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107th CONGRESS
  1st Session
                                 H. R. 1

_______________________________________________________________________

                                 AN ACT


 
  To close the achievement gap with accountability, flexibility, and 
                choice, so that no child is left behind.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Child Left Behind Act of 2001''.

SEC. 2. REFERENCES.

    Except as otherwise specifically provided in this Act, whenever in 
this Act an amendment or repeal is expressed as the amendment 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. TRANSITION.

    Except as otherwise specifically provided in this Act, or any 
amendment made by this Act, any person or agency that was awarded a 
grant under the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6301 et seq.) prior to the date of the enactment of this Act 
shall continue to receive funds in accordance with the terms of such 
award, except that such funds may not be provided after the date that 
is one year after the effective date of this Act.

SEC. 4. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. References.
Sec. 3. Transition.
Sec. 4. Table of contents.
Sec. 5. Effective date.
    TITLE I--IMPROVING THE ACADEMIC PERFORMANCE OF THE DISADVANTAGED

                         Part A--Basic Program

Sec. 101. Disadvantaged children meet high academic standards.
Sec. 102. Authorization of appropriations.
Sec. 103. Reservation for school improvement.
Sec. 104. Basic programs.
Sec. 105. School choice.
Sec. 106. Academic assessment and local educational agency and school 
                            improvement.
Sec. 107. State assistance for school support and improvement.
Sec. 108. Academic achievement awards program.
           Part B--Student Reading Skills Improvement Grants

Sec. 111. Reading first; early reading first.
Sec. 112. Amendments to Even Start.
Sec. 113. Inexpensive book distribution program.
                Part C--Education of Migratory Children

Sec. 121. State allocations.
Sec. 122. State applications; services.
Sec. 123. Authorized activities.
Sec. 124. Coordination of migrant education activities.
                 Part D--Neglected or Delinquent Youth

Sec. 131. Neglected or delinquent youth.
Sec. 132. Findings.
Sec. 133. Allocation of funds.
Sec. 134. State plan and State agency applications.
Sec. 135. Use of funds.
Sec. 136. Transition services.
Sec. 137. Purpose.
Sec. 138. Programs operated by local educational agencies.
Sec. 139. Local educational agency applications.
Sec. 140. Uses of funds.
Sec. 141. Program requirements.
Sec. 142. Program evaluations.
             Part E--Federal Evaluations and Demonstrations

Sec. 151. Evaluations.
Sec. 152. Demonstrations of innovative practices.
Sec. 153. Ellender-close up fellowship program; dropout reporting.
                  Part F--Comprehensive School Reform

Sec. 161. School reform.
           Part G--Rural Education Flexibility and Assistance

Sec. 171. Rural education.
                 Part H--General Provisions of Title I

Sec. 181. General provisions.
     TITLE II--PREPARING, TRAINING, AND RECRUITING QUALITY TEACHERS

Sec. 201. Teacher quality training and recruiting fund.
Sec. 202. National writing project.
Sec. 203. Civic education; teacher liability protection.
   TITLE III--EDUCATION OF LIMITED ENGLISH PROFICIENT AND IMMIGRANT 
              CHILDREN; INDIAN AND ALASKA NATIVE EDUCATION

 Part A--Education of Limited English Proficient and Immigrant Children

Sec. 301. Programs authorized.
Sec. 302. Conforming amendment to Department of Education Organization 
                            Act.
               Part B--Indian and Alaska Native Education

Sec. 311. Elementary and Secondary Education Act of 1965.
Sec. 312. Alaska Native education.
Sec. 313. Amendments to the education amendments of 1978.
Sec. 314. Tribally Controlled Schools Act of 1988.
Sec. 315. Accountability for Bureau funded schools.
  TITLE IV--PROMOTING INFORMED PARENTAL CHOICE AND INNOVATIVE PROGRAMS

                      Part A--Innovative Programs

Sec. 401. Promoting informed parental choice and innovative programs.
Sec. 402. Continuation of awards.
                     Part B--Public Charter Schools

Sec. 411. Public charter schools.
Sec. 412. Continuation of awards.
     Part C--Magnet Schools Assistance; Women's Educational Equity

Sec. 421. Magnet schools assistance.
Sec. 422. Women's educational equity.
Sec. 423. Continuation of awards.
                     TITLE V--21st CENTURY SCHOOLS

Sec. 501. Safe schools.
                      TITLE VI--IMPACT AID PROGRAM

Sec. 601. Payments under section 8002 with respect to fiscal years in 
                            which insufficient funds are appropriated.
Sec. 602. Calculation of payment under section 8003 for small local 
                            educational agencies.
Sec. 603. Eligibility under section 8003 for certain heavily impacted 
                            local educational agencies.
Sec. 604. Construction.
Sec. 605. State consideration of payments in providing State aid.
Sec. 606. Authorization of appropriations.
Sec. 607. Repeal of existing title VI; transfer and redesignation of 
                            program.
Sec. 608. Sense of Congress relating to full funding of the impact aid 
                            program.
                       TITLE VII--ACCOUNTABILITY

Sec. 701. Flexibility and accountability.
                     TITLE VIII--GENERAL PROVISIONS

Sec. 801. General provisions.
Sec. 802. Comprehensive regional assistance centers.
Sec. 803. National diffusion network.
Sec. 804. Eisenhower regional mathematics and science education 
                            consortia.
Sec. 805. Technology-based technical assistance.
Sec. 806. Regional technical support and professional development.
                   TITLE IX--MISCELLANEOUS PROVISIONS

              subpart 1--national education statistics act
Sec. 901. Amendment tsubpart 2--homeless education
Sec. 911. Short title.
Sec. 912. Findings.
Sec. 913. Purpose.
Sec. 914. Education for homeless children and youth.
Sec. 915. Technisubpart 3--general education provisions
Sec. 916. Information access and consent.
            Part B--Equal Access to Public School Facilities

Sec. 921. Short title.
Sec. 922. Equal access.
Sec. 923. Effective date.
                            Part C--Repeals

Sec. 931. Repeals.

SEC. 5. EFFECTIVE DATE.

    Except as otherwise specifically provided in this Act, this Act, 
and the amendments made by this Act, shall take effect on October 1, 
2001, or on the date of the enactment of this Act, whichever occurs 
later.

    TITLE I--IMPROVING THE ACADEMIC PERFORMANCE OF THE DISADVANTAGED

                         PART A--BASIC PROGRAM

SEC. 101. DISADVANTAGED CHILDREN MEET HIGH ACADEMIC STANDARDS.

    Section 1001 is amended to read as follows:

``SEC. 1001. FINDINGS; STATEMENT OF PURPOSE; AND RECOGNITION OF NEED.

    ``(a) Findings.--Congress finds the following:
            ``(1) The Constitution of the United States reserves to the 
        States and to the people the responsibility for the general 
        supervision of public education in kindergarten through the 
        twelfth grade.
            ``(2) States, local educational agencies and schools should 
        be given maximum flexibility in exchange for greater academic 
        accountability, and be given greater freedom to build upon 
        existing innovative approaches for education reform.
            ``(3) The best education decisions are made by those who 
        know the students and who are responsible for implementing the 
        decisions.
            ``(4) Educators and parents should retain the right and 
        responsibility to educate their pupils and children free of 
        excessive regulation by the Federal Government.
            ``(5) The Supreme Court has regarded the right of parents 
        to direct the upbringing of their children as a fundamental 
        right implicit in the concept of ordered liberty within the 
        14th Amendment to the Constitution, as specified in Meyer v. 
        Nebraska, 262 U.S. 390 (1923), and Pierce v. Society of 
        Sisters, 268 U.S. 510 (1925).
            ``(6) Schools that enroll high concentrations of children 
        living in poverty face the greatest challenges, but effective 
        educational strategies based on scientifically based research 
        can succeed in educating children to high academic standards.
            ``(7) High-poverty schools are much more likely to be 
        identified as failing to meet State academic standards for 
        satisfactory progress. As a result, these schools are generally 
        the most in need of additional resources and technical 
        assistance to build the capacity of these schools to address 
        the many needs of their students.
            ``(8) The educational progress of children participating in 
        programs under this title is closely associated with their 
        being taught by a highly qualified staff, particularly in 
        schools with the highest concentrations of poverty, where 
        paraprofessionals, uncertified teachers, and teachers teaching 
        out of field frequently provide instructional services.
            ``(9) Congress and the public would benefit from additional 
        data evaluating the efficacy of the Elementary and Secondary 
        Education Act of 1965.
            ``(10) Schools operating programs assisted under this part 
        must be held accountable for the educational achievement of 
        their students, when those students fail to demonstrate 
        progress in achieving high academic standards, local 
        educational agencies and States must take significant actions 
        to improve the educational opportunities available to them.
    ``(b) Purpose and Intent.--The purpose and intent of this title are 
to ensure that all children have a fair and equal opportunity to obtain 
a high-quality education.
    ``(c) Recognition of Need.--The Congress recognizes the following:
            ``(1) Educational needs are particularly great for low-
        achieving children in our Nation's highest-poverty schools, 
        children with limited English proficiency, children of migrant 
        workers, children with disabilities, Indian children, children 
        who are neglected or delinquent, and young children who are in 
        need of reading assistance and family literacy assistance.
            ``(2) Despite more than 3 decades of Federal assistance, a 
        sizable achievement gap remains between minority and 
        nonminority students, and between disadvantaged students and 
        their more advantaged peers.
            ``(3) Too many students attend local schools that fail to 
        provide them with a quality education, and are given no 
        alternatives to enable them to receive a quality education.
            ``(4) States, local educational agencies, and schools need 
        to be held accountable for improving the academic achievement 
        of all students, and for identifying and turning around low-
        performing schools.
            ``(5) States and local educational agencies need to ensure 
        that high quality academic assessments, accountability systems, 
        teacher preparation and training, curriculum, and instructional 
        materials are aligned with challenging State academic standards 
        so that students, teachers, parents, and administrators can 
        measure progress against common expectations for student 
        academic achievement.
            ``(6) Federal education assistance is intended not only to 
        increase pupil achievement overall, but also more specifically 
        and importantly, to help ensure that all students, especially 
        the disadvantaged, meet challenging academic achievement 
        standards. It can only be determined if schools, local 
        educational agencies, and States are reaching this goal if 
        student achievement results are reported specifically by 
        disadvantaged and minority status.''.

SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

    Section 1002 is amended to read as follows:

``SEC. 1002. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Local Educational Agency Grants.--For the purpose of carrying 
out part A, other than section 1120(e), there are authorized to be 
appropriated $11,500,000,000 for fiscal year 2002, $13,000,000,000 for 
fiscal year 2003, $14,500,000,000 for fiscal year 2004, $16,000,000,000 
for fiscal year 2005, and $17,200,000,000 for fiscal year 2006.
    ``(b) Student Reading Skills Improvement Grants.--
            ``(1) Reading first.--For the purpose of carrying out 
        subpart 1 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 4 succeeding fiscal years.
            ``(2) Early reading first.--For the purpose of carrying out 
        subpart 2 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 4 succeeding fiscal years.
            ``(3) Even start.--For the purpose of carrying out subpart 
        3 of part B, there are authorized to be appropriated 
        $275,000,000 for fiscal year 2002 and such sums as may be 
        necessary for each of the 4 succeeding fiscal years.
            ``(4) Inexpensive book distribution program.--For the 
        purpose of carrying out subpart 4 of part B, there are 
        authorized to be appropriated such sums as may be necessary for 
        fiscal year 2002 and each of the 4 succeeding fiscal years.
    ``(c) Education of Migratory Children.--For the purpose of carrying 
out part C, there are authorized to be appropriated $420,000,000 for 
fiscal year 2002 and such sums as may be necessary for each of the 4 
succeeding fiscal years.
    ``(d) Prevention and Intervention Programs for Youth Who Are 
Neglected, Delinquent, or at Risk of Dropping Out.--For the purpose of 
carrying out part D, there are authorized to be appropriated 
$50,000,000 for fiscal year 2002 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.
    ``(e) Comprehensive School Reform.--For the purpose of carrying out 
part F, there are authorized to be appropriated $260,000,000 for fiscal 
year 2002 and such sums as may be necessary for each of the 4 
succeeding fiscal years.
    ``(f) Rural Education.--For the purpose of carrying out part G, 
there are authorized to be appropriated $300,000,000 for fiscal year 
2002 and such sums as may be necessary for each of 4 succeeding fiscal 
years to be distributed equally between subparts 1 and 2.
    ``(g) Capital Expenses.--For the purpose of carrying out section 
1120(e), there are authorized to be appropriated $6,000,000 for fiscal 
year 2002, and such sums as may be necessary for fiscal year 2003.
    ``(h) Federal Activities.--
            ``(1) Sections 1501 and 1502.--(A) For the purpose of 
        carrying out section 1501, there are authorized to be 
        appropriated $9,000,000 for fiscal year 2002 and such sums as 
        may be necessary for each of the 4 succeeding fiscal years.
            ``(B) For the purpose of carrying out section 1502, there 
        are authorized to be appropriated such sums as may be necessary 
        for fiscal year 2002 and for each of the 4 succeeding fiscal 
        years.
            ``(2) Section 1503.--For the purpose of carrying out 
        section 1503, there are authorized to be appropriated such sums 
        as may be necessary for fiscal year 2002 and for each of the 4 
        succeeding fiscal years.
    ``(i) State Administration.--
            ``(1) State reservation.--Each State may reserve, from the 
        sum of the amounts it receives under parts A, C, and D of this 
        title, an amount equal to the greater of 1 percent of the 
        amount it received under such parts for fiscal year 2001, or 
        $400,000 ($50,000 for each outlying area), including any funds 
        it receives under paragraph (2), to carry out administrative 
        duties assigned under parts A, C, and D.
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated $10,000,000 for fiscal year 2002 
        and such sums as may be necessary for each of the 4 succeeding 
        fiscal years for additional State administration grants. Any 
        such additional grants shall be allocated among the States in 
        proportion to the sum of the amounts received by each State for 
        that fiscal year under parts A, C, and D of this title.
            ``(3) Special rule.--The amount received by each State 
        under paragraphs (1) and (2) may not exceed the amount of State 
        funds expended by the State educational agency to administer 
        elementary and secondary education programs in such State.
    ``(j) Assistance for Local School Improvement.--
            ``(1) Program authorized.--The Secretary shall award grants 
        to States to provide subgrants to local educational agencies 
        for the purpose of providing assistance for school improvement 
        consistent with section 1116. Such grants shall be allocated 
        among States, the Bureau of Indian Affairs, and the outlying 
        areas, in proportion to the grants received by the State, the 
        Bureau of Indian Affairs, and the outlying areas for the fiscal 
        year under parts A, C, and D of this title. The Secretary shall 
        expeditiously allocate a portion of such funds to States for 
        the purpose of assisting local educational agencies and schools 
        that were in school improvement status on the date preceding 
        the date of the enactment of the No Child Left Behind Act of 
        2001.
            ``(2) Reallocations.--If a State does not apply for funds 
        under this subsection, the Secretary shall reallocate such 
        funds to other States in the same proportion funds are 
        allocated under paragraph (1).
            ``(3) State applications.--Each State educational agency 
        that desires to receive funds under this subsection shall 
        submit an application to the Secretary at such time, and 
        containing such information as the Secretary shall reasonably 
        require, except that such requirement shall be waived if a 
        State educational agency has submitted such information as part 
        of its State plan under this part. Each State plan shall 
        describe how such funds will be allocated to ensure that the 
        State educational agency and local educational agencies comply 
        with school improvement, corrective action, and restructuring 
        requirements of section 1116.
            ``(4) Local educational agency grants.--A grant to a local 
        educational agency under this subsection shall be--
                    ``(A) of sufficient size and scope to support the 
                activities required under sections 1116 and 1117, but 
                not less than $50,000 and not more than $500,000 to 
                each participating school;
                    ``(B) integrated with funds awarded by the State 
                under this Act; and
                    ``(C) renewable for two additional 1-year periods 
                if schools are making yearly progress consistent with 
                State and local educational agency plans developed 
                under section 1116.
            ``(5) Priority.--The State, in awarding such grants, shall 
        give priority to local educational agencies with the lowest 
        achieving schools, that demonstrate the greatest need for such 
        funds, and that demonstrate the strongest commitment to making 
        sure such funds are used to provide adequate resources to 
        enable the lowest achieving schools to meet the yearly progress 
        goals under State and local school improvement, corrective 
        action, and restructuring plans under section 1116.
            ``(6) Administrative costs.--A State educational agency 
        that receives a grant award under this subsection may reserve 
        not more than 5 percent of such award for administration, 
        evaluation, and technical assistance expenses.
            ``(7) Local awards.--Each local educational agency that 
        applies for assistance under this subsection shall describe how 
        it will provide the lowest achieving schools the resources 
        necessary to meet yearly progress goals under State and local 
        school improvement, corrective action, and restructuring plans 
        under section 1116.
            ``(8) Authorization of appropriations.--For the purpose of 
        carrying out this subsection, there are authorized to be 
        appropriated $500,000,000 for fiscal year 2002 and such sums as 
        may be necessary for each of the 4 succeeding fiscal years.''.

SEC. 103. RESERVATION FOR SCHOOL IMPROVEMENT.

    Section 1003 is amended to read as follows:

``SEC. 1003. RESERVATION FOR SCHOOL IMPROVEMENT.

    ``(a) State Reservations.--Each State shall reserve 1 percent of 
the amount it receives under subpart 2 of part A for fiscal years 2002 
and 2003, and 3 percent of the amount received under such subpart for 
fiscal years 2004 through 2006, to carry out subsection (b) and to 
carry out the State'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 allocate at least 95 
percent of that amount directly to local educational agencies for 
schools identified for school improvement, corrective action, and 
restructuring under section 1116(b) that have the greatest need for 
that assistance in amounts sufficient to have a significant impact in 
improving those schools.
    ``(c) Priority.--The State educational agency, in allocating funds 
to local educational agencies under this section, shall give priority 
to local educational agencies that--
            ``(1) have the lowest achieving schools;
            ``(2) demonstrate the greatest need for such funds; and
            ``(3) demonstrate the strongest commitment to ensuring that 
        such funds are used to enable the lowest achieving schools to 
        meet the yearly progress goals under section 1116(b)(3)(A)(v).
    ``(d) Unused Funds.--If, after consultation with local educational 
agencies in the State, the State educational agency determines that the 
amount of funds reserved to carry out subsection (b) is greater than 
the amount needed to provide the assistance described in that 
subsection, it may allocate the excess amount to local educational 
agencies in accordance with either or both--
            ``(1) the relative allocations it made to those agencies 
        for that fiscal year under subpart 2 of part A; or
            ``(2) section 1126(c).
    ``(e) Special Rule.--Notwithstanding any other provision of this 
section, the amount of funds reserved by the State under subsection (a) 
in any given fiscal year shall not decrease the amount of funds each 
local educational agency receives under subpart 2 below the amount 
received by such agency under such subpart in the preceding fiscal 
year.''.

SEC. 104. BASIC PROGRAMS.

    The heading for part A of title I and sections 1111 through 1115 
are amended to read as follows:

   ``PART A--IMPROVING BASIC PROGRAMS OPERATED BY LOCAL EDUCATIONAL 
                                AGENCIES

                ``Subpart 1--Basic Program Requirements

``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, developed in consultation with local educational 
        agencies, teachers, principals, pupil services personnel, 
        administrators (including administrators of programs described 
        in other parts of this title), other staff, and parents, that 
        satisfies the requirements of this section and that is 
        coordinated with other programs under this Act, the Individuals 
        with Disabilities Education Act (20 U.S.C. 1400 et seq.), the 
        Carl D. Perkins Vocational and Technical Education Act of 1998 
        (20 U.S.C. 2301 et seq.), the Head Start Act (42 U.S.C. 9831 et 
        seq.), and the McKinney-Vento Homeless Assistance Act (42 
        U.S.C. 11431 et seq.).
            ``(2) Consolidated plan.--A State plan submitted under 
        paragraph (1) may be submitted as part of a consolidated plan 
        under section 8302.
    ``(b) Academic Standards, Academic Assessments, and 
Accountability.--
            ``(1) Challenging academic standards.--
                    ``(A) Each State plan shall demonstrate that the 
                State has adopted challenging academic content 
                standards and challenging student academic achievement 
                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 academic standards required by 
                subparagraph (A) shall be the same academic standards 
                that the State applies to all schools and children in 
                the State.
                    ``(C) The State shall have such academic standards 
                for all public elementary and secondary school 
                children, including children served under this part, in 
                subjects determined by the State, but including at 
                least mathematics, reading or language arts, and 
                science (beginning in the 2005-2006 school year), which 
                shall include the same knowledge, skills, and levels of 
                achievement expected of all children.
                    ``(D) Academic standards under this paragraph shall 
                include--
                            ``(i) challenging academic 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 academic 
                        achievement standards that--
                                    ``(I) are aligned with the State's 
                                academic content standards;
                                    ``(II) describe 2 levels of high 
                                performance (proficient and advanced) 
                                that determine how well children are 
                                mastering the material in the State 
                                academic content standards; and
                                    ``(III) describe a third level of 
                                performance (basic) to provide complete 
                                information about the progress of the 
                                lower performing children toward 
                                achieving to the proficient and 
                                advanced levels of performance.
                    ``(E) For the subjects in which students will be 
                served under this part, but for which a State is not 
                required by subparagraphs (A), (B), and (C) to develop, 
                and has not otherwise developed such academic 
                standards, the State plan shall describe a strategy for 
                ensuring that students are taught the same knowledge 
                and skills in such subjects and held to the same 
                expectations as are all children.
                    ``(F) Nothing in this part shall prohibit a State 
                from revising any standard adopted under this part 
                before or after the date of enactment of the No Child 
                Left Behind Act of 2001.
            ``(2) Accountability.--
                    ``(A) In general.--Each State plan shall 
                demonstrate that the State has developed and is 
                implementing a statewide State accountability system 
                that has been or will be effective in ensuring that all 
                local educational agencies, public elementary schools, 
                and public secondary schools make adequate yearly 
                progress as defined under subparagraph (B). Each State 
                accountability system shall--
                            ``(i) be based on the academic standards 
                        and academic assessments adopted under 
                        paragraphs (1) and (4) and take into account 
                        the performance of all public school students;
                            ``(ii) be the same as the accountability 
                        system the State uses for all public schools or 
                        all local educational agencies in the State, 
                        except that public schools and local 
                        educational agencies not participating under 
                        this part are not subject to the requirements 
                        of section 1116; and
                            ``(iii) include rewards and sanctions the 
                        State will use to hold local educational 
                        agencies and public schools accountable for 
                        student achievement and for ensuring that they 
                        make adequate yearly progress in accordance 
                        with the State's definition under subparagraph 
                        (B).
                    ``(B) Adequate yearly progress.--Each State plan 
                shall demonstrate, based on academic assessments 
                described under paragraph (4), what constitutes 
                adequate yearly progress of the State, and of public 
                schools and local educational agencies in the State, 
                toward enabling all public school students to meet the 
                State's student academic achievement standards, while 
                working toward the goal of narrowing the achievement 
                gaps in the State, local educational agency, and 
                school.
                    ``(C) Definition.--`Adequate yearly progress' shall 
                be defined by the State in a manner that--
                            ``(i) applies the same high academic 
                        standards of academic performance to all public 
                        school students in the State;
                            ``(ii) measures the progress of public 
                        schools and local educational agencies based 
                        primarily on the academic assessments described 
                        in paragraph (4);
                            ``(iii) measures the student dropout rate, 
                        as defined for the Common Core of Data 
                        maintained by the National Center for Education 
                        Statistics established under section 403 of the 
                        National Education Statistics Act of 1994 (20 
                        U.S.C. 9002);
                            ``(iv) includes separate annual numerical 
                        objectives for continuing and significant 
                        improvement in each of the following (except 
                        that disaggregation of data under subclauses 
                        (II) and (III) 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):
                            ``(I) The achievement of all public school 
                        students.
                            ``(II) The achievement of--
                                            ``(aa) economically 
                                        disadvantaged students;
                                            ``(bb) students from major 
                                        racial and ethnic groups;
                                            ``(cc) students with 
                                        disabilities; and
                                            ``(dd) students with 
                                        limited English proficiency;
                            ``(III) solely for the purpose of 
                        determining adequate yearly progress of the 
                        State, the acquisition of English language 
                        proficiency by children with limited English 
                        proficiency;
                            ``(v) at the State's discretion, may also 
                        include other academic measures such as 
                        promotion, completion of college preparatory 
                        courses, and high school completion (and for 
                        individual local educational agencies and 
                        schools, the acquisition of English language 
                        proficiency by children with limited English 
                        proficiency), except that inclusion of such 
                        other measures may not change which schools or 
                        local educational agencies would otherwise be 
                        subject to improvement or corrective action 
                        under section 1116 if the discretionary 
                        indicators were not included; and
                            ``(vi) includes a timeline that--
                                    ``(I) uses as a baseline year the 
                                year following the date of enactment of 
                                the No Child Left Behind Act of 2001;
                                    ``(II) establishes a target year by 
                                which all members of each group of 
                                students described in subclauses (I) 
                                and (II) of clause (iii) shall meet or 
                                exceed the State's proficient level of 
                                academic performance on the State 
                                academic assessment used for the 
                                purposes of this section and section 
                                1116, except that the target year shall 
                                not be more than 12 years from the 
                                baseline year; and
                                    ``(III) for each year until and 
                                including the target year, establishes 
                                annual goals for the academic 
                                performance of each group of students 
                                described in subclauses (I) and (II) of 
                                clause (iii) on the State academic 
                                assessment that--
                                            ``(aa) indicates a minimum 
                                        percentage of students who must 
                                        meet the proficient level on 
                                        the academic assessment, such 
                                        that the minimum percentage is 
                                        the same for each group of 
                                        students described in 
                                        subclauses (I) and (II) of 
                                        clause (iii); or
                                            ``(bb) indicates an annual 
                                        minimum amount by which the 
                                        percentage of students who meet 
                                        the proficient level among each 
                                        group of students described in 
                                        subclauses (I) and (II) of 
                                        clause (iii) shall increase, 
                                        such that the minimum increase 
                                        for each group is equal to or 
                                        greater than 100 percent minus 
                                        the percentage of the group 
                                        meeting the proficient level in 
                                        the baseline year divided by 
                                        the number of years from the 
                                        baseline year to the target 
                                        year established under clause 
                                        (I).
                    ``(D) Annual improvement for schools.--For a school 
                to make adequate yearly progress under subparagraph 
                (A), not less than 95 percent of each group of students 
                described in subparagraph (C)(iii)(II) who are enrolled 
                in the school are required to take the academic 
                assessments, consistent with section 612(a)(17)(A) of 
                the Individuals with Disabilities Education Act (20 
                U.S.C. 1412(a)(17)(A)) and paragraph (4)(G)(ii), on 
                which adequate yearly progress is based.
                    ``(E) Public notice and comment.--Each State shall 
                ensure that in developing its plan, it diligently seeks 
                public comment from a range of institutions and 
                individuals in the State with an interest in improved 
                student achievement and that the State makes and 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.
            ``(3) State authority.--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 curriculum content and 
        student academic achievement standards, and academic 
        assessments aligned with such academic standards, which will be 
        applicable to all students enrolled in the State's public 
        schools, then the State educational agency may meet the 
        requirements of this subsection by--
                    ``(A) adopting academic standards and academic 
                assessments that meet the requirements of this 
                subsection, on a statewide basis, limiting their 
                applicability to students served under this part; or
                    ``(B) adopting and implementing policies that 
                ensure that each local educational agency in the State 
                which receives grants under this part will adopt 
                curriculum content and student academic achievement 
                standards, and academic assessments aligned with such 
                standards, which meet all of the criteria in this 
                subsection and any regulations regarding such standards 
                and assessments which the Secretary may publish, and 
                which are applicable to all students served by each 
                such local educational agency.
            ``(4) Academic Assessments.--Each State plan shall 
        demonstrate that the State has implemented a set of high-
        quality, yearly student academic assessments that include, at a 
        minimum, academic assessments in mathematics, and reading or 
        language arts, that will be used as the primary means of 
        determining the yearly performance of the State and of each 
        local educational agency and school in enabling all children to 
        meet the State's challenging student academic achievement 
        standards. Such assessments shall--
                    ``(A) be the same academic assessments used to 
                measure the performance of all children;
                    ``(B) be aligned with the State's challenging 
                content and student academic achievement 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, recognized professional and technical 
                standards for such assessments;
                    ``(D) for the purposes of this part, be scored to 
                ensure the performance of each student is evaluated 
                solely against the State's challenging academic content 
                standards and not relative to the score of other 
                students;
                    ``(E) except as otherwise provided for grades 3 
                through 8 under subparagraph (G), measure the 
                proficiency of students in, at a minimum, mathematics 
                and reading or language arts, and be administered not 
                less than once during--
                            ``(i) grades 3 through 5;
                            ``(ii) grades 6 through 9; and
                            ``(iii) grades 10 through 12;
                    ``(F) involve multiple up-to-date measures of 
                student achievement, including measures that assess 
                critical thinking skills and understanding;
                    ``(G) beginning not later than school year 2004-
                2005, measure the performance of students against the 
                challenging State content and student academic 
                achievement standards in each of grades 3 through 8 in, 
                at a minimum, mathematics, and reading or language 
                arts, except that the Secretary may provide the State 1 
                additional year if the State demonstrates that 
                exceptional or uncontrollable circumstances, such as a 
                natural disaster or a precipitous and unforeseen 
                decline in the financial resources of the State, 
                prevented full implementation of the academic 
                assessments by that deadline and that it will complete 
                implementation within the additional 1-year period;
                    ``(H) provide for--
                            ``(i) the participation in such assessments 
                        of all students;
                            ``(ii) the reasonable adaptations and 
                        accommodations for students with disabilities 
                        defined under 602(3) of the Individuals with 
                        Disabilities Education Act (20 U.S.C. 1401(3)) 
                        necessary to measure the achievement of such 
                        students relative to State content and State 
                        student academic achievement 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;
                            ``(iv) notwithstanding clause (iii), the 
                        academic assessment (using tests written in 
                        English) of reading or language arts of any 
                        student who has attended school in the United 
                        States (not including Puerto Rico) for 3 or 
                        more consecutive school years, except if the 
                        local educational agency determines, on a case-
                        by-case individual basis, that academic 
                        assessments in another language and form would 
                        likely yield more accurate and reliable 
                        information on what such students know and can 
                        do, the local educational agency may assess 
                        such students in the appropriate language other 
                        than English for 1 additional year;
                    ``(I) 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 one school in the local educational 
                agency in any academic year shall be used only in 
                determining the progress of the local educational 
                agency;
                    ``(J) produce individual student reports to be 
                provided to parents, which include academic assessment 
                scores, or other information on the attainment of 
                student academic achievement standards; and
                    ``(K) enable results to be 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.
                    ``(L) be tests of objective knowledge, based on 
                measurable, verifiable, and widely accepted 
                professional testing and assessment standards, and 
                shall not assess the personal opinions, attitudes, or 
                beliefs of the student being assessed.
            ``(5) Special rule.--Academic assessment measures in 
        addition to those in paragraph (4) that do not meet the 
        requirements of such paragraph may be included as additional 
        measures, but may not be used in lieu of the academic 
        assessments required in paragraph (4). Results on any 
        additional measures under this paragraph shall not change which 
        schools or local educational agencies would otherwise be 
        subject to improvement or corrective action under section 1116 
        if the additional measures were not included.
            ``(6) 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 academic 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 academic assessment measures are 
        needed. Upon request, the Secretary shall assist with the 
        identification of appropriate academic assessment measures in 
        the needed languages, but shall not mandate a specific academic 
        assessment or mode of instruction.
            ``(7) Academic assessments of english language 
        proficiency.--Each State plan shall demonstrate that local 
        educational agencies in the State will, beginning no later than 
        school year 2002-2003, annually assess the English proficiency 
        of all students with limited English proficiency in their 
        schools.
            ``(8) Requirement.--Each State plan shall describe--
                    ``(A) how the State educational agency will assist 
                each local educational agency and school affected by 
                the State plan to develop the capacity to comply with 
                each of the requirements of sections 1112(c)(1)(D), 
                1114(c), and 1115(c) that is applicable to such agency 
                or school;
                    ``(B) how the State educational agency will assist 
                each local educational agency and school affected by 
                the State plan to provide additional educational 
                assistance to individual students assessed as needing 
                help to achieve the State's challenging academic 
                standards.
                    ``(C) such other factors as the State considers 
                appropriate to provide students an opportunity to 
                achieve the knowledge and skills described in the 
                challenging academic content standards adopted by the 
                State.
            ``(9) Use of academic assessment results to improve student 
        achievement.--Each State plan shall describe how the State will 
        ensure that the results of the State assessments described in 
        paragraph (4)--
                    ``(A) will be provided promptly, but not later than 
                the end of the school year (consistent with 1116, to 
                local educational agencies, schools, and teachers in a 
                manner that is clear and easy to understand; and
                    ``(B) be used by those local educational agencies, 
                schools, and teachers to improve the educational 
                achievement of individual students.
            ``(10) Technical assistance on academic assessment 
        requirements.--The Secretary shall provide technical assistance 
        to interested States regarding how to meet the requirements of 
        paragraph (4).
    ``(c) Other Provisions To Support Teaching and Learning.--Each 
State plan shall contain assurances that--
            ``(1) the State shall produce, beginning with the 2003-2004 
        school year, the annual State report cards described in 
        subsection (h)(1);
            ``(2) the State will participate, beginning in school year 
        2002-2003, in annual academic assessments of 4th and 8th grade 
        reading and mathematics under--
                    ``(A) the State National Assessment of Educational 
                Progress carried out under section 411(b)(2) of the 
                National Education Statistics Act of 1994 (20 U.S.C. 
                9010(b)(2)); or
                    ``(B) another academic assessment selected by the 
                State which meets the criteria of section 
                7101(b)(1)(B)(ii) of this Act;
            ``(3) the State educational agency shall 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 1119A and technical assistance under 
        section 1117; and
            ``(4)(A) where educational service agencies exist, the 
        State educational agency shall consider providing professional 
        development and technical assistance through such agencies; and
            ``(B) where educational service agencies do not exist, the 
        State educational agency shall 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 shall notify local 
        educational agencies and the public of the content and student 
        academic achievement standards and academic 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 shall 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 shall 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 shall 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 1603(b) in 
        developing the plan and monitoring its implementation;
            ``(11) the State educational agency shall inform local 
        educational agencies of the local educational agency's 
        authority to transfer funds under title VII, to obtain waivers 
        under title VIII and, if the State is an Ed-Flex Partnership 
        State, to obtain waivers under the Education Flexibility 
        Partnership Act of 1999 (20 U.S.C. 5891a et seq.); and
            ``(12) the State educational agency shall encourage local 
        educational agencies and individual schools participating in a 
        program assisted under this part to offer family literacy 
        services (using funds under this part), if the agency or school 
        determines that a substantial number of students served under 
        this part by the agency or school have parents who do not have 
        a high school diploma or its recognized equivalent or who have 
        low levels of literacy.
    ``(d) Peer Review and Secretarial Approval.--The Secretary shall--
            ``(1) establish a peer review process to assist in the 
        review of State plans;
            ``(2) 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;
            ``(3) 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;
            ``(4) not decline to approve a State's plan before--
                    ``(A) offering the State an opportunity to revise 
                its plan;
                    ``(B) providing technical assistance in order to 
                assist the State to meet the requirements under 
                subsections (a), (b), and (c); and
                    ``(C) providing a hearing; and
            ``(5) 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 one or 
        more specific elements of the State's academic content 
        standards or to use specific academic assessment instruments or 
        items.
    ``(e) Duration of the Plan.--
            ``(1) In general.--Each State plan shall--
                    ``(A) be submitted for the first year for which 
                this part is in effect after the date of the enactment 
                of the No Child Left Behind Act of 2001;
                    ``(B) remain in effect for the duration of the 
                State's participation under this part; and
                    ``(C) 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 or 
        revised State academic content standards and State student 
        achievement standards, new academic assessments, or a new 
        definition of adequate yearly progress, the State shall submit 
        such information to the Secretary.
    ``(f) Limitation on Conditions.--Officers and employees of the 
Federal Government are prohibited from mandating, directing, or 
controlling a State, local educational agency, or school's specific 
instructional content or student academic achievement standards and 
academic assessments, curriculum, or program of instruction, as a 
condition of eligibility to receive funds under this part.
    ``(g) Penalties.--
            ``(1) Failure to meet deadlines enacted in 1994.--
                    ``(A) In general.--If a State fails to meet the 
                deadlines established by the Improving America's 
                Schools Act of 1994 (or under any waiver granted by the 
                Secretary or under any compliance agreement with the 
                Secretary) for demonstrating that it has in place 
                challenging academic content standards and student 
                achievement standards, and a system for measuring and 
                monitoring adequate yearly progress, the Secretary 
                shall withhold 25 percent of the funds that would 
                otherwise be available for State administration and 
                activities in each year until the Secretary determines 
                that the State meets those requirements;
                    ``(B) No extension.--The Secretary shall not grant 
                any additional waivers of, or enter into any additional 
                compliance agreements to extend, the deadlines 
                described in subparagraph (A) for any State.
            ``(2) Failure to meet requirements enacted in 2001.--If a 
        State fails to meet any of the requirements of this section, 
        other than the requirements described in paragraph (1), the 
        Secretary may withhold funds for State administration until the 
        Secretary determines that the State has fulfilled those 
        requirements.
    ``(h) Reports.--
            ``(1) Annual state report card.--
                    ``(A) In general.--Not later than the beginning of 
                the 2003-2004 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 at each proficiency level 
                        on the State academic assessments described in 
                        subsection (b)(4) (disaggregated by race, 
                        ethnicity, gender, disability status, migrant 
                        status, English proficiency, and status as 
                        economically disadvantaged, except that such 
                        disaggregation shall not be required in a case 
                        in which the number of students in a category 
                        is insufficient to yield statistically reliable 
                        information or the results would reveal 
                        individually identifiable information about an 
                        individual student);
                            ``(ii) information that provides a 
                        comparison between the actual achievement 
                        levels of each group of students described in 
                        subclauses (I) and (II) of subsection (b)(2)(C) 
                        to the State's annual numerical objectives for 
                        each such group of students on each of the 
                        assessments required under this part;
                            ``(iii) the percentage of students not 
                        tested (disaggregated by the same categories 
                        and subject to the same exception described in 
                        clause (i));
                            ``(iv) the percentage of students who 
                        graduate from high school within 4 years of 
                        starting high school;
                            ``(v) the percentage of students who take 
                        and complete advanced placement courses as 
                        compared to the population of the students 
                        eligible to take such courses, and the rate of 
                        passing of advanced placement tests;
                            ``(vi) the professional qualifications of 
                        teachers in the aggregate, including the 
                        percentage of teachers teaching with emergency 
                        or provisional qualifications, and the 
                        percentage of class sections not taught by 
                        fully qualified teachers;
                            ``(vii) such other information (such as 
                        dropout and school attendance rates; and 
                        average class size by grade level) as the State 
                        believes will best provide parents, students, 
                        and other members of the public with 
                        information on the progress of each of the 
                        State's public schools; and
                            ``(viii) a clear and concise description of 
                        the State's accountability system, including: a 
                        description of the criteria by which the State 
                        evaluates school performance, and the criteria 
                        that the State has established, consistent with 
                        (b)(2)(B), to determine the status of schools 
                        regarding school improvement, corrective 
                        action, and reconstitution.
            ``(2) Content of local educational agency report cards.--
                    ``(A) Minimum requirements.--The State shall ensure 
                that each local educational agency collects appropriate 
                data and includes in its annual report for each of its 
                schools, at a minimum--
                            ``(i) the information described in 
                        paragraph (1)(D) for each local educational 
                        agency and school; and
                            ``(ii)(I) in the case of a local 
                        educational agency--
                                    ``(aa) 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) of 
                                this Act; and
                                    ``(bb) information that shows how 
                                students in its schools perform on the 
                                statewide academic assessment compared 
                                to students in the State as a whole; 
                                and
                            ``(II) in the case of a school--
                                    ``(aa) whether it has been 
                                identified for school improvement; and
                                    ``(bb) information that shows how 
                                its students performed on the statewide 
                                academic assessment compared to 
                                students in the local educational 
                                agency and the State as a whole.
                    ``(B) 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.
                    ``(C) Public dissemination.--The local educational 
                agency shall, not later than the beginning of the 2003-
                2004 school year, publicly disseminate the information 
                described in this paragraph to all schools in the 
                district and to all parents of students attending those 
                schools (to the extent practicable, in a language they 
                can understand), and make the information broadly 
                available through public means, such as posting on the 
                Internet, distribution to the media, and distribution 
                through public agencies.
            ``(3) Pre-existing 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 prior to the enactment of the No Child 
        Left Behind Act of 2001 may use those reports for the purpose 
        of this subsection, so long as any such report is modified, as 
        may be needed, 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 academic assessment system described 
                in subsection (b)(4);
                    ``(B) beginning not later than school year 2004-
                2005, information on the achievement of students on the 
                academic assessments required by that subsection, 
                including the disaggregated results for the categories 
                of students identified in subsection 
                (b)(2)(C)(iii)(II);
                    ``(C) beginning not later than school year 2002-
                2003, information on the acquisition of English 
                proficiency by children with limited English 
                proficiency; and
                    ``(D) in any year before the State begins to 
                provide the information described in subparagraph (B), 
                information on the results of student academic 
                assessments (including disaggregated results) required 
                under this section.
            ``(5) Parents right-to-know.--
                    ``(A) Qualifications.--At the beginning of each 
                school year, a local educational agency that receives 
                funds under this part shall notify the parents of each 
                student attending any school receiving funds under this 
                part that they may request, and shall provide the 
                parents upon request (and in a timely manner), 
                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 paraprofessionals and if so, their 
                        qualifications.
                    ``(B) Additional information.--In addition to the 
                information which parents may request under 
                subparagraph (A), a school which receives funds under 
                this part shall provide to each individual parent--
                            ``(i) information on the level of 
                        performance of the individual student for whom 
                        they are the parent in each of the State 
                        academic assessments as required under this 
                        part; and
                            ``(ii) timely notice that the student for 
                        whom they are the parent has been assigned, or 
                        has been taught for 4 or more consecutive weeks 
                        by, a teacher who is not fully qualified.
                    ``(C) Format.--The notice and information provided 
                to parents under this paragraph shall be in an 
                understandable and uniform format and, to the extent 
                practicable, provided in a language that the parents 
                can understand.
            ``(6) Plan content.--A State shall include in its plan 
        under subsection (b) an assurance that it has in effect a 
        policy that meets the requirements of this section.
    ``(i) Privacy.--Information collected under this section shall be 
collected and disseminated in a manner that protects the privacy of 
individuals.
    ``(j) Special Rule with Respect to Bureau Funded Schools.--In 
determining the assessments to be used by each Bureau funded school 
receiving funds under this part, the following shall apply:
            ``(1) Each Bureau funded school which obtains accreditation 
        by the State in which it is operating shall utilize the 
        assessments the State has developed and implemented to meet the 
        requirements of this section, or such other appropriate 
        assessment as approved by the Secretary of the Interior.
            ``(2) Each Bureau funded school which obtains accreditation 
        by a regional accreditation organization shall adopt an 
        appropriate assessment, in consultation and with the approval 
        of the Secretary of Interior and consistent with assessments 
        adopted by other schools in the same State or region, that 
        meets the requirements of this section.
            ``(3) Each Bureau funded school which obtains accreditation 
        by a tribal accrediting agency or tribal division of education 
        shall use an assessment developed by such agency or division, 
        except that the Secretary of Interior shall ensure that such 
        assessment meets the requirements of this section.

