[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Senate]
[Pages 1714-1793]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. SHELBY:
  S. 302. A bill to amend the Internal Revenue Code of 1986 to reduce 
the maximum capital gain tax rate for gains from property held for more 
than 5 or 10 years; to the Committee on Finance.
  Mr. SHELBY. Mr. President, I rise today to introduce legislation that 
would reduce the capital gains tax for properties held for more than 
five or ten years. Such legislation is needed to help increase 
investment and to decrease inefficient economic behavior.
  Under current law, people holding capital property are often 
discouraged from selling their property because of the large 
anticipated tax liability. Such a ``lock-in'' of assets is economically 
undesirable. Economists have estimated that perhaps as much as 7.5 
trillion dollars are ``locked-in'' the portfolios of American 
taxpayers. By reducing the tax on certain long term capital gains, we 
would decrease the ``lock-in'' effect and allow investors to liquidate 
or hold capital assets based on market factors rather than the tax 
code.
  Opponents to lower taxation of capital gains argue that reducing 
capital gains tax rates would result in a revenue shortfall. Such an 
argument fails to recognize the effect that reduced taxes will have on 
investment behavior. By lowering taxes on capital gains, we will 
encourage, rather than discourage, capital investment. I believe the 
resulting situation would be a rise in the number of investment 
transactions and in the amount of gain realized in each taxable year 
which will in turn lead to an increase in tax revenue. This trend has 
been well-documented as evidenced by the fact that every capital gains 
tax reduction in the last forty years has resulted in increased federal 
revenue. In addition to increasing federal revenue, a cut in the 
capital gain tax rates would benefit individual states, as a vast 
majority of them also tax capital gains.
  The current capital gains tax dissuades investment and economic 
growth. By lowering the capital gains tax rates, my bill would help 
lower the cost of capital and spur economic growth. I urge my 
colleagues to join me in support of the bill. 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. 302

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

     SECTION 1. REDUCTION IN MAXIMUM CAPITAL GAIN RATES FOR 5-YEAR 
                   AND 10-YEAR GAINS.

       (a) In General.--Paragraph (2) of section 1(h) of the 
     Internal Revenue Code of 1986 (relating to maximum capital 
     gains rate) is amended to read as follows:
       ``(2) Reduced capital gain rates for qualified 5-year and 
     10-year gain.--
       ``(A) Reduction in 10-percent rate.--In the case of any 
     taxable year beginning after December 31, 2001, the rate 
     under paragraph (1)(B) shall be--
       ``(i) 8 percent with respect to so much of the amount to 
     which the 10-percent rate would otherwise apply as does not 
     exceed qualified 5-year gain,
       ``(ii) 5 percent with respect to so much of the amount to 
     which the 10-percent rate would otherwise apply as does not 
     exceed qualified 10-year gain, and
       ``(iii) 10 percent with respect to the remainder of such 
     amount.
       ``(B) Reduction in 20-percent rate.--The rate under 
     paragraph (1)(C) shall be--
       ``(i) 10 percent with respect to so much of the amount to 
     which the 20-percent rate would otherwise apply as does not 
     exceed the lesser of--

       ``(I) the excess of qualified 5-year gain over the amount 
     of such gain taken into account under subparagraph (A) of 
     this paragraph, or
       ``(II) the amount of qualified 5-year gain (determined by 
     taking into account only property the holding period for 
     which begins after December 31, 2001),

       ``(ii) 5 percent with respect to so much of the amount to 
     which the 20-percent rate would otherwise apply as does not 
     exceed the lesser of--

       ``(I) the excess of qualified 10-year gain over the amount 
     of such gain taken into account under subparagraph (A) of 
     this paragraph, or
       ``(II) the amount of qualified 10-year gain (determined by 
     taking into account only property the holding period for 
     which begins after December 31, 2001), and

       ``(iii) 20 percent with respect to the remainder of such 
     amount.

     For purposes of determining under the preceding sentence 
     whether the holding period of property begins after December 
     31, 2001, the holding period of property acquired pursuant to 
     the exercise of an option (or other right or obligation to 
     acquire property) shall include the period such option (or 
     other right or obligation) was held.''.
       (b) Qualified 5-Year and 10-Year Gain.--Paragraph (9) of 
     section 1(h) of the Internal Revenue Code of 1986 is amended 
     to read as follows:
       ``(9) Qualified 5-year and 10-year gain.--For purposes of 
     this subsection--
       ``(A) Qualified 5-year gain.--The term `qualified 5-year 
     gain' means the aggregate long-term capital gain from 
     property held for more than 5 years but not more than 10 
     years.
       ``(B) Qualified 10-year gain.--The term `qualified 10-year 
     gain' means the aggregate long-term capital gain from 
     property held for more than 10 years.
       ``(C) Determination of gain.--The determination under 
     subparagraph (A) or (B) shall be made without regard to 
     collectibles gain, gain described in paragraph (7)(A)(i), and 
     section 1202 gain.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself, Mr. Bayh, Ms. Landrieu, Mrs. 
        Lincoln, Mr. Kohl, Mr. Graham, Mr. Breaux, Mr. Kerry, Mrs. 
        Feinstein, Mr. Carper, and Mr. Nelson of Florida):
  S. 303. 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.
  Mr. LIEBERMAN. Mr. President, I rise today to join with several of my 
colleagues in offering a comprehensive education reform proposal that I 
believe can serve as the foundation for building a bipartisan 
legislative consensus and ultimately a better future for our children. 
It is a common-sense strategy that we believe can be the basis for a 
common ground solution--reinvest in our public schools, reinvent the 
way we administer them, and restore a sense of responsibility to the 
children we are supposed to be serving. Hence the title of our bill: 
the Public Education Reinvention, Reinvestment, and Responsibility Act, 
or the Three R's for short.
  Our Senate New Democrat Coalition originally proposed this plan, 
which seeks to bring together the best ideas of both parties into a 
whole new approach to federal education policy, during the debate last 
year on the reauthorization of the Elementary and Secondary Education 
Act. We drew significant interest from Members on both sides of the 
aisle, as well as from a number of voices in the education reform 
community, but not enough to overcome the partisan tensions of an 
election year.
  We return to this cause now, at the start of this new session, with 
the same sense of urgency and a new sense of optimism. Our urgency is 
driven by the growing public concern about the state of public schools 
and the consequences of continued inactions. Our optimism is driven by 
the growing policy consensus about how we in Washington can help our 
public schools meet the new challenges of this new age and help every 
student learn at a high level.
  We feel strongly that we cannot afford to wait any longer to craft a 
serious national response to what is a serious national problem, not 
when millions of our children are being denied

[[Page 1715]]

the education they deserve and the New Economy demands. International 
math and science tests indicate that our students, even the best of the 
best, are struggling to keep pace with children in other nations. In 
fact, the most advanced American 12th-graders ranked 15 out of 16 on 
the advanced math test and 16th out of 16th on the physics test.
  Far more troubling, millions of poor children, particularly children 
of color, are failing to learn even the most basic of skills, which is 
to say we are failing them. Thirty five years after we passed the 
Elementary and Secondary Education Act (ESEA) specifically to aid 
disadvantaged students, black and Hispanic 12th graders are reading and 
doing math on average at the same level of white 8th-graders.
  This pernicious achievement gap cannot be allowed to persist in this 
land of opportunity. It is not only a matter of equity, but of 
economics as well. We simply cannot compete in a knowledge-based global 
marketplace if so much of our future labor force doesn't know how to 
read, write, and reason. As one report states, ``Students are being 
unconsciously eliminated from the candidate pool of Information 
Technology, IT, workers by the knowledge and attitudes they acquire in 
their K-12 years. Many students do not learn the basic skills of 
reasoning, mathematics, and communication that provide the foundation 
for higher education or entry-level jobs in IT work.''
  We also have to acknowledge that we have not done a very good job in 
recent years in providing every child with a well-qualified teacher, 
which goes a long way toward explaining why this achievement gap 
persists. Specifically, we are failing to deliver teachers to the 
classroom who truly know their subject matter. One national survey 
found that one-fourth of all secondary school teachers did not major in 
their core area of instruction. What is particularly troubling is that 
we are failing those children who need our help the most--in the school 
districts with the highest concentration of minorities, students have 
less than a 50 percent chance of getting a math or science teacher who 
has a license or a degree in their field.
  We are far from alone in feeling strongly about this problem, Mr. 
President, and we are encouraged by the bold and innovative reforms 
that many states and local districts are pursuing to raise standards 
and expectations and improve the quality of education our children are 
receiving. They are helping to show us what works and how we in 
Washington can help.
  This is not something we talk enough about, in large part because we 
do have some serious problems with our schools, but there are in fact 
plenty of positive developments to highlight in public education today. 
Over the past year, I have visited a broad range of schools and 
programs in Connecticut and around the country, and I can tell you that 
there is much happening in our public schools that we can be heartened 
by, proud of, and learn from.
  There is the exemplary Kennelly School in Hartford, Connecticut, 
which has to contend with a high-poverty, high-mobility student 
population, but through intervention programs has had real success 
improving the reading, writing and math skills of many of its students. 
In addition, there is the Side by Side Charter School in Norwalk, one 
of 17 charter schools in Connecticut, which has created an exemplary 
multiracial program in response to the challenge of Sheff v. O'Neill to 
diminish racial isolation. Side by Side is experimenting with a 
different approach to classroom assignments, having students stay with 
teachers for two consecutive years to take advantage of the 
relationships that develop, and by all indications it is working quite 
well for those kids.
  And there is the nationally-recognized BEST program, which, building 
on previous efforts in Connecticut to raise teacher skills and 
salaries, is now targeting additional state aid, training, and 
mentoring support to help local districts nurture new teachers and 
prepare them to excel. The result is that Connecticut's blueprint is 
touted by some, including the National Commission on Teaching and 
America's Future, as a national model for others to follow.
  A number of other states, led by Texas and North Carolina, are moving 
in this same direction--refocusing their education systems not on 
process but on performance, not on prescriptive rules and regulations 
but on results. More and more of them are in fact adopting a simple 
formula--investing in reform, and insisting on results. They are 
setting high standards, dedicating more resources to help schools meet 
those new demands, providing more flexibility to experiment with 
innovative practices, and holding schools responsible for improving 
their performance.
  We as New Democrats believe the best thing we can do to encourage and 
accelerate this movement, and spur every state to pursue these bold 
reforms, is to adapt this new approach to the federal level--which is 
to say, to lead by following. And that is just what our Three R's 
proposal aims to do. We want to redefine the federal role in education 
and refocus it on helping states and local districts raise academic 
achievement, putting the priority for federal programs on performance 
instead of process, and on delivering results instead of developing 
rules.
  In particular, our plan calls on states and local districts to enter 
into a new compact with the federal government to work together to 
strengthen standards and improve educational opportunities, 
particularly for America's poorest children. It would provide states 
and local educators with significantly more federal funding and 
significantly more flexibility in targeting those dollars to meet their 
specific needs. In exchange, it would demand real accountability, and 
for the first time impose consequences on schools that continually fail 
to show progress.
  Part of changing our focus means narrowing our focus. We agree with 
many critics of the status quo that the current maze of federal 
education programs is too unwieldy, too bureaucratic, and ultimately 
too diffuse. That is why we eliminate dozens of federally 
microtargeted, micromanaged programs that are redundant or incidental 
to our core mission of raising academic achievement. But we also 
believe that we have a great national interest in promoting broad 
national educational goals, chief among them delivering on the promise 
of equal opportunity. It is not only foolish but irresponsible to hand 
out federal dollars with no questions asked and no thought of national 
priorities. That is why we carve out separate titles in those areas 
that we think are critical to helping every child learn at a high 
level.
  The first of our restructured titles would strengthen our 
longstanding commitment to providing additional aid to disadvantaged 
children through the Title I program. It would increase funding by 50 
percent, up to $13 billion annually, and, perhaps more importantly, 
target those new funds to schools with the highest concentrations of 
poverty. The second would combine various teacher training and 
professional development programs into a single teacher quality grant, 
increase funding to $2 billion annually, and challenge each state to 
pursue the kind of bold, performance-based reforms that my own state of 
Connecticut has undertaken with great success.
  The third title would reform the Federal bilingual education program 
and hopefully defuse the ongoing controversy surrounding it by making 
absolutely clear that our national mission is to help immigrant 
children learn and master English and ultimately to meet the same high 
academic standards as other students. First, recognizing that many 
limited English proficient students are not being served at all today, 
we call for dramatically increasing our investment in English 
acquisition programs, doubling funding to $1 billion a year, which 
would for the first time be distributed to states and local districts 
through a reliable formula, based on their LEP student population. As a 
result, school districts serving large LEP and high poverty student 
populations would be guaranteed federal funding,

[[Page 1716]]

and would not be penalized because of their inability to hire savvy 
proposal writers for competitive grants.
  The fourth title would respond to the public demands for greater 
choice within the public school framework, by providing additional 
resources for charter school start-ups and new incentives for expanding 
local, intradistrict choice programs. And the fifth would radically 
restructure the remaining ESEA programs and provide local districts 
broad flexibility to address their specific needs. We consolidate more 
than 20 different programs into a single High Performance Initiatives 
title, with a focus on supporting and encouraging bold new ideas, 
expanding access to summer school and after school programs, improving 
school safety, and building technological literacy. We increase overall 
funding by more than $200 million to $3.5 billion, and distribute this 
aid through a formula that targets more resources to the highest 
poverty areas.
  The boldest change we are proposing is to create a new accountability 
title. As of today, we have plenty of rules and requirements on inputs, 
on how funding is to be allocated and who must be served, but little if 
any attention to outcomes, on how schools ultimately perform in 
educating children. This bill would reverse that imbalance by linking 
Federal funding to the progress states and local districts make in 
raising academic achievement. It would call on state and local leaders 
to set specific performance standards and adopt rigorous assessments 
for measuring how each district is faring in meeting those goals. In 
turn, states that exceed those goals would be rewarded with additional 
funds, and those that fail repeatedly to show progress would be 
sanctioned. In other words, for the first time, there would be 
consequences for poor performance.
  In considering how exactly to impose those consequences, we have run 
into understandable concerns about whether you can penalize failing 
schools without also penalizing children. The truth is that we are 
punishing many children right now, especially the most vulnerable of 
them, by forcing them to attend chronically troubled schools that are 
accountable to no one, a situation that is just not acceptable anymore. 
We believe there must be consequences for failure, but we make a 
concerted effort through this bill to minimize the potential negative 
impact on students. It requires states to set annual performance-based 
goals and put in place a monitoring system for gauging how local 
districts are progressing, and also provides additional resources for 
states to help school districts identify and improve low-performing 
schools. If after three years a state fails to meet its goals, the 
state would be penalized by cutting its administrative funding by 50 
percent. Only after four years of under performance would dollars 
targeted for the classroom be put in jeopardy. At that point, 
protecting kids by continuing to subsidize bad schools becomes more 
like punishing them.
  Although money alone won't improve the quality of our public 
education, we must invest significantly more resources if we expect to 
close the achievement gap and truly ``leave no child behind.'' That is 
why we would boost ESEA funding by $35 billion over the next 5 years. 
But we also believe that the impact of this funding will be severely 
diluted if it is not better targeted to the worst-performing schools 
and if it is not coupled with a rigorous and vigorous demand for 
accountability. That is why we narrow the Federal focus to a few select 
national priorities, all of them tied to raising student achievement, 
and match our investment in reform with an insistence on results.
  Judging by what President Bush has said to date, along with 
Congressional leaders, we believe that there is a lot of room for 
collaboration and a lot of reason to be hopeful that we can reach 
bipartisan agreement on a bold, progressive, comprehensive education 
reform bill this year. We still have some serious differences with the 
President--not just on vouchers, but on the targeting of federal 
dollars to the nation's poorest communities, which is critical to our 
hopes of closing the achievement gap. But we do share a commitment to 
closing that gap as a national goal, just as we share a commitment to 
strengthening accountability, broadening flexibility for local schools, 
spurring innovation, and promoting public school choice. And as some of 
our colleagues have noted, the framework of our plan shares much in 
common with the reform blueprint President Bush recently unveiled.
  Our bottom line is principles, not programs. We believe we have some 
good new ideas to realize some great old ideals, chief among them the 
promise of equal opportunity. But we don't pretend to have a monopoly 
on them and we are eager to work with both our fellow Democrats and 
Republicans to find the right balance. There is no one roadmap to 
reform. But we believe the third way we have charted with our Three R's 
plan is a good place to start--and hopefully end.
  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. 303

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Declaration of priorities.

                      TITLE I--STUDENT PERFORMANCE

Sec. 101. Heading.
Sec. 102. Findings, policy, and purpose.
Sec. 103. Authorization of appropriations.
Sec. 104. Reservation for school improvement.

  Subtitle A--Improving Basic Programs Operated by Local Educational 
                                Agencies

Sec. 111. State plans.
Sec. 112. Local educational agency plans.
Sec. 113. Schoolwide programs.
Sec. 114. School choice.
Sec. 115. Assessment and local educational agency and school 
              improvement.
Sec. 116. State assistance for school support and improvement.
Sec. 117. Parental involvement.
Sec. 118. Qualifications for teachers and paraprofessionals.
Sec. 119. Professional development.
Sec. 120. Fiscal requirements.
Sec. 121. Coordination requirements.
Sec. 122. Limitations on funds.
Sec. 123. Grants for the outlying areas and the Secretary of the 
              Interior.
Sec. 124. Amounts for grants.
Sec. 125. Basic grants to local educational agencies.
Sec. 126. Concentration grants.
Sec. 127. Targeted grants.
Sec. 128. Education finance incentive program.
Sec. 129. Special allocation procedures.

            Subtitle B--Even Start Family Literacy Programs

Sec. 131. Program authorized.
Sec. 132. Applications.
Sec. 133. Research.

              Subtitle C--Education of Migratory Children

Sec. 141. Comprehensive needs assessment and service-delivery plan; 
              authorized activities.

Subtitle D--Prevention and Intervention Programs for Children and Youth 
       who are Neglected, Delinquent, or at Risk of Dropping Out

Sec. 151. State plan and State agency applications.
Sec. 152. Use of funds.

    Subtitle E--Federal Evaluations, Demonstrations, and Transition 
                                Projects

Sec. 161. Evaluations.
Sec. 162. Demonstrations of innovative practices.

           Subtitle F--Rural Education Development Initiative

Sec. 171. Rural education development initiative.

                     Subtitle G--General Provisions

Sec. 181. State administration.
Sec. 182. Definitions.

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

Sec. 201. Teacher and principal quality, professional development, and 
              class size.

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

Sec. 301. Language minority students.

[[Page 1717]]

Sec. 302. Emergency immigrant education program.
Sec. 303. Indian, Native Hawaiian, and Alaska Native education.

                     TITLE IV--PUBLIC SCHOOL CHOICE

Sec. 401. Public school choice.
Sec. 402. Development of public school choice programs; report cards.

                          TITLE V--IMPACT AID

Sec. 501. Payments relating to Federal acquisition of real property.
Sec. 502. Repeal of special rule relating to the computation of 
              payments for eligible federally connected children.
Sec. 503. Extension of authorization of appropriations.
Sec. 504. Repeals, transfers, and redesignations.

      TITLE VI--HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES

Sec. 601. High performance and quality education initiatives.

                       TITLE VII--ACCOUNTABILITY

Sec. 701. Accountability.

               TITLE VIII--GENERAL PROVISIONS AND REPEALS

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

     SEC. 2. REFERENCES.

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

     SEC. 3. DECLARATION OF PRIORITIES.

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

                      TITLE I--STUDENT PERFORMANCE

     SEC. 101. HEADING.

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

                   ``TITLE I--STUDENT PERFORMANCE''.

     SEC. 102. FINDINGS, POLICY, AND PURPOSE.

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

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

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

     SEC. 103. AUTHORIZATION OF APPROPRIATIONS.

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

     ``SEC. 1002. AUTHORIZATION OF APPROPRIATIONS.

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

     SEC. 104. RESERVATION FOR SCHOOL IMPROVEMENT.

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

     ``SEC. 1003. RESERVATION FOR SCHOOL IMPROVEMENT.

       ``(a) State Reservations.--Each State educational agency 
     shall reserve 2.5 percent of the amount the State educational 
     agency receives under part A for fiscal years 2002 and 2003, 
     and 3.5 percent of that amount for fiscal years 2004 through 
     2006, to carry out subsection (b) and to carry out the State 
     educational agency's responsibilities under sections 1116 and 
     1117, including carrying out the State educational agency's 
     statewide system of technical assistance and support for 
     local educational agencies.
       ``(b) Uses.--Of the amount reserved under subsection (a) 
     for any fiscal year, the State educational agency shall make 
     available at least 80 percent of such amount directly to 
     local educational agencies for school improvement and 
     corrective action.''.

[[Page 1718]]



  Subtitle A--Improving Basic Programs Operated by Local Educational 
                                Agencies

     SEC. 111. STATE PLANS.

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

     ``SEC. 1111. STATE PLANS.

       ``(a) Plans Required.--
       ``(1) In general.--Any State educational agency desiring a 
     grant under this part shall submit to the Secretary a plan 
     that--
       ``(A) is developed in consultation with local educational 
     agencies, teachers, pupil services personnel, administrators 
     (including administrators of programs described in other 
     parts of this title), local school boards, other staff, 
     parents, and other entities in the community involved such as 
     institutions of higher education;
       ``(B) satisfies the requirements of this section; and
       ``(C) coordinates activities with other programs carried 
     out under this Act, the Individuals with Disabilities 
     Education Act, the Carl D. Perkins Vocational and Technical 
     Education Act of 1998, and the Head Start Act.
       ``(2) Consolidated plan.--A State plan submitted under 
     paragraph (1) may be submitted as part of a consolidated plan 
     under section 8302.
       ``(b) Standards, Assessments, and Accountability.--
       ``(1) Challenging standards.--
       ``(A) In general.--Each State plan shall demonstrate that 
     the State has adopted challenging content standards and 
     challenging student performance standards that will be used 
     by the State, and the local educational agencies, and 
     elementary schools and secondary schools, within the State to 
     carry out this part.
       ``(B) Uniformity.--The standards required by subparagraph 
     (A) shall be the same as the standards that the State applies 
     to all elementary schools and secondary schools within the 
     State and all students attending such schools.
       ``(C) Subjects.--The State shall have such standards for 
     elementary school and secondary school students served under 
     this part in academic subjects determined by the State, but 
     including at least mathematics, science, and English language 
     arts. The standards shall include the same specifications 
     concerning knowledge, skills, and levels of performance for 
     all students.
       ``(D) Standards.--Standards adopted under this paragraph 
     shall include--
       ``(i) challenging content standards in academic subjects 
     that--

       ``(I) specify what students are expected to know and be 
     able to do;
       ``(II) contain coherent and rigorous content; and
       ``(III) encourage the teaching of advanced skills; and

       ``(ii) challenging student performance standards that--

       ``(I) are aligned with the State's content standards;
       ``(II) describe 2 levels of high performance, proficient 
     and advanced levels of performance, that determine how well 
     students are mastering the material in the State content 
     standards; and
       ``(III) describe a third level of performance, a basic 
     level of performance, to provide complete information about 
     the progress of the lower performing students toward meeting 
     the proficient and advanced levels of performance.

       ``(E) Additional subjects.--For the academic subjects for 
     which students will receive services under this part, but for 
     which a State is not required under subparagraphs (A), (B), 
     and (C) to develop, and has not otherwise developed, 
     challenging content and student performance standards, the 
     State plan shall describe a strategy for ensuring that 
     economically disadvantaged students acquire the same 
     knowledge, are taught the same skills, and are held to the 
     same expectations as are all students.
       ``(F) Special rule.--In the case of a State that allows 
     local educational agencies to adopt more rigorous standards 
     than the standards set by the State, local educational 
     agencies shall be allowed to implement such rigorous 
     standards.
       ``(2) Adequate yearly progress.--
       ``(A) In general.--Each State plan shall demonstrate what 
     constitutes adequate yearly progress (based on assessments 
     described in paragraph (4)) of--
       ``(i) any school that receives assistance under this part 
     toward enabling all students to meet the State's challenging 
     student performance standards;
       ``(ii) any local educational agency that receives 
     assistance under this part toward enabling all students in 
     schools served by the local educational agency and receiving 
     assistance under this part to meet the State's challenging 
     student performance standards; and
       ``(iii) the State toward enabling all students in schools 
     in the State and receiving assistance under this part to meet 
     the State's challenging student performance standards.
       ``(B) Definition.--The adequate yearly progress shall be 
     defined by the State in a manner that--
       ``(i) applies the same high standards of academic 
     performance to all students in the State;
       ``(ii) takes into account the progress of all students in 
     the State and served by each local educational agency and 
     school served under section 1114 or 1115;
       ``(iii) uses the State challenging content and challenging 
     student performance standards and assessments described in 
     paragraphs (1) and (4);
       ``(iv) compares separately, for each State, local 
     educational agency, and school, the performance and progress 
     of students, disaggregated by each major ethnic and racial 
     group, by gender, by English proficiency status, and by 
     classification as economically disadvantaged students as 
     compared to students who are not economically disadvantaged 
     (except that such disaggregation shall not be required in a 
     case in which the number of students in a category is 
     insufficient to yield statistically reliable information or 
     the results would reveal individually identifiable 
     information about an individual student);
       ``(v) compares the proportions of students at the basic, 
     proficient, and advanced levels of performance in a grade in 
     a school year with the proportions of students at each of the 
     3 performance levels in the same grade in the previous school 
     year;
       ``(vi) endeavors to include other academic measures such as 
     promotion, attendance, drop-out rates, completion of college 
     preparatory courses, college admission tests taken, and 
     secondary school completion, except that failure to meet 
     another academic measure, other than student performance on 
     State assessments aligned with State standards, shall not 
     provide the sole basis for designating a local educational 
     agency or school for improvement;
       ``(vii) includes annual numerical objectives for improving 
     the performance of all groups described in clause (iv) and 
     narrowing gaps in achievement between those groups in, at 
     least, the areas of mathematics and English language arts; 
     and
       ``(viii) includes a timeline for ensuring that each group 
     of students described in clause (iv) meets or exceeds the 
     State's proficient level of performance on each State 
     assessment described in paragraph (4) not later than 10 years 
     after the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act.
       ``(C) Accountability.--Each State plan shall demonstrate 
     that the State has developed and is implementing a statewide 
     State accountability system that has been or will be 
     effective in ensuring that all local educational agencies, 
     elementary schools, and secondary schools are making adequate 
     yearly progress as defined under section 1111(b)(2). Each 
     State accountability system shall--
       ``(i) be based on the standards and assessments adopted 
     under paragraphs (1) and (4) and take into account the 
     performance of all students required by law to be included in 
     such assessments;
       ``(ii) be the same as the accountability system the State 
     uses for all schools or all local educational agencies in the 
     State, if the State has an accountability system for all the 
     schools or all the local educational agencies;
       ``(iii) provide for the identification of schools or local 
     educational agencies receiving funds under this part that for 
     3 consecutive years have exceeded such schools' or agencies' 
     adequate yearly progress goals so that information about the 
     practices and strategies of such schools or agencies can be 
     disseminated to other schools served by the local educational 
     agency and other schools in the State and the schools and 
     agencies that have exceeded the goals can be considered for 
     rewards provided under title VII;
       ``(iv) provide for the identification of schools and local 
     educational agencies for improvement, as required by section 
     1116, and for the provision of technical assistance, 
     professional development, and other capacity-building as 
     needed, including those measures specified in sections 
     1116(d)(9) and 1117, to ensure that schools and local 
     educational agencies so identified have the resources, 
     skills, and knowledge needed to carry out their obligations 
     under sections 1114 and 1115 and to meet the requirements for 
     adequate yearly progress described in this paragraph; and
       ``(v) provide for the identification of schools and local 
     educational agencies for corrective action as required by 
     section 1116, and for the implementation of corrective action 
     against schools and local educational agencies in cases in 
     which such actions are required under such section.
       ``(D) Annual improvement for states.--
       ``(i) 90 percent requirement.--Each State plan shall 
     specify that, for a State to make adequate yearly progress 
     under subparagraph (A)(iii), not less than 90 percent of the 
     local educational agencies within the State shall meet the 
     State's criteria for adequate yearly progress.
       ``(ii) Modification.--If the application of the 90 percent 
     requirement described in clause (i) would require a 
     fractional number of local educational agencies to meet the 
     criteria, the Secretary shall issue an order modifying the 
     requirement, to the minimum extent necessary, and shall 
     require a substantial number of the agencies to meet the 
     criteria.
       ``(E) Annual improvement for local educational agencies.--

[[Page 1719]]

       ``(i) 90 percent requirement.--Each State plan shall 
     specify that, for a local educational agency to make adequate 
     yearly progress under subparagraph (A)(ii), not less than 90 
     percent of the schools served by the local educational agency 
     shall meet the State's criteria for adequate yearly progress.
       ``(ii) Modification.--If the application of the 90 percent 
     requirement described in clause (i) would require a 
     fractional number of schools to meet the criteria, the 
     Secretary shall issue an order modifying the requirement, to 
     the minimum extent necessary, and shall require a substantial 
     number of the schools to meet the criteria.
       ``(F) Annual improvement for schools.--Each State plan 
     shall specify that, for an elementary school or a secondary 
     school to make adequate yearly progress under subparagraph 
     (A)(i), not less than 90 percent of each group of students 
     described in subparagraph (B)(iv) who are enrolled in such 
     school shall take the assessments described in paragraph (4) 
     and in section 612(a)(17)(A) of the Individuals with 
     Disabilities Education Act.
       ``(G) Public notice and comment.--
       ``(i) In general.--Each State shall submit information in 
     the State plan demonstrating that the State, in developing 
     such plan--

       ``(I) diligently sought public comment from a range of 
     institutions and individuals in the State with an interest in 
     improved student performance; and
       ``(II) made and will continue to make a substantial effort 
     to ensure that information regarding content standards, 
     performance standards, assessments, and the State 
     accountability system is widely known and understood by the 
     public, parents, teachers, and school administrators 
     throughout the State.

       ``(ii) Effort.--The effort described in clause (i)(II), at 
     a minimum, shall include annual publication of such 
     information and explanatory text to the public through such 
     means as the Internet, the media, and public agencies. 
     Languages other than English shall be used to communicate the 
     information and text to parents in appropriate cases.
       ``(3) State authority.--If a State educational agency 
     provides evidence that is satisfactory to the Secretary that 
     neither the State educational agency nor any other State 
     government official, agency, or entity has sufficient 
     authority under State law to adopt content and student 
     performance standards, and assessments aligned with such 
     standards, that will be applicable to all students enrolled 
     in the State's public schools, the State educational agency 
     may meet the requirements of this subsection by stating in 
     the State plan that the State is--
       ``(A) adopting content and student performance standards 
     and assessments that meet the requirements of this 
     subsection, on a statewide basis, and limiting the 
     applicability of such standards and assessments to students 
     served under this part; or
       ``(B) adopting and implementing policies that ensure that 
     each local educational agency within the State that receives 
     assistance under this part will adopt content and student 
     performance standards and assessments--
       ``(i) that are aligned with the standards described in 
     subparagraph (A); and
       ``(ii) that meet the criteria in this subsection and any 
     regulations regarding such standards and assessments that the 
     Secretary may publish and that are applicable to all students 
     served by each such local educational agency.
       ``(4) Assessments.--Each State plan shall demonstrate that 
     the State has implemented a set of high quality, yearly 
     student assessments that includes, at a minimum, assessments 
     in mathematics, science, and English language arts, that will 
     be used, starting not later than the 2002-2003 school year as 
     the primary means of determining the yearly performance of 
     each local educational agency and school served by the State 
     under this title in enabling all students to meet the State's 
     challenging content and student performance standards. Such 
     assessments shall--
       ``(A) be the same as the assessments used to measure the 
     performance of all students, if the State has assessments 
     that measure the performance of all students;
       ``(B) be aligned with the State's challenging content and 
     student performance standards, and provide coherent 
     information about the local educational agency's contribution 
     to the student attainment of such standards;
       ``(C) be used only for purposes for which such assessments 
     are valid and reliable, and be consistent with relevant, 
     nationally recognized professional and technical standards 
     for such assessments;
       ``(D) measure the performance of students against the 
     challenging State content and student performance standards, 
     and be administered not less than once during--
       ``(i) grades 3 through 5;
       ``(ii) grades 6 through 9; and
       ``(iii) grades 10 through 12;
       ``(E) include multiple, up-to-date measures of student 
     performance and the local educational agency's contribution 
     to student performance, including measures that assess higher 
     order thinking skills and understanding;
       ``(F) provide for--
       ``(i) the participation in such assessments of all 
     students;
       ``(ii) the reasonable adaptations and accommodations for 
     children with disabilities, as such term is defined in 
     section 602(3) of the Individuals with Disabilities Education 
     Act, that are necessary to measure the performance of such 
     students relative to State content and student performance 
     standards;
       ``(iii) in the case of a student with limited English 
     proficiency, the assessment of such student in the student's 
     native language if such a native language assessment is more 
     likely than an English language assessment to yield accurate 
     and reliable information on what that student knows and is 
     able to do; and
       ``(iv) notwithstanding clause (iii), the assessment (using 
     tests written in English) of English language arts of any 
     student who has attended school in the United States (not 
     including the Commonwealth of Puerto Rico) for 3 or more 
     consecutive school years, except that if the local 
     educational agency determines, on a case-by-case individual 
     basis, that assessments in another language and form would 
     likely yield more accurate and reliable information on what 
     such students know and can do, the local educational agency 
     may assess such students in the appropriate language other 
     than English for 1 additional consecutive year beyond the 
     third consecutive year;
       ``(G) include students who have attended schools served by 
     a local educational agency for a full academic year but have 
     not attended a single school for a full academic year, except 
     that the performance of students who have attended more than 
     1 school served by the local educational agency in any 
     academic year shall be used only in determining the progress 
     of the local educational agency;
       ``(H) provide individual student reports to be submitted to 
     parents, including reports containing assessment scores or 
     other information on the attainment of student performance 
     standards;
       ``(I) enable results to be disaggregated within each State, 
     local educational agency, and school by each major racial and 
     ethnic group, by gender, by English proficiency status, and 
     by classification as economically disadvantaged students as 
     compared to students who are not economically disadvantaged; 
     and
       ``(J) to the extent practicable, use rigorous criteria.
       ``(5) First grade literacy assessment.--In addition to 
     implementing the assessments described in paragraph (4), each 
     State receiving funds under this part shall describe in the 
     State plan what reasonable steps the State is taking to 
     assist and encourage local educational agencies--
       ``(A) to measure literacy skills of first graders in 
     schools receiving funds under this part by providing 
     assessments of first graders that are--
       ``(i) developmentally appropriate;
       ``(ii) aligned with State content and student performance 
     standards; and
       ``(iii) tied to scientifically based research; and
       ``(B) to assist and encourage local educational agencies 
     receiving funds under this part in identifying and taking 
     developmentally appropriate and effective interventions in 
     any school served under this part in which a substantial 
     number of first graders have not demonstrated grade-level 
     literacy proficiency by the end of the school year.
       ``(6) Language assessments.--Each State plan shall identify 
     the languages other than English and Spanish that are present 
     in the participating student populations in the State, and 
     indicate the languages for which yearly student assessments 
     are not available and are needed. The State may request 
     assistance from the Secretary in identifying assessment 
     measures in the needed languages. Upon request, the Secretary 
     shall assist with the identification of appropriate 
     assessment measures in the needed languages, but shall not 
     mandate a specific assessment or mode of instruction.
       ``(7) Development and implementation.--Each State plan 
     shall provide that the State shall develop and implement, at 
     a minimum, the assessments described in paragraph (4) in 
     mathematics and English language arts by the 2002-2003 school 
     year.
       ``(8) Requirement.--Each State plan shall describe--
       ``(A) how the State educational agency will assist each 
     local educational agency and school affected by the State 
     plan to develop the capacity to comply with each of the 
     requirements of sections 1114(b), 1115(c), and 1116 that are 
     applicable to such agency or school;
       ``(B) how the State educational agency will--
       ``(i) hold each local educational agency affected by the 
     State plan accountable for improved student performance, 
     including describing a procedure for--

       ``(I) identifying local educational agencies and schools 
     for improvement; and
       ``(II) assisting local educational agencies and schools 
     identified as described in subclause (I) to address 
     performance problems, including providing thorough 
     descriptions of--

       ``(aa) the amounts and types of professional development to 
     be provided to instructional staff; and

[[Page 1720]]

       ``(bb) the amount of any financial assistance to be 
     provided by the State under section 1003, and the amount of 
     any funds to be provided through other sources and the 
     activities to be provided with those funds; and
       ``(ii) implement corrective action if the assistance is not 
     effective;
       ``(C) how the State educational agency is providing 
     additional academic instruction, such as before- and after-
     school programs and summer academic programs, to low-
     performing students;
       ``(D) such other factors as the State considers to be 
     appropriate to provide students with an opportunity to attain 
     the knowledge and skills described in the State's challenging 
     content standards;
       ``(E) the specific steps that the State educational agency 
     will take or the specific strategies that the State 
     educational agency will use to ensure that--
       ``(i) all teachers in the State, in schoolwide programs and 
     targeted assistance programs, are fully qualified not later 
     than December 31, 2006; and
       ``(ii) economically disadvantaged students and minority 
     students are not taught at higher rates than other students 
     by inexperienced, uncertified or unlicensed, or out-of-field 
     teachers; and
       ``(F) the measures that the State educational agency will 
     use to evaluate and publicly report the State's progress in 
     improving the quality of instruction in the schools served by 
     the State educational agency and local educational agencies 
     receiving funding under this Act.
       ``(c) Other Provisions To Support Teaching and Learning.--
     Each State plan shall contain assurances that--
       ``(1) the State educational agency will work with other 
     agencies, including educational service agencies, or local 
     consortia and institutions to provide technical assistance to 
     local educational agencies, elementary schools, and secondary 
     schools to carry out the State educational agency's 
     responsibilities under this part, including providing 
     technical assistance concerning providing professional 
     development under section 1119A and technical assistance 
     under section 1117;
       ``(2)(A) where educational service agencies exist, the 
     State educational agency will consider providing professional 
     development and technical assistance through such agencies; 
     and
       ``(B) where educational service agencies do not exist, the 
     State educational agency will consider providing professional 
     development and technical assistance through other 
     cooperative arrangements, such as through a consortium of 
     local educational agencies;
       ``(3) the State educational agency will use the 
     disaggregated results of the student assessments required 
     under subsection (b)(4), and other measures or indicators 
     available to the State, to review annually the progress of 
     each local educational agency and school served under this 
     part in the State to determine whether each such agency and 
     school is making the annual progress necessary to ensure that 
     all students will meet the State's proficient level of 
     performance on the State assessments described in subsection 
     (b)(4) within 10 years after the date of enactment of the 
     Public Education Reinvestment, Reinvention, and 
     Responsibility Act;
       ``(4) the State educational agency will provide the least 
     restrictive and burdensome regulations for local educational 
     agencies and individual elementary schools and secondary 
     schools participating in a program assisted under this part;
       ``(5) the State educational agency will regularly inform 
     the Secretary and the public in the State of any Federal laws 
     that hinder the ability of States to hold local educational 
     agencies and schools accountable for student academic 
     performance, and how the laws hinder that ability;
       ``(6) the State educational agency will encourage 
     elementary schools and secondary schools to consolidate funds 
     from other Federal, State, and local sources for schoolwide 
     reform in schoolwide programs under section 1114;
       ``(7) the State educational agency will modify or eliminate 
     State fiscal and accounting barriers so that elementary 
     schools and secondary schools can easily consolidate funds 
     from other Federal, State, and local sources for schoolwide 
     reform in schoolwide programs under section 1114;
       ``(8) the State educational agency has involved the 
     committee of practitioners established under section 1703(b) 
     in developing the State plan and will involve the committee 
     in monitoring the implementation of the State plan; and
       ``(9) the State educational agency will inform local 
     educational agencies of the local educational agencies' 
     authority to obtain waivers under title VIII and, if the 
     State is an Ed-Flex Partnership State, waivers under the 
     Education Flexibility Partnership Act of 1999.
       ``(d) Review.--
       ``(1) Peer review and secretarial approval.--The Secretary 
     shall--
       ``(A) establish a peer review process to assist in the 
     review of State plans;
       ``(B) only approve a State plan meeting each of the 
     requirements of this section;
       ``(C) if the Secretary determines that the State plan does 
     not meet each of the requirements of subsections (a), (b), 
     and (c), immediately notify the State of such determination 
     and the reasons for such determination;
       ``(D) not disapprove a State plan before--
       ``(i) notifying the State educational agency in writing of 
     the specific deficiencies of the State plan;
       ``(ii) offering the State an opportunity to revise the 
     State plan;
       ``(iii) providing technical assistance in order to assist 
     the State to meet the requirements of subsections (a), (b), 
     and (c); and
       ``(iv) providing a hearing;
       ``(E) have the authority to disapprove a State plan for not 
     meeting the requirements of this section, but shall not have 
     the authority to require a State, as a condition of approval 
     of the State plan, to include in, or delete from, such plan 1 
     or more specific elements of the challenging State content 
     standards or to use specific assessment instruments or items; 
     and
       ``(F) if the Secretary disapproves a State plan that is--
       ``(i) the first State plan submitted by a State after the 
     date of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act, require the State to 
     submit a revised State plan that meets the requirements of 
     this section to the Secretary for approval not later than 1 
     year after the date of disapproval; and
       ``(ii) the second or a subsequent State plan submitted by a 
     State after the date of enactment, require the State to 
     submit such a revised State plan to the Secretary for 
     approval not later than 30 days after the date of 
     disapproval.
       ``(2) Review.--The Secretary shall review information from 
     the State on the adequate yearly progress of schools and 
     local educational agencies within the State required under 
     subsection (b)(2) for the purpose of determining State and 
     local compliance with section 1116.
       ``(e) Duration of the Plan.--
       ``(1) In general.--Each State plan shall--
       ``(A) remain in effect for the duration of the State's 
     participation under this part; and
       ``(B) be periodically reviewed and revised by the State, as 
     necessary, to reflect changes in the State's strategies and 
     programs under this part.
       ``(2) Additional information.--If the State makes 
     significant changes in the State plan, such as the adoption 
     of new challenging State content standards and State student 
     performance standards, new assessments, or a new definition 
     of adequate yearly progress, the State shall submit 
     information on such significant changes to the Secretary.
       ``(f) Limitation on Conditions.--Nothing in this part shall 
     be construed to authorize an officer or employee of the 
     Federal Government to mandate, direct, or control a State's, 
     local educational agency's, or elementary school's or 
     secondary school's specific challenging content or student 
     performance standards, assessments, curricula, or program of 
     instruction, as a condition of eligibility to receive funds 
     under this part.
       ``(g) Penalties.--
       ``(1) In general.--If a State fails to meet the statutory 
     deadlines for demonstrating that the State has in place 
     challenging content standards and student performance 
     standards (including deadlines for standards required under 
     section 1111(b)(6), as in effect on the day before the date 
     of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act), assessments, and a 
     statewide State accountability system for holding schools and 
     local educational agencies accountable for making adequate 
     yearly progress (including adequate yearly progress with each 
     group of students specified in subsection (b)(2)(B)(iv)), for 
     the fiscal year after the failure, the State shall be 
     ineligible to receive a greater amount of administrative 
     funds under section 1703(c) than the amount the State 
     received for the previous year for the purposes described in 
     section 1703(c).
       ``(2) Additional funds.--Based on the extent to which the 
     standards, assessments, and system described in paragraph (1) 
     are not in place, the Secretary shall withhold from the 
     State, in addition to any amount withheld under paragraph 
     (1), additional administrative funds under section 1703(c). 
     The Secretary shall withhold such additional funds as the 
     Secretary determines to be appropriate, except that if the 
     State fails to meet the deadlines for a second or subsequent 
     fiscal year, the Secretary shall withhold, for the fiscal 
     year after the failure, not less than \1/5\ of the amount of 
     administrative funds the State received under section 1703(c) 
     during the first year in which the State failed to meet the 
     deadlines.
       ``(3) Waiver.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     notwithstanding part D of title VIII, the Education 
     Flexibility Partnership Act of 1999, or any other provision 
     of law, the Secretary may not grant a waiver of the 
     requirements of this section, except that a State may request 
     a 1-time, 1-year waiver to meet the requirements of this 
     section.
       ``(B) Exception.--A waiver granted pursuant to subparagraph 
     (A) shall not apply to the requirements described under 
     subsection (h).
       ``(h) Special Rule on Science Standards and Assessments.--
     Notwithstanding subsection (b) and part D of title IV, no 
     State

[[Page 1721]]

     shall be required to meet the requirements under this title 
     relating to science standards or assessments until the 
     beginning of the 2006-2007 school year.''.

     SEC. 112. LOCAL EDUCATIONAL AGENCY PLANS.

       (a) Subgrants.--Section 1112(a)(1) (20 U.S.C. 6312(a)(1)) 
     is amended by striking ``the Goals 2000: Educate America 
     Act,'' and all that follows and inserting ``the Individuals 
     with Disabilities Education Act, the Carl D. Perkins 
     Vocational and Technical Education Act of 1998, the Head 
     Start Act, and other Acts, as appropriate.''.
       (b) Plan Provisions.--Section 1112(b) (20 U.S.C. 6312(b)) 
     is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``Each'' and inserting ``In order to help low-performing 
     students meet high standards, each'';
       (2) in paragraph (1)--
       (A) by striking ``part'' each place it appears and 
     inserting ``title''; and
       (B) in subparagraph (B), by striking ``children'' and 
     inserting ``low-performing students'';
       (3) in paragraph (4)--
       (A) in subparagraph (A)--
       (i) by striking ``elementary school programs,'' and 
     inserting ``programs, and''; and
       (ii) by striking ``, and school-to-work transition 
     programs''; and
       (B) in subparagraph (B), by striking ``under part C'' the 
     first place it appears and all that follows through 
     ``dropping out'' and inserting ``under part C, neglected or 
     delinquent youth'';
       (4) in paragraph (7), by striking ``eligible'';
       (5) in paragraph (9), by striking the period and inserting 
     a semicolon; and
       (6) by adding at the end the following new paragraphs:
       ``(10) a description of the actions the local educational 
     agency will take to assist the low-performing schools served 
     by the local educational agency, including schools identified 
     under section 1116 for school improvement;
       ``(11) a description of how the local educational agency 
     will promote the use of alternative instructional methods, 
     and extended learning time options, such as an extended 
     school year, before- and after-school programs, and summer 
     programs; and
       ``(12) a description of--
       ``(A) the steps the local educational agency will take to 
     ensure that all teachers in schoolwide programs and targeted 
     assistance programs assisted under this part are fully 
     qualified not later than December 31, 2006;
       ``(B) the strategies the local educational agency will use 
     to ensure that economically disadvantaged students and 
     minority students are not taught at higher rates than other 
     students by inexperienced, uncertified or unlicensed, or out-
     of-field teachers; and
       ``(C) the measures the agency will use to evaluate and 
     publicly report progress in improving the quality of 
     instruction in schools served by the local educational agency 
     and receiving funding under this Act.''.
       (c) Assurances.--Section 1112(c) (20 U.S.C. 6312(c)) is 
     amended to read as follows:
       ``(c) Assurances.--
       ``(1) In general.--Each local educational agency plan shall 
     provide assurances that the local educational agency will--
       ``(A) reserve not less than 10 percent of the funds the 
     agency receives under this part for high quality professional 
     development, as described in section 1119A, for professional 
     instructional staff;
       ``(B) provide eligible schools and parents with information 
     regarding schoolwide program authority and the ability of 
     such schools to consolidate funds from Federal, State, and 
     local sources;
       ``(C) provide technical assistance and support to schools 
     participating in schoolwide programs;
       ``(D) work in consultation with schools as the schools 
     develop school plans pursuant to section 1114(b)(2), and 
     assist schools in implementing such plans or undertaking 
     activities pursuant to section 1115(c), so that each school 
     can make adequate yearly progress toward meeting the 
     challenging State student performance standards;
       ``(E) use the disaggregated results of the student 
     assessments required under section 1111(b)(4), and other 
     measures or indicators available to the agency, to review 
     annually the progress of each school served by the agency and 
     receiving funds under this title to determine whether or not 
     all of the schools are making the annual progress necessary 
     to ensure that all students will meet the State's proficient 
     level of performance on the State assessments described in 
     section 1111(b)(4) within 10 years after the date of 
     enactment of the Public Education Reinvestment, Reinvention, 
     and Responsibility Act;
       ``(F) set, and hold schools served by the local educational 
     agency accountable for meeting, annual numerical goals for 
     improving the performance of all groups of students based on 
     the performance standards set by the State under section 
     1111(b)(1)(D)(ii);
       ``(G) fulfill the local educational agency's school 
     improvement responsibilities under section 1116, including 
     taking corrective actions under section 1116(c)(10);
       ``(H) provide the State educational agency with--
       ``(i) an annual, up-to-date, and accurate list of all 
     schools served by the local educational agency that are 
     identified for school improvement and corrective action;
       ``(ii) the reasons why each school described in clause (i) 
     was identified for school improvement or corrective action; 
     and
       ``(iii) specific plans for improving student performance in 
     each of the schools described in clause (i), including 
     specific numerical performance goals for each school, for the 
     2 school years after the school is identified for school 
     improvement, for each group of students specified in section 
     1111(b)(2)(B)(iv) enrolled in the school;
       ``(I) provide services to eligible students attending 
     private elementary schools and secondary schools in 
     accordance with section 1120, and provide timely and 
     meaningful consultation with private school officials 
     regarding such services;
       ``(J) take into account the experience gained from model 
     programs for the educationally disadvantaged and the findings 
     of relevant scientifically based research when developing 
     technical assistance plans for, and delivering technical 
     assistance to, schools served by the local educational agency 
     that are receiving funds under this part and are in school 
     improvement or corrective action status;
       ``(K) in the case of a local educational agency that 
     chooses to use funds under this part to provide early 
     childhood development services to economically disadvantaged 
     children below the age of compulsory school attendance, 
     ensure that such services meet the performance standards 
     established under subparagraphs (A) and (B) of section 
     641A(a)(1) of the Head Start Act;
       ``(L) comply with the requirements of section 1119 
     regarding the qualifications of teachers and 
     paraprofessionals;
       ``(M) inform eligible schools served by the local 
     educational agency of the agency's authority to obtain 
     waivers on such schools' behalf under title VIII and, if the 
     State is an Ed-Flex Partnership State, under the Education 
     Flexibility Partnership Act of 1999; and
       ``(N) coordinate activities and collaborate, to the extent 
     feasible and necessary as determined by the local educational 
     agency, with other agencies providing services to children, 
     youth, and their families.
       ``(2) Model programs; scientifically based research.--For 
     purposes of enabling local educational agencies to implement 
     paragraph (1)(J)--
       ``(A) the Secretary shall consult with the Secretary of 
     Health and Human Services on the implementation of such 
     paragraph, and shall establish procedures (taking into 
     consideration State and local laws and local teacher 
     contracts) to assist local educational agencies to comply 
     with such paragraph;
       ``(B) the Secretary shall disseminate to local educational 
     agencies the performance standards issued under subparagraphs 
     (A) and (B) of section 641A(a)(1) of the Head Start Act, on 
     the publication of such standards; and
       ``(C) local educational agencies affected by such paragraph 
     (1)(J) shall plan for the implementation of such paragraph 
     (taking into consideration State and local laws and local 
     teacher contracts), including pursuing the availability of 
     other Federal, State, and local funding to assist in 
     compliance with such paragraph.
       ``(3) Inapplicability.--The provisions of this subsection 
     shall not apply to preschool programs using an Even Start 
     model or to Even Start programs.''.
       (d) Plan Development and Duration.--Section 1112(d) (20 
     U.S.C. 6312(d)) is amended to read as follows:
       ``(d) Plan Development and Duration.--
       ``(1) Consultation.--Each local educational agency plan 
     shall be developed in consultation with teachers, principals, 
     local school boards, administrators (including administrators 
     of programs described in other parts of this title), other 
     appropriate school personnel, and parents of students in 
     elementary schools and secondary schools served under this 
     part.
       ``(2) Duration.--Each plan described in paragraph (1) shall 
     remain in effect for the duration of the local educational 
     agency's participation under this part.
       ``(3) Review.--Each local educational agency shall 
     periodically review and, as necessary, revise the agency's 
     plan.''.
       (e) State Approval.--Section 1112(e) (20 U.S.C. 6312(e)) is 
     amended to read as follows:
       ``(e) Peer Review and State Approval.--
       ``(1) In general.--Each local educational agency plan shall 
     be filed according to a schedule established by the State 
     educational agency.
       ``(2) Approval.--The State educational agency shall 
     establish a peer review process to assist in the review of 
     local educational agency plans. The State educational agency 
     shall approve a local educational agency plan only if the 
     State educational agency determines that the local 
     educational agency plan--
       ``(A) will enable elementary schools and secondary schools 
     served by the local educational agency and under this part to 
     help all groups of students specified in section 
     1111(b)(2)(B)(iv) to meet the State's proficient level of 
     performance on the State assessments described in section 
     1111(b)(4) within 10 years after the date of enactment of the 
     Public Education Reinvestment, Reinvention, and 
     Responsibility Act; and

[[Page 1722]]

       ``(B) meets each of the requirements of this section.
       ``(3) State review.--Each State educational agency shall at 
     least annually review each local educational agency plan 
     approved by the State educational agency under this 
     subsection, including comparing the objectives of the plan 
     against the results of the disaggregated assessments required 
     under section 1111(b)(4). The State educational agency shall 
     conduct the review to ensure that the progress of all 
     students in schools served by a local educational agency in 
     the State under this part is adequate to ensure that all 
     students in the State will meet the State's proficient level 
     of performance on the State assessments described in section 
     1111(b)(4) within 10 years after the date of enactment of the 
     Public Education Reinvestment, Reinvention, and 
     Responsibility Act.
       ``(4) Public review.--Each State educational agency will 
     make publicly available each such local educational agency 
     plan.''.
       (f) Parental Notification for English Language 
     Instruction.--Section 1112 (20 U.S.C. 6312) is amended by 
     adding at the end the following:
       ``(g) Parental Notification for English Language 
     Instruction.--
       ``(1) Notification.--If a local educational agency uses 
     funds under this part to provide English language instruction 
     to limited English proficient students, the local educational 
     agency shall notify the parents of a student participating in 
     an English language instruction educational program under 
     this part of--
       ``(A) the reasons for the identification of the student as 
     being in need of English language instruction;
       ``(B) the student's level of English proficiency, how such 
     level was assessed, and the status of the student's academic 
     performance;
       ``(C) how the English language instruction educational 
     program will specifically help the student learn English and 
     meet age-appropriate standards for grade promotion and 
     graduation;
       ``(D) the specific exit requirements of the English 
     language instruction educational program;
       ``(E) the expected rate of graduation from the English 
     language instruction educational program into mainstream 
     classes; and
       ``(F) the expected rate of graduation from secondary school 
     of participants in the English language instruction 
     educational program, if funds under this part are used for 
     students in secondary schools.
       ``(2) Parental rights.--
       ``(A) In general.--The parents of a student participating 
     in an English language instruction educational program under 
     this part shall--
       ``(i) have the option of selecting among methods of 
     instruction, if more than 1 method is offered for the 
     program; and
       ``(ii) have the right to have their child immediately 
     removed from the program on their request.
       ``(B) Receipt of information.--The parents of a student 
     identified for participation in an English language 
     instruction educational program under this part shall 
     receive, in a manner and form understandable to the parents, 
     the information required by paragraph (1) and this paragraph. 
     At a minimum, the parents shall receive--
       ``(i) timely information about English language instruction 
     educational programs for limited English proficient students 
     assisted under this part; and
       ``(ii) if the parents of a participating student so desire, 
     notice of opportunities for regular meetings of parents of 
     limited English proficient students participating in English 
     language instruction educational programs under this part for 
     the purpose of formulating and responding to recommendations 
     from such parents.
       ``(3) Basis for admission or exclusion.--No student shall 
     be admitted to or excluded from any federally assisted 
     education program solely on the basis of a surname or 
     language minority status.''.

     SEC. 113. SCHOOLWIDE PROGRAMS.

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

     SEC. 114. SCHOOL CHOICE.

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

     ``SEC. 1115A. SCHOOL CHOICE.

       ``(a) Choice Programs.--A local educational agency may use 
     funds under this part, in combination with State, local, and 
     private funds, to develop and implement public school choice 
     programs, for students eligible for assistance under this 
     part, that permit parents to select the public school that 
     their child will attend and are consistent with State and 
     local law, policy, and practice related to public school 
     choice and local pupil transfer.
       ``(b) Choice Plan.--A local educational agency that chooses 
     to implement a public school choice program under this 
     section shall first develop a plan that--
       ``(1) contains an assurance that all eligible students, 
     across grade levels, who are served under this part will have 
     equal access to the program;
       ``(2) contains an assurance that the program does not 
     include elementary schools or secondary schools that follow a 
     racially discriminatory policy in providing services to 
     students;
       ``(3) describes how elementary schools or secondary schools 
     will use resources under this part, and from other sources, 
     to implement the plan;
       ``(4) contains an assurance that the plan has been 
     developed with the involvement of parents and others in the 
     community to be served, and individuals who will carry out 
     the plan, including administrators, teachers, principals, and 
     other staff;
       ``(5) contains an assurance that parents of eligible 
     students served by the local educational agency will be given 
     prompt notice of the existence of the public school choice 
     program, and the program's availability to such parents, and 
     a clear explanation of how the program will operate;
       ``(6) contains an assurance that the public school choice 
     program--
       ``(A) will include charter schools (as defined in section 
     4210) and any other public elementary school or secondary 
     school served by the local educational agency; and
       ``(B) will not include as a school receiving transfers 
     under the program an elementary school or a secondary school 
     that the local educational agency determines--
       ``(i) is in school improvement or corrective action status;
       ``(ii) has been in school improvement or corrective action 
     status during the 2 academic years before the determination; 
     or
       ``(iii) is at risk of being identified for school 
     improvement or corrective action during the academic year 
     after the determination;
       ``(7) contains an assurance that transportation services or 
     the costs of transportation to and from a public school to 
     which a student transfers under the public school choice 
     program--
       ``(A) may be provided by the local educational agency with 
     funds under this part and funds from other sources; and
       ``(B) shall not be provided using more than 10 percent of 
     the funds made available under this part to the local 
     educational agency; and
       ``(8) contains an assurance that such local educational 
     agency will comply with the other requirements of this 
     part.''.

     SEC. 115. ASSESSMENT AND LOCAL EDUCATIONAL AGENCY AND SCHOOL 
                   IMPROVEMENT.

       (a) Local Review.--Section 1116(a) (20 U.S.C. 6317(a)) is 
     amended--
       (1) in paragraph (2), by striking ``1111(b)(2)(A)(i)'' and 
     inserting ``1111(b)(2)'';
       (2) in paragraph (3)--
       (A) by striking ``individual school performance profiles'' 
     and inserting ``school report cards'';
       (B) by striking ``1111(b)(3)(I)'' and inserting 
     ``1111(b)(4)(I)''; and
       (C) by striking ``and'' after the semicolon;
       (3) in paragraph (4), by striking the period and inserting 
     ``; and''; and
       (4) by adding at the end the following:

[[Page 1723]]

       ``(5) review the effectiveness of the actions and 
     activities the schools are carrying out under this part with 
     respect to parental involvement.''.
       (b) School Improvement.--Section 1116(c) (20 U.S.C. 
     6317(c)) is amended to read as follows:
       ``(c) School Improvement.--
       ``(1) In general.--A local educational agency shall 
     identify for school improvement any elementary school or 
     secondary school served under this part that--
       ``(A) for 2 consecutive years failed to make adequate 
     yearly progress as defined in the State's plan under section 
     1111(b)(2); or
       ``(B) was in school improvement status under this section 
     on the day before the date of enactment of the Public 
     Education Reinvestment, Reinvention, and Responsibility Act.
       ``(2) Transition.--The 2-year period described in paragraph 
     (1)(A) shall include any continuous period of time 
     immediately before the date of enactment of the Public 
     Education Reinvestment, Reinvention, and Responsibility Act 
     during which an elementary school or a secondary school did 
     not make adequate yearly progress as defined in the State's 
     plan, as such plan was in effect on the day before the date 
     of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act.
       ``(3) Targeted assistance schools.--To determine if an 
     elementary school or a secondary school that is conducting a 
     targeted assistance program under section 1115 should be 
     identified for school improvement under this subsection, a 
     local educational agency may choose to review the progress of 
     only the students in such school who are served, or are 
     eligible for services, under this part.
       ``(4) Opportunity to review and present evidence.--(A) 
     Before identifying an elementary school or a secondary school 
     for school improvement under paragraph (1), the local 
     educational agency shall provide the school with an 
     opportunity to review the school level data, including 
     assessment data, on which the proposed identification is 
     based.
       ``(B) If the principal of a school proposed for 
     identification for school improvement believes that the 
     proposed identification is in error for statistical or other 
     substantive reasons, the principal may provide supporting 
     evidence to the local educational agency, which shall 
     consider such evidence before making a final determination.
       ``(5) Time limits.--Not later than 30 days after a local 
     educational agency makes an initial determination concerning 
     identifying a school served by the agency and receiving 
     assistance under this part for school improvement, the local 
     educational agency shall make public a final determination on 
     the status of the school.
       ``(6) Notification to parents.--A local educational agency 
     shall, in an easily understandable format, and in the 3 
     languages, other than English, spoken by the greatest number 
     of individuals in the area served by the local educational 
     agency, provide in writing to parents of each student in an 
     elementary school or a secondary school identified for school 
     improvement--
       ``(A) an explanation of what the school improvement 
     identification means, and how the school identified for 
     school improvement compares in terms of academic performance 
     to other elementary schools or secondary schools served by 
     the local educational agency and the State educational agency 
     involved;
       ``(B) the reasons for such identification;
       ``(C) a description of the data on which such 
     identification was based;
       ``(D) an explanation of what the school identified for 
     school improvement is doing to address the problem of low 
     performance;
       ``(E) an explanation of what the local educational agency 
     or State educational agency is doing to help the school 
     address the performance problem, including an explanation of 
     the amounts and types of professional development being 
     provided to the instructional staff in such school, the 
     amount of any financial assistance being provided by the 
     State educational agency under section 1003, and the 
     activities that are being provided with such financial 
     assistance;
       ``(F) an explanation of how parents described in this 
     paragraph can become involved in addressing the academic 
     issues that caused the school to be identified for school 
     improvement; and
       ``(G) an explanation of the right of parents, pursuant to 
     paragraph (7), to transfer their child to a higher performing 
     public school, including a public charter school or magnet 
     school, that is not in school improvement status, and how 
     such transfer will be carried out.
       ``(7) Public school choice option.--(A)(i) In the case of a 
     school identified for school improvement on or before the 
     date of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act, a local educational 
     agency shall, not later than 18 months after such date of 
     enactment, provide all students enrolled in the school an 
     option to transfer (consistent with State and local law, 
     policy, and practices related to public school choice and 
     local pupil transfer) to any higher performing public school, 
     including a public charter or magnet school, that--
       ``(I) is not in school improvement or corrective action 
     status;
       ``(II) has not been in school improvement or corrective 
     action status at any time during the 2 academic years before 
     the identification; and
       ``(III) is not at risk of being identified for school 
     improvement or corrective action during the academic year 
     after the identification.
       ``(ii) In the case of a school identified for school 
     improvement after the date of enactment of the Public 
     Education Reinvestment, Reinvention, and Responsibility Act, 
     the local educational agency involved shall, not later than 
     12 months after the date on which the local educational 
     agency identifies the school for school improvement, provide 
     all students enrolled in the school with the transfer option 
     described in clause (i).
       ``(B) If all public schools served by the local educational 
     agency to which a student may transfer under clause (i) are 
     identified for school improvement or corrective action, or, 
     if public schools in the agency's jurisdiction that are not 
     in school improvement or corrective action status cannot 
     accommodate all of the students who are eligible to transfer 
     because of capacity constraints, or State or local law, 
     policy, and practices related to public school choice and 
     local pupil transfer, the local educational agency shall, to 
     the extent practicable, establish a cooperative agreement 
     with other local educational agencies that serve areas in 
     proximity to the area served by the local educational agency. 
     The cooperative agreement shall enable a student to transfer 
     (consistent with State and local law, policy, and practices 
     related to public school choice and local pupil transfer) to 
     a school served by such other local educational agencies that 
     meets the requirements described in subparagraph (A)(i).
       ``(C) A local educational agency that serves a school that 
     has been identified for corrective action shall provide 
     transportation services or pay for the costs of 
     transportation for students who transfer to a different 
     school pursuant to this paragraph. Not more than 10 percent 
     of the funds allocated to a local educational agency under 
     this part may be used to provide such transportation services 
     or pay for the costs of such transportation.
       ``(D) Once a school is no longer identified for school 
     improvement, the local educational agency shall continue to 
     provide the transfer option described in subparagraph (A)(i) 
     to students in such school for a period of not less than 2 
     years.
       ``(8) School plan.--(A) Each school identified under 
     paragraph (1) for school improvement shall, not later than 3 
     months after being so identified, develop or revise a school 
     plan, in consultation with parents, school staff, the local 
     educational agency serving the school, the local school 
     board, and other outside experts, for approval by such local 
     educational agency. The school plan shall--
       ``(i) incorporate scientifically based research strategies 
     that strengthen the core academic subjects in the school and 
     address the specific academic issues that caused the school 
     to be identified for school improvement;
       ``(ii) adopt policies and practices concerning the school's 
     core academic subjects that have the greatest likelihood of 
     ensuring that all groups of students specified in section 
     1111(b)(2)(B)(iv) and enrolled in the school will meet the 
     State's proficient level of performance on the State 
     assessment described in section 1111(b)(4) within 10 years 
     after the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act;
       ``(iii) provide an assurance that the school will reserve 
     not less than 10 percent of the funds made available to the 
     school under this part for each fiscal year that the school 
     is in school improvement status, for the purpose of providing 
     to the school's teachers and principal high quality 
     professional development that--
       ``(I) directly addresses the academic performance problem 
     that caused the school to be identified for school 
     improvement; and
       ``(II) meets the requirements for professional development 
     activities under section 1119A;
       ``(iv) specify how the funds described in clause (iii) will 
     be used to remove the school from school improvement status;
       ``(v) establish specific annual, numerical progress goals 
     for each group of students specified in section 
     1111(b)(2)(B)(iv) and enrolled in the school that will ensure 
     that all such groups of students will meet the State's 
     proficient level of performance on the State assessment 
     described in section 1111(b)(4) within 10 years after the 
     date of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act;
       ``(vi) identify how the school will provide written 
     notification about the identification to parents of each 
     student enrolled in such school, in a format and, to the 
     extent practicable, in a language such parents can 
     understand; and
       ``(vii) specify the responsibilities of the school, the 
     local educational agency, and the State educational agency 
     serving such school under the plan.
       ``(B) The local educational agency described in 
     subparagraph (A)(vii) may condition approval of a school plan 
     on inclusion of 1 or more of the corrective actions specified 
     in paragraph (10)(D).
       ``(C) A school shall implement the school plan (including a 
     revised plan) expeditiously,

