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                  In the Senate of the United States,

                                                         June 14, 2001.
    Resolved, That the bill from the House of Representatives (H.R. 1) 
entitled ``An Act to close the achievement gap with accountability, 
flexibility, and choice, so that no child is left behind.'', do pass 
with the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Better Education 
for Students and Teachers Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Elementary and Secondary Education Act of 1965: Short title; 
                            purpose; definitions; uniform provisions.

           TITLE I--BETTER RESULTS FOR DISADVANTAGED CHILDREN

Sec. 101. Policy and purpose.
Sec. 102. Authorization of appropriations.
Sec. 103. Reservation and allocation for school improvement.

           Part A--Better Results for Disadvantaged Children

Sec. 111. State plans.
Sec. 112. Local educational agency plans.
Sec. 113. Eligible school attendance areas.
Sec. 114. Schoolwide programs.
Sec. 115. Targeted assistance schools.
Sec. 116. Pupil safety and family school choice.
Sec. 117. Assessment and local educational agency and school 
                            improvement.
Sec. 118. Assistance for school support and improvement.
Sec. 118A. Grants for enhanced assessment instruments.
Sec. 119. Parental involvement.
Sec. 120. Professional development.
Sec. 120A. Participation of children enrolled in private schools.
Sec. 120B. Early childhood education.
Sec. 120C. Limitations on funds.
Sec. 120D. Allocations.
Sec. 120E. School year extension activities.
Sec. 120F. Adequacy of funding of targeted grants to local educational 
                            agencies in fiscal years after fiscal year 
                            2001.

               Part B--Literacy for Children and Families

Sec. 121. Reading first.
Sec. 122. Early reading initiative.

                Part C--Education of Migratory Children

Sec. 131. Program purpose.
Sec. 132. State application.
Sec. 133. Comprehensive plan.
Sec. 134. Coordination.

    Part D--Initiatives for Neglected, Delinquent, or at Risk Youth

Sec. 141. Initiatives for neglected, delinquent, or at risk youth.

                 Part E--NATIONAL ASSESSMENT OF TITLE I

Sec. 151. National assessment of title I.

  Part F--21st Century Learning Centers; Comprehensive School Reform; 
                       School Dropout Prevention

Sec. 161. 21st century learning centers; comprehensive school reform.

           Part G--Education for Homeless Children and Youth

Sec. 171. Statement of policy.
Sec. 172. Grants for State and local activities.
Sec. 173. Local educational agency grants.
Sec. 174. Secretarial responsibilities.
Sec. 175. Definitions.
Sec. 176. Authorization of appropriations.
Sec. 177. Conforming amendments.
Sec. 178. Local educational agency spending audits.

                           TITLE II--TEACHERS

Sec. 201. Teacher quality.
Sec. 202. Teacher mobility.
Sec. 203. Modification of troops-to-teachers program.
Sec. 204. Professional development.
Sec. 205. Close Up Fellowship Program and National Student/Parent Mock 
                            Election.
Sec. 206. Rural technology education academies and early childhood 
                            educator professional development.
Sec. 207. Teachers and principals.

   TITLE III--MOVING LIMITED ENGLISH PROFICIENT STUDENTS TO ENGLISH 
                                FLUENCY

Sec. 301. Bilingual education.

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

Sec. 401. Amendment to the Elementary and Secondary Education Act of 
                            1965.
Sec. 402. Gun-free requirements.
Sec. 403. School safety and violence prevention.
Sec. 404. School safety enhancement.
Sec. 405. Amendments to the National Child Protection Act of 1993.
Sec. 406. Environmental tobacco smoke.
Sec. 407. Grants to reduce alcohol abuse.
Sec. 408. Mentoring programs.
Sec. 409. Study concerning the health and learning impacts of 
                            dilapidated or environmentally unhealthy 
                            public school buildings on America's 
                            children and the healthy and high 
                            performance schools program.
Sec. 410. Amendment to the Individuals with Disabilities Education Act.

             TITLE V--PUBLIC SCHOOL CHOICE AND FLEXIBILITY

Sec. 501. Public school choice and flexibility.
Sec. 502. Empowering parents.

           TITLE VI--PARENTAL INVOLVEMENT AND ACCOUNTABILITY

Sec. 601. Parental involvement and accountability.
Sec. 602. Guidelines for student privacy.

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

Sec. 701. Programs.
Sec. 702. Conforming amendments.

                         TITLE VIII--IMPACT AID

Sec. 801. Eligibility under section 8003 for certain heavily impacted 
                            local educational agencies.

                           TITLE IX--REPEALS

Sec. 901. Repeals.

                   TITLE X--MISCELLANEOUS PROVISIONS

Sec. 1001. Independent evaluation.
Sec. 1002. Helping children succeed by fully funding the Individuals 
                            with Disabilities Education Act (IDEA).
Sec. 1003. Sense of the Senate; authorization of appropriations for 
                            title II of the Elementary and Secondary 
                            Education Act of 1965.
Sec. 1004. Sense of the Senate regarding education opportunity tax 
                            relief.
Sec. 1005. Sense of the Senate regarding tax relief for elementary and 
                            secondary educators.
Sec. 1006. Sense of the Senate; authorization of appropriations for 
                            title III of the Elementary and Secondary 
                            Education Act of 1965.
Sec. 1007. Grants for the teaching of traditional American history as a 
                            separate subject.
Sec. 1008. Study and information.
Sec. 1009. Sense of the Senate regarding transmittal of S. 27 to House 
                            of Representatives.
Sec. 1010. Sense of the Senate; authorization of appropriations for 
                            title I of the Elementary and Secondary 
                            Education Act of 1965.
Sec. 1011. Excellence in economic education.
Sec. 1012. Loan forgiveness for Head Start teachers.
Sec. 1013. Sense of the Senate regarding the benefits of music and arts 
                            education.
Sec. 1014. Sense of the Senate concerning postal rates for educational 
                            materials.
Sec. 1015. The study of the Declaration of Independence, United States 
                            Constitution, and the Federalist Papers.
Sec. 1016. Study and recommendation with respect to sexual abuse in 
                            schools.
Sec. 1017. Sense of Senate on the percentage of Federal education 
                            funding that is spent in the classroom.
Sec. 1018. Sense of the Senate regarding Bible teaching in public 
                            schools.
Sec. 1019. Senior opportunities.
Sec. 1020. Impact aid payments relating to Federal acquisition of real 
                            property.
Sec. 1021. Impact aid technical amendments.
Sec. 1022. Sense of the Senate regarding science education.
Sec. 1023. School facility modernization grants.
Sec. 1024. Department of Education campaign to promote access of Armed 
                            Forces recruiters to student directory 
                            information.
Sec. 1025. Military recruiting on campus.
Sec. 1026. Maintaining funding for the Individuals with Disabilities 
                            Education Act.
Sec. 1027. School resource officer projects.
Sec. 1028. Boys and Girls Clubs of America.
Sec. 1029. Federal income tax incentive study.
Sec. 1030. Carl D. Perkins Vocational and Technical Education Act of 
                            1998.
Sec. 1031. Sense of Congress on enhancing awareness of the 
                            contributions of veterans to the Nation.
Sec. 1032. Technical amendment to the Kids 2000 Act.
Sec. 1033. Pest management in schools.

                      TITLE XI--TEACHER PROTECTION

Sec. 1101. Teacher protection.

            TITLE XII--NATIVE AMERICAN EDUCATION IMPROVEMENT

Sec. 1201. Short title.

       Subtitle A--Amendments to the Education Amendments of 1978

Sec. 1211. Amendments to the Education Amendments of 1978.

          Subtitle B--Tribally Controlled Schools Act of 1988

Sec. 1221. Tribally controlled schools.
Sec. 1222. Lease payments by the Ojibwa Indian School.
Sec. 1223. Enrollment and general assistance payments.

          TITLE XIII--EQUAL ACCESS TO PUBLIC SCHOOL FACILITIES

Sec. 1301. Short title.
Sec. 1302. Equal access.
Sec. 1303. Effective date.

                TITLE XIV--INDIVIDUALS WITH DISABILITIES

Sec. 1401. Discipline.
Sec. 1402. Procedural safeguards.
Sec. 1403. Alternative education for children with disabilities.

           TITLE XV--EQUAL ACCESS TO PUBLIC SCHOOL FACILITIES

Sec. 1501. Short title.
Sec. 1502. Equal access.

         TITLE XVI--EDUCATION PROGRAMS OF NATIONAL SIGNIFICANCE

Sec. 1601. Amendment to the Elementary and Secondary Education Act of 
                            1965.

         TITLE XVII--JOHN H. CHAFEE ENVIRONMENTAL EDUCATION ACT

Sec. 1701. Short title.
Sec. 1702. Office of Environmental Education.
Sec. 1703. Environmental education grants.
Sec. 1704. John H. Chafee Memorial Fellowship Program.
Sec. 1705. National environmental education awards.
Sec. 1706. Environmental Education Advisory Council and Task Force.
Sec. 1707. National Environmental Learning Foundation.
Sec. 1708. Theodore Roosevelt Environmental Stewardship Grant Program.
Sec. 1709. Information standards.
Sec. 1710. Authorization of appropriations.

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. ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965: SHORT TITLE; 
              PURPOSE; DEFINITIONS; UNIFORM PROVISIONS.

    The Act (20 U.S.C. 6301 et seq.) is amended--
            (1) in the heading for section 1, by striking ``table of 
        contents'' and inserting ``short title''; and
            (2) by adding after section 1 the following:

``SEC. 2. PURPOSE.

    ``It is the purpose of this Act to support programs and activities 
that will improve the Nation's schools and enable all children to 
achieve high standards.

``SEC. 3. DEFINITIONS.

    ``Except as otherwise provided, in this Act:
            ``(1) Average daily attendance.--
                    ``(A) In general.--Except as provided otherwise by 
                State law or this paragraph, the term `average daily 
                attendance' means--
                            ``(i) the aggregate number of days of 
                        attendance of all students during a school 
                        year; divided by
                            ``(ii) the number of days school is in 
                        session during such school year.
                    ``(B) Conversion.--The Secretary shall permit the 
                conversion of average daily membership (or other 
                similar data) to average daily attendance for local 
                educational agencies in States that provide State aid 
                to local educational agencies on the basis of average 
                daily membership or such other data.
                    ``(C) Special rule.--If the local educational 
                agency in which a child resides makes a tuition or 
                other payment for the free public education of the 
                child in a school located in another school district, 
                the Secretary shall, for purposes of this Act--
                            ``(i) consider the child to be in 
                        attendance at a school of the agency making 
                        such payment; and
                            ``(ii) not consider the child to be in 
                        attendance at a school of the agency receiving 
                        such payment.
                    ``(D) Children with disabilities.--If a local 
                educational agency makes a tuition payment to a private 
                school or to a public school of another local 
                educational agency for a child with a disability, as 
                defined in section 602 of the Individuals with 
                Disabilities Education Act, the Secretary shall, for 
                the purposes of this Act, consider such child to be in 
                attendance at a school of the agency making such 
                payment.
            ``(2) Average per-pupil expenditure.--The term `average 
        per-pupil expenditure' means, in the case of a State or of the 
        United States--
                    ``(A) without regard to the source of funds--
                            ``(i) the aggregate current expenditures, 
                        during the third fiscal year preceding the 
                        fiscal year for which the determination is made 
                        (or, if satisfactory data for that year are not 
                        available, during the most recent preceding 
                        fiscal year for which satisfactory data are 
                        available) of all local educational agencies in 
                        the State or, in the case of the United States 
                        for all States (which, for the purpose of this 
                        paragraph, means the 50 States and the District 
                        of Columbia); plus
                            ``(ii) any direct current expenditures by 
                        the State for the operation of such agencies; 
                        divided by
                    ``(B) the aggregate number of children in average 
                daily attendance to whom such agencies provided free 
                public education during such preceding year.
            ``(3) Child.--The term `child' means any person within the 
        age limits for which the State provides free public education.
            ``(4) Community-based organization.--The term `community-
        based organization' means a public or private nonprofit 
        organization of demonstrated effectiveness that--
                    ``(A) is representative of a community or 
                significant segments of a community; and
                    ``(B) provides educational or related services to 
                individuals in the community.
            ``(5) Consolidated local application.--The term 
        `consolidated local application' means an application submitted 
        by a local educational agency pursuant to section 5505.
            ``(6) Consolidated local plan.--The term `consolidated 
        local plan' means a plan submitted by a local educational 
        agency pursuant to section 5505.
            ``(7) Consolidated state application.--The term 
        `consolidated State application' means an application submitted 
        by a State educational agency after consultation with the 
        Governor pursuant to section 5502.
            ``(8) Consolidated state plan.--The term `consolidated 
        State plan' means a plan submitted by a State educational 
        agency after consultation with the Governor pursuant to section 
        5502.
            ``(9) County.--The term `county' means one of the divisions 
        of a State used by the Secretary of Commerce in compiling and 
        reporting data regarding counties.
            ``(10) Covered program.--The term `covered program' means 
        each of the programs authorized by--
                    ``(A) part A of title I;
                    ``(B) part C of title I;
                    ``(C) part C of title II;
                    ``(D) part A of title IV (other than section 4114); 
                and
                    ``(E) subpart 4 of part B of title V.
            ``(11) Current expenditures.--The term `current 
        expenditures' means expenditures for free public education--
                    ``(A) including expenditures for administration, 
                instruction, attendance and health services, pupil 
                transportation services, operation and maintenance of 
                plant, fixed charges, and net expenditures to cover 
                deficits for food services and student body activities; 
                but
                    ``(B) not including expenditures for community 
                services, capital outlay, and debt service, or any 
                expenditures made from funds received under subpart 4 
                of part B of title V.
            ``(12) Department.--The term `Department' means the 
        Department of Education.
            ``(13) Educational service agency.--The term `educational 
        service agency' means a regional public multiservice agency 
        authorized by State statute to develop, manage, and provide 
        services or programs to local educational agencies.
            ``(14) Elementary school.--The term `elementary school' 
        means a nonprofit institutional day or residential school, 
        including a public elementary charter school, that provides 
        elementary education, as determined under State law.
            ``(15) Free public education.--The term `free public 
        education' means education that is provided--
                    ``(A) at public expense, under public supervision 
                and direction, and without tuition charge; and
                    ``(B) as elementary school or secondary school 
                education as determined under applicable State law, 
                except that such term does not include any education 
                provided beyond grade 12.
            ``(16) Gifted and talented.--The term `gifted and 
        talented', when used with respect to students, children or 
        youth, means students, children or youth who give evidence of 
        high performance capability in areas such as intellectual, 
        creative, artistic, or leadership capacity, or in specific 
        academic fields, and who require services or activities not 
        ordinarily provided by the school in order to fully develop 
        such capabilities.
            ``(17) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 101 of the Higher Education Act of 1965.
            ``(18) Local educational agency.--
                    ``(A) In general.--The term `local educational 
                agency' means a public board of education or other 
                public authority legally constituted within a State for 
                either administrative control or direction of, or to 
                perform a service function for, public elementary 
                schools or secondary schools in a city, county, 
                township, school district, or other political 
                subdivision of a State, or for such combination of 
                school districts or counties as are recognized in a 
                State as an administrative agency for the State's 
                public elementary or secondary schools.
                    ``(B) Administrative control and direction.--The 
                term includes any other public institution or agency 
                having administrative control and direction of a public 
                elementary school or secondary school.
                    ``(C) BIA schools.--The term includes an elementary 
                school or secondary school funded by the Bureau of 
                Indian Affairs but only to the extent that such 
                inclusion makes such school eligible for programs for 
                which specific eligibility is not provided to such 
                school in another provision of law and such school does 
                not have a student population that is smaller than the 
                student population of the local educational agency 
                receiving assistance under this Act with the smallest 
                student population, except that such school shall not 
                be subject to the jurisdiction of any State educational 
                agency other than the Bureau of Indian Affairs.
            ``(19) Mentoring.--The term `mentoring', when used with 
        respect to mentoring other than teacher mentoring, means a 
        program in which an adult works with a child or youth on a 1-
        to-1 basis, establishing a supportive relationship, providing 
        academic assistance, and introducing the child or youth to new 
        experiences that enhance the child or youth's ability to excel 
        in school and become a responsible citizen.
            ``(20) Other staff.--The term `other staff' means pupil 
        services personnel, librarians, career guidance and counseling 
        personnel, education aides, and other instructional and 
        administrative personnel.
            ``(21) Outlying area.--The term `outlying area' means the 
        United States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and for the 
        purpose of section 1121 and any other discretionary grant 
        program under this Act, the Republic of the Marshall Islands, 
        the Federated States of Micronesia, and the Republic of Palau.
            ``(22) Parent.--The term `parent' includes a legal guardian 
        or other person standing in loco parentis.
            ``(23) Parental involvement.--The term `parental 
        involvement' means the participation of parents in regular, 
        two-way, and meaningful communication, including ensuring--
                    ``(A) that parenting skills are promoted and 
                supported;
                    ``(B) that parents play an integral role in 
                assisting student learning;
                    ``(C) that parents are welcome in the schools;
                    ``(D) that parents are included in decision-making 
                and advisory committees; and
                    ``(E) the carrying out of other activities 
                described in section 1118.
            ``(24) Public telecommunications entity.--The term `public 
        telecommunication entity' has the same meaning given to such 
        term in section 397 of the Communications Act of 1934.
            ``(25) Pupil services personnel; pupil services.--
                    ``(A) Pupil services personnel.--The term `pupil 
                services personnel' means school counselors, school 
                social workers, school psychologists, and other 
                qualified professional personnel involved in providing 
                assessment, diagnosis, counseling, educational, 
                therapeutic, and other necessary services (including 
                related services as such term is defined in section 602 
                of the Individuals with Disabilities Education Act) as 
                part of a comprehensive program to meet student needs.
                    ``(B) Pupil services.--The term `pupil services' 
                means the services provided by pupil services 
                personnel.
            ``(26) Scientifically based research.--The term 
        `scientifically based research' used with respect to an 
        activity or a program, means an activity based on specific 
        strategies and implementation of such strategies that, based on 
        theory, research and evaluation, are effective in improving 
        student achievement and performance and other program 
        objectives.
            ``(27) Secondary school.--The term `secondary school' means 
        a nonprofit institutional day or residential school, including 
        a public secondary charter school, that provides secondary 
        education, as determined under State law, except that such term 
        does not include any education beyond grade 12.
            ``(28) Secretary.--The term `Secretary' means the Secretary 
        of Education.
            ``(29) State.--The term `State' means each of the 50 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, and each of the outlying areas.
            ``(30) State educational agency.--The term `State 
        educational agency' means the agency primarily responsible for 
        the State supervision of public elementary schools and 
        secondary schools.
            ``(31) Teacher mentoring.--The term `teacher mentoring' 
        means activities that--
                    ``(A) consist of structured guidance and regular 
                and ongoing support for beginning teachers, that--
                            ``(i) are designed to help the teachers 
                        continue to improve their practice of teaching 
                        and to develop their instructional skills; and
                            ``(ii) as part of a multiyear, 
                        developmental induction process--
                                    ``(I) involve the assistance of a 
                                mentor teacher and other appropriate 
                                individuals from a school, local 
                                educational agency, or institution of 
                                higher education; and
                                    ``(II) may include coaching, 
                                classroom observation, team teaching, 
                                and reduced teaching loads; and
                    ``(B) may include the establishment of a 
                partnership by a local educational agency with an 
                institution of higher education, another local 
                educational agency, a teacher organization, or another 
                organization.
            ``(32) Technology.--The term `technology' means state-of-
        the-art technology products and services, such as closed 
        circuit television systems, educational television and radio 
        programs and services, cable television, satellite, copper and 
        fiber optic transmission, computer hardware and software, 
        servers and storage devices, video and audio laser and CD-ROM 
        discs, video and audio tapes, web-based and other digital 
        learning resources, including online classes, interactive 
        tutorials, and interactive tools and virtual learning 
        environments, hand-held devices, wireless technology, voice 
        recognition systems, and high-quality digital video, distance 
        learning networks, visualization, modeling, and simulation 
        software, and learning focused digital libraries and 
        information retrieval systems.

``SEC. 4. MAINTENANCE OF EFFORT.

    ``(a) In General.--A local educational agency may receive funds 
under a covered program for any fiscal year only if the State 
educational agency finds that either the combined fiscal effort per 
student or the aggregate expenditures of such agency and the State with 
respect to the provision of free public education by such agency for 
the preceding fiscal year was not less than 90 percent of such combined 
fiscal effort or aggregate expenditures for the second preceding fiscal 
year.
    ``(b) Reduction in Case of Failure To Meet.--
            ``(1) In general.--The State educational agency shall 
        reduce the amount of the allocation of funds under a covered 
        program in any fiscal year in the exact proportion to which a 
        local educational agency fails to meet the requirement of 
        subsection (a) by falling below 90 percent of both the combined 
        fiscal effort per student and aggregate expenditures (using the 
        measure most favorable to such local agency).
            ``(2) Special rule.--No such lesser amount shall be used 
        for computing the effort required under subsection (a) for 
        subsequent years.
    ``(c) Waiver.--The Secretary may waive the requirements of this 
section if the Secretary determines that such a waiver would be 
equitable due to--
            ``(1) exceptional or uncontrollable circumstances such as a 
        natural disaster; or
            ``(2) a precipitous decline in the financial resources of 
        the local educational agency.

``SEC. 5. PROHIBITION REGARDING STATE AID.

    ``A State shall not take into consideration payments under this Act 
(other than under title VIII) in determining the eligibility of any 
local educational agency in such State for State aid, or the amount of 
State aid, with respect to free public education of children.

``SEC. 6. PARTICIPATION BY PRIVATE SCHOOL CHILDREN AND TEACHERS.

    ``(a) Private School Participation.--
            ``(1) In general.--Except as otherwise provided in this 
        Act, to the extent consistent with the number of eligible 
        children in a State educational agency, local educational 
        agency, or educational service agency or consortium of such 
        agencies receiving financial assistance under a program 
        specified in subsection (b), who are enrolled in private 
        elementary and secondary schools in such agency or consortium, 
        such agency or consortium shall, after timely and meaningful 
        consultation with appropriate private school officials provide, 
        on an equitable basis, such children special educational 
        services or other benefits under such program, and provide 
        their teachers and other education personnel serving such 
        children training and professional development services under 
        such program.
            ``(2) Secular, neutral, and nonideological services or 
        benefits.--Educational services or other benefits, including 
        materials and equipment, provided under this section, shall be 
        secular, neutral, and nonideological.
            ``(3) Special rule.--Educational services and other 
        benefits provided under this section for such private school 
        children, teachers, and other educational personnel shall be 
        equitable in comparison to services and other benefits for 
        public school children, teachers, and other educational 
        personnel participating in such program.
            ``(4) Expenditures.--Expenditures for educational services 
        and other benefits provided under this section to eligible 
        private school children, their teachers, and other educational 
        personnel serving such children shall be equal, taking into 
        account the number and educational needs of the children to be 
        served, to the expenditures for participating public school 
        children.
            ``(5) Provision of services.--Such agency or consortium 
        described in subsection (a)(1) may provide such services 
        directly or through contracts with public and private agencies, 
        organizations, and institutions.
    ``(b) Applicability.--
            ``(1) In general.--This section applies to programs under--
                    ``(A) subpart 2 of part B of title I;
                    ``(B) part C of title I (migrant education);
                    ``(C) parts A, (B) and C of title II;
                    ``(D) title III; and
                    ``(E) part A of title IV (other than section 4114).
            ``(2) Definition.--For the purposes of this section, the 
        term ``eligible children'' means children eligible for services 
        under a program described in paragraph (1).
    ``(c) Consultation.--
            ``(1) In general.--To ensure timely and meaningful 
        consultation, a State educational agency, local educational 
        agency, educational service agency or consortium of such 
        agencies shall consult with appropriate private school 
        officials during the design and development of the programs 
        under this Act, on issues such as--
                    ``(A) how the children's needs will be identified;
                    ``(B) what services will be offered;
                    ``(C) how and where the services will be provided; 
                and
                    ``(D) how the services will be assessed.
            ``(2) Timing.--Such consultation shall occur before the 
        agency or consortium makes any decision that affects the 
        opportunities of eligible private school children, teachers, 
        and other educational personnel to participate in programs 
        under this Act.
            ``(3) Discussion required.--Such consultation shall include 
        a discussion of service delivery mechanisms that the agency or 
        consortium could use to provide equitable services to eligible 
        private school children, teachers, administrators, and other 
        staff.
    ``(d) Public Control of Funds.--
            ``(1) In general.--The control of funds used to provide 
        services under this section, and title to materials, equipment, 
        and property purchased with such funds, shall be in a public 
        agency for the uses and purposes provided in this Act, and a 
        public agency shall administer such funds and property.
            ``(2) Provision of services.--(A) The provision of services 
        under this section shall be provided--
                    ``(i) by employees of a public agency; or
                    ``(ii) through contract by such public agency with 
                an individual, association, agency, or organization.
            ``(B) In the provision of such services, such employee, 
        person, association, agency, or organization shall be 
        independent of such private school and of any religious 
        organization, and such employment or contract shall be under 
        the control and supervision of such public agency.
            ``(C) Funds used to provide services under this section 
        shall not be commingled with non-Federal funds.

``SEC. 7. STANDARDS FOR BY-PASS.

    ``If, by reason of any provision of law, a State educational 
agency, local educational agency, educational service agency or 
consortium of such agencies is prohibited from providing for the 
participation in programs of children enrolled in, or teachers or other 
educational personnel from, private elementary and secondary schools, 
on an equitable basis, or if the Secretary determines that such agency 
or consortium has substantially failed or is unwilling to provide for 
such participation, as required by section 6, the Secretary shall--
            ``(1) waive the requirements of that section for such 
        agency or consortium; and
            ``(2) arrange for the provision of equitable services to 
        such children, teachers, or other educational personnel through 
        arrangements that shall be subject to the requirements of this 
        section and of sections 6, 8, and 9.

``SEC. 8. COMPLAINT PROCESS FOR PARTICIPATION OF PRIVATE SCHOOL 
              CHILDREN.

    ``(a) Procedures for Complaints.--The Secretary shall develop and 
implement written procedures for receiving, investigating, and 
resolving complaints from parents, teachers, or other individuals and 
organizations concerning violations of section 6 by a State educational 
agency, local educational agency, educational service agency, or 
consortium of such agencies. Such individual or organization shall 
submit such complaint to the State educational agency for a written 
resolution by the State educational agency within a reasonable period 
of time.
    ``(b) Appeals to the Secretary.--Such resolution may be appealed by 
an interested party to the Secretary not later than 30 days after the 
State educational agency resolves the complaint or fails to resolve the 
complaint within a reasonable period of time. Such appeal shall be 
accompanied by a copy of the State educational agency's resolution, and 
a complete statement of the reasons supporting the appeal. The 
Secretary shall investigate and resolve each such appeal not later than 
120 days after receipt of the appeal.

``SEC. 9. BY-PASS DETERMINATION PROCESS.

    ``(a) Review.--
            ``(1) In general.--(A) The Secretary shall not take any 
        final action under section 7 until the State educational 
        agency, local educational agency, educational service agency, 
        or consortium of such agencies affected by such action has had 
        an opportunity, for not less than 45 days after receiving 
        written notice thereof, to submit written objections and to 
        appear before the Secretary to show cause why that action 
        should not be taken.
            ``(B) Pending final resolution of any investigation or 
        complaint that could result in a determination under this 
        section, the Secretary may withhold from the allocation of the 
        affected State or local educational agency the amount estimated 
        by the Secretary to be necessary to pay the cost of those 
        services.
            ``(2) Petition for review.--(A) If such affected agency or 
        consortium is dissatisfied with the Secretary's final action 
        after a proceeding under paragraph (1), such agency or 
        consortium may, within 60 days after notice of such action, 
        file with the United States court of appeals for the circuit in 
        which such State is located a petition for review of that 
        action.
            ``(B) A copy of the petition shall be forthwith transmitted 
        by the clerk of the court to the Secretary.
            ``(C) The Secretary upon receipt of the copy of the 
        petition shall file in the court the record of the proceedings 
        on which the Secretary based this action, as provided in 
        section 2112 of title 28, United States Code.
            ``(3) Findings of fact.--(A) The findings of fact by the 
        Secretary, if supported by substantial evidence, shall be 
        conclusive, but the court, for good cause shown, may remand the 
        case to the Secretary to take further evidence and the 
        Secretary may then make new or modified findings of fact and 
        may modify the Secretary's previous action, and shall file in 
        the court the record of the further proceedings.
            ``(B) Such new or modified findings of fact shall likewise 
        be conclusive if supported by substantial evidence.
            ``(4) Jurisdiction.--(A) Upon the filing of such petition, 
        the court shall have jurisdiction to affirm the action of the 
        Secretary or to set such action aside, in whole or in part.
            ``(B) The judgment of the court shall be subject to review 
        by the Supreme Court of the United States upon certiorari or 
        certification as provided in section 1254 of title 28, United 
        States Code.
    ``(b) Determination.--Any determination by the Secretary under this 
section shall continue in effect until the Secretary determines, in 
consultation with such agency or consortium and representatives of the 
affected private school children, teachers, or other educational 
personnel that there will no longer be any failure or inability on the 
part of such agency or consortium to meet the applicable requirements 
of section 6 or any other provision of this Act.
    ``(c) Payment From State Allotment.--When the Secretary arranges 
for services pursuant to this section, the Secretary shall, after 
consultation with the appropriate public and private school officials, 
pay the cost of such services, including the administrative costs of 
arranging for those services, from the appropriate allocation or 
allocations under this Act.
    ``(d) Prior Determination.--Any by-pass determination by the 
Secretary under this Act as in effect on the day preceding the date of 
enactment of the Improving America's Schools Act of 1994 shall remain 
in effect to the extent the Secretary determines that such 
determination is consistent with the purpose of this section.

``SEC. 10. PROHIBITION AGAINST FUNDS FOR RELIGIOUS WORSHIP OR 
              INSTRUCTION.

    ``Nothing contained in this Act shall be construed to authorize the 
making of any payment under this Act for religious worship or 
instruction.

``SEC. 11. APPLICABILITY TO HOME SCHOOLS.

    ``Nothing in this Act shall be construed to affect home schools.

``SEC. 12. GENERAL PROVISION REGARDING NONRECIPIENT NONPUBLIC SCHOOLS.

    ``Nothing in this Act shall be construed to permit, allow, 
encourage, or authorize any Federal control over any aspect of any 
private, religious, or home school, whether or not a home school is 
treated as a private school or home school under State law. This 
section shall not be construed to bar private, religious, or home 
schools from participation in programs or services under this Act.

``SEC. 13. SCHOOL PRAYER.

    ``Any State or local educational agency that is adjudged by a 
Federal court of competent jurisdiction to have willfully violated a 
Federal court order mandating that such local educational agency remedy 
a violation of the constitutional right of any student with respect to 
prayer in public schools, in addition to any other judicial remedies, 
shall be ineligible to receive Federal funds under this Act until such 
time as the local educational agency complies with such order. Funds 
that are withheld under this section shall not be reimbursed for the 
period during which the local educational agency was in willful 
noncompliance.

``SEC. 14. GENERAL PROHIBITIONS.

    ``(a) Prohibition.--None of the funds authorized under this Act 
shall be used--
            ``(1) to develop or distribute materials, or operate 
        programs or courses of instruction directed at youth that are 
        designed to promote or encourage, sexual activity, whether 
        homosexual or heterosexual;
            ``(2) to distribute or to aid in the distribution by any 
        organization of legally obscene materials to minors on school 
        grounds;
            ``(3) to provide sex education or HIV prevention education 
        in schools unless such instruction is age appropriate and 
        includes the health benefits of abstinence; or
            ``(4) to operate a program of condom distribution in 
        schools.
    ``(b) Local Control.--Nothing in this section shall be construed 
to--
            ``(1) authorize an officer or employee of the Federal 
        Government to mandate, direct, review, or control a State, 
        local educational agency, or schools' instructional content, 
        curriculum, and related activities;
            ``(2) limit the application of the General Education 
        Provisions Act;
            ``(3) require the distribution of scientifically or 
        medically false or inaccurate materials or to prohibit the 
        distribution of scientifically or medically true or accurate 
        materials; or
            ``(4) create any legally enforceable right.

``SEC. 15. PROHIBITION ON FEDERAL MANDATES, DIRECTION, AND CONTROL.

    ``Nothing in this Act shall be construed to authorize an officer or 
employee of the Federal Government to mandate, direct, or control a 
State, local educational agency, or school's curriculum, program of 
instruction, or allocation of State or local resources, or mandate a 
State or any subdivision thereof to spend any funds or incur any costs 
not paid for under this Act.

``SEC. 16. ADDITIONAL LIMITATIONS ON NATIONAL TESTING.

    ``(a) National Testing.--
            ``(1) In general.--Notwithstanding any other provision of 
        this Act or any other provision of law, and except as provided 
        in paragraph (2), no funds available to the Department or 
        otherwise available under this Act may be used for any purpose 
        relating to a nationwide test in reading, mathematics, or any 
        other subject, including test development, pilot testing, field 
        testing, test implementation, test administration, test 
        distribution, or any other purpose.
            ``(2) Exception.--Paragraph (1) shall not apply to the 
        following:
                    ``(A) The National Assessment of Educational 
                Progress carried out under sections 411 through 413 of 
                the Improving America's Schools Act of 1994 (20 U.S.C. 
                9010-9012).
                    ``(B) The Third International Math and Science 
                Study (TIMSS).
    ``(b) Mandatory National Testing or Certification of Teachers.--
Notwithstanding any other provision of this Act or any other provision 
of law, no funds available to the Department or otherwise available 
under this Act may be used for any purpose relating to a mandatory 
nationwide test or certification of teachers or education 
paraprofessionals, including any planning, development, implementation, 
or administration of such test or certification.
    ``(c) Development of Database of Personally Identifiable 
Information.--Nothing in this Act (other than section 1308(b)) shall be 
construed to authorize the development of a nationwide database of 
personally identifiable information on individuals involved in studies 
or other collections of data under this Act.

``SEC. 17. ADDITIONAL LIMITATIONS AND PROTECTIONS REGARDING PRIVATE, 
              RELIGIOUS, AND HOME SCHOOLS.

    ``(a) Applicability to Home Schools.--(1) Nothing in this Act shall 
be construed to affect home schools, whether or not a home school is 
treated as a home school or a private school under State law or to 
require any home schooled student to participate in any assessment 
referenced in this Act.
    ``(2) Construction of superseded provision.--Section 11 shall have 
no force or effect.
    ``(b) Appilicability to Private Schools.--Nothing in this Act shall 
be construed to affect any private school that does not receive funds 
or services under this Act, or to require any student who attends a 
private school that does not receive funds or services under this Act 
to participate in any assessment referenced in this Act.
    ``(c) Applicability to Private, Religions, and Home Schools of 
General Provision Regarding Recipient Nonpublic Schools.--
            ``(1) In general.--Nothing in this Act or any other Act 
        administered by the Secretary shall be construed to permit, 
        allow, encourage, or authorize any Federal control over any 
        aspect of any private, religious, or home school, whether or 
        not a home school is treated as a private school or home school 
        under State law. This section shall not be construed to bar 
        private, religious, and home schools from participation in 
        programs and services under this Act.
            ``(2) Construction of superseded provision.--Section 12 
        shall have no force or effect.
    ``(d) Applicability of Gun-Free School Provisions to Home 
Schools.--Notwithstanding any provision of part B of title IV, for 
purposes of that part, the term `school' shall not include a home 
school, regardless of whether or not a home school is treated as a 
private school or home school under State law.
    ``(e) State and Local Educational Agency Mandates Regarding Private 
and Home School Curricula.--Nothing in this Act shall be construed to 
require any State or local educational agency that receives funds under 
this Act from mandating, directing, or controlling the curriculum of a 
private or home school, regardless of whether or not a home school is 
treated as a private school or home school under State law, nor shall 
any funds under this Act be used for this purpose.

``SEC. 18. PROHIBITION ON DISCRIMINATION.

    ``Nothing in this Act shall be construed to require, authorize, or 
permit, the Secretary, or a State, local educational agency, or school 
to grant to a student, or deny or impose upon a student, any financial 
or educational benefit or burden, in violation of the fifth or 14th 
amendments to the Constitution or other law relating to discrimination 
in the provision of federally funded programs or activities.''.

           TITLE I--BETTER RESULTS FOR DISADVANTAGED CHILDREN

SEC. 101. POLICY AND PURPOSE.

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

``SEC. 1001. STATEMENT OF PURPOSE.

    ``The purpose of this title is to enable schools to provide 
opportunities for children served under this title to acquire the 
knowledge and skills contained in the challenging State content 
standards and to meet the challenging State student performance 
standards developed for all children. This purpose should be 
accomplished by--
            ``(1) ensuring high standards for all children and aligning 
        the efforts of States, local educational agencies, and schools 
        to help children served under this title to reach such 
        standards;
            ``(2) providing children an enriched and accelerated 
        educational program, including the use of schoolwide programs 
        or additional services that increase the amount and quality of 
        instructional time so that children served under this title 
        receive at least the classroom instruction that other children 
        receive;
            ``(3) promoting schoolwide reform and ensuring access of 
        children (from the earliest grades, including prekindergarten) 
        to effective instructional strategies and challenging academic 
        content that includes intensive complex thinking and problem-
        solving experiences;
            ``(4) significantly elevating the quality of instruction by 
        providing staff in participating schools with substantial 
        opportunities for professional development;
            ``(5) coordinating services under all parts of this title 
        with each other, with other educational services, and to the 
        extent feasible, with other agencies providing services to 
        youth, children, and families that are funded from other 
        sources;
            ``(6) affording parents substantial and meaningful 
        opportunities to participate in the education of their children 
        at home and at school;
            ``(7) distributing resources in amounts sufficient to make 
        a difference to local educational agencies and schools where 
        needs are greatest;
            ``(8) improving and strengthening accountability, teaching, 
        and learning by using State assessment systems designed to 
        measure how well children served under this title are achieving 
        challenging State student performance standards expected of all 
        children; and
            ``(9) providing greater decisionmaking authority and 
        flexibility to schools and teachers in exchange for greater 
        responsibility for student performance.''.

SEC. 102. 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.--
            ``(1) Short title.--This subsection may be cited as the 
        `Equal Educational Opportunity Act'.
            ``(2) Authorization.--For the purpose of carrying out part 
        A, other than section 1120(e), there are authorized to be 
        appropriated--
                    ``(A) $15,000,000,000 for fiscal year 2002;
                    ``(B) $18,240,000,000 for fiscal year 2003;
                    ``(C) $21,480,000,000 for fiscal year 2004;
                    ``(D) $24,720,000,000 for fiscal year 2005;
                    ``(E) $27,960,000,000 for fiscal year 2006;
                    ``(F) $31,200,000,000 for fiscal year 2007;
                    ``(G) $34,440,000,000 for fiscal year 2008;
                    ``(H) $37,680,000,000 for fiscal year 2009;
                    ``(I) $40,920,000,000 for fiscal year 2010; and
                    ``(J) $44,164,000,000 for fiscal year 2011.
    ``(b) Reading First.--
            ``(1) Even start.--For the purpose of carrying out subpart 
        1 of part B, there are authorized to be appropriated 
        $250,000,000 for fiscal year 2002 and such sums as may be 
        necessary for each of the 6 succeeding fiscal years.
            ``(2) Reading first.--For the purpose of carrying out 
        subpart 2 of part B, there are authorized to be appropriated 
        $900,000,000 for fiscal year 2002 and such sums as may be 
        necessary for each of the 6 succeeding fiscal years.
            ``(3) Early reading first.--For the purpose of carrying out 
        subpart 3 of part B, there are authorized to be appropriated 
        $75,000,000 for fiscal year 2002 and such sums as may be 
        necessary for each of the 6 succeeding fiscal years.
    ``(c) Education of Migratory Children.--For the purpose of carrying 
out part C, there are authorized to be appropriated $400,000,000 for 
fiscal year 2002 and such sums as may be necessary for each of the 6 
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 
$50,000,000 for fiscal year 2002 and such sums as may be necessary for 
each of the 6 succeeding fiscal years.
    ``(e) Capital Expenses.--For the purpose of carrying out section 
1120(e), there are authorized to be appropriated $15,000,000 for fiscal 
year 2002, $15,000,000 for fiscal year 2003, and $5,000,000 for fiscal 
year 2004.
    ``(f) Federal Activities.--
            ``(1) Section 1501.--For the purpose of carrying out 
        section 1501, there are authorized to be appropriated 
        $10,000,000 for fiscal year 2002 and such sums as may be 
        necessary for each of the 6 succeeding fiscal years.
            ``(2) Section 1502.--For the purpose of carrying out 
        section 1502, there are authorized to be appropriated 
        $25,000,000 for fiscal year 2002 and such sums as may be 
        necessary for each of the 6 succeeding fiscal years.
    ``(g) 21st Century Learning Centers.--For the purpose of carrying 
out part F, there are authorized to be appropriated $1,500,000,000 for 
fiscal year 2002 and such sums as may be necessary for each of the 6 
succeeding fiscal years.
    ``(h) Comprehensive School Reform.--For the purpose of carrying out 
part G, there are authorized to be appropriated $250,000,000 for fiscal 
year 2002 and such sums as may be necessary for each of the 6 
succeeding fiscal years.
    ``(i) School Dropout Prevention.--For the purpose of carrying out 
part H, there are authorized to be appropriated $500,000,000 for fiscal 
year 2002 and such sums as may be necessary for each of the 6 
succeeding fiscal years, of which--
            ``(1) 10 percent shall be available to carry out subpart 1 
        of part H for each fiscal year; and
            ``(2) 90 percent shall be available to carry out subpart 2 
        of part H for each fiscal year.''.