``SEC. 1112. LOCAL EDUCATIONAL AGENCY PLANS.

    ``(a) Plans Required.--
            ``(1) Subgrants.--A local educational agency may receive a 
        subgrant under this part for any fiscal year only if such 
        agency has on file with the State educational agency a plan, 
        approved by the State educational agency, that is coordinated 
        with other programs under this Act, the Individuals with 
        Disabilities Education Act (20 U.S.C. 1400 et seq.), the Carl 
        D. Perkins Vocational and Technical Education Act of 1998 (20 
        U.S.C. 2301 et seq.), the Head Start Act (42 U.S.C. 9831 et 
        seq.), the McKinney-Vento Homeless Assistance Act, and other 
        Acts, as appropriate.
            ``(2) Consolidated application.--The plan may be submitted 
        as part of a consolidated application under section 8305.
    ``(b) Plan Provisions.--In order to help low achieving children 
achieve high academic standards, each local educational agency plan 
shall include--
            ``(1) a description of additional high-quality student 
        academic assessments, if any, other than the academic 
        assessments described in the State plan under section 1111, 
        that the local educational agency and schools served under this 
        part will use to--
                    ``(A) determine the success of children served 
                under this part in meeting the State's student academic 
                achievement standards and provide information to 
                teachers, parents, and students on the progress being 
                made toward meeting the State student academic 
                achievement standards described in section 
                1111(b)(1)(D)(ii);
                    ``(B) assist in diagnosis, teaching, and learning 
                in the classroom in ways that best enable low-achieving 
                children served under this title to meet State academic 
                standards and do well in the local curriculum; and
                    ``(C) determine what revisions are needed to 
                projects under this title so that such children meet 
                the State's student academic achievement standards;
            ``(2) at the local educational agency's discretion, a 
        description of any other indicators that will be used in 
        addition to the academic assessments described in paragraph (1) 
        for the uses described in such paragraph, except that results 
        on any discretionary indicators shall not change which schools 
        would otherwise be subject to improvement of corrective action 
        under section 1118 if the additional measures are not included;
            ``(3) a description of how the local educational agency 
        will provide additional educational assistance to individual 
        students assessed as needing help to achieve the State's 
        challenging academic standards;
            ``(4) a description of the strategy the local educational 
        agency will use to provide professional development for 
        teachers, and, if appropriate, pupil services personnel, 
        administrators, parents and other staff, including local 
        educational agency level staff in accordance with section 
        1119A;
            ``(5) a description of how the local educational agency 
        will coordinate and integrate services provided under this part 
        with other educational services at the local educational agency 
        or individual school level, such as--
                    ``(A) Even Start, Head Start, Reading First, Early 
                Reading First, and other preschool programs, including 
                plans for the transition of participants in such 
                programs to local elementary school programs; and
                    ``(B) services for children with limited English 
                proficiency or with disabilities, migratory children 
                served under part C, neglected or delinquent youth, 
                Indian children served under part B of title III, 
                homeless children, and immigrant children in order to 
                increase program effectiveness, eliminate duplication, 
                and reduce fragmentation of the instructional program;
            ``(6) an assurance that the local educational agency will 
        participate, if selected, in the State National Assessment of 
        Educational Progress in 4th and 8th grade reading and 
        mathematics carried out under section 411(b)(2) of the 
        Education Statistics Act of 1994 (20 U.S.C. 9010(b)(2)), or in 
        another academic assessment pursuant to the State decision 
        under section 7101(b)(1)(B)(ii);
            ``(7) a description of the poverty criteria that will be 
        used to select school attendance areas under section 1113;
            ``(8) a description of how teachers, in consultation with 
        parents, administrators, and pupil services personnel, in 
        targeted assistance schools under section 1115, will identify 
        the eligible children most in need of services under this part;
            ``(9) a general description of the nature of the programs 
        to be conducted by such agency's schools under sections 1114 
        and 1115 and, where appropriate, educational services outside 
        such schools for children living in local institutions for 
        neglected or delinquent children, for neglected and delinquent 
        children in community day school programs, and for homeless 
        children;
            ``(10) a description of how the local educational agency 
        will ensure that migratory children and formerly migratory 
        children who are eligible to receive services under this part 
        are selected to receive such services on the same basis as 
        other children who are selected to receive services under this 
        part;
            ``(11) if appropriate, a description of how the local 
        educational agency will use funds under this part to support 
        preschool programs for children, particularly children 
        participating in Early Reading First, or in a Head Start or 
        Even Start program, which services may be provided directly by 
        the local educational agency or through a subcontract with the 
        local Head Start agency designated by the Secretary of Health 
        and Human Services under section 641 of the Head Start Act (42 
        U.S.C. 9836), agencies operating Even Start programs, Early 
        Reading First, or another comparable public early childhood 
        development program;
            ``(12) a description of the actions the local educational 
        agency will take to assist its low-performing schools, 
        including schools identified under section 1116 as in need of 
        improvement;
            ``(13) a description of the actions the local educational 
        agency will take to implement public school choice, consistent 
        with the requirements of section 1116;
            ``(14) a description how the local educational agency will 
        meet the requirements of section 1119(b)(1); and
            ``(15) a description of the services the local educational 
        agency will provide homeless children, including services 
        provided with funds reserved under section 1113(f)(3)(A).
    ``(c) Assurances.--
            ``(1) In general.--Each local educational agency plan shall 
        provide assurances that the local educational agency will--
                    ``(A) inform eligible schools and parents of 
                schoolwide program authority and the ability of such 
                schools to consolidate funds from Federal, State, and 
                local sources;
                    ``(B) provide technical assistance and support to 
                schoolwide programs;
                    ``(C) 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 student academic achievement 
                standards;
                    ``(D) fulfill such agency's school improvement 
                responsibilities under section 1116, including taking 
                corrective actions under paragraphs (7) and (8) of 
                section 1116(b);
                    ``(E) 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;
                    ``(F) take into account the experience of model 
                programs for the educationally disadvantaged, and the 
                findings of relevant scientifically based research 
                indicating that services may be most effective if 
                focused on students in the earliest grades at schools 
                that receive funds under this part;
                    ``(G) in the case of a local educational agency 
                that chooses to use funds under this part to provide 
                early childhood development services to low-income 
                children below the age of compulsory school attendance, 
                ensure that such services comply with the academic 
                achievement standards established under section 641A(a) 
                of the Head Start Act (42 U.S.C. 9836a(a));
                    ``(H) comply with the requirements of section 1119 
                regarding the qualifications of teachers and 
                paraprofessionals;
                    ``(I) inform eligible schools of the local 
                educational agency's authority to obtain waivers on the 
                school's behalf under title VIII of this Act, and if 
                the State is an Ed-Flex Partnership State, to obtain 
                waivers under the Education Flexibility Partnership Act 
                of 1999; and
                    ``(J) 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.
            ``(2) Special rule.--In carrying out subparagraph (G) of 
        paragraph (1), the Secretary--
                    ``(A) shall consult with the Secretary of Health 
                and Human Services on the implementation of such 
                subparagraph and shall establish procedures (taking 
                into consideration existing State and local laws, and 
                local teacher contracts) to assist local educational 
                agencies to comply with such subparagraph; and
                    ``(B) shall disseminate to local educational 
                agencies the Head Start academic achievement standards 
                as in effect under section 641A(a) of the Head Start 
                Act (42 U.S.C. 9836a(a)), and such agencies affected by 
                such subparagraph shall plan for the implementation of 
                such subparagraph (taking into consideration existing 
                State and local laws, and local teacher contracts), 
                including pursuing the availability of other Federal, 
                State, and local funding sources to assist in 
                compliance with such subparagraph.
            ``(3) Inapplicability.--The provisions of this subsection 
        shall not apply to preschool programs using the Even Start 
        model or to Even Start programs which are expanded through the 
        use of funds under this part.
    ``(d) Plan Development and Duration.--
            ``(1) Consultation.--Each local educational agency plan 
        shall be developed in consultation with teachers, principals, 
        administrators (including administrators of programs described 
        in other parts of this title), and other appropriate school 
        personnel, and with parents of children in schools served under 
        this part.
            ``(2) Duration.--Each such plan shall be submitted for the 
        first year for which this part is in effect following the date 
        of the enactment of the No Child Left Behind Act of 2001 and 
        shall remain in effect for the duration of the agency's 
        participation under this part.
            ``(3) Review.--Each local educational agency shall 
        periodically review, and as necessary, revise its plan.
    ``(e) State Approval.--
            ``(1) In general.--Each local educational agency plan shall 
        be filed according to a schedule established by the State 
        educational agency.
            ``(2) Approval.--The State educational agency shall approve 
        a local educational agency's plan only if the State educational 
        agency determines that the local educational agency's plan--
                    ``(A) enables schools served under this part to 
                substantially help children served under this part meet 
                the academic standards expected of all children 
                described in section 1111(b)(1); and
                    ``(B) meets the requirements of this section.
    ``(f) Program Responsibility.--The local educational agency plan 
shall reflect the shared responsibility of schools, teachers, and the 
local educational agency in making decisions regarding activities under 
sections 1114 and 1115.
    ``(g) Parental Notification and Consent for English Language 
Instruction.--
            ``(1) Notification.--If a local educational agency uses 
        funds under this part to provide English language instruction 
        to limited English proficient children, the agency shall inform 
        a parent or the parents of a child participating in an English 
        language instruction program for limited English proficient 
        children assisted under this part of--
                    ``(A) the reasons for the identification of the 
                child as being in need of English language instruction;
                    ``(B) the child's level of English proficiency, how 
                such level was assessed, and the status of the child's 
                academic achievement;
                    ``(C) how the English language instruction program 
                will specifically help the child acquire English and 
                meet age-appropriate academic standards for grade 
                promotion and graduation;
                    ``(D) what the specific exit requirements are for 
                the program;
                    ``(E) the expected rate of transition from the 
                program into a classroom that is not tailored for 
                limited English proficient children; and
                    ``(F) the expected rate of graduation from high 
                school for students in the program if funds under this 
                part are used for children in secondary schools.
            ``(2) Consent.--
                    ``(A) Agency requirements.--
                            ``(i) Informed consent.--For a child who 
                        has been identified as limited English 
                        proficient prior to the beginning of a school 
                        year, each local educational agency that 
                        receives funds under this part shall make a 
                        reasonable and substantial effort to obtain 
                        informed parental consent prior to the 
                        placement of a child in an English language 
                        instruction program for limited English 
                        proficient children funded under this part if 
                        the program does not include classes which 
                        exclusively or almost exclusively use the 
                        English language in instruction.
                            ``(ii) Written consent not obtained.--If 
                        written consent is not obtained, the local 
                        educational agency shall maintain a written 
                        record that includes the date and the manner in 
                        which such informed consent was sought, 
                        including the specific efforts made to obtain 
                        such consent.
                            ``(iii) Proof of effort.--Notice, in an 
                        understandable form, of specific efforts made 
                        to obtain written consent and a copy of the 
                        written record required in clause (ii) shall be 
                        mailed or delivered in writing to a parent, 
                        parents, or guardian of a child prior to 
                        placing the child in a program described in 
                        clause (i) and shall include a final request 
                        for parental consent for such services. After 
                        such notice has been mailed or delivered in 
                        writing, the local educational agency shall 
                        provide appropriate educational services.
                            ``(iv) Special rule applicable during 
                        school year.--For those children who have not 
                        been identified as limited English proficient 
                        prior to the beginning of the school year, the 
                        local educational agency shall make a 
                        reasonable and substantial effort to obtain 
                        parental consent under this clause. For such 
                        children, the agency shall document, in 
                        writing, its specific efforts made to obtain 
                        such consent prior to placing the child in a 
                        program described in clause (i). After such 
                        documentation has been made, the local 
                        educational agency shall provide appropriate 
                        educational services to such child. The proof 
                        of documentation shall be mailed or delivered 
                        in writing to a parent or parents of the child 
                        in a timely manner and shall include 
                        information on how to have their child 
                        immediately removed from the program upon their 
                        request. Nothing in this clause shall be 
                        construed as exempting a local educational 
                        agency from complying with the notification 
                        requirements of subsection (g)(1) and the 
                        consent requirements of this paragraph.
            ``(3) Parental rights.--A parent or the parents of a child 
        participating in an English language instruction program for 
        limited English proficient children assisted under this part 
        shall--
                    ``(A) select among methods of instruction, if more 
                than one method is offered in the program; and
                    ``(B) have the right to have their child 
                immediately removed from the program upon their 
                request.
            ``(4) Receipt of information.--A parent or the parents of a 
        limited English proficient child who is identified for 
        participation in an English language instruction program for 
        limited English proficient children assisted under this part 
        shall receive, in a manner and form understandable to the 
        parent or parents, the information required by this subsection. 
        At a minimum, the parent or parents shall receive--
                    ``(A) timely information about English language 
                instruction programs for limited English proficient 
                children assisted under this part;
                    ``(B) if a parent or parents of a participating 
                child so desires, notice of opportunities for regular 
                meetings for the purpose of formulating and responding 
                to recommendations from the parent or parents; and
                    ``(C) procedural information for removing a child 
                from a program for limited English proficient children.
            ``(5) Basis for admission or exclusion.--Students shall not 
        be admitted to, or excluded from, any federally-assisted 
        education program on the basis of a surname or language-
        minority status.

``SEC. 1113. ELIGIBLE SCHOOL ATTENDANCE AREAS.

    ``(a) Determination.--
            ``(1) In general.--A local educational agency shall use 
        funds received under this part only in eligible school 
        attendance areas.
            ``(2) Eligible school attendance areas.--For the purposes 
        of this part--
                    ``(A) the term `school attendance area' means, in 
                relation to a particular school, the geographical area 
                in which the children who are normally served by that 
                school reside; and
                    ``(B) the term `eligible school attendance area' 
                means a school attendance area in which the percentage 
                of children from low-income families is at least as 
                high as the percentage of children from low-income 
                families in the local educational agency as a whole.
            ``(3) Local educational agency discretion.--
                    ``(A) In general.--Notwithstanding paragraph (2), a 
                local educational agency may--
                            ``(i) designate as eligible any school 
                        attendance area or school in which at least 35 
                        percent of the children are from low-income 
                        families;
                            ``(ii) use funds received under this part 
                        in a school that is not in an eligible school 
                        attendance area, if the percentage of children 
                        from low-income families enrolled in the school 
                        is equal to or greater than the percentage of 
                        such children in a participating school 
                        attendance area of such agency;
                            ``(iii) designate and serve a school 
                        attendance area or school that is not eligible 
                        under subsection (b), but that was eligible and 
                        that was served in the preceding fiscal year, 
                        but only for 1 additional fiscal year; and
                            ``(iv) elect not to serve an eligible 
                        school attendance area or eligible school that 
                        has a higher percentage of children from low-
                        income families if--
                                    ``(I) the school meets the 
                                comparability requirements of section 
                                1120A(c);
                                    ``(II) the school is receiving 
                                supplemental funds from other State or 
                                local sources that are spent according 
                                to the requirements of section 1114 or 
                                1115; and
                                    ``(III) the funds expended from 
                                such other sources equal or exceed the 
                                amount that would be provided under 
                                this part.
                    ``(B) Special rule.--Notwithstanding subparagraph 
                (A)(iv), the number of children attending private 
                elementary and secondary schools who are to receive 
                services, and the assistance such children are to 
                receive under this part, shall be determined without 
                regard to whether the public school attendance area in 
                which such children reside is assisted under 
                subparagraph (A).
    ``(b) Ranking Order.--If funds allocated in accordance with 
subsection (f) are insufficient to serve all eligible school attendance 
areas, a local educational agency--
            ``(1) shall annually rank from highest to lowest according 
        to the percentage of children from low-income families in each 
        agency's eligible school attendance areas in the following 
        order--
                    ``(A) eligible school attendance areas in which the 
                concentration of children from low-income families 
                exceeds 75 percent; and
                    ``(B) all remaining eligible school attendance 
                areas in which the concentration of children from low-
                income families is 75 percent or lower either by grade 
                span or for the entire local educational agency;
            ``(2) shall, within each category listed in paragraph (1), 
        serve schools in rank order from highest to lowest according to 
        the ranking assigned under paragraph (1);
            ``(3) notwithstanding paragraph (2), may give priority, 
        within each such category and in rank order from highest to 
        lowest subject to paragraph (4), to eligible school attendance 
        areas that serve children in elementary schools; and
            ``(4) not serve a school described in paragraph (1)(B) 
        before serving a school described in paragraph (1)(A).
    ``(c) Low-Income Measures.--In determining the number of children 
ages 5 through 17 who are from low-income families, the local 
educational agency shall apply the measures described in paragraphs (1) 
and (2) of this subsection:
            ``(1) Allocation to public school attendance areas.--The 
        local educational agency shall use the same measure of poverty, 
        which measure shall be the number of children ages 5 through 17 
        in poverty counted in the most recent census data approved by 
        the Secretary, the number of children eligible for free and 
        reduced priced lunches under the Richard B. Russell National 
        School Lunch Act (42 U.S.C. 1751 et seq.), the number of 
        children in families receiving assistance under the State 
        program funded under part A of title IV of the Social Security 
        Act, or the number of children eligible to receive medical 
        assistance under the Medicaid program, or a composite of such 
        indicators, with respect to all school attendance areas in the 
        local educational agency--
                    ``(A) to identify eligible school attendance areas;
                    ``(B) to determine the ranking of each area; and
                    ``(C) to determine allocations under subsection 
                (f).
            ``(2) Allocation for equitable service to private school 
        students.--
                    ``(A) Calculation.--A local educational agency 
                shall have the final authority, consistent with section 
                1120 to calculate the number of private school 
                children, ages 5 through 17, who are low-income by--
                            ``(i) using the same measure of low-income 
                        used to count public school children;
                            ``(ii) 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 not available; or
                            ``(iii) 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 attendance area.
                    ``(B) Complaint process.--Any dispute regarding 
                low-income data on private school students shall be 
                subject to the complaint process authorized in section 
                8505.
    ``(d) Exception.--This section (other than subsections (a)(3) and 
(f)) shall not apply to a local educational agency with a total 
enrollment of less than 1,500 children.
    ``(e) Waiver for Desegregation Plans.--The Secretary may approve a 
local educational agency's written request for a waiver of the 
requirements of subsections (a) and (f), and permit such agency to 
treat as eligible, and serve, any school that children attend under a 
desegregation plan ordered by a State or court or approved by the 
Secretary, or such a plan that the agency continues to implement after 
it has expired, if--
            ``(1) the number of economically disadvantaged children 
        enrolled in the school is not less than 25 percent of the 
        school's total enrollment; and
            ``(2) the Secretary determines on the basis of a written 
        request from such agency and in accordance with such criteria 
        as the Secretary establishes, that approval of that request 
        would further the purposes of this part.
    ``(f) Allocations.--
            ``(1) In general.--A local educational agency shall 
        allocate funds received under this part to eligible school 
        attendance areas or eligible schools, identified under 
        subsection (b) in rank order on the basis of the total number 
        of children from low-income families in each area or school.
            ``(2) Special rule.--(A) Except as provided in subparagraph 
        (B), the per-pupil amount of funds allocated to each school 
        attendance area or school under paragraph (1) shall be at least 
        125 percent of the per-pupil amount of funds a local 
        educational agency received for that year under the poverty 
        criteria described by the local educational agency in the plan 
        submitted under section 1112, except that this paragraph shall 
        not apply to a local educational agency that only serves 
        schools in which the percentage of such children is 35 percent 
        or greater.
            ``(B) A local educational agency may reduce the amount of 
        funds allocated under subparagraph (A) for a school attendance 
        area or school by the amount of any supplemental State and 
        local funds expended in that school attendance area or school 
        for programs that meet the requirements of section 1114 or 
        1115.
            ``(3) Reservation.--A local educational agency shall 
        reserve such funds as are necessary under this part to provide 
        services comparable to those provided to children in schools 
        funded under this part to serve--
                    ``(A) homeless children who do not attend 
                participating schools, including providing 
                educationally related support services to children in 
                shelters and other locations where children may live;
                    ``(B) children in local institutions for neglected 
                children; and
                    ``(C) if appropriate, children in local 
                institutions for delinquent children and neglected or 
                delinquent children in community day school programs.
            ``(4) School improvement reservation.--In addition to the 
        funding a local educational agency receives under section 
        1003(b), a local educational agency may reserve such funds as 
        are necessary under this part to meet such agency's school 
        improvement responsibilities under section 1116, including 
        taking corrective actions under paragraphs (7) and (8) of 
        section 1116(b).
            ``(5) Financial incentives and rewards reservation.--A 
        local educational agency may reserve such funds as are 
        necessary under this part to provide financial incentives and 
        rewards to teachers who serve in schools eligible under 
        subsection (b)(1)(A) and identified for improvement under 
        section 1116(b)(1) for the purpose of attracting and retaining 
        qualified and effective teachers.

``SEC. 1114. SCHOOLWIDE PROGRAMS.

    ``(a) Purpose.--The purpose of a schoolwide program under this 
section is--
            ``(1) to enable a local educational agency to consolidate 
        funds under this part with other Federal, State, and local 
        funds, to upgrade the entire educational program in a high 
        poverty school; and
            ``(2) to help ensure that all children in such a school 
        meet challenging State academic standards for student 
        achievement, particularly those children who are most at-risk 
        of not meeting those standards.
    ``(b) Use of Funds for Schoolwide Programs.--
            ``(1) In general.--A local educational agency may 
        consolidate funds under this part, together with other Federal, 
        State, and local funds, in order 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.
            ``(2) Identification of students not required.--
                    ``(A) In general.--No school participating in a 
                schoolwide program shall be required to identify 
                particular children under this part as eligible to 
                participate in a schoolwide program or to provide 
                supplemental services to such children.
                    ``(B) Supplement funds.--A school participating in 
                a schoolwide program shall use funds available to carry 
                out this section only to supplement the amount of funds 
                that would, in the absence of funds under this part, be 
                made available from non-Federal sources for the school, 
                including funds needed to provide services that are 
                required by law for children with disabilities and 
                children with limited English proficiency.
            ``(3) Exemption from statutory and regulatory 
        requirements.--
                    ``(A) Exemption.--Except as provided in subsection 
                (c), the Secretary may, through publication of a notice 
                in the Federal Register, exempt schoolwide programs 
                under this section from statutory or regulatory 
                provisions of any other noncompetitive formula grant 
                program administered by the Secretary (other than 
                formula or discretionary grant programs under the 
                Individuals with Disabilities Education Act, except as 
                provided in section 613(a)(2)(D) of such Act), or any 
                discretionary grant program administered by the 
                Secretary, to support schoolwide programs if the intent 
                and purposes of such other programs are met.
                    ``(B) Requirements.--A school that chooses to use 
                funds from such other programs shall not be relieved of 
                the requirements relating to health, safety, civil 
                rights, student and parental participation and 
                involvement, services to private school children, 
                maintenance of effort, uses of Federal funds to 
                supplement, not supplant non-Federal funds, or the 
                distribution of funds to State or local educational 
                agencies that apply to the receipt of funds from such 
                programs.
                    ``(C) Records.--A school that consolidates funds 
                from different Federal 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 it maintains records that demonstrate that 
                the schoolwide program, considered as a whole addresses 
                the intent and purposes of each of the Federal programs 
                that were consolidated to support the schoolwide 
                program.
            ``(4) Professional development.--Each school receiving 
        funds under this part for any fiscal year shall devote 
        sufficient resources to effectively carry out the activities 
        described in subsection (c)(1)(D) in accordance with section 
        1119A for such fiscal year, except that a school may enter into 
        a consortium with another school to carry out such activities.
    ``(c) Components of a Schoolwide Program.--
            ``(1) In general.--A schoolwide program shall include the 
        following components:
                    ``(A) A comprehensive needs assessment of the 
                entire school (including taking into account the needs 
                of migratory children as defined in section 1309(2)) 
                that is based on information which includes the 
                performance of children in relation to the State 
                academic content standards and the State student 
                academic achievement standards described in section 
                1111(b)(1).
                    ``(B) Schoolwide reform strategies that--
                            ``(i) provide opportunities for all 
                        children to meet the State's proficient and 
                        advanced levels of student achievement 
                        described in section 1111(b)(1)(D);
                            ``(ii) use effective methods and 
                        instructional strategies that are based upon 
                        scientifically based research that--
                                    ``(I) strengthen the core academic 
                                program in the school;
                                    ``(II) increase the amount and 
                                quality of learning time, such as 
                                providing an extended school year and 
                                before- and after-school and summer 
                                programs and opportunities, and help 
                                provide an enriched and accelerated 
                                curriculum; and
                                    ``(III) include strategies for 
                                meeting the educational needs of 
                                historically underserved populations;
                            ``(iii)(I) address the needs of all 
                        children in the school, but particularly the 
                        needs of low-achieving children and those at 
                        risk of not meeting the State student academic 
                        achievement standards who are members of the 
                        target population of any program that is 
                        included in the schoolwide program; and
                            ``(II) address how the school will 
                        determine if such needs have been met; and
                            ``(iv) are consistent with, and are 
                        designed to implement, the State and local 
                        improvement plans, if any.
                    ``(C) Instruction by fully qualified (as defined in 
                section 8101) teachers.
                    ``(D) In accordance with section 1119A and 
                subsection (b)(4), high quality and ongoing 
                professional development for teachers and 
                paraprofessionals, and, where appropriate, pupil 
                services personnel, parents, principals, and other 
                staff to enable all children in the school to meet the 
                State's student academic achievement standards.
                    ``(E) Strategies to attract high quality teachers 
                to high need schools, such as differential pay systems 
                or performance based pay.
                    ``(F) Strategies to increase parental involvement 
                in accordance with section 1118, such as family 
                literary services.
                    ``(G) Plans for assisting preschool children in the 
                transition from early childhood programs, such as Head 
                Start, Even Start, Early Reading First, or a State-run 
                preschool program, to local elementary school programs.
                    ``(H) Measures to include teachers in the decisions 
                regarding the use of academic assessments described in 
                section 1111(b)(4) in order to provide information on, 
                and to improve, the performance of individual students 
                and the overall instructional program.
                    ``(I) Activities to ensure that students who 
                experience difficulty mastering the proficient or 
                advanced levels of academic achievement standards 
                required by section 1111(b) shall be provided with 
                effective, timely additional assistance which shall 
                include measures to ensure that students' difficulties 
                are identified on a timely basis and to provide 
                sufficient information on which to base effective 
                assistance.
            ``(2) Plan.--Any eligible school that desires to operate a 
        schoolwide program shall first develop (or amend a plan for 
        such a program that was in existence on the day before the 
        effective date of the No Child Left Behind Act of 2001), a 
        comprehensive plan for reforming the total instructional 
        program in the school that--
                    ``(A) incorporates the components described in 
                paragraph (1);
                    ``(B) describes how the school will use resources 
                under this part and from other sources to implement 
                those components; and
                    ``(C) includes a list of State and local 
                educational agency programs and other Federal programs 
                under subsection (b)(3) that will be consolidated in 
                the schoolwide program.
            ``(3) Plan development.--The comprehensive plan shall be--
                    ``(A) developed during a 1-year period, unless--
                            ``(i) the local educational agency 
                        determines that less time is needed to develop 
                        and implement the schoolwide program; or
                            ``(ii) the school operated a schoolwide 
                        program on the day preceding the effective date 
                        of the No Child Left Behind Act of 2001, in 
                        which case such school may continue to operate 
                        such program, but shall develop amendments to 
                        its existing plan during the first year of 
                        assistance after that date to reflect the 
                        provisions of this section;
                    ``(B) developed with the involvement of parents and 
                other members of the community to be served and 
                individuals who will carry out such plan, including 
                teachers, principals, and administrators (including 
                administrators of programs described in other parts of 
                this title), and, if appropriate, pupil services 
                personnel, technical assistance providers, school 
                staff, and, if the plan relates to a secondary school, 
                students from such school;
                    ``(C) in effect for the duration of the school's 
                participation under this part and reviewed and revised, 
                as necessary, by the school;
                    ``(D) available to the local educational agency, 
                parents, and the public, and the information contained 
                in such plan shall be provided in a format, and to the 
                extent practicable, in a language that they can 
                understand; and
                    ``(E) if appropriate, developed in coordination 
                with programs under Reading First, Early Reading First, 
                Even Start, Carl D. Perkins Vocational and Technical 
                Education Act of 1998, and the Head Start Act.
    ``(d) Accountability.--A schoolwide program under this section 
shall be subject to the school improvement provisions of section 1116.
    ``(e) Prekindergarten Program.--A school that is eligible for a 
schoolwide program under this section may use funds made available 
under this title to establish or enhance prekindergarten programs for 
3-, 4-, and 5-year-old children, such as Even Start programs or Early 
Reading First programs.

``SEC. 1115. TARGETED ASSISTANCE SCHOOLS.

    ``(a) In General.--In all schools selected to receive funds under 
section 1113(f) that are ineligible for a schoolwide program under 
section 1114, or that choose not to operate such a schoolwide program, 
a local educational agency may use funds received under this part only 
for programs that provide services to eligible children under 
subsection (b) identified as having the greatest need for special 
assistance.
    ``(b) Eligible Children.--
            ``(1) Eligible population.--(A) The eligible population for 
        services under this section is--
                    ``(i) children not older than age 21 who are 
                entitled to a free public education through grade 12; 
                and
                    ``(ii) children who are not yet at a grade level at 
                which the local educational agency provides a free 
                public education.
            ``(B) From the population described in subparagraph (A), 
        eligible children are children identified by the school as 
        failing, or most at risk of failing, to meet the State's 
        challenging student academic achievement standards on the basis 
        of academic assessments under this part, and, as appropriate, 
        on the basis of multiple, educationally related, objective 
        criteria established by the local educational agency and 
        supplemented by the school, except that children from preschool 
        through grade 2 may be selected solely on the basis of such 
        criteria as teacher judgment, interviews with parents, and 
        other appropriate measures.
            ``(2) Children included.--(A)(i) Children with 
        disabilities, migrant children, and children with limited 
        English proficiency are eligible for services under this part 
        on the same basis as other children.
            ``(ii) Funds received under this part may not be used to 
        provide services that are otherwise required by law to be made 
        available to such children but may be used to coordinate or 
        supplement such services.
            ``(B) A child who, at any time in the 2 years preceding the 
        year for which the determination is made, participated in a 
        Head Start, Even Start, or Early Reading First program, or in 
        preschool services under this title, is eligible for services 
        under this part.
            ``(C)(i) A child who, at any time in the 2 years preceding 
        the year for which the determination is made, received services 
        under part C is eligible for services under this part.
            ``(ii) A child in a local institution for neglected or 
        delinquent children or attending a community day program for 
        such children is eligible for services under this part.
            ``(D) A child who is homeless and attending any school in 
        the local educational agency is eligible for services under 
        this part.
    ``(c) Components of a Targeted Assistance School Program.--
            ``(1) In general.--To assist targeted assistance schools 
        and local educational agencies to meet their responsibility to 
        provide for all their students served under this title the 
        opportunity to meet the State's challenging student academic 
        achievement standards in subjects as determined by the State, 
        each targeted assistance program under this section shall--
                    ``(A) use such program's resources under this part 
                to help participating children meet such State's 
                challenging student academic achievement standards 
                expected for all children;
                    ``(B) ensure that planning for students served 
                under this part is incorporated into existing school 
                planning;
                    ``(C) use effective methods and instructional 
                strategies that are based upon scientifically based 
                research that strengthens the core academic program of 
                the school and that--
                            ``(i) give primary consideration to 
                        providing extended learning time such as an 
                        extended school year, before- and after-school, 
                        and summer programs and opportunities;
                            ``(ii) help provide an accelerated, high-
                        quality curriculum, including applied learning; 
                        and
                            ``(iii) minimize removing children from the 
                        regular classroom during regular school hours 
                        for instruction provided under this part;
                    ``(D) coordinate with and support the regular 
                education program, which may include services to assist 
                preschool children in the transition from early 
                childhood programs such as Head Start, Even Start, 
                Early Reading First or State-run preschool programs to 
                elementary school programs;
                    ``(E) provide instruction by fully qualified 
                teachers as defined in section 8101;
                    ``(F) in accordance with subsection (e)(3) and 
                section 1119A, provide opportunities for professional 
                development with resources provided under this part, 
                and, to the extent practicable, from other sources, for 
                teachers, principals, and administrators and other 
                school staff, including, if appropriate, pupil services 
                personnel, who work with participating children in 
                programs under this section or in the regular education 
                program; and
                    ``(G) provide strategies to increase parental 
                involvement in accordance with section 1118, such as 
                family literacy services.
            ``(2) Requirements.--Each school conducting a program under 
        this section shall assist participating children selected in 
        accordance with subsection (b) to meet the State's proficient 
        and advanced levels of achievement by--
                    ``(A) the coordination of resources provided under 
                this part with other resources; and
                    ``(B) reviewing, on an ongoing basis, the progress 
                of participating children and revising the targeted 
                assistance program, if necessary, to provide additional 
                assistance to enable such children to meet the State's 
                challenging student academic achievement standards, 
                such as an extended school year, before- and after-
                school, and summer programs and opportunities, training 
                for teachers regarding how to identify students that 
                require additional assistance, and training for 
                teachers regarding how to implement student academic 
                achievement standards in the classroom.
    ``(d) Integration of Professional Development.--To promote the 
integration of staff supported with funds under this part, public 
school personnel who are paid with funds received under this part may 
participate in general professional development and school planning 
activities.
    ``(e) Special Rules.--
            ``(1) Simultaneous service.--Nothing in this section shall 
        be construed to prohibit a school from serving students served 
        under this section simultaneously with students with similar 
        educational needs, in the same educational settings where 
        appropriate.
            ``(2) Comprehensive services.--If medical, nutrition, and 
        other social services are not otherwise available to eligible 
        children in a targeted assistance school and such school, if 
        appropriate, has engaged in a comprehensive needs assessment 
        and established a collaborative partnership with local service 
        providers, and if funds are not reasonably available from other 
        public or private sources to provide such services, then a 
        portion of the funds provided under this part may be used as a 
        last resort to provide such services, including--
                    ``(A) the provision of basic medical equipment, 
                such as eyeglasses and hearing aids; and
                    ``(B) professional development necessary to assist 
                teachers, pupil services personnel, other staff, and 
                parents in identifying and meeting the comprehensive 
                needs of eligible children.
            ``(3) Professional development.--Each school receiving 
        funds under this part for any fiscal year shall devote 
        sufficient resources to carry out effectively the professional 
        development activities described in subparagraph (F) of 
        subsection (c)(1) in accordance with section 1119A for such 
        fiscal year, except that a school may enter into a consortium 
        with another school to carry out such activities.''.

SEC. 105. SCHOOL CHOICE.

