To provide for improved educational opportunities in low-income and rural schools and districts, and for other purposes.

Summary: Rural Education Development Initiative for the 21st Century Act - Directs the Secretary of Education to make: (1) formula grants to applicant State educational agencies to award competitive or formula subgrants to rural local educational agencies (LEAs) for elementary and secondary education development activities; and (2) direct competitive grants for such activities to specially qualified LEAs in nonparticipating States.Authorizes local use of such funds for: (1) certain local educational technology activities; (2) professional development designed to prepare teachers who are teaching out of their primary subject area; (3) certain academic enrichment programs; (4) innovative academic enrichment programs related to the educational needs of students at-risk of academic failure, including remedial instruction in one or more of the core subject areas of English, mathematics, science, and history; and (5) recruitment and retention of highly qualified teachers in special education, mathematics, or science.

SECTION 1. SHORT TITLE.

     This Act may be cited as the ``Rural Education Development 
Initiative for the 21st Century Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) While there are rural education initiatives identified 
        at the State and local level, no Federal education policy 
        focuses on the specific needs of rural school districts and 
        schools, especially those that serve poor students.
            (2) The National Center for Educational Statistics (NCES) 
        reports that while 46 percent of our Nation's public schools 
        serve rural areas, they only receive 22 percent of the Nation's 
        education funds annually.
            (3) A critical problem for rural school districts involves 
        the hiring and retention of qualified administrators and 
        certified teachers (especially in special education, science, 
        and mathematics). Consequently, teachers in rural schools are 
        almost twice as likely to provide instruction in two or more 
        subjects than teachers in urban schools. Rural schools also 
        face other tough challenges, such as shrinking local tax bases, 
        high transportation costs, aging buildings, limited course 
        offerings, and limited resources.
            (4) Data from the National Assessment of Educational 
        Progress (NAEP) consistently shows large gaps between the 
        achievement of students in high-poverty schools and those in 
        other schools. High-poverty schools face special challenges in 
        preparing their students to reach high standards of performance 
        on State and national assessments.
    (b) Purpose.--The purpose of this Act is to provide rural school 
students in the United States with increased learning opportunities.

SEC. 3. DEFINITIONS.

     In this Act:
            (1) The terms ``elementary school'', ``local educational 
        agency'', and ``State educational agency'' have the meanings 
        given such terms in section 14101 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 8801).
            (2) The term ``eligible local educational agency'' means a 
        local educational agency that serves--
                    (A) a school-age population, 20 percent or more of 
                whom are from families with incomes below the poverty 
                line; and
                    ``(B)(i) only schools designated by the Secretary 
                with a school locale code of 6, 7, or 8; or
                    (ii) a school-age population of 800 or fewer.
            (3) The term ``poverty line'' has the meaning given such 
        term by section 673(2) of the Community Services Block Grant 
        Act (42 U.S.C. 9902(2)) applicable to a family of the size 
        involved.
            (4) The term ``rural area'' means the area defined by the 
        Secretary using school locale codes 6, 7, and 8.
            (5) The term ``school-age population'' means the number of 
        students aged 5 through 17.
            (6) The term ``school locale code'' has the meaning given 
        such term by the Secretary.
            (7) The term ``Secretary'' means the Secretary of 
        Education.
            (8) The term ``specially qualified agency'' means an 
        eligible local educational agency, located in a State that does 
        not participate in a program under this Act in a fiscal year, 
        that may apply directly to the Secretary for a grant in such 
        year under section 4(a)(3).

SEC. 4. RURAL EDUCATION INITIATIVE AUTHORIZED.

