[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 345 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 345

    To amend the Elementary and Secondary Education Act of 1965, to 
 reauthorize and make improvements to that Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 31, 2001

    Mr. Roemer (for himself, Mr. Dooley of California, Mr. Smith of 
   Washington, Mr. Bentsen, Mr. Carson of Oklahoma, Mr. Clement, Mr. 
Cramer, Mr. Davis of Florida, Mrs. Davis of California, Ms. Harman, Mr. 
Israel, Mr. Kind, Mr. Larsen of Washington, Mrs. McCarthy of New York, 
 Mr. Moran of Virginia, Mr. Schiff, and Mrs. Tauscher) introduced the 
 following bill; which was referred to the Committee on Education and 
                             the Workforce

_______________________________________________________________________

                                 A BILL


 
    To amend the Elementary and Secondary Education Act of 1965, to 
 reauthorize and make improvements to that Act, and for 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's)''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Declaration of priorities.
                      TITLE I--STUDENT PERFORMANCE

Sec. 101. Heading.
Sec. 102. Findings, policy, and purpose.
Sec. 103. Authorization of appropriations.
Sec. 104. Reservation for school improvement.
Part A--Improving Basic Programs Operated by Local Educational Agencies

Sec. 105. State plans.
Sec. 106. Local educational agency plans.
Sec. 107. Schoolwide programs.
Sec. 108. School choice.
Sec. 109. Assessment and local educational agency and school 
                            improvement.
Sec. 110. State assistance for school support and improvement.
Sec. 111. Parental involvement changes.
Sec. 112. Qualifications for teachers and paraprofessionals.
Sec. 113. Professional development.
Sec. 114. Fiscal requirements.
Sec. 115. Coordination requirements.
Sec. 115A. Limitations on funds.
Sec. 116. Grants for the outlying areas and the Secretary of the 
                            Interior.
Sec. 122. Participation of children enrolled in private schools.
              Part B--Even Start Family Literacy Programs

Sec. 131. Program authorized.
Sec. 132. Applications.
Sec. 133. Research.
                Part C--Education of Migratory Children

Sec. 141. State allocations.
Sec. 142. State applications; services.
Sec. 143. Authorized activities.
Sec. 144. Coordination of migrant education activities.
                 Part D--Neglected or Delinquent Youth

Sec. 151. Neglected or delinquent youth.
Sec. 152. Findings.
Sec. 153. Allocation of funds.
Sec. 154. State plan and State agency applications.
Sec. 155. Use of funds.
Sec. 156. Purpose.
Sec. 157. Transition services.
Sec. 158. Programs operated by local educational agencies.
Sec. 159. Local educational agency applications.
Sec. 160. Uses of funds.
Sec. 161. Program requirements.
Sec. 162. Program evaluations.
                       Part E--General Provisions

Sec. 171. General provisions.
  Part F--Federal Evaluations, Demonstrations, and Transition Projects

Sec. 181. Evaluations.
Sec. 182. Demonstrations of innovative practices.
              Part G--Rural Education Achievement Program

TITLE II--TEACHER AND PRINCIPAL QUALITY, PROFESSIONAL DEVELOPMENT, AND 
                               CLASS SIZE

Sec. 201. Teacher and principal quality, professional development, and 
                            class size.
TITLE III--LANGUAGE MINORITY STUDENTS AND INDIAN, NATIVE HAWAIIAN, AND 
                        ALASKA NATIVE EDUCATION

Sec. 301. Language minority students.
Sec. 302. Emergency immigrant education program.
Sec. 303. Indian, Native Hawaiian, and Alaska Native education.
                     TITLE IV--PUBLIC SCHOOL CHOICE

Sec. 401. Public school choice.
Sec. 402. Development of public school choice programs; report cards.
                          TITLE V--IMPACT AID

Sec. 501. Payments relating to Federal acquisition of real property.
Sec. 502. Repeal of special rule relating to the computation of 
                            payments for eligible federally connected 
                            children.
Sec. 503. Extension of authorization of appropriations.
Sec. 504. Repeals, transfers, and redesignations.
      TITLE VI--HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES

Sec. 601. High performance and quality education initiatives.
                       TITLE VII--ACCOUNTABILITY

Sec. 701. Accountability.
               TITLE VIII--GENERAL PROVISIONS AND REPEALS

Sec. 801. Repeals, transfers, and redesignations regarding titles VIII 
                            and XIV.
Sec. 802. Other repeals. 

SEC. 2. REFERENCES.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6301 et seq.).

SEC. 3. DECLARATION OF PRIORITIES.

    Congress declares that our national educational priorities are to--
            (1) introduce real accountability by making public 
        elementary school and secondary school education funding 
        performance-based rather than a guaranteed source of revenue 
        for States and local educational agencies;
            (2) require State educational agencies and local 
        educational agencies to establish high student performance 
        objectives, and to provide the State educational agencies and 
        local educational agencies with flexibility in using Federal 
        resources to ensure that the performance objectives are met;
            (3) concentrate Federal funding around a small number of 
        central education goals, including compensatory education for 
        disadvantaged children and youth, teacher quality and 
        professional development, programs for limited English 
        proficient students, public school choice programs, innovative 
        educational programs, student safety, and the incorporation of 
        educational technology;
            (4) concentrate Federal education funding on impoverished 
        areas where elementary schools and secondary schools are most 
        likely to be in distress;
            (5) sanction State educational agencies and local 
        educational agencies that consistently fail to meet established 
        performance objectives; and
            (6) reward State educational agencies, local educational 
        agencies, and elementary schools and secondary schools that 
        demonstrate high performance.

                      TITLE I--STUDENT PERFORMANCE

SEC. 101. HEADING.

    The heading for title I (20 U.S.C. 6301 et seq.) is amended to read 
as follows:

                   ``TITLE I--STUDENT PERFORMANCE''.

SEC. 102. FINDINGS, POLICY, AND PURPOSE.

    Section 1001 (20 U.S.C. 6301) is amended to read as follows:

``SEC. 1001. FINDINGS, POLICY AND PURPOSE.

    ``(a) Findings.--Congress makes the following findings:
            ``(1) Despite more than 3 decades of Federal assistance, a 
        sizable achievement gap remains between low-income and middle-
        class students.
            ``(2) The 1994 reauthorization of the Elementary and 
        Secondary Education Act of 1965 was an important step in 
        focusing our Nation's priorities on closing the achievement gap 
        between poor and affluent students in the United States. The 
        Federal Government must continue to build on these improvements 
        made in 1994 by holding States and local educational agencies 
        accountable for student achievement.
            ``(3) States can help close this achievement gap by 
        developing challenging curriculum content and student 
        performance standards so that all elementary school and 
        secondary school students perform at an advanced level. States 
        should implement vigorous and comprehensive student performance 
        assessments, such as the National Assessment of Educational 
        Progress (NAEP) so as to measure fully the progress of our 
        Nation's students.
            ``(4) In order to ensure that no child is left behind in 
        the new economy, the Federal Government must better target 
        Federal resources on those children who are most at-risk for 
        falling behind academically.
            ``(5)(A) Title I funds have been targeted on high-poverty 
        areas, but not to the degree they should be as demonstrated by 
        the following:
            ``(B) Although 95 percent of schools with poverty levels of 
        75 percent to 100 percent receive title I funding, 20 percent 
        of schools with poverty levels of 50 to 74 percent do not 
        receive any title I funding.
            ``(C) Only 64 percent of schools with poverty levels in the 
        35 percent to 49 percent range receive title I funding.
            ``(6) Title I funding should be significantly increased and 
        more effectively targeted to ensure that all low-income 
        students have an opportunity to excel academically.
            ``(7) The Federal Government should provide greater 
        decisionmaking authority and flexibility to schools and 
        teachers in exchange for greater responsibility for student 
        performance. Federal, State, and local efforts should be 
        focused on raising the academic achievement of all students. 
        Our Nation's children deserve nothing less than holding 
        accountable those responsible for shaping our childrens' future 
        and our country's future.
    ``(b) Policy.--Congress declares that it is the policy of the 
United States to ensure that all students receive a high-quality 
education by holding States, local educational agencies, and elementary 
schools and secondary schools accountable for increased student 
academic performance results, and by facilitating improved classroom 
instruction.
    ``(c) Purposes.--The purposes of this title are as follows:
            ``(1) To eliminate the existing 2-tiered educational 
        system, which sets lower academic expectations for impoverished 
        students than for affluent students.
            ``(2) To require all States to have challenging content and 
        student performance standards and assessment measures in place.
            ``(3) To require all States to ensure adequate yearly 
        progress for all students by establishing annual, numerical 
        performance objectives.
            ``(4) To ensure that all title I students receive 
        educational instruction from a fully qualified teacher.
            ``(5) To support State and local educational agencies in 
        identifying, assisting, and correcting low-performing schools.
            ``(6) To increase Federal funding for part A programs for 
        disadvantaged students in return for increased academic 
        performance of all students.
            ``(7) To target Federal funding to local educational 
        agencies serving the highest percentages of low-income 
        students.''.

SEC. 103. AUTHORIZATION OF APPROPRIATIONS.

    Section 1002 (20 U.S.C. 6302) is amended to read as follows:

``SEC. 1002. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Local Educational Agency Grants.--For the purpose of carrying 
out part A, other than section 1120(e), there are authorized to be 
appropriated $13,000,000,000 for fiscal year 2002 and such sums as may 
be necessary for each of the 4 succeeding fiscal years.
    ``(b) Even Start.--For the purpose of carrying out part B, there 
are authorized to be appropriated such sums as may be necessary for 
fiscal year 2002 and each of the 4 succeeding fiscal years.
    ``(c) Education of Migratory Children.--For the purpose of carrying 
out part C, there are authorized to be appropriated such sums as may be 
necessary for fiscal year 2002 and each of the 4 succeeding fiscal 
years.
    ``(d) Prevention and Intervention Programs for Youth Who Are 
Neglected, Delinquent, or at Risk of Dropping Out.--For the purpose of 
carrying out part D, there are authorized to be appropriated such sums 
as may be necessary for fiscal year 2002 and each of the 4 succeeding 
fiscal years.
    ``(e) Capital Expenses.--For the purpose of carrying out section 
1120(e), there are authorized to be appropriated $5,000,000 for fiscal 
year 2002 and such sums as may be necessary for each of the 4 
succeeding fiscal years.
    ``(f) Federal Activities.--For the purpose of carrying out sections 
1501 and 1502, there are authorized to be appropriated such sums as may 
be necessary for fiscal year 2002 and each of the 4 succeeding fiscal 
years.''.

SEC. 104. RESERVATION FOR SCHOOL IMPROVEMENT.

    Section 1003 (20 U.S.C. 6303) is amended to read as follows:

``SEC. 1003. RESERVATION FOR SCHOOL IMPROVEMENT.

    ``(a) State Reservations.--
            ``(1) In general.--Each State educational agency shall 
        reserve 2.5 percent of the amount the State educational agency 
        receives under part A for fiscal years 2002 and 2003, and 3.5 
percent of that amount for fiscal years 2004 through 2006, to carry out 
paragraph (2) and to carry out the State educational agency's 
responsibilities under sections 1116 and 1117, including the State 
educational agency's statewide system of technical assistance and 
support for local educational agencies.
            ``(2) Uses.--Of the amount reserved under paragraph (1) for 
        any fiscal year, the State educational agency shall make 
        available at least 95 percent of such amount directly to local 
        educational agencies.

PART A--IMPROVING BASIC PROGRAMS OPERATED BY LOCAL EDUCATIONAL AGENCIES

SEC. 105. STATE PLANS.

    Section 1111 (20 U.S.C. 6311) is amended to read as follows:

``SEC. 1111. STATE PLANS.

    ``(a) Plans Required.--
            ``(1) In general.--Any State educational agency desiring a 
        grant under this part shall submit to the Secretary a plan, 
        developed in consultation with local educational agencies, 
        teachers, pupil services personnel, administrators (including 
        administrators of programs described in other parts of this 
        title), local school boards, other staff, parents, and other 
        community partners such as institutions of higher education 
        that satisfies the requirements of this section and that is 
        coordinated with other programs under this Act, the Individuals 
        with Disabilities Education Act, the Carl D. Perkins Vocational 
        and Technical Education Act of 1998, and the Head Start Act.
            ``(2) Consolidated plan.--A State plan submitted under 
        paragraph (1) may be submitted as part of a consolidated plan 
        under section 8302.
    ``(b) Standards, Assessments, and Accountability.--
            ``(1) Challenging standards.--
                    ``(A) In general.--Each State plan shall 
                demonstrate that the State has adopted challenging 
                content standards and challenging student performance 
                standards that will be used by the State, and the local 
                educational agencies, and elementary schools and 
                secondary schools, within the State to carry out this 
                part.
                    ``(B) Uniformity.--The standards required by 
                subparagraph (A) shall be the same standards that the 
                State applies to all elementary schools and secondary 
                schools within the State and all children attending 
                such schools.
                    ``(C) Subjects.--The State shall have such 
                standards for elementary school and secondary school 
                children served under this part in subjects determined 
                by the State, but including at least mathematics, 
                science, and English language arts, and which shall 
                include the same knowledge, skills, and levels of 
                performance expected of all children.
                    ``(D) Standards.--Standards under this paragraph 
                shall include--
                            ``(i) challenging content standards in 
                        academic subjects that--
                                    ``(I) specify what children are 
                                expected to know and be able to do;
                                    ``(II) contain coherent and 
                                rigorous content; and
                                    ``(III) encourage the teaching of 
                                advanced skills; and
                            ``(ii) challenging student performance 
                        standards that--
                                    ``(I) are aligned with the State's 
                                content standards;
                                    ``(II) describe 2 levels of high 
                                performance, proficient and advanced 
                                levels of performance, that determine 
                                how well children are mastering the 
                                material in the State content 
                                standards; and
                                    ``(III) describe a third level of 
                                performance, a basic level of 
                                performance, to provide complete 
                                information about the progress of the 
                                lower performing children toward 
                                achieving to the proficient and 
                                advanced levels of performance.
                    ``(E) Additional subjects.--For the subjects in 
                which students will be served under this part, but for 
                which a State is not required under subparagraphs (A), 
                (B), and (C) to develop, and has not otherwise 
                developed, challenging content and student performance 
                standards, the State plan shall describe a strategy for 
                ensuring that such students are taught the same 
                knowledge and skills and held to the same expectations 
                as are all children.
                    ``(F) Special rule.--In the case of a State that 
                allows local educational agencies to adopt more 
                rigorous standards than those set by the State, local 
                educational agencies shall be allowed to implement such 
                standards.
            ``(2) Adequate yearly progress.--
                    ``(A) In general.--Each State plan shall 
                demonstrate, based on assessments described under 
                paragraph (4), what constitutes adequate yearly 
                progress of--
                            ``(i) any school served under this part 
                        toward enabling all children to meet the 
                        State's challenging student performance 
                        standards;
                            ``(ii) any local educational agency that 
                        receives funds under this part toward enabling 
                        all children in schools served by the local 
                        educational agency and receiving assistance 
                        under this part to meet the State's challenging 
                        student performance standards; and
                            ``(iii) the State in enabling all children 
                        in schools receiving assistance under this part 
                        to meet the State's challenging student 
                        performance standards.
                    ``(B) Definition.--Adequate yearly progress shall 
                be defined by the State in a manner that--
                            ``(i) applies the same high standards of 
                        academic performance to all students in the 
                        State;
                            ``(ii) takes into account the progress of 
                        all students in the State and in each local 
                        educational agency and school served under 
                        section 1114 or 1115;
                            ``(iii) uses the State challenging content 
                        and challenging student performance standards 
                        and assessments described in paragraphs (1) and 
                        (4);
                            ``(iv) compares separately, within each 
                        State, local educational agency, and school, 
                        the performance and progress of students, by 
                        each major ethnic and racial group, by gender, 
                        by English proficiency status, by disability 
                        and migrant status, and by economically 
                        disadvantaged students as compared to students 
                        who are not economically disadvantaged (except 
                        that such disaggregation shall not be required 
                        in a case in which the number of students in a 
                        category is insufficient to yield statistically 
                        reliable information or the results would 
                        reveal individually identifiable information 
                        about an individual student);
                            ``(v) compares the proportions of students 
                        at the basic, proficient, and advanced levels 
                        of performance with the proportions of students 
                        at each of the 3 performance levels in the same 
                        grade in the previous school year;
                            ``(vi) endeavors to include other academic 
                        measures such as promotion, attendance, drop-
                        out rates, completion of college preparatory 
                        courses, college admission tests taken, and 
                        secondary school completion, except that 
                        failure to meet another academic measure, other 
                        than student performance on State assessments 
                        aligned with State standards, shall not provide 
                        the sole basis for designating a district or 
                        school as in need of improvement;
                            ``(vii) includes annual numerical 
                        objectives for improving the performance of all 
                        groups described in clause (iv) and narrowing 
                        gaps in performance between these groups in, at 
                        least, the areas of mathematics and English 
                        language arts; and
                            ``(viii) includes a timeline for ensuring 
                        that each group of students described in clause 
                        (iv) meets or exceeds the State's proficient 
                        level of performance on each State assessment 
                        used for the purposes of this section and 
                        section 1116 not later than 10 years after the 
                        date of enactment of the Public Education 
                        Reinvestment, Reinvention, and Responsibility 
                        Act (Three R's).
                    ``(C) Accountability.--Each State plan shall 
                demonstrate that the State has developed and is 
                implementing a statewide accountability system that has 
                been or will be effective in ensuring that all local 
                educational agencies, elementary schools, and secondary 
                schools are making adequate yearly progress as defined 
                in section 1111(b)(2)(B). Each State accountability 
                system shall--
                            ``(i) be based on the standards and 
                        assessments adopted under paragraphs (1) and 
                        (4) and take into account the performance of 
                        all students required by law to be included in 
                        such assessments;
                            ``(ii) be the same accountability system 
                        the State uses for all schools or all local 
                        educational agencies, if the State has an 
                        accountability system for all schools or all 
                        local educational agencies;
                            ``(iii) provide for the identification of 
                        schools or local educational agencies receiving 
                        funds under this part that for 2 consecutive 
                        years have exceeded such schools' or agencies' 
                        adequate yearly progress goals so that 
                        information about the practices and strategies 
                        of such schools or agencies can be disseminated 
                        to other schools in the local educational 
                        agency and in the State and such schools can be 
                        considered for rewards provided under title VII 
                        of this Act;
                            ``(iv) provide for the identification of 
                        schools and local educational agencies in need 
                        of improvement, as required by section 1116, 
                        and for the provision of technical assistance, 
                        professional development, and other capacity-
                        building as needed, including those measures 
                        specified in sections 1116(d)(9) and 1117, to 
                        ensure that schools and local educational 
                        agencies so identified have the resources, 
                        skills, and knowledge needed to carry out their 
                        obligations under sections 1114 and 1115 and to 
                        meet the requirements for annual improvement 
                        described in paragraph (2); and
                            ``(v) provide for the identification of 
                        schools and local educational agencies for 
                        corrective action or actions as required by 
                        section 1116, and for the implementation of 
                        corrective actions against school and school 
                        districts when such actions are required under 
                        such section.
                    ``(D) Annual improvement for states.--(i) For a 
                State to make adequate yearly progress under 
                subparagraph (A)(iii), not less than 90 percent of the 
                local educational agencies within the State shall meet 
                the State's criteria for adequate yearly progress.
                    ``(ii) If 90 percent requirements of clause (i) 
                results in a fractured number of local educational 
                agencies, the Secretary shall provide guidance and 
                modification of the percentage requirement necessary to 
                meet congressional intent of this language.
                    ``(E)(i) Annual improvement for local educational 
                agencies.--(1) For a local educational agency to make 
                adequate yearly progress under subparagraph (A)(ii), 
                not less than 90 percent of the schools served by the 
                local educational agency shall meet the State's 
                criteria for adequate yearly progress.
                    ``(ii) If the 90 percent requirement of clause (i) 
                results in a fractured number of schools, the Secretary 
                shall provide guidance on modification of the 
                percentage requirement necessary to meet congressional 
                intent of this language.
                    ``(F) Annual improvement for schools.--For an 
                elementary school or a secondary school to make 
                adequate yearly progress under subparagraph (A)(i), not 
                less than 90 percent of each group of students 
                described in subparagraph (B)(iv) who are enrolled in 
                such school shall take the assessments described in 
                paragraph (4)(D) and in section 612(a)(17)(A) of the 
                Individuals with Disabilities Education Act.
                    ``(G) Public notice and comment.--
                            ``(i) In general.--Each State shall submit 
                        information in the State plan demonstrating 
                        that in developing such plan--
                                    ``(I) the State diligently sought 
                                public comment from a range of 
                                institutions and individuals in the 
                                State with an interest in improved 
                                student achievement; and
                                    ``(II) the State made and will 
                                continue to make a substantial effort 
                                to ensure that information regarding 
                                content standards, performance 
                                standards, assessments, and the State 
                                accountability system is widely known 
                                and understood by the public, parents, 
                                teachers, and school administrators 
                                throughout the State.
                            ``(ii) Efforts.--The efforts described in 
                        clause (i), at a minimum, shall include annual 
                        publication of such information and explanatory 
                        text to the public through such means as the 
                        Internet, the media, and public agencies. Non-
                        English language shall be used to communicate 
                        with parents where appropriate.
                    ``(H) Review.--The Secretary shall review 
                information from each State on the adequate yearly 
                progress of schools and local educational agencies 
                within the State required under subparagraphs (A) and 
                (B) for the purpose of determining State and local 
                compliance with section 1116.
            ``(3) State authority.--If a State educational agency 
        provides evidence that is satisfactory to the Secretary that 
        neither the State educational agency nor any other State 
        government official, agency, or entity has sufficient authority 
        under State law to adopt curriculum content and student 
        performance standards, and assessments aligned with such 
        standards, that will be applicable to all students enrolled in 
        the State's public schools, then the State educational agency 
        may meet the requirements of this subsection by--
                    ``(A) adopting curriculum content and student 
                performance standards and assessments that meet the 
                requirements of this subsection, on a statewide basis, 
                and limiting the applicability of such standards and 
                assessments to students served under this part; or
                    ``(B) adopting and implementing policies that 
                ensure that each local educational agency within a 
                State receiving a grant under this part will adopt 
                curriculum content and student performance standards 
                and assessments--
                            ``(i) that are aligned with the standards 
                        described in subparagraph (A); and
                            ``(ii) that meet the criteria in this 
                        subsection and any regulations regarding such 
                        standards and assessments that the Secretary 
                        may publish and that are applicable to all 
                        students served by each such local educational 
                        agency.
            ``(4) Assessments.--Each State plan shall demonstrate that 
        the State has implemented a set of high quality, yearly student 
        assessments that include, at a minimum, assessments in 
        mathematics, science, and English language arts, that will be 
        used, starting not later than the 2002-2003 school year as the 
        primary means of determining the yearly performance of each 
        local educational agency and school served by the State under 
        this title in enabling all children to meet the State's 
        challenging content and student performance standards. Such 
        assessments shall--
                    ``(A) be the same assessments used to measure the 
                performance of all children, if the State measures the 
                performance of all children;
                    ``(B) be aligned with the State's challenging 
                content and student performance standards, and provide 
                coherent information about the local educational 
                agency's contribution to the student attainment of such 
                standards;
                    ``(C) be used only for purposes for which such 
                assessments are valid and reliable, and be consistent 
                with relevant, nationally recognized professional and 
                technical standards for such assessments;
                    ``(D) measure the performance of students against 
                the challenging State content and student performance 
                standards, and be administered not less than once 
                during--
                            ``(i) grades 3 through 5;
                            ``(ii) grades 6 through 9; and
                            ``(iii) grades 10 through 12;
                    ``(E) include multiple, up-to-date measures of 
                student performance and the local educational agency's 
                contribution to student performance, including measures 
                that assess higher order thinking skills and 
                understanding;
                    ``(F) provide for--
                            ``(i) the participation in such assessments 
                        of all students;
                            ``(ii) the reasonable adaptations and 
                        accommodations for students with disabilities 
                        as defined in 602(3) of the Individuals with 
                        Disabilities Education Act necessary to measure 
                        the achievement of such students relative to 
                        State content and student performance 
                        standards;
                            ``(iii) in the case of a student with 
                        limited English proficiency, the assessment of 
                        such student in the student's native language 
                        if such a native language assessment is more 
                        likely than an English language assessment to 
                        yield accurate and reliable information on what 
                        that student knows and is able to do; and
                            ``(iv) notwithstanding clause (iii), the 
                        assessment (using tests written in English) of 
                        English language arts of any student who has 
                        attended school in the United States (not 
                        including the Commonwealth of Puerto Rico) for 
                        3 or more consecutive school years, except if 
                        the local educational agency determines, on a 
                        case-by-case individual basis, that assessments 
                        in another language and form would likely yield 
                        more accurate and reliable information on what 
                        such students know and can do, the local 
                        educational agency may assess such students in 
                        the appropriate language other than English for 
                        1 additional consecutive year beyond the third 
                        consecutive year; and
                    ``(G) include students who have attended schools in 
                a local educational agency for a full academic year but 
                have not attended a single school for a full academic 
                year, except that the performance of students who have 
                attended more than 1 school in the local educational 
                agency in any academic year shall be used only in 
                determining the progress of the local educational 
                agency;
                    ``(H) provide individual student reports to be 
                submitted to parents, including assessment scores or 
                other information on the attainment of student 
                performance standards; and
                    ``(I) enable results to be disaggregated within 
                each State, local educational agency, and school by 
                gender, by each major racial and ethnic group, by 
                English proficiency status, and by economically 
                disadvantaged students as compared to students who are 
                not economically disadvantaged.
            ``(5) Rigorous criteria.--States are encouraged to use 
        rigorous criteria assessment measures.
            ``(6) First grade literacy assessment.--In addition to 
        those assessments described in paragraph (4), each State 
        receiving funds under this part shall describe in its State 
        plan what reasonable steps it is taking to assist and encourage 
        local educational agencies--
                    ``(A) to measure literacy skills of first graders 
                in schools receiving funds under this part by providing 
                assessments of first graders that are--
                            ``(i) developmentally appropriate;
                            ``(ii) aligned with State content and 
                        student performance standards; and
                            ``(iii) scientifically research-based; and
                    ``(B) to assist and encourage local educational 
                agencies receiving funds under this part in identifying 
                and taking developmentally appropriate and effective 
                interventions in any school served under this part in 
                which a substantial number of first graders have not 
                demonstrated grade-level literacy proficiency by the 
                end of the school year.
            ``(7) Language assessments.--Each State plan shall identify 
        the languages other than English and Spanish that are present 
        in the participating student populations in the State, and 
        indicate the languages for which yearly student assessments are 
        not available and are needed. The State may request assistance 
        from the Secretary if linguistically accessible assessment 
        measures are needed. Upon request, the Secretary shall assist 
        with the identification of appropriate assessment measures in 
        the needed languages, but shall not mandate a specific 
        assessment or mode of instruction.
            ``(8) Assessment development.--A State shall develop and 
        implement the State assessments, including, at a minimum, 
        mathematics and English language arts, by the 2002-2003 school 
        year.
            ``(9) Requirement.--Each State plan shall describe--
                    ``(A) how the State educational agency will assist 
                each local educational agency and school affected by 
                the State plan to develop the capacity to comply with 
                each of the requirements of sections 1114(b), 1115(c), 
                and 1116 that are applicable to such agency or school;
                    ``(B) how the State educational agency will--
                            ``(i) hold each local educational agency 
                        affected by the State plan accountable for 
                        improved student performance, including a 
                        procedure for--
                                    ``(I) identifying local educational 
                                agencies and schools in need of 
                                improvement; and
                                    ``(II) assisting local educational 
                                agencies and schools identified under 
                                subclause (I) to address achievement 
                                problems, including thorough 
                                descriptions of the amounts and types 
                                of professional development to be 
                                provided instructional staff, the 
                                amount of any financial assistance to 
                                be provided by the State under section 
                                1003, and the amount of any funds to be 
                                provided by other sources and the 
                                activities to be provided by those 
                                sources; and
                            ``(ii) implementing corrective action if 
                        assistance is not effective;
                    ``(C) how the State educational agency is providing 
                low-performing students additional academic 
                instruction, such as before- and after-school programs 
                and summer academic programs;
                    ``(D) such other factors the State considers 
                appropriate to provide students an opportunity to 
                achieve the knowledge and skills described in the 
                State's challenging content standards;
                    ``(E) the specific steps the State educational 
                agency will take or the specific strategies the State 
                educational agency will use to ensure that--
                            ``(i) all teachers in both schoolwide 
                        programs and targeted assistance programs are 
                        fully qualified not later than December 31, 
                        2005; and
                            ``(ii) low-income students and minority 
                        students are not taught at higher rates than 
                        other students by unexperienced, uncertified, 
                        or out-of-field teachers; and
                    ``(F) the measures the State educational agency 
                will use to evaluate and publicly report the State's 
                progress in improving the quality of instruction in the 
                schools served by the State educational agency and 
                local educational agencies receiving funding under this 
                Act.
    ``(c) Other Provisions To Support Teaching and Learning.--Each 
State plan shall contain assurances that--
            ``(1) the State educational agency will work with other 
        agencies, including educational service agencies or other local 
        consortia and institutions to provide technical assistance to 
        local educational agencies and elementary schools and secondary 
        schools to carry out the State educational agency's 
        responsibilities under this part, including technical 
        assistance in providing professional development under section 
        1119(A) and technical assistance under section 1117; and
            ``(2)(A) where educational service agencies exist, the 
        State educational agency will consider providing professional 
        development and technical assistance through such agencies; and
            ``(B) where educational service agencies do not exist, the 
        State educational agency will consider providing professional 
        development and technical assistance through other cooperative 
        agreements, such as through a consortium of local educational 
        agencies;
            ``(3) the State educational agency will use the 
        disaggregated results of the student assessments required under 
        subsection (b)(4), and other measures or indicators available 
        to the State, to review annually the progress of each local 
        educational agency and school served under this part to 
        determine whether each such agency and school is making the 
        annual progress necessary to ensure that all students will meet 
        the proficient level of performance on the assessments 
        described in subsection (b)(4) within 10 years of the date of 
        enactment of the Public Education Reinvestment, Reinvention, 
        and Responsibility Act (Three R's);
            ``(4) the State educational agency will provide the least 
        restrictive and burdensome regulations for local educational 
        agencies and individual elementary schools and secondary 
        schools participating in a program assisted under this part;
            ``(5) the State educational agency will regularly inform 
        the Secretary and the public in the State of how Federal laws, 
        if any, hinder the ability of States to hold local educational 
agencies and schools accountable for student academic performance;
            ``(6) the State educational agency will encourage 
        elementary schools and secondary schools to consolidate funds 
        from other Federal, State, and local sources for schoolwide 
        reform in schoolwide programs under section 1114;
            ``(7) the State educational agency will modify or eliminate 
        State fiscal and accounting barriers so that elementary schools 
        and secondary schools can easily consolidate funds from other 
        Federal, State, and local sources for schoolwide programs under 
        section 1114;
            ``(8) the State educational agency has involved the 
        committee of practitioners established under section 1703(b) 
        (as redesignated by section 161(2)) in developing and 
        monitoring the implementation of the State plan; and
            ``(9) the State educational agency will inform local 
        educational agencies of the local educational agency's 
        authority to obtain waivers under title VIII and, if the State 
        is an Ed-Flex Partnership State, waivers under the Education 
        Flexibility Partnership Act of 1999.
    ``(d) Peer Review and Secretarial Approval.--The Secretary shall--
            ``(1) establish a peer review process to assist in the 
        review of State plans;
            ``(2) only approve a State plan meeting each of the 
        requirements of this section;
            ``(3) if the Secretary determines that the State plan does 
        not meet each of the requirements of subsection (a), (b), or 
        (c), immediately notify the State of such determination and the 
        reasons for such determination;
            ``(4) not disapprove a State plan before--
                    ``(A) notifying the State educational agency in 
                writing of the specific deficiencies of the State plan;
                    ``(B) offering the State an opportunity to revise 
                the State plan;
                    ``(C) providing technical assistance in order to 
                assist the State to meet the requirements under 
                subsections (a), (b), and (c); and
                    ``(D) providing a hearing;
            ``(5) have the authority to disapprove a State plan for not 
        meeting the requirements of this section, but shall not have 
        the authority to require a State, as a condition of approval of 
        the State plan, to include in, or delete from, such plan 1 or 
        more specific elements of the challenging State content 
        standards or to use specific assessment instruments or items; 
        and
            ``(6) require a State to submit a revised State plan that 
        meets the requirements of this section to the Secretary for 
        approval not later than 1 year after the date of enactment of 
        the Public Education Reinvestment, Reinvention, and 
        Responsibility Act (Three R's).
    ``(e) Duration of the Plan.--
            ``(1) In general.--Each State plan shall--
                    ``(A) remain in effect for the duration of the 
                State's participation under this part; and
                    ``(B) be periodically reviewed and revised by the 
                State, as necessary, to reflect changes in the State's 
                strategies and programs under this part.
            ``(2) Additional information.--If the State makes 
        significant changes in its State plan, such as the adoption of 
        new challenging State content standards and State student 
        performance standards, new assessments, or a new definition of 
        adequate yearly progress, the State shall submit such 
        information to the Secretary.
    ``(f) Limitation on Conditions.--Nothing in this part shall be 
construed to authorize an officer or employee of the Federal Government 
to mandate, direct, or control a State's, local educational agency's, 
or elementary school's or secondary school's specific challenging 
content or student performance standards, assessments, curricula, or 
program of instruction, as a condition of eligibility to receive funds 
under this part.
    ``(g) Penalties.--
            ``(1) In general.--If a State fails to meet the statutory 
        deadlines for demonstrating that the State has in place 
        challenging content standards and student performance 
        standards, assessments, a system for measuring and monitoring 
        adequate yearly progress, and a statewide system for holding 
        schools and local educational agencies accountable for making 
        adequate yearly progress with each group of students specified 
        in subsection (b)(2)(B)(iv), the State shall be ineligible to 
        receive any administrative funds under section 1703(c) that 
        exceed the amount received by the State for such purposes in 
        the previous year.
            ``(2) Additional funds.--Based on the extent to which 
        challenging content standards and student performance 
        standards, assessments, systems for measuring and monitoring 
        adequate yearly progress, and a statewide system for holding 
        schools and local educational agencies accountable for making 
        adequate yearly progress with each group of students specified 
        in subsection (b)(2)(B)(iv), are not in place, the Secretary 
        shall withhold additional administrative funds in such amount 
        as the Secretary determines appropriate, except that for each 
        additional year that the State fails to comply with such 
        requirements, the Secretary shall withhold not less than \1/5\ 
        of the amount the State receives for administrative expenses 
        under section 1703(c).
            ``(3) Waiver.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), notwithstanding part D of title VIII, 
                the Education Flexibility Partnership Act of 1999, or 
                any other provision of law, a waiver of this section 
                shall not be granted, except that a State may request a 
                1-time, 1-year waiver to meet the requirements of this 
                section.
                    ``(B) Exception.--A waiver granted pursuant to 
                subparagraph (A) shall not apply to the requirements 
                described under subsection (h).
    ``(h) Special Rule on Science Standards and Assessments.--
Notwithstanding subsection (b) and part D of title IV, no State shall 
be required to meet the requirements under this title relating to 
science standards or assessments until the beginning of the 2006-2007 
school year.''.

SEC. 106. LOCAL EDUCATIONAL AGENCY PLANS.

    (a) Subgrants.--Section 1112(a)(1) (20 U.S.C. 6312(a)(1)) is 
amended by striking ``'' and all that follows and inserting ``the 
Individuals with Disabilities Education Act, the Carl D. Perkins 
Vocational and Technical Education Act of 1998, the Head Start Act, and 
other Acts, as appropriate.''.
    (b) Plan Provisions.--Section 1112(b) (20 U.S.C. 6312(b)) is 
amended--
            (1) by striking ``Each'' and inserting ``In order to help 
        low-achieving children achieve high standards, each'';
            (2) in paragraph (1)--
                    (A) by striking ``part'' each place it appears and 
                inserting ``title''; and
                    (B) in subparagraph (B), by inserting ``low-
                achieving'' before ``children'';
            (3) in paragraph (4)--
                    (A) in subparagraph (A)--
                            (i) by striking ``program,'' and inserting 
                        ``programs and''; and
                            (ii) by striking ``, and school-to-work 
                        transition programs''; and
                    (B) in subparagraph (B), by striking ``under part 
                C'' and all that follows through ``dropping out'' and 
                inserting ``under part C, neglected or delinquent 
                youth,'';
            (4) in paragraph (7), by striking ``eligible'';
            (5) in paragraph (9), by striking the period and inserting 
        a semicolon; and
            (6) by adding at the end the following new paragraphs:
            ``(10) a description of the actions the local educational 
        agency will take to assist the low-performing schools served by 
        the local educational agency, including schools identified 
        under section 1116 as in need of improvement; and
            ``(11) a description of how the local educational agency 
        will promote the use of alternative instructional methods, and 
        extended learning time, such as an extended school year, 
        before- and after-school programs, and summer programs.''.
    (c) Assurances.--Section 1112(c) (20 U.S.C. 6312(c)) is amended to 
read as follows:
    ``(c) Assurances.--
            ``(1) In general.--Each local educational agency plan shall 
        provide assurances that the local educational agency will--
                    ``(A) specify the steps the local educational 
                agency will take to ensure that all teachers in both 
                schoolwide programs and targeted assistance are fully 
                qualified not later than December 31, 2005, and the 
                strategies the local educational agency will use to 
                ensure that low-income students and minority students 
                are not taught at higher rates than other children by 
                inexperienced, uncertified, or out-of-field teachers, 
                and the measures the agency will use to evaluate and 
                publicly report progress in improving the quality of 
                instruction in schools served by the local educational 
                agency and receiving funding under this Act;
                    ``(B) provide eligible schools and parents with 
                information regarding schoolwide project authority and 
                the ability of such schools to consolidate funds from 
                Federal, State, and local sources;
                    ``(C) provide technical assistance and support to 
                schoolwide programs;
                    ``(D) work in consultation with schools as the 
                schools develop a school plan pursuant to section 
                1114(b)(2), and assist schools in implementing such 
                plans or undertaking activities pursuant to section 
                1115(c), so that each school can make adequate yearly 
                progress toward meeting the challenging State student 
                performance standards;
                    ``(E) use the disaggregated results of the student 
                assessments required under section 1111(b)(4), and 
                other measures or indicators available to the agency, 
                to review annually the progress of each school served 
                by the agency and receiving funds under this title to 
                determine whether or not all schools are making the 
                annual progress necessary to ensure that all students 
                will meet the proficient level of performance on the 
                assessments described in section 1111(b)(4) within 10 
                years of the date of enactment of the Public Education 
                Reinvestment, Reinvention, and Responsibility Act;
                    ``(F) set and hold schools served by the local 
                educational agency accountable for meeting annual 
                numerical goals for improving the performance of all 
                groups of students based on the performance standards 
                set by the State under section 1111(b)(1)(D)(ii);
                    ``(G) fulfill the local educational agency's school 
                improvement responsibilities under section 1116, 
                including taking corrective actions under section 
                1116(c)(9);
                    ``(H) provide the State educational agency with--
                            ``(i) an annual, up-to-date, and accurate 
                        list of all schools served by the local 
                        educational agency that are eligible for school 
                        improvement and corrective action;
                            ``(ii) the reasons why each school 
                        described in clause (i) was identified for 
                        school improvement or corrective action; and
                            ``(iii) the specific plans for improving 
                        student performance in each of the schools 
                        described in clause (i), including the specific 
                        numerical achievement goals for the succeeding 
                        2 school years, for each group of students 
                        specified in section 1111(b)(2)(B)(iv) enrolled 
                        in each such school;
                    ``(I) provide services to eligible children 
                attending private elementary schools and secondary 
                schools in accordance with section 1120, and provide 
                timely and meaningful consultation with private school 
                officials regarding such services;
                    ``(J) take into account the experience of model 
                programs for the educationally disadvantaged and the 
                findings of relevant scientifically based research when 
                developing technical assistance plans for, and 
                delivering technical assistance to, schools served by 
                the local educational agency that are receiving funds 
                under this part and are in school improvement or 
                corrective action;
                    ``(K) in the case of a local educational agency 
                that chooses to use funds under this part to provide 
                early childhood development services to low-income 
                children below the age of compulsory school attendance, 
                ensure that such services comply with the performance 
                standards established under section 641A(a) of the Head 
                Start Act;
                    ``(L) comply with the requirements of section 1119 
                regarding the qualifications of teachers and 
                paraprofessionals;
                    ``(M) inform eligible schools served by the local 
                educational agency of the agency's authority to obtain 
                waivers on such school's behalf under title VIII, and 
                if the State is an Ed-Flex Partnership State, under the 
                Education Flexibility Partnership Act of 1999; and
                    ``(N) coordinate and collaborate, to the extent 
                feasible and necessary as determined by the local 
                educational agency, with other agencies providing 
                services to children, youth, and their families.
            ``(2) Model programs; scientifically based research.--In 
        carrying out paragraph (1)(K)--
                    ``(A) the Secretary shall consult with the 
                Secretary of Health and Human Services on the 
                implementation of such subparagraph, and shall 
                establish procedures (taking into consideration 
                existing State and local laws and local teacher 
                contracts) to assist local educational agencies to 
                comply with such subparagraph;
                    ``(B) the Secretary shall disseminate to local 
                educational agencies the Head Start performance 
                standards under section 641A(a) of the Head Start Act 
                upon such standard's publication; and
                    ``(C) local educational agencies affected by such 
                subparagraph shall plan for the implementation of such 
                subparagraph (taking into consideration existing State 
                and local laws, and local teacher contracts), including 
                pursuing the availability of other Federal, State, and 
                local funding sources to assist in compliance with such 
                subparagraph.
            ``(3) Inapplicability.--The provisions of this subsection 
        shall not apply to preschool programs using the Even Start 
        model or to Even Start programs.''.
    (d) Plan Development and Duration.--Section 1112(d) (20 U.S.C. 
6312(d)) is amended to read as follows:
    ``(d) Plan Development and Duration.--
            ``(1) Consultation.--Each local educational agency plan 
        shall be developed in consultation with teachers, principals, 
        local school boards, administrators (including administrators 
        of programs described in other parts of this title), other 
        appropriate school personnel, and parents of children in 
        elementary schools and secondary schools served under this 
        part.
            ``(2) Duration.--Each plan described in paragraph (1) shall 
        remain in effect for the duration of the local educational 
        agency's participation under this part.
            ``(3) Review.--Each local educational agency shall 
        periodically review, and as necessary, revise its plan.''.
    (e) State Approval.--Section 1112(e) (20 U.S.C. 6312(e)) is amended 
to read as follows:
    ``(e) Peer Review and State Approval.--
            ``(1) In general.--Each local educational agency plan shall 
        be filed according to a schedule established by the State 
        educational agency.
            ``(2) Approval.--The State educational agency shall 
        establish a peer review process to assist in the review of 
        local educational agency plans. The State educational agency 
        shall approve a local educational agency plan only if the State 
        educational agency determines that the local educational agency 
        plan--
                    ``(A) will enable elementary schools and secondary 
                schools served by the local educational agency and 
                under this part to help all groups of students 
                specified in section 1111(b)(1) meet or exceed the 
                proficient level of performance on the assessments 
                required under section 1111(b)(4) within 10 years of 
                the date of enactment of the Public Education 
                Reinvestment, Reinvention, and Responsibility Act 
                (Three R's); and
                    ``(B) meets each of the requirements of this 
                section.
            ``(3) State review.--Each State educational agency shall at 
        least annually review each local agency plan approved under 
        this subsection against the results of the disaggregated 
        assessments required under section 1111(b)(4) for each local 
        educational agency to ensure that the progress of all students 
        in schools served by each local educational agency under this 
        part is adequate to ensure that all students in the State will 
        meet or exceed the proficient standard level of performance on 
        assessments within 10 years of the date of enactment of the 
        Public Education Reinvestment, Reinvention, and Responsibility 
        Act (Three R's).
            ``(4) Public review.--Each State educational agency will 
        make publicly available each local educational agency plan.''.
    (f) Parental Notification for English Language Instruction.--
Section 1112 (20 U.S.C. 6312) is amended by adding at the end the 
following:
    ``(g) Parental Notification for English Language Instruction.--
            ``(1) Notification.--If a local educational agency uses 
        funds under this part to provide English language instruction 
        to limited English proficient students, the local educational 
        agency shall inform a parent or the parents of a child 
        participating in an English language assistance educational 
        program assisted under this part of--
                    ``(A) the reasons for the identification of the 
                child as being in need of English language instruction;
                    ``(B) the child's level of English proficiency, how 
                such level was assessed, and the status of the child's 
                academic achievement;
                    ``(C) how the English language assistance 
                educational program will specifically help the child 
                learn English and meet age-appropriate standards for 
                grade promotion and graduation;
                    ``(D) the specific exit requirements of the English 
                language assistance educational program;
                    ``(E) the expected rate of graduation from the 
                English language assistance educational program into 
                mainstream classes; and
                    ``(F) the expected rate of graduation from 
                secondary school if funds under this part are used for 
                children in secondary schools.
            ``(2) Parental rights.--
                    ``(A) In general.--A parent or the parents of a 
                child participating in an English language assistance 
                educational program under this part shall--
                            ``(i) have the option of selecting among 
                        methods of instruction, if more than one method 
                        is offered in the program; and
                            ``(ii) have the right to have their child 
                        immediately removed from the program upon their 
                        request.
                    ``(B) Receipt of information.--A parent or the 
                parents of a child identified for participation in an 
                English language assistance educational program under 
                this part shall receive, in a manner and form 
                understandable to the parent or parents, the 
                information required by this subsection. At a minimum, 
                the parent or parents shall receive--
                            ``(i) timely information about English 
                        language assistance educational programs for 
                        limited English proficient children assisted 
                        under this part; and
                            ``(ii) if a parent of a participating child 
                        so desires, notice of opportunities for regular 
                        meetings of parents of limited English 
                        proficient children participating in English 
                        language assistance educational programs under 
                        this part for the purpose of formulating and 
                        responding to recommendations from such 
                        parents.
            ``(3) Basis for admission or exclusion.--No student shall 
        be admitted to or excluded from any federally assisted 
        education program solely on the basis of a surname or language 
        minority status.''.

SEC. 107. SCHOOLWIDE PROGRAMS.

    (a) Use of Funds for Schoolwide Programs.--Section 1114(a) (20 
U.S.C. 6314(a)) is amended--
            (1) in paragraph (1), by striking ``school described in 
        subparagraph (A)'' and all that follows through ``such 
        families.'' the second place it appears and inserting ``school 
        that serves an eligible school attendance area in which--
                    ``(A) not less than 40 percent of the children are 
                from low-income families; or
                    ``(B) not less than 40 percent of the children 
                enrolled in the school are from such families.''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``subsections 
                (c)(1) and (e) of''; and
                    (B) in subparagraph (B), by striking ``subsections 
                (c)(1) and (e) of''.
    (b) Components of a Schoolwide Program.--Section 1114(b) (20 U.S.C. 
6314(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by striking ``section 
                1111(b)(1)'' and inserting ``section 1111(b)'';
                    (B) in subparagraph (B)--
                            (i) in clause (i), by striking ``section 
                        1111(b)(1)(D)'' and inserting ``1111(b)'';
                            (ii) in clause (iii)(II), by inserting 
                        ``and'' after the semicolon;
                            (iii) in clause (iv)(II), by striking ``; 
                        and'' and inserting a period; and
                            (iv) by striking clause (vii); and
                    (C) in subparagraph (G), by striking ``section 
                1112(b)(1)'' and inserting ``section 1112''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A)--
                            (i) by striking ``Improving America's 
                        Schools Act of 1994'' and inserting ``Public 
                        Education Reinvestment, Reinvention, and 
                        Responsibility Act (Three R's)'';
                            (ii) by striking ``subsections (c)(1) and 
                        (e) of''; and
                            (iii) in clause (iv), by striking ``section 
                        1111(b)(3)'' and inserting ``section 
                        1111(b)(4)'';
                    (B) in subparagraph (B), by striking ``paragraphs 
                (1) and (3) of section 1111(b)'' and inserting 
                ``paragraphs (1) and (4) of section 1111(b)''; and
                    (C) in subparagraph (C)(i)--
                            (i) in subclause (I), by striking 
                        ``subsections (c) and (e) of''; and
                            (ii) in subclause (II), by striking 
                        ``Improving America's Schools Act of 1994'' and 
                        inserting ``Public Education Reinvestment, 
                        Reinvention, and Responsibility Act (Three 
                        R's)''.

SEC. 108. SCHOOL CHOICE.

    Section 1115A (20 U.S.C. 6316) is amended to read as follows:

``SEC. 1115A. SCHOOL CHOICE.

    ``(a) Choice Programs.--A local educational agency may use funds 
under this part, in combination with State, local, and private funds, 
to develop and implement public school choice programs, for children 
eligible for assistance under this part, that permit parents to select 
the public school that their child will attend and are consistent with 
State and local law, policy, and practice related to public school 
choice and local pupil transfer.
    ``(b) Choice Plan.--A local educational agency that chooses to 
implement a public school choice program under this section shall first 
develop a plan that--
            ``(1) contains an assurance that all eligible students 
        across grade levels served under this part will have equal 
        access to the program;
            ``(2) contains an assurance that the program does not 
        include elementary schools or secondary schools that follow a 
        racially discriminatory policy;
            ``(3) describes how elementary schools or secondary schools 
        will use resources under this part, and from other sources, to 
        implement the plan;
            ``(4) contains an assurance that the plan will be developed 
        with the involvement of parents and others in the community to 
        be served, and individuals who will carry out the plan, 
        including administrators, teachers, principals, and other 
        staff;
            ``(5) contains an assurance that parents of eligible 
        students served by the local educational agency will be given 
        prompt notice of the existence of the public school choice 
        program, the program's availability to such parents, and a 
        clear explanation of how the program will operate;
            ``(6) contains an assurance that the public school choice 
        program--
                    ``(A) shall include charter schools and any other 
                public elementary school and secondary school; and
                    ``(B) shall not include as a `receiving school' an 
                elementary school or a secondary school that--
                            ``(i) is or has been identified as a school 
                        in, or eligible for, school improvement or 
                        corrective action;
                            ``(ii) has been in school improvement or 
                        corrective action within the last 2 consecutive 
                        academic years; or
                            ``(iii) is at risk of being eligible for 
                        school improvement within the next school year;
            ``(7) contains an assurance that transportation services or 
        the costs of transportation to and from the public school 
        choice program--
                    ``(A) may be provided by the local educational 
                agency with funds under this part and from other 
                sources; and
                    ``(B) shall not be provided from funds made 
                available under this part to the local educational 
                agency that exceed 10 percent of such funds; and
            ``(8) contains an assurance that such local educational 
        agency will comply with the other requirements of this part.''.

SEC. 109. ASSESSMENT AND LOCAL EDUCATIONAL AGENCY AND SCHOOL 
              IMPROVEMENT.

    (a) Local Review.--Section 1116(a) (20 U.S.C. 6317(a)) is amended--
            (1) in paragraph (2), by striking ``1111(b)(2)(A)(i)'' and 
        inserting ``1111(b)(2)(B)'';
            (2) in paragraph (3)--
                    (A) by striking ``individual school performance 
                profiles'' and inserting ``school report cards'';
                    (B) by striking ``1111(b)(3)(I)'' and inserting 
                ``1111(b)(4)(I)''; and
                    (C) by striking ``and'' after the semicolon;
            (3) in paragraph (4), by striking the period and inserting 
        ``; and''; and
            (4) by adding at the end the following:
            ``(5) review the effectiveness of the actions and 
        activities the schools are carrying out under this part with 
        respect to parental involvement assisted under this Act.''.
    (b) School Improvement.--Section 1116(c) (20 U.S.C. 6317(c)) is 
amended to read as follows:
    ``(c) School Improvement.--
            ``(1) In general.--A local educational agency shall 
        identify for school improvement any elementary school or 
        secondary school served under this part that--
                    ``(A) for 2 consecutive years failed to make 
                adequate yearly progress as defined in the State's plan 
                under section 1111(b)(2); or
                    ``(B) was in, or was eligible for, school 
                improvement status under this section on the day 
                preceding the date of the enactment of the Public 
                Education Reinvestment, Reinvention, and Responsibility 
                Act (Three R's).
            ``(2) Transition.--The 2-year period described in paragraph 
        (1)(A) shall include any continuous period of time immediately 
        preceding the date of the enactment of the Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three R's) 
        during which an elementary school or a secondary school did not 
        make adequate yearly progress as defined in the State's plan, 
        as such plan was in effect on the day preceding the date of 
        enactment of the Public Education Reinvestment, Reinvention and 
        Responsibility Act (Three R's).
            ``(3) Targeted assistance schools.--To determine if an 
        elementary school or a secondary school that is conducting a 
        targeted assistance program under section 1115 should be 
        identified as in need of improvement under this subsection, a 
local educational agency may choose to review the progress of only 
those students in such school who are served, or are eligible for 
services, under this part.
            ``(4) Opportunity to review and present evidence.--(A) 
        Before identifying an elementary school or a secondary school 
        for school improvement under paragraph (1), the local 
        educational agency shall provide the school with an opportunity 
        to review the school level data, including assessment data, on 
        which the proposed identification is based.
            ``(B) If the principal of a school proposed for 
        identification as in need of school improvement believes that 
        the proposed identification is in error for statistical or 
        other substantive reasons, the principal may provide supporting 
        evidence to the local educational agency, which the agency 
        shall consider before making a final determination.
            ``(5) Time limits.--Not later than 30 days after a local 
        educational agency makes its initial determination that a 
        school served by the agency and receiving assistance under this 
        part is eligible for school improvement, the local educational 
        agency shall make public a final determination on the status of 
        the school.
            ``(6) Notification to parents.--A local educational agency 
        shall, in an easily understandable format, and in the 3 
        languages, other than English, spoken by the greatest number of 
        individuals in the area served by the local educational agency, 
        provide in writing to parents of each student in an elementary 
        school or a secondary school identified for school 
        improvement--
                    ``(A) an explanation of what the school improvement 
                identification means, and how the school identified for 
                improvement compares in terms of academic performance 
                to other elementary schools or secondary schools served 
                by the local educational agency and the State 
                educational agency;
                    ``(B) the reasons for such identification;
                    ``(C) the data on which such identification was 
                based;
                    ``(D) an explanation of what the school identified 
                for improvement is doing to address the problem of low 
                achievement;
                    ``(E) an explanation of what the local educational 
                agency or State educational agency is doing to help the 
                school address its achievement problems, including the 
                amounts and types of professional development being 
                provided to the instructional staff in such school, the 
                amount of any financial assistance being provided by 
                the State educational agency under section 1003, and 
                the activities that are being provided with such 
                financial assistance;
                    ``(F) an explanation of how parents described in 
                this paragraph can become involved in addressing the 
                academic issues that caused the school to be identified 
                as in need of improvement; and
                    ``(G) an explanation of the right of parents, 
                pursuant to paragraph (7), to transfer their child to a 
                higher performing public school, including a public 
                charter school or magnet school, that is not in school 
                improvement, and how such transfer shall operate.
            ``(7) Public school choice option.--
                    ``(A) Schools in improvement.--
                            ``(i) Schools in improvement on or before 
                        date of enactment.--In the case of a school 
                        identified for improvement on or before the 
                        date of enactment of the Public Education 
                        Reinvestment, Reinvention, and Responsibility 
                        Act (Three R's), a local educational agency 
                        shall not later than 18 months after such date 
                        of enactment provide all students enrolled in 
                        the school an option to transfer (consistent 
                        with State and local law, policy, and practices 
                        related to public school choice and local pupil 
                        transfer) to any other higher performing public 
                        school, including a public charter or magnet 
                        school, that--
                                    ``(I) has not been identified for 
                                school improvement or corrective 
                                action;
                                    ``(II) is not at risk of being 
                                identified for school improvement or 
                                corrective action within the succeeding 
                                academic year; and
                                    ``(III) has not been in improvement 
                                or corrective action at any time during 
                                the 2 preceding academic years.
                            ``(ii) Schools identified after date of 
                        enactment.--In the case of a school identified 
                        for improvement after the date of enactment of 
                        the Public Education Reinvestment, Reinvention, 
                        and Responsibility Act (Three R's), a local 
                        educational agency shall not later than 12 
                        months after the date on which a local 
                        educational agency identifies the school for 
                        improvement provide all students enrolled in 
                        the school with the transfer option described 
                        in clause (i).
                    ``(B) Cooperative agreement.--If all public schools 
                served by the local educational agency to which a child 
                may transfer under clause (i) are identified for 
                improvement, or, if public schools in the agency's 
                jurisdiction that are not in improvement cannot 
                accommodate all of the students who are eligible to 
                transfer because of capacity, or State or local law, 
                policy, and practices related to public school choice 
and local pupil transfer, the local educational agency shall, to the 
extent practicable, establish a cooperative agreement with other local 
educational agencies that serve geographic areas in proximity to the 
geographic area served by the local educational agency, to enable a 
child to transfer (consistent with State and local law, policy, and 
practices related to public school choice and local pupil transfer) to 
a school served by such other local educational agencies that meets the 
requirements described in subparagraph (A)(i).
                    ``(C) Transportation.--A local educational agency 
                that serves a school that has been identified for 
                improvement shall provide transportation services or 
                the costs of such services for children of parents who 
                choose to transfer their children pursuant to this 
                paragraph to a different school. Not more than 10 
                percent of the funds allocated to a local educational 
                agency under this part may be used to provide such 
                transportation services or costs of such services.
                    ``(D) Continuation option.--Once a school is no 
                longer identified for improvement or in corrective 
                action, the local educational agency shall continue to 
                provide public school choice as an option to students 
                in such schools for a period of not less than 2 years.
            ``(8) School plan.--(A) Each school identified under 
        paragraph (1) for school improvement shall, not later than 3 
        months after being so identified, develop or revise a school 
        plan, in consultation with parents, school staff, the local 
        educational agency serving the school, the local school board, 
        and other outside experts, for approval by such local 
        educational agency. The school plan shall--
                    ``(i) incorporate scientifically based research 
                strategies that strengthen the core academic programs 
                in the school and address the specific academic issues 
                that caused the school to be identified for school 
                improvement;
                    ``(ii) adopt policies and practices in the school's 
                core academic program that have the greatest likelihood 
                of ensuring that all groups of students specified in 
                section 1111(b)(2)(B)(iv) enrolled in the school will 
                meet or exceed the State's proficient level of 
                performance on the assessment required in section 
                1111(b)(4) within 10 years of the date of enactment of 
                the Public Education Reinvestment, Reinvention, and 
                Responsibility Act (Three R's);
                    ``(iii) assure that the school will reserve not 
                less than 10 percent of the funds made available to it 
                under this part for each fiscal year that the school is 
                in school improvement for the purpose of providing the 
                school's teachers and principal high quality 
                professional development that--
                            ``(I) directly addresses the academic 
                        achievement problem that caused the school to 
                        be identified for school improvement; and
                            ``(II) meets the requirements for 
                        professional development activities under 
                        section 1119;
                    ``(iv) specify how the funds described in clause 
                (iii) will be used to remove the school from school 
                improvement status;
                    ``(v) establish specific annual, numerical progress 
                goals for each group of students specified in section 
                1111(b)(2)(B)(iv) enrolled in the school that will 
                ensure that all such groups of students meet or exceed 
                the State's proficient standard level of performance 
                within 10 years of the date of enactment of the Public 
                Education Reinvestment, Reinvention, and Responsibility 
                Act (Three R's);
                    ``(vi) identify how the school will provide written 
                notification to parents of each child enrolled in such 
                school, in a format and, to the extent practicable, in 
                a language such parents can understand; and
                    ``(vii) specify the responsibilities of the school, 
                the local educational agency, and the State educational 
                agency serving such school under the plan.
            ``(B) The local educational agency described in 
        subparagraph (A)(vi) may condition approval of a school plan on 
        inclusion of 1 or more of the corrective actions specified in 
        paragraph (10)(C).
            ``(C) A school shall implement the school plan or revised 
        plan expeditiously, but not later than the beginning of the 
        school year following the school year in which the school was 
        identified for improvement.
            ``(D) The local educational agency described in 
        subparagraph (A)(vi) shall establish a peer review process to 
        assist with review of a school improvement plan prepared by the 
        school served by the local educational agency, promptly review 
        the school plan, work with the school as necessary, and approve 
        the school plan if the school plan meets the requirements of 
        this paragraph.
            ``(9) Technical assistance.--(A) For each school identified 
        for school improvement under paragraph (1), the local 
        educational agency serving the school shall provide technical 
        assistance as the school develops and implements its school 
        plan.
            ``(B) Such technical assistance--
                    ``(i) shall include assistance in analyzing data 
                from the assessments required under section 1111(b)(4), 
                and other samples of student work, to identify and 
                address instructional problems and solutions;
                    ``(ii) shall include assistance in identifying and 
                implementing scientifically based instructional 
                strategies and methods that have proven effective in 
                addressing the specific instructional issues that 
                caused the school to be identified for school 
                improvement;
                    ``(iii) shall include assistance in analyzing and 
                revising the school's budget such that the school 
                resources are more effectively focused on those 
                activities most likely to increase student achievement 
                and to remove the school from school improvement 
                status;
                    ``(iv) may be provided directly by the local 
                educational agency, through mechanisms authorized under 
                section 1117, or with the local educational agency's 
                approval, by the State educational agency, an 
                institution of higher education in full compliance with 
                all the reporting provisions of title II of the Higher 
                Education Act of 1965, a private not-for-profit 
                organization or for-profit organization, an educational 
                service agency, the recipient of a Federal contract or 
                cooperative agreement as described under section 7005, 
                or other entity with experience in helping schools 
                improve achievement.
            ``(C) Technical assistance provided under this section by a 
        local educational agency or an entity authorized by such agency 
        shall be based upon scientifically based research.
            ``(10) Corrective action.--In order to help students served 
        under this part meet challenging State standards, each local 
        educational agency shall implement a system of corrective 
        action in accordance with the following:
                    ``(A) After providing technical assistance under 
                paragraph (9) and subject to subparagraph (F), the 
                local educational agency--
                            ``(i) may take corrective action at any 
                        time with respect to a school served by the 
                        local educational agency that has been 
                        identified under paragraph (1);
                            ``(ii) shall take corrective action with 
                        respect to any school served by the local 
                        educational agency that fails to make adequate 
                        yearly progress, as defined by the State under 
                        section 1111(b)(2)(B), after the end of the 
                        second year following the school year in which 
                        the school was identified under paragraph (1); 
                        and
                            ``(iii) shall continue to provide technical 
                        assistance while instituting any corrective 
                        action under clause (i) or (ii).
                    ``(B) As used in this paragraph, the term 
                `corrective action' means action, consistent with State 
                and local law, that--
                            ``(i) substantially and directly responds 
                        to--
                                    ``(I) the consistent academic 
                                failure of a school that caused the 
                                local educational agency to take such 
                                action; and
                                    ``(II) any underlying staffing, 
                                curricula, or other problem in the 
                                school; and
                            ``(ii) is designed to increase 
                        substantially the likelihood that students 
                        enrolled in the school subject to corrective 
                        action will perform at the proficient and 
                        advanced performance levels.
                    ``(C) In the case of a school described in 
                subparagraph (A)(ii), the local educational agency 
                shall take not less than 1 of the following corrective 
                actions:
                            ``(i) Withhold funds from the school.
                            ``(ii) Make alternative governance 
                        arrangements, including reopening the school as 
                        a public charter school.
                            ``(iii) Reconstitute the relevant school 
                        staff.
                            ``(iv)(I) Authorize students to transfer to 
                        other higher performing public schools served 
                        by the local educational agency, including 
                        public charter and magnet schools.
                            ``(II) Provide such students transportation 
                        services, or the costs of transportation, to 
                        such schools (except that such funds used to 
                        provide transportation services or costs of 
                        transportation shall not exceed 10 percent of 
                        the amount authorized under section 
                        1122(a)(2)).
                            ``(III) Take not less than 1 additional 
                        action described under this subparagraph.
                            ``(v) Institute and fully implement a new 
                        curriculum, including appropriate professional 
                        development for all relevant staff, that is 
                        based upon scientifically based research and 
                        offers substantial promise of improving 
                        educational achievement for low-performing 
                        students.
                    ``(D) A local educational agency may delay, for a 
                period not to exceed 1 year, implementation of 
                corrective action only if the failure to make adequate 
                yearly progress was justified due to exceptional or 
                uncontrollable circumstances, such as a natural 
                disaster or a precipitous and unforeseen decline in the 
                financial resources of the local educational agency or 
                school.
                    ``(E) The local educational agency shall publish 
                and disseminate to the public and to the parents of 
                each student enrolled in a school subject to corrective 
                action, in a format and, to the extent practicable, in 
                a language that the parents can understand, information 
                regarding any corrective action the local educational 
                agency takes under this paragraph through such means as 
                the Internet, the media, and public agencies.
                    ``(F)(i) Before taking corrective action with 
                respect to any school under this paragraph, a local 
                educational agency shall provide the school an 
                opportunity to review the school level data, including 
                assessment data, on which the proposed determination is 
                made.
                    ``(ii) If the school believes that the proposed 
                determination is in error for statistical or other 
                substantive reasons, the school principal may provide 
                supporting evidence to the local educational agency, 
                which shall consider such evidence before making a 
                final determination.
                    ``(G) Time limits.--Not later than 30 days after 
                the local educational agency makes its initial 
                determination that a school served by the local 
                educational agency and receiving assistance under this 
                part is eligible for corrective action, the local 
                educational agency shall make a final and public 
                determination on the status of the school.
            ``(11) State educational agency responsibilities.--If a 
        State educational agency determines that a local educational 
        agency failed to carry out its responsibilities under this 
        section, or determines that, after 1 year of implementation of 
        the corrective action, such action has not resulted in 
        sufficient progress in increased student performance, the State 
        educational agency shall take such action as the agency finds 
        necessary, including designating a course of corrective action 
        described in paragraph (10)(C), consistent with this section, 
        to improve the affected schools and to ensure that the local 
        educational agency carries out the local educational agency's 
        responsibilities under this section.
            ``(12) Special rules.--Schools that, for at least 2 of the 
        3 years following identification under paragraph (1), make 
        adequate yearly progress toward meeting the State's proficient 
        and advanced levels of performance shall no longer be 
        identified for school improvement.''.
    (c) State Review and Local Educational Agency Improvement.--Section 
1116(d) (20 U.S.C. 6317(d)) is amended to read as follows:
    ``(d) State Review and Local Educational Agency Improvement.--
            ``(1) In general.--A State educational agency shall 
        annually review the progress of each local educational agency 
        within the State receiving funds under this part to determine 
        whether schools served by such agencies and receiving 
        assistance under this part are making adequate yearly progress, 
        as defined in section 1111(b)(2), toward meeting the State's 
        student performance standards and to determine whether each 
        local educational agency is carrying out its responsibilities 
        under sections 1116 and 1117.
            ``(2) Identification of local educational agency for 
        improvement.--A State educational agency shall identify for 
        improvement any local educational agency that--
                    ``(A) for 2 consecutive years fails to make 
                adequate yearly progress as defined in the State's plan 
                under section 1111(b)(2); or
                    ``(B) had been identified for, or was eligible for, 
                improvement under this section as this section was in 
                effect on the day preceding the date of enactment of 
                the Public Education Reinvestment, Reinvention, and 
                Responsibility Act (Three R's).
            ``(3) Transition.--The 2-year period described in paragraph 
        (2)(A) shall include any continuous period of time immediately 
        preceding the date of the enactment of the Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's) during 
which a local educational agency did not make adequate yearly progress 
as defined in the State's plan, as such plan was in effect on the day 
preceding the date of the enactment of the Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's).
            ``(4) Targeted assistance schools.--For purposes of 
        targeted assistance schools within a local educational agency, 
        a State educational agency may choose to review the progress of 
        only the students in such schools who are served under this 
        part.
            ``(5) Opportunity to review and present evidence.--(A) 
        Before identifying a local educational agency for improvement 
        under paragraph (2), a State educational agency shall provide 
        the local educational agency with an opportunity to review the 
        local educational agency data, including assessment data, on 
        which the proposed identification is based.
            ``(B) If the local educational agency believes that the 
        proposed identification is in error for statistical or other 
        substantive reasons, the local educational agency may provide 
        supporting evidence to the State educational agency, which the 
        State educational agency shall consider before making a final 
        determination.
            ``(6) Time limits.--Not later than 45 days after the State 
        educational agency makes its initial determination that a local 
        educational agency within the State and receiving assistance 
        under this part is eligible for improvement, the State 
        educational agency shall make public a final determination on 
        the status of the local educational agency.
            ``(7) Notification to parents.--The State educational 
        agency shall promptly notify parents of each student enrolled 
        in a school served by a local educational agency identified for 
        improvement, in a format, and to the extent practicable, in a 
        language the parents can understand, of the reasons for such 
        agency's identification and how parents can participate in 
        upgrading the quality of the local educational agency.
            ``(8) Local educational agency revisions.--
                    ``(A) In general.--Each local educational agency 
                identified under paragraph (2) shall, not later than 3 
                months after being so identified, develop or revise a 
                local educational agency plan, in consultation with the 
                local school board, parents, teachers, school staff, 
                and others, for approval by the State educational 
                agency. Such plan shall--
                            ``(i) incorporate scientifically based 
                        research strategies that strengthen the core 
                        academic program in the local educational 
                        agency;
                            ``(ii) identify specific annual numerical 
                        academic achievement objectives in at least the 
                        areas of mathematics and English language arts 
                        that the local educational agency will meet, 
                        with such objectives being calculated in a 
                        manner such that their achievement will ensure 
                        that each group of students enrolled in each 
                        school served by the local educational agency 
                        will meet or exceed the proficient standard 
                        level of performance in assessments required 
                        under section 1111(b)(4) within 10 years of the 
                        date of enactment of the Public Education 
                        Reinvestment, Reinvention, and Responsibility 
                        Act (Three R's); and
                            ``(iii) assure that the local educational 
                        agency will--
                                    ``(I) reserve not less than 10 
                                percent of the funds made available to 
                                the local educational agency under this 
                                part for each fiscal year that the 
                                agency is in improvement for the 
                                purpose of providing high quality 
                                professional development to teachers 
                                and principals at schools served by the 
                                agency and receiving funds under this 
                                part that directly address the academic 
                                achievement problem that caused the 
                                local educational agency to be 
                                identified for improvement and shall be 
                                in keeping with the definition of 
                                professional development provided in 
                                section 1119; and
                                    ``(II) the improvement plan shall 
                                specify how these funds will be used to 
                                remove the local educational agency 
                                from improvement status;
                            ``(iv) identify how the local educational 
                        agency will provide written notification to 
                        parents described in paragraph (7) in a format, 
                        and to the extent practicable in a language, 
                        that the parents can understand, pursuant to 
                        paragraph (7);
                            ``(v) specify the responsibilities of the 
                        State educational agency and the local 
                        educational agency under the plan; and
                            ``(vi) include a review of the local 
                        educational agency budget to ensure that 
                        resources are focused on those activities that 
                        are most likely to improve student achievement 
                        and to remove the agency from improvement 
                        status.
                    ``(B) Peer review.--The State educational agency 
                shall establish a peer review process to assist with 
                the review of the local educational agency improvement 
                plan, promptly review the plan, work with the local 
                educational agency as necessary, and approve the plan 
                if the plan meets the requirements of this paragraph.
                    ``(C) Deadline for implementation.--The local 
                educational agency shall implement the local 
                educational agency plan or revised plan expeditiously, 
                but not later than the beginning of the school year 
                following the school year in which the agency was 
identified for improvement.
                    ``(D) Resources reallocation.--If the local 
                educational agency budget fails to allocate resources, 
                consistent with, subparagraph (A)(iv), the State 
                educational agency may direct the local educational 
                agency to reallocate resources to more effective 
                activities.
            ``(9) State educational agency responsibility.--For each 
        local educational agency identified under paragraph (2), the 
        State educational agency shall provide technical or other 
        assistance, if requested, as authorized under section 1117, to 
        better enable the local educational agency--
                    ``(A) to develop and implement the local 
                educational agency plan or revised plan as approved by 
                the State educational agency consistent with the 
                requirements of this section; and
                    ``(B) to work with schools served by the local 
                educational agency that are identified for improvement.
            ``(10) Technical assistance.--Technical assistance provided 
        by the State educational agency--
                    ``(A) shall include assistance in analyzing data 
                from the assessments required under section 1111(b)(4) 
                to identify and address instructional problems and 
                solutions;
                    ``(B) shall include assistance in identifying and 
                implementing scientifically based instructional 
                strategies and methods that have proven effective in 
                addressing the specific instructional issues that 
                caused the local educational agency to be identified 
                for improvement;
                    ``(C) shall include assistance in analyzing and 
                revising the local educational agency's budget such 
                that the agency's resources are more effectively 
                focused on those activities most likely to increase 
                student achievement and to remove the agency from 
                improvement status; and
                    ``(D) may be provided by--
                            ``(i) the State educational agency; or
                            ``(ii) with the local educational agency's 
                        approval, by an institution of higher education 
                        (in full compliance with all the reporting 
                        provisions of title II of the Higher Education 
                        Act of 1965), a private not-for-profit or for-
                        profit organization, an educational service 
                        agency, the recipient of a Federal contract or 
                        cooperative agreement as described under 
                        section 7005, or any other entity with 
                        experience in helping schools improve 
                        achievement.
            ``(11) Resources reallocation.--The State educational 
        agency may, as a condition of providing the local educational 
        agency with technical assistance and financial support in 
        developing and carrying out an improvement plan, require that 
        the local educational agency reallocate resources away from 
        ineffective or inefficient activities to activities that, 
        through scientific research, have proven to have the greatest 
        impact on increasing student achievement and closing the 
        achievement gap between groups of students.
            ``(12) Corrective action.--In order to help students served 
        under this part meet challenging State standards, each State 
        educational agency shall implement a system of corrective 
        action in accordance with the following:
                    ``(A) After providing technical assistance under 
                paragraph (10), and subject to subparagraph (D), the 
                State educational agency--
                            ``(i) shall take corrective action with 
                        respect to any local educational agency that 
                        fails to make adequate yearly progress, as 
                        defined by the State, after the end of the 
                        second year following its identification under 
                        paragraph (2); and
                            ``(ii) shall continue to provide technical 
                        assistance while instituting any corrective 
                        action under clause (i) or (ii).
                    ``(B) As used in this paragraph, the term 
                `corrective action' means action, consistent with State 
                law, that--
                            ``(i) substantially and directly responds 
                        to--
                                    ``(I) the consistent academic 
                                failure of schools served by a local 
                                educational agency that caused the 
                                State educational agency to take such 
                                action with respect to the local 
                                educational agency; and
                                    ``(II) any underlying staffing, 
                                curricular, or other problem in the 
                                schools served by the local educational 
                                agency; and
                            ``(ii) is designed to meet the goal of 
                        having all students served under this part 
                        perform at the proficient and advanced 
                        performance levels.
                    ``(C) In the case of a local educational agency 
                described in subparagraph (A)(ii), the State 
                educational agency shall take not less than 1 of the 
                following corrective actions:
                            ``(i) Withhold funds from the local 
                        educational agency.
                            ``(ii) Reconstitute the relevant local 
                        educational agency personnel.
                            ``(iii) Remove particular schools from the 
                        area served by the local educational agency, 
                        and establish alternative arrangements for 
                        public governance and supervision of such 
                        schools.
                            ``(iv) Appoint, through the State 
                        educational agency, a receiver or trustee to 
                        administer the affairs of the local educational 
                        agency in place of the local educational 
                        agency's superintendent and school board.
                            ``(v) Abolish or restructure the local 
                        educational agency.
                            ``(vi)(I) Authorize students to transfer 
                        from a school operated by the local educational 
                        agency to a higher performing public school, 
                        including a public charter or magnet school, 
                        operated by another local educational agency.
                            ``(II) Provide students described in 
                        subclause (I) transportation services, or the 
                        costs of transportation, not to exceed 10 
                        percent of the funds allocated to a local 
                        educational agency under this part, to such 
                        higher performing schools or public charter 
                        schools.
                            ``(III) Take not less than 1 additional 
                        action described under this subparagraph.
                    ``(D) Prior to implementing any corrective action, 
                the State educational agency shall provide notice and 
                an opportunity for a hearing to the affected local 
                educational agency, if State law provides for such 
                notice and opportunity.
                    ``(E) Not later than 45 days after the State 
                educational agency makes its initial determination that 
                a local educational agency in the State and receiving 
                assistance under this part is eligible for improvement, 
                the State educational agency shall make public a final 
                determination on the status of the local educational 
                agency.
                    ``(F) The State educational agency shall publish 
                and disseminate to parents described in paragraph (7) 
                and the public information regarding any corrective 
                action the State educational agency takes under this 
                paragraph through such means as the Internet, the 
                media, and public agencies.
                    ``(G) The State educational agency may delay, for a 
                period not to exceed 1 year, implementation of 
                corrective action if the local educational agency's 
                failure to make adequate yearly progress was justified 
                due to exceptional or uncontrollable circumstances, 
                such as a natural disaster or a precipitous and 
                unforeseen decline in the financial resources of the 
                local educational agency or schools served by the local 
                educational agency.''.

