[Congressional Record (Bound Edition), Volume 145 (1999), Part 8]
[Senate]
[Pages 11366-11462]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. MIKULSKI (for herself, Mr. Dodd, Mr. Hollings, Mr. 
        Jeffords, Mr. Kennedy, Mrs. Murray, and Mr. Wellstone):
  S. 1142. A bill to protect the right of a member of a health 
maintenance organization to receive continuing care at a facility 
selected by that member, and for other purposes; to the Committee on 
Health, Education, Labor, and Pensions.


             seniors' access to continuing care act of 1999

 Ms. MIKULSKI. Mr. President, I rise today to introduce the 
``Seniors' Access to Continuing Care Act of 1999'', a bill to protect 
seniors' access to treatment in the setting of their choice and to 
ensure that seniors who reside in continuing care communities, and 
nursing and other facilities have the right to return to that facility 
after a hospitalization.
  As our population ages, more and more elderly will become residents 
of various long term care facilities. These include independent living, 
assisted living and nursing facilities, as well as continuing care 
retirement communities (CCRCs), which provide the entire continuum of 
care. In Maryland alone, there are over 12,000 residents in 32 CCRCs 
and 24,000 residents in over 200 licenced nursing facilities.
  More and more individuals and couples are choosing to enter 
continuing care communities because of the community environment they 
provide. CCRC's provide independent living, assisted living and nursing 
care, usually on the same campus--the Continuum of Care. Residents find 
safety, security and peace of mind. They often prepay for the continuum 
of care. Couples can stay together, and if one spouse needs additional 
care, it can be provided right there, where the other spouse can remain 
close by.
  Most individuals entering a nursing facility do so because it is 
medically necessary, because they need a high level of care that they 
can no longer receive in their homes or in a more independent setting, 
such as assisted living. But residents are still able to form 
relationships with other residents and staff and consider the facility 
their ``home''. I have visited many of these facilities and have heard 
from both residents and operators. They have told me about a serious 
and unexpected problem encountered with returning to their facility 
after a hospitalization.
  Hospitalization is traumatic for anyone, but particularly for our 
vulnerable seniors. We know that having comfortable surroundings and 
familiar faces can aid dramatically in the recovery process. So, we 
should do everything we can to make sure that recovery process is not 
hindered.
  Today, more and more seniors are joining managed care plans. This 
trend is likely to accelerate given the expansion of managed care 
choices under the 1997 Balanced Budget Act. As more and more decisions 
are made based on financial considerations, choice often gets lost. 
Currently, a resident of a continuing care retirement community or a 
nursing facility who goes to the hospital has no guarantee that he or 
she will be allowed by the managed care organization (MCO) to return to 
the CCRC or nursing facility for post acute follow up care. The MCO can 
dictate that the resident go to a different facility that is in the MCO 
network for that follow up care, even if the home facility is qualified 
and able to provide the needed care.
  Let me give you a few examples:
  In the fall of 1996, a resident of Applewood Estates in Freehold, New 
Jersey was admitted to the hospital. Upon discharge, her HMO would not 
permit her to return to Applewood and sent her to another facility in 
Jackson. The following year, the same thing happened, but after strong 
protest, the HMO finally relented and permitted her to return to 
Applewood. She should not have had to protest, and many seniors are 
unable to assert themselves.
  A Florida couple in their mid-80's were separated by a distance of 20 
miles after the wife was discharged from a hospital to an HMO-
participating nursing home located on the opposite side of the county. 
This was a hardship for the husband who had difficulty driving and for 
the wife who longed to return to her home, a CCRC. The CCRC had room in 
its skilled nursing facility on campus. Despite pleas from all those 
involved, the HMO would not allow the wife to recuperate in a familiar 
setting, close to her husband and friends. She later died at the HMO 
nursing facility, without the benefit of frequent visits by her husband 
and friends.
  Collington Episcopal Life Care Community, in my home state of 
Maryland, reports ongoing problems with its frail elderly having to 
obtain psychiatric services, including medication monitoring, off 
campus, even though the services are available at Collington--how 
disruptive to good patient care!
  On a brighter note, an Ohio woman's husband was in a nursing 
facility. When she was hospitalized, and then discharged, she was able 
to be admitted to the same nursing facility because of the Ohio law 
that protected that right.
  Seniors coming out of the hospital should not be passed around like a 
baton. Their care should be decided based on what is clinically 
appropriate, NOT what is financially mandated. Why is that important? 
What are the consequences?
  Residents consider their retirement community or long term care 
facility as their home. And being away from home for any reason can be 
very difficult. The trauma of being in unfamiliar surroundings can 
increase recovery time. The staff of the resident's ``home'' facility 
often knows best about the person's chronic care and service needs. 
Being away from ``home'' separates the resident from his or her 
emotional support system. Refusal to allow a resident to return to his 
or her home takes away the person's choice. All of this leads to 
greater recovery time and unnecessary trauma for the patient.
  And should a woman's husband have to hitch a ride or catch a cab in 
order to see his recovering spouse if the facility where they live can 
provide the care? NO. Retirement communities and other long term care 
facilities are not just health care facilities. They provide an entire 
living environment for their residents, in other words, a home. We need 
to protect the choice of our seniors to return to their ``home'' after 
a hospitalization. And that is what my bill does.
  It protects residents of CCRC's and nursing facilities by: enabling 
them to return to their facility after a hospitalization; and requiring 
the resident's insurer or MCO to cover the cost of the care, even if 
the insurer does not have a contract with the resident's facility.
  In order for the resident to return to the facility and have the 
services covered by the insurer or MCO: 1. The service to be provided 
must be a service that the insurer covers; 2. The resident must have 
resided at the facility before hospitalization, have a right to return, 
and choose to return; 3. The facility must have the capacity to provide 
the necessary service and meet applicable licensing and certification 
requirements of the state; 4. The facility must be willing to accept 
substantially similar payment as a facility under contract with the 
insurer or MCO.
  My bill also requires an insurer or MCO to pay for a service to one 
of its

[[Page 11367]]

beneficiaries, without a prior hospital stay, if the service is 
necessary to prevent a hospitalization of the beneficiary and the 
service is provided as an additional benefit. Lastly, the bill requires 
an insurer or MCO to provide coverage to a beneficiary for services 
provided at a facility in which the beneficiary's spouse already 
resides, even if the facility is not under contract with the MCO, 
provided the other requirements are met.
  In conclusion, Mr. President, I am committed to providing a safety 
net for our seniors--this bill is part of that safety net. Seniors 
deserve quality, affordable health care and they deserve choice. This 
bill offers those residing in retirement communities and long term care 
facilities assurance to have their choices respected, to have where 
they reside recognized as their ``home'', and to be permitted to return 
to that ``home'' after a hospitalization. It ensures that spouses can 
be together as long as possible. And it ensures access to care in order 
to PREVENT a hospitalization. I want to thank my cosponsors Senators 
Dodd, Hollings, Jeffords, Kennedy, Murray and Wellstone for their 
support. I urge my colleagues to join me in passing this important 
measure to protect the rights of seniors and their access to continuing 
care.
                                 ______
                                 
      By Mr. VOINOVICH (for himself, Mr. Chafee, Mr. Jeffords, Mr. 
        Moynihan, Mr. Warner, Mrs. Hutchison, Mr. Reid, Mr. Lautenberg, 
        and Mr. Leahy):
  S. 1144. A bill to provide increased flexibility in use of highway 
funding, and for other purposes; to the Committee on Environment and 
Public Works.


                   Surface Transportation Act of 1999

  Mr. VOINOVICH. Mr. President, I am pleased today to introduce the 
Surface Transportation Act of 1999 along with my colleagues, Chairman 
Chafee of the Senate Environment and Public Works Committee, Senators 
Moynihan, Jeffords, Reid, Warner, Hutchison, Reid, Lautenberg and 
Leahy. The purpose of this bill is to provide additional flexibility to 
the States and localities in implementing the Federal transportation 
program.
  Let me briefly describe the three most significant provisions of the 
bill.
  (1) State infrastructure banks--the bill authorizes all 50 states to 
participate in the State Infrastructure Bank (SIB) program. SIBs are 
revolving funds, capitalized with Federal and State contributions, 
which are empowered to make loans and provide other forms of non-grant 
assistance to transportation projects. Before TEA-21 was enacted, 
transferring Federal highway funding to a State Infrastructure Bank was 
an option available to all 50 states, with 39 states actively 
participating. Regrettably, TEA-21 limited the SIB program to just four 
states. This section would restore the program as it existed prior to 
TEA-21.
  The American Association of State Highway and Transportation 
Officials (AASHTO), the National Association of State Treasurers, and 
numerous industry groups, including the American Road & Transportation 
Builders (ARTBA), strongly support legislation giving all states the 
opportunity to participate in the SIB program.
  The availability of SIB financial assistance has attracted additional 
investment. According to the U.S. Department of Transportation, SIBs 
made 21 loans and signed agreements for another 33 loans as of November 
1, 1998. Together, these 54 projects are scheduled to receive SIB loan 
disbursements totaling $408 million to support project investments of 
more than $2.3 billion--resulting in a leverage ratio of about 5.6 to 1 
(total project investment to amount of SIB investment).
  (2) High priority project flexibility--the bill includes a provision 
that allows States the flexibility to advance a ``high priority'' 
project faster than is allowed by TEA-21, which provides the funding 
for high priority projects spread over the six-year life of TEA-21. 
This provision would allow States to accelerate the construction of 
their ``high priority'' projects by borrowing funds from other highway 
funding categories (e.g., NHS, STP, CMAQ). The flexibility is 
particularly important for states who are ready to construct some of 
the high priority projects in the first few years of TEA-21, and 
without this provision, may need to defer completion until the later 
years of TEA-21.
  (3) Funding flexibility for Intercity passenger rail--the bill also 
gives States the option to use their National Highway System, 
Congestion Mitigation and Air Quality funds, and Surface Transportation 
Program funds to fund capital expenses associated with intercity 
passenger rail service, including high-speed rail service. The National 
Governors' Association, has passed a resolution requesting this 
additional flexibility for states to meet their transportation needs. 
In testimony before the committee, the U.S. Conference of Mayors and 
the National Council of State Legislatures also requested this 
additional flexibility.
  In closing, I would like to encourage my colleagues to support this 
bill, especially for members whose states who are supportive of the 
State Infrastructure Bank program, have high priority projects that are 
ready-to-go, or would like the option of using available Federal 
transportation funding to support intercity passenger rail needs in 
their state.
  I encourage my colleagues to support this important legislation. I 
ask that a section by section description of the bill be printed into 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

           Summary of the Surface Transportation Act of 1999

     Summary
       The purpose of this bill is to provide additional 
     flexibility to States and localities in implementing the 
     Federal transportation program. This bill does not affect the 
     funding formula agreed to in TEA 21 or modify the overall 
     level of funding for any program.


                           section by section

     Section 1--Short Title
     Section 2--State Infrastructure Banks
       This section authorizes all 50 states to participate in the 
     State Infrastructure Bank (SIB) program. SIBs are revolving 
     funds, capitalized with Federal and State contributions, 
     which are empowered to make loans and provide other forms of 
     non-grant assistance to transportation projects. Before the 
     Transportation Equity Act for the 21st Century (TEA 21) was 
     enacted, transferring Federal highway funding to a State 
     Infrastructure Bank was an option available to all 50 states, 
     with 39 states actively participating. Regrettably, TEA 21 
     took the program backwards and limited the SIB program to 
     just four states. This section would restore the program as 
     it existed prior to TEA 21. The bill extends thru FY 2003 the 
     SIB program, which was authorized in the National Highway 
     System Designation Act.
       The American Association of State Highway and 
     Transportation Official (AASHTO), the National Association of 
     State Treasurers, and numerous industry groups, including the 
     American Road & Transportation Builders (ARTBA), strongly 
     support legislation giving all states the opportunity to 
     participate in the SIB program. At their annual meeting in 
     November 1998, AASHTO members adopted a resolution supporting 
     expansion of the SIB program.
       Availability of SIB financial assistance has attracted 
     additional investment. According to U.S. DOT, SIBs made 21 
     loans and signed agreements for another 33 loans as of 
     November 1, 1998. Together, these 54 projects are scheduled 
     to receive SIB loan disbursements totaling $408 million to 
     support project investments of more than $2.3 billion--
     resulting in a leverage ratio of about 5.6 to 1 (total 
     project investment to amount of SIB investment).
     Section 3--High Priority Project Flexibility
       Subsection (a) allows States the flexibility to advance a 
     ``high priority'' project faster than is allowed by TEA 21, 
     which provides the funding for high priority projects spread 
     over the six-year life of TEA 21. This provision would allow 
     States to accelerate the construction of their ``high 
     priority'' projects by borrowing funds from other highway 
     funding categories (e.g., NHS, STP, CMAQ). This flexibility 
     is particularly important for states who are ready to 
     construct some of the high priority projects in the first few 
     years of TEA 21, and without this provision may need to defer 
     completion until the later years of TEA 21.
     Section 4--Funding Flexibility and High Speed Rail Corridors
       Subsection (a) gives States the option to use their 
     National Highway System, Congestion Mitigation and Air 
     Quality funds, and Surface Transportation Program funds to 
     fund capital expenses associated with intercity passenger 
     rail service, including high-speed rail service. The National 
     Governors' Association, has passed a resolution requesting 
     this additional flexibility for states to

[[Page 11368]]

     meet their transportation needs. In testimony before the 
     committee, the U.S. Conference of Mayors and the National 
     Council of State Legislatures also requested this additional 
     flexibility.
       Subsection (b) specifies how funds transferred for 
     intercity passenger rail services are to be administered.
     Section 5--Historic Bridges
       This section eliminates a restriction that caps the amount 
     of Federal-aid highway funds that can be spent on a historic 
     bridge to an amount equal to the cost of demolition. The 
     restriction unnecessarily limits States' flexibility to 
     preserve historic bridges, and limits spending on these 
     historic bridges for the enhancements program for alternative 
     transportation uses. A similar provision was included in the 
     Senate-passed version of the reauthorization, but was not 
     considered by the conferees due to time constraints.
     Section 6--Accounting Simplification
       This section makes a minor change to the distribution of 
     the Federal-aid obligation limitation that simplifies 
     accounting for states. Currently, a very small amount of the 
     obligation authority directed to the minimum guarantee 
     program is made available for one-year even though the 
     overwhelming majority is made available for several years. 
     This section would make all obligation authority for this 
     program available as multi-year funding. Therefore, this 
     section eliminates the need to account for the States to plan 
     for the small amount of funding separately.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Inouye, Mr. Sarbanes, Mr. Reid, 
        Mr. Robb, Mr. Akaka, Mr. Schumer, and Mrs. Feinstein):
  S. 1145. A bill to provide for the appointment of addition Federal 
circuit and district judges, and for other purposes; to the Committee 
on the Judiciary.


                   The Federal Judgeship Act of 1999

 Mr. LEAHY. Mr. President, today I am introducing the Federal 
Judgeship Act of 1999. I am pleased that Senators Inouye, Sarbanes, 
Reid, Robb, Akaka, and Schumer are joining me as original cosponsors of 
this measure.
  Our bill creates 69 new judgeships across the country to address the 
increased caseloads of the Federal judiciary. Specifically, our 
legislation would: create 7 additional permanent judgeships and 4 
temporary judgeships for the U.S. Courts of Appeal; create 33 
additional permanent judgeships and 25 temporary judgeships for the 
U.S. District Courts; and convert 10 existing temporary district 
judgeships to permanent positions.
  This bill is based on the recommendations of the Judicial Conference 
of the United States, the nonpartisan policy-making arm of the judicial 
branch. Federal judges across the nation believe that the continuing 
heavy caseload of our courts of appeals and district courts merit these 
additional judges. Indeed, the Chief Justice of the United States in 
his 1998 year-end report of the U.S. Judiciary declared: ``The number 
of cases brought to federal courts is one of the most serious problems 
facing them today.''
  Chief Justice Rehnquist is right. The filings of cases in our Federal 
courts has reached record heights. For instance, criminal case filings 
in Federal courts rose 15 percent in 1998--nearly tripling the 5.2 
percent increase in 1997. The number of criminal cases filed since 1991 
increased 25 percent with the number of criminal defendants rising 21 
percent. In fact, the filings of criminal cases and defendants reached 
their highest levels since the Prohibition Amendment was repealed in 
1933.
  Federal civil caseloads have similarity increased. For the past eight 
years, total civil case filings have increased 22 percent in our 
Federal courts. This increase includes jumps of 145 percent in personal 
injury product liability cases, 112 percent in civil rights filings, 71 
percent in social security cases, 49 percent in copyright, patent and 
trademark filings, and 29 percent prisoner petitions from 1991 to 1998.
  But despite these dramatic increases in case filings, Congress has 
failed to authorize new judgeships since 1990, thus endangering the 
administration of justice in our nation's Federal courts.
  Historically, every six years Congress has reviewed the need for new 
judgeships. In 1984, Congress passed legislation to address the need 
for additional judgeships. Six years later, in 1990, Congress again 
fulfilled its constitutional responsibility and enacted the Federal 
Judgeship Act of 1990 because of a sharply increasing caseload, 
particularly for drug-related crimes. But in the last two Congresses, 
the Republican majority failed to follow this tradition. Two years ago 
the Judicial Conference requested an additional 55 judgeships to 
address the growing backlog. My legislation, based on the Judicial 
Conference's 1997 recommendations, S. 678, the Judicial Judgeship Act 
of 1997, languished in the Judicial Committee without action during 
both sessions of the last Congress.
  It is now nine years since Congress last seriously reexamined the 
caseload of the federal judiciary and the need for more federal judges. 
Congress ignores the needs of the Federal judiciary at the peril of the 
American people. Overworked judges and heavy caseloads slow down the 
judicial process and delay justice. In some cases, justice is in danger 
of being denied because witnesses and evidence are lost due to long 
delays in citizens having their day in court.
  We have the greatest judicial system in the world, the envy of people 
around the globe who are struggling for freedom. It is the independence 
of our third, co-equal branch of government that gives it the ability 
to act fairly and impartially. It is our judiciary that has for so long 
protected our fundamental rights and freedoms and served as a necessary 
check on overreaching by the other two branches, those more susceptible 
to the gusts of the political winds of the moment.
  We are fortunate to have dedicated women and men throughout the 
Federal Judiciary in this country who do a tremendous job under 
difficult circumstances. They are examples of the hard-working public 
servants that make up the federal government. They deserve our respect 
and our support.
  Let us act now to ensure that justice is not delayed or denied for 
anyone. I urge the Senate to enact the Federal Judgeship Act of 1999 
without further delay.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Rockefeller):
  S. 1146. A bill to amend title 38, United States Code, to improve 
access of veterans to emergency medical care in non-Department of 
Veterans Affairs medical facilities; to the Committee on Veterans' 
Affairs.


           the veterans' access to emergency care act of 1999

  Mr. DASCHLE. Mr. President, the American people continue to say they 
want a comprehensive, enforceable Patients' Bill of Rights. Toward that 
goal, several of my Democratic colleagues and I introduced S. 6, the 
Patients' Bill of Rights Act of 1999, earlier this year. That 
legislation, which we first introduced in the 105th Congress, addresses 
the growing concerns among Americans about the quality of care 
delivered by health maintenance organizations. I am disappointed that 
some of my colleagues on the other side of the aisle prevented the 
Senate from considering managed care reform legislation last year. But 
I remain hopeful that the Republican leadership will allow an open and 
honest debate on this important issue this year.
  I am hopeful that my colleagues will also take a moment to listen to 
veterans in this country who are raising legitimate concerns about the 
medical care they receive from the Department of Veterans Affairs (VA). 
Many veterans are understandably concerned that the Administration 
requested approximately $18 billion for VA health care in FY00--almost 
the same amount it requested last year. They fear that if this flat-
lined budget is enacted, the VA would be forced to make significant 
reductions in personnel, health care services and facilities. I share 
their concerns and agree that we simply cannot allow that to happen. On 
the contrary, Congress and the Administration need to work together to 
provide the funds necessary to improve the health care that veterans 
receive.
  Toward that end, and as we prepare to celebrate Memorial Day, I am 
reintroducing the Veterans' Access to Emergency Care Act of 1999. I am 
pleased that Senator Rockefeller, the

[[Page 11369]]

distinguished Ranking Member of the Senate Veterans' Affairs Committee, 
is joining me in this effort. This legislation, which was S. 2619 last 
year, calls for veterans to be reimbursed for emergency care they 
receive at non-VA facilities.
  The problem addressed in the bill stems from the fact that veterans 
who rely on the VA for health care often do not receive reimbursement 
for emergency medical care they receive at non-VA facilities. According 
to the VA, veterans may only be reimbursed by the VA for emergency care 
at a non-VA facility that was not pre-authorized if all of the 
following criteria are met:
  First, care must have been rendered for a medical emergency of such 
nature that any delay would have been life-threatening; second, the VA 
or other federal facilities must not have been feasibly available; and, 
third, the treatment must have been rendered for a service-connected 
disability, a condition associated with a service-connected disability, 
or for any disability of a veteran who has a 100-percent service-
connected disability.
  Many veterans who receive emergency health care at non-VA facilities 
are able to meet the first two criteria. Unless they are 100-percent 
disabled, however, they generally fail to meet the third criterion 
because they have suffered heart attacks or other medical emergencies 
that were unrelated to their service-connected disabilities. 
Considering the enormous costs associated with emergency health care, 
current law has been financially and emotionally devastating to 
countless veterans with limited income and no other health insurance. 
The bottom line is that veterans are forced to pay for emergency care 
out of their own pockets until they can be stabilized and transferred 
to VA facilities.
  During medical emergencies, veterans often do not have a say about 
whether they should be taken to a VA or non-VA medical center. Even 
when they specifically ask to be taken to a VA facility, emergency 
medical personnel often transport them to a nearby hospital instead 
because it is the closest facility. In many emergencies, that is the 
only sound medical decision to make. It is simply unfair to penalize 
veterans for receiving emergency medical care at non-VA facilities. 
Veterans were asked to make enormous sacrifices for this country, and 
we should not turn our backs on them during their time of need.
  There should be no misunderstanding. This is a widespread problem 
that affects countless veterans in South Dakota and throughout the 
country. I would like to cite just three examples of veterans being 
denied reimbursement for emergency care at non-VA facilities in western 
South Dakota.
  The first involves Edward Sanders, who is a World War II veteran from 
Custer, South Dakota. On March 6, 1994, Edward was taken to the 
hospital in Custer because he was suffering chest pains. He was 
monitored for several hours before a doctor at the hospital called the 
VA Medical Center in Hot Springs and indicated that Edward was in need 
of emergency services. Although Edward asked to be taken to a VA 
facility, VA officials advised him to seek care elsewhere. He was then 
transported by ambulance to the Rapid City Regional Hospital where he 
underwent a cardiac catheterization and coronary artery bypass 
grafting. Because the emergency did not meet the criteria I mentioned 
previously, the VA did not reimburse Edward for the care he received at 
Rapid City Regional. His medical bills totaled more than $50,000.
  On May 17, 1997, John Lind suffered a heart attack while he was at 
work. John is a Vietnam veteran exposed to Agent Orange who served his 
country for 14 years until he was discharged in 1981. John lives in 
Rapid City, South Dakota, and he points out that he would have asked to 
be taken to the VA Medical Center in Fort Meade for care, but he was 
semi-conscious, and emergency medical personnel transported him to 
Rapid City Regional. After 4 days in the non-VA facility, John incurred 
nearly $20,000 in medical bills. Although he filed a claim with the VA 
for reimbursement, he was turned down because the emergency was not 
related to his service-connected disability.
  Just over one month later, Delmer Paulson, a veteran from Quinn, 
South Dakota, suffered a heart attack on June 26, 1997. Since he had no 
other health care insurance, he asked to be taken to the VA Medical 
Center in Fort Meade. Again, despite his request, the emergency medical 
personnel transported him to Rapid City Regional. Even though Delmer 
was there for just over a day before being transferred to Fort Meade, 
he was charged with almost a $20,000 medical bill. Again, the VA 
refused to reimburse Delmer for the unauthorized medical care because 
the emergency did not meet VA criteria.
  The Veterans' Access to Emergency Care Act of 1999 would address this 
serious problem. It would authorize the VA to reimburse veterans 
enrolled in the VA health care system for the cost of emergency care or 
services received in non-VA facilities when there is ``a serious threat 
to the life or health of a veteran.'' Rep. Lane Evans introduced 
similar legislation in the House of Representatives earlier this year. 
I am encouraged that the Administration's FY00 budget request includes 
a proposal to allow veterans with service-connected disabilities to be 
reimbursed by the VA for emergency care they receive at non-VA 
facilities. This is a step in the right direction, but I think that all 
veterans enrolled in the VA's health care system--whether or not they 
have a service-connected disability--should be able to receive 
emergency care at non-VA facilities. I look forward to continuing to 
work with Senator Rockefeller and my colleagues on both sides of the 
aisle to ensure that veterans receive the health care they deserve.
  Mr. President, 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. 1146

       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 ``Veterans' Access to 
     Emergency Care Act of 1999''.

     SEC. 2. EMERGENCY HEALTH CARE IN NON-DEPARTMENT OF VETERANS 
                   AFFAIRS FACILITIES FOR ENROLLED VETERANS.

       (a) Definitions.--Section 1701 of title 38, United States 
     Code, is amended--
       (1) in paragraph (6)--
       (A) by striking ``and'' at the end of subparagraph (A);
       (B) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (C) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) emergency care, or reimbursement for such care, as 
     described in sections 1703(a)(3) and 1728(a)(2)(E) of this 
     title.''; and
       (2) by adding at the end the following new paragraph:
       ``(10) The term `emergency medical condition' means a 
     medical condition manifesting itself by acute symptoms of 
     sufficient severity (including severe pain) such that a 
     prudent layperson, who possesses an average knowledge of 
     health and medicine, could reasonably expect the absence of 
     immediate medical attention to result in--
       ``(A) placing the health of the individual (or, with 
     respect to a pregnant woman, the health of the woman or her 
     unborn child) in serious jeopardy;
       ``(B) serious impairment to bodily functions; or
       ``(C) serious dysfunction of any bodily organ or part.''.
       (b) Contract Care.--Section 1703(a)(3) of such title is 
     amended by striking ``medical emergencies'' and all that 
     follows through ``health of a veteran'' and inserting ``an 
     emergency medical condition of a veteran who is enrolled 
     under section 1705 of this title or who is''.
       (c) Reimbursement of Expenses for Emergency Care.--Section 
     1728(a)(2) of such title is amended--
       (1) by striking ``or'' before ``(D)''; and
       (2) by inserting before the semicolon at the end the 
     following: ``, or (E) for any emergency medical condition of 
     a veteran enrolled under section 1705 of this title''.
       (d) Payment Priority.--Section 1705 of such title is 
     amended by adding at the end the following new subsection:
       ``(d) The Secretary shall require in a contract under 
     section 1703(a)(3) of this title, and as a condition of 
     payment under section 1728(a)(2) of this title, that payment 
     by the Secretary for treatment under such contract, or under 
     such section, of a veteran enrolled under this section shall 
     be made only after any payment that may be made with

[[Page 11370]]

     respect to such treatment under part A or part B of the 
     Medicare program and after any payment that may be made with 
     respect to such treatment by a third-party insurance 
     provider.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply with respect to care or services provided on or 
     after the date of the enactment of this Act.

  Mr. ROCKEFELLER. Mr. President, I am pleased to offer my support to 
the Veterans' Access to Emergency Care Act of 1999. This bill will 
authorize VA to cover emergency care at non-Department of Veterans 
Affairs (VA) facilities for those veterans who have enrolled with VA 
for their health care. I join my colleague, Senator Daschle, in 
cosponsoring this valuable initiative and thank him for his leadership.
  Currently, VA is restricted by law from authorizing payment of 
comprehensive emergency care services in non-VA facilities except to 
veterans with special eligibility. Most veterans must rely on other 
insurance or pay out of pocket for emergency services.
  I remind my colleagues that VA provides a standard benefits package 
for all veterans who are enrolled with the VA for their health care. In 
many ways, this is a very generous package, which includes such things 
as pharmaceuticals. Enrolled veterans are, however, missing out on one 
essential part of health care coverage: the standard benefits package 
does not allow for comprehensive emergency care. So, in effect, we are 
asking veterans to choose VA health care, but leaving them out in the 
cold when it comes to emergency care.
  Mr. President, we have left too many veterans out in the cold 
already. When veterans call their VA health care provider in the middle 
of the night, many reach a telephone recording. This recording likely 
urges that veterans who have emergencies dial ``911.'' Veterans who 
call for help are then transported to non-VA facilities. After the 
emergency is over, veterans are presented with huge bills. These are 
bills which VA cannot, in most cases, pay and which are, therefore, 
potentially financially crushing. We cannot abandon these veterans in 
their time of need.
  Let me tell my colleagues about some of the problems that veterans 
face because of the restriction on emergency care. In January of this 
year, a low income, non-service-connected, World War II veteran with a 
history of heart problems, from my State of West Virginia, presented to 
the nearest non-VA hospital with severe chest pain. In an attempt to 
get the veteran admitted to the VA medical center, the private 
physician placed calls to the Clarksburg VA Medical Center, where the 
veteran was enrolled, on three separate occasions, over the course of 
three days. The response was always the same--``no beds available.''
  Ultimately, a different VA medical center, from outside the veteran's 
service area, accepted the patient, and two days later transferred him 
back to the Clarksburg VA Medical Center where he underwent an 
emergency surgical procedure to resolve the problem. By this time, 
however, complications had set in, and the veteran was critically ill.
  The veteran's wife told me that ``no one should have to endure the 
pain and suffering'' they had to endure over a five-day period to get 
the emergency care her husband needed. But in addition to that 
emotional distress, the veteran now also faces a medical bill of almost 
$800 at the private hospital, the net amount due after Medicare paid 
its portion. This is an incredible burden for a veteran and his wife 
whose sole income are their small Social Security checks.
  In another example from my state, in February 1998, a 100 percent 
service-connected veteran with post-traumatic stress disorder suffered 
an acute onset of mid-sternal chest pain, and an ambulance was called. 
The ambulance took him to the nearest hospital, a non-VA facility. 
Staff at the private facility contacted the Clarksburg VA Medical 
Center and was told there were no ICU beds available and advised 
transferring the patient to the Pittsburgh VA Medical Center.
  When contacted, Pittsburgh refused the patient because of the length 
of necessary transport. A call to the Beckley VAMC was also fruitless. 
The doctor was advised by VA staff that the trip to Beckley would be 
``too risky for the three hour ambulance travel.''
  The veteran was kept overnight at the private hospital for 
observation, and then was billed for the care--$900, after Medicare 
paid its share.
  Two more West Virginia cases quickly come to mind involving 100 
percent service-connected combat veterans, both of whom had to turn to 
the private sector in emergency situations.
  One veteran had a heart attack and as I recall, his heart stopped 
twice before the ambulance got him to the closest non-VA hospital. The 
Huntington VA Medical Center was his health care provider and it was 
more than an hour away from the veteran's home. This veteran had 
Medicare, but he was still left with a sizeable medical bill for the 
emergency services that saved his life.
  The other veteran suffered a fall that rendered him unconscious and 
caused considerable physical damage. He also was taken to the closest 
non-VA hospital--and was left with a $4,000 bill after Medicare paid 
its share.
  Both contacted me to complain about the unfairness of these bills. As 
100 percent service-connected veterans, they rely totally on VA for 
their health care. I can assure you that neither of them, nor the other 
two West Virginia veterans I referred to, ever expected to be in the 
situation in which they all suddenly found themselves--strapped with 
large health care bills because they needed emergency treatment in 
life-threatening situations, when they were miles and miles from the 
nearest VA medical center.
  Coverage of emergency care services for all veterans is supported by 
the consortium of veterans services organizations that authored the 
Independent Budget for Fiscal Year 2000--AMVETS, the Disabled American 
Veterans, the Paralyzed Veterans of America, and the Veterans of 
Foreign Wars. The concept is also included in the Administration's FY 
2000 budget request for VA and the Consumer Bill of Rights, which 
President Clinton has directed every federal agency engaged in managing 
or delivering health care to adopt.
  To quote from the Consumer Bill of Rights, ``Consumers have the right 
to access emergency health care services when and where the need 
arises. Health plans should provide payment when a consumer presents to 
an emergency department with acute symptoms of sufficient severity--
including severe pain--such that a 'prudent layperson' could reasonably 
expect the absence of medical attention to result in placing their 
health in serious jeopardy, serious impairment to bodily functions, or 
serious dysfunction of any bodily organ or part.'' This ``prudent 
layperson'' standard is included in the Veterans' Access to Emergency 
Care Services Act of 1999 and is intended to protect both the veteran 
and the VA.
  To my colleagues who would argue that this expansion of benefits is 
something which the VA cannot afford, I would say that denying veterans 
access to care should not be the way to balance our budget. The Budget 
Resolution includes an additional $1.7 billion for VA. I call on the 
appropriators to ensure that this funding makes its way to VA hospitals 
and clinics across the country.
  Truly, approval of the Veterans' Access to Emergency Services Act of 
1999 would ensure appropriate access to emergency medical services. 
Thus, we would be providing our nation's veterans greater continuity of 
care.
  Mr. President, veterans currently have the opportunity to come to VA 
facilities for their care, but they lack coverage for the one of the 
most important health care services. I look forward to working with my 
colleagues on the House and Senate Committees on Veterans' Affairs to 
make this proposal a reality.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. Jeffords, Mr. Kohl, and Mrs. 
        Hutchison):
  S. 1147. A bill to amend the Internal Revenue Code of 1986 to provide 
a credit against tax employers who provide child care assistance for 
dependents of their employees, and for other purposes; to the Committee 
on Finance.

[[Page 11371]]




              worksite child care development act of 1999

  Mr. GRAHAM. Mr. President, I am extremely proud to introduce the 
``Worksite Child Care Development Act of 1999'' with Senators 
Hutchison, Kohl, and Jeffords. This measure will make child care more 
accessible and affordable to the many millions of Americans who find it 
not only important, but necessary, to work.
  This legislation would grant tax credits to employers who assist 
their employees with child care expenses by providing:
  A one-time 50 percent tax credit not to exceed $100,000 for startup 
expenses, including expansion and renovations of an employer-sponsored 
child care facility;
  A 50 percent tax credit for employers not to exceed $25,000 annually 
for the operating costs to maintain a child care facility; and
  A 50 percent tax credit yearly not to exceed $50,000 for this 
employers who provide payments or reimbursements for their employees' 
child care costs.
  Why is this legislation important?
  First, the workplace has changed over the years. In 1947, just over 
one-quarter of all mothers will children between 6 and 17 years of age 
were in the labor force. By 1996, their labor force participation rate 
had tripled.
  Indeed, the Bureau of Labor Statistics reports that 65 percent of all 
women with children under 18 years of age are now working and that the 
growth in the number of working women will continue into the next 
century.
  Second, child care is one of the most pressing social issues of the 
day. It impacts every family, including the poor, the working poor, 
middle class families, and stay-at-home parents.
  Last June, I hosted a Florida statewide summit on child care where 
over 500 residents of my State shared with me their concerns and 
frustration on child care issues.
  They told me that quality child care, when available, is often not 
affordable.
  Those who qualify told me there are often long waiting lists for 
subsidized child care.
  They told me that working parents struggle to find ways to cope with 
the often conflicting time demands of both work and child care.
  They told me that their school-age children are at risk because 
before and after-school supervised care programs are not readily 
available.
  Mr. President, quality child care should be a concern to all 
Americans. The care and nurturing that children receive early in life 
has a profound influence on their future--and their future is our 
future.
  In the 21st century, women will comprise more than 60 percent of all 
new entrants into the labor market. A large proportion of these women 
are expected to be mothers of children under the age of 6.
  The implications for employers are clear. They understand that our 
Nation's work force is changing rapidly and that those employers who 
can help their employees with child care will have a competitive 
advantage. In Florida, for instance, Ryder System's Kids' Corner in 
Miami has enrolled approximately 100 children in a top-notch day care 
program.
  I commend the many corporations in Florida and across the nation that 
have taken the important step of providing child care for its 
employees. Many smaller businesses would like to join them, but do not 
have the resources to offer child care to employees. Our legislation 
would help to lower the obstacle to on-site child care.
  Mr. President, we believe that this legislation will assist 
businesses in providing attractive, cost-effective tools for recruiting 
and retaining employees in a tight labor market.
  We believe that encouraging businesses to help employees care for 
children will make it easier for parents to be more involved in their 
children's education.
  Most of all, Mr. President, we believe that this bill is good for 
employers and families and will go far in addressing the issue of child 
care for working families of America. I urge all of my colleagues to 
support this important piece of legislation.
  Mr. President, I ask unanimous consent that letters of support from 
the Chief Executive Officers of the Ryder Corporation and Bright 
Horizons Corporation be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                  Bright Horizons,


                                             Family Solutions,

                                                      May 6, 1999.
     Hon. Robert Graham,
     U.S. Senator, Hart Senate Office Building, Washington, DC.
       Dear Senator Graham: Thank you for allowing our company the 
     opportunity to review and comment on the Worksite Child Care 
     Development Center Act of 1999. We strongly support this bill 
     and want to do all that we can to support you as the primary 
     sponsor.
       We applaud your strategy of targeting tax credits for small 
     businesses. Your approach makes perfect sense. Experience has 
     shown that employer-supported child care is not as 
     financially feasible for many small businesses. Since the 
     majority of working parents work for small businesses, their 
     needs have not been adequately addressed. We believe that 
     your bill will have far reaching impact by making it possible 
     for a greater number of working parents to benefit from 
     support offered by their employers.
       For your consideration, we respectfully submit comments and 
     suggestions, which we think will strengthen the impact of 
     your bill. I welcome the opportunity to share our experience 
     with you and to discuss these or any other ideas you may 
     have, so please feel free to call me.
       Thank you for your willingness to champion the cause for 
     more and better child care for today's working families. Our 
     company shares this important mission with you. We look 
     forward to supporting you in your efforts to pass this 
     historic legislation.
           All my best,
                                                   Roger H. Brown,
     President.
                                  ____



                                            Ryder System, Inc.

                                        Miami, FL, April 29, 1999.
     Hon. Bob Graham,
     U.S. Senate, Hart Building,
     Washington, DC.
       Dear Bob: I am writing to commend you on your introduction 
     of the Worksite Child Care Development Center Act of 1999. 
     The problem of finding high quality, affordable child care is 
     one of the most difficult challenges faced by the modern 
     American workforce. Companies should be encouraged to provide 
     these services on site--as Ryder has done with great success 
     at our Kids' Corner facility--whenever possible. Your bill 
     will provide incentives for other businesses to do just that. 
     We wish you great success with this important legislation.
           Sincerely,
                                                             Tony.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Kerrey):
  S. 1148. A bill to provide for the Yankton Sioux Tribe and the Santee 
Sioux Tribe of Nebraska certain benefits of the Missouri River Basin 
Pick-Sloan project, and for other purposes; to the Committee on Indian 
Affairs.


  yankton sioux tribe and santee sioux tribe of nebraska development 
                             trust fund act

  Mr. DASCHLE. Mr. President, today I am introducing legislation to 
compensate the Yankton Sioux Tribe of South Dakota and the Santee Sioux 
Tribe of Nebraska for losses the tribes suffered when the Fort Randall 
and Gavins Point dams were constructed on the Missouri River over four 
decades ago.
  As a result of the construction of these dams, more than 3,259 acres 
of land owned by the Yankton Sioux Tribe was flooded or subsequently 
lost to erosion. Approximately 600 acres of land located near the 
Santee village and 400 acres on the Niobrara Island of the Santee Sioux 
Tribe Indian Reservation also was flooded. The flooding of these 
fertile lands struck a significant blow at the economies of these 
tribes, and the tribes have never adequately been compensated for that 
loss. Passage of this legislation will help compensate the tribes for 
their losses by providing the resources necessary to rebuild their 
infrastructure and their economy.
  To appreciate fully the need for this legislation, it is important to 
understand the historic events that preceded its development. The Fort 
Randall and Gavins Point dams were constructed in South Dakota pursuant 
to the Flood Control Act (58 Stat. 887) of 1944. That legislation 
authorized implementation of the Missouri River Basin Pick-Sloan Plan 
for water development and flood control for downstream states.
  The Fort Randall dam, which was an integral part of the Pick-Sloan 
project,

[[Page 11372]]

initially flooded 2,851 acres of tribal land, forcing the relocation 
and resettlement of at least 20 families, including the traditional and 
self-sustaining community of White Swan, one of the four major 
settlement areas on the reservation. On other reservations, such as 
Crow Creek, Lower Brule, Cheyenne River, Standing Rock and Fort 
Berthold, communities affected by the Pick-Sloan dams were relocated to 
higher ground. In contrast, the White Swan community was completely 
dissolved and its residents dispersed to whatever areas they could 
settle and start again.
  The bill I am introducing today is the latest in a series of laws 
that have been enacted in the 1990s to address similar claims by other 
tribes in South Dakota for losses caused by the Pick-Sloan dams. In 
1992, Congress granted the Three Affiliated Tribes of Fort Berthold 
Reservation and the Standing Rock Sioux Tribe compensation for direct 
damages, including lost reservation infrastructure, relocation and 
resettlement expenses, the general rehabilitation of the tribes, and 
for unfulfilled government commitments regarding replacement 
facilities. In 1996 Congress enacted legislation compensating the Crow 
Creek tribe for its losses, while in 1997, legislation was enacted to 
compensate the Lower Brule tribe. The Yankton Sioux Tribe and Santee 
Sioux Tribe have not yet received fair compensation for their losses. 
Their time has come.
  Mr. President, the flooding caused by the Pick-Sloan projects touched 
every aspect of life on the Yankton and Santee Sioux reservations, as 
large portions of their communities were forced to relocate wherever 
they could find shelter. Never were these effects fully considered when 
the federal government was acquiring these lands or designing the Pick-
Sloan projects.
  The Yankton Sioux Tribe and Santee Sioux Tribe of Nebraska 
Development Trust Fund Act represents an important step in our 
continuing effort to compensate fairly the tribes of the Missouri River 
Basin for the sacrifices they made decades ago for the construction of 
the dams. Passage of this legislation not only will right a historic 
wrong, but in doing so it will improve the lives of Native Americans 
living on these reservations.
  It has taken decades for us to recognize the unfulfilled federal 
obligation to compensate the tribes for the effects of the dams. We 
cannot, of course, remake the lost lands that are now covered with 
water and return them to the tribes. We can, however, help provide the 
resources necessary to the tribe to improve the infrastructure on their 
reservations. This, in turn, will enhance opportunities for economic 
development that will benefit all members of the tribe. Now that we 
have reached this stage, the importance of passing this legislation as 
soon as possible cannot be stated too strongly.
  I strongly urge my colleagues to approve this legislation this year. 
Providing compensation to the Yankton Sioux Tribe and the Santee Sioux 
Tribe of Nebraska for past harm inflicted by the federal government is 
long-overdue and any further delay only compounds that harm. 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. 1148

       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 ``Yankton Sioux Tribe and 
     Santee Sioux Tribe of Nebraska Development Trust Fund Act''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) by enacting the Act of December 22, 1944, commonly 
     known as the ``Flood Control Act of 1944'' (58 Stat. 887, 
     chapter 665; 33 U.S.C. 701-1 et seq.) Congress approved the 
     Pick-Sloan Missouri River Basin program (referred to in this 
     section as the ``Pick-Sloan program'')--
       (A) to promote the general economic development of the 
     United States;
       (B) to provide for irrigation above Sioux City, Iowa;
       (C) to protect urban and rural areas from devastating 
     floods of the Missouri River; and
       (D) for other purposes;
       (2) the waters impounded for the Fort Randall and Gavins 
     Point projects of the Pick-Sloan program have inundated the 
     fertile, wooded bottom lands along the Missouri River that 
     constituted the most productive agricultural and pastoral 
     lands of, and the homeland of, the members of the Yankton 
     Sioux Tribe and the Santee Sioux Tribe;
       (3) the Fort Randall project (including the Fort Randall 
     Dam and Reservoir)--
       (A) overlies the western boundary of the Yankton Sioux 
     Tribe Indian Reservation; and
       (B) has caused the erosion of more than 400 acres of prime 
     land on the Yankton Sioux Reservation adjoining the east bank 
     of the Missouri River;
       (4) the Gavins Point project (including the Gavins Point 
     Dam and Reservoir) overlies the eastern boundary of the 
     Santee Sioux Tribe;
       (5) although the Fort Randall and Gavins Point projects are 
     major components of the Pick-Sloan program, and contribute to 
     the economy of the United States by generating a substantial 
     amount of hydropower and impounding a substantial quantity of 
     water, the reservations of the Yankton Sioux Tribe and the 
     Santee Sioux Tribe remain undeveloped;
       (6) the United States Army Corps of Engineers took the 
     Indian lands used for the Fort Randall and Gavins Point 
     projects by condemnation proceedings;
       (7) the Federal Government did not give Yankton Sioux Tribe 
     and the Santee Sioux Tribe an opportunity to receive 
     compensation for direct damages from the Pick-Sloan program, 
     even though the Federal Government gave 5 Indian reservations 
     upstream from the reservations of those Indian tribes such an 
     opportunity;
       (8) the Yankton Sioux Tribe and the Santee Sioux Tribe did 
     not receive just compensation for the taking of productive 
     agricultural Indian lands through the condemnation referred 
     to in paragraph (6);
       (9) the settlement agreement that the United States entered 
     into with the Yankton Sioux Tribe and the Santee Sioux Tribe 
     to provide compensation for the taking by condemnation 
     referred to in paragraph (6) did not take into account the 
     increase in property values over the years between the date 
     of taking and the date of settlement; and
       (10) in addition to the financial compensation provided 
     under the settlement agreements referred to in paragraph 
     (9)--
       (A) the Yankton Sioux Tribe should receive an aggregate 
     amount equal to $34,323,743 for--
       (i) the loss value of 2,851.40 acres of Indian land taken 
     for the Fort Randall Dam and Reservoir of the Pick-Sloan 
     program; and
       (ii) the use value of 408.40 acres of Indian land on the 
     reservation of that Indian tribe that was lost as a result of 
     stream bank erosion that has occurred since 1953; and
       (B) the Santee Sioux Tribe should receive an aggregate 
     amount equal to $8,132,838 for the loss value of--
       (i) 593.10 acres of Indian land located near the Santee 
     village; and
       (ii) 414.12 acres on Niobrara Island of the Santee Sioux 
     Tribe Indian Reservation used for the Gavins Point Dam and 
     Reservoir.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given that term in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)).
       (2) Program.--The term ``Program'' means the power program 
     of the Pick-Sloan Missouri River Basin program, administered 
     by the Western Area Power Administration.
       (3) Santee sioux tribe.--The term ``Santee Sioux Tribe'' 
     means the Santee Sioux Tribe of Nebraska.

     SEC. 4. YANKTON SIOUX TRIBE DEVELOPMENT TRUST FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund to be known as the ``Yankton Sioux 
     Tribe Development Trust Fund'' (referred to in this section 
     as the ``Fund''). The Fund shall consist of any amounts 
     deposited in the Fund under this Act.
       (b) Funding.--Out of any money in the Treasury not 
     otherwise appropriated, the Secretary of the Treasury shall 
     deposit $34,323,743 into the Fund not later than 60 days 
     after the date of enactment of this Act.
       (c) Investments.--The Secretary of the Treasury shall 
     invest the amounts deposited under subsection (b) in 
     interest-bearing obligations of the United States or in 
     obligations guaranteed as to both principal and interest by 
     the United States. The Secretary of the Treasury shall 
     deposit interest resulting from such investments into the 
     Fund.
       (d) Payment of Interest to Yankton Sioux Tribe.--
       (1) Withdrawal of interest.--Beginning at the end of the 
     first fiscal year in which interest is deposited into the 
     Fund, the Secretary of the Treasury shall withdraw the 
     aggregate amount of interest deposited into the Fund for that 
     fiscal year and transfer that amount to the Secretary of the 
     Interior for use in accordance with paragraph (2). Each 
     amount so transferred shall be available without fiscal year 
     limitation.
       (2) Payments to yankton sioux tribe.--
       (A) In general.--The Secretary of the Interior shall use 
     the amounts transferred under paragraph (1) only for the 
     purpose of making payments to the Yankton Sioux

[[Page 11373]]

     Tribe, as such payments are requested by that Indian tribe 
     pursuant to tribal resolution.
       (B) Limitation.--Payments may be made by the Secretary of 
     the Interior under subparagraph (A) only after the Yankton 
     Sioux Tribe has adopted a tribal plan under section 6.
       (C) Use of payments by yankton sioux tribe.--The Yankton 
     Sioux Tribe shall use the payments made under subparagraph 
     (A) only for carrying out projects and programs under the 
     tribal plan prepared under section 6.
       (D) Pledge of future payments.--
       (i) In general.--Subject to clause (ii), the Yankton Sioux 
     Tribe may enter into an agreement under which that Indian 
     tribe pledges future payments under this paragraph as 
     security for a loan or other financial transaction.
       (ii) Limitations.--The Yankton Sioux Tribe--

       (I) may enter into an agreement under clause (i) only in 
     connection with the purchase of land or other capital assets; 
     and
       (II) may not pledge, for any year under an agreement 
     referred to in clause (i), an amount greater than 40 percent 
     of any payment under this paragraph for that year.

       (e) Transfers and Withdrawals.--Except as provided in 
     subsections (c) and (d)(1), the Secretary of the Treasury may 
     not transfer or withdraw any amount deposited under 
     subsection (b).

     SEC. 5. SANTEE SIOUX TRIBE OF NEBRASKA DEVELOPMENT TRUST 
                   FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund to be known as the ``Santee Sioux 
     Tribe of Nebraska Development Trust Fund'' (referred to in 
     this section as the ``Fund''). The Fund shall consist of any 
     amounts deposited in the Fund under this Act.
       (b) Funding.--Out of any money in the Treasury not 
     otherwise appropriated, the Secretary of the Treasury shall 
     deposit $8,132,838 into the Fund not later than 60 days after 
     the date of enactment of this Act.
       (c) Investments.--The Secretary of the Treasury shall 
     invest the amounts deposited under subsection (b) in 
     interest-bearing obligations of the United States or in 
     obligations guaranteed as to both principal and interest by 
     the United States. The Secretary of the Treasury shall 
     deposit interest resulting from such investments into the 
     Fund.
       (d) Payment of Interest to Santee Sioux Tribe.--
       (1) Withdrawal of interest.--Beginning at the end of the 
     first fiscal year in which interest is deposited into the 
     Fund, the Secretary of the Treasury shall withdraw the 
     aggregate amount of interest deposited into the Fund for that 
     fiscal year and transfer that amount to the Secretary of the 
     Interior for use in accordance with paragraph (2). Each 
     amount so transferred shall be available without fiscal year 
     limitation.
       (2) Payments to santee sioux tribe.--
       (A) In general.--The Secretary of the Interior shall use 
     the amounts transferred under paragraph (1) only for the 
     purpose of making payments to the Santee Sioux Tribe, as such 
     payments are requested by that Indian tribe pursuant to 
     tribal resolution.
       (B) Limitation.--Payments may be made by the Secretary of 
     the Interior under subparagraph (A) only after the Santee 
     Sioux Tribe has adopted a tribal plan under section 6.
       (C) Use of payments by santee sioux tribe.--The Santee 
     Sioux Tribe shall use the payments made under subparagraph 
     (A) only for carrying out projects and programs under the 
     tribal plan prepared under section 6.
       (D) Pledge of future payments.--
       (i) In general.--Subject to clause (ii), the Santee Sioux 
     Tribe may enter into an agreement under which that Indian 
     tribe pledges future payments under this paragraph as 
     security for a loan or other financial transaction.
       (ii) Limitations.--The Santee Sioux Tribe--

       (I) may enter into an agreement under clause (i) only in 
     connection with the purchase of land or other capital assets; 
     and
       (II) may not pledge, for any year under an agreement 
     referred to in clause (i), an amount greater than 40 percent 
     of any payment under this paragraph for that year.

       (e) Transfers and Withdrawals.--Except as provided in 
     subsections (c) and (d)(1), the Secretary of the Treasury may 
     not transfer or withdraw any amount deposited under 
     subsection (b).

     SEC. 6. TRIBAL PLANS.

       (a) In General.--Not later than 24 months after the date of 
     enactment of this Act, the tribal council of each of the 
     Yankton Sioux and Santee Sioux Tribes shall prepare a plan 
     for the use of the payments to the tribe under section 4(d) 
     or 5(d) (referred to in this subsection as a ``tribal 
     plan'').
       (b) Contents of Tribal Plan.--Each tribal plan shall 
     provide for the manner in which the tribe covered under the 
     tribal plan shall expend payments to the tribe under 
     subsection (d) to promote--
       (1) economic development;
       (2) infrastructure development;
       (3) the educational, health, recreational, and social 
     welfare objectives of the tribe and its members; or
       (4) any combination of the activities described in 
     paragraphs (1), (2), and (3).
       (c) Tribal Plan Review and Revision.--
       (1) In general.--Each tribal council referred to in 
     subsection (a) shall make available for review and comment by 
     the members of the tribe a copy of the tribal plan for the 
     Indian tribe before the tribal plan becomes final, in 
     accordance with procedures established by the tribal council.
       (2) Updating of tribal plan.--Each tribal council referred 
     to in subsection (a) may, on an annual basis, revise the 
     tribal plan prepared by that tribal council to update the 
     tribal plan. In revising the tribal plan under this 
     paragraph, the tribal council shall provide the members of 
     the tribe opportunity to review and comment on any proposed 
     revision to the tribal plan.

     SEC. 7. ELIGIBILITY OF TRIBE FOR CERTAIN PROGRAMS AND 
                   SERVICES.

       (a) In General.--No payment made to the Yankton Sioux Tribe 
     or Santee Sioux Tribe pursuant to this Act shall result in 
     the reduction or denial of any service or program to which, 
     pursuant to Federal law--
       (1) the Yankton Sioux Tribe or Santee Sioux Tribe is 
     otherwise entitled because of the status of the tribe as a 
     federally recognized Indian tribe; or
       (2) any individual who is a member of a tribe under 
     paragraph (1) is entitled because of the status of the 
     individual as a member of the tribe.
       (b) Exemptions From Taxation.--No payment made pursuant to 
     this Act shall be subject to any Federal or State income tax.
       (c) Power Rates.--No payment made pursuant to this Act 
     shall affect Pick-Sloan Missouri River Basin power rates.

     SEC. 8. STATUTORY CONSTRUCTION.

       Nothing in this Act may be construed as diminishing or 
     affecting any water right of an Indian tribe, except as 
     specifically provided in another provision of this Act, any 
     treaty right that is in effect on the date of enactment of 
     this Act, any authority of the Secretary of the Interior or 
     the head of any other Federal agency under a law in effect on 
     the date of enactment of this Act.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act, including such sums as may 
     be necessary for the administration of the Yankton Sioux 
     Tribe Development Trust Fund under section 4 and the Santee 
     Sioux Tribe of Nebraska Development Trust Fund under section 
     5.

  Mr. KERREY. Mr. President, today, I join with my colleagues to 
introduce the Yankton Sioux Tribe and the Santee Sioux Tribe of 
Nebraska Development Trust Fund Act. This legislation will provide 
compensation to the Yankton and Santee Sioux Tribes for damages 
incurred by the development of the Pick-Sloan Missouri River Basin 
program.
  As a result of the construction of Pick-Sloan development projects on 
tribally-held land adjacent to the Missouri river, Tribes were 
subjected to forced land takings, involuntary resettlement of families, 
and the loss of irreplaceable reservation resources.
  The Santee Sioux Tribe of Nebraska lost approximately 600 acres of 
Indian land located near the Santee village and an additional 400 acres 
on the Nebraska Island of the Santee Sioux Tribe Indian Reservation.
  Congress provided compensation to other Native American Tribes for 
losses caused by the Pick-Sloan projects. However, the Yankton and the 
Santee Sioux Tribes were not provided opportunities to receive 
compensation by Congress. Instead, they received settlements for the 
appraised value of their property through condemnation proceedings in 
U.S. District Court. But these Tribes did not receive rehabilitation 
compensation. As a result, the Yankton and Santee Sioux Tribes are 
entitled to this additional compensation.
  This legislation seeks to utilize revenues from the sale of 
hydropower generated by the Pick-Sloan dams to redress tribal claims 
for land takings. Congress has endorsed this approach on three separate 
occasions by enacting legislation which established compensation for 
several other Tribes adversely impacted by the Pick-Sloan projects.
  We propose to establish trust funds for the Yankton and Santee Sioux 
Tribes from a portion of the revenues of hydropower sales made by the 
Western Areas Power Administration. More specifically, the Santee Sioux 
Tribe of Nebraska would received a yearly payment of interest earned on 
the principal in the trust fund. Our legislation encourages the Santee 
Sioux Tribe to craft an economic development plan for use of the 
interest income. This

[[Page 11374]]

self-governance approach will enable the Santee Sioux Tribe to continue 
to address improving the quality of life of its tribal members.
  This legislation values the importance of redressing tribal claims 
and self-governance for Nebraska Native American Tribes. It will enable 
the Santee Sioux Tribe of Nebraska to address past grievances and look 
forward to investing in its future.
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 1149. A bill to amend the Safe Drinking Water Act to increase 
consumer confidence in safe drinking water and source water 
assessments, and for other purposes; to the Committee on Environment 
and Public Works.


              THE DRINKING WATER RIGHT-TO-KNOW ACT OF 1999

  Mr. LAUTENBERG. Mr. President, I am introducing today the Drinking 
Water Right-To-Know Act of 1999. This legislation is designed to give 
the public the Right to Know about contaminants in their drinking water 
that are unregulated, but still may present a threat to their health.
  Mr. President, when we passed the Safe Drinking Water Act Amendments 
of 1996, I praised the bill because I believed it would enhance both 
the quality of our drinking water and America's confidence in its 
safety. While the bill did not require that states perform every 
measure necessary to protect public health, it provided tremendous 
flexibility and discretion to allow the states to do so.
  I was especially hopeful that in my state--the most densely-populated 
state in the country, a state with an unfortunate legacy of industrial 
pollution, a state in which newspaper articles describing threats to 
drinking water seem to appear every few days--that our state agencies 
would exercise their discretion to be more protective of public health 
than the minimum required under our 1996 bill.
  Mr. President, I am sad to say I have been disappointed. I am sad to 
say that in my state, and probably in some of my colleagues' as well, 
the state agency has clung too closely to the bare minimum 
requirements. A good example of this is in the ``Source Water 
Assessment Plan,'' proposed by the state of New Jersey last November, 
as required by the 1996 law.
  Under the law, the state is required to perform Source Water 
Assessments to identify geographic areas that are sources of public 
drinking water, assess the water systems' susceptibility to 
contamination, and inform the public of the results. The state's Source 
Water Assessment Plan describes the program for carrying out the 
assessments.
  An aggressive Source Water Assessment program is essential if a state 
is going to achieve the goals we had for the 1996 Safe Drinking Water 
Act. Source Water Assessment is the keystone of the program by which 
the state will prevent--not just remediate and treat, but prevent--
contamination of our drinking water resources. Source Water Assessment 
also underpins what I believe will be the most far-reaching provisions 
of the law--those giving the public the Right to Know about potential 
threats to its drinking water.
  Mr. Chairman, there are serious deficiencies in my state's proposed 
Source Water Assessment Plan. These are deficiencies that I fear may 
characterize other states' plans as well.
  First, under the proposed plan, the state will not identify and 
evaluate the threat presented by contaminants unless they are among the 
80 or so specifically regulated under the Safe Drinking Water Act. 
Under its proposed plan, the state might ignore even contaminants known 
to be leaching into drinking water from toxic waste sites. For example, 
the chemical being studied as a possible cause of childhood cancer at 
Toms River, New Jersey would not be evaluated under the state's plan. 
Radium 224, recently discovered in drinking water across my state, 
might not be evaluated under the state's plan until specifically 
regulated. With gaps like that in our information, what do I tell the 
families when they want to know what is in their drinking water?
  In addition, under its proposed plan, the state would not consult the 
public in identifying and evaluating threats to drinking water. This 
exclusion would almost certainly result in exclusion of the detailed 
information known to the watershed groups and other community groups 
which exist across New Jersey and across the country. Also, the state's 
plan to disclose the assessments are vague and imply that only summary 
data would be made available to the public. The public must have 
complete and easy access to assessments for the Right to Know component 
of the drinking water program to be effective.
  The Drinking Water Right-To-Know Act of 1999 will address these 
deficiencies by amending the Safe Drinking Water Act to improve Source 
Water Assessments and Consumer Confidence Reports. First, under my 
bill, when the state performs Source Water Assessments, it will assess 
the threat posed, not just by regulated contaminants, but by certain 
unregulated contaminants believed by EPA and U.S. Geological Survey to 
cause health problems, and contaminants known to be released from local 
pollution sites, such as Superfund sites, other waste sites, and 
factories. The bill will also require the state to identify potential 
contamination of groundwater, even outside the immediate area of the 
well, perform the assessments with full involvement from the public, 
and update the assessments every five years.
  Second, the Drinking Water Right-To-Know Act of 1999 will make 
several improvements to the ``Consumer Confidence Reports'' required 
under the 1996 law to notify the public of water contamination. The 
bill will require monitoring and public notification, not only of 
regulated contaminants, but of significant unregulated contaminants 
identified through the Source Water Assessments, and of sources of 
contamination. The bill will not require local water purveyors to 
monitor for every conceivable contaminant--only those identified by the 
state as posing a threat and having been released by a potentially 
significant source. In addition, the bill will require notification of 
new or sharply-increased contamination within 30 days. The bill will 
also require reporting not just to ``customers,'' but to ``consumers,'' 
such as apartment-dwellers, who do not receive water company bills. 
Finally, the bill will require that consumers be provided information 
on how they can protect themselves from contamination in their drinking 
water.
  Third, the bill will require that testing for the presence of radium 
224 take place within 48 hours of sampling the drinking water, so that 
public water supplies can have an accurate assessment of this rapidly-
decaying radioactive contaminant.
  Mr. President, the public has the Right-to-Know about the full range 
of contaminants they might find in their tap water. The Drinking Water 
Right-To-Know Act of 1999 will guarantee them that right. I urge my 
colleagues to co-sponsor this legislation.
  Thank you, Mr. President. I ask unanimous consent that the text of 
the bill be printed into the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1149

       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 ``Drinking Water Right-to-Know 
     Act of 1999''.

     SEC. 2. RADIUM 224 IN DRINKING WATER.

       Section 1412(b)(13) of the Safe Drinking Water Act (42 
     U.S.C. 300g-1(b)(13)) is amended by adding at the end the 
     following:
       ``(H) Radium 224 in drinking water.--A national primary 
     drinking water regulation for radionuclides promulgated under 
     this paragraph shall require testing drinking water for the 
     presence of radium 224 not later than 48 hours after taking a 
     sample of the drinking water.''.

     SEC. 3. CONSUMER CONFIDENCE REPORTS BY COMMUNITY WATER 
                   SYSTEMS.

       Section 1414(c)(4) of the Safe Drinking Water Act (42 
     U.S.C. 300g-3(c)(4)) is amended--
       (1) in subparagraph (A)--
       (A) by striking ``The Administrator'' and inserting the 
     following:
       ``(i) In general.--The Administrator'';
       (B) in the first sentence--
       (i) by striking ``customer of'' and inserting ``consumer of 
     the drinking water provided by''; and

[[Page 11375]]

       (ii) by inserting before the period at the end the 
     following: ``that includes a report on the level of each 
     contaminant that--

       ``(I) may be difficult to detect in finished water; and
       ``(II) may be present at levels that present a public 
     health concern in finished water;'';

       (C) in the second sentence, by striking ``Such regulations 
     shall provide'' and inserting the following:
       ``(ii) Regulations.--The regulations shall--

       ``(I) provide'';

       (D) by striking ``contaminant. The regulations shall also 
     include'' and inserting ``contaminant;

       ``(II) include'';

       (E) by striking ``water. The regulations shall also 
     provide'' and inserting ``water;

       ``(III) provide'';

       (F) by striking the period at the end of the subparagraph 
     and inserting ``; and''; and
       (G) by adding at the end the following:

       ``(IV) direct public water systems to mail consumer 
     confidence reports to residential consumers and mail consumer 
     confidence reports suitable for posting to customers 
     providing water to non-residential consumers, in addition to 
     other methods provided for by the regulations.'';

       (2) in subparagraph (B), by inserting after clause (vi) the 
     following:
       ``(vii) The requirement that each community water system 
     shall report to consumers of drinking water supplied by that 
     community water system--

       ``(I) any detection of a contaminant described in section 
     1453(a)(2)(D);
       ``(II) any known or potential health effects of each 
     contaminant detected in the drinking water, to the maximum 
     level of specificity practicable, including known or 
     potential health effects of each contaminant on children, 
     pregnant women, and other vulnerable subpopulations, as 
     determined by the Administrator;
       ``(III) known or suspected sources of contaminants detected 
     in the drinking water identified by name and location; and
       ``(IV) information on any health advisory issued for the 
     contaminant, including actions that consumers can take to 
     protect themselves from contamination in the drinking water 
     supplied by the community water system.'';

       (3) in subparagraph (C)--
       (A) in clause (i), by striking ``its customers'' and 
     inserting ``consumers of drinking water provided by the 
     system''; and
       (B) in clause (iii), by striking ``customers of'' and 
     inserting ``consumers of its drinking water'';
       (4) in clause (ii) of the second sentence of subparagraph 
     (D), by striking ``of its customers'' and inserting 
     ``consumer of its drinking water''; and
       (5) by adding at the end the following:
       ``(F) Notice of newly detected contamination with potential 
     to have adverse health effects.--The procedures under 
     subparagraph (D) shall specify that a public water system 
     shall provide written notice to each consumer by mail or 
     direct delivery--
       ``(i) as soon as practicable, but not later than 30 days 
     after the date of discovery of new contamination or a 
     significant increase in contamination (as compared to the 
     level of contamination reported in any previous consumer 
     confidence report) by a regulated contaminant that is above 
     the maximum contaminant level goal for that contaminant; or
       ``(ii) as soon as practicable, but not later than 30 days 
     after the date of the discovery of new contamination or the 
     detection of a significant increase in contamination (as 
     compared to the level of contamination reported in any 
     previous consumer confidence report) by an unregulated 
     contaminant.
       ``(G) Definition of consumer.--In this paragraph, the term 
     `consumer' includes--
       ``(i) a customer of a public water system; and
       ``(ii) the ultimate consumer of the drinking water.''.

     SEC. 4. SOURCE WATER ASSESSMENTS.

       (a) In General.--Section 1453(a)(2) of the Safe Drinking 
     Water Act (42 U.S.C. 300j-13(a)(2)) is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(C) assess the susceptibility of each public water system 
     in the delineated areas to any contaminant that--
       ``(i) is subject to a national primary drinking water 
     regulation promulgated under section 1412;
       ``(ii) is included on a list of unregulated contaminants 
     that is published under section 1412(b)(1)(B);
       ``(iii) is the subject of a health advisory that has been 
     published by the Administrator;
       ``(iv) is monitored under the source water assessment 
     program established under this subsection;
       ``(v) is known or suspected to be from a pollution source, 
     including--

       ``(I) a nonpoint source;
       ``(II) a facility subject to the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601 et seq.); or
       ``(III) a factory or other operating facility that 
     generates, treats, stores, disposes of, or releases a 
     material regulated or reported under--

       ``(aa) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       ``(bb) the Solid Waste Disposal Act (42 U.S.C. 6901 et 
     seq.);
       ``(cc) the Clean Air Act (42 U.S.C. 7401 et seq.); or
       ``(dd) section 313 of the Superfund Amendments and 
     Reauthorization Act of 1986 (42 U.S.C. 11023); or
       ``(vi) is monitored by the United States Geological Survey 
     under the National Water Quality Assessment program;
       ``(D) identify each contaminant described in subparagraph 
     (C) that the State determines presents a threat to public 
     health;
       ``(E) for each assessment under subparagraph (C), require 
     monitoring for contaminants described in subparagraph (C) if 
     the State determines that a contaminant may have been 
     released by a potentially significant source;
       ``(F) identify, with the maximum specificity practicable, 
     known or suspected sources of pollution that may threaten 
     public health;
       ``(G) apply to wellheads, groundwater recharge areas, 
     watersheds, and other assessment areas determined to be 
     appropriate by the Administrator; and
       ``(H) be developed, updated, and implemented in cooperation 
     with members of the general public that are served by each 
     source water assessment area included in the program.''.
       (b) Public Availability.--Section 1453(a)(7) of the Safe 
     Drinking Water Act (42 U.S.C. 300j-13(a)(7)) is amended by 
     inserting ``and all documentation related to the 
     assessments'' after ``assessments''.
       (c) Plans.--Section 1453(a) of the Safe Drinking Water Act 
     (42 U.S.C. 300j-13(a)) is amended by adding at the end the 
     following:
       ``(8) Plans.--
       ``(A) Initial plan.--Not later than 1 year after the date 
     of enactment of this paragraph, the State shall submit to the 
     Administrator the plan of the State for carrying out this 
     subsection.
       ``(B) Updates.--Not later than 5 years after the date of 
     the initial submission of the plan and every 5 years 
     thereafter, the State shall update, and submit to the 
     Administrator, the plan of the State for carrying out this 
     subsection.''.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, Mrs. Feinstein, Mr. Kyl, 
        Mr. Robb, and Mr. Bingaman):
  S. 1150. A bill to amend the Internal Revenue Code of 1986 to more 
accurately codify the depreciable life of semiconductor manufacturing 
equipment; to the Committee on Finance.


           the semiconductor equipment investment act of 1999

  Mr. HATCH. Mr. President, I rise today to introduce the Semiconductor 
Investment Act of 1999. I am joined by Senators Baucus, Feinstein, Kyl, 
Robb, and Bingamin. This bill is designed to help the American 
semiconductor industry compete globally by shortening the depreciable 
life of semiconductor manufacturing equipment from 5 years to 3.
  The U.S. semiconductor industry employs more than 275,000 Americans, 
sells over $67 billion of products annually, and currently controls 55 
percent of the $122 billion world market. Its products form the 
foundation of practically every electronic device used today. Growth in 
this industry translates directly into new employment opportunities for 
American workers and to economic growth for the nation as a whole.
  The American semiconductor industry is a success story because it has 
invested heavily in the most productive, cutting-edge technology 
available, and currently spends 14% of its revenues on research and 
development and 19% on capital investment. Unfortunately, Mr. 
President, our semiconductor industry is threatened.
  While the equipment used to manufacture semiconductors has a useful 
life of only about 3 years, current tax depreciation rules require that 
cost of the equipment be written off over a full 5 years. The 
Semiconductor Investment Act would correct this flaw, Mr. President, by 
allowing equipment used in the manufacture of semiconductors to be 
depreciated over a more appropriate 3-year period. Given the massive 
level of investment in the semiconductor industry, accurate 
depreciation is critical to industry success.
  The key reason for this 3-year depreciation period is that the 
equipment used to make semiconductors grows

[[Page 11376]]

technologically obsolete more quickly than other manufacturing 
equipment. Research indicates that semiconductor manufacturing 
equipment almost completely loses its ability to produce sellable 
products after less than 3 years. Today's 5-year period simply doesn't 
reflect reality. A quicker write-off period would help semiconductor 
manufacturers finance the large investment in equipment they need for 
the next generation of products.
  The National Advisory Committee on Semiconductors reinforced this 
conclusion. Congress founded the committee in 1988, and it consisted of 
Presidential appointees from both the public and private sectors. In 
1992, the committee recommended a 3-year schedule would increase the 
industry's annual capital investment rate by a full 11 percent.
  By comparison, Japan, Taiwan, and Korea employ much more generous 
depreciation schedules for similar equipment, and all three nations 
provide stiff competition for America's semiconductor manufacturers. 
For example, under Japanese law, a company can depreciate up to 88 
percent of its semiconductor equipment cost in the first year, while 
United States law permits a mere 20-percent depreciation over the same 
period. When multinational semiconductor firms are deciding where to 
invest, a depreciation gap this large can be decisive.
  This legislation will help ensure that America's semiconductor 
industry retains its hard-earned preeminence, a preeminence that yields 
abundant opportunities for high-wage, high-skill employment. Mr. 
President, my home State of Utah, provides an outstanding example of 
the industry's job-creating capacity. Thousands of Utahns earn their 
living in the State's flourishing semiconductor industry. Firms such as 
Micron Technology, National Semiconductor, Intel, and Varian have 
reinforced Utah's strong position in high-technology industries. With 
the fair tax treatment this bill brings, all Utahns can look forward to 
a more secure and prosperous future.
  Mr. President, the Semiconductor Investment Act of 1999 will help 
level the playing field between U.S. and foreign semiconductor 
manufacturers, and provides fair tax treatment to an industry that is 
one of the Nation's greatest success stories of recent years. I hope 
that my fellow Senators will join me in supporting this legislation. 
Mr. President, I ask unanimous consent that the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1150

       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 ``Semiconductor Equipment 
     Investment Act of 1999''.

     SEC. 2. 3-YEAR DEPRECIABLE LIFE FOR SEMICONDUCTOR 
                   MANUFACTURING EQUIPMENT.

       (a) In General.--Subparagraph (A) of section 168(e)(3) of 
     the Internal Revenue Code of 1986 (relating to classification 
     of property) is amended by striking ``and'' at the end of 
     clause (ii), by striking the period at the end of clause 
     (iii) and inserting ``, and'', and by adding at the end the 
     following new clause:
       ``(iv) any semiconductor manufacturing equipment.''
       (b) Conforming Amendments.--
       (1) Subparagraph (B) of section 168(e)(3) of such Code is 
     amended--
       (A) by striking clause (ii),
       (B) by redesignating clauses (iii) through (vi) as clauses 
     (ii) through (v), respectively, and
       (C) by striking ``clause (vi)(I)'' in the last sentence and 
     inserting ``clause (v)(I)''.
       (2) Subparagraph (B) of section 168(g)(3) of such Code is 
     amended by striking the items relating to subparagraph 
     (B)(ii) and subparagraph (B)(iii) and inserting the 
     following:

      ``(A)(iv)......................................................3 
      ``(B)(ii)..................................................9.5''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to equipment placed in service after the date of 
     the enactment of this Act.
                                 ______
                                 
      By Mr. THOMPSON (for himself, Mr. Lieberman, Mr. Warner, and Mr. 
        Levin):
  S. 1151. A bill to amend the Office of Federal Procurement Policy Act 
to streamline the application of cost accounting standards; to the 
Committee on Governmental Affairs.


              cost accounting standards amendments of 1999

  Mr. THOMPSON Mr. President, I rise today to introduce a bill on 
behalf of myself as chairman of the Governmental Affairs Committee and 
Senator Lieberman, the Committee's ranking minority member, and 
Senators Warner and Levin, the chairman and ranking minority member of 
the Armed Services Committee. This legislation will benefit the 
procurement process in all agencies across the Federal government.
  In recent years, Congress has enacted two major acquisition reform 
statutes--the Federal Acquisition Streamlining Act of 1994 (FASA) and 
the Clinger-Cohen Act of 1996. These statutes changed the trend in 
government contracting toward simplifying the government's acquisition 
process and eliminating many government-unique requirements. The goal 
of these changes in the government's purchasing processes has been to 
modify or eliminate unnecessary and burdensome legislative mandates, 
increase the use of commercial items to meet government needs, and give 
more discretion to contracting agencies in making their procurement 
decisions.
  Since the early 1900's, the Federal government has required certain 
unique accounting standards or criteria designed to protect it from the 
risk of overpaying for goods and services by directing the manner or 
degree to which Federal contractors apportion costs to their contracts 
with the government. The Cost Accounting Standards (CAS standards) are 
a set of 19 accounting principles developed and maintained by the Cost 
Accounting Standards (CAS) Board, a body created by Congress to develop 
uniform and consistent standards. The CAS standards require government 
contractors to account for their costs on a consistent basis and 
prohibit any shifting of overhead or other costs from commercial 
contracts to government contracts, or from fixed-priced contracts to 
cost-type contracts.
  FASA and the Clinger-Cohen Act took significant steps to exempt 
commercial items from the applicability of the CAS standards. 
Nonetheless, executive agencies, particularly the Department of 
Defense, and others in the public and private sectors continue to 
identify the CAS standards as a continuing barrier to the integration 
of commercial items into the government marketplace. Advocates of 
relaxing the CAS standards argue that they require companies to create 
unique accounting systems to do business with the government in cost-
type contracts. They believe that the added cost of developing the 
required accounting systems has discouraged some commercial companies 
from doing business with the government and led others to set up 
separate assembly lines for government products, substantially 
increasing costs to the government.
  This bill carefully balances the government's need for greater access 
to commercial items, particularly those of nontraditional suppliers, 
with the need for a strong set of CAS standards to protect the 
taxpayers from overpayments to contractors. The bill would modify the 
CAS standards to streamline their applicability, while maintaining the 
applicability of the standards to the vast majority of contract dollars 
that are currently covered. In particular, the bill would raise the 
threshold for coverage under the CAS standards from $25 million to $50 
million; exempt contractors from coverage if they do not have a 
contract in excess of $5 million; and exclude coverage based on firm, 
fixed price contracts awarded on the basis of adequate price 
competition without the submission of certified cost or pricing data.
  The bill also would provide for waivers of the CAS standards by 
Federal agencies in limited circumstances. This would allow contracting 
agencies to handle this contract administration function, in limited 
circumstances, as part of their traditional role in administering 
contracts. Our intent is that waivers would be available for contracts 
in excess of $10 million only in ``exceptional circumstances.'' The 
``exceptional circumstances'' waiver may be used only when a waiver is 
necessary to meet the needs of an agency,

[[Page 11377]]

and i.e., the agency determines that it would not be able to obtain the 
products or services in the absence of a waiver.
  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. 1151

       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 ``Cost Accounting Standards 
     Amendments of 1999''.

     SEC. 2. STREAMLINED APPLICABILITY OF COST ACCOUNTING 
                   STANDARDS.

       (a) Applicability.--Paragraph (2) of section 26(f) of the 
     Office of Federal Procurement Policy Act (41 U.S.C. 
     422(f)(2)) is amended--
       (1) by redesignating subparagraph (C) as subparagraph (D);
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) The cost accounting standards shall not apply to a 
     contractor or subcontractor for a fiscal year (or other one-
     year period used for cost accounting by the contractor or 
     subcontractor) if the total value of all of the contracts and 
     subcontracts covered by the cost accounting standards that 
     were entered into by the contractor or subcontractor, 
     respectively, in the previous fiscal year (or other one-year 
     cost accounting period) was less than $50,000,000.
       ``(C) Subparagraph (A) does not apply to the following 
     contracts or subcontracts for the purpose of determining 
     whether the contractor or subcontractor is subject to the 
     cost accounting standards:
       ``(i) Contracts or subcontracts for the acquisition of 
     commercial items.
       ``(ii) Contracts or subcontracts where the price negotiated 
     is based on prices set by law or regulation.
       ``(iii) Firm, fixed-price contracts or subcontracts awarded 
     on the basis of adequate price competition without submission 
     of certified cost or pricing data.
       ``(iv) Contracts or subcontracts with a value that is less 
     than $5,000,000.''.
       (b) Waiver.--Such section is further amended by adding at 
     the end the following:
       ``(5)(A) The head of an executive agency may waive the 
     applicability of cost accounting standards for a contract or 
     subcontract with a value less than $10,000,000 if that 
     official determines in writing that--
       ``(i) the contractor or subcontractor is primarily engaged 
     in the sale of commercial items; and
       ``(ii) the contractor or subcontractor would not otherwise 
     be subject to the cost accounting standards.
       ``(B) The head of an executive agency may also waive the 
     applicability of cost accounting standards for a contract or 
     subcontract under extraordinary circumstances when necessary 
     to meet the needs of the agency. A determination to waive the 
     applicability of cost accounting standards under this 
     subparagraph shall be set forth in writing and shall include 
     a statement of the circumstances justifying the waiver.
       ``(C) The head of an executive agency may not delegate the 
     authority under subparagraph (A) or (B) to any official in 
     the executive agency below the senior policymaking level in 
     the executive agency.
       ``(D) The Federal Acquisition Regulation shall include the 
     following:
       ``(i) Criteria for selecting an official to be delegated 
     authority to grant waivers under subparagraph (A) or (B).
       ``(ii) The specific circumstances under which such a waiver 
     may be granted.
       ``(E) The head of each executive agency shall report the 
     waivers granted under subparagraphs (A) and (B) for that 
     agency to the Board on an annual basis.''.
       (c) Construction Regarding Certain Not-For-Profit 
     Entities.--The amendments made by this section shall not be 
     construed as modifying or superseding, nor as intended to 
     impair or restrict, the applicability of the cost accounting 
     standards to--
       (1) any educational institution or federally funded 
     research and development center that is associated with an 
     educational institution in accordance with Office of 
     Management and Budget Circular A-21, as in effect on January 
     1, 1999; or
       (2) any contract with a nonprofit entity that provides 
     research and development and related products or services to 
     the Department of Defense.

     SEC. 3. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect 180 days after the date of enactment of this Act.
                                 ______
                                 
      By Ms. SNOWE:
  S. 1152. A bill to amend title 5, United States Code, to ensure that 
coverage of bone mass measurements is provided under the health 
benefits program for Federal employees; to the Committee on 
Governmental Affairs.


   osteoporosis federal employee health benefits standardization act

 Ms. SNOWE. Mr. President, I rise today to reintroduce 
legislation that will standardize coverage for bone mass measurement 
for people at risk for osteoporosis under the Federal Employee Health 
Benefits Program. This legislation is similar to my bill which was 
enacted as part of the Balanced Budget Act to standardize coverage of 
bone mass measurement under Medicare. The bill I reintroduce today 
guarantees the same uniformity of coverage to Federal employees and 
retirees as Congress provided to Medicare beneficiaries two years ago.
  Osteoporosis is a major public health problem affecting 28 million 
Americans, who either have the disease or are at risk due to low bone 
mass; 80 percent of its victims are women. This devastating disease 
causes 1.5 million fractures annually at a cost of $13.8 billion--$38 
million per day--in direct medical expenses. In their lifetime, one in 
two women and one in eight men over the age of 50 will fracture a bone 
due to osteoporosis. Amazingly, a woman's risk of a hip fracture is 
equal to her combined risk of contracting breast, uterine, and ovarian 
cancer.
  Osteoporosis is largely preventable and thousands of fractures could 
be avoided if low bone mass were detected early and treated. Though we 
now have drugs that promise to reduce fractures by 50 percent and new 
drugs have been proven to actually rebuild bone mass, a bone mass 
measurement is the only way to diagnose osteoporosis and determine 
one's risk for future fractures. And we have learned that there are 
some prominent risk facts: age, gender, race, a family history of bone 
fractures, early menopause, risky health behaviors such as smoking and 
excessive alcohol consumption, and some medications all have been 
identified as contributing factors to bone loss. But identification of 
risk factors alone cannot predict how much bone a person has and how 
strong bone is--experts estimate that without bone density tests, up to 
40 percent of women with low bone mass could be missed.
  Unfortunately, coverage of bone density tests under the Federal 
Employee Health Benefit Program (FEHBP) is inconsistent. Instead of a 
comprehensive national coverage policy, FEHBP leaves it to each of the 
nearly 500 participating plans to decide who is eligible to receive a 
bone mass measurement and what constitutes medical necessity. Many 
plans have no specific rules to guide reimbursement and cover the tests 
on a case-by-case basis. Some plans refuse to provide consumers with 
information indicating when the plan covers the test and when it does 
not and some plans cover the test only for people who already have 
osteoporosis.
  Mr. President, we owe the people who serve our Government more than 
that. We know that osteoporosis is highly preventable, but only if it 
is discovered in time. There is simply no substitute for early 
detection. My legislation standardizes coverage for bone mass 
measurement under the FEHBP and I urge my colleagues to support this 
legislation.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. Daschle, Mr. Dorgan, Mr. Baucus, 
        Mr. Conrad, Mr. Wellstone, Mr. Johnson, Mr. Wyden, Mr. Reid, 
        Mr. Kerry, Mr. Rockefeller, and Mrs. Murray):
  S. 1153. A bill to establish the Office of Rural Advocacy in the 
Federal Communications Commission, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.


            rural telecommunications improvement act of 1999

  Mr. HARKIN. Mr. President, today I am introducing important 
legislation to assist rural America, the Rural Telecommunications 
Improvement Act of 1999. I am pleased to be joined in this effort by 
our distinguished Democratic leader, Senator Daschle, as well as 
Senators Dorgan, Baucus, Conrad, Wellstone, Johnson, Wyden, Reid, 
Kerrey, Rockefeller and Murray. I would like to thank each of them for 
joining me in this effort to promote the interests of rural America 
within the Federal Communications Commission (FCC).
  Our legislation will establish an Office of Rural Advocacy within the 
FCC

[[Page 11378]]

to promote access to advanced telecommunications in rural areas. The 
Rural Advocate will be responsible for focusing the Commission's 
attention on the importance of rural areas to the future of American 
prosperity, as well as on ensuring that Universal Service provisions 
mandated by the Communications Act and the Telecommunications Act are 
being met and implemented.
  Our proposal is modeled on the Small Business Administration's Office 
of Advocacy, which has been very successful in promoting the interests 
of small business within the U.S. government.
  Under our bill, the Office of Rural Advocacy will have 9 chief 
responsibilities:
  To promote access to advanced telecommunications service for 
populations in the rural United States;
  To develop proposals to better fulfill the commitment of the Federal 
Government to universal service and access to advanced 
telecommunications services in rural areas;
  To assess the effectiveness of existing Federal programs for 
providers of telecommunications services in rural areas;
  To measure the costs and other effects of Federal regulations on 
telecommunication carriers in rural areas;
  To determine the effect of Federal tax laws on providers of 
telecommunications services in rural areas;
  To serve as a focal point for the receipt of complaints, criticisms 
and suggestions concerning policies and activities of any department or 
agency of the Federal Government which affect the receipt of 
telecommunications services in rural areas;
  To counsel providers of telecommunications services in rural areas;
  To represent the views and interests of rural populations and 
providers of telecommunications services in rural areas; and
  To enlist the cooperation and assistance of public and private 
agencies, businesses, and other organizations in providing information 
about the telecommunications programs and services of the Federal 
Government which benefit rural areas and telecommunications companies.
  Mr. President, such an office within the FCC is needed for one very 
important reason, no bureau or Commissioner at the FCC has as an 
institutional role with the responsibility to promote the interests of 
rural telecommunications. The FCC has a great number of issues to 
consider due to the ever changing role of communications.
  Our legislation will ensure the FCC has the resources necessary to 
focus the Commission's attention on rural issues and will help 
establish an agenda at the FCC to address rural America's 
telecommunications needs, something the Commission has not done in the 
recent past. For example, the FCC's report on Advanced 
Telecommunications Services stated ``deployment of advanced 
telecommunications generally appear, at present, reasonable and 
timely.'' I can tell you Mr. President, this is not the case in Iowa 
where, according to the Iowa Utilities Board (IUB), approximately 8% of 
our exchanges have no access to the Internet. Additionally, access in 
many rural areas is of low speed and poor quality. This doesn't even 
include access to broadband, or high-speed Internet access, which is 
not available in numerous rural areas and small towns in Iowa and 
across the country.
  Other examples of the FCC's lack of focus on rural issues include a 
failure to understand how rural telephone cooperatives interact with 
their members, such as preventing rural telephone cooperatives from 
calling members to check on long distance preference changes, and an 
FCC definition that establishes a 3000 hertz level of basic voice grade 
service, when such a low level prevents Internet access on longer loops 
in rural areas.
  In order to effectively influence policy on rural telecommunications, 
this legislation gives the Rural Advocate the rank of a bureau chief 
within the FCC. The Rural Advocate will also have the authority to file 
comments or reports on any matter before the Federal Government 
affecting rural telecommunications without having to clear the 
testimony with the OMB or the FCC. Additionally, the Rural Advocate can 
file reports with the Administration, Congress and the FCC to recommend 
legislation or changes in policy. Finally, the Rural Advocate will be 
appointed directly by the President and confirmed by the Senate.
  Mr. President, in short, this legislation would allow rural America 
to enter the fast lane of the Information Superhighway. Again, thank 
you to my colleagues who have joined me in sponsoring this proposal. I 
urge all Senators to consider joining us in moving this initiative 
forward.
  I ask unanimous consent that a copy of our proposal be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1153

       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 ``Rural Telecommunications 
     Improvement Act of 1999''.

     SEC. 2. ESTABLISHMENT OF OFFICE OF RURAL ADVOCACY IN THE 
                   FEDERAL COMMUNICATIONS COMMISSION.

       (a) Establishment.--Title I of the Communications Act of 
     1934 (47 U.S.C. 151 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 12. OFFICE OF RURAL ADVOCACY.

       ``(a) Establishment.--There shall be in the Commission an 
     office to be known as the `Office of of Rural Advocacy'. The 
     office shall not be a bureau of the Commission.
       ``(b) Head of Office.--(1) The Office shall be headed by 
     the Rural Advocate of the Federal Communications Commission. 
     The Rural Advocate shall be appointed by the President, by 
     and with the advice and consent of the Senate, from among 
     citizens of the United States.
       ``(2) The Rural Advocate shall have a status and rank in 
     the Commission commensurate with the status and rank in the 
     Commission of the heads of the bureaus of the Commission.
       ``(c) Responsibilities of Office.--The responsibilities of 
     the Office are as follows:
       ``(1) To promote access to advanced telecommunications 
     service for populations in the rural United States.
       ``(2) To develop proposals for the modification of policies 
     and activities of the departments and agencies of the Federal 
     Government in order to better fulfill the commitment of the 
     Federal Government to universal service and access to 
     advanced telecommunications services in rural areas, and 
     submit such proposals to the departments and agencies.
       ``(3) To assess the effectiveness of existing Federal 
     programs for providers of telecommunications services in 
     rural areas, and make recommendations for legislative and 
     non-legislative actions to improve such programs.
       ``(4) To measure the costs and other effects of Federal 
     regulations on the capability of telecommunication carriers 
     in rural areas to provide adequate telecommunications 
     services (including advanced telecommunications and 
     information services) in such areas, and make recommendations 
     for legislative and non-legislative actions to modify such 
     regulations so as to minimize the interference of such 
     regulations with that capability.
       ``(5) To determine the effect of Federal tax laws on 
     providers of telecommunications services in rural areas, and 
     make recommendations for legislative and non-legislative 
     actions to modify Federal tax laws so as to enhance the 
     availability of telecommunications services in rural areas.
       ``(6) To serve as a focal point for the receipt of 
     complaints, criticisms, and suggestions concerning policies 
     and activities of any department or agency of the Federal 
     Government which affect the receipt of telecommunications 
     services in rural areas.
       ``(7) To counsel providers of telecommunications services 
     in rural areas on the effective resolution of questions and 
     problems in the relationships between such providers and the 
     Federal Government.
       ``(8) To represent the views and interests of rural 
     populations and providers of telecommunications services in 
     rural areas before any department or agency of the Federal 
     Government whose policies and activities affect the receipt 
     of telecommunications services in rural areas.
       ``(9) To enlist the cooperation and assistance of public 
     and private agencies, businesses, and other organizations in 
     disseminating information about the telecommunications 
     programs and services of the Federal Government which benefit 
     rural populations and providers of telecommunications 
     services in rural areas.
       ``(d) Staff and Powers of Office.--
       ``(1) Staff.--
       ``(A) In general.--For purposes of carrying out the 
     responsibilities of the Office under this section, the Rural 
     Advocate may employ and fix the compensation of such 
     personnel for the Office as the Rural Advocate considers 
     appropriate.

