To amend, for certain fiscal years, the weighted child count used to determine targeted grant amounts and education finance incentive grant amounts for local educational agencies under title I of the Elementary and Secondary Education Act of 1965.

Summary: All Children are Equal Act or the ACE Act - Amends part A of title I (Improving the Academic Achievement of the Disadvantaged) of the Elementary and Secondary Education Act of 1965 to alter the formula for determining the share of targeted grant funds and education finance incentive grant funds a local educational agency (LEA) receives.

Alters the formula so that LEAs that have a high percentage of impoverished students, but a comparatively low number of such students, receive a higher allocation of such funding.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``All Children are Equal Act'' or the 
``ACE Act''.

SEC. 2. FINDINGS.

    Section 1125AA of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6336) is amended--
            (1) by amending the heading to read as follows:

``SEC. 1125AA. INCREASE GRANTS PER FORMULA STUDENT AS THE PERCENTAGE OF 
              ECONOMICALLY DISADVANTAGED CHILDREN IN A LOCAL 
              EDUCATIONAL AGENCY INCREASES.'';

        and
            (2) by amending subsection (a) to read as follows:
    ``(a) Findings.--Congress makes the following findings:
            ``(1) The current Basic Grant Formula for the distribution 
        of funds under this part does not adequately target funds for 
        schools with the highest concentrations of economically 
        disadvantaged students.
            ``(2) 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 high proportions of poor families.
            ``(3) The current formulas for distributing Targeted and 
        Education Finance Incentive Grants is intended to allocate more 
        funds per formula student to local educational agencies with 
        higher concentrations of such students.
            ``(4) These formula use two weighting systems, one based on 
        the percentage of the aged 5-17 population in a local education 
        agency that is eligible to receive funds under this title 
        (percentage weighting), and another based on the absolute 
        number of such students (number weighting). Whichever of these 
        weighting systems results in the highest total weighted formula 
        student count for a local educational agency is the weighting 
        system used for that agency in the final allocation of Targeted 
        and Education Finance Incentive Grant funds.
            ``(5) Since the amount available to be distributed through 
        these formulas is fixed by congressional appropriation, any 
        gain in allocation share by one local educational agency causes 
        a loss to other local educational agencies.
            ``(6) The number weighting alternative is often favorable 
        to very large local educational agencies, even if the agency's 
        formula student percentage is low. But because smaller local 
        educational agencies simply do not have enough students to gain 
        from number weighting, they are rarely better off under the 
        number weighting alternative.
            ``(7) The Congressional Research Service has compared the 
        funding allocations of each local educational agency for school 
        year 2008-2009 under the current dual weighting system with the 
        funding allocation it would have that year if all local 
        educational agencies had their student count weighted only by 
        percentage weighting.
            ``(8) This data shows that the use of number weighting in 
        these formulas has shifted funding from smaller to larger local 
        educational agencies notwithstanding the level of poverty in 
        either. This is contrary to the intent of Congress, which is to 
        direct more funding per formula student to local educational 
        agencies with high concentrations of poverty, as measured by 
        the number of formula students as a percentage of the aged 5-17 
        population of the local educational agency.
            ``(9) As a result of this unintended consequence of the 
        number weighting system, 338 of the 340 local educational 
        agencies that have over 38.25 percent formula students gain 
        nothing from number weighting under the Targeted Grant program, 
        281 of them actually lose funding because of number weighting, 
        and 83 of those 340 highest poverty local educational agencies 
        would actually be better off if Targeted Grant funds were 
        allocated using the Basic Grant formula with no weighting 
        system at all.
            ``(10) Congress has a responsibility to correct this 
        unintended inequity by reducing the power of the number 
        weighting system relative to the percentage weighting system so 
        that local educational agencies with high percentages of 
        poverty but low numbers of students are not disadvantaged under 
        the formulas used for grants under this part.''.

SEC. 3. TARGETED GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    Section 1125(c)(2) of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6335(c)(2)) is amended--
            (1) in subparagraph (C), by striking ``The amount'' and 
        inserting ``Except as otherwise provided in subparagraph (D), 
        the amount'';
            (2) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (3) by inserting after subparagraph (C) the following:
                    ``(D) Fiscal years 2012 through 2015.--
                Notwithstanding subparagraph (C) or any other provision 
                of this paragraph--
                            ``(i) for fiscal year 2012, subparagraph 
                        (C) shall be applied--
                                    ``(I) in clause (ii), by 
                                substituting `1.35' for `1.5';
                                    ``(II) in clause (iii), by 
                                substituting `1.8' for `2.0';
                                    ``(III) in clause (iv), by 
                                substituting `2.25' for `2.5'; and
                                    ``(IV) in clause (v), by 
                                substituting `2.7' for `3.0';
                            ``(ii) for fiscal year 2013, subparagraph 
                        (C) shall be applied--
                                    ``(I) in clause (ii), by 
                                substituting `1.2' for `1.5';
                                    ``(II) in clause (iii), by 
                                substituting `1.6' for `2.0';
                                    ``(III) in clause (iv), by 
                                substituting `2.0' for `2.5'; and
                                    ``(IV) in clause (v), by 
                                substituting `2.4' for `3.0';
                            ``(iii) for fiscal year 2014, subparagraph 
                        (C) shall be applied--
                                    ``(I) in clause (ii), by 
                                substituting `1.05' for `1.5';
                                    ``(II) in clause (iii), by 
                                substituting `1.4' for `2.0';
                                    ``(III) in clause (iv), by 
                                substituting `1.75' for `2.5'; and
                                    ``(IV) in clause (v), by 
                                substituting `2.1' for `3.0' ; and
                            ``(iv) for fiscal year 2015, subparagraph 
                        (C) shall be applied--
                                    ``(I) in clause (i), by 
                                substituting `2,262' for `691';
                                    ``(II) by striking clause (ii);
                                    ``(III) in clause (iii), by 
                                substituting `1.2' for `2.0';
                                    ``(IV) in clause (iv), by 
                                substituting `1.5' for `2.5'; and
                                    ``(V) in clause (v), by 
                                substituting `1.8' for `3.0'.''.