SEC. 110. STATE ASSISTANCE FOR SCHOOL SUPPORT AND IMPROVEMENT.

    Section 1117 (20 U.S.C. 6318) is amended to read as follows:

``SEC. 1117. STATE ASSISTANCE FOR SCHOOL SUPPORT AND IMPROVEMENT.

    ``(a) System for Support.--Using funds allocated under section 
1003(a)(1), each State educational agency shall establish a statewide 
system of intensive and sustained support and improvement for local 
educational agencies, elementary schools, and secondary schools 
receiving funds under this part, in order to ensure that all groups of 
students specified in section 1111 and attending such schools meet or 
exceed the proficient standard level performance on the assessments 
required by section 1111(b)(4) within 10 years of the date of enactment 
of the Public Education Reinvestment, Reinvention, and Responsibility 
Act (Three R's).
    ``(b) Priorities.--In carrying out this section, a State 
educational agency shall--
            ``(1) first, provide support and assistance to local 
        educational agencies and schools subject to correction action 
        under section 1116, in accordance with section 1116(c)(11), for 
        which a local educational agency has failed to carry out its 
        responsibilities under section 1116(c) (9) and (10);
            ``(2) second, provide support and assistance to local 
        educational agencies identified as in need of improvement under 
        section 1116, and assist elementary schools and secondary 
        schools; and
            ``(3) third, provide support and assistance to local 
        educational agencies and schools participating under this part 
        that are at risk of being identified as being in need of 
        improvement within the next academic year.
    ``(c) Approaches.--In order to achieve the purpose described in 
subsection (a), each statewide system shall provide technical 
assistance and support through approaches such as--
            ``(1) school support teams, composed of individuals who are 
        knowledgeable about scientifically based research, teaching and 
        learning practices, and particularly about strategies for 
        improving educational results for low-achieving children; and
            ``(2) designating and using Distinguished Educators, who 
        are chosen from schools served under this part that have been 
        especially successful in improving academic achievement.
    ``(d) Funds.--Each State educational agency--
            ``(1) shall use funds reserved under section 1003(a)(1), 
        but not used under section 1003(a)(2), to carry out this 
        section; and
            ``(2) may use State administrative funds authorized under 
        section 1703(c) to carry out this section.
    ``(e) Alternatives.--The State educational agency may--
            ``(1) devise additional approaches to providing the 
        technical assistance and support described in subsection (c), 
        such as providing assistance through institutions of higher 
        education, educational service agencies, or other local 
        consortia; and
            ``(2) seek approval from the Secretary to use funds under 
        section 1003(a)(2) for such approaches as part of the State 
        plan.''.

SEC. 111. PARENTAL INVOLVEMENT CHANGES.

    (a) Local Educational Agency Policy.--Section 1118(a) (20 U.S.C. 
6319(a)) is amended--
            (1) in paragraph (1), by striking ``programs, activities, 
        and procedures'' and inserting ``activities and procedures'';
            (2) in paragraph (2), by striking subparagraphs (E) and (F) 
        and inserting the following:
                    ``(E) conduct, with the involvement of parents, an 
                annual evaluation of the content and effectiveness of 
                the parental involvement policy in improving the 
                academic quality of the schools served under this part;
                    ``(F) involve parents in the activities of the 
                schools served under this part; and
                    ``(G) promote consumer friendly environments within 
                the local educational agency and schools served under 
                this part.'';
            (3) in paragraph (3), by adding at the end the following 
        new subparagraph:
            ``(C) Not less than 90 percent of the funds reserved under 
        subparagraph (A) shall be distributed to schools served under 
        this part.''.
    (b) Notice.--Section 1118(b)(1) (20 U.S.C. 6319(b)(1)) is amended 
by inserting after the first sentence ``Parents shall be notified of 
the policy in a format, and to the extent practicable in a language, 
that the parents can understand.''.
    (c) Parental Involvement.--Section 1118(c)(4) (20 U.S.C. 
6319(c)(4)) is amended--
            (1) in subparagraph (B), by striking ``school performance 
        profiles required under section 1116(a)(3)'' and inserting 
        ``school reports described under section 4401'';
            (2) by redesignating subparagraphs (D) and (E) as 
        subparagraphs (F) and (G), respectively;
            (3) by inserting after subparagraph (C) the following:
                    ``(D) notice of the school's designation as a 
                school in need of improvement under section 1116(b), if 
                applicable, and a clear explanation of what such 
                designation means;
                    ``(E) notice of corrective action taken against the 
                school under section 1116(c)(9) and 1116(d)(12), if 
                applicable, and a clear explanation of what such action 
                means;''; and
            (4) in subparagraph (G) (as redesignated by paragraph (2)), 
        by striking ``subparagraph (D)'' and inserting ``subparagraph 
        (F)''.
    (d) Building Capacity for Involvement.--Section 1118(e) (20 U.S.C 
6319(e)) is amended--
            (1) in paragraph (1), by striking ``National Educational 
        Goals,'';
            (2) by redesignating paragraphs (14) and (15) as paragraphs 
        (16) and (17), respectively;
            (3) by inserting after paragraph (13) the following:
            ``(14) may establish a district wide parent advisory 
        council to advise on all matters related to parental 
        involvement in programs supported under this part;''; and
            (4) by redesignating paragraph (5) as paragraph (15) and 
        transferring such paragraph to follow paragraph 14 (as 
        redesignated by paragraph (3));
            (5) by inserting after paragraph (4) the following:
            ``(5) shall expand the use of electronic communications 
        among teachers, students, and parents, such as through the use 
        of websites and e-mail communications;'';
            (6) in paragraph (8), by inserting ``, to the extent 
        practicable, in a language and format the parent can 
        understand'' before the semicolon; and
            (7) in paragraph (15) (as redesignated by paragraph (4)), 
        by striking ``shall'' and inserting ``may''.
    (e) Accessibility.--Section 1118(f) (20 U.S.C. 6319(f)) is amended 
by striking ``, including'' and all that follows through the period and 
inserting ``and of parents of migratory children, including providing 
information and school reports required under section 1111 and 
described in section 4401 in a language and form such parents 
understand.''.

SEC. 112. QUALIFICATIONS FOR TEACHERS AND PARAPROFESSIONALS.

    Title I of the Act (20 U.S.C. 6301 et seq.) is amended--
            (1) by redesignating section 1119 (20 U.S.C. 6320) as 
        section 1119A; and
            (2) by inserting after section 1118 the following:

``SEC. 1119. QUALIFICATIONS FOR TEACHERS AND PARAPROFESSIONALS.

    ``(a) In General.--Each State educational agency receiving 
assistance under this part shall develop and submit to the Secretary a 
plan to ensure that all teachers teaching within the State are fully 
qualified, as defined in section 2002(1), not later than December 31, 
2005. Such plan shall include an assurance that the State educational 
agency will require each local educational agency and school receiving 
funds under this part publicly to report the annual progress with 
respect to the local educational agency's and school's performance in 
increasing the percentage of classes in core academic areas taught by 
fully qualified teachers.
    ``(b) New Paraprofessionals.--
            ``(1) In general.--Each local educational agency receiving 
        assistance under this part shall ensure that all 
        paraprofessionals hired 1 year or more after the effective date 
        of the Public Education Reinvestment, Reinvention, and 
        Responsibility Act (Three R's) and working in a program 
        supported with funds under this part shall--
                    ``(A) have completed at least 2 years of study at 
                an institution of higher education;
                    ``(B) have obtained an associate's (or higher) 
                degree; or
                    ``(C) have met a rigorous standard of quality that 
                demonstrates, through a formal assessment--
                            ``(i) knowledge of, and the ability to 
                        assist in instructing reading, writing, and 
                        math; or
                            ``(ii) knowledge of, and the ability to 
                        assist in instructing reading readiness, 
                        writing readiness, and math readiness, as 
                        appropriate.
            ``(2) Clarification.--For purposes of paragraph (1)(C), the 
        receipt of a high school diploma (or its recognized equivalent) 
        shall be necessary but not by itself sufficient to satisfy the 
        requirements of such paragraph.
    ``(c) Existing Paraprofessionals.--Each local educational agency 
receiving assistance under this part shall ensure that all 
paraprofessionals hired before the date that is 1 year after the 
effective date of the Public Education Reinvestment, Reinvention, and 
Responsibility Act (Three R's) and working in a program supported 
with funds under this part shall, not later than 3 years after such 
effective date, satisfy the requirements of subsection (b).
    ``(d) Exceptions for Translation and Parental Involvement 
Activities.--Subsections (b) and (c) shall not apply to a 
paraprofessional--
                    ``(A) who is proficient in English and a language 
                other than English and who provides services primarily 
                to enhance the participation of children in programs 
                under this part by acting as a translator; or
                    ``(B) whose duties consist solely of conducting 
                parental involvement activities consistent with section 
                1118.
    ``(e) General Requirement for All Paraprofessionals.--Each local 
educational agency receiving assistance under this part shall ensure 
that all paraprofessionals working in a program supported with funds 
under this part, regardless of the paraprofessional's hiring date, 
possess a high school diploma or its recognized equivalent.
    ``(f) Duties of Paraprofessionals.--
            ``(1) In general.--Each local educational agency receiving 
        assistance under this part shall ensure that a paraprofessional 
        working in a program supported with funds under this part is 
        not assigned a duty inconsistent with this subsection.
            ``(2) Responsibilities paraprofessionals may be assigned.--
        A paraprofessional described in paragraph (1) may only be 
        assigned--
                    ``(A) to provide one-on-one tutoring for eligible 
                students, if the tutoring is scheduled at a time when a 
                student would not otherwise receive instruction from a 
                teacher;
                    ``(B) to assist with classroom management, such as 
                organizing instructional and other materials;
                    ``(C) to provide assistance in a computer 
                laboratory;
                    ``(D) to conduct parental involvement activities;
                    ``(E) to provide support in a library or media 
                center;
                    ``(F) to act as a translator; or
                    ``(G) to provide instructional services to 
                students;
            ``(3) Additional limitations.--A paraprofessional described 
        in paragraph (1)--
                    ``(A) may not provide any instructional service to 
                a student unless the paraprofessional is working under 
                the direct supervision of a fully qualified teacher; 
                and
                    ``(B) may not provide instructional services to 
                students in the area of reading, writing, or math 
                unless the paraprofessional has demonstrated, through a 
                State or local assessment, the ability effectively to 
                carry out reading, writing, or math instruction.
    ``(g) Use of Funds.--
            ``(1) Professional development.--A local educational agency 
        receiving funds under this part may use such funds to support 
        ongoing training and professional development to assist 
        teachers and paraprofessionals in satisfying the requirements 
        of this section.
            ``(2) Limitation on use of funds for paraprofessionals.--
                    ``(A) In general.--Beginning on and after the 
                effective date of the Public Education Reinvestment, 
                Reinvention, and Reponsibility Act (Three R's), a local 
                educational agency may not use funds received under 
                this part to fund any paraprofessional hired after such 
                date unless the hiring is to fill a vacancy created by 
                the departure of another paraprofessional funded under 
                this part and such new paraprofessional satisfies the 
                requirements of subsection (b) or (c).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                for a fiscal year to a local educational agency that 
                can demonstrate to the State that all teachers under 
                the jurisdiction of the agency are fully qualified.
    ``(h) Verification of Compliance.--
            ``(1) In general.--In verifying compliance with this 
        section, each local educational agency at a minimum shall 
        require that the principal of each school operating a program 
        under section 1114 or 1115 annually attest in writing as to 
        whether such school is in compliance with the requirements of 
        this section.
            ``(2) Availability of information.--Copies of attestations 
        under paragraph (1)--
                    ``(A) shall be maintained at each school operating 
                a program under section 1114 or 1115 and at the main 
                office of the local educational agency; and
                    ``(B) shall be available to any member of the 
                general public upon request.''.

SEC. 113. PROFESSIONAL DEVELOPMENT.

    Section 1119A (as redesignated by section 112(a)) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Purpose.--The purpose of this section is to assist each local 
educational agency receiving assistance under this part in increasing 
the academic achievement of eligible children (as identified under 
section 1115(b)(1)(B)) (in this section referred to as eligible 
children) through improved teacher quality.'';
            (2) in subsection (b)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) Required activities.--Each local educational agency 
        receiving assistance under this part shall provide professional 
        development activities under this section that shall--
                    ``(A) give teachers, principals, and administrators 
                the knowledge and skills to provide eligible children 
                with the opportunity to meet challenging State or local 
                content standards and student performance standards;
                    ``(B) support the recruiting, hiring, and training 
                of fully qualified teachers, including teachers fully 
qualified through State and local alternative routes;
                    ``(C) advance teacher understanding of effective 
                instructional strategies, based on scientifically based 
                research, for improving eligible children achievement, 
                at a minimum, in mathematics, science, and English 
                language arts;
                    ``(D) be directly related to the curricula and 
                content areas in which the teacher provides 
                instruction;
                    ``(E) be designed to enhance the ability of a 
                teacher to understand and use the State's standards for 
                the subject area in which the teacher provides 
                instruction;
                    ``(F) be tied to scientifically based research that 
                demonstrates the effectiveness of such professional 
                development activities or programs in increasing 
                eligible children achievement or substantially 
                increasing the knowledge and teaching skills of 
                teachers;
                    ``(G) be of sufficient intensity and duration (not 
                to include 1-day or short-term workshops and 
                conferences) to have a positive and lasting impact on 
                the teacher's performance in the classroom, except that 
                this subparagraph shall not apply to an activity if 
                such activity is one component of a long-term 
                comprehensive professional development plan established 
                by the teacher and the teacher's supervisor based upon 
                an assessment of their needs, their eligible children's 
                needs, and the needs of the local educational agency;
                    ``(H) be developed with extensive participation of 
                teachers, principals, parents, administrators of 
                schools, and local school boards of schools to be 
                served under this part;
                    ``(I) to the extent appropriate, provide training 
                for teachers in the use of technology so that 
                technology and its applications are effectively used in 
                the classroom to improve teaching and learning in the 
                curricula and academic content areas in which the 
                teachers provide instruction;
                    ``(J) as a whole, be regularly evaluated for such 
                activities' impact on increased teacher effectiveness 
                and improved student achievement, with the findings of 
                such evaluations used to improve the quality of 
                professional development; and
                    ``(K) include strategies for identifying and 
                eliminating gender and racial bias in instructional 
                materials, methods, and practices.'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by inserting ``and 
                        data to inform and instruct classroom 
                        practice'' before the semicolon;
                            (ii) by striking subparagraphs (D) and (G);
                            (iii) by redesignating subparagraphs (E), 
                        (F), (H), and (I), as subparagraphs (D), (E), 
                        (F) and (G), respectively; and
                            (iv) by inserting after subparagraph (G) 
                        (as redesignated by clause (iii)) the following 
                        new subparagraph:
                    ``(H) instruction in the ways that teachers, 
                principals, and guidance counselors can work with 
                parents and students from groups, such as females and 
                minorities, that are underrepresented in careers in 
                mathematics, science, engineering, and technology, to 
                encourage and maintain the interest of such students in 
                those careers.'';
            ``(2) Optional activities.--Such professional development 
        activities may include--
                    ``(A) instruction in the use of data and 
                assessments to inform and instruct classroom practice;
                    ``(B) instruction in ways that teachers, 
                principals, pupil services personnel, and school 
                administrators may work more effectively with parents;
                    ``(C) the forming of partnerships with institutions 
                of higher education to establish school-based teacher 
                training programs that provide prospective teachers and 
                novice teachers with an opportunity to work under the 
                guidance of experienced teachers and college faculty;
                    ``(D) the creation of career ladder programs for 
                paraprofessionals (assisting teachers under this part) 
                to obtain the education necessary for such 
                paraprofessionals to become licensed and certified 
                teachers;
                    ``(E) instruction in ways to teach special needs 
                children;
                    ``(F) joint professional development activities 
                involving programs under this part, Head Start, Even 
                Start, or State-run preschool program personnel;
                    ``(G) instruction in experiential-based teaching 
                methods such as service or applied learning;
                    ``(H) mentoring programs focusing on changing 
                teacher behaviors and practices to help novice 
                teachers, including teachers who are members of a 
                minority group, develop and gain confidence in their 
                skills, to increase the likelihood that they will 
                continue in the teaching profession, and generally to 
                improve the quality of their teaching; and
                    ``(I) instruction in gender-equitable methods, 
                techniques, and practices.
            (3) by striking subsections (f) through (i); and
            (4) by adding after subsection (e) the following:
    ``(f) Consolidation of Funds.--Funds provided under this part that 
are used for professional development purposes may be consolidated with 
funds provided under title II of this Act and other sources.
    ``(g) Definition.--The term `fully qualified' has the same meaning 
given such term in section 2002(1).

SEC. 114. FISCAL REQUIREMENTS.

    Section 1120A(a) (20 U.S.C. 6322(a)) is amended by striking 
``section 14501'' and inserting ``section 8501''.

SEC. 115. COORDINATION REQUIREMENTS.

    Section 1120B (20 U.S.C. 6323) is amended--
            (1) in subsection (a), by striking ``to the extent 
        feasible'' and all that follows through the period and 
        inserting ``in coordination with local Head Start agencies, and 
        if feasible, other early childhood development programs.'';
            (2) in subsection (b)--
                    (A) in paragraph (3) by striking ``and'' after the 
                semicolon;
                    (B) in paragraph (4) by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end, the following:
            ``(5) linking the educational services provided in such 
        local educational agency with the services provided in local 
        Head Start agencies.''.

SEC. 115A. LIMITATIONS ON FUNDS.

    Subpart 1 of part A of title I (20 U.S.C. 6311 et seq.) is amended 
by inserting after section 1120B (20 U.S.C. 6321) the following:

``SEC. 1120C. LIMITATIONS ON FUNDS.

    ``(a) In General.--Notwithstanding any other provision of this Act, 
a local educational agency shall use funds received under this subpart 
only to provide instruction to students, and for services directly 
related to instruction, in preschool through grade 12 to assist 
eligible children to improve their academic achievement and to meet 
achievement standards established by the State.
    ``(b) Permissible and Prohibited Activities.--In this subpart, the 
term `academic instruction'--
            ``(1) includes--
                    ``(A) the employment of teachers and other 
                instructional personnel, including providing teachers 
                and instructional personnel with employee benefits;
                    ``(B) the extension of academic instruction beyond 
                the normal school day and year, including summer 
                school;
                    ``(C) the provision of instructional services to 
                pre-kindergarten children to prepare such children for 
                the transition to kindergarten;
                    ``(D) the purchase of instructional resources, such 
                as books, materials, computers, and other instructional 
                equipment and wiring to support instructional 
                equipment;
                    ``(E) the development and administration of 
                curriculum, educational materials, and assessments;
                    ``(F) the implementation of--
                            ``(i) instructional interventions in 
                        schools in need of improvement; and
                            ``(ii) corrective actions to improve 
                        student achievement; and
                    ``(G) the transportation of students to assist them 
                in improving academic achievement, except that not more 
                than 10 percent of the funds made available under this 
                subpart to a local educational agency shall be used to 
                carry out this subparagraph;
            ``(2) but does not include--
                    ``(A) the purchase or provision of janitorial 
                services and utility costs;
                    ``(B) the construction or operation of facilities;
                    ``(C) the acquisition of real property;
                    ``(D) costs for food and refreshments; or
                    ``(E) the purchase or lease of vehicles.''.

SEC. 116. GRANTS FOR THE OUTLYING AREAS AND THE SECRETARY OF THE 
              INTERIOR.

    Section 1121 (20 U.S.C. 6331) is amended to read as follows:

                        ``Subpart 2--Allocations

``SEC. 1121. GRANTS FOR THE OUTLYING AREAS AND THE SECRETARY OF THE 
              INTERIOR.

    ``(a) Reservation of Funds.--From the amount appropriated for 
payments to States for any fiscal year under section 1002(a), the 
Secretary shall reserve a total of 1 percent to provide assistance to--
            ``(1) the outlying areas on the basis of their respective 
        need for such assistance according to such criteria as the 
        Secretary determines will best carry out the purpose of this 
        part; and
            ``(2) the Secretary of the Interior in the amount necessary 
        to make payments pursuant to subsection (c).
    ``(b) Assistance to the Outlying Areas.--
            ``(1) In general.--From amounts made available under 
        subsection (a) in each fiscal year, the Secretary shall make 
        grants to local educational agencies in the outlying areas 
        (other than the outlying areas assisted under paragraph (2)).
            ``(2) Competitive grants.--(A) For each fiscal year through 
        2006, the Secretary shall reserve $5,000,000 from the amounts 
        made available under subsection (a) to award grants on a 
        competitive basis, to local educational agencies in the 
        Federated States of Micronesia, the Republic of the Marshall 
        Islands, and the Republic of Palau. The Secretary shall award 
        such grants according to the recommendations of the Pacific 
        Region Educational Laboratory which shall conduct a competition 
        for such grants.
            ``(B) Except as provided in subparagraph (D), grant funds 
        awarded under this part only may be used for programs described 
        in this Act, including teacher training, curriculum 
        development, instructional materials, or general school 
        improvement and reform.
            ``(C) Grant funds awarded under this paragraph only may be 
        used to provide direct educational services.
            ``(D) The Secretary may provide 5 percent of the amount 
        made available for grants under this paragraph to pay the 
        administrative costs of the Pacific Region Educational 
        Laboratory regarding activities assisted under this paragraph.
    ``(c) Allotment to the Secretary of the Interior.--
            ``(1) In general.--The amount allotted for payments to the 
        Secretary of the Interior under subsection (a)(2) for any 
        fiscal year shall be, as determined pursuant to criteria 
        established by the Secretary, the amount necessary to meet the 
        special educational needs of--
                    ``(A) Indian children on reservations served by 
                elementary schools and secondary schools for Indian 
                children operated or supported by the Department of the 
                Interior; and
                    ``(B) out-of-State Indian children in elementary 
                schools and secondary schools in local educational 
                agencies under special contracts with the Department of 
                the Interior.
            ``(2) Payments.--From the amount allotted for payments to 
        the Secretary of the Interior under subsection (a)(2), the 
        Secretary of the Interior shall make payments to local 
        educational agencies, upon such terms as the Secretary 
        determines will best carry out the purposes of this part, with 
        respect to out-of-State Indian children described in paragraph 
        (1). The amount of such payment may not exceed, for each such 
        child, the greater of--
                    ``(A) 40 percent of the average per pupil 
                expenditure in the State in which the agency is 
                located; or
                    ``(B) 48 percent of such expenditure in the United 
                States.

``SEC. 1122. AMOUNTS FOR BASIC GRANTS, CONCENTRATION GRANTS, AND 
              TARGETED GRANTS.

    ``(a) In General.--For fiscal years 2002 through 2006, an amount of 
the appropriations for this part equal to the appropriation for fiscal 
year 2001, for section 1124 shall be allocated in accordance with 
section 1124, and an amount equal to the appropriation for fiscal year 
2001 for section 1124A shall be allocated in accordance with section 
1124A. Any additional appropriations under section 1002(a) for any 
fiscal year, after application of the preceding sentence, shall be 
allocated in accordance with section 1125.
    ``(b) Adjustments Where Necessitated by Appropriations.--
            ``(1) In general.--If the sums available under this part 
        for any fiscal year are insufficient to pay the full amounts 
        that all local educational agencies in States are eligible to 
        receive under sections 1124, 1124A, and 1125 for such year, the 
        Secretary shall ratably reduce the allocations to such local 
        educational agencies, subject to subsections (c) and (d) of 
        this section.
            ``(2) Additional funds.--If additional funds become 
        available for making payments under sections 1124, 1124A, and 
        1125 for such fiscal year, allocations that were reduced under 
        paragraph (1) shall be increased on the same basis as they were 
        reduced.
    ``(c) Hold-Harmless Amounts.--
            ``(1) In general.--For each fiscal year, except as provided 
        in paragraph (2) and subsection (d), the amount made available 
        to each local educational agency under each of sections 1124 
        and 1125 shall be not less than 95 percent of the previous 
        year's amount if the number of children counted for grants 
        under section 1124 is at least 30 percent of the total number 
        of children aged 5 to 17 years, inclusive, in the local 
        educational agency, 90 percent of the previous year amount if 
        this percentage is between 15 percent and 30 percent, and 85 
        percent if this percentage is below 15 percent.
            ``(2) Sufficient funds.--If sufficient funds are 
        appropriated, the hold-homeless amounts described in paragraph 
        (1) shall be paid to all local educational agencies which 
        received grants under section 1124, 1124A, or 1125 for the 
        preceding fiscal year, regardless of whether the local 
        educational agency meets the minimum eligibility criteria 
        provided in section 1124(b), 1124A(a)(1)(A), or 1125(a), 
        respectively, except that a local educational agency which does 
        not meet such minimum eligibility criteria for 5 consecutive 
        years shall no longer be eligible to receive a hold-harmless 
        amount.
            ``(3) Calculation.--In any fiscal year for which the 
        Secretary calculates grants on the basis of population data for 
        counties, the Secretary shall apply the hold-harmless 
        percentages in paragraph (1) to counties, and, if the 
        Secretary's allocation for a county is not sufficient to meet 
        the hold-harmless requirements of this subsection for every 
        local educational agency within that county, then the State 
        educational agency shall reallocate funds proportionately from 
        all other local educational agencies in the State that are 
        receiving funds in excess of the hold-harmless amounts 
        specified in this subsection.
    ``(d) Ratable Reductions.--
            ``(1) In general.--If the sums made available under this 
        part for any fiscal year are insufficient to pay the full 
        amounts that all States are eligible to receive under 
        subsection (c) for such year, the Secretary shall ratably 
        reduce such amounts for such year.
            ``(2) Additional funds.--If additional funds become 
        available for making payments under subsection (c) for such 
        fiscal year, amounts that were reduced under paragraph (1) 
        shall be increased on the same basis as such amounts reduced.
    ``(e) Definition.--For the purpose of this section and sections 
1124, 1124A, and 1125, the term `State' means each of the 50 States, 
the District of Columbia, and the Commonwealth of Puerto Rico.

``SEC. 1124. BASIC GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    ``(a) Amount of Grants.--
            ``(1) Grants for local educational agencies and puerto 
        rico.--Except as provided in paragraph (4) and in section 1126, 
        the grant that a local educational agency is eligible to 
        receive under this section for a fiscal year is the amount 
        determined by multiplying--
                    ``(A) the number of children counted under 
                subsection (c); and
                    ``(B) 40 percent of the average per-pupil 
                expenditure in the State, except that the amount 
                determined under this subparagraph shall not be less 
                than 32 percent, and not more than 48 percent, of the 
                average per-pupil expenditure in the United States.
            ``(2) Calculation of grants.--
                    ``(A) Allocations to local educational agencies.--
                The Secretary shall calculate grants under this section 
                on the basis of the number of children counted under 
                subsection (c) for local educational agencies, unless 
                the Secretary and the Secretary of Commerce determine 
                that some or all of those data are unreliable or that 
                their use would be otherwise inappropriate, in which 
                case--
                            ``(i) the 2 Secretaries shall publicly 
                        disclose the reasons for their determination in 
                        detail; and
                            ``(ii) paragraph (3) shall apply.
                    ``(B) Allocations to large and small local 
                educational agencies.--(i) For any fiscal year to which 
                this paragraph applies, the Secretary shall calculate 
                grants under this section for each local educational 
                agency.
                    ``(ii) The amount of a grant under this section for 
                each large local educational agency shall be the amount 
                determined under clause (i).
                    ``(iii) For small local educational agencies, the 
                State educational agency may either--
                            ``(I) distribute grants under this section 
                        in amounts determined by the Secretary under 
                        clause (i); or
                            ``(II) use an alternative method, developed 
                        in accordance with clause (iv), approved by the 
                        Secretary to distribute the portion of the 
                        State's total grants under this section that is 
                        based on those small agencies.
                    ``(iv) An alternative method under clause (iii)(II) 
                shall be based on population data that the State 
                educational agency determines best reflect the current 
                distribution of children in poor families among the 
                State's small local educational agencies that meet the 
                eligibility criteria of subsection (b).
                    ``(v) If a small local educational agency is 
                dissatisfied with the determination of its grant by the 
                State educational agency under clause (iii)(II), it may 
                appeal that determination to the Secretary, who shall 
                respond within 45 days of receiving it.
                    ``(vi) As used in this subparagraph--
                            ``(I) the term `large local educational 
                        agency' means a local educational agency 
                        serving an area with a total population of 
                        20,000 or more; and
                            ``(II) the term `small local educational 
                        agency' means a local educational agency 
                        serving an area with a total population of less 
                        than 20,000.
            ``(3) Allocations to counties.--(A) For any fiscal year to 
        which this paragraph applies, the Secretary shall calculate 
        grants under this section on the basis of the number of 
        children counted under section 1124(c) for counties, and State 
        educational agencies shall suballocate county amounts to local 
        educational agencies, in accordance with regulations 
        promulgated by the Secretary.
            ``(B) In any State in which a large number of local 
        educational agencies overlap county boundaries, or for which 
        the State believes it has data that would better target funds 
        than allocating them by county, the State educational agency 
        may apply to the Secretary for authority to make the 
        allocations under this part for a particular fiscal year 
        directly to local educational agencies without regard to 
        counties.
            ``(C) If the Secretary approves a State's application under 
        subparagraph (B), the State educational agency shall provide 
        the Secretary an assurance that those allocations are made--
                    ``(i) using precisely the same factors for 
                determining a grant as are used under this part; or
                    ``(ii) using data that the State educational agency 
                submits to the Secretary for approval that more 
                accurately target poverty.
            ``(D) The State educational agency shall provide the 
        Secretary an assurance that a procedure is (or will be) 
        established through which local educational agencies that are 
        dissatisfied with its determinations under subparagraph (B) may 
        appeal directly to the Secretary for a final determination.
            ``(4) Puerto rico.--For each fiscal year, the Secretary 
        shall determine the percentage which the average per pupil 
        expenditure in the Commonwealth of Puerto Rico is of the lowest 
        average per pupil expenditure of any of the 50 States. The 
        grant which the Commonwealth of Puerto Rico shall be eligible 
        to receive under this section for a fiscal year shall be the 
        amount arrived at by multiplying the number of children counted 
        under subsection (c) for the Commonwealth of Puerto Rico by the 
        product of--
                    ``(A) the percentage determined under the preceding 
                sentence; and
                    ``(B) 32 percent of the average per pupil 
                expenditure in the United States.
            ``(5) Definition.--For purposes of this subsection, the 
        term `State' does not include Guam, American Samoa, the Virgin 
        Islands, the Northern Mariana Islands, or Palau.
    ``(b) Minimum Number of Children To Qualify.--A local educational 
agency is eligible for a basic grant under this section for any fiscal 
year only if the number of children counted under subsection (c) for 
that agency is--
            ``(1) 10 or more; and
            ``(2) more than 2 percent of the total school-age 
        population in the agency's jurisdiction.
    ``(c) Children To Be Counted.--
            ``(1) Categories of children.--The number of children to be 
        counted for purposes of this section is the aggregate of--
                    ``(A) the number of children aged 5 to 17, 
                inclusive, in the school district of the local 
                educational agency from families below the poverty 
                level as determined under paragraph (2);
                    ``(B) the number of children aged 5 to 17, 
                inclusive, in the school district of such agency from 
                families above the poverty level as determined under 
                paragraph (5); and
                    ``(C) the number of children (determined under 
                paragraph (4) for either the preceding year as 
                described in that paragraph, or for the second 
                preceding year, as the Secretary finds appropriate) 
                aged 5 to 17, inclusive, in the school district of such 
                agency in institutions for neglected and delinquent 
                children (other than such institutions operated by the 
                United States), but not counted pursuant to subpart 1 
                of part D for the purposes of a grant to a State 
                agency, or being supported in foster homes with public 
                funds.
            ``(2) Determination of number of children.--For the 
        purposes of this section, the Secretary shall determine the 
        number of children aged 5 to 17, inclusive, from families below 
        the poverty level on the basis of the most recent satisfactory 
        data, described in paragraph (3), available from the Department 
        of Commerce. The District of Columbia and the Commonwealth of 
        Puerto Rico shall be treated as individual local educational 
        agencies. If a local educational agency contains 2 or more 
        counties in their entirety, then each county will be treated as 
        if such county were a separate local educational agency for 
        purposes of calculating grants under this part. The total of 
        grants for such counties shall be allocated to such a local 
        educational agency, which local educational agency shall 
        distribute to schools in each county within such agency a share 
        of the local educational agency's total grant that is no less 
        than the county's share of the population counts used to 
        calculate the local educational agency's grant.
            ``(3) Population updates.--In fiscal year 2002 and every 2 
        years thereafter, the Secretary shall use updated data on the 
        number of children, aged 5 to 17, inclusive, from families 
        below the poverty level for counties or local educational 
        agencies, published by the Department of Commerce, unless the 
        Secretary and the Secretary of Commerce determine that use of 
        the updated population data would be inappropriate or 
        unreliable. If the Secretary and the Secretary of Commerce 
        determine that some or all of the data referred to in this 
        paragraph are inappropriate or unreliable, they shall publicly 
        disclose their reasons. In determining the families which are 
        below the poverty level, the Secretary shall utilize the 
        criteria of poverty used by the Bureau of the Census in 
        compiling the most recent decennial census, in such form as 
        those criteria have been updated by increases in the Consumer 
        Price Index for all urban consumers, published by the Bureau of 
        Labor Statistics.
            ``(4) Other children to be counted.--For purposes of this 
        section, the Secretary shall determine the number of children 
        aged 5 to 17, inclusive, from families above the poverty level 
        on the basis of the number of such children from families 
        receiving an annual income, in excess of the current criteria 
        of poverty, from payments under a State program funded under 
        part A of title IV of the Social Security Act; and in making 
        such determinations the Secretary shall utilize the criteria of 
        poverty used by the Bureau of the Census in compiling the most 
        recent decennial census for a family of 4 in such form as those 
        criteria have been updated by increases in the Consumer Price 
        Index for all urban consumers, published by the Bureau of Labor 
        Statistics. The Secretary shall determine the number of 
        children aged 5 through 17 living in institutions for neglected 
        or delinquent children, or being supported in foster homes with 
        public funds, on the basis of the caseload data for the month 
        of October of the preceding fiscal year (using, in the case of 
        children described in the preceding sentence, the criteria of 
        poverty and the form of such criteria required by such sentence 
        which were determined for the calendar year preceding such 
        month of October) or, to the extent that such data are not 
        available to the Secretary before January of the calendar year 
        in which the Secretary's determination is made, then on the 
        basis of the most recent reliable data available to the 
        Secretary at the time of such determination. The Secretary of 
        Health and Human Services shall collect and transmit the 
        information required by this subparagraph to the Secretary not 
        later than January 1 of each year. For the purpose of this 
        section, the Secretary shall consider all children who are in 
        correctional institutions to be living in institutions for 
        delinquent children.
            ``(5) Estimate.--When requested by the Secretary, the 
        Secretary of Commerce shall make a special updated estimate of 
        the number of children of such ages who are from families below 
        the poverty level (as determined under subparagraph (A) of this 
        paragraph) in each school district, and the Secretary is 
        authorized to pay (either in advance or by way of 
        reimbursement) the Secretary of Commerce the cost of making 
        this special estimate. The Secretary of Commerce shall give 
        consideration to any request of the chief executive of a State 
        for the collection of additional census information. For 
        purposes of this section, the Secretary shall consider all 
        children who are in correctional institutions to be living in 
        institutions for delinquent children.
    ``(d) State Minimum.--Notwithstanding section 1122, the aggregate 
amount allotted for all local educational agencies within a State may 
not be less than the lesser of--
            ``(1) 0.25 percent of total grants under this section; or
            ``(2) the average of--
                    ``(A) one-quarter of 1 percent of the total amount 
                available for such fiscal year under this section; and
                    ``(B) the number of children in such State counted 
                under subsection (c) in the fiscal year multiplied by 
                150 percent of the national average per pupil payment 
                made with funds available under this section for that 
                year.

``SEC. 1124A. CONCENTRATION GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    ``(a) Eligibility for and Amount of Grants.--
            ``(1) In general.--(A) Except as otherwise provided in this 
        paragraph, each local educational agency, in a State other than 
        Guam, American Samoa, the Virgin Islands, the Commonwealth of 
        the Northern Mariana Islands, and Palau, which is eligible for 
        a grant under section 1124 for any fiscal year is eligible for 
        an additional grant under this section for that fiscal year if 
        the number of children counted under section 1124(c) in the 
        agency exceeds either--
                    ``(i) 6,500; or
                    ``(ii) 15 percent of the total number of children 
                aged 5 through 17 in the agency.
            ``(B) Notwithstanding section 1122, no State described in 
        subparagraph (A) shall receive less than the lesser of--
                    ``(i) 0.25 percent of total grants; or
                    ``(ii) the average of--
                            ``(I) one-quarter of 1 percent of the sums 
                        available to carry out this section for such 
                        fiscal year; and
                            ``(II) the greater of--
                                    ``(aa) $340,000; or
                                    ``(bb) the number of children in 
                                such State counted for purposes of this 
                                section in that fiscal year multiplied 
                                by 150 percent of the national average 
                                per pupil payment made with funds 
                                available under this section for that 
                                year.
            ``(2) Special rule.--For each county or local educational 
        agency eligible to receive an additional grant under this 
        section for any fiscal year the Secretary shall determine the 
        product of--
                    ``(A) the number of children counted under section 
                1124(c) for that fiscal year; and
                    ``(B) the amount in section 1124(a)(1)(B) for all 
                States except Puerto Rico, and the amount in section 
                1124(a)(3) for Puerto Rico.
            ``(3) Amount.--The amount of the additional grant for which 
        an eligible local educational agency or county is eligible 
        under this section for any fiscal year shall be an amount which 
        bears the same ratio to the amount available to carry out this 
        section for that fiscal year as the product determined under 
        paragraph (2) for such local educational agency for that fiscal 
        year bears to the sum of such products for all local 
        educational agencies in the United States for that fiscal year.
            ``(4) Local allocations.--(A) Grant amounts under this 
        section shall be determined in accordance with section 1124(a) 
        (2) and (3).
            ``(B) For any fiscal year for which the Secretary allocates 
        funds under this section on the basis of counties, a State may 
        reserve not more than 2 percent of its allocation under this 
        section for any fiscal year to make grants to local educational 
        agencies that meet the criteria of paragraph (1)(A) (i) or (ii) 
        but that are in ineligible counties.
    ``(b) States Receiving Minimum Grants.--In States that receive the 
minimum grant under subsection (a)(1)(B), the State educational agency 
shall allocate such funds among the local educational agencies in each 
State either--
            ``(1) in accordance with paragraphs (2) and (4) of 
        subsection (a); or
            ``(2) based on their respective concentrations and numbers 
        of children counted under section 1124(c), except that only 
        those local educational agencies with concentrations or numbers 
        of children counted under section 1124(c) that exceed the 
        statewide average percentage of such children or the statewide 
        average number of such children shall receive any funds on the 
        basis of this paragraph.

``SEC. 1125. TARGETED GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    ``(a) Eligibility of Local Educational Agencies.--A local 
educational agency in a State is eligible to receive a targeted grant 
under this section for any fiscal year if the number of children in the 
local educational agency counted under section 1124(c), before 
application of the weighting factor described in subsection (c), is at 
least 10, and if the number of children counted for grants under 
section 1124 is at least 5 percent of the total population aged 5 to 17 
years, inclusive, in the local educational agency. Funds made available 
as a result of applying this subsection shall be reallocated by the 
State educational agency to other eligible local educational agencies 
in the State in proportion to the distribution of other funds under 
this section.
    ``(b) Grants for Local Educational Agencies, the District of 
Columbia, and Puerto Rico.--
            ``(1) In general.--The amount of the grant that a local 
        educational agency in a State or that the District of Columbia 
        is eligible to receive under this section for any fiscal year 
        shall be the product of--
                    ``(A) the weighted child count determined under 
                subsection (c); and
                    ``(B) the amount in section 1124(a)(1).
            ``(2) Puerto rico.--For each fiscal year, the amount of the 
        grant for which the Commonwealth of Puerto Rico is eligible 
        under this section shall be equal to the number of children 
        counted under subsection (c) for Puerto Rico, multiplied by the 
        amount determined in section 1124(a)(3).
    ``(c) Weighted Child Count.--
            ``(1) Weights for allocations to counties.--
                    ``(A) In general.--For each fiscal year for which 
                the Secretary uses county population data to calculate 
                grants, the weighted child count used to determine a 
                county's allocation under this section is the larger of 
                the 2 amounts determined under clause (i) or (ii), as 
                follows:
                            ``(i) By percentage of children.--This 
                        amount is determined by adding--
                                    ``(I) the number of children 
                                determined under section 1124(c) for 
                                that county constituting up to 12.20 
                                percent, inclusive, of the county's 
                                total population aged 5 to 17, 
                                inclusive, multiplied by 1.0;
                                    ``(II) the number of such children 
                                constituting more than 12.20 percent, 
                                but not more than 17.70 percent, of 
                                such population, multiplied by 1.75;
                                    ``(III) the number of such children 
                                constituting more than 17.70 percent, 
                                but not more than 22.80 percent, of 
                                such population, multiplied by 2.5;
                                    ``(IV) the number of such children 
                                constituting more than 22.80 percent, 
                                but not more than 29.70 percent, of 
                                such population, multiplied by 3.25; 
                                and
                                    ``(V) the number of such children 
                                constituting more than 29.70 percent of 
                                such population, multiplied by 4.0.
                            ``(ii) By number of children.--This amount 
                        is determined by adding--
                                    ``(I) the number of children 
                                determined under section 1124(c) 
                                constituting up to 1,917, inclusive, of 
                                the county's total population aged 5 to 
17, inclusive, multiplied by 1.0;
                                    ``(II) the number of such children 
                                between 1,918 and 5,938, inclusive, in 
                                such population, multiplied by 1.5;
                                    ``(III) the number of such children 
                                between 5,939 and 20,199, inclusive, in 
                                such population, multiplied by 2.0;
                                    ``(IV) the number of such children 
                                between 20,200 and 77,999, inclusive, 
                                in such population, multiplied by 2.5; 
                                and
                                    ``(V) the number of such children 
                                in excess of 77,999 in such population, 
                                multiplied by 3.0.
                    ``(B) Puerto rico.--Notwithstanding subparagraph 
                (A), the weighting factor for Puerto Rico under this 
                paragraph shall not be greater than the total number of 
                children counted under section 1124(c) multiplied by 
                1.72.
            (2) Weights for allocations to local educational 
        agencies.--
                    (A) In general.--For each fiscal year for which the 
                Secretary uses local educational agency data, the 
                weighted child count used to determine a local 
                educational agency's grant under this section is the 
                larger of the 2 amounts determined under clauses (i) 
                and (ii), as follows:
                            (i) By percentage of children.--This amount 
                        is determined by adding--
                                    (I) the number of children 
                                determined under section 1124(c) for 
                                that local educational agency 
                                constituting up to 14.265 percent, 
                                inclusive, of the agency's total 
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    (II) the number of such children 
                                constituting more than 14.265 percent, 
                                but not more than 21.553 percent, of 
                                such population, multiplied by 1.75;
                                    (III) the number of such children 
                                constituting more than 21.553 percent, 
                                but not more than 29.223 percent, of 
                                such population, multiplied by 2.5;
                                    (IV) the number of such children 
                                constituting more than 29.223 percent, 
                                but not more than 36.538 percent, of 
                                such population, multiplied by 3.25; 
                                and
                                    (V) the number of such children 
                                constituting more than 36.538 percent 
                                of such population, multiplied by 4.0.
                            (ii) By number of children.--This amount is 
                        determined by adding--
                                    (I) the number of children 
                                determined under section 1124(c) 
                                constituting up to 575, inclusive, of 
                                the agency's total population aged 5 to 
                                17, inclusive, multiplied by 1.0;
                                    (II) the number of such children 
                                between 576 and 1,870, inclusive, in 
                                such population, multiplied by 1.5;
                                    (III) the number of such children 
                                between 1,871 and 6,910, inclusive, in 
                                such population, multiplied by 2.0;
                                    (IV) the number of such children 
                                between 6,911 and 42,000, inclusive, in 
                                such population, multiplied by 2.5; and
                                    (V) the number of such children in 
                                excess of 42,000 in such population, 
                                multiplied by 3.0.
                    (B) Puerto rico.--Notwithstanding subparagraph (A), 
                the weighting factor for Puerto Rico under this 
                paragraph shall not be greater than the total number of 
                children counted under section 1124(c) multiplied by 
                1.72.
    ``(d) Calculation of Grant Amounts.-- Grants under this section 
shall be calculated in accordance with section 1124(a) (2) and (3).
    ``(e) State Minimum.--Notwithstanding any other provision of this 
section or section 1122, from the total amount available for any fiscal 
year to carry out this section, each State shall be allotted at least 
the lesser of--
            ``(1) 0.25 percent of total appropriations; or
            ``(2) the average of--
                    ``(A) one-quarter of 1 percent of the total amount 
                available to carry out this section; and
                    ``(B) 150 percent of the national average grant 
                under this section per child described in section 
                1124(c), without application of a weighting factor, 
                multiplied by the State's total number of children 
                described in section 1124(c), without application of a 
                weighting factor.

``SEC. 1125A. EDUCATION FINANCE INCENTIVE PROGRAM.

    ``(a) Grants.--The Secretary is authorized to make grants to States 
from the sums appropriated pursuant to subsection (e) to carry out the 
purposes of this part.
    ``(b) Distribution Based Upon Fiscal Effort and Equity.--
            ``(1) In general.--Funds appropriated pursuant to 
        subsection (e) shall be allotted to each State based upon the 
        number of children aged 5 to 17, inclusive, of such State 
        multiplied by the product of--
                    ``(A) such State's effort factor described in 
                paragraph (2); multiplied by
                    ``(B) 1.30 minus such State's equity factor 
                described in paragraph (3), except that for each fiscal 
                year no State shall receive less than \1/4\ of 1 
                percent of the total amount appropriated pursuant to 
                subsection (e) for such fiscal year.
            ``(2) Effort factor.--(A) Except as provided in 
        subparagraph (B), the effort factor for a State shall be 
        determined in accordance with the succeeding sentence, except 
        that such factor shall not be less than .95 nor greater than 
        1.05. The effort factor determined under this sentence shall be 
        a fraction the numerator of which is the product of the 3-year 
average per-pupil expenditure in the State multiplied by the 3-year 
average per capita income in the United States and the denominator of 
which is the product of the 3-year average per capita income in such 
State multiplied by the 3-year average per-pupil expenditure in the 
United States.
            ``(B) The effort factor for the Commonwealth of Puerto Rico 
        shall be equal to the lowest effort factor calculated under 
        subparagraph (A) for any State.
            ``(3) Equity factor.--(A)(i) Except as provided in 
        subparagraph (B), the Secretary shall determine the equity 
        factor under this section for each State in accordance with 
        clause (ii).
            ``(ii)(I) For each State, the Secretary shall compute a 
        weighted coefficient of variation for the per-pupil 
        expenditures of local educational agencies in accordance with 
        subclauses (II), (III), (IV), and (V).
            ``(II) In computing coefficients of variation, the 
        Secretary shall weigh the variation between per-pupil 
        expenditures in each local educational agency and the average 
        per-pupil expenditures in the State according to the number of 
        pupils in the local educational agency.
            ``(III) In determining the number of pupils under this 
        paragraph in each local educational agency and each State, the 
        Secretary shall multiply the number of children from low-income 
        families by 1.4 under this paragraph.
            ``(IV) In computing coefficients of variation, the 
        Secretary shall include only those local educational agencies 
        with an enrollment of more than 200 students.
            ``(V) The Secretary shall compute separate coefficients of 
        variation for elementary, secondary, and unified local 
        educational agencies and shall combine such coefficients into a 
        single weighted average coefficient for the State by 
        multiplying each coefficient by the total enrollments of the 
        local educational agencies in each group, adding such products, 
        and dividing such sum by the total enrollments of the local 
        educational agencies in the State.
            ``(B) The equity factor for a State that meets the 
        disparity standard described in section 222.63 of title 34, 
        Code of Federal Regulations (as such section was in effect on 
        the day preceding the date of enactment of this Act) or a State 
        with only 1 local educational agency shall be not greater than 
        0.10.
            ``(C) The Secretary may revise each State's equity factor 
        as necessary based on the advice of independent education 
        finance scholars to reflect other need-based costs of local 
        educational agencies in addition to low-income student 
        enrollment, such as differing geographic costs, costs 
        associated with students with disabilities, children with 
        limited English proficiency or other meaningful educational 
        needs, which deserve additional support. In addition and also 
        with the advice of independent education finance scholars, the 
        Secretary may revise each State's equity factor to incorporate 
        other valid and accepted methods to achieve adequacy of 
        educational opportunity that may not be reflected in a 
        coefficient of variation method.
    ``(c) Use of Funds.--All funds awarded to each State under this 
section shall be allocated to local educational agencies and schools on 
a basis consistent with the distribution of other funds to such 
agencies and schools under sections 1124, 1124A, and 1125 to carry out 
activities under this part.
    ``(d) Maintenance of Effort.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        State is entitled to receive its full allotment of funds under 
        this part for any fiscal year if the Secretary finds that 
        either the combined fiscal effort per student or the aggregate 
        expenditures within the State with respect to the provision of 
        free public education for the fiscal year preceding the fiscal 
        year for which the determination is made was not less than 90 
        percent of such combined fiscal effort or aggregate 
        expenditures for the second fiscal year preceding the fiscal 
        year for which the determination is made.
            ``(2) Reduction of funds.--The Secretary shall reduce the 
        amount of the funds awarded to any State under this section in 
        any fiscal year in the exact proportion to which the State 
        fails to meet the requirements of paragraph (1) by falling 
        below 90 percent of both the fiscal effort per student and 
        aggregate expenditures (using the measure most favorable to the 
        State), and no such lesser amount shall be used for computing 
        the effort required under paragraph (1) for subsequent years.
            ``(3) Waivers.--The Secretary may waive, for 1 fiscal year 
        only, the requirements of this subsection if the Secretary 
        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.
    ``(e) Authorization of Appropriations.--For the purpose of making 
grants under this section, there are authorized to be appropriated 
$200,000,000 for fiscal year 2002 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.

``SEC. 1126. SPECIAL ALLOCATION PROCEDURES.

    ``(a) Allocations for Neglected Children.--
            ``(1) In general.--If a State educational agency determines 
        that a local educational agency in the State is unable or 
        unwilling to provide for the special educational needs of 
        children who are living in institutions for neglected or 
        delinquent children as described in section 1124(c)(1)(B), the 
        State educational agency shall, if such agency assumes 
        responsibility for the special educational needs of such 
        children, receive the portion of such local educational 
        agency's allocation under sections 1124, 1124A, and 1125 that 
        is attributable to such children.
            ``(2) Special rule.--If the State educational agency does 
        not assume such responsibility, any other State or local public 
        agency that does assume such responsibility shall receive that 
        portion of the local educational agency's allocation.
    ``(b) Allocations Among Local Educational Agencies.--The State 
educational agency may allocate the amounts of grants under sections 
1124, 1124A, and 1125 among the affected local educational agencies--
            ``(1) if 2 or more local educational agencies serve, in 
        whole or in part, the same geographical area;
            ``(2) if a local educational agency provides free public 
        education for children who reside in the school district of 
        another local educational agency; or
            ``(3) to reflect the merger, creation, or change of 
        boundaries of 1 or more local educational agencies.
    ``(c) Reallocation.--If a State educational agency determines that 
the amount of a grant that a local educational agency would receive 
under sections 1124, 1124A, and 1125 is more than such local agency 
will use, the State educational agency shall make the excess amount 
available to other local educational agencies in the State that need 
additional funds in accordance with criteria established by the State 
educational agency.''.

SEC. 122. PARTICIPATION OF CHILDREN ENROLLED IN PRIVATE SCHOOLS.

