[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4335 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 4335

                 To promote youth financial education.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 6, 2007

   Mr. Payne (for himself, Mr. Hinojosa, Mr. Bishop of Georgia, Ms. 
      Corrine Brown of Florida, Mr. Butterfield, Ms. Carson, Mrs. 
  Christensen, Mr. Cleaver, Mr. Clyburn, Mr. Cohen, Mr. Conyers, Mr. 
Crowley, Mr. Cummings, Mr. Davis of Alabama, Mr. Davis of Illinois, Mr. 
  Delahunt, Mr. Ellison, Mr. Fattah, Mr. Grijalva, Mr. Gutierrez, Mr. 
 Hastings of Florida, Ms. Norton, Mr. Honda, Mr. Jackson of Illinois, 
 Ms. Jackson-Lee of Texas, Mr. Jefferson, Ms. Eddie Bernice Johnson of 
 Texas, Mr. Johnson of Georgia, Ms. Kilpatrick, Mr. Clay, Ms. Lee, Mr. 
Lewis of Georgia, Mrs. McCarthy of New York, Mr. McGovern, Mr. Meek of 
 Florida, Mr. Meeks of New York, Ms. Moore of Wisconsin, Mr. Moran of 
  Virginia, Mr. Ortiz, Mr. Pastor, Mr. Rangel, Ms. Roybal-Allard, Mr. 
   Rush, Ms. Linda T. Sanchez of California, Ms. Loretta Sanchez of 
 California, Mr. Scott of Georgia, Mr. Scott of Virginia, Mr. Serrano, 
 Mr. Sires, Mr. Tanner, Mr. Thompson of Mississippi, Mr. Tierney, Mr. 
 Towns, Mrs. Jones of Ohio, Ms. Velazquez, Ms. Waters, Ms. Watson, Mr. 
 Watt, Ms. Woolsey, Mr. Wynn, Ms. Solis, Ms. Clarke, Mr. Higgins, and 
Mr. Kucinich) introduced the following bill; which was referred to the 
                    Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
                 To promote youth financial education.

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

SECTION 1. PROMOTING YOUTH FINANCIAL LITERACY.

    Title IV of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7101 et seq.) is amended by adding at the end the following:

              ``PART D--PROMOTING YOUTH FINANCIAL LITERACY

``SEC. 4401. SHORT TITLE AND FINDINGS.

    ``(a) Short Title.--This part may be cited as the `Youth Financial 
Education Act'.
    ``(b) Findings.--Congress finds the following:
            ``(1) In order to succeed in our dynamic American economy, 
        young people must obtain the skills, knowledge, and experience 
        necessary to manage their personal finances and obtain general 
        financial literacy. All young adults should have the 
        educational tools necessary to make informed financial 
        decisions.
            ``(2) Despite the critical importance of financial literacy 
        to young people, the average student who graduates from high 
        school lacks basic skills in the management of personal 
        financial affairs. A nationwide survey conducted in 2006 by the 
        Jump$tart Coalition for Personal Financial Literacy examined 
        the financial knowledge of 5,775 12th graders. On average, 
        survey respondents answered only 52 percent of the questions 
        correctly. This figure is up only slightly from the 50 percent 
        average score in 2002.
            ``(3) An evaluation by the National Endowment for Financial 
        Education High School Financial Planning Program undertaken 
        jointly with the United States Department of Agriculture 
        Cooperative State Research, Education, and Extension Service 
        demonstrates that as little as 10 hours of classroom 
        instruction can impart substantial knowledge and affect 
        significant change in how teens handle their money.
            ``(4) State educational leaders have recognized the 
        importance of providing a basic financial education to students 
        in kindergarten through grade 12 by integrating financial 
        education into State educational standards, but by 2004, only 7 
        States required students to complete a course that covered 
        personal finance before graduating from high school.
            ``(5) Teacher training and professional development are 
        critical to achieving youth financial literacy. Teachers should 
        be given the tools they need to educate our Nation's youth on 
        personal finance and economics.
            ``(6) Personal financial education helps prepare students 
        for the workforce and for financial independence by developing 
        their sense of individual responsibility, improving their life 
        skills, and providing them with a thorough understanding of 
        consumer economics that will benefit them for their entire 
        lives.
            ``(7) Financial education integrates instruction in 
        valuable life skills with instruction in economics, including 
        income and taxes, money management, investment and spending, 
        and the importance of personal savings.
            ``(8) The consumers and investors of tomorrow are in our 
        schools today. The teaching of personal finance should be 
        encouraged at all levels of our Nation's educational system, 
        from kindergarten through grade 12.
            ``(9) Despite worrisome data about the lack of basic 
        financial literacy among our Nation's high school students, the 
        Department of Education obligates less than 1 percent of its 
        educational improvement funds toward financial education 
        efforts.

