II

106TH CONGRESS

1ST SESSION S. 50

To improve options for excellence in education.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mrs. HUTCHISON (for herself and Mr. DEWINE) introduced the following bill;

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To improve options for excellence in education.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Options for Excellence

5 in Education Act of 1999’’.

6 SEC. 2. FINDINGS.

7 The Congress makes the following findings:

8 (1) A quality, safe, and effective education for

9 every American child has and will continue to be key

10 to our success or failure as a Nation.
2

•S 50 IS

1 (2) As America continues to lead the world eco2 nomic and technological revolution, our Nation must

3 strengthen our Nation’s commitment to ensuring

4 that every child is equipped to face the challenges of

5 the next century.

6 (3) Since the inception of public education, it

7 has been the States and local communities that have

8 built and shaped our public school system.

9 (4) While the Federal Government must con10 tinue to have a strong supportive role in public edu11 cation, it should reward successful State and local

12 policies, not dictate what those policies should be.

13 (5) The recent success of many States in im14 proving their educational standards and outcomes

15 proves that State and local education agencies are in

16 the best position to understand the unique needs of

17 their students and to develop and implement appro18 priate educational reforms.

19 (6) Although several Federal education pro20 grams today do offer some measure of flexibility, far

21 too many mandates, conditions, and reporting re22 quirements exist, draining precious dollars away

23 from the classroom.
3

•S 50 IS

1 (7) The proper focus of Federal education pol2 icy should be on student performance outcomes, not

3 on process.

4 (8) Our Nation’s children are far too precious

5 to delay a comprehensive change in the way the Fed6 eral Government supports and encourages excellence

7 in our Nation’s public schools.

8 SEC. 3. DEFINITIONS.

9 In this Act:

10 (1) IN GENERAL.—The terms ‘‘elementary

11 school’’, ‘‘local educational agency’’, ‘‘secondary

12 school’’, ‘‘Secretary’’, ‘‘State’’, and ‘‘State edu13 cational agency’’ have the meanings given the terms

14 in section 14101 of the Elementary and Secondary

15 Education Act of 1965.

16 (2) POVERTY LINE.—The term ‘‘poverty line’’

17 means the poverty line (as defined by the Office of

18 Management and Budget, and revised annually in

19 accordance with section 673(2) of the Community

20 Services Block Grant Act (42 U.S.C. 9902(2)) appli21 cable to a family of the size involved.

22 SEC. 4. ED-FLEX EXPANSION.

23 (a) PROGRAM ESTABLISHED.—The Secretary shall

24 carry out an education flexibility program under which the

25 Secretary authorizes qualified State educational agencies
4

•S 50 IS

1 to waive Federal statutory and regulatory requirements

2 applicable to State educational agencies, local educational

3 agencies, and individual schools under all or a portion of

4 the requirements of any State administered program au5 thorized by the Elementary and Secondary Education Act

6 of 1965 (other than a program authorized under title VIII

7 of the Elementary and Secondary Education Act of 1965),

8 the Goals 2000: Educate America Act, and the Carl D.

9 Perkins Vocational and Technical Education Act of 1998,

10 including programs under titles I, II, III, IV, and VI, and

11 part C of title VII, of the Elementary and Secondary Edu12 cation Act of 1965.

13 (b) REQUIREMENTS.—

14 (1) SUPPLEMENT NOT SUPPLANT.—Federal

15 funds received under any of the programs for which

16 a waiver is granted under this section may only be

17 used to supplement, and not supplant State and

18 local funds that would otherwise be spent to carry

19 out the fundamental purposes of the programs.

20 (2) ADMINISTRATIVE EXPENSES.—If the Sec21 retary determines that a State educational agency is

22 spending for administrative expenses a greater per23 centage of the funds awarded under a program for

24 which a waiver is granted under this section than

25 the State spent in the year immediately preceding
5

•S 50 IS

1 the granting of the waiver, then the Secretary shall

2 reduce the funds made available to that State under

3 the program in an amount equal to the increased

4 expenditure.

5 (c) DEFINITION OF QUALIFIED STATE EDUCATIONAL

6 AGENCY.—In this section the term ‘‘qualified State edu7 cational agency’’ means a State educational agency that

8 has in place or develops specific, measurable educational

9 improvement goals and expected outcomes, and com10 prehensive, challenging statewide student assessments.