    (a) General Requirement.--Subsection (a) of section 1120 (20 U.S.C. 
6321(a)) is amended to read as follows:
    ``(a) General Requirement.--
            ``(1) In general.--To the extent consistent with the number 
        of eligible children identified under section 1115(b) in a 
        local educational agency who are enrolled in private elementary 
        and secondary schools, a local educational agency shall, after 
        timely and meaningful consultation with appropriate private 
        school officials, provide such children, on an equitable basis, 
        special educational services or other benefits under this part 
        (such as dual enrollment, educational radio and television, 
        computer equipment and materials, other technology, and mobile 
        educational services and equipment) that address their needs, 
        and shall ensure that teachers and families of these students 
        participate, on an equitable basis, in services and activities 
        developed pursuant to sections 1118 and 1119A.
            ``(2) Secular, neutral, nonideological.--Such educational 
        services or other benefits, including materials and equipment, 
        shall be secular, neutral, and nonideological.
            ``(3) Equity.--Educational services and other benefits for 
        such private school children shall be equitable in comparison 
        to services and other benefits for public school children 
        participating under this part, and shall be provided in a 
        timely manner.
            ``(4) Expenditures.--Expenditures for educational services 
        and other benefits to eligible private school children shall be 
        equal to the proportion of funds allocated to participating 
        school attendance areas based on the number of children from 
        low-income families who attend private schools, which the local 
        educational agency may determine each year or every 2 years.
            ``(5) Provision of services.--The local educational agency 
        shall provide services under this section directly or through 
        contracts with public and private agencies, organizations, and 
        institutions.''.
    (b) Consultation.--Subsection (b) of section 1120 (20 U.S.C. 
6321(b)) is amended to read as follows:
    ``(b) Consultation.--
            ``(1) In general.--To ensure timely and meaningful 
        consultation, a local educational agency shall consult with 
        appropriate private school officials during the design and 
        development of such agency's programs under this part, on 
        issues such as--
                    ``(A) how the children's needs will be identified;
                    ``(B) what services will be offered;
                    ``(C) how, where, and by whom the services will be 
                provided;
                    ``(D) how the services will be assessed and how the 
                results of that assessment will be used to improve 
                those services;
                    ``(E) the size and scope of the equitable services 
                to be provided to the eligible private school children, 
                and the amount of funds generated by low-income private 
                school children in each participating attendance area;
                    ``(F) the method or sources of data that are used 
                under subsection (a)(4) and section 1113(c)(2) to 
                determine the number of children from low-income 
                families in participating school attendance areas who 
                attend private schools; and
                    ``(G) how and when the agency will make decisions 
                about the delivery of services to such children, 
                including a thorough consideration and analysis of the 
                views of the private school officials on the provision 
                of contract services through potential third party 
                providers. If the local educational agency disagrees 
                with the views of the private school officials on the 
                provision of services, through a contract, the local 
                educational agency shall provide in writing to such 
                private school officials, an analysis of the reasons 
                why the local educational agency has chosen not to use 
                a contractor.
            ``(2) Timing.--Such consultation shall include meetings of 
        agency and private school officials and shall occur before the 
        local educational agency makes any decision that affects the 
        opportunities of eligible private school children to 
        participate in programs under this part. Such meetings shall 
        continue throughout implementation and assessment of services 
        provided under this section.
            ``(3) Discussion.--Such consultation shall include a 
        discussion of service delivery mechanisms a local educational 
        agency can use to provide equitable services to eligible 
        private school children.
            ``(4) Documentation.--Each local educational agency shall 
        provide to the State educational agency, and maintain in its 
        records, a written affirmation signed by officials of each 
        participating private school that the consultation required by 
        this section has occurred.
            ``(5) Compliance.--Private school officials shall have the 
        right to appeal to the State as to whether the consultation 
        provided for in this section was meaningful and timely, and 
        that due consideration was given to the views of private school 
        officials. If the private school wishes to appeal, the basis of 
        the claim of noncompliance with this section by the local 
        educational agencies shall be provided to the State, and the 
        local educational agency shall forward the documentation 
        provided in subsection (b)(3) to the State.''.
    (c) Standards for Bypass.--Subsection (d) of section 1120 (20 
U.S.C. 6321(d)) is amended to read as follows:
    ``(d) Standards for a Bypass.--If a local educational agency is 
prohibited by law from providing for the participation on an equitable 
basis of eligible children enrolled in private elementary and secondary 
schools or if the Secretary determines that a local educational agency 
has substantially failed or is unwilling to provide for such 
participation, as required by this section, the Secretary shall--
            ``(1) waive the requirements of this section for such local 
        educational agency;
            ``(2) arrange for the provision of services to such 
        children through arrangements that shall be subject to the 
        requirements of this section and sections 14505 and 14506; and
            ``(3) in making the determination, consider one or more 
        factors, including the quality, size, scope, and location of 
        the program and the opportunity of eligible children to 
        participate.''.
    (d) Capital Expenses.--Effective September 30, 2002, subsection (e) 
of section 1120 (20 U.S.C. 6321(e)) is hereby repealed.

              PART B--EVEN START FAMILY LITERACY PROGRAMS

SEC. 131. PROGRAM AUTHORIZED.

    Section 1202(c) (20 U.S.C. 6362(c)) is amended--
            (1) in paragraph (1), by striking ``subsection and for 
        which'' and all that follows through ``, whichever is less, to 
        award grants,'' and inserting ``subsection, from funds reserved 
        under section 7004(c), the Secretary shall award grants,'';
            (2) by striking paragraph (2)(C); and
            (3) in paragraph (3)--
                    (A) by striking ``is defined'' and inserting ``was 
                defined''; and
                    (B) by inserting ``as such section was in effect on 
                the day preceding the date of enactment of the Public 
                Education Reinvestment, Reinvention, and Responsibility 
                Act'' after ``2252''.

SEC. 132. APPLICATIONS.

    Section 1207(c)(1)(F) (20 U.S.C. 6367(c)(1)(F)) is amended by 
striking ``14306'' and inserting ``8305''.

SEC. 133. RESEARCH.

    Section 1211(c) (20 U.S.C. 6396b(c)) is amended to read as follows:
    ``(c) Dissemination.--The Secretary shall disseminate, or designate 
another entity to disseminate, the results of the research described in 
subsection (a) to States and recipients of subgrants under this 
part.''.

                PART C--EDUCATION OF MIGRATORY CHILDREN

SEC. 141. STATE ALLOCATIONS.

    Section 1303 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6393) is amended--
    (1) by amending subsection (a) to read as follows:
    ``(a) State Allocations.--
            ``(1) Fiscal year 2002.--For fiscal year 2002, each State 
        (other than the Commonwealth of Puerto Rico) is entitled to 
        receive under this part an amount equal to--
                    ``(A) the sum of the estimated number of migratory 
                children aged three through 21 who reside in the State 
                full time and the full-time equivalent of the estimated 
                number of migratory children aged three through 21 who 
                reside in the State part time, as determined in 
                accordance with subsection (e); multiplied by
                    ``(B) 40 percent of the average per-pupil 
                expenditure in the State, except that the amount 
                determined under this paragraph shall not be less than 
                32 percent, nor more than 48 percent, of the average 
                expenditure per pupil in the United States.
            ``(2) Subsequent years.--
                    ``(A) Base amount.--
                            ``(i) In general.--Except as provided in 
                        subsection (b) and clause (ii), each State is 
                        entitled to receive under this part, for fiscal 
                        year 2003 and succeeding fiscal years, an 
                        amount equal to--
                                    ``(I) the amount that such State 
                                received under this part for fiscal 
                                year 2001; plus
                                    ``(II) the amount allocated to the 
                                State under subparagraph (B).
                            ``(ii) Nonparticipating states.--In the 
                        case of a State (other than the Commonwealth of 
                        Puerto Rico) that did not receive any funds for 
                        fiscal year 2001 under this part, the State 
                        shall receive, for fiscal year 2002 and 
                        succeeding fiscal years, an amount equal to--
                                    ``(I) the amount that such State 
                                would have received under this part for 
                                fiscal year 2001 if its application 
                                under section 1304 for the year had 
                                been approved; plus
                                    ``(II) the amount allocated to the 
                                State under subparagraph (B).
                    ``(B) Allocation of additional amount.--For fiscal 
                year 2002 and succeeding fiscal years, the amount (if 
                any) by which the funds appropriated to carry out this 
                part for the year exceed such funds for fiscal year 
                2001 shall be allocated to a State (other than the 
                Commonwealth of Puerto Rico) so that the State receives 
                an amount equal to--
                            ``(i) the sum of--
                                    ``(I) the number of identified 
                                eligible migratory children, aged 3 
                                through 21, residing in the State 
                                during the previous year; and
                                    ``(II) the number of identified 
                                eligible migratory children, aged 3 
                                through 21, who received services under 
                                this part in summer or intersession 
                                programs provided by the State during 
                                such year; multiplied by
                            ``(ii) 40 percent of the average per-pupil 
                        expenditure in the State, except that the 
                        amount determined under this clause may not be 
                        less than 32 percent, or more than 48 percent, 
                        of the average expenditure per-pupil in the 
                        United States.'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Allocation to Puerto Rico.--
            ``(1) Fiscal year 2002.--For fiscal year 2002, the grant 
        which the Commonwealth of Puerto Rico shall be eligible to 
        receive under this section shall be the amount determined by 
        multiplying the number of children counted under subsection 
        (a)(1)(A) for the Commonwealth of Puerto Rico by the product 
        of--
                    ``(A) the percentage which the average per pupil 
                expenditure in the Commonwealth of Puerto Rico is of 
                the lowest average per pupil expenditure of any of the 
                50 States; and
                    ``(B) 32 percent of the average per pupil 
                expenditure in the United States.
            ``(2) Subsequent fiscal years.--For each fiscal year after 
        fiscal year 2002, the grant which the Commonwealth of Puerto 
        Rico shall be eligible to receive under this section shall be 
        the amount determined by multiplying the number of children 
        counted under subsection (a)(2)(B)(i)(I) and (a)(2)(B)(i)(II) 
        for the Commonwealth of Puerto Rico during the previous fiscal 
        year, by the product of--
                    ``(A) the percentage which the average per pupil 
                expenditure in the Commonwealth of Puerto Rico is of 
                the lowest average per pupil expenditure of any of the 
                50 States; and
                    ``(B) 32 percent of the average per pupil 
                expenditure in the United States.
            ``(3) Minimum allocation.--
                    ``(A) Fiscal year 2003.--The percentage in 
                paragraph (1)(A) shall not be less than 75.0 percent.
                    ``(B) Subsequent fiscal years.--The percentage in 
                paragraph (2)(A) shall not be less than--
                            ``(i) for fiscal year 2002, 77.5 percent;
                            ``(ii) for fiscal year 2003, 80.0 percent;
                            ``(iii) for fiscal year 2004, 82.5 percent; 
                        and
                            ``(iv) for fiscal year 2005 and succeeding 
                        fiscal years, 85.0 percent.
            ``(4) Special rule.--If the application of paragraph (3) 
        would result in any of the 50 States or the District of 
        Columbia receiving less under this part than it recieved under 
        this part for the preceding fiscal year, the percentage in 
        paragraph (1) or (2), respectively, shall be the greater of the 
        percentage in paragraph (1)(A) or (2)(A) the percentage used 
        for the preceding fiscal year.''; and
            (3) by striking subsections (d) and (e).

SEC. 142. STATE APPLICATIONS; SERVICES.

    (a) Program Information.--Section 1304(b) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6394(b)) is amended--
            (1) in paragraph (1), by striking ``addressed through'' and 
        all that follows through the semicolon at the end and inserting 
        the following:
        ``addressed through--
                    ``(A) the full range of services that are available 
                for migratory children from appropriate local, State, 
                and Federal educational programs;
                    ``(B) joint planning among local, State, and 
                Federal educational programs serving migrant children, 
                including programs under parts A and C of title VII;
                    ``(C) the integration of services available under 
                this part with services provided by those other 
                programs; and
                    ``(D) measurable program goals and outcomes;'';
            (2) in paragraph (5), by striking ``the requirements of 
        paragraph (1); and'' and inserting ``the numbers and needs of 
        migratory children, the requirements of subsection (d), and the 
        availability of funds from other Federal, State, and local 
        programs;'';
            (3) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (4) by adding at the end the following:
            ``(7) a description of how the State will encourage 
        programs and projects assisted under this part to offer family 
        literacy services if the program or project serves a 
        substantial number of migratory children who have parents who 
        do not have a high school diploma or its recognized equivalent 
        or who have low levels of literacy.''.
    (b) Assurances.--Section 1304(c) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6394(c)) is amended--
            (1) in paragraph (1), by striking ``1306(b)(1);'' and 
        inserting ``1306(a);'';
            (2) in paragraph (3)--
                    (A) by striking ``appropriate'';
                    (B) by striking ``out, to the extent feasible,'' 
                and inserting ``out''; and
                    (C) by striking ``1118;'' and inserting ``1118, 
                unless extraordinary circumstances make implementation 
                consistent with such section impractical;''; and
            (3) in paragraph (7), by striking ``section 1303(e)'' and 
        inserting ``paragraphs (1)(A) and (2)(B)(i) of section 
        1303(a)''.

SEC. 143. AUTHORIZED ACTIVITIES.

    Section 1306 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6396) is amended to read as follows:

``SEC. 1306. AUTHORIZED ACTIVITIES.

    ``(a) In General.--
            ``(1) Flexibility.--Each State educational agency, through 
        its local educational agencies, shall have the flexibility to 
        determine the activities to be provided with funds made 
        available under this part, except that such funds shall first 
        be used to meet the identified needs of migratory children that 
        result from their migratory lifestyle, and to permit these 
        children to participate effectively in school.
            ``(2) Unaddressed needs.--Funds provided under this part 
        shall be used to address the needs of migratory children that 
        are not addressed by services available from other Federal or 
        non-Federal programs, except that migratory children who are 
        eligible to receive services under part A of this title may 
        receive those services through funds provided under that part, 
        or through funds under this part that remain after the agency 
        addresses the needs described in paragraph (1).
    ``(b) Construction.--Nothing in this part shall be construed to 
prohibit a local educational agency from serving migratory children 
simultaneously with students with similar educational needs in the same 
educational settings, where appropriate.
    ``(c) Special Rule.--Notwithstanding section 1114, a school that 
receives funds under this part shall continue to address the identified 
needs described in subsection (a)(1).''.

SEC. 144. COORDINATION OF MIGRANT EDUCATION ACTIVITIES.

    (a) Duration.--Section 1308(a)(2) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6398(a)(2)) is amended by striking 
``subpart'' and inserting ``subsection''.
    (b) Student Records.--Section 1308(b) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6398(b)) is amended to read 
as follows:
    ``(b) Establishing Access to Information on Migrant Students.--
            ``(1) The Secretary shall establish a system for 
        electronically exchanging, among the States, health and 
        educational information on all students served under this part. 
        Such information may include--
                    ``(A) immunization records and other health 
                information;
                    ``(B) elementary and secondary academic history 
                (including partial credit), credit accrual, and results 
                from State assessments required under this title;
                    ``(C) other academic information essential to 
                ensuring that migrant children achieve to high 
                standards; and
                    ``(D) eligibility for services under the 
                Individuals with Disabilities Education Act.
            ``(2) The Secretary shall publish, not later than 120 days 
        after enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), a notice in 
        the Federal Register seeking public comment on the proposed 
        data elements that each State receiving funds under this part 
        shall be required to collect for purposes of electronic 
        transfer of migrant student information, the requirements for 
        immediate electronic access to such information, and the 
        educational agencies eligible to access such information.
            ``(3) Such system of electronic access to migrant student 
        information shall be operational no later than 1 year after 
        enactment of this Act.
            ``(4) For the purpose of carrying out this subsection in 
        any fiscal year, the Secretary shall reserve not more than 
        $10,000,000 of the amount appropriated to carry out this part 
        for such year.''.
    (c) Availability of Funds.--Section 1308(c) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6398(c)) is amended by 
striking ``$6,000,000'' and inserting ``$10,000,000''.
    (d) Incentive Grants.--Section 1308(d) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6398(d)) is amended to read 
as follows:
    ``(d) Incentive Grants.--From the amounts made available to carry 
out this section for any fiscal year, the Secretary may reserve not 
more than $3,000,000 to award grants of not more than $250,000 on a 
competitive basis to State educational agencies that propose a 
consortium arrangement with another State or other appropriate entity 
that the Secretary determines, pursuant to criteria that the Secretary 
shall establish, will improve the delivery of services to migratory 
children whose education is interrupted.''.

                 PART D--NEGLECTED OR DELINQUENT YOUTH

SEC. 151. NEGLECTED OR DELINQUENT YOUTH.

    The heading for part D of title I is amended to read as follows:

    ``PART D--PREVENTION AND INTERVENTION PROGRAMS FOR NEGLECTED OR 
                    DELINQUENT CHILDREN AND YOUTH''.

SEC. 152. FINDINGS.

    Section 1401(a) is amended by striking paragraphs (6) through (9) 
and adding the following:
            ``(6) Youth returning from correctional facilities need to 
        be involved in programs that provide them with high level 
        skills and other support to help them stay in school and 
        complete their education.
            ``(7) Pregnant and parenting teenagers are a high at-risk 
        group for dropping out of school and should be targeted by 
        dropout prevention programs.''.

SEC. 153. ALLOCATION OF FUNDS.

    Section 1412(b) is amended to read as follows:
    ``(b) Subgrants to State Agencies in Puerto Rico.--
            ``(1) In general.--For each fiscal year, the amount of the 
        subgrant for which a State agency in the Commonwealth of Puerto 
        Rico shall be eligible to receive under this part shall be the 
        amount determined by multiplying the number of children counted 
        under subparagraph (a)(1)(A) for the Commonwealth of Puerto 
        Rico by the product of--
                    ``(A) the percentage which the average per pupil 
                expenditure in the Commonwealth of Puerto Rico is of 
                the lowest average per pupil expenditure of any of the 
                50 States; and
                    ``(B) 32 percent of the average per pupil 
                expenditure in the United States.
            ``(2) Minimum allocation.--The percentage in paragraph 
        (1)(A) shall not be less than--
                    ``(A) for fiscal year 2002, 75.0 percent;
                    ``(B) for fiscal year 2003, 77.5 percent;
                    ``(C) for fiscal year 2004, 80.0 percent;
                    ``(D) for fiscal year 2005, 82.5 percent; and
                    ``(E) for fiscal year 2006 and succeeding fiscal 
                years, 85.0 percent.
            ``(3) Special rule.--If the application of paragraph (2) 
        would result in any of the 50 States or the District of 
        Columbia receiving less under this part than it received under 
        this part for the preceding fiscal year, the percentage in 
        paragraph (1) shall be the greater of the percentage in 
        paragraph (1)(A) or the percentage used for the preceding 
        fiscal year.''.

SEC. 154. STATE PLAN AND STATE AGENCY APPLICATIONS.

    Section 1414 is amended to read as follows:

``SEC. 1414. STATE PLAN AND STATE AGENCY APPLICATIONS.

    ``(a) State Plan.--
            ``(1) In general.--Each State educational agency that 
        desires to receive a grant under this part shall submit, for 
        approval by the Secretary, a plan for meeting the educational 
        needs of neglected and delinquent youth, for assisting in their 
        transition from institutions to locally operated programs, and 
        which is integrated with other programs under this Act or other 
        Acts, as appropriate, consistent with section 14306.
            ``(2) Contents.--Each such State plan shall--
                    ``(A) describe the program goals, objectives, and 
                performance measures established by the State that will 
                be used to assess the effectiveness of the program in 
                improving academic and vocational and technical skills 
                of children in the program;
                    ``(B) provide that, to the extent feasible, such 
                children will have the same opportunities to learn as 
                such children would have if such children were in the 
                schools of local educational agencies in the State; and
                    ``(C) contain assurances that the State educational 
                agency will--
                            ``(i) ensure that programs assisted under 
                        this part will be carried out in accordance 
                        with the State plan described in this 
                        subsection;
                            ``(ii) carry out the evaluation 
                        requirements of section 1416;
                            ``(iii) ensure that the State agencies 
                        receiving subgrants under this subpart comply 
                        with all applicable statutory and regulatory 
                        requirements; and
                            ``(iv) provide such other information as 
                        the Secretary may reasonably require.
            ``(3) Duration of the plan.--Each such State plan shall--
                    ``(A) remain in effect for the duration of the 
                State's participation under this part; and
                    ``(B) be periodically reviewed and revised by the 
                State, as necessary, to reflect changes in the State's 
                strategies and programs under this part.
    ``(b) Secretarial Approval; Peer Review.--
            ``(1) In general.--The Secretary shall approve each State 
        plan that meets the requirements of this part.
            ``(2) Peer review.--The Secretary may review any State plan 
        with the assistance and advice of individuals with relevant 
        expertise.
    ``(c) State Agency Applications.--Any State agency that desires to 
receive funds to carry out a program under this part shall submit an 
application to the State educational agency that--
            ``(1) describes the procedures to be used, consistent with 
        the State plan under section 1111, to assess the educational 
        needs of the children to be served;
            ``(2) provides assurances that in making services available 
        to youth in adult correctional facilities, priority will be 
        given to such youth who are likely to complete incarceration 
        within a 2-year period;
            ``(3) describes the program, including a budget for the 
        first year of the program, with annual updates to be provided 
        to the State educational agency;
            ``(4) describes how the program will meet the goals and 
        objectives of the State plan under this subpart;
            ``(5) describes how the State agency will consult with 
        experts and provide the necessary training for appropriate 
        staff, to ensure that the planning and operation of 
        institution-wide projects under section 1416 are of high 
        quality;
            ``(6) describes how the agency will carry out the 
        evaluation requirements of section 14701 and how the results of 
        the most recent evaluation are used to plan and improve the 
        program;
            ``(7) includes data showing that the agency has maintained 
        fiscal effort required of a local educational agency, in 
        accordance with section 14501 of this title;
            ``(8) describes how the programs will be coordinated with 
        other appropriate State and Federal programs, such as programs 
        under the Job Training Partnership Act or title I of the 
        Workforce Investment Act of 1998, vocational and technical 
        education programs, State and local dropout prevention 
        programs, and special education programs;
            ``(9) describes how States will encourage correctional 
        facilities receiving funds under this subpart to coordinate 
        with local educational agencies or alternative education 
        programs attended by incarcerated youth prior to their 
        incarceration to ensure that student assessments and 
        appropriate academic records are shared jointly between the 
        correctional facility and the local educational agency or 
        alternative education program;
            ``(10) describes how appropriate professional development 
        will be provided to teachers and other staff;
            ``(11) designates an individual in each affected 
        institution to be responsible for issues relating to the 
        transition of children and youth from the institution to 
        locally operated programs;
            ``(12) describes how the agency will, endeavor to 
        coordinate with businesses for training and mentoring for 
        participating youth;
            ``(13) provides assurances that the agency will assist in 
        locating alternative programs through which students can 
        continue their education if students are not returning to 
        school after leaving the correctional facility;
            ``(14) provides assurances that the agency will work with 
        parents to secure parents' assistance in improving the 
        educational achievement of their children and preventing their 
        children's further involvement in delinquent activities;
            ``(15) provides assurances that the agency works with 
        special education youth in order to meet an existing 
        individualized education program and an assurance that the 
        agency will notify the youth's local school if such youth--
                    ``(A) is identified as in need of special education 
                services while the youth is in the facility; and
                    ``(B) intends to return to the local school;
            ``(16) provides assurances that the agency will work with 
        youth who dropped out of school before entering the facility to 
        encourage the youth to reenter school once the term of the 
        youth has been completed or provide the youth with the skills 
        necessary to gain employment, continue the education of the 
        youth, or achieve a secondary school diploma or the recognized 
        equivalent if the youth does not intend to return to school;
            ``(17) provides assurances that teachers and other 
        qualified staff are also trained to work with children with 
        disabilities and other students with special needs taking into 
        consideration the unique needs of such students;
            ``(18) describes any additional services provided to youth, 
        such as career counseling, distance learning, and assistance in 
        securing student loans and grants; and
            ``(19) provides assurances that the program under this 
        subpart will be coordinated with any programs operated under 
        the Juvenile Justice and Delinquency Prevention Act of 1974 or 
        other comparable programs, if applicable.''.

SEC. 155. USE OF FUNDS.

    Section 1415(a) is amended--
            (1) in paragraph (1)(B), by inserting ``and vocational and 
        technical training'' after ``secondary school completion''; and
            (2) in paragraph (2)(B)--
                    (A) in clause (i), by inserting ``and'' after the 
                semicolon;
                    (B) in clause (ii), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking clause (iii).

SEC. 156. PURPOSE.

    Section 1421 is amended by striking paragraph (3) and inserting the 
following:
            ``(3) operate programs for youth returning from 
        correctional facilities in local schools which may also serve 
        youth at risk of dropping out of school.''.

SEC. 157. TRANSITION SERVICES.

    Section 1418(a) is amended by striking ``10 percent'' and inserting 
``15 percent''.

SEC. 158. PROGRAMS OPERATED BY LOCAL EDUCATIONAL AGENCIES.

    Section 1422 is amended--
            (1) in subsection (a), by striking ``retained'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Special Rule.--A local educational agency which includes a 
correctional facility that operates a school is not required to operate 
a program of support for children returning from such school to a 
school not operated by a correctional agency but served by such local 
educational agency if more than 30 percent of the youth attending the 
school operated by the correctional facility will reside outside the 
boundaries of the local educational agency after leaving such 
facility.''; and
            (3) by adding at the end of section 1422 the following:
    ``(d) Transitional and Academic Services.--Transitional and 
supportive programs operated in local educational agencies under this 
subpart shall be designed primarily to meet the transitional and 
academic needs of students returning to local educational agencies or 
alternative education programs from correctional facilities. Services 
to students at risk of dropping out of school shall not have a negative 
impact on meeting the transitional and academic needs of the students 
returning from correctional facilities.''.

SEC. 159. LOCAL EDUCATIONAL AGENCY APPLICATIONS.

    Section 1423 is amended by striking paragraphs (4) through (9) and 
inserting the following:
            ``(4) a description of the program operated by 
        participating schools for children returning from correctional 
        facilities and the types of services that such schools will 
        provide such youth and other at-risk youth;
            ``(5) a description of the youth returning from 
        correctional facilities and, as appropriate, other at-risk 
        youth expected to be served by the program and how the school 
        will coordinate existing educational programs to meet the 
        unique educational needs of such youth;
            ``(6) as appropriate, a description of how schools will 
        coordinate with existing social, health and other services to 
        meet the needs of students returning from correctional 
        facilities, students at risk of dropping out of school, and 
        other participating students, including prenatal health care 
        and nutrition services related to the health of the parent and 
        child, parenting and child development classes, child care, 
        targeted re-entry and outreach programs, referrals to community 
        resources, and scheduling flexibility;
            ``(7) as appropriate, a description of any partnerships 
        with local businesses to develop training, curriculum-based 
        youth entrepreneurship education and mentoring services for 
        participating students;
            ``(8) as appropriate, a description of how programs will 
        involve parents in efforts to improve the educational 
        achievement of their children, prevent the involvement of their 
        children in delinquent activities, and encourage their children 
        to remain in school and complete their education;
            ``(9) a description of how the program under this subpart 
        will be coordinated with other Federal, State, and local 
        programs, such as programs under the Job Training Partnership 
        Act or title I of the Workforce Investment Act of 1998 and 
        vocational and technical education programs serving this at-
        risk population of youth.''.

SEC. 160. USES OF FUNDS.

    Section 1424 is amended by striking paragraphs (1) through (3) and 
inserting the following:
            ``(1) programs that serve youth returning from correctional 
        facilities to local schools to assist in the transition of such 
        youth to the school environment and help them remain in school 
        in order to complete their education;
            ``(2) providing assistance to other youth at risk of 
        dropping out of school, including pregnant and parenting 
        teenagers;
            ``(3) the coordination of social, health, and other 
        services, including day care, for participating youth if the 
        provision of such services will improve the likelihood that 
        such youth will complete their education;
            ``(4) special programs to meet the unique academic needs of 
        participating youth, including vocational and technical 
        education, special education, career counseling, curriculum-
        based youth entrepreneurship education, and assistance in 
        securing student loans or grants for postsecondary education; 
        and
            ``(5) programs providing mentoring and peer mediation.''.

SEC. 161. PROGRAM REQUIREMENTS.

    Section 1425 is amended--
            (1) in paragraph (1), by striking ``where feasible, ensure 
        educational programs'' and inserting the following: ``to the 
        extent practicable, ensure that educational programs'';
            (2) in paragraph (3), by striking ``where feasible,'' and 
        inserting the following: ``to the extent practicable,'';
            (3) in paragraph (8), by striking ``where feasible,'' and 
        inserting the following: ``to the extent practicable,'';
            (4) in paragraph (9), by inserting ``and technical'' after 
        ``vocational''; and
            (5) by amending paragraph (11) to read as follows:
            ``(11) if appropriate, work with local businesses to 
        develop training, curriculum-based youth entrepreneurship 
        education, and mentoring programs for youth.''.

SEC. 162. PROGRAM EVALUATIONS.

    Section 1431(a) is amended by striking ``sex, and if feasible,'' 
and inserting ``gender,''.

                       PART E--GENERAL PROVISIONS

SEC. 171. GENERAL PROVISIONS.

    Part F of title I is amended to read as follows:

                      ``PART F--GENERAL PROVISIONS

``SEC. 1601. FEDERAL REGULATIONS.

    ``(a) In General.--The Secretary is authorized to issue such 
regulations as are necessary to reasonably ensure that there is 
compliance with this title.
    ``(b) Negotiated Rulemaking Process.--
            ``(1) In general.--Prior to publishing in the Federal 
        Register proposed regulations to carry out this title, the 
        Secretary shall obtain the advice and recommendations of 
        representatives of Federal, State, and local administrators, 
        parents, teachers, paraprofessionals, and members of local 
        boards of education involved with the implementation and 
        operation of programs under this title.
            ``(2) Meetings and electronic exchange.--Such advice and 
        recommendation may be obtained through such mechanisms as 
        regional meetings and electronic exchanges of information.
            ``(3) Proposed regulations.--After obtaining such advice 
        and recommendations, and prior to publishing proposed 
        regulations, the Secretary shall--
                    ``(A) establish a negotiated rulemaking process on 
                a minimum of three key issues, including--
                            ``(i) accountability;
                            ``(ii) implementation of assessments; and
                            ``(iii) use of paraprofessionals;
                    ``(B) select individuals to participate in such 
                process from among individuals or groups which provided 
                advice and recommendations, including representation 
                from all geographic regions of the United States; and
                    ``(C) prepare a draft of proposed regulations that 
                shall be provided to the individuals selected by the 
                Secretary under subparagraph (B) not less than 15 days 
                prior to the first meeting under such process.
            ``(4) Process.--Such process--
                    ``(A) shall be conducted in a timely manner to 
                ensure that final regulations are issued by the 
                Secretary not later than 1 year after the date of the 
                enactment of the Public Education Reinvestment, 
                Reinvention, and Responsibility Act (Three R's); and
                    ``(B) shall not be subject to the Federal Advisory 
                Committee Act but shall otherwise follow the provisions 
                of the Negotiated Rulemaking Act of 1990 (5 U.S.C. 561 
                et seq.).
            ``(5) Emergency situation.--In an emergency situation in 
        which regulations to carry out this title must be issued within 
        a very limited time to assist State and local educational 
        agencies with the operation of a program under this title, the 
        Secretary may issue proposed regulations without following such 
        process but shall, immediately thereafter and prior to issuing 
        final regulations, conduct regional meetings to review such 
        proposed regulations.
    ``(c) Limitation.--Regulations to carry out this part may not 
require local programs to follow a particular instructional model, such 
as the provision of services outside the regular classroom or school 
program.

``SEC. 1602. AGREEMENTS AND RECORDS.

    ``(a) Agreements.--All published proposed regulations shall conform 
to agreements that result from negotiated rulemaking described in 
section 1601 unless the Secretary reopens the negotiated rulemaking 
process or provides a written explanation to the participants involved 
in the process explaining why the Secretary decided to depart from and 
not adhere to such agreements.
    ``(b) Records.--The Secretary shall ensure that an accurate and 
reliable record of agreements reached during the negotiations process 
is maintained.

``SEC. 1603. STATE ADMINISTRATION.

    ``(a) Rulemaking.--
            ``(1) In general.--Each State that receives funds under 
        this title shall--
                    ``(A) ensure that any State rules, regulations, and 
                policies relating to this title conform to the purposes 
                of this title and provide any such proposed rules, 
                regulations, and policies to the committee of 
                practitioners under subsection (b) for their review and 
                comment;
                    ``(B) minimize such rules, regulations, and 
                policies to which their local educational agencies and 
                schools are subject;
                    ``(C) eliminate or modify State and local fiscal 
                accounting requirements in order to facilitate the 
                ability of schools to consolidate funds under 
                schoolwide programs; and
                    (D) identify any such rule, regulation, or policy 
                as a State-imposed requirement.
            ``(2) Support and facilitation.--State rules, regulations, 
        and policies under this title shall support and facilitate 
        local educational agency and school-level systemic reform 
        designed to enable all children to meet the challenging State 
        student performance standards.
    ``(b) Committee of Practitioners.--
            ``(1) In general.--Each State educational agency shall 
        create a State committee of practitioners to advise the State 
        in carrying out its responsibilities under this title.
            ``(2) Membership.--Each such committee shall include--
                    ``(A) as a majority of its members, representatives 
                from local educational agencies;
                    ``(B) administrators, including the administrators 
                of programs described in other parts of this title;
                    ``(C) teachers, including vocational educators;
                    ``(D) parents;
                    ``(E) members of local boards of education;
                    ``(F) representatives of private school children; 
                and
                    ``(G) pupil services personnel.
            ``(3) Duties.--The duties of such committee shall include a 
        review, prior to publication, of any proposed or final State 
        rule or regulation pursuant to this title. In an emergency 
        situation where such rule or regulation must be issued within a 
        very limited time to assist local educational agencies with the 
        operation of the program under this title, the State 
        educational agency may issue a regulation without prior 
        consultation, but shall immediately thereafter convene the 
State committee of practitioners to review the emergency regulation 
prior to issuance in final form.

``SEC. 1604. CONSTRUCTION.

    ``(a) Prohibition of Federal Mandates, Direction, or Control.--
Nothing in this title shall be construed to authorize an officer or 
employee of the Federal Government to mandate, direct, or control a 
State, local educational agency, or school's specific instructional 
content or pupil performance standards and assessments, curriculum, or 
program of instruction as a condition of eligibility to receive funds 
under this title.
    ``(b) Equalized Spending.--Nothing in this title shall be construed 
to mandate equalized spending per pupil for a State, local educational 
agency, or school.
    ``(c) Building Standards.--Nothing in this title shall be construed 
to mandate national school building standards for a State, local 
educational agency, or school.

``SEC. 1605. APPLICABILITY TO HOME SCHOOLS.

    ``Nothing in this Act shall be construed to affect home schools.

``SEC. 1606. GENERAL PROVISION REGARDING NONRECIPIENT NONPUBLIC 
              SCHOOLS.

    ``Nothing in this Act shall be construed to permit, allow, 
encourage, or authorize any Federal control over any aspect of any 
private, religious, or home school, whether or not a home school is 
treated as a private school or home school under State law. This 
section shall not be construed to bar private, religious, or home 
schools from participation in programs or services under this Act.

``SEC. 1607. LOCAL ADMINISTRATIVE COST LIMITATION.

    ``(a) Local Administrative Cost Limitation.--Each local educational 
agency may use not more than 4 percent of funds received under part A 
for administrative expenses.
    ``(b) Regulations.--The Secretary, after consulting with State and 
local officials and other experts in school finance, shall develop and 
issue regulations that define the term administrative cost for purposes 
of this title. Such definition shall be consistent with generally 
accepted accounting principles. The Secretary shall publish final 
regulations on this section not later than 1 year after the date of the 
enactment of the Public Education Reinvestment, Reinvention, and 
Responsibility Act (Three R's).

``SEC. 1608. PROHIBITION ON MANDATORY NATIONAL CERTIFICATION OF 
              TEACHERS AND PARAPROFESSIONALS.

    ``(a) Prohibition on Mandatory Testing or Certification.--
Notwithstanding any other provision of law, the Secretary is prohibited 
from using Federal funds to plan, develop, implement, or administer any 
mandatory national teacher or paraprofessional test or certification.
    ``(b) Prohibition on Withholding Funds.--The Secretary is 
prohibited from withholding funds from any State or local educational 
agency if such State or local educational agency fails to adopt a 
specific method of teacher or paraprofessional certification.

``SEC. 1609. GAO STUDIES.

    ``The General Accounting Office shall conduct a study of 
paraprofessionals under part A of title I.

``SEC. 1610. DEFINITIONS.

    ``For purposes of this title--
            ``(1) The term `Secretary' means the Secretary of 
        Education.
            ``(2) The term `scientifically-based research'--
                    ``(A) means the application of rigorous, 
                systematic, and objective procedures; and
                    ``(B) shall include research that--
                            ``(i) employs systematic, empirical methods 
                        that draw on observation or experiment;
                            ``(ii) involves rigorous data analyses that 
                        are adequate to test the stated hypotheses and 
                        justify the general conclusions drawn;
                            ``(iii) relies on measurements or 
                        observational methods that provide valid data 
                        across evaluators and observers and across 
                        multiple measurements and observations; and
                            ``(iv) has been accepted by a peer-reviewed 
                        journal or approved by a panel of independent 
                        experts through a comparably rigorous, 
                        objective, and scientific review.

  PART F--FEDERAL EVALUATIONS, DEMONSTRATIONS, AND TRANSITION PROJECTS

SEC. 181. EVALUATIONS.

    Section 1501 (20 U.S.C. 6491) is amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``January 1, 1996'' and inserting 
                ``January 1, 2003''; and
                    (B) by striking ``January 1, 1999'' and inserting 
                ``January 1, 2006'';
            (2) in subsection (b)(1), by striking ``December 31, 1997'' 
        and inserting ``December 31, 2004''; and
            (3) in subsection (e)(2), by striking ``December 31, 1996'' 
        and inserting ``December 31, 2003''.

SEC. 182. DEMONSTRATIONS OF INNOVATIVE PRACTICES.

    Section 1502 (20 U.S.C. 6492) is amended to read as follows:

``SEC. 1502. COMPREHENSIVE SCHOOL REFORM.

    ``(a) Findings and Purpose.--
            ``(1) Findings.--Congress finds the following:
                    ``(A) A number of schools across the country have 
                shown impressive gains in student performance through 
                the use of comprehensive models for schoolwide change 
                that incorporate virtually all aspects of school 
                operations.
                    ``(B) No single comprehensive school reform model 
                may be suitable for every school, however, schools 
                should be encouraged to examine successful, externally 
                developed comprehensive school reform approaches as 
                they undertake comprehensive school reform.
                    ``(C) Comprehensive school reform is an important 
                means by which children are assisted in meeting 
                challenging State student performance standards.
            ``(2) Purpose.--The purpose of this section is to provide 
        financial incentives for schools to develop comprehensive 
        school reforms, based upon scientifically based research and 
        effective practices that include an emphasis on basic academics 
        and parental involvement so that all children can meet 
        challenging State content and performance standards.
    ``(b) Program Authorized.--
            ``(1) In general.--The Secretary is authorized to provide 
        grants to State educational agencies to provide subgrants to 
        local educational agencies to carry out the purpose described 
        in subsection (a)(2).
            ``(2) Allocation.--
                    ``(A) Reservation.--Of the amount appropriated 
                under this section, the Secretary may reserve--
                            ``(i) not more than 1 percent for schools 
                        supported by the Bureau of Indian Affairs and 
                        in the United States Virgin Islands, Guam, 
                        American Samoa, and the Commonwealth of the 
                        Northern Mariana Islands; and
                            ``(ii) not more than 1 percent to conduct 
                        national evaluation activities described under 
                        subsection (e).
                    ``(B) In general.--Of the amount of funds remaining 
                after the reservation under subparagraph (A), the 
                Secretary shall allocate to each State for a fiscal 
                year, an amount that bears the same ratio to the amount 
                appropriated for that fiscal year as the amount made 
                available under section 1124 to the State for the 
                preceding fiscal year bears to the total amount 
                allocated under section 1124 to all States for that 
                year.
                    ``(C) Reallocation.--If a State does not apply for 
                funds under this section, the Secretary shall 
                reallocate such funds to other States that do apply in 
                proportion to the amount allocated to such States under 
                subparagraph (B).
    ``(c) State Awards.--
            ``(1) State application.--
                    ``(A) In general.--Each State educational agency 
                that desires to receive a grant under this section 
                shall submit an application to the Secretary at such 
                time, in such manner and containing such other 
                information as the Secretary may reasonably require.
                    ``(B) Contents.--Each State application shall also 
                describe--
                            ``(i) the process and selection criteria by 
                        which the State educational agency, using 
                        expert review, will select local educational 
                        agencies to receive subgrants under this 
                        section;
                            ``(ii) how the agency will ensure that only 
                        comprehensive school reforms that are based on 
                        scientifically based research receive funds 
                        under this section;
                            ``(iii) how the agency will disseminate 
                        materials regarding information on 
                        comprehensive school reforms that are based on 
                        scientifically based research;
                            ``(iv) how the agency will evaluate the 
                        implementation of such reforms and measure the 
                        extent to which the reforms resulted in 
                        increased student academic performance; and
                            ``(v) how the agency will provide, upon 
                        request, technical assistance to the local 
                        educational agency in evaluating, developing, 
                        and implementing comprehensive school reform.
            ``(2) Uses of funds.--
                    ``(A) In general.--Except as provided in 
                subparagraph (E), a State educational agency that 
                receives an award under this section shall use such 
                funds to provide competitive grants to local 
                educational agencies receiving funds under part A.
                    ``(B) Grant requirements.--A grant to a local 
                educational agency shall be--
                            ``(i) of sufficient size and scope to 
                        support the initial costs for the particular 
                        comprehensive school reform plan selected or 
                        designed by each school identified in the 
                        application of the local educational agency;
                            ``(ii) in an amount not less than $50,000 
                        to each participating school; and
                            ``(iii) renewable for two additional 1-year 
                        periods after the initial 1-year grant is made 
                        if schools are making substantial progress in 
                        the implementation of their reforms.
                    ``(C) Priority.--The State, in awarding grants 
                under this paragraph, shall give priority to local 
                educational agencies that--
                            ``(i) plan to use the funds in schools 
                        identified as being in need of improvement or 
                        corrective action under section 1116(c); and
                            ``(ii) demonstrate a commitment to assist 
                        schools with budget allocation, professional 
                        development, and other strategies necessary to 
                        ensure the comprehensive school reforms are 
                        properly implemented and are sustained in the 
                        future.
                    ``(D) Grant consideration.--In making subgrant 
                awards under this part, the State educational agency 
                shall take into account the equitable distribution of 
                awards to different geographic regions within the 
                State, including urban and rural areas, and to schools 
                serving elementary and secondary students.
                    ``(E) Administrative costs.--A State educational 
                agency that receives a grant award under this section 
                may reserve not more than 5 percent of such award for 
                administrative, evaluation, and technical assistance 
                expenses.
                    ``(F) Supplement.--Funds made available under this 
                section shall be used to supplement, not supplant, any 
                other Federal, State, or local funds that would 
                otherwise be available to carry out this section.
            ``(3) Reporting.--Each State educational agency that 
        receives an award under this section shall provide to the 
        Secretary such information as the Secretary may require, 
        including the names of local educational agencies and schools 
        selected to receive subgrant awards under this section, the 
        amount of such award, and a description of the comprehensive 
        school reform model selected and in use.
    ``(d) Local Awards.--
            ``(1) In general.--Each local educational agency that 
        applies for a subgrant under this section shall--
                    ``(A) identify which schools eligible for funds 
                under part A plan to implement a comprehensive school 
                reform program, including the projected costs of such a 
                program;
                    ``(B) describe the scientifically based 
                comprehensive school reforms that such schools will 
                implement;
                    ``(C) describe how the agency will provide 
                technical assistance and support for the effective 
                implementation of the scientifically based school 
                reforms selected by such schools; and
                    ``(D) describe how the agency will evaluate the 
                implementation of such reforms and measure the results 
                achieved in improving student academic performance.
            ``(2) Components of the program.--A local educational 
        agency that receives a subgrant award under this section shall 
        provide such funds to schools that implement a comprehensive 
        school reform program that--
                    ``(A) employs innovative strategies and proven 
                methods for student learning, teaching, and school 
                management that are based on scientifically based 
                research and effective practices and have been 
                replicated successfully in schools with diverse 
                characteristics;
                    ``(B) integrates a comprehensive design for 
                effective school functioning, including instruction, 
                assessment, classroom management, professional 
                development, parental involvement, and school 
                management, that aligns the school's curriculum, 
                technology, professional development into a 
                comprehensive reform plan for schoolwide change 
                designed to enable all students to meet challenging 
                State content and challenging student performance 
                standards and addresses needs identified through a 
                school needs assessment;
                    ``(C) provides high-quality and continuous teacher 
                and staff professional development;
                    ``(D) includes measurable goals for student 
                performance and performance objectives for meeting such 
                goals;
                    ``(E) is supported by teachers, principals, 
                administrators, and other professional staff;
                    ``(F) provides for the meaningful involvement of 
                parents and the local community in planning and 
                implementing school improvement activities;
                    ``(G) uses high quality external technical support 
                and assistance from an entity, which may be an 
                institution of higher education, with experience and 
                expertise in schoolwide reform and improvement;
                    ``(H) includes a plan for the evaluation of the 
                implementation of school reforms and the student 
                results achieved; and
                    ``(I) identifies how other resources, including 
                Federal, State, local, and private resources, available 
                to the school will be used to coordinate services to 
                support and sustain the school reform effort.
            ``(3) Special rule.--A school that receives funds to 
        develop a comprehensive school reform program shall not be 
        limited to using the approaches identified or developed by the 
        Department of Education, but may develop its own comprehensive 
        school reform programs for schoolwide change that comply with 
        paragraph (2).
    ``(e) Evaluation and Report.--
            ``(1) In general.--The Secretary shall develop a plan for a 
        national evaluation of the programs developed pursuant to this 
        section.
            ``(2) Evaluation.--This national evaluation shall evaluate 
        the implementation and results achieved by schools after 3 
        years of implementing comprehensive school reforms, and assess 
        the effectiveness of comprehensive school reforms in schools 
        with diverse characteristics.
            ``(3) Reports.--Prior to the completion of a national 
        evaluation, the Secretary shall submit an interim report 
        outlining first year implementation activities to the 
        Committees on Education and the Workforce and Appropriations of 
        the House of Representatives and the Committees on Health, 
        Education, Labor, and Pensions and Appropriations of the 
        Senate.
    ``(f) Definition.--The term `scientifically based research'--
            ``(1) means the application of rigorous, systematic, and 
        objective procedures in the development of comprehensive school 
        reform models; and
            ``(2) shall include research that--
                    ``(A) employs systematic, empirical methods that 
                draw on observation or experiment;
                    ``(B) involves rigorous data analyses that are 
                adequate to test the stated hypotheses and justify the 
                general conclusions drawn;
                    ``(C) relies on measurements or observational 
                methods that provide valid data across evaluators and 
                observers and across multiple measurements and 
                observations; and
                    ``(D) has been accepted by a peer-reviewed journal 
                or approved by a panel of independent experts through a 
                comparably rigorous, objective, and scientific review.
    ``(g) Authorization of Appropriations.--Funds appropriated for any 
fiscal year under section 1002(f) shall be used for carrying out the 
activities under this section.''.

              PART G--RURAL EDUCATION ACHIEVEMENT PROGRAM

SEC. 191. AUTHORIZATION OF APPROPRIATIONS.

    Section 10973 (20 U.S.C. 8293) is amended to read as follows:
    ``There are authorized to be appropriated to carry out this subpart 
$150,000,000 for fiscal year 2002 and such sums as may be necessary for 
each of the succeeding 4 fiscal years.''.

SEC. 192. FORMULA GRANT PROGRAM.

    Section 10974 (20 U.S.C. 8294) is amended--
            (1) in subsection (a)(1), by striking ``section 2010(b), 
        section 3134, or section 4116'' and inserting the following: 
        ``section 2017, or 6006.'; and
            (2) in subsection (c), by striking ``, IV,''.

TITLE II--TEACHER AND PRINCIPAL QUALITY, PROFESSIONAL DEVELOPMENT, AND 
                               CLASS SIZE

SEC. 201. TEACHER AND PRINCIPAL QUALITY, PROFESSIONAL DEVELOPMENT, AND 
              CLASS SIZE.

    Title II (20 U.S.C. 6601 et seq.) is amended to read as follows:

 ``TITLE II--TEACHER AND PRINCIPAL QUALITY, PROFESSIONAL DEVELOPMENT, 
                             AND CLASS SIZE

``SEC. 2001. PURPOSE.

    ``The purpose of this title is to provide grants to State 
educational agencies and local educational agencies in order to assist 
their efforts to increase student academic achievement through such 
strategies as improving teacher and principal quality, increasing 
professional development, and decreasing class size.

``SEC. 2002. DEFINITIONS.

    ``In this title:
            ``(1) Fully qualified.--The term `fully qualified'--
                    ``(A) when used with respect to a public elementary 
                or secondary school teacher (other than a teacher 
                teaching in a public charter school), means that the 
                teacher has obtained State certification as a teacher 
                (including certification obtained through alternative 
                routes to certification) or passed the State teacher 
                licensing exam and holds a license to teach in such 
                State; and
                    ``(B) when used with respect to--
                            ``(i) an elementary school teacher, means 
                        that the teacher holds a bachelor's degree and 
                        demonstrates knowledge and teaching skills in 
                        reading, writing, mathematics, science, and 
                        other areas of the elementary school 
                        curriculum; or
                            ``(ii) a middle or secondary school 
                        teacher, means that the teacher holds a 
                        bachelor's degree and demonstrates a high level 
                        of competency in all subject areas in which he 
                        or she teaches through--
                                    ``(I) a high level of performance 
                                on a rigorous State or local academic 
                                subject areas test; or
                                    ``(II) completion of an academic 
                                major in each of the subject areas in 
                                which he or she provides instruction.
            ``(2) Institution of higher education.--The term 
        `institution of higher education' means an institution of 
        higher education, as defined in section 101 of the Higher 
        Education Act of 1965, that--
                    ``(A) has not been identified as low performing 
                under section 208 of the Higher Education Act of 1965; 
                and
                    ``(B) is in full compliance with the public 
                reporting requirements described in section 207 of the 
                Higher Education Act of 1965.
            ``(3) Outlying area.--The term `outlying area' means the 
        United States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(4) Poverty line.--The term `poverty line' means 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) applicable to a 
        family of the size involved, for the most recent year.
            ``(5) School-age population.--The term `school-age 
        population' means the population aged 5 through 17, as 
        determined on the basis of the most recent satisfactory data.
            ``(6) State.--The term `State' means each of the several 
        States in the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.
            ``(7) The requirement of paragraph (2)(B)(i) and (ii) shall 
        apply to teachers teaching in a public charter school.

  ``PART A--TEACHER AND PRINCIPAL QUALITY AND PROFESSIONAL DEVELOPMENT

``SEC. 2011. PROGRAM AUTHORIZED.

    ``(a) Grants Authorized.--The Secretary shall award a grant, from 
allotments made under subsection (b), to each State having a State plan 
approved under section 2013, to enable the State to raise the quality 
of, and provide professional development opportunities for, public 
elementary school and secondary school teachers, principals, and 
administrators.
    ``(b) Reservations and Allotments.--
            ``(1) Reservations.--From the amount appropriated under 
        section 2023 to carry out this part for each fiscal year, the 
        Secretary shall reserve--
                    ``(A) \1/2\ of 1 percent of such amount for 
                payments to the Bureau of Indian Affairs for 
                activities, approved by the Secretary, consistent with 
                this part;
                    ``(B) \1/2\ of 1 percent of such amount for 
                payments to outlying areas, to be allotted in 
                accordance with their respective needs as determined by 
                the Secretary, for activities, approved by the 
                Secretary, consistent with this part; and
                    ``(C) such sums as may be necessary to continue to 
                support any multiyear partnership program award made 
                under parts A, C, and D (as such parts were in effect 
                on the day preceding the date of enactment of the 
                Public Education Reinvestment, Reinvention, and 
                Responsibility Act (Three R's)) until the termination 
                of the multiyear award.
            ``(2) State allotments.--From the amount appropriated under 
        section 2023 for a fiscal year and remaining after the 
        Secretary makes reservations under paragraph (1), the Secretary 
        shall allot to each State having a State plan approved under 
section 2013 the sum of--
                    ``(A) an amount that bears the same relationship to 
                50 percent of the remainder as the school-age 
                population from families with incomes below the poverty 
                line in the State bears to the school-age population 
                from families with incomes below the poverty line in 
                all States; and
                    ``(B) an amount that bears the same relationship to 
                50 percent of the remainder as the school-age 
                population in the State bears to the school-age 
                population in all States.
    ``(c) State Minimum.--For any fiscal year, no State shall be 
allotted under this section an amount that is less than \1/2\ of 1 
percent of the total amount allotted to all States under subsection 
(b)(2).
    ``(d) Hold-Harmless Amounts.--For fiscal year 2002, notwithstanding 
subsection (b)(2), the amount allotted to each State under this section 
shall be not less than 100 percent of the total amount the State was 
allotted under part B (as such part was in effect on the day preceding 
the date of enactment of the Public Education Reinvestment, 
Reinvention, and Responsibility Act (Three R's)) for the preceding 
fiscal year.
    ``(e) Ratable Reductions.--If the sums made available under 
subsection (b)(2) for any fiscal year are insufficient to pay the full 
amounts that all States are eligible to receive under subsection (d) 
for such year, the Secretary shall ratably reduce such amounts for such 
year.

``SEC. 2012. WITHIN STATE ALLOCATION.

    ``(a) In General.--Each State educational agency for a State 
receiving a grant under section 2011(a) shall--
            ``(1) set aside 15 percent of the grant funds to award 
        educator partnership grants under section 2021;
            ``(2) set aside not more than 5 percent of the grant funds 
        to carry out activities described the State plan submitted 
        under section 2013; and
            ``(3) using the remaining 80 percent of the grant funds, 
        make subgrants by allocating to each local educational agency 
        in the State the sum of--
                    ``(A) an amount that bears the same relationship to 
                60 percent of the remainder as the school-age 
                population from families with incomes below the poverty 
                line in the area served by the local educational agency 
                bears to the school-age population from families with 
                incomes below the poverty line in the area served by 
                all local educational agencies in the State; and
                    ``(B) an amount that bears the same relationship to 
                40 percent of the remainder as the school-age 
                population in the area served by the local educational 
                agency bears to the school-age population in the area 
                served by all local educational agencies in the State.
    ``(b) Hold-Harmless Amounts.--Notwithstanding subsection (a), the 
amount allocated to each local educational agency under this section 
shall be not less than 100 percent of the total amount the local 
educational agency was allocated under this title (as in effect on the 
day preceding the date of enactment of the Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's)) for each 
year.
    ``(c) Ratable Reductions.--If the sums made available under 
subsection (a)(3) for any fiscal year are insufficient to pay the full 
amounts that all local educational agencies are eligible to receive 
under subsection (b) for such year, the State educational agency shall 
ratably reduce such amounts for such year.

``SEC. 2013. STATE PLANS.

    ``(a) Plan Required.--
            ``(1) Comprehensive state plan.--The entity or agency 
        responsible for teacher certification or licensing under the 
        laws of the State desiring a grant under this part shall submit 
        a State plan to the Secretary at such time, in such manner, and 
        accompanied by such information as the Secretary may require. 
        If the State educational agency is not the entity or agency 
        designated under the laws of the State as responsible for 
        teacher certification or licensing in the State, then the plan 
        shall be developed in consultation with the State educational 
        agency. The entity or agency shall provide annual evidence of 
        such consultation to the Secretary.
            ``(2) Consolidated plan.--A State plan submitted under 
        paragraph (1) may be submitted as part of a consolidated plan 
        under section 8302.
    ``(b) Contents.--Each plan submitted under subsection (a) shall--
            ``(1) describe how the State is taking reasonable steps 
        to--
                    ``(A) reform teacher certification, 
                recertification, or licensure requirements to ensure 
                that--
                            ``(i) teachers have the necessary teaching 
                        skills and academic content knowledge in the 
                        academic subjects in which the teachers are 
                        assigned to teach;
                            ``(ii) such requirements are aligned with 
                        the challenging State content standards;
                            ``(iii) teachers have the knowledge and 
                        skills necessary to help students meet the 
                        challenging State student performance 
                        standards;
                            ``(iv) such requirements take into account 
                        the need, as determined by the State, for 
                        greater access to, and participation in, the 
                        teaching profession by individuals from 
                        historically underrepresented groups; and
                            ``(v) teachers have the necessary 
                        technological skills to integrate more 
                        effectively technology in the teaching of 
                        content required by State and local standards 
                        in all academic subjects in which the teachers 
                        provide instruction;
                    ``(B) develop and implement rigorous testing 
                procedures for teachers, as required in section 
                2002(1)(A), to ensure that the teachers have teaching 
                skills and academic content knowledge necessary to 
teach effectively the content called for by State and local standards 
in all academic subjects in which the teachers provide instruction;
                    ``(C) establish, expand, or improve alternative 
                routes to State certification of teachers, especially 
                in the areas of mathematics and science, for highly 
                qualified individuals with a baccalaureate degree, 
                including mid-career professionals from other 
                occupations, paraprofessionals, former military 
                personnel, and recent college or university graduates 
                who have records of academic distinction and who 
                demonstrate the potential to become highly effective 
                teachers;
                    ``(D) reduce emergency teacher certification;
                    ``(E) develop and implement effective programs, and 
                provide financial assistance, to assist local 
                educational agencies, elementary schools, and secondary 
                schools in effectively recruiting and retaining fully 
                qualified teachers and principals, particularly in 
                schools that have the lowest proportion of fully 
                qualified teachers or the highest proportion of low-
                performing students;
                    ``(F) provide professional development programs 
                that meet the requirements described in section 2019;
                    ``(G) provide programs that are designed to assist 
                new teachers during their first 3 years of teaching, 
                such as mentoring programs that--
                            ``(i) provide mentoring to new teachers 
                        from veteran teachers with expertise in the 
                        same subject matter as the new teachers are 
                        teaching;
                            ``(ii) provide mentors time for activities 
                        such as coaching, observing, and assisting 
                        teachers who are being mentored; and
                            ``(iii) use standards or assessments that 
                        are consistent with the State's student 
                        performance standards and the requirements for 
                        professional development activities described 
                        in section 2019 in order to guide the new 
                        teachers;
                    ``(H) provide technical assistance to local 
                educational agencies in developing and implementing 
                activities described in section 2018; and
                    ``(I) ensure that programs in core academic 
                subjects, particularly in mathematics and science, will 
                take into account the need for greater access to, and 
                participation in, such core academic subjects by 
                students from historically underrepresented groups, 
                including females, minorities, individuals with limited 
                English proficiency, the economically disadvantaged, 
                and individuals with disabilities, by incorporating 
                pedagogical strategies and techniques that meet such 
                students' educational needs;
            ``(2) describe the activities for which assistance is 
        sought under the grant, and how such activities will improve 
        students' academic achievement and close academic achievement 
        gaps of low-income, minority, and limited English proficient 
        students;
            ``(3) describe how the State will establish annual 
        numerical performance objectives under section 2014 for 
        improving the qualifications of teachers and the professional 
        development of teachers, principals, administrators, and mental 
        health professionals;
            ``(4) contain an assurance that the State consulted with 
        local educational agencies, education-related community groups, 
        nonprofit organizations, parents, teachers, school 
        administrators, local school boards, institutions of higher 
        education in the State, and content specialists in establishing 
        the performance objectives described in section 2014;
            ``(5) describe how the State will hold local educational 
        agencies, elementary schools, and secondary schools accountable 
        for meeting the performance objectives described in section 
        2014 and for reporting annually on the local educational 
        agencies' and schools' progress in meeting the performance 
        objectives;
            ``(6) describe how the State will ensure that a local 
        educational agency receiving a subgrant under section 2012 will 
        comply with the requirements of this part;
            ``(7) provide an assurance that the State will require each 
        local educational agency, elementary school, or secondary 
        school receiving funds under this part to report publicly the 
        local educational agency's or school's annual progress with 
        respect to the performance objectives described in section 
        2014; and
            ``(8) describe how the State will coordinate professional 
        development activities authorized under this part with 
        professional development activities provided under other 
        Federal, State, and local programs, including programs 
        authorized under titles I and III and, where appropriate, the 
        Individuals with Disabilities Education Act and the Carl D. 
        Perkins Vocational and Technical Education Act of 1998.
    ``(c) Secretary Approval.--The Secretary shall, using a peer review 
process, approve a State plan if the plan meets the requirements of 
this section.
    ``(d) Duration of the Plan.--
            ``(1) In general.--Each State plan shall--
                    ``(A) remain in effect for the duration of the 
                State's participation under this part; and
                    ``(B) be periodically reviewed and revised by the 
                State, as necessary, to reflect changes to the State's 
                strategies and programs carried out under this part.
            ``(2) Additional information.--If a State receiving a grant 
        under this part makes significant changes to the State plan, 
        such as the adoption of new performance objectives, the State 
        shall submit information regarding the significant changes to 
        the Secretary.

``SEC. 2014. PERFORMANCE OBJECTIVES.

    ``(a) In General.--Each State receiving a grant under this part 
shall establish annual numerical performance objectives with respect to 
progress in improving the qualifications of teachers and the 
professional development of teachers, principals, and administrators. 
For each annual numerical performance objective established, the State 
shall specify an incremental percentage increase for the objective to 
be attained for each of the fiscal years for which the State receives a 
grant under this part, relative to the preceding fiscal year.
    ``(b) Required Objectives.--At a minimum, the annual numerical 
performance objectives described in subsection (a) shall include an 
incremental increase in the percentage of--
            ``(1) classes in core academic subjects that are being 
        taught by fully qualified teachers;
            ``(2) new teachers and principals receiving professional 
        development support, including mentoring for teachers, during 
        the teachers' and principals first 3 years;
            ``(3) teachers, principals, and administrators 
        participating in high quality professional development programs 
        that are consistent with section 2019; and
            ``(4) fully qualified teachers teaching in the State, to 
        ensure that all teachers teaching in such State are fully 
        qualified by December 31, 2005.
    ``(c) Requirement for Fully Qualified Teachers.--Each State 
receiving a grant under this part shall ensure that all public 
elementary school and secondary school teachers in the State are fully 
qualified not later than December 31, 2005.
    ``(d) Accountability.--
            ``(1) In general.--Each State receiving a grant under this 
        part shall be held accountable for--
                    ``(A) meeting the State's annual numerical 
                performance objectives; and
                    ``(B) meeting the reporting requirements described 
                in section 4401.
            ``(2) Sanctions.--Any State that fails to meet the 
        requirement described in paragraph (1)(A) shall be subject to 
        sanctions under section 7001.
    ``(e) Special Rule.--Notwithstanding any other provision of law, 
the provisions of subsection (c) shall not supersede State laws 
governing public charter schools.
    ``(f) Coordination.--Each State that receives a grant under this 
part and a grant under section 202 of the Higher Education Act of 1965 
shall coordinate the activities the State carries out under such 
section 202 with the activities the State carries out under this 
section.

``SEC. 2015. OPTIONAL ACTIVITIES.

    ``Each State receiving a grant under section 2011(a) may use the 
grant funds--
            ``(1) to develop and implement a system to measure the 
        effectiveness of specific professional development programs and 
        strategies;
            ``(2) to increase the portability of teacher pensions and 
        reciprocity of teaching certification or licensure among 
        States, except that no reciprocity agreement developed under 
        this section may lead to the weakening of any State teacher 
        certification or licensing requirement;
            ``(3) to develop or assist local educational agencies in 
        the development and utilization of proven, innovative 
        strategies to deliver intensive professional development 
        programs that are cost effective and easily accessible, such as 
        programs offered through the use of technology and distance 
        learning;
            ``(4) to provide assistance to local educational agencies 
        for the development and implementation of innovative 
        professional development programs that train teachers to use 
        technology to improve teaching and learning and that are 
        consistent with the requirements of section 2019;
            ``(5) to provide professional development to enable 
        teachers to ensure that female students, minority students, 
        limited English proficient students, students with 
        disabilities, and economically disadvantaged students have the 
        full opportunity to achieve challenging State content and 
        performance standards in the core academic subjects;
            ``(6) to increase the number of women, minorities, and 
        individuals with disabilities who teach in the State and who 
        are fully qualified and provide instruction in core academic 
        subjects in which such individuals are underrepresented;
            ``(7) to increase the number of highly qualified women, 
        minorities, and individuals from other underrepresented groups 
        who are involved in the administration of elementary schools 
        and secondary schools within the State; and
            ``(8) to develop and implement rigorous testing procedures 
        for teachers, as required in section 2002(1)(A), to ensure that 
        the teachers have teaching skills and academic content 
        knowledge necessary to teach effectively the content called for 
        by States local standards in all academic subjects in which the 
        teachers provide instruction.

``SEC. 2016. STATE ADMINISTRATIVE EXPENSES.

    ``Each State receiving a grant under section 2011(a) may use not 
more than 5 percent of the amount set aside in section 2012(a)(2) for 
the cost of--
            ``(1) planning and administering the activities described 
        in section 2013(b); and
            ``(2) making subgrants to local educational agencies under 
        section 2012.

``SEC. 2017. LOCAL PLANS.

    ``(a) In General.--Each local educational agency desiring a grant 
from the State under section 2012(a)(3) shall submit a local plan to 
the State educational agency--
            ``(1) at such time, in such manner, and accompanied by such 
        information as the State educational agency may require; and
            ``(2) that describes how the local educational agency will 
        coordinate the activities for which assistance is sought under 
        this part with other programs carried out under this Act, or 
        other Acts, as appropriate.
    ``(b) Local Plan Contents.--The local plan described in subsection 
(a) shall, at a minimum--
            ``(1) describe how the local educational agency will use 
        the grant funds to meet the State performance objectives for 
        teacher qualifications and professional development described 
        in section 2014;
            ``(2) describe how the local educational agency will hold 
        elementary schools and secondary schools accountable for 
        meeting the requirements described in this part;
            ``(3) contain an assurance that the local educational 
        agency will target funds to elementary schools and secondary 
        schools served by the local educational agency that--
                    ``(A) have the lowest proportion of fully qualified 
                teachers; and
                    ``(B) are identified for school improvement under 
                section 1116;
            ``(4) describe how the local educational agency will 
        coordinate professional development activities authorized under 
        section 2018(a) with professional development activities 
        provided through other Federal, State, and local programs, 
        including those authorized under titles I and III and, where 
        applicable, the Individuals with Disabilities Education Act and 
        the Carl D. Perkins Vocational and Technical Education Act of 
        1998; and
            ``(5) describe how the local educational agency has 
        collaborated with teachers, principals, parents, and 
        administrators in the preparation of the local plan.

``SEC. 2018. LOCAL ACTIVITIES.

