[House Report 106-394]
[From the U.S. Government Publishing Office]





106th Congress                                            Rept. 106-394
  1st Session           HOUSE OF REPRESENTATIVES              Part 2   

======================================================================



 
                      STUDENT RESULTS ACT OF 1999

                                _______
                                

                October 19, 1999.--Ordered to be printed

                                _______


   Mr. Goodling, from the Committee on Education and the Workforce, 
                        submitted the following

                          SUPPLEMENTAL REPORT

                         [To accompany H.R. 2]

    This supplemental report shows the cost estimate of the 
Congressional Budget Office with respect to the bill (H.R. 2), 
as reported, which was not included in the report submitted by 
the Committee on Education and the Workforce on October 18, 
1999 (H. Rept. 106-394, Part 1).
    This supplemental report is submitted in accordance with 
clause 3(a)(2) of rule XIII of the Rules of the House of 
Representatives.

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 19, 1999.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2, the Student 
Results Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Audra 
Millen (for federal costs) and Susan Sieg (for the state and 
local impact).
            Sincerely,
                                          Dan L. Crippen, Director.
    Enclosure.

H.R. 2--Student Results Act of 1999

    Summary: Programs under the Elementary and Secondary 
Education Act of 1965 (ESEA) are authorized through 2000 under 
the General Education Provisions Act (GEPA). H.R. 2 would 
extend the authorization of many of these programs through 
2004. The bill would revise and increase the authorization 
levels for programs that support disadvantaged students (known 
as Title I programs), magnet schools, gifted and talented 
students, and homeless youth while maintaining or slightly 
reducing authorization levels for Native Indian and Alaska 
Native programs. H.R. 2 would also repeal two existing 
programs, the Women's Education Equity Program and Education 
for Native Hawaiians. In addition, H.R. 2 would revise the 
authorization of education programs provided through the Bureau 
of Indian Affairs within the Department of the Interior and 
extend the authorizations for those that expired in 1999. 
Authorizations under the bill relative to current law would 
total about $1 billion in 2000 and about $41 billion over the 
2000-2004 period. CBO estimates that appropriations of the 
authorized levels would result in additional outlays of $27.7 
billion over the 2000-2004 period, relative to estimated 
spending under current law. Enacting H.R. 2 would not affect 
direct spending or receipts; therefore, pay-as-you-go 
procedures would not apply.
    The reauthorization of programs under H.R. 2 would provide 
for grants to state and local education agencies and tribal 
governments to assist target student populations to meet state 
performance standards. One provision of the bill would preempt 
certain state laws relating to teacher liability. Such a 
preemption would be a mandate as defined by the Unfunded 
Mandates Reform Act (UMRA). However, CBO estimates that the 
costs, if any, would not exceed the threshold in that act ($50 
million in 1996, adjusted annually for inflation). Any other 
costs incurred by state, local, or tribal governments would 
result from complying with conditions of aid. H.R. 2 contains 
no private-sector mandates as defined in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2 is shown in Table 1. The costs of 
this legislation fall within budget function 500 (education, 
training, employment, and social services).

                                 TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 2
----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal years, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

                                         With Adjustments For Inflation

Spending Under Current Law:
    Budget Authority/Authorization Level \1\..................     8,959     6,862       601       615       628
    Estimated Outlays.........................................     8,665     8,588     3,129     1,030       620
Total Proposed Changes:
    Estimated Authorization Level.............................     1,017     9,706     9,895    10,098    10,298
    Estimated Outlays.........................................        55     1,159     7,070     9,417    10,038
Total Spending Under H.R. 2:
    Estimated Authorization Level.............................     9,977    16,568    10,495    10,713    10,926
    Estimated Outlays.........................................     8,721     9,747    10,199    10,447    10,659

                                        Without Adjustments For Inflation

Spending Under Current Law:
    Budget Authority/Authorization Level \1\..................     8,959     6,723       575       575       575
    Estimated Outlays.........................................     8,659     8,501     3,079       992       575
Total Proposed Changes:
    Estimated Authorization Level.............................     1,017     9,515     9,504     9,500     9,499
    Estimated Outlays.........................................        55     1,149     6,926     9,086     9,502
Total Spending Under H.R. 2:
    Estimated Authorization Level.............................     9,977    16,238    10,079    10,074    10,074
    Estimated Outlays.........................................     8,714     9,650    10,005    10,077    10,076
----------------------------------------------------------------------------------------------------------------
\1\ The level shown for 2000 includes about $6 billion that had already been appropriated and about $3 billion
  that CBO estimates is authorized under current law.
Note.--Components may not sum to totals because of rounding.