[[Page 1724]]

     but not later than the beginning of the school year following 
     the school year in which the school was identified for school 
     improvement.
       ``(D) The local educational agency described in 
     subparagraph (A)(vii) shall establish a peer review process 
     to assist with review of a school plan prepared by a school 
     served by the local educational agency, promptly review the 
     school plan, work with the school as necessary, and approve 
     the school plan if the school plan meets the requirements of 
     this paragraph.
       ``(9) Technical assistance.--(A) For each school identified 
     for school improvement under paragraph (1), the local 
     educational agency serving the school shall provide technical 
     assistance as the school develops and implements the school 
     plan.
       ``(B) Such technical assistance--
       ``(i) shall include assistance in analyzing data from the 
     assessments required under section 1111(b)(4), and other 
     samples of student work, to identify and address 
     instructional problems and solutions;
       ``(ii) shall include assistance in identifying and 
     implementing instructional strategies and methods that are 
     tied to scientifically based research and that have proven 
     effective in addressing the specific instructional issues 
     that caused the school to be identified for school 
     improvement;
       ``(iii) shall include assistance in analyzing and revising 
     the school's budget so that the school resources are more 
     effectively allocated for the activities most likely to 
     increase student performance and to remove the school from 
     school improvement status; and
       ``(iv) may be provided--
       ``(I) by the local educational agency, through mechanisms 
     authorized under section 1117; or
       ``(II) with the local educational agency's approval, by the 
     State educational agency, an institution of higher education 
     (in full compliance with all the reporting provisions of 
     title II of the Higher Education Act of 1965), a private not-
     for-profit organization or for-profit organization, an 
     educational service agency, the recipient of a Federal 
     contract or cooperative agreement as described under section 
     7104(a)(3), or another entity with experience in helping 
     schools improve performance.
       ``(C) Technical assistance provided under this section by a 
     local educational agency or an entity approved by such agency 
     shall be based on scientifically based research.
       ``(10) Corrective action.--(A) In this paragraph, the term 
     `corrective action' means action, consistent with State and 
     local law, that--
       ``(i) substantially and directly responds to--
       ``(I) the consistent academic failure of a school that 
     caused the local educational agency to take such action; and
       ``(II) any underlying staffing, curriculum, or other 
     problem in the school; and
       ``(ii) is designed to increase substantially the likelihood 
     that students enrolled in the school identified for 
     corrective action will perform at the State's proficient and 
     advanced levels of performance on the State assessment 
     described in section 1111(b)(4).
       ``(B) In order to help students served under this part meet 
     challenging State standards, each local educational agency 
     shall implement a system of corrective action in accordance 
     with subparagraphs (C) through (H).
       ``(C) After providing technical assistance under paragraph 
     (9) and subject to subparagraph (G), the local educational 
     agency--
       ``(i) may identify for corrective action and take 
     corrective action at any time with respect to a school that 
     is served by the local educational agency and that has been 
     identified under paragraph (1);
       ``(ii) shall identify for corrective action and take 
     corrective action with respect to any school served by the 
     local educational agency that fails to make adequate yearly 
     progress, as defined by the State under section 1111(b)(2), 
     at the end of the second year after the school year in which 
     the school was identified under paragraph (1); and
       ``(iii) shall continue to provide technical assistance 
     while instituting any corrective action under clause (i) or 
     (ii).
       ``(D) In the case of a school described in subparagraph 
     (C)(ii), the local educational agency shall take corrective 
     action by--
       ``(i)(I) withholding funds from the school;
       ``(II) making alternative governance arrangements, 
     including reopening the school as a public charter school;
       ``(III) reconstituting the relevant school staff; or
       ``(IV) instituting and fully implementing a new curriculum, 
     including providing appropriate professional development for 
     all relevant staff, that is tied to scientifically based 
     research and offers substantial promise of improving 
     educational performance for low-performing students; and
       ``(ii)(I) authorizing students to transfer (consistent with 
     the requirements of paragraph (7)) to higher performing 
     public schools served by the local educational agency, 
     including public charter and magnet schools; and
       ``(II) providing to such students transportation services, 
     or paying for the cost of transportation, to such schools 
     (except that the funds used by the local educational agency 
     to provide the transportation services or pay for the cost of 
     transportation shall not exceed 10 percent of the amount 
     allocated to the local educational agency under this part.
       ``(E) A local educational agency may delay, for a period 
     not to exceed 1 year, implementation of corrective action 
     only if the school's failure to make adequate yearly progress 
     was justified due to exceptional or uncontrollable 
     circumstances, such as a natural disaster or a precipitous 
     and unforeseen decline in the financial resources of the 
     local educational agency or school.
       ``(F) The local educational agency shall publish and 
     disseminate information regarding any corrective action the 
     local educational agency takes under this paragraph at a 
     school--
       ``(i) to the public and to the parents of each student 
     enrolled in the school subject to corrective action;
       ``(ii) in a format and, to the extent practicable, in a 
     language that the parents can understand; and
       ``(iii) through such means as the Internet, the media, and 
     public agencies.
       ``(G)(i) Before identifying a elementary school or a 
     secondary school corrective action under this paragraph, the 
     local educational agency shall provide the school with an 
     opportunity to review the school level data, including 
     assessment data, on which the proposed identification is 
     based.
       ``(ii) If the principal of the school believes that the 
     proposed determination is in error for statistical or other 
     substantive reasons, the principal may provide supporting 
     evidence to the local educational agency, which shall 
     consider such evidence before making a final determination.
       ``(H) Not later than 30 days after a local educational 
     agency makes an initial determination concerning identifying 
     a school served by the agency and receiving assistance under 
     this part, the local educational agency shall make public a 
     final determination on the status of the school.
       ``(11) State educational agency responsibilities.--If a 
     State educational agency determines that a local educational 
     agency failed to carry out the agency's responsibilities 
     under this section, or determines that, after 1 year of 
     implementation of corrective action, such action has not 
     resulted in sufficient progress in increased student 
     performance, the State educational agency shall take such 
     action as the agency finds necessary, including designating a 
     course of corrective action described in paragraph (10)(D), 
     consistent with this section, to improve the affected schools 
     and to ensure that the local educational agency carries out 
     the local educational agency's responsibilities under this 
     section.
       ``(12) Special rules.--Schools that, for at least 2 of the 
     3 years following identification under paragraph (1), make 
     adequate yearly progress toward meeting the State's 
     proficient and advanced levels of performance on the State 
     assessment described in section 1111(b)(4) shall no longer be 
     identified for school improvement.''.
       (c) State Review and Local Educational Agency 
     Improvement.--Section 1116(d) (20 U.S.C. 6317(d)) is amended 
     to read as follows:
       ``(d) State Review and Local Educational Agency 
     Improvement.--
       ``(1) In general.--A State educational agency shall 
     annually review the progress of each local educational agency 
     within the State receiving funds under this part to determine 
     whether schools served by such agencies and receiving 
     assistance under this part are making adequate yearly 
     progress, as defined under section 1111(b)(2), toward meeting 
     the State's student performance standards and to determine 
     whether each local educational agency is carrying out its 
     responsibilities under sections 1116 and 1117.
       ``(2) Identification of local educational agency for 
     improvement.--A State educational agency shall identify for 
     improvement any local educational agency that--
       ``(A) for 2 consecutive years failed to make adequate 
     yearly progress as defined in the State's plan under section 
     1111(b)(2); or
       ``(B) was in improvement status under this section on the 
     day before the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act.
       ``(3) Transition.--The 2-year period described in paragraph 
     (2)(A) shall include any continuous period of time 
     immediately before the date of enactment of the Public 
     Education Reinvestment, Reinvention, and Responsibility Act 
     during which a local educational agency did not make adequate 
     yearly progress as defined in the State's plan, as such plan 
     was in effect on the day before the date of enactment of the 
     Public Education Reinvestment, Reinvention, and 
     Responsibility Act.
       ``(4) Targeted assistance schools.--To determine if a local 
     educational agency that serves elementary schools or 
     secondary schools that are conducting targeted assistance 
     programs under section 1115 should be identified for 
     improvement under this subsection, a State educational agency 
     may choose to review the progress of only the students in 
     such schools who are served, or who are eligible for 
     services, under this part.
       ``(5) Opportunity to review and present evidence.--(A) 
     Before identifying a local educational agency for improvement 
     under paragraph (2), a State educational agency

[[Page 1725]]

     shall provide the local educational agency with an 
     opportunity to review the local educational agency data, 
     including assessment data, on which the proposed 
     identification is based.
       ``(B) If the local educational agency believes that the 
     proposed identification is in error for statistical or other 
     substantive reasons, the local educational agency may provide 
     supporting evidence to the State educational agency, which 
     shall consider such evidence before making a final 
     determination.
       ``(6) Time limits.--Not later than 45 days after the State 
     educational agency makes an initial determination concerning 
     identifying a local educational agency within the State and 
     receiving assistance under this part for improvement, the 
     State educational agency shall make public a final 
     determination on the status of the local educational agency.
       ``(7) Notification to parents.--The State educational 
     agency shall promptly notify parents of each student enrolled 
     in a school served by a local educational agency identified 
     for improvement, in a format, and to the extent practicable, 
     in a language the parents can understand, of--
       ``(A) the reasons for such identification; and
       ``(B) how the parents can participate in upgrading the 
     quality of the local educational agency.
       ``(8) Local educational agency plan.--(A) Each local 
     educational agency identified under paragraph (2) shall, not 
     later than 3 months after being so identified, develop or 
     revise a local educational agency plan, in consultation with 
     parents, teachers and other school staff, the local school 
     board, and others, for approval by the State educational 
     agency. Such plan shall--
       ``(i) incorporate scientifically based research strategies 
     that strengthen the core academic subjects in schools served 
     by the local educational agency;
       ``(ii) identify specific annual numerical academic 
     performance objectives in at least the areas of mathematics 
     and English language arts that the local educational agency 
     will meet, with such objectives being calculated in a manner 
     so that their achievement will ensure that each group of 
     students enrolled in each school served by the local 
     educational agency will meet the State's proficient level of 
     performance on the State assessment described in section 
     1111(b)(4) within 10 years after the date of enactment of the 
     Public Education Reinvestment, Reinvention, and 
     Responsibility Act; and
       ``(iii) provide an assurance that the local educational 
     agency will--
       ``(I) reserve not less than 10 percent of the funds made 
     available to the local educational agency under this part for 
     each fiscal year that the agency is in improvement status for 
     the purpose of providing to teachers and principals at 
     schools served by the agency and receiving funds under this 
     part high quality professional development that--

       ``(aa) directly addresses the academic performance problem 
     that caused the local educational agency to be identified for 
     improvement; and
       ``(bb) meets the requirements for professional development 
     activities under section 1119A; and

       ``(II) specify how the funds described in subclause (I) 
     will be used to remove the local educational agency from 
     improvement status;
       ``(iv) identify how the local educational agency will 
     provide written notification about the identification to 
     parents described in paragraph (7) in a format and, to the 
     extent practicable, in a language, that such parents can 
     understand, pursuant to paragraph (7);
       ``(v) specify the responsibilities of the local educational 
     agency and the State educational agency under the plan; and
       ``(vi) include a review of the local educational agency 
     budget to ensure that resources are allocated for the 
     activities that are most likely to improve student 
     performance and to remove the agency from improvement status.
       ``(B) The local educational agency shall implement the 
     local educational agency plan (including a revised plan) 
     expeditiously, but not later than the beginning of the school 
     year following the school year in which the agency was 
     identified for improvement.
       ``(C) The State educational agency shall establish a peer 
     review process to assist with review of the local educational 
     agency plan, promptly review the plan, work with the local 
     educational agency as necessary, and approve the plan if the 
     plan meets the requirements of this paragraph.
       ``(D) If the local educational agency budget, in allocating 
     resources to activities, fails to allocate resources as 
     described in subparagraph (A)(vi), the State educational 
     agency may direct the local educational agency to reallocate 
     resources to more effective activities.
       ``(9) State educational agency responsibility.--For each 
     local educational agency identified under paragraph (2), the 
     State educational agency shall provide technical or other 
     assistance, if requested, as authorized under section 1117, 
     to better enable the local educational agency--
       ``(A) to develop and implement a local educational agency 
     plan (including a revised plan) that is approved by the State 
     educational agency consistent with the requirements of this 
     section; and
       ``(B) to work with schools served by the local educational 
     agency that are identified for school improvement.
       ``(10) Technical assistance.--The technical assistance 
     provided by the State educational agency--
       ``(A) shall include assistance in analyzing data from the 
     assessments required under section 1111(b)(4) and other 
     samples of student work, to identify and address 
     instructional problems and solutions;
       ``(B) shall include assistance in identifying and 
     implementing instructional strategies and methods that are 
     tied to scientifically based research and that have proven 
     effective in addressing the specific instructional issues 
     that caused the local educational agency to be identified for 
     improvement;
       ``(C) shall include assistance in analyzing and revising 
     the local educational agency's budget so that the agency's 
     resources are more effectively allocated for the activities 
     most likely to increase student performance and to remove the 
     agency from improvement status; and
       ``(D) may be provided by--
       ``(i) the State educational agency; or
       ``(ii) with the local educational agency's approval, by an 
     institution of higher education (in full compliance with all 
     the reporting provisions of title II of the Higher Education 
     Act of 1965), a private not-for-profit organization or for-
     profit organization, an educational service agency, the 
     recipient of a Federal contract or cooperative agreement as 
     described under section 7104(a)(3), or another entity with 
     experience in helping schools improve performance.
       ``(11) Resources reallocation.--The State educational 
     agency may, as a condition of providing the local educational 
     agency with technical assistance and financial support in 
     developing and carrying out a local educational agency plan, 
     require that the local educational agency reallocate 
     resources from ineffective or inefficient activities to 
     activities that, through scientifically based research, have 
     been proven to have the greatest impact on increasing student 
     performance and closing the achievement gap between groups of 
     students.
       ``(12) Corrective action.--(A) In this paragraph, the term 
     `corrective action' means action, consistent with State law, 
     that--
       ``(i) substantially and directly responds to--
       ``(I) the consistent academic failure of schools served by 
     a local educational agency that caused the State educational 
     agency to take such action with respect to the local 
     educational agency; and
       ``(II) any underlying staffing, curriculum, or other 
     problem in the schools served by the local educational 
     agency; and
       ``(ii) is designed to increase substantially the likelihood 
     that students enrolled in the schools served by the local 
     educational agency identified for corrective action will 
     perform at the State's proficient and advanced levels of 
     performance on the State assessment described in section 
     1111(b)(4).
       ``(B) In order to help students served under this part meet 
     challenging State standards, each State educational agency 
     shall implement a system of corrective action in accordance 
     with subparagraphs (C) through (H).
       ``(C) After providing technical assistance, if requested, 
     under paragraphs (9) and (10), and subject to subparagraph 
     (E), the State educational agency--
       ``(i) shall identify for corrective action and take 
     corrective action with respect to any local educational 
     agency that fails to make adequate yearly progress, as 
     defined by the State under section 1111(b)(2), at the end of 
     the second year after the school year in which the local 
     educational agency was identified under paragraph (2); and
       ``(ii) shall continue to provide technical assistance while 
     instituting any corrective action under clause (i).
       ``(D) In the case of a local educational agency described 
     in subparagraph (C)(ii), the State educational agency shall 
     take corrective action by--
       ``(i)(I) withholding funds from the local educational 
     agency;
       ``(II) reconstituting the relevant local educational agency 
     personnel;
       ``(III) removing particular schools from the jurisdiction 
     of the local educational agency, and establishing alternative 
     arrangements for public governance and supervision of such 
     schools;
       ``(IV) appointing a receiver or trustee to administer the 
     affairs of the local educational agency in place of the local 
     educational agency's superintendent and school board; or
       ``(V) abolishing or restructuring the local educational 
     agency; and
       ``(ii)(I) authorizing students to transfer (consistent with 
     the requirements of section 1116(c)(7)) from schools served 
     by the local educational agency to higher performing public 
     schools, including public charter and magnet schools, served 
     by another local educational agency; and
       ``(II) providing to such students transportation services, 
     or paying for the cost of transportation, to such higher 
     performing schools (except that the funds used by the local 
     educational agency to provide the

[[Page 1726]]

     transportation services or pay for the cost of transportation 
     shall not exceed 10 percent of the amount allocated to the 
     local educational agency under this part.
       ``(E) The State educational agency may delay, for a period 
     not to exceed 1 year, implementation of corrective action 
     only if the local educational agency's failure to make 
     adequate yearly progress was justified due to exceptional or 
     uncontrollable circumstances, such as a natural disaster or a 
     precipitous and unforeseen decline in the financial resources 
     of the local educational agency or schools served by the 
     local educational agency.
       ``(F) The State educational agency shall publish and 
     disseminate information regarding any corrective action the 
     State educational agency takes under this paragraph--
       ``(i) to the public and to the parents described in 
     paragraph (7) and the public;
       ``(ii) in a format and, to the extent practicable, in a 
     language that the parents can understand; and
       ``(iii) through such means as the Internet, the media, and 
     public agencies.
       ``(G) Prior to determining whether to take a corrective 
     action with respect to a local educational agency under this 
     paragraph, the State educational agency shall provide the 
     local educational agency with notice and a opportunity for a 
     hearing, if State law provides for such notice and 
     opportunity.
       ``(H) Not later than 45 days after the State educational 
     agency makes an initial determination regarding taking a 
     corrective action concerning a local educational agency in 
     the State and receiving assistance under this part, the State 
     educational agency shall make public a final determination on 
     the status of the local educational agency.''.
       (d) Definition.--Section 1116 (20 U.S.C. 6317) is amended 
     by adding at the end the following:
       ``(f) Definition.--In this section, the term `charter 
     school' has the meaning given the term in section 4210.''.

     SEC. 116. STATE ASSISTANCE FOR SCHOOL SUPPORT AND 
                   IMPROVEMENT.

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

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

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

     SEC. 117. PARENTAL INVOLVEMENT.

       (a) Local Educational Agency Policy.--Section 1118(a) (20 
     U.S.C. 6319(a)) is amended--
       (1) in paragraph (1), by striking ``programs, activities, 
     and procedures'' and inserting ``activities and procedures'';
       (2) in paragraph (2), by striking subparagraphs (E) and (F) 
     and inserting the following:
       ``(E) conduct, with the involvement of parents, an annual 
     evaluation of the content of the parental involvement policy 
     developed under such section and the effectiveness of the 
     policy in improving the academic quality of the schools 
     served under this part;
       ``(F) involve parents in the activities of the schools 
     served under this part; and
       ``(G) promote consumer friendly environments within the 
     local educational agency and schools served under this 
     part.''; and
       (3) in paragraph (3), by adding at the end the following 
     new subparagraph:
       ``(C) Not less than 90 percent of the funds reserved under 
     subparagraph (A) shall be distributed to schools served under 
     this part.''.
       (b) Notice.--Section 1118(b)(1) (20 U.S.C. 6319(b)(1)) is 
     amended by inserting after the first sentence the following: 
     ``Parents shall be notified of the policy in a format and, to 
     the extent practicable, in a language, that the parents can 
     understand.''.
       (c) Parental Involvement.--Section 1118(c)(4) (20 U.S.C. 
     6319(c)(4)) is amended--
       (1) in subparagraph (B), by striking ``school performance 
     profiles required under section 1116(a)(3)'' and inserting 
     ``school reports described in section 4401'';
       (2) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (F) and (G), respectively;
       (3) by inserting after subparagraph (C) the following:
       ``(D) notice of the school's identification for school 
     improvement under section 1116(c), if applicable, and a clear 
     explanation of what such identification means;
       ``(E) notice of corrective action taken against the school 
     under section 1116(c)(10) or the local educational agency 
     involved under section 1116(d)(12), if applicable, and a 
     clear explanation of what such action means;''; and
       (4) in subparagraph (G) (as redesignated by paragraph (2)), 
     by striking ``subparagraph (D)'' and inserting ``subparagraph 
     (F)''.
       (d) Building Capacity for Involvement.--Section 1118(e) (20 
     U.S.C 6319(e)) is amended--
       (1) in paragraph (1), by striking ``National Educational 
     Goals,'';
       (2) by redesignating paragraphs (14) and (15) as paragraphs 
     (16) and (17), respectively;
       (3) by inserting after paragraph (13) the following:
       ``(14) may establish a parent advisory council to advise on 
     all matters related to parental involvement in programs 
     supported under this part;'';
       (4) by redesignating paragraph (5) as paragraph (15) and 
     inserting such paragraph after paragraph (14) (as inserted by 
     paragraph (3));
       (5) by inserting after paragraph (4) the following:
       ``(5) shall expand the use of electronic communication 
     among teachers, students, and parents, such as communication 
     through the use of websites and e-mail communication;'';
       (6) in paragraph (7), by inserting ``, to the extent 
     practicable, in a language and format the parent can 
     understand'' before the semicolon; and
       (7) in paragraph (15) (as redesignated by paragraph (4)), 
     by striking ``shall'' and inserting ``may''.
       (e) Accessibility.--Section 1118(f) (20 U.S.C. 6319(f)) is 
     amended by striking ``, including'' and all that follows and 
     inserting ``and of parents of migratory children, including 
     providing information required under section 1111 and school 
     reports described in section 4401 in a language and format 
     such parents can understand.''.

     SEC. 118. QUALIFICATIONS FOR TEACHERS AND PARAPROFESSIONALS.

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

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

       ``(a) In General.--
       ``(1) Plan.--Each State educational agency receiving 
     assistance under this part shall develop and submit to the 
     Secretary a plan to ensure that all teachers teaching within 
     the State are fully qualified not later than December 31, 
     2006. Such plan shall include an assurance that the State 
     educational agency will require each local educational agency 
     or school receiving funds under this part publicly to report 
     on annual progress with respect to the local educational 
     agency's or school's performance in increasing the percentage 
     of classes in core academic subjects (as defined in section 
     2002) taught by fully qualified teachers.
       ``(2) Special rule.--Notwithstanding any other provision of 
     law, the provisions of this section governing teacher 
     qualifications shall not supersede State laws governing 
     public charter schools (as defined in section 4210).
       ``(b) New Paraprofessionals.--Each local educational agency 
     receiving assistance under this part shall ensure that each 
     paraprofessional hired after December 31, 2004,

[[Page 1727]]

     and working in a program assisted under this part--
       ``(1) has completed at least the number of courses at an 
     institution of higher education in the area of elementary 
     education, or in the academic subject in which the 
     paraprofessional is working, for a minor in elementary 
     education or that subject at such institution;
       ``(2) has obtained an associate's (or higher) degree; or
       ``(3) has met a rigorous standard of quality, through 
     formal State certification (as described in subsection (h)), 
     that demonstrates, as appropriate--
       ``(A) knowledge of, and the ability to provide tutorial 
     assistance in, reading, writing, and mathematics; or
       ``(B) knowledge of, and the ability to provide tutorial 
     assistance in, reading readiness, writing readiness, and 
     mathematics readiness.
       ``(c) Existing Paraprofessionals.--Each local educational 
     agency receiving assistance under this part shall ensure 
     that, not later than 4 years after the date of enactment of 
     the Public Education Reinvestment, Reinvention, and 
     Responsibility Act, each paraprofessional working in a 
     program assisted under this part shall have satisfied the 
     requirements of subsection (b).
       ``(d) Exceptions for Translation and Parental Involvement 
     Activities.--Subsections (b) and (c) shall not apply to a 
     paraprofessional--
       ``(1) who is proficient in English and a language other 
     than English, and who provides services primarily to enhance 
     the participation of students in programs under this part by 
     acting as a translator; or
       ``(2) whose duties consist solely of conducting parental 
     involvement activities consistent with section 1118 or other 
     school readiness activities that are noninstructional.
       ``(e) General Requirement for All Paraprofessionals.--Each 
     local educational agency receiving assistance under this part 
     shall ensure that each paraprofessional working in a program 
     assisted under this part, regardless of the 
     paraprofessional's hiring date, has obtained a secondary 
     school diploma or its recognized equivalent.
       ``(f) Duties of Paraprofessionals.--
       ``(1) In general.--Each local educational agency receiving 
     assistance under this part shall ensure that a 
     paraprofessional working in a program assisted under this 
     part is not assigned a duty inconsistent with this 
     subsection.
       ``(2) Authorized responsibilities.--A paraprofessional 
     described in paragraph (1) may be assigned--
       ``(A) to provide 1-on-1 tutoring for eligible students 
     under this part, if the tutoring is scheduled at a time when 
     the student would not otherwise receive instruction from a 
     teacher;
       ``(B) to assist with classroom management, such as 
     organizing instructional and other materials;
       ``(C) to provide assistance in a computer laboratory;
       ``(D) to conduct parental involvement activities or school 
     readiness activities that are noninstructional;
       ``(E) to provide support in a library or media center;
       ``(F) to act as a translator; or
       ``(G) to provide assistance with the provision of 
     instructional services to students.
       ``(3) Limitations.--A paraprofessional described in 
     paragraph (1)--
       ``(A) shall not perform the duties of a certified or 
     licensed teacher or a substitute;
       ``(B) shall not perform any duty assigned under paragraph 
     (2) except under the direct supervision of a fully qualified 
     teacher or other appropriate professional; and
       ``(C) may not provide assistance with the provision of 
     instructional services to students in the area of reading, 
     writing, or mathematics unless the paraprofessional has 
     demonstrated, through State certification as described in 
     subsection (b)(3), the ability to effectively provide the 
     assistance.
       ``(g) Uses of Funds.--Notwithstanding subsection (h)(2), a 
     local educational agency receiving funds under this part may 
     use such funds to support ongoing training and professional 
     development to assist teachers and paraprofessionals in 
     satisfying the requirements of this section.
       ``(h) State Certification.--Each State educational agency 
     receiving assistance under this part shall--
       ``(1) ensure that the State educational agency has in place 
     State criteria for the certification of paraprofessionals by 
     December 31, 2003; and
       ``(2) ensure that paraprofessionals hired before December 
     31, 2004 who do not meet the requirements of subsection (b) 
     are in high-quality professional development activities that 
     are aimed at assisting paraprofessionals in meeting the 
     requirements of subsection (b) and that ensure that a 
     paraprofessional has the ability to carry out the duties 
     described in subsection (f).
       ``(i) Verification of Compliance.--
       ``(1) In general.--In verifying compliance with this 
     section, each local educational agency, at a minimum, shall 
     require that each principal of an elementary school or 
     secondary school operating a program under section 1114 or 
     1115 annually attest in writing as to whether the school is 
     in compliance with the requirements of this section.
       ``(2) Availability of information.--Copies of the annual 
     attestation described in paragraph (1)--
       ``(A) shall be maintained at each elementary school and 
     secondary school operating a program under section 1114 or 
     1115 and at the main office of the local educational agency; 
     and
       ``(B) shall be available to any member of the general 
     public on request.''.

     SEC. 119. PROFESSIONAL DEVELOPMENT.

       Section 1119A (as redesignated by section 118(1)) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Purpose.--The purpose of this section is to assist 
     each local educational agency receiving assistance under this 
     part in increasing the academic achievement of eligible 
     children (as identified under section 1115(b)(1)(B)) 
     (referred to in this section as `eligible children') through 
     improved teacher quality.'';
       (2) in subsection (b)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) Required activities.--Each local educational agency 
     receiving assistance under this part shall provide 
     professional development activities under this section that 
     shall--
       ``(A) give teachers, principals, and administrators the 
     knowledge and skills to provide eligible children with the 
     opportunity to meet challenging State or local content 
     standards and student performance standards;
       ``(B) support the recruiting, hiring, and training of fully 
     qualified teachers;
       ``(C) advance teacher understanding of effective 
     instructional strategies, based on scientifically based 
     research, for improving eligible children achievement in, at 
     a minimum, English language arts, mathematics, and science;
       ``(D) be directly related to the curricula and academic 
     subjects that a teacher teaches;
       ``(E) be designed to enhance the ability of a teacher to 
     understand and use the State's standards for the academic 
     subject that the teacher teaches;
       ``(F) be tied to scientifically based research that 
     demonstrates the effectiveness of such professional 
     development activities in increasing the achievement of 
     eligible children or substantially increasing the subject 
     matter knowledge, teaching knowledge, and teaching skills of 
     teachers;
       ``(G) be of sufficient intensity and duration (not to 
     include such activities as 1-day or short-term workshops and 
     conferences) to have a positive and lasting impact on 
     teachers' performance in the classroom, except that this 
     subparagraph shall not apply to an activity if such activity 
     is 1 component described in a long-term comprehensive 
     professional development plan--
       ``(i) established by the teacher and the teacher's 
     supervisor; and
       ``(ii) based on an assessment of the needs of the teacher, 
     the teacher's students who are eligible children, and the 
     local educational agency involved;
       ``(H) be developed with extensive participation of 
     teachers, principals, parents, administrators, and local 
     school boards of schools to be served under this part;
       ``(I) to the extent appropriate, provide training for 
     teachers regarding using technology and applying technology 
     effectively in the classroom, to improve teaching and 
     learning concerning the curricula and academic subjects that 
     the teachers teach;
       ``(J) as a whole, be regularly evaluated for such 
     activities' impact on increased teacher effectiveness and 
     improved student achievement, with the findings of such 
     evaluations used to improve the quality of professional 
     development; and
       ``(K) include strategies for identifying and eliminating 
     gender and racial bias in instructional materials, methods, 
     and practices.''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``and data to provide 
     information and instruction for classroom practice'' before 
     the semicolon;
       (ii) by striking subparagraphs (D) and (G);
       (iii) by redesignating subparagraphs (E), (F), (H), and 
     (I), as subparagraphs (D), (E), (F) and (G), respectively;
       (iv) in subparagraph (F) (as redesignated by clause (iii)), 
     by striking ``and'' after the semicolon;
       (v) in subparagraph (G) (as redesignated by clause (iii)), 
     by striking the period and inserting a semicolon; and
       (vi) by adding at the end (as redesignated by clause (iii)) 
     the following new subparagraph:
       ``(H) instruction in the ways that teachers, principals, 
     and guidance counselors can work with students (and the 
     parents of the students) from groups, such as females and 
     minorities, that are underrepresented in careers in 
     mathematics, science, engineering, and technology, to 
     encourage and maintain the interest of such students in those 
     careers; and
       ``(I) programs that are designed to assist new teachers 
     during their first 3 years of teaching, such as mentoring 
     programs that--
       ``(i) provide mentoring to new teachers from veteran 
     teachers with expertise in the

[[Page 1728]]

     same academic subject as the new teachers are teaching;
       ``(ii) provide mentors time for activities such as 
     coaching, observing, and assisting teachers who are being 
     mentored; and
       ``(iii) use standards or assessments that are consistent 
     with the State's student performance standards and the 
     requirements for professional development activities 
     described in section 2109 in order to guide the new 
     teachers.'';
       (3) by striking subsections (f) through (i); and
       (4) by adding after subsection (e) the following:
       ``(f) Consolidation of Funds.--Funds provided under this 
     part that are used for professional development purposes may 
     be consolidated with funds provided under title II and other 
     sources.''.

     SEC. 120. FISCAL REQUIREMENTS.

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

     SEC. 121. COORDINATION REQUIREMENTS.

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

     SEC. 122. LIMITATIONS ON FUNDS.

       Subpart 1 of part A of title I (20 U.S.C. 6311 et seq.) is 
     amended by inserting after section 1120B (20 U.S.C. 6323) the 
     following:

     ``SEC. 1120C. LIMITATIONS ON FUNDS.

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

     SEC. 123. GRANTS FOR THE OUTLYING AREAS AND THE SECRETARY OF 
                   THE INTERIOR.

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

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

       ``(a) Reservation of Funds.--From the amount appropriated 
     for payments to States for any fiscal year under section 
     1002(a), the Secretary shall reserve a total of 1 percent to 
     provide assistance to--
       ``(1) the outlying areas on the basis of their respective 
     need for such assistance according to such criteria as the 
     Secretary determines will best carry out the purpose of this 
     part; and
       ``(2) the Secretary of the Interior in the amount necessary 
     to make payments pursuant to subsection (c).
       ``(b) Assistance to the Outlying Areas.--
       ``(1) In general.--From amounts made available under 
     subsection (a) in each fiscal year, the Secretary shall make 
     grants to local educational agencies in the outlying areas 
     (other than the outlying areas assisted under paragraph (2)).
       ``(2) Competitive grants.--(A) For each fiscal year through 
     2001, the Secretary shall reserve $5,000,000 from the amounts 
     made available under subsection (a) to award grants on a 
     competitive basis, to local educational agencies in the 
     Federated States of Micronesia, the Republic of the Marshall 
     Islands, and the Republic of Palau. The Secretary shall award 
     such grants according to the recommendations of the Pacific 
     Region Educational Laboratory which shall conduct a 
     competition for such grants.
       ``(B) Except as provided in subparagraph (D), grant funds 
     awarded under this part only may be used for programs 
     described in this Act, including teacher training, curriculum 
     development, instructional materials, or general school 
     improvement and reform.
       ``(C) Grant funds awarded under this paragraph may only be 
     used to provide direct educational services.
       ``(D) The Secretary may provide 5 percent of the amount 
     made available for grants under this paragraph to pay the 
     administrative costs of the Pacific Region Educational 
     Laboratory regarding activities assisted under this 
     paragraph.
       ``(c) Allotment to the Secretary of the Interior.--
       ``(1) In general.--The amount allotted for payments to the 
     Secretary of the Interior under subsection (a)(2) for any 
     fiscal year shall be, as determined pursuant to criteria 
     established by the Secretary, the amount necessary to meet 
     the special educational needs of--
       ``(A) Indian children on reservations served by elementary 
     schools and secondary schools for Indian children operated or 
     supported by the Department of the Interior; and
       ``(B) out-of-State Indian children in elementary schools 
     and secondary schools in local educational agencies under 
     special contracts with the Department of the Interior.
       ``(2) Payments.--From the amount allotted for payments to 
     the Secretary of the Interior under subsection (a)(2), the 
     Secretary of the Interior shall make payments to local 
     educational agencies, upon such terms as the Secretary 
     determines will best carry out the purposes of this part, 
     with respect to out-of-State Indian children described in 
     paragraph (1). The amount of such payment may not exceed, for 
     each such child, the greater of--
       ``(A) 40 percent of the average per pupil expenditure in 
     the State in which the agency is located; or
       ``(B) 48 percent of such expenditure in the United 
     States.''.

     SEC. 124. AMOUNTS FOR GRANTS.

       Section 1122 (20 U.S.C. 6332) is amended to read as 
     follows:

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

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

[[Page 1729]]

     Secretary shall apply the hold-harmless percentages in 
     paragraph (1) to counties, and, if the Secretary's allocation 
     for a county is not sufficient to meet the hold-harmless 
     requirements of this subsection for every local educational 
     agency within that county, then the State educational agency 
     shall reallocate funds proportionately from all other local 
     educational agencies in the State that are receiving funds in 
     excess of the hold-harmless amounts specified in this 
     subsection.
       ``(d) Ratable Reductions.--
       ``(1) In general.--If the sums made available under this 
     part for any fiscal year are insufficient to pay the full 
     amounts that all States are eligible to receive under 
     subsection (c) for such year, the Secretary shall ratably 
     reduce such amounts for such year.
       ``(2) Additional funds.--If additional funds become 
     available for making payments under subsection (c) for such 
     fiscal year, amounts that were reduced under paragraph (1) 
     shall be increased on the same basis as such amounts reduced.
       ``(e) Definition.--For the purpose of this section and 
     sections 1124, 1124A, and 1125, the term `State' means each 
     of the 50 States, the District of Columbia, and the 
     Commonwealth of Puerto Rico.''.

     SEC. 125. BASIC GRANTS TO LOCAL EDUCATIONAL AGENCIES.

       (a) Findings.--Congress finds that--
       (1) according to the Department of Education, 58 percent of 
     all elementary schools and secondary schools receive at least 
     some funds under title I of the Elementary and Secondary 
     Education Act of 1965 (referred to in this section as ``title 
     I funds'');
       (2) of the elementary schools and secondary schools that 
     receive no title I funds at all, a disturbing number have 
     high concentrations of poor students;
       (3) 1 out of every 5 elementary schools and secondary 
     schools with poverty rates between 50 percent and 75 percent 
     do not get any title I funds;
       (4) a school district qualifies for funding through basic 
     grants made under such title I if at least 2 percent of the 
     students in the school district are from families with 
     incomes below the poverty line;
       (5) 9 out of every 10 school districts receive some title I 
     funds; and
       (6) Congress has never appropriated funding to provide 
     targeted grants under such title I.
       (b) Sense of Congress.--It is the sense of Congress that--
       (1) title I funds are distributed so broadly that many of 
     the Nation's elementary schools and secondary schools with 
     high poverty rates are not receiving on title I funds;
       (2) the Federal Government is not living up to the original 
     intent of the Elementary and Secondary Education Act of 1965, 
     which was to focus Federal funding to ensure that poor 
     students have equal access to a quality education;
       (3) it is the role of the Federal Government to provide 
     targeted funding for school districts in which the Nation's 
     poorest students live, while holding States and localities 
     accountable for raising the academic performance of all 
     students in the United States to a higher level; and
       (4) the Federal Government must take a firm stand to better 
     focus Federal funds on the Nation's poorest school districts 
     through a new formula for the title I funds that will ensure 
     that the funds are targeted so that elementary schools and 
     secondary schools in high-poverty urban and rural areas get 
     the Federal resources for education that the schools need and 
     deserve.
       (c) General Authority.--Section 1124 (20 U.S.C. 6333) is 
     amended to read as follows:

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

       ``(a) Amount of Grants.--
       ``(1) Grants for local educational agencies and puerto 
     rico.--Except as provided in paragraph (4) and in section 
     1126, the grant that a local educational agency is eligible 
     to receive under this section for a fiscal year is the amount 
     determined by multiplying--
       ``(A) the number of children counted under subsection (c); 
     and
       ``(B) 40 percent of the average per-pupil expenditure in 
     the State, except that the amount determined under this 
     subparagraph shall not be less than 32 percent, and not more 
     than 48 percent, of the average per-pupil expenditure in the 
     United States.
       ``(2) Calculation of grants.--(A) The Secretary shall 
     calculate grants under this section on the basis of the 
     number of children counted under subsection (c) for local 
     educational agencies, unless the Secretary and the Secretary 
     of Commerce determine that some or all of those data are 
     unreliable or that their use would be otherwise 
     inappropriate, in which case--
       ``(i) the 2 Secretaries shall publicly disclose the reasons 
     for their determination in detail; and
       ``(ii) paragraph (3) shall apply.
       ``(B)(i) For any fiscal year to which this paragraph 
     applies, the Secretary shall calculate grants under this 
     section for each local educational agency.
       ``(ii) The amount of a grant under this section for each 
     large local educational agency shall be the amount determined 
     under clause (i).
       ``(iii) For small local educational agencies, the State 
     educational agency may either--
       ``(I) distribute grants under this section in amounts 
     determined by the Secretary under clause (i); or
       ``(II) use an alternative method, developed in accordance 
     with clause (iv), approved by the Secretary to distribute the 
     portion of the State's total grants under this section that 
     is based on those small agencies.
       ``(iv) An alternative method under clause (iii)(II) shall 
     be based on population data that the State educational agency 
     determines best reflect the current distribution of children 
     in poor families among the State's small local educational 
     agencies that meet the eligibility criteria of subsection 
     (b).
       ``(v) If a small local educational agency is dissatisfied 
     with the determination of its grant by the State educational 
     agency under clause (iii)(II), it may appeal that 
     determination to the Secretary, who shall respond within 45 
     days of receiving it.
       ``(vi) As used in this subparagraph--
       ``(I) the term `large local educational agency' means a 
     local educational agency serving an area with a total 
     population of 20,000 or more; and
       ``(II) the term `small local educational agency' means a 
     local educational agency serving an area with a total 
     population of less than 20,000.
       ``(3) Allocations to counties.--(A) For any fiscal year to 
     which this paragraph applies, the Secretary shall calculate 
     grants under this section on the basis of the number of 
     children counted under section 1124(c) for counties, and 
     State educational agencies shall suballocate county amounts 
     to local educational agencies, in accordance with regulations 
     promulgated by the Secretary.
       ``(B) In any State in which a large number of local 
     educational agencies overlap county boundaries, or for which 
     the State believes it has data that would better target funds 
     than allocating them by county, the State educational agency 
     may apply to the Secretary for authority to make the 
     allocations under this part for a particular fiscal year 
     directly to local educational agencies without regard to 
     counties.
       ``(C) If the Secretary approves a State's application under 
     subparagraph (B), the State educational agency shall provide 
     the Secretary an assurance that those allocations are made--
       ``(i) using precisely the same factors for determining a 
     grant as are used under this part; or
       ``(ii) using data that the State educational agency submits 
     to the Secretary for approval that more accurately target 
     poverty.
       ``(D) The State educational agency shall provide the 
     Secretary an assurance that a procedure is (or will be) 
     established through which local educational agencies that are 
     dissatisfied with its determinations under subparagraph (B) 
     may appeal directly to the Secretary for a final 
     determination.
       ``(4) Puerto rico.--For each fiscal year, the Secretary 
     shall determine the percentage that the average per pupil 
     expenditure in the Commonwealth of Puerto Rico is of the 
     lowest average per pupil expenditure of any of the 50 States. 
     The grant that the Commonwealth of Puerto Rico shall be 
     eligible to receive under this section for a fiscal year 
     shall be the amount arrived at by multiplying the number of 
     children counted under subsection (c) for the Commonwealth of 
     Puerto Rico by the product of--
       ``(A) the percentage determined under the preceding 
     sentence; and
       ``(B) 32 percent of the average per pupil expenditure in 
     the United States.
       ``(5) Definition.--For purposes of this subsection, the 
     term `State' does not include an outlying area.
       ``(b) Minimum Number of Children To Qualify.--A local 
     educational agency is eligible for a basic grant under this 
     section for any fiscal year only if the number of children 
     counted under subsection (c) for that agency is--
       ``(1) 10 or more; and
       ``(2) more than 2 percent of the total school-age 
     population in the agency's jurisdiction.
       ``(c) Children To Be Counted.--
       ``(1) Categories of children.--The number of children to be 
     counted for purposes of this section is the aggregate of--
       ``(A) the number of children aged 5 to 17, inclusive, in 
     the school district of the local educational agency from 
     families below the poverty level as determined under 
     paragraph (2);
       ``(B) the number of children aged 5 to 17, inclusive, in 
     the school district of such agency from families above the 
     poverty level as determined under paragraph (4); and
       ``(C) the number of children (determined under paragraph 
     (4) for either the preceding year as described in that 
     paragraph, or for the second preceding year, as the Secretary 
     finds appropriate) aged 5 to 17, inclusive, in the school 
     district of such agency in institutions for neglected and 
     delinquent children (other than such institutions operated by 
     the United States), but not counted pursuant to subpart 1 of 
     part D for the purposes of a grant to a State agency, or 
     being supported in foster homes with public funds.
       ``(2) Determination of number of children.--For the 
     purposes of this section, the Secretary shall determine the 
     number of children aged 5 to 17, inclusive, from families 
     below the poverty level on the basis of the

[[Page 1730]]

     most recent satisfactory data, described in paragraph (3), 
     available from the Department of Commerce. The District of 
     Columbia and the Commonwealth of Puerto Rico shall be treated 
     as individual local educational agencies. If a local 
     educational agency contains 2 or more counties in their 
     entirety, then each county will be treated as if such county 
     were a separate local educational agency for purposes of 
     calculating grants under this part. The total of grants for 
     such counties shall be allocated to such a local educational 
     agency, which local educational agency shall distribute to 
     schools in each county within such agency a share of the 
     local educational agency's total grant that is no less than 
     the county's share of the population counts used to calculate 
     the local educational agency's grant.
       ``(3) Population updates.--In fiscal year 2002 and every 2 
     years thereafter, the Secretary shall use updated data on the 
     number of children, aged 5 to 17, inclusive, from families 
     below the poverty level for counties or local educational 
     agencies, published by the Department of Commerce, unless the 
     Secretary and the Secretary of Commerce determine that use of 
     the updated population data would be inappropriate or 
     unreliable. If the Secretary and the Secretary of Commerce 
     determine that some or all of the data referred to in this 
     paragraph are inappropriate or unreliable, they shall 
     publicly disclose their reasons. In determining the families 
     which are below the poverty level, the Secretary shall 
     utilize the criteria of poverty used by the Bureau of the 
     Census in compiling the most recent decennial census, in such 
     form as those criteria have been updated by increases in the 
     Consumer Price Index for all urban consumers, published by 
     the Bureau of Labor Statistics.
       ``(4) Other children to be counted.--For purposes of this 
     section, the Secretary shall determine the number of children 
     aged 5 to 17, inclusive, from families above the poverty 
     level on the basis of the number of such children from 
     families receiving an annual income, in excess of the current 
     criteria of poverty, from payments under a State program 
     funded under part A of title IV of the Social Security Act, 
     and in making such determinations the Secretary shall utilize 
     the criteria of poverty used by the Bureau of the Census in 
     compiling the most recent decennial census for a family of 4 
     in such form as those criteria have been updated by increases 
     in the Consumer Price Index for all urban consumers, 
     published by the Bureau of Labor Statistics. The Secretary 
     shall determine the number of children aged 5 through 17 
     living in institutions for neglected or delinquent children, 
     or being supported in foster homes with public funds, on the 
     basis of the caseload data for the month of October of the 
     preceding fiscal year (using, in the case of children 
     described in the preceding sentence, the criteria of poverty 
     and the form of such criteria required by such sentence which 
     were determined for the calendar year preceding such month of 
     October) or, to the extent that such data are not available 
     to the Secretary before January of the calendar year in which 
     the Secretary's determination is made, then on the basis of 
     the most recent reliable data available to the Secretary at 
     the time of such determination. The Secretary of Health and 
     Human Services shall collect and transmit the information 
     required by this paragraph to the Secretary not later than 
     January 1 of each year. For the purposes of this section, the 
     Secretary shall consider all children who are in correctional 
     institutions to be living in institutions for delinquent 
     children.
       ``(5) Estimate.--When requested by the Secretary, the 
     Secretary of Commerce shall make a special updated estimate 
     of the number of children of such ages who are from families 
     below the poverty level (determined as described in paragraph 
     (1)) in each school district, and the Secretary is authorized 
     to pay (either in advance or by way of reimbursement) the 
     Secretary of Commerce the cost of making this special 
     estimate. The Secretary of Commerce shall give consideration 
     to any request of the chief executive of a State for the 
     collection of additional census information. For purposes of 
     this section, the Secretary shall consider all children who 
     are in correctional institutions to be living in institutions 
     for delinquent children.
       ``(d) State Minimum.--Notwithstanding section 1122, the 
     aggregate amount allotted for all local educational agencies 
     within a State may not be less than the lesser of--
       ``(1) 0.25 percent of total grants under this section; or
       ``(2) the average of--
       ``(A) one-quarter of 1 percent of the total amount 
     available for such fiscal year under this section; and
       ``(B) the number of children in such State counted under 
     subsection (c) in the fiscal year multiplied by 150 percent 
     of the national average per pupil payment made with funds 
     available under this section for that year.''.

     SEC. 126. CONCENTRATION GRANTS.

       Section 1124A (20 U.S.C. 6334) is amended to read as 
     follows:

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

       ``(a) Eligibility for and Amount of Grants.--
       ``(1) In general.--(A) Except as otherwise provided in this 
     paragraph, each local educational agency, in a State other 
     than an outlying area, which is eligible for a grant under 
     section 1124 for any fiscal year is eligible for an 
     additional grant under this section for that fiscal year if 
     the number of children counted under section 1124(c) for the 
     agency exceeds either--
       ``(i) 6,500; or
       ``(ii) 15 percent of the total number of children aged 5 
     through 17 in the agency.
       ``(B) Notwithstanding section 1122, no State described in 
     subparagraph (A) shall receive less than the lesser of--
       ``(i) 0.25 percent of total grants; or
       ``(ii) the average of--
       ``(I) one-quarter of 1 percent of the sums available to 
     carry out this section for such fiscal year; and
       ``(II) the greater of--

       ``(aa) $340,000; or
       ``(bb) the number of children in such State counted for 
     purposes of this section in that fiscal year multiplied by 
     150 percent of the national average per pupil payment made 
     with funds available under this section for that year.

       ``(2) Special rule.--For each county or local educational 
     agency eligible to receive an additional grant under this 
     section for any fiscal year the Secretary shall determine the 
     product of--
       ``(A) the number of children counted under section 1124(c) 
     for that fiscal year; and
       ``(B) the amount in section 1124(a)(1)(B) for all States 
     except Puerto Rico, and the amount in section 1124(a)(4) for 
     Puerto Rico.
       ``(3) Amount.--The amount of the additional grant for which 
     an eligible local educational agency or county is eligible 
     under this section for any fiscal year shall be an amount 
     which bears the same ratio to the amount available to carry 
     out this section for that fiscal year as the product 
     determined under paragraph (2) for such local educational 
     agency for that fiscal year bears to the sum of such products 
     for all local educational agencies in the United States for 
     that fiscal year.
       ``(4) Local allocations.--(A) Grant amounts under this 
     section shall be determined in accordance with paragraphs (2) 
     and (3) of section 1124(a).
       ``(B) For any fiscal year for which the Secretary allocates 
     funds under this section on the basis of counties, a State 
     may reserve not more than 2 percent of its allocation under 
     this section for any fiscal year to make grants to local 
     educational agencies that meet the criteria of clause (i) or 
     (ii) of paragraph (1)(A) but that are in ineligible counties.
       ``(b) States Receiving Minimum Grants.--In States that 
     receive the minimum grant under subsection (a)(1)(B), the 
     State educational agency shall allocate such funds among the 
     local educational agencies in each State either--
       ``(1) in accordance with paragraphs (2) and (4) of 
     subsection (a); or
       ``(2) based on their respective concentrations and numbers 
     of children counted under section 1124(c), except that only 
     those local educational agencies with concentrations or 
     numbers of children counted under section 1124(c) that exceed 
     the statewide average percentage of such children or the 
     statewide average number of such children shall receive any 
     funds on the basis of this paragraph.''.

     SEC. 127. TARGETED GRANTS.

       Section 1125 (20 U.S.C 6335) is amended to read as follows:

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

       ``(a) Eligibility of Local Educational Agencies.--A local 
     educational agency in a State is eligible to receive a 
     targeted grant under this section for any fiscal year if the 
     number of children in the local educational agency counted 
     under section 1124(c), before application of the weighting 
     factor described in subsection (c), is at least 10, and if 
     the number of children counted for grants under section 1124 
     is at least 5 percent of the total population aged 5 to 17 
     years, inclusive, in the local educational agency. Funds made 
     available as a result of applying this subsection shall be 
     reallocated by the State educational agency to other eligible 
     local educational agencies in the State in proportion to the 
     distribution of other funds under this section.
       ``(b) Grants for Local Educational Agencies, the District 
     of Columbia, and Puerto Rico.--
       ``(1) In general.--The amount of the grant that a local 
     educational agency in a State or that the District of 
     Columbia is eligible to receive under this section for any 
     fiscal year shall be the product of--
       ``(A) the weighted child count determined under subsection 
     (c); and
       ``(B) the amount in section 1124(a)(1).
       ``(2) Puerto rico.--For each fiscal year, the amount of the 
     grant for which the Commonwealth of Puerto Rico is eligible 
     under this section shall be equal to the number of children 
     counted under subsection (c) for Puerto Rico, multiplied by 
     the amount determined in section 1124(a)(4).
       ``(c) Weighted Child Count.--
       ``(1) Weights for allocations to counties.--(A) For each 
     fiscal year for which the Secretary uses county population 
     data to calculate grants, the weighted child count

[[Page 1731]]

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

     SEC. 128. EDUCATION FINANCE INCENTIVE PROGRAM.

       Section 1125A (20 U.S.C. 6336) is amended to read as 
     follows:

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

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

[[Page 1732]]

       ``(2) Reduction of funds.--The Secretary shall reduce the 
     amount of the funds awarded to any State under this section 
     in any fiscal year in the exact proportion to which the State 
     fails to meet the requirements of paragraph (1) by falling 
     below 90 percent of both the fiscal effort per student and 
     aggregate expenditures (using the measure most favorable to 
     the State), and no such lesser amount shall be used for 
     computing the effort required under paragraph (1) for 
     subsequent years.
       ``(3) Waivers.--The Secretary may waive, for 1 fiscal year 
     only, the requirements of paragraphs (1) and (2) if the 
     Secretary determines that such a waiver would be equitable 
     due to exceptional or uncontrollable circumstances such as a 
     natural disaster or a precipitous and unforeseen decline in 
     the financial resources of the State.
       ``(e) Authorization of Appropriations.--For the purpose of 
     making grants under this section, there are authorized to be 
     appropriated $200,000,000 for fiscal year 2002 and such sums 
     as may be necessary for each of the 3 succeeding fiscal 
     years.''.

     SEC. 129. SPECIAL ALLOCATION PROCEDURES.

       Section 1126 (20 U.S.C. 6337) is amended to read as 
     follows:

     ``SEC. 1126. SPECIAL ALLOCATION PROCEDURES.

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

            Subtitle B--Even Start Family Literacy Programs

     SEC. 131. PROGRAM AUTHORIZED.

       Section 1202(c) (20 U.S.C. 6362(c)) is amended--
       (1) in paragraph (1), by striking ``subsection and for 
     which'' and all that follows through ``, whichever is less, 
     to award grants,'' and inserting ``subsection, from funds 
     reserved under section 7104(b), the Secretary shall award 
     grants,'';
       (2) by striking paragraph (2)(C); and
       (3) in paragraph (3)--
       (A) by striking ``is defined'' and inserting ``was 
     defined''; and
       (B) by inserting ``as such section was in effect on the day 
     preceding the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act'' after 
     ``2252''.

     SEC. 132. APPLICATIONS.

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

     SEC. 133. RESEARCH.

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

              Subtitle C--Education of Migratory Children

     SEC. 141. COMPREHENSIVE NEEDS ASSESSMENT AND SERVICE-DELIVERY 
                   PLAN; AUTHORIZED ACTIVITIES.

       Section 1306(a)(1) (20 U.S.C. 6369(a)(1)) is amended--
       (1) in subparagraph (A), by striking ``, the Goals 2000'' 
     and all that follows through the semicolon and inserting ``or 
     other Acts, as appropriate, consistent with section 8306;'';
       (2) in subparagraph (B), by striking ``section 14302'' and 
     inserting ``section 8302''; and
       (3) in subparagraph (F), by striking ``bilingual 
     education'' and all that follows and inserting ``language 
     instruction programs under title III; and''.

Subtitle D--Prevention and Intervention Programs for Children and Youth 
       who are Neglected, Delinquent, or at Risk of Dropping Out

     SEC. 151. STATE PLAN AND STATE AGENCY APPLICATIONS.

       Section 1414 (20 U.S.C. 6434) is amended--
       (1) in subsection (a)(1), by striking ``, the Goals 2000'' 
     and all that follows through the period and inserting ``or 
     other Acts, as appropriate, consistent with section 8305.''; 
     and
       (2) in subsection (c)--
       (A) in paragraph (6), by striking ``section 14701'' and 
     inserting ``section 8701''; and
       (B) in paragraph (7), by striking ``section 14501'' and 
     inserting ``section 8501''.

     SEC. 152. USE OF FUNDS.

       Section 1415(a)(2)(D) (20 U.S.C. 6435(a)(2)(D)) is amended 
     by striking ``section 14701'' and inserting ``section 8701''.

    Subtitle E--Federal Evaluations, Demonstrations, and Transition 
                                Projects

     SEC. 161. EVALUATIONS.

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

     SEC. 162. DEMONSTRATIONS OF INNOVATIVE PRACTICES.

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

     ``SEC. 1502. COMPREHENSIVE SCHOOL REFORM.

       ``(a) Findings and Purpose.--
       ``(1) Findings.--Congress finds the following:
       ``(A) A number of schools across the country have shown 
     impressive gains in student performance through the use of 
     comprehensive models for schoolwide change that incorporate 
     virtually all aspects of school operations.
       ``(B) No single comprehensive school reform model may be 
     suitable for every school. Schools should be encouraged to 
     examine successful, externally developed comprehensive school 
     reform approaches as the schools undertake comprehensive 
     school reform.
       ``(C) Comprehensive school reform is an important means by 
     which children are assisted in meeting challenging State 
     student performance standards.
       ``(2) Purpose.--The purpose of this section is to provide 
     financial incentives for schools to develop comprehensive 
     school reforms, based upon scientifically based research and 
     effective practices that include an emphasis on basic 
     academics and parental involvement so that all children can 
     meet challenging State content and performance standards.
       ``(b) Grants to States.--
       ``(1) In general.--The Secretary is authorized to provide 
     grants to State educational agencies from allotments under 
     paragraph (2) to provide subgrants to local educational 
     agencies to carry out the purpose described in subsection 
     (a)(2).
       ``(2) Allotment.--
       ``(A) Reservation.--Of the amount made available under 
     subsection (f) for a fiscal year, the Secretary may reserve--
       ``(i) not more than 1 percent for--

       ``(I) payments to the Bureau of Indian Affairs for 
     activities, approved by the Secretary, consistent with this 
     section; and
       ``(II) payments to outlying areas, to be allotted in 
     accordance with their respective needs for assistance under 
     this section as determined by the Secretary, for activities, 
     approved by the Secretary, consistent with this section; and

       ``(ii) not more than 1 percent to conduct national 
     evaluation activities described in subsection (d).
       ``(B) In general.--Of the amount made available under 
     subsection (f) for a fiscal year and remaining after the 
     reservation under subparagraph (A), the Secretary shall allot 
     to each State an amount that bears the same ratio to the 
     remainder as the amount made available under section 1124 to 
     the State for the preceding fiscal year bears to the total 
     amount made available under section 1124 to all States for 
     that year.
       ``(C) Reallotment.--If a State chooses not to apply for 
     funds under this section, or fails to submit an approvable 
     application under paragraph (3), the Secretary shall reallot 
     the funds that such State would have received under 
     subparagraph (B) to States having applications approved under 
     paragraph (3), in accordance with subparagraph (B).
       ``(3) State application.--
       ``(A) In general.--Each State educational agency that 
     desires to receive a grant under this section shall submit an 
     application to the Secretary at such time, in such manner and 
     containing such other information as the Secretary may 
     reasonably require.
       ``(B) Contents.--Each State application shall describe--
       ``(i) the process and selection criteria with which the 
     State educational agency, after using expert review, will 
     select local educational agencies to receive subgrants under 
     this section;
       ``(ii) how the agency will ensure that only comprehensive 
     school reforms that are based

[[Page 1733]]

     on scientifically based research will receive funds under 
     this section;
       ``(iii) how the agency will disseminate materials regarding 
     information on comprehensive school reforms that are based on 
     scientifically based research;
       ``(iv) how the agency will evaluate the implementation of 
     such reforms and measure the extent to which the reforms 
     resulted in increased student academic performance; and
       ``(v) how the agency will provide, upon request, technical 
     assistance to a local educational agency in evaluating, 
     developing, and implementing comprehensive school reform.
       ``(4) Reporting.--Each State educational agency that 
     receives a grant under this section shall provide to the 
     Secretary such information as the Secretary may require, 
     including the names of local educational agencies and schools 
     selected to receive grants under this section, the amount of 
     such grants, and a description of the comprehensive school 
     reform model selected and used for the schools.
       ``(5) Administrative costs.--A State educational agency 
     that receives a grant under this section may reserve not more 
     than 5 percent of the funds made available through the grant 
     for administrative, evaluation, and technical assistance 
     expenses.
       ``(c) Grants to Local Educational Agencies.--
       ``(1) Grants.--
       ``(A) In general.--Except as provided in subsection (b)(5), 
     a State educational agency that receives a grant under this 
     section shall use the grant funds to provide grants, on a 
     competitive basis, to local educational agencies receiving 
     funds under part A.
       ``(B) Grant requirements.--A grant to a local educational 
     agency shall be--
       ``(i) of sufficient size and scope to pay for the initial 
     costs for the particular comprehensive school reform plan 
     selected or designed by each school identified in the 
     application of the local educational agency;
       ``(ii) in an amount of not less than $50,000 for each 
     participating school; and
       ``(iii) made for an initial period of 1 year, and shall be 
     renewable for 2 additional 1-year periods if the 
     participating schools are making substantial progress in the 
     implementation of their reforms.
       ``(2) Local applications.--
       ``(A) In general.--To be eligible to receive a grant under 
     this section, a local educational agency shall submit an 
     application to the State educational agency at such time, in 
     such manner, and containing such information as the agency 
     may require.
       ``(B) Contents.--At a minimum, the local application 
     shall--
       ``(i) identify which schools that are served by the local 
     educational agency and eligible for funds under part A plan 
     to implement a comprehensive school reform program, and 
     identify the projected costs of such a program;
       ``(ii) describe the scientifically based comprehensive 
     school reforms that such schools will implement;
       ``(iii) describe how the agency will provide technical 
     assistance and support for the effective implementation of 
     the scientifically based school reforms selected by such 
     schools; and
       ``(iv) describe how the agency will evaluate the 
     implementation of such reforms and measure the results 
     achieved in improving student academic performance.
       ``(3) Components of the program.--A local educational 
     agency that receives a grant under this section shall provide 
     grant funds to schools that, individually, implement a 
     comprehensive school reform program that--
       ``(A) employs innovative strategies and proven methods for 
     student learning, teaching, and school management that are 
     based on scientifically based research and effective 
     practices and have been replicated successfully in schools 
     with diverse characteristics;
       ``(B) uses a comprehensive design for effective school 
     functioning, including instruction, assessment, classroom 
     management, professional development, parental involvement, 
     and school management, that aligns the school's curriculum, 
     technology, and professional development into a comprehensive 
     reform plan for schoolwide change designed to enable all 
     students to meet challenging State content and student 
     performance standards, and that addresses needs identified 
     through a school needs assessment;
       ``(C) provides high quality and continuous teacher and 
     staff professional development;
       ``(D) includes measurable goals for student performance and 
     benchmarks for meeting such goals;
       ``(E) is supported by teachers, principals, administrators, 
     and other professional staff;
       ``(F) provides for the meaningful involvement of parents 
     and the local community in planning and implementing school 
     improvement activities;
       ``(G) uses high quality external technical support and 
     assistance from an entity, which may be an institution of 
     higher education, with experience and expertise in schoolwide 
     reform and improvement;
       ``(H) includes a plan for the evaluation of the 
     implementation of school reforms and the student results 
     achieved; and
       ``(I) identifies how other resources, including Federal, 
     State, local, and private resources, available to the school 
     will be used to coordinate services to support and sustain 
     the school reform effort.
       ``(4) Priority and consideration.--
       ``(A) Priority.--The State educational agency, in awarding 
     grants under paragraph (1), shall give priority to local 
     educational agencies that--
       ``(i) plan to use the grant funds in schools identified for 
     school improvement or corrective action under section 
     1116(c); and
       ``(ii) demonstrate a commitment to assist schools with 
     budget allocation, professional development, and other 
     strategies necessary to ensure the comprehensive school 
     reforms are properly implemented and are sustained in the 
     future.
       ``(B) Grant consideration.--In making grants under this 
     section, the State educational agency shall take into account 
     the need for equitable distribution of funds to different 
     geographic regions within the State, including urban and 
     rural areas, and to elementary schools and secondary schools.
       ``(5) Special rule.--A school that receives funds under 
     this section to develop a comprehensive school reform program 
     shall not be limited to using the approaches identified or 
     developed by the Department of Education, but may develop 
     comprehensive school reform programs for schoolwide change 
     that comply with paragraph (3).
       ``(d) Evaluation and Report.--
       ``(1) In general.--The Secretary shall develop and carry 
     out a plan for a national evaluation of the programs 
     developed pursuant to this section.
       ``(2) Evaluation.--The national evaluation shall evaluate 
     the implementation of the programs and the results achieved 
     by schools after 1 year and 3 years of implementing 
     comprehensive school reforms through the programs, and assess 
     the effectiveness of comprehensive school reforms in schools 
     with diverse characteristics.
       ``(3) Reports.--
       ``(A) Interim report.--After evaluating the first year of 
     implementation and results under paragraph (2), the Secretary 
     shall submit an interim report outlining first year 
     implementation activities to the Committees on Education and 
     the Workforce and Appropriations of the House of 
     Representatives and the Committees on Health, Education, 
     Labor, and Pensions and Appropriations of the Senate.
       ``(B) Final report.--After evaluating the third year of 
     implementation and results under paragraph (2), the Secretary 
     shall submit a final report outlining third year 
     implementation activities to the committees described in 
     subparagraph (A).
       ``(e) Supplement.--Funds made available under this section 
     shall be used to supplement and not supplant other Federal, 
     State, and local public funds expended for activities 
     described in this section.
       ``(f) Authorization of Appropriations.--Funds appropriated 
     for any fiscal year under section 1002(f) shall be used for 
     carrying out the activities under this section.
       ``(g) Definition.--The term `scientifically based 
     research'--
       ``(1) means the application of rigorous, systematic, and 
     objective procedures in the development of comprehensive 
     school reform models; and
       ``(2) shall include research that--
       ``(A) employs systematic, empirical methods that draw on 
     observation or experiment;
       ``(B) involves rigorous data analyses that are adequate to 
     test stated hypotheses and justify the general conclusions 
     drawn;
       ``(C) relies on measurements or observational methods that 
     provide valid data across evaluators and observers and across 
     multiple measurements and observations; and
       ``(D) has been accepted by a journal that uses peer review 
     or approved by a panel of independent experts through a 
     comparably rigorous, objective, and scientific review.''.

           Subtitle F--Rural Education Development Initiative

     SEC. 171. RURAL EDUCATION DEVELOPMENT INITIATIVE.

       Title I (20 U.S.C. 6301 et seq.) is amended--
       (1) by redesignating part F (20 U.S.C. 6511 et seq.) as 
     part G and redesignating accordingly the references to such 
     part F;
       (2) by redesignating sections 1601 through 1604 (20 U.S.C. 
     6511, 6514) as sections 1701 through 1704, respectively, and 
     by redesignating accordingly the references to such sections 
     1601 through 1604; and
       (3) by inserting after part E (20 U.S.C. 6491 et seq.) the 
     following:

                  ``PART F--RURAL EDUCATION INITIATIVE

     ``SEC. 1601. SHORT TITLE.

       ``This part may be cited as the `Rural Education 
     Achievement Program'.

     ``SEC. 1602. PURPOSE.

       ``It is the purpose of this part to address the unique 
     needs of rural school districts that frequently--
       ``(1) lack the personnel and resources needed to compete 
     for Federal competitive grants; and
       ``(2) receive formula allocations in amounts too small to 
     be effective in meeting their intended purposes.

[[Page 1734]]



     ``SEC. 1603. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     to carry out this part $300,000,000 for fiscal year 2002 and 
     such sums as may be necessary for each of the 4 succeeding 
     fiscal years, of which 50 percent shall be available to carry 
     out subpart 1 for each such fiscal year and 50 percent shall 
     be available to carry out subpart 2 for each such fiscal 
     year.
       ``(b) Special Rule.--Notwithstanding subsection (a), if the 
     amount of funds made available under subsection (a) to carry 
     out subpart 1 for any fiscal year exceeds the amount required 
     to carry out subpart 1 for the fiscal year, then such excess 
     shall be available to carry out subpart 2 for the fiscal 
     year.

          ``Subpart 1--Small, Rural School Achievement Program

     ``SEC. 1611. FORMULA GRANT PROGRAMS.

       ``(a) Alternative Uses.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, an eligible local educational agency may use the 
     applicable funding, that the agency is eligible to receive 
     from the State educational agency for a fiscal year, to carry 
     out activities described in section 1114, 1115, 1116, 2207, 
     3107, or 6006.
       ``(2) Notification.--An eligible local educational agency 
     shall notify the State educational agency of the local 
     educational agency's intention to use the applicable funding 
     in accordance with paragraph (1) not later than a date that 
     is established by the State educational agency for the 
     notification.
       ``(b) Eligibility.--A local educational agency shall be 
     eligible to use the applicable funding in accordance with 
     subsection (a) if--
       ``(1) the total number of students in average daily 
     attendance at all of the schools served by the local 
     educational agency is less than 600; and
       ``(2) all of the schools served by the local educational 
     agency are designated with a School Locale Code of 7 or 8, as 
     determined by the Secretary of Education.
       ``(c) Applicable Funding.--In this section, the term 
     `applicable funding' means funds provided under each of 
     titles II, III, and VI.
       ``(d) Disbursal.--Each State educational agency that 
     receives applicable funding for a fiscal year shall disburse 
     the applicable funding to local educational agencies for 
     alternative uses under this section for the fiscal year at 
     the same time that the State educational agency disburses the 
     applicable funding to local educational agencies that do not 
     intend to use the applicable funding for such alternative 
     uses for the fiscal year.
       ``(e) Supplement not Supplant.--Funds made available under 
     this section shall be used to supplement and not supplant any 
     other Federal, State, or local education funds.
       ``(f) Special Rule.--References in Federal law to funds for 
     the provisions of law set forth in subsection (c) may be 
     considered to be references to funds for this section.
       ``(g) Cooperative Arrangements.--Nothing in this subpart 
     shall be construed to prohibit a local educational agency 
     that enters into cooperative arrangements with other local 
     educational agencies for the provision of special, 
     compensatory, or other education services pursuant to State 
     law or a written agreement from entering into similar 
     arrangements for the use or the coordination of the use of 
     the funds made available under this section.

     ``SEC. 1612. FORMULA GRANT PROGRAM AUTHORIZED.

       ``(a) In General.--The Secretary is authorized to award 
     grants to eligible local educational agencies to enable the 
     local educational agencies to carry out activities described 
     in section 1114, 1115, 1116, 2207, 3107, or 6006.
       ``(b) Eligibility.--A local educational agency shall be 
     eligible to receive a grant under this section if--
       ``(1) the total number of students in average daily 
     attendance at all of the schools served by the local 
     educational agency is less than 600; and
       ``(2) all of the schools served by the local educational 
     agency are designated with a School Locale Code of 7 or 8, as 
     determined by the Secretary of Education.
       ``(c) Amount.--
       ``(1) In general.--The Secretary shall award a grant to a 
     local educational agency under this section for a fiscal year 
     in an amount equal to the amount determined under paragraph 
     (2) for the fiscal year minus the total amount received by 
     the local educational agency for the preceding fiscal year 
     under the provisions of law described in section 1611(c).
       ``(2) Determination.--The amount referred to in paragraph 
     (1) is equal to $100 multiplied by the total number of 
     students in excess of 50 students that are in average daily 
     attendance at the schools served by the local educational 
     agency, plus $20,000, except that the amount may not exceed 
     $60,000.
       ``(3) Census determination.--
       ``(A) In general.--Each local educational agency desiring a 
     grant under this section shall conduct a census not later 
     than December 1 of each year to determine the number of 
     kindergarten through grade 12 students in average daily 
     attendance at the schools served by the local educational 
     agency.
       ``(B) Submission.--Each local educational agency shall 
     submit the number described in subparagraph (A) to the 
     Secretary not later than March 1 of each year.
       ``(4) Penalty.--If the Secretary determines that a local 
     educational agency has knowingly submitted false information 
     under paragraph (3) for the purpose of gaining additional 
     funds under this section, then the local educational agency 
     shall be fined an amount equal to twice the difference 
     between the amount the local educational agency received 
     under this section, and the correct amount the local 
     educational agency would have received under this section if 
     the agency had submitted accurate information under paragraph 
     (3).
       ``(d) Disbursal.--The Secretary shall disburse the funds 
     awarded to a local educational agency under this section for 
     a fiscal year not later than July 1 of that year.
       ``(e) Supplement not Supplant.--Funds made available under 
     this section shall be used to supplement and not supplant any 
     other Federal, State, or local education funds.
       ``(f) Construction.--Nothing in this subpart shall be 
     construed to prohibit a local educational agency that enters 
     into cooperative arrangements with other local educational 
     agencies for the provision of special, compensatory, or other 
     education services pursuant to State law or a written 
     agreement from entering into similar arrangements for the use 
     or the coordination of the use of the funds made available 
     under this section.

     ``SEC. 1613. APPLICATIONS.

       ``(a) In General.--Each eligible local educational agency 
     desiring to use funds for alternative uses under section 1611 
     or desiring a grant under section 1612 annually shall submit 
     an application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require.
       ``(b) Contents.--Each application submitted under 
     subsection (a) shall--
       ``(1) describe the activities for which funds made 
     available under this subpart will be used to raise student 
     academic performance;
       ``(2) specify annual, measurable performance goals and 
     objectives, at a minimum, for the activities assisted under 
     this subpart with respect to--
       ``(A) increased student academic achievement;
       ``(B) decreased gaps in achievement between minority and 
     nonminority students, and between economically disadvantaged 
     and non-economically disadvantaged students (unless the 
     Secretary determines the number of students in a category is 
     insufficient to yield statistically reliable information); 
     and
       ``(C) other factors that the eligible local educational 
     agency may choose to measure; and
       ``(3) specify the extent to which such goals are aligned 
     with State content and student performance standards;
       ``(4) describe how the eligible local educational agency 
     will--
       ``(A) measure the annual impact of activities described in 
     paragraph (1) and the extent to which the activities will 
     increase student academic performance; and
       ``(B) hold elementary schools or secondary schools using or 
     receiving funds under this subpart accountable for meeting 
     the annual, measurable goals and objectives;
       ``(5) describe how the eligible local educational agency 
     will provide technical assistance for an elementary school or 
     secondary school that does not meet the annual, measurable 
     goals and objectives;
       ``(6) describe how the eligible local educational agency 
     will take action against an elementary school or secondary 
     school, if the school fails, over 2 consecutive years, to 
     meet the annual, measurable goals and objectives; and
       ``(7) in the case that the application describes 
     alternative uses for funds under title II or III, specify how 
     the eligible local educational agency shall use the funds to 
     meet the annual numerical performance objectives described in 
     section 2104 or 3109, respectively.