``SEC. 4402. STATE GRANT PROGRAM.

    ``(a) Program Authorized.--The Secretary is authorized to provide 
grants to State educational agencies to develop and integrate youth 
financial education programs for students in elementary schools and 
secondary schools.
    ``(b) State Plan.--To be eligible to receive a grant under this 
section, a State educational agency shall submit an application that 
includes a State plan that is approved by the Secretary.
    ``(c) Allocation of Funds.--
            ``(1) Allocation factors.--Except as otherwise provided in 
        paragraphs (2) through (4), the Secretary shall allocate the 
        amounts made available to carry out this section pursuant to 
        subsection (a) as follows:
                    ``(A) The first $100,000,000 for a fiscal year 
                shall be allocated on a competitive basis based solely 
                upon the merit of the applications submitted.
                    ``(A) Any remaining amounts shall be allocated to 
                each State according to the relative populations in all 
                the States of students in kindergarten through grade 
                12, as determined by the Secretary based on the most 
                recent satisfactory data.
            ``(2) Minimum allocation.--Subject to the availability of 
        appropriations and notwithstanding paragraph (1), a State that 
        has submitted a plan under subsection (b) that is approved by 
        the Secretary shall be allocated an amount that is not less 
        than $500,000 for a fiscal year.
            ``(3) Reallocation.--In any fiscal year an allocation under 
        this subsection--
                    ``(A) for a State that has not submitted a plan 
                under subsection (b); or
                    ``(B) for a State whose plan submitted under 
                subsection (b) has been disapproved by the Secretary;
        shall be reallocated to States with approved plans under this 
        section in accordance with paragraph (1).
            ``(4) Funding threshold.--Until appropriations for programs 
        under this Act exceed $30,000,000, the Secretary shall conduct 
        an annual competitive application process with funding 
        distributed among the States based solely upon the merit of the 
        applications submitted.
    ``(d) Use of Grant Funds.--
            ``(1) Required uses.--A grant made to a State educational 
        agency under this part shall be used--
                    ``(A) to provide funds to local educational 
                agencies and public schools to carry out financial 
                education programs for students in kindergarten through 
                grade 12 based on the concept of achieving financial 
                literacy through the teaching of personal financial 
                management skills and the basic principles involved 
                with earning, spending, saving, investing, credit, and 
                insurance;
                    ``(B) to carry out professional development 
                programs to prepare teachers and administrators for 
                financial education; and
                    ``(C) to monitor and evaluate programs supported 
                under subparagraphs (A) and (B).
            ``(2) Limitation on administrative costs.--A State 
        educational agency receiving a grant under subsection (a) may 
        use not more than 4 percent of the total amount of the grant in 
        each fiscal year for the administrative costs of carrying out 
        this section.
    ``(e) Applications by States.--In order to receive an allotment 
under this section for any fiscal year, a State shall submit to the 
Secretary, at such time as the Secretary may require, an application 
that--
            ``(1) designates the State educational agency as the agency 
        responsible for the administration and supervision of programs 
        assisted under this part;
            ``(2) describes how the State educational agency will use 
        funds received under this part, including funds reserved for 
        State-level activities;
            ``(3) describes how the programs assisted under this part 
        will be coordinated with other relevant Federal, State, 
        regional, and local programs;
            ``(4) contains an assurance that the State educational 
        agency will make awards under this part only to eligible 
        entities that propose to give priority to serving--
                    ``(A) low-income populations; and
                    ``(B) populations that are above the poverty level 
                but are low income working populations;
            ``(5) describes the procedures and criteria the State 
        educational agency will use for reviewing applications and 
        awarding funds to eligible entities on a competitive basis;
            ``(6) describes how the State educational agency will 
        ensure that awards made under this part are of sufficient size 
        and scope to support high-quality, effective programs that are 
        consistent with the purpose of this part;
            ``(7) describes the steps the State educational agency will 
        take to ensure that programs implement effective strategies, 
        including providing ongoing technical assistance and training, 
        evaluation, and dissemination of promising practices;
            ``(8) provides an assurance that the application was 
        developed in consultation and coordination with appropriate 
        State officials, including the chief State school officer, 
        representatives of teachers, the business community, and 
        community-based organizations; and
            ``(9) describes how the State educational agency will 
        evaluate the effectiveness of programs and activities carried 
        out under this part, which shall include, at a minimum--
                    ``(A) a description of the performance indicators 
                and performance measures that will be used to evaluate 
                programs and activities; and
                    ``(B) public dissemination of the evaluations of 
                programs and activities carried out under this part.
    ``(f) Local Competitive Grant Program.--
            ``(1) In general.--A State that receives funds under this 
        part for a fiscal year shall provide the amount made available 
        under this section to eligible entities in accordance with this 
        part.
            ``(2) Application.--
                    ``(A) In general.--To be eligible to receive an 
                award under this part, an eligible entity shall submit 
                an application to the State educational agency at such 
                time, in such manner, and including such information as 
                the State educational agency may reasonably require.
                    ``(B) Contents.--Each application submitted under 
                subparagraph (A) shall include--
                            ``(i) a description of how the eligible 
                        entity will use funds received under this part;
                            ``(ii) an identification of Federal, State, 
                        and local programs that will be combined or 
                        coordinated with the proposed program to make 
                        the most effective use of public resources;
                            ``(iii) a description of the partnership 
                        between a local educational agency, a 
                        community-based organization, and another 
                        public entity or private entity, if 
                        appropriate;
                            ``(iv) an evaluation of the community needs 
                        and available resources and a description of 
                        how the program proposed to be carried out in 
                        the center will address those needs;
                            ``(v) a demonstration that the eligible 
                        entity has experience, or promise of success, 
                        in providing educational and related activities 
                        that will complement and enhance positive youth 
                        development of the students; and
                            ``(vi) if the eligible entity plans to use 
                        volunteers, a description of how the eligible 
                        entity will encourage and use individuals with 
                        appropriate financial literacy qualifications 
                        to serve as the volunteers; and
                            ``(vii) such other information and 
                        assurances as the State educational agency may 
                        reasonably require.
            ``(3) Amount of awards.--A grant awarded under this part 
        may not be made in an amount that is less than $50,000.
            ``(4) Priority.--In awarding grants under this part, a 
        State educational agency shall give priority to applications 
        proposing to give priority to serving--
                    ``(A) low-income populations; and
                    ``(B) populations that are above the poverty level 
                but are low income working populations.
    ``(g) Report to the Secretary.--Each State educational agency 
receiving a grant under this section shall transmit a report to the 
Secretary with respect to each fiscal year for which a grant is 
received. The report shall describe the programs supported by the grant 
and the results of the State educational agency's monitoring and 
evaluation of such programs.