SEC. 103. RESERVATION AND ALLOCATION FOR SCHOOL IMPROVEMENT.

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

``SEC. 1003. RESERVATION FOR SCHOOL IMPROVEMENT.

    ``(a) State Reservation.--Each State educational agency shall 
reserve 3.5 percent of the amount the State educational agency receives 
under subpart 2 of part A for each of the fiscal years 2002 and 2003, 
and 5 percent of that amount for each of the fiscal years 2004 through 
2008, 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 not less 
than 50 percent of that amount directly to local educational agencies 
for schools identified for school improvement, corrective action, or 
reconstitution under section 1116(c).
    ``(c) State Plan.--Each State educational agency, in consultation 
with the Governor, shall prepare a plan to carry out the 
responsibilities of the State under sections 1116 and 1117, including 
carrying out the State educational agency's statewide system of 
technical assistance and support for local educational agencies.''.

           PART A--BETTER RESULTS FOR DISADVANTAGED CHILDREN

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 desiring to receive a grant 
        under this part shall submit to the Secretary, by March 1, 
        2002, a plan prepared by the chief State school official, in 
        consultation with the Governor, that satisfies the requirements 
        of this section and that is coordinated with other programs 
        under this Act, the Individuals with Disabilities Education 
        Act, the Carl D. Perkins Vocational and Technical Education Act 
        of 1998, the Adult Education and Family Literacy Act, and the 
        Head Start Act.
            ``(2) Consolidation plan.--A State plan submitted under 
        paragraph (1) may be submitted as part of a consolidation plan 
        under section 5506.
    ``(b) Standards, Assessments, and Accountability.--
            ``(1) Challenging standards.--(A) 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, its local educational agencies, and 
        its schools to carry out this part, except that a State shall 
        not be required to submit such standards to the Secretary.
            ``(B) The standards required by subparagraph (A) shall be 
        the same standards that the State applies to all schools and 
        children in the State.
            ``(C) The State shall have the standards described in 
        subparagraph (A) for all public elementary school and secondary 
        school children in subjects determined by the State, but 
        including at least mathematics, reading or language arts, 
        history, and science, except that--
                    ``(i) any State which does not have standards in 
                mathematics or reading or language arts, for public 
                elementary school and secondary school children who are 
                not served under this part, on the date of enactment of 
                the Better Education for Students and Teachers Act 
                shall apply the standards described in subparagraph (A) 
                to such students not later than the beginning of the 
                school year 2002-2003; and
                    ``(ii) no State shall be required to meet the 
                requirements under this part relating to history or 
                science standards until the beginning of the 2005-2006 
                school year.
            ``(D) Standards under this paragraph shall include--
                    ``(i) challenging content standards in academic 
                subjects that--
                            ``(I) specify what children 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; and
                            ``(II) describe 2 levels of high 
                        performance, proficient and advanced, that 
                        determine how well children are mastering the 
                        material in the State content standards.
            ``(E) For the subjects in which students served under this 
        part will be taught, but for which a State is not required by 
        subparagraphs (A), (B), and (C) to develop standards, and has 
        not otherwise developed standards, the State plan shall 
        describe a strategy for ensuring that such students are taught 
        the same knowledge and skills and held to the same expectations 
        as are all children.
            ``(2) Accountability.--(A) Each State plan shall 
        demonstrate that the State has developed and is implementing a 
        single, statewide State accountability system that has been or 
        will be effective in ensuring that all local educational 
        agencies, elementary schools, and secondary schools make 
        adequate yearly progress as defined under subparagraphs (B) and 
        (D). Each State accountability system shall--
                    ``(i) be based on the standards and assessments 
                adopted under paragraphs (1) and (3) and take into 
                account the performance of all students;
                    ``(ii) be used for all schools or all local 
                educational agencies in the State, except that schools 
                and local educational agencies not participating under 
                this part are not subject to the requirements of 
                section 1116(c);
                    ``(iii) include performance indicators for local 
                educational agencies and schools to measure student 
                performance consistent with subparagraph (B); and
                    ``(iv) include sanctions and rewards, such as 
                bonuses or recognition, the State will use to hold 
                local educational agencies and schools accountable for 
                student achievement and performance and for ensuring 
                that the agencies and schools make adequate yearly 
                progress in accordance with the State's definition 
                under subparagraph (B).
            ``(B) Adequate yearly progress shall be defined in 
        accordance with subparagraph (D) and in a manner that--
                    ``(i) applies the same high standards of academic 
                performance to all students in the State;
                    ``(ii) is statistically valid and reliable;
                    ``(iii) results in continuous and substantial 
                academic improvement for all students;
                    ``(iv) measures the progress of schools and local 
                educational agencies based primarily on the assessments 
                described in paragraph (3);
                    ``(v) includes annual measurable objectives for 
                continuing and significant improvement in--
                            ``(I) the achievement of all students; and
                            ``(II) the achievement of economically 
                        disadvantaged students, students with 
                        disabilities, students with limited English 
                        proficiency, migrant students, students by 
                        racial and ethnic group, and students by 
                        gender, except that such disaggregation shall 
                        not be required in any 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;
                    ``(vi) includes a timeline for meeting the goal 
                that each group of students described in clause (v) 
                will meet or exceed the State's proficient level of 
                performance on the State assessment used for the 
                purposes of this section and section 1116 not later 
                than 10 years after the date of enactment of the Better 
                Education for Students and Teachers Act; and
                    ``(vii) includes school completion or graduation 
                rates for secondary school students and at least 1 
                other academic indicator, as determined by the State, 
                for elementary school students, except that inclusion 
                of such indicators shall not decrease the number of 
                schools or local educational agencies that would 
                otherwise be subject to identification for improvement 
                or corrective action if the indicators were not 
                included.
            ``(C)(i) Each State plan shall include a detailed 
        description of an objective system or formula that incorporates 
        and gives appropriate weight to each of the elements described 
        in subparagraph (B), including the progress of each of the 
        groups of students described in subparagraph (B)(v)(II), in 
        meeting the State's annual measurable objectives for continuing 
        and significant improvement under subparagraph (B)(v) and in 
        making progress toward the 10-year goal described in 
        subparagraph (B)(vi), and that is primarily based on academic 
        progress as demonstrated by the assessments described in 
        paragraph (3) in subjects for which assessments are required 
        under this section, except that the State shall give greater 
        weight to the groups--
                    ``(I) performing at a level furthest from the 
                proficient level; and
                    ``(II) that make the greatest improvement.
            ``(ii) The system or formula shall be subject to peer 
        review and approval by the Secretary under subsection (e). The 
        Secretary shall not approve the system or formula unless the 
        Secretary determines that the system or formula is sufficiently 
        rigorous and reliable to ensure continuous and significant 
        progress toward the goal of having all students proficient 
        within 10 years.
            ``(D) A State shall define adequate yearly progress for the 
        purpose of making determinations under this Act so that--
                    ``(i) a school, local educational agency, or State, 
                respectively, has failed to make adequate yearly 
                progress if the school, local educational agency, or 
                State, respectively, has not--
                            ``(I) made adequate progress as determined 
                        by the system or formula described in 
                        subparagraph (C); or
                            ``(II) for each group of students described 
                        in subparagraph (B)(v)(II) (other than those 
                        groups formed by gender and migrant status), 
                        achieved an increase of not less than 1 
                        percent, in the percentage of students served 
                        by the school, local educational agency, or 
                        State, respectively, meeting the State's 
                        proficient level of performance in reading or 
                        language arts and mathematics, for a school 
                        year compared to the preceding school year; and
                    ``(ii) for the purpose of making determinations 
                under clause (i) (I) or (II), the State may establish a 
                uniform procedure for averaging data from the school 
                year for which the determination is made and 1 or 2 
                school years preceding such school year.
            ``(E) Each State shall ensure that in developing its plan, 
        the State diligently seeks public comment from a range of 
        institutions and individuals in the State with an interest in 
        improved student achievement and performance, including 
        parents, teachers, local educational agencies, pupil services 
        personnel, administrators (including those described in other 
        parts of this title), and other staff, and that the State will 
        continue to make a substantial effort to ensure that 
        information under this part is widely known and understood by 
        the public, parents, teachers, and school administrators 
        throughout the State. Such efforts shall include, at a minimum, 
        publication of such information and explanatory text, broadly 
        to the public through such means as the Internet, the media, 
        and public agencies.
            ``(F) If a State educational agency provides evidence, 
        which 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, which 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--
                    ``(i) adopting standards and assessments that meet 
                the requirements of this subsection, on a statewide 
                basis, and limiting the applicability of the standards 
                and assessments to students served under this part; or
                    ``(ii) adopting and implementing policies that 
                ensure that each local educational agency in the State 
                which receives a grant under this part will adopt 
                content and student performance standards, and 
                assessments aligned with such standards, which meet all 
                of the criteria of this subsection.
            ``(G) Each State plan shall provide that in order for a 
        school to make adequate yearly progress under subparagraph (B), 
        not less than 95 percent of each group of students described in 
        subparagraph (B)(v)(II), who are enrolled in the school at the 
        time of the administration of the assessments, shall take the 
        assessments (in accordance with paragraphs (3)(H)(ii) and 
        (3)(I), and with accommodations, guidelines and alternate 
        assessments provided in the same manner as they are provided 
        under section 612(a)(17)(A) of the Individuals with 
        Disabilities Education Act) on which adequate yearly progress 
        is based, except that nothing in this subparagraph shall be 
        construed to limit the requirement under paragraph (3)(H)(i) to 
        assess all students.
            ``(H) Each State plan shall provide an assurance that the 
        State's accountability requirements for charter schools (as 
        defined in section 5120), such as requirements established 
        under the State's charter school law and overseen by the 
        State's authorized chartering agencies for such schools, are at 
        least as rigorous as the accountability requirements 
        established under this Act, such as the requirements regarding 
        standards, assessments, adequate yearly progress, school 
        identification, receipt of technical assistance, and corrective 
        action, that are applicable to other schools in the State under 
        this Act.
            ``(3) Assessments.--Each State plan shall demonstrate that 
        the State, in consultation with local educational agencies, has 
        a system of high-quality, yearly student assessments in 
        subjects that include, at a minimum, mathematics, reading or 
        language arts, and science that will be used as the primary 
        means of determining the yearly performance of each local 
        educational agency and school in enabling all children to meet 
        the State's student performance standards, except that no State 
        shall be required to meet the requirements of this part 
        relating to science assessments until the beginning of the 
        2007-2008 school year. Such assessments shall--
                    ``(A) be the same assessments used to measure the 
                performance of all children;
                    ``(B) be aligned with the State's challenging 
                content and student performance standards and provide 
                coherent information about student attainment of such 
                standards;
                    ``(C) be used for purposes for which such 
                assessments are valid and reliable, and be consistent 
                with relevant, nationally recognized professional and 
                technical standards for such assessments developed and 
                used by national experts on educational testing;
                    ``(D) be used only if the State provides to the 
                Secretary evidence from the test publisher or other 
                relevant sources that the assessment used is of 
                adequate technical quality for each purpose required 
                under this Act, and such evidence is made public by the 
                Secretary upon request;
                    ``(E) involve multiple up-to-date measures of 
                student performance, including measures that assess 
                higher order thinking skills and understanding;
                    ``(F)(i) beginning not later than school year 2001-
                2002, measure the proficiency of students served under 
                this part in mathematics and reading or language arts 
                and be administered not less than one time during--
                            ``(I) grades 3 through 5;
                            ``(II) grades 6 through 9; and
                            ``(III) grades 10 through 12;
                    ``(ii) beginning not later than school year 2002-
                2003, measure the proficiency of all students in 
                mathematics and reading or language arts and be 
                administered not less than one time during--
                            ``(I) grades 3 through 5;
                            ``(II) grades 6 through 9; and
                            ``(III) grades 10 through 12;
                    ``(iii) beginning not later than school year 2007-
                2008, measure the proficiency of all students in 
                science and be administered not less than one time 
                during--
                            ``(I) grades 3 through 5;
                            ``(II) grades 6 through 9; and
                            ``(III) grades 10 through 12;
                    ``(G) beginning not later than school year 2005-
                2006, measure the performance of students against the 
                challenging State content and student performance 
                standards annually in grades 3 through 8, and at least 
                once in grades 10 through 12, in at least mathematics 
                and reading or language arts, if the tests are aligned 
                with State standards, except that--
                            ``(i) a State may defer the commencement, 
                        or suspend the administration, of the 
                        assessments described in this paragraph, that 
                        were not required prior to the date of 
                        enactment of the Better Education for Students 
                        and Teachers Act, for 1 year, for each year for 
                        which the amount appropriated for grants under 
                        section 6204(c) is less than--
                                    ``(I) $370,000,000 for fiscal year 
                                2002;
                                    ``(II) $380,000,000 for fiscal year 
                                2003;
                                    ``(III) $390,000,000 for fiscal 
                                year 2004;
                                    ``(IV) $400,000,000 for fiscal year 
                                2005;
                                    ``(V) $410,000,000 for fiscal year 
                                2006;
                                    ``(VI) $420,000,000 for fiscal year 
                                2007; and
                                    ``(VII) $430,000,000 for fiscal 
                                year 2008; and
                            ``(ii) the Secretary may permit a State to 
                        commence the assessments, that were required by 
                        amendments made to this paragraph by the Better 
                        Education for Students and Teachers Act, in 
                        school year 2006-2007, if the State 
                        demonstrates to the Secretary that exceptional 
                        or uncontrollable circumstances, such as a 
                        natural disaster or a precipitous or unforeseen 
                        decline in the financial resources of the local 
                        educational agency or school, prevent full 
                        implementation of the assessments in school 
                        year 2005-2006 and that the State will 
                        administer such assessments during school year 
                        2006-2007;
                    ``(H) at the discretion of the State, measure the 
                proficiency of students in academic subjects not 
                described in subparagraphs (E), (F), and (G) in which 
                the State has adopted challenging content and student 
                performance standards;
                    ``(I) provide for--
                            ``(i) the participation in such assessments 
                        of all students;
                            ``(ii) the reasonable adaptations and 
                        accommodations for students with disabilities 
                        defined under section 602(3) of the Individuals 
                        with Disabilities Education Act necessary to 
                        measure the achievement of such students 
                        relative to State content and State student 
                        performance standards;
                            ``(iii) the inclusion of limited English 
                        proficient students who shall be assessed, to 
                        the extent practicable, in the language and 
                        form most likely to yield accurate and reliable 
                        information on what such students know and can 
                        do in content areas; and
                            ``(iv) notwithstanding clause (iii), the 
                        assessment (using tests written in English) of 
                        reading or language arts of any student who has 
                        attended school in the United States (excluding 
                        the Commonwealth of Puerto Rico) for 3 or more 
                        consecutive years, except that if a local 
                        educational agency demonstrates to the State 
                        educational agency that assessments in another 
                        language and form is likely to yield more 
                        accurate and reliable information on what such 
                        a student knows and can do, then the State 
                        educational agency, on a case-by-case basis, 
                        may waive the requirement to use tests written 
                        in English for those students and permit those 
                        students to be assessed in the appropriate 
                        language for one or more additional years, but 
                        only if the total number of students so 
                        assessed does not exceed one-third of the 
                        number of students in the State who were not 
                        required to be assessed using tests written in 
                        English in the previous year because the 
                        students were in the third year of the 3-year 
                        period described in this clause;
                    ``(J) beginning not later than school year 2002-
                2003, provide for the annual assessment of the 
                development of English proficiency (appropriate to 
                students' oral language, reading, and writing skills in 
                English) of students with limited English proficiency 
                who are served under this part or under title III and 
                who do not participate in the assessment described in 
                clause (iv) of subparagraph (I);
                    ``(K) include students who have attended schools in 
                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 in the local educational 
                agency in any academic year shall be used only in 
                determining the progress of the local educational 
                agency;
                    ``(L) produce individual student interpretive and 
                descriptive reports to be provided to parents of all 
                students, which shall include performance on 
                assessments aligned with State standards, and other 
                information on the attainment of student performance 
                standards, such as measures of student course work over 
                time, student attendance rates, student dropout rates, 
                and student participation in advanced level courses;
                    ``(M) enable results to be disaggregated within 
                each State, local educational agency, and school by 
                gender, by racial and ethnic group, by English 
                proficiency status, by migrant status, by students with 
                disabilities as compared to nondisabled students, and 
                by economically disadvantaged students as compared to 
                students who are not economically disadvantaged, except 
                that in the case of a local educational agency or a 
                school 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; 
                and
                    ``(N) enable itemized score analyses to be reported 
                to schools and local educational agencies in a way that 
                parents, teachers, schools, and local educational 
                agencies can interpret and address the specific 
                academic needs of individual students as indicated by 
                the students' performance on assessment items.
            ``(4) Special rules.--(A) Additional measures that do not 
        meet the requirements of paragraph (3)(C) may be included in 
        the assessments if a State includes in the State plan 
        information regarding the State's efforts to validate such 
        measures, but such measures shall not be the primary or sole 
        indicator of student progress toward meeting State standards.
            ``(B) Consistent with section 1112(b)(1)(D) States may 
        measure the proficiency of students in the academic subjects in 
        which a State has adopted challenging content and student 
        performance standards 1 or more times during grades 
        kindergarten through 2.
            ``(5) Language assessments.--Each State plan shall identify 
        the languages other than English that are present in the 
        participating student population and indicate the languages for 
        which yearly student assessments are not available and are 
        needed. The State shall make every effort to develop such 
        assessments and may request assistance from the Secretary if 
        linguistically accessible assessment measures are needed. 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.
            ``(6) Requirement.--Each State plan shall describe--
                    ``(A) how the State educational agency will help 
                each local educational agency and school affected by 
                the State plan to develop the capacity to comply with 
                each of the requirements of sections 1112(c)(4), 
                1114(b), and 1115(c) that is applicable to such agency 
                or school;
                    ``(B) the specific steps the State educational 
                agency will take to ensure that both schoolwide 
                programs and targeted assistance schools provide 
                instruction by highly qualified instructional staff as 
                required by sections 1114(b)(1)(C) and 1115(c)(1)(F), 
                including steps that the State educational agency will 
                take to ensure that poor and minority children are not 
                taught at higher rates than other children by 
                inexperienced, unqualified, or out of field teachers, 
                and the measures that the State educational agency will 
                use to evaluate and publicly report the progress of the 
                State educational agency with respect to such steps;
                    ``(C) how the State educational agency will develop 
                or identify high quality effective curriculum models 
                aligned with State standards and how the State 
                educational agency will disseminate such models to each 
                local educational agency and school within the State; 
                and
                    ``(D) such other factors the State deems 
                appropriate to provide students an opportunity to 
                achieve the knowledge and skills described in the 
                challenging content standards adopted by the State.
            ``(7) Ed-flex.--A State shall not be eligible for 
        designation under the Ed-Flex Partnership Act of 1999 until the 
        State develops assessments aligned with the State's content 
        standards in at least mathematics and reading or language arts.
            ``(8) Factors impacting student achievement.--Each State 
        plan shall include a description of the process that will be 
        used with respect to any school within the State that is 
        identified for school improvement or corrective action under 
        section 1116 to identify the academic and other factors that 
        have significantly impacted student achievement at the school.
    ``(c) Other Provisions To Support Teaching and Learning.--Each 
State plan shall contain assurances that--
            ``(1) the State will meet the requirements of subsection 
        (j)(1) and, beginning with the 2002-2003 school year, will 
        produce the annual State report cards described in such 
        subsection;
            ``(2) the State will, beginning in school year 2002-2003, 
        participate in annual State assessments of 4th and 8th grade 
        reading and mathematics under the National Assessment of 
        Educational Progress carried out under section 411(b)(2) of the 
        National Education Statistics Act of 1994 if the Secretary pays 
        the costs of administering such assessments, except that a 
        State in which less than 0.25 percent of the total number of 
        poor, school-aged children in the United States is located 
        shall be required to comply with the requirement of this 
        paragraph on a biennial basis;
            ``(3) the State educational agency will work with other 
        agencies, including educational service agencies or other local 
        consortia, and institutions to provide technical assistance to 
        local educational agencies and schools to carry out the State 
        educational agency's responsibilities under this part, 
        including technical assistance in providing professional 
        development under section 1119, technical assistance under 
        section 1117, and parental involvement under section 1118;
            ``(4)(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 
        agreements such as through a consortium of local educational 
        agencies;
            ``(5) the State educational agency will notify local 
        educational agencies and the public of the content and student 
        performance standards and assessments developed under this 
        section, and of the authority to operate schoolwide programs, 
        and will fulfill the State educational agency's 
        responsibilities regarding local educational agency improvement 
        and school improvement under section 1116, including such 
        corrective actions as are necessary;
            ``(6) the State educational agency will provide the least 
        restrictive and burdensome regulations for local educational 
        agencies and individual schools participating in a program 
        assisted under this part;
            ``(7) the State educational agency will inform the 
        Secretary and the public of how Federal laws, if at all, hinder 
        the ability of States to hold local educational agencies and 
        schools accountable for student academic performance;
            ``(8) the State educational agency will encourage schools 
        to consolidate funds from other Federal, State, and local 
        sources for schoolwide reform in schoolwide programs under 
        section 1114;
            ``(9) the State educational agency will modify or eliminate 
        State fiscal and accounting barriers so that schools can easily 
        consolidate funds from other Federal, State, and local sources 
        for schoolwide programs under section 1114;
            ``(10) the State educational agency has involved the 
        committee of practitioners established under section 1903(b) in 
        developing the plan and monitoring its implementation;
            ``(11) the State educational agency will inform local 
        educational agencies of the local educational agency's 
        authority to obtain waivers under subpart 3 of part B of title 
        V and, if the State is an Ed-Flex Partnership State, waivers 
        under the Education Flexibility Partnership Act of 1999; and
            ``(12) the State will coordinate activities funded under 
        this part with other Federal activities as appropriate.
    ``(d) Parental Involvement.--Each State plan shall describe how the 
State will support the collection and dissemination to local 
educational agencies and schools of effective parental involvement 
practices. Such practices shall--
            ``(1) be based on the most current research on effective 
        parental involvement that fosters achievement to high standards 
        for all children; and
            ``(2) be geared toward lowering barriers to greater 
        participation in school planning, review, and improvement 
        experienced by parents.
    ``(e) Peer Review and Secretarial Approval.--
            ``(1) Secretarial duties.--The Secretary shall--
                    ``(A) establish a peer review process to assist in 
                the review of State plans;
                    ``(B) appoint individuals to the peer review 
                process who are representative of parents, teachers, 
                State educational agencies, local educational agencies, 
                and who are familiar with educational standards, 
                assessments, accountability, and other diverse 
                educational needs of students;
                    ``(C) approve a State plan within 120 days of its 
                submission unless the Secretary determines that the 
                plan does not meet the requirements of this section;
                    ``(D) if the Secretary determines that the State 
                plan does not meet the requirements of subsection (a), 
                (b), or (c), immediately notify the State of such 
                determination and the reasons for such determination;
                    ``(E) not decline to approve a State's plan 
                before--
                            ``(i) offering the State an opportunity to 
                        revise its plan;
                            ``(ii) providing technical assistance in 
                        order to assist the State to meet the 
                        requirements under subsections (a), (b), and 
                        (c); and
                            ``(iii) providing a hearing; and
                    ``(F) have the authority to disapprove a State plan 
                for not meeting the requirements of this part, 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 State's content standards or to use specific 
                assessment instruments or items.
            ``(2) State revisions.--States shall revise their plans if 
        necessary to satisfy the requirements of this section.
    ``(f) Provision of Testing Results to Parents and Teachers.--Each 
State plan shall demonstrate how the State educational agency will 
assist local educational agencies in assuring that results from the 
assessments required under this section will be provided to parents and 
teachers as soon as is practicably possible after the test is taken, in 
a manner and form that is understandable and easily accessible to 
parents and teachers.
    ``(g) 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 its plan, such as the adoption of new 
        State content standards and State student performance 
        standards, new assessments, or a new definition of adequate 
        progress, the State shall submit such information to the 
        Secretary.
    ``(h) 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, local educational agency, or 
school's specific instructional content or student performance 
standards and assessments, curriculum, or program of instruction, as a 
condition of eligibility to receive funds under this part.
    ``(i) Penalty.--If a State fails to meet the statutory deadlines 
for demonstrating that it has in place challenging content standards 
and student performance standards, a set of high quality annual student 
assessments aligned to the standards, and a system for measuring and 
monitoring adequate yearly progress, the Secretary shall withhold funds 
for State administration and activities under section 1117 and take 
such other steps as are needed to assist the State in coming into 
compliance with this section until the Secretary determines that the 
State plan meets the requirements of this section.
    ``(j) Reports.--
            ``(1) Annual state report card.--
                    ``(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 State report card.
                    ``(B) Implementation.--The State report card shall 
                be--
                            ``(i) concise; and
                            ``(ii) presented in a format and manner 
                        that parents can understand, and which, to the 
                        extent practicable, shall be in a language the 
                        parents can understand.
                    ``(C) Public dissemination.--The State shall widely 
                disseminate the information described in subparagraph 
                (D) to all schools and local educational agencies in 
                the State and make the information broadly available 
                through public means, such as posting on the Internet, 
                distribution to the media, and distribution through 
                public agencies.
                    ``(D) Required information.--The State shall 
                include in its annual State report card--
                            ``(i) information, in the aggregate, on 
                        student achievement and performance at each 
                        proficiency level on the State assessments 
                        described in subsection (b)(3)(G) 
                        (disaggregated by race, ethnicity, gender, 
                        disability status, migrant status, English 
                        proficiency, and socioeconomic status);
                            ``(ii) the percentage of students not 
                        tested (disaggregated by the same categories 
                        described in clause (i));
                            ``(iii) the most recent 2-year trend in 
                        student performance in each subject area, and 
                        for each grade level, for which assessments 
                        under section 1111 are required;
                            ``(iv) aggregate information included in 
                        all other indicators used by the State to 
                        determine the adequate yearly progress of 
                        students in achieving State content and student 
                        performance standards;
                            ``(v) average 4-year graduation rates and 
                        annual school dropout rates disaggregated by 
                        race, ethnicity, gender, disability status, 
                        migrant status, English proficiency, and 
                        socioeconomic status, 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;
                            ``(vi) the percentage of teachers teaching 
                        with emergency or provisional credentials 
                        (disaggregated by high poverty and low poverty 
                        schools which for purposes of this clause means 
                        schools in which 50 percent or more, or less 
                        than 50 percent, respectively, of the students 
                        are from low-income families), and the 
                        percentage of classes not taught by highly 
                        qualified teachers in such high poverty 
                        schools;
                            ``(vii) the number and names of each school 
                        identified for school improvement, including 
                        schools identified under section 1116(c); and
                            ``(viii) information on the performance of 
                        local educational agencies in the State 
                        regarding making adequate yearly progress, 
                        including the number and percentage of schools 
                        in the State that did not make adequate yearly 
                        progress.
                    ``(E) Permissive information.--The State may 
                include in its annual State report card such other 
                information as the State believes will best provide 
                parents, students, and other members of the public with 
                information regarding the progress of each of the 
                State's public elementary schools and secondary 
                schools. Such information may include information 
                regarding--
                            ``(i) school attendance rates;
                            ``(ii) average class size in each grade;
                            ``(iii) academic achievement and gains in 
                        English proficiency of limited English 
                        proficient students;
                            ``(iv) the incidence of school violence, 
                        drug abuse, alcohol abuse, student suspensions, 
                        and student expulsions;
                            ``(v) the extent of parental participation 
                        in the schools;
                            ``(vi) parental involvement activities;
                            ``(vii) extended learning time programs 
                        such as after-school and summer programs;
                            ``(viii) the percentage of students 
                        completing advanced placement courses;
                            ``(ix) the percentage of students 
                        completing college preparatory curricula; and
                            ``(x) student access to technology in 
                        school.
                    ``(F) Protection of pupil rights.--In meeting the 
                requirements of this section, States, local educational 
                agencies, and schools shall comply with the provisions 
                of section 445 of the General Education Provisions Act.
            ``(2) Annual local educational agency report cards.--
                    ``(A) In general.--Not later than the beginning of 
                the 2002-2003 school year, a local educational agency 
                that receives assistance under this Act shall prepare 
                and disseminate an annual local educational agency 
                report card.
                    ``(B) Minimum requirements.--The State shall ensure 
                that each local educational agency collects appropriate 
                data and includes in the local educational agency's 
                annual report the information described in paragraph 
                (1)(D) as applied to the local educational agency and 
                each school served by the local educational agency, 
                and--
                            ``(i) in the case of a local educational 
                        agency--
                                    ``(I) the number and percentage of 
                                schools identified for school 
                                improvement and how long they have been 
                                so identified, including schools 
                                identified under section 1116(c); and
                                    ``(II) information that shows how 
                                students served by the local 
                                educational agency perform on the 
                                statewide assessment compared to 
                                students in the State as a whole; and
                            ``(ii) in the case of a school--
                                    ``(I) whether the school has been 
                                identified for school improvement; and
                                    ``(II) information that shows how 
                                the school's students performed on the 
                                statewide assessment compared to 
                                students in the local educational 
                                agency and the State as a whole.
                    ``(C) Other information.--A local educational 
                agency may include in its annual reports any other 
                appropriate information whether or not such information 
                is included in the annual State report.
                    ``(D) Data.--A local educational agency or school 
                shall only include in its annual local educational 
                agency report card data that is sufficient to yield 
                statistically reliable information, as determined by 
                the State, and does not reveal individually 
                identifiable information about an individual student.
                    ``(E) Public dissemination.--The local educational 
                agency shall, not later than the beginning of the 2002-
                2003 school year, publicly disseminate the information 
                described in this paragraph to all schools in the 
                school district and to all parents of students 
                attending those schools, and make the information 
                broadly available through public means, such as posting 
                on the Internet, distribution to the media, and 
                distribution through public agencies, except that if a 
                local educational agency issues a report card for all 
                students, the local educational agency may include the 
                information under this section as part of such report.
            ``(3) Preexisting report cards.--A State or local 
        educational agency that was providing public report cards on 
        the performance of students, schools, local educational 
        agencies, or the State, may continue to use those reports for 
        the purpose of this subsection, if such report is modified, as 
        may be necessary, to contain the information required by this 
        subsection.
            ``(4) Annual state report to the secretary.--Each State 
        receiving assistance under this Act shall report annually to 
        the Secretary, and make widely available within the State--
                    ``(A) beginning with school year 2001-2002, 
                information on the State's progress in developing and 
                implementing the assessments described in subsection 
                (b)(3);
                    ``(B) beginning not later than school year 2004-
                2005, information on the achievement of students on the 
                assessments required by that section, including the 
                disaggregated results for the categories of students 
                identified in subsection (b)(2)(B)(v)(II);
                    ``(C) the number and names of each school 
                identified for school improvement, including schools 
                identified under section 1116(c), the reason why each 
                school was so identified, and the measures taken to 
                address the performance problems of such schools; and
                    ``(D) in any year before the State begins to 
                provide the information described in subparagraph (B), 
                information on the results of student assessments 
                (including disaggregated results) required under this 
                section.
            ``(5) Parents right-to-know.--
                    ``(A) Qualifications.--A local educational agency 
                that receives funds under this part shall provide and 
                notify the parents of each student attending any school 
                receiving funds under this part that the parents may 
                request, and will be provided on request, information 
                regarding the professional qualifications of the 
                student's classroom teachers, including, at a minimum, 
                the following:
                            ``(i) Whether the teacher has met State 
                        qualification and licensing criteria for the 
                        grade levels and subject areas in which the 
                        teacher provides instruction.
                            ``(ii) Whether the teacher is teaching 
                        under emergency or other provisional status 
                        through which State qualification or licensing 
                        criteria have been waived.
                            ``(iii) The baccalaureate degree major of 
                        the teacher and any other graduate 
                        certification or degree held by the teacher, 
                        and the field of discipline of the 
                        certification or degree.
                            ``(iv) Whether the child is provided 
                        services by a paraprofessional and the 
                        qualifications of such paraprofessional.
                    ``(B) Additional information.--A school that 
                receives funds under this part shall provide to parents 
                information on the level of performance, of the 
                individual student for whom they are the parent, in 
                each of the State assessments as required under this 
                part.
                    ``(C) Format.--The notice and information provided 
                to parents shall be in an understandable and uniform 
                format.
            ``(6) Report to congress.--The Secretary shall report 
        annually to Congress--
                    ``(A) beginning with school year 2001-2002, 
                information on the State's progress in developing and 
                implementing the assessments described in subsection 
                (b)(3);
                    ``(B) beginning not later than school year 2004-
                2005, information on the achievement of students on the 
                assessments described in subsection (b)(3), including 
                the disaggregated results for the categories of 
                students described in subsection (b)(2)(B)(v)(II);
                    ``(C) in any year before the States begin to 
                provide the information described in paragraph (B) to 
                the Secretary, information on the results of student 
                assessments (including disaggregated results) required 
                under this section.
    ``(k) Privacy.--Information collected under this section shall be 
collected and disseminated in a manner that protects the privacy of 
individuals.
    ``(l) Technical Assistance.--The Secretary shall provide a State 
educational agency, at the State educational agency's request, 
technical assistance in meeting the requirements of this section, 
including the provision of advice by experts in the development of 
high-quality assessments, the setting of State performance standards, 
the development of measures of adequate yearly progress that are valid 
and reliable, and other relevant areas.
    ``(m) Voluntary Partnerships.--A State may enter into a voluntary 
partnership with another State to develop and implement the assessments 
and standards required under this section.''.

SEC. 112. LOCAL EDUCATIONAL AGENCY PLANS.

    Section 1112 (20 U.S.C. 6312) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``the Goals'' and 
                all that follows through ``section 14306'' 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''; and
                    (B) in paragraph (2), by striking ``14304'' and 
                inserting ``5504'';
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by striking 
                        ``and'' after the semicolon;
                            (ii) in subparagraph (C), by inserting 
                        ``and'' after the semicolon; and
                            (iii) by adding at the end the following:
                    ``(D) determine the literacy levels of first 
                graders and their needs for interventions, including a 
                description of how the agency will ensure that any such 
                assessments--
                            ``(i) are developmentally appropriate;
                            ``(ii) use multiple measures to provide 
                        information about the variety of skills that 
                        research has identified as leading to early 
                        reading; and
                            ``(iii) are administered to students in the 
                        language most likely to yield valid results;'';
                    (B) in paragraph (3), by inserting ``, which 
                strategy shall be coordinated with activities under 
                title II if the local educational agency receives funds 
                under title II'' before the semicolon;
                    (C) in paragraph (4)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``programs, 
                                vocational'' and inserting ``programs 
                                and vocational''; and
                                    (II) by striking ``, and school-to-
                                work transition programs''; and
                            (ii) in subparagraph (B)--
                                    (I) by striking ``served under part 
                                C'' and all that follows through 
                                ``1994''; and
                                    (II) by striking ``served under 
                                part D''; and
                    (D) by striking paragraph (9) and inserting the 
                following:
            ``(9) where appropriate, a description of how the local 
        educational agency will use funds under this part to support 
        early childhood education programs under section 1120B;
            ``(10) a description of the strategy the local educational 
        agency will use to implement effective parental involvement 
        under section 1118;
            ``(11) a description of the process that will be used with 
        respect to any school identified for school improvement or 
        corrective action that is served by the local educational 
        agency to determine the academic and other factors that have 
        significantly impacted student achievement at the school; and
            ``(12) where appropriate, a description of how the local 
        educational agency will use funds under this part to support 
        school year extension programs under section 1120C for low-
        performing schools.'';
            (3) by amending subsection (c) to read as follows:
    ``(c) Assurances.--Each local educational agency plan shall provide 
assurances that the local educational agency will--
            ``(1) inform eligible schools and parents of schoolwide 
        project authority;
            ``(2) provide technical assistance and support to 
        schoolwide programs;
            ``(3) work in consultation with schools as the schools 
        develop the schools' plans pursuant to section 1114 and assist 
        schools as the schools implement such plans or undertake 
        activities pursuant to section 1115 so that each school can 
        make adequate yearly progress toward meeting the State content 
        standards and State student performance standards;
            ``(4) fulfill such agency's school improvement 
        responsibilities under section 1116, including taking 
        corrective actions under section 1116(c)(5);
            ``(5) work in consultation with schools as the schools 
        develop and implement their plans or activities under sections 
        1118 and 1119;
            ``(6) coordinate and collaborate, to the extent feasible 
        and necessary as determined by the local educational agency, 
        with other agencies providing services to children, youth, and 
        families, including health and social services;
            ``(7) provide services to eligible children attending 
        private elementary and secondary schools in accordance with 
        section 1120, and timely and meaningful consultation with 
        private school officials regarding such services;
            ``(8) take into account the experience of model programs 
        for the educationally disadvantaged, and the findings of 
        relevant research indicating that services may be most 
        effective if focused on students in the earliest grades at 
        schools that receive funds under this part;
            ``(9) comply with the requirements of section 1119 
        regarding professional development;
            ``(10) inform eligible schools of the local educational 
        agency's authority to obtain waivers on the school's behalf 
        under subpart 3 of part B of title V, and if the State is an 
        Ed-Flex Partnership State, waivers under the Education 
        Flexibility Partnership Act of 1999;
            ``(11) ensure, through incentives for voluntary transfers, 
        the provision of professional development, recruitment 
        programs, or other effective strategies, that low-income 
        students and minority students are not taught at higher rates 
        than other students by unqualified, out-of-field, or 
        inexperienced teachers;
            ``(12) use the results of the student assessments required 
        under section 1111(b)(3), 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)(3) within 10 years of 
        the date of enactment of the Better Education for Students and 
        Teachers Act;
            ``(13) ensure that the results from the assessments 
        required under section 1111 will be provided to parents and 
        teachers as soon as is practicably possible after the test is 
        taken, in a manner and form that is understandable and easily 
        accessible to parents and teachers; and
            ``(14) make available to each school served by the agency 
        and assisted under this part models of high quality, effective 
        curriculum that are aligned with the State's standards and 
        developed or identified by the State.''; and
            (4) in subsection (e)--
                    (A) in paragraph (1), by striking ``, except that'' 
                and all that follows through ``finally approved by the 
                State educational agency''; and
                    (B) in paragraph (3)--
                            (i) by striking ``professional 
                        development''; and
                            (ii) by striking ``section 1119'' and 
                        inserting ``sections 1118 and 1119''.

SEC. 113. ELIGIBLE SCHOOL ATTENDANCE AREAS.

    Section 1113(b)(1) (20 U.S.C. 6313(b)(2)) is amended--
            (1) in subparagraph (B), by striking ``and'' after the 
        semicolon;
            (2) in subparagraph (C)(iii), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(D) designate and serve a school attendance area 
                or school that is not an eligible school attendance 
                area under subsection (a)(2), but that was an eligible 
                school attendance area and was served in the fiscal 
                year preceding the fiscal year for which the 
                determination is made, but only for 1 additional fiscal 
                year.''.

