[DOCID: f:h1enr.txt]
        H.R.1

                      One Hundred Seventh Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

         Begun and held at the City of Washington on Wednesday,
             the third day of January, two thousand and one


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

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
Sec. 4. Transition.
Sec. 5. Effective date.
Sec. 6. Table of contents of Elementary and Secondary Education Act of 
          1965.

    TITLE I--IMPROVING THE ACADEMIC ACHIEVEMENT OF THE DISADVANTAGED

Sec. 101. Improving the academic achievement of the disadvantaged.

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

Sec. 201. Teacher and principal training and recruiting fund.
Sec. 202. Continuation of awards.

   TITLE III--LANGUAGE INSTRUCTION FOR LIMITED ENGLISH PROFICIENT AND 
                           IMMIGRANT STUDENTS

Sec. 301. Language instruction for limited English proficient children 
          and immigrant children and youth.

                     TITLE IV--21ST CENTURY SCHOOLS

Sec. 401. 21st Century schools.

   TITLE V--PROMOTING INFORMED PARENTAL CHOICE AND INNOVATIVE PROGRAMS

Sec. 501. Innovative programs and parental choice provisions.
Sec. 502. Continuation of awards.

                TITLE VI--FLEXIBILITY AND ACCOUNTABILITY

Sec. 601. Flexibility and accountability.
Sec. 602. Amendment to the National Education Statistics Act of 1994.

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

Sec. 701. Indians, Native Hawaiians, and Alaska Natives.
Sec. 702. Conforming amendments.
Sec. 703. Savings provisions.

                     TITLE VIII--IMPACT AID PROGRAM

Sec. 801. Payments relating to Federal acquisition of real property.
Sec. 802. Payments for eligible federally connected children.
Sec. 803. Construction.
Sec. 804. State consideration of payments in providing State aid.
Sec. 805. Authorization of appropriations.

                      TITLE IX--GENERAL PROVISIONS

Sec. 901. General provisions.

   TITLE X--REPEALS, REDESIGNATIONS, AND AMENDMENTS TO OTHER STATUTES

                             Part A--Repeals

Sec. 1011. Repeals.
Sec. 1012. Conforming clerical and technical amendments.

                         Part B--Redesignations

Sec. 1021. Comprehensive Regional Assistance Centers.
Sec. 1022. National Diffusion Network.
Sec. 1023. Eisenhower Regional Mathematics and Science Education 
          Consortia.
Sec. 1024. Technology-based technical assistance.
Sec. 1025. Conforming amendments.

                       Part C--Homeless Education

Sec. 1031. Short title.
Sec. 1032. Education for homeless children and youths.
Sec. 1033. Conforming amendment.
Sec. 1034. Technical amendment.

              Part D--Native American Education Improvement

Sec. 1041. Short title.
Sec. 1042. Amendments to the Education Amendments of 1978.
Sec. 1043. Tribally Controlled Schools Act of 1988.
Sec. 1044. Lease payments by the Ojibwa Indian School.
Sec. 1045. Enrollment and general assistance payments.

                  Part E--Higher Education Act of 1965

Sec. 1051. Preparing tomorrow's teachers to use technology.
Sec. 1052. Continuation of awards.

                Part F--General Education Provisions Act

Sec. 1061. Student privacy, parental access to information, and 
          administration of certain physical examinations to minors.
Sec. 1062. Technical corrections.

                  Part G--Miscellaneous Other Statutes

Sec. 1071. Title 5 of the United States Code.
Sec. 1072. Department of Education Organization Act.
Sec. 1073. Education Flexibility Partnership Act of 1999.
Sec. 1074. Educational Research, Development, Dissemination, and 
          Improvement Act of 1994.
Sec. 1075. National Child Protection Act of 1993.
Sec. 1076. Technical and conforming amendments.

SEC. 3. REFERENCES.

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

SEC. 4. TRANSITION.

    (a) Multi-Year Awards.--Except as otherwise provided in this Act, 
the recipient of a multi-year award under the Elementary and Secondary 
Education Act of 1965, as that Act was in effect prior to the date of 
enactment of this Act, shall continue to receive funds in accordance 
with the terms of that award, except that no additional funds may be 
awarded after September 30, 2002.
    (b) Planning and Transition.--Notwithstanding any other provision 
of law, a recipient of funds under the Elementary and Secondary 
Education Act of 1965, as that Act was in effect prior to the date of 
enactment of this Act, may use funds available to the recipient under 
that predecessor authority to carry out necessary and reasonable 
planning and transition activities in order to ensure an orderly 
implementation of programs authorized by this Act, and the amendments 
made by this Act.
    (c) Orderly Transition.--The Secretary shall take such steps as are 
necessary to provide for the orderly transition to, and implementation 
of, programs authorized by this Act, and by the amendments made by this 
Act, from programs authorized by the Elementary and Secondary Education 
Act of 1965, as that Act was in effect prior to the date of enactment 
of this Act.

SEC. 5. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, this 
Act, and the amendments made by this Act, shall be effective upon the 
date of enactment of this Act.
    (b) Noncompetitive Programs.--With respect to noncompetitive 
programs under which any funds are allotted by the Secretary of 
Education to recipients on the basis of a formula, this Act, and the 
amendments made by this Act, shall take effect on July 1, 2002.
    (c) Competitive Programs.--With respect to programs that are 
conducted by the Secretary on a competitive basis, this Act, and the 
amendments made by this Act, shall take effect with respect to 
appropriations for use under those programs for fiscal year 2002.
    (d) Impact Aid.--With respect to title VIII (Impact Aid), this Act, 
and the amendments made by this Act, shall take effect with respect to 
appropriations for use under that title for fiscal year 2002.

SEC. 6. TABLE OF CONTENTS OF ELEMENTARY AND SECONDARY EDUCATION ACT OF 
              1965.

    The Act is amended--
        (1) in the heading of section 1, by striking ``table of 
    contents'' and inserting ``short title''; and
        (2) by adding after section 1 the following new section:

``SEC. 2. TABLE OF CONTENTS.

    ``The table of contents for this Act is as follows:

``Sec. 1. Short title.
``Sec. 2. Table of contents.

   ``TITLE I--IMPROVING THE ACADEMIC ACHIEVEMENT OF THE DISADVANTAGED

``Sec. 1001. Statement of purpose.
``Sec. 1002. Authorization of appropriations.
``Sec. 1003. School improvement.
``Sec. 1004. State administration.

    ``Part A--Improving Basic Programs Operated by Local Educational 
                                Agencies

                 ``Subpart 1--Basic Program Requirements

``Sec. 1111. State plans.
``Sec. 1112. Local educational agency plans.
``Sec. 1113. Eligible school attendance areas.
``Sec. 1114. Schoolwide programs.
``Sec. 1115. Targeted assistance schools.
``Sec. 1116. Academic assessment and local educational agency and school 
          improvement.
``Sec. 1117. School support and recognition.
``Sec. 1118. Parental involvement.
``Sec. 1119. Qualifications for teachers and paraprofessionals.
``Sec. 1120. Participation of children enrolled in private schools.
``Sec. 1120A. Fiscal requirements.
``Sec. 1120B. Coordination requirements.

                        ``Subpart 2--Allocations

``Sec. 1121. Grants for the outlying areas and the Secretary of the 
          Interior.
``Sec. 1122. Allocations to States.
``Sec. 1124. Basic grants to local educational agencies.
``Sec. 1124A. Concentration grants to local educational agencies.
``Sec. 1125. Targeted grants to local educational agencies.
``Sec. 1125AA. Adequacy of funding of targeted grants to local 
          educational agencies in fiscal years after fiscal year 2001.
``Sec. 1125A. Education finance incentive grant program.
``Sec. 1126. Special allocation procedures.
``Sec. 1127. Carryover and waiver.

           ``Part B--Student Reading Skills Improvement Grants

                       ``Subpart 1--Reading First

``Sec. 1201. Purposes.
``Sec. 1202. Formula grants to State educational agencies.
``Sec. 1203. State formula grant applications.
``Sec. 1204. Targeted assistance grants.
``Sec. 1205. External evaluation.
``Sec. 1206. National activities.
``Sec. 1207. Information dissemination.
``Sec. 1208. Definitions.

                    ``Subpart 2--Early Reading First

``Sec. 1221. Purposes; definitions.
``Sec. 1222. Local Early Reading First grants.
``Sec. 1223. Federal administration.
``Sec. 1224. Information dissemination.
``Sec. 1225. Reporting requirements.
``Sec. 1226. Evaluation.

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

``Sec. 1231. Statement of purpose.
``Sec. 1232. Program authorized.
``Sec. 1233. State educational agency programs.
``Sec. 1234. Uses of funds.
``Sec. 1235. Program elements.
``Sec. 1236. Eligible participants.
``Sec. 1237. Applications.
``Sec. 1238. Award of subgrants.
``Sec. 1239. Evaluation.
``Sec. 1240. Indicators of program quality.
``Sec. 1241. Research.
``Sec. 1242. Construction.

        ``Subpart 4--Improving Literacy Through School Libraries

``Sec. 1251. Improving literacy through school libraries.

                ``Part C--Education of Migratory Children

``Sec. 1301. Program purpose.
``Sec. 1302. Program authorized.
``Sec. 1303. State allocations.
``Sec. 1304. State applications; services.
``Sec. 1305. Secretarial approval; peer review.
``Sec. 1306. Comprehensive needs assessment and service-delivery plan; 
          authorized activities.
``Sec. 1307. Bypass.
``Sec. 1308. Coordination of migrant education activities.
``Sec. 1309. Definitions.

 ``Part D--Prevention and Intervention Programs for Children and Youth 
                who are Neglected, Delinquent, or At-risk

``Sec. 1401. Purpose and program authorization.
``Sec. 1402. Payments for programs under this part.

                   ``Subpart 1--State Agency Programs

``Sec. 1411. Eligibility.
``Sec. 1412. Allocation of funds.
``Sec. 1413. State reallocation of funds.
``Sec. 1414. State plan and State agency applications.
``Sec. 1415. Use of funds.
``Sec. 1416. Institution-wide projects.
``Sec. 1417. Three-year programs or projects.
``Sec. 1418. Transition services.
``Sec. 1419. Evaluation; technical assistance; annual model program.

                   ``Subpart 2--Local Agency Programs

``Sec. 1421. Purpose.
``Sec. 1422. Programs operated by local educational agencies.
``Sec. 1423. Local educational agency applications.
``Sec. 1424. Uses of funds.
``Sec. 1425. Program requirements for correctional facilities receiving 
          funds under this section.
``Sec. 1426. Accountability.

                     ``Subpart 3--General Provisions

``Sec. 1431. Program evaluations.
``Sec. 1432. Definitions.

                ``Part E--National Assessment of Title I

``Sec. 1501. Evaluations.
``Sec. 1502. Demonstrations of innovative practices.
``Sec. 1503. Assessment evaluation.
``Sec. 1504. Close Up fellowship program.

                  ``Part F--Comprehensive School Reform

``Sec. 1601. Purpose.
``Sec. 1602. Program authorization.
``Sec. 1603. State applications.
``Sec. 1604. State use of funds.
``Sec. 1605. Local applications.
``Sec. 1606. Local use of funds.
``Sec. 1607. Evaluation and reports.
``Sec. 1608. Quality initiatives.

                  ``Part G--Advanced Placement Programs

``Sec. 1701. Short title.
``Sec. 1702. Purposes.
``Sec. 1703. Funding distribution rule.
``Sec. 1704. Advanced placement test fee program.
``Sec. 1705. Advanced placement incentive program grants.
``Sec. 1706. Supplement, not supplant.
``Sec. 1707. Definitions.

                   ``Part H--School Dropout Prevention

``Sec. 1801. Short title.
``Sec. 1802. Purpose.
``Sec. 1803. Authorization of appropriations.

               ``Subpart 1--Coordinated National Strategy

``Sec. 1811. National activities.

            ``Subpart 2--School Dropout Prevention Initiative

``Sec. 1821. Definitions.
``Sec. 1822. Program authorized.
``Sec. 1823. Applications.
``Sec. 1824. State reservation.
``Sec. 1825. Strategies and capacity building.
``Sec. 1826. Selection of local educational agencies for subgrants.
``Sec. 1827. Community based organizations.
``Sec. 1828. Technical assistance.
``Sec. 1829. School dropout rate calculation.
``Sec. 1830. Reporting and accountability.

                      ``Part I--General Provisions

``Sec. 1901. Federal regulations.
``Sec. 1902. Agreements and records.
``Sec. 1903. State administration.
``Sec. 1904. Local educational agency spending audits.
``Sec. 1905. Prohibition against Federal mandates, direction, or 
          control.
``Sec. 1906. Rule of construction on equalized spending.
``Sec. 1907. State report on dropout data.
``Sec. 1908. Regulations for sections 1111 and 1116.

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

      ``Part A--Teacher and Principal Training and Recruiting Fund

``Sec. 2101. Purpose.
``Sec. 2102. Definitions.
``Sec. 2103. Authorizations of appropriations.

                      ``Subpart 1--Grants to States

``Sec. 2111. Allotments to States.
``Sec. 2112. State applications.
``Sec. 2113. State use of funds.

          ``Subpart 2--Subgrants to Local Educational Agencies

``Sec. 2121. Allocations to local educational agencies.
``Sec. 2122. Local applications and needs assessment.
``Sec. 2123. Local use of funds.

             ``Subpart 3--Subgrants to Eligible Partnerships

``Sec. 2131. Definitions.
``Sec. 2132. Subgrants.
``Sec. 2133. Applications.
``Sec. 2134. Use of funds.

                       ``Subpart 4--Accountability

``Sec. 2141. Technical assistance and accountability.

                    ``Subpart 5--National Activities

``Sec. 2151. National activities of demonstrated effectiveness.

             ``Part B--Mathematics and Science Partnerships

``Sec. 2201. Purpose; definitions.
``Sec. 2202. Grants for mathematics and science partnerships.
``Sec. 2203. Authorization of appropriations.

                ``Part C--Innovation for Teacher Quality

                  ``Subpart 1--Transitions to Teaching

                 ``CHAPTER A--TROOPS-TO-TEACHERS PROGRAM

``Sec. 2301. Definitions.
``Sec. 2302. Authorization of Troops-to-Teachers Program.
``Sec. 2303. Recruitment and selection of program participants.
``Sec. 2304. Participation agreement and financial assistance.
``Sec. 2305. Participation by States.
``Sec. 2306. Support of innovative preretirement teacher certification 
          programs.
``Sec. 2307. Reporting requirements.

               ``CHAPTER B--TRANSITION TO TEACHING PROGRAM

``Sec. 2311. Purposes.
``Sec. 2312. Definitions.
``Sec. 2313. Grant program.
``Sec. 2314. Evaluation and accountability for recruiting and retaining 
          teachers.

                     ``CHAPTER C--GENERAL PROVISIONS

``Sec. 2321. Authorization of appropriations.

                  ``Subpart 2--National Writing Project

``Sec. 2331. Purposes.
``Sec. 2332. National Writing Project.

                      ``Subpart 3--Civic Education

``Sec. 2341. Short title.
``Sec. 2342. Purpose.
``Sec. 2343. General authority.
``Sec. 2344. We the People program.
``Sec. 2345. Cooperative civic education and economic education exchange 
          programs.
``Sec. 2346. Authorization of appropriations.

          ``Subpart 4--Teaching of Traditional American History

``Sec. 2351. Establishment of program.
``Sec. 2352. Authorization of appropriations.

                ``Subpart 5--Teacher Liability Protection

``Sec. 2361. Short title.
``Sec. 2362. Purpose.
``Sec. 2363. Definitions.
``Sec. 2364. Applicability.
``Sec. 2365. Preemption and election of State nonapplicability.
``Sec. 2366. Limitation on liability for teachers.
``Sec. 2367. Allocation of responsibility for noneconomic loss.
``Sec. 2368. Effective date.

            ``Part D--Enhancing Education Through Technology

``Sec. 2401. Short title.
``Sec. 2402. Purposes and goals.
``Sec. 2403. Definitions.
``Sec. 2404. Authorization of appropriations.

             ``Subpart 1--State and Local Technology Grants

``Sec. 2411. Allotment and reallotment.
``Sec. 2412. Use of allotment by State.
``Sec. 2413. State applications.
``Sec. 2414. Local applications.
``Sec. 2415. State activities.
``Sec. 2416. Local activities.

               ``Subpart 2--National Technology Activities

``Sec. 2421. National activities.
``Sec. 2422. National education technology plan.

                 ``Subpart 3--Ready-to-Learn Television

``Sec. 2431. Ready-to-Learn Television.

  ``Subpart 4--Limitation on Availability of Certain Funds for Schools

``Sec. 2441. Internet safety.

  ``TITLE III--LANGUAGE INSTRUCTION FOR LIMITED ENGLISH PROFICIENT AND 
                           IMMIGRANT STUDENTS

``Sec. 3001. Authorizations of appropriations; condition on 
          effectiveness of parts.

   ``Part A--English Language Acquisition, Language Enhancement, and 
                        Academic Achievement Act

``Sec. 3101. Short title.
``Sec. 3102. Purposes.

 ``Subpart 1--Grants and Subgrants for English Language Acquisition and 
                          Language Enhancement

``Sec. 3111. Formula grants to States.
``Sec. 3112. Native American and Alaska Native children in school.
``Sec. 3113. State and specially qualified agency plans.
``Sec. 3114. Within-State allocations.
``Sec. 3115. Subgrants to eligible entities.
``Sec. 3116. Local plans.

             ``Subpart 2--Accountability and Administration

``Sec. 3121. Evaluations.
``Sec. 3122. Achievement objectives and accountability.
``Sec. 3123. Reporting requirements.
``Sec. 3124. Coordination with related programs.
``Sec. 3125. Rules of construction.
``Sec. 3126. Legal authority under State law.
``Sec. 3127. Civil rights.
``Sec. 3128. Programs for Native Americans and Puerto Rico.
``Sec. 3129. Prohibition.

                    ``Subpart 3--National Activities

``Sec. 3131. National professional development project.

                        ``Subpart 4--Definitions

``Sec. 3141. Eligible entity.

      ``Part B--Improving Language Instruction Educational Programs

``Sec. 3201. Short title.
``Sec. 3202. Purpose.
``Sec. 3203. Native American children in school.
``Sec. 3204. Residents of the territories and freely associated states.

            ``Subpart 1--Program Development and Enhancement

``Sec. 3211. Financial assistance for language instruction educational 
          programs.
``Sec. 3212. Program enhancement activities.
``Sec. 3213. Comprehensive school and systemwide improvement activities.
``Sec. 3214. Applications.
``Sec. 3215. Capacity building.
``Sec. 3216. Programs for Native Americans and Puerto Rico.
``Sec. 3217. Evaluations.
``Sec. 3218. Construction.

          ``Subpart 2--Research, Evaluation, and Dissemination

``Sec. 3221. Authority.
``Sec. 3222. Research.
``Sec. 3223. Academic excellence awards.
``Sec. 3224. State grant program.
``Sec. 3225. Instruction materials development.

                  ``Subpart 3--Professional Development

``Sec. 3231. Professional development grants.

           ``Subpart 4--Emergency Immigrant Education Program

``Sec. 3241. Purpose.
``Sec. 3242. State administrative costs.
``Sec. 3243. Withholding.
``Sec. 3244. State allotments.
``Sec. 3245. State applications.
``Sec. 3246. Administrative provisions.
``Sec. 3247. Uses of funds.
``Sec. 3248. Reports.

                       ``Subpart 5--Administration

``Sec. 3251. Release time.
``Sec. 3252. Notification.
``Sec. 3253. Coordination and reporting requirements.

                      ``Part C--General Provisions

``Sec. 3301. Definitions.
``Sec. 3302. Parental notification.
``Sec. 3303. National Clearinghouse.
``Sec. 3304. Regulations.

                    ``TITLE IV--21ST CENTURY SCHOOLS

          ``Part A--Safe and Drug-Free Schools and Communities

``Sec. 4001. Short title.
``Sec. 4002. Purpose.
``Sec. 4003. Authorization of appropriations.

                        ``Subpart 1--State Grants

``Sec. 4111. Reservations and allotments.
``Sec. 4112. Reservation of State funds for safe and drug-free schools.
``Sec. 4113. State application.
``Sec. 4114. Local educational agency program.
``Sec. 4115. Authorized activities.
``Sec. 4116. Reporting.
``Sec. 4117. Programs for Native Hawaiians.

                     ``Subpart 2--National Programs

``Sec. 4121. Federal activities.
``Sec. 4122. Impact evaluation.
``Sec. 4123. Hate crime prevention.
``Sec. 4124. Safe and Drug-Free Schools and Communities Advisory 
          Committee.
``Sec. 4125. National coordinator program.
``Sec. 4126. Community service grant program.
``Sec. 4127. School Security Technology and Resource Center.
``Sec. 4128. National Center for School and Youth Safety.
``Sec. 4129. Grants to reduce alcohol abuse.
``Sec. 4130. Mentoring programs.

                       ``Subpart 3--Gun Possession

``Sec. 4141. Gun-free requirements.

                     ``Subpart 4--General Provisions

``Sec. 4151. Definitions.
``Sec. 4152. Message and materials.
``Sec. 4153. Parental consent.
``Sec. 4154. Prohibited uses of funds.
``Sec. 4155. Transfer of school disciplinary records.

            ``Part B--21st Century Community Learning Centers

``Sec. 4201. Purpose; definitions.
``Sec. 4202. Allotments to States.
``Sec. 4203. State application.
``Sec. 4204. Local competitive grant program.
``Sec. 4205. Local activities.
``Sec. 4206. Authorization of appropriations.

                  ``Part C--Environmental Tobacco Smoke

``Sec. 4301. Short title.
``Sec. 4302. Definitions.
``Sec. 4303. Nonsmoking policy for children's services.
``Sec. 4304. Preemption.

  ``TITLE V--PROMOTING INFORMED PARENTAL CHOICE AND INNOVATIVE PROGRAMS

                      ``Part A--Innovative Programs

``Sec. 5101. Purposes, State and local responsibility.

                  ``Subpart 1--State and Local Programs

``Sec. 5111. Allotment to States.
``Sec. 5112. Allocation to local educational agencies.

                       ``Subpart 2--State Programs

``Sec. 5121. State uses of funds.
``Sec. 5122. State applications.

            ``Subpart 3--Local Innovative Education Programs

``Sec. 5131. Local uses of funds.
``Sec. 5132. Administrative authority.
``Sec. 5133. Local applications.

                     ``Subpart 4--General Provisions

``Sec. 5141. Maintenance of effort.
``Sec. 5142. Participation of children enrolled in private schools.
``Sec. 5143. Federal administration.
``Sec. 5144. Supplement, not supplant.
``Sec. 5145. Definitions.
``Sec. 5146. Authorization of appropriations.

                    ``Part B--Public Charter Schools

                  ``Subpart 1--Charter School Programs

``Sec. 5201. Purpose.
``Sec. 5202. Program authorized.
``Sec. 5203. Applications.
``Sec. 5204. Administration.
``Sec. 5205. National activities.
``Sec. 5206. Federal formula allocation during first year and for 
          successive enrollment expansions.
``Sec. 5207. Solicitation of input from charter school operators.
``Sec. 5208. Records transfer.
``Sec. 5209. Paperwork reduction.
``Sec. 5210. Definitions.
``Sec. 5211. Authorization of appropriations.

  ``Subpart 2--Credit Enhancement Initiatives To Assist Charter School 
           Facility Acquisition, Construction, and Renovation

``Sec. 5221. Purpose.
``Sec. 5222. Grants to eligible entities.
``Sec. 5223. Applications.
``Sec. 5224. Charter school objectives.
``Sec. 5225. Reserve account.
``Sec. 5226. Limitation on administrative costs.
``Sec. 5227. Audits and reports.
``Sec. 5228. No full faith and credit for grantee obligations.
``Sec. 5229. Recovery of funds.
``Sec. 5230. Definitions.
``Sec. 5231. Authorization of appropriations.

          ``Subpart 3--Voluntary Public School Choice Programs

``Sec. 5241. Grants.
``Sec. 5242. Uses of funds.
``Sec. 5243. Applications.
``Sec. 5244. Priorities.
``Sec. 5245. Requirements and voluntary participation.
``Sec. 5246. Evaluations.
``Sec. 5247. Definitions.
``Sec. 5248. Authorization of appropriations.

                   ``Part C--Magnet Schools Assistance

``Sec. 5301. Findings and purpose.
``Sec. 5302. Definition.
``Sec. 5303. Program authorized.
``Sec. 5304. Eligibility.
``Sec. 5305. Applications and requirements.
``Sec. 5306. Priority.
``Sec. 5307. Use of funds.
``Sec. 5308. Prohibition.
``Sec. 5309. Limitations.
``Sec. 5310. Evaluations.
``Sec. 5311. Authorization of appropriations; reservation.

             ``Part D--Fund for the Improvement of Education

``Sec. 5401. Authorization of appropriations.

           ``Subpart 1--Fund for the Improvement of Education

``Sec. 5411. Programs authorized.
``Sec. 5412. Applications.
``Sec. 5413. Program requirements.
``Sec. 5414. Studies of national significance.

    ``Subpart 2--Elementary and Secondary School Counseling Programs

``Sec. 5421. Elementary and secondary school counseling programs.

            ``Subpart 3--Partnerships in Character Education

``Sec. 5431. Partnerships in Character Education program.

                ``Subpart 4--Smaller Learning Communities

``Sec. 5441. Smaller learning communities.

   ``Subpart 5--Reading Is Fundamental--Inexpensive Book Distribution 
                                 Program

``Sec. 5451. Inexpensive book distribution program for reading 
          motivation.

                ``Subpart 6--Gifted and Talented Students

``Sec. 5461. Short title.
``Sec. 5462. Purpose.
``Sec. 5463. Rule of construction.
``Sec. 5464. Authorized programs.
``Sec. 5465. Program priorities.
``Sec. 5466. General provisions.

                    ``Subpart 7--Star Schools Program

``Sec. 5471. Short title.
``Sec. 5472. Purposes.
``Sec. 5473. Grant program authorized.
``Sec. 5474. Applications.
``Sec. 5475. Other grant assistance.
``Sec. 5476. Administrative provisions.
``Sec. 5477. Definitions.

                       ``Subpart 8--Ready to Teach

``Sec. 5481. Grants.
``Sec. 5482. Application required.
``Sec. 5483. Reports and evaluation.
``Sec. 5484. Digital educational programming grants.
``Sec. 5485. Administrative costs.

            ``Subpart 9--Foreign Language Assistance Program

``Sec. 5491. Short title.
``Sec. 5492. Program authorized.
``Sec. 5493. Applications.
``Sec. 5494. Elementary school foreign language incentive program.

                    ``Subpart 10--Physical Education

``Sec. 5501. Short title.
``Sec. 5502. Purpose.
``Sec. 5503. Program authorized.
``Sec. 5504. Applications.
``Sec. 5505. Requirements.
``Sec. 5506. Administrative provisions.
``Sec. 5507. Supplement, not supplant.

               ``Subpart 11--Community Technology Centers

``Sec. 5511. Purpose and program authorization.
``Sec. 5512. Eligibility and application requirements.
``Sec. 5513. Uses of funds.

   ``Subpart 12--Educational, Cultural, Apprenticeship, and Exchange 
  Programs for Alaska Natives, Native Hawaiians, and Their Historical 
              Whaling and Trading Partners in Massachusetts

``Sec. 5521. Short title.
``Sec. 5522. Findings and purposes.
``Sec. 5523. Program authorization.
``Sec. 5524. Administrative provisions.
``Sec. 5525. Availability of funds.
``Sec. 5526. Definitions.

             ``Subpart 13--Excellence in Economic Education

``Sec. 5531. Short title.
``Sec. 5532. Purpose and goals.
``Sec. 5533. Grant program authorized.
``Sec. 5534. Applications.
``Sec. 5535. Requirements.
``Sec. 5536. Administrative provisions.
``Sec. 5537. Supplement, not supplant.

      ``Subpart 14--Grants to Improve the Mental Health of Children

``Sec. 5541. Grants for the integration of schools and mental health 
          systems.
``Sec. 5542. Promotion of school readiness through early childhood 
          emotional and social development.

                     ``Subpart 15--Arts in Education

``Sec. 5551. Assistance for arts education.

 ``Subpart 16--Parental Assistance and Local Family Information Centers

``Sec. 5561. Purposes.
``Sec. 5562. Grants authorized.
``Sec. 5563. Applications.
``Sec. 5564. Uses of funds.
``Sec. 5565. Administrative provisions.
``Sec. 5566. Local family information centers.

               ``Subpart 17--Combatting Domestic Violence

``Sec. 5571. Grants to combat the impact of experiencing or witnessing 
          domestic violence on elementary and secondary school children.

             ``Subpart 18--Healthy, High-Performance Schools

``Sec. 5581. Grant program authorized.
``Sec. 5582. State uses of funds.
``Sec. 5583. Local uses of funds.
``Sec. 5584. Report to Congress.
``Sec. 5585. Limitations.
``Sec. 5586. Healthy, high-performance school building defined.

    ``Subpart 19--Grants for Capital Expenses of Providing Equitable 
                  Services for Private School Students

``Sec. 5591. Grant program authorized.
``Sec. 5592. Uses of funds.
``Sec. 5593. Allotments to States.
``Sec. 5594. Subgrants to local educational agencies.
``Sec. 5595. Capital expenses defined.
``Sec. 5596. Termination.

   ``Subpart 20--Additional Assistance for Certain Local Educational 
            Agencies Impacted by Federal Property Acquisition

``Sec. 5601. Reservation.
``Sec. 5602. Eligibility.
``Sec. 5603. Maximum amount.

              ``Subpart 21--Women's Educational Equity Act

``Sec. 5611. Short title and findings.
``Sec. 5612. Statement of purpose.
``Sec. 5613. Programs authorized.
``Sec. 5614. Applications.
``Sec. 5615. Criteria and priorities.
``Sec. 5616. Report.
``Sec. 5617. Administration.
``Sec. 5618. Amount.

               ``TITLE VI--FLEXIBILITY AND ACCOUNTABILITY

                ``Part A--Improving Academic Achievement

                       ``Subpart 1--Accountability

``Sec. 6111. Grants for State assessments and related activities.
``Sec. 6112. Grants for enhanced assessment instruments.
``Sec. 6113. Funding.

  ``Subpart 2--Funding Transferability for State and Local Educational 
                                Agencies

``Sec. 6121. Short title.
``Sec. 6122. Purpose.
``Sec. 6123. Transferability of funds.

         ``Subpart 3--State and Local Flexibility Demonstration

``Sec. 6131. Short title.
``Sec. 6132. Purpose.
``Sec. 6133. General provision.

                ``CHAPTER A--STATE FLEXIBILITY AUTHORITY

``Sec. 6141. State flexibility.
``Sec. 6142. Consolidation and use of funds.
``Sec. 6143. Performance review and penalties.
``Sec. 6144. Renewal of grant of flexibility authority.

              ``CHAPTER B--LOCAL FLEXIBILITY DEMONSTRATION

``Sec. 6151. Local flexibility demonstration agreements.
``Sec. 6152. Consolidation and use of funds.
``Sec. 6153. Limitations on administrative expenditures.
``Sec. 6154. Performance review and penalties.
``Sec. 6155. Renewal of local flexibility demonstration agreement.
``Sec. 6156. Reports.

     ``Subpart 4--State Accountability for Adequate Yearly Progress

``Sec. 6161. Accountability for adequate yearly progress.
``Sec. 6162. Peer review.
``Sec. 6163. Technical assistance.
``Sec. 6164. Report to Congress.

                  ``Part B--Rural Education Initiative

``Sec. 6201. Short title.
``Sec. 6202. Purpose.

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

``Sec. 6211. Use of applicable funding.
``Sec. 6212. Grant program authorized.
``Sec. 6213. Accountability.

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

``Sec. 6221. Program authorized.
``Sec. 6222. Uses of funds.
``Sec. 6223. Applications.
``Sec. 6224. Accountability.

                     ``Subpart 3--General Provisions

``Sec. 6231. Annual average daily attendance determination.
``Sec. 6232. Supplement, not supplant.
``Sec. 6233. Rule of construction.
``Sec. 6234. orization of appropriations.

                      ``Part C--General Provisions

``Sec. 6301. Prohibition against Federal mandates, direction, or 
          control.
``Sec. 6302. Rule of construction on equalized spending.

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

                       ``Part A--Indian Education

``Sec. 7101. Statement of policy.
``Sec. 7102. Purpose.

        ``Subpart 1--Formula Grants to Local Educational Agencies

``Sec. 7111. Purpose.
``Sec. 7112. Grants to local educational agencies and tribes.
``Sec. 7113. Amount of grants.
``Sec. 7114. Applications.
``Sec. 7115. Authorized services and activities.
``Sec. 7116. Integration of services authorized.
``Sec. 7117. Student eligibility forms.
``Sec. 7118. Payments.
``Sec. 7119. State educational agency review.

   ``Subpart 2--Special Programs and Projects To Improve Educational 
                    Opportunities for Indian Children

``Sec. 7121. Improvement of educational opportunities for Indian 
          children.
``Sec. 7122. Professional development for teachers and education 
          professionals.

                    ``Subpart 3--National Activities

``Sec. 7131. National research activities.
``Sec. 7132. In-service training for teachers of Indian children.
``Sec. 7133. Fellowships for Indian students.
``Sec. 7134. Gifted and talented Indian students.
``Sec. 7135. Grants to tribes for education administrative planning and 
          development.
``Sec. 7136. Improvement of educational opportunities for adult Indians.

                   ``Subpart 4--Federal Administration

``Sec. 7141. National Advisory Council on Indian Education.
``Sec. 7142. Peer review.
``Sec. 7143. Preference for Indian applicants.
``Sec. 7144. Minimum grant criteria.

       ``Subpart 5--Definitions; Authorizations of Appropriations

``Sec. 7151. Definitions.
``Sec. 7152. Authorizations of appropriations.

                   ``Part B--Native Hawaiian Education

``Sec. 7201. Short title.
``Sec. 7202. Findings.
``Sec. 7203. Purposes.
``Sec. 7204. Native Hawaiian Education Council and island councils.
``Sec. 7205. Program authorized.
``Sec. 7206. Administrative provisions.
``Sec. 7207. Definitions.

                   ``Part C--Aalaska Native Education

``Sec. 7301. Short title.
``Sec. 7302. Findings.
``Sec. 7303. Purposes.
``Sec. 7304. Program authorized.
``Sec. 7305. Administrative provisions.
``Sec. 7306. Definitions.

                        ``TITLE VIII--IMPACT AID

``Sec. 8001. Purpose.
``Sec. 8002. Payments relating to Federal acquisition of real property.
``Sec. 8003. Payments for eligible federally connected children.
`Sec. 8004. Policies and procedures relating to children residing on 
          Indian lands.
``Sec. 8005. Application for payments under sections 8002 and 8003.
``Sec. 8007. Construction.
``Sec. 8008. Facilities.
``Sec. 8009. State consideration of payments in providing State aid.
``Sec. 8010. Federal administration.
``Sec. 8011. Administrative hearings and judicial review.
``Sec. 8012. Forgiveness of overpayments.
``Sec. 8013. Definitions.
``Sec. 8014. Authorization of appropriations.

                     ``TITLE IX--GENERAL PROVISIONS

                          ``Part A--Definitions

``Sec. 9101. Definitions.
``Sec. 9102. Applicability of title.
``Sec. 9103. Applicability to Bureau of Indian Affairs operated schools.

   ``Part B--Flexibility in the use of Administrative and Other Funds

``Sec. 9201. Consolidation of State administrative funds for elementary 
          and secondary education programs.
``Sec. 9202. Single local educational agency States.
``Sec. 9203. Consolidation of funds for local administration.
``Sec. 9204. Consolidated set-aside for Department of the Interior 
          funds.

 ``Part C--Coordination of Programs; Consolidated State and Local Plans 
                            and Applications

``Sec. 9301. Purpose.
``Sec. 9302. Optional consolidated State plans or applications.
``Sec. 9303. Consolidated reporting.
``Sec. 9304. General applicability of State educational agency 
          assurances.
``Sec. 9305. Consolidated local plans or applications.
``Sec. 9306. Other general assurances.

                            ``Part D--Waivers

``Sec. 9401. Waivers of statutory and regulatory requirements.

                      ``Part E--Uniform Provisions

                      ``Subpart 1--Private Schools

``Sec. 9501. Participation by private school children and teachers.
``Sec. 9502. Standards for by-pass.
``Sec. 9503. Complaint process for participation of private school 
          children.
``Sec. 9504. By-pass determination process.
``Sec. 9505. Prohibition against funds for religious worship or 
          instruction.
``Sec. 9506. Private, religious, and home schools.