    Basis of estimate: H.R. 2 would reauthorize funding through 
2004 for various programs created under ESEA. These programs, 
which would have expired in 1999 had not the automatic one-year 
extension provided under GEPA applied, would generally be 
reauthorized at specific levels for 2000 and for such sums as 
may be necessary for 2001 through 2004. CBO estimates that the 
bill would increase authorized levels by $1 billion in 2000 and 
by $41 billion over the 2000-2004 period assuming that ``such 
sums'' amounts provided after 2000 are adjusted for inflation. 
If the authorized amounts are appropriated, H.R. 2 would 
increase outlays relative to current law by $55 million in the 
first year and by $27.7 billion over the five-year period. 
Without inflationary adjustments, the increased authorizations 
would result in outlays of $26.7 billion over the five years.
    As of the date of this estimate, no full-year 
appropriations for 2000 have been enacted for the ESEA 
programs. CBO inflates the 1999 appropriations for the ESEA 
programs to estimate their authorized levels under the GEPA 
extension for 2000, and these are the amounts against which CBO 
estimates the costs of H.R. 2. A detailed breakout of the 
estimated costs is provided in Table 2.
    In addition to the reauthorizations, H.R. 2 would repeal 
certain programs, create several new ones, and alter the 
allocation formulas in several others.

Title I: Student results

    H.R. 2 would reauthorize and revise Parts A, C, D, and F of 
Title I of ESEA and introduce a new School Reform Program under 
the same title. The legislation does not address Part B, the 
Even Start Family Literacy Program, or Part E, the Federal 
Evaluations and Demonstrations Program.
    Current Law. Title I of ESEA was enacted in 1965 to provide 
funding support for education programs for disadvantaged 
student populations. Part A of the current program focuses on 
low-income students, with 85 percent of funds providing basic 
grants to states based on the number of qualifying students and 
the remaining 15 percent used for concentration grants to 
support schools in counties with high poverty rates. Another 
targeted grant program is authorized to provide additional 
grants that would increase in proportion to the number of 
children in poverty, but this program has not been funded. 
Under Part B, states receive grants to provide for the 
educational needs of children of migrant workers while programs 
funded under Part C serve neglected and delinquent youth. Part 
F addresses general program provisions such as rulemaking 
guidelines allowances for administrative set-asides.

                 TABLE 2.--DETAILED BUDGETARY EFFECTS OF H.R. 2, WITH ADJUSTMENTS FOR INFLATION
----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal years, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law:
    Budget Authority/Authorization Level......................     8,959     6,862       601       615       628
    Estimated Outlays.........................................     8,665     8,588     3,129     1,030       620

