To amend section 1120A(c) of the Elementary and Secondary Education Act of 1965 to assure comparability of opportunity for educationally disadvantaged students.

Summary: ESEA Fiscal Fairness Act - Amends part A of title I of the Elementary and Secondary Education Act of 1965 to condition local educational agency (LEA) receipt of school improvement funds on: (1) an average state and local spending per pupil in each school receiving school improvement funds of at least 97% of such spending per pupil across all schools that are not receiving such funds; and (2) an average state and local spending per pupil in each higher poverty school of at least 97% of such spending per pupil across all lower poverty schools, if the LEA is serving all of its schools under part A.

Allows LEAs to meet such requirement across all schools or among schools serving a particular grade span if they compare schools within no more than three grade spans.

Directs the Inspector General of the Department of Education, in the fourth and fifth years after this Act's enactment, to audit 5 states and 10 LEAs to determine their progress in meeting these requirements.

Requires annual LEA report cards to include certain information on state and local spending per pupil in schools.

Requires states to provide the public with annual up-to-date school-by-school listings of per-pupil state and local spending.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``ESEA Fiscal Fairness Act''.

SEC. 2. PURPOSES.

    The purposes of this Act are as follows:
            (1) To remedy the inequitable distribution of State and 
        local funds within the areas served by local educational 
        agencies.
            (2) To reinforce the supplementary intent of funds made 
        available under title I of the Elementary and Secondary 
        Education Act of 1965, ensuring that these funds serve their 
        original purpose of subsidizing the increased costs associated 
        with educating students in concentrated poverty.
            (3) To address the statutory, regulatory, and enforcement 
        weaknesses that have undermined the role of the comparability 
        requirement in ensuring comparability within school districts.
            (4) To require the inclusion of real teacher salaries in 
        calculations of per-pupil expenditures.
            (5) To provide sufficient transparency, accountability, and 
        disclosure to allow parents, communities, educators, and local 
        agency officials to ensure students have access to the 
        resources they need to achieve at high levels.

SEC. 3. COMPARABILITY OF EXPENDITURES.