     ``SEC. 1614. ACCOUNTABILITY.

       ``The Secretary, at the end of the third year that an 
     eligible local educational agency uses funds in accordance 
     with section 1611 or receives grant funds under section 1612, 
     shall permit only those eligible local educational agencies 
     that meet their annual, measurable goals and objectives 
     described in section 1613(b)(2) and their performance 
     objectives described in section 2104 and 3109 for 2 
     consecutive years to continue to so use funds or receive 
     grant funds for the fourth or fifth fiscal years of 
     participation in the program under this subpart.

     ``SEC. 1615. RATABLE REDUCTIONS IN CASE OF INSUFFICIENT 
                   APPROPRIATIONS.

       ``(a) In General.--If the amount appropriated for any 
     fiscal year and made available for grants under section 1612 
     is insufficient to pay the full amount for which all agencies 
     are eligible under this subpart, the Secretary shall ratably 
     reduce each such amount.
       ``(b) Additional Amounts.--If additional funds become 
     available for making payments under paragraph (1) for such 
     fiscal year, payments that were reduced under subsection

[[Page 1735]]

     (a) shall be increased on the same basis as such payments 
     were reduced.

     ``SEC. 1616. REPORTS.

       ``(a) Reports From Eligible Local Educational Agencies.--
     Each eligible local educational agency making alternative use 
     of funds under section 1611 or receiving a grant under 
     section 1612 shall provide an annual report to the Secretary. 
     The report shall describe--
       ``(1) how the agency used the funds made available under 
     this subpart;
       ``(2) the degree to which progress has been made toward 
     meeting the annual, measurable goals and objectives described 
     in the agency's application; and
       ``(3) how the agency coordinated funds received under this 
     subpart with other Federal, State, and local funds.
       ``(b) Report to Congress.--The Secretary shall prepare and 
     submit to Congress an annual report setting forth the 
     information provided to the Secretary pursuant to subsection 
     (a).

            ``Subpart 2--Low-Income and Rural School Program

     ``SEC. 1621. DEFINITIONS.

       ``In this subpart:
       ``(1) 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.
       ``(2) Specially qualified agency.--The term `specially 
     qualified agency' means an eligible local educational agency, 
     located in a State that does not participate in a program 
     carried out under this subpart for a fiscal year, that 
     applies directly to the Secretary for a grant for such year 
     in accordance with section 1622(b).

     ``SEC. 1622. PROGRAM AUTHORIZED.

       ``(a) Grants to States.--
       ``(1) In general.--From the sum appropriated under section 
     1603 for a fiscal year and made available to carry out this 
     subpart, the Secretary shall award grants, from allotments 
     made under paragraph (2) , to State educational agencies that 
     have applications approved under section 1624 to enable the 
     State educational agencies to award grants to eligible local 
     educational agencies for activities described in section 
     1114, 1115, 1116, 2207, 3107, or 6006.
       ``(2) Allotment.--From the sum appropriated under section 
     1603 for a fiscal year and made available to carry out this 
     subpart, the Secretary shall allot to each State educational 
     agency an amount that bears the same ratio to the sum as the 
     number of students in average daily attendance at the schools 
     served by eligible local educational agencies in the State 
     for that fiscal year bears to the number of all such students 
     at the schools served by eligible local educational agencies 
     in all States for that fiscal year.
       ``(b) Direct Grants to Specially Qualified Agencies.--
       ``(1) Nonparticipating state.--If a State educational 
     agency elects not to participate in the program carried out 
     under this subpart or does not have an application approved 
     under section 1624, a specially qualified agency in such 
     State desiring a grant under this subpart may apply directly 
     to the Secretary under section 1624 to receive a grant under 
     this subpart.
       ``(2) Direct awards to specially qualified agencies.--The 
     Secretary may award, on a competitive basis, the amount the 
     State educational agency is eligible to receive under 
     subsection (a)(2) directly to specially qualified agencies in 
     the State.
       ``(c) Administrative Costs.--A State educational agency 
     that receives a grant under this subpart may not use more 
     than 2 percent of the amount of the grant funds for State 
     administrative costs.

     ``SEC. 1623. STATE DISTRIBUTION OF FUNDS.

       ``(a) In General.--A State educational agency that receives 
     a grant under this subpart shall use the funds made available 
     through the grant to award grants to eligible local 
     educational agencies to enable the local educational agencies 
     to carry out activities described in section 1114, 1115, 
     1116, 2207, 3107, or 6006.
       ``(b) Local Awards.--A local educational agency shall be 
     eligible to receive a grant under this subpart if--
       ``(1) 20 percent or more of the children age 5 through 17 
     that are served by the local educational agency are from 
     families with incomes below the poverty line; and
       ``(2) all of the schools served by the local educational 
     agency are located in a community with a Rural-Urban 
     Continuum Code of 6, 7, 8, or 9, as determined by the 
     Secretary of Agriculture.
       ``(c) Award Basis.--The State educational agency shall 
     award the grants to eligible local educational agencies--
       ``(1) according to a formula based on the number of 
     students in average daily attendance at schools served by the 
     eligible local educational agencies; or
       ``(2) on a competitive basis if distribution by formula is 
     impracticable as determined by the State educational agency.

     ``SEC. 1624. APPLICATIONS.

       ``(a) In General.--Each State educational agency desiring a 
     grant under section 1622(a) and each specially qualified 
     agency desiring a grant under section 1622(b) shall submit an 
     application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require.
       ``(b) Contents.--Each application submitted under 
     subsection (a) shall--
       ``(1) specify annual, measurable performance goals and 
     objectives for the activities assisted under this subpart, at 
     a minimum, with respect to--
       ``(A) increased student academic achievement;
       ``(B) decreased gaps in achievement between minority and 
     non-minority students, and between economically disadvantaged 
     and non-economically disadvantaged students (unless the 
     Secretary determines the number of students in a category is 
     insufficient to yield statistically reliable information); 
     and
       ``(C) other factors that the State educational agency or 
     eligible local educational agency may choose to measure;
       ``(2) describe how the State educational agency or 
     specially qualified agency will hold local educational 
     agencies and elementary schools or secondary schools 
     receiving funds under this subpart accountable for meeting 
     the annual, measurable goals and objectives;
       ``(3) describe how the State educational agency or 
     specially qualified agency will provide technical assistance 
     for a local educational agency, an elementary school, or a 
     secondary school that does not meet the annual, measurable 
     goals and objectives; and
       ``(4) describe how the State educational agency or 
     specially qualified agency will take action against a local 
     educational agency, an elementary school, or a secondary 
     school, if the local educational agency or school fails, over 
     2 consecutive years, to meet the annual, measurable goals and 
     objectives.

     ``SEC. 1625. USES OF FUNDS.

       ``Grant funds awarded to eligible local educational 
     agencies under this subpart shall be used for--
       ``(1) educational technology activities;
       ``(2) high quality professional development for teachers 
     and principals;
       ``(3) technical assistance;
       ``(4) recruitment and retention of fully qualified 
     teachers, as defined in section 2002, and highly qualified 
     principals;
       ``(5) parental involvement activities; or
       ``(6) other programs or activities that--
       ``(A) seek to raise the academic achievement levels of all 
     elementary school and secondary school students; and
       ``(B) are based on State content and student performance 
     standards.

     ``SEC. 1626. ACCOUNTABILITY.

       ``The Secretary, at the end of the third year that a State 
     educational agency or specially qualified agency receives 
     grant funds under this subpart, shall permit only those State 
     educational agencies and specially qualified agencies that 
     meet their annual, measurable goals and objectives for 2 
     consecutive years to continue to receive grant funds for the 
     fourth or fifth fiscal years of the program under this 
     subpart.

     ``SEC. 1627. REPORTS AND STUDY.

       ``(a) State Reports.--Each State educational agency that 
     receives a grant under this subpart shall provide an annual 
     report to the Secretary. The report shall describe--
       ``(1) the method the State educational agency used to award 
     grants to eligible local educational agencies and to provide 
     assistance to elementary schools and secondary schools under 
     this subpart;
       ``(2) how eligible local educational agencies, elementary 
     schools, and secondary schools within the State used the 
     grant funds provided under this subpart; and
       ``(3) the degree to which progress has been made toward 
     meeting the annual, measurable goals and objectives described 
     in the State application.
       ``(b) Reports From Eligible Local Educational Agencies.--
     Each eligible local educational agency receiving a grant 
     under this subpart shall provide an annual report to the 
     Secretary. Such report shall describe--
       ``(1) how the agency used the grant funds;
       ``(2) the degree to which progress has been made toward 
     meeting the annual, measurable goals and objectives described 
     in the agency's application; and
       ``(3) how the agency coordinated funds received under this 
     subpart with other Federal, State, and local funds.
       ``(c) Report to Congress.--The Secretary shall prepare and 
     submit to Congress an annual report setting forth the 
     information provided to the Secretary pursuant to subsections 
     (a) and (b).
       ``(d) Study.--The Comptroller General of the United States 
     shall conduct a study regarding the impact of assistance 
     provided under this subpart on student achievement, and shall 
     submit such study to Congress.

     ``SEC. 1628. SUPPLEMENT NOT SUPPLANT.

       ``Funds made available under this subpart shall be used to 
     supplement and not supplant any other Federal, State, or 
     local education funds.

     ``SEC. 1629. SPECIAL RULE.

       ``No local educational agency may concurrently participate 
     in activities carried out under subpart 1 and activities 
     carried out under this subpart.''.

[[Page 1736]]



                     Subtitle G--General Provisions

     SEC. 181. STATE ADMINISTRATION.

       Section 1703 (20 U.S.C. 6513) (as redesignated by section 
     171(2)) is amended by striking subsection (c).

     SEC. 182. DEFINITIONS.

       Part G of title I (20 U.S.C. 6511 et seq.) (as redesignated 
     by section 171(1)) is amended by adding at the end the 
     following:



     ``SEC. 1705. DEFINITIONS.

       ``In this title:
       ``(1) Fully qualified.--The term `fully qualified' has the 
     meaning given such term in section 2002.
       ``(2) Low-performing student.--The term `low-performing 
     student' means a student who performs below a State's basic 
     level of performance described in the State standards 
     described in section 1111(b)(1).
       ``(3) Scientifically based research.--Except as provided in 
     section 1502, the term `scientifically based research'--
       ``(A) means the application of rigorous, systematic, and 
     objective procedures; and
       ``(B) shall include research that--
       ``(i) employs systematic, empirical methods that draw on 
     observation or experiment;
       ``(ii) involves rigorous data analyses that are adequate to 
     test stated hypotheses and justify the general conclusions 
     drawn;
       ``(iii) relies on measurements or observational methods 
     that provide valid data across evaluators and observers and 
     across multiple measurements and observations; and
       ``(iv) has been accepted by a journal that uses peer review 
     or approved by a panel of independent experts through a 
     comparably rigorous, objective, and scientific review.''

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

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

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

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

     ``SEC. 2001. PURPOSE.

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

     ``SEC. 2002. DEFINITIONS.

       ``In this title:
       ``(1) Charter school.--The term `charter school' has the 
     meaning given the term in section 4210.
       ``(2) Core academic subject.--The term `core academic 
     subject', used with respect to a State, means English 
     language arts, mathematics, science, and any other academic 
     subject that the State determines is a core academic subject.
       ``(3) Fully qualified.--The term `fully qualified' means--
       ``(A) in the case of an elementary school teacher (other 
     than a teacher teaching in a public charter school or a 
     middle school teacher), a teacher who, at a minimum--
       ``(i) has obtained State certification (which may include 
     certification obtained through alternative means), or a State 
     license, to teach in the State in which the teacher teaches;
       ``(ii) holds a bachelor's degree from an institution of 
     higher education; and
       ``(iii) demonstrates the subject matter knowledge, teaching 
     knowledge, and teaching skills required to teach effectively 
     reading, writing, mathematics, science, social studies, and 
     other elements of a liberal arts education;
       ``(B) in the case of a middle school or secondary school 
     teacher (other than a teacher teaching in a public charter 
     school), a teacher who, at a minimum--
       ``(i) has obtained State certification (which may include 
     certification obtained through alternative means), or a State 
     license, to teach in the State in which the teacher teaches;
       ``(ii) holds a bachelor's degree from an institution of 
     higher education; and
       ``(iii) demonstrates a high level of competence in all 
     academic subjects in which the teacher teaches through--

       ``(I) completion of an academic major (or courses totaling 
     an equivalent number of credit hours) in each of the academic 
     subjects in which the teacher teaches;
       ``(II) in the case of a teacher who is a mid-career 
     professional entering the teaching profession, achievement 
     of--

       ``(aa) a high level of performance in other professional 
     employment experience relevant to the core academic subjects 
     that the teacher teaches; and
       ``(bb) achievement of a level of performance described in 
     subclause (III); or

       ``(III) achievement of a high level of performance on 
     rigorous academic subject area tests administered by the 
     State in which the teacher teaches; and

       ``(C) in the case of a teacher teaching in a public charter 
     school--
       ``(i) meets the requirements of State law, if any, relating 
     to certification or licensing to teach in the State in a 
     charter school;
       ``(ii) meets the requirements of State law, if any, 
     regarding holding a degree from an institution of higher 
     education to teach in a charter school; and
       ``(iii)(I) in the case of an elementary school teacher 
     (other than a middle school teacher), demonstrates the 
     knowledge and skills described in subparagraph (A)(iii); or
       ``(II) in the case of a middle school or secondary school 
     teacher, demonstrates a high level of competence as described 
     in subparagraph (B)(iii).
       ``(4) Institution of higher education.--The term 
     `institution of higher education' means an institution of 
     higher education, as defined in section 101 of the Higher 
     Education Act of 1965, that--
       ``(A) has not been identified as low-performing under 
     section 208 of the Higher Education Act of 1965; and
       ``(B) is in full compliance with the public reporting 
     requirements described in section 207 of the Higher Education 
     Act of 1965.
       ``(5) Low-performing student.--The term `low-performing 
     student' means a student who, based on multiple measures, 
     performs at or below a State's basic level of performance for 
     the student's grade level, as described in the State student 
     performance standards described in section 1111(b)(1).
       ``(6) Outlying area.--The term `outlying area' means the 
     United States Virgin Islands, Guam, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands.
       ``(7) Poverty line.--The term `poverty line' means the 
     income official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Community Services Block Grant 
     Act) applicable to a family of the size involved, for the 
     most recent year for which satisfactory data are available.
       ``(8) School-age population.--The term `school-age 
     population' means the population aged 5 through 17, as 
     determined on the basis of the most recent satisfactory data.
       ``(9) Scientifically based research.--The term 
     `scientifically based research' has the meaning given the 
     term in section 1705.
       ``(10) State.--The term `State' means each of the several 
     States in the United States, the District of Columbia, and 
     the Commonwealth of Puerto Rico.
       ``(11) State educational agency.--The term `State 
     educational agency' means the entity or agency designated 
     under the laws of a State as responsible for teacher 
     certification or licensing in the State.

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

     ``SEC. 2101. PROGRAM AUTHORIZED.

       ``(a) Grants Authorized.--The Secretary shall award a 
     grant, from an allotment made under subsection (b), to each 
     State educational agency having a State plan approved under 
     section 2103, to enable the State educational agency to raise 
     the quality of, and provide professional development 
     opportunities for, public elementary school and secondary 
     school teachers, principals, and administrators.
       ``(b) Reservations and Allotments.--
       ``(1) Reservations.--From the amount appropriated under 
     section 2114 to carry out this part for each fiscal year, the 
     Secretary shall reserve--
       ``(A) \1/2\ of 1 percent of such amount for payments to the 
     Bureau of Indian Affairs for activities, approved by the 
     Secretary, consistent with this part;
       ``(B) \1/2\ of 1 percent of such amount for payments to 
     outlying areas, to be allotted in accordance with their 
     respective needs for assistance under this part as determined 
     by the Secretary, for activities, approved by the Secretary, 
     consistent with this part; and
       ``(C) such sums as may be necessary to continue to support 
     any multiyear partnership program award made under part A, C, 
     or D (as such part was in effect on the day before the date 
     of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act) until the termination of 
     the multiyear award.
       ``(2) State allotments.--From the amount appropriated under 
     section 2114 for a fiscal year and remaining after the 
     Secretary makes reservations under paragraph (1), the 
     Secretary shall allot to each State having a State plan 
     approved under section 2103 the sum of--
       ``(A) an amount that bears the same relationship to 50 
     percent of the remainder as the school-age population from 
     families with incomes below the poverty line in the State 
     bears to the school-age population from families with incomes 
     below the poverty line in all States; and
       ``(B) an amount that bears the same relationship to 50 
     percent of the remainder as the school-age population in the 
     State bears to the school-age population in all States.
       ``(c) State Minimum.--For any fiscal year, no State shall 
     be allotted under this section an amount that is less than 
     \1/2\ of 1 percent of the total amount allotted to all States 
     under subsection (b)(2).
       ``(d) Hold-Harmless Amounts.--For fiscal year 2002, 
     notwithstanding subsection (b)(2), the amount allotted to 
     each State under subsection (b)(2) shall be not less than 100 
     percent of the total amount the State was allotted under part 
     B (as such part was in effect on the day before the date of 
     enactment of

[[Page 1737]]

     the Public Education Reinvestment, Reinvention, and 
     Responsibility Act) for fiscal year 2001.
       ``(e) Ratable Reductions.--If the sums made available under 
     subsection (b)(2) for any fiscal year are insufficient to pay 
     the full amounts that all States are eligible to receive 
     under subsection (d) for such year, the Secretary shall 
     ratably reduce such amounts for such year.

     ``SEC. 2102. WITHIN-STATE ALLOCATION.

       ``(a) In General.--Each State educational agency for a 
     State receiving a grant under section 2101(a) shall--
       ``(1) set aside 15 percent of the grant funds to award 
     educator partnership grants under section 2113;
       ``(2) set aside not more than 5 percent of the grant funds 
     to carry out activities described in the State plan submitted 
     under section 2103; and
       ``(3) using the remaining 80 percent of the grant funds, 
     make subgrants by allocating to each local educational agency 
     in the State the sum of--
       ``(A) an amount that bears the same relationship to 60 
     percent of the remainder as the school-age population from 
     families with incomes below the poverty line in the area 
     served by the local educational agency bears to the school-
     age population from families with incomes below the poverty 
     line in the area served by all local educational agencies in 
     the State; and
       ``(B) an amount that bears the same relationship to 40 
     percent of the remainder as the school-age population in the 
     area served by the local educational agency bears to the 
     school-age population in the area served by all local 
     educational agencies in the State.
       ``(b) Hold-Harmless Amounts.--
       ``(1) Fiscal year 2002.--For fiscal year 2002, 
     notwithstanding subsection (a), the amount allocated to each 
     local educational agency under this section shall be not less 
     than 100 percent of the total amount the local educational 
     agency was allocated under part B (as such part was in effect 
     on the day before the date of enactment of the Public 
     Education Reinvestment, Reinvention, and Responsibility Act) 
     for fiscal year 2001.
       ``(2) Fiscal year 2003.--For fiscal year 2003, 
     notwithstanding subsection (a), the amount allocated to each 
     local educational agency under this section shall be not less 
     than 85 percent of the amount allocated to the local 
     educational agency under this section for fiscal year 2002.
       ``(3) Fiscal years 2004-2006.--For each of fiscal years 
     2004 through 2006, notwithstanding subsection (a), the amount 
     allocated to each local educational agency under this section 
     shall be not less than 70 percent of the amount allocated to 
     the local educational agency under this section for the 
     previous fiscal year.
       ``(c) Ratable Reductions.--If the sums made available under 
     subsection (a)(3) for any fiscal year are insufficient to pay 
     the full amounts that all local educational agencies are 
     eligible to receive under subsection (b) for such year, the 
     State educational agency shall ratably reduce such amounts 
     for such year.

     ``SEC. 2103. STATE PLANS.

       ``(a) Plan Required.--
       ``(1) Comprehensive state plan.--The State educational 
     agency shall submit a State plan to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require. If the State educational agency (as 
     defined in section 8101) is not the entity or agency 
     designated under the laws of the State as responsible for 
     teacher certification or licensing in the State, then the 
     plan shall be developed in consultation with the State 
     educational agency. The entity or agency shall provide annual 
     evidence of such consultation to the Secretary.
       ``(2) Consolidated plan.--A State plan submitted under 
     paragraph (1) may be submitted as part of a consolidated plan 
     under section 8302.
       ``(b) Contents.--Each plan submitted under subsection (a) 
     shall--
       ``(1) describe how the State educational agency is taking 
     reasonable steps to--
       ``(A) reform teacher certification, recertification, or 
     licensure requirements to ensure that--
       ``(i) teachers have the necessary subject matter knowledge, 
     teaching knowledge, and teaching skills in the academic 
     subjects that the teachers teach;
       ``(ii) such requirements are aligned with the challenging 
     State content standards;
       ``(iii) teachers have the knowledge and skills necessary to 
     help students meet the challenging State student performance 
     standards;
       ``(iv) such requirements take into account the need, as 
     determined by the State educational agency, for greater 
     access to, and participation in, the teaching profession by 
     individuals from historically underrepresented groups; and
       ``(v) teachers have the necessary technological skills to 
     integrate technology more effectively in the teaching of 
     content required by State and local standards in all academic 
     subjects that the teachers teach;
       ``(B) develop and implement rigorous testing procedures for 
     teachers, as described in subparagraphs (A)(iii) and 
     (B)(iii)(IV) of section 2002(3), to ensure that the teachers 
     have the subject matter knowledge, teaching knowledge, and 
     teaching skills necessary to teach effectively the content 
     required by State and local standards in the academic 
     subjects that the teachers teach;
       ``(C) establish, expand, or improve alternative routes to 
     State certification of teachers, especially in the areas of 
     mathematics and science, for highly qualified individuals 
     with a baccalaureate degree, including mid-career 
     professionals from other occupations, paraprofessionals, 
     former military personnel, and recent college or university 
     graduates who have records of academic distinction and who 
     demonstrate the potential to become highly effective 
     teachers;
       ``(D) reduce emergency teacher certification;
       ``(E) develop and implement effective programs, and provide 
     financial assistance, to assist local educational agencies, 
     elementary schools, and secondary schools in effectively 
     recruiting and retaining fully qualified teachers and 
     principals, particularly in schools that have the lowest 
     proportion of fully qualified teachers or the highest 
     proportion of low-performing students;
       ``(F) provide professional development programs that meet 
     the requirements described in section 2109;
       ``(G) provide programs that are designed to assist new 
     teachers during their first 3 years of teaching, such as 
     mentoring programs that--
       ``(i) provide mentoring to new teachers from veteran 
     teachers with expertise in the same academic subject as the 
     new teachers are teaching;
       ``(ii) provide mentors time for activities such as 
     coaching, observing, and assisting teachers who are being 
     mentored; and
       ``(iii) use standards or assessments that are consistent 
     with the State's student performance standards and the 
     requirements for professional development activities 
     described in section 2109 in order to guide the new teachers;
       ``(H) provide technical assistance to local educational 
     agencies in developing and implementing activities described 
     in section 2108; and
       ``(I) ensure that programs in core academic subjects, 
     particularly in mathematics and science, will take into 
     account the need for greater access to, and participation in, 
     such core academic subjects by students from historically 
     underrepresented groups, including females, minorities, 
     individuals with limited English proficiency, the 
     economically disadvantaged, and individuals with 
     disabilities, by incorporating pedagogical strategies and 
     techniques that meet such students' educational needs;
       ``(2) describe the activities for which assistance is 
     sought under the grant, and how such activities will improve 
     students' academic achievement and close academic achievement 
     gaps of economically disadvantaged, minority, and limited 
     English proficient students;
       ``(3) describe how the State educational agency will 
     establish annual numerical performance objectives under 
     section 2104 for improving the qualifications of teachers and 
     the professional development of teachers, principals, and 
     administrators;
       ``(4) contain an assurance that the State educational 
     agency consulted with local educational agencies, education-
     related community groups, nonprofit organizations, parents, 
     teachers, school administrators, local school boards, 
     institutions of higher education in the State, and content 
     specialists in establishing the performance objectives 
     described in section 2104;
       ``(5) describe how the State educational agency will hold 
     local educational agencies, elementary schools, and secondary 
     schools accountable for meeting the performance objectives 
     described in section 2104 and for reporting annually on the 
     local educational agencies' and schools' progress in meeting 
     the performance objectives;
       ``(6) describe how the State educational agency will ensure 
     that a local educational agency receiving a subgrant under 
     section 2102 will comply with the requirements of this part;
       ``(7) provide an assurance that the State educational 
     agency will require each local educational agency, elementary 
     school, or secondary school receiving funds under this part 
     to report publicly the local educational agency's or school's 
     annual progress with respect to the performance objectives 
     described in section 2104; and
       ``(8) describe how the State educational agency will 
     coordinate professional development activities provided under 
     the program carried out under this part with professional 
     development activities provided under other Federal, State, 
     and local programs, including programs authorized under 
     titles I and III and, where appropriate, the Individuals with 
     Disabilities Education Act and the Carl D. Perkins Vocational 
     and Technical Education Act of 1998.
       ``(c) Secretary Approval.--The Secretary, after using a 
     peer review process, shall approve a State plan if the plan 
     meets the requirements of this section.
       ``(d) Duration of the Plan.--
       ``(1) In general.--Each State plan shall--
       ``(A) remain in effect for the duration of the State 
     educational agency's participation under this part; and

[[Page 1738]]

       ``(B) be periodically reviewed and revised by the State 
     educational agency, as necessary, to reflect changes to the 
     agency's strategies and programs carried out under this part.
       ``(2) Additional information.--If a State educational 
     agency receiving a grant under this part makes significant 
     changes to the State plan, such as the adoption of new 
     performance objectives, the agency shall submit information 
     regarding the significant changes to the Secretary.

     ``SEC. 2104. STATE PERFORMANCE OBJECTIVES.

       ``(a) In General.--Each State educational agency receiving 
     a grant under this part shall establish annual numerical 
     performance objectives with respect to progress in improving 
     the qualifications of teachers and the professional 
     development of teachers, principals, and administrators. For 
     each annual numerical performance objective established, the 
     agency shall specify an incremental percentage increase for 
     the objective to be attained for each fiscal year (after the 
     first fiscal year) for which the agency receives a grant 
     under this part, relative to the preceding fiscal year.
       ``(b) Required Objectives.--At a minimum, the annual 
     numerical performance objectives described in subsection (a) 
     shall include an incremental increase in the percentage of--
       ``(1) classes in core academic subjects that are being 
     taught by fully qualified teachers;
       ``(2) new teachers and principals receiving professional 
     development support, including mentoring during the teachers' 
     and principals' first 3 years of employment as teachers and 
     principals, respectively;
       ``(3) teachers, principals, and administrators 
     participating in high quality professional development 
     programs that are consistent with section 2109; and
       ``(4) fully qualified teachers teaching in the State, to 
     ensure that all teachers teaching in such State are fully 
     qualified by December 31, 2006.
       ``(c) Requirement for Fully Qualified Teachers.--Each State 
     educational agency receiving a grant under this part shall 
     ensure that all public elementary school and secondary school 
     teachers in the State are fully qualified not later than 
     December 31, 2006.
       ``(d) Accountability.--
       ``(1) In general.--Each State educational agency receiving 
     a grant under this part shall be held accountable for--
       ``(A) meeting the State's annual numerical performance 
     objectives; and
       ``(B) meeting the reporting requirements described in 
     section 4401.
       ``(2) Sanctions.--Any State educational agency that fails 
     to meet the requirement described in paragraph (1)(A) shall 
     be subject to sanctions under section 7101.
       ``(e) Special Rule.--Notwithstanding any other provision of 
     law, the provisions of subsection (c) shall not supersede 
     State laws governing public charter schools.

     ``SEC. 2105. STATE OPTIONAL ACTIVITIES.

       ``(a) In General.--Each State educational agency receiving 
     a grant under section 2101(a) may use the grant funds 
     described in section 2102(a)(2)--
       ``(1) to develop and implement a system to measure the 
     effectiveness of specific professional development programs 
     and strategies;
       ``(2) to increase the portability of teacher pensions and 
     reciprocity of teaching certification or licensure among 
     States, except that no reciprocity agreement developed under 
     this section may lead to the weakening of any State teacher 
     certification or licensing requirement;
       ``(3) to develop or assist local educational agencies in 
     the development and utilization of proven, innovative 
     strategies to deliver intensive professional development 
     programs that are cost effective and easily accessible, such 
     as programs offered through the use of technology and 
     distance learning;
       ``(4) to provide assistance to local educational agencies 
     for the development and implementation of innovative 
     professional development programs that train teachers to use 
     technology to improve teaching and learning and that are 
     consistent with the requirements of section 2109;
       ``(5) to provide professional development to enable 
     teachers to ensure that female students, minority students, 
     limited English proficient students, students with 
     disabilities, and economically disadvantaged students have 
     the full opportunity to meet challenging State content and 
     performance standards in the core academic subjects;
       ``(6) to increase the number of persons who are women, 
     minorities, or individuals with disabilities, who teach in 
     the State, who are fully qualified, and who teach in core 
     academic subjects in which such persons are underrepresented;
       ``(7) to increase the number of highly qualified women, 
     minorities, and individuals from other underrepresented 
     groups who are involved in the administration of elementary 
     schools and secondary schools within the State; and
       ``(8) to create a statewide online leadership network for 
     principals to communicate with other principals in order to 
     share ideas and solve problems.
       ``(b) Coordination.--Each State that receives a grant under 
     this part and a grant under section 202 of the Higher 
     Education Act of 1965 shall coordinate the activities the 
     State carries out under such section 202 with the activities 
     the State educational agency carries out under this section.

     ``SEC. 2106. STATE ADMINISTRATIVE EXPENSES.

       ``Each State educational agency receiving a grant under 
     section 2101(a) may use not more than 5 percent of the amount 
     set aside in section 2102(a)(2) for a fiscal year for the 
     cost of--
       ``(1) planning and administering the activities described 
     in section 2103(b); and
       ``(2) administration relating to making subgrants to local 
     educational agencies under section 2102.

     ``SEC. 2107. LOCAL PLANS.

       ``(a) In General.--Each local educational agency desiring a 
     subgrant from the State educational agency under section 
     2102(a)(3) shall submit a local plan to the State educational 
     agency--
       ``(1) at such time, in such manner, and containing such 
     information as the State educational agency may require; and
       ``(2) that describes how the local educational agency will 
     coordinate the activities for which the agency seeks the 
     subgrant with other programs carried out under this Act, or 
     other Acts, as appropriate.
       ``(b) Local Plan Contents.--The local plan described in 
     subsection (a) shall, at a minimum--
       ``(1) describe how the local educational agency will use 
     the subgrant funds to meet the State performance objectives 
     for teacher qualifications and professional development 
     described in section 2104;
       ``(2) describe how the local educational agency will hold 
     elementary schools and secondary schools accountable for 
     meeting the requirements described in this part;
       ``(3) contain an assurance that the local educational 
     agency will target funds to the elementary schools and 
     secondary schools served by the local educational agency 
     that--
       ``(A) have the lowest proportion of fully qualified 
     teachers; and
       ``(B) are identified for school improvement and corrective 
     action under section 1116;
       ``(4) describe how the local educational agency will 
     coordinate professional development activities authorized 
     under section 2108(a) with professional development 
     activities provided through other Federal, State, and local 
     programs, including those authorized under titles I and III 
     and, where applicable, the Individuals with Disabilities 
     Education Act and the Carl D. Perkins Vocational and 
     Technical Education Act of 1998; and
       ``(5) describe how the local educational agency has 
     collaborated with teachers, principals, parents, and 
     administrators in the preparation of the local plan.

     ``SEC. 2108. LOCAL ACTIVITIES.

       ``(a) In General.--Each local educational agency receiving 
     a subgrant under section 2102(a)(3) shall use the subgrant 
     funds to--
       ``(1) support professional development activities, for--
       ``(A) teachers, in at least the areas of reading, 
     mathematics, and science; and
       ``(B) teachers, principals, and administrators in order to 
     provide such individuals with the knowledge and skills to 
     provide all students, including female students, minority 
     students, limited English proficient students, students with 
     disabilities, and economically disadvantaged students, with 
     the opportunity to meet challenging State content and student 
     performance standards;
       ``(2) provide professional development to teachers, 
     principals, and administrators to enhance the use of 
     technology within elementary schools and secondary schools in 
     order to deliver more effective curriculum instruction;
       ``(3) recruit and retain fully qualified teachers and 
     highly qualified principals, particularly for elementary 
     schools and secondary schools located in areas with high 
     percentages of low-performing students and students from 
     families with incomes below the poverty line;
       ``(4) recruit and retain fully qualified teachers and 
     highly qualified principals to serve in the elementary 
     schools and secondary schools with the highest percentages of 
     low-performing students, through activities such as--
       ``(A) mentoring programs for newly hired teachers, 
     including programs provided by master teachers, and for newly 
     hired principals; and
       ``(B) programs that provide other incentives, including 
     financial incentives, to retain--
       ``(i) teachers who have a record of success in helping low-
     performing students improve those students' academic success; 
     and
       ``(ii) principals who have a record of improving the 
     performance of all students, or significantly narrowing the 
     gaps between minority students and nonminority students, and 
     economically disadvantaged students and noneconomically 
     disadvantaged students, within the elementary schools or 
     secondary schools served by the principals;
       ``(5) provide professional development that incorporates 
     effective strategies, techniques, methods, and practices for 
     meeting the educational needs of diverse groups of students, 
     including female students, minority students, students with 
     disabilities, limited English proficient students, and 
     economically disadvantaged students; and

[[Page 1739]]

       ``(6) provide professional development for mental health 
     professionals, including school psychologists, school 
     counselors, and school social workers, that is focused on 
     enhancing the skills and knowledge of such individuals so 
     that the individuals may help students exhibiting distress 
     (through conduct such as substance abuse, disruptive 
     behavior, and suicidal behavior) meet the challenging State 
     student performance standards.
       ``(b) Optional Activities.--Each local educational agency 
     receiving a subgrant under section 2102(a)(3) may use the 
     subgrant funds--
       ``(1) to provide a signing bonus or other financial 
     incentive, such as differential pay, for--
       ``(A) a fully qualified teacher to teach in an academic 
     subject for which there exists a shortage of fully qualified 
     teachers within the elementary school or secondary school in 
     which the teacher teaches or within the elementary schools 
     and secondary schools served by the local educational agency;
       ``(B) a fully qualified teacher or a highly qualified 
     principal in a school in which there is--
       ``(i) a large percentage of students from economically 
     disadvantaged families; or
       ``(ii) a high percentage of low-performing students; or
       ``(C) a teacher who has met the National Education 
     Technology Standards, as developed by the Department of 
     Education and the International Society for Technology in 
     Education, or has obtained an information technology 
     certification that is directly related to the curriculum or 
     subject area that the teacher teaches;
       ``(2) to establish programs that--
       ``(A) recruit professionals into teaching from other fields 
     and provide such professionals with alternative routes to 
     teacher certification, especially in the areas of 
     mathematics, science, and English language arts; and
       ``(B) provide increased teaching and administration 
     opportunities for fully qualified females, minorities, 
     individuals with disabilities, and other individuals 
     underrepresented in the teaching or school administration 
     professions; and
       ``(3) to establish programs and activities that are 
     designed to improve the quality of the teacher and principal 
     force, such as innovative professional development programs 
     (which may be provided through partnerships, including 
     partnerships with institutions of higher education), and 
     including programs that--
       ``(A) train teachers and principals to utilize technology 
     to improve teaching and learning;
       ``(B) develop principals by helping schools identify school 
     leaders and invest in their professional development; and
       ``(C) are provided in a manner consistent with the 
     requirements of section 2019;
       ``(4) to provide collaboratively designed performance pay 
     systems for teachers and principals that encourage teachers 
     and principals to work together to raise student performance;
       ``(5) to establish professional development programs that 
     provide instruction in how to teach students with different 
     learning styles, particularly students with disabilities and 
     students with special learning needs (including students who 
     are gifted and talented);
       ``(6) to establish professional development programs that 
     provide instruction in how best to discipline students in the 
     classroom, and to identify early and appropriate 
     interventions to help students described in paragraph (5) 
     learn;
       ``(7) to provide professional development programs that 
     provide instruction in how to teach character education in a 
     manner that--
       ``(A) reflects the values of parents, teachers, and local 
     communities; and
       ``(B) incorporates elements of good character, including 
     honesty, citizenship, courage, justice, respect, personal 
     responsibility, and trustworthiness;
       ``(8) to provide scholarships or other incentives to assist 
     teachers in attaining national board certification;
       ``(9) to support activities designed to provide effective 
     professional development for teachers of limited English 
     proficient students;
       ``(10) to establish other activities designed--
       ``(A) to improve professional development for teachers, 
     principals, and administrators; and
       ``(B) to recruit and retain fully qualified teachers and 
     highly qualified principals;
       ``(11) to establish master teacher programs to increase 
     teacher salaries and employee benefits for teachers who enter 
     into contracts with the local educational agency to serve as 
     master teachers in the public schools, in accordance with the 
     requirements of subsection (c); and
       ``(12) to carry out professional development activities 
     that consist of--
       ``(A) instruction in the use of data and assessments to 
     provide information and instruction for classroom practice;
       ``(B) instruction in ways that teachers, principals, pupil 
     services personnel, and school administrators may work more 
     effectively with parents;
       ``(C) the formation of partnerships with institutions of 
     higher education to establish school-based teacher training 
     programs that provide prospective teachers and new teachers 
     with an opportunity to work under the guidance of experienced 
     teachers and college faculty;
       ``(D) the creation of career ladder programs for 
     paraprofessionals, who are assisting teachers under this 
     part, to obtain the education necessary for such 
     paraprofessionals to become certified and licensed teachers;
       ``(E) instruction in ways to teach special needs students;
       ``(F) joint professional development activities involving 
     teachers, principals, and administrators eligible to 
     participate in programs under this part, and personnel from 
     Head Start programs, Even Start programs, or State preschool 
     programs;
       ``(G) instruction in experiential-based teaching methods 
     such as service-learning or applied learning; and
       ``(H) mentoring programs focusing on changing teacher 
     behaviors and practices--
       ``(i) to help new teachers, including teachers who are 
     members of a minority group, develop and gain confidence in 
     their skills;
       ``(ii) to increase the likelihood that the new teachers 
     will continue in the teaching profession; and
       ``(iii) to improve the quality of their teaching.
       ``(c) Requirements for Master Teacher Programs.--
       ``(1) Definition.--In this subsection, the term `master 
     teacher' means a teacher who--
       ``(A) is certified or licensed under State law;
       ``(B) has been teaching for at least 5 years in a public or 
     private school or institution of higher education;
       ``(C) is selected to serve as a master teacher on the basis 
     of an application and recommendations by administrators and 
     other teachers;
       ``(D) at the time of submission of such application, is 
     teaching in a public school;
       ``(E) assists other teachers in improving instructional 
     strategies, improves the skills of other teachers, performs 
     mentoring, develops curricula, and provides other 
     professional development; and
       ``(F) enters into a contract with the local educational 
     agency involved to continue to teach and serve as a master 
     teacher for at least 5 years.
       ``(2) Requirements for master teacher contracts.--
       ``(A) In general.--A local educational agency that 
     establishes a master teacher program under subsection (b)(11) 
     shall negotiate the terms of contracts of master teachers 
     with the local labor organizations that represent teachers in 
     the school district served by that agency.
       ``(B) Breach.--A contract with a master teacher entered 
     into under this paragraph shall specify that a breach of the 
     contract shall be deemed to have occurred if the master 
     teacher voluntarily withdraws from the program, terminates 
     the contract, or is dismissed by the local educational agency 
     for nonperformance of duties, subject to the requirements of 
     any statutory or negotiated due process procedures that may 
     apply.
       ``(C) Repayment.--The contract shall require, in the event 
     of a breach of the contract described in subparagraph (B), 
     that the teacher repay the local educational agency all funds 
     provided to the teacher under the contract.
       ``(d) Requirements.--Professional development provided 
     under this section shall be provided in a manner consistent 
     with section 2109.

     ``SEC. 2109. PROFESSIONAL DEVELOPMENT FOR TEACHERS.

       ``(a) Limitation Relating to Curricula and Academic 
     Subjects.--In deciding how to use subgrant funds allocated 
     under section 2102(a)(3) to support a professional 
     development activities for teachers, a local educational 
     agency shall first use the funds to support activities that--
       ``(1) are directly related to the curricula and academic 
     subjects that the teachers teach; or
       ``(2) are designed to enhance the ability of the teachers 
     to understand and use the State's challenging content 
     standards for the academic subjects that the teachers teach; 
     or
       ``(3) provide instruction in methods of disciplining 
     students.
       ``(b) Professional Development Activity.--A professional 
     development activity carried out under this part shall--
       ``(1) be measured, in terms of progress described in 
     section 2104(a), using the specific performance objectives 
     established by the State educational agency in accordance 
     with section 2104;
       ``(2) be tied to challenging State or local content 
     standards and student performance standards;
       ``(3) be tied to scientifically based research 
     demonstrating the effectiveness of such activity in 
     increasing student achievement or substantially increasing 
     the subject matter knowledge, teaching knowledge, and 
     teaching skills of teachers;
       ``(4) be of sufficient intensity and duration (not to 
     include such activities as 1-day or short-term workshops and 
     conferences) to have a positive and lasting impact on 
     teachers' performance in the classroom, except

[[Page 1740]]

     that this paragraph shall not apply to an activity that is 1 
     component described in a long-term comprehensive professional 
     development plan--
       ``(A) established by a teacher and the teacher's 
     supervisor; and
       ``(B) based on an assessment of the needs of the teacher, 
     the teacher's students, and the local educational agency 
     involved;
       ``(5) be developed with extensive participation of 
     teachers, principals, parents, administrators, and local 
     school boards of elementary schools and secondary schools to 
     be served under this part, and institutions of higher 
     education in the State involved, and, with respect to any 
     professional development program described in paragraph (6) 
     or (7) of section 2108(b), shall, if applicable, be developed 
     with extensive coordination with, and participation of, 
     professionals with expertise in such type of professional 
     development;
       ``(6) to the extent appropriate, provide training for 
     teachers regarding using technology and applying technology 
     effectively in the classroom, to improve teaching and 
     learning concerning the curricula and academic subjects that 
     the teachers teach; and
       ``(7) be directly related to the academic subjects that the 
     teachers teach and the State content standards.
       ``(c) Accountability.--
       ``(1) In general.--A State educational agency shall notify 
     a local educational agency that the local educational agency 
     may be subject to the action described in paragraph (3) if, 
     after any fiscal year, the State educational agency 
     determines that the programs or activities funded by the 
     agency under this part fail to meet the requirements of 
     subsections (a) and (b).
       ``(2) Technical assistance.--A local educational agency 
     that has received notification pursuant to paragraph (1) may 
     request technical assistance from the State educational 
     agency and an opportunity for such local educational agency 
     to comply with the requirements of subsections (a) and (b).
       ``(3) State educational agency action.--If a State 
     educational agency determines that a local educational agency 
     failed to carry out the local educational agency's 
     responsibilities under subsections (a) and (b), the State 
     educational agency shall take such action as the agency 
     determines to be necessary, consistent with this section, to 
     provide, or direct the local educational agency to provide, 
     high-quality professional development for teachers, 
     principals, and administrators.

     ``SEC. 2110. PARENTS' RIGHT TO KNOW.

       ``Each local educational agency receiving a subgrant under 
     section 2102(a)(3) shall meet the reporting requirements with 
     respect to teacher qualifications described in section 
     4401(f).

     ``SEC. 2111. LOCAL ADMINISTRATIVE EXPENSES.

       ``Each local educational agency receiving a subgrant under 
     section 2102(a)(3) may use not more than 1.5 percent of the 
     subgrant funds for a fiscal year for the cost of 
     administering activities under this part.

     ``SEC. 2112. GENERAL ACCOUNTING OFFICE STUDY.

       ``Not later than September 30, 2005, the Comptroller 
     General of the United States shall prepare and submit to the 
     Committee on Education and the Workforce of the House of 
     Representatives and the Committee on Health, Education, 
     Labor, and Pensions of the Senate a report setting forth 
     information regarding--
       ``(1) the progress of States' in achieving compliance 
     concerning increasing the percentage of fully qualified 
     teacher, for fiscal years 2002 through 2004;
       ``(2) any obstacles to achieving that compliance; and
       ``(3) the approximate percentage of Federal, State, and 
     local resources being expended to carry out activities to 
     attract and retain fully qualified teachers, especially in 
     geographic areas and core academic subjects in which a 
     shortage of such teachers exists.

     ``SEC. 2113. EDUCATOR PARTNERSHIP GRANTS.

       ``(a) Subgrants.--
       ``(1) In general.--A State educational agency receiving a 
     grant under section 2101(a) shall award subgrants, on a 
     competitive basis, from amounts made available under section 
     2102(a)(1), to local educational agencies, elementary 
     schools, and secondary schools, that have formed educator 
     partnerships, for the design and implementation of programs 
     that will enhance professional development opportunities for 
     teachers, principals, and administrators, and will increase 
     the number of fully qualified teachers.
       ``(2) Allocations.--A State educational agency awarding 
     subgrants under this subsection shall allocate the subgrant 
     funds on a competitive basis and in a manner that results in 
     an equitable distribution of the subgrant funds by geographic 
     areas within the State.
       ``(b) Educator Partnerships.--An educator partnership 
     described in subsection (a) shall be a coalition established 
     by a cooperative arrangement between--
       ``(1) a public elementary school or secondary school 
     (including a charter school), or a local educational agency; 
     and
       ``(2) 1 or more of the following:
       ``(A) An institution of higher education.
       ``(B) An educational service agency.
       ``(C) A public or private not-for-profit education 
     organization.
       ``(D) A for-profit education organization.
       ``(E) An entity from outside the traditional education 
     arena, including a corporation or consulting firm.
       ``(c) Use of Funds.--An educator partnership receiving a 
     subgrant under this section shall use the subgrant funds for 
     1 or more activities consisting of--
       ``(1) developing and enhancing professional development 
     activities for teachers in core academic subjects to ensure 
     that the teachers have subject matter knowledge in the 
     academic subjects that the teachers teach;
       ``(2) developing and enhancing professional development 
     activities for mathematics and science teachers to ensure 
     that such teachers have the subject matter knowledge to teach 
     mathematics and science;
       ``(3) developing and providing assistance to local 
     educational agencies and elementary schools and secondary 
     schools for sustained, high-quality professional development 
     activities for teachers, principals, and administrators, 
     that--
       ``(A) ensure that teachers, principals, and administrators 
     are able to use State content standards, performance 
     standards, and assessments to improve instructional practices 
     and student achievement; and
       ``(B) may include intensive programs designed to prepare a 
     teacher who participates in such a program to provide 
     professional development instruction to other teachers within 
     the participating teacher's school;
       ``(4) increasing the number of fully qualified teachers 
     available to provide high-quality education to limited 
     English proficient students by--
       ``(A) working with institutions of higher education that 
     offer degree programs, to attract more people into such 
     programs, and to prepare better new teachers who are English 
     language teachers to provide effective language instruction 
     to limited English proficient students; and
       ``(B) supporting development and implementation of 
     professional development programs for language instruction 
     teachers to improve the language proficiency of limited 
     English proficient students;
       ``(5) developing and implementing professional development 
     activities for principals and administrators to enable the 
     principals and administrators to be effective school leaders 
     and to improve student achievement on challenging State 
     content and student performance standards, including 
     professional development relating to--
       ``(A) leadership skills;
       ``(B) recruitment, assignment, retention, and evaluation of 
     teachers and other staff;
       ``(C) effective instructional practices, including the use 
     of technology; and
       ``(D) parental and community involvement; and
       ``(6) providing activities that enhance professional 
     development opportunities for teachers, principals, and 
     administrators or will increase the number of fully qualified 
     teachers.
       ``(d) Application Required.--Each educator partnership 
     desiring a subgrant under this section shall submit an 
     application to the appropriate State educational agency at 
     such time, in such manner, and containing such information as 
     the State educational agency may reasonably require.
       ``(e) Administrative Expenses.--Each educator partnership 
     receiving a subgrant under this section may use not more than 
     5 percent of the subgrant funds for a fiscal year for the 
     cost of planning and administering programs under this 
     section.
       ``(f) Coordination.--Each educator partnership that 
     receives a subgrant under this section and a grant under 
     section 203 of the Higher Education Act of 1965 shall 
     coordinate the activities carried out under such section 203 
     with any related activities carried out under this section.

     ``SEC. 2114. AUTHORIZATION OF APPROPRIATIONS.

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

                     ``PART B--CLASS SIZE REDUCTION

     ``SEC. 2201. FINDINGS.

       ``Congress makes the following findings:
       ``(1) Rigorous research has shown that, in the early 
     elementary school grades, students attending small classes 
     make more rapid educational gains than students in larger 
     classes, and that those gains persist through at least the 
     eighth grade.
       ``(2) The benefits of smaller classes are greatest for 
     lower-achieving, minority, poor, and inner-city children, as 
     demonstrated by a study that found that urban fourth graders 
     in smaller-than-average classes were \3/4\ of a school year 
     ahead of their counterparts in larger-than-average classes.
       ``(3) Teachers in small classes can provide students with 
     more individualized attention, spend more time on instruction 
     and less time on other tasks, and cover more material 
     effectively, and are better able to work with parents to 
     further their children's education, than teachers in large 
     classes.
       ``(4) Smaller classes allow teachers to identify and work 
     with students who have learning disabilities sooner than is 
     possible with larger classes, potentially reducing those 
     students' needs for special education services in the later 
     grades.
       ``(5) The National Research Council report, `Preventing 
     Reading Difficulties in Young

[[Page 1741]]

     Children', recommends reducing class sizes, accompanied by 
     providing high-quality professional development for teachers, 
     as a strategy for improving student achievement in reading.
       ``(6) Some research has shown that class size reduction 
     efforts are most effective in the early elementary school 
     grades.
       ``(7) Efforts to improve educational outcomes by reducing 
     class sizes in the early elementary school grades are likely 
     to be successful only if well-qualified teachers are hired to 
     fill additional classroom positions, and if teachers receive 
     intensive, ongoing professional development.
       ``(8) Several States and school districts have begun 
     serious efforts to reduce class sizes in the early elementary 
     school grades, but those efforts may be impeded by financial 
     limitations or difficulties in hiring highly qualified 
     teachers.
       ``(9) The Federal Government can assist in those efforts by 
     providing funding for class size reductions in grades 1 
     through 3, and by helping to ensure that both new and current 
     teachers who are moving into smaller classrooms are well 
     prepared.

     ``SEC. 2202. PURPOSES.

       ``The purposes of this part are--
       ``(1) to help States and local educational agencies to 
     reduce class sizes with fully qualified teachers;
       ``(2) to enable local educational agencies to carry out 
     effective approaches to reducing class sizes with fully 
     qualified teachers; and
       ``(3) to improve educational achievement for children in 
     regular classes and special needs children, and particularly 
     to improve that achievement by reducing class sizes in the 
     early elementary school grades.

     ``SEC. 2203. ALLOTMENTS TO STATES.

       ``(a) Reservations for the Outlying Areas and the Bureau of 
     Indian Affairs.--From the amount appropriated under section 
     2212 for any fiscal year, the Secretary shall reserve a total 
     of not more than 1 percent to make payments to--
       ``(1) outlying areas, to be allotted in accordance with 
     their respective needs for assistance under this part as 
     determined by the Secretary, for activities, approved by the 
     Secretary, consistent with this part; and
       ``(2) the Secretary of the Interior for activities approved 
     by the Secretary of Education, consistent with this part, in 
     schools operated or supported by the Bureau of Indian 
     Affairs, on the basis of their respective needs.
       ``(b) Allotments to States.--
       ``(1) In general.--
       ``(A) Fiscal year 2002.--From the amount appropriated under 
     section 2212 for fiscal year 2002 and remaining after the 
     Secretary makes reservations under subsection (a), the 
     Secretary shall make grants to State educational agencies by 
     allotting to each State having a State application approved 
     under section 2204(c) an amount that bears the same 
     relationship to the remainder as the greater of the amounts 
     that the State received for the preceding fiscal year under 
     sections 1122 and 2202(b) (as such sections were in effect on 
     the day before the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act) bears to 
     the total of the greater amounts that all States received 
     under such sections for fiscal year 2001.
       ``(B) Fiscal year 2003 and subsequent fiscal years.--From 
     the amount appropriated under section 2212 for fiscal year 
     2003 or a subsequent fiscal year and remaining after the 
     Secretary makes reservations under subsection (a), the 
     Secretary shall make grants to State educational agencies by 
     allotting to each State having a State application approved 
     under section 2204(c) an amount that bears the same 
     relationship to the remainder as the greater of the amounts 
     that the State received for the preceding fiscal year as 
     described in section 1122 and this section bears to the total 
     of the greater amounts that all States received under such 
     sections for the preceding fiscal year.
       ``(2) Reallotment.--If any State chooses not to participate 
     in the program carried out under this part, or fails to 
     submit an approvable application under this part, the 
     Secretary shall reallot the amount that such State would have 
     received under paragraph (1) to States having applications 
     approved under section 2204(c), in accordance with paragraph 
     (1).

     ``SEC. 2204. STATE APPLICATIONS.

       ``(a) Applications Required.--The State educational agency 
     for each State desiring a grant under this part shall submit 
     an application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       ``(b) Contents.--The application shall include--
       ``(1) a description of the State's goals for using funds 
     under this part to reduce average class sizes in regular 
     classrooms in grades 1 through 3, including a description of 
     class sizes in those classrooms, for each local educational 
     agency in the State (as of the date of submission of the 
     application);
       ``(2) a description of how the State educational agency 
     will allocate program funds made available through the grant 
     within the State;
       ``(3) a description of how the State educational agency 
     will use other funds, including other Federal funds, to 
     reduce class sizes and to improve teacher quality and reading 
     achievement within the State; and
       ``(4) an assurance that the State educational agency will 
     submit to the Secretary such reports and information as the 
     Secretary may reasonably require.
       ``(c) Approval of Applications.--The Secretary shall 
     approve a State application submitted under this section if 
     the application meets the requirements of this section and 
     holds reasonable promise of achieving the purposes of this 
     part.
       ``(d) Notification.--Not later than 30 days after the date 
     of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act, the Secretary shall 
     provide specific notification to each local educational 
     agency eligible to receive funds under this part regarding 
     the flexibility provided under section 2207(b)(2)(B) and the 
     ability to use such funds to carry out activities described 
     in section 2207(b)(1)(C).

     ``SEC. 2205. WITHIN-STATE ALLOCATIONS.

       ``(a) Allocations to Local Educational Agencies.--Each 
     State educational agency receiving a grant under this part 
     for a fiscal year--
       ``(1) may reserve not more than 1 percent of the grant 
     funds for the cost of administering this part; and
       ``(2) using the remaining funds, shall make subgrants by 
     allocating to each local educational agency in the State the 
     sum of--
       ``(A) an amount that bears the same relationship to 80 
     percent of the remainder as the school-age population from 
     families with incomes below the poverty line in the area 
     served by the local educational agency bears to the school-
     age population from families with incomes below the poverty 
     line in the area served by all local educational agencies in 
     the State; and
       ``(B) an amount that bears the same relationship to 20 
     percent of the remainder as the enrollment of the school-age 
     population in public and private nonprofit elementary schools 
     and secondary schools in the area served by the local 
     educational agency bears to the enrollment of the school-age 
     population in public and private nonprofit elementary schools 
     and secondary schools in the area served by all local 
     educational agencies in the State.
       ``(b) Reallocation.--If any local educational agency 
     chooses not to participate in the program carried out under 
     this part, or fails to submit an approvable application under 
     this part, the State educational agency shall reallocate the 
     amount such local educational agency would have received 
     under subsection (a) to local educational agencies having 
     applications approved under section 2206(b), in accordance 
     with subsection (a).

     ``SEC. 2206. LOCAL APPLICATIONS.

       ``(a) In General.--Each local educational agency desiring a 
     subgrant under section 2205(a) shall submit an application to 
     the appropriate State educational agency at such time, in 
     such manner, and containing such information as the State 
     educational agency may require, including a description of 
     the local educational agency's program to reduce class sizes 
     by hiring additional fully qualified teachers.
       ``(b) Approval of Applications.--The State educational 
     agency shall approve a local agency application submitted 
     under this section if the application meets the requirements 
     of this section and holds reasonable promise of achieving the 
     purposes of this part.

     ``SEC. 2207. USES OF FUNDS.

       ``(a) Administrative Expenses.--Each local educational 
     agency receiving a subgrant under section 2205(a) may use not 
     more than 3 percent of the subgrant funds for a fiscal year 
     for the cost of administering this part.
       ``(b) Local Activities.--
       ``(1) In general.--Each local educational agency receiving 
     a subgrant under section 2205(a) may use the subgrant funds 
     for--
       ``(A) recruiting (including recruiting through the use of 
     signing bonuses, and other financial incentives), hiring, and 
     training fully qualified regular and special education 
     teachers (which may include hiring special education teachers 
     to team-teach with regular teachers in classrooms that 
     contain both students with disabilities and other students) 
     and fully qualified teachers of special-needs students;
       ``(B) testing new teachers for subject matter knowledge and 
     satisfaction of State certification or licensing requirements 
     consistent with title II of the Higher Education Act of 1965; 
     and
       ``(C) providing professional development (which may include 
     such activities as the activities described in section 2108, 
     opportunities for teachers to attend multiweek institutes, 
     such as institutes offered during the summer months that 
     provide intensive professional development in partnership 
     with local educational agencies, and initiatives that promote 
     retention and mentoring) to teachers, including special 
     education teachers and teachers of special-needs students, in 
     order to meet the goal of ensuring that all teachers have the 
     necessary subject matter knowledge, teaching knowledge, and 
     teaching skills to teach effectively the academic subjects 
     that the teachers teach, consistent with title II of the 
     Higher Education Act of 1965.

[[Page 1742]]

       ``(2) Limitations.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a local educational agency may use not more than a total of 
     25 percent of the subgrant funds for activities described in 
     subparagraphs (B) and (C) of paragraph (1).
       ``(B) Exception.--
       ``(i) In general.--A local educational agency may use a 
     portion equal to more than 25 percent of the subgrant funds 
     for activities described in paragraph (1)(C) if 10 percent or 
     more of the teachers in elementary schools served by the 
     agency--

       ``(I) have not met applicable State and local certification 
     requirements (including certification through State or local 
     alternative routes); or
       ``(II) are teachers for whom the requirements have been 
     waived.

       ``(ii) Use of funds.--The local educational agency shall 
     use the portion referred to in clause (i)--

       ``(I) to help teachers who are not certified or licensed by 
     the State become certified or licensed, including 
     certification through State or local alternative routes; or
       ``(II) to help teachers affected by class size reduction 
     who lack sufficient subject matter knowledge to teach 
     effectively the academic subjects that the teachers teach, to 
     obtain that knowledge.

       ``(iii) Notification.--To be eligible to use the portion of 
     the funds described in clause (i) for objectives described in 
     this subparagraph, the local educational agency shall notify 
     the State educational agency of the percentage of the funds 
     that the local educational agency will use for those 
     objectives.
       ``(3) Additional uses.--
       ``(A) In general.--A local educational agency that has 
     already reduced class size in the early elementary school 
     grades to 18 or fewer students (or has already reduced class 
     size to a State or local class size reduction goal that was 
     in effect on the day before the date of enactment of the 
     Department of Education Appropriations Act, 2000, if that 
     State or local goal is 20 or fewer students) may use the 
     subgrant funds--
       ``(i) to make further class size reductions in kindergarten 
     or grade 1, 2, or 3;
       ``(ii) to reduce class size in other grades; or
       ``(iii) to carry out activities to improve teacher quality, 
     including professional development.
       ``(B) Professional development.--Even if a local 
     educational agency has already reduced class size in the 
     early elementary school grades to 18 or fewer students and 
     intends to use the subgrant funds to carry out activities to 
     improve teacher quality, including professional development 
     activities, the State educational agency shall make the 
     subgrant under section 2205 to the local educational agency.
       ``(c) Special Rule.--Notwithstanding subsection (b), if the 
     amount of the subgrant made to a local educational agency 
     under section 2205 is less than the starting salary for a new 
     fully qualified teacher teaching in a school served by that 
     agency, the agency may use the subgrant funds to--
       ``(1) help pay the salary of a full- or part-time teacher 
     hired to reduce class size, and may provide the funds in 
     combination with other Federal, State, or local funds; or
       ``(2) pay for activities described in subsection (b), which 
     may be related to teaching in smaller classes.

     ``SEC. 2208. PRIVATE SCHOOLS.

       ``If a local educational agency uses funds made available 
     under this part for professional development activities, the 
     local educational agency shall ensure the equitable 
     participation of private nonprofit elementary schools and 
     secondary schools in such activities. Section 8503(b)(1) 
     shall not apply to other activities carried out under this 
     part.

     ``SEC. 2209. TEACHER SALARIES AND BENEFITS.

       ``A local educational agency may use grant funds provided 
     under this part--
       ``(1) except as provided in paragraph (2), to increase the 
     salaries of, or provide benefits (other than participation in 
     professional development and enrichment programs) to, 
     teachers only if such teachers were hired under this part; 
     and
       ``(2) to pay the salaries of teachers hired with funds made 
     available under section 307 of the Department of Education 
     Appropriations Act, 1999 or under section 310 of the 
     Department of Education Appropriations Act, 2000, who not 
     later than the beginning of the 2002-2003 school year, are 
     fully qualified.

     ``SEC. 2210. STATE REPORT REQUIREMENTS.

       ``(a) Report on Activities.--A State educational agency 
     receiving funds under this part shall submit a report to the 
     Secretary providing information about the activities in the 
     State assisted under this part.
       ``(b) Report to Parents.--Each State educational agency or 
     local educational agency receiving funds under this part 
     shall publicly issue a report to parents of students who 
     attend schools assisted under this part describing--
       ``(1) the agency's progress in reducing class size;
       ``(2) the agency's progress in increasing the percentage of 
     classes in core academic areas that are taught by fully 
     qualified teachers; and
       ``(3) the impact, if any, that hiring additional fully 
     qualified teachers and reducing class size has had on 
     increasing student academic achievement in schools served by 
     the agency.
       ``(c) Professional Qualifications Report.--Upon the request 
     of a parent of a student attending a school receiving 
     assistance under this part, such school shall provide the 
     parent with information regarding the professional 
     qualifications of the student's teacher.

     ``SEC. 2211. SUPPLEMENT NOT SUPPLANT.

       ``Funds made available under this part shall be used to 
     supplement and not supplant State and local funds expended 
     for activities described in this part.

     ``SEC. 2212. AUTHORIZATION OF APPROPRIATIONS.

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

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

     SEC. 301. LANGUAGE MINORITY STUDENTS.

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

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

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

                  ``PART A--LANGUAGE MINORITY STUDENTS

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

       ``(a) Findings.--Congress makes the following findings:
       ``(1)(A) Educating limited English proficient students is 
     an urgent goal for many local educational agencies, but that 
     goal is not being achieved.
       ``(B) Each year, 640,000 limited English proficient 
     students are not served by any sort of program targeted to 
     the students' unique needs.
       ``(C) In 1998, only 15 percent of local educational 
     agencies that applied for related funding through enhancement 
     grants and comprehensive school grants received such funding.
       ``(2)(A) The school dropout rate for Hispanic students, the 
     largest group of limited English proficient students, is 
     approximately 29 percent, and is approximately 44 percent for 
     Hispanics born outside of the United States.
       ``(B) A Department of Education report regarding school 
     dropout rates states that language difficulty `may be a 
     barrier to participation in United States schools'.
       ``(C) Reading ability is a key predictor of graduation and 
     academic success.
       ``(3) Through fiscal year 2001, bilingual education 
     capacity and demonstration grants--
       ``(A) have spread funding too broadly to make an impact on 
     language instruction educational programs implemented by 
     State educational agencies and local educational agencies; 
     and
       ``(B) have lacked concrete performance measures.
       ``(4)(A) Since 1979, the number of limited English 
     proficient children in schools in the United States has 
     doubled to more than 3,000,000, and demographic trends 
     indicate the population of limited English proficient 
     children will continue to increase.
       ``(B) Language-minority students in the United States speak 
     virtually all world languages plus many that are indigenous 
     to the United States.
       ``(C) The rich linguistic diversity language-minority 
     students bring to classrooms in the United States enhances 
     the learning environment for all students and should be 
     valued for the significant, positive impact such diversity 
     has on the entire school environment.
       ``(D) Parent and community participation in educational 
     language programs for limited English proficient students 
     contributes to program effectiveness.
       ``(E) The Federal Government has a special and continuing 
     obligation, as reflected in title VI of the Civil Rights Act 
     of 1964 and section 204(f) of the Equal Educational 
     Opportunities Act of 1974, to ensure that States and local 
     educational agencies take appropriate action to provide equal 
     educational opportunities to limited English proficient 
     children and youth, and other children and youth.
       ``(F) The Federal Government also has a special and 
     continuing obligation to assist States and local educational 
     agencies, as exemplified by programs authorized under this 
     title, to develop the capacity to provide programs of 
     instruction that offer equal educational opportunities to 
     limited English proficient children and youth, and other 
     children and youth.
       ``(5) Limited English proficient children and youth face a 
     number of challenges in receiving an education that will 
     enable the children and youth to participate fully in 
     society, including--
       ``(A) disproportionate attendance at high-poverty schools, 
     as demonstrated by the fact that, in 1994, 75 percent of 
     limited English proficient students attended schools in which 
     at least half of all students were eligible for free or 
     reduced-price meals;

[[Page 1743]]

       ``(B) the limited ability of parents of such children and 
     youth to participate fully in the education of their children 
     because of the parents' own limited English proficiency;
       ``(C) a shortage of teachers and other staff who are 
     professionally trained and qualified to serve such children 
     and youth; and
       ``(D) lack of appropriate performance and assessment 
     standards that distinguish between language ability and 
     academic achievement so that State educational agencies and 
     local educational agencies are equally as accountable for the 
     achievement of limited English proficient students in 
     academic content while the students are acquiring English 
     language skills as the agencies are for enabling the students 
     to acquire those skills.
       ``(b) Policy.--It is the policy of the United States that 
     in order to ensure equal educational opportunity for all 
     children and youth, and to promote educational excellence, 
     the Federal Government should--
       ``(1) assist State educational agencies, local educational 
     agencies, and community-based organizations to build their 
     capacity to establish, implement, and sustain programs of 
     instruction and English language development for children and 
     youth of limited English proficiency;
       ``(2) hold State educational agencies and local educational 
     agencies accountable for increases in English proficiency and 
     core content knowledge among limited English proficient 
     students; and
       ``(3) promote parental and community participation in 
     limited English proficiency programs.
       ``(c)  Purposes.--The purposes of this part are--
       ``(1) to assist all limited English proficient students to 
     attain English proficiency;
       ``(2) to assist all limited English proficient students to 
     develop high levels of attainment in the core academic 
     subjects so that those students can meet the same challenging 
     State content standards and challenging State student 
     performance standards as all students are expected to meet, 
     as required by section 1111(b)(1);
       ``(3) to assist local educational agencies to develop and 
     enhance their capacity to provide high quality instruction in 
     teaching limited English proficient students to attain the 
     same high levels of academic achievement as other students; 
     and
       ``(4) to provide the assistance described in paragraphs 
     (1), (2), and (3) by--
       ``(A) streamlining language instruction educational 
     programs into a program carried out through a performance-
     based grant for State and local educational agencies to help 
     limited English proficient students become proficient in 
     English;
       ``(B) increasing significantly the amount of Federal 
     assistance provided to local educational agencies serving 
     such students while requiring that State educational agencies 
     and local educational agencies--
       ``(i) demonstrate improvements in the English proficiency 
     of such students each fiscal year; and
       ``(ii) make adequate yearly progress with limited English 
     proficient students in the core academic subjects as 
     described in section 1111(b)(2); and
       ``(C) providing State educational agencies and local 
     educational agencies with the flexibility to implement 
     instructional programs, tied to scientifically based 
     research, that the agencies believe to be the most effective 
     for teaching English.

     ``SEC. 3102. DEFINITIONS.

       ``Except as otherwise provided, in this part:
       ``(1) Core academic subject.--The term `core academic 
     subject' has the meaning given the term in section 2002.
       ``(2) Limited english proficient student.--The term 
     `limited English proficient student' means an individual aged 
     5 through 17 enrolled in an elementary school or secondary 
     school--
       ``(A) who--
       ``(i) was not born in the United States or whose native 
     language is a language other than English;
       ``(ii)(I) is a Native American or Alaska Native, or a 
     native resident of the outlying areas; and
       ``(II) comes from an environment where a language other 
     than English has had a significant impact on such 
     individual's level of English language proficiency; or
       ``(iii) is migratory, whose native language is a language 
     other than English, and who comes from an environment where a 
     language other than English is dominant; and
       ``(B) who has sufficient difficulty speaking, reading, 
     writing, or understanding the English language, and whose 
     difficulties may deny such individual--
       ``(i) the ability to meet the State's proficient level of 
     performance on State assessments described in section 
     1111(b)(4) in core academic subjects; or
       ``(ii) the opportunity to participate fully in society.
       ``(3) Language instruction educational program.--The term 
     `language instruction educational program' means an 
     instructional course in which a limited English proficient 
     student is placed for the purpose of becoming proficient in 
     the English language.
       ``(4) Scientifically based research.--The term 
     `scientifically based research' has the meaning given the 
     term in section 1705.
       ``(5) Specially qualified agency.--The term `specially 
     qualified agency' means a local educational agency, in a 
     State that does not participate in a program under this part 
     for a fiscal year.
       ``(6) State.--The term `State' means each of the several 
     States of the United States, the District of Columbia, and 
     the Commonwealth of Puerto Rico.

     ``SEC. 3103. PROGRAM AUTHORIZED.