SEC. 114. SCHOOLWIDE PROGRAMS.

    Section 1114 (20 U.S.C. 6314) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--A local educational agency may use funds 
        under this part, together with other Federal, State, and local 
        funds, to upgrade the entire educational program of a school 
        that serves an eligible school attendance area in which not 
        less than 40 percent of the children are from low-income 
        families, or not less than 40 percent of the children enrolled 
        in the school are from such families, for the initial year of 
        the schoolwide program.''; and
                    (B) in paragraph (4)--
                            (i) by amending the heading to read as 
                        follows: ``Exemption from statutory and 
                        regulatory requirements.--''; and
                            (ii) by adding at the end the following:
            ``(C) A school that chooses to use funds from such other 
        programs under this section shall not be required to maintain 
        separate fiscal accounting records, by program, that identify 
        the specific activities supported by those particular funds as 
        long as the school maintains records that demonstrate that the 
        schoolwide program, considered as a whole, addresses the intent 
        and purposes of each of the programs that were consolidated to 
        support the schoolwide program.''; and
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B)(vii), by striking 
                        ``, if any, approved under title III of the 
                        Goals 2000: Educate America Act'';
                            (ii) in subparagraph (E), by striking ``, 
                        such as family literacy services'' and 
                        inserting ``(including activities described in 
                        section 1118), such as family literacy 
                        services, in-school volunteer opportunities, or 
                        parent membership on school-based leadership or 
                        management teams.''; and
                            (iii) by adding at the end the following:
                    ``(I) Coordination and integration of Federal, 
                State, and local services and programs, including 
                programs supported under this Act, violence prevention 
                programs, nutrition programs, housing programs, Head 
                Start, adult education, and job training.''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``Improving America's 
                                Schools Act of 1994'' and inserting 
                                ``Better Education for Students and 
                                Teachers Act'';
                                    (II) in clause (iv), by inserting 
                                ``in a language the family can 
                                understand'' after ``assessment 
                                results'';
                                    (III) in clause (vi), by striking 
                                ``and'' after the semicolon;
                                    (IV) in clause (vii), by striking 
                                the period and inserting ``; and''; and
                                    (V) by adding at the end the 
                                following:
                            ``(viii) describes how the school will 
                        coordinate and collaborate with other agencies 
                        providing services to children and families, 
                        including programs supported under this Act, 
                        violence prevention programs, nutrition 
                        programs, housing programs, Head Start, adult 
                        education, and job training.''; and
                            (ii) in subparagraph (C)--
                                    (I) in clause (i)(II), by striking 
                                ``Improving America's Schools Act of 
                                1994'' and inserting ''Better Education 
                                for Students and Teachers Act''; and
                                    (II) in clause (v), by striking 
                                ``the School-to-Work Opportunities Act 
                                of 1994''.

SEC. 115. TARGETED ASSISTANCE SCHOOLS.

    Section 1115 (20 U.S.C. 6315) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A)(ii), by striking ``, yet'' 
                and all that follows through ``setting''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (B), insert ``or in 
                        early childhood education services under this 
                        title,'' after ``program,''; and
                            (ii) in subparagraph (C)(i), by striking 
                        ``under part D (or its predecessor 
                        authority)''; and
            (2) in subsection (c)(1)--
                    (A) by amending subparagraph (G) to read as 
                follows:
                    ``(G) provide opportunities for professional 
                development with resources provided under this part, 
                and to the extent practicable, from other sources, for 
                teachers, principals, administrators, 
                paraprofessionals, pupil services personnel, and 
                parents, who work with participating children in 
                programs under this section or in the regular education 
                program;'';
                    (B) in subparagraph (H), by striking ``, such as 
                family literacy services'' and inserting ``(including 
                activities described in section 1118), such as family 
                literacy services, in-school volunteer opportunities, 
                or parent membership on school-based leadership or 
                management teams; and''; and
                    (C) by adding at the end the following:
                    ``(I) coordinate and integrate Federal, State, and 
                local services and programs, including programs 
                supported under this Act, violence prevention programs, 
                nutrition programs, housing programs, Head Start, adult 
                education, and job training.''.

SEC. 116. PUPIL SAFETY AND FAMILY SCHOOL CHOICE.

    Subpart 1 of part A of title I (20 U.S.C. 6311 et seq.) is amended 
by inserting after section 1115A (20 U.S.C. 6316) the following:

``SEC. 1115B. PUPIL SAFETY AND FAMILY SCHOOL CHOICE.

    ``(a) In General.--If a student is eligible to be served under 
section 1115(b), or attends a school eligible for a schoolwide program 
under section 1114, and--
            ``(1) becomes a victim of a violent criminal offense while 
        in or on the grounds of a public elementary school or secondary 
        school that the student attends and that receives assistance 
        under this part, then the local educational agency shall allow 
        such student to transfer to another public school or public 
        charter school in the same State as the school where the 
        criminal offense occurred, that is selected by the student's 
        parent unless allowing such transfer is prohibited--
                    ``(A) under the provisions of a State or local law; 
                or
                    ``(B) by a local educational agency policy that is 
                approved by a local school board; or
            ``(2) the public school that the student attends and that 
        receives assistance under this part has been designated as an 
        unsafe public school, then the local educational agency may 
        allow such student to transfer to another public school or 
        public charter school in the same State as the school where the 
        criminal offense occurred, that is selected by the student's 
        parent.
    ``(b) State Educational Agency Determinations.--
            ``(1) The State educational agency shall determine, based 
        upon State law, what actions constitute a violent criminal 
        offense for purposes of this section.
            ``(2) The State educational agency shall determine which 
        schools in the State are unsafe public schools.
            ``(3) The term `unsafe public schools' means a public 
        school that has serious crime, violence, illegal drug, and 
        discipline problems, as indicated by conditions that may 
        include high rates of--
                    ``(A) expulsions and suspensions of students from 
                school;
                    ``(B) referrals of students to alternative schools 
                for disciplinary reasons, to special programs or 
                schools for delinquent youth, or to juvenile court;
                    ``(C) victimization of students or teachers by 
                criminal acts, including robbery, assault and homicide;
                    ``(D) enrolled students who are under court 
                supervision for past criminal behavior;
                    ``(E) possession, use, sale or distribution of 
                illegal drugs;
                    ``(F) enrolled students who are attending school 
                while under the influence of illegal drugs or alcohol;
                    ``(G) possession or use of guns or other weapons;
                    ``(H) participation in youth gangs; or
                    ``(I) crimes against property, such as theft or 
                vandalism.
    ``(c) Transportation Costs.--The local educational agency that 
serves the public school in which the violent criminal offense occurred 
or that serves the designated unsafe public school may use funds 
provided under this part to provide transportation services or to pay 
the reasonable costs of transportation for the student to attend the 
school selected by the student's parent.
    ``(d) Special Rule.--Any school receiving assistance provided under 
this section shall comply with title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d et seq.) and not discriminate on the basis of race, 
color, or national origin.
    ``(e) Part B of the Individuals With Disabilities Education Act.--
Nothing in this section shall be construed to affect the requirements 
of part B of the Individuals with Disabilities Education Act (20 U.S.C. 
1411 et seq.).''.

SEC. 117. ASSESSMENT AND LOCAL EDUCATIONAL AGENCY AND SCHOOL 
              IMPROVEMENT.

    Section 1116 (20 U.S.C. 6317) is amended to read as follows:

``SEC. 1116. ASSESSMENT AND LOCAL EDUCATIONAL AGENCY AND SCHOOL 
              IMPROVEMENT.

    ``(a) Local Review.--Each local educational agency receiving funds 
under this part shall--
            ``(1) use the State assessments described in the State 
        plan;
            ``(2) use any additional measures or indicators described 
        in the local educational agency's plan to review annually the 
        progress of each school served under this part to determine 
        whether the school is meeting, or making adequate progress as 
        defined in sections 1111(b)(2) (B) and (D) toward enabling its 
        students to meet the State's student performance standards 
        described in the State plan;
            ``(3) provide the results of the local annual review to 
        schools so that the schools, principals, teachers, and other 
        staff in an instructionally useful manner can continually 
        refine the program of instruction to help all children served 
        under this part in those schools meet the State's student 
        performance standards; and
            ``(4) annually review the effectiveness of the actions and 
        activities the schools are carrying out under this part with 
        respect to parental involvement activities under section 1118, 
        professional development activities under section 1119, and 
        other activities assisted under this Act.
    ``(b) Designation of Distinguished Schools.--Each State educational 
agency and local educational agency receiving funds under this part 
shall designate distinguished schools in accordance with section 1117.
    ``(c) School Improvement.--
            ``(1) School improvement.--(A) Subject to subparagraph (B), 
        a local educational agency shall identify for school 
        improvement any elementary school or secondary school served 
        under this part that fails, for any year, to make adequate 
        yearly progress as defined in the State's plan under sections 
        1111(b)(2) (B) and (D).
            ``(B) Subparagraph (A) shall not apply to a school if 
        almost every student in such school is meeting the State's 
        proficient level of performance.
            ``(C) 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 the school who are 
        served, or are eligible for services, under this part.
            ``(2) Opportunity to review and present evidence; time 
        limit.--(A) Before identifying an elementary school or a 
        secondary school for school improvement under paragraph (1), 
        for corrective action under paragraph (7), or for 
        reconstitution under paragraph (8), the local educational 
        agency shall provide the school with an opportunity to review 
        the school-level data, including assessment data, on which such 
        identification is based.
            ``(B) If the principal of a school proposed for 
        identification under paragraph (1), (7), or (8) 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 
        that evidence before making a final determination.
            ``(C) Not later than 30 days after a local educational 
        agency makes an initial determination concerning identifying a 
        school under paragraph (1), (7), or (8), the local educational 
        agency shall make public a final determination on the status of 
        the school.
            ``(3) 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 cover a 2-year period 
        and--
                    ``(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 and may include a strategy for the 
                implementation of a comprehensive school reform model 
                that meets each of the components described in section 
                1706(a);
                    ``(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)(v)(II) and enrolled 
                in the school will meet the State's proficient level of 
                performance on the State assessment described in 
                section 1111(b)(3) within 10 years after the date of 
                enactment of the Better Education for Students and 
                Teachers 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 1119;
                    ``(iv) specify how the funds described in clause 
                (iii) will be used to remove the school from school 
                improvement status;
                    ``(v) establish specific annual, objective goals 
                for continuous and significant progress by each group 
                of students specified in section 1111 (b)(2)(B)(v)(II) 
                and enrolled in the school that will ensure that all 
                such groups of students will make continuous and 
                significant progress towards meeting the goal of all 
                students reaching the State's proficient level of 
                performance on the State assessment described in 
                section 1111(b)(3) within 10 years after the date of 
                enactment of the Better Education for Students and 
                Teachers Act;
                    ``(vi) identify how the school will provide written 
                notification about the identification to the parents of 
                each student enrolled in such school, in a format and, 
                to the extent practicable, in a language the parents 
                can understand;
                    ``(vii) specify the responsibilities of the school, 
                the local educational agency, and the State educational 
                agency serving the school under the plan, including the 
                technical assistance to be provided by the local 
                educational agency under paragraph (4); and
                    ``(viii) include strategies to promote effective 
                parental involvement in the school.
            ``(B) The local educational agency may condition approval 
        of a school plan on inclusion of 1 or more of the corrective 
        actions specified in paragraph (7)(D)(ii).
            ``(C) A school shall implement the school plan (including a 
        revised plan) expeditiously, 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, within 45 days after 
        receiving a school plan, shall--
                    ``(i) establish a peer-review process to assist 
                with review of a school plan prepared by a school 
                served by the local educational agency; and
                    ``(ii) promptly review the school plan, work with 
                the school as necessary, and approve the school plan if 
                the plan meets the requirements of this paragraph.
            ``(4) 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)(3), 
                and other samples of student work, to identify and 
                address instructional problems including problems, if 
                any, in implementing the parental involvement 
                requirements described in section 1118, the 
                professional development requirements described in 
                section 1119, and the responsibilities of the school 
                and local educational agency under the school plan 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) 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, 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 that agency 
        shall be based on scientifically based research.
            ``(5) Failure to make adequate yearly progress after 
        identification.--In the case of any school served under this 
        part that fails to make adequate yearly progress, as defined by 
        the State under sections 1111(b)(2) (B) and (D), at the end of 
        the first year after the school year for which the school was 
        identified under paragraph (1), the local educational agency 
        serving such school--
                    ``(A) shall provide all students enrolled in the 
                school with the option to transfer to another public 
                school within the local educational agency, including a 
                public charter school, that has not been identified for 
                school improvement under paragraph (1), unless--
                            ``(i) such an option is prohibited by State 
                        law or local law, which includes school board 
                        approved local educational agency policy; or
                            ``(ii) the local educational agency 
                        demonstrates to the satisfaction of the State 
                        educational agency that the local educational 
                        agency lacks the capacity to provide that 
                        option to all students in the school who 
                        request the option, in which case the local 
                        educational agency shall permit as many 
                        students as possible (selected by the agency on 
                        an equitable basis and giving priority to the 
                        lowest achieving students) to make such a 
                        transfer, after giving notice to the parents of 
                        affected children that it is not possible, 
                        consistent with State and local law, to 
                        accommodate the transfer request of every 
                        student;
                    ``(B) may identify the school for, and take, 
                corrective action under paragraph (7); and
                    ``(C) shall continue to provide technical 
                assistance while instituting any corrective action.
            ``(6) Notification to parents.--A local educational agency 
        shall promptly provide (in a format and, to the extent 
        practicable, in a language the parents can understand) the 
        parents of each student in an elementary school or a secondary 
        school identified for school improvement under paragraph (1), 
        for corrective action under paragraph (7), or for 
        reconstitution under paragraph (8)--
                    ``(A) an explanation of what the identification 
                means, and how the school compares in terms of academic 
                performance to other elementary schools or secondary 
                schools served by the State educational agency and the 
                local educational agency involved;
                    ``(B) the reasons for the identification;
                    ``(C) an explanation of what the school is doing to 
                address the problem of low performance;
                    ``(D) an explanation of what the State educational 
                agency or local educational agency is doing to help the 
                school address the performance problem;
                    ``(E) an explanation of how parents described in 
                this paragraph can become involved in addressing the 
                academic issues that caused the school to be 
                identified; and
                    ``(F) when the school is identified for corrective 
                action under paragraph (7) or for reconstitution under 
                paragraph (8), an explanation of the parents' option to 
                transfer their child to another public school (with 
                transportation provided by the agency when required by 
                paragraph (9)) or to obtain supplemental services for 
                the child, in accordance with those paragraphs.
            ``(7) Corrective action.--(A) In this subsection, 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)(3).
            ``(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 (F) and paragraph (8).
            ``(C) In the case of any school served by the local 
        educational agency under this part that fails to make adequate 
        yearly progress, as defined by the State under sections 
        1111(b)(2) (B) and (D), at the end of the second year after the 
        school year for which the school was identified under paragraph 
        (1), the local educational agency shall--
                    ``(i)(I) provide all students enrolled in the 
                school with the option to transfer to another public 
                school within the local educational agency, including a 
                public charter school, that has not been identified for 
                school improvement under paragraph (1); and
                    ``(II) if all public schools in the local 
                educational agency to which children may transfer are 
                identified under paragraph (1) or this paragraph, the 
                agency shall, to the extent practicable, establish a 
                cooperative agreement with other local educational 
                agencies in the area for the transfer of as many of 
                those children as possible, selected by the agency on 
                an equitable basis;
                    ``(ii) make supplemental educational services 
                available, in accordance with subsection (f), to 
                children who remain in the school;
                    ``(iii) identify the school for corrective action 
                and take at least one of the following corrective 
                actions:
                            ``(I) Make alternative governance 
                        arrangements, such as reopening the school as a 
                        public charter school.
                            ``(II) Replace the relevant school staff.
                            ``(III) Institute and fully implement 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
                    ``(iv) continue to provide technical assistance to 
                the school.
            ``(D) A local educational agency may delay, for a period 
        not to exceed one 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.
            ``(E) The local educational agency shall publish and 
        disseminate information regarding any corrective action the 
        local educational agency takes under this paragraph at a school 
        to the public through such means as the Internet, the media, 
        and public agencies.
            ``(8) Reconstitution.--(A) If, after one year of corrective 
        action under paragraph (7), a school subject to such corrective 
        action continues to fail to make adequate yearly progress then 
        the local educational agency shall--
                    ``(i) provide all students enrolled in the school 
                with the option to transfer to another public school in 
                accordance with paragraph (7)(C)(i);
                    ``(ii) make supplemental educational services 
                available, in accordance with subsection (f), to 
                children who remain in the school; and
                    ``(iii) prepare a plan and make necessary 
                arrangements to carry out subparagraph (B).
            ``(B)(i) Not later than the beginning of the school year 
        following the year in which the local educational agency 
        implements subparagraph (A), the local educational agency shall 
        implement at least one of the following alternative governance 
        arrangements for the school, consistent with State law:
                    ``(I) Reopening the school as a public charter 
                school.
                    ``(II) Replacing all or most of the school staff.
                    ``(III) Turning the operation of the school over to 
                another entity, such as a private contractor, with a 
                demonstrated record of success.
                    ``(IV) Turning the operation of the school over to 
                the State, if agreed to by the State.
                    ``(V) Any other major restructuring of the school's 
                governance arrangement.
            ``(ii) A rural local agency, as described in section 
        5231(b), may apply to the Secretary for a waiver of the 
        requirements of this subparagraph if the agency submits to the 
        Secretary an alternative plan for making significant changes to 
        improve student performance in the school, such as providing an 
        academically focused after school program for all students, 
        changing school administration, or implementing a research 
        based, proven effective, whole school reform program. The 
        Secretary shall approve or reject an application for a waiver 
        under this subparagraph not later than 30 days after the 
        submission of information required by the Secretary to apply 
        for the waiver. If the Secretary fails to make a determination 
        with respect to the waiver application within such 30 days, the 
        application shall be considered approved by the Secretary.
            ``(C) The local educational agency shall provide prompt 
        notice to teachers and parents whenever subparagraph (A) or (B) 
        applies, shall provide the teachers and parents an adequate 
        opportunity to comment before taking any action under those 
        subparagraphs and to participate in developing any plan under 
        subparagraph (A)(iii).
            ``(9) Transportation.--In any case described in paragraph 
        (7)(C), the local educational agency--
                    ``(A) shall provide, or shall pay for the provision 
                of, transportation for the student to the school the 
                child attends, notwithstanding subsection 
                (f)(1)(C)(ii); and
                    ``(B) may use not more than a total of 15 percent 
                of the local educational agency's allocation under this 
                part for a fiscal year for that transportation or for 
                supplemental services under subsection (f).
            ``(10) Duration of reconstitution.--If any school 
        identified for reconstitution under paragraph (8) makes 
        adequate yearly progress for two consecutive years, the local 
        educational agency need no longer subject the school to 
        corrective action or identify the school as in need of 
        improvement for the succeeding school year.
            ``(11) Special rules.--A local educational agency shall 
        permit a child who transferred to another school under this 
        subsection to remain in that school, and shall continue to 
        provide or provide for transportation for the child to attend 
        that school to the extent required by paragraph (9)(B) until 
        the child leaves that school.
            ``(12) Schools previously identified for school improvement 
        or corrective action.--
                    ``(A) School improvement.--(i) Except as provided 
                in clauses (ii) and (iii), any school that was in 
                school improvement status under this subsection on the 
                day preceding the date of enactment of the Better 
                Education for Students and Teachers Act shall be 
                treated by the local educational agency, at the 
                beginning of the next school year following such day, 
                as a school that is in the first year of school 
                improvement under paragraph (1).
                    ``(ii) Any school that was in school improvement 
                status under this subsection for the two school years 
                preceding the date of enactment of the Better Education 
                for Students and Teachers Act shall be treated by the 
                local educational agency, at the beginning of the next 
                school year following such day, as a school described 
                in paragraph (5).
                    ``(iii) Any school described in clause (ii) that 
                fails to make adequate yearly progress for the first 
                full school year following the date of enactment of the 
                Better Education for Students and Teachers Act shall be 
                subject to paragraph (7)(C) at the beginning of the 
                next school year.
                    ``(iv) Any school described in clause (iii) that 
                fails to make adequate yearly progress for the second 
                full school year following the date of enactment of the 
                Better Education for Students and Teachers Act shall be 
                subject to paragraph (8) at the beginning of the next 
                school year.
                    ``(B) Corrective action.--(i) Any school that was 
                in corrective action status under this subsection on 
                the day preceding the date of enactment of the Better 
                Education for Students and Teachers Act, and that fails 
                to make adequate yearly progress for the school year 
                following such date, shall be subject to paragraph 
                (7)(C) at the beginning of the next school year.
                    ``(ii) Any school described in clause (i) that 
                fails to make adequate yearly progress for the second 
                school year following such date shall be subject to 
                paragraph (8) at the beginning of the next school year.
            ``(13) State educational agency responsibilities.--The 
        State educational agency shall--
                    ``(A) make technical assistance under section 1117 
                available to all schools identified for school 
                improvement and corrective action under this 
                subsection, to the extent possible with funds reserved 
                under section 1003;
                    ``(B) if the State educational agency determines 
                that a local educational agency failed to carry out its 
                responsibilities under this subsection, take such 
                corrective actions as the State educational agency 
                determines appropriate and in compliance with State 
                law;
                    ``(C) for each school in the State that is 
                identified for school improvement or corrective action, 
                notify the Secretary of academic and other factors that 
                were determined by the State educational agency under 
                section 1111(b)(8) as significantly impacting student 
                achievement; and
                    ``(D) if a school in the State is identified for 
                school improvement or corrective action, encourage 
                appropriate State and local agencies and community 
                groups to develop a consensus plan to address any 
                factors that significantly impacted student 
                achievement.
    ``(d) State Review and Local Educational Agency Improvement.--
            ``(1) In general.--A State educational agency shall review 
        annually--
                    ``(A) the progress of each local educational agency 
                receiving funds under this part to determine whether 
                schools receiving assistance under this part are making 
                adequate progress as defined in sections 1111(b)(2) (B) 
                and (D) toward meeting the State's student performance 
                standards and to determine whether each local 
                educational agency is carrying out its responsibilities 
                under section 1116 and section 1117; and
                    ``(B) the effectiveness of the activities carried 
                out under this part by each local educational agency 
                that receives funds under this part and is served by 
                the State educational agency with respect to parental 
                involvement, professional development, and other 
                activities assisted under this part.
            ``(2) Rewards.--In the case of a local educational agency 
        that for 3 consecutive years has met or exceeded the State's 
        definition of adequate progress as defined in sections 
        1111(b)(2) (B) and (D), the State may make institutional and 
        individual rewards of the kinds described for individual 
        schools in paragraph (2) of section 1117(c).
            ``(3) Identification.--(A) A State educational agency shall 
        identify for improvement any local educational agency that for 
        2 consecutive years, is not making adequate progress as defined 
        in sections 1111(b)(2) (B) and (D) in schools served under this 
        part toward meeting the State's student performance standards, 
        except that schools served by the local educational agency that 
        are operating targeted assistance programs may be reviewed on 
        the basis of the progress of only those students served under 
        this part.
            ``(B) Before identifying a local educational agency for 
        improvement under this paragraph, the State educational agency 
        shall provide the local educational agency with an opportunity 
        to review the school-level data, including assessment data, on 
        which such identification is based. If the local educational 
        agency believes that such identification for improvement is in 
        error due to statistical or other substantive reasons, such 
        local educational agency may provide evidence to the State 
        educational agency to support such belief.
            ``(C) Not later than 30 days after a State educational 
        agency makes an initial determination under subparagraph (A), 
        the State educational agency shall make public a final 
        determination regarding the improvement status of the local 
        educational agency.
            ``(4) Local educational agency revisions.--(A) Each local 
        educational agency identified under paragraph (3) shall, not 
        later than 3 months after being so identified, revise and 
        implement a local educational agency plan as described under 
        section 1112. The plan shall--
                    ``(i) include specific State-determined yearly 
                progress requirements in subjects and grades to ensure 
                that all students will make continuous and significant 
                progress towards meeting the goal of all students 
                reaching the proficient level of performance within 10 
                years;
                    ``(ii) address the fundamental teaching and 
                learning needs in the schools of that agency, and the 
                specific academic problems of low-performing students 
                including a determination of why the local educational 
                agency's prior plan failed to bring about increased 
                student achievement and performance;
                    ``(iii) incorporate scientifically based research 
                strategies that strengthen the core academic program in 
                the local educational agency;
                    ``(iv) address the professional development needs 
                of the instructional staff by committing to spend not 
                less than 10 percent of the funds received by the local 
                educational agency under this part during 1 fiscal year 
                for professional development (including funds reserved 
                for professional development under subsection 
                (c)(3)(A)(iii)), which funds shall supplement and not 
                supplant professional development that instructional 
                staff would otherwise receive, and which professional 
                development shall increase the content knowledge of 
                teachers and build the capacity of the teachers to 
                align classroom instruction with challenging content 
                standards and to bring all students to proficient or 
                advanced levels of performance as determined by the 
                State;
                    ``(v) identify specific goals and objectives the 
                local educational agency will undertake for making 
                adequate yearly progress, which goals and objectives 
                shall be consistent with State standards;
                    ``(vi) identify how the local educational agency 
                will provide written notification regarding the 
                identification to parents of students enrolled in 
                elementary schools and secondary schools served by the 
                local educational agency in a format, and to the extent 
                practicable, in a language that the parents can 
                understand;
                    ``(vii) specify the responsibilities of the State 
                educational agency and the local educational agency 
                under the plan, including technical assistance to be 
                provided by the State educational agency under 
                paragraph (5); and
                    ``(viii) include strategies to promote effective 
                parental involvement in the school.
            ``(5) State educational agency responsibility.--(A) For 
        each local educational agency identified under paragraph (3), 
        the State educational agency shall provide technical or other 
        assistance, as authorized under section 1117, to better enable 
        the local educational agency to--
                    ``(i) develop and implement the local educational 
                agency's revised plan; and
                    ``(ii) work with schools needing improvement.
            ``(B) Technical assistance provided under this section by 
        the State educational agency or an entity authorized by such 
        agency shall be supported by effective methods and 
        instructional strategies tied to scientifically based research. 
        Such technical assistance shall address problems, if any, in 
        implementing the parental involvement activities described in 
        section 1118 and the professional development activities 
        described in section 1119.'';
            ``(6) Corrective action.--(A)(i) Except as provided in 
        subparagraph (E), after providing technical assistance pursuant 
        to paragraph (5) and taking other remediation measures, the 
        State educational agency may take corrective action at any time 
        with respect to a local educational agency that has been 
        identified under paragraph (3), but shall take such action, 
        consistent with State and local law, with respect to any local 
        educational agency that continues to fail to make adequate 
        progress at the end of the second year following identification 
        under paragraph (3).
            ``(ii) The State educational agency shall continue to 
        provide technical assistance while implementing any corrective 
        action.
            ``(B) Consistent with State and local law, in the case of a 
        local educational agency subject to corrective action under 
        this paragraph, the State educational agency shall not take 
        less than 1 of the following corrective actions:
                    ``(i) Instituting and fully implementing a new 
                curriculum that is based on State and local standards, 
                including appropriate professional development tied to 
                scientifically based research for all relevant staff 
                that offers substantial promise of improving 
                educational achievement for low-performing students.
                    ``(ii) Restructuring or abolishing the local 
                educational agency.
                    ``(iii) Reconstituting school district personnel.
                    ``(iv) Removal of particular schools from the 
                jurisdiction of the local educational agency and 
                establishment of alternative arrangements for public 
                governance and supervision of such schools.
                    ``(v) Appointment by the State educational agency 
                of a receiver or trustee to administer the affairs of 
                the local educational agency in place of the 
                superintendent and school board.
                    ``(vi) Deferring, reducing, or withholding funds.
            ``(C) Hearing.--Prior to implementing any corrective action 
        under this paragraph, the State educational agency shall 
        provide notice and a hearing to the affected local educational 
        agency, if State law provides for such notice and hearing. The 
        hearing shall take place not later than 45 days following the 
        decision to implement corrective action.
            ``(D) Notification to parents.--The State educational 
        agency shall publish, and disseminate to parents and the 
        public, any corrective action the State educational agency 
        takes under this paragraph through a widely read or distributed 
        medium.
            ``(E) Delay.--A State educational agency may delay, for a 
        period not to exceed one year, implementation of corrective 
        action under this paragraph 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.
            ``(F) Waivers.--The State educational agency shall review 
        any waivers approved prior to the date of enactment of the 
        Better Education for Students and Teachers Act for a local 
        educational agency designated for improvement or corrective 
        action and shall terminate any waiver approved by the State 
        under the Educational Flexibility Partnership Act of 1999 if 
        the State determines, after notice and an opportunity for a 
        hearing, that the waiver is not helping the local educational 
        agency make yearly progress to meet the objectives and specific 
        goals described in the local educational agency's improvement 
        plan.
            ``(7) Special rules.--If a local educational agency makes 
        adequate progress toward meeting the State's standards for two 
        consecutive years following identification under paragraph (6), 
        the State educational agency need no longer subject the local 
        educational agency to corrective action for the succeeding 
        school year.
    ``(e) Construction.--Nothing in this section shall be construed to 
alter or otherwise affect the rights, remedies, and procedures afforded 
school or school district employees under Federal, State, or local laws 
(including applicable regulations or court orders) or under the terms 
of collective bargaining agreements, memoranda of understanding, or 
other agreements between such employees and their employers.
    ``(f) Supplemental Services.--
            ``(1) In general.--
                    ``(A) Requirement.--In the case of any school 
                described in subsection (c)(7)(C) or (c)(8)(A), the 
                local educational agency serving such school shall, 
                subject to subparagraphs (B) through (E), arrange for 
                the provision of supplemental educational services to 
                children in the school whose parents request those 
                services, from providers approved for that purpose by 
                the State educational agency and selected by the 
                parents.
                    ``(B) Maximum allocation.--The amount that a local 
                educational agency shall make available for 
                supplemental educational services for each child 
                receiving those services under this subsection is equal 
                to the lesser of--
                            ``(i) the amount of the agency's allocation 
                        under subpart 2 of this part, divided by the 
                        number of children from low-income families 
                        enrolled in the agency's schools; or
                            ``(ii) the actual costs of the supplemental 
                        educational services received by the child.
                    ``(C) Financial obligation of lea.--The local 
                educational agency shall enter into agreements with 
                such approved providers to provide services under this 
                subsection to all children whose parents request the 
                services, except that--
                            ``(i) the local educational agency may use 
                        not more than a total of 15 percent of its 
                        allocation under this part for any fiscal year 
                        to pay for services under this subsection or to 
                        provide or provide for transportation under 
                        subsection (c)(9); and
                            ``(ii) the total amount described in clause 
                        (i) is the maximum amount the local educational 
                        agency is required to spend under this part on 
                        those services.
                    ``(D) Insufficient funds.--If the amount of funds 
                described in subparagraph (C) available to provide 
                services under this subsection is insufficient to 
                provide those services to each child whose parents 
                request the services, then the local educational agency 
                shall give priority to providing the services to the 
                lowest-achieving children.
                    ``(E) Prohibition.--A local educational agency 
                shall not, as a result of the application of this 
                paragraph, reduce by more than 15 percent the total 
                amount made available under this part to a school 
                described in subsection (c)(7)(C) or (c)(8)(A).
            ``(2) Additional local educational agency 
        responsibilities.--Each local educational agency subject to 
        this subsection shall--
                    ``(A) provide annual notice to parents (in a format 
                and, to the extent practicable, in a language the 
                parents can understand) of--
                            ``(i) the availability of services under 
                        this subsection;
                            ``(ii) the eligible providers of those 
                        services that are within the school district 
                        served by the agency or whose services are 
                        reasonably available in neighboring school 
                        districts; and
                            ``(iii) a brief description of the 
                        services, qualifications, and demonstrated 
                        effectiveness of each such provider;
                    ``(B) provide annual notice to potential providers 
                of supplemental services in the school district of the 
                agency of the opportunity to provide services under 
                this subsection and of the applicable procedures for 
                obtaining approval from the State educational agency to 
                be a provider of those services;
                    ``(C) if requested, assist parents to choose a 
                provider from the list of approved providers maintained 
                by the State;
                    ``(D) apply fair and equitable procedures for 
                serving students if spaces at eligible providers are 
                not sufficient to serve all students;
                    ``(E) enter into an agreement with each selected 
                provider that includes a statement for each child, 
                developed with the parents of the child and the 
                provider, of specific performance goals for the 
                student, how the student's progress will be measured, 
                and how the parents and the child's teachers will be 
                regularly informed of the child's progress and that, in 
                the case of a child with disabilities, is consistent 
                with the child's individualized education program under 
                section 614(d) of the Individuals with Disabilities 
                Education Act; and
                    ``(F) not disclose to the public the identity of 
                any child eligible for, or receiving, supplemental 
                services under this subsection without the written 
                permission of the parents of the child.
            ``(3) Additional state educational agency 
        responsibilities.--Each State educational agency shall, in 
        consultation with local educational agencies, parents, 
        teachers, and other interested members of the public--
                    ``(A) promote maximum participation under this 
                subsection by service providers to ensure, to the 
                extent practicable, that parents have as many choices 
                of those providers as possible;
                    ``(B) develop and apply objective criteria to 
                potential service providers that are based on 
                demonstrated effectiveness in increasing the academic 
                proficiency of students in subjects relevant to meeting 
                the State content and student performance standards 
                adopted under section 1111(b)(1);
                    ``(C) maintain an updated list of approved service 
                providers in school districts served by local 
                educational agencies subject to this subsection, from 
                which parents may select;
                    ``(D) develop and implement standards and 
                techniques for monitoring, and publicly reporting on, 
                the quality and effectiveness of the services offered 
                by service providers, and for withdrawing approval from 
                providers that fail, for two consecutive years, to 
                contribute to increasing the academic proficiency of 
                students served under this subsection as described in 
                subparagraph (B); and
                    ``(E) ensure that all approved providers meet 
                applicable health and safety codes.
            ``(4) Waiver.--A State educational agency may waive the 
        requirements of this subsection for a local educational agency 
        that demonstrates to the State educational agency's 
        satisfaction that its list of approved service providers does 
        not include any providers whose services are reasonably 
        available geographically to children in that local educational 
        agency.
            ``(5) Special rule.--If State law prohibits a State 
        educational agency from carrying out any of its 
        responsibilities under this subsection, each local educational 
        agency in the State shall carry out those prohibited 
        responsibilities with respect to those who provide, or seek 
        approval to provide, services to students who attend schools 
        served by the local educational agency.
            ``(6) Definition.--In this subsection, the term 
        `supplemental educational services' means tutoring and other 
        supplemental academic enrichment services that--
                    ``(A) are of high quality, research-based, focused 
                on academic content, and directed exclusively at 
                raising student proficiency in meeting the State's 
                challenging content and student performance standards; 
                and
                    ``(B) are provided outside of regular school hours.
    ``(g) Other Agencies.--If a school is identified for school 
improvement, the Secretary may notify other relevant Federal agencies 
regarding the academic and other factors determined by the State 
educational agency under section 1111(b)(8) as significantly impacting 
student performance.''.

SEC. 118. ASSISTANCE FOR SCHOOL SUPPORT AND IMPROVEMENT.

    Section 1117 (20 U.S.C. 6318) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(3) Priorities.--In carrying out this section, a State 
        educational agency shall--
                    ``(A) first, provide support and assistance to 
                local educational agencies subject to corrective action 
                described in section 1116 and assist schools, in 
                accordance with section 1116, for which a local 
                educational agency has failed to carry out its 
                responsibilities under section 1116;
                    ``(B) second, provide support and assistance to 
                other local educational agencies and schools identified 
                as in need of improvement under section 1116; and
                    ``(C) third, provide support and assistance to 
                other local educational agencies and schools 
                participating under this part that need support and 
                assistance in order to achieve the purpose of this 
                part.'';
            (2) in subsection (b), by striking ``the comprehensive 
        regional technical assistance centers under part A of title 
        XIII and'' and inserting ``comprehensive regional technical 
        assistance centers, and''; and
            (3) in subsection (c)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) Approaches.--
                    ``(A) In general.--In order to achieve the purpose 
                described in subsection (a), each such system shall 
                give priority to using funds made available to carry 
                out this section--
                            ``(i) to establish school support teams for 
                        assignment to and working in schools in the 
                        State that are described in subsection 
                        (a)(3)(A); and
                            ``(ii) to provide such support as the State 
                        educational agency determines to be necessary 
                        and available to assure the effectiveness of 
                        such teams.
                    ``(B) Composition.--Each school support team shall 
                be composed of persons knowledgeable about successful 
                schoolwide projects, school reform, and improving 
                educational opportunities for low-achieving students, 
                including--
                            ``(i) teachers;
                            ``(ii) pupil services personnel;
                            ``(iii) parents;
                            ``(iv) distinguished teachers or 
                        principals;
                            ``(v) representatives of institutions of 
                        higher education;
                            ``(vi) regional educational laboratories or 
                        research centers;
                            ``(vii) outside consultant groups; or
                            ``(viii) other individuals as the State 
                        educational agency, in consultation with the 
                        local educational agency, may determine 
                        appropriate.
                    ``(C) Functions.--Each school support team assigned 
                to a school under this section shall--
                            ``(i) review and analyze all facets of the 
                        school's operation, including the design and 
                        operation of the instructional program, and 
                        assist the school in developing recommendations 
                        for improving student performances in that 
                        school;
                            ``(ii) collaborate, with school staff and 
                        the local educational agency serving the 
                        school, in the design, implementation, and 
                        monitoring of a plan that, if fully 
                        implemented, can reasonably be expected to 
                        improve student performance and help the school 
                        meet its goals for improvement, including 
                        adequate yearly progress under section 
                        1111(b)(2)(B);
                            ``(iii) evaluate, at least semiannually, 
                        the effectiveness of school personnel assigned 
                        to the school, including identifying 
                        outstanding teachers and principals, and make 
                        findings and recommendations (including the 
                        need for additional resources, professional 
                        development, or compensation) to the school, 
                        the local educational agency, and, where 
                        appropriate, the State educational agency; and
                            ``(iv) make additional recommendations as 
                        the school implements the plan described in 
                        clause (ii) to the local educational agency and 
                        the State educational agency concerning 
                        additional assistance and resources that are 
                        needed by the school or the school support 
                        team.
                    ``(D) Continuation of assistance.--After 1 school 
                year, the school support team may recommend that the 
                school support team continue to provide assistance to 
                the school, or that the local educational agency or the 
                State educational agency, as appropriate, take 
                alternative actions with regard to the school.'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by striking ``part 
                        which'' and all that follows through the period 
                        and inserting ``part.''; and
                            (ii) in subparagraph (C)--
                                    (I) by striking ``and may'' and 
                                inserting ``(and may''; and
                                    (II) by striking ``exemplary 
                                performance'' and inserting ``exemplary 
                                performance)''; and
                    (C) in paragraph (3)--
                            (i) in the paragraph heading, by striking 
                        ``Educators'' and inserting ``Teachers and 
                        Principals'';
                            (ii) by amending subparagraph (A) to read 
                        as follows:
                    ``(A) The State may also recognize and provide 
                financial awards to teachers or principals in a school 
                described in paragraph (2) whose students consistently 
                make significant gains in academic achievement.'';
                            (iii) in subparagraph (B), by striking 
                        ``educators'' and inserting ``teachers or 
                        principals''; and
                            (iv) by striking subparagraph (C).

SEC. 118A. GRANTS FOR ENHANCED ASSESSMENT INSTRUMENTS.

    Part A of title I (20 U.S.C. 6311 et seq.) is amended by inserting 
after section 1117 (20 U.S.C. 6318) the following:

``SEC. 1117A. GRANTS FOR ENHANCED ASSESSMENT INSTRUMENTS.