    ``(a) In General.--Each local educational agency receiving a grant 
under section 2012(a)(3) shall use the grant funds to--
            ``(1) support professional development activities, 
        consistent with section 2019, for--
                    ``(A) teachers, in at least the areas of reading, 
                mathematics, and science; and
                    ``(B) teachers, principals, and administrators in 
                order to provide such individuals with the knowledge 
                and skills to provide all students, including female 
                students, minority students, limited English proficient 
                students, students with disabilities, and economically 
                disadvantaged students, with the opportunity to meet 
                challenging State content and student performance 
                standards;
            ``(2) provide professional development to teachers, 
        principals, and administrators to enhance the use of technology 
        within elementary schools and secondary schools in order to 
        deliver more effective curricula instruction;
            ``(3) recruit and retain fully qualified teachers and 
        highly qualified principals, particularly for elementary 
        schools and secondary schools located in areas with high 
        percentages of low-performing students and students from 
        families below the poverty line;
            ``(4) recruit and retain fully qualified teachers and high 
        quality principals to serve in the elementary schools and 
        secondary schools with the highest proportion of low-performing 
        students, such as through--
                    ``(A) mentoring programs for newly hired teachers 
                and for newly hired principals; and
                    ``(B) programs that provide other incentives, 
                including financial incentives, to retain--
                            ``(i) teachers who have a record of success 
                        in helping low-performing students improve 
                        those students' academic success; and
                            ``(ii) principals who have a record of 
                        improving the performance of all students, or 
                        significantly narrowing the gaps between 
                        minority students and nonminority students, and 
                        economically disadvantaged students and 
                        noneconomically disadvantaged students, within 
                        the elementary schools or secondary schools 
                        served by the principals;
            ``(5) provide professional development that incorporates 
        effective strategies, techniques, methods, and practices for 
        meeting the educational needs of diverse groups of students, 
        including female students, minority students, students with 
        disabilities, limited English proficient students, and 
        economically disadvantaged students; and
            ``(6) provide professional development for mental health 
        professionals, including school psychologists, school 
        counselors, and school social workers, that is focused on 
        enhancing the skills and knowledge of such individuals so that 
        they may help students exhibiting distress (such as substance 
        abuse, disruptive behavior, and suicidal behavior) meet the 
        challenging State student performance standards.
    ``(b) Optional Activities.--Each local educational agency receiving 
a grant under section 2012(a)(3) may use the subgrant funds--
            ``(1) to provide a signing bonus or other financial 
        incentive, such as differential pay for--
                    ``(A) a teacher to teach in an academic subject for 
                which there exists a shortage of fully qualified 
                teachers within the elementary school or secondary 
                school in which the teacher teaches or within the 
                elementary schools and secondary schools served by the 
                local educational agency; or
                    ``(B) a highly qualified principal in a school in 
                which there is a large percentage of children--
                            ``(i) from low-income families; or
                            ``(ii) with high percentages of low-
                        performance scores on State assessments;
            ``(2) to establish programs that--
                    ``(A) recruit professionals into teaching from 
                other fields and provide such professionals with 
                alternative routes to teacher certification, especially 
                in the areas of mathematics, science, and English 
                language arts; and
                    ``(B) provide increased teaching and administration 
                opportunities for fully qualified females, minorities, 
                individuals with disabilities, and other individuals 
                underrepresented in the teaching or school 
                administration professions;
            ``(3) to establish programs and activities that are 
        designed to improve the quality of the teacher and principal 
        force, such as innovative professional development programs 
        (which may be provided through partnerships, including 
        partnerships with institutions of higher education), and 
        including programs that--
                    ``(A) train teachers and principals to utilize 
                technology to improve teaching and learning; and
                    ``(B) are consistent with the requirements of 
                section 2019;
            ``(4) to provide collaboratively designed performance pay 
        systems for teachers and principals that encourage teachers and 
        principals to work together to raise student performance;
            ``(5) to establish professional development programs that 
        provide instruction in how to teach children with different 
        learning styles, particularly children with disabilities and 
        children with special learning needs (including children who 
        are gifted and talented);
            ``(6) to establish professional development programs that 
        provide instruction in how best to discipline children in the 
        classroom, and to identify early and appropriate interventions 
        to help children described in paragraph (5) learn;
            ``(7) to provide professional development programs that 
        provide instruction in how to teach character education in a 
        manner that--
                    ``(A) reflects the values of parents, teachers, and 
                local communities; and
                    ``(B) incorporates elements of good character, 
                including honesty, citizenship, courage, justice, 
                respect, personal responsibility, and trustworthiness;
            ``(8) to provide scholarships or other incentives to assist 
        teachers in attaining national board certification;
            ``(9) to support activities designed to provide effective 
        professional development for teachers of limited English 
        proficient students; and
            ``(10) to establish other activities designed--
                    ``(A) to improve professional development for 
                teachers, principals, and administrators that are 
                consistent with section 2019; and
                    ``(B) to recruit and retain fully qualified 
                teachers and highly qualified principals.

``SEC. 2019. PROFESSIONAL DEVELOPMENT FOR TEACHERS.

    ``(a) Limitation Relating to Curriculum and Content Areas.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        local educational agency may not use grant funds allocated 
        under section 2012(a)(3) to support a professional development 
        activity for a teacher that is not--
                    ``(A) directly related to the curriculum for which 
                and content areas in which the teacher provides 
                instruction; or
                    ``(B) designed to enhance the ability of the 
                teacher to understand and use the State's challenging 
                content standards for the academic subject in which the 
                teacher provides instruction.
            ``(2) Exception.--Paragraph (1) shall not apply to 
        professional development activities that provide instruction in 
        methods of disciplining children.
    ``(b) Professional Development Activity.--A professional 
development activity carried out under this part shall--
            ``(1) be measured, in terms of progress described in 
        section 2014(a), using the specific performance indicators 
        established by the State in accordance with section 2014;
            ``(2) be tied to challenging State or local content 
        standards and student performance standards;
            ``(3) be tied to scientifically based research 
        demonstrating the effectiveness of such activities in 
        increasing student achievement or substantially increasing the 
        knowledge and teaching skills of teachers;
            ``(4) be of sufficient intensity and duration (such as not 
        to include 1-day or short-term workshops and conferences) to 
        have a positive and lasting impact on teachers' performance in 
        the classroom, except that this paragraph shall not apply to an 
        activity that is 1 component described in a long-term 
        comprehensive professional development plan established by a 
        teacher and the teacher's supervisor, and based upon an 
        assessment of the needs of the teacher, the teacher's students, 
        and the local educational agency;
            ``(5) be developed with extensive participation of 
        teachers, principals, parents, administrators, and local school 
        boards of elementary schools and secondary schools to be served 
        under this part, and institutions of higher education in the 
        State, and, with respect to any professional development 
        program described in paragraph (6) or (7) of section 2018(b), 
        shall, if applicable, be developed with extensive coordination 
        with, and participation of, professionals with expertise in 
        such type of professional development;
            ``(6) to the extent appropriate, provide training for 
        teachers regarding using technology and applying technology 
        effectively in the classroom to improve teaching and learning 
        concerning the curriculum and academic content areas, in which 
        those teachers provide instruction; and
            ``(7) be directly related to the content areas in which the 
        teachers provide instruction and the State content standards.
    ``(c) Accountability.--
            ``(1) In general.--A State shall notify a local educational 
        agency that the agency may be subject to the action described 
        in paragraph (3) if, after any fiscal year, the State 
        determines that the programs or activities funded by the agency 
        under this part fail to meet the requirements of subsections 
        (a) and (b).
            ``(2) Technical assistance.--A local educational agency 
        that has received notification pursuant to paragraph (1) may 
        request technical assistance from the State and an opportunity 
        for such local educational agency to comply with the 
requirements of subsections (a) and (b).
            ``(3) State educational agency action.--If a State 
        educational agency determines that a local educational agency 
        failed to carry out the local educational agency's 
        responsibilities under this section, the State educational 
        agency shall take such action as the agency determines to be 
        necessary, consistent with this section, to provide, or direct 
        the local educational agency to provide, high-quality 
        professional development for teachers, principals, and 
        administrators.

``SEC. 2020. PARENTS' RIGHT TO KNOW.

    ``Each local educational agency receiving a grant under section 
2012(a)(3) shall meet the reporting requirements with respect to 
teacher qualifications described in section 4401(h).

``SEC. 2021. GAO STUDY.

    ``Not later than September 30, 2005, the Comptroller General of the 
United States shall prepare and submit to the Committee on Education 
and the Workforce of the House of Representatives and the Committee on 
Health, Education, Labor, and Pensions of the Senate a study setting 
forth information regarding the progress of States' compliance in 
increasing the percentage of fully qualified teachers, as defined in 
section 2002(1), for fiscal years 2002 through 2004; any obstacles to 
compliance, and the approximate percentage of Federal, State, and local 
resources being expended to carry out activities to attract and retain 
fully qualified teachers especially in geographic areas and content 
subject areas in which a shortage of such teachers exist.

``SEC. 2021. EDUCATOR PARTNERSHIP GRANTS.

    ``(a) Subgrants.--
            ``(1) In general.--A State receiving a grant under section 
        2011(a) shall award subgrants, on a competitive basis, from 
        amounts made available under section 2012(a)(1), to local 
        educational agencies, elementary schools, or secondary schools 
        that have formed educator partnerships, for the design and 
        implementation of programs that will enhance professional 
        development opportunities for teachers, principals, and 
        administrators, and will increase the number of fully qualified 
        teachers.
            ``(2) Allocations.--A State awarding subgrants under this 
        subsection shall allocate the subgrant funds on a competitive 
        basis and in a manner that results in an equitable distribution 
        of the subgrant funds by geographic areas within the State.
            ``(3) Administrative expenses.--Each educator partnership 
        receiving a subgrant under this subsection may use not more 
        than 5 percent of the subgrant funds for any fiscal year for 
        the cost of planning and administering programs under this 
        section.
    ``(b) Educator Partnerships.--An educator partnership described in 
subsection (a) includes a cooperative arrangement between--
            ``(1) a public elementary school or secondary school 
        (including a charter school), or a local educational agency; 
        and
            ``(2) 1 or more of the following:
                    ``(A) An institution of higher education.
                    ``(B) An educational service agency.
                    ``(C) A public or private not-for-profit education 
                organization.
                    ``(D) A for-profit education organization.
                    ``(E) An entity from outside the traditional 
                education arena, including a corporation or consulting 
                firm.
    ``(c) Use of Funds.--An educator partnership receiving a subgrant 
under this section shall use the subgrant funds for one or more of the 
following activities:
            ``(1) Developing and enhancing of professional development 
        activities for teachers in core academic subjects to ensure 
        that the teachers have content knowledge in the academic 
        subjects in which the teachers provide instruction.
            ``(2) Developing or enhancing professional development 
        activities for mathematics and science teachers to ensure that 
        such teachers have the content knowledge to teach mathematics 
        and science.
            ``(3) Developing and providing assistance to local 
        educational agencies and elementary schools and secondary 
        schools for sustained, high-quality professional development 
        activities for teachers, principals, and administrators, that--
                    ``(A) ensure that teachers, principals, and 
                administrators are able to use State content standards, 
                performance standards, and assessments to improve 
                instructional practices and student achievement; and
                    ``(B) may include intensive programs designed to 
                prepare a teacher who participates in such a program to 
                provide professional development instruction to other 
                teachers within the participating teacher's school.
            ``(4) Increasing the number of fully qualified teachers 
        available to provide high-quality education to limited English 
        proficient students by--
                    ``(A) working with institutions of higher education 
                that offer degree programs, to attract more people into 
                such programs, and to prepare better new, English 
                language teachers to provide effective language 
                instruction to limited English proficient students; and
                    ``(B) supporting development and implementation of 
                professional development programs for language 
                instruction teachers to improve the language 
                proficiency of limited English proficient students.
            ``(5) Developing and implementing professional development 
        activities for principals and administrators to enable the 
        principals and administrators to be effective school leaders 
        and to improve student achievement on challenging State content 
        and student performance standards, including professional 
        development relating to--
                    ``(A) leadership skills;
                    ``(B) recruitment, assignment, retention, and 
                evaluation of teachers and other staff;
                    ``(C) effective instructional practices, including 
                the use of technology; and
                    ``(D) parental and community involvement.
            ``(6) Providing activities that enhance professional 
        development opportunities for teachers, principals, and 
        administrators or will increase the number of fully qualified 
        teachers.
    ``(d) Application Required.--Each educator partnership desiring a 
subgrant under this section shall submit an application to the 
appropriate State educational agency at such time, in such manner, and 
accompanied by such information as the State educational agency may 
reasonably require.
    ``(e) Coordination.--Each educator partnership that receives a 
subgrant under this section and a grant under section 203 of the Higher 
Education Act of 1965 shall coordinate the activities carried out under 
such section 203 with any related activities carried out under this 
section.

``SEC. 2023. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$2,000,000,000 for fiscal year 2002 and such sums as may be necessary 
for each of the 4 succeeding fiscal years.

                     ``PART B--CLASS SIZE REDUCTION

``SEC. 2031. FINDINGS.

    ``Congress makes the following findings:
            ``(1) Rigorous research has shown that students attending 
        small classes in the early grades make more rapid educational 
        gains than students in larger classes, and that those gains 
        persist through at least the eighth grade.
            ``(2) The benefits of smaller classes are greatest for 
        lower-achieving, minority, poor, and inner-city children, as 
        demonstrated by a study that found that urban fourth graders in 
        smaller-than-average classes were \3/4\ of a school year ahead 
        of their counterparts in larger-than-average classes.
            ``(3) Teachers in small classes can provide students with 
        more individualized attention, spend more time on instruction 
        and less time on other tasks, and cover more material 
        effectively, and are better able to work with parents to 
        further their children's education, than teachers in large 
        classes.
            ``(4) Smaller classes allow teachers to identify and work 
        with students who have learning disabilities sooner than is 
        possible with larger classes, potentially reducing those 
        students' needs for special education services in the later 
        grades.
            ``(5) The National Research Council report, `Preventing 
        Reading Difficulties in Young Children', recommends reducing 
        class sizes, accompanied by providing high-quality professional 
        development for teachers, as a strategy for improving student 
        achievement in reading.
            ``(6) Efforts to improve educational outcomes by reducing 
        class sizes in the early grades are likely to be successful 
        only if well-qualified teachers are hired to fill additional 
        classroom positions, and if teachers receive intensive, ongoing 
        professional development.
            ``(7) Several States and school districts have begun 
        serious efforts to reduce class sizes in the early elementary 
        school grades, but those efforts may be impeded by financial 
        limitations or difficulties in hiring highly qualified 
        teachers.
            ``(8) The Federal Government can assist in those efforts by 
        providing funding for class size reductions in grades 1 through 
        3, and by helping to ensure that both new and current teachers 
        who are moving into smaller classrooms are well prepared.

``SEC. 2032. PURPOSE.

    ``The purpose of this part is to help States and local educational 
agencies to reduce class size with fully qualified teachers. Each local 
educational agency that receives funds under this part shall--
            ``(1) use such funds to carry out effective approaches to 
        reducing class size with fully qualified teachers who are 
        certified within the State, including teachers certified 
        through State or local alternative routes;
            ``(2) demonstrate competency in the areas in which they 
        teach; and
            ``(3) improve educational achievement for both regular and 
        special needs children, with particular consideration given to 
        reducing class size in the early elementary grades for which 
        some research has shown class size reduction is most effective.

``SEC. 2033. ALLOTMENTS TO STATES.

    ``(a) Reservations for the Outlying Areas and the Bureau of Indian 
Affairs.--From the amount appropriated under section 2042 for any 
fiscal year, the Secretary shall reserve a total of not more than 1 
percent to make payments to--
            ``(1) outlying areas, on the basis of their respective 
        needs, for activities, approved by the Secretary, consistent 
        with this part; and
            ``(2) the Secretary of the Interior for activities approved 
        by the Secretary of Education, consistent with this part, in 
        schools operated or supported by the Bureau of Indian Affairs, 
        on the basis of their respective needs.
    ``(b) Allotments to States.--
            ``(1) In general.--From the amount appropriated under 
        section 2042 for a fiscal year and remaining after the 
        Secretary makes reservations under subsection (a), the 
        Secretary shall make grants by allotting to each State having a 
        State application approved under section 2034(c) an amount that 
        bears the same relationship to the remainder as the greater of 
        the amounts that the State received in the preceding fiscal 
        year under sections 1122 and 2202(b) (as such sections were in 
        effect on the day preceding the date of enactment of the Public 
        Education Reinvestment, Reinvention, and Rededication Act) 
        bears to the total of the greater amounts that all States 
        received under such sections for the preceding fiscal year.
            ``(2) Ratable reduction.--If the sums made available under 
        paragraph (1) for any fiscal year are insufficient to pay the 
        full amounts that all States are eligible to receive under 
        paragraph (1) for such year, the Secretary shall ratably reduce 
        such amounts for such year.
            ``(3) Reallotment.--If any State chooses not to participate 
        in the program carried out under this part, or fails to submit 
        an approvable application under this part, the Secretary shall 
        reallot the amount that such State would have received under 
        paragraphs (1) and (2) to States having applications approved 
        under section 2034(c), in accordance with paragraphs (1) and 
        (2).

``SEC. 2034. APPLICATIONS.

    ``(a) Applications Required.--The State educational agency for each 
State desiring a grant under this part shall submit an application to 
the Secretary at such time, in such form, and containing such 
information as the Secretary may require.
    ``(b) Contents.--The application shall include--
            ``(1) a description of the State's goals for using funds 
        under this part to reduce average class sizes in regular 
        classrooms in grades 1 through 3, including a description of 
        class sizes in those classrooms, for each local educational 
        agency in the State (as of the date of submission of the 
        application);
            ``(2) a description of how the State educational agency 
        will allocate program funds made available through the grant 
        within the State;
            ``(3) a description of how the State will use other funds, 
        including other Federal funds, to reduce class sizes and to 
        improve teacher quality and reading achievement within the 
        State; and
            ``(4) an assurance that the State educational agency will 
        submit to the Secretary such reports and information as the 
        Secretary may reasonably require.
    ``(c) Approval of Applications.--The Secretary shall approve a 
State application submitted under this section if the application meets 
the requirements of this section and holds reasonable promise of 
achieving the purpose of this part.
    ``(d) Not later than 30 days after the date of the enactment of 
this Act, the Secretary shall provide specific notification to each 
local educational agency eligible to receive funds under section 
2037(b)(2)(B) and the ability to use such funds to carry out activities 
under section 2037(b)(1)(C).

``SEC. 2035. WITHIN-STATE ALLOCATIONS.

    ``(a) Allocations to Local Educational Agencies.--Each State 
receiving a grant under this part for any fiscal year may reserve not 
more than 1 percent of the grant funds for the cost of administering 
this part and, using the remaining funds, shall make subgrants by 
allocating to each local educational agency in the State the sum of--
            ``(1) an amount that bears the same relationship to 80 
        percent of the remainder as the school-age population from 
        families with incomes below the poverty line in the area served 
        by the local educational agency bears to the school-age 
        population from families with incomes below the poverty line in 
        the area served by all local educational agencies in the State; 
        and
            ``(2) an amount that bears the same relationship to 20 
        percent of the remainder as the enrollment of the school-age 
        population in public and private nonprofit elementary schools 
        and secondary schools in the area served by the local 
        educational agency bears to the enrollment of the school-age 
        population in public and private nonprofit elementary schools 
        and secondary schools in the area served by all local 
        educational agencies in the State.
    ``(b) Reallocation.--If any local educational agency chooses not to 
participate in the program carried out under this part, or fails to 
submit an approvable application under this part, the State educational 
agency shall reallocate the amount such local educational agency would 
have received under subsection (a) to local educational agencies having 
applications approved under section 2036(b), in accordance with 
subsection (a).

``SEC. 2036. LOCAL APPLICATIONS.

    ``(a) In General.--Each local educational agency desiring a 
subgrant under section 2035(a) shall submit an application to the 
appropriate State educational agency at such time, in such form, and 
containing such information as the State educational agency may 
require, including a description of the local educational agency's 
program to reduce class sizes by hiring additional highly qualified 
teachers.
    ``(b) Approval of Applications.--The State educational agency shall 
approve a local agency application submitted under subsection (a) if 
the application meets the requirements of subsection (a) and holds 
reasonable promise of achieving the purpose of this part.

``SEC. 2037. USES OF FUNDS.

    ``(a) Administrative Expenses.--Each local educational agency 
receiving a subgrant under section 2035(a) may use not more than 3 
percent of the subgrant funds for any fiscal year for the cost of 
administering this part.
    ``(b) Local activities.--
            ``(1) In general.--Each local educational agency receiving 
        subgrant funds under this section may use such subgrant funds 
        for--
                    ``(A) recruiting (including through the use of 
                signing bonuses, and other financial incentives), 
                hiring, and training fully qualified regular and 
                special education teachers (which may include hiring 
                special education teachers to team-teach with regular 
                teachers in classrooms that contain both children with 
                disabilities and non-disabled children) and teachers of 
                special-needs children, who are certified within the 
                State, including teachers who are certified through 
                State or local alternative routes, have a bachelor's 
                degree, and demonstrate the general knowledge, teaching 
                skills, and subject matter knowledge required to teach 
                in the content areas in which the teachers provide 
                instruction;
                    ``(B) testing new teachers for academic content 
                knowledge and satisfaction of State certification 
                requirements consistent with title II of the Higher 
                Education Act of 1965; and
                    ``(C) providing professional development which may 
                include such activities as those described in section 
                2018.
            ``(2) Limitations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a local educational agency may use 
                not more than a total of 25 percent of the award 
                received under this section for activities described in 
                subparagraphs (A) and (B) of paragraph (1).
                    ``(B) A local educational agency in which 10 
                percent or more of teachers in elementary schools, as 
                defined by section 8101(14) of the Elementary and 
                Secondary Education Act of 1965, have not more 
                applicable State and local certification requirements 
                (including certification through State or local 
                alternative routes), or if such requirements have been 
                waived, may use more than 25 percent of the funds it 
                receives under this section for activities described in 
                subparagraph (A)(iii) to help teachers who are not 
                certified by the State become certified, including 
                through State or local alternative routes, or to help 
                teachers affected by class size reduction who lack 
                sufficient content knowledge to teach effectively in 
                the areas they teach to obtain that knowledge, if the 
                local educational agency notifies the State educational 
                agency of the percentage of the funds that it will use 
                for the purpose described in this clause.
            ``(3) Additional uses.--
                    ``(A) In general.--A local educational agency that 
                has already reduced class size in the early grades to 
                18 or less children (or has already reduced class size 
                to a State or local class size reduction goal that was 
                in effect on the day before the enactment of the 
                Department of Education Appropriations Act, 2000, if 
                that State or local educational agency goal is 20 or 
                fewer children) may use funds received under this 
                section--
                            ``(i) to make further class size reductions 
                        in grades kindergarten through 3;
                            ``(ii) to reduce class size in other 
                        grades; or
                            ``(iii) to carry out activities to improve 
                        teacher quality, including professional 
                        development.
                    ``(B) Professional development.--If a local 
                educational agency has already reduced class size in 
                the early grades to 18 or fewer children and intends to 
                use funds provided under this Part to carry out 
                professional development activities, including 
                activities to improve teacher quality, then the State 
                shall make the award under section 2035 to the local 
                educational agency.
    ``(c) Special Rule.--Notwithstanding subsection (b), if the award 
to a local educational agency under section 2035 is less than the 
starting salary for a new fully qualified teacher teaching in a school 
served by that agency, and such teacher is certified within the State 
(which may include certification through State or local alternative 
routes), has a bachelor's degree, and demonstrates the general 
knowledge, teaching skills, and subject matter knowledge required to 
teach in the content areas the teacher is assigned to provide 
instruction, then the agency may use grant funds under this part to--
            ``(1) help pay the salary of a full- or part-time teacher 
        hired to reduce class size, which may be in combination with 
        other Federal, State, or local funds; or
            ``(2) pay for activities described in subsection (b), which 
        may be related to teaching in smaller classes.

``SEC. 2038. PRIVATE SCHOOLS.

    ``If a local educational agency uses funds made available under 
this Part for professional development activities, the local 
educational agency shall ensure the equitable participation of private 
nonprofit elementary schools and secondary schools in such activities.

``SEC. 2039. TEACHER SALARIES AND BENEFITS.

    ``A local educational agency may use grant funds provided under 
this part--
            ``(1) except as provided in paragraph (2) of section 
        2037(b), to increase the salaries of, or provide benefits 
        (other than participation in professional development and 
        enrichment programs) to, teachers only if such teachers were 
        hired under this part; and
            ``(2) to pay the salaries of teachers hired under section 
        307 of the Department of Education Appropriations Act of 1999 
        or under section 310 of the Department of Education 
        Appropriations Act 2000 who, not later than the beginning of 
        the 2001-2002 school year, are fully qualified, as defined in 
        section 2002(1).

``SEC. 2040. STATE REPORT REQUIREMENTS.

    ``(a) Report on Activities.--A State educational agency receiving 
funds under this part shall submit a report to the Secretary providing 
information about the activities in the State assisted under this part.
    ``(b) Prohibition.--No funds under this section may be used to pay 
the salary of any teacher hired with funds under section 307 of the 
Department of Education Appropriations Act, 1999, unless, by the start 
of the 2001-2002 school year, the teacher is certified within the State 
(which may include certification through State or local alternative 
routes) and demonstrates competency in the subject areas in which the 
teacher teaches.
    ``(c) Report to Parents.--Each State educational agency and local 
educational agency receiving funds under this part shall publicly issue 
a report to parents of children who attend schools assisted under this 
part describing--
            ``(1) the agency's progress in reducing class size;
            ``(2) the agency's progress in increasing the percentage of 
        classes in core academic areas that are taught by fully 
        qualified teachers who are certified within the State and 
        demonstrate competency in the content areas in which the 
        teachers provide instruction; and
            ``(3) the impact, if any, that hiring additional highly 
        qualified teachers and reducing class size has had on 
        increasing student academic achievement in schools served by 
        the agency.
    ``(c) Professional Qualifications Report.--Upon the request of a 
parent of a child attending a school receiving assistance under this 
part, such school shall provide the parent with information regarding 
the professional qualifications of their child's teacher.

``SEC. 2041. SUPPLEMENT NOT SUPPLANT.

    ``Each local educational agency receiving grant funds under this 
part shall use such funds only to supplement, and not to supplant, 
State and local funds that, in the absence of such funds, would 
otherwise be spent for activities under this part.

``SEC. 2042. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated $1,623,000,000 for fiscal year 2002, and such sums 
as may be necessary for each of the 4 succeeding fiscal years.''.

TITLE III--LANGUAGE MINORITY STUDENTS AND INDIAN, NATIVE HAWAIIAN, AND 
                        ALASKA NATIVE EDUCATION

SEC. 301. LANGUAGE MINORITY STUDENTS.

    Title III (20 U.S.C. 6801 et seq.) is amended--
            (1) by amending the heading for title III to read as 
        follows:

 ``TITLE III--LANGUAGE MINORITY STUDENTS AND INDIAN, NATIVE HAWAIIAN, 
                     AND ALASKA NATIVE EDUCATION'';

            (2) by repealing section 3101 (20 U.S.C. 6801) and part A 
        (20 U.S.C. 6811 et seq.); and
            (3) by inserting after the heading for title III (as 
        amended by paragraph (1)) the following:

                  ``PART A--LANGUAGE MINORITY STUDENTS

``SEC. 3101. FINDINGS, POLICY, AND PURPOSE.

    ``(a) Findings.--Congress makes the following findings:
            ``(1)(A) Educating limited English proficient students is 
        an urgent goal for many local educational agencies, but that 
        goal is not being achieved.
            ``(B) Each year, 640,000 limited English proficient 
        students are not served by any sort of program targeted to the 
        students' unique needs.
            ``(C) In 1998, only 15 percent of local educational 
        agencies that applied for funding under enhancement grants and 
        comprehensive school grants received such funding.
            ``(2)(A) The school dropout rate for Hispanic students, the 
        largest group of limited English proficient students, is 
        approximately 29 percent, and is approximately 44 percent for 
        Hispanic students born outside of the United States.
            ``(B) A United States Department of Education report 
        regarding school dropout rates states that language difficulty 
        `may be a barrier to participation in United States schools'.
            ``(C) Reading ability is a key predictor of graduation and 
        academic success.
            ``(3) Through fiscal year 1999, bilingual education 
        capacity and demonstration grants--
                    ``(A) have spread funding too broadly to make an 
                impact on language instruction educational programs 
                implemented by State educational agencies and local 
                educational agencies; and
                    ``(B) have lacked concrete performance measures.
            ``(4)(A) Since 1979, the number of limited English 
        proficient children in schools in the United States has doubled 
        to more than 3,000,000, and demographic trends indicate the 
        population of limited English proficient children will continue 
        to increase.
            ``(B) Language-minority Americans speak virtually all world 
        languages plus many that are indigenous to the United States.
            ``(C) The rich linguistic diversity language-minority 
        students bring to America's classrooms enhances the learning 
        environment for all students and should be valued for the 
        significant, positive impact such diversity has on the entire 
        school environment.
            ``(D) Parent and community participation in educational 
        language programs for limited English proficient students 
        contributes to program effectiveness.
            ``(E) The Federal Government, as reflected in title VI of 
        the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) and 
        section 204(f) of the Equal Education Opportunities Act of 1974 
        (20 U.S.C. 1703), has a special and continuing obligation to 
        ensure that States and local educational agencies take 
        appropriate action to provide equal educational opportunities 
        to limited English proficient children and youth.
            ``(F) The Federal Government also, as exemplified by 
        programs authorized under this title, has a special and 
        continuing obligation to assist States and local educational 
        agencies to develop the capacity to provide programs of 
        instruction that offer limited English proficient children and 
        youth equal educational opportunities.
            ``(5) Limited English proficient children and youth face a 
        number of challenges in receiving an education that will enable 
        them to participate fully in American society, including--
                    ``(A) disproportionate attendance in high-poverty 
                schools, as demonstrated by the fact that, in 1994, 75 
                percent of limited English proficient students attended 
                schools in which at least half of all students were 
                eligible for free or reduced-price meals;
                    ``(B) the limited ability of parents of such 
                children and youth to participate fully in the 
                education of their children because of the parents' own 
                limited English proficiency;
                    ``(C) a shortage of teachers and other staff who 
                are professionally trained and qualified to serve such 
                children and youth; and
                    ``(D) lack of appropriate performance and 
                assessment standards that distinguish between language 
                and academic achievement so that there is equal 
                accountability on the part of State educational 
                agencies and local educational agencies for the 
                achievement of limited English proficient students in 
                academic content while acquiring English language 
                skills.
    ``(b) Policy.--Congress declares it to be the policy of the United 
States that in order to ensure equal educational opportunity for all 
children and youth, and to promote educational excellence, the Federal 
Government should--
            ``(1) assist State educational agencies, local educational 
        agencies, and community-based organizations to build their 
        capacity to establish, implement, and sustain programs of 
        instruction and English language development for children and 
        youth of limited English proficiency;
            ``(2) hold State educational agencies and local educational 
        agencies accountable for increases in English proficiency and 
core content knowledge among limited English proficient students; and
            ``(3) promote parental and community participation in 
        limited English proficiency programs.
    ``(c)  Purpose.--The purposes of this part are to--
            ``(1) assist all limited English proficient students in 
        attaining English proficiency;
            ``(2) help all limited English proficient students develop 
        high levels of attainment in the academic core subjects so that 
        those students can meet the same challenging State content 
        standards and challenging State student performance standards 
        expected for all children as required by section 1111(b); and
            ``(3) help local educational agencies develop and enhance 
        their capacity to provide high quality instruction in teaching 
        limited English proficient children in achieving the same high 
        levels of academic achievement as other children by--
                    ``(A) streamlining existing language instruction 
                programs into a performance-based grant for State and 
                local educational agencies to help limited English 
                proficient students become proficient in English;
                    ``(B) increasing significantly the amount of 
                Federal assistance to local educational agencies 
                serving such students while requiring that State 
                educational agencies and local educational agencies 
                demonstrate annual improvements in the English 
                proficiency of such students from the preceding fiscal 
                year and making adequate yearly progress with limited 
                English proficient students in the subject areas of 
                core content knowledge as described in section 111; and
                    ``(C) providing State educational agencies and 
                local educational agencies with the flexibility to 
                implement instructional programs based on scientific 
                research that the agencies believe to be the most 
                effective for teaching English.

``SEC. 3102. DEFINITIONS.

    ``Except as otherwise provided, for purposes of this part:
            ``(1) Limited english proficient student.--The term 
        `limited English proficient student' means an individual aged 5 
        through 17 enrolled in an elementary school or secondary 
        school--
                    ``(A) who--
                            ``(i) was not born in the United States or 
                        whose native language is a language other than 
                        English; or
                            ``(ii) is a Native American or Alaska 
                        Native, or who is a native resident of the 
                        outlying areas and comes from an environment 
                        where a language other than English has had a 
                        significant impact on such individual's level 
                        of English language proficiency; or
                            ``(iii) is migratory and whose native 
                        language is other than English, and who comes 
                        from an environment where a language other than 
                        English is dominant; and
                    ``(B) who has sufficient difficulty speaking, 
                reading, writing, or understanding the English 
                language, and whose difficulties may deny such 
                individual the opportunity to learn successfully in 
                classrooms where the language of instruction is English 
                or to participate fully in our society.
            ``(2) Proficient.--A student's skills in English are 
        sufficient to allow such student to attain the proficient level 
        of performance in content areas.
            ``(3) Language instruction educational program.--The term 
        `language instruction educational program' means an 
        instructional course in which a limited English proficient 
        student is placed for the purpose of becoming proficient in the 
        English language.
            ``(4) Specially qualified agency.--The term `specially 
        qualified agency' means a local educational agency in a State 
        that does not participate in a program under this part for a 
        fiscal year.
            ``(5) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.

``SEC. 3103. PROGRAM AUTHORIZED.

    ``(a) Grants Authorized.--The Secretary shall award grants, from 
allotments under subsection (b), to each State having a State plan 
approved under section 3105(c), to enable the State to help limited 
English proficient students become proficient in English.
    ``(b) Reservations and Allotments.--
            ``(1) Reservations.--From the amount appropriated under 
        section 3110 to carry out this part for each fiscal year, the 
        Secretary shall reserve--
                    ``(A) \1/2\ of 1 percent of such amount for 
                payments to the Secretary of the Interior for 
                activities approved by the Secretary, consistent with 
                this part, in schools operated or supported by the 
                Bureau of Indian Affairs, on the basis of their 
                respective needs for assistance under this part; and
                    ``(B) \1/2\ of 1 percent of such amount for 
                payments to outlying areas, to be allotted in 
                accordance with their respective needs as determined by 
                the Secretary, for activities, approved by the 
                Secretary, consistent with this part.
            ``(2) State allotments.--From the amount appropriated under 
        section 3110 for any of the fiscal years 2002 through 2006 that 
        remains after making reservations under paragraph (1), the 
        Secretary shall allot to each State having a State plan 
        approved under section 3105(c) an amount that bears the same 
        relationship to the remainder as the number of limited English 
        proficient students in the State bears to the number of limited 
        English proficient students in all States.
            ``(3) Data.--For the purpose of determining the number of 
        limited English proficient students in a State and in all 
        States for each fiscal year, the Secretary shall use data that 
        will yield the most accurate, up-to-date numbers of such 
        students, including--
                    ``(A) data available from the Bureau of the Census; 
                or
                    ``(B) data submitted to the Secretary by the States 
                to determine the number of limited English proficient 
                students in a State and in all States.
            ``(4) Hold-harmless amounts.--For fiscal year 2002, and for 
        each of the 4 succeeding fiscal years, notwithstanding 
        paragraph (2), the total amount allotted to each State under 
        this subsection shall be not less than 85 percent of the total 
        amount the State was allotted under parts A and B of title VII 
        (as such title was in effect on the day preceding the date of 
        enactment of the Public Education Reinvestment, Reinvention, 
        and Responsibility Act (Three R's)).
    ``(c) Direct Awards to Specially Qualified Agencies.--
            ``(1) Nonparticipating state.--If a State educational 
        agency for a fiscal year elects not to participate in a program 
        under this part, or does not have an application approved under 
        section 3105(c), a specially qualified agency in such State 
        desiring a grant under this part for the fiscal year shall 
        apply directly to the Secretary to receive a grant under this 
        subsection.
            ``(2) Direct awards.--The Secretary may award, on a 
        competitive basis, the amount the State educational agency is 
        eligible to receive under subsection (b)(2) directly to 
        specially qualified agencies in the State desiring a grant 
        under paragraph (1) and having an application approved under 
        section 3105(c).
            ``(3) Administrative funds.--A specially qualified agency 
        that receives a direct grant under this subsection may use not 
        more than 1 percent of the grant funds for the administrative 
        costs of carrying out this part in the first year the agency 
        receives a grant under this subsection and 0.5 percent for such 
        costs in the second and each succeeding such year.

``SEC. 3104. WITHIN-STATE ALLOCATIONS.

    ``(a) Grant Awards.--Each State educational agency receiving a 
grant under section 3103(a) shall use 95 percent of the grant funds to 
award subgrants, from allotments under subsection (b), to local 
educational agencies in the State to carry out the activities described 
in section 3107.
    ``(b) Allotment Formula.--Each State educational agency receiving a 
grant under this part shall award a grant to each local educational 
agency in the State having a plan approved under section 3106 in an 
amount that bears the same relationship to the amount of funds 
appropriated under section 3110 as the school-age population of limited 
English proficient students in schools served by the local educational 
agency bears to the school-age population of limited English proficient 
students in schools served by all local educational agencies in the 
State.
    ``(c) Reservations.--
            ``(1) State activities.--Each State educational agency 
        receiving a grant under this part may reserve not more than 5 
        percent of the grant funds to carry out activities described in 
        the State plan submitted under section 3105.
            ``(2) Administrative expenses.--From the amount reserved 
        under paragraph (1), a State educational agency may use not 
        more than 2 percent for the planning costs and administrative 
        costs of carrying out the activities described in the State 
        plan and providing grants to local educational agencies.

``SEC. 3105. STATE AND SPECIALLY QUALIFIED AGENCY PLAN.

    ``(a) Plan Required.--Each State educational agency and specially 
qualified agency desiring a grant under this part shall submit a plan 
to the Secretary at such time, in such manner and accompanied by such 
information as the Secretary may require.
    ``(b) Contents.--Each State plan submitted under subsection (a) 
shall--
            ``(1) describe how the State or specially qualified agency 
        will--
                    ``(A) establish rigorous standards and annual 
                benchmarks for English language development in each of 
                the domains of speaking, reading, writing, and 
                listening; for each domain there shall be at least 3 
                benchmarks of performance: not proficient, partially 
                proficient, and proficient;
                    ``(B) develop and implement a system of high-
                quality, annual assessments to measure the development 
                of English language proficiency in the domains of 
                speaking, listening, reading, and writing;
                    ``(C) develop annual performance benchmarks, based 
                on the English language development standards described 
                in subparagraph (A), to raise the level of English 
                proficiency of each limited English proficient student;
            ``(2) contain an assurance that the State educational 
        agency or specially qualified agency consulted with local 
        educational agencies, education-related community groups and 
        nonprofit organizations, parents, teachers, school 
        administrators, and English language instruction specialists, 
        in the setting of the performance benchmarks;
            ``(3) describe how--
                    ``(A) in the case of a State educational agency, 
                the State educational agency will hold local 
                educational agencies and elementary schools and 
                secondary schools accountable for--
                            ``(i) ensuring that each student enrolled 
                        in a program or classroom is making substantial 
                        and continuous progress in attaining English 
                        language proficiency in each of the
                            ``(ii) making adequate yearly progress with 
                        limited English proficient students in the 
                        subject areas of core content knowledge 
                        measured by the assessments required in section 
                        1111; and
            ``(B) in the case of a specially qualified agency, the 
        agency will hold elementary schools and secondary schools 
        accountable for ensuring that each student enrolled in a 
        program or classroom making substantial and continuous progress 
        in attaining English language proficiency in each of the 4 
        domains and making adequate yearly progress in the subject 
        areas of core content knowledge measure by the assessments 
        required by section 1111.
            ``(4) describe the activities for which assistance is 
        sought, and how the activities will increase the speed and 
        effectiveness with which students learn English;
            ``(5) in the case of a State educational agency, describe 
        how local educational agencies will be given the flexibility to 
        teach English--
                    ``(A) using language instruction curriculum that 
                through scientific research has been demonstrated to be 
                effective; and
                    ``(B) employing instructional methods and strategy 
                that the local educational agencies determine to be the 
                most effective; and
            ``(6) describe how--
                    ``(A) in the case of a State educational agency, 
                the State educational agency will provide technical 
                assistance to local educational agencies and elementary 
                schools and secondary schools for the purposes of 
                identifying and implementing English language 
                instruction educational programs and curricula that are 
                scientifically research based; and
                    ``(B) provide technical assistance to local 
                educational agencies and elementary and secondary 
                schools for the purposes of helping limited English 
                proficient students meet the same challenging State 
                content standards and challenging State student 
                performance standards expected of all children.
                    ``(C) in the case of a specially qualified agency, 
                the specially qualified agency will provide technical 
                assistance to elementary schools and secondary schools 
                served by the specially qualified agency for the 
                purposes of identifying and implementing English 
                language instruction educational programs and curricula 
                that are scientifically research based.
    ``(c) Approval.--The Secretary, using a peer review process, shall 
approve a State plan or a specially qualified agency plan if the plan 
meets the requirements of this section, and holds reasonable promise of 
achieving the purpose described in section 3101(c).
    ``(d) Duration of the Plan.--
            ``(1) In general.--Each State plan or specially qualified 
        agency plan shall--
                    ``(A) remain in effect for the duration of the 
                State's or specially qualified agency's participation 
                under this part; and;
                    ``(B) be periodically reviewed and revised by the 
                State or specially qualified agency, as necessary, to 
                reflect changes in the State's or specially qualified 
                agency's strategies and programs under this part.
            ``(2) Additional information.--If the State educational 
        agency or specially qualified agency makes significant changes 
        in its plan, such as the adoption of new performance objectives 
        or assessment measures, the State educational agency or 
        specially qualified agency shall submit such information to the 
        Secretary.
    ``(e) Consolidated Plan.--A State plan submitted under subsection 
(a) may be submitted as part of a consolidated plan under section 8302.
    ``(f) Secretary Assistance.--Pursuant to section 7004(a)(3), the 
Secretary shall provide assistance, if required, in the development of 
English language development standards and English language proficiency 
assessments.

``SEC. 3106. LOCAL PLANS.

    ``(a) Plan Required.--Each local educational agency desiring a 
grant from the State educational agency under section 3104(a) shall 
submit a plan to the State educational agency at such time, in such 
manner, and accompanied by such information as the State educational 
agency may require.
    ``(b) Contents.--Each local educational agency plan submitted under 
subsection (a) shall--
            ``(1) describe how the local educational agency shall use 
        the grant funds to meet the English proficiency performance 
        objectives described in section 3109;
            ``(2) describe how the local educational agency will hold 
        elementary schools and secondary schools accountable for 
        meeting the performance objectives;
            ``(3) describe how the local educational agency will hold 
        elementary and secondary schools accountable for making 
        adequate yearly progress with limited English proficient 
        students in the subject areas of core content knowledge as 
        described in section 1111.
            ``(4) contain an assurance that the local educational 
        agency consulted with elementary schools and secondary schools, 
        education-related community groups and nonprofit organizations, 
        institutions of higher education, parents, language instruction 
        teachers, school administrators, and English language 
        instruction specialists, in developing the local educational 
        agency plan; and
            ``(5) contain an assurance that the local educational 
        agency will use the disaggregated results of the student 
        assessments required under section 1111(b)(4), and other 
        measures or indicators available to the agency, to review 
        annually the progress of each school served by the agency under 
        this part and under title I to determine whether the schools 
        are making the annual progress necessary to ensure that limited 
        English proficient students attending the schools will meet the 
        proficient State content and student performance standard 
        within 10 years of enactment of the Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three R's).

``SEC. 3107. USES OF FUNDS.

    ``(a) Administrative Expenses.--Each local educational agency 
receiving a grant under section 3104 may use not more than 1 percent of 
the grant funds for any fiscal year for the cost of administering this 
part.
    ``(b) Activities.--Each local educational agency receiving grant 
funds under section 3104 shall use the grant funds that are not used 
under subsection (a)--
            ``(1) to increase limited English proficient students' 
        proficiency in English and academic achievement by developing 
        and implementing English language and academic content 
        instructional programs for children served under this part that 
        are--
                    ``(A) tied to scientifically based research 
                demonstrating the effectiveness of the programs; and
                    ``(B) approved by the State educational agency;
            ``(2) to provide high-quality professional development 
        activities for teachers of limited English proficient students 
        that are--
                    ``(A) designed to enhance the ability of such 
                teachers to understand and use curricula, assessment 
                measures, and instructional strategies for limited 
                English proficient students;
                    ``(B) tied to scientifically based research 
                demonstrating the effectiveness of such programs in 
                increasing students' English proficiency or 
                substantially increasing the knowledge and teaching 
                skills of such teachers; and
                    ``(C) of sufficient intensity and duration (such as 
                not to include 1-day or short-term workshops and 
                conferences) to have a positive and lasting impact on 
                the teacher's performance in the classroom, except that 
                this paragraph shall not apply to an activity that is 1 
                component of a long-term, comprehensive professional 
                development plan established by a teacher and the 
                teacher's supervisor based upon an assessment of the 
                teacher's and supervisor's needs, the student's needs, 
                and the needs of the local educational agency;
            ``(3) to identify, acquire, and upgrade curricula, 
        instructional materials, educational software, and assessment 
        procedures; and
            ``(4) to provide parent and community participation 
        programs to improve English language instruction programs for 
        limited English proficient students.

``SEC. 3108. PROGRAM REQUIREMENTS.

    ``(a) Prohibition.--In carrying out this part the Secretary shall 
neither mandate nor preclude a particular curricular or pedagogical 
approach to educating limited English proficient students.
    ``(b) Teacher English Fluency.--Each local educational agency 
receiving grant funds under section 3104 shall certify to the State 
educational agency that all teachers in any language instruction 
program for limited English proficient students funded under this part 
are fluent in English.

``SEC. 3109. PERFORMANCE OBJECTIVES.

    ``(a) In General.--Each State educational agency or specifically 
qualified agency receiving a grant under this part shall develop annual 
numerical performance objectives with respect to helping limited 
English proficient students become proficient in English. The 
objectives shall include incremental percentage increases for each 
fiscal year a State receives a grant under this part, including 
increases in the number of limited English proficient students 
demonstrating an increase in performance on annual assessments in 
reading, writing, speaking, and listening comprehension, from the 
preceding fiscal year.
    ``(b) Accountability.--Each State educational agency or specially 
qualified agency receiving a grant under this part shall be held 
accountable for meeting the annual numerical performance objectives 
under this part and the adequate yearly progress levels for limited 
English proficient students under section 1111(b)(2)(B)(iv) and (vii). 
Any State educational agency or specially qualified agency that fails 
to meet the annual performance objectives shall be subject to sanctions 
under section 7001.

``SEC. 3110. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$1,000,000,000 for fiscal year 2002, and such sums as may be necessary 
for each of the 4 succeeding fiscal years.

``SEC. 3111. REGULATIONS AND NOTIFICATION.

    ``(a) Regulation Rule.--In developing regulations under this part, 
the Secretary shall consult with State educational agencies, local 
educational agencies, organizations representing limited English 
proficient individuals, and organizations representing teachers and 
other personnel involved in the education of limited English proficient 
students.
    ``(b) Parental Notification.--
            ``(1) In general.--Each local educational agency shall 
        notify parents of a student participating in a language 
        instruction educational program under this part of--
                    ``(A) the student's level of English proficiency, 
                how such level was assessed, the status of the 
                student's academic achievement, and the implications of 
                the student's educational strengths and needs for age- 
                and grade-appropriate academic attainment, promotion, 
                and graduation;
                    ``(B) what programs are available to meet the 
                student's educational strengths and needs, and how such 
                programs differ in content and instructional goals from 
                other language instruction educational programs and, in 
                the case of a student with a disability, how such 
                program meets the objectives of the individualized 
                education program of such a student; and
                    ``(C) the instructional goals of the language 
                instruction educational program, and how the program 
                will specifically help the limited English proficient 
                student learn English and meet age-appropriate 
                standards for grade promotion and graduation, 
                including--
                            ``(i) the characteristics, benefits, and 
                        past academic results of the language 
                        instruction educational program and of 
                        instructional alternatives; and
                            ``(ii) the reasons the student was 
                        identified as being in need of a language 
                        instruction educational program.
            ``(2) Option to decline.--
                    ``(A) In general.--Each parent described in 
                paragraph (1) shall also be informed that the parent 
                has the option of declining the enrollment of their 
                children or youth in a language instruction educational 
                program, and shall be given an opportunity to decline 
                such enrollment if the parent so chooses.
                    ``(B) Obligations.--A local educational agency 
                shall not be relieved of any of the agency's 
                obligations under title VI of the Civil Rights Act of 
                1964 (42 U.S.C. 2000d et seq.) if a parent chooses not 
                to enroll their child in a language instruction 
                educational program.
            ``(3) Receipt of information.--A parent described in 
        paragraph (1) shall receive, in a manner and form 
        understandable to the parent including, if necessary and to the 
        extent feasible, in the native language of the parent, the 
        information required by this subsection. At a minimum, the 
        parent shall receive--
                    ``(A) timely information about projects funded 
                under this part; and
                    ``(B) if the parent of a participating child so 
                desires, notice of opportunities for regular meetings 
                for the purpose of formulating and responding to 
                recommendations from parents of children assisted under 
                this part.
            ``(4) Special rule.--A student shall not be admitted to, or 
        excluded from, any Federally assisted language instruction 
        educational program solely on the basis of a surname or 
        language-minority status.
            ``(5) Limitations on conditions.--Nothing in this part 
        shall be construed to authorize an officer or employee of the 
        Federal Government to mandate, direct, or control a State's, 
        local educational agency's, elementary school's, or secondary 
        school's specific challenging English language development 
        standards or assessments, curricula, or program of instruction, 
        as a condition of eligibility to receive grant funds under this 
        part.''.

SEC. 302. EMERGENCY IMMIGRANT EDUCATION PROGRAM.

    (a) Repeals, Transfers, and Redesignations.--Title III (20 U.S.C. 
6801 et seq.) is further amended--
            (1) by repealing part B (20 U.S.C. 6891 et seq.), part C 
        (20 U.S.C. 6921 et seq.), part D (20 U.S.C. 6951 et seq.), and 
        part E (20 U.S.C. 6971 et seq.);
            (2) by transferring part C of title VII (20 U.S.C. 7541 et 
        seq.) to title III and inserting such part after part A (as 
        inserted by section 301(3));
            (3) by redesignating the heading for part C of title VII 
        (as transferred by paragraph (2)) as the heading for part B, 
        and redesignating accordingly the references to such part C as 
        the references to such part B; and
            (4) by redesignating section 7301 through 7309 (20 U.S.C. 
        7541, 7549) (as transferred by paragraph (2)) as sections 3201 
        through 3209, respectively, and redesignating accordingly the 
        references to such sections.
    (b) Amendments.--Part B of title III (as so transferred and 
redesignated) is amended--
            (1) in section 3205(a)(2) (as redesignated by subsection 
        (a)(4)), by striking ``the Goals 2000: Educate America Act,''; 
        and
            (2) in section 3209 (as redesignated by subsection (a)(4)), 
        by striking ``$175,000,000'' and all that follows through 
        ``necessary for'' and inserting ``such sums as may be necessary 
        for fiscal year 2002 and''.

SEC. 303. INDIAN, NATIVE HAWAIIAN, AND ALASKA NATIVE EDUCATION.

    (a) Elementary and Secondary Education Act of 1965.--
            (1) Indian education.--Part A of title IX (20 U.S.C. 7801 
        et seq.) is amended to read as follows:

                       ``PART A--INDIAN EDUCATION

``SEC. 9101. FINDINGS.

    ``Congress finds that--
            ``(1) the Federal Government has a special responsibility 
        to ensure that educational programs for all American Indian and 
        Alaska Native children and adults--
                    ``(A) are based on high-quality, internationally 
                competitive content standards and student performance 
                standards and build on Indian culture and the Indian 
                community;
                    ``(B) assist local educational agencies, Indian 
                tribes, and other entities and individuals in providing 
                Indian students the opportunity to achieve such 
                standards; and
                    ``(C) meet the unique educational and culturally 
                related academic needs of American Indian and Alaska 
                Native students;
            ``(2) since the date of the enactment of the initial Indian 
        Education Act in 1972, the level of involvement of Indian 
        parents in the planning, development, and implementation of 
        educational programs that affect such parents and their 
        children has increased significantly, and schools should 
        continue to foster such involvement;
            ``(3) although the number of Indian teachers, 
        administrators, and university professors has increased since 
        1972, teacher training programs are not recruiting, training, 
        or retraining a sufficient number of Indian individuals as 
        educators to meet the needs of a growing Indian student 
        population in elementary, secondary, vocational, adult, and 
        higher education;
            ``(4) the dropout rate for Indian students is unacceptably 
        high; 9 percent of Indian students who were eighth graders in 
        1988 had dropped out of school by 1990;
            ``(5) during the period from 1980 to 1990, the percentage 
        of Indian individuals living at or below the poverty level 
        increased from 24 percent to 31 percent, and the readiness of 
        Indian children to learn is hampered by the high incidence of 
        poverty, unemployment, and health problems among Indian 
        children and their families; and
            ``(6) research related specifically to the education of 
        Indian children and adults is very limited, and much of the 
        research is of poor quality or is focused on limited local or 
        regional issues.

``SEC. 9102. PURPOSE.

    ``(a) Purpose.--It is the purpose of this part to support the 
efforts of local educational agencies, Indian tribes and organizations, 
postsecondary institutions, and other entities to meet the unique 
educational and culturally related academic needs of American Indians 
and Alaska Natives, so that such students can achieve to the same 
challenging State performance standards expected of all other students.
    ``(b) Programs.--This part carries out the purpose described in 
subsection (a) by authorizing programs of direct assistance for--
            ``(1) meeting the unique educational and culturally related 
        academic needs of American Indians and Alaska Natives;
            ``(2) the education of Indian children and adults;
            ``(3) the training of Indian persons as educators and 
        counselors, and in other professions serving Indian people; and
            ``(4) research, evaluation, data collection, and technical 
        assistance.

       ``Subpart 1--Formula Grants to Local Educational Agencies

``SEC. 9111. PURPOSE.

    ``It is the purpose of this subpart to support local educational 
agencies in their efforts to reform elementary and secondary school 
programs that serve Indian students in order to ensure that such 
programs--
            ``(1) are based on challenging State content standards and 
        State student performance standards that are used for all 
        students; and
            ``(2) are designed to assist Indian students in meeting 
        those standards and assist the Nation in reaching the National 
        Education Goals.

``SEC. 9112. GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    ``(a) In General.--
            ``(1) Enrollment requirements.--A local educational agency 
        shall be eligible for a grant under this subpart for any fiscal 
        year if the number of Indian children eligible under section 
        9117 and who were enrolled in the schools of the agency, and to 
        whom the agency provided free public education, during the 
        preceding fiscal year--
                    ``(A) was at least 10; or
                    ``(B) constituted not less than 25 percent of the 
                total number of individuals enrolled in the schools of 
                such agency.
            ``(2) Exclusion.--The requirement of paragraph (1) shall 
        not apply in Alaska, California, or Oklahoma, or with respect 
        to any local educational agency located on, or in proximity to, 
        a reservation.
    ``(b) Indian Tribes.--
            ``(1) In general.--If a local educational agency that is 
        eligible for a grant under this subpart does not establish a 
        parent committee under section 9114(c)(4) for such grant, an 
        Indian tribe that represents not less than one-half of the 
        eligible Indian children who are served by such local 
        educational agency may apply for such grant.
            ``(2) Special rule.--The Secretary shall treat each Indian 
        tribe applying for a grant pursuant to paragraph (1) as if such 
        Indian tribe were a local educational agency for purposes of 
        this subpart, except that any such tribe is not subject to 
        section 9114(c)(4), section 9118(c), or section 9119.

``SEC. 9113. AMOUNT OF GRANTS.

    ``(a) Amount of Grant Awards.--
            ``(1) In general.--Except as provided in subsection (b) and 
        paragraph (2), the Secretary shall allocate to each local 
        educational agency which has an approved application under this 
        subpart an amount equal to the product of--
                    ``(A) the number of Indian children who are 
                eligible under section 9117 and served by such agency; 
                and
                    ``(B) the greater of--
                            ``(i) the average per-pupil expenditure of 
                        the State in which such agency is located; or
                            ``(ii) 80 percent of the average per-pupil 
                        expenditure in the United States.
            ``(2) Reduction.--The Secretary shall reduce the amount of 
        each allocation determined under paragraph (1) in accordance 
        with subsection (e).
    ``(b) Minimum Grant.--
            ``(1) In general.--Notwithstanding subsection (e), a local 
        educational agency or an Indian tribe (as authorized under 
        section 9112(b)) that is eligible for a grant under section 
        9112, and a school that is operated or supported by the Bureau 
        of Indian Affairs that is eligible for a grant under subsection 
        (d), that submits an application that is approved by the 
        Secretary, shall, subject to appropriations, receive a grant 
        under this subpart in an amount that is not less than $3,000.
            ``(2) Consortia.--Local educational agencies may form a 
        consortium for the purpose of obtaining grants under this 
        subpart.
            ``(3) Increase.--The Secretary may increase the minimum 
        grant under paragraph (1) to not more than $4,000 for all 
        grantees if the Secretary determines such increase is necessary 
        to ensure the quality of the programs provided.
    ``(c) Definition.--For the purpose of this section, the term 
`average per-pupil expenditure of a State' means an amount equal to--
            ``(1) the sum of the aggregate current expenditures of all 
        the local educational agencies in the State, plus any direct 
        current expenditures by the State for the operation of such 
        agencies, without regard to the sources of funds from which 
        such local or State expenditures were made, during the second 
        fiscal year preceding the fiscal year for which the computation 
        is made; divided by
            ``(2) the aggregate number of children who were included in 
        average daily attendance for whom such agencies provided free 
        public education during such preceding fiscal year.
    ``(d) Schools Operated or Supported by the Bureau of Indian 
Affairs.--(1) Subject to subsection (e), in addition to the grants 
awarded under subsection (a), the Secretary shall allocate to the 
Secretary of the Interior an amount equal to the product of--
            ``(A) the total number of Indian children enrolled in 
        schools that are operated by--
                    ``(i) the Bureau of Indian Affairs; or
                    ``(ii) an Indian tribe, or an organization 
                controlled or sanctioned by an Indian tribal 
                government, for the children of that tribe under a 
                contract with, or grant from, the Department of the 
                Interior under the Indian Self-Determination Act or the 
                Tribally Controlled Schools Act of 1988; and
            ``(B) the greater of--
                    ``(i) the average per-pupil expenditure of the 
                State in which the school is located; or
                    ``(ii) 80 percent of the average per-pupil 
                expenditure in the United States.
    ``(2) Any school described in paragraph (1)(A) that wishes to 
receive an allocation under this subpart shall submit an application in 
accordance with section 9114, and shall otherwise be treated as a local 
educational agency for the purpose of this subpart, except that such 
school shall not be subject to section 9114(c)(4), section 9118(c), or 
section 9119.
    ``(e) Ratable Reductions.--If the sums appropriated for any fiscal 
year under section 9162(a) are insufficient to pay in full the amounts 
determined for local educational agencies under subsection (a)(1) and 
for the Secretary of the Interior under subsection (d), each of those 
amounts shall be ratably reduced.

``SEC. 9114. APPLICATIONS.

    ``(a) Application Required.--Each local educational agency that 
desires to receive a grant under this subpart shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may reasonably require.
    ``(b) Comprehensive Program Required.--Each application submitted 
under subsection (a) shall include a comprehensive program for meeting 
the needs of Indian children served by the local educational agency, 
including the language and cultural needs of the children, that--
            ``(1) provides programs and activities to meet the 
        culturally related academic needs of American Indian and Alaska 
        Native students;
            ``(2)(A) is consistent with State and local plans under 
        other provisions of this Act; and
            ``(B) includes academic content and student performance 
        goals for such children, and benchmarks for attaining such 
        goals, that are based on the challenging State standards under 
        title I;
            ``(3) explains how Federal, State, and local programs, 
        especially under title I, will meet the needs of such students;
            ``(4) demonstrates how funds made available under this 
        subpart will be used for activities described in section 9115;
            ``(5) describes the professional development opportunities 
        that will be provided, as needed, to ensure that--
                    ``(A) teachers and other school professionals who 
                are new to the Indian community are prepared to work 
                with Indian children; and
                    ``(B) all teachers who will be involved in programs 
                assisted under this subpart have been properly trained 
                to carry out such programs; and
            ``(6) describes how the local educational agency--
                    ``(A) will periodically assess the progress of all 
                Indian children enrolled in the schools of the local 
                educational agency, including Indian children who do 
                not participate in programs assisted under this 
                subpart, in meeting the goals described in paragraph 
                (2);
                    ``(B) will provide the results of each assessment 
                referred to in subparagraph (A) to--
                            ``(i) the committee of parents described in 
                        subsection (c)(4); and
                            ``(ii) the community served by the local 
                        educational agency; and
                    ``(C) is responding to findings of any previous 
                assessments that are similar to the assessments 
                described in subparagraph (A).
    ``(c) Assurances.--Each application submitted under subsection (a) 
shall include assurances that--
            ``(1) the local educational agency will use funds received 
        under this subpart only to supplement the level of funds that, 
        in the absence of the Federal funds made available under this 
        subpart, such agency would make available for the education of 
        Indian children, and not to supplant such funds;
            ``(2) the local educational agency will submit such reports 
        to the Secretary, in such form and containing such information, 
        as the Secretary may require to--
                    ``(A) carry out the functions of the Secretary 
                under this subpart; and
                    ``(B) determine the extent to which funds provided 
                to the local educational agency under this subpart are 
                effective in improving the educational achievement of 
                Indian students served by such agency;
            ``(3) the program for which assistance is sought--
                    ``(A) is based on a comprehensive local assessment 
                and prioritization of the unique educational and 
                culturally related academic needs of the American 
                Indian and Alaska Native students to whom the local 
                educational agency is providing an education;
                    ``(B) will use the best available talents and 
                resources, including individuals from the Indian 
                community; and
                    ``(C) was developed by such agency in open 
                consultation with parents of Indian children and 
                teachers, and, if appropriate, Indian students from 
                secondary schools, including public hearings held by 
                such agency to provide the individuals described in 
                this subparagraph a full opportunity to understand the 
                program and to offer recommendations regarding the 
                program; and
            ``(4) the local educational agency developed the program 
        with the participation and written approval of a committee--
                    ``(A) that is composed of, and selected by--
                            ``(i) parents of Indian children in the 
                        local educational agency's schools and 
                        teachers; and
                            ``(ii) if appropriate, Indian students 
                        attending secondary schools;
                    ``(B) a majority of whose members are parents of 
                Indian children;
                    ``(C) that sets forth such policies and procedures, 
                including policies and procedures relating to the 
                hiring of personnel, as will ensure that the program 
                for which assistance is sought will be operated and 
                evaluated in consultation with, and with the 
                involvement of, parents of the children, and 
                representatives of the area, to be served;
                    ``(D) with respect to an application describing a 
                schoolwide program in accordance with section 9115(c), 
                has--
                            ``(i) reviewed in a timely fashion the 
                        program; and
                            ``(ii) determined that the program will not 
                        diminish the availability of culturally related 
                        activities for American Indian and Alaskan 
                        Native students; and
                    ``(E) has adopted reasonable bylaws for the conduct 
                of the activities of the committee and abides by such 
                bylaws.

``SEC. 9115. AUTHORIZED SERVICES AND ACTIVITIES.

    ``(a) General Requirements.--Each local educational agency that 
receives a grant under this subpart shall use the grant funds, in a 
manner consistent with the purpose specified in section 9111, for 
services and activities that--
            ``(1) are designed to carry out the comprehensive program 
        of the local educational agency for Indian students, and 
        described in the application of the local educational agency 
        submitted to the Secretary under section 9114(b);
            ``(2) are designed with special regard for the language and 
        cultural needs of the Indian students; and
            ``(3) supplement and enrich the regular school program of 
        such agency.
    ``(b) Particular Activities.--The services and activities referred 
to in subsection (a) may include--
            ``(1) culturally related activities that support the 
        program described in the application submitted by the local 
        educational agency;
            ``(2) early childhood and family programs that emphasize 
        school readiness;
            ``(3) enrichment programs that focus on problem solving and 
        cognitive skills development and directly support the 
        attainment of challenging State content standards and State 
        student performance standards;
            ``(4) integrated educational services in combination with 
        other programs that meet the needs of Indian children and their 
        families;
            ``(5) career preparation activities to enable Indian 
        students to participate in programs such as the programs 
        supported by the Carl D. Perkins Vocational and Technical 
        Education Act of 1998, including programs for tech-prep, 
        mentoring, and apprenticeship;
            ``(6) activities to educate individuals concerning 
        substance abuse and to prevent substance abuse;
            ``(7) the acquisition of equipment, but only if the 
        acquisition of the equipment is essential to meet the purposes 
        described in section 9111; and
            ``(8) family literacy services.
    ``(c) Schoolwide Programs.--Notwithstanding any other provision of 
law, a local educational agency may use funds made available to such 
agency under this subpart to support a schoolwide program under section 
1114 if--
            ``(1) the committee composed of parents established 
        pursuant to section 9114(c)(4) approves the use of the funds 
        for the schoolwide program; and
            ``(2) the schoolwide program is consistent with the 
        purposes described in section 9111.
    ``(d) Limitation on Administrative Costs.--Not more than 5 percent 
of the funds provided to a grantee under this subpart for any fiscal 
year may be used for administrative purposes.

``SEC. 9116. INTEGRATION OF SERVICES AUTHORIZED.