       ``(a) Grants Authorized.--The Secretary shall award grants, 
     from allotments under subsection (b), to each State having a 
     State plan approved under section 3105(c), to enable the 
     State to help limited English proficient students become 
     proficient in English.
       ``(b) Reservations and Allotments.--
       ``(1) Reservations.--From the amount appropriated under 
     section 3111 to carry out this part for each fiscal year, the 
     Secretary shall reserve--
       ``(A) \1/2\ of 1 percent of such amount for payments to the 
     Secretary of the Interior for activities approved by the 
     Secretary of Education, consistent with this part, in schools 
     operated or supported by the Bureau of Indian Affairs, on the 
     basis of their respective needs; and
       ``(B) \1/2\ of 1 percent of such amount for payments to 
     outlying areas, to be allotted in accordance with their 
     respective needs for assistance under this part as determined 
     by the Secretary, for activities, approved by the Secretary, 
     consistent with this part.
       ``(2) State allotments.--From the amount appropriated under 
     section 3111 for any of the fiscal years 2002 through 2006 
     that remains after making reservations under paragraph (1), 
     the Secretary shall allot to each State having a State plan 
     approved under section 3105(c) an amount that bears the same 
     relationship to the remainder as the number of limited 
     English proficient students in the State bears to the number 
     of limited English proficient students in all States.
       ``(3) Data.--For the purpose of determining the number of 
     limited English proficient students in a State and in all 
     States for each fiscal year, the Secretary shall use data 
     that will yield the most accurate, up-to-date numbers of such 
     students, including--
       ``(A) data available from the Bureau of the Census; or
       ``(B) data submitted to the Secretary by the States to 
     determine the number of limited English proficient students 
     in a State and in all States.
       ``(4) Hold-harmless amounts.--For fiscal year 2002, and for 
     each of the 4 succeeding fiscal years, notwithstanding 
     paragraph (2), the total amount allotted to each State under 
     this subsection shall be not less than 85 percent of the 
     total amount the State was allotted under parts A and B of 
     title VII (as such title was in effect on the day before the 
     date of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act) for fiscal year 2001.
       ``(c) Direct Awards to Specially Qualified Agencies.--
       ``(1) Nonparticipating state.--If a State educational 
     agency for a fiscal year chooses not to participate in a 
     program under this part, or fails to submit an approvable 
     application under section 3105, a specially qualified agency 
     in such State desiring a grant under this part for the fiscal 
     year shall apply directly to the Secretary to receive a grant 
     under this subsection.
       ``(2) Direct awards.--The Secretary may award, on a 
     competitive basis, the amount the State educational agency is 
     eligible to receive under subsection (b)(2) directly to 
     specially qualified agencies in the State desiring a grant 
     under this part and having an application approved under 
     section 3105(c).
       ``(3) Administrative funds.--A specially qualified agency 
     that receives a direct grant under this subsection may use 
     not more than 1 percent of the grant funds for the 
     administrative costs of carrying out this part in the first 
     year the agency receives a grant under this subsection and 
     0.5 percent of the funds for such costs in the second and 
     each succeeding fiscal year for which the agency receives 
     such a grant.

     ``SEC. 3104. WITHIN-STATE ALLOCATIONS.

       ``(a) Grant Awards.--Each State educational agency 
     receiving a grant under this part shall use 95 percent of the 
     grant funds to award subgrants, from allocations under 
     subsection (b), to local educational agencies in the State to 
     carry out the activities described in section 3107.
       ``(b) Allocation Formula.--Each State educational agency 
     receiving a grant under this part shall award grants for a 
     fiscal year by allocating to each local educational agency in 
     the State having a plan approved under section 3106 in an 
     amount that bears the same relationship to the amount of 
     funds appropriated under section 3111 for the fiscal year as 
     the population of limited English proficient students in 
     schools served by the local educational agency bears to the 
     population of limited English proficient students in schools 
     served by all local educational agencies in the State.
       ``(c) Reservations.--
       ``(1) State activities.--Each State educational agency or 
     specially qualified agency receiving a grant under this part 
     may reserve not more than 5 percent of the grant funds to 
     carry out activities described in the

[[Page 1744]]

     State plan or specially qualified agency plan submitted under 
     section 3105.
       ``(2) Administrative expenses.--From the amount reserved 
     under paragraph (1), a State educational agency or specially 
     qualified agency may use not more than 2 percent for the 
     planning costs and administrative costs of carrying out the 
     activities described in the State plan or specially qualified 
     agency plan and providing grants to local educational 
     agencies.

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

       ``(a) Plan Required.--Each State educational agency and 
     specially qualified agency desiring a grant under this part 
     shall submit a plan to the Secretary at such time, in such 
     manner, and containing such information as the Secretary may 
     require.
       ``(b) Contents.--Each State plan submitted under subsection 
     (a) shall--
       ``(1) describe how the State or specially qualified agency 
     will--
       ``(A)(i) establish standards and benchmarks for English 
     language development that are aligned with the State content 
     and student performance standards described in section 
     1111(b)(1);
       ``(ii) establish the standards and benchmarks for each of 
     the 4 recognized domains of speaking, listening, reading, and 
     writing; and
       ``(iii) for each domain, establish at least 3 benchmarks, 
     including benchmarks for performance that is not proficient, 
     partially proficient performance, and proficient performance;
       ``(B) develop high-quality, annual assessments to measure 
     English language proficiency, including proficiency in the 4 
     recognized domains of speaking, listening, reading, and 
     writing; and
       ``(C) develop annual performance objectives, based on the 
     English language development standards described in 
     subparagraph (A), to raise the level of English proficiency 
     of each limited English proficient student;
       ``(2) contain an assurance that the State educational 
     agency or specially qualified agency consulted with local 
     educational agencies, education-related community groups and 
     nonprofit organizations, parents, teachers, school 
     administrators, and English language instruction specialists, 
     in setting the performance objectives;
       ``(3) describe how--
       ``(A) in the case of a State educational agency, the State 
     educational agency will hold local educational agencies and 
     elementary schools and secondary schools accountable for--
       ``(i) meeting the performance objectives described in 
     section 3109 for English proficiency in each of the 4 domains 
     of speaking, listening, reading, and writing; and
       ``(ii) making adequate yearly progress with limited English 
     proficient students in the core academic subjects as 
     described in section 1111(b)(2); and
       ``(B) in the case of a specially qualified agency, the 
     agency will hold elementary schools and secondary schools 
     accountable for--
       ``(i) meeting the performance objectives described in 
     section 3109 for English proficiency in each of the 4 domains 
     of speaking, listening, reading, and writing; and
       ``(ii) making adequate yearly progress, including meeting 
     annual numerical goals for improving the performance of 
     limited English proficient students on performance standards 
     described in section 1111(b)(1)(D)(ii);
       ``(4) describe the activities for which assistance is 
     sought, and how the activities will increase the speed and 
     effectiveness with which students learn English;
       ``(5) in the case of a State educational agency, describe 
     how local educational agencies in the State will be given the 
     flexibility to teach English--
       ``(A) using a language instruction curriculum that is tied 
     to scientifically based research and has been demonstrated to 
     be effective; and
       ``(B) in the manner the local educational agencies 
     determine to be the most effective; and
       ``(6) describe how--
       ``(A) in the case of a State educational agency, the State 
     educational agency will--
       ``(i) provide technical assistance to local educational 
     agencies and elementary schools and secondary schools for the 
     purposes of identifying and implementing English language 
     instruction educational programs and curricula that are tied 
     to scientifically based research; and
       ``(ii) provide technical assistance to local educational 
     agencies and elementary schools and secondary schools for the 
     purposes of helping limited English proficient students meet 
     the same challenging State content standards and challenging 
     State student performance standards as all students are 
     expected to meet; and
       ``(B) in the case of a specially qualified agency, the 
     specially qualified agency will--
       ``(i) provide technical assistance to elementary schools 
     and secondary schools served by the specially qualified 
     agency for the purposes of identifying and implementing 
     programs and curricula described in subparagraph (A)(i); and
       ``(ii) provide technical assistance in elementary schools 
     and secondary schools served by the specially qualified 
     agency for the purposes described in subparagraph (A)(ii).
       ``(c) Approval.--The Secretary, after using a peer review 
     process, shall approve a State plan or a specially qualified 
     agency plan if the plan meets the requirements of this 
     section, and holds reasonable promise of achieving the 
     purposes described in section 3101(c).
       ``(d) Duration of the Plan.--
       ``(1) In general.--Each State plan or specially qualified 
     agency plan shall--
       ``(A) remain in effect for the duration of the State 
     educational agency's or specially qualified agency's 
     participation under this part; and
       ``(B) be periodically reviewed and revised by the State 
     educational agency or specially qualified agency, as 
     necessary, to reflect changes to the State's or specially 
     qualified agency's strategies and programs carried out under 
     this part.
       ``(2) Additional information.--If the State educational 
     agency or specially qualified agency makes significant 
     changes to the plan, such as the adoption of new performance 
     objectives or assessment measures, the State educational 
     agency or specially qualified agency shall submit information 
     regarding the significant changes to the Secretary.
       ``(e) Consolidated Plan.--A State plan submitted under 
     subsection (a) may be submitted as part of a consolidated 
     plan under section 8302.
       ``(f) Secretary Assistance.--Pursuant to section 
     7104(a)(3), the Secretary shall provide assistance, if 
     required, in the development of English language development 
     standards and English language proficiency assessments.

     ``SEC. 3106. LOCAL PLANS.

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

     ``SEC. 3107. USES OF FUNDS.

       ``(a) Administrative Expenses.--Each local educational 
     agency receiving a grant under section 3104 may use not more 
     than 1 percent of the grant funds for a fiscal year for the 
     cost of administering this part.
       ``(b) Activities.--Each local educational agency receiving 
     grant funds under section 3104 shall use the grant funds that 
     are not used under subsection (a)--
       ``(1) to increase limited English proficient students' 
     proficiency in English by providing high-quality language 
     instruction educational programs, such as bilingual education 
     programs and transitional education or English immersion 
     education programs, that are--
       ``(A) tied to scientifically based research demonstrating 
     the effectiveness of the programs in increasing English 
     proficiency; and
       ``(B) approved by the State educational agency;
       ``(2) to provide high-quality professional development 
     activities for teachers of limited English proficient 
     students that are--
       ``(A) designed to enhance the ability of such teachers to 
     understand and use curricula, assessment measures, and 
     instructional strategies for limited English proficient 
     students;
       ``(B) tied to scientifically based research demonstrating 
     the effectiveness of such activities in increasing students' 
     English proficiency or substantially increasing the subject 
     matter knowledge, teaching knowledge, and teaching skills of 
     such teachers;
       ``(C) of sufficient intensity and duration (not to include 
     activities such as 1-day or

[[Page 1745]]

     short-term workshops and conferences) to have a positive and 
     lasting impact on the teachers' performance in the classroom, 
     except that this subparagraph shall not apply to an activity 
     that is 1 component described in a long-term, comprehensive 
     professional development plan established by a teacher and 
     the teacher's supervisor based upon an assessment of the 
     needs of the teacher, the supervisor, the students of the 
     teacher, and the local educational agency;
       ``(3) to identify, acquire, and upgrade curricula, 
     instructional materials, educational software, and assessment 
     procedures; and
       ``(4) to provide parent and community participation 
     programs to improve language instruction educational programs 
     for limited English proficient students.

     ``SEC. 3108. PROGRAM REQUIREMENTS.

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

     ``SEC. 3109. PERFORMANCE OBJECTIVES.

       ``(a) In General.--Each State educational agency or 
     specially qualified agency receiving a grant under this part 
     shall develop annual numerical performance objectives with 
     respect to helping limited English proficient students become 
     proficient in English, including proficiency in the 4 
     recognized domains of speaking, listening, reading, and 
     writing. For each annual numerical performance objective 
     established, the agency shall specify an incremental 
     percentage increase for the objective to be attained for each 
     of the fiscal years (after the first fiscal year) for which 
     the agency receives a grant under this part, relative to the 
     preceding fiscal year, including increases in the number of 
     limited English proficient students demonstrating an increase 
     in performance on annual assessments in speaking, listening, 
     reading, and writing.
       ``(b) Accountability.--Each State educational agency or 
     specially qualified agency receiving a grant under this part 
     shall be held accountable for meeting the annual numerical 
     performance objectives under this part and the adequate 
     yearly progress levels for limited English proficient 
     students under clauses (iv) and (vii) of section 
     1111(b)(2)(B). Any State educational agency or specially 
     qualified agency that fails to meet the annual performance 
     objectives shall be subject to sanctions under section 7101.

     ``SEC. 3110. REGULATIONS AND NOTIFICATION.

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

     ``SEC. 3111. AUTHORIZATION OF APPROPRIATIONS.

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

     SEC. 302. EMERGENCY IMMIGRANT EDUCATION PROGRAM.

       (a) Repeals, Transfers, and Redesignations.--Title III (20 
     U.S.C. 6801 et seq.) is further amended--
       (1) by repealing part B (20 U.S.C. 6891 et seq.), part C 
     (20 U.S.C. 6921 et seq.), part D (20 U.S.C. 6951 et seq.), 
     part E (20 U.S.C. 6971 et seq.), and part F, as added by 
     section 1711 of division B of the Miscellaneous 
     Appropriations Act, 2001 (as enacted into law by section 
     1(a)(4) of Public Law 106-554);
       (2) by transferring part C of title VII (20 U.S.C. 7541 et 
     seq.) to title III and inserting such part after part A (as 
     inserted by section 301(3));
       (3) by redesignating part C of title VII (as transferred by 
     paragraph (2)) as part B, and redesignating the references to 
     such part C as the references to such part B; and
       (4) by redesignating sections 7301 through 7309 (20 U.S.C. 
     7541, 7549) (as transferred by paragraph (2)) as sections 
     3201 through 3209, respectively, and redesignating 
     accordingly the references to such sections 7301 through 
     7309.
       (b) Amendments.--Part B of title III (as so transferred and 
     redesignated) is amended--
       (1) in section 3205(a)(2) (as redesignated by subsection 
     (a)(4)), by striking ``the Goals 2000: Educate America 
     Act,''; and
       (2) in section 3209 (as redesignated by subsection (a)(4)), 
     by striking ``$100,000,000'' and all that follows through 
     ``necessary for'' and inserting ``such sums as may be 
     necessary for fiscal year 2002 and''.

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

       (a) Repeals, Transfers, and Redesignations.--Title III (20 
     U.S.C 6801 et seq.) is further amended--
       (1) by transferring title IX (20 U.S.C. 7801 et seq.) to 
     title III and inserting such title after part B (as 
     redesignated by section 302(a)(3));
       (2) by redesignating subparts 1 through 6 of part A of 
     title IX (as transferred by paragraph (1)) as chapters I 
     through VI, respectively, and redesignating accordingly the 
     references to such subparts as the references to such 
     chapters;
       (3) by redesignating parts A through C of title IX (as 
     transferred by paragraph (1)) as subparts 1 through 3, 
     respectively, and redesignating accordingly the references to 
     such parts as the references to such subparts;
       (4) by redesignating title IX (as transferred by paragraph 
     (1)) as part C, and redesignating accordingly the references 
     to such title as the references to such part;
       (5) by redesignating sections 9101 and 9102 (20 U.S.C. 
     7801, 7802) (as transferred by paragraph (1)) as sections 
     3301 and 3302, respectively, and redesignating accordingly 
     the references to such sections 9101 and 9102;
       (6) by redesignating sections 9111 through 9118 (20 U.S.C. 
     7811, 7818) (as transferred by paragraph (1)) as sections 
     3311 through 3318, respectively, and redesignating 
     accordingly the references to such sections 9111 through 
     9118;
       (7) by redesignating sections 9121 through 9125 (20 U.S.C. 
     7831, 7835) (as transferred by paragraph (1)) as sections 
     3321 through 3325, and redesignating accordingly the 
     references to such sections 9121 through 9125;
       (8) by redesignating sections 9131 and 9141 (20 U.S.C. 
     7851, 7861) (as transferred by paragraph (1)) as sections 
     3331 and 3341, respectively, and redesignating accordingly 
     the references to such sections 9131 and 9141;
       (9) by redesignating sections 9151 through 9154 (20 U.S.C. 
     7871, 7874) (as transferred by paragraph (1)) as sections 
     3351 through 3354, respectively, and redesignating 
     accordingly the references to such sections 9151 through 
     9154;
       (10) by redesignating sections 9161 and 9162 (20 U.S.C. 
     7881, 7882) (as transferred by paragraph (1)) as sections 
     3361 and 3362, respectively, and redesignating accordingly 
     the references to such sections 9161 and 9162;
       (11) by redesignating sections 9201 through 9212 (20 U.S.C. 
     7901, 7912) (as transferred by

[[Page 1746]]

     paragraph (1)) as sections 3401 through 3412, respectively, 
     and redesignating accordingly the references to such sections 
     9201 through 9212; and
       (12) by redesignating sections 9301 through 9308 (20 U.S.C. 
     7931, 7938) (as transferred by paragraph (1)) as sections 
     3501 through 3508, and redesignating accordingly the 
     references to such sections 9301 through 9308.
       (b) Amendments.--Part C of title III (as so transferred and 
     redesignated) is amended--
       (1) by amending section 3314(b)(2)(A) (as redesignated by 
     subsection (a)(6)) to read as follows:
       ``(2)(A) is consistent with, and promotes the goals in, the 
     State and local plans under sections 1111 and 1112;'';
       (2) by amending section 3325(e) (as redesignated by 
     subsection (a)(7)) to read as follows:
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this chapter for fiscal year 2002 and each of 
     the 4 succeeding years.'';
       (3) in section 3361(4)(E) (as redesignated by subsection 
     (a)(10)), by striking ``the Act entitled the `Improving 
     America's Schools Act of 1994' '' and inserting ``the Public 
     Education Reinvestment, Reinvention, and Responsibility 
     Act'';
       (4) by amending section 3362 (as redesignated by subsection 
     (a)(10)) to read as follows:

     ``SEC. 3362. AUTHORIZATION OF APPROPRIATIONS.

       ``For the purpose of carrying out chapters I through V of 
     this subpart, there are authorized to be appropriated to the 
     Department of Education such sums as may be necessary for 
     fiscal year 2002 and each of the 4 succeeding years.'';
       (5) in section 3404 (as redesignated by subsection 
     (a)(11))--
       (A) in subsection (i), by striking ``Improving America's 
     Schools Act of 1994'' and inserting ``Public Education 
     Reinvestment, Reinvention, and Responsibility Act''; and
       (B) in subsection (j), by striking ``$500,000 for fiscal 
     year 1995, and such sums as may be necessary'' and inserting 
     ``such sums as may be necessary for fiscal year 2002, and'';
       (6) in section 3405(c) (as redesignated by subsection 
     (a)(11)), by striking ``$6,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (7) in section 3406(e) (as redesignated by subsection 
     (a)(11)), by striking ``$2,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (8) in section 3407(e) (as redesignated by subsection 
     (a)(11)), by striking ``$1,500,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (9) in section 3408(c) (as redesignated by subsection 
     (a)(11)), by striking ``$2,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (10) in section 3409(d) (as redesignated by subsection 
     (a)(11)), by striking ``$2,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (11) in section 3410(d) (as redesignated by subsection 
     (a)(11)), by striking ``$1,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (12) in section 3504(c) (as redesignated by subsection 
     (a)(12)), by striking ``$5,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and'';
       (13) in section 3505(e) (as redesignated by subsection 
     (a)(12)), by striking ``$2,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and''; and
       (14) in section 3506(d) (as redesignated by subsection 
     (a)(12)), by striking ``$1,000,000 for fiscal year 1995, and 
     such sums as may be necessary'' and inserting ``such sums as 
     may be necessary for fiscal year 2002, and''.

                     TITLE IV--PUBLIC SCHOOL CHOICE

     SEC. 401. PUBLIC SCHOOL CHOICE.

       (a) Magnet Schools Amendments.--Section 5113(a) (20 U.S.C. 
     7213(a)) is amended--
       (1) by striking ``$120,000,000'' and inserting 
     ``$130,000,000''; and
       (2) by striking ``1995'' and inserting ``2002''.
       (b) Charter School Amendments.--Section 10311 (20 U.S.C. 
     8067) is amended--
       (1) by striking ``$100,000,000'' and inserting 
     ``$200,000,000''; and
       (2) by striking ``1999'' and inserting ``2002''.
       (c) Repeals, Transfers, and Redesignations.--The Act (20 
     U.S.C. 6301 et seq.) is amended--
       (1) by amending the heading for title IV (20 U.S.C. 7101 et 
     seq.) to read as follows:

                  ``TITLE IV--PUBLIC SCHOOL CHOICE'';

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

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

       ``(a) Findings.--Congress makes the following findings:
       ``(1)(A) Charter schools and magnet schools are an integral 
     part of the educational system in the United States.
       ``(B) Thirty-four States and the District of Columbia have 
     established charter schools.
       ``(C) Magnet schools have been established throughout the 
     United States.
       ``(D) A Department of Education evaluation of charter 
     schools shows that 59 percent of charter schools reported 
     that lack of start-up funds posed a difficult or very 
     difficult challenge for the school.
       ``(2) State educational agencies and local educational 
     agencies should hold all schools accountable for the improved 
     performance of all students, including students attending 
     charter schools and magnet schools, using State standards and 
     student assessment measures.
       ``(3) Transportation is an important and critical component 
     of school choice. Local educational agencies have a 
     responsibility to provide transportation costs to ensure that 
     all children receive equal access to high quality schools.
       ``(4) School report cards constitute the key informational 
     component used by parents for effective public school choice.
       ``(b) Policy.--It is the policy of the United States--
       ``(1) to support and stimulate improved public school 
     performance through increased public elementary school and 
     secondary school competition and increased Federal financial 
     assistance; and
       ``(2) to provide parents with more choices among public 
     school options.
       ``(c) Purposes.--The purposes of this title are as follows:
       ``(1) To consolidate Federal law regarding public school 
     choice programs into 1 title.
       ``(2) To increase Federal assistance for magnet schools and 
     charter schools.
       ``(3) To give parents more options and help parents make 
     better and more informed choices by--
       ``(A) providing continued support for and financial 
     assistance for magnet schools;
       ``(B) providing continued support for and expansion of 
     charter schools and charter school districts; and
       ``(C) providing financial assistance to States and local 
     educational agencies for the development of local educational 
     agency and school report cards.'';
       (3) by repealing sections 4002 through 4004 (20 U.S.C. 
     7102, 7104), and part A (20 U.S.C. 7111 et seq.), of title 
     IV;
       (4) by transferring part A of title V (20 U.S.C. 7201 et 
     seq.) to title IV, inserting such part A after section 4001, 
     and redesignating the references to part A of title V as the 
     references to part A of title IV;
       (5) by redesignating sections 5101 through 5113 (20 U.S.C. 
     7201, 7213) (as transferred by paragraph (4)) as sections 
     4101 through 4113, respectively, and by redesignating 
     accordingly the references to such sections 5105 through 
     5113;
       (6) by transferring part C of title X (20 U.S.C. 8061 et 
     seq.) to title IV and inserting such part C after part A of 
     title IV (as transferred by paragraph (4));
       (7) by redesignating part C of title IV (as transferred by 
     paragraph (6)) as part B of title IV, and redesignating 
     accordingly the references to such part C;
       (8) by redesignating sections 10301 through 10311 (20 
     U.S.C. 8061, 8067) (as transferred by paragraph (6)) as 
     sections 4201 through 4211, respectively, and by 
     redesignating accordingly the references to such sections 
     10301 through 10311; and
       (9) by redesignating sections 10321 through 10331 (as added 
     by section 322 of the Department of Education Appropriations 
     Act, 2001 (as enacted into law by section 1(a)(1) of Public 
     Law 106-554) and transferred by paragraph (6)) as sections 
     4221 through 4231, respectively, and by redesignating 
     accordingly the references to such sections 10321 through 
     10331.

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

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

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

     ``SEC. 4301. DEFINITIONS.

       ``In this part:
       ``(1) High-poverty local educational agency.--The term 
     `high-poverty local educational agency' means a local 
     educational agency serving a school district in which the 
     percentage of children, ages 5 to 17, from families with 
     incomes below the poverty line is 20 percent or more.
       ``(2) Poverty line.-- The term `poverty line' means the 
     income official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Community Services Block Grant Act 
     (42 U.S.C. 9902(2)) applicable to a family of the size 
     involved, for the most recent year for which satisfactory 
     data are available.

     ``SEC. 4302. GRANTS AUTHORIZED.

       ``(a) In General.--From amounts made available to carry out 
     this part for a fiscal year under section 4306, and not 
     reserved under section 4305, the Secretary is authorized to 
     award grants, on a competitive basis, to State educational 
     agencies and local educational agencies to enable the local 
     educational agencies to develop local public school choice 
     programs.
       ``(b) Duration.--Grants awarded under this part may be 
     awarded for periods of not more than 3 years.

     ``SEC. 4303. USES OF FUNDS.

       ``(a) In General.--

[[Page 1747]]

       ``(1) Public school choice.--Funds made available under 
     this part may be used to develop, implement, evaluate, 
     demonstrate, and disseminate information on, innovative 
     approaches to promote public school choice, including the 
     design and development of new public school choice options, 
     the development of new strategies for overcoming barriers to 
     effective public school choice, and the design and 
     development of public school choice systems that promote high 
     standards for all students and the continuous improvement of 
     all public schools.
       ``(2) Innovative approaches.--Such approaches, which may be 
     carried out at the school, local educational agency, and 
     State levels, may include--
       ``(A) universal public school choice programs that serve to 
     make every school in a school district, group of school 
     districts, or a State, a school of choice;
       ``(B) interdistrict and intradistrict approaches to public 
     school choice, including approaches that increase equal 
     access to high quality educational programs and diversity in 
     schools;
       ``(C) public elementary school and secondary school 
     programs that--
       ``(i) involve partnerships that include institutions of 
     higher education; and
       ``(ii) are located on the campuses of the institutions;
       ``(D) programs that allow students in public secondary 
     schools to enroll in postsecondary courses and to receive 
     both secondary and postsecondary academic credit;
       ``(E) approaches in which State educational agencies or 
     local educational agencies form partnerships with public or 
     private employers, to create public schools at parents' 
     places of employment, referred to as worksite satellite 
     schools; and
       ``(F) approaches to school desegregation that provide 
     students and parents choice through strategies other than 
     magnet schools.
       ``(b) Transportation.--Funds made available under this part 
     may be used for providing transportation services or paying 
     for the cost of transportation for students, except that not 
     more than 10 percent of the funds received under this part 
     shall be used by a State educational agency or local 
     educational agency to provide such services or pay for such 
     cost.
       ``(c) Supplement, Not Supplant.--Funds made available under 
     this part shall be used to supplement and not supplant State 
     and local public funds expended for public school choice 
     programs.

     ``SEC. 4304. GRANT APPLICATION; PRIORITIES.

       ``(a) Application Required.--A State educational agency or 
     local educational agency desiring to receive a grant under 
     this part shall submit an application to the Secretary at 
     such time, in such manner, and containing such information as 
     the Secretary may require.
       ``(b) Application Contents.--The application shall 
     include--
       ``(1) a description of the program for which the agency 
     seeks the grant the goals for such program;
       ``(2) a description of how the program will be coordinated 
     with, and will complement and enhance, other related Federal 
     and non-Federal programs;
       ``(3) if the program involves partners, the name of each 
     partner and a description of the partner's responsibilities;
       ``(4) a description of the policies and procedures the 
     applicant will use to ensure--
       ``(A) accountability for results, including goals and 
     performance indicators; and
       ``(B) that the program is open and accessible to, and will 
     promote high academic standards for, all students;
       ``(5) information demonstrating that the applicant will 
     provide transportation services or the cost of transportation 
     to ensure that all students receive equal access to high 
     quality schools; and
       ``(6) such other information as the Secretary may require.
       ``(c) Priorities.--
       ``(1) Low-performing schools.--In making grants under this 
     part, the Secretary shall give priority to an agency 
     submitting an application for a program for a local 
     educational agency serving schools designated as low-
     performing.
       ``(2) High-poverty agencies.--In making grants under this 
     part, the Secretary shall give priority to an agency 
     submitting an application for a program for a high-poverty 
     local educational agency.
       ``(3) Partnerships.--In making grants under this part, the 
     Secretary may give priority to an agency submitting an 
     application demonstrating that the applicant will carry out 
     the applicant's program in partnership with 1 or more public 
     or private agencies, organizations, or institutions, such as 
     institutions of higher education and public or private 
     employers.

     ``SEC. 4305. EVALUATION, TECHNICAL ASSISTANCE, AND 
                   DISSEMINATION.

       ``(a) Reservation for Evaluation, Technical Assistance, and 
     Dissemination.--From the amount appropriated under section 
     4306 for any fiscal year, the Secretary may reserve not more 
     than 5 percent to carry out evaluations under subsection (b), 
     to provide technical assistance, and to disseminate 
     information.
       ``(b) Evaluations.--The Secretary may use funds reserved 
     under subsection (a) to carry out 1 or more evaluations of 
     programs assisted under this part, which shall, at a minimum, 
     address--
       ``(1) how, and the extent to which, the programs supported 
     with funds under this part promote educational equity and 
     excellence; and
       ``(2) the extent to which public schools of choice 
     supported with funds under this part are--
       ``(A) held accountable to the public;
       ``(B) effective in improving public education; and
       ``(C) open and accessible to all students.

     ``SEC. 4306. AUTHORIZATION OF APPROPRIATIONS.

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

                         ``PART D--REPORT CARDS

     ``SEC. 4401. REPORT CARDS.

       ``(a) Grants Authorized.--The Secretary shall award grants, 
     from allotments made under subsection (b), to States, local 
     educational agencies, and public schools receiving assistance 
     under this Act to enable the States, agencies, and schools to 
     publish annually reports and report cards concerning the 
     agencies and schools.
       ``(b) Reservations and Allotments.--
       ``(1) Reservations.--From the amount appropriated under 
     subsection (k) to carry out this part for each fiscal year, 
     the Secretary shall reserve--
       ``(A) \1/2\ of 1 percent of such amount for payments to the 
     Secretary of the Interior for activities approved by the 
     Secretary of Education, consistent with this part, in schools 
     operated or supported by the Bureau of Indian Affairs, on the 
     basis of their respective needs for assistance under this 
     part; and
       ``(B) \1/2\ of 1 percent of such amount for payments to 
     outlying areas, to be allotted in accordance with their 
     respective needs for assistance under this part, as 
     determined by the Secretary, for activities approved by the 
     Secretary, consistent with this part.
       ``(2) State allotments.--From the amount appropriated under 
     subsection (k) for a fiscal year and remaining after the 
     Secretary makes reservations under paragraph (1), the 
     Secretary shall allot to each State receiving assistance 
     under this Act an amount that bears the same relationship to 
     the remainder as the number of public school students 
     enrolled in elementary schools and secondary schools in the 
     State bears to the number of such students so enrolled in all 
     States.
       ``(c) State Reservation of Funds.--Each State educational 
     agency receiving a grant under subsection (a) may reserve--
       ``(1) not more than 10 percent of the grant funds to carry 
     out activities described in subsections (e) and (g)(2) for 
     fiscal year 2002; and
       ``(2) not more than 5 percent of the grant funds to carry 
     out activities described under subsections (e) and (g)(2) for 
     fiscal year 2003 and each of the 3 succeeding fiscal years.
       ``(d) Within-State Allocations.--Each State educational 
     agency receiving a grant under subsection (a) shall allocate 
     the grant funds that remain after making the reservation 
     described in subsection (c) to each local educational agency 
     in the State in an amount that bears the same relationship to 
     the remainder as the number of public school students 
     enrolled in elementary schools and secondary schools served 
     by the local educational agency bears to the number of such 
     students served by local educational agencies within the 
     State.
       ``(e) Annual State Report.--
       ``(1) Reports required.--
       ``(A) In general.--Not later than the beginning of the 
     2002-2003 school year, a State that receives assistance under 
     this Act shall prepare and disseminate an annual report with 
     respect to all public elementary schools and secondary 
     schools within the State that receive funds under this Act.
       ``(B) State report cards on education.--In the case of a 
     State that publishes State report cards on education, the 
     State shall meet the requirements of subparagraph (A) by 
     including in such report cards the information described in 
     paragraphs (3) through (5) for all public schools and local 
     educational agencies in the State that receive funds under 
     this Act.
       ``(C) Report cards on all public schools.--In the case of a 
     State that publishes report cards on all public elementary 
     schools and secondary schools in the State, the State shall 
     meet the requirements of subparagraph (A) by including in the 
     report cards, at a minimum, the information described in 
     paragraphs (3) through (5) for all public schools and local 
     educational agencies in the State that receive funds under 
     this Act.
       ``(D) Publication through other means.--In the event that 
     the State does not publish a report card described in 
     subparagraph (B) or (C), the State shall, not later than the 
     beginning of the 2002-2003 school year, meet the requirements 
     of subparagraph (A) by publicly reporting the information 
     described in paragraphs (3) through (5) for all public 
     schools and local educational agencies in the State that 
     receive funds under this Act.
       ``(2) Implementation; requirements.--The State shall ensure 
     implementation at the

[[Page 1748]]

     State, local, and school levels of the activities necessary 
     to enable the State to make the reports described in 
     paragraph (1).
       ``(3) Required information.--Each State described in 
     paragraph (1)(A) shall, at a minimum, include in the annual 
     State report information on each local educational agency and 
     public school that receives funds under this Act, including 
     information regarding--
       ``(A)(i) student performance on statewide assessments for 
     the year for which the annual State report is made, and the 
     preceding year, in at least English language arts, 
     mathematics, and (in each State report for a school year 
     after the 2006-2007 school year) science, including--
       ``(I) a comparison of the proportions of students who 
     performed at the State's basic, proficient, and advanced 
     levels of performance in each academic subject, for each 
     grade level for which State assessments are required under 
     section 1111(b)(4) for the year for which the report is 
     prepared, with proportions in each of the same 3 levels in 
     each academic subject at the same grade levels in the 
     preceding school year; and
       ``(II) a statement of the percentage of students not tested 
     and a listing of categories of the reasons why such students 
     were not tested; and
       ``(ii) the most recent 3-year trend in the percentage of 
     students performing at the State's basic, proficient, and 
     advanced levels of performance, for each grade level for 
     which State assessments are required under section 
     1111(b)(4), in each academic subject, including at least--
       ``(I) English language arts;
       ``(II) mathematics; and
       ``(III) (in each State report for a school year after the 
     2007-2008 school year) science;
       ``(B) student retention rates in each grade, the number of 
     students completing advanced placement courses, and 4-year 
     graduation rates;
       ``(C) the professional qualifications of teachers in the 
     aggregate, including the percentage of teachers teaching with 
     emergency or provisional credentials, the percentage of class 
     sections not taught by fully qualified teachers, and the 
     percentage of teachers who are fully qualified; and
       ``(D) the professional qualifications of paraprofessionals 
     in the aggregate, the number of paraprofessionals in the 
     aggregate, and the ratio of paraprofessionals to teachers in 
     the classroom.
       ``(4) Student data.--Student data in each report shall 
     contain disaggregated results for the following categories:
       ``(A) Racial and ethnic groups.
       ``(B) Gender groups.
       ``(C) Economically disadvantaged students, as compared to 
     students who are not economically disadvantaged.
       ``(D) Students with limited English proficiency, as 
     compared with students who are proficient in English.
       ``(5) Optional information.--A State may include in the 
     State annual report any other information the State 
     determines appropriate to reflect school quality and school 
     achievement, including by grade level information on--
       ``(A) average class size; and
       ``(B) school safety, such as the incidence of school 
     violence and drug and alcohol abuse, and the incidence of 
     student suspensions and expulsions.
       ``(6) Waiver.--The Secretary may grant a waiver to a State 
     seeking a waiver of the requirements of this subsection, if 
     the State demonstrates to the Secretary that--
       ``(A) the content of State reports meets the goals of this 
     part; and
       ``(B) the State is taking identifiable steps to meet the 
     requirements of this subsection.
       ``(f) Local Educational Agency and School Report Cards.--
       ``(1) Report card required.--
       ``(A) In general.--The State shall ensure that each local 
     educational agency, public elementary school, or public 
     secondary school in the State that receives funds under this 
     Act, collects appropriate data and publishes an annual report 
     card consistent with this subsection.
       ``(B) Required information.--Each local educational agency, 
     elementary school, and secondary school described in 
     subparagraph (A) shall, at a minimum, include in its annual 
     report card--
       ``(i) the information described in paragraphs (3) and (4) 
     of subsection (e) for each local educational agency and 
     school, as appropriate;
       ``(ii) in the case of a local educational agency--

       ``(I) information regarding the number and percentage of 
     schools served by the local educational agency that are 
     identified for school improvement and corrective action, 
     including schools identified under section 1116;
       ``(II) information on the most recent 3-year trend in the 
     number and percentage of elementary schools and secondary 
     schools served by the local educational agency that are 
     identified for school improvement; and
       ``(III) information that shows how students in the schools 
     served by the local educational agency performed on the 
     statewide assessment compared with students in the State as a 
     whole;

       ``(iii) in the case of an elementary school or a secondary 
     school--

       ``(I) information regarding whether the school has been 
     identified for school improvement or corrective action; and
       ``(II) information that shows how the school's students 
     performed on the statewide assessment compared with students 
     in schools served by the same local educational agency and 
     with all students in the State; and

       ``(iv) other appropriate information, whether or not the 
     information is included in the annual State report.
       ``(2) Special rule.--A local educational agency that issues 
     report cards for all public elementary schools and secondary 
     schools served by the agency shall include, at a minimum, the 
     information described in paragraphs (3) through (5) of 
     subsection (e) for all public schools that receive funds 
     under this Act.
       ``(g) Dissemination and Accessibility of Reports and Report 
     Cards.--
       ``(1) Requirements.--Annual reports and report cards under 
     this part shall be--
       ``(A) concise; and
       ``(B) presented in a format and manner that parents can 
     understand, including, to the extent practicable, in a 
     language the parents can understand.
       ``(2) State reports.--State annual reports under subsection 
     (e) shall be disseminated to all elementary schools, 
     secondary schools, and local educational agencies in the 
     State, and made broadly available to the public through means 
     such as posting on the Internet and distribution to the 
     media, and through public agencies.
       ``(3) Local report cards.--Local educational agency report 
     cards under subsection (f) shall be disseminated to all 
     elementary schools and secondary schools served by the local 
     educational agency and to all parents of students attending 
     such schools, and made broadly available to the public 
     through means such as posting on the Internet and 
     distribution to the media, and through public agencies.
       ``(4) School report cards.--Elementary school and secondary 
     school report cards under subsection (f) shall be 
     disseminated to all parents of students attending that 
     school, and made broadly available to the public, through 
     means such as posting on the Internet and distribution to the 
     media, and through public agencies.
       ``(h) Parents Right-to-Know.--
       ``(1) Qualifications.--A local educational agency that 
     receives funds under part A of title I or part A of title II 
     shall provide, on request, in an understandable and uniform 
     format, to any parent of a student attending any school 
     served by the agency and receiving funds under part A of 
     title I or part A of title II, information regarding the 
     professional qualifications of the student's classroom 
     teachers. The information shall describe, at a minimum--
       ``(A) whether the teacher is fully qualified, as defined in 
     section 2002, for the grade levels and academic subjects in 
     which the teacher teaches;
       ``(B) whether the teacher is teaching under emergency or 
     other provisional status through which State certification or 
     licensing criteria are waived;
       ``(C) the major in which the teacher received a 
     baccalaureate degree, any graduate degree or certification 
     held by the teacher, and the field of discipline of each such 
     degree or certification; and
       ``(D) whether the student is provided services by 
     paraprofessionals, and the qualifications of any such 
     paraprofessional.
       ``(2) Additional information.--In addition to the 
     information described in paragraph (1), and the information 
     provided in reports and report cards under this part, a 
     school that receives funds under part A of title I or part A 
     of title II shall provide, to the extent practicable, to each 
     individual parent (including a guardian) of a student 
     attending the school--
       ``(A) information on the level of performance of the 
     student on each of the State assessments required under 
     section 1111(b)(4); and
       ``(B) if the student was assigned to or taught for 2 or 
     more consecutive weeks by a substitute teacher or by a 
     teacher who is not fully qualified, timely notice about the 
     teacher involved.
       ``(i) Coordination of State Plan Content.--A State shall 
     include in the State's plan under part A of title I or part A 
     of title II, an assurance that the State has in effect a 
     policy that meets the requirements of this section.
       ``(j) Privacy.--Information collected under this section 
     shall be collected and disseminated in a manner that protects 
     the privacy of individuals.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this part 
     $5,000,000 for fiscal year 2002 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.
       ``(l) Definition.--In this section, the term `State' means 
     each of the several States of the United States, the District 
     of Columbia, and the Commonwealth of Puerto Rico.''.

                          TITLE V--IMPACT AID

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

       Section 8002 (20 U.S.C. 7702), as amended by section 1803 
     of the Floyd D. Spence National Defense Authorization Act for 
     Fiscal Year 2001 (Public Law 106-398), is amended--

[[Page 1749]]

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

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

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

     SEC. 503. EXTENSION OF AUTHORIZATION OF APPROPRIATIONS.

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

     SEC. 504. REPEALS, TRANSFERS, AND REDESIGNATIONS.

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

      TITLE VI--HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES

     SEC. 601. HIGH PERFORMANCE AND QUALITY EDUCATION INITIATIVES.

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

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

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

       ``(a) Findings.--Congress makes the following findings:
       ``(1)(A) The educators most familiar with schools, 
     including school superintendents, principals, teachers, and 
     school support personnel, have critical roles in knowing what 
     students need and how best to meet the educational needs of 
     students.
       ``(B) Local educational agencies should therefore have 
     primary responsibility for deciding how to use funds.
       ``(2)(A) Since the Elementary and Secondary Education Act 
     of 1965 was first authorized in 1965, the Federal Government 
     has created numerous grant programs, each of which was 
     created to address 1 among the myriad challenges and problems 
     facing education.
       ``(B) Only a few of the Federal grant programs established 
     before the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act can be tied 
     to significant quantitative results.
       ``(C) Because Federal education dollars are distributed 
     through a patchwork of programs, with each program having a 
     set of requirements and restrictions, local educational 
     agencies and schools have found it difficult to leverage 
     funds for maximum impact.
       ``(D) In many cases, Federal education dollars distributed 
     through competitive grant programs are too diffused to 
     provide a true impact at the school level.
       ``(E) As a result of the Federal elementary and secondary 
     education policies in place before the date of enactment of 
     the Public Education Reinvestment, Reinvention, and 
     Responsibility Act, the focus of Federal, State, and local 
     educational agencies has been diverted from comprehensive 
     student achievement to administrative compliance.
       ``(3)(A) Every elementary school and secondary school 
     should provide a drug- and violence-free learning 
     environment.
       ``(B) The widespread illegal use of alcohol and drugs among 
     the Nation's secondary school students, and increasingly 
     among elementary school students, constitutes a grave threat 
     to students' physical and mental well-being, and 
     significantly impedes the learning process.
       ``(C) Drug and violence prevention programs are essential 
     components of a comprehensive strategy to promote school 
     safety, youth development, and positive school outcomes, and 
     reduce the demand for and illegal use of alcohol, tobacco, 
     and drugs throughout the Nation.
       ``(D) Schools, local organizations, parents, students, and 
     communities throughout the Nation have a special 
     responsibility to work together to combat the continuing 
     epidemic of violence and illegal drug use, and should measure 
     the success of programs established to address this epidemic 
     against clearly defined goals and objectives.
       ``(E) Drug and violence prevention programs are most 
     effective when implemented within a research-based, drug and 
     violence prevention framework of proven effectiveness.
       ``(F) Substance abuse and violence are intricately related, 
     and must be dealt with in a holistic manner.
       ``(4)(A) Technology can produce far greater opportunities 
     to enable all students to meet high learning standards, 
     promote efficiency and effectiveness in education, and help 
     to immediately and dramatically reform our Nation's 
     educational system.
       ``(B) Because most Federal and State educational technology 
     programs have focused on acquiring educational technologies, 
     rather than emphasizing the utilization of the technologies 
     in the classroom and the training and infrastructure required 
     efficiently to support the technologies, the full potential 
     of educational technology has rarely been realized.
       ``(C) The effective use of technology in education has been 
     inhibited by the inability of many State educational agencies 
     and local educational agencies to invest in and support 
     needed technologies, and to obtain sufficient resources to 
     seek expert technical assistance in developing high-quality 
     professional development activities for teachers and keeping 
     pace with rapid technological advances.
       ``(D) To remain competitive in the global economy, which is 
     increasingly reliant on a workforce that is comfortable with 
     technology and able to integrate rapid technological changes 
     into production processes, it is imperative that our Nation 
     maintain a work-ready labor force.
       ``(b) Policy.--It is the policy of the United States--
       ``(1) to facilitate significant innovation in elementary 
     school and secondary school education programs;
       ``(2) to enrich the learning environment of students;
       ``(3) to provide a safe learning environment for all 
     students;
       ``(4) to ensure that all students are technologically 
     literate; and
       ``(5) to assist State educational agencies and local 
     educational agencies in building the agencies' capacity to 
     establish, implement, and sustain innovative programs for 
     public elementary school and secondary school students.
       ``(c) Purposes.--The purposes of this title are as follows:
       ``(1) To provide supplementary assistance for school 
     improvement to elementary schools, secondary schools, and 
     local educational agencies--
       ``(A) that have been or are at risk of being identified for 
     improvement, as described in subsection (c) or (d) of section 
     1116, to carry out activities (as described in such schools' 
     or agencies' improvement plans developed under such section) 
     that are designed to remedy the circumstances that caused 
     such schools or agencies to be identified for improvement; or
       ``(B) to improve core content curricula and instructional 
     practices and materials in core academic subjects (as defined 
     in section 2002) to ensure that all students are performing 
     at a State's proficient level of performance described in the 
     State performance standards

[[Page 1750]]

     described in section 1111(b)(1) within 10 years after the 
     date of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act.
       ``(2) To provide assistance to local educational agencies 
     and schools for innovative programs and activities that will 
     transform schools into places that provide 21st century 
     opportunities for students by--
       ``(A) creating challenging learning environments and 
     facilitating academic enrichment through innovative academic 
     programs; or
       ``(B) providing extra learning, time, and opportunities for 
     students.
       ``(3) To provide assistance to local educational agencies, 
     schools, and communities to strengthen existing programs or 
     develop and implement new programs, based on proven 
     researched-based strategies, that create safe learning 
     environments by--
       ``(A) preventing violence and other high-risk behavior from 
     occurring in and around schools; and
       ``(B) preventing the illegal use of alcohol, tobacco, and 
     drugs among students.
       ``(4) To create New Economy Technology Schools by providing 
     assistance to local educational agencies and schools for--
       ``(A) the acquisition, development, interconnection, 
     implementation, improvement, and maintenance of an effective 
     educational technology infrastructure;
       ``(B) the acquisition and maintenance of technology 
     equipment and the provision of training in the use of such 
     equipment for teachers, school library and media personnel, 
     and administrators;
       ``(C) the acquisition or development of technology-enhanced 
     curricula and instructional materials that are aligned with 
     challenging State content and student performance standards; 
     and
       ``(D) the acquisition or development, and implementation, 
     of high-quality professional development activities for 
     teachers concerning the use of technology and integration of 
     technology with challenging State content and student 
     performance standards.

     ``SEC. 6002. DEFINITIONS.

       ``In this title:
       ``(1) Authentic task.--The term `authentic task' means a 
     real world task as determined by the State involved that--
       ``(A) is challenging, meaningful, multidisciplinary, and 
     interactive;
       ``(B) involves reasoning, problem solving, and composition; 
     and
       ``(C) is not a task requiring a discrete component skill 
     that has no obvious connection with students' activities 
     outside of school.
       ``(2) Poverty line.--The term `poverty line' means the 
     income official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Community Services Block Grant 
     Act) applicable to a family of the size involved, for the 
     most recent year for which satisfactory data are available.
       ``(3) School-age population.--The term `school-age 
     population', used with respect to a State, means the 
     population of children that the State determines are school-
     age children, but at least the population aged 5 through 17, 
     as determined on the basis of the most recent satisfactory 
     data.
       ``(4) State.--The term `State' means each of the several 
     States, the District of Columbia, and the Commonwealth of 
     Puerto Rico.

     ``SEC. 6003. PROGRAMS AUTHORIZED.

       ``(a) Grants Authorized.--From the amount appropriated 
     under section 6009 for a fiscal year, the Secretary shall 
     award a grant, from an allotment made under subsection (b), 
     to each State educational agency having a State plan approved 
     under section 6005(a)(4) to enable the State educational 
     agency to award grants to local educational agencies in the 
     State.
       ``(b) Reservations and Allotments.--
       ``(1) Reservations.--From the amount appropriated under 
     section 6009 for a fiscal year, the Secretary shall reserve--
       ``(A) not more than \1/2\ of 1 percent of such amount for 
     payments to the Bureau of Indian Affairs for activities, 
     approved by the Secretary, consistent with this title;
       ``(B) not more than \1/2\ of 1 percent of such amount for 
     payments to outlying areas, to be allotted in accordance with 
     their respective needs for assistance under this title as 
     determined by the Secretary, for activities, approved by the 
     Secretary, consistent with this title; and
       ``(C) such sums as may be necessary to continue to support 
     any multiyear award made under title III, title IV, part B of 
     title V, or title X (as such titles and part were in effect 
     on the day before the date of enactment of the Public 
     Education Reinvestment, Reinvention, and Responsibility Act) 
     until the termination of the multiyear award.
       ``(2) State allotments.--
       ``(A) In general.--From the amount appropriated under 
     section 6009 for a fiscal year and remaining after the 
     Secretary makes reservations under paragraph (1), the 
     Secretary shall allot to each State having a State plan 
     approved under section 6005(a)(4) the sum of--
       ``(i) an amount that bears the same relationship to 50 
     percent of the remainder as the amount the State received 
     under part A of title I for the fiscal year bears to the 
     amount all States received under such part for the fiscal 
     year; and
       ``(ii) an amount that bears the same relationship to 50 
     percent of the remainder as the school-age population in the 
     State bears to the school-age population in all States.
       ``(B) Data.--For the purposes of determining the school-age 
     population in a State and in all States, the Secretary shall 
     use the most recent available data from the Bureau of the 
     Census.
       ``(c) State Minimum.--For any fiscal year, no State shall 
     be allotted under subsection (b)(2) an amount that is less 
     than 0.4 percent of the total amount allotted to all States 
     under subsection (b)(2).
       ``(d) Hold-Harmless Amounts.--For fiscal year 2002, 
     notwithstanding subsection (e), the amount allotted to each 
     State under subsection (b)(2) shall be not less than 100 
     percent of the total amount the State was allotted through 
     formula grants under sections 3132, 4011, and 6101 (as such 
     sections were in effect on the day before the date of 
     enactment of the Public Education Reinvestment, Reinvention, 
     and Responsibility Act) for fiscal year 2001.
       ``(e) Ratable Reductions.--If the sums made available under 
     subsection (b)(2) for any fiscal year are insufficient to pay 
     the full amounts that all State educational agencies are 
     eligible to receive under subsection (c) or (d) for such 
     year, the Secretary shall ratably reduce such amounts for 
     such year.

     ``SEC. 6004. WITHIN STATE ALLOCATION.

       ``(a) Reservations; Allocations.--Each State educational 
     agency for a State receiving a grant for a fiscal year under 
     section 6003(a) shall--
       ``(1) set aside not more than 1 percent of the grant funds 
     for the cost of administering the activities under this 
     title;
       ``(2) set aside not more than 4 percent of the grant funds 
     to--
       ``(A) provide for the establishment of, and continued 
     improvement on, high-quality, internationally competitive 
     content and student performance standards that all students 
     will be expected to meet;
       ``(B) provide for the establishment of, and continued 
     improvement on, high-quality, rigorous assessments that 
     include multiple measures and demonstrate comprehensive 
     knowledge;
       ``(C) encourage and enable all State educational agencies 
     and local educational agencies to develop, implement, and 
     strengthen comprehensive education improvement plans that 
     address student achievement, teacher quality, parent 
     involvement, and reliable measurement and evaluation methods; 
     and
       ``(D) encourage and enable all States to develop and 
     implement value-added assessments, including model value-
     added assessments identified by the Secretary under section 
     7104(a)(6); and
       ``(3) using the remaining 95 percent of the grant funds, 
     make grants by allocating to each local educational agency in 
     the State having a local educational agency plan approved 
     under section 6005(b)(3) the sum of--
       ``(A) an amount that bears the same relationship to 60 
     percent of such remainder as the amount the local educational 
     agency received under part A of title I for the fiscal year 
     bears to the amount all local educational agencies in the 
     State received under such part for the fiscal year; and
       ``(B) an amount that bears the same relationship to 40 
     percent of such remainder as the school-age population in the 
     area served by the local educational agency bears to the 
     school-age population in the area served by all local 
     educational agencies in the State.
       ``(b) Matching Requirement.--
       ``(1) In general.--Each eligible local educational agency 
     receiving a grant under subsection (a) shall, with respect to 
     the costs to be incurred by the agency in carrying out the 
     programs for which the grant was awarded, make available 
     (directly or through donations from public or private 
     entities) non-Federal contributions, in cash or in kind, in 
     an amount equal to 25 percent of the Federal funds provided 
     under the grant.
       ``(2) Waiver.--A local educational agency may apply to the 
     State educational agency for, and the State educational 
     agency may grant, a waiver of the requirements of paragraph 
     (1) to a local educational agency that--
       ``(A) applies for such a waiver; and
       ``(B) demonstrates that extreme circumstances make the 
     agency unable to meet such requirements.

     ``SEC. 6005. PLANS.

       ``(a) State Plans.--
       ``(1) In general.--The State educational agency for each 
     State desiring a grant under this title shall submit a State 
     plan to the Secretary at such time, in such manner, and 
     containing such information as the Secretary may require.
       ``(2) Consolidated plan.--A State plan submitted under 
     paragraph (1) may be submitted as part of a consolidated plan 
     under section 8302.
       ``(3) Contents.--Each plan submitted under paragraph (1) 
     shall--
       ``(A) describe how the State educational agency will assist 
     each local educational agency and school served under this 
     title in the State to comply with the requirements described 
     in section 6006 that are applicable to the local educational 
     agency or school;
       ``(B) certify that the State has in place the standards and 
     assessments required under section 1111;

[[Page 1751]]

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

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

       ``(a) Administrative Expenses.--Each local educational 
     agency receiving a grant award under section 6004(a)(3) may 
     use not more than 1 percent of the grant funds for a fiscal 
     year for the cost of administering this title.
       ``(b) Required Activities.--Each local educational agency 
     receiving a grant award under section 6004(a)(3) shall use 
     the grant funds pursuant to this section to establish and 
     carry out programs that are designed to achieve, separately 
     or cumulatively, each of the goals described in the 
     categories specified in the following paragraphs:
       ``(1) School improvement.--Each local educational agency 
     shall use 30 percent of the grant funds--
       ``(A) in the case of a school that has been identified for 
     school improvement under section 1116(c), for activities or 
     strategies that are described in section 1116(c) that focus 
     on removing such school from school improvement status; or
       ``(B) for programs that seek to raise the academic 
     achievement levels of all elementary school and secondary 
     school students based on challenging State content and 
     student performance standards and, to the greatest extent 
     possible--
       ``(i) incorporate the best practices developed from 
     research-based methods and practices;
       ``(ii) are aligned with challenging State content and 
     performance standards and focused on reinforcing and boosting 
     the core academic skills and knowledge of students who are 
     struggling academically, as determined by State assessments 
     under section 1111(b)(4) and local evaluations;
       ``(iii) focus on accelerated learning rather than 
     remediation, so that students will master the high level of 
     skills and knowledge needed to meet the highest State 
     standards or to perform at high levels on all State 
     assessments;
       ``(iv) offer teachers, principals, and administrators 
     professional development and technical assistance that are 
     aligned with the other content of such programs; and
       ``(v) address local needs, as determined by the local 
     educational agency's evaluation of school and districtwide 
     data.
       ``(2) 21st century opportunities.--Each local educational 
     agency shall use 25 percent of the grant funds for--
       ``(A) programs that provide for extra learning, time, and 
     opportunities for students so that all students may achieve 
     high levels of learning and perform at the State's proficient 
     level of performance described in the State standards 
     described in section 1111(b)(1) within 10 years after the 
     date of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act;
       ``(B) programs to improve higher order thinking skills of 
     all students, especially disadvantaged students;
       ``(C) promising innovative education reform projects that 
     are consistent with challenging State content and student 
     performance standards; or
       ``(D) programs that focus on ensuring that disadvantaged 
     students enter elementary school with the basic skills needed 
     to meet the highest State content and student performance 
     standards.
       ``(3) Safe learning environments.--Each local educational 
     agency shall use 15 percent of the grant funds for programs 
     that help ensure that all elementary school and secondary 
     school students learn in a safe and supportive environment, 
     by--
       ``(A) reducing drugs, violence, and other high-risk 
     behavior in schools;
       ``(B) providing safe, extended-day opportunities for 
     students;
       ``(C) providing professional development activities for 
     teachers, principals, mental health professionals, and 
     guidance counselors concerning dealing with students 
     exhibiting distress (such as exhibiting distress through 
     substance abuse, disruptive behavior, and suicidal behavior);
       ``(D) recruiting or retaining high-quality mental health 
     professionals;
       ``(E) providing character education for students;
       ``(F) meeting other objectives that are established under 
     State standards regarding safety or that address local 
     community concerns; or
       ``(G) providing alternative educational opportunities for 
     violent and disruptive students.
       ``(4) New economy technology schools.--
       ``(A) In general.--Each local educational agency shall use 
     30 percent of the grant funds to establish technology 
     programs that will transform schools into New Economy 
     Technology Schools and, to the greatest extent possible, 
     will--
       ``(i) increase student performance related to an authentic 
     task;

[[Page 1752]]

       ``(ii) integrate the use of technology into activities that 
     are a core part of classroom curricula and are available to 
     all students;
       ``(iii) emphasize how to use technology to accomplish 
     authentic tasks;
       ``(iv) provide professional development and technical 
     assistance to teachers so that teachers may integrate 
     technology into daily teaching activities that are directly 
     aligned with State content and student performance standards;
       ``(v) enable the local educational agency annually to 
     increase the percentage of classrooms with access to 
     technology, particularly in schools in which not less than 50 
     percent of the school-age population comes from families with 
     incomes below the poverty line; and
       ``(vi) allow local educational agencies to provide 
     incentives or bonuses for teachers who have met the National 
     Education Technology Standards, as developed by the 
     Department of Education and the International Society for 
     Technology in Education, or have obtained an information 
     technology certification that is directly related to the 
     curricula or the academic subjects that the teachers teach.
       ``(B) Limitation.--Each local educational agency shall use 
     a portion equal to not more than 50 percent of the grant 
     funds described in subparagraph (A) to purchase, upgrade, or 
     retrofit computer hardware in schools. In distributing funds 
     from that portion, the agency shall give priority to schools 
     in which not less than 50 percent of the school-age 
     population comes from families with incomes below the poverty 
     line.
       ``(c) Transfer of Funds.--Notwithstanding subsection (b)--
       ``(1) a local educational agency that meets adequate yearly 
     progress requirements for student performance, as established 
     by the State educational agency under section 1111(b)(2)(B), 
     may allocate, at the local educational agency's discretion, 
     not more than 30 percent of the grant funds received under 
     section 6004(a)(3) among the 4 categories described in 
     paragraphs (1) through (4) of subsection (b);
       ``(2) a local educational agency that exceeds the adequate 
     yearly progress requirements described in paragraph (1) by a 
     significant amount, as determined by the State educational 
     agency, may allocate, at the local educational agency's 
     discretion, not more than 50 percent of the grant funds 
     received under section 6004(a)(3) among the 4 categories; and
       ``(3) a local educational agency that is identified for 
     improvement, as described in section 1116(d), may apply not 
     more than 25 percent of the grant funds in the categories 
     described in paragraphs (2), (3), and (4) of subsection (b) 
     to carry out school improvement activities described in 
     subsection (b)(1).
       ``(d) Limitations for Schools and Local Educational 
     Agencies in Corrective Action.--
       ``(1) Local educational agencies in corrective action.--If 
     a local educational agency is identified for corrective 
     action under section 1116(d), the State educational agency 
     shall--
       ``(A) notwithstanding any other provision of law, specify 
     how the local educational agency shall spend the grant funds 
     in order to focus the local educational agency on the 
     activities that will be the most effective in raising student 
     performance levels; and
       ``(B) implement corrective action in accordance with the 
     provisions for corrective action described in section 
     1116(d)(12).
       ``(2) Schools in corrective action.--If a school is 
     identified for corrective action under section 1116(c), the 
     local educational agency shall--
       ``(A) specify how the school shall spend grant funds 
     received under this section in order to focus the school on 
     the activities that will be the most effective in raising 
     student performance levels; and
       ``(B) implement corrective action in accordance with the 
     provisions for corrective action described in section 
     1116(c)(10).
       ``(3) Duration.--Limitations imposed under paragraphs (1) 
     and (2) on a school or local educational agency in corrective 
     action status shall remain in effect until such time as the 
     school or local educational agency has made sufficient 
     improvement, as determined by the State educational agency, 
     and is removed from corrective action status.

     ``SEC. 6007. STATE AND LOCAL RESPONSIBILITIES.

       ``(a) Data Review.--
       ``(1) State and local review.--A State educational agency 
     shall jointly review with a local educational agency 
     described in section 6006(d)(1) the local educational 
     agency's data gathered from student assessments and other 
     measures required under section 1111(b)(4), in order to 
     determine pursuant to section 6006(d)(1)(A) how the local 
     educational agency shall spend the grant funds in order to 
     substantially increase student performance levels.
       ``(2) School and local review.--A local educational agency 
     shall jointly review with a school described in section 
     6006(d)(2) the school's data gathered from student 
     assessments and other measures required under section 
     1111(b)(4), in order to determine pursuant to section 
     6006(d)(2) how the school shall spend grant funds in order to 
     substantially increase student performance levels.
       ``(b) Technical Assistance.--
       ``(1) State assistance.--
       ``(A) In general.--A State educational agency shall 
     provide, upon request by a local educational agency receiving 
     grant funds under this title, technical assistance to the 
     local educational agency and schools served by the local 
     educational agency, including assistance in analyzing student 
     performance and the impact of programs assisted under this 
     title, and identifying the best instructional strategies and 
     methods for carrying out such programs.
       ``(B) Provision.--State technical assistance may be 
     provided by--
       ``(i) the State educational agency; or
       ``(ii) with the local educational agency's approval, an 
     institution of higher education, a private not-for-profit or 
     for-profit organization, an educational service agency, the 
     recipient of a Federal contract or participant in a 
     cooperative agreement as described in section 7104(a)(3), a 
     nontraditional entity such as a corporation or consulting 
     firm, or any other entity with experience in the program area 
     for which the assistance is being sought.
       ``(2) Local assistance.--
       ``(A) In general.--A local educational agency shall 
     provide, upon request by an elementary school or secondary 
     school served by the agency and receiving grant funds under 
     this title, technical assistance to such school, including 
     assistance in analyzing student performance and the impact of 
     programs assisted under this title, and identifying the best 
     instructional strategies and methods for carrying out such 
     programs.
       ``(B) Provision.--Local technical assistance may be 
     provided by--
       ``(i) the State educational agency or local educational 
     agency; or
       ``(ii) with the school's approval, an institution of higher 
     education, a private not-for-profit or for-profit 
     organization, an educational service agency, the recipient of 
     a Federal contract or participant in a cooperative agreement 
     as described in section 7104(a)(3), a nontraditional entity 
     such as a corporation or consulting firm, or any other entity 
     with experience in the program area for which the assistance 
     is being sought.

     ``SEC. 6008. LOCAL REPORTS.

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

     ``SEC. 6009. AUTHORIZATION OF APPROPRIATIONS.

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

                       TITLE VII--ACCOUNTABILITY

     SEC. 701. ACCOUNTABILITY.

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

                      ``TITLE VII--ACCOUNTABILITY

                    ``PART A--SANCTIONS AND REWARDS

     ``SEC. 7101. SANCTIONS.

       ``(a) Third Fiscal Year.--If a State receiving grant funds 
     under a covered provision has not met the performance 
     objectives established under the covered provision by the end 
     of the third fiscal year for which the State receives such 
     grant funds, the Secretary shall reduce by 50 percent the 
     amount the State receives for administrative expenses under 
     such provision.
       ``(b) Fourth Fiscal Year.--If the State fails to meet the 
     performance objectives established under the covered 
     provision by the end of the fourth fiscal year for which the 
     State receives such grant funds, the Secretary shall reduce 
     the total amount the State receives under title VI by 30 
     percent.
       ``(c) Duration.--If the Secretary determines, under 
     subsection (a) or (b), that a State failed to meet the 
     performance objectives established under a covered provision 
     for a third or fourth fiscal year, the Secretary shall reduce 
     grant funds in accordance with subsection (a) or (b) for the 
     State for each subsequent fiscal year until the State 
     demonstrates that the State met the performance objectives 
     for the fiscal year preceding the demonstration.
       ``(d) Technical Assistance.--The Secretary shall provide 
     technical assistance, if sought, to a State subjected to 
     sanctions under subsection (a) or (b).
       ``(e) Local Sanctions.--
       ``(1) In general.--Each State receiving assistance under 
     part A of title I, part A of title II, part A of title III, 
     or title VI shall develop a system to hold local educational 
     agencies accountable for meeting--
       ``(A) the performance objectives established under part A 
     of title II, part A of title III, and title VI; and
       ``(B) the adequate yearly progress requirements established 
     under part A of title I, and

[[Page 1753]]

     required under part A of title III and title VI.
       ``(2) Sanctions.--A system developed under paragraph (1) 
     shall include a mechanism for sanctioning local educational 
     agencies for failure to meet such performance objectives and 
     adequate yearly progress levels.
       ``(f) Definitions.--In this section:
       ``(1) Covered provision.--The term `covered provision' 
     means part A of title I, part A of title II, part A of title 
     III, and title VI.
       ``(2) Performance objectives.--The term `performance 
     objectives' means, used with respect to--
       ``(A) part A of title I, the adequate yearly progress 
     levels established under subsections (b)(2)(A)(iii) and 
     (b)(2)(B) of section 1111;
       ``(B) part A of title II, the set of performance objectives 
     established under section 2104;
       ``(C) part A of title III, the set of performance 
     objectives established under section 3109; and
       ``(D) title VI, the set of performance objectives set by 
     each local educational agency under section 6005(b)(2)(C).

     ``SEC. 7102. REWARDING HIGH PERFORMANCE.

       ``(a) State Rewards.--
       ``(1) In general.--From amounts appropriated under 
     subsection (d), and from amounts made available as a result 
     of reductions under section 7101, the Secretary shall make 
     awards to States that--
       ``(A) for 3 consecutive years have--
       ``(i) exceeded the States' performance objectives 
     established for any title under this Act;
       ``(ii) exceeded the adequate yearly progress levels 
     established under section 1111(b)(2);
       ``(iii) significantly narrowed the gaps between minority 
     and nonminority students, and between economically 
     disadvantaged and noneconomically disadvantaged students;
       ``(iv) raised all students enrolled in the States' public 
     elementary schools and secondary schools to the State's 
     proficient level of performance described in the State 
     standards described in section 1111(b)(4) earlier than 10 
     years after the date of enactment of the Public Education 
     Reinvention, Reinvestment, and Responsibility Act; or
       ``(v) significantly increased the percentage of classes in 
     core academic subjects being taught by fully qualified 
     teachers in schools receiving funds under part A of title I; 
     or
       ``(B) not later than December 31, 2004, ensure that all 
     teachers teaching in the States' public elementary schools 
     and secondary schools are fully qualified.
       ``(2) State use of funds.--
       ``(A) Demonstration sites.--Each State receiving an award 
     under paragraph (1) shall use a portion of the award that is 
     not distributed under subsection (b) to establish 
     demonstration sites with respect to high-performing schools 
     (based on performance objectives or adequate yearly progress) 
     in order to help low-performing schools.
       ``(B) Improvement of performance.--Each State receiving an 
     award under paragraph (1) shall use the portion of the award 
     that is not used pursuant to subparagraph (A) or (C) and is 
     not distributed under subsection (b) for the purpose of 
     improving the level of performance of all elementary school 
     and secondary school students in the State, based on State 
     content and performance standards.
       ``(C) Reservation for administrative expenses.--Each State 
     receiving an award under paragraph (1) may set aside not more 
     than \1/2\ of 1 percent of the award for the planning and 
     administrative costs of carrying out this section, including 
     the costs of distributing awards to local educational 
     agencies.
       ``(b) Local Educational Agency Awards.--
       ``(1) In general.--Each State receiving an award under 
     subsection (a)(1) shall distribute 80 percent of the award 
     funds by making awards to local educational agencies in the 
     State that--
       ``(A) for 3 consecutive years have--
       ``(i) exceeded the State-established local educational 
     agency performance objectives established for any title under 
     this Act;
       ``(ii) exceeded the adequate yearly progress levels 
     established under section 1111(b)(2);
       ``(iii) significantly narrowed the gaps between minority 
     and nonminority students, and between economically 
     disadvantaged and noneconomically disadvantaged students;
       ``(iv) raised all students enrolled in schools served by 
     the local educational agency to the State's proficient level 
     of performance described in the State standards described in 
     section 1111(b)(1) earlier than 10 years after the date of 
     enactment of the Public Education Reinvestment, Reinvention, 
     and Responsibility Act; or
       ``(v) significantly increased the percentage of classes in 
     core academic subjects being taught by fully qualified 
     teachers in schools receiving funds under part A of title I;
       ``(B) not later than December 31, 2004, ensure that all 
     teachers teaching in the elementary schools and secondary 
     schools served by the local educational agencies are fully 
     qualified; or
       ``(C) have attained consistently high achievement in 
     another area that the State determines is appropriate to 
     reward.
       ``(2) School awards.--A local educational agency shall use 
     funds made available under paragraph (1) for activities 
     described in subsection (c).
       ``(3) Reservation for administrative expenses.--Each local 
     educational agency receiving an award under paragraph (1) may 
     set aside not more than \1/2\ of 1 percent of the award for 
     the planning and administrative costs of carrying out this 
     section, including the costs of distributing awards to 
     eligible elementary schools and secondary schools, teachers, 
     and principals.
       ``(c) School Awards.--Each local educational agency 
     receiving an award under subsection (b) shall consult with 
     teachers and principals to develop a reward system, and shall 
     use the award funds for 1 or more activities--
       ``(1) to reward individual schools that demonstrate high 
     performance with respect to--
       ``(A) increasing the academic achievement of all students;
       ``(B) narrowing the academic achievement gap described in 
     section 1111(b)(2)(B)(vii);
       ``(C) improving teacher quality;
       ``(D) increasing high-quality professional development for 
     teachers, principals, and administrators; or
       ``(E) improving the English proficiency of limited English 
     proficient students;
       ``(2) to reward collaborative teams of teachers, or teams 
     of teachers and principals, that--
       ``(A) significantly improve the annual performance of low-
     performing students; or
       ``(B) significantly improve in a fiscal year the English 
     proficiency of limited English proficient students;
       ``(3) to reward principals who successfully raise the 
     performance of a substantial number of low-performing 
     students to high academic levels;
       ``(4) to develop or implement school districtwide programs 
     or policies to improve the level of student performance on 
     State assessments that are aligned with State content 
     standards; or
       ``(5) to reward schools for consistently high achievement 
     in another area that the local educational agency determines 
     is appropriate to reward.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $200,000,000 for fiscal year 2002, and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.
       ``(e) Definition.--In this section:
       ``(1) Core academic subject.--The term `core academic 
     subject' has the meaning given the term in section 2002.
       ``(2) Low-performing student.--In this section, the term 
     `low-performing student' means a student who performs below a 
     State's basic level of performance described in the State 
     standards described in section 1111(b)(1).