11 (d) DURATION.—Each waiver under subsection (a)

12 shall be granted for a period of 5 years.

13 (e) REIMPOSITION OF SPECIFIC STATUTORY OR REG14 ULATORY REQUIREMENTS.—

15 (1) SPECIFIC WAIVERS AUTHORIZED.—If the

16 Secretary finds that the fundamental purposes of

17 any program for which a waiver is granted under

18 subsection (a) are not being achieved, then the Sec19 retary may require the State educational agency to

20 submit an application for a waiver of specific statu21 tory or regulatory requirements under that program.

22 The application shall set forth the justification for

23 failing to meet the fundamental purposes of that

24 program, including how the waiver of the specific re25 quirements will help to raise overall student per-
6

•S 50 IS

1 formance. If the Secretary finds that the granting of

2 the waiver of the specific requirements will help to

3 raise overall student performance, then the Sec4 retary shall grant a 2-year waiver of the specific re5 quirements, except that the duration of the waiver of

6 the specific requirements shall not exceed the 5 year

7 period applicable to the State educational agency’s

8 waiver authority under subsection (a).

9 (2) FAILURE.—If the Secretary does not grant

10 a waiver of the specific requirements under this sub11 section, then the Secretary may reimpose any exist12 ing statutory or regulatory requirements under the

13 program that are necessary to ensure that the fun14 damental purposes of the program are achieved.

15 (f) APPLICATION.—Each qualified State educational

16 agency desiring a grant under this section shall submit

17 an application to the Secretary at such time, in such man18 ner, and accompanied by such information as the Sec19 retary may require.

20 (g) REPORTS.—

21 (1) STATE EDUCATIONAL AGENCY REPORT.—

22 Each qualified State educational agency granted

23 waiver authority under this section shall—
7

•S 50 IS

1 (A) annually report the results of the stu2 dent assessments described in subsection (c) to

3 the Secretary; and

4 (B) not less than annually submit a com5 prehensive report to the Secretary on the devel6 opment, implementation, and results of the

7 goals and outcomes described in subsection (c),

8 including an explanation of how the State edu9 cational agency is achieving the fundamental

10 purposes of each of the programs for which a

11 waiver is granted under this section.

12 (2) SECRETARY.—The Secretary shall compile

13 the results of the student assessments and make the

14 results widely available (including via the Internet)

15 to the general public in a standardized, simplified

16 format, including student performance results at the

17 State, school district, and individual school levels,

18 and, where practicable, how the results compare with

19 previous years.

20 SEC. 5. EXCELLENCE GRANTS.

21 (a) AUTHORIZATION OF APPROPRIATIONS.—There

22 are authorized to be appropriated $3,000,000,000 for fis23 cal year 2000, and such sums as may be necessary for

24 each of the fiscal years 2001 through 2004 to carry out

25 this section, of which—
8

•S 50 IS

1 (1) $1,000,000,000 shall be available to carry

2 out subsection (b) for each fiscal year;

3 (2) $1,000,000,000 shall be available to carry

4 out subsection (c) for each fiscal year; and

5 (3) $1,000,000,000 shall be available to carry

6 out subsection (d) for each fiscal year.

7 (b) STUDENT EXCELLENCE.—

8 (1) ALLOTMENT.—From funds made available

9 under subsection (a)(1) for a fiscal year, the Sec10 retary shall make an allotment to each State edu11 cational agency in an amount that bears the same

12 relation to such funds as the amount the State re13 ceived under part A of title I of the Elementary and

14 Secondary Education Act of 1965 for such year

15 bears to the amount received by all States under

16 such part for such year.

17 (2) GRANTS.—From amounts made available

18 under paragraph (1) the State educational agency

19 shall award grants on a competitive basis to 25 per20 cent of the local educational agencies in the State

21 that demonstrate in the application submitted under

22 subsection (e)—

23 (A) the greatest improvement, from a year

24 to the succeeding year, in student performance,
9

•S 50 IS

1 as measured by the State educational agency;

2 or

3 (B) the most innovative, comprehensive

4 and cost-effective approaches to raising student

5 performance.

