[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                 H. R. 2

 To send more dollars to the classroom and for certain other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 11, 1999

  Mr. Goodling (for himself, Mr. Pitts, Mr. Smith of Washington, Mr. 
 Goode, Mr. Castle, Mr. McKeon, and Ms. Pryce of Ohio) introduced the 
 following bill; which was referred to the Committee on Education and 
the Workforce, and in addition to the Committee on Ways and Means, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
 To send more dollars to the classroom and for certain other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dollars to the Classroom Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Strengthening America's public schools is critically 
        important to the future of our children and our Nation.
            (2) Education is a local responsibility, a State priority, 
        and a national concern.
            (3) Strengthening our Nation's public schools while 
        respecting State and local control is a top priority of the 
        106th Congress.
            (4) Working with the Nation's Governors, parents, teachers, 
        and principals must take place in order to strengthen public 
        schools and foster educational excellence.
            (5) More flexibility must be given to our Nation's 
        Governors and educators at the State and local level in 
        implementing Federal education programs.
            (6) The consolidation of various Federal education programs 
        will benefit our Nation's children, parents, and teachers by 
        sending more dollars directly to the classroom.
            (7) Sending more dollars to the classroom also entails 
        providing new tax incentives and options for financing our 
        public schools.
            (8) Federal school renovation options should be available 
        to school districts in rural, urban, and suburban areas.
            (9) We will work with Governors and State and local 
        educators to send more Federal education dollars to the 
        classroom, provide more flexibility, and repair, renovate, and 
        rebuild schools.

                    TITLE I--FUNDS TO THE CLASSROOM

SEC. 101. FINDINGS AND SENSE OF CONGRESS.

    (a) Findings.--Congress finds the following:
            (1) We know that effective teaching takes place when we 
        begin:
                    (A) helping children master basic academics;
                    (B) engaging and involving parents;
                    (C) creating safe and orderly classrooms; and
                    (D) getting dollars to the classroom.
            (2) Our Nation's children deserve an educational system 
        which will provide opportunities to excel.
            (3) States and localities must spend a significant amount 
        of Federal education tax dollars applying for and administering 
        Federal education dollars.
            (4) Several States have reported that although they receive 
        less than 10 percent of their education funding from the 
        Federal Government, more than 50 percent of their paperwork is 
        associated with those Federal dollars.
            (5) While it is unknown exactly what percentage of Federal 
        education dollars reaches the classroom, a recent audit of New 
        York City public schools found that only 43 percent of their 
        local education budget reaches the classroom. Further, it is 
        thought that only 85 percent of funds administered by the 
        United States Department of Education for elementary and 
        secondary education reach the school district level. Even if 65 
        percent of Federal education funds presently reach the 
        classroom, it still means that billions of dollars are not 
        directly spent on children in the classroom.
            (6) American students are not performing up to their full 
        academic potential, despite significant Federal education 
        initiatives, which span multiple Federal agencies.
            (7) According to the Digest of Education Statistics, in 
        1994 only $150,521,920,000 out of $278,965,657,000 spent on 
        elementary and secondary education was spent on 
        ``instruction''.
            (8) According to the National Center for Education 
        Statistics, in 1995 only 52 percent of staff employed in public 
        elementary and secondary school systems were teachers.
            (9) Too much of our Federal education funding is spent on 
        bureaucracy and too little is spent on our Nation's youth.
            (10) Getting 95 percent of Department of Education 
        elementary and secondary education funds to the classroom could 
        provide substantial additional funding per classroom across the 
        United States.
            (11) More education funding should be put in the hands of 
        someone in a child's classroom who knows the child's name.
            (12) Burdensome regulations and mandates should be removed 
        so that school districts can devote more resources to children 
        in classrooms.
            (13) President Clinton has stated: ``We cannot ask the 
        American people to spend more on education until we do a better 
        job with the money we've got now.''.
            (14) President Clinton and Vice President Gore agree that 
        the reinventing of public education will not begin in 
        Washington but in communities across America and that we must 
        ask fundamental questions about how our public school systems' 
        dollars are spent.
            (15) President Clinton and Vice President Gore agree that 
        in an age of tight budgets, we should be spending public funds 
        on teachers and children, not on unnecessary overhead and 
        bloated bureaucracy.
    (b) Sense of Congress.--Congress urges the Department of Education, 
States, and local educational agencies to work together to ensure that 
not less than 95 percent of all funds appropriated for the purpose of 
carrying out elementary and secondary education programs administered 
by the Department of Education is spent for our children in their 
classrooms.