     ``SEC. 7103. SUPPLEMENT NOT SUPPLANT.

       ``Funds appropriated pursuant to the authority of this 
     title shall be used to supplement and not supplant other 
     Federal, State, and local public funds expended to provide 
     activities described in section 7102.

     ``SEC. 7104. SECRETARY'S ACTIVITIES.

       ``(a) In General.--Notwithstanding any other provision of 
     this Act, from amounts appropriated under subsection (d) and 
     not reserved under subsection (b), the Secretary may--
       ``(1) support activities of the National Board for 
     Professional Teaching Standards;
       ``(2) study and disseminate information regarding model 
     programs assisted under this Act;
       ``(3) provide training and technical assistance to States, 
     local educational agencies, elementary schools and secondary 
     schools, Indian tribes, and other recipients of grant funds 
     under this Act that are carrying out activities assisted 
     under this Act, including entering into contracts or 
     cooperative agreements with public or private nonprofit 
     entities or consortia of such entities, in order to provide 
     comprehensive training and technical assistance related to 
     the administration and implementation of activities assisted 
     under this Act;
       ``(4) support activities that will promote systemic 
     education reform at the State and local levels;
       ``(5) award grants or contracts to public or private 
     nonprofit entities to enable the entities--
       ``(A) to develop and disseminate information on exemplary 
     educational practices relating to reading, writing, 
     mathematics, science, and other academic subjects, and 
     technology, and instructional materials and professional 
     development concerning the academic subjects, for States, 
     local educational agencies, and elementary schools and 
     secondary schools; and
       ``(B) to provide technical assistance concerning the 
     implementation of teaching methods and assessment tools for 
     use by elementary school and secondary school students, 
     teachers, and administrators;
       ``(6) disseminate information on models of value-added 
     assessments;
       ``(7) award a grant or contract to a public or private 
     nonprofit entity or consortium of such entities for the 
     development and dissemination of information on exemplary 
     programs and curricula for accelerated and advanced learning 
     for all students, including gifted and talented students;
       ``(8) award a grant or contract to Reading Is Fundamental, 
     Inc. and other public or private nonprofit entities to 
     support and promote programs that include the distribution

[[Page 1754]]

     of inexpensive books to students and the provision of 
     literacy activities that motivate students to read; and
       ``(9) provide assistance to States--
       ``(A) by assisting in the development of English language 
     development standards and high-quality assessments, if 
     requested by a State participating in activities under part A 
     of title III; and
       ``(B) by developing native language tests for limited 
     English proficient students that a State may administer to 
     such students to assess student performance in at least 
     reading, science, and mathematics, consistent with section 
     1111.
       ``(b) Reservation.--From the amounts appropriated under 
     subsection (d), the Secretary shall reserve $10,000,000 for 
     the purposes of carrying out activities under section 
     1202(c).
       ``(c) Special Rule for Secretary Awards.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, a recipient of funds under this Act for a program 
     that are provided through a direct grant made by the 
     Secretary, or a contract or cooperative agreement entered 
     into directly with the Secretary, shall include information 
     on the following in any application or plan required under 
     such program:
       ``(A) How funds provided under the program have been used 
     and will be used and how such use has increased and will 
     increase student academic achievement.
       ``(B) The goals and objectives that have been met and that 
     will be met through the program, including goals for 
     dissemination and use of any information or materials 
     produced.
       ``(C) How the recipient has tracked and reported annually, 
     and will track and report annually, to the Secretary 
     information on--
       ``(i) the successful dissemination of any information or 
     materials produced under the program;
       ``(ii) where the information or materials produced are 
     being used; and
       ``(iii) the impact of such use and, if applicable, the 
     extent to which such use increases student academic 
     achievement.
       ``(2) Requirement.--If no application or plan is required 
     under a program described in paragraph (1), the Secretary 
     shall require the recipient to submit a plan containing the 
     information required under paragraph (1).
       ``(3) Failure to achieve goals and objectives.--
       ``(A) In general.--The Secretary shall evaluate the 
     information submitted under this subsection to determine 
     whether the recipient has met the goals and objectives 
     described in paragraph (1)(B), assess the magnitude of the 
     dissemination, and assess the effectiveness of the activity 
     funded in raising student academic achievement in places 
     where information or materials produced with such funds are 
     used.
       ``(B) Ineligibility.--The Secretary shall consider the 
     recipient ineligible for grants, contracts, or cooperative 
     agreements described in paragraph (1) if--
       ``(i) the goals and objectives described in paragraph 
     (1)(B) have not been met;
       ``(ii) the dissemination has not been of a magnitude to 
     ensure that national goals are being addressed; or
       ``(iii) the information or materials produced have not made 
     a significant impact on raising student achievement in places 
     where such information or materials are used.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $150,000,000 for fiscal year 2002, and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.

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

     ``SEC. 7201. AMERICA'S EDUCATION GOALS PANEL.

       ``(a) Purpose.--The purpose of this section is to establish 
     a bipartisan mechanism for--
       ``(1) building a national consensus for education 
     improvement; and
       ``(2) reporting on progress toward achieving America's 
     Education Goals.
       ``(b) America's Education Goals Panel.--
       ``(1) Establishment.--There is established in the executive 
     branch an America's Education Goals Panel (referred to in 
     this part as the `Goals Panel') to advise the President, the 
     Secretary, and Congress.
       ``(2) Composition.--The Goals Panel shall be composed of 18 
     members (referred to individually in this section as a 
     `member'), including--
       ``(A) 2 members appointed by the President;
       ``(B) 8 members who are Governors, 3 of whom shall be from 
     the same political party as the President and 5 of whom shall 
     be from the opposite political party from the President, 
     appointed by the Chairperson and Vice Chairperson of the 
     National Governors' Association, with the Chairperson and 
     Vice Chairperson each appointing representatives of such 
     Chairperson's and Vice Chairperson's respective political 
     parties, in consultation with each other;
       ``(C) 4 Members of Congress, of whom--
       ``(i) 1 member shall be appointed by the Majority Leader of 
     the Senate from among the Members of the Senate;
       ``(ii) 1 member shall be appointed by the Minority Leader 
     of the Senate from among the Members of the Senate;
       ``(iii) 1 member shall be appointed by the Majority Leader 
     of the House of Representatives from among the Members of the 
     House of Representatives; and
       ``(iv) 1 member shall be appointed by the Minority Leader 
     of the House of Representatives from among the Members of the 
     House of Representatives; and
       ``(D) 4 members of State legislatures appointed by the 
     President of the National Conference of State Legislatures, 
     of whom 2 shall be from the same political party as the 
     President of the United States.
       ``(3) Special appointment rules.--
       ``(A) In general.--The members appointed pursuant to 
     paragraph (2)(B) shall be appointed as follows:
       ``(i) Same party.--If the Chairperson of the National 
     Governors' Association is from the same political party as 
     the President, the Chairperson shall appoint 3 individuals 
     and the Vice Chairperson of such association shall appoint 5 
     individuals.
       ``(ii) Opposite party.--If the Chairperson of the National 
     Governors' Association is from the opposite political party 
     from the President, the Chairperson shall appoint 5 
     individuals and the Vice Chairperson of such association 
     shall appoint 3 individuals.
       ``(B) Special rule.--If the National Governors' Association 
     has appointed a panel that meets the requirements of 
     paragraph (2) and subparagraph (A) (except for the 
     requirements of paragraph (2)(D)), prior to the date of 
     enactment of the Public Education Reinvestment, Reinvention, 
     and Responsibility Act, the members serving on such panel 
     shall be deemed to be in compliance with the provisions of 
     such paragraph (2) and subparagraph (A) and shall not be 
     required to be reappointed pursuant to such paragraph (2) and 
     subparagraph (A).
       ``(C) Representation.--To the extent feasible, the 
     membership of the Goals Panel shall be geographically 
     representative and reflect the racial, ethnic, and gender 
     diversity of the United States.
       ``(4) Terms.--The terms of service of members shall be as 
     follows:
       ``(A) Presidential appointees.--Members appointed under 
     paragraph (2)(A) shall serve at the pleasure of the 
     President.
       ``(B) Governors.--Members appointed under paragraph (2)(B) 
     (or (3)(B)) shall serve for 2-year terms, except that the 
     initial appointments under such paragraph shall be made to 
     ensure staggered terms.
       ``(C) Congressional appointees and state legislators.--
     Members appointed under subparagraphs (C) and (D) of 
     paragraph (2) shall serve for 2-year terms.
       ``(5) Date of appointment.--The initial members shall be 
     appointed not later than 60 days after the date of enactment 
     of the Public Education Reinvestment, Reinvention, and 
     Responsibility Act.
       ``(6) Initiation.--The Goals Panel may begin to carry out 
     the Goals Panel's duties under this section when 10 members 
     of the Goals Panel have been appointed.
       ``(7) Vacancies.--A vacancy on the Goals Panel shall not 
     affect the powers of the Goals Panel, but shall be filled in 
     the same manner as the original appointment.
       ``(8) Travel.--The members shall not receive compensation 
     for the performance of services for the Goals Panel, but each 
     member may be allowed travel expenses, including per diem in 
     lieu of subsistence, as authorized by section 5703 of title 
     5, United States Code, for each day the member is engaged in 
     the performance of duties for the Goals Panel away from the 
     home or regular place of business of the member. 
     Notwithstanding section 1342 of title 31, United States Code, 
     the President may accept the voluntary and uncompensated 
     services of members.
       ``(9) Chairperson.--
       ``(A) In general.--The members shall select a Chairperson 
     from among the members.
       ``(B) Term and political affiliation.--The Chairperson of 
     the Goals Panel shall serve a 1-year term. No 2 consecutive 
     Chairpersons shall be from the same political party.
       ``(10) Conflict of interest.--A member of the Goals Panel 
     who is an elected official of a State that has developed 
     content or student performance standards may not participate 
     in Goals Panel consideration of such standards.
       ``(11) Ex officio member.--If the President has not 
     appointed the Secretary as 1 of the 2 members the President 
     appoints pursuant to paragraph (2)(A), the Secretary shall 
     serve as a nonvoting ex officio member of the Goals Panel.
       ``(c) Duties.--
       ``(1) In general.--The Goals Panel shall--
       ``(A) report to the President, the Secretary, and Congress 
     regarding the progress the Nation and the States are making 
     toward achieving America's Education Goals, including issuing 
     an annual report;
       ``(B) report on, and widely disseminate through multiple 
     strategies information pertaining to, promising or effective 
     actions being taken at the Federal, State, and local levels, 
     and in the public and private sectors, to achieve America's 
     Education Goals;
       ``(C) report on, and widely disseminate information on 
     promising or effective practices pertaining to, the 
     achievement of each of the 8 America's Education Goals; and

[[Page 1755]]

       ``(D) help build a bipartisan consensus for the reforms 
     necessary to achieve America's Education Goals.
       ``(2) Report.--
       ``(A) In general.--The Goals Panel shall annually prepare 
     and submit to the President, the Secretary, the appropriate 
     committees of Congress, and the Governor of each State a 
     report that shall--
       ``(i) assess the progress of the United States toward 
     achieving America's Education Goals; and
       ``(ii) identify actions that should be taken by Federal, 
     State, and local governments.
       ``(B) Form; data.--The reports shall be presented in a 
     form, and include data, that is understandable to parents and 
     the general public.
       ``(3) Early childhood assessment.--The Goals Panel shall 
     carry out the activities described in section 207 of the 
     Goals 2000: Educate America Act, as in effect on the day 
     before the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act.
       ``(d) Powers.--The Goals Panel shall have the powers 
     described in section 204 of the Goals 2000: Educate America 
     Act, as in effect on the day before the date of enactment of 
     the Public Education Reinvestment, Reinvention, and 
     Responsibility Act.
       ``(e) Administration.--The Goals Panel shall comply with 
     the administrative requirements described in section 205 of 
     the Goals 2000: Educate America Act, as in effect on the day 
     before the date of enactment of the Public Education 
     Reinvestment, Reinvention, and Responsibility Act.
       ``(f) Personnel.--The Goals Panel shall have the authority 
     relating to a director, employees, experts and consultants, 
     and detailees described in section 206 of the Goals 2000: 
     Educate America Act, as in effect on the day before the date 
     of enactment of the Public Education Reinvestment, 
     Reinvention, and Responsibility Act.
       ``(g) Definition.--In this section, the term `America's 
     Education Goals' means the National Education Goals 
     established under section 102 of the Goals 2000: Educate 
     America Act, as in effect on the day before the date of 
     enactment of the Public Education Reinvestment, Reinvention, 
     and Responsibility Act.''.

               TITLE VIII--GENERAL PROVISIONS AND REPEALS

     SEC. 801. REPEALS, TRANSFERS, AND REDESIGNATIONS REGARDING 
                   TITLE XIV.

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

                  ``TITLE VIII--GENERAL PROVISIONS'';

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

                   ``PART H--SUPPLEMENT, NOT SUPPLANT

     ``SEC. 8801. SUPPLEMENT, NOT SUPPLANT.

       ``Funds appropriated pursuant to the authority of this Act 
     shall be used to supplement and not supplant State and local 
     public funds expended to provide activities described in this 
     Act.'';
       (6) by redesignating the references to title XIV as 
     references to title VIII;
       (7)(A) by redesignating sections 14101 through 14103 (20 
     U.S.C. 8801, 8803) (as transferred by paragraph (3)) as 
     sections 8101 through 8103, respectively; and
       (B) by redesignating the references to such sections 14101 
     through 14103 as references to sections 8101 through 8103, 
     respectively;
       (8)(A) by redesignating sections 14201 through 14206 (20 
     U.S.C. 8821, 8826) (as transferred by paragraph (3)) as 
     sections 8201 through 8206, respectively; and
       (B) by redesignating the references to such sections 14201 
     through 14206 as references to sections 8201 through 8206, 
     respectively;
       (9)(A) by redesignating sections 14301 through 14307 (20 
     U.S.C. 8851, 8857) (as transferred by paragraph (3)) as 
     sections 8301 through 8307, respectively; and
       (B) by redesignating the references to such sections 14301 
     through 14307 as references to sections 8301 through 8307, 
     respectively;
       (10)(A) by redesignating section 14401 (20 U.S.C. 8881) (as 
     transferred by paragraph (3)) as section 8401; and
       (B) by redesignating the references to such section 14401 
     as references to section 8401;
       (11)(A) by redesignating sections 14501 through 14513 (20 
     U.S.C. 8891, 8903) (as transferred by paragraph (3)) as 
     sections 8501 through 8513, respectively; and
       (B) by redesignating the references to such sections 14501 
     through 14513 as references to sections 8501 through 8513, 
     respectively;
       (12)(A) by redesignating sections 14601 and 14602 (20 
     U.S.C. 8921, 8922) (as transferred by paragraph (3)) as 
     sections 8601 and 8602, respectively; and
       (B) by redesignating the references to such sections 14601 
     and 14602 as references to sections 8601 and 8602, 
     respectively;
       (13)(A) by redesignating section 14701 (20 U.S.C. 8941) (as 
     transferred by paragraph (3)) as section 8701; and
       (B) by redesignating the references to such section 14701 
     as references to section 8701; and
       (14)(A) by redesignating sections 14801 and 14802 (20 
     U.S.C. 8961, 8962) (as transferred by paragraph (3)) as 
     sections 8901 and 8902, respectively; and
       (B) by redesignating the references to such sections 14801 
     and 14802 as references to sections 8901 and 8902, 
     respectively.
       (b) Amendments.--Title VIII (as so transferred and 
     redesignated) is amended--
       (1) in section 8101(10) (as redesignated by subsection 
     (a)(7))--
       (A) by striking subparagraphs (C) through (F); and
       (B) by adding after subparagraph (B) the following:
       ``(C) part A of title II;
       ``(D) part A of title III; and
       ``(E) title IV.'';
       (2) in section 8102 (as redesignated by subsection (a)(7)), 
     by striking ``VIII'' and inserting ``V'';
       (3) in section 8201 (as redesignated by subsection 
     (a)(8))--
       (A) in subsection (a)(2), by striking ``, and 
     administrative funds under section 308(c) of the Goals 2000: 
     Educate America Act''; and
       (B) by striking subsection (f);
       (4) in section 8203(b) (as redesignated by subsection 
     (a)(8)), by striking ``Improving America's Schools Act of 
     1994'' and inserting ``Public Education Reinvestment, 
     Reinvention, and Responsibility Act'';
       (5) in section 8204 (as redesignated by subsection 
     (a)(8))--
       (A) by striking subsection (b); and
       (B) in subsection (a)--
       (i) in paragraph (2)--

       (I) in the matter preceding subparagraph (A), by striking 
     ``1995'' and inserting ``2002''; and
       (II) in subparagraph (B), by inserting ``professional 
     development,'' after ``curriculum development,''; and

       (ii) in paragraph (4)--

       (I) by striking ``and section 410(b) of the Improving 
     America's Schools Act of 1994'';
       (II) by striking ``paragraph (2)'' and inserting 
     ``subsection (a)(2)'';
       (III) by striking the following:

       ``(4) Results.--'' and inserting the following:
       ``(b) Results.--'';

       (IV) by striking the following:

       ``(A) develop'' and inserting the following:
       ``(1) develop''; and

       (V) by striking the following:

       ``(B) within'' and inserting the following:
       ``(2) within'';
       (6) in section 8205(a)(1) (as redesignated by subsection 
     (a)(8)), by striking ``part A of title IX'' and inserting 
     ``subpart 1 of part C of title III'';
       (7) in section 8206 (as redesignated by subsection 
     (a)(8))--
       (A) by striking ``(a) Unneeded Program Funds.--''; and
       (B) by striking subsection (b);
       (8) in section 8302(a)(2) (as redesignated by subsection 
     (a)(9))--
       (A) by striking subparagraph (C); and
       (B) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (C) and (D), respectively;
       (9) in section 8304(b) (as redesignated by subsection 
     (a)(9)), by striking ``Improving America's Schools Act of 
     1994'' and inserting ``Public Education Reinvestment, 
     Reinvention, and Responsibility Act'';
       (10) in section 8401 (as redesignated by subsection 
     (a)(10))--
       (A) in subsection (a), by striking ``Except as provided in 
     subsection (c),'' and inserting ``Except as provided in 
     subsection (c), and notwithstanding any other provision 
     regarding waivers in this Act,''; and
       (B) in subsection (c)(8), by striking ``part C of title X'' 
     and inserting ``part B of title IV'';
       (11) in section 8502 (as redesignated by subsection 
     (a)(11)), by striking ``VIII'' and inserting ``V'';
       (12) in section 8503(b)(1) (as redesignated by subsection 
     (a)(11))--
       (A) by striking subparagraphs (B) through (E); and
       (B) by adding at the end the following:
       ``(B) part A of title II, relating to professional 
     development;
       ``(C) title III; and
       ``(D) title VI.'';
       (13) in section 8506(d) (as redesignated by subsection 
     (a)(11)), by striking ``Improving America's Schools Act of 
     1994'' and inserting ``Public Education Reinvestment, 
     Reinvention, and Responsibility Act'';
       (14) in section 8513 (as redesignated by subsection 
     (a)(11)), by striking ``Improving America's Schools Act of 
     1994'' each place it appears and inserting ``Public Education 
     Reinvestment, Reinvention, and Responsibility Act'';
       (15) in section 8601 (as redesignated by subsection 
     (a)(12))--
       (A) in subsection (b)(3)--
       (i) in subparagraph (A), by striking ``Improving America's 
     Schools Act of 1994'' and inserting ``Public Education 
     Reinvestment, Reinvention, and Responsibility Act''; and

[[Page 1756]]

       (ii) in subparagraph (B), by striking ``Improving America's 
     Schools Act'' and inserting ``Public Education Reinvestment, 
     Reinvention, and Responsibility Act''; and
       (B) in subsection (f), by striking ``Improving America's 
     Schools Act of 1994'' and inserting ``Public Education 
     Reinvestment, Reinvention, and Responsibility Act''; and
       (16) in section 8701(b) (as redesignated by subsection 
     (a)(13))--
       (A) in paragraph (1)--
       (i) in subparagraph (B)--

       (I) in clause (i), by striking ``Improving America's 
     Schools Act of 1994'' and inserting ``Public Education 
     Reinvestment, Reinvention, and Responsibility Act'';
       (II) in clause (ii), by striking ``such as initiatives 
     under the Goals 2000: Educate America Act, and'' and 
     inserting ``under''; and
       (III) in clause (ii), by striking ``such Acts'' and 
     inserting ``such Act''; and

       (ii) in subparagraph (C)(ii), by striking ``the School-to-
     Work Opportunities Act of 1994, and the Goals 2000: Educate 
     America Act,'' and inserting ``and the School-to-Work 
     Opportunities Act of 1994''; and
       (B) in paragraph (3), by striking ``1998'' and inserting 
     ``2005''.

     SEC. 802. OTHER REPEALS.

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

  Mr. BAYH Mr. President, I am pleased to join with my colleagues 
Senators Lieberman, Landrieu, Kohl, Lincoln, Breaux, Graham, Feinstein, 
Carper, Kerry, and Nelson in offering the Public Education 
Reinvestment, Reinvention, and Responsibility Act. It is my hope that 
our proposal will allow Congress to break the gridlock of the recent 
past and pursue a two-track strategy in this Congress, working together 
for the benefit of the American people when we agree, while continuing 
to disagree on other matters over which consensus cannot be formed.
  We introduce our version of the Elementary and Secondary Education 
Act today in recognition of the fact that for too many millions of 
American children the promise of a quality public education is a hollow 
dream. We stand here today in recognition of the fact that the 
solutions of the 1960s are inadequate to meet the challenges of the 
21st Century and the years beyond. We stand here today to say the 
status quo is not good enough; that we must do better. Congress has an 
historic opportunity and responsibility to enact the most sweeping 
education reform since the 1960s to ensure that no child is left 
behind. The consequences of any of our children not receiving a quality 
education are far greater than ever before. For the first time in our 
nation's history, the growing gap between the educational ``haves'' and 
``have nots'' threatens to create a permanent underclass. If we do not 
address these shortcomings, the knowledge and information gap will lock 
many of our citizens out of the marketplace and prevent them from 
accessing opportunity in the New Economy.
  Our proposal breaks with the sterile orthodoxy of the past, in which 
too often the left said just spending more money was the answer to the 
problems facing our schools, and the right said the public schools 
could not be fixed and, therefore, should be abandoned. Instead, we 
propose a consensus, a synthesis of ideas reflecting the best of both 
the right and the left to improve the quality of public education 
across our country. We propose a substantial increase in our nation's 
investment in education, because we recognize that we can't expect our 
schools, particularly our poorer schools, to get the job done if we 
don't give them the tools to get the job done. We propose an increase 
of $35 billion over five years in Federal education spending. But we do 
more than just throw money at the problem, because we know that 
taxpayers, parents, and most of all our children, have a right to 
expect more from us. Instead, we focus on accountability. In return for 
increased investment, we insist upon results. We focus on outcomes, not 
inputs. No longer will we define success only in terms of how much 
money is spent, but instead of how much our children learn. Can they 
read and write, add and subtract, know basic science? No longer will we 
define accountability in terms of ordering local school districts to 
spend dollars in particular ways, but instead in terms of whether our 
children are getting the skills they need to make a successful life for 
themselves. This is a significant rethinking from the ideas that have 
prevailed here in Washington for several decades.
  Our proposal also provides a substantial amount of flexibility. We 
don't agree with the block grants our colleagues on the far right 
advocate for which would allow money to be diverted from public 
education or to allow dollars to be diverted from focusing on our 
poorest students. But we do allow for local principals and 
superintendents to have a much greater say in determining how best to 
spend those dollars, because we believe that those at the local level 
who labor in the classrooms and the schools every day, can make those 
decisions far better than those of us who now work on the banks of the 
Potomac.
  Finally, our proposal harnesses market forces and embeds them in the 
public education system to encourage innovation, improvement, and 
increased accountability without abandoning the public schools and 
those children who would not do well in a market-based system by going 
down the path of vouchers. Instead, we support the expansion of public 
school choice, magnet schools, and charter schools. We believe in the 
enduring American principle of a quality public education for all of 
our nation's children--not just the lucky few under a market based 
system.
  It was Thomas Jefferson who said that a society that expects to be 
both ignorant and free is expecting something that never has been and 
never shall be. So we put forward this proposal because we know that 
the cause of improving public education is critically important to our 
economy, critically important to the kind of society that we will be, 
and essential to the vibrancy of our democracy itself.
  Mr. KOHL. Mr. President, I am proud to again be an original cosponsor 
of The Public Education Reinvestment, Reinvention, and Responsibility 
Act of 2000--better known as ``Three R's.'' I have been pleased to work 
with the education community in Wisconsin, as well as Senators 
Lieberman, Bayh, and our other cosponsors, on this important piece of 
legislation.
  Perhaps this year, the three ``R's'' should stand for: ``right, 
right, and right.'' It is the right time to keep promises we all made 
during the election to make bipartisan education reform our first order 
of business. It is the right policy to give schools more flexibility 
but ask for more accountability. And it is the right thing to do to 
make our students a number one federal priority.
  We have come a long way since we started this effort more than a year 
ago. Unfortunately, in the 106th Congress, we were unable to rise above 
the usual partisan sniping and have a serious education debate. But 
last year's fighting has given way to this year's opportunity to do 
what's right by our children. If we learned anything from the last 
election, it is that the American people want real education reform--
and they want to see results.
  None of us would deny that we have made great strides in recent years 
toward a better public education system. Nearly all States now have 
academic standards in place. More students are taking more challenging 
courses. Test scores have risen slightly. Dropout rates have decreased.
  In Wisconsin, educators have worked hard to help students achieve. 
Students are showing continued improvement on State tests in nearly 
every subject, particularly in science and math and across all groups, 
including African Americans, the disabled, and the economically 
disadvantaged.
  But despite our best efforts, our public schools still face huge 
challenges. Too many students do not have the skills they need to 
compete in the 21st century economy. And the achievement gap between 
poor and more affluent students remains alarmingly wide.
  Mr. President, in the past some have called for reducing or 
eliminating the Federal role in education. I think that would be a 
mistake. As a nation, it is in all of our best interests to make sure 
our children receive the best education possible. It is vital to their 
future success, and to the success of our country.

[[Page 1757]]

  But addressing problems in education is going to take more than 
cosmetic reform. We risk our children's future by defending the tired 
programs of the past. We need to let go of the partisan bickering and 
focus on what the American people are focused on: Results.
  Results are what the 3 R's bill is about. We make raising student 
achievement for all students--and eliminating the achievement gap 
between low-income and more affluent students--our top priorities. To 
accomplish this, our bill centers around three principles.
  First, we believe that we must make a strong investment in education, 
and we need to target those funds to the neediest schools and students. 
Since Federal funds make up only 7 percent of all money spent on 
education, it is essential that we target those funds where they are 
needed the most.
  Second, we believe that States and local school districts are in the 
best position to know what their educational needs are. The 3 R's give 
educators more flexibility to decide how they will use Federal dollars 
to meet those needs.
  Finally--and I believe this is the key component of our approach--we 
believe that in exchange for this increased flexibility, there must be 
increased accountability.
  For too long, we have seen a steady stream of Federal dollars flow to 
States and school districts--regardless of how well they educated their 
students. This has to stop. We need to reward schools that do a good 
job. We need to provide help to schools that are struggling to do a 
better job. But we need to stop subsidizing failure. Our highest 
priority must be educating children--not protecting broken systems.
  I am pleased that there is an emerging consensus around these core 
principles of 3 R's. Already, President Bush has expressed interest in 
pursuing many of these same ideas that our group laid out over a year 
ago, and I look forward to joining with both parties to get this done.
  The 3 R's bill is a strong starting point for this debate. This 
bill--by using the concepts of increased funding, targeting, 
flexibility--and most importantly, accountability--demonstrates how we 
can work with our State and local partners to make sure every child 
receives the highest quality education--and a chance to live a 
successful, productive life. I look forward to working with both sides 
of the aisle as Congress debates education reform in the coming months.
  Mr. GRAHAM. Mr. President, I am pleased to join my colleagues, 
Senator Lieberman, Senator Bayh, and others of the Senate New Democrats 
today in introducing the 3 R's bill: the Public Education Reinvestment, 
Reinvention and Responsibility Act of 2001.
  This legislation is important for several reasons:
  It re-establishes the education of our children, all our children, as 
a national priority.
  It is a sterling example of ``finding the center.'' We take the best 
of many ideas, and forge what we hope will be common ground.
  It is ``unfinished business'' from last year. The 106th Congress had 
the responsibility to reauthorize the Elementary and Secondary 
Authorization Act. We debated for a while, gridlock set in, and all 
progress ended for the year. By coming forward early in the 107th 
Congress with a centrist proposal--we hope for a different outcome in 
2001.
  The concepts in the 3 R's are simple, but resonant with teachers, 
parents and administrators:
  More money is needed. State and local governments have the primary 
responsibility toward funding K-12 education, but the federal 
government can do more. We offer $35 billion more over the next five 
years.
  Accountability assures that we are getting the most effective use of 
Federal dollars in education. There is strong accountability here. 
Struggling schools are offered extra help, but then they must show 
results in student progress. Schools that exceed goals are rewarded.
  Flexibility is essential so that each local school district is able 
to meet specific local needs and challenges. The three R's ensures that 
federal priorities in education receive a focus, but allow state and 
local decision makers to implement what they most need.
  In the first week of February last year, I hosted a roundtable 
discussion of parents, teachers and administrators in Tampa, Florida. 
All of them asked for the same thing: more resources more flexibility, 
and a focus on results--not procedure. simply put, that's what we try 
to do here.
  My discussion in Tampa also highlighted the urgent need for the 
federal government's commitment to education.
  The latest National Assessment of Educational Progress, NAEP, scores 
show:
  Only 17 percent of 8th graders in Florida score at or above the 
proficient level in mathematics.
  Only 3 percent of African American 8th graders score at or above 
proficient standards in math.
  Only 23 percent of 4th graders are at or above proficient standards 
in reading.
  18 percent of the classes in Florida are taught by instructors who 
lack a college major in the subject matter that they teach.
  The ``achievement gap'' is real. White students in Florida on average 
score 1001 points on the SAT. African American students, on average, 
score 856 points. Hispanic students score a 957.
  We need to do more to give all Florida's students, and all of our 
nation's students, the best education possible.
  The introduction of this legislation is the first step toward finding 
the common ground and making the changes that are needed. I look 
forward to working with each of my colleagues as we focus on this in 
the 107th Congress.
  Mr. KERRY. Mr. President, today I join several of my colleagues to 
introduce an innovative education reform proposal, the Public Education 
Reinvestment, Reinvention, and Responsibility Act, or 3 R's for short. 
Three R's aims to help states and districts raise the academic 
achievement of all children by increasing the federal government's 
investment in public education, by highly-targeting those resources 
toward to most economically disadvantaged children, by increasing the 
flexibility with which states and districts use federal dollars, and by 
holding schools accountable for results.
  I believe that it is past time to break the partisan gridlock in 
Washington over education reform and to come together around programs, 
policies, and initiatives that members of both parties can agree are 
critical to improving education for our neediest children. I am very 
pleased that President Bush agrees with my colleagues and I on the 
fundamental principles underlying this legislation--that meaningful 
education reform requires more resources, more flexibility, and more 
accountability. I look forward to working with President Bush and my 
Republican colleagues to reach a bipartisan consensus on education 
reform. I believe that the 3 R's legislation provides a great framework 
for finding the common ground necessary to reach a consensus.
  Bipartisanship means compromise, not capitulation--and education 
reform is an issue for compromise. We've been pushing for three years 
for real education reform for our kids--we've been willing to put aside 
hot button issues--and now I hope that President Bush will join us by 
putting aside his voucher proposals and working toward meaningful 
public education reform that both parties can agree on. Both 
Republicans and Democrats can agree that the federal government should 
focus on helping states improve academic results for our children 
instead of developing more rules, on encouraging states and schools to 
enact bold reforms instead of passively tolerating failure. It is time 
to step back from mico-managing public education from Washington, and 
time instead to give states and school districts the flexibility they 
need to improve public education. And we must hold those schools and 
states accountable for results.
  Members of both parties know that we must increase our investment in 
public education so that schools can meet high standards, that we must 
maintain our commitment to the most

[[Page 1758]]

economically disadvantaged students, that to be successful schools must 
have capable leaders and fully certified teachers, and that schools 
must be held accountable for providing children with a quality 
education.
  I have worked on education reform in a bipartisan way in the past. In 
the last Congress Senator Gordon Smith and I introduced education 
reform legislation and were supported by many of our colleagues. Our 
proposal represented an education reform agenda that members of both 
parties could support and contained initiatives that many agreed were 
fundamental to improving public education. The Three R's legislation--a 
focus on increased investment, increased flexibility, and increased 
accountability--is also an education reform agenda on which many can 
agree and I want to reach out in the next few weeks and ask those 
Republicans, like Gordon Smith, Susan Collins, and Olympia Snowe, to 
join in this effort to reform education in a bipartisan fashion.
  Mr. CARPER. Mr. President, I am very pleased to rise today in support 
of the Public Education Reinvestment, Reinvention, and Responsibility 
Act. I want to congratulate my good friends, the Senator from 
Connecticut and the Senator from Indiana, for their strong leadership 
on this issue. When they first introduced this legislation back last 
year, the prospects for bipartisan education reform looked far 
different than they do today. Members on the two sides of the aisle 
were sharply divided over the future of the federal role in education. 
As a result, the Congress failed last year to reauthorize the 
Elementary and Secondary Education Act for the first time in its 35-
year history.
  Last year, it took courage and foresight for the supporters of this 
legislation to step into the partisan breach in the way that they did. 
This bill received all of 13 votes when it was first brought to the 
floor. Today, we ought to all be grateful for the leadership of those 
13 Senators, because this year the Public Education Reinvestment, 
Reinvention, and Responsibility Act represents the best hope and the 
best blueprint for finally achieving meaningful, bipartisan reform of 
the federal role in education.
  For the last eight years, I had the great privilege of serving my 
little State as governor. During that time, I worked together with 
legislators from both sides of the aisle, with educators and others, to 
set rigorous standards, to provide local schools with the resources and 
flexibility they needed, and in return to demand accountability for 
results. We in Delaware have not been alone in this endeavor. We have 
been part of a nationwide movement for change--a movement of parents 
and teachers, of employers, legislators and governors, who believe that 
our public schools can be improved and that every child can learn.
  As a former chairman of the National Governors' Association, I can 
attest that the Federal Government is frequently a lagging indicator 
when it comes to responsiveness to change. It is clearly states and 
local communities that are leading the movement for change in public 
education today. The bill we introduce today does not seek to make the 
Federal Government the leader in education reform by micromanaging the 
operation of local schools. Nor does this legislation seek to 
perpetuate the status quo in which the Federal Government passively 
funds and facilitates failure. Rather, this legislation seeks for the 
first time to make the Federal Government a partner and catalyst in the 
movement for reform that we see all across this country at the State 
and local level. This legislation refocuses Federal policy on doing a 
few things, but doing them well. It redirects Federal policy toward the 
purpose of achieving results rather than promulgating yet more rules 
and regulations.
  I believe we have a tremendous opportunity this year to achieve 
bipartisan consensus to reform and reauthorize the Elementary and 
Secondary Education Act, and in so doing to redeem the original intent 
of that landmark legislation. I want to express my appreciation to our 
new President for his interest in renewing educational opportunity in 
America and leaving no child behind. There is much in the legislation 
we introduce today that squares with the plan that the President sent 
to Congress last week. We on this side of the aisle agree with the 
President that we need to invest more federal dollars in our schools, 
particularly in schools that serve the neediest students. We also agree 
that the dollars we provide, we should provide more flexibly. And we 
agree that if we are going to provide more money, and if we are going 
to provide that money more flexibly, we should demand results. That's 
the formula: invest in reform; insist on results.
  I believe we also agree with our new President that parents should be 
empowered to make choices to send their children to a variety of 
different schools. We agree that parents are the first enforcers of 
accountability in public education. Where we disagree is in how we 
provide that choice. The President believes that the best way to 
empower parents and to provide them with choices is to give children 
and their parents vouchers of $1,500. With all due respect, that is an 
empty promise. In my State, you just can't get your child into most 
private or parochial schools for $1,500 per year. That is simply an 
empty promise.
  I believe there is a better way. I believe we've found a better way 
in my little State of Delaware. Four years ago, we introduced statewide 
public school choice. We also passed our first charter schools law. I 
knew that this was going to work when I heard the following 
conversation between a school administrator and some of his colleagues. 
He said, ``If we don't provide parents and families what they want and 
need, they'll send their kids somewhere else.'' I thought to myself, 
``Right! He's got it.''
  We have 200 public schools in my small State, and students in all of 
these schools take our test measuring what they know and can do in 
reading, writing, and math. We also measure our schools by the 
incidence of poverty, from highest to lowest. The school with the 
highest incidence of poverty in my state is the East Side Charter 
School in Wilmington, Delaware. The incidence of poverty there is 83 
percent. Its students are almost all minority. It is right in the 
center of the projects in Wilmington. In the first year after East Side 
Charter School opened its doors, very few of its students met our state 
standards in math. Last spring, every third grader there who took our 
math test met or exceeded our standards, which is something that 
happened at no other school in the state. It's a remarkable story. And 
it's been possible because East Side Charter School is a remarkable 
school. Kids can come early and stay late. They have a longer school 
year. They wear school uniforms. Parents have to sign a contract of 
mutual responsibility. Teachers are given greater authority to innovate 
and initiate.
  We need to ensure that parents and students are getting what they 
want and need, and if they're not getting what they want and need that 
they have the choice--and most importantly that they have they have the 
ability--to go somewhere else. A $1,500 voucher doesn't give parents 
that ability, at least not in my State. Public school choice and 
charter schools do.
  We agree on many things. Where we disagree, as on vouchers, I believe 
we can find common ground. I believe that we can come together, for 
example, to provide a ``safety valve'' to children in failing schools, 
in the way of broader public school choice and greater access to 
charter schools. I am therefore hopeful about the prospects for 
bipartisan agreement and for meaningful reform. To that end, I urge my 
colleagues to support the Public Education Reinvestment, Reinvention, 
and Responsibility Act.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Leahy, Mr.  Biden, Mr. DeWine, and 
        Mr. Thurmond):
  S. 304. A bill to reduce illegal drug use and trafficking and to help 
provide appropriate drug education, prevention, and treatment programs; 
to the Committee on the Judiciary.
  Mr. HATCH. Mr. President, today we are taking an important step in 
our effort to rid our nation of drug abuse.

[[Page 1759]]

There has lately developed a bipartisan consensus that realizes that 
supply reduction needs to be complemented with demand reduction in our 
fight to combat drugs. Yes, we must continue our vigilant defense of 
our borders and our streets against those who make their living by 
manufacturing and selling these harmful substances. And yes, we must 
sustain our vigorous law enforcement offensive against these merchants 
of misery. But the time has come to increase the resources we devote to 
prevent people from using drugs in the first place and to breaking the 
cycle of addiction for those whose lives are devastated and consumed by 
these substances. Only through such a balanced approach can we remove 
the scourge of drugs from our society.
  Last session, to stem the maddening increase in methamphetamine 
manufacturing and trafficking in America, Congress passed and the 
President signed into law the Methamphetamine Anti-Proliferation Act, a 
bill which I had authored. It was a balanced bill that provided law 
enforcement with several needed tools to help turn back the tide of 
methamphetamine proliferation, and it also contained several 
significant prevention and treatment provisions. In particular, one of 
the treatment provisions offered an innovative approach to how drug 
addicted patients can seek and obtain treatment. As science and 
medicine continue to make significant strides in developing drugs that 
promise to make treatment more effective, we must pave the way to 
ensure that these drugs can be administered in an effective manner, 
Indeed, this provision did exactly that, by creating a decentralized 
system of treating heroin addicts with a new generation of anti-
addiction medications.
  Mr. President, the Drug Education, Prevention and Treatment Act of 
2001, which we introduce today, also embodies this balanced approach. 
While the bill furthers our law enforcement efforts by increasing 
penalties for those who involve minors in drug crimes and those who use 
our public lands for drug manufacturing, the bulk of the legislation 
advances our prevention and treatment efforts. Before detailing some of 
these measures, I want to thank my partner on the Judiciary Committee, 
Senator Leahy, as well as my colleagues Senators Biden, DeWine, and 
Thurmond for cosponsoring this bill. The effort and expertise they have 
contributed to this bill have helped make it worthy of the support of 
every member of this body.
  I am extremely pleased that this bipartisan bill has a friend in the 
new White House. President Bush has indicated on several occasions, and 
in the plan he unveiled last fall, that he also believes in a 
comprehensive drug control strategy. He, too, has stressed treatment as 
an important component in combating juvenile drug abuse. I look forward 
to working with the President, as well as with Attorney General 
Ashcroft, as we combat drug abuse in this country in a bipartisan 
fashion.
  This legislation recognizes that we must do more to prevent and treat 
substance abuse. Such efforts, it is safe to say, will prove well worth 
it. According to a report recently released by the National Center on 
Addiction and Substance Abuse at Columbia University in 1998, States 
spent $81.3 billion--fully 13.1 percent of total state spending--on 
substance abuse and addiction. Only $3 billion of this, however, was 
spent on prevention and treatment. The remaining $78 billion was spent, 
in the words of the study's authors, ``to shovel up the wreckage of 
substance abuse and addiction.'' Remarkably, these staggering numbers 
do not even include the amount of federal matching funds that states 
spend, for example, on Medicaid and welfare, or the spending of local 
governments--which bear most of the law enforcement burden, or private 
sector costs such as employee health care, lost productivity, and 
facility security. The report urges us, as policymakers, to reexamine 
our priorities and shift our attention to drug prevention and 
treatment.
  This bill does just that, and, I hasten to add, it does so without 
undermining in any way our commitment to supply reduction. Indeed, this 
bill, it can be said, ultimately will help to cut supply by reducing 
the demand for drugs among those who are the most consistent and 
addicted users.
  Whilte this legislation will prove enormously helpful, it is no 
substitute for what is our most effective tool for preventing drug 
abuse: good parenting. Demand reduction starts with educating all of 
America's children about the harmful, destructive nature of drugs, and 
that education must start at home. According to the 1999 PRIDE survey, 
students whose parents never or seldom talk to them about drugs are 
36.5 percent more likely to use drugs; in contrast, students whose 
parents talk to them often, or a lot, about drugs are 33.5 percent less 
likely to use drugs.
  Parents need to talk seriously to their children about the risks of 
drug use before they fall prey to peer pressure or drug dealers who 
want nothing more than to create new addicts. Parents need to stop 
deluding themselves into believing that moving to the suburbs, away 
from the temptations and evils of the inner cities, will prevent drug 
dealers from reaching their children. They need to stop thinking that 
it is always the other family's kid who is using drugs.
  Parents, grandparents, priests, pastors, rabbis, teachers, and 
everyone else involved in a child's life need to take an active role in 
educating our children about the dangers of drugs. Drug abuse knows no 
boundaries. It doesn't discriminate on the basis of gender, race, age, 
or class. It is truly an equal opportunity destroyer. Unless children 
are prepared with the knowledge and truth of how drugs will ruin their 
health and future, they are vulnerable to the lies of those who are 
peddling drugs.
  Sadly, studies reveal that many children will never have 
conversations with their parents about drug use. Some children have 
parents that are addicted to drugs, some have parents who are 
imprisoned, and some have parents who just don't understand how vital 
it is for them to talk to their children about drug use. This fact 
alone represents one important reason why communities and organizations 
need to be involved in educating both parent and children about the 
dangers of drug abuse.
  We need effective education and prevention programs in our schools 
and communities. Even for children blessed with dedicated, concerned 
parents, these school- and community-based programs are vitally 
important. Indeed, according to the 1999 PRIDE survey, students who 
never or seldom join in community activities are 52.6 percent more 
likely to use drugs. Additionally, students who report never taking 
part in gangs are 90.8 percent less likely to use drugs. It is clear 
that the more children hear the truth about what drug abuse and 
addiction can do to them, the more likely they will turn their backs on 
drug use and lead productive lives.
  To this end, this bill contains significant funding for drug abuse 
education and prevention programs in our schools and communities. It 
authorizes grants for school and community-based drug education and 
prevention programs that have been proven to be effective and research-
based. The bill also authorizes funding for the National Institutes of 
Health to continue its research toward identifying even more effective 
prevention and treatment programs. Learning how to treat drug addiction 
effectively is an inextricable component in America's battle to conquer 
drug abuse.
  An additional provision authorizes grants to eligible community-based 
organizations, including youth-serving organizations, faith-based 
organizations, and other community groups, to provide after-school or 
out-of-school programs that include a strong character education 
component. Another important provision authorizes funding for 
community-based organizations that provide counseling and mentoring 
services to children who have a parent or guardian that is 
incarcerated. We want all who can help to be in a position to help, and 
these drug education and prevention programs seek to get everyone in 
all communities involved.

[[Page 1760]]

  Mr. President, while I am confident these innovative drug education 
and prevention programs will help reduce the number of children who 
decide to use drugs, we also need to ensure that those who are addicted 
receive treatment. This bill authorizes, therefore, sizeable grants to 
States to provide residential treatment facilities specifically 
designed to treat drug-addicted juveniles. It is crucial that drug-
addicted children receive treatment while they are young before they 
ruin their lives and grow up to become hard core addicts, which often 
leads to criminal behavior.
  It does without saying that it is important to ensure that violent 
and repeat offenders are imprisoned and punished for their crimes. 
However, I believe that there is merit to giving nonviolent offenders, 
whose crimes are tied directly to their addictions, a chance to enter 
drug treatment in stead of prison. This bill contains several 
provisions that will assist States in providing nonviolent, drug-
addicted offenders with the opportunity to participate in drug 
treatment programs in lieu of incarceration.
  For example, one provision authorizes the Attorney General to make 
grants to State and local prosecutors for the purpose of developing, 
implementing, or expanding drug treatment alternatives to prison 
programs for nonviolent offenders. These programs are administered by 
prosecutors who determine which offenders are eligible to participate. 
All eligible offenders who participate are sentenced to, or placed 
with, a long-term, drug-free residential substance abuse treatment 
provider. If, however, the offender does not successfully complete 
treatment, he or she is required to serve a sentence of imprisonment 
with respect to the underlying crime.
  This program has been administered effectively by certain district 
attorneys in New York over the last decade. Last session, I worked hard 
with Senators Thurmond and Schumer, to get these very programs 
authorized so that other State and local prosecutors could benefit from 
this drug alternative to prison program. I look forward to the 
continuing support of Senators Thurmond and Schumer to ensure that this 
provision is enacted into law this session.
  This bill also reauthorizes the drug court program and authorizes 
juvenile substance abuse courts, both of which provide continuing 
judicial supervision over nonviolent offenders with substance abuse 
problems while allowing them to enter treatment programs as an 
alternative to prison.
  A high percentage of offenders who otherwise don't qualify for 
participation in alternatives to prison programs, but nonetheless have 
serious drug addictions, far too often are released from incarceration 
without ever receiving treatment. To address this issue, this bill 
authorizes funding to provide drug treatment services to inmates. This 
funding will go a long way in ensuring safer neighborhoods and a more 
productive society once drug addicted offenders are released from 
incarceration.
  To further ensure safer neighborhoods, the bill also promotes the 
successful reintegration of inmates into society by authorizing 
demonstration projects in the federal and state court systems that 
incorporate new strategies and programs for alleviating the public 
safety risk posed by released prisoners. These projects, which 
establish court-based programs for monitoring the return of offenders 
into communities, include drug treatment, as well as vocation and basic 
educational training. Each program uses court sanctions and incentives 
to encourage positive behavior.
  Finally, the bill contains a provision that requires the government 
to consider, on the same basis as other non-governmental organizations, 
faith-based organizations to provide the assistance under all programs 
authorized by this bill, as long as the program is implemented in a 
manner consistent with the first amendment. I am aware of some concerns 
Senators Leahy and Biden may have with this provision relating to the 
participation of faith-based organizations, and I am committed to 
working with them in an effort to address their concerns as the 
legislation moves through the process.
  Mr. President, this bill bespeaks a compassionate concern for those 
who suffer from drug addiction. By passing this bill, we will be 
telling these people that we have not given up hope for them, 
especially for our children, that we will offer the means to help them 
help themselves, and that we will not leave them behind to be preyed 
upon by those who would make a profit on their misery. Above all, this 
legislation demonstrates our unwavering commitment to rid our nation of 
drug abuse. To those who traffic drugs, let there be no mistake about 
our resolve: we will put you in jail when we catch you, but we will 
also fight you for the soul of every person you would prey upon. And, 
in time, we will change them from helpless targets for your poison to 
productive, responsible members of our society. I invite my colleagues 
to join us in this effort.
  I ask unanimous consent that a section-by-section summary of the bill 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Drug Abuse Education, Prevention, and Treatment Act of 2001--Summary


                 Title I: Offenses Involving Juveniles

     Sec. 101. Increased Penalties for Using Minors To Traffic 
         Drugs Across the Border
       This section directs the Sentencing Commission to review 
     and amend, if appropriate, the Sentencing Guidelines with 
     respect to offenses relating to the use of a minor to traffic 
     controlled substances across the border and to consider 
     whether the base offense level for such offenses should be 
     increased to level 20.
     Sec. 102. Increased Penalties for Drug Offenses Committed in 
         the Presence of Minors
       This section directs the Sentencing Commission to review 
     and amend, if appropriate, the Sentencing Guidelines with 
     respect to offenses relating to drug offenses committed in 
     the line of sight or in the residence of a minor under the 
     age of 16. The Sentencing Commission shall consider creating 
     an enhancement of 2 offense levels or 1 additional year 
     (whichever is greater) and 4 offense levels or 2 additional 
     years (whichever is greater) for subsequent offenses.
     Sec. 103. Increased Penalties for Using Minors To Distribute 
         Drugs
       This section directs the Sentencing Commission to review 
     and amend, if appropriate, the Sentencing Guidelines to 
     provide an appropriate sentencing enhancement for any offense 
     involving the use of minors to distribute drugs.
     Sec. 104. Increased Penalties for Distributing Drugs To 
         Minors
       21 U.S.C. 859 prohibits the distribution of controlled 
     substances to a person under 21 years old. This section 
     directs the Sentencing Commission to review and amend, if 
     appropriate, the Sentencing Guidelines to provide an 
     appropriate sentencing enhancement for offenses involving the 
     use of minors to distribute drugs.
     Sec. 105. Increased Penalties for Distributing Drugs Near 
         Schools
       21 U.S.C. 860 prohibits the distribution or manufacture of 
     controlled substances near schools and other places 
     frequented by minors. This section directs the Sentencing 
     Commission to review and amend, if appropriate, the 
     Sentencing Guidelines to create a sentencing enhancement for 
     such violations.
     Sec. 106. Increased Penalties for Using Federal Property to 
         Manufacture Controlled Substances
       This section amends the Controlled Substances Act by 
     doubling the maximum punishment authorized by law for anyone 
     who cultivates or manufactures a controlled substances on any 
     property in whole or in part owned by or leased to the US or 
     any department or agency thereof. This section directs the 
     Sentencing Commission to review and amend, if appropriate, 
     the Sentencing Guidelines to provide an appropriate 
     sentencing enhancement for any offense under 21 U.S.C. 
     841(b)(5) that occurs on Federal property.
     Sec. 107. Clarification of Length of Supervised Release Terms 
         in Controlled Substance Cases
       This section clarifies an apparent conflict in the code 
     regarding the length of supervised release in controlled 
     substance cases.
     Sec. 108. Supervised Release Period After Conviction for 
         Continuing Criminal Enterprise
       Any sentence imposed for violating the continuing criminal 
     enterprise statute shall include a term of supervised release 
     of not less than 10 years, and if there was a prior 
     conviction, of not less than 15 years in addition to the term 
     of imprisonment.


                 Title II: Drug-Free Prisons and Jails

     Sec. 201. Drug-Free Prisons and Jails Incentive Grants
       This section authorizes grants to eligible States and 
     Indian tribes to encourage the establishment and maintenance 
     of drug-free

[[Page 1761]]

     prisons and jails. Eligible drug-free programs shall include: 
     (1) a zero-tolerance policy for drug use or presence in State 
     facilities, including routine sweeps and inspections, random 
     and frequent drug tests, and improved screening for drugs; 
     (2) enforcement of penalties, including prosecution for the 
     introduction, possession, or use of drugs in any prison or 
     jail; (3) implementation of residential drug treatment 
     programs; and (4) drug testing of all inmates upon intake and 
     release from incarceration, as appropriate. Programs may 
     include a system of incentives for prisoners to participate 
     in counter-drug programs such as treatment and to be housed 
     in wings with greater privileges, but incentives may not 
     include the early release of any prisoner convicted of a 
     crime of violence. Authorizes $50 million a year for three 
     years.



     Sec. 202. Jail-Based Substance Abuse Treatment Programs
       This section authorizes $100 million in additional funding 
     for residential substance abuse treatment programs, 
     outpatient treatment programs, and aftercare treatment 
     services in State and local prisons and jails.
     Sec. 203. Mandatory Revocation of Probation and Supervised 
         Release for Failing Drug Tests
       This section amends 18 U.S.C. 3565(b) and 3583(g) to 
     provide for mandatory revocation of probation or supervised 
     release if a defendant tests positive for illegal controlled 
     substances more than three times over the span of one year.
     Sec. 204. Increased Penalties for Providing an Inmate With a 
         Controlled Substance
       This section directs the Sentencing Commission to review 
     and amend, if appropriate, the Sentencing Guidelines with 
     respect to any offense relating to providing a Federal 
     prisoner a Schedule I or II controlled substance and to 
     consider increasing the base offense level for such 
     violations to not less than level 26. The Sentencing 
     Commission shall also consider increasing the base offense 
     level for such offenses by not less than 2 offense levels if 
     the defendant is a law enforcement or correctional officer or 
     employee, or an employee of the DOJ, at the time of the 
     offense.


            title III: treatment, education, and prevention

     Sec. 301. Prosecution Drug Treatment Alternative to Prison
       This section authorizes the Attorney General to make grants 
     to State and local prosecutors for the purpose of developing, 
     implementing, or expanding drug treatment alternatives to 
     prison programs for non-violent offenders. These programs are 
     administered by prosecutors who determine which offenders are 
     eligible to participate. All eligible offenders who 
     participate are sentenced to or placed with a long term, drug 
     free residential substance abuse treatment provider. If the 
     offender does not successfully complete treatment, he is 
     required to serve a sentence of imprisonment with respect to 
     the underlying crime. Authorizes $30 million a year for three 
     years.
     Sec. 302. Juvenile Substance Abuse Courts
       This section authorizes the Attorney General to make grants 
     to States and local governments to establish programs that 
     continue judicial supervision over non-violent juvenile 
     offenders with substance abuse problems with integrate 
     administration of other sanctions and services, which 
     include: (1) mandatory testing for controlled substances; (2) 
     substance abuse treatment for participants; (3) probation, 
     diversion, or other supervised release involving the 
     possibility of prosecution, confinement, or incarceration 
     based on noncompliance with program requirements; and (4) 
     aftercare services, such as relapse prevention. Authorizes 
     $50 million to be appropriated each year for FY 2002-2004.
     Sec. 303. Expansion of Drug Abuse Education and Prevention 
         Efforts
       This section allows the Administrator of the Substance 
     Abuse and Mental Health Services Administration (SAMHSA) to 
     make grants to public and nonprofit private entities to carry 
     out school-based programs concerning the dangers of abuse of 
     and addiction to illicit drugs and to carry out community-
     based abuse and addiction prevention programs that are 
     effective and research-based. The Administrator shall give 
     priority in making grants to rural and urban areas that are 
     experiencing a high rate or rapid increase in abuse, and the 
     amounts awarded may be used to carry out various programs, 
     including school-based and community-based programs that 
     focus on populations that are most at-risk for abuse of or 
     addiction to illicit drugs. Authorizes $100 million to be 
     appropriated for FY 2002 and such sums as necessary for each 
     succeeding FY.
     Sec. 304. Funding for Treatment in Rural States and 
         Economically Depressed Communities
       This section authorizes $50 million for grants to States to 
     provide treatment facilities in the neediest Rural States and 
     economically depressed communities that have high rates of 
     drug addiction but lack resources to provide adequate 
     treatment.
     Sec. 305. Funding for Residential Treatment Centers for Women 
         with Children
       This section authorizes $10 million for grants to States to 
     provide residential treatment facilities for methamphetamine, 
     heroin, and other drug addicted women who have minor 
     children. These facilities offer specialized treatment for 
     addicted mothers and allow their children to reside with them 
     in the facility or nearby while treatment is ongoing.
     Sec. 306. Drug Treatment for Juveniles
       This section authorizes $100 million a year for grants to 
     States to provide residential treatment facilities designed 
     to treat drug addicted juveniles.
     Sec. 307. Coordinated Juvenile Services Grants
       This section allows existing Juvenile Justice and 
     Delinquency and Prevention funds to be used to make grants to 
     encourage Federal, State, and local agencies (including 
     schools) and private childrens service providers to 
     coordinate the delivery of mental health and/or substance 
     abuse services to children at risk. Such grants leverage 
     limited Federal, State, and community-based adolescent 
     services to help fill the large unmet need for adolescent 
     mental health and substance abuse treatment.
     Sec. 308. Expansion of Research
       This section authorizes funding for the National Institutes 
     of Health to enter into cooperative agreements to conduct 
     research on drug abuse treatment and prevention and to 
     establish up to 12 new National Drug Abuse Treatment Clinical 
     Trials Network (CTN) centers to develop and test an array of 
     behavioral and pharmacological treatments and to determine 
     the conditions under which novel treatments are successfully 
     adopted by local treatment clinics. Authorizes $76.4 million 
     to be appropriated in 2002 and such sums as are necessary for 
     FY 2003-2005.
     Sec. 309. Comprehensive Study by National Academy of Sciences
       This section directs the Attorney General to enter into 
     contracts to (1) evaluate the effectiveness of federally 
     funded programs for preventing youth substance abuse; (2) 
     identify federal programs and programs that receive federal 
     funds that contribute to reductions in youth substance abuse; 
     and (3) identify programs that have not achieved their 
     intended results and to make recommendations on programs that 
     have proven successful and those that should have their 
     funding terminated or reduced because of lack of 
     effectiveness.
     Sec. 310. Report on Drug-Testing Technologies
       This section directs the National Institute on Standards 
     and Technology to conduct a study of drug-testing 
     technologies to identify and assess the efficacy, accuracy, 
     and usefulness of such technologies.
     Sec. 311. Use of National Institutes of Health Substance 
         Abuse Research
       This section ensures that the research on alcohol and drug 
     abuse conducted by NIDA is disseminated to treatment 
     practitioners to aid them in the treatment of addicts.


            Title IV: School Safety and Character Education

                       Subtitle A--School Safety

     Sec. 401. Alternative Education Demonstration Project Grants
       This section authorizes funding for the Attorney General, 
     in consultation with the Secretary of Education, to make 
     grants to State educational agencies or local educational 
     agencies to establish not less than 10 demonstration projects 
     that enable the agencies to develop models and carry out 
     alternative education for at-risk youths. This section 
     authorizes $15 million a year for FY 2002 through 2004.
     Sec. 402. Transfer of School Disciplinary Records
       This section requires a State that receives federal funds 
     to have a procedure to facilitate the transfer of 
     disciplinary records by local educational agencies to any 
     private or public elementary school or secondary school.

                    Subtitle B--Character Education

     Sec. 411. National Character Achievement Award
       This section establishes a National Character Achievement 
     Award for students who distinguish themselves as models of 
     good character.
     Sec. 421-424. Preventing Juvenile Delinquency through 
         Character Education
       This section authorizes $100 million for the Secretary of 
     HHS, in consultation with the Attorney General, to award 
     grants to eligible community-based organizations, including 
     youth serving organizations, businesses, and other community 
     groups, to provide after school or out of school programs to 
     youth that include a strong character education component. 
     Eligible organizations must have a demonstrated capacity to 
     provide after school or out of school programs to youth. 
     Character education is defined as an organized educational 
     program that works to reinforce core elements of character, 
     including caring, civic virtue and citizenship, justice and 
     fairness, respect, responsibility, and trustworthiness.
     Sec. 431-434. Counseling, Training, and Mentoring Children of 
         Prisoners
       This section authorizes $25 million for the Attorney 
     General to award grants to community-based organizations 
     providing counseling, training, and mentoring services to

[[Page 1762]]

     America's most at-risk children and youth in low-income and 
     high-crime communities who have a parent or legal guardian 
     that is incarcerated in a Federal, State, or local 
     correctional facility. Such services will include counseling, 
     including drug prevention counseling; academic tutoring, 
     including online computer academic programs that focus on the 
     development and reinforcement of basic skills; technology 
     training; job skills and vocational training; and confidence 
     building mentoring services.


                TITLE V: REESTABLISHMENT OF DRUG COURTS

     Sec. 501. Reauthorization of Drug Courts
       This section reauthorizes the drug court programs that 
     provide continuing judicial supervision over non-violent 
     offenders with substance abuse problems and allow non-violent 
     offenders to enter treatment programs as an alternative to 
     prison. Authorizes $50 million to be appropriated in 2002 and 
     such sums as necessary for 2003-2004.


 TITLE VI: PROGRAM FOR SUCCESSFUL REEENTRY OF CRIMINAL OFFENDERS INTO 
                           LOCAL COMMUNITIES

     Sec. 601-618. Federal Reentry Demonstration Projects
       This section authorizes demonstration projects in Federal 
     judicial districts, the District of Columbia, States, and in 
     the Federal Bureau of Prisons using new strategies and 
     emerging technologies that alleviate the public safety risk 
     posed by released prisoners by promoting their successful 
     reintegration into the community. This section also 
     establishes court-based programs to monitor the return of 
     offenders into communities, which include drug treatment and 
     aftercare, mental and medical health treatment, vocational 
     and basic educational training. Each program uses court 
     sanctions and incentives to promote positive behavior and 
     graduated levels of supervision within the community 
     corrections facility to promote community safety.


            TITLE VII: ASSISTANCE BY RELIGIOUS ORGANIZATIONS

     Sec. 701. Assistance by Religious Organizations
       This section provides that the government shall consider, 
     on the same basis as other non-governmental organizations, 
     faith-based organizations to provide the assistance under all 
     programs authorized by this bill, as long as the program is 
     implemented in a manner consistent with the First Amendment.