                       Proposed Changes

Title I--Student Results:
    Basic Program:
        Estimated Authorization Level.........................       630     8,522     8,702     8,890     9,070
        Estimated Outlays.....................................        32       836     6,132     8,263     8,834
    State Administrative Fund:
        Estimated Authorization Level.........................        10        10        10        11        11
        Estimated Outlays.....................................         1         7        10        10        11
    Capital Expense Account:
        Estimated Authorization Level.........................        -9        15         5         0         0
        Estimated Outlays.....................................     (\1\)        -5         8         7         2
    Children of Migrant Workers:
        Estimated Authorization Level.........................        43       408       417       426       435
        Estimated Outlays.....................................         2        49       297       396       423
    Neglected or Delinquent Youth:
        Estimated Authorization Level.........................         9        51        52        53        54
        Estimated Outlays.....................................     (\1\)         9        38        50        53
    Comprehensive School Reform:
        Estimated Authorization Level.........................       175       179       182       186       190
        Estimated Outlays.....................................         9       123       169       181       185
    Miscellaneous Reports:
        Estimated Authorization Level.........................     (\1\)         0         0         0         0
        Estimated Outlays.....................................     (\1\)         0         0         0         0
        Subtotal, Title I:....................................
            Estimated Authorization Level.....................       859     9,185     9,396     9,566     9,760
            Estimated Outlays.................................        43     1,017     6,653     8,907     9,508
Title II--Magnet Schools Assistance and School Choice:
    Magnet School Program:
        Estimated Authorization Level.........................        14       122       125       128       130
        Estimated Outlays.....................................         1        15        89       119       127
    Women's Educational Equity:
        Estimated Authorization Level.........................        -3         0         0         0         0
        Estimated Outlays.....................................     (\1\)        -2        -1     (\1\)         0
    Innovative School Choice Program:
        Estimated Authorization Level.........................        20        20        21        21        22
        Estimated Outlays.....................................         1        14        19        21        21
        Subtotal, Title II:...................................
            Estimated Authorization Level.....................        31       143       146       149       152
            Estimated Outlays.................................         2        27       108       140       148
Title IV--Indian, Native Hawaiians, and Alaska Native
 Education:
    Indian Education Grants:
        Estimated Authorization Level.........................        -1        63        65        66        67
        Estimated Outlays.....................................     (\1\)         7        51        63        66
    Special Programs and National Activities:
        Estimated Authorization Level.........................     (\1\)         4         4         4         4
        Estimated Outlays.....................................     (\1\)     (\1\)         3         4         4
    Native Hawaiian:
        Estimated Authorization Level.........................       -20         0         0         0         0
        Estimated Outlays.....................................        -1       -13        -5        -1         0
    Alaskan Native:
        Estimated Authorization Level.........................     (\1\)        10        10        11        11
        Estimated Outlays.....................................     (\1\)     (\1\)         7        10        11
    Bureau of Indian Affairs Early Education Program:
        Estimated Authorization Level.........................        10        10        10        11        11
        Estimated Outlays.....................................         3        10        10        10        11
    Tribal Departments:
        Estimated Authorization Level.........................         2         2         2         2         2
        Estimated Outlays.....................................         1         2         2         2         2
    Administrative Cost Grant Minimum:
        Estimated Authorization Level.........................         1         1         1         1         1
        Estimated Outlays.....................................     (\1\)         1         1         1         1
    Funding Adequacy Study:
        Estimated Authorization Level.........................     (\1\)         0         0         0         0
        Estimated Outlays.....................................     (\1\)         0         0         0         0
        Subtotal, Title IV:...................................
            Estimated Authorization Level.....................        -9        91        93        95        97
            Estimated Outlays.................................         3         7        69        90        95
Title V--Gifted and Talented Children:
    Gifted and Talented Program:
        Estimated Authorization Level.........................         3        10        10        10        10
        Estimated Outlays.....................................     (\1\)         4         9        10        10
    National Center for Research and Development:
        Estimated Authorization Level.........................         2         2         2         2         2
        Estimated Outlays.....................................     (\1\)         2         2         2         2
        Subtotal, Title V:....................................
            Estimated Authorization Level.....................         5        12        12        12        12
            Estimated Outlays.................................         1         5        11        12        12
Title VI--Rural Education Assistance:
    Formula Grants:
        Estimated Authorization Level.........................        63       119       119       119       119
        Estimated Outlays.....................................         3        47        99       116       119
    Competitive Grants:
        Estimated Authorization Level.........................        63       119       119       119       119
        Estimated Outlays.....................................         3        47        99       116       119
        Subtotal, Title VI:...................................
            Estimated Authorization Level.....................       125       238       238       238       238
            Estimated Outlays.................................         6        93       198       232       238
Title VII--McKinney Homeless Education Improvements:
    Estimated Authorization Level.............................         7        37        38        38        39
    Estimated Outlays.........................................         1         9        31        37        38
Total of Proposed Changes:
    Estimated Authorization Level.............................     1,017     9,706     9,895    10,098    10,298
    Estimated Outlays.........................................        55     1,159     7,070     9,417    10,038
Total Spending Under H.R. 2:
    Estimated Authorization Level.............................     9,977    16,568    10,495    10,713    10,926
    Estimated Outlays.........................................     8,721     9,747    10,199    10,447    10,659
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

Note.--Components may not sum to totals because of rounding.