                      ``Subpart 2--Other Provisions

``Sec. 9521. Maintenance of effort.
``Sec. 9522. Prohibition regarding State aid.
``Sec. 9523. Privacy of assessment results.
``Sec. 9524. School prayer.
``Sec. 9525. Equal access to public school facilities.
``Sec. 9526. General prohibitions.
``Sec. 9527. Prohibitions on Federal Government and use of Federal 
          funds.
``Sec. 9528. Armed Forces recruiter access to students and student 
          recruiting information.
``Sec. 9529. Prohibition on federally sponsored testing.
``Sec. 9530. Limitations on national testing or certification for 
          teachers.
``Sec. 9531. Prohibition on nationwide database.
``Sec. 9532. Unsafe school choice option.
``Sec. 9533. Prohibition on discrimination.
``Sec. 9534. Civil rights.
``Sec. 9535. Rulemaking.
``Sec. 9536. Severability.

                          ``Part F--Evaluations

``Sec. 9601. Evaluations.''.

    TITLE I--IMPROVING THE ACADEMIC ACHIEVEMENT OF THE DISADVANTAGED

SEC. 101. IMPROVING THE ACADEMIC ACHIEVEMENT OF THE DISADVANTAGED.

    Title I of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6301 et seq.) is amended to read as follows:

   ``TITLE I--IMPROVING THE ACADEMIC ACHIEVEMENT OF THE DISADVANTAGED

``SEC. 1001. STATEMENT OF PURPOSE.

    ``The purpose of this title is to ensure that all children have a 
fair, equal, and significant opportunity to obtain a high-quality 
education and reach, at a minimum, proficiency on challenging State 
academic achievement standards and state academic assessments. This 
purpose can be accomplished by--
        ``(1) ensuring 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;
        ``(2) meeting the educational needs of low-achieving children 
    in our Nation's highest-poverty schools, limited English proficient 
    children, migratory children, children with disabilities, Indian 
    children, neglected or delinquent children, and young children in 
    need of reading assistance;
        ``(3) closing the achievement gap between high- and low-
    performing children, especially the achievement gaps between 
    minority and nonminority students, and between disadvantaged 
    children and their more advantaged peers;
        ``(4) holding schools, local educational agencies, and States 
    accountable for improving the academic achievement of all students, 
    and identifying and turning around low-performing schools that have 
    failed to provide a high-quality education to their students, while 
    providing alternatives to students in such schools to enable the 
    students to receive a high-quality education;
        ``(5) distributing and targeting resources sufficiently to make 
    a difference to local educational agencies and schools where needs 
    are greatest;
        ``(6) improving and strengthening accountability, teaching, and 
    learning by using State assessment systems designed to ensure that 
    students are meeting challenging State academic achievement and 
    content standards and increasing achievement overall, but 
    especially for the disadvantaged;
        ``(7) providing greater decisionmaking authority and 
    flexibility to schools and teachers in exchange for greater 
    responsibility for student performance;
        ``(8) providing children an enriched and accelerated 
    educational program, including the use of schoolwide programs or 
    additional services that increase the amount and quality of 
    instructional time;
        ``(9) promoting schoolwide reform and ensuring the access of 
    children to effective, scientifically based instructional 
    strategies and challenging academic content;
        ``(10) significantly elevating the quality of instruction by 
    providing staff in participating schools with substantial 
    opportunities for professional development;
        ``(11) coordinating services under all parts of this title with 
    each other, with other educational services, and, to the extent 
    feasible, with other agencies providing services to youth, 
    children, and families; and
        ``(12) affording parents substantial and meaningful 
    opportunities to participate in the education of their children.

``SEC. 1002. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Local Educational Agency Grants.--For the purpose of carrying 
out part A, there are authorized to be appropriated--
        ``(1) $13,500,000,000 for fiscal year 2002;
        ``(2) $16,000,000,000 for fiscal year 2003;
        ``(3) $18,500,000,000 for fiscal year 2004;
        ``(4) $20,500,000,000 for fiscal year 2005;
        ``(5) $22,750,000,000 for fiscal year 2006; and
        ``(6) $25,000,000,000 for fiscal year 2007.
    ``(b) Reading First.--
        ``(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 
    5 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 5 succeeding fiscal years.
        ``(3) Even start.--For the purpose of carrying out subpart 3 of 
    part B, there are authorized to be appropriated $260,000,000 for 
    fiscal year 2002 and such sums as may be necessary for each of the 
    5 succeeding fiscal years.
        ``(4) Improving literacy through school libraries.--For the 
    purpose of carrying out subpart 4 of part B, there are authorized 
    to be appropriated $250,000,000 for fiscal year 2002 and such sums 
    as may be necessary for each of the 5 succeeding fiscal years.
    ``(c) Education of Migratory Children.--For the purpose of carrying 
out part C, there are authorized to be appropriated $410,000,000 for 
fiscal year 2002 and such sums as may be necessary for each of the 5 
succeeding fiscal years.
    ``(d) Prevention and Intervention Programs for Youth Who Are 
Neglected, Delinquent, or at Risk.--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 5 
succeeding fiscal years.
    ``(e) Federal Activities.--
        ``(1) Sections 1501 and 1502.--For the purpose of carrying out 
    sections 1501 and 1502, there are authorized to be appropriated 
    such sums as may be necessary for fiscal year 2002 and each of the 
    5 succeeding fiscal years.
        ``(2) Section 1504.--
            ``(A) In general.--For the purpose of carrying out section 
        1504, there are authorized to be appropriated such sums as may 
        be necessary for fiscal year 2002 and for each of the 5 
        succeeding fiscal years.
            ``(B) Special rule.--Of the funds appropriated pursuant to 
        subparagraph (A), not more than 30 percent may be used for 
        teachers associated with students participating in the programs 
        described in subsections (a)(1), (b)(1), and (c)(1).
    ``(f) Comprehensive School Reform.--For the purpose of carrying out 
part F, there are authorized to be appropriated such sums as may be 
necessary for fiscal year 2002 and each of the 5 succeeding fiscal 
years.
    ``(g) Advanced Placement.--For the purposes of carrying out part G, 
there are authorized to be appropriated such sums for fiscal year 2002 
and each 5 succeeding fiscal year.
    ``(h) School Dropout Prevention.--For the purpose of carrying out 
part H, there are authorized to be appropriated $125,000,000 for fiscal 
year 2002 and such sums as may be necessary for each of the 5 
succeeding fiscal years, of which--
        ``(1) up to 10 percent shall be available to carry out subpart 
    1 of part H for each fiscal year; and
        ``(2) the remainder shall be available to carry out subpart 2 
    of part H for each fiscal year.
    ``(i) School Improvement.--For the purpose of carrying out section 
1003(g), there are authorized to be appropriated $500,000,000 for 
fiscal year 2002 and such sums as may be necessary for each of the 5 
succeeding fiscal years.

``SEC. 1003. SCHOOL IMPROVEMENT.

    ``(a) State Reservations.--Each State shall reserve 2 percent of 
the amount the State receives under subpart 2 of part A for fiscal 
years 2002 and 2003, and 4 percent of the amount received under such 
subpart for fiscal years 2004 through 2007, 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--
        ``(1) shall allocate not less than 95 percent of that amount 
    directly to local educational agencies for schools identified for 
    school improvement, corrective action, and restructuring, for 
    activities under section 1116(b); or
        ``(2) may, with the approval of the local educational agency, 
    directly provide for these activities or arrange for their 
    provision through other entities such as school support teams or 
    educational service agencies.
    ``(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) serve 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 progress goals in school improvement plans 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, the State educational agency shall allocate the excess 
amount to local educational agencies in accordance with--
        ``(1) the relative allocations the State educational agency 
    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 educational agency 
under subsection (a) in any fiscal year shall not decrease the amount 
of funds each local educational agency receives under subpart 2 below 
the amount received by such local educational agency under such subpart 
for the preceding fiscal year.
    ``(f) Reporting.--The State educational agency shall make publicly 
available a list of those schools that have received funds or services 
pursuant to subsection (b) and the percentage of students from each 
school from families with incomes below the poverty line.
    ``(g) Assistance for Local School Improvement.--
        ``(1) Program authorized.--The Secretary shall award grants to 
    States to enable the States to provide subgrants to local 
    educational agencies for the purpose of providing assistance for 
    school improvement consistent with section 1116.
        ``(2) State allotments.--Such grants shall be allotted among 
    States, the Bureau of Indian Affairs, and the outlying areas, in 
    proportion to the funds received by the States, the Bureau of 
    Indian Affairs, and the outlying areas, respectively, for the 
    fiscal year under parts A, C, and D of this title. The Secretary 
    shall expeditiously allot 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 
    enactment of the No Child Left Behind Act of 2001.
        ``(3) Reallocations.--If a State does not receive funds under 
    this subsection, the Secretary shall reallocate such funds to other 
    States in the same proportion funds are allocated under paragraph 
    (2).
        ``(4) 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 
    submitted such information as part of its State plan under this 
    part. Each State application shall describe how the State 
    educational agency will allocate such funds in order to assist the 
    State educational agency and local educational agencies in 
    complying with school improvement, corrective action, and 
    restructuring requirements of section 1116.
        ``(5) 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 for each participating 
        school;
            ``(B) integrated with other funds awarded by the State 
        under this Act; and
            ``(C) renewable for two additional 1-year periods if 
        schools are meeting the goals in their school improvement plans 
        developed under section 1116.
        ``(6) Priority.--The State, in awarding such grants, shall give 
    priority to local educational agencies with the lowest-achieving 
    schools that demonstrate--
            ``(A) the greatest need for such funds; and
            ``(B) the strongest commitment to ensuring that such funds 
        are used to provide adequate resources to enable the lowest-
        achieving schools to meet the goals under school and local 
        educational agency improvement, corrective action, and 
        restructuring plans under section 1116.
        ``(7) Allocation.--A State educational agency that receives a 
    grant under this subsection shall allocate at least 95 percent of 
    the grant funds directly to local educational agencies for schools 
    identified for school improvement, corrective action, or 
    restructuring to carry out activities under section 1116(b), or 
    may, with the approval of the local educational agency, directly 
    provide for these activities or arrange for their provision through 
    other entities such as school support teams or educational service 
    agencies.
        ``(8) Administrative costs.--A State educational agency that 
    receives a grant award under this subsection may reserve not more 
    than 5 percent of such grant funds for administration, evaluation, 
    and technical assistance expenses.
        ``(9) 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 goals under school and local educational agency improvement, 
    corrective action, and restructuring plans under section 1116.

``SEC. 1004. STATE ADMINISTRATION.

    ``(a) In General.--Except as provided in subsection (b), to carry 
out administrative duties assigned under parts A, C, and D of this 
title, each State may reserve the greater of--
        ``(1) 1 percent of the amounts received under such parts; or
        ``(2) $400,000 ($50,000 in the case of each outlying area).
    ``(b) Exception.--If the sum of the amounts appropriated for parts 
A, C, and D of this title is equal to or greater than $14,000,000,000, 
then the reservation described in subsection (a)(1) shall not exceed 1 
percent of the amount the State would receive, if $14,000,000,000 were 
allocated among the States for parts A, C, and D of this title.

   ``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.--For any State desiring to receive a grant 
    under this part, the State educational agency shall submit to the 
    Secretary a plan, developed by the State educational agency, 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, the Carl D. Perkins 
    Vocational and Technical Education Act of 1998, the Head Start Act, 
    the Adult Education and Family Literacy Act, and the McKinney-Vento 
    Homeless Assistance Act.
        ``(2) Consolidated plan.--A State plan submitted under 
    paragraph (1) may be submitted as part of a consolidated plan under 
    section 9302.
    ``(b) Academic Standards, Academic Assessments, and 
Accountability.--
        ``(1) Challenging academic standards.--
            ``(A) In general.--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) Same standards.--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) Subjects.--The State shall have such academic 
        standards for all public elementary school 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 (beginning in the 
        2005-2006 school year) science, which shall include the same 
        knowledge, skills, and levels of achievement expected of all 
        children.
            ``(D) Challenging academic standards.--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 two levels of high achievement 
                (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 achievement 
                (basic) to provide complete information about the 
                progress of the lower-achieving children toward 
                mastering the proficient and advanced levels of 
                achievement.

            ``(E) Information.--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) Existing standards.--Nothing in this part shall 
        prohibit a State from revising, consistent with this section, 
        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 single, statewide 
        State accountability system that will be effective in ensuring 
        that all local educational agencies, public elementary schools, 
        and public secondary schools make adequate yearly progress as 
        defined under this paragraph. Each State accountability system 
        shall--
                ``(i) be based on the academic standards and academic 
            assessments adopted under paragraphs (1) and (3), and other 
            academic indicators consistent with subparagraph (C)(vi) 
            and (vii), and shall take into account the achievement of 
            all public elementary school and secondary school students;
                ``(ii) be the same accountability system the State uses 
            for all public elementary schools and secondary schools or 
            all local educational agencies in the State, except that 
            public elementary schools, secondary schools, and local 
            educational agencies not participating under this part are 
            not subject to the requirements of section 1116; and
                ``(iii) include sanctions and rewards, such as bonuses 
            and recognition, the State will use to hold local 
            educational agencies and public elementary schools and 
            secondary schools accountable for student achievement and 
            for ensuring that they make adequate yearly progress in 
            accordance with the State's definition under subparagraphs 
            (B) and (C).
            ``(B) Adequate yearly progress.--Each State plan shall 
        demonstrate, based on academic assessments described in 
        paragraph (3), and in accordance with this paragraph, what 
        constitutes adequate yearly progress of the State, and of all 
        public elementary schools, secondary schools, and local 
        educational agencies in the State, toward enabling all public 
        elementary school and secondary 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 agencies, and schools.
            ``(C) Definition.--`Adequate yearly progress' shall be 
        defined by the State in a manner that--
                ``(i) applies the same high standards of academic 
            achievement to all public elementary school and secondary 
            school students in the State;
                ``(ii) is statistically valid and reliable;
                ``(iii) results in continuous and substantial academic 
            improvement for all students;
                ``(iv) measures the progress of public elementary 
            schools, secondary schools and local educational agencies 
            and the State based primarily on the academic assessments 
            described in paragraph (3);
                ``(v) includes separate measurable annual objectives 
            for continuous and substantial improvement for each of the 
            following:

                    ``(I) The achievement of all public elementary 
                school and secondary 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;

                except that disaggregation of data under subclause (II) 
                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 personally identifiable information about an 
                individual student;

                ``(vi) in accordance with subparagraph (D), includes 
            graduation rates for public secondary school students 
            (defined as the percentage of students who graduate from 
            secondary school with a regular diploma in the standard 
            number of years) and at least one other academic indicator, 
            as determined by the State for all public elementary school 
            students; and
                ``(vii) in accordance with subparagraph (D), at the 
            State's discretion, may also include other academic 
            indicators, as determined by the State for all public 
            school students, measured separately for each group 
            described in clause (v), such as achievement on additional 
            State or locally administered assessments, decreases in 
            grade-to-grade retention rates, attendance rates, and 
            changes in the percentages of students completing gifted 
            and talented, advanced placement, and college preparatory 
            courses.
            ``(D) Requirements for other indicators.--In carrying out 
        subparagraph (C)(vi) and (vii), the State--
                ``(i) shall ensure that the indicators described in 
            those provisions are valid and reliable, and are consistent 
            with relevant, nationally recognized professional and 
            technical standards, if any; and
                ``(ii) except as provided in subparagraph (I)(i), may 
            not use those indicators to reduce the number of, or 
            change, the schools that would otherwise be subject to 
            school improvement, corrective action, or restructuring 
            under section 1116 if those additional indicators were not 
            used, but may use them to identify additional schools for 
            school improvement or in need of corrective action or 
            restructuring.
            ``(E) Starting point.--Each State, using data for the 2001-
        2002 school year, shall establish the starting point for 
        measuring, under subparagraphs (G) and (H), the percentage of 
        students meeting or exceeding the State's proficient level of 
        academic achievement on the State assessments under paragraph 
        (3) and pursuant to the timeline described in subparagraph (F). 
        The starting point shall be, at a minimum, based on the higher 
        of the percentage of students at the proficient level who are 
        in--
                ``(i) the State's lowest achieving group of students 
            described in subparagraph (C)(v)(II); or
                ``(ii) the school at the 20th percentile in the State, 
            based on enrollment, among all schools ranked by the 
            percentage of students at the proficient level.
            ``(F) Timeline.--Each State shall establish a timeline for 
        adequate yearly progress. The timeline shall ensure that not 
        later than 12 years after the end of the 2001-2002 school year, 
        all students in each group described in subparagraph (C)(v) 
        will meet or exceed the State's proficient level of academic 
        achievement on the State assessments under paragraph (3).
            ``(G) Measurable objectives.--Each State shall establish 
        statewide annual measurable objectives, pursuant to 
        subparagraph (C)(v), for meeting the requirements of this 
        paragraph, and which--
                ``(i) shall be set separately for the assessments of 
            mathematics and reading or language arts under subsection 
            (a)(3);
                ``(ii) shall be the same for all schools and local 
            educational agencies in the State;
                ``(iii) shall identify a single minimum percentage of 
            students who are required to meet or exceed the proficient 
            level on the academic assessments that applies separately 
            to each group of students described in subparagraph (C)(v);
                ``(iv) shall ensure that all students will meet or 
            exceed the State's proficient level of academic achievement 
            on the State assessments within the State's timeline under 
            subparagraph (F); and
                ``(v) may be the same for more than 1 year, subject to 
            the requirements of subparagraph (H).
            ``(H) Intermediate goals for annual yearly progress.--Each 
        State shall establish intermediate goals for meeting the 
        requirements, including the measurable objectives in 
        subparagraph (G), of this paragraph and that shall--
                ``(i) increase in equal increments over the period 
            covered by the State's timeline under subparagraph (F);
                ``(ii) provide for the first increase to occur in not 
            more than 2 years; and
                ``(iii) provide for each following increase to occur in 
            not more than 3 years.
            ``(I) Annual improvement for schools.--Each year, for a 
        school to make adequate yearly progress under this paragraph--
                ``(i) each group of students described in subparagraph 
            (C)(v) must meet or exceed the objectives set by the State 
            under subparagraph (G), except that if any group described 
            in subparagraph (C)(v) does not meet those objectives in 
            any particular year, the school shall be considered to have 
            made adequate yearly progress if the percentage of students 
            in that group who did not meet or exceed the proficient 
            level of academic achievement on the State assessments 
            under paragraph (3) for that year decreased by 10 percent 
            of that percentage from the preceding school year and that 
            group made progress on one or more of the academic 
            indicators described in subparagraph (C)(vi) or (vii); and
                ``(ii) not less than 95 percent of each group of 
            students described in subparagraph (C)(v) who are enrolled 
            in the school are required to take the assessments, 
            consistent with paragraph (3)(C)(xi) and with 
            accommodations, guidelines, and alternative assessments 
            provided in the same manner as those provided under section 
            612(a)(17)(A) of the Individuals with Disabilities 
            Education Act and paragraph (3), on which adequate yearly 
            progress is based (except that the 95 percent requirement 
            described in this clause shall not apply in a case in which 
            the number of students in a category is insufficient to 
            yield statistically reliable information or the results 
            would reveal personally identifiable information about an 
            individual student).
            ``(J) Uniform averaging procedure.--For the purpose of 
        determining whether schools are making adequate yearly 
        progress, the State may establish a uniform procedure for 
        averaging data which includes one or more of the following:
                ``(i) The State may average data from the school year 
            for which the determination is made with data from one or 
            two school years immediately preceding that school year.
                ``(ii) Until the assessments described in paragraph (3) 
            are administered in such manner and time to allow for the 
            implementation of the uniform procedure for averaging data 
            described in clause (i), the State may use the academic 
            assessments that were required under paragraph (3) as that 
            paragraph was in effect on the day preceding the date of 
            enactment of the No Child Left Behind Act of 2001, provided 
            that nothing in this clause shall be construed to undermine 
            or delay the determination of adequate yearly progress, the 
            requirements of section 1116, or the implementation of 
            assessments under this section.
                ``(iii) The State may use data across grades in a 
            school.
            ``(K) Accountability for charter schools.--The 
        accountability provisions under this Act shall be overseen for 
        charter schools in accordance with State charter school law.
        ``(3) Academic assessments.--
            ``(A) In general.--Each State plan shall demonstrate that 
        the State educational agency, in consultation with local 
        educational agencies, has implemented a set of high-quality, 
        yearly student academic assessments that include, at a minimum, 
        academic assessments in mathematics, reading or language arts, 
        and science 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 the State in enabling 
        all children to meet the State's challenging student academic 
        achievement standards, except that no State shall be required 
        to meet the requirements of this part relating to science 
        assessments until the beginning of the 2007-2008 school year.
            ``(B) Use of assessments.--Each State educational agency 
        may incorporate the data from the assessments under this 
        paragraph into a State-developed longitudinal data system that 
        links student test scores, length of enrollment, and graduation 
        records over time.
            ``(C) Requirements.--Such assessments shall--
                ``(i) be the same academic assessments used to measure 
            the achievement of all children;
                ``(ii) be aligned with the State's challenging academic 
            content and student academic achievement standards, and 
            provide coherent information about student attainment of 
            such standards;
                ``(iii) be used for purposes for which such assessments 
            are valid and reliable, and be consistent with relevant, 
            nationally recognized professional and technical standards;
                ``(iv) be used only if the State educational agency 
            provides to the Secretary evidence from the test publisher 
            or other relevant sources that the assessments used are of 
            adequate technical quality for each purpose required under 
            this Act and are consistent with the requirements of this 
            section, and such evidence is made public by the Secretary 
            upon request;
                ``(v)(I) except as otherwise provided for grades 3 
            through 8 under clause vii, measure the proficiency of 
            students in, at a minimum, mathematics and reading or 
            language arts, and be administered not less than once 
            during--

                    ``(aa) grades 3 through 5;
                    ``(bb) grades 6 through 9; and
                    ``(cc) grades 10 through 12;

                ``(II) beginning not later than school year 2007-2008, 
            measure the proficiency of all students in science and be 
            administered not less than one time during--

                    ``(aa) grades 3 through 5;
                    ``(bb) grades 6 through 9; and
                    ``(cc) grades 10 through 12;

                ``(vi) involve multiple up-to-date measures of student 
            academic achievement, including measures that assess 
            higher-order thinking skills and understanding;
                ``(vii) beginning not later than school year 2005-2006, 
            measure the achievement of students against the challenging 
            State academic 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 the State will 
            complete implementation within the additional 1-year 
            period;
                ``(viii) at the discretion of the State, measure the 
            proficiency of students in academic subjects not described 
            in clauses (v), (vi), (vii) in which the State has adopted 
            challenging academic content and academic achievement 
            standards;
                ``(ix) provide for--

                    ``(I) the participation in such assessments of all 
                students;
                    ``(II) the reasonable adaptations and 
                accommodations for students with disabilities (as 
                defined under section 602(3) of the Individuals with 
                Disabilities Education Act) necessary to measure the 
                academic achievement of such students relative to State 
                academic content and State student academic achievement 
                standards; and
                    ``(III) the inclusion of limited English proficient 
                students, who shall be assessed in a valid and reliable 
                manner and provided reasonable accommodations on 
                assessments administered to such students under this 
                paragraph, including, to the extent practicable, 
                assessments in the language and form most likely to 
                yield accurate data on what such students know and can 
                do in academic content areas, until such students have 
                achieved English language proficiency as determined 
                under paragraph (7);

                ``(x) notwithstanding subclause (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 three or more 
            consecutive school years, except that if the local 
            educational agency determines, on a case-by-case individual 
            basis, that academic assessments in another language or 
            form would likely yield more accurate and reliable 
            information on what such student knows and can do, the 
            local educational agency may make a determination to assess 
            such student in the appropriate language other than English 
            for a period that does not exceed two additional 
            consecutive years, provided that such student has not yet 
            reached a level of English language proficiency sufficient 
            to yield valid and reliable information on what such 
            student knows and can do on tests (written in English) of 
            reading or language arts;
                ``(xi) include students who have attended schools in a 
            local educational agency for a full academic year but have 
            not attended a single school for a full academic year, 
            except that the performance of students who have attended 
            more than 1 school in the local educational agency in any 
            academic year shall be used only in determining the 
            progress of the local educational agency;
                ``(xii) produce individual student interpretive, 
            descriptive, and diagnostic reports, consistent with clause 
            (iii) that allow parents, teachers, and principals to 
            understand and address the specific academic needs of 
            students, and include information regarding achievement on 
            academic assessments aligned with State academic 
            achievement standards, and that are provided to parents, 
            teachers, and principals, as soon as is practicably 
            possible after the assessment is given, in an 
            understandable and uniform format, and to the extent 
            practicable, in a language that parents can understand;
                ``(xiii) 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, except that, in the case of a 
            local educational agency or a school, such disaggregation 
            shall not be required in a case in which the number of 
            students in a category is insufficient to yield 
            statistically reliable information or the results would 
            reveal personally identifiable information about an 
            individual student;
                ``(xiv) be consistent with widely accepted professional 
            testing standards, objectively measure academic 
            achievement, knowledge, and skills, and be tests that do 
            not evaluate or assess personal or family beliefs and 
            attitudes, or publicly disclose personally identifiable 
            information; and
                ``(xv) enable itemized score analyses to be produced 
            and reported, consistent with clause (iii), to local 
            educational agencies and schools, so that parents, 
            teachers, principals, and administrators can interpret and 
            address the specific academic needs of students as 
            indicated by the students' achievement on assessment items.
            ``(D) Deferral.--A State may defer the commencement, or 
        suspend the administration, but not cease the development, of 
        the assessments described in this paragraph, that were not 
        required prior to the date of enactment of the No Child Left 
        Behind Act of 2001, for 1 year for each year for which the 
        amount appropriated for grants under section 6113(a)(2) is less 
        than--
                ``(i) $370,000,000 for fiscal year 2002;
                ``(ii) $380,000,000 for fiscal year 2003;
                ``(iii) $390,000,000 for fiscal year 2004; and
                ``(iv) $400,000,000 for fiscal years 2005 through 2007.
        ``(4) Special rule.--Academic assessment measures in addition 
    to those in paragraph (3) that do not meet the requirements of such 
    paragraph may be included in the assessment under paragraph (3) as 
    additional measures, but may not be used in lieu of the academic 
    assessments required under paragraph (3). Such additional 
    assessment measures may not be used to reduce the number of or 
    change, the schools that would otherwise be subject to school 
    improvement, corrective action, or restructuring under section 1116 
    if such additional indicators were not used, but may be used to 
    identify additional schools for school improvement or in need of 
    corrective action or restructuring except as provided in paragraph 
    (2)(I)(i).
        ``(5) 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 elementary schools and secondary 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, and 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 that receives grants 
        under this part will adopt curriculum content and student 
        academic achievement standards, and academic assessments 
        aligned with such standards, which--
                ``(i) meet all of the criteria in this subsection and 
            any regulations regarding such standards and assessments 
            that the Secretary may publish; and
                ``(ii) are applicable to all students served by each 
            such local educational agency.
        ``(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 not later than school year 2002-2003, 
    provide for an annual assessment of English proficiency (measuring 
    students' oral language, reading, and writing skills in English) of 
    all students with limited English proficiency in the schools served 
    by the State educational agency, 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 this 
    paragraph by that deadline and that the State will complete 
    implementation within the additional 1-year period.
        ``(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(b), 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 achievement standards;
            ``(C) the specific steps the State educational agency will 
        take to ensure that both schoolwide programs and targeted 
        assistance schools provide instruction by highly qualified 
        instructional staff as required by sections 1114(b)(1)(C) and 
        1115(c)(1)(E), including steps that the State educational 
        agency will take to ensure that poor and minority children are 
        not taught at higher rates than other children by 
        inexperienced, unqualified, or out-of-field teachers, and the 
        measures that the State educational agency will use to evaluate 
        and publicly report the progress of the State educational 
        agency with respect to such steps;
            ``(D) an assurance that the State educational agency will 
        assist local educational agencies in developing or identifying 
        high-quality effective curricula aligned with State academic 
        achievement standards and how the State educational agency will 
        disseminate such curricula to each local educational agency and 
        school within the State; and
            ``(E) such other factors the State educational agency 
        determines appropriate to provide students an opportunity to 
        achieve the knowledge and skills described in the challenging 
        academic content standards adopted by the State.
        ``(9) Factors affecting student achievement.--Each State plan 
    shall include an assurance that the State educational agency will 
    coordinate and collaborate, to the extent feasible and necessary as 
    determined by the State educational agency, with agencies providing 
    services to children, youth, and families, with respect to local 
    educational agencies within the State that are identified under 
    section 1116 and that request assistance with addressing major 
    factors that have significantly affected the academic achievement 
    of students in the local educational agency or schools served by 
    such agency.
        ``(10) Use of academic assessment results to improve student 
    academic achievement.--Each State plan shall describe how the State 
    educational agency will ensure that the results of the State 
    assessments described in paragraph (3)--
            ``(A) will be promptly provided to local educational 
        agencies, schools, and teachers in a manner that is clear and 
        easy to understand, but not later than before the beginning of 
        the next school year; and
            ``(B) be used by those local educational agencies, schools, 
        and teachers to improve the educational achievement of 
        individual students.
    ``(c) Other Provisions To Support Teaching and Learning.--Each 
State plan shall contain assurances that--
        ``(1) the State educational agency will meet the requirements 
    of subsection (h)(1) and, beginning with the 2002-2003 school year, 
    will produce the annual State report cards described in such 
    subsection, except that the Secretary may provide the State 
    educational agency 1 additional year if the State educational 
    agency 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 this paragraph by that deadline 
    and that the State will complete implementation within the 
    additional 1-year period;
        ``(2) the State will, beginning in school year 2002-2003, 
    participate in biennial State academic assessments of 4th and 8th 
    grade reading and mathematics under the National Assessment of 
    Educational Progress carried out under section 411(b)(2) of the 
    National Education Statistics Act of 1994 if the Secretary pays the 
    costs of administering such assessments;
        ``(3) the State educational agency, in consultation with the 
    Governor, will include, as a component of the State plan, a plan to 
    carry out the responsibilities of the State under sections 1116 and 
    1117, including carrying out the State educational agency's 
    statewide system of technical assistance and support for local 
    educational agencies;
        ``(4) the State educational agency will work with other 
    agencies, including educational service agencies or other local 
    consortia, and institutions to provide technical assistance to 
    local educational agencies and schools, including technical 
    assistance in providing professional development under section 
    1119, technical assistance under section 1117, and technical 
    assistance relating to parental involvement under section 1118;
        ``(5)(A) where educational service agencies exist, the State 
    educational agency will consider providing professional development 
    and technical assistance through such agencies; and
        ``(B) where educational service agencies do not exist, the 
    State educational agency will consider providing professional 
    development and technical assistance through other cooperative 
    agreements such as through a consortium of local educational 
    agencies;
        ``(6) the State educational agency will 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;
        ``(7) the State educational agency will provide the least 
    restrictive and burdensome regulations for local educational 
    agencies and individual schools participating in a program assisted 
    under this part;
        ``(8) the State educational agency will inform the Secretary 
    and the public of how Federal laws, if at all, hinder the ability 
    of States to hold local educational agencies and schools 
    accountable for student academic achievement;
        ``(9) 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;
        ``(10) the State educational agency will modify or eliminate 
    State fiscal and accounting barriers so that schools can easily 
    consolidate funds from other Federal, State, and local sources for 
    schoolwide programs under section 1114;
        ``(11) the State educational agency has involved the committee 
    of practitioners established under section 1903(b) in developing 
    the plan and monitoring its implementation;
        ``(12) the State educational agency will inform local 
    educational agencies in the State of the local educational agency's 
    authority to transfer funds under title VI, to obtain waivers under 
    part D of title IX, and, if the State is an Ed-Flex Partnership 
    State, to obtain waivers under the Education Flexibility 
    Partnership Act of 1999;
        ``(13) the State educational agency will coordinate activities 
    funded under this part with other Federal activities as 
    appropriate; and
        ``(14) the State educational agency will 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 secondary school 
    diploma or its recognized equivalent or who have low levels of 
    literacy.
    ``(d) Parental Involvement.--Each State plan shall describe how the 
State educational agency will support the collection and dissemination 
to local educational agencies and schools of effective parental 
involvement practices. Such practices shall--
        ``(1) be based on the most current research that meets the 
    highest professional and technical standards, on effective parental 
    involvement that fosters achievement to high standards for all 
    children; and
        ``(2) be geared toward lowering barriers to greater 
    participation by parents in school planning, review, and 
    improvement experienced.
    ``(e) Peer Review and Secretarial Approval.--
        ``(1) Secretarial duties.--The Secretary shall--
            ``(A) establish a peer-review process to assist in the 
        review of State plans;
            ``(B) appoint individuals to the peer-review process who 
        are representative of parents, teachers, State educational 
        agencies, and local educational agencies, and who are familiar 
        with educational standards, assessments, accountability, the 
        needs of low-performing schools, and other educational needs of 
        students;
            ``(C) approve a State plan within 120 days of its 
        submission unless the Secretary determines that the plan does 
        not meet the requirements of this section;
            ``(D) if the Secretary determines that the State plan does 
        not meet the requirements of subsection (a), (b), or (c), 
        immediately notify the State of such determination and the 
        reasons for such determination;
            ``(E) not decline to approve a State's plan before--
                ``(i) offering the State an opportunity to revise its 
            plan;
                ``(ii) providing technical assistance in order to 
            assist the State to meet the requirements of subsections 
            (a), (b), and (c); and
                ``(iii) providing a hearing; and
            ``(F) have the authority to disapprove a State plan for not 
        meeting the requirements of this part, but shall not have the 
        authority to require a State, as a condition of approval of the 
        State plan, to include in, or delete from, such plan one or 
        more specific elements of the State's academic content 
        standards or to use specific academic assessment instruments or 
        items.
        ``(2) State revisions.--A State plan shall be revised by the 
    State educational agency if it is necessary to satisfy the 
    requirements of this section.
    ``(f) Duration of the Plan.--
        ``(1) In general.--Each State plan shall--
            ``(A) remain in effect for the duration of the State's 
        participation under this part; and
            ``(B) be periodically reviewed and revised as necessary by 
        the State educational agency to reflect changes in the State's 
        strategies and programs under this part.
        ``(2) Additional information.--If significant changes are made 
    to a State's plan, such as the adoption of new State academic 
    content standards and State student achievement standards, new 
    academic assessments, or a new definition of adequate yearly 
    progress, such information shall be submitted to the Secretary.
    ``(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 
        the State 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 to the State for State administration and activities 
        under this part in each year until the Secretary determines 
        that the State meets those requirements.
            ``(B) No extension.--Notwithstanding any other provision of 
        law, 90 days after the date of enactment of the No Child Left 
        Behind Act of 2001 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), then the Secretary may 
    withhold funds for State administration under this part 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 
        2002-2003 school year, unless the State has received a 1-year 
        extension pursuant to subsection (c)(1), a State that receives 
        assistance under this part shall prepare and disseminate an 
        annual State report card.
            ``(B) Implementation.--The State report card shall be--
                ``(i) concise; and
                ``(ii) presented in an understandable and uniform 
            format and, to the extent practicable, provided in a 
            language that the parents can understand.
            ``(C) 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)(3) (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 personally 
            identifiable information about an individual student);
                ``(ii) information that provides a comparison between 
            the actual achievement levels of each group of students 
            described in subsection (b)(2)(C)(v) and the State's annual 
            measurable objectives for each such group of students on 
            each of the academic 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 most recent 2-year trend in student 
            achievement in each subject area, and for each grade level, 
            for which assessments under this section are required;
                ``(v) aggregate information on any other indicators 
            used by the State to determine the adequate yearly progress 
            of students in achieving State academic achievement 
            standards;
                ``(vi) graduation rates for secondary school students 
            consistent with subsection (b)(2)(C)(vi);
                ``(vii) information on the performance of local 
            educational agencies in the State regarding making adequate 
            yearly progress, including the number and names of each 
            school identified for school improvement under section 
            1116; and
                ``(viii) the professional qualifications of teachers in 
            the State, the percentage of such teachers teaching with 
            emergency or provisional credentials, and the percentage of 
            classes in the State not taught by highly qualified 
            teachers, in the aggregate and disaggregated by high-
            poverty compared to low-poverty schools which, for the 
            purpose of this clause, means schools in the top quartile 
            of poverty and the bottom quartile of poverty in the State.
            ``(D) Optional information.--The State may include in its 
        annual State report card such other information as the State 
        believes will best provide parents, students, and other members 
        of the public with information regarding the progress of each 
        of the State's public elementary schools and public secondary 
        schools. Such information may include information regarding--
                ``(i) school attendance rates;
                ``(ii) average class size in each grade;
                ``(iii) academic achievement and gains in English 
            proficiency of limited English proficient students;
                ``(iv) the incidence of school violence, drug abuse, 
            alcohol abuse, student suspensions, and student expulsions;
                ``(v) the extent and type of parental involvement in 
            the schools;
                ``(vi) the percentage of students completing advanced 
            placement courses, and the rate of passing of advanced 
            placement tests; and
                ``(vii) 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 subsection (b)(2), to determine the status of schools 
            regarding school improvement, corrective action, and 
            restructuring.
        ``(2) Annual local educational agency report cards.--
            ``(A) Report cards.--
                ``(i) In general.--Not later than the beginning of the 
            2002-2003 school year, a local educational agency that 
            receives assistance under this part shall prepare and 
            disseminate an annual local educational agency report card, 
            except that the State educational agency may provide the 
            local educational agency 1 additional year if the local 
            educational agency demonstrates that exceptional or 
            uncontrollable circumstances, such as a natural disaster or 
            a precipitous and unforeseen decline in the financial 
            resources of the local educational agency, prevented full 
            implementation of this paragraph by that deadline and that 
            the local educational agency will complete implementation 
            within the additional 1-year period.
                ``(ii) Special rule.--If a State educational agency has 
            received an extension pursuant to subsection (c)(1), then a 
            local educational agency within that State shall not be 
            required to include the information required under 
            paragraph (1)(C) in such report card during such extension.
            ``(B) Minimum requirements.--The State educational agency 
        shall ensure that each local educational agency collects 
        appropriate data and includes in the local educational agency's 
        annual report the information described in paragraph (1)(C) as 
        applied to the local educational agency and each school served 
        by the local educational agency, and--
                ``(i) in the case of a local educational agency--

                    ``(I) the number and percentage of schools 
                identified for school improvement under section 1116(c) 
                and how long the schools have been so identified; and
                    ``(II) information that shows how students served 
                by the local educational agency achieved on the 
                statewide academic assessment compared to students in 
                the State as a whole; and

                ``(ii) in the case of a school--

                    ``(I) whether the school has been identified for 
                school improvement; and
                    ``(II) information that shows how the school's 
                students achievement on the statewide academic 
                assessments and other indicators of adequate yearly 
                progress compared to students in the local educational 
                agency and the State as a whole.

