To amend the impact aid program under the Elementary and Secondary Education Act of 1965 to improve the delivery of payments under the program to local educational agencies.

Summary: Amends the Elementary and Secondary Education Act of 1965 to entitle certain local educational agencies (LEAs) to specified payment amounts under Impact Aid programs: (1) relating to Federal acquisition of real property; and (2) for basic support for eligible federally-connected children. (Current law makes such LEAs eligible for such payments up to specified maximum amounts.)Revises the formula for calculating additional Impact Aid payments to LEAs for federally-connected children with disabilities who are eligible for services under the Individuals with Disabilities Education Act.Extends the authorization of appropriations for: (1) construction and school modernization payments for certain LEAs, including ones with high percentages of children living on Indian lands or children of military parents; and (2) facilities maintenance payments for certain schools located on military bases and serving military dependent children.

SECTION 1. AMENDMENTS TO IMPACT AID PROGRAM.

    (a) Payments Relating to Federal Acquisition of Real Property.--
Section 8002 of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7702) is amended--
            (1) in subsection (a), by striking ``shall be eligible'' 
        and inserting ``is entitled''; and
            (2) by striking subsections (h), (i), and (j).
    (b) Payments for Eligible Federally Connected Children.--
            (1) Computation of payment.--Section 8003(a)(1) of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        7703(a)(1)) is amended by striking ``is eligible'' and 
        inserting ``is entitled''.
            (2) Basic support payments and payments with respect to 
        fiscal years in which insufficient funds are appropriated.--
        Section 8003(b) of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 7703(b)) is amended--
                    (A) in the heading, by striking ``and Payments With 
                Respect to Fiscal Years in Which Insufficient Funds Are 
                Appropriated'';
                    (B) in paragraph (1)--
                            (i) in subparagraph (A), by striking ``From 
                        the amount appropriated under section 8014(b) 
                        for a fiscal year, the Secretary is authorized 
                        to'' and inserting ``The Secretary shall'';
                            (ii) in subparagraph (B)--
                                    (I) in the heading, by striking 
                                ``Eligibility'' and inserting 
                                ``Entitlement''; and
                                    (II) by striking ``is eligible'' 
                                and inserting ``is entitled''; and
                            (iii) in subparagraph (C)--
                                    (I) in the heading, by striking 
                                ``Maximum amount'' and inserting 
                                ``Amount'';
                                    (II) by striking ``maximum amount'' 
                                and inserting ``amount''; and
                                    (III) by striking ``is eligible'' 
                                and inserting ``is entitled'';
                    (C) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i), by striking 
                                ``From the amount appropriated under 
                                section 8014(b) for a fiscal year, the 
                                Secretary is authorized to'' and 
                                inserting ``The Secretary shall''; and
                                    (II) in clause (ii), by striking 
                                ``eligible'' and inserting 
                                ``entitled'';
                            (ii) in subparagraph (B)--
                                    (I) in the heading, by striking 
                                ``Eligibility'' and inserting 
                                ``Entitlement'';
                                    (II) in clause (i), by striking 
                                ``is eligible'' and inserting ``is 
                                entitled'';
                                    (III) in clause (ii)--
                                            (aa) in the heading, by 
                                        striking ``eligibility'' and 
                                        inserting ``entitlement'';
                                            (bb) by striking ``shall be 
                                        ineligible'' and inserting 
                                        ``shall not be entitled''; and
                                            (cc) by striking 
                                        ``ineligibility'' and inserting 
                                        ``non-entitlement''; and
                                    (IV) in clause (iii)--
                                            (aa) in the heading, by 
                                        striking ``eligibility'' and 
                                        inserting ``entitlement'';
                                            (bb) by striking ``becomes 
                                        ineligible'' and inserting ``is 
                                        not entitled''; and
                                            (cc) by striking 
                                        ``eligibility'' each place it 
                                        appears and inserting 
                                        ``entitlement'';
                            (iii) in subparagraph (C)--
                                    (I) in the heading, by striking 
                                ``Eligibility'' and inserting 
                                ``Entitlement'';
                                    (II) in clause (i), by striking 
                                ``is eligible'' and inserting ``is 
                                entitled'';
                                    (III) in clause (ii)--
                                            (aa) in the heading, by 
                                        striking ``eligibility'' and 
                                        inserting ``entitlement''; and
                                            (bb) by striking ``becomes 
                                        ineligible'' and inserting ``is 
                                        not entitled''; and
                                    (IV) in clause (iii), by striking 
                                ``becoming ineligible'' and inserting 
                                ``losing entitlement status'';