[[Page 11379]]

       ``(B) Pay.--
       ``(i) In general.--The employment and compensation of 
     personnel under this paragraph may be made without regard to 
     the provisions of title 5, United States Code, governing 
     appointments in the civil service and without regard to the 
     provisions of chapter 51 and subchapter III of chapter 53 of 
     such title relating to the classification of positions and 
     General Schedule pay rates.
       ``(ii) Maximum rate of pay.--The rate of pay of personnel 
     employed under this paragraph may not exceed the rate payable 
     for GS-15 of the General Schedule.
       ``(C) Limitation.--The total number of personnel employed 
     under this paragraph may not exceed 14.
       ``(2) Temporary and intermittent services.--The Rural 
     Advocate may procure temporary and intermittent services to 
     the extent authorized by section 3109 of title 5, United 
     States Code, for purposes of the activities of the Office 
     under this section.
       ``(3) Consultation with experts.--The Rural Advocate may 
     consult with individuals and entities possessing such 
     expertise as the Rural Advocate considers appropriate for 
     purposes of the activities of the Office under this section.
       ``(4) Hearing.--The Rural Advocate may hold hearings and 
     sit and act as such times and places as the Rural Advocate 
     considers appropriate for purposes of the activities of the 
     Office under this section.
       ``(e) Assistance of Other Federal Departments and 
     Agencies.--
       ``(1) In general.--Any department or agency of the Federal 
     Government may, upon the request of the Rural Advocate, 
     provide the Office with such information or other assistance 
     as the Rural Advocate considers appropriate for purposes of 
     the activities of the Office under this section.
       ``(2) Reimbursement.--Assistance may be provided the Office 
     under this subsection on a reimbursable basis.
       ``(f) Reports.--
       ``(1) Annual report.--The Rural Advocate shall submit to 
     Congress, the President, and the Commission on an annual 
     basis a report on the activities of the Office under this 
     section during the preceding year. The report may include any 
     recommendations for legislative or other action that the 
     Rural Advocate considers appropriate.
       ``(2) Other reports.--The Rural Advocate may submit to 
     Congress, the President, the Commission, or any other 
     department or agency of the Federal Government at any time a 
     report containing comments on a matter within the 
     responsibilities of the Office under this section.
       ``(3) Direct submittal.--The Rural Advocate may not be 
     required to submit any report under this subsection to any 
     department or agency of the Federal Government (including the 
     Office of Management and Budget or the Commission) before its 
     submittal under a provision of this subsection.''.
       (b) Executive Schedule Level IV.--Section 5315 of title 5, 
     United States Code, is amended by adding at the end the 
     following:
       ``Rural Advocate, Federal Communications Commission.''.
       (c) Report on Initial Activities.--Not later than 180 days 
     after the date of the appointment of the Rural Advocate of 
     the Federal Communications Commission, the Rural Advocate 
     shall submit to Congress a report on the actions taken by the 
     Rural Advocate to commence carrying out the responsibilities 
     of the Office of Rural Advocacy of the Federal Communications 
     Commission under section 12 of the Communications Act of 
     1934, as added by subsection (a).
                                 ______
                                 
      By Mr. VOINOVICH (for himself, Mr. Graham, Mr. Bayh, and Mr. 
        Cochran):
  S. 1154. A bill to enable States to use Federal funds more 
effectively on behalf of young children, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.


           prenatal, infant and child development act of 1999

  Mr. VOINOVICH. Mr. President, I rise today to introduce legislation 
with several of my Senate colleagues that will address the physical, 
cognitive and social development of an often-overlooked segment of our 
nation's population--children from prenatal to three years old.
  Our bill, the ``Prenatal, Infant and Child Development Act of 1999,'' 
will give states the necessary tools to help children cultivate the 
basic learning patterns and abilities that they will use throughout 
their lives. We need to do all that we can to create healthy, early 
childhood development systems across the country, and Senator Graham 
and I believe it is within the most important years of a child's life--
prenatal to three--that the most beneficial influence can be provided 
by parents, grandparents and caregivers.
  Every field of endeavor has peak moments of discovery, when past 
knowledge converges with new information, new insights and new 
technologies to produce startling opportunities for advancement. For 
the healthy development of young children--we are faced with one such 
moment. Today, thanks to decades of research on brain chemistry and 
sophisticated new technologies, neuroscientists have the data that 
tells us the experiences that fill a baby's first days, months, and 
years have a decisive impact on the architecture of the brain and on 
the nature and extent of one's adult capabilities. It is the education, 
the love and the nurturing that our children receive during the years 
prenatal to three that will help determine who they become 10, 20 and 
30 years down the road.
  Consequently, a tremendous opportunity exists to assist those 
individuals and families most at risk in the area of prenatal care 
through age three. We must work to create systems that support and 
educate families expecting a baby and those already with young 
children. We must present a message that is perfectly clear--education 
does not and cannot begin in kindergarten, or even in a quality 
preschool.
  Mr. President, in 1997, I served as Chairman of the National 
Governors' Association (NGA). My focus during my tenure as Chairman, 
was the National Education Goal One, that by the year 2000, all 
children in America will start school ready to learn.
  We developed goals, model indicators, and measures of performance of 
child and family well-being in order to impact school readiness. The 
results-oriented goals focused states on the improved conditions of 
young children and their families. We encouraged state and local 
governments to look across a variety of delivery systems--health care, 
child care, family support, and education--to make sure these systems 
would work together effectively for young children and their families. 
Based on that effort, between 1997 and 1998, 42 governors made early 
childhood development a keynote issue as they outlined their state 
agendas.
  Improving education is really about the process of ``lifelong 
learning,'' which includes efforts based on what doctors and 
researchers have said about the importance of positive early childhood 
learning experiences. The traditional primary and secondary education 
community needs to recognize that investments in early childhood aid 
their ultimate goal--that is, a classroom that can continue to move the 
learning process forward. To achieve that goal, a significant tenet of 
our education agenda must be to ensure that our children enter school 
ready to learn. Thus, we must support parents and caregivers, to help 
them understand that day-to-day interaction with young children helps 
children develop cognitively, socially and emotionally.
  To ensure that children have the best possible start in life, 
supports must exist to help parents and other adults who care for young 
children. Supports that are critical for young children from prenatal 
through age three include health care, nutrition programs, childcare, 
early development services adoption assistance, education programs, and 
other support services.
  There are three ways we can enhance these supports and create new 
ones. The first is to build on existing programs well underway in the 
states and the local communities by protecting and increasing federal 
commitments to worthwhile programs such as WIC (Women, Infants, and 
Children), CCDBG (Child Care and Development Block Grant), and S-CHIP 
(State-Children's Health Insurance Program).
  The second is to improve coordination among federal agencies in the 
administration of early childhood programs. As Chairman of the Senate 
Government Affairs Subcommittee on Oversight of Government Management, 
Restructuring, and the District of Columbia. I am taking steps to 
ensure, for example, that the Department of Education and the 
Department of Health and Human Services communicate with each other 
about the early childhood programs for which they are responsible in 
order to determine which are duplicative and which are most successful.
  The Results Act contemplates that agencies should be using their 
Performance Plans to demonstrate how daily activities, including 
coordination, contribute to the achievement of strategic

[[Page 11380]]

goals. GAO evaluated the Departments of Education and Health and Human 
Services 5-year Strategic Plans, and FY 1999 and FY 2000 Annual 
Performance Plans with regard to their coordination efforts. GAO found 
that both departments' plans are not living up to their full potential. 
While they address the issue of coordination, the plans provide little 
detail about their intentions to implement such coordination efforts. I 
met with both departments and asked that they submit an amended 
Performance Plan that provided a more detailed compilation of 
coordination activities and examples. We should emerge from this 
exercise with a consensus on the most promising programs for our 
children.
  The third way to improve support services is to encourage states to 
make prenatal to three development a priority. Our bill gives state and 
local governments additional resources to provide these necessary 
support services. At the same time, it recognizes that tight spending 
restraints limit available resources. Consequently, it is a modest, 
incremental bill that encourages collaboration and integration among 
existing programs and services and provides additional flexibility to 
states and local governments if they implement programs to provide 
coordinated services dedicated to meeting the needs of young children.
  Most child advocacy groups rank collaboration on the local level as 
fundamental and essential to successful programs for healthy childhood 
development. Under the bill, funds will be provided through the CCDBG 
program and will reward states that initiate such collaboration in 
creating state and local councils. It will also encourage states with 
existing collaboratives to help them expand their focus to social, 
emotional and cognitive development so that children have the best 
possible start in life. Funds could be used for a variety of 
coordinated services, such as child care, child development, pediatric 
literacy, parent education, home visits, or health services. States 
will lay out plans that identify ways to further promote the importance 
of early childhood care and education. Plans should also identify 
existing supports available for these children and ways that state and 
local councils can work with already established early development 
programs.
  In addition, the bill focuses on three particular areas to increase 
public awareness and enhance training opportunities for parents and 
other adults caring for young children.
  The first would provide funding to expand a satellite television 
network nationally. In order to help parents and caregivers do a better 
job of creating an environment where kids can learn, the legislation 
provides funds to support satellite television network services 
directly connected to child care centers, preschools, colleges, Early 
Head Start sites and the Internet. These services include high quality 
training, news, jobs and medical information dedicated to the specific 
needs of the Head Start staff and others in the early childhood 
community. In my state of Ohio, we already have networks in place at 
1,500 sites.
  The bill provides for a partnership between at least one non-profit 
organization and other public or private entities specializing in 
broadcast programs for parents and professionals in the early childhood 
field. The goal is to blend the latest in satellite technology with 
sound ``prenatal to three'' information and training principles, 
potentially reaching more than 140,000 caregivers and parents each 
month.
  The second would provide financial incentives for child-care workers 
to pursue credentialing or accreditation in early childhood education. 
Although many states do not have formal credentialing standards, there 
are several national organizations with accreditation curricula. The 
legislation encourages caregivers to pursue skills-based training 
(including via satellite or on the Internet) that leads to 
credentialing or accreditation by the state or national organization. 
Whatever qualified incentive program is initiated, employers would be 
required to match each dollar of the Federal contribution.
  The third would reauthorize and expand the multimedia parenting 
resources through video, print and interactive resources in the PBS 
``Ready to Learn'' initiative. These resources include:
  Expanded Internet offerings that enable parents to reinforce PBS' 
``Ready to Learn'' curriculum at home. ``Ready to Learn'' material 
would be directly accessible from the web for parents to utilize in 
reinforcing their child's appreciation of public television programs 
prior to and after program viewing.
  Expanded national programming, such as Mr. Rogers and Sesame Street.
  Formalized and expanded ``Ready to Learn Teachers'' training and 
certificate programs using ``The Whole Child'' video courseware, 
collateral print materials and the development of new video and print 
courseware.
  Expanded caregiver/parent training which would include workshops, 
distribution of material, and broadcasting of educational video 
vignettes regarding developmentally appropriate activities for young 
children.
  Deployment of a 24-hour channel of Ready to Learn-based children's 
programming and parenting training through digital technology.
  Our bill would also allow the Temporary Assistance for Needy Families 
(TANF) program to serve young children in a more effective manner by 
allowing states the ability to transfer up to 10 percent of a state's 
TANF grant to the Social Services Block Grant (SSBG). Originally, the 
1996 welfare reform bill allowed states this flexibility. However, this 
was restricted in 1998 to allow states to transfer just 4.25 percent of 
their TANF grant as an offset to help pay for new highway investments 
in TEA-21. Social Services Block Grants (Title XX of the Social 
Security Act) are a flexible source of funds that states may use to 
support a wide variety of social services for children and families, 
including child day care, protective services for children, foster 
care, and home-based services.
  The bill would also allow an additional 15 percent transfer of TANF 
money to the Child Care and Development Block Grant (CCDBG) for 
expenditures under a state early childhood collaboration program. 
Currently, states are permitted to transfer up to 30 percent of TANF to 
a combination of the CCDBG and SSBG. The Welfare Reform Act 
restructured federal childcare programs, repealed three welfare-related 
childcare programs and amended the Child Care Development Block Grant 
(CCDBG). Under current law, states receive a combination of mandatory 
and discretionary grants, part of which is subject to a state match. 
These funds would allow states to create or expand local early 
childhood development coordination councils (10 percent of the transfer 
authority), or to enhance child care quality in existing programs (5 
percent of the transfer authority).
  Using these new resources, states can implement coordinated programs 
at the local level, such as ``one-stop shopping'' for parents with 
young children. Under this particular program, parents could have a 
well-baby care visit, meet with a counselor to discuss questions and 
concerns about the baby's development or receive referrals for help in 
enrollment in child-care.
  Further, the legislation would alter the high performance bonus find 
within TANF to include criteria related to child welfare. The current 
criteria are based upon the recommendations of the National Governors' 
Association (NGA) high performance bonus fund work group. The bonus 
fund currently provides $200 million annually to states for meeting 
certain work-related performance targets, such as improvement of long-
term self-sufficiency rates by current and former TANF recipients. The 
performance targets should be expanded to include family- and child-
related criteria, such as increases in immunization rates, literacy and 
preschool participation.
  Finally, our bill encourages States to use their Maternal and Child 
Health Services Block Grant to target activities that address the needs 
of children from prenatal to three. The Maternal and Child Health 
Services Block Grant funds a broad range of health services

[[Page 11381]]

to mothers and children, particularly those with low income or limited 
access to health services. Its goals are to reduce infant mortality, 
prevent disease and handicapping conditions among children and increase 
the availability of prenatal, delivery and postpartum care to mothers.
  States are required to use 30 percent of their block grant for 
preventive and primary care services for children, 30 percent for 
services to children with special health care needs, and 40 percent at 
the states' discretion for either of these groups or for other 
appropriate maternal and child health activities. Using this existing 
funding, this legislation encourages states to design programs to 
address the social and emotional development needs of children under 
the age of five. It encourages states to provide coordinated early 
development services, parent education, and strategies to meet the 
needs of state and local populations. It does not mandate any specific 
model, nor does it require that states set-aside a specific amount of 
money from this block grant. Rather, it is intended to give states 
flexibility in finding money to devote more resources to existing or 
new healthy early childhood development systems.
  Mr. President, the pace at which children grow and learn during the 
first three years of life makes that period the most critical in their 
overall development. Children who lack proper nutrition, health care 
and nurturing during their early years tend to also lack adequate 
social, motor and language skills needed to perform well in school.
  I believe that all children, parents, and caregivers should have 
access to coordinated information and support services appropriate for 
healthy early childhood development in the first three years of life. 
The changing structure of the family requires that states streamline 
and coordinate healthy early childhood development systems of care to 
meet the needs of parents and children in the 21st century.
  The Federal Government's role in the development of these systems of 
care is minimal; it must give states the flexibility to implement 
programs that respond to local needs and conditions. Although it's just 
a modest step, that's exactly what our bill does.
  Our children are our most precious natural resource. They are our 
hope and they are our future. Therefore, I encourage my colleagues to 
co-sponsor our legislation, and I urge the Senate during the 106th 
Congress to make prenatal to three a priority for the sake of our 
children.
  Thank you, Mr. President, and 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. 1154

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Prenatal, 
     Infant, and Child Development Act of 1999''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

    TITLE I--FUNDS PROVIDED UNDER THE TEMPORARY ASSISTANCE TO NEEDY 
                            FAMILIES PROGRAM

Sec. 101. Authority to transfer funds for other purposes.
Sec. 102. Bonus to reward high performance States.

  TITLE II--EXPANSION OF THE MATERNAL AND CHILD HEALTH SERVICES BLOCK 
                                 GRANT

Sec. 201. Authority to provide State programs for the development of 
              children under age 5.

                     TITLE III--SATELLITE TRAINING

Sec. 301. Short title.
Sec. 302. Revision of part C of title III of the Elementary and 
              Secondary Education Act of 1965.
Sec. 303. Satellite television network.

     TITLE IV--HEALTHY EARLY CHILDHOOD DEVELOPMENT SYSTEMS OF CARE

Sec. 401. Block grants to States for healthy early childhood 
              development systems of care.

                TITLE V--CREDENTIALING AND ACCREDITATION

Sec. 501. Definitions.
Sec. 502. Authorization of appropriation.
Sec. 503. State allotments.
Sec. 504. Application.
Sec. 505. State child care credentialing and accreditation incentive 
              program.
Sec. 506. Administration.
Sec. 507. Credentialing, accreditation, and retention of qualified 
              child care workers.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Babies are born with all of the 100,000,000,000 brain 
     cells, or neurons, that the babies will need as adults.
       (2) By age 3, children have nearly all of the necessary 
     connections, or synapses, between brain cells that cause the 
     brain to function properly.
       (3) The pace at which children grow and learn during the 
     first years of life makes that period the most critical in 
     their overall development.
       (4) Children who lack proper nutrition, health care, and 
     nurturing during their first years tend to also lack adequate 
     social, motor, and language skills needed to perform well in 
     school.
       (5) All young children, and parents and caregivers of these 
     children, should have access to information and support 
     services appropriate for promoting healthy early childhood 
     development in the first years of life, including health 
     care, early intervention services, child care, parenting 
     education, and other child development services.
       (6) The changing structure of the family requires that 
     States streamline and coordinate healthy early childhood 
     development systems of care to meet the needs of parents and 
     children in the 21st century.
       (7) The Federal Government's role in the development of 
     these systems of care should be minimal. The Federal 
     Government must give States the flexibility to implement 
     systems involving programs that respond to local needs and 
     conditions.
    TITLE I--FUNDS PROVIDED UNDER THE TEMPORARY ASSISTANCE TO NEEDY 
                            FAMILIES PROGRAM

     SEC. 101. AUTHORITY TO TRANSFER FUNDS FOR OTHER PURPOSES.

       (a) Transfer of Funds for Block Grants for Social 
     Services.--
       (1) Elimination of reduction in amount transferable for 
     fiscal year 2001 and thereafter.--Section 404(d)(2) of the 
     Social Security Act (42 U.S.C. 604(d)(2)) is amended to read 
     as follows:
       ``(2) Limitation on amount transferable to title xx 
     programs.--A State may use not more than 10 percent of the 
     amount of any grant made to the State under section 403(a) 
     for a fiscal year to carry out State programs pursuant to 
     title XX.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     takes effect on October 1, 1999.
       (b) Transfer of Funds for Early Childhood Collaborative 
     Efforts Under the CCDBG.--
       (1) In general.--Section 404(d) of the Social Security Act 
     (42 U.S.C. 604(d)) is amended--
       (A) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (3)'';
       (B) by redesignating paragraph (3) as paragraph (4); and
       (C) by inserting after paragraph (2), the following:
       ``(3) Additional amounts transferable to early childhood 
     collaborative councils.--The percentage described in 
     paragraph (1) may be increased by up to 10 percentage points 
     if the additional funds resulting from that increase are 
     provided to local early childhood development coordinating 
     councils described in section 659H of the Child Care and 
     Development Block Grant Act of 1990 to carry out activities 
     described in section 659J of that Act.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     take effect on October 1, 1999.
       (c) Transfer of Funds To Enhance Child Care Quality Under 
     the CCDBG.--
       (1) In general.--Section 404(d) of the Social Security Act 
     (42 U.S.C. 604(d)), as amended by subsection (b), is 
     amended--
       (A) in paragraph (1), by striking ``and (3)'' and inserting 
     ``(3), and (4)'';
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3), the following:
       ``(4) Additional amounts transferable for the enhancement 
     of child care quality.--The percentage described in paragraph 
     (1) (determined without regard to any increase in that 
     percentage as a result of the application of paragraph (3)) 
     may be increased by up to 5 percentage points if the 
     additional funds resulting from that increase are used to 
     enhance child care quality under a State program pursuant to 
     the Child Care and Development Block Grant Act of 1990.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     take effect on October 1, 1999.

     SEC. 102. BONUS TO REWARD HIGH PERFORMANCE STATES.

       (a) Additional Measures of State Performance.--Section 
     403(a)(4)(C) of the Social Security Act (42 U.S.C. 
     603(a)(4)(C)) is amended--
       (1) by striking ``Not later'' and inserting the following:

[[Page 11382]]

       ``(i) In general.--Not later'';
       (2) by inserting ``The formula shall provide for the 
     awarding of grants under this paragraph based on core 
     national and State-selected measures in accordance with 
     clauses (ii) and (iii).'' after the period; and
       (3) by adding at the end the following:
       ``(ii) Core national measures.--The majority of grants 
     awarded under this paragraph shall be based on employment-
     related national measures using data that are consistently 
     available in all States.
       ``(iii) State-selected measures.--Not less than $20,000,000 
     of the amount appropriated for a fiscal year under 
     subparagraph (F) shall be used to award grants to States 
     under this paragraph for that fiscal year based on optional, 
     State-selected measures that are related to the status of 
     families and children. States may choose to compete from 
     among such measures according to the policy priorities of the 
     State and the ability of the State to provide data. Such 
     State-selected measures may include--

       ``(I) successful diversion of applicants from a need for 
     cash assistance under the State program under this title;
       ``(II) school attendance records of children in families 
     receiving assistance under the State program under this 
     title;
       ``(III) the degree of participation in the State in the 
     head start program established under the Head Start Act (42 
     U.S.C. 9831 et seq.) or public preschool programs;
       ``(IV) improvement of child and adult literacy rates;
       ``(V) improvement of long-term self-sufficiency rates by 
     current and former recipients of assistance under the State 
     program funded under this title;
       ``(VI) child support collection rates under the child 
     support and paternity establishment program established under 
     part D;
       ``(VII) increases in household income of current and former 
     recipients of assistance under the State program funded under 
     this title; and
       ``(VIII) improvement of child immunization rates.''.

       (b) Effective Date.--The amendments made by subsection (a) 
     apply to each of fiscal years 2000 through 2003.
  TITLE II--EXPANSION OF THE MATERNAL AND CHILD HEALTH SERVICES BLOCK 
                                 GRANT

     SEC. 201. AUTHORITY TO PROVIDE STATE PROGRAMS FOR THE 
                   DEVELOPMENT OF CHILDREN UNDER AGE 5.

       (a) In General.--Section 501(a)(1) of the Social Security 
     Act (42 U.S.C. 701(a)(1)) is amended--
       (1) by redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively; and
       (2) by inserting after subparagraph (A), the following:
       ``(B) to design programs to address the physical, 
     cognitive, and social developmental needs of infants and 
     children under age 5 by providing early child development 
     services, parent education, and other tailored strategies to 
     meet the needs of State and local populations;''.
       (b) Conforming Amendments.--Paragraphs (1)(C) and (3)(B) of 
     section 505(a) of the Social Security Act (42 U.S.C. 705(a)) 
     are each amended by striking ``501(a)(1)(D)'' and inserting 
     ``501(a)(1)(E)''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 1999.
                     TITLE III--SATELLITE TRAINING

     SEC. 301. SHORT TITLE.

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

     SEC. 302. REVISION OF PART C OF TITLE III OF THE ELEMENTARY 
                   AND SECONDARY EDUCATION ACT OF 1965.

       Part C of title III of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6921 et seq.) is amended to 
     read as follows:

              ``PART C--READY-TO-LEARN DIGITAL TELEVISION

     ``SEC. 3301. FINDINGS.

       ``Congress makes the following findings:
       ``(1) In 1994, Congress and the Department collaborated to 
     make a long-term, meaningful and public investment in the 
     principle that high-quality preschool television programming 
     will help children be ready to learn by the time the children 
     entered first grade.
       ``(2) The Ready to Learn Television Program through the 
     Public Broadcasting Service (PBS) and local public television 
     stations has proven to be an extremely cost-effective 
     national response to improving early childhood development 
     and helping parents, caregivers, and professional child care 
     providers learn how to use television as a means to help 
     children learn, develop, and play creatively.
       ``(3) Independent research shows that parents who 
     participate in Ready to Learn workshops are more critical 
     consumers of television and their children are more active 
     viewers. A University of Alabama study showed that parents 
     who had attended a Ready to Learn workshop read more books 
     and stories to their children and read more minutes each time 
     than nonattendees. The parents did more hands-on activities 
     related to reading with their children. The parents engaged 
     in more word activities and for more minutes each time. The 
     parents read less for entertainment and more for education. 
     The parents took their children to libraries and bookstores 
     more than nonattendees. For parents, participating in a Ready 
     to Learn workshop increases their awareness of and interest 
     in educational dimensions of television programming and is 
     instrumental in having their children gain exposure to more 
     educational programming. Moreover, 6 months after 
     participating in Ready to Learn workshops, parents who 
     attended generally had set rules for television viewing by 
     their children. These rules related to the amount of time the 
     children were allowed to watch television daily, the hours 
     the children were allowed to watch television, and the tasks 
     or chores the children must have accomplished before the 
     children were allowed to watch television.
       ``(4) The Ready to Learn (RTL) Television Program is 
     supporting and creating commercial-free broadcast programs 
     for young children that are of the highest possible 
     educational quality. Program funding has also been used to 
     create hundreds of valuable interstitial program elements 
     that appear between national and local public television 
     programs to provide developmentally appropriate messages to 
     children and caregiving advice to parents.
       ``(5) Through the Nation's 350 local public television 
     stations, these programs and programming elements reach tens 
     of millions of children, their parents, and caregivers 
     without regard to their economic circumstances, location, or 
     access to cable. In this way, public television is a partner 
     with Federal policy to make television an instrument, not an 
     enemy, of preschool children's education and early 
     development.
       ``(6) The Ready to Learn Television Program extends beyond 
     the television screen. Funds from the Ready to Learn 
     Television Program have funded thousands of local workshops 
     organized and run by local public television stations, almost 
     always in association with local child care training agencies 
     or early childhood development professionals, to help child 
     care professionals and parents learn more about how to use 
     television effectively as a developmental tool. These 
     workshops have trained more than 320,000 parents and 
     professionals who, in turn, serve and support over 4,000,000 
     children across the Nation.
       ``(7)(A) The Ready to Learn Television Program has 
     published and distributed millions of copies of a quarterly 
     magazine entitled `PBS Families' that contains--
       ``(i) developmentally appropriate games and activities 
     based on Ready to Learn Television programming;
       ``(ii) parenting advice;
       ``(iii) news about regional and national activities related 
     to early childhood development; and
       ``(iv) information about upcoming Ready to Learn Television 
     activities and programs.
       ``(B) The magazine described in subparagraph (A) is 
     published 4 times a year and distributed free of charge by 
     local public television stations in English and in Spanish 
     (PBS para la familia).
       ``(8) Because reading and literacy are central to the ready 
     to learn principle Ready to Learn Television stations also 
     have received and distributed millions of free age-
     appropriate books in their communities as part of the Ready 
     to Learn Television Program. Each station receives a minimum 
     of 200 books each month for free local distribution. Some 
     stations are now distributing more than 1,000 books per 
     month. Nationwide, more than 300,000 books are distributed 
     each year in low-income and disadvantaged neighborhoods free 
     of charge.
       ``(9) In 1998, the Public Broadcasting Service, in 
     association with local colleges and local public television 
     stations, as well as the Annenberg Corporation for Public 
     Broadcasting Project housed at the Corporation for Public 
     Broadcasting, began a pilot program to test the formal 
     awarding of a Certificate in Early Childhood Development 
     through distance learning. The pilot is based on the local 
     distribution of a 13-part video courseware series developed 
     by Annenberg Corporation for Public Broadcasting and WTVS 
     Detroit entitled `The Whole Child'. Louisiana Public 
     Broadcasting, Kentucky Educational Television, Maine Public 
     Broadcasting, and WLJT Martin, Tennessee, working with local 
     and State regulatory agencies in the child care field, have 
     participated in the pilot program with a high level of 
     success. The certificate program is ready for nationwide 
     application using the Public Broadcasting Service's Adult 
     Learning Service.
       ``(10) Demand for Ready To Learn Television Program 
     outreach and training has increased dramatically, with the 
     base of participating Public Broadcasting Service member 
     stations growing from a pilot of 10 stations to nearly 130 
     stations in 5 years.
       ``(11) Federal policy played a crucial role in the 
     evolution of analog television by funding the television 
     program entitled `Sesame Street' in the 1960's. Federal 
     policy should continue to play an equally crucial role for 
     children in the digital television age.

[[Page 11383]]



     ``SEC. 3302. READY-TO-LEARN.

       ``(a) In General.--The Secretary is authorized to award 
     grants to or enter into contracts or cooperative agreements 
     with eligible entities described in section 3303(b) to 
     develop, produce, and distribute educational and 
     instructional video programming for preschool and elementary 
     school children and their parents in order to facilitate the 
     achievement of the National Education Goals.
       ``(b) Availability.--In making such grants, contracts, or 
     cooperative agreements, the Secretary shall ensure that 
     eligible entities make programming widely available, with 
     support materials as appropriate, to young children, their 
     parents, child care workers, and Head Start providers to 
     increase the effective use of such programming.

     ``SEC. 3303. EDUCATIONAL PROGRAMMING.

       ``(a) Awards.--The Secretary shall award grants, contracts, 
     or cooperative agreements under section 3302 to eligible 
     entities to--
       ``(1) facilitate the development directly, or through 
     contracts with producers of children and family educational 
     television programming, of--
       ``(A) educational programming for preschool and elementary 
     school children; and
       ``(B) accompanying support materials and services that 
     promote the effective use of such programming;
       ``(2) facilitate the development of programming and digital 
     content especially designed for nationwide distribution over 
     public television stations' digital broadcasting channels and 
     the Internet, containing Ready to Learn-based children's 
     programming and resources for parents and caregivers; and
       ``(3) enable eligible entities to contract with entities 
     (such as public telecommunications entities and those funded 
     under the Star Schools Act) so that programs developed under 
     this section are disseminated and distributed--
       ``(A) to the widest possible audience appropriate to be 
     served by the programming; and
       ``(B) by the most appropriate distribution technologies.
       ``(b) Eligible Entities.--To be eligible to receive a 
     grant, contract, or cooperative agreement under subsection 
     (a), an entity shall be--
       ``(1) a public telecommunications entity that is able to 
     demonstrate a capacity for the development and national 
     distribution of educational and instructional television 
     programming of high quality for preschool and elementary 
     school children and their parents and caregivers; and
       ``(2) able to demonstrate a capacity to contract with the 
     producers of children's television programming for the 
     purpose of developing educational television programming of 
     high quality for preschool and elementary school children and 
     their parents and caregivers.
       ``(c) Cultural Experiences.--Programming developed under 
     this section shall reflect the recognition of diverse 
     cultural experiences and the needs and experiences of both 
     boys and girls in engaging and preparing young children for 
     schooling.

     ``SEC. 3304. DUTIES OF SECRETARY.

       ``The Secretary is authorized--
       ``(1) to award grants, contracts, or cooperative agreements 
     to eligible entities described in section 3303(b), local 
     public television stations, or such public television 
     stations that are part of a consortium with 1 or more State 
     educational agencies, local educational agencies, local 
     schools, institutions of higher education, or community-based 
     organizations of demonstrated effectiveness, for the purpose 
     of--
       ``(A) addressing the learning needs of young children in 
     limited English proficient households, and developing 
     appropriate educational and instructional television 
     programming to foster the school readiness of such children;
       ``(B) developing programming and support materials to 
     increase family literacy skills among parents to assist 
     parents in teaching their children and utilizing educational 
     television programming to promote school readiness; and
       ``(C) identifying, supporting, and enhancing the effective 
     use and outreach of innovative programs that promote school 
     readiness; and
       ``(D) developing and disseminating training materials, 
     including--
       ``(i) interactive programs and programs adaptable to 
     distance learning technologies that are designed to enhance 
     knowledge of children's social and cognitive skill 
     development and positive adult-child interactions; and
       ``(ii) support materials to promote the effective use of 
     materials developed under subparagraph (B) among parents, 
     Head Start providers, in-home and center-based day care 
     providers, early childhood development personnel, elementary 
     school teachers, public libraries, and after- school program 
     personnel caring for preschool and elementary school 
     children;
       ``(2) to establish within the Department a clearinghouse to 
     compile and provide information, referrals, and model program 
     materials and programming obtained or developed under this 
     part to parents, child care providers, and other appropriate 
     individuals or entities to assist such individuals and 
     entities in accessing programs and projects under this part; 
     and
       ``(3) to coordinate activities assisted under this part 
     with the Secretary of Health and Human Services in order to--
       ``(A) maximize the utilization of quality educational 
     programming by preschool and elementary school children, and 
     make such programming widely available to federally funded 
     programs serving such populations; and
       ``(B) provide information to recipients of funds under 
     Federal programs that have major training components for 
     early childhood development, including programs under the 
     Head Start Act and Even Start, and State training activities 
     funded under the Child Care Development Block Grant Act of 
     1990, regarding the availability and utilization of materials 
     developed under paragraph (1)(D) to enhance parent and child 
     care provider skills in early childhood development and 
     education.

     ``SEC. 3305. APPLICATIONS.

       ``Each entity desiring a grant, contract, or cooperative 
     agreement under section 3302 or 3304 shall submit an 
     application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     reasonably require.

     ``SEC. 3306. REPORTS AND EVALUATION.

       ``(a) Annual Report to Secretary.--An eligible entity 
     receiving funds under section 3302 shall prepare and submit 
     to the Secretary an annual report which contains such 
     information as the Secretary may require. At a minimum, the 
     report shall describe the program activities undertaken with 
     funds received under section 3302, including--
       ``(1) the programming that has been developed directly or 
     indirectly by the eligible entity, and the target population 
     of the programs developed;
       ``(2) the support materials that have been developed to 
     accompany the programming, and the method by which such 
     materials are distributed to consumers and users of the 
     programming;
       ``(3) the means by which programming developed under this 
     section has been distributed, including the distance learning 
     technologies that have been utilized to make programming 
     available and the geographic distribution achieved through 
     such technologies; and
       ``(4) the initiatives undertaken by the eligible entity to 
     develop public-private partnerships to secure non-Federal 
     support for the development, distribution and broadcast of 
     educational and instructional programming.
       ``(b) Report to Congress.--The Secretary shall prepare and 
     submit to the relevant committees of Congress a biannual 
     report which includes--
       ``(1) a summary of activities assisted under section 
     3303(a); and
       ``(2) a description of the training materials made 
     available under section 3304(1)(D), the manner in which 
     outreach has been conducted to inform parents and child care 
     providers of the availability of such materials, and the 
     manner in which such materials have been distributed in 
     accordance with such section.

     ``SEC. 3307. ADMINISTRATIVE COSTS.

       ``With respect to the implementation of section 3303, 
     eligible entities receiving a grant, contract, or cooperative 
     agreement from the Secretary may use not more than 5 percent 
     of the amounts received under such section for the normal and 
     customary expenses of administering the grant, contract, or 
     cooperative agreement.

     ``SEC. 3308. DEFINITION.

       ``For the purposes of this part, the term `distance 
     learning' means the transmission of educational or 
     instructional programming to geographically dispersed 
     individuals and groups via telecommunications (including 
     through the Internet).

     ``SEC. 3309. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     to carry out this part, $50,000,000 for fiscal year 2000, and 
     such sums as may be necessary for each of the 4 succeeding 
     fiscal years.
       ``(b) Funding Rule.--Not less than 60 percent of the 
     amounts appropriated under subsection (a) for each fiscal 
     year shall be used to carry out section 3303.''.

     SEC. 303. SATELLITE TELEVISION NETWORK.

       Title III of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6801 et seq.) is amended by adding at the end 
     the following:

                 ``PART G--SATELLITE TELEVISION NETWORK

     ``SEC. 3701. NETWORK.

       ``(a) In General.--The Secretary of Education and the 
     Secretary of Health and Human Services shall award a grant to 
     or enter into a contract with an eligible organization to 
     establish and operate a satellite television network to 
     provide training for personnel of Head Start programs carried 
     out under the Head Start Act (42 U.S.C. 9831 et seq.) and 
     other child care providers, who serve children under age 5.
       ``(b) Eligible Organization.--To be eligible to receive a 
     grant or enter into a contract under subsection (a), an 
     organization shall--
       ``(1) administer a centralized child development and 
     national assessment program leading to recognized credentials 
     for personnel

[[Page 11384]]

     working in early childhood development and child care 
     programs, within the meaning of section 648(e) of the Head 
     Start Act (42 U.S.C. 9843(e)); and
       ``(2) demonstrate that the organization has entered into a 
     partnership, to establish and operate the training network, 
     that includes--
       ``(A) a nonprofit organization; and
       ``(B) a public or private entity that specializes in 
     providing broadcast programs for parents and professionals in 
     fields relating to early childhood.
       ``(c) Application.--To be eligible to receive a grant or 
     contract under subsection (a), an organization shall submit 
     an application to the Secretary of Education and the 
     Secretary of Health and Human Services at such time, in such 
     manner, and containing such information as the Secretaries 
     may require.
       ``(d) Cooperative Agreement.--The Secretary of Education 
     and the Secretary of Health and Human Services shall enter 
     into a cooperative agreement to carry out this section.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this part $20,000,000 for 
     fiscal year 2000 and such sums as may be necessary for each 
     subsequent fiscal year.''.
     TITLE IV--HEALTHY EARLY CHILDHOOD DEVELOPMENT SYSTEMS OF CARE

     SEC. 401. BLOCK GRANTS TO STATES FOR HEALTHY EARLY CHILDHOOD 
                   DEVELOPMENT SYSTEMS OF CARE.

       (a) Block Grant.--The Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858 et seq.) is amended--
       (1) by inserting after the subchapter heading the 
     following:

                    ``PART 1--CHILD CARE ACTIVITIES;

     and
       (2) by adding at the end the following:

     ``PART 2--HEALTHY EARLY CHILDHOOD DEVELOPMENT SYSTEMS OF CARE

     ``SEC. 659. PURPOSE.

       ``The purposes of this part are--
       ``(1) to help families seeking government assistance for 
     their children, in a manner that does not usurp the role of 
     parents, but streamlines and coordinates government services 
     for the families;
       ``(2) to establish a framework of support for local early 
     childhood development coordinating councils that--
       ``(A) develop comprehensive, long-range strategic plans for 
     early childhood education, development, and support services; 
     and
       ``(B) provide, through public and private means, high-
     quality early childhood education, development, and support 
     services for children and families; and
       ``(3)(A) to support family environments conducive to the 
     growth and healthy development of children; and
       ``(B) to ensure that children under age 5 have proper 
     medical care and early intervention services when necessary.

     ``SEC. 659A. DEFINITIONS.

       ``In this part:
       ``(1) Child in poverty.--The term `child in poverty' means 
     a young child who is an eligible child described in section 
     658P(4)(B).
       ``(2) Healthy early childhood development system of care.--
     The term `healthy early childhood development system of care' 
     means a system of programs that provides coordinated early 
     childhood development services.
       ``(3) Early childhood development services.--The term 
     `early childhood development services' means education, 
     development, and support services, such as all-day 
     kindergarten, parenting education and home visits, child care 
     and other child development services, and health services 
     (including prenatal care), for young children.
       ``(4) Eligible state.--The term `eligible State' means a 
     State that has submitted a State plan described in section 
     659E to the Secretary and obtained the certification of the 
     Secretary for the plan.
       ``(5) Governor.--The term `Governor' means the chief 
     executive officer of a State.
       ``(6) Indian tribe; tribal organization.--The terms `Indian 
     tribe' and `tribal organization' have the meanings given the 
     terms in section 658P.
       ``(7) Local council.--The term `local council' means a 
     local early childhood development coordinating council 
     established or designated under section 659H.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Health and Human Services.
       ``(9) State.--The term `State' means any of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the United States Virgin Islands, Guam, American Samoa, 
     and the Commonwealth of the Northern Mariana Islands.
       ``(10) State council.--The term `State council' means a 
     State early childhood development coordinating council 
     established or designated under section 659D.
       ``(11) Young child.--The term `young child' mean an 
     individual under age 5.

     ``SEC. 659B. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There is authorized to be appropriated 
     to carry out this part $200,000,000 for each of fiscal years 
     2000 through 2004.
       ``(b) Availability of Funds.--Funds appropriated for a 
     fiscal year under subsection (a) shall remain available for 
     the succeeding 2 fiscal years.

     ``SEC. 659C. ALLOTMENT TO STATES.

       ``(a) Reservation.--The Secretary shall reserve not less 
     than 1 percent, and not more than 2 percent, of the funds 
     appropriated under section 659B for each fiscal year for 
     payments to Indian tribes and tribal organizations to assist 
     the tribes and organizations in supporting healthy early 
     childhood development systems of care under this part. The 
     Secretary shall by regulation issue requirements concerning 
     the eligibility of Indian tribes and tribal organizations to 
     receive funds under this subsection, and the use of funds 
     made available under this subsection.
       ``(b) Allotment.--From the funds appropriated under section 
     659B for a fiscal year, the Secretary shall allot to each 
     eligible State, to pay for the Federal share of the cost of 
     supporting healthy early childhood development systems of 
     care under this part, the sum of--
       ``(1) an amount that bears the same ratio to 50 percent of 
     such funds as the number of young children in the State bears 
     to the number of such children in all eligible States; and
       ``(2) an amount that bears the same ratio to 50 percent of 
     such funds as the number of children in poverty in the State 
     bears to the number of such children in all eligible States.
       ``(c) Federal Share.--The Federal share of the cost 
     described in subsection (b) shall be 75 percent. The non-
     Federal share of the cost may be provided in cash or in kind, 
     fairly evaluated, including plant, equipment or services 
     (provided from State or local public sources or through 
     donations from private entities).

     ``SEC. 659D. STATE COUNCIL.

       ``(a) In General.--The Governor of a State seeking an 
     allotment under section 659C may, at the election of the 
     Governor--
       ``(1) establish and appoint the members of a State early 
     childhood development coordinating council, as described in 
     subsection (b); or
       ``(2) designate an entity to serve as such a council, as 
     described in subsection (c).
       ``(b) Appointed State Council.--The Governor may establish 
     and appoint the members of a State council that--
       ``(1) may include--
       ``(A) the State superintendent of schools, or the designee 
     of the superintendent;
       ``(B) the chief State budget officer or the designee of the 
     officer;
       ``(C) the head of the State health department or the 
     designee of the head;
       ``(D) the heads of the State agencies with primary 
     responsibility for child welfare, child care, and the 
     medicaid program carried out under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.), or the designees of 
     the heads;
       ``(E) the heads of other State agencies with primary 
     responsibility for services for young children or pregnant 
     women, which may be agencies with primary responsibility for 
     alcohol and drug addiction services, mental health services, 
     mental retardation services, food assistance services, and 
     juvenile justice services, or the designees of the heads;
       ``(F) a representative of parents or consumers;
       ``(G) representatives of early childhood development 
     agencies; and
       ``(H) the Governor; and
       ``(2) may, in the discretion of the Governor, include other 
     members, including representatives of providers.
       ``(c) Designated State Council.--The Governor may designate 
     an entity to serve as the State council if the entity--
       ``(1) includes members that are substantially similar to 
     the members described in subsection (b); and
       ``(2) provides integrated and coordinated early childhood 
     development services.
       ``(d) Chairperson.--The Governor shall serve as the 
     chairperson of the State council.
       ``(e) Duties.--In a State with a State council, the State 
     council--
       ``(1) shall submit the State plan described in section 
     659E;
       ``(2) shall make the allocation described in section 
     659F(b);
       ``(3) may carry out activities described in section 
     659F(c); and
       ``(4) shall prepare and submit the report described in 
     section 659F(e).

     ``SEC. 659E. STATE PLAN.

       ``(a) In General.--To be eligible to receive an allotment 
     under section 659C, a State shall submit a State plan to the 
     Secretary at such time, and in such manner, as the Secretary 
     may require, including--
       ``(1) in the case of a State in which the Governor elects 
     to establish or designate a State council, sufficient 
     information about the entity established or designated under 
     section 659D to enable the Secretary to determine whether the 
     entity complies with the requirements of such section;
       ``(2) a description of the political subdivisions 
     designated by the State to receive funds under section 659G 
     and carry out activities under section 659J;
       ``(3)(A) comprehensive information describing how the State 
     will carry out activities described in section 659F and how 
     political subdivisions in the State will carry out activities 
     described in section 659J; and

[[Page 11385]]

       ``(B) State goals for the activities described in 
     subparagraph (A);
       ``(4) such information as the Secretary shall by regulation 
     require on the amount and source of State and local public 
     funds, and donations, expended in the State to provide the 
     non-Federal share of the cost of supporting healthy early 
     childhood development systems of care under this part; and
       ``(5) an assurance that the State shall annually submit the 
     report described in section 659F(e).
       ``(b) Submission.--At the election of the State, the State 
     may submit the State plan as a portion of the State plan 
     submitted under section 658E. With respect to that State, 
     references to a State plan--
       ``(1) in this part shall be considered to refer to the 
     portions of the plan described in this section; and
       ``(2) in part 1 shall be considered to refer to the 
     portions of the plan described in section 658E.
       ``(c) Certification.--The Secretary shall certify any State 
     plan that meets the broad goals of this part.

     ``SEC. 659F. STATE ACTIVITIES.

       ``(a) In General.--A State that receives an allotment under 
     section 659C shall use the funds made available through the 
     allotment to support healthy early childhood development 
     systems of care, by--
       ``(1) making allocations to political subdivisions under 
     section 659G; and
       ``(2) carrying out State activities described in subsection 
     (c).
       ``(b) Mandatory Reservation for Local Allocations.--The 
     State shall reserve 85 percent of the funds made available 
     through the allotment to make allocations to political 
     subdivisions under section 659G.
       ``(c) Permissible State Activities.--The State may use the 
     remainder of the funds made available through the allotment 
     to support healthy early childhood development systems of 
     care by--
       ``(1) entering into interagency agreements with appropriate 
     entities to encourage coordinated efforts at the State and 
     local levels to improve the State delivery system for early 
     childhood development services;
       ``(2) advising local councils on the coordination of 
     delivery of early childhood development services to children;
       ``(3) developing programs and projects, including pilot 
     projects, to encourage coordinated efforts at the State and 
     local levels to improve the State delivery system for early 
     childhood development services;
       ``(4) providing technical support for local councils and 
     development of educational materials;
       ``(5) providing education and training for child care 
     providers; and
       ``(6) supporting research and development of best practices 
     for healthy early childhood development systems of care, 
     establishing standards for such systems, and carrying out 
     program evaluations for such systems.
       ``(d) Administration.--A State that receives an allotment 
     under section 659C may use not more than 5 percent of the 
     funds made available through the allotment to pay for the 
     costs of administering the activities carried out under this 
     part.
       ``(e) Report.--The State shall annually prepare and submit 
     to the Secretary a report on the activities carried out under 
     this part in the State, which shall include details of the 
     use of Federal funds to carry out the activities and the 
     extent to which the States and political subdivisions are 
     making progress on State or local goals in carrying out the 
     activities. In preparing the report, a State may require 
     political subdivisions in the State to submit information to 
     the State, and may compile the information.

     ``SEC. 659G. ALLOCATION TO POLITICAL SUBDIVISIONS.

       From the funds reserved by a State under section 659F(b) 
     for a fiscal year, the State shall allot to each eligible 
     political subdivision in the State the sum of--
       ``(1) an amount that bears the same ratio to 50 percent of 
     such funds as the number of young children in the political 
     subdivision bears to the number of such children in all 
     eligible political subdivisions in the State; and
       ``(2) an amount that bears the same ratio to 50 percent of 
     such funds as the number of children in poverty in the 
     political subdivision bears to the number of such children in 
     all eligible political subdivisions in the State.

     ``SEC. 659H. LOCAL COUNCILS.

       ``(a) In General.--The chief executive officer of a 
     political subdivision that is located in a State with a State 
     council and that seeks an allocation under section 659G may, 
     at the election of the officer--
       ``(1) establish and appoint the members of a local early 
     childhood development coordinating council, as described in 
     subsection (b); or
       ``(2) designate an entity to serve as such a council, as 
     described in subsection (c).
       ``(b) Appointed Local Council.--The officer may establish 
     and appoint the members of a local council that may include--
       ``(1) representatives of any public or private agency that 
     funds, advocates the provision of, or provides services to 
     children and families;
       ``(2) representatives of schools;
       ``(3) members of families that have received services from 
     an agency represented on the council;
       ``(4) representatives of courts; and
       ``(5) private providers of social services for families and 
     children.
       ``(c) Designated Local Council.--The officer may designate 
     an entity to serve as the local council if the entity--
       ``(1) includes members that are substantially similar to 
     the members described in subsection (b); and
       ``(2) provides integrated and coordinated early childhood 
     development services.
       ``(d) Duties.--In a political subdivision with a local 
     council, the local council--
       ``(1) shall submit the local plan described in section 
     659I;
       ``(2) shall carry out activities described in section 
     659J(a);
       ``(3) may carry out activities described in section 
     659J(b); and
       ``(4) shall submit such information as a State council may 
     require under section 659F(e).

     ``SEC. 659I. LOCAL PLAN.

       ``To be eligible to receive an allocation under section 
     659G, a political subdivision shall submit a local plan to 
     the State at such time, in such manner, and containing such 
     information as the State may require.

     ``SEC. 659J. LOCAL ACTIVITIES.

       ``(a) Mandatory Activities.--A political subdivision that 
     receives an allocation under section 659G shall use the funds 
     made available through the allocation--
       ``(1) to provide assistance to entities carrying out early 
     childhood development services through a healthy early 
     childhood development system of care, in order to meet 
     assessed needs for the services, expand the number of 
     children receiving the services, and improve the quality of 
     the services, both for young children who remain in the home 
     and young children that require services in addition to 
     services offered in child care settings; and
       ``(2)(A) to establish and maintain an accountability system 
     to monitor the progress of the political subdivision in 
     achieving results for families and children through services 
     provided through the healthy early childhood development 
     system of care for the political subdivision; and
       ``(B) to establish and maintain a mechanism to ensure 
     ongoing input from a broad and representative set of families 
     who are receiving services through the healthy early 
     childhood development system of care for the political 
     subdivision.
       ``(b) Permissible Activities.--A political subdivision that 
     receives an allocation under section 659G may use the funds 
     made available through the allocation--
       ``(1) to improve the healthy early childhood development 
     system of care by enhancing efforts and building new 
     opportunities for--
       ``(A) innovation in early childhood development services; 
     and
       ``(B) formation of partnerships with businesses, 
     associations, churches or other religious institutions, and 
     charitable or philanthropic organizations to provide early 
     childhood development services on behalf of young children; 
     and
       ``(2) to develop and implement a process that annually 
     evaluates and prioritizes services provided through the 
     healthy early childhood development system of care, fills 
     service gaps in that system where possible, and invests in 
     new approaches to achieve better results for families and 
     children through that system.''.
       (b) Conforming Amendments.--Part 1 of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) 
     is amended--
       (1) in section 658A(a) (42 U.S.C. 9801 note), by striking 
     ``This subchapter'' and inserting ``This part'';
       (2) except as provided in the last sentence of section 
     658E(c)(2)(F) (42 U.S.C. 9858c(c)(2)(F)) and in section 
     658N(a)(3)(C) (42 U.S.C. 9858l(a)(3)(C)), by striking ``this 
     subchapter'' and inserting ``this part''; and
       (3) in section 658N(a)(3)(C), by striking ``under this 
     subchapter'' and inserting ``under this part''.
                TITLE V--CREDENTIALING AND ACCREDITATION

     SEC. 501. DEFINITIONS.

       In this title:
       (1) Accredited child care facility.--The term ``accredited 
     child care facility'' means--
       (A) a facility that is accredited, by a child care 
     credentialing or accreditation entity recognized by a State 
     or national organization described in paragraph (2)(A), to 
     provide child care (except children who a tribal organization 
     elects to serve through a facility described in subparagraph 
     (B));
       (B) a facility that is accredited, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization;
       (C) a facility that is used as a Head Start center under 
     the Head Start Act (42 U.S.C. 9831 et seq.) and is in 
     compliance with applicable performance standards established 
     by regulation under such Act for Head Start programs; or
       (D) a military child development center (as defined in 
     section 1798(1) of title 10, United States Code) that is in a 
     facility owned or

[[Page 11386]]

     leased by the Department of Defense or the Coast Guard.
       (2) Child care credentialing or accreditation entity.--The 
     term ``child care credentialing or accreditation entity'' 
     means a nonprofit private organization or public agency 
     that--
       (A) is recognized by a State agency, a tribal organization, 
     or a national organization that serves as a peer review panel 
     on the standards and procedures of public and private child 
     care or school accrediting bodies; and
       (B) accredits a facility or credentials an individual to 
     provide child care on the basis of--
       (i) an accreditation or credentialing instrument based on 
     peer-validated research;
       (ii) compliance with applicable State and local licensing 
     requirements, or standards described in section 
     658E(c)(2)(E)(ii) of the Child Care and Development Block 
     Grant Act (42 U.S.C. 9858c(c)(2)(E)(ii)), as appropriate, for 
     the facility or individual;
       (iii) outside monitoring of the facility or individual; and
       (iv) criteria that provide assurances of--

       (I) compliance with age-appropriate health and safety 
     standards at the facility or by the individual;
       (II) use of age-appropriate developmental and educational 
     activities, as an integral part of the child care program 
     carried out at the facility or by the individual; and
       (III) use of ongoing staff development or training 
     activities for the staff of the facility or the individual, 
     including related skills-based testing.

       (3) Credentialed child care professional.--The term 
     ``credentialed child care professional'' means--
       (A) an individual who--
       (i) is credentialed, by a child care credentialing or 
     accreditation entity recognized by a State or a national 
     organization described in paragraph (2)(A), to provide child 
     care (except children who a tribal organization elects to 
     serve through an individual described in subparagraph (B)); 
     or
       (ii) successfully completes a 4-year or graduate degree in 
     a relevant academic field (such as early childhood education, 
     education, or recreation services);
       (B) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization; or
       (C) an individual certified by the Armed Forces of the 
     United States to provide child care as a family child care 
     provider (as defined in section 658P of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858n)) in 
     military family housing.
       (4) Child in poverty.--The term ``child in poverty'' means 
     a child that is a member of a family with an income that does 
     not exceed 200 percent of the poverty line.
       (5) Poverty line.--The term ``poverty line'' means the 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2))) applicable to a family of the size involved.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (7) State; tribal organization.--The terms ``State'' and 
     ``tribal organization'' have the meaning given the term in 
     section 658P of the Child Care and Development Block Grant 
     Act (42 U.S.C. 9858n).

     SEC. 502. AUTHORIZATION OF APPROPRIATION.

       There is authorized to be appropriated to carry out this 
     title, $20,000,000 for each of fiscal years 2000 through 
     2004.

     SEC. 503. STATE ALLOTMENTS.

       From the funds appropriated under section 502 for a fiscal 
     year, the Secretary shall allot to each eligible State, to 
     pay for the cost of establishing and carrying out State child 
     care credentialing and accreditation incentive programs, an 
     amount that bears the same ratio to such funds as the number 
     of children in poverty under age 5 in the State bears to the 
     number of such children in all States.

     SEC. 504. APPLICATION.

       To be eligible to receive an allotment under section 503, a 
     State shall submit an application to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require.

     SEC. 505. STATE CHILD CARE CREDENTIALING AND ACCREDITATION 
                   INCENTIVE PROGRAM.

       (a) In General.--A State that receives an allotment under 
     section 503 shall use funds made available through the 
     allotment to establish and carry out a State child care 
     credentialing and accreditation incentive program. In 
     carrying out the program, the State shall make payments to 
     child care providers who serve children under age 5 to assist 
     the providers in making financial assistance available for 
     employees of the providers who are pursuing skills-based 
     training to--
       (1) enable the employees to obtain credentialing as 
     credentialed child care professionals; or
       (2) enable the facility involved to obtain accreditation as 
     an accredited child care facility.
       (b) Application.--To be eligible to receive a payment under 
     subsection (a), a child care provider shall submit an 
     application to the State at such time, in such manner, and 
     containing such information as the State may require 
     including, at a minimum--
       (1) information demonstrating that an employee of the 
     provider is pursuing skills-based training that will enable 
     the employee or the facility involved to obtain credentialing 
     or accreditation as described in subsection (a); and
       (2) an assurance that the provider will make available 
     contributions toward the costs of providing the financial 
     assistance described in subsection (a), in an amount that is 
     not less than $1 for every $1 of Federal funds provided 
     through the payment.

     SEC. 506. ADMINISTRATION.

       A State that receives an allotment under section 503 may 
     use not more than 5 percent of the funds made available 
     through the allotment to pay for the costs of administering 
     the program described in section 505.

     SEC. 507. CREDENTIALING, ACCREDITATION, AND RETENTION OF 
                   QUALIFIED CHILD CARE WORKERS.

       Section 658G of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858e) is amended--
       (1) by inserting ``and payments to encourage child care 
     providers who serve children under age 5 to obtain 
     credentialing as credentialed child care providers or 
     accreditation for their facilities as accredited child care 
     facilities or to encourage retention of child care providers 
     who serve those children and have obtained that credentialing 
     or accreditation, in areas that the State determines are 
     underserved'' after ``referral services''; and
       (2) by adding at the end the following: ``In this section, 
     the terms `credentialed child care provider' and `accredited 
     child care facility' have the meanings given the terms in 
     section 501 of the Prenatal, Infant, and Child Development 
     Act of 1999.''.

 Mr. BAYH. Mr. President, today I rise as an original co-
sponsor of the Prenatal Child and Infant Development Act, a bipartisan 
bill to provide states with the flexibility they need to address the 
needs of children during their formative years.
  Children are born into this world with all the potential they need to 
make their dreams come true. The ages of birth to 3 are the most 
critical for a child's development both mentally and socially. They 
have all the 100 billion brains cells they will need as adults. By age 
three, children have nearly all the necessary connections between the 
brain cells needed for the brain to function fully and properly. It is 
up to us, families, teachers, childcare providers, and communities to 
help our children live up to their potential. It is important that our 
children are ready to learn and we allow them the opportunity to 
maximize their potential. What income bracket a child is born into 
should not determine that child's future. If a child is not provided 
with proper health care, nutritional food, and a nurturing environment 
to grow up in, we are leading down a very dark path.
  Sadly, it has been confirmed that children who lack proper nutrition, 
health care, and nurturing during their first years also lack the 
adequate social, motor, and language skills needed to perform well in 
school and in life. That is why I have joined efforts with Senator 
Voinovich and Senator Graham and support the Prenatal Child and Infant 
Development Act. This initiative has bipartisan support because it is 
important legislation that addresses something we should all have in 
common, helping our children prepare for the future. A child birth to 3 
years old that is in need of assistance can not do it on her own.
  Specifically, this bill will allow States to transfer up to 45% of 
the money they receive for Temporary Assistance for Needy Families to 
the Child Care Development Block Grant or the Social Services Block 
Grant. The 15% increase in transferability will go towards increasing 
local early childhood development coordination councils and to enhance 
child care quality under the existing Child Care Development Block 
Grant. This new flexibility will allow states to spend the money needed 
to ensure our children are not sentenced to unfulfillment of their 
dreams just because they were denied child care services during their 
most vital development stages.
  In Indiana, there are over 488,000 children under the age of six. 70% 
of those children are in child care. Indiana is one of those states 
that has transferred the entire amount currently allowed

[[Page 11387]]

from Temporary Assistance for Needy Families funds to the Child Care 
Development Block Grant for child care services and quality 
initiatives. Even after the State was able to provide services for 
65,185 children, there still remains a need to help at least an 
additional 267,500 children. There is a need in my State to have the 
flexibility to transfer and utilize funds that otherwise are not being 
spent so these children can be served.
  One of the programs this new flexibility will allow to expand in 
Indiana is the Building Bright Beginnings Coalition. This coalition is 
focused on assisting children that are prenatal to four years old. They 
have reached over 150,000 parents of newborns through their publication 
``A Parent's Guide to Raising Health, Happy Babies''. The coalition has 
implemented the ``See and Demand Quality Child Care'' campaign 
consisting of public service announcements, billboards, pamphlets, and 
a toll-free telephone line for parent information in cooperation with 
local resources and referral agencies. It also makes loans available to 
child care providers who are considered non-traditional borrowers, and 
it has formed an institute that creates a public private partnership 
with higher education as well as the health, education, and early 
childhood communities. In the short time this program has been in 
place, it has helped over 100,000 parents of newborns be better 
informed, over 10,000 new public private partnerships have been formed, 
and it has directly impacted the lives of over 15,000 children. We need 
more programs like this and in order for them to exist States need more 
flexibility with their funding streams.
  These quality initiatives are administered by Indiana's Step Ahead 
Councils. Step Ahead Councils are the types of councils this bill hopes 
to promote. Indiana has had a council in each of its 92 counties since 
1991. These councils allow for locally focused solutions and 
initiatives to locally based challenges with child care, parent 
information, early intervention, child nutrition and health screening. 
Local responses to local problems can create better solutions. This 
bill encourages such local involvement.
  In addition, there are several other important goals this bill helps 
to accomplish. It will allow more programs to address the needs of 
prenatal to three year olds, it will increase satellite training for 
Head Start and other childhood program staff, it will increase direct 
child care and health services, and will encourage States to implement 
training programs for childcare providers.
  As a Senator and a father of two 3\1/2\ year old boys, I am proud to 
support this bill and publically voice the need to invest in all 
children. There is no better way to utlize a dollar than to invest it 
in our future. Thank you Senator Voinovich and Senator Graham for 
initiating this legislation, I urge my colleagues, when the time comes, 
to support this bill and the message behind it.
                                 ______
                                 
      By Mr. BOND (for himself and Mr. Kerry):
  S. 1156. A bill to amend provisions of law enacted by the Small 
Business Regulatory Enforcement Fairness Act of 1996 to ensure full 
analysis of potential impacts on small entities of rules proposed by 
certain agencies, and for other purposes; to the Committee on Small 
Business.


 small business advocacy review panel technical amendments act of 1999

  Mr. BOND. Mr. President, I rise today to introduce ``The Small 
Business Advocacy Review Panel Technical Amendments Act of 1999.'' I am 
pleased to be joined by Senator Kerry, the Ranking Member on the Small 
Business Committee, which I chair. Our bill is simple and 
straightforward. It clarifies and amends certain provisions of law 
enacted as part of my ``Red Tape Reduction Act,'' the Small Business 
Regulatory Enforcement Fairness Act of 1996. In 1996, this body led the 
way toward enactment of this important law. With a unanimous vote, we 
took a major step to ensure that small businesses are treated fairly by 
federal agencies.
  Like the Regulatory Flexibility Act, which it amended, the Red Tape 
Reduction Act is a remedial statute, designed to redress the fact that 
uniform federal regulations impose disproportionate impacts on small 
entities, including small business, small not-for-profits and small 
governments. A recent study conducted for the Office of Advocacy of the 
Small Business Administration documented, yet again, that small 
businesses continue to face higher regulatory compliance costs than 
their big-business counterparts. With the vast majority of businesses 
in this nation being small enterprises, it only makes sense for the 
rulemaking process to ensure that the concerns of such small entities 
get a fair airing early in the development of a federal regulation.
  The bill Senator Kerry and I are introducing focuses on Section 244 
of the Small Business Regulatory Enforcement Fairness Act of 1996, 
which amended chapter 6 of title 5, United States Code (commonly known 
as the Regulatory Flexibility Act). As a result, each ``covered 
agency'' is required to convene a Small Business Advocacy Review Panel 
(Panel) to receive advice and comments from small entities. 
Specifically, under section 609(b), each covered agency is to convene a 
Panel of federal employees, representing the Office of Information and 
Regulatory Affairs within the Office of Management and Budget, the 
Chief Counsel of Advocacy of the Small Business Administration, and the 
covered agency promulgating the regulation, to receive input from small 
entities prior to publishing an initial Regulatory Flexibility analysis 
for a proposed rule with a significant economic impact on a substantial 
number of small entities. The Panel, which convenes for 60 days, 
produces a report containing comments from the small entities and the 
Panel's own recommendations. The report is provided to the head of the 
agency, who reviews the report and, where appropriate, modifies the 
proposed rule, initial regulatory analysis or the decision on whether 
the rule significantly impacts small entities. The Panel report becomes 
a part of the rulemaking record.
  Consistent with the overall purpose of the Regulatory Flexibility Act 
and the Small Business Regulatory Enforcement Fairness Act, the 
objective of the Panel process is to minimize the adverse impacts and 
increase the benefits to small entities affected by the agency's 
actions. Consequently, the true proof of each Panel's effectiveness in 
reducing the regulatory burden on small entities is not known until the 
agency issues the proposed and final rules. So far, the results are 
encouraging.
  Under current law, the Occupational Safety and Health Administration 
(OSHA) and the Environmental Protection Agency (EPA) are the only 
agencies currently covered by the Panel process. Our bill adds the 
Internal Revenue Service (IRS) as a covered agency. In 1996, the Red 
Tape Reduction Act expressly included the IRS under the Regulatory 
Flexibility Act; however, the Treasury Department has interpreted the 
language in the law in a manner that essentially writes them out of the 
law. The Small Business Advocacy Review Panel Technical Amendments Act 
of 1999 clarifies which interpretative rules involving the internal 
revenue code are to be subject to compliance with the Regulatory 
Flexibility Act, for those rules with a significant economic impact on 
a substantial number of small entities, the IRS would be required to 
convene a Small Business Advocacy Review Panel.
  If the Treasury Department and the IRS had implemented the Red Tape 
Reduction Act as Congress originally intended, the regulatory burdens 
on small businesses could have been reduced, and small businesses could 
have been saved considerable trouble in fighting unwarranted rulemaking 
actions. For instance, with input from the small business community 
early in the process, the IRS' 1997 temporary regulations on the 
uniform capitalization rules could have had taken into consideration 
the adverse effects that inventory accounting would have on farming 
businesses, and especially nursery growers. Similarly, if the IRS had 
conducted an initial Regulatory

[[Page 11388]]

Flexibility, it would have learned of the enormous problems surrounding 
its limited partner regulations prior to issuing the proposal in 
January 1997. These regulations, which became known as the ``stealth 
tax regulations,'' would have raised self-employment taxes on countless 
small businesses operated as limited partnerships or limited liability 
companies, and also would have imposed burdensome new recordkeeping and 
collection of information requirements.
  Specifically, the bill strikes the language in section 603 of title 5 
that included IRS interpretative rules under the Regulatory Flexibility 
Act, ``but only to the extent that such interpretative rules impose on 
small entities a collection of information requirement.'' The Treasury 
Department has misconstrued this language in two ways. First, unless 
the IRS imposes a requirement on small businesses to complete a new 
OMB-approved form, the Treasury says Reg Flex does not apply. Second, 
in the limited circumstances where the IRS has acknowledged imposing a 
new reporting requirement, the Treasury has limited its analysis of the 
impact on small businesses to the burden imposed by the form. As a 
result, the Treasury Department and the IRS have turned Reg Flex 
compliance into an unnecessary, second Paperwork Reduction Act.
  To address this problem, our bill revises the critical sentence in 
Section 603 to read as follows:

       In the case of an interpretative rule involving the 
     internal revenue laws of the United States, this chapter 
     applies to interpretative rules (including proposed, 
     temporary and final regulations) published in the Federal 
     Register for codification in the Code of Federal Regulations.

  Coverage of the IRS under the Panel process and the technical changes 
I have just described are strongly supported by the Small Business 
Legislative Council, the National Association for the Self-Employed, 
and many other organizations representing small businesses. Even more 
significantly, these changes have the support of the Chief Counsel for 
Advocacy. I ask unanimous consent to include in the Record following 
this statement copies of letters and statements from these small 
business advocates.
  The remaining provisions of our bill address the mechanics of 
convening a Panel and the selection of the small entity representatives 
invited to submit advice and recommendations to the Panel. While these 
provisions are very similar to the legislation introduced in the other 
body (H.R. 1882) by our colleagues Representatives Talent, Velazquez, 
Kelly, Bartlett, and Ewing, Senator Kerry has expressed some specific 
concerns regarding the potential for certain provisions to be 
misconstrued. I have agreed to work with him to address his concerns in 
report language and, if necessary, with minor revisions to the bill 
text.
  Our mutual goal is to ensure that the views of small entities are 
brought forth through the Panel process and taken to heart by the 
``covered agency'' and other federal agencies represented on the 
Panel--in short, to continue the success that EPA and OSHA have shown 
this process has for small businesses. I thank the Senator from 
Massachusetts for his support, and ask unanimous consent that the Small 
Business Advocacy Review Panel Technical Amendments Act of 1999 be 
printed, following this statement.
  Mr. President, I ask unanimous consent that the bill and additional 
material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1156

       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 ``Small Business Advocacy 
     Review Panel Technical Amendments Act of 1999''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds the following:
       (1) A vibrant and growing small business sector is critical 
     to creating jobs in a dynamic economy.
       (2) Small businesses bear a disproportionate share of 
     regulatory costs and burdens.
       (3) Federal agencies must consider the impact of their 
     regulations on small businesses early in the rulemaking 
     process.
       (4) The Small Business Advocacy Review Panel process that 
     was established by the Small Business Regulatory Enforcement 
     Fairness Act of 1996 has been effective in allowing small 
     businesses to participate in rules that are being developed 
     by the Environmental Protection Agency and the Occupational 
     Safety and Health Administration.
       (b) Purposes.--The purposes of this Act are the following:
       (1) To provide a forum for the effective participation of 
     small businesses in the Federal regulatory process.
       (2) To clarify and strengthen the Small Business Advocacy 
     Review Panel process.
       (3) To expand the number of Federal agencies that are 
     required to convene Small Business Advocacy Review Panels.

     SEC. 3. ENSURING FULL ANALYSIS OF POTENTIAL IMPACTS ON SMALL 
                   ENTITIES OF RULES PROPOSED BY CERTAIN AGENCIES.

       Section 609(b) of title 5, United States Code, is amended 
     to read as follows:
       ``(b)(1) Before the publication of an initial regulatory 
     flexibility analysis that a covered agency is required to 
     conduct under this chapter, the head of the covered agency 
     shall--
       ``(A) notify the Chief Counsel for Advocacy of the Small 
     Business Administration (in this subsection referred to as 
     the `Chief Counsel') in writing;
       ``(B) provide the Chief Counsel with information on the 
     potential impacts of the proposed rule on small entities and 
     the type of small entities that might be affected; and
       ``(C) not later than 30 days after complying with 
     subparagraphs (A) and (B)--
       ``(i) with the concurrence of the Chief Counsel, identify 
     affected small entity representatives; and
       ``(ii) transmit to the identified small entity 
     representatives a detailed summary of the information 
     referred to in subparagraph (B) or the information in full, 
     if so requested by the small entity representative, for the 
     purposes of obtaining advice and recommendations about the 
     potential impacts of the draft proposed rule.
       ``(2)(A) Not earlier than 30 days after the covered agency 
     transmits information pursuant to paragraph (1)(C)(ii), the 
     head of the covered agency shall convene a review panel for 
     the draft proposed rule. The panel shall consist solely of 
     full-time Federal employees of the office within the covered 
     agency that will be responsible for carrying out the proposed 
     rule, the Office of Information and Regulatory Affairs of the 
     Office of Management and Budget, and the Chief Counsel.
       ``(B) The review panel shall--
       ``(i) review any material the covered agency has prepared 
     in connection with this chapter, including any draft proposed 
     rule;
       ``(ii) collect advice and recommendations from the small 
     entity representatives identified under paragraph (1)(C)(i) 
     on issues related to paragraphs (3), (4), and (5) of section 
     603(b) and section 603(c); and
       ``(iii) allow any small entity representative identified 
     under paragraph (1)(C)(i) to make an oral presentation to the 
     panel, if requested.
       ``(C) Not later than 60 days after the date a covered 
     agency convenes a review panel pursuant to this paragraph, 
     the review panel shall report to the head of the covered 
     agency on--
       ``(i) the comments received from the small entity 
     representatives identified under paragraph (1)(C)(i); and
       ``(ii) its findings regarding issues related to paragraphs 
     (3), (4), and (5) of section 603(b) and section 603(c).
       ``(3)(A) Except as provided in subparagraph (B), the head 
     of the covered agency shall print in the Federal Register the 
     report of the review panel under paragraph (2)(C), including 
     any written comments submitted by the small entity 
     representatives and any appendices cited in the report, as 
     soon as practicable, but not later than--
       ``(i) 180 days after the date the head of the covered 
     agency receives the report; or
       ``(ii) the date of the publication of the notice of 
     proposed rulemaking for the proposed rule.
       ``(B) The report of the review panel printed in the Federal 
     Register shall not include any confidential business 
     information submitted by any small entity representative.
       ``(4) Where appropriate, the covered agency shall modify 
     the draft proposed rule, the initial regulatory flexibility 
     analysis for the draft proposed rule, or the decision on 
     whether an initial regulatory flexibility analysis is 
     required for the draft proposed rule.''.

     SEC. 4. DEFINITIONS.

       Section 609(d) of title 5, United States Code, is amended 
     to read as follows:
       ``(d) For the purposes of this section--
       ``(1) the term `covered agency' means the Environmental 
     Protection Agency, the Occupational Safety and Health 
     Administration of the Department of Labor, and the Internal 
     Revenue Service of the Department of the Treasury; and
       ``(2) the term `small entity representative' means a small 
     entity, or an individual or organization that represents the 
     interests of 1 or more small entities.''.

[[Page 11389]]



     SEC. 5. COLLECTION OF INFORMATION REQUIREMENT.

       (a) Definition.--Section 601 of title 5, United States 
     Code, is amended--
       (1) in paragraph (5) by inserting ``and'' after the 
     semicolon;
       (2) in paragraph (6) by striking ``; and'' and inserting a 
     period; and
       (3) by striking paragraphs (7) and (8).
       (b) Initial Regulatory Flexibility Analysis.--The fourth 
     sentence of section 603 of title 5, United States Code, is 
     amended to read as follows: ``In the case of an 
     interpretative rule involving the internal revenue laws of 
     the United States, this chapter applies to interpretative 
     rules (including proposed, temporary, and final regulations) 
     published in the Federal Register for codification in the 
     Code of Federal Regulations.''.

     SEC. 6. EFFECTIVE DATE.

       This Act shall take effect upon the expiration of the 90-
     day period beginning on the date of the enactment of this 
     Act.
                                  ____



                           Small Business Legislative Council,

                                     Washington, DC, May 24, 1999.
     Hon. Kit Bond,
     Chairman, Committee on Small Business, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman: On behalf of the Small Business 
     Legislative Council (SBLC), I would like to offer our strong 
     support for your legislation to expand the Small Business 
     Regulatory Enforcement Fairness Act (SBREFA) to encompass 
     more of the activities of the Internal Revenue Service (IRS).
       As you know, there is nothing more annoying to the small 
     business community than when the IRS issues a proposed rule 
     and it is obvious the authors have little or no understanding 
     of the business practices of the small businesses to be 
     covered by the rule.
       OSHA and the EPA have also been identified in the past as 
     agencies guilty of acting without a solid understanding of an 
     industry. Thanks to your leadership, the 104th Congress fixed 
     the problem in the case of EPA and OSHA by enacting SBREFA. 
     Those two agencies must go out and collect information on 
     small business before they finish development of a proposed 
     rule. The law requires the OSHA and EPA to increase small 
     business participation in agency rulemaking activities by 
     convening a Small Business Advocacy Review Panel for a 
     proposed rule with a significant economic impact on small 
     entities. For such rules, the agencies must notify SBA's 
     Chief Counsel of Advocacy that the rule is under development 
     and provide sufficient information so that the Chief Counsel 
     can identify affected small entities and gather advice and 
     comments on the effects of the proposed rule. A Small 
     Business Advocacy Review Panel, comprising Federal government 
     employees from the agency, the Office of Advocacy, and OMB, 
     must be convened to review the proposed rule and to collect 
     comments from small businesses. Within 60 days, the panel 
     must issue a report of the comments received from small 
     entities and the panel's findings, which become part of the 
     public record.
       As we have said many times before, we believe your ``red 
     tape cutting'' law, SBREFA, is one of the most significant 
     small business laws of all time. As you know first hand, for 
     a variety of reasons, the IRS was not included. This omission 
     should be corrected. If there is one agency with ongoing 
     rulemaking responsibilities that have an impact on small 
     business, it is the IRS.
       In addition, the other provisions of SBREFA apply only to 
     the IRS when the interpretative rule of the IRS will ``impose 
     on small entities a collection of information requirement.'' 
     We already know the IRS has embraced an extraordinarily 
     narrow interpretation of that phrase. We should take this 
     opportunity to amend SBREFA to ensure the IRS complies with 
     SBREFA any time it issues an interpetative regulation.
       As you know, the SBLC is a permanent, independent coalition 
     of eighty trade and professional associations that share a 
     common commitment to the future of small business. Our 
     members represent the interests of small businesses in such 
     diverse economic sectors as manufacturing, retailing, 
     distribution, professional and technical services, 
     construction, transportation, tourism and agriculture. Our 
     policies are developed through a consensus among our 
     membership. Individual associations may express their own 
     views. For your information, a list of our members is 
     enclosed.
       As always, we appreciate your outstanding leadership on 
     behalf of small business.
           Sincerely,
                                                      David Gorin,
     Chairman.
                                  ____


           Members of the Small Business Legislative Council

       ACIL
       Air Conditioning Contractors of America
       Alliance for Affordable Services
       Alliance for American Innovation
       Alliance of Independent Store Owners and Professionals
       American Animal Hospital Association
       American Association of Equine Practitioners
       American Bus Association
       American Consulting Engineers Council
       American Machine Tool Distributors Association
       American Nursery and Landscape Association
       American Road & Transportation Builders Association
       American Society of Interior Designers
       American Society of Travel Agents, Inc.
       American Subcontractors Association
       American Textile Machinery Association
       American Trucking Associations, Inc.
       Architectural Precast Association
       Associated Equipment Distributors
       Associated Landscape Contractors of America
       Association of Small Business Development Centers
       Association of Sales and Marketing Companies
       Automotive Recyclers Association
       Automotive Service Association
       Bowling Proprietors Association of America
       Building Service Contractors Association International
       Business Advertising Council
       CBA
       Council of Fleet Specialists
       Council of Growing Companies
       Direct Selling Association
       Electronics Representatives Association
       Florists' Transworld Delivery Association
       Health Industry Representatives Association
       Helicopter Association International
       Independent Bankers Association of America
       Independent Medical Distributors Association
       International Association of Refrigerated Warehouses
       International Formalwear Association
       International Franchise Association
       Machinery Dealers National Association
       Mail Advertising Service Association
       Manufacturers Agents for the Food Service Industry
       Manufacturers Agents National Association
       Manufacturers Representatives of America, Inc.
       National Association for the Self-Employed
       National Association of Home Builders
       National Association of Plumbing-Heating-Cooling 
     Contractors
       National Association of Realtors
       National Association of RV Parks and Campgrounds
       National Association of Small Business Investment Companies
       National Association of the Remodeling Industry
       National Chimney Sweep Guild
       National Community Pharmacists Association
       National Electrical Contractors Association
       National Electrical Manufacturers Representatives 
     Association
       National Funeral Directors Association, Inc.
       National Lumber & Building Material Dealers Association
       National Moving and Storage Association
       National Ornamental & Miscellaneous Metals Association
       National Paperbox Association
       National Society of Accountants
       National Tooling and Machining Association
       National Tour Association
       National Wood Flooring Association
       Organization for the Promotion and Advancement of Small 
     Telephone Companies
       Petroleum Marketers Association of America
       Printing Industries of America, Inc.
       Professional Lawn Care Association of America
       Promotional Products Association International
       The Retailer's Bakery Association
       Saturation Mailers Coalition
       Small Business Council of America, Inc.
       Small Business Exporters Association
       Small Business Technology Coalition
       SMC Business Councils
       Society of American Florists
       Turfgrass Producers International
       Tire Association of North America
       United Motorcoach Association
                                  ____

                                               Office of Advocacy,


                           U.S. Small Business Administration,

                                     Washington, DC, May 26, 1999.
     Hon. Kit Bond,
     Chairman, Committee on Small Business, U.S. Senate, 
         Washington, DC.
       Dear Chairman Bond: This is in response to your request for 
     my views as to whether the Small Business Regulatory 
     Enforcement Fairness Act of 1996 (SBREFA) should be amended 
     to include more activities of the Internal Revenue Service 
     (IRS).
       The proposed amendments to SBREFA are constructive. In 
     particular, applying the requirement that IRS convene Small 
     Business Advocacy Review Panels to consider the impact of 
     proposed rules involving the internal revenue laws is a goal 
     that certainly would give small businesses a stronger voice 
     in a process that affects them so dramatically.
       The panel process has applied since 1996 to the 
     Environmental Protection Agency (EPA) and the Occupational 
     Safety and Health Administration (OSHA). A panel, comprising 
     the administrator of EPA or OSHA, the Chief

[[Page 11390]]

     Counsel for Advocacy of the Small Business Administration, 
     and the director of the Office of Information and Regulatory 
     Affairs, collects comments from representatives of small 
     entities. Then the panel issues a report on the comments and 
     the panel's findings within 60 days. This process has been 
     extremely helpful in identifying the likely impact of major 
     rules on small entities, yet its tight timetable has assured 
     that needed rules are not delayed unduly.
       Tax regulations impose the most widespread burdens on small 
     business. Therefore, it is important to have small business 
     input at the earliest possible stage of rulemaking. This 
     amendment builds on an existing panel process that is working 
     well. The panel process would bring a new level of scrutiny 
     to tax regulations, some of which have added immensely to 
     small entity burdens in the past.
       At the same time, I am mindful that this expansion will add 
     significantly to the workload of both the Office of Advocacy 
     and the IRS, and I hope suitable staffing adjustments to 
     accommodate this important added work will be made.
       Thank you for soliciting my views.
           Sincerely,
                                                   Jere W. Glover,
                                       Chief Counsel for Advocacy.

  Mr. KERRY. Mr. President, as Ranking Democrat on the Committee on 
Small Business, I join Committee Chairman Bond in introducing the Small 
Business Advocacy Review Panel Technical Amendments Act of 1999. While 
there are a few minor points that Chairman Bond and I have agreed to 
work out before the Committee considers the bill, we both agree that 
this is an important piece of legislation which should be enacted 
promptly to facilitate the Small Business Enforcement Fairness Act 
process. This process enables small entity representatives to 
participate in rulemakings by the Environmental Protection Agency 
(EPA), the Occupational Safety and Health Administration (OSHA), and, 
under this bill, the Internal Revenue Service (IRS) of the Department 
of Treasury.
  This bill improves and enhances the Small Business Regulatory 
Enforcement Fairness Act of 1996, which has not only reduced regulatory 
burdens that otherwise would have been placed on small businesses, but 
also has begun to institute a fundamental change in the way Federal 
agencies promulgate rules that could have ``a substantial economic 
impact on a substantial number of small businesses.'' Federal agencies 
are required under existing law to form so-called SBREFA panels in 
conjunction with the Office of Information and Regulatory Affairs in 
the Office of Management and Budget, and with small entities, or their 
representatives. These SBREFA panels are charged with creating flexible 
regulatory options that would allow small businesses to continue to 
operate without sacrificing the environmental, or health and safety 
goals of the proposed rule.
  These panels have been highly effective in saving small businesses 
regulatory compliance costs. To date, seventeen (17) Small Business 
Regulatory Enforcement Fairness Act panels have been convened by the 
EPA, and three (3) by the OSHA. According to SBA's Office of Advocacy, 
since the law's enactment in 1996, the EPA SBREFA panels have saved 
small businesses almost $1 billion, and the OSHA SBREFA panels have 
saved small businesses about $2 billion.
  While the process has obviously worked well to date, there are a few 
technical changes that we are proposing to help the process work even 
better. These changes were recommended by selected small entity 
representatives who have experience with the SBREFA panel process, and 
who testified at a joint hearing held by the House Small Business 
Committee's Subcommittees on Regulatory Reform and Paperwork Reduction, 
and Government Programs and Oversight on March 11, 1999.
  Let me take a minute to describe the provisions of the bill.
  This bill would lengthen by thirty (30) days the time that small 
entity representatives have to review the usually technical and 
voluminous materials to be considered during panel deliberations. For 
those small businessmen and women who would like to participate but do 
not have a great deal of time to review technical data, the bill 
requires OSHA, EPA and IRS to prepare detailed summaries of background 
data and information.
  The bill would also allow a small entity representative, if he or she 
so chooses to, make an oral presentation to the panel.
  Many small entities have expressed their interest in reviewing the 
panel report before the rule is proposed, and this bill would require 
the panel report to be printed in the Federal Register either as soon 
as practicable or with the proposed rule, but in no case, later than 
six (6) months after the rule is proposed.
  Moreover, the bill would add certain rules issued by Internal Revenue 
Service to the panel requirements of SBREFA. Many small businesses 
complain that they are overwhelmed with the large burdens that the IRS 
places on them. It is the goal of this bill to hold the IRS accountable 
for the interpretative rules they issue that have a major impact on 
small business concerns, and to open up the rulemaking process so small 
entities can participate.
  This new authority would significantly increase the workload of SBA's 
Office of Advocacy, the Federal office charged with monitoring agency 
compliance with the Regulatory Flexibility Act, including SBREFA. 
Chairman Bond and I agree that it is important that the Office of 
Advocacy have adequate resources to fulfill the new responsibilities 
mandated by this bill. Therefore, we plan to send a letter jointly to 
Appropriations Subcommittee on Commerce, Justice and State Chairman and 
Ranking Member Senators Gregg and Hollings requesting them to approve 
additional funding for the Office of Advocacy to handle these 
additional responsibilities under the law.
  I am proud to support this legislation. I believe it will result in 
significant savings for small businesses and will improve the mechanism 
for their voices to be heard.
  Finally, I would like to thank Chairman Bond and his staff for their 
efforts working with me and my staff to produce this important bill.
                                 ______
                                 
      By Mr. SMITH of New Hampshire (for himself, Mr. Inhofe, Mr. 
        Thurmond, Mr. Nickles, Mr. Helms, and Mr. Cochran):
  S. 1157. A bill to repeal the Davis-Bacon Act and the Copeland Act; 
to the Committee on Health, Education, Labor, and Pensions.


                     davis-bacon repeal act of 1999

  Mr. SMITH of New Hampshire. Mr. President, I rise today to introduce 
the Davis-Bacon Repeal Act of 1999. This legislation would repeal the 
Davis-Bacon Act of 1931, which guarantees high wages for workers on 
Federal construction projects, and the Copeland Act, which imposes 
weekly payroll reporting requirements.
  Davis-Bacon requires contractors on Federal construction projects 
costing over $2,000 to pay their workers no less than the ``prevailing 
wage'' for comparable work in their local area. The U.S. Department of 
Labor has the final say on what the term ``prevailing wage'' means, but 
the prevailing wage usually is based on union-negotiated wages.
  My bill would allow free market forces, rather than bureaucrats at 
the Labor Department in Washington, DC., to determine the amount of 
construction wages. There is simply no need to have the Labor 
Department dictating wage rates for workers on Federal construction 
projects in every locality in the United States.
  The Department of Labor's Office of the Inspector General recently 
issues a devastating report showing that inaccurate information had 
been used in Davis-Bacon wage determinations in several states. The 
errors caused wages or fringe benefits to be overstated by as much as 
$1.00 per hour, in some cases. If Davis-Bacon were repealed, American 
taxpayers would save more than $3 billion over a 5-year period, 
according to the Congressional Budget Office.
  Davis-Bacon also stifles competition in Federal bidding for 
construction projects, especially with respect to small businesses. 
Small construction companies are not knowledgeable about Federal 
contracting procedures; and they simply cannot afford to hire

[[Page 11391]]

the staff needed to comply with Davis-Bacon's complex work rules and 
reporting requirements.
  Congress passed Davis-Bacon during the Great Depression, a period in 
which work was scarce. In those days, construction workers were willing 
to take what jobs they could find, regardless of the wage rate; most 
construction was publicly financed; and there were no other Federal 
worker protections on the books.
  Conditions in the construction industry have changed a lot since 
then, however. Today, unemployment rates are low, and public works 
construction makes up only about 20 percent of the construction 
industry's activity. Also, we now have many Federal laws on the books 
to protect workers. Such laws include the Fair Labor Standards Act of 
1938, which imposes a general minimum wage, the Occupational Safety and 
Health Act of 1970, the Miller Act of 1935, the Contract Work House and 
Safety Standards Act of 1962, and the Social Security Act.
  Yet the construction industry still has to operate under Davis-
Bacon's inflexible 1930s work requirements and play by its payroll 
reporting rules. Under the law's craft-by-craft requirements, for 
example, contractors must pay Davis-Bacon wages for individuals who 
perform a given craft's work. In many cases, that means a contractor 
either must pay a high wage to an unskilled worker for performing 
menial tasks, or he must pay a high wage to an experienced worker for 
these menial tasks. These requirements reduce productivity.
  A related problem with Davis-Bacon is that it reduces entry-level 
jobs and training opportunities for the disadvantaged. Because the law 
makes it costly for contractors to hire lower-skilled workers on 
construction projects, the statute creates a disincentive to hire 
entry-level workers and provide on-the-job training.
  The Congressional Budget Office raised this issue in its analysis, 
``Modifying the Davis-Bacon Act: Implications for the Labor Market and 
the Federal Budget.'' As stated in that 1983 study:

       Although the effect of Davis-Bacon on wages receives the 
     most attention, the Act's largest potential cost impact may 
     derive from its effect on the use of labor. For one thing, 
     DOL wage determinations require that, if an employee does the 
     work of a particular craft, the wage paid should be for the 
     craft.
       For example, carpentry work must be paid for at carpenters' 
     wages, even if performed by a general laborer, helper or 
     member of another craft.

  Moreover, the General Accounting Office has maintained that the 
Davis-Bacon Act is no longer needed. GAO began to openly question 
Davis-Bacon in the 1960s; and in 1979, it issued a report calling for 
the Act's repeal. Titled ``The Davis-Bacon Act Should Be Repealed,'' 
the report states: ``[o]ther wage legislation and changes in economic 
conditions and in the construction industry since the law was passed 
make the law obsolete; and the law is inflationary.''
  To those who remain unconvinced that Davis-Bacon is bad public 
policy, I urge a review of the Act's legislative history. Some early 
supporters of Davis-Bacon advocated its passage as a means to 
discriminate against minorities. For instance, Clayton Allgood, a 
member of the 71st Congress, argued on the House floor that Davis-Bacon 
would keep contractors from employing ``cheap colored labor'' on 
construction projects. As stated by Congressman Allgood on February 28, 
1931, ``it is labor of that sort that is in competition with white 
labor throughout the country.'' Unfortunately, Davis-Bacon still has 
the effect of keeping minority-owned construction firms from competing 
for Federal construction contract, because many such firms are small 
businesses.
  Early supporters of Davis-Bacon also believed that the law would 
prevent outside contractors from undermining local firms in the Federal 
bidding process. In practice, however, Davis-Bacon wages hurt local 
businesses and make it more likely that outside contractors will win 
bids for Federal projects.
  Mr. President, for all of the above reasons, I believe that the 
Davis-Bacon Act should be repealed. I urge my colleagues to support the 
Davis-Bacon Repeal Act of 1999.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1157

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

     SECTION 1. DAVIS-BACON ACT.

       (a) Repeal.--The Act of March 3, 1931 (40 U.S.C. 276a et 
     seq.) (commonly referred to as the Davis-Bacon Act) is 
     repealed.
       (b) References.--Any reference in any law to a wage 
     requirement of the Act of March 3, 1931, shall after the date 
     of the enactment of this Act be null and void.

     SEC. 2. COPELAND ACT.

       Section 2 of the Act of June 13, 1934 (40 U.S.C. 276c) 
     (commonly referred to as the ``Copeland Act'') is repealed.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by sections 1 and 2 shall take effect 
     30 days after the date of the enactment of this Act but shall 
     not affect any contract in existence on such date of 
     enactment or made pursuant to invitation for bids outstanding 
     on such date of enactment.

  Mr. NICKLES. Mr. President, I am happy to join Senator Bob Smith as a 
cosponsor of the Davis-Bacon Repeal Act of 1999.
  I believe Davis-Bacon repeal is long overdue. This 68-year-old 
legislation requires contractors to pay workers on federally-subsidized 
projects what the Labor Department determines is the local prevailing 
wage. What Davis-Bacon actually does is cost the Federal Government 
billions of dollars, divert funds out of vitally important projects, 
and limit opportunities for employment.
  In my own State of Oklahoma, it has been proven that many 
``prevailing wages'' have been calculated using fictitious projects, 
ghost workers, and companies established to pay artificially high 
wages. Oklahoma officials have reported that many of the wage survey 
forms submitted to the U.S. Department of Labor to calculate Federal 
wage rates in Oklahoma were wrong or fraudulent.
  Records showed that an underground storage tank was built using 20 
plumbers and pipefitters paid $21.05 an hour but no such tank was ever 
built. In another case, several asphalt machine operators were reported 
to have been employed at $15 an hour to build a parking lot but the lot 
was made of concrete, there were no asphalt operators, and the actual 
Davis-Bacon wage should have been $8 an hour. Ultimately, the Oklahoma 
Secretary of Labor established that at least two of the inflated 
Oklahoma reports were filled out by union officials.
  The Davis-Bacon Act also diverts urgently needed Federal funds. After 
the 1995 bombing of the Murrah Federal building in Oklahoma City, Mayor 
Ron Norick of Oklahoma City estimated that the city could have saved 
$15 million in construction costs had the President waived the Davis-
Bacon Act.
  This money could have been used to provided additional assistance to 
those impacted by the bombing and to further rebuild the area around 
the Murrah site. The Federal role in disaster situations should be to 
empower communities and foster flexibility so that rebuilding efforts 
can proceed in the best manner possible.
  The Congress should repeal a law that discourages, rather than 
encourages, the employment of lower skilled or non-skilled workers.
  Davis-Bacon began as a way to keep small and minority businesses out 
of the government pie, and today it still does, reaching even further. 
Repeal of the act will take wage setting out of the hands of 
bureaucrats and return the determination of labor costs on construction 
projects to the efficiencies of the competitive marketplace. This would 
result in a more sound fiscal policy through payment of actual market-
based local wage rates; more entry-level jobs in construction industry 
for youth, minorities, and women; and more small businesses bidding on 
Federal contracts.
  The Davis-Bacon Repeal Act will provide increased job opportunities 
for those who might not ordinarily have the chance to enter the 
workforce, the

[[Page 11392]]

opportunity to learn a trade, and the opportunity to climb the economic 
ladder.
  I applaud Senator Smith for his efforts and appreciate the chance to 
cosponsor this bill.
                                 ______
                                 
      By Mr. HUTCHINSON:
  S. 1158. A bill to allow the recovery of attorney's fees and costs by 
certain employers and labor organizations who are prevailing parties in 
proceedings brought against them by the National Labor Relations Board 
or by the Occupational Safety and Health Administration; to the 
Committee on Health, Education, Labor, and Pensions.