    The allocation of state funding for each of these grant 
programs is determined by formula, and states must apply for 
grant money. Historically, the appropriated amounts for these 
programs have been significantly less than what unconstrained 
funding of the formula would require. When funds are 
insufficient to implement a formula, the Secretary of Education 
is directed to allocate the appropriated amount by reducing the 
formula-driven grants by a consistent percentage across all 
recipients.
    When last reauthorized in 1994, Title I programs adopted a 
standards-based emphasis, requiring states to design standards 
and implement assessments by academic year 2000. Schools were 
required to develop standards, and provisions were introduced 
by which schools could be identified for school improvement. 
Corrective actions were established for low-performing schools 
and schools were able to participate in a school choice program 
among other Title I schools.
    Basic Program. H.R. 2 would reauthorize the Basic, 
Concentration, and Targeted Grant Programs under part A of 
Title I for five additional years or four years beyond their 
GEPA authorization. The bill would authorize the appropriation 
of $8.35 billion for fiscal year 2000, a $630 million increase 
from CBO's projection under current law (that is, assuming an 
inflation adjustment to the 1999 level). The legislation would 
require that 50 percent of any increase in subsequent 
appropriations above the 1999 level be used to fund the 
Targeted Grant Program. A similar provision exists in current 
law in reference to increases above 1995 levels, but funds have 
never been appropriated for these targeted grants.
    H.R. 2 would revise the current limit on states' use of 
Title I funds for administrative needs. Currently, states are 
allowed a 1 percent set-aside of Title I funds under Parts A, 
C, and D. H.R. 2 would reauthorize the 1 percent set-aside only 
up to the 1999 funding level. The bill would authorize an 
additional $10 million for state administrative costs. The 
legislation would also impose a ceiling of 50 percent on the 
percentage of total state administrative costs that can be 
derived from federal funds.
    H.R. 2 would also place new restrictions on the use of 
Title I funds for hiring teachers aides and paraprofessionals. 
It would establish educational criteria for new and existing 
paraprofessionals and restrict the duties they can be assigned.
    The bill would introduce two new programs under Part A. 
Under the Academic Achievement Awards Program, states could use 
Title I funds to reward schools that have made progress toward 
meeting their assessment goals. States would be allowed to set 
aside up to 30 percent of those funds in excess of their 1999 
allotments. H.R. 2 would also introduce a new school choice 
program to give students at schools that are identified for 
improvement the option to attend other public schools. Unlike 
the existing school choice program under Title I, the new 
program would be mandatory for schools that are identified for 
school improvement. These schools would be given 18 months to 
develop and implement a choice plan for all of their students 
and would be required to continue to offer the plan for three 
years after such distinction is removed.
    H.R. 2 also would expand activities and access to existing 
programs under Part A. Under the existing school choice 
program, the bill would authorize the use of Title I funds to 
cover transportation expenses and transfers to non-Title I 
schools. H.R. 2 would allow more schools to adopt a school-wide 
approach to administering Title I services. Currently schools 
are eligible to use the school-wide approach only if 50 percent 
or more of their students meet the poverty-level criteria. H.R. 
2 would lower the poverty level requirement to 40 percent.
    The bill would expand on Title I's standards-based approach 
by requiring states to report their progress toward meeting the 
achievement goals. States may disseminate this information via 
state report cards or through other means such as posting their 
results on the Internet.
    Under current law, Title I authorizes a capital expense 
account to ensure that Title I services to private school 
children are administered in neutral settings. In response to 
the 1997 Supreme Court ruling that overturned this requirement, 
H.R. 2 would phase out funding over three years, authorizing 
$15 million for 2000, $15 million for 2001, and $5 million for 
2002. The 2000 level represents a $9 million decrease in the 
level currently authorized.
    Migrant Education Program. H.R. 2 would extend the 
authorization of Part C grants for education programs for 
children of migrant workers through 2004. The authorized 2000 
level of $400 million would be a $43 million increase from the 
estimate of current-level spending. H.R. 2 would further modify 
these programs to increase funding specifically designated for 
interstate and intrastate coordination of programs for children 
of migrant workers. The bill would increase the amount the 
Secretary can reserve for these purposes from $6 million to $10 
million. Of this reserved amount, H.R. 2 would double, from 
$1.5 million to $3 million, the authorized set-aside for 
awarding grants to states that enter into interstate 
consortiums to carry out Part C programs.
    For 2000, states would receive grants equal to the number 
of eligible children served times the appropriate per pupil 
amount. However, the amount authorized for 2000 would not fully 
fund the program, and the Secretary would be required to reduce 
the amount each state would receive. Each state's grant for the 
remaining four years would be based on the state's allotment in 
2000.
    Education for Neglected or Delinquent Youth. H.R. 2 would 
extend the authorization of Title I-Part D grants for education 
programs for neglected or delinquent youth. The authorized 
level of $50 million for 2000 is $9 million higher than the 
estimated level under current law. Within the reauthorization, 
the bill would also focus on facilitating the transition of 
students from state-operated facilities back to local schools 
by increasing the set-aside for transition services from 10 
percent to 15 percent of total funds. H.R. 2 would add a 
requirement that state applications include a plan for state 
and local agency coordination.
    Compehensive School Reform. H.R. 2 would authorize $175 
million for a new Comprehensive School Reform Grant Program. 
The grants would be allocated among eligible states in 
proportion to the amounts received under the basic grant 
formula. Grants are to be awarded to local education agencies 
to support comprehensive school reform based on scientific 
research, with priority given to plans that implement Title I 
goals. to qualify, states would be required to demonstrate how 
funds would be allocated and how program success would be 
tracked. CBO assumes funds under this program would be spent at 
the same rate as the rest of the Title I funding.
    General Provisions. H.R. 2 would revise the general 
provisions section under Title I. It would require states 
localities to modify their accounting practices to accommodate 
fund consolidation for school-wide programs. It also would 
direct the Secretary to establish rulemaking procedures for 
academic accountability and assessments as well as for criteria 
for paraprofessionals. Finally, it would require the General 
Accounting Office (GAO) to conduct four studies on the issues 
of paraprofessionals, electronic transfer of records for 
migratory students, the impact of newly enacted flexibility on 
Title I, and the portability of Title I funds. Based on 
information provided by GAO, CBO estimates the total cost of 
these studies to be less than $500,000.

