SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Presidential Honors Scholarship Act 
of 1996''.

SEC. 2. PRESIDENTIAL HONORS SCHOLARSHIP PROGRAM.

    Part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1001 et seq.) is amended by inserting after subpart 6 the following new 
subpart:

          ``Subpart 7--Presidential Honors Scholarship Program

``SEC. 420A. PRESIDENTIAL HONORS SCHOLARSHIP PROGRAM.

    ``(a) Purpose.--It is the purpose of this subpart to establish a 
Presidential Honors Scholarship Program to encourage high academic 
achievement in public and private secondary schools and to recognize 
and reward the achievement of their outstanding graduates.
    ``(b) Program Authority.--The Secretary is authorized, in 
accordance with this subpart, to carry out a program of recognizing 
high academic achievement in public and private secondary schools by 
awarding scholarships to all students in the top 5 percent of their 
graduating class, and thereby encouraging students to excel in their 
secondary studies and pursue postsecondary education.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated $130,000,000 for fiscal year 1998, and such sums as may be 
necessary for each of the 4 succeeding fiscal years, to carry out the 
purposes of this subpart. Funds shall remain available for obligation 
until the end of the fourth fiscal year immediately succeeding the 
fiscal year for which such funds were appropriated.
    ``(d) Terms of Scholarships.--
            ``(1) Amount of scholarship.--(A) The amount of a 
        scholarship awarded under this subpart shall be $1,000.
            ``(B) Notwithstanding subparagraph (A), if funds available 
        in a fiscal year are insufficient to fully fund all 
        scholarships under this subpart, the amount paid to each 
        student shall be reduced proportionately.
            ``(C) Notwithstanding any other provision of this title, a 
        scholarship awarded under this part--
                    ``(i) shall not be counted in determining the 
                student's need for grant, loan, or work assistance 
                under this title; and
                    ``(ii) may, alone or in combination with other 
                grant, loan, or work assistance received under this 
                title, exceed the student's cost of attendance, as 
                defined in section 472.
            ``(2) Period of scholarships.--A student who satisfies the 
        requirements of subsection (f) may receive a scholarship under 
        this subpart for a period of not more than 1 academic year of 
        postsecondary education or training on at least a half-time 
basis, as determined by the institution.
            ``(3) Scholarship proceeds.--
                    ``(A) Use and availability.--Scholarship proceeds 
                shall be used for the scholarship recipient's first 
                year of postsecondary education or training, and shall 
                remain available for such use for not more than 3 
                academic years following his or her graduation from 
                secondary school.
                    ``(B) Disbursal.--Scholarship proceeds shall be 
                disbursed on behalf of students who receive 
                scholarships under this subpart to the institutions of 
                higher education at which the students are enrolled. No 
                scholarship proceeds shall be disbursed on behalf of a 
                student until the student is enrolled at an institution 
                of higher education on at least a half-time basis, as 
                determined by such institution.
            ``(4) Use at any institution permitted.--A scholarship 
        awarded under this subpart may be used to attend any 
        institution of higher education, as defined in section 481.
    ``(e) Selection of Scholars.--
            ``(1) In general.--Scholarships shall be awarded to all 
        students who rank in the top 5 percent of the graduating class 
        of each secondary school that participates in the program under 
        this subpart. Ranking procedures shall be established by each 
        such school, but may not include any nonacademic or 
        extracurricular factors.
            ``(2) Annual announcement of scholarships.--Each 
        participating school shall announce the availability of 
        scholarships under this subpart, and its selection procedures, 
        to all students in the school, and their parents, at the 
        beginning of each academic year.
            ``(3) Records.--Each participating school shall maintain 
        records of its selection procedures, the names of the students 
        selected, and such other related information as the Secretary 
        may require.
    ``(f) Student Eligibility.--In order to receive a scholarship under 
this subpart, a student must--
            ``(1) rank in the top 5 percent of the graduating class at 
        the secondary school that he or she attends, as established by 
        such school in accordance with subsection (e); and
            ``(2) meet the requirements of section 484.
    ``(g) Recognition of Scholarship Receipt.--
            ``(1) Designation of scholarship recipients.--Students 
        awarded scholarships under this subpart shall be known as 
        `Presidential Honors Scholars'.
            ``(2) Certificates; ceremonies.--The Secretary shall 
        provide each student awarded a scholarship under this subpart a 
        certificate from the President that indicates that the 
        recipient is a Presidential Honors Scholar. The certificates 
        shall be provided through the secondary schools that selected 
        such students. Such schools may present these certificates in 
        appropriate ceremonies.
    ``(h) Evaluation.--The Secretary shall, from time to time, conduct 
an evaluation of the program authorized by this subpart.
    ``(i) Secretarial Authority.--In order to carry out the purposes of 
this subpart, the Secretary may, from time to time, establish policies, 
procedures, and requirements, set deadlines, and require 
information.''.
Presidential Honors Scholarship Act of 1996 - Amends the Higher Education Act of 1965 to authorize the award of Presidential Honors Scholarships to all students who graduate in the top five percent of their secondary school graduating class. 
Authorizes appropriations.
Presidential Honors Scholarship Act of 1996