             FAIR ACCESS TO INDEMNITY AND REIMBURSEMENT ACT

 Mr. HUTCHINSON. Mr. President, it is my honor today to 
introduce the ``Fair Access to Indemnity and Reimbursement Act'' (the 
``FAIR Act''), which will amend the National Labor Relations Act and 
the Occupational Safety and Health Act to provide that a small employer 
prevailing against either agency will be automatically entitled to 
recover the attorney's fees and expenses it incurred to defend itself.
  The FAIR Act is necessary because the National Labor Relations Board 
(``NLRB'') and Occupational Safety and Health Agency (``OSHA'') are two 
aggressive, well-funded agencies which share a ``find and fine'' 
philosophy. The destructive consequences that small businesses suffer 
as a result of these agencies' ``find and fine'' approach are magnified 
by the abuse of ``salting'' or the placement of paid union organizers 
and their agents in non-union workplaces for the sole purpose of 
disrupting the workforce. ``Salting abuse'' occurs when ``salts'' 
create labor law violations or workplace hazards and then file 
frivolous claims with the NLRB or OSHA. Businesses are then often 
forced to spend thousands and sometimes hundreds of thousands of 
dollars to defend themselves against NLRB or OSHA as these agencies 
vigorously prosecute these frivolous claims. Accordingly, many 
businesses, when faced with the cost of a successful defense, make a 
bottom-line decision to settle these frivolous claims rather than going 
out of business or laying off employees in order to finance costly 
litigation.
  The ``FAIR Act'' will allow these employers to defend themselves 
rather than settling, and, more importantly, it will force the NLRB or 
OSHA to ensure that the claims they pursue are worthy of their efforts. 
The FAIR Act will accomplish this by allowing employers with up to 100 
employees and a net worth of up to $7,000,000 to recover their 
attorneys fees and litigation expense directly from the NLRB or OSHA, 
regardless of whether those agencies' decision to pursue the case was 
``substantially justified'' or ``special circumstances'' make an award 
of attorneys fees unjust. Thus, the Congressional intent behind the 
broadly supported, bi-partisan ``Equal Access to Justice Act'' 
(``EAJA'') to ``level the playing field'' for small businesses will 
finally be realized.
  The ``FAIR Act'' is solid legislation; it is a common sense attempt 
to give small businesses the means to defend themselves against unfair 
actions. Accordingly, I ask my colleagues for their cooperation and 
assistance as I work to ensure that the ``FAIR Act'' is enacted into 
law.
                                 ______
                                 
      By Mr. STEVENS (for himself, Mr. Cochran, Mr. Inouye, Mr. Hagel, 
        Mr. Bingaman, Mr. Shelby, Mr. Levin, Mr. Dodd, and Mr. 
        Thurmond):
  S. 1159. A bill to provide grants and contracts to local educational 
agencies to initiate, expand, and improve physical education programs 
for all kindergarten through 12th grade students; to the Committee on 
Health, Education, Labor, and Pensions.


                  physical education for progress act

  Mr. STEVENS. Mr. President, today I send to the desk and introduce 
the Physical Education for Progress--or ``PEP''--Act. My bill would 
provide incentive grants for local school districts to develop minimum 
weekly requirements for physical education, and daily physical 
education if possible.
  Every student in our Nation's schools, from kindergarten through 
grade 12, should have the opportunity to participate in quality 
physical education. Children need to know that physical activity can 
help them feel good, be successful in school and work, and stay 
healthy.
  Engaging in sports activities provides lessons about teamwork and 
dealing with defeat. In my judgment, physical activity and sports are 
an important educational tool, and the lessons of sports may help 
resolve some of the problems that lead to violence in schools.
  Regular physical activity produces short-term health benefits and 
reduces long-term risks for chronic disease, disability and premature 
death. Despite the proven benefits of being physically active, more 
than 60 percent of American adults do not engage in levels of physical 
activity necessary to provide health benefits.
  More than a third of young people in our country aged 12 to 21 years 
do not regularly engage in vigorous physical activity, and the 
percentage of overweight young Americans has more than doubled in the 
past 30 years. Daily participation in high school physical education 
classes dropped from 42 percent in 1991 to 27 percent in 1997. Right 
now, only one state in our union--Illinois--currently requires daily 
physical education for grades K through 12. I think that is a 
staggering statistic. Only one State requires daily physical education 
for our children.
  The impact of our poor health habits is staggering: obesity-related 
diseases now cost the Nation more than $100 billion per year, and 
inactivity and poor diet cause more than 300,000 deaths per year in the 
United States.
  We know from the Centers for Disease Control and others that lifelong 
health-related habits, including physical activity and eating patterns, 
are often established in childhood. Because ingrained behaviors are 
difficult to change as people grow older, we need to reach out to young 
people early, before health-damaging behaviors are adopted.
  To me, schools provide an ideal opportunity to make an enormous, 
positive impact on the health of our Nation. The PEP Act, to me, is an 
important step toward improving the health of our Nation. The PEP Act 
would help schools get regular physical activity back into their 
programs. We can, and should, help our youth establish solid health 
habits at an early age.
  The incentive grants provided for by my bill could be used to provide 
physical education equipment and support to students, to enhance 
physical education curricula, and to train and educate physical 
education teachers.
  The future cost savings in health care for emphasizing the importance 
of physical activity to a long and healthy life, to me, are immense.
                                 ______
                                 
      By Mr. GRASSLEY (for himself and Mrs. Feinstein):
  S. 1160. A bill to amend the Internal Revenue Service Code of 1986 to 
provide marriage penalty relief, incentives to encourage health 
coverage, and increased child care assistance, to extend certain 
expiring tax provisions, and for other purposes; to the Committee on 
Finance.


              tax relief for working americans act of 1999

  Mr. GRASSLEY. Mr. President, today I am being joined by Senator 
Feinstein in introducing the ``Tax Relief for Working Americans Act of 
1999''. Congresswoman Nancy Johnson is introducing companion 
legislation in the House. We're here today to declare victory in the 
debate over whether or not we should have significant tax relief for 
the American people. The President and most congressional Democrats 
have now joined Republicans in support of cutting taxes. The question 
now is not whether there should be tax cuts, but what kind, and how 
much. I can't think of a better problem to have.
  With our core tax cut plan, we're proposing a major first step in 
sending hard-earned dollars out of Washington and back to the taxpayer. 
I support an across the board tax cut. But, I'm afraid that if we do 
that first, we won't have any money left over to pay for tax cuts that 
people are telling me they really want, like addressing the marriage 
penalty, providing health care

[[Page 11393]]

tax relief, and more help for education. They want these problems in 
the tax code fixed first. An across the board cut won't fix these 
problems, it'll only compound them. That isn't fair. And we're saying 
fairness should come first.
  The President only offered modest tax cuts, along with a new 
retirement savings proposal that nobody understands, and many question 
whether it will work. And then, he wants to raise other taxes to pay 
for it. The President wants it both ways. He wants to be able to take 
credit for a tax cut on the one hand, while he's raising taxes on the 
other. We deserve what we get, if we let him get away with the double 
talk we all know so well.
  We have two alternatives. One is to push for an across the board tax 
cut first, and let the President and some in Congress play the class 
warfare card they play so well. And in the end, we probably end up with 
no tax relief. Senator Feinstein and I are saying that we should take 
the initiative and push for major tax relief that people really want 
and both Republicans and Democrats support. Our package will provide 
close to $300 billion in tax relief over ten years. I, for one, view 
this as a very strong starting point in determining how the coming on-
budget surplus will be used.
  Among other things, our bill will provide tax relief for senior 
citizens, those who are married, those who need to buy their own health 
insurance, and those who purchase long-term care insurance. Moreover, 
it will include provisions to ensure that parents who make use of 
education or child care tax credits are not hurt by the Alternative 
Minimum Tax. We also hope to improve the living standards of Americans 
through tax relief for urban revitalization, rural preservation, rental 
housing, and economic growth. We also provide needed tax assistance to 
farmers by shielding them from the Alternative Minimum Tax, and 
allowing them to set up special tax-deferred savings accounts to help 
them weather the ups and downs of farming. And, we help improve the 
environment by extending the production tax credit for wind energy and 
expanding the credit for biomass. I've strongly supported both of these 
alternative energies since taking the lead on them back in 1992.
  We think this package is a good start in the process of delivering 
tax relief to the American people, and I urge my colleagues to join us 
in this effort.
  Mrs. FEINSTEIN. Mr. President, I rise, along with my colleague from 
Iowa, to introduce the Tax Relief for Working Americans Act--what I 
consider to be a ``fair share'' tax plan. This bill, while protecting 
our Social Security and Medicare needs, will also allow all Americans 
to benefit from our economic prosperity.
  The American people are responsible for the more than $4 trillion in 
budget surpluses over the next 15 years, so it makes sense to give them 
some needed and deserved tax relief.
  The Tax Relief for Working Americans Act is a sensible and moderate 
bill that provides needed tax relief for working families. It does so, 
moreover, in a fiscally responsible manner which protects Social 
Security and Medicare. This tax plan is estimated to provide tax relief 
of $271 billion over ten years, fitting within the budget framework set 
out by the President to protect Social Security and Medicare.
  The legislation will provide relief to 21 million working couples who 
incur the marriage penalty by increasing the standard deduction to put 
them on equal footing with unmarried couples. A married couple in the 
28% bracket, for example, will save $392.
  It includes tax incentives for the over 30 million Americans who 
purchase their own health insurance or who pay more than 50% of their 
employer provided health care insurance. This means a family that earns 
$60,000 and pays $4,000 a year for health insurance will receive a tax 
credit of $2,400.
  And it will raise the Social Security Earnings test to $30,000, so 
that the 1.1 million seniors between the ages of 65 and 69 who earn 
more than $15,500 would be able to keep more of their hard earned 
dollars. For a 67 year old secretary who earns $30,000 a year this 
would mean she will save nearly $5,000.
  Under this legislation, millions of Americans who struggle to afford 
decent child care, will receive increased benefits from the Dependent 
Care Tax Credit. The credit will increase from 30% to 50% by 2004 and 
millions more will qualify for the maximum credit. When fully in 
effect, a family which earns $30,000 and spends $5,000 a year on child 
care for their two children will receive a $2,400 tax credit which 
should eliminate any federal tax liability.
  This legislation will also help to expand our economy by making 
permanent the Research and Development tax credit. Research and 
development is the backbone of our new technology driven economy. It is 
creating millions of high wage, high skilled jobs. The R&D credit has 
been extended 9 times since 1981, but it has been allowed to expire 4 
times during that period. Now is the time to make it permanent.
  There are also other important provisions in this legislation to 
promote long-term care, create more affordable housing, make education 
more affordable, and to help our farmers.
  I believe that this tax plan is one which can, and will, receive 
broad bipartisan support. It is a tax plan which Congress can pass and 
the President can sign. I urge my colleagues to work with the Senator 
from Iowa and myself, and to pass the Tax Relief for Working Americans 
Act.
                                 ______
                                 
      By Mr. BENNETT (for himself, Mrs. Murray, Mr. Schumer, and Mr. 
        Torricelli):
  S. 1163. A bill to amend the Public Health Service Act to provide for 
research and services with respect to lupus; to the Committee on 
Health, Education, Labor, and Pensions.


               lupus research and care amendments of 1999

 Mr. BENNETT. Mr. President, I rise today to introduce the 
Lupus Research and Care Amendments of 1999. This legislation would 
authorize additional funds for lupus research and grants for state and 
local governments to support the delivery of essential services to low-
income individuals with lupus and their families. The National 
Institute of Health (NIH) spent about $42 million less than one half of 
one percent of its budget on lupus research last year. I believe that 
we need to increase the funds that are available for research of this 
debilitating disease.
  Lupus is not a well-known disease, nor is it well understood. Yet, at 
least 1,400,000 Americans have been diagnosed with lupus and many more 
are either misdiagnosed or not diagnosed at all. More Americans have 
lupus than AIDS, cerebral palsy, multiple sclerosis, sickle-cell anemia 
or cystic fibrosis. Lupus is a disease that attacks and weakens the 
immune system and is often life-threatening. Lupus is nine times more 
likely to affect women than men. African-American women are diagnosed 
with lupus two to three times more often than Caucasian women. Lupus is 
also more prevalent among certain minority groups including Latinos, 
Native Americans and Asians.
  Because lupus is not well understood, it is difficult to diagnose, 
leading to uncertainty on the actual number of patients suffering from 
lupus. The symptoms of lupus make diagnosis difficult because they are 
sporadic and imitate the symptoms of many other illnesses. If diagnosed 
early and with proper treatment, the majority of lupus cases can be 
controlled. Unfortunately, because of the difficulties in diagnosing 
lupus and inadequate research, many lupus patients suffer debilitating 
pain and fatigue. The resulting effects make it difficult, if not 
impossible, for individuals suffering from lupus to carry on normal 
everyday activities including the demands of a job. Thousands of these 
debilitating cases needlessly end in death each year.
  Title I of the Lupus Research and Care Amendments of 1999 authorizes 
$75 million in grants starting in fiscal year 2000 to be earmarked for 
lupus research at NIH. This new authorization would amount to less than 
one half of one percent of NIH's total budget but would greatly enhance 
NIH's research.
  Title II of the Lupus Research and Care Amendments of 1999 authorizes 
$40 million in grants to state and local governments as well as to 
nonprofit organizations starting in fiscal year 2000. These funds would 
support the delivery

[[Page 11394]]

of essential services to low-income individuals with lupus and their 
families. I would urge all my colleagues, Mr. President, to join 
Senator Murray, Senator Torricelli, Senator Schumer, and myself in 
sponsoring this legislation to increase funding to fight lupus.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, and Mr. Mack)
  S. 1164. A bill to amend the Internal Revenue Code of 1986 to 
simplify certain rules relating to the taxation of United States 
business operating abroad, and for other purposes; to the Committee on 
Finance.


 international tax simplification for american competitiveness act of 
                                  1999

  Mr. HATCH. Mr. President, I rise today with my friend and colleagues 
Senators Baucus and Mack to introduce the International Tax 
Simplification for American Competitiveness Act of 1999. This bill will 
provide much-needed tax relief from complex and inconsistent tax laws 
that burden our American-owned companies attempting to complete in the 
world marketplace.
  Our foreign tax code is in desperate need of reform and 
simplification. The rules in this arena are way too complex and, often, 
their results are perverse.
  Mr. President, the American economy has experienced significant 
growth and prosperity. That success, however, is becoming more and more 
intertwined with the success of our business in the global marketplace. 
This has become even more obvious during the recent financial distress 
in Asia and Latin America. Yet, most people still do not realize the 
important contributions to our economy from U.S. companies with global 
operations. We have seen the share of U.S. corporate profits attributed 
to foreign operations rise from 7.5 percent in the 1960's to 17.7 
percent in the 1990's.
  As technology blurs traditional boundaries, and as competition 
continues to increase from previously lesser-developed nations, it is 
imperative that American-owned businesses be able to compete 
effectively.
  It seems to me that any rule, regulation, requirement, or tax that we 
can alleviate to enhance competitiveness will inure to the benefit of 
American companies, their employees, and shareholders.
  There are many barriers that the U.S. economy must overcome in order 
to remain competitive that Congress cannot hurdle by itself. For 
example, we have international trade negotiators working hard to remove 
the barriers to foreign markets that discourage and hamper U.S. trade. 
It is ironic, therefore, that one of the largest trade barriers is 
imposed by our own tax code on American companies operating abroad. 
Make no mistake: the complexities and inconsistencies in this section 
of the Tax Code have an appreciable adverse effect on our domestic 
economy.
  The failure to deal with the barriers in our own backyard will serve 
only to drive more American companies to other countries with simple, 
more favorable tax treatment. We just saw this occur with the merger of 
Daimler Benz and Chrysler. The new corporation will be headquartered in 
Germany due to the complex international laws of the United States.
  The business world is changing at an increasingly rapid pace. Tax 
laws have failed to keep pace with the rapid changes in the world 
technology and economy. Too many of the international provisions in the 
Internal Revenue Code have not been substantially debated and revised 
in over a decade. Since that time, existing international markets have 
changed significantly, and we have seen new markets created. The U.S. 
Tax Code needs to adapt to the changing times as well. Our current 
confusing and archaic tax code is woefully out of step with commercial 
realities as we approach the 21st century.
  U.S. businesses frequently find themselves at a competitive 
disadvantage to their foreign competitors due to the high taxes and 
stiff regulations they often face. A U.S. company selling products 
abroad is often charged a higher tax rate by our own government, than a 
foreign company is. For example, when Kodak sells film in the U.K. or 
Germany, they pay higher taxes than their foreign competitor Fuji does 
for those same sales.
  If we close American companies out of the international arena due to 
complex and burdensome tax rules on exports and foreign production, 
then we are denying them the ability to compete. Dooming them, and 
ourselves, to anemic economic growth and all its adverse subsidiary 
effects.
  The bill we are introducing today is not a comprehensive solution, 
neither is it a set of bold new initiatives. Instead, this bill 
contains a set of important intermediate steps which will take us a 
long way toward simplifying the rules and making some sense of the 
international tax regime. The bill contains provisions to simplify and 
update the tax treatment of controlled foreign corporations, fix some 
of the rules relating to the foreign tax credit, and make other changes 
to international tax law.
  Some of these changes are in areas that are in dire need of repair, 
and others are changes that take into consideration the changes we have 
seen in international business practices and environments during the 
last decade.
  One example of the need for updating our laws is the financial 
services industry. This industry has seen rapid technological and 
global changes that have transformed the very nature of the way these 
corporations do business both here and abroad. This bill contains 
several provisions to help adapt the foreign tax regime to keep up with 
these changes.
  In the debate about the globalization of our economy, we absolutely 
cannot forget the taxation of foreign companies with U.S. operations 
and subsidiaries. These companies are an important part of our growing 
economy. They employ 4.9 million American workers. In my home state of 
Utah, employees at U.S. subsidiaries constitute 3.6 percent of the work 
force. We must ensure that U.S. tax law is written and fairly enforced 
for all companies in the United States.
  This bill is not the end of the international tax debate. If we were 
to pass every provision it contains, we would still not have a simple 
Tax Code. We would need to make more reforms yet. We cannot limit this 
debate to only the intermediate changes such as those in this bill. We 
must not lose sight of the long term. I intend to urge broader debate 
about other areas in need of reform such as interest allocation, issues 
raised by the European Union, and subpart F itself. I believe that we 
must address these concerns in the next five years if we are to put 
U.S. corporations and the U.S. economy in a position to maintain 
economic position in the global economy of tomorrow.
  This bill is important to the future of every American citizen. 
Without these changes, American businesses will see their ability to 
compete diminished, and the United States will have an uphill battle to 
remain the preeminent economic force in a changing world. This modest, 
but important package of international tax reforms will help to keep 
our businesses and our economy competitive and a driving force in the 
world economic picture. I urge my colleagues to support this 
legislation.
  Mr. President, I ask unanimous consent to print the text of the bill 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1164

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``International Tax Simplification for American 
     Competitiveness Act of 1999''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

[[Page 11395]]

         TITLE I--TREATMENT OF CONTROLLED FOREIGN CORPORATIONS

Sec. 101. Permanent subpart F exemption for active financing income.
Sec. 102. Study of proper treatment of European Union under same 
              country exceptions.
Sec. 103. Expansion of de minimis rule under subpart F.
Sec. 104. Subpart F earnings and profits determined under generally 
              accepted accounting principles.
Sec. 105. Clarification of treatment of pipeline transportation income.
Sec. 106. Subpart F treatment of income from transmission of high 
              voltage electricity.
Sec. 107. Look-through treatment for sales of partnership interests.
Sec. 108. Effective date.

          TITLE II--PROVISIONS RELATING TO FOREIGN TAX CREDIT

Sec. 201. Extension of period to which excess foreign taxes may be 
              carried.
Sec. 202. Recharacterization of overall domestic loss.
Sec. 203. Special rules relating to financial services income.
Sec. 204. Look-thru rules to apply to dividends from noncontrolled 
              section 902 corporations.
Sec. 205. Application of look-thru rules to foreign tax credit.
Sec. 206. Ordering rules for foreign tax credit carryovers.
Sec. 207. Repeal of limitation of foreign tax credit under alternative 
              minimum tax.
Sec. 208. Repeal of special rules for applying foreign tax credit in 
              case of foreign oil and gas income.

                      TITLE III--OTHER PROVISIONS

Sec. 301. Deduction for dividends received from certain foreign 
              corporations.
Sec. 302. Application of uniform capitalization rules to foreign 
              persons.
Sec. 303. Treatment of military property of foreign sales corporations.
Sec. 304. United States property not to include certain assets acquired 
              by dealers in ordinary course of trade or business.
Sec. 305. Treatment of certain dividends of regulated investment 
              companies.
Sec. 306. Regulatory authority to exclude certain preliminary 
              agreements from definition of intangible property.
Sec. 307. Airline mileage awards to certain foreign persons.
Sec. 308. Repeal of reduction of subpart F income of export trade 
              corporations.
Sec. 309. Study of interest allocation.
Sec. 310. Interest payments deductible where disqualified guarantee has 
              economic effect.
Sec. 311. Modifications of reporting requirements for certain foreign 
              owned corporations.

         TITLE I--TREATMENT OF CONTROLLED FOREIGN CORPORATIONS

     SEC. 101. PERMANENT SUBPART F EXEMPTION FOR ACTIVE FINANCING 
                   INCOME.

       (a) Banking, Financing, or Similar Businesses.--Section 
     954(h) (relating to special rule for income derived in the 
     active conduct of banking, financing, or similar businesses) 
     is amended by striking paragraph (9).
       (b) Insurance Businesses.--Section 953(e) (defining exempt 
     insurance income) is amended by striking paragraph (10) and 
     by redesignating paragraph (11) as paragraph (10).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of a foreign corporation 
     beginning after December 31, 1999, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of such foreign corporation end.

     SEC. 102. STUDY OF PROPER TREATMENT OF EUROPEAN UNION UNDER 
                   SAME COUNTRY EXCEPTIONS.

       (a) Study.--The Secretary of the Treasury or the 
     Secretary's delegate shall conduct a study on the feasibility 
     of treating all countries included in the European Union as 1 
     country for purposes of applying the same country exceptions 
     under subpart F of part III of subchapter N of chapter 1 of 
     the Internal Revenue Code of 1986. Such study shall include 
     consideration of methods of ensuring that taxpayers are 
     subject to a substantial effective rate of foreign tax in 
     such countries if such treatment is adopted.
       (b) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Secretary of the Treasury shall 
     report to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     the results of the study conducted under subsection (a), 
     including recommendations (if any) for legislation.

     SEC. 103. EXPANSION OF DE MINIMIS RULE UNDER SUBPART F.

       (a) In General.--Subparagraph (A) of section 954(b)(3) 
     (relating to de minimis, etc., rules) is amended--
       (1) by striking ``5 percent'' in clause (i) and inserting 
     ``10 percent'', and
       (2) by striking ``$1,000,000'' in clause (ii) and inserting 
     ``$2,000,000''.
       (b) Technical Amendments.--
       (1) Clause (ii) of section 864(d)(5)(A) is amended by 
     striking ``5 percent or $1,000,000'' and inserting ``10 
     percent or $2,000,000''.
       (2) Clause (i) of section 881(c)(5)(A) is amended by 
     striking ``5 percent or $1,000,000'' and inserting ``10 
     percent or $2,000,000''.

     SEC. 104. SUBPART F EARNINGS AND PROFITS DETERMINED UNDER 
                   GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

       (a) In General.--Section 964(a) (relating to earnings and 
     profits) is amended by striking ``rules substantially similar 
     to those applicable to domestic corporations, under 
     regulations prescribed by the Secretary'' and inserting 
     ``generally accepted accounting principles in the United 
     States''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions during, and the determination of 
     the inclusion under section 951 of the Internal Revenue Code 
     of 1986 with respect to, taxable years of foreign 
     corporations beginning after December 31, 1999.

     SEC. 105. CLARIFICATION OF TREATMENT OF PIPELINE 
                   TRANSPORTATION INCOME.

       Section 954(g)(1) (defining foreign base company oil 
     related income) is amended by striking ``or'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, or'', and by inserting 
     after subparagraph (B) the following new subparagraph:
       ``(C) the pipeline transportation of oil or gas within such 
     foreign country.''

     SEC. 106. SUBPART F TREATMENT OF INCOME FROM TRANSMISSION OF 
                   HIGH VOLTAGE ELECTRICITY.

       Section 954(e) (relating to foreign base company services 
     income) is amended by adding at the end the following new 
     paragraph:
       ``(3) Exception for income from transmission of high 
     voltage electricity.--The term `foreign base company services 
     income' does not include income derived in connection with 
     the performance of services which are related to the 
     transmission of high voltage electricity.''

     SEC. 107. LOOK-THROUGH TREATMENT FOR SALES OF PARTNERSHIP 
                   INTERESTS.

       (a) In General.--Section 954(c) (defining foreign personal 
     holding company income) is amended by adding at the end the 
     following new paragraph:
       ``(4) Look-through rule for certain partnership sales.--
       ``(A) In general.--In the case of any sale by a controlled 
     foreign corporation of an interest in a partnership with 
     respect to which such corporation is a 10-percent owner, such 
     corporation shall be treated for purposes of this subsection 
     as selling the proportionate share of the assets of the 
     partnership attributable to such interest.
       ``(B) 10-percent owner.--For purposes of this paragraph, 
     the term `10-percent owner' means a controlled foreign 
     corporation which owns 10 percent or more of the capital or 
     profits interest in the partnership. The constructive 
     ownership rules of section 958(b) shall apply for purposes of 
     the preceding sentence.''
       (b) Conforming Amendment.--Section 954(c)(1)(B)(ii) is 
     amended by inserting ``except as provided in paragraph (4),'' 
     before ``which''.

     SEC. 108. EFFECTIVE DATE.

       Except as otherwise provided in this title, the amendments 
     made by this title shall apply to taxable years of controlled 
     foreign corporations beginning after December 31, 1999, and 
     taxable years of United States shareholders with or within 
     which such taxable years of controlled foreign corporations 
     end.

          TITLE II--PROVISIONS RELATING TO FOREIGN TAX CREDIT

     SEC. 201. EXTENSION OF PERIOD TO WHICH EXCESS FOREIGN TAXES 
                   MAY BE CARRIED.

       (a) General Rule.--Section 904(c) (relating to carryback 
     and carryover of excess tax paid) is amended by striking ``in 
     the first, second, third, fourth, or fifth'' and inserting 
     ``in any of the first 10''.
       (b) Excess Extraction Taxes.--Paragraph (1) of section 
     907(f) is amended by striking ``in the first, second, third, 
     fourth, or fifth'' and inserting ``in any of the first 10''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to excess foreign taxes arising in taxable years 
     beginning after December 31, 1999.

     SEC. 202. RECHARACTERIZATION OF OVERALL DOMESTIC LOSS.

       (a) General Rule.--Section 904 is amended by redesignating 
     subsections (g), (h), (i), (j), and (k) as subsections (h), 
     (i), (j), (k), and (l) respectively, and by inserting after 
     subsection (f) the following new subsection:
       ``(g) Recharacterization of Overall Domestic Loss.--
       ``(1) General rule.--For purposes of this subpart, in the 
     case of any taxpayer who sustains an overall domestic loss 
     for any taxable year beginning after December 31, 1999, that 
     portion of the taxpayer's taxable income from sources within 
     the United States for each succeeding taxable year which is 
     equal to the lesser of--
       ``(A) the amount of such loss (to the extent not used under 
     this paragraph in prior taxable years), or

[[Page 11396]]

       ``(B) 50 percent of the taxpayer's taxable income from 
     sources within the United States for such succeeding taxable 
     year,

     shall be treated as income from sources without the United 
     States (and not as income from sources within the United 
     States).
       ``(2) Overall domestic loss defined.--For purposes of this 
     subsection and section 936--
       ``(A) In general.--The term `overall domestic loss' means 
     any domestic loss to the extent such loss offsets taxable 
     income from sources without the United States for the taxable 
     year or for any preceding taxable year by reason of a 
     carryback. For purposes of the preceding sentence, the term 
     `domestic loss' means the amount by which the gross income 
     for the taxable year from sources within the United States is 
     exceeded by the sum of the deductions properly apportioned or 
     allocated thereto (determined without regard to any carryback 
     from a subsequent taxable year).
       ``(B) Taxpayer must have elected foreign tax credit for 
     year of loss.--The term `overall domestic loss' shall not 
     include any loss for any taxable year unless the taxpayer 
     chose the benefits of this subpart for such taxable year.
       ``(3) Characterization of subsequent income.--
       ``(A) In general.--Any income from sources within the 
     United States that is treated as income from sources without 
     the United States under paragraph (1) shall be allocated 
     among and increase the income categories in proportion to the 
     loss from sources within the United States previously 
     allocated to those income categories.
       ``(B) Income category.--For purposes of this paragraph, the 
     term `income category' has the meaning given such term by 
     subsection (f)(5)(E)(i).
       ``(4) Coordination with subsection (f).--The Secretary 
     shall prescribe such regulations as may be necessary to 
     coordinate the provisions of this subsection with the 
     provisions of subsection (f).''
       (b) Conforming Amendments.--
       (1) Section 535(d)(2) is amended by striking ``section 
     904(g)(6)'' and inserting ``section 904(h)(6)''.
       (2) Subparagraph (A) of section 936(a)(2) is amended by 
     striking ``section 904(f)'' and inserting ``subsections (f) 
     and (g) of section 904''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to losses for taxable years beginning after 
     December 31, 1999.

     SEC. 203. SPECIAL RULES RELATING TO FINANCIAL SERVICES 
                   INCOME.

       (a) Exception for Interest on Certain Securities.--Section 
     904(d)(2)(B) (relating to high withholding tax interest) is 
     amended by redesignating clause (iii) as clause (iv) and by 
     inserting after clause (ii) the following new clause:
       ``(iii) Exception for interest on dealer property.--The 
     term `high withholding tax interest' shall not include any 
     interest on a security (within the meaning of section 
     475(c)(2)) which is received or accrued by a person that 
     holds the security in connection with the holder's activities 
     as a dealer in securities (within the meaning of section 
     475(c)(1)).''
       (b) Financial Services Income in Excess of 80  Percent of 
     Gross Income.--Section 904(d)(2)(C) (relating to financial 
     services income) is amended by adding at the end the 
     following new clause:
       ``(iv) Income exceeding 80 percent of gross income.--If the 
     financial services income (as defined in clause (i)) of any 
     person exceeds 80 percent of gross income, the entire gross 
     income for the taxable year shall be treated as financial 
     services income.''
       (c) Exception for Income on Dealer Property.--Subsection 
     904(g) (relating to source rules in case of United States-
     owned foreign corporations) is amended by redesignating 
     paragraph (11) as paragraph (12) and by adding after 
     paragraph (10) the following new paragraph:
       ``(11) Exception for income on dealer property.--Paragraph 
     (1) shall not apply to any amount derived from a United 
     States-owned foreign corporation that is derived from income 
     on a security (within the meaning of section 475(c)(2)) which 
     is received or accrued by a person that holds the security in 
     connection with the holder's activities as a dealer in 
     securities (within the meaning of section 475(c)(1)).''
       (d) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 1999.
       (2) Deemed paid credits.--In the case of any credit under 
     section 901 of the Internal Revenue Code of 1986 by reason of 
     section 902 or 960 of such Code, the amendments made by this 
     section shall apply to taxable years of foreign corporations 
     beginning after December 31, 1999, and to taxable years of 
     United States shareholders in such corporations with or 
     within which such taxable years of foreign corporations end.

     SEC. 204. LOOK-THRU RULES TO APPLY TO DIVIDENDS FROM 
                   NONCONTROLLED SECTION 902 CORPORATIONS.

       (a) In General.--Section 904(d)(4) (relating to look-thru 
     rules apply to dividends from noncontrolled section 902 
     corporations) is amended to read as follows:
       ``(4) Look-thru applies to dividends from controlled 
     section 902 corporations.--
       ``(A) In general.--For purposes of this subsection, any 
     dividend from a noncontrolled section 902 corporation with 
     respect to the taxpayer shall be treated as income in a 
     separate category in proportion to the ratio of--
       ``(i) the portion of earnings and profits attributable to 
     income in such category, to
       ``(ii) the total amount of earnings and profits.
       ``(B) Special rules.--For purposes of this paragraph--
       ``(i) In general.--Rules similar to the rules of paragraph 
     (3)(F) shall apply.
       ``(ii) Earnings and profits.--

       ``(I) In general.--The rules of section 316 shall apply.
       ``(II) Regulations.--The Secretary may prescribe 
     regulations regarding the treatment of distributions out of 
     earnings and profits for periods before the taxpayer's 
     acquisition of the stock to which the distributions relate.''

       (b) Conforming Amendments.--
       (1) Subparagraph (E) of section 904(d)(1), as in effect 
     both before and after the amendments made by section 1105 of 
     the Taxpayer Relief Act of 1997, is hereby repealed.
       (2) Section 904(d)(2)(C)(iii), as so in effect, is amended 
     by striking subclause (II) and by redesignating subclause 
     (III) as subclause (II).
       (3) The last sentence of section 904(d)(2)(D), as so in 
     effect, is amended to read as follows: ``Such term does not 
     include any financial services income.''
       (4) Section 904(d)(2)(E) is amended by striking clauses 
     (ii) and (iv) and by redesignating clause (iii) as clause 
     (ii).
       (5) Section 904(d)(3)(F) is amended by striking ``(D), or 
     (E)'' and inserting ``or (D)''.
       (6) Section 864(d)(5)(A)(i) is amended by striking 
     ``(C)(iii)(III)'' and inserting ``(C)(iii)(II)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 205. APPLICATION OF LOOK-THRU RULES TO FOREIGN TAX 
                   CREDIT.

       (a) Interest, Rents, and Royalties.--
       (1) Noncontrolled section 902 corporation.--Section 
     904(d)(4)(A), as amended by section 204, is amended to read 
     as follows:
       ``(A) In general.--For purposes of this subsection--
       ``(i) any applicable dividend shall be treated as income in 
     a separate category in proportion to the ratio of--

       ``(I) the portion of the earnings and profits attributable 
     to income in such category, to
       ``(II) the total amount of earnings and profits, and

       ``(ii) any interest, rent, or royalty which is received or 
     accrued from a noncontrolled section 902 corporation with 
     respect to the taxpayer shall be treated as income in a 
     separate category to the extent it is properly allocable 
     (under regulations prescribed by the Secretary) to income of 
     such corporation in such category.''
       (2) Partnerships.--Section 904(d)(6)(C) (relating to 
     regulations) is amended--
       (A) by inserting ``or (4)(A)(ii)'' after ``paragraph 
     (3)(C)'', and
       (B) by inserting ``or noncontrolled section 902 
     corporations, whichever is applicable'' after ``controlled 
     foreign corporations''.
       (3) Conforming amendment.--The heading for section 
     904(d)(4), as amended by section 204, is amended by inserting 
     ``, interest, rents, or royalties'' after ``dividends''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 206. ORDERING RULES FOR FOREIGN TAX CREDIT CARRYOVERS.

       (a) In General.--Section 904(c) (relating to carryback and 
     carryover of excess tax paid), as amended by section 201, is 
     amended to read as follows:
       ``(c) Carryback and Carryover of Excess Tax Paid.--
       ``(1) In general.--If the sum of--
       ``(A) the foreign tax credit carryovers under this 
     subsection to a taxable year, plus
       ``(B) the amount of all taxes paid to foreign countries or 
     possessions of the United States for the taxable year and for 
     which the taxpayer elects to have the benefits of this 
     subpart apply,

     exceeds the limitation under subsection (a), such excess (to 
     the extent attributable to the taxes described in 
     subparagraph (B)) shall be a foreign tax credit carryback to 
     each of the 2 preceding taxable years and a foreign tax 
     credit carryforward to each of the 10 following taxable 
     years.
       ``(2) Ordering rules.--For purposes of any provision of the 
     title where it is necessary to ascertain the extent to which 
     the credits to which this subpart applies are used in a 
     taxable year or as a carryback or carryforward, such taxes 
     shall be treated as used--
       ``(A) first from carryovers to such taxable year,
       ``(B) then from credits arising in such taxable year, and
       ``(C) finally from carrybacks to such taxable year.
       ``(3) Limitations on carryovers.--
       ``(A) Credit only.--A credit may be carried to a taxable 
     year under this subsection only if the taxpayer chooses for 
     such taxable year to have the benefits of this subpart apply 
     to taxes paid or accrued to foreign

[[Page 11397]]

     countries or any possessions of the United States. Any amount 
     so carried may be availed of only as a credit and not a 
     deduction.
       ``(B) Limitation to apply.--The amount of the credit 
     carryforward or carryback to a taxable year (the `carryover 
     year') from a taxable year under this subsection shall not 
     exceed the excess (if any) of--
       ``(i) the limitation under subsection (a) for the carryover 
     year, over
       ``(ii) the sum of--

       ``(I) the credits arising in the carryover year, plus
       ``(II) carryforwards and carrybacks to the carryover year 
     from taxable years earlier than the taxable year from which 
     the credit is being carried (whether or not the taxpayer 
     chooses to have the benefits of this subpart apply with 
     respect to such earlier taxable year).''

       (b) Effective Date.--The amendment made by this section 
     applies to taxable years beginning after December 31, 1999.

     SEC. 207. REPEAL OF LIMITATION OF FOREIGN TAX CREDIT UNDER 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Section 59(a) (relating to alternative 
     minimum tax foreign tax credit) is amended by striking 
     paragraph (2) and by redesignating paragraphs (3) and (4) as 
     paragraphs (2) and (3), respectively.
       (b) Conforming Amendment.--Section 53(d)(1)(B)(i)(II) is 
     amended by striking ``and if section 59(a)(2) did not 
     apply''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 208. REPEAL OF SPECIAL RULES FOR APPLYING FOREIGN TAX 
                   CREDIT IN CASE OF FOREIGN OIL AND GAS INCOME.

       (a) In General.--Section 907 (relating to special rules in 
     case of foreign oil and gas income) is repealed.
       (b) Conforming Amendments.--
       (1) Each of the following provisions are amended by 
     striking ``907,'':
       (A) Section 245(a)(10).
       (B) Section 865(h)(1)(B).
       (C) Section 904(d)(1).
       (D) Section 904(g)(10)(A).
       (2) Section 904(f)(5)(E)(iii) is amended by inserting ``, 
     as in effect before its repeal by the International Tax 
     Simplification for American Competitiveness Act of 1999'' 
     after ``section 907(c)(4)(B)''.
       (3) Section 954(g)(1) is amended by inserting ``, as in 
     effect before its repeal by the International Tax 
     Simplification for American Competitiveness Act of 1999'' 
     after ``907(c)''.
       (4) Section 6501(i) is amended--
       (A) by striking ``, or under section 907(f) (relating to 
     carryback and carryover of disallowed oil and gas extraction 
     taxes)'', and
       (B) by striking ``or 907(f)''.
       (5) The table of sections for subpart A of part III of 
     subchapter N of chapter 1 is amended by striking the item 
     relating to section 907.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

                      TITLE III--OTHER PROVISIONS

     SEC. 301. DEDUCTION FOR DIVIDENDS RECEIVED FROM CERTAIN 
                   FOREIGN CORPORATIONS.

       (a) Constructive Ownership Rules To Apply in Determining 
     80-Percent Ownership.--Section 245 (a)(5) (relating to post-
     1986 undistributed U.S. earnings) is amended by adding at the 
     end the following flush sentence:

     ``Section 318(a) shall apply for purposes of subparagraph 
     (B).''
       (b) Dividends To Include Subpart F Distributions.--Section 
     245(a) (relating to dividends from 10-percent owned foreign 
     corporations) is amended by adding at the end the following 
     new paragraph:
       ``(12) Subpart f inclusions treated as dividends.--For 
     purposes of this subsection, the term `dividend' shall 
     include any amount the taxpayer is required to include in 
     gross income for the taxable year under section 951(a).''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 302. APPLICATION OF UNIFORM CAPITALIZATION RULES TO 
                   FOREIGN PERSONS.

       (a) In General.--Section 263A(c) (relating to exceptions) 
     is amended by adding at the end the following new paragraph:
       ``(7) Foreign persons.--This section shall apply to any 
     taxpayer who is not a United States person only for purposes 
     of applying sections 871(b)(1) and 882(a)(1).''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1999. Section 481 of the Internal Revenue Code of 1986 shall 
     not apply to any change in a method of accounting by reason 
     of such amendment.

     SEC. 303. TREATMENT OF MILITARY PROPERTY OF FOREIGN SALES 
                   CORPORATIONS.

       (a) In General.--Section 923(a) (defining exempt foreign 
     trade income) is amended by striking paragraph (5) and by 
     redesignating paragraph (6) as paragraph (5).
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 304. UNITED STATES PROPERTY NOT TO INCLUDE CERTAIN 
                   ASSETS ACQUIRED BY DEALERS IN ORDINARY COURSE 
                   OF TRADE OR BUSINESS.

       (a) In General.--Section 956(c)(2) (relating to exceptions 
     from property treated as United States property) is amended 
     by striking ``and'' at the end of subparagraph (J), by 
     striking the period at the end of subparagraph (K) and 
     inserting ``; and'', and by adding at the end the following 
     new subparagraph:
       ``(L) securities acquired and held by a controlled foreign 
     corporation in the ordinary course of its business as a 
     dealer in securities if (i) the dealer accounts for the 
     securities as securities held primarily for sale to customers 
     in the ordinary course of business, and (ii) the dealer 
     disposes of the securities (or such securities mature while 
     held by the dealer) within a period consistent with the 
     holding of securities for sale to customers in the ordinary 
     course of business.''
       (b) Conforming Amendment.--Section 956(c)(2) is amended by 
     striking ``and (K)'' in the last sentence and inserting ``, 
     (K), and (L)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 1999, and to taxable years of 
     United States shareholders or with or within which such 
     taxable years of foreign corporations end.

     SEC. 305. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Treatment of Certain Dividends.--
       (1) Nonresident alien individuals.--Section 871 (relating 
     to tax on nonresident alien individuals) is amended by 
     redesignating subsection (k) as subsection (l) and by 
     inserting after subsection (j) the following new subsection:
       ``(k) Exemption for Certain Dividends of Regulated 
     Investment Companies.--
       ``(1) Interest-related dividends.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     no tax shall be imposed under paragraph (1)(A) of subsection 
     (a) on any interest-related dividend received from a 
     regulated investment company.
       ``(B) Exceptions.--Subparagraph (A) shall not apply--
       ``(i) to any interest-related dividend received from a 
     regulated investment company by a person to the extent such 
     dividend is attributable to interest (other than interest 
     described in subparagraph (E) (i) or (iii)) received by such 
     company on indebtedness issued by such person or by any 
     corporation or partnership with respect to which such person 
     is a 10-percent shareholder,
       ``(ii) to any interest-related dividend with respect to 
     stock of a regulated investment company unless the person who 
     would otherwise be required to deduct and withhold tax from 
     such dividend under chapter 3 receives a statement (which 
     meets requirements similar to the requirements of subsection 
     (h)(5)) that the beneficial owner of such stock is not a 
     United States person, and
       ``(iii) to any interest-related dividend paid to any person 
     within a foreign country (or any interest-related dividend 
     payment addressed to, or for the account of, persons within 
     such foreign country) during any period described in 
     subsection (h)(6) with respect to such country.
     Clause (iii) shall not apply to any dividend with respect to 
     any stock which was acquired on or before the date of the 
     publication of the Secretary's determination under subsection 
     (h)(6).
       ``(C) Interest-related dividend.--For purposes of this 
     paragraph, an interest-related dividend is any dividend (or 
     part thereof) which is designated by the regulated investment 
     company as an interest-related dividend in a written notice 
     mailed to its shareholders not later than 60 days after the 
     close of its taxable year. If the aggregate amount so 
     designated with respect to a taxable year of the company 
     (including amounts so designated with respect to dividends 
     paid after the close of the taxable year described in section 
     855) is greater than the qualified net interest income of the 
     company for such taxable year, the portion of each 
     distribution which shall be an interest-related dividend 
     shall be only that portion of the amounts so designated which 
     such qualified net interest income bears to the aggregate 
     amount so designated.
       ``(D) Qualified net interest income.--For purposes of 
     subparagraph (C), the term `qualified net interest income' 
     means the qualified interest income of the regulated 
     investment company reduced by the deductions properly 
     allocable to such income.
       ``(E) Qualified interest income.--For purposes of 
     subparagraph (D), the term `qualified interest income' means 
     the sum of the following amounts derived by the regulated 
     investment company from sources within the United States:
       ``(i) Any amount includible in gross income as original 
     issue discount (within the meaning of section 1273) on an 
     obligation payable 183 days or less from the date of original 
     issue (without regard to the period held by the company).
       ``(ii) Any interest includible in gross income (including 
     amounts recognized as ordinary income in respect of original 
     issue discount or market discount or acquisition discount 
     under part V of subchapter P and such other amounts as 
     regulations may provide)

[[Page 11398]]

     on an obligation which is in registered form; except that 
     this clause shall not apply to--

       ``(I) any interest on an obligation issued by a corporation 
     or partnership if the regulated investment company is a 10-
     percent shareholder in such corporation or partnership, and
       ``(II) any interest which is treated as not being portfolio 
     interest under the rules of subsection (h)(4).

       ``(iii) Any interest referred to in subsection (i)(2)(A) 
     (without regard to the trade or business of the regulated 
     investment company).
       ``(iv) Any interest-related dividend includable in gross 
     income with respect to stock of another regulated investment 
     company.
       ``(F) 10-percent shareholder.--For purposes of this 
     paragraph, the term `10-percent shareholder' has the meaning 
     given such term by subsection (h)(3)(B).
       ``(2) Short-term capital gain dividends.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     no tax shall be imposed under paragraph (1)(A) of subsection 
     (a) on any short-term capital gain dividend received from a 
     regulated investment company.
       ``(B) Exception for aliens taxable under subsection 
     (a)(2).--Subparagraph (A) shall not apply in the case of any 
     nonresident alien individual subject to tax under subsection 
     (a)(2).
       ``(C) Short-term capital gain dividend.--For purposes of 
     this paragraph, a short-term capital gain dividend is any 
     dividend (or part thereof) which is designated by the 
     regulated investment company as a short-term capital gain 
     dividend in a written notice mailed to its shareholders not 
     later than 60 days after the close of its taxable year. If 
     the aggregate amount so designated with respect to a taxable 
     year of the company (including amounts so designated with 
     respect to dividends paid after the close of the taxable year 
     described in section 855) is greater than the qualified 
     short-term gain of the company for such taxable year, the 
     portion of each distribution which shall be a short-term 
     capital gain dividend shall be only that portion of the 
     amounts so designated which such qualified short-term gain 
     bears to the aggregate amount so designated.
       ``(D) Qualified short-term gain.--For purposes of 
     subparagraph (C), the term `qualified short-term gain' means 
     the excess of the net short-term capital gain of the 
     regulated investment company for the taxable year over the 
     net long-term capital loss (if any) of such company for such 
     taxable year. For purposes of this subparagraph--
       ``(i) the net short-term capital gain of the regulated 
     investment company shall be computed by treating any short-
     term capital gain dividend includible in gross income with 
     respect to stock of another regulated investment company as a 
     short-term capital gain, and
       ``(ii) the excess of the net short-term capital gain for a 
     taxable year over the net long-term capital loss for a 
     taxable year (to which an election under section 4982(e)(4) 
     does not apply) shall be determined without regard to any net 
     capital loss or net short-term capital loss attributable to 
     transactions after October 31 of such year, and any such net 
     capital loss or net short-term capital loss shall be treated 
     as arising on the 1st day of the next taxable year.

     To the extent provided in regulations, clause (ii) shall 
     apply also for purposes of computing the taxable income of 
     the regulated investment company.''
       (2) Foreign corporations.--Section 881 (relating to tax on 
     income of foreign corporations not connected with United 
     States business) is amended by redesignating subsection (e) 
     as subsection (f) and by inserting after subsection (d) the 
     following new subsection:
       ``(e) Tax Not To Apply to Certain Dividends of Regulated 
     Investment Companies.--
       ``(1) Interest-related dividends.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     no tax shall be imposed under paragraph (1) of subsection (a) 
     on any interest-related dividend (as defined in section 
     871(k)(1)) received from a regulated investment company.
       ``(B) Exception.--Subparagraph (A) shall not apply--
       ``(i) to any dividend referred to in section 871(k)(1)(B), 
     and
       ``(ii) to any interest-related dividend received by a 
     controlled foreign corporation (within the meaning of section 
     957(a)) to the extent such dividend is attributable to 
     interest received by the regulated investment company from a 
     person who is a related person (within the meaning of section 
     864(d)(4)) with respect to such controlled foreign 
     corporation.
       ``(C) Treatment of dividends received by controlled foreign 
     corporations.--The rules of subsection (c)(5)(A) shall apply 
     to any interest-related dividend received by a controlled 
     foreign corporation (within the meaning of section 957(a)) to 
     the extent such dividend is attributable to interest received 
     by the regulated investment company which is described in 
     clause (ii) of section 871(k)(1)(E) (and not described in 
     clause (i) or (iii) of such section).
       ``(2) Short-term capital gain dividends.--No tax shall be 
     imposed under paragraph (1) of subsection (a) on any short-
     term capital gain dividend (as defined in section 871(k)(2)) 
     received from a regulated investment company.''
       (3) Withholding taxes.--
       (A) Section 1441(c) (relating to exceptions) is amended by 
     adding at the end the following new paragraph:
       ``(12) Certain dividends received from regulated investment 
     companies.--
       ``(A) In general.--No tax shall be required to be deducted 
     and withheld under subsection (a) from any amount exempt from 
     the tax imposed by section 871(a)(1)(A) by reason of section 
     871(k).
       ``(B) Special rule.--For purposes of subparagraph (A), 
     clause (i) of section 871(k)(1)(B) shall not apply to any 
     dividend unless the regulated investment company knows that 
     such dividend is a dividend referred to in such clause. A 
     similar rule shall apply with respect to the exception 
     contained in section 871(k)(2)(B).''
       (B) Section 1442(a) (relating to withholding of tax on 
     foreign corporations) is amended--
       (i) by striking ``and the reference in section 
     1441(c)(10)'' and inserting ``the reference in section 
     1441(c)(10)'', and
       (ii) by inserting before the period at the end the 
     following: ``, and the references in section 1441(c)(12) to 
     sections 871(a) and 871(k) shall be treated as referring to 
     sections 881(a) and 881(e) (except that for purposes of 
     applying subparagraph (A) of section 1441(c)(12), as so 
     modified, clause (ii) of section 881(e)(1)(B) shall not apply 
     to any dividend unless the regulated investment company knows 
     that such dividend is a dividend referred to in such 
     clause)''.
       (b) Estate Tax Treatment of Interest in Certain Regulated 
     Investment Companies.--Section 2105 (relating to property 
     without the United States for estate tax purposes) is amended 
     by adding at the end the following new subsection:
       ``(d) Stock in a RIC.--
       ``(1) In general.--For purposes of this subchapter, stock 
     in a regulated investment company (as defined in section 851) 
     owned by a nonresident not a citizen of the United States 
     shall not be deemed property within the United States in the 
     proportion that, at the end of the quarter of such investment 
     company's taxable year immediately preceding a decedent's 
     date of death (or at such other time as the Secretary may 
     designate in regulations), the assets of the investment 
     company that were qualifying assets with respect to the 
     decedent bore to the total assets of the investment company.
       ``(2) Qualifying assets.--For purposes of this subsection, 
     qualifying assets with respect to a decedent are assets that, 
     if owned directly by the decedent, would have been--
       ``(A) amounts, deposits, or debt obligations described in 
     subsection (b) of this section,
       ``(B) debt obligations described in the last sentence of 
     section 2104(c), or
       ``(C) other property not within the United States.''
       (c) Treatment of Regulated Investment Companies Under 
     Section 897.--
       (1) Paragraph (1) of section 897(h) is amended by striking 
     ``REIT'' each place it appears and inserting ``qualified 
     investment entity''.
       (2) Paragraphs (2) and (3) of section 897(h) are amended to 
     read as follows:
       ``(2) Sale of stock in domestically controlled entity not 
     taxed.--The term `United States real property interest' does 
     not include any interest in a domestically controlled 
     qualified investment entity.
       ``(3) Distributions by domestically controlled qualified 
     investment entities.--In the case of a domestically 
     controlled qualified investment entity, rules similar to the 
     rules of subsection (d) shall apply to the foreign ownership 
     percentage of any gain.''
       (3) Subparagraphs (A) and (B) of section 897(h)(4) are 
     amended to read as follows:
       ``(A) Qualified investment entity.--The term `qualified 
     investment entity' means any real estate investment trust and 
     any regulated investment company.
       ``(B) Domestically controlled.--The term `domestically 
     controlled qualified investment entity' means any qualified 
     investment entity in which at all times during the testing 
     period less than 50 percent in value of the stock was held 
     directly or indirectly by foreign persons.''
       (4) Subparagraphs (C) and (D) of section 897(h)(4) are each 
     amended by striking ``REIT'' and inserting ``qualified 
     investment entity''.
       (5) The subsection heading for subsection (h) of section 
     897 is amended by striking ``REITS'' and inserting ``Certain 
     Investment Entities''.
       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to dividends with respect to taxable years of regulated 
     investment companies beginning after the date of the 
     enactment of this Act.
       (2) Estate tax treatment.--The amendment made by subsection 
     (b) shall apply to estates of decedents dying after the date 
     of the enactment of this Act.
       (3) Certain other provisions.--The amendments made by 
     subsection (c) (other than paragraph (1) thereof) shall take 
     effect on the date of the enactment of this Act.

[[Page 11399]]



     SEC. 306. REGULATORY AUTHORITY TO EXCLUDE CERTAIN PRELIMINARY 
                   AGREEMENTS FROM DEFINITION OF INTANGIBLE 
                   PROPERTY.

       (a) In General.--Section 936(h)(3)(B) (defining intangible 
     property) is amended by adding at the end the following new 
     sentence: ``The Secretary shall by regulation provide that 
     such term shall not include any preliminary agreement which 
     is not legally enforceable.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to agreements entered into after the date of the 
     enactment of this Act.

     SEC. 307. AIRLINE MILEAGE AWARDS TO CERTAIN FOREIGN PERSONS.

       (a) In General.--The last sentence of section 4261(e)(3)(C) 
     (relating to regulations) is amended by inserting ``and 
     mileage awards which are issued to individuals whose mailing 
     addresses on record with the person providing the right to 
     air transportation are outside the United States'' before the 
     period at the end thereof.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid, and benefits provided, after 
     December 31, 1997.

     SEC. 308. REPEAL OF REDUCTION OF SUBPART F INCOME OF EXPORT 
                   TRADE CORPORATIONS.

       (a) In General.--Subpart G of part III of subchapter N of 
     chapter 1 (relating to export trade corporations) is 
     repealed.
       (b) Treatment of Certain Actual Distributions.--
       (1) In general.--For purposes of applying sections 959 and 
     960(b) of the Internal Revenue Code of 1986, in the case of 
     any actual distribution of export trade income made after 
     December 31, 1986, by an export trade corporation (or former 
     export trade corporation that was an export trade corporation 
     on December 31, 1986), notwithstanding any other provision of 
     chapter 1 of such Code, the earnings and profits attributable 
     to amounts which have been included in the gross income of a 
     United States shareholder under section 951(a) of such Code 
     shall be treated as including an amount equal to the amount 
     of export trade income that was included in gross income as a 
     dividend. If a distribution is excluded from gross income by 
     application of this subsection, the amount of such 
     distribution shall be treated as an amount described in 
     section 951(a)(2)(B) of such Code that reduces the amount 
     described in section 951(a)(2)(A) of such Code for the 
     taxable year.
       (2) Definitions.--For purposes of this subsection--
       (A) Export trade corporation.--The term ``export trade 
     corporation'' has the meaning given such term by section 
     971(a) of the Internal Revenue Code of 1986 (as in effect 
     before the amendment made by subsection (a)).
       (B) Export trade income.--The term ``export trade income'' 
     has the meaning given such term by section 971(b) of the 
     Internal Revenue Code of 1986 (as so in effect).
       (c) Conforming Amendments.--
       (1) Section 865(e)(2)(A) is amended by striking the last 
     sentence.
       (2) Section 1297(b)(2)(D) is amended by striking ``or 
     export trade income of an export trade corporation (as 
     defined in section 971)''.
       (3) The table of parts for part III of subchapter N of 
     chapter 1 is amended by striking the item relating to subpart 
     G.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1999.

     SEC. 309. STUDY OF INTEREST ALLOCATION.

       (a) Study.--The Secretary of the Treasury or the 
     Secretary's delegate shall conduct a study of the rules under 
     section 864(e) of the Internal Revenue Code of 1986 for 
     allocating interest expense of members of an affiliated 
     group. Such study shall include an analysis of the effect of 
     such rules, including the effects such rules have on 
     different industries.
       (b) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Secretary of the Treasury shall 
     report to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     the results of the study conducted under subsection (a), 
     including recommendations (if any) for legislation.

     SEC. 310. INTEREST PAYMENTS DEDUCTIBLE WHERE DISQUALIFIED 
                   GUARANTEE HAS ECONOMIC EFFECT.

       (a) In General.--Section 163(j)(6)(D)(ii) (relating to 
     exceptions to disqualified guarantee) is amended by striking 
     ``or'' at the end of subclause (I), by striking the period at 
     the end of subclause (II) and inserting ``, or'', and by 
     inserting after subclause (II) the following new subclause:

       ``(III) if, in the case of a guarantee by a foreign person, 
     the taxpayer establishes to the satisfaction of the Secretary 
     that the loan giving rise to the indebtedness would have been 
     made by the unrelated person without regard to the guarantee 
     and that the guarantee resulted in a reduction in the 
     interest payable on the loan.''

       (b) Effective Date.--The amendments made by this section 
     shall apply to guarantees issued on and after the date of the 
     enactment of this Act.

     SEC. 311. MODIFICATIONS OF REPORTING REQUIREMENTS FOR CERTAIN 
                   FOREIGN OWNED CORPORATIONS.

       (a) De Minimis Exception.--Section 6038A(b) (relating to 
     required information) is amended by adding at the end the 
     following new flush sentence:
     ``The Secretary shall not require the reporting corporation 
     to report any information with respect to any foreign person 
     which is a related person if the aggregate value of the 
     transactions between the corporation and the related person 
     (and any person related to such person) during the taxable 
     year does not exceed $5,000,000.''
       (b) Time for Providing Translations of Specific 
     Documents.--Notwithstanding Internal Revenue Service 
     Regulation Sec. 1.6038A-3(f)(2), a taxpayer shall have at 
     least 60 days to provide translations of specific documents 
     it is requested to translate. Nothing in this subsection 
     shall limit the right of a taxpayer to file a written request 
     for an extension of time to comply with the request.
       (c) Effective Dates.--
       (1) Exception.--The amendment made by subsection (a) shall 
     apply to taxable years beginning after December 31, 1999.
       (2) Translations.--Subsection (b) shall apply to requests 
     made by the Internal Revenue Service after December 31, 1999.
                                 ______
                                 
      By Mr. MACK (for himself, Mrs. Feinstein, Mr. Murkowski, Mr. 
        Breaux, Mr. Gramm, Mr. Robb, Mr. Chafee, Mr. Graham, Mr. Bryan, 
        Mr. Torricelli, Mr. Warner, Mr. Thurmond, Mr. Grams, Mr. Kyl, 
        Mr. Helms, Mr. Hutchinson, Mr. Lugar, and Mr. Cochran):
  S. 1165. A bill to amend the Internal Revenue Code of 1986 to repeal 
the limitation on the amount of receipts attributable to military 
property which may be treated as exempt foreign trade income; to the 
Committee on Finance.


              defense jobs and trade promotion act of 1999

  Mr. MACK. Mr. President, I rise to introduce the Defense Jobs and 
Trade Promotion Act of 1999. This bill, cosponsored by Senator 
Feinstein and 16 of our colleagues, will eliminate a provision of tax 
law which discriminates against United States exporters of defense 
products.
  Other nations have systems of taxation which rely less on corporate 
income taxes and more on value-added taxes. By rebating the value-added 
taxes for products that are exported, these nations lower the costs of 
their exports and provide their companies a competitive advantage that 
is not based on quality, ingenuity, or resources but rather on tax 
policy.
  In an attempt to level the playing field, our tax code allows U.S. 
companies to establish Foreign Sales Corporations (FSCs) through which 
U.S.-manufactured products may be exported. A portion of the profits 
from FSC sales are exempted from corporate income taxes, to mitigate 
the advantage that other countries give their exporters through value-
added tax rebates.
  But the tax benefits of a FSC are cut in half for defense exporters. 
This 50% limitation is the result of a compromise enacted 23 years ago 
as part of the predecessor to the FSC provisions. This compromise was 
not based on policy considerations, but instead merely split the 
difference between members who believed that the U.S. defense industry 
was so dominant in world markets that the foreign tax advantages were 
inconsequential, and members who believed that all U.S. exporters 
should be treated equally.
  Today, U.S. defense manufacturers face intense competition from 
foreign businesses. With the sharp decline in the defense budget over 
the past decade, exports of defense products play a prominent role in 
maintaining a viable U.S. defense industrial base. It makes no sense to 
allow differences in international tax systems to stand as an obstacle 
to exports of U.S. defense products. We must level the international 
playing field for U.S. defense product manufacturers.
  The fifty percent exclusion for sales of defense products makes even 
less sense when one considers that the sale of every defense product to 
a foreign government requires the determination of both the President 
and the Congress that the sale will strengthen the security of the 
United States and promote world peace. This is more than a matter of 
fair treatment for all U.S. exporters. National security is enhanced 
when our allies use U.S.-manufactured military equipment, because of 
its compatibility with equipment used by our armed forces.
  The Department of Defense supports repeal of this provision. In an 
August

[[Page 11400]]

26, 1998 letter, Deputy Secretary of Defense John Hamre wrote Treasury 
Secretary Rubin about the FSC. Hamre wrote, ``The Department of Defense 
(DoD) supports extending the full benefits of the FSC exemption to 
defense exporters * * * [P]utting defense and non-defense companies on 
the same footing would encourage defense exports that would promote 
standardization and interoperability of equipment among our allies. It 
also could result in a decrease in the cost of defense products to the 
Department of Defense.''
  The bill we are introducing today supports the DoD recommendation. It 
repeals the provision of the Foreign Sales Corporation laws that 
discriminates against U.S. defense product manufacturers, enhancing 
both the competitiveness of U.S. companies in world markets and our 
national security.
  Mr. President, 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. 1165

       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 ``Defense Jobs and Trade 
     Promotion Act of 1999''.

     SEC. 2. REPEAL OF LIMITATION ON RECEIPTS ATTRIBUTABLE TO 
                   MILITARY PROPERTY WHICH MAY BE TREATED AS 
                   EXEMPT FOREIGN TRADE INCOME.

       (a) In General.--Subsection (a) of section 923 of the 
     Internal Revenue Code of 1986 (defining exempt foreign trade 
     income) is amended by striking paragraph (5) and by 
     redesignating paragraph (6) as paragraph (5).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. NICKLES:
  S. 1166. A bill to amend the Internal Revenue Code of 1986 to clarify 
that natural gas gathering lines are 7-year property for purposes of 
depreciation; to the Committee on Finance.


                 natural gas classification legislation

  Mr. NICKLES. Mr. President, today I have introduced legislation to 
clarify the proper depreciation of natural gas gathering lines. While 
depreciation is an arcane and technical area of the tax laws, continued 
uncertainty regarding the proper depreciation of these assets is having 
real and adverse impacts on members of the natural gas industry.
  The purpose of this bill is quite simple--to clarify that natural gas 
gathering lines are assets that are properly depreciated over seven 
years. The legislation would codify the seven-year treatment of these 
assets as well as providing a sufficient definition for the term 
``natural gas gathering line'' to distinguish these lines from 
transmission pipelines for depreciation purposes.
  I believe that these assets should currently be depreciated over 
seven years under existing law, and that this is the long standing 
practice of members of the industry. However, it has come to my 
attention that the Internal Revenue Service has been asserting both on 
audits and in litigation that seven-year depreciation is available only 
for gathering assets owned by producers. The IRS has asserted that all 
other gathering equipment is to be depreciated as transmission 
pipelines over a fifteen-year period. This confounding position ignores 
not only the plain language of the asset class guidelines governing 
depreciation, but would result in disparate treatment of the same 
assets based upon ownership for no discernible policy reason. Moreover, 
this position ignores the fundamental distinction between gathering and 
transmission of natural gas long enshrined in energy regulation and 
recognized by the Federal Energy Regulatory Commission as well as other 
state and federal regulatory bodies.
  Nonetheless, the IRS' position on this issue has resulted in the past 
in a division of authority among the lower courts. Although the United 
States Court of Appeals for the Tenth Circuit recently held that the 
seven-year cost recovery period was properly applied to natural gas 
gathering systems under existing law, this legislation is needed to 
provide certainty and uniformity regarding the proper depreciation of 
these assets throughout the country. With extensive gathering systems 
totaling many thousands of miles, we cannot afford to allow the proper 
depreciation of these substantial investments to remain subjects of 
dispute. I urge my fellow Senators to join me in securing the adoption 
of this important legislation.
                                 ______
                                 
      By Mr. McCAIN:
  S. 1168. A bill to eliminate the social security earnings test for 
individuals who have attained retirement age, to protect and preserve 
the social security trust funds, and for other purposes; to the 
Committee on Finance.


                protect social security now legislation

  Mr. McCAIN: Mr. President, today I rise to introduce legislation 
which will give older Americans the freedom to work and protect the 
Social Security system by taking it off budget, putting it in the 
black, and keeping it out of the hands of politicians. Our seniors and 
all working Americans deserve nothing less.
  The promise of Social Security is sacred and must not be broken. 
Millions of Americans count on Social Security to provide the bulk of 
their retirement income, because that is what the system has promised 
them. Allowing the federal government to continue spending the tax 
dollars in the Social Security Trust Fund on more government threatens 
the financial security of our nation's retirement system.
  The legislation I am introducing today will finally stop the 
government from stealing money from Social Security. It will lock up 
the Trust Fund and shore it up with the excess taxes collected by the 
federal government. It will guarantee that today's seniors who have 
worked and invested in the Social Security system will receive the 
benefits they were promised, without placing an unfair burden on 
today's workers.
  The legislation does three simple, but very important things.
  First, it repeals the burdensome and unfair Social Security earnings 
test that penalizes Americans between the ages of 65 and 70 for working 
and remaining productive after retirement. Under the current law, a 
senior citizen loses $1 of Social Security benefits for every $3 earned 
over the established limit, which is $15,500 in 1999.
  Because of this cap on earnings, our senior citizens are burdened 
with a 33.3 percent tax on their Social Security benefits. When this is 
combined with Federal, State, local and other Social Security taxes on 
earned income, it amounts to an outrageous 55 to 65 percent tax bite on 
their total income, and sometimes it can be even higher. An individual 
who is struggling to make ends meet by holding a job where they earn 
just $15,500 a year should not be faced with an effective marginal tax 
rate which exceeds 55 percent.
  What is most disturbing about the earnings test is the tremendous 
burden it places upon low-income senior citizens. Many older Americans 
need to work in order to cover their basic expenses: food, housing and 
health care. These lower-income seniors are hit hardest by the earnings 
test, while most wealthy seniors escape unscathed. This is because 
supplemental ``unearned'' income from stocks, investments and savings 
is not affected by the earnings test.
  For too long, many have given lip service to eliminating the earnings 
test, but to no avail. It is time that we finally eliminate this 
ridiculous policy. In his State of the Union speech, President Clinton 
indicated that he may finally be ready to repeal the unfair Social 
Security earnings test, as originally promised during his 1992 
campaign. However, the President did not include repeal of the earnings 
test in his budget proposal for 2000.
  Hard-working senior citizens who need to work to help pay for their 
food, rent, prescription drugs, and daily living expenses are tired of 
empty promises. They are tired of being penalized for working. 
Repealing the unfair earnings test, as proposed in this legislation, is 
the right thing to do.
  Seond, the bill protects the money in the Social Security Trust Funds 
by taking Social Security ``off budget'' and keeping this money out of 
the hands of politicians. This provision is

[[Page 11401]]

similar to other ``lock box'' proposals, except that it eliminates all 
the loopholes and exceptions, and truly locks up the money.
  I support and applaud the efforts of my Republican colleagues to move 
forward on the Social Security Lock Box legislation that has been 
delayed by members of the other party. However, I am concerned that it 
contains loopholes which would allow Social Security funds to be spent 
on items other than retirement benefits for seniors. It includes 
exceptions for emergencies, including economic recession, and allows 
the surpluses to be used to reduce the public debt. While I understand 
the intent of these provisions, I believe that we must stop making 
exceptions and lock up Social Security funds for Social Security 
purposes only.
  For too long, Social Security funds have been used to pay for 
existing federal programs, create new government programs, and to mask 
our nation's deficit. We must stop using Social Security to fund 
general government activities. We must save Social Security to pay 
retirement benefits to hard-working Americans, as promised in the law.
  The legislation I am introducing puts the Social Security trust fund 
surpluses safely away in a ``lock box'' without holes, so that neither 
we nor our successors can spend the people's retirement money on 
anything other than their retirement.
  Finally, the legislation requires that 62 percent of the non-Social 
Security budget surpluses from fiscal year 2001 through 2009 be 
transferred into the Social Security Trust Funds to strengthen and 
extend the solvency of the system. This amounts to $514 billion, based 
on current estimates of the non-Social Security surplus, which would 
shore up the system and ensure the availability of benefits for today's 
seniors and those working and paying into the system today.
  Locking up the Social Security Trust Fund and shoring up the fund 
with $514 billion in new money will extend the solvency of the system 
until about 2057, more than 20 years beyond the date when the system is 
currently expected to be bankrupt. This bill will provide senior 
citizens with the peace of mind that their Social Security checks will 
continue arriving each and every month. It will provide time for the 
Administration, the Congress, and the American people to develop and 
agree upon a structural reform plan which will save Social Security for 
future generations.
  Mr. President, I would like to note that the National Committee to 
Preserve Social Security and Medicare has reviewed this legislation and 
has provided a letter in support of it that I would like to insert in 
the Record at this point.
  Mr. President, this is legislation that will truly preserve and 
protect Social Security for the future, and it will remove the unfair 
tax on working seniors. I urge my colleagues to support the bill and I 
intend to work for its passage this Congress.
  Mr. President, I ask unanimous consent that the bill and additional 
material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1168

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

         TITLE I--ELIMINATION OF SOCIAL SECURITY EARNINGS TEST

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Older Americans Freedom to 
     Work Act''.

     SEC. 102. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO 
                   HAVE ATTAINED RETIREMENT AGE.

       (a) In General.--Section 203 of the Social Security Act (42 
     U.S.C. 403) is amended--
       (1) in subsection (c)(1), by striking ``the age of 
     seventy'' and inserting ``retirement age (as defined in 
     section 216(l))'';
       (2) in paragraphs (1)(A) and (2) of subsection (d), by 
     striking ``the age of seventy'' each place it appears and 
     inserting ``retirement age (as defined in section 216(l))'';
       (3) in subsection (f)(1)(B), by striking ``was age seventy 
     or over'' and inserting ``was at or above retirement age (as 
     defined in section 216(l))'';
       (4) in subsection (f)(3)--
       (A) by striking ``33\1/3\ percent'' and all that follows 
     through ``any other individual,'' and inserting ``50 percent 
     of such individual's earnings for such year in excess of the 
     product of the exempt amount as determined under paragraph 
     (8),''; and
       (B) by striking ``age 70'' and inserting ``retirement age 
     (as defined in section 216(l))'';
       (5) in subsection (h)(1)(A), by striking ``age 70'' each 
     place it appears and inserting ``retirement age (as defined 
     in section 216(l))''; and
       (6) in subsection (j)--
       (A) in the heading, by striking ``Age Seventy'' and 
     inserting ``Retirement Age''; and
       (B) by striking ``seventy years of age'' and inserting 
     ``having attained retirement age (as defined in section 
     216(l))''.
       (b) Conforming Amendments Eliminating the Special Exempt 
     Amount for Individuals Who Have Attained Retirement Age.--
       (1) Uniform exempt amount.--Section 203(f)(8)(A) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(A)) is amended by 
     striking ``the new exempt amounts (separately stated for 
     individuals described in subparagraph (D) and for other 
     individuals) which are to be applicable'' and inserting ``a 
     new exempt amount which shall be applicable''.
       (2) Conforming amendments.--Section 203(f)(8)(B) of the 
     Social Security Act (42 U.S.C. 403(f)(8)(B)) is amended--
       (A) in the matter preceding clause (i), by striking 
     ``Except'' and all that follows through ``whichever'' and 
     inserting ``The exempt amount which is applicable for each 
     month of a particular taxable year shall be whichever'';
       (B) in clauses (i) and (ii), by striking ``corresponding'' 
     each place it appears; and
       (C) in the last sentence, by striking ``an exempt amount'' 
     and inserting ``the exempt amount''.
       (3) Repeal of basis for computation of special exempt 
     amount.--Section 203(f)(8)(D) of the Social Security Act (42 
     U.S.C. (f)(8)(D)) is repealed.
       (c) Additional Conforming Amendments.--
       (1) Elimination of redundant references to retirement 
     age.--Section 203 of the Social Security Act (42 U.S.C. 403) 
     is amended--
       (A) in subsection (c), in the last sentence, by striking 
     ``nor shall any deduction'' and all that follows and 
     inserting ``nor shall any deduction be made under this 
     subsection from any widow's or widower's insurance benefit if 
     the widow, surviving divorced wife, widower, or surviving 
     divorced husband involved became entitled to such benefit 
     prior to attaining age 60.''; and
       (B) in subsection (f)(1), by striking clause (D) and 
     inserting the following: ``(D) for which such individual is 
     entitled to widow's or widower's insurance benefits if such 
     individual became so entitled prior to attaining age 60,''.
       (2) Conforming amendment to provisions for determining 
     amount of increase on account of delayed retirement.--Section 
     202(w)(2)(B)(ii) of the Social Security Act (42 U.S.C. 
     402(w)(2)(B)(ii)) is amended--
       (A) by striking ``either''; and
       (B) by striking ``or suffered deductions under section 
     203(b) or 203(c) in amounts equal to the amount of such 
     benefit''.
       (3) Provisions relating to earnings taken into account in 
     determining substantial gainful activity of blind 
     individuals.--The second sentence of section 223(d)(4)(A) of 
     the Social Security Act (42 U.S.C. 423(d)(4)(A)) is amended 
     by striking ``if section 102 of the Senior Citizens' Right to 
     Work Act of 1996 had not been enacted'' and inserting the 
     following: ``if the amendments to section 203 made by section 
     102 of the Senior Citizens' Right to Work Act of 1996 and by 
     the Senior Citizens' Freedom to Work Act of 1999 had not been 
     enacted''.
       (d) Effective Date.--The amendments and repeals made by 
     this section shall apply with respect to taxable years ending 
     after December 31, 1998.

  TITLE II--PROTECTING AND PRESERVING THE SOCIAL SECURITY TRUST FUNDS

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Protecting and Preserving 
     the Social Security Trust Funds Act''.

     SEC. 202. FINDINGS.

       Congress finds that--
       (1) the $69,246,000,000 unified budget surplus achieved in 
     fiscal year 1998 was entirely due to surpluses generated by 
     the social security trust funds and the cumulative unified 
     budget surpluses projected for subsequent fiscal years are 
     primarily due to surpluses generated by the social security 
     trust funds;
       (2) Congress and the President should not use the social 
     security trust funds surpluses to balance the budget or fund 
     existing or new non-social security programs;
       (3) all surpluses generated by the social security trust 
     funds must go towards saving and strengthening the social 
     security system; and
       (4) at least 62 percent of the on-budget (non-social 
     security) surplus should be reserved and applied to the 
     social security trust funds.

     SEC. 203. PROTECTION OF THE SOCIAL SECURITY TRUST FUNDS.

       (a) Protection by Congress.--
       (1) Reaffirmation of support.--Congress reaffirms its 
     support for the provisions of section 13301 of the Budget 
     Enforcement Act of 1990 that provides that the receipts and 
     disbursements of the social security trust

[[Page 11402]]

     funds shall not be counted for the purposes of the budget 
     submitted by the President, the congressional budget, or the 
     Balanced Budget and Emergency Deficit Control Act of 1985.
       (2) Protection of social security benefits.--Balances in 
     the Federal Old-Age and Survivors Insurance Trust Fund and 
     the Federal Disability Insurance Trust Fund shall be used 
     solely for paying social security benefit payments as 
     promised to be paid by law.
       (b) Points of Order.--Section 301 of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following:
       ``(j) Social Security Point of Order.--It shall not be in 
     order in the Senate to consider a concurrent resolution on 
     the budget, an amendment thereto, or a conference report 
     thereon that violates section 13301 of the Budget Enforcement 
     Act of 1990.
       ``(k) Social Security Surplus Protection Point of Order.--
     It shall not be in order in the Senate to consider a 
     concurrent resolution on the budget, an amendment thereto, or 
     a conference report thereon that would cause or increase an 
     on-budget deficit for any fiscal year.
       ``(l) Subsequent legislation.--
       ``(1) In general.--It shall not be in order in the Senate 
     to consider any bill, joint resolution, amendment, motion, or 
     conference report if--
       ``(A) the enactment of the bill or resolution as reported;
       ``(B) the adoption and enactment of that amendment; or
       ``(C) the enactment of the bill or resolution in the form 
     recommended in the conference report;
     would cause or increase an on-budget deficit for any fiscal 
     year.
       ``(2)  Exception to point of Order.--This subsection shall 
     not apply to social security reform legislation that would 
     protect the social security system from insolvency and 
     preserve benefits as promised to beneficiaries.''.
       (c) Supermajority Waiver and Appeal.--Subsections (c)(1) 
     and (d)(2) of section 904 of the Congressional Budget Act of 
     1974 are amended by striking ``305(b)(2),'' and inserting 
     ``301(j), 301(k), 301(l), 305(b)(2)''.

     SEC. 204. SEPARATE BUDGET FOR SOCIAL SECURITY.

       (a) Exclusion.--The outlays and receipts of the social 
     security program under title II of the Social Security Act, 
     including the Federal Old-Age and Survivors Insurance Trust 
     Fund and the Federal Disability Insurance Trust Fund and the 
     related provisions of the Internal Revenue Code of 1986, 
     shall be excluded from--
       (1) any official documents by Federal agencies regarding 
     the surplus or deficit totals of the budget of the Federal 
     Government as submitted by the President or of the surplus or 
     deficit totals of the congressional budget; and
       (2) any description or reference in any official 
     publication or material issued by any other agency or 
     instrumentality of the Federal Government.
       (b) Separate Budget.--The outlays and receipts of the 
     social security program under title II of the Social Security 
     Act, including the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund 
     and the related provisions of the Internal Revenue Code of 
     1986, shall be submitted as a separate budget.

     SEC. 205. PRESIDENT'S BUDGET.

       Section 1105(f) of title 31, United States Code, is amended 
     by striking ``in a manner consistent'' and inserting ``in 
     compliance''.

                TITLE III--SAVING SOCIAL SECURITY FIRST

     SEC. 301. DESIGNATION OF ON-BUDGET SURPLUS.

       (a) In General.--Notwithstanding any other provision of 
     law, not less than the amount referred to in subsection (b) 
     for a fiscal year shall be reserved for and applied to the 
     social security trust funds for that fiscal year in addition 
     to the Social Security Trust Fund surpluses.
       (b) Amount Reserved.--The amount referred to in this 
     subsection is--
       (1) for fiscal year 2001, $6,820,000,000;
       (2) for fiscal year 2002, $36,580,000,000;
       (3) for fiscal year 2003, $31,620,000,000;
       (4) for fiscal year 2004, $42,160,000,000;
       (5) for fiscal year 2005, $48,980,000,000;
       (6) for fiscal year 2006, $71,920,000,000;
       (7) for fiscal year 2007, $83,080,000,000;
       (8) for fiscal year 2008, $90,520,000,000; and
       (9) for fiscal year 2009, $102,300,000,000.

     SEC. 302. SENSE OF THE SENATE ON DEDICATING ADDITIONAL 
                   SURPLUS AMOUNTS.

       It is the sense of the Senate if the budget surplus in 
     future years is greater than the currently projected surplus, 
     serious consideration should be given to directing more of 
     the surplus to strengthening the social security trust funds.
                                  ____

                                    National Committee to Preserve


                                 Social Security and Medicare,

                                     Washington, DC, May 26, 1999.
     Hon. John McCain,
     Russell Building, U.S. Senate,
     Washington, DC.
       Dear Senator McCain: On behalf of the approximately five 
     million members and supporters of the National Committee, I 
     commend your leadership on the issue of protecting the Social 
     Security trust funds and eliminating the Social Security 
     earnings test.
       The National Committee's members earnestly believe in the 
     future of the Social Security system and its critical 
     importance to America's hard working families.
       Your legislation would not only safe-guard the Social 
     Security surpluses and reaffirm Social Security's off-budget 
     status, but would also strengthen the program's solvency by 
     committing 62 percent of projected off-budget surpluses to 
     Social Security. Using the off-budget surpluses to fortify 
     Social Security is fiscally responsible and will help our 
     nation better meet the challenge of the baby-boom 
     generation's retirement.
       We also commend you for your long commitment to eliminating 
     the earnings test for individuals who have reached normal 
     retirement age. Encouraging seniors to remain in the work 
     force as long as they are willing and able to work 
     strengthens their ability to remain financially independent 
     throughout their retirement years.
           Sincerely,
                                                     Max Richtman,
                                         Executive Vice President.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Cochran, and Mr. Burns):
  S. 1169. A bill to require that certain multilateral development 
banks and other lending institutions implement independent third party 
procurement monitoring, and for other purposes; to the Committee on 
Foreign Relations.


              competition in foreign commerce act of 1999

  Mr. McCAIN. Mr. President, I along with Senators Cochran and Burns 
are proud to introduce the Fair Competition in Foreign Commerce Act of 
1999, to address the serious problem of waste, fraud and abuse 
resulting from bribery and corruption in international development 
projects. This legislation will set conditions for U.S. funding through 
multilateral development banks. These conditions will require the 
country receiving aid to adopt substantive procurement reforms and 
independent third-party procurement monitoring of their international 
development projects.
  During the cold war, banks and governments often looked the other way 
as pro-western leaders in developing countries treated national 
treasuries as their personal treasury troves. Today, we cannot afford 
to look the other way when we see bribery and corruption running 
rampant in other countries because these practices undermine our goals 
of promoting democracy and accountability, fostering economic 
development and trade liberalization, and achieving a level playing 
field throughout the world for American businesses.
  The United States is increasingly called upon to lead multilateral 
efforts to provide much-needed economic assistance to developing 
nations. The American taxpayers make substantial contributions to the 
International Bank for Reconstruction and Development, the 
International Development Association, the International Finance 
Corporation, the Inter-American Development Bank, the International 
Monetary Fund, the Asian Development Bank, the Inter-American 
Investment Corporation, the North American Development Bank, and the 
African Development Fund.
  However, it is critical that we take steps to ensure that Americans' 
hard-earned tax dollars are being used appropriately. The Fair 
Competition in Foreign Commerce Act of 1999 is designed to decrease the 
stifling effects of bribery and corruption in international development 
contracts. By doing so, we will (1) enable U.S. businesses to become 
more competitive when bidding against foreign firms which secure 
government contracts through bribery and corruption; (2) encourage 
additional direct investment to developing nations, thus increasing 
their economic growth, and (3) increase opportunities for U.S. 
businesses to export to these nations as their economies expand and 
mature.
  Multilateral lending efforts are only effective in spurring economic 
development if the funds are used to further the intended development 
projects, not to line the pockets of foreign bureaucrats and their 
well-connected political allies.
  When used for its intended purpose, foreign aid yields both short- 
and long-term benefits to U.S. businesses. Direct foreign aid assists 
developing nations to develop their infrastructure. A developed 
infrastructure is vital to creating and sustaining a modern dynamic

[[Page 11403]]

economy. Robust new economies create new markets to which U.S. 
businesses can export their goods and services. Exports are key to the 
U.S. role in the constantly expanding and increasingly competitive 
global economy.
  The current laws and procedures designed to detect and deter 
corruption after the fact are inadequate and meaningless. This bill 
seeks to ensure that U.S. taxpayers' hard-earned dollars contributed to 
international projects are used appropriately, by detecting and 
eliminating bribery and corruption before they can taint the integrity 
of international projects. Past experience illustrates that it is 
ineffective to attempt to reverse waste, fraud, and abuse in large-
scale foreign infrastructure projects, once the abuse has already 
begun. Therefore, it is vital to detect the abuses before they occur.
  The Fair Competition in Foreign Commerce Act of 1999 requires the 
United States Government, through its participation in multilateral 
lending institutions and in its disbursement of non-humanitarian 
foreign assistance funds, to: (1) require the recipient international 
financial institution to adopt an anti-corruption plan that requires 
the aid recipient to use independent third-party procurement monitoring 
services, at each stage of the procurement process to ensure openness 
and transparency in government procurements, and (2) require the 
recipient nation to institute specific strategies for minimizing 
corruption and maximizing transparency in procurements at each stage of 
the procurement process. The legislation directs the Secretary of the 
Treasury to instruct the United States Executive Directors of the 
various international institutions to use the voice and vote of the 
United States to prevent the lending institution from providing funds 
to nations which do not satisfy the procurement reforms criteria.
  This Act has two important exceptions. First, it does not apply to 
assistance to meet urgent humanitarian needs such as providing food, 
medicine, disaster, and refugee relief. Second, it also permits the 
President to waive the funding restrictions with respect to a 
particular country, if making such funds available is important to the 
national security interest of the United States.
  Independent third-party procurement monitoring is a system where an 
uninvolved entity conducts a program to eliminate bias, to promote 
transparency and open competition, and to minimize fraud and 
corruption, waste and inefficiency and other misuse of funds in 
international procurements. The system does this through an independent 
evaluation of the technical, financial, economic and legal aspects of 
each stage of a procurement, from the development and issuance of 
technical specifications, bidding documents, evaluation reports and 
contract preparation, to the delivery of goods and services. This 
monitoring takes place throughout the entire term of the international 
development project.
  Mr. President, this system has worked for other governments. 
Procurement reforms and third-party procurement monitoring resulted in 
the governments of Kenya, Uganda, Colombia, and Guatemala experiencing 
significant cost savings in recent procurements. For instance, the 
Government of Guatemala experienced an overall savings of 48% when it 
adopted a third-party procurement monitoring system and other 
procurement reform measures in a recent contract for pharmaceuticals.
  Mr. President, bribery and corruption have many victims. Bribery and 
corruption hamper vital U.S. interests. Both harm consumers, taxpayers, 
and honest traders who lose contracts, production, and profits because 
they refuse to offer bribes to secure foreign contracts.
  Bribery and corruption have become a serious problem. A World Bank 
survey of 3,600 firms in 69 countries showed 40% of businesses paying 
bribes. More startling is that Germany still permits its companies to 
take a tax deduction for bribes. Commerce Secretary Daley summed up the 
serious impact of bribery and corruption upon American businesses 
ability to compete for foreign contracts in 1997:

       Since mid-1994, foreign firms have used bribery to win 
     approximately 180 commercial contracts valued at nearly $80 
     billion. We estimate that over the past year, American 
     companies have lost at least 50 of these contracts, valued at 
     $15 billion. And since many of these contracts were for 
     groundbreaking projects--the kind that produce exports for 
     years to come--the ultimate cost could be much higher.

  Since then American companies have continued to lose international 
development contracts because of unfair competition from businesses 
paying bribes. This terrible trend must be brought to a halt.
  Exports will continue to play an increasing role in our economic 
expansion. We can ill afford to allow any artificial impediments to our 
ability to export. Bribery and corruption significantly hinder American 
businesses' ability to compete for lucrative overseas government 
contracts. American businesses are simply not competitive when bidding 
against foreign firms that have bribed government officials to secure 
overseas government contracts. Openness and fairness in government 
contracts will greatly enhance opportunities to compete in the rapidly 
expanding global economy. Exports equate to jobs. Jobs equate to more 
money in hard-working Americans' pockets. More money in Americans' 
pockets means more money for Americans to save and invest in their 
futures.
  Bribery and corruption also harm the country receiving the aid 
because bribery and corruption often inflate the cost of international 
development projects. For example, state sponsorship of massive 
infrastructure projects that are deliberately beyond the required 
specification needed to meet the objective is a common example of the 
waste, fraud, and abuse inherent in corrupt procurement practices. 
Here, the cost of corruption is not the amount of the bribe itself, but 
the inefficient use of resources that the bribes encourage.
  Bribery and corruption drive up costs. Companies are forced to 
increase prices to cover the cost of bribes they are forced to pay. A 
2% bribe on a contract can raise costs by 15%. Over time, tax revenues 
will have to be raised or diverted from other more deserving projects 
to fund these excesses. Higher taxes and the inefficient use of 
resources both hinder growth.
  The World Bank and the IMF both recognize the link between bribery 
and corruption, and decreased economic growth. Recent studies also 
indicate that high levels of corruption are associated with low levels 
of investment and growth. Furthermore, corruption lessens the 
effectiveness of industrial policies and encourages businesses to 
operate in the unofficial sector in violation of tax and regulatory 
laws. More important, corruption breeds corruption and discourages 
legitimate investment. In short, bribery and corruption create a 
``lose-lose'' situation for the U.S. and developing nations.
  The U.S. recognizes the damaging effects bribery and corruption have 
at home and abroad. The U.S. continues to combat foreign corruption, 
waste, and abuse on many fronts--from prohibiting U.S. firms from 
bribing foreign officials, to leading the anti-corruption efforts in 
the United Nations, the Organization of American States, and the 
Organization for Economic Cooperation and Development (``OECD''). The 
U.S. was the first country to enact legislation (the Foreign Corrupt 
Practices Act) to prohibit its nationals and corporations from bribing 
foreign public officials in international and business transactions.
  However, we must do more. The Foreign Corrupt Practices Act prevents 
U.S. nationals and corporations from bribing foreign officials, but 
does nothing to prevent foreign nationals and corporations from bribing 
foreign officials to obtain foreign contracts. Valuable resources are 
often diverted or squandered because of corrupt officials or the use of 
non-transparent specifications, contract requirements and the like in 
international procurements for goods and services. Such corrupt 
practices also minimize competition and prevent the recipient nation or 
agency from receiving the full value of the goods and services for 
which it bargained. In addition, despite the importance of 
international markets to U.S.

[[Page 11404]]

goods and service providers, many U.S. companies refuse to participate 
in international procurements that may be corrupt.
  This legislation is designed to provide a mechanism to ensure, to the 
extent possible, the integrity of U.S. contributions to multilateral 
lending institutions and other non-humanitarian U.S. foreign aid. 
Corrupt international procurements, often funded by these multilateral 
banks, weaken democratic institutions and undermine the very 
opportunities that multilateral lending institutions were founded to 
promote. This will encourage and support the development of transparent 
government procurement systems, which are vital for emerging 
democracies constructing the infrastructure that can sustain market 
economies.
  Mr. President, on behalf of the millions of Americans who will 
benefit from increased opportunities for U.S. businesses to participate 
in the global economy, and the billions of people in developing nations 
throughout the world who are desperate for economic assistance, I urge 
my colleagues to support this legislation and demonstrate their 
continued commitment to the orderly evolution of the global economy and 
the efficient use of American economic assistance.
  Mr. President, 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. 1169

       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 ``Fair Competition in Foreign 
     Commerce Act of 1999''.

     SEC. 2. FINDINGS AND STATEMENT OF PURPOSE.

       (a) Findings.--Congress finds that--
       (1) The United States makes substantial contributions and 
     provides significant funding for major international 
     development projects through the International Bank for 
     Reconstruction and Development, the International Development 
     Association, the International Finance Corporation, the 
     Inter-American Development Bank, the International Monetary 
     Fund, the Asian Development Bank, the Inter-American 
     Investment Corporation, the North American Development Bank, 
     the African Development Fund, and other multilateral lending 
     institutions.
       (2) These international development projects are often 
     plagued with fraud, corruption, waste, inefficiency, and 
     misuse of funding.
       (3) Fraud, corruption, waste, inefficiency, misuse, and 
     abuse are major impediments to competition in foreign 
     commerce throughout the world.
       (4) Identifying these impediments after they occur is 
     inadequate and meaningless.
       (5) Detection of impediments before they occur helps to 
     ensure that valuable United States resources contributed to 
     important international development projects are used 
     appropriately.
       (6) Independent third-party procurement monitoring is an 
     important tool for detecting and preventing such impediments.
       (7) Third-party procurement monitoring includes evaluations 
     of each stage of the procurement process and assures the 
     openness and transparency of the process.
       (8) Improving transparency and openness in the procurement 
     process helps to minimize fraud, corruption, waste, 
     inefficiency, and other misuse of funding, and promotes 
     competition, thereby strengthening international trade and 
     foreign commerce.
       (b) Purpose.--The purpose of this Act is to build on the 
     excellent progress associated with the Organization on 
     Economic Development and Cooperation Agreement on Bribery and 
     Corruption, by requiring the use of independent third-party 
     procurement monitoring as part of the United States 
     participation in multilateral development banks and other 
     lending institutions and in the disbursement of 
     nonhumanitarian foreign assistance funds.

     SEC. 3. DEFINITIONS.

       (a) Definitions.--In this Act:
       (1) Appropriate committees.--The term ``appropriate 
     committees'' means the Committee on Commerce, Science, and 
     Technology of the Senate and the Committee on Commerce of the 
     House of Representatives.
       (2) Independent third-party procurement monitoring.--The 
     term ``independent third-party procurement monitoring'' means 
     a program to--
       (A) eliminate bias,
       (B) promote transparency and open competition, and
       (C) minimize fraud, corruption, waste, inefficiency, and 
     other misuse of funds,

     in international procurement through independent evaluation 
     of the technical, financial, economic, and legal aspects of 
     the procurement process.
       (3) Independent.--The term ``independent'' means that the 
     person monitoring the procurement process does not render any 
     paid services to private industry and is neither owned nor 
     controlled by any government or government agency.
       (4) Each stage of procurement.--The term ``each stage of 
     procurement'' means the development and issuance of technical 
     specifications, bidding documents, evaluation reports, 
     contract preparation, and the delivery of goods and services.
       (5) Multilateral development banks and other lending 
     institutions.--The term ``multilateral development banks and 
     other lending institutions'' means the International Bank for 
     Reconstruction and Development, the International Development 
     Association, the International Finance Corporation, the 
     Inter-American Development Bank, the International Monetary 
     Fund, the Asian Development Bank, the Inter-American 
     Investment Corporation, the North American Development Bank, 
     and the African Development Fund.

     SEC. 4. REQUIREMENTS FOR FAIR COMPETITION IN FOREIGN 
                   COMMERCE.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     transmit to the President and to appropriate committees of 
     Congress a strategic plan for requiring the use of 
     independent third-party procurement monitoring and other 
     international procurement reforms relating to the United 
     States participation in multilateral development banks and 
     other lending institutions.
       (b) Strategic Plan.--The strategic plan shall include an 
     instruction by the Secretary of the Treasury to the United 
     States Executive Director of each multilateral development 
     bank and lending institution to use the voice and vote of the 
     United States to oppose the use of funds appropriated or made 
     available by the United States for any non-humanitarian 
     assistance, until--
       (1) the recipient international financial institution has 
     adopted an anticorruption plan that requires the use of 
     independent third-party procurement monitoring services and 
     ensures openness and transparency in government procurement; 
     and
       (2) the recipient country institutes specific strategies 
     for minimizing corruption and maximizing transparency in each 
     stage of the procurement process.
       (c) Annual Reports.--Not later than June 29 of each year, 
     the Secretary of the Treasury shall report to Congress on the 
     progress in implementing procurement reforms made by each 
     multilateral development bank and lending institution and 
     each country that received assistance from a multilateral 
     development bank or lending institution during the preceding 
     year.
       (d) Restrictions on Assistance.--Notwithstanding any other 
     provision of law, no funds appropriated or made available for 
     nonhumanitarian foreign assistance programs, including the 
     activities of the Agency for International Development, may 
     be expended for those programs unless the recipient country, 
     multilateral development bank or lending institution has 
     demonstrated that--
       (1) procurement practices are open, transparent, and free 
     of corruption, fraud, inefficiency, and other misuse, and
       (2) independent third-party procurement monitoring has been 
     adopted and is being used by the recipient.

     SEC. 5. EXCEPTIONS.

       (a) National Security Interest.--Section 4 shall not apply 
     with respect to a country if the President determines with 
     such respect to such country that making funds available is 
     important to the national security interest of the United 
     States. Any such determination shall cease to be effective 6 
     months after being made unless the President determines that 
     its continuation is important to the national security 
     interest of the United States.
       (b) Other Exceptions.--Section 4 shall not apply with 
     respect to assistance to--
       (1) meet urgent humanitarian needs (including providing 
     food, medicine, disaster, and refugee relief);
       (2) facilitate democratic political reform and rule of law 
     activities;
       (3) create private sector and nongovernmental organizations 
     that are independent of government control; and
       (4) facilitate development of a free market economic 
     system.
                                 ______
                                 
      By Mr. TORRICELLI:
  S. 1170. A bill to provide demonstration grants to local educational 
agencies to enable the agencies to extend the length of the school 
year; to the Committee on Health, Education, Labor, and Pensions.


     legislation to provide demonstration grants to local agencies

 Mr. TORRICELLI. Mr. President, I rise today to introduce 
legislation authorizing funding for extended school day and extended 
school year programs across the country. The continuing gap between 
American students and those in other countries, combined with the 
growing needs of working and the

[[Page 11405]]

growing popularity of extending both the school day and the school 
year, have made this educational option a valuable one for many school 
districts.
  Students in the United States currently attend school an average of 
only 180 days per year, compared to 220 days in Japan, and 222 days in 
both Korea and Taiwan. American students also receive fewer hours of 
formal instruction per year compared to their counterparts in Taiwan, 
France, and Germany. We cannot expect our students to remain 
competitive with those in other industrialized countries if they must 
learn the same amount of information in less time.
  Our school calendar is based on a no longer relevant agricultural 
cycle that existed when most American families lived in rural areas and 
depended on their farms for survival. The long summer vacation allowed 
children to help their parents work in the fields. Today, summer is a 
time for vacations, summer camps, and part-time jobs. Young people can 
certainly learn a great deal at summer camp, and a job gives them 
maturity and confidence. However, more time in school would provide the 
same opportunities while helping students remain competitive with those 
in other countries. As we debate the need to bring in skilled workers 
from other countries, the need to improve our system of education has 
become increasingly important.
  In 1994, the Commission on Time and Learning recommended keeping 
schools open longer in order to meet the needs of both children and 
communities, and the growing popularity of extended-day programs is 
significant. Between 1987 and 1993, the availability of extended-day 
programs in public elementary schools has almost doubled. While school 
systems have begun to respond to the demand for lengthening the school 
day, the need for more widespread implementation still exists. 
Extended-day programs are much more common in private schools than 
public schools, and only 18 percent of rural schools have reported an 
extended-day program.
  This bill would authorize $25 million per year over the next five 
years for the Department of Education to administer a demonstration 
grant program. Local education agencies would then be able to conduct a 
variety of longer school day and school year programs, such as 
extending the school year, studying the feasibility of extending the 
school day, and implementing strategies to maximize the quality of 
extended core learning time.
  The constant changes in technology, and greater international 
competition, have increased the pressure on American students to meet 
these challenges. Providing the funding for programs to lengthen the 
school day and school year would leave American students better 
prepared to meet the challenges facing them in the next 
century.
                                 ______
                                 
      By Mr. COVERDELL (for himself, Mrs. Feinstein, Mr. DeWine, Mr. 
        Helms, Mr. Lott, Mr. Torricelli, Mr. Craig, Mr. Graham, and Mr. 
        Reid):
  S. 1171. A bill to block assets of narcotics traffickers who pose an 
unusual and extraordinary threat to the national security, foreign 
policy, and economy of the United States; to the Committee on Banking, 
Housing, and Urban Affairs.


          legislation to block assets of narcotics traffickers

 Mr. COVERDELL. Mr. President, I am pleased to join my 
colleague from California, Senator Feinstein, in introducing 
legislation that will intensify our fight against the terrible scourge 
of drugs. A version of this bill was originally introduced on March 2. 
Since then, we have conferred with various agencies, including the 
Department of the Treasury's Office of Foreign Assets Control, the 
Department of Justice, and the Office of National Drug Control Policy. 
All are supportive of this concept. The current bill includes some of 
their comments and suggestions.
  Simply put, Mr. President, this legislation decertifies the drug 
kingpins by preventing them, and any of their associates or associated 
campanies, from conducting business with the United States. The bill 
codifies and expands a 1995 Executive Order created under the 
International Emergency Economic Powers Act (IEEPA), which targeted 
Colombia drug traffickers. The bill expands the existing Executive 
Order to include other foreign drug traffickers considered a threat to 
our national security. The bill freezes the assets of the identified 
drug traffickers and their associates and prohibits these individuals 
and organizations from conducting any financial or commercial dealings 
with the United States.
  In the case of the Cali cartel in Colombia, this tool was remarkably 
effective in weakening the drug kingpins. The United States targeted 
over 150 companies and nearly 300 individuals involved in the ownership 
and management of the Colombian drug cartels' non-narcotics business 
empire, everything from drugstores to poultry farms. Once labeled as 
drug-linked businesses, these companies found themselves financially 
isolated. Banks and legitimate companies chose not to do business with 
the blacklisted firms, cutting off key revenue flows to the cartels.
  The goal is to isolate the leaders of the drug cartels and prevent 
them from doing business with the United States. Taking legitimate U.S. 
dollars out of drug dealers' pockets is a vital step in destroying 
their ability to traffick narcotics across our borders. This is a bold 
but necessary new tool to wage war against illegal drugs and to curb 
the increasing power of the drug cartels.
                                 ______
                                 
      By Mr. TORRICELLI:
  S. 1173. A bill to provide for a teacher quality enhancement and 
incentive program; to the Committee on Health, Education, Labor, and 
Pensions.


               teacher quality enhancement incentive act

  Mr. TORRICELLI. Mr. President, today I am introducing the 
Teacher Quality Enhancement and Incentive Act. I rise to focus the 
nation's attention on the potentially critical shortage of school 
teachers we will be facing in upcoming years. While K-12 enrollments 
are steadily increasing the teacher population is aging. There is a 
need, now more than ever, to attract competent, capable, and bright 
college graduates or mid-career professionals to the teaching 
profession.
  The Department of Education projects that 2 million new teachers will 
have to be hired in the next decade. Shortage, if they occur, will most 
likely be felt in urban or rural regions of the country where working 
conditions may be difficult or compensation low. We cannot create a 
high quality learning environment for our students if they are forced 
into over-crowded classrooms with under-qualified instructors. If our 
students are to receive a high quality education and remain competitive 
in the global market we must attract talented and motivated people to 
the teaching profession in large numbers.
  Law firms, technology firms, and many other industries typically 
offer signing bonuses in order to attract the best possible candidates 
to their organizations. Part of making the teaching profession 
competitive with the private sector is to match these institutional 
perks.
  This bill would authorize $15 million per year over the next five 
years for the Department of Education to award grants to local 
educational agencies (LEAs) for the purpose of attracting highly 
qualified individuals to teaching. These grants will enable LEAs in 
high poverty and rural areas to award new teachers a $15,000 tax free 
salary bonus, spread over their first two years of employment, over and 
above their regular starting salary. These bonuses will attract 
teachers to districts where they are most needed.
  On an annual basis, LEAs will use competitive criteria to select the 
best and brightest teaching candidates based on objective measures, 
including test scores, grade point average or class rank and such other 
criteria as each LEA may determine. The number of bonuses awarded 
depends upon the number of students enrolled in the LEA.
  Teachers who receive the bonus will be required to teach in low 
income or rural areas for a minimum of four years. If they fail to work 
the four year minimum they will be required to repay the bonus they 
received.
  By making this funding available. America's schools will better be 
able to

[[Page 11406]]

compete with businesses for the best and brightest college graduates. 
These new teachers will, in turn, produce better students and lower the 
risk of a possible teacher shortage. With arguably the most successful 
economy of any nation in history, we should be doing more to make 
teaching an attractive career alternative for qualified and motivated 
individuals. The Teacher Quality Enhancement and Incentive Act will be 
an excellent first step.
                                 ______
                                 
      By Ms. COLLINS:
  S. 1175. A bill to amend title 49, United States Code, to require 
that fuel economy labels for new automobiles include air pollution 
information that consumers can use to help communities meet Federal air 
quality standards; to the Committee on Commerce, Science, and 
Transportation.