    Section 1115A is amended to read as follows:

``SEC. 1115A. SCHOOL CHOICE.

    ``(a) Choice Programs.--A local educational agency may use funds 
under this part, in combination with State, local, and private funds, 
to develop and implement public school choice programs, for children 
eligible for assistance under this part, which permit parents to select 
the public school that their child will attend.
    ``(b) Choice Plan.--A local educational agency that chooses to 
implement a public school choice program shall first develop a plan 
that includes a description of how the local educational agency will 
use resources under this part and from other resources to implement the 
plan, and assurances that--
            ``(1) all eligible students across grade levels served 
        under this part will have equal access to the program;
            ``(2) the plan will be developed with the involvement of 
        parents and others in the community to be served and 
        individuals who will carry out the plan, including 
        administrators, teachers, principals, and other staff;
            ``(3) parents of eligible students in the local educational 
        agency will be given prompt notice of the existence of the 
        public school choice program and its availability to them, and 
        a clear explanation of how the program will operate;
            ``(4) the program will include charter schools and any 
        other public school and shall not include a school that is or 
        has been identified as a school in school improvement or is or 
        has been in corrective action for the past 2 consecutive years; 
        and
            ``(5) such local educational agency will comply with the 
        other requirements of this part.
    ``(c) Transportation.--Transportation services or the costs of 
transportation may be provided by the local educational agency, except 
that such agency may not use more than a total of 15 percent of its 
allocation under this part for such purposes.''.

SEC. 106. ACADEMIC ASSESSMENT AND LOCAL EDUCATIONAL AGENCY AND SCHOOL 
              IMPROVEMENT.

    The section heading and subsections (a) through (d) of section 1116 
are amended to read as follows:

``SEC. 1116. ACADEMIC 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 academic assessments described in the 
        State plan to review annually the progress of each school 
        served under this part to determine whether the school is 
        making adequate yearly progress as defined in section 
        1111(b)(2)(B);
            ``(2) publicize and disseminate to teachers and other 
        staff, parents, students, and the community, the results of the 
        annual review under paragraph (2);
            ``(3) review the effectiveness of the actions and 
        activities the schools are carrying out under this part with 
        respect to parental involvement assisted under this Act.
    ``(b) School Improvement.--
            ``(1) In general.--
                    ``(A) Identification.--A local educational agency 
                shall identify for school improvement any elementary or 
                secondary school served under this part that--
                            ``(i) fails, for any year, to make adequate 
                        yearly progress as defined in the State's plan 
                        under section 1111(b)(2); or
                            ``(ii) was in school improvement status 
                        under this section immediately before the 
                        effective date of the No Child Left Behind Act 
                        of 2001.
                    ``(B) Deadline.--The identification described in 
                subparagraph (A) shall take place not later than the 
                first day of the school year following such failure to 
                make adequate yearly progress.
                    ``(C) Application.--This paragraph does not apply 
                to a school if almost every student in the school is 
                meeting the State's advanced level of performance.
                    ``(D) Review.--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.
                    ``(E) Public school choice.--In the case of a 
                school identified for school improvement under 
                subparagraph (A), the local educational agency shall, 
                not later than the first day of the school year 
                following identification, 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 subparagraph 
                (A), unless such an option is prohibited by State law.
                    ``(F) Transfer.--Students who use the option to 
                transfer under subparagraph (E) shall be enrolled in 
                classes and other activities in the public school to 
                which they transfer in the same manner as all other 
                children at the public school.
            ``(2) Opportunity to review and present evidence; time 
        limit.--
                    ``(A) Identification.--Before identifying an 
                elementary school or a secondary school for school 
                improvement under paragraph (1), for corrective action 
                under paragraph (7), or for restructuring under 
                paragraph (8), the local educational agency shall 
                provide the school with an opportunity to review the 
                school-level data, including academic assessment data, 
                on which the proposed identification is based.
                    ``(B) Evidence.--If the principal of a school 
                proposed for identification under paragraph (1), (7), 
                or (8) believes, or a majority of the parents of the 
                students enrolled in such school believe, 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) Final determination.--Not later than 30 days 
                after a local educational agency provides the school 
                with the opportunity to review such school level data, 
                the local educational agency shall make public a final 
                determination on the status of the school.
            ``(3) School plan.--
                    ``(A) Revised plan.--After the resolution of a 
                review under paragraph (2), 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;
                            ``(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)(C)(iii)(I) and (II) and 
                        enrolled in the school will meet the State's 
                        proficient level of achievement on the State 
                        academic assessment described in section 
                        1111(b)(4) not later than 10 years after the 
                        date of enactment of the No Child Left Behind 
                        Act of 2001;
                            ``(iii) provide an assurance that the 
                        school shall 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;
                                    ``(II) meets the requirements for 
                                professional development activities 
                                under section 1119A; and
                                    ``(III) is provided in a manner 
                                that affords greater opportunity for 
                                participating in such professional 
                                development;
                            ``(iv) specify how the funds described in 
                        clause (iii) will be used to remove the school 
                        from school improvement status;
                            ``(v) establish specific annual, measurable 
                        goals for continuous and significant progress 
                        by each group of students specified in section 
                        1111(b)(2)(C)(iii)(I) and (II) and enrolled in 
                        the school that will ensure that all such 
                        groups of students shall meet the State's 
                        proficient level of achievement on the State 
                        academic assessment described in section 
                        1111(b)(4) not later than 10 years after the 
                        date of enactment of the No Child Left Behind 
                        Act of 2001;
                            ``(vi) identify how the school will provide 
                        written notification about the identification 
                        to parents of each student enrolled in such 
                        school, in a format and, to the extent 
                        practicable, in a language 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);
                            ``(viii) incorporate, as appropriate, 
                        extended learning time for students, such as 
                        before school, after school, during the summer 
                        and extension of the school year; and
                            ``(ix) ensure that a mentoring program is 
                        available to teachers in the school who have 
                        been in the teaching profession for 3 years or 
                        less, which provides mentoring to beginning 
                        teachers from exemplary veteran teachers with 
                        expertise in the same subject matter that the 
                        beginning teachers will be teaching, to the 
                        extent practicable be school-based, and 
                        provides mentors time for activities such as 
                        coaching, observing, and assisting the teachers 
                        who are mentored.
                    ``(B) Conditional approval.--The local educational 
                agency may condition approval of a school plan on--
                            ``(i) inclusion of one or more of the 
                        corrective actions specified in paragraph 
                        (6)(D)(ii); or
                            ``(ii) feedback on the school improvement 
                        plan from parents and community leaders.
                    ``(C) Plan implementation.--Except as provided in 
                subparagraph (D), 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 failure to make adequate 
                yearly progress took place.
                    ``(D) Notwithstanding subparagraph (C), in a case 
                in which a plan is not approved prior to the beginning 
                of a school year, such plan shall be implemented 
                immediately upon approval.
                    ``(E) Local educational agency approval.--The local 
                educational agency 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 it meets the requirements of 
                        this paragraph.
            ``(4) Technical assistance.--
                    ``(A) In general.--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 throughout the duration of 
                such plan.
                    ``(B) Specific assistance.--Such technical 
                assistance--
                            ``(i) shall include assistance in analyzing 
                        data from the academic assessments required 
                        under section 1111(b)(4), and other samples of 
                        student work, to identify and address 
                        instructional problems and solutions;
                            ``(ii) shall include assistance in 
                        identifying and implementing professional 
                        development, instructional strategies, and 
                        methods of instruction that are based upon 
                        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 achievement 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) Scientifically based research.--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) Notification to parents.--A local educational agency 
        shall promptly provide parents (in a format and, to the extent 
        practicable, in a language they can understand) of each student 
        in an elementary school or a secondary school identified for 
        school improvement--
                    ``(A) an explanation of what the school improvement 
                identification means, and how the school identified for 
                school improvement compares in terms of academic 
                achievement to other elementary schools or secondary 
                schools served by the local educational agency and the 
                State educational agency involved;
                    ``(B) the reasons for the identification;
                    ``(C) an explanation of what the school identified 
                for school improvement is doing to address the problem 
                of low achievement;
                    ``(D) an explanation of what the local educational 
                agency or State educational agency is doing to help the 
                school address the achievement 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 
                for school improvement; and
                    ``(F) an explanation regarding the option of their 
                child to transfer to another public school, including a 
                public charter school.
            ``(6) Additional notification.--Not less than once each 
        year, each State educational agency shall provide the Secretary 
        with the name of each school identified for school improvement 
        under this subsection.
            ``(7) Corrective action.--
                    ``(A) In general.--In this subsection, the term 
                `corrective action' means action, consistent with State 
                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 problems 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 achievement 
                        on the State academic assessment described in 
                        section 1111(b)(4).
                    ``(B) System.--In order to help students served 
                under this part meet challenging State academic 
                standards, each local educational agency shall 
                implement a system of corrective action in accordance 
                with subparagraphs (C) through (F) and paragraphs (8) 
                through (10).
                    ``(C) Role of local educational agency.--The local 
                educational agency--
                            ``(i) after providing public school choice 
                        under paragraph (1)(E) and technical assistance 
                        under paragraph (4), shall identify for 
                        corrective action and take corrective action 
                        with respect to any school served by the local 
                        educational agency under this part that--
                                    ``(I) fails to make adequate yearly 
                                progress, as defined by the State under 
                                section 1111(b)(2), at the end of the 
                                first full school year following 
                                identification under paragraph (1); or
                                    ``(II) was in school-improvement 
                                status for 2 years or in corrective-
                                action status under this subsection 
                                immediately before the effective date 
                                of the No Child Left Behind Act of 
                                2001; and
                            ``(ii) shall continue to provide technical 
                        assistance consistent with paragraph (4) while 
                        instituting any corrective action under clause 
                        (i); and
                    ``(D) Requirements.--In the case of a school 
                described in subparagraph (C)(i), the local educational 
                agency shall both--
                            ``(i) continue to 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 such an option is prohibited by State 
                        law; and
                            ``(ii) take at least one of the following 
                        corrective actions:
                                    ``(I) Replace the school staff 
                                which are relevant to the failure to 
                                make adequate yearly progress.
                                    ``(II) Institute and fully 
                                implement a new curriculum, including 
                                providing appropriate professional 
                                development for all relevant staff, 
                                that is based on scientifically based 
                                research and offers substantial promise 
                                of improving educational performance 
                                for low-performing students and the 
                                school meeting adequate yearly 
                                progress.
                                    ``(III) Significantly decrease 
                                management authority at the school 
                                level.
                                    ``(IV) Appoint an outside expert to 
                                advise the school on its progress 
                                toward meeting adequate yearly 
                                progress, based on its school plan 
                                under this subsection.
                                    ``(V) Extend the school year or 
                                school day.
                                    ``(VI) Restructure the internal 
                                organizational structure of the school.
                    ``(E) Delay.--A local educational agency may delay, 
                for a period not to exceed 1 year, implementation of 
                corrective action only if the school's failure to make 
                adequate yearly progress was justified due to 
                exceptional or uncontrollable circumstances, such as a 
                natural disaster or a precipitous and unforeseen 
                decline in the financial resources of the local 
                educational agency or school.
                    ``(F) Publication and dissemination.--The local 
                educational agency shall publish and disseminate 
                information regarding any corrective action the local 
                educational agency takes under this paragraph at a 
                school--
                            ``(i) to the public and to the parents of 
                        each student enrolled in the school subject to 
                        corrective action;
                            ``(ii) in a format and, to the extent 
                        practicable, in a language that the parents can 
                        understand; and
                            ``(iii) through such means as the Internet, 
                        the media, and public agencies.
            ``(8) Restructuring.--
                    ``(A) Failure to make adequate yearly progress.--
                If--
                            ``(i) a school is subject to corrective 
                        action under paragraph (7) for one full school 
                        year, and at the end of such year continues to 
                        fail to make adequate yearly progress and 
                        students in the school who are from 
                        economically disadvantaged families are not 
                        making statistically significant progress in 
                        the subjects included in the State's definition 
                        of adequate yearly progress; or
                            ``(ii) for 2 additional years a school 
                        subject to corrective action under paragraph 
                        (7) fails to make adequate yearly progress, the 
                        local educational agency shall--
                                    ``(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), unless 
                                prohibited by State law;
                                    ``(II) make supplemental 
                                instructional services available, 
                                consistent with subsection (d)(1); and
                                    ``(III) prepare a plan and make 
                                necessary arrangements to carry out 
                                subparagraph (B).
                    ``(B) Alternative governance.--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 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 the principal and all or 
                        most of the school staff that are relevant to 
                        the failure to make adequate yearly progress.
                            ``(iii) Entering into a contract with an 
                        entity, such as a private management company, 
                        to operate the public school.
                            ``(iv) Turning the operation of the school 
                        over to the State, if permitted under State law 
                        and agreed to by the State.
                    ``(C) Available results.--The State educational 
                agency shall ensure that, for any school year in which 
                a school is subject to school improvement under this 
                subsection, the results of State academic assessments 
                for that school are available to the local educational 
                agency by the end of the school year in which the 
                academic assessments are administered.
                    ``(D) Prompt notice.--The local educational agency 
                shall provide prompt notice to teachers and parents 
                whenever subparagraph (A) or (B) applies, shall provide 
                them adequate opportunity to comment before taking any 
                action under those subparagraphs and, to the extent 
                practicable, to participate in developing any plan 
                under subparagraph (A)(ii)(III), and shall provide 
                parents an explanation of the options under 
                subparagraph (A)(i) and (ii).
            ``(9) Transportation.--In any case described in paragraph 
        (1)(E) for schools described in paragraphs (1)(A)(i), 
        (7)(D)(i), and (8)(A)(ii)(I) the local educational agency--
                    ``(A) shall provide, or shall pay for the provision 
                of, transportation for the student to the public school 
                the child attends; and
                    ``(B) may use not more than a total of 15 percent 
                of its allocation under this part for that purpose.
            ``(10) Cooperative agreement.--In any case described in 
        paragraph (1)(E), (7)(D)(i), or (8)(A)(ii)(I), if all public 
        schools in the local educational agency to which a child may 
        transfer to, are identified for school improvement, the agency 
        shall, to the extent practicable, establish a cooperative 
        agreement with other local educational agencies in the area for 
        a transfer.
            ``(11) Duration.--If any school identified for corrective 
        action or restructuring--
                    ``(A) makes adequate yearly progress for 2 
                consecutive years, the local educational agency need no 
                longer subject it to corrective action or restructuring 
                nor identify it as in need of improvement; or
                    ``(B) fails to make adequate yearly progress, but 
                children from low-income families in the school make 
                statistically significant educational progress for 1 
                year, the local educational agency shall place or 
                continue as appropriate the school in corrective action 
                under paragraph (7).
            ``(12) State responsibilities.--The State shall--
                    ``(A) make technical assistance under section 1117 
                available to all schools identified for school 
                improvement and restructuring under this subsection;
                    ``(B) if it determines that a local educational 
                agency has failed to carry out its responsibilities 
                under this subsection, take such corrective actions as 
                the State finds appropriate and in compliance with 
                State law; and
                    ``(C) ensure that academic assessment results under 
                this part are provided to schools within the same 
                school year in which the assessment was given.
    ``(c) State Review and Local Educational Agency Improvement.--
            ``(1) In general.--A State shall--
                    ``(A) annually review the progress of each local 
                educational agency receiving funds under this part to 
                determine whether schools receiving assistance under 
                this part are making adequate yearly progress as 
                defined in section 1111(b)(2) toward meeting the 
                State's student academic achievement standards; and
                    ``(B) publicize and disseminate to local 
                educational agencies, teachers and other staff, 
                parents, students, and the community the results of the 
                State review consistent with section 1111, including 
                statistically sound disaggregated results, as required 
                by section 1111(b)(2).
            ``(2) Identification of local educational agency for 
        improvement.--A State shall identify for improvement any local 
        educational agency that--
                    ``(A) for 2 consecutive years failed to make 
                adequate yearly progress as defined in the State's plan 
                under section 1111(b)(2); or
                    ``(B) was in improvement status under this section 
                as this section was in effect on the day preceding the 
                date of the enactment of the No Child Left Behind Act 
                of 2001.
            ``(3) Transition.--The 2-year period described in paragraph 
        (2)(A) shall include any continuous period of time immediately 
        preceding the date of the enactment of the No Child Left Behind 
        Act of 2001, during which a local educational agency did not 
        make adequate yearly progress as defined in the State's plan, 
        as such plan was in effect on the day preceding the date of 
        such enactment.
            ``(4) Targeted assistance schools.--For purposes of 
        targeted assistance schools in a local educational agency, a 
        State educational agency may choose to review the progress of 
        only the students in such schools who are served or are 
        eligible for services under this part.
            ``(5) Opportunity to review and present evidence.--
                    ``(A) Review.--Before identifying a local 
                educational agency for improvement under paragraph (2), 
                a State educational agency shall provide the local 
                educational agency with an opportunity to review the 
                local educational agency data, including academic 
                assessment data, on which that proposed identification 
                is based.
                    ``(B) Supporting evidence.--If the local 
                educational agency believes that the proposed 
                identification is in error for statistical or other 
                substantive reasons, it may provide supporting evidence 
                to the State educational agency, which such agency 
                shall consider before making a final determination not 
                later than 30 days after the State educational agency 
                provides the local educational agency with the 
                opportunity to review such data under subparagraph (A).
            ``(6) Notification to parents.--The State educational 
        agency shall promptly notify parents in a format, and to the 
        extent practicable in a language they can understand, of each 
        student enrolled in a school in a local educational agency 
        identified for improvement, of the results of the review under 
        paragraph (1) and, if the agency is identified as in need of 
        improvement, the reasons for that identification and how 
        parents can participate in upgrading the quality of the local 
        educational agency.
            ``(7) Local educational agency revisions.--
                    ``(A) Plan.--Each local educational agency 
                identified under paragraph (2) shall, not later than 3 
                months after being so identified, develop or revise a 
                local educational agency plan, in consultation with 
                parents, school staff, and others. Such plan shall--
                            ``(i) incorporate scientifically based 
                        research strategies that strengthen the core 
                        academic program in the local educational 
                        agency;
                            ``(ii) identify specific goals and 
                        objectives the local educational agency will 
                        undertake to make adequate yearly progress and 
                        which--
                                    ``(I) have the greatest likelihood 
                                of improving the performance of 
                                participating children in meeting the 
                                State's student academic achievement 
                                standards;
                                    ``(II) address the professional 
                                development needs of staff; and
                                    ``(III) include specific measurable 
                                achievement goals and targets for each 
                                of the groups of students identified in 
                                the disaggregated data pursuant to 
                                section 1111(b)(2)(C)(iii)(I) and (II);
                            ``(iii) incorporate, as appropriate, 
                        extended learning time for students such as 
                        before school, after school, during the summer, 
                        and extension of the school year.
                            ``(iv) identify how the local educational 
                        agency will provide written notification to 
                        parents in a format, and to the extent 
                        practicable in a language, that they can 
                        understand, pursuant to paragraph (6); and
                            ``(v) specify the responsibilities of the 
                        State educational agency and the local 
                        educational agency under the plan.
                    ``(B) Implementation.--The local educational agency 
                shall implement its plan or revised plan expeditiously, 
                but not later than the beginning of the school year 
                after which the school has been identified for 
                improvement.
            ``(8) State responsibility.--
                    ``(A) In general.--For each local educational 
                agency identified under paragraph (2), the State shall 
                provide technical or other assistance, if requested, as 
                authorized under section 1117, to better enable the 
                local educational agency--
                            ``(i) to develop and implement its revised 
                        plan as approved by the State educational 
                        agency consistent with the requirements of this 
                        section; and
                            ``(ii) to work with schools needing 
                        improvement.
                    ``(B) Technical assistance.--Technical assistance 
                provided under this section by the State educational 
                agency or an entity authorized by such agency shall be 
                based upon scientifically based research.
            ``(9) Corrective action.--In order to help students served 
        under this part meet challenging State academic standards, each 
        State shall implement a system of corrective action in 
        accordance with the following:
                    ``(A) In general.--After providing technical 
                assistance under paragraph (8) and subject to 
                subparagraph (D), the State--
                            ``(i) may take corrective action at any 
                        time with respect to a local educational agency 
                        that has been identified under paragraph (2);
                            ``(ii) shall take corrective action with 
                        respect to any local educational agency that 
                        fails to make adequate yearly progress, as 
                        defined by the State, after the end of the 
                        second year following its identification under 
                        paragraph (2); and
                            ``(iii) shall continue to provide technical 
                        assistance while instituting any corrective 
                        action under clause (i) or (ii).
                    ``(B) Definition.--As used in this paragraph, the 
                term `corrective action' means action, consistent with 
                State law, that--
                            ``(i) substantially and directly responds 
                        to the consistent academic failure that caused 
                        the State to take such action and to any 
                        underlying staffing, curricular, or other 
                        problems in the school; and
                            ``(ii) is designed to meet the goal of 
                        having all students served under this part 
                        perform at the proficient and advanced 
                        performance levels.
                    ``(C) Certain local educational agencies.--In the 
                case of a local educational agency described in this 
                paragraph, the State educational agency shall take not 
                less than one of the following corrective actions:
                            ``(i) Withhold funds from the local 
                        educational agency.
                            ``(ii) Replace the school district 
                        personnel who are relevant to the failure to 
                        make adequate year progress.
                            ``(iii) Remove particular schools from the 
                        jurisdiction of the local educational agency 
                        and establish alternative arrangements for 
                        public governance and supervision of such 
                        schools.
                            ``(iv) Appoint, through the State 
                        educational agency, a receiver or trustee to 
                        administer the affairs of the local educational 
                        agency in place of the superintendent and 
                        school board.
                            ``(v) Abolish or restructure the local 
                        educational agency.
                            ``(vi) Authorize students to transfer from 
                        a school operated by a local educational agency 
                        to a higher performing public school operated 
                        by another local educational agency, or to a 
                        public charter school and provide such students 
                        transportation (or the costs of transportation 
                        to such schools), in conjunction with not less 
                        than one additional action described under this 
                        paragraph.
                    ``(D) Hearing.--Prior to implementing any 
                corrective action, the State educational agency shall 
                provide due process and a hearing to the affected local 
                educational agency, if State law provides for such 
                process and hearing.
                    ``(E) Publication.--The State educational agency 
                shall publish, and disseminate to parents and the 
                public any corrective action it takes under this 
                paragraph through such means as the Internet, the 
                media, and public agencies.
                    ``(F) Delay.--A local educational agency may delay, 
                for a period not to exceed 1 year, implementation of 
                corrective action if the failure to make adequate 
                yearly progress was justified due to exceptional or 
                uncontrollable circumstances such as a natural disaster 
                or a precipitous and unforeseen decline in the 
                financial resources of the local educational agency or 
                school.
            ``(10) Special rule.--A local educational agency, that, for 
        at least 2 of the 3 years following identification under 
        paragraph (2), makes adequate yearly progress shall no longer 
        be identified for improvement.
    ``(d) Parental Options.--
            ``(1) In any case described in subsection 
        (b)(7)(A)(ii)(II), the local educational agency shall permit 
        the parents of each eligible child to obtain supplemental 
        educational services for such child from a provider, as 
        approved by the State educational agency in accordance with 
        reasonable criteria that it shall adopt. Such criteria shall 
        require a provider to demonstrate a record of effectiveness, or 
        the potential of effectiveness, in providing supplemental 
        instructional services to children, consistent with the 
        instructional program of the local educational agency and the 
        academic standards described under section 1111.
            ``(2) Selection.--In obtaining services under this 
        paragraph, a parent shall select a provider that meets the 
        criteria described under paragraph (1). The local educational 
        agency shall provide assistance, upon request, to parents in 
        the selection of a provider to provide supplemental 
        instructional services.
            ``(3) Contract.--In the case of the selection of a provider 
        under paragraph (2) by a parent, the local educational agency 
        shall enter into a contract with such provider. Such contract 
        shall--
                    ``(A) require the local educational agency to 
                develop, with parents (and the provider they have 
                chosen), a statement of specific performance goals for 
                the student, how the student's progress will be 
                measured, and a timetable for improving achievement;
                    ``(B) provide for the termination of such contract 
                with a provider that is unable to meet such goals and 
                timetables; and
                    ``(C) contain provisions with respect to the making 
                of payments to the provider by the local educational 
                agency.
            ``(4) Additional local educational agency 
        responsibilities.--Each local educational agency subject to 
        this paragraph shall provide annual notice to parents (if 
        feasible, in the parents' language) of the availability of 
        services under this paragraph and the eligible providers of 
        those services.
            ``(5) State educational agency responsibilities.--Each 
        State educational agency shall--
                    ``(A) consult with local educational agencies and 
                promote maximum participation by providers to ensure, 
                to the extent practicable, that parents have as many 
                choices of those providers as possible;
                    ``(B) develop criteria consistent with paragraph 
                (6) and apply such criteria to potential providers to 
                determine which, based on the quality and effectiveness 
                of their services, are eligible to participate;
                    ``(C) maintain an updated list of approved 
                providers across the State, from which parents may 
                select;
                    ``(D) develop and implement standards and 
                techniques for monitoring the quality and effectiveness 
                of the services offered by providers, and withdraw 
                approval from those that fail to meet those standards 
                for two consecutive years;
                    ``(E) provide annual notice to potential providers 
                of supplemental services of the opportunity to provide 
                services under this paragraph and of the applicable 
                procedures for obtaining approval from the State 
                educational agency to be a provider of those services.
            ``(6) Criteria for providers.--In order for a provider to 
        be included on the State list under paragraph (5)(c), a 
        provider shall agree to the following:
                    ``(A) Provide parents of children receiving 
                supplemental instructional services under this 
                paragraph and the appropriate local educational agency 
                with information on the progress of their children in 
                increasing achievement, in a format and, to the extent 
                practicable, a language such parents can understand.
                    ``(B) Ensure that instruction and content used by 
                the provider is consistent with the instruction and 
                content used by the local educational agency and State.
                    ``(C) Require a provider to meet all applicable 
                Federal, State, and local health, safety and civil 
                rights laws.
                    ``(D) Ensure that all instruction and content under 
                this paragraph shall be secular, neutral, and 
                nonideological.
            ``(7) Costs.--
                    ``(A) The costs of administration of this paragraph 
                and the costs of providing such supplemental 
                instructional services shall be limited to the total of 
                40 percent of the per child allocation under subpart 2 
                of each school identified under subsection 
                (b)(7)(A)(ii)(II);
                ``(B) Additional funds.--If the allocation under 
                subparagraph (A) is insufficient to provide services 
                for all eligible students that have selected a 
                provider, a local educational agency may use funds 
                under subpart 1 of part A of title IV to pay for 
                additional costs;
                    ``(C) Transportation costs.--A local educational 
                agency may use up to 15 percent of its allocation under 
                subpart 2 for transportation costs.
            ``(8) Funds provided by state educational agency.--Each 
        State educational agency may use funds that it reserves under 
        this part, and subpart 1 of part A of title IV to provide local 
        educational agencies that do not have sufficient funds to 
        provide services under this paragraph for all eligible students 
        requesting such services.
            ``(9) Duration.--The local educational agency shall 
        continue to provide supplemental instructional services to 
        enrolled children receiving such services under this paragraph 
        until the child completes the grade corresponding to the 
        highest grade offered at the public school which was identified 
        for restructuring under subsection (b)(7), or until such 
        school, so long as the child attends such school, is not 
        identified under subsection (b)(1), (b)(6), or (b)(7), 
        whichever comes earlier.
            ``(10) Definitions.--As used in this subsection, the term--
                    ``(A) `eligible child' means a child from a low-
                income family, as determined by the local educational 
                agency for purposes of allocating funds to schools 
                under section 1113(c)(1);
                    ``(B) `supplemental instructional services' means 
                tutoring and other supplemental academic enrichment 
                services that are in addition to instruction provided 
                during the school day and are specifically designed to 
                increase the academic achievement of eligible children 
                on the academic assessments required under section 
                1111; and
                    ``(C) `provider' means a non-profit or a for-profit 
                entity which has a demonstrated record of effectiveness 
                or the potential of effectiveness--
                            ``(i) in providing supplemental 
                        instructional services that are consistent with 
                        the instructional program of the local 
                        educational agency and the academic standards 
                        described under section 1111; and
                            ``(ii) in sound fiscal management;
                    ``(D) `per child allocation' means an amount that 
                is equal to at least--
                            ``(i) the amount of the school's allocation 
                        under subpart 2; divided by
                            ``(ii) the number of children from low-
                        income families enrolled in the school.
            ``(11) Prohibition.--Nothing contained in this subsection 
        shall permit the making of any payment for religious worship or 
        instruction.
    ``(e) Treatment of Bureau Funded Schools.--For the purposes of 
applying the requirements of subsection (b) to schools funded by the 
Bureau of Indian Affairs, the Secretary of Interior shall implement 
such subsection in a manner that treats the appropriate tribe or tribal 
organization as a local educational agency for the purpose of 
implementing school improvement, corrective action and restructuring 
actions. If such tribe or tribal organization does not take the 
appropriate action required under subsection (b), the Secretary shall 
take such appropriate action as required under subsection (b) after 
final notice to such tribe or tribal organization.''.

SEC. 107. STATE ASSISTANCE FOR SCHOOL SUPPORT AND IMPROVEMENT.

    Section 1117 is amended to read as follows:

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

    ``(a) System for Support.--Each State shall establish a statewide 
system of intensive and sustained support and improvement for local 
educational agencies and schools receiving funds under this part, in 
order to increase the opportunity for all students in those agencies 
and schools to meet the State's academic content standards and student 
academic achievement standards.
    ``(b) Priorities.--In carrying out this section, a State shall--
            ``(1) first, provide support and assistance to local 
        educational agencies subject to corrective action under section 
        1116 and assist schools, in accordance with section 
        1116(b)(11), for which a local educational agency has failed to 
        carry out its responsibilities under paragraphs (7) and (8) of 
        section 1116(b);
            ``(2) second, provide support and assistance to other local 
        educational agencies identified as in need of improvement under 
        section 1116(b); and
            ``(3) third, provide support and assistance to other local 
        educational agencies and schools participating under this part 
        that need that support and assistance in order to achieve the 
        purpose of this part.
    ``(c) Approaches.--In order to achieve the purpose described in 
subsection (a), each such system shall provide technical assistance and 
support through such approaches as--
            ``(1) school support teams, composed of individuals who are 
        knowledgeable about scientifically based research and practice 
        on teaching and learning, particularly about strategies for 
        improving educational results for low-achieving children; and
            ``(2) the designation and use of ``Distinguished 
        Educators'', chosen from schools served under this part that 
        have been especially successful in improving academic 
        achievement.
    ``(d) Funds.--Each State--
            ``(1) shall use funds reserved under section 1003(a); and
            ``(2) may use State administrative funds authorized under 
        section 1002(i) for such purpose to establish a Statewide 
        system of support.
    ``(e) Alternatives.--The State may devise additional approaches to 
providing the assistance described in paragraphs (1) and (2) of 
subsection (c), such as providing assistance through institutions of 
higher education and educational service agencies or other local 
consortia, and private providers of scientifically based technical 
assistance and the State may seek approval from the Secretary to use 
funds made available under section 1002(j) for such approaches as part 
of the State plan.''.

SEC. 108. ACADEMIC ACHIEVEMENT AWARDS PROGRAM.

    Sections 1118 through 1127 are amended to read as follows:

``SEC. 1117A. ACADEMIC ACHIEVEMENT AWARDS PROGRAM.

    ``(a) Establishment of Academic Achievement Awards Program.--
            ``(1) In general.--Each State receiving a grant under this 
        part may establish a program for making academic achievement 
        awards to recognize and financially reward schools served under 
        this part that have--
                    ``(A) significantly closed the achievement gap 
                between the groups of students defined in section 
                1111(b)(2); or
                    ``(B) exceeded their adequate yearly progress 
                goals, consistent with section 1111(b)(2), for 2 or 
                more consecutive years.
            ``(2) Awards to teachers.--A State program under paragraph 
        (1) may also recognize and provide financial awards to teachers 
        teaching in a school described in such paragraph whose students 
        consistently make significant gains in academic achievement in 
        the areas in which the teacher provides instruction.
    ``(b) Funding.--
            ``(1) Reservation of funds by state.--For the purpose of 
        carrying out this section, each State receiving a grant under 
        this part may reserve, from the amount (if any) by which the 
        funds received by the State under this part for a fiscal year 
        exceed the amount received by the State under this part for the 
        preceding fiscal year, not more than 30 percent of such excess 
        amount.
            ``(2) Use within 3 years.--Notwithstanding any other 
        provision of law, the amount reserved under paragraph (1) by a 
        State for each fiscal year shall remain available to the State 
        until expended for a period not exceeding 3 years.
            ``(3) Special allocation rule for schools in high-poverty 
        areas.--
                    ``(A) In general.--Each State receiving a grant 
                under this part shall distribute at least 75 percent of 
                the amount reserved under paragraph (1) for each fiscal 
                year to schools described in subparagraph (B), or to 
                teachers teaching in such schools.
                    ``(B) School described.--A school described in 
                subparagraph (A) is a school whose student population 
                is in the highest quartile of schools statewide in 
                terms of the percentage of children from low income 
                families.

``SEC. 1118. PARENTAL INVOLVEMENT.

    ``(a) Local Educational Agency Policy.--
            ``(1) In general.--A local educational agency may receive 
        funds under this part only if such agency implements programs, 
        activities, and procedures for the involvement of parents in 
        programs assisted under this part consistent with the 
        provisions of this section. Such activities shall be planned 
        and implemented with meaningful consultation with parents of 
        participating children.
            ``(2) Written policy.--Each local educational agency that 
        receives funds under this part shall develop jointly with, 
        agree upon with, and distribute to, parents of participating 
        children a written parent involvement policy that is 
        incorporated into the local educational agency's plan developed 
        under section 1112, establishes the expectations for parent 
        involvement, and describes how the local educational agency 
        will--
                    ``(A) involve parents in the joint development of 
                the plan under section 1112, and the process of school 
                review and improvement under section 1116;
                    ``(B) provide the coordination, technical 
                assistance, and other support necessary to assist 
                participating schools in planning and implementing 
                effective parent involvement;
                    ``(C) build the schools' and parents' capacity for 
                strong parent involvement as described in subsection 
                (e);
                    ``(D) coordinate and integrate parental involvement 
                strategies under this part with parental involvement 
                strategies under other programs, such as Head Start, 
                Early Reading First, Reading First, Even Start, the 
                Parents as Teachers Program, the Home Instruction 
                Program for Preschool Youngsters, and State-run 
                preschool programs;
                    ``(E) conduct, with the involvement of parents, an 
                annual evaluation of the content and effectiveness of 
                the parental involvement policy in improving the 
                academic quality of the schools served under this part; 
                and
                    ``(F) involve parents in the activities of the 
                schools served under this part.
            ``(3) Reservation.--
                    ``(A) In general.--Each local educational agency 
                shall reserve not less than 1 percent of such agency's 
                allocation under this part to carry out this section, 
                including family literacy and parenting skills, except 
                that this paragraph shall not apply if 1 percent of 
                such agency's allocation under this part (other than 
                funds allocated under section 1002(g) for the fiscal 
                year for which the determination is made is $5,000 or 
                less.
                    ``(B) Parental input.--Parents of children 
                receiving services under this part shall be involved in 
                the decisions regarding how funds reserved under 
                subparagraph (A) are allotted for parental involvement 
                activities.
                    ``(C) Distribution of funds.--Not less than 95 
                percent of the funds reserved under subparagraph (A) 
                shall be distributed to schools served under this part.
    ``(b) School Parental Involvement Policy.--
            ``(1) In general.--Each school served under this part shall 
        jointly develop with, and distribute to, parents of 
        participating children a written parental involvement policy, 
        agreed upon by such parents, that shall describe the means for 
        carrying out the requirements of subsections (c) through (f). 
        Parents shall be notified of the policy in a format, and to the 
        extent practicable in a language they can understand. Such 
        policy shall be updated periodically to meet the changing needs 
        of parents and the school.
            ``(2) Special rule.--If the school has a parental 
        involvement policy that applies to all parents, such school may 
        amend that policy, if necessary, to meet the requirements of 
        this subsection.
            ``(3) Amendment.--If the local educational agency has a 
        school district-level parental involvement policy that applies 
        to all parents, such agency may amend that policy, if 
        necessary, to meet the requirements of this subsection.
            ``(4) Parental comments.--If the plan under section 1112 is 
        not satisfactory to the parents of participating children, the 
        local educational agency shall submit any parent comments with 
        such plan when such local educational agency submits the plan 
        to the State.
    ``(c) Policy Involvement.--Each school served under this part 
shall--
            ``(1) convene an annual meeting, at a convenient time, to 
        which all parents of participating children shall be invited 
        and encouraged to attend, to inform parents of their school's 
        participation under this part and to explain this part, its 
        requirements, and their right to be involved;
            ``(2) offer a flexible number of meetings, such as meetings 
        in the morning or evening, and may provide, with funds provided 
        under this part, transportation, child care, or home visits, as 
        such services relate to parental involvement;
            ``(3) involve parents, in an organized, ongoing, and timely 
        way, in the planning, review, and improvement of programs under 
        this part, including the school parental involvement policy and 
        the joint development of the schoolwide program plan under 
        section 1114(c)(2) and (c)(3), except that if a school has in 
        place a process for involving parents in the joint planning and 
        design of its programs, the school may use that process, if 
        such process includes an adequate representation of parents of 
        participating children;
            ``(4) provide parents of participating children--
                    ``(A) timely information about programs under this 
                part;
                    ``(B) a description and explanation of the 
                curriculum in use at the school, the forms of academic 
                assessment used to measure student progress, and the 
                proficiency levels students are expected to meet; and
            ``(5) if the schoolwide program plan under section 
        1114(c)(2) and (c)(3) is not satisfactory to the parents of 
        participating children, submit any parent comments on the plan 
        when the school makes the plan available to the local 
        educational agency.
    ``(d) Shared Responsibilities for High Student Performance.--As a 
component of the school-level parental involvement policy developed 
under subsection (b), each school served under this part shall agree 
with parents of children served under this part regarding how parents, 
the entire school staff, and students will share the responsibility for 
improved student achievement and the means by which the school and 
parents will build and develop a partnership to help children achieve 
the State's high academic standards.
    ``(e) Building Capacity for Involvement.--To ensure effective 
involvement of parents and to support a partnership among the school, 
parents, and the community to improve student achievement, each school 
and local educational agency--
            ``(1) shall provide assistance to participating parents in 
        such areas as understanding the State's academic content 
        standards and State student academic achievement standards, 
        State and local academic assessments, the requirements of this 
        part, and how to monitor a child's progress and work with 
        educators to improve the performance of their children;
            ``(2) shall provide materials and training to help parents 
        to work with their children to improve their children's 
        achievement;
            ``(3) shall educate teachers, pupil services personnel, 
        principals and other staff, with the assistance of parents, in 
        the value and utility of contributions of parents, and in how 
        to reach out to, communicate with, and work with parents as 
        equal partners, implement and coordinate parent programs, and 
        build ties between parents and the school;
            ``(4) shall coordinate and integrate parent involvement 
        programs and activities with Head Start, Reading First, Early 
        Reading First, Even Start, the Home Instruction Programs for 
        Preschool Youngsters, the Parents as Teachers Program, and 
        public preschool programs and other programs, to the extent 
        feasible and appropriate;
            ``(5) shall ensure, to the extent possible, that 
        information related to school and parent programs, meetings, 
        and other activities is sent to the parents of participating 
        children in the language used by such parents;
            ``(6) may involve parents in the development of training 
        for teachers, principals, and other educators to improve the 
        effectiveness of such training in improving instruction and 
        services to the children of such parents in a format, and to 
        the extent practicable, in a language the parent can 
        understand;
            ``(7) may provide necessary literacy training from funds 
        received under this part if the local educational agency has 
        exhausted all other reasonably available sources of funding for 
        such activities;
            ``(8) may pay reasonable and necessary expenses associated 
        with local parental involvement activities, including 
        transportation and child care costs, to enable parents to 
        participate in school-related meetings and training sessions;
            ``(9) may train parents to enhance the involvement of other 
        parents;
            ``(10) may arrange for teachers or other educators, who 
        work directly with participating children, to conduct in-home 
        conferences with parents who are unable to attend such 
        conferences at school;
            ``(11) may adopt and implement model approaches to 
        improving parental involvement;
            ``(12) may establish a districtwide parent advisory council 
        to provide advice on all matters related to parental 
        involvement in programs supported under this part; and
            ``(13) may develop appropriate roles for community-based 
        organizations and businesses in parent involvement activities.
    ``(f) Accessibility.--In carrying out the parental involvement 
requirements of this part, local educational agencies and schools, to 
the extent practicable, shall provide full opportunities for the 
participation of parents with limited English proficiency or with 
disabilities and parents of migratory children, including providing 
information and school reports required under section 1111 in a format, 
and to the extent practicable, in a language such parents understand.