    ``(a) Purpose.--The purpose of this section is to--
            ``(1) enable States (or consortia or States) and local 
        educational agencies (or consortia of local educational 
        agencies) to collaborate with institutions of higher education, 
        other research institutions, and other organizations to improve 
        the quality and fairness of State assessment systems beyond the 
        basic requirements for assessment systems described in section 
        1111(b)(3);
            ``(2) characterize student achievement in terms of multiple 
        aspects of proficiency;
            ``(3) chart student progress over time;
            ``(4) closely track curriculum and instruction; and
            ``(5) monitor and improve judgments based on informed 
        evaluations of student performance.
    ``(b) 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 6 succeeding 
fiscal years.
    ``(c) Grants Authorized.--The Secretary is authorized to award 
grants to States and local educational agencies to enable the States 
and local educational agencies to carry out the purpose described in 
subsection (a).
    ``(d) Application.--In order to receive a grant under this section 
for any fiscal year, a State or local educational agency shall submit 
an application to the Secretary at such time and containing such 
information as the Secretary may require.
    ``(e) Authorized Use of Funds.--A State or local educational agency 
having an application approved under subsection (d) shall use the grant 
funds received under this section to collaborate with institutions of 
higher education or other research institutions, experts on curriculum, 
teachers, administrators, parents, and assessment developers for the 
purpose of developing enhanced assessments that are aligned with 
standards and curriculum, are valid and reliable for the purposes for 
which the assessments are to be used, are grade-appropriate, include 
multiple measures of student achievement from multiple sources, and 
otherwise meet the requirements of section 1111(b)(3). Such assessments 
shall strive to better measure higher order thinking skills, 
understanding, analytical ability, and learning over time through the 
development of assessment tools that include techniques such as 
performance, curriculum-, and technology-based assessments.
    ``(f) Annual Reports.--Each State or local educational agency 
receiving a grant under this section shall report to the Secretary at 
the end of the fiscal year for which the State or local educational 
agency received the grant on the progress of the State or local 
educational agency in improving the quality and fairness of assessments 
with respect to the purpose described in subsection (a).''.

SEC. 119. PARENTAL INVOLVEMENT.

    (a) In General.--Section 1118 (20 U.S.C. 6319) is amended--
            (1) in subsection (a)(2)(B), by inserting ``activities to 
        improve student achievement and student and school 
        performance'' after ``involvement'';
            (2) in subsection (b)(1)--
                    (A) in the first sentence, by inserting ``(in a 
                language parents can understand)'' after 
                ``distribute''; and
                    (B) in the second sentence, insert ``shall be made 
                available to the local community and'' after ``Such 
                policy'';
            (3) in subsection (e)--
                    (A) in paragraph (1), by striking ``participating 
                parents in such areas as understanding the National 
                Education Goals,'' and inserting ``parents of children 
                served by the school or local educational agency, as 
                appropriate, in understanding'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by striking 
                        ``and'' after the semicolon;
                            (ii) in subparagraph (B), by inserting 
                        ``and'' after the semicolon; and
                            (iii) by adding at the end the following:
                    ``(C) using technology, as appropriate, to foster 
                parental involvement;'';
                    (C) in paragraph (14), by striking ``and'' after 
                the semicolon;
                    (D) by amending paragraph (15) to read as follows:
            ``(15) may establish a school district wide parent advisory 
        council to advise the school and local educational agency on 
        all matters related to parental involvement in programs 
        supported under this section; and''; and
                    (E) by adding at the end the following:
            ``(16) shall provide such other reasonable support for 
        parental involvement activities under this section as parents 
        may request, which may include emerging technologies.'';
            (4) in subsection (f), by striking ``or with'' and 
        inserting ``, parents of migratory children, or parents with''; 
        and
            (5) by striking subsection (g) and inserting the following:
    ``(g) Information From Parental Information and Resource Centers.--
In a State where a parental information and resource center is 
established to provide training, information, and support to parents 
and individuals who work with local parents, local educational 
agencies, and schools receiving assistance under this part, each school 
or local educational agency that receives assistance under this part 
and is located in the State, shall assist parents and parental 
organizations by informing such parents and organizations of the 
existence and purpose of such centers, providing such parents and 
organizations with a description of the services and programs provided 
by such centers, advising parents on how to use such centers, and 
helping parents to contact such centers.
    ``(h) Review.--The State educational agency shall review the local 
educational agency's parental involvement policies and practices to 
determine if the policies and practices meet the requirements of this 
section.''.
    (b) Grants.--Section 1118(a)(3) (20 U.S.C. 6319(a)(3)) is amended 
by adding at the end the following:
            ``(C)(i)(I) The Secretary is authorized to award grants to 
        local educational agencies to enable the local educational 
        agencies to supplement the implementation of the provisions of 
        this section and to allow for the expansion of other recognized 
        and proven initiatives and policies to improve student 
        achievement through the involvement of parents.
            ``(II) Each local educational agency desiring a grant under 
        this subparagraph shall submit to the Secretary an application 
        at such time, in such manner, and containing such information 
        as the Secretary may require.
            ``(ii) Each application submitted under clause (i)(II) 
        shall describe the activities to be undertaken using funds 
        received under this subparagraph, shall set forth the process 
        by which the local educational agency will annually evaluate 
        the effectiveness of the agency's activities in improving 
        student achievement and increasing parental involvement shall 
        include an assurance that the local educational agency will 
        notify parents of the option to transfer their child to another 
        public school under section 1116(c)(7) or to obtain 
        supplemental services for their child under section 1116(c)(8), 
        in accordance with those sections.
            ``(iii) Each grant under this subparagraph shall be awarded 
        for a 5-year period.
            ``(iv) The Secretary shall conduct a review of the 
        activities carried out by each local educational agency using 
        funds received under this subparagraph to determine whether the 
        local educational agency demonstrates improvement in student 
        achievement and an increase in parental involvement.
            ``(v) The Secretary shall terminate grants to a local 
        educational agency under this subparagraph after the fourth 
        year if the Secretary determines that the evaluations conducted 
        by such agency and the reviews conducted by the Secretary show 
        no improvement in the local educational agency's student 
        achievement and no increase in such agency's parental 
        involvement.
            ``(vi) There are authorized to be appropriated to carry out 
        this subparagraph $100,000,000 for fiscal year 2002, and such 
        sums as may be necessary for each subsequent fiscal year.''.

SEC. 120. PROFESSIONAL DEVELOPMENT.

    Section 1119 (20 U.S.C. 6320) is amended--
            (1) in subsection (b)(1)--
                    (A) by amending subparagraph (A) to read as 
                follows:
                    ``(A) support professional development activities 
                that give teachers, principals, administrators, 
                paraprofessionals, pupil services personnel, and 
                parents the knowledge and skills to provide students 
                with the opportunity to meet challenging State or local 
                content standards and student performance standards;'';
                    (B) by redesignating subparagraphs (B) through (E) 
                as subparagraphs (D) through (G), respectively;
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) advance teacher understanding of effective 
                instructional strategies, based on research for 
                improving student achievement, at a minimum in reading 
                or language arts and mathematics;
                    ``(C) be of sufficient intensity and duration (not 
                to include 1-day or short-term workshops and 
                conferences) to have a positive and lasting impact on 
                the teacher's performance in the classroom, except that 
                this subparagraph shall not apply to an activity if 
                such activity is 1 component of a long-term 
                comprehensive professional development plan established 
                by the teacher and the teacher's supervisor based upon 
                an assessment of the needs of the teacher, the needs of 
                students, and the needs of the local educational 
                agency;'';
                    (D) in subparagraph (E) (as so redesignated), by 
                striking ``title III of the Goals 2000: Educate America 
                Act,'';
                    (E) in subparagraph (F) (as so redesignated), by 
                striking ``and'' after the semicolon;
                    (F) in subparagraph (G) (as so redesignated), by 
                striking the period and inserting a semicolon; and
                    (G) by adding at the end the following:
                    ``(H) to the extent appropriate, provide training 
                for teachers in the use of technology and the 
                applications of technology that are effectively used--
                            ``(i) in the classroom to improve teaching 
                        and learning in the curriculum; and
                            ``(ii) in academic content areas in which 
                        the teachers provide instruction;
                    ``(I) be regularly evaluated for their impact on 
                increased teacher effectiveness and improved student 
                performance and achievement, with the findings of such 
                evaluations used to improve the quality of professional 
                development; and
                    ``(J) provide assistance to teachers for the 
                purpose of meeting certification, licensing, or other 
                requirements needed to become highly qualified as 
                defined in section 2102(4).'';
            (2) in subsection (g), by striking ``title III of the Goals 
        2000: Educate America Act,'' and inserting ``other Acts''; and
            (3) by adding at the end the following:
    ``(j) Requirement.--Each local educational agency that receives 
funds under this part and serves a school in which 50 percent or more 
of the children are from low income families shall use not less than 5 
percent of the funds for each of fiscal years 2002 and fiscal year 
2003, and not less than 10 percent of the funds for each subsequent 
fiscal year, for professional development activities to ensure that 
teachers who are not highly qualified become highly qualified within 4 
years.''.

SEC. 120A. PARTICIPATION OF CHILDREN ENROLLED IN PRIVATE SCHOOLS.

    (a) Amendments.--Section 1120 (20 U.S.C. 6321) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by inserting ``that address 
                their needs, and shall ensure that teachers and 
                families of such children participate, on an equitable 
                basis, in services and activities under sections 1118 
                and 1119'' before the period;
                    (B) in paragraph (3), by inserting ``and shall be 
                provided in a timely manner'' before the period; and
                    (C) in paragraph (4), insert ``as determined by the 
                local educational agency each year or every 2 years'' 
                before the period;
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (C), by striking ``and 
                        where'' and inserting ``, where, and by whom'';
                            (ii) by amending subparagraph (D) to read 
                        as follows:
                    ``(D) how the services will be assessed and how the 
                results of that assessment will be used to improve 
                those services;'';
                            (iii) in subparagraph (E), by striking the 
                        period and inserting ``; and''; and
                            (iv) by adding at the end the following:
                    ``(F) how and when the local educational agency 
                will make decisions about the delivery of services to 
                eligible private school children, including a thorough 
                consideration and analysis of the views of private 
                school officials regarding the provision of contract 
                services through potential third party providers, and 
                if the local educational agency disagrees with the 
                views of the private school officials on such provision 
                of services, the local educational agency shall provide 
                in writing to such private school officials an analysis 
                of the reasons why the local educational agency has 
                chosen not to so provide such services.''; and
                    (B) by adding at the end the following:
            ``(4) Consultation.--Each local educational agency shall 
        provide to the State educational agency, and maintain in the 
        local educational agency's records, a written affirmation 
        signed by officials of each participating private school that 
        the consultation required by this section has occurred. If a 
        private school declines in writing to have eligible children in 
        the private school participate in services provided under this 
        section, the local educational agency is not required to 
        further consult with the private school officials or to 
        document the local educational agency's consultation with the 
        private school officials until the private school officials 
        request in writing such consultation. The local educational 
        agency shall inform the private school each year of the 
        opportunity for eligible children to participate in services 
        provided under this section.
            ``(5) Compliance.--A private school official shall have the 
        right to appeal to the State educational agency the decision of 
        a local educational agency as to whether consultation provided 
        for in this section was meaningful and timely, and whether due 
        consideration was given to the views of the private school 
        official. If the private school official wishes to appeal the 
        decision, the basis of the claim of noncompliance with this 
        section by the local educational agencies shall be provided to 
        the State educational agency, and the local educational agency 
        shall forward the appropriate documentation to the State 
        educational agency.'';
            (3) by redesignating subsections (c), (d), and (e) as 
        subsections (d), (e), and (f), respectively; and
            (4) by inserting after subsection (b) the following:
    ``(c) Allocation for Equitable Service to Private School 
Students.--
            ``(1) Calculation.--A local educational agency shall have 
        the final authority, consistent with this section, to calculate 
        the number of private school children, ages 5 through 17, who 
        are low-income by--
                    ``(A) using the same measure of low-income used to 
                count public school children;
                    ``(B) using the results of a survey that, to the 
                extent possible, protects the identity of families of 
                private school students, and allowing such survey 
                results to be extrapolated if complete actual data are 
                unavailable; or
                    ``(C) applying the low-income percentage of each 
                participating public school attendance area, determined 
                pursuant to this section, to the number of private 
                school children who reside in that school attendance 
                area.
            ``(2) Complaint process.--Any dispute regarding low-income 
        data for private school students shall be subject to the 
        complaint process authorized in section 8.'';
            (5) in subsection (e) (as so redesignated),
                    (A) in paragraph (2), by striking ``14505 and 
                14506'' and inserting ``8 and 9'';
                    (B) by redesignating paragraphs (1) and (2) (as so 
                amended) as subparagraphs (A) and (B), respectively;
                    (C) by striking ``If a'' and inserting the 
                following:
            ``(1)  In general.--If a''; and
                    (D) by adding at the end the following:
            ``(2) Determination.--In making the determination under 
        paragraph (1), the Secretary shall consider 1 or more factors, 
        including the quality, size, scope, or location of the program, 
        or the opportunity of eligible children to participate in the 
        program.''; and
            (6) by repealing subsection (f) (as so redesignated).
    (b) Effective Date.--The amendment made by subsection (a)(4) shall 
take effect on September 30, 2003.
    (c) Conforming Amendment.--Section 1120A(a) (20 U.S.C. 6322(a)) is 
amended by striking ``14501 of this Act'' and inserting ``4''.

SEC. 120B. EARLY CHILDHOOD EDUCATION.

    Section 1120B (20 U.S.C. 6321) is amended--
            (1) by amending the section heading to read as follows:

``SEC. 1120B. COORDINATION REQUIREMENTS; EARLY CHILDHOOD EDUCATION 
              SERVICES.'';

            (2) in subsection (c), by striking ``Head Start Act 
        Amendments of 1994'' and inserting ``Head Start Amendments of 
        1998''; and
            (3) by adding at the end the following:
    ``(d) Early Childhood Services.--A local educational agency may use 
funds received under this part to provide preschool services--
            ``(1) directly to eligible preschool children in all or 
        part of its school district;
            ``(2) through any school participating in the local 
        educational agency's program under this part; or
            ``(3) through a contract with a local Head Start agency, an 
        eligible entity operating an Even Start program, a State-funded 
        preschool program, or a comparable public early childhood 
        development program.
    ``(e) Early Childhood Education Programs.--Early childhood 
education programs operated with funds provided under this part may be 
operated and funded jointly with Even Start programs under part B of 
this title, Head Start programs, or State-funded preschool programs. 
Early childhood education programs funded under this part shall--
            ``(1) focus on the developmental needs of participating 
        children, including their social, cognitive, and language-
        development needs, and use scientifically based research 
        approaches that build on competencies that lead to school 
        success, particularly in language and literacy development and 
        in reading;
            ``(2) teach children to understand and use language in 
        order to communicate for various purposes;
            ``(3) enable children to develop and demonstrate an 
        appreciation of books; and
            ``(4) in the case of children with limited English 
        proficiency, enable the children to progress toward acquisition 
        of the English language.''.

SEC. 120C. 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. LIMITATION ON FUNDS.

    ``A local educational agency may not use funds received under this 
subpart for--
            ``(1) purchase or lease of privately owned facilities;
            ``(2) purchase or provision of facilities maintenance, 
        gardening, landscaping, or janitorial services, or the payment 
        of utility costs;
            ``(3) the construction of facilities;
            ``(4) the acquisition of real property;
            ``(5) the payment of travel and attendance costs at 
        conferences or other meetings other than travel and attendance 
        necessary for professional development; or
            ``(6) the purchase or lease of vehicles.''.

SEC. 120D. ALLOCATIONS.

    Subpart 2 of part A of title I (20 U.S.C. 6331 et seq.) is amended 
to read as follows:

                        ``Subpart 2--Allocations

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

    ``(a) Reservation of Funds.--From the amount appropriated 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)(1) in each fiscal year the Secretary shall make 
        grants to local educational agencies in the outlying areas.
            ``(2) Competitive grants.--
                    ``(A) In general.--For fiscal year 2002 and each of 
                the 6 succeeding fiscal years, the Secretary shall 
                reserve $5,000,000 from the amounts made available 
                under subsection (a)(1) to award grants, on a 
                competitive basis, to local educational agencies in the 
                Freely Associated States. The Secretary shall award 
                such grants taking into consideration the 
                recommendations of the Pacific Region Educational 
                Laboratory which shall conduct a competition for such 
                grants.
                    ``(B) Uses.--Except as provided in subparagraph 
                (C), grant funds awarded under this paragraph only may 
                be used--
                            ``(i) for programs described in this Act, 
                        including teacher training, curriculum 
                        development, instructional materials, or 
                        general school improvement and reform; and
                            ``(ii) to provide direct educational 
                        services.
                    ``(C) Administrative costs.--The Secretary may 
                provide 5 percent of the amount made available for 
                grants under this paragraph to the Pacific Region 
                Educational Laboratory 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 reserved 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 reserved 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)(B). 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. 1122. AMOUNTS FOR BASIC GRANTS, CONCENTRATION GRANTS, AND 
              TARGETED GRANTS.

    ``(a) In General.--For each of the fiscal years 2002 through 2008--
            ``(1) the amount appropriated to carry out this part that 
        is less than or equal to the amount appropriated to carry out 
        section 1124 for fiscal year 2001, shall be allocated in 
        accordance with section 1124;
            ``(2) the amount appropriated to carry out this part that 
        is not used under paragraph (1) that equals the amount 
        appropriated to carry out section 1124A for fiscal year 2001, 
        shall be allocated in accordance with section 1124A; and
            ``(3) any amount appropriated to carry out this part for 
        the fiscal year for which the determination is made that is not 
        used to carry out paragraphs (1) and (2) shall be allocated in 
        accordance with section 1125.
    ``(b) Adjustments Where Necessitated by Appropriations.--
            ``(1) In general.--If the sums made 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 the 
        allocations were reduced.
    ``(c) Hold-Harmless Amounts.--
            ``(1) In general.--For each fiscal year the amount made 
        available to each local educational agency under each of 
        sections 1124, 1124A, and 1125 shall be not less than:
                    ``(A) In general.--Notwithstanding any other 
                provision of this Act, the amount made available for 
                each local educational agency under sections 1124 and 
                1124A for the fiscal year shall not be less than the 
                greater of--
                            ``(i) 100 percent of the amount the local 
                        educational agency received for fiscal year 
                        2001 under sections 1124 and 1124A, 
                        respectively; or
                            ``(ii) 100 percent of the amount calculated 
                        for the local educational agency for the fiscal 
                        year under sections 1124 and 1124A, 
                        respectively, determined without applying the 
                        hold harmless provisions of this subparagraph.
                    ``(B) Applicability.--Notwithstanding any other 
                provision of law, the Secretary shall not take into 
                consideration the hold harmless provisions of this 
                subsection for any fiscal year for purposes of 
                calculating State or local allocations for the fiscal 
                year under any program administered by the Secretary 
                other than a program authorized under this part.
                    ``(C) Population Updates.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (4), in fiscal year 2001 and each 
                        subsequent year, the Secretary shall use 
                        updated data, for purposes of carrying out 
                        section 1124, 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.
                            ``(ii) Inappropriate or unreliable data.--
                        If the Secretary and the Secretary of Commerce 
                        determine that some or all of the data referred 
                        to in this subparagraph are inappropriate or 
                        unreliable, the Secretary and the Secretary of 
                        Commerce shall--
                                    ``(I) publicly disclose their 
                                reasons;
                                    ``(II) provide an opportunity for 
                                States to submit updated data on the 
                                number of children described in clause 
                                (i); and
                                    ``(III) review the data and, if the 
                                data are appropriate and reliable, use 
                                the data, for the purposes of section 
                                1124, to determine the number of 
                                children described in clause (i).
                            ``(iii) Criteria of poverty.--In 
                        determining the families that 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, as the criteria have been updated by 
                        increases in the Consumer Price Index for All 
                        Urban Consumers, published by the Bureau of 
                        Labor Statistics.
                            ``(iv) Authorization of appropriations.--
                        There are authorized to be appropriated to the 
                        Department of Commerce for each fiscal year 
                        such sums as may be necessary to update the 
                        data described in clause (i).
            ``(2) Special rules.--If sufficient funds are appropriated, 
        the hold-harmless 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 meets 
        the minimum eligibility criteria provided in section 1124(b), 
        1124A(a)(1)(A), or 1125(a), respectively, except that a local 
        educational agency that does not meet such minimum eligibility 
        criteria for 5 consecutive years shall no longer be eligible to 
        receive a hold-harmless amount under this subsection.
            ``(3) County calculation basis.--For any fiscal year for 
        which the Secretary calculates grants on the basis of 
        population data for counties, the Secretary shall apply the 
        hold-homeless percentages in paragraphs (1) and (2) 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 receive funds for the fiscal year in excess 
        of the hold-harmless amounts specified in this paragraph.
    ``(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 were 
        reduced.

``SEC. 1123. DEFINITIONS.

    ``In this subpart:
            ``(1) Freely associated states.--The term `Freely 
        Associated States' means the Republic of the Marshall Islands, 
        the Federated States of Micronesia, and the Republic of Palau.
            ``(2) Outlying areas.--The term `outlying areas' means the 
        United States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(3) 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. 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) Allocations to local educational agencies.--
                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 Secretary and the Secretary of 
                        Commerce shall publicly disclose the reasons 
                        for their determination in detail; and
                            ``(ii) paragraph (3) shall apply.
                    ``(B) Allocations to large and small local 
                educational agencies.--
                            ``(i) Large local educational agencies.--In 
                        the case of an allocation under this section to 
                        a large local educational agency, the amount of 
                        the grant under this section for the large 
                        local educational agency shall be the amount 
                        determined under paragraph (1).
                            ``(ii) Small local educational agencies.--
                                    ``(I) In general.--In the case of 
                                an allocation under this section to a 
                                small local educational agency the 
                                State educational agency may--
                                            ``(aa) distribute grants 
                                        under this section in amounts 
                                        determined by the Secretary 
                                        under paragraph (1); or
                                            ``(bb) use an alternative 
                                        method approved by the 
                                        Secretary to distribute the 
                                        portion of the State's total 
                                        grants under this section that 
                                        is based on those small local 
                                        educational agencies.
                                    ``(II) Alternative method.--An 
                                alternative method under subclause 
                                (I)(bb) 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 
                                minimum number of children to qualify 
                                described in subsection (b).
                                    ``(III) Appeal.--If a small local 
                                educational agency is dissatisfied with 
                                the determination of the amount of its 
                                grant by the State educational agency 
                                under subclause (I)(bb), the small 
                                local educational agency may appeal the 
                                determination to the Secretary, who 
                                shall respond within 45 days of 
                                receiving the appeal.
                            ``(iii) Definitions.--In this 
                        subparagraph--
                                    ``(I) the term `large local 
                                educational agency' means a local 
                                educational agency serving a school 
                                district with a total population of 
                                20,000 or more; and
                                    ``(II) the term `small local 
                                educational agency' means a local 
                                educational agency serving a school 
                                district with a total population of 
                                less than 20,000.
            ``(3) Allocations to counties.--
                    ``(A) In general.--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 allocate county 
                amounts to local educational agencies, in accordance 
                with regulations promulgated by the Secretary.
                    ``(B) Application.--In any State in which a large 
                number of local educational agencies overlap county 
                boundaries, or for which the State believes the State 
                has data that would better target funds than allocating 
                the funds 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) Allocations to local educational agencies.--
                If the Secretary approves its application under 
                subparagraph (B), the State educational agency shall 
                provide the Secretary an assurance that the allocations 
                will be made--
                            ``(i) using precisely the same factors for 
                        determining a grant as are used under this 
                        section; or
                            ``(ii) using data that the State 
                        educational agency submits to the Secretary for 
                        approval that more accurately target poverty.
                    ``(D) Appeal.--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 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 which 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 which 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.
    ``(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 school district of the local educational 
        agency.
    ``(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 paragraphs (2) and (3);
                    ``(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 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 and 
                youth (other than such institutions operated by the 
                United States), but not counted pursuant to chapter 1 
                of 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 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 shall 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 2001 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, the Secretary and 
        the Secretary of Commerce 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. 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 such 
        children and 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 
        subparagraph to the Secretary not later than January 1 of each 
        year. For the purpose 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 (as determined under paragraph (2)) 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.
    ``(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 the total amount made available to 
        carry out this section for such fiscal year; or
            ``(2) the average of--
                    ``(A) 0.25 percent of the total amount made 
                available to carry out this section for such fiscal 
                year; 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 
                fiscal year.

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

    ``(a) Eligibility for and Amount of Grants.--
            ``(1) Eligibility.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, each local educational agency in a 
                State that 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) who are 
                served by the agency exceeds--
                            ``(i) 6,500; or
                            ``(ii) 15 percent of the total number of 
                        children aged 5 through 17 served by the 
                        agency.
                    ``(B) Minimum.--Notwithstanding section 1122, no 
                State shall receive under this section an amount that 
                is less than the lesser of--
                            ``(i) 0.25 percent of the total amount made 
                        available to carry out this section for such 
                        fiscal year; or
                            ``(ii) the average of--
                                    ``(I) 0.25 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 fiscal year.
            ``(2) Determination.--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 the Commonwealth of Puerto Rico, and the 
                amount in section 1124(a)(3) for the Commonwealth of 
                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 that 
        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) In general.--Grant amounts under this section 
                shall be calculated in the same manner as grant amounts 
                are calculated under section 1124(a) (2) and (3).
                    ``(B) Special rule.--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 the amount made available to the State under 
                this section for any fiscal year to make grants to 
                local educational agencies that meet the criteria in 
                paragraph (1)(A) (i) or (ii) but that are in ineligible 
                counties.
    ``(b) Ratable Reduction Rule.--If the sums available under 
subsection (a) for any fiscal year for making payments under this 
section are not sufficient to pay in full the total amounts which all 
States are eligible to receive under subsection (a) for such fiscal 
year, the maximum amounts that all States are eligible to receive under 
subsection (a) for such fiscal year shall be ratably reduced. In the 
case that additional funds become available for making such payments 
for any fiscal year during which the preceding sentence is applicable, 
such reduced amounts shall be increased on the same basis as they were 
reduced.
    ``(c) States Receiving 0.25 Percent or Less.--In States that 
receive 0.25 percent or less of the total amount made available to 
carry out this section for a fiscal year, the State educational agency 
shall allocate such funds among the local educational agencies in the 
State--
            ``(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. 1125. TARGETED GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    ``(a) Eligibility of Local Educational Agencies.--
            ``(1) In general.--A local educational agency in a State is 
        eligible to receive a targeted grant under this section for any 
        fiscal year if--
                    ``(A) the number of children in the local 
                educational agency counted under section 1124(c), 
                before application of the weighted child count 
                described in subsection (c), is at least 10; and
                    ``(B) if the number of children counted for grants 
                under section 1124(c), before application of the 
                weighted child count described in subsection (c), is at 
                least 5 percent of the total number of children aged 5 
                to 17 years, inclusive, in the school district of the 
                local educational agency.
            ``(2) Special rule.--For any fiscal year for which the 
        Secretary allocates funds under this section on the basis of 
        counties, 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 the Commonwealth of Puerto Rico.--
            ``(1) In general.--The amount of the grant that a local 
        educational agency in a State (other than the Commonwealth of 
        Puerto Rico) 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 determined under section 
                1124(a)(1)(B).
            ``(2) Puerto rico.--For each fiscal year, the amount of the 
        grant the Commonwealth of Puerto Rico is eligible to receive 
        under this section shall be equal to the number of children 
        counted under subsection (c) for the Commonwealth of Puerto 
        Rico, multiplied by the amount determined in section 1124(a)(4) 
        for the Commonwealth of Puerto Rico.
    ``(c) Weighted Child Count.--
            ``(1) Weights for allocations to counties.--
                    ``(A) In general.--For each fiscal year for which 
                the Secretary uses county population data to calculate 
                grants, the weighted child count used to determine a 
                county's allocation under this section is the larger of 
                the 2 amounts determined under subparagraphs (B) and 
                (C).
                    ``(B) By percentage of children.--The amount 
                referred to in subparagraph (A) is determined by 
                adding--
                            ``(i) the number of children determined 
                        under section 1124(c) for that county who 
                        constitute not more than 15.00 percent, 
                        inclusive, of the county's total population 
                        aged 5 to 17, inclusive, multiplied by 1.0;
                            ``(ii) the number of such children who 
                        constitute more than 15.00 percent, but not 
                        more than 19.00 percent, of such population, 
                        multiplied by 1.75;
                            ``(iii) the number of such children who 
                        constitute more than 19.00 percent, but not 
                        more than 24.20 percent, of such population, 
                        multiplied by 2.5;
                            ``(iv) the number of such children who 
                        constitute more than 24.20 percent, but not 
                        more than 29.20 percent, of such population, 
                        multiplied by 3.25; and
                            ``(v) the number of such children who 
                        constitute more than 29.20 percent of such 
                        population, multiplied by 4.0.
                    ``(C) By number of children.--The amount referred 
                to in subparagraph (A) is determined by adding--
                            ``(i) the number of children determined 
                        under section 1124(c) who constitute not more 
                        than 2,311, inclusive, of the county's total 
                        population aged 5 to 17, inclusive, multiplied 
                        by 1.0;
                            ``(ii) the number of such children between 
                        2,312 and 7,913, inclusive, in such population, 
                        multiplied by 1.5;
                            ``(iii) the number of such children between 
                        7,914 and 23,917, inclusive, in such 
                        population, multiplied by 2.0;
                            ``(iv) the number of such children between 
                        23,918 and 93,810, inclusive, in such 
                        population, multiplied by 2.5; and
                            ``(v) the number of such children in excess 
                        of 93,811 in such population, multiplied by 
                        3.0.
                    ``(D) Puerto rico.--Notwithstanding subparagraph 
                (A), the weighting factor for the Commonwealth of 
                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) In general.--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 subparagraphs 
                (B) and (C).
                    ``(B) By percentage of children.--The amount 
                referred to in subparagraph (A) is determined by 
                adding--
                            ``(i) the number of children determined 
                        under section 1124(c) for that local 
                        educational agency who constitute not more than 
                        15.233 percent, inclusive, of the agency's 
                        total population aged 5 to 17, inclusive, 
                        multiplied by 1.0;
                            ``(ii) the number of such children who 
                        constitute more than 15.233 percent, but not 
                        more than 22.706 percent, of such population, 
                        multiplied by 1.75;
                            ``(iii) the number of such children who 
                        constitute more than 22.706 percent, but not 
                        more than 32.213 percent, of such population, 
                        multiplied by 2.5;
                            ``(iv) the number of such children who 
                        constitute more than 32.213 percent, but not 
                        more than 41.452 percent, of such population, 
                        multiplied by 3.25; and
                            ``(v) the number of such children who 
                        constitute more than 41.452 percent of such 
                        population, multiplied by 4.0.
                    ``(C) By number of children.--The amount referred 
                to in subparagraph (A) is determined by adding--
                            ``(i) the number of children determined 
                        under section 1124(c) who constitute not more 
                        than 710, inclusive, of the agency's total 
                        population aged 5 to 17, inclusive, multiplied 
                        by 1.0;
                            ``(ii) the number of such children between 
                        711 and 2,384, inclusive, in such population, 
                        multiplied by 1.5;
                            ``(iii) the number of such children between 
                        2,385 and 9,645, inclusive, in such population, 
                        multiplied by 2.0;
                            ``(iv) the number of such children between 
                        9,646 and 54,600, inclusive, in such 
                        population, multiplied by 2.5; and
                            ``(v) the number of such children in excess 
                        of 54,600 in such population, multiplied by 
                        3.0.
                    ``(D) Puerto rico.--Notwithstanding subparagraph 
                (A), the weighting factor for the Commonwealth of 
                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.--Grant amounts under this 
section shall be calculated in the same manner as grant amounts are 
calculated under section 1124(a) (2) and (3).
    ``(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 not less 
than 0.5 percent of the total amount made available to carry out this 
section for such fiscal year.

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

    ``(a) Grants.--From funds appropriated under subsection (e) the 
Secretary is authorized to make grants to States, from allotments under 
subsection (b), to carry out the purposes of this part.
    ``(b) Distribution Based Upon Fiscal Effort and Equity.--
            ``(1) In general.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), funds appropriated pursuant to 
                subsection (e) shall be allotted to each State based 
                upon the number of children counted under section 
                1124(c) in such State multiplied by the product of--
                            ``(i) such State's effort factor described 
                        in paragraph (2); multiplied by
                            ``(ii) 1.30 minus such State's equity 
                        factor described in paragraph (3).
                    ``(B) Minimum.--For each fiscal year no State shall 
                receive under this section less than 0.5 percent of the 
                total amount appropriated under subsection (e) for the 
                fiscal year.
            ``(2) Effort factor.--
                    ``(A) In general.--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 0.95 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) Commonwealth of puerto rico.--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) Determination.--
                            ``(i) In general.--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) Computation.--
                                    ``(I) In general.--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), and (IV).
                                    ``(II) Variation.--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 
                                served by the local educational agency.
                                    ``(III) Number of pupils.--In 
                                determining the number of pupils under 
                                this paragraph served by each local 
                                educational agency and in each State, 
                                the Secretary shall multiply the number 
                                of children from low-income families by 
                                a factor of 1.4.
                                    ``(IV) Enrollment requirement.--In 
                                computing coefficients of variation, 
                                the Secretary shall include only those 
                                local educational agencies with an 
                                enrollment of more than 200 students.
                    ``(B) Special rule.--The equity factor for a State 
                that meets the disparity standard described in section 
                222.162 of title 34, Code of Federal Regulations (as 
                such section was in effect on the day preceding the 
                date of enactment of the Better Education for Students 
                and Teachers Act) or a State with only 1 local 
                educational agency shall be not greater than 0.10.
                    ``(C) Revisions.--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 low-income 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, 
                after obtaining 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 section for any fiscal year 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.
            ``(2) Reduction of funds.--The Secretary shall reduce the 
        amount of 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 this subsection 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.--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 6 succeeding 
fiscal years.
    ``(f) Study, Evaluation and Report of School Finance 
Equalization.--(1) The Secretary shall conduct a study to evaluate and 
report to the Congress on the degree of disparity in expenditures per 
pupil among local educational agencies within and across each of the 
fifty States and the District of Columbia. The Secretary shall also 
analyze the trends in State school finance legislation and judicial 
action requiring that States equalize resources. The Secretary shall 
evaluate and report to the Congress whether or not it can be determined 
if these actions have resulted in an improvement in student 
performance.
    ``(2) In preparing this report, the Secretary may also consider the 
following: Various measures of determining disparity; the relationship 
between education expenditures and student performance; the effect of 
Federal education assistance programs on the equalization of school 
finance resources; and the effects of school finance equalization on 
local and State tax burdens.
    ``(3) Such reports shall be submitted to the Congress not later 
than one year after the date of enactment of the Better Education for 
Students and Teachers Act.

``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 a local educational agency would receive under 
sections 1124, 1124A, and 1125 is more than such local educational 
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.

``SEC. 1127. CARRYOVER AND WAIVER.

    ``(a) Limitation on Carryover.--Notwithstanding section 421 of the 
General Education Provisions Act or any other provision of law, not 
more than 15 percent of the funds allocated to a local educational 
agency for any fiscal year under this subpart (but not including funds 
received through any reallocation under this subpart) may remain 
available for obligation by such agency for one additional fiscal year.
    ``(b) Waiver.--A State educational agency may, once every 3 years, 
waive the percentage limitation in subsection (a) if--
            ``(1) the agency determines that the request of a local 
        educational agency is reasonable and necessary; or
            ``(2) supplemental appropriations for this subpart become 
        available.
    ``(c) Exclusion.--The percentage limitation under subsection (a) 
shall not apply to any local educational agency that receives less than 
$50,000 under this subpart for any fiscal year.''.

SEC. 120E. SCHOOL YEAR EXTENSION ACTIVITIES.

    Subpart 1 of part A of title I (20 U.S.C. 6311 et seq.) is amended 
by adding at the end the following:

``SEC. 1120C. SCHOOL YEAR EXTENSION ACTIVITIES.

    ``(a) Use of Funds.--
            ``(1) In general.--A local educational agency may use funds 
        received under this part to--
                    ``(A) to extend the length of the school year to 
                210 days, including necessary increases in compensation 
                to employees;
                    ``(B) conduct outreach to and consult with 
                community members, including parents, students, and 
                other stakeholders, to develop a plan to extend 
                learning time within or beyond the school day or year; 
                and
                    ``(C) research, develop, and implement strategies, 
                including changes in curriculum and instruction.
    ``(b) Application.--A local educational agency desiring to use 
funds under this section shall submit an application to the State 
educational agency at such time, in such manner, and accompanied by 
such information as the agency may require. Each application shall 
describe--
            ``(1) the activities to be carried out under this section;
            ``(2) any study or other information-gathering project for 
        which funds will be used;
            ``(3) the strategies and methods the applicant will use to 
        enrich and extend learning time for all students and to 
        maximize high quality instruction in the core academic areas 
        during the school day, such as block scheduling, team teaching, 
        longer school days or years, and extending learning time 
        through new distance-learning technologies;
            ``(4) the strategies and methods the applicant will use, 
        including changes in curriculum and instruction, to challenge 
        and engage students and to maximize the productiveness of 
        common core learning time, as well as the total time students 
        spend in school and in school-related enrichment activities;
            ``(5) the strategies and methods the applicant intends to 
        employ to provide continuing financial support for the 
        implementation of any extended school day or school year;
            ``(6) with respect to any application to carry out 
        activities described in subsection (b)(1)(A), a description of 
        any feasibility or other studies demonstrating the 
        sustainability of a longer school year;
            ``(7) the extent of involvement of teachers and other 
        school personnel in investigating, designing, implementing and 
        sustaining the activities assisted under this section;
            ``(8) the process to be used for involving parents and 
        other stakeholders in the development and implementation of the 
        activities assistance under this section;
            ``(9) any cooperation or collaboration among public housing 
        authorities, libraries, businesses, museums, community-based 
        organizations, and other community groups and organizations to 
        extend engaging, high-quality, standards-based learning time 
        outside of the school day or year, at the school or at some 
        other site;
            ``(10) the training and professional development activities 
        that will be offered to teachers and others involved in the 
        activities assisted under this section;
            ``(11) the goals and objectives of the activities assisted 
        under this section, including a description of how such 
        activities will assist all students to reach State standards;
            ``(12) the methods by which the applicant will assess 
        progress in meeting such goals and objectives; and
            ``(13) how the applicant will use funds provided under this 
        section in coordination with funds provided under other Federal 
        laws.

SEC. 120F. ADEQUACY OF FUNDING OF TARGETED GRANTS TO LOCAL EDUCATIONAL 
              AGENCIES IN FISCAL YEARS AFTER FISCAL YEAR 2001.

    (a) Findings.--Congress makes the following findings:
            (1) The current Basic Grant Formula for the distribution of 
        funds under part A of title I of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6311 et seq.), often does not 
        provide funds for the economically disadvantaged students for 
        which such funds are targeted.
            (2) Any school district in which at least two percent of 
        the students live below the poverty level qualifies for funding 
        under the Basic Grant Formula. As a result, 9 out of every 10 
        school districts in the country receive some form of aid under 
        the Formula.
            (3) Fifty-eight percent of all schools receive at least 
        some funding under title I of the Elementary and Secondary 
        Education Act of 1965, including many suburban schools with 
        predominantly well-off students.
            (4) One out of every 5 schools with concentrations of poor 
        students between 50 and 75 percent receive no funding at all 
        under title I of the Elementary and Secondary Education Act of 
        1965.
            (5) In passing the Improving America's Schools Act in 1994, 
        Congress declared that grants under title I of the Elementary 
        and Secondary Education Act of 1965 would more sharply target 
        high poverty schools by using the Targeted Grant Formula, but 
        annual appropriation Acts have prevented the use of that 
        Formula.
            (6) The advantage of the Targeted Grant Formula over other 
        funding formulas under title I of the Elementary and Secondary 
        Education Act of 1965 is that the Targeted Grant Formula 
        provides increased grants per poor child as the percentage of 
        economically disadvantaged children in a school district 
        increases.
            (7) Studies have found that the poverty of a child's family 
        is much more likely to be associated with educational 
        disadvantage if the family lives in an area with large 
        concentrations of poor families.
            (8) States with large populations of high poverty students 
        would receive significantly more funding if more funds under 
        title I of the Elementary and Secondary Education Act of 1965 
        were allocated through the Targeted Grant Formula.
            (9) Congress has an obligation to allocate funds under 
        title I of the Elementary and Secondary Education Act of 1965 
        so that such funds will positively affect the largest number of 
        economically disadvantaged students.
    (b) Limitation on Allocation of Title I Funds Contingent on 
Adequate Funding of Targeted Grants.--Notwithstanding any other 
provision of law, the total amount allocated in any fiscal year after 
fiscal year 2001 for programs and activities under part A of title I of 
the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et 
seq.) may not exceed the amount allocated in fiscal year 2001 for such 
programs and activities unless the amount available for targeted grants 
to local educational agencies under section 1125 of that Act (20 U.S.C. 
6335) in the applicable fiscal year is sufficient to meet the purposes 
of grants under that section.