         Automobile Emissions Consumer Information Act of 1999

  Ms. COLLINS. Mr. President, I rise today to introduce a bill that 
will give consumers important information many will want to factor into 
their decisions when they shop for a new vehicle. My legislation will 
ensure that consumers have the information they need to compare the 
pollution emissions of new vehicles. The Automobile Emissions Consumer 
Information Act of 1999 simply takes data already collected by the 
Environmental Protection Agency and requires that this information be 
presented to consumers in an understandable format as they purchase 
cars. This proposal, if enacted into law, will benefit both the 
consumer and the environment.
  This measure is modeled after existing requirements for gas mileage 
information. It ensures that emissions information will be on the 
window stickers of new cars just as fuel efficiency information is 
currently displayed. Additionally, emissions information for all new 
vehicles will be published by the EPA in an easy-to-understand booklet 
for consumers.
  This information is already collected by the EPA, but is disseminated 
in an extremely burdensome way. First, consumers must pro-actively 
request emissions information. Then, after securing the relevant EPA 
documents, the consumer is presented with an overload of complicated 
data in spreadsheet form. Furthermore, the EPA organizes emissions data 
by engine type and not by the more commonly compared model and make 
categories.
  Let me refer to a page from the EPA's 1999 Annual Certification Test 
Results of emission standards. As my colleagues can see, it is an 
extraordinarily difficult document to read and interpret. The 
complicated nature of this document becomes increasingly apparent when 
this table is compared with the simplified information currently 
provided to consumers about fuel mileage. The federal government should 
be aiding consumers who want to consider emissions in choosing which 
vehicle to purchase. This bill will do just that.
  Mr. President, this is not a new idea. The Clean Air Act Amendments 
of 1970 mandated that the EPA make available to the public the data 
collected from manufacturers on emissions. The 1970 Amendments further 
required, ``Such results shall be described in such nontechnical manner 
as will responsibly disclose to prospective ultimate purchasers of new 
motor vehicles and new motor vehicle engines the comparative 
performance of the vehicles and engines tested.'' Mr. President, 
clearly, the EPA is not abiding by the letter and spirit of the 1970 
law.
  It is important to note that the Automobile Emissions Consumer 
Information Act of 1999 does not require either motor vehicle 
manufacturers or the EPA to conduct new tests. Manufacturers must 
already test emissions of all new vehicles and submit the test results 
to the EPA. Unfortunately, the gathering of this information does not 
translate into useful information for consumers.
  While all vehicles must meet the Federal standards, some vehicles 
exceed the standards. Consumers who are concerned about vehicle 
emissions deserve to be able to exercise their right to buy from 
manufacturers who take extra steps in reducing emissions, if they so 
chose.
  Representative Brian Bilbray of California is introducing this bill 
in the House of Representatives today. I greatly appreciate his 
leadership on this issue and his bringing this common-sense proposal to 
my attention. He is clearly committed to protecting both consumers and 
the environment.
  Mr. President, I urge my colleagues to join me in enacting the 
Automobile Emissions Consumer Information Act, and I ask unanimous 
consent that one page from the EPA's 1999 Annual Certification Test 
Results of emissions standards be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  CERTIFICATION AND FUEL ECONOMY INFORMATION SYSTEM (CFEIS), 1999 ANNUAL CERTIFICATION TEST RESULTS, ALL SALES AREA--LIGHT DUTY VEHICLES AND LIGHT DUTY TRUCKS
                     [Manufacturer: 20; DaimlerChrysler; Engine Family/Test Group: XCRXA0318H11; Engine System: 1; Evaporative/Refueling Family: RXE0174G4H; Evap System: 1]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Emission    Eng.                            Axle     Tst                                                          Cert
     Division          Car line tested       control    disp    Trn      ETW      HP     Rat     Prc    Fl  Ty     SA  Cd      UL           Emission          level      Std     Tier      DF
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dodge............  Ram 1500, Pickup 4WD..    20/99///   5.2       L4    5500    14.8    3.55      34       6    CA             12    HC-TEV-3D                  .7       2.5        T1    .05+
    Do...........  Ram 1500, Pickup 2WD..    20/99///   5.2       L4    5500    13.9    3.55      35      23    CA             50    CO                        2.0       4.4        T1   1.156*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA             50    HC-NM                      .15      0.32       T1   1.055*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA             50    NOX                        .4       0.7        T1   1.28*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA            120    CO                        2.4       6.4        T1   1.393*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA            120    HC-NM                      .16      0.46       T1   1.139*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA            120    NOX                        .6       0.98       T1   1.706*
    Do...........  Ram 1500, Pickup 4WD..    20/99///   5.2       L4    5500    16.2    3.55      35      23    CA             50    CO                        1.9       4.4        T1   1.156*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA             50    HC-NM                      .17      0.32       T1   1.055*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA             50    NOX                        .2       0.7        T1   1.28*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA            120    CO                        2.3       6.4        T1   1.393*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA            120    HC-NM                      .18      0.46       T1   1.139*
                                           ..........  ......  .....  ........  .....  ......     35      23    CA            120    NOX                        .3       0.98       T1   1.706*
    Do...........  ...... do.............    20/99///   5.2       L4    5500    .....   3.55      11      24    CA             50    CO-COLD                   5.6      12.5       N/A   1.156*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                 ______
                                 
      By Mr. ROBB (for himself, Mr. Warner, and Mr. Sarbanes):
  S. 1176. A bill to provide for greater access to child care services 
for Federal employees; to the Committee on Governmental Affairs.


               CHILD CARE SERVICES FOR FEDERAL EMPLOYEES

  Mr. ROBB. Mr. President, today I'm introducing legislation to assist 
federal workers seeking affordable care for their young children.
  Many federal facilities provide child care centers for their 
employees' use. But for many lower and middle income employees, these 
services are simply unaffordable--their costs put them beyond the reach 
of these families. The bill I am introducing today, along with Senators 
Warner and Sarbanes, will make this option affordable for these 
employees.
  This legislation authorizes federal agencies to use appropriated 
funds to help lower and middle income federal workers better afford the 
child care services they need. Let me emphasize that these funds have 
already been appropriated, meaning no new government spending is 
involved. This is a modest, cost-effective solution that will certainly 
ease the minds of parents who are understandably concerned about their 
child care needs.
  Our federal employees should not have to choose between their desire 
for public service and their need for child care services.
                                 ______
                                 
      By Mr. DASCHLE:
  S. 1178. A bill to direct the Secretary of the Interior to convey 
certain parcels of land acquired for the Blunt Reservoir and Pierre 
Canal features of the

[[Page 11407]]

Oahe Irrigation Project, South Dakota, to the Commission of Schools and 
Public Lands of the State of South Dakota for the purpose of mitigating 
lost wildlife habitat, on the condition that the current preferential 
leaseholders shall have an option to purchase the parcels from the 
Commission, and for other purposes; to the Committee on Energy and 
Natural Resources.


    THE BLUNT RESERVOIR AND PIERRE CANAL LAND CONVEYANCE ACT OF 1999

  Mr. DASCHLE. Mr. President, I am today introducing the Blunt 
Reservoir and Pierre Canal Land Conveyance Act of 1999. This proposal 
is the culmination of more than 2 years of discussion with local 
landowners, the South Dakota Water Congress, the U.S. Bureau of 
Reclamation, local legislators, representatives of South Dakota 
sportsmen groups and affected citizens. It lays out a plan to convey 
certain parcels of land acquired for the Blunt Reservoir and Pierre 
Canal features of the Oahe Irrigation Project in South Dakota to the 
Commission of School and Public Lands of the State of South Dakota for 
the purpose of mitigating lost wildlife habitat, and provides the 
option to preferential leaseholders to purchase their original parcels 
from the Commission.
  In order to more fully understand the issues addressed by the 
legislation, it is necessary to review some of the history related to 
the Oahe Unit of the Missouri River Basin project in South Dakota.
  The Oahe Unit was originally approved as part of the overall plan for 
water development in the Missouri River Basin that was incorporated in 
the Flood Control Act of 1944. Subsequently, Public Law 90-453 
authorized construction and operation of the initial stage. The 
purposes of the Oahe Unit as authorized were to provide for the 
irrigation of 190,000 acres of farmland, conserve and enhance fish and 
wildlife habitat, promote recreation and meet other important goals.
  The project came to be known as the Oahe Irrigation Project, and the 
principal features of the initial stage of the project contained the 
Oahe pumping plant located near Oahe Dam to pump water from the Oahe 
Reservoir, a system of main canals, including the Pierre Canal, running 
east from the Oahe Reservoir, and the establishment of regulating 
reservoirs, including the Blunt Dam and Reservoir located approximately 
35 miles east of Pierre, South Dakota.
  Under the authorizing legislation, 42,155 acres were to be acquired 
by the Federal government in order to construct and operate the Blunt 
Reservoir feature of the Oahe Irrigation Project. Land acquisition for 
the proposed Blunt Reservoir feature began in 1972 and continued 
through 1977. A total of 17,878 acres actually were acquired from 
willing sellers.
  The first land for the Pierre Canal feature was purchased in July 
1975 and included the 1.3 miles of Reach lB. An additional 21-mile 
reach was acquired from 1976 through 1977, also from willing sellers.
  Organized opposition to the Oahe Irrigation Project surfaced in 1973 
and continued to build until a series of public meetings were held in 
1977 to determine if the project should continue. In late 1977, the 
Oahe project was made a part of President Carter's Federal Water 
Project review process.
  The Oahe project construction was then halted on September 30, 1977, 
when Congress did not include funding in the FY1978 appropriations.
  Thus, all major construction contract activities ceased and land 
acquisition was halted. The Oahe Project remained an authorized water 
project with a bleak future and minimal chances of being completed as 
authorized. Consequently, the Department of Interior, through the 
Bureau of Reclamation, gave to those persons who willingly had sold 
their lands to the project the right for them and their descendants to 
lease those lands and use them as they had in the past until needed by 
the Federal government for project purposes.
  During the period from 1978 until the present, the Bureau of 
Reclamation has administered these lands on a preference lease basis 
for those original landowners or their descendants and on a non-
preferential basis for lands under lease to persons who were not 
preferential leaseholders. Currently, the Bureau of Reclamation 
administers 12,978 acres as preferential leases and 4,304 acres as non-
preferential leases in the Blunt Reservoir.
  As I noted previously, the Oahe Irrigation Project is related 
directly to the overall project purposes of the Pick-Sloan Missouri 
Basin program authorized under the Flood Control Act of 1944. Under 
this program, the U.S. Army Corps of Engineers constructed four major 
dams across the Missouri River in South Dakota. The two largest 
reservoirs formed by these dams, Oahe Reservoir and Sharpe Reservoir, 
caused the loss of approximately 221,000 acres of fertile, wooded 
bottomland which constituted some of the most productive, unique and 
irreplaceable wildlife habitat in the State of South Dakota. This 
included habitat for both game and non-game species, including several 
species which are now listed as threatened or endangered. Merriweather 
Lewis, while traveling up the Missouri River in 1804 on his famous 
expedition, wrote in his diary, ``Song birds, game species and 
furbearing animals abound here in numbers like none of the party has 
ever seen. The bottomlands and cottonwood trees provide a shelter and 
food for a great variety of species, all laying their claim to the 
river bottom.''
  Under the provisions of the Wildlife Coordination Act of 1958, the 
State of South Dakota has developed a plan to mitigate a part of this 
lost wildlife habitat as authorized by Section 602 of Title VI of 
Public Law 105-277, October 21, 1998, known as the Cheyenne River Sioux 
Tribe, Lower Brule Sioux Tribe, and State of South Dakota Terrestrial 
Wildlife Habitat Restoration Act.
  The State's habitat mitigation plan has received the necessary 
approval and interim funding authorizations under Sections 602 and 609 
of Title VI.
  The State's habitat mitigation plan requires the development of 
approximately 27,000 acres of wildlife habitat in South Dakota. 
Transferring the 4,304 acres of non-preferential lease lands in the 
Blunt Reservoir feature to the South Dakota Department of Game, Fish 
and Parks would constitute a significant step toward satisfying the 
habitat mitigation obligation owed to the state by the Federal 
government and as agreed upon by the U.S. Army Corps of Engineers, the 
U.S. Fish and Wildlife Service, and the South Dakota Department of 
Game, Fish and Parks.
  As we developed this legislation, many meetings occurred among the 
local landowners, South Dakota Department of Game, Fish and Parks, 
business owners, local legislators, the Bureau of Reclamation, as well 
as representatives of sportsmen groups. It became apparent that the 
best solution for the local economy, tax base and wildlife mitigation 
issues would be to allow the preferential leaseholders (original 
landowner or descendant or operator of the land at the time of 
purchase) to have an option to purchase the land from the Commission of 
School and Public Lands after the preferential lease parcels are 
conveyed to the Commission. This option will be available for a period 
of 10 years after the date of conveyance to the Commission. During the 
interim period, the preferential leaseholders shall be entitled to 
continue to lease from the Commissioner under the same terms and 
conditions they have enjoyed with the Bureau of Reclamation. If the 
preferential leaseholder fails to purchase a parcel within the 10-year 
period, that parcel will be conveyed to the South Dakota Department of 
Game, Fish and Parks to be used to implement the 27,000-acre habitat 
mitigation plan.
  The proceeds from these sales will be used to finance the 
administration of this bill, support public education in the state of 
South Dakota, and will be added to the South Dakota Wildlife Habitat 
Mitigation Trust Fund to assist in the payment of local property taxes 
on lands transferred from the Federal government to the state of South 
Dakota.
  In summary, Mr. President, the State of South Dakota, the Federal 
government, the original landowners, the sportsmen and wildlife will 
benefit

[[Page 11408]]

from this bill. It provides for a fair and just resolution to the 
private property and environmental problems caused by the Oahe 
Irrigation Project some 25 years ago. We have waited long enough to 
right some of the wrongs suffered by our landowners and South Dakota's 
wildlife resources.
  I am hopeful that the Senate will act quickly on this legislation. 
Our goal is to enact a bill that will allow meaningful wildlife habitat 
mitigation to begin, give certainty to local landowners who sacrificed 
their lands for a defunct federal project they once supported, ensure 
the viability of the local land base and tax base, and provide well 
maintained and managed recreation areas for sportsmen. I ask unanimous 
consent that the bill appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       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 ``Blunt Reservoir and Pierre 
     Canal Land Conveyance Act of 1999''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) under the Act of December 22, 1944 (commonly known as 
     the ``Flood Control Act of 1944'')(58 Stat. 887, chapter 665; 
     33 U.S.C. 701-1 et seq.), Congress approved the Pick-Sloan 
     Missouri River Basin program--
       (A) to promote the general economic development of the 
     United States;
       (B) to provide for irrigation above Sioux City, Iowa;
       (C) to protect urban and rural areas from devastating 
     floods of the Missouri River; and
       (D) for other purposes;
       (2) the purpose of the Oahe Irrigation Project was to meet 
     the requirements of that Act by providing irrigation above 
     Sioux City, Iowa;
       (3) the principle features of the Oahe Irrigation Project 
     included--
       (A) a system of main canals, including the Pierre Canal, 
     running east from the Oahe Reservoir; and
       (B) the establishment of regulating reservoirs, including 
     the Blunt Dam and Reservoir, located approximately 35 miles 
     east of Pierre, South Dakota;
       (4) land to establish the Pierre Canal and Blunt Reservoir 
     was purchased from willing sellers between 1972 and 1977, 
     when construction on the Oahe Irrigation Project was halted;
       (5) since 1978, the Commissioner of Reclamation has 
     administered the land--
       (A) on a preferential lease basis to original landowners or 
     their descendants; and
       (B) on a nonpreferential lease basis to other persons;
       (6) the 2 largest reservoirs created by the Pick-Sloan 
     Missouri River Basin Program, Lake Oahe and Lake Sharpe, 
     caused the loss of approximately 221,000 acres of fertile, 
     wooded bottomland in South Dakota that constituted some of 
     the most productive, unique, and irreplaceable wildlife 
     habitat in the State;
       (7) the State of South Dakota has developed a plan to meet 
     the Federal obligation under the Fish and Wildlife 
     Coordination Act (16 U.S.C. 661 et seq.) to mitigate the loss 
     of wildlife habitat, the implementation of which is 
     authorized by section 602 of title VI of Public Law 105-277 
     (112 Stat. 2681-660); and
       (8) it is in the interests of the United States and the 
     State of South Dakota to--
       (A) provide original landowners or their descendants with 
     an opportunity to purchase back their land; and
       (B) transfer the remaining land to the State of South 
     Dakota to allow implementation of its habitat mitigation 
     plan.

     SEC. 3. BLUNT RESERVOIR AND PIERRE CANAL.

       (a) Definitions.--In this section:
       (1) Blunt reservoir feature.--The term ``Blunt Reservoir 
     feature'' means the Blunt Reservoir feature of the Oahe 
     Irrigation Project authorized by section 9 of the Act of 
     December 22, 1944 (58 Stat. 891, chapter 665), as part of the 
     Pick-Sloan Missouri River Basin Program.
       (2) Commission.--The term ``Commission'' means the 
     Commission of Schools and Public Lands of the State of South 
     Dakota.
       (3) Nonpreferential lease parcel.--The term 
     ``nonpreferential lease parcel'' means a parcel of land 
     that--
       (A) was purchased by the Secretary for use in connection 
     with the Blunt Reservoir feature or the Pierre Canal feature; 
     and
       (B) is under lease to a person other than a preferential 
     leaseholder as of the date of enactment of this Act.
       (4) Pierre canal feature.--The term ``Pierre Canal 
     feature'' means the Pierre Canal feature of the Oahe 
     Irrigation Project authorized by section 9 of the Act of 
     December 22, 1944 (58 Stat. 891, chapter 665), as part of the 
     Pick-Sloan Missouri River Basin Program.
       (5) Preferential leaseholder.--The term ``preferential 
     leaseholder'' means a leaseholder of a parcel of land who 
     is--
       (A) the person from whom the Secretary purchased the parcel 
     for use in connection with the Blunt Reservoir feature or the 
     Pierre Canal feature;
       (B) the original operator of the parcel at the time of 
     acquisition; or
       (C) a descendant of a person described in subparagraph (A) 
     or (B).
       (6) Preferential lease parcel.--The term ``preferential 
     lease parcel'' means a parcel of land that--
       (A) was purchased by the Secretary for use in connection 
     with the Blunt Reservoir feature or the Pierre Canal feature; 
     and
       (B) is under lease to a preferential leaseholder as of the 
     date of enactment of this Act.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Commissioner of 
     Reclamation.
       (8) Unleased parcel.--The term ``unleased parcel'' means a 
     parcel of land that--
       (A) was purchased by the Secretary for use in connection 
     with the Blunt Reservoir feature or the Pierre Canal feature; 
     and
       (B) is not under lease as of the date of enactment of this 
     Act.
       (b) Deauthorization.--The Blunt Reservoir feature is 
     deauthorized.
       (c) Conveyance.--The Secretary shall convey all of the 
     preferential lease parcels to the Commission, without 
     consideration, on the condition that the Commission honor the 
     purchase option provided to preferential leaseholders under 
     subsection (d).
       (d) Purchase Option.--
       (1) In general.--A preferential leaseholder shall have an 
     option to purchase from the Commission the preferential lease 
     parcel that is the subject of the lease.
       (2) Terms.--
       (A) In general.--Except as provided in subparagraph (B), a 
     preferential leaseholder may elect to purchase a parcel on 1 
     of the following terms:
       (i) Cash purchase for the amount that is equal to--

       (I) the value of the parcel determined under paragraph (4); 
     minus
       (II) 10 percent of that value.

       (ii) Installment purchase, with 20 percent of the value of 
     the parcel determined under paragraph (4) to be paid on the 
     date of purchase and the remainder to be paid over not more 
     than 30 years at 3 percent annual interest.
       (B) Value under $10,000.--If the value of the parcel is 
     under $10,000, the purchase shall be made on a cash basis in 
     accordance with subparagraph (A)(i).
       (3) Option exercise period.--
       (A) In general.--A preferential leaseholder shall have 
     until the date that is 10 years after the date of the 
     conveyance under subsection (c) to exercise the option under 
     paragraph (1).
       (B) Continuation of leases.--Until the date specified in 
     subparagraph (A), a preferential leaseholder shall be 
     entitled to continue to lease from the Commission the parcel 
     leased by the preferential leaseholder under the same terms 
     and conditions as under the lease, as in effect as of the 
     date of conveyance.
       (4) Valuation.--
       (A) In general.--The value of a preferential lease parcel 
     shall be determined to be, at the election of the 
     preferential leaseholder--
       (i) the amount that is equal to--

       (I) the number of acres of the preferential lease parcel; 
     multiplied by
       (II) the amount of the per-acre assessment of adjacent 
     parcels made by the Director of Equalization of the county in 
     which the preferential lease parcel is situated; or

       (ii) the amount of a valuation of the preferential lease 
     parcel for agricultural use made by an independent appraiser.
       (B) Cost of appraisal.--If a preferential leaseholder 
     elects to use the method of valuation described in 
     subparagraph (A)(ii), the cost of the valuation shall be paid 
     by the preferential leaseholder.
       (5) Conveyance to the state of south dakota.--
       (A) In general.--If a preferential leaseholder fails to 
     purchase a parcel within the period specified in paragraph 
     (3)(A), the Commission shall convey the parcel to the State 
     of South Dakota Department of Game, Fish, and Parks.
       (B) Wildlife habitat mitigation.--Land conveyed under 
     subparagraph (A) shall be used by the South Dakota Department 
     of Game, Fish, and Parks for the purpose of mitigating the 
     wildlife habitat that was lost as a result of the development 
     of the Pick-Sloan project.
       (6) Use of proceeds.--Of the proceeds of sales of land 
     under this subsection--
       (A) not more than $500,000 shall be used to reimburse the 
     Secretary for expenses incurred in implementing this Act;
       (B) an amount not exceeding 10 percent of the cost of each 
     transaction conducted under this Act shall be used to 
     reimburse the Commission for expenses incurred implementing 
     this Act;
       (C) $3,095,000 shall be deposited in the South Dakota 
     Wildlife Habitat Mitigation Trust Fund established by section 
     603 of division C of Public Law 105-277 (112 Stat. 2681-663) 
     for the purpose of paying property taxes on land transferred 
     to the State of South Dakota;

[[Page 11409]]

       (D) $100,000 shall be provided to Hughes County, South 
     Dakota, for the purpose of supporting public education;
       (E) $100,000 shall be provided to Sully County, South 
     Dakota, for the purpose of supporting public education; and
       (F) the remainder shall be used by the Commission to 
     support public schools in the State of South Dakota.
       (e) Conveyance of Nonpreferential Lease Parcels and 
     Unleased Parcels.--
       (1) In general.--The Secretary shall convey to the South 
     Dakota Department of Game, Fish, and Parks the 
     nonpreferential lease parcels and unleased parcels of the 
     Blunt Reservoir and Pierre Canal.
       (2) Wildlife habitat mitigation.--Land conveyed under 
     paragraph (1) shall be used by the South Dakota Department of 
     Game, Fish, and Parks for the purpose of mitigating the 
     wildlife habitat that was lost as a result of the development 
     of the Pick-Sloan project.
       (f) Land Exchanges for Nonpreferential Lease Parcels and 
     Unleased Parcels.--
       (1) In general.--With the concurrence of the South Dakota 
     Department of Game, Fish, and Parks, the South Dakota 
     Commission of Schools and Public Lands may allow a person to 
     exchange land that the person owns elsewhere in the State of 
     South Dakota for a nonpreferential lease parcel or unleased 
     parcel at Blunt Reservoir or Pierre Canal, as the case may 
     be.
       (2) Priority.--The right to exchange nonpreferential lease 
     parcels or unleased parcels shall be granted in the following 
     order of priority:
       (A) Exchanges with current lessees for nonpreferential 
     lease parcels.
       (B) Exchanges with adjoining and adjacent landowners for 
     unleased parcels and nonpreferential lease parcels not 
     exchanged by current lessees.
       (g) Easement for Irrigation Pipe.--A preferential 
     leaseholder that purchases land at Pierre Canal or exchanges 
     land for land at Pierre Canal shall to allow the State of 
     South Dakota to retain an easement on the land for an 
     irrigation pipe.
       (h) Funding of the South Dakota Terrestrial Wildlife 
     Habitat Restoration Trust Fund.--Section 603(b) of title VI 
     of Public Law 105-277 (112 Stat. 2681-663) is amended by 
     striking ``$108,000,000'' and inserting ``$111,095,000''.
                                 ______
                                 
      By Mrs. BOXER.
  S. 1179. A bill to amend title 18, United States Code, to prohibit 
the sale, delivery, or other transfer of any type of firearm to a 
juvenile, with certain exceptions.


                  youth access to firearms act of 1999

 Mrs. BOXER. Mr. President, last week during consideration of 
the juvenile justice bill, the Senate passed some reasonable, common-
sense proposals to control the proliferation of guns in this country. I 
believe the Senate's action was an important first step. But there is 
more to be done. And, today, I am introducing legislation to prohibit 
the sale and transfer of any gun to a juvenile, unless it comes from a 
parent, grandparent, or legal guardian.
  Let me start, Mr. President, with a review of current law. A 
federally licensed firearms dealer--that is, someone who runs a gun 
store--cannot sell a handgun to someone under the age of 21 and cannot 
sell any other type of gun to someone under the age of 18.
  The law is different, however, for private transactions. Those are 
sales or transfers by unlicensed individuals at gun shows, at flea 
markets, or in a private home. Since 1994, it has been illegal for 
anyone under the age of 18 to buy a handgun in these cases. But it is 
not illegal for a juvenile to buy a long-gun--that is, a rifle, a 
shotgun, or a semiautomatic assault weapon--in a private transaction. 
And, it is not illegal for a long-gun to be transferred--given--to a 
juvenile.
  This is not right. An 18-year-old cannot buy a can of beer. An 19-
year-old cannot buy a bottle of liquor or a bottle of wine. Anyone 
under 18 cannot buy a pack of cigarettes. And, as I mentioned, since 
1994, if you are under 18, you cannot buy a handgun.
  There is a reason for this. There is a reason we keep certain things 
away from juveniles. And, it does not make sense to me to say that it 
is illegal to sell cigarettes, alcohol, and handguns to a kid, but it 
is okay to sell them a rifle or a shotgun or a semiautomatic assault 
weapon.
  So, my bill--the Youth Access to Firearms Act--simply says that it 
would be illegal to sell, deliver, or transfer any firearm to anyone 
under the age of 18.
  Now, in recognition of the culture and circumstances in many areas of 
this country, my bill does contain some exceptions to this prohibition.
  First, the bill would not make possession of a long-gun by a juvenile 
a crime. It would only make the sale or transfer illegal.
  Second, the bill would not apply to a rifle or shotgun given to a 
juvenile by that person's parent, grandparent, or legal guardian.
  Third, it would not apply to another family member giving a juvenile 
a rifle or shotgun with the permission of the juvenile's parent, 
grandparent, or legal guardian.
  Fourth, it would not apply to a temporary transfer--a loan--of a 
rifle or shotgun for hunting purposes.
  And, fifth, it would not apply to the temporary transfer of a gun to 
a juvenile for employment, target shooting, or a course of instruction 
in the safe and lawful use of a firearm, if the juvenile has parental 
permission.
  I have put these exceptions into the bill to make it clear what I am 
trying to do here. I am not trying to stop teenagers from having or 
responsibly using a rifle or a shotgun. I am not trying to stop 
teenagers from going hunting. I am not trying to prevent a parent or 
grandparent from giving a rifle or shotgun as a birthday present. But, 
what I am saying is that juveniles should not be able to buy a gun on 
their own--or be given one without the knowledge of their parents.
  This is precisely what happened in Littleton, Colorado. The two 
teenage boys who shot up Columbine High School used four guns. Three of 
those four guns--two shotguns and a rifle--were given to them by an 18-
year-old female friend. Under federal law, that was perfectly legal.
  I should not be. You should not be able to sell a gun to a juvenile. 
And you should not be able to give a gun to a juvenile, unless you are 
the parent or grandparent.
  As I said earlier, there are certain things that are legally off-
limits to juveniles. Selling and giving them guns, if you are not their 
parent, should be one of those things.
  I urge my colleagues to support this bill.
                                 ______
                                 
      By Mr. KENNEDY:
  S. 1180. A bill to amend the Elementary and Secondary Education Act 
of 1965, to reauthorize and make improvements to that Act, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.


          educational excellence for all children act of 1999

  Mr. KENNEDY. Mr. President, it is a privilege to introduce President 
Clinton's proposal for reauthorizing the Elementary and Secondary 
Education Act, the ``Educational Excellence for All Children Act of 
1999,'' along with Senators Dodd, Daschle, Murray, Schumer, Levin, and 
Dorgan. This is another strong step by the President to ensure that all 
children have the benefit of the best possible education.
  Since 1993, President Clinton has consistently led the way on 
improving schools and making sure that all children meet high 
standards.
  Today, as a result, almost every state has established high standards 
for its students. ``High standards'' is no longer just a term for 
academics experts and policy makers--it is becoming a reality for the 
nation's schools and students.
  The recently released National Assessment of Title I shows that 
student achievement is improving--and that the federal government is an 
effective partner in that success. This result is good news for 
schools, good news for parents, and good news for students--and it 
should be a wake up call to Congress. We need to do more to build on 
these emerging successes to ensure that every child has the opportunity 
for an excellent education.
  At dinner tables and boardrooms across America, the topic of 
discussion is education. As a result of the progress we have made the 
past few years, we can look at the education glass on the table and say 
it's ``half full''--not ``half empty'' as critics of public schools 
would have the country believe.
  Since the reauthorization of Title I in 1994, a non-partisan 
Independent Review Panel of twenty-two experts from

[[Page 11410]]

across the country has been overseeing the evaluation of the program. 
As the largest federal investment in improving elementary and secondary 
schools, Title I is improving education for 11 million children in 
45,000 schools with high concentrations of poverty. It helps schools 
provide professional development for teachers, improve curriculums, and 
extend learning time, so that students meet high state standards of 
achievement.
  Under the 1994 amendments to Title I, states were no longer allowed 
to set lower standards for children in the poorest communities than for 
students in more affluent communities. The results are clear. Students 
do well when expectations are set high and they are given the support 
they need and deserve.
  Student achievement in reading and math has increased--particularly 
the achievement of the poorest students. Since 1992, reading 
achievement for 9-year- olds in the highest poverty schools has 
increased by one whole grade level nationwide. Between 1990 and 1996, 
math scores of the poorest students also rose by a grade level.
  Students are meeting higher state standards. According to state-
reported results, students in the highest poverty elementary schools 
improved in 5 of 6 states reporting three-year data in reading and in 4 
out of 5 states in math. Students in Connecticut, Maryland, North 
Carolina, and Texas made progress in both subjects.
  Many urban school districts report that achievement also improved in 
their highest-poverty schools. In 10 of 13 large urban districts that 
report three-year trend data, more elementary students in the highest 
poverty schools are now meeting district or state standards of 
proficiency in reading or math. Six districts, including Houston, Dade 
County, New York, Philadelphia, San Antonio, and San Francisco, made 
progress in both subjects.
  Federal funds are increasingly targeted to the poorest schools. The 
1994 amendments to Title I shifted funds away from low-poverty schools 
and into high-poverty schools. Today, 95 percent of the highest-poverty 
schools receive Title I funds, up from 80 percent in 1993.
  In addition, Title I funds help improve teaching and learning in the 
classroom. 99 percent of Title I funds go to the local level. 93 
percent of those federal dollars are spent directly on instruction, 
while only 62 percent of all state and local education dollars are 
spent on instruction.
  The best illustrations of these successes are in local districts and 
schools. In Baltimore County, Maryland, all but one of the 19 Title I 
schools increased student performance between 1993 and 1998. The 
success has come from Title I support for extended year programs, 
implementation of effective programs in reading, and intensive 
professional development for teachers.
  At Roosevelt High School in Dallas, Texas, where 80 percent of the 
students are poor, Title I funds were used to increase parent 
involvement, train teachers to work more effectively with parents, and 
make other changes to bring high standards into every classroom. 
Student reading scores have nearly doubled, from the 40th percentile in 
1992 to the 77th percentile in 1996. During the same period, math 
scores soared from the 16th to the 73rd percentile, and writing scores 
rose from the 58th to the 84th percentile.
  In addition to the successes supported by Title I, other indicators 
demonstrate that student achievement is improving. U.S. students scored 
near the top on the latest international assessment of reading. 
American 4th graders out-performed students from all other nations 
except Finland.
  At Baldwin Elementary School in Boston, where 80 percent of the 
students are poor, performance on the Stanford 9 test rose 
substantially from 1996 to 1998 because of increases in teacher 
professional development and implementation of a whole-school reform 
plan to raise standards and achievement for all children. In 1996, 66 
percent of the 3rd grade students scored in the lowest levels in math. 
In 1998, 100 percent scored in the highest levels. In 1997, 75 percent 
of 4th graders scored in the lowest levels in reading. In 1998, no 4th 
graders scored at the lowest level, and 56 percent scored in the 
highest levels.
  The combined verbal and math scores on the SAT increased 19 points 
from 1982 to 1997, with the largest gain of 15 points occurring between 
1992 and 1997. The average math score is at its highest level in 26 
years.
  Students are taking more rigorous subjects than ever--and doing 
better in them. The proportion of high school graduates taking the core 
courses recommended in the 1983 report, A Nation At Risk, had increased 
to 52 percent by 1994, up from 14 percent in 1982 and 40 percent in 
1990. Since 1982, the percentage of graduates taking biology, 
chemistry, and physics has doubled, rising from 10 percent in 1982 to 
21 percent in 1994. With increased participation in advanced placement 
courses, the number of students that scored at 3 or above on the AP 
exams has risen nearly five-fold since 1982, from 131,871 in that year 
to 635,922 in 1998.
  Clearly, the work is not done. These improvements are gratifying, but 
there is no cause for complacency. We must do more to ensure that all 
children have a good education. We must do more to increase support for 
programs like Title I to build on these successes and make them 
available to all children.
  President Clinton's ``Educational Excellence for All Children Act of 
1999'' builds on the success of the 1994 reauthorization of ESEA, which 
ensured that all children are held to the same high academic standards. 
This bill makes high standards the core of classroom activities in 
every school across the country--and holds schools and school districts 
responsible for making sure all children meet those standards. The bill 
focuses on three fundamental ways to accomplish this goal: improving 
teacher quality, increasing accountability for results, and creating 
safe, healthy, and disciplined learning environments for children.
  This year, the nation set a new record for elementary and secondary 
student enrollment. The figure will reach an all-time high of 53 
million students--500,000 more students than last year. Communities, 
the states, and Congress must work together to see that these students 
receive a good education.
  Serious teacher shortages are being caused by the rising student 
enrollments, and also by the growing number of teacher retirements. The 
nation's schools need to hire 2.2 million public school teachers over 
the next ten years, just to hold their own. If we don't act now, the 
need for more teachers will put even greater pressure in the future on 
school districts to lower their standards and hire more unqualified 
teachers. Too many teachers leave within the first three years of 
teaching--including 30-50% of teachers in urban areas--because they 
don't get the support and mentoring they need. Veteran teachers need 
on-going professional development opportunities to enhance their 
knowledge and skills, to integrate technology into the curriculum, and 
to help children meet high state standards.
  Many communities are working hard to attract, keep, and support good 
teachers--and often they're succeeding. The North Carolina Teaching 
Fellows Program has recruited 3,600 high-ability high school graduates 
to go into teaching. The students agree to teach for four years in the 
state's public schools, in exchange for a four-year college 
scholarship. School principals in the state report that the performance 
of the fellows far exceeds that of other new teachers.
  In Chicago, a program called the ``Golden Apple Scholars of 
Illinois'' recruits promising young men and women into teaching by 
selecting them during their junior year of high school, then mentoring 
them through the rest of high school, college, and five years of actual 
teaching. 60 Golden Apple scholars enter the teaching field each year, 
and 90 percent of them stay in the classroom.
  Colorado State University's ``Project Promise'' recruits prospective 
teachers

[[Page 11411]]

from fields such as law, geology, chemistry, stock trading and 
medicine. Current teachers mentor graduates in their first two years of 
teaching. More than 90 percent of the recruits go into teaching, and 80 
percent stay for at least five years.
  New York City's Mentor Teacher Internship Program has increased the 
retention of new teachers. In Montana, only 4 percent of new teachers 
in mentoring programs left after their first year of teaching, compared 
with 28 percent of teachers without the benefit of mentoring.
  New York City's District 2 has made professional development the 
central component for improving schools. The idea is that student 
learning will increase as the knowledge of educators grows--and it's 
working. In 1996, student math scores were second in the city.
  Massachusetts has invested $60 million in the Teacher Quality 
Endowment Fund to launch the 12-to-62 Plan for Strengthening 
Massachusetts Future Teaching Force. The program is a comprehensive 
effort to improve recruitment, retention, and professional development 
of teachers throughout their careers.
  Congress should build on and support these successful efforts across 
the country to ensure that the nation's teaching force is strong and 
successful in the years ahead.
  The Administration's proposal makes a major investment in ensuring 
quality teachers in every classroom, especially in areas where the 
needs are greatest. It authorizes funds to help states and communities 
improve the recruitment, retention, and on-going professional 
development of teachers. It will provide states and local school 
districts with the support they need to recruit excellent teacher 
candidates, to retain and support promising beginning teachers through 
mentoring programs, and to provide veteran teachers with the on-going 
professional development they need to help all children meet high 
standards of achievement. It will also support a national effort to 
recruit and train school principals.
  In recognition of the national need to recruit 2.2 million teachers 
over the next decade, the Administration's proposal will fund projects 
to recruit and retain high-quality teachers and school principals in 
high-need areas. The Transition to Teaching proposal will continue and 
expand the successful ``Troops to Teachers'' initiative by recruiting 
and supporting mid-career professionals in the armed forces as 
teachers, particularly in high-poverty school districts and high-need 
subjects.
  The proposal holds states accountable for having qualified teachers 
in the classroom. It requires that within four years, 95 percent of all 
teachers must be certified, working toward full certification through 
an alternative route that will lead to full certification within three 
years, or are fully certified in another state and working toward 
meeting state-specific requirements. It also requires states to ensure 
that at least 95 percent of secondary school teachers have academic 
training or demonstrated competence in the subject area in which they 
teach.
  Parents and educators across the country also say that reducing class 
size is at the top of their priorities for education reform. It is 
obvious that smaller class sizes, particularly in the early grades, 
improve student achievement. We must help states and communities reduce 
class sizes in the early grades, when individual attention is needed 
most. Congress made a down-payment last year on helping communities 
reduce class size, and we can't walk away from that commitment now.
  The Educational Excellence for All Children Act authorizes the full 7 
years of this program, so that communities will be able to hire 100,000 
teachers across the country.
  We know qualified teachers in small classes make a difference for 
students. There is also mounting evidence that the President and 
Congress took the right step in 1994 by making standards-based reform 
the centerpiece of the 1994 reauthorization. In schools and school 
districts across the country that have set high standards and required 
accountability for results, student performance has risen, and the 
numbers of failing schools has fallen.
  Nevertheless, 10 to 15 percent of high school graduates today--up to 
340,000 graduates each year--do not continue their education. Often, 
they cannot balance a checkbook or write a letter to a credit card 
company to explain an error on a bill. Even worse, 11 percent of high 
school students never make it to graduation.
  We are not meeting our responsibility to these students--and it is 
unconscionable to continue to abdicate our responsibility. Every day, 
children--poor children, minority children, English language learners, 
children with disabilities--face barriers to a good education, and also 
face the high-stakes consequences of failing in the future because the 
system is failing them now.
  Schools and communities must do more to see that students obtain the 
skills and knowledge they need in order to move on to the next grade 
and to graduate. If students are socially promoted or forced to repeat 
the same grade without changing the instruction that failed the first 
time, they are more likely to drop out. Clearly, these practices must 
end.
  The Administration's proposal makes public schools the centers of 
opportunity for all children--and holds schools accountability for 
providing this opportunity.
  It requires schools, school districts, and states to provide parents 
with report cards that include information about student performance, 
the condition of school buildings, class sizes, quality of teachers, 
and safety and discipline in their schools. These report cards give 
parents the information they need to see that their schools are 
improving and their children are getting the education they deserve.
  The proposal also holds schools and districts accountable for 
children meeting the standards. The bill requires schools and districts 
to end the unsound educational practices of socially promoting children 
or making them repeat a grade. States must collect data on social 
promotion and retention rates as an indicator of whether children are 
meeting high standards, and schools must implement responsible 
promotion policies. The proposal is designed to eliminate the dismal 
choice between social promotion and repeating a grade. It does so in 
several ways--by increasing support for early education programs, by 
improving early reading skills, by improving the quality of the 
teaching force, by providing extended learning time through after-
school and summer-school programs, and by creating safe, disciplined 
learning environments for children.
  Last year in Boston, School Superintendent Tom Payzant ended social 
promotion and traditional grade retention. With extensive community 
involvement, Mayor Menino, Superintendent Payzant, and the School 
Committee implemented a policy to clarify for everyone--schools, 
teachers, parents, and students--the requirements needed to advance 
from one grade to the next, and to graduate from a Boston public 
school.
  The call for a new promotion and retention policy came primarily from 
middle and high schools, where teachers were facing students who had 
not mastered the skills they needed in order to go on to a higher 
grade. Now, all students will have to demonstrate that they have 
mastered the content and skills in every grade. If they fail to do so, 
schools and teachers must intervene with proven effective practices to 
help the students, such as attending summer-school and after-school 
programs, providing extra help during the regular school day, and 
working more closely with parents to ensure better results. In ways 
like these, schools and teachers are held accountable for results.
  The Administration's proposal gives children who have fallen behind 
in their school work the opportunities they need to catch up, to meet 
legitimate requirements for graduation, to master basic skills, and 
meet high standards of achievement. A high school diploma should be 
more than a certificate of attendance. It should be a certificate of 
achievement.

[[Page 11412]]

  Finally, the President's proposal helps create safe, disciplined, and 
healthy environments for children. Last year, President Clinton led a 
successful effort to increase funding for after-school programs in the 
current year. But far more needs to be done.
  Effective programs are urgently needed for children of all ages 
during the many hours they are not in school each week and during the 
summer. The ``Home Alone'' problem is serious, and deserves urgent 
attention. Every day, 5 million children, many as young as 8 or 9 years 
old, are left alone after school. Juvenile crime peaks in the hours 
between 3 p.m. and 8 p.m. A recent study of gang crimes by juveniles in 
Orange County, California, shows that 60 percent of all juvenile gang 
crimes occur on schools days and peak immediately after school 
dismissal. Children left unsupervised are more likely to be involved in 
illegal activities and destructive behavior. We need constructive 
alternatives to keep children off the streets, away from drugs, and out 
of trouble.
  We need to do all we can to encourage communities to develop after-
school activities that will engage children. The proposal will triple 
our investment in after-school programs, so that one million children 
will have access to worthwhile activities.
  The Act also requires school districts and schools to have sound 
discipline policies that are consistent with the Individual with 
Disabilities Education Act, are fair, and are developed with the 
participation of the school community. In addition, the Safe and Drug-
Free Schools and Communities Act is strengthened to support research-
based prevention programs to address violence and drug-use by youth.
  In order to develop a healthy environment for children, local school 
districts will be able to use 5 percent of their funds to support 
coordinated services, so that children and their families will have 
better access to social, health, and educational services necessary for 
students to do well in school.
  In all of these ways and more ways, President Clinton's proposal will 
help schools and communities bring high standards into every classroom 
and ensure that all children meet them. Major new investments are 
needed to improve teacher quality--hold schools, school districts, and 
states accountable for results--increase parent involvement--expand 
after-school programs--reduce class size in the early grades--and 
ensure that schools meet strict discipline standards. With investments 
like these, we are doing all we can to ensure that the nation's public 
schools are the best in the world.
  Education must continue to be a top priority in this Congress. We 
must address the needs of public schools, families, and children so 
that we ensure that all children have an opportunity to attend an 
excellent public school now and throughout the 21st Century.
  President Clinton's proposal is an excellent series of needed 
initiatives, and it deserves broad bipartisan support. I look forward 
to working with my colleagues to make it the heart of this year's ESEA 
Reauthorization Bill.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  The Educational Excellence for All Children Act of 1999--Section-By-
                            Section Analysis

       Section 2. Table of Contents. Section 2 of the bill would 
     set out the table of contents for the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6301 et seq., 
     hereinafter in the section-by-section analysis referred to as 
     ``the ESEA'') as it would be amended by the bill.
       Section 3. America's Education Goals. Section 3 of the bill 
     would rename the National Education Goals (currently in Title 
     I of the Goals 2000: Educate America Act, P.L. 103-227), as 
     ``America's Education Goals'' and update the Goals to reflect 
     our Nation's continuing need for the Goals. Even though all 
     the Goals will not have been reached by the year 2000 as 
     originally hoped, nor accomplished to equal degrees, the 
     Goals were purposely designed to set high expectations for 
     educational performance at every stage of an individual's 
     life, and there is a continued need to reaffirm these Goals 
     as a benchmark to which all students can strive and attain. 
     With policymakers, educators, and the public united in an 
     effort to achieve America's Education Goals, the Nation will 
     be able to raise its overall level of educational 
     achievement.
       Section 3(a) of the bill would contain findings concerning 
     America's Education Goals, as well as descriptions of areas 
     in which the Nation as a whole, as well as individual States, 
     have been successful (or unsuccessful) at making progress 
     toward achieving the various Goals during the last decade.
       In order to reflect the overarching importance to America's 
     Education Goals, section 3(b) of the bill would amend the 
     ESEA to place the Goals in a proposed new section 3 of the 
     ESEA. Proposed new section 3(a) of the ESEA would state the 
     purpose of America's Education Goals as: setting forth a 
     common set of national goals for the education of our 
     Nation's students that the Federal Government and all States 
     and local communities will work to achieve; identifying the 
     Nation's highest education priorities related to preparing 
     students for responsible citizenship, further learning, and 
     the technological, scientific, economic, challenges of the 
     21st century; and establishing a framework for educational 
     excellence at the national, State, and local levels. Proposed 
     new section 3(b) of the ESEA would state the Goals.
       Title I of the Goals 2000: Educate America Act, the current 
     authority for the National Education Goals, would be repealed 
     by section 1211 of the bill.
       Section 4. Transition. Section 4 of the bill would specify 
     the actions that the Secretary must, and a recipient of ESEA 
     funds may, take as part of the transition between the 
     requirements of the ESEA as in effect the day before the date 
     of enactment of the Educational Excellence for All Children 
     Act of 1999, and the requirements of the ESEA as amended by 
     the bill.
       Under section 4(a) of the bill, the Secretary would be 
     required to take such steps as the Secretary determines to be 
     appropriate to provide for the orderly transition to programs 
     and activities under the ESEA, as amended by the bill, from 
     programs and activities under the ESEA, as it was in effect 
     the date before the date of enactment of the bill.
       Under section 4(b) of the bill, a recipient of funds under 
     the ESEA, as it was in effect the date before the date of 
     enactment of the bill, may use such funds to carry out 
     necessary and reasonable planning and transition activities 
     in order to ensure a smooth implementation of programs and 
     activities under the ESEA, as amended by the bill.
       Section 5. Effective Dates. Section 5 of the bill would set 
     out the effective dates for the bill. The bill would take 
     effect July 1, 2000, except for those amendments made by the 
     bill that pertain to programs administered by the Secretary 
     on a competitive basis, and the amendments made by Title VIII 
     of the bill (Impact Aid), which would take effect with 
     respect to appropriations for fiscal year 2001 and subsequent 
     fiscal years, and amendments made by section 4 of the bill 
     (transition requirements), which would take effect upon 
     enactment.


      TITLE I--HELPING DISADVANTAGED CHILDREN MEET HIGH STANDARDS

       Section 101, declaration of policy and statement of purpose 
     [ESEA, Sec. 1001]. Section 101(a) of the bill would amend the 
     statement of policy in section 1001(a) of the ESEA by 
     deleting paragraph (2), which called for an annual increase 
     in appropriations of at least $750 million from fiscal year 
     1996 through 1999.
       Section 101(b) would amend the statement of need in section 
     1001(b) of the ESEA to reflect the bill's proposal to move 
     the text of the National Education Goals from the Goals 2000: 
     Educate America Act to section 3 of the ESEA, and to add a 
     paragraph (6) noting the benefits of holding local 
     educational agencies (LEAs) and schools accountable for 
     results.
       Section 101(c) would update the statement, in section 
     1001(c), of what has been learned, to reflect experience and 
     research since that statement was enacted in 1994, including 
     the addition of six new findings.
       Section 101(d) would add, to the list of activities through 
     which Title I's purpose is to be achieved, promoting 
     comprehensive schoolwide reforms that are based on reliable 
     research and effective practices.
       Section 102, authorization of appropriations [ESEA, 
     Sec. 1002]. Section 102 of the bill would restate, in its 
     entirety, section 1002 of the ESEA, which authorizes the 
     appropriation of funds to carry out the various Title I 
     programs. As revised, section 1002 would authorize the 
     appropriations of ``such sums as may be necessary'' for 
     fiscal years 2001 through 2005 for grants to LEAs under Part 
     A, the Even Start program under Part B, the education of 
     migratory children under Part C, State agency programs for 
     neglected or delinquent children under Part D, the Reading 
     Excellence program (to be transferred to Part E from Title 
     II), and certain Federal activities under section 1502 (to be 
     redesignated as section 1602). Funds would no longer be 
     authorized for capital expenses relating to the provision of 
     Title I services to children in private schools. In addition, 
     certain school-improvement activities would be funded by 
     requiring States to dedicate a portion of their Title I 
     grants to those activities, rather than through a separate 
     authorization as in current law.

[[Page 11413]]

       Section 103, reservations for accountability and evaluation 
     [ESEA, Sec. 1003]. Section 103 of the ESEA, to require each 
     SEA to reserve 2.5 percent of its annual Basic Grant under 
     Part A of Title I to carry out the LEA and school improvement 
     activities described in sections 1116 and 1117 in fiscal 
     years 2001 and 2002, and 3.5 percent of that amount for that 
     purpose in subsequent fiscal years. This requirement, which 
     is an important component of the bill's overall emphasis on 
     accountability for results, will ensure that each 
     participating State devotes a sufficient portion of its Part 
     A funds to the critical activities described in those 
     sections. In addition, the SEA would have to allocate at 
     least 70 percent of the reserved amount directly to LEAs in 
     accordance with certain specified priorities or use at least 
     that portion of the reserved amount to carry out an 
     alternative system of school and LEA improvement and 
     corrective action described in the State plan and approved by 
     the Secretary.
       Section 1003(b) of the ESEA would permit the Secretary to 
     reserve up to 0.30 percent of each year's Title I 
     appropriation to conduct evaluations and studies, collect 
     data, and carry out other activities under section 1501.
     PART A--basic grants
       Section 111, State plans [ESEA, Sec. 1111). Section 
     111(1)(A) of the bill would amend section 1111(a)(1) of the 
     ESEA, which requires a State that wishes to receive a Basic 
     Grant under Part A of Title I to submit a State plan to the 
     Secretary of Education (the Secretary). Section 111(1)(A)(i) 
     would add language emphasizing that the purpose of a State's 
     plan is to help all children achieve to high State standards 
     and to improve teaching and learning in the State.
       Section 111(1)(A)(ii) would add, to the list of other 
     programs with which the plan must be coordinated, a specific 
     reference to the Individuals with Disabilities Education Act 
     (IDEA) and the Carl D. Perkins Vocational and Technical 
     Education Act of 1998. This section would also delete a 
     reference to the Goals 2000: Educate America Act, which 
     another provision of the bill would repeal, and delete a 
     cross-reference to a section in Title XIV that another 
     provision of the bill would repeal.
       Section 111(1)(B) would improve the readability of section 
     1111(a)(2), which permits a State to submit its Part A plan 
     as part of a consolidated plan under section 14302 (to be 
     redesignated as Sec. 11502).
       Section 111(2)(A) would add a reference to accountability 
     to the heading of section 1111(b), to reflect the proposed 
     addition of language on that topic as section 1111(b)(3).
       Section 111(2)(B)(i) would streamline section 
     1111(b)(1)(B), which requires that the challenging content 
     and student-performance standards each State must use in 
     carrying out Part A be the same standards that the State uses 
     for all schools and children in the State, to reflect the 
     progress that States are expected to have made under current 
     law by the effective date of the bill.
       Section 111(2)(B)(ii) would delete outdated language from 
     section 1111(b)(1)(C), which provides that, if a State has 
     not adopted content and student-performance standards for all 
     students, it must have those standards for children served 
     under Part A in subjects determined by the State, which must 
     include at least mathematics and reading or language arts.
       Section 111(2)(C) would delete current section 1111(b)(2), 
     which requires States to describe, in their plans, what 
     constitutes adequate yearly progress by LEAs and schools 
     participating in the Part A program. This requirement would 
     be replaced by the new provisions on accountability in 
     section 1111(b)(3), described below. Section 111(2)(C) would 
     also redesignate paragraph (3) of section 1111(b), relating 
     to assessments, as paragraph (2).
       Section 111(2)(D)(i) would clarify that States must start 
     using the yearly assessments described in current paragraph 
     (3) of section 1111(b) (which the bill would redesignate as 
     paragraph (2)) no later than the 2000-2001 school year.
       Section 111(2)(D)(ii) would amend subparagraph (F) of 
     current section 1111(b)(3), relating to the assessments of 
     limited English proficient (LEP) children. Clauses (iv) and 
     (v) would be added to require, respectively, that: (1) LEP 
     students who speak Spanish be assessed with tests written in 
     Spanish, if Spanish-language tests are more likely than 
     English-language tests to yield accurate and reliable 
     information on what those students know and can do in content 
     areas other than English; and (2) tests written in English be 
     used to assess the reading and language arts proficiency of 
     any student who has attended school in the United States for 
     three or more consecutive years.
       Section 111(2)(E) would add a new provision on 
     accountability as section 1111(b)(3). It would replace the 
     current requirement that States establish criteria for 
     ``adequate yearly progress'' in LEAs and schools with a 
     requirement that they submit an accountability plan as part 
     of their State applications, reflecting the critical role 
     that accountability plays as a component of overall systems. 
     In particular, each State would have to have an 
     accountability system that is based on challenging standards, 
     includes all students, promotes continuous improvement, and 
     includes rigorous criteria for identifying and intervening in 
     schools and districts in need of improvement. This proposal 
     addresses concerns that many current accountability systems 
     focus only on overall school performance and divert attention 
     away from the students who need the greatest help.
       Section 111(2)(F) would make a conforming amendment to 
     section 1111(b)(4).
       Section 111(2)(G) would delete paragraphs (5), (6), and (7) 
     from section 1111(b). Paragraph (5) requires States to 
     identify languages other than English that are present in the 
     participating school population, to indicate the languages 
     for which assessments are not available, and to make every 
     effort to develop those assessments. This provision is 
     burdensome and unnecessary. Paragraph (6) describes the 
     schedule, established in 1994, for States to develop the 
     necessary standards and assessments, while paragraph (7) 
     governs the transition period during which States were not 
     required to have ``final'' standards and assessments in 
     place. These provisions would be obsolete by the time the 
     bill takes effect. Instead, section 112(2)(G) would enact a 
     new paragraph (5), providing that while a State may revise 
     its assessments at any time, it must comply with the 
     statutory timelines for identifying, assisting, and taking 
     corrective action with respect to, LEAs and schools that need 
     to improve.
       Section 111(2) (H) and (I) would redesignate paragraph (8) 
     of section 1111(b) as paragraph (6) and make conforming 
     amendments to cross-references in that paragraph.
       Section 111(3) of the bill would amend section 1111(c) of 
     the ESEA, to significantly shorten the list of assurances 
     that each State must include in its plan.
       Section 111(4)(A) would delete section 1111(d)(2), relating 
     to withholding of funds from States whose plans don't meet 
     section 1111's requirements. That provision duplicates Part D 
     of the General Education Provisions Act, which establishes 
     uniform procedures and rules for withholding and other 
     enforcement actions across a broad range of programs, 
     including the ESEA programs, administered by the Department 
     of Education.
       Section 111(4)(B) would make technical amendments to 
     section 1111(d)(1).
       Section 111(4)(C) would amend current section 1111(d)(1)(B) 
     to require the Secretary to include experts on educational 
     standards, assessments, accountability, and the diverse 
     educational needs of students in the peer-review process used 
     to review State plans.
       Section 111(5) would amend section 1111(e) to require each 
     State to submit its plan to the Secretary for the first year 
     for which Part A is in effect following the bill's enactment.
       Section 111(6) would replace subsection (g) of section 
     1111, which is obsolete by its terms, with language 
     permitting the Secretary to take any of the actions described 
     in proposed section 11209 if the Secretary determines that a 
     State is not carrying out its responsibilities under the new 
     accountability provisions in section 1111(b)(3). These 
     actions, which apply under section 11209 in the case of a 
     State that fails to carry out its responsibilities under 
     proposed Part B of Title XI (relating to teacher quality, 
     social promotion, LEA and school report cards, and school 
     discipline) would afford the Secretary a broad range of 
     actions, ranging from providing technical assistance to 
     withholding funds.
       Section 112, local educational agency plans [ESEA, 
     Sec. 1112] Section 112(1) of the bill would amend section 
     1112(a)(1) of the ESEA, which requires an LEA that wishes to 
     receive subgrants under Part A of Title I to have a plan on 
     file with, and approved by, the State educational agency. The 
     bill would add, to the list of other programs with which the 
     plan must be coordinated, a specific reference to the IDEA 
     and the Carl D. Perkins Vocational and Technical Education 
     Act of 1998. The bill would also delete a reference to the 
     Goals 2000: Educate America Act, which another provision of 
     the bill would repeal, and delete an inappropriate cross-
     reference.
       Section 112(2)(A) would add language to section 1112(b) to 
     emphasize that the purpose of an LEA's plan is to help all 
     children achieve to high standards.
       Section 112(2)(B) would amend section 1112(b)(1), relating 
     to any student assessments that the LEA uses (other than 
     those described in the State plan under section 1111), to 
     require the LEA's plan to describe any such assessments that 
     it will use to determine the literacy levels of first graders 
     and their need for interventions and how it will ensure that 
     those assessments are developmentally appropriate, use 
     multiple measures to provide information about the variety of 
     relevant skills, and are administered to students in the 
     language most likely to yield valid results.
       Section 112(2)(C) would amend section 1112(b)(3) to require 
     an LEA's professional development strategy under Part A to 
     also be a component of its professional development plan 
     under the new Title II, if it receives Title II funds.
       Section 112(2)(D) would amend section 1112(b)(4)(B) to 
     remove an obsolete reference; conform that provision to the 
     proposed repeal of Subpart 2 of Part 2 of Title I, relating 
     to local programs for neglected or delinquent children; and 
     include Indian children served under Title IX of the ESEA in 
     the categories

[[Page 11414]]

     of children for whom an LEA's plan must describe the 
     coordination of Title I services with other educational 
     services those children receive.
       Section 112(2)(F) would amend section 1112(b)(9), relating 
     to preschool programs, to replace language in that provision 
     with a cross-reference to new language that the bill would 
     add to section 1120B.
       Section 112(2)(G) would amend section 1112(b) to require 
     LEAs to include two additional items in their plans: (1) a 
     description of the actions it will take to assist its low-
     performing schools, if any, in making the changes needed to 
     educate all children to the State standards; and (2) a 
     description of how the LEA will promote the use of extended 
     learning time, such as an extended school year, before- and 
     after-school programs, and summer programs.
       Section 112(3) would amend section 112(c), which describes 
     the assurances that an LEA must include in its application, 
     to conform to other provisions in the bill and to delete 
     obsolete provisions relating to the Head Start program. 
     Instead, the new Head Start standards would be incorporated 
     into proposed section 1120B. Section 112(3) would also 
     require that an LEA include new assurances that it will: (1) 
     annually assess the English proficiency of all LEP children 
     participating in Part A programs, use the results of those 
     assessments to help guide and modify instruction in the 
     content areas, and provide those results to the parents of 
     those children; and (2) comply with the requirements of 
     section 119 regarding teacher qualifications and the use of 
     paraprofessionals.
       Section 112(4) would amend section 1112(d), relating to the 
     development and duration of an LEA's plan, to require the LEA 
     to submit the plan for the first year for which Part A, as 
     amended by the bill, is in effect, and to require an LEA to 
     submit subsequent revisions to its plan to the LEA for its 
     approval.
       Section 112(5) would amend section 1112(e), relating to 
     State review and approval of LEA plans, to require that 
     States use a peer-review process in reviewing those plans, 
     and to remove some obsolete language.
       Section 113, eligible school attendance areas [ESEA, 
     Sec. 1113]. Section 113(1) of the bill would amend section 
     1113, relating to eligible school attendance areas, to 
     clarify language relating to waivers of the normal 
     requirements for school attendance areas covered by State-
     ordered or court-ordered desegregation plans approved by the 
     Secretary.
       Section 113(2)(C) would restore to section 1112 the 
     authority for an LEA to continue serving an attendance area 
     for one year after it loses its eligibility. This language, 
     which was removed from the Act in 1994, would give LEAs 
     flexibility to prevent the abrupt loss of services to 
     children who can clearly benefit from them, as individual 
     attendance areas move in and out of eligibility from year to 
     year.
       Section 113(3)(A) would add, as section 1113(c)(2)(C), 
     language to clarify that an LEA may allocate greater per-
     child amounts of Title I funds to higher-poverty areas and 
     schools than it provides to lower-poverty areas and schools.
       Section 113(3)(B) would amend section 1113(c)(3) to require 
     an LEA to reserve sufficient funds to serve homeless children 
     who do not attend participating schools, not just when the 
     LEA finds it ``appropriate''. Some LEAs have invoked the 
     current language as a justification for failing to provide 
     services that they should provide.
       Section 114, schoolwide programs [ESEA, Sec. 1114]. Section 
     114(a)(1) and (2) of the bill would amend section 1114(a) of 
     the ESEA, which describes the purposes of, and eligibility 
     for, schoolwide programs under section 1114, by revising the 
     subsection heading to more accurately reflect subsection 
     (a)'s contents, and to delete current paragraph (2), which is 
     obsolete.
       Section 114(a)(3)(A) would make a conforming amendment to 
     section 1114(a)(4)(A) to reflect the bill's redesignation of 
     section 1114(b)(2) as section 1114(c).
       Section 114(a)(3)(B) would amend the prohibition on using 
     IDEA funds to support a schoolwide program to reflect the 
     fact that section 613(a)(2)(D) of the IDEA, as enacted by the 
     IDEA Amendments of 1997, now permits funds received under 
     Part B of that Act to be used to support schoolwide programs, 
     subject to certain conditions.
       Section 114(a)(4) would delete paragraph (5) of section 
     1114(a), relating to professional development in schoolwide 
     programs. That topic is addressed by other applicable 
     provisions, including the revised statement of the required 
     elements of schoolwide programs. See, especially, proposed 
     sections 1114(b)(2)(C) and 1119.
       Section 114(b)(1) would delete section 1114(c), which 
     duplicates other provisions relating to school improvement, 
     and section 114(b)(2) would redesignate current subsection 
     (b)(2) as subsection (c). Under this revised structure, 
     subsection (b) would list the required components of a 
     schoolwide program, and subsection (c) would describe the 
     contents of a plan for a schoolwide program.
       Section 114(c) would revise the statement of the elements 
     of a schoolwide program in section 1114(b) in its entirety. 
     The revised statement would strengthen current law, to 
     reflect experience and research over the past several years, 
     including significant aspects of the Comprehensive School 
     Reform Demonstration program.
       Section 114(d)(1)-(4) would amend the requirements of 
     section 1114 relating to plans for schoolwide programs 
     (current subsection (b)(2), which the bill would redesignate 
     as subsection (c)), to delete an obsolete reference and make 
     technical and conforming amendments.
       Section 114(d)(5) would add, as section 1114(c)(3), 
     language requiring peer review and LEA approval of a 
     schoolwide plan before the school implements it.
       Section 115, targeted assistance schools [ESEA, Sec. 1115]. 
     Section 115(1)(A)(i)(I) would make a technical amendment to 
     section 1115(b)(1)(A) of the ESEA.
       Section 115(1)(A)(ii) would delete the requirement that 
     children be at an age at which they can benefit from an 
     organized instructional program provided at a school or other 
     educational setting in order to be eligible for services 
     under section 1115. This change would make clear that 
     preschool children of any age may be served under Part A as 
     long as they can benefit from an organized instructional 
     program.
       Section 115(1)(B)(i) would amend section 1115(b)(2), which 
     addresses the eligibility of certain groups of children, by 
     deleting references to children who are economically 
     disadvantaged. The current reference to that category of 
     children is confusing, because it erroneously assumes that 
     there are specific eligibility requirements for them.
       Section 115(1)(B)(ii) would clarify that children who, 
     within the prior two years, had received Title I preschool 
     services are eligible for services under Part A, as are 
     children who participated in a Head Start or Even Start 
     program in that period.
       Section 115(1)(B)(iii) and (iv) would amend section 
     1115(b)(2)(C) and (D) to clarify that certain other groups of 
     children are eligible for services under section 1115.
       Section 115(2)(C) would streamline section 1115(c)(1)(E), 
     relating to coordination with, and support of, the regular 
     education program.
       Section 115(2)(D) would amend section 1115(c)(1)(F) to 
     emphasize that instructional staff must meet the standards 
     set out in revised section 1119.
       Section 115(2)(E) would make a technical amendment to 
     section 1115(c)(1)(G).
       Section 115(2)(F) would correct an error in section 
     1115(c)(1)(H).
       Section 115(3) would delete section 1115(e)(3), relating to 
     professional development, because other provisions of Part A 
     would address that topic.
       Section 115A, school choice (ESEA, Sec. 1115A]. Section 
     115A of the bill would make a conforming change to section 
     1115A(b)(4) of the ESEA.
       Section 116, assessment and local educational agency and 
     school improvement [ESEA, Sec. 1116]. Section 116(a) of the 
     bill would revise subsections (a) through (d) of section 1116 
     of the HSEA, in their entirety, as follows:
       Section 1116(a), relating to LEA reviews of schools served 
     under Part A. would be revised to conform to amendments that 
     the bill would make section 1111 (State plans).
       Section 1116(b) would provide examples of the criteria a 
     State could use in designating Distinguished Schools, and 
     would delete the cross-reference to section 1117, to reflect 
     the bill's streamlining of that section.
       Section 1116(c)(1)-(3), relating to an LEA's obligation to 
     identify participating schools that need improvement, and to 
     take various actions to bring abut that improvement, would be 
     strengthened, consistent with the bill's overall emphasis on 
     greater accountability. In particular, section 1116(c)(3)(A) 
     would require each school so identified by an LEA, within 
     three months of being identified, to develop or revise a 
     school plan, in consultation with parents, school staff, the 
     LEA, and a State school support team or other outside 
     experts. The plan would have to have the greatest likelihood 
     of improving the performance of participating children in 
     meeting the State student performance standards, address the 
     fundamental teaching and learning needs in the school, 
     identify and address the need to improve the skills of the 
     school's staff through effective professional development, 
     identify student performance targets and goals for the next 
     three years, and specify the responsibilities of the LEA and 
     the school under the plan. The LEA would have to submit the 
     plan to a peer-review process, work with the school to revise 
     the plan as necessary, and approve it before it is 
     implemented.
       Section 1116(c)(5)(C) would be revised to make clear that, 
     with limited exceptions, an LEA would have to take at least 
     one of a list of specified corrective actions in the case of 
     a school that fails to make progress within three years of 
     its identification as being in need of improvement. The list 
     would be limited to four possible actions, each of which is 
     intended to have serious consequences for the school, to 
     ensure that the LEA takes action that is likely to have a 
     positive effect.
       Section 116(d), relating to SEA review of LEA programs, 
     would similarly be revised to conform to other provisions of 
     the bill relating to accountability for achievement; to 
     remove obsolete provisions; and to require an LEA that has 
     been identified by the SEA as needing improvement to submit a 
     revised Part A plan to the SEA for peer review and approval. 
     In addition, the bill would

[[Page 11415]]

     strengthen and clarify language relating to the corrective 
     actions that SEAs must take in the case of an LEA that fails 
     to make sufficient progress within three years of being 
     identified by the SEA as in need of improvement.
       Section 117, State assistance for school support and 
     improvement [ESEA, Sec. 1117]. Section 117 of the bill would 
     substantially streamline section 1117 of the ESEA, relating 
     to State support for LEA and school support and improvement. 
     Much of current section 1117 is needlessly prescriptive and 
     otherwise unnecessary, particularly in light of the 
     strengthened provisions on LEA and school improvement and 
     corrective actions in revised sections 1003(a)(2) and 1116.
       Section 1117(a) would retain the requirement of current law 
     that each SEA establish a statewide system of intensive and 
     sustained support and improvement for LEAs and schools, in 
     order to increase the opportunity for all students in those 
     LEAs and schools to meet State standards.
       Section 1117(b) would replace the statement of priorities 
     in current section 1117(1) with a 3-step statement of 
     priorities. The SEA would first provide support and 
     assistance to LEAs that it has identified for corrective 
     action under section 1116 and to individual schools for which 
     an LEA has failed to carry out its responsibilities under 
     that section. The SEA would then support and assist other 
     LEAs that it has identified as in need of improvement under 
     section 1116, but that it has not identified as in need of 
     corrective action. Finally, the SEA would support and assist 
     other LEAs and schools that need those services in order to 
     achieve Title I's purpose.
       Section 1117(c) would provide examples of approaches the 
     SEA could use in providing support and assistance to LEAs and 
     schools.
       Section 1117(d) would direct each SEA to use the funds 
     available to it for technical assistance and support under 
     section 1003(a)(1) (other than the 70 percent or more that it 
     reserves under section 1003(a)(2)) to carry out section 1117, 
     and would permit the SEA to also use the funds it reserves 
     for State administration under redesignated section 1701(c) 
     (current section 1603(c)) for that purpose.
       Section 118, parental involvement [ESEA, Sec. 1118]. 
     Section 118 (1), (2), and (3) would make conforming 
     amendments to section 1118, relating to parental involvement 
     in Part A programs.
       Section 118(4) would amend section 1118(f) so that the 
     requirement to provide full opportunities for participation 
     by parents with limited English proficiency and parents with 
     disabilities, to the extent practicable, applies to all Part 
     A activities, not just to the specific provisions relating to 
     parental involvement.
       Section 118(5) would repeal subsection (g) of section 1118, 
     to reflect the bill's proposed repeal of the Goals 2000: 
     Educate America Act.
       Section 119, teacher qualification and professional 
     development [ESEA, Sec. 1119]. Section 119(1) would change 
     the heading of section 1119 to ``High-Quality Instruction'' 
     to reflect amendments made to this section that are designed 
     to ensure that participating children receive high-quality 
     instruction.
       Section 119(2) of the bill would delete subsection (f) of 
     section 1119, which is not needed, and redesignate 
     subsections (b) through (e) and (g) of that section as 
     subsections (d) through (h).
       Section 119(3) would insert a new subsection (a) in section 
     1119 to require that each participating LEA hire qualified 
     instructional staff, provide high-quality professional 
     development to staff members, and use at least five percent 
     of its Part A grant for fiscal years 2001 and 2002, and 10 
     percent of its grant for each year thereafter, for that 
     professional development.
       Section 119(4) would insert new subsections (b) and (c) in 
     section 1119 to specify the minimum qualifications for 
     teachers and for paraprofessionals in programs supported with 
     Part A funds. These requirements are designed to ensure that 
     participating children receive high-quality instruction and 
     assistance, so that they can meet challenging State 
     standards.
       Section 119(5)(A) would revise the list of required 
     professional development activities in current section 
     1119(b), which would be redesignated as section 1119(c), to 
     reflect experience and research on the most effective 
     approaches to professional development.
       Section 119(5)(B)(iii) would add child-care providers to 
     those with whom an LEA could choose to conduct joint 
     professional development activities under redesignated 
     section 1119(d)(2)(H) (current section 1119(b)(2)(H)).
       Section 119(6) would make a conforming amendment to section 
     1119(g), which would be redesignated as section 1119(h), 
     relating to the combined use of funds from multiple sources 
     to provide professional development.
       Section 120, participation of children enrolled in private 
     schools [ESEA, Sec. 1120]. Section 120(1)(A) of the bill 
     would add, to section 1120(a)'s statement of an LEA's 
     responsibility to provide for the equitable participation of 
     students from private schools, language to make clear that 
     the services provided those children are to address their 
     needs, and that the teachers and parents of these students 
     participate on an equitable basis in services and activities 
     under sections 1118 and 1119 (parental involvement and 
     professional development).
       Section 120(1)(B) would amend section 1120(a)(4) to give 
     each LEA the option of determining the number of poor 
     children in private schools every year, as under current law, 
     or every two years.
       Section 120(2)(A) (ii) and (iii) would amend section 
     1120(b)(1), relating to the topics on which an LEA consults 
     with private school officials about services to children in 
     those schools, to include: (1) how the results of the 
     assessments of the services the LEA provides will be used to 
     improve those services; (2) the amounts of funds generated by 
     poor children in each participating attendance area; (3) the 
     method or sources of data that the LEA uses to determine the 
     number of those children; and (4) how and when the LEA will 
     make decisions about the delivery of services to those 
     children.
       Section 120(2)(B)(i) would amend section 1120(b)(2) to 
     require that an LEA's consultation with private school 
     officials include meetings. Consultations through telephone 
     conversations and similar methods, while still permissible, 
     would not, by themselves, be sufficient.
       Section 120(2)(B)(ii) would amend section 1120(b)(2) to 
     clarify that LEA-private school consultations are to continue 
     throughout the implementation and assessment of the LEA's 
     Part A program.
       Section 120(3) would revise cross-references in section 
     1120(d)(2) to reflect the redesignation of sections by other 
     provisions of the bill.
       Section 120(4) would delete subsection (e) of section 
     1120(b), which authorizes the award of separate grants to 
     States to help them pay for capital expenses that States and 
     LEAs incur in providing services to children who attend 
     private schools. In light of the Supreme Court's 1997 
     decision in Agostini v. Felton, which allows LEAs to provide 
     Title I services on the premises of parochial schools, this 
     authority is no longer needed.
       Section 120A, fiscal requirements [ESEA, Sec. 1120A]. 
     Section 120A(1) of the bill would make a conforming amendment 
     to a cross-reference in section 1120A(a) of the ESEA, which 
     requires an LEA to maintain fiscal effort as a condition of 
     receiving Part A funds.
       Section 120a(2) would amend section 1120A(c) of the ESEA, 
     which requires a participating LEA to ensure that it provides 
     services in Title I schools, from State and local sources, 
     that are at least comparable to the services it provides in 
     its other schools.
       Section 120a(2)(A) would amend section 1120A(c)(2) to 
     replace the current criteria for determining comparability 
     with three criteria that would capture the concept of 
     comparability more fairly and thoroughly. LEAs would be given 
     until July 1, 2002, to comply with these new criteria.
       Section 120A(2)(B) would amend section 1120A(c)(3)(B) to 
     require LEAs to update their records documenting compliance 
     with the comparability requirement annually, rather than 
     every two years.
       Section 120B, preschool services and coordination 
     requirements [ESEA, Sec. 1120B]. Section 120B(1) of the bill 
     would amend the heading of section 1120B of the ESEA to read 
     ``Preschool Services; Coordination Requirements'' to more 
     accurately reflect its content.
       Section 120B(2) would make a technical amendment to section 
     1120B(c), relating to coordination of Title I regulations 
     with Head Start regulations issued by the Department of 
     Health and Human Services, to reflect enactment of the Head 
     Start Amendments of 1998.
       Section 120B(3) would add a subsection (d) to section 1120B 
     to provide additional direction to preschool programs carried 
     out with Part A funds, and to ensure that those programs are 
     of high quality. This language replaces, and builds on, 
     current section 1112(c)(1)(H).
       Section 120C, allocations [ESEA, Sec. Sec. 1121-1127]. 
     Section 120C(a) of the bill would amend section 1121(b) of 
     the ESEA, which authorizes assistance to the outlying areas, 
     to correct an internal cross-reference in paragraph (1) and 
     to make the $5 million total for assistance to the Freely 
     Associated States (FAS) a maximum rather than a fixed annual 
     amount. The Secretary should have the flexibility to 
     determine that an amount less than the full $5 million may be 
     warranted for the FAS in any given year, particularly in 
     light of possible revisions to their respective compacts of 
     free association.
       Section 120C(b) would amend section 1122 of the ESEA, which 
     governs the allocation of Part A funds to the States, by: (1) 
     removing provisions that have expired; (2) describing the 
     amount to be available for targeted assistance grants under 
     section 1125; (3) providing for proportionate reductions in 
     State allocations in case of insufficient appropriations; and 
     (4) retaining the provisions on ``hold-harmless'' amounts 
     that apply to fiscal year 1999. Most of the substance of law 
     that is currently applicable would be retained, but the 
     section as a whole would be significantly shortened.
       Section 120C(c)(1)(A) would clarify (without substantive 
     change) section 1124(a)(1), relating to the allocation of 
     basic grants to LEAs.
       Section 120C(c)(1)(B) would redesignate paragraphs (3) and 
     (4) of section 1124(a) as paragraphs (4) and (5).

[[Page 11416]]

       Section 120C(c)(1)(C) would revise, in their entirety, the 
     statutory provisions governing the calculation of LEA basic 
     grants in section 1124(a)(2) and move some of those 
     provisions to section 1124(a)(3) to improve the section's 
     structure and readability. As amended, section 1124(a)(2)(A) 
     would direct the Secretary to make allocations on an LEA-by-
     LEA basis, unless the Secretary and the Secretary of Commerce 
     (who is responsible for the decennial census and other 
     activities of the Bureau of the Census) determine the LEA-
     level data on poor children is unreliable or that its use 
     would otherwise be inappropriate. In that case, the two 
     Secretaries would announce the reasons for their 
     determination, and the Secretary would make allocations on 
     the basis of county data, rather than LEA data, in accordance 
     with new paragraph (3).
       For any fiscal year for which the Secretary allocates funds 
     to LEAs, rather than to counties, section 1124(a)(2)(B) would 
     clarify that the amount of a grant to any LEA with a 
     population of 20,000 or more is the amount determined by the 
     Secretary. For LEAs with fewer people, the SEA could either 
     allocate the amount determined by the Secretary or use an 
     alternative method, approved by the Secretary, that best 
     reflects the distribution of poor families among the State's 
     small LEAs.
       For any fiscal year for which the Secretary allocates funds 
     to counties, rather than to LEAs, section 1124(a)(3) would 
     direct the States to suballocate those funds to LEAs, in 
     accordance with the Secretary's regulations. A State could 
     propose to allocate funds directly to LEAs without regard to 
     the county allocations calculated by the Secretary if a large 
     number of its LEAs overlap county boundaries, or if it 
     believes it has data that would better target funds than 
     allocating them initially by counties.
       In general, paragraphs (2) and (3) of section 1124(a) would 
     retain current law, while eliminating extraneous or obsolete 
     provisions, and making this portion of the statute much 
     easier to read and understand than current law.
       Section 120C(c)(1)(D) would revise language relating to 
     Puerto Rico's Part A allocation (current section 1124(a)(3), 
     which the bill would redesignate as section 1124(a)(4)) so 
     that, over a 5-year phase-in period, its allocation would be 
     determined on the same basis as are the allocations to the 50 
     States and the District of Columbia.
       Section 120C(c)(2) would amend section 1124(b), relating to 
     the minimum number of poor children needed to qualify for a 
     basic grant, to improve its readability and to delete 
     obsolete language.
       Section 120C(c)(3)(A)(ii) would amend section 1124(c)(1), 
     which describes the children to be counted in determining an 
     LEA's eligibility for, and the amount of, a basic grant, to 
     delete subparagraph (B), which permits the inclusion of 
     certain children whose families have income above the poverty 
     level. The number of these children is now quite small, and 
     collection of reliable data on them is burdensome.
       Section 120C(c)(3)(A)(iii) would amend section 
     1124(c)(1)(C), relating to counts of certain children who are 
     neglected or delinquent, to give the Secretary the 
     flexibility to use the number of those children for either 
     the preceding year (required by current law) or for the 
     second preceding year.
       Section 120C(c)(3)(B)(ii) would delete the 3rd and 4th 
     sentences of section 1124(c)(2), which provide a special, and 
     unwarranted, benefit to a single LEA.
       Section 120C(c)(3)(C) would update section 1124(c)(3), 
     relating to census updates.
       Section 120C(c)(3)(D) would repeal section 1124(c)(4), 
     relating to a study by the National Academy of Sciences, 
     which has been completed, and redesignate paragraphs (5) and 
     (6) of section 1124(c) as paragraphs (4) and (5).
       Section 120C(c)(3)(E)(i) would delete the first sentence of 
     current section 1124(c)(5), which the bill would redesignate 
     as section 1124(c)(4). This language, relating to counts of 
     certain children from families with incomes above the poverty 
     level, would no longer be needed in light of the deletion of 
     these children from the count of children under section 
     1124(c)(1), described above.
       Section 120C(c)(3)(E)(iii) and (F) would move, from current 
     section 1124(c)(6) to current section 1124(c)(5) (to be 
     redesignated as section 1124(c)(4)) a sentence about the 
     counting of children in correctional institutions. This 
     provides a more logical location for this provision.
       Section 120C(c)(4)(B) would make a conforming amendment to 
     section 1124(d).
       Section 120C(d)(1)(A)(i) would remove obsolete language 
     from section 1124A(a)(1)(A) of the ESEA, which sets 
     eligibility criteria for LEAs to receive concentration grants 
     under section 1124A. The current eligibility criteria would 
     be retained.
       Section 120C(d)(1)(A)(ii) would make conforming amendments 
     to section 1124A(a)(1)(B), relating to minimum allocations to 
     States.
       Section 120C(d)(1)(B) would replace the lengthy and 
     complicated language in section 1124A(a)(4), relating to 
     calculation of LEA concentration grant amounts, with a simple 
     cross-reference to the streamlined allocation provisions in 
     section 1124(a)(3) and (4). Since the applicable rules are 
     the same, there is no need to repeat them. In addition, the 
     revised section 1124A(a)(4)(B) would retain the authority, 
     unique to the allocation of concentration grants, under which 
     a State may use up to two percent of its allocation for 
     subgrants to LEAs that meet the numerical eligibility 
     thresholds but are located in ineligible counties.
       Section 120C(d)(2) would delete subsections (b) and (c) 
     from section 1124A and redesignate subsection (d) as 
     subsection (b). Subsection (b), relating to the total amount 
     available for concentration grants, would be replaced by 
     section 1122(a)(2). Subsection (c), providing for ratably 
     reduced allocations in the case of insufficient funds, 
     duplicates proposed section 1122(c).
       Section 120C(e)(1) would make conforming amendments to 
     section 1125(b) of the ESEA, relating to the calculation of 
     targeted assistance grants under section 1125.
       Section 120C(e)(2) would amend section 1125(c), which 
     establishes weighted child counts used to calculate targeted 
     assistance grants for both counties and LEAs, by deleting 
     obsolete provisions and making technical and conforming 
     amendments.
       Section 120C(e)(3) would replace the lengthy and 
     complicated language in section 1125(d), relating to 
     calculation of targeted assistance grant amounts, with a 
     simple cross-reference to the streamlined allocation 
     provisions in section 1124(a)(3) and (4). Since the 
     applicable rules are the same, there is no need to repeat 
     them.
       Section 120C(e)(4) would make a conforming amendment to 
     section 1125(e).
       Section 120C(f) would repeal section 1125A(e) of the ESEA, 
     which authorizes appropriations for education finance 
     incentive programs under section 1125A, and make conforming 
     amendments to that section. Appropriations for this provision 
     would be covered by the general authorization of 
     appropriations for Part A of Title I in section 1002(a).
       Section 120C(g) would make a conforming amendment to 
     section 1126(a)(1), relating to allocations for neglected 
     children.
       Section 120D, program indicators [ESEA, Sec. 1131]. Section 
     120D of the bill would add a new Subpart 3, Program 
     Indicators, to Part A of Title I of the ESEA. Subpart 3 would 
     contain only one section, Sec. 1131, which would identify 7 
     program indicators relating to schools participating in the 
     Part A program, on which States would report annually to the 
     Secretary.
     Part B--Even Start
       Part B of Title I of the bill would amend Part B of Title I 
     of the ESEA, which authorizes the Even Start program.
       Section 121, statement of purpose [ESEA, Sec. 1201]. 
     Section 121 of the bill would amend the Even Start statement 
     of purposes in section 1201 of the ESEA by requiring that the 
     existing community resources on which Even Start programs are 
     built be of high quality, and by adding a requirement that 
     Even Start programs be based on the best available research 
     on language development, reading instruction, and prevention 
     of reading difficulties. These amendments would reflect 
     amendments made to other provisions of the Even Start statute 
     in 1998 and enactment of the Reading Excellence Act (Title 
     II, Part C of the ESEA) in that same year.
       Section 122, program authorized [ESEA, Sec. 1201]. Section 
     122(1) of the bill would amend section 1202(a) of the ESEA, 
     which directs the Secretary to reserve 5 percent of each 
     year's Even Start appropriation for certain populations and 
     areas. As revised, section 1202(a) would emphasize that 
     programs funded under the 5-percent reservation are meant to 
     serve as national models; retain the current requirement to 
     support projects for the children of migratory workers, 
     Indian tribes and tribal organizations, and the outlying 
     areas; specify that the amount reserved each year for the 
     outlying areas is one-half of one percent of the available 
     funds; and permit the Secretary to fund projects that serve 
     additional populations (such as homeless families, families 
     that include children with severe disabilities, and families 
     that include incarcerated mothers of young children). The 
     latter provision would replace the current requirement to 
     award a grant for a program in a woman's prison when 
     appropriations reach a certain level.
       Section 122(2) of the bill would amend section 1202(b) of 
     the ESEA, which authorizes the Secretary to reserve up to 3 
     percent of each year's appropriation for evaluation and 
     technical assistance. Because other provisions of the bill 
     would provide a new authority to fund evaluations across the 
     entire range of ESEA programs, the specific reference to 
     evaluations would be deleted here, and the maximum set-aside 
     for technical assistance (the remaining activity under this 
     provision) would be one percent. In addition, section 1202(b) 
     would permit the Secretary to provide technical assistance 
     directly, as well as through grants and contracts.
       Section 122(3) of the bill would amend section 1202(c) of 
     the ESEA, which directs the Secretary to spend $10 million 
     each year on competitive grants for interagency coordination 
     of statewide family literacy initiatives, to make these 
     awards permissive rather than mandatory, and to remove the 
     specific dollar amount that must be devoted to these awards 
     each year. The Secretary should have the flexibility to 
     determine the ongoing need for these awards, as well as the 
     amount devoted to them, and whether program funds

[[Page 11417]]

     should be devoted instead to services to children and 
     families.
       Section 122(4) and (5) would make technical and conforming 
     amendments to section 1202(d) and (e).
       Section 122(5)(A) would amend the definition of ``eligible 
     organization'' in section 1202(e)(2) to permit for-profit, as 
     well as nonprofit, organizations to qualify as providers of 
     technical assistance under section 1202(b). The current 
     limitation unnecessarily limits the pool of providers, 
     excluding some who are highly qualified.
       Section 123, State programs [ESEA, Sec. 1203]. Section 
     123(1) of the bill would redesignate subsections (a) and (b) 
     of section 1203 of the ESEA as subsections (b) and (c) and 
     insert a new subsection (a) relating to State plans. New 
     subsection (a)(1) would require a State that wants an Even 
     Start grant to submit a State plan to the Secretary, 
     including certain key information specified in the bill, 
     including the State's indicators of program quality, which 
     the 1998 amendments require each State to develop. Subsection 
     (a)(2) would parallel language relating to State plans under 
     Part A of Title I by providing that each State's plan would 
     cover the duration of its participation in the program and 
     requiring the State to periodically review it and revise it 
     as necessary.
       Section 123(3) and (4) of the bill would make technical and 
     conforming amendments to section 1203.
       Section 124, uses of funds [ESEA, Sec. 1204]. Section 
     124(1) of the bill would amend section 1204(a) of the ESEA, 
     relating to the permissible uses of Even Start funds, by 
     replacing a reference to ``family-centered education 
     programs'' with ``family literacy services''. ``Family 
     literacy services'' is the term used elsewhere in the statute 
     and defined in section 1202(e)(3).
       Section 124(2) would make a conforming amendment to section 
     1204(b)(1).
       Section 125, program elements [ESEA, Sec. 1205]. Section 
     125 of the bill would restate, in its entirety, section 1205 
     of the ESEA, which lists the required elements of each Even 
     Start program. This restatement would provide helpful 
     clarification and greater readability for some of these 
     elements; reorder the elements in a more logical sequence; 
     add some new elements; and move certain requirements that now 
     apply to local applications and State award of subgrants 
     (under sections 1207(c)(1) and 1208(a)(1)) to the list of 
     program elements, where they more logically belong.
       In particular, career counseling and job-placement services 
     would be added to the examples of services that can be 
     offered as a way to accommodate participants' work schedules 
     and other responsibilities under paragraph (3). Paragraph (4) 
     would be revised to require that instructional programs 
     integrate all the elements of family literacy services and 
     use instructional approaches that, according to the best 
     available research, will be most effective. Paragraph (5) 
     would contain new requirements relating to the qualifications 
     of instructional staff and paraprofessionals that parallel 
     the requirements proposed, under section 1119, for Part A and 
     that are designed to ensure that Even Start participants 
     receive high-quality services. Paragraph (6) (currently (5)) 
     would add a new requirement that staff training be aimed at 
     helping staff obtain certification in relevant instructional 
     areas, as well as the necessary skills. Paragraph (8) 
     (currently (9)) would add (to language incorporated from 
     current section 1207(c)(1)(E)(ii)) a specific reference to 
     individuals with disabilities as included among those who may 
     be most in need of services. Paragraph (9) would clarify and 
     consolidate, into a single element, the various statutory 
     provisions that promote the retention of families in Even 
     Start programs, including the requirement of current 
     paragraph (7) to operate on a year-round basis, the 
     requirement of current section 1208(a)(1)(C) to provide 
     services for at least a 3-year age range, and the language in 
     current section 1207(c)(1)(E)(iii) about encouraging 
     participating families to remain in the program for a 
     sufficient period of time to meet their program goals.
       This updated statement of program elements reflects 
     experience and research over the past several years. It will 
     promote better program planning and higher quality programs, 
     with better results for participating families.
       Section 126, eligible participants [ESEA, Sec. 1206]. 
     Section 126 of the bill would amend section 1206(a)(1)(B) of 
     the ESEA to restore the eligibility of teenage parents who 
     are attending school, but who are above the State's age for 
     compulsory school attendance. As amended in 1994, the current 
     statute terminates a parent's eligibility when he or she is 
     no longer within the State's age range for compulsory school 
     attendance, excluding many teen parents and their children 
     who could benefit from Even Start services.
       Section 127, applications [ESEA, Sec. 1207]. Section 127(a) 
     of the bill would amend section 1207(c) of the ESEA, relating 
     to local Even Start plans, by emphasizing the importance of 
     continuous program improvement; requiring a local program's 
     goals to include outcome goals for participating children and 
     families that are consistent with the State's program 
     indicators; emphasize that the program must address each of 
     the program elements in the revised section 1205; and require 
     each program to have a plan for rigorous and objective 
     evaluation. Current subparagraphs (E) and (F) of section 
     1207(c)(1) would be deleted because the substance of those 
     provisions would be addressed in the revised statement of 
     program elements in section 1205.
       Section 127(b) of the bill would delete subsection (d) of 
     section 1207, which purports to allow an eligible entity to 
     submit its local Even Start plan as part of an SEA's 
     consolidated application under Title XIV of the ESEA. This 
     provision has had no practical effect.
       Section 128, award of subgrants [ESEA, Sec. 1208]. Section 
     128(a)(1) of the bill would amend section 1208(a)(1) of the 
     ESEA, relating to a State's criteria for selecting local 
     programs for Even Start subgrants, by deleting subparagraph 
     (C), which refers to a three-year age range for providing 
     services, because that provision would be converted to a 
     program element under section 1205. Section 128(a)(1) would 
     also make technical and clarifying amendments to section 
     1208(a)(1).
       Section 128(a)(2) would amend section 1208(a)(3) to require 
     a State's review panel to include an individual with 
     expertise in family literacy programs, to enhance the quality 
     of the panel's review and selections. Inclusion of one or 
     more of the types of individuals described in section 
     1208(a)(3)(A)-(E) would be made optional, rather than 
     mandatory.
       Section 128(b) of the bill would add a new authority, as 
     section 1208(c), for each State to continue Even Start 
     funding, for up to two years beyond the statutory 8-year 
     limit, for not more than two projects in the State that have 
     been highly successful and that show substantial potential to 
     serve as models for other projects throughout the Nation and 
     as mentor sites for other family literacy projects in the 
     State. This would allow States and localities to learn 
     valuable lessons from well-tested, proven programs.
       Section 129, evaluation [ESEA, Sec. 1209]. Section 129 of 
     the bill would delete paragraph (3) from the national 
     evaluation provisions in section 1209 of the ESEA. That 
     paragraph describes certain technical assistance activities 
     that are more appropriately addressed under section 1202(b).
       Section 130, program indicators [ESEA, Sec. 1210]. Section 
     130 of the bill would amend section 1210 of the ESEA to set a 
     deadline of September 30, 2000 for States to develop the 
     indicators of program quality required by the 1998 
     amendments. Those amendments did not include any deadline for 
     the development of those indicators. In addition, the bill 
     would add, to the current indicators that States are to 
     develop, indicators relating to the levels of intensity of 
     services and the duration of participating children and 
     adults needed to reach the outcomes the States specifies for 
     the currently required indicators.
       Section 130A, repeal and redesignation [ESEA, 
     Sec. Sec. 1211 and 1212]. Section 131(a) of the bill would 
     repeal section 1211 of the ESEA, relating to research. The 
     essential elements of this section would be incorporated into 
     the revised section on evaluations (Sec. 1209). Section 
     131(b) of the bill would redesignate section 1212 of the ESEA 
     as section 1211.
     Part C--Education of migratory children
       Part C of Title I of the bill would amend Part C of Title I 
     of the ESEA, which authorizes grants to State educational 
     agencies to establish and improve programs of education for 
     children of migratory farmworkers and fishers, to enable them 
     to meet the same high academic standards as other children.
       Section 131, State allocations [ESEA, Sec. 1301]. Section 
     131(1) of the bill would amend section 1303(a) of the ESEA, 
     which describes how available funds are allocated to States 
     each year. The bill would replace the current provisions 
     relating to the count of migratory children, which are based 
     on estimates and full-time equivalents (FTE) of these 
     children. These provisions are ambiguous, and require either 
     a burdensome collection of data or the continued use of 
     increasingly dated FTE adjustment factors based on 1994 data. 
     The bill would base a State's child count on the number of 
     eligible children, aged 3 thru 21, residing in the State in 
     the previous year, plus the number of those children who 
     received services under Part C in summer or intersession 
     programs provided by the State. This approach would be simple 
     to understand and administer, minimize data-collection burden 
     on States, and encourage the identification and recruitment 
     of eligible children. The double weight given to children 
     served in summer or intersession programs would reflect the 
     greater cost of those programs, and would encourage States to 
     provide them.
       Section 131(1) would also add, to section 1303(a), a new 
     paragraph (2), which would establish minimum and maximums for 
     annual State allocations. No State would be allocated more 
     than 120 percent, or less than 80 percent, of its allocation 
     for the previous year, except that each State would be 
     allocated at least $200,000. The link to a State's prior-year 
     allocation would ameliorate the disruptive effects of 
     substantial increases and decreases in State child counts 
     from year to year, which are typical among migratory 
     children. The $200,000 minimum would ensure that each 
     participating State receives enough funds to carry out an 
     effective program, including the costs of finding

