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

• SHORT TITLE — Table of Contents
• PART A — General Provisions
• PART B — Assistance for Education of All Children with Disabilities
• PART C — Infants and Toddlers with Disabilities
• PART D — National Activities to Improve Education of Children with Disabilities
• CHAPTER 1 — Improving Early Intervention, Educational, and Transitional Services and Results for Children with Disabilities through Coordinated Research and Personnel Preparation
• CHAPTER 2 — Improving Early Intervention, Educational, and Transitional Services and Results for Children with Disabilities through Coordinated Technical Assistance, Support, and Dissemination of Information

`PART D—NATIONAL ACTIVITIES TO IMPROVE EDUCATION OF CHILDREN WITH DISABILITIES

`Subpart 1--State Program Improvement Grants for Children with Disabilities

`SEC. 651. FINDINGS AND PURPOSE.

`(a) FINDINGS- The Congress finds the following:

`(1) States are responding with some success to multiple pressures to improve educational and transitional services and results for children with disabilities in response to growing demands imposed by ever-changing factors, such as demographics, social policies, and labor and economic markets.

`(2) In order for States to address such demands and to facilitate lasting systemic change that is of benefit to all students, including children with disabilities, States must involve local educational agencies, parents, individuals with disabilities and their families, teachers and other service providers, and other interested individuals and organizations in carrying out comprehensive strategies to improve educational results for children with disabilities.

`(3) Targeted Federal financial resources are needed to assist States, working in partnership with others, to identify and make needed changes to address the needs of children with disabilities into the next century.

`(4) State educational agencies, in partnership with local educational agencies and other individuals and organizations, are in the best position to identify and design ways to meet emerging and expanding demands to improve education for children with disabilities and to address their special needs.

`(5) Research, demonstration, and practice over the past 20 years in special education and related disciplines have built a foundation of knowledge on which State and local systemic-change activities can now be based.

`(6) Such research, demonstration, and practice in special education and related disciplines have demonstrated that an effective educational system now and in the future must--

`(A) maintain high academic standards and clear performance goals for children with disabilities, consistent with the standards and expectations for all students in the educational system, and provide for appropriate and effective strategies and methods to ensure that students who are children with disabilities have maximum opportunities to achieve those standards and goals;

`(B) create a system that fully addresses the needs of all students, including children with disabilities, by addressing the needs of children with disabilities in carrying out educational reform activities;

`(C) clearly define, in measurable terms, the school and post-school results that children with disabilities are expected to achieve;

`(D) promote service integration, and the coordination of State and local education, social, health, mental health, and other services, in addressing the full range of student needs, particularly the needs of children with disabilities who require significant levels of support to maximize their participation and learning in school and the community;

`(E) ensure that children with disabilities are provided assistance and support in making transitions as described in section 674(b)(3)(C);

`(F) promote comprehensive programs of professional development to ensure that the persons responsible for the education or a transition of children with disabilities possess the skills and knowledge necessary to address the educational and related needs of those children;

`(G) disseminate to teachers and other personnel serving children with disabilities research-based knowledge about successful teaching practices and models and provide technical assistance to local educational agencies and schools on how to improve results for children with disabilities;

`(H) create school-based disciplinary strategies that will be used to reduce or eliminate the need to use suspension and expulsion as disciplinary options for children with disabilities;

`(I) establish placement-neutral funding formulas and cost-effective strategies for meeting the needs of children with disabilities; and

`(J) involve individuals with disabilities and parents of children with disabilities in planning, implementing, and evaluating systemic-change activities and educational reforms.

`(b) PURPOSE- The purpose of this subpart is to assist State educational agencies, and their partners referred to in section 652(b), in reforming and improving their systems for providing educational, early intervention, and transitional services, including their systems for professional development, technical assistance, and dissemination of knowledge about best practices, to improve results for children with disabilities.

`SEC. 652. ELIGIBILITY AND COLLABORATIVE PROCESS.

`(a) ELIGIBLE APPLICANTS- A State educational agency may apply for a grant under this subpart for a grant period of not less than 1 year and not more than 5 years.

`(b) PARTNERS-

`(1) REQUIRED PARTNERS-

`(A) CONTRACTUAL PARTNERS- In order to be considered for a grant under this subpart, a State educational agency shall establish a partnership with local educational agencies and other State agencies involved in, or concerned with, the education of children with disabilities.

