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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1708 Introduced in Senate (IS)]

105th CONGRESS
  2d Session
                                S. 1708

                         To improve education.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 4, 1998

Mr. Daschle (for himself, Mrs. Murray, Ms. Moseley-Braun, Mr. Kennedy, 
Mr. Dodd, Mrs. Boxer, Mr. Breaux, Mr. Robb, Mr. Levin, Mr. Lautenberg, 
   Mr. Glenn, Mr. Kerry, Mrs. Feinstein, Mr. Reid, Mr. Reed, and Mr. 
Bryan) introduced the following bill; which was read twice and referred 
             to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
                         To improve education.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Revitalize and Empower Public School 
Communities to Upgrade for Long-Term Success Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Our Nation's investment in a high quality public 
        education system is necessary not only for the future of our 
        children and our families, but also for the future of America. 
        A well-educated citizenry and workforce are essential to 
        compete in the global economy and maintain a strong democracy. 
        In order to promote prosperity and ensure individual 
        opportunity, America must make education a national priority.
            (2) Strong leadership in education is needed more than 
        ever. Schools are facing the challenge of educating more highly 
        skilled workers to meet the demands of a modern economy. The 
        Bureau of Labor Statistics estimates that 60 percent of all 
        jobs created at the turn of the 21st century will require more 
        than a high school education.
            (3) Record numbers of students are enrolled in our Nation's 
        elementary and secondary schools and we can expect to break 
        that record every year from 1998 through 2007. The record 
        numbers are straining many school facilities. Addressing that 
        growth will require an increasing commitment of resources to 
        build and modernize schools, and to hire and train new 
        teachers. In addition, the increasing use of technology in the 
        workplace is creating new demands to incorporate computers and 
        other high-technology equipment into the classroom starting in 
        elementary schools.
            (4) Too many students are learning in out-of-date and 
        overcrowded school buildings. Government Accounting Office 
        reports indicate that 14,000,000 children in a third of the 
        Nation's schools are learning in substandard classrooms. There 
        is clear evidence that the quality of school facilities affects 
        student achievement levels. In addition, new classrooms will be 
        needed to accommodate smaller class sizes, and improvements in 
        wiring are needed to accommodate high-technology equipment.
            (5) Across the Nation, schools will need to recruit and 
        hire an additional 2,000,000 teachers during the period from 
        1998 through 2008. More than 200,000 teachers will be needed 
        annually. Current teacher development programs produce 100,000 
        to 150,000 teachers per year. Too many schools of education do 
        not adequately train teachers to use technology in the 
        classroom.
            (6) Rigorous research shows that students in smaller 
        classes in the early grades make more rapid educational 
        progress than students in larger classes. The progress is most 
        likely to occur if classes are taught by qualified, well-
        trained teachers.
            (7) Young people aged 12 through 17 are most at risk of 
        committing violent acts and being the victims of violent acts 
        between 3 p.m. and 8 p.m. Children who attend quality after-
        school programs are less likely to engage in delinquent 
        behavior and have better grades and emotional development than 
        their counterparts who are left unsupervised after school. In 
        1993, only 33 percent of schools in low-income neighborhoods 
        offered before- and after-school programs and only 50 percent 
        of schools in affluent neighborhoods offered such programs.
            (8) Higher levels of academic achievement will be required 
        to equip American students for the workplace of the 21st 
        century. Employers will demand increasingly sophisticated 
        levels of literacy, communication, mathematical, and technical 
        skills. 60 percent of all jobs will require computer skills. 
        Additional resources will be needed for effective programs, 
        such as the School Technology Resource Grants Program and the 
        National Challenge Grants for Technology in Education Program, 
        and additional emphasis needs to be placed on training teachers 
        to use technology effectively in the classroom.
            (9) Some communities are improving student achievement 
        levels by adopting high standards for teachers and students, 
abolishing social promotions, and taking other steps to improve the 
quality of education. Some of this can be done by implementing high 
standards, restructuring existing budgets, and reordering priorities. 
But some communities, particularly those serving a high number of low-
income students, do not have the same resources as higher income 
communities. Despite efforts in many States to supplement funding in 
poor school districts, the General Accounting Office found that 
wealthier school districts in 37 States had more total funding than 
poor school districts in the 1991-1992 school year. On average, wealthy 
school districts had about 24 percent more total funding per weighted 
pupil than poor school districts. It is in the national interest that 
children from low-income families be provided with opportunities to 
achieve to the best of their ability in order to become productive, 
contributing members of society. Additional Federal resources should be 
committed to implement effective reforms and improve the quality of 
education in low-income rural and inner-city schools.
            (10) Coordinated national actions to lower class size, 
        raise student and teacher standards, and rebuild school 
        facilities are also needed to help address high school and 
        college dropout rates, which have involved over 500,000 
        students each year in high school and 28 percent of college 
        freshmen, of whom a disproportionate number are Hispanic 
        Americans.
            (11) Meeting the challenges of the 21st century will 
        require the involvement of all Americans, including public 
        officials, educators, parents, business and community leaders, 
        and students. Encouraging active community participation is 
        essential for the success of students in the 21st century.