SEC. 4. EDUCATION FINANCE INCENTIVE GRANT PROGRAM.

    (a) States With an Equity Factor Less Than 0.10.--Section 
1125A(d)(1)(B) of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6337(d)(1)(B)) is amended--
            (1) in clause (iii), by striking ``The amount'' and 
        inserting ``Except as otherwise provided in clause (iv), the 
        amount''; and
            (2) by adding at the end the following:
                            ``(iv) Fiscal years 2012 through 2015.--
                        Notwithstanding clause (iii) or any other 
                        provision of this subparagraph--
                                    ``(I) for fiscal year 2012, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.35' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.8' for 
                                        `2.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `2.25' for 
                                        `2.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `2.7' for `3.0';
                                    ``(II) for fiscal year 2013, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.2' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.6' for 
                                        `2.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `2.0' for 
                                        `2.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `2.4' for `3.0';
                                    ``(III) for fiscal year 2014, 
                                clause (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.05' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.4' for 
                                        `2.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `2.75' for 
                                        `2.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `2.1' for `3.0'; 
                                        and
                                    ``(IV) for fiscal year 2015, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.0' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.2' for 
                                        `2.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `1.5' for 
                                        `2.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `1.8' for 
                                        `3.0'.''.
    (b) States With an Equity Factor Greater Than or Equal to 0.10 and 
Less Than 0.20.--Section 1125A(d)(2)(B) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6337(d)(2)(B)) is amended--
            (1) in clause (iii), by striking ``The amount'' and 
        inserting ``Except as otherwise provided in clause (iv), the 
        amount''; and
            (2) by adding at the end the following:
                            ``(iv) Fiscal years 2012 through 2015.--
                        Notwithstanding clause (iii) or any other 
                        provision of this subparagraph--
                                    ``(I) for fiscal year 2012, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.35' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `2.025' for 
                                        `2.25';
                                            ``(cc) in subclause (IV), 
                                        by substituting `3.038' for 
                                        `3.375'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `4.05' for `4.5';
                                    ``(II) for fiscal year 2013, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.2' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.8' for 
                                        `2.25';
                                            ``(cc) in subclause (IV), 
                                        by substituting `2.7' for 
                                        `3.375'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `3.6' for `4.5';
                                    ``(III) for fiscal year 2014, 
                                clause (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.05' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.575' for 
                                        `2.25';
                                            ``(cc) in subclause (IV), 
                                        by substituting `2.363' for 
                                        `3.375'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `3.15' for `4.5'; 
                                        and
                                    ``(IV) for fiscal year 2015, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.0' for 
                                        `1.5';
                                            ``(bb) in subclause (III), 
                                        by substituting `1.58' for 
                                        `2.25';
                                            ``(cc) in subclause (IV), 
                                        by substituting `2.36' for 
                                        `3.375'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `3.15' for 
                                        `4.5'.''.
    (c) States With an Equity Factor Greater Than or Equal to 0.20.--
Section 1125A(d)(3)(B) of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6337(d)(3)(B)) is amended--
            (1) in clause (iii), by striking ``The amount'' and 
        inserting ``Except as otherwise provided in clause (iv), the 
        amount''; and
            (2) by adding at the end the following:
                            ``(iv) Fiscal years 2012 through 2015.--
                        Notwithstanding clause (iii) or any other 
                        provision of this subparagraph--
                                    ``(I) for fiscal year 2012, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.80' for 
                                        `2.0';
                                            ``(bb) in subclause (III), 
                                        by substituting `2.70' for 
                                        `3.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `4.05' for 
                                        `4.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `5.4' for `6.0';
                                    ``(II) for fiscal year 2013, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.6' for 
                                        `2.0';
                                            ``(bb) in subclause (III), 
                                        by substituting `2.4' for 
                                        `3.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `3.6' for 
                                        `4.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `4.8' for `6.0';
                                    ``(III) for fiscal year 2014, 
                                clause (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.4' for 
                                        `2.0';
                                            ``(bb) in subclause (III), 
                                        by substituting `2.1' for 
                                        `3.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `3.15' for 
                                        `4.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `4.2' for `6.0'; 
                                        and
                                    ``(IV) for fiscal year 2015, clause 
                                (iii) shall be applied--
                                            ``(aa) in subclause (II), 
                                        by substituting `1.4' for 
                                        `2.0';
                                            ``(bb) in subclause (III), 
                                        by substituting `2.1' for 
                                        `3.0';
                                            ``(cc) in subclause (IV), 
                                        by substituting `3.15' for 
                                        `4.5'; and
                                            ``(dd) in subclause (V), by 
                                        substituting `4.2' for 
                                        `6.0'.''.