            ``(C) Other information.--A local educational agency may 
        include in its annual local educational agency report card any 
        other appropriate information, whether or not such information 
        is included in the annual State report card.
            ``(D) Data.--A local educational agency or school shall 
        only include in its annual local educational agency report card 
        data that are sufficient to yield statistically reliable 
        information, as determined by the State, and that do not reveal 
        personally identifiable information about an individual 
        student.
            ``(E) Public dissemination.--The local educational agency 
        shall, not later than the beginning of the 2002-2003 school 
        year, unless the local educational agency has received a 1-year 
        extension pursuant to subparagraph (A), publicly disseminate 
        the information described in this paragraph to all schools in 
        the school district served by the local educational agency and 
        to all parents of students attending those schools in an 
        understandable and uniform format and, to the extent 
        practicable, provided in a language that the parents can 
        understand, and make the information widely available through 
        public means, such as posting on the Internet, distribution to 
        the media, and distribution through public agencies, except 
        that if a local educational agency issues a report card for all 
        students, the local educational agency may include the 
        information under this section as part of such report.
        ``(3) Preexisting report cards.--A State educational agency 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 report cards for the purpose of this 
    subsection, so long as any such report card is modified, as may be 
    needed, to contain the information required by this subsection.
        ``(4) Annual state report to the secretary.--Each State 
    educational agency receiving assistance under this part shall 
    report annually to the Secretary, and make widely available within 
    the State--
            ``(A) beginning with school year 2002-2003, information on 
        the State's progress in developing and implementing the 
        academic assessments described in subsection (b)(3);
            ``(B) beginning not later than school year 2002-2003, 
        information on the achievement of students on the academic 
        assessments required by subsection (b)(3), including the 
        disaggregated results for the categories of students identified 
        in subsection (b)(2)(C)(v);
            ``(C) 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;
            ``(D) beginning not later than school year 2002-2003, 
        unless the State has received an extension pursuant to 
        subsection (c)(1), information on the acquisition of English 
        proficiency by children with limited English proficiency;
            ``(E) the number and names of each school identified for 
        school improvement under section 1116(c), the reason why each 
        school was so identified, and the measures taken to address the 
        achievement problems of such schools;
            ``(F) the number of students and schools that participated 
        in public school choice and supplemental service programs and 
        activities under this title; and
            ``(G) beginning not later than the 2002-2003 school year, 
        information on the quality of teachers and the percentage of 
        classes being taught by highly qualified teachers in the State, 
        local educational agency, and school.
        ``(5) Report to congress.--The Secretary shall transmit 
    annually to the Committee on Education and the Workforce of the 
    House of Representatives and the Committee on Health, Education, 
    Labor, and Pensions of the Senate a report that provides national 
    and State-level data on the information collected under paragraph 
    (4).
        ``(6) 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 the parents may 
        request, and the agency will provide the parents on 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 that parents may request under subparagraph (A), a 
        school that receives funds under this part shall provide to 
        each individual parent--
                ``(i) information on the level of achievement of the 
            parent's child in each of the State academic assessments as 
            required under this part; and
                ``(ii) timely notice that the parent's child has been 
            assigned, or has been taught for four or more consecutive 
            weeks by, a teacher who is not highly 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.
    ``(i) Privacy.--Information collected under this section shall be 
collected and disseminated in a manner that protects the privacy of 
individuals.
    ``(j) Technical Assistance.--The Secretary shall provide a State 
educational agency, at the State educational agency's request, 
technical assistance in meeting the requirements of this section, 
including the provision of advice by experts in the development of 
high-quality academic assessments, the setting of State standards, the 
development of measures of adequate yearly progress that are valid and 
reliable, and other relevant areas.
    ``(k) Voluntary Partnerships.--A State may enter into a voluntary 
partnership with another State to develop and implement the academic 
assessments and standards required under this section.
    ``(l) Construction.--Nothing in this part shall be construed to 
prescribe the use of the academic assessments described in this part 
for student promotion or graduation purposes.
    ``(m) Special Rule With Respect to Bureau-Funded Schools.--In 
determining the assessments to be used by each operated or funded by 
BIA school receiving funds under this part, the following shall apply:
        ``(1) Each such school that is accredited by the State in which 
    it is operating shall use 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 such school that is accredited by a regional 
    accrediting organization shall adopt an appropriate assessment, in 
    consultation with and with the approval of, the Secretary of the 
    Interior and consistent with assessments adopted by other schools 
    in the same State or region, that meets the requirements of this 
    section.
        ``(3) Each such school that is accredited 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 the 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, the Carl D. Perkins Vocational and Technical 
    Education Act of 1998, 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 9305.
    ``(b) Plan Provisions.--
        ``(1) In general.--In order to help low-achieving children meet 
    challenging achievement academic standards, each local educational 
    agency plan shall include--
            ``(A) a description of high-quality student academic 
        assessments, if any, that are in addition to the academic 
        assessments described in the State plan under section 
        1111(b)(3), that the local educational agency and schools 
        served under this part will use--
                ``(i) to determine the success of children served under 
            this part in meeting the State student academic achievement 
            standards, and to 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);
                ``(ii) to assist in diagnosis, teaching, and learning 
            in the classroom in ways that best enable low-achieving 
            children served under this part to meet State student 
            achievement academic standards and do well in the local 
            curriculum;
                ``(iii) to determine what revisions are needed to 
            projects under this part so that such children meet the 
            State student academic achievement standards; and
                ``(iv) to identify effectively students who may be at 
            risk for reading failure or who are having difficulty 
            reading, through the use of screening, diagnostic, and 
            classroom-based instructional reading assessments, as 
            defined under section 1208;
            ``(B) at the local educational agency's discretion, a 
        description of any other indicators that will be used in 
        addition to the academic indicators described in section 1111 
        for the uses described in such section;
            ``(C) a description of how the local educational agency 
        will provide additional educational assistance to individual 
        students assessed as needing help in meeting the State's 
        challenging student academic achievement standards;
            ``(D) a description of the strategy the local educational 
        agency will use to coordinate programs under this part with 
        programs under title II to provide professional development for 
        teachers and principals, and, if appropriate, pupil services 
        personnel, administrators, parents and other staff, including 
        local educational agency level staff in accordance with 
        sections 1118 and 1119;
            ``(E) 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--
                ``(i) 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
                ``(ii) services for children with limited English 
            proficiency, children with disabilities, migratory 
            children, neglected or delinquent youth, Indian children 
            served under part A of title VII, homeless children, and 
            immigrant children in order to increase program 
            effectiveness, eliminate duplication, and reduce 
            fragmentation of the instructional program;
            ``(F) 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 National 
        Education Statistics Act of 1994;
            ``(G) a description of the poverty criteria that will be 
        used to select school attendance areas under section 1113;
            ``(H) 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;
            ``(I) 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, and for neglected and 
        delinquent children in community day school programs;
            ``(J) 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;
            ``(K) 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, or 
        an agency operating an Even Start program, an Early Reading 
        First program, or another comparable public early childhood 
        development program;
            ``(L) a description of the actions the local educational 
        agency will take to assist its low-achieving schools identified 
        under section 1116 as in need of improvement;
            ``(M) a description of the actions the local educational 
        agency will take to implement public school choice and 
        supplemental services, consistent with the requirements of 
        section 1116;
            ``(N) a description of how the local educational agency 
        will meet the requirements of section 1119;
            ``(O) a description of the services the local educational 
        agency will provide homeless children, including services 
        provided with funds reserved under section 1113(c)(3)(A);
            ``(P) a description of the strategy the local educational 
        agency will use to implement effective parental involvement 
        under section 1118; and
            ``(Q) where appropriate, a description of how the local 
        educational agency will use funds under this part to support 
        after school (including before school and summer school) and 
        school-year extension programs.
        ``(2) Exception.--The academic assessments and indicators 
    described in subparagraphs (A) and (B) of paragraph (1) shall not 
    be used--
            ``(A) in lieu of the academic assessments required under 
        section 1111(b)(3) and other State academic indicators under 
        section 1111(b)(2); or
            ``(B) to reduce the number of, or change which, schools 
        would otherwise be subject to school improvement, corrective 
        action, or restructuring under section 1116, if such additional 
        assessments or indicators described in such subparagraphs were 
        not used, but such assessments and indicators may be used to 
        identify additional schools for school improvement or in need 
        of corrective action or restructuring.
    ``(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 actions 
        under paragraphs (7) and (8) of section 1116(b);
            ``(E) provide services to eligible children attending 
        private elementary schools 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 performance standards established under section 
        641A(a) of the Head Start Act;
            ``(H) work in consultation with schools as the schools 
        develop and implement their plans or activities under sections 
        1118 and 1119;
            ``(I) comply with the requirements of section 1119 
        regarding the qualifications of teachers and paraprofessionals 
        and professional development;
            ``(J) inform eligible schools of the local educational 
        agency's authority to obtain waivers on the school's behalf 
        under title IX and, if the State is an Ed-Flex Partnership 
        State, to obtain waivers under the Education Flexibility 
        Partnership Act of 1999;
            ``(K) coordinate and collaborate, to the extent feasible 
        and necessary as determined by the local educational agency, 
        with the State educational agency and other agencies providing 
        services to children, youth, and families with respect to a 
        school in school improvement, corrective action, or 
        restructuring under section 1116 if such a school requests 
        assistance from the local educational agency in addressing 
        major factors that have significantly affected student 
        achievement at the school;
            ``(L) ensure, through incentives for voluntary transfers, 
        the provision of professional development, recruitment 
        programs, or other effective strategies, that low-income 
        students and minority students are not taught at higher rates 
        than other students by unqualified, out-of-field, or 
        inexperienced teachers;
            ``(M) use the results of the student academic assessments 
        required under section 1111(b)(3), and other measures or 
        indicators available to the agency, to review annually the 
        progress of each school served by the agency and receiving 
        funds under this part to determine whether all of the schools 
        are making the progress necessary to ensure that all students 
        will meet the State's proficient level of achievement on the 
        State academic assessments described in section 1111(b)(3) 
        within 12 years from the end of the 2001-2002 school year;
            ``(N) ensure that the results from the academic assessments 
        required under section 1111(b)(3) will be provided to parents 
        and teachers as soon as is practicably possible after the test 
        is taken, in an understandable and uniform format and, to the 
        extent practicable, provided in a language that the parents can 
        understand; and
            ``(O) assist each school served by the agency and assisted 
        under this part in developing or identifying examples of high-
        quality, effective curricula consistent with section 
        1111(b)(8)(D).
        ``(2) Special rule.--In carrying out subparagraph (G) of 
    paragraph (1), the Secretary--
            ``(A) shall consult with the Secretary of Health and Human 
        Services 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 performance standards as in effect under section 
        641A(a) of the Head Start Act, 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.--Paragraph (1)(G) of this subsection 
    shall not apply to preschool programs using the Even Start model or 
    to Even Start programs that 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 
    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.
        ``(3) Review.--The State educational agency shall review the 
    local educational agency's plan to determine if such agencies 
    activities are in accordance with sections 1118 and 1119.
    ``(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.--
        ``(1) In general.--
            ``(A) Notice.--Each local educational agency using funds 
        under this part to provide a language instruction educational 
        program as determined in part C of title III shall, not later 
        than 30 days after the beginning of the school year, inform a 
        parent or parents of a limited English proficient child 
        identified for participation or participating in, such a 
        program of--
                ``(i) the reasons for the identification of their child 
            as limited English proficient and in need of placement in a 
            language instruction educational program;
                ``(ii) the child's level of English proficiency, how 
            such level was assessed, and the status of the child's 
            academic achievement;
                ``(iii) the methods of instruction used in the program 
            in which their child is, or will be participating, and the 
            methods of instruction used in other available programs, 
            including how such programs differ in content, 
            instructional goals, and the use of English and a native 
            language in instruction;
                ``(iv) how the program in which their child is, or will 
            be participating, will meet the educational strengths and 
            needs of their child;
                ``(v) how such program will specifically help their 
            child learn English, and meet age-appropriate academic 
            achievement standards for grade promotion and graduation;
                ``(vi) the specific exit requirements for the program, 
            including the expected rate of transition from such program 
            into classrooms that are not tailored for limited English 
            proficient children, and the expected rate of graduation 
            from secondary school for such program if funds under this 
            part are used for children in secondary schools;
                ``(vii) in the case of a child with a disability, how 
            such program meets the objectives of the individualized 
            education program of the child;
                ``(viii) information pertaining to parental rights that 
            includes written guidance--

                    ``(I) detailing--

                        ``(aa) the right that parents have to have 
                    their child immediately removed from such program 
                    upon their request; and
                        ``(bb) the options that parents have to decline 
                    to enroll their child in such program or to choose 
                    another program or method of instruction, if 
                    available; and

                    ``(II) assisting parents in selecting among various 
                programs and methods of instruction, if more than one 
                program or method is offered by the eligible entity.

            ``(B) Separate notification.--In addition to providing the 
        information required to be provided under paragraph (1), each 
        eligible entity that is using funds provided under this part to 
        provide a language instruction educational program, and that 
        has failed to make progress on the annual measurable 
        achievement objectives described in section 3122 for any fiscal 
        year for which part A is in effect, shall separately inform a 
        parent or the parents of a child identified for participation 
        in such program, or participating in such program, of such 
        failure not later than 30 days after such failure occurs.
        ``(2) Notice.--The notice and information provided in paragraph 
    (1) to a parent or parents of a child identified for participation 
    in a language instruction educational program for limited English 
    proficient children shall be in an understandable and uniform 
    format and, to the extent practicable, provided in a language that 
    the parents can understand.
        ``(3) Special rule applicable during the 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 notify parents within the first 2 weeks of 
    the child being placed in a language instruction educational 
    program consistent with paragraphs (1) and (2).
        ``(4) Parental participation.--Each local educational agency 
    receiving funds under this part shall implement an effective means 
    of outreach to parents of limited English proficient students to 
    inform the parents regarding how the parents can be involved in the 
    education of their children, and be active participants in 
    assisting their children to attain English proficiency, achieve at 
    high levels in core academic subjects, and meet challenging State 
    academic achievement standards and State academic content standards 
    expected of all students, including holding, and sending notice of 
    opportunities for, regular meetings for the purpose of formulating 
    and responding to recommendations from parents of students assisted 
    under this part.
        ``(5) Basis for admission or exclusion.--A student 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 served by the local 
        educational agency as a whole.
        ``(3) Ranking order.--If funds allocated in accordance with 
    subsection (c) are insufficient to serve all eligible school 
    attendance areas, a local educational agency shall--
            ``(A) annually rank, without regard to grade spans, such 
        agency's eligible school attendance areas in which the 
        concentration of children from low-income families exceeds 75 
        percent from highest to lowest according to the percentage of 
        children from low-income families; and
            ``(B) serve such eligible school attendance areas in rank 
        order.
        ``(4) Remaining funds.--If funds remain after serving all 
    eligible school attendance areas under paragraph (3), a local 
    educational agency shall--
            ``(A) annually rank such agency's remaining eligible school 
        attendance areas from highest to lowest either by grade span or 
        for the entire local educational agency according to the 
        percentage of children from low-income families; and
            ``(B) serve such eligible school attendance areas in rank 
        order either within each grade-span grouping or within the 
        local educational agency as a whole.
        ``(5) Measures.--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, 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 (c).
        ``(6) Exception.--This subsection shall not apply to a local 
    educational agency with a total enrollment of less than 1,000 
    children.
        ``(7) 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 (c), and permit such 
    agency to treat as eligible, and serve, any school that children 
    attend with a State-ordered, court-ordered school desegregation 
    plan or a plan that continues to be implemented in accordance with 
    a State-ordered or court-ordered desegregation plan, if--
            ``(A) the number of economically disadvantaged children 
        enrolled in the school is at least 25 percent of the school's 
        total enrollment; and
            ``(B) 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.
    ``(b) Local Educational Agency Discretion.--
        ``(1) In general.--Notwithstanding subsection (a)(2), a local 
    educational agency may--
            ``(A) designate as eligible any school attendance area or 
        school in which at least 35 percent of the children are from 
        low-income families;
            ``(B) 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;
            ``(C) designate and serve a school attendance area or 
        school that is not eligible under this section, but that was 
        eligible and that was served in the preceding fiscal year, but 
        only for 1 additional fiscal year; and
            ``(D) 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.
        ``(2) Special rule.--Notwithstanding paragraph (1)(D), the 
    number of children attending private elementary schools 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).
    ``(c) 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 subsections (a) and (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) In general.--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) Exception.--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) Financial incentives and rewards reservation.--A local 
    educational agency may reserve such funds as are necessary from 
    those funds received by the local educational agency under title 
    II, and not more than 5 percent of those funds received by the 
    local educational agency under subpart 2, to provide financial 
    incentives and rewards to teachers who serve in schools eligible 
    under this section and identified for school improvement, 
    corrective action, and restructuring under section 1116(b) for the 
    purpose of attracting and retaining qualified and effective 
    teachers.

``SEC. 1114. SCHOOLWIDE PROGRAMS.

    ``(a) Use of Funds for Schoolwide Programs.--
        ``(1) In general.--A local educational agency may consolidate 
    and use 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--
                ``(i) to identify particular children under this part 
            as eligible to participate in a schoolwide program; or
                ``(ii) to provide services to such children that are 
            supplementary, as otherwise required by section 1120A(b).
            ``(B) Supplemental 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 (b), 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, comparability of 
        services, uses of Federal funds to supplement, not supplant 
        non-Federal funds, or the distribution of funds to State 
        educational agencies or local educational agencies that apply 
        to the receipt of funds from such programs.
            ``(C) Records.--A school that consolidates and uses 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 the school 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 (b)(1)(D) in accordance with section 1119 for such 
    fiscal year, except that a school may enter into a consortium with 
    another school to carry out such activities.
    ``(b) 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 achievement 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 
            academic achievement described in section 1111(b)(1)(D);
                ``(ii) use effective methods and instructional 
            strategies that are based on 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) include strategies to 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, which may include--

                    ``(aa) counseling, pupil services, and mentoring 
                services;
                    ``(bb) college and career awareness and 
                preparation, such as college and career guidance, 
                personal finance education, and innovative teaching 
                methods, which may include applied learning and team-
                teaching strategies; and
                    ``(cc) the integration of vocational and technical 
                education programs; 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 highly qualified teachers.
            ``(D) In accordance with section 1119 and subsection 
        (a)(4), high-quality and ongoing professional development for 
        teachers, principals, and paraprofessionals and, if 
        appropriate, pupil services personnel, parents, 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 highly qualified 
        teachers to high-need schools.
            ``(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)(3) in order to provide information on, and to improve, 
        the achievement 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)(1) 
        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.
            ``(J) Coordination and integration of Federal, State, and 
        local services and programs, including programs supported under 
        this Act, violence prevention programs, nutrition programs, 
        housing programs, Head Start, adult education, vocational and 
        technical education, and job training.
        ``(2) Plan.--
            ``(A) In general.--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 date of enactment of the No Child Left Behind Act of 2001), 
        in consultation with the local educational agency and its 
        school support team or other technical assistance provider 
        under section 1117, a comprehensive plan for reforming the 
        total instructional program in the school that--
                ``(i) describes how the school will implement the 
            components described in paragraph (1);
                ``(ii) describes how the school will use resources 
            under this part and from other sources to implement those 
            components;
                ``(iii) includes a list of State educational agency and 
            local educational agency programs and other Federal 
            programs under subsection (a)(3) that will be consolidated 
            in the schoolwide program; and
                ``(iv) describes how the school will provide individual 
            student academic assessment results in a language the 
            parents can understand, including an interpretation of 
            those results, to the parents of a child who participates 
            in the academic assessments required by section 1111(b)(3).
            ``(B) Plan development.--The comprehensive plan shall be--
                ``(i) developed during a one-year period, unless--

                    ``(I) the local educational agency, after 
                considering the recommendation of the technical 
                assistance providers under section 1117, determines 
                that less time is needed to develop and implement the 
                schoolwide program; or
                    ``(II) the school is operating a schoolwide program 
                on the day preceding the date of enactment 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;

                ``(ii) 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;
                ``(iii) in effect for the duration of the school's 
            participation under this part and reviewed and revised, as 
            necessary, by the school;
                ``(iv) available to the local educational agency, 
            parents, and the public, and the information contained in 
            such plan shall be in an understandable and uniform format 
            and, to the extent practicable, provided in a language that 
            the parents can understand; and
                ``(v) 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.
    ``(c) Prekindergarten Program.--A school that is eligible for a 
schoolwide program under this section may use funds made available 
under this part to establish or enhance prekindergarten programs for 
children below the age of 6, 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(c) that are ineligible for a schoolwide program under 
section 1114, or that choose not to operate such a schoolwide program, 
a local educational agency serving such school 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) In general.--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) Eligible children from eligible population.--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 multiple, educationally 
        related, objective criteria established by the local 
        educational agency and supplemented by the school, except that 
        children from preschool through grade 2 shall be selected 
        solely on the basis of such criteria as teacher judgment, 
        interviews with parents, and developmentally appropriate 
        measures.
        ``(2) Children included.--
            ``(A) In general.--Children who are economically 
        disadvantaged, children with disabilities, migrant children or 
        limited English proficient children, are eligible for services 
        under this part on the same basis as other children selected to 
        receive services under this part.
            ``(B) Head start, even start, or early reading first 
        children.--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) Part c children.--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.
            ``(D) Neglected or delinquent children.--A child in a local 
        institution for neglected or delinquent children and youth or 
        attending a community day program for such children is eligible 
        for services under this part.
            ``(E) Homeless children.--A child who is homeless and 
        attending any school served by the local educational agency is 
        eligible for services under this part.
        ``(3) Special rule.--Funds received under this part may not be 
    used to provide services that are otherwise required by law to be 
    made available to children described in paragraph (2) but may be 
    used to coordinate or supplement such services.
    ``(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 part 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 on 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 highly qualified teachers;
            ``(F) in accordance with subsection (e)(3) and section 
        1119, provide opportunities for professional development with 
        resources provided under this part, and, to the extent 
        practicable, from other sources, for teachers, principals, and 
        paraprofessionals, including, if appropriate, pupil services 
        personnel, parents, and other staff, who work with 
        participating children in programs under this section or in the 
        regular education program;
            ``(G) provide strategies to increase parental involvement 
        in accordance with section 1118, such as family literacy 
        services; and
            ``(H) coordinate and integrate Federal, State, and local 
        services and programs, including programs supported under this 
        Act, violence prevention programs, nutrition programs, housing 
        programs, Head Start, adult education, vocational and technical 
        education, and job training.
        ``(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 coordinating 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 who need 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 into the 
regular school program and overall school planning and improvement 
efforts, public school personnel who are paid with funds received under 
this part may--
        ``(1) participate in general professional development and 
    school planning activities; and
        ``(2) assume limited duties that are assigned to similar 
    personnel who are not so paid, including duties beyond classroom 
    instruction or that do not benefit participating children, so long 
    as the amount of time spent on such duties is the same proportion 
    of total work time as prevails with respect to similar personnel at 
    the same school.
    ``(e) Special Rules.--
        ``(1) Simultaneous service.--Nothing in this section shall be 
    construed to prohibit a school from serving students under this 
    section simultaneously with students with similar educational 
    needs, in the same educational settings where appropriate.
        ``(2) Comprehensive services.--If--
            ``(A) health, 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
            ``(B) 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--
                ``(i) the provision of basic medical equipment, such as 
            eyeglasses and hearing aids;
                ``(ii) compensation of a coordinator; and
                ``(iii) 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 1119 for such fiscal year, and a school may 
    enter into a consortium with another school to carry out such 
    activities.

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

    ``(a) Local Review.--
        ``(1) In general.--Each local educational agency receiving 
    funds under this part shall--
            ``(A) use the State academic assessments and other 
        indicators 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) at the local educational agency's discretion, use any 
        academic assessments or any other academic indicators described 
        in the local educational agency's plan under section 
        1112(b)(1)(A) and (B) 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), except that the local educational agency may not 
        use such indicators (other than as provided for in section 
        1111(b)(2)(I)) if the indicators reduce the number or change 
        the schools that would otherwise be subject to school 
        improvement, corrective action, or restructuring under section 
        1116 if such additional indicators were not used, but may 
        identify additional schools for school improvement or in need 
        of corrective action or restructuring;
            ``(C) publicize and disseminate the results of the local 
        annual review described in paragraph (1) to parents, teachers, 
        principals, schools, and the community so that the teachers, 
        principals, other staff, and schools can continually refine, in 
        an instructionally useful manner, the program of instruction to 
        help all children served under this part meet the challenging 
        State student academic achievement standards established under 
        section 1111(b)(1); and
            ``(D) review the effectiveness of the actions and 
        activities the schools are carrying out under this part with 
        respect to parental involvement, professional development, and 
        other activities assisted under this part.
        ``(2) Available results.--The State educational agency shall 
    ensure that the results of State academic assessments administered 
    in that school year are available to the local educational agency 
    before the beginning of the next school year.
    ``(b) School Improvement.--
        ``(1) General requirements.--
            ``(A) Identification.--Subject to subparagraph (C), a local 
        educational agency shall identify for school improvement any 
        elementary school or secondary school served under this part 
        that fails, for 2 consecutive years, to make adequate yearly 
        progress as defined in the State's plan under section 
        1111(b)(2).
            ``(B) Deadline.--The identification described in 
        subparagraph (A) shall take place before the beginning of the 
        school year following such failure to make adequate yearly 
        progress.
            ``(C) Application.--Subparagraph (A) shall not apply to a 
        school if almost every student in each group specified in 
        section 1111(b)(2)(C)(v) enrolled in such school is meeting or 
        exceeding the State's proficient level of academic achievement.
            ``(D) Targeted assistance schools.--To determine if an 
        elementary school or a secondary school that is conducting a 
        targeted assistance program under section 1115 should be 
        identified for school improvement, corrective action, or 
        restructuring under this section, 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.--
                ``(i) In general.--In the case of a school identified 
            for school improvement under this paragraph, the local 
            educational agency shall, not later than the first day of 
            the school year following such identification, provide all 
            students enrolled in the school with the option to transfer 
            to another public school served by the local educational 
            agency, which may include a public charter school, that has 
            not been identified for school improvement under this 
            paragraph, unless such an option is prohibited by State 
            law.
                ``(ii) Rule.--In providing students the option to 
            transfer to another public school, the local educational 
            agency shall give priority to the lowest achieving children 
            from low-income families, as determined by the local 
            educational agency for purposes of allocating funds to 
            schools under section 1113(c)(1).
            ``(F) Transfer.--Students who use the option to transfer 
        under subparagraph (E) and paragraph (5)(A), (7)(C)(i), or 
        (8)(A)(i) or subsection (c)(10)(C)(vii) shall be enrolled in 
        classes and other activities in the public school to which the 
        students 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 
        paragraphs (1) or (5)(A), 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), (5)(A), (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 with respect to the identification.
        ``(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, and outside experts, for approval by such 
        local educational agency. The school plan shall cover a 2-year 
        period and--
                ``(i) incorporate strategies based on scientifically 
            based research that will strengthen the core academic 
            subjects in the school and address the specific academic 
            issues that caused the school to be identified for school 
            improvement, and may include a strategy for the 
            implementation of a comprehensive school reform model that 
            includes each of the components described in part F;
                ``(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)(v) and enrolled in the 
            school will meet the State's proficient level of 
            achievement on the State academic assessment described in 
            section 1111(b)(3) not later than 12 years after the end of 
            the 2001-2002 school year;
                ``(iii) provide an assurance that the school will spend 
            not less than 10 percent of the funds made available to the 
            school under section 1113 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 achievement 
                problem that caused the school to be identified for 
                school improvement;
                    ``(II) meets the requirements for professional 
                development activities under section 1119; and
                    ``(III) is provided in a manner that affords 
                increased opportunity for participating in that 
                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 objectives 
            for continuous and substantial progress by each group of 
            students specified in section 1111(b)(2)(C)(v) and enrolled 
            in the school that will ensure that all such groups of 
            students will, in accordance with adequate yearly progress 
            as defined in section 1111(b)(2), meet the State's 
            proficient level of achievement on the State academic 
            assessment described in section 1111(b)(3) not later than 
            12 years after the end of the 2001-2002 school year;
                ``(vi) describe how the school will provide written 
            notice about the identification to parents of each student 
            enrolled in such school, in a format and, to the extent 
            practicable, in a language that the parents can understand;
                ``(vii) specify the responsibilities of the school, the 
            local educational agency, and the State educational agency 
            serving the school under the plan, including the technical 
            assistance to be provided by the local educational agency 
            under paragraph (4) and the local educational agency's 
            responsibilities under section 1120A;
                ``(viii) include strategies to promote effective 
            parental involvement in the school;
                ``(ix) incorporate, as appropriate, activities before 
            school, after school, during the summer, and during any 
            extension of the school year; and
                ``(x) incorporate a teacher mentoring program.
            ``(B) Conditional approval.--The local educational agency 
        may condition approval of a school plan under this paragraph 
        on--
                ``(i) inclusion of one or more of the corrective 
            actions specified in paragraph (7)(C)(iv); 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 next full school year following the 
        identification under paragraph (1).
            ``(D) Plan approved during school year.--Notwithstanding 
        subparagraph (C), if 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, within 45 days of receiving a school plan, 
        shall--
                ``(i) establish a peer review process to assist with 
            review of the school plan; and
                ``(ii) promptly review the school plan, work with the 
            school as necessary, and approve the school plan if the 
            plan meets the requirements of this paragraph.
        ``(4) Technical assistance.--
            ``(A) In general.--For each school identified for school 
        improvement under paragraph (1), the local educational agency 
        serving the school shall ensure the provision of technical 
        assistance as the school develops and implements the school 
        plan under paragraph (3) throughout the plan's duration.
            ``(B) Specific assistance.--Such technical assistance--
                ``(i) shall include assistance in analyzing data from 
            the assessments required under section 1111(b)(3), and 
            other examples of student work, to identify and address 
            problems in instruction, and problems if any, in 
            implementing the parental involvement requirements 
            described in section 1118, the professional development 
            requirements described in section 1119, and the 
            responsibilities of the school and local educational agency 
            under the school plan, and to identify and address 
            solutions to such problems;
                ``(ii) shall include assistance in identifying and 
            implementing professional development, instructional 
            strategies, and methods of instruction that are based on 
            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's resources 
            are more effectively allocated to the activities most 
            likely to increase student academic 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 (that is 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 academic 
                achievement.

            ``(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) Failure to make adequate yearly progress after 
    identification.--In the case of any school served under this part 
    that fails to make adequate yearly progress, as set out in the 
    State's plan under section 1111(b)(2), by the end of the first full 
    school year after identification under paragraph (1), the local 
    educational agency serving such school--
            ``(A) shall continue to provide all students enrolled in 
        the school with the option to transfer to another public school 
        served by the local educational agency in accordance with 
        subparagraphs (E) and (F);
            ``(B) shall make supplemental educational services 
        available consistent with subsection (e)(1); and
            ``(C) shall continue to provide technical assistance.
        ``(6) Notice to parents.--A local educational agency shall 
    promptly provide to a parent or parents (in an understandable and 
    uniform format and, to the extent practicable, in a language the 
    parents can understand) of each student enrolled in an elementary 
    school or a secondary school identified for school improvement 
    under paragraph (1), for corrective action under paragraph (7), or 
    for restructuring under paragraph (8)--
            ``(A) an explanation of what the identification means, and 
        how the school 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 the parents can become involved 
        in addressing the academic issues that caused the school to be 
        identified for school improvement; and
            ``(F) an explanation of the parents' option to transfer 
        their child to another public school under paragraphs (1)(E), 
        (5)(A), (7)(C)(i), (8)(A)(i), and subsection (c)(10)(C)(vii) 
        (with transportation provided by the agency when required by 
        paragraph (9)) or to obtain supplemental educational services 
        for the child, in accordance with subsection (e).
        ``(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 each group of students described in 
            1111(b)(2)(C) enrolled in the school identified for 
            corrective action will meet or exceed the State's 
            proficient levels of achievement on the State academic 
            assessments described in section 1111(b)(3).
            ``(B) System.--In order to help students served under this 
        part meet challenging State student academic achievement 
        standards, each local educational agency shall implement a 
        system of corrective action in accordance with subparagraphs 
        (C) through (E).
            ``(C) Role of local educational agency.--In the case of any 
        school served by a local educational agency under this part 
        that fails to make adequate yearly progress, as defined by the 
        State under section 1111(b)(2), by the end of the second full 
        school year after the identification under paragraph (1), the 
        local educational agency shall--
                ``(i) continue to provide all students enrolled in the 
            school with the option to transfer to another public school 
            served by the local educational agency, in accordance with 
            paragraph (1)(E) and (F);
                ``(ii) continue to provide technical assistance 
            consistent with paragraph (4) while instituting any 
            corrective action under clause (iv);
                ``(iii) continue to make supplemental educational 
            services available, in accordance with subsection (e), to 
            children who remain in the school; and
                ``(iv) identify the school for corrective action and 
            take at least one of the following corrective actions:

                    ``(I) Replace the school staff who 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 
                achievement for low-achieving students and enabling the 
                school to make 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 making adequate yearly 
                progress, based on its school plan under paragraph (3).
                    ``(V) Extend the school year or school day for the 
                school.
                    ``(VI) Restructure the internal organizational 
                structure of the school.

