Dollars for Scholars Community Scholarship Foundation Development Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dollars for Scholars Community 
Scholarship Foundation Development Act''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) the local community, when properly organized and 
        challenged, is one of the best sources of academic support, 
        motivation toward achievement, and financial resources for 
        aspiring college students;
            (2) local communities, working to complement or augment 
        services currently being offered by area schools and colleges, 
        can raise the educational expectations and increase the rate of 
        college attendance of their youth by forming locally based 
        organizations that provide both academic support (including 
        guidance, counseling, mentoring, tutoring, encouragement, and 
        recognition) and tangible, locally raised, effectively 
        targeted, publicly recognized financial assistance;
            (3) proven methods of stimulating these community efforts 
        can be promoted through Federal support for the establishment 
        of area program centers to organize and challenge community 
        efforts to develop educational incentives and support for local 
        students; and
            (4) using Federal funds to leverage private contributions 
        to help students attain educational and career goals is an 
        efficient and effective investment of scarce taxpayer-provided 
        resources.

SEC. 3. PURPOSE; ENDOWMENT GRANT AUTHORIZED.

    (a) Purpose.--It is the purpose of this Act to establish and endow 
25 area program centers to promote the development of locally based, 
volunteer organizations which promote higher education goals in 
students by (1) providing academic support, including guidance, 
counseling, mentoring, tutoring, and recognition; and (2) providing 
financial assistance for the pursuit of post-secondary education.
    (b) Authority.--From the funds appropriated under section 5, the 
Secretary shall make an endowment grant to an eligible organization to 
support the establishment, or ongoing work, or both, of 25 area program 
centers to foster the development of locally based, volunteer 
organizations to improve high school graduation rates and postsecondary 
attendance through the provision of academic support services and 
tangible financial assistance for the pursuit of postsecondary 
education.

SEC. 4. ELIGIBLE ORGANIZATION.

    (a) National Organization.--An organization shall be eligible for 
an endowment grant under section 3 if such organization--
            (1) has extensive experience in creating, developing, and 
        sustaining broadly based, volunteer-operated, community 
        scholarship foundations;
            (2) has demonstrated the capacity to sustain newly created 
        community scholarship foundations in towns, cities, and 
        neighborhoods through ongoing training and support programs;
            (3) is exempt from income taxes under section 501(c)(3) of 
        the Internal Revenue Code of 1986;
            (4) is a publicly supported organization within the meaning 
        of section 170(b)(1)(A)(vi) of such Code;
            (5) is not a private foundation within the meaning of 
        section 509(a) of such Code;
            (6) ensures that any of its local affiliated chapters meet 
        the criteria specified in paragraphs (3), (4), and (5);
            (7) has received a ruling that provides the option of each 
        community scholarship foundation affiliated with the 
        organization to file Form 990 under the organization's group 
        roster; and
            (8) has a program for or experience in cooperating with 
        secondary and postsecondary institutions in carrying out its 
        scholarship and academic support activities.
    (b) Regional Centers.--The area program centers established under 
this program shall--
            (1) be part of, responsible to, and overseen by the 
        eligible national organization; and
            (2) be staffed by professionals trained to create, develop, 
        and sustain broadly based, volunteer-operated, community 
        scholarship foundations in towns, cities, and neighborhoods.
    (c) Local Affiliated Chapters.--Each local affiliate of an eligible 
organization shall--
            (1) be a nonprofit organization, recognized as tax exempt 
        under section 501(3)(C) of the Internal Revenue Code of 1986 
        (or shall meet this criteria through affiliation with the 
        eligible implementing parent organization in accordance with 
        subsection (a) of this section);
            (2) be formed for the purpose of providing educational 
        scholarships for local residents;
            (3) solicit broad-based community support in its fund-
        raising activities;
            (4) be broadly representative of the local community in the 
        structures of its volunteer-operated organization and have a 
        board of directors that includes leaders from local 
        neighborhood organizations and neighborhood residents, such as 
        school or college personnel, parents, students, community 
        agency representatives, and representatives of the business 
        community;
            (5) agree to award scholarships without regard to age, sex, 
        marital status, race, creed, color, religion, national origin 
        or the presence of any mental, sensory, or physical disability; 
        and
            (6) agree to give priority in awarding scholarships to 
        needy students in its local community.

SEC. 5. CONDITIONS FOR GRANT.

    The Secretary shall make the endowment grant under this Act on the 
basis of an agreement with an eligible organization that--
            (1) contains such terms and conditions as may be necessary 
        to ensure that the endowment funds will be used to support an 
        area director and area program office that will work with local 
        communities to establish volunteer community scholarship 
        foundations and provide ongoing technical assistance, training 
        workshops, and other activities to help ensure the ongoing 
        success of the local organizations;
            (2) contains terms and conditions requiring the 
        organization to establish or support, or both, area program 
        centers serving each area of the United States (including the 
        territories and possessions of the United States);
            (3) contains terms and conditions specifying that, if 
        appropriated funds are not sufficient to support 25 area 
        program centers, the implementing organization will give 
        preference to those areas of the country with higher than 
        average dropout rates and lower than average postsecondary 
        institutional enrollment;
            (4) requires the eligible organization to submit, for a 
        period of up to five years following award of the grant, an 
        annual report to the Secretary that--
                    (A) contains a description of the programs and 
                activities supported by the endowment fund;
                    (B) contains the audited financial statements of 
                eligible organization for the preceding fiscal year;
                    (C) contains a plan for the programs and activities 
                to be supported by the endowment during the 3 
                succeeding fiscal years; and
                    (D) contains or is accompanied by such evaluations 
                of the programs and activities supported by the 
                endowment fund as the Secretary may require; and
            (5) contains such assurances as the Secretary may require 
        with respect to the management and operation of the endowment 
        funds.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated $40,000,000 to carry out 
this Act.

SEC. 7. DEFINITIONS.

    For the purposes of this Act--
            (1) the term ``Secretary'' means the Secretary of 
        Education; and
            (2) the term ``community scholarship foundation'' means a 
        tax-exempt, publicly supported, locally organized, volunteer-
        operated, broadly representative organization (formed in towns, 
        rural communities, or neighborhoods of large cities) whose 
        purpose is to raise funds for local scholarships, make 
        scholarship awards to local deserving students, and provide 
        academic support activities to encourage educational 
        achievement.

Summary: Dollars for Scholars Community Scholarship Foundation Development Act - Directs the Secretary of Education to make an endowment grant to an eligible organization to support the establishment of 25 area program centers to foster development of locally based, volunteer organizations to improve high school graduation rates and postsecondary attendance through providing academic support services and financial assistance for postsecondary education. Sets forth requirements for the eligible organization, the area program centers, and the local affiliates of the eligible organization. Sets forth conditions for the endowment grant. Authorizes appropriations.