`(B) OTHER PARTNERS- In order to be considered for a grant under this subpart, a State educational agency shall work in partnership with other persons and organizations involved in, and concerned with, the education of children with disabilities, including--

`(i) the Governor;

`(ii) parents of children with disabilities;

`(iii) parents of nondisabled children;

`(iv) individuals with disabilities;

`(v) organizations representing individuals with disabilities and their parents, such as parent training and information centers;

`(vi) community-based and other nonprofit organizations involved in the education and employment of individuals with disabilities;

`(vii) the lead State agency for part C;

`(viii) general and special education teachers, and early intervention personnel;

`(ix) the State advisory panel established under part C;

`(x) the State interagency coordinating council established under part C; and

`(xi) institutions of higher education within the State.

`(2) OPTIONAL PARTNERS- A partnership under subparagraph (A) or (B) of paragraph (1) may also include--

`(A) individuals knowledgeable about vocational education;

`(B) the State agency for higher education;

`(C) the State vocational rehabilitation agency;

`(D) public agencies with jurisdiction in the areas of health, mental health, social services, and juvenile justice; and

`(E) other individuals.

`SEC. 653. APPLICATIONS.

`(a) IN GENERAL-

`(1) SUBMISSION- A State educational agency that desires to receive a grant under this subpart shall submit to the Secretary an application at such time, in such manner, and including such information as the Secretary may require.

`(2) STATE IMPROVEMENT PLAN- The application shall include a State improvement plan that--

`(A) is integrated, to the maximum extent possible, with State plans under the Elementary and Secondary Education Act of 1965 and the Rehabilitation Act of 1973, as appropriate; and

`(B) meets the requirements of this section.

`(b) DETERMINING CHILD AND PROGRAM NEEDS-

`(1) IN GENERAL- Each State improvement plan shall identify those critical aspects of early intervention, general education, and special education programs (including professional development, based on an assessment of State and local needs) that must be improved to enable children with disabilities to meet the goals established by the State under section 612(a)(16).

`(2) REQUIRED ANALYSES- To meet the requirement of paragraph (1), the State improvement plan shall include at least--

`(A) an analysis of all information, reasonably available to the State educational agency, on the performance of children with disabilities in the State, including--

`(i) their performance on State assessments and other performance indicators established for all children, including drop-out rates and graduation rates;

`(ii) their participation in postsecondary education and employment; and

`(iii) how their performance on the assessments and indicators described in clause (i) compares to that of non-disabled children;

`(B) an analysis of State and local needs for professional development for personnel to serve children with disabilities that includes, at a minimum--

`(i) the number of personnel providing special education and related services; and

`(ii) relevant information on current and anticipated personnel vacancies and shortages (including the number of individuals described in clause (i) with temporary certification), and on the extent of certification or retraining necessary to eliminate such shortages, that is based, to the maximum extent possible, on existing assessments of personnel needs;

`(C) an analysis of the major findings of the Secretary's most recent reviews of State compliance, as they relate to improving results for children with disabilities; and

`(D) an analysis of other information, reasonably available to the State, on the effectiveness of the State's systems of early intervention, special education, and general education in meeting the needs of children with disabilities.

`(c) IMPROVEMENT STRATEGIES- Each State improvement plan shall--

`(1) describe a partnership agreement that--

`(A) specifies--

`(i) the nature and extent of the partnership among the State educational agency, local educational agencies, and other State agencies involved in, or concerned with, the education of children with disabilities, and the respective roles of each member of the partnership; and

`(ii) how such agencies will work in partnership with other persons and organizations involved in, and concerned with, the education of children with disabilities, including the respective roles of each of these persons and organizations; and

`(B) is in effect for the period of the grant;

`(2) describe how grant funds will be used in undertaking the systemic-change activities, and the amount and nature of funds from any other sources, including part B funds retained for use at the State level under sections 611(f) and 619(d), that will be committed to the systemic-change activities;

`(3) describe the strategies the State will use to address the needs identified under subsection (b), including--

`(A) how the State will change State policies and procedures to address systemic barriers to improving results for children with disabilities;