[[Page 11418]]

     eligible children and encouraging them to participate in the 
     program.
       Section 131(2) would revise subsection (b), which describes 
     the computation of Puerto Rico's allocation, so that, over a 
     5-year phase-in period, its allocation would be determined on 
     the same basis as are the allocations of the 50 States.
       Section 131(3) would delete subsections (d) and (e) of 
     section 1303, relating to certain consortia formed by LEAs 
     and the mehods the Secretary must follow to detemine the 
     estimated number of migratory children in each State, 
     respectively. Subsection (d) is unduly burdensome for States 
     and the Department to administer, and consortia can be 
     addressed more effectively through incentive grants under 
     section 1308(d). Subsection (e) would have no further 
     relevance under the revised child-count provisions of section 
     1303(a)(1).
       Section 132, State applications [ESEA, Sec. 1304]. Section 
     132 of the bill would amend section 1304 of the ESEA, which 
     requires States to submit applications for grants under the 
     Migrant Education program, describes the children who are to 
     be given priority for services, and authorizes the provision 
     of services to certain categories of children who are no 
     longer migratory.
       Section 131(1)(A) would amend section 1304(b)(1) to require 
     the State's application to include certain material that is 
     now required to be in its comprehensive plan (but not in its 
     application) under section 1306(a). This reflects the 
     proposed repeal of the requirement for a comprehensive 
     service-delivery plan that is separate from the State's 
     application for funds, in order to streamline program 
     requirements and reduce paperwork burden on States.
       Section 132(1)(B) would amend section 1304(b)(5) to clarify 
     the factors that States are to consider when making subgrants 
     to local operating agencies.
       Section 132(1)(C) would redesignate paragraphs (5) and (6) 
     of section 1304(b) as paragraphs (6) and (7), respectively.
       Section 132(1)(D) would insert a new paragraph (5) in 
     section 1304(b) to require a State's application to describe 
     how the State will encourage migratory children to 
     participate in State assessments required under Part A of 
     Title I.
       Section 132(2)(A) and (B) would make technical and 
     conforming amendments to section 1304(c)(1) and (2).
       Section 132(2)(C) would strengthen the requirements of 
     section 1304(c)(3) relating to the involvement of parents and 
     parent advisory councils.
       Section 132(2)(D) would make a conforming amendment to 
     section 1304(c)(7) to reflect the bill's amendments relating 
     to child counts.
       Section 133, authorized activities [ESEA, Sec. 1306]. 
     Section 133 of the bill would restate, in its entirety, 
     section 1306 of the ESEA, to delete the requirement that a 
     participating State develop a comprehensive service-delivery 
     plan that is separate from its application for funds under 
     section 1304. The important elements of this plan would be 
     incorporated into section 1304, as amended by section 132 of 
     the bill. In addition, section 1306(a) would clarify current 
     provisions regarding priority in the use of program funds; 
     the use of those funds to provide services described in Part 
     A to children who are eligible for services under both the 
     Migrant Education program and Part A; and the prohibition on 
     using program funds to provide services that are available 
     from other sources.
       Section 134, coordination of migrant education activities 
     [ESEA, Sec. 1308]. Section 134 of the bill would amend 
     section 1308 of the ESEA, which authorizes various activities 
     to support the interstate and intrastate coordination of 
     migrant-education activities.
       Section 134(1)(A) would make for profit entities eligible 
     for awards under section 1308(a). The current restriction to 
     nonprofit entities has made it difficult to find 
     organizations with the necessary technical expertise and 
     experience to carry out certain important activities, such as 
     the 1-800 help line and the program support center.
       Section 134(1)(B) would make a technical amendment to 
     section 1308(a)(2).
       Section 134(2) would amend section 1308(b) to remove 
     obsolete provisions relating to the records of migratory 
     children and to conform to the proposed deletion of 
     references in section 1303 to the ``full-time equivalent'' 
     numbers of those students in determining child counts.
       Section 134(3) would increase, from $6,000,000 to 
     $10,000,000, the maximum amount that the Secretary could 
     reserve each year from the appropriation for the Migrant 
     Education program to support coordination activities under 
     section 1308. This increase would be consistent with the 
     Department's appropriations Acts for the two most recent 
     fiscal years, increase the amount available for State 
     incentive grants under section 1308(d), and make funds 
     available to assist States and LEAs in transferring the 
     school records of migratory students.
       Section 134(4) would amend section 1308(d), which 
     authorizes incentive grants to States that form consortia to 
     improve the delivery of services to migratory children whose 
     education is interrupted. These grants would be permitted, 
     rather than required as under current law, so that the 
     Secretary would have the flexibility to determine, from year 
     to year, whether funds ought to be devoted to other 
     activities under section 1308. The maximum amount that could 
     be reserved for these grants would be increased from $1.5 
     million to $3 million so that, in years when these grants are 
     warranted, they can be made to more than a token number of 
     States. The requirement to make these awards on a competitive 
     basis would be deleted because it is needlessly restrictive 
     and results in an unduly complicated process of determining 
     the merits of applications in relation to each other in years 
     when all applications warrant approval and sufficient funds 
     are available. Deleting this requirement would provide the 
     Secretary with flexibility to, for example, award equal 
     amounts to each consortium with an approvable application, or 
     to provide larger awards to consortia including States that 
     receive relatively small allocations under section 1303.
       Section 135, definitions [ESEA, Sec. 1309). Section 135 of 
     the bill would delete two references to a child's guardian in 
     the definition of ``migratory child'' in section 1309(2) of 
     the ESEA, because the term ``parent''. which is also used in 
     that section, is defined in section 14101(22) of the ESEA 
     (which the bill would redesignate as section 11101(22)) to 
     include ``a legal guardian or other person standing in loco 
     parentis''.
     Part D--Neglected and delinquent
       Part D of Title I of the bill would amend Part D of Title I 
     of the ESEA, which authorizes assistance to States and, 
     through the States, to local agencies, to provide educational 
     services to children and youth who are neglected or 
     delinquent.
       Section 141, program name. Section 141 of the bill would 
     amend the heading of Part D of Title I of the ESEA to read, 
     ``State Agency Programs for Children and Youth Who Are 
     Neglected or Delinquent''. This name would more accurately 
     reflect the bill's proposed deletion of the authority for 
     local programs in Subpart 2 of Part D.
       Section 142 findings; purpose; program authorized [ESEA, 
     Sec. 1401]. Section 142(a) of the bill would update the 
     findings in section 1401(a) of the ESEA, and shorten them to 
     reflect the proposed deletion of Subpart 2.
       Section 142(b) would amend the statement of purpose in 
     section 1401(b) to reflect the proposed deletion of Subpart 
     2.
       Section 142(c) would amend the statement of the program's 
     authorization in section 1401(b) to reflect the proposed 
     deletion of Subpart 2.
       Section 143, payments for programs under Part D [ESEA, 
     Sec. 1402]. Section 143 of the bill would delete section 
     1402(b) of the ESEA, which requires that States retain funds 
     generated throughout the State under Part A of Title I (Basic 
     Grants) on the basis of youth residing in local correctional 
     facilities or attending community day programs for delinquent 
     children and youth, and use those Part A funds for local 
     programs under subpart 2 of Part D. This conforms to the 
     bill's proposal to delete Subpart 2. Section 142 would also 
     make other conforming amendments to section 1402.
       Section 144, allocation of funds [ESEA, Sec. 1412]. Section 
     144 of the bill would amend section 1412(b) of the ESEA, 
     which describes the computation of Puerto Rico's allocation 
     under Part D, so that, over a 5-year phase-in period, its 
     allocation would be determined on the same basis as are the 
     allocations of the 50 States. Section 144 would also make 
     conforming and technical amendments to section 1412(a).
       Section 145, State plan and State agency applications 
     [ESEA, Sec. 1414]. Section 145(2)(A) of the bill would amend 
     section 1414(a)(2) of the Act, relating to the contents of a 
     State's plan, to require the plan to provide that 
     participating children will be held to the same challenging 
     academic standards, as well as given the same opportunity to 
     learn, as they would if they were attending local public 
     schools. Section 145 would also correct erroneous citations 
     in section 1414.
       Section 146, use of funds [ESEA, Sec. 1415]. Section 146 of 
     the bill would correct an erroneous citation in section 1415 
     of the ESEA, relating to the permissible use of Part D funds.
       Section 147, local agency programs [ESEA, Sec. Sec. 1412-
     1426]. Section 147 of the bill would repeal Subpart 2 (Local 
     Agency Programs) of Part D and redesignate Subpart 3 (General 
     Provisions) as Subpart 2. The local agency program is unduly 
     complicated for States to administer and does not promote 
     effective services for children who are, or have been, 
     neglected or delinquent. Those services are better provided 
     through other local, State, and Federal programs, including 
     other ESEA programs, such as Basic Grants under Part A.
       Section 148, program evaluations [ESEA, Sec. 1431]. Section 
     148(1) of the bill would amend section 1431(a) of the ESEA, 
     relating to the scope of evaluations under Part D, to conform 
     to the proposed repeal of Subpart 2.
       Section 148(2) would amend section 1431(b) to require that 
     the multiple measures of student progress that a State agency 
     must use in conducting program evaluations, while consistent 
     with section 1414's requirement to provide participating 
     children the same opportunities to learn and to hold them to 
     the same standards that would apply if they were attending 
     local public schools, must be appropriate for the students 
     and feasible for

[[Page 11419]]

     the agency. This modification would recognize that, for a 
     variety of reasons, it may not be appropriate to administer 
     the same tests to students who are, or have been, neglected 
     or delinquent, as are given to children of the same age who 
     are in traditional public schools.
       Section 148(3) of the bill would amend section 1431(c), 
     relating to the results of evaluations, to reflect the 
     proposed repeal of Subpart 2.
       Section 149, definitions [ESEA, Sec. 1432]. Section 149 of 
     the bill would delete the definition of ``at-risk youth'' in 
     paragraph (2) of section 1432, and renumber the remaining 
     paragraphs. The deleted term is used only in Subpart 2, which 
     would be repealed.
     Part E--Federal evaluations, demonstrations, and transition 
         projects
       Section 151, evaluations, management information, and other 
     Federal activities [ESEA, Sec. 1501]. Section 151 of the bill 
     would amend, in its entirety, section 1501 of the ESEA, which 
     authorizes the Secretary to conduct evaluations and 
     assessments, collect data, and carry out other activities 
     that support the Title I programs and provide information 
     useful to those who authorize and administer that title. As 
     revised, section 1501 would support the activities that are 
     essential for the Secretary to carry out over the next 
     several years: evaluating Title I programs; helping States, 
     LEAs, and schools develop management-information systems; 
     carrying out applied research, technical assistance, 
     dissemination, and recognition activities; and obtaining 
     updated census information so that funds are allocated using 
     the most up-to-date information about low-income families. 
     Section 1501 would also provide for the continued conduct of 
     the national assessment of Title I and the national 
     longitudinal study of Title I schools.
       Section 1502, demonstrations of innovative practices. 
     Section 152 of the bill would make conforming amendments to 
     section 1502 of the ESEA.
     Part F--General provisions
       Section 161, general provisions [ESEA, Sec. Sec. 1601-
     1604]. Section 161(1) of the bill would repeal sections 1601 
     and 1602 of the ESEA. Section 1601 sets out highly 
     prescriptive requirements relating to regulations under Title 
     I that should not be retained. Instead, Title I, like other 
     ESEA programs, should remain subject to the rulemaking 
     requirements of the Administrative Procedure Act and of 
     section 437 of the General Education Provisions Act. Section 
     1602 requires the Secretary to issue a program assistance 
     manual and to respond to certain inquiries within 90 days. 
     These are similarly inappropriate and unwarranted 
     restrictions on the Secretary's discretion in administering 
     the Title I program.
       Section 161(2) would redesignate sections 1603 and 1604 as 
     sections 1601 and 1602.
     Part G--Reading excellence
       Section 171, reading and literacy grants to State 
     educational agencies [ESEA, Sec. 2253]. Section 171 of the 
     bill would amend section 2253 of the ESEA (which directs the 
     Secretary to award grants to SEAs to carry out the reading 
     and literacy activities described in Part C of Title II of 
     the ESEA), which section 178(B)(1) of the bill would transfer 
     to Part E of Title I, as follows:
       Paragraph (1) would amend the current limit of one grant 
     per State, in section 2252(a)(2)(A), to permit a State to 
     receive sequential, but not simultaneous, grants. Thus, a 
     State could receive a second grant after its first grant 
     period is over.
       Paragraph (2) would add, to the State application 
     requirements in section 2253(b)(2)(B), a clause (ix) to 
     require an SEA's application to include the process and 
     criteria it will use to review and approve LEA applications 
     for the two types of subgrants available under this part: 
     local reading improvement subgrants under section 2255 and 
     tutorial assistance subgrants under section 2256, including a 
     peer-review process that includes individuals with relevant 
     expertise.
       Paragraph (3) would clarify the unclear language in section 
     2253(c)(2)(C), which requires the Federal peer-review panel, 
     in making funding recommendations to the Secretary, to give 
     priority to States that have modified, are modifying, or will 
     modify their teacher certification requirements to require 
     effective training of prospective teachers in methods of 
     reading instruction that reflect scientifically based reading 
     research.
       Paragraph (4) would make a technical amendment to section 
     2253(d)(3), which permits States to use certain consortia or 
     similar entities that it formed before enactment of the 
     Reading Excellence Act on October 21, 1998, in lieu of a 
     partnership that meets that Act's requirements.
       Section 172, use of amounts by State educational agencies 
     [ESEA, Sec. 2254]. Section 172 of the bill would amend 
     section 2254 of the ESEA so that the State's cost of 
     administering the program of tutorial assistance subgrants 
     under section 2256 would be subject to the overall five 
     percent limit on State administrative costs. That amount 
     should be sufficient for all the State's costs of 
     administering the Reading Excellence program. Any amounts set 
     aside under the 15 percent limit in section 2254(2) would 
     have to be used for the actual subgrants to LEAs and not for 
     State administrative expenses.
       Section 173, local reading improvement subgrants [ESEA, 
     Sec. 2255]. Section 173(a) of the bill would amend section 
     2255(a) of the ESEA, which describes the LEAs that are 
     eligible to apply for a local reading improvement subgrant 
     under section 2255, to limit eligibility to LEAs that operate 
     schools for grades 1 through 3. LEAs that serve only middle 
     and/or high school students should not be eligible for this 
     program, which is intended to help children read well and 
     independently by the third grade.
       Section 173(b) would amend section 2255(d)(i), which 
     describes the activities that an LEA may carry out with its 
     subgrant, to require that the schools in which reading 
     instruction is provided serve children in the first through 
     third grades. As with the provision described above relating 
     to LEA eligibility, this amendment will ensure that the 
     program's objective of helping children to read by the 3rd 
     grade is met.
       Section 174, tutorial assistance subgrants [ESEA, 
     Sec. 2256]. Section 174(a) and (b) of the bill would make 
     amendments to section 2256 of the ESEA, which authorizes 
     subgrants to LEAs for tutorial assistance, that correspond to 
     the amendments to section 2255 (local reading improvement 
     subgrants) that ensure that the program focuses on its 
     intended age range, children from pre-kindergarten through 
     3rd grade.
       Section 174(a) would also make the following amendments to 
     section 2256:
       Paragraph (1)(B) would delete subsection (a)(1)(A), which 
     makes an LEA eligible for a tutorial assistance subgrant if 
     any school in its jurisdiction is located in an empowerment 
     zone or enterprise community, because LEAs are not eligible 
     through this route for local reading improvement subgrants 
     under section 2255. Making the eligibility criteria the same 
     for the two types of subgrants, as provided by this 
     amendment, will increase the likelihood that tutorial 
     activities are carried out in the same LEAs that receive 
     local reading improvement subgrants, promoting the 
     coordination of the activities supported by the two types of 
     subgrants.
       Paragraph (5) would delete, from current section 
     2256(a)(2)(B), which the bill would redesignate as section 
     2256(a)(3)(B), language conditioning the receipt of all Title 
     I funds by each LEA that is currently eligible under section 
     2256 on its providing public notice of the tutorial 
     assistance program to parents and possible providers of 
     tutoring services. This provision is grossly disproportionate 
     in its severity and is not logically related to the large 
     amounts of funds it affects under the other Title I programs. 
     Any failure to provide the notice described in this section 
     should be subject to the same range of consequences that 
     attach to possible noncompliance with any other requirement 
     of the statute.
       Paragraph (6) would make conforming amendments to current 
     section 2256(a)(3), which the bill would redesignate as 
     section 2256(a)(4), to reflect the proposed deletion of 
     eligibility of LEAs on the basis of having a school located 
     in an empowerment zone or enterprise community under section 
     2256(a)(1)(A).
       Paragraph (7) would make technical and conforming 
     amendments to current subsection (a)(4), which the bill would 
     redesignate as subsection (a)(5).
       Section 175, national evaluation [ESEA, Sec. 2257). Section 
     175 of the bill would amend section 2257 of the ESEA, which 
     provides for a national evaluation of the program under this 
     part, to remove a cross-reference to a current provision that 
     earmarks funds for the evaluation. Other provisions of the 
     will would provide the Secretary with authority to pay for 
     evaluations of all ESEA programs, removing the need for 
     individual evaluation earmarks.
       Section 176 information dissemination [ESEA, Sec. 2258]. 
     Section 176(1) of the bill would amend section 2258 of the 
     ESEA, which provides for the dissemination of program 
     information, to reflect the transfer of the program's 
     authorization of appropriations to section 1002(e) of the 
     ESEA. It would also add authority for the National Institute 
     for Literacy, which administers section 2258, to use up to 
     five percent of the amount available each year to pay for the 
     costs of administering that section.
       Section 176(2) would add, as subsection (c) of section 
     2258, authority for the Secretary to reserve up to one 
     percent of each fiscal year's appropriation for the Reading 
     Excellence program for technical assistance, program 
     improvement, and replication activities.
       Section 177, authorization of appropriations [ESEA, 
     Sec. 2260]. Section 177 of the bill would repeal section 2260 
     of the ESA, which authorizes appropriations for the program, 
     to reflect the transfer of the program's authorization of 
     appropriations to section 1002(e) of the ESEA.
       Section 178, transfer and redesignations. Section 178 of 
     the bill would transfer the authority for the Reading 
     Excellence program, currently in Part C of Title II of the 
     ESEA, to Part E of Title I, redesignate current Parts E and F 
     of Title I as Parts F and G, and make other technical and 
     conforming amendments.


               TITLE II--HIGH STANDARDS IN THE CLASSROOM

       Section 201 of the bill would amend Title II of the ESEA in 
     its entirety, as follows:

[[Page 11420]]


     Part A--Teaching to high standards
       Part A of Title II would authorize a new program in the 
     ESEA by consolidation the existing Eisenhower State Grants 
     (Title II) and Innovative Education Program Strategies (Title 
     VI) programs in the ESEA and Title III of the Goals 2000: 
     Educate America Act.
       Subpart 1--Findings, purpose and Authorization of 
           appropriations
       Section 2111, findings. Section 2111 would set out findings 
     for Part A.
       Section 2112, purpose. Section 2112 would state that the 
     purpose of Part A is to: (1) Support States and LEAs in 
     continuing the task of developing challenging content and 
     student performance standards and aligned assessments, 
     revising curricula and teacher certification requirements, 
     and using challenging content and student performance 
     standards to improve teaching and learning; (2) ensure that 
     teachers and administrators have access to professional 
     development that is aligned with challenging State content 
     and student performance standards in the core academic 
     subjects; (3) provide assistance to new teachers during their 
     first three years in the classroom; and (4) support the 
     development and acquisition of curricular materials and other 
     instructional aids that are not normally provided as part of 
     the regular instructional program and that will advance local 
     standards-based school reform efforts.
       Section 2113, authorizations of appropriations. Section 
     2113 would authorize the appropriation of such sums as may be 
     necessary for each of the two operational subparts of Part A 
     for fiscal years 2001, through 2005.
       Subpart 2--State and local activities.
       Section 2121, allocations to States. Section 2121 would 
     provide for allocations to the States, including the District 
     of Columbia and Puerto Rico; the outlying areas; and schools 
     operated or funded by the Bureau of Indian Affairs (BIA). The 
     Secretary would reserve a total of one percent for the 
     outlying areas and the BIA. The remaining funds would be 
     allocated to States, based one-half on each State's share 
     of funds under Part A of Title I for the previous fiscal 
     year and one-half on each state's relative share of the 
     population aged 5 to 17. No State may receive a grant that 
     is less than one-half of one percent of the amount 
     available for State grants.
       Section 2122, priority for professional development in 
     mathematics and science. Section 2122(a) would establish 
     rules for the use of Part A funds for professional 
     development in mathematics and science at various 
     appropriations levels. A key priority of the Teaching to High 
     Standards proposal is directing Federal sources to support 
     professional development that strengthens instruction in the 
     core academic content areas, instead of professional 
     development that uses general strategies for improving 
     classroom instruction that are not based on academic content. 
     Toward that end, the bill would require States and LEAs to 
     use funds for professional development only in the academic 
     content areas and would increase the current Eisenhower 
     program's $250 million set-aside for professional development 
     in mathematics and science to $300 million. This ``trigger'' 
     means that if the annual appropriation for Part A is $300 
     million or less, each State would be required to devote its 
     entire allocation to supporting professional development in 
     mathematics and science (including all funds retained at the 
     State level and those distributed by the SEA and the State 
     agency for higher education (SAHE) as grants to LEAs). For 
     years in which the appropriation is higher than $300 million, 
     each State would be required to allocate a percentage of its 
     funding toward mathematics and science professional 
     development that is at least as much as the State would have 
     received had the appropriation been $300 million. The SEA and 
     the SAHE would jointly determine how the State would 
     structure the use of State-level funding and grants to LEAs 
     to meet this requirement.
       Section 2122(b) would provide that, for purposes of meeting 
     the priority requirements of subsection (a), professional 
     development in mathematics and science may include 
     interdisciplinary activities, as long as these activities 
     include a strong focus on mathematics and science. Subsection 
     (c) would require that funds in excess of the $300 million 
     appropriation be used in one or more of the core academic 
     subjects, including mathematics and science.
       Section 2123, State application. Section 2123 would require 
     each State to submit an application that is developed by the 
     SEA in consultation with the SAHE, community-based and other 
     nonprofit organizations with experience in providing 
     professional development, and institutions of higher 
     education (IHEs). This section would also describe what 
     States must include in their applications. The Secretary 
     would have to approve a State application if a peer-review 
     panel determines that it satisfactorily addresses the 
     application requirements and holds reasonable promise of 
     achieving the purposes of the program.
       Section 2124, annual State reports. Section 2124 would 
     require a State to submit annual reports to the Secretary 
     that describe its activities under this program, report on 
     the progress of subgrant recipients against program 
     performance indicators that the Secretary identifies and any 
     other indicators that the State requires, and contain other 
     information that the Secretary requires.
       Section 2125, within-State allocations. Section 2125 would 
     allow an SEA to reserve up to 10 percent of the State 
     allocation for State-level activities, program evaluations, 
     and administration. Not more than one third of this 
     reservation could be used for administration. The SEA would 
     also have to make available to the SAHE an amount equal to 
     what the State's allocation would be if the amount of the 
     appropriation for this subpart were $60 million. From the 
     amount remaining, the SEA would make formula and competitive 
     subgant awards to LEAs. Of the amount that is reserved for 
     LEAs, the SEA would allocate 50 percent to LEAs in proportion 
     to the relative numbers of children, aged 5 to 17, from low-
     income families within the LEA and award 50 percent to LEAs 
     on a competitive basis.
       Section 2126, State-level activities. Section 2126 would 
     provide examples of activities that SEAs could carry out with 
     the funds they reserve for State-level activities to promote 
     high-quality instruction.
       Section 2127, subgrants to partnerships of institutions of 
     higher education and local educational agencies. Section 2127 
     would allow SAHEs to reserve not more than 3\1/3\ percent of 
     their allocation for administrative activities and program 
     evaluations and require them, in cooperation with the SEA, to 
     award competitive subgrants to, or enter into contracts or 
     cooperative agreements with, IHEs or nonprofit organizations 
     to provide professional development in the core academic 
     subjects. These awards would be for 3 years (which would be 
     extended for 2 more years if the subgrantee is making 
     substantial progress) and made using a peer-review process. 
     The SAHE would give priority to projects that focus on 
     teacher induction programs and could make awards only to 
     projects that include an LEA, are coordinated with activities 
     carried out under Title II of the Higher Education Act of 
     1965 (if the LEA or IHE is participating in that program), 
     and involve the IHE's school or department of education and 
     the school or departments in the specific disciplines in 
     which the professional development will be provided.
       Section 2127 would also describe the activities that award 
     recipients must carry out and require them to submit an 
     annual report to the SAHE, beginning with fiscal year 2002, 
     on their progress against indicators of program performance 
     that the Secretary may establish. The SAHE would provide the 
     SEA with copies of these reports.
       Section 2128, competitive local awards. Section 2128 would 
     require SEAs to award competitive subgrants to LEAs from the 
     funds reserved for that purpose under section 2125. The SEA 
     would use a peer-review process that includes reviewers who 
     are knowledgeable in the academic content areas. SEAs would 
     award subgrants based on the quality of the applicants' 
     proposals and their likelihood of success, and on the 
     demonstrated need of applicants, based on specified criteria.
       Section 2128 would also require SEAs to adopt strategies to 
     ensure that LEAs with the greatest need are provided a 
     reasonable opportunity to receive an award. Subgrants would 
     be for a three-year period, which the SEA would extend for an 
     additional two years if it determines that the LEA is making 
     substantial progress toward meeting the goals in the LEA's 
     district-wide plan for raising student achievement against 
     State standards and against the performance indicators 
     identified by the Secretary under section 2136.
       Section 2129, local applications. Section 2129 would 
     require an LEA to submit an application to the SEA in order 
     to be eligible to receive a formula or competitive subgrant. 
     The application would include a district-wide plan that 
     describes how the LEA will raise student achievement against 
     State standards by: (1) supporting the alignment of curricula 
     assessments, and professional development to challenging 
     State and local content standards. (2) providing professional 
     development in the core academic content areas; (3) carrying 
     out activities to assist new teachers during their first 
     three years in the classroom; and (4) ensuring that teachers 
     employed by the LEA are proficient in teaching skills and 
     content knowledge.
       In addition, the LEA application would: (1) identify 
     specific goals for achieving the purposes of the program; (2) 
     describe how the LEA will address the needs of high-poverty, 
     low-performing schools; (3) describe how the LEA will address 
     the needs of teachers of students with limited English 
     proficiency and other students with special needs; (4) 
     include an assurance that the LEA will collect data that 
     measures progress toward the indicators of program 
     performance that the Secretary identifies; (5) describe how 
     the LEA will coordinate funds under this subpart with 
     professional development activities funded through other 
     State and Federal programs; (6) describe how the LEA will use 
     its subgrant funds awarded by formula to address the items in 
     the district-wide plan described above; and (7) describe how 
     it would use the additional funds from a competitive

[[Page 11421]]

     subgrant, if it is applying for one, to implement that plan.
       Section 2130, uses of funds. Section 2130 would describe 
     the activities an LEA may conduct with program funds in order 
     to implement its district-wide plan.
       Section 2131, local accountability. Section 2131 would 
     require each LEA to submit an annual report to the SEA, 
     beginning in fiscal year 2002, that contains: (1) information 
     on its progress against the indicators of program performance 
     that the Secretary identifies and against the LEA's program 
     goals; (2) data disaggregated by school poverty level, as 
     defined by the Secretary; and (3) a description of the 
     methodology the subgrantee used to gather the data.
       Section 2132, local cost-sharing requirement. Section 2132 
     would provide that the Federal share of activities carried 
     out under Subpart 2 with funds received by formula may not 
     exceed 67 percent for any fiscal year. The Federal share of 
     activities carried out under this subpart with funds awarded 
     on a competitive basis could not exceed 85 percent during the 
     first year of the subgrant, 75 percent during the second 
     year, 65 percent during the third year, 55 percent during the 
     fourth year, and 50 percent during the fifth year.
       Section 2133, maintenance of effort. Section 2133 would 
     require each participating LEA to maintain its fiscal effort 
     for professional development at the average of its 
     expenditures over the previous three years.
       Section 2134, equipment and textbooks. Section 2134 would 
     provide that subgrantees may not use program funds for 
     equipment, computer hardware, textbooks, telecommunications 
     fees, or other items, that would otherwise be provided by the 
     LEA or State, or by a private school whose students receive 
     services under the program.
       Section 2135, supplement, not supplant. Section 2135 would 
     require an LEA to use program funds only to supplement the 
     level of funds or resources that would otherwise be made 
     available from non-Federal sources, and not to supplant those 
     non-Federal funds or resources.
       Section 2136, program performance indicators. Section 2136 
     would require the Secretary to identify indicators of program 
     performance against which recipients would report their 
     progress.
       Section 2137, definitions. Section 2137 would define ``core 
     academic subjects'', ``high-poverty local educational 
     agency'', ``low-performing school'', and ``professional 
     development''.
       Subpart 3--National activities for the improvement of 
           teaching and school leadership
       Section 2141, program authorized. Section 2141 would 
     authorize the Secretary to make awards to a wide variety of 
     public and private agencies and entities to support: (1) 
     activities of national significance that are not supported 
     through other sources and that the Secretary determines will 
     contribute to the improvement of teaching and school 
     leadership in the Nation's schools; (2) activities of 
     national significance that will contribute to the recruitment 
     and retention of highly qualified teachers and principals in 
     high-poverty LEAs; (3) a national evaluation of the Part A 
     program; and (4) the National Board for Professional Teaching 
     Standards. Section 2141(b)(5) would direct the Secretary to 
     provide support for the Eisenhower National Clearinghouse for 
     Mathematics and Science Education under section 2142.
       Section 2142, Eisenhower National Clearinghouse for 
     Mathematics and Science Education. Section 2142 would retain, 
     with few changes, the authority in current section 2102(b) 
     for the Eisenhower National Clearinghouse for Mathematics and 
     Science Education, as follows:
       Subsection (a) would provide authority for the 
     Clearinghouse.
       Subsection (b) would authorize activities and establish 
     certain requirements related to the Clearinghouse, including 
     the application and award process, the duration of the grant 
     or contract, the activities the award recipient must carry 
     out, the submission of materials to the Clearinghouse, and 
     the establishment of a steering committee.
     Part B--Transition to teaching; troops to teachers
       Section 2111, findings. Section 2211 of the ESEA would set 
     out the Congressional findings for the new Part B. In the 
     next decade, school districts will need to hire more than 2 
     million teachers, especially in the areas of math, science, 
     foreign languages, special education, and bilingual 
     education. The need for teachers able to teach in high-
     poverty school districts will be particularly high. To meet 
     this need, talented Americans of all ages should be recruited 
     to become successful, qualified teachers.
       Nearly 28 percent of teachers of academic subjects have 
     neither a major nor a minor in their main assignment fields. 
     This problem is even more actuate in high-poverty areas, 
     where the out-of-field percentage is 39.
       Additionally, the Third International Math and Science 
     Study (TIMSS) ranked U.S. high school seniors last among 16 
     countries in physics, and next to last in math. Based mainly 
     on TIMSS data, it is also evident that a stronger emphasis 
     needs to be placed on the academic preparation of our 
     children in math and science.
       Further, one-fourth of high-poverty schools find it very 
     difficult to fill bilingual teaching positions, and nearly 
     half of public school teachers have students in their 
     classrooms for whom English is a second language.
       Many career-changing professionals with strong content-area 
     skills are interested in making a transition to a teaching 
     career, but need assistance in getting the appropriate 
     pedagogical training and classroom experience. The Troops to 
     Teachers model has been highly successful in linking high-
     quality teachers to teach in high-poverty school districts.
       Section 2212, purpose. Section 2212 of the ESEA would 
     establish the statement of purpose for the program, which 
     would be to address the need of high-poverty school districts 
     for highly qualified teachers in subject areas such as 
     mathematics, science, foreign languages, bilingual education, 
     and special education needed by those school districts. This 
     would be accomplished by continuing and enhancing the 
     Transition to Teaching model for recruiting and supporting 
     the placement of such teachers, and by recruiting, preparing, 
     placing, and supporting career-changing professionals who 
     have knowledge and experience that would help them become 
     such teachers.
       Section 2213, program authorized. Section 2213 of the ESEA 
     would establish the program authority and the authorization 
     of appropriations for the Transition to Teaching program. 
     Under section 2213(a), the Secretary would be authorized to 
     use funds appropriated under section 2213(c) for each fiscal 
     year to award grants, contracts, or cooperative agreements to 
     institutions of higher education and public and private 
     nonprofit agencies or organizations to carry out programs 
     authorized by this part.
       Section 2213(b)(1)(A) would provide that, before making any 
     awards under section 2213(a), the Secretary would be required 
     to consult with the Secretaries of Defense and Transportation 
     with respect to the appropriate amount of funding necessary 
     to continue and enhance the Troops to Teachers program. 
     Additionally, section 2213(b)(1)(B) would provide that, upon 
     agreement, the Secretary would transfer the amount under 
     section 2213(b)(1)(A) to the Department of Defense to carry 
     out the Troops to Teachers program. Further, section 
     2213(b)(2) would allow the Secretary to enter into a written 
     agreement with the Department of Defense and Transportation, 
     or take such steps as the Secretary determines are 
     appropriate to ensure effective continuation of the Troops to 
     Teachers program.
       Finally, section 2213(c) would authorize the appropriation 
     of such sums as may be necessary to carry out Part B for 
     fiscal years 2001 through 2005.
       Section 2214, application. Section 2214 of the ESEA would 
     establish the application requirements. Section 2214 would 
     provide that an applicant that desires a grant under Part B 
     must submit to the Secretary an application containing such 
     information as the Secretary may require. Applicants would be 
     required to: (1) include a description of the target group of 
     career-changing professionals on which they would focus in 
     carrying out their programs under this part, including a 
     description of the characteristics of that target group that 
     shows how the knowledge and experience of its members is 
     relevant to meeting the purpose of this part; (2) describe 
     how it plans to identify and recruit program participants; 
     (3) include a description of the training program 
     participants would receive and how that training would relate 
     to their certification as teachers; (4) describe how it would 
     ensure that program participants were placed and would teach 
     in high-poverty LEAs; (5) include a description of the 
     teacher induction services that program participants would 
     receive throughout at least their first year of teaching; (6) 
     include a description of how the applicant would collaborate, 
     as needed, with other institutions, agencies, or 
     organizations to recruit, train, place, and support program 
     participants under this part, including evidence of the 
     commitment of the institutions, agencies, or organizations to 
     the applicant's program; (7) include a description of how the 
     applicant would evaluate the progress and effectiveness of 
     its program, including the program's goals and objectives, 
     the performance indicators the applicant would use to measure 
     the program's progress, and the outcome measures that would 
     be used to determine the program's effectiveness; and (8) 
     submit an assurance that the applicant would provide to the 
     Secretary such information as the Secretary determines 
     necessary to determine the overall effectiveness of programs 
     under this part.
       Section 2215, uses of funds and period of service. Section 
     2215 of the ESEA would describe the activities authorized 
     under Part B. Under section 2215(a), Part B funds could be 
     used to: (1) recruit program participants, including 
     informing them of opportunities under the program and putting 
     them in contact with other institutions, agencies, or 
     organizations that would train, place, and support them; (2) 
     authorize training stipends and other financial incentives 
     for program participants, not to exceed $5,000, in the 
     aggregate, per participant; (3) assist institutions of higher 
     education or other providers of teacher training to meet the 
     particular needs of professionals who are changing their 
     careers to teaching; (4) authorize placement activities, 
     including identifying high-poverty LEAs with needs for 
     particular skills

[[Page 11422]]

     and characteristics of the newly trained program participants 
     and assisting those participants to obtain employment in 
     those LEAs; and (5) authorize post-placement induction or 
     support activities for program participants.
       Section 2215(b) would establish the required period of 
     service for program participants. Under section 2215(b), a 
     program participant who completes his or her training would 
     be required to teach in a high-poverty LEA for at least three 
     years. Section 2215(c) would allow the Secretary to establish 
     appropriate requirements to ensure that program participants 
     who receive a training stipend or other financial incentive, 
     but fail to complete their service obligation, repay all or a 
     portion of such stipend or other incentive.
       Section 2216, equitable distribution. Section 2216 of the 
     ESEA would require the Secretary, to the extent practicable, 
     to make awards under Part B that support programs in 
     different geographic regions of the Nation.
       Section 2217, definitions. Section 2217 of the ESEA would 
     establish definitions for the program. Section 2217(1) would 
     define the term ``high-poverty local educational agency'' as 
     an LEA in which the percentage of children, ages 5 though 17, 
     from families below the poverty line is 20 percent or 
     greater, or the number of such children exceeds 10,000. 
     Section 2217(2) would define the term ``program 
     participants'' as career-changing professionals who hold at 
     least a baccalaureate degree, demonstrate interest in, and 
     commitment to, becoming a teacher, and have knowledge and 
     experience relevant to teaching a high-need subject area in a 
     high-poverty LEA.
     Part C--Early childhood educator professional development
       Section 2301, purpose. Section 2301 of the ESEA would 
     establish the purpose of the new Part C program, which is to 
     support the national effort to attain the first of America's 
     Education Goals by enhancing school readiness and preventing 
     reading difficulties in young children, through early 
     childhood education programs that improve the knowledge and 
     skills of early childhood educators working in high-poverty 
     communities. The program would help meet the need for early 
     childhood educators in high-poverty communities with limnited 
     acess to early childhood education and to high-quality early 
     childhood education professionals.
       Section 2302, program authorized. Section 2302(a) of the 
     ESEA would authorize the Secretary to make competitive grants 
     to eligible partnerships. An eligible partnership would 
     consist of: (1) at least one institution of higher education 
     that provides professional development for early childhood 
     educators who work with children from low-income families in 
     high-need communities, or another public or private, 
     nonprofit entity that provides that professionals 
     development; and (2) at least one other public or private 
     nonprofit agency or organization, such as an LEA, an SEA, a 
     State human services agency, a State or local agency 
     administering programs under the Child Care and Development 
     Block Grant Act of 1990, or a Head Start agency.
       Section 2302(b) would direct the Secretary to give a 
     priority to applications from partnerships that include at 
     least one LEA that operates early childhood programs for 
     children from low-income families in high-need communities.
       Section 2302(c) would authorize grants for up to four 
     years, and limit each grantee to one grant under this 
     program.
       Section 2303, applications. Section 2303 of the ESEA would 
     set out requirements for applications for funds. Among other 
     information, each application would include a description of 
     the high-need community to be served; information on the 
     quaity of the early childhood educator professional 
     development program currently being conducted by a member of 
     the partnership; the results of the applicant's assessment of 
     the professional development needs of early childhood 
     education providers to be served by the partnership and in 
     the broader community and how the project will address those 
     needs; a description of how the proposed project would be 
     carried out; descriptions of the project's specific 
     objectives and how progress toward those objectives will be 
     measured; how the applicant plans to institutionalize project 
     activities once Federal funding ends; an assurance that, 
     where applicable, the project will provide appropriate 
     professional development to volunteer staff, as well as to 
     paid staff; and an assurance that the applicant consulted 
     with, and will consult with, relevant agencies and 
     organizations that are not members of the partnership.
       Section 2304, selection of grantees. Section 2304 of the 
     ESEA would require the Secretary to select grantees according 
     to both the community's need for assistance and the quality 
     of applications, and seek to ensure that communities in urban 
     and rural communities and in difference regions of the Nation 
     are served.
       Section 2305, uses of funds. Section 2305 of the ESEA would 
     require that, in general, grant recipients use grant funds to 
     carry out activities that will improve the knowledge and 
     skills of early childhood educators who are working in early 
     childhood programs serving concentrations of poor children in 
     high-need communities. Allowable professional development 
     activities for early childhood educators include, but would 
     not be limited to, activities that: familiarize early 
     childhood educators with recent research on child, language, 
     and literacy development and on early childhood pedagogy; 
     train them to work with parents, and with children with 
     limited English proficiency, disabilities, and other special 
     needs; assist educators during their first three years in the 
     field; development and implementation of professional 
     development programs for early childhood educators using 
     distance learning and other technologies; and data 
     collection, evaluation, and reporting activities necessary to 
     meet program accountability requirements.
       Section 2306, accountability. Section 2306(a) of the ESEA 
     would require the Secretary to announce performance 
     indicators, designed to measure the quality of the 
     professional development on the early childhood education 
     provided by the individuals trained, and such other measures 
     of program impact as the Secretary determines. Section 
     2306(b) would require projects to report annually on their 
     progress in meeting these performance indicators. The 
     Secretary could terminate a grant if the grantee is not 
     making satisfactory progress against the Secretary's 
     indicators.
       Section 2307, cost-sharing. Section 2307 of the ESEA would 
     require each grantee to contribute at least half of the 
     overall cost of its project, including at least 20 percent in 
     each year, from other sources, which may include other 
     Federal sources. The Secretary could waive or modify this 
     requirement in the case of demonstrated financial hardship.
       Section 2308, definitions. Section 2308 of the ESEA would 
     define the terms ``high-need community'', ``low-income 
     family'', and ``early childhood educator''.
       Section 2309, Federal coordination. Section 2309 of the 
     ESEA would direct the Secretaries of Education and Health and 
     Human Services to coordinate activities of this program and 
     other early childhood programs that they administer.
       Section 2310, authorization of appropriations. Section 2310 
     of the ESEA would authorize the appropriation of such sums as 
     may be necessary for fiscal year 2001 and each of the four 
     succeeding fiscal years to carry out Part C.
     Part D--Technical assistance programs
       Section 2401, findings. Section 2401 of the ESEA would 
     state the Congressional findings for Part D as follows: (1) 
     sustained, high-quality technical assistance that responds to 
     State and local demand supported by widely disseminated, 
     research-based information on what constitutes high-quality 
     technical assistance and how to identify high-quality 
     technical assistance providers, can enhance the opportunity 
     for all children to achieve to challenging State academic 
     content and student performance standards; (2) an integrated 
     system for acquiring, using, and supplying technical 
     assistance is essential to improving programs and affording 
     all children this opportunity; (3) States, LEAs, tribes, and 
     schools serving students with special needs, such as 
     educationally disadvantaged students and students with 
     limited English proficiency, have clear needs for technical 
     assistance in order to use funds under the ESEA to provide 
     those students with opportunities to achieve to challenging 
     State academic content standards and student performance 
     standards; (4) current technical assistance and dissemination 
     efforts are insufficiently responsive to the needs of States, 
     LEAs, schools, and tribes for help in identifying their 
     particular needs for technical assistance and developing and 
     implementing their own integrated systems for using the 
     various sources of funding for technical assistance 
     activities under the ESEA (as well as other Federal, State, 
     and local resources) to improve teaching and leaning and to 
     implement more effectively the programs authorized by the 
     ESEA; and (5) the Internet and other forms of advanced 
     telecommunications technology are an important means of 
     providing information and assistance in a cost-effective way.
       Section 2402, purpose. Section 2402 of the ESEA would state 
     the purpose for Part D as being to create a comprehensive and 
     cohesive, national system of technical assistance and 
     dissemination that is based on market principles in 
     responding to the demand for, and expanding the supply of, 
     high-quality technical assistance. This system would support 
     States, LEAs, tribes, schools, and other recipients of funds 
     under the ESEA in implementing standards-based reform and 
     improving student performance through: (1) the provision of 
     financial support and impartial, research-based information 
     designed to assist States and high-need LEAs to develop and 
     implement their own integrated systems of technical 
     assistance and select high-quality technical assistance 
     activities and providers for use in those systems; (2) the 
     establishment of technical assistance centers in areas that 
     reflect identified national needs, in order to ensure the 
     availability of strong technical assistance in those areas; 
     (3) the integration of all technical assistance and 
     information dissemination activities carried out or supported 
     by the Department of Education in order to ensure 
     comprehensive support for school improvement; (4) the 
     creation of a technology-based system, for disseminating 
     information about ways to improve

[[Page 11423]]

     educational practices throughout the Nation, that reflects 
     input from students, teachers, administrators, and other 
     individuals who participate in, or may be affected by, the 
     Nation's educational system; and (5) national evaluations of 
     effective technical assistance.
       Subpart 1--Strengthening the capacity of State and local 
           educational agencies to become effective, informed 
           consumers of technical assistance
       Section 2411, purpose. Section 2411 of the ESEA would state 
     the purposes of Subpart 1 of Part D of Title II. Section 
     2411(1) would state one such purpose as being to provide 
     grants to SEAs and LEAs in order to: (1) respond to the 
     growing demand for increased local decisionmaking in 
     determining technical assistance needs and appropriate 
     technical assistance services; (2) encourage SEAs and LEAs to 
     assess their technical assistance needs and how their various 
     sources of funding for technical assistance under the ESEA 
     and from other sources can best be coordinated to meet those 
     needs (including their needs to collect and analyze data); 
     (3) build the capacity of SEAs and LEAs to use technical 
     assistance effectively and thereby improve their ability to 
     provide the opportunity for all children to achieve to 
     challenging State academic content standards and student 
     performance standards; and (4) assist SEAs and LEAs in 
     acquiring high-quality technical assistance.
       Section 2411(2) would state the other purpose of Subpart 1 
     as being to establish an independent source of consumer 
     information regarding the quality of technical assistance 
     activities and providers, in order to assist SEAs and LEAs, 
     and other consumers of technical assistance that receive 
     funds under the ESEA, in selecting technical assistance 
     activities and providers for their use.
       Section 2412, allocation of funds. Section 2412 of the ESEA 
     would describe how funds appropriated to carry out Subpart 1 
     would be allocated. From those appropriations for any fiscal 
     year, the Secretary would first allocate one percent of the 
     funds to the Bureau of Indian Affairs and the Outlying Areas, 
     in accordance with their respective needs for such funds (as 
     determined by the Secretary) to carry out activities that 
     meet the purposes of Subpart 1. The Secretary would allocate 
     two-thirds of the remaining funds to SEAs in accordance with 
     the formula described in section 2413 and allocate one-third 
     of the remaining funds to the 100 LEAs with the largest 
     number of children counted under section 1124(c) of the ESEA, 
     in accordance with the formula described in section 2416.
       Section 2413, formula grants to State educational agencies. 
     Section 2413 of the ESEA would set out the formula for 
     awarding grants to States. The Secretary would allocate funds 
     among the States in proportion to the relative amounts each 
     State would have received for Basic Grants under Subpart 2 of 
     Part A of Title I of the ESEA for the most recent fiscal 
     year, if the Secretary had disregarded the allocations under 
     that subpart to LEAs that are eligible to receive direct 
     grants under new section 2416. This allocation would be 
     adjusted as necessary to ensure that, of the total amount 
     allocated to States and to LEAs under section 2416, the 
     percentage allocated to a State under section 2413 and to 
     localities in the State under section 2416 is at least the 
     percentage used for the small-State minimum under section 
     1124(d) for the previous fiscal year. The Secretary would 
     also reallocate to other States any amount of any State's 
     allocation under section 2413 of the ESEA that would not be 
     required to carry out the activities for which such amount 
     has been allocated for a fiscal year.
       Section 2414, State application. Section 2414 of the ESEA 
     would describe the application requirements for State formula 
     grants. Each State seeking a grant under Subpart 1 would be 
     required to submit an application to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require. Each such application would be 
     required to describe: (1) the State's need for, and the 
     capacity of the SEA to provide, technical assistance in 
     implementing programs under the ESEA (including assistance on 
     the collection and analysis of data) and in implementing the 
     State plan or policies for comprehensive, standards-based 
     education reform; (2) how the State will use the funds 
     provided under this subpart to coordinate all its sources of 
     funds for technical assistance, including all sources of such 
     funds under the ESEA, into an integrated system of providing 
     technical assistance to LEAs, and other local recipients of 
     funds under the ESEA, within the State and implement that 
     system; (3) the SEA's plan for using funds from all sources 
     under the ESEA to build its capacity, through the acquisition 
     of outside technical assistance and other means, to provide 
     technical assistance to LEAs and other recipients within the 
     State; (4) how, in carrying out technical assistance 
     activities using funds provided from all sources under the 
     ESEA, the State will assist LEAs and schools in providing 
     high-quality education to all children served under the ESEA 
     to achieve to challenging academic standards, give the 
     highest priority to meeting the needs of high-poverty, low-
     performing LEAs (taking into consideration any assistance 
     that the LEAs may be receiving under section 2416), and give 
     special consideration to LEAs and other recipients of funds 
     under the ESEA serving rural and isolated areas. The 
     Secretary would be required to approve a State's application 
     for funds if it meets these requirements and is of sufficient 
     quality to meet the purposes of Subpart 1. In determining 
     whether to approve a State's application, the Secretary would 
     be required to take into consideration the advice of peer 
     reviewers, and could not disapprove any application without 
     giving the State notice and opportunity for a hearing.
       Section 2415, State uses of funds. Section 2415 of the ESEA 
     would describe the permissible uses of State formula grant 
     funds under Subpart 1. The SEA could use these funds to: (1) 
     build its capacity (and the capacity of other State agencies 
     that implement ESEA programs) to use ESEA technical 
     assistance funds effectively through the acquisition of high-
     quality technical assistance, and the selection of high-
     quality technical assistance activities and providers, that 
     meet the technical assistance needs identified by the State; 
     (2) develop, coordinate, and implement an integrated system 
     that provides technical assistance to LEAs and other ESEA 
     recipients within the State, directly, through contracts, or 
     through subgrants to LEAs, or other ESEA recipients of funds, 
     for activities that meet the purposes of Subpart 1, and uses 
     all sources of funds provided for technical assistance, 
     including all ESEA sources; and (3) acquire the technical 
     assistance it needs to increase opportunities for all 
     children to achieve to challenging State academic content 
     standards and student performance standards, and to implement 
     the State's plan or policies for comprehensive standards-
     based education reform.
       A State's integrated system of providing technical 
     assistance could include assistance on such activities as: 
     (1) implementing State standards in the classroom, including 
     aligning instruction, curriculum, assessments, and other 
     aspects of school reform with those standards; (2) 
     collecting, disaggregating, and using data to analyze and 
     improve the implementation, and increase the impact, of 
     educational programs; (3) conducting needs assessments and 
     planning intervention strategies that are aligned with State 
     goals and accountability systems; (4) planning and 
     implementing effective, research-based reform strategies, 
     including schoolwide reforms, and strategies for making 
     schools safe, disciplined, and drug-free; (5) improving the 
     quality of teaching and the ability of teachers to serve 
     students with special needs (including educationally 
     disadvantaged students and students with limited English 
     proficiency); and (6) planning and implementing strategies to 
     promote opportunities for all children to achieve to 
     challenging State academic content standards and student 
     performance standards.
       Section 2416, Grants to large local educational agencies. 
     Section 2416 of the ESEA would describe the formula for 
     providing grants under Subpart 1 to the 100 largest, high-
     need LEAs. Under section 2416, the Secretary would allocate 
     funds among the LEAs described in section 2412(2)(B) in 
     proportion to the relative amounts allocated to each such LEA 
     for Basic Grants under Subpart 2 of Part A of Title I for the 
     most recent fiscal year. As under the State formula in 
     section 2413, the Secretary would be required to reallocate 
     unused LEA allocations.
       Section 2417, local application. Section 2417 of the ESEA 
     would detail the application requirements that the LEAs must 
     meet to receive direct grants under Subpart 1. Each LEA would 
     be required to submit an application to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require. Each application would be required to 
     describe: (1) the LEA's need for technical assistance in 
     implementing ESEA programs (including assistance on the use 
     and analysis of data) and in implementing the State's, or its 
     own, plan or policies, for comprehensive standards-based 
     education reform; (2) how the LEA will use the grant funds to 
     coordinate all its various sources of funds for technical 
     assistance, including all ESEA sources and other sources, 
     into an integrated system for acquiring and using outside 
     technical assistance and other means of building its own 
     capacity to provide the opportunity for all children to 
     achieve to challenging State academic content standards and 
     student performance standards implementing programs under the 
     ESEA, and implement that system. In determining whether to 
     approve a State's application, the Secretary would be 
     required to take into consideration the advice of peer 
     reviewers, and could not disapprove any application without 
     giving the State notice and opportunity for a hearing.
       Section 2418, local uses of funds. Section 2418 of the ESEA 
     would describe the ways in which an LEA could use direct 
     grant funds awarded under Subpart 1. The LEA could use those 
     funds to: (1) build its capacity to use ESEA technical 
     assistance funds through the acquisition of high-quality 
     technical assistance and the selection of high-quality 
     technical assistance activities and providers that meet its 
     technical assistance needs; (2) develop, coordinate, and 
     implement an integrated system of providing technical 
     assistance to its schools using all sources of funds provided 
     for technical assistance, including

[[Page 11424]]

     all ESEA sources; and (3) acquire the technical assistance it 
     needs to increase opportunities for all children to achieve 
     to challenging State academic content standards and student 
     performance standards and to implement the State's, or its 
     own, plan or policies for comprehensive standards-based 
     education reform. An LEA may use these funds for technical 
     assistance activities such as those described in section 
     2415(b) of the ESEA.
       Section 2419, equitable services for private schools. 
     Section 2419 of the ESEA would describe how equitable 
     services would be provided to private schools. First, if an 
     SEA or LEA uses funds under Subpart 1 to provide professional 
     development for teachers or school administrators, the SEA or 
     LEA would be required to provide for professional development 
     for teachers or school administrators in private schools 
     located in the same geographic area on an equitable basis. 
     Similarly, if an SEA or LEA uses funds under Subpart 1 to 
     provide information about State educational goals, standards, 
     or assessments, the SEA or LEA would be required to provide 
     that information, upon request to private schools located in 
     the same geographic area. However, if an SEA or LEA is 
     prohibited by law from meeting these requirements, or the 
     Secretary determines the SEA or LEA has substantially failed 
     or is unwilling to comply with these requirements, the 
     Secretary shall waive these requirements and arrange for the 
     provision of professional development services for the 
     private school teachers or school administrators, consistent 
     with applicable State goals and standards and section 11806 
     of the ESEA.
       Section 2419A, consumer information. Section 2419A of the 
     ESEA would require the Secretary to establish, through one or 
     more contracts, an independent source of consumer information 
     regarding the quality and effectiveness of technical 
     assistance activities and providers available to States, 
     LEAs, and other recipients of funds under the ESEA, in 
     selecting technical assistance activities and providers for 
     their use. Such a contract could be awarded for a period of 
     up to five years, and the Secretary could reserve, from the 
     funds appropriated to carry out Subpart 1 for any fiscal 
     year, such sums as the Secretary determines necessary to 
     carry out section 2419A.
       Section 2419B, authorization of appropriations. Section 
     2419B of the ESEA would authorize the appropriation of such 
     sums as may be necessary for fiscal year 2001 and for each of 
     the four succeeding fiscal years to carry out Subpart 1.
       Subpart 2--Technical assistance centers serving special 
           needs
       Section 2421, general provisions. Section 2421 of the ESEA 
     would set out the general provisions applicable to all 
     technical assistance providers that receive funds under 
     Subpart 2, all consortia that receive funds under proposed 
     Subpart 2 of Part B of Title III of the ESEA (as amended by 
     Title III of the bill), and the educational laboratories, and 
     clearinghouses of the Educational Resources Information 
     Center, supported under the Educational Research, 
     Development, Dissemination, and Improvement Act. Each 
     provider, consortium, laboratory or clearinghouse would be 
     required to: (1) participate in a technical assistance 
     network with the Department and other federally supported 
     technical assistance providers in order to coordinate 
     services and resources; (2) ensure that the services they 
     provide are high-quality, cost-effective, reflect the best 
     information available from research and practice, and are 
     aligned with State and local education reform efforts; (3) in 
     collaboration with SEAs in the States served, educational 
     service agencies (where appropriate), and representatives of 
     high-poverty, low-performing urban and rural LEAs in each 
     State served, develop a targeted approach to providing 
     technical assistance that gives priority to providing 
     intensive, ongoing services to high-poverty LEAs and schools 
     that are most in need of raising student achievement (such as 
     schools identified as in need of improvement under section 
     1116(c) of the ESEA); (4) cooperate with the Secretary in 
     carrying out activities (including technical assistance 
     activities authorized by other ESEA programs) such as 
     publicly disseminating materials and information that are 
     produced by the Department and are relevant to the purpose, 
     expertise, and mission of the technical assistance provider; 
     and (5) use technology, including electronic dissemination 
     networks and Internet-based resources, in innovative ways to 
     provide high-quality technical assistance.
       Section 2422, centers for technical assistance on the needs 
     of special populations. Section 2422 of the ESEA would 
     authorize the Secretary to award grants, contracts, or 
     cooperative agreements to public or private nonprofit 
     entities (or consortia of those entities) to operate two new 
     centers to provide technical assistance to SEAs, LEAs, 
     schools, tribes, community-based organizations, and other 
     recipients of funds under the ESEA concerning how to address 
     the specific linguistic, cultural, or other needs of limited 
     English proficient, migratory, Indian, and Alaska Native 
     students, and educational strategies for enabling those 
     students to achieve to challenging State academic content and 
     performance standards. An entity could receive an award to 
     operate a center only if it demonstrates, to the satisfaction 
     of the Secretary, that it has expertise in these needs and 
     strategies, and an award under section 2422 could be up to 5 
     years in duration.
       Under section 2422(c), each center would be required to 
     maintain appropriate staff expertise, and provide support, 
     training, and assistance to SEAs, tribes, LEAs, schools, and 
     other ESEA funding recipients in meeting the needs of the 
     students in these special populations, including the 
     coordination of other Federal programs and State and local 
     programs, resources, and reforms. Each center would be 
     required to give priority to providing services to schools, 
     including Bureau of Indian Affairs-funded schools, that 
     educate the students described in subsection (a)(1)(A) and 
     have the highest percentages or numbers of children in 
     poverty and the lowest student achievement levels.
       Under section 2422(d), the Secretary would be required to: 
     (1) develop a set of performance indicators that assesses 
     whether the work of the centers assists in improving teaching 
     and learning under the ESEA for students in the special 
     populations described; (2) conduct surveys every two years of 
     entities to be served under this section to determine if they 
     are satisfied with the access to, and quality of, the 
     services provided; (3) collect, as part of the Department's 
     reviews of ESEA programs, information about the availability 
     and quality of services provided by the centers, and share 
     that information with the centers; and (4) take whatever 
     steps are reasonable and necessary to ensure that each center 
     performs its responsibilities in a satisfactory manner, which 
     may include termination of an award under this part, the 
     selection of a new center, and any necessary interim 
     arrangements. All of these activities are designed to ensure 
     the quality and effectiveness of the proposed centers.
       Section 2422(e) would authorize the appropriation of such 
     sums as may be necessary for fiscal year 2001 and for each of 
     the four succeeding fiscal years to carry out the purposes of 
     section 2422.
       Section 2423, parental information and resource centers. 
     Section 2423 of the ESEA would authorize Parental Information 
     and Resource Centers (PIRCs), which are currently authorized 
     under Title IV of the Goals 2000: Educate America Act.
       Section 2423(a) would authorize the Secretary to award 
     grants, contracts, or cooperative agreements to nonprofit 
     organizations that serve parents (particularly those 
     organizations that make substantial efforts to reach low-
     income, minority, or limited English proficient parents) to 
     establish PIRCs. The PIRCs would coordinate the efforts of 
     Federal, State, and local parent education and family 
     involvement initiatives. In addition, the PIRCs would provide 
     training, information, and support to SEAs, LEAs 
     (particularly LEAs with high-poverty and low-performing 
     schools), schools (particularly high-poverty and low-
     performing schools), and organizations that support family-
     school partnerships (such as parent teacher organizations). 
     In making awards, the Secretary would be required, to the 
     greatest extent possible, to ensure that each State is served 
     by at least one award recipient. Currently, there are PIRCs 
     in all 50 States. The District of Columbia, Puerto Rico, and 
     each territory.
       Section 2423(b) would establish the application 
     requirements for the PIRCs. Applicants desiring assistance 
     under section 2423 would be required to submit an application 
     at such time, and in such manner, as the Secretary shall 
     determine. At a minimum, the application would include: a 
     description of the applicant's capacity and expertise to 
     implement a grant under section 2423; a description of how 
     the applicant would use its award to help SEAs and LEAs, 
     schools, and non-profit organizations in the State 
     (particularly those organizations that make substantial 
     efforts to reach a large number or percentage of low-income 
     minority, or limited English proficient children) to: (1) 
     identify barriers to parent or family involvement in schools, 
     and strategies to overcome those barriers; and (2) implement 
     high-quality parent education and family involvement programs 
     that improve the capacity of parents to participate more 
     effectively in the education of their children, support the 
     effective implementation of research-based instructional 
     activities that support parents and families in promoting 
     early language and literacy development and support schools 
     in promoting meaningful parent and family involvement; a 
     description of the applicant's plan to disseminate 
     information on high-quality parent education and family 
     involvement programs to LEAs, schools, and non-profit 
     organizations that serve parents in the State; a description 
     of how the applicant would coordinate its activities with the 
     activities of other Federal, State, and local parent 
     education and family involvement programs and with national, 
     State and local organizations that provide parents and 
     families with training, information, and support on how to 
     help their children prepare for success in school and achieve 
     to high academic standards; a description of how the 
     applicant would use technology, particularly the Worldwide 
     Web, to disseminate information; and a description of the 
     applicant's goals for the center, as well as baseline 
     indicators for

[[Page 11425]]

     each of the goals, a timeline for achieving the goals, and 
     interim measures of success toward achieving the goals.
       Section 2423(c) would limit the Federal share to not more 
     than 75 percent of the cost of a PIRC. The non-Federal share 
     may be in cash or in kind. Under current law, a grant 
     recipient must provide a match in each fiscal year after the 
     first year of the grant, but does not specify the amount of 
     the match.
       Section 2423(d)(1) would establish the allowable uses for 
     program funds. Recipients would be required to use their 
     awards to support SEAs and LEAs, schools, and non-profit 
     organizations in implementing programs that provide parents 
     with training, information, and support on how to help their 
     children achieve to high academic standards. Such activities 
     could include: assistance in the implementation of programs 
     that support parents and families in promoting early language 
     and literacy development and prepare children to enter school 
     ready to succeed in school; assistance in developing networks 
     and other strategies to support the use of research-based, 
     proven models of parent education and family involvement, 
     including the ``Parents as Teachers'' and ``Home Instruction 
     Program for Preschool Youngsters'' programs, to promote 
     children's development and learning; assistance in preparing 
     parents to communicate more effectively with teachers and 
     other professional educators and support staff, and providing 
     a means for on-going, meaningful communication between 
     parents and schools; assistance in developing and 
     implementing parent education and family involvement programs 
     that increase parental knowledge about standards-based school 
     reform; and disseminating information on programs, resources, 
     and services available at the national, State, and local 
     levels that support parent and family involvement in the 
     education of their school-age children.
       Section 2423(d)(2) would require that each recipient use at 
     least 75 percent of its award to support activities that 
     serve areas with large numbers or concentrations of low-
     income families. Currently, recipients are required to use 50 
     percent of their funds to provide services to low-income 
     areas.
       Section 2423(e) would authorize the Secretary to reserve up 
     to 5 percent of the funds appropriated for section 2423 to 
     provide technical assistance to the PIRCs and to carry out 
     evaluations of program activities.
       Section 2423(f) of the ESEA would set out three 
     definitions, taken from current law, for purposes of section 
     2423. The term ``parent education'' would be defined to 
     include parent support activities, the provision of resource 
     materials on child development, parent-child learning 
     activities and child rearing issues, private and group 
     educational guidance, individual and group learning 
     experiences for the parent and child, and other activities 
     that enable the parent to improve learning in the home.
       The term ``Parents as Teachers program'' would be defined 
     as a voluntary childhood parent education program that: is 
     designed to provide all parents of children from birth 
     through age 5 with the information and support that such 
     parents need to give their child a solid foundation for 
     school success; is based on the Missouri Parents as Teachers 
     model, with the philosophy that parents are their child's 
     first and most influential teachers; provides regularly 
     scheduled personal visits with families by certified parent 
     educators; provides regularly scheduled developmental 
     screenings; and provides linkage with other resources within 
     the community to provide services that parents may want and 
     need, except that such services are beyond the scope of the 
     Parents As Teachers program.
       The term ``Home Instruction for Preschool Youngsters 
     program'' would be defined as a voluntary early-learning 
     program for parents with one or more children between the 
     ages of 3 through 5 that provides support, training, and 
     appropriate educational materials necessary for parents to 
     implement a school-readiness, home instruction program for 
     their child. Such a program also includes: group meetings 
     with other parents participating in the program; individual 
     and group learning experiences with the parent and child; 
     provision of resource materials on child development and 
     parent-child learning activities; and other activities that 
     enable the parent to improve learning in the home.
       Section 2423(g) would require each PIRC to submit an annual 
     report on its activities. The report would include at least: 
     the number and types of activities supported by the recipient 
     with program funds; activities supported by the recipient 
     that served areas with high numbers or concentrations of low-
     income families; and the progress made by the PIRC in 
     achieving the goals included in its application.
       Section 2423(h) would prohibit any individual from being 
     required to participate in any parent education program or 
     developmental screening supported by program funds. In 
     addition, PIRCs would be prohibited from infringing on the 
     right of a parent to direct the education of their children. 
     Finally, the requirements of section 444(c) of the General 
     Education Provisions Act, relating to procedures protecting 
     the rights of privacy of students and their families in 
     connection with surveys or data-gathering activities, would 
     apply to PIRCs. All of these protections would be continued 
     from current law.
       Section 2423(i) would authorize the appropriation of such 
     sums as may be necessary for fiscal years 2001 through 2005 
     to carry out the PIRC program.
       Section 2424, Eisenhower Regional Mathematics and Science 
     Education Consortia. Section 2424 of the ESEA would authorize 
     the establishment and operation of the Eisenhower Regional 
     Mathematics and Science Education Consortia. The Eisenhower 
     Consortia are currently authorized under Part C of Title XIII 
     of the ESEA. In addition to updating current law to eliminate 
     outdated or unnecessary provisions and making structural 
     changes, section 2424 would eliminate some of the current 
     authorized uses of funds for the Eisenhower Consortia in 
     order to focus the uses of funds more closely on the 
     program's core purposes. Section 2424 would also authorize 
     the appropriation of such sums as may be necessary for fiscal 
     years 2001 through 2005 to carry out the Eisenhower 
     Consortia.
       Subpart 3--Technology-based technical assistance 
           information dissemination
       Section 2431, Web-based and other information 
     dissemination. Section 2431 of the ESEA would authorize the 
     Secretary to carry out, through grants, contracts, or 
     cooperative agreements, a national system, through the 
     Worldwide Web and other advanced telecommunications 
     technologies, that supports interactive information sharing 
     and dissemination about ways to improve educational practices 
     throughout the Nation. In designing and implementing this 
     proposed information dissemination system, the Secretary 
     would be required to create opportunities for the continuing 
     input of students, teachers, administrators, and other 
     individuals who participate in, or may be affected by, the 
     Nation's educational system.
       The proposed new information dissemination would include 
     information on: (1) stimulating instructional materials that 
     are aligned with challenging content standards; and (2) 
     successful and innovative practices in instruction, 
     professional development, challenging academic content and 
     student performance standards, assessments, effective school 
     management, and such other areas as the Secretary determines 
     are appropriate.
       Under section 2431(a)(3)(A), the Secretary could require 
     the technical assistance providers funded under proposed Part 
     D of Title II of the ESEA (as amended by Title III of the 
     bill), or the educational laboratories and clearinghouses of 
     the Educational Resources Information Center supported under 
     the Educational Research, Development, Dissemination, and 
     Improvement Act, to: (1) provide information (including 
     information on practices employed in the regions or States 
     served by the providers) for use in the proposed information 
     dissemination system; (2) coordinate their activities in 
     order to ensure a unified system of technical assistance; or 
     (3) otherwise participate in the proposed information 
     dissemination system. Under section 2431(a)(3)(B), the 
     Secretary would be required to ensure that these 
     dissemination activities are integrated with, and do not 
     duplicate, the dissemination activities of the Office of 
     Educational Research and Improvement (OERI), and that the 
     public has access, through this system, to the latest 
     research, statistics, and other information supported by, or 
     available from, OERI.
       Section 2431(b) would authorize the Secretary to carry out 
     additional activities, using advanced telecommunications 
     technologies where appropriate, to assist LEAs, SEAs, tribes, 
     and other ESEA recipients in meeting the requirements of the 
     Government Performance and Results Act of 1993. This 
     assistance could include information on measuring and 
     benchmarking program performance and student outcomes.
       Section 2432 would authorize the appropriate of such sums 
     as may be necessary for fiscal years 2001 through 2005 to 
     carry out Subpart 3.
       Subpart 4--National evaluation activities
       Section 2441, national evaluation activities. Section 2441 
     of the ESEA would require the Secretary to conduct, directly 
     or through grants, contracts, or cooperative agreements, such 
     activities as the Secretary determines necessary to: (1) 
     determine what constitutes effective technical assistance; 
     (2) evaluate the effectiveness of the technical assistance 
     and dissemination programs authorized by, or assisted under, 
     Part E of Title II of the ESEA, and the educational 
     laboratories, and clearinghouses of the Educational Resources 
     Information Center, supported under the Educational Research, 
     Development, Dissemination, and Improvement Act, 
     (notwithstanding any other provision of such Act); and (3) 
     increase the effectiveness of those programs.


                   title iii-technology for education

       Section 301. Short Title. Section 301 of the bill would 
     amend section 3101 of the ESEA to change the short title for 
     Title III of the ESEA to the ``Technology For Education 
     Act.''
       Section 302. Findings. Section 302 of the bill would update 
     the findings in section 3111 of the ESEA to reflect progress 
     that has been made in achieving the four national technology 
     goals and identify those areas in which progress still needs 
     to be made.

[[Page 11426]]

       Section 303. Statement of Purpose. Section 303 of the bill 
     would amend section 3112 of the ESEA to better align the 
     purposes of Title III of the ESEA to the national technology 
     goals and the Department's goals for the use of educational 
     technology to improve teaching and learning. The purposes for 
     this title are to: (1) help provide all classrooms with 
     access to educational technology through support for the 
     acquisition of advanced multimedia computers, Internet 
     connections, and other technologies; (2) help ensure access 
     to, and effective use of, educational technology in all 
     classrooms through the provision of sustained and intensive, 
     high-quality professional development that improves teachers' 
     capability to integrate educational technology effectively 
     into their classrooms by actively engaging students and 
     teachers in the use of technology; (3) help improve the 
     capability of teachers to design and construct new learning 
     experiences using technology, and actively engage students in 
     that design and construction; (4) support efforts by SEAs and 
     LEAs to create learning environments designed to prepare 
     students to achieve to challenging State academic content and 
     performance standards through the use of research-based 
     teaching practices and advanced technologies, (5) support 
     technical assistance to State educational agencies, local 
     educational agencies, and communities to to help them use 
     technology-based resources and information systems to support 
     school reform and meet the needs of students and teachers; 
     (6) support the development of applications that make use of 
     such technologies as advanced telecommunications, hand-held 
     devices, web-based learning resources, distance learning 
     networks, and modeling and simulation software; (7) support 
     Federal partnerships with business and industry to realize 
     more rapidly the potential of digital communications to 
     expand the scope of, and opportunities for, learning; (8) 
     support evaluation and research on the effective use of 
     technology in preparing all students to achieve to 
     challenging State academic content and performance standards, 
     and the impact of technology and performance standards, and 
     the impact of technology on teaching and learning; (9) 
     provide national leadership to stimulate and coordinate 
     public and private efforts, at the national, State and local 
     levels, that support the development and integration of 
     advanced technologies and applications to improve school 
     planning and classroom instruction; (10) support the 
     development, or redesign, of teacher preparation programs to 
     enable prospective teachers to integrate the use of 
     technology in teaching and learning; (11) increase the 
     capacity of State and local educational agencies to improve 
     student achievement, particularly that of students in high-
     poverty, low-performing schools; (12) promote the formation 
     of partnerships and consortia to stimulate the development 
     of; and new uses for, technology in teaching and learning; 
     (13) support the creation or expansion of community 
     technology centers that will provide disadvantaged residents 
     of economically distressed urban and rural communities with 
     access to information technology and related training; and 
     (14) help to ensure that technology is accessible to, and 
     usable by, all students, particularly students with 
     disabilities or limited English proficiency.
       Section 304. Prohibition Against Supplanting. Section 304 
     of the bill would repeal section 3113 of the ESEA, which 
     currently contains the definitions applicable to Title III of 
     the ESEA. Definitions would instead be placed in the part of 
     the title to which they apply. In its place, section 304 of 
     the bill would add a new section 3113 to the ESEA that would 
     require a recipient of funds awarded under this title to use 
     that award only to supplement the amount of funds or 
     resources that would, in the absence of such Federal funds, 
     be made available from non-Federal sources for the purposes 
     of the programs authorized under Title III of the ESEA, and 
     not to supplant those non-Federal funds or resources.
     Part A--Federal leadership and national activities
       Section 311. Structure of Part. Section 311 of the bill 
     would make technical changes to Title III of the ESEA to 
     eliminate the current structure of Part A of Title III of the 
     ESEA and add a new heading for Part A, Federal Leadership and 
     National Activities. This section also would repeal the 
     current Product Development program, which has never received 
     funding.
       Section 312. National Long-Range Technology Plan. Section 
     312 of the bill would amend section 3121 of the ESEA, which 
     currently requires the Secretary to publish a national long-
     range technology plan within one year of the enactment of the 
     Improving America's School Act of 1994. Instead, section 
     312(1) of the bill would amend section 3121(a) of the ESEA to 
     require the Secretary to update the national long-range 
     technology plan within one year of the enactment of the bill 
     and to broadly disseminate the updated plan.
       Section 312(2) of the bill would amend section 3121(c) of 
     the ESEA, which establishes the requirements for the national 
     long-range technology plan, by adding the requirements that 
     the plan describe how the Secretary will: promote the full 
     integration of technology into learning, including the 
     creation of new instructional opportunities through access to 
     challenging courses and information that would otherwise not 
     have been available, and independent learning opportunities 
     for students through technology; encourage the creation of 
     opportunities for teachers to develop, through the use of 
     technology, their own networks and resources for sustained 
     and intensive, high-quality professional development; and 
     encourage the commercial development of effective, high-
     quality, cost-competitive educational technology and 
     software.
       Section 313. Federal Leadership. Section 313 of the bill 
     would amend section 3122 of the ESEA, which authorizes a 
     program of Federal leadership in promoting the use of 
     technology in education. Section 313(1) of the bill would 
     amend 3122(a) of the ESEA by eliminating a reference to the 
     United States National Commission on Libraries and 
     Information Systems, and replacing it with the White House 
     Office of Science and Technology Policy, on the list of 
     agencies with which the Secretary consults under this 
     program.
       Section 313(2) of the bill would amend section 3122(b)(1) 
     of the ESEA by removing the reference to the Goals 2000: 
     Educate America Act, which would be repealed by another 
     section of this bill. The National Education Goals would be 
     renamed America's Education Goals and added to the ESEA by 
     section 2 of the bill.
       Section 313(3) of the bill would amend current 3122(c) of 
     the ESEA by eliminating the authority for the Secretary to 
     undertake activities designed to facilitate maximum 
     interoperability of educational technologies. Instead, the 
     Secretary would be authorized to develop a national 
     repository of information on the effective uses of 
     educational technology, including its use of sustained and 
     intensive, high-quality professional development, and the 
     dissemination of that information nationwide.
       Section 314. Repeals; Redesignations; Authorization of 
     Appropriations. Section 314 of the bill would repeal sections 
     3114 (Authorization of Appropriations), 3115 (Limitation on 
     Costs), and 3123 (Study, Evaluation, and Report of Funding 
     Alternatives) of the ESEA. As amended by the bill, an 
     authorization of appropriations section would be included in 
     the part of Title III of the ESEA to which it applies. These 
     changes would also eliminate the current statutory provision 
     that requires that funds be used for a discretionary grant 
     program when appropriations for current Part A of Title III 
     of the ESEA are less than $75 million, and for a State 
     formula grant program when the appropriation exceeds that 
     amount. This provision must currently be overridden in 
     appropriation language each year in order to operate both the 
     Technology Literacy Challenge Fund and the Technology 
     Innovation Challenge Grants program.
       Section 314(b) of the bill would redesignate several 
     sections of the ESEA, and would add new sections 3101 and 
     3104 of the ESEA. Proposed new section 3101 of the ESEA 
     (``National Evaluation of Education Technology'') would 
     require the Secretary to develop and carry out a strategy for 
     an ongoing evaluation of existing and anticipated future uses 
     of educational technology. This national evaluation strategy 
     would be designed to better inform the Federal role in 
     supporting the use of educational technology, in stimulating 
     reform and innovation in teaching and learning with 
     technology, and in advancing the development of more advanced 
     and new types and applications of such technology. As part of 
     this evaluation strategy, the Secretary would be authorized 
     to: conduct long-term controlled studies on the effectiveness 
     of the uses of educational technology; convene panels of 
     experts to identify uses of educational technology that hold 
     the greatest promise for improving teaching and learning, 
     assist the Secretary with the review and assessment of the 
     progress and effectiveness of projects that are funded under 
     this title, and identify barriers to the commercial 
     development of effective, high-quality, cost-competitive 
     educational technology and software; conduct evaluations and 
     applied research studies that examine how students learn 
     using educational technology, whether singly or in groups, 
     and across age groups, student populations (including 
     students with special needs, such as students with limited 
     English proficiency and students with disabilities) and 
     settings, and the characteristics of classrooms and other 
     educational settings that use educational technology 
     effectively; collaborate with other Federal agencies that 
     support research on, and evaluation of, the use of network 
     technology in educational settings; and carry out such other 
     activities as the Secretary determines appropriate. The 
     Secretary would be authorized to use up to 4 percent of the 
     funds appropriated to carry out Title III of the ESEA for any 
     fiscal year to carry out national evaluation strategy in that 
     year.
       Proposed new section 3104 of the ESEA (``Authorization of 
     Appropriations'') would authorize the appropriation of such 
     sums as may be necessary to carry out the national evaluation 
     strategy, national plan, and Federal Leadership activities 
     for fiscal years 2001 through 2005.
     PART B--Special projects
       Section 321. Repeals; Redesignations; New Part. Section 321 
     of the bill would make several structural and conforming 
     changes to

[[Page 11427]]

     Title III of the ESEA. Section 321(a) of the bill would 
     repeal Part B, the Star Schools Program, and Part E, the 
     Elementary Mathematics and Science Equipment Program. Section 
     321(b) of the bill would redesignate current Part C of Title 
     III of the ESEA, Ready-To-Learn Television, as Subpart 2 of 
     Part B of Title III of the ESEA, and redesignate current Part 
     D of Title III of the ESEA, Telecommunications Demonstration 
     Project for Mathematics as Subpart 3 of Part B of Title III 
     of the ESEA.
       Section 321(d) of the bill would add a new Subpart 1, Next-
     Generation Technology Innovation Awards, to Part B of Title 
     III of the ESEA.
       Proposed new section 3211 of the ESEA (``Purpose; Program 
     Authority'') would state, in subsection (a), that it is the 
     purpose of the program to: (1) expand the knowledge base 
     about the use of the next generation of advanced computers 
     and telecommunications in delivering new applications for 
     teaching and learning; (2) address questions of national 
     significance about the next generation of technology and its 
     use to improve teaching and learning; and (3) develop, for 
     wide-scale adoption by SEAs and LEAs, models of innovative 
     and effective applications in teaching and learning of 
     technology, such as high-quality video, voice recognition 
     devices, modeling and simulation software (particularly web-
     based software and intelligent tutoring), hand-held devices, 
     and virtual reality and wireless technologies, that are 
     aligned with challenging State academic content and 
     performance standards. These purposes would focus the 
     projects funded under this proposed new subpart on developing 
     ``cutting edge'' applications of educational technology.
       Proposed new section 3211(b) of the ESEA would authorize 
     the Secretary, through the Office of Educational Technology, 
     to award grants, contracts, or cooperative agreements on a 
     competitive basis to eligible applicants. Proposed new 
     section 3211(c) of the bill would state that those awards 
     could be made for a period of not more than five years.
       Proposed new section 3212 of the ESEA (``Eligibility'') 
     would specify the eligibility and application requirements 
     for the proposed new program. Under proposed new section 
     3212(a) of the ESEA, in order to be eligible to receive an 
     award an applicant would have to be a consortium that 
     includes: (1) at least one SEA or LEA; and (2) at least one 
     institution of higher education, for-profit business, museum, 
     library, other public or private entity with a particular 
     expertise that would assist in carrying out the purposes of 
     the proposed new subpart.
       Under proposed new section 3212(b) of the ESEA, applicants 
     would be required to provide a description of the proposed 
     project and how it would carry out the purposes of the 
     program, and a detailed plan for the independent evaluation 
     of the program, which must include benchmarks to monitor 
     progress toward the specific project objectives.
       Proposed new section 3212(c) of the ESEA would allow the 
     Secretary, when making awards, to set one or more priorities. 
     Priorities could be provided for: (1) applications from 
     consortia that consist of particular types of the members 
     described in proposed new section 3212(a) of the ESEA; (2) 
     projects that develop innovative models of effective use of 
     educational technology, including the development of distance 
     learning networks, software (including software deliverable 
     through the Internet), and online-learning resources; (3) 
     projects serving more than one State and involving large-
     scale innovations in the use of technology in education; (4) 
     projects that develop innovative models that serve 
     traditionally underserved populations, including low-income 
     students, students with disabilities, and students with 
     limited English proficiency; (5) projects in which applicants 
     provide substantial financial and other resources to achieve 
     the goals of the project; and (6) projects that develop 
     innovative models for using electronic networks to provide 
     challenging courses, such as Advanced Placement courses.
       Proposed new section 3213 of the ESEA (``Uses of Funds'') 
     would require award recipients to use their program funds to 
     develop new applications of educational technologies and 
     telecommunications to support school reform efforts, such as 
     wireless and web-based telecommunications, hand-held devices, 
     web-based learning resources, distributed learning 
     environments (including distance learning networks), and the 
     development of educational software and other applications. 
     In addition, recipients would also be required to use program 
     funds to carry out activities consistent with the purposes of 
     the proposed new subpart, such as: (1) developing innovative 
     models for improving teachers' ability to integrate 
     technology effectively into course curriculum, through 
     sustained and intensive, high-quality professional 
     development; (2) developing high-quality, standards-based, 
     digital content, including multimedia software, digital 
     video, and web-based resources; (3) using telecommunications, 
     and other technologies, to make programs accessible to 
     students with special needs (such as low-income students, 
     students with disabilities, students in remote areas, and 
     students with limited English proficiency) through such 
     activities as using technology to support mentoring; (4) 
     providing classroom and extracurricular opportunities for 
     female students to explore the different uses of technology; 
     (5) promoting school-family partnerships, which may include 
     services for adults and families, particularly parent 
     education programs that provide parents with training, 
     information, and support on how to help their children 
     achieve to high academic standards; (6) acquiring 
     connectivity linkages, resources, distance learning networks, 
     and services, including hardware and software, as needed to 
     accomplish the goals of the project; and (7) collaborating 
     with other Department of Education and Federal information 
     technology research and development programs.
       Proposed new section 3214 of the ESEA (``Evaluation'') 
     would authorize the Secretary to: (1) develop tools and 
     provide resources for recipients of funds under the proposed 
     new subpart to evaluate their activities; (2) provide 
     technical assistance to assist recipients in evaluating their 
     projects; (3) conduct independent evaluations of the 
     activities assisted under the proposed new subpart; and (4) 
     disseminate findings and methodologies from evaluations 
     assisted under the proposed new subpart, or other information 
     obtained from such projects that would promote the design and 
     implementation of effective models for evaluating the impact 
     of educational technology on teaching and learning. This 
     evaluation authority would enable the Department to provide 
     projects with tools for evaluation and disseminate the 
     findings from the individual project evaluations.
       Proposed new section 3215 of the ESEA (``Authorization of 
     Appropriations'') would authorize the appropriation of such 
     sums as may be necessary to carry out this part of fiscal 
     years 2001 through 2005.
       Section 322. Ready To Learn Digital Television. Section 322 
     of the bill would amend the subpart heading for Subpart 2 of 
     Part B of Title III of the ESEA (as redesignated by section 
     321(b) of the bill) to reflect advances in technology by 
     replacing the reference to ``television'' with a reference to 
     ``digital television.''
       In addition, section 322 of the bill would amend the 
     provisions of this subpart to reflect the redesignations made 
     by section 321(c) of the bill, and to authorize the 
     appropriation of such sums as may be necessary to carry out 
     this subpart for fiscal years 2001 through 2005.
       Section 323. Telecommunications Program for Professional 
     Development in the Core Content Areas. Section 323(a) of the 
     bill would amend the heading for Subpart 3 of Part B of Title 
     III (as redesignated by section 321(b) of the bill) from the 
     current ``Telecommunications Demonstration Project for 
     Mathematics'' to ``Telecommunications Program for 
     Professional Development in the Core Content Areas.''
       Section 323(b) of the bill would amend section 3231 of the 
     ESEA (as redesignated by section 321(c) of the bill), which 
     currently states the purpose of this part as carrying out a 
     national telecommunications-based demonstration project to 
     improve the teaching of mathematics and to assist elementary 
     and secondary school teachers in preparing all students for 
     achieving State content standards. As amended by section 
     323(b) of the bill, this program would no longer be only a 
     demonstration project, and its purposes would be expanded to 
     assist elementary and secondary school teachers in preparing 
     all students to achieve to challenging State academic content 
     and performance standards through a national 
     telecommunications-based program to improve teaching in all 
     core content areas, not just mathematics.
       Section 323(c) of the bill would amend the application 
     requirements in section 3232 of the ESEA (as redesignated by 
     section 321(c) of the bill) to eliminate references to the 
     program as a demonstration project, update the references to 
     technology, expand the types of entities with which 
     recipients would be required to coordinate their efforts, and 
     make conforming changes.
       Section 323(d) of the bill would amend section 3233 of the 
     ESEA (as redesignated by section 321(c) of the bill) to 
     authorize the appropriation of such sums as may be necessary 
     to carry out this subpart for fiscal years 2001 through 2005.
       Section 324. Community Technology Centers. Section 324 of 
     the bill would add a new Subpart 4, Community Technology 
     Centers, to Part B of Title III of the ESEA.
       Proposed new section 3241 of the ESEA (``Purpose; Program 
     Authority'') would state, in subsection (a), that the purpose 
     of this proposed new subpart is to assist eligible applicants 
     to create or expand community technology centers that will 
     provide disadvantaged residents of economically distressed 
     urban and rural communities with access to information 
     technology and related training and provide technical 
     assistance and support to community technology centers.
       Proposed new section 3241(b) of the ESEA would authorize 
     the Secretary, through the Office of Educational Technology, 
     to award grants, contracts, or cooperative agreements on a 
     competitive basis to eligible applicants to carry out the 
     purposes of the proposed new subpart. The Secretary could 
     make these awards for a period of not more than three years.