6 (3) USES.—Grant funds awarded under this

7 subsection shall be used to further the most success8 ful and cost-effective elements of curriculum and

9 standards development, student performance evalua10 tion, student motivation, and other efforts directly

11 related to student performance.

12 (c) SCHOOL EXCELLENCE.—

13 (1) ALLOTMENT.—From funds made available

14 under subsection (a)(2) for a fiscal year, the Sec15 retary shall make an allotment to each State edu16 cational agency in an amount that bears the same

17 relation to such funds as the amount the State re18 ceived under part A of title I of the Elementary and

19 Secondary Education Act of 1965 for such year

20 bears to the amount received by all States under

21 such part for such year.

22 (2) IN GENERAL.—From amounts made avail23 able under paragraph (1), the State educational

24 agency shall award grants on a competitive basis to

25 25 percent of the elementary schools or secondary
10

•S 50 IS

1 schools in the State that demonstrate in the applica2 tion submitted under subsection (e)—

3 (A) the greatest improvement, from a year

4 to the succeeding year, in student performance,

5 as measured by the State educational agency;

6 or

7 (B) the most innovative, comprehensive,

8 and cost-effective approaches to school support.

9 (2) USES.—Grant funds awarded under this

10 subsection shall be used to further the most success11 ful and cost-effective elements of school systemic

12 support, including technology development and ad13 ministrative enhancement.

14 (d) TEACHER EXCELLENCE.—

15 (1) IN GENERAL.—From amounts made avail16 able under subsection (a)(3) for a fiscal year, the

17 Secretary shall award grants on a competitive basis

18 to State educational agencies that demonstrate in

19 the application submitted under subsection (e)—

20 (A) the greatest improvement, from a year

21 to the succeeding year, with respect to strength22 ening the educational, certification, and per23 formance standards of teachers in the State; or
11

•S 50 IS

1 (B) the most innovative, comprehensive,

2 and cost-effective approaches to teacher certifi3 cation and professional development.

4 (2) USES.—Grant funds awarded under this

5 subsection shall be used to further the most success6 ful elements of the State educational agency’s efforts

7 regarding the standards described in paragraph

8 (1)(A).

9 (3) PRIORITY.—In awarding grants under this

10 subsection, the Secretary shall give priority to State

11 educational agencies that—

12 (A) emphasize and reward substantive

13 mastery over subject matter taught; and

14 (B) provide incentives to reward teacher

15 performance.

16 (e) APPLICATION.—Each State educational agency

17 desiring a grant under this section shall submit to the Sec18 retary an application at such time, in such manner, and

19 accompanied by such information as the Secretary may

20 require.

21 SEC. 6. EDUCATIONAL OPTIONS.

22 (a) PROGRAM AUTHORIZED.—

23 (1) DETERMINATION.—For each State the Sec24 retary shall determine the 25 percent of local edu25 cational agencies within the State that demonstrate
12

•S 50 IS

1 in the application submitted under subsection (c),

2 that the agencies serve the lowest performing stu3 dents in the State, as measured by the State edu4 cational agency.

5 (2) REDUCTIONS.—The Secretary shall reduce

6 the amount of Federal education assistance provided

7 under the provisions of law described in section 4(a)

8 and that is provided to each local educational agency

9 for which a determination is made under paragraph

10 (1) for a fiscal year by an amount equal to 5 percent

11 of the amount of such assistance awarded (either di12 rectly or through the State educational agency) to

13 the local educational agency for the preceding fiscal

14 year. Such funds may be referred to as a local edu15 cational agency’s ‘‘School Improvement Fund’’.

16 (3) CHOICE PROGRAMS.—The Secretary shall

17 make the total amount reduced under paragraph (2)

18 for each local educational agency for which a deter19 mination is made under paragraph (1) available to

20 the State to carry out 1 or more choice programs

21 described in subsection (b).

22 (b) CHOICE PROGRAMS.—

23 (1) PUBLIC SCHOOL CHOICE.—A State may es24 tablish a public school choice program that meets

25 the following requirements:
13

•S 50 IS

1 (A) The program shall allow students at2 tending public schools (including at minimum

3 students attending a school served by a local

4 educational agency, for which a determination

5 is made under subsection (a)(1)) to attend the

6 public school of their choice within the school

7 district, region, or State, as provided by the

8 State.

9 (B)(i) The program shall provide that if a

10 student is unable to enroll in a high performing

11 school within the student’s school district, then

12 the student shall be allowed to enroll in a school

13 within a reasonable distance from the student’s

14 residence.