        TITLE I--HELPING COMMUNITIES RENOVATE AMERICA'S SCHOOLS

SECTION 101. SHORT TITLE.

    This title may be cited as the ``Public School Construction Act of 
1998''.

SEC. 102. FINDINGS.

    Congress makes the following findings:
            (1) The General Accounting Office has performed a 
        comprehensive survey of the Nation's public elementary and 
        secondary school facilities and has found severe levels of 
        disrepair in all areas of the United States.
            (2) The General Accounting Office has concluded that more 
        than 14,000,000 children attend schools in need of extensive 
        repair or replacement, 7,000,000 children attend schools with 
        life safety code violations, and 12,000,000 children attend 
        schools with leaky roofs.
            (3) The General Accounting Office has found the problem of 
        crumbling schools transcends demographic and geographic 
        boundaries. At 38 percent of urban schools, 30 percent of rural 
        schools, and 29 percent of suburban schools, at least one 
        building is in need of extensive repair or should be completely 
        replaced.
            (4) The condition of school facilities has a direct affect 
        on the safety of students and teachers and on the ability of 
        students to learn. Academic research has provided a direct 
        correlation between the condition of school facilities and 
        student achievement. At Georgetown University, researchers have 
        found the test scores of students assigned to schools in poor 
        condition can be expected to fall 10.9 percentage points below 
        the test scores of students in buildings in excellent 
        condition. Similar studies have demonstrated up to a 20 percent 
        improvement in test scores when students were moved from a poor 
        facility to a new facility.
            (5) The General Accounting Office has found most schools 
        are not prepared to incorporate modern technology in the 
        classroom. Forty-six percent of schools lack adequate 
        electrical wiring to support the full-scale use of technology. 
        More than a third of schools lack the requisite electrical 
        power. Fifty-six percent of schools have insufficient phone 
        lines for modems.
            (6) The Department of Education has reported that 
        elementary and secondary school enrollment, already at a record 
        high level, will continue to grow over the next 10 years, and 
        that in order to accommodate this growth, the United States 
        will need to build an additional 6,000 schools.
            (7) The General Accounting Office has determined the cost 
        of bringing schools up to good, overall condition to be 
        $112,000,000,000, not including the cost of modernizing schools 
        to accommodate technology, or the cost of building additional 
        facilities needed to meet record enrollment levels.
            (8) Schools run by the Bureau of Indian Affairs (BIA) for 
        Native American children are also in dire need of repair and 
        renovation. The General Accounting Office has reported that the 
        cost of total inventory repairs needed for BIA facilities 
is $754,000,000. The December 1997 report by the Comptroller General of 
the United States states that, ``Compared with other schools 
nationally, BIA schools are generally in poorer physical condition, 
have more unsatisfactory environmental factors, more often lack key 
facilities requirements for education reform, and are less able to 
support computer and communications technology.''.
            (9) State and local financing mechanisms have proven 
        inadequate to meet the challenges facing today's aging school 
        facilities. Large numbers of local educational agencies have 
        difficulties securing financing for school facility 
        improvement.
            (10) The Federal Government has provided resources for 
        school construction in the past. For example, between 1933 and 
        1939, the Federal Government assisted in 70 percent of all new 
        school construction.
            (11) The Federal Government can support elementary and 
        secondary school facilities without interfering in issues of 
        local control, and should help communities leverage additional 
        funds for the improvement of elementary and secondary school 
        facilities.