[[Page 11428]]

       Proposed new section 3242 of the ESEA (``Eligibility and 
     Application Requirements'') would set out the eligibility and 
     application requirements for the proposed new subpart. Under 
     proposed new section 3242(a) of the ESEA, to be eligible an 
     applicant must: (1) have the capacity to expand significantly 
     access to computers and related services for disadvantaged 
     residents of economically distressed urban and rural 
     communities (who would otherwise be denied such access); and 
     (2) be an entity such as a foundation, museum, library, for-
     profit business, public or private nonprofit organizations, 
     community-based organization, an institution of higher 
     education, an SEA, and LEA, or a consortium of these 
     entities.
       Under the application requirements in proposed new section 
     3242(b) of the ESEA, an applicant would be required to submit 
     an application to the Secretary at such time, and containing 
     such information, as the Secretary may require, and that 
     application must include: (1) a description of the proposed 
     project, including a description of the magnitude of the need 
     for the services and how the project would expand access to 
     information technology and related services to disadvantaged 
     residents of an economically distressed urban or rural 
     community; (2) a demonstration of the commitment, including 
     the financial commitment, of entities such as institutions, 
     organizations, business and other groups in the community 
     that will provide support for the creation, expansion, and 
     continuation of the proposed project, and the extent to which 
     the proposed project establishes linkages with other 
     appropriate agencies, efforts, and organizations providing 
     services to disadvantaged residents of an economically 
     distressed urban or rural community; (3) a description of how 
     the proposed project would be sustained once the Federal 
     funds awarded under this subpart end; and (4) a plan for the 
     evaluation of the program, including benchmarks to monitor 
     progress toward specific project objectives.
       Under proposed new section 3242(c) of the ESEA, the Federal 
     share of the cost of any project funded under the proposed 
     new subpart could not exceed 50 percent, and the non-Federal 
     share of such project may be in cash or in kind, fairly 
     evaluated, including services.
       Proposed new section 3243 of the ESEA (``Uses of Funds'') 
     would describe the required and permissible uses of funds 
     awarded under the proposed new subpart. Under proposed new 
     section 3243(a) of the ESEA, a recipient would be required to 
     use these funds for creating or expanding community 
     technology centers that expand access to information 
     technology and related training for disadvantaged residents 
     of distressed urban or rural communities, and evaluating the 
     effectiveness of the project.
       Under proposed new section 3243(b) of the ESEA, a recipient 
     could use funds awarded under the proposed new subpart for 
     activities that it described in its application that carry 
     out the purposes of this subpart such as: (1) supporting a 
     center coordinator, and staff, to supervise instruction and 
     build community partnerships; (2) acquiring equipment, 
     networking capabilities, and infrastructure to carry out the 
     project; and (3) developing and providing services and 
     activities for community residents that provide access to 
     computers, information technology, and the use of such 
     technology in support of pre-school preparation, academic 
     achievement, lifelong learning, and workforce development job 
     preparation activities.
       Proposed new section 3244 of the Act (``Authorization of 
     Appropriations'') would authorize the appropriation of such 
     sums as may be necessary to carry out the proposed new 
     subpart for each of the fiscal years 2001 through 2005.
     Part C--Preparing tomorrow's teachers to use technology
       Section 331. New Part. Section 331 of the bill would amend 
     Title III of the ESEA by adding a new Part C, Preparing 
     Tomorrow's Teachers To Use Technology.
       Proposed new section 3301 of the ESEA (``Purpose; Program 
     Authority'') would state, in subsection (a), that the purpose 
     of the proposed new part is to assist consortia of public and 
     private entities in carrying out programs that prepare 
     prospective teachers to use advanced technology to foster 
     learning environments conducive to preparing all students to 
     achieve to challenging State and local content and student 
     performance standards.
       Proposed new section 3301(b) of the ESEA would authorize 
     the Secretary, through the Office of Educational Technology, 
     to award grants, contracts, or cooperative agreements on a 
     competitive basis to eligible applicants in order to assist 
     them in developing or redesigning teacher preparation 
     programs to enable prospective teachers to use technology 
     effectively in their classrooms. The Secretary could make 
     these awards for a period of not more than five years.
       Proposed new section 3302 of the ESEA (``Eligibility'') 
     would detail the eligibility, application, and matching 
     requirements for the proposed new part. To be eligible under 
     proposed new section 3302(a), an applicant must be a 
     consortium that includes at least one institution of higher 
     education that offers a baccalaureate degree and prepares 
     teachers for their initial entry into teaching, and at least 
     one SEA or LEA. In addition, each consortium must include at 
     least one of the following entities: an institution of higher 
     education (other than the institution described above); a 
     school or department of education at an institution of higher 
     education; a school or college of arts and sciences at an 
     institution of higher education; a private elementary or 
     secondary school; or a professional association, foundation, 
     museum, library, for-profit business, public or private 
     nonprofit organization, community-based organization, or 
     other entity with the capacity to contribute to the 
     technology-related reform of teacher preparation programs.
       The application requirements in proposed new section 
     3302(b) of the ESEA would require an applicant to submit an 
     application to the Secretary at such time, and containing 
     such information, as the Secretary may require, and that 
     application would be required to include: a description of 
     the proposed project, including how the project would ensure 
     that individuals participating in the project would be 
     prepared to use technology to create learning environments 
     conducive to preparing all students to achieve to challenging 
     State and local content and student performance standards; a 
     demonstration of the commitment, including the financial 
     commitment, of each of the members of the consortium to the 
     proposed project; a demonstration of the active support of 
     the leadership of each member of the consortium for the 
     proposed project; a description of how each member of the 
     consortium would be included in project activities; a 
     description of how the proposed project would be sustained 
     once the Federal funds awarded under this part end; and a 
     plan for the evaluation of the program, which shall include 
     benchmarks to monitor progress toward specific project 
     objectives.
       Proposed new section 3302(c)(1) of the ESEA would limit the 
     Federal share of any project funded under this part to no 
     more than 50 percent of the cost of the project. The non-
     Federal share may be in cash or in kind, except as required 
     under proposed new section 3302(c)(2) of the ESEA, which 
     would limit, to not more than 10 percent of the funds awarded 
     for a project under this part, the amount that may be used to 
     acquire equipment, networking capabilities or infrastructure, 
     and would require that the non-Federal share of the cost of 
     any such acquisition be in cash.
       Proposed new section 3303 of the ESEA (``Uses of Funds'') 
     would establish the required and permissible uses of funds 
     awarded under the proposed new part. Under proposed new 
     section 3303(a) of the ESEA, recipients would be required to: 
     create programs that enable prospective teachers to use 
     advanced technology to create learning environments conducive 
     to preparing all students to achieve to challenging State and 
     local content and student performance standards; and evaluate 
     the effectiveness of the project.
       Under proposed new section 3303(b), recipients would be 
     permitted to use funds for activities such as: developing and 
     implementing high-quality teacher preparation programs that 
     enable educators to learn the full range of resources that 
     can be accessed through the use of technology, integrate a 
     variety of technologies into the classroom in order to expand 
     students' knowledge, evaluate educational technologies and 
     their potential for use in instruction, and help students 
     develop their own digital learning environments; developing 
     alternative teacher development paths that provide elementary 
     and secondary schools with well-prepared, technology-
     proficient educators; developing performance-based standards 
     and aligned assessments to measure the capacity of 
     prospective teachers to use technology effectively in their 
     classrooms; providing technical assistance to other teacher 
     preparation programs; developing and disseminating resources 
     and information in order to assist institutions of higher 
     education to prepare teachers to use technology effectively 
     in their classrooms; and acquiring equipment, networking 
     capabilities, and infrastructure to carry out the project.
       Proposed new section 3304 of the ESEA (``Authorization of 
     Appropriations'') would authorize the appropriation of such 
     sums as may be necessary to carry out the proposed new part 
     for each of the fiscal years 2001 through 2005.
     Part D--Regional, State, and local educational technology 
         resources
       Section 341. Repeal; New Part. Section 341 of the bill 
     would add a new Part D, Regional, State, and Local 
     Educational Technology Resources, to Title III of the ESEA 
     that would consist of two subparts: Subpart 1, the Technology 
     Literacy Challenge Fund (TLCF), and Subpart 2, Regional 
     Technology in Education Consortia (RTECs).
       Proposed new section 3411 of the ESEA (``Purpose'') would 
     state that it is the purpose of the TLCF to increase the 
     capacity of SEAs and LEAs to improve student achievement, 
     particularly that of students in high-poverty, low-performing 
     schools, by supporting State and local efforts to: (1) make 
     effective use of new technologies and technology 
     applications, networks, and electronic resources; (2) utilize 
     research-based teaching practices that are linked to advanced 
     technologies; and (3) promote sustained and intensive, high-
     quality professional development that increases teacher

[[Page 11429]]

     capacity to create improved learning environments through the 
     integration of educational technology into instruction. These 
     purposes would focus program efforts on activities that have 
     been proven to improve teaching and learning.
       Section 342. Allotment and Reallotment. Section 342 of the 
     bill would amend section 3131(a)(2) of the ESEA, which 
     pertains to the allotment and reallotment of TLCF funds. 
     First, for purposes of section 3131 of the ESEA, ``State 
     educational agency'' would be defined to include the Bureau 
     of Indian Affairs (BIA). This change is necessary because the 
     current definition is in section 3113 of the ESEA, which is 
     proposed for repeal in section 3004 of the bill.
       Next, section 342 of the bill would amend section 
     3131(a)(2) of the ESEA by modifying the minimum TLCF State 
     grant amount in two ways. First, the minimum amount would be 
     the lesser of one-half of one percent of the appropriations 
     for TLCF for a fiscal year, or $2,250,000. Second, the new 
     minimum amount would apply in the aggregate to the amount 
     received by the Outlying Areas. Currently, this aggregate 
     minimum amount for the Outlying Areas is accomplished through 
     appropriations language each year.
       Section 343. Technology Literacy Challenge Fund. Section 
     343 of the bill would amend current 3132(a)(2) of the ESEA to 
     require an SEA to award not less than 95 percent of its 
     allocation to eligible local applicants (from which up to 2 
     percent of its total allocation could be used for planning 
     subgrants to LEAs that need assistance in developing local 
     technology plans). An SEA could use the remainder of its 
     allocation for administrative costs and technical assistance. 
     This change is necessary because section 314 of the bill 
     would repeal current 3115 of the ESEA, which limited the 
     amount of any grant that could be used for administrative 
     expenses.
       Section 343 of the bill would also require an SEA to 
     provide a priority for eligible local applicants that are 
     partnerships. (``Eligible local applicant'' is defined in 
     proposed new section 3417 of the ESEA, as added by section 
     348 of the bill.)
       Section 343(3) of the bill would amend 3132(b)(2) of the 
     ESEA, which currently requires SEAs to provide technical 
     assistance in developing applications for program funds to 
     LEAs with high concentrations of poor children and a 
     demonstrated need for such assistance. In addition to this 
     requirement, the amended section 3132(b)(2) of the ESEA would 
     also require that an SEA provide an eligible local applicant 
     with assistance in forming partnerships to apply for program 
     funds and developing performance indicators.
       Section 344. State Application. Section 344 of the bill 
     would completely revise the application requirements for the 
     State formula grant program in section 3133 of the ESEA. As 
     revised, section 3133 of the ESEA would require an SEA to: 
     (1) provide a new or updated State technology plan that is 
     aligned with the State plan or policies for comprehensive 
     standards-based education reform; (2) describe how I will 
     meet the national technology goals; (3) describe its long-
     term strategies for financing educational technology, 
     including how it would use other Federal and non-Federal 
     funds, including E-Rate funds; (4) describe and explain its 
     criteria for identifying an LEA as high-poverty and having a 
     substantial need for technology; (5) describe its goals for 
     using educational technology to improve student achievement; 
     (6) establish performance indicators for each of its goals 
     described in the plan, baseline performance data for the 
     indicators, a timeline for achieving the goals, and interim 
     measures of success toward achieving the goals; (7) describe 
     how it would ensure that grants awarded under this subpart 
     are of sufficient size, scope, and quality to meet the 
     purposes of this subpart effectively; (8) describe how it 
     would provide technical assistance to eligible local 
     applicants and its capacity for providing that assistance; 
     (9) how it would ensure that educational technology is 
     accessible to, and usable by, all students, including 
     students with special needs, such as students who have 
     disabilities or limited English proficiency; and (10) how it 
     would evaluate its activities under the plan. The application 
     requirements would better align the information required from 
     States with the purposes for the program.
       Section 345. Local Uses of Funds. Section 345 of the bill 
     would amend section 3134 of the ESEA, which describes the 
     local uses of funds under the TLCF. These local uses of funds 
     would be: adapting or expanding existing and new applications 
     of technology; providing sustained and intensive, high-
     quality professional development in the integration of 
     advanced technologies into curriculum; enabling teachers to 
     use the Internet to communicate with other teachers and to 
     retrieve web-based learning resources; using technology to 
     collect, manage, and analyze data for school improvement; 
     acquiring advanced technologies with classroom applications; 
     acquiring wiring and access to advanced telecommunications; 
     using web-based learning resources, including those that 
     provide access to challenging courses such as Advanced 
     Placement courses; and assisting schools to use technology to 
     promote parent and family involvement, and support 
     communications between family and school.
       Section 346. Local Applications. Section 346 of the bill 
     would amend section 3135 of the ESEA to make an ``eligible 
     local applicant,'' rather than an LEA, the entity eligible to 
     apply for TLCF subgrants. This change is aligned with the 
     proposed change to target program funds to LEAs with large 
     numbers or percentages of poor children and a demonstrated 
     need for technology, or a consortium that includes such an 
     LEA. Eligible local applicants that are partnerships would 
     also be required to describe the membership of the 
     partnership, their respective roles, and their respective 
     contributions to improving the capacity of the LEA.
       In addition to making several updating and conforming 
     changes, section 346 of the bill would also amend section 
     3135 of the ESEA regarding what must be included in the 
     subgrant application. An applicant would be required to 
     describe how the applicant would use its funds to improve 
     student achievement by making effective use of new 
     technologies, networks, and electronic learning resources, 
     using research-based teaching practices that are linked to 
     advanced technologies, and promoting sustained and intensive, 
     high-quality professional development. This requirement would 
     focus local efforts on activities that have demonstrated the 
     greatest potential for improving teaching and learning.
       In addition, an applicant would also be required to 
     describe: its goals for educational technology, as well as 
     timelines, benchmarks, and indicators of success for 
     achieving the goals; its plan for ensuring that all teachers 
     are prepared to use technology to create improved classroom 
     learning environments; the administrative and technical 
     support it would provide to schools; its plan for financing 
     its local technology plan; how it would use technology to 
     promote communication between teachers; how it would use 
     technology to meet the needs of students with special needs, 
     such as students with disabilities or limited English 
     proficiency; how it will involve parents, public libraries, 
     and business and community leaders in the development of the 
     local technology plan; and if the applicant is a partnership, 
     the members of the partnership and their respective roles and 
     contributions.
       Finally, an applicant would be required to provide an 
     assurance that, before using any funds received under this 
     subpart for acquiring wiring or advanced telecommunications, 
     it would use all the resources available to it through the E-
     Rate. This would ensure that districts were using their E-
     Rate funds, which have more limited uses than TLCF funds, for 
     wiring and telecommunications fees before using TLCF funds 
     for those purposes.
       Section 347. Repeals; Conforming Changes; Redesignations. 
     Section 347 of the bill would repeal current sections 3136 
     and 3137 of the ESEA. Section 3136 of the ESEA currently 
     authorizes the National Challenge Grants for Technology in 
     Education, and its purposes would be accomplished under the 
     Next-Generation Technology Innovation Awards program proposed 
     as the new Subpart 1 of Part C of Title III of the ESEA. 
     Section 3137 of the ESEA contains now outdated evaluation 
     requirements. Section 347 of the bill would also make several 
     conforming changes to, and redesignations of, provisions in 
     Title III of the ESEA.
       Section 348. Definitions; Authorization of Appropriations. 
     Section 348 of the bill would add two new sections to Title 
     III of the ESEA. Proposed new section 3417 of the ESEA 
     (``Definitions'') would define ``eligible local applicant'' 
     and ``low-performing school.'' The definitions would be 
     included to better target funds on high-poverty schools with 
     the greatest need for educational technology.
       An ``eligible local applicant'' would be defined as: (1) an 
     LEA with high numbers or percentages of children from 
     households living in poverty, that includes one or more low-
     performing schools, and has a substantial need for 
     educational technology; or (2) a partnership that includes at 
     least one LEA that meets those requirements and at least one 
     LEA that can demonstrate that teachers in schools served by 
     that agency are using technology effectively in their 
     classrooms; institution of higher education; for-profit 
     organization that develops, designs, manufactures, or 
     produces technology products or services, or has substantial 
     expertise in the application of technology; or public or 
     private non-profit organization with demonstrated experience 
     in the application of educational technology.
       A ``low-performing school'' would be defined as a school 
     identified for school improvement under section 1116(c) of 
     the ESEA, or in which a substantial majority of students fail 
     to meet State performance standards.
       Proposed new section 3418 of the ESEA (``Authorization of 
     Appropriations'') would authorize the appropriation of such 
     sums as may be necessary to carry out this subpart for fiscal 
     years 2001 through 2005.
       Section 349. Regional Technology in Education Consortia. 
     Section 349(a) of the bill would add a new subpart heading 
     and designation, Subpart 2, Regional Technology In Education 
     Consortia (RTECs), to Part B of Title III of the ESEA. This 
     proposed new

[[Page 11430]]

     subpart is based on current section 3141 of the ESEA, as 
     amended by this section of the bill.
       Section 349(b) of the bill would amend section 3141 of the 
     bill in several ways. First, section 349(b)(1) of the bill 
     would amend section 3141(a) of the ESEA to authorize the 
     Secretary to enter into contracts and cooperative agreements, 
     in addition to the Secretary's current authority to award 
     grants, to carry out the purposes of the proposed new 
     subpart. In addition, the priority for various regional 
     entities would be eliminated, although the Secretary would 
     still be required to ensure, to the extent possible, that 
     each geographic region of the United States is served by a 
     project funded under this program.
       Section 349(b)(1)(C) of the bill would add a new section 
     3141(a)(2)(B) of the ESEA that would require the RTECs to 
     meet the generous provisions relating to technical assistance 
     providers contained in proposed new section 2421 of the ESEA. 
     Section 349(b) of the bill would also make several conforming 
     changes and update the references in section 3141 of the 
     ESEA, including updating provisions to reflect recent 
     advances in technology.
       Section 349(b)(2)(B)(ii) of the bill would amend section 
     3141(b)(2)(A) of the ESEA, which currently requires RTECs, to 
     the extent possible, to develop and implement technology-
     specific, ongoing professional development. Section 
     349(b)(2)(B)(ii) of the bill would revise that requirement to 
     require the consortia to develop and implement sustained and 
     intensive, high-quality professional development that 
     prepares educators to be effective developers, users, and 
     evaluators of educational technology. As amended, this 
     section of the ESEA also would require that the professional 
     development is to be provided to teachers, administrators, 
     school librarians, and other education personnel.
       Section 349(b)(2)(B)(iv) of the bill would amend section 
     3141(b)(2)(F) of the ESEA, which currently requires the RTECs 
     to assist colleges and universities to develop and implement 
     preservice training programs for students enrolled in teacher 
     education programs. As amended, this provision would require 
     the RTECs to coordinate their activities in this area with 
     other programs supported under Title III of the ESEA. This 
     coordination is particularly important with respect to the 
     Preparing Tomorrow's Teachers To Use Technology program 
     (proposed new part C of Title III of the ESEA, as added by 
     section 331 of the bill).
       Section 349(b)(2)(B)(v)(I) of the bill would amend 
     3141(b)(2)(G) of the ESEA, which currently requires the RTECs 
     to work with local districts and schools to develop support 
     from parents and community members for educational technology 
     programs. The amendments made by section 349(b)(2)(B)(v) of 
     the bill would require the RTECs to work with districts and 
     schools to increase the involvement and support of parents 
     and community members for educational technology programs.
       Section 349(b)(2)(C)(iv) of the bill would amend section 
     3141(b)(3) of the ESEA by eliminating the requirement that 
     the RTECs coordinate their activities with organizations and 
     institutions of higher education that represent the interests 
     of the region served as such interests pertain to the 
     application of technology in teaching, learning, and other 
     activities.
       Section 349(b)(2)(C)(vi) of the bill would amend section 
     3141(b)(3) of the ESEA by adding a new requirement that each 
     RTEC maintain, or contribute to, a national repository of 
     information on the effective uses of educational technology, 
     including for professional development, and to disseminate 
     the information nationwide.
       Section 349(b)(2)(D) would revise section 3141(b)(4) of the 
     ESEA, which requires the RTECs to coordinate their activities 
     with appropriate entities. As revised, section 3141(b)(4) of 
     the ESEA would require each consortium to: (1) collaborate, 
     and coordinate the services that it provides, with 
     appropriate regional and other entities assisted in whole or 
     in part by the Department; (2) coordinate activities and 
     establish partnerships with organizations and institutions of 
     higher education that represent the interests of the region 
     regarding the application of technology to teaching, 
     learning, instructional management, dissemination, the 
     collection and distribution of educational statistics, and 
     the transfer of student information; and (3) collaborate with 
     the Department and recipients of funding under other 
     technology programs of the Department, particularly the 
     Technology Literacy Challenge Fund and the Next-Generation 
     Technology Innovation Grant Program (as added by sections 343 
     and 341(d) of the bill, respectively), to assist the 
     Department and those recipients as requested by the 
     Secretary.
       Finally, section 349(c) of the bill would redesignate 
     section 3141 of the ESEA as section 3421 of the ESEA, and 
     section 349(d) of the bill would amend Title III of the ESEA 
     by inserting proposed new section 3422 of the ESEA 
     (``Authorization of Appropriations''), which would authorize 
     the appropriation of such sums as may be necessary for this 
     subpart for fiscal years 2001 through 2005.


        TITLE IV--SAFE AND DRUG-FREE SCHOOLS AND COMMUNITIES ACT

       Section 401. Safe and Drug Free Schools and Communities. 
     Section 401 of the bill would amend and restate Title IV of 
     the ESEA, which authorizes assistance to States, LEAs, and 
     other public entities and nonprofit organizations for 
     programs to create and maintain drug-free, safe, and orderly 
     schools, as described below.
       Proposed new section 4001 (``Short Title'') of the ESEA 
     would rename Title IV of the ESEA as the ``Safe and Drug-Free 
     Schools and Communities Act'' to update the short title of 
     ``Safe and Drug-Free Schools and Communities Act of 1994'' in 
     the current law.
       Proposed new section 4002 (``Findings'') of the ESEA would 
     update the findings in section 4002 of the current law to 
     focus on the need for program quality and accountability.
       Proposed new section 4003 (``Purpose'') of the ESEA would 
     revise the statement of purpose in section 4003 of the 
     current law to reflect the following overarching changes 
     proposed in Title IV of the bill: (1) a more focused program 
     emphasis on supporting activities for creating and 
     maintaining drug-free, safe, and orderly environments for 
     learning in and around schools, as compared to the more 
     current, general emphasis on supporting activities to prevent 
     youth from using drugs and engaging in violent behavior any 
     time, anywhere; (2) improved targeting of resources, through 
     the requirement that SEAs award funds competitively to LEAs 
     with a demonstrated need for funds and the highest quality 
     proposed programming, as compared to the current 
     noncompetitive awarding of funds to all LEAS in the State, 
     based on student enrollment; and (3) stronger coordination 
     between programs funded by the Governors and the SEAs, by 
     requiring that programs funded by the Governors directly 
     complement and support LEA programs, and by requiring 
     Governors and SEAs to reserve funds at the State level for 
     joint capacity-building and technical assistance, and 
     accountability services, to improve the effectiveness of, and 
     institutionalize, State and local Safe and Drug-Free Schools 
     and Communities (SDFSC) programs.
       Proposed new section 4004 (``Authorization of 
     Appropriations'') of the ESEA would authorize the 
     appropriation of such sums as may be necessary for each of 
     the fiscal years 2001 through 2005 to carry out proposed new 
     Title IV of the ESEA.
     Part A--State grants for drug and violence prevention 
         programs
       Proposed new section 4111 (``Reservations and Allotments'') 
     of the ESEA would describe the way in which funds would be 
     distributed under this title. Proposed new section 4111(a) 
     would retain the requirements in the current law for the 
     Secretary to reserve, from each fiscal year's appropriation 
     for SDFSC (Safe and Drug-Free Schools and Communities) State 
     grant funds, 1 percent for the Outlying Areas, 1 percent for 
     programs for Indian youth, and 0.2 percent for programs for 
     Native Hawaiians, and would increase the amount of SDFSC 
     State Grant funds the Secretary may reserve each fiscal year 
     for evaluation to $2 million (up from $1 million under the 
     current law) to support more intensive evaluations that are 
     needed to demonstrate program outcomes and effectiveness.
       Proposed new section 4111(a)(2)(A)(i) of the ESEA would 
     prohibit the Outlying Areas from consolidating their SDFSC 
     funds with other Department of Education program funds, as 
     would otherwise be permitted under Insular Areas Consolidated 
     Grant Authority in Title V of P.L. 95-134. This language 
     would ensure that the ESEA and Governor of each Outlying Area 
     can coordinate their SDFSC programs as required elsewhere in 
     this part. Without this prohibition, a Governor or SEA may 
     choose to spend its SDFSC funds on other eligible program(s), 
     making it impossible for the Governor and SEA to meet these 
     SDFSC program coordination requirements. This section would, 
     however, permit the Governor of an Outlying Area to 
     consolidate its SDFSC funds with the Area's SDFSC SEA funds, 
     and allow the Outlying Area to administer both SDFSC funding 
     streams under the statutory requirements applicable to SDFSC 
     SEA programs. This provision would address the reduced 
     program flexibility and increased administrative burden the 
     Outlying Areas may experience from the prohibition in 
     proposed new section 4111(a)(2)(i) of the ESEA.
       Proposed new section 4111(a)(2) would also: (1) explicitly 
     make applicable to the Outlying Areas the same SDFSC 
     requirements concerning authorized programs and activities, 
     applications for funding, and coordination between the 
     Governor and the SEA that are applicable to the States; (2) 
     explicitly make applicable to the Secretary of the Interior 
     the same SDFSC requirements concerning authorized programs 
     and activities for SDFSC programs for Indian youth that are 
     applicable to the States; and (3) authorize SDFSC programs 
     for Native Hawaiians (which are currently authorized under 
     section 4118 of the ESEA) and explicitly make applicable to 
     these programs the same SDFSC requirements concerning 
     authorized programs and activities that are applicable to the 
     States. This section would also delete the language in 
     section 4118 of the ESEA requiring the Governor of the State 
     of Hawaii to recognize organizations eligible for funding 
     under the SDFSC Native Hawaiian set-

[[Page 11431]]

     side, and add language requiring that programs funded under 
     this set-aside by coordinated with the Hawaii SEA.
       Proposed new section 4111(b) of the ESEA would retain the 
     provisions in current law; (1) requiring the Secretary to 
     allocate State grant funds half on the basis of school-aged 
     population, and half on the basis of State shares of ESEA 
     Title I funding for the preceding year; (2) that no State 
     receive less than one-half of one percent of all State grant 
     funding; (3) permitting the Secretary to redistribute to 
     other States, on the basis of the formula in section 
     4111(b)(1), any amount of State grant funds the Secretary 
     determines a State will be unable to use within two year of 
     the initial award; and (4) defining ``State'' and ``local 
     educational agency.''
       Proposed new section 4112 (``State Applications'') of the 
     ESEA would set forth the State grant application procedure 
     for this title. Proposed new section 4112(a) of the ESEA 
     would change the current State grant application requirements 
     to require that the Governor and SEA apply jointly for funds, 
     to ensure increased coordination between the Governor and 
     SEA, consistent with the new program requirements in proposed 
     new sections 4113(b)(4) and 4115(b)(3) of the ESEA.
       This jointly submitted application would contain: (1) a 
     description of how SDFSC State grant funds will be 
     coordinated with other Federal education and drug prevention 
     programs; (2) a list of the State's outcome-based performance 
     indicators for drug and violence prevention that are selected 
     from a core set of indicators to be developed by the 
     Secretary in consultation with State and local officials; and 
     (3) a description of the procedures the State will use to 
     inform its LEAs of the State's performance indicators under 
     this program and for assessing and publicly reporting 
     progress toward meeting those indicators (or revising them as 
     needed), and how the procedures the State will use to select 
     LEAs and other entities for SDFSC State grant funding will 
     support the attainment of the State's results-based 
     performance indicators. These changes would address the 
     program that, under current law, many States have weak goals 
     and objectives for their SDFSC programs that are entirely 
     process-oriented and do not tie strategically to the State's 
     needs in this area.
       The proposed new State grant application would also contain 
     a description of the procedures the SEA will use for 
     reviewing applications and awarding funds to LEAs 
     competitively, based on need and quality as required by 
     proposed new section 4113(c)(2) of the ESEA, as well as a 
     description of the procedures the SEA will use for reviewing 
     applications and awarding funds to LEAs non-competitively, 
     based on need and quality as permitted by section 4113(c)(3) 
     of the ESEA. These changes constitute a significant departure 
     from current law, under which SEAs award funds to LEAs on the 
     basis of student enrollment and on State-determined 
     ``greatest need'' criteria.
       Under proposed new section 4112(a) of the ESEA, the 
     Governor must include in its SDFSC State grant applications a 
     description of the procedures the Governor will use for 
     reviewing applications and awarding funds to eligible 
     applicants competitively, based on need and quality, as 
     required by section 4115(c) of the ESEA. These changes would 
     significantly strengthen the current law, which does not 
     specify any criteria for how Governors must award their funds 
     under this program.
       States would also be required to include in their 
     applications a description of how the SEA and Governor will 
     use the funds reserved under proposed new sections 4113(b) 
     and 4115(b) of the ESEA for coordinated capacity-building, 
     technical assistance, and program accountability services and 
     activities at the State and local levels, including how they 
     will coordinate their activities with law enforcement, 
     health, mental health, and education programs and officials 
     at the State and local levels.
       The proposed new State grant application would add a new 
     requirement for States to describe in their applications how 
     the SEA will provide technical assistance to LEAs not 
     receiving SDFSC State grant funds to improve their programs, 
     consistent with the requirement in proposed new section 
     4113(b)(4)(B)(ii) that, to the extent practicable SEAs and 
     Governors use a portion of the funds they reserve for State-
     level activities to provide capacity building and technical 
     assistance and accountability services to all LEAs in the 
     State, including those that do not receive SDFSC State grant 
     funds. Finally, this proposed new section would retain the 
     assurances in current law that: (1) States develop their 
     applications in consultation and coordination with 
     appropriate State officials and representatives of parents, 
     students, and community-based organizations; and (2) States 
     will cooperate with, and assist the Secretary in conducting 
     national impact evaluations of programs required by proposed 
     new section 4117(a).
       Proposed new section 4112(b) of the ESEA would retain the 
     language in the current law under section 4112(d) requiring 
     the Secretary to use a peer review process in reviewing SDFSC 
     State grant applications.
       Proposed new section (``State and Local Educational Agency 
     Programs'') of the ESEA would describe the SEA and LEA 
     programs to be carried our under this part. Proposed new 
     section 4113(a) of the ESEA would retain the requirement in 
     current law that 80 percent of the funds allocated to each 
     State under section 4111(b) of the ESEA be awarded to SEAs 
     for use by the SEAs and LEAs, with minor changes in language 
     conforming with the revised statement of purpose in proposed 
     new section 4003 of the ESEA that the funds be used to carry 
     out programs and activities that are designed to create and 
     maintain drug-free, safe, and orderly learning environments 
     for learning in and around schools.
       Proposed new section 4113(b) of the ESEA would depart from 
     the current statute by establishing a new authority requiring 
     SEAs to reserve between 10 percent and 20 percent of their 
     allocations under proposed new section 4113(a) for State-
     level activities. Under this new authority, SEAs may use the 
     reserved funds to plan, develop, and implement, jointly with 
     the Governor, capacity building and technical assistance and 
     accountability services to support the effective 
     implementation of local drug and violence prevention 
     activities throughout the State and promote program 
     accountability and improvement. Within this 20 percent cap, 
     but in addition to the 10 percent minimum for State-level 
     activities, SEAs may also use up to 5 percent of their 
     funding (i.e., up to 25 percent of the amount they reserve 
     for State-level activities) for program administration. This 
     increased allowance for SEA State administrative costs is 
     provided to accommodate the increased administrative 
     responsibilities of running a State grant competition under 
     proposed new section 4113(c) of the ESEA, and would provide 
     greater assistance to LEAs for program improvement than under 
     the current law.
       Proposed new section 4113(b)(4)(A) of the ESEA would 
     require SEAs and Governors to jointly use the amount reserved 
     under sections 4113(b)(3) and 4114(b)(3) to plan, develop, 
     and implement capacity building and technical assistance and 
     accountability services designed to support the effective 
     implementation of local drug and violence prevention 
     activities throughout the State, as well as promote program 
     accountability and prevention.
       Proposed new section 4113(b)(4)(B)(i) of the ESEA would add 
     new language to the statute clarifying that the SEA and 
     Governor may carry out the services and activities required 
     under proposed new section 4113(b)(4)(A) directly, or through 
     subgrants or contracts with public and private organizations, 
     as well as individuals.
       Proposed new section 4113(b)(4)(B)(ii) of the ESEA would 
     add new language to the statute requiring that, to the extent 
     practicable, SEAs and Governors use funds under proposed new 
     section 4113(b)(4)(A) to provide capacity building and 
     technical assistance and accountability services and 
     activities to all LEAs in the State, not just those that 
     receive SDFSC State grants, in order to ensure that: (1) LEAs 
     receiving SDFSC funds receive adequate help to implement and 
     institutionalize high-quality programs; and (2) States can 
     provide at least some program assistance to LEAs that will no 
     longer receive SDFSC awards once funding is limited to 50 
     percent of LEAs in each State under the targeting provisions 
     proposed in new section 4113(c)(2)(D) of the ESEA.
       Proposed new section 4113(b)(4)(B)(iii) of the ESEA would 
     permit he SEA and Governor to provide emergency intervention 
     services to schools and communities following a traumatic 
     crisis, such as a shooting or major accident that has 
     disrupted the learning environment.
       Proposed new section 4113(b)(4)(C) of the ESEA would add 
     definitions of ``capacity building'' and ``technical 
     assistance and accountability services'' to clarify the 
     meaning of these terms in the statute.
       Proposed new section 4113(c)(1) of the ESEA would specify 
     that SEAs must use at least 80 percent of their funding for 
     local-level activities, as described in proposed new sections 
     4113(c)(2) and (3), rather than awarding at least 91 percent 
     of their funding to LEAs as is required under current law.
       Proposed new section 4113(c)(2)(A) of the ESEA would 
     require SEAs to use at least 70 percent of their total SDFSC 
     State grant funding for competitive awards to LEAs that the 
     SEA determines have need for assistance, rather than the 
     current law approach of awarding at least 91 percent of their 
     funding to LEAs in the State by formula, based on enrollment 
     (70 percent) and ``greatest need'' (30 percent).
       Proposed new section 4113(c)(2)(B) of the ESEA would make 
     minor wording changes to the nine ``need'' factors in the 
     current statute, and add three additional factors relating to 
     local fiscal capacity to fund drug and violence prevention 
     programs without Federal assistance; the incidence of drug 
     paraphernalia in schools; and the high rates of drug-related 
     emergencies or deaths.
       Proposed new section 4113(c)(2)(C) of the ESEA would depart 
     from the current statute to require SEAs to base their 
     competition under proposed new section 4113(c)(2)(A) on the 
     quality of an LEA's proposed program and how closely it is 
     aligned with the following principles of effectiveness: (1) 
     the LEA's program is based on a thorough assessment of 
     objective data about the drug and violence problems in the 
     schools and communities to be served; (2) the LEA has

[[Page 11432]]

     established a set of measurable goals and objectives aimed at 
     ensuring that all schools served by the LEA have a drug-free, 
     safe, and orderly learning environment, and has designed its 
     program to meet those goals and objectives; (3) the LEA has 
     designed and will implement its programs for youth based on 
     research or evaluation that provides evidence that the 
     program to be used will prevent or reduce drug use, violence, 
     delinquency, or disruptive behavior among youth; and (4) the 
     LEA will evaluate its program periodically to assess its 
     progress toward achieving its goals and objectives, and will 
     use evaluation results to refine, improve, and strengthen its 
     program, and refine its goals and objectives, as needed.
       Proposed new section 4113(c)(2)(D) of the ESEA would 
     require SEAs to make competitive awards under proposed new 
     section 4113(c)(2)(A) to no more than 50 percent of the LEAs 
     in the State, unless the State demonstrates in its 
     application that the SEA can make subgrants to more than 50 
     percent of the LEAs in the State and still comply with 
     proposed new subparagraph (E) of this section.
       Proposed new section 4113(c)(2)(E) of the ESEA would 
     require SEAs to make their competitive awards to LEAs under 
     proposed new section 4113(c)(2) of sufficient size to support 
     high-quality, effective programs and activities that are 
     designed to create safe, disciplined, and drug-free learning 
     environments in schools and that are consistent with the 
     needs, goals, and objectives identified in the State's plan 
     under proposed new section 4112.
       Proposed new section 4113(c)(3)(A) of the ESEA would depart 
     from the current statute to permit SEAs to use up to 10 
     percent of their total SDFSC State grant funding for non-
     competitive awards to LEAs with the greatest need for 
     assistance, as described in proposed new section 
     4113(c)(2)(B), that did not receive a competitive award under 
     section 4113(c)(2)(A). LEAs would be eligible to receive only 
     one subgrant under this paragraph.
       Proposed new section 4113(c)(3)(B) of the ESEA would 
     require, for accountability purposes, that in order for an 
     SEA to make a non-competitive award to an LEA under proposed 
     new section 4113(c)(3)(A), the SEA must assist the LEA in 
     meeting the information requirements under proposed new 
     section 4116(a) of the ESEA pertaining to LEA needs 
     assessment, results-based performance measures, comprehensive 
     safe and drug-free schools plan, evaluation plan, and 
     assurances, and provide continuing technical assistance to 
     the LEA to build its capacity to develop and implement high-
     quality, effective programs consistent with the principles of 
     effectiveness in proposed new section 4113(c)(2)(C)(ii) of 
     the ESEA.
       Proposed new section 4113(d) of the ESEA would provide that 
     LEA awards under section 4113(c) be for a project period not 
     to exceed three years, and require that, in order to receive 
     funds for the second or third year of a project, the LEA 
     demonstrate to the satisfaction of the SEA that the LEA's 
     project is making reasonable progress toward its performance 
     indicators under proposed new section 4116(a)(3)(C) of the 
     ESEA. This proposed new section would also make technical 
     changes to the local allocation formula in current law.
       Proposed new section 4114 (``Local Drug and Violence 
     Prevention Programs'') of the ESEA would describe the local 
     drug and violence prevention services and activities that may 
     be carried out under this title. Proposed new section 4114(a) 
     of the ESEA would require that each LEA that receives SDFSC 
     funding use those funds to support research-based drug and 
     violence prevention services and activities that are 
     consistent with the principles of effectiveness in proposed 
     new section 4113(c)(2)(C)(ii) of the ESEA.
       Proposed new section 4114(b) (``Other Authorized 
     Activities'') of the ESEA would permit an LEA that receives 
     an SDFSC subgrant to use those funds for activities other 
     than research-based programming, so long as the LEA meets the 
     requirements in proposed new section 4114(a), and those 
     additional activities are carried out in a manner that is 
     consistent with the most recent relevant research and with 
     the purposes of this title. Proposed new section 4114(b)(1) 
     of the ESEA would also include an illustrative list of 13 
     such activities.
       Proposed new section 4114(b)(2) of the ESEA would retain 
     the 20 percent cap on SDFSC subgrant funds that LEAs may 
     spend for the acquisition or use of metal detectors and 
     security personnel, but would permit SEAs to waive this cap 
     for an LEA that demonstrates, to the satisfaction of its SEA, 
     in its application for funding under proposed new section 
     4116 of the ESEA, that it has a compelling need to do so.
       Proposed new section 4115 (``Governor's Program'') of the 
     ESEA would establish the Governor's Program. Proposed new 
     section 4115(a) would retain the requirement in the current 
     law that 20 percent of the funds allocated to each State 
     under proposed new section 4111(b) be awarded to the 
     Governor, but require the Governor to use these funds to 
     support community efforts that directly complement the 
     efforts of LEAs to foster drug-free, safe, and orderly 
     learning environments for learning in and around schools.
       Proposed new section 4115(b) of the ESEA would establish a 
     new authority requiring Governors to reserve between 10 
     percent and 20 percent of their allocations under proposed 
     new section 4115(a) for State-level activities to plan, 
     develop, and implement, jointly with the SEA, capacity 
     building, technical assistance, and accountability services 
     to support the effective implementation of local drug and 
     violence prevention activities throughout the State and 
     promote program accountability and improvement, as described 
     in proposed new section 4113(b)(4) of the ESEA. Within this 
     20 percent cap, but in addition to the 10 percent minimum for 
     State-level activities, the Governors could use up to 5 
     percent of their total funding (i.e., up to 25 percent of the 
     amount they reserve for State-level activities) for direct or 
     in direct administrative costs.
       Proposed new section 4115(c) of the ESEA would specify that 
     a Governor must use at least 80 percent of SDFSC State grant 
     funding under proposed new section 4111(b) to make 
     competitive subgrants to community-based organizations, LEAs, 
     and other public entities and private non-profit 
     organizations to support community efforts that directly 
     complement the efforts of LEAs to foster drug-free, safe, and 
     orderly learning environments in and around schools. Proposed 
     new section 4115(c)(1)(B) of the ESEA would require that, to 
     be eligible for a subgrant, an applicant (other than a LEA 
     applying on its own behalf) must include in its application 
     its written agreement with one or more LEAs, or one or more 
     schools within an LEA, to provide services and activities in 
     support of these LEAs or schools, as well as an explanation 
     of how those services and activities will complement or 
     support the LEAs' or schools' efforts to provide a drug-free, 
     safe, and orderly school environment. Proposed new section 
     4115(c)(1)(C) of the ESEA would require a Governor to base 
     the competition for these subgrants on: (1) the quality of 
     the applicant's proposed program and how closely it is 
     aligned with the principles of effectiveness described in 
     section 4113(c)(2)(C)(ii); and (2) on objective criteria, 
     determined by the Governor, on the needs of the schools for 
     LEAs to be served.
       Subgrants made by Governors under proposed new section 
     4115(c) of the ESEA may support community efforts on a 
     Statewide, regional, or local basis and may support the 
     efforts of LEAs and schools that do not receive subgrants. 
     Recipients of these subgrants would use these funds generally 
     to support research-based drug and violence prevention 
     services and activities that are consistent with the 
     principles of effectiveness, and may use subgrant funds for 
     activities other than research-based programming, provided 
     that these additional activities are carried out in a manner 
     that is consistent with the most recent relevant research and 
     with the purposes of this title. Proposed new section 
     4115(c)(2)(B) of the ESEA also includes an illustrative list 
     of 5 such activities.
       Proposed new section 4116 (``Local Applications'') of the 
     ESEA would: (1) retain language in the current statute, with 
     minor technical changes, requiring applicants for subgrants 
     from the SEA to submit an application to the SEA at such 
     time, and include such other information, as the SEA may 
     require; and (2) add a corresponding requirement not in the 
     current statute, requiring applicants for subgrants from the 
     Governor to submit an application to the Governor at such 
     time, and includes such other information, as the Governor 
     may require.
       Proposed new section 4116(a)(2)(A) of the ESEA would retain 
     the current law requirement that LEAs applying for SEA 
     subgrants under proposed new section 4113(c)(2), 4113(c)(3), 
     or 4115(c) of the ESEA develop their applications in 
     consultation with a local or regional advisory council that 
     includes, to the extent possible, representatives of local 
     government, business, parents, students, teachers, public 
     school personnel, mental health service providers, 
     appropriate State agencies, private schools, law enforcement, 
     community-based organizations, and other groups interested 
     in, and knowledgeable about, drug and violence prevention. 
     Proposed new section 4116(a)(2)(B) of the ESEA would add 
     similar consultation requirements for the development of 
     applications by entities other than LEAs seeking subgrants, 
     under the Governor's program authorized by proposed new 
     section 4115(c) of the ESEA.
       Proposed new section 4116(a)(3) of the ESEA would: (1) make 
     technical changes to strengthen the current LEA application 
     requirements for the SEA formula grant program by increasing 
     the emphasis on the applicant's need for assistance and the 
     quality of its proposed programming; and (2) make these 
     strengthened requirements applicable to LEAs seeking 
     subgrants under the proposed new competitive subgrant 
     authority in proposed new section 4113(c)(2) of the ESEA, or 
     the non-competitive subgrant authority in proposed new 
     section 4113(c)(3) of the ESEA, as well as to LEAs that apply 
     to Governors under the subgrant authority in proposed new 
     section 4115(c) of the ESEA.
       Proposed new section 4116(a)(4) of the ESEA would add a 
     requirement that each LEA (or consortium of LEAs, if applying 
     jointly) that applies to its SEA under the competitive 
     subgrant authority in proposed

[[Page 11433]]

     new section 4113(c)(2) of the ESEA, or the non-competitive 
     subgrant authority in proposed new section 4113(c)(3) of the 
     ESEA, include in its application assurances that it: (1) has 
     a policy, consistent with State law, that requires the 
     expulsion of students who posses a firearm at school 
     consistent with the Gun-Free Schools Act; (2) has, or will 
     have, a full- or part-time program coordination whose primary 
     responsibility is planning, designing, implementing, and 
     evaluating the applicant's programs (unless the applicant 
     demonstrates in its application, to the satisfaction of the 
     SEA, that such a program coordinator is not needed); (3) will 
     evaluate its program every two years to assess its progress 
     toward meeting its goals and objectives, and will use the 
     results of its evaluation to improve its program and refine 
     its goals and objectives, as needed; and (4) has, or the 
     schools to be served have, a comprehensive Safe and Drug-Free 
     Schools plan that includes: (a) appropriate and effective 
     discipline policies that prohibit disorderly conduct, the 
     possession of firearms and other weapons, and the illegal 
     use, possession, distribution, and sale of tobacco, alcohol, 
     and other drugs by students, and that mandates predetermined 
     consequences, sanctions, or interventions for specific 
     offenses; (b) school security procedures at school and while 
     students are on the way to and from school which may include 
     the use of metal detectors and the development and 
     implementation of formal agreements with law enforcement 
     officials; (c) early intervention and prevention activities 
     of demonstrated effectiveness designed to create and maintain 
     safe, disciplined, and drug-free environments; (d) school 
     readiness and family involvement activities; (e) improvements 
     to classroom management and school environment, such as 
     efforts to reduce class size or improve classroom discipline; 
     (f) procedures to identify and intervene with troubled 
     students, including establishing linkages with, and referring 
     students to, juvenile justice, community mental heath, and 
     other service providers; (g) activities that connect students 
     to responsible adults in the community, including activities 
     such as after-school or mentoring programs; and (h) a crisis 
     management plan for responding to violent or traumatic 
     incidents on school grounds which provides for addressing the 
     needs of victims, and communicating with parents, the media, 
     law enforcement officials, and mental health service 
     providers.
       Proposed new section 4116(a)(5) of the ESEA would add a 
     requirement that any eligible entity that applies to the 
     Governor for a subgrant under proposed new section 4115(c) 
     include in its application: (1) a description of how the 
     services and activities to be supported will be coordinated 
     with relevant SDFSC State grant programs that are supported 
     by SEAs, including how recipients will share resources, 
     services, and data; (2) a description of how the applicant 
     will coordinate its activities under this part with those 
     implemented under the Drug-Free Communities Act, if any; and 
     (3) an assurance that it will evaluate its program every two 
     years to assess its progress toward meeting its goals and 
     objectives, and will use the results of its evaluation to 
     improve its program and refine its goals and objectives as 
     needed (if the applicant is not an LEA), or the assurances 
     under proposed new section 4116(a)(4) of the ESEA (if the 
     applicant is an LEA.)
       Proposed new section 4116(b) of the ESEA would modify the 
     current requirement that Governors use a peer review process 
     in reviewing local applications for SDFSC subgrants, by 
     giving Governors the flexibility to use other methods to 
     ensure that applications under proposed new section 4116 of 
     the ESEA are funded on the basis of need and quality, while 
     requiring SEA to use a peer review process.
       Proposed new section 4117 (``National Evaluations and Data 
     Collections'') of the ESEA would authorize the Secretary to 
     provide for national evaluations on the quality and impact of 
     programs under this title, make minor technical changes to 
     current law to give the Secretary increased flexibility in 
     meeting the national evaluation and data collection 
     requirements in this section, and add a new requirement for 
     the Secretary and the Attorney General to publish an annual 
     report on school safety.
       Proposed new section 4117(b) of the ESEA would make minor 
     technical changes to the current law to refocus the State 
     reports required by this section on the State's progress 
     toward attaining its performance indicators for achieving 
     drug-free, safe, and orderly learning environments in its 
     schools, consistent with the changes proposed throughout 
     proposed new Part A of Title IV of the ESEA. This section 
     would also add a new requirement for States to report, in 
     such form as the Secretary, in consultation with the 
     Secretary of Health and Human Services, may require, all 
     school-related suicides and homicides within the State, 
     whether at school or at a school sponsored function, or on 
     the way to or from school or a school-sponsored function, 
     within 30 days of the incident. This requirement will enable 
     the Federal Government to collect longitudinal data on this 
     statistic more cost-effectively, and will impose little 
     administrative burden on the States.
       Proposed new section 4117(c)(1)(A) of the ESEA would make 
     minor technical changes to the current law to refocus the 
     local reports required by this section on the LEA's progress 
     toward attaining its performance indicators for achieving 
     drug-free, safe, and orderly learning environments in its 
     schools, consistent with the changes proposed for the 
     corresponding State reports under proposed new section 
     4117(a) of the ESEA, would add a new requirement that the LEA 
     include in this report a statement of any problems the LEA 
     has encountered in implementing its program that warrant the 
     provision of technical assistance by the SEA, to assist the 
     SEA in planning its technical assistance activities. These 
     changes would apply to LEAs that receive SDFSC subgrants 
     through their SEA under proposed new sections 4113(c)(2) or 
     4113(c)(3).
       Proposed new section 4117(c)(1)(B) of the ESEA would add a 
     new requirement that SEAs review the annual LEA reports, and 
     terminate funding for the second or third year of an LEA's 
     program unless the SEA determines that the LEA is making 
     reasonable progress toward meeting its objectives.
       Proposed new section 4117(c)(2) of the ESEA would add new 
     language to the ESEA requiring that Governors' award 
     recipients under proposed new section 4115(c) of the ESEA 
     submit an annual progress report to the Governor and to the 
     public containing the same type of information required for 
     LEA progress reports under proposed new section 4117(c)(1)(A) 
     of the ESEA. The Governor would be required to review the 
     annual progress reports, and to terminate funding for the 
     second or third year of a subgrantee's program unless the 
     Governor determines that the subgrantee is making reasonable 
     progress toward meeting its objectives.
     PART B--National programs
       Proposed new section 4211 (``National Activities'') of the 
     ESEA would authorize national programs. Proposed new section 
     4211(a) of the ESEA would, with only minor changes, authorize 
     the Secretary to use national programs funds for programs to 
     promote drug-free, safe, and orderly learning environments 
     for students at all educational levels, from preschool 
     through the postsecondary level and for programs that promote 
     lifelong physical activity. The Secretary would be authorized 
     to carry out the national programs authorized under proposed 
     new section 4211(a) directly, or through grants, contracts, 
     or cooperative agreements with public and private 
     organizations and individuals, or through agreements with 
     other Federal agencies, and to coordinate with other Federal 
     agencies as appropriate.
       Proposed new section 4211(b)(2) of the ESEA would 
     streamline the list of authorized national programs 
     activities to the following examples: (1) one or more centers 
     to provide training and technical assistance for teachers, 
     school administrators and staff, and others on the 
     identification and implementation of effective strategies to 
     promote safe, orderly, and drug-free learning environments; 
     (2) programs to train teachers in innovative techniques and 
     strategies of effective drug and violence prevention; (3) 
     research and demonstration projects to test innovative 
     approaches to drug and violence prevention; (4) evaluations 
     of the effectiveness of programs funded under this title, and 
     of other programs designed to create safe, disciplined, and 
     drug-free environments; (5) direct services and technical 
     assistance to schools and schools systems, including those 
     afflicted with especially severe drug and violence problems; 
     (6) developing and disseminating drug and violence prevention 
     materials and information in print, audiovisual, or 
     electronic format, including information about effective 
     research-based programs, policies, practices, strategies, and 
     curriculum and other relevant materials to support drug and 
     violence prevention education; (7) recruiting, hiring, and 
     training program coordinators to assist school districts in 
     implementing high-quality, effective, research-based drug and 
     violence prevention programs; (8) the development and 
     provision of education and training programs, curricula, 
     instructional materials, and professional training for 
     preventing and reducing the incidence of crimes or conflicts 
     motivated by bullying, hate, prejudice, intolerance, or 
     sexual harassment and abuse; (9) programs for youth who are 
     out of the education mainstream, including school dropouts, 
     students who have been suspended or expelled from their 
     regular education program, and runaway or homeless children 
     and youth; (10) programs implemented in conjunction with 
     other Federal agencies that support LEAs and communities in 
     developing and implementing comprehensive programs that 
     create safe, disciplined, and drug-free learning environments 
     and promote healthy childhood development; (11) services and 
     activities that reduce the need for suspension and expulsion 
     in maintaining classroom order and discipline; (12) services 
     and activities to prevent and reduce truancy; (13) programs 
     to provide counseling services to troubled youth, including 
     support for the recruitment and hiring of counselors and the 
     operation of telephone help lines; and (14) other activities 
     that meet emerging or unmet national needs consistent with 
     the purposes of this title.
       Proposed new section 4211(c)(1) of the ESEA would authorize 
     the Secretary to carry out programs for students that promote 
     lifelong physical activity directly, or through grants, 
     contracts, or cooperative

[[Page 11434]]

     agreements with public and private organizations and 
     individuals, or through agreements with other Federal 
     agencies, and to coordinate with the Centers for Disease 
     Control and Prevention, the President's Council on Physical 
     Fitness, and other Federal agencies as appropriate. Such 
     programs could include: conducting demonstrations of school-
     based programs that promote lifelong physical activity, with 
     a particular emphasis on physical education programs that are 
     a part of a coordinated school health programs; training, 
     technical assistance, and other activities to encourage 
     States and LEAs to implement sound school-based programs that 
     promote lifelong physical activity; and activities designed 
     to build State capacity to provide leadership and strengthen 
     schools' capabilities to provide school-based programs that 
     promote lifelong physical activity.
       Proposed new section 4211(d) of the ESEA would retain the 
     requirement in the current statute that the Secretary use a 
     peer review process in reviewing applications for funds under 
     proposed new section 4211(a) of the ESEA.
     Part C--School emergency response to violence
       Proposed new section 4311 (``Project SERV'') of the ESEA 
     would authorize Project SERV, a program designed to provide 
     education-related services to LEAs in which the learning 
     environment has been disrupted due to a violent or traumatic 
     crisis, such as a shooting or major accident. The Secretary 
     would be authorized to carry out Project SERV directly, 
     through contracts, grants, or cooperative agreements with 
     public and private organizations, agencies, and individuals, 
     or through agreements with other Federal agencies.
       Under proposed new section 4311(b) of the ESEA, Project 
     SERV would provide: (1) assistance to school personnel in 
     assessing a crisis situation, including assessing the 
     resources available to the LEA and community in response to 
     the situation, and developing a response plan to coordinate 
     services provided at the Federal, State, and local level; (2) 
     mental health crisis counseling to students and their 
     families, teachers, and others in need of such services; (3) 
     increased school security; (4) training and technical 
     assistance for SEAs and LEAs, State and local mental health 
     agencies, State and local law enforcement agencies, and 
     communities to enhance their capacity to develop and 
     implement crisis intervention plans; (5) services and 
     activities designed to identify and disseminate the best 
     practices of school- and community-related plans for 
     responding to crises; and (6) other needed services and 
     activities that are consistent with the purposes of Project 
     SERV.
       Proposed new section 4311(b) of the ESEA would require the 
     Secretary of Education, in consultation with the Attorney 
     General, the Secretary of Health and Human Services, and the 
     Director of the Federal Emergency Management Agency, to 
     establish criteria and application requirements as may be 
     needed to select which LEAs are assisted under Project SERV, 
     and permit the Secretary to establish reporting requirements 
     for uniform data and other information from all LEAs assisted 
     under Project SERV.
       Proposed new section 4311(c) of the ESEA would require the 
     establishment of a Federal Coordinating Committee on school 
     crises comprised of the Secretary (who shall serve as chair 
     of the Committee), the Attorney General, the Secretary of 
     Health and Human Services, the Director of the Federal 
     Emergency Management Agency, the Director of the Office of 
     National Drug Control Policy, and such other members as the 
     Secretary shall determine. This committee would be charged 
     with coordinating the Federal responses to crises that occur 
     in schools or directly affect the learning environment in 
     schools.
     Part D--Related provisions
       Proposed new section 4411 (``Gun-Free Schools Act'') of the 
     ESEA would authorize the Gun-Free Schools Act as proposed new 
     Part D of Title IV of the ESEA because of its close 
     relationship with the SDFSC program. The Gun-Free Schools Act 
     is currently authorized under Part F of Title XIV of the 
     ESEA.
       Proposed new section 4411(b) of the ESEA would continue, 
     with minor technical changes, the current requirement that 
     each State receiving Federal funds under the ESEA have in 
     effect a State law requiring LEAs to expel from school, for a 
     period of not less than one year, a student who is determined 
     to have possessed a firearm at school under the jurisdiction 
     of the LEA in that State, and that such State law allow the 
     chief administering officer of that LEA to modify the 
     expulsion requirement for a student on a case-by-case basis. 
     It would also define the term `firearm' as that term is 
     defined in section 921 of title 18, United States Code (which 
     includes bombs).
       Proposed new section 4411 of the ESEA would contain: (1) a 
     special rule that the provisions of this section be construed 
     in a manner consistent with the Individuals with Disabilities 
     Education Act; (2) local reporting requirements requiring 
     each LEA requesting assistance from the SEA under the ESEA to 
     provide to the State in its application: (a) an assurance 
     that such LEA is in compliance with the State law required by 
     proposed new section 4411(b); (b) a description of the 
     circumstances surrounding any expulsions imposed under the 
     State law required by proposed new section 4411(b), including 
     the name of the school concerned, the number of students 
     expelled from such school (disaggregated by gender, race, 
     ethnicity, and educational level); and (c) the type of 
     weapons concerned; (3) the number of students referred to the 
     criminal justice or juvenile justice system as required in 
     section 4412(a)(1), and the instances in which the chief 
     administering officer of an LEA modified the expulsion 
     requirement described in section 4411(b)(1) on a case-by-case 
     basis; and (4) a requirement that each State report the 
     information described in proposed new section 4411(d) to the 
     Secretary on an annual basis.
       Proposed new section 4412 (``Local Policies'') of the ESEA 
     would restate, with minor technical changes, the current 
     prohibition against ESEA funds being awarded to any LEA 
     unless it has a policy ensuring referral to the criminal 
     justice or juvenile delinquency system of any student who 
     possesses a firearm at a school served by such agency. It 
     would also add two new additional requirements that no funds 
     may be made available under the ESEA to any LEA unless: (1) 
     it has a policy ensuring that a student who possesses a 
     firearm at school is referred to a mental health professional 
     for assessment as to whether he or she poses an imminent 
     threat of harm to himself, herself, or others and needs 
     appropriate mental health services before readmission to 
     school; and (2) it has a policy that a student who possesses 
     a firearm at school who has been determined by a mental 
     health professional to pose an imminent threat of harm to 
     himself, herself, or others receive, in addition to 
     appropriate services under section 11206(9) of the ESEA, 
     appropriate mental health services before being permitted to 
     return to school.
       Proposed new section 4412(b) of the ESEA would restate the 
     current Gun-Free Schools Act requirement that proposed new 
     section 4412 be construed in a manner consistent with the 
     Individuals with Disabilities Education Act, and proposed new 
     section 4413(c) of the ESEA would restate the current 
     definitions of the terms ``firearm'' and ``school.''
       Proposed new section 4413 (``Materials'') of the ESEA would 
     restate the current requirement that drug prevention programs 
     supported under Title IV of the ESEA convey a clear and 
     consistent message that the illegal use of alcohol and other 
     drugs is wrong and harmful.
       Proposed new section 4413(b) of the ESEA would continue, 
     with minor changes, the current law provision that the 
     Secretary shall not prescribe the use of particular curricula 
     for programs under Title IV of the ESEA, but may evaluate and 
     disseminate information about the effectiveness of such 
     curricula and programs.
       Proposed new section 4414 (``Prohibited Uses of Funds'') of 
     the ESEA would restate the current prohibition against the 
     use of Title IV ESEA funds for: (1) construction (except for 
     minor remodeling needed to accomplish the purposes of this 
     part; and (2) medical services, drug treatment or 
     rehabilitation, except for pupil services or referral to 
     treatment for students who are victims of, or witnesses to, 
     crime or who use alcohol, tobacco, or drugs.
       Proposed new section 4415 (``Drug-Free, Alcohol-Free, and 
     Tobacco-Free Schools'') of the ESEA would add a new 
     requirement that each SEA and LEA that receives Title IV, 
     ESEA funds have a policy that prohibits possession or use of 
     tobacco, and the illegal use of drugs or alcohol, in any 
     form, at any time, and by any person, in school buildings, on 
     school grounds, or at any school-sponsored event. Each LEA 
     requesting assistance under the ESEA must include in its 
     application for funding an assurance that it is in compliance 
     with this new requirement, and each SEA would be required to 
     report annually to the Secretary if any of its LEAs is not in 
     compliance with this new requirement.
       Proposed new section 4416 (``Prohibition on Supplanting'') 
     of the ESEA would require that funds under this title be used 
     to increase the level of State, local, and other non-Federal 
     funds that would, in the absence of funds under this title, 
     be made available for programs and activities authorized 
     under this title, and in no case to supplant such State, 
     local, and other non-Federal funds.
       Proposed new section 4417 (``Definitions of Terms'') of the 
     ESEA would restate the current law definitions for the terms 
     ``drug and violence prevention'' and ``hate crime,'' and 
     definitions for the terms ``drug treatment'' and ``drug 
     rehabilitation'' and ``medical services.''


    Title V--promoting equity, excellence, and public school choice

       Among other things, proposed new Title V of the Educational 
     Excellence for All Children Act of 1999 would: (1) improve 
     the Magnet Schools Assistance program by adding emphasis on 
     projects that consider the diversity of the student 
     populations and that have the capacity to continue after the 
     Federal grant has run out; (2) reauthorize the Women's 
     Educational Equity program, currently in Part B of Title V of 
     the ESEA, but move it to Part D of Title V of the ESEA; (3) 
     repeal the Assistance to Address School Dropout Problems 
     program, currently in Part C

[[Page 11435]]

     of Title V of the ESEA; (4) move Charter Schools, from Part C 
     of Title X of the ESEA, to Part B of Title V of the ESEA; and 
     (5) add a new initiative, ``Options: Opportunities to Improve 
     Our Nation's Schools'', to be new Part C of that Title that 
     would provide a flexible authority to support SEAs and LEAs 
     in experimenting with different kinds of public elementary 
     and secondary schools, such as worksite and college-based 
     schools.
       Section 501. Renaming the Title. Section 501 of the bill 
     would change the name of Title V of the ESEA to ``Promoting 
     Equity, Excellence, and Public School Choice''.


                        magnet school assistance

       Section 502. Findings. Section 502 of the bill would amend 
     Part A (Magnet School Assistance) of Title V of the ESEA. 
     Section 502(a) of the bill would make editorial changes to, 
     and update, section 5101 of the ESEA, the findings for the 
     Magnet School Assistance Program.
       Section 502(b) of the bill would amend section 5102(3) of 
     the ESEA (Statement of Purpose) to clarify that the purpose 
     of providing financial assistance to develop and design 
     innovative educational methods and practices is to promote 
     diversity and increase choices in public elementary and 
     secondary schools and educational programs.
       Section 502(c) of the bill would amend section 
     5106(b)(1)(D) of the ESEA (Information and Assurances), a 
     part of the application requirements, to eliminate reference 
     to the Goals 2000: Educate America Act and to make an 
     editorial change.
       Section 502(d) of the bill would amend section 5107 of the 
     ESEA (Priority) to eliminate the current priorities for 
     greatest need and new, or significantly revised, projects. 
     These priorities are not well defined and have not helped to 
     determine which grant applications are most deserving. 
     Section 502(d) would also add a new priority for projects 
     that propose activities, which may include professional 
     development, that will build local capacity to operate the 
     magnet program once Federal assistance has ended.
       Section 502(e) of the bill would amend section 5108(a) of 
     the ESEA (Uses of Funds) to: (1) revise paragraph (3) to 
     allow for the payment, or subsidization of the compensation, 
     of elementary and secondary school teachers who are certified 
     or licensed by the State, and instructional staff who have 
     expertise and professional skills necessary for the conduct 
     of programs in magnet schools or who demonstrate knowledge, 
     experience, or skills in the relevant field of expertise; and 
     (2) allow grantees to use funds for activities, including 
     professional development, that will build the applicant's 
     capacity to operate the magnet program once Federal 
     assistance has ended.
       Section 502(f) of the bill would repeal section 5111 of the 
     ESEA (Innovative Programs). Activities are subsumed under the 
     new Public School Choice program.
       Section 502(g) of the bill would redesignate current 
     section 5112 of the ESEA (Evaluation, Technical Assistance, 
     and Dissemination) as section 5111, and incorporate its 
     requirements into proposed new section (``Evaluation, 
     Technical Assistance, and Dissemination'') that would 
     authorize the Secretary to reserve not more than five percent 
     (rather than two percent) of appropriated funds in any fiscal 
     year to evaluate magnet schools programs, as well as provide 
     technical assistance to applicants and grantees and collect 
     and disseminate information on successful magnet school 
     programs. Section 502(g) of the bill would also require each 
     evaluation, in addition to current items, to address the 
     extent to which magnet school programs continue once grant 
     assistance under this part ends.
       Section 502(h) of the bill would amend section 5113(a) of 
     the ESEA (Authorization) to authorize such sums as may be 
     necessary for fiscal year 2001 and for each of the four 
     succeeding fiscal years to be appropriated to carry out the 
     part. Section 501(h) of the bill would also redesignate 
     section 5113 as section 5112.


                       women's educational equity

       Section 503. Amendments to the Women's Educational Equity 
     Program. Section 503(a)(1)(A) of the bill would amend section 
     5201(a) of the ESEA (Short Title) to update and change the 
     short title from the ``Women's Educational Equity Act of 
     1994'' to the ``Women's Educational Equity Act.''
       Section 503(a)(1)(B) of the bill would amend section 
     5201(b) of the ESEA (Findings) to make it clear, in paragraph 
     (3)(B), that classroom textbooks and other educational 
     materials continue not to reflect sufficiently the 
     experiences, achievements, or concerns of women and girls. 
     Little progress has been made in this area since 1994. 
     Section 5201(b) of the ESEA would also be amended by slightly 
     editing paragraph (3)(C) and adding a recent finding to that 
     paragraph that girls are dramatically underrepresented in 
     higher-level computer science courses.
       Section 503(a)(2)(A) of the bill would amend section 5204 
     of the ESEA (Applications) to change several internal section 
     references to conform section numbers to the part 
     redesignation and to clarify that the application 
     requirements in which these references appeal apply only to 
     implementation grants. Section 503(a)(2)(B) of the bill would 
     amend section 5204(b)(2) of the ESEA to change a reference to 
     ``the National Education Goals'' to ``America's Education 
     Goals.'' Section 503(a)(2)(C) of the bill would eliminate 
     section 5204(4) of the ESEA, which requires an application 
     description of how program funds would be used in a 
     consistent manner with the School-to-Work Opportunities Act 
     of 1994. The School-to-Work Opportunities Act sunsets in 
     2001, and this reference will be obsolete. Paragraphs (5) 
     through (7) in the section would be redesignated.
       Section 503(a)(3) of the bill would conform a section 
     reference to a later redesignation.
       Section 503(a)(4) of the bill would repeal section 5206 of 
     the ESEA (Report). The report required by this section will 
     be submitted soon, satisfying the requirement and making it 
     obsolete.
       Section 503(a)(5) of the bill would amend section 5207 of 
     the ESEA (Administration) by eliminating subsection (a), 
     requiring the Secretary to conduct an evaluation of materials 
     and programs developed under the program and to submit a 
     report to Congress by January 1, 1998. Congress did not 
     provide funding for the mandated evaluation, and the report 
     was not done.
       Section 503(a)(6) of the bill would amend section 5208 of 
     the ESEA to authorize appropriations of such sums as may be 
     necessary for fiscal year 2001 and for each of the four 
     succeeding fiscal years to carry out this part. Because the 
     appropriation for the Women's Educational Equity program has 
     been small in recent years, using two thirds of this 
     appropriation for local implementation grants (rather than 
     national research and development grants) has not been the 
     most effective and development grants) has not been the most 
     effective use of program resources.
       Section 503(b) of the bill would redesignate Part B of 
     Title V of the ESEA as Part D of the Title and redesignate 
     sections 5201, 5202, 5203, 5204, 0505, 5207, and 5208 of the 
     ESEA as sections 5401, 5402, 5403, 5404, 5405, 5406, and 
     5407, respectively.


             assistance to address school dropout problems

       Section 504. Repeal of the Assistance to Address School 
     Dropout Problems Program. Section 504 of the bill would 
     repeal the ``Assistance to Address School Dropout Problems'' 
     program in Part C of Title V of the ESEA.


                         public charter schools

       Section 505. Redesignation of the Public Charter Schools 
     Program. Section 505 of the bill would redesignate the Public 
     Charter Schools Program, which is currently Part C of Title X 
     of the ESEA, as Part B of Title V of the ESEA. Section 505 
     would also make necessary conforming changes to carry out the 
     redesignation.


         OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S SCHOOLS

       Section 506. Options: Opportunities to Improve Our Nation's 
     Schools. Section 506 of the bill would amend Title V of the 
     ESEA to add a proposed new Part C (``Options: Opportunities 
     to Improve Our Nation's Schools'') that would authorize a 
     flexible, competitive grant program to help SEAs and LEAs 
     provide innovative, high-quality public public school choice 
     programs.
       Proposed new section 5301 of the ESEA would set forth the 
     findings of the proposed new part and state that its purpose 
     is to identify and support innovative approaches to high-
     quality public school choice by providing financial 
     assistance for the demonstration, development, 
     implementation, and evaluation of, and dissemination of 
     information about, public school choice projects that 
     stimulate educational innovation for all public schools and 
     contribute to standards-based school reform efforts.
       Proposed new section 5302(a) of the ESEA would authorize 
     the Secretary, from funds appropriated under section 5305(a) 
     and not reserved under section 5305(b), to make grants to 
     SEAs and LEAs to support programs that promote innovative 
     approaches to high-quality public school choice. Proposed new 
     section 5302(b) of the ESEA would prohibit grants under this 
     part from exceeding three years.
       Proposed new section 5303(a) of the ESEA would authorize 
     funds under the part to be used to demonstrate, develop, 
     implement, evaluate, and disseminate information on 
     innovative approaches to broaden public school choice. 
     Examples of such approaches at the school, district, and 
     State levels would be: (1) inter-district approaches to 
     public school choice, including approaches that increase 
     equal access to high-quality educational programs and 
     diversity in schools; (2) public elementary and secondary 
     programs that involve partnerships with institutions of 
     higher education and that are located on the campuses of 
     those institutions; (3) programs that allow students in 
     public secondary schools to enroll in postsecondary courses 
     and to receive both secondary and postsecondary academic 
     credit; (4) worksite satellite schools, in which SEAs or LEAs 
     form partnerships with public or private employers, to create 
     public schools at parents' places of employment; and (5) 
     approaches to school desegregation that provide students and 
     parents choice through strategies other than magnet schools.
       Proposed new section 5303(b) of the ESEA would require that 
     funds under this part: (1) supplement, and not supplant, non-
     federal funds expended for existing programs; (2) not

[[Page 11436]]

     be used for transportation; and (3) not be used to fund 
     projects that are specifically authorized under Part A or B 
     of the title.
       Proposed new section 5304(a) of the ESEA would require a 
     SEA or LEA desiring to receive a grant under this part to 
     submit an application to the Secretary, in such form and 
     containing such information, as the Secretary may require. 
     Each application would be required to include a description 
     of the program for which funds are sought and the goals for 
     such program, a description of how the program funded under 
     this part will be coordinated with, and will complement and 
     enhance, programs under other related Federal and non-federal 
     projects, and, if the program includes partners, the name of 
     each partner and a description of its responsibilities. Also, 
     each application would be required to include a description 
     of the policies and procedures the applicant will use to 
     ensure its accountability for results, including its goals 
     and performance indicators, and that the program is open and 
     accessible to, and will promote high-academic standards for, 
     all students. This will help ensure broad access to high-
     quality schools, while allowing, for example, public-private 
     partnerships to create public worksite schools that allow 
     children of employees at the worksite to attend such a 
     school. The Secretary would be required to give a priority to 
     applications for projects that would serve high-poverty LEAs, 
     and would be authorized to give a priority to applications 
     demonstrating that the applicant will carry out its project 
     in partnership with one or more public and private agencies, 
     organizations, and institutions, including institutions of 
     higher education and public and private employers.
       Proposed new section 5305(a) of the ESEA would authorize 
     such sums as may be necessary for fiscal year 2001 and for 
     each of the four succeeding fiscal years to carry out the 
     part. Proposed new section 5305(b) of the ESEA would, from 
     amounts appropriated for any fiscal year, authorize the 
     Secretary to reserve not more than five percent to carry out 
     evaluations, provide technical assistance, and disseminate 
     information. Proposed new section 5305(c) of the ESEA would 
     authorize the Secretary to use funds reserved under 
     subsection (b) to carry out one or more evaluations of 
     programs assisted under this part. Those evaluations would, 
     at a minimum, address: (1) how and the extent to which the 
     programs supported with funds under the part promote 
     educational equity and excellence; and (2) the extent to 
     which public schools of choice supported with funds under the 
     part are held accountable to the public, effective in 
     improving public education, and open and accessible to all 
     students.


                     title vi--class-size reduction

       Section 601, class-size [ESEA, Title VI]. section 601 of 
     the bill would replace Title VI of the ESEA with a multi-year 
     extension of the 1-year initiative, enacted in the 
     Department's appropriations Act for fiscal year 1999, to help 
     States and LEAs improve educational outcomes through reducing 
     class sizes in the early grades, as follows:
       ESEA, Sec. 6001, findings. Section 6001 of the ESEA would 
     set out 8 findings in support of the new Title VI.
       ESEA, Sec. 6002, purpose. Section 6002 of the ESEA would 
     provide that the purpose of Title VI is to help States and 
     LEAs recruit, train, and hire 100,000 additional teachers, in 
     order to: (1) reduce class sizes nationally, in grades 1 
     through 3, to an average of 18 students per regular 
     classroom; and (2) improve teaching in the early grades so 
     that all students can learn to read independently and well by 
     the end of the third grade.
       ESEA, Sec. 6003, authorization of appropriations. Section 
     6003 of the ESEA would authorize the appropriations of such 
     sums as may be necessary to carry out Title VI for fiscal 
     years 2001 through 2005.
       ESEA, Sec. 6004, allocations to States. Section 6004(a) of 
     the ESEA would direct the Secretary to reserve a total of not 
     more than 1 percent of each year's appropriation for Title VI 
     to make payments, on the basis of their respective needs, to 
     the several outlying areas and to the Secretary of the 
     Interior for activities in schools operated or supported by 
     the Bureau of Indian Affairs (BIA).
       After reserving funds for the outlying areas and the BIA, 
     section 6004(b) would direct the Secretary to allocate the 
     remaining amount among the States on the basis of their 
     respective shares under Part A of Title I of the ESEA or 
     under Title II of the ESEA, whichever was greater, for the 
     previous fiscal year. Because these allocations would exceed 
     the amount available, they would then be proportionately 
     reduced. If a State chooses not to participate in the 
     program, or fails to submit an approvable application, the 
     Secretary would reallocate that State's allocation to the 
     remaining States.
       ESEA, Sec. 6005, applications. Section 6005(a) of the ESEA 
     would require the SEA of each State desiring to receive a 
     Title VI grant to submit an application to the Secretary.
       Subsection (b) would require each application to include: 
     (1) the State's goals for using program funds to reduce 
     average class sizes in regular classrooms in grades 1 through 
     3; (2) a description of the SEA's plan for allocating program 
     funds within the State; (3) a description of how the State 
     will use other funds, including other Federal funds, to 
     reduce class sizes and improve teacher quality and reading 
     achievement within the State; and (4) an assurance that the 
     SEA will submit such reports and information as the Secretary 
     may reasonably require.
       Subsection (c) would direct the Secretary to approve a 
     State's application if it meets the requirements of 
     subsections (a) and (b) and holds reasonable promise of 
     achieving the program's purposes.
       ESEA, Sec. 6006, within-State allocations. Section 6006(a) 
     of the ESEA would permit participating States to reserve up 
     to one percent of each year's Title I allocation for the cost 
     of administering the program, and direct them to distribute 
     all remaining funds to LEAs. A State would distribute 80 
     percent of its allocation on the basis of the relative number 
     of children from low-income families in LEAs, and the 
     remaining 20 percent on the basis of school-age children 
     enrolled in public and private nonprofit schools in LEAs.
       Subsection (b) would provide for the reallocation of an 
     LEA's award to other LEAs if it chooses not to participate or 
     fails to submit an approvable application.
       ESEA, Sec. 6007, local applications. Section 6007 of the 
     ESEA would require each LEA that wishes to receive Title VI 
     funds to submit an application to its SEA that describes its 
     program to reduce class size by hiring qualified teachers.
       ESEA, Sec. 6008, uses of funds. Section 6008(a) of the ESEA 
     would permit each participating LEA to use up to 3 percent of 
     its subgrant for the costs of administering its Title VI 
     program.
       Subsection (b) would permit each LEA to use up to a total 
     of 15 percent of each year's Title VI funds to: (1) assess 
     new teachers for their competency in content knowledge and 
     teaching skills; (2) assist new teachers to take any tests 
     required to meet State certification requirements; and (3) 
     provide professional development to teachers.
       Subsection (c) would require each LEA to use the rest of 
     its Title IV funds to recruit, hire, and train certified 
     teachers for the purpose of reducing class size in grades 1 
     through 3 to 18 children.
       Subsection (d) would prohibit an LEA from using its Title 
     VI funds to increase the salary of, or to provide benefits 
     to, a teacher who it already employs (or has employed).
       Subsection (e) would permit an LEA that has already reduced 
     class size in grades 1 through 3 to 18 or fewer children to 
     use its Title VI funds to make further class-size reductions 
     in grades 1 through 3, reduce class sizes in other grades, or 
     for activities, including professional development, to 
     improve teacher quality.
       Subsection (f) would permit and LEA whose subgrant is too 
     small to pay the starting salary for a new teacher to use its 
     subgrant funds to form a consortium with one or more other 
     LEAs for the purpose of reducing class size; to help pay the 
     salary of a full-time or part-time teacher hired to reduce 
     class size; or, if the subgrant is less than $10,000, for 
     professional development.
       ESEA, Sec. 6009, cost-sharing requirement. Section 6009(a) 
     of the ESEA would allow program funds to pay the full cost of 
     local programs under the Act in LEAs with child-poverty rates 
     greater than 50 percent. The maximum Federal share for LEAs 
     with child-poverty rates below 50 percent would be 65 
     percent.
       Subsection (b) would require an LEA to provide the non-
     Federal shares of a project through cash expenditures from 
     non-Federal sources. However, an LEA operating one or more 
     schoolwide programs under section 1114 of the ESEA could use 
     funds under Part A of Title I of that Act to pay the non-
     Federal share of activities under this program that benefit 
     those schoolwide programs, so long as the LEA meets the Title 
     I requirement to ensure that services provided with State and 
     local funds in Title I schools are at least comparable to 
     services provided with State and local funds in non-Title I 
     schools. This option would not, however, be available with 
     respect to schools operating schoolwide programs through a 
     waiver of the normal eligibility rules governing schoolwide 
     programs (current section 1114(a)(1)(B), which the bill would 
     re-enact as section 1114(a)(2)).
       ESEA, Sec. 6010, nonsupplanting. Section 6010 of the ESEA 
     would require each participating LEA to use its Title VI 
     funds to increase the overall amount of its expenditures for 
     the combination of: (1) teachers in regular classrooms in 
     schools receiving assistance; (2) assessing new teachers and 
     assisting them to take tests required for State 
     certification; and (3) professional development for teachers.
       ESEA, Sec. 6011, annual State reports. Section 6011 of the 
     ESEA would require each participating state to submit an 
     annual report to the Secretary on its activities under Title 
     VI.
       ESEA, Sec. 6012, participation of private school teachers. 
     Section 6012 of the ESEA would require each LEA to provide 
     for the equitable participation of teachers from private 
     schools in professional development activities it carriers 
     out with program funds.
       ESEA, Sec. 6013, definition. Section 6013 of the ESEA would 
     define ``State'', for the purpose of Title VI, as meaning 
     each of the 50 States, the District of Columbia, and Puerto 
     Rico. The outlaying areas, which would otherwise be treated 
     as States under the definition in

[[Page 11437]]

     current Sec. 14101(27) (to be redesignated as 
     Sec. 11101(27)), would be funded through the special 
     reservation in section 6004(a), rather than through the 
     formula allocations to States in section 6004(b).


  title vii--bilingual education, language enhancement, and language 
                          acquisition programs

       Title VII of the bill would revise Title VII (Bilingual 
     Education, Language Enhancement, and Language Acquisition 
     Programs) of the ESEA to enhance and make more effective the 
     accountability provisions for those receiving grants under 
     Subpart 1 of the title and improve the professional 
     development programs under Subpart 2 of Title VII by 
     eliminating overlap among the different authorized activities 
     and targeting activities on specific areas where assistance 
     is most needed. Other program improvements are also proposed.


                          bilingual education

       Section 701. Findings, Policy, and Purpose. Section 701 of 
     the bill would amend sections 7102(a) (Findings) and (b) 
     (Policy) of the ESEA to incorporate recent research findings 
     and to add the policy that limited English proficient 
     students be tested in English after three consecutive years 
     in United States' schools. This requirement is consistent 
     with the school accountability requirements associated with 
     limited English proficient students in section 
     1111(b)(2)(F)(v) of Title I of the ESEA. Section 701 of the 
     bill would also amend section 7102(c) (Purpose) of the ESEA 
     to add helping to ensure that limited English proficient 
     students master English as a stated purpose and to make minor 
     editorial changes.
       Section 702. Authorization of Appropriations for Part A. 
     Section 702 of the bill would amend section 7103(a) of the 
     ESEA to authorize the appropriation of such sums as may be 
     necessary to carry out programs under Part A of the Title 
     from fiscal year 2001 through 2005.
       Section 703. Program Development and Enhancement Grants. In 
     order to simplify and improve administration of instructional 
     services grants, section 703 of the bill would amend section 
     7113 of the ESEA (Enhancement Grants) to consolidate the 
     activities of the Program Development and Implementation 
     Grants program (currently in section 7112 of the ESEA and 
     repealed in section 730 of the bill) and the Enhancement 
     Grants program into a new three-year grant program, ``Program 
     Development and Enhancement Grants.''
       Section 703(3) of the bill would require grants to be used 
     to: (1) develop and implement comprehensive, preschool, 
     elementary, or secondary education programs for children and 
     youth with limited English proficiency, that are aligned with 
     standards-based State and local school reform efforts and 
     coordinated with other relevant programs and services; (2) 
     provide high-quality professional development; and (3) 
     require annual assessment of student progress in learning 
     English. Section 703(3) of the bill would also amend current 
     language on allowable activities to emphasize effective 
     instructional practice and the use of technology in the 
     classroom.
       Section 703(4) of the bill would authorize the Secretary to 
     give priority to applicants that enroll fewer than 10,000 
     students and that have limited or no experience in serving 
     limited English proficient students.
       Section 704. Comprehensive School Grants. Section 704 of 
     the bill would amend section 7114 of the ESEA that authorizes 
     five-year Comprehensive School Grants for school-wide 
     instructional programs. Section 704(1) of the bill would 
     revise the purpose of the program. The purpose would be to 
     implement school-wide education programs, in coordination 
     with Title I of the ESEA, for children and youth with limited 
     English proficiency to assist such children and youth to 
     learn English and achieve to challenging State content and 
     performance standards, and to improve, reform, and upgrade 
     relevant programs and operations in schools with significant 
     concentrations of such students or that serve significant 
     numbers of such students.
       Section 704(2) of the bill would amend section 7114(b)(2) 
     of the ESEA to replace the termination provisions with a 
     clearer system of accountability requiring the Secretary, 
     before making a continuation award for the fourth year of a 
     program under this section, to determine if the program is 
     making continuous and substantial progress in assisting 
     children and youth with limited English proficiency to learn 
     English and achieve to challenging State content and 
     performance standards. The Secretary would base such 
     determination on the indicators established and data and 
     information collected under the annual evaluations under 
     section 7118 (as redesignated) and such other data and 
     information as the Secretary may require. If the Secretary 
     determines that a recipient requesting a fourth-year 
     continuation award under this section is not making 
     continuous and substantial progress, the recipient would be 
     required to promptly develop and submit to the Secretary a 
     program improvement plan for its program. The Secretary would 
     be required to approve a program improvement plan only if he 
     or she determines that it held reasonable promise of enabling 
     students with limited English proficiency participating in 
     the program to learn English and achieve to challenging State 
     content and performance standards. If the Secretary 
     determines that the recipient is not making substantial 
     progress in implementing the program improvement plan, the 
     Secretary would be required to deny a continuation award.
       Section 704(3) of the bill would establish required 
     activities. The required activities would, among other 
     things, include the annual assessment of student progress in 
     learning English. Section 704(3) of the bill would also amend 
     current language on allowable activities to, among other 
     things, emphasize effective instructional practice and the 
     use of technology in the classroom.
       Section 704(4) of the bill would limit the period during 
     which grant funds may be used for planning to 90 days and 
     limit the number of schools that may be included in the grant 
     to two. These changes would ensure more effective use of 
     Federal assistance.
       Section 705. Systemwide Improvement Grants. Section 705 of 
     the bill would amend section 7115 (Systemwide Improvement 
     Grants) of the ESEA that authorizes five-year grants for 
     projects within an entire school district. Section 705(1) of 
     the bill would amend section 7115(a) of the ESEA to make 
     editorial and conforming changes to that subsection.
       Section 705(2) of the bill would amend section 7115(b)(2) 
     of the ESEA to replace the termination provisions with a 
     clearer system of accountability requiring the Secretary, 
     before making a continuation award for the fourth year of a 
     program under this section, to determine if the program is 
     making continuous and substantial progress in assisting 
     children and youth with limited English proficiency to learn 
     English and achieve to challenging State content and 
     performance standards. The Secretary would base such 
     determination on the indicators established and data and 
     information collected under the annual evaluations under 
     section 7118 (as redesignated), and such other data and 
     information as the Secretary may require. If the Secretary 
     determines that a recipient requesting a fourth-year 
     continuation award under this section is not making 
     continuous and substantial progress, the recipient would be 
     required to promptly develop and submit to the Secretary a 
     program improvement plan for its program. The Secretary would 
     be required to approve a program improvement plan only if he 
     or she determines that it held reasonable promise of enabling 
     students with limited English proficiency participating in 
     the program to learn English and achieve to challenging State 
     content and performance standards. If the Secretary 
     determines that the recipient is not making substantial 
     progress in implementing the program improvement plan, the 
     Secretary would be required to deny a continuation award.
       Section 705(3) of the bill would establish required 
     activities, including building school district capacity to 
     continue to operate similar instructional programs once 
     Federal funding is no longer available, aligning programs for 
     limited English proficient students with school, district, 
     and State reform efforts and coordinating with other relevant 
     programs (such as Title I), and annually assessing student 
     progress in learning English. The required activities would 
     help ensure that projects effectively promote educational 
     reform for limited English proficient students. Section 
     705(3) of the bill would also amend current language on 
     allowable activities to, among other things, emphasize 
     effective instructional practice, developing student 
     proficiency in two languages, and the use of technology in 
     the classroom.
       Section 706. Applications for Awards under Subpart 1. 
     Section 706 of the bill would amend section 7116 of the ESEA 
     (Applications) to make changes designed to increase program 
     accountability.
       Section 706(1) of the bill would amend section 7116(b) of 
     the ESEA (State Review and Comments) to clarify that SEAs 
     must not only review Subpart 1 applications, but also 
     transmit that review in writing to the Department.
       Section 706(2) of the bill would amend section 7116(f) of 
     the ESEA (Required Documentation) to require documentation 
     that the leadership of each participating school had been 
     involved in the development and planning of the program in 
     the school.
       Section 706(3) of the bill would amend section 7116(g) of 
     the ESEA (Contents) to reorganize paragraph (A) and to add to 
     the list of data to be included in the application, data on: 
     (1) current achievement data of the limited English 
     proficient students to be served by the program (and in 
     comparison to their English proficient peers) in reading or 
     language arts (in English and in the native language if 
     applicable) and in math; (2) reclassification rates for 
     limited English proficient students in the district; (3) the 
     previous schooling experiences of participating students; and 
     (4) the professional development needs of the instructional 
     personnel who will provide services for limited English 
     proficient students, including the need for certified 
     teachers; and (5) how the grant would supplement the basic 
     services provided to limited English proficient students. 
     Many school districts already collect such data and its 
     collection would help ensure that data submitted with the 
     application could be used to establish a baseline against 
     which instructional progress could be measured.

[[Page 11438]]

       Section 706(3) of the bill would also make editorial 
     changes to section 7116(g)(1)(B) of the ESEA and require, in 
     section 7116(g)(1)(E) of the ESEA, an assurance that the 
     applicant will employ teachers in the proposed program who 
     individually, or in combination, are proficient in the native 
     language of the majority of students they teach, if 
     instruction in the program is also in the native language.
       Section 706(4) of the bill would amend section 7116(i) of 
     the ESEA (Priorities and Special Rules) to add two new 
     priorities for applicants that experience a dramatic increase 
     in the number of limited English proficient students enrolled 
     and demonstrate that they have a proven record of success in 
     helping children and youth with limited English proficiency 
     learn English and achieve to high academic standards and make 
     editorial revisions.
       Section 707. Evaluations under Subpart 1. Section 707(1) of 
     the bill would amend current section 7123(a) of the ESEA 
     (Evaluation) to require that grantees conduct an annual, 
     rather than biennial, evaluation. This change would enhance 
     the Department's ability to hold projects accountable for 
     teaching English to limited English proficient students and 
     to determine the extent to which these students are achieving 
     to State standards.
       Section 707(2) of the bill would revise the list of 
     evaluation components, in section 7123(c) of the ESEA, to 
     require a recipient to: (1) use the data provided in the 
     application as baseline data against which to report academic 
     achievement and gains in English proficiency for students in 
     the program; (2) report on the validity and reliability of 
     all instruments used to measure student progress; and (3) 
     enable results to be disaggregated by such relevant factors 
     as a student's grade, gender, and language group and whether 
     the student has a disability. Evaluations would be required 
     to include: (1) data on the project's progress in achieving 
     its objectives; (2) data showing the extent to which all 
     students served by the program are achieving to the State's 
     student performance standards; (3) program implementation 
     indicators that address each of the program's objectives and 
     components, including the extent to which professional 
     development activities have resulted in improved classroom 
     practices and improved student achievement; (4) a description 
     of how the activities funded under the grant are coordinated 
     and integrated with the overall school program and other 
     Federal, State, or local programs serving limited English 
     proficient children and youth; and (5) such other information 
     as the Secretary may require. This revision is necessary to 
     ensure that grantees submit data needed to make a 
     determination on whether the project should be continued at 
     the end of the third year or at the end of the fourth year, 
     and also provide the Department with data needed to assess 
     grantee progress towards meeting goals established for the 
     Bilingual Education program under the Government Performance 
     and Results Act (GPRA).
       Section 707(3) of the bill would add a new subsection (d) 
     (Performance Measures) that would require the Secretary to 
     establish performance indicators to determine if programs 
     under sections 7113 and 7114 (as redesignated) are making 
     continuous and substantial progress, and allow the Secretary 
     to establish such indicators to determine if programs under 
     section 7112 (as redesignated) are making continuous and 
     substantial progress, toward assisting children and youth 
     with limited English proficiency to learn English and achieve 
     to challenging State content and performance standards.
       Section 708. Research. Section 708 of the bill would amend 
     current section 7231 of the ESEA (Research) to support the 
     use of the research authority to gather data needed to assess 
     the Department's progress in meeting goals established for 
     the Bilingual Education program under GPRA.
       Section 708(1) of the bill would amend sections 7132 (a) 
     (Administration) and (b) (Requirements) of the ESEA to 
     eliminate the requirement that research be conducted through 
     the Office of Educational Research and Improvement in 
     collaboration with the Office of Bilingual Education and 
     Minority Languages Affairs and also to provide a list of 
     allowable research activities (including data collection 
     needed for compliance with GPRA and identifying technology-
     based approaches that show effectiveness in helping limited 
     English proficient students reach challenging State 
     standards).
       Section 708(3) of the bill would make conforming changes to 
     sections 7321 (c)(1) and (2) of the ESEA and eliminate the 
     authorization for grantees under Subparts 1 and 2 to submit 
     research applications at the same time as their applications 
     under Subparts 1 and 2. The current provision unnecessarily 
     complicates the conduct of these grant competitions. Section 
     708(4) of the bill would eliminate section 7132(e) (Data 
     Collection) since data collection is an activity authorized 
     in subsection (a).
       Section 709. Academic Excellence Awards. Section 709 of the 
     bill would replace current section 7133 of the ESEA (Academic 
     Excellence) that authorizes grants, contracts, and 
     cooperative agreements to promote the adoption of promising 
     instructional and professional development programs, with a 
     State discretionary grant program. Under the new program, the 
     Secretary would be authorized to make grants to SEAs to 
     assist them in recognizing LEAs and other public and non-
     profit entities whose programs have demonstrated significant 
     progress in assisting limited English proficient students to 
     learn English and to meet the same challenging State content 
     standards expected of all children and youth, within three 
     years. The expanded State role proposed in these amendments 
     is designed to encourage and reward exceptional programs and 
     help disseminate information on effective instructional 
     practices for serving limited English proficient students.
       Section 710. State Grant Program. Section 710 of the bill 
     would amend subsection (c) (Uses of Funds) of section 7134 
     (State Grant Program) of the ESEA to require State to use 
     funds under the section to: (1) assist LEAs with program 
     design, capacity building, assessment of student performance, 
     program evaluation, and development of data collection and 
     accountability systems for limited English proficient 
     students that are aligned with State reform efforts; and (2) 
     collect data on limited English proficient populations in the 
     State and the educational programs and services available to 
     such populations. This amendment is designed to improve the 
     quality of data collected by LEAs relating to services for 
     limited English proficient students.
       Section 711. National Clearinghouse on the Education of 
     Children and Youth with Limited English Proficiency. Section 
     711 would amend section 7135 of the ESEA (National 
     Clearinghouse for Bilingual Education) to rename the 
     Clearinghouse the ``National Clearinghouse for the Education 
     of Children and Youth with Limited English Proficiency'', and 
     to eliminate ambiguous and burdensome requirements that the 
     Clearinghouse be administered as an adjunct to the 
     Educational Resources Information Center Clearinghouse 
     system, develop a data base management and monitoring system, 
     and develop, maintain, and disseminate a listing of bilingual 
     education professionals.
       Section 712. Instructional Materials Development. Section 
     712 of the bill would amend section 7136 of the ESEA 
     (Instructional Materials) to expand the current authorization 
     for grants to develop, publish, and disseminate instructional 
     materials. The current authorization is limited to Native 
     American, Native Hawaiian, Native Pacific Islanders, and 
     other languages of outlying areas. The amendment would add 
     other low-incidence languages in the United States for which 
     instructional materials are not readily available. The kinds 
     of materials that may be developed would also be expanded to 
     include materials on State content standards and assessments 
     for dissemination to parents of limited English proficient 
     students. The proposed amendment recognizes that 
     instructional materials may be needed in languages other than 
     those listed in the current statute and that materials may be 
     needed to prepare parents to become more involved in the 
     education of their children.
       Section 712 of the bill would also require the Secretary to 
     give priority to applications for developing instructional 
     materials in languages indigenous to the United States or to 
     the outlying territories and for developing and evaluating 
     instructional materials that reflect challenging State and 
     local content standards, in collaboration with activities 
     assisted under Subpart 1 and section 7124.
       Section 713. Purpose of Subpart 3. Section 713 of the bill 
     would amend section 7141 (Purpose) of Subpart 3 (Professional 
     Development) of Part A of the title to eliminate a reference 
     to dissemination of information. This activity is not 
     directly related to professional development.
       Section 714. Training for all Teachers Program. Section 714 
     of the bill would amend section 7142 of the ESEA (Training 
     for all Teachers Program) to limit grants to ongoing 
     professional development. This change would provide greater 
     focus to the activity since the current statute covers both 
     inservice and preservice professional development. The 
     Secretary would be authorized to award grants to LEAs or to 
     one or more LEAs in consortium with one or more institutions 
     of higher education, SEAs, or nonprofit organizations. This 
     change would help ensure that the professional development 
     supported by the grant directly addresses the staffing needs 
     of one or more LEAs.
       Section 7142 of the ESEA would be further amended to reduce 
     the grant period from 5 to 3 years, thus allowing the program 
     to assist a greater number of communities. Also, funded 
     professional development activities would be required to be 
     of high-quality and long-term in nature, thus no longer could 
     they be simply a few weekend seminars. The list of allowable 
     activities would be expanded to, among other things, include 
     induction programs, clarifying that grantees may use grants 
     to cover the costs of coaching by teachers experienced in 
     serving limited English proficient students for teachers who 
     are preparing to serve these students, and support for 
     teacher use of education technologies. The proposed 
     amendments reflect current research findings on effective 
     professional development practices.
       Section 715. Bilingual Education Teachers and Personnel 
     Grants. Section 715 of the bill

[[Page 11439]]

     would amend section 7143 of the ESEA (Bilingual Education 
     Teachers and Personnel Grants) to limit grants to 
     institutions of higher education for preservice professional 
     development. This change would provide greater focus to the 
     activity since the current statute covers both inservice and 
     preservice professional development.
       Also, section 715(3) of the bill would add a new subsection 
     (d) to section requiring that funds be used to put in place a 
     course of study that prepares teachers to serve limited 
     English proficient students, integrate course content 
     relating to meeting the needs of limited English proficient 
     students into all programs for prospective teachers, assign 
     tenured faculty to train teachers to serve limited English 
     proficient students, incorporate State content and 
     performance standards into the institution's coursework, and 
     expand clinical experiences for participants. The new 
     subsection would also authorized grantees to use funds for 
     such activities as supporting partnerships with LEAs, 
     restructuring higher education course content, assisting 
     other institutions of higher education to improve the quality 
     of relevant professional development programs and expanding 
     recruitment efforts for students who will participate in 
     relevant professional development programs.
       The proposed amendments recognize that all prospective 
     teachers should have a basic understanding of effective 
     methods for serving limited English proficient students. 
     Because of the rapid growth in this population, all teachers 
     can expect to have limited English proficient students in 
     their classrooms at some point in their teaching career. 
     These amendments also recognize the importance of creating a 
     closer link between schools of education that produce new 
     teachers and the schools that hire them.
       Section 716. Bilingual Education Career Ladder Program. 
     Section 716 of the bill would amend section 7144 of the ESEA 
     (Bilingual Education Career Ladder Program) to authorize 
     grants to a consortia of one or more institutions of higher 
     education and one or more institutions of higher education 
     and one or more SEAs or LEAs to develop and implement 
     bilingual education career ladder programs. A bilingual 
     education career ladder program would be a program designed 
     to provide high-quality, pre-baccalaureate coursework and 
     teacher training to educational personnel who do not have a 
     baccalaureate degree and that would lead to timely receipt of 
     a baccalaureate degree and certification or licensure of 
     program participants as bilingual education teachers or other 
     educational personnel who serve limited English proficient 
     students. Recipients of grants would be required to 
     coordinate with programs under title II of the Higher 
     Education Act of 1965, and other relevant programs, for the 
     recruitment and retention of bilingual students in 
     postsecondary programs to train them to become bilingual 
     educators, and make use of all existing sources of student 
     financial aid before using grant funds to pay tuition and 
     stipends for participating students.
       Also, section 716(4) of the bill would amend section 
     7144(d) of the ESEA (Special Considerations) to eliminate the 
     current special considerations and require the Secretary, 
     instead, to give special consideration to applications that 
     provide training in English as a second language, including 
     developing proficiency in the instructional use of English 
     and, as appropriate, a second language in classroom contexts.
       Section 717. Graduate Fellowships in Bilingual Education 
     Program. Section 717 of the bill would amend section 7145(a) 
     of the ESEA (Authorization) in the Graduate Fellowships in 
     Bilingual Education Program, to eliminate the authorization 
     for fellowships at the post-doctoral level and the 
     requirement that the Secretary make a specific number of 
     fellowship awards in any given year. Masters and doctoral 
     level fellows are more likely to provide a direct benefit to 
     classroom instruction than fellows at the post-doctoral 
     level.
       Section 718. Applications for Awards under Subpart 3. 
     Section 718 of the bill would amend section 7146 of the ESEA 
     (Application) to clarify that the State educational agency 
     must review and submit written comments on all applications 
     for professional development grants, with the exception of 
     those for fellowships, to the Secretary.
       Section 719. Evaluations under Subpart 3. Section 719 of 
     the bill would amend section 7149 of the ESEA (Program 
     Evaluations) to require an annual evaluation and to clarify 
     evaluation requirements. The purpose of these proposed 
     amendments is to increase project accountability and ensure 
     that the Department receives data from grantees that is 
     required to address performance goals established under the 
     GPRA.
       Section 720. Transition. Section 720 of the bill would 
     amend section 7161 of the ESEA (Transition) to provide that a 
     recipient of a grant under subpart 1 of Part A of this title 
     that is in its third or fourth year of the grant on the day 
     preceding the date of enactment of the Educational Excellence 
     for All Children Act of 1999 shall be eligible to receive 
     continuation funding under the terms and conditions of the 
     original grant.


                 emergency immigrant education program

       Section 721. Findings of the emergency Immigrant Education 
     Program. Section 721 of the bill would amend section 7301 
     (Findings and Purpose) of Part C (Emergency Immigrant 
     Education Program) of Title VII of the ESEA to add an 
     additional finding to better justify the program.
       Section 722. State Administrative Costs. Section 722 of the 
     bill would amend section 7302 of the ESEA (State 
     Administrative Costs) to authorize States to use up to 2 
     percent of their grant for administrative costs if they 
     distribute funds to LEAs within the State on a competitive 
     basis. The current provision caps State administrative costs 
     at 1.5 percent, which is insufficient to cover the costs of 
     holding a State discretionary grant competition.
       Section 723. Competitive State Grants to Local Educational 
     Agencies. Section 723 of the bill would amend section 
     7304(e)(1) of the ESEA to eliminate the $50 million 
     appropriations trigger on, and the 20 percent cap for, 
     allowing States each year to reserve funds from their program 
     allotments and award grants, on a competitive basis, to LEAs 
     with the State. This change reflects current budget policy 
     and practice of allowing State recipients the opportunity to 
     allow LEAs to compete for funds.
       Section 724. Authorization of Appropriations for Part C. 
     Section 724 of the bill you amend section 7309 of the ESEA 
     (Authorizations of Appropriations) to authorize the 
     appropriation of such sums as may be necessary for each of 
     fiscal years 2001 through 2005 to carry out Part C of Title 
     VII.


                           general provisions

       Section 725. Definitions. Section 725 of the bill would 
     amend section 7501 (Definitions; Regulations) of Part E 
     (General provisions) of Title VII of the ESEA to add a 
     definition of ``reclassification rate,'' a term used in the 
     proposed amendments to the Applications and Evaluations 
     sections of Subpart 1 of Part A of Title VII of the ESEA. The 
     term would mean the annual percentage of limited English 
     proficient students who have met the State criteria for no 
     longer being considered limited English proficient. Also, the 
     current definition of ``Special Alternative Instructional 
     Program'', would be eliminated.
       Section 726. Regulations, Parental Notification, and Use of 
     Paraprofessionals. Section 726 of the bill would amend 
     section 7502 (Regulations and Notification) of Part E to add 
     requirements for projects funded under subpart 1 of Part A of 
     the title relating to parental notification and the use of 
     instructional staff who are not certified in the field in 
     which they teach. Section 726(1) of the bill would amend the 
     section heading to read: ``REGULATIONS, PARENTAL 
     NOTIFICATION, AND USE OF PARAPROFESSIONALS''.
       Section 726(2) of the bill would amend section 7502(b) 
     (Parental Notification) of the ESEA by making conforming 
     amendments in paragraphs (1)(A) and (C) of the subsection and 
     amending paragraph (2)(A) of the subsection to change the 
     paragraph heading to ``Option to Withdraw'' and to require a 
     recipient of funds under Subpart 1 of Part A to provide a 
     written notice to parents of children who will participate in 
     the programs under that subpart, in a form and language 
     understandable to the parents, that informs them that they 
     may withdraw their child from the program at any time.
       Section 726(3) of the bill would add a new subsection (c) 
     to require that, on the date of enactment of the Educational 
     Excellence for All Children Act of 1999, all new staff hired 
     to provide academic instruction in programs supported under 
     Part A, Subpart 1, will be in accordance with the 
     requirements of section 1119(c) of the ESEA, relating to the 
     employment of paraprofessionals. These amendments are 
     designed to lead to an improvement of the professional skills 
     of instructional staff providing services to limited English 
     proficient students.


           repeals, redesignations, and conforming amendments

       Section 727. Terminology. Section 727 of the bill would 
     amend subparts 1 and 2 of Part A and section 7501(6) of the 
     ESEA to conform references to bilingual education and special 
     alternative instruction programs to instructional programs 
     for children and youth with limited English proficiency.
       Section 728. Repeals. Section 730 of the bill would repeal 
     current sections 7112, 7117, 7119, 7120, 7121, 7147 and Part 
     B of Title VII of the ESEA.
       Section 7112 would no longer be needed since the authorized 
     activity would be consolidated with the activity authorized 
     by Section 7113.
       Section 7117 (Intensified Instruction), 7119 (Subgrants), 
     7120 (Priority on Funding), and 7121 (Coordination) of the 
     ESEA would be repealed since these sections repeat language 
     appearing elsewhere in the statute or cover situations that 
     are unlikely to occur.
       Section 7147 (Program Requirements) of the ESEA would be 
     repealed because it requires that all professional 
     development grants assist educational personnel in meeting 
     State and local certification requirements. This requirement 
     is not relevant to all of the authorized professional 
     development activities.
       Part B of Title VII of the ESEA would be moved to new Part 
     I of Title X of the ESEA.
       Section 729. Redesignations and Conforming Amendments. 
     Section 731 of the bill would

[[Page 11440]]

     provide for the redesignation of various sections of the ESEA 
     and for conforming references to those sections and to other 
     sections of the ESEA that have been changed.