        TITLE II--EDUCATION FLEXIBILITY PARTNERSHIP ACT OF 1999

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Education Flexibility Partnership 
Act of 1999''.

SEC. 202. FINDINGS.

    Congress makes the following findings:
            (1) States differ substantially in demographics, in school 
        governance, and in school finance and funding. The 
        administrative and funding mechanisms that help schools in 1 
        State improve may not prove successful in other States.
            (2) Although the Elementary and Secondary Education Act of 
        1965 and other Federal education statutes afford flexibility to 
        State and local educational agencies in implementing Federal 
        programs, certain requirements of Federal education statutes or 
        regulations may impede local efforts to reform and improve 
        education.
            (3) By granting waivers of certain statutory and regulatory 
        requirements, the Federal Government can remove impediments for 
        local educational agencies in implementing educational reforms 
        and raising the achievement levels of all children.
            (4) State educational agencies are closer to local school 
        systems, implement statewide educational reforms with both 
        Federal and State funds, and are responsible for maintaining 
        accountability for local activities consistent with State 
        standards and assessment systems. Therefore, State educational 
        agencies are often in the best position to align waivers of 
        Federal and State requirements with State and local 
        initiatives.
            (5) The Education Flexibility Partnership Demonstration Act 
        allows State educational agencies the flexibility to waive 
        certain Federal requirements, along with related State 
        requirements, but allows only 12 States to qualify for such 
        waivers.
            (6) Expansion of waiver authority will allow for the waiver 
        of statutory and regulatory requirements that impede 
        implementation of State and local educational improvement 
        plans, or that unnecessarily burden program administration, 
        while maintaining the intent and purposes of affected programs, 
        and maintaining such fundamental requirements as those relating 
        to civil rights, educational equity, and accountability.
            (7) To achieve the State goals for the education of 
        children in the State, the focus must be on results in raising 
        the achievement of all students, not process.

SEC. 203. DEFINITIONS.

    In this title:
            (1) Local educational agency; state educational agency.--
        The terms ``local educational agency'' and ``State educational 
        agency'' have the meanings given such terms in section 14101 of 
        the Elementary and Secondary Education Act of 1965.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (3) State.--The term ``State'' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, and 
        each of the outlying areas.

SEC. 204. EDUCATION FLEXIBILITY PARTNERSHIP.