15 (ii) The term ‘‘high performing school’’

16 means a school at which student performance,

17 as measured by the State, ranks in the top half

18 of all schools statewide.

19 (C) The program shall not require the

20 State to provide transportation or other costs

21 incurred by the student if the school chosen by

22 the student is farther than 50 miles from the

23 student’s residence.

24 (D) Federal funds made available under

25 this program shall be used for all costs associ-
14

•S 50 IS

1 ated with adequately implementing the pro2 gram, including transportation, tuition transfer

3 payments to schools to which students transfer

4 under the program, school construction if nec5 essary to accommodate high-demand schools,

6 public education campaigns to inform students

7 and parents about the program, administrative

8 costs, and other costs reasonably necessary to

9 implement the program.

10 (2) PRIVATE SCHOOL CHOICE.—A State may

11 establish a private school choice program that meets

12 the following requirements:

13 (A) The program shall enable students at14 tending public schools in the State, including at

15 a minimum students whose families have in16 comes below the poverty line, whose perform17 ance on statewide student performance exami18 nations place the students in the bottom half of

19 students at their grade level, and who attend

20 schools served by local educational agencies for

21 which a determination is made under subsection

22 (a)(1), as measured or determined by the State,

23 to attend the private or parochial school of their

24 choice.
15

•S 50 IS

1 (B) Federal funds provided under the pro2 gram may be used—

3 (i) by parents with children participat4 ing in the program, for tuition payments to

5 private or parochial schools, not to exceed

6 $5,000 per student, per year; and

7 (ii) for administrative and other costs

8 directly related to implementation of the

9 program.

10 (3) ALTERNATIVE SCHOOL CHOICE.—A State

11 may establish an alternative school choice program

12 that meets the following requirements:

13 (A) The program shall improve the edu14 cational options available to students and their

15 parents through greater school choice and com16 petition, including the establishment or expan17 sion of charter schools and magnet schools.

18 Such program shall be targeted, at a minimum,

19 to serving local educational agencies for which

20 a determination is made under subsection

21 (a)(1) and other local educational agencies that

22 the State determines to be chronically under23 performing.

24 (B) If, after 2 years of implementing the

25 program, the Secretary determines that a State
16

•S 50 IS

1 has failed to substantially improve and expand

2 the quality and quantity of educational options

3 available to students served by the local edu4 cational agencies described in subparagraph

5 (A), then the funds shall be used by the State

6 to implement a public school choice program

7 under paragraph (1) or a private school choice

8 program under paragraph (2).

9 SEC. 7. CAREERS TO CLASSROOMS.

10 (a) PLACEMENT PROGRAM.—The Secretary may es11 tablish a program of awarding grants to States—

12 (1) to enable the States to assist eligible indi13 viduals to obtain—

14 (A) certification or licensure as elementary

15 school or secondary school teachers; or

16 (B) the credentials necessary to serve as

17 teachers’ aides; and

18 (2) to facilitate the employment of the eligible

19 individuals by local educational agencies identified

20 under subsection (b)(2) as experiencing a shortage

21 of teachers or teachers’ aides.

22 (b) STATES WITH ALTERNATIVE CERTIFICATION

23 REQUIREMENTS AND TEACHER AND TEACHER’S AIDE

24 SHORTAGES.—Upon the establishment of the placement
17

•S 50 IS

1 program authorized by subsection (a), the Secretary

2 shall—

3 (1) conduct a survey of States to identify those

4 States that have alternative certification or licensure

5 requirements for teachers;

6 (2) periodically request information from States

7 identified under paragraph (1) to identify in these

8 States those local educational agencies that—

9 (A) are receiving grants under title I of the

10 Elementary and Secondary Education Act of

11 1965 (20 U.S.C. 6301 et seq.) as a result of

12 having within their jurisdictions concentrations

13 of children from low-income families; and

14 (B) are also experiencing a shortage of

15 qualified teachers, in particular a shortage of

16 science, mathematics, computer science, or engi17 neering teachers; and

18 (3) periodically request information from all

19 States to identify local educational agencies that—

20 (A) are receiving grants under title I of the

21 Elementary and Secondary Education Act of

22 1965 (20 U.S.C. 6301 et seq.) as a result of

23 having within their jurisdictions concentrations

24 of children from low-income families; and
18

•S 50 IS

1 (B) are experiencing a shortage of teach2 ers’ aides.