`(B) how the State will hold local educational agencies and schools accountable for educational progress of children with disabilities;

`(C) how the State will provide technical assistance to local educational agencies and schools to improve results for children with disabilities;

`(D) how the State will address the identified needs for in-service and pre-service preparation to ensure that all personnel who work with children with disabilities (including both professional and paraprofessional personnel who provide special education, general education, related services, or early intervention services) have the skills and knowledge necessary to meet the needs of children with disabilities, including a description of how--

`(i) the State will prepare general and special education personnel with the content knowledge and collaborative skills needed to meet the needs of children with disabilities, including how the State will work with other States on common certification criteria;

`(ii) the State will prepare professionals and paraprofessionals in the area of early intervention with the content knowledge and collaborative skills needed to meet the needs of infants and toddlers with disabilities;

`(iii) the State will work with institutions of higher education and other entities that (on both a pre-service and an in-service basis) prepare personnel who work with children with disabilities to ensure that those institutions and entities develop the capacity to support quality professional development programs that meet State and local needs;

`(iv) the State will work to develop collaborative agreements with other States for the joint support and development of programs to prepare personnel for which there is not sufficient demand within a single State to justify support or development of such a program of preparation;

`(v) the State will work in collaboration with other States, particularly neighboring States, to address the lack of uniformity and reciprocity in the credentialing of teachers and other personnel;

`(vi) the State will enhance the ability of teachers and others to use strategies, such as behavioral interventions, to address the conduct of children with disabilities that impedes the learning of children with disabilities and others;

`(vii) the State will acquire and disseminate, to teachers, administrators, school board members, and related services personnel, significant knowledge derived from educational research and other sources, and how the State will, when appropriate, adopt promising practices, materials, and technology;

`(viii) the State will recruit, prepare, and retain qualified personnel, including personnel with disabilities and personnel from groups that are underrepresented in the fields of regular education, special education, and related services;

`(ix) the plan is integrated, to the maximum extent possible, with other professional development plans and activities, including plans and activities developed and carried out under other Federal and State laws that address personnel recruitment and training; and

`(x) the State will provide for the joint training of parents and special education, related services, and general education personnel;

`(E) strategies that will address systemic problems identified in Federal compliance reviews, including shortages of qualified personnel;

`(F) how the State will disseminate results of the local capacity-building and improvement projects funded under section 611(f)(4);

`(G) how the State will address improving results for children with disabilities in the geographic areas of greatest need; and

`(H) how the State will assess, on a regular basis, the extent to which the strategies implemented under this subpart have been effective; and

`(4) describe how the improvement strategies described in paragraph (3) will be coordinated with public and private sector resources.

`(d) COMPETITIVE AWARDS-

`(1) IN GENERAL- The Secretary shall make grants under this subpart on a competitive basis.

`(2) PRIORITY- The Secretary may give priority to applications on the basis of need, as indicated by such information as the findings of Federal compliance reviews.

`(e) PEER REVIEW-

`(1) IN GENERAL- The Secretary shall use a panel of experts who are competent, by virtue of their training, expertise, or experience, to evaluate applications under this subpart.

`(2) COMPOSITION OF PANEL- A majority of a panel described in paragraph (1) shall be composed of individuals who are not employees of the Federal Government.

`(3) PAYMENT OF FEES AND EXPENSES OF CERTAIN MEMBERS- The Secretary may use available funds appropriated to carry out this subpart to pay the expenses and fees of panel members who are not employees of the Federal Government.

`(f) REPORTING PROCEDURES- Each State educational agency that receives a grant under this subpart shall submit performance reports to the Secretary pursuant to a schedule to be determined by the Secretary, but not more frequently than annually. The reports shall describe the progress of the State in meeting the performance goals established under section 612(a)(16), analyze the effectiveness of the State's strategies in meeting those goals, and identify any changes in the strategies needed to improve its performance.

`SEC. 654. USE OF FUNDS.

`(a) IN GENERAL-

`(1) ACTIVITIES- A State educational agency that receives a grant under this subpart may use the grant to carry out any activities that are described in the State's application and that are consistent with the purpose of this subpart.