                            (iv) in subparagraph (D)--
                                    (I) in the heading, by striking 
                                ``Maximum amount'' and inserting 
                                ``Amount''; and
                                    (II) in clause (i)--
                                            (aa) by striking ``maximum 
                                        amount'' and inserting 
                                        ``amount''; and
                                            (bb) by striking ``is 
                                        eligible'' and inserting ``is 
                                        entitled''; and
                            (v) in subparagraph (E)--
                                    (I) in the heading, by striking 
                                ``Maximum amount'' and inserting 
                                ``Amount''; and
                                    (II) in clause (i)(I)--
                                            (aa) by striking ``maximum 
                                        amount'' and inserting 
                                        ``amount''; and
                                            (bb) by striking ``is 
                                        eligible'' and inserting ``is 
                                        entitled'';
                    (D) by striking paragraph (3); and
                    (E) in paragraph (4)--
                            (i) in subparagraph (A), by striking 
                        ``paragraph (3)''; and
                            (ii) in subparagraph (B)--
                                    (I) in the heading--
                                            (aa) by striking ``maximum 
                                        amount'' and inserting 
                                        ``amount''; and
                                            (bb) by striking ``and 
                                        threshold payment'';
                                    (II) by striking ``maximum'' each 
                                place it appears; and
                                    (III) by striking ``and the 
                                learning opportunity threshold payment 
                                under subparagraph (B) or (C) of 
                                paragraph (3), as the case may be,''.
            (3) Children with disabilities.--Section 8003(d)(1) of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        7703(d)(1)) is amended to read as follows:
            ``(1) In general.--The Secretary shall pay to each eligible 
        local educational agency for a fiscal year the amount equal to 
        the difference between--
                    ``(A) the amount equal to the product of--
                            ``(i) the number of children described in 
                        subparagraphs (A)(ii), (B), (C), and (D) of 
                        subsection (a)(1) who are eligible to receive 
                        services under the Individuals with 
                        Disabilities Education Act (20 U.S.C. 1400 et 
                        seq.); and
                            ``(ii) 40 percent of the average per-pupil 
                        expenditure in public elementary and secondary 
schools in the United States; and
                    ``(B) the amount of a grant that the agency 
                received under section 611 of the Individuals with 
                Disabilities Education Act (20 U.S.C. 1411) for the 
                prior fiscal year attributable to children described in 
                subparagraphs (A)(ii), (B), (C), and (D) of subsection 
                (a)(1).''.
            (4) Hold harmless.--Section 8003(e) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 7703(e)) is 
        amended--
                    (A) in paragraph (2) to read as follows:
            ``(2) Amount.--The total amount provided to a local 
        educational agency under paragraph (1)(A) for fiscal year 2004 
        shall not exceed the maximum basic support payment amount for 
        such agency determined under paragraph (1) or (2) of subsection 
        (b) and the total amount provided to a local educational agency 
        under paragraph (1)(B) for fiscal year 2005 shall not exceed 
        the basic support payment amount for such agency determined 
        under paragraph (1) or (2) of subsection (b).''; and
                    (B) by striking paragraph (3).
    (c) Policies and Procedures Relating to Children Residing on Indian 
Lands.--Section 8004(e)(8) of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7704(e)(8)) is amended by striking ``is 
eligible'' and inserting ``is entitled''.
    (d) Application for Payments Under Sections 8002 and 8003.--Section 
8005(b)(1) of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7705(b)(1)) is amended by striking ``eligibility'' and inserting 
``entitlement''.
    (e) Construction.--Section 8007 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7707) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``section 
                8014(e)'' and inserting ``subsection (c)''; and
                    (B) in paragraph (3), by striking ``section 
                8014(e)'' each place it appears and inserting 
                ``subsection (c)'';
            (2) in subsection (b)(1), by striking ``section 8014(e)'' 
        and inserting ``subsection (c)''; and
            (3) by adding at the end the following:
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated sums as may 
be necessary for each of the fiscal years 2004 through 2006.''.
    (f) Facilities.--Section 8008 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7708) is amended--
            (1) in subsection (a), by striking ``section 8014(f)'' and 
        inserting ``subsection (c)''; and
            (2) by adding at the end the following:
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated sums as may 
be necessary for each of the fiscal years 2004 through 2006.''.
    (g) Authorization of Appropriations.--Section 8014 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 7714) is 
repealed.
    (h) Rule of Construction.--Title VIII of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7701 et seq.), as amended by 
this Act, is further amended by adding at the end the following:

``SEC. 8014. RULE OF CONSTRUCTION.

    ``Nothing in this title shall be interpreted to entitle any 
individual to assistance under any program, project, or activity of a 
local education agency, State agency, or other governmental entity 
funded under this title.''.

SEC. 2. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on October 1, 
2003, or the date of the enactment of this Act, whichever occurs later.