SEC. 103. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

    (a) In General.--Part IV of subchapter U of chapter 1 of the 
Internal Revenue Code of 1986 (relating to incentives for education 
zones) is amended to read as follows:

 ``PART IV--INCENTIVES FOR QUALIFIED PUBLIC SCHOOL MODERNIZATION BONDS

                              ``Sec. 1397E. Credit to holders of 
                                        qualified public school 
                                        modernization bonds.
                              ``Sec. 1397F. Qualified zone academy 
                                        bonds.
                              ``Sec. 1397G. Qualified school 
                                        construction bonds.

``SEC. 1397E. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL 
              MODERNIZATION BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified public school modernization bond on the credit allowance date 
of such bond which occurs during the taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter for such 
taxable year the amount determined under subsection (b).
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any qualified public 
        school modernization bond is the amount equal to the product 
        of--
                    ``(A) the credit rate determined by the Secretary 
                under paragraph (2) for the month in which such bond 
                was issued, multiplied by
                    ``(B) the face amount of the bond held by the 
                taxpayer on the credit allowance date.
            ``(2) Determination.--During each calendar month, the 
        Secretary shall determine a credit rate which shall apply to 
        bonds issued during the following calendar month. The credit 
        rate for any month is the percentage which the Secretary 
        estimates will on average permit the issuance of qualified 
        public school modernization bonds without discount and without 
        interest cost to the issuer.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under part 
                IV of subchapter A (other than subpart C thereof, 
                relating to refundable credits).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Qualified Public School Modernization Bond; Credit Allowance 
Date.--For purposes of this section--
            ``(1) Qualified public school modernization bond.--The term 
        `qualified public school modernization bond' means--
                    ``(A) a qualified zone academy bond, and
                    ``(B) a qualified school construction bond.
            ``(2) Credit allowance date.--The term `credit allowance 
        date' means, with respect to any issue, the last day of the 1-
        year period beginning on the date of issuance of such issue and 
        the last day of each successive 1-year period thereafter.
    ``(e) Other Definitions.--For purposes of this part--
            ``(1) Local educational agency.--The term `local 
        educational agency' has the meaning given to such term by 
        section 14101 of the Elementary and Secondary Education Act of 
        1965. Such term includes the local educational agency that 
        serves the District of Columbia but does not include any other 
State agency.
            ``(2) Bond.--The term `bond' includes any obligation.
            ``(3) State.--The term `State' includes the District of 
        Columbia and any possession of the United States.
            ``(4) Public school facility.--The term `public school 
        facility' shall not include any stadium or other facility 
        primarily used for athletic contests or exhibitions or other 
        events for which admission is charged to the general public.
    ``(f) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section and the 
amount so included shall be treated as interest income.
    ``(g) Bonds Held By Regulated Investment Companies.--If any 
qualified public school modernization bond is held by a regulated 
investment company, the credit determined under subsection (a) shall be 
allowed to shareholders of such company under procedures prescribed by 
the Secretary.

``SEC. 1397F. QUALIFIED ZONE ACADEMY BONDS.