`(2) CONTRACTS AND SUBGRANTS- Each such State educational agency--

`(A) shall, consistent with its partnership agreement under section 652(b), award contracts or subgrants to local educational agencies, institutions of higher education, and parent training and information centers, as appropriate, to carry out its State improvement plan under this subpart; and

`(B) may award contracts and subgrants to other public and private entities, including the lead agency under part C, to carry out such plan.

`(b) USE OF FUNDS FOR PROFESSIONAL DEVELOPMENT- A State educational agency that receives a grant under this subpart--

`(1) shall use not less than 75 percent of the funds it receives under the grant for any fiscal year--

`(A) to ensure that there are sufficient regular education, special education, and related services personnel who have the skills and knowledge necessary to meet the needs of children with disabilities and developmental goals of young children; or

`(B) to work with other States on common certification criteria; or

`(2) shall use not less than 50 percent of such funds for such purposes, if the State demonstrates to the Secretary's satisfaction that it has the personnel described in paragraph (1)(A).

`(c) GRANTS TO OUTLYING AREAS- Public Law 95-134, permitting the consolidation of grants to the outlying areas, shall not apply to funds received under this subpart.

`SEC. 655. MINIMUM STATE GRANT AMOUNTS.

`(a) IN GENERAL- The Secretary shall make a grant to each State educational agency whose application the Secretary has selected for funding under this subpart in an amount for each fiscal year that is--

`(1) not less than $500,000, nor more than $2,000,000, in the case of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico; and

`(2) not less than $80,000, in the case of an outlying area.

`(b) INFLATION ADJUSTMENT- Beginning with fiscal year 1999, the Secretary may increase the maximum amount described in subsection (a)(1) to account for inflation.

`(c) FACTORS- The Secretary shall set the amount of each grant under subsection (a) after considering--

`(1) the amount of funds available for making the grants;

`(2) the relative population of the State or outlying area; and

`(3) the types of activities proposed by the State or outlying area.

`SEC. 656. AUTHORIZATION OF APPROPRIATIONS.

`There are authorized to be appropriated to carry out this subpart such sums as may be necessary for each of the fiscal years 1998 through 2002.

`Subpart 2--Coordinated Research, Personnel Preparation, Technical Assistance, Support, and Dissemination of Information

`SEC. 661. ADMINISTRATIVE PROVISIONS.

`(a) COMPREHENSIVE PLAN-

`(1) IN GENERAL- The Secretary shall develop and implement a comprehensive plan for activities carried out under this subpart in order to enhance the provision of educational, related, transitional, and early intervention services to children with disabilities under parts B and C. The plan shall include mechanisms to address educational, related services, transitional, and early intervention needs identified by State educational agencies in applications submitted for State program improvement grants under subpart 1.

`(2) PARTICIPANTS IN PLAN DEVELOPMENT- In developing the plan described in paragraph (1), the Secretary shall consult with--

`(A) individuals with disabilities;

`(B) parents of children with disabilities;

`(C) appropriate professionals; and

`(D) representatives of State and local educational agencies, private schools, institutions of higher education, other Federal agencies, the National Council on Disability, and national organizations with an interest in, and expertise in, providing services to children with disabilities and their families.

`(3) PUBLIC COMMENT- The Secretary shall take public comment on the plan.

`(4) DISTRIBUTION OF FUNDS- In implementing the plan, the Secretary shall, to the extent appropriate, ensure that funds are awarded to recipients under this subpart to carry out activities that benefit, directly or indirectly, children with disabilities of all ages.

`(5) REPORTS TO CONGRESS- The Secretary shall periodically report to the Congress on the Secretary's activities under this subsection, including an initial report not later than the date that is 18 months after the date of the enactment of the Individuals with Disabilities Education Act Amendments of 1997.

`(b) ELIGIBLE APPLICANTS-

`(1) IN GENERAL- Except as otherwise provided in this subpart, the following entities are eligible to apply for a grant, contract, or cooperative agreement under this subpart:

`(A) A State educational agency.

`(B) A local educational agency.

`(C) An institution of higher education.

`(D) Any other public agency.

`(E) A private nonprofit organization.

`(F) An outlying area.

`(G) An Indian tribe or a tribal organization (as defined under section 4 of the Indian Self-Determination and Education Assistance Act).

