role
in these programs toward electronically linking libraries and museums
to one another, to other agencies and services, and to communities,
schools, and citizens. We all know that the printing press
revolutionized Europe in the Middle Ages by making books available to
everyone. Today's Internet has that same potential: to bring people and
information together from a whole world apart, with the simple point
and click of a mouse.
And third, the IMLS simplifies the administration of Federal museum
and library programs, while maintaining their unique and useful
character. Its leadership will alternate from leaders in libraries or
museums. The IMLS library division will make simplified grants to State
library agencies. And the IMLS museum portion will continue awarding
grants to local museum organizations.
At this point, I would like to include for the Record letters of
support from California.
Madam Speaker, our libraries and museums are a national treasure.
They are a free and open institution of learning for every American,
regardless of wealth or background. They provide information, help
people find jobs, offer entertainment, and unite our communities. They
represent the best in America. In short, they work. And while most of
their funding is from local, State, and private resources, the Federal
Government has a role. By adopting this legislation, we provide the
catalyst to help bring our museums and libraries into the 21st century.
Renewal of adult education and literacy programs:
H.R. 1720 also continues the authorization for our Federal adult
education and literacy programs. Adult education provides individuals
who lack the most basic skills--such as literacy, English proficiency,
or a high school equivalency diploma--the tools they need to have a
fighting chance at the American dream. An individual who cannot read or
perform basic math cannot hope to find a good job, or to benefit from
job training.
Simply put, our investment in effective adult education transforms
those who are dependent upon society into contributors to society. Like
the library and museum portion of H.R. 1720, these provisions were
included in the CAREERS legislation which is stalled in the Senate. It
deserves our support.
Privatizing Sallie Mae:
Sallie Mae, the Student Loan Marketing Association, is a Government-
sponsored enterprise, owned by private stockholders, that provides a
secondary market for student loan financing. When President Clinton
advanced his direct lending initiative, it limited Sallie Mae's
traditional market, and impacted Sallie Mae stockholders.
I oppose President Clinton's direct lending plan because, over 7
years, it costs taxpayers $1 billion more to provide the same number of
student loans as private markets. And while the President has sought to
have direct lending replace private markets, Congress has limited the
growth of direct lending. Nevertheless, direct lending is a fact of
life today. Its existence unfairly impacts the thousands of senior
citizens, private pensions, and other Americans who own stock in Sallie
Mae.
Allowing Sallie Mae stockholders the opportunity to vote to privatize
is simply a matter of fairness. The legislation structures any
privatization carefully, so taxpayers and citizens alike get their
money's worth.
Partial resolution of 85-15:
This legislation also contains a partial resolution of the so-called
85-15 issue. The 85-15 policy enacted by Congress has been implemented
retroactively on for-profit institutions of higher learning. Such
schools are made responsible for their compliance with regulations
before they were published on May 1, 1994. This kind of retroactive
enforcement is simply un-American.
Our bill ends retroactive, preregulatory enforcement of the 85-15
rule.
Unfortunately, H.R. 1720 does not make a further necessary reform
which I support. The measure does not exclude Federal training money
from the 15 percent of a for-profit school's income coming from sources
other than the Higher Education Act. As we all know, Federal training
programs are not authorized by the Higher Education Act. They are
authorized under other legislation. But the Department of Education has
been enforcing 85-15 contrary to the will and intent of Congress. I am
confident we will revisit this issue.
Support H.R. 1720:
I urge all of my colleagues to support H.R. 1720. It's good for
libraries and museums, for our children and our seniors, for students,
and for many of our excellent for-profit educational institutions.
Madam Speaker, I include for the Record the following letters:

California State Library,

Sacramento, CA, September 23, 1996.
Hon. Randy ``Duke'' Cunningham,
U.S. House of Representatives, Washington, DC.
Dear Congressman Cunningham: The California State Library
applauds your initiatives to pass the successor to the
Library Services and Construction Act (LSCA) with the forward
thinking Library Services and Technology Act (LSTA), and we
support the passage of H.R. 1720 to achieve this goal.
Thank you for your continued efforts on behalf of
California library users.
Yours sincerely,
Dr. Kevin Starr,
State Librarian of California.
P.S.--You have become the champion of public libraries! All
of us are grateful to you for you vision and leadership!
KS.
____