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

    ``(a) Teachers.--
            ``(1) In general.--Each local educational agency receiving 
        assistance under this part shall ensure that all teachers hired 
        on or after the effective date of the No Child Left Behind Act 
        of 2001 and teaching in a program supported with funds under 
        this part are fully qualified.
            ``(2) Plan.--Each State receiving assistance under this 
        part shall develop and submit to the Secretary a plan to ensure 
        that all teachers teaching within the State are fully qualified 
        not later than December 31, 2005. Such plan shall include an 
        assurance that the State will require each local educational 
        agency and school receiving funds under this part publicly to 
        report their annual progress on the agency's and the school's 
        performance in increasing the percentage of classes in core 
        academic areas taught by fully qualified teachers.
    ``(b) New Paraprofessionals.--
            ``(1) In general.--Each local educational agency receiving 
        assistance under this part shall ensure that all 
        paraprofessionals hired 1 year or more after the effective date 
        of the No Child Left Behind Act of 2001 and working in a 
        program supported with funds under this part shall--
                    ``(A) have completed at least 2 years of study at 
                an institution of higher education;
                    ``(B) have obtained an associate's (or higher) 
                degree; or
                    ``(C) have met a rigorous standard of quality that 
                demonstrates, through a formal academic assessment--
                            ``(i) knowledge of, and the ability to 
                        assist in instructing reading, writing, and 
                        math; or
                            ``(ii) knowledge of, and the ability to 
                        assist in instructing reading readiness, 
                        writing readiness, and math readiness, as 
                        appropriate.
            ``(2) Clarification.--For purposes of paragraph (1)(C), the 
        receipt of a high school diploma (or its recognized equivalent) 
        shall be necessary but not by itself sufficient to satisfy the 
        requirements of such paragraph.
    ``(c) Existing Paraprofessionals.--Each local educational agency 
receiving assistance under this part shall ensure that all 
paraprofessionals hired before the date that is 1 year after the 
effective date of the No Child Left Behind Act of 2001 and working in a 
program supported with funds under this part shall, not later than 3 
years after such effective date, satisfy the requirements of subsection 
(b).
    ``(d) Exceptions for Translation and Parental Involvement 
Activities.--Subsections (b) and (c) shall not apply to a 
paraprofessional--
            ``(1) who is proficient in English and a language other 
        than English and who provides services primarily to enhance the 
        participation of children in programs under this part by acting 
        as a translator; or
            ``(2) whose duties consist solely of conducting parental 
        involvement activities consistent with section 1118.
    ``(e) General Requirement for All Paraprofessionals.--Each local 
educational agency receiving assistance under this part shall ensure 
that all paraprofessionals working in a program supported with funds 
under this part, regardless of the paraprofessional's hiring date, 
possess a high school diploma or its recognized equivalent.
    ``(f) Duties of Paraprofessionals.--
            ``(1) In general.--Each local educational agency receiving 
        assistance under this part shall ensure that a paraprofessional 
        working in a program supported with funds under this part is 
        not assigned a duty inconsistent with this subsection.
            ``(2) Responsibilities paraprofessionals may be assigned.--
        A paraprofessional described in paragraph (1) may only be 
        assigned--
                    ``(A) to provide one-on-one tutoring for eligible 
                students, if the tutoring is scheduled at a time when a 
                student would not otherwise receive instruction from a 
                teacher;
                    ``(B) to assist with classroom management, such as 
                organizing instructional and other materials;
                    ``(C) to provide assistance in a computer 
                laboratory;
                    ``(D) to conduct parental involvement activities;
                    ``(E) to provide support in a library or media 
                center;
                    ``(F) to act as a translator; or
                    ``(G) to provide instructional services to 
                students.
            ``(3) Additional limitations.--A paraprofessional described 
        in paragraph (1)--
                    ``(A) may not provide any instructional service to 
                a student unless the paraprofessional is working under 
                the direct supervision of a fully qualified teacher; 
                and
                    ``(B) may not provide instructional services to 
                students in the area of reading, writing, or math 
                unless the paraprofessional has demonstrated, through a 
                State or local academic assessment, the ability to 
                effectively carry out reading, writing, or math 
                instruction.
    ``(g) Use of Funds.--
            ``(1) Professional development.--A local educational agency 
        receiving funds under this part may use such funds to support 
        ongoing training and professional development to assist 
        teachers and paraprofessionals in satisfying the requirements 
        of this section.
            ``(2) Limitation on use of funds for paraprofessionals.--
                    ``(A) In general.--Beginning on and after the 
                effective date of the No Child Left Behind Act of 2001, 
                a local educational agency may not use funds received 
                under this part to fund any paraprofessional hired 
                after such date unless the hiring is to fill a vacancy 
                created by the departure of another paraprofessional 
                funded under this part and such new paraprofessional 
                satisfies the requirements of subsection (b), except as 
                provided in subsection (d).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                for a fiscal year to a local educational agency that 
                can demonstrate to the State that all teachers under 
                the jurisdiction of the agency are fully qualified.
    ``(h) Verification of Compliance.--
            ``(1) In general.--In verifying compliance with this 
        section, each local educational agency at a minimum shall 
        require that the principal of each school operating a program 
        under section 1114 or 1115 annually attest in writing as to 
        whether such school is in compliance with the requirements of 
        this section.
            ``(2) Availability of information.--Copies of attestations 
        under paragraph (1)--
                    ``(A) shall be maintained at each school operating 
                a program under section 1114 or 1115 and at the main 
                office of the local educational agency; and
                    ``(B) shall be available to any member of the 
                general public upon request.

``SEC. 1119A. PROFESSIONAL DEVELOPMENT.

    ``(a) Purpose.--The purpose of this section is to assist each local 
educational agency receiving assistance under this part in increasing 
the academic achievement of children served under this part through 
improved teacher quality.
    ``(b) Professional Development Activities.--Professional 
development activities under this section shall--
            ``(1) give teachers, principals, and administrators the 
        knowledge and skills to provide students with the opportunity 
        to meet challenging State or local academic content standards 
        and student academic achievement standards;
            ``(2) support the recruiting, hiring, and training of fully 
        qualified teachers, including teachers fully qualified through 
        State and local alternative routes;
            ``(3) advance teacher understanding of effective 
        instructional strategies based on scientifically based research 
        for improving student achievement, at a minimum, in reading or 
        language arts and mathematics;
            ``(4) be directly related to the curriculum and content 
        areas in which the teacher provides instruction, except this 
        requirement does not apply to activities that instruct in 
        methods of improving student behavior;
            ``(5) be designed to enhance the ability of a teacher to 
        understand and use the State's academic standards for the 
        subject area in which the teacher provides instruction;
            ``(6) be tied to scientifically based research 
        demonstrating the effectiveness of such professional 
        development activities or programs in increasing student 
        achievement or substantially increasing the knowledge and 
        teaching skills of teachers;
            ``(7) 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;
            ``(8) be developed with extensive participation of 
        teachers, principals, parents, and administrators of schools to 
        be served under this part;
            ``(9) be designed to give teachers of limited English 
        proficient children, other teachers, and instructional staff 
        the knowledge and skills to provide instruction and appropriate 
        language and academic support services to such children, 
        including the appropriate use of curriculum and academic 
        assessments;
            ``(10) to the extent appropriate, provide training for 
        teachers in the use of technology so that technology and its 
        applications are effectively used in the classroom to improve 
        teaching and learning in the curriculum and academic content 
        areas in which the teachers provide instruction; and
            ``(11) as a whole, be regularly evaluated for their impact 
        on increased teacher effectiveness and improved student 
        achievement, with the findings of such evaluations used to 
        improve the quality of professional development.
    ``(c) Additional Professional Development Activities.--Such 
professional development activities may include--
            ``(1) instruction in the use of data and academic 
        assessments to inform and instruct classroom practice;
            ``(2) instruction in ways that teachers, principals, pupil 
        services personnel, and school administrators may work more 
        effectively with parents;
            ``(3) the forming of partnerships with institutions of 
        higher education to establish school-based teacher training 
        programs that provide prospective teachers and novice teachers 
        with an opportunity to work under the guidance of experienced 
        teachers and college faculty;
            ``(4) the creation of career ladder programs for 
        paraprofessionals (assisting teachers under this part) to 
        obtain the education necessary for such paraprofessionals to 
        become licensed and certified teachers; and
            ``(5) instruction in ways to teach special needs children.
    ``(d) Program Participation.--Each local educational agency 
receiving assistance under this part may design professional 
development programs so that--
            ``(1) all school staff in schools participating in a 
        schoolwide program under section 1114 can participate in 
        professional development activities; and
            ``(2) all school staff in targeted assistance schools may 
        participate in professional development activities if such 
        participation will result in better addressing the needs of 
        students served under this part.
    ``(e) Parental Participation.--Parents may participate in 
professional development activities under this part if the school 
determines that parental participation is appropriate.
    ``(f) Consortia.--In carrying out such professional development 
programs, local educational agencies may provide services through 
consortia arrangements with other local educational agencies, 
educational service agencies or other local consortia, institutions of 
higher education, or other public or private institutions or 
organizations.
    ``(g) Consolidation of Funds.--Funds provided under this part that 
are used for professional development purposes may be consolidated with 
funds provided under title II of this Act and other sources.
    ``(h) Special Rule.--No State educational agency shall require a 
school or a local educational agency to expend a specific amount of 
funds for professional development activities under this part, except 
that this paragraph shall not apply with respect to requirements under 
section 1116(b)(3)(A)(iii).

``SEC. 1120. PARTICIPATION OF CHILDREN ENROLLED IN PRIVATE SCHOOLS.

    ``(a) General Requirement.--
            ``(1) In general.--To the extent consistent with the number 
        of eligible children identified under section 1115(b) in a 
        local educational agency who are enrolled in private elementary 
        and secondary schools, a local educational agency shall, after 
        timely and meaningful consultation with appropriate private 
        school officials, provide such children, on an equitable basis, 
        special educational services or other benefits under this part 
        (such as dual enrollment, educational radio and television, 
        computer equipment and materials, other technology, and mobile 
        educational services and equipment) that address their needs, 
        and shall ensure that teachers and families of these students 
        participate, on an equitable basis, in services and activities 
        developed pursuant to sections 1118 and 1119A.
            ``(2) Secular, neutral, nonideological.--Such educational 
        services or other benefits, including materials and equipment, 
        shall be secular, neutral, and nonideological.
            ``(3) Equity.--Educational services and other benefits for 
        such private school children shall be equitable in comparison 
        to services and other benefits for public school children 
        participating under this part, and shall be provided in a 
        timely manner.
            ``(4) Expenditures.--Expenditures for educational services 
        and other benefits to eligible private school children shall be 
        equal to the proportion of funds allocated to participating 
        school attendance areas based on the number of children from 
        low-income families who attend private schools, which the local 
        educational agency may determine each year or every 2 years.
            ``(5) Provision of services.--The local educational agency 
        shall provide services under this section directly or through 
        contracts with public and private agencies, organizations, and 
        institutions.
    ``(b) Consultation.--
            ``(1) In general.--To ensure timely and meaningful 
        consultation, a local educational agency shall consult with 
        appropriate private school officials during the design and 
        development of such agency's programs under this part, on 
        issues such as--
                    ``(A) how the children's needs will be identified;
                    ``(B) what services will be offered;
                    ``(C) how, where, and by whom the services will be 
                provided;
                    ``(D) how the services will be academically 
                assessed and how the results of that assessment will be 
                used to improve those services;
                    ``(E) the size and scope of the equitable services 
                to be provided to the eligible private school children, 
                and the amount of funds generated by low-income private 
                school children in each participating attendance area;
                    ``(F) the method or sources of data that are used 
                under subsection (a)(4) and section 1113(c)(2) to 
                determine the number of children from low-income 
                families in participating school attendance areas who 
                attend private schools; and
                    ``(G) how and when the agency will make decisions 
                about the delivery of services to such children, 
                including a thorough consideration and analysis of the 
                views of the private school officials on the provision 
                of contract services through potential third party 
                providers.
        If the local educational agency disagrees with the views of the 
        private school officials on the provision of services, through 
        a contract, 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 use 
        a contractor.
            ``(2) Timing.--Such consultation shall include meetings of 
        agency and private school officials and shall occur before the 
        local educational agency makes any decision that affects the 
        opportunities of eligible private school children to 
        participate in programs under this part. Such meetings shall 
        continue throughout implementation and assessment of services 
        provided under this section.
            ``(3) Discussion.--Such consultation shall include a 
        discussion of service delivery mechanisms a local educational 
        agency can use to provide equitable services to eligible 
        private school children.
            ``(4) Documentation.--Each local educational agency shall 
        maintain in its records and provide to the State educational 
        agency a written affirmation signed by officials of each 
        participating private school that the consultation required by 
        this section has occurred.
            ``(5) Compliance.--Private school officials shall have the 
        right to appeal to the State as to whether the consultation 
        provided for in this section was meaningful and timely, and 
        that due consideration was given to the views of private school 
        officials. If the private school wishes to appeal, the basis of 
        the claim of noncompliance with this section by a local 
        educational agency shall be provided to the State, and the 
        local educational agency shall forward the documentation 
        provided in subsection (b)(4) to the State.
    ``(c) Public Control of Funds.--
            ``(1) In general.--The control of funds provided under this 
        part, and title to materials, equipment, and property purchased 
        with such funds, shall be in a public agency, 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.
    ``(d) Standards for a Bypass.--If a local educational agency is 
prohibited by law from providing for the participation on an equitable 
basis of eligible children enrolled in private elementary and secondary 
schools or if the Secretary determines that a local educational agency 
has substantially failed or is unwilling to provide for such 
participation, as required by this section, the Secretary shall--
            ``(1) waive the requirements of this section for such local 
        educational agency;
            ``(2) arrange for the provision of services to such 
        children through arrangements that shall be subject to the 
        requirements of this section and sections 8505 and 8506; and
            ``(3) in making the determination, consider one or more 
        factors, including the quality, size, scope, and location of 
        the program and the opportunity of eligible children to 
        participate.
    ``(e) Capital Expenses.--
            ``(1) In general.--(A) From the amount appropriated for 
        this subsection under section 1002(g) for any fiscal year, each 
        State is eligible to receive an amount that bears the same 
        ratio to the amount so appropriated as the number of private 
        school children who received services under this part in the 
        State in the most recent year for which data satisfactory to 
        the Secretary are available bears to the number of such 
        children in all States in that same year.
            ``(B) The Secretary shall reallocate any amounts allocated 
        under subparagraph (A) that are not used by a State for the 
        purpose of this subsection to other States on the basis of 
        their respective needs, as determined by the Secretary.
            ``(2) Capital expenses.--(A) A local educational agency may 
        apply to the State educational agency for payments for capital 
        expenses consistent with this subsection.
            ``(B) State educational agencies shall distribute such 
        funds under this subsection to local educational agencies based 
        on the degree of need set forth in their respective 
        applications for assistance under this subsection.
            ``(3) Uses of funds.--Any funds appropriated to carry out 
        this subsection shall be used only for capital expenses 
        incurred to provide equitable services for private school 
        children under this section.

``SEC. 1120A. FISCAL REQUIREMENTS.

    ``(a) Maintenance of Effort.--A local educational agency may 
receive funds under this part for any fiscal year only if the State 
educational agency finds that the local educational agency has 
maintained its fiscal effort in accordance with section 8501 of this 
Act.
    ``(b) Federal Funds To Supplement, Not Supplant, Non-Federal 
Funds.--
            ``(1) In general.--A State or local educational agency 
        shall use funds received under this part only to supplement the 
        amount of funds that would, in the absence of such Federal 
        funds, be made available from non-Federal sources for the 
        education of pupils participating in programs assisted under 
        this part, and not to supplant such funds.
            ``(2) Special rule.--No local educational agency shall be 
        required to provide services under this part through a 
        particular instructional method or in a particular 
        instructional setting in order to demonstrate such agency's 
        compliance with paragraph (1).
    ``(c) Comparability of Services.--
            ``(1) In general.--(A) Except as provided in paragraphs (4) 
        and (5), a local educational agency may receive funds under 
        this part only if State and local funds will be used in schools 
        served under this part to provide services that, taken as a 
        whole, are at least comparable to services in schools that are 
        not receiving funds under this part.
            ``(B) If the local educational agency is serving all of 
        such agency's schools under this part, such agency may receive 
        funds under this part only if such agency will use State and 
        local funds to provide services that, taken as a whole, are 
        substantially comparable in each school.
            ``(C) A local educational agency may meet the requirements 
        of subparagraphs (A) and (B) on a grade-span by grade-span 
        basis or a school-by-school basis.
            ``(2) Written assurance.--(A) A local educational agency 
        shall be considered to have met the requirements of paragraph 
        (1) if such agency has filed with the State educational agency 
        a written assurance that such agency has established and 
        implemented--
                    ``(i) a local educational agency-wide salary 
                schedule;
                    ``(ii) a policy to ensure equivalence among schools 
                in teachers, administrators, and other staff; and
                    ``(iii) a policy to ensure equivalence among 
                schools in the provision of curriculum materials and 
                instructional supplies.
            ``(B) For the purpose of subparagraph (A), in the 
        determination of expenditures per pupil from State and local 
        funds, or instructional salaries per pupil from State and local 
        funds, staff salary differentials for years of employment shall 
        not be included in such determinations.
            ``(C) A local educational agency need not include 
        unpredictable changes in student enrollment or personnel 
        assignments that occur after the beginning of a school year in 
        determining comparability of services under this subsection.
            ``(3) Procedures and records.--Each local educational 
        agency assisted under this part shall--
                    ``(A) develop procedures for compliance with this 
                subsection; and
                    ``(B) maintain records that are updated biennially 
                documenting such agency's compliance with this 
                subsection.
            ``(4) Inapplicability.--This subsection shall not apply to 
        a local educational agency that does not have more than one 
        building for each grade span.
            ``(5) Compliance.--For the purpose of determining 
        compliance with paragraph (1), a local educational agency may 
        exclude State and local funds expended for--
                    ``(A) English language instruction for children of 
                limited English proficiency; and
                    ``(B) excess costs of providing services to 
                children with disabilities as determined by the local 
                educational agency.
          ``(d) Exclusion of Funds.--For the purpose of complying with 
subsections (b) and (c), a State or local educational agency may 
exclude supplemental State or local funds expended in any school 
attendance area or school for programs that meet the intent and 
purposes of this part.

``SEC. 1120B. COORDINATION REQUIREMENTS.

    ``(a) In General.--Each local educational agency receiving 
assistance under this part shall carry out the activities described in 
subsection (b) with Head Start Agencies, and if feasible, other early 
childhood development programs such as Early Reading First.
    ``(b) Activities.--The activities referred to in subsection (a) are 
activities that increase coordination between the local educational 
agency and a Head Start agency, and, if feasible, other early childhood 
development programs, such as Early Reading First serving children who 
will attend the schools of such agency, including--
            ``(1) developing and implementing a systematic procedure 
        for receiving records regarding such children transferred with 
        parental consent from a Head Start program or, where 
        applicable, other early childhood development programs such as 
        Early Reading First;
            ``(2) establishing channels of communication between school 
        staff and their counterparts in such Head Start agencies 
        (including teachers, social workers, and health staff) or other 
        early childhood development programs such as Early Reading 
        First, as appropriate, to facilitate coordination of programs;
            ``(3) conducting meetings involving parents, kindergarten 
        or elementary school teachers, and Head Start teachers or, if 
        appropriate, teachers from other early childhood development 
        programs such as Early Reading First, to discuss the 
        developmental and other needs of individual children;
            ``(4) organizing and participating in joint transition 
        related training of school staff, Head Start staff, Early 
        Reading First staff and, where appropriate, other early 
        childhood staff; and
            ``(5) linking the educational services provided in such 
        local educational agency with the services provided in local 
        Head Start agencies and Early Reading First programs.
    ``(c) Coordination of Regulations.--The Secretary shall work with 
the Secretary of Health and Human Services to coordinate regulations 
promulgated under this part with regulations promulgated under the Head 
Start Act.

                        ``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 
payments to States for any fiscal year under section 1002(a), the 
Secretary shall reserve a total of 1 percent to provide assistance to--
            ``(1) the outlying areas in the amount determined in 
        accordance with subsection (b); and
            ``(2) the Secretary of the Interior in the amount necessary 
        to make payments pursuant to subsection (d).
    ``(b) Assistance to Outlying Areas.--
            ``(1) Funds reserved.--From the amount made available for 
        any fiscal year under subsection (a), the Secretary shall award 
        grants to the outlying areas.
            ``(2) Competitive grants.--For each of fiscal years 2002 
        and 2003, the Secretary shall carry out the competition 
        described in paragraph (3), except that the amount reserved to 
        carry out such competition shall not exceed the amount reserved 
        under this section for the freely associated states for fiscal 
        year 1999.
            ``(3) Limitation for competitive grants.--
                    ``(A) Competitive grants.--The Secretary shall use 
                funds described in paragraph (2) to award grants, on a 
                competitive basis, to the outlying areas and freely 
                associated States to carry out the purposes of this 
                part.
                    ``(B) Award basis.--The Secretary shall award 
                grants under subparagraph (A) on a competitive basis, 
                pursuant to the recommendations of the Pacific Region 
                Educational Laboratory in Honolulu, Hawaii.
                    ``(C) Administrative costs.--The Secretary may 
                provide not more than 5 percent of the amount reserved 
                for grants under this paragraph to pay the 
                administrative costs of the Pacific Region Educational 
                Laboratory under subparagraph (B).
            ``(4) Special rule.--The provisions of Public Law 95-134, 
        permitting the consolidation of grants by the outlying areas, 
        shall not apply to funds provided to the freely associated 
        States under this section.
    ``(c) Definitions.--For the purposes of subsections (a) and (b)--
            ``(1) the term `freely associated States' means the 
        Republic of the Marshall Islands, the Federated States of 
        Micronesia, and the Republic of Palau; and
            ``(2) the term `outlying area' means the United States 
        Virgin Islands, Guam, American Samoa, and the Commonwealth of 
        the Northern Mariana Islands.
    ``(d) Allotment to the Secretary of the Interior.--
            ``(1) In general.--The amount allotted for payments to the 
        Secretary of the Interior under subsection (a)(2) for any 
        fiscal year shall be, as determined pursuant to criteria 
        established by the Secretary, the amount necessary to meet the 
        special educational needs of--
                    ``(A) Indian children on reservations served by 
                elementary and secondary schools for Indian children 
                operated or supported by the Department of the 
                Interior; and
                    ``(B) out-of-State Indian children in elementary 
                and secondary schools in local educational agencies 
                under special contracts with the Department of the 
                Interior.
            ``(2) Payments.--From the amount allotted for payments to 
        the Secretary of the Interior under subsection (a)(2), the 
        Secretary of the Interior shall make payments to local 
        educational agencies, upon such terms as the Secretary 
        determines will best carry out the purposes of this part, with 
        respect to out-of-State Indian children described in paragraph 
        (1). The amount of such payment may not exceed, for each such 
        child, the greater of--
                    ``(A) 40 percent of the average per-pupil 
                expenditure in the State in which the agency is 
                located; or
                    ``(B) 48 percent of such expenditure in the United 
                States.

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

    ``(a) Allocation Formula.--Of the amount appropriated to carry out 
this part for each of fiscal years 2002 through 2006 (referred to in 
this subsection as the current fiscal year)--
            ``(1) an amount equal to the amount appropriated to carry 
        out section 1124 for fiscal year 2001 shall be allocated in 
        accordance with section 1124;
            ``(2) an amount equal to the amount appropriated to carry 
        out section 1124A for fiscal year 2001 shall be allocated in 
        accordance with section 1124A; and
            ``(3) an amount equal to 100 percent of the amount, if any, 
        by which the amount appropriated under section 1002(a) for the 
        current fiscal year exceeds the amount appropriated under such 
        section for fiscal year 2001 shall be allocated in accordance 
        with section 1125.
    ``(b) Adjustments Where Necessitated by Appropriations.--
            ``(1) In general.--If the sums available under this part 
        for any fiscal year are insufficient to pay the full amounts 
        that all local educational agencies in States are eligible to 
        receive under sections 1124, 1124A, and 1125 for such year, the 
        Secretary shall ratably reduce the allocations to such local 
        educational agencies, subject to subsections (c) and (d) of 
        this section.
            ``(2) Additional funds.--If additional funds become 
        available for making payments under sections 1124, 1124A, and 
        1125 for such fiscal year, allocations that were reduced under 
        paragraph (1) shall be increased on the same basis as they were 
        reduced.
    ``(c) Hold-Harmless Amounts.--
            ``(1) Amounts for sections 1124 and 1125.--For each fiscal 
        year, the amount made available to each local educational 
        agency under each of sections 1124 and 1125 shall be--
                    ``(A) not less than 95 percent of the amount made 
                available in the preceding fiscal year if the number of 
                children counted for grants under section 1124 is not 
                less than 30 percent of the total number of children 
                aged 5 to 17 years, inclusive, in the local educational 
                agency;
                    ``(B) not less than 90 percent of the amount made 
                available in the preceding fiscal year if the 
                percentage described in subparagraph (A) is between 15 
                percent and 30 percent; and
                    ``(C) not less than 85 percent of the amount made 
                available in the preceding fiscal year if the 
                percentage described in subparagraph (A) is below 15 
                percent.
            ``(2) Amount for section 1124a.--The amount made available 
        to each local educational agency under section 1124A shall be 
        not less than 85 percent of the amount made available in the 
        preceding fiscal year.
            ``(3) Payments.--If sufficient funds are appropriated, the 
        amounts described in paragraph (2) shall be paid to all local 
        educational agencies that received grants under section 1124A 
        for the preceding fiscal year, regardless of whether the local 
        educational agency meets the minimum eligibility criteria for 
        that fiscal year provided in section 1124A(a)(1)(A) except that 
        a local educational agency that does not meet such minimum 
        eligibility criteria for 4 consecutive years shall no longer be 
        eligible to receive a hold harmless amount referred to in 
        paragraph (2).
            ``(4) Population data.--In any fiscal year for which the 
        Secretary calculates grants on the basis of population data for 
        counties, the Secretary shall apply the hold harmless 
        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, the State 
        educational agency shall reallocate funds proportionately from 
        all other local educational agencies in the State that are 
        receiving funds in excess of the hold harmless amounts 
        specified in this subsection.
    ``(d) Ratable Reductions.--
            ``(1) In general.--If the sums made available under this 
        part for any fiscal year are insufficient to pay the full 
        amounts that all States are eligible to receive under 
        subsection (c) for such year, the Secretary shall ratably 
        reduce such amounts for such year.
            ``(2) Additional funds.--If additional funds become 
        available for making payments under subsection (c) for such 
        fiscal year, amounts that were reduced under paragraph (1) 
        shall be increased on the same basis as such amounts were 
        reduced.
    ``(e) Definition.--For the purpose of this section and sections 
1124, 1124A, and 1125, the term `State' means each of the 50 States, 
the District of Columbia, and the Commonwealth of Puerto Rico.

``SEC. 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 or 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 two Secretaries 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) For any fiscal year in which 
                this paragraph applies, the Secretary shall calculate 
                grants under this section for each local educational 
                agency.
                    ``(ii) The amount of a grant under this section for 
                each large local educational agency shall be the amount 
                determined under clause (i).
                    ``(iii) For small local educational agencies, the 
                State educational agency may either--
                            ``(I) distribute grants under this section 
                        in amounts determined by the Secretary under 
                        clause (i); or
                            ``(II) use an alternative method approved 
                        by the Secretary to distribute the portion of 
                        the State's total grants under this section 
                        that is based on those small agencies.
                    ``(iv) An alternative method under clause (iii)(II) 
                shall be based on population data that the State 
                educational agency determines best reflect the current 
                distribution of children in poor families among the 
                State's small local educational agencies that meet the 
                eligibility criteria of subsection (b).
                    ``(v) If a small local educational agency is 
                dissatisfied with the determination of its grant by the 
                State educational agency under clause (iii)(II), it may 
                appeal that determination to the Secretary, who shall 
                respond not later than 45 days after receipt of such 
                appeal.
                    ``(vi) As used in this subparagraph--
                            ``(I) the term `large local educational 
                        agency' means a local educational agency 
                        serving an area with a total population of 
                        20,000 or more; and
                            ``(II) the term `small local educational 
                        agency' means a local educational agency 
                        serving an area with a total population of less 
                        than 20,000.
            ``(3) Allocations to counties.--
                    ``(A) Calculation.--For any fiscal year to which 
                this paragraph applies, the Secretary shall calculate 
                grants under this section on the basis of the number of 
                children counted under section 1124(c) for counties, 
                and State educational agencies shall suballocate county 
                amounts to local educational agencies, in accordance 
                with regulations issued by the Secretary.
                    ``(B) Direct allocations.--In any State in which a 
                large number of local educational agencies overlap 
                county boundaries, or for which the State believes it 
                has data that would better target funds than allocating 
                them by county, the State educational agency may apply 
                to the Secretary for authority to make the allocations 
                under this part for a particular fiscal year directly 
                to local educational agencies without regard to 
                counties.
                    ``(C) Assurances.--If the Secretary approves the 
                State educational agency's application under 
                subparagraph (B), the State educational agency shall 
                provide the Secretary an assurance that such 
                allocations shall be made--
                            ``(i) using precisely the same factors for 
                        determining a grant as are used under this 
                        part; or
                            ``(ii) using data that the State 
                        educational agency submits to the Secretary for 
                        approval that more accurately target poverty.
                    ``(D) Appeal.--The State educational agency shall 
                provide the Secretary an assurance that it shall 
                establish a procedure through which a local educational 
                agency that is dissatisfied with its determinations 
                under subparagraph (B) may appeal directly to the 
                Secretary for a final determination.
            ``(4) Puerto rico.--
                    ``(A) In general.--For each fiscal year, the grant 
                which the Commonwealth of Puerto Rico shall be eligible 
                to receive under this section shall be the amount 
                determined by multiplying the number of children 
                counted under subsection (c) for the Commonwealth of 
                Puerto Rico by the product of--
                            ``(i) 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; and
                            ``(ii) 32 percent of the average per-pupil 
                        expenditure in the United States.
                    ``(B) Minimum percentage.--The percentage in 
                subparagraph (A)(i) shall not be less than--
                            ``(i) for fiscal year 2002, 77.5 percent;
                            ``(ii) for fiscal year 2003, 80.0 percent;
                            ``(iii) for fiscal year 2004, 82.5 percent; 
                        and
                            ``(iv) for fiscal year 2005 and succeeding 
                        fiscal years, 85.0 percent.
                    ``(C) Limitation.--If the application of 
                subparagraph (B) would result in any of the 50 States 
                or the District of Columbia receiving less under this 
                part than it received under this part for the preceding 
                fiscal year, the percentage in subparagraph (A) shall 
                be the greater of the percentage in subparagraph (A)(i) 
                or the percentage used for the preceding fiscal year.
            ``(5) Definition.--For purposes of this subsection, the 
        term `State' does not include Guam, American Samoa, the Virgin 
        Islands, and the Northern Mariana Islands.
    ``(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 both--
            ``(1) 10 or more; and
            ``(2) more than 2 percent of the total school-age 
        population in the agency's jurisdiction.
    ``(c) Children To Be Counted.--
            ``(1) Categories of children.--The number of children to be 
        counted for purposes of this section is the aggregate of--
                    ``(A) the number of children aged 5 to 17, 
                inclusive, in the school district of the local 
                educational agency from families below the poverty 
                level as determined under paragraph (2);
                    ``(B) the number of children (determined under 
                paragraph (4) for either the preceding year as 
                described in that paragraph, or for the second 
                preceding year, as the Secretary finds appropriate) 
                aged 5 to 17, inclusive, in the school district of such 
                agency in institutions for neglected and delinquent 
                children (other than such institutions operated by the 
                United States), but not counted pursuant to subpart 1 
                of part D for the purposes of a grant to a State 
                agency, or being supported in foster homes with public 
                funds; and
                    ``(C) 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).
            ``(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 two or more 
        counties in their entirety, then each county will be treated as 
        if such county were a separate local educational agency for 
        purposes of calculating grants under this part. The total of 
        grants for such counties shall be allocated to such a local 
        educational agency, which local educational agency shall 
        distribute to schools in each county within such agency a share 
        of the local educational agency's total grant that is no less 
        than the county's share of the population counts used to 
        calculate the local educational agency's grant.
            ``(3) Population updates.--In fiscal year 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 local educational agencies or 
        counties, published by the Department of Commerce, unless the 
        Secretary and the Secretary of Commerce determine that use of 
        the updated population data would be inappropriate or 
        unreliable. If the Secretary and the Secretary of Commerce 
        determine that some or all of the data referred to in this 
        paragraph are inappropriate or unreliable, they shall publicly 
        disclose their reasons. In determining the families which are 
        below the poverty level, the Secretary shall utilize the 
        criteria of poverty used by the Bureau of the Census in 
        compiling the most recent decennial census, in such form as 
        those criteria have been updated by increases in the Consumer 
        Price Index for all urban consumers, published by the Bureau of 
        Labor Statistics.
            ``(4) Other children to be counted.--For the purposes of 
        this section, the Secretary shall determine the number of 
        children aged 5 to 17, inclusive, from families above the 
        poverty level on the basis of the number of such children from 
        families receiving an annual income, in excess of the current 
        criteria of poverty, from payments under a State program funded 
        under part A of title IV of the Social Security Act; and in 
        making such determinations the Secretary shall utilize the 
        criteria of poverty used by the Bureau of the Census in 
        compiling the most recent decennial census for a family of 4 in 
        such form as those criteria have been updated by increases in 
        the Consumer Price Index for all urban consumers, published by 
        the Bureau of Labor Statistics. The Secretary shall determine 
        the number of 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 subparagraph (A) of this 
        paragraph) 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 total grants under this section; or
            ``(2) the average of--
                    ``(A) one-quarter of 1 percent of the total amount 
                available for such fiscal year under this section; and
                    ``(B) the number of children in such State counted 
                under subsection (c) in the fiscal year multiplied by 
                150 percent of the national average per-pupil payment 
                made with funds available under this section for that 
                year.

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

    ``(a) Eligibility for and Amount of Grants.--
            ``(1) In general.--(A) Except as otherwise provided in this 
        paragraph, each local educational agency, in a State other than 
        Guam, American Samoa, the Virgin Islands, and the Commonwealth 
        of the Northern Mariana Islands, which is eligible for a grant 
        under section 1124 for any fiscal year is eligible for an 
        additional grant under this section for that fiscal year if the 
        number of children counted under section 1124(c) in the agency 
        exceeds either--
                    ``(i) 6,500; or
                    ``(ii) 15 percent of the total number of children 
                aged 5 through 17 in the agency.
            ``(B) Notwithstanding section 1122, no State described in 
        subparagraph (A) shall receive less than the lesser of--
                    ``(i) 0.25 percent of total grants; or
                    ``(ii) the average of--
                            ``(I) one-quarter of 1 percent of the sums 
                        available to carry out this section for such 
                        fiscal year; and
                            ``(II) the greater of--
                                    ``(aa) $340,000; or
                                    ``(bb) the number of children in 
                                such State counted for purposes of this 
                                section in that fiscal year multiplied 
                                by 150 percent of the national average 
                                per-pupil payment made with funds 
                                available under this section for that 
                                year.
            ``(2) Special rule.--For each county or local educational 
        agency eligible to receive an additional grant under this 
        section for any fiscal year the Secretary shall determine the 
        product of--
                    ``(A) the number of children counted under section 
                1124(c) for that fiscal year; and
                    ``(B) the quotient resulting from the division of 
                the amount determined for those agencies under section 
                1124(a)(1) for the fiscal year for which the 
                determination is being made divided by the total number 
                of children counted under section 1124(c) for that 
                agency for that fiscal year.
            ``(3) Amount.--The amount of the additional grant for which 
        an eligible local educational agency or county is eligible 
        under this section for any fiscal year shall be an amount which 
        bears the same ratio to the amount available to carry out this 
        section for that fiscal year as the product determined under 
        paragraph (2) for such local educational agency for that fiscal 
        year bears to the sum of such products for all local 
        educational agencies in the United States for that fiscal year.
            ``(4) Local allocations.--(A) Grant amounts under this 
        section shall be determined in accordance with section 
        1124(a)(2) and (3).
            ``(B) For any fiscal year for which the Secretary allocates 
        funds under this section on the basis of counties, a State may 
        reserve not more than 2 percent of its allocation under this 
        section to make grants to local educational agencies that meet 
        the criteria of paragraph (1)(A)(i) or (ii) and are in 
        ineligible counties that do not meet these criteria.
    ``(b) States Receiving Minimum Grants.--In States that receive the 
minimum grant under subsection (a)(1)(B), the State educational agency 
shall allocate such funds among the local educational agencies in each 
State either--
            ``(1) in accordance with paragraphs (2) and (4) of 
        subsection (a); or
            ``(2) based on their respective concentrations and numbers 
        of children counted under section 1124(c), except that only 
        those local educational agencies with concentrations or numbers 
        of children counted under section 1124(c) that exceed the 
        statewide average percentage of such children or the statewide 
        average number of such children shall receive any funds on the 
        basis of this paragraph.