            ``(D) Delay.--Notwithstanding any other provision of this 
        paragraph, the local educational agency may delay, for a period 
        not to exceed 1 year, implementation of the requirements under 
        paragraph (5), corrective action under this paragraph, or 
        restructuring under paragraph (8) if the school makes adequate 
        yearly progress for 1 year or if its failure to make adequate 
        yearly progress is 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. No such period shall be taken 
        into account in determining the number of consecutive years of 
        failure to make adequate yearly progress.
            ``(E) 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 an understandable and uniform format and, to 
            the extent practicable, provided 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, after 
        1 full school year of corrective action under paragraph (7), a 
        school subject to such corrective action continues to fail to 
        make adequate yearly progress, then the local educational 
        agency shall--
                ``(i) continue to provide all students enrolled in the 
            school with the option to transfer to another public school 
            served by the local educational agency, in accordance with 
            paragraph (1)(E) and (F);
                ``(ii) continue to make supplemental educational 
            services available, in accordance with subsection (e), to 
            children who remain in the school; 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 all or most of the school staff (which 
            may include the principal) who are relevant to the failure 
            to make adequate yearly progress.
                ``(iii) Entering into a contract with an entity, such 
            as a private management company, with a demonstrated record 
            of effectiveness, to operate the public school.
                ``(iv) Turning the operation of the school over to the 
            State educational agency, if permitted under State law and 
            agreed to by the State.
                ``(v) Any other major restructuring of the school's 
            governance arrangement that makes fundamental reforms, such 
            as significant changes in the school's staffing and 
            governance, to improve student academic achievement in the 
            school and that has substantial promise of enabling the 
            school to make adequate yearly progress as defined in the 
            State plan under section 1111(b)(2). In the case of a rural 
            local educational agency with a total of less than 600 
            students in average daily attendance at the schools that 
            are served by the agency and all of whose schools have a 
            School Locale Code of 7 or 8, as determined by the 
            Secretary, the Secretary shall, at such agency's request, 
            provide technical assistance to such agency for the purpose 
            of implementing this clause.
            ``(C) Prompt notice.--The local educational agency shall--
                ``(i) provide prompt notice to teachers and parents 
            whenever subparagraph (A) or (B) applies; and
                ``(ii) provide the teachers and parents with an 
            adequate opportunity to--

                    ``(I) comment before taking any action under those 
                subparagraphs; and
                    ``(II) participate in developing any plan under 
                subparagraph (A)(iii).

        ``(9) Transportation.--In any case described in paragraph 
    (1)(E) for schools described in paragraphs (1)(A), (5), (7)(C)(i), 
    and (8)(A), and subsection (c)(10)(C)(vii), the local educational 
    agency shall provide, or shall pay for the provision of, 
    transportation for the student to the public school the student 
    attends.
        ``(10) Funds for transportation and supplemental educational 
    services.--
            ``(A) In general.--Unless a lesser amount is needed to 
        comply with paragraph (9) and to satisfy all requests for 
        supplemental educational services under subsection (e), a local 
        educational agency shall spend an amount equal to 20 percent of 
        its allocation under subpart 2, from which the agency shall 
        spend--
                ``(i) an amount equal to 5 percent of its allocation 
            under subpart 2 to provide, or pay for, transportation 
            under paragraph (9);
                ``(ii) an amount equal to 5 percent of its allocation 
            under subpart 2 to provide supplemental educational 
            services under subsection (e); and
                ``(iii) an amount equal to the remaining 10 percent of 
            its allocation under subpart 2 for transportation under 
            paragraph (9), supplemental educational services under 
            subsection (e), or both, as the agency determines.
            ``(B) Total amount.--The total amount described in 
        subparagraph (A)(ii) is the maximum amount the local 
        educational agency shall be required to spend under this part 
        on supplemental educational services described in subsection 
        (e).
            ``(C) Insufficient funds.--If the amount of funds described 
        in subparagraph (A)(ii) or (iii) and available to provide 
        services under this subsection is insufficient to provide 
        supplemental educational services to each child whose parents 
        request the services, the local educational agency shall give 
        priority to providing the services to the lowest-achieving 
        children.
            ``(D) Prohibition.--A local educational agency shall not, 
        as a result of the application of this paragraph, reduce by 
        more than 15 percent the total amount made available under 
        section 1113(c) to a school described in paragraph (7)(C) or 
        (8)(A) of subsection (b).
        ``(11) Cooperative agreement.--In any case described in 
    paragraph (1)(E), (5)(A), (7)(C)(i), or (8)(A)(i), or subsection 
    (c)(10)(C)(vii) if all public schools served by the local 
    educational agency to which a child may transfer are identified for 
    school improvement, corrective action or restructuring, the agency 
    shall, to the extent practicable, establish a cooperative agreement 
    with other local educational agencies in the area for a transfer.
        ``(12) Duration.--If any school identified for school 
    improvement, corrective action, or restructuring makes adequate 
    yearly progress for two consecutive school years, the local 
    educational agency shall no longer subject the school to the 
    requirements of school improvement, corrective action, or 
    restructuring or identify the school for school improvement for the 
    succeeding school year.
        ``(13) Special rule.--A local educational agency shall permit a 
    child who transferred to another school under this subsection to 
    remain in that school until the child has completed the highest 
    grade in that school. The obligation of the local educational 
    agency to provide, or to provide for, transportation for the child 
    ends at the end of a school year if the local educational agency 
    determines that the school from which the child transferred is no 
    longer identified for school improvement or subject to corrective 
    action or restructuring.
        ``(14) State educational agency responsibilities.--The State 
    educational agency shall--
            ``(A) make technical assistance under section 1117 
        available to schools identified for school improvement, 
        corrective action, or restructuring under this subsection 
        consistent with section 1117(a)(2);
            ``(B) if the State educational agency determines that a 
        local educational agency failed to carry out its 
        responsibilities under this subsection, take such corrective 
        actions as the State educational agency determines to be 
        appropriate and in compliance with State law;
            ``(C) ensure that academic assessment results under this 
        part are provided to schools before any identification of a 
        school may take place under this subsection; and
            ``(D) for local educational agencies or schools identified 
        for improvement under this subsection, notify the Secretary of 
        major factors that were brought to the attention of the State 
        educational agency under section 1111(b)(9) that have 
        significantly affected student academic achievement.
    ``(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 to determine if each local educational agency is 
        carrying out its responsibilities under this section and 
        sections 1117, 1118, and 1119; and
            ``(B) publicize and disseminate to local educational 
        agencies, teachers and other staff, parents, students, and the 
        community the results of the State review, including 
        statistically sound disaggregated results, as required by 
        section 1111(b)(2).
        ``(2) Rewards.--In the case of a local educational agency that, 
    for 2 consecutive years, has exceeded adequate yearly progress as 
    defined in the State plan under section 1111(b)(2), the State may 
    make rewards of the kinds described under section 1117 to the 
    agency.
        ``(3) Identification of local educational agency for 
    improvement.--A State shall identify for improvement any local 
    educational agency that, for 2 consecutive years, including the 
    period immediately prior to the date of enactment of the No Child 
    Left Behind Act of 2001, failed to make adequate yearly progress as 
    defined in the State's plan under section 1111(b)(2).
        ``(4) Targeted assistance schools.--When reviewing targeted 
    assistance schools served by 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 (3) or corrective action 
        under paragraph (10), a State educational agency shall provide 
        the local educational agency with an opportunity to review the 
        data, including academic assessment data, on which the proposed 
        identification is based.
            ``(B) Evidence.--If the local educational agency believes 
        that the proposed identification is in error for statistical or 
        other substantive reasons, the agency may provide supporting 
        evidence to the State educational agency, which shall consider 
        the evidence 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 provide to the parents (in a format and, to the 
    extent practicable, in a language the parents can understand) of 
    each student enrolled in a school served by a local educational 
    agency identified for improvement, the results of the review under 
    paragraph (1) and, if the agency is identified for 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 (3) 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 
            schools served by the local educational agency;
                ``(ii) identify actions that have the greatest 
            likelihood of improving the achievement of participating 
            children in meeting the State's student academic 
            achievement standards;
                ``(iii) address the professional development needs of 
            the instructional staff serving the agency by committing to 
            spend not less than 10 percent of the funds received by the 
            local educational agency under subpart 2 for each fiscal 
            year in which the agency is identified for improvement for 
            professional development (including funds reserved for 
            professional development under subsection (b)(3)(A)(iii)), 
            but excluding funds reserved for professional development 
            under section 1119;
                ``(iv) 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)(v), consistent with adequate yearly progress 
            as defined under section 1111(b)(2);
                ``(v) address the fundamental teaching and learning 
            needs in the schools of that agency, and the specific 
            academic problems of low-achieving students, including a 
            determination of why the local educational agency's prior 
            plan failed to bring about increased student academic 
            achievement;
                ``(vi) incorporate, as appropriate, activities before 
            school, after school, during the summer, and during an 
            extension of the school year;
                ``(vii) specify the responsibilities of the State 
            educational agency and the local educational agency under 
            the plan, including specifying the technical assistance to 
            be provided by the State educational agency under paragraph 
            (9) and the local educational agency's responsibilities 
            under section 1120A; and
                ``(viii) include strategies to promote effective 
            parental involvement in the school.
            ``(B) Implementation.--The local educational agency shall 
        implement the plan (including a revised plan) expeditiously, 
        but not later than the beginning of the next school year after 
        the school year in which the agency was identified for 
        improvement.
        ``(9) State educational agency responsibility.--
            ``(A) Technical or other assistance.--For each local 
        educational agency identified under paragraph (3), the State 
        educational agency shall provide technical or other assistance 
        if requested, as authorized under section 1117, to better 
        enable the local educational agency to--
                ``(i) develop and implement the local educational 
            agency's plan; and
                ``(ii) work with schools needing improvement.
            ``(B) Methods and strategies.--Technical assistance 
        provided under this section by the State educational agency or 
        an entity authorized by such agency shall be supported by 
        effective methods and instructional strategies based on 
        scientifically based research. Such technical assistance shall 
        address problems, if any, in implementing the parental 
        involvement activities described in section 1118 and the 
        professional development activities described in section 1119.
        ``(10) Corrective action.--In order to help students served 
    under this part meet challenging State student academic achievement 
    standards, each State shall implement a system of corrective action 
    in accordance with the following:
            ``(A) 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 agency; and
                ``(ii) is designed to meet the goal of having all 
            students served under this part achieve at the proficient 
            and advanced student academic achievement levels.
            ``(B) General requirements.--After providing technical 
        assistance under paragraph (9) and subject to subparagraph (E), 
        the State--
                ``(i) may take corrective action at any time with 
            respect to a local educational agency that has been 
            identified under paragraph (3);
                ``(ii) shall take corrective action with respect to any 
            local educational agency that fails to make adequate yearly 
            progress, as defined by the State, by the end of the second 
            full school year after the identification of the agency 
            under paragraph (3); and
                ``(iii) shall continue to provide technical assistance 
            while instituting any corrective action under clause (i) or 
            (ii).
            ``(C) Certain corrective actions required.--In the case of 
        a local educational agency identified for corrective action, 
        the State educational agency shall take at least one of the 
        following corrective actions:
                ``(i) Deferring programmatic funds or reducing 
            administrative funds.
                ``(ii) Instituting and fully implementing a new 
            curriculum that is based on State and local academic 
            content and achievement standards, including providing 
            appropriate professional development based on 
            scientifically based research for all relevant staff, that 
            offers substantial promise of improving educational 
            achievement for low-achieving students.
                ``(iii) Replacing the local educational agency 
            personnel who are relevant to the failure to make adequate 
            yearly progress.
                ``(iv) Removing particular schools from the 
            jurisdiction of the local educational agency and 
            establishing alternative arrangements for public governance 
            and supervision of such schools.
                ``(v) Appointing, 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.
                ``(vi) Abolishing or restructuring the local 
            educational agency.
                ``(vii) Authorizing students to transfer from a school 
            operated by the local educational agency to a higher-
            performing public school operated by another local 
            educational agency in accordance with subsections (b)(1)(E) 
            and (F), and providing to such students transportation (or 
            the costs of transportation) to such schools consistent 
            with subsection (b)(9), in conjunction with carrying out 
            not less than one additional action described under this 
            subparagraph.
            ``(D) Hearing.--Prior to implementing any corrective action 
        under this paragraph, the State educational agency shall 
        provide notice and a hearing to the affected local educational 
        agency, if State law provides for such notice and hearing. The 
        hearing shall take place not later than 45 days following the 
        decision to implement corrective action.
            ``(E) Notice to parents.--The State educational agency 
        shall publish, and disseminate to parents and the public, 
        information on any corrective action the State educational 
        agency takes under this paragraph through such means as the 
        Internet, the media, and public agencies.
            ``(F) Delay.--Notwithstanding subparagraph (B)(ii), a State 
        educational agency may delay, for a period not to exceed 1 
        year, implementation of corrective action under this paragraph 
        if the local educational agency makes adequate yearly progress 
        for 1 year or its failure to make adequate yearly progress is 
        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. No such 
        period shall be taken into account in determining the number of 
        consecutive years of failure to make adequate yearly progress.
        ``(11) Special rule.--If a local educational agency makes 
    adequate yearly progress for two consecutive school years beginning 
    after the date of identification of the agency under paragraph (3), 
    the State educational agency need no longer identify the local 
    educational agency for improvement or subject the local educational 
    agency to corrective action for the succeeding school year.
    ``(d) Construction.--Nothing in this section shall be construed to 
alter or otherwise affect the rights, remedies, and procedures afforded 
school or school district employees under Federal, State, or local laws 
(including applicable regulations or court orders) or under the terms 
of collective bargaining agreements, memoranda of understanding, or 
other agreements between such employees and their employers.
    ``(e) Supplemental Educational Services.--
        ``(1) Supplemental educational services.--In the case of any 
    school described in paragraph (5), (7), or (8) of subsection (b), 
    the local educational agency serving such school shall, subject to 
    this subsection, arrange for the provision of supplemental 
    educational services to eligible children in the school from a 
    provider with a demonstrated record of effectiveness, that is 
    selected by the parents and approved for that purpose by the State 
    educational agency in accordance with reasonable criteria, 
    consistent with paragraph (5), that the State educational agency 
    shall adopt.
        ``(2) Local educational agency responsibilities.--Each local 
    educational agency subject to this subsection shall--
            ``(A) provide, at a minimum, annual notice to parents (in 
        an understandable and uniform format and, to the extent 
        practicable, in a language the parents can understand) of--
                ``(i) the availability of services under this 
            subsection;
                ``(ii) the identity of approved providers of those 
            services that are within the local educational agency or 
            whose services are reasonably available in neighboring 
            local educational agencies; and
                ``(iii) a brief description of the services, 
            qualifications, and demonstrated effectiveness of each such 
            provider;
            ``(B) if requested, assist parents in choosing a provider 
        from the list of approved providers maintained by the State;
            ``(C) apply fair and equitable procedures for serving 
        students if the number of spaces at approved providers is not 
        sufficient to serve all students; and
            ``(D) not disclose to the public the identity of any 
        student who is eligible for, or receiving, supplemental 
        educational services under this subsection without the written 
        permission of the parents of the student.
        ``(3) Agreement.--In the case of the selection of an approved 
    provider by a parent, the local educational agency shall enter into 
    an agreement with such provider. Such agreement shall--
            ``(A) require the local educational agency to develop, in 
        consultation with parents (and the provider chosen by the 
        parents), a statement of specific achievement goals for the 
        student, how the student's progress will be measured, and a 
        timetable for improving achievement that, in the case of a 
        student with disabilities, is consistent with the student's 
        individualized education program under section 614(d) of the 
        Individuals with Disabilities Education Act;
            ``(B) describe how the student's parents and the student's 
        teacher or teachers will be regularly informed of the student's 
        progress;
            ``(C) provide for the termination of such agreement if the 
        provider is unable to meet such goals and timetables;
            ``(D) contain provisions with respect to the making of 
        payments to the provider by the local educational agency; and
            ``(E) prohibit the provider from disclosing to the public 
        the identity of any student eligible for, or receiving, 
        supplemental educational services under this subsection without 
        the written permission of the parents of such student.
        ``(4) State educational agency responsibilities.--A State 
    educational agency shall--
            ``(A) in consultation with local educational agencies, 
        parents, teachers, and other interested members of the public, 
        promote maximum participation by providers to ensure, to the 
        extent practicable, that parents have as many choices as 
        possible;
            ``(B) develop and apply objective criteria, consistent with 
        paragraph (5), to potential providers that are based on a 
        demonstrated record of effectiveness in increasing the academic 
        proficiency of students in subjects relevant to meeting the 
        State academic content and student achievement standards 
        adopted under section 1111(b)(1);
            ``(C) maintain an updated list of approved providers across 
        the State, by school district, from which parents may select;
            ``(D) develop, implement, and publicly report on standards 
        and techniques for monitoring the quality and effectiveness of 
        the services offered by approved providers under this 
        subsection, and for withdrawing approval from providers that 
        fail, for 2 consecutive years, to contribute to increasing the 
        academic proficiency of students served under this subsection 
        as described in subparagraph (B); and
            ``(E) provide annual notice to potential providers of 
        supplemental educational services of the opportunity to provide 
        services under this subsection and of the applicable procedures 
        for obtaining approval from the State educational agency to be 
        an approved provider of those services.
        ``(5) Criteria for providers.--In order for a provider to be 
    included on the State list under paragraph (4)(C), a provider shall 
    agree to carry out the following:
            ``(A) Provide parents of children receiving supplemental 
        educational services under this subsection and the appropriate 
        local educational agency with information on the progress of 
        the children in increasing achievement, in a format and, to the 
        extent practicable, a language that such parents can 
        understand.
            ``(B) Ensure that instruction provided and content used by 
        the provider are consistent with the instruction provided and 
        content used by the local educational agency and State, and are 
        aligned with State student academic achievement standards.
            ``(C) Meet all applicable Federal, State, and local health, 
        safety, and civil rights laws.
            ``(D) Ensure that all instruction and content under this 
        subsection are secular, neutral, and nonideological.
        ``(6) Amounts for supplemental educational services.--The 
    amount that a local educational agency shall make available for 
    supplemental educational services for each child receiving those 
    services under this subsection shall be the lesser of--
            ``(A) the amount of the agency's allocation under subpart 
        2, divided by the number of children from families below the 
        poverty level counted under section 1124(c)(1)(A); or
            ``(B) the actual costs of the supplemental educational 
        services received by the child.
        ``(7) Funds provided by state educational agency.--Each State 
    educational agency may use funds that the agency reserves under 
    this part, and part A of title V, to assist local educational 
    agencies that do not have sufficient funds to provide services 
    under this subsection for all eligible students requesting such 
    services.
        ``(8) Duration.--The local educational agency shall continue to 
    provide supplemental educational services to a child receiving such 
    services under this subsection until the end of the school year in 
    which such services were first received.
        ``(9) Prohibition.--Nothing contained in this subsection shall 
    permit the making of any payment for religious worship or 
    instruction.
        ``(10) Waiver.--
            ``(A) Requirement.--At the request of a local educational 
        agency, a State educational agency may waive, in whole or in 
        part, the requirement of this subsection to provide 
        supplemental educational services if the State educational 
        agency determines that--
                ``(i) none of the providers of those services on the 
            list approved by the State educational agency under 
            paragraph (4)(C) makes those services available in the area 
            served by the local educational agency or within a 
            reasonable distance of that area; and
                ``(ii) the local educational agency provides evidence 
            that it is not able to provide those services.
            ``(B) Notification.--The State educational agency shall 
        notify the local educational agency, within 30 days of 
        receiving the local educational agency's request for a waiver 
        under subparagraph (A), whether the request is approved or 
        disapproved and, if disapproved, the reasons for the 
        disapproval, in writing.
        ``(11) Special rule.--If State law prohibits a State 
    educational agency from carrying out one or more of its 
    responsibilities under paragraph (4) with respect to those who 
    provide, or seek approval to provide, supplemental educational 
    services, each local educational agency in the State shall carry 
    out those responsibilities with respect to its students who are 
    eligible for those services.
        ``(12) Definitions.--In this subsection--
            ``(A) the term `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) the term `provider' means a non-profit entity, a for-
        profit entity, or a local educational agency that--
                ``(i) has a demonstrated record of effectiveness in 
            increasing student academic achievement;
                ``(ii) is capable of providing supplemental educational 
            services that are consistent with the instructional program 
            of the local educational agency and the academic standards 
            described under section 1111; and
                ``(iii) is financially sound; and
            ``(C) the term `supplemental educational services' means 
        tutoring and other supplemental academic enrichment services 
        that are--
                ``(i) in addition to instruction provided during the 
            school day; and
                ``(ii) are of high quality, research-based, and 
            specifically designed to increase the academic achievement 
            of eligible children on the academic assessments required 
            under section 1111 and attain proficiency in meeting the 
            State's academic achievement standards.
    ``(f) Schools and LEAs Previously Identified for Improvement or 
Corrective Action.--
        ``(1) Schools.--
            ``(A) School improvement.--
                ``(i) Schools in school-improvement status before date 
            of enactment.--Any school that was in the first year of 
            school improvement status under this section on the day 
            preceding the date of enactment of the No Child Left Behind 
            Act of 2001 (as this section was in effect on such day) 
            shall be treated by the local educational agency as a 
            school that is in the first year of school improvement 
            status under paragraph (1).
                ``(ii) Schools in school-improvement status for 2 or 
            more years before date of enactment.--Any school that was 
            in school improvement status under this section for two or 
            more consecutive school years preceding the date of 
            enactment of the No Child Left Behind Act of 2001 (as this 
            section was in effect on such day) shall be treated by the 
            local educational agency as a school described in 
            subsection (b)(5).
            ``(B) Corrective action.--Any school that was in corrective 
        action status under this section on the day preceding the date 
        of enactment of the No Child Left Behind Act of 2001 (as this 
        section was in effect on such day) shall be treated by the 
        local educational agency as a school described in paragraph 
        (7).
        ``(2) LEAs.--
            ``(A) LEA improvement.--A State shall identify for 
        improvement under subsection (c)(3) any local educational 
        agency that was in improvement status under this section as 
        this section was in effect on the day preceding the date of 
        enactment of the No Child Left Behind Act of 2001.
            ``(B) Corrective action.--A State shall identify for 
        corrective action under subsection (c)(10) any local 
        educational agency that was in corrective action status under 
        this section as this section was in effect on the day preceding 
        the date of enactment of the No Child Left Behind Act of 2001.
            ``(C) Special rule.--For the schools and other local 
        educational agencies described under paragraphs (1) and (2), as 
        required, the State shall ensure that public school choice in 
        accordance with subparagraphs (b)(1)(E) and (F) and 
        supplemental education services in accordance with subsection 
        (e) are provided not later than the first day of the 2002-2003 
        school year.
            ``(D) Transition.--With respect to a determination that a 
        local educational agency has for 2 consecutive years failed to 
        make adequate yearly progress as defined in the State plan 
        under section 1111(b)(2), such determination shall include in 
        such 2-year period any continuous period of time immediately 
        preceding the date of enactment of the No Child Left Behind Act 
        of 2001 during which the agency has failed to make such 
        progress.
    ``(g) Schools Funded by the Bureau of Indian Affairs.--
        ``(1) Adequate yearly progress for bureau funded schools.--
            ``(A) Development of definition.--
                ``(i) Definition.--The Secretary of the Interior, in 
            consultation with the Secretary if the Secretary of 
            Interior requests the consultation, using the process set 
            out in section 1138(b) of the Education Amendments of 1978, 
            shall define adequate yearly progress, consistent with 
            section 1111(b), for the schools funded by the Bureau of 
            Indian Affairs on a regional or tribal basis, as 
            appropriate, taking into account the unique circumstances 
            and needs of such schools and the students served by such 
            schools.
                ``(ii) Use of definition.--The Secretary of the 
            Interior, consistent with clause (i), may use the 
            definition of adequate yearly progress that the State in 
            which the school that is funded by the Bureau is located 
            uses consistent with section 1111(b), or in the case of 
            schools that are located in more than one State, the 
            Secretary of the Interior may use whichever State 
            definition of adequate yearly progress that best meets the 
            unique circumstances and needs of such school or schools 
            and the students the schools serve.
            ``(B) Waiver.--The tribal governing body or school board of 
        a school funded by the Bureau of Indian Affairs may waive, in 
        part or in whole, the definition of adequate yearly progress 
        established pursuant to paragraph (A) where such definition is 
        determined by such body or school board to be inappropriate. If 
        such definition is waived, the tribal governing body or school 
        board shall, within 60 days thereafter, submit to the Secretary 
        of Interior a proposal for an alternative definition of 
        adequate yearly progress, consistent with section 1111(b), that 
        takes into account the unique circumstances and needs of such 
        school or schools and the students served. The Secretary of the 
        Interior, in consultation with the Secretary if the Secretary 
        of Interior requests the consultation, shall approve such 
        alternative definition unless the Secretary determines that the 
        definition does not meet the requirements of section 1111(b), 
        taking into account the unique circumstances and needs of such 
        school or schools and the students served.
            ``(C) Technical assistance.--The Secretary of Interior 
        shall, in consultation with the Secretary if the Secretary of 
        Interior requests the consultation, either directly or through 
        a contract, provide technical assistance, upon request, to a 
        tribal governing body or school board of a school funded by the 
        Bureau of Indian Affairs that seeks to develop an alternative 
        definition of adequate yearly progress.
        ``(2) Accountability for bia schools.--For the purposes of this 
    section, schools funded by the Bureau of Indian Affairs shall be 
    considered schools subject to subsection (b), as specifically 
    provided for in this subsection, except that such schools shall not 
    be subject to subsection (c), or the requirements to provide public 
    school choice and supplemental educational services under 
    subsections (b) and (e).
        ``(3) School improvement for bureau schools.--
            ``(A) Contract and grant schools.--For a school funded by 
        the Bureau of Indian Affairs which is operated under a contract 
        issued by the Secretary of the Interior pursuant to the Indian 
        Self-Determination Act (25 U.S.C. 450 et seq.) or under a grant 
        issued by the Secretary of the Interior pursuant to the 
        Tribally Controlled Schools Act of 1988 (25 U.S.C. 2501 et 
        seq.), the school board of such school shall be responsible for 
        meeting the requirements of subsection (b) relating to 
        development and implementation of any school improvement plan 
        as described in subsections (b)(1) through (b)(3), and 
        subsection (b)(5), other than subsection (b)(1)(E). The Bureau 
        of Indian Affairs shall be responsible for meeting the 
        requirements of subsection (b)(4) relating to technical 
        assistance.
            ``(B) Bureau operated schools.--For schools operated by the 
        Bureau of Indian Affairs, the Bureau shall be responsible for 
        meeting the requirements of subsection (b) relating to 
        development and implementation of any school improvement plan 
        as described in subsections (b)(1) through (b)(5), other than 
        subsection (b)(1)(E).
        ``(4) Corrective action and restructuring for bureau-funded 
    schools.--
            ``(A) Contract and grant schools.--For a school funded by 
        the Bureau of Indian Affairs which is operated under a contract 
        issued by the Secretary of the Interior pursuant to the Indian 
        Self-Determination Act (25 U.S.C. 450 et seq.) or under a grant 
        issued by the Secretary of the Interior pursuant to the 
        Tribally Controlled Schools Act of 1988 (25 U.S.C. 2501 et 
        seq.), the school board of such school shall be responsible for 
        meeting the requirements of subsection (b) relating to 
        corrective action and restructuring as described in subsection 
        (b)(7) and (b)(8). Any action taken by such school board under 
        subsection (b)(7) or (b)(8) shall take into account the unique 
        circumstances and structure of the Bureau of Indian Affairs-
        funded school system and the laws governing that system.
            ``(B) Bureau operated schools.--For schools operated by the 
        Bureau of Indian Affairs, the Bureau shall be responsible for 
        meeting the requirements of subsection (b) relating to 
        corrective action and restructuring as described in subsection 
        (b)(7) and (b)(8). Any action taken by the Bureau under 
        subsection (b)(7) or (b)(8) shall take into account the unique 
        circumstances and structure of the Bureau of Indian Affairs-
        funded school system and the laws governing that system.
        ``(5) Annual report.--On an annual basis, the Secretary of the 
    Interior shall report to the Secretary of Education and to the 
    appropriate committees of Congress regarding any schools funded by 
    the Bureau of Indian Affairs which have been identified for school 
    improvement. Such report shall include--
            ``(A) the identity of each school;
            ``(B) a statement from each affected school board regarding 
        the factors that lead to such identification; and
            ``(C) an analysis by the Secretary of the Interior, in 
        consultation with the Secretary if the Secretary of Interior 
        requests the consultation, as to whether sufficient resources 
        were available to enable such school to achieve adequate yearly 
        progress.
    ``(h) Other Agencies.--After receiving the notice described in 
subsection (b)(14)(D), the Secretary may notify, to the extent feasible 
and necessary as determined by the Secretary, other relevant Federal 
agencies regarding the major factors that were determined by the State 
educational agency to have significantly affected student academic 
achievement.

``SEC. 1117. SCHOOL SUPPORT AND RECOGNITION.

    ``(a) System for Support.--
        ``(1) In general.--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 served by 
    those agencies and schools to meet the State's academic content 
    standards and student academic achievement standards.
        ``(2) Priorities.--In carrying out this subsection, a State 
    shall--
            ``(A) first, provide support and assistance to local 
        educational agencies with schools subject to corrective action 
        under section 1116 and assist those 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);
            ``(B) second, provide support and assistance to other local 
        educational agencies with schools identified as in need of 
        improvement under section 1116(b); and
            ``(C) 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.
        ``(3) Regional centers.--Such a statewide system shall, to the 
    extent practicable, work with and receive support and assistance 
    from the comprehensive regional technical assistance centers and 
    the regional educational laboratories under section 941(h) of the 
    Educational Research, Development, Dissemination, and Improvement 
    Act of 1994, or other providers of technical assistance.
        ``(4) Statewide system.--
            ``(A) In order to achieve the purpose described in 
        paragraph (1), the statewide system shall include, at a 
        minimum, the following approaches:
                ``(i) Establishing school support teams in accordance 
            with subparagraph (C) for assignment to, and working in, 
            schools in the State that are described in paragraph (2).
                ``(ii) Providing such support as the State educational 
            agency determines necessary and available in order to 
            ensure the effectiveness of such teams.
                ``(iii) Designating and using distinguished teachers 
            and principals who are chosen from schools served under 
            this part that have been especially successful in improving 
            academic achievement.
                ``(iv) Devising additional approaches to providing the 
            assistance described in paragraph (1), 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.
            ``(B) Priority.--The State educational agency shall give 
        priority to the approach described in clause (i) of 
        subparagraph (A).
        ``(5) School support teams.--
            ``(A) Composition.--Each school support team established 
        under this section shall be composed of persons knowledgeable 
        about scientifically based research and practice on teaching 
        and learning and about successful schoolwide projects, school 
        reform, and improving educational opportunities for low-
        achieving students, including--
                ``(i) highly qualified or distinguished teachers and 
            principals;
                ``(ii) pupil services personnel;
                ``(iii) parents;
                ``(iv) representatives of institutions of higher 
            education;
                ``(v) representatives of regional educational 
            laboratories or comprehensive regional technical assistance 
            centers;
                ``(vi) representatives of outside consultant groups; or
                ``(vii) other individuals as the State educational 
            agency, in consultation with the local educational agency, 
            may determine appropriate.
            ``(B) Functions.--Each school support team assigned to a 
        school under this section shall--
                ``(i) review and analyze all facets of the school's 
            operation, including the design and operation of the 
            instructional program, and assist the school in developing 
            recommendations for improving student performance in that 
            school;
                ``(ii) collaborate with parents and school staff and 
            the local educational agency serving the school in the 
            design, implementation, and monitoring of a plan that, if 
            fully implemented, can reasonably be expected to improve 
            student performance and help the school meet its goals for 
            improvement, including adequate yearly progress under 
            section 1111(b)(2)(B);
                ``(iii) evaluate, at least semiannually, the 
            effectiveness of school personnel assigned to the school, 
            including identifying outstanding teachers and principals, 
            and make findings and recommendations to the school, the 
            local educational agency, and, where appropriate, the State 
            educational agency; and
                ``(iv) make additional recommendations as the school 
            implements the plan described in clause (ii) to the local 
            educational agency and the State educational agency 
            concerning additional assistance that is needed by the 
            school or the school support team.
            ``(C) Continuation of assistance.--After one school year, 
        from the beginning of the activities, such school support team, 
        in consultation with the local educational agency, may 
        recommend that the school support team continue to provide 
        assistance to the school, or that the local educational agency 
        or the State educational agency, as appropriate, take 
        alternative actions with regard to the school.
    ``(b) State Recognition.--
        ``(1) Academic achievement awards program.--
            ``(A) In general.--Each State receiving a grant under this 
        part--
                ``(i) shall establish a program for making academic 
            achievement awards to recognize schools that meet the 
            criteria described in subparagraph (B); and
                ``(ii) as appropriate and as funds are available under 
            subsection (c)(2)(A), may financially reward schools served 
            under this part that meet the criteria described in clause 
            (ii).
            ``(B) Criteria.--The criteria referred to in subparagraph 
        (A) are that a school--
                ``(i) significantly closed the achievement gap between 
            the groups of students described in section 1111(b)(2); or
                ``(ii) exceeded their adequate yearly progress, 
            consistent with section 1111(b)(2), for 2 or more 
            consecutive years.
        ``(2) Distinguished schools.--Of those schools meeting the 
    criteria described in paragraph (2), each State shall designate as 
    distinguished schools those schools that have made the greatest 
    gains in closing the achievement gap as described in subparagraph 
    (B)(i) or exceeding adequate yearly progress as described in 
    subparagraph (B)(ii). Such distinguished schools may serve as 
    models for and provide support to other schools, especially schools 
    identified for improvement under section 1116, to assist such 
    schools in meeting the State's academic content standards and 
    student academic achievement standards.
        ``(3) 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 that consistently 
    makes significant gains in academic achievement in the areas in 
    which the teacher provides instruction, or to teachers or 
    principals designated as distinguished under subsection 
    (a)(4)(A)(iii).
    ``(c) Funding.--
        ``(1) In general.--Each State--
            ``(A) shall use funds reserved under section 1003(a) and 
        may use funds made available under section 1003(g) for the 
        approaches described under subsection (a)(4)(A); and
            ``(B) shall use State administrative funds authorized under 
        section 1004(a) to establish the statewide system of support 
        described under subsection (a).
        ``(2) Reservations of funds by state.--
            ``(A) Awards program.--For the purpose of carrying out 
        subsection (b)(1), each State receiving a grant under this part 
        may reserve, from the amount (if any) by which the funds 
        received by the State under subpart 2 for a fiscal year exceed 
        the amount received by the State under that subpart for the 
        preceding fiscal year, not more than 5 percent of such excess 
        amount.
            ``(B) Teacher awards.--For the purpose of carrying out 
        subsection (b)(3), a State educational agency may reserve such 
        funds as necessary from funds made available under section 
        2113.
        ``(3) Use within 3 years.--Notwithstanding any other provision 
    of law, the amount reserved under subparagraph (A) by a State for 
    each fiscal year shall remain available to the State until expended 
    for a period not exceeding 3 years receipt of funds.
        ``(4) Special allocation rule for schools in high-poverty 
    areas.--
            ``(A) In general.--Each State shall distribute not less 
        than 75 percent of any amount reserved under paragraph (2)(A) 
        for each fiscal year to schools described in subparagraph (B), 
        or to teachers in those schools consistent with subsection 
        (b)(3).
            ``(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 this section. 
    Such programs, activities, and procedures 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 on 
    with, and distribute to, parents of participating children a 
    written parent involvement policy. The policy shall be incorporated 
    into the local educational agency's plan developed under section 
    1112, establish the agency's expectations for parent involvement, 
    and describe how the 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 
        activities to improve student academic achievement and school 
        performance;
            ``(C) build the schools' and parents' capacity for strong 
        parental 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 the Head Start program, Reading 
        First program, Early Reading First program, Even Start program, 
        Parents as Teachers program, and 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, including identifying barriers 
        to greater participation by parents in activities authorized by 
        this section (with particular attention to parents who are 
        economically disadvantaged, are disabled, have limited English 
        proficiency, have limited literacy, or are of any racial or 
        ethnic minority background), and use the findings of such 
        evaluation to design strategies for more effective parental 
        involvement, and to revise, if necessary, the parental 
        involvement policies described in this section; 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 subpart 2 of this part to carry out this section, 
        including promoting family literacy and parenting skills, 
        except that this paragraph shall not apply if 1 percent of such 
        agency's allocation under subpart 2 of this part 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 on 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 an understandable and uniform format and, 
    to the extent practicable, provided in a language the parents can 
    understand. Such policy shall be made available to the local 
    community and 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 involved 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 the requirements of 
    this part, and the right of the parents 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 planning, review, and improvement of the 
    school parental involvement policy and the joint development of the 
    schoolwide program plan under section 1114(b)(2), except that if a 
    school has in place a process for involving parents in the joint 
    planning and design of the school's 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
            ``(C) if requested by parents, opportunities for regular 
        meetings to formulate suggestions and to participate, as 
        appropriate, in decisions relating to the education of their 
        children, and respond to any such suggestions as soon as 
        practicably possible; and
        ``(5) if the schoolwide program plan under section 1114(b)(2) 
    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 Academic 
Achievement.--As a component of the school-level parental involvement 
policy developed under subsection (b), each school served under this 
part shall jointly develop with parents for all children served under 
this part a school-parent compact that outlines how parents, the entire 
school staff, and students will share the responsibility for improved 
student academic achievement and the means by which the school and 
parents will build and develop a partnership to help children achieve 
the State's high standards. Such compact shall--
        ``(1) describe the school's responsibility to provide high-
    quality curriculum and instruction in a supportive and effective 
    learning environment that enables the children served under this 
    part to meet the State's student academic achievement standards, 
    and the ways in which each parent will be responsible for 
    supporting their children's learning, such as monitoring 
    attendance, homework completion, and television watching; 
    volunteering in their child's classroom; and participating, as 
    appropriate, in decisions relating to the education of their 
    children and positive use of extracurricular time; and
        ``(2) address the importance of communication between teachers 
    and parents on an ongoing basis through, at a minimum--
            ``(A) parent-teacher conferences in elementary schools, at 
        least annually, during which the compact shall be discussed as 
        the compact relates to the individual child's achievement;
            ``(B) frequent reports to parents on their children's 
        progress; and
            ``(C) reasonable access to staff, opportunities to 
        volunteer and participate in their child's class, and 
        observation of classroom activities.
    ``(e) Building Capacity for Involvement.--To ensure effective 
involvement of parents and to support a partnership among the school 
involved, parents, and the community to improve student academic 
achievement, each school and local educational agency assisted under 
this part--
        ``(1) shall provide assistance to parents of children served by 
    the school or local educational agency, as appropriate, in 
    understanding such topics as 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 
    achievement of their children;
        ``(2) shall provide materials and training to help parents to 
    work with their children to improve their children's achievement, 
    such as literacy training and using technology, as appropriate, to 
    foster parental involvement;
        ``(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, to the extent feasible and appropriate, 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 and other programs, and 
    conduct other activities, such as parent resource centers, that 
    encourage and support parents in more fully participating in the 
    education of their children;
        ``(5) shall ensure that information related to school and 
    parent programs, meetings, and other activities is sent to the 
    parents of participating children in a format and, to the extent 
    practicable, in a language the parents can understand;
        ``(6) may involve parents in the development of training for 
    teachers, principals, and other educators to improve the 
    effectiveness of such training;
        ``(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 training;
        ``(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 school meetings at a variety of times, or 
    conduct in-home conferences between teachers or other educators, 
    who work directly with participating children, with parents who are 
    unable to attend such conferences at school, in order to maximize 
    parental involvement and participation;
        ``(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 section;
        ``(13) may develop appropriate roles for community-based 
    organizations and businesses in parent involvement activities; and
        ``(14) shall provide such other reasonable support for parental 
    involvement activities under this section as parents may request.
    ``(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, parents 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.
    ``(g) Information From Parental Information and Resource Centers.--
In a State where a parental information and resource center is 
established to provide training, information, and support to parents 
and individuals who work with local parents, local educational 
agencies, and schools receiving assistance under this part, each local 
educational agency or school that receives assistance under this part 
and is located in the State shall assist parents and parental 
organizations by informing such parents and organizations of the 
existence and purpose of such centers.
    ``(h) Review.--The State educational agency shall review the local 
educational agency's parental involvement policies and practices to 
determine if the policies and practices meet the requirements of this 
section.