    (a) Education Flexibility Program.--
            (1) Program authorized.--
                    (A) In general.--The Secretary may carry out an 
                education flexibility program under which the Secretary 
                authorizes a State educational agency that serves an 
                eligible State to waive statutory or regulatory 
                requirements applicable to 1 or more programs or Acts 
                described in subsection (b), other than requirements 
                described in subsection (c), for the State educational 
                agency or any local educational agency or school within 
                the State.
                    (B) Designation.--Each eligible State participating 
                in the program described in subparagraph (A) shall be 
                known as an ``Ed-Flex Partnership State''.
            (2) Eligible state.--For the purpose of this subsection the 
        term ``eligible State'' means a State that--
                    (A)(i) has--
                            (I) developed and implemented the 
                        challenging State content standards, 
                        challenging State student performance 
                        standards, and aligned assessments described in 
                        section 1111(b) of the Elementary and Secondary 
                        Education Act of 1965, and for which local 
                        educational agencies in the State are producing 
                        the individual school performance profiles 
                        required by section 1116(a) of such Act; or
                            (II) made substantial progress, as 
                        determined by the Secretary, toward developing 
                        and implementing the standards and assessments, 
                        and toward having local educational agencies in 
                        the State produce the profiles, described in 
                        subclause (I); and
                    (ii) holds local educational agencies and schools 
                accountable for meeting the educational goals described 
                in the local applications submitted under paragraph 
                (4), and for taking corrective actions, consistent with 
                section 1116 of the Elementary and Secondary Education 
                Act of 1965, for the local educational agencies that do 
                not meet the goals; and
                    (B) waives State statutory or regulatory 
                requirements relating to education while holding local 
                educational agencies or schools within the State that 
                are affected by such waivers accountable for the 
                performance of the students who are affected by such 
                waivers.
            (3) State application.--
                    (A) In general.--Each State educational agency 
                desiring to participate in the education flexibility 
                program under this section shall submit an application 
                to the Secretary at such time, in such manner, and 
                containing such information as the Secretary may 
                reasonably require. Each such application shall 
                demonstrate that the eligible State has adopted an 
                educational flexibility plan for the State that 
                includes--
                            (i) a description of the process the State 
                        educational agency will use to evaluate 
                        applications from local educational agencies or 
                        schools requesting waivers of--
                                    (I) Federal statutory or regulatory 
                                requirements as described in paragraph 
                                (1)(A); and
                                    (II) State statutory or regulatory 
                                requirements relating to education; and
                            (ii) a detailed description of the State 
                        statutory and regulatory requirements relating 
                        to education that the State educational agency 
                        will waive.
                    (B) Approval and considerations.--The Secretary may 
                approve an application described in subparagraph (A) 
                only if the Secretary determines that such application 
                demonstrates substantial promise of assisting the State 
                educational agency and affected local educational 
                agencies and schools within such State in carrying out 
                comprehensive educational reform, after considering--
                            (i) the comprehensiveness and quality of 
                        the educational flexibility plan described in 
                        subparagraph (A);
                            (ii) the ability of such plan to ensure 
                        accountability for the activities and goals 
                        described in such plan;
                            (iii) the significance of the State 
                        statutory or regulatory requirements relating 
                        to education that will be waived; and
                            (iv) the quality of the State educational 
                        agency's process for approving applications for 
                        waivers of Federal statutory or regulatory 
                        requirements as described in paragraph (1)(A) 
                        and for monitoring and evaluating the results 
                        of such waivers.
            (4) Local application.--
                    (A) In general.--Each local educational agency or 
                school requesting a waiver of a Federal statutory or 
                regulatory requirement as described in paragraph (1)(A) 
                and any relevant State statutory or regulatory 
                requirement from a State educational agency shall 
                submit an application to the State educational agency 
                at such time, in such manner, and containing such 
                information as the State educational agency may 
                reasonably require. Each such application shall--
                            (i) indicate each Federal program affected 
                        and the statutory or regulatory requirement 
                        that will be waived;
                            (ii) describe the purposes and overall 
                        expected results of waiving each such 
                        requirement;
                            (iii) describe for each school year 
                        specific, measurable, educational goals for 
                        each local educational agency or school 
                        affected by the proposed waiver; and
                            (iv) explain why the waiver will assist the 
                        local educational agency or school in reaching 
                        such goals.
                    (B) Evaluation of applications.--A State 
                educational agency shall evaluate an application 
                submitted under subparagraph (A) in accordance with the 
                State's educational flexibility plan described in 
                paragraph (3)(A).
                    (C) Approval.--A State educational agency shall not 
                approve an application for a waiver under this 
                paragraph unless--
                            (i) the local educational agency or school 
                        requesting such waiver has developed a local 
                        reform plan that is applicable to such agency 
                        or school, respectively; and
                            (ii) the waiver of Federal statutory or 
                        regulatory requirements as described in 
                        paragraph (1)(A) will assist the local 
                        educational agency or school in reaching its 
                        educational goals.
            (5) Monitoring.--Each State educational agency 
        participating in the program under this section shall annually 
        monitor the activities of local educational agencies and 
        schools receiving waivers under this section and shall submit 
        an annual report regarding such monitoring to the Secretary.
            (6) Duration of federal waivers.--
                    (A) In general.--The Secretary shall not approve 
                the application of a State educational agency under 
                paragraph (3) for a period exceeding 5 years, except 
                that the Secretary may extend such period if the 
                Secretary determines that such agency's authority to 
                grant waivers has been effective in enabling such State 
                or affected local educational agencies or schools to 
                carry out their local reform plans.
                    (B) Performance review.--The Secretary shall 
                periodically review the performance of any State 
                educational agency granting waivers of Federal 
                statutory or regulatory requirements as described in 
                paragraph (1)(A) and shall terminate such agency's 
                authority to grant such waivers if the Secretary 
                determines, after notice and opportunity for hearing, 
                that such agency's performance has been inadequate to 
                justify continuation of such authority.
            (7) Authority to issue waivers.--Notwithstanding any other 
        provision of law, the Secretary is authorized to carry out the 
        education flexibility program under this subsection for each of 
        the fiscal years 2000 through 2004.
    (b) Included Programs.--The statutory or regulatory requirements 
referred to in subsection (a)(1)(A) are any such requirements under the 
following programs or Acts:
            (1) Title I of the Elementary and Secondary Education Act 
        of 1965.
            (2) Part B of title II of the Elementary and Secondary 
        Education Act of 1965.
            (3) Subpart 2 of part A of title III of the Elementary and 
        Secondary Education Act of 1965 (other than section 3136 of 
        such Act).
            (4) Title IV of the Elementary and Secondary Education Act 
        of 1965.
            (5) Title VI of the Elementary and Secondary Education Act 
        of 1965.
            (6) Part C of title VII of the Elementary and Secondary 
        Education Act of 1965.
            (7) The Carl D. Perkins Vocational and Technical Education 
        Act of 1998.
    (c) Waivers Not Authorized.--The Secretary may not waive any 
statutory or regulatory requirement of the programs or Acts authorized 
to be waived under subsection (a)(1)(A)--
            (1) relating to--
                    (A) maintenance of effort;
                    (B) comparability of services;
                    (C) the equitable participation of students and 
                professional staff in private schools;
                    (D) parental participation and involvement;
                    (E) the distribution of funds to States or to local 
                educational agencies;
                    (F) use of Federal funds to supplement, not 
                supplant, non-Federal funds; and
                    (G) applicable civil rights requirements; and
            (2) unless the underlying purposes of the statutory 
        requirements of each program or Act for which a waiver is 
        granted continue to be met to the satisfaction of the 
        Secretary.
    (d) Construction.--Nothing in this title shall be construed to 
affect the authority of a State educational agency that has been 
granted waiver authority under the following provisions of law:
            (1) Section 311(e) of the Goals 2000: Educate America Act.
            (2) The proviso referring to such section 311(e) under the 
        heading ``education reform'' in the Department of Education 
        Appropriations Act, 1996 (Public Law 104-134; 110 Stat. 1321-
        229).
    (e) Accountability.--In deciding whether to extend a request for a 
State educational agency's authority to issue waivers under this 
section, the Secretary shall review the progress of the State 
educational agency, local educational agency, or school affected by 
such waiver or authority to determine if such agency or school has made 
progress toward achieving the desired results described in the 
application submitted pursuant to subsection (e)(4)(A)(ii).
    (f) Publication.--A notice of the Secretary's decision to authorize 
State educational agencies to issue waivers under this section shall be 
published in the Federal Register and the Secretary shall provide for 
the dissemination of such notice to State educational agencies, 
interested parties, including educators, parents, students, advocacy 
and civil rights organizations, other interested parties, and the 
public.