``SEC. 4403. CLEARINGHOUSE.

    ``(a) Authority.--Subject to the availability of appropriations, 
the Secretary shall make a grant to, or execute a contract with, an 
eligible entity with substantial experience in the field of financial 
education to establish, operate, and maintain a national clearinghouse 
(in this part referred to as the `Clearinghouse') for instructional 
materials and information regarding model financial education programs 
and best practices.
    ``(b) Eligible Entity.--In this section, the term `eligible entity' 
means--
            ``(1) an institution of higher education; or
            ``(2) a national nonprofit organization.
    ``(c) Application.--An eligible entity desiring to establish, 
operate, and maintain the Clearinghouse shall submit an application to 
the Secretary at such time, in such manner, and accompanied by such 
information, as the Secretary may reasonably require.
    ``(d) Basis and Term.--The Secretary shall make the grant or 
contract authorized under subsection (a) on a competitive, merit basis 
for a term of 5 years.
    ``(e) Use of Funds.--The Clearinghouse shall use the funds provided 
under a grant or contract made under subsection (a)--
            ``(1) to maintain a repository of instructional materials 
        and related information regarding financial education programs 
        for elementary schools and secondary schools, including 
        kindergartens, for use by States, localities, and the general 
        public, that take into account limited-English populations and 
        cultural differences and sensitivities among various 
        populations;
            ``(2) to disseminate to States, localities, and the general 
        public, through electronic and other means, instructional 
        materials and related information regarding financial education 
        programs for elementary schools and secondary schools, 
        including kindergartens; and
            ``(3) to the extent that resources allow, to provide 
        technical assistance to States, localities, and the general 
        public on the design, establishment, and implementation of 
        financial education programs for elementary schools and 
        secondary schools, including kindergartens.
    ``(f) Consultation.--The administrator of the eligible entity 
selected to establish and operate the Clearinghouse shall consult with 
community-based organizations, educational institutions, and financial 
organizations, and with appropriate elements of the Federal Government, 
if appropriate.
    ``(g) Submission to Clearinghouse.--Each Federal agency or 
department that develops financial education programs and instructional 
materials for such programs shall submit to the Clearinghouse 
information on the programs and copies of the materials.
    ``(h) Application of Copyright Laws.--In carrying out this section 
the Clearinghouse shall comply with the provisions of title 17 of the 
United States Code.