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

    ``(a) Teacher Qualifications and Measurable Objectives.--
        ``(1) In general.--Beginning with the first day of the first 
    school year after the date of enactment of the No Child Left Behind 
    Act of 2001, each local educational agency receiving assistance 
    under this part shall ensure that all teachers hired after such day 
    and teaching in a program supported with funds under this part are 
    highly qualified.
        ``(2) State plan.--As part of the plan described in section 
    1111, each State educational agency receiving assistance under this 
    part shall develop a plan to ensure that all teachers teaching in 
    core academic subjects within the State are highly qualified not 
    later than the end of the 2005-2006 school year. Such plan shall 
    establish annual measurable objectives for each local educational 
    agency and school that, at a minimum--
            ``(A) shall include an annual increase in the percentage of 
        highly qualified teachers at each local educational agency and 
        school, to ensure that all teachers teaching in core academic 
        subjects in each public elementary school and secondary school 
        are highly qualified not later than the end of the 2005-2006 
        school year;
            ``(B) shall include an annual increase in the percentage of 
        teachers who are receiving high-quality professional 
        development to enable such teachers to become highly qualified 
        and successful classroom teachers; and
            ``(C) may include such other measures as the State 
        educational agency determines to be appropriate to increase 
        teacher qualifications.
        ``(3) Local plan.--As part of the plan described in section 
    1112, each local educational agency receiving assistance under this 
    part shall develop a plan to ensure that all teachers teaching 
    within the school district served by the local educational agency 
    are highly qualified not later than the end of the 2005-2006 school 
    year.
    ``(b) Reports.--
        ``(1) Annual state and local reports.--
            ``(A) Local reports.--Each State educational agency 
        described in subsection (a)(2) shall require each local 
        educational agency receiving funds under this part to publicly 
        report, each year, beginning with the 2002-2003 school year, 
        the annual progress of the local educational agency as a whole 
        and of each of the schools served by the agency, in meeting the 
        measurable objectives described in subsection (a)(2).
            ``(B) State reports.--Each State educational agency 
        receiving assistance under this part shall prepare and submit 
        each year, beginning with the 2002-2003 school year, a report 
        to the Secretary, describing the State educational agency's 
        progress in meeting the measurable objectives described in 
        subsection (a)(2).
            ``(C) Information from other reports.--A State educational 
        agency or local educational agency may submit information from 
        the reports described in section 1111(h) for the purposes of 
        this subsection, if such report is modified, as may be 
        necessary, to contain the information required by this 
        subsection, and may submit such information as a part of the 
        reports required under section 1111(h).
        ``(2) Annual reports by the secretary.--Each year, beginning 
    with the 2002-2003 school year, the Secretary shall publicly report 
    the annual progress of State educational agencies, local 
    educational agencies, and schools, in meeting the measurable 
    objectives described in subsection (a)(2).
    ``(c) New Paraprofessionals.--
        ``(1) In general.--Each local educational agency receiving 
    assistance under this part shall ensure that all paraprofessionals 
    hired after the date of enactment of the No Child Left Behind Act 
    of 2001 and working in a program supported with funds under this 
    part shall have--
            ``(A) completed at least 2 years of study at an institution 
        of higher education;
            ``(B) obtained an associate's (or higher) degree; or
            ``(C) met a rigorous standard of quality and can 
        demonstrate, through a formal State or local academic 
        assessment--
                ``(i) knowledge of, and the ability to assist in 
            instructing, reading, writing, and mathematics; or
                ``(ii) knowledge of, and the ability to assist in 
            instructing, reading readiness, writing readiness, and 
            mathematics readiness, as appropriate.
        ``(2) Clarification.--The receipt of a secondary school diploma 
    (or its recognized equivalent) shall be necessary but not 
    sufficient to satisfy the requirements of paragraph (1)(C).
    ``(d) Existing Paraprofessionals.--Each local educational agency 
receiving assistance under this part shall ensure that all 
paraprofessionals hired before the date of enactment of the No Child 
Left Behind Act of 2001, and working in a program supported with funds 
under this part shall, not later than 4 years after the date of 
enactment satisfy the requirements of subsection (c).
    ``(e) Exceptions for Translation and Parental Involvement 
Activities.--Subsections (c) and (d) 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.
    ``(f) 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 paraprofessionals' hiring date, have 
earned a secondary school diploma or its recognized equivalent.
    ``(g) 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 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 in 
        accordance with paragraph (3).
        ``(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 teacher consistent with section 1119; and
            ``(B) may assume limited duties that are assigned to 
        similar personnel who are not working in a program supported 
        with funds under this part, including duties beyond classroom 
        instruction or that do not benefit participating children, so 
        long as the amount of time spent on such duties is the same 
        proportion of total work time as prevails with respect to 
        similar personnel at the same school.
    ``(h) Use of Funds.--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.
    ``(i) 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 attest annually 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 on request.
    ``(j) Combinations of Funds.--Funds provided under this part that 
are used for professional development purposes may be combined with 
funds provided under title II of this Act, other Acts, and other 
sources.
    ``(k) Special Rule.--Except as provided in subsection (l), 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(c)(3).
    ``(l) Minimum Expenditures.--Each local educational agency that 
receives funds under this part shall use not less than 5 percent, or 
more than 10 percent, of such funds for each of fiscal years 2002 and 
2003, and not less than 5 percent of the funds for each subsequent 
fiscal year, for professional development activities to ensure that 
teachers who are not highly qualified become highly qualified not later 
than the end of the 2005-2006 school year.

``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 the school 
    district served by a local educational agency who are enrolled in 
    private elementary schools 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 
    the children participate, on an equitable basis, in services and 
    activities developed pursuant to sections 1118 and 1119.
        ``(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 may 
    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 
        proportion of funds that is allocated under subsection (a)(4) 
        for such services;
            ``(F) the method or sources of data that are used under 
        subsection (c) and section 1113(c)(1) to determine the number 
        of children from low-income families in participating school 
        attendance areas who attend private schools;
            ``(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 services through a contract with 
        potential third-party providers; and
            ``(H) how, if the agency disagrees with the views of the 
        private school officials on the provision of services through a 
        contract, the local educational agency will 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 the agency's records and provide to the State 
    educational agency involved a written affirmation signed by 
    officials of each participating private school that the 
    consultation required by this section has occurred. If such 
    officials do not provide such affirmation within a reasonable 
    period of time, the local educational agency shall forward the 
    documentation that such consultation has taken place to the State 
    educational agency.
        ``(5) Compliance.--
            ``(A) In general.--A private school official shall have the 
        right to complain to the State educational agency that the 
        local educational agency did not engage in consultation that 
        was meaningful and timely, or did not give due consideration to 
        the views of the private school official.
            ``(B) Procedure.--If the private school official wishes to 
        complain, the official shall provide the basis of the 
        noncompliance with this section by the local educational agency 
        to the State educational agency, and the local educational 
        agency shall forward the appropriate documentation to the State 
        educational agency.
    ``(c) Allocation for Equitable Service to Private School 
Students.--
        ``(1) Calculation.--A local educational agency shall have the 
    final authority, consistent with this section, to calculate the 
    number of children, ages 5 through 17, who are from low-income 
    families and attend private schools by--
            ``(A) using the same measure of low income used to count 
        public school children;
            ``(B) using the results of a survey that, to the extent 
        possible, protects the identity of families of private school 
        students, and allowing such survey results to be extrapolated 
        if complete actual data are unavailable;
            ``(C) applying the low-income percentage of each 
        participating public school attendance area, determined 
        pursuant to this section, to the number of private school 
        children who reside in that school attendance area; or
            ``(D) using an equated measure of low income correlated 
        with the measure of low income used to count public school 
        children.
        ``(2) Complaint process.--Any dispute regarding low-income data 
    for private school students shall be subject to the complaint 
    process authorized in section 9505.
    ``(d) 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, materials, equipment, and property.
        ``(2) Provision of services.--
            ``(A) Provider.--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) Requirement.--In the provision of such services, such 
        employee, individual, 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.
    ``(e) Standards for a Bypass.--If a local educational agency is 
prohibited by law from providing for the participation in programs on 
an equitable basis of eligible children enrolled in private elementary 
schools 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 9503 and 9504; and
        ``(3) in making the determination under this subsection, 
    consider one or more factors, including the quality, size, scope, 
    and location of the program and the opportunity of eligible 
    children to participate.

``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 involved finds that the local educational agency has 
maintained the agency's fiscal effort in accordance with section 9521.
    ``(b) Federal Funds To Supplement, Not Supplant, Non-Federal 
Funds.--
        ``(1) In general.--A State educational agency or local 
    educational agency shall use Federal funds received under this part 
    only to supplement the 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) Comparable services.--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) Substantially comparable services.--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) Basis.--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) Equivalence.--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) Determinations.--For the purpose of this subsection, 
        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) Exclusions.--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) language instruction educational programs; and
            ``(B) the 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 educational agency 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 
entities carrying out early childhood development programs such as the 
Early Reading First program.
    ``(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 entities 
carrying out early childhood development programs, such as the Early 
Reading First program, serving children who will attend the schools of 
the local educational 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, 
    another early childhood development program such as the Early 
    Reading First program;
        ``(2) establishing channels of communication between school 
    staff and their counterparts (including teachers, social workers, 
    and health staff) in such Head Start agencies or other entities 
    carrying out early childhood development programs such as the Early 
    Reading First program, 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 the Early Reading First program, to discuss the 
    developmental and other needs of individual children;
        ``(4) organizing and participating in joint transition-related 
    training of school staff, Head Start program staff, Early Reading 
    First program staff, and, where appropriate, other early childhood 
    development program staff; and
        ``(5) linking the educational services provided by such local 
    educational agency with the services provided by local Head Start 
    agencies and entities carrying out 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) and 
1125A(f), 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 local educational agencies in the outlying areas.
        ``(2) Competitive grants.--Until each appropriate outlying area 
    enters into an agreement for extension of United States educational 
    assistance under the Compact of Free Association after the date of 
    enactment of the No Child Left Behind Act of 2001, the Secretary 
    shall carry out the competition described in paragraph (3), except 
    that the amount reserved to carry out such competition shall not 
    exceed $5,000,000.
        ``(3) Limitation for competitive grants.--
            ``(A) Competitive grants.--The Secretary shall use funds 
        described in paragraph (2) to award grants 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, taking into 
        consideration the recommendations of the Pacific Region 
        Educational Laboratory in Honolulu, Hawaii.
            ``(C) Uses.--Except as provided in subparagraph (D), grant 
        funds awarded under this paragraph may be used only--
                ``(i) for programs described in this Act, including 
            teacher training, curriculum development, instructional 
            materials, or general school improvement and reform; and
                ``(ii) to provide direct educational services that 
            assist all students with meeting challenging State academic 
            content standards.
            ``(D) 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 purpose 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 
        schools and secondary schools for Indian children operated or 
        supported by the Department of the Interior; and
            ``(B) out-of-State Indian children in elementary schools 
        and secondary schools in local educational agencies under 
        special contracts with the Department of the Interior.
        ``(2) Payments.--From the amount allotted for payments to the 
    Secretary of the Interior under subsection (a)(2), the Secretary of 
    the Interior shall make payments to local educational agencies, on 
    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. ALLOCATIONS TO STATES.

    ``(a) Allocation Formula.--Of the amount appropriated under section 
1002(a) to carry out this part for each of fiscal years 2002-2007 
(referred to in this subsection as the current fiscal year)--
        ``(1) an amount equal to the amount made available to carry out 
    section 1124 for fiscal year 2001 shall be allocated in accordance 
    with section 1124;
        ``(2) an amount equal to the amount made available 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 made available to carry out sections 1124, 1124A, 
    and 1125 for the current fiscal year for which the determination is 
    made exceeds the amount available to carry out sections 1124 and 
    1124A 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 subpart 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, 1124a, and 1125.--For each 
    fiscal year, the amount made available to each local educational 
    agency under each of sections 1124, 1124A, and 1125 shall be--
            ``(A) not less than 95 percent of the amount made available 
        for 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 
        for 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 
        for the preceding fiscal year if the percentage described in 
        subparagraph (A) is below 15 percent.
        ``(2) Payments.--If sufficient funds are appropriated, the 
    amounts described in paragraph (1) 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 described 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 (1).
        ``(3) Applicability.--Notwithstanding any other provision of 
    law, the Secretary shall not take into consideration the hold-
    harmless provisions of this subsection for any fiscal year for 
    purposes of calculating State or local allocations for the fiscal 
    year under any program administered by the Secretary other than a 
    program authorized under this part.
        ``(4) Population data.--For 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 
    subpart for any fiscal year are insufficient to pay the full 
    amounts that local educational agencies in 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, 1125, and 1125A, 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 to which this paragraph 
            applies, the Secretary shall calculate grants under this 
            section for each local educational agency.
                ``(ii) The amount of a grant under this section for 
            each large local educational agency shall be the amount 
            determined under clause (i).
                ``(iii) For small local educational agencies, the State 
            educational agency may either--

                    ``(I) distribute grants under this section in 
                amounts determined by the Secretary under clause (i); 
                or
                    ``(II) use an alternative method 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 subsection (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 subpart for a particular fiscal 
        year directly to local educational agencies without regard to 
        counties.
            ``(C) Allocations to local educational agencies.--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 subpart; 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 will 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 that 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) subject to subparagraph (B), the percentage that 
            the average per-pupil expenditure in the Commonwealth of 
            Puerto Rico is of the lowest average per-pupil expenditure 
            of any of the 50 States; and
                ``(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;
                ``(iv) for fiscal year 2005, 85.0 percent;
                ``(v) for fiscal year 2006, 92.5 percent; and
                ``(vi) for fiscal year 2007 and succeeding fiscal 
            years, 100.0 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 subpart than it received 
        under this subpart for the preceding fiscal year, the 
        percentage in subparagraph (A) shall be the greater of--
                ``(i) the percentage in subparagraph (A)(i);
                ``(ii) the percentage specified in subparagraph (B) for 
            the preceding fiscal year; or
                ``(iii) the percentage used for the preceding fiscal 
            year.
    ``(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.--
            ``(A) In general.--In fiscal year 2002 and each subsequent 
        fiscal year, the Secretary shall use updated data on the number 
        of children, aged 5 to 17, inclusive, from families below the 
        poverty level for counties or local educational agencies, 
        published by the Department of Commerce, unless the Secretary 
        and the Secretary of Commerce determine that the use of the 
        updated population data would be inappropriate or unreliable. 
        If appropriate and reliable data are not available annually, 
        the Secretary shall use data which are updated every 2 years.
            ``(B) Inappropriate or unreliable data.--If the Secretary 
        and the Secretary of Commerce determine that some or all of the 
        data referred to in subparagraph (A) are inappropriate or 
        unreliable, the Secretary and the Secretary of Commerce shall 
        publicly disclose their reasons.
            ``(C) Criteria of poverty.--In determining the families 
        that are below the poverty level, the Secretary shall use the 
        criteria of poverty used by the Bureau of the Census in 
        compiling the most recent decennial census, as the criteria 
        have been updated by increases in the Consumer Price Index for 
        All Urban Consumers, published by the Bureau of Labor 
        Statistics.
        ``(4) Other children to be counted.--
            ``(A) For the purpose 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 use the criteria of poverty used by the Bureau of the 
        Census in compiling the most recent decennial census for a 
        family of four 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.
            ``(B) 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.
            ``(C) Except for the data on children living in 
        institutions for neglected or delinquent children, 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.
            ``(D) For the purpose of this section, the Secretary shall 
        consider all children who are in correctional institutions to 
        be living in institutions for delinquent children.
        ``(5) Estimate.--When requested by the Secretary, the Secretary 
    of Commerce shall make a special updated estimate of the number of 
    children of such ages who are from families below the poverty level 
    (as determined under paragraph (1)(A)) in each school district, and 
    the Secretary is authorized to pay (either in advance or by way of 
    reimbursement) the Secretary of Commerce the cost of making this 
    special estimate. The Secretary of Commerce shall give 
    consideration to any request of the chief executive of a State for 
    the collection of additional census information.
    ``(d) State Minimum.--Notwithstanding section 1122, the aggregate 
amount allotted for all local educational agencies within a State may 
not be less than the lesser of--
        ``(1) 0.25 percent of the total amount allocated to States 
    under this section for fiscal year 2001, plus 0.35 percent of the 
    total amount allocated to States under this section in excess of 
    the amount allocated for fiscal year 2001; or
        ``(2) the average of--
            ``(A) the amount calculated in paragraph (1), above; 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 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 shall receive less 
    than the lesser of--
            ``(i) 0.25 percent of the total amount allocated to States 
        under this section for fiscal year 2001, plus 0.35 percent of 
        the total amount allocated to States under this section in 
        excess of the amount allocated for fiscal year 2001; or
            ``(ii) the average of--
                ``(I) the amount calculated under clause (i); 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) Determination.--For each county or local educational 
    agency eligible to receive an additional grant under this section 
    for any fiscal year, the Secretary shall determine the product of--
            ``(A) the number of children counted under section 1124(c) 
        for that fiscal year; and
            ``(B) the amount in section 1124(a)(1)(B) for each State 
        except the Commonwealth of Puerto Rico, and the amount in 
        section 1124(a)(4) for the Commonwealth of Puerto Rico.
        ``(3) Amount.--The amount of the additional grant for which an 
    eligible local educational agency or county is eligible under this 
    section for any fiscal year shall be an amount 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), (3), and 
    (4).
        ``(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) Small States.--In any State for which on the date of 
enactment of the No Child Left Behind Act of 2001 the number of 
children counted under section 1124(c) is less than 0.25 percent of the 
number of those children counted for all States, the State educational 
agency shall allocate funds under this section among the local 
educational agencies in the 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.--
        ``(1) In general.--A local educational agency in a State is 
    eligible to receive a targeted grant under this section for any 
    fiscal year if--
            ``(A) the number of children in the local educational 
        agency counted under section 1124(c), before application of the 
        weighted child count described in subsection (c), is at least 
        10; and
            ``(B) if the number of children counted for grants under 
        section 1124(c), before application of the weighted child count 
        described in subsection (c), is at least 5 percent of the total 
        number of children aged 5 to 17 years, inclusive, in the school 
        district of the local educational agency.
        ``(2) Special rule.--For any fiscal year for which the 
    Secretary allocates funds under this section on the basis of 
    counties, funds made available as a result of applying this 
    subsection shall be reallocated by the State educational agency to 
    other eligible local educational agencies in the State in 
    proportion to the distribution of other funds under this section.
    ``(b) Grants for Local Educational Agencies, the District of 
Columbia, and the Commonwealth of Puerto Rico.--
        ``(1) In general.--The amount of the grant that a local 
    educational agency in a State (other than the Commonwealth of 
    Puerto Rico) is eligible to receive under this section for any 
    fiscal year shall be the product of--
            ``(A) the weighted child count determined under subsection 
        (c); and
            ``(B) the amount determined under section 1124(a)(1)(B).
        ``(2) Puerto rico.--For each fiscal year, the amount of the 
    grant the Commonwealth of Puerto Rico is eligible to receive under 
    this section shall be equal to the number of children counted under 
    subsection (c) for the Commonwealth of Puerto Rico, multiplied by 
    the amount determined in section 1124(a)(4) for the Commonwealth of 
    Puerto Rico.
    ``(c) Weighted Child Count.--
        ``(1) Weights for allocations to counties.--
            ``(A) In general.--For each fiscal year for which the 
        Secretary uses county population data to calculate grants, the 
        weighted child count used to determine a county's allocation 
        under this section is the larger of the two amounts determined 
        under subparagraphs (B) and (C).
            ``(B) By percentage of children.--The amount referred to in 
        subparagraph (A) is determined by adding--
                ``(i) the number of children determined under section 
            1124(c) for that county who constitute not more than 15.00 
            percent, inclusive, of the county's total population aged 5 
            to 17, inclusive, multiplied by 1.0;
                ``(ii) the number of such children who constitute more 
            than 15.00 percent, but not more than 19.00 percent, of 
            such population, multiplied by 1.75;
                ``(iii) the number of such children who constitute more 
            than 19.00 percent, but not more than 24.20 percent, of 
            such population, multiplied by 2.5;
                ``(iv) the number of such children who constitute more 
            than 24.20 percent, but not more than 29.20 percent, of 
            such population, multiplied by 3.25; and
                ``(v) the number of such children who constitute more 
            than 29.20 percent of such population, multiplied by 4.0.
            ``(C) By number of children.--The amount referred to in 
        subparagraph (A) is determined by adding--
                ``(i) the number of children determined under section 
            1124(c) who constitute not more than 2,311, inclusive, of 
            the county's total population aged 5 to 17, inclusive, 
            multiplied by 1.0;
                ``(ii) the number of such children between 2,312 and 
            7,913, inclusive, in such population, multiplied by 1.5;
                ``(iii) the number of such children between 7,914 and 
            23,917, inclusive, in such population, multiplied by 2.0;
                ``(iv) the number of such children between 23,918 and 
            93,810, inclusive, in such population, multiplied by 2.5; 
            and
                ``(v) the number of such children in excess of 93,811 
            in such population, multiplied by 3.0.
            ``(D) Puerto rico.--Notwithstanding subparagraph (A), the 
        weighting factor for the Commonwealth of Puerto Rico under this 
        paragraph shall not be greater than the total number of 
        children counted under section 1124(c) multiplied by 1.82.
        ``(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 two amounts 
        determined under subparagraphs (B) and (C).
            ``(B) By percentage of children.--The amount referred to in 
        subparagraph (A) is determined by adding--
                ``(i) the number of children determined under section 
            1124(c) for that local educational agency who constitute 
            not more than 15.58 percent, inclusive, of the agency's 
            total population aged 5 to 17, inclusive, multiplied by 
            1.0;
                ``(ii) the number of such children who constitute more 
            than 15.58 percent, but not more than 22.11 percent, of 
            such population, multiplied by 1.75;
                ``(iii) the number of such children who constitute more 
            than 22.11 percent, but not more than 30.16 percent, of 
            such population, multiplied by 2.5;
                ``(iv) the number of such children who constitute more 
            than 30.16 percent, but not more than 38.24 percent, of 
            such population, multiplied by 3.25; and
                ``(v) the number of such children who constitute more 
            than 38.24 percent of such population, multiplied by 4.0.
            ``(C) By number of children.--The amount referred to in 
        subparagraph (A) is determined by adding--
                ``(i) the number of children determined under section 
            1124(c) who constitute not more than 691, inclusive, of the 
            agency's total population aged 5 to 17, inclusive, 
            multiplied by 1.0;
                ``(ii) the number of such children between 692 and 
            2,262, inclusive, in such population, multiplied by 1.5;
                ``(iii) the number of such children between 2,263 and 
            7,851, inclusive, in such population, multiplied by 2.0;
                ``(iv) the number of such children between 7,852 and 
            35,514, inclusive, in such population, multiplied by 2.5; 
            and
                ``(v) the number of such children in excess of 35,514 
            in such population, multiplied by 3.0.
            ``(D) Puerto rico.--Notwithstanding subparagraph (A), the 
        weighting factor for the Commonwealth of Puerto Rico under this 
        paragraph shall not be greater than the total number of 
        children counted under section 1124(c) multiplied by 1.82.
    ``(d) Calculation of Grant Amounts.--Grant amounts under this 
section shall be calculated in the same manner as grant amounts are 
calculated under section 1124(a)(2) and (3).
    ``(e) State Minimum.--Notwithstanding any other provision of this 
section or section 1122, from the total amount available for any fiscal 
year to carry out this section, each State shall be allotted at least 
the lesser of--
        ``(1) 0.35 percent of the total amount available to carry out 
    this section; or
        ``(2) the average of--
            ``(A) 0.35 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. 1125AA. ADEQUACY OF FUNDING OF TARGETED GRANTS TO LOCAL 
              EDUCATIONAL AGENCIES IN FISCAL YEARS AFTER FISCAL YEAR 
              2001.

    ``(a) Findings.--Congress makes the following findings:
        ``(1) The current Basic Grant Formula for the distribution of 
    funds under this part often does not provide funds for the 
    economically disadvantaged students for which such funds are 
    targeted.
        ``(2) Any school district in which more than 2 percent of the 
    students live below the poverty level qualifies for funding under 
    the Basic Grant Formula. As a result, 9 out of every 10 school 
    districts in the country receive some form of aid under the 
    Formula.
        ``(3) Fifty-eight percent of all schools receive at least some 
    funding under this part, including many suburban schools with 
    predominantly well-off students.
        ``(4) One out of every 5 schools with concentrations of poor 
    students between 50 and 75 percent receive no funding at all under 
    this part.
        ``(5) In passing the Improving America's Schools Act in 1994, 
    Congress declared that grants under this part would more sharply 
    target high poverty schools by using the Targeted Grant Formula, 
    but annual appropriation Acts have prevented the use of that 
    Formula.
        ``(6) The advantage of the Targeted Grant Formula over other 
    funding formulas under this part is that the Targeted Grant Formula 
    provides increased grants per poor child as the percentage of 
    economically disadvantaged children in a school district increases.
        ``(7) Studies have found that the poverty of a child's family 
    is much more likely to be associated with educational disadvantage 
    if the family lives in an area with large concentrations of poor 
    families.
        ``(8) States with large populations of high poverty students 
    would receive significantly more funding if more funds under this 
    part were allocated through the Targeted Grant Formula.
        ``(9) Congress has an obligation to allocate funds under this 
    part so that such funds will positively affect the largest number 
    of economically disadvantaged students.
    ``(b) Limitation on Allocation of Title I Funds Contingent on 
Adequate Funding of Targeted Grants.--Pursuant to section 1122, the 
total amount allocated in any fiscal year after fiscal year 2001 for 
programs and activities under this part shall not exceed the amount 
allocated in fiscal year 2001 for such programs and activities unless 
the amount available for targeted grants to local educational agencies 
under section 1125 in the applicable fiscal year meets the requirements 
of section 1122(a).

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

    ``(a) Grants.--From funds appropriated under subsection (f) the 
Secretary is authorized to make grants to States, from allotments under 
subsection (b), to carry out the programs and activities of this part.
    ``(b) Distribution Based Upon Fiscal Effort and Equity.--
        ``(1) In general.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        funds appropriated pursuant to subsection (f) shall be allotted 
        to each State based upon the number of children counted under 
        section 1124(c) in such State multiplied by the product of--
                ``(i) the amount in section 1124(a)(1)(B) for all 
            States other than the Commonwealth of Puerto Rico, except 
            that the amount determined under that subparagraph shall 
            not be less that 34 percent or more than 46 percent of the 
            average per pupil expenditure in the United States, and the 
            amount in section 1124(a)(4) for the Commonwealth of Puerto 
            Rico, except that the amount in section 1124(a)(4)(A)(ii) 
            shall be 34 percent of the average per pupil expenditure in 
            the United States; multiplied by
                ``(ii) such State's effort factor described in 
            paragraph (2); multiplied by
                ``(iii) 1.30 minus such State's equity factor described 
            in paragraph (3).
            ``(B) 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--
                ``(i) 0.35 percent of total appropriations; or
                ``(ii) the average of--

                    ``(I) 0.35 percent of the total amount available to 
                carry out this section; and
                    ``(II) 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.

        ``(2) Effort factor.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the effort factor for a State shall be determined in accordance 
        with the succeeding sentence, except that such factor shall not 
        be less than 0.95 nor greater than 1.05. The effort factor 
        determined under this sentence shall be a fraction the 
        numerator of which is the product of the 3-year average per-
        pupil expenditure in the State multiplied by the 3-year average 
        per capita income in the United States and the denominator of 
        which is the product of the 3-year average per capita income in 
        such State multiplied by the 3-year average per-pupil 
        expenditure in the United States.
            ``(B) Commonwealth of puerto rico.--The effort factor for 
        the Commonwealth of Puerto Rico shall be equal to the lowest 
        effort factor calculated under subparagraph (A) for any State.
        ``(3) Equity factor.--
            ``(A) Determination.--
                ``(i) In general.--Except as provided in subparagraph 
            (B), the Secretary shall determine the equity factor under 
            this section for each State in accordance with clause (ii).
                ``(ii) Computation.--

                    ``(I) In general.--For each State, the Secretary 
                shall compute a weighted coefficient of variation for 
                the per-pupil expenditures of local educational 
                agencies in accordance with subclauses (II), (III), and 
                (IV).
                    ``(II) Variation.--In computing coefficients of 
                variation, the Secretary shall weigh the variation 
                between per-pupil expenditures in each local 
                educational agency and the average per-pupil 
                expenditures in the State according to the number of 
                pupils served by the local educational agency.
                    ``(III) Number of pupils.--In determining the 
                number of pupils under this paragraph served by each 
                local educational agency and in each State, the 
                Secretary shall multiply the number of children counted 
                under section 1124(c) by a factor of 1.4.
                    ``(IV) Enrollment requirement.--In computing 
                coefficients of variation, the Secretary shall include 
                only those local educational agencies with an 
                enrollment of more than 200 students.

            ``(B) Special rule.--The equity factor for a State that 
        meets the disparity standard described in section 222.162 of 
        title 34, Code of Federal Regulations (as such section was in 
        effect on the day preceding the date of enactment of the No 
        Child Left Behind Act of 2001) or a State with only one local 
        educational agency shall be not greater than 0.10.
    ``(c) Use of Funds; Eligibility of Local Educational Agencies.--All 
funds awarded to each State under this section shall be allocated to 
local educational agencies under the following provisions. Within local 
educational agencies, funds allocated under this section shall be 
distributed to schools on a basis consistent with section 1113, and may 
only be used to carry out activities under this part. A local 
educational agency in a State is eligible to receive a targeted grant 
under this section for any fiscal year if--
        ``(A) the number of children in the local educational agency 
    counted under section 1124(c), before application of the weighted 
    child count described in paragraph (3), is at least 10; and
        ``(B) if the number of children counted for grants under 
    section 1124(c), before application of the weighted child count 
    described in paragraph (3), is at least 5 percent of the total 
    number of children aged 5 to 17 years, inclusive, in the school 
    district of the local educational agency.
    ``For any fiscal year for which the Secretary allocates funds under 
this section on the basis of counties, funds made available as a result 
of applying this subsection shall be reallocated by the State 
educational agency to other eligible local educational agencies in the 
State in proportion to the distribution of other funds under this 
section.
    ``(d) Allocation of Funds to Eligible Local Educational Agencies.--
Funds received by States under this section shall be allocated within 
States to eligible local educational agencies on the basis of weighted 
child counts calculated in accordance with paragraph (1), (2), or (3), 
as appropriate for each State.
        ``(1) States with an equity factor less than .10.--In States 
    with an equity factor less than .10, the weighted child counts 
    referred to in subsection (d) shall be calculated as follows:
            ``(A) Weights for allocations to counties.--
                ``(i) 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 two 
            amounts determined under clauses (ii) and (iii).
                ``(ii) By percentage of children.--The amount referred 
            to in clause ``(i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) for that county who constitute not more 
                than 15.00 percent, inclusive, of the county's total 
                population aged 5 to 17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children who constitute 
                more than 15.00 percent, but not more than 19.00 
                percent, of such population, multiplied by 1.75;
                    ``(III) the number of such children who constitute 
                more than 19.00 percent, but not more than 24.20 
                percent, of such population, multiplied by 2.5;
                    ``(IV) the number of such children who constitute 
                more than 24.20 percent, but not more than 29.20 
                percent, of such population, multiplied by 3.25; and
                    ``(V) the number of such children who constitute 
                more than 29.20 percent of such population, multiplied 
                by 4.0.

                ``(iii) By number of children.--The amount referred to 
            in clause (i) is determined by adding

                    ``(I) the number of children determined under 
                section 1124(c) who constitute not more than 2,311, 
                inclusive, of the county's total population aged 5 to 
                17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children between 2,312 
                and 7,913, inclusive, in such population, multiplied by 
                1.5;
                    ``(III) the number of such children between 7,914 
                and 23,917, inclusive, in such population, multiplied 
                by 2.0;
                    ``(IV) the number of such children between 23,918 
                and 93,810, inclusive, in such population, multiplied 
                by 2.5; and
                    ``(V) the number of such children in excess of 
                93,811 in such population, multiplied by 3.0.

            ``(B) Weights for allocations to local educational 
        agencies.--
                ``(i) 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 two amounts 
            determined under clauses (ii) and (iii).
                ``(ii) By percentage of children.--The amount referred 
            to in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) for that local educational agency who 
                constitute not more than 15.58 percent, inclusive, of 
                the agency's total population aged 5 to 17, inclusive, 
                multiplied by 1.0;
                    ``(II) the number of such children who constitute 
                more than 15.58 percent, but not more than 22.11 
                percent, of such population, multiplied by 1.75;
                    ``(III) the number of such children who constitute 
                more than 22.11 percent, but not more than 30.16 
                percent, of such population, multiplied by 2.5;
                    ``(IV) the number of such children who constitute 
                more than 30.16 percent, but not more than 38.24 
                percent, of such population, multiplied by 3.25; and
                    ``(V) the number of such children who constitute 
                more than 38.24 percent of such population, multiplied 
                by 4.0.

                ``(iii) By number of children.--The amount referred to 
            in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) who constitute not more than 691, 
                inclusive, of the agency's total population aged 5 to 
                17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children between 692 and 
                2,262, inclusive, in such population, multiplied by 
                1.5;
                    ``(III) the number of such children between 2,263 
                and 7,851, inclusive, in such population, multiplied by 
                2.0;
                    ``(IV) the number of such children between 7,852 
                and 35,514, inclusive, in such population, multiplied 
                by 2.5; and
                    ``(V) the number of such children in excess of 
                35,514 in such population, multiplied by 3.0.

