A bill to provide for a teacher quality enhancement and incentive program.

SECTION 1. PURPOSE.

    The purpose of this Act is--
            (1) to encourage the best and brightest candidates to teach 
        in public elementary and secondary schools serving 
        disadvantaged populations; and
            (2) to encourage high achieving candidates to enter the 
        teaching profession who would otherwise not consider a career 
        in teaching.

SEC. 2. GRANTS AUTHORIZED.

    (a) In General.--The Secretary is authorized to award grants to at 
least 50 local educational agencies for a fiscal year to enable the 
local educational agencies to award bonuses to highly qualified 
individuals who agree to teach in elementary schools or secondary 
schools that are served by the local educational agency and located in 
high poverty areas, for a period of not less than 4 years.
    (b) Local Educational Agency Eligibility.--A local educational 
agency shall be eligible for a grant under this Act if--
            (1) not less than 20 percent of children in the schools 
        served by the local educational agency are eligible to be 
        counted under section 1124(c) of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6333(c)); or
            (2) the local educational agency is eligible to be counted 
        under section 10952 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 8272).
    (c) Requirement.--The Secretary shall award a grant under 
subsection (a) to at least 1 eligible local educational agency in each 
State.
    (d) Amount.--Grants under this section shall be awarded based on 
the number of students enrolled in schools under the jurisdiction of 
the local educational agency involved. With respect to a local 
educational agency with an enrollment of--
            (1) 1,500 or fewer students, the amount of a grant shall be 
        $22,500;
            (2) at least 1,501 but less than 5,001 students, the amount 
        of a grant shall be $112,500;
            (3) at least 5,001 but less than 15,001 students, the 
        amount of a grant shall be $150,000; and
            (4) at least 15,001 students, the amount of a grant shall 
        be $300,000.
    (e) Bonuses Not Taxed.--For purposes of the Internal Revenue Code 
of 1986, a bonus awarded under this Act shall not be includable in the 
gross income of the individual awarded the bonus.
    (f) Collaboration.--The Secretary shall collaborate with local 
educational agencies, local boards of education, and local offices of 
student financial assistance in carrying out the program assisted under 
this section.
    (g) Definition.--The definitions in section 14101 of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 8801) shall apply to 
this Act.

SEC. 3. LOCAL REQUIREMENTS.

    (a) Local Uses.--Each local educational agency receiving a grant 
under this Act shall use the funds made available under this Act to--
            (1) award bonuses to highly qualified individuals who agree 
        to teach in elementary schools or secondary schools in which at 
        least 40 percent of the children are eligible to be counted 
        under section 1124(c) of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 6333(c));
            (2) award the bonuses in accordance with subsection (b) on 
        a competitive basis taking into consideration--
                    (A) objective measures such as test scores, grade 
                point average or class rank, and such other criteria as 
                the local educational agency may determine appropriate; 
                and
                    (B) recommendations received under subsection (c); 
                and
            (3) award the bonuses in the amount of $15,000 with $7,500 
        paid after the first year of such teaching and $7,500 paid 
        after the second year of such teaching.
    (b) Bonuses.--With respect to bonuses under subsection (a)(2), the 
local educational agency shall, with respect to a local educational 
agency with an enrollment of--
            (1) 1,500 or fewer students, award bonuses to not more than 
        3 highly qualified individuals in the fiscal year involved;
            (2) at least 1,501 but less than 5,001 students, award 
        bonuses to not more than 15 highly qualified individuals;
            (3) at least 5,001 but less than 15,001 students, award 
        bonuses to not more than 20 highly qualified individuals; and
            (4) at least 15,001 students, award bonuses to not more 
        than 40 highly qualified individuals.
    (c) Prohibition.--Each local educational agency receiving a grant 
under this Act shall not use the grant funds to offset the salary of a 
teacher awarded a bonus under this Act.
    (d) Recommendations.--Each local educational agency receiving a 
grant under this Act shall establish a system for receiving a limited 
number of recommendations from institutions of higher education for 
individuals to receive bonus awards under this Act.

SEC. 4. ELIGIBILITY.

    To be eligible to receive a bonus award under this Act an 
individual--
            (1) shall enter into an agreement with the local 
        educational agency to work in a school described in section 
        3(a)(1) for not less than 4 years or repay the bonus in 
        accordance with section 6;
            (2) shall pass all State certification examinations 
        required to teach in an elementary school or secondary school 
        in the State;
            (3) shall have graduated with a 3.5 grade point average 
        from an institution of higher education, or have graduated in 
        the top 15 percent of the individual's graduating class at an 
        institution of higher education, with a bachelor's degree;
            (4) shall submit an application to the local educational 
        agency in accordance with section 5(a).

SEC. 5. APPLICATIONS; NOTIFICATION.

    (a) Application.--Each individual desiring a bonus award under this 
Act shall submit an application to a local educational agency not later 
than January 15 of each year containing such information as the local 
educational agency may require.
    (b) Notification.--A local educational agency shall notify 
individuals of their bonus awards by May 1 of each year.

SEC. 6. REPAYMENT.

    Each individual who receives a bonus award under this Act and does 
not comply with the terms of the agreement described in section 4(1) 
within 6 years of receiving the first bonus award payment under this 
Act, without an excuse that is acceptable to the local educational 
agency, shall repay to the local educational agency the amount of the 
bonus awards received plus interest. Repayment shall begin not later 
than 2 years after the local educational agency determines the 
individual is in noncompliance with the agreement.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this Act 
$15,000,000 for each of the fiscal years 2000 through 2004.

Summary: Authorizes the Secretary of Education to make grants to local educational agencies (LEAs) to award nontaxable bonuses to highly qualified individuals who agree to teach in elementary schools or secondary schools that are served by the LEA and located in high poverty areas. Requires such grants to be made to at least 50 LEAs per fiscal year, and to at least one eligible LEA in each State, for a period of not less than four years. Sets forth requirements relating to: (1) LEA, school, and individual eligibility, (2) grant and bonus amounts. (3) a competitive award process based on objective measures and recommendations from higher education institutions, and (4) service obligations or award repayment. Authorizes appropriations.