Title II--Magnet schools assistance and school choice

    Currently, Title V of ESEA authorizes three programs 
designed to promote educational equity. Part A of Title V 
authorizes grants to support magnet schools. Magnet schools 
offer a unique curriculum to attract students from outside the 
school's neighborhood, and their enrollment policies are 
generally designed to promote student diversity. Part A also 
authorizes innovative program grants to fund approaches to 
educational equity other than magnet schools. Part B of Title V 
authorizes the Women's Educational Equity Program (WEEP) 
established in 1974 to assist states in meeting the 
requirements of Title IX of the Education Amendments of 1972. 
Grants are made to states and localities for gender equity 
programs; the program also funds research efforts. The 
Assistance to Address School Dropout Problems Program is 
authorized under Part C but is currently an unfunded 
authorization.
    Title II of H.R. 2 would continue to authorize grants under 
Part A to qualifying magnet school programs, but it would 
discontinue the authorization of innovative program grants for 
nonmagnet programs. However, under the reauthorization of Part 
A, current recipients of innovative program grants would 
continue to receive funding for the remainder of their 3-year 
grant period. H.R. 2 would authorize $120 million for 2000 for 
all of Part A, an increase of $14 million over the current-law 
estimate.
    Title II of H.R. 2 would establish a new Title V 
competitive grant program similar to innovative programs 
grants, which would be discontinued. The new program would 
encourage innovative school choice models as alternatives to 
magnet and charter schools. Local Educational Agencies (LEAs) 
and State Educational Agencies (Seas) could apply for grants to 
demonstrate, develop, and implement programs such as satellite 
schools at parents' work sites, partnerships with institutions 
of higher education, or other programs that promote equal 
access to quality education. Funds received under this program 
could neither supplant nor supplement funding for charter or 
magnet schools. H.R. 2 would authorize $20 million in 2000 and 
such sums as may be necessary for the following 4 years. The 
program is similar in structure to existing competitive grant 
programs and CBO's estimate reflects a standard spending rate 
for such programs.
    Title II would repeal both the WEEP and the dropout 
assistance programs.