               PART B--LITERACY FOR CHILDREN AND FAMILIES

SEC. 121. READING FIRST.

    Part B of title I (20 U.S.C. 6361 et seq.) is amended--
            (1) by striking the part heading and inserting the 
        following:

            ``PART B--LITERACY FOR CHILDREN AND FAMILIES'';

            (2) by inserting after the part heading the following:

``Subpart 1--William F. Goodling Even Start Family Literacy Programs'';

            (3) in sections 1201 through 1212, by striking ``this 
        part'' each place such term appears and inserting ``this 
        subpart''; and
            (4) by adding at the end the following:

                      ``Subpart 2--Reading First''

``SEC. 1221. PURPOSES.

    ``The purposes of this subpart are as follows:
            ``(1) To provide assistance to States and local educational 
        agencies in establishing reading programs for students in 
        grades kindergarten through 3 that are grounded in 
        scientifically based reading research, in order to ensure that 
        every student can read at grade level or above by the end of 
        the third grade.
            ``(2) To provide assistance to States and local educational 
        agencies in preparing teachers, through professional 
        development and other support, so the teachers can identify 
        specific reading barriers facing their students and so the 
        teachers have the tools effectively to help their student to 
        learn to read.
            ``(3) To provide assistance to States and local educational 
        agencies in selecting or developing screening instruments, 
        rigorous diagnostic reading assessments, and classroom-based 
        instructional assessments.
            ``(4) To provide assistance to States and local educational 
        agencies in selecting or developing effective instructional 
        materials, programs, and strategies to implement methods that 
        have been proven to prevent or remediate reading failure within 
        a State or States.
            ``(5) To strengthen coordination among schools, early 
        literacy programs, and family literacy programs in order to 
        improve reading achievement for all children.

``SEC. 1222. FORMULA GRANTS TO STATES; COMPETITIVE SUBGRANTS TO LOCAL 
              AGENCIES.

    ``(a) In General.--In the case of each State educational agency 
that in accordance with section 1224 submits to the Secretary an 
application for a 5-year period, the Secretary, subject to the 
application's approval, shall make a grant to the State educational 
agency for the uses specified in subsections (c) and (d). The grant 
shall consist of the allotment determined for the State under 
subsection (b).
    ``(b) Determination of Amount of Allotment.--
            ``(1) In general.--From the total amount made available to 
        carry out this subpart for any fiscal year and not reserved 
        under section 1226, the Secretary shall allot among each of the 
        50 States, the District of Columbia, and the Commonwealth of 
        Puerto Rico, in accordance with paragraph (2)--
                    ``(A) 100 percent of such remaining amount for each 
                of the fiscal years 2002 and 2003; and
                    ``(B) 75 percent of such remaining amount for each 
                of the fiscal years 2004 through 2008.
            ``(2) State allotments.--The Secretary shall allot the 
        amount made available under paragraph (1) for a fiscal year 
        among the States in proportion to the amount all local 
        educational agencies in a State would receive under section 
        1124.
            ``(3) Reallotment.--If any State does not apply for an 
        allotment under this section for any fiscal year, or if the 
        State's application is not approved, the Secretary shall 
        reallot such amount to the remaining States in accordance with 
        paragraph (2).
            ``(4) Reservation from appropriations.--From the amounts 
        appropriated under section 1002(b)(2) to carry out this subpart 
        for a fiscal year, the Secretary shall--
                    ``(A) reserve \1/2\ of 1 percent for allotments for 
                the Virgin Islands, Guam, American Samoa and the 
                Commonwealth of the Northern Mariana Islands, to be 
                distributed among these outlying areas on the basis of 
                their relative need, as determined by the Secretary in 
                accordance with the purposes of this subpart; and
                    ``(B) reserve \1/2\ of 1 percent for allotments for 
                the Secretary of the Interior for programs under this 
                subpart in schools operated or funded by the Bureau of 
                Indian Affairs.
    ``(c) Subgrants to Local Educational Agencies.--
            ``(1) Distribution of subgrants.--The Secretary may make a 
        grant to a State under this section only if the State agrees to 
        expend at least 80 percent of the amount of the funds provided 
        under the grant for the purpose of making, in accordance with 
        this subsection, competitive subgrants to eligible local 
        educational agencies.
            ``(2) Notice.--A State receiving a grant under this section 
        shall provide notice to all eligible local educational agencies 
        in the State of the availability of competitive subgrants under 
        this subsection and of the requirements for applying for the 
        subgrants.
            ``(3) Local application.--To be eligible to receive a 
        subgrant under this subsection, an eligible local educational 
        agency shall submit an application to the State at such time, 
        in such manner, and containing such information as the State 
        may reasonably require.
            ``(4) Definition of eligible local educational agency.--In 
        this subpart the term `eligible local educational agency' means 
        a local educational agency that--
                    ``(A) has a high number or percentage of students 
                in grades kindergarten through 3 reading below grade 
                level; and
                    ``(B) has--
                            ``(i) jurisdiction over a geographic area 
                        that includes an area designated as an 
                        empowerment zone, or an enterprise community, 
                        under part I of subchapter U of chapter 1 of 
                        the Internal Revenue Code of 1986;
                            ``(ii) jurisdiction over at least 1 school 
                        that is identified for school improvement under 
                        section 1116(c); or
                            ``(iii) a high number or percentage of 
                        children who are counted under section 1124(c), 
                        in comparison to other local educational 
                        agencies in the State.
            ``(5) State requirement.--In distributing subgrant funds to 
        local educational agencies, a State shall--
                    ``(A) provide the funds in sufficient amounts to 
                enable the local educational agencies to improve 
                reading; and
                    ``(B) provide the funds in amounts related to the 
                number or percentage of students in kindergarten 
                through grade 3 who are reading below grade level.
            ``(6) Local eligibility.--In distributing subgrant funds 
        under this subsection, a local educational agency shall provide 
        funds only to schools that--
                    ``(A) have a high percentage of students in grades 
                kindergarten through 3 reading below grade level;
                    ``(B) are identified for school improvement under 
                section 1116(c); or
                    ``(C) have a high percentage of children counted 
                under section 1124(c).
            ``(7) Local uses of funds.--Subject to paragraph (8), a 
        local educational agency that receives a subgrant under this 
        subsection shall use the funds provided under the subgrant to 
        carry out the following activities:
                    ``(A) Selecting or developing, and administering, 
                screening instruments, rigorous diagnostic reading 
                assessments, and classroom-based instructional 
                assessments.
                    ``(B) Selecting or developing, and implementing, a 
                program or programs of reading instruction grounded on 
                scientifically based reading research that--
                            ``(i) includes the major components of 
                        reading instruction; and
                            ``(ii) provides such instruction to all 
                        children, including children who--
                                    ``(I) may have reading 
                                difficulties;
                                    ``(II) are at risk of being 
                                referred to special education based on 
                                these difficulties;
                                    ``(III) have been evaluated under 
                                section 614 of the Individuals with 
                                Disabilities Education Act but, in 
                                accordance with section 614(b)(5) of 
                                such Act, and have not been identified 
                                as being a child with a disability (as 
                                defined in section 602 of such Act);
                                    ``(IV) are being served under such 
                                Act primarily due to being identified 
                                as being a child with a specific 
                                learning disability (as defined in 
                                section 602 of such Act) related to 
                                reading; or
                                    ``(V) are identified as having 
                                limited English proficiency (as defined 
                                in section 3501).
                    ``(C) Procuring and implementing instructional 
                materials, including education technology such as 
                software and other digital curricula, grounded on 
                scientifically based reading research.
                    ``(D) Providing professional development for 
                teachers of grades kindergarten through 3 that--
                            ``(i) will prepare these teachers in all of 
                        the major components of reading instruction;
                            ``(ii) shall include--
                                    ``(I) information on instructional 
                                materials, programs, strategies, and 
                                approaches grounded on scientifically 
                                based reading research, including early 
                                intervention and reading remediation 
                                materials, programs, and approaches; 
                                and
                                    ``(II) instruction in the use of 
                                rigorous diagnostic reading assessments 
                                and other procedures that effectively 
                                identify students who may be at risk 
                                for reading failure or who are having 
                                difficulty reading; and
                            ``(iii) shall be provided by eligible 
                        professional development providers.
                    ``(E) Promoting reading and library programs that 
                provide access to engaging reading material.
                    ``(F) Providing training to individuals who 
                volunteer to be reading tutors for students to enable 
                the volunteers to support instructional practices that 
                are based on scientific reading research and being used 
                by the student's teacher.
                    ``(G) Assisting parents, through the use of 
                materials, programs, strategies and approaches 
                (including family literacy services), that are based on 
                scientific reading research, to help support their 
                children's reading development.
                    ``(H) Collecting and summarizing data--
                            ``(i) to document the effectiveness of this 
                        subpart in individual schools and in the local 
                        educational agency as a whole; and
                            ``(ii) to stimulate and accelerate 
                        improvement by identifying the schools that 
                        produce significant gains in reading 
                        achievement.
                    ``(I) Reporting data for all students and 
                categories of students identified under section 
                1111(b)(2)(B)(v).
    ``(9) Local planning and administration.--A local educational 
agency that receives a subgrant under this subsection may use not more 
than 5 percent of the funds provided under the subgrant for planning 
and administration.
    ``(d) Other State Uses of Funds.--
            ``(1) In general.--A State educational agency that receives 
        a grant under this section may expend not more than a total of 
        20 percent of the grant funds to carry out the activities 
        described in paragraphs (3), (4), and (5).
            ``(2) Priority.--A State shall give priority to carrying 
        out the activities described in paragraphs (3), (4), and (5) 
        for schools described in subsection (c)(6).
            ``(3) Professional development.--A State may expend not 
        more than 100 percent of the amount of the funds made available 
        under paragraph (1) to develop and implement a program of 
        professional development for teachers of grades kindergarten 
        through 3 that--
                    ``(A) will prepare these teachers in all of the 
                major components of reading instruction;
                    ``(B) shall include--
                            ``(i) information on instructional 
                        materials, programs, strategies, and approaches 
                        grounded on scientifically based reading 
                        research, including early intervention and 
                        reading remediation materials, programs, and 
                        approaches; and
                            ``(ii) instruction in the use of rigorous 
                        diagnostic reading assessments and other 
                        procedures that effectively identify students 
                        who may be at risk for reading failure or who 
                        are having difficulty reading; and
                    ``(C) shall be provided by eligible professional 
                development providers.
            ``(4) Technical assistance for local educational agencies 
        and schools.--A State may expend not more than 25 percent of 
        the amount of the funds made available under paragraph (1) for 
        one or more of the following authorized State activities:
                    ``(A) Assisting local educational agencies in 
                accomplishing the tasks required to design and 
                implement a program under this subpart, including--
                            ``(i) selecting and implementing a program 
                        or programs of reading instruction grounded on 
                        scientifically based reading research;
                            ``(ii) selecting or developing rigorous 
                        diagnostic reading assessments; and
                            ``(iii) identifying eligible professional 
                        development providers to help prepare reading 
                        teachers to teach students using the programs 
                        and assessments described in subparagraphs (A) 
                        and (B).
                    ``(B) Providing expanded opportunities to students 
                in grades kindergarten through 3 within eligible local 
                educational agencies for receiving reading assistance 
                from alternative providers that includes--
                            ``(i) a rigorous diagnostic reading 
                        assessment; and
                            ``(ii) instruction in the major components 
                        of reading that is based on scientific reading 
                        research.
            ``(5) Planning, administration, and reporting.--
                    ``(A) In general.--A State may expend not more than 
                25 percent of the amount of the funds made available 
                under paragraph (1) for the activities described in 
                this paragraph.
                    ``(B) Planning and administration.--A State that 
                receives a grant under this section may expend funds 
                made available under subparagraph (A) for planning and 
                administration relating to the State uses of funds 
                authorized under this subpart, including the following:
                            ``(i) Administering the distribution of 
                        competitive subgrants to local educational 
                        agencies under sections 1222 and 1223.
                            ``(ii) Collecting and summarizing data--
                                    ``(I) to document the effectiveness 
                                of this subpart in individual local 
                                educational agencies and in the State 
                                as a whole; and
                                    ``(II) to stimulate and accelerate 
                                improvement by identifying the local 
                                educational agencies that produce 
                                significant gains in reading 
                                achievement.
                    ``(C) Annual reporting.--
                            ``(i) In general.--A State that receives a 
                        grant under this section shall expend funds 
                        provided under the grant to provide the 
                        Secretary annually with a report on the 
                        implementation of this subpart. The report 
                        shall include evidence that the State is 
                        fulfilling its obligations under this subpart. 
                        The report shall also include the data required 
                        under subsections (c)(7) (H) and (I) to be 
                        reported to the State by local educational 
                        agencies. The report shall include a specific 
                        identification of those local educational 
                        agencies that report significant gains in 
                        reading achievement overall and such gains 
                        based on disaggregated data, reported in the 
                        same manner as data is reported under 
                        subsection (c)(7)(I).
                            ``(ii) Privacy protection.--Data in the 
                        report shall be reported in a manner that 
                        protects the privacy of individuals.
                            ``(iii) Contract.--To the extent 
                        practicable, a State shall enter into a 
                        contract with an entity that conducts 
                        scientifically based reading research, under 
                        which contract the entity will assist the State 
                        in producing the reports required to be 
                        submitted under this subparagraph.
            ``(6) Prime time family reading time.--A State that 
        receives a grant under this section may expend funds provided 
        under the grant for a humanities-based family literacy program 
        which bonds families around the acts of reading and using 
        public libraries.

``SEC. 1223. COMPETITIVE GRANTS TO STATES; COMPETITIVE SUBGRANTS TO 
              LOCAL AGENCIES.

    ``(a) In General.--For fiscal year 2004 and each succeeding fiscal 
year the Secretary is authorized to award grants, on a competitive 
basis according to the criteria described in subsection (b) (2) or (3), 
to any State educational agency that received a grant under section 
1222, for the use specified in subsection (c).
    ``(b) Amount Available for Grants; Criteria for Grants.--
            ``(1) Amount.--From the total amount made available to 
        carry out this subpart for fiscal year 2004 or any succeeding 
        fiscal year that is not used under section 1222 or reserved 
        under section 1226, the Secretary shall award grants under this 
        section according to the criteria described in paragraph (2) or 
        (3).
            ``(2) Criteria for awarding competitive grants to states.--
        In carrying out this section, the Secretary shall award grants 
        to those State educational agencies that--
                    ``(A) for 2 consecutive years, make or exceed 
                adequate yearly progress in reading for all third 
                graders, in the aggregate, who attend schools served by 
                the local educational agencies receiving funding under 
                this subpart;
                    ``(B) for each of the same such consecutive 2 
                years, demonstrate that an increasing percentage of 
                third graders in each of the groups described in 
                section 1111(b)(2)(B)(v)(II) in the schools served by 
                the local educational agencies receiving funds under 
                this subpart are reaching the proficient level in 
                reading; and
                    ``(C) for each of the same such consecutive 2 
                years, demonstrate that schools receiving funds under 
                this subpart are improving the reading skills of 
                students in the first and second grades based on 
                screening, diagnostic, or classroom-based instructional 
                assessments.
            ``(3) Interim criteria for awarding competitive grants to 
        states.--If a State has not defined adequate yearly progress 
        and implemented an assessment of reading in grade 3 as required 
        under subsection 1111(b), then the Secretary shall award grants 
        to such State educational agency on the basis of evidence 
        supplied by the State that, for 2 consecutive years, increasing 
        percentages of students are reading at grade level or above in 
        grades 1 through 3 in schools receiving funds under this 
        subpart.
            ``(4) Continuation of performance awards.--For any State 
        that receives a competitive grant under this section, the 
        Secretary shall make an award for each of the following, 
        consecutive years that the State demonstrates it is continuing 
        to meet the criteria described in paragraph (2) or (3).
            ``(5) Distribution of performance grants.--
                    ``(A) In general.--The Secretary shall make a grant 
                to each State with an application approved under this 
                section in proportion to the number of poor children 
                determined under section 1124(c)(1)(A) for the State as 
                compared to the number of such poor children in all 
                States with applications approved in that year.
                    ``(B) Application contents.--A State that desires 
                to receive a grant under this section shall submit an 
                application to the Secretary at such time, in such 
                manner, and accompanied by such information as the 
                Secretary may require. Each such application shall 
                include the following:
                            ``(i) Evidence that the State has carried 
                        out its obligations under this subpart.
                            ``(ii) Evidence that the State has met the 
                        criteria described in paragraph (2) or (3).
                            ``(iii) The amount of funds being requested 
                        by the State and a description of the criteria 
                        the State intends to use in distributing 
                        subgrants to local educational agencies under 
                        this section to continue or expand activities 
                        under this subpart.
                            ``(iv) Any additional evidence that 
                        demonstrates success in the implementation of 
                        this subpart.
    ``(c) Subgrants to Local Educational Agencies.--
            ``(1) In general.--The Secretary may make a grant to a 
        State under this section only if the State agrees to expend 100 
        percent of the amount of the funds provided under the grant for 
        the purpose of making competitive subgrants in accordance with 
        this subsection to local educational agencies.
            ``(2) Notice.--A State receiving a grant under this section 
        shall provide notice to all eligible local educational agencies 
        in the State of the availability of competitive subgrants under 
        this subsection and of the requirements for applying for the 
        subgrants.
            ``(3) Application.--To apply for a subgrant under this 
        subsection, an eligible local educational agency shall submit 
        an application to the State at such time, in such manner, and 
        containing such information as the State may reasonably 
        require.
            ``(4) Distribution.--A State shall distribute funds under 
        this section, on a competitive basis, based on the following 
        criteria:
                    ``(A) Evidence that a local educational agency has 
                carried out its obligations under this subpart.
                    ``(B) Evidence that a local educational agency has, 
                for 2 consecutive years, made or exceeded adequate 
                yearly progress in reading for all third graders, in 
                the aggregate, who attend schools receiving funds under 
                this subpart.
                    ``(C) Evidence that a local educational agency has, 
                for each of the same such consecutive 2 years, 
                demonstrated that an increasing percentage of the third 
                graders in each of the groups described in section 
                1111(b)(2)(B)(v)(II) in schools receiving funds under 
                this subpart are reaching the proficient level in 
                reading.
                    ``(D) Evidence that a local educational agency has, 
                for each of the same such consecutive 2 years, 
                demonstrated that schools receiving funds under this 
                subpart are improving the reading skills of students in 
                the first and second grades based on screening, 
                diagnostic, or classroom-based instructional 
                assessments.
                    ``(E) The amount of funds being requested by a 
                local educational agency in its application under 
                paragraph (3) and the description in such application 
                of how such funds will be used to support the 
                continuation or expansion of the agency's programs 
                under this subpart.
                    ``(F) Evidence that the local educational agency 
                will work with other eligible local educational 
                agencies in the State who have not received a subgrant 
                under this subsection to assist such nonreceiving 
                agencies in increasing the reading achievement of 
                students.
                    ``(G) Any additional evidence in a local 
                educational agency's application under paragraph (3) 
                that demonstrates success in the implementation of this 
                subpart.
            ``(5) Interim criteria for distributing funds.--If a State 
        has not defined adequate yearly progress or implemented an 
        assessment of reading in grade 3 as required under subsection 
        1111(b), then such State shall award grants, on a competitive 
        basis according to the criteria described in paragraphs (4) 
        (A), (E), (F), and (G), to local educational agencies that for 
        2 consecutive years increased the percentage of students 
        reading at grade level or above in grades 1 through 3 in 
        schools receiving funds under this subpart.
            ``(6) Local uses of funds.--A local educational agency that 
        receives a subgrant under this subsection shall use the funds 
        provided under the subgrant to carry out the activities 
        described in subparagraphs (A) through (G) of section 
        1222(c)(7).

``SEC. 1224. STATE APPLICATIONS.

    ``(a) Applications.--
            ``(1) In general.--A State educational agency that desires 
        to receive a grant under section 1222 shall submit an 
        application to the Secretary at such time and in such form as 
        the Secretary may require. The application shall contain the 
        information described in subsection (b).
            ``(2) Special application provisions.--For those States 
        that have received a grant under part C of title II (as such 
        part was in effect on the day preceding the date of enactment 
        of the Better Education for Students and Teachers Act), the 
        Secretary shall establish a modified set of requirements for an 
        application under this section that takes into account the 
        information already submitted and approved under that program 
        and minimizes the duplication of effort on the part of such 
        States.
    ``(b) Contents.--An application under this section shall contain 
the following:
            ``(1) An assurance that the Governor of the State, in 
        consultation with the State educational agency, has established 
        a reading and literacy partnership described in subsection (d), 
        and a description of how such partnership--
                    ``(A) coordinated the development of the 
                application; and
                    ``(B) will assist in the oversight and evaluation 
                of the State's activities under this subpart.
            ``(2) A description of a strategy to expand, continue, or 
        modify activities commenced under part C of title II of this 
        Act (as such part was in effect on the day before the date of 
        the enactment of the Better Education for Students and Teachers 
        Act).
            ``(3) An assurance that the State will submit to the 
        Secretary, at such time and in such manner as the Secretary may 
        reasonably require, a State plan containing a description of 
        the following:
                    ``(A) How the State will assist local educational 
                agencies in identifying rigorous diagnostic reading 
                assessments.
                    ``(B) How the State will assist local educational 
                agencies in identifying instructional materials, 
                programs, strategies, and approaches, grounded on 
                scientifically based reading research, including early 
                intervention and reading remediation materials, 
                programs and approaches.
                    ``(C) How the State educational agency will ensure 
                that professional development activities related to 
                reading instruction and provided under this subpart 
                are--
                            ``(i) coordinated with other Federal, State 
                        and local level funds and used effectively to 
                        improve instructional practices for reading; 
                        and
                            ``(ii) based on scientifically based 
                        reading research.
                    ``(D) How the activities assisted under this 
                subpart will address the needs of teachers and other 
                instructional staff in schools receiving assistance 
                under this subpart and will effectively teach students 
                to read.
                    ``(E) The extent to which the activities will 
                prepare teachers in all the major components of reading 
                instruction.
                    ``(F) How subgrants made by the State educational 
                agency under this subpart will meet the requirements of 
                this subpart, including how the State educational 
                agency will ensure that local educational agencies 
                receiving subgrants under this subpart will use 
                practices based on scientifically based reading 
                research.
                    ``(G) How the State educational agency will, to the 
                extent practicable, make grants to subgrantees in both 
                rural and urban areas.
                    ``(H) How the State educational agency--
                            ``(i) will build on, and promote 
                        coordination among, literacy programs in the 
                        State (including federally funded programs such 
                        as the Adult Education and Family Literacy Act 
                        and the Individuals with Disabilities Education 
                        Act), in order to increase the effectiveness of 
                        the programs in improving reading for adults 
                        and children and to avoid duplication of the 
                        efforts of the program; and
                            ``(ii) will assess and evaluate, on a 
                        regular basis, local educational agency 
                        activities assisted under this subpart, with 
                        respect to whether they have been effective in 
                        achieving the purposes of this subpart.
    ``(c) Approval of Applications.--
            ``(1) In general.--The Secretary shall approve an 
        application of a State under this section only if such 
        application meets the requirement of this section.
            ``(2) Peer review.--
                    ``(A) In general.--The Secretary, in consultation 
                with the National Institute for Literacy, shall convene 
                a panel to evaluate applications under this section. At 
                a minimum, the panel shall include--
                            ``(i) 3 individuals selected by the 
                        Secretary;
                            ``(ii) 3 individuals selected by the 
                        National Institute for Literacy;
                            ``(iii) 3 individuals selected by the 
                        National Research Council of the National 
                        Academy of Sciences; and
                            ``(iv) 3 individuals selected by the 
                        National Institute of Child Health and Human 
                        Development.
                    ``(B) Experts.--The panel shall include experts who 
                are competent, by virtue of their training, expertise, 
                or experience, to evaluate applications under this 
                section, and experts who provide professional 
                development to teachers of reading to children and 
                adults, and experts who provide professional 
                development to other instructional staff, based on 
                scientifically based reading research.
                    ``(C) Recommendations.--The panel shall recommend 
                grant applications from States under this section to 
                the Secretary for funding or for disapproval.
    ``(d) Reading and Literacy Partnerships.--
            ``(1) Required participants.--In order for a State to 
        receive a grant under this subpart, the Governor of the State, 
        in consultation with the State educational agency, shall 
        establish a reading and literacy partnership consisting of at 
        least the following participants:
                    ``(A) The Governor of the State.
                    ``(B) The chief State school officer.
                    ``(C) The chairman and the ranking member of each 
                committee of the State legislature that is responsible 
                for education policy.
                    ``(D) A representative, selected jointly by the 
                Governor and the chief State school officer, of at 
                least one local educational agency that is eligible to 
                receive a subgrant under section 1222.
                    ``(E) A representative, selected jointly by the 
                Governor and the chief State school officer, of a 
                community-based organization working with children to 
                improve their reading skills, particularly a community-
                based organization using tutors and scientifically 
                based reading research.
                    ``(F) State directors of appropriate Federal or 
                State programs with a strong reading component.
                    ``(G) A parent of a public or private school 
                student or a parent who educates their child or 
                children in their home, selected jointly by the 
                Governor and the chief State school officer.
                    ``(H) A teacher who successfully teaches reading 
                and an instructional staff member, selected jointly by 
                the Governor and the chief State school officer.
                    ``(I) A family literacy service provider selected 
                jointly by the Governor and the chief State school 
                officer.
            ``(2) Optional participants.--A reading and literacy 
        partnership may include additional participants, who shall be 
        selected jointly by the Governor and the chief State school 
        officer, and who may include a representative of--
                    ``(A) an institution of higher education operating 
                a program of teacher preparation based on 
                scientifically based reading research in the State;
                    ``(B) a local educational agency;
                    ``(C) a private nonprofit or for-profit eligible 
                professional development provider providing instruction 
                based on scientifically based reading research;
                    ``(D) an adult education provider;
                    ``(E) a volunteer organization that is involved in 
                reading programs; or
                    ``(F) a school library or a public library that 
                offers reading or literacy programs for children or 
                families.
            ``(3) Preexisting partnership.--If, before the date of the 
        enactment of the Better Education for Students and Teachers 
        Act, a State established a consortium, partnership, or any 
        other similar body that was considered a reading and literacy 
        partnership for purposes of part C of title II of this Act (as 
        such part was in effect on the day before the date of the 
        enactment of the Better Education for Students and Teachers 
        Act), that consortium, partnership, or body may be considered a 
        reading and literacy partnership for purposes of this subpart 
        notwithstanding that it does not satisfy the requirements of 
        paragraph (1).

``SEC. 1225. ACCOUNTABILITY FOR RESULTS.

    ``(a) State Accountability.--
            ``(1) Reductions.--If the Secretary makes the determination 
        described in paragraphs (2) or (3) for 2 consecutive years, 
        then the Secretary shall reduce the size of a State's grant 
        under this subpart for the subsequent fiscal year.
            ``(2) Determination.--The determination referred to in 
        paragraph (1) is the determination, made on the basis of data 
        from the State assessment system described in section 1111, 
        that a State--
                    ``(A) failed to make adequate yearly progress in 
                reading (as defined in the State's plan under section 
                1111) for all third graders, in the aggregate, who 
                attend schools receiving funds under this subpart; and
                    ``(B) failed to increase the percentage of third 
                graders within each of the groups described in section 
                1111(b)(2)(B)(v)(II) who attend schools receiving funds 
                under this subpart in reaching the proficient level in 
                reading as compared to the previous school year.
            ``(3) Interim criteria for determination.--If a State has 
        not defined adequate yearly progress and implemented an 
        assessment of reading in grade 3 as required under subsection 
        1111(b), then the determination referred to in paragraph (1) is 
        the determination that such State failed to increase the 
        percentage of students reading at grade level or above in 
        grades 1 through 3 in schools receiving funds under this 
        subpart.
            ``(4) Continued reductions.--If the Secretary makes the 
        determination described in paragraph (2) or (3) for a third or 
        subsequent consecutive year, then the Secretary shall continue 
        to reduce a States's grant under this subpart in each such 
        consecutive year.
    ``(b) Local Educational Agency Accountability.--
            ``(1) Reductions.--If the State educational agency makes 
        the determination described in paragraph (2) or (3) for a local 
        educational agency receiving funds under this subpart for 2 
        consecutive years, then the State shall make that local 
        educational agency a priority for professional development and 
        technical assistance provided under section 1222(d) (3) and 
        (4).
            ``(2) Determination.--The determination referred to in 
        paragraph (1) is the determination, made on the basis of data 
        from the State assessment system described in section 1111, 
        that a local educational agency--
                    ``(A) failed to make adequate yearly progress in 
                reading (as defined in the State plan under section 
                1111) for all third graders, in the aggregate, who 
                attend schools that are served by the agency and 
                receive funds under this subpart; and
                    ``(B) failed to increase the percentage of third 
                graders, within each of the groups described in section 
                1111(b)(2)(B)(v)(II), who attend schools that are 
                served by the agency and receive funds under this 
                subpart, reaching the proficient level in reading as 
                compared to the previous school year.
            ``(3) Interim criteria for determination.--If a State has 
        not defined adequate yearly progress and implemented an 
        assessment of reading in grade 3 as required under subsection 
        1111(b), then the determination referred to in paragraph (1) is 
        the determination that a local educational agency failed to 
        increase the percentage of students reading at grade level or 
        above in grades 1 through 3 in schools receiving funds under 
        this subpart.
            ``(4) Continued reductions.--If the State makes the 
        determination described in paragraph (2) for a third or 
        subsequent consecutive year, then the State shall continue to 
        provide professional development and technical assistance and 
        may require the local educational agency to institute a new 
        reading curriculum that has demonstrated success in improving 
        the reading skills of students in kindergarten through third 
        grade, replace school district or school staff involved in the 
        planning or implementation of the reading curriculum, or take 
        some other action or actions to address the cause or causes for 
        such failure to demonstrate progress. If the local educational 
        agency refuses to take such action, then the State may reduce 
        or eliminate the grant to that local educational agency.

``SEC. 1226. RESERVATIONS FROM APPROPRIATIONS.

    ``From the amounts appropriated to carry out this subpart for a 
fiscal year, the Secretary--
            ``(1) may reserve not more than 1 percent to carry out 
        section 1227 (relating to national activities); and
            ``(2) shall reserve $5,000,000 to carry out section 1228 
        (relating to information dissemination).

``SEC. 1227. NATIONAL ACTIVITIES.

    ``(a) In General.--From funds reserved under section 1226, the 
Secretary--
            ``(1) shall contract with an independent outside 
        organization for a 5-year, rigorous, scientifically valid, 
        quantitative evaluation of this subpart;
            ``(2) may provide technical assistance in achieving the 
        purposes of this subpart to States, local educational agencies, 
        and schools requesting such assistance; and
            ``(3) shall, at a minimum, evaluate the impact of services 
        provided to children under this subpart with respect to their 
        referral to and eligibility for special education services 
        under the Individuals with Disabilities Education Act (based on 
        their difficulties learning to read).
    ``(b) Process.--Such evaluation shall be conducted by an 
organization outside of the Department that is capable of designing and 
carrying out an independent evaluation that identifies the effects of 
specific activities carried out by States and local educational 
agencies under this subpart on improving reading instruction. Such 
evaluation shall use only data relating to students served under this 
subpart and shall take into account factors influencing student 
performance that are not controlled by teachers or education 
administrators.
    ``(c) Analysis.--Such evaluation shall include the following:
            ``(1) An analysis of the relationship between each of the 
        essential components of reading instruction and overall reading 
        proficiency.
            ``(2) An analysis of whether assessment tools used by 
        States and local educational agencies measure the essential 
        components of reading instruction.
            ``(3) An analysis of how State reading standards correlate 
        with the essential components of reading instruction.
            ``(4) An analysis of whether the receipt of a discretionary 
        grant under this subpart results in an increase in the number 
        of children who read proficiently.
            ``(5) A measurement of the extent to which specific 
        instructional materials improve reading proficiency.
            ``(6) A measurement of the extent to which specific 
        rigorous diagnostic reading and screening assessment tools 
        assist teachers in identifying specific reading deficiencies.
            ``(7) A measurement of the extent to which professional 
        development programs implemented by States using funds received 
        under this subpart improve reading instruction.
            ``(8) A measurement of how well students preparing to enter 
        the teaching profession are prepared to teach the essential 
        components of reading instruction.
            ``(9) An analysis of changes in students' interest in 
        reading and time spent reading outside of school.
            ``(10) Any other analysis or measurement pertinent to this 
        subpart that is determined to be appropriate by the Secretary.
    ``(d) Program Improvement.--The findings of the evaluation 
conducted under this section shall be provided to States and local 
educational agencies on a periodic basis for use in program 
improvement.

``SEC. 1228. INFORMATION DISSEMINATION.

    ``(a) In General.--From funds reserved under section 1226(2), the 
National Institute for Literacy, in collaboration with the Departments 
of Education and Health and Human Services, including the National 
Institute for Child Health and Human Development, shall--
            ``(1) disseminate information on scientifically based 
        reading research pertaining to children, youth, and adults;
            ``(2) identify and disseminate information about schools, 
        local educational agencies, and States that effectively 
        developed and implemented reading programs that meet the 
        requirements of this subpart, including those effective States, 
        local educational agencies, and schools identified through the 
        evaluation and peer review provisions of this subpart; and
            ``(3) support the continued identification of 
        scientifically based reading research that can lead to improved 
        reading outcomes for children, youth, and adults through 
        evidenced-based assessments of the scientific research 
        literature.
    ``(b) Dissemination and Coordination.--At a minimum, the National 
Institute for Literacy shall disseminate such information to recipients 
of Federal financial assistance under titles I and III, the Head Start 
Act, the Individuals With Disabilities Education Act, and the Adult 
Education and Family Literacy Act. In carrying out this section, the 
National Institute for Literacy shall, to the extent practicable, 
utilize existing information and dissemination networks developed and 
maintained through other public and private entities including through 
the Department and the National Center for Family Literacy.
    ``(c) Use of Funds.--The National Institute for Literacy may use 
not more than 5 percent of the funds made available under section 
1226(2) for administrative purposes directly related to carrying out of 
activities authorized by this section.

``SEC. 1229. IMPROVING LITERACY THROUGH SCHOOL LIBRARIES.

    ``(a) In General.--From funds made available under subsection (d) 
for a fiscal year, the Secretary shall allot to each State educational 
agency having an application approved under subsection (c)(1) an amount 
that bears the same relation to the funds as the amount the State 
educational agency received under part A for the preceding fiscal year 
bears to the amount all such State educational agencies received under 
part A for the preceding fiscal year, to increase literacy and reading 
skills by improving school libraries.
    ``(b) Within-State Allocations.--Each State educational agency 
receiving an allotment under subsection (a) for a fiscal year--
            ``(1) may reserve not more than 3 percent to provide 
        technical assistance, disseminate information about school 
        library media programs that are effective and based on 
        scientifically based research, and pay administrative costs, 
        related to activities under this section; and
            ``(2) shall allocate the allotted funds that remain after 
        making the reservation under paragraph (1) to each local 
        educational agency in the State having an application approved 
        under subsection (c)(2) (for activities described in subsection 
        (f)) in an amount that bears the same relation to such 
        remainder as the amount the local educational agency received 
        under part A for the fiscal year bears to the amount received 
        by all such local educational agencies in the State for the 
        fiscal year.
    ``(c) Applications.--
            ``(1) State educational agency.--Each State educational 
        agency desiring assistance under this section shall submit to 
        the Secretary an application at such time, in such manner, and 
        containing such information as the Secretary shall require. The 
        application shall contain a description of--
                    ``(A) how the State educational agency will assist 
                local educational agencies in meeting the requirements 
                of this section and in using scientifically based 
                research to implement effective school library media 
                programs; and
                    ``(B) the standards and techniques the State 
                educational agency will use to evaluate the quality and 
                impact of activities carried out under this section by 
                local educational agencies to determine the need for 
                technical assistance and whether to continue funding 
                the agencies under this section.
            ``(2) Local educational agency.--Each local educational 
        agency desiring assistance under this section shall submit to 
        the State educational agency an application at such time, in 
        such manner, and containing such information as the State 
        educational agency shall require. The application shall contain 
        a description of--
                    ``(A) a needs assessment relating to the need for 
                school library media improvement, based on the age and 
                condition of school library media resources, including 
                book collections, access of school library media 
                centers to advanced technology, and the availability of 
                well-trained, professionally certified school library 
                media specialists, in schools served by the local 
                educational agency;
                    ``(B) how the local educational agency will 
                extensively involve school library media specialists, 
                teachers, administrators, and parents in the activities 
                assisted under this section, and the manner in which 
                the local educational agency will carry out the 
                activities described in subsection (f) using programs 
                and materials that are grounded in scientifically based 
                research;
                    ``(C) the manner in which the local educational 
                agency will effectively coordinate the funds and 
                activities provided under this section with Federal, 
                State, and local funds and activities under this 
                subpart and other literacy, library, technology, and 
                professional development funds and activities; and
                    ``(D) the manner in which the local educational 
                agency will collect and analyze data on the quality and 
                impact of activities carried out under this section by 
                schools served by the local educational agency.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $500,000,000 for fiscal year 
2002 and such sums as may be necessary for each of the 6 succeeding 
fiscal years.
    ``(e) Within-LEA Distribution.--Each local educational agency 
receiving funds under this section shall distribute--
            ``(1) 50 percent of the funds to schools served by the 
        local educational agency that are in the top quartile in terms 
        of percentage of students enrolled from families with incomes 
        below the poverty line; and
            ``(2) 50 percent of the funds to schools that have the 
        greatest need for school library media improvement based on the 
        needs assessment described in subsection (c)(2)(A).
    ``(f) Local Activities.--Funds under this section may be used to--
            ``(1) acquire up-to-date school library media resources, 
        including books;
            ``(2) acquire and utilize advanced technology, incorporated 
        into the curricula of the school, to develop and enhance the 
        information literacy, information retrieval, and critical 
        thinking skills of students;
            ``(3) facilitate Internet links and other resource-sharing 
        networks among schools and school library media centers, and 
        public and academic libraries, where possible;
            ``(4) provide professional development described in 
        1222(c)(7)(D) for school library media specialists, and 
        activities that foster increased collaboration between school 
        library media specialists, teachers, and administrators; and
            ``(5) provide students with access to school libraries 
        during nonschool hours, including the hours before and after 
        school, during weekends, and during summer vacation periods.
    ``(g) Accountability and Continuation of Funds.--Each local 
educational agency that receives funding under this section for a 
fiscal year shall be eligible to continue to receive the funding for a 
third or subsequent fiscal year only if the local educational agency 
demonstrates to the State educational agency that the local educational 
agency has increased--
            ``(1) the availability of, and the access to, up-to-date 
        school library media resources in the elementary schools and 
        secondary schools served by the local educational agency; and
            ``(2) the number of well-trained, professionally certified 
        school library media specialists in those schools.
    ``(h) Applicability.--The provisions of this subpart (other than 
this section) shall not apply to this section.
    ``(i) Supplement Not Supplant.--Funds made available under this 
section shall be used to supplement and not supplant other Federal, 
State, and local funds expended to carry out activities relating to 
library, technology, or professional development activities.
    ``(j) National Activities.--From the total amount made available 
under subsection (d) for each fiscal year, the Secretary shall reserve 
not more than 1 percent for annual, independent, national evaluations 
of the activities assisted under this section. The evaluations shall be 
conducted not later than 3 years after the date of enactment of the 
Better Education for Students and Teachers Act, and each year 
thereafter.

``SEC. 1230. DEFINITIONS.

