[Congressional Record Volume 147, Number 8 (Tuesday, January 23, 2001)]
[Senate]
[Pages S479-S497]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  HEALTH INSURANCE FOR SMALL BUSINESS

  Mr. KERRY. Mr. President, I am proud to be an original cosponsor of 
the Self-Employed Health Insurance Fairness Act. As the Ranking 
Democratic Member on the Senate Committee on Small Business, I know how 
important access to health insurance is for small businesses. Today, 
approximately 42.5 million Americans lack health insurance. 
Unfortunately, employees of small businesses are much more likely to be 
uninsured than employees of large firms.

[[Page S480]]

  Current law allows qualified small businesses to deduct 60 percent of 
their health insurance payments. The cost of health insurance and the 
lack of a full deduction has kept many small businesses from obtaining 
health insurance for their employees. In 1998, an estimated 12.5 
million workers were self-employed but only about 3.2 million tax 
returns claimed the self-employed health insurance deduction. In 1998, 
34 percent of workers in firms with fewer than 10 employees lacked 
health insurance compared with only 13 percent of workers in firms with 
more than 1,000 employees. Clearly, the cost of health insurance has 
kept many small businesses from offering health insurance. Many small 
businesses simply cannot afford to pick up the difference between the 
deduction and the total cost of health insurance.
  Unfortunately, due to an inequity within our current tax law, big 
businesses are currently allowed to deduct 100 percent of their health 
insurance costs. While small businesses are slated to have their health 
insurance deduction increase to 100 percent in 2003, I believe this is 
far too long for many small businesses to wait to obtain health 
insurance.
  That is why I am proud to cosponsor the legislation introduced 
yesterday by Senators Bond and Durbin, which will finally end the 
inequity in current tax law and allow small businesses to deduct the 
same amount of their health insurance costs as big businesses. For many 
small businesses, this increase in the deduction will make it possible 
for them to obtain health insurance for the first time.
  No one in the United States should be without adequate health care 
because he or she cannot afford it. Access to affordable health 
insurance is crucial to increase the quality of life for working 
families across this nation. That is why we must enact this legislation 
during the 107th Congress.
                                 ______
                                 
      By Mr. GRASSLEY (for himself and Mr. Baucus):
  S. 152. A bill to amend the Internal Revenue Code of 1986 to 
eliminate the 60-month limit and increase the income limitation on the 
student loan interest deduction; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, today I am introducing legislation to 
expand the tax deduction for student loan interest. I am proud to have 
as my original cosponsor Senator Max Baucus of Montana.
  Under the Tax Reform Act of 1986, the tax deduction for student loan 
interest was eliminated. This action, done in the name of fiscal 
responsibility, disregarded the duty we have to the education of our 
nation's students. This struck me and many of my colleagues as wrong. 
Since 1987, I have spearheaded the bipartisan effort to reinstate the 
tax deduction for student loan interest. In 1992, we succeeded in 
passing the legislation only to have it vetoed as part of a larger bill 
with tax increases. Finally, after ten long years our determination and 
perseverance paid off. Under the Taxpayer Relief Act of 1997 we 
reinstated the deduction. In our success, we sent a message to the 
students and their families of this nation that the Congress of the 
United States understands the financial hardships they face, and that 
we are willing to assist them in easing those hardships so they can 
continue to receive the education they need to become productive 
members of society and of their place of work.
  In 1997, our steps were in the right direction. We did what needed to 
be done. Regrettably, due to fiscal constraints, we were not able to go 
as far as we wanted. The nation was still struggling to eliminate the 
deficit. In order to control costs, we were forced to limit the 
deductibility of student loan interest to only sixty payments, which is 
five years' worth plus the time spent in forbearance or deferment.
  This restriction hurts some of the most needy borrowers. Many of 
these borrowers are students who, due to limited means, have borrowed 
most heavily. The restriction discriminates against those who have the 
highest debt loads and the lowest incomes. It makes the American dream 
of self-improvement harder to achieve for those struggling to pull 
themselves up--but who started with less. It is simply unjust.
  Today, our situation is vastly different. In these times of economic 
surplus, we have a responsibility to do what we were unable to do 
before. Student debt is rising to alarming levels and additional relief 
is needed. We must eliminate the sixty month restriction on the 
deductibility of student loan interest and adjust the income limits to 
show that the United States Congress stands behind our nation's 
students in their endeavors to better themselves.
  In addition, the removal of the sixty-month limit on deductibility of 
student loan interest will bring most needed relief to some of the most 
deserving borrowers. The restriction weighs most heavily on those who, 
despite lower pay have decided to dedicate themselves to public 
service. Thus this change will have the added benefit of rewarding 
civic virtue of these admirable citizens.
  Additionally, eliminating this restriction will remove difficult and 
costly reporting requirements that are currently required for both the 
borrower and lender. By supporting our nation's students, we will also 
be reducing costly and unnecessary regulatory requirements.
  Currently, to claim the deduction, the taxpayer must have an adjusted 
gross income of $40,000 or less or $60,000 for married couples. The 
amount of the deduction is gradually phased out for those with incomes 
between $40,000 and $55,000, or $60,000 and $75,000 for married 
couples. The deduction was phased in at $1,000 and will cap out at 
$2,500 in 2002. This bill will adjust those limits.
  Many students in our country are suffering from heavy education-
related debt. More can and must be done to help them. In these times of 
relative budget surplus, it is our duty to invest in our students' 
education. Doing so is an investment in America's future. To maintain 
our competitive edge in the global marketplace, America must have a 
well-educated workforce. By making it easier for students to take out 
the loans they need to obtain the highest level of education they can, 
we recommit ourselves to education and maintaining our competitive 
advantage in technology and in world trade.
  I urge members to join me and Senator Baucus in our effort to relieve 
these excessive burdens on those trying to better themselves and their 
futures through education, by expanding the tax deduction for student 
loan interest payments. I now ask that the full text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 152

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

     SECTION 1. ELIMINATION OF 60-MONTH LIMIT AND INCREASE IN 
                   INCOME LIMITATION ON STUDENT LOAN INTEREST 
                   DEDUCTION.

       (a) Elimination of 60-Month Limit.--
       (1) In general.--Section 221 of the Internal Revenue Code 
     of 1986 (relating to interest on education loans) is amended 
     by striking subsection (d) and by redesignating subsections 
     (e), (f), and (g) as subsections (d), (e), and (f), 
     respectively.
       (2) Conforming amendment.--Section 6050S(e) of such Code is 
     amended by striking ``section 221(e)(1)'' and inserting 
     ``section 221(d)(1)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply with respect to any loan interest paid after 
     December 31, 2000, in taxable years ending after such date.
       (b) Increase in Income Limitation.--
       (1) In general.--Section 221(b)(2)(B) of the Internal 
     Revenue Code of 1986 (relating to amount of reduction) is 
     amended by striking clauses (i) and (ii) and inserting the 
     following:
       ``(i) the excess of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $50,000 (twice such dollar amount in the case of a 
     joint return), bears to

       ``(ii) $15,000.''.
       (2) Conforming amendment.--Section 221(g)(1) of such Code 
     is amended by striking ``$40,000 and $60,000 amounts'' and 
     inserting ``$50,000 amount''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending after December 31, 2000.

  Mr. BAUCUS. Mr. President, I am pleased to join my colleague, Senator 
Grassley, in introducing legislation to expand the tax deduction for 
student loan interest.
  Under current law, student loan interest is only deductible for the 
first sixty loan repayments, which is equivalent to five years in 
addition to any deferrals. While this limitation was

[[Page S481]]

originally imposed due to revenue constraints, it has had unanticipated 
consequences.
  Most importantly, the limitation hurts some of our neediest 
borrowers. Students with the most limited means often are forced to 
borrow most heavily in order to afford a higher education. These are 
precisely the students who need the most help to succeed.
  The restriction also makes it more difficult for students who would 
like to pursue a career in public service, where loan repayment is made 
more challenging by salaries that tend to be lower than the private 
sector. We should not punish those who sacrifice in order to serve the 
greater good.
  Finally, the current sixty month limitation imposes costly and time-
consuming reporting requirements on both borrowers and lenders. In 
supporting our nation's students, we will also be cutting costly 
bureaucracy.
  Mr. President, we currently are enjoying unprecedented budget 
surpluses, which allows us the luxury of deciding how best to allocate 
our nation's revenues. I believe there are some priorities we must 
emphasize, and one important one is our children's education.
  Investing in education is investing in our nation's future.
  Our best tool for ensuring long-term economic growth is to make sure 
our workforce is the most educated in the world. Eliminating this 
artificial restriction on student loan interest deductibility keeps us 
one small step closer to our goal.
  I urge my colleagues to support this effort.
                                 ______
                                 
      By Mr. HATCH:
  S. 153. A bill to amend title XVIII of the Social Security Act to 
provide for State accreditation of diabetes self-management training 
programs under the Medicare Program; to the Committee on Finance.
  Mr. HATCH. Mr. President, today, I am introducing legislation that 
will allow all state accredited diabetes education programs to be 
reimbursed by the Medicare program. Currently, diabetes education 
programs that have state certification, as an alternative to being 
certified by the American Diabetes Association (ADA), are not eligible 
to receive Medicare reimbursement for their services. As a result, 
these deserving patients have more limited access to the important 
medical education that they need to control their diabetes effectively 
and to improve the quality of their health.
  This important health issue was brought to my attention by the 
Program Director of the Utah Diabetes Control Program. There are over 
30 diabetes education programs in Utah that are either Utah certified 
or recognized by the American Diabetes Association. The majority of the 
education programs have only state certification; several are located 
in rural communities of Utah.
  It is important to emphasize, that in Utah, our state certification 
program meets or exceeds all national standards. These stringent state 
requirements include the submission of a detailed application, with the 
appropriate documentation that the diabetes education programs meet the 
various national standards.
  The Utah Diabetes Control Program staff also conduct on-site visits 
to all applying programs. After the completion of this extensive 
application process, the state staff collects follow-up data through 
the annual report process in order to assess program quality and 
diabetic patient outcomes.
  One notable concern that has been brought to my attention by the Utah 
Department of Health is that the American Diabetes Association charges 
$850 for state programs to apply for their ADA certification. The 
smaller and rural state diabetes education programs, which provide 
services to their patients, have indicated that the ADA fee is cost-
prohibitive for them. It does not seem right to me that Medicare 
reimbursement for such programs is contingent on the ability of the 
program sponsor to pay a fee to the only accepted certifying entity.
  I understand that this problem is not unique to Utah, but is a 
significant issue across the country. All Medicare beneficiaries, 
regardless of where they live in America, should have access to these 
diabetes education programs that ultimately improve the quality of 
their lives. I urge my colleagues to join me in supporting this 
legislation.
  Mr. President, I ask unanimous consent the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 153

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

     SECTION 1. STATE ACCREDITATION OF DIABETES SELF-MANAGEMENT 
                   TRAINING PROGRAMS.

       Section 1861(qq)(2) of the Social Security Act (42 U.S.C. 
     1395x(qq)(2)) is amended--
       (1) in the matter preceding subparagraph (A) by striking 
     ``paragraph (1)--'' and inserting ``paragraph (1):'';
       (2) in subparagraph (A)--
       (A) by striking ``a `certified provider' '' and inserting 
     ``A `certified provider' ''; and
       (B) by striking ``; and'' at the end and inserting a 
     period; and
       (3) in subparagraph (B)--
       (A) by striking ``a physician, or such other individual'' 
     and inserting ``(i) A physician, or such other individual'';
       (B) by inserting ``(I)'' before ``meets applicable 
     standards'';
       (C) by inserting ``(II)'' before ``is recognized'';
       (D) by inserting ``, or by a program described in clause 
     (ii),'' after ``recognized by an organization that represents 
     individuals (including individuals under this title) with 
     diabetes''; and
       (E) by adding at the end the following new clause:
       ``(ii) Notwithstanding any reference to `a national 
     accreditation body' in section 1865(b), for purposes of 
     clause (i), a program described in this clause is a program 
     operated by a State for the purposes of accrediting diabetes 
     self-management training programs, if the Secretary 
     determines that such State program has established quality 
     standards that meet or exceed the standards established by 
     the Secretary under clause (i) or the standards originally 
     established by the National Diabetes Advisory Board and 
     subsequently revised as described in clause (i).''.
                                 ______
                                 
      By Mr. SHELBY:
  S. 154. A bill to amend the Uniformed and Overseas Citizens Absentee 
Voting Act to ensure uniform treatment by States of Federal overseas 
absentee ballots, to amend titles 10 and 18, United States Code, and 
the Revised Statutes to remove the uncertainty regarding the authority 
of the Department of Defense to permit buildings located on military 
installations and reserve component facilities to be used as polling 
places in Federal, State, and elections for public office, and for 
other purposes; to the Committee on Rules and Administration.
  Mr. SHELBY. Mr. President, I rise today to introduce the Military and 
Overseas Citizens Voting Fairness Act of 2001. This bill ensures that 
the men and women of the military who go into harm's way and bravely 
serve our country will have their vote counted. Given the great 
sacrifice these men and women make to defend our country, it is 
essential that we as lawmakers do all that we can to have their voices 
heard.
  Although military mail is technically supposed to carry a postmark, 
the reality of the situation is that exigent circumstances aboard Navy 
ships and in foreign theaters can result in mail being sent without a 
postmark. Because several states require a postmark for an absentee 
ballot to be counted, the unfortunate outcome is that many military 
persons who went through the timely process of registering, applying 
for and sending in a ballot are disenfranchised through no fault of 
their own.
  My bill provides that lack of a postmark does not result in automatic 
rejection of an overseas ballots in states that require a postmark. 
Specifically, the bill states that as long as there is conclusive proof 
of timely sending and the ballot is received by a state within 10 days 
after a federal election, mere lack of a postmark will not prevent the 
ballot from being counted.
  My bill lists two ways in which conclusive proof of timely sending 
may be established, although any conclusive evidence could establish 
timely sending. If a ballot is received on or before election day, 
logic dictates that the ballot was sent in a timely manner. Also, 
timely sending would be conclusively established by examining the date 
of signature and witness on the outside of the ballot envelope. 
Fraudulently misstating the date would be punishable by civil and 
criminal penalties.
  In addition to creating a uniform absentee voting law, my bill 
includes provisions to allow polling places on domestic military bases. 
These provisions