    ``(a) Plan.--An entity receiving funds under this subpart may 
submit a plan to the Secretary for the integration of education and 
related services provided to Indian students.
    ``(b) Coordination of Programs.--Upon the receipt of an acceptable 
plan, the Secretary, in cooperation with each Federal agency providing 
grants for the provision of education and related services to the 
applicant, shall authorize the applicant to coordinate, in accordance 
with such plan, its federally funded education and related services 
programs, or portions thereof, serving Indian students in a manner that 
integrates the program services involved into a single, coordinated, 
comprehensive program and reduces administrative costs by consolidating 
administrative functions.
    ``(c) Programs Affected.--The funds that may be consolidated in a 
demonstration project under any such plan referred to in subsection (b) 
shall include funds for any Federal program exclusively serving Indian 
children or the funds reserved under any program to exclusively serve 
Indian children under which the applicant is eligible for receipt of 
funds under a statutory or administrative formula for the purposes of 
providing education and related services which would be used to serve 
Indian students.
    ``(d) Plan Requirements.--For a plan to be acceptable pursuant to 
subsection (b), it shall--
            ``(1) identify the programs or funding sources to be 
        consolidated;
            ``(2) be consistent with the purposes of this section 
        authorizing the services to be integrated in a demonstration 
        project;
            ``(3) describe a comprehensive strategy which identifies 
        the full range of potential educational opportunities and 
        related services to be provided to assist Indian students to 
        achieve the goals set forth in this subpart;
            ``(4) describe the way in which services are to be 
        integrated and delivered and the results expected from the 
        plan;
            ``(5) identify the projected expenditures under the plan in 
        a single budget;
            ``(6) identify the local, State, or tribal agency or 
        agencies to be involved in the delivery of the services 
        integrated under the plan;
            ``(7) identify any statutory provisions, regulations, 
        policies, or procedures that the applicant believes need to be 
        waived in order to implement its plan;
            ``(8) set forth measures of student achievement and 
        performance goals designed to be met within a specified period 
        of time; and
            ``(9) be approved by a parent committee formed in 
        accordance with section 9114(c)(4), if such a committee exists.
    ``(e) Plan Review.--Upon receipt of the plan from an eligible 
entity, the Secretary shall consult with the Secretary of each Federal 
department providing funds to be used to implement the plan, and with 
the entity submitting the plan. The parties so consulting shall 
identify any waivers of statutory requirements or of Federal 
departmental regulations, policies, or procedures necessary to enable 
the applicant to implement its plan. Notwithstanding any other 
provision of law, the Secretary of the affected department or 
departments shall have the authority to waive any regulation, policy, 
or procedure promulgated by that department that has been so identified 
by the applicant or department, unless the Secretary of the affected 
department determines that such a waiver is inconsistent with the 
intent of this subpart or those provisions of the statute from which 
the program involved derives its authority which are specifically 
applicable to Indian students.
    ``(f) Plan Approval.--Within 90 days after the receipt of an 
applicant's plan by the Secretary, the Secretary shall inform the 
applicant, in writing, of the Secretary's approval or disapproval of 
the plan. If the plan is disapproved, the applicant shall be informed, 
in writing, of the reasons for the disapproval and shall be given an 
opportunity to amend its plan or to petition the Secretary to 
reconsider such disapproval.
    ``(g) Responsibilities of Department of Education.--Not later than 
180 days after the date of the enactment of the Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's), the 
Secretary of Education, the Secretary of the Interior, and the head of 
any other Federal department or agency identified by the Secretary of 
Education, shall enter into an interdepartmental memorandum of 
agreement providing for the implementation of the demonstration 
projects authorized under this section. The lead agency head for a 
demonstration program under this section shall be--
            ``(1) the Secretary of the Interior, in the case of 
        applicant meeting the definition of contract or grant school 
        under title XI of the Education Amendments of 1978; or
            ``(2) the Secretary of Education, in the case of any other 
        applicant.
    ``(h) Responsibilities of Lead Agency.--The responsibilities of the 
lead agency shall include--
            ``(1) the use of a single report format related to the plan 
        for the individual project which shall be used by an eligible 
        entity to report on the activities undertaken under the 
        project;
            ``(2) the use of a single report format related to the 
        projected expenditures for the individual project which shall 
        be used by an eligible entity to report on all project 
        expenditures;
            ``(3) the development of a single system of Federal 
        oversight for the project, which shall be implemented by the 
        lead agency; and
            ``(4) the provision of technical assistance to an eligible 
        entity appropriate to the project, except that an eligible 
        entity shall have the authority to accept or reject the plan 
        for providing such technical assistance and the technical 
        assistance provider.
    ``(i) Report Requirements.--A single report format shall be 
developed by the Secretary, consistent with the requirements of this 
section. Such report format, together with records maintained on the 
consolidated program at the local level, shall contain such information 
as will allow a determination that the eligible entity has complied 
with the requirements incorporated in its approved plan, including the 
demonstration of student achievement, and will provide assurances to 
each Secretary that the eligible entity has complied with all directly 
applicable statutory requirements and with those directly applicable 
regulatory requirements which have not been waived.
    ``(j) No Reduction in Amounts.--In no case shall the amount of 
Federal funds available to an eligible entity involved in any 
demonstration project be reduced as a result of the enactment of this 
section.
    ``(k) Interagency Fund Transfers Authorized.--The Secretary is 
authorized to take such action as may be necessary to provide for an 
interagency transfer of funds otherwise available to an eligible entity 
in order to further the purposes of this section.
    ``(l) Administration of Funds.--
            ``(1) In general.--Program funds shall be administered in 
        such a manner as to allow for a determination that funds from 
        specific a program or programs are spent on allowable 
        activities authorized under such program, except that the 
        eligible entity shall determine the proportion of the funds 
        granted which shall be allocated to such program.
            ``(2) Separate records not required.--Nothing in this 
        section shall be construed as requiring the eligible entity to 
        maintain separate records tracing any services or activities 
        conducted under its approved plan to the individual programs 
        under which funds were authorized, nor shall the eligible 
        entity be required to allocate expenditures among such 
        individual programs.
    ``(m) Overage.--All administrative costs may be commingled and 
participating entities shall be entitled to the full amount of such 
costs (under each program or department's regulations), and no overage 
shall be counted for Federal audit purposes, provided that the overage 
is used for the purposes provided for under this section.
    ``(n) Fiscal Accountability.--Nothing in this part shall be 
construed so as to interfere with the ability of the Secretary or the 
lead agency to fulfill the responsibilities for the safeguarding of 
Federal funds pursuant to the Single Audit Act of 1984.
    ``(o) Report on Statutory Obstacles to Program Integration.--
            ``(1) Preliminary report.--Not later than 2 years after the 
        date of the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), the Secretary 
        of Education shall submit a preliminary report to the Committee 
        on Health, Education, Labor, and Pensions of the Senate and the 
        Committee on Education and the Workforce of the House of 
        Representatives on the status of the implementation of the 
        demonstration program authorized under this section.
            ``(2) Final report.--Not later than 5 years after the date 
        of the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), the Secretary 
        of Education shall submit a report to the Committee on Health, 
        Education, Labor, and Pensions of the Senate and the Committee 
        on Education and the Workforce of the House of Representatives 
        on the results of the implementation of the demonstration 
        program authorized under this section. Such report shall 
        identify statutory barriers to the ability of participants to 
        integrate more effectively their education and related services 
        to Indian students in a manner consistent with the purposes of 
        this section.
    ``(p) Definitions.--For the purposes of this section, the term 
`Secretary' means--
            ``(1) the Secretary of the Interior, in the case of 
        applicant meeting the definition of contract or grant school 
        under title XI of the Education Amendments of 1978; or
            ``(2) the Secretary of Education, in the case of any other 
        applicant.

``SEC. 9117. STUDENT ELIGIBILITY FORMS.

    ``(a) In General.--The Secretary shall require that, as part of an 
application for a grant under this subpart, each applicant shall 
maintain a file, with respect to each Indian child for whom the local 
educational agency provides a free public education, that contains a 
form that sets forth information establishing the status of the child 
as an Indian child eligible for assistance under this subpart and that 
otherwise meets the requirements of subsection (b).
    ``(b) Forms.--
            ``(1) In general.--The form described in subsection (a) 
        shall include--
                    ``(A) either--
                            ``(i)(I) the name of the tribe or band of 
                        Indians (as described in section 9161(3)) with 
                        respect to which the child claims membership;
                            ``(II) the enrollment number establishing 
                        the membership of the child (if readily 
                        available); and
                            ``(III) the name and address of the 
                        organization that maintains updated and 
                        accurate membership data for such tribe or band 
                        of Indians; or
                            ``(ii) if the child is not a member of a 
                        tribe or band of Indians, the name, the 
                        enrollment number (if readily available), and 
                        the organization (and address thereof) 
                        responsible for maintaining updated and 
                        accurate membership rolls of the tribe of any 
                        parent or grandparent of the child from whom 
                        the child claims eligibility;
                    ``(B) a statement of whether the tribe or band of 
                Indians with respect to which the child, parent, or 
                grandparent of the child claims membership is federally 
                recognized;
                    ``(C) the name and address of the parent or legal 
                guardian of the child;
                    ``(D) a signature of the parent or legal guardian 
                of the child that verifies the accuracy of the 
                information supplied; and
                    ``(E) any other information that the Secretary 
                considers necessary to provide an accurate program 
                profile.
            ``(2) Minimum information.--In order for a child to be 
        eligible to be counted for the purpose of computing the amount 
        of a grant award made under section 9113, an eligibility form 
        prepared pursuant to this section for a child shall include--
                    ``(A) the name of the child;
                    ``(B) the name of the tribe or band of Indians (as 
                described in section 9161(3)) with respect to which the 
                child claims eligibility; and
                    ``(C) the dated signature of the parent or guardian 
                of the child.
            ``(3) Failure.--The failure of an applicant to furnish any 
        information described in this subsection other than the 
        information described in paragraph (2) with respect to any 
        child shall have no bearing on the determination of whether the 
        child is an eligible Indian child for the purposes of 
        determining the amount of a grant award made under section 
        9113.
    ``(c) Statutory Construction.--Nothing in this section shall be 
construed to affect a definition contained in section 9161.
    ``(d) Forms and Standards of Proof.--The forms and the standards of 
proof (including the standard of good faith compliance) that were in 
use during the 1985-1986 academic year to establish the eligibility of 
a child for entitlement under the Indian Elementary and Secondary 
School Assistance Act shall be the forms and standards of proof used--
            ``(1) to establish such eligibility; and
            ``(2) to meet the requirements of subsection (a).
    ``(e) Documentation.--For purposes of determining whether a child 
is eligible to be counted for the purpose of computing the amount of a 
grant under section 9113, the membership of the child, or any parent or 
grandparent of the child, in a tribe or band of Indians may be 
established by proof other than an enrollment number, notwithstanding 
the availability of an enrollment number for a member of such tribe or 
band. Nothing in subsection (b) shall be construed to require the 
furnishing of an enrollment number.
    ``(f) Monitoring and Evaluation Review.--
            ``(1) In general.--(A) For each fiscal year, in order to 
        provide such information as is necessary to carry out the 
        responsibility of the Secretary to provide technical assistance 
        under this subpart, the Secretary shall conduct a monitoring 
        and evaluation review of a sampling of the recipients of grants 
        under this subpart. The sampling conducted under this 
        subparagraph shall take into account the size of the local 
        educational agency and the geographic location of such agency.
            ``(B) A local educational agency may not be held liable to 
        the United States or be subject to any penalty, by reason of 
        the findings of an audit that relates to the date of 
        completion, or the date of submission, of any forms used to 
        establish, before April 28, 1988, the eligibility of a child 
        for entitlement under the Indian Elementary and Secondary 
        School Assistance Act.
            ``(2) False information.--Any local educational agency that 
        provides false information in an application for a grant under 
        this subpart shall--
                    ``(A) be ineligible to apply for any other grant 
                under this part; and
                    ``(B) be liable to the United States for any funds 
                that have not been expended.
            ``(3) Excluded children.--A student who provides false 
        information for the form required under subsection (a) shall 
        not be counted for the purpose of computing the amount of a 
        grant under section 9113.
    ``(g) Tribal Grant and Contract Schools.--Notwithstanding any other 
provision of this section, in awarding funds under this subpart to a 
tribal school that receives a grant or contract from the Bureau of 
Indian Affairs, the Secretary shall use only one of the following, as 
selected by the school:
            ``(1) A count of the number of students in those schools 
        certified by the Bureau.
            ``(2) A count of the number of students for whom the school 
        has eligibility forms that comply with this section.
    ``(h) Timing of Child Counts.--For purposes of determining the 
number of children to be counted in calculating the amount of a local 
educational agency's grant under this subpart (other than in the case 
described in subsection (g)(1)), the local educational agency shall--
            ``(1) establish a date on, or a period not longer than 31 
        consecutive days during which, the agency counts those 
        children, so long as that date or period occurs before the 
        deadline established by the Secretary for submitting an 
        application under section 9114; and
            ``(2) determine that each such child was enrolled, and 
        receiving a free public education, in a school of the agency on 
        that date or during that period, as the case may be.

``SEC. 9118. PAYMENTS.

    ``(a) In General.--Subject to subsections (b) and (c), the 
Secretary shall pay to each local educational agency that submits an 
application that is approved by the Secretary under this subpart the 
amount determined under section 9113. The Secretary shall notify the 
local educational agency of the amount of the payment not later than 
June 1 of the year for which the Secretary makes the payment.
    ``(b) Payments Taken Into Account by the State.--The Secretary may 
not make a grant under this subpart to a local educational agency for a 
fiscal year if, for such fiscal year, the State in which the local 
educational agency is located takes into consideration payments made 
under this subpart in determining the eligibility of the local 
educational agency for State aid, or the amount of the State aid, with 
respect to the free public education of children during such fiscal 
year or the preceding fiscal year.
    ``(c) Reduction of Payment for Failure To Maintain Fiscal Effort.--
            ``(1) In general.--The Secretary may not pay a local 
        educational agency the full amount of a grant award determined 
        under section 9113 for any fiscal year unless the State 
        educational agency notifies the Secretary, and the Secretary 
        determines that, with respect to the provision of free public 
        education by the local educational agency for the preceding 
        fiscal year, the combined fiscal effort of the local 
        educational agency and the State, computed on either a per 
        student or aggregate expenditure basis, was not less than 90 
        percent of the amount of the combined fiscal effort, computed 
        on the same basis, for the second preceding fiscal year.
            ``(2) Failure to maintain effort.--If, for any fiscal year, 
        the Secretary determines that a local educational agency failed 
        to maintain the fiscal effort of such agency at the level 
        specified in paragraph (1), the Secretary shall--
                    ``(A) reduce the amount of the grant that would 
                otherwise be made to such agency under this subpart in 
                the exact proportion of such agency's failure to 
                maintain its fiscal effort at such level; and
                    ``(B) not use the reduced amount of the agency's 
                expenditures for the preceding year to determine 
                compliance with paragraph (1) for any succeeding fiscal 
                year, but shall use the amount of expenditures that 
                would have been required to comply with paragraph (1).
            ``(3) Waiver.--(A) The Secretary may waive the requirement 
        of paragraph (1), for not more than 1 year at a time, if the 
        Secretary determines that the failure to comply with such 
        requirement is due to exceptional or uncontrollable 
        circumstances, such as a natural disaster or a precipitous and 
        unforeseen decline in the agency's financial resources.
            ``(B) The Secretary shall not use the reduced amount of 
        such agency's expenditures for the fiscal year preceding the 
        fiscal year for which a waiver is granted to determine 
        compliance with paragraph (1) for any succeeding fiscal year, 
        but shall use the amount of expenditures that would have been 
        required to comply with paragraph (1) in the absence of the 
        waiver.
    ``(d) Reallocations.--The Secretary may reallocate, in a manner 
that the Secretary determines will best carry out the purpose of this 
subpart, any amounts that--
            ``(1) based on estimates made by local educational agencies 
        or other information, the Secretary determines will not be 
        needed by such agencies to carry out approved programs under 
        this subpart; or
            ``(2) otherwise become available for reallocation under 
        this subpart.

``SEC. 9119. STATE EDUCATIONAL AGENCY REVIEW.

    ``Before submitting an application to the Secretary under section 
9114, a local educational agency shall submit the application to the 
State educational agency, which may comment on such application. If the 
State educational agency comments on the application, it shall comment 
on all applications submitted by local educational agencies in the 
State and shall provide those comments to the respective local 
educational agencies, with an opportunity to respond.

   ``Subpart 2--Special Programs and Projects To Improve Educational 
                   Opportunities for Indian Children

``SEC. 9121. IMPROVEMENT OF EDUCATIONAL OPPORTUNITIES FOR INDIAN 
              CHILDREN.

    ``(a) Purpose.--
            ``(1) In general.--It is the purpose of this section to 
        support projects to develop, test, and demonstrate the 
        effectiveness of services and programs to improve educational 
        opportunities and achievement of Indian children.
            ``(2) Coordination.--The Secretary shall take such actions 
        as are necessary to achieve the coordination of activities 
        assisted under this subpart with--
                    ``(A) other programs funded under this Act; and
                    ``(B) other Federal programs operated for the 
                benefit of American Indian and Alaska Native children.
    ``(b) Eligible Entities.--For the purpose of this section, the term 
`eligible entity' means a State educational agency, local educational 
agency, Indian tribe, Indian organization, federally supported 
elementary and secondary school for Indian students, Indian 
institution, including an Indian institution of higher education, or a 
consortium of such institutions.
    ``(c) Grants Authorized.--
            ``(1) In general.--The Secretary shall award grants to 
        eligible entities to enable such entities to carry out 
        activities that meet the purpose specified in subsection 
        (a)(1), including--
                    ``(A) innovative programs related to the 
                educational needs of educationally disadvantaged 
                children;
                    ``(B) educational services that are not available 
                to such children in sufficient quantity or quality, 
                including remedial instruction, to raise the 
                achievement of Indian children in one or more of the 
                core academic subjects of English, mathematics, 
                science, foreign languages, art, history, and 
                geography;
                    ``(C) bilingual and bicultural programs and 
                projects;
                    ``(D) special health and nutrition services, and 
                other related activities, that address the unique 
                health, social, and psychological problems of Indian 
                children;
                    ``(E) special compensatory and other programs and 
                projects designed to assist and encourage Indian 
                children to enter, remain in, or reenter school, and to 
                increase the rate of secondary school graduation;
                    ``(F) comprehensive guidance, counseling, and 
                testing services;
                    ``(G) early childhood and kindergarten programs, 
                including family-based preschool programs that 
                emphasize school readiness and parental skills, and the 
                provision of services to Indian children with 
                disabilities;
                    ``(H) partnership projects between local 
                educational agencies and institutions of higher 
                education that allow secondary school students to 
                enroll in courses at the postsecondary level to aid 
                such students in the transition from secondary school 
                to postsecondary education;
                    ``(I) partnership projects between schools and 
                local businesses for career preparation programs 
                designed to provide Indian youth with the knowledge and 
                skills such youth need to make an effective transition 
                from school to a high-skill, high-wage career;
                    ``(J) programs designed to encourage and assist 
                Indian students to work toward, and gain entrance into, 
                an institution of higher education;
                    ``(K) family literacy services; or
                    ``(L) other services that meet the purpose 
                described in subsection (a)(1).
            ``(2) Professional development.--Professional development 
        of teaching professionals and paraprofessional may be a part of 
        any program assisted under this section.
    ``(d) Grant Requirements and Applications.--
            ``(1) Grant requirements.--(A) The Secretary may make 
        multiyear grants under this section for the planning, 
        development, pilot operation, or demonstration of any activity 
        described in subsection (c) for a period not to exceed 5 years.
            ``(B) In making multiyear grants under this section, the 
        Secretary shall give priority to applications that present a 
        plan for combining two or more of the activities described in 
        subsection (c) over a period of more than 1 year.
            ``(C) The Secretary shall make a grant payment to an 
        eligible entity after the initial year of the multiyear grant 
        only if the Secretary determines that the eligible entity has 
        made substantial progress in carrying out the activities 
        assisted under the grant in accordance with the application 
        submitted under paragraph (2) and any subsequent modifications 
        to such application.
            ``(D)(i) In addition to awarding the multiyear grants 
        described in subparagraph (A), the Secretary may award grants 
        to eligible entities for the dissemination of exemplary 
        materials or programs assisted under this section.
            ``(ii) The Secretary may award a dissemination grant under 
        this subparagraph if, prior to awarding the grant, the 
        Secretary determines that the material or program to be 
        disseminated has been adequately reviewed and has 
        demonstrated--
                    ``(I) educational merit; and
                    ``(II) the ability to be replicated.
            ``(2) Application.--(A) Any eligible entity that desires to 
        receive a grant under this section shall submit an application 
        to the Secretary at such time and in such manner as the 
        Secretary may require.
            ``(B) Each application submitted to the Secretary under 
        subparagraph (A), other than an application for a dissemination 
        grant under paragraph (1)(D), shall contain--
                    ``(i) a description of how parents of Indian 
                children and representatives of Indian tribes have 
                been, and will be, involved in developing and 
                implementing the activities for which assistance is 
                sought;
                    ``(ii) assurances that the applicant will 
                participate, at the request of the Secretary, in any 
                national evaluation of activities assisted under this 
                section;
                    ``(iii) information demonstrating that the proposed 
                program is either a research-based program (which may 
                be a research-based program that has been modified to 
                be culturally appropriate for the students who will be 
                served);
                    ``(iv) a description of how the applicant will 
                incorporate the proposed services into the ongoing 
                school program once the grant period is over; and
                    ``(v) such other assurances and information as the 
                Secretary may reasonably require.
    ``(e) Administrative Costs.--Not more than 5 percent of the funds 
provided to a grantee under this subpart for any fiscal year may be 
used for administrative purposes.

``SEC. 9122. PROFESSIONAL DEVELOPMENT FOR TEACHERS AND EDUCATION 
              PROFESSIONALS.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to increase the number of qualified Indian 
        individuals in teaching or other education professions that 
        serve Indian people;
            ``(2) to provide training to qualified Indian individuals 
        to enable such individuals to become teachers, administrators, 
        teacher aides, social workers, and ancillary educational 
        personnel; and
            ``(3) to improve the skills of qualified Indian individuals 
        who serve in the capacities described in paragraph (2).
    ``(b) Eligible Entities.--For the purpose of this section, the term 
`eligible entity' means--
            ``(1) an institution of higher education, including an 
        Indian institution of higher education;
            ``(2) a State or local educational agency, in consortium 
        with an institution of higher education; and
            ``(3) an Indian tribe or organization, in consortium with 
        an institution of higher education.
    ``(c) Program Authorized.--The Secretary is authorized to award 
grants to eligible entities having applications approved under this 
section to enable such entities to carry out the activities described 
in subsection (d).
    ``(d) Authorized Activities.--
            ``(1) In general.--Grant funds under this section shall be 
        used to provide support and training for Indian individuals in 
        a manner consistent with the purposes of this section. Such 
        activities may include but are not limited to, continuing 
        programs, symposia, workshops, conferences, and direct 
        financial support.
            ``(2) Special rules.--(A) For education personnel, the 
        training received pursuant to a grant under this section may be 
        inservice or preservice training.
            ``(B) For individuals who are being trained to enter any 
        field other than teaching, the training received pursuant to a 
        grant under this section shall be in a program that results in 
        a graduate degree.
    ``(e) Application.--Each eligible entity desiring a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner and accompanied by such information, as the Secretary 
may reasonably require.
    ``(f) Special Rule.--In making grants under this section, the 
Secretary--
            ``(1) shall consider the prior performance of the eligible 
        entity; and
            ``(2) may not limit eligibility to receive a grant under 
        this section on the basis of--
                    ``(A) the number of previous grants the Secretary 
                has awarded such entity; or
                    ``(B) the length of any period during which such 
                entity received such grants.
    ``(g) Grant Period.--Each grant under this section shall be awarded 
for a period of not more than 5 years.
    ``(h) Service Obligation.--
            ``(1) In general.--The Secretary shall require, by 
        regulation, that an individual who receives training pursuant 
        to a grant made under this section--
                    ``(A) perform work--
                            ``(i) related to the training received 
                        under this section; and
                            ``(ii) that benefits Indian people; or
                    ``(B) repay all or a prorated part of the 
                assistance received.
            ``(2) Reporting.--The Secretary shall establish, by 
        regulation, a reporting procedure under which a grant recipient 
        under this section shall, not later than 12 months after the 
        date of completion of the training, and periodically 
        thereafter, provide information concerning the compliance of 
        such recipient with the work requirement under paragraph (1).

               ``Subpart 3--National Research Activities

``SEC. 9141. NATIONAL ACTIVITIES.

    ``(a) Authorized Activities.--The Secretary may use funds made 
available under section 9162(b) for each fiscal year to--
            ``(1) conduct research related to effective approaches for 
        the education of Indian children and adults;
            ``(2) evaluate federally assisted education programs from 
        which Indian children and adults may benefit;
            ``(3) collect and analyze data on the educational status 
        and needs of Indians; and
            ``(4) carry out other activities that are consistent with 
        the purpose of this part.
    ``(b) Eligibility.--The Secretary may carry out any of the 
activities described in subsection (a) directly or through grants to, 
or contracts or cooperative agreements with Indian tribes, Indian 
organizations, State educational agencies, local educational agencies, 
institutions of higher education, including Indian institutions of 
higher education, and other public and private agencies and 
institutions.
    ``(c) Coordination.--Research activities supported under this 
section--
            ``(1) shall be carried out in consultation with the Office 
        of Educational Research and Improvement to assure that such 
        activities are coordinated with and enhance the research and 
        development activities supported by the Office; and
            ``(2) may include collaborative research activities which 
        are jointly funded and carried out by the Office of Indian 
        Education Programs and the Office of Educational Research and 
        Improvement.

                  ``Subpart 4--Federal Administration

``SEC. 9151. NATIONAL ADVISORY COUNCIL ON INDIAN EDUCATION.

    ``(a) Membership.--There is established a National Advisory Council 
on Indian Education (hereafter in this section referred to as the 
`Council'), which shall--
            ``(1) consist of 15 Indian members, who shall be appointed 
        by the President from lists of nominees furnished, from time-
        to-time, by Indian tribes and organizations; and
            ``(2) represent different geographic areas of the United 
        States.
    ``(b) Duties.--The Council shall--
            ``(1) advise the Secretary concerning the funding and 
        administration (including the development of regulations and 
        administrative policies and practices) of any program, 
        including any program established under this part--
                    ``(A) with respect to which the Secretary has 
                jurisdiction; and
                    ``(B)(i) that includes Indian children or adults as 
                participants; or
                    ``(ii) that may benefit Indian children or adults;
            ``(2) make recommendations to the Secretary for filling the 
        position of Director of Indian Education whenever a vacancy 
        occurs; and
            ``(3) submit to the Congress, not later than June 30 of 
        each year, a report on the activities of the Council, 
        including--
                    ``(A) any recommendations that the Council 
                considers appropriate for the improvement of Federal 
                education programs that include Indian children or 
                adults as participants, or that may benefit Indian 
                children or adults; and
                    ``(B) recommendations concerning the funding of any 
                program described in subparagraph (A).

``SEC. 9152. PEER REVIEW.

    ``The Secretary may use a peer review process to review 
applications submitted to the Secretary under subpart 2 or 3.

``SEC. 9153. PREFERENCE FOR INDIAN APPLICANTS.

    ``In making grants under subpart 2 or 3, the Secretary shall give a 
preference to Indian tribes, organizations, and institutions of higher 
education under any program with respect to which Indian tribes, 
organizations, and institutions are eligible to apply for grants.

``SEC. 9154. MINIMUM GRANT CRITERIA.

    ``The Secretary may not approve an application for a grant under 
subpart 2 unless the application is for a grant that is--
            ``(1) of sufficient size, scope, and quality to achieve the 
        purpose or objectives of such grant; and
            ``(2) based on relevant research findings.

       ``Subpart 5--Definitions; Authorizations of Appropriations

``SEC. 9161. DEFINITIONS.

    ``For the purposes of this part:
            ``(1) Adult.--The term `adult' means an individual who--
                    ``(A) has attained the age of 16 years; or
                    ``(B) has attained an age that is greater than the 
                age of compulsory school attendance under an applicable 
                State law.
            ``(2) Free public education.--The term `free public 
        education' means education that is--
                    ``(A) provided at public expense, under public 
                supervision and direction, and without tuition charge; 
                and
                    ``(B) provided as elementary or secondary education 
                in the applicable State or to preschool children.
            ``(3) Indian.--The term `Indian' means an individual who 
        is--
                    ``(A) a member of an Indian tribe or band, as 
                membership is defined by the tribe or band, including--
                            ``(i) any tribe or band terminated since 
                        1940; and
                            ``(ii) any tribe or band recognized by the 
                        State in which the tribe or band resides;
                    ``(B) a descendant, in the first or second degree, 
                of an individual described in subparagraph (A);
                    ``(C) considered by the Secretary of the Interior 
                to be an Indian for any purpose;
                    ``(D) an Eskimo, Aleut, or other Alaska Native; or
                    ``(E) a member of an organized Indian group that 
                received a grant under the Indian Education Act of 1988 
                as it was in effect the day preceding the date of the 
                enactment of the Improving America's Schools Act of 
                1994.

``SEC. 9162. AUTHORIZATIONS OF APPROPRIATIONS.

    ``(a) Subpart 1.--For the purpose of carrying out subpart 1 of this 
part, there are authorized to be appropriated $62,000,000 for fiscal 
year 2000, and such sums as may be necessary for each of fiscal years 
2001 through 2004.
    ``(b) Subparts 2 and 3.--For the purpose of carrying out subparts 2 
and 3 of this part, there are authorized to be appropriated $4,000,000 
for fiscal year 2000, and such sums as may be necessary for each of the 
fiscal years 2001 through 2004.''.
            (2) Native hawaiian education.--Part B of title IX (20 
        U.S.C. 7901 et seq.) is repealed.
            (3) Alaska native education.--Part C of title IX (20 U.S.C. 
        7931 et seq.) is amended--
                    (A) by repealing sections 9304 through 9306 and 
                inserting the following:

``SEC. 9304. PROGRAM AUTHORIZED.

    ``(a) General Authority.--
            ``(1) Program authorized.--The Secretary is authorized to 
        make grants to, or enter into contracts with, Alaska Native 
        organizations, educational entities with experience in 
        developing or operating Alaska Native programs or programs of 
        instruction conducted in Alaska Native languages, and consortia 
        of such organizations and entities to carry out programs that 
        meet the purpose of this part.
            ``(2) Permissible activities.--Programs under this part may 
        include--
                    ``(A) the development and implementation of plans, 
                methods, and strategies to improve the education of 
                Alaska Natives;
                    ``(B) the development of curricula and educational 
                programs that address the educational needs of Alaska 
                Native students, including--
                            ``(i) curriculum materials that reflect the 
                        cultural diversity or the contributions of 
                        Alaska Natives;
                            ``(ii) instructional programs that make use 
                        of Native Alaskan languages; and
                            ``(iii) networks that introduce successful 
                        programs, materials, and techniques to urban 
                        and rural schools;
                    ``(C) professional development activities for 
                educators, including--
                            ``(i) programs to prepare teachers to 
                        address the cultural diversity and unique needs 
                        of Alaska Native students;
                            ``(ii) in-service programs to improve the 
                        ability of teachers to meet the unique needs of 
                        Alaska Native students; and
                            ``(iii) recruiting and preparing teachers 
                        who are Alaska Natives, reside in communities 
                        with high concentrations of Alaska Native 
                        students, or are likely to succeed as teachers 
                        in isolated, rural communities and engage in 
                        cross-cultural instruction;
                    ``(D) the development and operation of home 
                instruction programs for Alaska Native preschool 
                children, the purpose of which is to ensure the active 
                involvement of parents in their children's education 
                from the earliest ages;
                    ``(E) family Literacy Services;
                    ``(F) the development and operation of student 
                enrichment programs in science and mathematics that--
                            ``(i) are designed to prepare Alaska Native 
                        students from rural areas, who are preparing to 
                        enter high school, to excel in science and 
                        math; and
                            ``(ii) provide appropriate support services 
                        to the families of such students that are 
                        needed to enable such students to benefit from 
                        the program;
                    ``(G) research and data collection activities to 
                determine the educational status and needs of Alaska 
                Native children and adults;
                    ``(H) other research and evaluation activities 
                related to programs under this part; and
                    ``(I) other activities, consistent with the 
                purposes of this part, to meet the educational needs of 
                Alaska Native children and adults.
            ``(3) Home instruction programs.--Home instruction programs 
        for Alaska Native preschool children under paragraph (2)(D) may 
        include--
                    ``(A) programs for parents and their infants, from 
                prenatal through age three;
                    ``(B) preschool programs; and
                    ``(C) training, education, and support for parents 
                in such areas as reading readiness, observation, story-
                telling, and critical thinking.--
    ``(b) Limitation on Administrative Costs.--Not more than 5 percent 
of funds provided to a grantee under this section for any fiscal year 
may be used for administrative purposes.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated $10,000,000 for fiscal year 2000, and such sums as may be 
necessary for each of the fiscal years 2001 through 2004 to carry out 
this part.'';
                    (B) in section 9307--
                            (i) by amending subsection (b) to read as 
                        follows:
    ``(b) Applications.--State and local educational agencies may apply 
for an award under this part only as part of a consortium involving an 
Alaska Native organization. This consortium may include other eligible 
applicants.'';
                            (ii) by amending subsection (d) to read as 
                        follows:
    ``(d) Local Educational Agency Coordination.--Each applicant for an 
award under this part shall inform each local educational agency 
serving students who would participate in the project about its 
application.''; and
                            (iii) by striking subsection (e); and
                    (C) by redesignating sections 9307 and 9308 as 
                sections 9305 and 9306, respectively.
            (4) Repeals, transfers, and redesignations.--Title III (20 
        U.S.C 6801 et seq.) is further amended--
                    (A) by transferring title IX (20 U.S.C. 7801 et 
                seq.) (as amended by this subsection) to title III and 
                inserting such title IX after part B (as inserted by 
                section 302(a)(2)); and
                    (B) by redesignating the heading for title IX (as 
                transferred by subparagraph (A)) as the heading for 
                part C, and redesignating accordingly the references 
                within and to such title as references within and to 
                such part, respectively.
    (b) Amendments to the Education Amendments of 1978.--Part B of 
title XI of the Education Amendments of 1978 (25 U.S.C. 2001 et seq.) 
is amended to read as follows:

              ``PART B--BUREAU OF INDIAN AFFAIRS PROGRAMS

``SEC. 1120. FINDING AND POLICY.

    ``(a) Finding.--Congress finds and recognizes that the Federal 
Government has the sole responsibility for the operation and financial 
support of the Bureau of Indian Affairs funded school system that it 
has established on or near Indian reservations and Indian trust lands 
throughout the Nation for Indian children.
    ``(b) Policy.--It is the policy of the United States to work in 
full cooperation with Indian tribes toward the goal of assuring that 
the programs of the Bureau of Indian Affairs funded school system are 
of the highest quality and meet the unique educational and cultural 
needs of Indian children.

``SEC. 1121. ACCREDITATION AND STANDARDS FOR THE BASIC EDUCATION OF 
              INDIAN CHILDREN IN BUREAU OF INDIAN AFFAIRS SCHOOLS.

    ``(a) Purpose; Declarations of Purposes.--
            ``(1) Purpose.--The purpose of the standards implemented 
        under this section shall be to afford Indian students being 
        served by a school funded by the Bureau of Indian Affairs the 
        same opportunities as all other students in the United States 
        to achieve the same challenging State performance standards 
        expected of all students.
            ``(2) Declarations of purposes.--Local school boards for 
        schools operated by the Bureau of Indian Affairs, in 
        cooperation and consultation with their tribal governing bodies 
        and their communities, are encouraged to adopt declarations of 
        purposes of education for their communities taking into account 
        the implications of such purposes on education in their 
        communities and for their schools. In adopting such 
        declarations of purpose, the school boards shall consider the 
        effect those declarations may have on the motivation of 
        students and faculties. Such declarations shall represent the 
        aspirations of the community for the kinds of people the 
        community would like its children to become, and shall include 
        assurances that all learners will become accomplished in things 
        and ways important to them and respected by their parents and 
        communities, shaping worthwhile and satisfying lives for 
        themselves, exemplifying the best values of the community and 
        humankind, and becoming increasingly effective in shaping the 
        character and quality of the world all learners share. These 
        declarations of purpose shall influence the standards for 
        accreditation to be accepted by the schools.
    ``(b) Studies and Surveys Relating to Standards.--Not later than 1 
year after the date of the enactment of the Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's), the 
Secretary, in consultation with the Secretary of Education, consortia 
of education organizations, and Indian organizations and tribes, and 
making the fullest use possible of other existing studies, surveys, and 
plans, shall carry out by contract with an Indian organization, studies 
and surveys to establish and revise standards for the basic education 
of Indian children attending Bureau funded schools. Such studies and 
surveys shall take into account factors such as academic needs, local 
cultural differences, type and level of language skills, geographic 
isolation, and appropriate teacher-student ratios for such children, 
and shall be directed toward the attainment of equal educational 
opportunity for such children.
    ``(c) Revision of Minimum Academic Standards.--
            ``(1) In general.--Not later than 2 years after the date of 
        the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), the Secretary 
        shall--
                    ``(A) propose revisions to the minimum academic 
                standards published in the Federal Register on 
September 9, 1995 (50 Fed. Reg. 174) for the basic education of Indian 
children attending Bureau funded schools in accordance with the purpose 
described in subsection (a) and the findings of the studies and surveys 
conducted under subsection (b);
                    ``(B) publish such proposed revisions to such 
                standards in the Federal Register for the purpose of 
                receiving comments from the tribes, tribal school 
                boards, Bureau funded schools, and other interested 
                parties; and
                    ``(C) consistent with the provisions of this 
                section and section 1131, take such actions as are 
                necessary to coordinate standards implemented under 
                this section with the Comprehensive School Reform Plan 
                developed by the Bureau and--
                            ``(i) with the standards of the improvement 
                        plans for the States in which any school 
                        operated by the Bureau of Indian Affairs is 
                        located; or
                            ``(ii) in the case where schools operated 
                        by the Bureau are within the boundaries of 
                        reservation land of one tribe but within the 
                        boundaries of more than one State, with the 
                        standards of the State improvement plan of one 
                        such State selected by the tribe.
            ``(2) Further revisions.--Not later that 6 months after the 
        close of the comment period, the Secretary shall establish 
        final standards, distribute such standards to all tribes and 
        publish such final standards in the Federal Register. The 
        Secretary shall revise such standards periodically as 
        necessary. Prior to any revision of such final standards, the 
        Secretary shall distribute such proposed revision to all the 
        tribes, and publish such proposed revision in the Federal 
        Register, for the purpose of receiving comments from the tribes 
        and other interested parties.
            ``(3) Applicability of standards.--Except as provided in 
        subsection (e), the final standards published under paragraph 
        (2) shall apply to all Bureau funded schools not accredited 
        under subsection (f), and may also serve as a model for 
        educational programs for Indian children in public schools.
            ``(4) Considerations when establishing and revising 
        standards.--In establishing and revising such standards, the 
        Secretary shall take into account the unique needs of Indian 
        students and support and reinforcement of the specific cultural 
        heritage of each tribe.
    ``(d) Alternative or Modified Standards.--The Secretary shall 
provide alternative or modified standards in lieu of the standards 
established under subsection (c), where necessary, so that the programs 
of each school are in compliance with the minimum accreditation 
standards required for schools in the State or region where the school 
is located.
    ``(e) Waiver of Standards; Alternative Standards.--A tribal 
governing body, or the local school board so designated by the tribal 
governing body, shall have the local authority to waive, in part or in 
whole, the standards established under subsections (c) and (d) if such 
standards are deemed by such body to be inappropriate. The tribal 
governing body or designated school board shall, not later than 60 days 
after a waiver under this subsection, submit to the Secretary a 
proposal for alternative standards that take into account the specific 
needs of the tribe's children. Such alternative standards shall be 
established by the Secretary unless specifically rejected by the 
Secretary for good cause and in writing to the affected tribes or local 
school board, which rejection shall be final and not subject to review.
    ``(f) Accreditation and Implementation of Standards.--
            ``(1) Deadline for meeting standards.--Not later than the 
        second academic year after publication of the standards, to the 
        extent necessary funding is provided, all Bureau funded schools 
        shall meet the standards established under subsections (c) and 
        (d) or shall be accredited--
                    ``(A) by a tribal accrediting body, if the 
                accreditation standards of the tribal accrediting body 
                have been accepted by formal action of the tribal 
                governing body and are equal to or exceed the 
                accreditation standards of the State or region in which 
                the school is located;
                    ``(B) by a regional accreditation agency; or
                    ``(C) by State accreditation standards for the 
                State in which it is located.
            ``(2) Determination of standards to be applied.--The 
        accreditation type or standards applied for each school shall 
        be determined by the school board of the school, in 
        consultation with the Administrator of the school, provided 
        that in the case where the School Board and the Administrator 
        fail to agree on the type of accreditation and standards to 
        apply, the decision of the school board with the approval of 
        the tribal governing body shall be final.
            ``(3) Assistance to school boards.--The Secretary, through 
        contracts and grants, shall assist school boards of contract or 
        grant schools in implementation of the standards established 
        under subsections (c) and (d), if the school boards request 
        that such standards, in part or in whole, be implemented.
            ``(4) Fiscal control and fund accounting standards.--The 
        Bureau shall, either directly or through contract with an 
        Indian organization, establish a consistent system of reporting 
        standards for fiscal control and fund accounting for all 
        contract and grant schools. Such standards shall provide data 
        comparable to those used by Bureau operated schools.
    ``(g) Annual Plan for Meeting of Standards.--Except as provided in 
subsections (e) and (f), the Secretary shall begin to implement the 
standards established under this section immediately upon the date of 
their establishment. On an annual basis, the Secretary shall submit to 
the appropriate committees of Congress, all Bureau funded schools, and 
the tribal governing bodies of such schools a detailed plan to bring 
all Bureau schools and contract or grant schools up to the level 
required by the applicable standards established under this section. 
Such plan shall include detailed information on the status of each 
school's educational program in relation to the applicable standards 
established under this section, specific cost estimates for meeting 
such standards at each school and specific timelines for bringing each 
school up to the level required by such standards.
    ``(h) Closure or Consolidation of Schools.--
            ``(1) In general.--Except as specifically required by 
        statute, no school or peripheral dormitory operated by the 
        Bureau on or after January 1, 1992, may be closed or 
        consolidated or have its program substantially curtailed unless 
        done according to the requirements of this subsection.
            ``(2) Exceptions.--This subsection shall not apply--
                    ``(A) in those cases where the tribal governing 
                body, or the local school board concerned (if so 
                designated by the tribal governing body), requests 
                closure or consolidation; or
                    ``(B) when a temporary closure, consolidation, or 
                substantial curtailment is required by plant conditions 
                which constitute an immediate hazard to health and 
                safety.
            ``(3) Regulations.--The Secretary shall, by regulation, 
        promulgate standards and procedures for the closure, transfer 
        to another authority, consolidation, or substantial curtailment 
        of Bureau schools, in accordance with the requirements of this 
        subsection.
            ``(4) Notice.--Whenever closure, transfer to another 
        authority, consolidation, or substantial curtailment of a 
        school is under active consideration or review by any division 
        of the Bureau or the Department of the Interior, the affected 
        tribe, tribal governing body, and designated local school 
        board, will be notified immediately, kept fully and currently 
        informed, and afforded an opportunity to comment with respect 
        to such consideration or review. When a formal decision is made 
        to close, transfer to another authority, consolidate, or 
        substantially curtail a school, the affected tribe, tribal 
        governing body, and designated school board shall be notified 
        at least 6 months prior to the end of the school year preceding 
        the proposed closure date. Copies of any such notices and 
        information shall be transmitted promptly to the appropriate 
        committees of Congress and published in the Federal Register.
            ``(5) Report.--The Secretary shall make a report to the 
        appropriate committees of Congress, the affected tribe, and the 
        designated school board describing the process of the active 
        consideration or review referred to in paragraph (4). The 
        report shall include a study of the impact of such action on 
        the student population, identify those students with particular 
        educational and social needs, and ensure that alternative 
        services are available to such students. Such report shall 
        include the description of the consultation conducted between 
        the potential service provider, current service provider, 
        parents, tribal representatives and the tribe or tribes 
        involved, and the Director of the Office of Indian Education 
        Programs within the Bureau regarding such students.
            ``(6) Limitation on certain actions.--No irrevocable action 
        may be taken in furtherance of any such proposed school 
        closure, transfer to another authority, consolidation or 
        substantial curtailment (including any action which would 
        prejudice the personnel or programs of such school) prior to 
        the end of the first full academic year after such report is 
        made.
            ``(7) Tribal governing body approval required for certain 
        actions.--The Secretary may terminate, contract, transfer to 
        any other authority, consolidate, or substantially curtail the 
        operation or facilities of--
                    ``(A) any Bureau funded school that is operated on 
                or after of January 1, 1999;
                    ``(B) any program of such a school that is operated 
                on or after January 1, 1999; or
                    ``(C) any school board of a school operated under a 
                grant under the Tribally Controlled Schools Act of 
                1988,
        only if the tribal governing body approves such action.
    ``(i) Application for Contracts or Grants for Non-Bureau Funded 
Schools or Expansion of Bureau Funded Schools.--
            ``(1) In general.--(A)(i) The Secretary shall only consider 
        the factors described in subparagraph (B) in reviewing--
                    ``(I) applications from any tribe for the awarding 
                of a contract or grant for a school that is not a 
                Bureau funded school; and
                    ``(II) applications from any tribe or school board 
                of any Bureau funded school for--
                            ``(aa) a school which is not a Bureau 
                        funded school; or
                            ``(bb) the expansion of a Bureau funded 
                        school which would increase the amount of funds 
                        received by the Indian tribe or school board 
                        under section 1127.
            ``(ii) With respect to applications described in this 
        subparagraph, the Secretary shall give consideration to all the 
        factors described in subparagraph (B), but no such application 
        shall be denied based primarily upon the geographic proximity 
        of comparable public education.
            ``(B) With respect to applications described in 
        subparagraph (A) the Secretary shall consider the following 
        factors relating to the program and services that are the 
        subject of the application:
                    ``(i) The adequacy of the facilities or the 
                potential to obtain or provide adequate facilities.
                    ``(ii) Geographic and demographic factors in the 
                affected areas.
                    ``(iii) The adequacy of the applicant's program 
                plans or, in the case of a Bureau funded school, of 
                projected needs analysis done either by the tribe or 
                the Bureau.
                    ``(iv) Geographic proximity of comparable public 
                education.
                    ``(v) The stated needs of all affected parties, 
                including students, families, tribal governments at 
                both the central and local levels, and school 
                organizations.
                    ``(vi) Adequacy and comparability of programs 
                already available.
                    ``(vii) Consistency of available programs with 
                tribal educational codes or tribal legislation on 
                education.
                    ``(viii) The history and success of these services 
                for the proposed population to be served, as determined 
                from all factors, including but not limited to 
                standardized examination performance.
            ``(2) Determination on application.--(A) The Secretary 
        shall make a determination of whether to approve any 
        application described in paragraph (1)(A) not later than 180 
        days after such application is submitted to the Secretary.
            ``(B) If the Secretary fails to make the determination with 
        respect to an application by the date described in subparagraph 
        (A), the application shall be treated a having been approved by 
        the Secretary.
            ``(3) Requirements for applications.--(A) Notwithstanding 
        paragraph (2)(B), an application described in paragraph (1)(A) 
        may be approved by the Secretary only if--
                    ``(i) the application has been approved by the 
                tribal governing body of the students served by (or to 
                be served by) the school or program that is the subject 
                of the application; and
                    ``(ii) written evidence of such approval is 
                submitted with the application.
            ``(B) Each application described in paragraph (1)(A) shall 
        provide information concerning each of the factors described in 
        paragraph (1)(B).
            ``(4) Denial of applications.--Whenever the Secretary makes 
        a determination to deny approval of any application described 
        in paragraph (1)(A), the Secretary shall--
                    ``(A) state the objections in writing to the 
                applicant not later 180 days after the application is 
                submitted to the Secretary;
                    ``(B) provide assistance to the applicant to 
                overcome stated objections; and
                    ``(C) provide the applicant a hearing, under the 
                same rules and regulations pertaining to the Indian 
                Self-Determination and Education Assistance Act and an 
                opportunity to appeal the objections raised by the 
                Secretary.
            ``(5) Effective date of a subject application.--(A) Except 
        as otherwise provided in this paragraph, the action which is 
        the subject of any application described in paragraph (1)(A) 
        that is approved by the Secretary shall become effective at the 
        beginning of the academic year following the fiscal year in 
        which the application is approved, or at an earlier date 
        determined by the Secretary.
            ``(B) If an application is treated as having been approved 
        by the Secretary under paragraph (2)(B), the action that is the 
        subject of the application shall become effective on the date 
        that is 18 months after the date on which the application is 
        submitted to the Secretary, or at an earlier date determined by 
        the Secretary.
            ``(6) Statutory construction.--Nothing in this section 
        shall be read so as to preclude the expansion of grades and 
        related facilities at a Bureau funded school where such 
        expansion and the maintenance of such expansion is occasioned 
        or paid for with non-Bureau funds.
    ``(j) General Use of Funds.--Funds received by Bureau funded 
schools from the Bureau of Indian Affairs and under any program from 
the Department of Education or any other Federal agency for the purpose 
of providing education or related services may be used for schoolwide 
projects to improve the educational program for all Indian students.
    ``(k) Study on Adequacy of Funds and Formulas.--The Comptroller 
General shall conduct a study, in consultation with Indian tribes and 
local school boards, to determine the adequacy of funding, and formulas 
used by the Bureau to determine funding, for programs operated by 
Bureau funded schools, taking into account unique circumstances 
applicable to Bureau funded schools, as well as expenditures for 
comparable purposes in public schools nationally. Upon completion of 
the study, the Secretary of the Interior shall take such action as 
necessary to ensure distribution of the findings of the study to all 
affected Indian tribes, local school boards, and associations of local 
school boards.

``SEC. 1122. NATIONAL CRITERIA FOR HOME LIVING SITUATIONS.

    ``(a) In General.--The Secretary, in consultation with the 
Secretary of Education, Indian organizations and tribes, and Bureau 
funded schools, shall revise the national standards for home-living 
(dormitory) situations to include such factors as heating, lighting, 
cooling, adult-child ratios, needs for counselors (including special 
needs related to off-reservation home-living (dormitory) situations), 
therapeutic programs, space, and privacy. Such standards shall be 
implemented in Bureau operated schools, and shall serve as minimum 
standards for contract or grant schools. Once established, any 
revisions of such standards shall be developed according to the 
requirements established under section 1138A.
    ``(b) Implementation.--The Secretary shall implement the revised 
standards established under this section immediately upon their 
completion.
    ``(c) Plan.--At the time of each annual budget submission for 
Bureau educational services is presented, the Secretary shall submit to 
the appropriate committees of Congress, the tribes, and the affected 
schools, and publish in the Federal Register, a detailed plan to bring 
all Bureau funded schools that provide home-living (dormitory) 
situations up to the standards established under this section. Such 
plan shall include a statement of the relative needs of each Bureau 
funded home-living (dormitory) school, projected future needs of each 
Bureau funded home-living (dormitory) school, detailed information on 
the status of each school in relation to the standards established 
under this section, specific cost estimates for meeting each standard 
for each such school, aggregate cost estimates for bringing all such 
schools into compliance with the criteria established under this 
section, and specific timelines for bringing each school into 
compliance with such standards.
    ``(d) Waiver.--The criteria established under this section may be 
waived in the same manner as the standards provided under section 
1121(c) may be waived.
    ``(e) Closure for Failure To Meet Standards Prohibited.--No school 
in operation on or before January 1, 1987 (regardless of compliance or 
noncompliance with the criteria established under this section), may be 
closed, transferred to another authority, consolidated, or have its 
program substantially curtailed for failure to meet the criteria.

``SEC. 1123. CODIFICATION OF REGULATIONS.

    ``(a) Part 32 of Title 25 of Code of Federal Regulations.--The 
provisions of part 32 of title 25 of the Code of Federal Regulations, 
as in effect on January 1, 1987, are incorporated into this Act and 
shall be treated as though such provisions are set forth in this 
subsection. Such provisions may be altered only by means of an Act of 
Congress. To the extent that such provisions of part 32 do not conform 
with this Act or any statutory provision of law enacted before November 
1, 1978, the provisions of this Act and the provisions of such other 
statutory law shall govern.
    ``(b) Regulation Defined.--For purposes of this part, the term 
`regulation' means any rules, regulations, guidelines, interpretations, 
orders, or requirements of general applicability prescribed by any 
officer or employee of the executive branch.

``SEC. 1124. SCHOOL BOUNDARIES.

    ``(a) Establishment by Secretary.--The Secretary shall establish, 
by regulation, separate geographical attendance areas for each Bureau 
funded school.
    ``(b) Establishment by Tribal Body.----In any case where there is 
more than one Bureau funded school located on an Indian reservation, at 
the direction of the tribal governing body, the relevant school boards 
of the Bureau funded schools on the reservation may, by mutual consent, 
establish the relevant attendance areas for such schools, subject to 
the approval of the tribal governing body. Any such boundaries so 
established shall be accepted by the Secretary.
    ``(c) Boundary Revisions.--
            ``(1) In general.--On or after July 1, 1999, no 
        geographical attendance area shall be revised or established 
        with respect to any Bureau funded school unless the tribal 
        governing body or the local school board concerned (if so 
        designated by the tribal governing body) has been afforded--
                    ``(A) at least 6 months notice of the intention of 
                the Bureau to revise or establish such attendance area; 
                and
                    ``(B) the opportunity to propose alternative 
                boundaries.
        Any tribe may petition the Secretary for revision of existing 
        attendance area boundaries. The Secretary shall accept such 
        proposed alternative or revised boundaries unless the Secretary 
        finds, after consultation with the affected tribe or tribes, 
        that such revised boundaries do not reflect the needs of the 
        Indian students to be served or do not provide adequate 
        stability to all of the affected programs. The Secretary shall 
        cause such revisions to be published in the Federal Register.
            ``(2) Tribal resolution determination.--Nothing in this 
        section shall be interpreted as denying a tribal governing body 
        the authority, on a continuing basis, to adopt a tribal 
        resolution allowing parents the choice of the Bureau funded 
        school their children may attend, regardless of the attendance 
        boundaries established under this section.
    ``(d) Funding Restrictions.--The Secretary shall not deny funding 
to a Bureau funded school for any eligible Indian student attending the 
school solely because that student's home or domicile is outside of the 
geographical attendance area established for that school under this 
section. No funding shall be made available without tribal 
authorization to enable a school to provide transportation for any 
student to or from the school and a location outside the approved 
attendance area of the school.
    ``(e) Reservation as Boundary.--In any case where there is only one 
Bureau funded program located on an Indian reservation, the attendance 
area for the program shall be the boundaries (established by treaty, 
agreement, legislation, court decisions, or executive decisions and as 
accepted by the tribe) of the reservation served, and those students 
residing near the reservation shall also receive services from such 
program.
    ``(f) Off-Reservation Home-Living (Dormitory) Schools.--
Notwithstanding any geographical attendance areas, attendance at off-
reservation home-living (dormitory) schools shall include students 
requiring special emphasis programs to be implemented at each off-
reservation home-living (dormitory) school. Such attendance shall be 
coordinated between education line officers, the family, and the 
referring and receiving programs.

``SEC. 1125. FACILITIES CONSTRUCTION.

    ``(a) Compliance With Health and Safety Standards.--The Secretary 
shall immediately begin to bring all schools, dormitories, and other 
Indian education-related facilities operated by the Bureau or under 
contract or grant with the Bureau into compliance with all applicable 
tribal, Federal, or State health and safety standards, whichever 
provides greater protection (except that the tribal standards to be 
applied shall be no greater than any otherwise applicable Federal or 
State standards), with section 504 of the Rehabilitation Act of 1973, 
and with the Americans with Disabilities Act of 1990. Nothing in this 
section shall require termination of the operations of any facility 
which does not comply with such provisions and which is in use on the 
date of the enactment of the Public Education Reinvestment, 
Reinvention, and Responsibility Act (Three R's).
    ``(b) Compliance Plan.--At the time that the annual budget request 
for Bureau educational services is presented, the Secretary shall 
submit to the appropriate committees of Congress a detailed plan to 
bring all facilities covered under subsection (a) of this section into 
compliance with the standards referred to in subsection (a). Such plan 
shall include detailed information on the status of each facility's 
compliance with such standards, specific cost estimates for meeting 
such standards at each school, and specific timelines for bringing each 
school into compliance with such standards.
    ``(c) Construction Priorities.--
            ``(1) System to establish priorities.--On an annual basis 
        the Secretary shall submit to the appropriate committees of 
        Congress and cause to be published in the Federal Register, the 
        system used to establish priorities for replacement and 
        construction projects for Bureau funded schools and home-living 
        schools, including boarding schools and dormitories. At the 
        time any budget request for education is presented, the 
        Secretary shall publish in the Federal Register and submit with 
        the budget request the current list of all Bureau funded school 
        construction priorities.
            ``(2) Long-term construction and replacement list.--In 
        addition to the plan submitted under subsection (b), the 
        Secretary shall--
                    ``(A) not later than 18 months after the date of 
                the enactment of the Public Education Reinvestment, 
                Reinvention, and Responsibility Act (Three R's), 
                establish a long-term construction and replacement list 
                for all Bureau funded schools;
                    ``(B) using the list prepared under subparagraph 
                (A), propose a list for the orderly replacement of all 
                Bureau funded education-related facilities over a 
                period of 40 years to enable planning and scheduling of 
                budget requests;
                    ``(C) cause the list prepared under subsection (B) 
                to be published in the Federal Register and allow a 
                period of not less than 120 days for public comment;
                    ``(D) make such revisions to the list prepared 
                under subparagraph (B) as are appropriate based on the 
                comments received; and
                    ``(E) cause the final list to be published in the 
                Federal Register.
            ``(3) Effect on other list.--Nothing in this section shall 
        be construed as interfering with or changing in any way the 
        construction priority list as it exists on the date of the 
        enactment of the Public Education Reinvestment, Reinvention, 
        and Responsibility Act (Three R's).
    ``(d) Hazardous Condition at Bureau School.--
            ``(1) Closure or consolidation.--A Bureau funded school may 
        be closed or consolidated, and the programs of a Bureau funded 
        school may be substantially curtailed by reason of plant 
        conditions that constitute an immediate hazard to health and 
        safety only if a health and safety officer of the Bureau 
        determines that such conditions exist at the Bureau funded 
        school.
            ``(2) Inspection.--(A) After making a determination 
        described in paragraph (1), the Bureau health and safety 
        officer shall conduct an inspection of the condition of such 
        plant accompanied by an appropriate tribal, county, municipal, 
        or State health and safety officer in order to determine 
        whether conditions at such plant constitute an immediate hazard 
        to health and safety. Such inspection shall be completed by not 
        later than the date that is 30 days after the date on which the 
        action described in paragraph (1) is taken. No further negative 
        action may be taken unless the findings are concurred in by the 
        second, non-Bureau of Indian Affairs inspector.
            ``(B) If the health and safety officer conducting the 
        inspection of a plant required under subparagraph (A) 
        determines that conditions at the plant do not constitute an 
        immediate hazard to health and safety, any consolidation or 
        curtailment that was made under paragraph (1) shall immediately 
        cease and any school closed by reason of conditions at the 
        plant shall be reopened immediately.
            ``(C) If a Bureau funded school is temporarily closed or 
        consolidated or the programs of a Bureau funded school are 
        substantially curtailed under this subsection and the Secretary 
        determines that the closure, consolidation, or curtailment will 
        exceed 1 year, the Secretary shall submit to the Congress, by 
        not later than 6 months after the date on which the closure, 
        consolidation, or curtailment was initiated, a report which 
        sets forth the reasons for such temporary actions, the actions 
        the Secretary is taking to eliminate the conditions that 
        constitute the hazard, and an estimated date by which such 
        actions will be concluded.
    ``(e) Funding Requirement.--
            ``(1) Distribution of funds.--Beginning with the fiscal 
        year following the year of the date of the enactment of the 
        Student Results Act of 1999 (Three R's), all funds appropriated 
        for the operations and maintenance of Bureau funded schools 
        shall be distributed by formula to the schools. No funds from 
        this account may be retained or segregated by the Bureau to pay 
        for administrative or other costs of any facilities branch or 
        office, at any level of the Bureau.
            ``(2) Requirements for certain uses.--No funds shall be 
        withheld from the distribution to the budget of any school 
        operated under contract or grant by the Bureau for maintenance 
        or any other facilities or road related purpose, unless such 
        school has consented, as a modification to the contract or in 
        writing for grants schools, to the withholding of such funds, 
        including the amount thereof, the purpose for which the funds 
        will be used, and the timeline for the services to be provided. 
        The school may, at the end of any fiscal year, cancel an 
        agreement under this paragraph upon giving the Bureau 30 days 
        notice of its intent to do so.
    ``(f) No Reduction in Federal Funding.--Nothing in this section 
shall be construed to diminish any Federal funding due to the receipt 
by the school of funding for facilities improvement or construction 
from a State or any other source.

``SEC. 1126. BUREAU OF INDIAN AFFAIRS EDUCATION FUNCTIONS.

    ``(a) Formulation and Establishment of Policy and Procedure; 
Supervision of Programs and Expenditures.--The Secretary shall vest in 
the Assistant Secretary for Indian Affairs all functions with respect 
to formulation and establishment of policy and procedure and 
supervision of programs and expenditures of Federal funds for the 
purpose of Indian education administered by the Bureau. The Assistant 
Secretary shall carry out such functions through the Director of the 
Office of Indian Education Programs.
    ``(b) Direction and Supervision of Personnel Operations.--Not later 
than 6 months after the date of the enactment of the Public Education 
Reinvestment, Reinvention, and Responsibility Act (Three R's), the 
Director of the Office of Indian Education Programs shall direct and 
supervise the operations of all personnel directly and substantially 
involved in the provision of education services by the Bureau, 
including school or institution custodial or maintenance personnel, 
facilities management, contracting, procurement, and finance personnel. 
The Assistant Secretary for Indian Affairs shall coordinate the 
transfer of functions relating to procurement, contracts, operation, 
and maintenance of schools and other support functions to the Director.
    ``(c) Evaluation of Programs; Services and Support Functions; 
Technical and Coordinating Assistance.--Education personnel who are 
under the direction and supervision of the Director of the Office of 
Indian Education Programs in accordance with the first sentence of 
subsection (b) shall--
            ``(1) monitor and evaluate Bureau education programs;
            ``(2) provide all services and support functions for 
        education programs with respect to personnel matters involving 
        staffing actions and functions; and
            ``(3) provide technical and coordinating assistance in 
        areas such as procurement, contracting, budgeting, personnel, 
        curriculum, and operation and maintenance of school facilities.
    ``(d) Construction, Improvement, Operation, and Maintenance of 
Facilities.--
            ``(1) Plan for construction.--The Assistant Secretary shall 
        submit in the annual budget a plan--
                    ``(A) for school facilities to be constructed under 
                section 1125(c);
                    ``(B) for establishing priorities among projects 
                and for the improvement and repair of educational 
                facilities, which together shall form the basis for the 
                distribution of appropriated funds; and
                    ``(C) for capital improvements to be made over the 
                five succeeding years.
            ``(2) Program for operation and maintenance.--
                    ``(A) In general.--The Assistant Secretary shall 
                establish a program, including the distribution of 
                appropriated funds, for the operation and maintenance 
                of education facilities. Such program shall include--
                            ``(i) a method of computing the amount 
                        necessary for each educational facility;
                            ``(ii) similar treatment of all Bureau 
                        funded schools;
                            ``(iii) a notice of an allocation of 
                        appropriated funds from the Director of the 
                        Office of Indian Education Programs directly to 
                        the education line officers and appropriate 
                        school officials;
                            ``(iv) a method for determining the need 
                        for, and priority of, facilities repair and 
                        maintenance projects, both major and minor. In 
                        making such determination, the Assistant 
                        Secretary shall cause to be conducted a series 
                        of meetings at the agency and area level with 
                        representatives of the Bureau funded schools in 
                        those areas and agencies to receive comment on 
                        the lists and prioritization of such projects; 
                        and
                            ``(v) a system for the conduct of routine 
                        preventive maintenance.
                    ``(B) The appropriate education line officers shall 
                make arrangements for the maintenance of education 
                facilities with the local supervisors of the Bureau 
                maintenance personnel. The local supervisors of Bureau 
                maintenance personnel shall take appropriate action to 
                implement the decisions made by the appropriate 
                education line officers, except that no funds under 
                this chapter may be authorized for expenditure unless 
                such appropriate education line officer is assured that 
                the necessary maintenance has been, or will be, 
                provided in a reasonable manner.
            ``(3) Implementation.--The requirements of this subsection 
        shall be implemented as soon as practicable after the date of 
        the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's).
    ``(e) Acceptance of Gifts and Bequests.--Notwithstanding any other 
provision of law, the Director shall promulgate guidelines for the 
establishment of mechanisms for the acceptance of gifts and bequests 
for the use and benefit of particular schools or designated Bureau 
operated education programs, including, where appropriate, the 
establishment and administration of trust funds. When a Bureau operated 
program is the beneficiary of such a gift or bequest, the Director 
shall make provisions for monitoring its use and shall report to the 
appropriate committees of Congress the amount and terms of such gift or 
bequest, the manner in which such gift or bequest shall be used, and 
any results achieved by such action.
    ``(f) Functions Clarified.--For the purpose of this section, the 
term `functions' includes powers and duties.

``SEC. 1127. ALLOTMENT FORMULA.