                         TITLE VIII--IMPACT AID

       Title VIII of the bill would amend Title VIII of the ESEA, 
     which authorizes the Impact Aid program.
       Section 801, purpose [ESEA, Sec. 8001]. Section 801 of the 
     bill would amend section 8001 of the ESEA to provide that the 
     purpose of the Impact Aid program is to provide assistance to 
     certain LEAs that are financially burdened as a result of 
     activities of the Federal Government carried out in their 
     jurisdictions, in order to help those LEAs provide 
     educational services to their children, including federally 
     connected children, so that they can meet challenging State 
     standards. This will provide a succinct statement of the 
     program's purpose, as is typical of other programs, in place 
     of the statement in the current statute, which is overly long 
     and which refers to certain categories of eligibility that 
     other provisions of the bill would repeal.
       Section 802, payments relating to Federal acquisition of 
     real property [ESEA, Sec. 8002]. Section 802 of the bill 
     would amend section 8002 of the ESEA, which authorizes the 
     Secretary to partially compensate certain LEAs for revenue 
     lost due to the presence of non-taxable Federal property, 
     such as a military base or a national park, in their 
     jurisdictions. The amendments made by section 8002 would 
     better target funds on the LEAs most burdened by the presence 
     of Federal property, so that appropriations for section 8002, 
     which are not warranted under current law, may be justified 
     in the future.
       Section 802(a)(1) of the bill would delete unneeded 
     language in section 8002(a) of the ESEA that refers to the 
     fiscal years for which payments under section 8002 are 
     authorized. That issue is fully covered by the authorization 
     of appropriations in section 8014 of the ESEA.
       Section 802(a)(2) would delete an alternative eligibility 
     criterion (current section 8002(a)(1)(C)(ii)), which was 
     enacted to benefit a single LEA, and would add a requirement 
     that the Federal property claimed as the basis of eligibility 
     have a current aggregate assessed value (as determined under 
     section 8002(b)(3)) that is at least 10 percent of the total 
     assessed value of all real property in the LEA. (The current 
     statutory requirement that Federal property constituted 10 
     percent of the total assessed value when the Federal 
     Government acquired it would be retained.) The new provision 
     will ensure that payments under section 8002 are made only to 
     LEAs in which the presence of Federal property continues to 
     have a significant effect on the local tax base.
       Section 802(b) would repeal subsections (d) through (g) and 
     (i) through (k) of section 8002. Each of these provisions was 
     enacted for the benefit of a single LEA (or a limited number 
     of LEAs) and describes a situation in which the burden, if 
     any, from Federal property is not sufficient to warrant 
     compensation from Federal taxpayers. The presence of these 
     provisions reduces the amount of funds available to LEAs that 
     legitimately request funds under this authority.
       Section 802(c) would replace the soon-to-be obsolete ``hold 
     harmless'' language in section 8002(h) of the ESEA with 
     language providing for a three-year phase-out of payments to 
     LEAs that received section 8002 payments for FY 1999, but 
     that would no longer be eligible because of the new 
     requirement, discussed above, that Federal property 
     constitute at least ten percent of the current assessed value 
     of all real property in the LEA. This phase-out will provide 
     a fair and reasonable period for these LEAs to adjust to the 
     loss of their eligibility, while making more funds available 
     to those LEAs whose local tax bases continue to be affected 
     by the presence of Federal property.
       Section 802(d) would make minor conforming amendments to 
     section 8002(b)(1).
       Section 803, payments for eligible federally connected 
     children [ESEA, Sec. 8003]. Section 803(a)(1) of the bill 
     would amend the list of categories of children who may be 
     counted for purposes of basic support payments under section 
     8003(a), by deleting the various categories of so-called 
     ``(b)'' children, whose attendance at LEA schools imposes a 
     much lower burden that does not warrant Federal compensation. 
     As amended, these payments would be made on behalf of 
     approximately 300,000 ``(a)'' students throughout the Nation, 
     i.e.: (1) children of Federal employees who both live and 
     work on Federal property; (2) children of military personnel 
     (and other members of the uniformed services) living on 
     Federal property; (3) children living on Indian lands; and 
     (4) children of foreign military officers living on Federal 
     property.
       Section 803(a)(2) would conform the statement of weighted 
     student units in section 8003(a)(2) to reflect the 
     elimination of ``(b)'' students from eligibility.
       Section 803(a)(3) would delete section 8003(a) (3) and (4), 
     each of which relates to categories of children whose 
     eligibility would be ended under paragraph (1)
       Section 803(b)(1)(B) would delete the requirement that an 
     LEA have at least 400 eligible students (or that those 
     students constitute at least three percent of its average 
     daily attendance) in order to receive a payment. Thus, any 
     LEA with ``(a)'' children would qualify for a basic support 
     payment.
       Section 803(b)(1)(D) would amend section 8003(b)(1)(C) 
     (which would be redesignated as subparagraph (B)) to delete 
     two of the four options for determining an LEA's local 
     contribution rate (LCR), which is used to compute its maximum 
     payment, and to add a third method to the remaining two. 
     These changes would make payments more closely reflect the 
     actual local cost of educating students because each of the 
     three options, unlike the two options that would be deleted, 
     would include a measure of the amount or proportion of funds 
     that are provided at the local level.
       Section 803(b)(1)(E) would add a new subparagraph (C) to 
     section 8003(b)(1) to provide that, generally, local 
     contribution rates would be determined using data from the 
     third preceding fiscal year. This is the most recent fiscal 
     year for which satisfactory data on average per-pupil 
     expenditures are usually available.
       Section 803(b)(2)(B) would amend section 8003(b)(2)(B), 
     which describes how the Secretary computes each LEA's 
     ``learning opportunity threshold'' (LOT), a factor used in 
     determining actual payment amounts when sufficient funds are 
     not available, as is the norm, to pay the maximum statutory 
     amounts. Under current law, an LEA's LOT is a percentage, 
     which may not exceed 100, computed by adding the percentage 
     of its students who are federally connected and the 
     percentage that its maximum payment is of its total current 
     expenditures. Under the amendments, an LEA's LOT would be 50 
     percent plus one-half of the percentage of its students who 
     are federally connected. The proposed LOT would consistently 
     favor LEAs with high concentrations of federally connected 
     students, which face a disproportionately high burden as a 
     result of Federal activities, unlike the current statute, 
     which allows an LEA to reach a LOT of 100 percent even though 
     the federally connected students constitute considerably less 
     than 100 percent of its total student body. The revised LOT 
     would also remove the current incentive for LEAs to reduce 
     their local tax effort in order to earn a higher LOT.
       Section 803(b)(2)(B)(i) would delete section 
     8003(b)(2)(B)(ii), which would no longer be needed in light 
     of the changes to the LOT calculation described above. This 
     section would also delete section 8003(b)(2)(B)(iii), which 
     inappropriately benefits a single LEA by providing a 
     different method of calculating its LOT that is not available 
     to any other LEA.
       Section 803(b)(2)(C) would amend section 8003(b)(2)(C) to 
     clarify that payments are proportionately increased from the 
     amounts determined under the LOT provisions (but not to 
     exceed the statutory maximums) when available funds are 
     sufficient to make payments above the LOT-based amounts.
       Section 803(b)(3) would delete section 8003(b)(3), which 
     provides an unwarranted benefit to a particular State in 
     which there is only one LEA by requiring the Secretary to 
     treat each of the administrative districts of that LEA as if 
     they were individual LEAs. As with other LEAs (many of which 
     have more students than the State in question and that also 
     have internal administrative districts), this LEA's 
     eligibility for a payment, and the amount of any payment, 
     should be determined with regard to the entire LEA, not its 
     administrative units.
       Section 803(c) would make a technical amendment to section 
     8003(c) of the ESEA, which generally requires the use of data 
     from the immediately preceding fiscal year in making 
     determinations under section 8003, to reflect the addition of 
     section 8003(b)(1)(C), which provides for the use of data 
     from the third preceding fiscal year in determining LEA local 
     contribution rates.
       Section 803(d) would amend section 8003(d) of the ESEA, 
     which authorizes additional payments to LEAs on behalf of 
     children with disabilities, to conform to the deletion of 
     ``(b)'' children from eligibility for basic support payments, 
     and to reflect the fact that some of these children may be 
     eligible for early intervention services, rather than a free 
     appropriate public education, under the Individuals with 
     Disabilities Education Act.
       Section 803(e) would delete the ``hold-harmless'' 
     provisions relating to basic support payments in section 
     8003(e) of the ESEA. By guaranteeing that certain LEAs 
     continue to receive a high percentage of the amounts they 
     received in prior years, without regard to current 
     circumstances, these provisions inappropriately divert a 
     substantial amount of funds from LEAs that have a greater 
     need, based on the statutory criteria.
       Section 803(f) of the bill would amend section 8003(f) of 
     the ESEA, which authorizes additional payments to LEAs that 
     are heavily impacted by the presence of federally connected 
     children in their schools. In general, the amendments to this 
     provision are designed to ensure that eligibility for these 
     additional payments is restricted to those relatively few 
     LEAs for whom it is warranted, and that the amounts of those 
     payments accurately reflect the financial burden caused by a 
     large Federal presence in those LEAs.
       Under section 8003(f)(2), an LEA would have to meet each of 
     three criteria to qualify for a payment. First, federally 
     connected children (i.e., ``(a)'' children) would have to

[[Page 11441]]

     constitute at least 40 percent of the LEA's enrollment and 
     the LEA would have to have a tax rate for general-fund 
     purposes that is at least 100 percent of the average tax rate 
     of comparable LEAs in the State. Any LEA whose boundaries are 
     the same as those of a military installation would also 
     qualify. Second, the LEA would have to be exercising due 
     diligence to obtain financial assistance from the State and 
     from other sources. Third, the State would have to make State 
     aid available to the LEA on at least as favorable a basis as 
     it does to other LEAs.
       Section 8003(f)(3) would replace the highly complicated 
     provisions of current law relating to the computation of 
     payment amounts for heavily impacted LEAs, including its 
     multiple formulas, with a single formula that, for each 
     eligible LEA, would factor in per-pupil expenditures, the 
     number of its federally connected children, the amount 
     available to it from other sources for current expenditures, 
     and the amount of basic support payments it receives under 
     section 8003(b) and the amount of supplemental payments for 
     children with disabilities it receives under section 8003(d).
       Section 8003(f)(4) would direct the Secretary, in 
     determining eligibility and payment amounts for heavily 
     impact LEAs, to use data from the second preceding fiscal 
     year, if those data are provided by the affected LEA (or the 
     SEA) within 60 days of being requested by the Secretary to do 
     so. If any of those data are not provided by that time, the 
     Secretary would use data from the most recent fiscal year for 
     which satisfactory data are available. This should provide 
     ample time for LEAs (and States, as may be necessary for 
     certain data) to provide that information so that the 
     Secretary can make payments to LEAs, for whom these funds 
     constitute a substantial portion of their budgets, on a 
     timely basis.
       Section 803(g) of the bill would delete section 8003(g) of 
     the ESEA, which authorizes additional payments to LEAs with 
     high concentrations of children with severe disabilities. 
     (These payments are separate from the payments for children 
     with disabilities under section 8003(d), which the bill would 
     continue to authorize.) This complicated authority has never 
     been funded.
       Section 803(h) would amend section 8003(h) of the ESEA to 
     prohibit an LEA from receiving a payment under section 8003 
     on behalf of federally connected children if Federal funds 
     (other than Impact Aid funds) provide a substantial portion 
     of their educational program. This provision, which would 
     codify the Department's regulations (see 34 CFR 
     222.30(2)(ii)), recognizes that the responsibility for the 
     costs of a child's basic education rests with an LEA and 
     that, if the Federal Government is already paying a 
     substantial portion of those costs through some other 
     program, it should provide additional funds on behalf of that 
     child through the Impact Aid program.
       Section 803(i) of the bill would delete the requirement, in 
     section 8003(i) of the ESEA, that LEAs maintain their fiscal 
     efforts for education from year to year as a condition of 
     receiving a payment under either section 8002 or section 
     8003. While appropriate in other Federal education programs 
     that are meant to provide funds for supplemental services, or 
     to benefit children with particular needs, a maintenance-of-
     effort requirement is not appropriate for the Impact Aid 
     program, which is intended to help LEAs meet the local costs 
     of providing a free public education to federally connected 
     children.
       Section 804, policies and procedures relating to children 
     residing on Indian lands [ESEA, Sec. 8004]. Section 804(1) of 
     the bill would change the heading of section 8004 of the ESEA 
     to ``Indian Community Participation'', to reflect amendments 
     the bill would make to this section.
       Section 804(2) would retain the current requirements of 
     section 8004(a) of the ESEA under which an LEA that claim 
     children residing on Indian lands in its application for 
     Impact Aid funds must ensure that the parents of Indian 
     children and Indian tribes are afforded an opportunity to 
     present their views and make recommendations on the unique 
     educational needs of those children and how those children 
     may realize the benefits of the LEA's educational programs 
     and activities. Section 804(2) would also add language 
     providing that an LEA that receives an Indian Education 
     Program grant under Subpart 1 of Part A of Title IX shall 
     meet the requirements described in the previous sentence 
     through activities planned and carried out by the Indian 
     parent committee established under the Indian Education 
     program, and could choose to form such a committee for that 
     purpose if it is not participating in the Title IX program. 
     An LEA could meet its obligations under section 8004(a) by 
     complying with the parental involvement provisions of Title I 
     and must comply with those provisions for Indian children who 
     it serves under Title I. Finally, an LEA could use any of its 
     section 8003 funds (except for the supplemental funds 
     provided on behalf of children with disabilities) for 
     activities designed to increase tribal and parental 
     involvement in the education of Indian children.
       Section 804(3) would streamline the language in section 
     8004(b), relating to LEA retention of records to demonstrate 
     its compliance with section 8004(a), without changing the 
     substance of that provision.
       Section 804(4) would delete subsection (c) of section 8004, 
     which automatically waives the substantive requirement of 
     subsection (a) and the record-keeping requirement of 
     subsection (b) with respect to the children of any Indian 
     tribe that provides the LEA a written statement that it is 
     satisfied with the educational services the LEA is providing 
     those children. The proposed amendments relating to community 
     involvement are sufficiently important that all affected LEAs 
     should comply with them and keep records to document their 
     compliance. Removing this waiver provision would also be 
     consistent with the prohibition on waiving any statutory or 
     regulatory requirements relating to parental participation 
     and involvement that applies to the Secretary's general 
     authority to issue waivers across the entire range of ESEA 
     programs. See Sec. 14401(c)(6) of the ESEA.
       Section 805, applications for payments under sections 8002 
     and 8003 [ESEA, Sec. 8005]. Section 805 of the bill would 
     amend section 8005 of the ESEA, relating to applications for 
     payments under sections 8002 and 8003, by: (1) conforming a 
     reference to the amended section 8004 in subsection (b)(2); 
     (2) deleting a reference in subsection (d)(2) to section 
     8003(e), to reflect the proposed repeal of that ``hold-
     harmless'' provision; and (3) deleting subsection (d)(4), 
     which provides an unwarranted benefit to a single State.
       Section 806, payments for sudden and substantial increases 
     in attendance of military dependents [ESEA, Sec. 8006]. 
     Section 806 of the bill would repeal section 8006 of the 
     ESEA, which authorizes payments to LEAs with sudden and 
     substantial increases in attendance of military dependents. 
     This authority has never been used and is not needed.
       Section 807, construction [ESEA, Sec. 8007]. Section 807 of 
     the bill would amend, in its entirety, section 8007 of the 
     ESEA, which authorizes grants to certain categories of LEAs 
     to support the construction or renovation of schools. As 
     amended, section 8007(a) would authorize assistance only to 
     an LEA that receives a basic support payment under section 
     8003 and in which children residing on Indian lands make up 
     at least half of the average daily attendance (one of the 
     current eligible categories). This limitation on eligibility 
     would target limited construction funds on LEAs with 
     substantial school-construction needs and severely limited 
     ability to meet those needs.
       Subsection (b) of section 8007 would require an interested 
     LEA to submit an application to the Secretary, including an 
     assessment of its school-construction needs.
       Subsection (c) would provide that available funds would be 
     allocated to qualifying LEAs in proportion to their 
     respective numbers of children residing on Indian lands.
       Subsection (d) would set the maximum Federal portion of the 
     cost of an assisted project at 50 percent, and give an LEA 
     three years after its proposal is approved to demonstrate 
     that it can provide its share of the project's cost.
       Subsection (e) would clarify that an LEA could use a grant 
     under this section for the minimum initial equipment 
     necessary for the operation of the new or renovated school, 
     as well as for construction.
       Section 808, facilities [ESEA, Sec. 8008]. Section 808 
     would make a conforming amendment to section 8008 of the 
     ESEA, relating to certain school buildings that are owned by 
     the Department but used by LEAs to serve dependents of 
     military personnel, to reflect the revised authorization of 
     appropriations in section 8014.
       Section 809, State consideration of payments in providing 
     State aid [ESEA, Sec. 8009]. Section 809 of the bill would 
     amend section 8009 of the ESEA, which generally prohibits a 
     State from taking an LEA's Impact Aid payments into account 
     in determining the LEA's eligibility for State aid (or the 
     amount of that aid) unless the Secretary certifies that the 
     State has in effect a school-finance-equalization plan that 
     meets certain criteria.
       Section 809(2) would add, to section 8009(b)(1)'s statement 
     of preconditions for State consideration of Impact Aid 
     payments, a requirement that the average per-pupil 
     expenditure (APPE) in the State be at least 80 percent of the 
     APPE in the 50 States and the District of Columbia. This will 
     help ensure that LEAs in States with comparatively low 
     expenditures for education receive adequate funds before the 
     State reduces State aid on account of Impact Aid payments.
       Section 809 would also make technical and conforming 
     amendments to section 8009.
       Section 810, Federal administration [ESEA, Sec. 8010]. 
     Section 810 of the bill would repeal subsection (c) of 
     section 8010 of the ESEA. Subsection (c)(1) sets out a 
     special rule that does not apply after fiscal year 1995. 
     Subsections (c)(2) and (3) provide an unwarranted special 
     benefit to a single LEA.
       Section 811, administrative hearings and judicial review 
     [ESEA, Sec. 8011]. Section 811 of the bill makes a technical 
     amendment to section 8011(a) to streamline that provision.
       Section 812, Forgiveness of overpayments [ESEA, Sec. 8012]. 
     Section 812 of the bill makes a technical amendment to 
     section 8012 to streamline that provision.
       Section 813, definitions (ESEA, Sec. 8013]. Section 813(1) 
     of the bill would conform the definition of ``current 
     expenditures'' in section

[[Page 11442]]

     8013(4) of the ESEA to conform to the proposed repeal of 
     current Title VI and to a corresponding amendment to a 
     similar definition of the term in current section 1410(11).
       Section 813(2) would amend the definition of ``Federal 
     property''(an important basis of eligibility for Impact Aid 
     payments) in section 8013(5) to delete references to certain 
     property that would not normally be regraded as Federal 
     property; these references were enacted for the special 
     benefit of a small number of LEAs. This property does not 
     merit payment under the Impact Aid program.
       Section 813(3) through (7) would make technical and 
     conforming amendments to other definitions in section 8013, 
     and delete the definitions of ``low-rent housing'' and 
     ``revenue derived from local sources'', which are 
     respectively, no longer needed and an unwarranted special-
     interest provision.
       Section 814, authorization of appropriations [ESEA, 
     Sec. 8014]. Section 814 of the bill would amend section 8014 
     of the ESEA to authorize the appropriation of funds to carry 
     out the various Impact Aid authorities through fiscal year 
     2005. New subsection (b) of section 8014 would provide that 
     funds appropriated for school construction under section 8007 
     and for facilities maintenance under section 8008 would be 
     available to the Secretary until expended. However, if 
     appropriations acts, which normally contain provisions 
     governing the applicability of the funds they appropriate, 
     provide a different rule than the one in proposed section 
     8014(b), the appropriations acts would govern.


     TITLE IX--INDIAN, NATIVE HAWAIIAN, AND ALASKA NATIVE EDUCATION

     Part A--Indian Education
       Part A of Title IX of the bill would make various 
     amendments to Part A of Title IX of the ESEA, which 
     authorizes a program of formula grants to LEAs, as well as 
     certain demonstration programs and related activities, to 
     increase educational achievement of American Indian and 
     Alaska Native students.
       Section 901, findings and purpose [ESEA, Sec. 9101 and 
     9102]. Section 901 of the bill would amend the statements of 
     findings and purpose in sections 9101 and 9102 of the ESEA by 
     changing references to the ``special educational and 
     culturally related academic needs'' of American Indian and 
     Alaska Native students to refer instead to their ``unique 
     educational and culturally related academic needs.''
       Section 902, grants to local educational agencies [ESEA, 
     Sec. 9112]. Section 902 of the bill would amend section 9112 
     of the ESEA, which authorizes formula grants to certain LEAs 
     educating Indian children. Current section 9112(b) provides 
     that when an eligible LEA does not establish the Indian 
     parent committee required by the statute, an Indian tribe 
     that represents at least half of the LEA's Indian students 
     may apply for the LEA's grant and is to be treated by the 
     Secretary as if it were an LEA. The amendment would codify 
     the Department's interpretation that, in that situation, the 
     tribe is not subject to the statutory requirements relating 
     to the parent committee, maintenance of effort, or submission 
     of its grant application to the State educational agency for 
     review. These requirements would be inappropriate to apply to 
     an Indian tribe, as they are, under section 9113(d), for 
     schools operated or supported by the Bureau of Indian Affairs 
     (BIA).
       Section 903, amount of grants [ESEA, Sec. 9113]. Section 
     903(1) of the bill would make a technical amendment to 
     section 9113(b)(2) of the ESEA, which allows consortia of 
     eligible LEAs to apply for grants.
       Section 903(2) would revise section 9113(d), relating to 
     grants to schools operated or supported by the BIA, to 
     clarify that those schools must submit an application to the 
     Secretary and that they are generally to be treated as LEAs 
     for the purpose of the formula grant program, except that 
     they are not subject to the statutory requirements relating 
     to parent committees, maintenance of effort, or submission of 
     grant applications to the SEA for review. These requirements 
     would be inappropriate to apply to these schools, as they 
     would be for Indian tribes that receive grants (in place of 
     an eligible LEA) under section 9112(b).
       Section 904, applications [ESEA, Sec. 9114]. Section 904(1) 
     of the bill would amend section 9114(b)(2)(A) of the ESEA, 
     relating to the consistency of an LEA's comprehensive program 
     to meet the needs of its Indian children with certain other 
     plans, to remove a reference to the Goals 2000: Educate 
     America Act (which would be consolidated into the new Title 
     II of the ESEA) and to require that the LEA's plan be 
     consistent with State and local plans under other provisions 
     of the ESEA, not just plans under Title I.
       Section 904(2) would amend section 9114(c) of the ESEA to 
     require that the local assessment of the educational needs of 
     its Indian students be comprehensive. This should help ensure 
     that these assessments provide useful guidance to LEAs and 
     parent committees in planning and carrying out projects.
       Section 904(3)(A) would amend ambiguous language in section 
     9114(c)(4)(B) of the ESEA to clarify that a majority of each 
     participating LEA's parent committee must be parents of 
     Indian children.
       Section 904(3)(B) would modify the standard for an LEA's 
     use of funds under this program to support a schoolwide 
     program under Title I of the ESEA, as is permitted by section 
     9115(c). Under the amendment, the parent committee would have 
     to determine that using program funds in that manner would 
     enhance, rather than simply not diminish, the availability of 
     culturally related activities for American Indian and Alaskan 
     Native students.
       Section 905, authorized services and activities [ESEA, 
     Sec. 9115]. Section 905(1) of the bill would make a 
     conforming amendment to section 9115(b)(5) of the ESEA to 
     reflect the renaming of the Perkins Act by P.L. 105-332.
       Section 905(4) would add four activities to the examples of 
     authorized activities in section 9115(b). These additions 
     would encourage LEAs to address the needs of American Indian 
     and Alaskan Native students in the areas of curriculum 
     development, creating and implementing standards, improving 
     student achievement, and gifted and talented education.
       Section 906, student eligibility forms [ESEA, Sec. 9116]. 
     Section 906(1) of the bill would make technical amendments to 
     section 9116(f) of the ESEA.
       Section 906(2) would amend section 9116(g) to permit tribal 
     schools operating under grants or contracts from the BIA to 
     use either their child counts that are certified by the BIA 
     for purposes of receiving funds from the Bureau or to use a 
     count of children for whom the school has eligibility forms 
     (commonly referred to as ``506 forms'') that meet the 
     requirements of section 9116. This choice would allow these 
     schools to avoid the burden of two separate child counts.
       Section 906(3) of the bill would add a new subsection (h) 
     to section 9116 of the ESEA to allow each LEA to select 
     either a particular date or period (up to 31 days) to count 
     the number of children it will claim for purposes of 
     receiving a grant.
       Section 907, payments [ESEA, Sec. 9117]. Section 907 of the 
     bill would delete obsolete language from section 9117 of the 
     ESEA, relating to payment of grants to LEAs.
       Section 908, State educational agency review [ESEA, 
     Sec. 9118]. Section 908 of the bill would rewrite section 
     9118 of the ESEA, relating to the submission of applications 
     to the Secretary and the review of those applications by 
     SEAs, in its entirety. As revised, section 9118 would not 
     contain current subsection (a), which requires LEAs to submit 
     applications to the Secretary, since that duplicates the 
     requirement in section 9114(a) of the ESEA, where it 
     logically belongs. The revised section would also improve the 
     clarity of the requirement that an LEA submit its application 
     to the SEA for its possible review.
       Section 909, improvement of educational opportunities for 
     Indian children [ESEA, Sec. 9121]. Section 909 of the bill 
     would amend section 9121 of the ESEA, which authorizes 
     support for a variety of projects, selected on a competitive 
     basis, to develop, test, and demonstrate the effectiveness of 
     services and programs to improve educational opportunities 
     for Indian children. In particular, the bill would amend 
     section 9121(d)(2), relating to project applications, to: (1) 
     clarify that certain application requirements do not apply in 
     the case of applicants for dissemination grants under 
     subsection (d)(1)(D); and (2) require applications for 
     planning, pilot, and demonstration projects to include 
     information demonstrating that the program is either a 
     research-based program or that it is a research-based program 
     that has been modified to be culturally appropriate for the 
     students who will be served, as well as a description of how 
     the applicant will incorporate the proposed services into the 
     ongoing school program once the grant period is over.
       Section 910, professional development [ESEA, Sec. 9122]. 
     Section 910 of the bill would amend section 9122 of the ESEA, 
     which authorizes training of Indian individuals in profession 
     in which they can serve Indian peoples. Section 910(1) of the 
     bill would repeal section; 9122(e)(2) of the Act, which 
     affords a performance to projects that train Indian 
     individuals. This provision, which was carried over from a 
     related program authorized before the 1994 amendments, has no 
     practical effect, since the only projects that have been 
     eligible since 1994 are those that train Indians.
       Section 910(2) would amend section 9122(h)(1), which 
     requires individuals who receive training under section 9122 
     to perform related work that benefits Indian people or repay 
     the assistance they received, so that it would continue to 
     apply to preservice training, but would not apply to in-
     service training. Individuals receiving in-service training 
     are already serving Indian people, and that training is 
     relatively inexpensive to the taxpayers, is generally of 
     short duration, and frequently does not involve an 
     established per-person cost of participating, such as the 
     substantial tuition and fees that are charged by colleges for 
     preservice degree courses and programs.
       Section 910(3) of the bill would add to section 9122 a new 
     authority for grants to consortia to provide in-service 
     training to teachers in LEAs with substantial numbers of 
     Indian children in their schools, so that these teachers can 
     better meet the needs of Indian children in their classrooms. 
     An eligible consortium would consist of a tribal college and 
     an institution of higher education

[[Page 11443]]

     that awards a degree in education, or either or both of those 
     entities along with one or more tribal schools, tribal 
     educational agencies, or LEAs serving Indian children. This 
     new authority will help ensure that classroom teachers are 
     aware of, and responsive to, the unique needs of the Indian 
     children they teach.
       Section 911, repeal of authorities [ESEA, Sec. Sec. 9123, 
     9124, 9125, and 9131]. Section 911 of the bill would repeal 
     various sections of Part A of Title IX of the ESEA that have 
     not been recently funded and for which the Administration is 
     not requesting funds for fiscal year 2000. The goals of these 
     provisions (fellowships for Indian students, gifted and 
     talented education, tribal administrative planning and 
     development, and adult education) are more effectively 
     addressed through other programs. Because Subpart 3 of Part A 
     would be repealed, section 911 would also redesignate the 
     remaining subparts.
       Section 912, Federal administration [ESEA, Sec. Sec. 9152 
     and 9153]. Section 912 of the bill would make technical 
     amendments to sections 9152 and 9153 of the ESEA, to reflect 
     the proposed repeal of Subpart 3 and the redesignation of the 
     remaining subparts.
       Section 913, authorization of appropriations [ESEA, 
     Sec. 9162]. Section 913 of the bill would amend section 9162 
     of the ESEA to authorize appropriations for the Indian 
     education program under Part A of Title IX of the ESEA 
     through fiscal year 2005.
     Part B--Native Hawaiian Education Act
       Sec. 921, Native Hawaiian Education. Section 901 of the 
     bill would amend Part B of title IX of the ESEA in order to 
     replace a series of categorical programs serving Native 
     Hawaiian children and adults with a single, more flexible 
     authority to accomplish those purposes. In addition to 
     technical and conforming changes, section 901 of the bill 
     would repeal sections 9204 through 9210 of the ESEA. In place 
     of the repealed sections, section 901 of the bill would 
     insert a new section 9204 of the ESEA that would permit all 
     of the types of activities currently carried out under the 
     program to continue. However, it would give the Department 
     more flexibility in operating the program in a manner that 
     meets the educational needs of Native Hawaiian children and 
     adults.
       Proposed new section 9204 (``Program Authorized'') of the 
     ESEA would authorize the new Native Hawaiian Education 
     program. Proposed new section 9204(a) would authorize the 
     Secretary to award grants or enter into contracts with, 
     Native Hawaiian educational organizations, Native Hawaiian 
     community-based organizations, public and private non-profit 
     organizations, agencies, or institutions that have experience 
     in developing Native Hawaiian programs of instruction in the 
     Native Hawaiian language, and consortia of these 
     organizations, agencies, or institutions to carry out Native 
     Hawaiian Education programs.
       Permissible Native Hawaiian Education programs under Part B 
     of Title IX of the ESEA would include: (1) the operation of 
     one or more councils to coordinate the provisions of 
     education and related services and programs available to 
     Native Hawaiians; (2) the operation of family-based education 
     centers; (3) activities to enable Native Hawaiians to enter 
     and complete programs of postsecondary education; (4) 
     activities that address the special needs of gifted and 
     talented Native Hawaiian students; (5) activities to meet the 
     special needs of Native Hawaiian students with disabilities; 
     (6) the development of academic and vocational curricula to 
     address the needs of Native Hawaiian children and adults, 
     including curriculum materials in the Hawaiian language and 
     mathematics and science curricula that incorporate Native 
     Hawaiian tradition and culture; (7) the operation of 
     community-based learning centers that address the needs of 
     Native Hawaiian families and communities through the 
     coordination of public and private programs and services; and 
     (8) other activities, consistent with the purposes of this 
     part, to meet the educational needs of Native Hawaiian 
     children and adults.
       Proposed new section 9204(b) of the ESEA would authorize 
     the appropriation of such sums as may be necessary for each 
     of the fiscal years 2001 through 2005 to carry out Part B of 
     Title IX of the ESEA.
     Part C--Alaska Native Education
       Sec. 931, Alaska Native Education. Section 902 of the bill 
     would amend Part C of title IX of the ESEA in order to 
     replace a series of categorical programs serving Alaska 
     Natives with a single, more flexible authorization to 
     accomplish those purposes. In addition to technical and 
     conforming changes, section 902 of the bill would repeal 
     sections 9304 through 9306 of the ESEA. In place of the 
     repealed sections, section 902 of the bill would insert a new 
     section 9304 of the ESEA that would permit all of the types 
     of activities currently carried out under the program to 
     continue. However, it would give the Department more 
     flexibility in operating the program in a manner that meets 
     the educational needs of Alaska Native children and adults.
       Proposed new section 9304 (``Program Authorized'') of the 
     ESEA would authorize the new Alaska Native Education program. 
     Proposed new section 9304(a) would authorize the Secretary to 
     make grants to, or enter into contracts with, Alaska Native 
     organizations, educational entities with experience in 
     developing or operating Alaska Native programs or programs of 
     instruction conducted in Alaska Native languages, and to 
     consortia of these organizations and entities to carry out 
     programs that meet the purposes of this part.
       The activities that would be carried out under this section 
     include: (1) the development and implementation of plans, 
     methods, and strategies to improve the education of Alaska 
     Natives; (2) development of curricula and educational 
     programs to address the educational needs of Alaska Native 
     students; (3) professional development activities for 
     educators; (4) the development and operation of home 
     instruction programs for Alaska Native preschool children; 
     (5) the development and operation of student enrichment 
     programs in science and mathematics; (6) research and data-
     collection activities to determine the educational status and 
     needs of Alaska Native children and adults; and (7) other 
     activities, consistent with the purposes of this part, to 
     meet the educational needs of Alaska Native children and 
     adults.
       Proposed new section 9304(b) of the ESEA would authorize 
     the appropriation of such sums as may be necessary for each 
     of the fiscal years 2001 through 2005 to carry out Part C of 
     Title IX of the ESEA.


               title x--programs of national significance

       Section 1001. Fund for the Improvement of Education. 
     Section 1001 of the bill would amend Part A of Title X of the 
     ESEA, which authorizes funds to support nationally 
     significant programs and projects to improve the quality of 
     elementary and secondary education, to assist students to 
     meet challenging State content standards and challenging 
     State performance standards, and to contribute to the 
     achievement of America's Education Goals.
       Section 1001(1)(A) of the bill would amend section 10101(a) 
     of the ESEA to emphasize that the Fund for the Improvement of 
     Education (FIE) is a program focused on improving elementary 
     and secondary education.
       Section 1001(1)(B) of the bill would amend section 10101(b) 
     of the ESEA to strengthen the program by focusing the 
     authorized use of funds more narrowly. Authorized activities 
     would include: (1) development, evaluation, and other 
     activities designed to improve the quality of elementary and 
     secondary education; (2) the development, implementation, and 
     evaluation of programs designed to foster student community 
     service, encourage responsible citizenship; and improve 
     academic learning; (3) the identification and recognition of 
     exemplary schools and programs, such as Blue Ribbon Schools; 
     (4) activities to study and implement strategies for creating 
     smaller learning communities; (5) programs under section 
     10102 and section 10103; (6) activities to promote family 
     involvement in education; and (7) other programs that meet 
     the purposes of this section.
       Section 1001(1)(C) of the bill would amend section 10101(c) 
     of the ESEA to require an applicant for an award to establish 
     clear goals and objectives for its project and describe the 
     activities it will carry out in order to meet these goals and 
     objectives. It would also require recipients of funds to 
     report to the Secretary such information as may be required, 
     including evidence of its progress towards meeting the goals 
     and objectives of its project, in order to determine the 
     project's effectiveness. This change would emphasize the 
     Department's desire to ensure that the effectiveness of all 
     funded projects can be fully assessed. This language is also 
     aligned with the performance indicators in the FIE plan under 
     GPRA.
       This section of the bill would also allow the Secretary to 
     require recipients of awards under this part to provide 
     matching funds from sources other than Federal funds, and to 
     limit competitions to particular types of entities, such as 
     State or local educational agencies.
       Section 1001(1)(D) of the bill would amend section 10101(d) 
     of the ESEA to authorize such sums as may be necessary to 
     carry out this part through fiscal year 2005.
       Section 1001(1)(E) of the bill would redesignate section 
     10101(d) of the ESEA as section 10101(e) and add a new 
     requirement that each recipient of a grant under this section 
     to submit a comprehensive evaluation on the effectiveness of 
     its program in achieving its goals and objectives, including 
     the impact of the program on students, teachers, 
     administrators, and parents, to the Secretary, by the mid-
     point of the program, and no later than one year after 
     completion of the program.
       Section 1001(2) of the bill would repeal section 10102 of 
     the ESEA.
       Section 1001(3) of the bill would make substantial changes 
     to section 10103 of the ESEA, relating to Character 
     Education. It would provide for more funding flexibility by 
     removing the limit of 10 character education grants per year 
     and maximum award of $1 million to SEAs, and instead 
     authorize the Secretary to make up to 5-year grants to SEAs, 
     LEAs, or consortia of educational agencies for the design and 
     implementation of character education programs. These 
     programs would be required to be linked to the applicant's 
     overall reform efforts, performance standards, and activities 
     to improve

[[Page 11444]]

     school climate. Allowing LEAs and consortia of educational 
     agencies to apply would increase flexibility to fund 
     innovative programs in school districts where the State is 
     not interested in making an application.
       Section 1001(3) of the bill would also streamline the 
     application requirements under current law. The application 
     would include: (1) a description of any partnership and other 
     collaborative effort between the applicant and other 
     educational agencies; (2) a description of the program's 
     goals and objectives; (3) a description of activities to be 
     carried out by the applicant; (4) a description of how the 
     programs will be linked to broader educational reforms being 
     instituted by the applicant and applicable State and local 
     standards for student performance; (5) a description of how 
     the applicant will evaluate its progress in meeting its goals 
     and objectives; and (6) such other information as the 
     Secretary may require.
       Finally, section 1001(3) of the bill would require the 
     Secretary to make awards that serve different areas of the 
     Nation, including urban, suburban, and rural areas.
       Section 1001(4) of the bill would redesignate section 10103 
     of the ESEA, as amended by section 1001(3), as section 10102, 
     and add a proposed new section 10103 of the ESEA. 
     Specifically, proposed new section 10103 (``State and Local 
     Character Education Program'') of the ESEA would authorize a 
     new program, under which the Secretary could make awards to 
     SEAs, LEAs, institutions of higher education (IHEs), tribal 
     organizations, and other public or private agencies to carry 
     out research, development, dissemination, technical 
     assistance, and evaluation activities that support character 
     education programs under new section 10102 of the ESEA.
       Proposed new section 10103(b) of the ESEA would authorize 
     funds under this section to be used to: (1) conduct research 
     and development activities; (2) provide technical assistance 
     to the agencies receiving awards under the program, 
     particularly on matters of program evaluation; (3) conduct a 
     national evaluation of the character education program; and 
     (4) compile and disseminate information on model character 
     education programs, character education materials and 
     curricula, research findings in the area of character 
     education, and any other information that would be useful to 
     character education program participants, and to other 
     educators and administrators, nationwide.
       Section 1001(5) of the bill would repeal sections 10104, 
     10105, 10106, and 10107 of the ESEA.
       Section 1002. Gifted and Talented Children. Section 1002 of 
     the bill would reauthorize and make minor improvements to 
     Part B of Title X of the ESEA, which provides financial 
     assistance to State and local educational agencies, 
     institutions of higher education, and other public and 
     private agencies to build a nationwide capability in 
     elementary and secondary schools to meet the special 
     educational needs of gifted and talented students.
       Section 1002(1) would make a technical change to the 
     program's short title.
       Section 1002(2) of the bill would amend section 10204(c) of 
     the ESEA to require the National Center for Research and 
     Development in the Education of Gifted and Talented Children 
     to focus the dissemination of the results of its activities 
     to schools with high percentages of economically 
     disadvantaged students. This modification would help to 
     overcome the Center's current lack of targeting on low-income 
     schools and school districts.
       Section 1002(3) of the bill would amend section 10206(b) of 
     the ESEA to require the Secretary to use a peer-review 
     process in reviewing applications under this part, and ensure 
     that the information on the activities and results of 
     programs and projects funded under this part is disseminated 
     to appropriate State and local agencies and other appropriate 
     organizations.
       Section 1002(4) of the bill would amend section 10207 of 
     the ESEA to authorize such sums as may be necessary to carry 
     out the Gifted and Talented Children program through fiscal 
     year 2005.
       Section 1003. International Education Exchange. Section 
     1003 of the bill would: (1) move the International Education 
     Exchange program from Title VI of the Goals 2000: Educate 
     America Act (P.L. 103-227) to Part C of Title X of the ESEA; 
     (2) authorize the appropriation of such sums as may be 
     necessary to carry out this program through fiscal year 2005; 
     and (3) add the Republic of Ireland, Northern Ireland, and 
     any other emerging democracy in a developing country to the 
     definition of ``eligible country.''
       Section 1004. Arts in Education. Section 1004 of the bill 
     would reauthorize and streamline Part D of Title X of the 
     ESEA, which provides financial assistance to support 
     education reform by strengthening arts education as in 
     integral part of the elementary and secondary school 
     curriculum.
       Section 1004(1) of the bill would strike out the heading 
     and designation of Subpart 1 of Part D of Title X of the 
     ESEA.
       Section 1004(2)(A) of the bill would amend section 10401(d) 
     of the ESEA by adding a new authorized activity, model arts 
     and cultural programs in the arts for at-risk children and 
     youth, particularly programs that use arts and culture to 
     promote students' academic progress, to the list of 
     authorized activities of the Arts in Education program.
       Section 1004(2)(B) of the bill would amend section 10401(f) 
     of the ESEA to authorize the appropriation of such sums as 
     may be necessary to carry out this part through fiscal year 
     2005.
       Section 1004(3) of the bill would repeal Subpart 2 of Part 
     D of Title X of the ESEA. This subpart has never been funded, 
     and the addition of the authorized activity in section 
     10401(d) of the ESEA, noted above, would provide a more 
     flexible authorization for projects serving at-risk children 
     and youth.
       Section 1005. Inexpensive Book Distribution Program. 
     Section 1005 of the bill would reauthorize without change 
     Part E of Title X of the ESEA through fiscal year 2005. This 
     program supports Reading is Fundamental, under which 
     inexpensive books are distributed to students to motivate 
     them to read.
       Section 1006. Civic Education. Section 1006 of the bill 
     would reauthorize and streamline Part F of Title X of the 
     ESEA, which authorizes a program to educate students about 
     the history and principles of the Constitution of the United 
     States, including the Bill of Rights, and to foster civic 
     competence and responsibility.
       Section 1006 of the bill would repeal the unfunded 
     instruction in Civics, Government, and the Law program under 
     section 10602 of the ESEA, authorize the appropriation of 
     such sums as may be necessary to carry out this part through 
     fiscal year 2005, and make conforming changes.
       Section 1007. Allen J. Ellender Program. Section 1007 of 
     the bill would repeal Part G of Title X of the ESEA.
       Section 1008. 21st Century Community Learning Centers. 
     Section 1008 of the bill would reauthorize and improve Part I 
     of Title X of the ESEA, which authorizes grants to rural and 
     inner-city public schools to plan, implement, or expand 
     projects that benefit the educational, health, social 
     service, cultural, and recreational needs of a rural or 
     inner-city community.
       Section 1008(1) of the bill would amend section 10902 of 
     the ESEA to update the findings.
       Section 1008(2)(A) of the bill would amend section 10903(a) 
     of the ESEA by adding language to current law to clarify that 
     the Secretary may award grants to LEAs and community based 
     organizations (CBOs) (with up to 10% of the funds 
     appropriated to carry out this part for any fiscal year) on 
     behalf of public elementary or secondary schools in inner-
     cities, rural areas, and small cities. In both cases, awards 
     would be limited to schools or CBOs that serve communities 
     with a substantial need for expanded learning opportunities 
     due to: their high proportion of low-achieving students; lack 
     of resources to establish or expand community learning 
     centers; or other needs consistent with the purposes of this 
     part.
       Section 1008(2)(B) of the bill would retain the current 
     requirement in section 10903(b) for equitable distribution 
     among the States and urban and rural areas of the United 
     States, but would delete the provision requiring equitable 
     distribution among urban and rural areas of a State.
       Section 1008(2)(C) of the bill would amend section 10903(c) 
     of the ESEA to change the duration of grants awarded under 
     this part from 3-years to 5-years.
       Section 1008(3)(A) of the bill would amend section 10904 of 
     the ESEA to change the eligible applicant for a grant under 
     this part from a school to an LEA (which would apply on 
     behalf of one or more schools) or a community-based 
     organization. This provision of the bill would also add a new 
     requirement that the applicant provide information that it 
     will provide at least 50 percent of the cost of the project 
     from other sources, which may include other Federal funds and 
     may be provided in cash or in kind, fairly evaluated. The 
     applicant would also be required to provide an assurance that 
     in each year of the project, it will expend, from non-Federal 
     sources, at least as much for the services under this part as 
     it expended for the preceding year and information 
     demonstrating how the applicant will continue the project 
     after completion of the grant.
       Paragraph (3)(B) of section 1008 of the bill would amend 
     section 10904(b) of ESEA to require the Secretary to give 
     priority, in all competitions, to applications that offer a 
     broad selection of services that address the needs of the 
     community, and applications that offer significant expanded 
     learning opportunities for children and youth in the 
     community. This provision of the bill would also add a new 
     requirement to section 10904 of the ESEA that an application 
     submitted by a CBO must obtain evidence that affected LEAs 
     concur with the project.
       Section 1008(4) of the bill would amend section 10905 of 
     the ESEA to require that applicants provide expanded learning 
     opportunities and eliminate the requirement that applicants 
     include at least four of the activities listed in this 
     section. Instead, applicants must provide educational 
     activities and may provide a range of other services to the 
     community.
       Section 1008(5) of the bill would amend section 10906 of 
     the ESEA to clarify the definition of ``community learning 
     center'' as an entity that provides expanded learning 
     opportunities, and may also provide services

[[Page 11445]]

     that address health, social service, cultural, and 
     recreational needs of the community. It would also add a 
     special rule to require a community learning center operated 
     by a local educational agency (but not a CBO) to be located 
     within a public elementary or secondary school building.
       Section 1008 (6) of the bill would amend section 10907 of 
     the ESEA to authorize the appropriation of such sums as may 
     be necessary to carry out this part through fiscal year 2005.
       Section 1008(7) of the bill would add a proposed new 
     section 10908 (``Continuation Awards'') to the ESEA that 
     would allow the Secretary to use funds appropriated under 
     this part to make continuation awards for projects that were 
     funded with fiscal year 1999 and 2000 funds, under the terms 
     and conditions that applied to the original awards. This 
     provision would have the effect of allowing the Department to 
     provide continuous funding for the last year of 3-year grants 
     made in fiscal year 1998 under the provisions of current law.
       Section 1008(8) of the bill would redesignate Part I of 
     Title X of the ESEA as Part G of that title and make 
     conforming changes.
       Section 1009. Urban and Rural Education Assistance. Section 
     1009 of the bill would repeal Part J of Title X of the ESEA.
       Section 1010. High School Reform. Section 1010 of the bill 
     would add a new Part H, High School Reform, to Title X of the 
     ESEA.
       Proposed new section 10801 (``Purposes'') of the ESEA would 
     state the congressional findings that support this new 
     program. Subsection (b) would provide that the purposes of 
     Part H are to: (1) support the planning and implementation of 
     educational reforms in high schools, particularly in urban 
     and rural high schools that educate concentrations of 
     students from low-income families; (2) support the further 
     development of educational reforms, designed specifically for 
     high schools, that help students meet challenging State 
     standards, and that increase connections between students and 
     adults and provide safe learning environments; (3) create 
     positive incentives for serious change in high schools, by 
     offering rewards to participating schools that achieve 
     significant improvements in student achievement; (4) increase 
     the national knowledge base on effective high school reforms 
     by identifying the most effective approaches and 
     disseminating information on those approaches so that they 
     can be adopted nationally; and (5) support the implementation 
     of reforms in at least 5,000 American high schools by the 
     year 2007.
       Proposed new section 10802 (``Grants to Local Education 
     Agencies'') of the ESEA would authorize the Secretary to make 
     competitive grants to LEAs to carry out the program's 
     purposes in their high schools. Subsection (b) would 
     establish a maximum grant period of three years for each 
     grant. Subsection (c) would provide that a particular high 
     school could not be assisted by more than one grant. An LEA 
     could thus serve one or more of its high schools with one 
     grant and one or more different high schools with a 
     subsequent grant.
       Proposed new section 10803 (``Applications'') of the ESEA 
     would require an LEA that desires a grant to submit an 
     application and describe the information that must be 
     included.
       Proposed new section 10804 (``Selection of Grantees'') of 
     the ESEA would establish the procedures and criteria the 
     Secretary would use in selecting grantees.
       Proposed new section 10805 (``Principles and Components of 
     Educational Reforms'') of the ESEA would describe the 
     outcomes that participating high schools are expected to 
     achieve, and would identify the components of the educational 
     reforms that would have to be carried out in those schools in 
     order to attain those outcomes.
       Proposed new section 10806 (``Private Schools'') of the 
     ESEA would provide for the equitable participation of 
     personnel from private schools in any professional 
     development carried out with Part H funds. A grantee that 
     uses Part H funds to develop curricular materials would also 
     be required to make information about those materials 
     available to private schools at their request.
       Proposed new section 10807 (``Additional Activities'') of 
     the ESEA would direct the Secretary to reserve funds from 
     each year's appropriation for Part H to carry out certain 
     activities relating to the program's purpose, including 
     testing the effect of offering financial rewards to teachers 
     and administrators in high schools if their students 
     demonstrate significant gains in educational outcomes.
       Proposed new section 10808 (``Definition'') of the ESEA 
     would define the term ``high school'' as used in part H.
       Finally, proposed new section 10809 (``Authorization of 
     Appropriations'') of the ESEA would authorize the 
     appropriation of such sums as may be necessary for fiscal 
     years 2001 through 2005 to carry out Part H.
       Section 1011. Elementary School Foreign Language Assistance 
     Program. Section 1011 of the bill would revise and move the 
     ``Foreign Language Assistance Program'', currently in Part B 
     of Title VII of the ESEA, to Title X of the ESEA, as new Part 
     I. Proposed new Part I would seek to expand, improve the 
     quality of, and enhance foreign language programs at the 
     elementary school level by supporting State efforts to 
     encourage and support such programs, local implementation of 
     innovative programs that meet local needs, and identification 
     and dissemination of information on best practices in 
     elementary school foreign language education.
       Proposed new section 10901 of the ESEA (``Findings; 
     Purpose'') would set forth the findings and purpose of the 
     part.
       Proposed new section 10902 of the ESEA (``Elementary School 
     Foreign Language Assistance Program'') would authorize the 
     Elementary School Foreign Language Assistance Program. 
     Proposed new section 10902(a) of the ESEA would authorized 
     the Secretary, from funds appropriated under subsection (g) 
     for any fiscal year, to make grants to SEAs and to LEAs for 
     the Federal share of the cost of the activities set forth in 
     subsection (b). Each grant under paragraph (1) would be 
     awarded for a period of three years.
       Under proposed new section 10902(a)(3), an SEA could 
     receive a grant under the section if it: (1) has established, 
     or is establishing, State standards for foreign language 
     instruction; or (2) requires the public elementary schools of 
     the State to provide foreign language instruction.
       Under proposed new section 10902(a)(4), an LEA could 
     receive a grant under the section if the program in its 
     application: (1) shows promise of being continued beyond the 
     grant period; (2) would demonstrate approaches that can be 
     disseminated to, and duplicated by, other LEAs; (3) would 
     include performance measurements and assessment systems that 
     measure students' proficiency in a foreign language; and (4) 
     would use curriculum that is aligned with State standards, if 
     the State has such standards.
       Proposed new section 10902(b)(1) would require that grants 
     to SEAs under this section be used to support programs that 
     promote the implementation of high-quality foreign language 
     programs in the elementary schools of the State, which may 
     include: (1) developing foreign language standards and 
     assessments that are aligned with those standards; (2) 
     supporting the efforts to institutions of higher education 
     within the State to develop programs to prepare the 
     elementary school foreign language teachers needed in schools 
     within the State and to recruit candidates to prepare for, 
     and assume, such teaching positions; (3) developing new 
     certification requirements for elementary school foreign 
     language teachers, including requirements that allow for 
     alternative routes to certification; (4) providing technical 
     assistance to LEAs in the State in developing, implementing, 
     or improving elementary school foreign language programs, 
     including assistance to ensure effective coordination with, 
     and transition for students between, elementary, middle, and 
     secondary schools; (5) disseminating information on promising 
     or effective practices in elementary school foreign language 
     instruction, and supporting educator networks that help 
     improve that instruction; (6) stimulating the development and 
     dissemination of information on instructional programs that 
     use educational technologies and technology applications 
     (including such technologies and applications as multimedia 
     software, web-based resources, digital television, and 
     virtual reality and wireless technologies) to deliver 
     instruction or professional development, or to assess 
     students' foreign language proficiency; and (7) collecting 
     data on and evaluating the elementary school foreign language 
     programs in the State and the activities carried out with the 
     grant.
       Proposed new section 10902(b)(2) would require that grants 
     to LEAs under this section be used for activities to develop 
     and implement high-quality, standards-based elementary school 
     foreign language programs, which may include: (1) curriculum 
     development and implementation; (2) professional development 
     for teachers and other staff; (3) partnerships with 
     institutions of higher education to provide for the 
     preparation of the teachers needed to implement programs 
     under this section; (4) efforts to coordinate elementary 
     school foreign language instruction with secondary-level 
     foreign language instruction, and to provide students with a 
     smooth transition from elementary to secondary programs; (5) 
     implementation of instructional approaches that make use of 
     advanced educational technologies; and (6) collection of data 
     on, and evaluation of, the activities carried out under the 
     grant, including assessment, at regular intervals, of 
     participating students' proficiency in the foreign language 
     studied. Proposed new section 10902(b)(3) would allow efforts 
     under the fourth LEA activity described above to include 
     support for the expansion of secondary school instruction, so 
     long as that instruction is part of an articulated 
     elementary-through-secondary school foreign language program 
     that is designed to result in student fluency in a foreign 
     language.
       Proposed new section 10902(c)(1) would require any SEA or 
     LEA desiring to receive an grant under this section to submit 
     an application to the Secretary at such time, in such form, 
     and containing such information and assurances, as the 
     Secretary may require. Each application would be required to 
     include a description of: (1) the goals that the applicant 
     will attempt to accomplish through the project; (2) the 
     activities to be carried out through the project; and (3) how 
     the applicant will determine the extent to which the project 
     meets its goals.

[[Page 11446]]

       Proposed new section 10902(d) would authorize the 
     secretary, in awarding grants under this section, to 
     establish one or more priorities consistent with the purpose 
     of this part, including priorities of projects carried out by 
     LEAs that include immersion programs in which instruction is 
     in the foreign language for a major portion of the day or 
     that promote the sequential study of a foreign language for 
     students, beginning in elementary schools.
       Proposed new section 10902(e) would require an SEA or LEA 
     that receives a grant under this section to submit to the 
     Secretary an annual report that provides information on the 
     project's progress in reaching its goals. An LEA that 
     receives a grant under this section would be required to 
     include in its report information on students' gains in 
     comprehending, speaking, reading and writing a foreign 
     language, and compare such educational outcomes to the 
     State's foreign language standards, if such State standards 
     exist.
       Proposed new section 10902(f) would require that the 
     Federal share of a program under this section for each fiscal 
     year be not more than 50 percent. The Secretary would be 
     authorized to waive the requirement of cost sharing for any 
     LEA that the Secretary determines does not have adequate 
     resources to pay the non-Federal share of the cost of the 
     activities assisted under this section.
       Proposed new section 10902(g)(1) would authorize 
     appropriations of such sums as may be necessary for fiscal 
     year 2001 and for each of the four succeeding fiscal years 
     for the purpose of carrying out this section. Proposed new 
     section 10902(g)(2) would, for any fiscal year, authorize the 
     Secretary to reserve up to five percent of the amount 
     appropriated to: (1) conduct independent evaluations of the 
     activities assisted under this section; (2) provide technical 
     assistance to recipients of awards under this section; and 
     (3) disseminate findings and methodologies from evaluations 
     required by, or funded under, this section and other 
     information obtained from such programs.
       Section 1012. National Writing Project. Section 1012 of the 
     bill would reauthorize and improve Part K of Title X of the 
     ESEA, which authorizes a grant to the National Writing 
     Project for the improvement of the quality of student writing 
     and learning, and the teaching of writing as a learning 
     process.
       Section 1012 of the bill would: (1) amend section 10991 of 
     the ESEA to update the findings; (2) amend section 10992 of 
     the ESEA to authorize the Secretary to conduct an independent 
     evaluation of the National Writing Project program; (3) 
     authorize the appropriation of such sums as may be necessary 
     to carry out his program through fiscal year 2005; and (4) 
     make conforming changes.


     Title XI--General Provisions, Definitions, and Accountability

       Title XI of the bill would amend Title XIV of the ESEA 
     containing general provisions relating to that Act.
       Section 1101. Definitions. Section 1101 of the bill would 
     amend various provisions of Part A of Title XIV of the ESEA 
     to: (1) amend the definition of the term ``covered program;'' 
     (2) add a new definition for the term ``family literacy 
     services;'' and (3) make a number of cross-reference changes 
     from provisions and parts in Title XIV of the ESEA to 
     provisions and parts in Title XI of the ESEA to reflect the 
     redesignation of Title XIV as Title XI by section 1109 of the 
     bill. As amended, covered programs would be: Part A of Title 
     I; Part C of Title I; Part A of Title II; Subpart 1 of Part D 
     of Title III; Part A of Title IV (other than section 4115), 
     the Comprehensive School Reform Demonstration Program, and 
     Title VI of the ESEA. The term ``family literacy services'' 
     would mean services provided to eligible participants on a 
     voluntary basis that are of sufficient intensity, both in 
     hours and duration, to make sustainable changes in a family, 
     and that integrate interactive literacy activities between 
     parents and their children, training for parents on how to be 
     the primary teachers for their children and full partners in 
     the education of their children, parent literacy training 
     leading to self-sufficiency, and an age-appropriate education 
     to prepare children for success in school and life 
     experiences.
       Section 1102. Administrative Funds. Section 1102 of the 
     bill would amend various provisions of Part B of Title XIV of 
     the ESEA to: (1) revise the list of programs that are subject 
     to the authority to consolidate State administrative funds; 
     (2) expand the list of additional uses for consolidated 
     administrative funds; (3) clarify that local consolidated 
     administrative funds may be used at the school district and 
     school level; and (4) clarify the circumstances under which 
     an LEA may transfer a portion of its funds under one covered 
     program to another covered program.
       Paragraph (1)(A) of section 1102 of the bill would revise 
     the list of programs in section 14201(a)(2) of the ESEA whose 
     administrative funds may be consolidated to include programs 
     under Title I, Part A of Title II, Subpart 1 of Part D of 
     Title III, and Part A of Title IV (other than section 4115) 
     of the ESEA, the Comprehensive School Reform Demonstration 
     Program, Title VI of the ESEA (Class Size Reduction), the 
     Carl D. Perkins Vocational and Technical Education Act of 
     1998, and such other programs as the Secretary may designate.
       Paragraph (1)(B) of section 1102 of the bill would amend 
     section 14201(b)(2) of the ESEA to revise the list of 
     additional uses for the consolidated administrative funds to 
     include: (1) State level activities designed to carry out 
     Title XI (the redesignated general provisions title) 
     including Part B (accountability); (2) coordination of 
     included programs with other Federal and non-Federal 
     programs; (3) the establishment and operation of peer-review 
     mechanisms under the ESEA; (4) collaborative activities with 
     other State educational agencies to improve administration 
     under the Act; (5) the dissemination of information regarding 
     model programs and practices; (6) technical assistance under 
     the included programs; (7) training personnel engaged in 
     audit and other monitoring activities; and (8) implementation 
     of the Cooperative Audit Resolution and Oversight Initiative. 
     (Items (1), (4), (7), and (8) provide new authority.)
       Paragraph (1)(C) of section 1102 of the bill would 
     eliminate an outdated cross-reference to the Goals 2000: 
     Educate America Act.
       In addition to making conforming changes, section 1102(2) 
     of the bill would make a clarifying change to section 14203 
     of the ESEA (Consolidation of Funds for Local Administration) 
     to make clear that an LEA may use local consolidated funds at 
     the school district and school levels for uses comparable to 
     those described above for consolidated State administrative 
     funds.
       Paragraph (3) of section 1102 of the bill would repeal 
     section 14204 of the ESEA (Administrative Funds Studies). 
     Paragraph (4) of section 1102 of the bill would make 
     conforming amendments.
       Paragraph (5) of section 1102 of the bill would make 
     conforming amendments, and would also amend section 14206(a) 
     of the ESEA to authorize an LEA that determines for any 
     fiscal year that funds under one covered program (other than 
     Part A of Title I) would be more effective in helping all its 
     students achieve the State's challenging standards if used 
     under another covered program, to use such funds (not to 
     exceed five percent of the LEA's total allotment under that 
     program) to carry out programs or activities under the other 
     covered program. The LEA would be required to obtain the 
     approval of its SEA for this use.
       Section 1103. Coordination of Programs. Section 1103 of the 
     bill would amend provisions of Part C of Title XIV of the 
     ESEA relating to consolidated State plans and consolidated 
     local plans and add a new section on consolidated State 
     reporting.
       Section 1103(1) of the bill would make an editorial change 
     to the heading for the Part. Section 1103(2) of the bill 
     would substantially revise section 14302 of the ESEA 
     (Optional Consolidated State Plans), which provides authority 
     for an SEA to submit a consolidated State plan instead of 
     separate State plans for the programs covered by that 
     section.
       Proposed new section 14302(a)(1) of the ESEA would direct 
     the Secretary to establish procedures and criteria under 
     which a State educational agency may submit a consolidated 
     State plan meeting the requirements of proposed new section 
     14302. An SEA would be authorized to submit a consolidated 
     State plan for any or all of the covered programs in which 
     the State participates and the additional programs described 
     in proposed new section 14302(a)(2) of the ESEA. These 
     additional programs include: (1) the Even Start program under 
     Part of Title I; (2) the Neglected or Delinquent program 
     under Part D of Title I; (3) programs under Title Part A of 
     Title II of the Carl D. Perkins Vocational and Technical 
     Education Act of 1998; and (4) such other programs as the 
     Secretary may designate.
       Proposed new section 14302(a)(3) of the ESEA would provide 
     for the State development and submission of a consolidated 
     State plan. Under proposed new section 14302(a)(3)(A), an SEA 
     desiring to receive a grant under two or more programs to 
     which the section applies would be authorized to submit a 
     consolidated State plan. Under proposed new section 
     14302(a)(3)(B) of the ESEA, that agency would not be required 
     to submit a separate State plan for the programs included in 
     the consolidated State plan. Proposed new section 
     14302(a)(3)(C) of the ESEA would provide that the SEA must 
     comply with all legal requirements applicable to the programs 
     included in the consolidated State plan as if it had 
     submitted separate State plans.
       Proposed new section 14302(a)(4) would specify that an SEA 
     desiring to receive funds under a program subject to section 
     14302 of the ESEA for fiscal year 2001 and the succeeding 
     four fiscal years must submit a new consolidated State plan 
     meeting the requirements of that section.
       Proposed new section 14302(b) of the ESEA would provide for 
     the content of a consolidated State plan. Proposed section 
     14302(b)(1) would direct the Secretary to collaborate with 
     SEAs and other named parties in establishing criteria and 
     procedures. Through this collaborative process, the Secretary 
     would establish for each program the descriptions and 
     information that must be included in the plan. Proposed new 
     section 14302(b)(1) of the ESEA would further direct the 
     Secretary to ensure that a consolidated State plan contains, 
     for each program included in the plan,

[[Page 11447]]

     the descriptions and information needed to ensure proper and 
     effective administration of that program in accordance with 
     its purposes. This provision is designed to strengthen the 
     consolidated plan as an instrument of effective 
     administration of each program included.
       Proposed new section 14302(b)(2) of the ESEA would require 
     an SEA to describe in its plan how funds under the included 
     programs will be integrated to best serve the needs of the 
     students and teachers intended to benefit and how such funds 
     will be coordinated with other covered programs not included 
     in the plan and related programs.
       Proposed new section 14302(c) of the ESEA would require an 
     SEA to include in its consolidated State plan any information 
     required by the Secretary under proposed new section 11912 of 
     the ESEA regarding performance indicators, benchmarks and 
     targets and any other indicators or measures that the State 
     determines are appropriate for evaluating its performance.
       Proposed new section 14302(d) would require an SEA to 
     include in its consolidated State plan a description of the 
     strategies it will use under proposed new sections 11503(a) 
     (4) and (5) (relating to State monitoring and data 
     integrity).
       Proposed new section 14302(e) of the ESEA would establish 
     procedures for peer review and Secretarial approval. The 
     Secretary would be required to establish a peer review 
     process to assist in the review of consolidated State plans 
     and provide recommendations for revision. To the extent 
     practicable, the Secretary would be directed by proposed new 
     section 14302(e)(1) to appoint individuals who: (1) are 
     knowledgeable about the programs and target populations; (2) 
     are representative of SEAs, LEAs, and teachers and parents of 
     students served under the programs, and (3) have expertise on 
     educational standards, assessment, and accountability.
       Proposed new section 14302(e)(2) of the ESEA would direct 
     the Secretary to approve a plan if it meets the requirements 
     of the section and would authorize the Secretary to accompany 
     such approval with one or more conditions. Under proposed new 
     section 14302(e)(3) of the ESEA, if the Secretary determines 
     that the plan does not meet those requirements, the Secretary 
     would be required to notify the State of that determination 
     and the reasons for it. Proposed new section 14302(e)(4) of 
     the ESEA would require the Secretary, before disapproving a 
     plan, to offer the State an opportunity to revise the plan, 
     provide technical assistance, and provide a hearing.
       Proposed new section 14302(f) of the ESEA would provide for 
     revision and amendment of a consolidated State plan.
       Section 1103(3) of the bill would amend section 14303(a) of 
     the ESEA to provide for uniform State assurances regarding 
     monitoring and data integrity. Paragraph (3)(B) of section 
     1103 of the bill would insert a new paragraph (4) in section 
     14303(a) of the ESEA, requiring the State to assure that it 
     will monitor performance by LEAs to ensure compliance with 
     the requirements of the ESEA and, in so doing, will: (1) 
     maintain proper documentation of monitoring activities; (2) 
     provide technical assistance when appropriate and undertake 
     enforcement activities when needed; and (3) systematically 
     analyze the results of audits and other monitoring activities 
     to identify trends in funding and develop strategies to 
     correct problems.
       Paragraph (3)(B) of section 1103 of the bill would further 
     amend section 14303(a) of the ESEA by adding a new paragraph 
     (5) requiring the State to assure that the data the State 
     uses to measure its performance (and that of its LEAs) under 
     the ESEA are complete, reliable, an accurate, or, if not, the 
     State will take such steps as are necessary to make those 
     data complete, reliable and accurate.
       Section 1103(4) of the bill would repeal section 14304 of 
     the ESEA (Additional Coordination). Section 1103(5) of the 
     bill would amend section 14305 of the ESEA (``Consolidated 
     Local Plans''). Proposed new sections 14305(a) through (d) of 
     the ESEA would clarify and modify current law. Under proposed 
     section 14305(a), and LEA receiving funds under more than one 
     covered program may submit plans to the SEA under such 
     programs on a consolidated basis. Proposed new section 
     14305(b) of the ESEA would authorize an SEA that has an 
     approved consolidated State plan to require its LEAs that 
     receive funds under more than one program included in the 
     consolidated State plan to submit consolidated local plans 
     for such programs.
       Proposed new section 14305(c) of the ESEA would require an 
     SEA to collaborate with LEAs in the State in establishing 
     criteria and procedures for the submission of the 
     consolidated local plans. For each program under the ESEA 
     that may be included in a local consolidated plan, proposed 
     new section 14305(d) of the ESEA would authorize the 
     Secretary to designate the descriptions and information that 
     must be included in a local consolidated plan to ensure that 
     each program is administered in a proper and effective manner 
     in accordance with its purposes.
       Section 1103(6) of the bill would make conforming 
     amendments to section 14306 of the ESEA (General Assurances), 
     and section 1103(7) of the bill would repeal section 14307 of 
     the ESEA (Relationship of State and Local Plans to Plans 
     under the Goals 2000: Educate America Act).
       Section 1103(8) of the bill would amend Part C of Title XIV 
     of the ESEA by adding a new section 14307 (``Consolidated 
     Reporting'') authorizing the Secretary to establish 
     procedures and criteria under which an SEA must submit a 
     consolidated State annual performance report. Proposed new 
     section 14307 of the ESEA would require that the report 
     include information about programs included in the report, 
     including the State's performance under those programs, and 
     other matters, as the Secretary determines. Submission of a 
     consolidated performance report would take the place of 
     individual performance reports for the programs subject to 
     its.
       Section 1104. Waivers. Section 1104 of the bill would amend 
     section 14401 of the ESEA (Waivers).
       Section 1104(1) of the bill would amend section 14401(a) of 
     the ESEA to add the Carl D. Perkins Vocational and Technical 
     Education Act of 1998 and Subtitle B of Title VII of the 
     Stewart B. McKinney Homeless Assistance Act as programs to 
     which section 14401 applies. Section 1104(2) of the bill 
     would amend section 14401(b)(1) of the ESEA to require that 
     an SEA, LEA, or Indian tribe that desires a waiver submit an 
     application to the Secretary containing such information as 
     the Secretary may reasonably require. Each such application 
     would be required to: (1) indicate each Federal program 
     affected and the statutory or regulatory requirements 
     requested to be waived; (2) describe the purpose and expected 
     results of the waiver; (3) describe, for each school year, 
     specific, measurable goals for the SEA and for each LEA, 
     Indian tribe, or school that would be affected; and (4) 
     explain why the waiver would assist in reaching these goals. 
     Section 1104(3) of the bill would make conforming amendments 
     to section 14401(c) of the ESEA, relating to restrictions on 
     the waiver authority, and would add health and safety to the 
     list of requirements that may not be waived. Section 1104(4) 
     of the bill would make conforming changes to section 
     14401(e)(4) of the ESEA, relating to reports to Congress.
       Section 1105. Uniform provisions. Section 1105 of the bill 
     would amend various provisions of Part E of Title XIV of the 
     ESEA relating to uniform provisions concerning maintenance of 
     effort and participation by private school children and 
     teachers.
       Section 1105(1) of the bill would amend section 14501(a) of 
     the ESEA, relating to maintenance of effort, to make that 
     section inapplicable to Part C of Title I of that Act.
       Section 1105(2) of the bill would also amend section 
     14503(a)(1) of the ESEA, relating to the provision of 
     equitable services to students in private schools, by adding 
     language to clarify that those services should address the 
     needs of those students.
       Section 1105(2) of the bill would amend section 14503(b) to 
     make it apply to programs under: Part C of Title I; Part E of 
     Title I; Subpart 2 of Part A of Title II; Title III, Part A 
     of Title IV-A (other than section 4115), and Part A of Title 
     VII of the ESEA.
       Section 1105(2) of the bill would also amend section 
     14503(c)(1) of the ESEA, with respect to the issues to be 
     covered by consultation between designated public educational 
     agencies and appropriate private school officials. Section 
     1105(2) of the bill would add two issues to be covered by 
     such consultation: (1) to the extent applicable, the amount 
     of funds received by the agency that are attributable to 
     private school children; and (2) how and when the agency will 
     make decisions about the delivery of services to these 
     children.
       Section 1105(2) of the bill would also amend section 
     14503(c)(2) of the ESEA to clarify the timing of such 
     consultation. Under proposed new section 14503(c)(2) of the 
     ESEA, such consultation would be required to include meetings 
     of agency and private school officials, to occur before the 
     LEA makes any decision that affects the opportunities of 
     eligible private school children or their teachers to 
     participate in programs under the ESEA, and to continue 
     throughout the implementation and assessment of activities 
     under section 14503 of the ESEA.
       Paragraphs (3) and (4) of section 1105 of the bill would 
     amend sections 14504 and 14506 of the ESEA to make conforming 
     amendments to cross-references. Paragraph (5) of section 1105 
     of the bill would repeal sections 14513 and 14514 of the 
     ESEA.
       Section 1106. Gun Possession. Section 1106 of the bill 
     would repeal Part F of Title XIV of the ESEA, the ``Gun-Free 
     Schools Act''. These provisions, in modified form, would be 
     included in proposed new title IV of the ESEA.
       Section 1107. Evaluation and Indicators. Section 1107 of 
     the bill would amend Part G of Title XIV to revise section 
     14701 of the ESEA (Evaluation) and to add a new section 14702 
     of the ESEA (``Performance Measures''), authorizing the 
     Secretary to establish performance indicators for each 
     program under the ESEA and Title VII-B of the Stewart B. 
     McKinney Homeless Assistance Act.
       Section 1107(1) of the bill would amend the heading of Part 
     G to read: ``EVALUATION AND INDICATORS.'' Section 1107(s) of 
     the bill would add to section 14701(a)(1) of the ESEA new 
     subparagraphs that would authorize the Secretary, with the 
     funds reserved under the section, to: (1) conduct evaluations

[[Page 11448]]

     to carry out the purposes of the Government and Performance 
     Results Act of 1993, and (2) work in partnership with the 
     States to develop information relating to program performance 
     that can be used to help achieve continuous improvement at 
     the State, school district, and school level. Proposed new 
     section 14701(b) of the ESEA would direct the Secretary to 
     use reserved funds to conduct independent studies of programs 
     under the ESEA and the effectiveness of those programs in 
     achieving their purposes, to determine whether the programs 
     are achieving the standards set forth in the subsection. 
     Proposed new section 14701(c) of the ESEA would direct the 
     Secretary to establish an independent panel to review these 
     studies, to advise the Secretary on their progress, and to 
     comment, if it so chooses, on the final report under proposed 
     new section 14701(d).
       Proposed new section 14701(d) would direct the Secretary to 
     submit an interim report on the evaluations within three 
     years of enactment of the Educational Excellence for All 
     Children Act of 1999 and a final report with four years to 
     the Committee on Education and the Workforce of the House of 
     Representatives and to the Committee on Health, Education, 
     Labor and Pensions of the Senate. Proposed new section 
     14701(e) of the ESEA would authorize the Secretary to provide 
     technical assistance to recipients under the ESEA to 
     strengthen the collection and assessment of information 
     relating to program performance and quality assurance at 
     State and local levels. This proposed new subsection would 
     require that the technical assistance be designed to promote 
     the development, use and reporting of data on valid, 
     reliable, timely, and consistent performance indicators, 
     within and across programs, with the goal of helping 
     recipients make continuous program improvement.
       Section 1107(3) would add proposed new section 14702 
     (``Performance Measures'') to the ESEA. Proposed new section 
     14702(a) of the ESEA would authorize the Secretary to 
     establish performance indicators, benchmarks, and targets for 
     each program under the Act and Subtitle B of Title VII-B of 
     the McKinney Homeless Assistance Act, to assist in measuring 
     program performance. It would further require that the 
     indicators, benchmarks, and targets be consistent with the 
     Government Performance and Results Act of 1993, strategic 
     plans adopted by the Secretary under that Act, and section 
     11501 of the ESEA.
       Proposed new section 14702(b) of the ESEA would direct the 
     Secretary to collaborate with SEAs, LEAs and other recipients 
     under the ESEA in establishing performance indicators, 
     benchmarks, and targets. Proposed new section 14702(c) of the 
     ESEA would authorize the Secretary to require an applicant 
     for funds under the ESEA or the McKinney Act to (1) include 
     in its plan or application information relating to how it 
     will use the indicators, benchmarks and targets to improve 
     its program performance and (2) report data relating to such 
     performance indicators, benchmarks and targets to the 
     Secretary.
       Section 1108. Coordinated Services. Section 1108 of the 
     bill would transfer Title XI of the ESEA, relating to 
     coordinated services, to Part I of Title XI and would make 
     conforming and other amendments to Title XI of current law.
       Section 1108(b)(1) of the bill would revise section 11903 
     of the new Part I, as redesignated, (current section 11004 of 
     the ESEA, relating to project development and 
     implementation). Proposed new section 11903(a) would require 
     each eligible entity desiring to use funds under section 
     11405(b) of the ESEA (for coordinated services) to submit an 
     application to the appropriate SEA. Proposed new section 
     11903(b) of the ESEA would require an eligible entity that 
     wishes to conduct a coordinated services project to maintain 
     on file: (1) the results of its assessment of economic, 
     social, and health barriers to educational achievement 
     experienced by children and families in the community and of 
     the services available to meet those needs; (2) a description 
     of the entities operating coordinated services projects; (3) 
     a description of its coordinated services project and other 
     information related to the project; and (4) an annual budget 
     that indicates the sources and amounts of funds under the Act 
     that will be used for the project, consistent with section 
     11405(b) and the purposes for which the funds will be used.
       Proposed new section 11903(b) of the ESEA would also 
     require such an eligible entity to evaluate annually the 
     success of the project; train teachers and appropriate 
     personnel; and ensure that the coordinated services project 
     addresses the health and welfare needs of migratory families. 
     Proposed new section 11903(c) of the ESEA would provide that 
     an SEA need not require eligible entities to submit an 
     application under subsection (a) in order to permit them to 
     carry out coordinated services projects under section 11903 
     of the ESEA.
       Section 1108(b)(2) of the bill would make conforming 
     amendments to section 11904 of the ESEA, as redesignated. 
     Section 1108(b)(3) of the bill would amend section 11905 of 
     the ESEA, as redesignated (current section 11004 of the 
     ESEA), to make clear that the authority under that section is 
     placed in the SEA, rather than the Secretary, and to make 
     other conforming changes.
       Section 1109. Redesignations. Section 1109 of the bill 
     would redesignate Title XIV of the ESEA as Title XI of the 
     ESEA and would make conforming amendments to its parts and 
     sections.
       Sec. 1110. (ED-Flex Partnerships). Section 1110 of the bill 
     would make minor revisions to the recently enacted Education 
     Flexibility Partnership Act of 1999 (P.L. 106-25) and 
     redesignate it as Part G of Title XI of the revised ESEA.
       Paragraphs (1), (2), (3), and (4) of section 1110(a) would 
     make minor changes to the short title, findings, and 
     definitions of the Education Flexibility Partnership Act of 
     1999 to reflect its incorporation into the ESEA.
       Paragraph (5) of section 1110(a) would, in addition to 
     making minor editorial revisions, make State eligibility for 
     ED-Flex status turn, in part, on whether the State has an 
     approved accountability plan under proposed new section 11208 
     of the ESEA and is making satisfactory progress, as 
     determined by the Secretary, in implementing its policies 
     under proposed new sections 11204 (Student Progress and 
     Promotion Policy) and 11205 (Ensuring Teacher Quality) of the 
     ESEA. (A State would also have to be in compliance with 
     various Title I accountability requirements and waive State 
     statutory and regulatory requirements.) Paragraph (5) of 
     section 1110(a) of the bill would also revise the conditions 
     under which the Secretary may grant an extension of ED-Flex 
     authority, beyond five years, to provide, in part, that the 
     Secretary may grant such an extension only if he or she 
     determines that the State has made significant statewide 
     gains in student achievement and is closing the achievement 
     gap between low- and high-performing students.
       In addition, paragraph (5) of section 1110(a) of the bill 
     would revise the list of Federal education programs that are 
     subject to ED-Flex authority to reflect the amendments that 
     would be made to the ESEA by the bill and to include Subtitle 
     B of Title VII of the Stewart B. McKinney Homeless Assistance 
     Act. Paragraph (5) would also clarify that, while States may 
     grant waivers with respect to the minimum percentage of 
     children from low-income families needed to permit a 
     schoolwide program under section 1114 of the ESEA, in doing 
     so they may not go below 40 percent. Finally, paragraph (5) 
     would add a transition provision that makes clear that 
     waivers granted under applicable ED-Flex authority prior to 
     the effective date of proposed new Part G of Title XI of the 
     ESEA would remain in effect in accordance with the terms and 
     conditions that applied when those waivers were granted, and 
     that waivers granted on or after the effective date of Part G 
     would be subject to the provisions of Part G.
       Paragaphs (6) and (7) of section 1110(a) of the bill would 
     make editorial revisions and repeal, as no longer needed, 
     certain amendatory provisions to other Acts (but without un-
     doing the substantive changes to those other Acts made by 
     those amendatory provisions). Finally, section 1110(b) of the 
     bill would make appropriate redesignations and add a part 
     heading.
       Section 1111. Accountability. Section 1111 of the bill 
     would amend Title XI of the Act by adding a new Part B, 
     Improving Education Through Accountability.
       Proposed new section 11201 (``Short Title'') of the ESEA 
     would establish the short title of this part as the 
     ``Education Accountability Act of 1999.''
       Proposed new section 11202 (``Purpose'') of the ESEA would 
     set out the statement of purpose for the new part. Under 
     proposed new section 11202, the purpose of the part would be 
     to improve academic achievement for all children, assist in 
     meeting America's Education Goals under section 2 of the 
     ESEA, promote the incorporation of challenging State academic 
     content and student performance standards into classroom 
     practice, enhance accountability of State and local officials 
     for student progress, and improve the effectiveness of 
     programs under the ESEA and the educational opportunities of 
     the students that they serve.
       Proposed new section 11203 (``Turning Around Failing 
     Schools'') of the ESEA would require a State that receives 
     assistance under the ESEA to develop and implement a 
     statewide system for holding its LEAs and schools accountable 
     for student performance, including a procedure for 
     identifying LEAs and schools in need of improvement; 
     intervening in those agencies and schools to improve teaching 
     and learning; and implementing corrective actions, if those 
     interventions are not effective.
       Proposed new section 11204 (``Student Progress and 
     Promotion Policy'') of the ESEA would require any State that 
     receives assistance under the ESEA to have in effect, at the 
     time its submits its accountability plan, a State policy that 
     is designed to ensure that students progress through school 
     on a timely basis, having mastered the challenging material 
     needed for them to reach high standards of performance and is 
     designed to end the practices of social promotion and 
     retention. Proposed new subsection (a)(2) would also define 
     the terms ``social promotion'' and ``retention.''
       Proposed new section 11204(b) would outline specific 
     requirements for the State's

[[Page 11449]]

     policy under subsection (a). Under proposed new section 
     11204(b), a State policy must: (1) require its LEAs to 
     implement continuing, intensive and comprehensive educational 
     interventions as may be necessary to ensure that all students 
     can meet the challenging academic performance standards 
     required under section 1111(b)(A) of the ESEA, and require 
     all students to meet those challenging standards before being 
     promoted at three key transition points (one of which must be 
     graduation from secondary school), as determined by the 
     State, consistent with section 1111(b)(2)(D); (2) require the 
     SEA to determine, through the collection of appropriate data, 
     whether LEAs and schools are ending the practices of social 
     promotion and retention; (3) require its LEAs to provide to 
     all students educational opportunities in classrooms with 
     qualified teachers who use proven instructional practices 
     that are aligned to the State's challenging standards and who 
     are supported by high-quality professional development; and 
     (4) require its LEAs to use effective, research-based 
     prevention and early prevention strategies to identify and 
     support students who need additional help to meet those 
     promotion standards.
       Proposed new subsection (b) would also require the State 
     policy to provide, with respect to students who have not 
     demonstrated mastery of challenging State academic standards 
     on a timely basis, for continuing, intensive, and age-
     appropriate interventions, including, but not limited to, 
     extended instruction and learning time, such as after-school 
     and summer programs that are designed to help students master 
     such material; for other specific interventions, with 
     appropriate instructional strategies, to enable students with 
     limited English proficiency and students with disabilities to 
     master such material; for the identification of the knowledge 
     and skills in particular subject areas that students have not 
     mastered, in order to facilitate remediation in those areas; 
     for the development, by schools, of plans to provide 
     individualized attention to students who have not mastered 
     such material; for full communication between the school and 
     parents, including a description and analysis of the 
     students' performance, how it will be improved, and how 
     parents will be involved in the process; and, in cases in 
     which significant numbers of students have failed to master 
     such material, for a State review of whether corrective 
     action with respect to the school or LEA is needed.
       Finally, proposed new subsection (b) of section 11204 of 
     the ESEA would require the State policy to require its LEAs 
     to disseminate widely their policies under this subsection in 
     language and in a format that is concise and that parents can 
     understand and ensure that any assessments used by a State, 
     LEA, or school for the purpose of implementing a policy under 
     this subsection are aligned with the State's challenging 
     academic content and student performance standards and 
     provide coherent information about student progress towards 
     attainment of such standards; include multiple measures, 
     including teacher evaluations, no one of which may be 
     assigned determinative weight in making adverse decisions 
     about individual students; offer multiple opportunities for 
     students to demonstrate that they meet the standards; are 
     valid and reliable for the purposes for which they are used, 
     and fairly and accurately measure what students have been 
     taught; provide reasonable adaptations and accommodations for 
     students with disabilities and students with limited English 
     proficiency; provide that students with limited English 
     proficiency are assessed, to the greatest extent practicable, 
     in the language and form most likely to yield accurate and 
     reliable information about what those students know and can 
     do; and provide that Spanish-speaking students with limited 
     English proficiency are assessed using tests written in 
     Spanish, if Spanish-language assessments are more likely than 
     English-language tests to yield accurate and reliable 
     information on what those students know and can do.
       Proposed new section 11204(c) of the ESEA would establish 
     what a State must include in its accountability plan under 
     proposed new section 11208 of the ESEA with respect to its 
     promotion policy. A State would be required to include in its 
     accountability plan a detailed description of its policy 
     under proposed new subsection (b). Additionally, a State 
     would be required to include in its plan the strategies and 
     steps (including timelines and performance indicators) it 
     will take to ensure that its policy is fully implemented no 
     later than four years from the date of the approval of its 
     plan. Finally, a State would also be required to address in 
     its plan the steps that it will take to ensure that the 
     policy will be disseminated to all LEAs and schools in the 
     State and to the general public.
       Proposed new section 11205 (``Ensuring Teacher Quality'') 
     of the ESEA would establish provisions to ensure teacher 
     quality. Specifically, proposed new section 11205(a) would 
     provide that a State that receives funds under the ESEA must 
     have in effect, at the time it submits its accountability 
     plan, a policy designated to ensure that there are qualified 
     teachers in every classroom in the State, and that meets the 
     requirements of proposed new sections 11205(b) and (c).
       Proposed new section 11205(b) of the ESEA would establish 
     requirements for the contents of the State's policy on 
     teacher quality. Under proposed new section 11205(b), a 
     policy to ensure teacher quality must include the strategies 
     that the State will carry out to ensure that, within four 
     years from the date of approval of its accountability plan, 
     certain goals are met. Proposed new section 11205(b)(1) would 
     require that a State include strategies to ensure that not 
     less than 95% of the teachers in public schools in the State 
     are either certified, have a baccalaureate degree and are 
     enrolled in a program, such as an alternative certification 
     program, leading to full certification in their field within 
     three years, or have full certification in another State and 
     are establishing certification where they are teaching. 
     Proposed new section 11205(b)(2) would require the State to 
     include strategies to ensure that not less than 95% of the 
     teachers in public secondary schools in the State have 
     academic training or demonstrated competence in the subject 
     area in which they teach. A State would also have to include 
     strategies to ensure that there is no disproportionate 
     concentration in particular school districts of teachers who 
     are not described in paragraphs (1) and (2) of proposed new 
     section 11205(b). Additionally, a State would be required to 
     include in its teacher quality policy strategies to ensure 
     that its certification process for new teachers includes an 
     assessment of content knowledge and teaching skills aligned 
     with State standards.
       Proposed new section 11205(c) of the ESEA would require a 
     State to include in its accountability plan the performance 
     indicators by which it would annually measure progress in two 
     areas. Under proposed new section 11205(c)(1)(A), a State 
     would be required to include the benchmarks by which it will 
     measure its progress in decreasing the percentage of teachers 
     in the State teaching without full licenses or credentials. 
     Proposed new section 11205(c)(1)(B) would require a State to 
     include the benchmarks by which it will measure its progress 
     in increasing the percentage of secondary school classes in 
     core academic subject areas taught by teachers who either 
     have a postsecondary-level academic major or minor in the 
     subject area they teach or a related field, or otherwise 
     demonstrate a high level of competence through rigorous tests 
     in their academic subject.
       Finally, proposed new section 11205(c)(2) of the ESEA would 
     require a State to assure in its accountability plan that in 
     carrying out its teacher quality policy, it would not 
     decrease the rigor or quality of its teacher certification 
     standards.
       Subsection (a) of proposed new section 11206 (``Sound 
     Discipline Policy'') of the ESEA would require a State that 
     receives assistance under the ESEA; to have in effect, at the 
     time it submits its accountability plan, a policy that would 
     require its LEAs and schools to have in place and implement 
     sound and equitable discipline policies, to ensure a safe, 
     and orderly, and drug-free learning environment in every 
     school. A State would also be required under section 11206(c) 
     to include in its accountability plan an assurance that it 
     has in effect a policy that meets the requirements of this 
     section.
       Under proposed new section 11206(b) of the ESEA, the 
     required disciplinary policy would require LEAs and schools 
     to implement disciplinary policies that focus on prevention 
     and are coordinated with prevention strategies and programs 
     under Title IV of the ESEA. Additionally, LEA and school 
     policies would have to: apply to all students; be enforced 
     consistently and equitably; be clear and understandable; be 
     developed with the participation of school staff, students, 
     and parents; be broadly disseminated; ensure that due process 
     is provided; be consistent with applicable Federal, State and 
     local laws; ensure that teachers are adequately trained to 
     manage their classrooms effectively; and, in case of students 
     suspended or expelled from school, provide for appropriate 
     supervision, counseling, and educational services that will 
     help those students continue to meet the State's challenging 
     standards.
       Subsection (a) of proposed new section 11207 (``Education 
     Report Cards'') of the ESEA would require a State that 
     receives assistance under the ESEA, to have in effect, at the 
     time it submits its accountability plan, a policy that 
     requires the development and dissemination of annual report 
     cards regarding the status of education and educational 
     progress in the State and in its LEAs and schools. Under 
     proposed new section 11207(a), report cards would have to be 
     concise and disseminated in a format and manner that parents 
     could understand, and focus on educational results.
       Proposed new section 11207(b) of the ESEA would establish 
     the information that, at a minimum, the State must include in 
     its annual State-level report card. Under proposed new 
     section 11207(b)(1), a State would be required to include 
     information regarding student performance on statewide 
     assessments, set forth on an aggregated basis, in both 
     reading (or language arts) and mathematics, as well as any 
     other subject area for which the State requires assessments. 
     A State would also be required under proposed new section 
     11207(b)(1) to include in its report

[[Page 11450]]

     card information regarding attendance and graduation rates in 
     the State's public schools, as well as the average class size 
     in each of the State's school districts. A State would also 
     be required to include information with respect to school 
     safety, including the incidence of school violence and drug 
     and alcohol abuse and the number of instances in which a 
     student has possessed a firearm at school, subject to the 
     Gun-Free Schools Act. Finally, a State would be required 
     under proposed new section 11207(b)(1) to include in its 
     report card information regarding the professional 
     qualifications of teachers in the State, including the number 
     of teachers teaching with emergency credentials and the 
     number of teachers teaching outside their field of expertise.
       Proposed new section 11207(b)(2) of the ESEA would require 
     that student achievement data in the State's report card 
     contain statistically sound, disaggregated results with 
     respect to the following categories: gender; racial and 
     ethnic group; migrant status; students with disabilities, as 
     compared to students who are not disabled; economically 
     disadvantaged students, as compared to students who are not 
     economically disadvantaged; and students with limited English 
     proficiency, as compared to students who are proficient in 
     English. Under proposed new section 11207(b)(2), a State 
     could also include in its report card any other information 
     it determines appropriate to reflect school quality and 
     student achievement. This could include information on: 
     longitudinal achievement scores from the National Assessment 
     of Educational Progress or State assessments; parent 
     involvement, as determined by such measures as the extent of 
     parental participation in school parental involvement 
     activities; participation in extended learning time programs, 
     such as after-school and summer programs; and the performance 
     of students in meeting physical education goals.
       Under proposed new section 11207(c) of the ESEA, a State 
     would be required to ensure that each LEA and each school in 
     the State includes in its annual report, at a minimum, the 
     information required by proposed new sections 11207(b) (1) 
     and (2). Additionally, a State would be required under 
     proposed new section 11207(c) to ensure that LEAs include in 
     their annual report cards the number of their low-performing 
     schools, such as schools identified as in need of improvement 
     under section 1116(c)(1) of the ESEA, and information that 
     shows how students in their schools performed on statewide 
     assessments compared to students in the rest of the State 
     (including such comparisons over time, if the information is 
     available), and schools include in their annual report cards 
     whether they have been identified as a low-performing school 
     and information that shows how their students performed on 
     statewide assessments compared to students in the rest of the 
     LEA and the State (including such comparisons over time, if 
     the information is available). LEAs and schools could also 
     include in their annual report cards the information 
     described in proposed new section 11207(b)(3) and other 
     appropriate information.
       Proposed new section 11207(d) of the ESEA would establish 
     requirements for the dissemination and accessibility of 
     report cards. Under proposed new section 11207(d), State-
     level report cards would be required to be posted on the 
     Internet, disseminated to all schools and LEAs in the State, 
     and made broadly available to the public. LEA report cards 
     would have to be disseminated to all their schools and to all 
     parents of students attending these schools, and made broadly 
     available to the public. School report cards would have to be 
     disseminated to all parents of students attending that school 
     and made broadly available to the public.
       Under proposed new section 11207(e) of the ESEA, a State 
     would be required to include in its accountability plan an 
     assurance that it has in effect an education report card 
     policy that meets the requirements of proposed new section 
     11207.
       Proposed new section 11208 (``Education Accountability 
     Plans'') of the ESEA would establish the requirements for a 
     State's education accountability plan. In general, each State 
     that received assistance under ESEA, on or after July 1, 
     2000, would be required to have on file with the Secretary, 
     an approved accountability plan that meets the requirements 
     of this section.
       Proposed new section 11208(b) would establish the specific 
     contents of a State accountability plan. A State would be 
     required to include a description of the State's system under 
     proposed new section 11203; a description of the steps the 
     State will take to ensure that all LEAs have the capacity 
     needed to ensure compliance with this part; the assurances 
     required by proposed new sections 11204(c), 11205(c), 
     11206(6), and 11207(e); information indicating that the 
     Governor and the SEA concur with the plan; and any other 
     information that the Secretary may reasonably require to 
     ensure the proper and effective administration of this part.
       Proposed new section 11208(c) of the ESEA would require a 
     State to report annually to the Secretary, in such form and 
     containing such information as the Secretary may require, on 
     its progress in carrying out the requirements of this Part, 
     and would be required to include this report in the 
     consolidated State performance report required under proposed 
     new section 11506 of the ESEA. Additionally, in reporting on 
     its progress in implementing its student progress and social 
     promotion policy under proposed new section 11204 of the 
     ESEA, a State would be required to assess the effect of its 
     policy, and its implementation, on improving academic 
     achievement for all children, and otherwise carrying out the 
     purpose specified in proposed new section 11202 of the ESEA.
       Proposed new section 11208(d) of the ESEA would require a 
     State that submits a consolidated State plan under section 
     11502 to include in that plan its accountability plan under 
     this section. If a State does not submit a consolidated State 
     plan, a State must submit a separate accountability plan.
       Under proposed new section 11208(e) of the ESEA, the 
     Secretary would approve an accountability plan under this 
     section if the Secretary determined that it substantially 
     complied with the requirements of this part. Additionally, 
     the Secretary would have the authority to accompany the 
     approval of a plan with conditions consistent with the 
     purpose of this part. In reviewing accountability plans under 
     this part, proposed new section 110208(e) of the ESEA would 
     require that the Secretary use the peer review procedures 
     under section 11502(e) of the ESEA. Finally, under proposed 
     new section 11208(e) of the ESEA, if a State does not submit 
     a consolidated State plan under section 11502 of the ESEA, 
     the Secretary would, in considering that State's separate 
     accountability plan under this section, use procedures 
     comparable to those in section 11502(e).
       Proposed new section 11209 (``Authority of Secretary to 
     Ensure Accountability'') of the ESEA would establish the 
     Secretary's authority to ensure accountability. If the 
     Secretary determines that a State has failed substantially to 
     carry out a requirement of this part or its approved 
     accountability plan, or that its performance has failed 
     substantially to meet a performance indicator in its 
     accountability plan, proposed new section 11209(a) of the 
     ESEA would authorize the Secretary to take one or more of the 
     following steps to ensure prompt compliance: (1) providing, 
     or arranging for, technical assistance to the State 
     educational agency; (2) requiring a corrective action plan; 
     (3) suspending or terminating authority to grant waivers 
     under applicable ED-Flex authority; (4) suspending or 
     terminating eligibility to participate in competitive 
     programs under the ESEA; (5) withholding, in whole or in 
     part, State administrative funds under the ESEA; (6) 
     withholding, in whole or in part, program funds under the 
     ESEA; (7) imposing one or more conditions upon the 
     Secretary's approval of a State plan or application under the 
     ESEA; (8) taking other actions under Part D of the General 
     Education Priorities Act; and (9) taking other appropriate 
     steps, including referral to the Department of Justice for 
     enforcement.
       Proposed new section 11209(b) of the ESEA would require the 
     Secretary to take one or more additional steps under proposed 
     new section 11209(a) of the ESEA to bring the State into 
     compliance if he determines that previous steps under that 
     provision have failed to correct the State's non-compliance.
       Proposed new section 11210 (``Recognition and Rewards'') of 
     the ESEA would require the Secretary to recognize and reward 
     States that the Secretary determines have demonstrated 
     significant, statewide achievement gains in core subjects, as 
     measured by the National Assessment of Educational Progress 
     for three consecutive years, are closing the achievement gap 
     between low- and high-performing students, and have in place 
     strategies for continuous improvement in reducing the 
     practices of social promotion and retention. Such recognition 
     and rewards would take into account all the circumstances, 
     including the size of the State's gains in statewide 
     achievement.
       Proposed new section 11210(b) of the ESEA would require the 
     Secretary to establish, through regulation, a system for 
     recognizing and rewarding States described under proposed new 
     section 11210(a) of the ESEA. Rewards could include 
     conferring a priority in competitive programs under the ESEA, 
     increased flexibility in administering programs under the 
     ESEA (consistent with maintaining accountability), and 
     supplementary grants or administrative funds to carry out the 
     purposes of the ESEA. Proposed new section 11210(c) of the 
     ESEA would authorize, for fiscal year 2001 and each of the 
     four succeeding fiscal years, the appropriation of whatever 
     sums are necessary to provide such supplementary funds.
       Proposed new section 11211 (``Best Practices Model'') of 
     the ESEA would require the Secretary, in implementing this 
     part, to disseminate information regarding best practices, 
     models, and other forms of technical assistance, after 
     consulting with State and LEAs and other agencies, 
     institutions, and organizations with experience or 
     information relevant to the purposes of this part.
       Finally, proposed new section 11212 (``Construction'') of 
     the ESEA would provide that nothing in this Part may be 
     construed as affecting home schooling, or the application of 
     the civil rights laws or the Individuals with Disabilities.