  Mr. LEAHY. Mr. President, today I join with Senator Hatch and 
Senators Biden, DeWine, and Thurmond to introduce the Drug Abuse 
Education, Prevention, and Treatment Act of 2001. This bill provides a 
comprehensive approach to drug treatment, prevention, and enforcement. 
It is my hope that the innovative programs established by this 
legislation will assist all of our States in their efforts to address 
the drug problems that most affect our communities.
  No community is immune from the ravages of drug abuse. My own State 
of Vermont has one of the lowest crime rates in the nation, yet we are 
experiencing serious troubles because of the abuse of heroin and other 
drugs. Recent estimates indicate that heroin use in Vermont has doubled 
in just the past three years, and the number of people seeking drug 
treatment has risen even more rapidly. The average age of a first-time 
heroin user dropped from 27 to 17 during the 1990s, signaling a sharp 
rise in teenage drug abuse. The consequences of this rise have made 
themselves all too clear over the past months.
  On January 3, Christal Jones, a 16-year-old girl from Burlington, was 
murdered in New York City. According to news reports, she was recruited 
in Burlington to move to New York and become part of a prostitution 
ring, and she was motivated by a desire to get money to buy heroin. 
When she died, drugs were found in her body, although they were not the 
cause of her death. And Christal Jones' tragedy apparently is not 
unique as many as a dozen Vermont girls may have been involved in this 
New York ring. And since her death, others have come forward to say 
that teenage girls in Burlington are prostituting themselves to get 
money to buy heroin.
  These disturbing reports followed by only a few months a heinous 
drug-related triple murder in Rutland, Vermont. In that case, 20-year-
olds Robert Lee and Donald Fell reportedly spent the night drinking and 
taking crack cocaine, and then allegedly killed Fell's mother and her 
friend. Looking to get out of Vermont, they then allegedly carjacked a 
woman arriving for work at a local supermarket and drove to New York, 
where they are accused of beating her to death. Such a case surely 
deserves a strong law enforcement response, and last Thursday the 
accused were indicted by a federal grand jury for carjacking resulting 
in death and kidnapping, among other charges.
  Such violence is rarely visited upon my State. When it is, a swift 
law enforcement response is necessary, and we must do what we can to 
support the efforts of law enforcement to safeguard our communities. 
But we kid ourselves if we think that law enforcement alone, with ever-
increasing penalties, is the answer to the drug problem. Though 
effective enforcement of our drug laws, particularly to deter 
involvement of our young people, is a critical component, this is 
simply insufficient to meet the severe social effects of drug abuse. We 
need to provide a comprehensive approach to the drug problems of my 
State and our nation. In Vermont, as the Rutland Daily Herald recently 
editorialized, on January 26, 2001, ``agencies that treat addictions'' 
need ``a boost in resources and manpower.'' Those who work to prevent 
drug abuse from occurring in the first place need our strong support.
  I have tried to boost Vermont's anti-drug efforts by working to 
provide funding for drug prevention, law enforcement, and drug 
treatment projects. For example, I secured funding for the Vermont 
Coalition of Teen Centers in last year's Commerce-Justice-State 
Appropriations bill. These teen centers give adolescent Vermonters 
recreational alternatives to drug use. I was also able to help provide 
significant funding for the Vermont Multi-Jurisdictional Drug Task 
Force, facilitating the ability of law enforcement officials to work 
together to tackle Vermont's drug problems. In addition, at my request 
Congress approved substantial funding for Vermont to plan and establish 
a long-term residential treatment facility for adolescents.
  I believe that the bill I introduce today with Senator Hatch will 
build upon those important efforts by providing a substantial boost for 
treatment, law enforcement, and prevention, both in Vermont and across 
the nation. It contains numerous grant programs to aid States and local 
communities in their efforts to prevent and treat drug abuse. Of 
particular interest to the residents of my State, it establishes drug 
treatment grants for rural States and authorizes money for residential 
treatment centers for mothers addicted to heroin, methamphetamines, or 
other drugs.
  This legislation also will help States and communities reduce drug 
use in prisons through testing and treatment, an effort I proposed in 
the Drug Free Prisons Act I introduced in the last Congress. It will 
provide funding for programs designed to reduce recidivism through 
funding drug treatment and other services for former prisoners after 
release. In addition, this bill will reauthorize drug courts another 
step I proposed in the Drug Free Prisons Act and create juvenile drug 
courts.
  Finally, the bill directs the Sentencing Commission to review and 
amend penalties for a number of drug crimes involving children. For 
example, in addressing circumstances such as those surrounding the 
death of Christal Jones, the bill instructs the Sentencing Commission 
to amend its guidelines to provide for any necessary sentencing 
enhancement for criminals who distribute drugs to minors in order to 
lure a minor into or keep a minor engaged in prostitution or other 
criminal activity.
  In short, there are programs in this legislation to benefit all 
Americans whose lives are disrupted by drug abuse in their families and 
communities. I strongly recommend this bipartisan bill to my 
colleagues, and hope that we can move quickly to make it law.
  As I mentioned earlier, I have worked to provide necessary funding 
for treatment, prevention, and enforcement efforts in Vermont. Last 
year, I secured $150,000 for the Vermont Coalition of Teen Centers, 
$400,000 for the Vermont Drug Task Force, $100,000 for an adolescent 
treatment facility, two grants worth $500,000 for a balanced and 
restorative justice project, $1.7 million in Byrne law enforcement 
grants, two

[[Page 1763]]

grants worth $560,000 to reduce underage drinking, about $725,000 for 
Drug Free Communities Support Programs throughout Vermont, and $274,535 
for Residential Substance Abuse Treatment, RSAT, programs in the 
Vermont Corrections Department. In 1999, I worked to procure $270,611 
for RSAT programs for Vermont prisons and jails, $75,000 for the 
Vermont Coalition of Teen Centers and an additional $74,976 for the 
Essex Teen Center, two grants worth $660,000 to combat underage 
drinking, and about $172,000 for Drug Free Community Support programs 
throughout Vermont. And in 1998, I helped secure $249,864 for balanced 
and restorative justice programs, $274,938 for RSAT programs, $1.9 
million in Byrne law enforcement grants, $360,000 to combat drunk 
driving, and $424,494 in a Safe Kids/Safe Streets grant.
  This legislation will provide additional ways that Vermont and other 
States can benefit from federal assistance to prevent drug abuse and 
drug-related crime. I would like to describe in more detail some of its 
most important aspects.
  This bill authorizes a wide variety of treatment and prevention 
programs. Treatment and prevention efforts are often overshadowed by 
law enforcement needs. Indeed, a recent study by the Center on 
Addiction and Substance Abuse, CASA, showed that of every dollar States 
spent on substance abuse and addiction, only four cents went to 
prevention and treatment. The States and the Federal government have 
undeniably important law enforcement obligations, but we must do more 
to balance those obligations with farsighted efforts to prevent drug 
crimes from happening in the first place.
  As I have said, heroin is an increasing problem in Vermont. In other 
States, methamphetamines or other drugs present a growing challenge. 
This legislation will help States address their most pressing drug 
problems, and places a particular emphasis on States that may not have 
been able to address their treatment and prevention needs in the past. 
Indeed, among many other provisions, the bill offers funding for rural 
States like Vermont to establish or enhance treatment centers. It 
instructs the Director of the Center for Substance Abuse Treatment to 
make grants to public and nonprofit private entities that provide 
treatment and are approved by State experts. This will allow the 
Vermont agencies looking to provide heroin treatment or to prevent 
heroin abuse in the first place to acquire Federal funding to help in 
their efforts.
  The Drug Abuse Prevention and Treatment Act also authorizes funding 
for residential treatment centers that treat mothers who are addicted 
to heroin, methamphetamines, or other drugs. This will help mothers and 
the children who depend on them to rebuild their lives it will keep 
families together. And I hope it will help avoid further stories like 
one that appeared in last Sunday's edition of the Burlington Free 
Press, in which a young mother told a reporter how heroin ``made it 
easier for [her] to take care of [her] kids.''
  The bill also calls for funding drug treatment programs for 
juveniles. As the tragic story of Christal Jones and the disturbing 
reports about other girls in her position have shown, juveniles can see 
their lives quickly deteriorate under the influence of drugs. This is 
why I have worked to provide Vermont with funding to establish a long-
term residential treatment facility for adolescents. I hope to continue 
that effort through this bill, in the hope that we may be able to 
prevent future tragedies.
  Our efforts here must include reducing the lure of drugs, and 
educating our kids and making sure they have recreational alternatives 
are two key components. In light of that, this bill authorizes grants 
to carry out school- and community-based prevention and education 
programs, with priority given to rural and urban areas experiencing 
drug problems. It provides additional funding for after-school 
programs. Finally, it authorizes funding for States to establish 
demonstration projects of alternative education for at-risk youths. 
These steps should improve the quality and availability of drug 
education and prevention efforts throughout the United States.
  In addition to providing additional funds for treatment and 
prevention, the bill directs the United States Sentencing Commission to 
review existing criminal penalties and provide any necessary increases 
for drug crimes involving juveniles. In particular, the Sentencing 
Commission must review the current penalties for distributing drugs to 
minors, using minors to distribute drugs, trafficking near a school, 
and using Federal property to grow or manufacture controlled 
substances. I would like to highlight one provision in particular in my 
comments today.
  This bill calls for the Sentencing Commission to amend its guidelines 
to provide for a specific sentencing enhancement for anyone who 
distributes drugs to minors in order to lure a minor into or keep a 
minor engaged in prostitution or other criminal activity. Let me 
explain why this provision matters. If the law enforcement officials 
investigating the death of Christal Jones find that the person or 
people who brought her to New York and prostituted her were giving or 
selling her heroin to entice her, the punishment should be more severe. 
This provision will give prosecutors an additional tool to fight such 
odious conduct.
  I would also like to commend the approach taken in the criminal 
provisions in this legislation. Instead of imposing mandatory minimums, 
we have invested discretion in the Sentencing Commission to determine 
appropriate penalties. A 1997 study by the RAND Corporation of 
mandatory minimum drug sentences found that ``mandatory minimums are 
not justifiable on the basis of cost-effectiveness at reducing cocaine 
consumption, cocaine expenditures, or drug-related crime.'' Despite 
this study and mounting evidence of prison overcrowding, legislators 
continue to propose additional mandatory minimums. In light of the 
persistence of that idea, this legislation calls for a new study of the 
issue, including whether mandatory minimums have a disproportionate 
impact on any racial or ethnic groups and whether they are an 
appropriate vehicle to punish nonviolent offenders.
  Last year I introduced the Drug Free Prisons Act, which authorized 
grants to States to facilitate treatment and testing programs in 
prisons and jails. This bill provides resources to achieve the same 
goal. It is critical that our prisons be drug-free, both because 
lawbreaking within our correctional system is a national embarrassment, 
and because prisoners who are released while still addicted to drugs 
are far more likely to commit future crimes than prisoners who are 
released sober. This bill will provide needed help to address drug 
abuse in prisons throughout the country. It authorizes $50 million for 
drug-free prisons and jails bonus grants, allows States to use 
Residential Substance Abuse Treatment, RSAT, grants to provide services 
for inmates or former inmates, and reauthorizes funding for substance 
abuse treatment in Federal prisons.
  As Joseph Califano, Jr., the president of CASA and former secretary 
of Health, Education, and Welfare, told the National Press Club last 
month: ``The next great opportunity to reduce crime is to provide 
treatment and training to drug and alcohol abusing prisoners who will 
return to a life of criminal activity unless they leave prison 
substance free and, upon release, enter treatment and continuing 
aftercare.'' This legislation will accomplish both of those goals.
  A prior CASA study found that drug and alcohol abuse was implicated 
in the crimes and incarceration of 80 percent of those currently 
serving time in America's prisons. This finding shows that we have a 
prison population that has a history of substance abuse, and will seek 
out opportunities to continue using drugs while imprisoned. Of course, 
if prisoners are using drugs in prison, this will create serious 
behavioral and other problems that corrections officers will have to 
address, at no small risk to them.
  The problem does not end there. The same CASA study shows that 
inmates who are illegal drug and/or alcohol

[[Page 1764]]

abusers are the most likely to be repeat offenders. In fact, the study 
concluded that 61 percent of state prison inmates who have two prior 
convictions are regular drug users. The strong link between drug use 
and recidivism cannot be ignored. Prison should provide an opportunity 
for us to break this cycle and therefore reduce crime. We can do this 
through a concerted effort to test prisoners for drug use and penalize 
those who test positive and provide adequate drug treatment so that 
prisoners can lead productive, non-criminal lives upon their release.
  This approach to reducing drug use and addiction in prisons has the 
support of Jim Walton, Vermont's Commissioner of Public Safety, and 
John Perry, the Director of Planning for the Vermont Department of 
Corrections, who work with these issues every day. I have always valued 
their counsel, as they have first-hand knowledge of the real law 
enforcement needs in my state. They both feel strongly that the bill 
will give law enforcement the tools it needs to test and treat offender 
populations, both in jail and in the community. I hope and expect that 
this bill will have the same effect across the country.
  In addition to providing funding for drug treatment and testing in 
prisons, this legislation also adopts a proposal made by Senator Biden 
in both this Congress and the last that would provide funding for 
Federal and State programs designed to ease the transition of criminal 
offenders back into society after their release. It establishes court-
based programs to monitor the return of offenders into communities. 
These programs include drug treatment and aftercare, mental and medical 
health treatment, vocational and educational training, life skills 
instructions, and assistance in obtaining suitable affordable housing. 
Each program uses court sanctions and incentives to promote positive 
behavior and graduated levels of supervision within the community 
corrections facility to promote community safety. I commend Senator 
Biden for his leadership on this program.
  The bill also re-establishes the drug courts program and re-
authorizes funding for it, as I proposed in last year's Drug Free 
Prisons Act. The majority repealed the authorization of the drug courts 
program in the Omnibus Consolidated Rescissions and Appropriations Act 
of 1996, in an apparent attempt to discredit Democratic programs. In my 
view, effective programs dealing with drug abuse should not be used as 
political footballs. That is why the Congress has continued to fund 
drug courts in every year's appropriations acts. This has been the 
right decision, and we should undo the repeal.
  Drug courts provide the opportunity to deal systematically with 
nonviolent drug offenders at a substantial savings to taxpayers. 
Instead of jailing these nonviolent offenders, the courts can order 
alternative punishments that are mixed with mandatory testing and drug 
treatment and human services such as education or vocational training. 
Meanwhile, imprisonment is held out as a stick to ensure good behavior. 
To qualify for federal assistance, a drug court program must mandate 
periodic drug testing during any supervised release or probation 
periods, provide drug abuse treatment for each participant, and hold 
out the possibility of prosecution, confinement, or incarceration for 
noncompliance or failure to show satisfactory process. Violent 
offenders are defined quite broadly, so we can be confident that we are 
not funding programs that put dangerous people back on the streets.
  In addition to reauthorizing drug courts for adults, this legislation 
authorizes the Attorney General to provide grants to State and local 
governments to establish juvenile drug courts, extending the drug court 
model that has shown significant promise in dealing with adult 
offenders to juveniles. Juvenile drug courts should provide a way to 
reach out to younger offenders before they turn to a life of crime, 
helping to save both lives and significant government resources.
  Finally, I would like to comment on the inclusion of charitable 
choice language in this legislation to allow religious groups to 
compete for grants on the same basis as other groups. Although the 
language in this bill mirrors language that was passed in the 
Children's Health Act last year as well as in previous legislation, I 
have serious reservations about it. I know that many of my colleagues 
share those reservations.
  Charitable choice is going to be a significant issue during this 
Congress. I would have preferred that we have hearings about charitable 
choice before including it in this bill, and I made my feelings known 
to Senator Hatch. I asked him to introduce the bill without the 
language and consider adding it later if specific language could be 
crafted for which there was bipartisan support. But Senator Hatch was 
committed to including this language in the bill as introduced. Let me 
be clear: its inclusion here does not represent my endorsement. As this 
legislation is considered by the Committee and the Senate, we need to 
give considerable thought to the approach taken here. I intend to work 
with Senator Hatch and the other sponsors of the bill to ensure that 
the important protections and prohibitions of the First Amendment are 
fully respected. At the very least, we need to ensure that those who 
receive federal drug treatment and prevention funds are trained 
professionals, and that the government funds are not used in any way, 
directly or indirectly, to support or promote discrimination.
  At the same time, I believe that this bill, taken as a whole, will do 
a great deal of good. While charitable choice language is in this bill 
today, I have made no commitment to having this charitable choice 
language in the bill when Congress passes it. My commitment is to help 
improve drug treatment, prevention, and education throughout the United 
States.
  I ask unanimous consent to print in the Record two newspaper 
articles.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          [From the Rutland Daily Herald (VT), Jan. 26, 2001]

                            Now Is the Time

       It is time for Vermont lawmakers to take the initiative in 
     pushing for a comprehensive anti-drug program that will 
     respond constructively to the increased use of dangerous 
     drugs in Vermont.
       Major drug busts in the Rutland area, as well as a rise in 
     crimes related to drug addiction, have pointed to the heroin 
     problem in the region. City leaders have taken needed steps 
     to bolster efforts by city police to address the problem, and 
     Mayor John Cassarino has offered a tax proposal that would 
     provide necessary funding in the future.
       Statewide, the use of heroin has probably doubled in the 
     past three years. The number of Vermonters seeking treatment 
     rose from 164 to 344 in that time. That number doesn't take 
     into account the users who don't seek treatment.
       The Vermont State Police have made a compelling case for 
     boosting manpower, which has eroded substantially in the past 
     eight years. And Gov. Howard Dean has made the fight against 
     heroin one of his priorities.
       But so far Dean has not come up with resources for a long-
     term attack on the problem. The Legislature ought to use this 
     moment to take Dean's initiative further.
       Dean is well known for his punitive attitude toward drugs 
     and for his lack of faith in the efficacy of treatment for 
     drug users. But aggressive treatment, combined with 
     aggressive law enforcement, has not been tried. And at this 
     late date in the war on drugs, we ought to realize that law 
     enforcement alone has not done the job.
       Law enforcement agencies at the local and state levels can 
     use a boost in resources and manpower. But so can agencies 
     that treat addictions. Effective treatment is labor-intensive 
     and could be made available to people both inside and outside 
     of the state's corrections system.
       Mental health workers know that drug addiction is not an 
     easy affliction to cure. Addicts sometimes want no part of 
     treatment. But the state could establish institutions that 
     would respond more effectively to people who need help. Drug 
     courts could establish a regimen of treatment that would 
     expose people in state custody to the kind of help they may 
     never have seen before.
       Dean has promised to move quickly to set up clinics for 
     drug treatment, following passage last year of legislation 
     allowing for methadone treatment. But as Dean has often said, 
     methadone alone will not solve the problem. Methadone needs 
     to be part of a larger program of treatment.
       As of last week, only two hospitals in Vermont had 
     expressed firm interest in establishing methadone clinics. 
     Rutland Regional Medical Center is waiting to determine what 
     resources will be available and

[[Page 1765]]

     what kind of program the regulations will establish. Health 
     care facilities such as RRMC need to be given the support and 
     the resources to do the job.
       Vermont is a small enough state that it could pioneer 
     methods for treating drug problems that go beyond the obvious 
     first step of locking people up. It would be in the state's 
     interest to do so both to prevent the kind of crime and 
     dereliction that is a drain on any community and to rescue 
     Vermonters who succumb to the deathly appeal of drugs.
       A package that included both law enforcement and treatment 
     measures might draw bipartisan support. Vermonters are not 
     helpless before the scourge of drug addiction if they have 
     the will to act.
                                  ____


          [From the Burlington Free Press (VT), Feb. 7, 2001]

                    Vt. Teen's Death Ruled Homicide

                           (By Sam Hemingway)

       Christal Jean Jones, the 16-year-old Burlington girl found 
     dead in a Bronx apartment Jan. 3, was the victim of a 
     homicide, according to New York City's top medical officer.
       ``The cause of death was asphyxiation, and the manner of 
     death is homicide,'' Ellen Borakove; spokeswoman for the New 
     York City Medical Examiner's Office, confirmed Tuesday.
       The medical examiner relied on police investigation and 
     toxicology tests to reach his conclusion. Borakove said Jones 
     was smothered.
       Drugs were found in Jones' body, but Borakove declined to 
     say what the drug was or how it had been administered.
       ``Whatever substance was found was not a contributing 
     factor in her death,'' Borakove said.
       Jones' mother, Kathleen Wright, received the news during an 
     emotional 11:30 a.m. phone call Tuesday from Borakove's 
     office.
       ``It's just what I expected,'' a weeping Wright said after 
     hanging up the phone. ``She was injected with drugs and then 
     she was killed.''
       Local and federal authorities say Jones was part of a 
     prostitution ring operating out of an apartment in the Hunts 
     Point section of the Bronx last fall and this winter. 
     Authorities also say drugs, particularly heroin, were 
     involved.
       As many as a dozen Vermont girls, many in the custody of 
     the state Social & Rehabilitation Services department at the 
     time, have been involved, say some of the teens who have 
     traveled to New York, their parents and authorities.
       Gov. Howard Dean has ordered an investigation into SRS's 
     handling of the girls' cases.
       Jose Rodriguez, a part-time Vermont resident with a 
     criminal record here, is being held on $100,000 bail in a New 
     York City prison because New York officials suspect he might 
     be involved in Jones' death. However, Rodriguez has been in 
     jail since Dec. 11, when he was arrested on two charges of 
     promoting prostitution and one charge of statutory rape 
     involving another Vermont teen-ager.
       At prosecutors' request his initial bail of $10,000 was 
     increased to $100,000.
       ``Our sympathy goes out the (Jones) family,'' Eric Sachs, 
     Rodriguez's court-appointed attorney, said Tuesday. ``We 
     don't wish that on anybody, especially a young girl.''
       He said Rodriguez has cooperated fully with authorities and 
     knows nothing about Christal Jones' death.
       ``He's in jail. Obviously, we know he didn't do it,'' Sachs 
     said.
       When he was told Tuesday that the medical examiner had 
     ruled Jones' death a homicide, Sachs called the District 
     Attorney's Office.
       He was assured, he said, ``there is no Christal Jones case, 
     and there is no accusation that my client is involved.''
       ``Nobody has ever seen him'' in the Zerega Avenue apartment 
     in which Jones was killed, Sachs said. ``It's not his 
     apartment. He has no connection to this apartment. Where 
     these girls live, or don't--he doesn't know.''
       However, in the police affidavit outlining the prostitution 
     and rape charges against Rodriguez, New York Police Office 
     Sean Iannucci said the victim said the crimes were committed 
     at the apartment where Jones' body was found.
       If convicted, Sachs said, Rodriguez faces a maximum jail 
     term of four years for the rape charge and 15 years for each 
     of two prostitution charges.
       Investigators who have interviewed witnesses and some of 
     those involved say Rodriguez was intimately linked to the 
     girls and a prostitution ring.
       ``I will kill you if you try to leave; I know people in 
     Vermont and New York,'' Rodriguez was said to have told two 
     of the Vermont girls before his arrest. Police also said he 
     beat one of the girls after learning she had tried to call a 
     family member for help.
       Since Jones' death, many of those involved have gone into 
     hiding. Some parents of the girls known to frequent New York 
     won't talk. When approached, they crack the door only to say 
     they don't know where their daughters are. Their fear is 
     palpable.
       In the Old North End and the King Street area of 
     Burlington, Jones' death--and life-- are well known. Local 
     residents are painfully aware of the extent of heroin use and 
     the hold the drug has over their neighbors. They say there is 
     no easy resolution to the problem they have watched reach 
     epidemic propositions in the past five years.
       ``We've got the demand,'' said Mike Larow, who owns Larow's 
     Market on North Street. ``Everyone seems to be afraid to 
     admit that it's here.''
       A federal grand jury in Burlington is reviewing evidence in 
     the case.
       Vermont state officials and local police knew of the 
     prostitution ring in the fall, according to a variety of 
     sources. Dean said state officials went to New York and 
     brought back two girls who had been at the apartment where 
     Jones eventually died.
       ``The only comment is how sad it is that this child has 
     died and how unnecessary,'' SRS Commissioner William Young 
     said Tuesday. ``I think everyone from our local office and 
     throughout the organization takes this kind of news hard.
       ``We certainly hope whoever is responsible for her death is 
     brought to justice.''
       Young said the case pointed out how vulnerable young women 
     are, especially when they abuse drugs. Young said this was 
     the first case that anyone in his agency was aware of in 
     which there was an organized effort to take girls from 
     Vermont to another location to work as prostitutes.

  Mr. BIDEN. Mr. President, substance abuse is one of our Nation's most 
pervasive problems. Addiction is a disease that does not discriminate 
based on age, gender, socio-economic status, race or creed. And while 
we tend to stereotype drug abuse as an urban problem, the steadily 
growing number of heroin and methamphetamine addicts in rural villages 
and suburban towns shows that is simply not the case.
  We have nearly 15 million drug users in this country, four million of 
whom are hard-core addicts. We all know someone--a family member, 
neighbor, colleague or friend--who has become addicted to drugs or 
alcohol. And we are all affected by the undeniable correlation between 
substance abuse and crime--an overwhelming 80 percent of the two 
million men and women behind bars today have a history of drug and 
alcohol abuse or addiction or were arrested for a drug-related crime.
  All of this comes at a hefty price. Drug abuse and addiction cost 
this Nation $110 billion in law enforcement and other criminal justice 
expenses, medical bills, lost earnings and other costs each year. 
Illegal drugs are responsible for thousands of deaths each year and for 
the spread of a number of communicable diseases, including AIDS and 
Hepatitis C. And a study by The National Center on Addiction and 
Substance Abuse at Columbia University, CASA, shows that seven out of 
ten cases of child abuse and neglect are caused or exacerbated by 
substance abuse and addiction.
  Another CASA study released last week revealed that for each dollar 
that States spend on substance-abuse related programs, 96 cents goes to 
dealing with the consequences of substance abuse and only four cents to 
preventing and treating it. Investing more in prevention and treatment 
is cost-effective because it will decrease much of the street crime, 
child abuse, domestic violence, and other social ills that can result 
from substance abuse.
  The bill I am introducing today with Senators Hatch, Leahy, DeWine 
and Thurmond authorizes more than $900 million a year for prevention 
and treatment programs to reduce the criminal justice, health care, and 
human costs associated with substance abuse.
  We know that if someone gets through age 21 without smoking, abusing 
alcohol, or using drugs, they are unlikely ever to have a substance 
abuse problem. That is why prevention programs for kids are vital. This 
bill provides $200 million a year in grants to drug prevention programs 
like those run by the Boys and Girls Clubs and by law enforcement 
through the DARE program to get the message out to kids that drugs can 
ruin their lives.
  While there is good news that overall drug use has stabilized among 
students, there is also bad news--use of Ecstasy by high school seniors 
has increased more than 66 percent. Prevention programs funded by this 
Act will get the message out to kids that drugs like Ecstasy are 
incredibly dangerous--even if their friends or a cover story in the New 
York Times Magazine might make it seem like it is ``no big deal.''

[[Page 1766]]

Studies show that Ecstasy can damage regions of the brain responsible 
for thought and memory. If that isn't a big deal, I don't know what is.
  This bill also authorizes additional funding for drug treatment, 
which is desperately needed. Every year since 1989, I have published my 
own drug report, each of which has advocated a three-prong approach to 
address the drug problem--prevention, treatment and enforcement. I have 
always urged more money for treatment because it always gets the short 
end of the stick.
  Drug addiction is a chronic relapsing disease. And as with other 
chronic relapsing diseases--such as diabetes, hypertension and asthma--
there is no cure, although a number of treatments can effectively 
control the disease. According to an article published in the Journal 
of the American Medical Association in October, the rate of adherence 
to the treatment program and the relapse rate are similar for drug 
addiction and other chronic diseases--meaning that treatment for 
addiction works just as well as treatment for other chronic relapsing 
diseases.
  Unfortunately, only two million of the estimated five million people 
who need drug treatment are receiving it. The Drug Abuse Education, 
Prevention and Treatment Act takes steps to close this ``treatment 
gap'' by targeting drug treatment to rural and economically depressed 
areas, funding adolescent treatment and residential treatment centers 
for women with children, and increasing funding for the National 
Institute on Drug Abuse--whose brilliant scientists conduct 85 percent 
of the world's research on drug abuse--to conduct clinical trials on 
new treatments for addiction.
  The bill also reauthorizes two key programs created in the 1994 Biden 
Crime Law that fund prison-based drug treatment in the state and 
federal systems.
  Providing treatment to criminal offenders is not ``soft''; it is 
smart crime prevention policy as the Key and Crest programs in my home 
state of Delaware have shown. If we do not treat addicted offenders 
before they are released, they will return to our streets with the same 
addiction problem that got them in trouble in the first place, and they 
are likely to re-offend. This is not my opinion; it is fact. More than 
80 percent of inmates with five or more prior convictions have been 
habitual drug users, compared to approximately 40 percent of first-time 
offenders. Re-authorizing prison-based treatment programs is a good 
investment and an important crime prevention initiative.
  This legislation would also re-authorize the drug court program, a 
program I have championed and introduced legislation to reauthorize. 
The Federal Government has funded drug courts since 1994 as a cost-
effective, innovative way to deal with non-violent offenders who need 
drug treatment. Rather than just churning people through the revolving 
door of the criminal justice system, drug courts help these folks get 
their acts together so they won't be back. When they graduate from drug 
court programs they are clean and sober and more prepared to 
participate in society. In order to graduate, they are required to 
finish high school or obtain a GED, hold down a job, and keep up with 
financial obligations, including drug-court fees and child-support 
payments.
  Drug courts have been proven effective at keeping offenders with 
little previous treatment history in treatment, providing closer 
supervision than other community programs to which the offenders could 
be assigned, reducing crime and being cost-effective.
  According to the Department of Justice, drug courts save at least 
$5,000 per offender each year in prison costs alone. That says nothing 
of the savings associated with future crime prevention and freeing 
scarce prison beds for violent criminals. But most important, more than 
500 drug-free babies have been born to female drug court participants, 
a sizable victory for society and the budget alike.
  This Act also includes my ``Offender Reentry and Community Safety Act 
of 2001,'' which creates demonstration programs to oversee the 
reintegration of high-risk, high-need offenders into society upon 
release. These individuals have served their prison sentences, but they 
pose the greatest risk of re-offending because they lack the education, 
job skills, stable family or living arrangements, and the substance 
abuse treatment and other mental and medical health services they need 
to successfully re-integrate into society.
  According to the Department of Justice, 1.25 million offenders are 
now living in prisons and another 600,000 offenders are incarcerated in 
local jails. A record number of those inmates--nearly 590,000--will 
return to communities this year. Historically, two-thirds of returning 
prisoners have been re-arrested for new crimes within three years.
  The safety threat posed by this number of prisoner returns has been 
exacerbated by the fact that states and communities can't possibly 
properly supervise all their returning offenders. In fact, parole 
systems have been abolished in thirteen States, and policy shifts 
toward more determinate sentencing have reduced the courts' authority 
to impose supervisory conditions on offenders returning to their 
communities.
  The demonstration reentry programs created by this bill would help 
supervise these people when they are released from jail and make sure 
they get the mental health, substance abuse and other services they 
need so that they won't go back to a life of crime and can be 
productive members of our society.
  I believe that the Drug Abuse Education, Prevention and Treatment Act 
is a good piece of legislation. Strong treatment and prevention 
programs are a vital part of a comprehensive drug strategy. 
Forestalling drug abuse and treating it when it occurs is sensible 
policy in terms of saving money, preventing crime and sparing lives. I 
urge my colleagues to support this legislation.
                                 ______
                                 
      By Mr. SMITH of New Hampshire:
  S. 305. A bill to amend title 10, United States Code, to remove the 
reduction in the amount of Survivor Benefit Plan annuities at age 62; 
to the Committee on Armed Services.
  Mr. SMITH of New Hampshire. Mr. President, I am delighted today to 
rise to discuss President Bush's commitment to strengthening America's 
national security. I know this is a matter that is very close to the 
heart of my colleague in the Chair, the Senator from Oklahoma. 
President Bush often said during the campaign to the military that 
``help is on the way.'' It is nice to know that help has arrived.
  The President is spending this week traveling to military 
installations to see and hear, for the first time since assuming 
office, the needs of the military.
  I can tell you, having just come back a few weeks ago from visiting 
the troops, marines and sailors aboard the U.S.S. Nassau in the 
Mediterranean, that they appreciate it when anybody from the Government 
comes to visit them where they are on location. Clearly, for the 
President of the United States to go directly to a military facility 
and look the troops in the eye and tell them that help is coming says a 
lot about the President. And believe me, it will do a lot for the 
morale of the military in this country. He is going to be traveling to 
additional military installations this week to see and hear just what 
the needs are as those needs are addressed by the men and women who 
serve.
  He is committed to address these urgent needs, and specifically pay 
raises, housing, benefits, and the like. I fully support him in that 
effort. I believe for the last 8 years our military has suffered.
  I might just say it is nice to hear a President talking about 
strengthening the military. The needs of our military in the last 8 
years have not been funded, and our military has been overextended for 
too many peacekeeping missions for which it was neither trained nor 
equipped.
  In addition to that, oftentimes these missions were conducted without 
being budgeted, which forced the dollars to come out of the hides of 
the men and women who serve in terms of readiness and other accounts.

[[Page 1767]]

  As the Senator in the Chair understands full well, our military 
readiness is at an all-time low. Planes are not flying for lack of 
spare parts and numerous accidents. Two Army helicopters crashed 
yesterday. Ships aren't sailing for lack of fuel. Soldiers aren't 
training for lack of ammunition.
  I remember looking a young marine in the eye aboard the U.S.S. Nassau 
a couple of weeks ago and asking him if he needed anything other than a 
little more money. He said: Yes, I would like to have that, but I also 
would appreciate it, Senator, if you could give me some ammunition for 
this weapon that I need to fire. We don't have even dummy rounds to 
practice for this particular weapon. He showed me the weapon. I was 
shocked by that, frankly.
  But, again, let me reassure our military that help is on the way. In 
fact, I think it has arrived.
  Like the chairman of the Armed Services Committee, my friend Senator 
Warner, I support this effort by the administration to complete a top-
to-bottom assessment of the military. I think it is important when we 
do that assessment to do it on the basis of what the needs are and 
understand that we are doing it for that reason--to assess the needs--
and not to come to some foregone conclusion and then prove it with your 
top-to-bottom assessment. We need to be sure we are buying the right 
weapons for the right threats.
  The United States has a strong economy and a great open society. 
Unfortunately, it is the only remaining superpower in the world. That 
also makes us a target for those who oppose our values of life and our 
liberties. The world is not a friendly place. We see violence and 
unrest every night on the news.
  I do not know if people realize it, but when you go and talk to the 
men and women out there, their lives are on the line every day. I stood 
on the bridge of the U.S.S. Nassau in Malta and watched a small Maltese 
Navy gunboat circling around that ship 24 hours a day to keep guard so 
that no terrorists could get to that ship. Oftentimes, as we found with 
the U.S.S. Cole, we didn't have that kind of security from the host 
country.
  So weapons of mass destruction--nuclear, chemical, and biological--
continue to proliferate around the world into the hands of dictators 
and demagogues who might, in desperation, choose to oppose us and, 
worst of all, fall into the hands of terrorists.
  We face new threats, such as cyberattacks on our command and control 
networks and our vulnerable civil infrastructure. Our military needs to 
think through these new defense challenges and architect the right 
force for our Nation for the new century. I will give the 
administration the time it needs to work through these issues as they 
present a new budget.
  As a member of the Emerging Threats Subcommittee and Strategic Forces 
Subcommittee of the Senate Armed Services Committee, I fully appreciate 
the challenges that President Bush and Secretary Rumsfeld face as they 
try to rebuild our military and simultaneously set us on the right 
course for this new century.
  It is not going to be an easy job. There are a lot of needs. We have 
a lot of ground to make up and a lot of new things to do. In the 
meantime, like Chairman Warner, I expect a new administration will be 
requesting a supplemental. But that is not my decision to make. I am 
hopeful that will be the case.
  There is no better way to understand the needs of our military than 
to get out of Washington and visit them. As I said, I salute the 
President for doing that. I went on the U.S.S. Nassau, and one of the 
sailors walked up to me and said: Senator, is there any reason why a 
member of the United States Navy like me who is an E2 cannot get sea 
pay? I am serving aboard ship, and everybody from E4 and above gets sea 
pay, and those of us at E1, E2, and E3 don't.
  We are going to take care of that. That matter has already been 
brought to the attention of the chairman of the Armed Services 
Committee in the Senate as well as the relevant committees in the House 
of Representatives.
  But it felt good to be back at sea. It felt good to be on board ship. 
It reminded me of my service aboard the U.S.S. Navasota during the 
Vietnam war. It didn't feel good enough to reenlist, but it was a great 
time. There were 13 members of the U.S. Navy and Marines on board from 
New Hampshire. We listened, had lunch, and we talked. They deserve our 
support. They deserve compensation commensurate with the rest of 
America.
  From E1 to E3--the lowest pay grades in the Navy serving aboard that 
ship swabbing the decks and doing all the hard work--don't get sea pay, 
and those E4s and above do. That is wrong. We are going to take care of 
that.
  All of our sailors face the same threat. They deal with the same 
personal issues while they are away from home and family. They have 
children to raise. They have things to do that they miss--all kinds of 
family things they miss while they are away while we ask them to do it. 
They shouldn't be on food stamps and should have a reasonable salary. 
They ought to be compensated fairly. We are going to take care of the 
sea pay with legislation this year so that those E1 and E3 sailors will 
be compensated.
  I appreciate the military's current desire to hold out the prospect 
of sea pay as a reenlistment bonus. However, these sailors are paying 
the same price at sea as the senior sailors. To say you can serve your 
first elected tour of duty and not get it, but if you re-up, we will 
give to it to you, is simply wrong. We will find another incentive to 
get them to re-up. I think, frankly, for them to re-up, we should tell 
them we are going to appreciate you and we are going to pay you sea pay 
because you are away from your home and family.
  In addition to some of the readiness problems and personnel issues we 
are dealing with now in the military, I think one of the biggest 
challenges Secretary Rumsfeld is going to face is space and how we 
utilize space. Of course, Secretary Rumsfeld understands that as well 
as anybody. He chaired the space commission, so-called, that was 
created in our Armed Services defense bill. I was proud to be the 
author of that language. One of the plain reasons is the U.S. economy 
is so strong that we should use our satellite capabilities to fuel our 
new information-based science. Satellites support Americans every day. 
I don't think we realize how important they are. They support our 
weather, help hunters and boaters navigate; they provide pagers and 
telephones to communicate with travelers anywhere on the surface of the 
Earth.
  But we cannot stop there, however. We must also keep our promises to 
those who have already given a lifetime of service to this country.
  Just as our soldiers, sailors, and airmen were there for us, 
protecting us--we must be there for our veterans and military retirees.
  Therefore, I am introducing legislation today to eliminate the 
military survivor's benefit penalty.
  Mr. President, this legislation will repeal the existing reduction in 
the Survivor Benefit Plan spouses currently suffer when they reach the 
age of 62.
  Today, after years of paying heavy premiums for this optional 
benefit, survivors of military retirees receive 55 percent of their 
spouses service pay prior to age 62. However, once these spouses reach 
age 62, their benefits are drastically reduced to only 35 percent. The 
overwhelming majority of these beneficiaries are women. This reduction 
in benefits will have a devastating effect on their quality of life.
  In addition to eliminating this reduction in benefits which retired 
military spouses incur when they turn 62, spouses whose loved one 
passed away after their 62nd birthday will also receive full 55 
percent.
  Passage of this important legislation will bring the military 
Survivor Benefits Plan more in line with other Federal and civil 
servants employee health plans.
  After a lifetime of sacrifice, we owe it to our military retirees to 
provide them with peace of mind that their spouse will be taken care of 
after their death.
  Mr. President, I ask my colleagues to support our retirees and pass 
this legislation immediately.

[[Page 1768]]

  One of the many important defense challenges President Bush and 
Secretary Rumsfeld face is protecting America's lead in space 
activities. One of the main reasons the U.S. economy is so strong is 
our use of satellite capabilities to fuel our new information-based 
society.
  Satellites support Americans every day. For example, they support our 
weather forecasts, help hunters and boaters navigate, provide pagers 
and phones that can communicate with travelers anywhere on the surface 
of the earth, and allow farmers to check on the health of their fields.
  Our soldiers, sailors, and airmen also rely on space assets. 
Accordingly, the utilization of space will also be at the forefront of 
our national security agenda during this century, and I will work to 
ensure that America expands its leadership in this military arena.
  To help the nation better posture for that future challenge, I 
authored the provision in the FY2000 Defense Authorization Act that 
created a commission 2 years ago called the ``Commission to Assess 
National Security Space Management and Organization,'' more commonly 
known today as the Space Commission.
  Coincidentally, the chairman chosen last year to lead that commission 
became our new Secretary of Defense--Donald Rumsfeld.
  Last month, they finished their work, and I commend Secretary 
Rumsfeld, the commissioners, and the staff for their outstanding work, 
and for thoroughly pulling together a great deal of research and data.
  The Commission's findings confirm my long-held view of the growing 
importance of space to the nation and my belief that space management 
and organization reforms are urgently needed as America's commercial, 
civil, and military reliance on space assets expands.
  The Commission's recommendations lay the foundations for what I have 
often maintained--military space activities should evolve to the 
eventual creation of a separate Space Force.
  The United States has shown the world the value of space in providing 
information superiority on the modern battlefield.
  As we move into the new century, we need to: Defend our current 
space-based information superiority; be able to deny our adversaries 
that same capability (through programs I have long supported like KE-
SAT and Clementine); and leverage the uniqueness of space to be able to 
rapidly project military force around the world (through programs I 
have long supported like Space Plane).
  We need a strong advocate for space to fight for and justify these 
new space programs needed for the 21st century in competition with many 
other pressing military investment requirements.
  Near-term management and organization reforms recommended by the 
Commission will begin to put in place the leadership and advocacy for 
space programs that have long been lacking.
  Another of the many defense challenges President Bush and Secretary 
Rumsfeld face is protecting America from missile attack.
  I salute the administration's commitment to deploying a robust 
missile defense for this nation. Many Americans don't realize that the 
United States does not have a defense against a missile attack today.
  Meanwhile, for years, Russia has deployed various missile defenses 
around Moscow and other sites which has been ignored by ABM Treaty 
proponents. These missiles could carry weapons of mass destruction--a 
nuclear, chemical, or biological warhead that could wreak havoc on a 
U.S. city. We have a constitutional responsibility to defend America. 
Homeland defense from missile attack is essential.
  With such a threat hanging over our leader's head, it is impossible 
to contemplate engaging globally in the best interest of the United 
States--no President would risk a U.S. city to come to the aid of an 
ally.
  Worst yet, countries like China and North Korea continue to 
proliferate missile technology to rogue nations.
  I am pleased that the President and his Cabinet have been so pro-
active in explaining this important issue to our allies.
  A U.S. missile defense system, both theater and national is not 
intended as a threat to any nation. It is intended to defend America, 
and we have a duty to deploy such a defense.
  While I salute the military's efforts to develop a near-term missile-
defense capability, I want to work with the administration to ensure we 
have a robust, multilayered architecture that includes the current 
land-based concept with sea-, air-, and space-based systems to 
eliminate this threat to U.S. cities and our deployed forces.
  Today, President Bush visited the only NATO facility on U.S. soil at 
the Joint Forces Command at Norfolk, VA. President Bush watched an 
allied U.S.-NATO coordinated response to a simulated missile attack.
  I understand the President commented ``Pretty exciting technology, 
and it's only going to get better.'' I agree that this technology is 
only going to get better. America needs to make a commitment to protect 
its citizens from threats that come on a missile, including biological 
and chemical weapons.
  I look forward to working with the new administration, President Bush 
and Secretary Rumsfeld, to rebuild our military and set the nation on 
the right course for the new century.
  Let me assure the military, help has arrived.
  Finally, continuing on the area of missile defense, this is a very 
important challenge faced by President Bush and Secretary Rumsfeld in 
protecting the United States. Over the last several years, I have been 
involved in so many debates on the floor, so many discussions. I know 
the Senator from Oklahoma has as well. We are trying to save a national 
missile defense program only to have it put off with some wordsmithing 
or delay. I salute President Bush's commitment to deploying a robust 
missile defense for this Nation. It is immoral not to do it.
  I also salute, because it was his birthday a few days ago, President 
Reagan on his 90th birthday for being the visionary he was on this 
issue. It was Ronald Reagan who really convinced Gorbachev that we 
could have built that thing 20 years ago when, in fact, we couldn't. 
Because he convinced Gorbachev that we could and that it might be a 
threat to him, the Soviet Union essentially folded as the threat that 
it was to the world in the cold war for so long. Ronald Reagan knew 
this could be done. He was laughed at, still is to some extent on that 
issue. But 10, 15, 20 years from now, when we have this thing up and 
going and it is protecting our troops in the field, protecting our 
allies and protecting our own homeland, Ronald Reagan will get the 
credit he deserves so richly for coming up with that visionary promise 
of a missile defense system.
  Russia has deployed various missile defenses around Moscow and other 
sites which have been ignored by the ABM Treaty proponents. These 
missiles could carry weapons of mass destruction, nuclear, chemical, 
and biological, that could wreak havoc on a U.S. city, and we have 
basically ignored it. We have a constitutional responsibility to defend 
America.
  I can remember seeing little tapes of so-called focus groups where 
they would ask 15 or 20 people in a room what would happen if another 
nation, such as China or Iran or Iraq, fired a missile at the United 
States of America. All of them answered: We would shoot it down. All of 
them were wrong. We do not have the capability to shoot down such a 
missile, but we need that capability. We need the capability to shoot 
it down over the aggressor's homeland, not over ourselves. So that is 
where this missile defense system is so important.
  I hear the criticisms: It won't work; it is too expensive; we don't 
need it.
  The bottom line is, if we can defend America from any missile attack, 
whether it be accidental or deliberate or whatever, we need to do it. 
That is our obligation. We have a constitutional responsibility to 
defend America. Homeland defense from missile attack is the moral thing 
to do. With such a threat hanging over our leader's head, it is 
impossible to contemplate

[[Page 1769]]

engaging globally in the best interests of the United States. No 
President should risk a U.S. city to come to the aid of an ally.
  And worst yet, China, North Korea, and other nations continue to 
proliferate missile technology. There is some really shocking 
documentation, both public as well as classified, that will tell us 
that this is a serious matter. I am pleased the President and Secretary 
of Defense and his Cabinet have been so proactive in explaining this 
important issue to our allies. I understand that Secretary Rumsfeld 
went to Europe, was very forceful to our allies, saying: You are free 
nations. You have the right to your views, but our view is we need to 
protect ourselves and to defend this system and build this system, and 
we are going to do it.
  In closing, I will just say I look forward to working with President 
Bush, working with my colleagues on the Armed Services Committee to 
improve our readiness, to improve pay for our military and benefits, to 
cut all of the excessive operations throughout the world that are not 
really related to defense and get our military morale back. It is going 
to be exciting, and I look forward to being a part of it.
  I ask unanimous consent to print the text of the legislation in the 
Record.
  There being no objection, the bill was ordered printed in the Record, 
as follows:

                                 S. 305

       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 ``Military Retirees Survivor 
     Benefits Protection Act of 2001''.

     SEC. 2. REPEAL OF REDUCTION IN SBP ANNUITIES AT AGE 62.

       (a) Computation of Annuity for a Spouse, Former Spouse, or 
     Child.--Subsection (a) of section 1451 of title 10, United 
     States Code, is amended--
       (1) in paragraph (1), by striking ``shall be determined as 
     follows:'' and all that follows and inserting the following: 
     ``shall be the amount equal to 55 percent of the base 
     amount.''; and
       (2) in paragraph (2), by striking ``shall be determined as 
     follows:'' and all that follows and inserting the following: 
     ``shall be the amount equal to a percentage of the base 
     amount that is less than 55 percent and is determined under 
     subsection (f).''.
       (b) Annuities for Survivors of Certain Persons Dying During 
     a Period of Special Eligibility for SBP.--Subsection (c)(1) 
     of such section is amended by striking ``shall be determined 
     as follows:'' and all that follows and inserting the 
     following: ``shall be the amount equal to 55 percent of the 
     retired pay to which the member or former member would have 
     been entitled if the member or former member had been 
     entitled to that pay based upon his years of active service 
     when he died.''.
       (c) Repeal of Requirement for Reduction.--Such section is 
     further amended by striking subsection (d).
       (d) Repeal of Unnecessary Supplemental SBP.--(1) Subchapter 
     III of chapter 73 of title 10, United States Code, is 
     repealed.
       (2) The table of contents at the beginning of such chapter 
     is amended by striking the item relating to subchapter III.

     SEC. 3. EFFECTIVE DATE.

       This Act and the amendments made by section 2 shall take 
     effect on October 1, 2001, and shall apply with respect to 
     months beginning on or after that date.

  Mr. KYL. Mr. President, I thank the Senator from New Hampshire for 
his comments about the need for deployment of a national missile 
defense. I spoke to that subject this morning, when I talked about 
Secretary of Defense Donald Rumsfeld's remarks in Munich that were very 
well received by our allies. They had some concerns about the 
deployment of a national missile defense by the United States. But 
after his comments to them, they were very much reassured. While there 
still isn't the degree of support that we need and that we would like 
to have among our allies, I believe the consultations now occurring, 
and those that will occur in the future, primarily led by the Secretary 
of Defense, will bring our allies to the same conclusions that we have 
reached; namely, that we need to get on with it and that they can 
participate in this kind of assistance to the extent they want to as 
well. I appreciate the comments of the Senator from New Hampshire. I 
spoke to that issue this morning.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 307. A bill to provide grants to State educational agencies and 
local educational agencies for the provision of classroom-related 
technology training for elementary and secondary school teachers; to 
the Committee on Health, Education, Labor, and Pensions.
  Mrs. FEINSTEIN. Mr. President, today Representative Lois Capps and I 
are introducing legislation to help teachers use technology in their 
teaching, the Teacher Technology Training Act of 2001.
  This bill has three major provisions:
  It authorizes $100 million for state education departments to award 
grants to local public school districts on the basis of need to train 
teachers in how to use technology in the classroom.
  It specifies that grants may be used to strengthen instruction and 
learning, provide professional development, and pay the costs of 
teacher training in using technology in the classroom.
  It requires the Secretary of Education to evaluate the technology 
training programs for teachers developed by school districts within 
three years.
  This bill is needed because teachers say they need to learn how to 
use computers and other technology in their teaching. A 1999 Education 
Week poll found that 27 percent of teachers have had no training in 
computers, 31 percent have had one to five hours, and 17 percent have 
had six to ten hours. This means that 75 percent of teachers have had 
less than ten hours of training in how to use computers. In a 1999 
survey conducted by the U.S. Department of Education, only 23 percent 
of teachers said they felt ``well prepared'' to integrate educational 
technology into instruction. ``Most teachers want to learn, but they 
say it takes time and they need help,'' says Linda Roberts, Director of 
Educational Technology, U.S. Department of Education.
  In many schools, the students know more about how to use computers 
than the teachers do. In one Kentucky school profiled by Inside 
Technology Training magazine, the students run the school's computer 
systems. The article quoted the school district's technology 
coordinator as saying that the students had ``long surpassed'' what the 
teachers could do and reported that one student had recently trained 
twenty teachers on software for Web page construction (``Fast Times at 
Kentucky High,'' Inside Technology training, June 1998).
  In addition to helping teachers teach, technology proficiency is 
becoming crucial to survival. Most good jobs require experience using 
computers. Former U.S. Commerce Secretary William M. Daley has said, 
``Opportunities are now dependent upon a person's ability to use 
computers and engage in using the Internet,'' CQ Weekly, ``Digital 
Haves and Have Nots,'' April 17, 1999.
  The economy of California is a case in point as it shifts away from 
manufacturing and toward higher-skill service and technology 
industries. Employers are placing a high premium on the computer skills 
necessary for these positions. Students are better prepared when their 
teachers are well trained. We cannot educate students for the 
increasingly technological workplace without trained teachers.
  We have made great efforts to make technology available to students 
in their classrooms. Eighty percent of California's schools have 
Internet access.
  But computers are of little value if people do not know how to use 
them and in school, they can become diversions or entertainment, 
instead of learning tools without trained teachers.
  If we expect teachers to be effective, we must give them up-to-date 
skills, knowledge, and tools. This includes training.
  By introducing this bill, I am not suggesting that technology is a 
cure-all for the problems in our schools. Technology is one of many 
teaching and learning tools. It can bring some efficiencies to 
learning, for example, providing a new way to do math and spelling 
drills, making learning to write easier, providing easier access to 
information that without a computer is time-consuming and cumbersome to 
obtain.

[[Page 1770]]

  We expect a great deal from our teachers and students. We must give 
them the resources they need. This bill is one step.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 308. A bill to award grants for school construction; to the 
Committee on Health, Education, Labor, and Pensions.
  Mrs. FEINSTEIN. Mr. President, today, I am introducing the Excellence 
in Education Act of 2001.
  The purpose of this bill is to 1. reduce the size of schools; 2. 
reduce the size of classes; and 3. bring accountability to the use of 
these funds. The bill would create a matching grant program to build 
new schools to meet the following size requirements:
  For kindergarten through 5th grade, not more than 500 students, for 
grades 6 through 8, not more than 750 students and for grades 9 through 
12, not more than 1,500 students.
  For kindergarten through grade 6, not more than 20 students per 
teacher and for grades 7 through 12, not more than 28 students per 
teacher.
  The bill authorizes $1 billion each year for the next five years for 
the
U.S. Department of Education to award grants to local school districts. 
School districts would have to match federal funds with an equal 
amount. In addition to making the above reductions, school districts 
would be required to terminate social promotion, provide remedial 
education, and require that students be subject to state achievement 
standards in the core academic curriculum.
  This bill will provide a new funding source for school districts or 
states to match to build new schools and reduce both school size and 
class size. There is no good estimate of how many schools would be 
needed to reduce schools and classes to the levels specified in the 
bill, but we all know that there are too many large schools and large 
classes in public education today.
  The U.S. Department of Education estimates that we need to build 
6,000 new schools just to meet enrollment growth projections. This 
estimate does not take into account the need to cut class and school 
sizes. Consequently, the need for the funds my bill would authorize is 
huge.
  Why do we need this bill?
  First, many of our schools are just too big, especially in urban 
areas. The ``shopping mall'' high school is all too common. Some 
schools have as many as 4,000 students. In fact, half of American high 
school students go to schools that have 1,500 students or more.
  Equally serious is the fact that our classes are too big. Even though 
we have begun to reduce class sizes in the lower grades in California, 
it still has some of the largest class sizes in the United States.
  Studies show that student achievement improves when school and class 
sizes are reduced. The Oakland, California, school district plans to 
open 10 new small schools in the next few years. The Oakland tribune 
explained it like this on October 18, 2000: ``Small schools are viewed 
as antidotes to huge, factory-like campuses commonplace in America's 
inner cities. Research has shown that small schools create intimate 
learning atmospheres for students and teachers.''
  The U.S. Department of Education cites studies that list these 
benefits of small schools: students have a greater sense of belonging; 
fewer discipline problems occur; crime, violence and gang activity go 
down; alcohol and tobacco abuse decline; dropout rates fall and 
graduation rates rise; and student attendance increases.
  The American Education Research Association says that the ideal high 
school size is between 600 and 900 students. Studies show that small 
schools have higher academic achievement, fewer discipline problems, 
lower dropout rates, higher levels of student participation, higher 
graduation rates (The School Administrator, October 1997). The nation's 
school administrators are calling for smaller, more personalized 
schools.
  A Tennessee study called Project STAR placed 6,500 kindergartners in 
330 classes of different sizes. The students stayed in small classes 
for four years and then returned to larger ones in the fourth grade. 
The test scores and behavior of students in the smaller classes were 
better than those of children in the larger classes. A similar 1997 
study by Rand found that smaller classes benefit students from low-
income families the most.
  Teachers say that students in smaller classes pay better attention, 
ask more questions, and have fewer discipline problems. Smaller schools 
and smaller classes make a difference, it is clear.
  California has some of the largest schools in the country; Los 
Angeles has some of the largest classes and schools in the world! Here 
are some examples in the Los Angeles area: Hawaiian Elementary, 1,365 
students; South Gate Middle School, 4,442 students; Belmont High 
School, 4,874 students.
  California also has some large classes, even though we have made 
great progress in reducing teacher-to-pupil ratios in the lower grades. 
Still today, many middle and high school English and math classes are 
very large, up to as many as 39 students.
  The American public supports increased federal funding for school 
construction. The Rebuild American Coalition last year found that 82 
percent of Americans favor federal spending for school construction, up 
from 74 percent in a 1998 National Education Association poll.
  Every parent knows the importance of a small class in which the 
teacher can give individualized attention to a student. Every parent 
knows the importance of the sense of a community that can come with 
attending a small school. And every parent knows that big schools and 
big classes can be a stressful learning environment.
  I hope my colleagues will join me today in passing this important 
education reform. I ask unanimous consent that the text of the bill and 
a summary be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 308

       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 ``Excellence in Education Act 
     of 2001''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Core curriculum.--The term ``core curriculum'' means 
     curriculum in subjects such as reading and writing, language 
     arts, mathematics, social sciences (including history), and 
     science.
       (2) Elementary school; local educational agency; secondary 
     school; secretary.--The terms ``elementary school'', ``local 
     educational agency'', ``secondary school'', and ``Secretary'' 
     have the meanings given the terms in section 14101 of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801).
       (3) Practice of social promotion.--The term ``practice of 
     social promotion'' means a formal or informal practice of 
     promoting a student from the grade for which the 
     determination is made to the next grade when the student 
     fails to meet State achievement standards in the core 
     academic curriculum, unless the practice is consistent with 
     the student's individualized education program under section 
     614(d) of the Individuals with Disabilities Education Act (20 
     U.S.C. 1414(d)).
       (4) Construction.--
       (A) In general.--Subject to subparagraph (B), the term 
     ``construction'' means--
       (i) preparation of drawings and specifications for school 
     facilities;
       (ii) building new school facilities, or acquiring, 
     remodeling, demolishing, renovating, improving, or repairing 
     facilities to establish new school facilities; and
       (iii) inspection and supervision of the construction of new 
     school facilities.
       (B) Rule.--An activity described in subparagraph (A) shall 
     be considered to be construction only if the labor standards 
     described in section 439 of the General Education Provisions 
     Act (20 U.S.C. 1232b) are applied with respect to such 
     activity.
       (5) School facility.--The term ``school facility'' means a 
     public structure suitable for use as a classroom, laboratory, 
     library, media center, or related facility the primary 
     purpose of which is the instruction of public elementary 
     school or secondary school students. The term does not 
     include an athletic stadium or any other structure or 
     facility intended primarily for athletic exhibitions, 
     contests, or games for which admission is charged to the 
     general public.

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act $1,000,000,000 for each of the fiscal years 2002 through 
     2006.

[[Page 1771]]



     SEC. 4. PROGRAM AUTHORIZED.

       The Secretary is authorized to award grants to local 
     educational agencies to enable the local educational agencies 
     to carry out the construction of new public elementary school 
     and secondary school facilities.

     SEC. 5. CONDITIONS FOR RECEIVING FUNDS.

       In order to receive funds under this Act a local 
     educational agency shall meet the following requirements:
       (1) Reduce class and school sizes for public schools served 
     by the local educational agency as follows:
       (A) Limit class size to an average student-to-teacher ratio 
     of 20 to 1, in classes serving kindergarten through grade 6 
     students, in the schools served by the agency.
       (B) Limit class size to an average student-to-teacher ratio 
     of 28 to 1, in classes serving grade 7 through grade 12 
     students, in the schools served by the agency.
       (C) Limit the size of public elementary schools and 
     secondary schools served by the agency to--
       (i) not more than 500 students in the case of a school 
     serving kindergarten through grade 5 students;
       (ii) not more than 750 students in the case of a school 
     serving grade 6 through grade 8 students; and
       (iii) not more than 1,500 students in the case of a school 
     serving grade 9 through grade 12 students.
       (2) Terminate the practice of social promotion in the 
     public schools served by the agency.
       (3) Require that students be subject to State achievement 
     standards in the core curriculum at key transition points, to 
     be determined by the State, for all kindergarten through 
     grade 12 students.
       (4) Use tests and other indicators, such as grades and 
     teacher evaluations, to assess student performance in meeting 
     the State achievement standards, which tests shall be valid 
     for the purpose of such assessment.
       (5) Provide remedial education for students who fail to 
     meet the State achievement standards, including tutoring, 
     mentoring, summer programs, before-school programs, and 
     after-school programs.
       (6) Provide matching funds, with respect to the cost to be 
     incurred in carrying out the activities for which the grant 
     is awarded, from non-Federal sources in an amount equal to 
     the Federal funds provided under the grant.

     SEC. 6. APPLICATIONS.

       (a) In General.--Each local educational agency desiring to 
     receive a grant under this Act shall submit an application to 
     the Secretary at such time and in such manner as the 
     Secretary may require.
       (b) Contents.--Each application shall contain--
       (1) an assurance that the grant funds will be used in 
     accordance with this Act;
       (2) a brief description of the construction to be 
     conducted;
       (3) a cost estimate of the activities to be conducted; and
       (4) a description of available non-Federal matching funds.

   Summary of the School Construction Grant Bill, the Excellence in 
                         Education Act of 2001

       Funds authorized, purpose: Authorizes $5 billion over 5 
     years ($1 billion each year) for the U.S. Department of 
     Education to award grants to local education agencies to 
     construct new school facilities from fiscal year 2002 to 
     2006.
       Eligibility. Local education agencies as defined in 14101 
     of the Elementary and Secondary Education Act of 1965 (public 
     schools).
       Use of funds: Local education agencies are authorized to 
     use funds to construct new school facilities.
       Conditions for receiving funds: As a condition of receiving 
     funds, local education agencies are required to--
       Reduce school and class sizes as follows:
       Limit class size to: In the elementary grades to an average 
     student-teacher ratio of 20 to one; in grades 7 through 12 to 
     an average student-teacher ratio of 28 to one.
       Limit school size to: Elementary schools (K-5): no more 
     than 500 students; Middle schools (6-8): no more than 750 
     students; High schools (9-12): no more than 1,500 students.
       Terminate the practice of social promotion.
       Require that students be subject to state academic 
     achievement standards, to be determined by the states, for 
     all K-12 students in the core curriculum, defined as subjects 
     such as reading and writing, language arts, mathematics, 
     social sciences (including history); and science.
       Test student achievement in meeting achievement standards 
     periodically for advancement to the next grade, in at least 
     three grades (such as the 4th, 8th and 12th grades), 
     distributed evenly over the course of a student's education.
       Provide remedial education for students who fail to meet 
     academic achievement standards, including tutoring, 
     mentoring, summer, before-school and after-school programs.
       Provide matching funds from non-Federal sources in an 
     amount equal to the Federal funds provided under the grant.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 309. A bill to amend the Elementary and Secondary Education Act of 
1965 to specify the purposes for which funds provided under subpart 1 
of part A of title I may be used; to the Committee on Health, 
Education, Labor, and Pensions.
  Mrs. FEINSTEIN. Mr. President, today I am introducing a bill designed 
to better direct and refocus ESEA Title I funds on academic 
instruction. The goal of this bill, titled ``The Title I Integrity 
Act,'' is to target Title I funds on learning and to get ``more for our 
money'' from the largest Federal elementary-secondary education 
program.
  Title I provides assistance to virtually every school district in the 
country for services to children attending schools with high 
concentrations of low-income students, from preschool through high 
school. It has been the ``anchor'' of Federal assistance to schools, 
since its origin in 1965. For Fiscal Year 2000, funding for Part A 
basic grants to school districts is almost $8 billion.
  This bill would specify in law how Title I funds can and cannot be 
used by schools. It seeks to direct Title I funds to uses that improve 
academic achievement and help students meet state achievement 
standards.
  The bill says that ``a local educational agency shall use funds . . . 
only to provide academic instruction and services directly related to 
the instruction of students in preschool through grade 12 to assist 
eligible children to improve their academic achievement and to meet 
achievement standards established by the State.''
  Permitted uses include these: Interventions and corrective actions to 
improve student achievement; extending academic instruction beyond the 
normal school day and year, including summer school; the employment of 
teachers and other instructional personnel (including employee 
benefits); instructional services to pre-kindergarten children for the 
transition to kindergarten; the purchase of instructional resource such 
as books, materials, computers, and other instructional equipment and 
wiring to support instructional equipment; development and 
administration of curriculum, educational materials and assessments; 
and transportation of students to assist them in improving academic 
achievement.
  Uses explicitly not permitted are these: The purchase or lease of 
privately-owned facilities; the purchase or provision of facilities 
maintenance, janitorial, gardening, or landscaping services or the 
payment of utility costs; the construction of facilities; acquisition 
of real property; food and refreshments; travel to and attendance at 
conferences or meetings; and the purchase or lease of vehicles.
  Current law on Title I is much too vague. It says, ``A State or local 
educational agency shall use funds received under this part only to 
supplement the amount of funds that would, in the absence of such 
Federal funds, be made available from non-Federal sources for the 
education of pupils participating in programs assisted under this part, 
and not to supplant such funds.''
  The U.S. Department of Education has given states a guidance document 
that explains how Title I funds can currently be used. Permitted uses 
are for the following: instructional practices; counseling, mentoring; 
developing curricula; salaries; employee benefits; renting privately-
owned facilities; janitorial services; utilities; mobile vans; training 
and professional development; equipment; interest on lease purchase 
agreements; travel and conferences; food and refreshments; insurance 
for vehicles; parent involvement activities.
  Under this guidance document, only two uses are specifically 
prohibited: (1) construction or acquisition of real property; and (2) 
payment to parents to attend a meeting or training session or to 
reimburse a parent for salary lost due to attendance at ``parental 
involvement'' meeting.
  My reason for introducing this bill is this: Our students are not 
learning; our schools are failing our children. We must use our limited 
federal dollars for the fundamental purpose of education: to help 
students learn.

[[Page 1772]]

  Just this week I learned that a January 2001 study by Education 
Weekly, titled ``Quality Counts 2001: A Better Balance,'' brought more 
bad news about California's students. Here's what the report found:
  In fourth grade reading, 20 percent of students are proficient and 52 
percent are below the basic standard.
  In eighth grade reading, 22 percent of students are proficient and 36 
percent are below the basic standard.
  Comparing California to other states, in how well fourth grade 
students read, California ranks 36 out of 39 states. In eight grade 
reading, California ranks 32 out of 36 states.
  Nationally, the news is similarly distressing:
  U.S. eighth graders are out-performed by their counterparts in math 
and science from Japan, Korea, Hong Kong and Singapore, Australia and 
Canada (Third International Math and Science Study, December 5, 2000). 
The 1999 study showed virtually no improvement for U.S. students over 
1995.
  American twelfth graders performed in mathematics better than 
students in only two countries, Cyprus and South Africa.
  In writing, 75 percent of U.S. school children cannot compose a well-
organized, coherent essay, concluded the National Assessment for 
Education Progress (NAEP) in September 1999.
  While it is difficult to really ascertain exactly how Title I funds 
are always being used, we do know of a few examples of uses that raise 
questions in my mind:
  In Alabama, schools ``dipped into Title I to pay the electric bill 
and for janitorial services.'' Citizens' Commission on Civil Rights.
  While most of Title I's $8 billion appear to be spent on instruction, 
the Los Angeles Times, in a March 12, 2000 editorial, said, ``About 
half that amount is wasted on unskilled though well-meaning teacher 
aides, who are often more baby-sitter than instructor.''
  Title I has been used ``to pay for everything from playground 
supervisors and field trips to more time for nurses and counselors.'' 
San Diego Tribune, March 16, 2000.
  California school officials have told my staff that Title I has been 
used for pay for clerical assistants in school administrative offices, 
payroll staff, truant officers, schoolyard duty personnel, school bus 
loading assistants, ``curriculum coordinators,'' ``compliance,'' 
attending conferences, and home visits.
  It is time to put an end to the notion that Title I can be everything 
to everyone, that it can fund all the services that schools need. 
Federal funding is only seven percent of total funding for elementary 
and secondary education and Title I is even a smaller percentage of 
total support for public schools. We must get the most that we can 
educationally for our limited dollars.
  It is time to better direct Title I funds to the true goal of 
education: to help students learn. This bill is one step toward that 
goal.
  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. 309

       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 ``Title I Integrity Act of 
     2001''.

     SEC. 2. LIMITATIONS ON FUNDS.

       Subpart 1 of part A of title I (20 U.S.C. 6311 et seq.) is 
     amended by inserting after section 1120B (20 U.S.C. 6323) the 
     following:

     ``SEC. 1120C. LIMITATIONS ON FUNDS.

       ``(a) In General.--Notwithstanding any other provision of 
     this Act, a local educational agency shall use funds received 
     under this subpart only to provide academic instruction and 
     services directly related to the instruction of students in 
     preschool through grade 12 to assist eligible children to 
     improve their academic achievement and to meet achievement 
     standards established by the State.
       ``(b) Permissible and Prohibited Activities.--In this 
     section, the term `academic instruction'--
       ``(1) includes--
       ``(A) the implementation of instructional interventions and 
     corrective actions to improve student achievement;
       ``(B) the extension of academic instruction beyond the 
     normal school day and year, including during summer school;
       ``(C) the employment of teachers and other instructional 
     personnel, including providing teachers and instructional 
     personnel with employee benefits;
       ``(D) the provision of instructional services to pre-
     kindergarten children to prepare such children for the 
     transition to kindergarten;
       ``(E) the purchase of instructional resources, such as 
     books, materials, computers, other instructional equipment, 
     and wiring to support instructional equipment;
       ``(F) the development and administration of curricula, 
     educational materials, and assessments; and
       ``(G) the transportation of students to assist the students 
     in improving academic achievement; and
       ``(2) does not include--
       ``(A) the purchase or lease of privately owned facilities;
       ``(B) the purchase or provision of facilities maintenance, 
     gardening, landscaping, or janitorial services, or the 
     payment of utility costs;
       ``(C) the construction of facilities;
       ``(D) the acquisition of real property;
       ``(E) the payment of costs for food and refreshments;
       ``(F) the payment of travel and attendance costs at 
     conferences or other meetings; or
       ``(G) the purchase or lease of vehicles.''.
                                 ______
                                 
      By Mr. KENNEDY (for himself and Mr. Kerry):
  S. 310. A bill to designate the United States courthouse located at 1 
Courthouse Way in Boston, Massachusetts, as the ``John Joseph Moakley 
United States Courthouse''; to the Committee on Environment and Public 
Works.
  Mr. KENNEDY. Mr. President, it is a privilege to join my colleague, 
Senator Kerry, in introducing this legislation to name the U.S. 
courthouse in the city of Boston after a wonderful friend and an 
outstanding leader, Congressman, Joseph Moakley, who announced 
yesterday that he will not be candidate for re-election next year 
because of a serious illness that has just been diagnosed.
  Congressman Moakley has served Massachusetts and the nation with 
great honor throughout his long and brilliant career in public service. 
Like the rest of my colleagues, I'm deeply saddened by Joe's 
announcement yesterday.
  As dean of our delegation, Joe's leadership in Congress is invaluable 
and indispensable for the people of Massachusetts--and the whole nation 
too. He's a true giant in Congress, and I'm proud to serve with him.
  Joe's has been at the forefront of many great battles of national and 
international importance. No one is more effective in Congress on the 
front lines or behind the scenes. He has touched the hearts of all our 
people, and he's made a remarkable difference in their lives and hopes. 
He's a voice for the voiceless, and for all those who need our help the 
most. He champions the cause of hard-working families and the middle 
class--and all of us are proud to be there with him, on the front-lines 
in all these battles.
  When I look back over the many years that Joe Moakley has served in 
Congress, I think of the important progress we've achieved--the battles 
we've waged and won--for decent and affordable health care--for good 
education, so that more children can have a better start in life and a 
chance to go to college--for better jobs, greater opportunities, fairer 
wages, and safer working conditions--for a cleaner environment--for 
equal rights for women and an end to discrimination in the workplace--
for civil rights at home and human rights in other lands. And above 
all, in countless nations around the world, Joe Moakley is renowned for 
his extraordinary achievement in protecting and defending the 
fundamental human rights of all the people of El Salvador.
  He has fought long and hard and well for funds to rebuild the Central 
Artery--to build the South Boston Piers Transitway--to clean up Boston 
Harbor--to modernize the Port of Boston--and to preserve Massachusetts' 
many historic sites--the old State House, the Old South Meeting House, 
the USS Constitution, Dorchester Heights, and Boston's historic 
marketplace, Faneuil Hall. Joe Moakley's efforts to protect and 
preserve these many sites guarantee that they'll be an important part 
of our state's history and heritage for many years to come.
  And that's only the tip of the iceberg. Few, if any, Members of 
Congress

[[Page 1773]]

have done so much for so many for so long.
  When the chips are down, Joe Moakley is always there when we need him 
most. If President Kennedy were here today, we all know what he'd day--
he'd call Joe Moakley a true profile in courage.
  Thoughout his career, Joe Moakley has worked brilliantly, effectively 
and tirelessly to promote the highest ideals of public service. He is 
an outstanding statesman, leader, and legislator. I commend him for his 
leadership, and I look forward to the early enactment of this 
legislation as a tribute to a man who has served the city of Boston, 
Congress, and the country so well.
                                 ______
                                 
      By Mr. DOMENICI (for himself, Mr. Dodd, Mr, Cochran, Mr. Cleland, 
        Mr. Frist, Mr. Kennedy, and Mr. Harkin):
  S. 311. A bill to amend the Elementary and Secondary Education Act of 
1965 to provide for partnerships in character education: to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. DOMENICI. Mr. President, this is an issue on which I have been 
working for 7 years; that is, character education in our schools, both 
public and private. The bill I sent to the desk has seven cosponsors 
from both parties. I ask other Senators who are interested in helping 
at the grassroots level in public schools and private schools, who want 
to bring Character Counts to their character education in their 
schools, that they might consider this bill. I would like to speak a 
little bit about character in our Nation and in our schools.
  I rise today with my friend, Senator Dodd, who is my principal 
cosponsor, although we now have Senators Frist, Kennedy, Harkin, 
Cleland, and Cochran. This bill is called the Strong Character for 
Strong Schools Act. It is not a very big program, and it does not 
interfere very much at all with the schools, but it does provide for 
money to be granted to public school systems, partnerships between 
State agencies and others, bringing character, or character kind of 
programs, into the schools.
  Last month, I listened with great pleasure to President Bush's 
inaugural address. He basically ticked off the tenets of good character 
that underscore American life. The President's speech was clearly a 
message about character and the importance of character in American 
daily lives. In his speech, the President touched on many elements of 
good character. I found it especially telling when the President 
emphasized the necessity of teaching every child these principles and 
the duty of every citizen to uphold these very same principles.
  I am going to quote a number of people. Let me quote Theodore 
Roosevelt, one of our great Presidents. He said:

       Character, in the long run, is the decisive factor in the 
     life of an individual and of our Nation.

  What I have been principally involved in, in our State of New Mexico, 
is called Character Counts. Six pillars of character are promoted in 
the schools. Almost all of them use the same six pillars: 
Trustworthiness, respect, responsibility, fairness, caring, and 
citizenship.
  I would submit that character truly does transcend time as well as 
religious, cultural, political, and socio-economic barriers.
  I believe President Bush's renewed focus on character sends a 
wonderful message to Americans, and will help those of us involved in 
character education reinvigorate our efforts to get communities and 
schools involved.
  I say that because it was not too long ago, during the last 
Elementary and Secondary Education Act, ESEA, re-authorization, that 
Senators Nunn, Dodd and I included a provision in the bill to fund 
pilot projects to increase character education.
  Since then, the Department of Education has made $25 million in 
``seed money'' grants available to 28 States to develop character 
education programs. Currently, there are 36 States that have either 
received Federal funding, or have enacted their own laws mandating or 
encouraging character education.
  In New Mexico, over 230,000 kids and nearly 90 percent of our schools 
participate in some form of character education.
  Most of New Mexico utilizes a wonderful character curriculum called 
``Character Counts,'' which was established by Michael Josephson, a 
renowned ethicist from the Josephson Institute in California.
  Character Counts emphasizes six pillars of good character: 
trustworthiness, respect, responsibility, fairness, caring, and 
citizenship. The point is that teachers like this approach. These six 
pillars are not based on any particular religion or philosophy. They 
merely represent the kind of values that everybody can agree are 
important for our children.
  I first learned of Character Counts after reading about it in a 
nationally syndicated newspaper column. I subsequently, found out that 
one school in my State had decided to try the program, and that it 
seemed to be working.
  Character Counts started in New Mexico in 1993 at the Bel Air 
Elementary School in Albuquerque. Bel Air had disciplinary problems, 
and teachers and the principal were looking for ways to address those 
problems. One of Bel Air's counselors, Mary Jane Aguilar, along with 
Don Whatley, a teacher, suggested that the school try a new approach, 
called Character Counts.
  They took the six pillars, with training from the Josephson 
Institute, and began integrating them into the daily lives of their 
students. Within 6 months of integrating Character Counts into the 
daily curriculum at Bel Air, the teachers noticed that disciplinary 
episodes were fewer and that the students began to treat each other 
better.
  After hearing of the success at Bel Air, I invited the mayor of 
Albuquerque in 1994 to join me in forming the Character Counts 
Leadership Council, to bring together community leaders, schools, 
teachers, parents, and students for the purpose of expanding Character 
Counts in Albuquerque and throughout the State. And after our initial 
efforts, I worked to establish Character Counts partnerships in other 
parts of the State, and the program spread quickly throughout New 
Mexico.
  Since then, I have helped bring Character Counts to over 70 schools 
and communities in New Mexico. Places like Farmington, Santa Fe, 
Roswell, Portales, Carlsbad, Silver City, Hobbs and Las Cruces. And in 
even smaller communities like Espanola, Mount-
ainair, Dexter, Hagerman, Lake Arthur, Artesia, Capitan, Carrizozo, 
Lovington, Eunice, Jal, Tatum, Alamogordo, Socorro, Deming, and Gallup.
  As I travel around New Mexico, in virtually every town I have noticed 
school billboards with things like: ``The word for the month of May is 
`citizenship.' Character Counts!'' It is everywhere in the schools in 
New Mexico and I am proud to be a part of the program.
  Additionally, many of our communities now have adopted Character 
Counts in afterschool programs like the YMCA, Boys and Girls Clubs, and 
4-H. So when kids leave the classroom for after-school activities, they 
are still being taught how to make decisions based on the six pillars.
  I think what we are starting to see in New Mexico is the beginning of 
the Character Counts Generation--young people entering high school, who 
are bringing with them the lessons they have learned through Character 
Counts.
  Mr. President, I could go on for quite some time talking about 
Character Counts in New Mexico. The bottom line is that I believe it is 
working in New Mexico and other parts of the country.
  Consequently, I think we need to encourage more character education 
by providing a little more seed money for these worthwhile programs.
  So today, Senator Dodd and I are here to introduce a bill to 
accomplish just that.
  The Strong Character for Strong Schools Act seeks to encourage the 
creation of character education programs at the State and local level 
by providing grants to eligible entities.