    ``(a) Qualified Zone Academy Bond.--For purposes of this part--
            ``(1) In general.--The term `qualified zone academy bond' 
        means any bond issued as part of an issue if--
                    ``(A) 95 percent or more of the proceeds of such 
                issue are to be used for a qualified purpose with 
                respect to a qualified zone academy established by a 
                local educational agency,
                    ``(B) the bond is issued by a State or local 
                government within the jurisdiction of which such 
                academy is located,
                    ``(C) the issuer--
                            ``(i) designates such bond for purposes of 
                        this section,
                            ``(ii) certifies that it has written 
                        assurances that the private business 
                        contribution requirement of paragraph (2) will 
                        be met with respect to such academy, and
                            ``(iii) certifies that it has the written 
                        approval of the local educational agency for 
                        such bond issuance, and
                    ``(D) the term of each bond which is part of such 
                issue does not exceed 15 years.
            ``(2) Private business contribution requirement.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the private business contribution requirement of this 
                paragraph is met with respect to any issue if the local 
                educational agency that established the qualified zone 
                academy has written commitments from private entities 
                to make qualified contributions having a present value 
                (as of the date of issuance of the issue) of not less 
                than 10 percent of the proceeds of the issue.
                    ``(B) Qualified contributions.--For purposes of 
                subparagraph (A), the term `qualified contribution' 
                means any contribution (of a type and quality 
                acceptable to the local educational agency) of--
                            ``(i) equipment for use in the qualified 
                        zone academy (including state-of-the-art 
                        technology and vocational equipment),
                            ``(ii) technical assistance in developing 
                        curriculum or in training teachers in order to 
                        promote appropriate market driven technology in 
                        the classroom,
                            ``(iii) services of employees as volunteer 
                        mentors,
                            ``(iv) internships, field trips, or other 
                        educational opportunities outside the academy 
                        for students, or
                            ``(v) any other property or service 
                        specified by the local educational agency.
            ``(3) Qualified zone academy.--The term `qualified zone 
        academy' means any public school (or academic program within a 
        public school) which is established by and operated under the 
        supervision of a local educational agency to provide education 
        or training below the postsecondary level if--
                    ``(A) such public school or program (as the case 
                may be) is designed in cooperation with business to 
                enhance the academic curriculum, increase graduation 
                and employment rates, and better prepare students for 
                the rigors of college and the increasingly complex 
                workforce,
                    ``(B) students in such public school or program (as 
                the case may be) will be subject to the same academic 
                standards and assessments as other students educated by 
                the local educational agency,
                    ``(C) the comprehensive education plan of such 
                public school or program is approved by the local 
                educational agency, and
                    ``(D)(i) such public school is located in an 
                empowerment zone or enterprise community (including any 
                such zone or community designated after the date of the 
                enactment of this section), or
                    ``(ii) there is a reasonable expectation (as of the 
                date of issuance of the bonds) that at least 35 percent 
                of the students attending such school or participating 
                in such program (as the case may be) will be eligible 
                for free or reduced-cost lunches under the school lunch 
                program established under the National School Lunch 
                Act.
            ``(4) Qualified purpose.--The term `qualified purpose' 
        means, with respect to any qualified zone academy--
                    ``(A) constructing, rehabilitating, or repairing 
                the public school facility in which the academy is 
                established,
                    ``(B) providing equipment for use at such academy,
                    ``(C) developing course materials for education to 
                be provided at such academy, and
                    ``(D) training teachers and other school personnel 
                in such academy.
            ``(5) Temporary period exception.--A bond shall not be 
        treated as failing to meet the requirement of paragraph (1)(A) 
        solely by reason of the fact that the proceeds of the issue of 
        which such bond is a part are invested for a reasonable 
        temporary period (but not more than 36 months) until such 
        proceeds are needed for the purpose for which such issue was 
        issued. Any earnings on such proceeds during such period shall 
        be treated as proceeds of the issue for purposes of applying 
        paragraph (1)(A).
    ``(b) Limitations on Amount of Bonds Designated.--
            ``(1) In general.--There is a national zone academy bond 
        limitation for each calendar year. Such limitation is--
                    ``(A) $400,000,000 for 1998,
                    ``(B) $1,400,000,000 for 1999,
                    ``(C) $1,400,000,000 for 2000, and
                    ``(D) except as provided in paragraph (3), zero 
                after 2000.
            ``(2) Allocation of limitation.--
                    ``(A) Allocation among states.--
                            ``(i) 1998 limitation.--The national zone 
                        academy bond limitation for calendar year 1998 
                        shall be allocated by the Secretary among the 
                        States on the basis of their respective 
                        populations of individuals below the poverty 
                        line (as defined by the Office of Management 
                        and Budget).
                            ``(ii) Limitation after 1998.--The national 
                        zone academy bond limitation for any calendar 
                        year after 1998 shall be allocated by the 
                        Secretary among the States in the manner 
                        prescribed by section 1397G(d); except that, in 
                        making the allocation under this clause, the 
                        Secretary shall take into account Basic Grants 
                        attributable to large local educational 
                        agencies (as defined in section 1397G(e)).
                    ``(B) Allocation to local educational agencies.--
                The limitation amount allocated to a State under 
                subparagraph (A) shall be allocated by the State 
                education agency to qualified zone academies within 
                such State.
                    ``(C) Designation subject to limitation amount.--
                The maximum aggregate face amount of bonds issued 
                during any calendar year which may be designated under 
                subsection (a) with respect to any qualified zone 
                academy shall not exceed the limitation amount 
                allocated to such academy under subparagraph (B) for 
                such calendar year.
            ``(3) Carryover of unused limitation.--If for any calendar 
        year--
                    ``(A) the limitation amount under this subsection 
                for any State, exceeds
                    ``(B) the amount of bonds issued during such year 
                which are designated under subsection (a) with respect 
                to qualified zone academies within such State,
        the limitation amount under this subsection for such State for 
        the following calendar year shall be increased by the amount of 
        such excess. The preceding sentence shall not apply if such 
        following calendar year is after 2002.