[[Page S482]]

will make it easier for military personnel located on remote bases to 
be able to participate in the voting process. Voting is one of the most 
important civic duties in a democracy. By allowing voting to take place 
on-base, we as the Senate, will guarantee that the men and women of our 
military will have every opportunity to exercise their important right 
to vote.
  Mr. President, confidence, clarity, and participation in our voting 
process are vital to the continuation of our great democracy. The 
election of this past year illustrates the need for change in our 
voting procedures. While more reform will be needed, my bill is a 
crucial step in that direction. For this and all the above reasons, I 
urge you and all my other colleagues to support the passage of this all 
important bill.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 155. A bill to amend title 5, United States Code, to eliminate an 
inequity in the applicability of early retirement eligibility 
requirements to military reserve technicians; to the Committee on 
Governmental Affairs.
  Mr. BINGAMAN. Mr. President, I rise today to introduce a bill that I 
put forward last year to remove the inequity that continues to exist in 
retirement pay benefits for critical personnel, referred to as ``Dual 
Status Technicians,'' who serve in our National Guard and Reserve. The 
Senate approved my proposed legislation last year by including it in 
the FY 2001 Defense Authorization bill. This year, I urge my colleagues 
in the Senate and House to join with me to see that this important 
initiative is enacted into law.
  There are about 40,000 Dual Status Technicians covered by retirement 
requirements and restrictions contained in Title 32 of the United 
States Code. The designation ``Dual Status'', Mr. President, refers to 
the fact that these technicians serve the government simultaneously 
both as military and civilian employees. These men and women are the 
backbone of our National Guard and Reserve structure. They are the 
mechanics, pilots engineers, equipment operators, supply and support 
technicians who keep things running so that the Guard is able to 
respond to natural disasters and national emergencies, as well as serve 
on active duty in accordance with the ``total force concept'' that 
integrates active and reserve forces in the military. These hardworking 
men and women are often the first called to duty in an emergency. They 
played on essential role, for example, in the major firefighting 
efforts that took place in New Mexican and throughout western states 
last summer.
  As essential as Dual Status Technicians are, they suffer from the 
worst of two employment worlds. These technicians are by statute both 
military and civilian employees. Guard technicians must maintain their 
military job and grade in order to keep their technician status and 
remain a federal employee. In the event of separation from military 
service, however, under existing law they are denied the retirement 
benefit options extended to those who serve in the same grade and time 
in service in the active military. Frequently, Dual Status Technicians 
who are separated from the Guard and Reserve must wait years to qualify 
to receive their Federal Service retirement benefits.
  The bill I am introducing in the Senate today corresponds to a 
companion bill being introduced on the House side by Representative 
Abercrombie. It seeks to eliminate retirement inequities--a problem we 
just addressed head on in the Armed Services Committee when we include 
a provision in the FY 2000 Defense Authorization Bill eliminating 
retirement inequities between active duty personnel who retire before 
or after 1986. We voted by that provision to effectively eliminate the 
``Redux'' retirement benefit program because of the lower benefits it 
offered to personnel who retired after 1986. The action I am proposing 
in this legislation is similar.
  The bill will permit Dual Status Technicians to retire at any age 
with 25 years of service or at age 50 with 20 years of service. Those 
criteria reflect benefit options now extended to Federal police and 
fire employees. They also replicate those offered to federal employees 
who retire from the Congress.
  Last year, I was pleased to see, Mr. President, that the FY 2000 
Defense Authorization Act took a step to extend more equitable 
retirement benefits to Dual Status Technicians. In doing so, however, 
the Congress created an inequity within the Technician community 
itself. A provision in that Act authorized early retirement after 25 
years at any age, or at age 50 with 20 years of service--but only for 
those employed as Dual Status Technicians after 1996. Those same 
benefits are withheld from those employed before 1996. In other words, 
Mr. President, we created a situation similar to the one the Senate 
dealt with regarding the ``Redux'' retirement program in the FY 2001 
Defense Authorization Act. The bill I offer today would remove that 
inequity in the same way the Congress voted to remove the inequity for 
active duty personnel who retired under the ``Redux'' program.
  Mr. President, the cost of achieving retirement equity for Dual 
Status Technicians would not be high. Last year, the Congressional 
Budget Office estimated that this bill could cost about $74 million 
over a five year period. That estimate may be on the high side, I 
believe, since it is based on the assumption that nearly all 
technicians eligible for retirement under those criteria would choose 
to do so. The actual number who would choose to retire would vary, of 
course, depending on individual circumstances. It is important to note, 
Mr. President, that we're not only providing for equity here. We're 
authorizing appropriate compensation, well deserved, to the men and 
women who have devoted their careers to service for the nation both at 
home and abroad--the men and women of our National Guard and Reserve.
  I urge my colleagues to support this bill and urge my fellow members 
to support this effort through cosponsorship. I ask unanimous consent 
that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 155

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

     SECTION 1. EQUITABLE APPLICATION OF EARLY RETIREMENT 
                   ELIGIBILITY REQUIREMENTS TO MILITARY RESERVE 
                   TECHNICIANS.

       (a) Technicians Covered by FERS.--Paragraph (1) of section 
     8414(c) of title 5, United States Code, is amended by 
     striking ``after becoming 50 years of age and completing 25 
     years of service'' and inserting ``after completing 25 years 
     of service or after becoming 50 years of age and completing 
     20 years of service''.
       (b) Technicians Covered by CSRS.--Section 8336 of title 5, 
     United States Code, is amended by adding at the end the 
     following new subsection:
       ``(p) Section 8414(c) of this title applies--
       ``(1) under paragraph (1) of such section to a military 
     reserve technician described in that paragraph for purposes 
     of determining entitlement to an annuity under this 
     subchapter; and
       ``(2) under paragraph (2) of such section to a military 
     technician (dual status) described in that paragraph for 
     purposes of determining entitlement to an annuity under this 
     subchapter.''.
       (c) Applicability.--Subsection (c) of section 8414 of title 
     5, United States Code (as amended by subsection (a)), and 
     subsection (p) of section 8336 of such title (as added by 
     subsection (b)), shall apply according to the provisions 
     thereof with respect to separations from service referred to 
     in such subsections that occur on or after October 5, 1999.
                                 ______
                                 
      By Mrs BOXER:
  S. 156. A bill to improve academic and social outcomes for students 
and reduce both juvenile crime and the risk that youth will become 
victims of crime by providing productive activities during after school 
hours; to the Committee on Health, Education, Labor, and Pensions.
  S. 157. A bill to establish a program to help States expand the 
existing education system to include at least 1 year of early education 
preceding the year a child enters kindergarten; to the Committee on 
Health, Education, Labor, and Pensions.
  Mrs. BOXER. Mr. President, there have been many positive steps taken 
to support quality early education and afterschool programs, yet they 
still represent token steps when giant leaps are needed. America must 
commit to ensuring a comprehensive education system beginning with 
early education

[[Page S483]]

programs and continuing with afterschool programs. This is why I am re-
introducing my two bills, the ``Early Education Act of 2001,'' and the 
``After School Education and Anti-Crime Act of 2001.''
  Every day, millions of working parents are forced with the prospect 
of leaving their children unsupervised after school because they either 
cannot afford quality afterschool programs or the programs simply are 
unavailable in their surrounding area. Children need a place to go 
after school. An empty house should not be an option. It can be 
especially frightening for many students today because of the increase 
in crime and drug related incidents in their neighborhoods.
  There are anywhere from 8 to 15 million children without accessible 
afterschool opportunities. Only 33 percent of schools in low-income 
neighborhoods offer before and afterschool programs compared to over 50 
percent of schools in affluent neighborhoods. Yet, unlike what most may 
believe, this tragic situation cuts across both racial and economic 
lines. Affluent, non-minority workers also leave their children home 
alone.
  According to a recent report from the Urban Institute, one in five 
children ages 6 to 12 are regularly left without adult supervision 
after school. The FBI reports that the after school hours between 2 
p.m. and 8 p.m. are the times when latchkey children are most likely to 
be involved in crimes and other delinquent behavior, and this is 
precisely the time period when juvenile crime peaks across the nation.
  According to the Departments of Education and Health and Human 
Services, extracurricular activities, like those provided by 
afterschool programs, have proven to reduce the number of students 
likely to use drugs by 50 percent and the number of students likely to 
become teen parents by 33 percent. Statistics like these prove that 
after school programs are essential to ensuring the safety of our 
children in the critical hours after school.
  We made great progress in the last 5 years. Through the 21st Century 
Community Learning Center program, federal support for local 
afterschool programs increased from $1 million in fiscal year 1997 to 
$845 million in fiscal year 2001. As a result, over 900 communities 
across the nation are now providing their children with a positive 
alternative to unsupervised care.
  But a gap still exists. While eight out of ten voters in America 
indicate they strongly support afterschool programs and would welcome 
them in their community, fewer than 4 out of 10 voters say that their 
community provides afterschool programs.
  My bill, the After Education and Anti-Crime Act of 2001, would help 
close this gap. It would provide $1 billion in grants for afterschool 
programs and incrementally increase that funding over the next five 
years to $1.5 billion in the year 2006. This funding would help provide 
afterschool programs for 1.5 million youth in the year 2002 with the 
potential to assist nearly 2.5 million in the year 2006.

  While afterschool programs continue the learning process during after 
school hours, we also must support initiatives that ensure our young 
children receive quality educational experiences in their early, 
formative years.
  In 1989, the Nation's governors established a goal that all children 
would have access to high quality prekindergarten programs by the year 
2000. It is now the year 2001, and this goal still has not been met.
  Importantly, researchers have discovered that children have a 
learning capacity that can and should be developed at a much earlier 
age than was previously thought. The National Research Council reported 
that prekindergarten educational opportunities are necessary if 
children are going to develop the language and literacy skills needed 
to read.
  Furthermore, studies have shown that children who participate in 
prekindergarten programs are less likely to be held back a grade, show 
greater learning retention and initiative, have better social skills, 
are more enthusiastic about school, and more likely to have good 
attendance records. Yet, of the nearly 8 million 3- and 4-year-olds 
that could be in early education, fewer than half are enrolled.
  My bill, the Early Education Act of 2001, would create a 
demonstration project in at least 10 States that want to provide one 
year of prekindergarten early education in the public schools. There is 
a 50 percent matching requirement, and the $300 million authorized 
under this bill would be used by States to supplement--not supplant--
other Federal, State or local funds.
  Our children need a solid foundation that builds on our current 
education system by providing them with early learning skills and the 
opportunity to further develop these skills during the afterschool 
hours. My bills will help create such a positive environment for our 
Nation's youth.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Lugar):
  S. 158. A bill to improve schools; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. BINGAMAN. Mr. President, I rise today to re-introduce legislation 
that I first introduced in 1999. This bill will establish much needed 
accountability for our education system so that the taxpayers' 
investment in education is adequately protected and our children 
receive the best possible education. I am pleased to offer this 
bipartisan bill on behalf of myself and my colleague Senator Lugar. The 
provisions of this bill are also included in S. 7, introduced yesterday 
by Senator Daschle and 18 other senators.
  I think that we can all agree that greater accountability in our 
public schools is an imperative. I am encouraged that President Bush 
and our new Secretary of Education, Rod Paige, have both expressed a 
strong commitment to increased accountability and have implemented 
strong school accountability standards in Texas. I understand 
accountability is a central piece of the administration's proposal 
being released today.
  In 1994, we made some important changes to the Elementary and 
Secondary Education Act. We created an accountability system for the 
program receiving most of the ESEA funds--the program, for 
disadvantaged students called the Title I program. This accountability 
framework--along with the Goals 2000 program--have driven the 
standards-based reform efforts across the nation. During the last 5 
years, however, experience in many States has demonstrated that we must 
do more. At this point, only 11 states have fully approved assessment 
systems in place as required under Title I.
  The federal government has succeeded in targeting funds on those most 
in need better than any state or local government. And over the last 
three decades we have had success--albeit only partial success--in 
closing the achievement gap between economically disadvantaged students 
and their peers.
  Our bill builds on the existing strengths of the accountability 
structure in the current Title I programs and also establishes 
accountability for teacher quality and other federal education programs 
encompassed in the Elementary and Secondary Education Act. In 
particular, our bill (1) establishes aggressive but achievable 
performance objectives for all students linked to each state's own 
standards and assessments; (2) directs resources to the students and 
objectives most in need and (3) provides maximum flexibility for 
educators in devising strategies that meet our shared goals, but 
ultimately having real consequences and sanctions for states, 
districts, and schools that do not meet agreed-upon performance 
objectives for student achievement.
  Through amendments to Title I and Title VI of the Elementary and 
Secondary Education Act, our bill establishes aggressive but achievable 
performance objectives for all students.
  We require rigorous statewide accountability systems based on each 
state's standards and assessments holding states, districts, and 
schools accountable for real achievement progress for all students, by 
requiring states, districts and schools to set specific, numerical 
goals for improvement which will ensure that all students will be 
proficient on state standards within 10 years. We also require public 
reporting of not just the results of the assessment but also the number 
of students excluded from assessments.
  Most importantly, Mr. President, this bill demands results for all 
students, by no longer tolerating existing achievement gaps between 
minority

[[Page S484]]

and non-minority students, poor and non-poor students, and LEP and 
English-speaking students. The achievement gap between low-income 
students and their more advantaged peers has narrowed significantly 
from 1970 until the mid-1980's. This was a central goal of the Title I 
program and its success in this regard is underrated.
  But we have not done enough to accelerate those results. 
Accountability systems that depend upon average student achievement 
data--data in the aggregate--will not close the achievement gaps that 
separate low-income students from more affluent students or minority 
students from white students.
  For example, in my home State of New Mexico, in 1994 4th grade 
reading data show that an average of 21 percent of the 4th graders in 
my state were reading at the proficient level. This is distressing 
enough, but the disaggregated data tells an even more depressing story. 
In New Mexico only 11 percent of the African American 4th graders and 
just 15 percent of the Latino 4th graders were reading at the 
proficient level. The 1996 4th grade NAEP data show that 13 percent of 
all students in New Mexico were proficient in math while only 3 percent 
of African American students and 6 percent of Latino students were 
proficient.
  The fact that these students are in the minority means that their 
performance data is swamped by data of the majority when an 
accountability system that depends on averages is used.
  To remedy this--to close the gaps and to make good on the promises of 
Title I--our bill would demand that states use disaggregated data and 
goals to hold schools and school districts accountable for the use of 
Title I funds.
  Mr. President, recognizing that increased accountability and 
increased results will not be easy to accomplish, our bill also directs 
additional resources to the students and objectives most in need.
  First, our bill would set aside a pot of funds (3 percent of Title I 
funds--about $250 million at current funding levels--and 5 percent 
after three years) for school improvement. 80 percent of these funds 
would be sent to the local level to support efforts to turn around 
failing schools. Schools can use these funds to implement research-
based comprehensive school reform programs.
  An example of a comprehensive school reform model used widely in my 
State and throughout the nation with great results is Success for All. 
This program is a proven early grade reading program, which if 
implemented properly can ensure results. At the end of the first grade, 
Success for All schools have average reading scores almost three months 
ahead of those in matching control schools, and by the end of the 5th 
grade, students read more than one year ahead of control peers. The 
program can reduce the need for special education placements by more 
than 50 percent and virtually eliminate retention. Our bill provides 
new funding of $500 million per year to states and school districts to 
implement comprehensive, research-based school reform programs, such as 
Success for All, that have proven effectiveness.
  Second, the state may use the remaining State funds to provide 
assistance to districts and schools as they implement their 
accountability system and develop school improvement plans.
  Finally, we also support an increased authorization level for Title 
I--$15 billion--and will continue to fight for substantial increases in 
the appropriations process.
  Mr. President, the bill does not provide additional resources without 
asking for something in return. The bill would ensure that if states, 
districts or schools fail to demonstrate returns on the federal 
investment through increased student performance, real consequences and 
sanctions will result.

  On the school and district level, if grant recipients do not meet 
required performance standards, changes in the governance structure of 
the school or district must be implemented; and students must be 
allowed to transfer to higher performing schools. The states and 
districts must provide the necessary resources for transportation with 
state and local funds; state administrative funds will be withheld; and 
Title VI funding (current block grant program) will be reduced and 
States will be ineligible for the Ed-Flex program.
  This bill also would establish aggressive but achievable performance 
objectives to ensure that every class has a qualified teacher. Our bill 
does this by first, requiring states receiving federal funds to ensure 
that all teachers are fully qualified by December 2005; second, 
requiring states and districts receiving federal teacher quality funds 
to set specific numerical performance goals and targets for reducing 
the number of unqualified and out-of-field teachers; and third, 
ensuring that low income and minority students are not taught by 
unqualified teachers at higher rates than other students.
  The bill would ensure that resources are directed to these objectives 
first, by ensuring that federal funds are not used to hire unqualified 
teachers and second, by ensuring that resources are provided for, and 
school improvement plans incorporate, high-quality, research-based 
professional development for instructional staff.
  Again, in exchange for increased resources, our bill would provide 
consequences for failing to meet performance objectives. States failing 
to meet their performance objectives would lose State administrative 
funding. Districts and schools failing to meet performance objectives 
would be ineligible for continuing grants.
  This bill also ensures that the other Federal Education Programs in 
the ESEA incorporate performance-based accountability measures by: 
First, requiring that all plans submitted with grant applications 
incorporate performance-based objectives for increased student 
performance or other relevant program objectives. Second, providing 
additional funding through the Title VI block grant program in the ESEA 
to achieve performance-based objectives. Third, providing consequences 
for failing to meet performance-based objectives, including 
ineligibility for continuing grants in the case of competitive programs 
and in the case of formula programs, reductions in administrative funds 
and Title VI, and fourth, mandating that states failing to meet goals 
would also be ineligible for flexible funding programs in current law 
(``Ed Flex'').
  In addition, this bill recognizes the critical role played by parents 
in improving performance and ensuring accountability. The bill provides 
parents the right to know their child's teachers' qualifications; it 
requires that parents be notified when their child's school is failing; 
it requires school improvement plans be published and parents be 
included in their development; and it requires school report cards to 
inform parents about the quality of their schools and their programs in 
meeting student achievement goals.
  Finally, our bill authorizes $200 million dollars for States to 
reward high performing schools and districts so that these schools and 
districts are recognized and encouraged to strive for high performance.
  Mr. President, our bill would use an output-based rather than an 
input-based system of accountability for the various programs 
authorized by this bill. A shift that my colleagues on the both sides 
of the aisle have repeatedly endorsed.
  Indeed, Both President Bush and Secretary Paige have expressed 
support for the measures incorporated in this bill and implemented many 
of them with some success in Texas. Both have endorsed closing the 
achievement gap at the school level with real consequences for 
failure--the key component for accountability under Title I. They have 
indicated support for report cards, a rewards program for successful 
schools, and using performance-based accountability for all education 
programs. At his confirmation hearing, Secretary Paige also endorsed 
providing additional resources to struggling schools to help them turn 
around before corrective actions are taken. So I am very hopeful that 
this will be a bill that receives strong bipartisan support and I look 
forward to working with my colleagues on both sides of the aisle on it.
  In conclusion, Mr. President, many schools that educate hard-to-serve 
students have shown success by setting high standards for staff and 
students and mobilizing educators and the community around a clear set 
of educational goals.
  In fact, there are successful schools all over the country, in every 
type of

[[Page S485]]

community, that are living proof that all children have the ability to 
achieve beyond our wildest expectations, no matter what their economic 
or social background.
  Success is not yet the rule in all of our schools. Our job, in this 
Congress, is to support parents and educators in every community as 
they apply these lessons and leverage federal funds so that they create 
change in areas where success continues to lag. We know what works. Now 
we must dedicate the resources needed to apply what works and hold the 
system accountable for real results. Again. I want to thank my 
colleague, Senator Lugar, for his cosponsorship of this bill.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 158

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``School Improvement 
     Accountability Act''.