 TITLE III--MODIFICATION OF ARBITRAGE REBATE RULES APPLICABLE TO BONDS 
                     USED TO FINANCE PUBLIC SCHOOLS

SEC. 301. ADDITIONAL INCREASE IN ARBITRAGE REBATE EXCEPTION FOR 
              GOVERNMENTAL BONDS USED TO FINANCE PUBLIC SCHOOL 
              FACILITIES.

    (a) In General.--Section 148(f)(4)(D)(vii) of the Internal Revenue 
Code of 1986 (relating to increase in exception for bonds financing 
public school capital expenditures) is amended by striking 
``$5,000,000'' the second place it appears and inserting 
``$10,000,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to obligations issued after December 31, 1999.

SEC. 302. MODIFICATION OF ARBITRAGE REBATE RULES APPLICABLE TO PUBLIC 
              SCHOOL CONSTRUCTION BONDS.

    (a) In General.--Subparagraph (C) of section 148(f)(4) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new clause:
                            ``(xviii) 4-year spending requirement for 
                        public school construction issue.--
                                    ``(I) In general.--In the case of a 
                                public school construction issue, the 
                                spending requirements of clause (ii) 
                                shall be treated as met if at least 10 
                                percent of the available construction 
                                proceeds of the construction issue are 
                                spent for the governmental purposes of 
                                the issue within the 1-year period 
                                beginning on the date the bonds are 
                                issued, 30 percent of such proceeds are 
                                spent for such purposes within the 2-
                                year period beginning on such date, 50 
                                percent of such proceeds are spent for 
                                such purposes within the 3-year period 
                                beginning on such date, and 100 percent 
                                of such proceeds are spent for such 
                                purposes within the 4-year period 
                                beginning on such date.
                                    ``(II) Public school construction 
                                issue.--For purposes of this clause, 
                                the term `public school construction 
                                issue' means any construction issue if 
                                no bond which is part of such issue is 
                                a private activity bond and all of the 
                                available construction proceeds of such 
                                issue are to be used for the 
                                construction (as defined in clause 
                                (iv)) of public school facilities to 
                                provide education or training below the 
                                postsecondary level or for the 
                                acquisition of land that is 
                                functionally related and subordinate to 
                                such facilities.
                                    ``(III) Other rules to apply.--
                                Rules similar to the rules of the 
                                preceding provisions of this 
                                subparagraph which apply to clause (ii) 
                                also apply to this clause.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to obligations issued after the date of the enactment of this Act.
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