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

    ``(a) Eligibility of Local Educational Agencies.--A local 
educational agency in a State is eligible to receive a targeted grant 
under this section for any fiscal year if the number of children in the 
local educational agency counted under subsection 1124(c), before 
application of the weighting factor described in subsection (c), is at 
least 10, and if the number of children counted for grants under 
section 1124 is at least 5 percent of the total population aged 5 to 17 
years, inclusive, in the local educational agency. For each fiscal year 
for which the Secretary uses county population data to calculate 
grants, funds made available as a result of applying this subsection 
shall be reallocated by the State educational agency to other eligible 
local educational agencies in the State in proportion to the 
distribution of other funds under this section.
    ``(b) Grants for Local Educational Agencies, the District of 
Columbia, and Puerto Rico.--
            ``(1) In general.--The amount of the grant that a local 
        educational agency in a State or that the District of Columbia 
        is eligible to receive under this section for any fiscal year 
        shall be the product of--
                    ``(A) the weighted child count determined under 
                subsection (c); and
                    ``(B) the amount in paragraph 1124(a)(1)(B).
            ``(2) Puerto rico.--For each fiscal year, the amount of the 
        grant for which the Commonwealth of Puerto Rico is eligible 
        under this section shall be equal to the number of children 
        counted under subsection (c) for Puerto Rico, multiplied by the 
        amount determined in subparagraph 1124(a)(4).
    ``(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 clause (i) or (ii), as 
                follows:
                            ``(i) By percentage of children.--This 
                        amount is determined by adding--
                                    ``(I) the number of children 
                                determined under section 1124(c) for 
                                that county constituting up to 15 
                                percent, inclusive, of the county's 
                                total population aged 5 to 17, 
                                inclusive, multiplied by 1.0;
                                    ``(II) the number of such children 
                                constituting more than 15 percent, but 
                                not more than 19 percent, of such 
                                population, multiplied by 1.75;
                                    ``(III) the number of such children 
                                constituting more than 19 percent, but 
                                not more than 24.20 percent, of such 
                                population, multiplied by 2.5;
                                    ``(IV) the number of such children 
                                constituting 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 
                                constituting more than 29.20 percent of 
                                such population, multiplied by 4.0.
                            ``(ii) By number of children.--This amount 
                        is determined by adding--
                                    ``(I) the number of children 
                                determined under section 1124(c) 
                                constituting up to 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.
                    ``(B) Puerto rico.--Notwithstanding subparagraph 
                (A), the weighted child count for Puerto Rico under 
                this paragraph shall not be greater than the total 
                number of children counted under subsection 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 clauses (i) 
                and (ii), as follows:
                            ``(i) By percentage of children.--This 
                        amount is determined by adding--
                                    ``(I) the number of children 
                                determined under section 1124(c) for 
                                that local educational agency 
                                constituting up to 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 
                                constituting 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 
                                constituting 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 
                                constituting 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 
                                constituting more than 41.452 percent 
                                of such population, multiplied by 4.0.
                            ``(ii) By number of children.--This amount 
                        is determined by adding--
                                    ``(I) the number of children 
                                determined under section 1124(c) 
                                constituting up to 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 54,601 in such population, 
                                multiplied by 3.0.
                    ``(B) Puerto rico.--Notwithstanding subparagraph 
                (A), the weighted child count for Puerto Rico under 
                this paragraph shall not be greater than the total 
                number of children counted under section 1124(c) 
                multiplied by 1.72.
    ``(d) Calculation of Grant Amounts.--Grants under this section 
shall be calculated in accordance with 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 at least 
the lesser of--
            ``(1) 0.25 percent of total appropriations; or
            ``(2) the average of--
                    ``(A) one-quarter of 1 percent of the total amount 
                available to carry out this section; and
                    ``(B) 150 percent of the national average grant 
                under this section per child described in section 
                1124(c), without application of a weighting factor, 
                multiplied by the State's total number of children 
                described in section 1124(c), without application of a 
                weighting factor.

``SEC. 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 children 
        as described in subparagraph (B) of section 1124(c)(1), 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 two 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 one 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 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 1 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. 1128. SECULAR, NEUTRAL, AND NONIDEOLOGICAL.

    ``Any school that receives funds under this part shall ensure that 
educational services or other benefits provided under this part, 
including materials and equipment, shall be secular, neutral, and 
nonideological.''.

           PART B--STUDENT READING SKILLS IMPROVEMENT GRANTS

SEC. 111. READING FIRST; EARLY 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--STUDENT READING SKILLS IMPROVEMENT GRANTS'';

            (2) by redesignating sections 1201 through 1212 as sections 
        1231 through 1242, respectively; and
            (3) by inserting after the part heading the following:

                       ``Subpart 1--Reading First

``SEC. 1201. FINDINGS.

    ``The Congress finds as follows:
            ``(1) The 2000 National Assessment of Educational Progress 
        found that 68 percent of fourth grade students in the United 
        States are reading below the proficient level.
            ``(2) According to the 2000 National Assessment of 
        Educational Progress report on reading, 63 percent of African 
        Americans, 58 percent of Hispanic Americans, 60 percent of 
        children living in poverty, and 47 percent of children in urban 
        schools scored `below basic' in reading.
            ``(3) More than \1/2\ of the students placed in special 
        education classes are identified as learning disabled and, for 
        as many as 80 percent of the students so identified, reading is 
        the primary difficulty.
            ``(4) It is estimated that, at a minimum, 10,000,000 
        children have difficulty learning to read. 10 to 15 percent of 
        those children eventually drop out of high school, and only 2 
        percent complete a 4-year program at an institution of higher 
        education.
            ``(5) It is estimated that the number of children who are 
        typically identified as poor readers can be significantly 
        reduced through the implementation of early identification and 
        prevention programs that are based on scientifically based 
        reading research.
            ``(6) The report issued by the National Reading Panel in 
        2000 found that the course of reading instruction that obtains 
        maximum benefits for students includes explicit and systematic 
        instruction in phonemic awareness, phonics, vocabulary 
        development, reading fluency, and reading comprehension 
        strategies.

``SEC. 1202. 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 based on scientifically 
        based reading research, in order to ensure that every student 
        can read at grade level or above not later than the end of the 
        third grade.
            ``(2) To provide assistance to States and local educational 
        agencies in preparing teachers, including special education 
        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 to 
        effectively help their students learn to read.
            ``(3) To provide assistance to States and local educational 
        agencies in selecting and administering rigorous diagnostic 
        reading and screening assessment tools that are valid and 
        reliable, document the effectiveness of this subpart in 
        improving the reading skills of students, and improve classroom 
        instruction.
            ``(4) To provide assistance to States and local educational 
        agencies in selecting or developing effective classroom 
        instructional materials, programs, and strategies to implement 
        scientific research-based methods that have been proven to 
        prevent or remediate reading failure.
            ``(5) To strengthen coordination among schools and early 
        literacy programs in order to improve reading achievement for 
        all children.

``SEC. 1203. FORMULA GRANTS TO STATES.

    ``(a) In General.--
            ``(1) Authorization to make grants.--In the case of each 
        State that in accordance with section 1204 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 for the uses specified in subsections (c) and (d). 
        For each fiscal year, the funds provided under the grant shall 
        equal the allotment determined for the State under subsection 
        (b).
            ``(2) Duration of grants.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                grant under this section shall be awarded for a period 
                of not more than 5 years.
                    ``(B) Interim review.--
                            ``(i) Progress report.--
                                    ``(I) Submission.--Not later than 
                                60 days after the termination of the 
                                third year of the grant period, each 
                                State receiving a grant under this 
                                section shall submit a progress report 
                                to the Secretary.
                                    ``(II) Information included.--The 
                                progress report shall include 
                                information on the progress the State, 
                                and local educational agencies within 
                                the State, are making in reducing the 
                                number of students served under this 
                                subpart in the first and second grades 
                                who are reading below grade level, as 
                                demonstrated by such information as 
                                teacher reports and school evaluations 
                                of mastery of the essential components 
                                of reading instruction. The report 
                                shall also include evidence from the 
                                State and its local educational 
                                agencies that they have significantly 
                                increased the number of students 
                                reading at grade level or above, 
                                significantly increased the percentages 
                                of students in ethnic, racial, and low-
                                income populations who are reading at 
                                grade level or above, and successfully 
                                implemented this subpart.
                            ``(ii) Peer review.--The progress report 
                        described in clause (i) shall be reviewed by 
                        the peer review panel convened under section 
                        1204(c)(2).
                            ``(iii) Consequences of insufficient 
                        progress.--After the submission of the progress 
                        report described in clause (i), if the 
                        Secretary determines that the State is not 
                        making significant progress in meeting the 
                        purposes of this subpart, the Secretary may 
                        withhold from the State, in whole or in part, 
                        further payments under this section in 
                        accordance with section 455 of the General 
                        Education Provisions Act (20 U.S.C. 1234d) or 
                        take such other action authorized by law as the 
                        Secretary deems necessary, including providing 
                        technical assistance upon request of the State.
    ``(b) Determination of Amount of Allotments.--
            ``(1) Reservations from appropriations.--From the total 
        amount made available under section 1002(b)(1) to carry out 
        this subpart for a fiscal year, the Secretary--
                    ``(A) shall 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;
                    ``(B) shall reserve \1/2\ of 1 percent for the 
                Secretary of the Interior for programs under this 
                subpart in schools operated or funded by the Bureau of 
                Indian Affairs;
                    ``(C) shall reserve not more than 3 percent or 
                $30,000,000, whichever is less, to carry out section 
                1206;
                    ``(D) may reserve not more than 1 percent to carry 
                out section 1207; and
                    ``(E) shall reserve $5,000,000 to carry out section 
                1208.
            ``(2) State allotments.--From the total amount made 
        available under section 1002(b)(1) to carry out this subpart 
        for a fiscal year and not reserved under paragraph (1), the 
        Secretary shall allot 80 percent under this section among each 
        of the 50 States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.
            ``(3) Determination of state allotment amounts.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall allot the amount made available under 
                paragraph (2) for a fiscal year among the States 
                described in such paragraph in proportion to the number 
                of children, aged 5 to 17, who reside within the State 
                from families with incomes below the poverty line (as 
                defined by the Office of Management and Budget and 
                revised annually in accordance with section 673(2) of 
                the Community Services Block Grant Act (42 U.S.C. 
                9902(2)) applicable to a family of the size involved 
                for the most recent fiscal year for which satisfactory 
                data are available, compared to the number of such 
                individuals who reside in all such States for that 
                fiscal year.
                    ``(B) Exceptions.--
                            ``(i) In general.--Subject to clause (ii), 
                        no State receiving an allotment under 
                        subparagraph (A) may receive less than \1/4\ of 
                        1 percent of the total amount allotted under 
                        such subparagraph.
                            ``(ii) Puerto rico.--The percentage of the 
                        amount allotted under subparagraph (A) that is 
                        allotted to the Commonwealth of Puerto Rico for 
                        a fiscal year may not exceed the percentage 
                        that was received by the Commonwealth of Puerto 
                        Rico of the funds allocated to all States under 
                        subpart 2 of part A for the preceding fiscal 
                        year.
            ``(4) Reallotment.--If a State described in paragraph (2) 
        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 (3).
    ``(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 local educational 
        agencies.
            ``(2) Notice.--A State receiving a grant under this section 
        shall provide notice to all 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 applications.--To be eligible to receive a 
        subgrant under this subsection, a 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) Limitation to certain local agencies.--A State 
        receiving a grant under this section may award subgrants under 
        this subsection only to local educational agencies--
                    ``(A) that have the highest percentages of students 
                in grades kindergarten through 3 reading below grade 
                level; and
                    ``(B) that--
                            ``(i) have jurisdiction over--
                                    ``(I) 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; or
                                    ``(II) a significant number of 
                                schools that are identified for school 
                                improvement under section 1116(b); or
                            ``(ii) are located in areas having the 
                        greatest numbers or percentages of children 
                        aged 5 through 17 from low-income families.
            ``(5) State requirement.--In distributing subgrant funds to 
        local educational agencies under this subsection, a State shall 
        provide funds in sufficient size and scope to enable local 
        educational agencies to improve reading instruction, as 
        determined by rigorous diagnostic reading and screening 
        assessment tools.
            ``(6) Limitation to certain schools.--In distributing 
        subgrant funds under this subsection, a local educational 
        agency may provide funds only to schools--
                    ``(A) that have the highest percentages of students 
                in grades kindergarten through 3 reading below grade 
                level; and
                    ``(B) that--
                            ``(i) are identified for school improvement 
                        under section 1116(b); or
                            ``(ii) have the greatest numbers or 
                        percentages of children aged 5 through 17 from 
                        low-income families.
            ``(7) Local uses of funds.--
                    ``(A) Required uses.--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:
                            ``(i) Selecting and administering rigorous 
                        diagnostic reading and screening assessment 
                        tools.
                            ``(ii) Selecting and implementing a program 
                        or programs of classroom reading instruction 
                        based on scientifically based reading research 
                        that--
                                    ``(I) includes the essential 
                                components of reading instruction; and
                                    ``(II) provides such instruction to 
                                all children, including children who--
                                            ``(aa) may have reading 
                                        difficulties;
                                            ``(bb) are at risk of being 
                                        referred to special education 
                                        based on these difficulties;
                                            ``(cc) have been evaluated 
                                        under section 614 of the 
                                        Individuals with Disabilities 
                                        Education Act but, in 
                                        accordance with section 
                                        614(b)(5) of such Act, have not 
                                        been identified as being a 
                                        child with a disability (as 
                                        defined in section 602 of such 
                                        Act);
                                            ``(dd) 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;
                                            ``(ee) are deficient in 
                                        their phonemic awareness, 
                                        phonics skills, vocabulary 
                                        development, oral reading 
                                        fluency, or comprehension 
                                        strategies; or
                                            ``(ff) are identified as 
                                        having limited English 
                                        proficiency.
                            ``(iii) Procuring classroom instructional 
                        materials based on scientifically based reading 
                        research.
                            ``(iv) Providing professional development 
                        for teachers of grades kindergarten through 3, 
                        and special education teachers of grades 
                        kindergarten through 12, that--
                                    ``(I) will prepare these teachers 
                                in all of the essential components of 
                                reading instruction;
                                    ``(II) shall include--
                                            ``(aa) information, 
                                        instructional materials, 
                                        programs, strategies, and 
                                        approaches based on 
                                        scientifically based reading 
                                        research, including early 
                                        intervention and classroom 
                                        reading materials and remedial 
                                        programs and approaches; and
                                            ``(bb) instruction in the 
                                        use of rigorous diagnostic 
                                        reading and screening 
                                        assessment tools and other 
                                        procedures that effectively 
                                        identify students who may be at 
                                        risk for reading failure or who 
                                        are having difficulty reading;
                                    ``(III) shall be provided by 
                                eligible professional development 
                                providers; and
                                    ``(IV) will assist teachers in 
                                becoming fully qualified in accordance 
                                with the requirements of section 1119.
                    ``(B) Optional uses.--Subject to paragraph (8), a 
                local educational agency that receives a subgrant under 
                this subsection may use the funds provided under the 
                subgrant to carry out the following activities:
                            ``(i) Providing training to parents and 
                        other individuals who volunteer to be reading 
                        tutors in the essential components of reading 
                        instruction.
                            ``(ii) Providing family literacy services, 
                        especially to parents enrolled in participating 
                        schools, through the use of library materials 
                        and reading programs, strategies, and 
                        approaches that are based on scientifically 
                        based reading research, to encourage reading 
                        and support their children's reading 
                        development.
            ``(8) Local planning and administration.--A local 
        educational agency that receives a subgrant under this 
        subsection may use not more than 2 percent of the funds 
        provided under the subgrant for planning and administration.
    ``(d) Other State Uses of Funds.--
            ``(1) Professional development.--
                    ``(A) In general.--A State that receives a grant 
                under this section may expend not more than 15 percent 
                of the amount of the funds provided under the grant--
                            ``(i) to develop and implement a program of 
                        in-service professional development for 
                        teachers of kindergarten through third grade, 
                        and special education teachers of grades 
                        kindergarten through 12, that--
                                    ``(I) will prepare these teachers 
                                in all of the essential components of 
                                reading instruction;
                                    ``(II) shall include--
                                            ``(aa) information on 
                                        interventions, instructional 
                                        materials, programs, and 
                                        approaches based on 
                                        scientifically based reading 
                                        research, including early 
                                        intervention and reading 
                                        remediation materials, 
                                        programs, and approaches; and
                                            ``(bb) instruction in the 
                                        use of rigorous diagnostic 
                                        reading and screening 
                                        assessment tools and other 
                                        procedures to improve 
                                        instruction and 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;
                            ``(ii) to strengthen and enhance 
                        professional development courses for students 
                        preparing, at all public institutions of higher 
                        education in the State, to teach kindergarten 
                        through third grades by--
                                    ``(I) reviewing such courses to 
                                determine whether their content is 
                                consistent with the findings of the 
                                most current scientifically based 
                                reading research, including findings on 
                                the essential components of reading 
                                instruction;
                                    ``(II) following up such reviews 
                                with recommendations to ensure that 
                                such institutions offer courses that 
                                meet the highest standards; and
                                    ``(III) preparing a report on the 
                                results of such reviews, submitting it 
                                to the reading and literacy partnership 
                                for the State established under section 
                                1204(d), and making it available for 
                                public review via the Internet; and
                            ``(iii) to make recommendations on how the 
                        State's licensure and certification standards 
                        in the area of reading might be improved.
                    ``(B) Funds not used for professional 
                development.--Any portion of the funds described in 
                subparagraph (A) that a State does not expend in 
                accordance with such subparagraph shall be expended for 
                the purpose of making subgrants in accordance with 
                subsection (c).
            ``(2) Other state-level activities.--A State that receives 
        a grant under this section may expend not more than 3 percent 
        of the amount of the funds provided under the grant 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 classroom reading program under this 
                subpart, including--
                            ``(i) selecting and implementing a program 
                        or programs of classroom reading instruction 
                        based on scientifically based reading research;
                            ``(ii) selecting rigorous diagnostic 
                        reading and screening assessment tools; and
                            ``(iii) identifying eligible professional 
                        development providers to help prepare reading 
                        teachers to teach students using the programs 
                        and assessments described in clauses (i) and 
                        (ii);
                    ``(B) Providing to students in kindergarten through 
                third grades, through appropriate providers, reading 
                instruction that includes--
                            ``(i) rigorous diagnostic reading and 
                        screening assessment tools; and
                            ``(ii) as need is indicated by such 
                        assessments, instruction based on 
                        scientifically based reading research that 
                        includes the essential components of reading 
                        instruction.
            ``(3) Planning, administration, and reporting.--
                    ``(A) In general.--A State that receives a grant 
                under this section shall expend not more than 2 percent 
                of the amount of the funds provided under the grant for 
                the activities described in this paragraph.
                    ``(B) Planning and administration.--A State that 
                receives a grant under this section may expend funds 
                described in subparagraph (A) for--
                            ``(i) planning and administration relating 
                        to the State uses of funds authorized under 
                        this subpart, including administering the 
                        distribution of competitive subgrants to local 
                        educational agencies under this section and 
                        section 1205; and
                            ``(ii) assessing and evaluating, on a 
                        regular basis, local educational agency 
                        activities assisted under this subpart, with 
                        respect to whether they have been effective in 
                        increasing the number of children in first and 
                        second grades served under this subpart who can 
                        read at or above grade level.
                    ``(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 include a specific 
                        identification of those schools and local 
                        educational agencies that report the largest 
                        gains in reading achievement.
                            ``(ii) Privacy protection.--Data in the 
                        report shall be set forth 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 produce the 
                        reports required to be submitted under this 
                        subparagraph.

``SEC. 1204. STATE FORMULA GRANT APPLICATIONS.

    ``(a) In General.--A State that desires to receive a grant under 
section 1203 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).
    ``(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) 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 a 
        process--
                    ``(A) to evaluate programs carried out by local 
                educational agencies under this subpart;
                    ``(B) to assist local educational agencies in 
                identifying rigorous diagnostic reading and screening 
                assessment tools; and
                    ``(C) to assist local educational agencies in 
                identifying interventions, and instructional materials, 
                programs and approaches, based on scientifically based 
                reading research, including early intervention and 
                classroom reading materials and remedial programs and 
                approaches.
            ``(3) An assurance that the State, and local educational 
        agencies in the State, will participate in all national 
        evaluations under this subpart.
    ``(c) Approval of Applications.--
            ``(1) In general.--The Secretary, in consultation with the 
        peer review panel convened under paragraph (2), shall approve 
        an application of a State under this section if such 
        application meets the requirements 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) three individuals selected by the 
                        Secretary;
                            ``(ii) three individuals selected by the 
                        National Institute for Literacy;
                            ``(iii) three individuals selected by the 
                        National Research Council of the National 
                        Academy of Sciences; and
                            ``(iv) three 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) In general.--In order for a State to receive a grant 
        under section 1203, the Governor of the State, in consultation 
        with the State educational agency, shall establish a reading 
        and literacy partnership.
            ``(2) Required participants.--The reading and literacy 
        partnership shall include 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 1203.
                    ``(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 may be a special education 
                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.
            ``(3) Optional participants.--The 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.

``SEC. 1205. DISCRETIONARY GRANTS TO STATES.

    ``(a) In General.--In the case of a State that, in accordance with 
sections 1203 and 1204, has received approval of an application for a 
5-year formula grant, the Secretary may make additional 2-year 
discretionary grants to the State for the use specified in (d). For 
each fiscal year, the funds provided under the discretionary grant 
shall equal the allotment determined for the State under subsection 
(b).
    ``(b) Determination of Amount of Allotments.--From the total amount 
made available under section 1002(b)(1) to carry out this subpart for a 
fiscal year and not reserved under paragraph (1), the Secretary, upon 
the recommendation of the peer review panel convened under section 
1204(c)(2), shall allot 20 percent under this section among the States 
described in subsection (a)--
            ``(1) for fiscal years 2002 and 2003, based upon a 
        determination of such States' relative likelihood of 
        effectively implementing a program under this subpart; and
            ``(2) for fiscal year 2004 and subsequent fiscal years, 
        based upon such States' applications under subsection (c).
    ``(c) State Discretionary Grant Applications.--
            ``(1) In general.--A State that desires to receive a grant 
        under this section for a grant period that includes any fiscal 
        year after fiscal year 2003 shall submit the information 
        described in paragraph (3) to the Secretary at such time and in 
        such form as the Secretary may require.
            ``(2) Peer review.--The peer review panel convened under 
        section 1204(c)(2) shall review the information submitted under 
        this subsection. The panel shall recommend such applications to 
        the Secretary for funding or for disapproval.
            ``(3) Information.--The information described in this 
        paragraph is the following:
                    ``(A) An assurance that the State will award 
                competitive subgrants to local educational agencies 
                consistent with subsection (d)(4).
                    ``(B) An assurance that the State will ensure that 
                local educational agencies that receive a subgrant 
                under subsection (d) use the funds provided under the 
                subgrant in accordance with subsection (d)(5).
                    ``(C) Evidence that the State has increased 
                significantly the percentage of students reading at 
                grade level or above.
                    ``(D) Evidence that the State has been successful 
                in increasing the percentage of students in ethnic, 
                racial, and low-income populations who are reading at 
                grade level or above.
                    ``(E) Any additional evidence that demonstrates 
                success in the implementation of this subpart.
    ``(d) 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 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 be eligible to receive a subgrant 
        under this subsection, a 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) In general.--A State shall distribute 
                subgrants under this section through a competitive 
                process based on relative need and the evidence 
                described in this paragraph.
                    ``(B) Evidence used in all years.--For all fiscal 
                years, a State shall distribute subgrants under this 
                section based on evidence that a local educational 
                agency--
                            ``(i) satisfies the requirements of section 
                        1203(c)(4);
                            ``(ii) will carry out its obligations under 
                        this subpart, particularly paragraph (5); and
                            ``(iii) will work with other local 
                        educational agencies in the State that have not 
                        received a subgrant under this subsection to 
                        assist such non-receiving agencies in 
                        increasing the reading achievement of students.
                    ``(C) Evidence used in fiscal years after 2003.--
                For fiscal year 2004 and subsequent fiscal years, a 
                State shall distribute subgrants under this section 
                based on the evidence described in subparagraph (B) 
                and, in addition, evidence that a local educational 
                agency--
                            ``(i) has significantly increased the 
                        percentage of all students reading at grade 
                        level or above;
                            ``(ii) has significantly increased the 
                        percentage of students in ethnic, racial, and 
                        low-income populations who are reading at grade 
                        level or above; and
                            ``(iii) has demonstrated success in the 
                        implementation of this subpart.
            ``(5) Local uses of funds.--A local educational agency that 
        receives a subgrant under this subsection--
                    ``(A) shall use the funds provided under the 
                subgrant to carry out the activities described in 
                section 1203(c)(7)(A); and
                    ``(B) may use such funds to carry out the 
                activities described in section 1203(c)(7)(B).
    ``(e) Definition.--For purposes of this section, the term `State' 
means each of the 50 States, the District of Columbia, and the 
Commonwealth of Puerto Rico.

``SEC. 1206. EXTERNAL EVALUATION.

    ``(a) In General.--From funds reserved under section 1203(b)(1)(C), 
the Secretary shall contract with an independent outside organization 
for a 5-year, rigorous, scientifically valid, quantitative evaluation 
of this subpart.
    ``(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 section 1205 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. 1207. NATIONAL ACTIVITIES.

    ``From funds reserved under section 1203(b)(1)(D), the Secretary 
may provide technical assistance in achieving the purposes of this 
subpart to States, local educational agencies, and schools requesting 
such assistance.

``SEC. 1208. INFORMATION DISSEMINATION.

    ``(a) In General.--From funds reserved under section 1203(b)(1)(E), 
the National Institute for Literacy, in collaboration with the 
Secretary of Education, the Secretary of Health and Human Services, and 
the Director of the National Institute for Child Health and Human 
Development--
            ``(1) shall disseminate information on scientifically based 
        reading research pertaining to children, youth, and adults;
            ``(2) shall identify and disseminate information about 
        schools, local educational agencies, and States that 
        effectively developed and implemented classroom 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) shall support the continued identification and 
        dissemination of information on reading programs that contain 
        the essential components of reading instruction as supported by 
        scientifically based reading research, that can lead to 
        improved reading outcomes for children, youth, and adults.
    ``(b) Dissemination.--
            ``(1) In general.--At a minimum, the National Institute for 
        Literacy shall disseminate such information to--
                    ``(A) recipients of Federal financial assistance 
                under part A of this title, part A of title III, the 
                Head Start Act, the Individuals with Disabilities 
                Education Act, and the Adult Education and Family 
                Literacy Act; and
                    ``(B) each Bureau funded school (as defined in 
                section 1141(3) of the Education Amendments of 1978).
            ``(2) Use of existing networks.--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.

``SEC. 1209. 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, 
        including special education teachers, that is based on 
        scientifically based reading research.
            ``(2) Essential components of reading instruction.--The 
        term `essential components of reading instruction' means 
        explicit and systematic instruction in--
                    ``(A) phonemic awareness;
                    ``(B) phonics;
                    ``(C) vocabulary development;
                    ``(D) oral reading fluency; and
                    ``(E) reading comprehension strategies.
            ``(3) 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.
            ``(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 and screening assessment 
        tools.--The term `rigorous diagnostic reading and screening 
        assessment tools' means assessments that--
                    ``(A) are valid, reliable, and based on 
                scientifically based reading research;
                    ``(B) measure progress in developing phonemic 
                awareness and phonics skills, vocabulary, reading 
                fluency, and reading comprehension;
                    ``(C) identify students who may be at risk for 
                reading failure or who are having difficulty reading; 
                and
                    ``(D) are used to improve instruction.
            ``(6) Scientifically based reading research.--The term 
        `scientifically based reading research'--
                    ``(A) means the application of 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.

                    ``Subpart 2--Early Reading First

``SEC. 1221. PURPOSES.

    ``The purposes of this subpart are as follows:
            ``(1) To improve prereading skills in children aged 3 
        through 5, particularly children from low-income families, in 
        high-quality oral language and literature-rich environments.
            ``(2) To provide professional development for early 
        childhood teachers that prepares them with scientific research-
        based knowledge of early reading development to assist in 
        developing the children's--
                    ``(A) automatic recognition of the letters of the 
                alphabet and letter sounds;
                    ``(B) understanding that spoken words are made up 
                of small segments of speech sounds and that certain 
                letters regularly represent such speech sounds;
                    ``(C) spoken vocabulary and oral comprehension 
                abilities; and
                    ``(D) understanding of semiotic concepts.
            ``(3) To use scientific research-based screening tools or 
        other appropriate measures to determine whether preschool 
        children are developing the skills identified in this section.
            ``(4) To identify and provide scientific research-based 
        prereading language and literacy activities and instructional 
        materials that can be used to assist in the development of 
        prereading skills in children.
            ``(5) To integrate such scientific research-based 
        instructional materials and literacy activities with existing 
        programs of preschools, child care agencies and programs, and 
        Head Start centers, and with family literacy services.

``SEC. 1222. LOCAL EARLY READING FIRST GRANTS.

    ``(a) Program Authorized.--From amounts appropriated under section 
1002(b)(2), the Secretary shall make awards, on a competitive basis and 
for periods of not more than 5 years, to eligible applicants to enable 
such applicants to carry out activities that are consistent with the 
purposes of this subpart.
    ``(b) Definition of Eligible Applicant.--In this subpart, the term 
`eligible applicant' means--
            ``(1) a local educational agency;
            ``(2) one or more public or private organizations or 
        agencies, acting on behalf of one or more programs that serve 
        children aged 3 through 5 (such as a program at a child care 
        agency or program or Head Start center or a family literacy 
        program), which organizations or agencies shall be located in a 
        community served by a local educational agency; or
            ``(3) one or more local educational agencies 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 subpart shall submit an application to the 
Secretary, which shall include a description of--
            ``(1) the programs to be served by the proposed project, 
        including general demographic and socioeconomic information on 
        the communities in which the proposed project will be 
        administered;
            ``(2) how the proposed project will enhance the school 
        readiness of children aged 3 through 5 in high-quality oral 
        language and literature-rich environments;
            ``(3) how the proposed project will provide early childhood 
        teachers with scientific research-based knowledge of early 
        reading development and assist such teachers in developing the 
        children's prereading skills;
            ``(4) how the proposed project will provide services and 
        utilize instructional materials that are based on 
        scientifically based reading research on early language 
        acquisition, prereading activities, and the development of 
        spoken vocabulary skills;
            ``(5) how the proposed project will integrate such 
        instructional materials and literacy activities with existing 
        preschool programs and family literacy services;
            ``(6) how the proposed project will help staff in the 
        programs to meet the diverse needs of children in the 
        community, including children with limited English proficiency 
        and children with learning disabilities;
            ``(7) how the proposed project will help children, 
        particularly children experiencing difficulty with spoken 
        language, prereading, and early reading skills, to make the 
        transition from preschool to formal classroom instruction in 
        school;
            ``(8) how the activities conducted under this subpart will 
        be coordinated with the eligible applicant's activities under 
        subpart 1, if the applicant has received a subgrant under such 
        subpart, at the kindergarten through third grade levels;
            ``(9) how the proposed project will evaluate the success of 
        the activities supported under this subpart in enhancing the 
        early language and reading development of children served by 
        the project; and
            ``(10) such other information as the Secretary may require.
    ``(d) Approval of Local Applications.--The Secretary shall select 
applicants for funding under this subpart based on the quality of the 
applications and the recommendations of the peer review panel convened 
under section 1204(c)(2).
    ``(e) Local Uses of Funds.--
            ``(1) Required 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 children aged 3 through 5 with 
                high-quality oral language and literature-rich 
                environments in which to acquire prereading skills.
                    ``(B) Providing professional development for early 
                childhood teachers that prepares them with scientific 
                research-based knowledge of early reading development 
                to assist in developing the children's--
                            ``(i) automatic recognition of the letters 
                        of the alphabet and letter sounds;
                            ``(ii) understanding that spoken words are 
                        made up of small segments of speech sounds and 
                        that certain letters regularly represent such 
                        speech sounds;
                            ``(iii) spoken vocabulary and oral 
                        comprehension abilities; and
                            ``(iv) understanding of semiotic concepts.
                    ``(C) Identifying and providing scientific 
                research-based prereading language and literacy 
                activities and instructional materials for use in 
                developing the children's--
                            ``(i) automatic recognition of the letters 
                        of the alphabet;
                            ``(ii) understanding that spoken words are 
                        made up of small segments of speech sounds and 
                        that certain letters regularly represent such 
                        speech sounds;
                            ``(iii) spoken vocabulary and oral 
                        comprehension abilities; and
                            ``(iv) understanding of semiotic concepts.
            ``(2) Optional activities.--An eligible applicant that 
        receives a grant under this subpart may use the funds provided 
        under the grant to carry out the following activities:
                    ``(A) Using scientific research-based screening 
                tools or other appropriate measures to determine 
                whether preschool children are developing the skills 
                identified in this subsection.
                    ``(B) Integrating such instructional materials and 
                literacy activities with programs of existing child 
                care agencies or programs, preschools, and Head Start 
                centers, and with family literacy services.
    ``(f) Award Amounts.--The Secretary may establish a maximum award 
amount, or ranges of award amounts, for grants under this subpart.

``SEC. 1223. 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 programs under the Head Start Act (42 U.S.C. 9831 et 
seq.).

``SEC. 1224. 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, 
including information on--
            ``(1) the research-based instruction, materials, and 
        activities being used in the programs funded under the grant;
            ``(2) the types of programs funded under the grant and the 
        ages of children served by such programs;
            ``(3) the qualifications of the program staff who provide 
        early literacy instruction under such programs and the type of 
        ongoing professional development provided to such staff; and
            ``(4) the curricula, materials, and activities used by the 
        programs funded under the grant to support children's reading 
        development.

``SEC. 1225. EVALUATION.

    ``From the total amount made available under section 1002(b)(2) for 
the period beginning October 1, 2002, and ending September 30, 2006, 
the Secretary shall reserve not more than $1,000,000 to conduct an 
independent evaluation of the effectiveness of this subpart.

``SEC. 1226. ADDITIONAL RESEARCH.

    ``From the amount made available under section 1002(b)(2) for each 
of the fiscal years 2002 through 2006, the Secretary shall reserve not 
more than $3,000,000 to conduct, in consultation with the 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 
children aged 3 through 5.''.

SEC. 112. AMENDMENTS TO EVEN START.

    Part B of title I (20 U.S.C. 6361 et seq.), as amended by section 
111, is further amended--
            (1) by inserting before section 1231 (as so redesignated by 
        section 111) the following:

``Subpart 3--William F. Goodling Even Start Family Literacy Programs'';

            (2) in each of sections 1231 through 1242 (as so 
        redesignated by section 111)--
                    (A) by striking ``this part'' each place such term 
                appears and inserting ``this subpart''; and
                    (B) by striking ``1002(b)'' each place such term 
                appears and inserting ``1002(b)(3)'';
            (3) in section 1231(4), by striking ``2252)'' and inserting 
        ``1209)'';
            (4) in section 1232--
                    (A) in subsection (b)--
                            (i) in paragraph (1)(A), by striking 
                        ``1209;'' and inserting ``1239;''; and
                            (ii) in paragraph (2), by striking 
                        ``1211(b)'' each place such term appears and 
                        inserting ``1241(b)''; and
                    (B) in subsection (c)--
                            (i) by amending paragraph (2)(C) to read as 
                        follows:
                    ``(C) Coordination with subpart 1.--The consortium 
                shall coordinate its activities with the activities of 
                the reading and literacy partnership for the State 
                established under section 1204(d), if the State 
                receives a grant under section 1203.''; and
                            (ii) in paragraph (3), by striking 
                        ``2252).'' and inserting ``1209).'';
            (5) in section 1233--
                    (A) by striking ``1202(d)(1)'' each place such term 
                appears and inserting ``1232(d)(1)''; and
                    (B) by striking ``1210.'' and inserting ``1240.'';
            (6) in section 1234--
                    (A) in subsection (b)--
                            (i) in paragraph (1)(A), by moving the 
                        margins of clauses (v) and (vi) 2 ems to the 
                        right; and
                            (ii) in paragraph (3), by striking 
                        ``1202(a)(1)(C)'' and inserting 
                        ``1232(a)(1)(C)''; and
                    (B) in subsection (c)--
                            (i) in paragraph (1)--
                                    (I) by striking ``1203(a),'' and 
                                inserting ``1233(a),''; and
                                    (II) by striking ``1203(b)'' and 
                                inserting ``1233(b)''; and
                            (ii) in paragraph (2), by striking 
                        ``1210.'' and inserting ``1240.'';
            (7) in section 1235--
                    (A) in paragraph (10), by striking ``2252)'' and 
                inserting ``1209)'';
                    (B) in paragraph (12), by striking ``2252),'' and 
                inserting ``1209),''; and
                    (C) in paragraph (15), by striking ``program.'' and 
                inserting ``program to be used for program 
                improvement.'';
            (8) in section 1237--
                    (A) in subsection (c)(1)--
                            (i) in subparagraph (B), by striking 
                        ``1205;'' and inserting ``1235;''; and
                            (ii) in subparagraph (F), by striking 
                        ``14306;'' and inserting ``8306;''; and
                    (B) in subsection (d), by striking ``14302.'' and 
                inserting ``8302.'';
            (9) in section 1238--
                    (A) in subsection (a)(1)--
                            (i) in subparagraph (A)(ii), by striking 
                        ``1205;'' and inserting ``1235;''; and
                            (ii) in subparagraph (F), by striking 
                        ``1204(b);'' and inserting ``1234(b);''; and
                    (B) in subsection (b)--
                            (i) in paragraph (3)--
                                    (I) by striking ``1207(c)(1)(A)'' 
                                and inserting ``1237(c)(1)(A)''; and
                                    (II) by striking ``1210.'' and 
                                inserting ``1240.'';
                            (ii) in paragraph (4), by striking 
                        ``1210,'' and inserting ``1240,''; and
                            (iii) in paragraph (5)(B), by striking 
                        ``1204(b).'' and inserting ``1234(b).'';
            (10) in section 1239--
                    (A) by striking ``1202(b)(1),'' and inserting 
                ``1232(b)(1),''; and
                    (B) by striking ``1205(10)'' and inserting 
                ``1235(10)''; and
            (11) in section 1241--
                    (A) in subsection (b)(1)--
                            (i) by striking ``1202(b)(2),'' and 
                        inserting ``1232(b)(2),''; and
                            (ii) by striking ``2252);'' and inserting 
                        ``1209);''; and
                    (B) in subsection (c), by striking ``2258,'' and 
                inserting ``1208,''.

SEC. 113. INEXPENSIVE BOOK DISTRIBUTION PROGRAM.