    ``For purposes of this subpart:
            ``(1) Eligible professional development provider.--The term 
        `eligible professional development provider' means a provider 
        of professional development in reading instruction to teachers 
        that is based on scientifically based reading research.
            ``(2) Instructional staff.--The term `instructional 
        staff'--
                    ``(A) means individuals who have responsibility for 
                teaching children to read; and
                    ``(B) includes principals, teachers, supervisors of 
                instruction, librarians, library school media 
                specialists, teachers of academic subjects other than 
                reading, and other individuals who have responsibility 
                for assisting children to learn to read.
            ``(3) Major components of reading instruction.--The term 
        `major components of reading instruction' means systematic 
        instruction that includes--
                    ``(A) phonemic awareness;
                    ``(B) phonics;
                    ``(C) vocabulary development;
                    ``(D) reading fluency; and
                    ``(E) reading comprehension strategies.
            ``(4) Reading.--The term `reading' means a complex system 
        of deriving meaning from print that requires all of the 
        following:
                    ``(A) The skills and knowledge to understand how 
                phonemes, or speech sounds, are connected to print.
                    ``(B) The ability to decode unfamiliar words.
                    ``(C) The ability to read fluently.
                    ``(D) Sufficient background information and 
                vocabulary to foster reading comprehension.
                    ``(E) The development of appropriate active 
                strategies to construct meaning from print.
                    ``(F) The development and maintenance of a 
                motivation to read.
            ``(5) Rigorous diagnostic reading assessment.--The term 
        `rigorous diagnostic reading assessment' means a diagnostic 
        reading assessment that--
                    ``(A) is valid, reliable, and grounded in 
                scientifically based reading research;
                    ``(B) measures progress in phonemic awareness and 
                phonics, vocabulary development, reading fluency, or 
                reading comprehension; and
                    ``(C) identifies students who may be at risk for 
                reading failure or who are having difficulty reading.
            ``(6) Scientifically based reading research.--The term 
        `scientifically based reading research'--
                    ``(A) means research that applies rigorous, 
                systematic, and objective procedures to obtain valid 
                knowledge relevant to reading development, reading 
                instruction, and reading difficulties; 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 the 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 peer-reviewed 
                        journal or approved by a panel of independent 
                        experts through a comparably rigorous, 
                        objective, and scientific review.''.

SEC. 122. EARLY READING INITIATIVE.

    Part B of title I (20 U.S.C. 6361 et seq.) is amended further by 
adding at the end the following:

                    ``Subpart 3--Early Reading First

``SEC. 1241. PURPOSES.

    ``The purposes of this subpart are as follows:
            ``(1) To support local efforts to enhance the early 
        language, literacy, and prereading development of preschool age 
        children, particularly those from low-income families, through 
        strategies and professional development that are based on 
        scientifically based research.
            ``(2) To provide preschool age children with cognitive 
        learning opportunities in high-quality language and literature-
        rich environments, so that the children can attain the 
        fundamental knowledge and skills necessary for optimal reading 
        development in kindergarten and beyond.
            ``(3) To demonstrate language and literacy activities based 
        on scientifically based research that support the age-
        appropriate development of--
                    ``(A) spoken language and oral comprehension 
                abilities;
                    ``(B) understanding that spoken language can be 
                analyzed into discrete words, and awareness that words 
                can be broken into sequences of syllables and phonemes;
                    ``(C) automatic recognition of letters of the 
                alphabet and understanding that letters or groups of 
                letters systematically represent the component sounds 
                of the language; and
                    ``(D) knowledge of the purposes and conventions of 
                print.
            ``(4) To integrate these learning opportunities with 
        learning opportunities at preschools, child care agencies, and 
        Head Start agencies, and with family literacy services.

``SEC. 1242. LOCAL EARLY READING FIRST GRANTS.

    ``(a) Program Authorized.--From amounts appropriated under section 
1002(b)(3), the Secretary shall award grants, on a competitive basis, 
for periods of not more than 5 years, to eligible applicants to enable 
the eligible applicants to carry out the authorized activities 
described in subsection (e).
    ``(b) Definition of Eligible Applicant.--In this subpart the term 
`eligible applicant' means--
            ``(1) one or more local educational agencies that are 
        eligible to receive a subgrant under subpart 2;
            ``(2) one or more public or private organizations or 
        agencies, acting on behalf of 1 or more programs that serve 
        preschool age children (such as a program at a Head Start 
        center, a child care program, or a family literacy program), 
        which organizations or agencies shall be located in a community 
        served by a local educational agency described in paragraph 
        (1); or
            ``(3) one or more local educational agencies described in 
        paragraph (1) in collaboration with one or more organizations 
        or agencies described in paragraph (2).
    ``(c) Applications.--An eligible applicant that desires to receive 
a grant under this section shall submit an application to the Secretary 
which shall include a description of--
            ``(1) the programs to be served by the proposed project, 
        including demographic and socioeconomic information on the 
        preschool age children enrolled in the programs;
            ``(2) how the proposed project will prepare and provide 
        ongoing assistance to staff in the programs, through 
        professional development and other support, to provide high-
        quality language, literacy and prereading activities using 
        scientifically based research, for preschool age children;
            ``(3) how the proposed project will provide services and 
        utilize materials that are based on scientifically based 
        research on early language acquisition, prereading activities, 
        and the development of spoken language skills;
            ``(4) how the proposed project will help staff in the 
        programs to meet the diverse needs of preschool age children in 
        the community better, including such children with limited 
        English proficiency, disabilities, or other special needs;
            ``(5) how the proposed project will help preschool age 
        children, particularly such children experiencing difficulty 
        with spoken language, prereading, and literacy skills, to make 
        the transition from preschool to formal classroom instruction 
        in school;
            ``(6) if the eligible applicant has received a subgrant 
        under subpart 2, how the activities conducted under this 
        subpart will be coordinated with the eligible applicant's 
        activities under subpart 2 at the kindergarten through third-
        grade level;
            ``(7) how the proposed project will evaluate the success of 
        the activities supported under this subpart in enhancing the 
        early language, literacy, and prereading development of 
        preschool age children served by the project; and
            ``(8) such other information as the Secretary may require.
    ``(d) Approval of Applications.--The Secretary shall select 
applicants for funding under this subpart on the basis of the quality 
of the applications, in consultation with the National Institute for 
Child Health and Human Development, the National Institute for 
Literacy, and the National Academy of Sciences. The Secretary shall 
select applications for approval under this subpart on the basis of a 
peer review process.
    ``(e) Authorized Activities.-- An eligible applicant that receives 
a grant under this subpart shall use the funds provided under the grant 
to carry out the following activities:
                    ``(A) Providing preschool age children with high-
                quality oral language and literature-rich environments 
                in which to acquire language and prereading skills.
                    ``(B) Providing professional development that is 
                based on scientifically based research knowledge of 
                early language and reading development for the staff of 
                the eligible applicant and that will assist in 
                developing the preschool age children's--
                            ``(i) spoken language (including 
                        vocabulary, the contextual use of speech, and 
                        syntax) and oral comprehension abilities;
                            ``(ii) understanding that spoken language 
                        can be analyzed into discrete words, and 
                        awareness that words can be broken into 
                        sequences of syllables and phonemes;
                            ``(iii) automatic recognition of letters of 
                        the alphabet and understanding that letters or 
                        groups of letters systematically represent the 
                        component sounds of the language; and
                            ``(iv) knowledge of the purposes and 
                        conventions of print.
                    ``(C) Identifying and providing activities and 
                instructional materials that are based on 
                scientifically based research for use in developing the 
                skills and abilities described in subparagraph (B).
                    ``(D) Acquiring, providing training for, and 
                implementing screening tools or other appropriate 
                measures that are based on scientifically based 
                research to determine whether preschool age children 
                are developing the skills described in this subsection.
                    ``(E) Integrating such instructional materials, 
                activities, tools, and measures into the programs 
                offered by the eligible applicant.
    ``(f) Award Amounts.--The Secretary may establish a maximum award 
amount, or ranges of award amounts, for grants under this subpart.

``SEC. 1243. FEDERAL ADMINISTRATION.

    ``The Secretary shall consult with the Secretary of Health and 
Human Services in order to coordinate the activities undertaken under 
this subpart with preschool age programs administered by the Department 
of Health and Human Services.

``SEC. 1244. INFORMATION DISSEMINATION.

    ``From the funds the National Institute for Literacy receives under 
section 1228, the National Institute for Literacy, in consultation with 
the Secretary, shall disseminate information regarding projects 
assisted under this subpart that have proven effective.

``SEC. 1245. REPORTING REQUIREMENTS.

    ``Each eligible applicant receiving a grant under this subpart 
shall report annually to the Secretary regarding the eligible 
applicant's progress in addressing the purposes of this subpart. Such 
report shall include, at a minimum, a description of--
            ``(1) the activities, materials, tools, and measures used 
        by the eligible applicant;
            ``(2) the professional development activities offered to 
        the staff of the eligible applicant who serve preschool age 
        children and the amount of such professional development;
            ``(3) the types of programs and ages of children served; 
        and
            ``(4) the results of the evaluation described in section 
        1242(c)(7).

``SEC. 1246. EVALUATIONS.

    ``From the total amount appropriated under section 1002(b)(3) for 
the period beginning October 1, 2002 and ending September 30, 2008, the 
Secretary shall reserve not more than $5,000,000 to conduct an 
independent evaluation of the effectiveness of this subpart.

``SEC. 1247. ADDITIONAL RESEARCH.

    ``From the amount appropriated under section 1002(b)(3) for each of 
the fiscal years 2002 through 2006, the Secretary shall reserve not 
more than $3,000,000 to conduct, in consultation with National 
Institute for Child Health and Human Development, the National 
Institute for Literacy, and the Department of Health and Human 
Services, additional research on language and literacy development for 
preschool age children.''.

                PART C--EDUCATION OF MIGRATORY CHILDREN

SEC. 131. PROGRAM PURPOSE.

    Section 1301 (20 U.S.C. 6391) is amended--
            (1) by redesignating paragraphs (2) through (5) as 
        paragraphs (3) through (7), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) ensure that migratory children who move among the 
        States are not penalized in any manner by disparities among the 
        States in curriculum, graduation requirements, and State 
        student performance and content standards;'';
            (3) in paragraph (5) (as so redesignated), by striking 
        ``and'' after the semicolon;
            (4) in paragraph (6) (as so redesignated), by striking the 
        period and inserting ``; and''; and
            (5) by adding at the end the following:
            ``(7) ensure that migratory children receive full and 
        appropriate opportunities to meet the same challenging State 
        content and student performance standards that all children are 
        expected to meet.''.

SEC. 132. STATE APPLICATION.

    Section 1304 (20 U.S.C. 6394) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``a 
                comprehensive'' and all that follows through ``1306;'' 
                and inserting ``the full range of services that are 
                available for migratory children from appropriate 
                local, State, and Federal educational programs;'';
                    (B) by redesignating paragraphs (2) through (6) as 
                paragraphs (3) through (7), respectively; and
                    (C) by inserting after paragraph (1) the following:
            ``(2) a description of joint planning efforts that will be 
        made with respect to programs assisted under this Act, local, 
        State, and Federal programs, and bilingual education programs 
        under subpart 1 of part A of title III;''; and
            (2) in subsection (c), by amending paragraph (3) to read as 
        follows:
            ``(3) in the planning and operation of programs and 
        projects at both the State and local agency operating level 
        there is consultation with parent advisory councils for 
        programs of one school year in duration, and that all such 
        programs and projects are carried out--
                    ``(A) in a manner consistent with section 1118 
                unless extraordinary circumstances make implementation 
                with such section impractical; and
                    ``(B) in a format and language understandable to 
                the parents;''.

SEC. 133. COMPREHENSIVE PLAN.

    (a) Comprehensive Plan.--Section 1306(a)(1) (20 U.S.C. 6396(a)(1)) 
is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``the Goals 2000: Educate America 
                Act,''; and
                    (B) by striking ``14306'' and inserting ``5506''; 
                and
            (2) in subparagraph (B), by striking ``14302;'' and 
        inserting ``5502, if--
                            ``(i) the special needs of migratory 
                        children are specifically addressed in the 
                        comprehensive State plan;
                            ``(ii) the comprehensive State plan is 
                        developed in collaboration with parents of 
                        migratory children; and
                            ``(iii) the comprehensive State planning is 
                        not used to supplant State efforts regarding, 
                        or administrative funding for, this part;''.
    (b) Authorized Activities.--Section 1306(b)(3) (20 U.S.C. 
6396(b)(3)) is amended by inserting ``, and shall meet the special 
educational needs of migrant children before using funds under this 
part for schoolwide programs under section 1114'' before the period.

SEC. 134. COORDINATION.

    Section 1308 (20 U.S.C. 6398) is amended--
            (1) by amending subsection (b) to read as follows:
    ``(b) Access to Information on Migrant Students.--
            ``(1) Information system.--(A) The Secretary shall 
        establish an information system for electronically exchanging, 
        among the States, health and educational information regarding 
        all students served under this part. Such information may 
        include--
                    ``(i) immunization records and other health 
                information;
                    ``(ii) elementary and secondary academic history 
                (including partial credit), credit accrual, and results 
                from State assessments required under this title;
                    ``(iii) other academic information essential to 
                ensuring that migrant children achieve to high 
                standards; and
                    ``(iv) eligibility for services under the 
                Individuals with Disabilities Education Act.
            ``(B) The Secretary shall publish, not later than 120 days 
        after the date of enactment of the Better Education for 
        Students and Teachers Act, a notice in the Federal Register 
        seeking public comment on the proposed data elements that each 
        State receiving funds under this part shall be required to 
        collect for purposes of electronic transfer of migrant student 
        information, the requirements for immediate electronic access 
        to such information, and the educational agencies eligible to 
        access such information.
            ``(C) Such system of electronic access to migrant student 
        information shall be operational not later than 1 year after 
        the date of enactment of the Better Education for Students and 
        Teachers Act.
            ``(D) For the purpose of carrying out this subsection in 
        any fiscal year, the Secretary shall reserve not more than 
        $10,000,000 of the amount appropriated to carry out this part 
        for such year.
            ``(2) Report to congress.--(A) Not later than April 30, 
        2003, the Secretary shall report to the Committee on Health, 
        Education, Labor, and Pensions of the Senate and the Committee 
        on Education and the Workforce of the House of Representatives 
        the Secretary's findings and recommendations regarding services 
        under this part, and shall include in this report, 
        recommendations for the interim measures that may be taken to 
        ensure continuity of services under this part.
            ``(B) The Secretary shall assist States in developing 
        effective methods for the transfer of student records and in 
        determining the number of students or full-time equivalent 
        students in each State if such interim measures are 
        required.''.
            (2) in subsection (c), by striking ``$6,000,000'' and 
        inserting ``$10,000,000'';
            (3) in subsection (d)(1), by striking ``$1,500,000'' and 
        inserting ``$3,000,000''; and
            (4) by adding at the end the following:
    ``(e) Data Collection.--The Secretary shall direct the National 
Center for Education Statistics to collect data on migratory 
children.''.

    PART D--INITIATIVES FOR NEGLECTED, DELINQUENT, OR AT RISK YOUTH

SEC. 141. INITIATIVES FOR NEGLECTED, DELINQUENT, OR AT RISK YOUTH.

    Part D of title I (20 U.S.C. 6421 et seq.) is amended to read as 
follows:

  ``PART D--INITIATIVES FOR NEGLECTED, DELINQUENT, OR AT RISK STUDENTS

  ``Subpart 1--Prevention and Intervention Programs for Children and 
    Youth Who Are Neglected, Delinquent, or at Risk of Dropping Out

``SEC. 1401. PURPOSE; PROGRAM AUTHORIZED.

    ``(a) Purpose.--It is the purpose of this subpart--
            ``(1) to improve educational services for children in local 
        and State institutions for neglected or delinquent children and 
        youth so that such children and youth have the opportunity to 
        meet the same challenging State content standards and 
        challenging State student performance standards that all 
        children in the State are expected to meet;
            ``(2) to provide such children and youth with the services 
        needed to make a successful transition from 
        institutionalization to further schooling or employment; and
            ``(3) to prevent at-risk youth from dropping out of school 
        and to provide dropouts and youth returning from institutions 
        with a support system to ensure their continued education.
    ``(b) Program Authorized.--In order to carry out the purpose of 
this subpart the Secretary shall make grants to State educational 
agencies to enable such agencies to award subgrants to State agencies 
and local educational agencies to establish or improve programs of 
education for neglected or delinquent children and youth at risk of 
dropping out of school before graduation.

``SEC. 1402. PAYMENTS FOR PROGRAMS UNDER THIS SUBPART.

    ``(a) Agency Subgrants.--Based on the allocation amount computed 
under section 1412, the Secretary shall allocate to each State 
educational agency amounts necessary to make subgrants to State 
agencies under chapter 1.
    ``(b) Local Subgrants.--Each State shall retain, for purposes of 
carrying out chapter 2, funds generated throughout the State under part 
A of title I based on youth residing in local correctional facilities, 
or attending community day programs for delinquent children and youth.

                   ``Chapter 1--State Agency Programs

``SEC. 1411. ELIGIBILITY.

    ``A State agency is eligible for assistance under this chapter if 
such State agency is responsible for providing free public education 
for children--
            ``(1) in institutions for neglected or delinquent children 
        and youth;
            ``(2) attending community day programs for neglected or 
        delinquent children and youth; or
            ``(3) in adult correctional institutions.

``SEC. 1412. ALLOCATION OF FUNDS.

    ``(a) Subgrants to State Agencies.--
            ``(1) In general.--Each State agency described in section 
        1411 (other than an agency in the Commonwealth of Puerto Rico) 
        is eligible to receive a subgrant under this chapter, for each 
        fiscal year, an amount equal to the product of--
                    ``(A) the number of neglected or delinquent 
                children and youth described in section 1411 who--
                            ``(i) are enrolled for at least 15 hours 
                        per week in education programs in adult 
                        correctional institutions; and
                            ``(ii) are enrolled for at least 20 hours 
                        per week--
                                    ``(I) in education programs in 
                                institutions for neglected or 
                                delinquent children and youth; or
                                    ``(II) in community day programs 
                                for neglected or delinquent children 
                                and youth; 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, nor more than 48 percent, of the 
                average per-pupil expenditure in the United States.
            ``(2) Special rule.--The number of neglected or delinquent 
        children and youth determined under paragraph (1) shall--
                    ``(A) be determined by the State agency by a 
                deadline set by the Secretary, except that no State 
                agency shall be required to determine the number of 
                such children and youth on a specific date set by the 
                Secretary; and
                    ``(B) be adjusted, as the Secretary determines is 
                appropriate, to reflect the relative length of such 
                agency's annual programs.
    ``(b) Subgrants to State Agencies in Puerto Rico.--For each fiscal 
year, the amount of the subgrant for which a State agency in the 
Commonwealth of Puerto Rico is eligible under this chapter shall be 
equal to--
            ``(1) the number of children and youth counted under 
        subsection (a)(1)(A) for the Commonwealth of Puerto Rico; 
        multiplied by
            ``(2) the product of--
                    ``(A) 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; and
                    ``(B) 32 percent of the average per-pupil 
                expenditure in the United States.
    ``(c) Ratable Reductions in Case of Insufficient Appropriations.--
If the amount appropriated for any fiscal year for subgrants under 
subsections (a) and (b) is insufficient to pay the full amount for 
which all State agencies are eligible under such subsections, the 
Secretary shall ratably reduce each such amount.

``SEC. 1413. STATE REALLOCATION OF FUNDS.

    ``If a State educational agency determines that a State agency does 
not need the full amount of the subgrant for which such State agency is 
eligible under this chapter for any fiscal year, the State educational 
agency may reallocate the amount that will not be needed to other 
eligible State agencies that need additional funds to carry out the 
purpose of this subpart, in such amounts as the State educational 
agency shall determine.

``SEC. 1414. STATE PLAN AND STATE AGENCY APPLICATIONS.

    ``(a) State Plan.--
            ``(1) In general.--Each State educational agency that 
        desires to receive a grant under this chapter shall submit, for 
        approval by the Secretary, a plan for meeting the needs of 
        neglected and delinquent children and youth and, where 
        applicable, children and youth at risk of dropping out of 
        school, that is integrated with other programs under this Act, 
        or other Acts, as appropriate, consistent with section 5506.
            ``(2) Contents.--Each such State plan shall--
                    ``(A) describe the program goals, objectives, and 
                performance measures established by the State that will 
                be used to assess the effectiveness of the program in 
                improving academic and vocational skills of children in 
                the program;
                    ``(B) provide that, to the extent feasible, such 
                children will have the same opportunities to learn as 
                such children would have if such children were in the 
                schools of local educational agencies in the State; and
                    ``(C) contain assurances that the State educational 
                agency will--
                            ``(i) ensure that programs assisted under 
                        this subpart will be carried out in accordance 
                        with the State plan described in this 
                        subsection;
                            ``(ii) carry out the evaluation 
                        requirements of section 1431;
                            ``(iii) ensure that the State agencies 
                        receiving subgrants under this chapter comply 
                        with all applicable statutory and regulatory 
                        requirements; and
                            ``(iv) provide such other information as 
                        the Secretary may reasonably require.
            ``(3) Duration of the plan.--Each State plan shall--
                    ``(A) remain in effect for the duration of the 
                State's participation under this subpart; and
                    ``(B) be periodically reviewed and revised by the 
                State, as necessary, to reflect changes in the State's 
                strategies and programs under this subpart.
    ``(b) Secretarial Approval; Peer Review.--
            ``(1) In general.--The Secretary shall approve each State 
        plan that meets the requirements of this part.
            ``(2) Peer review.--The Secretary may review any State plan 
        with the assistance and advice of individuals with relevant 
        expertise.
    ``(c) State Agency Applications.--Any State agency that desires to 
receive funds to carry out a program under this chapter shall submit an 
application to the State educational agency that--
            ``(1) describes the procedures to be used, consistent with 
        the State plan under section 1111, to assess the educational 
        needs of the children to be served;
            ``(2) provides assurances that in making services available 
        to youth in adult correctional institutions, priority will be 
        given to such youth who are likely to complete incarceration 
        within a 2-year period;
            ``(3) describes the program, including a budget for the 
        first year of the program, with annual updates to be provided 
        to the State educational agency;
            ``(4) describes how the program will meet the goals and 
        objectives of the State plan;
            ``(5) describes how the State agency will consult with 
        experts and provide the necessary training for appropriate 
        staff, to ensure that the planning and operation of 
        institution-wide projects under section 1416 are of high 
        quality;
            ``(6) describes how the agency will carry out evaluation 
        activities and how the results of the most recent evaluation 
        are used to plan and improve the program;
            ``(7) includes data showing that the agency has maintained 
        the fiscal effort required of a local educational agency, in 
        accordance with section 4;
            ``(8) describes how the programs will be coordinated with 
        other appropriate State and Federal programs, such as programs 
        under title I of the Workforce Investment Act of 1998, 
        vocational education programs, State and local dropout 
        prevention programs, and special education programs;
            ``(9) describes how appropriate professional development 
        will be provided to teachers and other staff;
            ``(10) designates an individual in each affected 
        institution to be responsible for issues relating to the 
        transition of children and youth from the institution to 
        locally operated programs;
            ``(11) describes how the agency will, endeavor to 
        coordinate with businesses for training and mentoring for 
        participating children and youth;
            ``(12) provides assurances that the agency will assist in 
        locating alternative programs through which students can 
        continue their education if students are not returning to 
        school after leaving the correctional facility;
            ``(13) provides assurances that the agency will work with 
        parents to secure parents' assistance in improving the 
        educational achievement of their children and preventing their 
        children's further involvement in delinquent activities;
            ``(14) provides assurances that the agency works with 
        special education youth in order to meet an existing 
        individualized education program and an assurance that the 
        agency will notify the youth's local school if the youth--
                    ``(A) is identified as in need of special education 
                services while the youth is in the facility; and
                    ``(B) intends to return to the local school;
            ``(15) provides assurances that the agency will work with 
        youth who dropped out of school before entering the facility to 
        encourage the youth to reenter school once the term of the 
        youth has been completed or provide the youth with the skills 
        necessary to gain employment, continue the education of the 
        youth, or achieve a secondary school diploma or its recognized 
        equivalent if the youth does not intend to return to school;
            ``(16) provides assurances that teachers and other 
        qualified staff are also trained to work with children with 
        disabilities and other students with special needs taking into 
        consideration the unique needs of such students;
            ``(17) describes any additional services provided to 
        children and youth, such as career counseling, and assistance 
        in securing student loans and grants; and
            ``(18) provides assurances that the program under this 
        chapter will be coordinated with any programs operated under 
        the Juvenile Justice and Delinquency Prevention Act of 1974 or 
        other comparable programs, if applicable.

``SEC. 1415. USE OF FUNDS.

    ``(a) Uses.--
            ``(1) In general.--A State agency shall use funds received 
        under this chapter only for programs and projects that--
                    ``(A) are consistent with the State plan under 
                section 1414(a); and
                    ``(B) concentrate on providing participants with 
                the knowledge and skills needed to make a successful 
                transition to secondary school completion, further 
                education, or employment.
            ``(2) Programs and projects.--Such programs and projects--
                    ``(A) may include the acquisition of equipment;
                    ``(B) shall be designed to support educational 
                services that--
                            ``(i) except for institution-wide projects 
                        under section 1416, are provided to children 
                        and youth identified by the State agency as 
                        failing, or most at risk of failing, to meet 
                        the State's challenging State content standards 
                        and challenging State student performance 
                        standards;
                            ``(ii) supplement and improve the quality 
                        of the educational services provided to such 
                        children and youth by the State agency; and
                            ``(iii) afford such children and youth an 
                        opportunity to learn to such challenging State 
                        standards;
                    ``(C) shall be carried out in a manner consistent 
                with section 1120A and part H of title I; and
                    ``(D) may include the costs of evaluation 
                activities.
    ``(b) Supplement, Not Supplant.--A program under this chapter that 
supplements the number of hours of instruction students receive from 
State and local sources shall be considered to comply with the 
supplement, not supplant requirement of section 1120A without regard to 
the subject areas in which instruction is given during those hours.

``SEC. 1416. INSTITUTION-WIDE PROJECTS.

    ``A State agency that provides free public education for children 
and youth in an institution for neglected or delinquent children and 
youth (other than an adult correctional institution) or attending a 
community-day program for such children may use funds received under 
this part to serve all children in, and upgrade the entire educational 
effort of, that institution or program if the State agency has 
developed, and the State educational agency has approved, a 
comprehensive plan for that institution or program that--
            ``(1) provides for a comprehensive assessment of the 
        educational needs of all youth in the institution or program 
        serving juveniles;
            ``(2) provides for a comprehensive assessment of the 
        educational needs of youth aged 20 and younger in adult 
        facilities who are expected to complete incarceration within a 
        two-year period;
            ``(3) describes the steps the State agency has taken, or 
        will take, to provide all youth under age 21 with the 
        opportunity to meet challenging State content standards and 
        challenging State student performance standards in order to 
        improve the likelihood that the youths will complete secondary 
        school, attain a secondary diploma or its recognized 
        equivalent, or find employment after leaving the institution;
            ``(4) describes the instructional program, pupil services, 
        and procedures that will be used to meet the needs described in 
        paragraph (1), including, to the extent feasible, the provision 
        of mentors for students;
            ``(5) specifically describes how such funds will be used;
            ``(6) describes the measures and procedures that will be 
        used to assess student progress;
            ``(7) describes how the agency has planned, and will 
        implement and evaluate, the institution-wide or program-wide 
        project in consultation with personnel providing direct 
        instructional services and support services in institutions or 
        community-day programs for neglected or delinquent children and 
        personnel from the State educational agency; and
            ``(8) includes an assurance that the State agency has 
        provided for appropriate training for teachers and other 
        instructional and administrative personnel to enable such 
        teachers and personnel to carry out the project effectively.

``SEC. 1417. THREE-YEAR PROGRAMS OR PROJECTS.

    ``If a State agency operates a program or project under this 
chapter in which individual children are likely to participate for more 
than 1 year, the State educational agency may approve the State 
agency's application for a subgrant under this chapter for a period of 
not more than 3 years.

``SEC. 1418. TRANSITION SERVICES.

    ``(a) Transition Services.--Each State agency shall reserve not 
less than 5 percent and not more than 30 percent of the amount such 
agency receives under this chapter for any fiscal year to support--
            ``(1) projects that facilitate the transition of children 
        and youth from State-operated institutions to local educational 
        agencies; or
            ``(2) the successful reentry of youth offenders, who are 
        age 20 or younger and have received a secondary school diploma 
        or its recognized equivalent, into postsecondary education and 
        vocational training programs through strategies designed to 
        expose the youth to, and prepare the youth for, postsecondary 
        education and vocational training programs, such as--
                    ``(A) preplacement programs that allow adjudicated 
                or incarcerated students to audit or attend courses on 
                college, university, or community college campuses, or 
                through programs provided in institutional settings; 
                    ``(B) worksite schools, in which institutions of 
                higher education and private or public employers 
                partner to create programs to help students make a 
                successful transition to postsecondary education and 
                employment;
                    ``(C) essential support services to ensure the 
                success of the youth, such as--
                            ``(i) personal, vocational, and academic 
                        counseling;
                            ``(ii) placement services designed to place 
                        the youth in a university, college, or junior 
                        college program;
                            ``(iii) health services;
                            ``(iv) information concerning, and 
                        assistance in obtaining, available student 
                        financial aid;
                            ``(v) exposure to cultural events; and
                            ``(vi) job placement services.
    ``(b) Conduct of Projects.--A project supported under this section 
may be conducted directly by the State agency, or through a contract or 
other arrangement with one or more local educational agencies, other 
public agencies, or private nonprofit organizations.
    ``(c) Construction.--Nothing in this section shall be construed to 
prohibit a school that receives funds under subsection (a) from serving 
neglected and delinquent children and youth simultaneously with 
students with similar educational needs, in the same educational 
settings where appropriate.

``SEC. 1419. EVALUATION; TECHNICAL ASSISTANCE; ANNUAL MODEL PROGRAM.

    ``The Secretary shall reserve not more than 5 percent of the amount 
made available to carry out this chapter for a fiscal year--
            ``(1) to develop a uniform model to evaluate the 
        effectiveness of programs assisted under this chapter;
            ``(2) to provide technical assistance to and support the 
        capacity building of State agency programs assisted under this 
        chapter; and
            ``(3) to create an annual model correctional youthful 
        offender program event under which a national award is given to 
        programs assisted under this chapter which demonstrate program 
        excellence in--
                    ``(A) transition services for reentry in and 
                completion of regular or other education programs 
                operated by a local educational agency;
                    ``(B) transition services to job training programs 
                and employment, utilizing existing support programs 
                such as One Stop Career Centers;
                    ``(C) transition services for participation in 
                postsecondary education programs;
                    ``(D) the successful reentry into the community; 
                and
                    ``(E) the impact on recidivism reduction for 
                juvenile and adult programs.

                   ``Chapter 2--Local Agency Programs

``SEC. 1421. PURPOSE.

    ``The purpose of this chapter is to support the operation of local 
educational agency programs that involve collaboration with locally 
operated correctional facilities to--
            ``(1) carry out high quality education programs to prepare 
        youth for secondary school completion, training, and 
        employment, or further education;
            ``(2) provide activities to facilitate the transition of 
        such youth from the correctional program to further education 
        or employment; and
            ``(3) operate dropout prevention programs in local schools 
        for youth at risk of dropping out of school and youth returning 
        from correctional facilities.

``SEC. 1422. PROGRAMS OPERATED BY LOCAL EDUCATIONAL AGENCIES.

    ``(a) Local Subgrants.--With funds made available under section 
1412(b), the State educational agency shall award subgrants to local 
educational agencies with high numbers or percentages of youth residing 
in locally operated (including county operated) correctional facilities 
for youth (including facilities involved in community day programs).
    ``(b) Special Rule.--A local educational agency which includes a 
correctional facility that operates a school is not required to operate 
a dropout prevention program if more than 30 percent of the youth 
attending such facility will reside outside the boundaries of the local 
educational agency upon leaving such facility.
    ``(c) Notification.--A State educational agency shall notify local 
educational agencies within the State of the eligibility of such 
agencies to receive a subgrant under this chapter.

``SEC. 1423. LOCAL EDUCATIONAL AGENCY APPLICATIONS.

    ``Eligible local educational agencies desiring assistance under 
this chapter shall submit an application to the State educational 
agency, containing such information as the State educational agency may 
require. Each such application shall include--
            ``(1) a description of the program to be assisted;
            ``(2) a description of formal agreements between--
                    ``(A) the local educational agency; and
                    ``(B) correctional facilities and alternative 
                school programs serving youth involved with the 
                juvenile justice system to operate programs for 
                delinquent youth;
            ``(3) as appropriate, a description of how participating 
        schools will coordinate with facilities working with delinquent 
        youth to ensure that such youth are participating in an 
        education program comparable to one operating in the local 
        school such youth would attend;
            ``(4) as appropriate, a description of the dropout 
        prevention program operated by participating schools and the 
        types of services such schools will provide to at-risk youth in 
        participating schools and youth returning from correctional 
        facilities;
            ``(5) as appropriate, a description of the youth expected 
        to be served by the dropout prevention program and how the 
        school will coordinate existing educational programs to meet 
        unique education needs;
            ``(6) as appropriate, a description of how schools will 
        coordinate with existing social and health services to meet the 
        needs of students at risk of dropping out of school and other 
        participating students, including prenatal health care and 
        nutrition services related to the health of the parent and 
        child, parenting and child development classes, child care, 
        targeted re-entry and outreach programs, referrals to community 
        resources, and scheduling flexibility;
            ``(7) as appropriate, a description of any partnerships 
        with local businesses to develop training and mentoring 
        services for participating students;
            ``(8) as appropriate, a description of how the program will 
        involve parents in efforts to improve the educational 
        achievement of their children, assist in dropout prevention 
        activities, and prevent the involvement of their children in 
        delinquent activities;
            ``(9) a description of how the program under this chapter 
        will be coordinated with other Federal, State, and local 
        programs, such as programs under title I of the Workforce 
        Investment Act of 1998 and vocational education programs 
        serving at-risk youth;
            ``(10) a description of how the program will be coordinated 
        with programs operated under the Juvenile Justice and 
        Delinquency Prevention Act of 1974 and other comparable 
        programs, if applicable;
            ``(11) as appropriate, a description of how schools will 
        work with probation officers to assist in meeting the needs of 
        youth returning from correctional facilities;
            ``(12) a description of efforts participating schools will 
        make to ensure correctional facilities working with youth are 
        aware of a child's existing individualized education program; 
        and
            ``(13) as appropriate, a description of the steps 
        participating schools will take to find alternative placements 
        for youth interested in continuing their education but unable 
        to participate in a regular public school program.

``SEC. 1424. USES OF FUNDS.

    ``Funds provided to local educational agencies under this chapter 
may be used, where appropriate, for--
            ``(1) dropout prevention programs which serve youth at 
        educational risk, including pregnant and parenting teens, youth 
        who have come in contact with the juvenile justice system, 
        youth at least one year behind their expected grade level, 
        migrant youth, immigrant youth, students with limited-English 
        proficiency and gang members;
            ``(2) the coordination of health and social services for 
        such individuals if there is a likelihood that the provision of 
        such services, including day care and drug and alcohol 
        counseling, will improve the likelihood such individuals will 
        complete their education; and
            ``(3) programs to meet the unique education needs of youth 
        at risk of dropping out of school, which may include vocational 
        education, special education, career counseling, and assistance 
        in securing student loans or grants.

``SEC. 1425. PROGRAM REQUIREMENTS FOR CORRECTIONAL FACILITIES RECEIVING 
              FUNDS UNDER THIS SECTION.

    ``Each correctional facility having an agreement with a local 
educational agency under section 1423(2) to provide services to youth 
under this chapter shall--
            ``(1) where feasible, ensure educational programs in 
        juvenile facilities are coordinated with the student's home 
        school, particularly with respect to special education students 
        with an individualized education program;
            ``(2) notify the local school of a youth if the youth is 
        identified as in need of special education services while in 
        the facility;
            ``(3) where feasible, provide transition assistance to help 
        the youth stay in school, including coordination of services 
        for the family, counseling, assistance in accessing drug and 
        alcohol abuse prevention programs, tutoring, and family 
        counseling;
            ``(4) provide support programs which encourage youth who 
        have dropped out of school to reenter school once their term 
        has been completed or provide such youth with the skills 
        necessary for such youth to gain employment or seek a secondary 
        school diploma or its recognized equivalent;
            ``(5) work to ensure such facilities are staffed with 
        teachers and other qualified staff who are trained to work with 
        children with disabilities and other students with special 
        needs taking into consideration the unique needs of such 
        children and students;
            ``(6) ensure educational programs in correctional 
        facilities are related to assisting students to meet high 
        educational standards;
            ``(7) use, to the extent possible, technology to assist in 
        coordinating educational programs between the juvenile facility 
        and the community school;
            ``(8) where feasible, involve parents in efforts to improve 
        the educational achievement of their children and prevent the 
        further involvement of such children in delinquent activities;
            ``(9) coordinate funds received under this program with 
        other local, State, and Federal funds available to provide 
        services to participating youth, such as funds made available 
        under title I of the Workforce Investment Act of 1998, and 
        vocational education funds;
            ``(10) coordinate programs operated under this chapter with 
        activities funded under the Juvenile Justice and Delinquency 
        Prevention Act of 1974 and other comparable programs, if 
        applicable; and
            ``(11) if appropriate, work with local businesses to 
        develop training and mentoring programs for participating 
        youth.

``SEC. 1426. ACCOUNTABILITY.

    ``The State educational agency may--
            ``(1) reduce or terminate funding for projects under this 
        chapter if a local educational agency does not show progress in 
        reducing dropout rates for male students and for female 
        students over a 3-year period; and
            ``(2) require juvenile facilities to demonstrate, after 
        receiving assistance under this chapter for 3 years, that there 
        has been an increase in the number of youth returning to 
        school, obtaining a secondary school diploma or its recognized 
        equivalent, or obtaining employment after such youth are 
        released.

                    ``Chapter 3--General Provisions

``SEC. 1431. PROGRAM EVALUATIONS.

    ``(a) Scope of Evaluation.--Each State agency or local educational 
agency that conducts a program under chapter 1 or 2 shall evaluate the 
program, disaggregating data on participation by sex, and if feasible, 
by race, ethnicity, and age, not less than once every 3 years to 
determine the program's impact on the ability of participants to--
            ``(1) maintain and improve educational achievement;
            ``(2) accrue school credits that meet State requirements 
        for grade promotion and secondary school graduation;
            ``(3) make the transition to a regular program or other 
        education program operated by a local educational agency;
            ``(4) complete secondary school (or secondary school 
        equivalency requirements) and obtain employment after leaving 
        the institution; and
            ``(5) participate in postsecondary education and job 
        training programs.
    ``(b) Evaluation Measures.--In conducting each evaluation under 
subsection (a), a State agency or local educational agency shall use 
multiple and appropriate measures of student progress.
    ``(c) Evaluation Results.--Each State agency and local educational 
agency shall--
            ``(1) submit evaluation results to the State educational 
        agency and the Secretary; and
            ``(2) use the results of evaluations under this section to 
        plan and improve subsequent programs for participating children 
        and youth.

``SEC. 1432. DEFINITIONS.

    ``In this subpart:
            ``(1) Adult correctional institution.--The term `adult 
        correctional institution' means a facility in which persons are 
        confined as a result of a conviction for a criminal offense, 
        including persons under 21 years of age.
            ``(2) At-risk youth.--The term `at-risk youth' means school 
        aged youth who are at risk of academic failure, have drug or 
        alcohol problems, are pregnant or are parents, have come into 
        contact with the juvenile justice system in the past, are at 
        least one year behind the expected grade level for the age of 
        the youth, have limited-English proficiency, are gang members, 
        have dropped out of school in the past, or have high 
        absenteeism rates at school.
            ``(3) Community day program.--The term `community day 
        program' means a regular program of instruction provided by a 
        State agency at a community day school operated specifically 
        for neglected or delinquent children and youth.
            ``(4) Institution for neglected or delinquent children and 
        youth.--The term `institution for neglected or delinquent 
        children and youth' means--
                    ``(A) a public or private residential facility, 
                other than a foster home, that is operated for the care 
                of children who have been committed to the institution 
                or voluntarily placed in the institution under 
                applicable State law, due to abandonment, neglect, or 
                death of their parents or guardians; or
                    ``(B) a public or private residential facility for 
                the care of children who have been adjudicated to be 
                delinquent or in need of supervision.''.