                TITLE I--HELPING DISADVANTAGED CHILDREN

     SEC. 101. RESERVATIONS FOR ACCOUNTABILITY.

       Section 1003 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6303) is amended to read as follows:

     ``SEC. 1003. RESERVATION FOR ACCOUNTABILITY AND SCHOOL 
                   IMPROVEMENT.

       ``(a) State Reservation.--
       ``(1) In general.--Each State educational agency shall 
     reserve 3 percent of the amount the agency receives under 
     part A for each of fiscal years 2002 and 2003, and 5 percent 
     of that amount for each of fiscal years 2004 through 2006, to 
     carry out paragraph (2) and to carry out its responsibilities 
     under sections 1116 and 1117, including carrying out its 
     statewide system of technical assistance and providing 
     support for local educational agencies.
       ``(2) Local educational agencies.--Of the amount reserved 
     under paragraph (1) for any fiscal year, the State 
     educational agency shall allocate at least 80 percent 
     directly to local educational agencies. In making allocations 
     under this paragraph, the State educational agency shall give 
     first priority to agencies, and agencies serving schools, 
     identified for corrective action or improvement under section 
     1116(c).
       ``(3) Use of funds.--Each local educational agency 
     receiving an allotment under paragraph (2) shall use the 
     allotment to--
       ``(A) carry out corrective action, as defined in section 
     1116(c)(5)(A), in those schools; or
       ``(B) achieve substantial improvement in the performance of 
     those schools.
       ``(b) National Activities.--From the total amount 
     appropriated for any fiscal year to carry out this title, the 
     Secretary may reserve not more than 0.30 percent to conduct 
     evaluations and studies and to collect data.

     SEC. 102. IMPROVED ACCOUNTABILITY.

       (a) State Plans.--Section 1111(b) of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6311(b)) is 
     amended--
       (1) in the subsection heading, by striking ``and 
     Assessments'' and inserting ``, Assessments, and 
     Accountability'';
       (2) by amending paragraph (2) to read as follows:
       ``(2) Adequate yearly progress.--(A) Each State plan shall 
     specify what constitutes adequate yearly progress in student 
     achievement, under the State's accountability system 
     described in paragraph (4), for each school and each local 
     educational agency receiving funds under this part, and for 
     the State.
       ``(B) The specification of adequate yearly progress in the 
     State plan for schools--
       ``(i) shall be based primarily on the standards described 
     in paragraph (1) and the valid and reliable assessments 
     aligned to State standards described in paragraph (3);
       ``(ii) shall include specific numerical adequate yearly 
     progress requirements in each subject and grade included in 
     the State assessments at least for each of the assessments 
     required under paragraph (3) and shall base the numerical 
     goal required for each group of students specified in clause 
     (iv) upon a timeline that ensures all students meet or exceed 
     the proficient level of performance on the assessments 
     required by this section within 10 years after the effective 
     date of the School Improvement Accountability Act;
       ``(iii) shall include other academic indicators, such as 
     school completion or dropout rates, with the data for all 
     such academic indicators disaggregated as required by clause 
     (iv), but the inclusion of such indicators shall not decrease 
     the number of schools or local educational agencies that 
     would be subject to identification for improvement or 
     corrective action if the indicators were not included;
       ``(iv) shall compare separately data for the State as a 
     whole, for each local educational agency, and for each 
     school, regarding the performance and progress of students, 
     disaggregated by each major ethnic and racial group, by 
     English proficiency status, and by economically disadvantaged 
     students as compared with 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 would be insufficient to yield statistically 
     reliable information or the results would reveal individually 
     identifiable information about individual students); and
       ``(v) shall compare the proportion of students at the 
     basic, proficient, and advanced levels of performance in a 
     grade for a year with the proportion of students at each of 
     the 3 levels in the same grade in the previous year.
       ``(C)(i) Adequate yearly progress for a local educational 
     agency shall be based upon both--
       ``(I) the number or percentage of schools identified for 
     school improvement or corrective action; and
       ``(II) the progress of the local educational agency in 
     reducing the number or length of time schools are identified 
     for school improvement or corrective action.
       ``(ii) The State plan shall provide that each local 
     educational agency shall ensure that, not later than the end 
     of the fourth academic year after the effective date of the 
     School Improvement Accountability Act, the percentage of 
     schools making adequate yearly progress among schools whose 
     concentrations of poor children are greater than the average 
     concentration of such children served by the local 
     educational agency shall not be less than the percentage of 
     schools making adequate yearly progress among schools whose 
     concentrations of poor children are less than the average 
     concentration of such children served by the local 
     educational agency.
       ``(D)(i) Adequate yearly progress for a State shall be 
     based upon both--
       ``(I) the number or percentage of local educational 
     agencies identified for improvement or corrective action; and
       ``(II) the progress of the State in reducing the number or 
     length of time local educational agencies are identified for 
     improvement or corrective action.
       ``(ii) The State plan shall provide that the State shall 
     ensure that, not later than the end of the fourth academic 
     year after the effective date of the School Improvement 
     Accountability Act, the percentage of local educational 
     agencies making adequate yearly progress among local 
     educational agencies whose concentrations of poor children 
     are greater than the State average of such concentrations 
     shall not be less than the percentage of local educational 
     agencies making adequate yearly progress among local 
     educational agencies whose concentrations of poor children 
     are less than the State average.'';
       (3) in paragraph (3)--
       (A) in the matter preceding subparagraph (A)--
       (i) by striking ``developed or adopted'' and inserting ``in 
     place''; and
       (ii) by inserting ``, not later than the school year 2000-
     2001,'' after ``will be used'';
       (B) by redesignating subparagraphs (G), (H), and (I) as 
     subparagraphs (H), (I), and (J);
       (C) in subparagraph (F)--
       (i) in clause (ii), by striking ``and'' after the 
     semicolon; and
       (ii) by adding at the end the following:
       ``(iv) the use of assessments written in Spanish for the 
     assessment of Spanish-speaking students with limited English 
     proficiency, if Spanish-language assessments are more likely 
     than English language assessments to yield accurate and 
     reliable information regarding what those students know and 
     can do in content areas other than English; and
       ``(v) notwithstanding clauses (iii) and (iv), the 
     assessment (using tests written in English) of reading or 
     language arts of any student who has attended school in the 
     United States (not including Puerto Rico) for 3 or more 
     consecutive years, for purposes of school accountability;'';
       (D) by inserting after subparagraph (F) the following:
       ``(G) result in a report from each local educational agency 
     that indicates the number and percentage of students excluded 
     from each assessment at each school, including, where 
     statistically sound, data disaggregated in accordance with 
     subparagraph (J), except that a local educational agency 
     shall be prohibited from providing such information if 
     providing the information would reveal the identity of any 
     individual student.''; and
       (E) by amending subparagraph (I) (as so redesignated) to 
     read as follows:
       ``(I) provide individual student interpretive and 
     descriptive reports, which shall include scores and other 
     information on the attainment of student performance 
     standards that reflect the quality of daily instruction and 
     learning such as measures of student coursework over time, 
     student attendance rates, student dropout rates, and rates of 
     student participation in advanced level courses; and'';
       (4) by striking paragraph (7);
       (5) by redesignating paragraphs (4), (5), (6), and (8) as 
     paragraphs (8), (9), (10), and (11), respectively;
       (6) by inserting after paragraph (3) the following:
       ``(4) Accountability.--(A) Each State plan shall 
     demonstrate that the State has developed and is implementing 
     a statewide accountability system that is or will be 
     effective in substantially increasing the numbers and 
     percentages of all students, including the lowest performing 
     students, economically disadvantaged students, and students 
     with limited proficiency in English, who

[[Page S486]]

     meet the State's proficient and advanced levels of 
     performance within 10 years after the date of enactment of 
     the School Improvement Accountability Act. The State 
     accountability system shall--
       ``(i) be the same accountability system the State uses for 
     all schools or all local educational agencies in the State, 
     if the State has an accountability system for all schools or 
     all local educational agencies in the State;
       ``(ii) hold local educational agencies and schools 
     accountable for student achievement in at least reading and 
     mathematics and in any other subject that the State may 
     choose; and
       ``(iii) identify schools and local educational agencies for 
     improvement or corrective action based upon failure to make 
     adequate yearly progress as defined in the State plan 
     pursuant to paragraph (2).
       ``(B) The accountability system described in subparagraph 
     (A) and described in the State plan shall also include a 
     procedure for identifying for improvement a school or local 
     educational agency, intervening in that school or agency, and 
     (if that intervention is not effective) implementing a 
     corrective action not later than 3 years after first 
     identifying such agency or school, that--
       ``(i) complies with sections 1116 and 1117, including the 
     provision of technical assistance, professional development, 
     and other capacity-building as needed, 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 adequate yearly progress described in 
     paragraph (2); and
       ``(ii) includes rigorous criteria for identifying those 
     agencies and schools based upon failure to make adequate 
     yearly progress in student achievement in accordance with 
     paragraph (2).
       ``(5) Public notice and comment.--Each State plan shall 
     contain assurances that--
       ``(A) in developing the State plan provisions relating to 
     adequate yearly progress, the State diligently sought public 
     comment from a range of institutions and individuals in the 
     State with an interest in improved student achievement; and
       ``(B) the State will continue to make a substantial effort 
     to ensure that information regarding this part is widely 
     known and understood by citizens, parents, teachers, and 
     school administrators throughout the State, and is provided 
     in a widely read or distributed medium.
       ``(6) Annual review.--The State plan shall provide an 
     assurance that the State will annually submit to the 
     Secretary information, as part of the State's consolidated 
     plan under section 14302, on the extent to which schools and 
     local educational agencies are making adequate yearly 
     progress, including the number and names of schools and local 
     educational agencies identified for improvement and 
     corrective action under section 1116, the steps taken to 
     address the performance problems of such schools and local 
     educational agencies, and the number and names of schools 
     that are no longer so identified, for purposes of determining 
     State and local compliance with section 1116.
       ``(7) Penalties.--(A) The State plan shall provide that, if 
     the State fails to meet the deadlines described in paragraphs 
     (1)(C) and (10) for demonstrating that the State has in place 
     high-quality State content and student performance standards 
     and aligned assessments, or if the State fails to establish a 
     system for measuring and monitoring adequate yearly progress, 
     for a fiscal year, including having the ability to 
     disaggregate student achievement data for the assessments as 
     required under this section at the State, local educational 
     agency, and school levels, then the State shall be ineligible 
     to reserve a greater amount of administrative funds under 
     section 1003 for the succeeding fiscal year than the State 
     reserved for such purposes for the fiscal year preceding the 
     fiscal year in which the failure occurred.
       ``(B)(i) The State plan shall provide that, except as 
     described in clause (ii), if the State fails to meet the 
     deadlines described in paragraphs (1)(C) and (10) for a 
     fiscal year, then the Secretary may withhold funds made 
     available under this part for administrative expenses for the 
     succeeding fiscal year in such amount as the Secretary 
     determines appropriate.
       ``(ii) The State plan shall provide that, if the State 
     fails to meet the deadlines described in paragraphs (1)(C) 
     and (10) for the succeeding fiscal year or a subsequent 
     fiscal year, the Secretary shall withhold not less than \1/5\ 
     of the funds made available under this part for 
     administrative expenses for the fiscal year.
       ``(C) The State plan shall provide that, if the State has 
     not developed challenging State assessments that are aligned 
     to challenging State content standards in at least 
     mathematics and reading or language arts by school year 2000-
     2001, the State shall not be eligible for designation as an 
     Ed-Flex Partnership State under the Education Flexibility 
     Partnership Act of 1999 until the State develops such 
     assessments, and the State shall be subject to such other 
     penalties as are provided in this Act for failure to develop 
     the assessments.''; and
       (7) by adding at the end the following:
       ``(12) School reports.--The State plan shall provide that 
     individual school reports publicized and disseminated under 
     section 1116(a)(2) shall include information on the total 
     number of students excluded from each assessment at each 
     school, including, where statistically sound, data 
     disaggregated in accordance with paragraph (3)(J), and shall 
     include information on why such students were excluded from 
     the assessment. In issuing this report, a local educational 
     agency may not provide any information that would violate the 
     privacy or reveal the identity of any individual student.''.
       (b) Assurances.--Section 1112(c)(1) of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6312(c)(1)) is 
     amended--
       (1) in subparagraph (G), by striking ``; and'' and 
     inserting a semicolon;
       (2) in subparagraph (H), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(I) ensure, through incentives for voluntary transfers, 
     the provision of professional development, and recruitment 
     programs, that low-income students and minority students are 
     not taught at higher rates than other students by 
     unqualified, out-of-field, or inexperienced teachers.''.
       (c) Assessment and Improvement.--Section 1116 of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6317) is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) State and Local Review.--
       ``(1) In general.--Each local educational agency receiving 
     funds under this part shall use the State assessments and 
     other academic indicators described in the State plan or in a 
     State-approved local educational agency plan to review 
     annually the progress of each school served under this part 
     by the agency to determine whether the school is making the 
     adequate yearly progress specified in section 1111(b)(2) 
     toward enabling all students to meet the State's student 
     performance standards described in the State plan.
       ``(2) Publication and dissemination; results.--Each local 
     educational agency receiving funds under this part shall--
       ``(A) publicize and disseminate in individual school 
     reports that include statistically sound results 
     disaggregated in the same manner as results are disaggregated 
     under section 1111(b)(3)(J), to teachers and other staff, 
     parents, students, and the community, the results of the 
     annual review under paragraph (1) and (if not already 
     included in the review), graduation rates, attendance rates, 
     retention rates, and rates of participation in advanced level 
     courses, for all schools served under this part; and
       ``(B) provide the results of the annual review to schools 
     served by the agency under this part so that the schools can 
     continually refine their programs of instruction to help all 
     students served under this part in those schools to meet the 
     State's student performance standards.'';
       (2) in subsection (c)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) In general.--(A) A local educational agency shall 
     identify for school improvement any school served under this 
     part that--
       ``(i) for 2 consecutive years failed to make adequate 
     yearly progress as defined in the State's plan under section 
     1111, except that in the case of a school participating in a 
     targeted assistance program under section 1115, a local 
     educational agency may review the progress of only those 
     students in such school who are served under this part; or
       ``(ii) was identified for school improvement under this 
     section on the day preceding the date of enactment of the 
     School Improvement Accountability Act.
       ``(B) The 2-year period described in subparagraph (A)(i) 
     shall include any continuous period of time immediately 
     preceding the date of the enactment of such Act, during which 
     a 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.'';
       (B) by amending paragraph (2) to read as follows:
       ``(2) Requirements.--(A)(i) Each school identified under 
     paragraph (1)(A) shall promptly notify a parent of each 
     student enrolled in the school that the school was identified 
     for improvement by the local educational agency and provide 
     with the notification--
       ``(I) the reasons for such identification; and
       ``(II) information about opportunities for parents to 
     participate in the school improvement process.
       ``(ii) The notification under this subparagraph shall be in 
     a format and, to the extent practicable, in a language, that 
     the parents can understand.
       ``(B)(i) Before identifying a school for school improvement 
     under paragraph (1)(A), the local educational agency shall 
     inform the school that the agency proposes to identify the 
     school for school improvement and provide the school with an 
     opportunity to review the school-level data, including 
     assessment data, upon which the proposed determination 
     regarding identification is based.
       ``(ii) If the school believes that the proposed 
     identification is in error for statistical or other 
     substantive reasons, the school may provide supporting 
     evidence to the local educational agency during the review 
     period, and the agency shall consider such evidence before 
     making a final determination regarding identification.
       ``(iii) The review period under this subparagraph shall not 
     exceed 30 days. At the end of the period, the agency shall 
     make public a final determination regarding identification of 
     the school.