    ``(a) Factors Considered; Revision To Reflect Standards.--
            ``(1) Formula.--The Secretary shall establish, by 
        regulation adopted in accordance with section 1138A, a formula 
        for determining the minimum annual amount of funds necessary to 
        sustain each Bureau funded school. In establishing such 
        formula, the Secretary shall consider--
                    ``(A) the number of eligible Indian students served 
                and total student population of the school;
                    ``(B) special cost factors, such as--
                            ``(i) the isolation of the school;
                            ``(ii) the need for special staffing, 
                        transportation, or educational programs;
                            ``(iii) food and housing costs;
                            ``(iv) maintenance and repair costs 
                        associated with the physical condition of the 
                        educational facilities;
                            ``(v) special transportation and other 
                        costs of isolated and small schools;
                            ``(vi) the costs of home-living (dormitory) 
                        arrangements, where determined necessary by a 
                        tribal governing body or designated school 
                        board;
                            ``(vii) costs associated with greater 
                        lengths of service by education personnel;
                            ``(viii) the costs of therapeutic programs 
                        for students requiring such programs; and
                            ``(ix) special costs for gifted and 
                        talented students;
                    ``(C) the cost of providing academic services which 
                are at least equivalent to those provided by public 
                schools in the State in which the school is located; 
                and
                    ``(D) such other relevant factors as the Secretary 
                determines are appropriate.
            ``(2) Revision of formula.--Upon the establishment of the 
        standards required in sections 1121 and 1122, the Secretary 
        shall revise the formula established under this subsection to 
        reflect the cost of funding such standards. Not later than 
        January 1, 2001, the Secretary shall review the formula 
        established under this section and shall take such steps as are 
        necessary to increase the availability of counseling and 
        therapeutic programs for students in off-reservation home-
        living (dormitory) schools and other Bureau operated 
        residential facilities. Concurrent with such action, the 
        Secretary shall review the standards established under section 
        1122 to be certain that adequate provision is made for parental 
        notification regarding, and consent for, such counseling and 
        therapeutic programs.
    ``(b) Pro Rata Allotment.--Notwithstanding any other provision of 
law, Federal funds appropriated for the general local operation of 
Bureau funded schools shall be allotted pro rata in accordance with the 
formula established under subsection (a).
    ``(c) Annual Adjustment; Reservation of Amount for School Board 
Activities.--
            ``(1) Annual adjustment.--For fiscal year 2001, and for 
        each subsequent fiscal year, the Secretary shall adjust the 
        formula established under subsection (a) to--
                    ``(A) use a weighted unit of 1.2 for each eligible 
                Indian student enrolled in the seventh and eighth 
                grades of the school in considering the number of 
                eligible Indian students served by the school;
                    ``(B) consider a school with an enrollment of less 
                than 50 eligible Indian students as having an average 
                daily attendance of 50 eligible Indian students for 
                purposes of implementing the adjustment factor for 
                small schools;
                    ``(C) take into account the provision of 
                residential services on less than a 9-month basis at a 
                school when the school board and supervisor of the 
                school determine that a less than 9-month basis will be 
                implemented for the school year involved;
                    ``(D) use a weighted unit of 2.0 for each eligible 
                Indian student that--
                            ``(i) is gifted and talented; and
                            ``(ii) is enrolled in the school on a full-
                        time basis,
                in considering the number of eligible Indian students 
                served by the school; and
                    ``(E) use a weighted unit of 0.25 for each eligible 
                Indian student who is enrolled in a yearlong credit 
                course in an Indian or Native language as part of the 
                regular curriculum of a school, in considering the 
                number of eligible Indian students served by such 
                school.
        The adjustment required under subparagraph (E) shall be used 
        for such school after--
                    ``(i) the certification of the Indian or Native 
                language curriculum by the school board of such school 
                to the Secretary, together with an estimate of the 
                number of full-time students expected to be enrolled in 
                the curriculum in the second school year for which the 
                certification is made; and
                    (ii) the funds appropriated for allotment under 
                this section are designated by the appropriations Act 
                appropriating such funds as the amount necessary to 
                implement such adjustment at such school without 
                reducing allotments made under this section to any 
                school by virtue of such adjustment.
            ``(2) Reservation of amount.--
                    ``(A) In general.--From the funds allotted in 
                accordance with the formula established under 
                subsection (a) for each Bureau school, the local school 
                board of such school may reserve an amount which does 
                not exceed the greater of--
                            ``(i) $8,000; or
                            ``(ii) the lesser of--
                                    ``(I) $15,000; or
                                    ``(II) 1 percent of such allotted 
                                funds,
                for school board activities for such school, including 
                (notwithstanding any other provision of law) meeting 
                expenses and the cost of membership in, and support of, 
                organizations engaged in activities on behalf of Indian 
                education.
                    ``(B) Training.--Each school board shall see that 
                each new member of the school board receives, within 12 
                months of the individual's assuming a position on the 
                school board, 40 hours of training relevant to that 
                individual's service on the board. Such training may 
                include legal issues pertaining to schools funded by 
                the Bureau, legal issues pertaining to school boards, 
                ethics, and other topics deemed appropriate by the 
                school board.
    ``(d) Reservation of Amount for Emergencies.--The Secretary shall 
reserve from the funds available for distribution for each fiscal year 
under this section an amount which, in the aggregate, shall equal 1 
percent of the funds available for such purpose for that fiscal year. 
Such funds shall be used, at the discretion of the Director of the 
Office of Indian Education Programs, to meet emergencies and unforeseen 
contingencies affecting the education programs funded under this 
section. Funds reserved under this subsection may only be expended for 
education services or programs, including emergency repairs of 
educational facilities, at a schoolsite (as defined by section 
5204(c)(2) of the Tribally Controlled Schools Act of 1988). Funds 
reserved under this subsection shall remain available without fiscal 
year limitation until expended. However, the aggregate amount available 
from all fiscal years may not exceed 1 percent of the current year 
funds. Whenever, the Secretary makes funds available under this 
subsection, the Secretary shall report such action to the appropriate 
committees of Congress within the annual budget submission.
    ``(e) Supplemental Appropriations.--Supplemental appropriations 
enacted to meet increased pay costs attributable to school level 
personnel shall be distributed under this section.
    ``(f) Eligible Indian Student Defined.--For the purpose of this 
section, the term `eligible Indian student' means a student who--
            ``(1) is a member of or is at least one-fourth degree 
        Indian blood descendant of a member of an Indian tribe which is 
        eligible for the special programs and services provided by the 
        United States through the Bureau because of their status as 
        Indians; and
            ``(2) resides on or near an Indian reservation or meets the 
        criteria for attendance at a Bureau off-reservation home-living 
        (dormitory) school.
    ``(g) Tuition.--
            ``(1) In general.--An eligible Indian student may not be 
        charged tuition for attendance at a Bureau school or contract 
        or grant school. A student attending a Bureau school under 
        paragraph (2)(C) may not be charged tuition for attendance at 
        such a school.
            ``(2) Attendance of non-indian students at bureau 
        schools.--The Secretary may permit the attendance at a Bureau 
        school of a student who is not an eligible Indian student if--
                    ``(A) the Secretary determines that the student's 
                attendance will not adversely affect the school's 
                program for eligible Indian students because of cost, 
                overcrowding, or violation of standards or 
                accreditation;
                    ``(B) the school board consents;
                    ``(C) the student is a dependent of a Bureau, 
                Indian Health Service, or tribal government employee 
                who lives on or near the school site; or
                    ``(D) a tuition is paid for the student that is not 
                more than that charged by the nearest public school 
                district for out-of-district students, and shall be in 
                addition to the school's allocation under this section.
            ``(3) Attendance of non-indian students at contract and 
        grant schools.--The school board of a contract or grant school 
        may permit students who are not eligible Indian students under 
        this subsection to attend its contract school or grant school 
        and any tuition collected for those students shall be in 
        addition to funding received under this section.
    ``(h) Funds Available Without Fiscal Year Limitation.--
Notwithstanding any other provision of law, at the election of the 
school board of a Bureau school made at any time during the fiscal 
year, a portion equal to not more than 15 percent of the funds 
allocated with respect to a school under this section for any fiscal 
year shall remain available to the school for expenditure without 
fiscal year limitation. The Assistant Secretary shall take steps as may 
be necessary to implement this provision.
    ``(i) Students at Richfield Dormitory, Richfield, Utah.--Tuition 
for out-of-State Indian students in home-living (dormitory) 
arrangements at the Richfield dormitory in Richfield, Utah, who attend 
Sevier County high schools in Richfield, Utah, shall be paid from the 
Indian school equalization program funds authorized in this section and 
section 1130 at a rate not to exceed the amounts per weighted student 
unit for that year for the instruction of such students. No additional 
administrative cost funds shall be added to the grant.

``SEC. 1128. ADMINISTRATIVE COST GRANTS.

    ``(a) Grants; Effect Upon Appropriated Amounts.--
            ``(1) Grants.--Subject to the availability of appropriated 
        funds, the Secretary shall provide grants to each tribe or 
        tribal organization operating a contract school or grant school 
        in the amount determined under this section with respect to the 
        tribe or tribal organization for the purpose of paying the 
        administrative and indirect costs incurred in operating 
        contract or grant schools, provided that no school operated as 
        a stand-alone institution shall receive less than $200,000.00 
        per year for these purposes, in order to--
                    ``(A) enable tribes and tribal organizations 
                operating such schools, without reducing direct program 
                services to the beneficiaries of the program, to 
                provide all related administrative overhead services 
                and operations necessary to meet the requirements of 
                law and prudent management practice; and
                    ``(B) carry out other necessary support functions 
                which would otherwise be provided by the Secretary or 
                other Federal officers or employees, from resources 
                other than direct program funds, in support of 
                comparable Bureau operated programs.
            ``(2) Effect upon appropriated amounts.--Amounts 
        appropriated to fund the grants provided under this section 
        shall be in addition to, and shall not reduce, the amounts 
        appropriated for the program being administered by the contract 
        or grant school.
    ``(b) Determination of Grant Amount.--
            ``(1) In general.--The amount of the grant provided to each 
        tribe or tribal organization under this section for each fiscal 
        year shall be determined by applying the administrative cost 
        percentage rate of the tribe or tribal organization to the 
        aggregate of the Bureau elementary and secondary functions 
        operated by the tribe or tribal organization for which funds 
        are received from or through the Bureau. The administrative 
        cost percentage rate determined under subsection (c) does not 
        apply to other programs operated by the tribe or tribal 
        organization.
            ``(2) Direct cost base funds.--The Secretary shall--
                    ``(A) reduce the amount of the grant determined 
                under paragraph (1) to the extent that payments for 
                administrative costs are actually received by an Indian 
                tribe or tribal organization under any Federal 
                education program included in the direct cost base of 
                the tribe or tribal organization; and
                    ``(B) take such actions as may be necessary to be 
                reimbursed by any other department or agency of the 
                Federal Government for the portion of grants made under 
                this section for the costs of administering any program 
                for Indians that is funded by appropriations made to 
                such other department or agency.
    ``(c) Administrative Cost Percentage Rate.--
            ``(1) In general.--For purposes of this section, the 
        administrative cost percentage rate for a contract or grant 
        school for a fiscal year is equal to the percentage determined 
        by dividing--
                    ``(A) the sum of--
                            ``(i) the amount equal to--
                                    ``(I) the direct cost base of the 
                                tribe or tribal organization for the 
                                fiscal year, multiplied by
                                    ``(II) the minimum base rate; plus
                            ``(ii) the amount equal to--
                                    ``(I) the standard direct cost 
                                base; multiplied by
                                    ``(II) the maximum base rate; by
                    ``(B) the sum of--
                            ``(i) the direct cost base of the tribe or 
                        tribal organization for the fiscal year; plus
                            ``(ii) the standard direct cost base.
            ``(2) Rounding.--The administrative cost percentage rate 
        shall be determined to the \1/100\ of a decimal point.
    ``(d) Combining Funds.--
            ``(1) In general.--Funds received by a tribe or contract or 
        grant school as grants under this section for tribal elementary 
        or secondary educational programs may be combined by the tribe 
        or contract or grant school into a single administrative cost 
        account without the necessity of maintaining separate funding 
        source accounting.
            ``(2) Indirect cost funds.--Indirect cost funds for 
        programs at the school which share common administrative 
        services with tribal elementary or secondary educational 
        programs may be included in the administrative cost account 
        described in paragraph (1).
    ``(e) Availability of Funds.--Funds received as grants under this 
section with respect to tribal elementary or secondary education 
programs shall remain available to the contract or grant school without 
fiscal year limitation and without diminishing the amount of any grants 
otherwise payable to the school under this section for any fiscal year 
beginning after the fiscal year for which the grant is provided.
    ``(f) Treatment of Funds.--Funds received as grants under this 
section for Bureau funded programs operated by a tribe or tribal 
organization under a contract or agreement shall not be taken into 
consideration for purposes of indirect cost underrecovery and 
overrecovery determinations by any Federal agency for any other funds, 
from whatever source derived.
    ``(g) Treatment of Entity Operating Other Programs.--In applying 
this section and section 105 of the Indian Self-Determination and 
Education Assistance Act with respect to an Indian tribe or tribal 
organization that--
            ``(1) receives funds under this section for administrative 
        costs incurred in operating a contract or grant school or a 
        school operated under the Tribally Controlled Schools Act of 
        1988; and
            ``(2) operates one or more other programs under a contract 
        or grant provided under the Indian Self-Determination and 
        Education Assistance Act,
the Secretary shall ensure that the Indian tribe or tribal organization 
is provided with the full amount of the administrative costs that are 
associated with operating the contract or grant school, and of the 
indirect costs, that are associated with all of such other programs, 
provided that funds appropriated for implementation of this section 
shall be used only to supply the amount of the grant required to be 
provided by this section.
    ``(h) Definitions.--For purposes of this section:
            ``(1) Administrative cost.--(A) The term `administrative 
        cost' means the costs of necessary administrative functions 
        which--
                    ``(i) the tribe or tribal organization incurs as a 
                result of operating a tribal elementary or secondary 
                educational program;
                    ``(ii) are not customarily paid by comparable 
                Bureau operated programs out of direct program funds; 
                and
                    ``(iii) are either--
                            ``(I) normally provided for comparable 
                        Bureau programs by Federal officials using 
                        resources other than Bureau direct program 
                        funds; or
                            ``(II) are otherwise required of tribal 
                        self-determination program operators by law or 
                        prudent management practice.
            ``(B) The term `administrative cost' may include--
                    ``(i) contract or grant (or other agreement) 
                administration;
                    ``(ii) executive, policy, and corporate leadership 
                and decisionmaking;
                    ``(iii) program planning, development, and 
                management;
                    ``(iv) fiscal, personnel, property, and procurement 
                management;
                    ``(v) related office services and record keeping; 
                and
                    ``(vi) costs of necessary insurance, auditing, 
                legal, safety and security services.
            ``(2) Bureau elementary and secondary functions.--The term 
        `Bureau elementary and secondary functions' means--
                    ``(A) all functions funded at Bureau schools by the 
                Office;
                    ``(B) all programs--
                            ``(i) funds for which are appropriated to 
                        other agencies of the Federal Government; and
                            ``(ii) which are administered for the 
                        benefit of Indians through Bureau schools; and
                    ``(C) all operation, maintenance, and repair funds 
                for facilities and government quarters used in the 
                operation or support of elementary and secondary 
                education functions for the benefit of Indians, from 
                whatever source derived.
            ``(3) Direct cost base.--(A) Except as otherwise provided 
        in subparagraph (B), the direct cost base of a tribe or tribal 
        organization for the fiscal year is the aggregate direct cost 
        program funding for all tribal elementary or secondary 
        educational programs operated by the tribe or tribal 
        organization during--
                    ``(i) the second fiscal year preceding such fiscal 
                year; or
                    ``(ii) if such programs have not been operated by 
                the tribe or tribal organization during the two 
                preceding fiscal years, the first fiscal year preceding 
                such fiscal year.
            ``(B) In the case of Bureau elementary or secondary 
        education functions which have not previously been operated by 
        a tribe or tribal organization under contract, grant, or 
        agreement with the Bureau, the direct cost base for the initial 
        year shall be the projected aggregate direct cost program 
        funding for all Bureau elementary and secondary functions to be 
        operated by the tribe or tribal organization during that fiscal 
        year.
            ``(4) Maximum base rate.--The term `maximum base rate' 
        means 50 percent.
            ``(5) Minimum base rate.--The term `minimum base rate' 
        means 11 percent.
            ``(6) Standard direct cost base.--The term `standard direct 
        cost base' means $600,000.
            ``(7) Tribal elementary or secondary educational 
        programs.--The term `tribal elementary or secondary educational 
        programs' means all Bureau elementary and secondary functions, 
        together with any other Bureau programs or portions of programs 
        (excluding funds for social services that are appropriated to 
        agencies other than the Bureau and are expended through the 
        Bureau, funds for major subcontracts, construction, and other 
        major capital expenditures, and unexpended funds carried over 
        from prior years) which share common administrative cost 
        functions, that are operated directly by a tribe or tribal 
        organization under a contract, grant, or agreement with the 
        Bureau.
    ``(i) Studies for Determination of Factors Affecting Costs; Base 
Rates Limits; Standard Direct Cost Base; Report to Congress.--
            ``(1) Studies.--Not later than 120 days after the date of 
        the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), the Director 
        of the Office of Indian Education Programs shall--
                    ``(A) conduct such studies as may be needed to 
                establish an empirical basis for determining relevant 
                factors substantially affecting required administrative 
                costs of tribal elementary and secondary education 
                programs, using the formula set forth in subsection 
                (c); and
                    ``(B) conduct a study to determine--
                            ``(i) a maximum base rate which ensures 
                        that the amount of the grants provided under 
                        this section will provide adequate (but not 
                        excessive) funding of the administrative costs 
                        of the smallest tribal elementary or secondary 
                        educational programs;
                            ``(ii) a minimum base rate which ensures 
                        that the amount of the grants provided under 
                        this section will provide adequate (but not 
                        excessive) funding of the administrative costs 
                        of the largest tribal elementary or secondary 
                        educational programs; and
                            ``(iii) a standard direct cost base which 
                        is the aggregate direct cost funding level for 
                        which the percentage determined under 
                        subsection (c) will--
                                    ``(I) be equal to the median 
                                between the maximum base rate and the 
                                minimum base rate; and
                                    ``(II) ensure that the amount of 
                                the grants provided under this section 
                                will provide adequate (but not 
                                excessive) funding of the 
                                administrative costs of tribal 
                                elementary or secondary educational 
                                programs closest to the size of the 
                                program.
            ``(2) Guidelines.--The studies required under paragraph (1) 
        shall--
                    ``(A) be conducted in full consultation (in 
                accordance with section 1131) with--
                            ``(i) the tribes and tribal organizations 
                        that are affected by the application of the 
                        formula set forth in subsection (c); and
                            ``(ii) all national and regional Indian 
                        organizations of which such tribes and tribal 
                        organizations are typically members;
                    ``(B) be conducted onsite with a representative 
                statistical sample of the tribal elementary or 
                secondary educational programs under a contract entered 
                into with a nationally reputable public accounting and 
                business consulting firm;
                    ``(C) take into account the availability of skilled 
                labor; commodities, business and automatic data 
                processing services, related Indian preference and 
                Indian control of education requirements, and any other 
                market factors found substantially to affect the 
                administrative costs and efficiency of each such tribal 
                elementary or secondary educational program studied in 
                order to assure that all required administrative 
                activities can reasonably be delivered in a cost 
                effective manner for each such program, given an 
                administrative cost allowance generated by the values, 
                percentages, or other factors found in the studies to 
                be relevant in such formula;
                    ``(D) identify, and quantify in terms of 
                percentages of direct program costs, any general 
                factors arising from geographic isolation, or numbers 
                of programs administered, independent of program size 
                factors used to compute a base administrative cost 
                percentage in such formula; and
                    ``(E) identify any other incremental cost factors 
                substantially affecting the costs of required 
                administrative cost functions at any of the tribal 
                elementary or secondary educational programs studied 
                and determine whether the factors are of general 
                applicability to other such programs, and (if so) how 
                the factors may effectively be incorporated into such 
                formula.
            ``(3) Consultation with inspector general.--In carrying out 
        the studies required under this subsection, the Director shall 
        obtain the input of, and afford an opportunity to participate 
        to, the Inspector General of the Department of the Interior.
            ``(4) Consideration of delivery of administrative 
        services.--Determinations described in paragraph (2)(C) shall 
        be based on what is practicable at each location studied, given 
        prudent management practice, irrespective of whether required 
        administrative services were actually or fully delivered at 
        these sites, or whether other services were delivered instead, 
        during the period of the study.
            ``(5) Report.--Upon completion of the studies conducted 
        under paragraph (1), the Director shall submit to Congress a 
        report on the findings of the studies, together with 
        determinations based upon such studies that would affect the 
        definitions set forth under subsection (e) that are used in the 
        formula set forth in subsection (c).
            ``(6) Projection of costs.--The Secretary shall include in 
        the Bureau's justification for each appropriations request 
        beginning in the first fiscal year after the completion of the 
        studies conducted under paragraph (1), a projection of the 
        overall costs associated with the formula set forth in 
        subsection (c) for all tribal elementary or secondary education 
        programs which the Secretary expects to be funded in the fiscal 
        year for which the appropriations are sought.
            ``(7) Determination of program size.--For purposes of this 
        subsection, the size of tribal elementary or secondary 
        educational programs is determined by the aggregate direct cost 
        program funding level for all Bureau funded programs which 
        share common administrative cost functions.
    ``(j) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        such sums as necessary to carry out this section.
            ``(2) Reductions.--If the total amount of funds necessary 
        to provide grants to tribes and tribal organizations in the 
        amounts determined under subsection (b) for a fiscal year 
        exceeds the amount of funds appropriated to carry out this 
        section for such fiscal year, the Secretary shall reduce the 
        amount of each grant determined under subsection (b) for such 
        fiscal year by an amount that bears the same relationship to 
        such excess as the amount of such grants determined under 
        subsection (b) bears to the total of all grants determined 
        under subsection (b) section for all tribes and tribal 
        organizations for such fiscal year.
    ``(k) Applicability to Schools Operating Under Tribally Controlled 
Schools Act of 1988.--The provisions of this section shall also apply 
to those schools operating under the Tribally Controlled Schools Act of 
1988.

``SEC. 1129. DIVISION OF BUDGET ANALYSIS.

    ``(a) Establishment.--Not later than 12 months after the date of 
the enactment of the Public Education Reinvestment, Reinvention, and 
Responsibility Act (Three R's), the Secretary shall establish within 
the Office of Indian Education Programs a Division of Budget Analysis 
(hereinafter referred to as the `Division'). Such Division shall be 
under the direct supervision and control of the Director of the Office.
    ``(b) Functions.--In consultation with the tribal governing bodies 
and tribal school boards, the Director of the Office, through the 
Division, shall conduct studies, surveys, or other activities to gather 
demographic information on Bureau funded schools and project the amount 
necessary to provide Indian students in such schools the educational 
program set forth in this part.
    ``(c) Annual Reports.--Not later than the date that the Assistant 
Secretary for Indian Affairs makes the annual budget submission, for 
each fiscal year after the date of the enactment of the Public 
Education Reinvestment, Reinvention, and Responsibility Act (Three 
R's), the Director of the Office shall submit to the appropriate 
committees of Congress (including the Appropriations committees), all 
Bureau funded schools, and the tribal governing bodies of such schools, 
a report which shall contain--
            ``(1) projections, based upon the information gathered 
        pursuant to subparagraph (b) and any other relevant 
        information, of amounts necessary to provide Indian students in 
        Bureau funded schools the educational program set forth in this 
        part;
            ``(2) a description of the methods and formulas used to 
        calculate the amounts projected pursuant to paragraph (1); and
            ``(3) such other information as the Director of the Office 
        considers appropriate.
    ``(d) Use of Reports.--The Director of the Office and the Assistant 
Secretary for Indian Affairs shall use the annual report required by 
subsection (c) when preparing their annual budget submissions.

``SEC. 1130. UNIFORM DIRECT FUNDING AND SUPPORT.

    ``(a) Establishment of System and Forward Funding.--
            ``(1) In general.--The Secretary shall establish, by 
        regulation adopted in accordance with section 1138, a system 
        for the direct funding and support of all Bureau funded 
        schools. Such system shall allot funds in accordance with 
        section 1127. All amounts appropriated for distribution under 
        this section may be made available under paragraph (2).
            ``(2) Timing for use of funds.--(A) For the purposes of 
        affording adequate notice of funding available pursuant to the 
        allotments made under section 1127, amounts appropriated in an 
        appropriations Act for any fiscal year shall become available 
        for obligation by the affected schools on July 1 of the fiscal 
        year in which such amounts are appropriated without further 
        action by the Secretary, and shall remain available for 
        obligation through the succeeding fiscal year.
            ``(B) The Secretary shall, on the basis of the amount 
        appropriated in accordance with this paragraph--
                    ``(i) publish, not later than July 1 of the fiscal 
                year for which the funds are appropriated, allotments 
                to each affected school made under section 1127 of 85 
                percent of such appropriation; and
                    ``(ii) publish, not later than September 30 of such 
                fiscal year, the allotments to be made under section 
                1127 of the remaining 15 percent of such appropriation, 
                adjusted to reflect the actual student attendance.
            ``(3) Limitation.--(A) Notwithstanding any other provision 
        of law or regulation, the supervisor of a Bureau funded school 
        may expend an aggregate of not more than $50,000 of the amount 
        allotted the school under section 1127 to acquire materials, 
        supplies, equipment, services, operation, and maintenance for 
        the school without competitive bidding if--
                    ``(i) the cost for any single item purchased does 
                not exceed $15,000;
                    ``(ii) the school board approves the procurement;
                    ``(iii) the supervisor certifies that the cost is 
                fair and reasonable;
                    ``(iv) the documents relating to the procurement 
                executed by the supervisor or other school staff cite 
                this paragraph as authority for the procurement; and
                    ``(v) the transaction is documented in a journal 
                maintained at the school clearly identifying when the 
                transaction occurred, what was acquired and from whom, 
                the price paid, the quantities acquired, and any other 
                information the supervisor or school board considers 
                relevant.
            ``(B) Not later than 6 months after the date of the 
        enactment of the Public Education Reinvestment, Reinvention, 
        and Responsibility Act (Three R's), the Secretary shall cause 
        to be sent to each supervisor of a Bureau operated program and 
        school board chairperson, the education line officer or 
        officers of each agency and area, and the Bureau Division in 
        charge of procurement, at both the local and national levels, 
        notice of this paragraph.
            ``(C) The Director shall be responsible for determining the 
        application of this paragraph, including the authorization of 
        specific individuals to carry out this paragraph, and shall be 
        responsible for the provision of guidelines on the use of this 
        paragraph and adequate training on such guidelines.
            ``(4) Effect of sequestration order.--If a sequestration 
        order issued under the Balanced Budget and Emergency Deficit 
        Control Act of 1985 reduces the amount of funds available for 
        allotment under section 1127 for any fiscal year by more than 7 
        percent of the amount of funds available for allotment under 
        such section during the preceding fiscal year--
                    ``(A) to fund allotments under section 1127, the 
                Secretary, notwithstanding any other law, may use--
                            ``(i) funds appropriated for the operation 
                        of any Bureau school that is closed or 
                        consolidated; and
                            ``(ii) funds appropriated for any program 
                        that has been curtailed at any Bureau school; 
                        and
                    ``(B) the Secretary may waive the application of 
                the provisions of section 1121(h) with respect to the 
                closure or consolidation of a school, or the 
                curtailment of a program at a school, during such 
                fiscal year if the funds described in clauses (i) and 
                (ii) of subparagraph (A) with respect to such school 
                are used to fund allotments made under section 1127 for 
                such fiscal year.
    ``(b) Local Financial Plans for Expenditure of Funds.--
            ``(1) Plan required.--(A) In the case of all Bureau 
        operated schools, allotted funds shall be expended on the basis 
        of local financial plans which ensure meeting the accreditation 
        requirements or standards for the school established pursuant 
        to section 1121 and which shall be prepared by the local school 
        supervisor in active consultation with the local school board 
        for each school. The local school board for each school shall 
        have the authority to ratify, reject, or amend such financial 
        plan, and expenditures thereunder, and, on its own 
        determination or in response to the supervisor of the school, 
        to revise such financial plan to meet needs not foreseen at the 
        time of preparation of the financial plan.
            ``(B) The supervisor--
                    ``(i) shall put into effect the decisions of the 
                school board;
                    ``(ii) shall provide the appropriate local union 
                representative of the education employees with copies 
of proposed draft financial plans and all amendments or modifications 
thereto, at the same time such copies are submitted to the local school 
board; and
                    ``(iii) may appeal any such action of the local 
                school board to the appropriate education line officer 
                of the Bureau agency by filing a written statement 
                describing the action and the reasons the supervisor 
                believes such action should be overturned. A copy of 
                such statement shall be submitted to the local school 
                board and such board shall be afforded an opportunity 
                to respond, in writing, to such appeal. After reviewing 
                such written appeal and response, the appropriate 
                education line officer may, for good cause, overturn 
                the action of the local school board. The appropriate 
                education line officer shall transmit the determination 
                of such appeal in the form of a written opinion to such 
                board and to such supervisor identifying the reasons 
                for overturning such action.
    ``(c) Use of Self-Determination Grants Funds.--Funds for self-
determination grants under section 103(a)(2) of the Indian Self-
Determination and Education Assistance Act shall not be used for 
providing technical assistance and training in the field of education 
by the Bureau unless such services are provided in accordance with a 
plan, agreed to by the tribe or tribes affected and the Bureau, under 
which control of education programs is intended to be transferred to 
such tribe or tribes within a specific period of time negotiated under 
such agreement. The Secretary may approve applications for funding 
tribal divisions of education and development of tribal codes of 
education from funds appropriated pursuant to section 104(a) of such 
Act.
    ``(d) Technical Assistance and Training.--In the exercise of its 
authority under this section, a local school board may request 
technical assistance and training from the Secretary, and the Secretary 
shall, to the greatest extent possible, provide such services, and make 
appropriate provisions in the budget of the Office for such services.
    ``(e) Summer Program of Academic and Support Services.--
            ``(1) In general.--A financial plan under subsection (b) 
        for a school may include, at the discretion of the local 
        administrator and the school board of such school, a provision 
        for a summer program of academic and support services for 
        students of the school. Any such program may include activities 
        related to the prevention of alcohol and substance abuse. The 
        Assistant Secretary for Indian Affairs shall provide for the 
        utilization of any such school facility during any summer in 
        which such utilization is requested.
            ``(2) Use of other funds.--Notwithstanding any other 
        provision of law, funds authorized under the Act of April 16, 
        1934, and this Act may be used to augment the services provided 
        in each summer program at the option, and under the control, of 
        the tribe or Indian controlled school receiving such funds.
            ``(3) Technical assistance and program coordination.--The 
        Assistant Secretary for Indian Affairs, acting through the 
        Director of the Office, shall provide technical assistance and 
        coordination for any program described in paragraph (1) and 
        shall, to the extent possible, encourage the coordination of 
        such programs with any other summer programs that might benefit 
        Indian youth, regardless of the funding source or 
        administrative entity of any such program.
    ``(f) Cooperative Agreements.--
            ``(1) In general.--From funds allotted to a Bureau school 
        under section 1127, the Secretary shall, if specifically 
        requested by the tribal governing body (as defined in section 
        1141), implement any cooperative agreement entered into between 
        the tribe, the Bureau school board, and the local public school 
        district which meets the requirements of paragraph (2) and 
        involves the school. The tribe, the Bureau school board, and 
        the local public school district shall determine the terms of 
        the agreement. Such agreement may encompass coordination of all 
        or any part of the following:
                    ``(A) Academic program and curriculum, unless the 
                Bureau school is currently accredited by a State or 
                regional accrediting entity and would not continue to 
                be so accredited.
                    ``(B) Support services, including procurement and 
                facilities maintenance.
                    ``(C) Transportation.
            ``(2) Equal benefit and burden.--Each agreement entered 
        into pursuant to the authority provided in paragraph (1) shall 
        confer a benefit upon the Bureau school commensurate with the 
        burden assumed, though this requirement shall not be construed 
        so as to require equal expenditures or an exchange of similar 
        services.
    ``(g) Product or Result of Student Projects.--Notwithstanding any 
other provision of law, where there is agreement on action between the 
superintendent and the school board of a Bureau funded school, the 
product or result of a project conducted in whole or in major part by a 
student may be given to that student upon the completion of such 
project.
    ``(h) Not Considered Federal Funds for Matching Requirements.--
Notwithstanding any other provision of law, funds received by a Bureau 
funded school under this title shall not be considered Federal funds 
for the purposes of meeting a matching funds requirement for any 
Federal program.

``SEC. 1131. POLICY FOR INDIAN CONTROL OF INDIAN EDUCATION.

    ``(a) Facilitation of Indian Control.--It shall be the policy of 
the Secretary and the Bureau, in carrying out the functions of the 
Bureau, to facilitate tribal control of Indian affairs in all matters 
relating to education.
    ``(b) Consultation With Tribes.--
            ``(1) In general.--All actions under this Act shall be done 
        with active consultation with tribes.
            ``(2) Requirements.--The consultation required under 
        paragraph (1) means a process involving the open discussion and 
        joint deliberation of all options with respect to potential 
issues or changes between the Bureau and all interested parties. During 
such discussions and joint deliberations, interested parties (including 
tribes and school officials) shall be given an opportunity to present 
issues including proposals regarding changes in current practices or 
programs which will be considered for future action by the Bureau. All 
interested parties shall be given an opportunity to participate and 
discuss the options presented or to present alternatives, with the 
views and concerns of the interested parties given effect unless the 
Secretary determines, from information available from or presented by 
the interested parties during one or more of the discussions and 
deliberations, that there is a substantial reason for another course of 
action. The Secretary shall submit to any Member of Congress, within 18 
days of the receipt of a written request by such Member, a written 
explanation of any decision made by the Secretary which is not 
consistent with the views of the interested parties.

``SEC. 1132. INDIAN EDUCATION PERSONNEL.

    ``(a) In General.--Chapter 51, subchapter III of chapter 53, and 
chapter 63 of title 5, United States Code, relating to classification, 
pay and leave, respectively, and the sections of such title relating to 
the appointment, promotion, hours of work, and removal of civil service 
employees, shall not apply to educators or to education positions (as 
defined in subsection (p)).
    ``(b) Regulations.--Not later than 60 days after the date of the 
enactment of the Public Education Reinvestment, Reinvention, and 
Responsibility Act (Three R's), the Secretary shall prescribe 
regulations to carry out this section. Such regulations shall include--
            ``(1) the establishment of education positions;
            ``(2) the establishment of qualifications for educators and 
        education personnel;
            ``(3) the fixing of basic compensation for educators and 
        education positions;
            ``(4) the appointment of educators;
            ``(5) the discharge of educators;
            ``(6) the entitlement of educators to compensation;
            ``(7) the payment of compensation to educators;
            ``(8) the conditions of employment of educators;
            ``(9) the leave system for educators;
            ``(10) the annual leave and sick leave for educators; and
            ``(11) such matters as may be appropriate.
    ``(c) Qualifications of Educators.--
            ``(1) Requirements.--In prescribing regulations to govern 
        the qualifications of educators, the Secretary shall require--
                    ``(A)(i) that lists of qualified and interviewed 
                applicants for education positions be maintained in 
                each agency and area office of the Bureau from among 
                individuals who have applied at the agency or area 
                level for an education position or who have applied at 
                the national level and have indicated in such 
                application an interest in working in certain areas or 
                agencies; and
                    ``(ii) that a list of qualified and interviewed 
                applicants for education positions be maintained in the 
                Office from among individuals who have applied at the 
                national level for an education position and who have 
                expressed interest in working in an education position 
                anywhere in the United States;
                    ``(B) that a local school board shall have the 
                authority to waive on a case-by-case basis, any formal 
                education or degree qualifications established by 
                regulation pursuant to subsection (b)(2), in order for 
                a tribal member to be hired in an education position to 
                teach courses on tribal culture and language and that 
                subject to subsection (e)(2), a determination by a 
                school board that such a person be hired shall be 
                instituted supervisor; and
                    ``(C) that it shall not be a prerequisite to the 
                employment of an individual in an education position at 
                the local level that such individual's name appear on 
                the national list maintained pursuant to subparagraph 
                (A)(ii) or that such individual has applied at the 
                national level for an education position.
            ``(2) Exception for certain temporary employment.--The 
        Secretary may authorize the temporary employment in an 
        education position of an individual who has not met the 
        certification standards established pursuant to regulations, if 
        the Secretary determines that failure to do so would result in 
        that position remaining vacant.
    ``(d) Hiring of Educators.--
            ``(1) Requirements.--In prescribing regulations to govern 
        the appointment of educators, the Secretary shall require--
                    ``(A)(i) that educators employed in a Bureau 
                operated school (other than the supervisor of the 
                school) shall be hired by the supervisor of the school. 
                In cases where there are no qualified applicants 
                available, such supervisor may consult the national 
                list maintained pursuant to subsection (c)(1)(A)(ii);
                    ``(ii) each school supervisor shall be hired by the 
                education line officer of the agency office of the 
                Bureau in which the school is located;
                    ``(iii) educators employed in an agency office of 
                the Bureau shall be hired by the superintendent for 
                education of the agency office; and
                    ``(iv) each education line officer and educators 
                employed in the Office of the Director of Indian 
                Education Programs shall be hired by the Director;
                    ``(B) that before an individual is employed in an 
                education position in a school by the supervisor of a 
                school (or with respect to the position of supervisor, 
                by the appropriate agency education line officer), the 
                local school board for the school shall be consulted. A 
                determination by such school board that such individual 
                should or should not be so employed shall be instituted 
                by the supervisor (or with respect to the position of 
supervisor, by the agency superintendent for education);
                    ``(C) that before an individual may be employed in 
                an education position at the agency level, the 
                appropriate agency school board shall be consulted, and 
                that a determination by such school board that such 
                individual should or should not be employed shall be 
                instituted by the agency superintendent for education; 
                and
                    ``(D) that before an individual may be employed in 
                an education position in the Office of the Director 
                (other than the position of Director), the national 
                school boards representing all Bureau schools shall be 
                consulted.
            ``(2) Information regarding application at national 
        level.--Any individual who applies at the local level for an 
        education position shall state on such individual's application 
        whether or not such individual has applied at the national 
        level for an education position in the Bureau. If such 
        individual is employed at the local level, such individual's 
        name shall be immediately forwarded to the Secretary, who 
        shall, as soon as practicable but in no event in more than 30 
        days, ascertain the accuracy of the statement made by such 
        individual pursuant to the first sentence of this paragraph. 
        Notwithstanding subsection (e), if the individual's statement 
        is found to have been false, such individual, at the 
        Secretary's discretion, may be disciplined or discharged. If 
        the individual has applied at the national level for an 
        education position in the Bureau, the appointment of such 
        individual at the local level shall be conditional for a period 
        of 90 days, during which period the Secretary may appoint a 
        more qualified individual (as determined by the Secretary) from 
        the list maintained at the national level pursuant to 
        subsection (c)(1)(A)(ii) to the position to which such 
        individual was appointed.
            ``(3) Statutory construction.--Except as expressly 
        provided, nothing in this section shall be construed as 
        conferring upon local school boards authority over, or control 
        of, educators at Bureau funded schools or the authority to 
        issue management decisions.
    ``(e) Discharge and Conditions of Employment of Educators.--
            ``(1) Regulations.--In prescribing regulations to govern 
        the discharge and conditions of employment of educators, the 
        Secretary shall require--
                    ``(A) that procedures be established for the rapid 
                and equitable resolution of grievances of educators;
                    ``(B) that no educator may be discharged without 
                notice of the reasons therefore and opportunity for a 
                hearing under procedures that comport with the 
                requirements of due process; and
                    ``(C) that educators employed in Bureau schools be 
                notified 30 days prior to the end of the school year 
                whether their employment contract will be renewed for 
                the following year.
            ``(2) Procedures for discharge.--The supervisor of a Bureau 
        school may discharge (subject to procedures established under 
        paragraph (1)(B)) for cause (as determined under regulations 
        prescribed by the Secretary) any educator employed in such 
        school. Upon giving notice of proposed discharge to an 
        educator, the supervisor involved shall immediately notify the 
        local school board for the school of such action. A 
        determination by the local school board that such educator 
        shall not be discharged shall be followed by the supervisor. 
        The supervisor shall have the right to appeal such action to 
        the education line officer of the appropriate agency office of 
        the Bureau. Upon such an appeal, the agency education line 
        officer may, for good cause and in writing to the local school 
        board, overturn the determination of the local school board 
        with respect to the employment of such individual.
            ``(3) Recommendations of school boards for discharge.--Each 
        local school board for a Bureau school shall have the right--
                    ``(A) to recommend to the supervisor of such school 
                that an educator employed in the school be discharged; 
                and
                    ``(B) to recommend to the education line officer of 
                the appropriate agency office of the Bureau and to the 
                Director of the Office, that the supervisor of the 
                school be discharged.
    ``(f) Applicability of Indian Preference Laws.--
            ``(1) In general.--Notwithstanding any provision of the 
        Indian preference laws, such laws shall not apply in the case 
        of any personnel action under this section respecting an 
        applicant or employee not entitled to Indian preference if each 
        tribal organization concerned grants a written waiver of the 
        application of such laws with respect to such personnel action 
        and states that such waiver is necessary. This paragraph shall 
        not relieve the Bureau's responsibility to issue timely and 
        adequate announcements and advertisements concerning any such 
        personnel action if such action is intended to fill a vacancy 
        (no matter how such vacancy is created).
            ``(2) Tribal organization defined.--For purposes of this 
        subsection, the term `tribal organization' means--
                    ``(A) the recognized governing body of any Indian 
                tribe, band, nation, pueblo, or other organized 
                community, including a Native village (as defined in 
                section 3(c) of the Alaska Native Claims Settlement 
                Act); or
                    ``(B) in connection with any personnel action 
                referred to in this subsection, any local school board 
                as defined in section 1141 which has been delegated by 
                such governing body the authority to grant a waiver 
                under this subsection with respect to personnel action.
            ``(3) Indian preference law defined.--The term `Indian 
        preference laws' means section 12 of the Act of June 18, 1934 
        or any other provision of law granting a preference to Indians 
        in promotions and other personnel actions. Such term shall not 
        include section 7(b) of the Indian Self-Determination and 
        Education Assistance Act.
    ``(g) Compensation or Annual Salary.--
            ``(1) In general.--(A) Except as otherwise provided in this 
        section, the Secretary shall fix the basic compensation for 
        educators and education positions at rates in effect under the 
        General Schedule for individuals with comparable 
        qualifications, and holding comparable positions, to whom 
        chapter 51 of title 5, United States Code, is applicable or on 
        the basis of the Federal Wage System schedule in effect for the 
        locality, and for the comparable positions, the rates of 
        compensation in effect for the senior executive service.
            ``(B) The Secretary shall establish the rate of basic 
        compensation, or annual salary rates, for the positions of 
        teachers and counselors (including dormitory counselors and 
        home-living counselors) at the rates of basic compensation 
        applicable (on the date of the enactment of the Public 
        Education Reinvestment, Reinvention, and Responsibility Act 
        (Three R's) and thereafter) to comparable positions in the 
        overseas schools under the Defense Department Overseas Teachers 
        Pay Act. The Secretary shall allow the local school boards 
        authority to implement only the aspects of the Defense 
Department Overseas Teacher pay provisions that are considered 
essential for recruitment and retention. Implementation of such 
provisions shall not be construed to require the implementation of the 
Act in its entirety.
            ``(C)(i) Beginning with the fiscal year following the date 
        of the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), each school 
        board may set the rate of compensation or annual salary rate 
        for teachers and counselors (including academic counselors) who 
        are new hires at the school and who have not worked at the 
        school on the date of implementation of this provision, at 
        rates consistent with the rates paid for individuals in the 
        same positions, with the same tenure and training, in any other 
        school within whose boundaries the Bureau school lies. In 
        instances where the adoption of such rates cause a reduction in 
        the payment of compensation from that which was in effect for 
        the fiscal year following the date of the enactment of the 
        Public Education Reinvestment, Reinvention, and Responsibility 
        Act (Three R's), the new rate may be applied to the 
        compensation of employees of the school who worked at the 
        school on of the date of the enactment of that Act by applying 
        those rates to each contract renewal such that the reduction 
        takes effect in three equal installments. Where adoption of 
        such rates lead to an increase in the payment of compensation 
        from that which was in effect for the fiscal year following the 
        date of the enactment of the Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's), the school 
        board may make such rates applicable at the next contract 
        renewal such that either--
                    ``(I) the increase occurs in its entirety; or
                    ``(II) the increase is applied in three equal 
                installments.
            ``(ii) The establishment of rates of basic compensation and 
        annual salary rates under subparagraphs (B) and (C) shall not 
        preclude the use of regulations and procedures used by the 
        Bureau prior to April 28, 1988, in making determinations 
        regarding promotions and advancements through levels of pay 
        that are based on the merit, education, experience, or tenure 
        of the educator.
            ``(D) The establishment of rates of basic compensation and 
        annual salary rates under subparagraphs (B) and (C) shall not 
        affect the continued employment or compensation of an educator 
        who was employed in an education position on October 31, 1979, 
        and who did not make an election under subsection (p) as in 
        effect on January 1, 1990.
            ``(2) Post-differential rates.--(A) The Secretary may pay a 
        post-differential rate not to exceed 25 percent of the rate of 
        basic compensation, on the basis of conditions of environment 
        or work which warrant additional pay as a recruitment and 
        retention incentive.
            ``(B)(i) Upon the request of the supervisor and the local 
        school board of a Bureau school, the Secretary shall grant the 
        supervisor of the school authorization to provide one or more 
        post-differentials under subparagraph (A) unless the Secretary 
        determines for clear and convincing reasons (and advises the 
        board in writing of those reasons) that certain of the 
        requested post-differentials should be disapproved or decreased 
        because there is no disparity of compensation for the involved 
        employees or positions in the Bureau school, as compared with 
        the nearest public school, that is either--
                    ``(I) at least 5 percent; or
                    ``(II) less than 5 percent and affects the 
                recruitment or retention of employees at the school.
            ``(ii) A request under clause (i) shall be deemed granted 
        at the end of the 60th day after the request is received in the 
        Central Office of the Bureau unless before that time the 
        request is approved, approved with modification, or disapproved 
        by the Secretary.
            ``(iii) The Secretary or the supervisor of a Bureau school 
        may discontinue or decrease a post-differential authorized 
        under this subparagraph at the beginning of a school year if--
                    ``(I) the local school board requests that such 
                differential be discontinued or decreased; or
                    ``(II) the Secretary or the supervisor determines 
                for clear and convincing reasons (and advises the board 
                in writing of those reasons) that there is no disparity 
                of compensation that would affect the recruitment or 
                retention of employees at the school after the 
                differential is discontinued or decreased.
            ``(iv) On or before February 1 of each year, the Secretary 
        shall submit to Congress a report describing the requests and 
        grants of authority under this subparagraph during the previous 
        year and listing the positions contracted under those grants of 
        authority.
    ``(h) Liquidation of Remaining Leave Upon Termination.--Upon 
termination of employment with the Bureau, any annual leave remaining 
to the credit of an individual within the purview of this section shall 
be liquidated in accordance with sections 5551(a) and 6306 of title 5, 
United States Code, except that leave earned or accrued under 
regulations prescribed pursuant to subsection (b)(10) of this section 
shall not be so liquidated.
    ``(i) Transfer of Remaining Sick Leave Upon Transfer, Promotion, or 
Reemployment.--In the case of any educator who is transferred, 
promoted, or reappointed, without break in service, to a position in 
the Federal Government under a different leave system, any remaining 
leave to the credit of such person earned or credited under the 
regulations prescribed pursuant to subsection (b)(10) shall be 
transferred to such person's credit in the employing agency on an 
adjusted basis in accordance with regulations which shall be prescribed 
by the Office of Personnel Management.
    ``(j) Ineligibility for Employment of Voluntarily Terminated 
Educators.--An educator who voluntarily terminates employment with the 
Bureau before the expiration of the existing employment contract 
between such educator and the Bureau shall not be eligible to be 
employed in another education position in the Bureau during the 
remainder of the term of such contract.
    ``(k) Dual Compensation.--In the case of any educator employed in 
an education position described in subsection (l)(1)(A) who--
            ``(1) is employed at the close of a school year;
            ``(2) agrees in writing to serve in such position for the 
        next school year; and
            ``(3) is employed in another position during the recess 
        period immediately preceding such next school year, or during 
        such recess period receives additional compensation referred to 
        in section 5533 of title 5, United States Code, relating to 
        dual compensation,
shall not apply to such educator by reason of any such employment 
during a recess period for any receipt of additional compensation.
    ``(l) Voluntary Services.--Notwithstanding section 1342 of title 
31, United States Code, the Secretary may, subject to the approval of 
the local school board concerned, accept voluntary services on behalf 
of Bureau schools. Nothing in this title shall be construed to require 
Federal employees to work without compensation or to allow the use of 
volunteer services to displace or replace Federal employees. An 
individual providing volunteer services under this section is a Federal 
employee only for purposes of chapter 81 of title 5, United States 
Code, and chapter 171 of title 28, United States Code.
    ``(m) Proration of Pay.--
            ``(1) Election of employee.--Notwithstanding any other 
        provision of law, including laws relating to dual compensation, 
        the Secretary, at the election of the employee, shall prorate 
        the salary of an employee employed in an education position for 
        the academic school year over the entire 12-month period. Each 
        educator employed for the academic school year shall annually 
        elect to be paid on a 12-month basis or for those months while 
        school is in session. No educator shall suffer a loss of pay or 
        benefits, including benefits under unemployment or other 
        Federal or federally assisted programs, because of such 
        election.
            ``(2) Change of election.--During the course of such year 
        the employee may change election once.
            ``(3) Lump sum payment.--That portion of the employee's pay 
        which would be paid between academic school years may be paid 
        in a lump sum at the election of the employee.
            ``(4) Definitions.--For purposes of this subsection, the 
        terms `educator' and `education position' have the meanings 
        contained in paragraphs (1) and (2) of subsection (o). This 
        subsection applies to those individuals employed under the 
        provisions of section 1132 of this title or title 5, United 
        States Code.
    ``(n) Extracurricular Activities.--
            ``(1) Stipend.--Notwithstanding any other provision of law, 
        the Secretary may provide, for each Bureau area, a stipend in 
        lieu of overtime premium pay or compensatory time off. Any 
        employee of the Bureau who performs additional activities to 
        provide services to students or otherwise support the school's 
        academic and social programs may elect to be compensated for 
        all such work on the basis of the stipend. Such stipend shall 
        be paid as a supplement to the employee's base pay.
            ``(2) Election not to receive stipend.--If an employee 
        elects not to be compensated through the stipend established by 
        this subsection, the appropriate provisions of title 5, United 
        States Code, shall apply.
            ``(3) Applicability of subsection.--This subsection applies 
        to all Bureau employees, whether employed under section 1132 of 
        this title or title 5, United States Code.
    ``(o) Definitions.--For the purpose of this section--
            ``(1) Education position.--The term `education position' 
        means a position in the Bureau the duties and responsibilities 
        of which--
                    ``(A) are performed on a school-year basis 
                principally in a Bureau school and involve--
                            ``(i) classroom or other instruction or the 
                        supervision or direction of classroom or other 
                        instruction;
                            ``(ii) any activity (other than teaching) 
                        which requires academic credits in educational 
                        theory and practice equal to the academic 
                        credits in educational theory and practice 
                        required for a bachelor's degree in education 
                        from an accredited institution of higher 
                        education;
                            ``(iii) any activity in or related to the 
                        field of education notwithstanding that 
                        academic credits in educational theory and 
                        practice are not a formal requirement for the 
                        conduct of such activity; or
                            ``(iv) support services at, or associated 
                        with, the site of the school; or
                    ``(B) are performed at the agency level of the 
                Bureau and involve the implementation of education-
                related programs other than the position for agency 
                superintendent for education.
            ``(2) Educator.--The term `educator' means an individual 
        whose services are required, or who is employed, in an 
        education position.
    ``(p) Covered Individuals; Election.--This section shall apply with 
respect to any educator hired after November 1, 1979 (and to any 
educator who elected for coverage under that provision after November 
1, 1979), and to the position in which such individual is employed. The 
enactment of this section shall not affect the continued employment of 
an individual employed on October 31, 1979, in an education position, 
or such person's right to receive the compensation attached to such 
position.

``SEC. 1133. COMPUTERIZED MANAGEMENT INFORMATION SYSTEM.

    ``(a) Establishment of System.--Not later than July 1, 2001, the 
Secretary shall establish within the Office, a computerized management 
information system, which shall provide processing and information to 
the Office. The information provided shall include information 
regarding--
            ``(1) student enrollment;
            ``(2) curriculum;
            ``(3) staffing;
            ``(4) facilities;
            ``(5) community demographics;
            ``(6) student assessment information;
            ``(7) information on the administrative and program costs 
        attributable to each Bureau program, divided into discreet 
        elements;
            ``(8) relevant reports;
            ``(9) personnel records;
            ``(10) finance and payroll; and
            ``(11) such other items as the Secretary deems appropriate.
    ``(b) Implementation of System.--Not later than July 1, 2002, the 
Secretary shall complete implementation of such a system at each field 
office and Bureau funded school.

``SEC. 1134. UNIFORM EDUCATION PROCEDURES AND PRACTICES.

    ``The Secretary shall cause the various divisions of the Bureau to 
formulate uniform procedures and practices with respect to such 
concerns of those divisions as relate to education, and shall report 
such practices and procedures to the Congress.

``SEC. 1135. RECRUITMENT OF INDIAN EDUCATORS.

    ``The Secretary shall institute a policy for the recruitment of 
qualified Indian educators and a detailed plan to promote employees 
from within the Bureau. Such plan shall include opportunities for 
acquiring work experience prior to actual work assignment.

``SEC. 1136. BIENNIAL REPORT; AUDITS.

    ``(a) Biennial Reports.--The Secretary shall submit to each 
appropriate committee of Congress, all Bureau funded schools, and the 
tribal governing bodies of such schools, a detailed biennial report on 
the state of education within the Bureau and any problems encountered 
in Indian education during the 2-year period covered by the report. 
Such report shall contain suggestions for the improvement of the Bureau 
educational system and for increasing tribal or local Indian control of 
such system. Such report shall also include the current status of 
tribally controlled community colleges. The annual budget submission 
for the Bureau's education programs shall include--
            ``(1) information on the funds provided to previously 
        private schools under section 208 of the Indian Self-
        Determination and Education Assistance Act, and recommendations 
        with respect to the future use of such funds;
            ``(2) the needs and costs of operations and maintenance of 
        tribally controlled community colleges eligible for assistance 
        under the Tribally Controlled Community College Assistance Act 
        of 1978 and recommendations with respect to meeting such needs 
        and costs; and
            ``(3) the plans required by sections 1121 (g), 1122(c), and 
        1125(b).
    ``(b) Financial and Compliance Audits.--The Inspector General of 
the Department of the Interior shall establish a system to ensure that 
financial and compliance audits are conducted of each Bureau operated 
school at least once in every 3 years. Audits of Bureau schools shall 
be based upon the extent to which such school has complied with its 
local financial plan under section 1130.

``SEC. 1137. RIGHTS OF INDIAN STUDENTS.

    ``The Secretary shall prescribe such rules and regulations as are 
necessary to ensure the constitutional and civil rights of Indian 
students attending Bureau funded schools, including such students' 
right to privacy under the laws of the United States, such students' 
right to freedom of religion and expression, and such students' right 
to due process in connection with disciplinary actions, suspensions, 
and expulsions.

``SEC. 1138. REGULATIONS.

    ``(a) In General.--The Secretary is authorized to issue only such 
regulations as are necessary to ensure compliance with the specific 
provision of this Act. The Secretary shall publish proposed regulations 
in the Federal Register, shall provide a period of not less than 90 
days for public comment thereon, and shall place in parentheses after 
each regulatory section the citation to any statutory provision 
providing authority to promulgate such regulatory provision.
    ``(b) Miscellaneous.--
            ``(1) Construction.--The provisions of this Act shall 
        supersede any conflicting provisions of law (including any 
        conflicting regulations) in effect on the day before the date 
        of the enactment of this Act and the Secretary is authorized to 
        repeal any regulation inconsistent with the provisions of this 
        Act.
            ``(2) Legal authority to be stated.--Regulations issued to 
        implement this Act shall contain, immediately following each 
        substantive provision of such regulations, citations to the 
        particular section or sections of statutory law or other legal 
        authority upon which provision is based.

``SEC. 1138A. REGIONAL MEETINGS AND NEGOTIATED RULEMAKING.

    ``(a) Meetings.--
            ``(1) In general.--The Secretary shall obtain tribal 
        involvement in the development of proposed regulations under 
        this part and the Tribally Controlled Schools Act of 1988. The 
        Secretary shall obtain the advice of and recommendations from 
        representatives of Indian tribes with Bureau-funded schools on 
        their reservations, Indian tribes whose children attend Bureau 
        funded off-reservation boarding schools, school boards, 
        administrators or employees of Bureau-funded schools, and 
        parents and teachers of students enrolled in Bureau-funded 
        schools.
            ``(2) Issues.--The Secretary shall provide for a 
        comprehensive discussion and exchange of information concerning 
        the implementation of this part and the Tribally Controlled 
        Schools Act of 1988 through such mechanisms as regional 
        meetings and electronic exchanges of information. The Secretary 
        shall take into account the information received through such 
        mechanisms in the development of proposed regulations and shall 
        publish a summary of such information in the Federal Register 
        together with such proposed regulations.
    ``(b) Draft Regulations.--
            ``(1) In general.--After obtaining the advice and 
        recommendations described in subsection (a)(1) and before 
        publishing proposed regulations in the Federal Register, the 
        Secretary shall prepare draft regulations implementing this 
        part and the Tribally Controlled Schools Act of 1988 and shall 
        submit such regulations to a negotiated rulemaking process. 
        Participants in the negotiations process shall be chosen by the 
        Secretary from individuals nominated by the entities described 
        in subsection (a)(1). To the maximum extent possible, the 
        Secretary shall ensure that the tribal representative 
        membership chosen pursuant to the preceding sentence reflects 
        the proportionate share of students from tribes served by the 
        Bureau-funded school system. The negotiation process shall be 
        conducted in a timely manner in order that the final 
        regulations may issued by the Secretary no later than 18 months 
        after the enactment of this section.
            ``(2) Notification to congress.--If draft regulations 
        implementing this part and the Tribally Controlled Schools Act 
        of 1988 are not issued in final form by the deadline provided 
        in paragraph (1), the Secretary shall notify the appropriate 
        committees of Congress of which draft regulations were not 
        issued in final form by the deadline and the reason such final 
        regulations were not issued.
            ``(3) Expansion of negotiated rulemaking.--All regulations 
        pertaining to this part and the Tribally Controlled Schools Act 
        of 1988 that are promulgated after the date of the enactment of 
        this subsection shall be subject to a negotiated rulemaking 
        (including the selection of the regulations to be negotiated), 
        unless the Secretary determines that applying such a 
        requirement with respect to given regulations is impracticable, 
        unnecessary, or contrary to the public interest (within the 
        meaning of section 553(b)(3)(B) of title 5), and publishes the 
        basis for such determination in the Federal Register at the 
        same time as the proposed regulations in question are first 
        published. All published proposed regulations shall conform to 
        agreements resulting from such negotiated rulemaking unless the 
        Secretary reopens the negotiated rulemaking process or provides 
        a written explanation to the participants in that process why 
        the Secretary has decided to depart from such agreements. Such 
        negotiated rulemaking shall be conducted in accordance with the 
        provisions of subsection (a), and the Secretary shall 
ensure that a clear and reliable record of agreements reached during 
the negotiation process is maintained.
    ``(c) Applicability of Federal Advisory Committee Act.--The Federal 
Advisory Committee Act shall apply to activities carried out under this 
section.

``SEC. 1139. EARLY CHILDHOOD DEVELOPMENT PROGRAM.

    ``(a) In General.--The Secretary shall provide grants to tribes, 
tribal organizations, and consortia of tribes and tribal organizations 
to fund early childhood development programs that are operated by such 
tribes, organizations, or consortia.
    ``(b) Amount of Grants.--
            ``(1) In general.--The total amount of the grants provided 
        under subsection (a) with respect to each tribe, tribal 
        organization, or consortium of tribes or tribal organizations 
        for each fiscal year shall be equal to the amount which bears 
        the same relationship to the total amount appropriated under 
        the authority of subsection (g) for such fiscal year (less 
        amounts provided under subsection (f)) as--
                  ``(A) the total number of children under 6 years of 
                age who are members of--
                            ``(i) such tribe;
                            ``(ii) the tribe that authorized such 
                        tribal organization; or
                            ``(iii) any tribe that--
                                    ``(I) is a member of such 
                                consortium; or
                                    ``(II) authorizes any tribal 
                                organization that is a member of such 
                                consortium; bears to
                    ``(B) the total number of all children under 6 
                years of age who are members of any tribe that--
                            ``(i) is eligible to receive funds under 
                        subsection (a);
                            ``(ii) is a member of a consortium that is 
                        eligible to receive such funds; or
                            ``(iii) authorizes a tribal organization 
                        that is eligible to receive such funds.
            ``(2) Limitation.--No grant may be provided under 
        subsection (a)--
                    ``(A) to any tribe that has less than 500 members;
                    ``(B) to any tribal organization which is 
                authorized--
                            ``(i) by only one tribe that has less than 
                        500 members; or
                            ``(ii) by one or more tribes that have a 
                        combined total membership of less than 500 
                        members; or
                    ``(C) to any consortium composed of tribes, or 
                tribal organizations authorized by tribes, that have a 
                combined total tribal membership of less than 500 
                members.
    ``(c) Application.--
            ``(1) In general.--A grant may be provided under subsection 
        (a) to a tribe, tribal organization, or consortia of tribes and 
        tribal organizations only if the tribe, organization, or 
        consortia submits to the Secretary an application for the grant 
        at such time and in such form as the Secretary shall prescribe.
            ``(2) Contents.--Applications submitted under paragraph (1) 
        shall set forth the early childhood development program that 
        the applicant desires to operate.
    ``(d) Requirement of Programs Funded.--The early childhood 
development programs that are funded by grants provided under 
subsection (a)--
            ``(1) shall coordinate existing programs and may provide 
        services that meet identified needs of parents and children 
        under 6 years of age which are not being met by existing 
        programs, including--
                    ``(A) prenatal care;
                    ``(B) nutrition education;
                    ``(C) health education and screening;
                    ``(D) family literacy services;
                    ``(E) educational testing; and
                    ``(F) other educational services;
            ``(2) may include instruction in the language, art, and 
        culture of the tribe; and
            ``(3) shall provide for periodic assessment of the program.
    ``(e) Coordination of Family Literacy Programs.--Family literacy 
programs operated under this section or other similar programs operated 
by the Bureau shall coordinate with family literacy programs for Indian 
children under part B of title I of the Elementary and Secondary 
Education Act of 1965 in order to avoid duplication and to encourage 
the dissemination of information on quality family literacy programs 
serving Indians.
    ``(f) Administrative Costs.--The Secretary shall, out of funds 
appropriated under subsection (g), include in the grants provided under 
subsection (a) amounts for administrative costs incurred by the tribe, 
tribal organization, or consortium of tribes in establishing and 
maintaining the early childhood development program.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out the provisions of this section, there are authorized to be 
appropriated $10,000,000 for fiscal year 2000 and such sums as may be 
necessary for each of the fiscal years 2001, 2002, 2003, and 2004.

``SEC. 1140. TRIBAL DEPARTMENTS OR DIVISIONS OF EDUCATION.

    ``(a) In General.--Subject to the availability of appropriations, 
the Secretary shall provide grants and technical assistance to tribes 
for the development and operation of tribal departments of education 
for the purpose of planning and coordinating all educational programs 
of the tribe.
    ``(b) Grants.--Grants provided under this section shall--
            ``(1) be based on applications from the governing body of 
        the tribe;
            ``(2) reflect factors such as geographic and population 
        diversity;
            ``(3) facilitate tribal control in all matters relating to 
        the education of Indian children on Indian reservations (and on 
        former Indian reservations in Oklahoma);
            ``(4) provide for the development of coordinated 
        educational programs on Indian reservations (and on former 
Indian reservations in Oklahoma) (including all preschool, elementary, 
secondary, and higher or vocational educational programs funded by 
tribal, Federal, or other sources) by encouraging tribal administrative 
support of all Bureau funded educational programs as well as 
encouraging tribal cooperation and coordination with all educational 
programs receiving financial support from State agencies, other Federal 
agencies, or private entities;
            ``(5) provide for the development and enforcement of tribal 
        educational codes, including tribal educational policies and 
        tribal standards applicable to curriculum, personnel, students, 
        facilities, and support programs; and
            ``(6) otherwise comply with regulations for grants under 
        section 103(a) of the Indian Self-Determination and Educational 
        Assistance Act that are in effect on the date that application 
        for such grants are made.
    ``(c) Priorities.--
            ``(1) In general.--In making grants under this section, the 
        Secretary shall give priority to any application that--
                    ``(A) includes assurances from the majority of 
                Bureau funded schools located within the boundaries of 
                the reservation of the applicant that the tribal 
                department of education to be funded under this section 
                will provide coordinating services and technical 
                assistance to all of such schools, including the 
                submission to each applicable agency of a unified 
                application for funding for all of such schools which 
                provides that--
                            ``(i) no administrative costs other than 
                        those attributable to the individual programs 
                        of such schools will be associated with the 
                        unified application; and
                            ``(ii) the distribution of all funds 
                        received under the unified application will be 
                        equal to the amount of funds provided by the 
                        applicable agency to which each of such schools 
                        is entitled under law;
                    ``(B) includes assurances from the tribal governing 
                body that the tribal department of education funded 
                under this section will administer all contracts or 
                grants (except those covered by the other provisions of 
                this title and the Tribally Controlled Community 
                College Assistance Act of 1978) for education programs 
                administered by the tribe and will coordinate all of 
                the programs to the greatest extent possible;
                    ``(C) includes assurances for the monitoring and 
                auditing by or through the tribal department of 
                education of all education programs for which funds are 
                provided by contract or grant to ensure that the 
                programs meet the requirements of law; and
                    ``(D) provides a plan and schedule for--
                            ``(i) the assumption over the term of the 
                        grant by the tribal department of education of 
                        all assets and functions of the Bureau agency 
                        office associated with the tribe, insofar as 
                        those responsibilities relate to education; and
                            ``(ii) the termination by the Bureau of 
                        such operations and office at the time of such 
                        assumption,
                except that when mutually agreeable between the tribal 
                governing body and the Assistant Secretary, the period 
                in which such assumption is to occur may be modified, 
                reduced, or extended after the initial year of the 
                grant.
            ``(2) Time period of grant.--Subject to the availability of 
        appropriated funds, grants provided under this section shall be 
        provided for a period of 3 years and the grant may, if 
        performance by the grantee is satisfactory to the Secretary, be 
        renewed for additional 3-year terms.
    ``(d) Terms, Conditions, or Requirements.--The Secretary shall not 
impose any terms, conditions, or requirements on the provision of 
grants under this section that are not specified in this section.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out the provisions of this section, there are authorized to be 
appropriated $2,000,000 for fiscal year 2000 and such sums as may be 
necessary for each of the fiscal years 2001, 2002, 2003, and 2004.