``SEC. 1397G. QUALIFIED SCHOOL CONSTRUCTION BONDS.

    ``(a) Qualified School Construction Bond.--For purposes of this 
part, the term `qualified school construction bond' means any bond 
issued as part of an issue if--
            ``(1) 95 percent or more of the proceeds of such issue are 
        to be used for the construction, rehabilitation, or repair of a 
        public school facility,
            ``(2) the bond is issued by a State or local government 
        within the jurisdiction of which such school is located,
            ``(3) the issuer designates such bond for purposes of this 
        section, and
            ``(4) the term of each bond which is part of such issue 
        does not exceed 15 years.
Rules similar to the rules of section 1397F(a)(5) shall apply for 
purposes of paragraph (1).
    ``(b) Limitation on Amount of Bonds Designated.--The maximum 
aggregate face amount of bonds issued during any calendar year which 
may be designated under subsection (a) by any issuer shall not exceed 
the sum of--
            ``(1) the limitation amount allocated under subsection (d) 
        for such calendar year to such issuer, and
            ``(2) if such issuer is a large local educational agency 
        (as defined in subsection (e)) or is issuing on behalf of such 
        an agency, the limitation amount allocated under subsection (e) 
        for such calendar year to such agency.
    ``(c) National Limitation on Amount of Bonds Designated.--There is 
a national qualified school construction bond limitation for each 
calendar year. Such limitation is--
            ``(1) $9,700,000,000 for 1999,
            ``(2) $9,700,000,000 for 2000, and
            ``(3) except as provided in subsection (f), zero after 
        2000.
    ``(d) 50 Percent of Limitation Allocated Among States.--
            ``(1) In general.--Fifty percent of the limitation 
        applicable under subsection (c) for any calendar year shall be 
        allocated among the States under paragraph (2) by the 
        Secretary. The limitation amount allocated to a State under the 
        preceding sentence shall be allocated by the State education 
        agency to issuers within such State and such allocations may be 
        made only if there is an approved State application.
            ``(2) Allocation formula.--The amount to be allocated under 
        paragraph (1) for any calendar year shall be allocated among 
        the States in proportion to the respective amounts each such 
        State received for Basic Grants under subpart 2 of part A of 
        title I of the Elementary and Secondary Education Act of 1965 
        (20 U.S.C. 6331 et seq.) for the most recent fiscal year ending 
        before such calendar year. For purposes of the preceding 
        sentence, Basic Grants attributable to large local educational 
        agencies (as defined in subsection (e)) shall be disregarded.
            ``(3) Minimum allocations to states.--
                    ``(A) In general.--The Secretary shall adjust the 
                allocations under this subsection for any calendar year 
                for each State to the extent necessary to ensure that 
                the sum of--
                            ``(i) the amount allocated to such State 
                        under this subsection for such year, and
                            ``(ii) the aggregate amounts allocated 
                        under subsection (e) to large local educational 
                        agencies in such State for such year,
                is not less than an amount equal to such State's 
                minimum percentage of 50 percent of the national 
                qualified school construction bond limitation under 
                subsection (c) for the calendar year.
                    ``(B) Minimum percentage.--A State's minimum 
                percentage for any calendar year is the minimum 
                percentage described in section 1124(d) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6334(d)) for such State for the most recent 
                fiscal year ending before such calendar year.
            ``(4) Allocations to certain possessions.--The amount to be 
        allocated under paragraph (1) to any possession of the United 
        States other than Puerto Rico shall be the amount which would 
        have been allocated if all allocations under paragraph (1) were 
        made on the basis of respective populations of individuals 
        below the poverty line (as defined by the Office of Management 
        and Budget). In making other allocations, the amount to be 
        allocated under paragraph (1) shall be reduced by the aggregate 
        amount allocated under this paragraph to possessions of the 
        United States.
            ``(5) Approved state application.--For purposes of 
        paragraph (1), the term `approved State application' means an 
        application which is approved by the Secretary of Education and 
        which includes--
                    ``(A) the results of a recent publicly-available 
                survey (undertaken by the State with the involvement of 
                local education officials, members of the public, and 
                experts in school construction and management) of such 
                State's needs for public school facilities, including 
descriptions of--
                            ``(i) health and safety problems at such 
                        facilities,
                            ``(ii) the capacity of public schools in 
                        the State to house projected enrollments, and
                            ``(iii) the extent to which the public 
                        schools in the State offer the physical 
                        infrastructure needed to provide a high-quality 
                        education to all students, and
                    ``(B) a description of how the State will allocate 
                to local educational agencies, or otherwise use, its 
                allocation under this subsection to address the needs 
                identified under subparagraph (A), including a 
                description of how it will--
                            ``(i) give highest priority to localities 
                        with the greatest needs, as demonstrated by 
                        inadequate school facilities coupled with a low 
                        level of resources to meet those needs,
                            ``(ii) use its allocation under this 
