SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equal Protection School Finance 
Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) There are systems of public school finance within 
        States which subject American children to educations of 
        radically varying and grossly unequal quality solely on the 
        basis of where they live.
            (2) Agreement with the unanimous Supreme Court decision of 
        Brown v. Board of Education which stated: ``In these days, it 
        is doubtful that any child may reasonably be expected to 
        succeed in life if he is denied the opportunity of an 
        education. Such an opportunity, where the State has undertaken 
        to provide it, is a right which must be made available to all 
        on equal terms.''.
            (3) Education is a fundamental right under the equal 
        protection clause of the United States Constitution.
            (4) The provision of education to all children within a 
        State on an equal basis, including equality of financial 
        resources, is fundamental to the equal protection of laws.

SEC. 3. EQUALIZATION SYSTEM.

    (a) In General.--No State shall be eligible for Federal funds 
administered by the Department of Education to support elementary and 
secondary education unless the coefficient of variation (referred to in 
this Act as ``COV'') of per pupil expenditures in local educational 
agencies statewide for elementary and secondary education in such State 
is less than 10 percent.
    (b) Calculation.--The COV shall be calculated based on intrastate 
expenditures for current operations, as determined by the State, 
without regard to Federal contributions.
    (c) Additional Exclusions.--
            (1) Special purpose.--Also excluded from the COV 
        calculation shall be capital expenditures and special purpose 
        funds without regard to source. Special purpose funds are funds 
        which are targeted to address a specific need, such as the 
        educationally disadvantaged, handicapped, gifted, or language 
        deficient students.
            (2) Resources.--Nothing in this Act shall preclude the 
        State or the Federal Government from providing additional 
        resources to local educational agencies to address such special 
        needs.
    (d) Waiver.--The Secretary may provide funding for elementary and 
secondary education to a State which has not complied with the 
requirements of this section if the State submits a plan for compliance 
which the Secretary determines will bring the State into compliance not 
later than 5 years after the date of submission of such plan.

SEC. 4. COMPLIANCE AND REPORTING.

    (a) In General.--
            (1) Annual report.--To be eligible to receive Federal 
        education funds, a State shall submit an annual report to the 
        Secretary which certifies that the State has complied with the 
        provisions of this Act.
            (2) Certifications.--Such certifications are due not later 
        than January 1 of each fiscal year and shall be accepted by the 
        Secretary unless challenged by 1 or more local educational 
        agencies.
    (b) Certification Challenge.--To challenge the validity of a 
State's compliance certification, local educational agencies that 
represent not less than 10 percent of the students in such State must 
file a complaint with the Secretary, not later than 90 days after the 
date on which the certification is due.
    (c) Compliance.--
            (1) In general.--The failure of a State to comply with the 
        provisions of this Act shall result in the loss of eligibility 
        for Federal education funds identified in section 3(a) 
        beginning in the first fiscal year after a finding of 
        noncompliance by the Secretary. Eligibility for such funds 
        shall be restored at the beginning of the next fiscal year in 
        which the Secretary finds the State to be in compliance.
            (2) Federal funds.--The failure of a State to comply with 
        the provisions of this Act for a period that exceeds 5 years 
        from the date of the enactment of this Act or the submission of 
        a plan under section 3(d), whichever is longer, shall lose all 
        forms of Federal assistance beginning in the first fiscal year 
        after such 5-year period until the State complies with the 
        provisions of this Act.
    (d) Redistribution of Funds.--Funds for elementary and secondary 
education that are not distributed to a State as a result of applying 
subsection (c) shall be reallocated by the Secretary to other States 
that have complied with the requirements of section 3, that are 
implementing compliance plans, or are developing compliance plans 
pursuant to section 3(d).

SEC. 5. DEFINITIONS.

    For purposes of this Act the following terms have the following 
meanings:
            (1) The term ``coefficient of variation'' means the 
        standard deviation of local educational agency expenditures 
        divided by the mean per student expenditure, in which local 
        educational agencies with fewer than 250 students have been 
        excluded.
            (2) The term ``local educational agency'' has the same 
        meaning given such term in section 14101(18) of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 8801(18)).
            (3) The term ``Secretary'' means the Secretary of 
        Education.
Equal Protection School Finance Act - Provides for a system to help equalize funding for education within States. 
Makes a State ineligible for Federal funds administered by the Department of Education to support elementary and secondary education unless the coefficient of variation of per pupil expenditures in local educational agencies statewide for elementary and secondary education is greater than ten percent.  Authorizes the Secretary of Education to provide such funding to a noncompliant State if that State submits a plan which the Secretary determines will bring the State into compliance within five years. 
Sets forth procedures for compliance reporting, certification, and challenges.  Directs the Secretary to reallocate to compliant States, and States developing or implementing compliance plans, any funds that are not distributed to noncompliant States.
Equal Protection School Finance Act