[[Page S487]]

       ``(C) Each school identified under paragraph (1)(A) shall, 
     within 3 months after being so identified, and in 
     consultation with parents, the local educational agency, and 
     the school support team or other outside experts, develop or 
     revise a school plan that--
       ``(i) addresses the fundamental teaching and learning needs 
     in the school;
       ``(ii) describes the specific achievement problems to be 
     solved;
       ``(iii) includes the strategies, supported by valid and 
     reliable evidence of effectiveness, with specific goals and 
     objectives, that have the greatest likelihood of improving 
     the performance of participating students in meeting the 
     State's student performance standards;
       ``(iv) explains how those strategies will work to address 
     the achievement problems identified under clause (ii), 
     including providing a summary of evaluation-based evidence of 
     student achievement after implementation of those strategies 
     in other schools;
       ``(v) addresses the need for high-quality staff by ensuring 
     that all new teachers in the school in programs supported 
     with funds provided under this part are fully qualified;
       ``(vi) addresses the professional development needs of the 
     instructional staff of the school by describing a plan for 
     spending a minimum of 10 percent of the funds received by the 
     school under this part on professional development that--
       ``(I) does not supplant professional development services 
     that the instructional staff would otherwise receive; and
       ``(II) is designed to increase the content knowledge of 
     teachers, build teachers' capacity to align classroom 
     instruction with challenging content standards, and bring all 
     students in the school to proficient or advanced levels of 
     performance;
       ``(vii) identifies specific goals and objectives the school 
     will undertake for making adequate yearly progress, including 
     specific numerical performance goals and targets that are 
     high enough to ensure that all groups of students specified 
     in section 1111(b)(2)(B)(iv) meet or exceed the proficient 
     levels of performance in each subject area within 10 years 
     after the date of enactment of the School Improvement 
     Accountability Act; and
       ``(viii) specifies the responsibilities of the school and 
     the local educational agency, including how the local 
     educational agency will hold the school accountable for, and 
     assist the school in, meeting the school's obligations to 
     provide enriched and accelerated curricula, effective 
     instructional methods, highly qualified professional 
     development, and timely and effective individual assistance, 
     in partnership with parents.
       ``(D)(i) The school shall submit the plan (including a 
     revised plan) to the local educational agency for approval.
       ``(ii) The local educational agency shall promptly subject 
     the plan to a peer review process, work with the school to 
     revise the plan as necessary, and approve the plan.
       ``(iii) The school shall implement the plan as soon as the 
     plan is approved.'';
       (C) by amending paragraph (4) to read as follows:
       ``(4) Technical assistance.--(A) For each school identified 
     for school improvement under paragraph (1)(A), the local 
     educational agency shall provide technical assistance as the 
     school develops and implements the school's plan.
       ``(B) Such technical assistance--
       ``(i) shall include information on effective methods and 
     instructional strategies that are supported by valid and 
     reliable evidence of effectiveness;
       ``(ii) shall be designed to strengthen the core academic 
     program for the students served under this part, address 
     specific elements of student performance problems, and 
     address problems, if any, in implementing the parental 
     involvement requirements in section 1118, implementing the 
     professional development provisions in section 1119, and 
     carrying out the responsibilities of the school and local 
     educational agency under the plan; and
       ``(iii) may be provided directly by the local educational 
     agency, through mechanisms authorized under section 1117, or 
     (with the local educational agency's approval) by an 
     institution of higher education whose teacher preparation 
     program is not identified as low performing by its State and 
     that is in full compliance with the requirements of section 
     207 of the Higher Education Act of 1965, a private nonprofit 
     organization, an educational service agency, a comprehensive 
     regional assistance center under part A of title XIII, or 
     other entities with experience in helping schools improve 
     achievement.
       ``(C) Technical assistance provided under this section by 
     the local educational agency or an entity approved by such 
     agency shall be supported by valid and reliable evidence of 
     effectiveness.'';
       (D) by amending paragraph (5) to read as follows:
       ``(5) 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) In this paragraph, the term `corrective action' means 
     action, consistent with State and local law, that--
       ``(i) substantially and directly responds to the consistent 
     academic failure that caused the local educational agency to 
     take such action and to any underlying staffing, curricular, 
     or other problems in the school involved; and
       ``(ii) is designed to substantially increase the likelihood 
     that students will perform at the proficient and advanced 
     performance levels.
       ``(B) After providing technical assistance under paragraph 
     (4), the local educational agency--
       ``(i) may take corrective action at any time with respect 
     to a school that has been identified under paragraph (1)(A);
       ``(ii) shall take corrective action with respect to any 
     school that fails to make adequate yearly progress, as 
     defined by the State, for 2 consecutive years following the 
     school's identification under paragraph (1)(A), at the end of 
     the second year; and
       ``(iii) shall continue to provide technical assistance 
     while instituting any corrective action under clause (i) or 
     (ii).
       ``(C) In the case of a school described in subparagraph 
     (B)(ii), the local educational agency--
       (i) shall take corrective action that changes the school's 
     administration or governance by--

       (I) instituting and fully implementing a new curriculum, 
     including providing appropriate professional development for 
     all relevant staff, that is supported by valid and reliable 
     evidence of effectiveness and offers substantial promise of 
     improving educational achievement for low-performing 
     students;
       (II) restructuring the school, such as by creating schools 
     within schools or other small learning environments, or 
     making alternative governance arrangements (such as the 
     creation of a public charter school);
       (III) redesigning the school by reconstituting all or part 
     of the school staff;
       (IV) eliminating the use of noncredentialed teachers; or
       (V) closing the school;

       (ii) shall provide professional development for all 
     relevant staff, that is supported by valid and reliable 
     evidence of effectiveness and that offers substantial promise 
     of improving student educational achievement and is directly 
     related to the content area in which each teacher is 
     providing instruction and the State's content and performance 
     standards in that content area; and
       (iii) may defer, reduce, or withhold funds provided to 
     carry out this title.
       ``(D)(i) When a local educational agency has identified a 
     school for corrective action under subparagraph (B)(ii), the 
     agency shall provide all students enrolled in the school with 
     the option to transfer to another public school that is 
     within the area served by the local educational agency that 
     has not been identified for school improvement and provide 
     such students with transportation (or the costs of 
     transportation) to such school, subject to the following 
     requirements:
       ``(I) Such transfer must be consistent with State or local 
     law.
       ``(II) If the local educational agency cannot accommodate 
     the request of every student from the identified school, the 
     agency shall permit as many students as possible to transfer, 
     with such students being selected at random on a 
     nondiscriminatory and equitable basis.
       ``(III) The local educational agency may use not more than 
     10 percent of the funds the local educational agency receives 
     through the State reservation under section 1003(a)(2) to 
     provide transportation to students whose parents choose to 
     transfer the students to a different school under this 
     subparagraph.
       ``(ii) If all public schools served by the local 
     educational agency are identified for corrective action, the 
     agency shall, to the extent practicable, establish a 
     cooperative agreement with another local educational agency 
     in the area to enable students served by the agency to 
     transfer to a school served by that other agency.
       ``(E) A local educational agency may delay, for a period 
     not to exceed 1 year, implementation of corrective action 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.
       ``(F) The local educational agency shall publish and 
     disseminate to parents and the public in a format and, to the 
     extent practicable, in a language the parents and the public 
     can understand, through such means as the Internet, the 
     media, and public agencies, information on any corrective 
     action the agency takes under this paragraph.
       ``(G)(i) Before taking corrective action with respect to 
     any school under this paragraph, the local educational agency 
     shall inform the school that the agency proposes to take 
     corrective action and provide the school with an opportunity 
     to review the school-level data, including assessment data, 
     upon which the proposed determination regarding corrective 
     action is based.
       ``(ii) If the school believes that the proposed 
     determination is in error for statistical or other 
     substantive reasons, the school may provide supporting 
     evidence to the local educational agency during the review 
     period, and the agency shall consider such evidence before 
     making a final determination regarding corrective action.
       ``(iii) The review period under this subparagraph shall not 
     exceed 45 days. At the end of the period, the local 
     educational agency shall make public a final determination 
     regarding corrective action for the school.'';
       (E) by amending paragraph (6) to read as follows:

[[Page S488]]

       ``(6) State educational agency responsibilities.--If a 
     State educational agency determines that a local educational 
     agency failed to carry out its responsibilities under this 
     section, the State educational agency shall take such action 
     as the agency finds necessary, consistent with this section, 
     to improve the affected schools and to ensure that the local 
     educational agency carries out its responsibilities under 
     this section.''; and
       (F) by amending paragraph (7) to read as follows:
       ``(7) Waivers.--The State educational agency shall review 
     any waivers that have previously been approved for a school 
     identified for improvement or corrective action, and shall 
     terminate any waiver approved by the State, under the 
     Educational Flexibility Partnership Act of 1999, if the State 
     determines, after notice and an opportunity for a hearing, 
     that the waiver is not helping such school make adequate 
     yearly progress toward meeting the goals, objectives, and 
     performance targets in the school's improvement plan.''; and
       (3) by amending subsection (d) 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 
     receiving funds under this part to determine whether schools 
     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.
       ``(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 failed to make adequate 
     yearly progress as defined in the State's plan under section 
     1111(b)(2); or
       ``(B) was identified for improvement under this section as 
     this section was in effect on the day preceding the date of 
     enactment of the School Improvement Accountability Act.
       ``(3) Transition.--The 2-year period described in paragraph 
     (2)(A) shall include any continuous period of time 
     immediately preceding the date of enactment of such Act, 
     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 enactment.
       ``(4) Targeted assistance schools.--For purposes of 
     reviewing the progress of targeted assistance schools served 
     by 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 inform 
     the local educational agency that the State educational 
     agency proposes to identify the local educational agency for 
     improvement and provide the local educational agency with an 
     opportunity to review the local educational agency data, 
     including assessment data, upon which the proposed 
     determination regarding identification is based.
       ``(B) If the local educational agency believes that the 
     proposed identification is in error for statistical or other 
     substantive reasons, the agency may provide supporting 
     evidence to the State educational agency during the review 
     period, and the agency shall consider such evidence before 
     making a final determination regarding identification.
       ``(C) The review period under this paragraph shall not 
     exceed 30 days. At the end of the period, the State shall 
     make public a final determination regarding identification of 
     the local educational agency.
       ``(6) Notification to parents.--(A) The local educational 
     agency shall promptly notify a parent of each student 
     enrolled in a school served by a local educational agency 
     identified for improvement that the agency was identified for 
     improvement and provide with the notification--
       (i) the reasons for the agency's identification; and
       (ii) information about opportunities for parents to 
     participate in upgrading the quality of the local educational 
     agency.
       ``(B) The notification under this paragraph shall be in a 
     format and, to the extent practicable, in a language, that 
     the parents can understand.
       ``(7) Local educational agency revisions.--(A) 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 and annual academic 
     achievement goals, in consultation with parents, school 
     staff, and others.
       ``(B) Achievement goals.--The annual academic achievement 
     goals shall be sufficiently high to ensure that all students 
     within the jurisdiction involved, including the lowest 
     performing students, economically disadvantaged students, 
     students of different races and ethnicities, and students 
     with limited English proficiency will meet or exceed the 
     proficient level of performance on the assessments required 
     by section 1111 within 10 years after the date of enactment 
     of the School Improvement Accountability Act.
       ``(C) The plan shall--
       ``(i) address the fundamental teaching and learning needs 
     in the schools served by that agency, and the specific 
     academic problems of low-performing students, including 
     stating a determination of why the local educational agency's 
     prior plan, if any, failed to bring about increased 
     achievement;
       ``(ii) incorporate strategies that are supported by valid 
     and reliable evidence of effectiveness and that strengthen 
     the core academic program in the local educational agency;
       ``(iii) identify specific annual academic achievement goals 
     and objectives that will--
       ``(I) have the greatest likelihood of improving the 
     performance of participating students in meeting the State's 
     student performance standards; and
       ``(II) include specific numerical performance goals and 
     targets for each of the groups of students for which data are 
     disaggregated pursuant to section 1111(b)(2)(B)(iv);
       ``(iv) address the professional development needs of the 
     instructional staff of the schools by describing a plan for 
     spending a minimum of 10 percent of the funds received by the 
     schools under this part on professional development that--
       ``(I) does not supplant professional development services 
     that the instructional staff would otherwise receive; and
       ``(II) is designed to increase the content knowledge of 
     teachers, build teachers' capacity to align classroom 
     instruction with challenging content standards, and bring all 
     students in the schools to proficient or advanced levels of 
     performance;
       ``(v) identify measures the local educational agency will 
     undertake to make adequate yearly progress;
       ``(vi) identify how, pursuant to paragraph (6), the local 
     educational agency will provide written notification to 
     parents in a format and, to the extent practicable, in a 
     language the parents can understand;
       ``(vii) specify the responsibilities of the State 
     educational agency and the local educational agency under the 
     plan; and
       ``(viii) include strategies to promote effective parental 
     involvement in the schools.
       ``(D) The local educational agency shall submit the plan 
     (including a revised plan) to the State educational agency 
     for approval. The State educational agency shall, within 60 
     days after submission of the plan, subject the plan to a peer 
     review process, work with the local educational agency to 
     revise the plan as necessary, and approve the plan.
       ``(E) The local educational agency shall implement the plan 
     (including a revised plan) as soon as the plan is approved.
       ``(8) State educational agency responsibility.--(A) For 
     each local educational agency identified under paragraph (2), 
     the State educational agency (or an entity authorized by the 
     agency) shall provide technical or other assistance, if 
     requested, as authorized under section 1117, to better enable 
     the local educational agency--
       ``(i) to develop and implement the local educational agency 
     plan as approved by the State educational agency consistent 
     with the requirements of this section; and
       ``(ii) to work with schools identified for improvement.
       ``(B) Technical assistance provided under this section by 
     the State educational agency or an entity authorized by the 
     agency shall be supported by valid and reliable evidence of 
     effectiveness.
       ``(9) 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) In this paragraph, the term `corrective action' means 
     action, consistent with State law, that--
       ``(i) substantially and directly responds to the consistent 
     academic failure that caused the State educational agency to 
     take such action and to any underlying staffing, curricular, 
     or other problems in the schools involved; and
       ``(ii) is designed to substantially increase the likelihood 
     that students served under this part will perform at the 
     proficient and advanced performance levels.
       ``(B) After providing technical assistance under paragraph 
     (8) and subject to subparagraph (D), the State educational 
     agency--
       ``(i) may take corrective action at any time with respect 
     to a local educational agency that has been identified under 
     paragraph (2);
       ``(ii) shall take corrective action with respect to any 
     local educational agency that fails to make adequate yearly 
     progress, as defined by the State, for 3 consecutive years 
     following the agency's identification under paragraph (2), at 
     the end of the third year; and
       ``(iii) shall continue to provide technical assistance 
     while instituting any corrective action under clause (i) or 
     (ii).
       ``(C) In the case of a local educational agency described 
     in subparagraph (B)(ii), the State educational agency shall 
     take at least 1 of the following corrective actions:
       ``(i) Withholding funds from the local educational agency.
       ``(ii) Reconstituting school district personnel.
       ``(iii) Removing particular schools from the jurisdiction 
     of the local educational agency and establishing alternative 
     arrangements for public governance and supervision of the 
     schools.
       ``(iv) Appointing, through the State educational agency, a 
     receiver or trustee to administer the affairs of the local 
     educational agency in place of the superintendent and school 
     board.
       ``(v) Abolishing or restructuring the local educational 
     agency.