California Library of

Services Board,

Sacramento, CA, September 23, 1996.
Hon. Randy ``Duke'' Cunningham,
U.S. House of Representatives, Washington, DC.
Dear Congressman Cunningham: On behalf of the public
libraries of California, I support the Library Services and
Technology Act that is in H.R. 1720. This Act will provide
much needed assistance to our libraries using state based
priorities. Our libraries support your efforts to help our
children be lifelong readers, and to incorporate the new
technologies in their development as productive adults in our
society.
Sincerely,
Joan K. Kallenberg,
President.
____

Escondido Public Library,

Escondido, CA, September 23, 1996.
Dear Congressman Cunningham: The Escondido Public Library
applauds your initiatives to pass the successor to the
Library Services and Construction Act (LSCA) with the
forward-thinking Library Services and Technology Act (LSTA).
We would appreciate a ``yes'' vote for the passage of H.R.
1720 to achieve this goal.
Thank you for continued efforts on behalf of California
Library users.
Sincerely.
Barbara L. Loomis,
Assistant City Librarian.

Mr. McKEON. Madam Speaker, I yield 3 minutes to my friend, the
gentleman from Virginia, Mr. Tom Davis.
(Mr. DAVIS asked and was given permission to revise and extend his
remarks.)
Mr. DAVIS. Madam Speaker, let me first say that I think the incident
the

[[Page H10801]]