``SEC. 4404. EVALUATION AND REPORT.

    ``(a) Performance Measures.--The Secretary shall develop measures 
to evaluate the performance of programs assisted under sections 4402 
and 4403.
    ``(b) Evaluation According to Performance Measures.--Applying the 
performance measures developed under subsection (a), the Secretary 
shall evaluate programs assisted under sections 4402 and 4403--
            ``(1) to judge their performance and effectiveness;
            ``(2) to identify which of the programs represent the best 
        practices of entities developing financial education programs 
        for students in kindergarten through grade 12;
            ``(3) to identify which of the programs may be replicated 
        and used to provide technical assistance to States, localities, 
        and the general public; and
            ``(4) to assess whether educational practices described 
        herein increased the aptitude and ability of students to manage 
        financial resources including credit cards, insurance, savings 
        accounts and student loans.
    ``(c) Report.--For each fiscal year for which there are 
appropriations under section 4407(a), the Secretary shall transmit a 
report to Congress describing the status of the implementation of this 
part. The report shall include the results of the evaluation required 
under subsection (b) and a description of the programs supported under 
section 4402.

``SEC. 4405. DEFINITIONS.

    ``In this part:
            ``(1) Financial education.--The term `financial education' 
        means educational activities and experiences, planned and 
        supervised by qualified teachers, that enable students to 
        understand basic economic and consumer principles, acquire the 
        skills and knowledge necessary to manage personal and household 
        finances, and develop a range of competencies that will enable 
        the students to become responsible consumers in today's complex 
        economy.
            ``(2) Qualified teacher.--The term `qualified teacher' 
        means a teacher who holds a valid teaching certification or is 
        considered to be qualified by the State educational agency in 
        the State in which the teacher works.
            ``(3) State.--The term `State' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, and any other 
        territories or possessions of the United States.

``SEC. 4406. PROHIBITION.

    ``Nothing in this part 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, curriculum, or program of instruction, as a condition of 
eligibility to receive funds under this part.

``SEC. 4407. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Authorization.--For the purposes of carrying out this part, 
there are authorized to be appropriated, for each of fiscal years 2008 
through 2012, the following:
            ``(1) Grant program.--$100,000,000 to carry out section 
        4402.
            ``(2) Clearinghouse.--$1,500,000 to carry out section 4403.
    ``(b) Limitation on Funds for Secretary Evaluation.--The Secretary 
may use not more than $200,000 from the amounts appropriated under 
subsection (a) for each fiscal year to carry out subsections (a) and 
(b) of section 4404.
    ``(c) Limitation on Administrative Costs.--Except as necessary to 
carry out subsections (a) and (b) of section 4404 using amounts 
described in subsection (b) of this section, the Secretary shall not 
use any portion of the amounts appropriated under subsection (a) for 
the costs of administering this part.''.

SEC. 2. FUNDING SETASIDE FOR FINANCIAL LITERACY ACTIVITIES.

    Part D of title V of the Elementary and Secondary Education Act of 
1965 is amended by inserting after section 5401 (20 U.S.C. 7241) the 
following:

``SEC. 5402. FUNDING SETASIDE FOR FINANCIAL LITERACY ACTIVITIES.

    ``Notwithstanding any other provision of this title, the Secretary 
shall set aside two percent of the funds appropriated to carry out this 
part for each fiscal year. The funds set aside shall be used to support 
financial literacy activities under subpart 13.''.
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