3 (c) DEFINITION OF ELIGIBLE INDIVIDUAL.—In this

4 section the term ‘‘eligible individual’’ means an individual

5 who has received—

6 (1) in the case of an individual applying for as7 sistance for placement as an elementary school or

8 secondary school teacher, a baccalaureate or ad9 vanced degree from an accredited institution of high10 er education; or

11 (2) in the case of an individual applying for as12 sistance for placement as a teacher’s aide in an ele13 mentary school or secondary school, an associate,

14 baccalaureate, or advanced degree from an accred15 ited institution of higher education or a junior or

16 community college.

17 (d) SELECTION OF ELIGIBLE INDIVIDUALS.—

18 (1) IN GENERAL.—Selection of eligible individ19 uals to participate in the placement program author20 ized by subsection (a) shall be made on the basis of

21 applications submitted to a State. An application

22 shall be in such form and contain such information

23 as the State may require.

24 (2) PRIORITY.—In selecting eligible individuals

25 to receive assistance for placement as elementary
19

•S 50 IS

1 school or secondary school teachers, the State shall

2 give priority to eligible individuals who—

3 (A) have substantial, demonstrated career

4 experience in science, mathematics, computer

5 science, or engineering and agree to seek em6 ployment as science, mathematics, computer

7 science, or engineering teachers in elementary

8 schools or secondary schools; or

9 (B) have substantial, demonstrated career

10 experience in another subject area identified by

11 the State, as important for national educational

12 objectives and agree to seek employment in that

13 subject area in elementary schools or secondary

14 schools.

15 (e) AGREEMENT.—An eligible individual selected to

16 participate in the placement program authorized by sub17 section (a) shall be required to enter into an agreement

18 with the State, in which the eligible individual agrees—

19 (1) to obtain, within such time as the State

20 may require, certification or licensure as an elemen21 tary school or secondary school teacher or the nec22 essary credentials to serve as a teacher’s aide in an

23 elementary school or secondary school; and

24 (2) to accept—
20

•S 50 IS

1 (A) in the case of an eligible individual se2 lected for assistance for placement as a teacher,

3 an offer of full-time employment as an elemen4 tary school or secondary school teacher for not

5 less than two school years with a local edu6 cational agency identified under subsection

7 (b)(2), to begin the school year after obtaining

8 that certification or licensure; or

9 (B) in the case of an eligible individual se10 lected for assistance for placement as a teach11 er’s aide, an offer of full-time employment as a

12 teacher’s aide in an elementary school or sec13 ondary school for not less than 2 school years

14 with a local educational agency identified under

15 subsection (b)(3), to begin the school year after

16 obtaining the necessary credentials.

17 (f) STIPEND FOR PARTICIPANTS.—

18 (1) IN GENERAL.—The State shall pay to an el19 igible individual participating in the placement pro20 gram a stipend in an amount equal to the lesser

21 of—

22 (A) $5,000; or

23 (B) the total costs of the type described in

24 paragraphs (1), (2), (3), (8), and (9) of section

25 472 of the Higher Education Act of 1965 (20
21

•S 50 IS

1 U.S.C. 1087ll) incurred by the eligible individ2 ual while obtaining teacher certification or li3 censure or the necessary credentials to serve as

4 a teacher’s aide and employment as an elemen5 tary school or secondary school teacher or

6 teacher aide.

7 (2) RELATION TO OTHER ASSISTANCE.—A sti8 pend paid under paragraph (1) shall be taken into

9 account in determining the eligibility of the eligible

10 individual for Federal student financial assistance

11 provided under title IV of the Higher Education Act

12 of 1965 (20 U.S.C. 1070 et seq.).

13 (g) GRANTS TO FACILITATE PLACEMENT.—

14 (1) TEACHERS.—In the case of an eligible indi15 vidual in the placement program obtaining teacher

16 certification or licensure, the State may offer to

17 enter into an agreement under this subsection with

18 the first local educational agency identified under

19 subsection (b)(2) that employs the eligible individual

20 as a full-time elementary school or secondary school

21 teacher after the eligible individual obtains teacher

22 certification or licensure.