gentleman from Missouri [Mr. Clay] has referred to was regrettable. We
know it was not sanctioned from Sallie Mae. It was not requested from
our office, I can tell the gentleman, in terms of a candidate package.
We obviously are always happy to hear from our corporate constituents
over any issue of concern, but somebody I think acted a little
overzealously.
I want to thank the gentleman from Missouri for the way he has
handled this and note how, on our side, when there were efforts to take
away the tax exemption from the NEA, I was one of the Republicans who
do not believe in getting even with your enemies, and am in support of
their continued tax exemption, and the same with the PIRGS. In that
spirit, we are moving ahead and staying with the issue.
Sallie Mae has permanent roots within the 11th Congressional
District. When I was chairman of the county board we helped move their
permanent headquarters out there, and they have been a great corporate
citizen. I have seen the kind of partner they have been to our northern
Virginia community, bringing hundreds of high technology jobs to our
community and the promise of stable employment for years to come.
But they bring a lot with it. Already, their work in the Reston
community with the Reston Interfaith Center and the Embry Rucker
Shelter are legendary. I know their employees will touch many more
northern Virginia charities as time goes on.
Sallie Mae is about to embark upon a great new adventure as a
corporation, which will benefit northern Virginia and the American
people. For northern Virginia, privatization will mean more jobs as
Sallie Mae expands its business beyond student loans. It means that the
state-of-the-art Reston technology center is a resource for more than
just students and parents, but for more of Virginia's and America's
families and businesses.
Congress should not miss this historic opportunity to recharter a
Government-sponsored enterprise as a fully private company, but it must
act while the company is still healthy and before it encounters further
economic uncertainties. Sallie Mae is a company on the cutting edge of
technology with a rare knowledge of the higher education community. I
am confident that by allowing the company to build upon its student
loan business, it will serve a number of public needs that could not be
anticipated by this Congress or the next.
We should not pass up the chance to relieve the American taxpayer of
nearly $50 billion or more in implicit liability for Sallie Mae's
obligations. I therefore urge passage of this bill.
Madam Speaker, I would express my thanks to the chairman, the
gentleman from California [Mr. McKeon], the gentleman from California
[Mr. Cunningham], the gentleman from Missouri [Mr. Clay], and all those
concerned.
Mr. McKEON. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I want to take this time to thank the gentleman from
Missouri [Mr. Clay], ranking Member of the full committee, for his
leadership and support in helping bring this bill to the floor, even
though there were problems that have been discussed. I think he is to
be commended for that. I appreciate it on a personal note.
Madam Speaker, I would like to urge a strong ``yes'' vote for this
bill.
Mr. GOODLING. Mr. Speaker, today I rise in support of H.R. 1720, the
Government-sponsored Enterprise Privatization Act of 1996. This
legislation will privatize two Government-sponsored enterprises, the
Student Loan Marketing Association ``Sallie Mae'' and the College
Construction Loan Insurance Association ``Connie Lee''. In addition, it
provides for the elimination of more than 40 unfunded programs found in
the Higher Education Act, consolidates and improves Federal library and
museum programs, and provides extensions for the National Literacy Act,
the Adult Education and Literacy Act, and the Carl D. Perkins
Vocational and Applied Technology Act.
Sallie Mae and Connie Lee are both Government-sponsored enterprises
chartered under the Higher Education Act. Both are for-profit,
stockholder owned companies which have successfully fulfilled their
intended purposes. After more than a year of discussions with the
Treasury Department with respect to privatization, I am happy to
support this bill that paves the way for a smooth transition to private
sector status which works for Sallie Mae, Connie Lee, and the Federal
Government.
The bill before us also extends the Adult Education Act for 1 year
and although it does not make major improvements to the act, we have
included one important change. H.R. 1720 clarifies that funds under the
Adult Education Act may be used for family literacy programs.
If we are going to effectively reduce the number of adults who are
illiterate, we must work with families. Children with parents who can
help them with their school work have a greater likelihood of
succeeding in school. Family literacy programs provide adults with the
education and parenting skills necessary to help their children succeed
in school. At the same time, they work with children to improve their
academic skills. While some States do use their adult education funds
for family literacy programs, it is important that we amend current law
to clarify that this is an allowable use of funds.
Finally, this legislation extends the authorization for the National
Institute for Literacy and revises current law to allow the Institute
to more effectively assist with national efforts to improve the
literacy level of our country's citizens.
My one regret about H.R. 1720, is that it represents only a small
fraction of the reform in the area of job training and education that I
have pushed for during this Congress. My committee devoted a huge
amount of time to consolidating job training programs into block grants
to States and localities that would have resulted in greater
flexibility in this Country's efforts to enhance our job training
system. Unfortunately, the Senate has been unable to bring H.R. 1617,
the full CAREERS legislation, to the Senate floor, so today we are
considering a small portion of that legislation.
With that one regret, I strongly support passage of H.R. 1720.
Mr. CUNNINGHAM. Madam Speaker, I rise in support of H.R. 1720. I
would like to bring attention to four important parts of this
legislation: the creation of the Institute for Museum and Library
Services, the renewal of certain adult education and literacy programs,
the privatization of Sallie Mae, and the resolution of the so-called
85-15 issue.

the institute of museum and library services

With the close help of America's museum and library communities, this
legislation creates an Institute of Museum and Library Services. It
merges the Institute of Museum Services and our Federal Library
Services and Construction Act programs into one organization. We do
this for three reasons.
First, museums and libraries are first and foremost delivers of
information. Through books and exhibits, microfiche, video, and the
Internet, they can and do work together for the benefit of citizens and
communities.
Second, the advance of the Information Age is transforming how people
obtain information. So we have placed a new focus on the Federal role
in these programs--toward electronically linking libraries and museums
to one another, to other agencies and services, and to communities,
schools, and citizens. We all know that the printing press
revolutionized Europe in the Middle Ages by making books available to
everyone. Today's Internet has that same potential--to bring people and
information together from a whole world apart, with the simple point
and click of a mouse.
And third, the IMLS simplifies the administration of Federal museum
and library programs, while maintaining their unique and useful
character. Its leadership will alternate from leaders in libraries or
museums. The IMLS library division will make simplified grants to State
library agencies. And the IMLS museums portion will continue awarding
grants to local museum organizations.
I have already included for the Record letters of support from the
California State Libraries, and others.
Mr. Speaker, our libraries and museums are a national treasure. They
are a free and open institution of learning for every American,
regardless of wealth or background. They provide information, help
people find jobs, offer entertainment, and unite our communities. They
represent the best in America. In short, they work. And while most of
their funding is from local, State and private resources, the Federal
Government has a role. By adopting this legislation, we provide the
catalyst to help bring our museums and libraries into the 21st Century.