    (a) Grants to States.--
            (1) In general.--Except as provided in paragraph (3), from 
        the amount appropriated under section 10 and not reserved under 
        subsection (c) for a fiscal year, the Secretary shall award 
        grants to State educational agencies that have applications 
        approved under section 5 to enable such agencies to award 
        grants to eligible local educational agencies for local 
        authorized activities described in subsection (c).
            (2) Formula.--
                    (A) In general.--Each State educational agency that 
                receives a grant under this section shall receive an 
                amount that bears the same relation to the amount of 
                funds appropriated under section 10 that are not 
                reserved under subsection (c) for a fiscal year as the 
                number of students in average daily attendance served 
                by eligible local education agencies in the State bears 
                to the number of all such students served by eligible 
                local education agencies in all States for that fiscal 
                year.
                    (B) Data.--In determining the school-age population 
                under subparagraph (A) the Secretary shall use the most 
                recent data available from the Bureau of the Census.
            (3) Direct awards to specially qualified agencies.--If a 
        State educational agency elects not to participate in the 
        program under this Act or does not have an application approved 
        under section 5, the Secretary may award, on a competitive 
        basis, the amount the State educational agency is eligible to  
receive under paragraph (2) directly to specially qualified agencies in 
the State.
    (b) Local Authorized Activities.--Funds made available under this 
Act may be used for--
            (1) local educational technology efforts as described in 
        section 3134 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 6844);
            (2) professional development activities designed to prepare 
        teachers who are teaching out of their primary subject area;
            (3) academic enrichment programs described in section 10204 
        of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 8034);
            (4) innovative academic enrichment programs related to the 
        educational needs of students at-risk of academic failure, 
        including remedial instruction in one or more of the core 
        subject areas of English, mathematics, science, and history; 
        and
            (5) activities to recruit and retain highly qualified 
        teachers in special education, mathematics, or science.
    (c) Reservation of Funds.--From the amount appropriated under 
section 10 for a fiscal year, the Secretary shall reserve 0.5 percent 
to make awards to elementary or secondary schools operated or supported 
by the Bureau of Indian Affairs to carry out the purpose of this Act.
    (d) Relation to Other Federal Funding.--Funds received under this 
Act by a State educational agency or a specially qualified agency shall 
not be taken into consideration in determining the eligibility for, or 
amount of, any other Federal funding awarded to such agency.

SEC. 5. APPLICATIONS.

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

SEC. 6. STATE DISTRIBUTION OF FUNDS.

    (a) Award Basis.--A State educational agency that receives funds 
under this Act shall award grants to eligible local educational 
agencies or provide assistance to schools described in subsection 
(b)(2)--
            (1) on a competitive basis; or
            (2) according to a formula based on the number of students 
        served by the eligible local educational agencies or schools 
        (as appropriate) in the State, as determined by the State.

SEC. 7. ADMINISTRATIVE COSTS.

     A State educational agency or specially qualified agency that 
receives funds under this Act may not use more than 5 percent of the 
grant funds for State activities or administrative costs related to the 
program.

SEC. 8. REPORTS.

    (a) State Educational Agency Reports.--
            (1) Contents.--Each State educational agency that receives 
        a grant under this Act shall submit an annual report to the 
        Secretary describing--
                    (A) the methods the State educational agency used 
                to award grants to eligible local educational agencies 
                under this Act;
                    (B) how eligible local educational agencies and 
                schools used funds provided under this Act; and
                    (C) the degree to which progress has been made 
                toward meeting the goals and objectives described the 
                application submitted under section 5.
            (2) Availability.--The Secretary shall make available the 
        annual State reports received under paragraph (1) for 
        dissemination to the Congress, interested parties (including 
        educators, parents, students, and advocacy and civil rights 
        organizations), and the public.
    (b) Specially Qualified Agency Reports.--Each specially qualified 
agency that receives a grant under this Act shall submit an annual 
report to the Secretary describing how such agency used funds received 
under this Act to coordinate with other Federal, State, and local 
programs.
    (c) Report by Secretary to Congress.--The Secretary shall prepare 
and submit to Congress an annual report which shall describe--
            (1) the methods the State educational agency used to award 
        grants to eligible local educational agencies and to provide 
        assistance to schools under this Act;
            (2) how eligible local educational agencies used funds 
        provided under this Act; and
            (3) progress made by State educational agencies and 
        eligible local educational agencies receiving assistance under 
        this Act in meeting specific, annual, measurable performance 
        goals and objectives established by such agencies for 
        activities assisted under this Act.

SEC. 9. ACCOUNTABILITY.

    If, at the end of the third consecutive year in which a State 
educational agency or specially qualified agency receives funds under 
this Act, the Secretary determines that such agency has not 
substantially met its performance goals and objectives described in the 
application submitted under section 5, such agency shall be ineligible 
to receive additional funds under this Act for a period of one year 
after the date of such determination.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

     There are authorized to be appropriated to carry out this Act 
$300,000,000 for each of fiscal years 2002 through 2005.