[[Page S489]]

       ``(D) When a State educational agency has identified a 
     local educational agency for corrective action under 
     subparagraph (B)(ii), the State educational agency shall 
     provide all students enrolled in a school served by the local 
     educational agency with a plan to transfer to a higher 
     performing public school served by another local educational 
     agency and shall provide such students with transportation 
     (or the costs of transportation) to such schools, subject to 
     the following requirements:
       ``(i) The provision of the transfer shall be done in 
     conjunction with at least 1 additional action described in 
     this paragraph.
       ``(ii) If the State educational agency cannot accommodate 
     the request of every student from the schools served by the 
     agency, the agency shall permit as many students as possible 
     to transfer, with such students being selected at random on a 
     nondiscriminatory and equitable basis.
       ``(iii) The State educational agency may use not more than 
     10 percent of the funds the agency receives through the State 
     reservation under section 1003(a)(2) to provide 
     transportation to students whose parents choose to transfer 
     their child to a different school under this subparagraph.
       ``(E) Prior to implementing any corrective action under 
     this paragraph, the State educational agency shall provide 
     due process and a hearing to the affected local educational 
     agency, if State law provides for such process and hearing. 
     The hearing shall take place not later than 45 days following 
     the decision to implement the corrective action.
       ``(F) The State educational agency shall publish and 
     disseminate to parents and the public in a format and, to the 
     extent practicable, in a language the parents and the public 
     can understand, through such means as the Internet, the 
     media, and public agencies, information on any corrective 
     action the agency takes under this paragraph.
       ``(G) A State educational agency may delay, for a period 
     not to exceed 1 year, implementation of corrective action 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.
       ``(10) Waivers.--The State educational agency shall review 
     any waivers that have previously been approved for a local 
     educational agency identified for improvement or corrective 
     action, and shall terminate any waiver approved by the State, 
     under the Educational Flexibility Partnership Act of 1999, if 
     the State determines, after notice and an opportunity for a 
     hearing, that the waiver is not helping such agency make 
     adequate yearly progress toward meeting the goals, 
     objectives, and performance targets in the agency's 
     improvement plan.''.
       (d) State Assistance for School Support and Improvement.--
     Section 1117(a) of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6318(a)) is amended to read as follows:
       ``(a) System for Support.--
       ``(1) In general.--Each State educational agency shall 
     establish a statewide system of intensive and sustained 
     support and improvement for local educational agencies and 
     schools receiving funds under this part, in order to increase 
     the opportunity for all students served by those agencies and 
     schools to meet the State's content standards and student 
     performance standards.
       ``(2) Priorities.--In carrying out this section, a State 
     educational agency shall--
       ``(A) provide support and assistance to local educational 
     agencies and schools identified for corrective action under 
     section 1116;
       ``(B) provide support and assistance to other local 
     educational agencies and schools identified for improvement 
     under section 1116; and
       ``(C) provide support and assistance to each school 
     receiving funds under this part in which the number of 
     students in poverty equals or exceeds 75 percent of the total 
     number of students enrolled in such school.
       ``(3) Approaches.--In order to achieve the objectives of 
     this subsection, each statewide system shall provide 
     technical assistance and support through approaches such as--
       ``(A) use of school support teams, composed of individuals 
     who are knowledgeable about research on and practice of 
     teaching and learning, particularly about strategies for 
     improving educational results for low-achieving students;
       ``(B) the designation and use of `Distinguished Educators', 
     chosen from schools served under this part that have been 
     especially successful in improving academic achievement;
       ``(C) assisting local educational agencies or schools to 
     implement research-based comprehensive school reform models; 
     and
       ``(D) use of a peer review process designed to increase the 
     capacity of local educational agencies and schools to develop 
     high-quality school improvement plans.
       ``(4) Funds.--Each State educational agency--
       ``(A) shall use funds reserved under section 1003(a)(1), 
     but not used under section 1003(a)(2) and funds appropriated 
     under section 1002(f) to carry out this section; and
       ``(B) may use State administrative funds authorized for 
     such purpose.
       ``(5) Alternatives.--The State educational agency may 
     devise additional approaches to providing the assistance 
     described in subparagraphs (A) and (B) of paragraph (3), 
     other than the provision of assistance under the statewide 
     system, such as providing assistance through institutions of 
     higher education, educational service agencies, or other 
     local consortia. The State educational agency may seek 
     approval from the Secretary to use funds made available under 
     section 1003 for such approaches as part of the State 
     plan.''.
       (e) Conforming Amendments.--The Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6301 et seq.) is amended--
       (1) in section 1111(b)(1)(C) (20 U.S.C. 6311(b)(1)(C)), by 
     striking ``paragraph (6)'' and inserting ``paragraph (10)'';
       (2) in section 1112(c)(1)(D) (20 U.S.C. 6312(c)(1)(D)), by 
     striking ``section 1116(c)(4)'' and inserting ``section 
     1116(c)(5)'';
       (3) in section 1117(c)(2)(A) (20 U.S.C. 6318(c)(2)(A)), by 
     striking ``section 1111(b)(2)(A)(i)'' and inserting ``section 
     1111(b)(2)(A)'';
       (4) in section 1118(c)(4)(B) (20 U.S.C. 6319(c)(4)(B)), by 
     striking ``school performance profiles required under section 
     1116(a)(3)'' and inserting ``individual school reports 
     required under section 1116(a)(2)(A)'';
       (5) in section 1118(e)(1) (20 U.S.C. 6319(e)(1)), by 
     striking ``section 1111(b)(8)'' and inserting ``section 
     1111(b)(11)''; and
       (6) in section 1119(h)(3) (20 U.S.C. 6320(h)(3)), by 
     striking ``section 1116(d)(6)'' and inserting ``section 
     1116(d)(9)''.

     SEC. 103. COMPREHENSIVE SCHOOL REFORM.

       Title I of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6301 et seq.) is amended--
       (1) by redesignating part F as part G; and
       (2) by inserting after part E the following:

                 ``PART F--COMPREHENSIVE SCHOOL REFORM

     ``SEC. 1551. PURPOSE.

       ``The purpose of this part is to provide financial 
     incentives for schools to develop comprehensive school 
     reforms based upon promising and effective practices and 
     research-based programs that emphasize basic academics and 
     parental involvement so that all children can meet 
     challenging State content and student performance standards.

     ``SEC. 1552. PROGRAM AUTHORIZATION.

       ``(a) Program Authorized.--
       ``(1) In general.--The Secretary may award grants to State 
     educational agencies, from allotments under paragraph (2), to 
     enable the State educational agencies to award subgrants to 
     local educational agencies to carry out the purpose described 
     in section 1551.
       ``(2) Allotments.--
       ``(A) Reservations.--Of the amount appropriated under 
     section 1558 for a fiscal year, the Secretary may reserve--
       ``(i) not more than 1 percent to provide assistance to 
     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 according to 
     their respective needs for assistance under this part; and
       ``(ii) not more than 1 percent to conduct national 
     evaluation activities described in section 1557.
       ``(B) In general.--Of the amount appropriated under section 
     1558 that remains after making the reservation under 
     subparagraph (A) for a fiscal year, the Secretary shall allot 
     to each State for the fiscal year an amount that bears the 
     same ratio to the remainder 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 made 
     available under section 1124 to all States for the preceding 
     fiscal year.
       ``(C) Reallotment.--If a State does not apply for funds 
     under this part, the Secretary shall reallot such funds to 
     other States in proportion to the amount allotted to such 
     other States under subparagraph (B).

     ``SEC. 1553. STATE APPLICATIONS.

       ``(a) In General.--Each State educational agency that 
     desires to receive a grant under this part shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may 
     reasonably require.
       ``(b) Contents.--Each such application shall describe--
       ``(1) the process and selection criteria by which the State 
     educational agency, using expert review, will select local 
     educational agencies to receive subgrants under this part;
       ``(2) how the State educational agency will ensure that 
     only comprehensive school reforms that are based upon 
     promising and effective practices and research-based programs 
     receive funds under this part;
       ``(3) how the State educational agency will disseminate 
     information on comprehensive school reforms that are based 
     upon promising and effective practices and research-based 
     programs;
       ``(4) how the State educational agency will evaluate the 
     implementation of such reforms and measure the extent to 
     which the reforms have resulted in increased student academic 
     performance; and
       ``(5) how the State educational agency will make available 
     technical assistance to a local educational agency in 
     evaluating, developing, and implementing comprehensive school 
     reform.

     ``SEC. 1554. STATE USE OF FUNDS.

       ``(a) In General.--Except as provided in subsection (e), a 
     State educational agency

[[Page S490]]

     that receives a grant under this part shall use the grant 
     funds to award subgrants, on a competitive basis, to local 
     educational agencies (including consortia of local 
     educational agencies) in the State that receive funds under 
     part A.
       ``(b) Subgrant Requirements.--A subgrant to a local 
     educational agency shall be--
       ``(1) 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;
       ``(2) in an amount not less than $50,000 for each 
     participating school; and
       ``(3) renewable for 2 additional 1-year periods after the 
     initial 1-year grant is made, if the participating school is 
     making substantial progress in the implementation of reforms.
       ``(c) Priority.--A State educational agency, in awarding 
     subgrants under this part, shall give priority to local 
     educational agencies that--
       ``(1) plan to use the funds in schools identified for 
     improvement or corrective action under section 1116(c); and
       ``(2) demonstrate a commitment to assist schools with 
     budget allocation, professional development, and other 
     strategies necessary to ensure that comprehensive school 
     reforms are properly implemented and are sustained in the 
     future.
       ``(d) Grant Consideration.--In awarding subgrants under 
     this part, the State educational agency shall take into 
     consideration the equitable distribution of subgrants to 
     different geographic regions within the State, including 
     urban and rural areas, and to schools serving elementary 
     school and secondary school students.
       ``(e) Administrative Costs.--A State educational agency 
     that receives a grant under this part may reserve not more 
     than 5 percent of the grant funds for administrative, 
     evaluation, and technical assistance expenses.
       ``(f) Supplement.--Funds made available under this part 
     shall be used to supplement, and not supplant, any other 
     Federal, State, or local funds that would otherwise be 
     available to carry out the activities assisted under this 
     part.
       ``(g) Reporting.--Each State educational agency that 
     receives a grant under this part shall provide to the 
     Secretary such information as the Secretary may require, 
     including the names of local educational agencies and schools 
     receiving assistance under this part, the amount of the 
     assistance, and a description of the comprehensive school 
     reform model selected and used.

     ``SEC. 1555. LOCAL APPLICATIONS.

       ``(a) In General.--Each local educational agency desiring a 
     subgrant under this part shall submit an application to the 
     State educational agency at such time, in such manner, and 
     containing such information as the State educational agency 
     may reasonably require.
       ``(b) Contents.--Each such application shall--
       ``(1) identify the schools, that are eligible for 
     assistance under part A, that plan to implement a 
     comprehensive school reform program and include the projected 
     costs of such program;
       ``(2) describe the promising and effective practices and 
     research-based programs that such schools will implement;
       ``(3) describe how the local educational agency will 
     provide technical assistance and support for the effective 
     implementation of the promising and effective practices and 
     research-based school reforms selected by such schools; and
       ``(4) describe how the local educational agency will 
     evaluate the implementation of such reforms and measure the 
     results achieved in improving student academic performance.

     ``SEC. 1556. LOCAL USE OF FUNDS.

       ``(a) Use of Funds.--A local educational agency that 
     receives a subgrant under this part shall provide the 
     subgrant funds to schools, that are eligible for assistance 
     under part A and served by the agency, to enable the schools 
     to implement a comprehensive school reform program for--
       ``(1) employing innovative strategies for student learning, 
     teaching, and school management that are based upon promising 
     and effective practices and research-based programs and have 
     been replicated successfully in schools with diverse 
     characteristics;
       ``(2) integrating 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, and professional development into a 
     comprehensive reform plan for schoolwide change designed to 
     enable all students to meet challenging State content and 
     student performance standards and addresses needs identified 
     through a school needs assessment;
       ``(3) providing high quality and continuous teacher and 
     staff professional development;
       ``(4) including measurable goals for student performance;
       ``(5) providing support to teachers, principals, 
     administrators, and other school personnel staff;
       ``(6) including meaningful community and parental 
     involvement initiatives that will strengthen school 
     improvement activities;
       ``(7) using high quality external technical support and 
     assistance from an entity that has experience and expertise 
     in schoolwide reform and improvement, which may include an 
     institution of higher education;
       ``(8) evaluating school reform implementation and student 
     performance; and
       ``(9) identifying other resources, including Federal, 
     State, local, and private resources, that will be used to 
     coordinate services supporting and sustaining the school 
     reform effort.
       ``(b) 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 Secretary, but may develop the school's own comprehensive 
     school reform programs for schoolwide change as described in 
     subsection (a).

     ``SEC. 1557. NATIONAL EVALUATION AND REPORTS.

       ``(a) In General.--The Secretary shall develop a plan for a 
     national evaluation of the programs assisted under this part.
       ``(b) Evaluation.--The national evaluation shall--
       ``(1) evaluate the implementation and results achieved by 
     schools after 3 years of implementing comprehensive school 
     reforms; and
       ``(2) assess the effectiveness of comprehensive school 
     reforms in schools with diverse characteristics.
       ``(c) Reports.--Prior to the completion of the national 
     evaluation, the Secretary shall submit an interim report 
     describing implementation activities for the Comprehensive 
     School Reform Program to the Committee on Education and the 
     Workforce, and the Committee on Appropriations, of the House 
     of Representatives, and the Committee on Health, Education, 
     Labor, and Pensions, and the Committee on Appropriations, of 
     the Senate.

     ``SEC. 1558. AUTHORIZATION OF APPROPRIATIONS.

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

                           TITLE II--TEACHERS

     SEC. 201. STATE APPLICATIONS.

       (a) Contents of State Plan.--Section 2205(b)(2) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6645(b)(2)) is amended--
       (1) by amending subparagraph (N) to read as follows:
       ``(N) set specific annual, quantifiable, and measurable 
     performance goals to increase the percentage of teachers 
     participating in sustained professional development 
     activities, reduce the beginning teacher attrition rate, and 
     reduce the percentage of teachers who are not certified or 
     licensed, and the percentage who are out-of-field 
     teachers;'';
       (2) by redesignating subparagraph (O) as subparagraph (P); 
     and
       (3) by inserting after subparagraph (N) the following:
       ``(O) describe how the State will ensure that all teachers 
     in the State will be fully qualified not later than December 
     1, 2005; and''.
       (b) State and Local Activities.--Part B of title II of the 
     Elementary and Secondary Education Act (20 U.S.C. 6641 et 
     seq.) is amended--
       (1) by redesignating section 2211 as section 2215;
       (2) by inserting after section 2210 the following:

     ``SEC. 2211. LOCAL CONTINUATION OF FUNDING.

       ``(a) Agencies.--If a local educational agency applies for 
     funds from a State under this part for a fourth or subsequent 
     fiscal year, the agency may not receive the funds for that 
     fiscal year unless the State determines that the agency has 
     demonstrated that, in carrying out activities under this part 
     during the past fiscal year, the agency has annual numerical 
     performance objectives consisting of--
       ``(1) improved student performance for all groups 
     identified in section 1111;
       ``(2) an increased percentage of teachers participating in 
     sustained professional development activities;
       ``(3) a reduction in the beginning teacher attrition rate 
     for the agency; and
       ``(4) a reduction in the percentage of teachers who are not 
     certified or licensed, and the percentage who are out-of-
     field teachers, for the agency.
       ``(b) Schools.--If a local educational agency applies for 
     funds under this part on behalf of a school for a fourth or 
     subsequent fiscal year (including applying for funds as part 
     of a partnership), the agency may not receive the funds for 
     the school for that fiscal year unless the State determines 
     that the school has demonstrated that, in carrying out 
     activities under this part during the past fiscal year, the 
     school has met the requirements of paragraphs (1) through (4) 
     of subsection (a).

     ``SEC. 2212. INFORMATION AND NOTICE TO PARENTS.

       ``(a) Parents' Right To Know Information.--
       ``(1) In general.--A local educational agency that receives 
     funds under this title shall provide, on request, in an 
     understandable and uniform format, to any parent of a student 
     attending any school served by the agency, information 
     regarding the professional qualifications of each of the 
     student's classroom teachers.
       ``(2) Contents.--The agency shall provide, at a minimum, 
     information on--

[[Page S491]]

       ``(A) whether the teacher has met State certification or 
     licensing criteria for the academic subjects and grade levels 
     in which the teacher teaches the student;
       ``(B) whether the teacher is teaching with emergency or 
     other provisional credentials, due to which any State 
     certification or licensing criteria have been waived; and
       ``(C) the academic qualifications of the teacher in the 
     academic subjects and grade levels in which the teacher 
     teaches.
       ``(b) Notice.--In addition to providing the information 
     described in subsection (a), if a school that receives funds 
     under this title assigns a student to a teacher who is not a 
     fully qualified teacher or assigns a student, for 2 or more 
     consecutive weeks, to a substitute teacher who is not a fully 
     qualified teacher, the school shall provide notice of the 
     assignment to a parent of the student, not later than 15 
     school days after the assignment.

     ``SEC. 2213. GENERAL ACCOUNTING OFFICE 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 for 
     fiscal years 2001 through 2004.