[[Page 1774]]

  Grant recipients would use the funding to design and implement 
character education programs incorporating the following elements: 
caring, civic virtue and citizenship, justice and fairness, respect, 
responsibility, trustworthiness, and any other elements developed by 
the program.
  ``Eligible entities'' would include partnerships of, one, a State 
Educational Agency, SEA, and one or more school districts, two, an SEA, 
one or more school districts, and one or more nonprofit organizations, 
three, one or more school districts, or, four, a school district and a 
nonprofit organization. Nonprofit organizations could be institutions 
of higher education.
  The program would be authorized at $50 million for fiscal year 2002 
and such sums as may be necessary for each of the four succeeding 
fiscal years.
  I also want to emphasize that our bill does not dictate to States 
which character education program to implement. Rather, the bill merely 
provides states general guidelines and allows them to adopt whatever 
principles or pillars they choose after consultation with their 
communities.
  Hopefully, our renewed effort will bring together even more 
communities to ensure that character education is a part of every 
child's life. And with the successful passage of the legislation we are 
introducing today, our new Secretary of Education, Rodney Paige, will 
be in a position to help make these programs a reality.
  Thank you and I hope that my colleagues will support this effort.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 311

       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 ``Strong Character for Strong 
     Schools Act''.

     SEC. 2. PARTNERSHIPS IN CHARACTER EDUCATION PROGRAM.

       Section 10103 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 8003) is amended to read as follows:

     ``SEC. 10103. PARTNERSHIPS IN CHARACTER EDUCATION PROGRAM.

       ``(a) Program Authorized.--
       ``(1) In general.--The Secretary is authorized to award 
     grants to eligible entities for the design and implementation 
     of character education programs that incorporate the elements 
     of character described in subsection (d), as well as other 
     character elements identified by the eligible entities.
       ``(2) Eligible entity.--The term `eligible entity' means--
       ``(A) a State educational agency in partnership with 1 or 
     more local educational agencies;
       ``(B) a State educational agency in partnership with--
       ``(i) one or more local educational agencies; and
       ``(ii) one or more nonprofit organizations or entities, 
     including institutions of higher education;
       ``(C) a local educational agency or consortium of local 
     educational agencies; or
       ``(D) a local educational agency in partnership with 
     another nonprofit organization or entity, including 
     institutions of higher education.
       ``(3) Duration.--Each grant under this section shall be 
     awarded for a period not to exceed 3 years, of which the 
     eligible entity shall not use more than 1 year for planning 
     and program design.
       ``(4) Amount of grants for state educational agencies.--
     Subject to the availability of appropriations, the amount of 
     grant made by the Secretary to a State educational agency in 
     a partnership described in subparagraph (A) or (B) of 
     paragraph (2), that submits an application under subsection 
     (b) and that meets such requirements as the Secretary may 
     establish under this section, shall not be less than 
     $500,000.
       ``(b) Applications.--
       ``(1) Requirement.--Each eligible entity desiring a grant 
     under this section shall submit an application to the 
     Secretary at such time and in such manner as the Secretary 
     may require.
       ``(2) Contents of application.--Each application submitted 
     under this section shall include--
       ``(A) a description of any partnerships or collaborative 
     efforts among the organizations and entities of the eligible 
     entity;
       ``(B) a description of the goals and objectives of the 
     program proposed by the eligible entity;
       ``(C) a description of activities that will be pursued and 
     how those activities will contribute to meeting the goals and 
     objectives described in subparagraph (B), including--
       ``(i) how parents, students (including students with 
     physical and mental disabilities), and other members of the 
     community, including members of private and nonprofit 
     organizations, will be involved in the design and 
     implementation of the program and how the eligible entity 
     will work with the larger community to increase the reach and 
     promise of the program;
       ``(ii) curriculum and instructional practices that will be 
     used or developed;
       ``(iii) methods of teacher training and parent education 
     that will be used or developed; and
       ``(iv) how the program will be linked to other efforts in 
     the schools to improve student performance;
       ``(D) in the case of an eligible entity that is a State 
     educational agency--
       ``(i) a description of how the State educational agency 
     will provide technical and professional assistance to its 
     local educational agency partners in the development and 
     implementation of character education programs; and
       ``(ii) a description of how the State educational agency 
     will assist other interested local educational agencies that 
     are not members of the original partnership in designing and 
     establishing character education programs;
       ``(E) a description of how the eligible entity will 
     evaluate the success of its program--
       ``(i) based on the goals and objectives described in 
     subparagraph (B); and
       ``(ii) in cooperation with the national evaluation 
     conducted pursuant to subsection (c)(2)(B)(iii);
       ``(F) an assurance that the eligible entity annually will 
     provide to the Secretary such information as may be required 
     to determine the effectiveness of the program; and
       ``(G) any other information that the Secretary may require.
       ``(c) Evaluation and Program Development.--
       ``(1) Evaluation and reporting.--
       ``(A) State and local reporting and evaluation.--Each 
     eligible entity receiving a grant under this section shall 
     submit to the Secretary a comprehensive evaluation of the 
     program assisted under this section, including the impact on 
     students (including students with physical and mental 
     disabilities), teachers, administrators, parents, and 
     others--
       ``(i) by the second year of the program; and
       ``(ii) not later than 1 year after completion of the grant 
     period.
       ``(B) Contracts for evaluation.--Each eligible entity 
     receiving a grant under this section may contract with 
     outside sources, including institutions of higher education, 
     and private and nonprofit organizations, for purposes of 
     evaluating its program and measuring the success of the 
     program toward fostering in students the elements of 
     character described in subsection (d).
       ``(2)  National research, dissemination, and evaluation.--
       ``(A) In general.--The Secretary is authorized to make 
     grants to, or enter into contracts or cooperative agreements 
     with, State or local educational agencies, institutions of 
     higher education, tribal organizations, or other public or 
     private agencies or organizations to carry out research, 
     development, dissemination, technical assistance, and 
     evaluation activities that support or inform State and local 
     character education programs. The Secretary shall reserve not 
     more than 5 percent of the funds made available under this 
     section to carry out this paragraph.
       ``(B) Uses.--Funds made available under subparagraph (A) 
     may be used--
       ``(i) to conduct research and development activities that 
     focus on matters such as--

       ``(I) the effectiveness of instructional models for all 
     students, including students with physical and mental 
     disabilities;
       ``(II) materials and curricula that can be used by programs 
     in character education;
       ``(III) models of professional development in character 
     education; and
       ``(IV) the development of measures of effectiveness for 
     character education programs which may include the factors 
     described in paragraph (3);

       ``(ii) to provide technical assistance to State and local 
     programs, particularly on matters of program evaluation;
       ``(iii) to conduct a national evaluation of State and local 
     programs receiving funding under this section; and
       ``(iv) to compile and disseminate, through various 
     approaches (such as a national clearinghouse)--

       ``(I) information on model character education programs;
       ``(II) character education materials and curricula;
       ``(III) research findings in the area of character 
     education and character development; and
       ``(IV) any other information that will be useful to 
     character education program participants, educators, parents, 
     administrators, and others nationwide.

       ``(C) Priority.--In carrying out national activities under 
     this paragraph related to development, dissemination, and 
     technical assistance, the Secretary shall seek to enter into 
     partnerships with national, nonprofit character education 
     organizations with expertise and successful experience in 
     implementing local character education programs

[[Page 1775]]

     that have had an effective impact on schools, students 
     (including students with disabilities), and teachers.
       ``(3) Factors.--Factors which may be considered in 
     evaluating the success of programs funded under this section 
     may include--
       ``(A) discipline issues;
       ``(B) student performance;
       ``(C) participation in extracurricular activities;
       ``(D) parental and community involvement;
       ``(E) faculty and administration involvement;
       ``(F) student and staff morale; and
       ``(G) overall improvements in school climate for all 
     students, including students with physical and mental 
     disabilities.
       ``(d) Elements of Character.--
       ``(1) In general.--Each eligible entity desiring funding 
     under this section shall develop character education programs 
     that incorporate the following elements of character:
       ``(A) Caring.
       ``(B) Civic virtue and citizenship.
       ``(C) Justice and fairness.
       ``(D) Respect.
       ``(E) Responsibility.
       ``(F) Trustworthiness.
       ``(G) Any other elements deemed appropriate by the members 
     of the eligible entity.
       ``(2) Additional elements of character.--An eligible entity 
     participating under this section may, after consultation with 
     schools and communities served by the eligible entity, define 
     additional elements of character that the eligible entity 
     determines to be important to the schools and communities 
     served by the eligible entity.
       ``(e) Use of Funds by State Educational Agency 
     Recipients.--Of the total funds received in any fiscal year 
     under this section by an eligible entity that is a State 
     educational agency--
       ``(1) not more than 10 percent of such funds may be used 
     for administrative purposes; and
       ``(2) the remainder of such funds may be used for--
       ``(A) collaborative initiatives with and between local 
     educational agencies and schools;
       ``(B) the preparation or purchase of materials, and teacher 
     training;
       ``(C) grants to local educational agencies, schools, or 
     institutions of higher education; and
       ``(D) technical assistance and evaluation.
       ``(f) Selection of Grantees.--
       ``(1) Criteria.--The Secretary shall select, through peer 
     review, eligible entities to receive grants under this 
     section on the basis of the quality of the applications 
     submitted under subsection (b), taking into consideration 
     such factors as--
       ``(A) the quality of the activities proposed to be 
     conducted;
       ``(B) the extent to which the program fosters in students 
     the elements of character described in subsection (d) and the 
     potential for improved student performance;
       ``(C) the extent and ongoing nature of parental, student, 
     and community involvement;
       ``(D) the quality of the plan for measuring and assessing 
     success; and
       ``(E) the likelihood that the goals of the program will be 
     realistically achieved.
       ``(2) Diversity of projects.--The Secretary shall approve 
     applications under this section in a manner that ensures, to 
     the extent practicable, that programs assisted under this 
     section--
       ``(A) serve different areas of the Nation, including urban, 
     suburban, and rural areas; and
       ``(B) serve schools that serve minorities, Native 
     Americans, students of limited-English proficiency, 
     disadvantaged students, and students with disabilities.
       ``(g) Participation by Private School Children and 
     Teachers.--Grantees under this section shall provide, to the 
     extent feasible and appropriate, for the participation of 
     students and teachers in private elementary and secondary 
     schools in programs and activities under this section.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $50,000,000 for fiscal year 2002 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, before the Senator from New Mexico leaves 
the floor, I ask permission to join as a cosponsor of this most 
important legislation. It appears to be bipartisan. We have the two 
leading Democrats on the Education Committee plus Republicans. It 
should be a bill that we can pass.
  Mr. DOMENICI. I am grateful that the distinguished minority whip 
would join. We will be working together on this bill. I thank the 
Senator.
  Mr. DODD. Mr. President, I rise to join my friend and colleague from 
New Mexico, Senator Domenici, in introducing the Strong Character for 
Strong Schools Act. Senator Domenici and I have worked together for 
many years on this important issue. We established the Partnerships in 
Character Education Pilot Project in 1994 and have worked regularly 
since then to commemorate National Character Counts Week. So, I am 
pleased that today we are introducing the Strong Character for Strong 
Schools Act to help expand States' and schools' ability to make 
character education a central part of every child's education.
  Our schools may be built with the bricks of English, math and 
science, but character education certainly is the mortar. This 
initiative ensures that our children's character, as well as their 
minds, receives care and nurturing in our schools. Character education 
means teaching students about such qualities as caring, citizenship, 
fairness, respect, responsibility, trustworthiness, and other qualities 
that their community values.
  Character education provides students a context within which to 
learn. If we view education simply as the imparting of knowledge to our 
children, then we will not only miss an opportunity, but will 
jeopardize our future. Character education isn't a separate subject, 
but part of a seamless garment of learning. For example, at Waterford 
High School, in Connecticut, as part of the character education 
program, math students designed a ramp for kids who use wheelchairs. 
The students learned about math, but also about caring.
  Theodore Roosevelt said that ``[t]o educate a person's mind and not 
his character is to educate a menace.'' That may be, but I prefer Dr. 
Martin Luther King's exhortation that we judge each other not by the 
color of our skin, but by the content of our character.
  A recent survey of high school students by the Character Counts 
Coalition found that during the preceding year, 71 percent cheated on 
an exam; 92 percent lied to their parents and 78 percent lied to a 
teacher; about 35 percent had stolen from a store; and 16 percent were 
drunk in school. This doesn't mean that these are bad kids, but it does 
mean that we need more character education.
  We know that these programs work. Schools across the country that 
have adopted strong character education programs report better student 
performance, fewer discipline problems, and increased student 
involvement with the community. Children want direction--they want to 
be taught right from wrong. The American public wants character 
education in our schools, too. Studies show that about 90 percent of 
Americans support schools teaching character education.
  Virtually all national education organizations are involved in 
promoting character education. Last June, the Connecticut Department of 
Education, on behalf of many State organizations, issued a Call to 
Action letter, outlining a program to improve the school climate in all 
Connecticut schools. And, the Connecticut Education Association has 
developed its own character education program that teaches kids about 
not bullying and other behaviors that can disrupt schools and make it 
difficult for children to learn.
  As all education policy should be, character education is bi-
partisan. When Senator Domenici and I introduced a resolution last 
Congress establishing National Character Counts Week, we had 57 co-
sponsors, with broad support in both parties. And President Bush, in 
his education plan, calls for increased funding for character 
education.
  Our children may be one-quarter of our population, but they 
definitely are 100 percent of our future. That's why this measure is so 
important--it provides a helping hand to our schools and communities to 
ensure that children's futures are bright and filled with opportunities 
and success. So, I am confident that not only are we doing the right 
thing here, but that we will see this bill become law along with other 
education reforms, this Congress.
  Mr. CLELAND. Mr. President, when I was a boy growing up in Lithonia, 
GA, I was privileged to have accomplished and dedicated teachers who 
provided me with a strong foundation in the three R's. Thanks to their 
capable and committed efforts, I received an excellent education in 
reading, writing, and arithmetic. And thanks to their good example and 
their ability to teach

[[Page 1776]]

through inspiration, I was also well versed in the fourth R, which I 
call ``respect.''
  What my teachers demonstrated so effectively almost five decades ago 
is that character education is essential to any well-rounded system of 
education. We can work together to help ensure that all children in 
America will start school ready to learn. We can pool our efforts--
parents, teachers, community leaders, and elected officials--to enable 
our students to be first in the world in scientific and academic 
achievement. But I believe the greatest gift and most effective tool we 
can give to our children is to instill in them, from the beginning, the 
values and beliefs which help mold their character. Character is the 
essential building block in each youngster's journey to become a 
responsible, moral adult. It is the gift my teachers gave me when they 
offered me a first-rate education which addressed not only matters of 
the head, but of the heart as well.
  Thanks, in part, to the efforts of my distinguished colleagues, 
Senators Domenici and Dodd, character education has spread into 
thousands of classrooms throughout this nation. In 1994, Senator 
Domenici with the support of Senators Dodd and Mikulski offered a 
successful amendment to the Improving America's Schools Act which 
established, for the first time ever, a grant program in the Department 
of Education to enable State education agencies, in partnership with 
local education agencies, to develop character education programs. My 
State of Georgia was one of the first to receive funding under the 
Partnerships in Character Education Pilot Projects. Since its inception 
in 1995, this program has awarded more than $25 million to 37 States 
throughout the country. I am proud to join my colleagues today in 
introducing legislation to expand this worthy program which encourages 
schools and communities to develop and sustain character education 
programs of excellence.
  It has been said that the character of a nation is only as strong as 
the character of its individual citizens. In illustration of this 
truth, I like to tell a true story which happened decades ago during 
the war in Korea. At that time, one of our generals was captured by the 
Communists. He was taken to an isolated prison camp and told that he 
had but a few minutes to write a letter to his family. The implication 
was that he was to be executed shortly. The general's letter was brief 
and to the point: ``Tell Bill,'' he wrote, ``the word is integrity.''
  The word is indeed integrity. This following Monday, Presidents' Day, 
I will host a Summit on Character at the State Capitol in Georgia, 
which will be attended by State leaders from across the political and 
social spectrum. The purpose of the Summit is to rekindle the American 
spirit that motivated the Founders in constituting our nation and to 
inspire Georgians to develop the highest standards of character in 
themselves and in the youth of our State. Benjamin Franklin once said 
that ``The noblest question in the world is, What good may I do in 
it?'' The Character Summit in Georgia has this in common with the 
legislation we are introducing today: They both seek to encourage moral 
character and civic virtue in our children--America's most precious 
resource and the future of this great Nation.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Baucus, Mr. Roberts, Mr. 
        Conrad, Mr. Brownback, Mrs. Lincoln, Mr. Burns, Mr. Craig, Mr. 
        Lugar, Mr. Enzi, Mr. Nelson of Nebraska, and Mr. Stevens):
  S. 312. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for farmers and fishermen, and for other purposes; to the 
Committee on Finance.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Baucus, Mr. Roberts, Mrs. 
        Hutchison, Mr. Burns, Mr. Breaux, Mr. Hatch, Mr. Craig, Mr. 
        Allard, Mr. Lugar, Mr. Gramm, Mr. Hagel, Mr. Bunning, Mr. 
        DeWine, Mr. Bond, Mr. Fitzgerald, Mr. Conrad, Mr. Murkowski, 
        Mr. Stevens, Mr. Kyl, Mr. Brownback, and Mr. Sessions).
  S. 313. A bill to amend the Internal Revenue Code of 1986 to provide 
for Farm, Fishing, and Ranch Risk Management Accounts, and for other 
purposes; to the Committee on Finance.
                                 ______
                                 
      By Mr. GRASSLEY:
  S. 314. A bill to amend the Internal Revenue Code of 1986 to provide 
declaratory judgement relief for section 521 cooperatives; to the 
Committee on Finance.
  Mr. GRASSLEY. Mr. President, I would like to discuss legislation I'm 
offering today on behalf of myself and Senators Baucus, Brownback, 
Burns, Lugar, Roberts, Craig, Enzi, and Nelson from Nebraska this 
afternoon. It will assist millions of farmers across the nation. I've 
named the bill the Tax Empowerment and Relief for Farmers and Fishermen 
Act, or what I will refer to as TERFF.
  I'm a farmer, like my father was before me. I understand farming and 
how policy decisions from Washington impact hardworking farmers, like 
my son Robin. Before I ran for elected office and after I leave, God 
willing, I'll still be farming. There is little that I feel more 
strongly about than providing the agriculture community potential to 
survive and thrive. As far as I'm concerned, agriculture is my ``terf'' 
and as long as I'm in this town, I'll do all I can to serve my friends 
and neighbors in the agriculture community.
  This legislation has already been adopted by the Senate multiple 
times. In the midst of a serious downturn in the agriculture economy, 
it seems to me we ought to be doing everything we can to help farmers, 
and this would provide significant assistance.
  For example, my agriculture tax package will include:
  The Farm, Fish, and Ranch Risk Management Accounts--these farmer 
saving accounts would allow farmers to contribute up to 20 percent of 
their income in an account, and deduct it in the same year. Farm 
accounts would be a very important risk management tool that will help 
farmers put away money when there's actual income, so that, in the bad 
times, there will be a safety net. This measure has strong bipartisan 
support and was actually sent to President Clinton, who vetoed it.
  Farmers who participate in the Conservation Reserve Program CRP, are 
unnecessarily struggling during tax season because of a recent case 
pushed by the IRS. The latest 6th Circuit court's ruling treats CRP 
payments as farm income subject to the additional self employment tax 
rate of 15 percent.
  Senator Brownback has taken the lead on fixing this problem. This 
unfair tax not only ignores the intent of Congress in creating the CRP, 
it discourages farmers from using environmentally pro-active measures. 
At a time when farmers are struggling to regain their footing 
economically and do the right thing environmentally--it's important 
that Congress support them by upholding it promise on CRP.
  Senator Lugar has led the effort to expand the current program where 
companies can donate to food banks, so that farmers and restaurants can 
also donate surplus food directly to needy food banks. This will be a 
win for the farmers and a big win for people who depend on food bank 
assistance.
  This was also part of the vetoed tax bill. When we passed income 
averaging for farmers a few years ago, we neglected to take into 
account the problem of running into the alternative minimum tax, which 
many farmers are facing now. My bill will fix this growing problem.
  My bill expands opportunities for beginning farmers who are in need 
of low interest rate loans for capital purchases of farmland and 
equipment.
  Current law permits state authorities to issue tax exempt bonds and 
to lend the proceeds from the sale of the bonds to beginning farmers 
and ranchers to finance the cost of acquiring land, buildings and 
equipment used in a farm or ranch operation.
  Unfortunately, aggie bonds are subjected to a volume cap and must 
compete with big industrial projects for bond allocation. Aggie bonds 
share few similarities to industrial revenue bonds and should not be 
subjected to the volume cap established for industrial revenue bonds.

[[Page 1777]]

  Insufficient allocation of funding due to the volume cap limits the 
effectiveness of this program. We can't stand by and allow the next 
generation of farmers to lose an opportunity to participate in farming 
because of competition with industry for reduced interest loan rates.
  Recently the IRS determined that some cooperatives should be exposed 
to a regular corporate tax due to the fact that they are using organic 
value-added practices rather than manufactured value-added practices. 
This is unfair, and needs to be fixed.
  And of course my package wouldn't be complete without a provision 
leveling the playing field for ethanol producers.
  The Small Ethanol Producer Credit will allow small cooperative 
producers of ethanol to be able to receive the same tax benefits as 
large companies. This provision provides cooperatives the ability to 
elect to pass through small ethanol producer credits to its patrons.
  The ``TERFF'' package will do more to reform taxes for the American 
farmer than any other measure in recent memory. I'll be urging my 
colleagues to strongly support this measure. It's a bill that should 
have the unanimous support it enjoyed last congress on the Senate 
floor. As sure as I'm chairman of the Finance Committee, I will push to 
have this package passed into law during the 107th Congress. Mr. 
President, I ask unanimous consent that the text of these three bills 
be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 312

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

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Empowerment and Relief for Farmers and Fishermen (TERFF) 
     Act''.
       (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.--

Sec. 1. Short title; etc.
Sec. 2. Farm, fishing, and ranch risk management accounts.
Sec. 3. Written agreement relating to exclusion of certain farm rental 
              income from net earnings from self-employment.
Sec. 4. Treatment of conservation reserve program payments as rentals 
              from real estate.
Sec. 5. Exemption of agricultural bonds from State volume cap.
Sec. 6. Modifications to section 512(b)(13).
Sec. 7. Charitable deduction for contributions of food inventory.
Sec. 8. Income averaging for farmers and fishermen not to increase 
              alternative minimum tax liability.
Sec. 9. Cooperative marketing includes value-added processing through 
              animals.
Sec. 10. Declaratory judgment relief for section 521 cooperatives.
Sec. 11. Small ethanol producer credit.
Sec. 12. Payment of dividends on stock of cooperatives without reducing 
              patronage dividends.

     SEC. 2. FARM, FISHING, AND RANCH RISK MANAGEMENT ACCOUNTS.

       (a) In General.--Subpart C of part II of subchapter E of 
     chapter 1 (relating to taxable year for which deductions 
     taken) is amended by inserting after section 468B the 
     following new section:

     ``SEC. 468C. FARM, FISHING, AND RANCH RISK MANAGEMENT 
                   ACCOUNTS.

       ``(a) Deduction Allowed.--In the case of an individual 
     engaged in an eligible farming business or commercial 
     fishing, there shall be allowed as a deduction for any 
     taxable year the amount paid in cash by the taxpayer during 
     the taxable year to a Farm, Fishing, and Ranch Risk 
     Management Account (hereinafter referred to as the `FFARRM 
     Account').
       ``(b) Limitation.--
       ``(1) Contributions.--The amount which a taxpayer may pay 
     into the FFARRM Account for any taxable year shall not exceed 
     20 percent of so much of the taxable income of the taxpayer 
     (determined without regard to this section) which is 
     attributable (determined in the manner applicable under 
     section 1301) to any eligible farming business or commercial 
     fishing.
       ``(2) Distributions.--Distributions from a FFARRM Account 
     may not be used to purchase, lease, or finance any new 
     fishing vessel, add capacity to any fishery, or otherwise 
     contribute to the overcapitalization of any fishery. The 
     Secretary of Commerce shall implement regulations to enforce 
     this paragraph.
       ``(c) Eligible Businesses.--For purposes of this section--
       ``(1) Eligible farming business.--The term `eligible 
     farming business' means any farming business (as defined in 
     section 263A(e)(4)) which is not a passive activity (within 
     the meaning of section 469(c)) of the taxpayer.
       ``(2) Commercial Fishing.--The term `commercial fishing' 
     has the meaning given such term by section (3) of the 
     Magnuson-Stevens Fishery Conservation and Management Act (16 
     U.S.C. 1802) but only if such fishing is not a passive 
     activity (within the meaning of section 469(c)) of the 
     taxpayer.
       ``(d) FFARRM Account.--For purposes of this section--
       ``(1) In general.--The term `FFARRM Account' means a trust 
     created or organized in the United States for the exclusive 
     benefit of the taxpayer, but only if the written governing 
     instrument creating the trust meets the following 
     requirements:
       ``(A) No contribution will be accepted for any taxable year 
     in excess of the amount allowed as a deduction under 
     subsection (a) for such year.
       ``(B) The trustee is a bank (as defined in section 408(n)) 
     or another person who demonstrates to the satisfaction of the 
     Secretary that the manner in which such person will 
     administer the trust will be consistent with the requirements 
     of this section.
       ``(C) The assets of the trust consist entirely of cash or 
     of obligations which have adequate stated interest (as 
     defined in section 1274(c)(2)) and which pay such interest 
     not less often than annually.
       ``(D) All income of the trust is distributed currently to 
     the grantor.
       ``(E) The assets of the trust will not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       ``(2) Account taxed as grantor trust.--The grantor of a 
     FFARRM Account shall be treated for purposes of this title as 
     the owner of such Account and shall be subject to tax thereon 
     in accordance with subpart E of part I of subchapter J of 
     this chapter (relating to grantors and others treated as 
     substantial owners).
       ``(e) Inclusion of Amounts Distributed.--
       ``(1) In general.--Except as provided in paragraph (2), 
     there shall be includible in the gross income of the taxpayer 
     for any taxable year--
       ``(A) any amount distributed from a FFARRM Account of the 
     taxpayer during such taxable year, and
       ``(B) any deemed distribution under--
       ``(i) subsection (f )(1) (relating to deposits not 
     distributed within 5 years),
       ``(ii) subsection (f )(2) (relating to cessation in 
     eligible farming business), and
       ``(iii) subparagraph (B) or (C) of subsection (f )(3) 
     (relating to prohibited transactions and pledging account as 
     security).
       ``(2) Exceptions.--Paragraph (1)(A) shall not apply to--
       ``(A) any distribution to the extent attributable to income 
     of the Account, and
       ``(B) the distribution of any contribution paid during a 
     taxable year to a FFARRM Account to the extent that such 
     contribution exceeds the limitation applicable under 
     subsection (b) if requirements similar to the requirements of 
     section 408(d)(4) are met.

     For purposes of subparagraph (A), distributions shall be 
     treated as first attributable to income and then to other 
     amounts.
       ``(f ) Special Rules.--
       ``(1) Tax on deposits in account which are not distributed 
     within 5 years.--
       ``(A) In general.--If, at the close of any taxable year, 
     there is a nonqualified balance in any FFARRM Account--
       ``(i) there shall be deemed distributed from such Account 
     during such taxable year an amount equal to such balance, and
       ``(ii) the taxpayer's tax imposed by this chapter for such 
     taxable year shall be increased by 10 percent of such deemed 
     distribution.

     The preceding sentence shall not apply if an amount equal to 
     such nonqualified balance is distributed from such Account to 
     the taxpayer before the due date (including extensions) for 
     filing the return of tax imposed by this chapter for such 
     year (or, if earlier, the date the taxpayer files such return 
     for such year).
       ``(B) Nonqualified balance.--For purposes of subparagraph 
     (A), the term `nonqualified balance' means any balance in the 
     Account on the last day of the taxable year which is 
     attributable to amounts deposited in such Account before the 
     4th preceding taxable year.
       ``(C) Ordering rule.--For purposes of this paragraph, 
     distributions from a FFARRM Account (other than distributions 
     of current income) shall be treated as made from deposits in 
     the order in which such deposits were made, beginning with 
     the earliest deposits.
       ``(2) Cessation in eligible business.--At the close of the 
     first disqualification period after a period for which the 
     taxpayer was engaged in an eligible farming business or 
     commercial fishing, there shall be deemed distributed from 
     the FFARRM Account of the taxpayer an amount equal to the 
     balance in such Account (if any) at the close of such 
     disqualification period. For purposes of the

[[Page 1778]]

     preceding sentence, the term `disqualification period' means 
     any period of 2 consecutive taxable years for which the 
     taxpayer is not engaged in an eligible farming business or 
     commercial fishing.
       ``(3) Certain rules to apply.--Rules similar to the 
     following rules shall apply for purposes of this section:
       ``(A) Section 220(f )(8) (relating to treatment on death).
       ``(B) Section 408(e)(2) (relating to loss of exemption of 
     account where individual engages in prohibited transaction).
       ``(C) Section 408(e)(4) (relating to effect of pledging 
     account as security).
       ``(D) Section 408(g) (relating to community property laws).
       ``(E) Section 408(h) (relating to custodial accounts).
       ``(4) Time when payments deemed made.--For purposes of this 
     section, a taxpayer shall be deemed to have made a payment to 
     a FFARRM Account on the last day of a taxable year if such 
     payment is made on account of such taxable year and is made 
     on or before the due date (without regard to extensions) for 
     filing the return of tax for such taxable year.
       ``(5) Individual.--For purposes of this section, the term 
     `individual' shall not include an estate or trust.
       ``(6) Deduction not allowed for self-employment tax.--The 
     deduction allowable by reason of subsection (a) shall not be 
     taken into account in determining an individual's net 
     earnings from self-employment (within the meaning of section 
     1402(a)) for purposes of chapter 2.
       ``(g) Reports.--The trustee of a FFARRM Account shall make 
     such reports regarding such Account to the Secretary and to 
     the person for whose benefit the Account is maintained with 
     respect to contributions, distributions, and such other 
     matters as the Secretary may require under regulations. The 
     reports required by this subsection shall be filed at such 
     time and in such manner and furnished to such persons at such 
     time and in such manner as may be required by such 
     regulations.''.
       (b) Tax on Excess Contributions.--
       (1) Subsection (a) of section 4973 (relating to tax on 
     excess contributions to certain tax-favored accounts and 
     annuities) is amended by striking ``or'' at the end of 
     paragraph (3), by redesignating paragraph (4) as paragraph 
     (5), and by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) a FFARRM Account (within the meaning of section 
     468C(d)), or''.
       (2) Section 4973 is amended by adding at the end the 
     following new subsection:
       ``(g) Excess Contributions to FFARRM Accounts.--For 
     purposes of this section, in the case of a FFARRM Account 
     (within the meaning of section 468C(d)), the term `excess 
     contributions' means the amount by which the amount 
     contributed for the taxable year to the Account exceeds the 
     amount which may be contributed to the Account under section 
     468C(b) for such taxable year. For purposes of this 
     subsection, any contribution which is distributed out of the 
     FFARRM Account in a distribution to which section 
     468C(e)(2)(B) applies shall be treated as an amount not 
     contributed.''.
       (3) The section heading for section 4973 is amended to read 
     as follows:

     ``SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, 
                   ANNUITIES, ETC.''.

       (4) The table of sections for chapter 43 is amended by 
     striking the item relating to section 4973 and inserting the 
     following new item:

``Sec. 4973. Excess contributions to certain accounts, annuities, 
              etc.''.

       (c) Tax on Prohibited Transactions.--
       (1) Subsection (c) of section 4975 (relating to tax on 
     prohibited transactions) is amended by adding at the end the 
     following new paragraph:
       ``(6) Special rule for ffarrm accounts.--A person for whose 
     benefit a FFARRM Account (within the meaning of section 
     468C(d)) is established shall be exempt from the tax imposed 
     by this section with respect to any transaction concerning 
     such account (which would otherwise be taxable under this 
     section) if, with respect to such transaction, the account 
     ceases to be a FFARRM Account by reason of the application of 
     section 468C(f )(3)(A) to such account.''.
       (2) Paragraph (1) of section 4975(e) is amended by 
     redesignating subparagraphs (E) and (F) as subparagraphs (F) 
     and (G), respectively, and by inserting after subparagraph 
     (D) the following new subparagraph:
       ``(E) a FFARRM Account described in section 468C(d),''.
       (d) Failure To Provide Reports on FFARRM Accounts.--
     Paragraph (2) of section 6693(a) (relating to failure to 
     provide reports on certain tax-favored accounts or annuities) 
     is amended by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively, and by inserting 
     after subparagraph (B) the following new subparagraph:
       ``(C) section 468C(g) (relating to FFARRM Accounts),''.
       (e) Clerical Amendment.--The table of sections for subpart 
     C of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 468B the 
     following new item:

``Sec. 468C. Farm, Fishing and Ranch Risk Management Accounts.''.

       (f ) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 3. WRITTEN AGREEMENT RELATING TO EXCLUSION OF CERTAIN 
                   FARM RENTAL INCOME FROM NET EARNINGS FROM SELF-
                   EMPLOYMENT.

       (a) Internal Revenue Code.--Section 1402(a)(1)(A) (relating 
     to net earnings from self-employment) is amended by striking 
     ``an arrangement'' and inserting ``a lease agreement''.
       (b) Social Security Act.--Section 211(a)(1)(A) of the 
     Social Security Act is amended by striking ``an arrangement'' 
     and inserting ``a lease agreement''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 4. TREATMENT OF CONSERVATION RESERVE PROGRAM PAYMENTS AS 
                   RENTALS FROM REAL ESTATE.

       (a) In General.--Section 1402(a)(1) (defining net earnings 
     from self-employment) is amended by inserting ``and including 
     payments under section 1233(2) of the Food Security Act of 
     1985 (16 U.S.C. 3833(2))'' after ``crop shares''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2001.

     SEC. 5. EXEMPTION OF AGRICULTURAL BONDS FROM STATE VOLUME 
                   CAP.

       (a) In General.--Section 146(g) (relating to exception for 
     certain bonds) is amended by striking ``and'' at the end of 
     paragraph (3), by striking the period at the end of paragraph 
     (4) and inserting ``, and'', and by inserting after paragraph 
     (4) the following new paragraph:
       ``(5) any qualified small issue bond described in section 
     144(a)(12)(B)(ii).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 2001.

     SEC. 6. MODIFICATIONS TO SECTION 512(B)(13).

       (a) In General.--Paragraph (13) of section 512(b) is 
     amended by redesignating subparagraph (E) as subparagraph (F) 
     and by inserting after subparagraph (D) the following new 
     paragraph:
       ``(E) Paragraph to apply only to excess payments.--
       ``(i) In general.--Subparagraph (A) shall apply only to the 
     portion of a specified payment received by the controlling 
     organization that exceeds the amount which would have been 
     paid if such payment met the requirements prescribed under 
     section 482.
       ``(ii) Addition to tax for valuation misstatements.--The 
     tax imposed by this chapter on the controlling organization 
     shall be increased by an amount equal to 20 percent of such 
     excess.''.
       (b) Effective Date.--
       (1) In general.--The amendment made by this section shall 
     apply to payments received or accrued after December 31, 
     2000.
       (2) Payments subject to binding contract transition rule.--
     If the amendments made by section 1041 of the Taxpayer Relief 
     Act of 1997 did not apply to any amount received or accrued 
     in the first 2 taxable years beginning on or after the date 
     of the enactment of this Act under any contract described in 
     subsection (b)(2) of such section, such amendments also shall 
     not apply to amounts received or accrued under such contract 
     before January 1, 2001.

     SEC. 7. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD 
                   INVENTORY.

       (a) In General.--Subsection (e) of section 170 (relating to 
     certain contributions of ordinary income and capital gain 
     property) is amended by adding at the end the following new 
     paragraph:
       ``(7) Special rule for contributions of food inventory.--
     For purposes of this section--
       ``(A) Contributions by non-corporate taxpayers.--In the 
     case of a charitable contribution of food by a taxpayer, 
     paragraph (3)(A) shall be applied without regard to whether 
     or not the contribution is made by a corporation.
       ``(B) Limit on reduction.--In the case of a charitable 
     contribution of food which is a qualified contribution 
     (within the meaning of paragraph (3)(A), as modified by 
     subparagraph (A) of this paragraph)--
       ``(i) paragraph (3)(B) shall not apply, and
       ``(ii) the reduction under paragraph (1)(A) for such 
     contribution shall be no greater than the amount (if any) by 
     which the amount of such contribution exceeds twice the basis 
     of such food.
       ``(C) Determination of basis.--For purposes of this 
     paragraph, if a taxpayer uses the cash method of accounting, 
     the basis of any qualified contribution of such taxpayer 
     shall be deemed to be 50 percent of the fair market value of 
     such contribution.
       ``(D) Determination of fair market value.--In the case of a 
     charitable contribution of food which is a qualified 
     contribution (within the meaning of paragraph (3), as 
     modified by subparagraphs (A) and (B) of this paragraph) and 
     which, solely by reason of internal standards of the 
     taxpayer, lack of market, or similar circumstances, or which 
     is produced by the taxpayer exclusively for the purposes of 
     transferring the food to an organization described in 
     paragraph (3)(A), cannot or will not be sold, the fair market

[[Page 1779]]

     value of such contribution shall be determined--
       ``(i) without regard to such internal standards, such lack 
     of market, such circumstances, or such exclusive purpose, and
       ``(ii) if applicable, by taking into account the price at 
     which the same or similar food items are sold by the taxpayer 
     at the time of the contribution (or, if not so sold at such 
     time, in the recent past).
       ``(E) Termination.--This paragraph shall not apply to any 
     contribution made during any taxable year beginning after 
     December 31, 2004.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 8. INCOME AVERAGING FOR FARMERS AND FISHERMEN NOT TO 
                   INCREASE ALTERNATIVE MINIMUM TAX LIABILITY.

       (a) In General.--Section 55(c) (defining regular tax) is 
     amended by redesignating paragraph (2) as paragraph (3) and 
     by inserting after paragraph (1) the following new paragraph:
       ``(2) Coordination with income averaging for farmers and 
     fishermen.--Solely for purposes of this section, section 1301 
     (relating to averaging of farm and fishing income) shall not 
     apply in computing the regular tax.''.
       (b) Allowing Income Averaging for Fishermen.--
       (1) In general.--Section 1301(a) is amended by striking 
     ``farming business'' and inserting ``farming business or 
     fishing business''.
       (2) Definition of elected farm income.--
       (A) In general.--Clause (i) of section 1301(b)(1)(A) is 
     amended by inserting ``or fishing business'' before the 
     semicolon.
       (B) Conforming amendment.--Subparagraph (B) of section 
     1301(b)(1) is amended by inserting ``or fishing business'' 
     after ``farming business'' both places it occurs.
       (3) Definition of fishing business.--Section 1301(b) is 
     amended by adding at the end the following new paragraph:
       ``(4) Fishing business.--The term `fishing business' means 
     the conduct of commercial fishing as defined in section 3 of 
     the Magnuson-Stevens Fishery Conservation and Management Act 
     (16 U.S.C. 1802).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 9. COOPERATIVE MARKETING INCLUDES VALUE-ADDED PROCESSING 
                   THROUGH ANIMALS.

       (a) In General.--Section 1388 (relating to definitions and 
     special rules) is amended by adding at the end the following 
     new subsection:
       ``(k) Cooperative Marketing Includes Value-Added Processing 
     Through Animals.--For purposes of section 521 and this 
     subchapter, the term `marketing the products of members or 
     other producers' includes feeding the products of members or 
     other producers to cattle, hogs, fish, chickens, or other 
     animals and selling the resulting animals or animal 
     products.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 10. DECLARATORY JUDGMENT RELIEF FOR SECTION 521 
                   COOPERATIVES.

       (a) In General.--Section 7428(a)(1) (relating to 
     declaratory judgments of tax exempt organizations) is amended 
     by striking ``or'' at the end of subparagraph (B) and by 
     adding at the end the following new subparagraph:
       ``(D) with respect to the initial qualification or 
     continuing qualification of a cooperative as described in 
     section 521(b) which is exempt from tax under section 521(a), 
     or''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to pleadings filed after the date of 
     the enactment of this Act but only with respect to 
     determinations (or requests for determinations) made after 
     January 1, 2001.

     SEC. 11. SMALL ETHANOL PRODUCER CREDIT.

       (a) Allocation of Alcohol Fuels Credit to Patrons of a 
     Cooperative.--Section 40(g) (relating to alcohol used as 
     fuel) is amended by adding at the end the following new 
     paragraph:
       ``(6) Allocation of small ethanol producer credit to 
     patrons of cooperative.--
       ``(A) Election to allocate.--
       ``(i) In general.--In the case of a cooperative 
     organization described in section 1381(a), any portion of the 
     credit determined under subsection (a)(3) for the taxable 
     year may, at the election of the organization, be apportioned 
     pro rata among patrons of the organization on the basis of 
     the quantity or value of business done with or for such 
     patrons for the taxable year.
       ``(ii) Form and effect of election.--An election under 
     clause (i) for any taxable year shall be made on a timely 
     filed return for such year. Such election, once made, shall 
     be irrevocable for such taxable year.
       ``(B) Treatment of organizations and patrons.--The amount 
     of the credit apportioned to patrons under subparagraph (A)--
       ``(i) shall not be included in the amount determined under 
     subsection (a) with respect to the organization for the 
     taxable year,
       ``(ii) shall be included in the amount determined under 
     subsection (a) for the taxable year of each patron for which 
     the patronage dividends for the taxable year described in 
     subparagraph (A) are included in gross income, and
       ``(iii) shall be included in gross income of such patrons 
     for the taxable year in the manner and to the extent provided 
     in section 87.
       ``(C) Special rules for decrease in credits for taxable 
     year.--If the amount of the credit of a cooperative 
     organization determined under subsection (a)(3) for a taxable 
     year is less than the amount of such credit shown on the 
     return of the cooperative organization for such year, an 
     amount equal to the excess of--
       ``(i) such reduction, over
       ``(ii) the amount not apportioned to such patrons under 
     subparagraph (A) for the taxable year,

     shall be treated as an increase in tax imposed by this 
     chapter on the organization. Such increase shall not be 
     treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit under this subpart or 
     subpart A, B, E, or G.''.
       (b) Improvements to Small Ethanol Producer Credit.--
       (1) Definition of small ethanol producer.--Section 40(g) 
     (relating to definitions and special rules for eligible small 
     ethanol producer credit) is amended by striking 
     ``30,000,000'' each place it appears and inserting 
     ``60,000,000''.
       (2) Small ethanol producer credit not a passive activity 
     credit.--Clause (i) of section 469(d)(2)(A) is amended by 
     striking ``subpart D'' and inserting ``subpart D, other than 
     section 40(a)(3),''.
       (3) Allowing credit against minimum tax.--
       (A) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax) is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) Special rules for small ethanol producer credit.--
       ``(A) In general.--In the case of the small ethanol 
     producer credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the credit, and
       ``(ii) in applying paragraph (1) to the credit--

       ``(I) subparagraphs (A) and (B) thereof shall not apply, 
     and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the small 
     ethanol producer credit).

       ``(B) Small ethanol producer credit.--For purposes of this 
     subsection, the term `small ethanol producer credit' means 
     the credit allowable under subsection (a) by reason of 
     section 40(a)(3).''.
       (B) Conforming amendment.--Subclause (II) of section 
     38(c)(2)(A)(ii) is amended by striking ``(other'' and all 
     that follows through ``credit)'' and inserting ``(other than 
     the empowerment zone employment credit or the small ethanol 
     producer credit)''.
       (4) Small ethanol producer credit not added back to income 
     under section 87.--Section 87 (relating to income inclusion 
     of alcohol fuel credit) is amended to read as follows:

     ``SEC. 87. ALCOHOL FUEL CREDIT.

       ``Gross income includes an amount equal to the sum of--
       ``(1) the amount of the alcohol mixture credit determined 
     with respect to the taxpayer for the taxable year under 
     section 40(a)(1), and
       ``(2) the alcohol credit determined with respect to the 
     taxpayer for the taxable year under section 40(a)(2).''.
       (c) Conforming Amendment.--Section 1388 (relating to 
     definitions and special rules for cooperative organizations), 
     as amended by section 9, is amended by adding at the end the 
     following new subsection:
       ``(l) Cross Reference.--For provisions relating to the 
     apportionment of the alcohol fuels credit between cooperative 
     organizations and their patrons, see section 40(g)(6).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 12. PAYMENT OF DIVIDENDS ON STOCK OF COOPERATIVES 
                   WITHOUT REDUCING PATRONAGE DIVIDENDS.

       (a) In General.--Subsection (a) of section 1388 (relating 
     to patronage dividend defined) is amended by adding at the 
     end the following new sentence: ``For purposes of paragraph 
     (3), net earnings shall not be reduced by amounts paid during 
     the year as dividends on capital stock or other proprietary 
     capital interests of the organization to the extent that the 
     articles of incorporation or bylaws of such organization or 
     other contract with patrons provide that such dividends are 
     in addition to amounts otherwise payable to patrons which are 
     derived from business done with or for patrons during the 
     taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions in taxable years beginning after 
     the date of the enactment of this Act.
                                  ____


                                 S. 313

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

[[Page 1780]]



     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Farm, 
     Fishing, and Ranch Risk Management Act''.
       (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.

     SEC. 2. FARM, FISHING, AND RANCH RISK MANAGEMENT ACCOUNTS.

       (a) In General.--Subpart C of part II of subchapter E of 
     chapter 1 (relating to taxable year for which deductions 
     taken) is amended by inserting after section 468B the 
     following new section:

     ``SEC. 468C. FARM, FISHING, AND RANCH RISK MANAGEMENT 
                   ACCOUNTS.

       ``(a) Deduction Allowed.--In the case of an individual 
     engaged in an eligible farming business or commercial 
     fishing, there shall be allowed as a deduction for any 
     taxable year the amount paid in cash by the taxpayer during 
     the taxable year to a Farm, Fishing, and Ranch Risk 
     Management Account (hereinafter referred to as the `FFARRM 
     Account').
       ``(b) Limitation.--
       ``(1) Contributions.--The amount which a taxpayer may pay 
     into the FFARRM Account for any taxable year shall not exceed 
     20 percent of so much of the taxable income of the taxpayer 
     (determined without regard to this section) which is 
     attributable (determined in the manner applicable under 
     section 1301) to any eligible farming business or commercial 
     fishing.
       ``(2) Distributions.--Distributions from a FFARRM Account 
     may not be used to purchase, lease, or finance any new 
     fishing vessel, add capacity to any fishery, or otherwise 
     contribute to the overcapitalization of any fishery. The 
     Secretary of Commerce shall implement regulations to enforce 
     this paragraph.
       ``(c) Eligible Businesses.--For purposes of this section--
       ``(1) Eligible farming business.--The term `eligible 
     farming business' means any farming business (as defined in 
     section 263A(e)(4)) which is not a passive activity (within 
     the meaning of section 469(c)) of the taxpayer.
       ``(2) Commercial fishing.--The term `commercial fishing' 
     has the meaning given such term by section (3) of the 
     Magnuson-Stevens Fishery Conservation and Management Act (16 
     U.S.C. 1802) but only if such fishing is not a passive 
     activity (within the meaning of section 469(c)) of the 
     taxpayer.
       ``(d) FFARRM Account.--For purposes of this section--
       ``(1) In general.--The term `FFARRM Account' means a trust 
     created or organized in the United States for the exclusive 
     benefit of the taxpayer, but only if the written governing 
     instrument creating the trust meets the following 
     requirements:
       ``(A) No contribution will be accepted for any taxable year 
     in excess of the amount allowed as a deduction under 
     subsection (a) for such year.
       ``(B) The trustee is a bank (as defined in section 408(n)) 
     or another person who demonstrates to the satisfaction of the 
     Secretary that the manner in which such person will 
     administer the trust will be consistent with the requirements 
     of this section.
       ``(C) The assets of the trust consist entirely of cash or 
     of obligations which have adequate stated interest (as 
     defined in section 1274(c)(2)) and which pay such interest 
     not less often than annually.
       ``(D) All income of the trust is distributed currently to 
     the grantor.
       ``(E) The assets of the trust will not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       ``(2) Account taxed as grantor trust.--The grantor of a 
     FFARRM Account shall be treated for purposes of this title as 
     the owner of such Account and shall be subject to tax thereon 
     in accordance with subpart E of part I of subchapter J of 
     this chapter (relating to grantors and others treated as 
     substantial owners).
       ``(e) Inclusion of Amounts Distributed.--
       ``(1) In general.--Except as provided in paragraph (2), 
     there shall be includible in the gross income of the taxpayer 
     for any taxable year--
       ``(A) any amount distributed from a FFARRM Account of the 
     taxpayer during such taxable year, and
       ``(B) any deemed distribution under--
       ``(i) subsection (f )(1) (relating to deposits not 
     distributed within 5 years),
       ``(ii) subsection (f )(2) (relating to cessation in 
     eligible farming business), and
       ``(iii) subparagraph (B) or (C) of subsection (f )(3) 
     (relating to prohibited transactions and pledging account as 
     security).
       ``(2) Exceptions.--Paragraph (1)(A) shall not apply to--
       ``(A) any distribution to the extent attributable to income 
     of the Account, and
       ``(B) the distribution of any contribution paid during a 
     taxable year to a FFARRM Account to the extent that such 
     contribution exceeds the limitation applicable under 
     subsection (b) if requirements similar to the requirements of 
     section 408(d)(4) are met.

     For purposes of subparagraph (A), distributions shall be 
     treated as first attributable to income and then to other 
     amounts.
       ``(f ) Special Rules.--
       ``(1) Tax on deposits in account which are not distributed 
     within 5 years.--
       ``(A) In general.--If, at the close of any taxable year, 
     there is a nonqualified balance in any FFARRM Account--
       ``(i) there shall be deemed distributed from such Account 
     during such taxable year an amount equal to such balance, and
       ``(ii) the taxpayer's tax imposed by this chapter for such 
     taxable year shall be increased by 10 percent of such deemed 
     distribution.

     The preceding sentence shall not apply if an amount equal to 
     such nonqualified balance is distributed from such Account to 
     the taxpayer before the due date (including extensions) for 
     filing the return of tax imposed by this chapter for such 
     year (or, if earlier, the date the taxpayer files such return 
     for such year).
       ``(B) Nonqualified balance.--For purposes of subparagraph 
     (A), the term `nonqualified balance' means any balance in the 
     Account on the last day of the taxable year which is 
     attributable to amounts deposited in such Account before the 
     4th preceding taxable year.
       ``(C) Ordering rule.--For purposes of this paragraph, 
     distributions from a FFARRM Account (other than distributions 
     of current income) shall be treated as made from deposits in 
     the order in which such deposits were made, beginning with 
     the earliest deposits.
       ``(2) Cessation in eligible business.--At the close of the 
     first disqualification period after a period for which the 
     taxpayer was engaged in an eligible farming business or 
     commercial fishing, there shall be deemed distributed from 
     the FFARRM Account of the taxpayer an amount equal to the 
     balance in such Account (if any) at the close of such 
     disqualification period. For purposes of the preceding 
     sentence, the term `disqualification period' means any period 
     of 2 consecutive taxable years for which the taxpayer is not 
     engaged in an eligible farming business or commercial 
     fishing.
       ``(3) Certain rules to apply.--Rules similar to the 
     following rules shall apply for purposes of this section:
       ``(A) Section 220(f )(8) (relating to treatment on death).
       ``(B) Section 408(e)(2) (relating to loss of exemption of 
     account where individual engages in prohibited transaction).
       ``(C) Section 408(e)(4) (relating to effect of pledging 
     account as security).
       ``(D) Section 408(g) (relating to community property laws).
       ``(E) Section 408(h) (relating to custodial accounts).
       ``(4) Time when payments deemed made.--For purposes of this 
     section, a taxpayer shall be deemed to have made a payment to 
     a FFARRM Account on the last day of a taxable year if such 
     payment is made on account of such taxable year and is made 
     on or before the due date (without regard to extensions) for 
     filing the return of tax for such taxable year.
       ``(5) Individual.--For purposes of this section, the term 
     `individual' shall not include an estate or trust.
       ``(6) Deduction not allowed for self-employment tax.--The 
     deduction allowable by reason of subsection (a) shall not be 
     taken into account in determining an individual's net 
     earnings from self-employment (within the meaning of section 
     1402(a)) for purposes of chapter 2.
       ``(g) Reports.--The trustee of a FFARRM Account shall make 
     such reports regarding such Account to the Secretary and to 
     the person for whose benefit the Account is maintained with 
     respect to contributions, distributions, and such other 
     matters as the Secretary may require under regulations. The 
     reports required by this subsection shall be filed at such 
     time and in such manner and furnished to such persons at such 
     time and in such manner as may be required by such 
     regulations.''
       (b) Tax on Excess Contributions.--
       (1) Subsection (a) of section 4973 (relating to tax on 
     excess contributions to certain tax-favored accounts and 
     annuities) is amended by striking ``or'' at the end of 
     paragraph (3), by redesignating paragraph (4) as paragraph 
     (5), and by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) a FFARRM Account (within the meaning of section 
     468C(d)), or''.
       (2) Section 4973 is amended by adding at the end the 
     following new subsection:
       ``(g) Excess Contributions to FFARRM Accounts.--For 
     purposes of this section, in the case of a FFARRM Account 
     (within the meaning of section 468C(d)), the term `excess 
     contributions' means the amount by which the amount 
     contributed for the taxable year to the Account exceeds the 
     amount which may be contributed to the Account under section 
     468C(b) for such taxable year. For purposes of this 
     subsection, any contribution which is distributed out of the 
     FFARRM Account in a distribution to which section 
     468C(e)(2)(B) applies shall be treated as an amount not 
     contributed.''
       (3) The section heading for section 4973 is amended to read 
     as follows:

[[Page 1781]]



     ``SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, 
                   ANNUITIES, ETC.''

       (4) The table of sections for chapter 43 is amended by 
     striking the item relating to section 4973 and inserting the 
     following new item:

``Sec. 4973. Excess contributions to certain accounts, annuities, 
              etc.''

       (c) Tax on Prohibited Transactions.--
       (1) Subsection (c) of section 4975 (relating to tax on 
     prohibited transactions) is amended by adding at the end the 
     following new paragraph:
       ``(6) Special rule for ffarrm accounts.--A person for whose 
     benefit a FFARRM Account (within the meaning of section 
     468C(d)) is established shall be exempt from the tax imposed 
     by this section with respect to any transaction concerning 
     such account (which would otherwise be taxable under this 
     section) if, with respect to such transaction, the account 
     ceases to be a FFARRM Account by reason of the application of 
     section 468C(f )(3)(A) to such account.''
       (2) Paragraph (1) of section 4975(e) is amended by 
     redesignating subparagraphs (E) and (F) as subparagraphs (F) 
     and (G), respectively, and by inserting after subparagraph 
     (D) the following new subparagraph:
       ``(E) a FFARRM Account described in section 468C(d),''.
       (d) Failure To Provide Reports on FFARRM Accounts.--
     Paragraph (2) of section 6693(a) (relating to failure to 
     provide reports on certain tax-favored accounts or annuities) 
     is amended by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively, and by inserting 
     after subparagraph (B) the following new subparagraph:
       ``(C) section 468C(g) (relating to FFARRM Accounts),''.
       (e) Clerical Amendment.--The table of sections for subpart 
     C of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 468B the 
     following new item:

``Sec. 468C. Farm, Fishing and Ranch Risk Management Accounts.''

       (f ) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                  ____


                                 S. 314

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

     SECTION 1. DECLARATORY JUDGMENT RELIEF FOR SECTION 521 
                   COOPERATIVES.

       (a) In General.--Section 7428(a)(1) of the Internal Revenue 
     Code of 1986 (relating to declaratory judgments of tax exempt 
     organizations) is amended by striking ``or'' at the end of 
     subparagraph (B) and by adding at the end the following new 
     subparagraph:
       ``(D) with respect to the initial qualification or 
     continuing qualification of a cooperative as described in 
     section 521(b) which is exempt from tax under section 521(a), 
     or''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to pleadings filed after the date of 
     the enactment of this Act but only with respect to 
     determinations (or requests for determinations) made after 
     January 1, 2001.

  Mr. BURNS. Mr. President, I rise today to join Senator Grassley and 
others to introduce the TERFF Act, Tax Empowerment and Relief for 
Farmers and Fisherman.
  This bill includes several provisions providing tax relief that will 
help our nation's farmers.
  First, this bill will create FFARRM, Farm, Fish and Ranch Risk 
Management, Accounts that will provide farmers, ranchers and fishermen 
with additional money management tools. Agricultural producers will be 
allowed to contribute up to 20 percent of their annual income into 
these accounts. The tax on this income will be deferred for up to five 
years or until the depositor withdraws the money.
  The bill will amend the tax code to ensure that farm cash rents are 
not subject to an additional 15 percent self-employment tax. 
Additionally, the bill will ensure CRP, Conservation Reserve Program, 
payments are not subject to the same self-employment tax. I have also 
co-sponsored a similar CRP bill with Senator Brownback from Kansas.
  The bill will also enable States to expand opportunities for 
beginning farmers who are in need of low interest loans for capital 
purchases of farmland and equipment.
  The bill provides that interest, rent and royalty payment made by a 
subsidiary to a non-profit are not subject to a unrelated business 
income taxes. The bill provides a tax deduction to farmers and ranchers 
who donate food to hunger relief organizations.
  The bill will correct a problem experienced by farmers who use income 
averaging by ensuring that farmers are not disqualified from using 
income averaging due to the alternative minimum tax, AMT, calculation.
  The bill would reapply taxes on cooperatives using animal value-added 
practices in the same way as cooperatives using manufactured value-
added practices. Furthermore, it would allow cooperative producers of 
ethanol to receive the same tax benefits as large corporations. The 
bill will also allow farmer cooperatives to use preferred stock to 
raise equity capital.
  This bill will help our nation's farmers and ranchers. The 
agriculture sector of our nation's economy needs the relief.
  Mr. ENZI. Mr. President, I rise to introduce legislation to address a 
concern of farmers in my State of Wyoming and throughout the United 
States. This legislation, which I am introducing with the distinguished 
chairman of the Finance Committee, Senator Grassley, as well as the 
senior Senator from North Dakota, Mr. Conrad, is designed to clarify a 
provision in the Internal Revenue Code and its accompanying regulations 
which has been broadly interpreted to impose self-employment (SE) taxes 
on rental income from real estate even though such income was generally 
designed to be exempt from SE taxes.
  Under Section 1402(a)(1) of the Internal Revenue Code, rental income 
from real estate was only intended to be subject to the SE taxes when, 
one, the income is from an arrangement between an owner and lessee 
that, two, requires the lessee to produce agricultural or horticultural 
commodities on the land; and, three, there shall be material 
participation by the owner or tenant with respect to any such 
agricultural or horticultural commodities. The problem all goes back to 
ambiguity of the term ``arrangement'' in this section. This section has 
been interpreted to by the IRS to apply not only to the specific lease 
agreement itself, but also to other extraneous production or management 
arrangements between the owner and his lessee. Accordingly, the IRS has 
hit many small self-employed farmers with a tax penalty that they never 
expected and which was never envisioned when Congress wrote the section 
of the Internal Revenue Code in question.
  The legislation I am introducing today clarifies this section by 
replacing the term ``arrangement'' with ``agreement,'' indicating that 
the lease agreement itself must specify the requisite responsibilities 
of the owner in order to be subject to the SE tax. As in so much of 
what we do here, a small change in words can have a dramatic impact on 
people's lives. By clarifying what I believe was intended by Congress 
all along, we will save numerous farmers the heartache and expense of 
litigating with the IRS over whether rental income from their real 
estate is subject to SE tax. This small change in the tax code will 
provide considerable tax relief to farmers in my home State of Wyoming 
and throughout the United States. I thank Chairman Grassley for his 
support of this important legislation and I urge my colleagues to enact 
this important relief for America's family farmers.
                                 ______
                                 
      By Mr. BROWNBACK (for himself, Mr. Dorgan, Mr. Daschle, Mr. 
        Lugar, Mr. Levin, Mr. Roberts, Mr. Burns, Mr. Jeffords, Mr. 
        Baucus, Mr. DeWine, Mr. Harkin, Mr. Craig, Mr. Johnson, Mr. 
        Leahy, Mr. Bingaman,  and Mr. Bond):
  S. 315. A bill to amend the Internal Revenue Code of 1986 to treat 
payments under the Conservation Reserve program as rentals from real 
estate; to the Committee on Finance.
  Mr. BROWNBACK. Mr. President, I am speaking on a bill that I put in 
today, along with several cosponsors, regarding the Conservation 
Reserve Program Tax Fairness Act.
  To be a farmer today, you really need to be an optimist--about the 
weather, about farm prices, about our rapidly changing economy. But one 
thing farmers should not have to worry about is being additionally 
taxed for participating in a conservation program.
  I rise today to introduce the Conservation Reserve Program Tax 
Fairness Act of 2001. This bill would simply correct the tax treatment 
of one of our

[[Page 1782]]

nation's most valuable conservation programs so that there is not a 
disincentive for farmers to be good stewards of the land.
  I am joined in this effort by Senator Dorgan who has taken an active 
role on this issue last year and serves as the lead cosponsor of the 
bill this year. This bill is also co-sponsored by Senators Daschle, 
Lugar, Levin, Roberts, Burns, Jeffords, Baucus, DeWine, Harkin, Craig, 
Johnson, and Leahy.
  As you can see, Mr. President, this bill has the bipartisan support 
of many in the Senate because it is just common sense. In a time when 
the farm economy continues to suffer and conservation efforts are more 
important than ever, we should be doing everything we can to make 
conservation efforts more appealing, not less. And if there is one 
truth that is pretty evident here, it is that if you want less of 
something, than tax it. Well, Mr. President, I think we can all agree 
that we want more conservation, not less, and therefore, we need to 
correct this tax interpretation.
  The Conservation Reserve Program, or CRP, has been a great success 
for this Nation. The program provides financial incentives for 
improving and preserving environmentally sensitive land, taking it out 
of production and enhancing its environmental benefit. The CRP program 
increases water quality, wildlife habitat and prevents soil erosion--
all factors which have become even more important in light of recent 
concerns about nonpoint source pollution in our nation's waterways.
  Specifically, this measure clarifies once and for all that CRP 
conservation payments from the Government are not subject to self-
employment social security taxes--a rate of up to 15 percent of the 
payment amount. Currently, there is confusion over how CRP payments 
should be taxed owing to a recent court case in the 6th Circuit Court 
of Appeals. This case overturned a 1998 Tax Court ruling that CRP 
payments are not subject to Social Security taxes because they are a 
rental payment the Government makes in exchange for farmers taking 
environmentally sensitive land out of production. Since other rental 
payments are exempt from this additional tax, CRP payments were 
considered exempt as well.
  As a result of this confusion, there is now a discrepancy between 
active farmers who take part in CRP, which are now subject to the tax 
because it is considered income, and landowners who do not farm but 
take part in CRP and are exempt from the tax. Clearly, this is not what 
Congress intended when it set up this program.
  Furthermore, the new court ruling has inspired the IRS to 
aggressively seek back taxes on CRP payments, as far back as the 1996 
tax year. That could amount to tens of thousands of dollars for farmers 
who are already struggling through economic hard times.
  In my State of Kansas alone, $102.7 million in CRP payments were 
issued in 1999. Are we really going to tell farmers that this money--
promised them for conservation purposes--will now be additionally taxed 
all the way back to 1996? This would amount to a disincentive for 
farmers to participate in environmental and conservation programs 
because they cannot trust that there won't be some hidden penalty down 
the road. Is that the message this body really wants to send?
  This tax makes no sense. Since CRP land is not used for agricultural 
production, it should not be considered farm income--but rather rental/
real estate income as the Tax Court originally ruled. CRP payments are 
different from traditional setaside programs because the program 
requires strict adherence to environmental standards. The farmer is 
contracting with the Government for an environmental benefit. Why on 
Earth would we choose to tax him for it?
  We must also consider the state of the farm economy today. 
Agriculture is one of the few industries in this country which has not 
been blessed with a prolonged booming economy. This is the worst 
possible time to burden farmers with additional taxes.
  This bill received enthusiastic support in the last Congress. In 
fact, this measure was approved unanimously in the Senate last year as 
part of a larger tax bill, but, unfortunately, was not able to make its 
way into law. In addition to strong Senate support, this bill has the 
backing of numerous farm groups including: the National Corn Growers, 
National Wheat Growers, American Soybean and Cattlemen's Beef 
Associations--along with the National Farmer's Union and the American 
Farm Bureau.
  My colleagues, one of the privileges we have as Members of the Senate 
is to be able to correct legislative wrongs that hurt our constituents. 
This may be a minor thing in the larger scheme of the tax debate, but 
it is of vital importance to our Nation's farmers. I urge you all to 
join me in this effort.
  If I may summarize, this Conservation Reserve Program Tax Fairness 
Act of 2001 is to remove taxation on CRP and put it back to where it 
was when the program was first put forward. That program pays farmers 
to idle land to be able to build it up, conserve it, to be able to 
build wildlife up on these tracts of land. It has been very successful.
  What has taken place or occurred is that the IRS has taken farmers to 
court and said they should be taxed for self-employment income for CRP 
payments, which was never the intent of Congress when it passed that. 
That was not to take place. Yet the lower court in that one circuit 
ruled that that is, indeed, correct and that they should be taxed a 
self-employment tax on that income.
  Today Senators Dorgan, Roberts, and myself held a press conference 
introducing this bill to clarify this issue and to remove the self-
employment tax on CRP payments. I think this is a key provision. I hope 
we are able to move forward on it.
  Senator Grassley, chairman of the Finance Committee, is supporting us 
in this effort, and he put it in an overall farm tax relief package. At 
this time, when we have so much difficulty in the farming economy, it 
is important to clarify that we are not going to tax people in a 
situation that they should not be taxed in and where it was never 
intended for them to be taxed.
  This bill previously passed the Senate last year. It has strong 
bipartisan support. The list of original cosponsors is as follows: 
Senators Daschle, Lugar, Levin, Roberts, Burns, Jeffords, Baucus, 
DeWine, Harkin, Craig, Johnson, Leahy, and Bingaman. I hope more will 
join us as well. I hope this not only clears the Senate this year, but 
gets through to the President.
  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. 315

       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 ``Conservation Reserve Program 
     Tax Fairness Act of 2001''.

     SEC. 2. TREATMENT OF CONSERVATION RESERVE PROGRAM PAYMENTS AS 
                   RENTALS FROM REAL ESTATE.

       (a) In General.--Section 1402(a)(1) of the Internal Revenue 
     Code of 1986 (defining net earnings from self-employment) is 
     amended by inserting ``and including payments under section 
     1233(2) of the Food Security Act of 1985 (16 U.S.C. 
     3833(2))'' after ``crop shares''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made before, on, or after the date of 
     the enactment of this Act.