        ``(2) States with an equity factor greater than or equal to .10 
    and less than .20.--In States with an equity factor greater than or 
    equal to .10 and less than .20, the weighted child counts referred 
    to in subsection (d) shall be calculated as follows:
            ``(A) Weights for allocations to counties.--
                ``(i) 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 two 
            amounts determined under clauses (ii) and (iii).
                ``(ii) By percentage of children.--The amount referred 
            to in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) for that county who constitute not more 
                than 15.00 percent, inclusive, of the county's total 
                population aged 5 to 17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children who constitute 
                more than 15.00 percent, but not more than 19.00 
                percent, of such population, multiplied by 1.5;
                    ``(III) the number of such children who constitute 
                more than 19.00 percent, but not more than 24.20 
                percent, of such population, multiplied by 3.0;
                    ``(IV) the number of such children who constitute 
                more than 24.20 percent, but not more than 29.20 
                percent, of such population, multiplied by 4.5; and
                    ``(V) the number of such children who constitute 
                more than 29.20 percent of such population, multiplied 
                by 6.0.

                ``(iii) By number of children.--The amount referred to 
            in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) who constitute not more than 2,311, 
                inclusive, of the county's total population aged 5 to 
                17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children between 2,312 
                and 7,913, inclusive, in such population, multiplied by 
                1.5;
                    ``(III) the number of such children between 7,914 
                and 23,917, inclusive, in such population, multiplied 
                by 2.25;
                    ``(IV) the number of such children between 23,918 
                and 93,810, inclusive, in such population, multiplied 
                by 3.375; and
                    ``(V) the number of such children in excess of 
                93,811 in such population, multiplied by 4.5.

            ``(B) Weights for allocations to local educational 
        agencies.--
                ``(i) 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 two amounts 
            determined under clauses (ii) and (iii).
                ``(ii) By percentage of children.--The amount referred 
            to in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) for that local educational agency who 
                constitute not more than 15.58 percent, inclusive, of 
                the agency's total population aged 5 to 17, inclusive, 
                multiplied by 1.0;
                    ``(II) the number of such children who constitute 
                more than 15.58 percent, but not more than 22.11 
                percent, of such population, multiplied by 1.5;
                    ``(III) the number of such children who constitute 
                more than 22.11 percent, but not more than 30.16 
                percent, of such population, multiplied by 3.0;
                    ``(IV) the number of such children who constitute 
                more than 30.16 percent, but not more than 38.24 
                percent, of such population, multiplied by 4.5; and
                    ``(V) the number of such children who constitute 
                more than 38.24 percent of such population, multiplied 
                by 6.0.

                ``(iii) By number of children.--The amount referred to 
            in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) who constitute not more than 691, 
                inclusive, of the agency's total population aged 5 to 
                17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children between 692 and 
                2,262, inclusive, in such population, multiplied by 
                1.5;
                    ``(III) the number of such children between 2,263 
                and 7,851, inclusive, in such population, multiplied by 
                2.25;
                    ``(IV) the number of such children between 7,852 
                and 35,514, inclusive, in such population, multiplied 
                by 3.375; and
                    ``(V) the number of such children in excess of 
                35,514 in such population, multiplied by 4.5.

        ``(3) States with an equity factor greater than or equal to 
    .20.--In States with an equity factor greater than or equal to .20, 
    the weighted child counts referred to in subsection (d) shall be 
    calculated as follows:
            ``(A) Weights for allocations to counties.--
                ``(i) 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 two 
            amounts determined under clauses (ii) and (iii).
                ``(ii) By percentage of children.--The amount referred 
            to in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) for that county who constitute not more 
                than 15.00 percent, inclusive, of the county's total 
                population aged 5 to 17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children who constitute 
                more than 15.00 percent, but not more than 19.00 
                percent, of such population, multiplied by 2.0;
                    ``(III) the number of such children who constitute 
                more than 19.00 percent, but not more than 24.20 
                percent, of such population, multiplied by 4.0;
                    ``(IV) the number of such children who constitute 
                more than 24.20 percent, but not more than 29.20 
                percent, of such population, multiplied by 6.0; and
                    ``(V) the number of such children who constitute 
                more than 29.20 percent of such population, multiplied 
                by 8.0.

                ``(iii) By number of children.--The amount referred to 
            in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) who constitute not more than 2,311, 
                inclusive, of the county's total population aged 5 to 
                17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children between 2,312 
                and 7,913, inclusive, in such population, multiplied by 
                2.0;
                    ``(III) the number of such children between 7,914 
                and 23,917, inclusive, in such population, multiplied 
                by 3.0;
                    ``(IV) the number of such children between 23,918 
                and 93,810, inclusive, in such population, multiplied 
                by 4.5; and
                    ``(V) the number of such children in excess of 
                93,811 in such population, multiplied by 6.0.

            ``(B) Weights for allocations to local educational 
        agencies.--
                ``(i) 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 two amounts 
            determined under clauses (ii) and (iii).
                ``(ii) By percentage of children.--The amount referred 
            to in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) for that local educational agency who 
                constitute not more than 15.58 percent, inclusive, of 
                the agency's total population aged 5 to 17, inclusive, 
                multiplied by 1.0;
                    ``(II) the number of such children who constitute 
                more than 15.58 percent, but not more than 22.11 
                percent, of such population, multiplied by 2.0;
                    ``(III) the number of such children who constitute 
                more than 22.11 percent, but not more than 30.16 
                percent, of such population, multiplied by 4.0;
                    ``(IV) the number of such children who constitute 
                more than 30.16 percent, but not more than 38.24 
                percent, of such population, multiplied by 6.0; and
                    ``(V) the number of such children who constitute 
                more than 38.24 percent of such population, multiplied 
                by 8.0.

                ``(iii) By number of children.--The amount referred to 
            in clause (i) is determined by adding--

                    ``(I) the number of children determined under 
                section 1124(c) who constitute not more than 691, 
                inclusive, of the agency's total population aged 5 to 
                17, inclusive, multiplied by 1.0;
                    ``(II) the number of such children between 692 and 
                2,262, inclusive, in such population, multiplied by 
                2.0;
                    ``(III) the number of such children between 2,263 
                and 7,851, inclusive, in such population, multiplied by 
                3.0;
                    ``(IV) the number of such children between 7,852 
                and 35,514, inclusive, in such population, multiplied 
                by 4.5; and
                    ``(V) the number of such children in excess of 
                35,514 in such population, multiplied by 6.0.

    ``(e) Maintenance of Effort.--
        ``(1) In general.--Except as provided in paragraph (2), a State 
    is entitled to receive its full allotment of funds under this 
    section for any fiscal year if the Secretary finds that either the 
    combined fiscal effort per student or the aggregate expenditures 
    within the State with respect to the provision of free public 
    education for the fiscal year preceding the fiscal year for which 
    the determination is made was not less than 90 percent of such 
    combined fiscal effort or aggregate expenditures for the second 
    fiscal year preceding the fiscal year for which the determination 
    is made.
        ``(2) Reduction of funds.--The Secretary shall reduce the 
    amount of funds awarded to any State under this section in any 
    fiscal year in the exact proportion to which the State fails to 
    meet the requirements of paragraph (1) by falling below 90 percent 
    of both the fiscal effort per student and aggregate expenditures 
    (using the measure most favorable to the State), and no such lesser 
    amount shall be used for computing the effort required under 
    paragraph (1) for subsequent years.
        ``(3) Waivers.--The Secretary may waive, for 1 fiscal year 
    only, the requirements of this subsection if the Secretary 
    determines that such a waiver would be equitable due to exceptional 
    or uncontrollable circumstances such as a natural disaster or a 
    precipitous and unforeseen decline in the financial resources of 
    the State.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2002 and for each of the 5 succeeding fiscal years.
    ``(g) Adjustments Where Necessitated by Appropriations.--
        ``(1) In general.--If the sums available under this section for 
    any fiscal year are insufficient to pay the full amounts that all 
    local educational agencies in States are eligible to receive under 
    this section for such year, the Secretary shall ratably reduce the 
    allocations to such local educational agencies, subject to 
    paragraphs (2) and (3).
        ``(2) Additional funds.--If additional funds become available 
    for making payments under this section for such fiscal year, 
    allocations that were reduced under paragraph (1) shall be 
    increased on the same basis as they were reduced.
        ``(3) Hold-harmless amounts.--For each fiscal year, if 
    sufficient funds are available, the amount made available to each 
    local educational agency under this section shall be
            ``(A) not less than 95 percent of the amount made available 
        for 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 
        for 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 
        for the preceding fiscal year if the percentage described in 
        subparagraph (A) is below 15 percent.
        ``(4) Applicability.--Notwithstanding any other provision of 
    law, the Secretary shall not take into consideration the hold-
    harmless provisions of this subsection for any fiscal year for 
    purposes of calculating State or local allocations for the fiscal 
    year under any program administered by the Secretary other than a 
    program authorized under this part.

``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 
    section 1124(c)(1)(B), 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, 1125, and 1125A 
    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, 1125, and 1125A 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, 1125, and 1125A is more than such local 
educational agency will use, the State educational agency shall make 
the excess amount available to other local educational agencies in the 
State that need additional funds in accordance with criteria 
established by the State educational agency.

``SEC. 1127. CARRYOVER AND WAIVER.

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

          ``PART B--STUDENT READING SKILLS IMPROVEMENT GRANTS

                       ``Subpart 1--Reading First

``SEC. 1201. PURPOSES.

    ``The purposes of this subpart are as follows:
        ``(1) To provide assistance to State educational agencies and 
    local educational agencies in establishing reading programs for 
    students in kindergarten through grade 3 that are based on 
    scientifically based reading research, to ensure that every student 
    can read at grade level or above not later than the end of grade 3.
        ``(2) To provide assistance to State educational agencies 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 State educational agencies and 
    local educational agencies in selecting or administering screening, 
    diagnostic, and classroom-based instructional reading assessments.
        ``(4) To provide assistance to State educational agencies and 
    local educational agencies in selecting or developing effective 
    instructional materials (including classroom-based materials to 
    assist teachers in implementing the essential components of reading 
    instruction), programs, learning systems, and strategies to 
    implement methods that have been proven to prevent or remediate 
    reading failure within a State.
        ``(5) To strengthen coordination among schools, early literacy 
    programs, and family literacy programs to improve reading 
    achievement for all children.

``SEC. 1202. FORMULA GRANTS TO STATE EDUCATIONAL AGENCIES.

    ``(a) In General.--
        ``(1) Authorization to make grants.--In the case of each State 
    educational agency that in accordance with section 1203 submits to 
    the Secretary an application for a 6-year period, the Secretary, 
    from amounts appropriated under section 1002(b)(1) and subject to 
    the application's approval, shall make a grant to the State 
    educational agency 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 educational agency 
    under subsection (b).
        ``(2) Duration of grants.--Subject to subsection (e)(3), a 
    grant under this section shall be awarded for a period of not more 
    than 6 years.
    ``(b) Determination of Amount of Allotments.--
        ``(1) Reservations from appropriations.--From the total amount 
    made available to carry out this subpart for a fiscal year, the 
    Secretary--
            ``(A) shall reserve one-half of 1 percent for allotments 
        for the United States 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 one-half 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) may reserve not more than 2\1/2\ percent or 
        $25,000,000, whichever is less, to carry out section 1205 
        (relating to external evaluation) and section 1206 (relating to 
        national activities);
            ``(D) shall reserve $5,000,000 to carry out sections 1207 
        and 1224 (relating to information dissemination); and
            ``(E) for any fiscal year, beginning with fiscal year 2004, 
        for which the amount appropriated to carry out this subpart 
        exceeds the amount appropriated for fiscal year 2003, shall 
        reserve, to carry out section 1204, the lesser of--
                ``(i) $90,000,000; or
                ``(ii) 10 percent of such excess amount.
        ``(2) State allotments.--In accordance with paragraph (3), the 
    Secretary shall allot among each of the States the total amount 
    made available to carry out this subpart for any fiscal year and 
    not reserved under paragraph (1).
        ``(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 in proportion to the 
        number of children, aged 5 to 17, who reside within the State 
        and are from families with incomes below the poverty line 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) Minimum grant amount.--Subject to clause (ii), no 
            State receiving an allotment under subparagraph (A) may 
            receive less than one-fourth 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) Distribution of subgrants.--The Secretary may make a 
    grant to a State educational agency only if the State educational 
    agency 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 subsection (c), competitive subgrants to eligible 
    local educational agencies.
        ``(5) Reallotment.--If a State educational agency described in 
    paragraph (2) does not apply for an allotment under this section 
    for any fiscal year, or if the State educational agency's 
    application is not approved, the Secretary shall reallot such 
    amount to the remaining State educational agencies in accordance 
    with paragraph (3).
        ``(6) Definition of state.--For purposes of this subsection, 
    the term `State' means each of the 50 States, the District of 
    Columbia, and the Commonwealth of Puerto Rico.
    ``(c) Subgrants to Local Educational Agencies.--
        ``(1) Authorization to make subgrants.--In accordance with 
    paragraph (2), a State educational agency that receives a grant 
    under this section shall make competitive subgrants to eligible 
    local educational agencies.
        ``(2) Allocation.--
            ``(A) Minimum subgrant amount.--In making subgrants under 
        paragraph (1), a State educational agency shall allocate to 
        each eligible local educational agency that receives such a 
        subgrant, at a minimum, an amount that bears the same relation 
        to the funds made available under subsection (b)(4) as the 
        amount the eligible local educational agency received under 
        part A for the preceding fiscal year bears to the amount all 
        the local educational agencies in the State received under part 
        A for the preceding fiscal year.
            ``(B) Priority.--In making subgrants under paragraph (1), a 
        State educational agency shall give priority to eligible local 
        educational agencies in which at least--
                ``(i) 15 percent of the children served by the eligible 
            local educational agency are from families with incomes 
            below the poverty line; or
                ``(ii) 6,500 children served by the eligible local 
            educational agency are from families with incomes below the 
            poverty line.
        ``(3) Notice.--A State educational agency receiving a grant 
    under this section shall provide notice to all eligible local 
    educational agencies in the State of the availability of 
    competitive subgrants under this subsection and of the requirements 
    for applying for the subgrants.
        ``(4) Local application.--To be eligible to receive a subgrant 
    under this subsection, an eligible local educational agency shall 
    submit an application to the State educational agency at such time, 
    in such manner, and containing such information as the State 
    educational agency may reasonably require.
        ``(5) State requirement.--In distributing subgrant funds to 
    eligible local educational agencies under this subsection, a State 
    educational agency shall--
            ``(A) provide funds in sufficient size and scope to enable 
        the eligible local educational agencies to improve reading 
        instruction; and
            ``(B) provide the funds in amounts related to the number or 
        percentage of students in kindergarten through grade 3 who are 
        reading below grade level.
        ``(6) Limitation to certain schools.--In distributing subgrant 
    funds under this subsection, an eligible local educational agency 
    shall provide funds only to schools that both--
            ``(A) are among the schools served by that eligible local 
        educational agency with the highest percentages or numbers of 
        students in kindergarten through grade 3 reading below grade 
        level, based on the most currently available data; and
            ``(B)(i) are identified for school improvement under 
        section 1116(b); or
            ``(ii) have the highest percentages or numbers of children 
        counted under section 1124(c).
        ``(7) Local uses of funds.--
            ``(A) Required uses.--Subject to paragraph (8), an eligible 
        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 screening, 
            diagnostic, and classroom-based instructional reading 
            assessments.
                ``(ii) Selecting and implementing a learning system or 
            program of reading instruction based on scientifically 
            based reading research that--

                    ``(I) includes the essential components of reading 
                instruction; and
                    ``(II) provides such instruction to the children in 
                kindergarten through grade 3 in the schools served by 
                the eligible local educational agency, 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 that 
                    Act, have not been identified as being a child with 
                    a disability (as defined in section 602 of that 
                    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 that Act) related to reading;
                        ``(ee) are deficient in the essential 
                    components of reading skills, as listed in 
                    subparagraphs (A) through (E) of section 1208(3); 
                    or
                        ``(ff) are identified as having limited English 
                    proficiency.
                ``(iii) Procuring and implementing instructional 
            materials, including education technology such as software 
            and other digital curricula, that are based on 
            scientifically based reading research.
                ``(iv) Providing professional development for teachers 
            of kindergarten through grade 3, and special education 
            teachers of kindergarten through grade 12, that--

                    ``(I) will prepare these teachers in all of the 
                essential components of reading instruction;
                    ``(II) shall include--

                        ``(aa) information on instructional materials, 
                    programs, strategies, and approaches based on 
                    scientifically based reading research, including 
                    early intervention, classroom reading materials, 
                    and remedial programs and approaches; and
                        ``(bb) instruction in the use of screening, 
                    diagnostic, and classroom-based instructional 
                    reading assessments 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 highly 
                qualified in reading instruction in accordance with the 
                requirements of section 1119.

                ``(v) Collecting and summarizing data--

                    ``(I) to document the effectiveness of activities 
                carried out under this subpart in individual schools 
                and in the local educational agency as a whole; and
                    ``(II) to stimulate and accelerate improvement by 
                identifying the schools that produce significant gains 
                in reading achievement.

                ``(vi) Reporting data for all students and categories 
            of students described in section 1111(b)(2)(C)(v)(II).
                ``(vii) Promoting reading and library programs that 
            provide access to engaging reading material, including 
            coordination with programs funded through grants received 
            under subpart 4, where applicable.
            ``(B) Additional uses.--Subject to paragraph (8), an 
        eligible 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) Humanities-based family literacy programs (which 
            may be referred to as `Prime Time Family Reading Time') 
            that bond families around the acts of reading and using 
            public libraries.
                ``(ii) Providing training in the essential components 
            of reading instruction to a parent or other individual who 
            volunteers to be a student's reading tutor, to enable such 
            parent or individual to support instructional practices 
            that are based on scientifically based reading research and 
            are being used by the student's teacher.
                ``(iii) Assisting parents, through the use of materials 
            and reading programs, strategies, and approaches (including 
            family literacy services) that are based on scientifically 
            based reading research, to encourage reading and support 
            their child's reading development.
        ``(8) Local planning and administration.--An eligible local 
    educational agency that receives a subgrant under this subsection 
    may use not more than 3.5 percent of the funds provided under the 
    subgrant for planning and administration.
    ``(d) State Uses of Funds.--
        ``(1) In general.--A State educational agency that receives a 
    grant under this section may expend not more than a total of 20 
    percent of the grant funds to carry out the activities described in 
    paragraphs (3), (4), and (5).
        ``(2) Priority.--A State educational agency shall give priority 
    to carrying out the activities described in paragraphs (3), (4), 
    and (5) for schools described in subsection (c)(6).
        ``(3) Professional inservice and preservice development and 
    review.--A State educational agency may expend not more than 65 
    percent of the amount of the funds made available under paragraph 
    (1)--
            ``(A) to develop and implement a program of professional 
        development for teachers, including special education teachers, 
        of kindergarten through grade 3 that--
                ``(i) will prepare these teachers in all the essential 
            components of reading instruction;
                ``(ii) shall include--

                    ``(I) information on instructional materials, 
                programs, strategies, and approaches based on 
                scientifically based reading research, including early 
                intervention and reading remediation materials, 
                programs, and approaches; and
                    ``(II) instruction in the use of screening, 
                diagnostic, and classroom-based instructional reading 
                assessments and other scientifically based procedures 
                that effectively identify students who may be at risk 
                for reading failure or who are having difficulty 
                reading; and

                ``(iii) shall be provided by eligible professional 
            development providers;
            ``(B) to strengthen and enhance preservice courses for 
        students preparing, at all public institutions of higher 
        education in the State, to teach kindergarten through grade 3 
        by--
                ``(i) reviewing such courses to determine whether the 
            courses' 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 the report to the reading and literacy 
            partnership for the State established under section 
            1203(d), and making the report available for public review 
            by means of the Internet; and
            ``(C) to make recommendations on how the State licensure 
        and certification standards in the area of reading might be 
        improved.
        ``(4) Technical assistance for local educational agencies and 
    schools.--A State educational agency may expend not more than 25 
    percent of the amount of the funds made available under paragraph 
    (1) for one or more of the following:
            ``(A) Assisting local educational agencies in accomplishing 
        the tasks required to design and implement a program under this 
        subpart, including--
                ``(i) selecting and implementing a program or programs 
            of reading instruction based on scientifically based 
            reading research;
                ``(ii) selecting screening, diagnostic, and classroom-
            based instructional reading assessments; 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 expanded opportunities to students in 
        kindergarten through grade 3 who are served by eligible local 
        educational agencies for receiving reading assistance from 
        alternative providers that includes--
                ``(i) screening, diagnostic, and classroom-based 
            instructional reading assessments; and
                ``(ii) as need is indicated by the assessments under 
            clause (i), instruction based on scientifically based 
            reading research that includes the essential components of 
            reading instruction.
        ``(5) Planning, administration, and reporting.--
            ``(A) Expenditure of funds.--A State educational agency may 
        expend not more than 10 percent of the amount of funds made 
        available under paragraph (1) for the activities described in 
        this paragraph.
            ``(B) Planning and administration.--A State educational 
        agency that receives a grant under this section may expend 
        funds made available under subparagraph (A) for planning and 
        administration relating to the State uses of funds authorized 
        under this subpart, including the following:
                ``(i) Administering the distribution of competitive 
            subgrants to eligible local educational agencies under 
            subsection (c) and section 1204(d).
                ``(ii) Assessing and evaluating, on a regular basis, 
            eligible local educational agency activities assisted under 
            this subpart, with respect to whether they have been 
            effective in increasing the number of children in grades 1, 
            2, and 3 served under this subpart who can read at or above 
            grade level.
            ``(C) Annual reporting.--
                ``(i) In general.--A State educational agency that 
            receives a grant under this section shall expend funds made 
            available under subparagraph (A) to provide the Secretary 
            annually with a report on the implementation of this 
            subpart.
                ``(ii) Information included.--Each report under this 
            subparagraph shall include information on the following:

                    ``(I) Evidence that the State educational agency is 
                fulfilling its obligations under this subpart.
                    ``(II) Specific identification of those schools and 
                local educational agencies that report the largest 
                gains in reading achievement.
                    ``(III) The progress the State educational agency 
                and local educational agencies within the State are 
                making in reducing the number of students served under 
                this subpart in grades 1, 2, and 3 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.
                    ``(IV) Evidence on whether the State educational 
                agency and local educational agencies within the State 
                have significantly increased the number of students 
                reading at grade level or above, significantly 
                increased the percentages of students described in 
                section 1111(b)(2)(C)(v)(II) who are reading at grade 
                level or above, and successfully implemented this 
                subpart.

                ``(iii) Privacy protection.--Data in the report shall 
            be reported in a manner that protects the privacy of 
            individuals.
                ``(iv) Contract.--To the extent practicable, a State 
            educational agency shall enter into a contract with an 
            entity that conducts scientifically based reading research, 
            under which contract the entity will assist the State 
            educational agency in producing the reports required to be 
            submitted under this subparagraph.
    ``(e) Review.--
        ``(1) Progress report.--
            ``(A) Submission.--Not later than 60 days after the 
        termination of the third year of the grant period, each State 
        educational agency receiving a grant under this section shall 
        submit a progress report to the Secretary.
            ``(B) Information included.--The progress report shall 
        include information on the progress the State educational 
        agency and local educational agencies within the State are 
        making in reducing the number of students served under this 
        subpart in grades 1, 2, and 3 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 educational agency and local educational 
        agencies within the State that the State educational agency and 
        the local educational agencies have significantly increased the 
        number of students reading at grade level or above, 
        significantly increased the percentages of students described 
        in section 1111(b)(2)(C)(v)(II) who are reading at grade level 
        or above, and successfully implemented this subpart.
        ``(2) Peer review.--The progress report described in paragraph 
    (1) shall be reviewed by the peer review panel convened under 
    section 1203(c)(2).
        ``(3) Consequences of insufficient progress.--After submission 
    of the progress report described in paragraph (1), if the Secretary 
    determines that the State educational agency is not making 
    significant progress in meeting the purposes of this subpart, the 
    Secretary may withhold from the State educational agency, in whole 
    or in part, further payments under this section in accordance with 
    section 455 of the General Education Provisions Act or take such 
    other action authorized by law as the Secretary determines 
    necessary, including providing technical assistance upon request of 
    the State educational agency.
    ``(f) Funds not Used for State Level Activities.--Any portion of 
funds described in subsection (d)(1) that a State educational agency 
does not expend in accordance with subsection (d)(1) shall be expended 
for the purpose of making subgrants in accordance with subsection (c).

``SEC. 1203. STATE FORMULA GRANT APPLICATIONS.

    ``(a) Applications.--
        ``(1) In general.--A State educational agency that desires to 
    receive a grant under section 1202 shall submit an application to 
    the Secretary at such time and in such form as the Secretary may 
    require. The application shall contain the information described in 
    subsection (b).
        ``(2) Special application provisions.--For those State 
    educational agencies that have received a grant under part C of 
    title II (as such part was in effect on the day before the date of 
    enactment of the No Child Left Behind Act of 2001), the Secretary 
    shall establish a modified set of requirements for an application 
    under this section that takes into account the information already 
    submitted and approved under that program and minimizes the 
    duplication of effort on the part of such State educational 
    agencies.
    ``(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 educational agency's activities under this subpart.
        ``(2) A description, if applicable, of the State's strategy to 
    expand, continue, or modify activities authorized under part C of 
    title II (as such part was in effect on the day before the date of 
    enactment of the No Child Left Behind Act of 2001).
        ``(3) An assurance that the State educational agency, and any 
    local educational agencies receiving a subgrant from that State 
    educational agency under section 1202, will, if requested, 
    participate in the external evaluation under section 1205.
        ``(4) A State educational agency plan containing a description 
    of the following:
            ``(A) How the State educational agency will assist local 
        educational agencies in identifying screening, diagnostic, and 
        classroom-based instructional reading assessments.
            ``(B) How the State educational agency will assist local 
        educational agencies in identifying instructional materials, 
        programs, strategies, and approaches, based on scientifically 
        based reading research, including early intervention and 
        reading remediation materials, programs, and approaches.
            ``(C) How the State educational agency will ensure that 
        professional development activities related to reading 
        instruction and provided under section 1202 are--
                ``(i) coordinated with other Federal, State, and local 
            level funds, and used effectively to improve instructional 
            practices for reading; and
                ``(ii) based on scientifically based reading research.
            ``(D) How the activities assisted under section 1202 will 
        address the needs of teachers and other instructional staff in 
        implementing the essential components of reading instruction.
            ``(E) How subgrants made by the State educational agency 
        under section 1202 will meet the requirements of section 1202, 
        including how the State educational agency will ensure that 
        eligible local educational agencies receiving subgrants under 
        section 1202 will use practices based on scientifically based 
        reading research.
            ``(F) How the State educational agency will, to the extent 
        practicable, make grants to eligible local educational agencies 
        in both rural and urban areas.
            ``(G) How the State educational agency will build on, and 
        promote coordination among literacy programs in the State 
        (including federally funded programs such as programs under the 
        Adult Education and Family Literacy Act, the Individuals with 
        Disabilities Education Act, and subpart 2), to increase the 
        effectiveness of the programs in improving reading for adults 
        and children and to avoid duplication of the efforts of the 
        program.
            ``(H) How the State educational agency will assess and 
        evaluate, on a regular basis, eligible local educational agency 
        activities assisted under section 1202, with respect to whether 
        the activities have been effective in achieving the purposes of 
        section 1202.
            ``(I) Any other information that the Secretary may 
        reasonably require.
    ``(c) Approval of Applications.--
        ``(1) In general.--The Secretary shall approve an application 
    of a State educational agency under this section only 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--
                ``(i) experts who are competent, by virtue of their 
            training, expertise, or experience, to evaluate 
            applications under this section;
                ``(ii) experts who provide professional development to 
            individuals who teach reading to children and adults based 
            on scientifically based reading research;
                ``(iii) experts who provide professional development to 
            other instructional staff based on scientifically based 
            reading research; and
                ``(iv) an individual who has expertise in screening, 
            diagnostic, and classroom-based instructional reading 
            assessments.
            ``(C) Recommendations.--The panel shall recommend grant 
        applications from State educational agencies under this section 
        to the Secretary for funding or for disapproval.
    ``(d) Reading and Literacy Partnerships.--
        ``(1) In general.--For a State educational agency to receive a 
    grant under section 1202, 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 eligible 
        local educational agency.
            ``(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, selected jointly by 
        the Governor and the chief State school officer.
            ``(G) A parent of a public or private school student or a 
        parent who educates the parent's child in the parent's 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 another 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 in the State that is based on 
        scientifically based reading research;
            ``(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.
        ``(4) Preexisting partnership.--If, before the date of 
    enactment of the No Child Left Behind Act of 2001, a State 
    educational agency established a consortium, partnership, or any 
    other similar body that was considered a reading and literacy 
    partnership for purposes of part C of title II of this Act (as such 
    part was in effect on the day before the date of enactment of No 
    Child Left Behind Act of 2001), that consortium, partnership, or 
    body may be considered a reading and literacy partnership for 
    purposes of this subsection consistent with the provisions of this 
    subpart.

``SEC. 1204. TARGETED ASSISTANCE GRANTS.

    ``(a) Eligibility Criteria for Awarding Targeted Assistance Grants 
to States.--Beginning with fiscal year 2004, from funds appropriated 
under section 1202(b)(1)(E), the Secretary shall make grants, on a 
competitive basis, to those State educational agencies that--
        ``(1) for each of 2 consecutive years, demonstrate that an 
    increasing percentage of third graders in each of the groups 
    described in section 1111(b)(2)(C)(v)(II) in the schools served by 
    the local educational agencies receiving funds under section 1202 
    are reaching the proficient level in reading; and
        ``(2) for each of the same such consecutive 2 years, 
    demonstrate that schools receiving funds under section 1202 are 
    improving the reading skills of students in grades 1, 2, and 3 
    based on screening, diagnostic, and classroom-based instructional 
    reading assessments.
    ``(b) Continuation of Performance Awards.--For any State 
educational agency that receives a competitive grant under this 
section, the Secretary shall make an award for each of the succeeding 
years that the State educational agency demonstrates it is continuing 
to meet the criteria described in subsection (a).
    ``(c) Distribution of Targeted Assistance Grants.--
        ``(1) In general.--The Secretary shall make a grant to each 
    State educational agency with an application approved under this 
    section in an amount that bears the same relation to the amount 
    made available to carry out this section for a fiscal year as the 
    number of children counted under section 1124(c) for the State 
    bears to the number of such children so counted for all States with 
    applications approved for that year.
        ``(2) Peer review.--The peer review panel convened under 
    section 1203(c)(2) shall review the applications submitted under 
    this subsection. The panel shall recommend such applications to the 
    Secretary for funding or for disapproval.
        ``(3) Application contents.--A 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 
    accompanied by such information as the Secretary may require. Each 
    such application shall include the following:
            ``(A) Evidence that the State educational agency has 
        carried out its obligations under section 1203.
            ``(B) Evidence that the State educational agency has met 
        the criteria described in subsection (a).
            ``(C) The amount of funds requested by the State 
        educational agency and a description of the criteria the State 
        educational agency intends to use in distributing subgrants to 
        eligible local educational agencies under this section to 
        continue or expand activities under subsection (d)(5).
            ``(D) Evidence that the State educational agency has 
        increased significantly the percentage of students reading at 
        grade level or above.
            ``(E) Any additional evidence that demonstrates success in 
        the implementation of this section.
    ``(d) Subgrants to Eligible Local Educational Agencies.--
        ``(1) In general.--The Secretary may make a grant to a State 
    educational agency under this section only if the State educational 
    agency 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 eligible local 
    educational agencies.
        ``(2) Notice.--A State educational agency 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, an eligible local educational agency shall submit 
    an application to the State educational agency at such time, in 
    such manner, and containing such information as the State 
    educational agency may reasonably require.
        ``(4) Distribution.--
            ``(A) In general.--A State educational agency shall 
        distribute subgrants under this section through a competitive 
        process based on relative need of eligible local educational 
        agencies and the evidence described in this paragraph.
            ``(B) Evidence used in all years.--For all fiscal years, a 
        State educational agency shall distribute subgrants under this 
        section based on evidence that an eligible local educational 
        agency--
                ``(i) satisfies the requirements of section 1202(c)(4);
                ``(ii) will carry out its obligations under this 
            subpart;
                ``(iii) will work with other local educational agencies 
            in the State that have not received a subgrant under this 
            subsection to assist such nonreceiving agencies in 
            increasing the reading achievement of students; and
                ``(iv) is meeting the criteria described in subsection 
            (a).
        ``(5) Local uses of funds.--An eligible 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 1202(c)(7)(A); 
        and
            ``(B) may use such funds to carry out the activities 
        described in section 1202(c)(7)(B).

``SEC. 1205. EXTERNAL EVALUATION.

    ``(a) In General.--From funds reserved under section 1202(b)(1)(C), 
the Secretary shall contract with an independent organization outside 
of the Department for a 5-year, rigorous, scientifically valid, 
quantitative evaluation of this subpart.
    ``(b) Process.--The evaluation under subsection (a) shall be 
conducted by an organization that is capable of designing and carrying 
out an independent evaluation that identifies the effects of specific 
activities carried out by State educational agencies and local 
educational agencies under this subpart on improving reading 
instruction. Such evaluation shall take into account factors 
influencing student performance that are not controlled by teachers or 
education administrators.
    ``(c) Analysis.--The evaluation under subsection (a) 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 State 
    educational agencies and local educational agencies measure the 
    essential components of reading.
        ``(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 targeted 
    assistance grant under section 1204 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 screening, 
    diagnostic, and classroom-based instructional reading assessments 
    assist teachers in identifying specific reading deficiencies.
        ``(7) A measurement of the extent to which professional 
    development programs implemented by State educational agencies 
    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 State educational 
agencies and local educational agencies on a periodic basis for use in 
program improvement.

``SEC. 1206. NATIONAL ACTIVITIES.

    ``From funds reserved under section 1202(b)(1)(C), the Secretary--
        ``(1) may provide technical assistance in achieving the 
    purposes of this subpart to State educational agencies, local 
    educational agencies, and schools requesting such assistance;
        ``(2) shall, at a minimum, evaluate the impact of services 
    provided to children under this subpart with respect to their 
    referral to, and eligibility for, special education services under 
    the Individuals with Disabilities Education Act (based on their 
    difficulties learning to read); and
        ``(3) shall carry out the external evaluation as described in 
    section 1205.

``SEC. 1207. INFORMATION DISSEMINATION.

    ``(a) In General.--From funds reserved under section 1202(b)(1)(D), 
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 shall--
        ``(1) disseminate information on scientifically based reading 
    research pertaining to children, youth, and adults;
        ``(2) identify and disseminate information about schools, local 
    educational agencies, and State educational agencies that have 
    effectively developed and implemented classroom reading programs 
    that meet the requirements of this subpart, including those State 
    educational agencies, local educational agencies, and schools that 
    have been identified as effective through the evaluation and peer 
    review provisions of this subpart; and
        ``(3) 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 and Coordination.--At a minimum, the National 
Institute for Literacy shall disseminate the information described in 
subsection (a) to--
        ``(1) recipients of Federal financial assistance under this 
    title, title III, the Head Start Act, the Individuals with 
    Disabilities Education Act, and the Adult Education and Family 
    Literacy Act; and
        ``(2) each Bureau funded school (as defined in section 1141 of 
    the Education Amendments of 1978).
    ``(c) Use of Existing Networks.--In carrying out this section, the 
National Institute for Literacy shall, to the extent practicable, use 
existing information and dissemination networks developed and 
maintained through other public and private entities including through 
the Department and the National Center for Family Literacy.
    ``(d) National Institute for Literacy.--For purposes of funds 
reserved under section 1202(b)(1)(D) to carry out this section, the 
National Institute for Literacy shall administer such funds in 
accordance with section 242(b) of Public Law 105-220 (relating to the 
establishment and administration of the National Institute for 
Literacy).

``SEC. 1208. DEFINITIONS.