    (a) Transfer and Redesignation.--Part E of title X (20 U.S.C. 8131) 
is transferred and redesignated as subpart 4 of part B of title I. 
Section 10501 is redesignated as section 1251.
    (b) Purpose.--Section 1251 (as so redesignated) is amended--
            (1) by striking subsection (e);
            (2) by redesignating subsection (d) as subsection (g);
            (3) by redesignating subsections (a) through (c) as 
        subsections (b) through (d), respectively; and
            (4) by inserting before subsection (b) (as so redesignated) 
        the following:
    ``(a) Purpose.--The purpose of this program is to establish and 
implement a model partnership between a governmental entity and a 
private entity, to help prepare young children for reading, and 
motivate older children to read, through the distribution of 
inexpensive books. Local reading motivation programs assisted under 
this section shall use such assistance to provide books, training for 
volunteers, motivational activities, and other essential literacy 
resources, and shall assign the highest priority to serving the 
youngest and neediest children in the United States.''.
    (c) Authorization.--Section 1251(b) (as so redesignated) is amended 
by striking ``books to students, that motivate children to read.'' and 
inserting ``books to young and school-aged children that motivate them 
to read.''.
    (d) Requirements of Contract.--Section 1251(c) (as so redesignated) 
is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``subsection (a)'' and inserting ``subsection (b)''; and
            (2) in paragraph (4), by inserting ``training and'' before 
        ``technical''.
    (e) Special Rules for Certain Subcontractors; Multi-year 
Contracts.--Section 1251 (as so redesignated) is amended by inserting 
after subsection (d) the following:
    ``(e) Special Rules for Certain Subcontractors.--
            ``(1) Funds from other federal sources.--Subcontractors 
        operating programs under this section in low-income communities 
        with a substantial number or percentage of children with 
        special needs, as described in subsection (c)(3), may use funds 
        from other Federal sources to pay the non-Federal share of the 
        cost of the program, if those funds do not comprise more than 
        50 percent of the non-Federal share of the funds used for the 
        cost of acquiring and distributing books.
            ``(2) Waiver Authority.--Notwithstanding subsection (c), 
        the contractor may waive, in whole or in part, the requirement 
        in subsection (c)(1) for a subcontractor, if the subcontractor 
        demonstrates that it would otherwise not be able to participate 
        in the program, and enters into an agreement with the 
        contractor with respect to the amount of the non-Federal share 
        to which the waiver will apply. In a case in which such a 
        waiver is granted, the requirement in subsection (c)(2) shall 
        not apply.
    ``(f) Multi-year Contracts.--The contractor may enter into a multi-
year subcontract under this section, if--
            ``(1) the contractor believes that such subcontract will 
        provide the subcontractor with additional leverage in seeking 
        local commitments; and
            ``(2) the subcontract does not undermine the finances of 
        the national program.''.
    (f) Continuation of Awards.--Notwithstanding any other provision of 
this Act, any person or agency that was awarded a contract under part E 
of title X (20 U.S.C. 8131) prior to the date of the enactment of this 
Act shall continue to receive funds in accordance with the terms of 
such contract until the date on which the contract period terminates 
under such terms.

                PART C--EDUCATION OF MIGRATORY CHILDREN

SEC. 121. STATE ALLOCATIONS.

    Section 1303 (20 U.S.C. 6393) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) State Allocations.--
            ``(1) Fiscal year 2002.--For fiscal year 2002, each State 
        (other than the Commonwealth of Puerto Rico) is entitled to 
        receive under this part an amount equal to--
                    ``(A) the sum of the estimated number of migratory 
                children aged three through 21 who reside in the State 
                full time and the full-time equivalent of the estimated 
                number of migratory children aged three through 21 who 
                reside in the State part time, as determined in 
                accordance with subsection (d); multiplied by
                    ``(B) 40 percent of the average per-pupil 
                expenditure in the State, except that the amount 
                determined under this paragraph shall not be less than 
                32 percent, nor more than 48 percent, of the average 
                expenditure per pupil in the United States.
            ``(2) Subsequent years.--
                    ``(A) Base amount.--
                            ``(i) In general.--Except as provided in 
                        subsection (b) and clause (ii), each State 
                        (other than the Commonwealth of Puerto Rico) is 
                        entitled to receive under this part, for fiscal 
                        year 2003 and succeeding fiscal years, an 
                        amount equal to--
                                    ``(I) the amount that such State 
                                received under this part for fiscal 
                                year 2002; plus
                                    ``(II) the amount allocated to the 
                                State under subparagraph (B).
                            ``(ii) Nonparticipating states.--In the 
                        case of a State (other than the Commonwealth of 
                        Puerto Rico) that did not receive any funds for 
                        fiscal year 2002 under this part, the State 
                        shall receive, for fiscal year 2003 and 
                        succeeding fiscal years, an amount equal to--
                                    ``(I) the amount that such State 
                                would have received under this part for 
                                fiscal year 2002 if its application 
                                under section 1304 for the year had 
                                been approved; plus
                                    ``(II) the amount allocated to the 
                                State under subparagraph (B).
                    ``(B) Allocation of additional amount.--For fiscal 
                year 2003 and succeeding fiscal years, the amount (if 
                any) by which the funds appropriated to carry out this 
                part for the year exceed such funds for fiscal year 
                2002 shall be allocated to a State (other than the 
                Commonwealth of Puerto Rico) so that the State receives 
                an amount equal to--
                            ``(i) the sum of--
                                    ``(I) the number of identified 
                                eligible migratory children, aged 3 
                                through 21, residing in the State 
                                during the previous year; and
                                    ``(II) the number of identified 
                                eligible migratory children, aged 3 
                                through 21, who received services under 
                                this part in summer or intersession 
                                programs provided by the State during 
                                such year; multiplied by
                            ``(ii) 40 percent of the average per-pupil 
                        expenditure in the State, except that the 
                        amount determined under this clause may not be 
                        less than 32 percent, or more than 48 percent, 
                        of the average per-pupil expenditure in the 
                        United States.'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Allocation to Puerto Rico.--
            ``(1) In general.--For each fiscal year, the grant which 
        the Commonwealth of Puerto Rico shall be eligible to receive 
        under this part shall be the amount determined by multiplying 
        the number of children counted under subsection (a)(1)(A) for 
        the Commonwealth of Puerto Rico by the product of--
                    ``(A) 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; and
                    ``(B) 32 percent of the average per pupil 
                expenditure in the United States.
            ``(2) Minimum percentage.--The percentage in paragraph 
        (1)(A) shall not be less than--
                    ``(A) for fiscal year 2002, 77.5 percent;
                    ``(B) for fiscal year 2003, 80.0 percent;
                    ``(C) for fiscal year 2004, 82.5 percent; and
                    ``(D) for fiscal year 2005 and succeeding fiscal 
                years, 85.0 percent.
            ``(3) Limitation.--If the application of paragraph (2) 
        would result in any of the 50 States or the District of 
        Columbia receiving less under this part than it received under 
        this part for the preceding fiscal year, the percentage in 
        paragraph (1) shall be the greater of the percentage in 
        paragraph (1)(A) or the percentage used for the preceding 
        fiscal year.''; and
            (3) by striking subsection (d) and redesignating subsection 
        (e) as subsection (d).

SEC. 122. STATE APPLICATIONS; SERVICES.

    (a) Program Information.--Section 1304(b) (20 U.S.C. 6394(b)) is 
amended--
            (1) in paragraph (1), by striking ``addressed through'' and 
        all that follows through the semicolon at the end and inserting 
        the following:
        ``addressed through--
                    ``(A) the full range of services that are available 
                for migratory children from appropriate local, State, 
                and Federal educational programs;
                    ``(B) joint planning among local, State, and 
                Federal educational programs serving migrant children, 
                including programs under part A of title III;
                    ``(C) the integration of services available under 
                this part with services provided by those other 
                programs; and
                    ``(D) measurable program goals and outcomes;''; and
            (2) in paragraph (5), by striking ``the requirements of 
        paragraph (1);'' and inserting ``the numbers and needs of 
        migratory children, the requirements of subsection (d), and the 
        availability of funds from other Federal, State, and local 
        programs;''.
    (b) Assurances.--Section 1304(c) (20 U.S.C. 6394(c)) is amended--
            (1) in paragraph (1), by striking ``1306(b)(1);'' and 
        inserting ``1306(a);'';
            (2) in paragraph (2), by striking ``part F;'' and inserting 
        ``part H;''
            (3) in paragraph (3)--
                    (A) by striking ``appropriate'';
                    (B) by striking ``out, to the extent feasible,'' 
                and inserting ``out''; and
                    (C) by striking ``1118;'' and inserting ``1118, 
                unless extraordinary circumstances make implementation 
                consistent with such section impractical;''; and
            (4) in paragraph (7), by striking ``section 1303(e)'' and 
        inserting ``paragraphs (1)(A) and (2)(B)(i) of section 
        1303(a)''.

SEC. 123. AUTHORIZED ACTIVITIES.

    Section 1306 (20 U.S.C. 6396) is amended to read as follows:

``SEC. 1306. AUTHORIZED ACTIVITIES.

    ``(a) In General.--
            ``(1) Flexibility.--Each State educational agency, through 
        its local educational agencies, shall have the flexibility to 
        determine the activities to be provided with funds made 
        available under this part, except that such funds shall first 
        be used to meet the identified needs of migratory children that 
        result from their migratory lifestyle, and to permit these 
        children to participate effectively in school.
            ``(2) Unaddressed needs.--Funds provided under this part 
        shall be used to address the needs of migratory children that 
        are not addressed by services available from other Federal or 
        non-Federal programs, except that migratory children who are 
        eligible to receive services under part A of this title may 
        receive those services through funds provided under that part, 
        or through funds under this part that remain after the agency 
        addresses the needs described in paragraph (1).
    ``(b) Construction.--Nothing in this part shall be construed to 
prohibit a local educational agency from serving migratory children 
simultaneously with students with similar educational needs in the same 
educational settings, where appropriate.
    ``(c) Special Rule.--Notwithstanding section 1114, a school that 
receives funds under this part shall continue to address the identified 
needs described in subsection (a)(1).''.

SEC. 124. COORDINATION OF MIGRANT EDUCATION ACTIVITIES.

    (a) Duration.--Section 1308(a)(2) (20 U.S.C. 6398(a)(2)) is amended 
by striking ``subpart'' and inserting ``subsection''.
    (b) Student Records.--Section 1308(b) (20 U.S.C. 6398(b)) is 
amended to read as follows:
    ``(b) Student Records.--
            ``(1) Assistance.--The Secretary shall assist States in 
        developing effective methods for the transfer of student 
        records and in determining the number of migratory children in 
        each State. The Secretary, in consultation with the States, 
        shall determine the minimum data elements that each State 
        receiving funds under this part shall collect and maintain. The 
        Secretary shall assist States to implement a system of linking 
        their student record transfer systems for the purpose of 
        electronic records maintenance and transfer for migrant 
        students.
            ``(2) No cost for certain transfers.--A State educational 
        agency or local educational agency receiving assistance under 
        this part shall make student records available to another State 
        or local educational agency that requests the records at no 
        cost to the requesting agency, if the request is made in order 
        to meet the needs of a migratory child.''.
    (c) Availability of Funds.--Section 1308(c) (20 U.S.C. 6398(c)) is 
amended by striking ``$6,000,000'' and inserting ``$10,000,000''.
    (d) Incentive Grants.--Section 1308(d) (20 U.S.C. 6398(d)) is 
amended to read as follows:
    ``(d) Incentive Grants.--From the amounts made available to carry 
out this section for any fiscal year, the Secretary may reserve not 
more than $3,000,000 to award grants of not more than $250,000 on a 
competitive basis to State educational agencies that propose a 
consortium arrangement with another State or other appropriate entity 
that the Secretary determines, pursuant to criteria that the Secretary 
shall establish, will improve the delivery of services to migratory 
children whose education is interrupted.''.

                 PART D--NEGLECTED OR DELINQUENT YOUTH

SEC. 131. NEGLECTED OR DELINQUENT YOUTH.

    The heading for part D of title I is amended to read as follows:

    ``PART D--PREVENTION AND INTERVENTION PROGRAMS FOR NEGLECTED OR 
                    DELINQUENT CHILDREN AND YOUTH''.

SEC. 132. FINDINGS.

    Section 1401(a) (20 U.S.C. 6421(a)) is amended by striking 
paragraphs (6) through (9) and inserting the following:
            ``(6) Youth returning from correctional facilities need to 
        be involved in programs that provide them with high-level 
        skills and other support to help them stay in school and 
        complete their education.
            ``(7) Pregnant and parenting teenagers are a high-at-risk 
        group for dropping out of school and should be targeted by 
        dropout prevention programs.''.

SEC. 133. ALLOCATION OF FUNDS.

    Section 1412(b) (20 U.S.C. 6432(b)) is amended to read as follows:
    ``(b) Subgrants to State Agencies in Puerto Rico.--
            ``(1) In general.--For each fiscal year, the amount of the 
        subgrant which a State agency in the Commonwealth of Puerto 
        Rico shall be eligible to receive under this part shall be the 
        amount determined by multiplying the number of children counted 
        under subparagraph (a)(1)(A) for the Commonwealth of Puerto 
        Rico by the product of--
                    ``(A) 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; and
                    ``(B) 32 percent of the average per-pupil 
                expenditure in the United States.
            ``(2) Minimum percentage.--The percentage in paragraph 
        (1)(A) shall not be less than--
                    ``(A) for fiscal year 2002, 77.5 percent;
                    ``(B) for fiscal year 2003, 80.0 percent;
                    ``(C) for fiscal year 2004, 82.5 percent; and
                    ``(D) for fiscal year 2005 and succeeding fiscal 
                years, 85.0 percent.
            ``(3) Limitation.--If the application of paragraph (2) 
        would result in any of the 50 States or the District of 
        Columbia receiving less under this part than it received under 
        this part for the preceding fiscal year, the percentage in 
        paragraph (1) shall be the greater of the percentage in 
        paragraph (1)(A) or the percentage used for the preceding 
        fiscal year.''.

SEC. 134. STATE PLAN AND STATE AGENCY APPLICATIONS.

    Section 1414 (20 U.S.C. 6434) is amended to read as follows:

``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 part shall submit, for 
        approval by the Secretary, a plan for meeting the educational 
        needs of neglected and delinquent youth, for assisting in their 
        transition from institutions to locally operated programs, and 
        which is integrated with other programs under this Act or other 
        Acts, as appropriate, consistent with section 8306.
            ``(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 and technical 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 part will be carried out in accordance 
                        with the State plan described in this 
                        subsection;
                            ``(ii) carry out the evaluation 
                        requirements of section 1416;
                            ``(iii) ensure that the State agencies 
                        receiving subgrants under this subpart 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 such 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.
    ``(b) Secretarial Approval and Peer Review.--
            ``(1) Secretarial approval.--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 part 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 facilities, 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 under this subpart;
            ``(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 the 
        evaluation requirements of section 8651 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 
        fiscal effort required of a local educational agency, in 
        accordance with section 8501;
            ``(8) describes how the programs will be coordinated with 
        other appropriate State and Federal programs, such as job 
        training programs, vocational and technical education programs, 
        State and local dropout prevention programs, and special 
        education programs;
            ``(9) describes how States will encourage correctional 
        facilities receiving funds under this subpart to coordinate 
        with local educational agencies or alternative education 
        programs attended by incarcerated youth prior to their 
        incarceration to ensure that student assessments and 
        appropriate academic records are shared jointly between the 
        correctional facility and the local educational agency or 
        alternative education program;
            ``(10) describes how appropriate professional development 
        will be provided to teachers and other staff;
            ``(11) 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;
            ``(12) describes how the agency will endeavor to coordinate 
        with businesses for training and mentoring for participating 
        youth;
            ``(13) 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;
            ``(14) 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;
            ``(15) 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 such 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;
            ``(16) 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 
        incarceration 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 the 
        recognized equivalent if the youth does not intend to return to 
        school;
            ``(17) 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;
            ``(18) describes any additional services to be provided to 
        youth, such as career counseling, distance learning, and 
        assistance in securing student loans and grants; and
            ``(19) provides assurances that the program under this 
        subpart will be coordinated with any programs operated under 
        the Juvenile Justice and Delinquency Prevention Act of 1974 (42 
        U.S.C. 5601 et seq.) or other comparable programs, if 
        applicable.''.

SEC. 135. USE OF FUNDS.

    Section 1415(a) (20 U.S.C. 6435(a)) is amended--
            (1) in paragraph (1)(B), by inserting ``, vocational and 
        technical training'' after ``secondary school completion'';
            (2) in paragraph (2)(B)--
                    (A) in clause (i), by inserting ``and'' after the 
                semicolon;
                    (B) in clause (ii), by striking ``; and'' and 
                inserting a semicolon; and
                    (C) by striking clause (iii);
            (3) in paragraph (2)(C), by striking ``part F of this 
        title'' and inserting ``part H''; and
            (4) in paragraph (2)(D), by striking ``section 14701'' and 
        inserting ``section 8651''.

SEC. 136. TRANSITION SERVICES.

    Section 1418(a) (20 U.S.C. 6438(a)) is amended by striking ``10 
percent'' and inserting ``15 percent''.

SEC. 137. PURPOSE.

    Section 1421(3) (20 U.S.C. 6451(3)) is amended to read as follows:
            ``(3) operate programs in local schools for youth returning 
        from correctional facilities and programs which may also serve 
        youth at risk of dropping out of school.''.

SEC. 138. PROGRAMS OPERATED BY LOCAL EDUCATIONAL AGENCIES.

    Section 1422 (20 U.S.C. 6452) is amended--
            (1) in subsection (a), by striking ``retained'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Special Rule.--A local educational agency which includes a 
correctional facility that operates a school is not required to operate 
a program of support for children returning from such school to a 
school not operated by a correctional agency but served by such local 
educational agency if more than 30 percent of the youth attending the 
school operated by the correctional facility will reside outside the 
boundaries of the local educational agency after leaving such 
facility.''; and
            (3) by adding at the end the following:
    ``(d) Transitional and Academic Services.--Transitional and 
supportive programs operated in local educational agencies under this 
subpart shall be designed primarily to meet the transitional and 
academic needs of students returning to local educational agencies or 
alternative education programs from correctional facilities. Services 
to students at risk of dropping out of school shall not have a negative 
impact on meeting the transitional and academic needs of the students 
returning from correctional facilities.''.

SEC. 139. LOCAL EDUCATIONAL AGENCY APPLICATIONS.

    Section 1423 (20 U.S.C. 6453) is amended by striking paragraphs (4) 
through (9) and inserting the following:
            ``(4) a description of the program operated by 
        participating schools for children returning from correctional 
        facilities and the types of services that such schools will 
        provide such youth and other at-risk youth;
            ``(5) a description of the characteristics (including 
        learning difficulties, substance abuse problems, and other 
        special needs) of the youth who will be returning from 
        correctional facilities and, as appropriate, other at-risk 
        youth expected to be served by the program and how the school 
        will coordinate existing educational programs to meet the 
        unique educational needs of such youth;
            ``(6) as appropriate, a description of how schools will 
        coordinate with existing social, health, and other services to 
        meet the needs of students returning from correctional 
        facilities, 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 reentry and outreach programs, referrals to community 
        resources, and scheduling flexibility;
            ``(7) as appropriate, a description of any partnerships 
        with local businesses to develop training, curriculum-based 
        youth entrepreneurship education, and mentoring services for 
        participating students;
            ``(8) as appropriate, a description of how programs will 
        involve parents in efforts to improve the educational 
        achievement of their children, prevent the involvement of their 
        children in delinquent activities, and encourage their children 
        to remain in school and complete their education;
            ``(9) a description of how the program under this subpart 
        will be coordinated with other Federal, State, and local 
        programs, such as job training programs and vocational and 
        technical education programs serving this at-risk population of 
        youth;''.

SEC. 140. USES OF FUNDS.

    Section 1424 (20 U.S.C. 6454) is amended by striking paragraphs (1) 
through (3) and inserting the following:
            ``(1) programs that serve youth returning from correctional 
        facilities to local schools, to assist in the transition of 
        such youth to the school environment and help them remain in 
        school in order to complete their education;
            ``(2) providing assistance to other youth at risk of 
        dropping out of school, including pregnant and parenting 
        teenagers;
            ``(3) the coordination of social, health, and other 
        services, including day care, for participating youth, if the 
        provision of such services will improve the likelihood that 
        such youth will complete their education;
            ``(4) special programs to meet the unique academic needs of 
        participating youth, including vocational and technical 
        education, special education, career counseling, curriculum-
        based youth entrepreneurship education, and assistance in 
        securing student loans or grants for postsecondary education; 
        and
            ``(5) programs providing mentoring and peer mediation.''.

SEC. 141. PROGRAM REQUIREMENTS.

    Section 1425 (20 U.S.C. 6455) is amended--
            (1) in the section heading, by striking ``this section'' 
        and inserting ``this subpart'';
            (2) in the matter preceding paragraph (1), by striking 
        ``this section'' and inserting ``this subpart'';
            (3) in paragraph (1), by striking ``where feasible, ensure 
        educational programs'' and inserting ``to the extent 
        practicable, ensure that educational programs'';
            (4) in paragraphs (3) and (8), by striking ``where 
        feasible,'' and inserting ``to the extent practicable,'';
            (5) in paragraph (9)--
                    (A) by striking ``this program'' and inserting 
                ``this subpart'';
                    (B) by inserting ``and technical'' after 
                ``vocational''; and
                    (C) by striking ``title I of the Workforce 
                Investment Act of 1998'' and inserting ``other job 
                training programs'';
            (6) in paragraph (10), by inserting ``(42 U.S.C. 5601 et 
        seq.)'' after ``Juvenile Justice and Delinquency Prevention Act 
        of 1974''; and
            (7) by amending paragraph (11) to read as follows:
            ``(11) if appropriate, work with local businesses to 
        develop training, curriculum-based youth entrepreneurship 
        education, and mentoring programs for youth.''.

SEC. 142. PROGRAM EVALUATIONS.

    Section 1431(a) (20 U.S.C. 6471(a)) is amended by striking ``sex, 
and if feasible,'' and inserting ``gender,''.

             PART E--FEDERAL EVALUATIONS AND DEMONSTRATIONS

SEC. 151. EVALUATIONS.

    Section 1501 (20 U.S.C. 6491) is amended to read as follows:

``SEC. 1501. EVALUATIONS.

    ``(a) National Assessment.--
            ``(1) In general.--In accordance with this section, the 
        Secretary shall conduct a national assessment of programs 
        assisted under this title.
            ``(2) Issues to be examined.--In conducting the assessment 
        under this subsection, the Secretary shall examine--
                    ``(A) the implementation of programs assisted under 
                this title and the impact of such implementation on 
                increasing student academic achievement, particularly 
                schools with high concentrations of children living in 
                poverty;
                    ``(B) the implementation of State standards, 
                assessments, and accountability systems developed under 
                this title and the impact of such implementation on 
                educational programs and instruction at the local 
                level;
                    ``(C) the impact of schoolwide programs and 
                targeted assistance programs under this title on 
                improving student academic achievement;
                    ``(D) the extent to which varying models of 
                comprehensive school reform are funded under this 
                title, and the effect of the implementation of such 
                models on improving achievement of disadvantaged 
                students;
                    ``(E) the costs as compared to the benefits of the 
                activities assisted under this title;
                    ``(F) the impact of school choice options under 
                section 1116 on the academic achievement of 
                disadvantaged students, on schools in school 
                improvement, and on schools from which students have 
                transferred under such options;
                    ``(G) the extent to which actions authorized under 
                section 1116 of this title are employed by State and 
                local educational agencies to improve the academic 
                achievement of students in low-performing schools, and 
                the effectiveness of the implementation of such 
                actions;
                    ``(H) the extent to which technical assistance made 
                available under this title is used to improve the 
                achievement of students in low-performing schools, and 
                the impact of such assistance on such achievement;
                    ``(I) the extent to which State and local fiscal 
                accounting requirements under this title limit the 
                flexibility of schoolwide programs;
                    ``(J) the impact of the professional development 
                activities assisted under this title on instruction and 
                student performance;
                    ``(K) the extent to which the assistance made 
                available under this title is targeted to disadvantaged 
                students and schools that need them the most;
                    ``(L) the effectiveness of Federal administration 
                assistance made available under this title, including 
                monitoring and technical assistance; and
                    ``(M) such other issues as the Secretary considers 
                appropriate.
            ``(3) Sources of information.--In conducting the assessment 
        under this subsection, the Secretary shall use information from 
        a variety of sources, including the National Assessment of 
        Educational Progress (carried out under section 411 of the 
        National Education Statistics Act of 1994 (20 U.S.C. 9010)), 
        state evaluations, and other research studies.
            ``(4) Coordination.--In carrying out this subsection, the 
        Secretary shall--
                    ``(A) coordinate conducting the national assessment 
                with conducting the longitudinal study described in 
                subsection (c); and
                    ``(B) ensure that the independent review panel 
                described in subsection (d) participates in conducting 
                the national assessment, including planning for and 
                reviewing the assessment.
            ``(5) Reports.--
                    ``(A) Interim report.--Not later than 3 years after 
                the date of enactment of the Leave No Child Behind Act 
                of 2001, the Secretary shall transmit to the President 
                and the Congress an interim report on the national 
                assessment conducted under this subsection.
                    ``(B) Final report.--Not later than 4 years after 
                the date of enactment of the Leave No Child Behind Act 
                of 2001, the Secretary shall transmit to the President 
                and the Congress a final report on the national 
                assessment conducted under this subsection.
    ``(b) Studies and Data Collection.--
            ``(1) In general.--In addition to other activities 
        described in this section, the Secretary may, directly or 
        through the making of grants to or contracts with appropriate 
        entities--
                    ``(A) conduct studies and evaluations of the need 
                for, and effectiveness of, each program authorized 
                under this title;
                    ``(B) collect the data necessary to comply with the 
                Government Performance and Results Act of 1993; and
                    ``(C) provide guidance and technical assistance to 
                State educational agencies and local educational 
                agencies in developing and maintaining management 
                information systems through which such agencies can 
                develop program performance indicators in order to 
                improve services and performance.
            ``(2) Minimum information.--Under this subsection, the 
        Secretary shall collect, at a minimum, trend information on the 
        effect of each program authorized under this title, which shall 
        complement the data collected and reported under subsections 
        (a) and (c).
    ``(c) National Longitudinal Study.--
            ``(1) In general.--The Secretary shall conduct a 
        longitudinal study of schools receiving assistance under this 
        title.
            ``(2) Issues to be examined.--In carrying out this 
        subsection, the Secretary shall ensure that the study referred 
        to in paragraph (1) provides the Congress and educators with 
        each of the following:
                    ``(A) An accurate description and analysis of 
                short-term and long-term effectiveness of the 
                assistance made available under this title upon 
                academic performance.
                    ``(B) Information that can be used to improve the 
                effectiveness of the assistance made available under 
                this title in enabling students to meet challenging 
                achievement standards.
                    ``(C) An analysis of educational practices or model 
                programs that are effective in improving the 
                achievement of disadvantaged children.
                    ``(D) An analysis of the costs as compared to the 
                benefits of the assistance made available under this 
                title in improving the achievement of disadvantaged 
                children.
                    ``(E) An analysis of the effects of the 
                availability of school choice options under section 
                1116 on the academic achievement of disadvantaged 
                students, on schools in school improvement, and on 
                schools from which students have transferred under such 
                options.
                    ``(F) Such other information as the Secretary 
                considers appropriate.
            ``(3) Scope.--In conducting the study referred to in 
        paragraph (1), the Secretary shall ensure that the study--
                    ``(A) bases its analysis on a nationally 
                representative sample of schools participating in 
                programs under this part;
                    ``(B) to the extent practicable, includes in its 
                analysis students who transfer to different schools 
                during the course of the study; and
                    ``(C) analyzes varying models or strategies for 
                delivering school services, including--
                            ``(i) schoolwide and targeted services; and
                            ``(ii) comprehensive school reform models.
    ``(d) Independent Review Panel.--
            ``(1) In general.--The Secretary shall establish an 
        independent review panel (in this subsection referred to as the 
        `Review Panel') to advise the Secretary on methodological and 
        other issues that arise in carrying out subsections (a) and 
        (c).
            ``(2) Appointment of members.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall appoint members of the Review Panel 
                from among qualified individuals who are--
                            ``(i) specialists in statistics, 
                        evaluation, research, and assessment;
                            ``(ii) education practitioners, including 
                        teachers, principals, and local and State 
                        superintendents; and
                            ``(iii) other individuals with technical 
                        expertise who would contribute to the overall 
                        rigor and quality of the program evaluation.
                    ``(B) Limitations.--In appointing members of the 
                Review Panel under this subparagraph (A), the Secretary 
                shall ensure that--
                            ``(i) in order to ensure diversity, a 
                        majority of the number of individuals appointed 
                        under subparagraph (A)(i) represent disciplines 
                        or programs outside the field of education; and
                            ``(ii) the total number of the individuals 
                        appointed under subparagraph (A)(ii) or 
                        (A)(iii) does not exceed \1/3\ of the total 
                        number of the individuals appointed under this 
                        paragraph.
            ``(3) Functions.--The Review Panel shall consult with and 
        advise the Secretary--
                    ``(A) to ensure that the assessment conducted under 
                subsection (a) and the study conducted under subsection 
                (c)--
                            ``(i) adhere to the highest possible 
                        standards of quality with respect to research 
                        design, statistical analysis, and the 
                        dissemination of findings; and
                            ``(ii) use valid and reliable measures to 
                        document program implementation and impacts; 
                        and
                    ``(B) to ensure--
                            ``(i) that the final report described in 
                        subsection (a)(5)(B) is reviewed not later than 
                        120 days after its completion by not less than 
                        two independent experts in program evaluation;
                            ``(ii) that such experts evaluate and 
                        comment on the degree to which the report 
                        complies with subsection (a); and
                            ``(iii) that the comments of such experts 
                        are transmitted with the report under 
                        subsection (a)(5)(B).''.

SEC. 152. DEMONSTRATIONS OF INNOVATIVE PRACTICES.

    (a) In General.--Section 1502 (20 U.S.C. 6492) is amended--
            (1) by redesignating subsection (b) as subsection (c);
            (2) by striking in subsection (a) ``(2) Evaluation.--The 
        Secretary'' and inserting ``(b) Evaluation.--The Secretary'' 
        and by moving such subsection (b) 2 ems to the left;
            (3) by striking in subsection (a) ``Such projects shall 
        include promising'' and all that follows through ``career 
        guidance opportunities.'';
            (4) by striking ``student performance standards'' and 
        inserting ``student achievement standards'';
            (5) by inserting ``academic'' after ``to meet challenging 
        State''; and
            (6) by striking ``(a) Demonstration Programs'' and all that 
        follows through ``In general.--From the'' and inserting ``(a) 
        In General.--From the''.

SEC. 153. ELLENDER-CLOSE UP FELLOWSHIP PROGRAM; DROPOUT REPORTING.

    (a) In General.--Part E of title I (20 U.S.C. 6491 et seq.) is 
further amended by adding at the end the following:

``SEC. 1503. ELLENDER-CLOSE UP FELLOWSHIP PROGRAM.

    ``(a) Findings.--Congress finds the following:
            ``(1) It is a worthwhile goal to ensure that all students 
        in America are prepared for responsible citizenship and that 
        all students should have the opportunity to be involved in 
        activities that promote and demonstrate good citizenship.
            ``(2) It is a worthwhile goal to ensure that America's 
        educators have access to programs for the continued improvement 
        of their professional skills.
            ``(3) Allen J. Ellender, a Senator from Louisiana and 
        President pro tempore of the United States Senate, had a 
        distinguished career in public service characterized by 
        extraordinary energy and real concern for young people. Senator 
        Ellender provided valuable support and encouragement to the 
        Close Up Foundation, a nonpartisan, nonprofit foundation 
        promoting knowledge and understanding of the Federal Government 
        among young people and educators. Therefore, it is a fitting 
        and appropriate tribute to Senator Ellender to provide 
        fellowships in his name to students of limited economic means 
        and the teachers who work with such students, so that such 
        students and teachers may participate in the programs supported 
        by the Close Up Foundation.
            ``(4) The Close Up Foundation is a nonpartisan, nonprofit, 
        education foundation promoting civic responsibility and 
        knowledge and understanding of the Federal Government among 
        young people and educators. The Congress has consistently 
        supported the Close Up Foundation's work with disadvantaged 
        young people and their educators through the Allen J. Ellender 
        Fellowship Program. Therefore, it is fitting and appropriate to 
        continue support under the successor Ellender-Close Up 
        Fellowship Program to students of limited economic means and 
        the teachers who work with such students, so that such students 
        and teachers may participate in the programs supported by the 
        Close Up Foundation.
    ``(b) Program for Middle and Secondary School Students.--
            ``(1) Establishment.--
                    ``(A) General authority.--In accordance with this 
                subsection, the Secretary may make grants to the Close 
                Up Foundation of Washington, District of Columbia, a 
                nonpartisan, nonprofit foundation, for the purpose of 
                assisting the Close Up Foundation in carrying out its 
                programs of increasing civic responsibility and 
                understanding of the Federal Government among middle 
                and secondary school students.
                    ``(B) Use of funds.--Grants under this subsection 
                shall be used only to provide financial assistance to 
                economically disadvantaged students who participate in 
                the program described in subparagraph (A). Financial 
                assistance received pursuant to this subsection by such 
                students shall be known as Ellender-Close Up 
                fellowships.
            ``(2) Applications.--
                    ``(A) Application required.--No grant under this 
                subsection may be made except upon an application at 
                such time, in such manner, and accompanied by such 
                information as the Secretary may reasonably require.
                    ``(B) Contents of application.--Each application 
                submitted under this paragraph shall contain provisions 
                to assure--
                            ``(i) that fellowship grants are made to 
                        economically disadvantaged middle and secondary 
                        school students;
                            ``(ii) that every effort will be made to 
                        ensure the participation of students from rural 
                        and small town areas, as well as from urban 
                        areas, and that in awarding fellowships to 
                        economically disadvantaged students, special 
                        consideration will be given to the 
                        participation of students with special 
                        educational needs, including students with 
                        disabilities, ethnic minority students, recent 
                        immigrants, and gifted and talented students; 
                        and
                            ``(iii) the proper disbursement of the 
                        funds received under this subsection.
    ``(c) Program for Middle and Secondary School Teachers.--
            ``(1) Establishment.--
                    ``(A) General authority.--In accordance with this 
                subsection, the Secretary may make grants to the Close 
                Up Foundation of Washington, District of Columbia, a 
                nonpartisan, nonprofit foundation, for the purpose of 
                assisting the Close Up Foundation in carrying out its 
                programs of professional development for middle and 
                secondary school teachers and to promote greater civic 
                understanding and responsibility among the students of 
                such teachers.
                    ``(B) Use of funds.--Grants under this subsection 
                shall be used only for financial assistance to teachers 
                who participate in the program described in 
                subparagraph (A). Financial assistance received 
                pursuant to this subpart by such individuals shall be 
                known as Ellender-Close Up fellowships.
            ``(2) Applications.--
                    ``(A) Application required.--No grant under this 
                subsection may be made except upon an application at 
                such time, in such manner, and accompanied by such 
                information as the Secretary may reasonably require.
                    ``(B) Contents of application.--Each application 
                submitted under this paragraph shall contain provisions 
                to assure--
                            ``(i) that fellowship grants are made only 
                        to teachers who have worked with at least one 
                        student from such teacher's school who 
                        participates in the programs described in 
                        subsection (b);
                            ``(ii) that no teacher in each school 
                        participating in the programs assisted under 
                        subsection (b) may receive more than one 
                        fellowship in any fiscal year; and
                            ``(iii) the proper disbursement of the 
                        funds received under this subsection.
    ``(d) Programs for Recent Immigrants and Students of Migrant 
Parents.--
            ``(1) Establishment.--
                    ``(A) General authority.--In accordance with this 
                subsection, the Secretary may make grants to the Close 
                Up Foundation of Washington, District of Columbia, a 
                nonpartisan, nonprofit foundation, for the purpose of 
                assisting the Close Up Foundation in carrying out its 
                programs of increasing understanding of the Federal 
                Government among economically disadvantaged recent 
                immigrants and students of migrant parents.
                    ``(B) Use of funds.--Grants under this subsection 
                shall be used for financial assistance to economically 
                disadvantaged older Americans, recent immigrants and 
                students of migrant parents who participate in the 
                program described in subsection (a). Financial 
                assistance received pursuant to this subpart by such 
                individuals shall be known as Ellender-Close Up 
                fellowships.
            ``(2) Applications.--
                    ``(A) Application Required.--No grant under this 
                subsection may be made except upon application at such 
                time, in such manner, and accompanied by such 
                information as the Secretary may reasonably require.
                    ``(B) Contents of Application.--Each application 
                submitted under this paragraph shall contain 
                provisions--
                            ``(i) to assure that fellowship grants are 
                        made to economically disadvantaged recent 
                        immigrants and students of migrant parents;
                            ``(ii) to assure that every effort will be 
                        made to ensure the participation of recent 
                        immigrants and students of migrant parents from 
                        rural and small town areas, as well as from 
                        urban areas, and that in awarding fellowships, 
                        special consideration will be given to the 
                        participation of recent immigrants and students 
                        of migrant parents with special needs, 
                        including individuals with disabilities, ethnic 
                        minorities, and gifted and talented students;
                            ``(iii) that fully describe the activities 
                        to be carried out with the proceeds of the 
                        grant; and
                            ``(iv) to assure the proper disbursement of 
                        the funds received under this subsection.
    ``(e) General Provisions.--
            ``(1) Administrative provisions.--
                    ``(A) General rule.--Payments under this section 
                may be made in installments, in advance, or by way of 
                reimbursement, with necessary adjustments on account of 
                underpayment or overpayment.
                    ``(B) Audit Rule.--The Comptroller General of the 
                United States or any of the Comptroller General's duly 
                authorized representatives shall have access for the 
                purpose of audit and examination to any books, 
                documents, papers, and records that are pertinent to 
                any grant under this section.
    ``(f) Limitation.--Of the funds appropriated to carry out this 
section under section 1002, the Secretary may use not more than 30 
percent to carry out subsection (c) of this section.

``SEC. 1504. DROPOUT REPORTING.

    ``State educational agencies receiving funds under this title shall 
annually report to the National Center on Education Statistics 
(established under section 403 of the National Education Statistics Act 
of 1994 (20 U.S.C. 9002)) on the dropout rate of students in the State, 
as defined for the Center's Common Core of Data.''.
    (b) Continuation of Awards.--Notwithstanding any other provision of 
this Act, any person or agency that was awarded a grant under part G of 
title X (20 U.S.C. 8161 et seq.) prior to the date of the enactment of 
this Act shall continue to receive funds in accordance with the terms 
of such award until the date on which the award period terminates under 
such terms.

                  PART F--COMPREHENSIVE SCHOOL REFORM

SEC. 161. SCHOOL REFORM.

    Part F of title I is amended to read as follows:

                 ``PART F--COMPREHENSIVE SCHOOL REFORM

``SEC. 1601. COMPREHENSIVE SCHOOL REFORM.