renewal of adult education and literacy programs

H.R. 1720 also continues the authorization for our Federal adult
education and literacy programs. Adult education provides individuals
who lack the most basic skills--such as literacy, English proficiency,
or a high school equivalency diploma--the tools they need to have a
fighting chance at the American dream. An individual who cannot read or
perform basic math cannot hope to find a good job, or to benefit from
job training.
Simply put, our investment in effective adult eduation transforms
those who are dependent

[[Page H10802]]

upon society into contributors to society. Like the library and museum
portion of H.R. 1720, these provisions were included in the CAREERS
legislation which is stalled in the Senate. It deserves our support.

privatizing sallie mae

Sallie Mae, the Student Loan Marketing Association, is a Government-
sponsored enterprise, owned by private stockholders, that provides a
secondary market for student loan financing. When President Clinton
advanced his Direct Lending initiative, it limited Sallie Mae's
traditional market, and impacted Sallie Mae stockholders.
I oppose President Clinton's direct lending plan because, over 7
years, it costs taxpayers $1 billion more to provide the same number of
student loans as private markets. And while the President has sought to
have direct lending replace private markets, Congress has limited the
growth of direct lending. Nevertheless, direct lending is a fact of
life today. Its existence unfairly impacts the thousands of senior
citizens, private pensions, and other Americans who own stock in Sallie
Mae.
Allowing Sallie Mae stockholders the opportunity to vote to privatize
is simply a matter of fairness. The legislation structures any
privatization carefully, so taxpayers and citizens alike get their
money's worth.

partial resolution of 85-15

This legislation also contains a partial resolution of the so-called
85-15 issue. The 85-15 policy enacted by Congress has been implemented
retroactively on for-profit institutions of higher learning. Such
schools are made responsible for their compliance with regulations
before they were published on May 1, 1994. This kind of retroactive
enforcement is simply un-American.
Our bill ends retroactive, preregulatory enforcement of the 85-15
rule.
Unfortunately, H.R. 1720 does not make a further necessary reform
which I support. The measure does not exclude Federal training money
from the 15 percent of a forprofit school's income coming from sources
other than the Higher Education Act. As we all know, Federal training
programs are not authorized by the Higher Education Act. They are
authorized under other legislation. But the Department of Education has
been enforcing 85-15 contrary to the will and intent of Congress. I am
confident we will revisit this issue.

support of 1720

I urge all my colleagues to support H.R. 1720. It is good for
libraries and museums, for our children and our seniors, for students,
and for many of our excellent forprofit educational institutions. Thank
you, and I yield back the balance of my time.
Mr. ROBERTS. Madam Speaker, I rise in support of H.R. 1720, the
Government-Sponsored Enterprise Privatization Act of 1996. In
particular, I am pleased that H.R. 1720 includes the privatization of
the Student Loan Marketing Association, or Sallie Mae.
Sallie Mae has fulfilled the mission of its Federal charter. However,
as a for-profit, stockholder owned company, Sallie Mae wishes to
continue to operate without the support of U.S. taxpayers and without
restrictions from the U.S. Government. Sallie Mae's interest in
privatization clearly shows that it remains committed to continuing its
strong record in providing student loan servicing for hundreds of
thousands of Americans.
H.R. 1720 is an excellent example of how a properly managed
Government program can use Federal resources to serve the American
public and successfully make the transition to private business without
Government assistance.
Mr. McKEON. Madam Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore (Ms. Greene of Utah). The question is on the
motion offered by the gentleman from California [Mr. McKeon], that the
House suspend the rules and pass the bill, H.R. 1720, as amended.
The question was taken; and (two-thirds of those having voted in
favor thereof) the rules were suspended and the bill as amended, was
passed.
The title was amended so as to read: ``A bill to reorganize the
Student Loan Marketing Association, to privatize the College
Construction Loan Insurance Association, to amend the Museum Services
Act to include provisions improving and consolidating Federal library
service programs, and for other purposes.''
A motion to reconsider was laid on the table.

____________________