     ``SEC. 2214. DEFINITION OF FULLY QUALIFIED.

       ``(a) In General.--In this part, the term `fully 
     qualified', used with respect to a teacher, means a teacher 
     who--
       ``(1)(A) has demonstrated the subject matter knowledge, 
     teaching knowledge, and teaching skill necessary to teach 
     effectively in the academic subject in which the teacher 
     teaches, according to the criteria described in subsections 
     (b) and (c); and
       ``(B) is not a teacher for whom State certification or 
     licensing requirements have been waived or who is teaching 
     under an emergency or other provisional credential; or
       ``(2) meets the standards set by the National Board for 
     Professional Teaching Standards.
       ``(b) Elementary School.--For purposes of making the 
     demonstration described in subsection (a)(1), each teacher 
     who teaches elementary school students (other than middle 
     school students) shall, at a minimum--
       ``(1) have State certification (which may include 
     certification obtained through an alternative route) or a 
     State license to teach; and
       ``(2) hold a bachelor's degree and demonstrate the subject 
     matter knowledge, teaching knowledge, and teaching skill 
     required to teach effectively in reading, writing, 
     mathematics, social studies, science, and other elements of a 
     liberal arts education.
       ``(c) Middle School and Secondary School.--For purposes of 
     making the demonstration described in subsection (a)(1), each 
     teacher who teaches middle school students or secondary 
     school students shall, at a minimum--
       ``(1) have State certification (which may include 
     certification obtained through an alternative route) or a 
     State license to teach; and
       ``(2) hold a bachelor's degree or higher degree and 
     demonstrate a high level of competence in all academic 
     subjects in which the teacher teaches through--
       ``(A) achievement of a high level of performance on 
     rigorous academic subject area tests;
       ``(B) completion of an academic major (or courses totaling 
     an equivalent number of credit hours) in each of the academic 
     subjects in which the teacher teaches; or
       ``(C) in the case of teachers hired before the date of 
     enactment of the School Improvement Accountability Act, 
     completion of appropriate coursework for mastery of the 
     academic subjects in which the teacher teaches.''; and
       (3) by amending section 2215 (as so redesignated)--
       (A) in subsection (a)(3), by adding after ``agency'' the 
     following: ``for which at least 40 percent of the students 
     served by the agency are eligible for free or reduced price 
     lunches under the Richard B. Russell National School Lunch 
     Act''; and
       (B) by inserting after subsection (a)(4) the following:
       ``(5) Reporting requirements.--Each institution of higher 
     education receiving assistance under paragraph (1) shall 
     fully comply with all reporting requirements of title II of 
     the Higher Education Act of 1965.''.
       (c) Conforming Amendments.--The Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6301 et seq.) is amended--
       (1) in section 2203(2) (20 U.S.C. 6643(2)), by striking 
     ``section 2211'' and inserting ``section 2215''; and
       (2) in section 2205(c)(2) (20 U.S.C. 6645(c)(2)), by 
     striking ``section 2211'' and inserting ``section 2215''.

                    TITLE III--INNOVATIVE EDUCATION

     SEC. 301. REQUIREMENTS FOR STATE PLANS.

       Part B of title VI of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7331 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 6203. REQUIREMENTS FOR STATE PLANS.

       ``(a) State Plans.--In addition to requirements relating to 
     State applications under this part, the State educational 
     agency for each State desiring a grant under this title shall 
     submit a State plan that meets the requirements of this 
     section to the Secretary at such time, in such manner, and 
     accompanied by such information as the Secretary may require.
       ``(b) Consolidated Plan.--A State plan submitted under 
     subsection (a) may be submitted as part of a consolidated 
     plan under section 14302, and as part of a State application 
     described in section 6202.
       ``(c) Contents.--Each plan submitted under subsection (a) 
     shall--
       ``(1) describe how the funds made available through the 
     grant will be used to increase student academic performance;
       ``(2) describe annual, quantifiable, and measurable 
     performance goals that will be used to measure the impact of 
     those funds on student performance;
       ``(3) describe the methods the State will use to measure 
     the annual impact of programs described in the plan and the 
     extent to which such goals are aligned with State standards;
       ``(4) certify that the State has in place the standards and 
     assessments required under section 1111;
       ``(5) certify that the State educational agency has a 
     system, as required under section 1111, for--
       ``(A) holding each local educational agency and school 
     accountable for adequate yearly progress (as described in 
     section 1111(b)(2));
       ``(B) identifying local educational agencies and schools 
     for improvement and corrective action (as required in 
     sections 1116 and 1117);
       ``(C) assisting local educational agencies and schools that 
     are identified for improvement with the development of 
     improvement plans; and
       ``(D) providing technical assistance, professional 
     development, and other capacity building as needed to get 
     such agencies and schools out of improvement status;
       ``(6) certify that the State educational agency will use 
     the disaggregated results of student assessments required 
     under section 1111(b)(3), 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 each such agency and school is making 
     adequate yearly progress as required under section 
     1111(b)(2);
       ``(7) certify that the State educational agency will take 
     action against a local educational agency that is identified 
     for corrective action and receiving funds under this title;
       ``(8) describe what, if any, State and other non-Federal 
     resources will be provided to local educational agencies and 
     schools served under this title to carry out activities 
     consistent with this title; and
       ``(9) certify that the State educational agency has a 
     system to hold local educational agencies accountable for 
     meeting the annual performance goals required under paragraph 
     (2).
       ``(d) Approval.--The Secretary, using a peer review 
     process, shall approve a State plan submitted under this 
     section if the State plan meets the requirements of this 
     section.
       ``(e) Duration of the Plan.--Each State plan shall remain 
     in effect for the duration of the State's participation under 
     this title.
       ``(f) 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.
       ``(g) Public Review.--Each State educational agency will 
     make publicly available the plan approved under subsection 
     (d).

     ``SEC. 6204. SANCTIONS.

       ``(a) Third Fiscal Year.--If a State receiving grant funds 
     under this title fails to meet performance goals established 
     under section 6203(c)(2) 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 this title.
       ``(b) Fourth Fiscal Year.--If the State fails to meet such 
     performance goals by the end of the fourth fiscal year for 
     which the State receives grant funds under this title, the 
     Secretary shall reduce the total amount the State receives 
     under this title by 20 percent.
       ``(c) Technical Assistance.--The Secretary shall provide 
     technical assistance, at the request of a State subjected to 
     sanctions under subsection (a) or (b).
       ``(d) Local Sanctions.--
       ``(1) In general.--Each State receiving assistance under 
     this title shall develop a system to hold local educational 
     agencies accountable for meeting the adequate yearly progress 
     requirements established under part A of title I and the 
     performance goals established under this title.
       ``(2) Sanctions.--A system developed under paragraph (1) 
     shall include a mechanism for sanctioning local educational 
     agencies for failure to meet such performance goals and 
     adequate yearly progress levels.

     ``SEC. 6205. STATE REPORTS.

       ``Each State educational agency or Chief Executive Officer 
     of a State 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 the public can 
     understand, a report on--
       ``(1) the use of such funds;
       ``(2) the impact of programs conducted with such funds and 
     an assessment of such programs' effectiveness; and
       ``(3) the progress of the State toward attaining the 
     performance goals established

[[Page S492]]

     under section 6203(c)(2), and the extent to which the 
     programs have increased student achievement.

     ``SEC. 6206. STANDARDS; ASSESSMENTS ENHANCEMENT.

       ``Each State educational agency receiving a grant under 
     this title may use such grant funds, consistent with section 
     6201(a)(1)(C), to--
       ``(1) establish high quality, internationally competitive 
     content and student performance standards and strategies that 
     all students will be expected to meet;
       ``(2) provide for the establishment of high quality, 
     rigorous assessments that include multiple measures and 
     demonstrate comprehensive knowledge; or
       ``(3) develop and implement value-added assessments.''.

     SEC. 302. PERFORMANCE OBJECTIVES.

       Title VII of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 7401 et seq.) is amended by inserting after 
     section 7105 the following:

     ``SEC. 7106. PERFORMANCE OBJECTIVES.

       ``(a) In General.--Each State educational agency or local 
     educational agency receiving a grant under this part shall 
     develop annual numerical performance objectives that are age-
     appropriate and developmentally-appropriate with respect to 
     helping limited English proficient students become proficient 
     in English and improve overall academic performance based 
     upon State and local content and performance standards. The 
     objectives shall include incremental percentage increases for 
     each fiscal year a State educational agency or local 
     educational agency receives a grant under this title, 
     including increases from the preceding fiscal year in the 
     number of limited English proficient students demonstrating 
     an increase in performance on annual assessments concerning 
     reading, writing, speaking, and listening comprehension.
       ``(b) Accountability.--Each State educational agency or 
     local educational agency receiving a grant under this title 
     shall be held accountable for meeting the annual numerical 
     performance objectives under this title and the adequate 
     yearly progress levels for limited English proficient 
     students under clauses (ii) and (iv) of section 
     1111(b)(2)(B). Any State educational agency or local 
     educational agency that fails to meet the annual performance 
     objectives shall be subject to sanctions described in section 
     14515.
       ``(c) Parental Notification.--
       ``(1) In general.--Each State educational agency or local 
     educational agency shall notify a parent of a student who is 
     participating in a language instruction educational program 
     under this title, in a manner and form understandable to the 
     parent, including, if necessary and to the extent feasible, 
     in the native language of the parent, 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-appropriate 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 available programs meet 
     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 State and local content and performance standards, 
     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.--Each parent described in 
     paragraph (1) shall also be informed that the parent has the 
     option of declining the enrollment of a student in a language 
     instruction educational program, and shall be given an 
     opportunity to decline such enrollment if the parent so 
     chooses.
       ``(3) 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.''.

     SEC. 303. REPORT CARDS.

       Title XIV of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 8801 et seq.) is amended by adding at the end 
     the following:

                         ``PART I--REPORT CARDS

     ``SEC. 14901. 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 (e), to enable the State, and local educational 
     agencies and schools in 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 (j) 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 of Education, 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 (j) 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 (e) 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) 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 in subsections (e) and (g)(2) for 
     fiscal year 2002; and
       ``(2) not more than 5 percent of the grant funds to carry 
     out activities described in subsections (e) and (g)(2) for 
     fiscal year 2003 and each of the 3 succeeding fiscal years.
       ``(d) 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 (c) 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 served by local educational agencies within the 
     State.
       ``(e) Annual State Report Card.--
       ``(1) Report cards required.--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 card for parents, the general public, teachers, 
     and the Secretary, with respect to all elementary schools and 
     secondary schools within the State.
       ``(2) Required information.--Each State described in 
     paragraph (1), at a minimum, shall include in the annual 
     State report card information regarding--
       ``(A) student performance on statewide assessments for the 
     year for which the annual State report card is prepared 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 for which assessments 
     are required under title I for the year for which the report 
     card is prepared, with proportions in each of the same 3 
     levels in each subject area at the same grade levels in the 
     preceding school year;
       ``(ii) a statement on the most recent 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 each grade, the number of 
     students completing advanced placement courses, annual school 
     dropout rates as calculated by procedures conforming with the 
     National Center for Education Statistics Common Core of Data, 
     and 4-year graduation rates; and
       ``(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.
       ``(3) Student data.--Student data in each report card shall 
     contain disaggregated results for the following categories:
       ``(A) Racial and ethnic groups.
       ``(B) Gender groups.
       ``(C) Economically disadvantaged students, as compared with 
     students who are not economically disadvantaged.
       ``(D) Students with limited English proficiency, as 
     compared with students who are proficient in English.
       ``(E) Migrant status groups.
       ``(F) Students with disabilities, as compared with students 
     who are not disabled.
       ``(4) Optional information.--A State may include in the 
     State annual report card any other information the State 
     determines appropriate to reflect school quality and school 
     achievement, including by grade level information on the 
     following:
       ``(A) Average class size.
       ``(B) School safety, such as the incidence of school 
     violence and drug and alcohol abuse.
       ``(C) The incidence of student suspensions and expulsions.
       ``(D) Student access to technology, including the number of 
     computers for educational purposes, the number of computers 
     per classroom, and the number of computers connected to the 
     Internet.
       ``(E) Parental involvement, as determined by such measures 
     as the extent of parental

[[Page S493]]

     participation in schools, parental involvement activities, 
     and extended learning time programs, such as after-school and 
     summer programs.
       ``(f) Local Educational Agency and School Report Cards.--
       ``(1) In general.--The State shall ensure that each local 
     educational agency, elementary school, and secondary school 
     in the State, collects appropriate data and publishes an 
     annual report card consistent with this subsection.
       ``(2) Required information.--Each local educational agency, 
     elementary school, and secondary school described in 
     paragraph (1), at a minimum, shall include in its annual 
     report card--
       ``(A) the information described in paragraphs (2) and (3) 
     of subsection (e) for each local educational agency and 
     school;
       ``(B) in the case of a local educational agency--
       ``(i) information regarding the number and percentage of 
     schools served by the local educational agency that are 
     identified for school improvement, including schools 
     identified under section 1116;
       ``(ii) information on the most recent 3-year trend in the 
     number and percentage of elementary schools and secondary 
     schools served by the local educational agency that are 
     identified for school improvement; and
       ``(iii) information on how students in the schools served 
     by the local educational agency performed on the statewide 
     assessment compared with students in the State as a whole;
       ``(C) in the case of an elementary school or a secondary 
     school--
       ``(i) information regarding whether the school has been 
     identified for school improvement;
       ``(ii) information on how the school's students performed 
     on the statewide assessment compared with students in schools 
     served by the same local educational agency and with all 
     students in the State; and
       ``(iii) information about the enrollment of students 
     compared with the rated capacity of the schools; and
       ``(D) other appropriate information, regardless of whether 
     the information is included in the annual State report.
       ``(g) Dissemination and Accessibility of Report Cards.--
       ``(1) Report card format.--Annual report cards under this 
     part shall be--
       ``(A) concise; and
       ``(B) presented in a format and manner that parents can 
     understand, including, to the extent practicable, in a 
     language the parents can understand.
       ``(2) State report cards.--State annual report cards under 
     subsection (e) 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.
       ``(3) Local report cards.--Local educational agency report 
     cards under subsection (f) shall be disseminated to all 
     elementary schools and secondary schools served by the local 
     educational agency and to 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.
       ``(4) School report cards.--Elementary school and secondary 
     school report cards under subsection (f) shall be 
     disseminated to 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.
       ``(h) Coordination of State Plan Content.--A State shall 
     include in its plan under part A of title I or part B of 
     title II, an assurance that the State has in effect a policy 
     that meets the requirements of this section.
       ``(i) Privacy.--Information collected under this section 
     shall be collected and disseminated in a manner that protects 
     the privacy of individuals.
       ``(j) 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.

     ``PART J--ADDITIONAL PERFORMANCE AND ACCOUNTABILITY PROVISIONS

     ``SEC. 14911. REWARDING HIGH PERFORMANCE.

       ``(a) State Rewards.--
       ``(1) In general.--From amounts appropriated under 
     subsection (d), the Secretary shall make awards to States 
     that--
       ``(A) for 3 consecutive years have--
       ``(i) exceeded the State performance goals and objectives 
     established for any title under this Act;
       ``(ii) exceeded the adequate yearly progress levels 
     established under section 1111(b)(2);
       ``(iii) significantly narrowed the gaps between minority 
     and nonminority students, and between economically 
     disadvantaged students and students who are not economically 
     disadvantaged;
       ``(iv) raised all students to the proficient standard level 
     prior to 10 years after the date of enactment of the School 
     Improvement Accountability Act; or
       ``(v) significantly increased the percentage of core 
     classes being taught by fully qualified teachers, 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 State 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 funds 
     that are not distributed under subsection (b) to establish 
     demonstration sites with respect to high-performing schools 
     (based upon achievement, or performance levels 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 
     funds that are not used pursuant to subparagraph (A) or (C) 
     and are not distributed under subsection (b) for the purpose 
     of improving the level of performance of all elementary 
     school and secondary school students in the State, based upon 
     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 funds 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 goals and objectives established for any 
     title under this Act;
       ``(ii) exceeded the adequate yearly progress levels 
     established under section 1111(b)(2);
       ``(iii) significantly narrowed the gaps between minority 
     and nonminority students, and between economically 
     disadvantaged students and students who are not economically 
     disadvantaged;
       ``(iv) raised all students enrolled in schools served by 
     the local educational agency to the proficient standard level 
     prior to 10 years from the date of enactment of the School 
     Improvement Accountability Act; or
       ``(v) significantly increased the percentage of core 
     classes being taught by fully qualified teachers, in schools 
     receiving funds under part A of title I;
       ``(B) not later than December 31, 2005, ensure that all 
     teachers teaching in the elementary schools and secondary 
     schools served by the local educational agency are fully 
     qualified; or
       ``(C) have attained consistently high achievement in 
     another area that the State determines appropriate to reward.
       ``(2) School-based performance awards.--A local educational 
     agency shall use funds made available under paragraph (1) for 
     activities described in subsection (c) 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 funds 
     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)(iv);
       ``(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 determines 
     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 
     a student who is below a basic State standard level.''.