    ``(a) Findings and Purpose.--
            ``(1) Findings.--Congress finds the following:
                    ``(A) A number of schools across the country have 
                shown impressive gains in student performance through 
                the use of comprehensive models for schoolwide change 
                that incorporate virtually all aspects of school 
                operations.
                    ``(B) No single comprehensive school reform model 
                may be suitable for every school, however, schools 
                should be encouraged to examine successful, externally 
                developed comprehensive school reform approaches as 
                they undertake comprehensive school reform.
                    ``(C) Comprehensive school reform is an important 
                means by which children are assisted in meeting 
                challenging State student academic achievement 
                standards.
            ``(2) Purpose.--The purpose of this section is to provide 
        financial incentives for schools to develop comprehensive 
        school reforms, based upon scientifically-based research and 
        effective practices that include an emphasis on basic academics 
        and parental involvement so that all children can meet 
        challenging State content and academic achievement standards.
    ``(b) Program Authorized.--
            ``(1) In general.--The Secretary is authorized to provide 
        grants to State educational agencies to provide subgrants to 
        local educational agencies to carry out the purpose described 
        in subsection (a)(2).
            ``(2) Allocation.--
                    ``(A) Reservation.--Of the amount appropriated 
                under this section, the Secretary may reserve--
                            ``(i) not more than 1 percent for 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;
                            ``(ii) not more than 1 percent to conduct 
                        national evaluation activities described under 
                        subsection (e); and
                            ``(iii) not more than 2 percent of the 
                        amount appropriated in fiscal year 2002 to 
                        carry out this part, for quality initiatives 
                        described under subsection (f).
                    ``(B) In general.--Of the amount of funds remaining 
                after the reservation under subparagraph (A), the 
                Secretary shall allocate to each State for a 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 
                allocated under section 1124 to all States for that 
                year.
                    ``(C) Reallocation.--If a State does not apply for 
                funds under this section, the Secretary shall 
                reallocate such funds to other States that do apply in 
                proportion to the amount allocated to such States under 
                subparagraph (B).
    ``(c) State Awards.--
            ``(1) State application.--
                    ``(A) In general.--Each State educational agency 
                that desires to receive a grant under this section 
                shall submit an application to the Secretary at such 
                time, in such manner and containing such other 
                information as the Secretary may reasonably require.
                    ``(B) Contents.--Each State application shall also 
                describe--
                            ``(i) 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;
                            ``(ii) how the agency will ensure that 
                        funds under this part are used only for 
                        comprehensive school reform programs that--
                                    ``(I) include each of the 
                                components described in subsection 
                                (d)(2);
                                    ``(II) have the capacity to improve 
                                the academic achievement of all 
                                students in core academic subjects 
                                within participating schools; and
                                    ``(III) are supported by technical 
                                assistance providers that have a 
                                successful track record, financial 
                                stability, and the capacity to deliver 
                                high-quality materials and professional 
                                development for school personnel.
                            ``(iii) how the agency will disseminate 
                        materials regarding information on 
                        comprehensive school reforms that are based on 
                        scientifically-based research and effective 
                        practices;
                            ``(iv) how the agency will evaluate 
                        annually the implementation of such reforms and 
                        measure the extent to which the reforms 
                        resulted in increased student academic 
                        performance; and
                            ``(v) how the agency will provide, 
                        technical assistance to the local educational 
                        agency or consortia of local educational 
                        agencies, and to participating schools, in 
                        evaluating, developing, and implementing 
                        comprehensive school reform.
            ``(2) Uses of funds.--
                    ``(A) In general.--Except as provided in 
                subparagraph (E), a State educational agency that 
                receives an award under this section shall use such 
                funds to provide competitive grants to local 
                educational agencies or consortia of local educational 
                agencies in the State receiving funds under part A to 
                support comprehensive school reforms in schools 
                eligible for funds under such part.
                    ``(B) Grant requirements.--A grant to a local 
                educational agency or consortium shall be--
                            ``(i) of sufficient size and scope to 
                        support the initial costs of the comprehensive 
                        school reforms selected or designed by each 
                        school identified in the application of the 
                        local educational agency or consortium;
                            ``(ii) in an amount not less than $50,000 
                        to each participating school; and
                            ``(iii) renewable for two additional 1-year 
                        periods after the initial 1-year grant is made 
                        if schools are making substantial progress in 
                        the implementation of their reforms.
                    ``(C) Priority.--The State, in awarding grants 
                under this paragraph, shall give priority to local 
                educational agencies that--
                            ``(i) plan to use the funds in schools 
                        identified as being in need of improvement or 
                        corrective action under section 1116(c); or
                            ``(ii) demonstrate a commitment to assist 
                        schools with budget allocation, professional 
                        development, and other strategies necessary to 
                        ensure the comprehensive school reforms are 
                        properly implemented and are sustained in the 
                        future.
                    ``(D) Grant consideration.--In making subgrant 
                awards under this part, the State educational agency 
                shall take into account the equitable distribution of 
                awards to different geographic regions within the 
                State, including urban and rural areas, and to schools 
                serving elementary and secondary students.
                    ``(E) Administrative costs.--A State educational 
                agency that receives a grant award under this section 
                may reserve not more than 5 percent of such award for 
                administrative, evaluation, and technical assistance 
                expenses.
                    ``(F) Supplement.--Funds made available under this 
                section shall be used to supplement, not supplant, any 
                other Federal, State, or local funds that would 
                otherwise be available to carry out this section.
            ``(3) Reporting.--Each State educational agency that 
        receives an award under this section shall provide to the 
        Secretary such information as the Secretary may require, 
        including the names of local educational agencies and schools 
        selected to receive subgrant awards under this section, the 
        amount of such award, a description of the comprehensive school 
        reforms selected and in use and a copy of the State's annual 
        evaluation of the implementation of comprehensive school 
        reforms supported under this part and student achievement 
        results.
    ``(d) Local Awards.--
            ``(1) In general.--Each local educational agency or 
        consortium that applies for a subgrant under this section 
        shall--
                    ``(A) identify which schools eligible for funds 
                under part A plan to implement a comprehensive school 
                reform program, including the projected costs of such a 
                program;
                    ``(B) describe the comprehensive school reforms 
                based on scientifically-based research and effective 
                practices that such schools will implement;
                    ``(C) describe how the agency or consortium will 
                provide technical assistance and support for the 
                effective implementation of the school reforms based on 
                scientifically-based research and effective practices 
                selected by such schools; and
                    ``(D) describe how the agency or consortium will 
                evaluate the implementation of such reforms and measure 
                the results achieved in improving student academic 
                performance.
            ``(2) Components of the program.--A local educational 
        agency that receives a subgrant award under this section shall 
        provide such funds to schools that implement a comprehensive 
        school reform program that--
                    ``(A) employs proven strategies and proven methods 
                for student learning, teaching, and school management 
                that are based on scientifically-based research and 
                effective practices and have been replicated 
                successfully in similar schools;
                    ``(B) integrates 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 challenging student performance 
                standards and addresses needs identified through a 
                school needs assessment;
                    ``(C) provides high-quality and continuous teacher 
                and staff professional development;
                    ``(D) includes measurable goals for student 
                performance and benchmarks for meeting such goals;
                    ``(E) is supported by teachers, principals, 
                administrators, and other professional staff;
                    ``(F) provides for the meaningful involvement of 
                parents and the local community in planning and 
                implementing school improvement activities;
                    ``(G) uses high quality external technical support 
                and assistance from an entity, which may be an 
                institution of higher education, with experience and 
                expertise in schoolwide reform and improvement;
                    ``(H) includes a plan for the annual evaluation of 
                the implementation of school reforms and the student 
                results achieved;
                    ``(I) identifies how other resources, including 
                Federal, State, local, and private resources, available 
                to the school will be used to coordinate services to 
                support and sustain the school reform effort; and
                    ``(J)(i) has been found, through rigorous field 
                experiments in multiple sites, to significantly improve 
                the academic performance of students participating in 
                such activity or program as compared to similar 
                students in similar schools, who have not participated 
                in such activity or program; or
                    ``(ii) has been found to have strong evidence that 
                such model will significantly improve the performance 
                of participating children.
            ``(3) 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 its own comprehensive school reform program for 
        schoolwide change that complies with paragraph (2).
    ``(e) Evaluation and Report.--
            ``(1) In general.--The Secretary shall develop a plan for a 
        national evaluation of the programs developed pursuant to this 
        section.
            ``(2) Evaluation.--This national evaluation shall evaluate 
        the implementation and results achieved by schools after 3 
        years of implementing comprehensive school reforms, and assess 
        the effectiveness of comprehensive school reforms in schools 
        with diverse characteristics.
            ``(3) Reports.--Prior to the completion of a national 
        evaluation, the Secretary shall submit an interim report 
        outlining first year implementation activities to the 
        Committees on Education and the Workforce and Appropriations of 
        the House of Representatives and the Committees on Health, 
        Education, Labor, and Pensions and Appropriations of the 
        Senate.
    ``(f) Quality Initiatives.--The Secretary, through grants or 
contracts, shall provide funds for the following activities:
            ``(1) Technical assistance.--A joint public and private 
        partnership that receives matching funds from private 
        organizations, in order to assist States, local educational 
        agencies, and schools in making informed decisions when 
        approving or selecting providers of comprehensive school 
        reform, consistent with the requirements described in 
        subsection (d)(3).
            ``(2) Other activities.--Other activities that--
                    ``(A) encourage the development of comprehensive 
                reform models;
                    ``(B) build the capacity of comprehensive school 
                reform providers to increase the number of schools the 
                providers can serve; and
                    ``(C) ensure that schools served receive high 
                quality services that meet the needs of their teachers 
                and students.''.

           PART G--RURAL EDUCATION FLEXIBILITY AND ASSISTANCE

SEC. 171. RURAL EDUCATION.

    Title I is amended by adding at the end the following new part:

          ``PART G--RURAL EDUCATION FLEXIBILITY AND ASSISTANCE

``SEC. 1701. SHORT TITLE.

    ``This part may be cited as the `Rural Education Initiative Act'.

``SEC. 1702. FINDINGS.

    ``Congress finds the following:
            ``(1) While there are rural education initiatives 
        identified at the State and local level, no Federal education 
        policy focuses on the specific and unique needs of rural school 
        districts and schools.
            ``(2) Small school districts often cannot use Federal grant 
        funds distributed by formula because the formula allocation 
        does not provide enough revenue to carry out the program the 
        grant is intended to fund.
            ``(3) Rural schools often cannot compete for Federal 
        funding distributed by competitive grants because the schools 
        lack the personnel needed to prepare grant applications and the 
        resources to hire specialists in the writing of Federal grant 
        proposals.
            ``(4) A critical problem for rural school districts 
        involves the hiring and retention of qualified administrators 
        and certified teachers (especially in reading, science, and 
        mathematics). As a result, teachers in rural schools are almost 
        twice as likely to provide instruction in three or more subject 
        areas than teachers in urban schools. Rural schools also face 
        other tough challenges, such as shrinking local tax bases, high 
        transportation costs, aging buildings, limited course 
        offerings, and limited resources.

                ``Subpart 1--Rural Education Flexibility

``SEC. 1711. FORMULA GRANT PROGRAM AUTHORIZED.

    ``(a) Alternative Uses.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, an eligible local educational agency may use the 
        applicable funding, that the agency is eligible to receive from 
        the State educational agency for a fiscal year, to carry out 
        local activities authorized in part A of title I, part A of 
        title II, part A of title III, part A of title IV, or part A or 
        B of title V.
            ``(2) Notification.--An eligible local educational agency 
        shall notify the State educational agency of the local 
        educational agency's intention to use the applicable funding in 
        accordance with paragraph (1) not later than a date that is 
        established by the State educational agency for the 
        notification.
    ``(b) Eligibility.--
            ``(1) In general.--A local educational agency shall be 
        eligible to use the applicable funding in accordance with 
        subsection (a) if--
                    ``(A)(i) the total number of students in average 
                daily attendance at all of the schools served by the 
                local educational agency is less than 600; and
                    ``(ii) all of the schools served by the local 
                educational agency are designated with a school locale 
                code of 7 or 8 as determined by the Secretary of 
                Education; or
                    ``(B) the agency meets the criteria established in 
                subparagraph (A)(i) and the Secretary, in accordance 
                with paragraph (2), grants the local educational 
                agency's request to waive the criteria described in 
                subparagraph (A)(ii).
            ``(2) Certification.--The Secretary shall determine whether 
        or not to waive the criteria described in paragraph (1)(A)(ii) 
        based on a demonstration by a local educational agency and 
        concurrence by the State educational agency that the local 
        educational agency is located in an area defined as rural by a 
        governmental agency of the State.
    ``(c) Applicable Funding.--In this section, the term `applicable 
funding' means funds provided under part A of title II, section 3106, 
part A of title IV, subpart 1 of part A of title V, and section 
5212(a)(2)(A).
    ``(d) Disbursement.--Each State educational agency that receives 
applicable funding for a fiscal year shall disburse the applicable 
funding to local educational agencies for alternative uses under this 
section for the fiscal year at the same time that the State educational 
agency disburses the applicable funding to local educational agencies 
that do not intend to use the applicable funding for such alternative 
uses for the fiscal year.
    ``(e) Supplement Not Supplant.--Funds used under this section shall 
be used to supplement and not supplant any other Federal, State, or 
local education funds that would otherwise be available for the purpose 
of this subpart.
    ``(f) Applicable Rule.--Except as otherwise provided in this 
subpart, funds transferred under this subpart are subject to each of 
the rules and requirements applicable to the funds allocated by the 
Secretary under the provision to which the transferred funds are 
transferred.

``SEC. 1712. PROGRAM AUTHORIZED.

    ``(a) In General.--The Secretary is authorized to award grants to 
eligible local educational agencies under section 1711(b) to enable the 
local educational agencies to support local or statewide education 
reform efforts intended to improve the academic achievement of 
elementary school and secondary school students and the quality of 
instruction provided for the students.
    ``(b) Allocation.--
            ``(1) In general.--Except as provided in paragraph (3), the 
        Secretary shall award a grant to an eligible local educational 
        agency under section 1711(b) for a fiscal year in an amount 
        equal to the initial amount determined under paragraph (2) for 
        the fiscal year minus the total amount received under the 
        provisions of law described under section 1711(c) for the 
        preceding fiscal year.
            ``(2) Determination of the initial amount.--The initial 
        amount referred to in paragraph (1) is equal to $100 multiplied 
        by the total number of students, over 50 students, in average 
        daily attendance in such eligible agency plus $20,000, except 
        that the initial amount may not exceed $60,000.
            ``(3) Ratable adjustment.--
                    ``(A) In general.--If the amount made available for 
                this subpart for any fiscal year is not sufficient to 
                pay in full the amounts that local educational agencies 
                are eligible to receive under paragraph (1) for such 
                year, the Secretary shall ratably reduce such amounts 
                for such year.
                    ``(B) Additional amounts.--If additional funds 
                become available for making payments under paragraph 
                (1) for such fiscal year, payments that were reduced 
                under subparagraph (A) shall be increased on the same 
                basis as such payments were reduced.
            ``(4) Census determination.--
                    ``(A) In general.--Each local educational agency 
                desiring a grant under this section shall conduct a 
                census not later than December 1 of each year to 
                determine the number of kindergarten through grade 12 
                students in average daily attendance at the schools 
                served by the local educational agency.
                    ``(B) Submission.--Each local educational agency 
                shall submit the number described in subparagraph (A) 
                to the Secretary not later than March 1 of each year.
    ``(c) Disbursal.--The Secretary shall disburse the funds awarded to 
a local educational agency under this section for a fiscal year not 
later than July 1 of that year.
    ``(d) Special Rule.--A local educational agency that is eligible to 
receive a grant under this subpart for a fiscal year shall be 
ineligible to receive funds for such fiscal year under subpart 2.
    ``(e) Supplement Not Supplant.--Funds made available under this 
section shall be used to supplement and not supplant any other Federal, 
State, or local education funds.

``SEC. 1713. ACCOUNTABILITY.

    ``(a) Academic Achievement.--
            ``(1) In general.--Each local educational agency that uses 
        or receives funds under section 1711 or 1712 for a fiscal year 
        shall administer an assessment consistent with section 1111.
            ``(2) Special rule.--Each local educational agency that 
        uses or receives funds under section 1711 or 1712 shall use the 
        same assessment described in paragraph (1) for each year of 
        participation in the program under such section.
    ``(b) State Educational Agency Determination Regarding Continuing 
Participation.--Each State educational agency that receives funding 
under the provisions of law described in section 1711(c) shall--
            ``(1) after the second year that a local educational agency 
        participates in a program under section 1711 or 1712 and on the 
        basis of the results of the assessments described in subsection 
        (a), determine whether the schools served by the local 
        educational agency participating in the program performed in 
        accordance with section 1111; and
            ``(2) only permit those local educational agencies that so 
        participated and make adequate yearly progress, as described in 
        section 1111(b)(2), to continue to so participate.

                ``Subpart 2--Rural Education Assistance

``SEC. 1721. PROGRAM AUTHORIZED.

    ``(a) Reservations.--From amounts appropriated under section 
1002(f) for this subpart for a fiscal year, the Secretary shall reserve 
\1/2\ of 1 percent to make awards to elementary or secondary schools 
operated or supported by the Bureau of Indian Affairs to carry out the 
purpose of this subpart.
    ``(b) Grants to States.--
            ``(1) In general.--From amounts appropriated under section 
        1002(f) for this subpart that are not reserved under subsection 
        (a), the Secretary shall award grants for a fiscal year to 
        State educational agencies that have applications approved 
        under section 1723 to enable the State educational agencies to 
        award subgrants to eligible local educational agencies for 
        local authorized activities described in subsection (c)(2).
            ``(2) Allocation.--From amounts appropriated for this 
        subpart, the Secretary shall allocate to each State educational 
        agency for a fiscal year an amount that bears the same ratio to 
        the amount of funds appropriated under section 1002(f) for this 
        subpart that are not reserved under subsection (a) as the 
        number of students in average daily attendance served by 
        eligible local educational agencies in the State bears to the 
        number of all such students served by eligible local 
        educational agencies in all States for that fiscal year.
            ``(3) Direct awards to specially qualified agencies.--
                    ``(A) Nonparticipating state.--If a State 
                educational agency elects not to participate in the 
                program under this subpart or does not have an 
                application approved under section 1723 a specially 
                qualified agency in such State desiring a grant under 
                this subpart shall submit an application under such 
                section directly to the Secretary to receive an award 
                under this subpart.
                    ``(B) Direct awards to specially qualified 
                agencies.--The Secretary may award, on a competitive 
                basis, the amount the State educational agency is 
                eligible to receive under paragraph (2) directly to 
                specially qualified agencies in the State.
    ``(c) Local Awards.--
            ``(1) Eligibility.--A local educational agency shall be 
        eligible to receive funds under this subpart if--
                    ``(A) 20 percent or more of the children aged 5 to 
                17, inclusive, served by the local educational agency 
                are from families with incomes below the poverty line; 
                and
                    ``(B) all of the schools served by the agency are 
                designated with a school code of 6, 7, or 8 as 
                determined by the Secretary of Education.
            ``(2) Uses of funds.--Grant funds awarded to local 
        educational agencies or made available to schools under this 
        subpart shall be used for--
                    ``(A) teacher recruitment and retention, including 
                the use of signing bonuses and other financial 
                incentives;
                    ``(B) teacher professional development, including 
                programs that train teachers to utilize technology to 
                improve teaching and to train special needs teachers;
                    ``(C) educational technology, including software 
                and hardware as described in part B of title V;
                    ``(D) parental involvement activities; or
                    ``(E) programs to improve student academic 
                achievement.

``SEC. 1722. STATE DISTRIBUTION OF FUNDS.

    ``(a) Award Basis.--A State educational agency shall award grants 
to eligible local educational agencies--
            ``(1) on a competitive basis; or
            ``(2) according to a formula based on the number of 
        students in average daily attendance served by the eligible 
        local educational agencies or schools (as appropriate) in the 
        State, as determined by the State.
    ``(b) Administrative Costs.--A State educational agency receiving a 
grant under this subpart may not use more than 5 percent of the amount 
of the grant for State administrative costs.

``SEC. 1723. APPLICATIONS.

    ``Each State educational agency and specially qualified agency 
desiring to receive a grant under this subpart shall submit an 
application to the Secretary at such time, in such manner, and 
accompanied by such information as the Secretary may require. Such 
application shall include specific measurable goals and objectives 
relating to increased student academic achievement, decreased student 
dropout rates, or such other factors that the State educational agency 
or specially qualified agency may choose to measure.

``SEC. 1724. REPORTS.

    ``(a) State Reports.--Each State educational agency that receives a 
grant under this subpart shall provide an annual report to the 
Secretary. The report shall describe--
            ``(1) the method the State educational agency used to award 
        grants to eligible local educational agencies and to provide 
        assistance to schools under this subpart;
            ``(2) how local educational agencies and schools used funds 
        provided under this subpart; and
            ``(3) the degree to which progress has been made toward 
        meeting the goals and objectives described in the application 
        submitted under section 1723.
    ``(b) Specially Qualified Agency Report.--Each specially qualified 
agency that receives a grant under this subpart shall provide an annual 
report to the Secretary. Such report shall describe--
            ``(1) how such agency uses funds provided under this 
        subpart; and
            ``(2) the degree to which progress has been made toward 
        meeting the goals and objectives described in the application 
        submitted under section 1723.
    ``(c) Report to Congress.--The Secretary shall prepare and submit 
to the Committee on Education and the Workforce for the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions for the Senate an annual report. The report shall describe--
            ``(1) the methods the State educational agency used to 
        award grants to eligible local educational agencies and to 
        provide assistance to schools under this subpart;
            ``(2) how eligible local educational agencies and schools 
        used funds provided under this subpart; and
            ``(3) progress made in meeting specific measurable 
        educational goals and objectives.

``SEC. 1725. PERFORMANCE REVIEW.

    ``Three years after a State educational agency or specially 
qualified agency receives funds under this part, the Secretary shall 
review the progress of such agency toward achieving the goals and 
objectives included in its application, to determine whether the agency 
has made progress toward meeting such goals and objectives. To review 
the performance of each agency, the Secretary shall--
            ``(1) review the use of funds of such agency under section 
        1721(c)(2); and
            ``(2) deny the provision of additional funds in subsequent 
        fiscal years to an agency only if the Secretary determines, 
        after notice and an opportunity for a hearing, that the 
        agency's use of funds has been inadequate to justify 
        continuation of such funding.

``SEC. 1726. DEFINITIONS.

    ``In this subpart--
            ``(1) The term `poverty line' means the poverty line (as 
        defined by the Office of Management and Budget, and revised 
        annually in accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a 
        family of the size involved.
            ``(2) The term `specially qualified agency' means an 
        eligible local educational agency, located in a State that does 
        not participate in a program under this subpart in a fiscal 
        year, that may apply directly to the Secretary for a grant in 
        such year under section 1721(b)(3)(A).

                    ``Subpart 3--General Provisions

``SEC. 1731. DEFINITION.

    ``In this part, the term `State' means each of the 50 States, the 
District of Columbia, and the Commonwealth of Puerto Rico.''.

                 PART H--GENERAL PROVISIONS OF TITLE I

SEC. 181. GENERAL PROVISIONS.

    Title I is amended further by adding at the end the following:

                      ``PART H--GENERAL PROVISIONS

``SEC. 1801. FEDERAL REGULATIONS.

    ``(a) In General.--The Secretary is authorized to issue such 
regulations as are necessary to ensure reasonable compliance with this 
title.
    ``(b) Negotiated Rulemaking Process.--
            ``(1) In general.--Prior to publishing in the Federal 
        Register proposed regulations to carry out this title, the 
        Secretary shall obtain the advice and recommendations of 
        representatives of Federal, State, and local administrators, 
        parents, teachers, paraprofessionals, and members of local 
        boards of education involved with the implementation and 
        operation of programs under this title.
            ``(2) Meetings and electronic exchange.--Such advice and 
        recommendation may be obtained through such mechanisms as 
        regional meetings and electronic exchanges of information.
            ``(3) Proposed regulations.--After obtaining such advice 
        and recommendations, and prior to publishing proposed 
        regulations, the Secretary shall--
                    ``(A) establish a negotiated rulemaking process on 
                a minimum of three key issues, including--
                            ``(i) accountability;
                            ``(ii) implementation of assessments; and
                            ``(iii) use of paraprofessionals;
                    ``(B) select individuals to participate in such 
                process from among individuals or groups which provided 
                advice and recommendations, including representation 
                from all geographic regions of the United States; and
                    ``(C) prepare a draft of proposed regulations that 
                shall be provided to the individuals selected by the 
                Secretary under subparagraph (B) not less than 15 days 
                prior to the first meeting under such process.
            ``(4) Process.--Such process--
                    ``(A) shall be conducted in a timely manner to 
                ensure that final regulations are issued by the 
                Secretary not later than 1 year after the date of the 
                enactment of the No Child Left Behind Act of 2001; and
                    ``(B) shall not be subject to the Federal Advisory 
                Committee Act but shall otherwise follow the provisions 
                of the Negotiated Rulemaking Act of 1990 (5 U.S.C. 561 
                et seq.).
            ``(5) Emergency situation.--In an emergency situation in 
        which regulations to carry out this title must be issued within 
        a very limited time to assist State and local educational 
        agencies with the operation of a program under this title, the 
        Secretary may issue proposed regulations without following such 
        process but shall, immediately thereafter and prior to issuing 
        final regulations, conduct regional meetings to review such 
        proposed regulations.
    ``(c) Limitation.--Regulations to carry out this part may not 
require local programs to follow a particular instructional model, such 
as the provision of services outside the regular classroom or school 
program.

``SEC. 1802. AGREEMENTS AND RECORDS.

    ``(a) Agreements.--All published proposed regulations shall conform 
to agreements that result from negotiated rulemaking described in 
section 1801 unless the Secretary reopens the negotiated rulemaking 
process or provides a written explanation to the participants involved 
in the process explaining why the Secretary decided to depart from and 
not adhere to such agreements.
    ``(b) Records.--The Secretary shall ensure that an accurate and 
reliable record of agreements reached during the negotiations process 
is maintained.

``SEC. 1803. STATE ADMINISTRATION.

    ``(a) Rulemaking.--
            ``(1) In general.--Each State that receives funds under 
        this title shall--
                    ``(A) ensure that any State rules, regulations, and 
                policies relating to this title conform to the purposes 
                of this title and provide any such proposed rules, 
                regulations, and policies to the committee of 
                practitioners under subsection (b) for their review and 
                comment;
                    ``(B) minimize such rules, regulations, and 
                policies to which their local educational agencies and 
                schools are subject;
                    ``(C) eliminate or modify State and local fiscal 
                accounting requirements in order to facilitate the 
                ability of schools to consolidate funds under 
                schoolwide programs; and
                    ``(D) identify any such rule, regulation, or policy 
                as a State-imposed requirement.
            ``(2) Support and facilitation.--State rules, regulations, 
        and policies under this title shall support and facilitate 
        local educational agency and school-level systemic reform 
        designed to enable all children to meet the challenging State 
        student academic achievement standards.
    ``(b) Committee of Practitioners.--
            ``(1) In general.--Each State educational agency shall 
        create a State committee of practitioners to advise the State 
        in carrying out its responsibilities under this title.
            ``(2) Membership.--Each such committee shall include--
                    ``(A) as a majority of its members, representatives 
                from local educational agencies;
                    ``(B) administrators, including the administrators 
                of programs described in other parts of this title;
                    ``(C) teachers, including vocational educators;
                    ``(D) parents;
                    ``(E) members of local boards of education;
                    ``(F) representatives of private school children; 
                and
                    ``(G) pupil services personnel.
            ``(3) Duties.--The duties of such committee shall include a 
        review, prior to publication, of any proposed or final State 
        rule or regulation pursuant to this title. In an emergency 
        situation where such rule or regulation must be issued within a 
        very limited time to assist local educational agencies with the 
        operation of the program under this title, the State 
        educational agency may issue a regulation without prior 
        consultation, but shall immediately thereafter convene the 
        State committee of practitioners to review the emergency 
        regulation prior to issuance in final form.

``SEC. 1804. LOCAL ADMINISTRATIVE COST LIMITATION.

    ``(a) Local Administrative Cost Limitation.--Each local educational 
agency may use not more than 4 percent of funds received under part A 
for administrative expenses.
    ``(b) Regulations.--The Secretary, after consulting with State and 
local officials and other experts in school finance, shall develop and 
issue regulations that define the term administrative cost for purposes 
of this title. Such definition shall be consistent with generally 
accepted accounting principles. The Secretary shall publish final 
regulations on this section not later than 1 year after the date of the 
enactment of the No Child Left Behind Act of 2001.

``SEC. 1805. APPLICABILITY.

    ``Nothing in this title shall be construed to affect home schools 
nor shall any home schooled student be required to participate in any 
assessment referenced in this title.

``SEC. 1806. PRIVATE SCHOOLS.

    ``Nothing in this title shall be construed to affect any private 
school that does not receive funds or services under this title, nor 
shall any student who attends a private school that does not receive 
funds or services under this title be required to participate in any 
assessment referenced in this title.

``SEC. 1807. PRIVACY OF ASSESSMENT RESULTS.

    ``Any results from individual assessments referenced in this title 
which become part of the education records of the student shall have 
the protections as provided in section 444 of the General Education 
Provisions Act.''.

     TITLE II--PREPARING, TRAINING, AND RECRUITING QUALITY TEACHERS

SEC. 201. TEACHER QUALITY TRAINING AND RECRUITING FUND.

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

    ``TITLE II--PREPARING, TRAINING, AND RECRUITING QUALITY TEACHERS

         ``PART A--TEACHER QUALITY TRAINING AND RECRUITING FUND

``SEC. 2001. PURPOSE.

    ``The purpose of this part is to provide grants to States and local 
educational agencies in order to assist their efforts to increase 
student academic achievement through such strategies as improving 
teacher and principal quality and increasing the number of highly 
qualified teachers in the classroom.

``Subpart 1--Grants to States to Prepare, Train, and Recruit Qualified 
                                Teachers

``SEC. 2011. FORMULA GRANTS TO STATES.

    ``(a) In General.--In the case of each State that in accordance 
with section 2013 submits to the Secretary an application for a fiscal 
year, the Secretary shall make a grant for the year to the State for 
the uses specified in section 2012. The grant shall consist of the 
allotment determined for the State under subsection (b).
    ``(b) Determination of Amount of Allotments.--
            ``(1) Reservation of funds.--From the amount made available 
        to carry out this subpart for any fiscal year, the Secretary 
        shall reserve--
                    ``(A) \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 purpose of this part; and
                    ``(B) \1/2\ of 1 percent for the Secretary of the 
                Interior for programs under this subpart for 
                professional development activities for teachers, other 
                staff, and administrators in schools operated or funded 
                by the Bureau of Indian Affairs.
            ``(2) State allotments.--
                    ``(A) Hold harmless.--
                            ``(i) In general.--Subject to subparagraph 
                        (B), from the total amount made available to 
                        carry out this subpart 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--
                                    ``(I) section 2202(b) of this Act 
                                (as in effect on the day before the 
                                date of the enactment of the No Child 
                                Left Behind Act of 2001); 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).
                            ``(ii) Nonparticipating states.--In the 
                        case of a State that did not receive any funds 
                        for fiscal year 2001 under one or both of the 
                        provisions referred to in subclauses (I) and 
                        (II) of clause (i), the amount allotted to the 
                        State under such clause shall be the total 
                        amount that the State would have received for 
                        fiscal year 2001 if it had elected to 
                        participate in all of the programs for which it 
                        was eligible under each of the provisions 
                        referred to in such subclauses.
                            ``(iii) Ratable reduction.--If the total 
                        amount made available to carry out this subpart 
                        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 any fiscal year, the 
                        Secretary shall ratably reduce such amounts for 
                        such fiscal year.
                    ``(B) Allotment of additional funds.--
                            ``(i) In general.--Subject to clause (ii), 
                        for any fiscal year for which the total amount 
                        made available to carry out this subpart and 
                        not reserved under paragraph (1) exceeds the 
                        total amount required to make allotments under 
                        subparagraph (A), the Secretary shall allot 
                        such excess amount among the 50 States, the 
                        District of Columbia, and the Commonwealth of 
                        Puerto Rico as follows:
                                    ``(I) 50 percent of such excess 
                                amount shall be allotted among such 
                                States on the basis of their relative 
                                populations of individuals aged 5 
                                through 17, as determined by the 
                                Secretary on the basis of the most 
                                recent satisfactory data.
                                    ``(II) 50 percent of such excess 
                                amount shall be allotted among such 
                                States in proportion to the number of 
                                children, aged 5 to 17, who reside 
                                within the State from families with 
                                incomes below the poverty line (as 
                                defined by the Office of Management and 
                                Budget and revised annually in 
                                accordance with section 673(2) of the 
                                Community Services Block Grant Act (42 
                                U.S.C. 9902(2)) applicable to a family 
                                of the size involved for the most 
                                recent fiscal year for which 
                                satisfactory data are available, 
                                compared to the number of such 
                                individuals who reside in all such 
                                States for that fiscal year.
                            ``(ii) Exception.--No State receiving an 
                        allotment under clause (i) may receive less 
                        than \1/2\ of 1 percent of the total excess 
                        amount allotted under such clause.
            ``(3) Reallotment.--If any State does not apply for an 
        allotment under this subsection for any fiscal year, the 
        Secretary shall reallot such amount to the remaining States in 
        accordance with this subsection.

``SEC. 2012. WITHIN-STATE ALLOCATIONS.

    ``(a) Use of Funds.--Each State receiving a grant under this 
subpart shall use the funds provided under the grant in accordance with 
this section to carry out activities for the improvement of teaching 
and learning.
    ``(b) Reservation of Funds.--
            ``(1) In general.--A State that receives a grant under this 
        subpart may reserve not more than 5 percent of the amount of 
        the funds provided under the grant for--
                    ``(A) one or more of the authorized State 
                activities described in subsection (e); and
                    ``(B) planning and administration related to 
                carrying out such activities and making subgrants to 
                local educational agencies under subparts 2 and 3.
            ``(2) Limitation on administrative costs.--The amount 
        reserved by a State under paragraph (1)(B) may not exceed 1 
        percent of the amount of the funds provided under the grant.
    ``(c) Subgrants to Local Educational Agencies.--
            ``(1) In general.--The Secretary may make a grant to a 
        State under this subpart only if the State agrees to distribute 
        the funds described in this subsection as subgrants to local 
        educational agencies under subpart 3.
            ``(2) Hold harmless.--
                    ``(A) In general.--From the funds that a State 
                receives under this subpart for any fiscal year that 
                are not reserved under subsection (b), the State shall 
                allot to each local educational agency an amount equal 
                to the total amount that such agency received for 
                fiscal year 2001 under--
                            ``(i) section 2203(1)(B) of this Act (as in 
                        effect on the day before the date of the 
                        enactment of the No Child Left Behind Act of 
                        2001); 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).
                    ``(B) Nonparticipating agencies.--In the case of a 
                local educational agency that did not receive any funds 
                for fiscal year 2001 under one or both of the 
                provisions referred to in clauses (i) and (ii) of 
                subparagraph (A), the amount allotted to the agency 
                under such subparagraph shall be the total amount that 
                the agency would have received for fiscal year 2001 if 
                it had elected to participate in all of the programs 
                for which it was eligible under each of the provisions 
                referred to in such clauses.
                    ``(C) Ratable reduction.--If the funds described in 
                subparagraph (A) are insufficient to pay the full 
                amounts that all local educational agencies are 
                eligible to receive under such subparagraph for any 
                fiscal year, the State shall ratably reduce such 
                amounts for such fiscal year.
            ``(3) Allotment of Additional Funds.--
                    ``(A) In general.--For any fiscal year for which 
                the funds that a State receives under this subpart that 
                are not reserved under subsection (b) exceed the total 
                amount required to make allotments under paragraph (2), 
                the State shall distribute the amount described in 
                subparagraph (B) through a formula under which--
                            ``(i) 20 percent is allocated to local 
                        educational agencies in accordance with the 
                        relative enrollment in public and private 
                        nonprofit elementary and secondary schools 
                        within the boundaries of such agencies; and
                            ``(ii) 80 percent is allocated to local 
                        educational agencies in proportion to the 
                        number of children, aged 5 to 17, who reside 
                        within the geographic area served by such 
                        agency from families with incomes below the 
                        poverty line (as defined by the Office of 
                        Management and Budget and revised annually in 
                        accordance with section 673(2) of the Community 
                        Services Block Grant Act (42 U.S.C. 9902(2))) 
                        applicable to a family of the size involved for 
                        the most recent fiscal year for which 
                        satisfactory data are available, compared to 
                        the number of such individuals who reside in 
                        the geographic areas served by all the local 
                        educational agencies in the State for that 
                        fiscal year.
                    ``(B) Calculation of amount.--
                            ``(i) In general.--The amount described in 
                        this subparagraph for a State for any fiscal 
                        year is the base amount for such State and 
                        year, plus any additional amount for such State 
                        and year.
                            ``(ii) Base amount.--For purposes of this 
                        subparagraph, the term `base amount' means 50 
                        percent of the funds that remain to a State 
                        after a State makes the reservations described 
                        in subsection (b) and the allotments described 
                        in paragraph (2).
                            ``(iii) Additional amount.--For purposes of 
                        this subparagraph, the term `additional amount' 
                        means the amount (if any) by which the base 
                        amount for a State exceeds the maximum amount 
                        described in subsection (d)(2)(B).
    ``(d) Math and Science Partnerships.--
            ``(1) In general.--The Secretary may make a grant to a 
        State under this subpart only if the State agrees to distribute 
        the amount described in paragraph (2) through a competitive 
        subgrant process in accordance with subpart 2.
            ``(2) Amount described.--
                    ``(A) In general.--The amount described in this 
                paragraph for a State for any fiscal year is 50 percent 
                of the funds that the State receives under this subpart 
                for the year that remain after the State makes the 
                reservations described in subsection (b) and the 
                allotments described in subsection (c)(2).
                    ``(B) Limitation.--In no case may the amount 
                described in this paragraph exceed a maximum amount 
                calculated by multiplying the total amount of the funds 
                that a State receives under this subpart for a fiscal 
                year that the State does not reserve under subsection 
                (b) by a percentage, selected by the State, that shall 
                be not less than 15 nor more than 20 percent.
    ``(e) Authorized State Activities.--The authorized State activities 
referred to in subsection (b)(1)(A) are the following:
            ``(1) Reforming teacher certification, recertification, or 
        licensure requirements to ensure that--
                    ``(A) teachers have the necessary teaching skills 
                and academic content knowledge in the subject areas in 
                which they are assigned to teach;
                    ``(B) teacher certification, recertification, or 
                licensure requirements are aligned with the State's 
                challenging State academic content standards; and
                    ``(C) teachers have the knowledge and skills 
                necessary to help students meet challenging State 
                student achievement standards.
            ``(2) Carrying out programs that--
                    ``(A) include support during the initial teaching 
                or leadership experience, such as mentoring programs 
                that--
                            ``(i) provide--
                                    ``(I) mentoring to beginning 
                                teachers from veteran teachers with 
                                expertise in the same subject matter 
                                that the beginning teachers will be 
                                teaching; or
                                    ``(II) similar mentoring to 
                                principals or superintendents;
                            ``(ii) provide mentors time for activities 
                        such as coaching, observing, and assisting the 
                        teachers or school leaders who are mentored; 
                        and
                            ``(iii) use standards or assessments for 
                        guiding beginning teachers that are consistent 
                        with the State's student achievement standards 
                        and with the requirements for professional 
                        development activities under section 2033; and
                    ``(B) establish, expand, or improve alternative 
                routes to State certification of teachers, especially 
                in the areas of mathematics and science, for highly 
                qualified individuals with a baccalaureate degree, 
                including mid-career professionals from other 
                occupations, paraprofessionals, former military 
                personnel, and recent college or university graduates 
                with records of academic distinction who demonstrate 
                the potential to become highly effective teachers.
            ``(3) Developing and implementing effective mechanisms to 
        assist local educational agencies and schools in effectively 
        recruiting and retaining highly qualified and effective 
        teachers and principals.
            ``(4) Reforming tenure systems and implementing teacher 
        testing and other procedures to expeditiously remove 
        ineffective teachers from the classroom.
            ``(5) Developing enhanced performance systems to measure 
        the effectiveness of specific professional development programs 
        and strategies.
            ``(6) Providing technical assistance to local educational 
        agencies consistent with this part.
            ``(7) Funding projects to promote reciprocity of teacher 
        certification or licensure between or among States, except that 
        no reciprocity agreement developed under this paragraph or 
        developed using funds provided under this part may lead to the 
        weakening of any State teaching certification or licensing 
        requirement.
            ``(8) Developing or assisting local educational agencies in 
        the development and utilization of proven, innovative 
        strategies to deliver intensive professional development 
        programs that are both cost-effective and easily accessible, 
        such as through the use of technology and distance learning.
            ``(9) Providing assistance to local educational agencies 
        for the development and implementation of innovative 
        professional development programs that train teachers to use 
        technology to improve teaching and learning and are consistent 
        with the requirements of section 2033.
            ``(10) Developing or assisting local educational agencies 
        in developing merit-based performance systems, rigorous 
        assessments for teachers, and strategies which provide 
        differential and bonus pay for teachers in high-need subject 
        areas such as reading, math, and science and in high-poverty 
        schools and districts.
            ``(11) Providing assistance to local educational agencies 
        for the development and implementation of professional 
        development programs for principals that enable them to be 
        effective school leaders and prepare all students to achieve 
        challenging State content and student achievement standards, 
        including the development and support of school leadership 
        academies to help exceptionally talented aspiring or current 
        principals and superintendents become outstanding managers and 
        educational leaders.
            ``(12) Developing, or assisting local educational agencies 
        in developing, teacher advancement initiatives that promote 
        professional growth and emphasize multiple career paths (such 
        as career teacher, mentor teacher, and master teacher) and pay 
        differentiation.
    ``(f) Coordination.--States receiving grants under section 202 of 
the Higher Education Act of 1965 shall coordinate the use of such funds 
with activities carried out under this section.