    ``In this subpart:
        ``(1) Eligible local educational agency.--The term `eligible 
    local educational agency' means a local educational agency that--
            ``(A) is among the local educational agencies in the State 
        with the highest numbers or percentages of students in 
        kindergarten through grade 3 reading below grade level, based 
        on the most currently available data; and
            ``(B) has--
                ``(i) jurisdiction over a geographic area that includes 
            an area designated as an empowerment zone, or an enterprise 
            community, under part I of subchapter U of chapter 1 of the 
            Internal Revenue Code of 1986;
                ``(ii) jurisdiction over a significant number or 
            percentage of schools that are identified for school 
            improvement under section 1116(b); or
                ``(iii) the highest numbers or percentages of children 
            who are counted under section 1124(c), in comparison to 
            other local educational agencies in the State.
        ``(2) 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.
        ``(3) 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) reading fluency, including oral reading skills; and
            ``(E) reading comprehension strategies.
        ``(4) 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.
        ``(5) 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.
        ``(6) Scientifically based reading research.--The term 
    `scientifically based reading research' means research that--
            ``(A) applies rigorous, systematic, and objective 
        procedures to obtain valid knowledge relevant to reading 
        development, reading instruction, and reading difficulties; and
            ``(B) includes 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.
        ``(7) Screening, diagnostic, and classroom-based instructional 
    reading assessments.--
            ``(A) In general.--The term `screening, diagnostic, and 
        classroom-based instructional reading assessments' means--
                ``(i) screening reading assessments;
                ``(ii) diagnostic reading assessments; and
                ``(iii) classroom-based instructional reading 
            assessments.
            ``(B) Screening reading assessment.--The term `screening 
        reading assessment' means an assessment that is--
                ``(i) valid, reliable, and based on scientifically 
            based reading research; and
                ``(ii) a brief procedure designed as a first step in 
            identifying children who may be at high risk for delayed 
            development or academic failure and in need of further 
            diagnosis of their need for special services or additional 
            reading instruction.
            ``(C) Diagnostic reading assessment.--The term `diagnostic 
        reading assessment' means an assessment that is--
                ``(i) valid, reliable, and based on scientifically 
            based reading research; and
                ``(ii) used for the purpose of--

                    ``(I) identifying a child's specific areas of 
                strengths and weaknesses so that the child has learned 
                to read by the end of grade 3;
                    ``(II) determining any difficulties that a child 
                may have in learning to read and the potential cause of 
                such difficulties; and
                    ``(III) helping to determine possible reading 
                intervention strategies and related special needs.

            ``(D) Classroom-based instructional reading assessment.--
        The term `classroom-based instructional reading assessment' 
        means an assessment that--
                ``(i) evaluates children's learning based on systematic 
            observations by teachers of children performing academic 
            tasks that are part of their daily classroom experience; 
            and
                ``(ii) is used to improve instruction in reading, 
            including classroom instruction.

                    ``Subpart 2--Early Reading First

``SEC. 1221. PURPOSES; DEFINITIONS.

    ``(a) Purposes.--The purposes of this subpart are as follows:
        ``(1) To support local efforts to enhance the early language, 
    literacy, and prereading development of preschool age children, 
    particularly those from low-income families, through strategies and 
    professional development that are based on scientifically based 
    reading research.
        ``(2) To provide preschool age children with cognitive learning 
    opportunities in high-quality language and literature-rich 
    environments, so that the children can attain the fundamental 
    knowledge and skills necessary for optimal reading development in 
    kindergarten and beyond.
        ``(3) To demonstrate language and literacy activities based on 
    scientifically based reading research that supports the age-
    appropriate development of--
            ``(A) recognition, leading to automatic recognition, of 
        letters of the alphabet;
            ``(B) knowledge of letter sounds, the blending of sounds, 
        and the use of increasingly complex vocabulary;
            ``(C) an understanding that written language is composed of 
        phonemes and letters each representing one or more speech 
        sounds that in combination make up syllables, words, and 
        sentences;
            ``(D) spoken language, including vocabulary and oral 
        comprehension abilities; and
            ``(E) knowledge of the purposes and conventions of print.
        ``(4) To use screening assessments to effectively identify 
    preschool age children who may be at risk for reading failure.
        ``(5) To integrate such scientific reading research-based 
    instructional materials and literacy activities with existing 
    programs of preschools, child care agencies and programs, Head 
    Start centers, and family literacy services.
    ``(b) Definitions.--For purposes of this subpart:
        ``(1) Eligible applicant.--The term `eligible applicant' 
    means--
            ``(A) one or more local educational agencies that are 
        eligible to receive a subgrant under subpart 1;
            ``(B) one or more public or private organizations or 
        agencies, acting on behalf of one or more programs that serve 
        preschool age children (such as a program at a Head Start 
        center, a child care program, or a family literacy program), 
        which organizations or agencies shall be located in a community 
        served by a local educational agency described in subparagraph 
        (A); or
            ``(C) one or more local educational agencies described in 
        subparagraph (A) in collaboration with one or more 
        organizations or agencies described in subparagraph (B).
        ``(2) Scientifically based reading research.--The term 
    `scientifically based reading research' has the same meaning given 
    to that term in section 1208.
        ``(3) Screening reading assessment.--The term `screening 
    reading assessment' has the same meaning given to that term in 
    section 1208.

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

    ``(a) Program Authorized.--From amounts appropriated under section 
1002(b)(2), the Secretary shall award grants, on a competitive basis, 
for periods of not more than 6 years, to eligible applicants to enable 
the eligible applicants to carry out the authorized activities 
described in subsection (d).
    ``(b) Applications.--An eligible applicant that desires to receive 
a grant under this section shall submit an application to the 
Secretary, which shall include a description of--
        ``(1) the programs to be served by the proposed project, 
    including demographic and socioeconomic information on the 
    preschool age children enrolled in the programs;
        ``(2) how the proposed project will enhance the school 
    readiness of preschool age children in high-quality oral language 
    and literature-rich environments;
        ``(3) how the proposed project will prepare and provide ongoing 
    assistance to staff in the programs, through professional 
    development and other support, to provide high-quality language, 
    literacy, and prereading activities using scientifically based 
    reading research, for preschool age children;
        ``(4) how the proposed project will provide services and use 
    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 help staff in the programs 
    to meet more effectively the diverse needs of preschool age 
    children in the community, including such children with limited 
    English proficiency, disabilities, or other special needs;
        ``(6) how the proposed project will integrate such 
    instructional materials and literacy activities with existing 
    preschool programs and family literacy services;
        ``(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) if the eligible applicant has received a subgrant under 
    subpart 1, how the activities conducted under this subpart will be 
    coordinated with the eligible applicant's activities under subpart 
    1 at the kindergarten through grade 3 level;
        ``(9) how the proposed project will evaluate the success of the 
    activities supported under this subpart in enhancing the early 
    language, literacy, and prereading development of preschool age 
    children served by the project; and
        ``(10) such other information as the Secretary may require.
    ``(c) 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 a peer review panel convened 
under section 1203(c)(2), that includes, at a minimum, three 
individuals, selected from the entities described in clauses (ii), 
(iii), and (iv) of section 1203(c)(2)(A), who are experts in early 
reading development and early childhood development.
    ``(d) Authorized Activities.--An eligible applicant that receives a 
grant under this subpart shall use the funds provided under the grant 
to carry out the following activities:
        ``(1) Providing preschool age children with high-quality oral 
    language and literature-rich environments in which to acquire 
    language and prereading skills.
        ``(2) Providing professional development that is based on 
    scientifically based reading research knowledge of early language 
    and reading development for the staff of the eligible applicant and 
    that will assist in developing the preschool age children's--
            ``(A) recognition, leading to automatic recognition, of 
        letters of the alphabet, knowledge of letters, sounds, blending 
        of letter sounds, and increasingly complex vocabulary;
            ``(B) understanding that written language is composed of 
        phonemes and letters each representing one or more speech 
        sounds that in combination make up syllables, words, and 
        sentences;
            ``(C) spoken language, including vocabulary and oral 
        comprehension abilities; and
            ``(D) knowledge of the purposes and conventions of print.
        ``(3) Identifying and providing activities and instructional 
    materials that are based on scientifically based reading research 
    for use in developing the skills and abilities described in 
    paragraph (2).
        ``(4) Acquiring, providing training for, and implementing 
    screening reading assessments or other appropriate measures that 
    are based on scientifically based reading research to determine 
    whether preschool age children are developing the skills described 
    in this subsection.
        ``(5) Integrating such instructional materials, activities, 
    tools, and measures into the programs offered by the eligible 
    applicant.
    ``(e) 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 to coordinate the activities under this subpart with 
preschool age programs administered by the Department of Health and 
Human Services.

``SEC. 1224. INFORMATION DISSEMINATION.

    ``From the funds the National Institute for Literacy receives under 
section 1202(b)(1)(D), the National Institute for Literacy, in 
consultation with the Secretary, shall disseminate information 
regarding projects assisted under this subpart that have proven 
effective.

``SEC. 1225. REPORTING REQUIREMENTS.

    ``Each eligible applicant receiving a grant under this subpart 
shall report annually to the Secretary regarding the eligible 
applicant's progress in addressing the purposes of this subpart. Such 
report shall include, at a minimum, a description of--
        ``(1) the 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 results of the evaluation described in section 
    1222(b)(9).

``SEC. 1226. EVALUATION.

    ``(a) In General.--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 
$3,000,000 to conduct an independent evaluation of the effectiveness of 
this subpart.
    ``(b) Reports.--
        ``(1) Interim report.--Not later than October 1, 2004, the 
    Secretary shall submit an interim report to the Committee on 
    Education and the Workforce of the House of Representatives and the 
    Committee on Health, Education, Labor, and Pensions of the Senate.
        ``(2) Final report.--Not later than September 30, 2006, the 
    Secretary shall submit a final report to the committees described 
    in paragraph (1).
    ``(c) Contents.--The reports submitted under subsection (b) shall 
include information on the following:
        ``(1) How the grant recipients under this subpart are improving 
    the prereading skills of preschool children.
        ``(2) The effectiveness of the professional development program 
    assisted under this subpart.
        ``(3) How early childhood teachers are being prepared with 
    scientifically based reading research on early reading development.
        ``(4) What activities and instructional practices are most 
    effective.
        ``(5) How prereading instructional materials and literacy 
    activities based on scientifically based reading research are being 
    integrated into preschools, child care agencies and programs, 
    programs carried out under the Head Start Act, and family literacy 
    programs.
        ``(6) Any recommendations on strengthening or modifying this 
    subpart.

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

``SEC. 1231. STATEMENT OF PURPOSE.

    ``It is the purpose of this subpart to help break the cycle of 
poverty and illiteracy by--
        ``(1) improving the educational opportunities of the Nation's 
    low-income families by integrating early childhood education, adult 
    literacy or adult basic education, and parenting education into a 
    unified family literacy program, to be referred to as `Even Start'; 
    and
        ``(2) establishing a program that shall--
            ``(A) be implemented through cooperative projects that 
        build on high-quality existing community resources to create a 
        new range of services;
            ``(B) promote the academic achievement of children and 
        adults;
            ``(C) assist children and adults from low-income families 
        to achieve to challenging State content standards and 
        challenging State student achievement standards; and
            ``(D) use instructional programs based on scientifically 
        based reading research and addressing the prevention of reading 
        difficulties for children and adults, to the extent such 
        research is available.

``SEC. 1232. PROGRAM AUTHORIZED.

    ``(a) Reservation for Migrant Programs, Outlying Areas, and Indian 
Tribes.--
        ``(1) In general.--For each fiscal year, the Secretary shall 
    reserve 5 percent of the amount appropriated under section 
    1002(b)(3) (or, if such appropriated amount exceeds $200,000,000, 6 
    percent of such amount) for programs, under such terms and 
    conditions as the Secretary shall establish, that are consistent 
    with the purpose of this subpart, and according to their relative 
    needs, for--
            ``(A) children of migratory workers;
            ``(B) the outlying areas; and
            ``(C) Indian tribes and tribal organizations.
        ``(2) Special rule.--After December 21, 2000, the Secretary 
    shall award a grant, on a competitive basis, of sufficient size and 
    for a period of sufficient duration to demonstrate the 
    effectiveness of a family literacy program in a prison that houses 
    women and their preschool age children and that has the capability 
    of developing a program of high quality.
        ``(3) Coordination of programs for american indians.--The 
    Secretary shall ensure that programs under paragraph (1)(C) are 
    coordinated with family literacy programs operated by the Bureau of 
    Indian Affairs in order to avoid duplication and to encourage the 
    dissemination of information on high-quality family literacy 
    programs serving American Indians.
    ``(b) Reservation for Federal Activities.--
        ``(1) Evaluation, technical assistance, program improvement, 
    and replication activities.--Subject to paragraph (2), from amounts 
    appropriated under section 1002(b)(3), the Secretary may reserve 
    not more than 3 percent of such amounts for purposes of--
            ``(A) carrying out the evaluation required by section 1239; 
        and
            ``(B) providing, through grants or contracts with eligible 
        organizations, technical assistance, program improvement, and 
        replication activities.
        ``(2) Research.--In any fiscal year, if the amount appropriated 
    under section 1002(b)(3) for such year--
            ``(A) is equal to or less than the amount appropriated for 
        the preceding fiscal year, the Secretary may reserve from such 
        amount only the amount necessary to continue multi-year 
        activities carried out pursuant to section 1241(b) that began 
        during or prior to the fiscal year preceding the fiscal year 
        for which the determination is made; or
            ``(B) exceeds the amount appropriated for the preceding 
        fiscal year, then the Secretary shall reserve from such excess 
        amount $2,000,000 or 50 percent, whichever is less, to carry 
        out section 1241(b).
    ``(c) Reservation for Grants.--
        ``(1) Grants authorized.--
            ``(A) In general.--For any fiscal year for which at least 
        one State educational agency applies and submits an application 
        that meets the requirements and goals of this subsection and 
        for which the amount appropriated under section 1002(b)(3) 
        exceeds the amount appropriated under that section for the 
        preceding fiscal year, the Secretary shall reserve, from the 
        amount of the excess remaining after the application of 
        subsection (b)(2), the amount of the remainder or $1,000,000, 
        whichever is less, to award grants, on a competitive basis, to 
        State educational agencies to enable them to plan and implement 
        statewide family literacy initiatives to coordinate and, where 
        appropriate, integrate existing Federal, State, and local 
        literacy resources consistent with the purposes of this 
        subpart.
            ``(B) Coordination and integration.--The coordination and 
        integration described in subparagraph (A) shall include 
        coordination and integration of funds available under the Adult 
        Education and Family Literacy Act, the Head Start Act, this 
        subpart, part A of this title, and part A of title IV of the 
        Social Security Act.
            ``(C) Restriction.--No State educational agency may receive 
        more than one grant under this subsection.
        ``(2) Consortia.--
            ``(A) Establishment.--To receive a grant under this 
        subsection, a State educational agency shall establish a 
        consortium of State-level programs under the following 
        provisions of laws:
                ``(i) This title (other than part D).
                ``(ii) The Head Start Act.
                ``(iii) The Adult Education and Family Literacy Act.
                ``(iv) All other State-funded preschool programs and 
            programs providing literacy services to adults.
            ``(B) Plan.--To receive a grant under this subsection, the 
        consortium established by a State educational agency shall 
        create a plan to use a portion of the State educational 
        agency's resources, derived from the programs referred to in 
        subparagraph (A), to strengthen and expand family literacy 
        services in the State.
            ``(C) Coordination with subpart 1.--The consortium shall 
        coordinate its activities under this paragraph with the 
        activities of the reading and literacy partnership for the 
        State educational agency established under section 1203(d), if 
        the State educational agency receives a grant under section 
        1202.
        ``(3) Reading instruction.--Statewide family literacy 
    initiatives implemented under this subsection shall base reading 
    instruction on scientifically based reading research.
        ``(4) Technical assistance.--The Secretary shall provide, 
    directly or through a grant or contract with an organization with 
    experience in the development and operation of successful family 
    literacy services, technical assistance to State educational 
    agencies receiving a grant under this subsection.
        ``(5) Matching requirement.--The Secretary shall not make a 
    grant to a State educational agency under this subsection unless 
    the State educational agency agrees that, with respect to the costs 
    to be incurred by the eligible consortium in carrying out the 
    activities for which the grant was awarded, the State educational 
    agency will make available non-Federal contributions in an amount 
    equal to not less than the Federal funds provided under the grant.
    ``(d) State Educational Agency Allocation.--
        ``(1) In general.--From amounts appropriated under section 
    1002(b)(3) and not reserved under subsection (a), (b), or (c), the 
    Secretary shall make grants to State educational agencies from 
    allocations under paragraph (2).
        ``(2) Allocations.--Except as provided in paragraph (3), from 
    the total amount available under paragraph (1) for allocation to 
    State educational agencies in any fiscal year, each State 
    educational agency shall be eligible to receive a grant under 
    paragraph (1) in an amount that bears the same ratio to the total 
    amount as the amount allocated under part A to that State 
    educational agency bears to the total amount allocated under that 
    part to all State educational agencies.
        ``(3) Minimum.--No State educational agency shall receive a 
    grant under paragraph (1) in any fiscal year in an amount that is 
    less than $250,000, or one-half of 1 percent of the amount 
    appropriated under section 1002(b)(3) and not reserved under 
    subsections (a), (b), and (c) for such year, whichever is greater.
    ``(e) Definitions.--For the purpose of this subpart--
        ``(1) the term `eligible entity' means a partnership composed 
    of--
            ``(A) a local educational agency; and
            ``(B) a nonprofit community-based organization, a public 
        agency other than a local educational agency, an institution of 
        higher education, or a public or private nonprofit organization 
        other than a local educational agency, of demonstrated quality;
        ``(2) the term `eligible organization' means any public or 
    private nonprofit organization with a record of providing effective 
    services to family literacy providers, such as the National Center 
    for Family Literacy, Parents as Teachers, Inc., the Home 
    Instruction Program for Preschool Youngsters, and the Home and 
    School Institute, Inc.;
        ``(3) the terms `Indian tribe' and `tribal organization' have 
    the meanings given those terms in section 4 of the Indian Self-
    Determination and Education Assistance Act;
        ``(4) the term `scientifically based reading research' has the 
    meaning given that term in section 1208; and
        ``(5) the term `State' means each of the 50 States, the 
    District of Columbia, and the Commonwealth of Puerto Rico.

``SEC. 1233. STATE EDUCATIONAL AGENCY PROGRAMS.

    ``(a) State Educational Agency Level Activities.--Each State 
educational agency that receives a grant under section 1232(d)(1) may 
use not more than a total of 6 percent of the grant funds for the costs 
of--
        ``(1) administration, which amount shall not exceed half of the 
    total;
        ``(2) providing, through one or more subgrants or contracts, 
    technical assistance for program improvement and replication, to 
    eligible entities that receive subgrants under subsection (b); and
        ``(3) carrying out sections 1240 and 1234(c).
    ``(b) Subgrants for Local Programs.--
        ``(1) In general.--Each State educational agency shall use the 
    grant funds received under section 1232(d)(1) and not reserved 
    under subsection (a) to award subgrants to eligible entities to 
    carry out Even Start programs.
        ``(2) Minimum subgrant amounts.--
            ``(A) In general.--Except as provided in subparagraphs (B) 
        and (C), no State educational agency shall award a subgrant 
        under paragraph (1) in an amount less than $75,000.
            ``(B) Subgrantees in ninth and succeeding years.--No State 
        educational agency shall award a subgrant under paragraph (1) 
        in an amount less than $52,500 to an eligible entity for a 
        fiscal year to carry out an Even Start program that is 
        receiving assistance under this subpart or its predecessor 
        authority for the ninth (or any subsequent) fiscal year.
            ``(C) Exception for single subgrant.--A State educational 
        agency may award one subgrant in each fiscal year of sufficient 
        size, scope, and quality to be effective in an amount less than 
        $75,000 if, after awarding subgrants under paragraph (1) for 
        that fiscal year in accordance with subparagraphs (A) and (B), 
        less than $75,000 is available to the State educational agency 
        to award those subgrants.

``SEC. 1234. USES OF FUNDS.

    ``(a) In General.--In carrying out an Even Start program under this 
subpart, a recipient of funds under this subpart shall use those funds 
to pay the Federal share of the cost of providing intensive family 
literacy services that involve parents and children, from birth through 
age 7, in a cooperative effort to help parents become full partners in 
the education of their children and to assist children in reaching 
their full potential as learners.
    ``(b) Federal Share Limitation.--
        ``(1) In general.--
            ``(A) Federal share.--Except as provided in paragraph (2), 
        the Federal share under this subpart may not exceed--
                ``(i) 90 percent of the total cost of the program in 
            the first year that the program receives assistance under 
            this subpart or its predecessor authority;
                ``(ii) 80 percent in the second year;
                ``(iii) 70 percent in the third year;
                ``(iv) 60 percent in the fourth year;
                ``(v) 50 percent in the fifth, sixth, seventh, and 
            eighth such years; and
                ``(vi) 35 percent in any subsequent year.
            ``(B) Remaining cost.--The remaining cost of a program 
        assisted under this subpart may be provided in cash or in kind, 
        fairly evaluated, and may be obtained from any source, 
        including other Federal funds under this Act.
        ``(2) Waiver.--The State educational agency may waive, in whole 
    or in part, the Federal share described in paragraph (1) for an 
    eligible entity if the entity--
            ``(A) demonstrates that it otherwise would not be able to 
        participate in the program assisted under this subpart; and
            ``(B) negotiates an agreement with the State educational 
        agency with respect to the amount of the remaining cost to 
        which the waiver will be applicable.
        ``(3) Prohibition.--Federal funds provided under this subpart 
    may not be used for the indirect costs of a program assisted under 
    this subpart, except that the Secretary may waive this paragraph if 
    an eligible recipient of funds reserved under section 1232(a)(1)(C) 
    demonstrates to the Secretary's satisfaction that the recipient 
    otherwise would not be able to participate in the program assisted 
    under this subpart.
    ``(c) Use of Funds for Family Literacy Services.--
        ``(1) In general.--A State educational agency may use a portion 
    of funds reserved under section 1233(a), to assist eligible 
    entities receiving a subgrant under section 1233(b) in improving 
    the quality of family literacy services provided under Even Start 
    programs under this subpart, except that in no case may a State 
    educational agency's use of funds for this purpose for a fiscal 
    year result in a decrease from the level of activities and services 
    provided to program participants in the preceding year.
        ``(2) Priority.--In carrying out paragraph (1), a State 
    educational agency shall give priority to programs that were of low 
    quality, as evaluated based on the indicators of program quality 
    developed by the State educational agency under section 1240.
        ``(3) Technical assistance to help local programs raise 
    additional funds.--In carrying out paragraph (1), a State 
    educational agency may use the funds referred to in that paragraph 
    to provide technical assistance to help local programs of 
    demonstrated effectiveness to access and leverage additional funds 
    for the purpose of expanding services and reducing waiting lists, 
    including requesting and applying for non-Federal resources.
        ``(4) Technical assistance and training.--Assistance under 
    paragraph (1) shall be in the form of technical assistance and 
    training, provided by a State educational agency through a grant, 
    contract, or cooperative agreement with an entity that has 
    experience in offering high-quality training and technical 
    assistance to family literacy providers.

``SEC. 1235. PROGRAM ELEMENTS.

    ``Each program assisted under this subpart shall--
        ``(1) include the identification and recruitment of families 
    most in need of services provided under this subpart, as indicated 
    by a low level of income, a low level of adult literacy or English 
    language proficiency of the eligible parent or parents, and other 
    need-related indicators;
        ``(2) include screening and preparation of parents, including 
    teenage parents, and children to enable those parents and children 
    to participate fully in the activities and services provided under 
    this subpart, including testing, referral to necessary counselling, 
    other developmental and support services, and related services;
        ``(3) be designed to accommodate the participants' work 
    schedule and other responsibilities, including the provision of 
    support services, when those services are unavailable from other 
    sources, necessary for participation in the activities assisted 
    under this subpart, such as--
            ``(A) scheduling and locating of services to allow joint 
        participation by parents and children;
            ``(B) child care for the period that parents are involved 
        in the program provided under this subpart; and
            ``(C) transportation for the purpose of enabling parents 
        and their children to participate in programs authorized by 
        this subpart;
        ``(4) include high-quality, intensive instructional programs 
    that promote adult literacy and empower parents to support the 
    educational growth of their children, developmentally appropriate 
    early childhood educational services, and preparation of children 
    for success in regular school programs;
        ``(5) with respect to the qualifications of staff the cost of 
    whose salaries are paid, in whole or in part, with Federal funds 
    provided under this subpart, ensure that--
            ``(A) not later than December 21, 2004--
                ``(i) a majority of the individuals providing academic 
            instruction--

                    ``(I) shall have obtained an associate's, 
                bachelor's, or graduate degree in a field related to 
                early childhood education, elementary school or 
                secondary school education, or adult education; and
                    ``(II) if applicable, shall meet qualifications 
                established by the State for early childhood education, 
                elementary school or secondary school education, or 
                adult education provided as part of an Even Start 
                program or another family literacy program;

                ``(ii) the individual responsible for administration of 
            family literacy services under this subpart has received 
            training in the operation of a family literacy program; and
                ``(iii) paraprofessionals who provide support for 
            academic instruction have a secondary school diploma or its 
            recognized equivalent; and
            ``(B) all new personnel hired to provide academic 
        instruction--
                ``(i) have obtained an associate's, bachelor's, or 
            graduate degree in a field related to early childhood 
            education, elementary school or secondary school education, 
            or adult education; and
                ``(ii) if applicable, meet qualifications established 
            by the State for early childhood education, elementary 
            school or secondary school education, or adult education 
            provided as part of an Even Start program or another family 
            literacy program;
        ``(6) include special training of staff, including child-care 
    staff, to develop the skills necessary to work with parents and 
    young children in the full range of instructional services offered 
    through this subpart;
        ``(7) provide and monitor integrated instructional services to 
    participating parents and children through home-based programs;
        ``(8) operate on a year-round basis, including the provision of 
    some program services, including instructional and enrichment 
    services, during the summer months;
        ``(9) be coordinated with--
            ``(A) other programs assisted under this Act;
            ``(B) any relevant programs under the Adult Education and 
        Family Literacy Act, the Individuals with Disabilities 
        Education Act, and title I of the Workforce Investment Act of 
        1998; and
            ``(C) the Head Start program, volunteer literacy programs, 
        and other relevant programs;
        ``(10) use instructional programs based on scientifically based 
    reading research for children and adults, to the extent that 
    research is available;
        ``(11) encourage participating families to attend regularly and 
    to remain in the program a sufficient time to meet their program 
    goals;
        ``(12) include reading-readiness activities for preschool 
    children based on scientifically based reading research, to the 
    extent available, to ensure that children enter school ready to 
    learn to read;
        ``(13) if applicable, promote the continuity of family literacy 
    to ensure that individuals retain and improve their educational 
    outcomes;
        ``(14) ensure that the programs will serve those families most 
    in need of the activities and services provided by this subpart; 
    and
        ``(15) provide for an independent evaluation of the program, to 
    be used for program improvement.

``SEC. 1236. ELIGIBLE PARTICIPANTS.

    ``(a) In General.--Except as provided in subsection (b), eligible 
participants in an Even Start program are--
        ``(1) a parent or parents--
            ``(A) who are eligible for participation in adult education 
        and literacy activities under the Adult Education and Family 
        Literacy Act; or
            ``(B) who are within the State's compulsory school 
        attendance age range, so long as a local educational agency 
        provides (or ensures the availability of) the basic education 
        component required under this subpart, or who are attending 
        secondary school; and
        ``(2) the child or children, from birth through age 7, of any 
    individual described in paragraph (1).
    ``(b) Eligibility for Certain Other Participants.--
        ``(1) In general.--Family members of eligible participants 
    described in subsection (a) may participate in activities and 
    services provided under this subpart, when appropriate to serve the 
    purpose of this subpart.
        ``(2) Special rule.--Any family participating in a program 
    assisted under this subpart that becomes ineligible to participate 
    as a result of one or more members of the family becoming 
    ineligible to participate may continue to participate in the 
    program until all members of the family become ineligible to 
    participate, which--
            ``(A) in the case of a family in which ineligibility was 
        due to the child or children of the family attaining the age of 
        8, shall be in 2 years or when the parent or parents become 
        ineligible due to educational advancement, whichever occurs 
        first; and
            ``(B) in the case of a family in which ineligibility was 
        due to the educational advancement of the parent or parents of 
        the family, shall be when all children in the family attain the 
        age of 8.
        ``(3) Children 8 years of age or older.--If an Even Start 
    program assisted under this subpart collaborates with a program 
    under part A, and funds received under the part A program 
    contribute to paying the cost of providing programs under this 
    subpart to children 8 years of age or older, the Even Start program 
    may, notwithstanding subsection (a)(2), permit the participation of 
    children 8 years of age or older if the focus of the program 
    continues to remain on families with young children.

``SEC. 1237. APPLICATIONS.

    ``(a) Submission.--To be eligible to receive a subgrant under this 
subpart, an eligible entity shall submit an application to the State 
educational agency in such form and containing or accompanied by such 
information as the State educational agency shall require.
    ``(b) Required Documentation.--Each application shall include 
documentation, satisfactory to the State educational agency, that the 
eligible entity has the qualified personnel needed--
        ``(1) to develop, administer, and implement an Even Start 
    program under this subpart; and
        ``(2) to provide access to the special training necessary to 
    prepare staff for the program, which may be offered by an eligible 
    organization.
    ``(c) Plan.--
        ``(1) In general.--The application shall also include a plan of 
    operation and continuous improvement for the program, that 
    includes--
            ``(A) a description of the program objectives, strategies 
        to meet those objectives, and how those strategies and 
        objectives are consistent with the program indicators 
        established by the State;
            ``(B) a description of the activities and services that 
        will be provided under the program, including a description of 
        how the program will incorporate the program elements required 
        by section 1235;
            ``(C) a description of the population to be served and an 
        estimate of the number of participants to be served;
            ``(D) as appropriate, a description of the applicant's 
        collaborative efforts with institutions of higher education, 
        community-based organizations, the State educational agency, 
        private elementary schools, or other eligible organizations in 
        carrying out the program for which assistance is sought;
            ``(E) a statement of the methods that will be used--
                ``(i) to ensure that the programs will serve families 
            most in need of the activities and services provided by 
            this subpart;
                ``(ii) to provide services under this subpart to 
            individuals with special needs, such as individuals with 
            limited English proficiency and individuals with 
            disabilities; and
                ``(iii) to encourage participants to remain in the 
            program for a time sufficient to meet the program's 
            purpose;
            ``(F) a description of how the plan is integrated with 
        other programs under this Act or other Acts, as appropriate; 
        and
            ``(G) a description of how the plan provides for rigorous 
        and objective evaluation of progress toward the program 
        objectives described in subparagraph (A) and for continuing use 
        of evaluation data for program improvement.
        ``(2) Duration of the plan.--Each plan submitted under 
    paragraph (1) shall--
            ``(A) remain in effect for the duration of the eligible 
        entity's participation under this subpart; and
            ``(B) be periodically reviewed and revised by the eligible 
        entity as necessary.
    ``(d) Consolidated Application.--The plan described in subsection 
(c)(1) may be submitted as part of a consolidated application under 
section 9305.

``SEC. 1238. AWARD OF SUBGRANTS.

    ``(a) Selection Process.--
        ``(1) In general.--The State educational agency shall establish 
    a review panel in accordance with paragraph (3) that will approve 
    applications that--
            ``(A) are most likely to be successful in--
                ``(i) meeting the purpose of this subpart; and
                ``(ii) effectively implementing the program elements 
            required under section 1235;
            ``(B) demonstrate that the area to be served by the program 
        has a high percentage or a large number of children and 
        families who are in need of those services as indicated by high 
        levels of poverty, illiteracy, unemployment, limited English 
        proficiency, or other need-related indicators, such as a high 
        percentage of children to be served by the program who reside 
        in a school attendance area served by a local educational 
        agency eligible for participation in programs under part A, a 
        high number or percentage of parents who have been victims of 
        domestic violence, or a high number or percentage of parents 
        who are receiving assistance under a State program funded under 
        part A of title IV of the Social Security Act (42 U.S.C. 601 et 
        seq.);
            ``(C) provide services for at least a 3-year age range, 
        which may begin at birth;
            ``(D) demonstrate the greatest possible cooperation and 
        coordination between a variety of relevant service providers in 
        all phases of the program;
            ``(E) include cost-effective budgets, given the scope of 
        the application;
            ``(F) demonstrate the applicant's ability to provide the 
        non-Federal share required by section 1234(b);
            ``(G) are representative of urban and rural regions of the 
        State; and
            ``(H) show the greatest promise for providing models that 
        may be adopted by other family literacy projects and other 
        local educational agencies.
        ``(2) Priority for subgrants.--The State educational agency 
    shall give priority for subgrants under this subsection to 
    applications that--
            ``(A) target services primarily to families described in 
        paragraph (1)(B); or
            ``(B) are located in areas designated as empowerment zones 
        or enterprise communities.
        ``(3) Review panel.--A review panel shall consist of at least 
    three members, including one early childhood professional, one 
    adult education professional, and one individual with expertise in 
    family literacy programs, and may include other individuals, such 
    as one or more of the following:
            ``(A) A representative of a parent-child education 
        organization.
            ``(B) A representative of a community-based literacy 
        organization.
            ``(C) A member of a local board of education.
            ``(D) A representative of business and industry with a 
        commitment to education.
            ``(E) An individual who has been involved in the 
        implementation of programs under this title in the State.
    ``(b) Duration.--
        ``(1) In general.--Subgrants under this subpart may be awarded 
    for a period not to exceed 4 years.
        ``(2) Startup period.--The State educational agency may provide 
    subgrant funds to an eligible recipient, at the recipient's 
    request, for a 3- to 6-month start-up period during the first year 
    of the 4-year grant period, which may include staff recruitment and 
    training, and the coordination of services, before requiring full 
    implementation of the program.
        ``(3) Continuing eligibility.--In awarding subgrant funds to 
    continue a program under this subpart after the first year, the 
    State educational agency shall review the progress of each eligible 
    entity in meeting the objectives of the program referred to in 
    section 1237(c)(1)(A) and shall evaluate the program based on the 
    indicators of program quality developed by the State under section 
    1240.
        ``(4) Insufficient progress.--The State educational agency may 
    refuse to award subgrant funds to an eligible entity if the agency 
    finds that the eligible entity has not sufficiently improved the 
    performance of the program, as evaluated based on the indicators of 
    program quality developed by the State under section 1240, after--
            ``(A) providing technical assistance to the eligible 
        entity; and
            ``(B) affording the eligible entity notice and an 
        opportunity for a hearing.
        ``(5) Grant renewal.--(A) An eligible entity that has 
    previously received a subgrant under this subpart may reapply under 
    this subpart for additional subgrants.
        ``(B) The Federal share of any subgrant renewed under 
    subparagraph (A) shall be limited in accordance with section 
    1234(b).

``SEC. 1239. EVALUATION.

    ``From funds reserved under section 1232(b)(1), the Secretary shall 
provide for an independent evaluation of programs assisted under this 
subpart--
        ``(1) to determine the performance and effectiveness of 
    programs assisted under this subpart;
        ``(2) to identify effective Even Start programs assisted under 
    this subpart that can be duplicated and used in providing technical 
    assistance to Federal, State, and local programs; and
        ``(3) to provide State educational agencies and eligible 
    entities receiving a subgrant under this subpart, directly or 
    through a grant or contract with an organization with experience in 
    the development and operation of successful family literacy 
    services, technical assistance to ensure that local evaluations 
    undertaken under section 1235(15) provide accurate information on 
    the effectiveness of programs assisted under this subpart.

``SEC. 1240. INDICATORS OF PROGRAM QUALITY.

    ``Each State educational agency receiving funds under this subpart 
shall develop, based on the best available research and evaluation 
data, indicators of program quality for programs assisted under this 
subpart. The indicators shall be used to monitor, evaluate, and improve 
those programs within the State. The indicators shall include the 
following:
        ``(1) With respect to eligible participants in a program who 
    are adults--
            ``(A) achievement in the areas of reading, writing, 
        English-language acquisition, problem solving, and numeracy;
            ``(B) receipt of a secondary school diploma or a general 
        equivalency diploma (GED);
            ``(C) entry into a postsecondary school, job retraining 
        program, or employment or career advancement, including the 
        military; and
            ``(D) such other indicators as the State may develop.
        ``(2) With respect to eligible participants in a program who 
    are children--
            ``(A) improvement in ability to read on grade level or 
        reading readiness;
            ``(B) school attendance;
            ``(C) grade retention and promotion; and
            ``(D) such other indicators as the State may develop.

``SEC. 1241. RESEARCH.

    ``(a) In General.--The Secretary shall carry out, through grant or 
contract, research into the components of successful family literacy 
services, in order to--
        ``(1) improve the quality of existing programs assisted under 
    this subpart or other family literacy programs carried out under 
    this Act or the Adult Education and Family Literacy Act; and
        ``(2) develop models for new programs to be carried out under 
    this Act or the Adult Education and Family Literacy Act.
    ``(b) Scientifically Based Research on Family Literacy.--
        ``(1) In general.--From amounts reserved under section 
    1232(b)(2), the National Institute for Literacy, in consultation 
    with the Secretary, shall carry out research that--
            ``(A) is scientifically based reading research; and
            ``(B) determines--
                ``(i) the most effective ways of improving the literacy 
            skills of adults with reading difficulties; and
                ``(ii) how family literacy services can best provide 
            parents with the knowledge and skills the parents need to 
            support their children's literacy development.
        ``(2) Use of expert entity.--The National Institute for 
    Literacy, in consultation with the Secretary, shall carry out the 
    research under paragraph (1) through an entity, including a Federal 
    agency, that has expertise in carrying out longitudinal studies of 
    the development of literacy skills in children and has developed 
    effective interventions to help children with reading difficulties.
    ``(c) Dissemination.--The National Institute for Literacy shall 
disseminate, pursuant to section 1207, the results of the research 
described in subsections (a) and (b) to State educational agencies and 
recipients of subgrants under this subpart.