`(H) A for-profit organization, if the Secretary finds it appropriate in light of the purposes of a particular competition for a grant, contract, or cooperative agreement under this subpart.

`(2) SPECIAL RULE- The Secretary may limit the entities eligible for an award of a grant, contract, or cooperative agreement to one or more categories of eligible entities described in paragraph (1).

`(c) USE OF FUNDS BY SECRETARY- Notwithstanding any other provision of law, and in addition to any authority granted the Secretary under chapter 1 or chapter 2, the Secretary may use up to 20 percent of the funds available under either chapter 1 or chapter 2 for any fiscal year to carry out any activity, or combination of activities, subject to such conditions as the Secretary determines are appropriate effectively to carry out the purposes of such chapters, that--

`(1) is consistent with the purposes of chapter 1, chapter 2, or both; and

`(2) involves--

`(A) research;

`(B) personnel preparation;

`(C) parent training and information;

`(D) technical assistance and dissemination;

`(E) technology development, demonstration, and utilization; or

`(F) media services.

`(d) SPECIAL POPULATIONS-

`(1) APPLICATION REQUIREMENT- In making an award of a grant, contract, or cooperative agreement under this subpart, the Secretary shall, as appropriate, require an applicant to demonstrate how the applicant will address the needs of children with disabilities from minority backgrounds.

`(2) OUTREACH AND TECHNICAL ASSISTANCE-

`(A) REQUIREMENT- Notwithstanding any other provision of this Act, the Secretary shall ensure that at least one percent of the total amount of funds appropriated to carry out this subpart is used for either or both of the following activities:

`(i) To provide outreach and technical assistance to Historically Black Colleges and Universities, and to institutions of higher education with minority enrollments of at least 25 percent, to promote the participation of such colleges, universities, and institutions in activities under this subpart.

`(ii) To enable Historically Black Colleges and Universities, and the institutions described in clause (i), to assist other colleges, universities, institutions, and agencies in improving educational and transitional results for children with disabilities.

`(B) RESERVATION OF FUNDS- The Secretary may reserve funds appropriated under this subpart to satisfy the requirement of subparagraph (A).

`(e) PRIORITIES-

`(1) IN GENERAL- Except as otherwise explicitly authorized in this subpart, the Secretary shall ensure that a grant, contract, or cooperative agreement under chapter 1 or 2 is awarded only--

`(A) for activities that are designed to benefit children with disabilities, their families, or the personnel employed to work with such children or their families; or

`(B) to benefit other individuals with disabilities that such chapter is intended to benefit.

`(2) PRIORITY FOR PARTICULAR ACTIVITIES- Subject to paragraph (1), the Secretary, in making an award of a grant, contract, or cooperative agreement under this subpart, may, without regard to the rule making procedures under section 553 of title 5, United States Code, limit competitions to, or otherwise give priority to--

`(A) projects that address one or more--

`(i) age ranges;

`(ii) disabilities;

`(iii) school grades;

`(iv) types of educational placements or early intervention environments;

`(v) types of services;

`(vi) content areas, such as reading; or

`(vii) effective strategies for helping children with disabilities learn appropriate behavior in the school and other community-based educational settings;

`(B) projects that address the needs of children based on the severity of their disability;

`(C) projects that address the needs of--

`(i) low-achieving students;

`(ii) underserved populations;

`(iii) children from low-income families;

`(iv) children with limited English proficiency;

`(v) unserved and underserved areas;

`(vi) particular types of geographic areas; or

`(vii) children whose behavior interferes with their learning and socialization;

`(D) projects to reduce inappropriate identification of children as children with disabilities, particularly among minority children;

`(E) projects that are carried out in particular areas of the country, to ensure broad geographic coverage; and

`(F) any activity that is expressly authorized in chapter 1 or 2.

`(f) APPLICANT AND RECIPIENT RESPONSIBILITIES-

`(1) DEVELOPMENT AND ASSESSMENT OF PROJECTS- The Secretary shall require that an applicant for, and a recipient of, a grant, contract, or cooperative agreement for a project under this subpart--

`(A) involve individuals with disabilities or parents of individuals with disabilities in planning, implementing, and evaluating the project; and

`(B) where appropriate, determine whether the project has any potential for replication and adoption by other entities.