                 PART E--NATIONAL ASSESSMENT OF TITLE I

SEC. 151. NATIONAL ASSESSMENT OF TITLE I.

    Section 1501 (20 U.S.C. 6491) is deleted and replaced with the 
following:

``SEC. 1501. NATIONAL ASSESSMENT OF TITLE I.

    ``(a) National Assessment.--The Secretary shall conduct a national 
assessment of the impact of the policies enacted into law under title I 
of the Better Education for Students and Teachers Act on States, local 
educational agencies, schools, and students.
            ``(1) Such assessment shall be planned, reviewed, and 
        conducted in consultation with an independent panel of 
        researchers, State practitioners, local practitioners, and 
        other appropriate individuals.
            ``(2) The assessment shall examine, at a minimum, how 
        schools, local educational agencies, and States have--
                    ``(A) made progress towards the goal of all 
                students reaching the proficient level in at least 
                reading and math based on a State's content and 
                performance standards and the State assessments 
                required under section 1111 and on the National 
                Assessment of Educational Progress;
                    ``(B) implemented scientifically-based reading 
                instruction;
                    ``(C) implemented the requirements for the 
                development of assessments for students in grades 3-8 
                and administered such assessments, including the time 
                and cost required for their development and how well 
                they meet the requirements for assessments described in 
                this title;
                    ``(D) defined adequate yearly progress and what has 
                been the impact of applying this standard for adequacy 
                to schools, local educational agencies, and the State 
                in terms of the numbers not meeting the standard and 
                the year to year changes in such identification for 
                individual schools and local educational agencies;
                    ``(E) publicized and disseminated the local 
                educational agencies report cards to teachers, school 
                staff, students, and the community;
                    ``(F) implemented the school improvement 
                requirements described in section 1116, including--
                            ``(i) the number of schools identified for 
                        school improvement and how many years schools 
                        remain in this status;
                            ``(ii) the types of support provided by the 
                        State and local educational agencies to schools 
                        and local educational agencies identified as in 
                        need of improvement and the impact of such 
                        support on student achievement;
                            ``(iii) the number of parents who take 
                        advantage of the public school choice 
                        provisions of this title, the costs associated 
                        with implementing these provisions, and the 
                        impact of attending another school on student 
                        achievement;
                            ``(iv) the number of parents who choose to 
                        take advantage of the supplemental services 
                        option, the criteria used by the States to 
                        determine the quality of providers, the kinds 
                        of services that are available and utilized, 
                        the costs associated with implementing this 
                        option, and the impact of receiving 
                        supplemental services on student achievement; 
                        and
                            ``(v) the kinds of actions that are taken 
                        with regards to schools and local educational 
                        agencies identified for reconstitution.
                    ``(G) used funds under this title to improve 
                student achievement, including how schools have 
                provided either schoolwide improvement or targeted 
                assistance and provided professional development to 
                school personnel;
                    ``(H) used funds made available under this title to 
                provide preschool and family literacy services and the 
                impact of these services on students' school readiness;
                    ``(I) afforded parents meaningful opportunities to 
                be involved in the education of their children at 
                school and at home;
                    ``(J) distributed resources, including the State 
                reservation of funds for school improvement, to target 
                local educational agencies and schools with the 
                greatest need;
                    ``(K) used State and local educational agency funds 
                and resources to support schools and provide technical 
                assistance to turn around failing schools; and,
                    ``(L) used State and local educational agency funds 
                and resources to help schools with 50 percent or more 
                students living in families below the poverty line meet 
                the requirement of having all teachers fully qualified 
                in four years.
    ``(b) Student Achievement.--As part of the national assessment, the 
Secretary shall evaluate the effectiveness of the programs and services 
carried out under this title, especially part A, in improving student 
achievement. Such evaluation shall--
            ``(1) provide information on what types of programs and 
        services are most likely to help students reach the States' 
        performance standards for proficient and advanced;
            ``(2) examine the effectiveness of comprehensive school 
        reform and improvement strategies for raising student 
        achievement;
            ``(3) to the extent possible, have a longitudinal design 
        that tracks a representative sample of students over time; and
            ``(4) to the extent possible, report on the achievement of 
        the groups of students described in section 
        1111(b)(2)(B)(v)(II).
    ``(c) Developmentally Appropriate Measures.--In conducting the 
national assessment, the Secretary shall use developmentally 
appropriate measures to assess student performance.
    ``(d) Studies and Data Collection.--The Secretary may conduct 
studies and evaluations and collect such data as is necessary to carry 
out this section either directly or through grants and contracts to--
            ``(1) assess the implementation and effectiveness of 
        programs under this title;
            ``(2) collect the data necessary to comply with the 
        Government Performance and Results Act of 1993.
    ``(e) Reporting.--The Secretary shall provide to the relevant 
committees of the Senate and House--
            ``(1) by December 30, 2004, an interim report on the 
        progress and any interim results of the national assessment of 
        title I; and
            ``(2) by December 30, 2007, a final report of the results 
        of the assessment.''.

  PART F--21st CENTURY LEARNING CENTERS; COMPREHENSIVE SCHOOL REFORM; 
                       SCHOOL DROPOUT PREVENTION

SEC. 161. 21ST CENTURY LEARNING CENTERS; COMPREHENSIVE SCHOOL REFORM.

    Title I (20 U.S.C. 6301 et seq.) is amended--
            (1) by redesignating part F as part I;
            (2) by redesignating sections 1601 through 1604 as sections 
        1901 through 1904, respectively; and
            (3) by inserting after part E the following:

           ``PART F--21st CENTURY COMMUNITY LEARNING CENTERS

          ``Subpart 1--21st Century Community Learning Centers

``SEC. 1601. SHORT TITLE.

    ``This subpart may be cited as the `21st Century Community Learning 
Centers Act'.

``SEC. 1602. PURPOSE.

    ``The purpose of this subpart is to provide opportunities to 
communities to establish or expand activities in community learning 
centers that--
            ``(1) provide opportunities for academic enrichment, 
        including providing tutorial services to help students, 
        particularly students who attend low-performing schools, to 
        meet State and local student performance standards in core 
        academic subjects, such as reading and mathematics;
            ``(2) offer students a broad array of additional services, 
        programs, and activities, such as youth development activities, 
        drug and violence prevention programs, art, music, and 
        recreation programs, technology education programs, and 
        character education programs, that are designed to reinforce 
        and complement the regular academic program of participating 
        students; and
            ``(3) offer families of students enrolled in community 
        learning centers opportunities for lifelong learning and 
        literacy development.

``SEC. 1603. DEFINITIONS.

    ``In this subpart:
            ``(1) Community learning center.--The term `community 
        learning center' is an entity that--
                    ``(A)(i) assists students to meet State content and 
                student performance standards in core academic 
                subjects, such as reading and mathematics, by primarily 
                providing to the students, during non-school hours or 
                periods when school is not in session, tutorial and 
                other academic enrichment services in addition to other 
                activities (such as youth development activities, drug 
                and violence prevention programs, art, music, and 
                recreation programs, technology education programs, and 
                character education programs) that reinforce and 
                complement the regular academic program of the 
                students; and
                    ``(ii) offers families of students enrolled in such 
                center opportunities for lifelong learning and literacy 
                development; and
                    ``(B) is operated by 1 or more local educational 
                agencies, community-based organizations, units of 
                general purpose local government, or other public or 
                private entities.
            ``(2) Covered program.--The term `covered program' means a 
        program for which--
                    ``(A) the Secretary made a grant under part I of 
                title X (as in effect on the day before the date of 
                enactment of the Better Education for Students and 
                Teachers Act); and
                    ``(B) the grant period had not ended on that date 
                of enactment.
            ``(3) Eligible organization.--The term `eligible 
        organization' means--
                    ``(A) a local educational agency, a community-based 
                organization, a unit of general purpose local 
                government, or another public or private entity; or
                    ``(B) a consortium of entities described in 
                subparagraph (A).
            ``(4) State.--The term `State' means the State educational 
        agency of a State (as defined in section 3).
            ``(5) Unit of general purpose local government.--The term 
        `unit of general purpose local government' means any city, 
        town, township, parish, village, or other general purpose 
        political subdivision.

``SEC. 1604. PROGRAM AUTHORIZED.

    ``The Secretary is authorized to award grants to States to make 
awards to eligible organizations to plan, implement, or expand 
community learning centers that serve--
            ``(1) students who primarily attend--
                    ``(A) schools eligible for schoolwide programs 
                under section 1114; or
                    ``(B) schools that serve a high percentage of 
                students from low-income families; and
            ``(2) the families of students described in paragraph (1).

``SEC. 1605. ALLOTMENTS TO STATES.

    ``(a) Reservation.--From the funds appropriated under section 
1002(g) for any fiscal year, the Secretary shall reserve--
            ``(1) such amount as may be necessary to make continuation 
        awards for covered programs to grant recipients under part I of 
        title X (under the terms of those grants), as in effect on the 
        day before the effective date of the Better Education for 
        Students and Teachers Act;
            ``(2) not more than 1 percent for national activities, 
        which the Secretary may carry out directly or through grants 
        and contracts, such as providing technical assistance to 
        organizations carrying out programs under this subpart or 
        conducting a national evaluation; and
            ``(3) not more than 1 percent for payments to the outlying 
        areas and the Bureau of Indian Affairs, to be allotted in 
        accordance with their respective needs for assistance under 
        this subpart, as determined by the Secretary, to enable the 
        areas and the Bureau to carry out the objectives of this 
        subpart.
    ``(b) State Allotments.--
            ``(1) Determination.--
                    ``(A) Basis.--From the funds appropriated under 
                section 1002(g) for any fiscal year and remaining after 
                the Secretary makes reservations under subsection (a), 
                the Secretary shall allot to each State for the fiscal 
                year an amount that bears the same relationship to the 
                remainder as the amount the State received under 
                subpart 2 of part A for the preceding fiscal year bears 
                to the amount all States received under that subpart 
                for the preceding fiscal year, except as provided in 
                subparagraph (B).
                    ``(B) Exception.--No State receiving an allotment 
                under subparagraph (A) may receive less than \1/2\ of 1 
                percent of the total amount allotted under subparagraph 
                (A) for a fiscal year.
    ``(2) Definition.--In this subsection, the term `State' means each 
of the 50 States, the District of Columbia, and the Commonwealth of 
Puerto Rico.

``SEC. 1606. STATE PLANS.

    ``Each State seeking a grant under this subpart shall submit to the 
Secretary a plan, which may be submitted as part of a State's 
consolidated plan under section 5502, at such time, in such manner, and 
containing such information as the Secretary may reasonably require. At 
a minimum, the plan shall--
            ``(1) describe how the State will use funds received under 
        this subpart, including funds reserved for State-level 
        activities;
            ``(2) contain an assurance that the State will make awards 
        under this subpart for eligible organizations only to eligible 
        organizations that propose to serve--
                    ``(A) students who primarily attend--
                            ``(i) schools eligible for schoolwide 
                        programs under section 1114; or
                            ``(ii) schools that serve a high percentage 
                        of students from low-income families; and
                    ``(B) the families of students described in 
                subparagraph (A);
            ``(3) describe the procedures and criteria the State will 
        use for reviewing applications and awarding funds to eligible 
        organizations on a competitive basis, which shall include 
        procedures and criteria that take into consideration the 
        likelihood that a proposed center will help participating 
        students meet local content and performance standards by 
        increasing their academic performance and achievement;
            ``(4) describe how the State will ensure that awards made 
        under this subpart are--
                    ``(A) of sufficient size and scope to support high-
                quality, effective programs that are consistent with 
                the purpose of this subpart; and
                    ``(B) in amounts that are consistent with section 
                1608(b);
            ``(5) contain an assurance that the State--
                    ``(A) will not make awards for programs that exceed 
                4 years;
                    ``(B) will ensure an equitable distribution of 
                awards among urban and rural areas of the State; and
                    ``(C) will require each eligible organization 
                seeking such an award to submit a plan describing how 
                the center to be funded through the award will continue 
                after funding under this subpart ends;
            ``(6) describe the State's performance measures for 
        programs carried out under this subpart, including measures 
        relating to increased academic performance and achievement, and 
        how the State will evaluate the effectiveness of those 
        programs;
            ``(7) contain an assurance that funds appropriated to carry 
        out this subpart will be used to supplement, and not supplant, 
        other Federal, State, and local public funds expended to 
        provide programs and activities authorized under this subpart; 
        and
            ``(8) contain an assurance that the State will require 
        eligible organizations to describe in their applications under 
        section 1609 how the transportation needs of participating 
        students will be addressed.

``SEC. 1607. STATE-LEVEL ACTIVITIES.

    ``(a) In General.--A State that receives an allotment under section 
1605 for a fiscal year shall use not more than 6 percent of the funds 
made available through the allotment for State-level activities 
described in paragraphs (1) and (2) of subsection (b).
    ``(b) Activities.--
            ``(1) Planning, peer review, and supervision.--The State 
        may use not more than 3 percent of the funds made available 
        through the allotment to pay for the costs of--
                    ``(A) establishing and implementing a peer review 
                process for applications described in section 1609 
                (including consultation with the Governor and other 
                State agencies responsible for administering youth 
                development programs and adult learning activities);
                    ``(B) supervising the awarding of funds to eligible 
                organizations (in consultation with the Governor and 
                other State agencies responsible for administering 
                youth development programs and adult learning 
                activities);
                    ``(C) planning and supervising the use of funds 
                made available under this subpart, and processing the 
                funds; and
                    ``(D) monitoring activities.
            ``(2) Evaluation, training, and technical assistance.--The 
        State may use not more than 3 percent of the funds made 
        available through the allotment to pay for the costs of--
                    ``(A) comprehensive evaluation (directly, or 
                through a grant or contract) of the effectiveness of 
                programs and activities provided under this subpart; 
                and
                    ``(B) providing training and technical assistance 
                to eligible organizations who are applicants or 
                recipients of awards under this subpart.

``SEC. 1608. AWARDS TO ELIGIBLE ORGANIZATIONS.

    ``(a) Awards.--A State that receives an allotment under section 
1605 for a fiscal year shall use not less than 94 percent of the funds 
made available through the allotment to make awards on a competitive 
basis to eligible organizations (including organizations and entities 
that carry out projects described in section 1609(d)).
    ``(b) Amounts.--The State shall make the awards in amounts of not 
less than $50,000.

``SEC. 1609. LOCAL APPLICATION.

    ``(a) Application.--To be eligible to receive an award under this 
subpart, an eligible organization shall submit an application to the 
State at such time, in such manner, and including such information as 
the State may reasonably require. Each such application shall include--
            ``(1) an evaluation of the needs, available resources, and 
        goals and objectives for the proposed community learning center 
        and a description of how the program proposed to be carried out 
        in the center will address those needs (including the needs of 
        working families); and
            ``(2) a description of the proposed community learning 
        center, including--
                    ``(A) a description of how the eligible 
                organization will ensure that the program proposed to 
                be carried out at the center will reinforce and 
                complement the instructional programs of the schools 
                that students served by the program attend;
                    ``(B) an identification of Federal, State, and 
                local programs that will be combined or coordinated 
                with the proposed program in order to make the most 
                effective use of public resources;
                    ``(C) an assurance that the proposed program was 
                developed, and will be carried out, in active 
                collaboration with the schools the students attend;
                    ``(D) evidence that the eligible organization has 
                experience, or demonstrates promise of success, in 
                providing educational and related activities that will 
                complement and enhance the students' academic 
                performance and achievement and positive youth 
                development;
                    ``(E) an assurance that the program will take place 
                in a safe and easily accessible school or other 
                facility;
                    ``(F) a description of how students participating 
                in the program carried out by the center will travel 
                safely to and from the center and home;
                    ``(G) a description of how the eligible 
                organization will disseminate information about the 
                program to the community in a manner that is 
                understandable and accessible;
                    ``(H) a description of a preliminary plan for how 
                the center will continue after funding under this 
                subpart ends; and
                    ``(I) an assurance that the eligible organization 
                will, to the maximum extent practicable, carry out the 
                proposed program with community-based organizations 
                that have experience in providing before and after 
                school programs, such as the Young Men's Christian 
                Association (YMCA), the Police Athletic and Activities 
                Leagues, Boys and Girls Clubs, and Big Brothers/Big 
                Sisters of America.
    ``(b) Priority.--In making awards under this subpart, the State 
shall give equal priority to applications--
            ``(1) submitted jointly by schools receiving funding under 
        part A and community-based organizations or other eligible 
        organizations;
            ``(2) submitted by such schools or consortia of such 
        schools; and
            ``(3) submitted by community-based organizations or other 
        eligible organizations serving communities in which such 
        schools are located.
    ``(c) Approval of Certain Applications.--The State may approve an 
application under this subpart for a program to be located in a 
facility other than an elementary school or secondary school, only if 
the program--
            ``(1) will be accessible to the students proposed in the 
        application to be served; and
            ``(2) will be as effective as the program would be if the 
        program were located in such a school.
    ``(d) After School Services.--Grant funds awarded under this 
subpart may be used by organizations or entities to implement programs 
to provide after school services for limited English proficient 
students that emphasize language and life skills.

               ``Subpart 2--Community Technology Centers

``SEC. 1611. PURPOSE; PROGRAM AUTHORITY.

    ``(a) Purpose.--It is the purpose of this subpart to assist 
eligible applicants to--
            ``(1) create or expand community technology centers that 
        will provide disadvantaged residents of economically distressed 
        urban and rural communities with access to information 
        technology and related training; and
            ``(2) provide technical assistance and support to community 
        technology centers.
    ``(b) Program Authority.--
            ``(1) In general.--The Secretary is authorized, through the 
        Office of Educational Technology, to award grants, contracts, 
        or cooperative agreements on a competitive basis to eligible 
        applicants in order to assist such applicants in--
                    ``(A) creating or expanding community technology 
                centers; or
                    ``(B) providing technical assistance and support to 
                community technology centers.
            ``(2) Period of award.--The Secretary may award grants, 
        contracts, or cooperative agreements under this subpart for a 
        period of not more than 3 years.
            ``(3) Service of americorps participants.--The Secretary 
        may collaborate with the Chief Executive Officer of the 
        Corporation for National and Community Service on the use of 
        participants in National Service programs carried out under 
        subtitle C of title I of the National and Community Service Act 
        of 1990 in community technology centers.

``SEC. 1612. ELIGIBILITY AND APPLICATION REQUIREMENTS.

    ``(a) Eligible Applicants.--In order to be eligible to receive an 
award under this subpart, an applicant shall--
            ``(1) have the capacity to expand significantly access to 
        computers and related services for disadvantaged residents of 
        economically distressed urban and rural communities (who would 
        otherwise be denied such access); and
            ``(2) be--
                    ``(A) an entity such as a foundation, museum, 
                library, for-profit business, public or private 
                nonprofit organization, or community-based 
                organization;
                    ``(B) an institution of higher education;
                    ``(C) a State educational agency;
                    ``(D) a local education agency; or
                    ``(E) a consortium of entities described in 
                subparagraphs (A), (B), (C), or (D).
    ``(b) Application Requirements.--In order to receive an award under 
this subpart, an eligible applicant shall submit an application to the 
Secretary at such time, and containing such information, as the 
Secretary may require. Such application shall include--
            ``(1) a description of the proposed project, including a 
        description of the magnitude of the need for the services and 
        how the project would expand access to information technology 
        and related services to disadvantaged residents of an 
        economically distressed urban or rural community;
            ``(2) a demonstration of--
                    ``(A) the commitment, including the financial 
                commitment, of entities such as institutions, 
                organizations, business and other groups in the 
                community that will provide support for the creation, 
                expansion, and continuation of the proposed project; 
                and
                    ``(B) the extent to which the proposed project 
                establishes linkages with other appropriate agencies, 
                efforts, and organizations providing services to 
                disadvantaged residents of an economically distressed 
                urban or rural community;
            ``(3) a description of how the proposed project would be 
        sustained once the Federal funds awarded under this subpart 
        end; and
            ``(4) a plan for the evaluation of the program, which shall 
        include benchmarks to monitor progress toward specific project 
        objectives.
    ``(c) Matching Requirements.--The Federal share of the cost of any 
project funded under this subpart shall not exceed 50 percent. The non-
Federal share of such project may be in cash or in kind, fairly 
evaluated, including services.

``SEC. 1613. USES OF FUNDS.

    ``(a) Required Uses.--A recipient shall use funds under this 
subpart for--
            ``(1) creating or expanding community technology centers 
        that expand access to information technology and related 
        training for disadvantaged residents of distressed urban or 
        rural communities; and
            ``(2) evaluating the effectiveness of the project.
    ``(b) Permissible Uses.--A recipient may use funds under this 
subpart for activities, described in its application, that carry out 
the purposes of this subpart, such as--
            ``(1) supporting a center coordinator, and staff, to 
        supervise instruction and build community partnerships;
            ``(2) acquiring equipment, networking capabilities, and 
        infrastructure to carry out the project; and
            ``(3) developing and providing services and activities for 
        community residents that provide access to computers, 
        information technology, and the use of such technology in 
        support of pre-school preparation, academic achievement, 
        lifelong learning, and workforce development, such as the 
        following:
                    ``(A) After-school activities in which children and 
                youths use software that provides academic enrichment 
                and assistance with homework, develop their technical 
                skills, explore the Internet, and participate in 
                multimedia activities, including web page design and 
                creation.
                    ``(B) Adult education and family literacy 
                activities through technology and the Internet, 
                including--
                            ``(i) General Education Development, 
                        English as a Second Language, and adult basic 
                        education classes or programs;
                            ``(ii) introduction to computers;
                            ``(iii) intergenerational activities; and
                            ``(iv) lifelong learning opportunities.
                    ``(C) Career development and job preparation 
                activities, such as--
                            ``(i) training in basic and advanced 
                        computer skills;
                            ``(ii) resume writing workshops; and
                            ``(iii) access to databases of employment 
                        opportunities, career information, and other 
                        online materials.
                    ``(D) Small business activities, such as--
                            ``(i) computer-based training for basic 
                        entrepreneurial skills and electronic commerce; 
                        and
                            ``(ii) access to information on business 
                        start-up programs that is available online, or 
                        from other sources.
                    ``(E) Activities that provide home access to 
                computers and technology, such as assistance and 
                services to promote the acquisition, installation, and 
                use of information technology in the home through low-
                cost solutions such as networked computers, web-based 
                television devices, and other technology.

``SEC. 1614. AUTHORIZATION OF APPROPRIATIONS.

    ``For purposes of carrying out this subpart, there is authorized to 
be appropriated $100,000,000 for fiscal year 2002 and such sums as may 
be necessary for each of the 6 succeeding fiscal years.

                 ``PART G--COMPREHENSIVE SCHOOL REFORM

``SEC. 1701. PURPOSE.

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

``SEC. 1702. PROGRAM AUTHORIZATION.

    ``(a) Program Authorized.--
            ``(1) In general.--The Secretary is authorized to award 
        grants to State educational agencies, from allotments under 
        paragraph (2), to enable the State educational agencies to 
        award subgrants to local educational agencies to carry out the 
        purpose described in section 1701.
            ``(2) Allotments.--
                    ``(A) Reservations.--Of the amount appropriated 
                under section 1002(h) for a fiscal year, the Secretary 
                may reserve--
                            ``(i) not more than 1 percent to provide 
                        assistance to schools supported by the Bureau 
                        of Indian Affairs and in the United States 
                        Virgin Islands, Guam, American Samoa, and the 
                        Commonwealth of the Northern Mariana Islands 
                        according to their respective needs for 
                        assistance under this part;
                            ``(ii) not more than 1 percent to conduct 
                        national evaluation activities described in 
                        section 1707; and
                            ``(iii) 3 percent to promote quality 
                        initiatives described in section 1708.
                    ``(B) In general.--Of the amount appropriated under 
                section 1002(h) that remains after making the 
                reservation under subparagraph (A) for a fiscal year, 
                the Secretary shall allot to each State for the fiscal 
                year an amount that bears the same ratio to the 
                remainder for that fiscal year as the amount made 
                available under section 1124 to the State for the 
                preceding fiscal year bears to the total amount made 
                available under section 1124 to all States for that 
                year.
                    ``(C) Reallotment.--If a State does not apply for 
                funds under this section, the Secretary shall reallot 
                such funds to other States that do not apply in 
                proportion to the amount allotted to such other States 
                under subparagraph (B).

``SEC. 1703. STATE APPLICATIONS.

    ``(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 information 
as the Secretary may reasonably require.
    ``(b) Contents.--Each such application shall describe--
            ``(1) the process and selection criteria by which the State 
        educational agency, using expert review, will select local 
        educational agencies to receive subgrants under this section;
            ``(2) how the State educational agency will ensure that 
        funds under this part are limited to comprehensive school 
        reform programs that--
                    ``(A) include each of the components described in 
                section 1706(a);
                    ``(B) have the capacity to improve the academic 
                achievement of all students in core academic subjects 
                within participating schools; and
                    ``(C) are supported by technical assistance 
                providers that have a successful track record and the 
                capacity to deliver high quality materials, 
                professional development for school personnel and on-
                site support during the full implementation period of 
                the reforms;
            ``(3) how the State educational agency will disseminate 
        information on comprehensive school reforms that are based on 
        promising and effective practices and scientifically based 
        research programs;
            ``(4) how the State educational agency will annually 
        evaluate the implementation of such reforms and measure the 
        extent to which the reforms have resulted in increased student 
        academic performance; and
            ``(5) how the State educational agency will make available 
        technical assistance to a local educational agency or consortia 
        of local educational agencies in evaluating, developing, and 
        implementing comprehensive school reform.

``SEC. 1704. STATE USE OF FUNDS.

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

``SEC. 1705. LOCAL APPLICATIONS.

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

``SEC. 1706. LOCAL USE OF FUNDS.

    ``(a) Uses of Funds.--A local educational agency or consortium that 
receives a subgrant under this section shall provide the subgrant funds 
to schools, that are eligible for assistance under part A and served by 
the agency, to enable the schools to implement a comprehensive school 
reform program for--
            ``(1) employing proven strategies for student learning, 
        teaching, and school management that are based on promising and 
        effective practices and scientifically based research programs 
        and have been replicated successfully in schools;
            ``(2) integrating a comprehensive design for effective 
        school functioning, including instruction, assessment, 
        classroom management, professional development, parental 
        involvement, and school management, that aligns the school's 
        curriculum, technology, and professional development into a 
        comprehensive reform plan for schoolwide change designed to 
        enable all students to meet challenging State content and 
        student performance standards and addresses needs identified 
        through a school needs assessment;
            ``(3) providing high quality and continuous teacher and 
        staff professional development;
            ``(4) the inclusion of measurable goals for student 
        performance;
            ``(5) support for teachers, principals, administrators, and 
        other school personnel staff;
            ``(6) meaningful community and parental involvement 
        initiatives that will strengthen school improvement activities;
            ``(7) using high quality external technical support and 
        assistance from an entity that has experience and expertise in 
        schoolwide reform and improvement, which may include an 
        institution of higher education;
            ``(8) evaluating school reform implementation and student 
        performance; and
            ``(9) identification of other resources, including Federal, 
        State, local, and private resources, that shall be used to 
        coordinate services that will support and sustain the 
        comprehensive school reform effort.
    ``(b) Special Rule.--A school that receives funds to develop a 
comprehensive school reform program shall not be limited to using 
nationally available approaches, but may develop the school's own 
comprehensive school reform program for schoolwide change as described 
in subsection (a).

``SEC. 1707. NATIONAL EVALUATION AND REPORTS.

    ``(a) In General.--The Secretary shall develop a plan for a 
national evaluation of the programs assisted under this part.
    ``(b) Evaluation.--The national evaluation shall--
            ``(1) evaluate the implementation and results achieved by 
        schools after 3 years of implementing comprehensive school 
        reforms; and
            ``(2) assess the effectiveness of comprehensive school 
        reforms in schools with diverse characteristics.
    ``(c) Reports.--Prior to the completion of the national evaluation, 
the Secretary shall submit an interim report describing implementation 
activities for the Comprehensive School Reform Program, which began in 
1998, to the Committee on Education and the Workforce, and the 
Committee on Appropriations of the House of Representatives, and the 
Committee on Health, Education, Labor, and Pensions, and the Committee 
on Appropriations of the Senate.

``SEC. 1708. QUALITY INITIATIVES.

    ``The Secretary, through grants or contracts, shall promote--
            ``(1) a public-private effort, in which funds are matched 
        by the private sector, to assist States, local educational 
        agencies, and schools, in making informed decisions upon 
        approving or selecting providers of comprehensive school 
        reform, consistent with the requirements described in section 
        1706(a); and
            ``(2) activities to foster the development of comprehensive 
        school reform models and to provide effective capacity building 
        for comprehensive school reform providers to expand their work 
        in more schools, assure quality, and promote financial 
        stability.

                  ``PART H--SCHOOL DROPOUT PREVENTION

``SEC. 1801. SHORT TITLE.

    ``This part may be cited as the `Dropout Prevention Act'.

``SEC. 1802. PURPOSE.

    ``The purpose of this part is to provide for school dropout 
prevention and reentry and to raise academic achievement levels by 
providing grants, to schools through State educational agencies, that--
            ``(1) challenge all children to attain their highest 
        academic potential; and
            ``(2) ensure that all students have substantial and ongoing 
        opportunities to do so through schoolwide programs proven 
        effective in school dropout prevention.

               ``Subpart 1--Coordinated National Strategy

``SEC. 1811. NATIONAL ACTIVITIES.

    ``(a) In General.--The Secretary is authorized--
            ``(1) to collect systematic data on the participation in 
        the programs described in paragraph (2)(C) of individuals 
        disaggregated within each State, local educational agency, and 
        school by gender, by each major racial and ethnic group, by 
        English proficiency status, by migrant status, by students with 
        disabilities as compared to nondisabled students, and by 
        economically disadvantaged students as compared to students who 
        are not economically disadvantaged;
            ``(2) to establish and to consult with an interagency 
        working group that shall--
                    ``(A) address inter- and intra-agency program 
                coordination issues at the Federal level with respect 
                to school dropout prevention and middle school and 
                secondary school reentry, and assess the targeting of 
                existing Federal services to students who are most at 
                risk of dropping out of school, and the cost-
                effectiveness of various programs and approaches used 
                to address school dropout prevention;
                    ``(B) describe the ways in which State and local 
                agencies can implement effective school dropout 
                prevention programs using funds from a variety of 
                Federal programs, including the programs under this 
                title; and
                    ``(C) address all Federal programs with school 
                dropout prevention or school reentry elements or 
                objectives, including programs under this title, 
                programs under subtitle C of title I of the Workforce 
                Investment Act of 1998, and other programs; and
            ``(3) carry out a national recognition program in 
        accordance with subsection (b) that recognizes schools that 
        have made extraordinary progress in lowering school dropout 
        rates under which a public middle school or secondary school 
        from each State will be recognized.
    ``(b) Recognition Program.--
            ``(1) National guidelines.--The Secretary shall develop 
        uniform national guidelines for the recognition program that 
        shall be used to recognize schools from nominations submitted 
        by State educational agencies.
            ``(2) Eligible schools.--The Secretary may recognize under 
        the recognition program any public middle school or secondary 
        school (including a charter school) that has implemented 
        comprehensive reforms regarding the lowering of school dropout 
        rates for all students at that school.
            ``(3) Support.--The Secretary may make monetary awards to 
        schools recognized under the recognition program in amounts 
        determined by the Secretary. Amounts received under this 
        section shall be used for dissemination activities within the 
        school district or nationally.
    ``(c) Capacity Building.--
            ``(1) In general.--The Secretary, through a contract with a 
        non-Federal entity, may conduct a capacity building and design 
        initiative in order to increase the types of proven strategies 
        for dropout prevention and reentry that address the needs of an 
        entire school population rather than a subset of students.
            ``(2) Number and duration.--
                    ``(A) Number.--The Secretary may award not more 
                than 5 contracts under this subsection.
                    ``(B) Duration.--The Secretary may award a contract 
                under this subsection for a period of not more than 5 
                years.
    ``(d) Support for Existing Reform Networks.--
            ``(1) In general.--The Secretary may provide appropriate 
        support to eligible entities to enable the eligible entities to 
        provide training, materials, development, and staff assistance 
        to schools assisted under this chapter.
            ``(2) Definition of eligible entity.--In this subsection, 
        the term `eligible entity' means an entity that, prior to the 
        date of enactment of the Dropout Prevention Act--
                    ``(A) provided training, technical assistance, and 
                materials to 100 or more elementary schools or 
                secondary schools; and
                    ``(B) developed and published a specific 
                educational program or design for use by the schools.

       ``Subpart 2--National School Dropout Prevention Initiative

``SEC. 1821. PROGRAM AUTHORIZED.

    ``(a) Grants.--
            ``(1) Discretionary grants.--If the sum appropriated under 
        section 1002(i) for a fiscal year is less than $250,000,000, 
        then the Secretary shall use such sum to award grants, on a 
        competitive basis, to State educational agencies to enable the 
        State educational agencies to award grants under subsection 
        (b).
            ``(2) Formula.--If the sum appropriated under section 
        1002(i) for a fiscal year equals or exceeds $250,000,000, then 
        the Secretary shall use such sum to make an allotment to each 
        State in an amount that bears the same relation to the sum as 
        the amount the State received under part A for the preceding 
        fiscal year bears to the amount received by all States under 
        such part for the preceding fiscal year.
            ``(3) Definition of state.--In this subpart, 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, the Republic of 
        the Marshall Islands, the Federated States of Micronesia, 
        Republic of Palau, and Bureau of Indian Affairs for purposes of 
        serving schools funded by the Bureau.
    ``(b) Grants.--From amounts made available to a State under 
subsection (a), the State educational agency may award grants to public 
middle schools or secondary schools that serve students in grades 6 
through 12, that have school dropout rates that are the highest of all 
school dropout rates in the State, to enable the schools to pay only 
the startup and implementation costs of effective, sustainable, 
coordinated, and whole school dropout prevention programs that involve 
activities such as--
            ``(1) professional development;
            ``(2) obtaining curricular materials;
            ``(3) release time for professional staff;
            ``(4) planning and research;
            ``(5) remedial education;
            ``(6) reduction in pupil-to-teacher ratios;
            ``(7) efforts to meet State student achievement standards;
            ``(8) counseling and mentoring for at-risk students; and
            ``(9) comprehensive school reform models.
    ``(c) Amount.--
            ``(1) In general.--Subject to subsection (d) and except as 
        provided in paragraph (2), a grant under this subpart shall be 
        awarded--
                    ``(A) in the first year that a school receives a 
                grant payment under this subpart, based on factors such 
                as--
                            ``(i) school size;
                            ``(ii) costs of the model or set of 
                        prevention and reentry strategies being 
                        implemented; and
                            ``(iii) local cost factors such as poverty 
                        rates;
                    ``(B) in the second such year, in an amount that is 
                not less than 75 percent of the amount the school 
                received under this subpart in the first such year;
                    ``(C) in the third year, in an amount that is not 
                less than 50 percent of the amount the school received 
                under this subpart in the first such year; and
                    ``(D) in each succeeding year in an amount that is 
                not less than 30 percent of the amount the school 
                received under this subpart in the first such year.
            ``(2) Increases.--The Secretary shall increase the amount 
        awarded to a school under this subpart by 10 percent if the 
        school creates smaller learning communities within the school 
        and the creation is certified by the State educational agency.
    ``(d) Duration.--A grant under this subpart shall be awarded for a 
period of 3 years, and may be continued for a period of 2 additional 
years if the State educational agency determines, based on the annual 
reports described in section 1827(a), that significant progress has 
been made in lowering the school dropout rate for students 
participating in the program assisted under this subpart compared to 
students at similar schools who are not participating in the program.

``SEC. 1822. STRATEGIES AND CAPACITY BUILDING.

    ``Each school receiving a grant under this subpart shall implement 
scientifically based research, sustainable, and widely replicated 
strategies for school dropout prevention and reentry that address the 
needs of an entire school population rather than a subset of students. 
The strategies may include--
            ``(1) specific strategies for targeted purposes, such as--
                    ``(A) effective early intervention programs 
                designed to identify at-risk students;
                    ``(B) effective programs encompassing traditionally 
                underserved students, including racial and ethnic 
                minorities and pregnant and parenting teenagers, 
                designed to prevent such students from dropping out of 
                school; and
                    ``(C) effective programs to identify and encourage 
                youth who have already dropped out of school to reenter 
                school and complete their secondary education; and
            ``(2) approaches such as breaking larger schools down into 
        smaller learning communities and other comprehensive reform 
        approaches, creating alternative school programs, developing 
        clear linkages to career skills and employment, and addressing 
        specific gatekeeper hurdles that often limit student retention 
        and academic success.

``SEC. 1823. SELECTION OF SCHOOLS.

    ``(a) School Application.--
            ``(1) In general.--Each school desiring a grant under this 
        subpart shall submit an application to the State educational 
        agency at such time, in such manner, and accompanied by such 
        information as the State educational agency may require.
            ``(2) Contents.--Each application submitted under paragraph 
        (1) shall--
                    ``(A) contain a certification from the local 
                educational agency serving the school that--
                            ``(i) the school has the highest number or 
                        rates of school dropouts in the age group 
                        served by the local educational agency;
                            ``(ii) the local educational agency is 
                        committed to providing ongoing operational 
                        support, for the school's comprehensive reform 
                        plan to address the problem of school dropouts, 
                        for a period of 5 years; and
                            ``(iii) the local educational agency will 
                        support the plan, including--
                                    ``(I) release time for teacher 
                                training;
                                    ``(II) efforts to coordinate 
                                activities for feeder schools; and
                                    ``(III) encouraging other schools 
                                served by the local educational agency 
                                to participate in the plan;
                    ``(B) demonstrate that the faculty and 
                administration of the school have agreed to apply for 
                assistance under this subpart, and provide evidence of 
                the school's willingness and ability to use the funds 
                under this subpart, including providing an assurance of 
                the support of 80 percent or more of the professional 
                staff at the school;
                    ``(C) describe the instructional strategies to be 
                implemented, how the strategies will serve all 
                students, and the effectiveness of the strategies;
                    ``(D) describe a budget and timeline for 
                implementing the strategies;
                    ``(E) contain evidence of coordination with 
                existing resources;
                    ``(F) provide an assurance that funds provided 
                under this subpart will supplement and not supplant 
                other Federal, State, and local funds available for 
                dropout prevention programs;
                    ``(G) describe how the activities to be assisted 
                conform with scientifically based research knowledge 
                about school dropout prevention and reentry; and
                    ``(H) demonstrate that the school and local 
                educational agency have agreed to conduct a schoolwide 
                program under section 1114.
    ``(b) State Agency Review and Award.--The State educational agency 
shall review applications and award grants to schools under subsection 
(a) according to a review by a panel of experts on school dropout 
prevention.
    ``(c) Eligibility.--A school is eligible to receive a grant under 
this subpart if the school is--
            ``(1) a public school (including a public alternative 
        school)--
                    ``(A) that is eligible to receive assistance under 
                part A, including a comprehensive secondary school, a 
                vocational or technical secondary school, or a charter 
                school; and
                    ``(B)(i) that serves students 50 percent or more of 
                whom are low-income individuals; or
                    ``(ii) with respect to which the feeder schools 
                that provide the majority of the incoming students to 
                the school serve students 50 percent or more of whom 
                are low-income individuals; or
            ``(2) participating in a schoolwide program under section 
        1114 during the grant period.
    ``(d) Community-Based Organizations.--A school that receives a 
grant under this subpart may use the grant funds to secure necessary 
services from a community-based organization, including private sector 
entities, if--
            ``(1) the school approves the use;
            ``(2) the funds are used to provide school dropout 
        prevention and reentry activities related to schoolwide 
        efforts; and
            ``(3) the community-based organization has demonstrated the 
        organization's ability to provide effective services as 
        described in section 122 of the Workforce Investment Act of 
        1998.
    ``(e) Coordination.--Each school that receives a grant under this 
subpart shall coordinate the activities assisted under this subpart 
with other Federal programs, such as programs assisted under chapter 1 
of subpart 2 of part A of title IV of the Higher Education Act of 1965.