    Section 1120A(c) of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6321(c)) is amended to read as follows:
    ``(c) Comparability of Expenditures.--
            ``(1) In general.--
                    ``(A) Comparable funding in general.--Except as 
                provided in paragraphs (4) and (5), a local educational 
                agency may receive funds under this part only if the 
                average expenditure per pupil of State and local funds 
                in each school served under this part is at least 97 
                percent of the average expenditure per pupil of State 
                and local funds across all schools that are not 
                receiving funds under this part.
                    ``(B) Comparable funding among schools.--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 the average 
                expenditure per pupil of State and local funds in each 
                higher poverty school is at least 97 percent of the 
                average expenditure per pupil of State and local funds 
                across all lower poverty schools.
            ``(2) Equivalence.--A local educational agency shall be 
        considered to have met the requirements of paragraph (1), and 
        to be eligible to receive funds under this part, if--
                    ``(A) such agency has filed with the State 
                educational agency an up-to-date school-by-school 
                listing of per-pupil expenditures of State and local 
                funds for each school served by the agency; and
                    ``(B) the listing identified in clause (i) 
                demonstrates comparability across schools as required 
                by subparagraph (A) or (B) of paragraph (1).
            ``(3) Basis.--A local educational agency may meet the 
        requirements of subparagraphs (A) and (B) of paragraph (1) 
        across all schools or among schools serving a particular grade 
        span, if the local educational agency compares schools within 
        no more than three grade spans.
            ``(4) Monitoring.--
                    ``(A) Regulations by secretary.--Not later than 4 
                months after the date of the enactment of the ESEA 
                Fiscal Fairness Act, the Secretary shall issue 
                regulations concerning State educational agencies' and 
                local educational agencies' responsibilities for 
                meeting the requirements of this subsection.
                    ``(B) Regulations by states.--Not later than 6 
                months after the date on which the regulations required 
                by subparagraph (A) are issued, each State educational 
                agency shall create and distribute to local educational 
                agencies, and make available to the public, regulations 
                on the responsibilities of local educational agencies 
                for meeting the requirements of this subsection.
                    ``(C) Plan by local educational agencies.--Not 
                later than 14 months after the date on which 
                regulations required by subparagraph (B) are 
                distributed, each local educational agency shall 
                develop and submit to the State educational agency a 
                plan, including a time line and annual benchmarks, that 
                will ensure comparability as described in subparagraphs 
                (A) and (B) of paragraph (1) not later than 3 years 
                after the date on which the regulations required by 
                subparagraph (B) are distributed. The plan shall be 
                made available to the public.
                    ``(D) Audit.--In each of the fourth and fifth years 
                after the date of the enactment of this Act, the 
                Inspector General of the Department shall audit 5 
                States and 10 local educational agencies to determine 
                progress in meeting the requirements of this section.
            ``(5) Inapplicability.--This subsection shall not apply to 
        a local educational agency that does not have more than one 
        building for each grade span.
            ``(6) Compliance.--For the purpose of determining 
        compliance with paragraph (1), a local educational agency --
                    ``(A) shall exclude State and local funds expended 
                for the excess costs of providing English language 
                instruction for Limited English Proficient students as 
                determined by the local educational agency;
                    ``(B) shall exclude State and local funds expended 
                for the excess costs of providing services to children 
                with disabilities as determined by the local 
                educational agency; and
                    ``(C) may exclude supplemental State or local funds 
                in any school attendance area or school for programs 
                that meet the intent and purpose of this part.
            ``(7) Forced transfers.--Nothing in this subsection shall 
        be construed to require the forced or involuntary transfer of 
        any school personnel to comply with subparagraph (A) of 
        paragraph (1).
            ``(8) Comparability as minimum standard.--
                    ``(A) In general.--Nothing in this subsection shall 
                be construed to limit or discourage the allocation of 
                State or local funds to schools served under this part 
                in excess of 100 percent of the average per-pupil 
                expenditure for schools not served under this part.
                    ``(B) Exception.--If the local educational agency 
                is serving all schools under this part, nothing shall 
                be construed to discourage the allocation of State and 
                local funds to any higher poverty schools in excess of 
                100 percent of the average per-pupil expenditure in 
                lower poverty schools.
            ``(9) Public reporting.--
                    ``(A) School report cards.--Beginning with the 
                first academic year that begins after the date of the 
                enactment of the ESEA Fiscal Fairness Act, and for each 
                academic year thereafter, each local educational agency 
                shall include on the school report cards required under 
                section 1111(h)(2) the following:
                            ``(i) The average per-pupil expenditures of 
                        State and local funds for the school.
                            ``(ii) The average per-pupil expenditures 
                        of State and local funds for schools in the 
                        local educational agency not served under this 
                        part or for lower poverty schools when all 
                        schools in the local educational agency are 
                        served under this part.
                            ``(iii) The mean of average per-pupil 
                        expenditures of State and local funds for all 
                        schools in the State.
                    ``(B) Up-to-date school-by-school listing.--
                Beginning with the first academic year that begins 
                after the date of the enactment of the ESEA Fiscal 
                Fairness Act and for each academic year thereafter, the 
                State educational agency shall make publicly available 
                the up-to-date school-by-school listings of per-pupil 
                expenditures of State and local funds submitted by each 
                local educational agency, as required by paragraph 
                (2)(A)(i).
            ``(10) Definitions.--For purposes of this subsection:
                    ``(A) Expenditures.--
                            ``(i) In general.--The term `expenditures' 
                        means--
                                    ``(I) salary expenditures for 
                                classroom teachers, including not only 
                                base salaries but also incentive pay, 
                                bonuses, and supplemental stipends for 
                                mentoring or other additional roles;
                                    ``(II) salary expenditures for 
                                instructional and instructional support 
                                staff who are not classroom teachers 
                                (such as principals, librarians, 
                                paraprofessionals, academic coaches, 
                                and curriculum specialists), including 
                                not only base salaries but also 
                                incentive pay, bonuses, and 
                                supplemental stipends for mentoring or 
                                other additional roles;
                                    ``(III) salary expenditures for 
                                noninstructional staff, including 
                                student support staff; and
                                    ``(IV) nonpersonnel expenditures 
                                such as--
                                            ``(aa) professional 
                                        development for teachers and 
                                        other staff;
                                            ``(bb) instructional 
                                        materials and supplies;
                                            ``(cc) computers, software, 
                                        and other technology;
                                            ``(dd) contracted services 
                                        such as distance learning, art, 
                                        athletics, and technology 
                                        services;
                                            ``(ee) library books and 
                                        media center materials; and
                                            ``(ff) such other 
                                        expenditures as the Secretary 
                                        of Education may require.
                            ``(ii) Determinations.--For purposes of 
                        subclauses (I) and (II) of clause (i), in the 
                        determination of salary expenditures, salary 
                        differentials for years of employment shall be 
                        included.
                    ``(B) Higher poverty school.--The term `higher 
                poverty school' means a school that is in the highest 
                four quartiles of the percentage of pupils from low-
                income families in a local educational agency.
                    ``(C) Lower poverty school.--The term `lower 
                poverty school' means a school that is in the lowest 
                quartile of the percentage of pupils from low-income 
                families in a local educational agency.''.