23 (2) TEACHER’S AIDES.—In the case of an eligi24 ble individual in the program obtaining credentials

25 to serve as a teacher’s aide, the State may offer to
22

•S 50 IS

1 enter into an agreement under this subsection with

2 the first local educational agency identified under

3 subsection (b)(3) that employs the participant as a

4 full-time teacher’s aide.

5 (3) AGREEMENTS CONTRACTS.—Under an

6 agreement referred to in paragraph (1) or (2)—

7 (A) the local educational agency shall

8 agree to employ the eligible individual full time

9 for not less than 2 consecutive school years (at

10 a basic salary to be certified to the State) in a

11 school of the local educational agency that—

12 (i) serves a concentration of children

13 from low-income families; and

14 (ii) has an exceptional need for eligi15 ble individuals; and

16 (B) the State shall agree to pay to the

17 local educational agency for each eligible indi18 vidual, from amounts provided under this sec19 tion, $5,000 per year for a maximum of 2

20 years.

21 (h) REIMBURSEMENT UNDER CERTAIN CIR22 CUMSTANCES.—

23 (1) IN GENERAL.—If an eligible individual in

24 the placement program fails to obtain teacher certifi25 cation or licensure or employment as an elementary
23

•S 50 IS

1 school or secondary school teacher or employment as

2 a teacher’s aide as required under the agreement or

3 voluntarily leaves, or is terminated for cause, from

4 the employment during the 2 years of required serv5 ice, the eligible individual shall be required to reim6 burse the State for any stipend paid to the eligible

7 individual under subsection (f)(1) in an amount that

8 bears the same ratio to the amount of the stipend

9 as the unserved portion of required service bears to

10 the 2 years of required service. A State shall for11 ward the proceeds of any reimbursement received

12 under this paragraph to the Secretary.

13 (2) OBLIGATION TO REIMBURSE.—The obliga14 tion to reimburse the State under this subsection is,

15 for all purposes, a debt owing the United States. A

16 discharge in bankruptcy under title 11 shall not re17 lease a participant from the obligation to reimburse

18 the State. Any amount owed by an eligible individual

19 under paragraph (1) shall bear interest at the rate

20 equal to the highest rate being paid by the United

21 States on the day on which the reimbursement is de22 termined to be due for securities having maturities

23 of 90 days or less and shall accrue from the day on

24 which the eligible individual is first notified of the

25 amount due.
24

•S 50 IS

1 (i) EXCEPTIONS TO REIMBURSEMENT PROVISIONS.—

2 (1) IN GENERAL.—An eligible individual in the

3 placement program shall not be considered to be in

4 violation of an agreement entered into under sub5 section (e) during any period in which the

6 participant—

7 (A) is pursuing a full-time course of study

8 related to the field of teaching at an eligible in9 stitution;

10 (B) is serving on active duty as a member

11 of the Armed Forces;

12 (C) is temporarily totally disabled for a pe13 riod of time not to exceed 3 years as established

14 by sworn affidavit of a qualified physician;

15 (D) is unable to secure employment for a

16 period not to exceed 12 months by reason of the

17 care required by a spouse who is disabled;

18 (E) is seeking and unable to find full-time

19 employment as a teacher or teacher’s aide in an

20 elementary school or secondary school for a sin21 gle period not to exceed 27 months; or

22 (F) satisfies the provisions of additional

23 reimbursement exceptions that may be pre24 scribed by the Secretary.
25

•S 50 IS

1 (2) FORGIVENESS.—An eligible individual shall

2 be excused from reimbursement under subsection (h)

3 if the eligible individual becomes permanently totally

4 disabled as established by sworn affidavit of a quali5 fied physician. The Secretary may also waive reim6 bursement in cases of extreme hardship to the par7 ticipant, as determined by the Secretary.