[[Page 11451]]

       Section 1112. America's Education Goals Panel. Section 1112 
     of the bill would move the authority for the National 
     Education Goals Panel from Title II of the Goals 2000: 
     Educate America Act to a new Part C of Title XI of the ESEA, 
     and rename the panel the ``America's Education Goals Panel.'' 
     This conforms to the renaming of the National Education Goals 
     as ``America's Education Goals'' and their placement in 
     proposed new section 2 of the ESEA, as added by section 2(b) 
     of the bill.
       The statutory authority for the Goals Panel would be 
     largely unchanged from current law, apart from some minor 
     stylistic changes, updates, clarifications, and the 
     elimination of current provisions relating to voluntary 
     National content standards, voluntary National student 
     performance standards and the work of the Panel's Resource 
     and Technical Planning Groups on School Readiness.
       The current authority for the National Education Goals 
     Panel, Title II of the Goals 2000: Educate America Act, would 
     be repealed by section 1201 of the bill.
       Section 1113. Repeal. Section 1112 of the bill would repeal 
     Title XII of the ESEA.


              title xii--amendments to other laws; repeals

     Part A--Amendments to other laws
       Section 1201. Amendments to the Stewart B. McKinney 
     Homeless Assistance Act. Section 1201 of the bill would set 
     forth amendments to the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11421 et seq.; hereinafter referred 
     to in this section as the ``Act''). Among other things, these 
     amendments would improve the McKinney program by: (1) helping 
     ensure that students are not segregated based on their status 
     as homeless; (2) enhancing coordination at the State and 
     local levels; (3) facilitating parental involvement; (4) 
     clarifying that subgrants to LEAs are to be awarded 
     competitively on the basis of the quality of the program and 
     the need for the assistance; and (5) enhancing data 
     collection and dissemination at the national level. The 
     program would also be reauthorized for five years.
       Section 1201(a) of the bill would amend section 721(3) of 
     the Act (Statement of Policy), by changing the current 
     statement to make it clear that homelessness alone is not 
     sufficient reason to separate students from the mainstream 
     school environment. This language, which is reflected in 
     amendments that follow make a strong statement against 
     segregating homeless children on the basis of their 
     homelessness. This responds to some local actions being taken 
     around the country to create separate, generally inferior, 
     schools for homeless children. Homeless advocacy groups and 
     State coordinators have strongly encouraged this action.
       Section 1201(b) of the bill would amend section 722 of the 
     Act (Grants for State and Local Activities for the Education 
     of Homeless Children and Youth). Section 1201(b)(1) of the 
     bill would amend sections 722(c)(2) and (3) of the Act, 
     reserving funds for the territories and defining the term 
     ``State,'' to remove Palau from those provisions. Palau does 
     not participate in the program since its Compact of Free 
     Association was ratified. Section 1201(b)(2) of the bill 
     would amend section 722(e) of the Act (State and Local 
     Grants), to add a new paragraph (3) that would prohibit a 
     State receiving funds under this subtitle from segregating a 
     homeless child or youth, either in a separate school or in a 
     separate program within a school, based on that child or 
     youth's status as homeless, except as is necessary for short 
     periods of time because of health and safety emergencies or 
     to provide temporary, special supplementary services to meet 
     the unique needs of homeless children and youth.
       Section 1201(b)(3) of the bill would amend section 722(f) 
     of the Act (Functions of the State Coordinator). Section 
     1201(b)(3)(A) of the bill would amend section 722(f)(1) of 
     the Act to eliminate the requirement that the coordinator 
     estimate the number of homeless children and youth in the 
     State and the number of homeless children and youth served by 
     the program. Section 1201(b)(3)(B) of the bill would amend 
     section 722(f)(4) of the Act to eliminate the requirement 
     that the Coordinator report on certain specific information 
     and replace it with a more general requirement that the 
     Coordinator collect and transmit to the Secretary such 
     information as the Secretary deems necessary to assess the 
     educational needs of homeless children and youth within the 
     State. Section 1201(b)(3)(C) of the bill would amend section 
     722(f)(6) of the Act to make editorial changes and require 
     the Coordinator to collaborate, as well as to coordinate, 
     with certain currently listed entities, as well as with LEA 
     liaisons and community organizations and groups representing 
     homeless children and youth and their families.
       Section 1201(b)(4) of the bill would amend section 722(g) 
     of the Act (State Plan). Paragraph (4)(A) of the bill would 
     amend section 722(g)(1)(H) of the Act to require States to 
     provide assurances in their plans that SEAs and LEAs adopt 
     policies and practices to ensure that homeless children and 
     youth are not segregated or stigmatized and that LEAs in 
     which homeless children and youth reside or attend school 
     will: (1) post public notice of the educational rights of 
     such children and youth in places where such children and 
     youth receive services under this Act; and (2) designate an 
     appropriate staff person, who may also be a coordinator for 
     other Federal programs, as a liaison for homeless children 
     and youth. Section 1201(b)(4)(B) of the bill would amend 
     section 722(g)(3)(B) of the Act to require LEAs, in 
     determining the best interest of the homeless child or youth, 
     to the extent feasible, to keep a homeless child or youth in 
     his or her school of origin, except when doing so is contrary 
     to the wishes of his or her parent or guardian, and to 
     provide a written explanation to the homeless child's or 
     youth's parent or guardian when the child or youth is sent to 
     a school other than the school of origin or a school 
     requested by the parent or guardian.
       Section 1201(b)(4)(C) of the bill would amend section 
     722(g)(6) of the Act to consolidate the coordination 
     requirements currently in paragraphs (6) and (9) and require 
     that the mandated coordination be designed to: (1) ensure 
     that homeless children and youth have access to available 
     education and related support services, and (2) raise the 
     awareness of school personnel and service providers of the 
     effects of short-term stays in a shelter and other challenges 
     associated with homeless children and youth. Section 
     1201(b)(4)(D) of the bill would amend section 722(g)(7) of 
     the Act to require each LEA liaison, designated pursuant to 
     section 722(g)(1)(H)(ii)(II) of the Act, to ensure that: (1) 
     homeless children and youth enroll, and have a full and equal 
     opportunity to succeed, in schools of that agency; (2) 
     homeless families, children, and youth receive educational 
     services for which such families, children, and youth are 
     eligible; and (3) the parents or guardians of homeless 
     children and youth are informed of the education and related 
     opportunities available to their children and are provided 
     with meaningful opportunities to participate in the education 
     of their children. Section 722(g)(7) of the Act would be 
     further amended by adding a new subparagraph (C) requiring 
     LEA liaisons, as a part of their duties, to coordinate and 
     collaborate with State coordinators and community and school 
     personnel responsible for the provision of education and 
     related services to homeless children and youth. Section 
     1201(b)(4)(E) of the bill would eliminate section 722(g)(9) 
     of the Act, which would be combined with section 722(g)(6) of 
     the Act.
       Section 1201(c) of the bill would amend section 723 of the 
     Act (Local Educational Agency Grants for the Education of 
     Homeless Children and Youth). Section 1201(c)(1) of the bill 
     would amend section 723(a) of the Act to: (1) make certain 
     editorial changes; (2) clarify that where services under the 
     section are provided on school grounds, schools may use funds 
     under this Act to provide the same services to other children 
     and youth who are determined by the LEA to be at risk of 
     failing in, or dropping out of, schools; and (3) prohibit 
     schools from providing services, including those to at-risk 
     children and youth, in settings within a school that 
     segregate homeless children and youth from other children and 
     youth, except as is necessary for short periods of time 
     because of health and safety emergencies or to provide 
     temporary, special supplementary services to meet the unique 
     needs of homeless children and youth.
       Section 1201(c)(2) of the bill would amend section 723(b) 
     of the Act to require local applications for State subgrants 
     to contain an assessment of the educational and related needs 
     of homeless children and youth in their district (which may 
     be undertaken as a part of needs assessments for other 
     disadvantaged groups). Section 1201(c)(3) of the bill would 
     amend section 723(c)(1) of the Act to clarify that State 
     subgrants are to be awarded competitively on the basis of the 
     need of such agencies for assistance under this subtitle and 
     the quality of the application submitted. Section 1201(c)(3) 
     of the bill would also add a new paragraph (3) to section 
     723(c) of the Act, requiring a SEA, in determining the 
     quality of a local application for a subgrant, to consider: 
     (1) the applicant's needs assessment and the likelihood that 
     the program presented in the application will meet those 
     needs; (2) the types, intensity, and coordination of the 
     services to be provided under the program; (3) the 
     involvement of parents or guardians; (4) the extent to which 
     homeless children and youth will be integrated within the 
     regular education program; (5) the quality of the applicant's 
     evaluation plan for the program; (6) the extent to which 
     services provided under this subtitle will be coordinated 
     with other available services; and (7) such other measures as 
     the SEA deems indicative of a high-quality program.
       Section 1201(d) of the bill would amend section 724 of the 
     Act (Secretarial Responsibilities). Section 1201(d) of the 
     bill would replace current subsection (f) (Reports), with a 
     new subsection (f) (``Information''), and a new subsection 
     (g) (``Report''). Proposed new section 724(f) of the Act 
     would require the Secretary, from funds appropriated under 
     section 726 of the Act, and either directly or through 
     grants, contracts, or cooperative agreements, to periodically 
     collect and disseminate data and information on the number 
     and location of homeless children and youth, the education 
     and related services such children and youth receive, the 
     extent to which such needs are being met, and such other data 
     and information as the Secretary

[[Page 11452]]

     deems necessary and relevant to carry out this subtitle. The 
     Secretary would also be required to coordinate such 
     collection and dissemination with the other agencies and 
     entities that receive assistance and administer programs 
     under this subtitle. Proposed new section 724(g) of the Act 
     would require the Secretary, not later than four years after 
     the date of the enactment of the bill, to prepare and submit 
     to the President and appropriate committees of the House of 
     Representatives and the Senate a report on the status of 
     education of homeless youth and children.
       Section 1201(e) of the bill would amend section 726 of the 
     Act to authorize the appropriation of such sums as may be 
     necessary for each of the fiscal years 2001 through 2005 to 
     carry out the subtitle.
       Section 1202. Amendments to Other Laws. Section 1202 of the 
     bill would make conforming amendments to other statutes that 
     reflect the changes to the ESEA that are proposed in this 
     bill.
       Section 1202(a) of the bill would eliminate an outdated 
     cross-reference in section 116(a)(5) of the Carl D. Perkins 
     Vocational and Technical Education Act of 1998 (20 U.S.C. 
     2326(a)(5)).
       Section 1202(b) of the bill would update a cross-reference 
     in section 317(b)(1) of the Higher Education Act of 1965 (20 
     U.S.C. 1059d(b)(10)).
       Section 1202(3) of the bill would amend the Pro-Children 
     Act of 1994 (20 U.S.C. 6081 et seq.) to eliminate references 
     to kindergarten, elementary, and secondary education services 
     from the prohibition against smoking contained in that Act. 
     Proposed new Title IV of the ESEA, as amended by Title IV of 
     the bill, contains a comparable prohibition against smoking 
     in facilities used for education services, and the education 
     references in the Pro-Children Act are no longer necessary.
     Part B--Repeals
       Section 1211. Repeals. Section 1211 of the bill would 
     repeal Title XIII of the ESEA, several parts and titles of 
     the Goals 2000: Educate America Act (P.L. 103-227), and Title 
     III of the Education for Economic Security Act (20 U.S.C. 
     3901 et seq.). These provisions have either accomplished 
     their purpose, authorize activities that are more 
     appropriately carried out with State and local resources, or 
     have been incorporated into the ESEA as amended by the bill.
       Title XIII, Support and Assistance Programs to Improve 
     Education, of the ESEA would be repealed. Proposed new Part D 
     of Title II of the ESEA contains the new ESEA technical 
     assistance and information dissemination programs.
       In the Goals 2000 statute, Title I, National Education 
     Goals; Title II, National Education Reform Leadership, 
     Standards, and Assessments, Title III, State and Local 
     Education Systemic Improvement; Title IV, Parental 
     Assistance; Title VII, Safe Schools; and Title VIII, 
     Minority-focused Civics Education, would be repealed. Part B, 
     Gun-free Schools, of Title X of the Goals 2000 statute would 
     also be repealed.
       Next, the Educational Research, Development, Dissemination, 
     and Improvement Act of 1994 (Title IX of P.L. 103-227) would 
     be amended by repealing Part F, Star Schools; Part G, Office 
     of Comprehensive School Health Education; Part H, Field 
     Readers; and Part I, Amendments to the Carl D. Perkins 
     Vocational and Applied Technology Act.
       Title III, Partnerships in Education for Mathematics, 
     Science, and Engineering, of the Education for Economic 
     Security Act would also be repealed by section 1211 of the 
     bill.
                                 ______
                                 
      By Mr. LEAHY:
  S. 1181. A bill to appropriate funds to carry out the commodity 
supplemental food program and the emergency food assistance program 
fiscal year 2000 to the Committee on Agriculture, Nutrition, and 
Forestry.


                  commodity supplemental food program

  Mr. LEAHY. Mr. President, I am proud to introduce a bill to increase 
funding for the Commodity Supplemental Food Program for Fiscal Year 
2000. I look forward to working with Appropriate Committee members on 
this and other important matters through the appropriations process.
  The Commodity Supplemental Food Program does exactly what its name 
suggests--it provides supplemental foods to states who distribute them 
to low-income postpartum, pregnant and breastfeeding women, infants, 
children up to age six, as well as senior citizens.
  People participating in CSFP receive healthy packages of food 
including items such as infant formula juice, rice, pasta, and canned 
fruits and vegetables.
  The Commodity Supplemental Food Program currently operates in twenty 
states and last year, more than 370,000 people participated in it every 
month. There still remains a great need to expand this program, as 
there is a waiting list of states--including my state of Vermont--who 
want to participate, but are not able to because of lack of funding. 
The bill I am introducing would fix this problem, by increasing the 
funding so that more women, children and seniors in need could 
participate. I look forward to working with the Vermont Congressional 
delegation on this matter.
  The Commodity Supplemental Food Program has proven itself to be 
vitally important to senior citizens, as 243,000 of the 370,000 people 
who participate every month are seniors. There continues to be a great 
need for our seniors in Vermont, and in the rest of the nation.
  This has been true for sometime, and still is the case. I 
successfully fought efforts a few years ago to terminate the Meals on 
Wheels Program. Ending that program would have been a disaster for our 
seniors.
  According to an evaluation of the Elderly Nutrition Program of the 
Older Americans Act, approximately 67% to 88% of the participants are 
at moderate to high nutritional risk. It is further estimated that 40% 
of older adults have inappropriate intakes of three or more nutrients 
in their diets. And the results of nutritional programs on the health 
of seniors are amazing--for instance, it was estimated in a report that 
for every $1 spent on Senior Nutrition Programs, more than $3 is saved 
in hospital costs.
  This Congress, I have taken a number of steps to address the 
nutritional problems facing our seniors, and have met with some 
success. In response to a budget request that I submitted last year, 
the Administration increased their funding request for the Elderly 
Nutrition Program by $10 million to $150 million for Fiscal year 2000. 
I will continue to work to see that the full $150 million is included 
in the final budget.
  This past April I also cosponsored the Medicare Medical Nutrition 
Therapy Act, which provides for Medicare coverage of medical nutrition 
therapy services of registered dietitians and nutrition professionals. 
Medicare coverage of medical nutrition therapy would save money by 
reducing hospital admissions, shortening hospital stays, and decreasing 
complications.
  I look forward to working with my colleagues to pass this measure 
into law through the normal appropriations process for fiscal year 
2000.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 1182. A bill to authorize the use of flat grave markers to extend 
the useful life of the Santa Fe National Cemetery, New Mexico, and to 
allow more veterans the honor and choice of being buried in the 
cemetery; to the Committee on Veterans' Affairs.


                 santa fe national cemetery legislation

  Mr. DOMENICI. Mr. President, it is with great pleasure and honor that 
I rise today to introduce a bill to extend the useful life of the Santa 
Fe National Cemetery in New Mexico.
  The men and women who have served in the United States Armed Forces 
have made immeasurable sacrifices for the principles of freedom and 
liberty that make this Nation unique throughout civilization. The 
service of veterans has been vital to the history of the Nation, and 
the sacrifices made by veterans and their families should not be 
forgotten.
  These veterans at the very least deserve every opportunity to be 
buried at a National Cemetery of their choosing. However, unless 
Congressional action is taken the Santa Fe National Cemetery will run 
out of space to provide casketed burials for our veterans at the 
conclusion of 2000.
  I believe all New Mexicans can be proud of the Santa Fe National 
Cemetery that has grown from 39/100 of an acre to its current 77 acres. 
The cemetery first opened in 1868 and within several years was 
designated a National Cemetery in April of 1875.
  Men and women who have fought in all of nation's wars hold an honored 
spot within the hallowed ground of the cemetery. Today the Santa Fe 
National Cemetery contains almost 27,000 graves that are mostly marked 
by upright headstones.
  However, as I have already stated, unless Congress acts the Santa Fe 
National Cemetery will be forced to close.

[[Page 11453]]

The Bill I am introducing today allows the Secretary of Veterans 
Affairs to provide for the use of flat grave markers that will extend 
the useful life of the cemetery until 2008.
  While I wish the practice of utilizing headstones could continue 
indefinitely if a veteran chose, my wishes are outweighed by my desire 
to extend the useful life of the cemetery. I would note that my desire 
is shared by the New Mexico Chapter of the American Legion, the 
Albuquerque Chapter of the Retired Officers' Association, and the New 
Mexico Chapter of the VFW who have all endorsed the use of flat grave 
markers.
  Finally, this is not without precedent because exceptions to the law 
have been granted on six prior occasions with the most recent action 
occurring in 1994 when Congress authorized the Secretary of Veterans 
Affairs to provide for flat grave markers at the Willamette National 
Cemetery in Oregon.
  Mr. President, I ask unanimous consent that a copy of the Bill and 
four letters of support for the use of flat grave markers be printed in 
the Record.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:

                                S. 1182

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

     SECTION 1. AUTHORITY TO USE FLAT GRAVE MARKERS AT SANTA FE 
                   NATIONAL CEMETERY, NEW MEXICO.

       (a) Findings.--Congress makes the following findings:
       (1) The men and women who have served in the Armed Forces 
     have made immeasurable sacrifices for the principles of 
     freedom and liberty that make this Nation unique in all 
     civilization.
       (2) The service of veterans has been vital to the history 
     of the Nation, and the sacrifices made by veterans and their 
     families should not be forgotten.
       (3) These veterans at the very least deserve every 
     opportunity to be buried in a National Cemetery of their 
     choosing.
       (4) The Santa Fe National Cemetery in New Mexico opened in 
     1868 and was designated a National Cemetery in April 1875.
       (5) The Santa Fe National Cemetery now has 77 acres with 
     almost 27,000 graves most of which are are marked by upright 
     headstones.
       (6) The Santa Fe National Cemetery will run out of space to 
     provide for casketed burials at the end of 2000 unless 
     Congress acts to allow the use of flat grave markers to 
     extend the useful life of the cemetery until 2008.
       (b) Authority.--Notwithstanding section 2404(c)(2) of title 
     38, United States Code, the Secretary of Veterans Affairs may 
     provide for flat grave markers at the Santa Fe National 
     Cemetery, New Mexico.
                                  ____

                                              The American Legion,


                                     Department of New Mexico,

                                  Albuquerque, NM, March 31, 1997.
     Mr. Gil Gallo,
     Director, Santa Fe National Cemetery,
     Santa Fe, NM.
       Dear Mr. Gallo: The American Legion has discussed your 
     proposal on having a section of flat cemetery markers at the 
     National Cemetery, which would decrease the size of the 
     individual plots; therefore making more room for our 
     veterans, at the National Cemetery.
       We are in complete agreement and in support of this 
     venture. If we can be of assistance in any way, please 
     advise.
           Sincerely,
                                                  Harry C. Rhizor,
     Department Commander.
                                  ____

                                              Albuquerque Chapter,


                            The Retired Officers' Association,

                                   Albuquerque, NM, March 7, 1997.
     Director,
     Santa Fe National Cemetery,
     Santa Fe, NM.
       Dear sir, The Albuquerque Chapter of The Retired Officers 
     Association supports your position to begin using flat grave 
     markers for future interments.
           Sincerely,
                                                    George Pierce,
     LTC, USA, President.
                                  ____

                                                              VFW,


                                     Department of New Mexico,

                                  Albuquerque, NM, April 16, 1997.
     Gill Gallo,
     Director, Department of Veterans Affairs,
     Santa Fe National Cemetery,
     Santa Fe, NM.
       Dear Mr. Gallo: This letter will acknowledge receipt of 
     your informational letter concerning the Santa Fe National 
     Cemetery dated April 4, 1997. Please be advised that I took 
     the liberty to circulate the information to VFW Post 
     Commanders located in Northern New Mexico. The following is 
     our consensus.
       Although we would want to continue with the upright marble 
     headstones which are provided with the 5x10 grave site, we 
     found it more important to extend the life of the National 
     Cemetery therefore we support your efforts to utilize the 
     granite markers and the recommended 4x8 grave sites. We are 
     also in agreement with your recommendations for a columbarium 
     for the burial of our cremated Comrades.
       Please thank your staff for the outstanding work and 
     service which they provide our departed Comrades and 
     Veterans. Let me also thank you for providing us with the 
     specific information needed to come to our decision.
       As State Commander of the Veterans of Foreign Wars of the 
     United States of America Department of New Mexico I pledge 
     our full support of your recommendation and would ask that 
     you forward this letter of support to your Washington Office.
       May God Bless America and our men and women who served and 
     serve in our military armed forces.
           Yours in comradeship,
                                                  Robert O. Perea,
     State Commander.
                                  ____

                                   Department of Veterans Affairs,


                            Director National Cemetery System,

                                  Washington, DC, January 9, 1998.
     Michael C. D'Arco,
     Director, New Mexico Veterans
     Services Commission
     Santa Fe, NM.
       Dear Mr. D'Arco. I know that you are completing your study 
     on the issue of veterans cemeteries in New Mexico. Following 
     is information on the Santa Fe National Cemetery.
       There is approximately a three-year inventory of casketed 
     sites readily available for immediate use in the recently 
     developed sections of the cemetery, sections 10, 11, and 12. 
     If no other casketed sites are developed, then we would 
     exhaust this inventory in 2001.
       Based on our understanding that future flat marker 
     gravesite sections on the east side of the cemetery are 
     acceptable to veterans and the neighboring community, an 
     additional seven-year inventory of sites can be developed in 
     that portion of the cemetery. This would extend the useful 
     life of the cemetery for casketed burials to the year 2008. 
     While this is just a general estimate, and exact details will 
     not be available until a more formal design is completed, we 
     anticipate developing and using these sites. Accordingly, the 
     2008 date is the date to use in your study for casketed 
     gravesite closure of the Santa Fe National Cemetery.
       It is important to note that we anticipate being able to 
     provide for inground cremation service well beyond the year 
     2030. Consideration will also be given toward columbarium 
     development.
       Incidentally, we are estimating Fort Bayard National 
     Cemetery's closure date as 2027, but we are optimistic that 
     potential exists beyond that date. I hope this information is 
     useful to you. If you have any questions, please contact me 
     or Roger R. Rapp on my staff at 202-273-5225.
           Sincerely yours,
                                                   Jerry W. Bowen.
                                 ______
                                 
      By Mr. NICKLES:
  S. 1183. A bill to direct the Secretary of Energy to convey to the 
city of Bartlesville, Oklahoma, the former site of the NIPER facility 
of the Department of Energy; to the Committee on Energy and Natural 
Resources.


                           niper legislation

  Mr. NICKLES. Mr. President, today I am introducing legislation that 
will transfer ownership of land owned by the Department of Energy (DOE) 
and known as the National Institute of Petroleum Energy Research 
(NIPER) to the City of Bartlesville for business and educational 
purposes.
  The NIPER facility was originally established in 1918 as the 
Petroleum Experiment Station by the U.S. Bureau of Mines. Its purpose 
was to provide research targeted to oil and gas field problems. In 
1936, as World War II approached, additions to the Work Project 
Administration building were erected. Its research was expanded to help 
the war effort. During the 1973-1974 energy crisis, the center was 
renamed the Bartlesville Energy Research Center. When the Center 
privatized in 1983, it was renamed the National Institute for Petroleum 
and Energy Research (NIPER). NIPER closed its operations on December 
22, 1998.
  According to the Surplus Property Act of 1949, excess federal 
property is screened for use by the following: Housing and Urban 
Development, Health and Human Services, and local and state 
organizations including non-profit organizations. At the conclusion of 
the screening process, a negotiated sale is conducted. If the property 
is still undeclared it goes to auction.
  Unfortunately this process can take many years, thus preventing the 
city

[[Page 11454]]

of Bartlesville from realizing any near-term economic boost from 
NIPER's redevelopment. Consequently, this legislation is needed to 
ensure that the NIPER facilities are redeveloped as quickly as possible 
in order to provide a prompt economic boost to the community. This 
legislation also will ensure that the NIPER facilities do not 
deteriorate while the property is being processed through the lengthy 
steps of the Surplus Property Act and therefore make re-use impossible.
  The City of Bartlesville intends to provide an educational facility 
and a place for business and industry that would facilitate job 
creation through technology and investment. The NIPER facility will 
also provide housing for administrative services for community 
development organization such as United Way, Women and Children in 
Crisis, and various homeless programs. This project enjoys the strong 
support of the Mayor of Bartlesville and other locally elected 
officials.
                                 ______
                                 
      By Mr. DOMENICI (for himself and Mr. Kyl):
  S. 1184. A bill to authorize the Secretary of Agriculture to dispose 
of land for recreation or other public purposes; to the Committee on 
Energy and Natural Resources.


             national forest system community purposes act

  Mr. DOMENICI. Mr. President, I rise to introduce important 
legislation, cosponsored by Senator Kyl, that would allow the Forest 
Service to convey parcels of land to States and local governments, on 
the condition that it be used for a specific recreational or local 
public purpose. The National Forest System Community Purposes Act is 
patterned after an existing law that set in place one of the most 
successful local community assistance programs under the Bureau of Land 
Management (BLM).
  That law, the Recreation and Public Purposes Act, was enacted in 
1926. Under its authority, the BLM has been able to work cooperatively 
with States and communities to provide land needed for recreational 
areas and other public projects to benefit local communities in areas 
where Federal land dominates the landscape. With skyrocketing demands 
on the Forest Service and local communities to provide accommodations 
and other services for an ever-increasing number of Americans who take 
advantage of all the opportunities available in the national forests, I 
believe the time has come to provide this ability to the Forest 
Service.
  In the 1996 Omnibus Parks and Public Lands Management Act, there were 
no fewer than 31 boundary adjustments, land conveyances, and exchanges 
authorized, many of which dealt with national forests. Had this 
legislation been enacted at that time, I cannot say for sure how many 
of these provisions would have been unnecessary, but I expect the 
number would have been reduced by at least one-third.
  During the 105th Congress, I sponsored three bills that directed the 
Secretary of Agriculture to convey small tracts Forest Service land to 
communities in New Mexico. All three bills were subsequently passed in 
the Senate unanimously, but two of these bills were not enacted last 
year, and the Senate has once again seen fit to pass them in the 106th 
Congress. We now await action in the House. I know that other Senators 
are faced with a similar situation of having to shepherd bills through 
the legislative process simply to give the Forest Service the authority 
to cooperate with local communities on projects to meet local needs.
  Over one-third of the land in New Mexico is owned by the federal 
government, and therefore finding appropriate sites for community and 
educational purposes can be difficult. Communities adjacent to and 
surrounded by National Forest System land have limited opportunities to 
acquire land for certain recreational and other local public purposes. 
In many cases, these recreational and other local needs are not within 
the mission of the Forest Service, but would not be inconsistent with 
forest plans developed for the adjacent national forest. To compound 
the problem, small communities are often unable to acquire land due to 
its extremely high market value resulting from the predominance of 
Federal land in the local area.
  The subject of one of the bills I just alluded to provides an 
excellent example of the problem. That bill provided for a one-acre 
conveyance to the Village of Jemez Springs, New Mexico. The land is to 
be used for a desperately needed fire substation, which will obviously 
benefit public safety for the local community. Since over 70 percent of 
the emergency calls in this particular community are for assistance on 
the Santa Fe National Forest, however, the Forest Service would also 
benefit greatly from this new station.
  In fairness, the Forest Service was very willing to sell this land to 
the village, but they were constrained by current law to charge the 
appraised fair market value. Herein lies the biggest problem for small 
communities like Jemez Springs. In this case, the appraised value of an 
acre of land along the highway, obviously necessary for this kind of a 
facility, was estimated to be around $50,000. Combined with the cost of 
building the station itself, this additional cost put the project out 
of reach of the community's 400 residents.
  Through this example, it is clear to see that both the national 
forests and adjacent communities could mutually benefit from a process 
similar to that under the Recreation and Public Purposes Act. This 
program has worked so well for the BLM over the years, I see no reason 
for the Forest Service not to have the same kind of authority.
  The National Forest System Community Purposes Act would give the 
Secretary of Agriculture the authority to convey or lease parcels of 
Forest Service land to States, counties, or other incorporated 
communities at a cost that could be less than fair market value. In 
order to obtain the land, the State or community would develop a plan 
of use that would be subject to Forest Service approval.
  In closing, Mr. President, I think the time has come for this 
legislation. In fact, during a recent discussion I had with Forest 
Service Chief Dombeck, he was somewhat surprised to learn that the 
agency did not already have this authority. I would urge the Senate to 
provide this needed assistance to local communities around the country.
      By Mr. ABRAHAM (for himself, Mr. Lieberman, Mr. Hatch, Mr. 
        McCain, Mr. McConnell, Mr. Lott, Mr. Bond, Mr. Ashcroft, Mr. 
        Coverdell, Mr. Nickles, Mr. Brownback, Mr. Gorton, Mr. 
        Grassley, Mr. Sessions, Mr. Burns, Mr. Inhofe, Mr. Helms, Mr. 
        Allard, Mr. Hagel, Mr. Mack, Mr. Bunning, Mr. Jeffords, Mr. 
        DeWine, Mr. Craig, Mr. Hutchinson,  and Mr. Enzi):
  S. 1185. A bill to provide small business certain protections from 
litigation excesses and to limit the product liability of non-
manufacturer product sellers; to the Committee on the Judiciary.


            the small business liability reform act of 1999

  Mr. ABRAHAM. Mr. President, I rise today to introduce the Small 
Business Liability Reform Act of 1999, legislation that will provide 
targeted relief to small businesses nationwide.
  Small businesses in Michigan and across this nation are faced with a 
daily threat of burdensome litigation, a circumstance which has created 
a desperate need for relief from unwarranted and costly lawsuits. While 
other sectors of our society and our economy also need relief from 
litigation excesses, small businesses by their very nature are 
particularly vulnerable to lawsuit abuse, and find it particularly 
difficult to bear the high cost of defending themselves against 
unjustified and unfair litigation.
  Small businesses represent the engine of our growing economy and 
provide countless benefits to communities across America. The Research 
Institute for Small and Emerging Business, for example, has estimated 
that there are over 20 million small businesses in America, and that 
these small businesses generate 50 percent of our country's private 
sector output.
  My small business constituents relate story after story describing 
the

[[Page 11455]]

constraints, limitations and fear posed by the very real threat of 
abusive and unwarranted litigation. The real world impact translates 
into high-cost liability insurance, which wastes resources that could 
instead be used to expand small businesses, to provide more jobs, or to 
offer more benefits to employees. According to a recent Gallup survey, 
one out of every five small businesses decides not to hire more 
employees, expand its business, introduce a new product, or improve an 
existing product because of the fear of lawsuits--not entrepeneurial 
risk, not lack of capital resources, but lawsuits.
  In the same vein, innocent product sellers--often small businesses 
like your neighborhood corner grocery store--have also described the 
high legal costs they incur when they are needlessly drawn into product 
liability lawsuits. The unfairness in these cases is astonishing--the 
business may not even produce a product, but is still sued for product 
defects. The reason? It is no secret that courts differ in how 
favorably they look upon product liability suits--some are receptive, 
others outright hostile. So even though a local store neither designs 
nor manufactures the product, it is routinely dragged into court 
because the plaintiff's attorney desires to pull manufacturers into a 
favorable forum. That's called ``forum shopping'' on the part of the 
plaintiff, and the practice causes needless financial damage to 
America's small businesses. And while the non-culpable product seller 
is rarely found liable for damages, it must still bear the enormous 
cost of defending itself against these unwarranted suits. Rental and 
leasing companies are in a similarly vulnerable position, as they are 
commonly held liable for the wrongful conduct of their customers even 
though the companies themselves are found to have committed no wrong.
  The 105th Congress passed the Volunteer Protection Act, which 
provides specific protections from abusive litigation to volunteers. 
The Senate passed that legislation by an overwhelming margin of 99-1, 
and the President signed it, making it Public Law 105-19. That 
legislation provides a model for further targeted reforms for sectors 
of our economy that are particularly hard hit and in need of immediate 
relief. I believe it is high time for small business liability reform, 
time to take this small step, time to shield those not at fault from 
needless expense and unwarranted distress.
  Mr. President, I'd like to take a moment and provide a little 
background on our effort, as I believe it will highlight the desperate 
need for reform. Small businesses shoulder an often unbearable load 
from unwarranted and unjustified lawsuits. Data from San Diego's 
Superior Court published by the Washington Legal Foundation reveals 
that punitive damages are requested in 41 percent of suits against 
small businesses. It is simply unfathomable that such a large 
proportion of our small businesses could be engaging in the sort of 
egregious misconduct that would warrant a claim of punitive damages. 
Similarly, the National Federal of Independent Business reports that 34 
percent of Texas small business owners are sued or threatened with 
court action seeking punitive damages; again, the outrageously high 
rate of prayer for punitive damages simply cannot have anything to do 
with actual wrongdoing by the defendant.
  The specifics of the cases are no better. In a case reported by the 
American Consulting Engineers Council, a drunk driver had an accident 
after speeding and bypassing detour signs. Eight hours after the crash, 
the driver still had a blood alcohol level of .09. Nonetheless, the 
driver sued the engineering firm that designed the road, the 
contractor, the subcontractor, and the state highway department. Five 
years later, and after expending exorbitant amounts on legal fees, the 
defendants settled the case for $35,000. The engineering firm, a small 
15 person firm, was swamped with over $200,000 in legal costs--an 
intolerable amount for a small business to have to pay in defending an 
unwarranted lawsuit.
  There are more examples. An Ann Landers column from October, 1995, 
reported a case in which a minister and his wife sued a guide-dog 
school for $160,000 after a blind man who was learning to use a seeing-
eye dog stepped on the minister's wife's toes in a shopping mall. The 
guide-dog school, Southeastern Guide Dogs, Inc., which provided the 
instructor supervising the man, was the only school of its kind in the 
southeast. It trains seeing-eye dogs at no cost to the visually 
impaired. The couple filed their lawsuit 13 months after the so-called 
accident, in which witnesses reported that the woman did not move out 
of the blind man's way because she wanted to see if the dog would walk 
around her.
  The experience of a small business in Michigan, the Michigan Furnace 
Company, is likewise alarming. The President of that company has 
reported that every lawsuit in the history of her company has been a 
nuisance lawsuit. She indicates that if the money the company spends on 
liability insurance and legal fees were distributed among employees, it 
would amount to a $10,000 annual raise. That's real money, and that's a 
real cost coming right out of the pocket of Michigan workers.
  These costs are stifling our small businesses and the careers of 
people in their employ. The straightforward provisions of Title I of 
the Small Business Lawsuit Abuse Protection Act will provide small 
businesses with relief by discouraging abusive litigation. This section 
contains two principal reforms.
  First, the bill limits punitive damages that may be awarded against a 
small business. In most civil lawsuits against small businesses, 
punitive damages would be available against the small business only if 
the claimant proves by clear and convincing evidence that the harm was 
caused by the small business through at least a conscious, fragrant 
indifference to the rights and safety of the claimant. Punitive damages 
would also be limited in amount to the lesser of $250,000 or two times 
the compensatory damages awarded for the harm. That formulation is 
exactly the same as that in the small business protection provision 
that was included in the Product Liability Conference Report passed in 
the 104th Congress.
  Second, joint and several liability reforms for small businesses are 
included under the exact same formulation used in the Volunteer 
Protection Act passed in the 105th Congress and in the Protection 
Liability Conference Report passed in the 104th Congress. Joint and 
several liability would be limited such that a small business would be 
liable for noneconomic damages only in proportion to the small 
business's responsibility for causing the harm. If a small business is 
responsible for 100 percent of an accident, then it will be liable for 
100 percent of noneconomic damages. But if it is only 70 percent, 25 
percent, 10 percent or any other percent responsible, then the small 
business will be liable only for a like percentage of noneconomic 
damages.
  Small businesses would still be jointly and severally liable for 
economic damages, and any other defendants in the action that were not 
small businesses could be held jointly and severally liable for all 
damages. But the intent of this provision is to provide some protection 
to small businesses, so that they will not be sought out as ``deep 
pocket'' defendants by trail lawyers who would otherwise try to get 
small businesses on the hook for harms that they have not caused. The 
fact is that many small businesses simply do not have deep pockets, and 
they frequently need all of their resources just to stay in business, 
take care of their employees, and make ends meet.
  Other provisions in this title specify the situations in which its 
reforms apply. The title defines small business as any business having 
fewer than 25 employees, the same definition included in the Product 
Liability Conference Report. Like the Volunteer Protection Act, this 
title covers all civil lawsuits except those involving certain types of 
egregious misconduct. The limitations on liability would not apply to 
any misconduct that constitutes a crime of violence, act of 
international terrorism, hate crime, sexual offense, civil rights law 
violation, or natural resource damages, or

[[Page 11456]]

damages that occurred while the defendant was under the influence of 
intoxicating alcohol or any drug. Any finally, like the Volunteer 
Protection Act, this title includes a State opt-out. A State would be 
able to opt out of these provisions provided that the State enacts a 
law indicating its election to do so and containing no other 
provisions. I do not expect that any State will opt-out of these 
provisions, but I feel it is important to include one out of respect 
for principles of federalism.
  Title II of the Act addresses liability reform for non-culpable 
product sellers, commonly small businesses, who have long sought help 
in gaining a degree of protection from unwarranted lawsuits. Product 
sellers, like your corner grocery store, provide a crucial service to 
all of us by offering a convenient source for a wide assortment of 
goods. Unfortunately, current law subjects them to harassment and 
unnecessary litigation; in about twenty-nine states, product sellers 
are drawn into the overwhelming majority of product liability cases 
even though they play no part in the designing and manufacturing 
process, and are not to blame in any way for the harm. It is pointless 
to haul a product seller into the litigation when everyone in the 
system knows that the seller is not at fault. Dragging in the 
neighborhood convenience store helps no one, not the claimant, not the 
product seller, and certainly not the consumer. All it does is increase 
the cost to product sellers of doing business in our neighborhoods, 
because these businesses are unnecessarily forced to bear the cost of 
court expenses in their defense.
  Again, the real-world background presents a compelling case. In one 
instance, a product seller was dragged into a product liability suit 
even though the product it sold was shipped directly from the 
manufacturer to the plaintiff. In the end, the manufacturer--not the 
product seller--had to pay compensation to the plaintiff. 
Unfortunately, this was after the product seller has been forced to 
spend $25,000 in court expenses $25,000 that could have been used to 
expand the business or to provide higher salaries.
  Title II would allow a plaintiff to sue a product seller only when 
the product seller is responsible for the harm or when the plaintiff 
cannot collect from the manufacturer. This limitation would cover all 
product liability actions brought in any Federal or State Court. 
However, we have specifically ensured that the provision does not apply 
to actions brought for certain commercial losses, and actions brought 
under a theory of dram-shop or third party liability arising out of the 
sale of alcoholic products to intoxicated persons or minors.
  Additionally, rental or leasing companies are often unfairly 
subjected to lawsuits based on vicarious liability, which holds these 
companies responsible for acts committed by an individual rentee or 
lessee. In several states, these companies are subject to liability for 
the negligent tortious acts of their customers even if the rental 
company is not negligent and the product is not deffective. This type 
of fault-ignorant liability is detrimental to the economy because it 
increases non-culpable companies' costs, costs which are ultimately 
passed along to the rental customers.
  Settlements and judgements from vicarious liability claims against 
auto rental companies cost the industry approximately $100 million 
annually. In Michigan, for example, a renter lost control of a car and 
drove off the highway. The care flipped over several times, killing a 
passenger who was not wearing a seat belt. The car rental company, 
which was not at fault, nevertheless settled for $1.226 million out of 
fear of being held vicariously liable for the passenger's death.
  In another case, four British sailors rented a car from Alamo to 
drive from Fort Lauderdale to Naples. The driver fell asleep at the 
wheel, and his car left the road and ended up in a canal. The driver 
and two passengers were killed, while the fourth passenger was 
seriously injured. Although the Court found Alamo not to have acted 
negligently, Alamo was ordered by a jury to pay the plaintiffs $7.7 
million solely due to Alamo's ownership of the vehicle.
  Often even when the injured party and the driver are both at fault, 
it is the innocent rental company that has to bear the resulting 
expenses. For example, an individual in a rented auto struck a 
pedestrian at an intersection in a suburban commercial area on Long 
Island. The pedestrian, who was intoxicated, was jay-walking on her way 
from one bar to another. The driver was also intoxicated. The 
pedestrian unfortunately sustained a traumatic brain injury and was 
left in a permanent vegetative state. Although the auto rental company 
was clearly not at fault in this case, the result is predictable: the 
rental company was forced to settle for $8.5 million out of fear of a 
much larger jury award.
  We believe that subjecting product renters and lessors to vicarious 
liability is not only unfair, but also increases the cost to all 
consumers. Title II resolves this problem by providing that product 
renters and lessors shall not be liable for the wrongful acts of 
another solely by reason of product ownership--product renters and 
lessors would only be responsible for their own acts.
  I am pleased to have Senators Lieberman, Hatch, McCain, McConnell, 
Lott, Bond, Ashcroft, Coverdell. Nickles, Brownback, Gorton, Grassley, 
Sessions, Burns, Inhofe, Helms, Allard, Hagel, Mack, Bunning, Jeffords, 
DeWine, Craig, Hutchison, and Enzi as original cosponsors of the 
legislation and very much appreciate their support for our small 
businesses and for meaningful litigation reform. The list of business 
organizations supporting this bill is also impressive, and includes the 
following: National Federation of Independent Business, the National 
Restaurant Association, The National Association of Wholesalers, The 
National Retail Federation, The American Auto Leasing Association, The 
American Consulting Engineers Council, The Small Business Legislative 
Council, National Small Business United, The National Association of 
Convenience Stores. The American Car Rental Association, The 
International Mass Retail Association, the Associated Builders and 
Contractors, and the National Equipment Leasing Association.
  Mr. President, I ask unanimous consent that the bill and additional 
material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1185

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

     SECTION 1. SHORT TITLE.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Liability Reform Act of 1999''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title.

            TITLE I--SMALL BUSINESS LAWSUIT ABUSE PROTECTION

Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Limitation on punitive damages for small businesses.
Sec. 104. Limitation on several liability for noneconomic loss for 
              small businesses.
Sec. 105. Exceptions to limitations on liability.
Sec. 106. Preemption and election of State nonapplicability.
Sec. 107. Effective date.

                TITLE II--PRODUCT SELLER FAIR TREATMENT

Sec. 201. Findings; purposes.
Sec. 202. Definitions.
Sec. 203. Applicability; preemption.
Sec. 204. Liability rules applicable to product sellers, renters, and 
              lessors.
Sec. 205. Federal cause of action precluded.
Sec. 206. Effective date.

            TITLE I--SMALL BUSINESS LAWSUIT ABUSE PROTECTION

     SEC. 101. FINDINGS.

       Congress finds that--
       (1) the United States civil justice system is inefficient, 
     unpredictable, unfair, costly, and impedes competitiveness in 
     the marketplace for goods, services, business, and employees;
       (2) the defects in the civil justice system have a direct 
     and undesirable effect on interstate commerce by decreasing 
     the availability of goods and services in commerce;
       (3) there is a need to restore rationality, certainty, and 
     fairness to the legal system;

[[Page 11457]]

       (4) the spiralling costs of litigation and the magnitude 
     and unpredictability of punitive damage awards and 
     noneconomic damage awards have continued unabated for at 
     least the past 30 years;
       (5) the Supreme Court of the United States has recognized 
     that a punitive damage award can be unconstitutional if the 
     award is grossly excessive in relation to the legitimate 
     interest of the government in the punishment and deterrence 
     of unlawful conduct;
       (6) just as punitive damage awards can be grossly 
     excessive, so can it be grossly excessive in some 
     circumstances for a party to be held responsible under the 
     doctrine of joint and several liability for damages that 
     party did not cause;
       (7) as a result of joint and several liability, entities 
     including small businesses are often brought into litigation 
     despite the fact that their conduct may have little or 
     nothing to do with the accident or transaction giving rise to 
     the lawsuit, and may therefore face increased and unjust 
     costs due to the possibility or result of unfair and 
     disproportionate damage awards;
       (8) the costs imposed by the civil justice system on small 
     businesses are particularly acute, since small businesses 
     often lack the resources to bear those costs and to challenge 
     unwarranted lawsuits;
       (9) due to high liability costs and unwarranted litigation 
     costs, small businesses face higher costs in purchasing 
     insurance through interstate insurance markets to cover their 
     activities;
       (10) liability reform for small businesses will promote the 
     free flow of goods and services, lessen burdens on interstate 
     commerce, and decrease litigiousness; and
       (11) legislation to address these concerns is an 
     appropriate exercise of the powers of Congress under clauses 
     3, 9, and 18 of section 8 of article I of the Constitution of 
     the United States, and the 14 amendment to the Constitution 
     of the United States.

     SEC. 102. DEFINITIONS.

       In this title:
       (1) Act of international terrorism.--The term ``act of 
     international terrorism'' has the same meaning as in section 
     2331 of title 18, United States Code.
       (2) Crime of violence.--The term ``crime of violence'' has 
     the same meaning as in section 16 of title 18, United States 
     Code.
       (3) Drug.--The term ``drug'' means any controlled substance 
     (as defined in section 102 of the Controlled Substances Act 
     (21 U.S.C. 802(b)) that was not legally prescribed for use by 
     the defendant or that was taken by the defendant other than 
     in accordance with the terms of a lawfully issued 
     prescription.
       (4) Economic loss.--The term ``economic loss'' means any 
     pecuniary loss resulting from harm (including the loss of 
     earnings or other benefits related to employment, medical 
     expense loss, replacement services loss, loss due to death, 
     burial costs, and loss of business or employment 
     opportunities) to the extent recovery for such loss is 
     allowed under applicable State law.
       (5) Harm.--The term ``harm'' includes physical, 
     nonphysical, economic, and noneconomic losses.
       (6) Hate crime.--The term ``hate crime'' means a crime 
     described in section 1(b) of the Hate Crime Statistics Act 
     (28 U.S.C. 534 note).
       (7) Noneconomic loss.--The term ``noneconomic loss'' means 
     loss for physical or emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), injury to reputation, or any other 
     nonpecuniary loss of any kind or nature.
       (8) Small business.--
       (A) In general.--The term ``small business'' means any 
     unincorporated business, or any partnership, corporation, 
     association, unit of local government, or organization that 
     has less than 25 full-time employees.
       (B) Calculation of number of employees.--For purposes of 
     subparagraph (A), the number of employees of a subsidiary of 
     a wholly owned corporation includes the employees of--
       (i) a parent corporation; and
       (ii) any other subsidiary corporation of that parent 
     corporation.
       (9) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, territory, or possession.

     SEC. 103. LIMITATION ON PUNITIVE DAMAGES FOR SMALL 
                   BUSINESSES.

       (a) General Rule.--Except as provided in section 105, in 
     any civil action against a small business, punitive damages 
     may, to the extent permitted by applicable State law, be 
     awarded against the small business only if the claimant 
     establishes by clear and convincing evidence that conduct 
     carried out by that defendant through willful misconduct or 
     with a conscious, flagrant indifference to the rights or 
     safety of others was the proximate cause of the harm that is 
     the subject of the action.
       (b) Limitation on Amount.--In any civil action against a 
     small business, punitive damages shall not exceed the lesser 
     of--
       (1) 2 times the total amount awarded to the claimant for 
     economic and noneconomic losses; or
       (2) $250,000.
       (c) Application by Court.--This section shall be applied by 
     the court and shall not be disclosed to the jury.

     SEC. 104. LIMITATION ON SEVERAL LIABILITY FOR NONECONOMIC 
                   LOSS FOR SMALL BUSINESSES.

       (a) General Rule.--Except as provided in section 105, in 
     any civil action against a small business, the liability of 
     each defendant that is a small business, or the agent of a 
     small business, for noneconomic loss shall be determined in 
     accordance with subsection (b).
       (b) Amount of Liability.--
       (1) In general.--In any civil action described in 
     subsection (a)--
       (A) each defendant described in that subsection shall be 
     liable only for the amount of noneconomic loss allocated to 
     that defendant in direct proportion to the percentage of 
     responsibility of that defendant (determined in accordance 
     with paragraph (2)) for the harm to the claimant with respect 
     to which the defendant is liable; and
       (B) the court shall render a separate judgment against each 
     defendant described in that subsection in an amount 
     determined under subparagraph (A).
       (2) Percentage of responsibility.--For purposes of 
     determining the amount of noneconomic loss allocated to a 
     defendant under this section, the trier of fact shall 
     determine the percentage of responsibility of each person 
     responsible for the harm to the claimant, regardless of 
     whether or not the person is a party to the action.

     SEC. 105. EXCEPTIONS TO LIMITATIONS ON LIABILITY.

       The limitations on liability under sections 103 and 104 do 
     not apply to any misconduct of a defendant--
       (1) that constitutes--
       (A) a crime of violence;
       (B) an act of international terrorism; or
       (C) a hate crime;
       (2) that results in liability for damages relating to the 
     injury to, destruction of, loss of, or loss of use of, 
     natural resources described in--
       (A) section 1002(b)(2)(A) of the Oil Pollution Act of 1990 
     (33 U.S.C. 2702(b)(2)(A)); or
       (B) section 107(a)(4)(C) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9607(a)(4)(C));
       (3) that involves--
       (A) a sexual offense, as defined by applicable State law; 
     or
       (B) a violation of a Federal or State civil rights law; or
       (4) if the defendant was under the influence (as determined 
     under applicable State law) of intoxicating alcohol or a drug 
     at the time of the misconduct, and the fact that the 
     defendant was under the influence was the cause of any harm 
     alleged by the plaintiff in the subject action.

     SEC. 106. PREEMPTION AND ELECTION OF STATE NONAPPLICABILITY.

       (a) Preemption.--Subject to subsection (b), this title 
     preempts the laws of any State to the extent that State laws 
     are inconsistent with this title, except that this title 
     shall not preempt any State law that provides additional 
     protections from liability for small businesses.
       (b) Election of State Regarding Nonapplicability.--This 
     title does not apply to any action in a State court against a 
     small business in which all parties are citizens of the 
     State, if the State enacts a statute--
       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this title 
     does not apply as of a date certain to such actions in the 
     State; and
       (3) containing no other provision.

     SEC. 107. EFFECTIVE DATE.

       (a) In General.--This title shall take effect 90 days after 
     the date of enactment of this Act.
       (b) Application.--This title applies to any claim for harm 
     caused by an act or omission of a small business, if the 
     claim is filed on or after the effective date of this title, 
     without regard to whether the harm that is the subject of the 
     claim or the conduct that caused the harm occurred before 
     such effective date.

                TITLE II--PRODUCT SELLER FAIR TREATMENT

     SEC. 201. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) although damage awards in product liability actions may 
     encourage the production of safer products, they may also 
     have a direct effect on interstate commerce and consumers of 
     the United States by increasing the cost of, and decreasing 
     the availability of products;
       (2) some of the rules of law governing product liability 
     actions are inconsistent within and among the States, 
     resulting in differences in State laws that may be 
     inequitable with respect to plaintiffs and defendants and may 
     impose burdens on interstate commerce;
       (3) product liability awards may jeopardize the financial 
     well-being of individuals and industries, particularly the 
     small businesses of the United States;
       (4) because the product lability laws of a State may have 
     adverse effects on consumers

[[Page 11458]]

     and businesses in many other States, it is appropriate for 
     the Federal Government to enact national, uniform product 
     liability laws that preempt State laws; and
       (5) under clause 3 of section 8 of article I of the United 
     States Constitution, it is the constitutional role of the 
     Federal Government to remove barriers to interstate commerce.
       (b) Purposes.--The purposes of this Act, based on the 
     powers of the United States under clause 3 of section 8 of 
     article I of the United States Constitution, are to promote 
     the free flow of goods and services and lessen the burdens on 
     interstate commerce, by--
       (1) establishing certain uniform legal principles of 
     product liability that provide a fair balance among the 
     interests of all parties in the chain of production, 
     distribution, and use of products; and
       (2) reducing the unacceptable costs and delays in product 
     liability actions caused by excessive litigation that harms 
     both plaintiffs and defendants.

     SEC. 202. DEFINITIONS.

       In this title:
       (1) Alcohol product.--The term ``alcohol product'' includes 
     any product that contains not less than \1/2\ of 1 percent of 
     alcohol by volume and is intended for human consumption.
       (2) Claimant.--The term ``claimant'' means any person who 
     brings an action covered by this title and any person on 
     whose behalf such an action is brought. If such an action is 
     brought through or on behalf of an estate, the term includes 
     the claimant's decedent. If such an action is brought through 
     or on behalf of a minor or incompetent, the term includes the 
     claimant's legal guardian.
       (3) Commercial loss.--The term ``commercial loss'' means--
       (A) any loss or damage solely to a product itself;
       (B) loss relating to a dispute over the value of a product; 
     or
       (C) consequential economic loss, the recovery of which is 
     governed by applicable State commercial or contract laws that 
     are similar to the Uniform Commercial Code.
       (4) Compensatory damages.--The term ``compensatory 
     damages'' means damages awarded for economic and noneconomic 
     losses.
       (5) Dram-shop.--The term ``dram-shop'' means a drinking 
     establishment where alcoholic beverages are sold to be 
     consumed on the premises.
       (6) Economic loss.--The term ``economic loss'' means any 
     pecuniary loss resulting from harm (including the loss of 
     earnings or other benefits related to employment, medical 
     expense loss, replacement services loss, loss due to death, 
     burial costs, and loss of business or employment 
     opportunities) to the extent recovery for that loss is 
     allowed under applicable State law.
       (7) Harm.--The term ``harm'' includes physical, 
     nonphysical, economic, and noneconomic loss.
       (8) Manufacturer.--The term ``manufacturer'' means--
       (A) any person who--
       (i) is engaged in a business to produce, create, make, or 
     construct any product (or component part of a product); and
       (ii)(I) designs or formulates the product (or component 
     part of the product); or
       (II) has engaged another person to design or formulate the 
     product (or component part of the product);
       (B) a product seller, but only with respect to those 
     aspects of a product (or component part of a product) that 
     are created or affected when, before placing the product in 
     the stream of commerce, the product seller--
       (i) produces, creates, makes, constructs and designs, or 
     formulates an aspect of the product (or component part of the 
     product) made by another person; or
       (ii) has engaged another person to design or formulate an 
     aspect of the product (or component part of the product) made 
     by another person; or
       (C) any product seller not described in subparagraph (B) 
     that holds itself out as a manufacturer to the user of the 
     product.
       (9) Noneconomic loss.--The term ``noneconomic loss'' means 
     loss for physical or emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), injury to reputation, or any other 
     nonpecuniary loss of any kind or nature.
       (10) Person.--The term ``person'' means any individual, 
     corporation, company, association, firm, partnership, 
     society, joint stock company, or any other entity (including 
     any governmental entity).
       (11) Product.--
       (A) In general.--The term ``product'' means any object, 
     substance, mixture, or raw material in a gaseous, liquid, or 
     solid state that--
       (i) is capable of delivery itself or as an assembled whole, 
     in a mixed or combined state, or as a component part or 
     ingredient;
       (ii) is produced for introduction into trade or commerce;
       (iii) has intrinsic economic value; and
       (iv) is intended for sale or lease to persons for 
     commercial or personal use.
       (B) Exclusion.--The term ``product'' does not include--
       (i) tissue, organs, blood, and blood products used for 
     therapeutic or medical purposes, except to the extent that 
     such tissue, organs, blood, and blood products (or the 
     provision thereof) are subject, under applicable State law, 
     to a standard of liability other than negligence; or
       (ii) electricity, water delivered by a utility, natural 
     gas, or steam.
       (12) Product liability action.--The term ``product 
     liability action'' means a civil action brought on any theory 
     for any physical injury, illness, disease, death, or damage 
     to property that is caused by a product.
       (13) Product seller.--
       (A) In general.--The term ``product seller'' means a person 
     who in the course of a business conducted for that purpose--
       (i) sells, distributes, rents, leases, prepares, blends, 
     packages, labels, or otherwise is involved in placing a 
     product in the stream of commerce; or
       (ii) installs, repairs, refurbishes, reconditions, or 
     maintains the harm-causing aspect of the product.
       (B) Exclusion.--The term ``product seller'' does not 
     include--
       (i) a seller or lessor of real property;
       (ii) a provider of professional services in any case in 
     which the sale or use of a product is incidental to the 
     transaction and the essence of the transaction is the 
     furnishing of judgment, skill, or services; or
       (iii) any person who--

       (I) acts in only a financial capacity with respect to the 
     sale of a product; or
       (II) leases a product under a lease arrangement in which 
     the lessor does not initially select the leased product and 
     does not during the lease term ordinarily control the daily 
     operations and maintenance of the product.

       (14) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, territory, or possession.

     SEC. 203. APPLICABILITY; PREEMPTION.

       (a) Preemption.--
       (1) In general.--Except as provided in paragraph (2), this 
     title governs any product liability action brought in any 
     Federal or State court.
       (2) Actions excluded.--
       (A) Actions for commercial loss.--A civil action brought 
     for commercial loss shall be governed only by applicable 
     State commercial or contract laws that are similar to the 
     Uniform Commercial Code.
       (B) Actions for negligent entrustment; negligence per se 
     concerning firearms and ammunition; dram-shop.--
       (i) Negligent entrustment.--A civil action for negligent 
     entrustment shall not be subject to the provisions of this 
     title governing product liability actions, but shall be 
     subject to any applicable Federal or State law.
       (ii) Negligence per se concerning firearms and 
     ammunition.--A civil action brought under a theory of 
     negligence per se concerning the use of a firearm or 
     ammunition shall not be subject to the provisions of this 
     title governing product liability actions, but shall be 
     subject to any applicable Federal or State law.
       (iii) Dram-shop.--A civil action brought under a theory of 
     dram-shop or third-party liability arising out of the sale or 
     providing of an alcoholic product to an intoxicated person or 
     minor shall not be subject to the provisions of this title, 
     but shall be subject to any applicable Federal or State law.
       (b) Relationship to State Law.--This title supersedes a 
     State law only to the extent that the State law applies to an 
     issue covered by this title. Any issue that is not governed 
     by this title, including any standard of liability applicable 
     to a manufacturer, shall be governed by any applicable 
     Federal or State law.
       (c) Effect on Other Law.--Nothing in this title shall be 
     construed to--
       (1) waive or affect any defense of sovereign immunity 
     asserted by any State under any State law;
       (2) supersede or alter any Federal law;
       (3) waive or affect any defense of sovereign immunity 
     asserted by the United States;
       (4) affect the applicability of any provision of chapter 97 
     of title 28, United States Code;
       (5) preempt State choice-of-law rules with respect to 
     claims brought by a foreign nation or a citizen of a foreign 
     nation;
       (6) affect the right of any court to transfer venue or to 
     apply the law of a foreign nation or to dismiss a claim of a 
     foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum; or
       (7) supersede or modify any statutory or common law, 
     including any law providing for an action to abate a 
     nuisance, that authorizes a person to institute an action for 
     civil damages or civil penalties, cleanup costs, injunctions, 
     restitution, cost recovery, punitive damages, or any other 
     form of relief, for remediation of the environment (as 
     defined in section 101(8) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601(8))).

     SEC. 204. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS, 
                   RENTERS, AND LESSORS.

       (a) General Rule.--
       (1) In general.--In any product liability action covered 
     under this Act, a product seller other than a manufacturer 
     shall be liable

[[Page 11459]]

     to a claimant only if the claimant establishes that--
       (A)(i) the product that allegedly caused the harm that is 
     the subject of the complaint was sold, rented, or leased by 
     the product seller;
       (ii) the product seller failed to exercise reasonable care 
     with respect to the product; and
       (iii) the failure to exercise reasonable care was a 
     proximate cause of the harm to the claimant;
       (B)(i) the product seller made an express warranty 
     applicable to the product that allegedly caused the harm that 
     is the subject of the complaint, independent of any express 
     warranty made by a manufacturer as to the same product;
       (ii) the product failed to conform to the warranty; and
       (iii) the failure of the product to conform to the warranty 
     caused the harm to the claimant; or
       (C)(i) the product seller engaged in intentional 
     wrongdoing, as determined under applicable State law; and
       (ii) the intentional wrongdoing caused the harm that is the 
     subject of the complaint.
       (2) Reasonable opportunity for inspection.--For purposes of 
     paragraph (1)(A)(ii), a product seller shall not be 
     considered to have failed to exercise reasonable care with 
     respect to a product based upon an alleged failure to inspect 
     the product, if--
       (A) the failure occurred because there was no reasonable 
     opportunity to inspect the product; or
       (B) the inspection, in the exercise of reasonable care, 
     would not have revealed the aspect of the product that 
     allegedly caused the claimant's harm.
       (b) Special Rule.--
       (1) In general.--A product seller shall be deemed to be 
     liable as a manufacturer of a product for harm caused by the 
     product, if--
       (A) the manufacturer is not subject to service of process 
     under the laws of any State in which the action may be 
     brought; or
       (B) the court determines that the claimant is or would be 
     unable to enforce a judgment against the manufacturer.
       (2) Statute of limitations.--For purposes of this 
     subsection only, the statute of limitations applicable to 
     claims asserting liability of a product seller as a 
     manufacturer shall be tolled from the date of the filing of a 
     complaint against the manufacturer to the date that judgment 
     is entered against the manufacturer.
       (c) Rented or Leased Products.--
       (1) Definition.--For purposes of paragraph (2), and for 
     determining the applicability of this title to any person 
     subject to that paragraph, the term ``product liability 
     action'' means a civil action brought on any theory for harm 
     caused by a product or product use.
       (2) Liability.--Notwithstanding any other provision of law, 
     any person engaged in the business of renting or leasing a 
     product (other than a person excluded from the definition of 
     product seller under section 202(13)(B)) shall be subject to 
     liability in a product liability action under subsection (a), 
     but any person engaged in the business of renting or leasing 
     a product shall not be liable to a claimant for the tortious 
     act of another solely by reason of ownership of that product.

     SEC. 205. FEDERAL CAUSE OF ACTION PRECLUDED.

       The district courts of the United States shall not have 
     jurisdiction under this title based on section 1331 or 1337 
     of title 28, United States Code.

     SEC. 206. EFFECTIVE DATE.

       This title shall apply with respect to any action commenced 
     on or after the date of enactment of this Act without regard 
     to whether the harm that is the subject of the action or the 
     conduct that caused the harm occurred before that date of 
     enactment.
                                  ____


  The Small Business Liability Reform Act of 1999--Section-By-Section 
                                Analysis

       A bill to offer small businesses and product sellers 
     certain protections from litigation excesses.


            Title I: Small Business Lawsuit Abuse Protection

     Section 101: Findings
       This section sets out congressional findings concerning the 
     litigation excesses facing small businesses, and the need for 
     litigation reforms to provide certain protections to small 
     businesses from abusive litigation.
     Section 102: Definitions
       Various terms used in this title are defined in this 
     section. Significantly, for purposes of the legislation, a 
     small business is defined as any business or organization 
     with fewer than 25 full time employees.
     Section 103: Limitation on punitive damages for small 
         businesses
       This section provides that punitive damages may, to the 
     extent permitted by applicable State law, be awarded against 
     a defendant that is a small business only if the claimant 
     establishes by clear and convincing evidence that conduct 
     carried out by that defendant with a conscious, flagrant 
     indifference to the rights or safety of others was the 
     proximate cause of the harm that is the subject of the 
     action.
       This section also limits the amount of punitive damages 
     that may be awarded against a small business. In any civil 
     action against a small business, punitive damages may not 
     exceed the lesser of two times the amount awarded to the 
     claimant for economic and noneconomic losses, or $250,000.
     Section 104: Limitation on several liability for noneconomic 
         loss for small business
       This section provides that, in any civil action against a 
     small business, for each defendant that is a small business, 
     the liability of that defendant for noneconomic loss will be 
     in proportion to that defendant's responsibility for causing 
     the harm. Those defendants would continue, however, to be 
     held jointly and severally liable for economic loss. In 
     addition, any other defendants in the action that are not 
     small businesses would continue to be held jointly and 
     severally liable for both economic and noneconomic loss.
     Section 105: Exceptions to limitations on liability
       The limitations on liability included in this title would 
     not apply to any misconduct that constitutes a crime of 
     violence, act of international terrorism, hate crime, sexual 
     offense, civil rights law violation, or natural resource 
     damages, or which occurred while the defendant was under the 
     influence of intoxicating alcohol or any drug.
     Section 106: Preemption and election of State 
         nonapplicability
       This title preempts State laws to the extent that any such 
     laws are inconsistent with it, but it does not preempt any 
     State law that provides additional protections from liability 
     to small businesses. The title also includes an opt-out 
     provision for the States. A State may opt out of the 
     provisions of the title for any action in State court against 
     a small business in which all parties are citizens of the 
     State. In order to opt out, the State would have to enact a 
     statute citing the authority in this section, declaring the 
     election of the State to opt, and containing no other 
     provisions.
     Section 107: Effective date
       This title would take effect 90 days after the date of 
     enactment, and would apply to claims filed on or after the 
     effective date.


                Title II: Product Seller Fair Treatment

     Section 201: Findings
       This section sets out congressional findings concerning the 
     effect of damage awards in product liability actions on 
     interstate commerce, the present inequities resulting from 
     inconsistent product liability laws within and among the 
     States, and the need for national, uniform federal product 
     liability laws.
     Section 202: Definitions
       Various terms and phrases used in this title are defined.
     Section 203: Applicability; preemption
       This title applies to any product liability action brought 
     in any Federal or State court. Civil actions for commercial 
     loss; negligent entrustment; negligence per se concerning 
     firearms and ammunition; and civil actions for dram shop 
     liability are excluded from the applicability of this title.
       This section further establishes that the preemption of 
     state law by this title is congruent with coverage, and the 
     limit of the preemptive scope of this title is detailed.
     Section 204: Liability rules applicable to product sellers, 
         renters and lessors
       Product sellers other than the manufacturer (wholesaler-
     distributors and retailers, for example) may be held liable 
     only if they are directly at fault for a harm; if the harm 
     was caused by the failure of the product to conform to the 
     product seller's own, independent express warranty; or if 
     harm was the result of the product seller's intentional 
     wrongdoing.
       Product sellers shall ``stand in the shoes'' of a culpable 
     manufacturer when the manufacturer is ``judgement-proof.'' 
     The statute of limitations in such cases is tolled.
       Finally, product renters and lessors shall not be liable 
     for the tortuous acts of another solely by reason of product 
     ownership.
     Section 205: Federal cause of action precluded
       This title does not create Federal district court 
     jurisdiction pursuant to Sections 1331 or 1337 of Title 28, 
     United States Code.
     Section 206: Effective date
       This title shall apply to any action commenced on or after 
     the date of enactment.
                                  ____


            NAW Endorses Abraham-Lieberman Legal Reform Bill


         Legislation Would Reduce Unnecessary Litigation; Costs

       Washington, D.C.--The National Association of Wholesaler-
     Distributors (NAW) today gave its ``enthusiastic and 
     wholehearted support'' to the Small Business Liability Reform 
     Act of 1999, which would significantly reduce the exposure of 
     wholesaler-distributors and retailers to unwarranted product 
     liability lawsuits and legal costs.
       The legislation, introduced in the U.S. Senate today by 
     Senators Spencer Abraham (R-MI) and Joseph Lieberman (D-CT), 
     would eliminate joint (``deep pockets'') liability for 
     ``noneconomic loss'' and limit punitive damage awards to 
     $250,000 for employers with fewer than 25 full-time employees 
     that become defendants in civil lawsuits. Neither of these 
     provisions would apply to lawsuits involving certain 
     egregious misconduct, and states would be able to opt-out by 
     statute.

[[Page 11460]]

       In product liability lawsuits, the bill would limit the 
     liability of non-manufacturer product sellers such as 
     wholesaler-distributors, retailers, lessors and renters to 
     harms caused by their own negligence or intentional 
     wrongdoing, the product's breech of the seller's own express 
     warranty, and for the product manufacturer's responsibility 
     when the manufacturer is judgment-proof.
       ``The product liability laws of a majority of states do not 
     make the distinction between the differing roles of 
     manufacturers and non-manufacturer product sellers. As a 
     result, blameless wholesaler-distributors are routinely 
     joined in product liability lawsuits simply because they are 
     in the product's chain of distribution,'' explained George 
     Keeley, NAW general counsel and senior partner in the firm of 
     Keeley, Kuenn & Reid. ``In the end, the staggering legal fees 
     which cost the seller dearly do not benefit the claimant in 
     any way. These costs will be significantly reduced if the 
     Abraham-Lieberman bill is enacted.''
       ``For too long, wholesaler-distributors have been among the 
     victims of a product liability system that serves the 
     interests of trial lawyers very well, at everyone else's 
     expense,'' said Dirk Van Dongen, NAW's president. ``For 
     nearly two decades, NAW has vigorously advocated Federal 
     legislation to rein-in these abuses. Enactment of the Small 
     Business Liability Reform Act of 1999 is at the very top of 
     our agenda for the 106th Congress and I commend Senators 
     Abraham and Lieberman for their continuing, tireless 
     leadership of this important effort.''
                                  ____


                 NFIB Backs New Legal Reform Initiative

       Washington, D.C.--The National Federation of Independent 
     Business (NFIB) will champion a new legal reform proposal 
     that aims to protect small-business owners from frivolous 
     lawsuits and the threat of being ``stuck with the whole tab'' 
     for damage awards arising from incidents in which they were 
     only ``bit players.''
       The nation's leading small-business advocacy group, NFIB 
     hailed today's introduction of the Small Business Liability 
     Reform Act of 1999. Sponsored by U.S. Sens. Spencer Abraham 
     (Mich.) and Joseph Lieberman (Conn.), the proposal would 
     limit the amount of punitive damages that might be sought 
     from a small firm to two times the amount of compensatory 
     damages or $250,000, whichever is less.
       The measure also would eliminate joint-and-several 
     liability for small firms, leaving them responsible for 
     paying only their ``proportionate'' share of non-economic 
     damages. Under the current doctrine of joint-and-several 
     liability, defendants found to be as little as 1 percent ``at 
     fault'' in a civil case may end up paying all assessed 
     damages, if no other defendants are able to pay.
       ``This bill strikes a long-overdue blow on behalf of 
     fairness, common sense and true justice,'' said Dan Danner, 
     NFIB's vice president of federal public policy. ``Limiting 
     punitive damages and exposure to liability will make small 
     businesses a much less lucrative--and, thus, a much less 
     attractive--target for trial lawyers and others tempted to 
     file frivolous lawsuits to extort settlements.
       ``Ending joint-and-several liability will improve justice 
     by making sure small-business owners pay their fair share of 
     damages--but not more,'' he continued. ``Under the current 
     doctrine, the effort to compensate one victim often creates 
     yet another victim--the marginally-involved business owner 
     who is left holding the bag for everyone else involved.''
       The Abraham-Lieberman bill would limit liability in all 
     types of civil lawsuits for businesses with fewer than 25 
     employees. NFIB's Danner estimated the liability limitations 
     would apply to ``a little more than 90 percent'' of all 
     employing businesses. ``Passage would bring relief to 
     literally millions of small-business owners and their 
     families,'' he said. ``It would certainly ease Main Street's 
     growing anxiety about being slapped with--and ruined by--a 
     Mickey Mouse lawsuit.''
       ``When we asked our members in Alabama to identify the 
     biggest problem facing their businesses, the most frequent 
     answer, by far, was `cost of liability insurance/fear of 
     lawsuits','' Danner noted. ``Another problem, `street crime,' 
     drew only a third as many responses.
       ``There's something dreadfully wrong with our justice 
     system when small-business owners are three times more 
     fearful of being mugged by trial lawyers than by common 
     street thugs.''
       A nationwide survey of NFIB's 600,000 members found 
     virtually all (93 percent) favor capping punitive damages. 
     ``Small-business owners support any measures that will 
     restore fairness, balance and common sense to our civil 
     justice system,'' Danner said. ``We have pledged our full 
     support to Sens. Abraham and Lieberman in their efforts to do 
     just that, through their Small Business Liability Reform 
     Act.''
       Eliminating frivolous lawsuits is a priority in NFIB's 
     Small Business Growth Agenda for the 106th Congress. To learn 
     more about the Act of NFIB's Agenda, please contact McCall 
     Cameron at 202/554-9000.
                                  ____


    SBLC Applauds Senator Abraham's Small Business Liability Reform 
                              Legislation

       Washington, D.C.--``We are pleased that Senator Spencer 
     Abraham has introduced legislation that will have a 
     significant impact on small business and the legal system,'' 
     said David Gorin, Chairman of the Small Business Legislative 
     Council (SBLC). Mr. Gorin's remarks refer to the Small 
     Business Liability Reform Act of 1999, which Senator Abraham 
     and Senator Joseph Lieberman have introduced today. The 
     legislation proposes a $250,000 limit on punitive damages for 
     small business as well as provide protection from product-
     related injuries for non-manufacturing product sellers.
       Gorin continued, ``For far too long, small businesses have 
     been the losers in `litigation lottery.' As our civil justice 
     system has moved farther and farther away from common sense, 
     small businessses have had to absorb an increasing hidden 
     cost of doing business. That hidden cost is the result of 
     making decisions and undertaking actions, not on the basis of 
     what makes good business sense, but rather on the basis of 
     `will I be sued?' ''
       Gorin concluded, ``The Small Business Legislative Council 
     strongly supports Senator Abraham's legislation. SBLC 
     believes the Small Business Liability Reform Act will restore 
     common sense to the civil justice system and allow small 
     businesses to make decisions on the basis of what's best for 
     the economy, not the trial lawyers.''
       The SBLC is a permanent, independent coalition of nearly 
     eighty trade and professional associations that share a 
     common commitment to the future of small business. Our 
     members represent the interests of small businesses in such 
     diverse economic sectors as manufacturing, retailing, 
     distribution, professional and technical services, 
     construction, transportation, and agriculture. Our policies 
     are developed through a consensus among our membership. 
     Individual associations may express their own views.


           Members of the Small Business Legislative Council

       ACIL.
       Air Conditioning Contractors of America.
       Alliance for Affordable Health Care.
       Alliance for American Innovation.
       Alliance of Independent Store Owners and Professionals.
       American Animal Hospital Association.
       American Association of Equine Practitioners.
       American Bus Association.
       American Consulting Engineers Council.
       American Machine Tool Distributors Association.
       American Nursery and Landscape Association.
       American Road & Transportation Builders Association.
       American Society of Interior Designers.
       American Society of Travel Agents, Inc.
       American Subcontractors Association.
       American Textile Machinery Association.
       American Trucking Associations, Inc.
       Architectural Precast Association.
       Associated Equipment Distributors.
       Associated Landscape Contractors of America.
       Association of Small Business Development Centers.
       Association of Sales and Marketing Companies.
       Automotive Recyclers Association.
       Automotive Service Association.
       Bowling Proprietors Association of America.
       Building Service Contractors Association International.
       Business Advertising Council.
       CBA.
       Council of Fleet Specialists.
       Council of Growing Companies.
       Direct Selling Association.
       Electronics Representatives Association.
       Florists' Transworld Delivery Association.
       Health Industry Representatives Association.
       Helicopter Association International.
       Independent Bankers Association of America.
       Independent Medical Distributors Association.
       International Association of Refrigerated Warehouses.
       International Formalwear Association.
       International Franchise Association.
       Machinery Dealers National Association.
       Mail Advertising Service Association.
       Manufacturers Agents for the Food Service Industry.
       Manufacturers Agents National Association.
       Manufacturers Representatives of America, Inc.
       National Association for the Self-Employed.
       National Association of Home Builders.
       National Association of Plumbing-Heating-Cooling 
     Contractors.
       National Association of Realtors.
       National Association of RV Parks and Campgrounds.
       National Association of Small Business Investment 
     Companies.
       National Association of Surety Bond Producers.
       National Association of the Remodeling Industry.
       National Chimney Sweep Guild.
       National Community Pharmacists Association.

[[Page 11461]]

       National Electrical Contractors Association.
       National Electrical Manufacturers Representatives 
     Association.
       National Funeral Directors Association, Inc.
       National Lumber & Building Material Dealers Association.
       National Moving and Storage Association.
       National Ornamental & Miscellaneous Metals Association.
       National Paperbox Association.
       National Shoe Retailers Association.
       National Society of Public Accountants.
       National Tooling and Machining Association.
       National Tour Association.
       National Wood Flooring Association.
       Opticians Association of America.
       Organization for the Promotion and Advancement of Small 
     Telephone Companies.
       Petroleum Marketers Association of America.
       Power Transmission Representatives Association.
       Printing Industries of America, Inc.
       Professional Lawn Care Association of America.
       Promotional Products Association International.
       The Retailer's Bakery Association.
       Small Business Council of America, Inc.
       Small Business Exporters Association.
       SMC Business Councils.
       Small Business Technology Coalition.
       Society of American Florists.
       Turfgrass Producers International.
       Tire Association of North America.
       United Motorcoach Association.
                                  ____


      NSBU Enthusiastically Supports Small Business Liability Bill


    Small Business Association of Michigan also lends their support

       Washington, DC--National Small Business United (NSBU), the 
     nation's oldest bipartisan small business advocacy 
     organization, is pleased to announce their support for the 
     Small Business Liability Reform Act of 1999. The Small 
     Business Association of Michigan (SBAM), one of NSBU's 
     affiliate groups, has also announced their support for the 
     legislation which will provide protections to small business 
     from frivolous and excessive litigation as well as limiting 
     the product liability of non-manufacturer product sellers.
       Senators Spencer Abraham (R-Mich.) and Joseph Lieberman (D-
     Conn.), both of whom sit on the Senate Committee on Small 
     Business, will introduce this measure which provides critical 
     and necessary restrictions upon litigation, while not 
     prohibiting legitimate litigation.
       ``In today's litigious environment, small businesses are 
     often used as a scapegoat. Everyday, small businesses are 
     forced to shut down and close because of these frivolous, and 
     often times, unnecessary lawsuits,'' said Tom Farrell, NSBU 
     Chair and owner of Farrell Consulting, Inc. in Pittsburgh, 
     PA. ``The Small Business Liability Reform Act will finally 
     place some common sense limitations on these unfounded 
     lawsuits.''
       NSBU joins SBAM in applauding Senators Abraham and 
     Lieberman for their pragmatic leadership on such an important 
     issue for the small business community.
                                  ____


    NRF Supports Bill To Protect Small Businesses From Unnecessary 
                               Litigation

       Washington, DC--The National Retail Federation voiced its 
     support for the Small Business Liability Reform Act of 1999. 
     The bill, which is sponsored by Senators Spencer Abraham (R-
     MI) and Joseph Lieberman (D-CT), would help protect small 
     businesses from frivolous litigation and exorbitant legal 
     fees. Of particular interest to the retail industry are the 
     bill's provisions to exclude small businesses from joint 
     liability stemming from products they sell.
       ``Retailers often find themselves party to product 
     liability lawsuits where no direct liability exists,'' said 
     NRF Vice President and General Counsel, Mallory Duncan. 
     ``This bill would shift the responsibility for defective 
     products to where it rightly belongs--the manufacturer.''
       The Small Business Liability Reform Act of 1999 would apply 
     to businesses with 25 or fewer employees. According to 
     Department of Commerce figures, more than 80 percent of the 
     nation's retailers employ fewer than 25 individuals.
       A recent Gallup survey suggests that some business owners' 
     fear of litigation may impact critical operational decisions. 
     The resulting ``chilling effect'' on the growth potential of 
     small businesses underscores the need for reform, according 
     to NRF.
       ``This bill would provide long-overdue and much needed 
     relief to millions of entrepreneurs whose businesses could 
     succeed or fail as the result of a single lawsuit,'' Duncan 
     said. ``Most small business owners lack the resources to both 
     defend themselves against legal action and remain solvent. 
     This bill would give them some piece of mind and the 
     confidence to manage their business without undue fear of 
     financial ruin.''
       The National Retail Federation (NRF) is the world's largest 
     retail trade association with membership that comprises all 
     retail formats and channels of distribution including 
     department, specialty, discount, catalogue, Internet and 
     independent stores. NRF members represent an industry that 
     encompasses more than 1.4 million U.S. retail establishments, 
     employs more than 20 million people--about 1 in 5 American 
     workers--and registered 1998 sales of $2.7 trillion. NRF's 
     international members operate stores in more than 50 nations. 
     In its role as the retail industry's umbrella group, NRF also 
     represents 32 national and 50 state associations in the U.S. 
     as well as 36 international associations representing 
     retailers abroad.
                                  ____


National Restaurant Association Backs Abraham/Lieberman Effort To Crack 
                       Down on Frivolous Lawsuits


     Says small restaurants need protection from costly, excessive 
                               litigation

       Washington, DC--Saying that just one costly lawsuit is 
     enough to put a restaurant out of business, the National 
     Restaurant Association today strongly endorsed a bill 
     sponsored by Sens. Spence Abraham (R-MI) and Joseph Lieberman 
     (D-CT) to protect small businesses from litigation abuse.
       ``The tendency for people today to sue for outlandish 
     reasons is out of control,'' said Association Senior Vice 
     President of Government and Corporate Affairs Elaine Z. 
     Graham. ``In recent years, many restaurants unfortunately 
     have become targets for frivolous lawsuits. The reality is 
     that it only takes one such lawsuit to drive a restaurant out 
     of business. As a result, restaurants pay for high-priced 
     liability insurance in an effort to arm themselves against 
     the prospects of being sued.
       ``Our legal system needs to be reformed. We strongly 
     support the Abraham/Lieberman bill and believe it will go a 
     long way toward protecting smaller restaurants and curbing 
     litigation abuse,'' she added.
       The bill, the Small Business Lawsuit Abuse Protection Act, 
     limits the amount of punitive damages that may be awarded 
     against a business with 25 or fewer employees. Currently, 
     many small businesses settle out of court and pay hefty 
     awards--even if the claim is unfounded--because they are 
     fearful of being hit with unlimited punitive damages. By 
     putting a cap on punitive damages, the Abraham/Lieberman bill 
     helps eliminate needless lawsuits and makes it easier for 
     small businesses to get fair settlements, avoiding excessive 
     legal fees.
       The Association is urging members of Congress to support 
     the Abraham/Lieberman bill.
                                  ____


          NACS Supports Small Business Lawsuit Protection Act

       Alexandria, Virginia--The National Association of 
     Convenience Stores (NACS) is pleased to endorse legislation 
     authored by Senators Spencer Abraham (R-MI) and Joe Lieberman 
     (D-CT) that would limit small businesses' exposure to damages 
     and liability in civil cases.
       The ``Small Business Liability Reform Act of 1999'' is 
     broken into two sections: ``Small Business Lawsuit Abuse 
     Protection'' and ``Product Seller Fair Treatment.'' The Small 
     Business Lawsuit Abuse Protection section would limit small 
     business exposure to punitive damages and joint liability for 
     non-economic damages, in any civil action (with some 
     exceptions). The damages would be limited to a maximum of 
     $250,000. Under the bill, small businesses are defined as 
     having under 25 employees. The Product Seller Fair Treatment 
     section would hold non-manufacturing product sellers (local 
     wholesaler-distributors and neighborhood retailers) liable 
     for product-related injuries only when the seller is directly 
     responsible for the harm.
       ``More than 70 percent of the over 77,000 stores operated 
     by NACS members are either one-store operations or part of a 
     chain of 10 or fewer stores. These small business owners 
     provide an essential service to their communities, contribute 
     significantly to local economies and employ hundreds of 
     thousands of people,'' said Lyle Beckwith, Director, 
     Government Relations at NACS. ``Because this bill protects 
     those small business people from rising liability insurance 
     costs and frivolous lawsuits, NACS will work proactively for 
     its passage, and encourage other senators to follow the 
     leadership of Senators Abraham and Lieberman.''
                                  ____


         ACEC Supports ``Small Business Liability Reform Act''

       Washington, D.C.--The American Consulting Engineers Council 
     (ACEC) strongly supports the ``Small Business Liability 
     Reform Act of 1999'' which was introduced today by Senators 
     Spencer Abraham (R-MI) and Joseph Lieberman (D-CT). The 
     legislation, which builds on proposals that have earned 
     strong bipartisan support in recent Congresses, will improve 
     out nation's civil justice system through a package of 
     carefully-targeted reforms--reforms that will deter 
     unwarranted, frivolous, and needlessly wasteful litigation 
     against employers, and particularly small businesses.
       The threat of litigation and frivolous lawsuits continues 
     to be a primary concern for consulting engineering firms 
     according to ACEC's recent Professional Liability Survey 
     report. Fully 75% of survey respondents indicated that the 
     threat of litigation stifled the use of innovative techniques 
     or technologies while working on projects. Over one-third of 
     all claims filed against ACEC member firms resulted in no 
     payment of any kind to the plaintiff, a fact which indicates 
     that ``frivolous'' litigation remains a problem for the 
     industry.

[[Page 11462]]

       The Small Business Liability Reform Act would limit the 
     exposure of small businesses to punitive damages and joint 
     liability for non-economic damages in any civil action, with 
     the exception of lawsuits involving certain types of 
     egregious conduct. If passed, the bill would limit punitive 
     damages to the lesser of two times the amount awarded to the 
     claimant for economic and noneconomic losses, or $250,000.
       Howard M. Messner, ACEC's Executive Vice President, 
     applauded the Senators' decision to sponsor this legislation, 
     saying ``ACEC has long supported the types of reforms 
     incorporated in this legislation. Our member firms have 
     learned from direct experience that meritless lawsuits can 
     cripple a professional's practice, especially when that 
     professional is a small businessperson. For this reason, we 
     will certainly support legislative initiatives designed to 
     provide some much-needed relief from baseless lawsuits.''
                                  ____


IMRA Hails Bill Limiting Retailers' Exposure to Product Liability Suits


        abraham-lieberman bill would guard innocent distributors

       Arlington, VA--The International Mass Retail Association 
     (IMRA) applauds today's introduction of the bipartisan 
     ``Small Business Liability Reform Act of 1999'' by Senators 
     Spencer Abraham (R-MI) and Joseph Lieberman (D-CT). The bill 
     would shield from product liability lawsuits retailers and 
     other distributors if they did not take part in the product's 
     design and manufacture. It would generally hold retailers and 
     other distributors responsible only for their own negligence, 
     not for the actions of manufacturers.
       ``All too often, mass retailers are unfairly dragged into 
     product liability lawsuits when they have had no part in 
     designing or producing the item in question,'' said IMRA 
     President Robert J. Verdisco. ``Simply selling a product 
     should not automatically bring the retailer or distributor 
     into product liability lawsuits.''
       The Abraham-Lieberman bill would allow a product seller to 
     be brought into Federal or state product liability lawsuits 
     only if the plaintiff can show harm due to a retailer's or 
     distributor's failure to exercise reasonable care with the 
     product, failure to live up to its own express warranty, or 
     deliberate wrongdoing. Retailers and distributors could also 
     be brought in when the product maker cannot be brought into 
     court or pay a judgment against it.
       Verdisco called the Abraham-Lieberman measure ``long-
     needed, common-sense reform to our nation's product liability 
     system.'' He noted that the same provisions have been part of 
     broader product liability reform bills for many years without 
     prompting major controversy.
       ``Product safety is an important concern for the nation's 
     mass retailers,'' Verdisco noted, ``but groundless, costly 
     product liability cases against retailers who have no 
     involvement other than selling the product can jeopardize the 
     wide selection and low prices that consumers have come to 
     expect from mass retail stores.'' He added, ``The Abraham-
     Lieberman bill would provide innocent retailers and 
     distributors with fair and reasonable safeguards, while still 
     allowing consumers to pursue claims they believe are 
     meritorious against those most responsible for the product.''
                                  ____


      ABC Applauds Introduction of Small Business Liability Reform

       Washington, D.C.--May 28, 1999--ABC applauded the 
     introduction today of the Small Business Liability Reform Act 
     of 1999 by Sens. Spencer Abraham (R-Mich.) and Joseph 
     Lieberman (D-Conn.).
       ABC President David Bush said, ``ABC has long been 
     supportive of lawsuit reform as a beneficial solution of the 
     pressing problem of frivolous lawsuits which raise the cost 
     of doing business and clog the nation's court systems.''
       The legislation would limit punitive damages and joint 
     liability for non-economic damages against small businesses 
     in any civil lawsuit. Under current law, punitive damage 
     verdicts are commonplace as a result of vague substantive 
     standards and unrestrained plaintiff's lawyers. Awards in 
     non-economic cases compensate plaintiffs for ``pain and 
     suffering'' or ``emotional distress,'' and are not calculated 
     on tangible economic loss. Multi-million dollar punitive 
     damage awards are now routinely sought and frequently imposed 
     in almost every type of civil case.
       ABC has long been supportive of lawsuit reforms. The 
     construction industry is particularly concerned about 
     frivolous cases brought before the National Labor Relations 
     Board as a result of ``salting'' abuses.
       ``ABC commends Sens. Abraham and Lieberman for introducing 
     common-sense legislation that, if passed, will discourage 
     costly and frivolous lawsuits against small business 
     owners.''

  Mr. McCONNELL. Mr. President, I rise today to join my esteemed 
colleagues in the introduction of the Small Business Liability Reform 
Act of 1999.
  Over the last 30 years, the American civil justice system has become 
inefficient, unpredictable and costly. Consequently, I have spent a 
great deal of my time in the United States Senate working to reform the 
legal system. I was particularly pleased to help lead in the efforts to 
pass the Volunteer Protection Act, which offers much-needed litigation 
protection for our country's battalion of volunteers. America's 
litigation crisis, however, goes well beyond our volunteers.
  Lawsuits and the mere threat of lawsuits impede invention and 
innovation, and the competitive position our nation has enjoyed in the 
world marketplace. The litigation craze has several perverse effects. 
For example, it discourages the production of more and better products, 
while encouraging the production of more and more attorneys. In the 
1950s, there was one lawyer for every 695 Americans. Today, in 
contrast, there is one lawyer for every 290 people. In fact, we have 
more lawyers per capita than any other western democracy.
  Mr. President, don't get me wrong--there is nothing inherently wrong 
with being a lawyer. I am proud to be a graduate of the University of 
Kentucky College of Law. My point, however, is simple: government and 
society should promote a world where its more desirable to create goods 
and services than it is to create lawsuits.
  The chilling effects of our country's litigation epidemic are felt 
throughout our national economy--especially by our small businesses. We 
must act to remove the litigation harness that constrains our nation's 
small businesses.
  Small businesses are vital to our nation's economy. My state provides 
a perfect example of the importance of small business. In Kentucky, 
more than 85% of our businesses are small businesses.
  The Small Business Lawsuit Abuse Protection Act is a narrowly-crafted 
bill which seeks to restore some rationality, certainty and civility to 
the legal system.
  First, Title I of this bill would offer limited relief to businesses 
or organizations that have fewer than 25 full-time employees. Title I 
seeks to provide some reasonable limits on punitive damages, which 
typically serve as a windfall to plaintiffs. It also provides that a 
business's responsibility for noneconomic losses would be in proportion 
to the business's responsibility for causing the harm.
  The other Title in the bill includes liability reforms for innocent 
product sellers--which are very often small businesses. These 
businesses are often dragged into product liability cases even though 
they did not produce, design or manufacture the product, and are not in 
any way to blame for the harm that the product is alleged to have 
caused. Title II would help protect product sellers from being 
subjected to frivolous lawsuits when they are not responsible for the 
alleged harm.
  Now, let me explain what this bill does not do. It does not close the 
courthouse door to plaintiffs who sue small businesses. For example, 
this bill does not limit a plaintiff's ability to sue a small business 
for an act of negligence, or any other act, for that manner. It also 
does not prevent a plaintiff from recovering from product sellers when 
those sellers are responsible for harm.
  Mr. President, this is a sensible, narrowly-tailored piece of 
legislation that is greatly needed to free up the enterprising spirit 
of our small businesses. I look forward to the Senate's consideration 
of this important legislation.

                          ____________________