``SEC. 1141. DEFINITIONS.

    ``For the purposes of this part, unless otherwise specified:
            ``(1) Agency school board.--The term `agency school board' 
        means a body, the members of which are appointed by all of the 
        school boards of the schools located within an agency, 
        including schools operated under contract or grant, and the 
        number of such members shall be determined by the Secretary in 
        consultation with the affected tribes, except that, in agencies 
        serving a single school, the school board of such school shall 
        fulfill these duties, and in agencies having schools or a 
        school operated under contract or grant, one such member at 
        least shall be from such a school.
            ``(2) Bureau.--The term `Bureau' means the Bureau of Indian 
        Affairs of the Department of the Interior.
            ``(3) Bureau funded school.--The term `Bureau funded 
        school' means--
                    ``(A) a Bureau school;
                    ``(B) a contract or grant school; or
                    ``(C) a school for which assistance is provided 
                under the Tribally Controlled Schools Act of 1988.
            ``(4) Bureau school.--The term `Bureau school' means a 
        Bureau operated elementary or secondary day or boarding school 
        or a Bureau operated dormitory for students attending a school 
        other than a Bureau school.
            ``(5) Contract or grant school.--The term `contract or 
        grant school' means an elementary or secondary school or 
        dormitory which receives financial assistance for its operation 
        under a contract, grant or agreement with the Bureau under 
        section 102, 103(a), or 208 of the Indian Self-Determination 
        and Education Assistance Act, or under the Tribally Controlled 
        Schools Act of 1988.
            ``(6) Education line officer.--The term `education line 
        officer' means education personnel under the supervision of the 
        Director, whether located in the central, area, or agency 
        offices.
            ``(7) Financial plan.--The term `financial plan' means a 
        plan of services provided by each Bureau school.
            ``(8) Indian organization.--the term `Indian organization' 
        means any group, association, partnership, corporation, or 
        other legal entity owned or controlled by a federally 
        recognized Indian tribe or tribes, or a majority of whose 
        members are members of federally recognized tribes.
            ``(9) Local educational agency.--The term `local 
        educational agency' means a board of education or other legally 
        constituted local school authority having administrative 
        control and direction of free public education in a county, 
        township, independent, or other school district located within 
        a State, and includes any State agency which directly operates 
        and maintains facilities for providing free public education.
            ``(10) Local school board.--The term `local school board', 
        when used with respect to a Bureau school, means a body chosen 
        in accordance with the laws of the tribe to be served or, in 
        the absence of such laws, elected by the parents of the Indian 
        children attending the school, except that in schools serving a 
        substantial number of students from different tribes, the 
        members shall be appointed by the governing bodies of the 
        tribes affected, and the number of such members shall be 
        determined by the Secretary in consultation with the affected 
        tribes.
            ``(11) Office.--The term `Office' means the Office of 
        Indian Education Programs within the Bureau.
            ``(12) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.
            ``(13) Supervisor.--The term `supervisor' means the 
        individual in the position of ultimate authority at a Bureau 
        school.
            ``(14) Tribal governing body.--The term `tribal governing 
        body' means, with respect to any school, the tribal governing 
        body, or tribal governing bodies, that represent at least 90 
        percent of the students served by such school.
            ``(15) Tribe.--The term `tribe' means any Indian tribe, 
        band, nation, or other organized group or community, including 
        any Alaska Native village or regional or village corporation as 
        defined in or established pursuant to the Alaska Native Claims 
        Settlement Act, which is recognized as eligible for the special 
        programs and services provided by the United States to Indians 
        because of their status as Indians.''.
    (c) Tribally Controlled Schools Act of 1988.--Sections 5202 through 
5212 of Public Law 100-297 (25 U.S.C. 2501 et seq.) are amended to read 
as follows:

``SEC. 5202. FINDINGS.

    ``Congress, after careful review of the Federal Government's 
historical and special legal relationship with, and resulting 
responsibilities to, Indians, finds that--
            ``(1) the Indian Self-Determination and Education 
        Assistance Act, which was a product of the legitimate 
        aspirations and a recognition of the inherent authority of 
        Indian nations, was and is a crucial positive step towards 
        tribal and community control;
            ``(2) the Bureau of Indian Affairs' administration and 
        domination of the contracting process under such Act has not 
        provided the full opportunity to develop leadership skills 
        crucial to the realization of self-government and has denied 
        Indians an effective voice in the planning and implementation 
        of programs for the benefit of Indians which are responsive to 
        the true needs of Indian communities;
            ``(3) Indians will never surrender their desire to control 
        their relationships both among themselves and with non-Indian 
        governments, organizations, and persons;
            ``(4) true self-determination in any society of people is 
        dependent upon an educational process which will ensure the 
        development of qualified people to fulfill meaningful 
        leadership roles;
            ``(5) the Federal administration of education for Indian 
        children has not effected the desired level of educational 
        achievement or created the diverse opportunities and personal 
        satisfaction that education can and should provide;
            ``(6) true local control requires the least possible 
        Federal interference; and
            ``(7) the time has come to enhance the concepts made 
        manifest in the Indian Self-Determination and Education 
        Assistance Act.

``SEC. 5203. DECLARATION OF POLICY.

    ``(a) Recognition.--Congress recognizes the obligation of the 
United States to respond to the strong expression of the Indian people 
for self-determination by assuring maximum Indian participation in the 
direction of educational services so as to render such services more 
responsive to the needs and desires of those communities.
    ``(b) Commitment.--Congress declares its commitment to the 
maintenance of the Federal Government's unique and continuing trust 
relationship with and responsibility to the Indian people through the 
establishment of a meaningful Indian self-determination policy for 
education which will deter further perpetuation of Federal bureaucratic 
domination of programs.
    ``(c) National Goal.--Congress declares that a major national goal 
of the United States is to provide the resources, processes, and 
structure which will enable tribes and local communities to effect the 
quantity and quality of educational services and opportunities which 
will permit Indian children to compete and excel in the life areas of 
their choice and to achieve the measure of self-determination essential 
to their social and economic well-being.
    ``(d) Educational Needs.--Congress affirms the reality of the 
special and unique educational needs of Indian peoples, including the 
need for programs to meet the linguistic and cultural aspirations of 
Indian tribes and communities. These may best be met through a grant 
process.
    ``(e) Federal Relations.--Congress declares its commitment to these 
policies and its support, to the full extent of its responsibility, for 
Federal relations with the Indian Nations.
    ``(f) Termination.--Congress hereby repudiates and rejects House 
Resolution 108 of the 83d Congress and any policy of unilateral 
termination of Federal relations with any Indian Nation.

``SEC. 5204. GRANTS AUTHORIZED.

    ``(a) In General.--
            ``(1) Eligibility.--The Secretary shall provide grants to 
        Indian tribes, and tribal organizations that--
                    ``(A) operate contract schools under title XI of 
                the Education Amendments of 1978 and notify the 
                Secretary of their election to operate the schools with 
                assistance under this part rather than continuing as 
                contract school;
                    ``(B) operate other tribally controlled schools 
                eligible for assistance under this part and submit 
                applications (which are approved by their tribal 
                governing bodies) to the Secretary for such grants; or
                    ``(C) elect to assume operation of Bureau funded 
                schools with the assistance under this part and submit 
                applications (which are approved by their tribal 
                governing bodies) to the Secretary for such grants.
            ``(2) Deposit of funds.--Grants provided under this part 
        shall be deposited into the general operating fund of the 
        tribally controlled school with respect to which the grant is 
        made.
            ``(3) Use of funds.--(A) Except as otherwise provided in 
        this paragraph, grants provided under this part shall be used 
        to defray, at the discretion of the school board of the 
        tribally controlled school with respect to which the grant is 
        provided, any expenditures for education related activities for 
        which any funds that compose the grant may be used under the 
        laws described in section 5205(a), including, but not limited 
        to, expenditures for--
                    ``(i) school operations, academic, educational, 
                residential, guidance and counseling, and 
                administrative purposes; and
                    ``(ii) support services for the school, including 
                transportation.
            ``(B) Grants provided under this part may, at the 
        discretion of the school board of the tribally controlled 
        school with respect to which such grant is provided, be used to 
        defray operations and maintenance expenditures for the school 
        if any funds for the operation and maintenance of the school 
        are allocated to the school under the provisions of any of the 
        laws described in section 5205(a).
    ``(b) Limitations.--
            ``(1) One grant per tribe or organization per fiscal 
        year.--Not more than one grant may be provided under this part 
        with respect to any Indian tribe or tribal organization for any 
        fiscal year.
            ``(2) Nonsectarian use.--Funds provided under any grant 
        made under this part may not be used in connection with 
        religious worship or sectarian instruction.
            ``(3) Administrative costs limitation.--Funds provided 
        under any grant under this part may not be expended for 
        administrative costs (as defined in section 1128(h)(1) of the 
        Education Amendments of 1978) in excess of the amount generated 
        for such costs under section 1128 of such Act.
    ``(c) Limitation on Transfer of Funds Among Schoolsites.--
            ``(1) In general.--In the case of a grantee that operates 
        schools at more than one schoolsite, the grantee may expend not 
        more than the lesser of--
                    ``(A) 10 percent of the funds allocated for such 
                schoolsite under section 1128 of the Education 
                Amendments of 1978; or
                    ``(B) $400,000 of such funds, at any other 
                schoolsite.
            ``(2) Definition of schoolsite.--For purposes of this 
        subsection, the term `schoolsite' means the physical location 
        and the facilities of an elementary or secondary educational or 
        residential program operated by, or under contract or grant 
        with, the Bureau for which a discreet student count is 
        identified under the funding formula established under section 
        1127 of the Education Amendments of 1978.
    ``(d) No Requirement To Accept Grants.--Nothing in this part may be 
construed--
            ``(1) to require a tribe or tribal organization to apply 
        for or accept; or
            ``(2) to allow any person to coerce any tribe or tribal 
        organization to apply for, or accept,
a grant under this part to plan, conduct, and administer all of, or any 
portion of, any Bureau program. Such applications and the timing of 
such applications shall be strictly voluntary. Nothing in this part may 
be construed as allowing or requiring any grant with any entity other 
than the entity to which the grant is provided.
    ``(e) No Effect on Federal Responsibility.--Grants provided under 
this part shall not terminate, modify, suspend, or reduce the 
responsibility of the Federal Government to provide a program.
    ``(f) Retrocession.--
            ``(1) In general.--Whenever a tribal governing body 
        requests retrocession of any program for which assistance is 
        provided under this part, such retrocession shall become 
        effective upon a date specified by the Secretary that is not 
        later than 120 days after the date on which the tribal 
        governing body requests the retrocession. A later date as may 
        be specified if mutually agreed upon by the Secretary and the 
        tribal governing body. If such a program is retroceded, the 
        Secretary shall provide to any Indian tribe served by such 
        program at least the same quantity and quality of services that 
        would have been provided under such program at the level of 
        funding provided under this part prior to the retrocession.
            ``(2) Status after retrocession.--The tribe requesting 
        retrocession shall specify whether the retrocession is to 
        status as a Bureau operated school or as a school operated 
        under contract under title XI of the Education Amendments of 
        1978.
            ``(3) Transfer of equipment and materials.--Except as 
        otherwise determined by the Secretary, the tribe or tribal 
        organization operating the program to be retroceded must 
        transfer to the Secretary (or to the tribe or tribal 
        organization which will operate the program as a contract 
        school) the existing equipment and materials which were 
        acquired--
                    ``(A) with assistance under this part; or
                    ``(B) upon assumption of operation of the program 
                under this part if the school was a Bureau funded 
                school under title XI of the Education Amendments of 
                1978 before receiving assistance under this part.
    ``(g) Prohibition of Termination for Administrative Convenience.--
Grants provided under this part may not be terminated, modified, 
suspended, or reduced solely for the convenience of the administering 
agency.

``SEC. 5205. COMPOSITION OF GRANTS.

    ``(a) In General.--The grant provided under this part to an Indian 
tribe or tribal organization for any fiscal year shall consist of--
            ``(1) the total amount of funds allocated for such fiscal 
        year under sections 1127 and 1128 of the Education Amendments 
        of 1978 with respect to the tribally controlled schools 
        eligible for assistance under this part which are operated by 
        such Indian tribe or tribal organization, including, but not 
        limited to, funds provided under such sections, or under any 
        other provision of law, for transportation costs;
            ``(2) to the extent requested by such Indian tribe or 
        tribal organization, the total amount of funds provided from 
        operations and maintenance accounts and, notwithstanding 
        section 105 of the Indian Self-Determination Act, or any other 
        provision of law, other facilities accounts for such schools 
        for such fiscal year (including but not limited to those 
        referenced under section 1126(d) of the Education Amendments of 
        1978 or any other law); and
            ``(3) the total amount of funds that are allocated to such 
        schools for such fiscal year under--
                    ``(A) title I of the Elementary and Secondary 
                Education Act of 1965;
                    ``(B) the Individuals with Disabilities Education 
                Act; and
                    ``(C) any other Federal education law, that are 
                allocated to such schools for such fiscal year.
    ``(b) Special Rules.--
            ``(1) In general.--(A) Funds allocated to a tribally 
        controlled school by reason of paragraph (1) or (2) of 
        subsection (a) shall be subject to the provisions of this part 
        and shall not be subject to any additional restriction, 
        priority, or limitation that is imposed by the Bureau with 
        respect to funds provided under--
                    ``(i) title I of the Elementary and Secondary 
                Education Act of 1965;
                    ``(ii) the Individuals with Disabilities Education 
                Act; or
                    ``(iii) any Federal education law other than title 
                XI of the Education Amendments of 1978.
            ``(B) Indian tribes and tribal organizations to which 
        grants are provided under this part, and tribally controlled 
        schools for which such grants are provided, shall not be 
        subject to any requirements, obligations, restrictions, or 
        limitations imposed by the Bureau that would otherwise apply 
        solely by reason of the receipt of funds provided under any law 
        referred to in clause (i), (ii), or (iii) of subparagraph (A).
            ``(2) Schools considered contract schools.--Tribally 
        controlled schools for which grants are provided under this 
        part shall be treated as contract schools for the purposes of 
        allocation of funds under sections 1126(d), 1127, and 1128 of 
        the Education Amendments of 1978.
            ``(3) Schools considered bureau schools.--Tribally 
        controlled schools for which grants are provided under this 
        chapter shall be treated as Bureau schools for the purposes of 
        allocation of funds provided under--
                    ``(A) title I of the Elementary and Secondary 
                Education Act of 1965;
                    ``(B) the Individuals with Disabilities Education 
                Act; and
                    ``(C) any other Federal education law, that are 
                distributed through the Bureau.
            ``(4) Accounts; use of certain funds.--(A) Notwithstanding 
        section 5204(a)(2), with respect to funds from facilities 
        improvement and repair, alteration and renovation (major or 
        minor), health and safety, or new construction accounts 
        included in the grant under section 5204(a), the grantee shall 
        maintain a separate account for such funds. At the end of the 
        period designated for the work covered by the funds received, 
        the grantee shall submit to the Secretary a separate accounting 
        of the work done and the funds expended to the Secretary. Funds 
        received from these accounts may only be used for the purpose 
        for which they were appropriated and for the work encompassed 
        by the application or submission under which they were 
        received.
            ``(B) Notwithstanding subparagraph (A), a school receiving 
        a grant under this part for facilities improvement and repair 
        may use such grant funds for new construction if the tribal 
        government or other organization provides funding for the new 
        construction equal to at least 25 percent of the total cost of 
        such new construction.
            ``(C) Where the appropriations measure or the application 
        submission does not stipulate a period for the work covered by 
        the funds so designated, the Secretary and the grantee shall 
        consult and determine such a period prior to the transfer of 
        the funds. A period so determined may be extended upon mutual 
        agreement of the Secretary and the grantee.
            ``(5) Enforcement of request to include funds.--If the 
        Secretary fails to carry out a request made under subsection 
        (a)(2) within 180 days of a request filed by an Indian tribe or 
        tribal organization to include in such tribe or organization's 
        grant the funds described in subsection (a)(2), the Secretary 
        shall be deemed to have approved such request and the Secretary 
        shall immediately amend the grant accordingly. Such tribe or 
        organization may enforce its rights under subsection (a)(2) and 
        this paragraph, including any denial or failure to act on such 
        tribe or organization's request, pursuant to the disputes 
        authority described in section 5209(e).

``SEC. 5206. ELIGIBILITY FOR GRANTS.

    ``(a) Rules.--
            ``(1) In general.--A tribally controlled school is eligible 
        for assistance under this part if the school--
                    ``(A) on April 28, 1988, was a contract school 
                under title XI of the Education Amendments of 1978 and 
                the tribe or tribal organization operating the school 
                submits to the Secretary a written notice of election 
                to receive a grant under this part;
                    ``(B) was a Bureau operated school under title XI 
                of the Education Amendments of 1978 and has met the 
                requirements of subsection (b);
                    ``(C) is a school for which the Bureau has not 
                provided funds, but which has met the requirements of 
                subsection (c); or
                    ``(D) is a school with respect to which an election 
                has been made under paragraph (2) and which has met the 
                requirements of subsection (b).
            ``(2) New schools.--Any application which has been 
        submitted under the Indian Self-Determination and Education 
        Assistance Act by an Indian tribe for a school which is not in 
        operation on the date of the enactment of the Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three R's) 
        shall be reviewed under the guidelines and regulations for 
        applications submitted under the Indian Self-Determination and 
        Education Assistance Act that were in effect at the time the 
        application was submitted, unless the Indian tribe or tribal 
        organization elects to have the application reviewed under the 
        provisions of subsection (b).
    ``(b) Additional Requirements for Bureau Funded Schools and Certain 
Electing Schools.--
            ``(1) Bureau funded schools.--A school that was a Bureau 
        funded school under title XI of the Education Amendments of 
        1978 on the date of the enactment of the Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three R's), 
        and any school with respect to which an election is made under 
        subsection (a)(2), meets the requirements of this subsection 
        if--
                    ``(A) the Indian tribe or tribal organization that 
                operates, or desires to operate, the school submits to 
                the Secretary an application requesting that the 
                Secretary--
                            ``(i) transfer operation of the school to 
                        the Indian tribe or tribal organization, if the 
                        Indian tribe or tribal organization is not 
                        already operating the school; and
                            ``(ii) make a determination as to whether 
                        the school is eligible for assistance under 
                        this part; and
                    ``(B) the Secretary makes a determination that the 
                school is eligible for assistance under this part.
            ``(2) Certain electing schools.--(A) By not later than the 
        date that is 120 days after the date on which an application is 
        submitted to the Secretary under paragraph (1)(A), the 
        Secretary shall determine--
                    ``(i) in the case of a school which is not being 
                operated by the Indian tribe or tribal organization, 
                whether to transfer operation of the school to the 
                Indian tribe or tribal organization; and
                    ``(ii) whether the school is eligible for 
                assistance under this part.
            ``(B) In considering applications submitted under paragraph 
        (1)(A), the Secretary--
                    ``(i) shall transfer operation of the school to the 
                Indian tribe or tribal organization, if the tribe or 
                tribal organization is not already operating the 
                school; and
                    ``(ii) shall determine that the school is eligible 
                for assistance under this part, unless the Secretary 
                finds by clear and convincing evidence that the 
                services to be provided by the Indian tribe or tribal 
                organization will be deleterious to the welfare of the 
                Indians served by the school.
            ``(C) In considering applications submitted under paragraph 
        (1)(A), the Secretary shall consider whether the Indian tribe 
        or tribal organization would be deficient in operating the 
        school with respect to--
                    ``(i) equipment;
                    ``(ii) bookkeeping and accounting procedures;
                    ``(iii) ability to adequately manage a school; or
                    ``(iv) adequately trained personnel.
    ``(c) Additional Requirements for a School Which Is Not a Bureau 
Funded School.--
            ``(1) In general.--A school which is not a Bureau funded 
        school under title XI of the Education Amendments of 1978 meets 
        the requirements of this subsection if--
                    ``(A) the Indian tribe or tribal organization that 
                operates, or desires to operate, the school submits to 
                the Secretary an application requesting a determination 
                by the Secretary as to whether the school is eligible 
                for assistance under this part; and
                    ``(B) the Secretary makes a determination that a 
                school is eligible for assistance under this part.
            ``(2) Deadline for determination by secretary.--(A) By not 
        later than the date that is 180 days after the date on which an 
        application is submitted to the Secretary under paragraph 
        (1)(A), the Secretary shall determine whether the school is 
        eligible for assistance under this part.
            ``(B) In making the determination under subparagraph (A), 
        the Secretary shall give equal consideration to each of the 
        following factors:
                    ``(i) with respect to the applicant's proposal--
                            ``(I) the adequacy of facilities or the 
                        potential to obtain or provide adequate 
                        facilities;
                            ``(II) geographic and demographic factors 
                        in the affected areas;
                            ``(III) adequacy of the applicant's program 
                        plans;
                            ``(IV) geographic proximity of comparable 
                        public education; and
                            ``(V) the needs as expressed by all 
                        affected parties, including but not limited to 
                        students, families, tribal governments at both 
                        the central and local levels, and school 
                        organizations; and
                    ``(ii) with respect to all education services 
                already available--
                            ``(I) geographic and demographic factors in 
                        the affected areas;
                            ``(II) adequacy and comparability of 
                        programs already available;
                            ``(III) consistency of available programs 
                        with tribal education codes or tribal 
                        legislation on education; and
                            ``(IV) the history and success of these 
                        services for the proposed population to be 
                        served, as determined from all factors 
                        including, if relevant, standardized 
                        examination performance.
            ``(C) The Secretary may not make a determination under this 
        paragraph that is primarily based upon the geographic proximity 
        of comparable public education.
            ``(D) Applications submitted under paragraph (1)(A) shall 
        include information on the factors described in subparagraph 
        (B)(i), but the applicant may also provide the Secretary such 
        information relative to the factors described in subparagraph 
        (B)(ii) as the applicant considers appropriate.
            ``(E) If the Secretary fails to make a determination under 
        subparagraph (A) with respect to an application within 180 days 
        after the date on which the Secretary received the application, 
        the Secretary shall be treated as having made a determination 
        that the tribally controlled school is eligible for assistance 
        under the title and the grant shall become effective 18 months 
        after the date on which the Secretary received the application, 
        or on an earlier date, at the Secretary's discretion.
    ``(d) Filing of Applications and Reports.--
            ``(1) In general.--All applications and reports submitted 
        to the Secretary under this part, and any amendments to such 
        applications or reports, shall be filed with the education line 
        officer designated by the Director of the Office of Indian 
        Education Programs of the Bureau of Indian Affairs. The date on 
        which such filing occurs shall, for purposes of this part, be 
        treated as the date on which the application or amendment was 
        submitted to the Secretary.
            ``(2) Supporting documentation.--Any application that is 
        submitted under this chapter shall be accompanied by a document 
        indicating the action taken by the tribal governing body in 
        authorizing such application.
    ``(e) Effective Date for Approved Applications.--Except as provided 
by subsection (c)(2)(E), a grant provided under this part, and any 
transfer of the operation of a Bureau school made under subsection (b), 
shall become effective beginning the academic year succeeding the 
fiscal year in which the application for the grant or transfer is made, 
or at an earlier date determined by the Secretary.
    ``(f) Denial of Applications.--
            ``(1) In general.--Whenever the Secretary refuses to 
        approve a grant under this chapter, to transfer operation of a 
        Bureau school under subsection (b), or determines that a school 
        is not eligible for assistance under this part, the Secretary 
        shall--
                    ``(A) state the objections in writing to the tribe 
                or tribal organization within the allotted time;
                    ``(B) provide assistance to the tribe or tribal 
                organization to overcome all stated objections.
                    ``(C) at the request of the tribe or tribal 
                organization, provide the tribe or tribal organization 
                a hearing on the record under the same rules and 
                regulations that apply under the Indian Self-
                Determination and Education Assistance Act; and
                    ``(D) provide an opportunity to appeal the 
                objection raised.
            ``(2) Timeline for reconsideration of amended 
        applications.--The Secretary shall reconsider any amended 
        application submitted under this part within 60 days after the 
        amended application is submitted to the Secretary.
    ``(g) Report.--The Bureau shall submit an annual report to the 
Congress on all applications received, and actions taken (including the 
costs associated with such actions), under this section at the same 
time that the President is required to submit to Congress the budget 
under section 1105 of title 31, United States Code.

``SEC. 5207. DURATION OF ELIGIBILITY DETERMINATION.

    ``(a) In General.--If the Secretary determines that a tribally 
controlled school is eligible for assistance under this part, the 
eligibility determination shall remain in effect until the 
determination is revoked by the Secretary, and the requirements of 
subsection (b) or (c) of section 5206, if applicable, shall be 
considered to have been met with respect to such school until the 
eligibility determination is revoked by the Secretary.
    ``(b) Annual Reports.--
            ``(1) In general.--Each recipient of a grant provided under 
        this part shall complete an annual report which shall be 
        limited to--
                    ``(A) an annual financial statement reporting 
                revenue and expenditures as defined by the cost 
                accounting established by the grantee;
                    ``(B) an annual financial audit conducted pursuant 
                to the standards of the Single Audit Act of 1984;
                    ``(C) an annual submission to the Secretary of the 
                number of students served and a brief description of 
                programs offered under the grant; and
                    ``(D) a program evaluation conducted by an 
                impartial evaluation review team, to be based on the 
                standards established for purposes of subsection 
                (c)(1)(A)(ii).
            ``(2) Evaluation review teams.--Where appropriate, other 
        tribally controlled schools and representatives of tribally 
        controlled community colleges shall make up members of the 
        evaluation review teams.
            ``(3) Evaluations.--In the case of a school which is 
        accredited, evaluations will be conducted at intervals under 
        the terms of accreditation.
            ``(4) Submission of report.--
                    ``(A) To tribally governing body.--Upon completion 
                of the report required under paragraph (a), the 
                recipient of the grant shall send (via first class 
                mail, return receipt requested) a copy of such annual 
                report to the tribal governing body (as defined in 
                section 1132(f) of the Education Amendments of 1978) of 
                the tribally controlled school.
                    ``(B) To secretary.--Not later than 30 days after 
                receiving written confirmation that the tribal 
                governing body has received the report send pursuant to 
                subsection (A), the recipient of the grant shall send a 
                copy of the report to the Secretary.
    ``(c) Revocation of Eligibility.--
            ``(1) In general.--(A) The Secretary shall not revoke a 
        determination that a school is eligible for assistance under 
        this part if--
                    ``(i) the Indian tribe or tribal organization 
                submits the reports required under subsection (b) with 
                respect to the school; and
                    ``(ii) at least one of the following subclauses 
                applies with respect to the school:
                            ``(I) The school is certified or accredited 
                        by a State or regional accrediting association 
                        or is a candidate in good standing for such 
                        accreditation under the rules of the State or 
                        regional accrediting association, showing that 
                        credits achieved by the students within the 
                        education programs are, or will be, accepted at 
                        grade level by a State certified or regionally 
                        accredited institution.
                            ``(II) A determination made by the 
                        Secretary that there is a reasonable 
                        expectation that the accreditation described in 
                        subclause (I), or the candidacy in good 
                        standing for such accreditation, will be 
                        reached by the school within 3 years and that 
                        the program offered by the school is beneficial 
                        to the Indian students.
                            ``(III) The school is accredited by a 
                        tribal department of education if such 
                        accreditation is accepted by a generally 
                        recognized regional or State accreditation 
                        agency.
                            ``(IV) The schools accept the standards 
                        promulgated under section 1121 of the Education 
                        Amendments of 1978 and an evaluation of 
                        performance is conducted under this section in 
                        conformance with the regulations pertaining to 
                        Bureau operated schools by an impartial 
                        evaluator chosen by the grantee, but no grantee 
                        shall be required to comply with these 
                        standards to a higher degree than a comparable 
                        Bureau operated school.
                            ``(V) A positive evaluation of the school 
                        is conducted by an impartial evaluator agreed 
                        upon by the Secretary and the grantee every 2 
                        years under standards adopted by the contractor 
                        under a contract for a school entered into 
                        under the Indian Self-Determination and 
                        Education Assistance Act (or revisions of such 
                        standards agreed to by the Secretary and the 
                        grantee) prior to the date of the enactment of 
                        this Act. If the Secretary and the grantee 
                        other than the tribal governing body fail to 
                        agree on such an evaluator, the tribal 
                        governing body shall choose the evaluator or 
                        perform the evaluation. If the Secretary and a 
                        grantee which is the tribal governing body fail 
                        to agree on such an evaluator, this subclause 
                        shall not apply.
            ``(B) The choice of standards employed for the purpose of 
        subparagraph (A)(ii) shall be consistent with section 1121(e) 
        of the Education Amendments of 1978.
            ``(2) Notice requirements for revocation.--The Secretary 
        shall not revoke a determination that a school is eligible for 
        assistance under this part, or reassume control of a school 
        that was a Bureau school prior to approval of an application 
        submitted under section 5206(b)(1)(A) until the Secretary--
                    ``(A) provides notice to the tribally controlled 
                school and the tribal governing body (within the 
                meaning of section 1141(14) of the Education Amendments 
                of 1978) of the tribally controlled school which 
                states--
                            ``(i) the specific deficiencies that led to 
                        the revocation or resumption determination; and
                            ``(ii) the actions that are needed to 
                        remedy such deficiencies; and
                    ``(B) affords such authority an opportunity to 
                effect the remedial actions.
            ``(3) Technical assistance.--The Secretary shall provide 
        such technical assistance as is practicable to effect such 
        remedial actions. Such notice and technical assistance shall be 
        in addition to a hearing and appeal to be conducted pursuant to 
        the regulations described in section 5206(f)(1)(C).
    ``(d) Applicability of Section Pursuant to Election Under Section 
5209(b).--With respect to a tribally controlled school which receives 
assistance under this part pursuant to an election made under section 
5209(b)--
            ``(1) subsection (b) of this section shall apply; and
            ``(2) the Secretary may not revoke eligibility for 
        assistance under this part except in conformance with 
        subsection (c) of this section.

``SEC. 5208. PAYMENT OF GRANTS; INVESTMENT OF FUNDS.

    ``(a) Payments.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the Secretary shall make payments to grantees under 
        this part in two payments, of which--
                    ``(A) the first payment shall be made not later 
                than July 15 of each year in an amount equal to 85 
                percent of the amount which the grantee was entitled to 
receive during the preceding academic year; and
                    ``(B) the second payment, consisting of the 
                remainder to which the grantee is entitled for the 
                academic year, shall be made not later than December 1 
                of each year.
            ``(2) Newly funded schools.--For any school for which no 
        payment under this part was made from Bureau funds in the 
        preceding academic year, full payment of the amount computed 
        for the first academic year of eligibility under this part 
        shall be made not later than December 1 of the academic year.
            ``(3) Late funding.--With regard to funds for grantees that 
        become available for obligation on October 1 of the fiscal year 
        for which such funds are appropriated, the Secretary shall make 
        payments to grantees not later than December 1 of the fiscal 
        year.
            ``(4) Applicability of certain title 31 provisions.--The 
        provisions of chapter 39 of Title 31, United States Code, shall 
        apply to the payments required to be made by paragraphs (1), 
        (2), and (3).
            ``(5) Restrictions.--Paragraphs (1), (2), and (3) shall be 
        subject to any restriction on amounts of payments under this 
        part that are imposed by a continuing resolution or other Act 
        appropriating the funds involved.
    ``(b) Investment of Funds.--
            ``(1) Treatment of interest and investment income.--
        Notwithstanding any other provision of law, any interest or 
        investment income that accrues to any funds provided under this 
        part after such funds are paid to the Indian tribe or tribal 
        organization and before such funds are expended for the purpose 
        for which such funds were provided under this part shall be the 
        property of the Indian tribe or tribal organization and shall 
        not be taken into account by any officer or employee of the 
        Federal Government in determining whether to provide 
        assistance, or the amount of assistance, under any provision of 
        Federal law. Such interest income shall be spent on behalf of 
        the school.
            ``(2) Permissible investments.--Funds provided under this 
        part may be invested by the Indian tribe or tribal organization 
        before such funds are expended for the purposes of this part so 
        long as such funds are--
                    ``(A) invested by the Indian tribe or tribal 
                organization only in obligations of the United States, 
                or in obligations or securities that are guaranteed or 
                insured by the United States, or mutual (or other) 
                funds registered with the Securities and Exchange 
                Commission and which only invest in obligations of the 
                United States, or securities that are guaranteed or 
                insured by the United States; or
                    ``(B) deposited only into accounts that are insure 
                by and agency or instrumentality of the United States, 
                or are fully collateralized to ensure protection of the 
                funds, even in the event of a bank failure.
    ``(c) Recoveries.--For the purposes of underrecovery and 
overrecovery determinations by any Federal agency for any other funds, 
from whatever source derived, funds received under this part shall not 
be taken into consideration.

``SEC. 5209. APPLICATION WITH RESPECT TO INDIAN SELF-DETERMINATION AND 
              EDUCATION ASSISTANCE ACT.

    ``(a) Certain Provisions To Apply to Grants.--The following 
provisions of the Indian Self-Determination and Education Assistance 
Act (and any subsequent revisions thereto or renumbering thereof), 
shall apply to grants provided under this part:
            ``(1) Section 5(f) (relating to single agency audit).
            ``(2) Section 6 (relating to criminal activities; 
        penalties).
            ``(3) Section 7 (relating to wage and labor standards).
            ``(4) Section 104 (relating to retention of Federal 
        employee coverage).
            ``(5) Section 105(f) (relating to Federal property).
            ``(6) Section 105(k) (relating to access to Federal sources 
        of supply).
            ``(7) Section 105(l) (relating to lease of facility used 
        for administration and delivery of services).
            ``(8) Section 106(e) (relating to limitation on remedies 
        relating to cost allowances).
            ``(9) Section 106(i) (relating to use of funds for matching 
        or cost participation requirements).
            ``(10) Section 106(j) (relating to allowable uses of 
        funds).
            ``(11) Section 108(c) (Model Agreements provisions 
        (1)(a)(5) (relating to limitations of costs), (1)(a)(7) 
        (relating to records and monitoring), (1)(a)(8) (relating to 
        property), and (a)(1)(9) (relating to availability of funds).
            ``(12) Section 109 (relating to reassumption).
            ``(13) Section 111 (relating to sovereign immunity and 
        trusteeship rights unaffected).
    ``(b) Election for Grant in Lieu of Contract.--
            ``(1) In general.--Contractors for activities to which this 
        part applies who have entered into a contract under the Indian 
        Self-Determination and Education Assistance Act that is in 
        effect upon the date of the enactment of the Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three R's) 
        may, by giving notice to the Secretary, elect to have the 
        provisions of this part apply to such activity in lieu of such 
        contract.
            ``(2) Effective date of election.--Any election made under 
        paragraph (1) shall take effect on the later of--
                    ``(A) October 1 of the fiscal year succeeding the 
                fiscal year in which such election is made; or
                    ``(B) 60 days after the date of such election.
            ``(3) Exception.--In any case in which the 60-day period 
        referred to in paragraph (2)(B) is less than 60 days before the 
        beginning of the succeeding fiscal year, such election shall 
not take effect until the fiscal year after the fiscal year succeeding 
the election.
    ``(c) No Duplication.--No funds may be provided under any contract 
entered into under the Indian Self-Determination and Education 
Assistance Act to pay any expenses incurred in providing any program or 
services if a grant has been made under this part to pay such expenses.
    ``(d) Transfers and Carryovers.--
            ``(1) Buildings, equipment, supplies, materials.--A tribe 
        or tribal organization assuming the operation of--
                    ``(A) a Bureau school with assistance under this 
                part shall be entitled to the transfer or use of 
                buildings, equipment, supplies, and materials to the 
                same extent as if it were contracting under the Indian 
                Self-Determination and Education Assistance Act; or
                    ``(B) a contract school with assistance under this 
                part shall be entitled to the transfer or use of 
                buildings, equipment, supplies and materials that were 
                used in the operation of the contract school to the 
                same extent as if it were contracting under the Indian 
                Self-Determination and Education Assistance Act.
            ``(2) Funds.--Any tribe or tribal organization which 
        assumes operation of a Bureau school with assistance under this 
        part and any tribe or tribal organization which elects to 
        operate a school with assistance under this part rather that to 
        continue as a contract school shall be entitled to any funds 
        which would carryover from the previous fiscal year as if such 
        school were operated as a contract school.
    ``(e) Exceptions, Problems, and Disputes.--Any exception or problem 
cited in an audit conducted pursuant to section 5207(b)(2), any dispute 
regarding a grant authorized to be made pursuant to this part or any 
amendment to such grant, and any dispute involving an administrative 
cost grant under section 1128 of the Education Amendments of 1978 shall 
be administered under the provisions governing such exceptions, 
problems, or disputes in the case of contracts under the Indian Self-
Determination and Education Assistance Act of 1975. The Equal Access to 
Justice Act shall apply to administrative appeals filed after September 
8, 1988, by grantees regarding a grant under this part, including an 
administrative cost grant.

``SEC. 5210. ROLE OF THE DIRECTOR.

    ``Applications for grants under this part, and all application 
modifications, shall be reviewed and approved by personnel under the 
direction and control of the Director of the Office of Indian Education 
Programs. Required reports shall be submitted to education personnel 
under the direction and control of the Director of such Office.

``SEC. 5211. REGULATIONS.

    ``The Secretary is authorized to issue regulations relating to the 
discharge of duties specifically assigned to the Secretary by this 
part. In all other matters relating to the details of planning, 
development, implementing, and evaluating grants under this part, the 
Secretary shall not issue regulations. Regulations issued pursuant to 
this part shall not have the standing of a Federal statute for the 
purposes of judicial review.

``SEC. 5212. THE TRIBALLY CONTROLLED GRANT SCHOOL ENDOWMENT PROGRAM.

    ``(a) In General.--
            ``(1) Each school receiving grants under this part may 
        establish, at a Federally insured banking and savings 
        institution, a trust fund for the purposes of this section.
            ``(2) The school may provide--
                    ``(A) for the deposit into the trust fund, only 
                funds from non-Federal sources, except that the 
                interest on funds received from grants under this part 
                may be used for this purpose;
                    ``(B) for the deposit in the account of any 
                earnings on funds deposited in the account; and
                    ``(C) for the sole use of the school any noncash, 
                in-kind contributions of real or personal property, 
                such property may at any time be converted to cash.
    ``(b) Interest.--Interest from the fund established under 
subsection (a) may periodically be withdrawn and used, at the 
discretion of the school, to defray any expenses associated with the 
operation of the school.

``SEC. 5213. DEFINITIONS.

    ``For the purposes of this part:
            ``(1) Bureau.--The term `Bureau' means the Bureau of Indian 
        Affairs of the Department of the Interior.
            ``(2) Eligible indian student.--The term `eligible Indian 
        student' has the meaning of such term in section 1127(f) of the 
        Education Amendments of 1978.
            ``(3) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including Alaska Native Village or regional 
        corporations (as defined in or established pursuant to the 
        Alaskan Native Claims Settlement Act, which is recognized as 
        eligible for the special programs and services provided by the 
        United States to Indians because of their status as Indians.
            ``(4) Local educational agency.--The term a `local 
        educational agency' means a public board of education or other 
        public authority legally constituted within a State for either 
        administrative control or direction of, or to perform a service 
        function for, public elementary or secondary schools in a city, 
        county, township, school district, or other political 
        subdivision of a State or such combination of school districts 
        or counties as are recognized in a State as an administrative 
        agency for its public elementary or secondary schools. Such 
        term includes any other public institution or agency having 
        administrative control and direction of a public elementary or 
        secondary school.
            ``(5) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.
            ``(6) Tribal organization.--(A) The term `tribal 
        organization' means--
                    ``(i) the recognized governing body of any Indian 
                tribe; or
                    ``(ii) any legally established organization of 
                Indians which--
                            ``(I) is controlled, sanctioned, or 
                        chartered by such governing body or is 
                        democratically elected by the adult members of 
                        the Indian community to be served by such 
                        organization; and
                            ``(II) includes the maximum participation 
                        of Indians in all phases of its activities.
            ``(B) In any case in which a grant is provided under this 
        part to an organization to provide services benefiting more 
        than one Indian tribe, the approval of the governing bodies of 
        Indian tribes representing 80 percent of those students 
        attending the tribally controlled school shall be considered a 
        sufficient tribal authorization for such grant.
            ``(7) Tribally controlled school.--The term `tribally 
        controlled school' means a school operated by a tribe or a 
        tribal organization, enrolling students in kindergarten through 
        grade 12, including preschools, which is not a local 
        educational agency and which is not directly administered by 
        the Bureau of Indian Affairs.''.

                     TITLE IV--PUBLIC SCHOOL CHOICE

SEC. 401. PUBLIC SCHOOL CHOICE.

    (a) Magnet Schools Amendments.--Part A of title V (20 U.S.C. 7201 
et seq.) is amended to read as follows:

                   ``PART A--MAGNET SCHOOL ASSISTANCE

``SEC. 5101. FINDINGS.

    ``The Congress finds that--
            ``(1) magnet schools are a significant part of our Nation's 
        effort to achieve voluntary desegregation in our Nation's 
        schools;
            ``(2) the use of magnet schools has increased dramatically 
        since the date of the enactment of the Magnet Schools 
        Assistance program, with approximately 2,000,000 students 
        nationwide now attending such schools, of which more than 65 
        percent of the students are nonwhite;
            ``(3) magnet schools offer a wide range of distinctive 
        programs that have served as models for school improvement 
        efforts;
            ``(4) in administering the Magnet Schools Assistance 
        program, the Federal Government has learned that--
                    ``(A) where magnet programs are implemented for 
                only a portion of a school's student body, special 
                efforts must be made to discourage the isolation of--
                            ``(i) magnet school students from other 
                        students in the school; and
                            ``(ii) students by racial characteristics;
                    ``(B) local educational agencies can maximize their 
                effectiveness in achieving the purposes of the Magnet 
                Schools Assistance program if such agencies have more 
                flexibility in the administration of such program in 
                order to serve students attending a school who are not 
                enrolled in the magnet school program;
                    ``(C) local educational agencies must be creative 
                in designing magnet schools for students at all 
                academic levels, so that school districts do not select 
                only the highest achieving students to attend the 
                magnet schools;
                    ``(D) consistent with desegregation guidelines, 
                local educational agencies must seek to enable 
                participation in magnet school programs by students who 
                reside in the neighborhoods where the programs operate; 
                and
                    ``(E) in order to ensure that magnet schools are 
                sustained after Federal funding ends, the Federal 
                Government must assist school districts to improve 
                their capacity to continue to operate magnet schools at 
                a high level of performance; and
            ``(5) it is in the best interest of the Federal Government 
        to--
                    ``(A) continue the Federal Government's support of 
                school districts implementing court-ordered 
                desegregation plans and school districts voluntarily 
                seeking to foster meaningful interaction among students 
                of different racial and ethnic backgrounds, beginning 
                at the earliest stage of such students' education;
                    ``(B) ensure that all students have equitable 
                access to quality education that will prepare such 
                students to function well in a technologically oriented 
                society and a highly competitive economy;
                    ``(C) maximize the ability of local educational 
                agencies to plan, develop, implement and continue 
                effective and innovative magnet schools that contribute 
                to State and local systemic reform; and
                    ``(D) ensure that grant recipients provide adequate 
                data which demonstrates an ability to improve student 
                achievement.

``SEC. 5102. STATEMENT OF PURPOSE.

    ``The purpose of this part is to assist in the desegregation of 
schools served by local educational agencies by providing financial 
assistance to eligible local educational agencies for--
            ``(1) the elimination, reduction, or prevention of minority 
        group isolation in elementary and secondary schools with 
        substantial proportions of minority students;
            ``(2) the development and implementation of magnet school 
        projects that will assist local educational agencies in 
        achieving systemic reforms and providing all students the 
        opportunity to meet challenging State content standards and 
        challenging State student performance standards;
            ``(3) the development and design of innovative educational 
        methods and practices that promote diversity and increase 
        choices in public elementary and secondary schools and 
        educational programs; and
            ``(4) courses of instruction within magnet schools that 
        will substantially strengthen the knowledge of academic 
        subjects and the grasp of tangible and marketable vocational 
and technical skills of students attending such schools.

``SEC. 5103. PROGRAM AUTHORIZED.

    ``The Secretary, in accordance with this part, is authorized to 
make grants to eligible local educational agencies, and consortia of 
such agencies where appropriate, to carry out the purpose of this part 
for magnet schools that are--
            ``(1) part of an approved desegregation plan; and
            ``(2) designed to bring students from different social, 
        economic, ethnic, and racial backgrounds together.

``SEC. 5104. DEFINITION.

    ``For the purpose of this part, the term `magnet school' means a 
public elementary or secondary school or public elementary or secondary 
education center that offers a special curriculum capable of attracting 
substantial numbers of students of different racial backgrounds.

``SEC. 5105. ELIGIBILITY.

    ``A local educational agency, or consortium of such agencies where 
appropriate, is eligible to receive assistance under this part to carry 
out the purposes of this part if such agency or consortium--
            ``(1) is implementing a plan undertaken pursuant to a final 
        order issued by a court of the United States, or a court of any 
        State, or any other State agency or official of competent 
        jurisdiction, that requires the desegregation of minority-
        group-segregated children or faculty in the elementary and 
        secondary schools of such agency; or
            ``(2) without having been required to do so, has adopted 
        and is implementing, or will, if assistance is made available 
        to such local educational agency or consortium of such agencies 
        under this part, adopt and implement a plan that has been 
        approved by the Secretary as adequate under title VI of the 
        Civil Rights Act of 1964 for the desegregation of minority-
        group-segregated children or faculty in such schools.

``SEC. 5106. APPLICATIONS AND REQUIREMENTS.

    ``(a) Applications.--An eligible local educational agency or 
consortium of such agencies desiring to receive assistance under this 
part shall submit an application to the Secretary at such time, in such 
manner, and containing such information and assurances as the Secretary 
may reasonably require.
    ``(b) Information and Assurances.--Each such application shall 
include--
            ``(1) a description of--
                    ``(A) how assistance made available under this part 
                will be used to promote desegregation, including how 
                the proposed magnet school project will increase 
                interaction among students of different social, 
                economic, ethnic, and racial backgrounds;
                    ``(B) the manner and extent to which the magnet 
                school project will increase student achievement in the 
                instructional area or areas offered by the school;
                    ``(C) how an applicant will continue the magnet 
                school project after assistance under this part is no 
                longer available, including, if applicable, an 
                explanation of why magnet schools established or 
                supported by the applicant with funds under this part 
                cannot be continued without the use of funds under this 
                part;
                    ``(D) how funds under this part will be used to 
                improve student academic performance for all students 
                attending the magnet schools; and
                    ``(E) the criteria to be used in selecting students 
                to attend the proposed magnet school projects; and
            ``(2) assurances that the applicant will--
                    ``(A) use funds under this part for the purposes 
                specified in section 5102;
                    ``(B) employ fully qualified teachers (as defined 
                in section 2002) in the courses of instruction assisted 
                under this part;
                    ``(C) not engage in discrimination based on race, 
                religion, color, national origin, sex, or disability 
                in--
                            ``(i) the hiring, promotion, or assignment 
                        of employees of the agency or other personnel 
                        for whom the agency has any administrative 
                        responsibility;
                            ``(ii) the assignment of students to 
                        schools, or to courses of instruction within 
                        the school, of such agency, except to carry out 
                        the approved plan; and
                            ``(iii) designing or operating 
                        extracurricular activities for students;
                    ``(D) carry out a high-quality education program 
                that will encourage greater parental decisionmaking and 
                involvement; and
                    ``(E) give students residing in the local 
                attendance area of the proposed magnet school projects 
                equitable consideration for placement in those 
                projects.

``SEC. 5107. PRIORITY.

    ``In approving applications under this part, the Secretary shall 
give priority to applicants that--
            ``(1) demonstrate the greatest need for assistance, based 
        on the expense or difficulty of effectively carrying out an 
        approved desegregation plan and the projects for which 
        assistance is sought;
            ``(2) propose to carry out new magnet school projects, or 
        significantly revise existing magnet school projects; and
            ``(3) propose to select students to attend magnet school 
        projects by methods such as lottery, rather than through 
        academic examination.

``SEC. 5108. USE OF FUNDS.

    ``(a) In General.--Grant funds made available under this part may 
be used by an eligible local educational agency or consortium of such 
agencies--
            ``(1) for planning and promotional activities directly 
        related to the development, expansion, continuation, or 
        enhancement of academic programs and services offered at magnet 
        schools;
            ``(2) for the acquisition of books, materials, and 
        equipment, including computers and the maintenance and 
        operation thereof, necessary for the conduct of programs in 
        magnet schools;
            ``(3) for the payment, or subsidization of the 
        compensation, of elementary and secondary school teachers who 
        are fully qualified (as defined in section 1119), and 
        instructional staff where applicable, who are necessary for the 
        conduct of programs in magnet schools;
            ``(4) with respect to a magnet school program offered to 
        less than the entire student population of a school, for 
        instructional activities that--
                    ``(A) are designed to make available the special 
                curriculum that is offered by the magnet school project 
                to students who are enrolled in the school but who are 
                not enrolled in the magnet school program; and
                    ``(B) further the purposes of this part; and
            ``(5) for activities, which may include professional 
        development, that will build the recipient's capacity to 
        operate magnet school programs once the grant period has ended.
    ``(b) Special Rule.--Grant funds under this part may be used in 
accordance with paragraphs (2) and (3) of subsection (a) only if the 
activities described in such paragraphs are directly related to 
improving the students' academic performance based on the State's 
challenging content standards and challenging student performance 
standards or directly related to improving the students' reading skills 
or knowledge of mathematics, science, history, geography, English, 
foreign languages, art, or music, or to improving vocational and 
technical skills.

``SEC. 5109. PROHIBITIONS.

    ``(a) Transportation.--Grants under this part may not be used for 
transportation or any activity that does not augment academic 
improvement.
    ``(b) Planning.--A local educational agency shall not expend funds 
under this part after the third year that such agency receives funds 
under this part for such project.

``SEC. 5110. LIMITATIONS.

    ``(a) Duration of Awards.--A grant under this part shall be awarded 
for a period that shall not exceed three fiscal years.
    ``(b) Limitation on Planning Funds.--A local educational agency may 
expend for planning not more than 50 percent of the funds received 
under this part for the first year of the project, 15 percent of such 
funds for the second such year, and 10 percent of such funds for the 
third such year.
    ``(c) Amount.--No local educational agency or consortium awarded a 
grant under this part shall receive more than $4,000,000 under this 
part in any one fiscal year.
    ``(d) Timing.--To the extent practicable, the Secretary shall award 
grants for any fiscal year under this part not later than July 1 of the 
applicable fiscal year.

``SEC. 5111. EVALUATIONS.

    ``(a) Reservation.--The Secretary may reserve not more than 2 
percent of the funds appropriated under section 5112(a) for any fiscal 
year to carry out evaluations, technical assistance, and dissemination 
projects with respect to magnet school projects and programs assisted 
under this part.
    ``(b) Contents.--Each evaluation described in subsection (a), at a 
minimum, shall address--
            ``(1) how and the extent to which magnet school programs 
        lead to educational quality and improvement;
            ``(2) the extent to which magnet school programs enhance 
        student access to quality education;
            ``(3) the extent to which magnet school programs lead to 
        the elimination, reduction, or prevention of minority group 
        isolation in elementary and secondary schools with substantial 
        proportions of minority students; and
            ``(4) the extent to which magnet school programs differ 
        from other school programs in terms of the organizational 
        characteristics and resource allocations of such magnet school 
        programs.

``SEC. 5112. AUTHORIZATION OF APPROPRIATIONS; RESERVATION.

    ``(a) Authorization.--For the purpose of carrying out this part, 
there are authorized to be appropriated $130,000,000 for fiscal year 
2002 and such sums as may be necessary for the next 4 years.
    ``(b) Availability of Funds for Grants to Agencies Not Previously 
Assisted.--In any fiscal year for which the amount appropriated 
pursuant to subsection (a) exceeds $75,000,000, the Secretary shall 
give priority to using such amounts in excess of $75,000,000 to award 
grants to local educational agencies or consortia of such agencies that 
did not receive a grant under this part in the preceding fiscal year.
    (b) Charter Schools Amendments.--Section 10311 (20 U.S.C. 8067) is 
amended.--
                    (A) by striking ``$100,000,000'' and inserting 
                ``$200,000,000''; and
                    (B) by striking ``1999'' and inserting ``2002''.
    (c) Repeals, Transfers and Redesignations.--The Act (20 U.S.C. 6301 
et seq.) is amended--
            (1) by amending the heading for title IV (20 U.S.C. 7101 et 
        seq.) to read as follows:

                   ``TITLE IV--PUBLIC SCHOOL CHOICE;

            (2) by amending section 4001 to read as follows:

``SEC. 4001. FINDINGS, POLICY, AND PURPOSE.

    ``(a) Findings.--Congress makes the following findings:
            ``(1)(A) Charter schools are an integral part of the 
        educational system in the United States.
            ``(B) Thirty-six States and the District of Columbia have 
        passed lands authorizing charter schools.
            ``(C) A Department of Education evaluation of charter 
        schools shows that 59 percent of charter schools reported that 
        lack of start-up funds posed a difficult or very difficult 
        challenge for the school.
            ``(2) State educational agencies and local educational 
        agencies should hold all schools accountable for the improved 
        performance of all students, including students attending 
        charter schools, under State standards and student assessment 
        measures.
            ``(3) School report cards constitute the key informational 
        component used by parents for effective public school choice.
    ``(b) Policy.--Congress declares it to be the policy of the United 
States--
            ``(1) to support and stimulate improved public school 
        performance through increased public elementary school and 
        secondary school competition and increased Federal financial 
        assistance; and
            ``(2) to provide parents with more choices among public 
        school options.
    ``(c) Purposes.--The purposes of this title are as follows:
            ``(1) To consolidate public school choice programs into 1 
        title.
            ``(2) To increase Federal assistance for charter schools.
            ``(3) To help parents make better and more informed choices 
        by--
                    ``(A) providing continued support and expansion of 
                charter schools and charter school districts; and
                    ``(B) providing financial assistance to States and 
                local educational agencies for the development of local 
                educational agency and school report cards.'';
            (3) by repealing sections 4002 through 4004 (20 U.S.C. 
        7102, 7104), and part A (20 U.S.C. 7111 et seq.), of title IV;
            (4) by transferring part A of title V (20 U.S.C. 7201 et 
        seq.) (as amended by subsection (a)) to title IV and inserting 
        such part A after section 4001;
            (5) by redesignating sections 5101 through 5112 (20 U.S.C. 
        7201, 7212) (as transferred by paragraph (4)) as sections 4101 
        through 4112, respectively, and by redesignating accordingly 
        the references to such sections in part A of title IV (as so 
        transferred);
            (6) by transferring part C of title X (20 U.S.C. 8061 et 
        seq.) (as amended by subsection (b)) to title IV and inserting 
        such part C after part A of title IV (as transferred by 
        paragraph (4));
            (7) by redesignating part C of title IV (as transferred by 
        paragraph (6)) as part B of title IV; and
            (8) by redesignating sections 10301 through 10311 (20 
        U.S.C. 8061, 8067) (as transferred by paragraph (6)) as 
        sections 4201 through 4211, respectively, and by redesignating 
        accordingly the references to such sections in such part B of 
        title IV (as so transferred and redesignated).

SEC. 402. DEVELOPMENT OF PUBLIC SCHOOL CHOICE PROGRAMS; REPORT CARDS.

    Title IV (20 U.S.C. 7101 et seq.) is further amended by adding at 
the end the following:

         ``PART C--DEVELOPMENT OF PUBLIC SCHOOL CHOICE PROGRAMS

``SEC. 4301. GRANTS AUTHORIZED.

    ``(a) In General.--From amounts made available to carry out this 
part for a fiscal year under section 4305, and not reserved under 
subsection (b), the Secretary is authorized to award grants, on a 
competitive basis, to local educational agencies to enable the local 
educational agencies to develop local public school choice programs.
    ``(b) Reservation for Evaluation, Technical Assistance, and 
Dissemination.--From the amount appropriated under section 4305 for any 
fiscal year, the Secretary may reserve not more than 5 percent to carry 
out evaluations under subsection (c), to provide technical assistance, 
and to disseminate information.
    ``(c) Evaluations.--The Secretary may use funds reserved under 
subsection (b) to carry out 1 or more evaluations of programs assisted 
under this part, which shall, at a minimum, address--
            ``(1) how, and the extent to which, the programs supported 
        with funds under this part promote educational equity and 
        excellence; and
            ``(2) the extent to which public schools of choice 
        supported with funds under this part are--
                    ``(A) held accountable to the public;
                    ``(B) effective in improving public education; and
                    ``(C) open and accessible to all students.
    ``(d) Duration.--Grants under this part may be awarded for a period 
not to exceed 3 years.

``SEC. 4302. DEFINITION OF HIGH-POVERTY LOCAL EDUCATIONAL AGENCY.

    ``In this part, the term `high-poverty local educational agency' 
means a local educational agency in which the percentage of children, 
ages 5 to 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 
for the most recent fiscal year for which satisfactory data are 
available is 20 percent or greater.

``SEC. 4303. USES OF FUNDS.

    ``(a) In General.--
            ``(1) Public school choice.--Funds under this part may be 
        used to demonstrate, develop, implement, evaluate, and 
        disseminate information on innovative approaches to promote 
        public school choice, including the design and development of 
        new public school choice options, the development of new 
        strategies for overcoming barriers to effective public school 
        choice, and the design and development of public school choice 
        systems that promote high standards for all students and the 
        continuous improvement of all public schools.
            ``(2) Innovative approaches.--Such approaches at the 
        school, local educational agency, and State levels may 
        include--
                    ``(A) inter-district or intra-district approaches 
                to public school choice, including approaches that 
                increase equal access to high-quality educational 
                programs and diversity in schools;
                    ``(B) public elementary and secondary programs that 
                involve partnerships with institutions of higher 
                education and that are located on the campuses of those 
                institutions;
                    ``(C) programs that allow students in public 
                secondary schools to enroll in postsecondary courses 
                and to receive both secondary and postsecondary 
                academic credit;
                    ``(D) worksite satellite schools, in which State or 
                local educational agencies form partnerships with 
                public or private employers, to create public schools 
                at parents' places of employment; and
                    ``(E) approaches to school desegregation that 
                provide students and parents choice through strategies 
                other than magnet schools.
    ``(b) Limitations.--Funds under this part--
            ``(1) shall supplement, and not supplant, non-Federal funds 
        expended for existing public school choice programs; and
            ``(2) may be used for providing transportation services or 
        costs, except that not more than 10 percent of the funds 
        received under this part shall be used by the local educational 
        agency to provide such services or costs.

``SEC. 4304. GRANT APPLICATION; PRIORITIES.

    ``(a) Application Required.--A State or local educational agency 
desiring to receive a grant under this part shall submit an application 
to the Secretary.
    ``(b) Application Contents.--Each application shall include--
            ``(1) a description of the program for which funds are 
        sought and the goals for such program;
            ``(2) a description of how the program funded under this 
        part will be coordinated with, and will complement and enhance, 
        programs under other related Federal and non-Federal projects;
            ``(3) if the program includes partners, the name of each 
        partner and a description of the partner's responsibilities;
            ``(4) a description of the policies and procedures the 
        applicant will use to ensure--
                    ``(A) its accountability for results, including its 
                goals and performance indicators; and
                    ``(B) that the program is open and accessible to, 
                and will promote high academic standards for, all 
                students; and
            ``(5) such other information as the Secretary may require.
    ``(c) Priorities.--
            ``(1) Low-performing local educational agencies.--First, 
        the Secretary shall give priority to low performing local 
        educational agencies.
            ``(2) High-poverty agencies.--Second, the Secretary shall 
        give priority to applications for projects that serve high-
        poverty local educational agencies.
            ``(3) Partnerships.--The Secretary may give a priority to 
        applications demonstrating that the applicant will carry out 
        the applicant's project in partnership with 1 or more public 
        and private agencies, organizations, and institutions, 
        including institutions of higher education and public and 
        private employers.

``SEC. 4305. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$200,000,000 for fiscal year 2002 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.

                         ``PART D--REPORT CARDS

``SEC. 4401. REPORT CARDS.