8 (j) DEFINITIONS.—In this section:

9 (1) STATE.—The term ‘‘State’’ means each of

10 the several States of the United States, the District

11 of Columbia, American Samoa, the Federated States

12 of Micronesia, Guam, the Republic of the Marshall

13 Islands, the Commonwealth of the Northern Mari14 ana Islands, the Commonwealth of Puerto Rico, the

15 Republic of Palau, and the United States Virgin Is16 lands.

17 (2) ALTERNATIVE CERTIFICATION OR LICEN18 SURE.—The term ‘‘alternative certification or licen19 sure requirements’’ means State or local teacher cer20 tification or licensure requirements that permit a

21 demonstrated competence in appropriate subject

22 areas gained in careers outside of education to be

23 substituted for traditional teacher training course

24 work.
26

•S 50 IS

1 SEC. 8. TREATMENT OF QUALIFIED PUBLIC EDUCATIONAL

2 FACILITY BONDS AS EXEMPT FACILITY

3 BONDS.

4 (a) TREATMENT AS EXEMPT FACILITY BOND.—Sub5 section (a) of section 142 of the Internal Revenue Code

6 of 1986 (relating to exempt facility bond) is amended by

7 striking ‘‘or’’ at the end of paragraph (11), by striking

8 the period at the end of paragraph (12) and inserting ‘‘,

9 or’’, and by adding at the end the following:

10 ‘‘(13) qualified public educational facilities.’’.

11 (b) QUALIFIED PUBLIC EDUCATIONAL FACILI12 TIES.—Section 142 of the Internal Revenue Code of 1986

13 is amended by adding at the end the following:

14 ‘‘(k) QUALIFIED PUBLIC EDUCATIONAL FACILI15 TIES.—

16 ‘‘(1) IN GENERAL.—For purposes of subsection

17 (a)(13), the term ‘qualified public educational facil18 ity’ means any school facility which is—

19 ‘‘(A) part of a public elementary school or

20 a public secondary school,

21 ‘‘(B) except as provided in paragraph

22 (7)(B)(iii), located in a high-growth school dis23 trict or a low-income school district, and

24 ‘‘(C) owned by a private, for-profit cor25 poration pursuant to a public-private partner-
27

•S 50 IS

1 ship agreement with a State or local edu2 cational agency described in paragraph (2).

3 ‘‘(2) PUBLIC-PRIVATE PARTNERSHIP AGREE4 MENT DESCRIBED.—A public-private partnership

5 agreement is described in this paragraph if it is an

6 agreement—

7 ‘‘(A) under which the corporation agrees—

8 ‘‘(i) to do 1 or more of the following:

9 construct, rehabilitate, refurbish, or equip

10 a school facility, and

11 ‘‘(ii) at the end of the contract term,

12 to transfer the school facility to such agen13 cy for no additional consideration, and

14 ‘‘(B) the term of which does not exceed the

15 term of the underlying issue.

16 ‘‘(3) SCHOOL FACILITY.—For purposes of this

17 subsection, the term ‘school facility’ means—

18 ‘‘(A) school buildings,

19 ‘‘(B) functionally related and subordinate

20 facilities and land with respect to such build21 ings, including any stadium or other facility pri22 marily used for school events, and

23 ‘‘(C) any property, to which section 168

24 applies (or would apply but for section 179), for

25 use in the facility.
28

•S 50 IS

1 ‘‘(4) PUBLIC SCHOOLS.—For purposes of this

2 subsection, the terms ‘elementary school’ and ‘sec3 ondary school’ have the meanings given such terms

4 by section 14101 of the Elementary and Secondary

5 Education Act of 1965 (20 U.S.C. 8801), as in ef6 fect on the date of the enactment of this subsection.

7 ‘‘(5) HIGH-GROWTH SCHOOL DISTRICT.—For

8 purposes of this subsection, the term ‘high-growth

9 school district’ means a school district established

10 under State law which had an enrollment of at least

11 5,000 students in the second academic year preced12 ing the date of the issuance of the bond and an in13 crease in student enrollment of at least 20 percent

14 during the 5-year period ending with such academic

15 year.

16 ‘‘(6) LOW-INCOME SCHOOL DISTRICT.—For

17 purposes of this subsection—

18 ‘‘(A) IN GENERAL.—The term ‘low-income

19 school district’ means a school district estab20 lished under State law 35 percent of the enroll21 ment of which is students from families with in22 comes below the Federal poverty line.