Title IV--Indian, Native Hawaiian, and Alaska Native education

    Under Title IX of ESEA, the Department of Education is 
authorized to provide education funding for Native Indian, 
Native Hawaiian, and Alaska Native students. Part A funds 
formula grants to LEAs, educational improvement initiatives 
within the Special Programs for Indian Children, and the 
National Research Activities program. Part A also authorizes an 
Adult Indian Education Program which has not been funded. Part 
B grants support curriculum development, professional training, 
and educational centers that promote the Native Hawaiian 
language and culture. Part C addresses the unique difficulties 
posed by geographical barriers of educating Alaska Natives by 
providing support of home-based schooling and programs to 
improve overall educational quality for this population.
    The Bureau or Indian Affairs (BIA) within the Department of 
the Interior also provides educational assistance to Native 
Indian children. BIA currently operates 185 tribal schools as 
authorized under Title XI of the Education Amendments of 1978. 
Several of these schools are home-living schools that serve 
students with exceptional needs. The Indian Self-Determination 
and Education Assistance Act authorized the BIA to transfer 
school management authority to tribal agencies via contracts.
    The majority of BIA funding supports the Indian School 
Equalization Program (ISEP) grants to BIA-operated and contract 
schools and administrative cost grants to assist operation of 
contract schools. The ISEP formula considers the unique needs 
and grades served by each school to determine the proportion of 
available funds that each school receives. In addition, BIA 
supports an Early Childhood Development Program and the 
establishment of Tribal Department of Education as authorized 
under Title XI.
    Authorization for these last two programs expired in 1999 
and GEPA extensions do not apply to programs under the 
Department of the Interior. All other BIA programs are 
permanently authorized under the Snyder Act of 1921 (Public Law 
65-95).
    Native Indian and Alaska Native Education Programs. H.R. 2 
would reauthorize Parts A and C of Title IX of ESEA. For fiscal 
year 2000, it would authorize $62 million for Indian Education 
Grants and $4 million for 2000 for the Special Children's and 
National Activities programs combined under Part A. For the 
2001-2004 period, these authorizations are for such sums as may 
be necessary. H.R. 2 would authorize $10 million for 2000 to 
continue the Native Alaskan education program and such sums as 
may be necessary for the following four year. H.R. 2 would 
introduce a limit of 5 percent on the percentage of Part A 
funds states can use for administrative purposes.
    H.R. 2 would allow schools receiving funds both under Part 
A and through the BIA to consolidate such funds through an 
inter-agency transfer. Schools would be required to submit a 
plan demonstrating how programs funded by each agency would be 
integrated. The Department of the Interior would be the lead 
agency for contract schools and the Department of Education 
would oversee funding for BIA-operated schools.
    H.R. 2 would repeal the authorizations for several unfunded 
programs under the Special Programs for Indian Children section 
of Part A, including funding for Indian Fellowships, Gifted and 
Talented, and Administrative Planning Grants programs. The 
Adult Indian Education Program would also be repealed.
    H.R. 2 would repeal the authorization for all of Part B, 
the Native Hawaiian Education Program.
    Bureau of Indian Affairs Program. Since BIA programs are 
permanently authorized at such sums as many be necessary, CBO 
assumes continued funding of these programs at their 1999 
levels adjusted for projected inflation.
    As mentioned above, the Early Childhood Development Program 
and the Tribal Departments of Education are exceptions, as 
their authorizations terminated in 1999. CBO assumes no funding 
for these programs for an additional five years. It would 
authorize $10 million for the early childhood development and 
$2 million for tribal departments in 2000.
    Title IV would also establish a minimum funding level for 
administrative cost grants to BIA-run schools. Based on such 
payments made to individual schools in 1999, CBO estimates this 
would increase costs by approximately $1 million in each of the 
five years.
    Title IV would expand the services authorized for home-
living schools to include therapeutic services. It would 
require the Secretary of the Interior to include therapeutic 
services in the list of programs for consideration when 
restructuring the ISEP grant formula. Because the formula 
affects the allocation of funding subject to total 
appropriations, CBO does not assume any net budgetary impact. 
However, this provision would result in a redistribution of 
funds toward home-living schools.
    Title IV would direct GAO to conduct a study to determine 
the adequacy of the funding formulas used by the BIA. CBO 
estimates this study would cost less that $250,000.

Title V--Gifted and talented children

    Part B of Title X of ESEA authorizes competitive grants to 
states for programs that identify and challenge gifted and 
talented students. Half of all grants must address targeting 
such students through nontraditional assessments. It also 
authorizes the National Center for Research and Development in 
the Education of Gifted and Talented Children and Youth.
    Title V of H.R. 2 would reauthorize the current grant 
program through 2004. It would authorize $10 million for 2000--
a $3 million increase from the 1999 funding level, adjusted for 
inflation--and such sums as necessary thereafter. The bill 
would also continue the National Center for Research and 
Development, providing a separate authorization of $1.95 
million for each of the next five years.
    In addition, title V would add a provision to replace the 
current competitive grant program with formula grants once the 
appropriation level reaches $50 million. Because we estimate 
authorization levels less than $50 million for each of the next 
five years, CBO assumes that this new program would not take 
effect within the authorization period.