     SEC. 304. ADDITIONAL ACCOUNTABILITY PROVISIONS.

       Part E of title XIV of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8891 et seq.) is amended by 
     adding at the end the following:

[[Page S494]]

     ``SEC. 14515. ADDITIONAL ACCOUNTABILITY PROVISIONS.

       ``(a) In General.--Notwithstanding any other provision of 
     this Act, a recipient of funds provided for a fiscal year 
     under part A of title I, part A or C of title III, part A of 
     title IV, part A of title V, or title VII, shall include--
       (1) in the plans or applications required under such part 
     or title--
       (A) the methods the recipient will use to measure the 
     annual impact of each program funded in whole or in part with 
     funds provided under such part or title and, if applicable, 
     the extent to which each such program will increase student 
     academic achievement;
       (B) the annual, quantifiable, and measurable performance 
     goals and objectives for each such program, and the extent to 
     which, if applicable, the program's performance goals and 
     objectives align with State content standards and State 
     student performance standards established under section 
     1111(b)(1)(A); and
       (C) if the recipient is a local educational agency, 
     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 plan or application 
     submitted and that such consultation will continue on a 
     regular basis; and
       ``(2) in the reports required under such part or title, a 
     report for the preceding fiscal year regarding how the plan 
     or application submitted for such fiscal year under such part 
     or title was implemented, the recipient's progress toward 
     attaining the performance goals and objectives identified in 
     the plan or application for such year, and, if applicable, 
     the extent to which programs funded in whole or in part with 
     funds provided under such part or title increased student 
     achievement.
       ``(b) Penalties.--If a recipient of funds under a part or 
     title described in subsection (a) fails to meet the 
     performance goals and objectives of the part or title for 3 
     consecutive fiscal years, the Secretary shall--
       ``(1) withhold not less than 50 percent of the funds made 
     available under the relevant program for administrative 
     expenses for the succeeding fiscal year, and for each 
     consecutive fiscal year until the recipient meets such 
     performance goals and objectives; and
       ``(2) in the case of--
       ``(A) a competitive grant (as determined by the Secretary), 
     consider the recipient ineligible for grants under the part 
     or title until the recipient meets such performance goals and 
     objectives; and
       ``(B) a formula grant (as determined by the Secretary), 
     withhold not less than 20 percent of the total amount of 
     funds provided under title VI for the succeeding fiscal year 
     and each consecutive fiscal year until the recipient meets 
     such goals and objectives.
       ``(c) Other Penalties.--A State that has not met the 
     requirements of subsection (a)(1)(B) with respect to a fiscal 
     year--
       ``(1) shall not be eligible for designation as an Ed-Flex 
     Partnership State under the Education Flexibility Partnership 
     Act of 1999 until the State meets the requirements of 
     subsection (a)(1)(B); and
       ``(2) shall be subject to such other penalties as are 
     provided in this Act for failure to meet the requirements of 
     subsection (a)(1)(B).
       ``(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, for a program shall include 
     the following information in any application or plan required 
     for such program:
       ``(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, where applicable.
       ``(C) If the grant requires dissemination of information or 
     materials, 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) the impact of such use and, if applicable, the 
     extent to which such use increased student academic 
     achievement or contributed to the stated goal of the program.
       ``(2) Requirement.--If no application or plan is required 
     under a program 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), where applicable, assess the 
     magnitude of dissemination described in paragraph (1)(C), 
     and, where applicable, 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 grants, contracts, or cooperative 
     agreements under the program described in paragraph (1) if--
       ``(i) the goals and objectives described in paragraph 
     (1)(B) have not been met;
       ``(ii) where applicable, the dissemination has not been of 
     a magnitude to ensure goals and objectives are being 
     addressed; and
       ``(iii) where applicable, the information or materials 
     produced have not made a significant impact on raising 
     student achievement in places where such information or 
     materials are used.''.
                                 ______
                                 
      By Mrs. BOXER.
  S. 159. A bill to elevate the Environmental Protection Agency to a 
cabinet level department, to redesignate the Environmental Protection 
Agency as the Department of Environmental Protection Affairs, and for 
other purposes; to the Committee on Governmental Affairs.
  Mrs. BOXER. Mr. President, today I am pleased to introduce the 
Department of Environmental Protection Affairs Act of 2001. The bill 
redesignates the Environmental Protection Agency (EPA) as the 
Department of Environmental Protection Affairs and makes the Department 
part of the president's cabinet.
  As most of my colleagues know, President Nixon established EPA in 
1970 as a response, in part, to water too polluted to drink and air too 
dirty to breathe. It had become clear by that time that air, waste and 
water pollution problems did not respect state boundaries, and that 
public health and environmental protections varied widely from state to 
state.
  In the 30 years since its founding, EPA has played a critical role in 
ensuring that all Americans enjoy the same basic level of public health 
and environmental protection.
  The Department of Environmental Protection Affairs Act of 2001 
recognizes that fact. The bill reflects that today most Americans view 
protection of the public health and environment as duties of at least 
equal importance as our national programs for education, energy, 
defense, commerce and agriculture.
  The impact of this bill, however, goes beyond the very important 
symbolic statement it makes.
  First, elevating the EPA to the cabinet will ensure that the 
president is directly involved in setting environmental policies. While 
past presidents have chosen to make the EPA Administrator part of 
cabinet-level discussions, this bill expresses Congress' will that 
environmental protection is given its place among the other national 
issues which occupy the president and his cabinet.
  Second, this bill will ensure that the EPA Administrator is on equal 
footing with her colleagues in the rest of the cabinet. This is 
important because some of the worst polluters in the nation are 
departments of the federal government. For example, Department of 
Defense and Department of Energy facilities are some of the most 
polluted toxic waste sites in the nation.
  EPA must be on equal footing with those departments if it is to 
ensure that the environment is restored and that the public health is 
protected at those sites.
  Third, this bill will strengthen EPA's role in negotiating 
international agreements with foreign nations. Protection of public 
health and the environment has increasingly become an important part of 
foreign relations. Most of the industrialized nations have afforded top 
status to their environmental officials. This bill will afford that 
status to our top environmental official.
  I am hopeful that my House and Senate colleagues can act quickly to 
ensure the passage of this important legislation. I ask unanimous 
consent that the bill be print in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 159

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Department of Environmental 
     Protection Affairs Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) protection of public health and the environment is a 
     mission of at least equal importance to the duties carried 
     out by cabinet-level departments;
       (2) the Federal Government should ensure that all Americans 
     enjoy the same basic level of public health and environmental 
     protection regardless of where they live;
       (3) protection of public health and the environment 
     increasingly involves negotiations with foreign nations, 
     including the

[[Page S495]]

     most highly industrialized nations all of whose top 
     environmental officials have ministerial status; and
       (4) a cabinet-level Department of Environmental Protection 
     Affairs should be established.

     SEC. 3. ESTABLISHMENT OF THE DEPARTMENT OF ENVIRONMENTAL 
                   PROTECTION AFFAIRS.

       (a) Redesignation.--The Environmental Protection Agency is 
     redesignated as the Department of Environmental Protection 
     Affairs (in this Act referred to as the ``Department'') and 
     shall be an executive department in the executive branch of 
     the Government.
       (b) Secretary of Environmental Protection Affairs.--
       (1) In general.--There shall be at the head of the 
     Department a Secretary of Environmental Protection Affairs 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate. The Department shall be 
     administered under the supervision and direction of the 
     Secretary.
       (2) Nondelegation.--The Secretary may not assign duties for 
     or delegate authority for the supervision of the Assistant 
     Secretaries, the General Counsel, or the Inspector General of 
     the Department to any officer of the Department other than 
     the Deputy Secretary.
       (3) Delegations.--Except as described under paragraph (2) 
     of this section and section 4(b)(2), and notwithstanding any 
     other provision of law, the Secretary may delegate any 
     functions including the making of regulations to such 
     officers and employees of the Department as the Secretary may 
     designate, and may authorize such successive redelegations of 
     such functions within the Department as determined to be 
     necessary or appropriate.
       (c) Deputy Secretary.--There shall be in the Department a 
     Deputy Secretary of the Environment, who shall be appointed 
     by the President, by and with the advice and consent of the 
     Senate. The Deputy Secretary shall perform such 
     responsibilities as the Secretary shall prescribe and shall 
     act as the Secretary during the absence or disability of the 
     Secretary or in the event of a vacancy in the Office of 
     Secretary.
       (d) Office of the Secretary.--The Office of the Secretary 
     shall consist of a Secretary and a Deputy Secretary and may 
     include an Executive Secretary and such other executive 
     officers as the Secretary may determine necessary.
       (e) Regional Offices.--The regional offices of the 
     Environmental Protection Agency are redesignated as regional 
     offices of the Department of Environmental Protection 
     Affairs.
       (f) International Responsibilities of the Secretary.--
       (1) In general.--In addition to exercising other 
     international responsibilities under existing provisions of 
     law, the Secretary is--
       (A) encouraged to assist the Secretary of State to carry 
     out his primary responsibilities for coordinating, 
     negotiating, implementing, and participating in international 
     agreements, including participation in international 
     organizations, relevant to environmental protection; and
       (B) authorized and encouraged to--
       (i) conduct research on and apply existing research 
     capabilities to the nature and impacts of international 
     environmental problems and develop responses to such 
     problems; and
       (ii) provide technical and other assistance to foreign 
     countries and international bodies to improve the quality of 
     the environment.
       (2) Consultation.--The Secretary of State shall consult 
     with the Secretary of Environmental Protection Affairs and 
     such other persons as he determines appropriate on such 
     negotiations, implementation, and participation described 
     under paragraph (1)(A).
       (g) Authority of the Secretary Within the Department.--
     Nothing in this Act--
       (1) authorizes the Secretary of Environmental Protection 
     Affairs to require any action by any officer of any executive 
     department or agency other than officers of the Department of 
     Environmental Protection Affairs, except that this paragraph 
     shall not affect any authority provided for by any other 
     provision of law authorizing the Secretary of Environmental 
     Protection Affairs to require any such actions;
       (2) modifies any Federal law that is administered by any 
     executive department or agency; or
       (3) transfers to the Department of Environmental Protection 
     Affairs any authority exercised by any other Federal 
     executive department or agency before the effective date of 
     this Act, except the authority exercised by the Environmental 
     Protection Agency.
       (h) Application to the Department of Environmental 
     Protection Affairs.--This Act applies only to activities of 
     the Department of Environmental Protection Affairs, except 
     where expressly provided otherwise.

     SEC. 4. ASSISTANT SECRETARIES.

       (a) Establishment of Positions.--There shall be in the 
     Department such number of Assistant Secretaries, not to 
     exceed 10, as the Secretary shall determine, each of whom 
     shall be appointed by the President, by and with the advice 
     and consent of the Senate.
       (b) Responsibilities of Assistant Secretaries.--
       (1) In general.--The Secretary shall assign to Assistant 
     Secretaries such responsibilities as the Secretary considers 
     appropriate, including--
       (A) enforcement and compliance monitoring;
       (B) research and development;
       (C) air and radiation;
       (D) water;
       (E) pesticides and toxic substances;
       (F) solid waste;
       (G) hazardous waste;
       (H) hazardous waste cleanup;
       (I) emergency response;
       (J) international affairs;
       (K) policy, planning, and evaluation;
       (L) pollution prevention;
       (M) congressional, intergovernmental, and public affairs; 
     and
       (N) administration and resources management, including 
     financial and budget management, information resources 
     management, procurement and assistance management, and 
     personnel and labor relations.
       (2) Assignment of responsibilities.--The Secretary may 
     assign and modify any responsibilities at his discretion 
     under paragraph (1), except that the Secretary may not modify 
     the responsibilities of any Assistant Secretary without 
     substantial prior written notification of such modification 
     to the appropriate committees of the Senate and the House of 
     Representatives.
       (c) Designation of Responsibilities Before Confirmation.--
     Whenever the President submits the name of an individual to 
     the Senate for confirmation as Assistant Secretary under this 
     section, the President shall state the particular 
     responsibilities of the Department such individual shall 
     exercise upon taking office.
       (d) Continuing Performance of Functions.--On the effective 
     date of this Act, the Administrator and Deputy Administrator 
     of the Environmental Protection Agency shall be redesignated 
     as the Secretary and Deputy Secretary of the Department of 
     Environmental Protection Affairs, Assistant Administrators of 
     the Agency shall be redesignated as Assistant Secretaries of 
     the Department, and the General Counsel and the Inspector 
     General of the Agency shall be redesignated as the General 
     Counsel and the Inspector General of the Department, without 
     renomination or reconfirmation.
       (e) Chief Information Resources Officer.--
       (1) In general.--The Secretary shall designate the 
     Assistant Secretary whose responsibilities include 
     information resource management functions as required by 
     section 3506 of title 44, United States Code, as the Chief 
     Information Resources Officer of the Department.
       (2) Responsibilities.--The Chief Information Resources 
     Officer shall--
       (A) advise the Secretary on information resource management 
     activities of the Department as required by section 3506 of 
     title 44, United States Code;
       (B) develop and maintain an information resources 
     management system for the Department which provides for--
       (i) the conduct of and accountability for any acquisitions 
     made under a delegation of authority under section 111 of the 
     Federal Property and Administrative Services Act of 1949 (40 
     U.S.C. 759);
       (ii) the implementation of all applicable government-wide 
     and Department information policies, principles, standards, 
     and guidelines with respect to information collection, 
     paperwork reduction, privacy and security of records, sharing 
     and dissemination of information, acquisition and use of 
     information technology, and other information resource 
     management functions;
       (iii) the periodic evaluation of and, as needed, the 
     planning and implementation of improvements in the accuracy, 
     completeness, and reliability of data and records contained 
     with Department information systems; and
       (iv) the development and annual revision of a 5-year plan 
     for meeting the Department's information technology needs; 
     and
       (C) report to the Secretary as required under section 3506 
     of title 44, United States Code.

     SEC. 5. DEPUTY ASSISTANT SECRETARIES.

       (a) Establishment of Positions.--There shall be in the 
     Department such number of Deputy Assistant Secretaries as the 
     Secretary may determine.
       (b) Appointments.--Each Deputy Assistant Secretary--
       (1) shall be appointed by the Secretary; and
       (2) shall perform such functions as the Secretary shall 
     prescribe.
       (c) Functions.--Functions assigned to an Assistant 
     Secretary under section 4(b) may be performed by 1 or more 
     Deputy Assistant Secretaries appointed to assist such 
     Assistant Secretary.

     SEC. 6. OFFICE OF THE GENERAL COUNSEL.

       There shall be in the Department, the Office of the General 
     Counsel. There shall be at the head of such office a General 
     Counsel who shall be appointed by the President, by and with 
     advice and consent of the Senate. The General Counsel shall 
     be the chief legal officer of the Department and shall 
     provide legal assistance to the Secretary concerning the 
     programs and policies of the Department.

     SEC. 7. OFFICE OF THE INSPECTOR GENERAL.

       The Office of Inspector General of the Environmental 
     Protection Agency, established in accordance with the 
     Inspector General Act of 1978 (5 U.S.C. App.), is 
     redesignated as the Office of Inspector General of the 
     Department of Environmental Protection Affairs.

     SEC. 8. MISCELLANEOUS EMPLOYMENT RESTRICTIONS.

       Except as otherwise provided in this Act, political 
     affiliation or political qualification may not be taken into 
     account in connection

[[Page S496]]

     with the appointment of any person to any position in the 
     career civil service or in the assignment or advancement of 
     any career civil servant in the Department.

     SEC. 9. ADMINISTRATIVE PROVISIONS.