  Mr. DORGAN. Mr. President, I am pleased to join Senator Brownback and 
a number of our colleagues today in introducing the Conservation 
Reserve Program Tax Fairness Act of 2001. This much-needed legislation 
would clarify that Conservation Reserve Program payments received by 
farmers are treated for tax purposes as rental payments from real 
estate not subject to self-employment taxes.
  For over a decade, many farmers have agreed to take out of farm 
production environmentally-sensitive lands and place them in the 
Conservation Reserve Program (CRP) for an extended period. In return, 
these farmers

[[Page 1783]]

receive an annual rental payment from the Commodity Credit Corporation 
of the U.S. Department of Agriculture.
  Over the past several years, the IRS has waged an aggressive campaign 
to try to re-characterize CRP rental payments as net earnings from 
self-employment and subject to self-employment taxes. I believe that 
the IRS's position here is dead-wrong.
  North Dakota has about 3.3 million acres with $109 million in rental 
payments in the CRP program. The IRS's position means that farmers in 
North Dakota could be mailed a tax bill from the IRS for more than $16 
million in added federal taxes this year alone. A typical North Dakota 
farmer with 160 acres in CRP would have a CRP payment of $5,280 and 
would owe nearly $800 in self-employment taxes because of the IRS's 
ill-advised position. To make matters worse, if the IRS pursues back 
taxes on returns filed by farmers in past years, the amount of taxes 
owed by individual farmers could amount to thousands of dollars.
  I believe that it is absolutely ludicrous for the IRS to load up 
farmers with an added tax burden at the very time that our nation's 
family farmers are struggling with high fuel costs and record high 
fertilizer prices while commodity prices are at record low levels. 
Given these circumstances, where are the nation's family farmers 
supposed to come up with the $231 million in additional taxes the IRS's 
interpretation of CRP rental payments imposes on them?
  In our judgment, the Congress never intended this tax result. In 
fact, the U.S. Tax Court understood this very point, when it ruled in 
1998 that the IRS's interpretation of CRP payments was improper and 
that CRP payments are properly treated by farmers as rental payments 
and, thus, not subject to self-employment taxes. Regrettably, the U.S. 
Tax Court's ruling was later reversed by a federal appellate court as 
the IRS continues to litigate the matter.
  We think that most of our colleagues understand that the current IRS 
position is not what Congress intended, nor is it supportable in law in 
our judgment. That's probably why, for example, the Senate unanimously 
agreed to an amendment I offered to the marriage penalty reduction bill 
last summer that included language to clarify the proper tax treatment 
of CRP payments as rentals not subject to self-employment taxes. 
However, my amendment with its CRP language and other amendments were 
stripped from the final version of that bill and this critical CRP 
change was not included in any other tax bills signed into law by the 
President in the last Congress.
  With the legislation we introduce today, Congress can tell the IRS 
that its mistaken effort to treat CRP payments as net earnings from 
self-employment will not be allowed to stand. I, along with the other 
cosponsors, urge you to support this change by cosponsoring our bill 
and working with us to get it added to any major tax legislation passed 
by Congress this year.
  Mr. BURNS. Mr. President, I rise today to join Senator Brownback and 
others to introduce the CRP, Conservation Reserve Program Tax Fairness 
Act. This bill will clarify Congressional intent that the CRP was not 
intended to be subject to self employment social security taxes.
  In a 1999 decision, the 6th Circuit Court of Appeals concluded that 
CRP payments could no longer be treated as real estate rental income a 
status that would make those payments exempt from social security 
taxes.
  The CRP provides financial incentives for improving and preserving 
environmentally sensitive land--taking it out of production and 
enhancing its environmental benefit. The CRP program increases water 
quality, wildlife habitat and prevents soil erosion--all factors which 
have become even more important in light of recent concerns about 
nonpoint source pollution in our nation's waterways.
  This case overturned a 1998 Tax Court ruling that CRP payments are 
not subject to social security taxes because they are a rental payment 
the government makes in exchange for farmers taking environmentally 
sensitive land out of production. Since other rental payments are 
exempt from this additional tax, CRP payments were considered exempt as 
well.
  As a result of this confusion, there is now a discrepancy between 
active farmers who take part in CRP--which are now subject to the tax 
because it is considered income--and landowners who do not farm but 
take part in CRP and are exempt from the tax. Clearly, this is not what 
Congress intended when it set up this program.
  This bill will allow farmers and ranchers the ability to rest assured 
once and for all that conservation payments made by the government will 
not be subject to the high tax rate imposed by social security self-
employment--a rate of 15 percent of the payment--in future years. As a 
result, working farmers will enjoy the same status as non-farm 
landowners in this program which encourages conservation of land, water 
and wildlife.
                                 ______
                                 
      By Mr. McCONNELL (for himself, Mr. Gregg, Mr. Frist, Mr. Miller, 
        Mr. Lott, Mr. DeWine, Mr. Enzi, Mr. Hutchinson, Mr. Sessions, 
        and Mr. Carper):
  S. 316. A bill to provide for teacher liability protection; to the 
Committee on the Judiciary.
  Mr. McCONNELL. Mr. President, today I rise to introduce, with my 
colleagues Senators Gregg, Frist, Miller, Lott, DeWine, Enzi, 
Hutchinson, Sessions, and Carper, The Paul D. Coverdell Teacher 
Liability Protection Act. This important legislation extends 
protections from frivolous lawsuits to teachers, principals, 
administrators, and other education professionals who are acting within 
the scope of their professional responsibilities.
  The Teacher Liability Protection Act builds upon the good work 
Congress began in 1997 when it enacted the Volunteer Protection Act. As 
you may recall, the Volunteer Protection Act provides liability 
protections to individuals serving their communities as volunteers. 
After bringing several volunteer protection amendments to the floor 
throughout the 1990's and introducing the Volunteer Protection Act 
during the 104th Congress, I was honored to work with our colleague, 
Senator Paul Coverdell, to steer this measure through the 105th 
Congress and have it enacted in 1997.
  Now, we need to extend similar liability protections to our nation's 
teachers, principals, and education professionals who are responsible 
for the safety of our children when they are at school.
  Everyone agrees that providing a safe, orderly environment is a 
critical component of ensuring that every child is able to reach their 
full academic potential. Teachers who are unable to maintain order in 
the classroom cannot reasonably be expected to share their knowledge 
with their pupils, whether it be in math, science, or literature. 
Disruptive, rowdy, and sometimes violent students not only threaten the 
immediate safety of their classmates, they threaten the very future of 
our children by denying them the opportunity to learn.
  Unfortunately, teachers, principals, and other education officials 
share an impediment in their efforts to ensure that students can learn 
in a safe, orderly learning environment: the fear of lawsuits. All too 
often, these hard-working professionals find their reasonable actions 
to instill discipline and maintain order are questioned and second 
guessed by opportunistic trial lawyers.
  Today's teachers will tell you that the threat of litigation is in 
the back of their minds and forces them at times to act in a manner 
which might not be in the best interests of their students. A 1999 
survey of secondary school principals found that 25 percent of the 
respondents were involved in lawsuits or out-of-court settlements in 
the previous two years--an amazing 270 percent increase from only ten 
years earlier. The same survey found that 20 percent of principals 
spent 5-10 hours a week in meetings or documenting events in an effort 
to avoid litigation. This is time that our educators should spend 
counseling students, developing curriculum, and maintaining order--not 
fending off frivolous lawsuits.

[[Page 1784]]

  The legislation is structured similarly to the Volunteer Protection 
Act of 1997 and is nearly identical to teacher protection legislation 
introduced by Paul Coverdell (S. 1721) in the 106th Congress. Simply 
put, the bill extends a national standard to protect from liability 
those teachers, principals, and education professionals who act in a 
reasonable manner to maintain order in the classroom. It does not 
preempt those States that have already taken action to address this 
problem and it allows any state legislature that disagrees with these 
strong protections to opt out at any time. Since this bill builds on 
Sen. Coverdell's fine work, my colleagues and I thought it would be 
highly appropriate that it bear his name.
  At the same time, it is important to note that this legislation is 
not a ``carte blanche'' for that minuscule minority of school officials 
who abuse their authority. The bill does not protect those teachers who 
engage in ``willful misconduct, gross negligence, reckless misconduct, 
or a conscious flagrant indifference to the rights or safety'' of a 
student. Nor does the bill preclude schools or local law enforcement 
entities from taking criminal, civil, or administrative actions against 
a teacher who acts improperly. Rather, the bill is simply designed to 
protect those teachers, principals, and educational professionals who 
act responsibly from frivolous lawsuits.
  From a historical context, this is not new ground for our colleagues 
in the Senate. During the 106th Congress, Senator Coverdell sucessfully 
included his legislation in the Senate's verison of the ESEA 
Reauthorization bill. Unfortunately, as we all know, efforts to 
reauthorize the ESEA stalled on the Senate floor. It is now appropriate 
for the Senate to revisit this issue, and I hope give its full 
endorsement.
  I look forward to working with my fellow original co-sponsors and the 
rest of the Senate to see that these important protections are enacted 
into law on behalf of America's hard working and dedicated teachers.
  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. 316

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

     SECTION 1. TEACHER LIABILITY PROTECTION.

       The Elementary and Secondary Education Act of 1965 (20 
     U.S.C 6301 et seq.) is amended by adding at the end the 
     following:

                ``TITLE XV--TEACHER LIABILITY PROTECTION

     ``SEC. 15001. SHORT TITLE.

       ``This title may be cited as the `Paul D. Coverdell Teacher 
     Liability Protection Act of 2001'.

     ``SEC. 15002. FINDINGS AND PURPOSE.

       ``(a) Findings.--Congress makes the following findings:
       ``(1) The ability of teachers, principals and other school 
     professionals to teach, inspire and shape the intellect of 
     our Nation's elementary and secondary school students is 
     deterred and hindered by frivolous lawsuits and litigation.
       ``(2) Each year more and more teachers, principals and 
     other school professionals face lawsuits for actions 
     undertaken as part of their duties to provide millions of 
     school children quality educational opportunities.
       ``(3) Too many teachers, principals and other school 
     professionals face increasingly severe and random acts of 
     violence in the classroom and in schools.
       ``(4) Providing teachers, principals and other school 
     professionals a safe and secure environment is an important 
     part of the effort to improve and expand educational 
     opportunities.
       ``(5) Clarifying and limiting the liability of teachers, 
     principals and other school professionals who undertake 
     reasonable actions to maintain order, discipline and an 
     appropriate educational environment is an appropriate subject 
     of Federal legislation because--
       ``(A) the scope of the problems created by the legitimate 
     fears of teachers, principals and other school professionals 
     about frivolous, arbitrary or capricious lawsuits against 
     teachers is of national importance; and
       ``(B) millions of children and their families across the 
     Nation depend on teachers, principals and other school 
     professionals for the intellectual development of children.
       ``(b) Purpose.--The purpose of this title is to provide 
     teachers, principals and other school professionals the tools 
     they need to undertake reasonable actions to maintain order, 
     discipline and an appropriate educational environment.

     ``SEC. 15003. PREEMPTION AND ELECTION OF STATE 
                   NONAPPLICABILITY.

       ``(a) Preemption.--This title preempts the laws of any 
     State to the extent that such laws are inconsistent with this 
     title, except that this title shall not preempt any State law 
     that provides additional protection from liability relating 
     to teachers.
       ``(b) Election of State Regarding Nonapplicability.--This 
     title shall not apply to any civil action in a State court 
     against a teacher with respect to claims arising within that 
     State if such State enacts a statute in accordance with State 
     requirements for enacting legislation--
       ``(1) citing the authority of this subsection;
       ``(2) declaring the election of such State that this title 
     shall not apply, as of a date certain, to such civil action 
     in the State; and
       ``(3) containing no other provisions.

     ``SEC. 15004. LIMITATION ON LIABILITY FOR TEACHERS.

       ``(a) Liability Protection for Teachers.--Except as 
     provided in subsections (b) and (c), no teacher in a school 
     shall be liable for harm caused by an act or omission of the 
     teacher on behalf of the school if--
       ``(1) the teacher was acting within the scope of the 
     teacher's employment or responsibilities related to providing 
     educational services;
       ``(2) the actions of the teacher were carried out in 
     conformity with local, State, and Federal laws, rules and 
     regulations in furtherance of efforts to control, discipline, 
     expel, or suspend a student or maintain order or control in 
     the classroom or school;
       ``(3) if appropriate or required, the teacher was properly 
     licensed, certified, or authorized by the appropriate 
     authorities for the activities or practice in the State in 
     which the harm occurred, where the activities were or 
     practice was undertaken within the scope of the teacher's 
     responsibilities;
       ``(4) the harm was not caused by willful or criminal 
     misconduct, gross negligence, reckless misconduct, or a 
     conscious, flagrant indifference to the rights or safety of 
     the individual harmed by the teacher; and
       ``(5) the harm was not caused by the teacher operating a 
     motor vehicle, vessel, aircraft, or other vehicle for which 
     the State requires the operator or the owner of the vehicle, 
     craft, or vessel to--
       ``(A) possess an operator's license; or
       ``(B) maintain insurance.
       ``(b) Concerning Responsibility of Teachers to Schools and 
     Governmental Entities.--Nothing in this section shall be 
     construed to affect any civil action brought by any school or 
     any governmental entity against any teacher of such school.
       ``(c) Exceptions to Teacher Liability Protection.--If the 
     laws of a State limit teacher liability subject to one or 
     more of the following conditions, such conditions shall not 
     be construed as inconsistent with this section:
       ``(1) A State law that requires a school or governmental 
     entity to adhere to risk management procedures, including 
     mandatory training of teachers.
       ``(2) A State law that makes the school or governmental 
     entity liable for the acts or omissions of its teachers to 
     the same extent as an employer is liable for the acts or 
     omissions of its employees.
       ``(3) A State law that makes a limitation of liability 
     inapplicable if the civil action was brought by an officer of 
     a State or local government pursuant to State or local law.
       ``(d) Limitation on Punitive Damages Based on the Actions 
     of Teachers.--
       ``(1) General rule.--Punitive damages may not be awarded 
     against a teacher in an action brought for harm based on the 
     action or omission of a teacher acting within the scope of 
     the teacher's responsibilities to a school or governmental 
     entity unless the claimant establishes by clear and 
     convincing evidence that the harm was proximately caused by 
     an action or omission of such teacher which constitutes 
     willful or criminal misconduct, or a conscious, flagrant 
     indifference to the rights or safety of the individual 
     harmed.
       ``(2) Construction.--Paragraph (1) does not create a cause 
     of action for punitive damages and does not preempt or 
     supersede any Federal or State law to the extent that such 
     law would further limit the award of punitive damages.
       ``(e) Exceptions to Limitations on Liability.--
       ``(1) In general.--The limitations on the liability of a 
     teacher under this title shall not apply to any misconduct 
     that--
       ``(A) constitutes a crime of violence (as that term is 
     defined in section 16 of title 18, United States Code) or act 
     of international terrorism (as that term is defined in 
     section 2331 of title 18, United States Code) for which the 
     defendant has been convicted in any court;
       ``(B) involves a sexual offense, as defined by applicable 
     State law, for which the defendant has been convicted in any 
     court;
       ``(C) involves misconduct for which the defendant has been 
     found to have violated a Federal or State civil rights law; 
     or
       ``(D) where the defendant was under the influence (as 
     determined pursuant to applicable State law) of intoxicating 
     alcohol or any drug at the time of the misconduct.

[[Page 1785]]

       ``(2) Rule of construction.--Nothing in this subsection 
     shall be construed to effect subsection (a)(3) or (d).

     ``SEC. 15005. LIABILITY FOR NONECONOMIC LOSS.

       ``(a) General Rule.--In any civil action against a teacher, 
     based on an action or omission of a teacher acting within the 
     scope of the teacher's responsibilities to a school or 
     governmental entity, the liability of the teacher for 
     noneconomic loss shall be determined in accordance with 
     subsection (b).
       ``(b) Amount of Liability.--
       ``(1) In general.--Each defendant who is a teacher, 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 that defendant is liable. The court shall render a 
     separate judgment against each defendant in an amount 
     determined pursuant to the preceding sentence.
       ``(2) Percentage of responsibility.--For purposes of 
     determining the amount of noneconomic loss allocated to a 
     defendant who is a teacher under this section, the trier of 
     fact shall determine the percentage of responsibility of each 
     person responsible for the claimant's harm, whether or not 
     such person is a party to the action.

     ``SEC. 15006. DEFINITIONS.

       For purposes of this title:
       ``(1) 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.
       ``(2) Harm.--The term `harm' includes physical, 
     nonphysical, economic, and noneconomic losses.
       ``(3) Noneconomic losses.--The term `noneconomic losses' 
     means losses for physical and 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), hedonic damages, injury to reputation and 
     all other nonpecuniary losses of any kind or nature.
       ``(4) School.--The term `school' means a public or private 
     kindergarten, a public or private elementary school or 
     secondary school (as defined in section 14101, or a home 
     school.
       ``(5) State.--The term `State' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, any other territory or possession 
     of the United States, or any political subdivision of any 
     such State, territory, or possession.
       ``(6) Teacher.--The term `teacher' means a teacher, 
     instructor, principal, administrator, or other educational 
     professional that works in a school.

     ``SEC. 15007. EFFECTIVE DATE.

       ``(a) In General.--This title shall take effect 90 days 
     after the date of the enactment of the Paul D. Coverdell 
     Teacher Liability Protection Act of 2001.
       ``(b) Application.--This title applies to any claim for 
     harm caused by an act or omission of a teacher if that claim 
     is filed on or after the effective date of the Paul D. 
     Coverdell Teacher Liability Protection Act of 2001, 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.''.

  Mr. MILLER. Mr. President, today I add my support to the Teacher 
Liability Protection Act, a bill first introduced by my predecessor 
Senator Paul Coverdell. Like him, and like my colleagues with whom I 
introduce this bill today, I firmly believe in the promise that the 
education of our children provides. An important part of fulfilling 
that promise is ensuring that our classrooms are a secure place in 
which to learn. And, as a result, teachers and principals are called 
upon every day to maintain order in our schools. In doing so, they 
should not be subject to frivolous lawsuits. Nor should the fear of 
such litigation prevent educators from acting reasonably and quickly in 
this regard.
  The bill we introduce today seeks to eliminate that fear and to 
reassure educators that they can and should perform this necessary part 
of their job without hesitation. The bill provides limited immunity for 
teachers, principals, and other education professionals for any 
reasonable actions they take in an effort to discipline students or 
maintain order in the classroom. In addition, it limits the 
availability of punitive damages and damages for non-economic loss in 
those suits that do proceed.
  I also think that it is important to discuss what this bill does not 
do. It does not prevent proper accountability for teachers and 
principals who act intentionally, or even recklessly. Nor does it 
protect them if they violate state or federal law. Finally, this bill 
recognizes the authority of states on this issue by allowing states the 
ability to opt out of its provisions and leaving untouched any state 
law that provides greater immunity from liability. In sum, this bill 
provides an important and necessary baseline of protection for teachers 
and principals who are on the front line of our national struggle to 
improve education, and to fulfill the promise of our children's future.
  I believe this Congress has a unique opportunity to improve education 
in our country. I hope that my colleagues will give this bill careful 
consideration, and support it as an important part of that effort.
  Mr. GREGG. Mr. President, I rise today to join my colleague, Mitch 
McConnell, in introducing the Paul Coverdell Teacher Liability 
Protection Act of 2001.
  Senator Coverdell, recognizing the value of those individuals who 
sacrifice their time, money and energy to serve others, was a true 
leader in protecting both volunteers and teachers. In 1997, he 
successfully ushered the Volunteer Protection Act through Congress. 
Today, as a result of Senator Coverdell's efforts, volunteers can 
generously give their time and services without the threat of frivolous 
lawsuits.
  Last year I joined Senator Coverdell in offering a teacher amendment 
during floor consideration of the Elementary and Secondary Education 
Act, ESEA. That amendment contained several provisions impacting 
teachers, but the bulk of the amendment was the Teacher Liability 
Protection Act. I am pleased to say that this amendment was passed by 
the Senate by a vote of 97 to 0, and a nearly identical measure was 
passed by the House by a vote of 358 to 67. The overwhelming support 
that this amendment received during the 106th Congress clearly 
illustrates the bipartisan nature of this initiative. Although Congress 
did not complete work on ESEA before the end of the session, I am very 
optimistic that the new President will sign into law an education 
reform bill this year and that bill will include the Paul Coverdell 
Teacher Liability Protection Act.
  Our nation's public schools have become more violent, and teachers do 
not feel safe in their own classrooms. Today, more than half our 
nation's school teachers have been verbally abused, 16 percent have 
been threatened with injury and 7 percent have been physically 
attacked. Parents and students alike report that the behavior of some 
students completely interferes with the learning of others. As our 
schools have increasingly felt the effects of violence, drug use and a 
breakdown of discipline, it is necessary for teachers to use reasonable 
means to maintain order, discipline and a positive educational 
environment. However, teachers continuously find themselves the targets 
of frivolous lawsuits when they are forced to restore order in the 
classroom. Our nation's educators need to feel free to appropriately 
and swiftly discipline disruptive, unruly and unmanageable students to 
ensure the safety and education of all the children under their 
supervision.
  Currently, unless a teacher is fortunate enough to work in a state 
that has liability laws that protect teachers, many teachers are 
hesitant to take action or intervene for fear of a lawsuit. This 
legislation would help to correct this sad situation.
  The Paul Coverdell Teacher Liability Protection Act was modeled after 
the Volunteer Protection Act of 1997 and several state liability laws. 
The purpose of this legislation is to protect teachers from frivolous 
law suits when attempting to remove a disruptive or belligerent student 
from a classroom.
  Specifically, it provides limited civil liability immunity for 
teachers and principals who engage in reasonable acts to maintain order 
and preserve a safe and educational environment in their classrooms and 
schools. The bill is narrowly crafted to focus on protecting reasonable 
acts that fall within

[[Page 1786]]

the scope of a teacher's responsibilities in providing education 
services. The bill does not protect teachers who engage in wanton and 
willful acts of misconduct, criminal acts or violations of state and 
federal civil rights laws. The Teacher Liability Protection Act simply 
protects teachers and other education professionals from liability for 
harm caused to an individual by reasonable acts carried out in 
accordance with local, state and federal laws, as well as rules and 
regulations for controlling, disciplining, expelling or suspending a 
student from a classroom or school. Additionally, this legislation 
stipulates that punitive damages may not be awarded against a teacher 
unless the claimant establishes by clear and convincing evidence that 
harm was caused by an action that constituted willful or criminal 
misconduct, or a conscious, flagrant indifference to the rights or 
safety of the individual harmed.
  Furthermore, it is important to note that this legislation does not, 
in any way, supercede any state law that provides teachers with greater 
immunity from liability. Moreover, states can opt out of the provisions 
of this bill by passing state legislation exempting them from the 
Teacher Liability Protection Act.
  I conclude by saying that we have a unique opportunity this year to 
improve our nation's public schools, and we should start with 
protecting its teachers. As you know, teachers are our most precious 
resource in the classroom, and to continue to place them at risk in 
their jobs, and not give them the protection they so desperately need 
is a shame. It is high time that we recognize teachers and principals 
for who they are; professionals that go to great lengths to help our 
children learn. Creating a safe-zone in which they are not subject to 
being dragged through the courts for ensuring the safety and education 
of the students in their classrooms should be a priority as we 
undertake education reform in the 107th Congress. That is why I stand 
here today to join Senator McConnell in empowering our nation's 
teachers to take back control of our classrooms and create an 
environment where they can teach and their students can learn.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Dodd, Mr. Kennedy, 
        Mr. Biden, Mr. Bingaman, Mrs. Clinton, Mr. Durbin, Mr. Inouye, 
        Mr. Kerry, Mr. Leahy, Ms. Mikulski, Mrs. Murray, Mr. 
        Rockefeller, Mr. Sarbanes, Mr. Schumer, and Mr. Corzine):
  S. 318. A bill to prohibit discrimination on the basis of genetic 
information with respect to health insurance; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. DASCHLE. Mr. President, yesterday we read the first news accounts 
of the first analysis ever of the human genetic code--what some have 
called ``the blueprint of human life'' itself. Today, Senators Kennedy, 
Harkin, Dodd, and I are introducing a bill to make sure this stunning 
new knowledge is used to help Americans, not hurt them. Our bill is 
called the ``Genetic Nondiscrimination in Health Insurance and 
Employment Act.'' It says simply that genetic information may not be 
used to discriminate against Americans in health insurance or 
employment. An identical measure will be introduced tomorrow in the 
House by more than 150 Republican and Democratic co-sponsors.
  The genetic revolution has the potential to dramatically improve 
health care. Genetic technology can greatly improve our ability to 
treat and even cure now-incurable illnesses. Genetic tests can tell 
whether a person is at risk of developing certain diseases years before 
symptoms appear, giving her either peace of mind--or critical time to 
reduce her risks. But the scientific and commercial value of the human 
genome project will be seriously undermined if people refuse to take 
genetic tests because they fear the results may be used against them.
  That is not just our opinion. That warning has been sounded 
repeatedly by the two men who understand genetic testing better than 
anyone in the world--the scientists in charge of the two teams that 
mapped the human genome. Dr. Craig Venter and Dr. Francis Collins. At a 
White House ceremony last June where Doctors Venter and Collins 
unveiled the sequencing of the human genome, they warned that our laws 
were not keeping pace with science and urged Congress to pass strong 
federal protections against genetic discrimination. As Dr. Collins put 
it: ``If we needed a wake-up call, isn't today the wake-up call?''
  The question now is: Are we going to heed that warning? Or, are we 
going to turn a deaf ear? This bill is the test. It has four major 
components. First, it forbids employers from using genetic information 
to decide who to hire or fire, and other terms and conditions of 
employment. Second, it forbids insurers from using genetic information 
to deny or restrict coverage, or raise premiums. Third, it prevents 
disclosure of identifiable genetic information to health insurers, 
health insurance data banks, employers--and anyone else who has no 
legitimate need for the information. Finally, if these basic rights are 
violated, our bill gives victims of genetic discrimination the right to 
hold the violator accountable in court.
  It's been nearly three years since we first introduced this bill. 
Back then, some people said there was no need for these protections 
because there was no proof that genetic discrimination ever actually 
occurs. We got another wake-up call last Friday, when the Equal 
Employment Opportunity Commission went to court to challenge genetic 
testing by an employer. The EEOC has asked the court to order the 
Burlington Northern Santa Fe Railroad to end its alleged policy of 
requiring employees who claim work-related injuries related to carpel 
tunnel syndrome to undergo genetic testing--or lose their jobs.
  The Burlington Northern case marks the first time the EEOC has ever 
brought a genetic discrimination in court. But it is not the first case 
of genetic discrimination we've heard about in this Senate. Last July, 
the Senate Health, Education, Labor, and Pensions Committee held a 
hearing specifically on genetic discrimination in employment and what, 
if anything, the Senate should do about it. I testified at that hearing 
about a social worker who made the mistake of telling her co-workers 
that she had been the primary care-giver for her mother, who had died 
of Huntington's disease. Despite her own good health and her long 
history of outstanding performance reviews, she was fired. Why? Because 
there is a chance she might one day develop the same disease that 
killed her mother.
  I also testified about a 40-year-old mother of two young children who 
agreed to participate in a genetic research study. She tested positive 
for BRAC1, the gene implicated in breast and ovarian cancer. After 
undergoing preventive surgery to remove her breast and ovaries to 
minimize the risk of cancer, she lost the insurance she received from 
her job. Then she lost her job. She, too, had a history of good work 
evaluations. Now she says she will never again participate in any 
health studies, and she will not allow her children to be tested.
  While genetic discrimination may be relatively rare now, experts say 
that's only because genetic tests are still relatively rare. As testing 
becomes more affordable, and more common, experts tell us, the 
incidence of discrimination is likely to increase dramatically.
  How many more times do we need to hear about lives that have been 
shattered by someone's misuse of genetic information before we say 
clearly: ``In America, you cannot discriminate against people because 
of their genetic makeup. Period.''
  This is a matter that effects every one of us. We all have flaws in 
our genes.
  With rare exceptions, genetic tests can't confirm if we will ever 
develop a particular disease. All they can tell us is that we might 
some day develop the disease. Or we might not. Is it fair for employers 
to use genetic information in deciding who to hire and who to fire?
  More than 10 years ago, we passed the Americans with Disabilities 
Act. We agreed then that, in this country, you

[[Page 1787]]

can't discriminate against someone because of a disability. Can we 
really believe now that employers and insurers ought to be allowed to 
discriminate against someone because he or she might someday develop a 
disability illness?
  Last week, three insurance companies in England admitted for the 
first time that they test for Huntington's disease, a progressive and 
incurable neurological disorder. One insurer also admitted it uses 
experimental tests for breast and ovarian cancer and Alzheimer's 
disease.
  Do we have to wait until insurers in this country start using genetic 
screening routinely before we set some reasonable legal guidelines for 
genetic tests? How many more wake-up calls do we need?
  Last summer, shortly after he and Francis and Collins unveiled the 
sequencing of the human genome, Craig Venter wrote me a letter. In it, 
he warned that genetic discrimination ``is not a theoretical concern. 
Today, people who know they may be at risk for a genetic disease are 
foregoing diagnostic tests for fear they will lose their job or their 
health insurance.'' As a result, he said, ``the incentives for new 
discoveries and treatments based on our newly acquired genomic 
information are diminished, and the promising new era in medicine is 
delayed.''
  There are some who say strong federal protections are not needed 
because a number of states have already passed bills to prevent genetic 
discrimination. They're right about one thing: many states have passed 
laws. I'm proud to report that South Dakota became the latest last 
Friday when it adopted legislation to curb the collection of a person's 
genetic information without informed consent. In all, 37 states have 
passed bills regarding genetic discrimination in health insurance, and 
22 states have laws regarding genetic discrimination in the workplace.
  Those laws represent progress. And they offer some protection. The 
problem with the current patchwork of state laws is that it contains 
major loopholes. For example: some states protect only DNA and RNA. 
Other states extend protection to family history data and other medical 
information that could offer some genetic clues. In addition, because 
of federal exemptions, state laws offer no protections to the one-in-
three Americans who get their health insurance through their employer.
  Others say this bill is not needed because the Americans with 
Disabilities Act already prohibits discrimination based on disability. 
The problem with that theory is: it's never been tested. The Burlington 
Northern case represents that first time a genetic discrimination suit 
has been brought specifically on the grounds that it violates the ADA. 
Maybe the court will decide that the ADA does cover genetic 
discrimination. Maybe it will decide that it doesn't. Either way, a 
definitive answer could take years. What is the harm of us acting now 
to say clearly that genetic discrimination will not be tolerated in 
America? What is the worst thing that could happen? That we end up with 
two laws, each protecting the same fundamental principle?
  Last year, then-President Clinton signed an executive order banning 
genetic discrimination in federal employment. Our bill seeks merely to 
extend the same protections to private workplaces and insurers. The 
principles in our bill are supported by both Dr. Craig Venter and Dr. 
Francis Collins. They are also supported by the federal Advisory 
Committee on Genetic Testing, the Equal Employment Opportunity 
Commission and the departments of Labor, Justice, and Health and Human 
Services. More important, they are supported by a strong majority of 
the American people.
  At the beginning of our nation's history, Thomas Jefferson wrote, 
``laws and discoveries must go hand in hand with the progress of the 
human mind. As . . . new discoveries are made . . . institutions must 
advance also to keep pace with the times.''
  Our new knowledge about the genetic blueprint has the potential to 
dramatically improve our health and the quality of our lives. However, 
if we don't respond to the wake-up call now, this new knowledge also 
has the potential to destroy lives. We simply cannot afford to take one 
step forward in science, while taking two steps backwards in civil 
rights!
  The legislation we offer today will enable us to move forward in a 
way that will benefit--and protect--all Americans. I thank my 
colleagues--Senators Kennedy, Dodd, and Harkin--for all their help in 
this endeavor. I also thank our colleagues in the House--particularly 
Congresswoman Louise Slaughter, for her tireless effort to move our 
companion bill to the floor in that chamber. And I urge my colleagues 
to join us in answering the wake-up call now so that we can make sure 
the genetic revolution--which has been largely financed with American 
tax dollars--helps people--instead of hurting them.
  Mr. HARKIN. Mr. President, I am pleased to introduce the ``Genetic 
Non-discrimination in Health Insurance and Employment Act'' with 
Senator Daschle, Senator Dodd, Senator Kennedy, and other colleagues. 
This bill would bring our nondiscrimination policies into the 21st 
century.
  Genetic discrimination is a terribly important issue and one that I 
have been following for quite some time now. My interest started in the 
late 1980s when I was first involved in the effort to fund the Human 
Genome Project at NIH. Looking back over the past ten years, this was 
one of the best investments our country has ever made. The advances in 
the study of the human gene are mind-boggling. Last year, the Human 
Genome Project and Celera Genomics announced that scientists had mapped 
the entire human genome. Just yesterday, these same scientists reported 
the probable number of human genes at 30,000 to 40,000 (only twice as 
many genes as your run-of-the-mill roundworm).
  The impact of these discoveries will go far beyond the laboratory. 
The mapping of the human genome will mean enormous gains in science and 
the provision of health care. The identification of a number of 
disease-related genes has already provided scientists with important 
new tools for understanding the underlying mechanisms for many 
illnesses. And genomic technologies have the potential to lead to 
better diagnosis and treatment, and, ultimately, the prevention and 
cure of many diseases and disabilities.
  However, without genetic discrimination protections, people will be 
deterred from using genetic technologies that detect and prevent the 
onset of life-threatening diseases.
  Discrimination in health insurance and employment, and the fear of 
potential discrimination, threaten our ability to conduct the very 
research we need to understand, treat, and prevent genetic disease. 
Moreover, discrimination--and the fear of discrimination--threaten our 
ability to use new genetic technologies to improve human health. As a 
result, our rapid, scientific progress could be rendered meaningless 
for the every day American.
  Let me give you just a few examples:
  In the early 1970's some insurance companies denied coverage and some 
employers denied jobs to African-Americans who were identified as 
carriers for sickle-cell anemia, even though they were healthy and 
would never develop the disease.
  More recently, in a survey of people in families with genetic 
disorders, 22 percent indicated that they, or a member of their family, 
had been refused health insurance on the basis of their genetic 
information.
  And a number of researchers have been unable to get individuals to 
participate in cancer genetics research. Fear of discrimination is 
cited as the reason why.
  But this is more than just about numbers and anonymous individuals, 
it's about real people--including my own family. As many of you know, 
both my sisters died from breast cancer. And other members of my family 
might be at risk. Should I counsel them to get tested for the BRCA1 and 
BRCA2 mutations? Should I counsel them to disclose our family history 
to their health care providers?



  Right now, I'm torn. I know that if my family is to have access to 
the best

[[Page 1788]]

available interventions and preventive care, they should get tested, 
and they should disclose our family's medical history to their 
physicians. But, conversely, if they are to get any health care at all, 
they must have access to health insurance. Without strong protections 
against discrimination, access to health insurance is currently in 
question.
  In 1995, I introduced an amendment during the mark-up of the Health 
Insurance Portability and Accountability Act. My amendment clarified 
that group health plans could not establish eligibility, continuation, 
enrollment, or contribution requirements based on genetic information. 
The amendment became part of the manager's package that went to the 
floor, and it ultimately became law.
  HIPAA is a good first step. We should be proud of that legislation. 
Yet if our goal is to ensure that individuals have access to health 
insurance coverage and to employment opportunities--regardless of their 
genetic makeup--we must ensure that they are protected against 
discrimination on the basis of their genetic makeup.
  Our proposed legislation offers such protections. Let me describe 
them in brief:
  First, this legislation prohibits insurers and employers from 
discriminating on the basis of protected genetic information. It is 
essential to prohibit discrimination both at work and in health 
insurance coverage. If we only prohibit discrimination in the insurance 
context, employers who are worried about future increased medical costs 
or increased sick time will simply not hire individuals who have a 
genetic predisposition to a particular disease.
  Second, under our proposal, health insurance companies are prohibited 
from disclosing genetic information to other insurance companies, 
industry-wide data banks, and employers. If we really want to prevent 
discrimination, we should not let genetic information get into the 
wrong hands in the first place.
  Finally, if protections against genetic discrimination are to have 
teeth, we must include strong penalties and remedies to deter employers 
and insurers from discriminating in the first place.
  This bill will ensure that every American will enjoy the latest 
advances in scientific research and health care delivery, without fear 
of retribution on the basis of their sensitive genetic information. All 
of us should be concerned about this issue, because all of us have 
genetic information that could be used against us. As we move into the 
new millennium, everyone should enjoy the benefits of 21st century 
technologies--and not be harmed by 21st century discrimination.
  I applaud the commitment of my fellow co-sponsors on this important 
issue and look forward to working with my colleagues on both sides of 
the aisle to pass federal legislation that will prohibit genetic 
discrimination in the workplace and in health insurance.
  Mr. DODD. Mr. President, over the past decade the science of 
identifying genetic markers for diseases has evolved at an astonishing 
pace. For an increasing number of Americans, science fiction has become 
reality--their doctors can now scan their unique genetic blueprints and 
predict the likelihood of their developing diseases like cancer, 
Alzheimer's or Parkinson's.
  Armed with this knowledge, individuals and families can make informed 
decisions about their health care including, in some cases, even taking 
steps to prevent the disease or to detect and treat it early. 
Unfortunately, however, phenomenal advances in our knowledge about 
genetics have outpaced the protections currently provided in law. Thus, 
the potential also exists for this information to be used by health 
insurers or employers to deny health coverage or job opportunities.
  And, in fact, recent events have catapulted the issue of genetic 
discrimination from a potential concern to a devastating reality. Just 
this week, the U.S. Equal Employment Opportunity Commission filed a 
lawsuit against an employer for requiring genetic testing of employees 
who file injury claims. Additionally, a recent survey of over 2,000 
companies conducted by the American Management Association showed that 
18.1 percent of companies require genetic or medical family history 
data from employees or job applicants. According to the same survey, 
26.1 percent of the companies that require genetic or family medical 
history tests use the results of those tests in hiring decisions.
  We know that Federal and State laws currently offer only a patchwork 
of protections against the misuse of genetic information. While the 
Health Insurance Portability and Accountability Act of 1996 took 
important first steps toward prohibiting genetic discrimination in 
health insurance, it left large gaps. For example, it does not prohibit 
insurers from requiring genetic testing or from disclosing genetic 
information and offers no protection at all for people who must buy 
their insurance in the individual market. And, while several States, 
including Connecticut, have enacted legislation prohibiting health 
insurance discrimination, these laws can not protect the 51 million 
individuals in employer-sponsored ``self-funded'' health plans. 
Additionally, few States have chosen to address the issues of 
employment discrimination or the separate issue of the privacy of 
genetic records.
  I know from personal experience that this issue is not a partisan 
one. Four years ago, I joined Senator Domenici in introducing one of 
the first bills on this critical topic, addressing both insurance and 
employment discrimination. And two years ago, along with many of my 
Democrat colleagues, I joined Senator Snowe in supporting strong 
legislation protecting patients from genetic discrimination in 
insurance.
  Today I am pleased to join my colleagues, Senator Daschle, Senator 
Harkin and Senator Kennedy in introducing comprehensive legislation to 
safeguard the privacy of genetic information and prohibit health 
insurance or employment discrimination based on genetic information. 
Specifically, this legislation would prohibit health insurers from 
discriminating based on genetic predisposition to an illness or 
condition and would prevent insurers from requiring applicants for 
health insurance to submit to genetic testing. This bill would also 
address concerns about employment discrimination by preventing 
employers from firing or refusing to hire individuals who may be 
susceptible to a genetic condition. Finally, this legislation holds 
employers and insurers accountable by imposing strong penalties those 
who violate these provisions.
  Three years ago, in a visit to Yale University's Genetic Testing 
Center I had the opportunity to glimpse cutting edge uses of that 
technology. I also had the opportunity, however, to hear the fears 
expressed by the patients at the center. On that visit I met with Keith 
Hall, who has been a patient at Yale for several years--since he was 
first diagnosed with Tuberous Sclerosis, a genetic disease that causes 
tumors of the brain, kidney and other organs, and sometimes mental 
retardation. Keith worries about what would happen to his insurance if 
he ever had to switch jobs.
  I also met with Ashley Przybylski, an 11-year-old girl from Oxford, 
CT. Ashley suffers from a genetic nutritional disorder that can cause 
seizures and brain damage. While currently the family's insurance 
covers the exorbitant cost of the medication that keeps her healthy--
$33,000 a year--Ashley faces the prospect of being denied coverage when 
she gets older.
  While we as a Nation welcome these scientific achievements, it is 
critical we ensure that they be applied for the purposes of preventing 
or treating disease, rather than for denying health insurance or 
employment to individuals. This issue is too important to ignore for 
yet another year. Each day that passes more individuals suffer 
discrimination. Each day that we fail to act, more families will be 
forced to make decisions about genetic testing based, not on their 
health care needs, but on fear.
  I pledge my commitment to ensuring that continued progress in science 
is

[[Page 1789]]

matched by progress in creating protections against discrimination and 
establishing fundamental rights to privacy. I'd like to again thank my 
colleagues, Senator Daschle, Senator Kennedy and Senator Harkin for 
joining me in introducing this legislation.
  Mr. KENNEDY. Mr. President, this week, scientists announced the 
completion of a task that once seemed unimaginable--deciphering the 
entire DNA sequence of the human genetic code. This amazing 
accomplishment is likely to affect the 21st century as profoundly as 
the invention of the computer or the splitting of the atom affected the 
20th century.
  These new discoveries bring remarkable new opportunities for 
improving health care. But they also carry the danger that genetic 
information will be used--not to improve the lives of Americans--but as 
a basis for discrimination. Discrimination on the basis of a person's 
genetic traits--such as those associated with cancer, Huntington's 
disease, or sickle cell anemia--is as unacceptable as discrimination on 
the basis of gender, race, or religion. No American should be denied 
health insurance or fired from a job based on the results of a genetic 
test.
  People need access to genetic testing, in order to seek treatments to 
extend and improve their lives. Yet, the vast potential of genetic 
knowledge to improve health care will go unfulfilled, if patients fear 
that information about their genetic characteristics will be used as 
the basis for discrimination. Congress has a responsibility to 
guarantee that private medical information remains private, and that 
genetic information cannot be used for improper purposes.
  The Genetic Non-Discrimination in Health Insurance and Employment Act 
guarantees these protections. It gives the American people the 
protections they need and deserve against genetic discrimination. It 
prohibits employers from using genetic information to discriminate in 
the workplace in hiring, promotion, pay or other workplace rights and 
privileges. And it gives victims of genetic discrimination the right to 
seek remedies through legal action.
  In too many cases today the promise of genetic research is being 
squandered, because patients rightly fear that information about their 
genes will be used against them in the workplace or in health 
insurance. Study after study reports that the vast majority of 
Americans are concerned about taking a genetic test, for fear that 
employers will have access to the information. The Journal of the 
American Medical Association reported that 57 percent of women at risk 
for breast or ovarian cancer had refused to take a genetic test that 
could have identified their risk for cancer and assisted them in 
receiving medical treatment to prevent the onset of these diseases 
because they feared reprisals for doing so. Tragically, the vast 
potential of genetic knowledge to improve health care will go 
unfulfilled if patients fear that information about their genetic 
characteristics will be used as the basis for job discrimination or 
other prejudices.
  And that fear is clearly well-founded. Genetic discrimination is a 
real and frightening problem, and it is happening right now. Last 
Saturday reports of mandatory genetic testing of employees made 
headline news--and the testing was being conducted by one of the 
largest railroads in this country. One employee was informed by the 
railroad that he would be fired for refusing to submit to the genetic 
testing.
  This is just the tip of the iceberg of what is becoming a routine and 
pervasive employer practice as genetic testing becomes more accessible 
and economical. Today, employers and insurers often require and use 
this information to deny health coverage, refuse a promotion, or reject 
a job applicant--all in the absence of any symptoms of disease. 
According to a 1995 study by Georgetown University, people have been 
required to provide information about genetic diseases, disabilities, 
or family medical history on job applications and have been denied jobs 
or have lost jobs because of a family genetic condition.
  Moreover, a recent survey by the American Management Association of 
over 2,000 companies showed that more than 18 percent of companies 
require genetic tests or data on family medical history from employees 
or job applicants. According to the same survey, more than 26 percent 
of the companies that require this information use it in hiring 
decisions.
  Experts in genetics are virtually unanimous in calling for strong 
protections to prevent this misuse and abuse of science. The Department 
of Health and Human Services' advisory panel on genetic testing--
consisting of experts in law, science, medicine and business--
recommended unambiguously that ``Federal legislation should be enacted 
to prohibit discrimination in employment and health insurance based on 
genetic information.'' Dr. Craig Venter, the president of Celera 
Genomics, who led the privately-financed aspect of the gene sequencing 
research, has spoken of the ``immediate threat . . . [of] genetic 
discrimination. . . . [H]uman rights and civil rights law will have to 
be updated to include this new class of diagnosed person. At this 
stage, one can only imagine the future potential of abuse,'' he said.
  With time, the potential for genetic discrimination will only grow 
stronger and federal legislation to establish minimum protections is 
needed to ensure that advances in research and technology are not used 
to discriminate against workers. Without strong protections 
guaranteeing that private medical information remains private and that 
genetic information can not be used for improper purposes, we will 
squander the unprecedented opportunities presented by these new 
discoveries, and the health and welfare of large numbers of our fellow 
citizens will be put at risk.
  I commend our leader, Senator Daschle, for introducing this important 
legislation that will give the American people the protections against 
genetic discrimination they need and deserve. The Genetic Non- 
Discrimination in Health Insurance and Employment Act will prohibit 
insurers from denying or abridging health care coverage on the basis of 
genetic test results. It will protect employees from discrimination on 
the basis of their unalterable genetic inheritance. The Act safeguards 
Americans' private genetic information from unauthorized disclosures to 
employers, banks, and others who should not have access to this most 
sensitive of personal information. And, because a right without a 
remedy is no right at all, this important measure would provide persons 
who have suffered genetic discrimination in either arena with the right 
to seek redress through legal action. I urge my colleagues to join 
Senator Daschle and me in supporting the Genetic Non-Discrimination in 
Health Insurance and Employment Act.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Hollings, and Mrs. Hutchison):
  S. 319. A bill to amend title 49, United States Code, to ensure that 
air carriers meet their obligations under the Airline Customer Service 
Agreement, and provide improved passenger service in order to meet 
public convenience and necessity; to the Committee on Commerce, 
Science, and Transportation.
  Mr. McCAIN. Mr. President, this morning the Commerce Committee heard 
testimony from the Department of Transportation Inspector General on 
the airlines' efforts to meet their voluntary Airline Customer Service 
Commitment. The IG reported that the airlines had made progress in 
their customer service areas. He also noted that the airlines were 
deficient in many areas of their commitment. The IG recommended that 
Congress take some measures to ensure that the airlines continue to 
make progress on the passenger service front.
  To that end, I am introducing the Airline Customer Service 
Improvement Act, along with Senators Hollings, Hutchison, and Wyden.
  This bill implements the recommendations set forth by the Inspector 
General in his final report. Specifically, the bill requires each air 
carrier to incorporate the voluntary Airline Customer Service 
Commitment into its contract of carriage. In addition, the

[[Page 1790]]

bill requires each air carrier to specifically disclose information 
recommended by Mr. Mead, such as the on-time performance rates of 
specific flights and the airlines' policy with respect to overnight 
accommodations.
  The bill also directs the Department of Transportation to raise the 
compensation required for passengers involuntarily bumped from a 
flight. This regulation has not been updated in more than 20 years.
  The bill also directs the Department of Transportation to change the 
way it calculates lost and mishandled baggage statistics, so that these 
statistics will more accurately represent the problems that passengers 
face.
  Finally, consistent with the IG's recommendations, the bill requires 
the airlines to report on their efforts to establish targets for 
reducing the number of chronically-delayed and canceled flights, and 
establishing a system passengers may use to determine if their flight 
has been delayed or canceled.
  In short, this legislation does not seek to legislate good customer 
service. This legislation seeks to provide the airlines and the 
Department of Transportation with the incentives to ensure that good 
customer service remains high on everyone's priority list.
  Let me make clear that this bill is just one small step towards 
fixing the system. This bill does not begin to address the many 
problems facing the airline industry. Capacity, congestion, antiquated 
air traffic control systems, and labor all have had detrimental effects 
on our system and, consequently, customer service. The Commerce 
Committee will continue to explore ways to improve the efficiency of 
our aviation system. We will all need to work together to fix the 
multitude of problems that airline customers face everyday.
  I look forward to working together with my fellow Senators on this 
and other ways to address the needs of our aviation system.
  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. 319

       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 ``Airline Customer Service 
     Improvement Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) The Inspector General of the Department of 
     Transportation has found that the airlines' voluntary 
     commitment to better service, set forth in the Airline 
     Customer Service Commitment, has resulted in positive changes 
     in how air travelers are treated.
       (2) While the Inspector General's Final report noted that 
     the voluntary effort has produced benefits faster than a 
     legislative or regulatory mandate, which could have taken 
     years to implement, the Inspector General has recommended 
     additional changes that require legislation and regulations.
       (3) The Airline Customer Service Commitment has prompted 
     the airlines to address consumer concerns in many areas, 
     ranging from providing information more accurately on delays 
     to explaining that lower fares may be available through the 
     Internet.
       (4) The airlines were cooperative with, and responsive to, 
     many of the suggestions the Inspector General made in the 
     interim report last year.
       (5) The Inspector General has determined that, while there 
     has been significant progress in improving airline customer 
     service, certain areas covered by the Airline Customer 
     Service Commitment are in need of significant clarification 
     and improvement and, where appropriate, enforcement action.

     SEC. 3. DEPARTMENT OF TRANSPORTATION TO DEVOTE GREATER 
                   RESOURCES TO AIRLINE PASSENGER CONSUMER 
                   PROTECTION.

       (a) In General.--The Secretary of Transportation shall 
     increase the resources of the Department of Transportation 
     allocated to providing--
       (1) airline passenger consumer protection and related 
     services; and
       (2) oversight and enforcement of laws and regulations 
     within the jurisdiction of the Department that provide 
     protection for air travelers.
       (b) Report.--Within 60 days after the date of enactment of 
     this Act, the Secretary shall report to the Senate Committee 
     on Commerce, Science, and Transportation and the House 
     Committee on Transportation and Infrastructure measures taken 
     by the Secretary to carry out subsection (a), together with a 
     request for additional funds or measures, if necessary, to 
     carry out that subsection fully.

     SEC. 4. AIRLINE CUSTOMER SERVICE COMMITMENT.

       (a) In General.--Chapter 417 of title 49, United States 
     Code, is amended by adding at the end the following:

               ``SUBCHAPTER IV. AIRLINE CUSTOMER SERVICE

     ``Sec.  41781. Airline customer service requirements

       ``(a) In General.--Within 60 days after the date of 
     enactment of the Airline Customer Service Improvement Act, 
     each large air carrier shall incorporate the provisions of 
     the Airline Customer Service Commitment executed by the Air 
     Transport Association and 14 of its member airlines on June 
     17, 1999, in its contract of carriage.
       ``(b) Additional Obligations.--Within 60 days after the 
     date of enactment of the Airline Customer Service Improvement 
     Act, each large air carrier shall institute the following 
     practices:
       ``(1) Include fares available at the air carrier's ticket 
     offices and airport ticket service counters when quoting the 
     lowest fare available to passengers.
       ``(2) Notify customers that lower fares may be available 
     through other distribution systems, including Internet 
     websites.
       ``(3) Provide, no later than the 5th day of each month, the 
     air carrier's on-time performance rate for each scheduled 
     flight for the most recently-ended month for which data is 
     available through its Internet website.
       ``(4) Disclose, without being requested, the on-time 
     performance and cancellation rate for a chronically-delayed 
     or canceled flight whenever a customer makes a reservation or 
     purchases a ticket on such a flight.
       ``(5) Establish a plan with respect to passengers who must 
     unexpectedly remain overnight during a trip due to flight 
     delays, cancellations, or diversions.
       ``(6) Tell all passengers on a flight what the air carrier 
     is required to pay passengers involuntarily denied boarding 
     before making offers to passengers to induce them voluntarily 
     to relinquish seats.
       ``(c) Compliance Assurance.--
       ``(1) Air carrier functions.--Each large air carrier also 
     shall--
       ``(A) establish a customer service quality assurance and 
     performance measurement system within 90 days after the date 
     of enactment of the Airline Customer Service Improvement Act;
       ``(B) establish an internal audit process to measure 
     compliance with the commitments and its customer service plan 
     within 90 days after the date of enactment of the Airline 
     Customer Service Improvement Act; and
       ``(C) cooperate fully with any Department of Transportation 
     audit of its customer service quality assurance system or 
     review of its internal audit.
       ``(2) DOT functions.--The Secretary of Transportation 
     shall--
       ``(A) monitor compliance by large air carriers with the 
     requirements of this section and take such action under 
     subpart IV of this title as may necessary to enforce 
     compliance with this section under subpart IV of this title;
       ``(B) monitor air carrier customer service quality 
     assurance and performance measurement systems to ensure that 
     air carriers are meeting fully their airline passenger 
     service commitments; and
       ``(C) review the internal audits conducted by air carriers 
     of their air carrier customer service quality assurance and 
     performance measurement systems.
       ``(d) Definitions.--In this section--
       ``(1) Large air carrier.--The term `large air carrier' 
     means an air carrier holding a certificate issued under 
     section 41102 that--
       ``(A) operates aircraft designed to have a maximum 
     passenger capacity of more than 60 seats or a maximum payload 
     capacity of more than 18,000 pounds; or
       ``(B) conducts operations where one or both terminals of a 
     flight stage are outside the 50 states of the United States, 
     the District of Columbia, the Commonwealth of Puerto Rico and 
     the U.S. Virgin Islands.
       ``(2) Chronically delayed or canceled.--A flight shall be 
     considered to be chronically-delayed or canceled if at least 
     40 percent of the flight's departures are delayed for at 
     least 15 minutes or at least 40 percent of the flights are 
     canceled.''.
       (b) Enforcement.--Section 46301(a)(7) of title 49, United 
     States Code, is amended by striking ``40112 or 41727'' and 
     inserting ``40112, 41727, or 41781''.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     417 of title 49, United States Code, is amended by adding at 
     the end the following:

               ``SUBCHAPTER IV. AIRLINE CUSTOMER SERVICE

``41781. Airline customer service requirements''.

     SEC. 5. OTHER SERVICE-ENHANCING IMPROVEMENTS.

       (a) In General.--Within 90 days after the date of enactment 
     of this Act, each large air carrier (as defined in section 
     41781(d)(1)) shall--
       (1) establish realistic targets for reducing chronically-
     delayed and canceled flights;
       (2) establish a system passengers may use before departing 
     for the airport to determine whether there is a lengthy 
     flight delay or whether a flight has been canceled;

[[Page 1791]]

       (3) develop and implement a system for tracking and 
     documenting the amount of time between the receipt of a 
     passenger's claim for missing baggage and the delivery of the 
     baggage to the passenger, including the time taken by a 
     courier or other delivery service to deliver found baggage to 
     the passenger;
       (4) monitor and report its efforts to improve services 
     provided to passengers with disabilities and special needs, 
     including services provided at airports such as check-in, 
     passenger security screening (particularly for passengers who 
     use wheelchairs), boarding, and disembarkation;
       (5) clarify terminology used to advise passengers of 
     unscheduled delays or interruptions in service, such as 
     ``extended period of time'' and ``emergency'', in order 
     better to inform passengers about what they can expect during 
     on-board delays;
       (6) ensure that comprehensive passenger service contingency 
     plans are properly maintained and that the plans, and any 
     changes to those plans, are coordinated with local airport 
     authorities and the Federal Aviation Administration;
       (7) ensure that master airport flight information display 
     monitors contain accurate, up-to-date flight information and 
     that the information is consistent with that shown on the 
     carrier's flight information display monitors;
       (8) establish a toll-free telephone number that a passenger 
     may use to check on the status of checked baggage that was 
     not delivered on arrival at the passenger's destination;
       (9) if it maintains a domestic code-share arrangement with 
     another air carrier, conclude an agreement under which it 
     will conduct an annual audit of that air carrier's compliance 
     with the other air carrier's airline customer service 
     commitment; and
       (10) if it has a frequent flyer program, make available to 
     the public a comprehensive report of frequent flyer 
     redemption information in their customer literature and 
     annual reports, including information on the percentage of 
     successful redemption of frequent flyer awards and the number 
     of seats available for such awards in the air carrier's top 
     100 origin and destination markets.
       (b) Initial Response Reports.--
       (1) Air carriers.--Within 90 days after the date of 
     enactment of this Act, each large air carrier shall report to 
     the Secretary of Transportation on its implementation of the 
     obligations imposed on it by this Act.
       (2) Secretary.--Within 270 days after the date of enactment 
     of this Act, the Secretary of Transportation shall report to 
     the Congress on the implementation by large air carriers of 
     the obligations imposed on them by this Act, together with 
     such additional findings and recommendations for additional 
     legislative or regulatory action as the Secretary deems 
     appropriate.

     SEC. 6. IMPROVED DOT STATISTICS.

       (a) Missing Baggage.--In calculating and reporting the rate 
     of mishandled baggage for air carriers, the Department of 
     Transportation shall not take into account passengers who do 
     not check any baggage.
       (b) Chronically Delayed or Canceled Flights.--The Office of 
     Aviation Enforcement and Proceedings of the Department of 
     Transportation in coordination with the Bureau of 
     Transportation Statistics of the Department of 
     Transportation, shall include a table in the Air Travel 
     Consumer Report that shows flights chronically delayed by 15 
     minutes or more and flights canceled 40 percent or more for 3 
     consecutive months or more.

     SEC. 7. DOT REGULATIONS ON BUMPING.

       (a) Uniform Check-in Deadline.--The Secretary of 
     Transportation shall initiate a rulemaking within 30 days 
     after the date of enactment of this Act to amend the 
     Department of Transportation's Regulations to establish a 
     uniform check-in deadline and to require air carriers to 
     disclose, both in their contracts of carriage and on ticket 
     jackets, their policies on how those deadlines apply to 
     passengers making connections.
       (b) Bumped Passenger Compensation.--The Secretary of 
     Transportation shall initiate a rulemaking within 30 days 
     after the date of enactment of this Act to amend the 
     Department of Transportation's Regulation (14 C.F.R. 250.5) 
     governing the amount of denied boarding compensation for 
     passengers denied boarding involuntarily to increase the 
     maximum amount thereof.
       (c) Clarify Certain Terms.--The Secretary of Transportation 
     shall clarify the terms ``any undue or unreasonable 
     preference or advantage'' and ``unjust or unreasonable 
     prejudice or disadvantage'', as used in section 250.3 of the 
     Department of Transportation's Regulations (14 C.F.R. 250.3), 
     for purposes of air carrier priority rules or criteria for 
     passengers denied boarding involuntarily.

  Mr. HOLLINGS. Mr. President, I join with Senator McCain in co-
sponsoring the Airline Customer Service Improvement Act. The Commerce 
Committee has spent a great deal of time seeking ways to hold the air 
carriers accountable for their service and to force them to do a better 
job. Deregulation was supposed to make the carriers compete for our 
business, but it has failed. We now have hundreds of markets with no 
competition, and without competition, you get no service. Carriers have 
treated consumers like cattle in a stockyard, and that must end.
  It is time to stand up for all travelers and demand basic 
information, and to expect service if we are paying the high fares.
  The Commerce Committee has held three hearings, enlisted the 
Department of Transportation's Inspector General, and experienced the 
lack of service, first hand. It is not complicated, but it does take a 
commitment from the industry to hire more people and give them the 
tools to tell consumers what is going on or why a flight is canceled or 
delayed. Flights delayed 30, 40 percent of the time, according to DOT 
statistics, or canceled that often, should be eliminated or schedules 
changed.
  Telling people truthfully what is happening, providing basic 
necessities when flights are delayed for hours on end like they were in 
Detroit in January 1999, is not hard.
  The chairman and I have waited patiently to proceed with legislation 
in anticipation of a final report by the Department of Transportation's 
Inspector General, Ken Mead. The report, released Monday, is a 
blueprint for change. Mr. Mead and his staff, David Dobbs, Lexi 
Stefani, Brian Dettleback, and Scott Morris, worked long and hard to 
find the best way to make improvements in service.
  The report notes that reducing delays is a tough problem, requiring 
funding and industry action. We have an air transportation system in 
crisis, from every angle, nonetheless that is no excuse for poor 
service. There are more people flying, more planes landing, an increase 
in delays (up 33% since 1995), a critical shortage of runways, and 
airlines able to dictate the price and quality of service offered in 
many markets without regard to competition. Delays will continue to 
plague the system, but the carriers know this, and their Customer 
Service Commitments were done in light of known problems. We will work 
with the industry on many facets of expanding capacity, but it is their 
job to improve service.
  The carriers all to often want to cite the government as the reason 
for their problems. I do not buy that. These carriers have more data 
than virtually any industry, and make educated guesses on pricing and 
scheduling every day. They know the likelihood of delays. Even weather, 
which is unpredictable on a daily basis, is something they can 
anticipate. I know right now we will have thunderstorms this summer, 
and snow storms next winter. How will the carriers treat people during 
those times? I know my flight is likely to be delayed--the reasons may 
vary, but the process by which you tell people basic information should 
not be hard. Some of the carriers have attempted improvements. At a 
hearing last June, one carrier demonstrated a new automatic system that 
more quickly tells people what to expect. Another carrier has 
``chariots'' that set up temporary service counters during emergency 
periods. An ad this past weekend touted ways to electronically tell 
passengers that a flight is late. These are a start, but there is a 
long road to go.
  The Air Transport Association last month announced a number of 
initiatives on ways to reduce delays. The ATA called on the President 
to hire a 1000 more controllers, use satellites to track planes and to 
redesign our airspace--all actions that could increase capacity. I 
support those initiatives, but we had better tell the Administration 
not to reduce the FAA's budget by hundreds of millions of dollars, 
which they apparently are considering.
  The Senate is going to spend the time to increase competition, to 
improve service, and to put back the notion of the public's needs as a 
priority.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Kennedy, Mr. Jeffords, Mr. 
        Baucus, Ms. Snowe, Mr. Rockefeller, Mr. Daschle, Mr. Breaux, 
        Mr. Conrad, Mr. Graham, Mr. Bingaman, Mr. Kerry, Mr. 
        Torricelli, Mrs. Lincoln, Mr. Akaka, Mr. Bayh, Mr. Biden, Mrs. 
        Boxer, Mr.

[[Page 1792]]

        Byrd, Mr. Chafee, Mr. Cleland, Mrs. Clinton, Ms. Collins, Mr. 
        Corzine, Mr. Crapo, Mr. Dayton, Mr. DeWine, Mr. Dodd, Mr. 
        Domenici, Mr. Dorgan, Mr. Durbin, Mr. Edwards, Mrs. Feinstein, 
        Mr. Frist, Mr. Harkin, Mr. Helms, Mr. Inouye, Mr. Johnson, Mr. 
        Kohl, Mrs. Landrieu, Mr. Leahy, Mr. Levin, Mr. Lieberman, Mr. 
        Lugar, Ms. Mikulski, Mrs. Murray, Mr. Nelson of Florida, Mr. 
        Reed, Mr. Reid, Mr. Roberts, Mr. Santorum, Mr. Sarbanes, Mr. 
        Schumer, Mr. Smith of Oregon, Mr. Thomas, Mr. Thurmond, Mr. 
        Warner, and Mr. Wellstone):
  S. 321. A bill to amend title XIX of the Social Security Act to 
provide families of disabled children with the opportunity to purchase 
coverage under the medicaid program for such children, and for other 
purposes; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, it is with great pleasure that I 
announce the introduction of the Family Opportunity Act of 2001. I 
pledge my commitment to working with Senator Kennedy and others in a 
bi-partisan, bi-cameral way for the passage of the Family Opportunity 
Act this year.
  We have a common-sense bill. Our bill is pro-family because it keeps 
families together. It's pro-work because it lets parents work without 
losing their children's health care. It's pro-taxpayer because it lets 
people earn money and help pay their own way for Medicaid coverage.
  Why is this legislation so necessary? As a parent, your main 
objective in life is to provide for your child to the best of your 
ability. Our federal government takes this goal and turns it upside 
down for the parents of children with special health care needs. The 
government forces these parents to choose between family income and 
their children's health care. That's a terrible choice.
  Families have to remain in poverty just to keep Medicaid. Obviously 
this affects entire families, not just the child with the health care 
needs. The story of an Iowan family illustrates this point. Daniel, the 
18-year-old son of Melissa Arnold, can't work part-time for fear of 
jeopardizing his brother's Medicaid coverage.
  I know of another family whose son was paralyzed after a diving 
accident. The family exhausted $1 million of private insurance. Then 
they had to pay $1,500 a day on their own just to keep their son alive. 
Yet another family has a 4-year-old son who functions at an infant's 
level. This little boy takes anti- seizure medication that costs about 
$150 every two weeks. His nutritional supplement is $10 a day. He'll 
always wear diapers. All of those costs come out of his parents' 
pocket.
  Most families just can't afford those costs.
  Why is Medicaid so desirable? It's critical to the well-being of 
children with multiple medical needs. Medicaid covers services that are 
difficult to find in private health plans. A child with a severe 
disability may need special medical equipment or physical therapy on a 
regular basis just in order to be able to eat.
  Our bill creates a state option to allow working parents who have a 
child with a disability to keep working and to still have access to 
Medicaid for their child. Parents would pay for Medicaid coverage on a 
sliding scale. No one would have to become impoverished or stay 
impoverished to secure Medicaid for a child.
  The legislation recognizes a universal truth. Everybody wants to use 
their talents to the fullest potential, and every parent wants to 
provide as much as possible for his or her children. The government 
shouldn't get in the way. I look forward to working with my colleagues 
for passage of the Family Opportunity Act this year.
  Mr. KENNEDY. Mr. President, it is an honor to once again join my 
colleague Senator Chuck Grassley in introducing the Family Opportunity 
Act of 2001--the hallmark of which is to remove the health care 
barriers for children with disabilities that so often prevent families 
from staying together and staying employed.
  Despite the extraordinary growth and prosperity the country is 
enjoying today, families of disabled and special needs children 
continue to struggle to keep their families together, live 
independently and become fully contributing members of their 
communities.
  More than 8 percent of children in this country have significant 
disabilities, many of whom do not have access to critical health 
services they need to maintain and prevent deterioration of their 
health status. To get needed health services for their children, 
families are being forced to become poor, stay poor, put their children 
in out of home placements, or simply give up custody of their 
children--all so that their children can qualify for the comprehensive 
health coverage available under Medicaid.
  In a recent survey of 20 states, families of special needs children 
report they are turning down jobs, turning down raises, turning down 
overtime, and are unable to save money for the future of their children 
and family --so that their child can stay eligible for Medicaid through 
the Social Security Income (SSI) Program.
  Today we are reintroducing legislation intended to close the health 
care gap for the Nation's most vulnerable population, and enable 
families of disabled children in this country to be equal partners in 
the American dream.
  In the words of President George W. Bush in his ``New Freedom 
Initiative'', ``Too many Americans with disabilities remain trapped in 
bureaucracies of dependence, and are denied the access necessary for 
success--and we need to tear down these barriers''.
  The Family Opportunity Act of 2001 will tear down the unfair barriers 
to needed health care that so many disabled and special needs children 
are being denied.
  It will make health insurance coverage more widely available for 
children with significant disabilities, through opportunities to buy-in 
to Medicaid at an affordable rate.
  It will allow states to develop a demonstration program to provide a 
medicaid buy-in for children with potentially significant disabilities 
who without needed health services will become severely disabled.
  States will have more flexibility to offer disabled children needed 
health services at home and in their communities.
  It will establish Family to Family Information Centers in each state 
to help families with special needs children.
  The passage of the Work Incentives Improvement Act of 1999 showed the 
commitment of this Nation to ensure that people with disabilities have 
the right to lead independent and productive lives without giving up 
their health care. It is now time for Congress to show that same 
commitment to our country's children with disabilities and their 
families.
  I look forward to working with all members of Congress to move this 
legislation forward and give disabled children and their families 
across the country a better opportunity to fulfill their dreams and 
fully participate in the social and economic mainstream of our Nation.
                                 ______
                                 
      By Mr. COCHRAN (for himself, Mr. Frist, and Mr. Leahy):
  S.J. Res. 5. A joint resolution providing for the appointment of 
Walter E. Massey as a citizen regent of the Board of Regents of the 
Smithsonian Institution; to the Committee on Rules and Administration.
  Mr. COCHRAN. Mr. President, today I am introducing a Senate joint 
resolution appointing a citizen regent to the Board of Regents of the 
Smithsonian Institution. I am pleased that my fellow Smithsonian 
Institution Regents, the Senator from Tennessee, Mr. Frist, and the 
Senator from Vermont, Mr. Leahy, are cosponsors.
  At its meeting on January 22, 2001, the Smithsonian Institution Board 
of Regents recommended Dr. Walter E. Massey for appointment to the 
Smithsonian Institution Board of Regents.
  I ask unanimous consent that the biography of the nominee and the 
text of the joint resolution be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page 1793]]



                              S.J. Res. 5

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled,

     SECTION 1. APPOINTMENT OF CITIZEN REGENT OF THE BOARD OF 
                   REGENTS OF THE SMITHSONIAN INSTITUTION.

       (a) In General.--In accordance with section 5581 of the 
     Revised Statutes (20 U.S.C. 43), the vacancy on the Board of 
     Regents of the Smithsonian Institution, in the class other 
     than Members of Congress, occurring by reason of the 
     expiration of the term of Frank A. Shrontz of Washington on 
     May 4, 2000, is filled by the appointment of Walter E. Massey 
     of Georgia.
       (b) Term.--The appointment is for a term of 6 years 
     beginning on the date of enactment of this joint resolution.
                                  ____


                               Biography

       Massey, Walter Eugene, physicist, science foundation 
     administrator; b. Hattiesburg, Miss., Apr. 5, 1938; s. Almor 
     and Essie (Nelson) M.; m. Shirley Streeter, Oct. 25, 1969; 
     children: Keith Anthony, Eric Eugene. BS, Morehouse Coll., 
     1958; MA, Washington U., St. Louis, 1966, PhD, 1966. 
     Physicist Argonne (Ill.) Nat. Lab., 1966-68; asst. prof. 
     physics U. Ill., Urbana, 1968-70; assoc. prof. Brown U., 
     Providence, 1970-75, prof., dean of Coll., 1975-79; prof. 
     physics U. Chgo., 1979-93; dir. Argonne Nat. Lab., 1979-84; 
     v.p. for rsch. and for Argonne Nat. Lab. U. Chgo., 1984-91; 
     dir. NSF, Washington, 1991-93; sr. v.p. acad. affairs U. 
     Calif. System, 1993-95; pres. Morehouse Coll., Atlanta, 
     1995--; mem. NSB, 1978-84; cons. NAS, 1973-76. A scientist 
     and educator for the past 30 years, with significant 
     influence in higher education (especially science and math 
     education) and in educational administration, Walter Massey 
     has done extensive research in the study of quantum liquids 
     and solids. In 1966, while a physics professor at the 
     University of Chicago, he was instrumental in the founding of 
     the Argonne National Laboratory for the University, where he 
     served as director from 1979-84. He was responsible for 
     budget planning and allocations and programmatic oversight of 
     the three national laboratories managed by the University of 
     California from 1993-95. He is currently the ninth president 
     of Morehouse College, the nation's only historical black, 
     four-year liberal arts college for men. Contbr. articles on 
     sci. edn. in secondary schs. and in theory of quantum fluids 
     to profl. jours. Bd. fellows Brown U., 1980-90, Mus. Sci. and 
     Industry, Chgo., 1980-89, Ill. Math. and Sci. Acad., 1985-88; 
     bd. dirs. Urban League R.I., 1973-75. NAS fellow, 1961, NDEA 
     fellow, 1959-60, AAAS fellow, 1962. Mem. AAAS (bd. dirs. 
     1981-85, pres.-elect 1987-88, pres. 1988-89, chmn. 1989-90), 
     Am. Phys. Soc. (councillor-at-large 1980-83, v.p. 1990), 
     Sigma Xi. Office: Morehouse Coll 830 Westview Dr SW Atlanta 
     GA 30314-3773.

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