`(2) ADDITIONAL RESPONSIBILITIES- The Secretary may require a recipient of a grant, contract, or cooperative agreement for a project under this subpart--

`(A) to share in the cost of the project;

`(B) to prepare the research and evaluation findings and products from the project in formats that are useful for specific audiences, including parents, administrators, teachers, early intervention personnel, related services personnel, and individuals with disabilities;

`(C) to disseminate such findings and products; and

`(D) to collaborate with other such recipients in carrying out subparagraphs (B) and (C).

`(g) APPLICATION MANAGEMENT-

`(1) STANDING PANEL-

`(A) IN GENERAL- The Secretary shall establish and use a standing panel of experts who are competent, by virtue of their training, expertise, or experience, to evaluate applications under this subpart that, individually, request more than $75,000 per year in Federal financial assistance.

`(B) MEMBERSHIP- The standing panel shall include, at a minimum--

`(i) individuals who are representatives of institutions of higher education that plan, develop, and carry out programs of personnel preparation;

`(ii) individuals who design and carry out programs of research targeted to the improvement of special education programs and services;

`(iii) individuals who have recognized experience and knowledge necessary to integrate and apply research findings to improve educational and transitional results for children with disabilities;

`(iv) individuals who administer programs at the State or local level in which children with disabilities participate;

`(v) individuals who prepare parents of children with disabilities to participate in making decisions about the education of their children;

`(vi) individuals who establish policies that affect the delivery of services to children with disabilities;

`(vii) individuals who are parents of children with disabilities who are benefiting, or have benefited, from coordinated research, personnel preparation, and technical assistance; and

`(viii) individuals with disabilities.

`(C) TRAINING- The Secretary shall provide training to the individuals who are selected as members of the standing panel under this paragraph.

`(D) TERM- No individual shall serve on the standing panel for more than 3 consecutive years, unless the Secretary determines that the individual's continued participation is necessary for the sound administration of this subpart.

`(2) PEER-REVIEW PANELS FOR PARTICULAR COMPETITIONS-

`(A) COMPOSITION- The Secretary shall ensure that each sub-panel selected from the standing panel that reviews applications under this subpart includes--

`(i) individuals with knowledge and expertise on the issues addressed by the activities authorized by the subpart; and

`(ii) to the extent practicable, parents of children with disabilities, individuals with disabilities, and persons from diverse backgrounds.

`(B) FEDERAL EMPLOYMENT LIMITATION- A majority of the individuals on each sub-panel that reviews an application under this subpart shall be individuals who are not employees of the Federal Government.

`(3) USE OF DISCRETIONARY FUNDS FOR ADMINISTRATIVE PURPOSES-

`(A) EXPENSES AND FEES OF NON-FEDERAL PANEL MEMBERS- The Secretary may use funds available under this subpart to pay the expenses and fees of the panel members who are not officers or employees of the Federal Government.

`(B) ADMINISTRATIVE SUPPORT- The Secretary may use not more than 1 percent of the funds appropriated to carry out this subpart to pay non-Federal entities for administrative support related to management of applications submitted under this subpart.

`(C) MONITORING- The Secretary may use funds available under this subpart to pay the expenses of Federal employees to conduct on-site monitoring of projects receiving $500,000 or more for any fiscal year under this subpart.

`(h) PROGRAM EVALUATION- The Secretary may use funds appropriated to carry out this subpart to evaluate activities carried out under the subpart.

`(i) MINIMUM FUNDING REQUIRED-

`(1) IN GENERAL- Subject to paragraph (2), the Secretary shall ensure that, for each fiscal year, at least the following amounts are provided under this subpart to address the following needs:

`(A) $12,832,000 to address the educational, related services, transitional, and early intervention needs of children with deaf-blindness.

`(B) $4,000,000 to address the postsecondary, vocational, technical, continuing, and adult education needs of individuals with deafness.

`(C) $4,000,000 to address the educational, related services, and transitional needs of children with an emotional disturbance and those who are at risk of developing an emotional disturbance.

`(2) RATABLE REDUCTION- If the total amount appropriated to carry out sections 672, 673, and 685 for any fiscal year is less than $130,000,000, the amounts listed in paragraph (1) shall be ratably reduced.