Title VI--Rural education assistance

    Part J of Title X of ESEA authorizes the Urban and Rural 
Education Assistance Program to provide additional funding to 
support the special needs of these populations. The program has 
received no funding for either rural or urban assistance.
    Title VI of H.R. 2 would repeal the existing authorization 
and authorize a rural education system in its place. The 
program would consist of two parts: a formula grant program for 
small rural LEAs, and a competitive grant program for larger 
rural schools that serve high-poverty populations.
    For both parts, rural schools are defined as schools that 
exist in a county with a Beale Code of 6, 7, 8, or 9. The Beale 
Codes were established by the Department of Agriculture to 
designate counties along an urban-rural continuum. The scale 
ranges from 0 to 9, with zero being the most urban designation 
and nine the most rural. Rural designations for school 
districts have traditionally been based on other standards.
    Title VI of H.R. 2 would authorize the total amount 
appropriated for this program to be split evenly between the 
two parts. It would authorize a total sum of $125 million for 
2000 and such sums as may be necessary thereafter. Because of 
the requirement that both parts receive equal funding, CBO 
assumes the cost of each part to be $62.5 million for 2000. For 
the remaining years, CBO estimates full funding of part I and 
set part II-funding equal to that amount.
    CBO's estimate of full funding for part I grants for 2001 
through 2004 is based on the number of rural students less the 
combined funding level under five existing programs. Each 
eligible LEA is guaranteed a minimum award of $20,000. For each 
eligible student above 50, the LEA is eligible for an 
additional $100. This amount is reduced by the sum of funds 
received under the programs for Eisenhower Professional 
Development Grants, Safe and Drug Free Schools, Innovative 
Education Program Strategies, Bilingual and Immigrant 
Education, and 21st Century Community Learning Centers. The 
maximum any LEA can receive is $60,000.
    Using the Department of Agriculture Beale Codes, 1997-98 
enrollment data from the Department of Education's common core 
of data, and enrollment and average daily attendance 
projections from the National Center for Education Statistics, 
CBO estimates the annual cost of part I to be $119 million. 
CBO's estimate does not include a reduction in grant amounts 
for funding under the current programs. None of these programs 
are currently authorized beyond 2000 or are addressed in this 
bill. If such programs were to be authorized in separate 
legislation, that would significantly lower the estimated costs 
for this part. Moreover, the estimated costs for part II would 
be equally reduced.

Title VII--McKinney Homeless Education Improvements Act of 1999

    The Stewart B. McKinney Homeless Assistance Act provides 
assistance for homeless adults and youth. Part A authorizes 
programs for homeless adults. Part B authorizes the Education 
for Homeless Children and Youth Program.
    Title VII of H.R. 2 would reauthorize Part B of the 
McKinney Act, authorizing $36 million for 2000 and such sums as 
may be necessary for 2001 though 2004, a $7 million increase 
over the 1999 level, adjusted for inflation.
    Pay-as-you-go considerations: None.
    Estimated impact on state, local, and tribal governments: 
H.R. 2 would reauthorize certain sections of the Elementary and 
Secondary Education Act of 1965, which provide both formula and 
discretionary grants to state and local education agencies and 
tribal governments to support their efforts in improving 
educational opportunities and performance for specific 
populations of students. In general, any costs to state, local, 
or tribal governments as a result of enactment of this bill 
would be incurred voluntarily, as conditions of aid.
    Title III of the bill, the Teacher Liability Protection 
Act, would preempt state laws that prevent or restrict 
liability protection for teachers. Such a preemption of state 
law would be a mandate as defined by UMRA, but CBO estimates 
that costs, if any, to state, local, or tribal governments as a 
result of the mandate would not exceed the threshold as defined 
in that act ($50 million in 1996, adjusted annually for 
inflation).
    Estimated impact on the private sector: The bill contains 
no private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Audra Millen. Impact 
on State, Local, and Tribal Governments: Susan Sieg.
    Estimate approved by: Peter H. Fontaine, Deputy Assistance 
Director for Budget Analysis.

                                

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