``SEC. 1824. DISSEMINATION ACTIVITIES.

    ``Each school that receives a grant under this part shall provide 
information and technical assistance to other schools within the school 
district, including presentations, document-sharing, and joint staff 
development.

``SEC. 1825. PROGRESS INCENTIVES.

    ``Notwithstanding any other provision of law, each local 
educational agency that receives funds under this title shall use such 
funds to provide assistance to schools served by the agency that have 
not made progress toward lowering school dropout rates after receiving 
assistance under this subpart for 2 fiscal years.

``SEC. 1826. SCHOOL DROPOUT RATE CALCULATION.

    ``For purposes of calculating a school dropout rate under this 
subpart, a school shall use--
            ``(1) the annual event school dropout rate for students 
        leaving a school in a single year determined in accordance with 
        the National Center for Education Statistics' Common Core of 
        Data, if available; or
            ``(2) in other cases, a standard method for calculating the 
        school dropout rate as determined by the State educational 
        agency.

``SEC. 1827. REPORTING AND ACCOUNTABILITY.

    ``(a) Reporting.--To receive funds under this subpart for a fiscal 
year after the first fiscal year that a school receives funds under 
this subpart, the school shall provide, on an annual basis, to the 
Secretary and the State educational agency a report regarding the 
status of the implementation of activities funded under this subpart, 
the outcome data for students at schools assisted under this subpart 
disaggregated in the same manner as information under section 1811(a) 
(such as dropout rates), and a certification of progress from the 
eligible entity whose strategies the school is implementing.
    ``(b) Accountability.--On the basis of the reports submitted under 
subsection (a), the Secretary shall evaluate the effect of the 
activities assisted under this subpart on school dropout prevention 
compared to a control group.

``SEC. 1828. STATE RESPONSIBILITIES.

    ``(a) Uniform Data Collection.--Within 1 year after the date of 
enactment of the Dropout Prevention Act, a State educational agency 
that receives funds under this subpart shall report to the Secretary 
and statewide, all school district and school data regarding school 
dropout rates in the State disaggregated in the same manner as 
information under section 1811(a), according to procedures that conform 
with the National Center for Education Statistics' Common Core of Data.
    ``(b) Attendance-Neutral Funding Policies.--Within 2 years after 
the date of enactment of the Dropout Prevention Act, a State 
educational agency that receives funds under this subpart shall develop 
and implement education funding formula policies for public schools 
that provide appropriate incentives to retain students in school 
throughout the school year, such as--
            ``(1) a student count methodology that does not determine 
        annual budgets based on attendance on a single day early in the 
        academic year; and
            ``(2) specific incentives for retaining enrolled students 
        throughout each year.
    ``(c) Suspension and Expulsion Policies.--Within 2 years after the 
date of enactment of the Dropout Prevention Act, a State educational 
agency that receives funds under this subpart shall develop uniform, 
long-term suspension and expulsion policies (that in the case of a 
child with a disability are consistent with the suspension and 
expulsion policies under the Individuals with Disabilities Education 
Act) for serious infractions resulting in more than 10 days of 
exclusion from school per academic year so that similar violations 
result in similar penalties.
    ``(d) Regulations.--The Secretary shall promulgate regulations 
implementing subsections (a) through (c).

       ``Subpart 3--Definitions; Authorization of Appropriations

``SEC. 1831. DEFINITIONS.

    ``In this part:
            ``(1) Low-income.--The term `low-income', used with respect 
        to an individual, means an individual determined to be low-
        income in accordance with measures described in section 
        1113(a)(5).
            ``(2) School dropout.--The term `school dropout' means a 
        youth who is no longer attending any school and who has not 
        received a secondary school diploma or its recognized 
        equivalent.''.

           PART G--EDUCATION FOR HOMELESS CHILDREN AND YOUTH

SEC. 171. STATEMENT OF POLICY.

    Section 721(3) of the Stewart B. McKinney Homeless Assistance Act 
(42 U.S.C. 11431(3)) is amended by striking ``should not be'' and 
inserting ``is not''.

SEC. 172. GRANTS FOR STATE AND LOCAL ACTIVITIES.

    Section 722 of such Act (42 U.S.C. 11432) is amended--
            (1) in subsection (c)--
                    (A) in paragraph (2)(A)--
                            (i) by inserting ``and'' after ``Samoa,''; 
                        and
                            (ii) by striking ``, and Palau'' and all 
                        that follows through ``Palau)''; and
                    (B) in paragraph (3)--
                            (i) by inserting ``or'' after ``Samoa,''; 
                        and
                            (ii) by striking ``, or Palau'';
            (2) in subsection (e), by adding at the end the following:
            ``(3) Prohibition on segregating homeless students.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) and section 723(a)(2)(B)(ii), in 
                providing a free public education to a homeless child 
                or youth, no State receiving funds under this subtitle 
                shall segregate such child or youth, either in a 
                separate school, or in a separate program within a 
                school, based on such child's or youth's status as 
                homeless.
                    ``(B) Exception.--Notwithstanding subparagraph (A), 
                paragraphs (1)(H) and (3) of subsection (g), section 
                723(a)(2), and any other provision of this subtitle 
                relating to the placement of homeless children or youth 
                in schools, a State that has a separate school for 
                homeless children or youth that was operated in fiscal 
                year 2000 in a covered county shall be eligible to 
                receive funds under this subtitle for programs carried 
                out in such school if--
                            ``(i) the school meets the requirements of 
                        subparagraph (C);
                            ``(ii) any local educational agency serving 
                        a school that the homeless children and youth 
                        enrolled in the separate school are eligible to 
                        attend meets the requirements of subparagraph 
                        (E); and
                            ``(iii) the State is otherwise eligible to 
                        receive funds under this subtitle.
                    ``(C) School requirements.--For the State to be 
                eligible to receive the funds, the school shall--
                            ``(i) provide written notice, at the time 
                        any child or youth seeks enrollment in such 
                        school, and at least twice annually while the 
                        child or youth is enrolled in such school, to 
                        the parent or guardian of the child or youth 
                        (or, in the case of an unaccompanied youth, the 
                        youth) that--
                                    ``(I) shall be signed by the parent 
                                or guardian (or, in the case of an 
                                unaccompanied youth, the youth);
                                    ``(II) reviews the general rights 
                                provided under this subtitle; and
                                    ``(III) specifically states--
                                            ``(aa) the choice of 
                                        schools homeless children and 
                                        youth are eligible to attend, 
                                        as provided in subsection 
                                        (g)(3)(A);
                                            ``(bb) that no homeless 
                                        child or youth is required to 
                                        attend a separate school for 
                                        homeless children or youth;
                                            ``(cc) that homeless 
                                        children and youth shall be 
                                        provided comparable services 
                                        described in subsection (g)(4), 
                                        including transportation 
                                        services, educational services, 
                                        and meals through school meals 
                                        programs;
                                            ``(dd) that homeless 
                                        children and youth should not 
                                        be stigmatized by school 
                                        personnel; and
                                            ``(ee) contact information 
                                        for the local liaison for 
                                        homeless children and youth and 
                                        State Coordinator for Education 
                                        of Homeless Children and Youth;
                            ``(ii)(aa) provide assistance to the parent 
                        or guardian of each homeless child or youth 
                        (or, in the case of an unaccompanied youth, the 
                        youth) to exercise the right to attend the 
                        parent's or guardian's (or youth's) choice of 
                        schools, as provided in subsection (g)(3)(A); 
                        and
                            ``(bb) coordinate with the local 
                        educational agency with jurisdiction for the 
                        school selected by the parent or guardian (or 
                        youth), to provide transportation and other 
                        necessary services;
                            ``(iii) ensure that the parent or guardian 
                        (or youth) shall receive the information 
                        required by this subparagraph in a manner and 
                        form understandable to such parent or guardian 
                        (or youth), including, if necessary and to the 
                        extent feasible, in the native language of such 
                        parent or guardian (or youth); and
                            ``(iv) demonstrate in the school's 
                        application for funds under this subtitle that 
                        such school--
                                    ``(I) is complying with clauses (i) 
                                and (ii); and
                                    ``(II) is meeting (as of the date 
                                of submission of the application) the 
                                same Federal and State standards, 
                                regulations, and mandates as other 
                                public schools in the State (such as 
                                complying with sections 1111 and 1116 
                                of the Elementary and Secondary 
                                Education Act of 1965 and providing a 
                                full range of education and related 
                                services, including services applicable 
                                to students with disabilities).
                    ``(D) School ineligibility.--A separate school 
                described in subparagraph (B) that fails to meet the 
                standards, regulations, and mandates described in 
                subparagraph (C)(iv)(II) shall not be eligible to 
                receive funds under this subtitle for programs carried 
                out in such school after the first date of such 
                failure.
                    ``(E) Local educational agency requirements.--For 
                the State to be eligible to receive the funds described 
                in subparagraph (B), the local educational agency 
                described in subparagraph (B) shall--
                            ``(i) implement a coordinated system for 
                        ensuring that homeless children and youth--
                                    ``(I) are advised of the choice of 
                                schools provided in subsection 
                                (g)(3)(A);
                                    ``(II) are immediately enrolled in 
                                the school selected in accordance with 
                                subsection (g)(3)(C); and
                                    ``(III) are provided necessary 
                                services, including transportation, 
                                promptly to allow homeless children and 
                                youth to exercise their choices of 
                                schools in accordance with subsection 
                                (g)(4);
                            ``(ii) document that written notice has 
                        been provided--
                                    ``(I) in accordance with 
                                subparagraph (C)(i) for each child or 
                                youth enrolled in a separate school 
                                described in subparagraph (B); and
                                    ``(II) in accordance with 
                                subsection (g)(1)(H)(ii);
                            ``(iii) prohibit schools within the 
                        agency's jurisdiction from referring homeless 
                        children or youth to, or requiring homeless 
                        children and youth to enroll in or attend, a 
                        separate school described in subparagraph (B);
                            ``(iv) identify and remove any barriers 
                        that exist in schools within the agency's 
                        jurisdiction that may have contributed to the 
                        creation or existence of separate schools 
                        described in subparagraph (B); and
                            ``(v) not use funds received under this 
                        subtitle to establish--
                                    ``(I) new or additional separate 
                                schools for homeless children or youth, 
                                other than schools described in 
                                subparagraph (B); or
                                    ``(II) new or additional sites for 
                                separate schools for homeless children 
                                or youth, other than the sites occupied 
                                by the schools described in 
                                subparagraph (B) in fiscal year 2000.
                    ``(F) Report.--
                            ``(i) Preparation.--
                                    ``(I) In general.--The Secretary 
                                shall prepare a report on the separate 
                                schools and local educational agencies 
                                described in subparagraph (B) that 
                                receive funds under this subtitle in 
                                accordance with this paragraph.
                                    ``(II) Contents.--The report shall 
                                contain, at a minimum, information on--
                                            ``(aa) compliance with all 
                                        requirements of this paragraph;
                                            ``(bb) barriers to school 
                                        access in the school districts 
                                        served by the local educational 
                                        agencies; and
                                            ``(cc) the progress the 
                                        separate schools are making in 
                                        integrating homeless children 
                                        and youth into the mainstream 
                                        school environment, including 
                                        the average length of student 
                                        enrollment in such schools.
                            ``(ii) Compliance with information 
                        requests.--For purposes of enabling the 
                        Secretary to prepare the report, the separate 
                        schools and local educational agencies shall 
                        cooperate with the Secretary and the State 
                        Coordinators for the Education of Homeless 
                        Children and Youth, and shall comply with any 
                        requests for information by the Secretary and 
                        State Coordinators.
                            ``(iii) Submission.--Not later than 2 years 
                        after the date of enactment of the Better 
                        Education for Students and Teachers Act, the 
                        Secretary shall submit the report described in 
                        clause (i) to--
                                    ``(I) the President;
                                    ``(II) the Committee on Education 
                                and the Workforce of the House of 
                                Representatives; and
                                    ``(III) the Committee on Health, 
                                Education, Labor, and Pensions of the 
                                Senate.
                    ``(G) Definition.--In this paragraph, the term 
                `covered county' means--
                            ``(i) San Joaquin County, CA;
                            ``(ii) Orange County, CA;
                            ``(iii) San Diego County, CA; and
                            ``(iv) Maricopa County, AZ.'';
            (3) by amending subsection (f) to read as follows:
    ``(f) Functions of the Office of Coordinator.--The Coordinator of 
Education of Homeless Children and Youth established in each State 
shall--
            ``(1) gather reliable, valid, and comprehensive information 
        on the nature and extent of the problems homeless children and 
        youth have in gaining access to public preschool programs and 
        to public elementary schools and secondary schools, the 
        difficulties in identifying the special needs of such children 
        and youth, any progress made by the State educational agency 
        and local educational agencies in the State in addressing such 
        problems and difficulties, and the success of the program under 
        this subtitle in allowing homeless children and youth to enroll 
        in, attend, and succeed in, school;
            ``(2) develop and carry out the State plan described in 
        subsection (g);
            ``(3) collect and transmit to the Secretary, at such time 
        and in such manner as the Secretary may require, such 
        information as the Secretary deems necessary to assess the 
        educational needs of homeless children and youth within the 
        State;
            ``(4) facilitate coordination between the State educational 
        agency, the State social services agency, and other agencies 
        providing services to homeless children and youth, including 
        homeless children and youth who are preschool age, and families 
        of such children and youth;
            ``(5) in order to improve the provision of comprehensive 
        education and related services to homeless children and youth 
        and their families, coordinate and collaborate with--
                    ``(A) educators, including child development and 
                preschool program personnel;
                    ``(B) providers of services to homeless and runaway 
                children and youth and homeless families (including 
                domestic violence agencies, shelter operators, 
                transitional housing facilities, runaway and homeless 
                youth centers, and transitional living programs for 
                homeless youth);
                    ``(C) local educational agency liaisons for 
                homeless children and youth; and
                    ``(D) community organizations and groups 
                representing homeless children and youth and their 
                families; and
            ``(6) provide technical assistance to local educational 
        agencies in coordination with local liaisons established under 
        this subtitle, to ensure that local educational agencies comply 
        with the requirements of section 722(e)(3).''; and
            (4) in subsection (g)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (E)--
                                    (I) by striking ``the report'' and 
                                inserting ``the information''; and
                                    (II) by striking ``(f)(4)'' and 
                                inserting ``(f)(3)''; and
                            (ii) by amending subparagraph (H) to read 
                        as follows:
                    ``(H) contain assurances that--
                            ``(i) the State educational agency and 
                        local educational agencies in the State will 
                        adopt policies and practices to ensure that 
                        homeless children and youth are not segregated 
                        on the basis of their status as homeless or 
                        stigmatized; and
                            ``(ii) local educational agencies serving 
                        school districts in which homeless children and 
                        youth reside or attend school will--
                                    ``(I) post public notice of the 
                                educational rights of such children and 
                                youth where such children and youth 
                                receive services under this Act (such 
                                as family shelters and soup kitchens); 
                                and
                                    ``(II) designate an appropriate 
                                staff person, who may also be a 
                                coordinator for other Federal programs, 
                                as a liaison for homeless children and 
                                youth.'';
                    (B) by amending paragraph (3) to read as follows:
            ``(3) Local educational agency requirements.--
                    ``(A) In general.--Each local educational agency 
                serving a homeless child or youth assisted under this 
                subtitle shall, according to the child's or youth's 
                best interest--
                            ``(i) continue the child's or youth's 
                        education in the school of origin--
                                    ``(I) for the duration of their 
                                homelessness;
                                    ``(II) if the child becomes 
                                permanently housed, for the remainder 
                                of the academic year; or
                                    ``(III) in any case in which a 
                                family becomes homeless between 
                                academic years, for the following 
                                academic year; or
                            ``(ii) enroll the child or youth in any 
                        school that nonhomeless students who live in 
                        the attendance area in which the child or youth 
                        is actually living are eligible to attend.
                    ``(B) Best interest.--In determining the best 
                interest of the child or youth under subparagraph (A), 
                the local educational agency shall--
                            ``(i) to the extent feasible, keep a 
                        homeless child or youth in the school of 
                        origin, except when doing so is contrary to the 
                        wishes of the child's or youth's parent or 
                        guardian, or in the case of an unaccompanied 
                        youth, doing so is contrary to the youth's 
                        wish; and
                            ``(ii) provide a written explanation to the 
                        homeless child's or youth's parent or guardian 
                        when the local educational agency sends such 
                        child or youth to a school other than the 
                        school of origin or a school requested by the 
                        parent or guardian.
                    ``(C) Enrollment.--
                            ``(i) Documentation.--The school selected 
                        in accordance with this paragraph shall 
                        immediately enroll the homeless child or youth 
                        even if the child or youth is unable to produce 
                        records normally required for enrollment, such 
                        as previous academic records, medical records, 
                        proof of residency, or other documentation.
                            ``(ii) Special rule.--The enrolling school 
                        immediately shall contact the school last 
                        attended by the child or youth to obtain 
                        relevant academic and other records. If the 
                        child or youth needs to obtain immunizations, 
                        the enrolling school shall promptly refer the 
                        child or youth to the appropriate authorities 
                        for such immunizations.
                            ``(iii) Disputes.--If a dispute arises over 
                        school selection or enrollment in a school, the 
                        child or youth shall be admitted immediately to 
                        the school in which the parent or guardian (or 
                        in the case of an unaccompanied youth, the 
                        youth) seeks enrollment pending resolution of 
                        the dispute.
                    ``(D) Definition of school of origin.--For purposes 
                of this paragraph, the term `school of origin' means 
                the school that the child or youth attended when 
                permanently housed, or the school in which the child or 
                youth was last enrolled.
                    ``(E) Placement choice.--The choice regarding 
                placement shall be made regardless of whether the child 
                or youth lives with the homeless parents or has been 
                temporarily placed elsewhere by the parents.'';
                    (C) by amending paragraph (6) to read as follows:
            ``(6) Coordination.--
                    ``(A) In general.--Each local educational agency 
                serving homeless children and youth that receives 
                assistance under this subtitle shall coordinate the 
                provision of services under this subtitle with local 
                services agencies and other agencies or programs 
                providing services to homeless children and youth and 
                their families, including services and programs funded 
                under the Runaway and Homeless Youth Act (42 U.S.C. 
                5701 et seq.).
                    ``(B) Housing assistance.--If applicable, each 
                State and local educational agency that receives 
                assistance under this subtitle shall coordinate with 
                State and local housing agencies responsible for 
                developing the comprehensive housing affordability 
                strategy described in section 105 of the Cranston-
                Gonzales National Affordable Housing Act (42 U.S.C. 
                12705) to minimize educational disruption for children 
                and youth who become homeless.
                    ``(C) Coordination purpose.--The coordination 
                required under subparagraphs (A) and (B) shall be 
                designed to--
                            ``(i) ensure that homeless children and 
                        youth have access to available education and 
                        related support services; and
                            ``(ii) raise the awareness of school 
                        personnel and service providers of the effects 
                        of short-term stays in shelters and other 
                        challenges associated with homeless children 
                        and youth.'';
                    (D) by amending paragraph (7) to read as follows:
            ``(7) Liaison.--
                    ``(A) In general.--Each local liaison for homeless 
                children and youth designated pursuant to paragraph 
                (1)(H)(ii)(II) shall ensure that--
                            ``(i) homeless children and youth enroll, 
                        and have a full and equal opportunity to 
                        succeed, in the schools of the local 
                        educational agency;
                            ``(ii) homeless families, children, and 
                        youth receive educational services for which 
                        such families, children, and youth are 
                        eligible, including Head Start and Even Start 
                        programs and preschool programs administered by 
                        the local educational agency, and referrals to 
                        health care services, dental services, mental 
                        health services, and other appropriate 
                        services;
                            ``(iii) the parents or guardians of 
                        homeless children and youth are informed of the 
                        education and related opportunities available 
                        to their children and are provided with 
                        meaningful opportunities to participate in the 
                        education of their children; and
                            ``(iv) public notice of the educational 
                        rights of homeless children and youth is posted 
                        where such children and youth receive services 
                        under this Act (such as family shelters and 
                        soup kitchens).
                    ``(B) Information.--State coordinators in States 
                receiving assistance under this subtitle and local 
                educational agencies receiving assistance under this 
                subtitle shall inform school personnel, service 
                providers, and advocates working with homeless families 
                of the duties of the liaisons for homeless children and 
                youth.
                    ``(C) Local and state coordination.--Liaisons for 
                homeless children and youth shall, as a part of their 
                duties, coordinate and collaborate with State 
                coordinators and community and school personnel 
                responsible for the provision of education and related 
                services to homeless children and youth.
                    ``(D) Dispute resolution.--Unless another 
                individual is designated by State law, the local 
                liaison for homeless children and youth shall provide 
                resource information and assist in resolving a dispute 
                under this subtitle if such a dispute arises.''; and
                    (E) by striking paragraph (9).

SEC. 173. LOCAL EDUCATIONAL AGENCY GRANTS.

    Section 723 of such Act (42 U.S.C. 11433) is amended--
            (1) in subsection (a), by amending paragraph (2) to read as 
        follows:
            ``(2) Services.--
                    ``(A) In general.--Services provided under 
                paragraph (1)--
                            ``(i) may be provided through programs on 
                        school grounds or at other facilities;
                            ``(ii) shall, to the maximum extent 
                        practicable, be provided through existing 
                        programs and mechanisms that integrate homeless 
                        individuals with nonhomeless individuals; and
                            ``(iii) shall be designed to expand or 
                        improve services provided as part of a school's 
                        regular academic program, but not replace that 
                        program.
                    ``(B) Services on school grounds.--If services 
                under paragraph (1) are provided on school grounds, 
                schools--
                            ``(i) may use funds under this subtitle to 
                        provide the same services to other children and 
                        youth who are determined by the local 
                        educational agency to be at risk of failing in, 
                        or dropping out of, schools, subject to clause 
                        (ii); and
                            ``(ii) shall not provide services in 
                        settings within a school that segregates 
                        homeless children and youth from other children 
                        and youth, except as is necessary for short 
                        periods of time--
                                    ``(I) for health and safety 
                                emergencies; or
                                    ``(II) to provide temporary, 
                                special, supplementary services to meet 
                                the unique needs of homeless children 
                                and youth.'';
            (2) in subsection (b)--
                    (A) by redesignating paragraphs (1) through (4) as 
                paragraphs (2) through (5), respectively;
                    (B) by inserting before paragraph (2) (as so 
                redesignated) the following:
            ``(1) an assessment of the educational and related needs of 
        homeless children and youth in the school district (which may 
        be undertaken as a part of needs assessments for other 
        disadvantaged groups);''; and
                    (C) in paragraph (4) (as so redesignated), by 
                striking ``(9)'' and inserting ``(8)''; and
            (3) in subsection (c)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) In general.--The State educational agency, in 
        accordance with the requirements of this subtitle and from 
        amounts made available to the State educational agency under 
        section 726, shall award grants, on a competitive basis, to 
        local educational agencies that submit applications under 
        subsection (b). Such grants shall be awarded on the basis of 
        the need of such agencies for assistance under this subtitle 
        and the quality of the applications submitted.'';
                    (B) by redesignating paragraph (3) as paragraph 
                (4); and
                    (C) by inserting after paragraph (2) the following:
            ``(3) Quality.--In determining the quality of applications 
        under paragraph (1), the State educational agency shall 
        consider--
                    ``(A) the local educational agency's needs 
                assessment under subsection (b)(1) and the likelihood 
                that the program to be assisted will meet the needs;
                    ``(B) the types, intensity, and coordination of 
                services to be assisted under the program;
                    ``(C) the involvement of parents or guardians;
                    ``(D) the extent to which homeless children and 
                youth will be integrated within the regular education 
                program;
                    ``(E) the quality of the local educational agency's 
                evaluation plan for the program;
                    ``(F) the extent to which services provided under 
                this subtitle will be coordinated with other available 
                services;
                    ``(G) the extent to which the local educational 
                agency provides case management or related services to 
                homeless children and youth who are unaccompanied by a 
                parent or guardian; and
                    ``(H) such other measures as the State educational 
                agency determines indicative of a high-quality 
                program.''.

SEC. 174. SECRETARIAL RESPONSIBILITIES.

    Section 724 of such Act (42 U.S.C. 11434) is amended--
            (1) in subsection (a), by striking ``the State 
        educational'' and inserting ``State educational'';
            (2) by striking subsection (f);
            (3) by redesignating subsections (c) through (e) as 
        subsections (d) through (f), respectively;
            (4) by inserting after subsection (b) the following:
    ``(c) Guidelines.--The Secretary shall develop, issue, and publish 
in the Federal Register, not later than 60 days after the date of 
enactment of the Better Education for Students and Teachers Act, school 
enrollment guidelines for States with respect to homeless children and 
youth. The guidelines shall describe--
            ``(1) successful ways in which a State may assist local 
        educational agencies to enroll immediately homeless children 
        and youth in school; and
            ``(2) how a State can review the State's requirements 
        regarding immunization and medical or school records and make 
        revisions to the requirements as are appropriate and necessary 
        in order to enroll homeless children and youth in school more 
        quickly.''; and
            (5) by adding at the end the following:
    ``(g) Information.--
            ``(1) In general.--From funds appropriated under section 
        726, the Secretary, directly or through grants, contracts, or 
        cooperative agreements, shall periodically collect and 
        disseminate data and information regarding--
                    ``(A) the number and location of homeless children 
                and youth;
                    ``(B) the education and related services homeless 
                children and youth receive;
                    ``(C) the extent to which the needs of homeless 
                children and youth are met; and
                    ``(D) such other data and information as the 
                Secretary determines necessary and relevant to carry 
                out this subtitle.
            ``(2) Coordination.--The Secretary shall coordinate such 
        collection and dissemination with other agencies and entities 
        that receive assistance and administer programs under this 
        subtitle.
    ``(h) Report.--Not later than 4 years after the date of enactment 
of the Better Education for Students and Teachers Act, the Secretary 
shall prepare and submit to the President and the appropriate 
committees of the House of Representatives and the Senate a report on 
the status of the education of homeless children and youth, which shall 
include information regarding--
            ``(1) the education of homeless children and youth; and
            ``(2) the actions of the Department of Education and the 
        effectiveness of the programs supported under this subtitle.''.

SEC. 175. DEFINITIONS.

    Section 725 of such Act (42 U.S.C. 11434a) is amended--
            (1) by redesignating paragraphs (1) and (2) as paragraphs 
        (4) and (5), respectively;
            (2) by inserting before paragraph (4) (as so redesignated) 
        the following:
            ``(1) the term `homeless children and youth'--
                    ``(A) means individuals who lack a fixed, regular, 
                and adequate nighttime residence (within the meaning of 
                section 103(a)(1)); and
                    ``(B) includes--
                            ``(i) children and youth who are sharing 
                        the housing of other persons due to loss of 
                        housing, economic hardship, or a similar 
                        reason, are living in motels, hotels, trailer 
                        parks, or camping grounds due to the lack of 
                        alternative adequate accommodations, are living 
                        in emergency or transitional shelters, are 
                        abandoned in hospitals, or are awaiting foster 
                        care placement;
                            ``(ii) children and youth who have a 
                        primary nighttime residence that is a public or 
                        private place not designed for or ordinarily 
                        used as a regular sleeping accommodation for 
                        human beings (within the meaning of section 
                        103(a)(2)(C)); and
                            ``(iii) children and youth who are living 
                        in cars, parks, public spaces, abandoned 
                        buildings, substandard housing, bus or train 
                        stations, or similar settings; and
                    ``(C) migratory children (as such term is defined 
                in section 1309(2) of the Elementary and Secondary 
                Education Act of 1965) who qualify as homeless for the 
                purposes of this subtitle because the children are 
                living in circumstances described in this paragraph;
            ``(2) the terms `enroll' and `enrollment' include attending 
        classes and participating fully in school activities;
            ``(3) the terms `local educational agency' and `State 
        educational agency' have the meanings given the terms in 
        section 3 of the Elementary and Secondary Education Act of 
        1965;'';
            (3) in paragraph (4) (as so redesignated), by striking 
        ``and'' after the semicolon;
            (4) in paragraph (5) (as so redesignated), by striking the 
        period and inserting ``; and''; and
            (5) by adding at the end the following:
            ``(6) the term `unaccompanied youth' includes a youth not 
        in the physical custody of a parent or guardian.''.

SEC. 176. AUTHORIZATION OF APPROPRIATIONS.

    Section 726 of such Act (42 U.S.C. 11435) is amended to read as 
follows:

``SEC. 726. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this subtitle, there are 
authorized to be appropriated $70,000,000 for fiscal year 2002 and such 
sums as may be necessary for each of the 6 succeeding fiscal years.''.

SEC. 177. CONFORMING AMENDMENTS.

    (a) Grants for State and Local Activities.--Section 722 of the 
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11432) is 
amended--
            (1) in subsection (c)(1), by striking ``section 724(c)'' 
        and inserting ``section 724(d)''; and
            (2) in subsection (g)(2), by striking ``paragraphs (3) 
        through (9)'' and inserting ``paragraphs (3) through (8)''.
    (b) Local Educational Agency Grants.--Section 723(b)(3) of such Act 
(42 U.S.C. 11433(b)(3)) is amended by striking ``paragraphs (3) through 
(9) of section 722(g)'' and inserting ``paragraphs (3) through (8) of 
section 722(g)''.
    (c) Secretarial Responsibilities.--Section 724(f) of such Act (as 
amended by section 174(3)) is amended by striking ``subsection (d)'' 
and inserting ``subsection (e)''.

SEC. 178. LOCAL EDUCATIONAL AGENCY SPENDING AUDITS.

    (a) Audits.--The Office of the Inspector General of the Department 
of Education shall conduct not less than 6 audits of local education 
agencies that receive funds under part A of title I of the Elementary 
and Secondary Education Act of 1965 in each fiscal year to more clearly 
determine specifically how local education agencies are expending such 
funds. Such audits shall be conducted in 6 local educational agencies 
that represent the size, ethnic, economic and geographic diversity of 
local educational agencies and shall examine the extent to which funds 
have been expended for academic instruction in the core curriculum and 
activities unrelated to academic instruction in the core curriculum, 
such as the payment of janitorial, utility and other maintenance 
services, the purchase and lease of vehicles, and the payment for 
travel and attendance costs at conferences.
    (b) Report.--Not later than 3 months after the completion of the 
audits under subsection (a) in each year, the Office of the Inspector 
General of the Department of Education shall submit a report on each 
audit 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.

                           TITLE II--TEACHERS

SEC. 201. TEACHER QUALITY.

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

                          ``TITLE II--TEACHERS

                       ``PART A--TEACHER QUALITY

``SEC. 2101. PURPOSE.

    ``The purpose of this part is to provide grants to State 
educational agencies, local educational agencies, State agencies for 
higher education, and eligible partnerships in order to--
            ``(1) increase student academic achievement and student 
        performance through such strategies as improving teacher 
        quality and increasing the number of highly qualified teachers 
        in the classroom;
            ``(2) hold local educational agencies and schools 
        accountable so that all teachers teaching core academic 
        subjects in public elementary schools and secondary schools, in 
        which not less than 50 percent of the students are from low-
        income families, are highly qualified; and
            ``(3) hold local educational agencies and schools 
        accountable for improvements in student academic achievement 
        and student performance.

``SEC. 2102. DEFINITIONS.

    ``In this part:
            ``(1) All students.--The term `all students' means students 
        from a broad range of backgrounds and circumstances, including 
        economically disadvantaged students, students with diverse 
        racial, ethnic, and cultural backgrounds, students with 
        disabilities, students with limited English proficiency, and 
        academically talented students.
            ``(2) Charter school.--The term `charter school' has the 
        meaning given the term in section 5120.
            ``(3) Core academic subjects.--The term `core academic 
        subjects' means English, mathematics, science, foreign 
        languages, civics and government, economics, arts, history, and 
        geography.
            ``(4) Highly qualified.--The term `highly qualified' 
        means--
                    ``(A) with respect to an elementary school teacher, 
                a teacher--
                            ``(i)(I) with an academic major in the arts 
                        and sciences; or
                            ``(II) who can demonstrate competence 
                        through a high level of performance in core 
                        academic subjects; and
                            ``(ii) who is certified or licensed by the 
                        State involved, except for a teacher in a 
                        charter school in a State that has a charter 
                        school law that exempts such a teacher from 
                        State certification and licensing requirements;
                    ``(B) with respect to a secondary school teacher 
                hired before the date of enactment of the Better 
                Education for Students and Teachers Act, a teacher--
                            ``(i)(I) with an academic major (or courses 
                        totaling an equivalent number of credit hours) 
                        in the academic subject that the teacher 
                        teaches or a related field;
                            ``(II) who can demonstrate a high level of 
                        competence through rigorous academic subject 
                        tests and achievement of a high level of 
                        competence as described in subclause (III); or
                            ``(III) who can demonstrate a high level of 
                        competence through a high level of performance 
                        in the academic subjects that the teacher 
                        teaches, based on a high and objective uniform 
                        standard that is--
                                    ``(aa) set by the State for both 
                                grade appropriate academic subject 
                                knowledge and teaching skills;
                                    ``(bb) the same for all teachers in 
                                the same academic subject and same 
                                grade level throughout the State; and
                                    ``(cc) a written standard that is 
                                developed in consultation with 
                                teachers, parents, principals, and 
                                school administrators and made 
                                available to the public upon request; 
                                and
                            ``(ii) who is certified or licensed by the 
                        State, except for a teacher in a charter school 
                        in a State that has a charter school law that 
                        exempts such a teacher from State certification 
                        and licensing requirements; and
                    ``(C) with respect to a secondary school teacher 
                hired after the date of enactment of the Better 
                Education for Students and Teachers Act, a teacher that 
                meets the requirements of subclause (I) or (II) of 
                subparagraph (B)(i).
            ``(5) High need local educational agency.--The term `high 
        need local educational agency' has the meaning given the term 
        in section 201(b) of the Higher Education Act of 1965.
            ``(6) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965.
            ``(7) Out-of-field teacher.--The term `out-of-field 
        teacher' means a secondary school teacher who is teaching an 
        academic subject for which the teacher is not highly qualified.
            ``(8) 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) applicable to a family of 
        the size involved.
            ``(9) Professional development.--The term `professional 
        development' means activities that--
                    ``(A) are an integral part of broad schoolwide and 
                districtwide educational improvement plans;
                    ``(B) enhance the ability of teachers and other 
                staff to--
                            ``(i) help all students meet challenging 
                        State and local content and student performance 
                        standards;
                            ``(ii) improve understanding and use of 
                        student assessments by the teachers and staff;
                            ``(iii) improve classroom management 
                        skills;
                            ``(iv) as appropriate, integrate technology 
                        into the curriculum; and
                            ``(v) encourage and provide instruction on 
                        how to work with and involve parents to foster 
                        student achievement;
                    ``(C) are sustained, intensive, and school-
                embedded;
                    ``(D) are aligned with--
                            ``(i) State content standards, student 
                        performance standards, and assessments; and
                            ``(ii) the curricula and programs tied to 
                        the standards described in clause (i);
                    ``(E) are of high quality and sufficient duration 
                to have a positive and lasting impact on classroom 
                instruction, and are not one-time workshops; and
                    ``(F) are based on the best available research on 
                teaching and learning.
            ``(10) Teacher mentoring.--The term `teacher mentoring' 
        means activities that--
                    ``(A) consist of structured guidance and regular 
                and ongoing support for beginning teachers, that--
                            ``(i) are designed to help the teachers 
                        continue to improve their practice of teaching 
                        and to develop their instructional skills; and
                            ``(ii) as part of a multiyear, 
                        developmental induction process--
                                    ``(I) involve the assistance of a 
                                mentor teacher and other appropriate 
                                individuals from a school, local 
                                educational agency, or institution of 
                                higher education; and
                                    ``(II) may include coaching, 
                                classroom observation, team teaching, 
                                and reduced teaching loads; and
                    ``(B) may include the establishment of a 
                partnership by a local educational agency with an 
                institution of higher education, another local 
                educational agency, a teacher organization, or another 
                organization.

``SEC. 2103. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Grants to States, Local Educational Agencies, and Eligible 
Partnerships.--There are authorized to be appropriated to carry out 
this part (other than subpart 5) $3,000,000,000 for fiscal year 2002 
and such sums as may be necessary for each of the 6 succeeding fiscal 
years.
    ``(b) National Programs.--There are authorized to be appropriated 
to carry out subpart 5 (other than subsections (b), (e), and (f)) 
$100,000,000 for fiscal year 2002 and such sums as may be necessary for 
each of the 6 succeeding fiscal years.

                     ``Subpart 1--Grants to States

``SEC. 2111. ALLOTMENTS TO STATES.

    ``(a) In General.--The Secretary shall make grants to States with 
applications approved under section 2112 to pay for the Federal share 
of carrying out the activities specified in section 2113. Each grant 
shall consist of the allotment determined for a State under subsection 
(b).
    ``(b) Determination of Allotments.--
            ``(1) Reservation of funds.--
                    ``(A) In general.--From the total amount 
                appropriated under section 2103(a) for a fiscal year, 
                the Secretary shall reserve--
                            ``(i) \1/2\ of 1 percent for payments to 
                        the outlying areas, to be distributed among the 
                        outlying areas on the basis of their relative 
                        need, as determined by the Secretary, for 
                        activities authorized under this part relating 
                        to teacher quality, including professional 
                        development and teacher hiring; and
                            ``(ii) \1/2\ of 1 percent for payments to 
                        the Secretary of the Interior for activities 
                        described in clause (i) in schools operated or 
                        funded by the Bureau of Indian Affairs.
                    ``(B) Limitation.--In reserving an amount for the 
                purposes described in clauses (i) and (ii) of 
                subparagraph (A) for a fiscal year, the Secretary shall 
                not reserve more than the total amount the outlying 
                areas and the schools operated or funded by the Bureau 
                of Indian Affairs received for fiscal year 2001 under--
                            ``(i) section 2202(b) of this Act (as in 
                        effect on the day before the date of enactment 
                        of the Better Education for Students and 
                        Teachers Act); and
                            ``(ii) section 306 of the Department of 
                        Education Appropriations Act, 2001 (as enacted 
                        into law by section 1(a)(1) of Public Law 106-
                        554).
            ``(2) State allotments.--
                    ``(A) Hold harmless.--
                            ``(i) In general.--Subject to subparagraph 
                        (B), from the total amount appropriated under 
                        section 2103(a) for any fiscal year and not 
                        reserved under paragraph (1), the Secretary 
                        shall allot to each of the 50 States, the 
                        District of Columbia, and the Commonwealth of 
                        Puerto Rico an amount equal to the total amount 
                        that such State received for fiscal year 2001 
                        under the authorities described in paragraph 
                        (1)(B).
                            ``(ii) Ratable reduction.--If the total 
                        amount appropriated under section 2103(a) for 
                        any fiscal year and not reserved under 
                        paragraph (1) is insufficient to pay the full 
                        amounts that all States are eligible to receive 
                        under clause (i) for the fiscal year, the 
                        Secretary shall ratably reduce such amounts for 
                        the fiscal year.
                    ``(B) Allotment of additional funds.--
                            ``(i) In general.--Subject to clause (ii), 
                        for any fiscal year for which the total amount 
                        appropriated under section 2103(a) and not 
                        reserved under paragraph (1) exceeds the total 
                        amount made available to the 50 States, the 
                        District of Columbia, and the Commonwealth of 
                        Puerto Rico for fiscal year 2001 under the 
                        authorities described in paragraph (1)(B), the 
                        Secretary shall allot to each of those States 
                        the sum of--
                                    ``(I) an amount that bears the same 
                                relationship to 35 percent of the 
                                excess amount as the number of 
                                individuals age 5 through 17 in the 
                                State, as determined by the Secretary 
                                on the basis of the most recent 
                                satisfactory data, bears to the number 
                                of those individuals in all such 
                                States, as so determined; and
                                    ``(II) an amount that bears the 
                                same relationship to 65 percent of the 
                                excess amount as the number of 
                                individuals age 5 through 17 from 
                                families with incomes below the poverty 
                                line in the State, as determined by the 
                                Secretary on the basis of the most 
                                recent satisfactory data, bears to the 
                                number of those individuals in all such 
                                States, as so determined.
                            ``(ii) Exception.--No St