                        subsection to assist localities that lack the 
                        fiscal capacity to issue bonds on their own, 
                        including but not limited to issuance of bonds 
                        by the State on behalf of such localities, and
                            ``(iii) ensure that its allocation under 
                        this subsection is used only to supplement, and 
                        not supplant, the amount of school 
                        construction, rehabilitation, and repair in the 
                        State that would have occurred in the absence 
                        of such allocation.
        Any allocation under paragraph (1) by a State education agency 
        shall be binding if such agency reasonably determined that the 
        allocation was in accordance with the plan approved under this 
        paragraph.
    ``(e) 50 Percent of Limitation Allocated Among Largest School 
Districts.--
            ``(1) In general.--Fifty percent of the limitation 
        applicable under subsection (c) for any calendar year shall be 
        allocated under paragraph (2) by the Secretary among local 
        educational agencies which are large local educational agencies 
        for such year. No qualified school construction bond may be 
        issued by reason of an allocation to a large local educational 
        agency under the preceding sentence unless such agency has an 
        approved local application.
            ``(2) Allocation formula.--The amount to be allocated under 
        paragraph (1) for any calendar year shall be allocated among 
        large local educational agencies in proportion to the 
        respective amounts each such agency received for Basic Grants 
        under subpart 2 of part A of title I of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for 
        the most recent fiscal year ending before such calendar year.
            ``(3) Large local educational agency.--For purposes of this 
        section, the term `large local educational agency' means, with 
        respect to a calendar year, any local educational agency if 
        such agency is--
                    ``(A) among the 100 local educational agencies with 
                the largest numbers of children aged 5 through 17 from 
                families living below the poverty level, as determined 
                by the Secretary using the most recent data available 
                from the Department of Commerce that are satisfactory 
                to the Secretary, or
                    ``(B) 1 of not more than 25 local educational 
                agencies (other than those described in clause (i)) 
                that the Secretary of Education determines (based on 
                the most recent data available satisfactory to the 
                Secretary) are in particular need of assistance, based 
                on a low level of resources for school construction, a 
                high level of enrollment growth, or such other factors 
                as the Secretary deems appropriate.
            ``(4) Approved local application.--For purposes of 
        paragraph (1), the term `approved local application' means an 
        application which is approved by the Secretary of Education and 
        which includes--
                    ``(A) the results of a recent publicly-available 
                survey (undertaken by the local educational agency with 
                the involvement of school officials, members of the 
                public, and experts in school construction and 
                management) of such agency's needs for public school 
                facilities, including descriptions of--
                            ``(i) the overall condition of the local 
                        educational agency's school facilities, 
                        including health and safety problems,
                            ``(ii) the capacity of the agency's schools 
                        to house projected enrollments, and
                            ``(iii) the extent to which the agency's 
                        schools offer the physical infrastructure 
                        needed to provide a high-quality education to 
                        all students,
                    ``(B) a description of how the local educational 
                agency will use its allocation under this subsection to 
address the needs identified under subparagraph (A), and
                    ``(C) a description of how the local educational 
                agency will ensure that its allocation under this 
                subsection is used only to supplement, and not 
                supplant, the amount of school construction, 
                rehabilitation, or repair in the locality that would 
                have occurred in the absence of such allocation.
        A rule similar to the rule of the last sentence of subsection 
        (d)(5) shall apply for purposes of this paragraph.
    ``(f) Carryover of Unused Limitation.--If for any calendar year--
            ``(1) the amount allocated under subsection (d) to any 
        State, exceeds
            ``(2) the amount of bonds issued during such year which are 
        designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State for the 
following calendar year shall be increased by the amount of such 
excess. A similar rule shall apply to the amounts allocated under 
subsection (e). The subsection shall not apply if such following 
calendar year is after 2002.''.
    (b) Reporting.--Subsection (d) of section 6049 of such Code 
(relating to returns regarding payments of interest) is amended by 
adding at the end the following new paragraph:
            ``(8) Reporting of credit on qualified public school 
        modernization bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 1397E(f) and such amounts 
                shall be treated as paid on the credit allowance date 
                (as defined in section 1397E(d)(2)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A) of this 
                paragraph, subsection (b)(4) of this section shall be 
                applied without regard to subparagraphs (A), (H), (I), 
                (J), (K), and (L)(i).
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''
    (c) Clerical Amendments.--
            (1) The table of parts for subchapter U of chapter 1 of 
        such Code is amended by striking the item relating to part IV 
        and inserting the following new item:

                              ``Part IV. Incentives for qualified 
                                        public school modernization 
                                        bonds.''.
            (2) Part V of subchapter U of chapter 1 of such Code is 
        amended by redesignating both section 1397F and the item 
        relating thereto in the table of sections for such part as 
        section 1397H.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to obligations 
        issued after December 31, 1998.
            (2) Repeal of restriction on zone academy bond holders.--
        The repeal of the limitation of section 1397E of the Internal 
        Revenue Code of 1986 (as in effect on the day before the date 
        of the enactment of this Act) to eligible taxpayers (as defined 
        in subsection (d)(6) of such section) shall apply to 
        obligations issued after December 31, 1997.

SEC. 104. SENSE OF THE SENATE REGARDING FUNDING FOR BIA SCHOOL 
              FACILITIES.

    (a) Findings.--The Senate finds that--
            (1) the Bureau of Indian Affairs operates one of only two 
        federally-run school systems; and
            (2) there is a clear Federal responsibility to ensure that 
        the more than 50,000 students attending these schools have 
        decent, safe schools.
    (b) Sense of the Senate.--It is the sense of the Senate that--
            (1) at a minimum, an additional $32,200,000 should be 
        provided, for a total of at least $86,600,000 in fiscal year 
        1999, to begin construction of 3 new Bureau of Indian Affairs 
        school facilities and to increase funds available for the 
        improvement and repair of existing facilities; and
            (2) In addition, Congress should consider enacting 
        legislation to establish other funding mechanisms that would 
        leverage federal investments on behalf of Bureau of Indian 
        Affairs schools in order to address the serious construction 
        backlog which exists at tribal schools.

                     TITLE II--REDUCING CLASS SIZE

SEC. 201. FINDINGS.