       (a) Acceptance of Money and Property.--
       (1) In general.--The Secretary may accept and retain money, 
     uncompensated services, and other real and personal property 
     or rights (whether by gift, bequest, devise, or otherwise) 
     for the purpose of carrying out the Department's programs and 
     activities, except that the Secretary shall not endorse any 
     company, product, organization, or service. Gifts, bequests, 
     and devises of money and proceeds from sales of other 
     property received as gifts, bequests, or devises shall be 
     credited in a separate fund in the Treasury of the United 
     States and shall be available for disbursement upon the order 
     of the Secretary.
       (2) Regulations.--The Secretary shall prescribe regulations 
     and guidelines setting forth the criteria the Department 
     shall use in determining whether to accept a gift, bequest, 
     or devise. Such criteria shall take into consideration 
     whether the acceptance of the property would reflect 
     unfavorably upon the Department's or any employee's ability 
     to carry out its responsibilities or official duties in a 
     fair and objective manner, or would compromise the integrity 
     of or the appearance of the integrity of a Government program 
     or any official involved in that program.
       (b) Seal of the Department.--
       (1) In general.--On the effective date of this Act, the 
     seal of the Environmental Protection Agency with appropriate 
     changes shall be the seal of the Department of Environmental 
     Protection Affairs, until such time as the Secretary may 
     cause a seal of office to be made for the Department of 
     Environmental Protection Affairs of such design as the 
     Secretary shall approve.
       (2) Criminal penalty for unauthorized use of seal.--
       (A) In general.--Chapter 33 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 716. Department of Environmental Protection Affairs 
       Seal

       ``(a) Whoever knowingly displays any printed or other 
     likeness of the official seal of the Department of 
     Environmental Protection Affairs, or any facsimile thereof, 
     in, or in connection with, any advertisement, poster, 
     circular, book, pamphlet, or other publication, public 
     meeting, play, motion picture, telecast, or other production, 
     or on any building, monument, or stationery, for the purpose 
     of conveying, or in a manner reasonably calculated to convey, 
     a false impression of sponsorship or approval by the 
     Government of the United States or by any department, agency, 
     or instrumentality thereof, shall be fined not more than $250 
     or imprisoned not more than 6 months, or both.
       ``(b) Whoever, except as authorized under regulations 
     promulgated by the Secretary of Environmental Protection 
     Affairs and published in the Federal Register, knowingly 
     manufactures, reproduces, sells, or purchases for resale, 
     either separately or appended to any article manufactured or 
     sold, any likeness of the official seal of the Department of 
     Environmental Protection Affairs, or any substantial part 
     thereof, except for manufacture or sale of the article for 
     the official use of the Government of the United States, 
     shall be fined not more than $250 or imprisoned not more than 
     6 months, or both.
       ``(c) A violation of subsection (a) or (b) may be enjoined 
     at the suit of the Attorney General of the United States upon 
     complaint by any authorized representative of the Secretary 
     of the Department of Environmental Protection Affairs.''.
       (B) Technical and conforming amendment.--The table of 
     sections for chapter 33 of title 18, United States Code, is 
     amended by adding at the end:

``716. Department of Environmental Protection Affairs Seal.''.

       (c) Acquisition of Copyrights and Patents.--The Secretary 
     is authorized to acquire any of the following described 
     rights if the related property acquired is for use by or for, 
     or useful to, the Department:
       (1) Copyrights, patents, and applications for patents, 
     designs, processes, and manufacturing data.
       (2) Licenses under copyrights, patents, and applications 
     for patents.
       (3) Releases, before suit is brought, for past infringement 
     of patents or copyrights.
       (d) Advisory Committee Standards of Conduct and 
     Compensation.--The Secretary may promulgate regulations, no 
     less stringent than any other applicable provision of law, 
     regarding standards of conduct for members of advisory 
     committees (and consultants to advisory committees), 
     including requirements regarding conflicts of interest or 
     disclosure of past and present financial and employment 
     interests. The Secretary may pay members of advisory 
     committees and others who perform services as authorized 
     under section 3109 of title 5, United States Code, at rates 
     for individuals not to exceed the per diem rate equivalent to 
     the rate for level V of the Executive Schedule under section 
     5316 of title 5, United States Code.

     SEC. 10. INHERENTLY GOVERNMENTAL FUNCTIONS.

       (a) Government Officers and Employees.--
       (1) In general.--Any inherently governmental function of 
     the Department shall be performed only by officers and 
     employees of the United States.
       (2) Definition.--In this section, the term ``inherently 
     governmental function''--
       (A) means any activity which is so intimately related to 
     the public interest as to mandate performance by Government 
     officers and employees; and
       (B) includes--
       (i) activities which require either the exercise of 
     discretion in applying Government authority or the use of 
     value of judgment in making decisions for the Government; and
       (ii) work of a policy, decisionmaking, or managerial nature 
     which is the direct responsibility of Department officials.
       (b) Conflicts of Interest.--
       (1) In general.--The Secretary shall by regulation require 
     any person proposing to enter into a contract, agreement, or 
     other arrangement, whether by competitive bid or negotiation, 
     for the conduct of research, development, evaluation 
     activities, or for advisory and assistance services, to 
     provide the Secretary, before entering into any such 
     contract, agreement, or arrangement, with all relevant 
     information, as determined by the Secretary, bearing on 
     whether that person has a possible conflict of interest with 
     respect to--
       (A) being able to render impartial, technically sound, or 
     objective assistance or advice in light of other activities 
     or relationships with other persons; or
       (B) being given an unfair competitive advantage.
       (2) Subcontractors.--Such person shall ensure, in 
     accordance with regulations prescribed by the Secretary, 
     compliance with this section by subcontractors of such person 
     who are engaged to perform similar services.
       (c) Require Affirmative Finding; Conflicts of Interest 
     Which Cannot Be Avoided; Mitigation of Conflicts.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     may not enter into any such contract, agreement, or 
     arrangement, unless he affirmatively finds, after evaluating 
     all such information and any other relevant information 
     otherwise available to him, either that--
       (A) there is little or no likelihood that a conflict of 
     interest would exist; or
       (B) that such conflict has been avoided after appropriate 
     conditions have been included in such contract, agreement, or 
     arrangement.
       (2) Mitigation of conflicts.--If the Secretary determines 
     that such conflict of interest exists and that such conflict 
     of interest cannot be avoided by including appropriate 
     conditions therein, the Secretary may enter into such 
     contract, agreement, or arrangement, if he--
       (A) determines that it is in the best interests of the 
     United States to do so; and
       (B) includes appropriate conditions in such contract, 
     agreement, or arrangement to mitigate such conflict.
       (d) Public Notice Regarding Conflicts of Interest.--The 
     Secretary shall promulgate regulations which require public 
     notice to be given whenever the Secretary determines that the 
     award of a contract, agreement, or arrangement may result in 
     a conflict of interest which cannot be avoided by including 
     appropriate conditions therein.
       (e) Disclaimer.--Nothing in this section shall preclude the 
     Department from promulgating regulations to monitor potential 
     conflicts after the contract award.
       (f) Rules.--Not later than 60 days after the effective date 
     of this Act, the Secretary shall publish rules for the 
     implementation of this section.
       (g) Central File.--The Department shall maintain a central 
     file regarding all cases when a public notice is issued. 
     Other information required under this section shall also be 
     compiled. Access to this information shall be controlled to 
     safeguard any proprietary information.
       (h) Definitions.--In this section, the term ``advisory and 
     assistance services'' includes--
       (1) management and professional support services;
       (2) the conduct of studies, analyses, and evaluations; and
       (3) engineering and technical services, excluding routine 
     technical services.

     SEC. 11. REFERENCES.

       Reference in any other Federal law, Executive order, rule, 
     regulation, or delegation of authority, or any document of or 
     pertaining to--
       (1) the Administrator of the Environmental Protection 
     Agency shall be deemed to refer to the Secretary of 
     Environmental Protection Affairs;
       (2) the Environmental Protection Agency shall be deemed to 
     refer to the Department of Environmental Protection Affairs;
       (3) the Deputy Administrator of the Environmental 
     Protection Agency shall be deemed to refer to the Deputy 
     Secretary of Environmental Protection Affairs; or
       (4) any Assistant Administrator of the Environmental 
     Protection Agency shall be deemed to refer to an Assistant 
     Secretary of the Department of Environmental Protection 
     Affairs.

     SEC. 12. SAVINGS PROVISIONS.

       (a) Continuing Effect of Legal Documents.--All orders, 
     determinations, rules, regulations, permits, agreements, 
     grants, contracts, certificates, licenses, registrations, 
     privileges, and other administrative actions--
       (1) which have been issued, made, granted, or allowed to 
     become effective by the President, by the Administrator of 
     the Environmental Protection Agency, or by a court of

[[Page S497]]

     competent jurisdiction, in the performance of functions of 
     the Administrator or the Environmental Protection Agency, and
       (2) which are in effect at the time this Act takes effect, 
     or were final before the effective date of this Act and are 
     to become effective on or after the effective date of this 
     Act;

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, the Secretary of 
     Environmental Protection Affairs, or other authorized 
     official, a court of competent jurisdiction, or by operation 
     of law.
       (b) Proceedings Not Affected.--This Act shall not affect 
     any proceedings or any application for any license, permit, 
     certificate, or financial assistance pending before the 
     Environmental Protection Agency at the time this Act takes 
     effect, but such proceedings and applications shall be 
     continued. Orders shall be issued in such proceedings, 
     appeals shall be taken therefrom, and payments shall be made 
     pursuant to such orders, as if this Act had not been enacted, 
     and orders issued in any such proceedings shall continue in 
     effect until modified, terminated, superseded, or revoked by 
     a duly authorized official, by a court of competent 
     jurisdiction, or by operation of law. Nothing in this 
     subsection shall be deemed to prohibit the discontinuance or 
     modification of any such proceeding under the same terms and 
     conditions and to the same extent that such proceeding could 
     have been discontinued or modified if this Act had not been 
     enacted.
       (c) Suits Not Affected.--This Act shall not affect suits 
     commenced before the date this Act takes effect, and in all 
     such suits, proceedings shall be had, appeals taken, and 
     judgments rendered in the same manner and with the same 
     effect as if this Act had not been enacted.
       (d) Nonabatement of Actions.--No suit, action, or other 
     proceeding commenced by or against the Environmental 
     Protection Agency, or by or against any individual in the 
     official capacity of such individual as an officer of the 
     Environmental Protection Agency, shall abate by reason of the 
     enactment of this Act.
       (e) Administrative Actions Relating To Promulgation of 
     Regulations.--Any administrative action relating to the 
     preparation or promulgation of a regulation by the 
     Environmental Protection Agency may be continued by the 
     Department with the same effect as if this Act had not been 
     enacted.
       (f) Property and Resources.--The contracts, liabilities, 
     records, property, and other assets and interests of the 
     Environmental Protection Agency shall, after the effective 
     date of this Act, be considered to be the contracts, 
     liabilities, records, property, and other assets and 
     interests of the Department.
       (g) Savings.--The Department of Environmental Protection 
     Affairs and its officers, employees, and agents shall have 
     all the powers and authorities of the Environmental 
     Protection Agency.

     SEC. 13. CONFORMING AMENDMENTS.

       (a) Presidential Succession.--Section 19(d)(1) of title 3, 
     United States Code, is amended by inserting before the period 
     at the end the following: ``, Secretary of Environmental 
     Protection Affairs''.
       (b) Definition of Department, Civil Service Laws.--Section 
     101 of title 5, United States Code, is amended by adding at 
     the end the following: ``The Department of Environmental 
     Protection Affairs''.
       (c) Compensation, Level I.--Section 5312 of title 5, United 
     States Code, is amended by adding at the end the following: 
     ``Secretary of Environmental Protection Affairs''.
       (d) Compensation, Level II.--Section 5313 of title 5, 
     United States Code, is amended by striking ``Administrator of 
     Environmental Protection Agency'' and inserting ``Deputy 
     Secretary of Environmental Protection Affairs''.
       (e) Compensation, Level IV.--Section 5315 of title 5, 
     United States Code, is amended--
       (1) by striking ``Inspector General, Environmental 
     Protection Agency'' and inserting ``Inspector General, 
     Department of Environmental Protection Affairs''; and
       (2) by striking each reference to an Assistant 
     Administrator of the Environmental Protection Agency and by 
     adding at the end the following:
       ``Assistant Secretaries, Department of Environmental 
     Protection Affairs (10).
       ``General Counsel, Department of Environmental Protection 
     Affairs.''.
       (f) Inspector General Act.--The Inspector General Act of 
     1978 (5 U.S.C. App.) is amended--
       (1) in section 2(1)--
       (A) by inserting ``the Department of Environmental 
     Protection Affairs,'' after ``Veterans Affairs,''; and
       (B) by striking ``The Environmental Protection Agency,'';
       (2) in section 11(1) by striking ``or Veterans Affairs'' 
     and inserting ``Veterans Affairs, or Environmental Protection 
     Affairs,''; and
       (3) in section 11(2) by striking ``or Veterans Affairs'' 
     and inserting ``Veterans Affairs, or Environmental Protection 
     Affairs,''.

     SEC. 14. ADDITIONAL CONFORMING AMENDMENTS.

       After consultation with the Committee on Governmental 
     Affairs and the Committee on Environment and Public Works and 
     other appropriate committees of the United States Senate and 
     the appropriate committees of the House of Representatives, 
     the Secretary of the Environment shall prepare and submit to 
     Congress proposed legislation containing technical and 
     conforming amendments to the United States Code, and to other 
     provisions of law, to reflect the changes made by this Act. 
     Such legislation shall be submitted not later than 6 months 
     after the effective date of this Act.

     SEC. 15. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on such date during the 6-month period beginning on 
     the date of enactment, as the President may direct in an 
     Executive order. If the President fails to issue an Executive 
     order for the purpose of this section, this Act and such 
     amendments shall take effect 6 months after the date of 
     enactment of this Act.
                                 ______
                                 
      By Mrs. BOXER:
  S. 160. A bill to provide assistance to States to expand and 
establish drug abuse treatment programs to enable such programs to 
provide services to individuals who voluntarily seek treatment for drug 
abuse; to the Committee on Health, Education, Labor, and Pensions.
  Mrs. BOXER. Mr. President, today I am introducing the Drug Abuse 
Treatment on Demand Assistance Act to help ensure that substance abuse 
treatment is available to all substance abusers who seek it.
  According to the Department of Health and Human Services, each year 
drug and alcohol related abuse kills more than 120,000 Americans. In 
1999, an estimated 14.8 million Americans were illicit drug users, with 
nearly 5 million of them addicted to drugs.
  Drugs and alcohol abuse costs taxpayers nearly $276 billion annually 
in preventable health care costs, extra law enforcement, auto crashes, 
crime and lost productivity.
  In his final report before stepping down as America's Drug Czar, 
General Barry McCaffrey outlined the prescription for solving America's 
drug problem: ``prevention coupled with treatment accompanied by 
research.'' And drug treatment is now one of the goals of the National 
Drug Control Strategy.
  To meet that goal, however, will require additional investment. 
Through the Substance Abuse Mental Health Services Administration 
(SAMHSA), the federal government currently provides over $2 billion to 
states and local entities for drug treatment programs, and total 
federal spending in this area is just over $3 billion. But, fewer than 
half of America's nearly 5 million substance abusers are receiving 
treatment for their addiction.
  While some substance abusers are not seeking treatment, many are--and 
are being turned away. In California, for example, 60 percent of all 
facilities that maintain a waiting list have an average of 23 people on 
their list on any given day. Nationwide, an estimated 2.7 million 
substance abusers are in need of treatment.
  Current treatment on demand programs focus on the specific drug abuse 
needs of the local community. For instance, in San Francisco, 
methamphetamine abuse is especially problematic and continues to be on 
the rise. In other cities, cocaine abuse or marijuana is the drug of 
choice. Treatment programs should be targeted to address these local 
epidemics, but there is a funding shortfall.
  The Drug Abuse Treatment on Demand Assistance Act would more than 
double SAMHSA's funding for drug treatment over five years--to $6 
billion in fiscal year 2006. This is an increase of $600 million each 
year for five years. The additional funding is provided through 
SAMHSA's Center for Substance Abuse Treatment and it provides SAMHSA 
with flexibility to target funds where they are needed most.
  The Drug Abuse Treatment on Demand Assistance Act would also reward 
states that have instituted a policy of providing substance abuse 
treatment to non-violent drug offenders as an alternative to prison, as 
California recently did with the enactment of Proposition 36. The bill 
authorizes $125 million per year for five years to provide matching 
grants to states. These funds could be used to help pay for treatment 
as well as to provide other elements of a comprehensive anti-drug abuse 
program for non-violent offenders, including drug testing and probation 
services.
  Mr. President, recent studies indicate that every additional dollar 
invested in substance abuse treatment saves taxpayers $7.46 in societal 
costs. Clearly, such an investment is very worthwhile, and I urge my 
colleagues to support treatment on demand.




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