    ``(a) Grants Authorized.--The Secretary shall award a grant, from 
allotments under subsection (b), to each State having a State report 
card meeting the requirements described in subsection (g), to enable 
the State annually to publish report cards for each elementary school 
and secondary school that receives funding under this Act and is served 
by the State.
    ``(b) Reservations and Allotments.--
            ``(1) Reservations.--From the amount appropriated under 
        subsection (e) to carry out this part for each fiscal year, the 
        Secretary shall reserve--
                    ``(A) \1/2\ of 1 percent of such amount for 
                payments to the Secretary of the Interior for 
                activities approved by the Secretary, consistent with 
                this part, in schools operated or supported by the 
                Bureau of Indian Affairs, on the basis of their 
                respective needs for assistance under this part; and
                    ``(B) \1/2\ of 1 percent of such amount for 
                payments to outlying areas, to be allotted in 
                accordance with their respective needs for assistance 
                under this part, as determined by the Secretary, for 
                activities, approved by the Secretary, consistent with 
                this part.
            ``(2) State allotments.--From the amount appropriated under 
        subsection (e) for a fiscal year and remaining after the 
        Secretary makes reservations under paragraph (1), the Secretary 
        shall allot to each State having a State report card meeting 
        the requirements described in subsection (g) an amount that 
        bears the same relationship to the remainder as the number of 
        public school students enrolled in elementary schools and 
        secondary schools in the State bears to the number of such 
        students so enrolled in all States.
    ``(c) Within-State Allocations.--Each State educational agency 
receiving a grant under subsection (a) shall allocate the grant funds 
that remain after making the reservation described in subsection (d) to 
each local educational agency in the State in an amount that bears the 
same relationship to the remainder as the number of public school 
students enrolled in elementary schools and secondary schools served by 
the local educational agency bears to the number of such students so 
enrolled in all local educational agencies within the State.
    ``(d) State Reservation of Funds.--Each State educational agency 
receiving a grant under subsection (a) may reserve--
            ``(1) not more than 10 percent of the grant funds to carry 
        out activities described under subsections (f) and (g), and 
        (i)(1) for fiscal year 2002; and
            ``(2) not more than 5 percent of the grant funds to carry 
        out activities described under subsections (f) and (g), and 
        (i)(1) for fiscal year 2003 and each of the 3 succeeding fiscal 
        years.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this part $5,000,000 for fiscal year 2002 and 
such sums as may be necessary for each of the 4 succeeding fiscal 
years.
    ``(f) Annual State Report.--
            ``(1) Reports required.--
                    ``(A) In general.--Except as provided in paragraph 
                (3), not later than the beginning of the 2002-2003 
                school year, a State that receives assistance under 
                this Act shall prepare and disseminate an annual report 
                on all public elementary schools and secondary schools 
                within the State that receive funds under this Act.
                    ``(B) State report cards on education.--In the case 
                of a State that publishes State report cards on 
                education, the State shall include in such report cards 
                the information described in subsection (g).
                    ``(C) Report cards on all public schools.--In the 
                case of a State that publishes a report card on all 
                public elementary schools and secondary schools in the 
                State, the State shall include, at a minimum, the 
                information described in subsection (g) for all public 
                schools that receive funds under this Act.
            ``(2) Implementation; requirements.--
                    ``(A) Implementation.--The State shall ensure 
                implementation at all levels of the report cards 
                described in paragraph (1).
                    ``(B) Requirements.--Annual report cards under this 
                part shall be--
                            ``(i) concise; and
                            ``(ii) presented in a format and manner 
                        that parents can understand including, to the 
                        extent practicable, in a language the parents 
                        can understand.
            ``(3) Publication through other means.--In the event that 
        the State provides no such report card, the State shall, not 
        later than the beginning of the 2002-2003 school year, publicly 
        report the information described in subsection (g) for all 
        public schools that receive funds under this Act.
    ``(g) Content of Annual State Reports.--
            ``(1) Required information.--Each State described in 
        subsection (f)(1)(A), at a minimum, shall include in the annual 
        State report information on each local educational agency and 
        public school that receives funds under this Act, including 
        information regarding--
                    ``(A) student performance on statewide assessments 
                for the year for which the annual State report is made, 
                and the preceding year, in at least English language 
                arts and mathematics, including--
                            ``(i) a comparison of the proportions of 
                        students who performed at the basic, 
                        proficient, and advanced levels in each subject 
                        area, for each grade level at which assessments 
                        are required under title I, with proportions in 
                        each of the same 3 levels at the same grade 
                        levels in the previous school year;
                            ``(ii) a statement on the 3-year trend in 
                        the percentage of students performing at the 
                        basic, proficient, and advanced levels in each 
                        subject area, for each grade level for which 
                        assessments are required under title I; and
                            ``(iii) a statement of the percentage of 
                        students not tested and a listing of categories 
                        of the reasons why such students were not 
                        tested;
                    ``(B) student retention rates in grades, the number 
                of students completing advanced placement courses, and 
                4-year graduation rates;
                    ``(C) the professional qualifications of teachers 
                in the aggregate, including the percentage of teachers 
                teaching with emergency or provisional credentials, the 
                percentage of class sections not taught by fully 
                qualified teachers, and the percentage of teachers who 
                are fully qualified; and
                    ``(D) the professional qualifications of 
                paraprofessionals in the aggregate, the number of 
                paraprofessionals in the aggregate, and the ratio of 
                paraprofessionals to teachers in the classroom.
            ``(2) Student data.--Student data in each report shall 
        contain disaggregated results for the following categories:
                    ``(A) Racial and ethnic groups.
                    ``(B) Gender.
                    ``(C) Economically disadvantaged students, as 
                compared to students who are not economically 
                disadvantaged.
                    ``(D) Students with limited English proficiency, as 
                compared to students who are proficient in English.
                    ``(E) migrant status; and
                    ``(F) students who are disabled, as compared to 
                students who are not disabled.
            ``(3) Optional information.--A State may include in the 
        State annual report any other information the State determines 
        appropriate to reflect school quality and school achievement, 
        including by grade level information on average class size and 
        information on school safety, such as the incidence of school 
        violence and drug and alcohol abuse, and the incidence of 
        student suspensions and expulsions.
            ``(4) Waiver.--The Secretary may grant a waiver to a State 
        seeking a waiver of the requirements of this subsection if the 
        State demonstrates to the Secretary that--
                    ``(A) the content of existing State report cards 
                meets the goals of this part; and
                    ``(B) the State is taking identifiable steps to 
                meet the requirements of this subsection.
    ``(h) Local Educational Agency and School Report Cards.--
            ``(1) Report required.--
                    ``(A) In general.--The State shall ensure that each 
                local educational agency, public elementary school, or 
                public secondary school that receives funds under this 
                Act, collects appropriate data and publishes an annual 
                report card consistent with this subsection.
                    ``(B) Required information.--Each local educational 
                agency, elementary school, and secondary school 
                described in subparagraph (A), at a minimum, shall 
                include in its annual report card--
                            ``(i) the information described in 
                        subsections (g)(1) and (2) for each local 
                        educational agency and school;
                            ``(ii) in the case of a local educational 
                        agency--
                                    ``(I) information regarding the 
                                number and percentage of schools 
                                identified for school improvement, 
                                including schools identified under 
                                section 1116 of this Act, served by the 
                                local educational agency;
                                    ``(II) information on the 3-year 
                                trend in the number and percentage of 
                                elementary schools and 
secondary schools identified for school improvement; and
                                    ``(III) information that shows how 
                                students in the schools served by the 
                                local educational agency perform on the 
                                statewide assessment compared to 
                                students in the State as a whole;
                            ``(iii) in the case of an elementary school 
                        or a secondary school--
                                    ``(I) information regarding whether 
                                the school has been identified for 
                                school improvement; and
                                    ``(II) information that shows how 
                                the school's students performed on the 
                                statewide assessment compared to 
                                students in schools served by the same 
                                local educational agency and to all 
                                students in the State; and
                            ``(iii) other appropriate information, 
                        whether or not the information is included in 
                        the annual State report.
            ``(2) Special rule.--A local educational agency that issues 
        report cards for all public elementary schools and secondary 
        schools served by the agency shall include, at a minimum, the 
        information described in subsection (g) for all public schools 
        that receive funds under this Act.
    ``(i) Dissemination and Accessibility of Reports and Report 
Cards.--
            ``(1) State reports.--State annual reports under subsection 
        (g) shall be disseminated to all elementary schools, secondary 
        schools, and local educational agencies in the State, and made 
        broadly available to the public through means such as posting 
        on the Internet and distribution to the media, and through 
        public agencies.
            ``(2) Local report cards.--Local educational agency report 
        cards under subsection (h) shall be disseminated to all 
        elementary schools and secondary schools served by the local 
        educational agency and to all parents of students attending 
        such schools, and made broadly available to the public through 
        means such as posting on the Internet and distribution to the 
        media, and through public agencies.
            ``(3) School report cards.--Elementary school and secondary 
        school report cards under subsection (h) shall be disseminated 
        to all parents of students attending that school, and made 
        broadly available to the public, through means such as posting 
        on the Internet and distribution to the media, and through 
        public agencies.
    ``(j) Parents Right-To-Know.--
            ``(1) Qualifications.--A local educational agency that 
        receives funds part A of title I or part A of title II shall 
        provide, upon request, in an understandable and uniform format, 
        to any parent of a student attending any school receiving funds 
        under part A of title I or part A of title II, information 
        regarding the professional qualifications of the student's 
        classroom teachers, including, at a minimum--
                    ``(A) whether the teacher is fully qualified as 
                defined in section 2002(1) for the grade levels and 
                subject areas in which the teacher provides 
                instruction;
                    ``(B) whether the teacher is teaching under 
                emergency or other provisional status through which 
                State certification or licensing criteria are waived;
                    ``(C) the baccalaureate degree major of the 
                teacher, any other graduate certification or degree 
                held by the teacher, and the field of discipline of 
                each such certification or degree; and
                    ``(D) whether the student is provided services by 
                paraprofessionals, and the qualifications of any such 
                paraprofessional.
            ``(2) Additional information.--In addition to the 
        information that parents may request under paragraph (1), and 
        the information provided in report cards under this part, a 
        school that receives funds under part A of title I or part A of 
        title II shall provide, to the extent practicable, to each 
        individual parent or guardian--
                    ``(A) information on the level of performance of 
                the individual student, for whom they are the parent or 
                guardian, in each of the State assessments as required 
                under part A of title I; and
                    ``(B) timely notice that the student, for whom they 
                are the parent or guardian, was assigned or taught for 
                2 or more consecutive weeks by a substitute teacher or 
                by a teacher not fully qualified.
    ``(k) Coordination of State Plan Content.--A State shall include in 
its plan under part A of title I or part A of title II, an assurance 
that the State has in effect a policy that meets the requirements of 
this section.
    ``(l) Privacy.--Information collected under this section shall be 
collected and disseminated in a manner that protects the privacy of 
individuals.
    ``(m) Definition.--The term `State' means each of the several 
States of the United States, the District of Columbia, and the 
Commonwealth of Puerto Rico.

                          TITLE V--IMPACT AID

SEC. 501. PAYMENTS RELATING TO FEDERAL ACQUISITION OF REAL PROPERTY.

    Section 8002 (20 U.S.C. 7702), as amended by section 1803 of the 
Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 
(Public Law 106-398), is amended--
            (1) in subsection (h)(4), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) the Secretary shall make a payment to each 
                local educational agency that is eligible to receive a 
                payment under this section for the fiscal year involved 
                in an amount that bears the same relation to 75 percent 
                of the remainder as a percentage share determined for 
                the local educational agency (as determined by dividing 
                the maximum amount that such agency is eligible to 
                receive under subsection (b)(1)(C) by the total maximum 
                amounts that all such local educational agencies are 
                eligible to receive under such subsection) bears to the 
                percentage share determined (in the same manner) for 
                all local educational agencies eligible to receive a 
                payment under this section for the fiscal year 
                involved, except that for purposes of calculating a 
                local educational agency's maximum payment, data from 
                the most current fiscal year shall be used.''; and
            (2) by adding at the end the following:
    ``(n) Loss of Eligibility.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, the Secretary shall make the following minimum 
        payments for each fiscal year to each local educational agency 
        described in paragraph (2):
                    ``(A) For the first fiscal year following the loss 
                of eligibility (as described in paragraph (2)), an 
                amount equal to 90 percent of the amount received in 
                the final fiscal year of eligibility.
                    ``(B) For the second fiscal year following the loss 
                of eligibility (as described in paragraph (2)), an 
                amount equal to 75 percent of the amount received in 
the final fiscal year of eligibility.
                    ``(C) For the third fiscal year following the loss 
                of eligibility (as described in paragraph (2)), an 
                amount equal to 50 percent of the amount received in 
                the final fiscal year of eligibility.
            ``(2) Eligible local educational agencies.--A local 
        educational agency described in this paragraph is an agency 
        that--
                    ``(A) was eligible for, and received, a payment 
                under this section for fiscal year 2002; and
                    ``(B) beginning in fiscal year 2003, is no longer 
                eligible for payments under this section as provided 
                for in subsection (a)(1)(C) as a result of the transfer 
                of the Federal property involved to a non-Federal 
                entity.''.

SEC. 502. REPEAL OF SPECIAL RULE RELATING TO THE COMPUTATION OF 
              PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN.

    Section 8003(a) (20 U.S.C. 7703(a)) is amended by striking 
paragraph (3).

SEC. 503. EXTENSION OF AUTHORIZATION OF APPROPRIATIONS.

    Section 8014 (20 U.S.C. 7714), as amended by section 1817 of the 
Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 
(Public Law 106-398), is amended--
            (1) in subsection (a), by striking ``three succeeding'' and 
        inserting ``six succeeding'';
            (2) in subsection (b), by striking ``three succeeding'' and 
        inserting ``six succeeding'';
            (3) in subsection (c), by striking ``three succeeding'' and 
        inserting ``six succeeding'';
            (4) in subsection (e), by striking ``three succeeding'' and 
        inserting ``six succeeding'';
            (5) in subsection (f), by striking ``three succeeding'' and 
        inserting ``six succeeding''; and
            (6) in subsection (g), by striking ``three succeeding'' and 
        inserting ``six succeeding''.

SEC. 504. REPEALS, TRANSFERS, AND REDESIGNATIONS.

    The Act (20 U.S.C. 6301 et seq.) is amended--
            (1) by repealing title V (20 U.S.C. 7201 et seq.);
            (2) by redesignating title VIII (20 U.S.C. 7701 et seq.) as 
        title V, and transferring the title to follow title IV (as 
        amended by section 402);
            (3) by redesignating references to title VIII as references 
        to title V (as redesignated and transferred by paragraph (2)); 
        and
            (4) by redesignating sections 8001 through 8005, and 8007 
        through 8014 (20 U.S.C. 7701, 7714) (as transferred by 
        paragraph (2)) as sections 5001 through 5001, and 5007 through 
        5014, respectively, and redesignating accordingly the 
        references to such sections 8001 through 8005 and 8007 through 
        8014.

      TITLE VI--HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES

SEC. 601. HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES.

    Title VI (20 U.S.C. 7301 et seq.) is amended to read as follows:

     ``TITLE VI--HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES

``SEC. 6001. FINDINGS, POLICY, AND PURPOSE.

    ``(a) Findings.--Congress makes the following findings:
            ``(1)(A) Congress embraces the view that educators most 
        familiar with schools, including school superintendents, 
        principals, teachers, and school support personnel, have a 
        critical role in knowing what is needed and how best to meet 
        the educational needs of students.
            ``(B) Local educational agencies should therefore have 
        primary responsibility for deciding how to implement funds.
            ``(2)(A) Since the Elementary and Secondary Education Act 
        was first authorized in 1965, the Federal Government has 
        created numerous grant programs, each of which was created to 
        address 1 among the myriad challenges and problems facing 
        education.
            ``(B) Only a few of the Federal grant programs established 
        before the date of enactment of the Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three R's) 
        can be tied to significant quantitative results.
            ``(C) Because Federal education dollars are distributed 
        through a patchwork of programs, with each program having its 
        own set of requirements and restrictions, local educational 
        agencies and schools have found it difficult to leverage funds 
        for maximum impact.
            ``(D) In many cases, Federal education dollars distributed 
        through competitive grant programs are too diffused to provide 
        a true impact at the school level.
            ``(E) As a result of the Federal elementary and secondary 
        education policies in place before the date of enactment of the 
        Public Education Reinvestment, Reinvention, and Responsibility 
        Act (Three R's), the focus of Federal, State, and local 
        educational agencies has been diverted from comprehensive 
        student achievement to administrative compliance.
            ``(3)(A) Every elementary school and secondary school 
        should provide a drug- and violence-free learning environment.
            ``(B) The widespread illegal use of alcohol and drugs among 
        the Nation's secondary school students, and increasingly among 
        elementary school students, constitutes a grave threat to 
        students' physical and mental well-being, and significantly 
        impedes the learning process.
            ``(C) Drug and violence prevention programs are essential 
        components of a comprehensive strategy to promote school 
        safety, youth development, and positive school outcomes, and 
        reduce the demand for and illegal use of alcohol, tobacco, and 
        drugs throughout the Nation.
            ``(D) Schools, local organizations, parents, students, and 
        communities throughout the Nation have a special responsibility 
        to work together to combat the continuing epidemic of violence 
        and illegal drug use, and should measure the success of 
        programs established to address this epidemic against clearly 
        defined goals and objectives.
            ``(E) Drug and violence prevention programs are most 
        effective when implemented within a research-based, drug and 
        violence prevention framework of proven effectiveness.
            ``(F) Substance abuse and violence are intricately related, 
        and must be dealt with in a holistic manner.
            ``(4)(A) Technology can produce far greater opportunities 
        for all students to meet high learning standards, promote 
        efficiency and effectiveness in education, and help immediately 
        and dramatically reform our Nation's educational system.
            ``(B) Because most Federal and State educational technology 
        programs have focused on acquiring educational technologies, 
        rather than emphasizing the utilization of those technologies 
        in the classroom and the training and infrastructure required 
efficiently to support the technologies, the full potential of 
educational technology has rarely been realized.
            ``(C) The effective use of technology in education has been 
        inhibited by the inability of many State educational agencies 
        and local educational agencies to invest in and support needed 
        technologies, and to obtain sufficient resources to seek expert 
        technical assistance in developing high-quality professional 
        development activities for teachers and keeping pace with the 
        rapid technological advances.
            ``(D) To remain competitive in the global economy, which is 
        increasingly reliant on a workforce that is comfortable with 
        technology and able to integrate rapid technological changes 
        into production processes, it is imperative that our Nation 
        maintain a work-ready labor force.
    ``(b) Policy.--Congress declares it to be the policy of the United 
States--
            ``(1) to facilitate significant innovation in elementary 
        school and secondary school education programs;
            ``(2) to enrich the learning environment of students and 
        expand learning opportunity for students, including longer 
        school days and school years;
            ``(3) to provide a safe learning environment for all 
        students;
            ``(3) to ensure that all students are technologically 
        literate; and
            ``(4) to assist State educational agencies and local 
        educational agencies in building the agencies' capacity to 
        establish, implement, and sustain innovative programs for 
        public elementary and secondary school students.
    ``(c) Purposes.--The purposes of this title are as follows:
            ``(1) To provide supplementary assistance for school 
        improvement to elementary schools, secondary schools, and local 
        educational agencies--
                    ``(A) that have been or are at risk of being 
                identified as being in need of improvement, as defined 
                in section 1116 (c) and (d), to carry out activities 
                (as described in such schools' or agencies' improvement 
                plans developed under such section) that are designed 
                to remedy the circumstances that caused such schools or 
                agencies to be identified as in need of improvement; or
                    ``(B) to improve core content curriculum and 
                instructional practices and materials in core subject 
                areas to ensure that all students are at the proficient 
                standard level within 10 years of the date of enactment 
                of the Public Education Reinvestment, Reinvention, and 
                Responsibility Act (Three R's).
            ``(2) To provide assistance to local educational agencies 
        and schools for innovative programs and activities that will 
        transform schools into 21st century opportunities for students 
        by--
                    ``(A) creating a challenging learning environment 
                and facilitating academic enrichment through innovative 
                academic programs; or
                    ``(B) providing extra learning, time, and 
                opportunities for students.
            ``(3) To provide assistance to local educational agencies, 
        schools, and communities to strengthen existing programs or 
        develop and implement new programs based on proven researched-
        based strategies that create safe learning environments by--
                    ``(A) preventing violence and other high-risk 
                behavior from occurring in and around schools; and
                    ``(B) preventing the illegal use of alcohol, 
                tobacco, and drugs among students.
            ``(4) To create New Economy Technology Schools (NETs) by 
        providing assistance to local educational agencies and schools 
        for--
                    ``(A) the acquisition, development, 
                interconnection, implementation, improvement, and 
                maintenance of an effective educational technology 
                infrastructure;
                    ``(B) the acquisition and maintenance of technology 
                equipment and the provision of training in the use of 
                such equipment for teachers, school library and media 
                personnel, and administrators;
                    ``(C) the acquisition or development of technology-
                enhanced curricula and instructional materials that are 
                aligned with challenging State content and student 
                performance standards; and
                    ``(D) the acquisition or development and 
                implementation of high-quality professional development 
                for teachers in the use of technology and its 
                integration with challenging State content and student 
                performance standards.

``SEC. 6002. DEFINITIONS.

    ``In this title:
            ``(1) Authentic task.--The term `authentic task' means a 
        real world task that--
                    ``(A) is challenging, meaningful, 
                multidisciplinary, and interactive;
                    ``(B) involves reasoning, problem solving, and 
                composition; and
                    ``(C) is not a discrete component skill that has no 
                obvious connection with students' activities outside of 
                school.
            ``(2) State.--The term `State' means each of the several 
        States, the District of Columbia, and the Commonwealth of 
        Puerto Rico.

``SEC. 6003. PROGRAMS AUTHORIZED.

    ``(a) Grants Authorized.--From the amount appropriated under 
section 6009 for a fiscal year, the Secretary shall award a grant to 
each State educational agency having a State plan approved under 
section 6005(a)(4) to enable the State educational agency to award 
grants to local educational agencies in the State.
    ``(b) Reservations and Allotments.--
            ``(1) Reservations.--From the amount appropriated under 
        section 6009 for a fiscal year, the Secretary shall reserve--
                    ``(A) not more than \1/2\ of 1 percent of such 
                amount for payments to the Bureau of Indian Affairs for 
                activities, approved by the Secretary, consistent with 
                this title;
                    ``(B) not more than \1/2\ of 1 percent of such 
                amounts for payments to outlying areas, to be allotted 
                in accordance with their respective needs for 
                assistance under this title as determined by the 
                Secretary, for activities, approved by the Secretary, 
                consistent with this title; and
                    ``(C) such sums as may be necessary to continue to 
                support any multiyear award made under titles III, IV, 
                V (part B), or X (as such titles were in effect on the 
                day preceding the date of enactment of the Public 
                Education Reinvestment, Reinvention, and Responsibility 
                Act (Three R's)) until the completion of the multiyear 
                award.
            ``(2) State allotments.--
                    ``(A) In general.--From the amount appropriated 
                under section 6009 for a fiscal year and remaining 
                after the Secretary makes reservations under paragraph 
                (1), the Secretary shall allot to each State having a 
                State plan approved under section 6005(a)(4) the sum 
                of--
                            ``(i) an amount that bears the same 
                        relationship to 50 percent of the remainder as 
                        the amount the State received under part A of 
                        title I bears to the amount all States received 
                        under such part; and
                            ``(ii) an amount that bears the same 
                        relationship to 50 percent of the remainder as 
                        the school-age population in the State bears to 
                        the school-age population in all States.
                    ``(B) Data.--For the purposes of determining the 
                school-age population in a State and in all States, the 
                Secretary shall use the latest available Bureau of the 
                Census data.
    ``(c) State Minimum.--For any fiscal year, no State shall be 
allotted under this section an amount that is less than 0.4 percent of 
the total amount allotted to all States under subsection (b)(2).
    ``(d) Hold-Harmless Amounts.--For fiscal year 2002, notwithstanding 
subsection (e), the amount allotted to each State under this section 
shall be not less than 100 percent of the total amount the State was 
allotted in formula grants under titles III, IV, and VI (as such titles 
were in effect on the day preceding the date of enactment of the Public 
Education Reinvestment, Reinvention, and Responsibility Act (Three 
R's)) for the preceding fiscal year.
    ``(e) Ratable Reductions.--If the sums made available under 
subsection (b)(2)(A) for any fiscal year are insufficient to pay the 
full amounts that all State educational agencies are eligible to 
receive under that subsection for such year, the Secretary shall 
ratably reduce such amounts for such year.

``SEC. 6004. WITHIN STATE ALLOCATION.

    ``(a) Short Title.--Each State educational agency for a State 
receiving a grant award under section 6003(b)(2) shall--
            ``(1) set aside not more than 1 percent of the grant funds 
        for the cost of administering the activities under this title;
            ``(2) set aside not more than 4 percent of the grant funds 
        to--
                    ``(A) provide for the establishment of high-
                quality, internationally competitive content and 
                student performance standards and strategies that all 
                students will be expected to meet;
                    ``(B) provide for the establishment of high-
                quality, rigorous assessments that include multiple 
                measures and demonstrate comprehensive knowledge;
                    ``(C) encourage and enable all State educational 
                agencies and local educational agencies to develop, 
                implement, and strengthen comprehensive education 
                improvement plans that address student achievement, 
                teacher quality, parent involvement, and reliable 
                measurement and evaluation methods; and
                    ``(D) encourage and enable all States to develop 
                and implement value-added assessments, including model 
                value-added assessments identified by the Secretary 
                under section 7004(a)(6); and
            ``(3) using the remaining 95 percent of the grant funds, 
        make grants by allocating to each local educational agency in 
        the State having a local educational agency plan approved under 
        section 6005(b)(3) the sum of--
                    ``(A) an amount that bears the same relationship to 
                60 percent of such remainder as the amount the local 
                educational agency received under part A of title I 
                bears to the amount all local educational agencies in 
                the State received under such part; and
                    ``(B) an amount that bears the same relationship to 
                40 percent of such remainder as the school-age 
                population in the area served by the local educational 
                agency bears to the school-age population in the area 
                served by all local educational agencies in the State.
    ``(b) Matching Requirement.--
            ``(1) In general.--Each eligible local educational agency 
        receiving a grant under subsection (a) shall contribute 
        resources with respect to the local authorized activities to be 
        assisted under this title in case or in-kind from non-Federal 
        sources in an amount equal to 25 percent of the Federal funds 
        awarded under the grant.
            ``(2) Waiver.--A State educational agency may grant a 
        waiver of the requirements of paragraph (1) to a local 
        educational agency that--
                    ``(A) applies for such a waiver; and
                    ``(B) demonstrates extreme circumstances for being 
                unable to meet such requirements.

``SEC. 6005. PLANS.

    ``(a) State Plans.--
            ``(1) In general.--The State educational agency for each 
        State desiring a grant under this title shall submit a State 
        plan to the Secretary at such time, in such manner, and 
        accompanied by such information as the Secretary may require.
            ``(2) Consolidated plan.--A State plan submitted under 
        paragraph (1) may be submitted as part of a consolidated plan 
        under section 8302.
            ``(3) Contents.--Each plan submitted under paragraph (1) 
        shall--
                    ``(A) describe how the State educational agency 
                will assist each local educational agency and school 
                served under this title to comply with the requirements 
                described in section 6006 that are applicable to the 
                local educational agency or school;
                    ``(B) certify that the State has in place the 
                standards and assessments required under section 1111;
                    ``(C) certify that the State educational agency has 
                a system, as required under section 1111, for--
                            ``(i) holding each local educational agency 
                        and school accountable for adequate yearly 
                        progress (as defined in section 1111(b)(2)(B));
                            ``(ii) identifying local educational 
                        agencies and schools that are in need of 
                        improvement and corrective action (as required 
                        in sections 1116 and 1117);
                            ``(iii) assisting local educational 
                        agencies and schools that are identified for 
                        improvement with the development of improvement 
                        plans; and
                            ``(iv) providing technical assistance, 
                        professional development, and other capacity 
                        building as needed to get such agencies and 
                        schools out of improvement status;
                    ``(D) certify that the State educational agency 
                shall use the disaggregated results of student 
                assessments required under section 1111(b)(4), and 
                other measures or indicators available, to review 
                annually the progress of each local educational agency 
                and school served under this title to determine whether 
                or not each such agency and school is making adequate 
                yearly progress as required under section 1111;
                    ``(E) certify that the State educational agency 
                will take action against a local educational agency 
                that is in corrective action and receiving funds under 
                this title as described in section 6006(d)(1);
                    ``(F) describe what, if any, State and other 
                resources will be provided to local educational 
                agencies and schools served under this title to carry 
                out activities consisted with this title; and
                    ``(G) certify that the State educational agency has 
                a system to hold local educational agencies accountable 
                for meeting the annual performance objectives required 
                under subsection (b)(2)(C).
            ``(4) Approval.--The Secretary, using a peer review 
        process, shall approve a State plan if the State plan meets the 
        requirements of this subsection.
            ``(5) Duration of the plan.--Each State plan shall remain 
        in effect for the duration of the State's participation under 
        this title.
            ``(6) Requirement.--A State shall not be eligible to 
        receive funds under this title unless the State has established 
        the standards and assessments required under section 1111.
    ``(b) Local Plans.--
            ``(1) In general.--Each local educational agency shall 
        annually submit a local educational agency plan to the State 
        educational agency at such time, in such manner, and 
        accompanied by such information as the State educational agency 
        may require.
            ``(2) Contents.--Each local educational agency shall--
                    ``(A) describe the programs for which funds 
                allocated under section 6004(3) will be used and the 
                reasons for the selection of such programs;
                    ``(B) describe the methods the local educational 
                agency will use to measure the annual impact of 
                programs described under subparagraph (A) and the 
                extent to which such programs will increase student 
                academic performance;
                    ``(C) describe the annual, quantifiable, and 
                measurable performance goals and objectives for each 
                program described under subparagraph (A) and the extent 
                to which such goals and objectives are aligned with 
                State content and student performance standards;
                    ``(D) describe how the local educational agency 
                will hold schools accountable for meeting the intended 
                performance objectives for each program described under 
                subparagraph (C);
                    ``(E) provide an assurance that the local 
                educational agency has met the local plan requirements 
                described in section 1112 for--
                            ``(i) holding schools accountable for 
                        adequate yearly progress, including meeting 
                        annual numerical goals for improving the 
                        performance of all groups of students based on 
                        the student performance standards set by the 
                        State under section 1111(b)(1)(D)(ii);
                            ``(ii) identifying schools for school 
                        improvement or corrective action;
                            ``(iii) fulfilling the local educational 
                        agency's school improvement responsibilities 
                        described in section 1116, including taking 
                        corrective actions under section 1116(c)(10); 
                        and
                            ``(iv) providing technical assistance, 
                        professional development, or other capacity 
                        building to schools served by the agency;
                    ``(F) certify that the local educational agency 
                will take action against a school that is in corrective 
                action and receiving funds under this title as 
                described under section 6006(d)(2);
                    ``(G) describe what State and local resources will 
                be contributed to carrying out programs described under 
                subparagraph (A);
                    ``(H) provide assurances that the local educational 
                agency consulted, at a minimum, with parents, school 
                board members, teachers, administrators, business 
                partners, education organizations, and community groups 
                to develop the local educational plan and select the 
                programs to be assisted under this title; and
                    ``(I) provide assurances that the local educational 
                agency will continue such consultation on a regular 
                basis and will provide the State with annual evidence 
                of such consultation.
            ``(3) Approval.--The State, using a peer review process, 
        shall approve a local educational agency plan if the plan meets 
        the requirements of this subsection.
            ``(4) Duration of the plan.--Each local educational agency 
        plan shall remain in effect for the duration of the local 
        educational agency's participation under this title.
            ``(5) Public review.--Each State educational agency will 
        make publicly available each local educational agency plan 
        approved under paragraph (3).

``SEC. 6006. LOCAL USES OF FUNDS AND ACCOUNTABILITY.

    ``(a) Administrative Expenses.--Each local educational agency 
receiving a grant award under section 6004(3) may use not more than 1 
percent of the grant funds for any fiscal year for the cost of 
administering this title.
    ``(b) Required Activities.--Each local educational agency receiving 
a grant award under section 6004(3) shall use the grant funds pursuant 
to this subsection to establish and carry out programs that are 
designed to achieve, separately or cumulatively, each of the goals 
described in the category areas described in paragraphs (1) through 
(4).
            ``(1) School improvement.--Each local educational agency 
        shall use 30 percent of the grant funds--
                    ``(A) in the case of a school that has been 
                identified as being in need of improvement under 
                section 1116(c), for activities or strategies that are 
                described in section 1116(c) that focus on removing 
                such school from improvement status; or
                    ``(B) for programs that seek to raise the academic 
                achievement levels of all elementary school and 
                secondary school students based on challenging State 
                content and student performance standards and, to the 
                greatest extent possible--
                            ``(i) incorporate the best practices 
                        developed from research-based methods and 
                        practices;
                            ``(ii) are aligned with challenging State 
                        content and performance standards and focused 
                        on reinforcing and boosting the core academic 
                        skills and knowledge of students who are 
                        struggling academically, as determined by State 
                        assessments under section 1111(b)(4) and local 
                        evaluations;
                            ``(iii) focus on accelerated learning 
                        rather than remediation, so that students will 
                        master the high level of skills and knowledge 
                        needed to meet the highest State standards or 
                        to perform at high levels on all State 
                        assessments;
                            ``(iv) offer teachers, principals, and 
                        administrators professional development and 
                        technical assistance that are aligned with the 
                        content of such programs; and
                            ``(v) address local needs, as determined by 
                        the local educational agency's evaluation of 
                        school and districtwide data.
            ``(2) 21st century opportunities.--Each local educational 
        agency shall use 25 percent of the grant funds for--
                    ``(A) programs that provide for extra learning, 
                time, and opportunities for students so that all 
                students may achieve high levels of learning and meet 
                the State proficient standard level within 10 years of 
                the date of enactment of the Public Education 
                Reinvestment, Reinvention, and Responsibility Act 
                (Three R's);
                    ``(B) programs to improve higher order thinking 
                skills of all students, especially disadvantaged 
                students;
                    ``(C) promising innovative education reform 
                projects that are consistent with challenging State 
                content and student performance standards; or
                    ``(D) programs that focus on ensuring that 
                disadvantaged students enter elementary school with the 
                basic skills needed to meet the highest State content 
                and student performance standards.
            ``(3) Safe learning environments.--Each local educational 
        agency shall use 15 percent of the grant funds for programs 
        that help ensure that all elementary school and secondary 
        school students learn in a safe and supportive environment by--
                    ``(A) reducing drugs, violence, and other high-risk 
                behavior in schools;
                    ``(B) providing safe, extended-day opportunities 
                for students;
                    ``(C) providing professional development activities 
                for teachers, principals, mental health professionals, 
                and guidance counselors in dealing with students 
                exhibiting distress (such as substance abuse, 
                disruptive behavior, and suicidal behavior);
                    ``(D) recruiting or retaining high-quality mental 
                health professionals;
                    ``(E) providing character education for students; 
                or
                    ``(F) providing alternative educational opportunity 
                for violent and disruptive students; or
                    ``(G) meeting other objectives that are established 
                under State standards regarding safety or that address 
                local community concerns.
            ``(4) New economy technology schools.--
                    ``(A) In general.--Each local educational agency 
                shall use 30 percent of the grant funds to establish 
                technology programs that will transform schools into 
                New Economy Technology Schools (NETS) and, to the 
                greatest extent possible, will--
                            ``(i) increase student performance related 
                        to an authentic task;
                            ``(ii) integrate the use of technology into 
                        activities that are a core part of classroom 
                        curricula and are available to all students;
                            ``(iii) emphasize how to use technology to 
                        accomplish authentic tasks;
                            ``(iv) provide professional development and 
                        technical assistance to teachers so that 
                        teachers may integrate technology into daily 
                        teaching activities that are directly aligned 
                        with State content and student performance 
                        standards; and
                            ``(v) enable the local educational agency 
                        annually to increase the percentage of 
                        classrooms with access to technology, 
                        particularly in schools in which not less than 
                        50 percent of the school-age population comes 
                        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) Limitation.--Each local educational agency 
                shall use not more than 50 percent of the grant funds 
                described in subparagraph (A) to purchase, upgrade, or 
                retrofit computer hardware in schools in which not less 
                than 50 percent of the school-age population comes from 
                families at or below the poverty line, as defined in 
                subparagraph (A)(v).
    ``(c) Transfer of Funds.--Notwithstanding subsection (b)--
            ``(1) a local educational agency that meets adequate yearly 
        progress requirements for student performance, as established 
        by the State educational agency under section 1111, may 
        allocate, at the local educational agency's discretion, not 
        more than 30 percent of the grant funds received under section 
        6004(3) among the 4 funding categories described in subsection 
        (b);
            ``(2) a local educational agency that exceeds the adequate 
        yearly progress requirements described in paragraph (1) by a 
        significant amount, as determined by the State educational 
        agency, may allocate, at the local educational agency's 
        discretion, not more than 50 percent of the grant funds 
        received under section 6004(3) among the 4 funding categories 
        described in subsection (b); and
            ``(3) a local educational agency that is identified as in 
        need of improvement, as defined under section 1117, may apply 
        not more than 25 percent of the grant funds described in 
        subsection (b) (2), (3), or (4) to school improvement 
        activities described in subsection (b)(1).
    ``(d) Limitations for Schools and Local Educational Agencies in 
Corrective Action.--
            ``(1) Local educational agencies in corrective action.--If 
        a local educational agency is identified for corrective action 
        under section 1116(d), the State educational agency shall--
                    ``(A) notwithstanding any other provision of law, 
                specify how the local educational agency shall spend 
                the grant funds in order to focus the local educational 
                agency on activities that will be the most effective in 
                raising student performance levels; and
                    ``(B) implement corrective action in accordance 
                with the provisions for corrective action described in 
                section 1116(d).
            ``(2) Schools in corrective action.--If a school is 
        identified for corrective action under section 1116(c), the 
        local educational agency shall--
                    ``(A) specify how the school shall spend grant 
                funds received under this section in order to focus on 
                activities that will be the most effective in raising 
                student performance levels; and
                    ``(B) implement corrective action in accordance 
                with the provisions for corrective action described in 
                section 1116(c)(10).
            ``(3) Duration.--Limitations imposed on schools and local 
        educational agencies in corrective action under paragraphs (1) 
        and (2) shall remain in effect until such time as the school or 
        local educational agency has made sufficient improvement, as 
        determined by the State educational agency, and is no longer in 
        corrective action.

``SEC. 6007. STATE AND LOCAL RESPONSIBILITIES.

    ``(a) Data Review.--
            ``(1) State and local review.--A State educational agency 
        shall jointly review with a local educational agency described 
        in section 6006(d)(1) the local educational agency's data 
        gathered from student assessments and other measures required 
        under section 1111(b)(4), in order to determine how the local 
        educational agency shall spend the grant funds pursuant to 
        section 6006(d)(1)(A) in order to substantially increase 
        student performance levels.
            ``(1) School and local review.--A local educational agency 
        shall jointly review with a school described in section 
        6006(d)(2) the school's data gathered from student assessments 
        and other measures required under section 1111(b)(4), in order 
        to determine how the school shall spend grant funds pursuant to 
        section 6006(d)(2) in order to substantially increase student 
        performance levels.
    ``(b) Technical Assistance.--
            ``(1) State assistance.--
                    ``(A) A State educational agency shall provide, 
                upon request by a local educational agency receiving 
                grant funds under this title, technical assistance to 
                the local educational agency and schools served by the 
                local educational agency, including assistance in 
                analyzing student performance and the impact of 
                programs assisted under this title and identifying the 
                best instructional strategies and methods for carrying 
                out such programs.
                    ``(B) State assistance may be provided by--
                            ``(i) the State educational agency; or
                            ``(ii) with the local educational agency's 
                        approval, by an institution of higher 
                        education, a private not-for-profit or for-
                        profit organization, an educational service 
                        agency, the recipient of a Federal contract or 
                        cooperative agreement as described in section 
                        7005, a nontraditional entity such as a 
                        corporation or consulting firm, or any other 
                        entity with experience in the program area for 
                        which the assistance is being sought.
            ``(2) Local assistance.--
                    ``(A) A local educational agency shall provide, 
                upon request by an elementary school or secondary 
                school served by the agency, technical assistance to 
                such school, including assistance in analyzing student 
                performance and the impact of programs assisted under 
                this title, and identifying the best instructional 
                strategies and methods for carrying out such programs.
                    ``(B) Local assistance may be provided by--
                            ``(i) the State educational agency or local 
                        educational agency; or
                            ``(ii) with the school's approval, by an 
                        institution of higher education, a private not-
                        for-profit or for-profit organization, an 
                        educational service agency, the recipient of a 
                        Federal contract or cooperative agreement as 
                        described in section 7005, a nontraditional 
                        entity such as a corporation or consulting 
                        firm, or any other entity with experience in 
                        the program area for which the assistance is 
                        being sought.

``SEC. 6008. LOCAL REPORTS.

    ``Each local educational agency receiving funds under this title 
shall annually publish and disseminate to the public in a format and, 
to the extent practicable, in a language that parents can understand, a 
report on--
            ``(1) information describing the use of funds in the 4 
        category areas described in section 6006(b);
            ``(2) the impact of such programs and an assessment of such 
        programs' effectiveness; and
            ``(3) the local educational agency's progress toward 
        attaining the goals and objectives described under section 
        6005(b), and the extent to which programs assisted under this 
        title have increased student achievement.

``SEC. 6009. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this title 
$3,500,000,000 for fiscal year 2002, and such sums as may be necessary 
for each of the 4 succeeding fiscal years.''.

                       TITLE VII--ACCOUNTABILITY

SEC. 701. ACCOUNTABILITY.

    Title VII of the Act (20 U.S.C. 7401 et seq.) is amended to read as 
follows:

                      ``TITLE VII--ACCOUNTABILITY

                      ``PART A--PERFORMANCE REVIEW

``SEC. 7001. SANCTIONS.

    ``(a) Third Fiscal Year.--If performance objectives established 
under a covered provision have not been met by a State receiving grant 
funds under such provision by the end of the third fiscal year for 
which the State receives such grant funds, the Secretary shall reduce 
by 50 percent the amount the State is entitled to receive for 
administrative expenses under such provision.
    ``(b) Fourth Fiscal Year.--If the State fails to meet the 
performance objectives established under a covered provision by the end 
of the fourth fiscal year for which the State receives grant funds 
under the covered provision, the Secretary shall reduce the total 
amount the State receives under title VI by 30 percent.
    ``(c) Duration.--If the Secretary determines, under subsection (a) 
or (b), that a State failed to meet the performance objectives 
established under a covered provision for a fiscal year, the Secretary 
shall reduce grant funds in accordance with subsection (a) or (b) for 
the State for each subsequent fiscal year until the State demonstrates 
that the State met the performance objectives for the fiscal year 
preceding the demonstration.
    ``(d) Technical Assistance.--The Secretary shall provide technical 
assistance, if sought, to a State subjected to sanctions under 
subsection (a) or (b).
    ``(e) Local Sanctions.--
            ``(1) In general.--Each State receiving assistance under 
        title I, II, III, or VI shall develop a system to hold local 
        educational agencies accountable for meeting--
                    ``(A) the performance objectives established under 
                part A of title II, part A of title III, and title VI; 
                and
                    ``(B) the adequate yearly progress requirements 
                established under part A of title I, and required under 
                part A of title III and title VI.
            ``(2) Sanctions.--A system developed under paragraph (c) 
        shall include a mechanism for sanctioning local educational 
        agencies for low performance with regard to failure to meet 
        such performance objectives and adequate yearly progress 
        levels.
    ``(f) Definitions.--In this section:
            ``(1) Covered provision.--The term `covered provision' 
        means part A of title I, part A of title II, part A of title 
        III, and section 6005(b)(2)(C).
            ``(2) Performance objectives.--The term `performance 
        objectives' means in the case of--
                    ``(A) part A of title I, the adequate yearly 
                progress levels established under subsections 
                (b)(2)(A)(iii) and (b)(2)(B) of section 1111;
                    ``(B) part A of title II, the set of performance 
                objectives established in section 2014;
                    ``(C) part A of title III, the set of performance 
                objectives established in section 3109; and
                    ``(D) title VI, the set of performance objectives 
                set by each local educational agency in section 
                6005(b)(2)(C).

``SEC. 7002. REWARDING HIGH PERFORMANCE.

    ``(a) State Rewards.--
            ``(1) In general.--From amounts appropriated under 
        subsection (d), and from amounts made available as a result of 
        reductions under section 7001, the Secretary shall make awards 
        to States that--
                    ``(A) for 3 consecutive years have--
                            ``(i) exceeded the States' performance 
                        objectives established for any title under this 
                        Act;
                            ``(ii) exceeded their adequate yearly 
                        progress levels established in section 1111(b);
                            ``(iii) significantly narrowed the gaps 
                        between minority and non-minority students, and 
                        between economically disadvantaged and non-
                        economically disadvantaged students;
                            ``(iv) raised all students to the 
                        proficient standard level prior to 10 years 
                        from the date of enactment of the Public 
                        Education Reinvention, Reinvestment, and 
                        Responsibility Act; or
                            ``(v) significantly increased the 
                        percentage of core classes being taught by 
                        fully qualified teachers teaching in schools 
                        receiving funds under part A of title I; or
                    ``(B) by not later than fiscal year 2005, ensure 
                that all teachers teaching in the States' public 
                elementary schools and secondary schools are fully 
                qualified.
            ``(2) State use of funds.--
                    ``(A) Demonstration sites.--Each State receiving an 
                award under paragraph (1) shall use a portion of the 
                award that is not distributed under subsection (b) to 
                establish demonstration sites with respect to high-
                performing schools (based on achievement or performance 
                levels) objectives and adequate yearly progress in 
                order to help low-performing schools.
                    ``(B) Improvement of performance.--Each State 
                receiving an award under paragraph (1) shall use the 
                portion of the award that is not used pursuant to 
                subparagraph (A) or (C) and is not distributed under 
                subsection (b) for the purpose of improving the level 
                of performance of all elementary and secondary school 
                students in the State, based on State content and 
                performance standards.
                    ``(C) Reservation for administrative expenses.--
                Each State receiving an award under paragraph (1) may 
                set aside not more than \1/2\ of 1 percent of the award 
                for the planning and administrative costs of carrying 
                out this section, including the costs of distributing 
                awards to local educational agencies.
    ``(b) Local Educational Agency Awards.--
            ``(1) In general.--Each State receiving an award under 
        subsection (a)(1) shall distribute 80 percent of the award 
        funds to local educational agencies in the State that--
                    ``(A) for 3 consecutive years have--
                            ``(i) exceeded the State-established local 
                        educational agency performance objectives 
                        established for any title under this Act;
                            ``(ii) exceeded the adequate yearly 
                        progress level established under section 
                        1111(b)(2);
                            ``(iii) significantly narrowed the gaps 
                        between minority and nonminority students, and 
                        between economically disadvantaged and 
                        noneconomically disadvantaged students;
                            ``(iv) raised all students enrolled in 
                        schools within the local educational agency to 
                        the proficient standard level prior to 10 years 
                        from the date of enactment of the Public 
                        Education Reinvestment, Reinvention, and 
                        Responsibility Act (Three R's); or
                            ``(v) significantly increased the 
                        percentage of core classes being taught by 
                        fully qualified teachers teaching in schools 
                        receiving funds under part A of title I; or
                    ``(B) not later than December 31, 2005, ensured 
                that all teachers teaching in the elementary schools 
                and secondary schools served by the local educational 
                agencies are fully qualified; or
                    ``(C) have attained consistently high achievement 
                in another area that the State deems appropriate to 
                reward.
            ``(2) School-based performance awards.--A local educational 
        agency may use funds made available under paragraph (1) for 
        activities such as school-based performance awards.
            ``(3) Reservation for administrative expenses.--Each local 
        educational agency receiving an award under paragraph (1) may 
        set aside not more than \1/2\ of 1 percent of the award for the 
        planning and administrative costs of carrying out this section, 
        including the costs of distributing awards to eligible 
        elementary schools and secondary schools, teachers, and 
        principals.
    ``(c) School Rewards.--Each local educational agency receiving an 
award under subsection (b) shall consult with teachers and principals 
to develop a reward system, and shall use the award funds--
            ``(1) to reward individual schools that demonstrate high 
        performance with respect to--
                    ``(A) increasing the academic achievement of all 
                students;
                    ``(B) narrowing the academic achievement gap 
                described in section 1111(b)(2)(B)(vii);
                    ``(C) improving teacher quality;
                    ``(D) increasing high-quality professional 
                development for teachers, principals, and 
                administrators; or
                    ``(E) improving the English proficiency of limited 
                English proficient students;
            ``(2) to reward collaborative teams of teachers, or teams 
        of teachers and principals, that--
                    ``(A) significantly increase the annual performance 
                of low-performing students; or
                    ``(B) significantly improve in a fiscal year the 
                English proficiency of limited English proficient 
                students;
            ``(3) to reward principals who successfully raise the 
        performance of a substantial number of low-performing students 
        to high academic levels;
            ``(4) to develop or implement school district-wide programs 
        or policies to increase the level of student performance on 
        State assessments that are aligned with State content 
        standards; and
            ``(5) to reward schools for consistently high achievement 
        in another area that the local educational agency deems 
        appropriate to reward.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $200,000,000 for fiscal year 
2002, and such sums as may be necessary for each of the 4 succeeding 
fiscal years.
    ``(e) Definition.--The term `low-performing student' means students 
who are below the basic State standard level.

``SEC. 7003. SUPPLEMENT NOT SUPPLANT.

    ``A State educational agency and local educational agency shall use 
funds under this title to supplement, and, not supplant, Federal, 
State, and local funds that, in the absence of funds under this title, 
would otherwise be spent for activities of the type described in 
section 7002.

``SEC. 7004. SECRETARY'S ACTIVITIES.

    ``(a) In General.--Notwithstanding any other provision of this Act, 
from amounts appropriated under subsection (b) and not reserved under 
subsection (c), the Secretary may--
            ``(1) support activities of the National Board for 
        Professional Teaching Standards;
            ``(2) study and disseminate information regarding model 
        programs assisted under this Act;
            ``(3) provide training and technical assistance to States, 
        local educational agencies, elementary schools and secondary 
        schools, Indian tribes, and other recipients of grant funds 
        under this Act that are carrying out activities assisted under 
        this Act, including entering into contracts or cooperative 
        agreements with public or private nonprofit entities or 
        consortia of such entities, in order to provide comprehensive 
        training and technical assistance related to the administration 
        and implementation of activities assisted under this Act;
            ``(4) support activities that will promote systemic 
        education reform at the State and local levels;
            ``(5) award grants or contracts to public or private 
        nonprofit entities to enable the entities--
                    ``(A) to develop and disseminate exemplary reading, 
                mathematics, science, and technology educational 
                practices, and instructional materials to States, local 
                educational agencies, and elementary schools and 
                secondary schools; and
                    ``(B) to provide technical assistance for the 
                implementation of teaching methods and assessment tools 
                for use by elementary schools and secondary school 
                students, teachers, and administrators;
            ``(6) disseminate information on models of value-added 
        assessments;
            ``(7) award a grant or contract to a public or private 
        nonprofit entity or consortium of such entities for the 
        development and dissemination of exemplary programs and 
        curricula for accelerated and advanced learning for all 
        students, including gifted and talented students;
            ``(8) award a grant or contract to public or private 
        nonprofit entities to support and promote programs which 
        include the distribution of inexpensive books to students and 
        literacy activities that motivate children to read; and
            ``(9) provide assistance to States--
                    ``(A) by assisting in the development of English 
                language development standards and high-quality 
                assessments, if requested by a State participating in 
                activities under subtitle A of title III; and
                    ``(B) by developing native language tests for 
                limited English proficient students that a State may 
                administer to such students to assess student 
                achievement in at least reading, science, and 
                mathematics, consistent with section 1111.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $150,000,000 for fiscal year 
2002, and such sums as may be necessary for each of the 4 succeeding 
fiscal years.
    ``(c) Reservation.--From the amounts appropriated under subsection 
(b) the Secretary shall reserve $10,000,000 for the purposes of 
carrying out activities under section 1202(c).
    ``(d) Special Rule for Secretary Awards.--
            ``(1) In general.--Notwithstanding any other provision of 
        this Act, a recipient of funds provided under a direct award 
        made by the Secretary, or a contract or cooperative agreement 
        entered into with the Secretary, shall include the following in 
        any application or plan required under such programs:
                    ``(A) How funds provided under the program will be 
                used and how such use will increase student academic 
                achievement.
                    ``(B) The goals and objectives to be met, including 
                goals for dissemination and use of the information or 
                materials produced.
                    ``(C) How the recipient will track and report 
                annually to the Secretary--
                            ``(i) the successful dissemination of 
                        information or materials produced;
                            ``(ii) where information or materials 
                        produced are being used; and
                            ``(iii) what is the impact of such use and, 
                        if applicable, the extent to which such use 
                        increased student academic achievement.
            ``(2) Requirement.--If no application or plan is required 
        under a program, contract, or cooperative agreement described 
        in paragraph (1), the Secretary shall require the recipient of 
        funds to submit a plan containing the information required 
        under paragraph (1).
            ``(3) Failure to achieve goals and objectives.--
                    ``(A) In general.--The Secretary shall evaluate the 
                information submitted under this subsection to 
                determine whether the recipient has met the goals and 
                objectives described in paragraph (1)(B), assess the 
                magnitude of dissemination, and assess the 
                effectiveness of the activity funded in raising student 
                academic achievement in places where information or 
                materials produced with such funds are used.
                    ``(B) Ineligibility.--The Secretary shall consider 
                the recipient ineligible for future grants under the 
program, contract, or cooperative agreement described in paragraph (1) 
if--
                            ``(i) the goals and objectives described in 
                        paragraph (1)(B) have not been met;
                            ``(ii) dissemination has not been of a 
                        magnitude to ensure national goals are being 
                        addressed; and
                            ``(iii) the information or materials 
                        produced have not made a significant impact on 
                        raising student achievement in places where 
                        such information or materials are used.

               ``PART B--AMERICA'S EDUCATION GOALS PANEL

``SEC. 7101. AMERICA'S EDUCATION GOALS PANEL.

    ``(a) Purpose.--It is the purpose of this section to establish a 
bipartisan mechanism for--
            ``(1) building a national consensus for education 
        improvement; and
            ``(2) reporting on progress toward achieving the National 
        Education Goals.
    ``(b) America's Education Goals Panel.--
            ``(1) Establishment.--There is established in the executive 
        branch an America's Education Goals Panel (hereafter in this 
        section referred to as the `Goals Panel') to advise the 
        President, the Secretary, and Congress.
            ``(2) Composition.--The Goals Panel shall be composed of 18 
        members (hereafter in this section referred to as `members'), 
        including--
                    ``(A) 2 members appointed by the President;
                    ``(B) 8 members who are Governors, 3 of whom shall 
                be from the same political party as the President and 5 
                of whom shall be from the opposite political party of 
                the President, appointed by the Chairperson and Vice 
                Chairperson of the National Governors' Association, 
                with the Chairperson and Vice Chairperson each 
                appointing representatives of such Chairperson's or 
                Vice Chairperson's respective political party, in 
                consultation with each other;
                    ``(C) 4 Members of Congress, of whom--
                            ``(i) 1 Member shall be appointed by the 
                        Majority Leader of the Senate from among the 
                        Members of the Senate;
                            ``(ii) 1 Member shall be appointed by the 
                        Minority Leader of the Senate from among the 
                        Members of the Senate;
                            ``(iii) 1 Member shall be appointed by the 
                        Majority Leader of the House of Representatives 
                        from among the Members of the House of 
                        Representatives; and
                            ``(iv) 1 Member shall be appointed by the 
                        Minority Leader of the House of Representatives 
                        from among the Members of the House of 
                        Representatives; and
                    ``(D) 4 members of State legislatures appointed by 
                the President of the National Conference of State 
                Legislatures, of whom 2 shall be of the same political 
                party as the President of the United States.
            ``(3) Special appointment rules.--
                    ``(A) In general.--The members appointed pursuant 
                to paragraph (2)(B) shall be appointed as follows:
                            ``(i) Same party.--If the Chairperson of 
                        the National Governors' Association is from the 
                        same political party as the President, the 
                        Chairperson shall appoint 3 individuals and the 
                        Vice Chairperson of such association shall 
                        appoint 5 individuals.
                            ``(ii) Opposite party.--If the Chairperson 
                        of the National Governors' Association is from 
                        the opposite political party as the President, 
                        the Chairperson shall appoint 5 individuals and 
                        the Vice Chairperson of such association shall 
                        appoint 3 individuals.
                    ``(B) Special rule.--If the National Governors' 
                Association has appointed a panel that meets the 
                requirements of paragraph (2) and subparagraph (A), 
                except for the requirements of subparagraph (D) of 
                paragraph (2), prior to the date of enactment of the 
                Public Education Reinvestment, Reinvention, and 
                Responsibillity Act (Three R's), then the members 
                serving on such panel shall be deemed to be in 
                compliance with the provisions of such paragraph and 
                subparagraph and shall not be required to be 
                reappointed pursuant to such paragraph and 
                subparagraph.
                    ``(C) Representation.--To the extent feasible, the 
                membership of the Goals Panel shall be geographically 
                representative and reflect the racial, ethnic, and 
                gender diversity of the United States.
            ``(4) Terms.--The terms of service of members shall be as 
        follows:
                    ``(A) Presidential appointees.--Members appointed 
                under paragraph (2)(A) shall serve at the pleasure of 
                the President.
                    ``(B) Governors.--Members appointed under paragraph 
                (2)(B) shall serve for 2-year terms, except that the 
                initial appointments under such paragraph shall be made 
                to ensure staggered terms with \1/2\ of such members' 
                terms concluding every 2 years.
                    ``(C) Congressional appointees and state 
                legislators.--Members appointed under subparagraphs (C) 
                and (D) of paragraph (2) shall serve for 2-year terms.
            ``(5) Date of appointment.--The initial members shall be 
        appointed not later than 60 days after the date of enactment of 
        the Elementary and Secondary Education Amendments of 1999.
            ``(6) Initiation.--The Goals Panel may begin to carry out 
        the Goals Panel's duties under this section when 10 members of 
        the Goals Panel have been appointed.
            ``(7) Vacancies.--A vacancy on the Goals Panel shall not 
        affect the powers of the Goals Panel, but shall be filled in 
the same manner as the original appointment.
            ``(8) Travel.--Each member may be allowed travel expenses, 
        including per diem in lieu of subsistence, as authorized by 
        section 5703 of title 5, United States Code, for each day the 
        member is engaged in the performance of duties for the Goals 
        Panel away from the home or regular place of business of the 
        member.
            ``(9) Chairperson.--
                    ``(A) In general.--The members shall select a 
                Chairperson from among the members.
                    ``(B) Term and political affiliation.--The 
                Chairperson of the Goals Panel shall serve a 1-year 
                term and shall alternate between political parties.
            ``(10) Conflict of interest.--A member of the Goals Panel 
        who is an elected official of a State which has developed 
        content or student performance standards may not participate in 
        Goals Panel consideration of such standards.
            ``(11) Ex officio member.--If the President has not 
        appointed the Secretary as 1 of the 2 members the President 
        appoints pursuant to paragraph (2)(A), then the Secretary shall 
        serve as a nonvoting ex officio member of the Goals Panel.
    ``(c) Duties.--
            ``(1) In general.--The Goals Panel shall--
                    ``(A) report to the President, the Secretary, and 
                Congress regarding the progress the Nation and the 
                States are making toward achieving America's Education 
                Goals, including issuing an annual report;
                    ``(B) report on, and widely disseminate through 
                multiple strategies, promising or effective actions 
                being taken at the Federal, State, and local levels, 
                and in the public and private sectors, to achieve 
                America's Education Goals;
                    ``(C) report on, and widely disseminate on 
                promising or effective practices pertaining to, the 
                achievement of each of the 8 America's Education Goals; 
                and
                    ``(D) help build a bipartisan consensus for the 
                reforms necessary to achieve America's Education Goals.
            ``(2) Report.--
                    ``(A) In general.--The Goals Panel shall annually 
                prepare and submit to the President, the Secretary, the 
                appropriate committees of Congress, and the Governor of 
                each State a report that shall--
                            ``(i) assess the progress of the United 
                        States toward achieving America's Education 
                        Goals; and
                            ``(ii) identify actions that should be 
                        taken by Federal, State, and local governments.
                    ``(B) Form; data.--Reports shall be presented in a 
                form, and include data, that is understandable to 
                parents and the general public.''.

               TITLE VIII--GENERAL PROVISIONS AND REPEALS

SEC. 801. REPEALS, TRANSFERS, AND REDESIGNATIONS REGARDING TITLES VIII 
              AND XIV.

    (a) In General.--The Act (20 U.S.C. 6301 et seq.) is amended--
            (1) by inserting after title VII the following:

                  ``TITLE VIII--GENERAL PROVISIONS'';

            (2) by repealing sections 14514 and 14603 (20 U.S.C. 8904, 
        8923);
            (3)(A) by transferring title XIV (20 U.S.C. 8801 et seq.) 
        to title VIII and inserting such title after the title heading 
        for title VIII; and
            (B) by striking the title heading for title XIV;
            (4)(A) by redesignating part H of title VIII (as 
        redesignated by paragraph (3)) as part I of title VIII; and
            (B) by redesignating the references to part H of title VIII 
        as references to part I of title VIII;
            (5) by inserting after part G of title VIII the following:

                   ``PART H--SUPPLEMENT, NOT SUPPLANT

``SEC. 8801. SUPPLEMENT, NOT SUPPLANT.

    ``A State educational agency or local educational agency shall use 
funds received under the Act to supplement, and not supplant, State and 
local funds that, in the absence of funds under this Act, would 
otherwise be spent for activities under this Act.'';
            (6) by redesignating the references to title XIV as 
        references to title VIII;
            (7)(A) by redesignating sections 14101 through 14103 (20 
        U.S.C. 8801, 8803) (as transferred by paragraph (3)) as 
        sections 8101 through 8103, respectively; and
            (B) by redesignating the references to such sections 14101 
        through 14103 as references to sections 8101 through 8103, 
        respectively;
            (8)(A) by redesignating sections 14201 through 14206 (20 
        U.S.C. 8821, 8826) (as transferred by paragraph (3)) as 
        sections 8201 through 8206, respectively; and
            (B) by redesignating the references to such sections 14201 
        through 14206 as references to sections 8201 through 8206, 
        respectively;
            (9)(A) by redesignating sections 14301 through 14307 (20 
        U.S.C. 8851, 8857) (as transferred by paragraph (3)) as 
        sections 8301 through 8307, respectively; and
            (B) by redesignating the references to such sections 14301 
        through 14307 as references to sections 8301 through 8307, 
        respectively;
            (10)(A) by redesignating section 14401 (20 U.S.C. 8881) (as 
        transferred by paragraph (3)) as section 8401; and
            (B) by redesignating the references to such section 14401 
        as references to section 8401;
            (11)(A) by redesignating sections 14501 through 14513 (20 
        U.S.C. 8891, 8903) (as transferred by paragraph (3)) as 
        sections 8501 through 8513, respectively; and
            (B) by redesignating the references to such sections 14501 
        through 14513 as references to sections 8501 through 8513, 
        respectively;
            (12)(A) by redesignating sections 14601 and 14602 (20 
        U.S.C. 8921, 8922) (as transferred by paragraph (3)) as 
        sections 8601 and 8602, respectively; and
            (B) by redesignating the references to such sections 14601 
        and 14602 as references to sections 8601 and 8602, 
        respectively;
            (13)(A) by redesignating section 14701 (20 U.S.C. 8941) (as 
        transferred by paragraph (3)) as section 8701; and
            (B) by redesignating the references to such section 14701 
        as references to section 8701; and
            (14)(A) by redesignating sections 14801 and 14802 (20 
        U.S.C. 8961, 8962) (as transferred by paragraph (3)) as 
        sections 8901 and 8902, respectively; and
            (B) by redesignating the references to such sections 14801 
        and 14802 as references to sections 8901 and 8902, 
        respectively.
    (b) Amendments.--Title VIII (as so transferred and redesignated) is 
amended--
            (1) in section 8101(10) (as redesignated by subsection 
        (7)(A))--
                    (A) by striking subparagraphs (C) through (F); and
                    (B) by adding after subparagraph (B) the following:
                    ``(C) part A of title II;
                    ``(D) part A of title III; and
                    ``(E) title IV.'';
            (2) in section 8102 (as redesignated by subsection (a)(7)), 
        by striking ``VIII'' and inserting ``V'';
            (3) in section 8201 (as redesignated by subsection 
        (a)(8))--
                    (A) in subsection (a)(2), by striking ``, and 
                administrative funds under section 308(c) of the Goals 
                2000: Educate America Act''; and
                    (B) by striking subsection (f);
            (4) in section 8203(b) (as redesignated by subsection 
        (a)(8)), by striking ``Improving America's Schools Act of 
        1994'' and inserting ``Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's)'';
            (5) in section 8204 (as redesignated by subsection 
        (a)(8))--
                    (A) by striking subsection (b); and
                    (B) in subsection (a)--
                            (i) in paragraph (2)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``1995'' 
                                and inserting ``2002'';
                                    (II) in subparagraph (B), by 
                                inserting ``professional development,'' 
                                after ``curriculum development,''; and
                            (ii) in paragraph (4)--
                                    (I) by striking ``and section 
                                410(b) of the Improving America's 
                                Schools Act of 1994''; and
                                    (II) by striking ``paragraph (2)'' 
                                and inserting ``subsection (a)(2)'';
                                    (III) by striking the following:
            ``(4) Results.--'' and inserting the following:
    ``(b) Results.--'';
                                    (IV) by striking the following:
                    ``(A) develop'' and inserting the following:
            ``(1) develop''; and
                                    (V) by striking the following:
                    ``(B) within'' and inserting the following:
            ``(2) within'';
            (6) in section 8205(a)(1) (as redesignated by subsection 
        (a)(8)), by striking ``part A of title IX'' and inserting 
        ``part B of title III'';
            (7) in section 8206 (as redesignated by subsection 
        (a)(8))--
                    (A) by striking ``(a) Unneeded Program Funds.--''; 
                and
                    (B) by striking subsection (b);
            (8) in section 8302(a)(2) (as redesignated by subsection 
        (a)(9))--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively;
            (9) in section 8304(b) (as redesignated by subsection 
        (a)(9)), by striking ``Improving America's Schools Act of 
        1994'' and inserting ``Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's)'';
            (10) in section 8401 (as redesignated by subsection 
        (a)(10))--
                    (A) in subsection (a), by striking ``Except as 
                provided in subsection (c),'' and inserting 
                ``Notwithstanding any other provision regarding waivers 
                in this Act and except as provided in subsection 
                (c),''; and
                    (B) in subsection (c)(8), by striking ``part C of 
                title X'' and inserting ``part B of title IV'';
            (11) in section 8502 (as redesignated by subsection 
        (a)(11)), by striking ``VIII'' and inserting ``V'';
            (12) in section 8503(b)(1) (as redesignated by subsection 
        (a)(11))--
                    (A) by striking subparagraphs (B) through (E);
                    (B) by adding :
                    ``(B) professional development activities in title 
                II;
                    ``(C) title III;
                    ``(D) title VI.''; and
            (13) in section 8506(d) (as redesignated by subsection 
        (a)(11)), by striking ``Improving America's Schools Act of 
        1994'' and inserting ``Public Education Reinvestment, 
        Reinvention, and Responsibility Act (Three R's)'';
            (14) in section 8513 (as redesignated by subsection 
        (a)(11)), by striking ``Improving America's Schools Act of 
        1994'' each place it appears and inserting ``Public Education 
        Reinvestment, Reinvention, and Responsibility Act (Three 
        R's)'';
            (15) in section 8601 (as redesignated by subsection 
        (a)(12))--
                    (A) in subsection (b)(3)--
                            (i) in subparagraph (A), by striking 
                        ``Improving America's Schools Act of 1994'' and 
                        inserting ``Public Education Reinvestment, 
                        Reinvention, and Responsibility Act (Three 
                        R's)''; and
                            (ii) in subparagraph (B), by striking 
                        ``Improving America's Schools Act'' and 
                        inserting ``Public Education Reinvestment, 
                        Reinvention, and Responsibility Act (Three 
                        R's)''; and
                    (B) in subsection (f), by striking ``Improving 
                America's Schools Act of 1994'' and inserting ``Public 
                Education Reinvestment, Reinvention, and Responsibility 
                Act (Three R's)''; and
            (16) in section 8701(b) (as redesignated by subsection 
        (a)(13))--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B)--
                                    (I) in clause (i), by striking 
                                ``Improving America's Schools Act of 
                                1994'' and inserting ``Public Education 
                                Reinvestment, Reinvention, and 
                                Responsibility Act (Three R's)''; and
                                    (II) in clause (ii), by striking 
                                ``such as the initiatives under the 
                                Goals 2000: Educate America Act, and'' 
                                and inserting ``under''; and
                            (ii) in subparagraph (C)(ii), by striking 
                        ``the School-to-Work Opportunities Act of 1994, 
                        and the Goals 2000: Educate America Act'' and 
                        inserting ``and the School-to-Work 
                        Opportunities Act of 1994''; and
                    (B) in paragraph (3), by striking ``1998'' and 
                inserting ``2004''.

SEC. 802. OTHER REPEALS.

    Titles V, X, XI, XII, and XIII (20 U.S.C. 7201 et seq., 8001 et 
seq., 8401 et seq., 8501 et seq., 8601 et seq.) and the Goals 2000: 
Educate America Act (20 U.S.C. 5801 et seq.) are repealed.
                                 <all>