``SEC. 2013. APPLICATIONS BY STATES.

    ``(a) In General.--To be eligible to receive a grant under this 
subpart, a State 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 application under this section shall include 
the following:
            ``(1) A description of how the State will ensure that a 
        local educational agency receiving a subgrant under subpart 3 
        will comply with the requirements of such subpart.
            ``(2) A description of how the State will use funds under 
        this part to meet the requirements of section 1119(a)(2).
            ``(3) A description of how the State will coordinate 
        professional development activities authorized under this part 
        with professional development activities provided under other 
        Federal, State, and local programs, including those authorized 
        under title I, part A of title III, parts A and B of title V, 
        and (where applicable) the Individuals with Disabilities 
        Education Act and the Carl D. Perkins Vocational and Technical 
        Education Act. The application shall also describe the 
        comprehensive strategy that the State will take as part of such 
        coordination effort, to ensure that teachers are trained in the 
        utilization of technology so that technology and its 
        applications are effectively used in the classroom to improve 
        teaching and learning in all curriculum and content areas, as 
        appropriate.
            ``(4) A description of how the State will encourage the 
        development of proven, innovative strategies to deliver 
        intensive professional development programs that are both cost-
        effective and easily accessible, such as through the use of 
        technology and distance learning.
            ``(5) A description of how the State will ensure that local 
        educational agencies will comply with the requirements under 
        section 2033, especially with respect to ensuring the 
        participation of teachers, principals, and parents.
    ``(c) Application Approval.--A State application submitted to the 
Secretary under this section shall be deemed approved by the Secretary 
unless the Secretary makes a written determination, within 90 days 
after receiving the application, that the application is in violation 
of the provisions of this subpart. The Secretary shall not finally 
disapprove a State application except after giving the State notice and 
opportunity for a hearing.

               ``Subpart 2--Math and Science Partnerships

``SEC. 2021. PURPOSE.

    ``The purpose of this subpart is to improve the achievement of 
students in the areas of mathematics and science by encouraging States, 
institutions of higher education, and local educational agencies to 
participate in programs that--
            ``(1) focus on education and training of mathematics and 
        science teachers that improves teachers' knowledge and skills 
        and encourages intellectual growth;
            ``(2) improve mathematics and science teaching by 
        encouraging institutions of higher education to assume greater 
        responsibility for improving mathematics and science teacher 
        education through the establishment of a comprehensive, 
        integrated system of recruiting, training, and advising such 
        teachers; and
            ``(3) bring mathematics and science teachers in elementary 
        and secondary schools together with scientists, mathematicians, 
        and engineers to increase the subject matter knowledge of 
        teachers and improve their teaching skills through the use of 
        sophisticated laboratory equipment and work space, computing 
        facilities, libraries, and other resources that institutions of 
        higher education are better able to provide than the schools.

``SEC. 2022. APPLICATION REQUIREMENTS.

    ``(a) In General.--An eligible partnership seeking to receive a 
subgrant from a State under this subpart shall submit an application to 
the State at such time, in such manner, and accompanied by such 
information as the State may require.
    ``(b) Partnership Application Contents.--Each such application 
shall include--
            ``(1) an assessment of the teacher quality and professional 
        development of all the schools and agencies participating in 
        the eligible partnership with respect to the teaching and 
        learning of mathematics and science;
            ``(2) a description of how the activities to be carried out 
        by the eligible partnership will be aligned with State academic 
        content standards in mathematics and science and with other 
        educational reform activities that promote student achievement 
        in mathematics and science;
            ``(3) a description of how the activities to be carried out 
        by the eligible partnership will be based on a review of 
        relevant research, and an explanation of why the activities are 
        expected to improve student achievement and to strengthen the 
        quality of mathematics and science instructions; and
            ``(4) a description of--
                    ``(A) how the eligible partnership will carry out 
                the activities described in section 2023(c); and
                    ``(B) the eligible partnership's evaluation and 
                accountability plan described in section 2024.

``SEC. 2023. MATH AND SCIENCE PARTNERSHIP SUBGRANTS.

    ``(a) In General.--From the amount described in section 2012(d), 
the State educational agency, working in conjunction with the State 
agency for higher education (if such agencies are separate), shall 
award subgrants on a competitive basis to eligible partnerships to 
enable such partnerships to carry out activities described in 
subsection (c).
    ``(b) Duration.--The State shall award subgrants under this subpart 
for a period of not less than 2 and not more than 5 years.
    ``(c) Authorized Activities.--A recipient of funds provided under 
this subpart may use the funds for the following activities related to 
elementary or secondary schools:
            ``(1) Establishing and operating mathematics and science 
        summer professional development workshops or institutes for 
        elementary and secondary school teachers that--
                    ``(A) shall--
                            ``(i) directly relate to the curriculum and 
                        content areas in which the teacher provides 
                        instruction, and focus only secondarily on 
                        pedagogy;
                            ``(ii) enhance the ability of a teacher to 
                        understand and use the State's academic content 
                        standards for mathematics and science and to 
                        select appropriate curricula;
                            ``(iii) train teachers to use curricula 
                        that are--
                                    ``(I) based on scientific research;
                                    ``(II) aligned with State academic 
                                content standards; and
                                    ``(III) object-centered, 
                                experiment-oriented, and concept- and 
                                content-based; and
                            ``(iv) provide supplemental assistance and 
                        follow-up training during the school year for 
                        summer institute graduates; and
                    ``(B) may include--
                            ``(i) programs that provide prospective 
                        teachers and novice teachers opportunities to 
                        work under the guidance of experienced teachers 
                        and college faculty;
                            ``(ii) instruction in the use of data and 
                        assessments to inform and instruct classroom 
                        practice; and
                            ``(iii) professional development 
                        activities, including supplemental and follow-
                        up activities, such as curriculum alignment, 
                        distance learning, and activities that train 
                        teachers to utilize technology in the 
                        classroom.
            ``(2) Recruiting to the teaching profession--
                    ``(A) students studying mathematics, engineering, 
                and science; or
                    ``(B) mathematicians, engineers, and scientists 
                currently working in the field.
            ``(3) Establishing and operating programs to bring teachers 
        into contact with working scientists, mathematicians, and 
        engineers, to expand teacher content knowledge of and research 
        in science and mathematics.
    ``(d) Priority.--In awarding subgrants under this subpart, States 
shall give priority to applications seeking funding for the activity 
described in subsection (c)(1).
    ``(e) Coordination.--Partnerships receiving grants under section 
203 of the Higher Education Act of 1965 (20 U.S.C. 1023) shall 
coordinate the use of such funds with any related activities carried 
out by such partnership with funds made available under this subpart.

``SEC. 2024. EVALUATION AND ACCOUNTABILITY PLAN.

    ``(a) In General.--Each eligible partnership receiving a subgrant 
under this subpart shall develop an evaluation and accountability plan 
for activities assisted under this subpart that includes rigorous 
performance objectives that measure the impact of activities funded 
under this subpart.
    ``(b) Contents.--The plan--
            ``(1) shall include measurable goals to increase the number 
        of mathematics and science teachers who participate in content-
        based professional development activities; and
            ``(2) may include objectives and measures for--
                    ``(A) improved student achievement on State 
                mathematics and science assessments;
                    ``(B) increased participation by students in 
                advanced courses in mathematics and science;
                    ``(C) increased percentages of elementary school 
                teachers with academic majors or minors, or group 
                majors or minors, in mathematics, engineering, or the 
                sciences; and
                    ``(D) increased percentages of secondary school 
                classes in mathematics and science taught by teachers 
                with academic majors in mathematics and science, 
                respectively.

``SEC. 2025. REPORTS; REVOCATION OF SUBGRANTS.

    ``(a) Reports.--Each eligible partnership receiving a subgrant 
under this subpart annually shall report to the State regarding the 
eligible partnership's progress in meeting the performance objectives 
described in section 2024.
    ``(b) Revocation.--If the State determines that an eligible 
partnership that receives a subgrant under this subpart for 5 years is 
not making substantial progress in meeting the performance objectives 
described in section 2024 by the end of the third year of the subgrant, 
the subgrant payments shall not be made for the fourth and fifth years.

``SEC. 2026. DEFINITIONS.

    ``In this subpart:
            ``(1) Eligible partnership.--The term `eligible 
        partnership' means a partnership that--
                    ``(A) shall include--
                            ``(i) a State educational agency;
                            ``(ii) a mathematics or science department 
                        of a private independent institution of higher 
                        education or a State-supported public 
                        institution of higher education; and
                            ``(iii) a high need local educational 
                        agency; and
                    ``(B) may include--
                            ``(i) another institution of higher 
                        education or the teacher training department of 
                        such an institution;
                            ``(ii) additional local educational 
                        agencies, public charter schools, public or 
                        private elementary or secondary schools, or a 
                        consortium of such schools;
                            ``(iii) a business; or
                            ``(iv) a nonprofit organization of 
                        demonstrated effectiveness, including a museum 
                        or research institution.
            ``(2) Summer professional development workshop or 
        institute.--The term `summer professional development workshop 
        or institute' means a workshop or institute that--
                    ``(A) is conducted during a period of not less than 
                2 weeks;
                    ``(B) includes as a component a program that 
                provides direct interaction between students and 
                faculty; and
                    ``(C) provides for follow-up training during the 
                academic year that is conducted in the classroom for a 
                period of not less than 3 consecutive or nonconsecutive 
                days, except that--
                            ``(i) if the workshop or institute is 
                        conducted during a two-week period, the follow-
                        up training shall be conducted for a period of 
                        at least 4 days; and
                            ``(ii) if the follow-up training is for 
                        teachers in rural school districts, it may be 
                        conducted through distance learning.

          ``Subpart 3--Subgrants to Local Educational Agencies

``SEC. 2031. LOCAL USE OF FUNDS.

    ``(a) In General.--Subject to subsection (b), each local 
educational agency that receives a subgrant under this subpart may use 
the subgrant to carry out the following activities:
            ``(1) Initiatives to assist in recruiting and hiring fully 
        qualified teachers who will be assigned teaching positions 
        within their field, including--
                    ``(A) providing signing bonuses or other financial 
                incentives, such as differential pay, for teachers to 
                teach in academic subject areas in which there exists a 
                shortage of such fully qualified teachers within a 
                school or the local educational agency;
                    ``(B) establishing programs that--
                            ``(i) recruit professionals from other 
                        fields and provide such professionals with 
                        alternative routes to teacher certification; 
                        and
                            ``(ii) provide increased opportunities for 
                        minorities, individuals with disabilities, and 
                        other individuals underrepresented in the 
                        teaching profession; and
                    ``(C) implementing hiring policies that ensure 
                comprehensive recruitment efforts as a way to expand 
                the applicant pool, such as through identifying 
                teachers certified through alternative routes, coupled 
                with a system of intensive screening designed to hire 
                the most qualified applicant.
            ``(2) Initiatives to promote retention of highly qualified 
        teachers and principals, particularly within elementary and 
        secondary schools with a high percentage of low-achieving 
        students, including programs that provide--
                    ``(A) mentoring to newly hired teachers, such as 
                from master teachers, or principals or superintendents;
                    ``(B) incentives, including financial incentives, 
                to retain teachers who have a record of success in 
                helping low-achieving students improve their academic 
                success; or
                    ``(C) incentives, including financial incentives, 
                to principals who have a record of improving the 
                performance of all students, but particularly students 
                from economically disadvantaged families and students 
                from racial and ethnic minority groups.
            ``(3) Programs and activities that are designed to improve 
        the quality of the teacher force, such as--
                    ``(A) innovative professional development programs 
                (which may be through partnerships including 
                institutions of higher education), including programs 
                that train teachers and principals to utilize 
                technology to improve teaching and learning, are 
                consistent with the requirements of section 2033, and 
                are coordinated with part B of title V;
                    ``(B) development and utilization of proven, cost-
                effective strategies for the implementation of 
                professional development activities, such as through 
                the utilization of technology and distance learning;
                    ``(C) tenure reform;
                    ``(D) merit pay;
                    ``(E) testing of elementary and secondary school 
                teachers in the subject areas taught by such teachers;
                    ``(F) professional development programs that 
                provide instruction in how to teach children with 
                different learning styles, particularly children with 
                disabilities and children with special learning needs 
                (including those who are gifted and talented); and
                    ``(G) professional development programs that 
                provide instruction in methods of improving student 
                behavior in the classroom and how to identify early and 
                appropriate interventions to help children described in 
                subparagraph (F) learn.
            ``(4) Teacher opportunity payments, consistent with section 
        2034.
            ``(5) Professional activities designed to improve the 
        quality of principals and superintendents, including the 
        development and support of academies to help exceptionally 
        talented aspiring or current principals and superintendents 
        become outstanding managers and educational leaders.
            ``(6) Hiring fully qualified teachers, including teachers 
        who become fully qualified through State and local alternative 
        routes, and special education teachers, in order to reduce 
        class size, particularly in the early grades.
            ``(7) Teacher advancement initiatives that promote 
        professional growth and emphasize multiple career paths (such 
        as career teacher, mentor teacher, and master teacher) and pay 
        differentiation.
    ``(b) Special Rule.--
            ``(1) In general.--For any fiscal year for which the amount 
        described in section 2012(d)(2)(A) for a State is less than 15 
        percent of the total amount of the funds that the State 
        receives under this subpart for the year that the State does 
        not reserve under section 2012(b), each local educational 
        agency that receives a subgrant under this subpart from the 
        State shall use the funds to comply with paragraph (2).
            ``(2) Requirement.--A local educational agency required to 
        comply with this paragraph shall use not less than the amount 
        expended by the agency under section 2206(b) of this Act (as in 
        effect on the day before the date of the enactment of the No 
        Child Left Behind Act of 2001), for the fiscal year preceding 
        the year in which such enactment occurs, to carry out 
        professional development activities in mathematics and science.

``SEC. 2032. LOCAL APPLICATIONS.

    ``(a) In General.--A local educational agency seeking to receive a 
subgrant from a State under this subpart shall submit an application to 
the State--
            ``(1) at such time as the State shall require; and
            ``(2) which is coordinated with other programs under this 
        Act, or other Acts, as appropriate.
    ``(b) Local Application Contents.--The local application described 
in subsection (a), shall include, at a minimum, the following:
            ``(1) An assurance that the local educational agency will 
        target funds to schools within the jurisdiction of the local 
        educational agency that--
                    ``(A) have the lowest proportion of fully qualified 
                teachers;
                    ``(B) have the largest average class size; or
                    ``(C) are identified for school improvement under 
                section 1116(b).
            ``(2) A description of how the local educational agency 
        will coordinate professional development activities authorized 
        under this subpart with professional development activities 
        provided through other Federal, State, and local programs, 
        including those authorized under title I, part A of title III, 
        parts A and B of title V, and (where applicable) the 
        Individuals with Disabilities Education Act and the Carl D. 
        Perkins Vocational and Technical Education Act.
            ``(3) A description of how the local educational agency 
        will integrate funds under this subpart with funds received 
        under part B of title V that are used for professional 
        development to train teachers to utilize technology to improve 
        teaching and learning.
            ``(4) A description of how the local educational agency has 
        collaborated with teachers, principals, parents, and 
        administrators in the preparation of the application.

``SEC. 2033. PROFESSIONAL DEVELOPMENT FOR TEACHERS.

    ``(a) Requirements for Professional Development Activities.--
Professional development activities under this subpart shall--
            ``(1) meet the requirements of section 1119(a)(2);
            ``(2) support professional development activities that give 
        teachers, principals, and administrators the knowledge and 
        skills to provide students with the opportunity to meet 
        challenging State academic content standards and student 
        achievement standards;
            ``(3) support the recruiting, hiring, and training of fully 
        qualified teachers, including teachers fully qualified through 
        State and local alternative routes;
            ``(4) advance teacher understanding of effective 
        instructional strategies based on scientifically based research 
        for improving student achievement, at a minimum, in reading or 
        language arts and mathematics;
            ``(5) be directly related to the curriculum and content 
        areas in which the teacher provides instruction, except that 
        this paragraph shall not apply to subparagraphs (F) and (G) of 
        section 2031(3);
            ``(6) be designed to enhance the ability of a teacher to 
        understand and use the State's standards for the subject area 
        in which the teacher provides instruction;
            ``(7) be tied to scientifically based research 
        demonstrating the effectiveness of such professional 
        development activities or programs in increasing student 
        achievement or substantially increasing the knowledge and 
        teaching skills of teachers;
            ``(8) 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;
            ``(9) be developed with extensive participation of 
        teachers, principals, parents, and administrators of schools to 
        be served under this subpart;
            ``(10) be designed to give teachers of limited English 
        proficient children, and other teachers and instructional 
        staff, the knowledge and skills to provide instruction and 
        appropriate language and academic support services to such 
        children, including the appropriate use of curriculum and 
        assessments;
            ``(11) to the extent appropriate, provide training for 
        teachers and principals in the use of technology so that 
        technology and its applications are effectively used in the 
        classroom to improve teaching and learning in the curriculum 
        and academic content areas in which the teachers provide 
        instruction;
            ``(12) as a whole, be regularly evaluated for their impact 
        on increased teacher effectiveness and improved student 
        achievement, with the findings of such evaluations used to 
        improve the quality of professional development; and
            ``(13) provide instruction in methods of teaching children 
        with special needs.
    ``(b) Professional Development Activities.--Professional 
development activities under this subpart may include--
            ``(1) instruction in the use of data and assessments to 
        inform and instruct classroom practice;
            ``(2) instruction in ways that teachers, principals, pupil 
        services personnel, and school administrators may work more 
        effectively with parents;
            ``(3) the forming of partnerships with institutions of 
        higher education to establish school-based teacher training 
        programs that provide prospective teachers and novice teachers 
        with an opportunity to work under the guidance of experienced 
        teachers and college faculty;
            ``(4) the creation of programs for paraprofessionals 
        (assisting teachers employed by a local educational agency 
        receiving assistance under this part) to obtain the education 
        necessary for such paraprofessionals to become licensed and 
        certified teachers; and
            ``(5) activities that provide follow-up training to 
        teachers who have participated in professional development 
        activities which are designed to ensure that the knowledge and 
        skills learned by the teacher are implemented in the classroom.
    ``(c) Accountability.--
            ``(1) In general.--If, after any fiscal year, a State 
        determines that the programs or activities funded by a local 
        educational agency fail to meet the requirements of subsection 
        (a), the State shall notify the agency that--
                    ``(A) it may be subject to paragraph (2); and
                    ``(B) technical assistance is available from the 
                State to help the agency meet those requirements.
            ``(2) Requirement to provide teacher opportunity 
        payments.--A local educational agency that has been notified by 
        a State for 2 consecutive years under paragraph (1) shall 
        expend under section 2034 for the succeeding fiscal year a 
        proportion of the amount the agency receives under this subpart 
        that is equal to the proportion of the amount the agency 
        received under this part for the preceding fiscal year that the 
        agency used for professional development.

``SEC. 2034. TEACHER OPPORTUNITY PAYMENTS.

    ``(a) In General.--A local educational agency receiving funds under 
this subpart may (or, in the case of a local educational agency 
described in section 2033(c)(2), shall) provide funds directly to a 
teacher or a group of teachers seeking opportunities to participate in 
a professional development activity of their choice that meets the 
requirements of section 2033(a) and is selected in consultation with 
the principal in order to coordinate such professional development with 
other reform efforts at the school.
    ``(b) Notice to Teachers.--Local educational agencies distributing 
funds under this section shall establish and implement a timely process 
through which proper notice of availability of funds will be given to 
all teachers within schools identified by the agency and shall develop 
a process whereby teachers will have regular consultation with and be 
specifically recommended by principals to participate in such program 
by virtue of--
            ``(1) a teacher not being fully qualified to teach in the 
        subject or subjects in which they teach; or
            ``(2) a teacher's need for additional assistance to ensure 
        that the teacher's students make progress toward meeting 
        challenging State academic content standards and student 
        achievement standards.
    ``(c) Selection of Teachers.--If adequate funding is not available 
to provide payments under this section to all teachers seeking such 
assistance or identified as needing such assistance pursuant to 
subsection (b), a local educational agency shall establish procedures 
for selecting teachers that give priority to teachers described in 
paragraph (1) or (2) of subsection (b).

            ``Subpart 4--Mid-Career Transitions to Teaching

                ``CHAPTER 1--TROOPS-TO-TEACHERS PROGRAM

``SEC. 2041. AUTHORIZATION OF TROOPS-TO-TEACHERS PROGRAM.

    ``(a) Program Authorized.--The Secretary may carry out a program 
(to be known as the `Troops-to-Teachers Program')--
            ``(1) to assist eligible members and former members of the 
        Armed Forces described in section 2042 to obtain certification 
        or licensure as fully qualified elementary school teachers, 
        secondary school teachers, or vocational or technical teachers; 
        and
            ``(2) to facilitate the employment of such members in 
        elementary schools or secondary schools or as vocational or 
        technical teachers.
    ``(b) Administration of Program.--The Secretary shall enter into a 
memorandum of agreement with the Secretary of Defense under which the 
Secretary of Defense, acting through the Defense Activity for Non-
Traditional Education Support of the Department of Defense, will 
perform the actual administration of the Program, other than section 
2045. Using funds appropriated to the Secretary to carry out this 
chapter, the Secretary shall transfer to the Secretary of Defense such 
amounts as may be necessary to administer the Program pursuant to the 
memorandum of agreement.
    ``(c) Information Regarding Program.--The Secretary shall provide 
to the Secretary of Defense, for distribution as part of preseparation 
counseling provided under section 1142 of title 10, United States Code, 
to members of the Armed Forces described in section 2042, information 
regarding the Troops-to-Teachers Program and applications to 
participate in the program.
    ``(d) Placement Assistance and Referral Services.--As part of the 
Troops-to-Teachers Program, the Secretary may, with the agreement of 
the Secretary of Defense, provide placement assistance and referral 
services regarding employment opportunities with local educational 
agencies to members of the Armed Forces who are discharged or released 
from active duty under other than adverse conditions. Unless the member 
is also selected to participate in the Program under section 2042, a 
member receiving placement assistance and referral services under the 
authority of this subsection is not eligible for financial assistance 
under section 2043.

``SEC. 2042. RECRUITMENT AND SELECTION OF PROGRAM PARTICIPANTS.

    ``(a) Eligible Members.--The following members and former members 
of the Armed Forces are eligible for selection to participate in the 
Troops-to-Teachers Program:
            ``(1) Any member who--
                    ``(A) on or after October 1, 1999, becomes entitled 
                to retired or retainer pay in the manner provided in 
                title 10 or title 14, United States Code; or
                    ``(B) on or after the date of the enactment of the 
                No Child Left Behind Act of 2001, has an approved date 
                of voluntary retirement and, as of the date the member 
                submits an application to participate in the Program, 
                has one year or less of active duty remaining before 
                retirement.
            ``(2) Any member who, on or after the date of the enactment 
        of the No Child Left Behind Act of 2001--
                    ``(A) is separated or released from active duty 
                after six or more years of continuous active duty 
                immediately before the separation or release; and
                    ``(B) executes a reserve commitment agreement for a 
                period of three years under subsection (e)(2).
            ``(3) Any member who, on or after the date of the enactment 
        of the No Child Left Behind Act of 2001, is retired or 
        separated for physical disability under chapter 61 of title 10, 
        United States Code.
            ``(4) Any member who--
                    ``(A) during the period beginning on October 1, 
                1990, and ending on September 30, 1999, was 
                involuntarily discharged or released from active duty 
                for purposes of a reduction of force after six or more 
                years of continuous active duty immediately before the 
                discharge or release; or
                    ``(B) applied for the teacher placement program 
                administered under section 1151 of title 10, United 
                States Code, before its repeal, and who satisfied the 
                eligibility criteria specified in subsection (c) of 
                such section 1151.
    ``(b) Submission of Applications.--
            ``(1) Form and submission.--Selection of eligible members 
        and former members of the Armed Forces to participate in the 
        Troops-to-Teachers Program shall be made on the basis of 
        applications submitted to the Secretary within the time periods 
        specified in paragraph (2). An application shall be in such 
        form and contain such information as the Secretary may require.
            ``(2) Time for submission.--An application shall be 
        considered to be submitted on a timely basis under paragraph 
        (1) if--
                    ``(A) in the case of a member or former member of 
                the Armed Forces described in paragraph (1), (2), or 
                (3) of subsection (a), the application is submitted not 
                later than four years after the date on which the 
                member is retired or separated or released from active 
                duty, whichever applies to the member; or
                    ``(B) in the case of a member or former member 
                described in subsection (a)(4), the application is 
                submitted not later than September 30, 2003.
    ``(c) Selection Criteria.--
            ``(1) Establishment.--Subject to paragraphs (2) and (3), 
        the Secretary shall prescribe the criteria to be used to select 
        eligible members and former members of the Armed Forces to 
        participate in the Troops-to-Teachers Program.
            ``(2) Educational background.--If a member or former member 
        of the Armed Forces described in paragraph (1), (2), or (3) of 
        subsection (a) is applying for assistance for placement as an 
        elementary or secondary school teacher, the Secretary shall 
        require the member to have received a baccalaureate or advanced 
        degree from an accredited institution of higher education. If 
        such a member is applying for assistance for placement as a 
        vocational or technical teacher, the Secretary shall require 
        the member--
                    ``(A) to have received the equivalent of one year 
                of college from an accredited institution of higher 
                education and have six or more years of military 
                experience in a vocational or technical field; or
                    ``(B) to otherwise meet the certification or 
                licensure requirements for a vocational or technical 
                teacher in the State in which the member seeks 
                assistance for placement under the Program.
            ``(3) Honorable service.--A member or former member of the 
        Armed Forces is eligible to participate in the Troops-to-
        Teachers Program only if the member's last period of service in 
        the Armed Forces was characterized as honorable. If the member 
        is selected to participate in the Program before the retirement 
        of the member or the separation or release of the member from 
        active duty, the member may continue to participate in the 
        Program only if, upon the retirement or separation or release 
        from active duty, the member's last period of service is 
        characterized as honorable.
    ``(d) Selection Priorities.--In selecting eligible members and 
former members of the Armed Forces to receive assistance for placement 
as elementary or secondary school teachers or vocational or technical 
teachers, the Secretary shall give priority to members who have 
educational or military experience in science, mathematics, special 
education, or vocational or technical subjects and agree to seek 
employment as science, mathematics, or special education teachers in 
elementary or secondary schools or in other schools under the 
jurisdiction of a local educational agency.
    ``(e) Other Conditions on Selection.--
            ``(1) Selection subject to funding.--The Secretary may not 
        select an eligible member or former member of the Armed Forces 
        to participate in the Troops-to-Teachers Program under this 
        section and receive financial assistance under section 2043 
        unless the Secretary has sufficient appropriations for the 
        Program available at the time of the selection to satisfy the 
        obligations to be incurred by the United States under section 
        2043 with respect to the member.
            ``(2) Reserve commitment agreement.--The Secretary may not 
        select an eligible member or former member of the Armed Forces 
        described in subsection (a)(2)(A) to participate in the Troops-
        to-Teachers Program under this section and receive financial 
        assistance under section 2043 unless--
                    ``(A) the Secretary notifies the Secretary 
                concerned and the member that the Secretary has 
                reserved a full stipend or bonus under section 2043 for 
                the member; and
                    ``(B) the member executes a written agreement with 
                the Secretary concerned to serve as a member of the 
                Selected Reserve of a reserve component of the Armed 
                Forces for a period of three years (in addition to any 
                other reserve commitment the member may have).

``SEC. 2043. PARTICIPATION AGREEMENT AND FINANCIAL ASSISTANCE.

    ``(a) Participation Agreement.--An eligible member or former member 
of the Armed Forces selected to participate in the Troops-to-Teachers 
Program under section 2042 and receive financial assistance under this 
section shall be required to enter into an agreement with the Secretary 
in which the member agrees--
            ``(1) to obtain, within such time as the Secretary may 
        require, certification or licensure as a fully qualified 
        elementary school teacher, secondary school teacher, or 
        vocational or technical teacher; and
            ``(2) to accept an offer of full-time employment as a fully 
        qualified elementary school teacher, secondary school teacher, 
        or vocational or technical teacher for not less than three 
        school years with a local educational agency or public charter 
        school, to begin the school year after obtaining that 
        certification or licensure.
    ``(b) Violation of Participation Agreement; Exceptions.--A 
participant in the Troops-to-Teachers Program shall not be considered 
to be in violation of the participation agreement entered into under 
subsection (a) during any period in which the participant--
            ``(1) is pursuing a full-time course of study related to 
        the field of teaching at an institution of higher education;
            ``(2) is serving on active duty as a member of the Armed 
        Forces;
            ``(3) is temporarily totally disabled for a period of time 
        not to exceed three years as established by sworn affidavit of 
        a qualified physician;
            ``(4) is unable to secure employment for a period not to 
        exceed 12 months by reason of the care required by a spouse who 
        is disabled;
            ``(5) is seeking and unable to find full-time employment as 
        a fully qualified teacher in an elementary or secondary school 
        or as a vocational or technical teacher for a single period not 
        to exceed 27 months; or
            ``(6) satisfies the provisions of additional reimbursement 
        exceptions that may be prescribed by the Secretary.
    ``(c) Stipend for Participants.--
            ``(1) Stipend authorized.--Subject to paragraph (2), the 
        Secretary may pay to a participant in the Troops-to-Teachers 
        Program selected under section 2042 a stipend in an amount up 
        to $5,000.
            ``(2) Limitation.--The total number of stipends that may be 
        paid under paragraph (1) in any fiscal year may not exceed 
        3,000.
    ``(d) Bonus for Participants.--
            ``(1) Bonus authorized.--Subject to paragraph (2), the 
        Secretary may, in lieu of paying a stipend under subsection 
        (c), pay a bonus of $10,000 to a participant in the Troops-to-
        Teachers Program selected under section 2042 who agrees in the 
        participation agreement under subsection (a) to accept full-
        time employment as a fully qualified elementary school teacher, 
        secondary school teacher, or vocational or technical teacher 
        for not less than three years in a high need school.
            ``(2) Limitation.--The total number of bonuses that may be 
        paid under paragraph (1) in any fiscal year may not exceed 
        1,000.
            ``(3) High need school defined.--For purposes of this 
        subsection, the term `high need school' means a public 
        elementary school, public secondary school, or public charter 
        school that meets one or more of the following criteria:
                    ``(A) At least 50 percent of the students enrolled 
                in the school were children counted under subsection 
                (c) of section 1124 for purposes of making grants under 
                such section to local educational agencies, when such 
                counting was most recently performed.
                    ``(B) The school has a large percentage of students 
                who qualify for assistance under part B of the 
                Individuals with Disabilities Education Act (20 U.S.C. 
                1411 et seq.).
                    ``(C) The school meets any other criteria 
                established by the Secretary in consultation with the 
                National Assessment Governing Board.
    ``(e) Treatment of Stipend and Bonus.--A stipend or bonus paid 
under this section to a participant in the Troops-to-Teachers Program 
shall be taken into account in determining the eligibility of the 
participant for Federal student financial assistance provided under 
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
    ``(f) Reimbursement Under Certain Circumstances.--
            ``(1) Reimbursement required.--A participant in the Troops-
        to-Teachers Program who is paid a stipend or bonus under this 
        section shall be required to repay the stipend or bonus under 
        the following circumstances:
                    ``(A) The participant fails to obtain teacher 
                certification or licensure or employment as a fully 
                qualified elementary school teacher, secondary school 
                teacher, or vocational or technical teacher as required 
                by the participation agreement under subsection (a).
                    ``(B) The participant voluntarily leaves, or is 
                terminated for cause, from employment as an elementary 
                school teacher, secondary school teacher, or vocational 
                or technical teacher during the three years of required 
                service in violation of the participation agreement.
                    ``(C) The participant executed a written agreement 
                with the Secretary concerned under section 2042(e)(2) 
                to serve as a member of a reserve component of the 
                Armed Forces for a period of three years and fails to 
                complete the required term of service.
            ``(2) Amount of reimbursement.--A participant required to 
        reimburse the Secretary for a stipend or bonus paid to the 
        participant under this section shall pay an amount that bears 
        the same ratio to the amount of the stipend or bonus as the 
        unserved portion of required service bears to the three years 
        of required service. Any amount owed by the participant shall 
        bear interest at the rate equal to the highest rate being paid 
        by the United States on the day on which the reimbursement is 
        determined to be due for securities having maturities of ninety 
        days or less and shall accrue from the day on which the 
        participant is first notified of the amount due.
            ``(3) Treatment of obligation.--The obligation to reimburse 
        the Secretary under this subsection is, for all purposes, a 
        debt owing the United States. A discharge in bankruptcy under 
        title 11, United States Code, shall not release a participant 
        from the obligation to reimburse the Secretary.
            ``(4) Exceptions to reimbursement requirement.--A 
        participant shall be excused from reimbursement under this 
        subsection if the participant becomes permanently totally 
        disabled as established by sworn affidavit of a qualified 
        physician. The Secretary may also waive reimbursement in cases 
        of extreme hardship to the participant, as determined by the 
        Secretary.
    ``(g) Relationship to Educational Assistance Under Montgomery GI 
Bill.--The receipt by a participant in the Troops-to-Teachers Program 
of a stipend or bonus under this section shall not reduce or otherwise 
affect the entitlement of the participant to any benefits under chapter 
30 of title 38, United States Code, or chapter 1606 of title 10, United 
States Code.

``SEC. 2044. PARTICIPATION BY STATES.

    ``(a) Discharge of State Activities Through Consortia of States.--
The Secretary may permit States participating in the Troops-to-Teachers 
Program to carry out activities authorized for such States under the 
Program through one or more consortia of such States.
    ``(b) Assistance to States.--
            ``(1) Grants authorized.--Subject to paragraph (2), the 
        Secretary may make grants to States participating in the 
        Troops-to-Teachers Program, or to consortia of such States, in 
        order to permit such States or consortia of States to operate 
        offices for purposes of recruiting eligible members and former 
        members of the Armed Forces for participation in the Program 
        and facilitating the employment of participants in the Program 
        as elementary school teachers, secondary school teachers, and 
        vocational or technical teachers.
            ``(2) Limitation.--The total amount of grants under 
        paragraph (1) in any fiscal year may not exceed $4,000,000.

``SEC. 2045. SUPPORT OF INNOVATIVE PRERETIREMENT TEACHER CERTIFICATION 
              PROGRAMS.

    ``(a) Development, Implementation and Demonstration.--The Secretary 
may enter into a memorandum of agreement with a State, an institution 
of higher education, or a consortia of States or institutions of higher 
education, to develop, implement, and demonstrate teacher certification 
programs for members of the Armed Forces described in section 
2042(a)(1)(B) for the purpose of assisting such members to consider and 
prepare for a career as a fully qualified elementary school teacher, 
secondary school teacher, or vocational or technical teacher upon their 
retirement from the Armed Forces.
    ``(b) Program Elements.--A teacher certification program under 
subsection (a) must--
            ``(1) provide recognition of military experience and 
        training as related to licensure or certification requirements;
            ``(2) provide courses of instruction that may be conducted 
        on or near a military installation;
            ``(3) incorporate alternative approaches to achieve teacher 
        certification, such as innovative methods to gaining field-
        based teaching experiences, and assessment of background and 
        experience as related to skills, knowledge, and abilities 
        required of elementary school teachers, secondary school 
        teachers, or vocational or technical teachers;
            ``(4) provide for courses to also be delivered via distance 
        education methods; and
            ``(5) address any additional requirements or specifications 
        as established by the Secretary.
    ``(c) Application Procedures.--A State or institution of higher 
education (or a consortia of States or institutions of higher 
education) that has a program leading to State approved teacher 
certification programs may submit a proposal to the Secretary for 
consideration under subsection (a). The Secretary shall give preference 
to proposals that provide for a sharing of the costs to carry out the 
teacher certification program.
    ``(d) Continuation of Programs.--The purpose of this section is to 
provide funding to develop, implement, and demonstrate teacher 
certification programs under subsection (a). Upon successful completion 
of the demonstration phase, the continued operation of the teacher 
certification programs shall not be the responsibility of the 
Secretary.
    ``(e) Funding Limitation.--The total amount obligated by the 
Secretary under this section in any fiscal year may not exceed 
$5,000,000.

``SEC. 2046. REPORTING REQUIREMENTS.

    ``(a) Report Required.--Not later than March 31 of each year, the 
Secretary (in consultation with the Secretary of Defense and the 
Secretary of Transportation) and the Comptroller General shall each 
submit to Congress a report on the effectiveness of the Troops-to-
Teachers Program in the recruitment and retention of qualified 
personnel by local educational agencies and public charter schools.
    ``(b) Elements of Report.--The report under subsection (a) shall 
include information on the following:
            ``(1) The number of participants in the Troops-to-Teachers 
        Program.
            ``(2) The schools in which the participants are employed.
            ``(3) The grade levels at which the participants teach.
            ``(4) The subject matters taught by the participants.
            ``(5) The rates of retention of the participants by the 
        local educational agencies and public charter schools employing 
        the participants.
            ``(6) Such other matters as the Secretary or the 
        Comptroller General, as the case may be, considers appropriate.
    ``(c) Recommendations.--The report of the Comptroller General under 
this section shall also inclu