23 ‘‘(B) FEDERAL POVERTY LINE.—The term

24 ‘Federal poverty line’ means the income official

25 poverty line (as defined by the Office of Man-
29

•S 50 IS

1 agement and Budget, and revised annually in

2 accordance with section 673(2) of the Omnibus

3 Budget Reconciliation Act of 1981) applicable

4 to a family of the size involved.

5 ‘‘(7) ANNUAL AGGREGATE FACE AMOUNT OF

6 TAX-EXEMPT FINANCING.—

7 ‘‘(A) IN GENERAL.—An issue shall not be

8 treated as an issue described in subsection

9 (a)(13) if the aggregate face amount of bonds

10 issued by the State pursuant thereto (when

11 added to the aggregate face amount of bonds

12 previously so issued during the calendar year)

13 exceeds an amount equal to the greater of—

14 ‘‘(i) $10 multiplied by the State popu15 lation, or

16 ‘‘(ii) $20,000,000.

17 ‘‘(B) ALLOCATION RULES.—

18 ‘‘(i) IN GENERAL.—Except as other19 wise provided in this subparagraph, the

20 State may allocate in a calendar year the

21 amount described in subparagraph (A) for

22 such year in such manner as the State de23 termines appropriate.

24 ‘‘(ii) RULES FOR CARRYFORWARD OF

25 UNUSED AMOUNT.—With respect to any
30

•S 50 IS

1 calendar year, a State may make an elec2 tion under rules similar to the rules of sec3 tion 146(f), except that the sole

4 carryforward purpose with respect to such

5 election is the issuance of exempt facility

6 bonds described in section 142(a)(13).

7 ‘‘(iii) SPECIAL ALLOCATION RULE FOR

8 SCHOOLS OUTSIDE HIGH-GROWTH OR LOW9 INCOME SCHOOL DISTRICTS.—A State may

10 elect to allocate an aggregate face amount

11 of bonds not to exceed $5,000,000 from

12 the amount described in subparagraph (A)

13 for each calendar year for qualified public

14 educational facilities without regard to the

15 requirement under paragraph (1)(B).’’.

16 (c) EXEMPTION FROM GENERAL STATE VOLUME

17 CAPS.—Paragraph (3) of section 146(g) of the Internal

18 Revenue Code of 1986 (relating to exception for certain

19 bonds) is amended—

20 (1) by striking ‘‘or (12)’’ and inserting ‘‘(12),

21 or (13)’’, and

22 (2) by striking ‘‘and environmental enhance23 ments of hydroelectric generating facilities’’ and in24 serting ‘‘environmental enhancements of hydro-
31

•S 50 IS

1 electric generating facilities, and qualified public

2 educational facilities’’.

3 (d) EXEMPTION FROM LIMITATION ON USE FOR

4 LAND ACQUISITION.—Section 147(h) of the Internal Rev5 enue Code of 1986 (relating to certain rules not apply)

6 is amended—

7 (1) by adding at the end the following:

8 ‘‘(3) EXEMPT FACILITY BONDS FOR QUALIFIED

9 PUBLIC EDUCATIONAL FACILITIES.—Subsection (c)

10 shall not apply to any exempt facility bond issued as

11 part of an issue described in section 142(a)(13) (re12 lating to qualified public educational facilities).’’,

13 and

14 (2) by striking ‘‘MORTGAGE REVENUE BONDS,

15 QUALIFIED STUDENT LOAN BONDS, AND QUALI16 FIED 501(c)(3) BONDS’’ in the heading and insert17 ing ‘‘CERTAIN BONDS’’.

18 (e) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to bonds issued after December

20 31, 1998.

21 SEC. 9. ADDITIONAL INCREASE IN ARBITRAGE REBATE EX22 CEPTION FOR GOVERNMENTAL BONDS USED

23 TO FINANCE EDUCATION FACILITIES.

24 (a) IN GENERAL.—Section 148(f)(4)(D)(vii) of the

25 Internal Revenue Code of 1986 (relating to increase in
32

•S 50 IS

1 exception for bonds financing public school capital expend2 itures) is amended by striking ‘‘$5,000,000’’ the second

3 place it appears and inserting ‘‘$10,000,000’’.

4 (b) EFFECTIVE DATE.—The amendment made by

5 subsection (a) shall apply to obligations issued after De6 cember 31, 1998.

Æ