``SEC. 1242. CONSTRUCTION.

    ``Nothing in this subpart shall be construed to prohibit a 
recipient of funds under this subpart from serving students 
participating in Even Start simultaneously with students with similar 
educational needs, in the same educational settings where appropriate.

        ``Subpart 4--Improving Literacy Through School Libraries

``SEC. 1251. IMPROVING LITERACY THROUGH SCHOOL LIBRARIES.

    ``(a) Purposes.--The purpose of this subpart is to improve literacy 
skills and academic achievement of students by providing students with 
increased access to up-to-date school library materials, a well-
equipped, technologically advanced school library media center, and 
well-trained, professionally certified school library media 
specialists.
    ``(b) Reservation.--From the funds appropriated under section 
1002(b)(4) for a fiscal year, the Secretary shall reserve--
        ``(1) one-half of 1 percent to award assistance under this 
    section to the Bureau of Indian Affairs to carry out activities 
    consistent with the purpose of this subpart; and
        ``(2) one-half of 1 percent to award assistance under this 
    section to the outlying areas according to their respective needs 
    for assistance under this subpart.
    ``(c) Grants.--
        ``(1) Competitive grants to eligible local educational 
    agencies.--If the amount of funds appropriated under section 
    1002(b)(4) for a fiscal year is less than $100,000,000, then the 
    Secretary shall award grants, on a competitive basis, to eligible 
    local educational agencies under subsection (e).
        ``(2) Formula grants to states.--If the amount of funds 
    appropriated under section 1002(b)(4) for a fiscal year equals or 
    exceeds $100,000,000, then the Secretary shall award grants to 
    State educational agencies from allotments under subsection (d).
        ``(3) Definition of eligible local educational agency.--In this 
    section the term `eligible local educational agency' means--
            ``(A) in the case of a local educational agency receiving 
        assistance made available under paragraph (1), a local 
        educational agency in which 20 percent of the students served 
        by the local educational agency are from families with incomes 
        below the poverty line; and
            ``(B) in the case of a local educational agency receiving 
        assistance from State allocations made available under 
        paragraph (2), a local educational agency in which--
                ``(i) 15 percent of the students who are served by the 
            local educational agency are from such families; or
                ``(ii) the percentage of students from such families 
            who are served by the local educational agency is greater 
            than the statewide percentage of children from such 
            families.
    ``(d) State Grants.--
        ``(1) Allotments.--From funds made available under subsection 
    (c)(2) and not reserved under subsections (b) and (j) for a fiscal 
    year, the Secretary shall allot to each State educational agency 
    having an application approved under subsection (f)(1) an amount 
    that bears the same relation to the funds as the amount the State 
    educational agency received under part A for the preceding fiscal 
    year bears to the amount all such State educational agencies 
    received under part A for the preceding fiscal year, to increase 
    literacy and reading skills by improving school libraries.
        ``(2) Competitive grants to eligible local educational 
    agencies.--Each State educational agency receiving an allotment 
    under paragraph (1) for a fiscal year--
            ``(A) may reserve not more than 3 percent of the allotted 
        funds to provide technical assistance, disseminate information 
        about school library media programs that are effective and 
        based on scientifically based research, and pay administrative 
        costs related to activities under this section; and
            ``(B) shall use the allotted funds that remain after making 
        the reservation under subparagraph (A) to award grants, for a 
        period of 1 year, on a competitive basis, to eligible local 
        educational agencies in the State that have an application 
        approved under subsection (f)(2) for activities described in 
        subsection (g).
        ``(3) Reallotment.--If a State educational agency does not 
    apply for an allotment under this section for any fiscal year, or 
    if the State educational agency's application is not approved, the 
    Secretary shall reallot the amount of the State educational 
    agency's allotment to the remaining State educational agencies in 
    accordance with paragraph (1).
    ``(e) Direct Competitive Grants to Eligible Local Educational 
Agencies.--
        ``(1) In general.--From amounts made available under subsection 
    (c)(1) and not reserved under subsections (b) and (j) for a fiscal 
    year, the Secretary shall award grants, on a competitive basis, to 
    eligible local educational agencies that have applications approved 
    under subsection (f)(2) for activities described in subsection (g).
        ``(2) Duration.--The Secretary shall award grants under this 
    subsection for a period of 1 year.
        ``(3) Distribution.--The Secretary shall ensure that grants 
    under this subsection are equitably distributed among the different 
    geographic regions of the United States, and among local 
    educational agencies serving urban and rural areas.
    ``(f) Applications.--
        ``(1) State educational agency.--Each State educational agency 
    desiring assistance under this section shall submit to the 
    Secretary an application at such time, in such manner, and 
    containing such information as the Secretary shall require. The 
    application shall contain a description of--
            ``(A) how the State educational agency will assist eligible 
        local educational agencies in meeting the requirements of this 
        section and in using scientifically based research to implement 
        effective school library media programs; and
            ``(B) the standards and techniques the State educational 
        agency will use to evaluate the quality and impact of 
        activities carried out under this section by eligible local 
        educational agencies to determine the need for technical 
        assistance and whether to continue to provide additional 
        funding to the agencies under this section.
        ``(2) Eligible local educational agency.--Each eligible local 
    educational agency desiring assistance under this section shall 
    submit to the Secretary or State educational agency, as 
    appropriate, an application at such time, in such manner, and 
    containing such information as the Secretary or State educational 
    agency, respectively, shall require. The application shall contain 
    a description of--
            ``(A) a needs assessment relating to the need for school 
        library media improvement, based on the age and condition of 
        school library media resources, including book collections, 
        access of school library media centers to advanced technology, 
        and the availability of well-trained, professionally certified 
        school library media specialists, in schools served by the 
        eligible local educational agency;
            ``(B) the manner in which the eligible local educational 
        agency will use the funds made available through the grant to 
        carry out the activities described in subsection (g);
            ``(C) how the eligible local educational agency will 
        extensively involve school library media specialists, teachers, 
        administrators, and parents in the activities assisted under 
        this section, and the manner in which the eligible local 
        educational agency will carry out the activities described in 
        subsection (g) using programs and materials that are grounded 
        in scientifically based research;
            ``(D) the manner in which the eligible local educational 
        agency will effectively coordinate the funds and activities 
        provided under this section with Federal, State, and local 
        funds and activities under this subpart and other literacy, 
        library, technology, and professional development funds and 
        activities; and
            ``(E) the manner in which the eligible local educational 
        agency will collect and analyze data on the quality and impact 
        of activities carried out under this section by schools served 
        by the eligible local educational agency.
    ``(g) Local Activities.--Funds under this section may be used to--
        ``(1) acquire up-to-date school library media resources, 
    including books;
        ``(2) acquire and use advanced technology, incorporated into 
    the curricula of the school, to develop and enhance the information 
    literacy, information retrieval, and critical thinking skills of 
    students;
        ``(3) facilitate Internet links and other resource-sharing 
    networks among schools and school library media centers, and public 
    and academic libraries, where possible;
        ``(4) provide professional development described in section 
    1222(d)(2) for school library media specialists, and activities 
    that foster increased collaboration between school library media 
    specialists, teachers, and administrators; and
        ``(5) provide students with access to school libraries during 
    nonschool hours, including the hours before and after school, 
    during weekends, and during summer vacation periods.
    ``(h) Accountability and Reporting.--
        ``(1) Local reports.--Each eligible local educational agency 
    that receives funds under this section for a fiscal year shall 
    report to the Secretary or State educational agency, as 
    appropriate, on how the funding was used and the extent to which 
    the availability of, the access to, and the use of, up-to-date 
    school library media resources in the elementary schools and 
    secondary schools served by the eligible local educational agency 
    was increased.
        ``(2) State report.--Each State educational agency that 
    receives funds under this section shall compile the reports 
    received under paragraph (1) and submit the compiled reports to the 
    Secretary.
    ``(i) Supplement, Not Supplant.--Funds made available under this 
section shall be used to supplement, and not supplant, other Federal, 
State, and local funds expended to carry out activities relating to 
library, technology, or professional development activities.
    ``(j) National Activities.--
        ``(1) Evaluations.--From the funds appropriated under section 
    1002(b)(4) for each fiscal year, the Secretary shall reserve not 
    more than 1 percent for annual, independent, national evaluations 
    of the activities assisted under this section and their impact on 
    improving the reading skills of students. The evaluations shall be 
    conducted not later than 3 years after the date of enactment of the 
    No Child Left Behind Act of 2001, and biennially thereafter.
        ``(2) Report to congress.--The Secretary shall transmit the 
    State reports received under subsection (h)(2) and the evaluations 
    conducted under paragraph (1) to the Committee on Health, 
    Education, Labor, and Pensions of the Senate and the Committee on 
    Education and the Workforce of the House of Representatives.

               ``PART C--EDUCATION OF MIGRATORY CHILDREN

``SEC. 1301. PROGRAM PURPOSE.

    ``It is the purpose of this part to assist States to--
        ``(1) support high-quality and comprehensive educational 
    programs for migratory children to help reduce the educational 
    disruptions and other problems that result from repeated moves;
        ``(2) ensure that migratory children who move among the States 
    are not penalized in any manner by disparities among the States in 
    curriculum, graduation requirements, and State academic content and 
    student academic achievement standards;
        ``(3) ensure that migratory children are provided with 
    appropriate educational services (including supportive services) 
    that address their special needs in a coordinated and efficient 
    manner;
        ``(4) ensure that migratory children receive full and 
    appropriate opportunities to meet the same challenging State 
    academic content and student academic achievement standards that 
    all children are expected to meet;
        ``(5) design programs to help migratory children overcome 
    educational disruption, cultural and language barriers, social 
    isolation, various health-related problems, and other factors that 
    inhibit the ability of such children to do well in school, and to 
    prepare such children to make a successful transition to 
    postsecondary education or employment; and
        ``(6) ensure that migratory children benefit from State and 
    local systemic reforms.

``SEC. 1302. PROGRAM AUTHORIZED.

    ``In order to carry out the purpose of this part, the Secretary 
shall make grants to State educational agencies, or combinations of 
such agencies, to establish or improve, directly or through local 
operating agencies, programs of education for migratory children in 
accordance with this part.

``SEC. 1303. STATE ALLOCATIONS.

    ``(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 3 through 21 who reside in the State full time and the 
        full-time equivalent of the estimated number of migratory 
        children aged 3 through 21 who reside in the State part time, 
        as determined in accordance with subsection (e); 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 per-pupil expenditure 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.
    ``(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 who would be counted under subsection (a)(1)(A) if such 
    subsection applied to 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) for any 
    fiscal year 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, then the percentage described 
    in paragraph (1)(A) that is used for the Commonwealth of Puerto 
    Rico for the fiscal year for which the determination is made shall 
    be the greater of the percentage in paragraph (1)(A) for such 
    fiscal year or the percentage used for the preceding fiscal year.
    ``(c) Ratable Reductions; Reallocations.--
        ``(1) In general.--(A) If, after the Secretary reserves funds 
    under section 1308(c), the amount appropriated to carry out this 
    part for any fiscal year is insufficient to pay in full the amounts 
    for which all States are eligible, the Secretary shall ratably 
    reduce each such amount.
        ``(B) If additional funds become available for making such 
    payments for any fiscal year, the Secretary shall allocate such 
    funds to States in amounts that the Secretary determines will best 
    carry out the purpose of this part.
        ``(2) Special rule.--(A) The Secretary shall further reduce the 
    amount of any grant to a State under this part for any fiscal year 
    if the Secretary determines, based on available information on the 
    numbers and needs of migratory children in the State and the 
    program proposed by the State to address such needs, that such 
    amount exceeds the amount required under section 1304.
        ``(B) The Secretary shall reallocate such excess funds to other 
    States whose grants under this part would otherwise be insufficient 
    to provide an appropriate level of services to migratory children, 
    in such amounts as the Secretary determines are appropriate.
    ``(d) Consortium Arrangements.--
        ``(1) In general.--In the case of a State that receives a grant 
    of $1,000,000 or less under this section, the Secretary shall 
    consult with the State educational agency to determine whether 
    consortium arrangements with another State or other appropriate 
    entity would result in delivery of services in a more effective and 
    efficient manner.
        ``(2) Proposals.--Any State, regardless of the amount of such 
    State's allocation, may submit a consortium arrangement to the 
    Secretary for approval.
        ``(3) Approval.--The Secretary shall approve a consortium 
    arrangement under paragraph (1) or (2) if the proposal demonstrates 
    that the arrangement will--
            ``(A) reduce administrative costs or program function costs 
        for State programs; and
            ``(B) make more funds available for direct services to add 
        substantially to the welfare or educational attainment of 
        children to be served under this part.
    ``(e) Determining Numbers of Eligible Children.--In order to 
determine the estimated number of migratory children residing in each 
State for purposes of this section, the Secretary shall--
        ``(1) use such information as the Secretary finds most 
    accurately reflects the actual number of migratory children;
        ``(2) develop and implement a procedure for more accurately 
    reflecting cost factors for different types of summer and 
    intersession program designs;
        ``(3) adjust the full-time equivalent number of migratory 
    children who reside in each State to take into account--
            ``(A) the special needs of those children participating in 
        special programs provided under this part that operate during 
        the summer and intersession periods; and
            ``(B) the additional costs of operating such programs; and
        ``(4) conduct an analysis of the options for adjusting the 
    formula so as to better direct services to the child whose 
    education has been interrupted.

``SEC. 1304. STATE APPLICATIONS; SERVICES.

    ``(a) Application Required.--Any State desiring to receive a grant 
under this part for any fiscal year shall submit an application to the 
Secretary at such time and in such manner as the Secretary may require.
    ``(b) Program Information.--Each such application shall include--
        ``(1) a description of how, in planning, implementing, and 
    evaluating programs and projects assisted under this part, the 
    State and its local operating agencies will ensure that the special 
    educational needs of migratory children, including preschool 
    migratory children, are identified and 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 
        language instruction educational programs under part A or B 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;
        ``(2) a description of the steps the State is taking to provide 
    all migratory students with the opportunity to meet the same 
    challenging State academic content standards and challenging State 
    student academic achievement standards that all children are 
    expected to meet;
        ``(3) a description of how the State will use funds received 
    under this part to promote interstate and intrastate coordination 
    of services for migratory children, including how, consistent with 
    procedures the Secretary may require, the State will provide for 
    educational continuity through the timely transfer of pertinent 
    school records, including information on health, when children move 
    from one school to another, whether or not such move occurs during 
    the regular school year;
        ``(4) a description of the State's priorities for the use of 
    funds received under this part, and how such priorities relate to 
    the State's assessment of needs for services in the State;
        ``(5) a description of how the State will determine the amount 
    of any subgrants the State will award to local operating agencies, 
    taking into account the numbers and needs of migratory children, 
    the requirements of subsection (d), and the availability of funds 
    from other Federal, State, and local programs;
        ``(6) such budgetary and other information as the Secretary may 
    require; and
        ``(7) a description of how the State will encourage programs 
    and projects assisted under this part to offer family literacy 
    services if the program or project serves a substantial number of 
    migratory children who have parents who do not have a high school 
    diploma or its recognized equivalent or who have low levels of 
    literacy.
    ``(c) Assurances.--Each such application shall also include 
assurances, satisfactory to the Secretary, that--
        ``(1) funds received under this part will be used only--
            ``(A) for programs and projects, including the acquisition 
        of equipment, in accordance with section 1306; and
            ``(B) to coordinate such programs and projects with similar 
        programs and projects within the State and in other States, as 
        well as with other Federal programs that can benefit migratory 
        children and their families;
        ``(2) such programs and projects will be carried out in a 
    manner consistent with the objectives of section 1114, subsections 
    (b) and (d) of section 1115, subsections (b) and (c) of section 
    1120A, and part I;
        ``(3) in the planning and operation of programs and projects at 
    both the State and local agency operating level, there is 
    consultation with parent advisory councils for programs of 1 school 
    year in duration, and that all such programs and projects are 
    carried out--
            ``(A) in a manner that provides for the same parental 
        involvement as is required for programs and projects under 
        section 1118, unless extraordinary circumstances make such 
        provision impractical; and
            ``(B) in a format and language understandable to the 
        parents;
        ``(4) in planning and carrying out such programs and projects, 
    there has been, and will be, adequate provision for addressing the 
    unmet education needs of preschool migratory children;
        ``(5) the effectiveness of such programs and projects will be 
    determined, where feasible, using the same approaches and standards 
    that will be used to assess the performance of students, schools, 
    and local educational agencies under part A;
        ``(6) to the extent feasible, such programs and projects will 
    provide for--
            ``(A) advocacy and outreach activities for migratory 
        children and their families, including informing such children 
        and families of, or helping such children and families gain 
        access to, other education, health, nutrition, and social 
        services;
            ``(B) professional development programs, including 
        mentoring, for teachers and other program personnel;
            ``(C) family literacy programs, including such programs 
        that use models developed under Even Start;
            ``(D) the integration of information technology into 
        educational and related programs; and
            ``(E) programs to facilitate the transition of secondary 
        school students to postsecondary education or employment; and
        ``(7) the State will assist the Secretary in determining the 
    number of migratory children under paragraphs (1)(A) and (2)(B)(i) 
    of section 1303(a), through such procedures as the Secretary may 
    require.
    ``(d) Priority for Services.--In providing services with funds 
received under this part, each recipient of such funds shall give 
priority to migratory children who are failing, or most at risk of 
failing, to meet the State's challenging State academic content 
standards and challenging State student academic achievement standards, 
and whose education has been interrupted during the regular school 
year.
    ``(e) Continuation of Services.--Notwithstanding any other 
provision of this part--
        ``(1) a child who ceases to be a migratory child during a 
    school term shall be eligible for services until the end of such 
    term;
        ``(2) a child who is no longer a migratory child may continue 
    to receive services for 1 additional school year, but only if 
    comparable services are not available through other programs; and
        ``(3) secondary school students who were eligible for services 
    in secondary school may continue to be served through credit 
    accrual programs until graduation.

``SEC. 1305. SECRETARIAL APPROVAL; PEER REVIEW.

    ``(a) Secretarial Approval.--The Secretary shall approve each State 
application that meets the requirements of this part.
    ``(b) Peer Review.--The Secretary may review any such application 
with the assistance and advice of State officials and other individuals 
with relevant expertise.

``SEC. 1306. COMPREHENSIVE NEEDS ASSESSMENT AND SERVICE-DELIVERY PLAN; 
              AUTHORIZED ACTIVITIES.

    ``(a) Comprehensive Plan.--
        ``(1) In general.--Each State that receives assistance under 
    this part shall ensure that the State and its local operating 
    agencies identify and address the special educational needs of 
    migratory children in accordance with a comprehensive State plan 
    that--
            ``(A) is integrated with other programs under this Act or 
        other Acts, as appropriate;
            ``(B) may be submitted as a part of a consolidated 
        application under section 9302, if--
                ``(i) the special needs of migratory children are 
            specifically addressed in the comprehensive State plan;
                ``(ii) the comprehensive State plan is developed in 
            collaboration with parents of migratory children; and
                ``(iii) the comprehensive State plan is not used to 
            supplant State efforts regarding, or administrative funding 
            for, this part;
            ``(C) provides that migratory children will have an 
        opportunity to meet the same challenging State academic content 
        standards and challenging State student academic achievement 
        standards that all children are expected to meet;
            ``(D) specifies measurable program goals and outcomes;
            ``(E) encompasses the full range of services that are 
        available for migratory children from appropriate local, State, 
        and Federal educational programs;
            ``(F) is the product of joint planning among such local, 
        State, and Federal programs, including programs under part A, 
        early childhood programs, and language instruction educational 
        programs under part A or B of title III; and
            ``(G) provides for the integration of services available 
        under this part with services provided by such other programs.
        ``(2) Duration of the plan.--Each such comprehensive 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) Authorized Activities.--
        ``(1) Flexibility.--In implementing the comprehensive plan 
    described in subsection (a), each State educational agency, where 
    applicable 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 first shall 
    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 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).
        ``(3) 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.
        ``(4) Special rule.--Notwithstanding section 1114, a school 
    that receives funds under this part shall continue to address the 
    identified needs described in paragraph (1), and shall meet the 
    special educational needs of migratory children before using funds 
    under this part for schoolwide programs under section 1114.

``SEC. 1307. BYPASS.

    ``The Secretary may use all or part of any State's allocation under 
this part to make arrangements with any public or private nonprofit 
agency to carry out the purpose of this part in such State if the 
Secretary determines that--
        ``(1) the State is unable or unwilling to conduct educational 
    programs for migratory children;
        ``(2) such arrangements would result in more efficient and 
    economic administration of such programs; or
        ``(3) such arrangements would add substantially to the welfare 
    or educational attainment of such children.

``SEC. 1308. COORDINATION OF MIGRANT EDUCATION ACTIVITIES.

    ``(a) Improvement of Coordination.--
        ``(1) In general.--The Secretary, in consultation with the 
    States, may make grants to, or enter into contracts with, State 
    educational agencies, local educational agencies, institutions of 
    higher education, and other public and private nonprofit entities 
    to improve the interstate and intrastate coordination among such 
    agencies' educational programs, including the establishment or 
    improvement of programs for credit accrual and exchange, available 
    to migratory students.
        ``(2) Duration.--Grants under this subsection may be awarded 
    for not more than 5 years.
    ``(b) Student Records.--
        ``(1) Assistance.--The Secretary shall assist States in 
    developing effective methods for the electronic transfer of student 
    records and in determining the number of migratory children in each 
    State.
        ``(2) Information system.--
            ``(A) In general.--The Secretary, in consultation with the 
        States, shall ensure the linkage of migrant student record 
        systems for the purpose of electronically exchanging, among the 
        States, health and educational information regarding all 
        migratory students. The Secretary shall ensure such linkage 
        occurs in a cost-effective manner, utilizing systems used by 
        the States prior to, or developed after, the date of enactment 
        of the No Child Left Behind Act of 2001, and shall determine 
        the minimum data elements that each State receiving funds under 
        this part shall collect and maintain. Such elements may 
        include--
                ``(i) immunization records and other health 
            information;
                ``(ii) elementary and secondary academic history 
            (including partial credit), credit accrual, and results 
            from State assessments required under section 1111(b);
                ``(iii) other academic information essential to 
            ensuring that migratory children achieve to high standards; 
            and
                ``(iv) eligibility for services under the Individuals 
            with Disabilities Education Act.
            ``(B) Notice and comment.--After consulting with the States 
        under subparagraph (A), the Secretary shall publish a notice in 
        the Federal Register seeking public comment on the proposed 
        data elements that each State receiving funds under this part 
        shall be required to collect for purposes of electronic 
        transfer of migratory student information and the requirements 
        that States shall meet for immediate electronic access to such 
        information. Such publication shall occur not later than 120 
        days after the date of enactment of the No Child Left Behind 
        Act of 2001.
        ``(3) 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 
    educational agency 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.
        ``(4) Report to congress.--
            ``(A) In general.--Not later than April 30, 2003, the 
        Secretary shall report to the Committee on Health, Education, 
        Labor, and Pensions of the Senate and the Committee on 
        Education and the Workforce of the House of Representatives the 
        Secretary's findings and recommendations regarding the 
        maintenance and transfer of health and educational information 
        for migratory students by the States.
            ``(B) Required contents.--The Secretary shall include in 
        such report--
                ``(i) a review of the progress of States in developing 
            and linking electronic records transfer systems;
                ``(ii) recommendations for the development and linkage 
            of such systems; and
                ``(iii) recommendations for measures that may be taken 
            to ensure the continuity of services provided for migratory 
            students.
    ``(c) Availability of Funds.--For the purpose of carrying out this 
section in any fiscal year, the Secretary shall reserve not more than 
$10,000,000 of the amount appropriated to carry out this part for such 
year.
    ``(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.
    ``(e) Data Collection.--The Secretary shall direct the National 
Center for Education Statistics to collect data on migratory children.

``SEC. 1309. DEFINITIONS.

    ``As used in this part:
        ``(1) Local operating agency.--The term `local operating 
    agency' means--
            ``(A) a local educational agency to which a State 
        educational agency makes a subgrant under this part;
            ``(B) a public or nonprofit private agency with which a 
        State educational agency or the Secretary makes an arrangement 
        to carry out a project under this part; or
            ``(C) a State educational agency, if the State educational 
        agency operates the State's migrant education program or 
        projects directly.
        ``(2) Migratory child.--The term `migratory child' means a 
    child who is, or whose parent or spouse is, a migratory 
    agricultural worker, including a migratory dairy worker, or a 
    migratory fisher, and who, in the preceding 36 months, in order to 
    obtain, or accompany such parent or spouse, in order to obtain, 
    temporary or seasonal employment in agricultural or fishing work--
            ``(A) has moved from one school district to another;
            ``(B) in a State that is comprised of a single school 
        district, has moved from one administrative area to another 
        within such district; or
            ``(C) resides in a school district of more than 15,000 
        square miles, and migrates a distance of 20 miles or more to a 
        temporary residence to engage in a fishing activity.

 ``PART D--PREVENTION AND INTERVENTION PROGRAMS FOR CHILDREN AND YOUTH 
               WHO ARE NEGLECTED, DELINQUENT, OR AT-RISK

``SEC. 1401. PURPOSE AND PROGRAM AUTHORIZATION.

    ``(a) Purpose.--It is the purpose of this part--
        ``(1) to improve educational services for children and youth in 
    local and State institutions for neglected or delinquent children 
    and youth so that such children and youth have the opportunity to 
    meet the same challenging State academic content standards and 
    challenging State student academic achievement standards that all 
    children in the State are expected to meet;
        ``(2) to provide such children and youth with the services 
    needed to make a successful transition from institutionalization to 
    further schooling or employment; and
        ``(3) to prevent at-risk youth from dropping out of school, and 
    to provide dropouts, and children and youth returning from 
    correctional facilities or institutions for neglected or delinquent 
    children and youth, with a support system to ensure their continued 
    education.
    ``(b) Program Authorized.--In order to carry out the purpose of 
this part and from amounts appropriated under section 1002(d), the 
Secretary shall make grants to State educational agencies to enable 
such agencies to award subgrants to State agencies and local 
educational agencies to establish or improve programs of education for 
neglected, delinquent, or at-risk children and youth.

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

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

                   ``Subpart 1--State Agency Programs

``SEC. 1411. ELIGIBILITY.

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

``SEC. 1412. ALLOCATION OF FUNDS.

    ``(a) Subgrants to State Agencies.--
        ``(1) In general.--Each State agency described in section 1411 
    (other than an agency in the Commonwealth of Puerto Rico) is 
    eligible to receive a subgrant under this subpart, for each fiscal 
    year, in an amount equal to the product of--
            ``(A) the number of neglected or delinquent children and 
        youth described in section 1411 who--
                ``(i) are enrolled for at least 15 hours per week in 
            education programs in adult correctional institutions; and
                ``(ii) are enrolled for at least 20 hours per week--

                    ``(I) in education programs in institutions for 
                neglected or delinquent children and youth; or
                    ``(II) in community day programs for neglected or 
                delinquent children and youth; and

            ``(B) 40 percent of the average per-pupil expenditure in 
        the State, except that the amount determined under this 
        subparagraph shall not be less than 32 percent, nor more than 
        48 percent, of the average per-pupil expenditure in the United 
        States.
        ``(2) Special rule.--The number of neglected or delinquent 
    children and youth determined under paragraph (1) shall--
            ``(A) be determined by the State agency by a deadline set 
        by the Secretary, except that no State agency shall be required 
        to determine the number of such children and youth on a 
        specific date set by the Secretary; and
            ``(B) be adjusted, as the Secretary determines is 
        appropriate, to reflect the relative length of such agency's 
        annual programs.
    ``(b) Subgrants to State Agencies in Puerto Rico.--
        ``(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 subpart 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 subpart than it received under this 
    subpart for the preceding fiscal year, then the percentage 
    described in paragraph (1)(A) that is used for the Commonwealth of 
    Puerto Rico for the fiscal year for which the determination is made 
    shall be the greater of--
            ``(A) the percentage in paragraph (1)(A) for such fiscal 
        year; or
            ``(B) the percentage used for the preceding fiscal year.
    ``(c) Ratable Reductions in Case of Insufficient Appropriations.--
If the amount appropriated for any fiscal year for subgrants under 
subsections (a) and (b) is insufficient to pay the full amount for 
which all State agencies are eligible under such subsections, the 
Secretary shall ratably reduce each such amount.

``SEC. 1413. STATE REALLOCATION OF FUNDS.

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

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

    ``(a) State Plan.--
        ``(1) In general.--Each State educational agency that desires 
    to receive a grant under this subpart shall submit, for approval by 
    the Secretary, a plan--
            ``(A) for meeting the educational needs of neglected, 
        delinquent, and at-risk children and youth;
            ``(B) for assisting in the transition of children and youth 
        from correctional facilities to locally operated programs; and
            ``(C) that is integrated with other programs under this Act 
        or other Acts, as appropriate.
        ``(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 the 
        academic, vocational, and technical skills of children in the 
        program;
            ``(B) provide that, to the extent feasible, such children 
        will have the same opportunities to achieve as such children 
        would have if such children were in the schools of local 
        educational agencies in the State; and
            ``(C) contain an assurance that the State educational 
        agency will--
                ``(i) ensure that programs assisted under this subpart 
            will be carried out in accordance with the State plan 
            described in this subsection;
                ``(ii) carry out the evaluation requirements of section 
            1431;
                ``(iii) ensure that the State agencies receiving 
            subgrants under this 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 subpart.
        ``(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 subpart 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 under this subpart;
        ``(2) provide an assurance that in making services available to 
    children and youth in adult correctional institutions, priority 
    will be given to such children and youth who are likely to complete 
    incarceration within a 2-year period;
        ``(3) describes the program, including a budget for the first 
    year of the program, with annual updates to be provided to the 
    State educational agency;
        ``(4) describes how the program will meet the goals and 
    objectives of the State plan;
        ``(5) describes how the State agency will consult with experts 
    and provide the necessary training for appropriate staff, to ensure 
    that the planning and operation of institution-wide projects under 
    section 1416 are of high quality;
        ``(6) describes how the State agency will carry out the 
    evaluation requirements of section 9601 and how the results of the 
    most recent evaluation will be used to plan and improve the 
    program;
        ``(7) includes data showing that the State agency has 
    maintained the fiscal effort required of a local educational 
    agency, in accordance with section 9521;
        ``(8) describes how the programs will be coordinated with other 
    appropriate State and Federal programs, such as programs under 
    title I of Public Law 105-220, vocational and technical education 
    programs, State and local dropout prevention programs, and special 
    education programs;
        ``(9) describes how the State agency will encourage 
    correctional facilities receiving funds under this subpart to 
    coordinate with local educational agencies or alternative education 
    programs attended by incarcerated children and 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 correctional 
    facility or institution for neglected or delinquent children and 
    youth to be responsible for issues relating to the transition of 
    children and youth from such facility or institution to locally 
    operated programs;
        ``(12) describes how the State agency will endeavor to 
    coordinate with businesses for training and mentoring for 
    participating children and youth;
        ``(13) provides an assurance that the State agency will assist 
    in locating alternative programs through which students can 
    continue their education if the students are not returning to 
    school after leaving the correctional facility or institution for 
    neglected or delinquent children and youth;
        ``(14) provides assurances that the State agency will work with 
    parents to secure parents' assistance in improving the educational 
    achievement of their children and youth, and preventing their 
    children's and youth's further involvement in delinquent 
    activities;
        ``(15) provides an assurance that the State agency will work 
    with children and youth with disabilities in order to meet an 
    existing individualized education program and an assurance that the 
    agency will notify the child's or youth's local school if the child 
    or youth--
            ``(A) is identified as in need of special education 
        services while the child or youth is in the correctional 
        facility or institution for neglected or delinquent children 
        and youth; and
            ``(B) intends to return to the local school;
        ``(16) provides an assurance that the State agency will work 
    with children and youth who dropped out of school before entering 
    the correctional facility or institution for neglected or 
    delinquent children and youth to encourage the children and youth 
    to reenter school once the term of the incarceration is completed 
    or provide the child or youth with the skills necessary to gain 
    employment, continue the education of the child or youth, or 
    achieve a secondary school diploma or its recognized equivalent if 
    the child or youth does not intend to return to school;
        ``(17) provides an assurance that teachers and other qualified 
    staff are trained to work with children and youth 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 
    children and youth, such as career counseling, distance learning, 
    and assistance in securing student loans and grants; and
        ``(19) provides an assurance 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. 1415. USE OF FUNDS.

    ``(a) Uses.--
        ``(1) In general.--A State agency shall use funds received 
    under this subpart only for programs and projects that--
            ``(A) are consistent with the State plan under section 
        1414(a); and
            ``(B) concentrate on providing participants with the 
        knowledge and skills needed to make a successful transition to 
        secondary school completion, vocational or technical training, 
        further education, or employment.
        ``(2) Programs and projects.--Such programs and projects--
            ``(A) may include the acquisition of equipment;
            ``(B) shall be designed to support educational services 
        that--
                ``(i) except for institution-wide projects under 
            section 1416, are provided to children and youth identified 
            by the State agency as failing, or most at-risk of failing, 
            to meet the State's challenging academic content standards 
            and student academic achievement standards;
                ``(ii) supplement and improve the quality of the 
            educational services provided to such children and youth by 
            the State agency; and
                ``(iii) afford such children and youth an opportunity 
            to meet challenging State academic achievement standards;
            ``(C) shall be carried out in a manner consistent with 
        section 1120A and part I (as applied to programs and projects 
        under this part); and
            ``(D) may include the costs of meeting the evaluation 
        requirements of section 9601.
    ``(b) Supplement, Not Supplant.--A program under this subpart that 
supplements the number of hours of instruction students receive from 
State and local sources shall be considered to comply with the 
supplement, not supplant requirement of section 1120A (as applied to 
this part) without regard to the subject areas in which instruction is 
given during those hours.

``SEC. 1416. INSTITUTION-WIDE PROJECTS.

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

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

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

``SEC. 1418. TRANSITION SERVICES.

    ``(a) Transition Services.--Each State agency shall reserve not 
less than 15 percent and not more than 30 percent of the amount such 
agency receives under this subpart for any fiscal year to support--
        ``(1) projects that facilitate the transition of children and 
    youth from State-operated institutions to schools served by local 
    educational agencies; or
        ``(2) the successful reentry of youth offenders, who are age 20 
    or younger and have received a secondary school diploma or its 
    recognized equivalent, into postsecondary education, or vocational 
    and technical training programs, through strategies designed to 
    expose the youth to, and prepare the youth for, postsecondary 
    education, or vocational and technical training programs, such as--
            ``(A) preplacement programs that allow adjudicated or 
        incarcerated youth to audit or attend courses on college, 
        university, or community college campuses, or through programs 
        provided in institutional settings;
            ``(B) worksite schools, in which institutions of higher 
        education and private or public employers partner to create 
        programs to help students make a successful transition to 
        postsecondary education and employment; and
            ``(C) essential support services to ensure the success of 
        the youth, such as--
                ``(i) personal, vocational and technical, and academic, 
            counseling;
                ``(ii) placement services designed to place the youth 
            in a university, college, or junior college program;
                ``(iii) information concerning, and assistance in 
            obtaining, available student financial aid;
                ``(iv) counseling services; and
                ``(v) job placement services.
    ``(b) Conduct of Projects.--A project supported under this section 
may be conducted directly by the State agency, or through a contract or 
other arrangement with one or more local educational agencies, other 
public agencies, or private nonprofit organizations.
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a school that receives funds under subsection (a) 
from serving neglected and delinquent children and youth simultaneously 
with students with similar educational needs, in the same educational 
settings where appropriate.

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

    ``The Secretary may reserve not more than 2.5 percent of the amount 
made available to carry out this subpart for a fiscal year--
        ``(1) to develop a uniform model to evaluate the effectiveness 
    of programs assisted under this subpart; and
        ``(2) to provide technical assistance to and support the 
    capacity building of State agency programs assisted under this 
    subpart.

                   ``Subpart 2--Local Agency Programs

``SEC. 1421. PURPOSE.

    ``The purpose of this subpart is to support the operation of local 
educational agency programs that involve collaboration with locally 
operated correctional facilities--
        ``(1) to carry out