    Congress makes the following findings:
            (1) Qualified teachers in small classes can provide 
        students with more individualized attention, spend more time on 
        instruction and less on other tasks, cover more material 
effectively, and are better able to work with parents to help the 
parents further their children's education.
            (2) Rigorous research has shown that students attending 
        small classes in the early grades make more rapid educational 
        progress than the students in larger classes, and that those 
        achievement gains persist through at least the 8th grade. For 
        example:
                    (A) In a landmark 4-year experimental study of 
                class size reduction in grades kindergarten through 
                grade 3 in Tennessee, researchers found that students 
                in smaller classes earned significantly higher scores 
                on basic skills tests in all 4 years and in all types 
                of schools, including urban, rural, and suburban 
                schools.
                    (B) After 2 years in reduced class sizes, students 
                in the Flint, Michigan Public School District improved 
                their reading scores by 44 percent.
            (3) The benefits of smaller classes are greatest for lower-
        achieving, minority, poor, and inner-city children. One study 
        found that urban 4th-graders in smaller than average classes 
        were \3/4\ of a school year ahead of their counterparts in 
        larger than average classes.
            (4) Smaller classes allow teachers to identify and work 
        sooner with students who have learning disabilities and, 
        potentially, can reduce those students' need for special 
        education services in the later grades.
            (5) Students in smaller classes are able to become more 
        actively engaged in learning than their peers in large classes.
            (6) Efforts to improve educational outcomes by reducing 
        class sizes in the early grades are likely to be successful 
        only if well-qualified teachers are hired to fill additional 
        classroom positions and if teachers received intensive, 
        continuing training in working effectively in smaller classroom 
        settings.
            (7) State certified and licensed teachers help ensure high 
        quality instruction in the classroom.
            (8) According to the National Commission on Teaching and 
        America's Future, the most important influence on student 
        achievement is the expertise of their teachers. One New York 
        City study comparing high- and low-achieving elementary schools 
        with similar student characteristics, found that more than 90 
        percent of the variation in achievement in mathematics and 
        reading was due to differences in teacher qualifications.
            (9) Our Nation needs more qualified teachers to meet 
        changing demographics and to help students meet high standards, 
        as demonstrated by the following:
                    (A) Over the next decade, our Nation will need to 
                hire over 2,000,000 teachers to meet increasing student 
                enrollments and teacher retirements.
                    (B) 1 out of 4 high school teachers does not have a 
                major or minor in the main subject that they teach. 
                This is true for more than 30 percent of mathematics 
                teachers.
                    (C) In schools with the highest minority 
                enrollments, students have less than a 50 percent 
                chance of getting a science or mathematics teacher who 
                holds a degree in that field.
                    (D) In 1991, 25 percent of new public school 
                teachers had not completed the requirements for a 
                license in their main assignment field. This number 
                increased to 27 percent by 1994, including 11 percent 
                who did not have a license.
            (10) We need more teachers who are adequately prepared for 
        the challenges of the 21st century classroom, as demonstrated 
        by the fact that--
                    (A) 50 percent of teachers have little or no 
                experience using technology in the classroom; and
                    (B) in 1994, only 10 percent of new teachers felt 
                they were prepared to integrate new technology into 
                their instruction.
            (11) Teacher quality cannot be further compromised to meet 
        the demographic demand for new teachers and smaller class 
        sizes. Comprehensive improvements in teacher preparation and 
        development programs are also necessary to ensure the 
        effectiveness of new teachers and the academic success of 
        students in the classroom. These comprehensive improvements 
        should include encouraging more institutions of higher 
        education that operate teacher preparation programs to work in 
        partnership with local educational agencies and elementary and 
        secondary schools; providing more hands-on, classroom 
        experience to prospective teachers; creating mentorship 
        programs for new teachers; providing high quality content area 
        training and classroom skills for new teachers; and training 
        teachers to incorporate technology into the classroom.
            (12) Efforts should be made to provide prospective teachers 
        with a greater knowledge of instructional programs that are 
        research-based, of demonstrated effectiveness, replicable in 
        diverse and challenging circumstances, and supported by 
        networks of experts and experienced practitioners.
            (13) Several States have begun serious efforts to reduce 
        class sizes in the early elementary grades, but these actions 
        may be impeded by financial limitations or difficulties in 
        hiring qualified teachers.
            (14) The Federal Government can assist in this effort by 
        providing funding for class size reductions in grades 1 through 
        3, and by helping to ensure that the new teachers brought into 
        the classroom are well-qualified.

SEC. 202. PURPOSE.

    It is the purpose of this title to help States and local 
educational agencies recruit, train, and hire 100,000 additional 
qualified teachers in order to reduce class sizes nationally, in grades 
1 through 3, to an average of 18 students per classroom and to improve 
teaching in the early grades so that all students can learn to read 
independently and well by the end of the third grade.

SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title 
$1,100,000,000 for fiscal year 1999, $1,300,000,000 for fiscal year 
2000, $1,500,000,000 for fiscal year 2001, $1,700,000,000 for fiscal 
year 2002, $1,735,000,000 for fiscal year 2003, $2,300,000,000 for 
fiscal year 2004, and $2,800,000,000 for each of the fiscal years 2005 
through 2008.

SEC. 204. ALLOTMENT TO STATES.

    (a) Entitlement to Payments.--Each State having an application 
approved under section 205 shall be entitled to a payment for a fiscal 
year in an amount equal to the State's allotment under this section.
    (b) Reservations.--
            (1) Evaluations.--From the amount made available under 
        section 203 for a fiscal year, the Secretary may reserve not 
        more than $1,000,000,000 to carry out the evaluation required 
        under section 213.
            (2) Outlying areas; secretary of the interior.--From the 
        amount made available under section 203 and not reserved under 
        paragraph (1) for a fiscal year, the Secretary shall reserve 
        not more than 1 percent for payments to the outlying areas, and 
        to the Secretary of the Interior for schools supported by the 
        Bureau of Indian Affairs, for activities that are consistent 
        with the purpose of this title. The Secretary shall allocate 
        funds among the outlying areas and the Secretary of the 
        Interior in accordance with their respective needs for 
        assistance under this title.
    (c) Allotment Formula.--From the amount made available under 
section 203 and not reserved under subsection (b) for a fiscal year, 
the Secretary shall allot to each State an amount that bears the same 
relationship to the amount so made available as the amount of funding 
the State received under part A of title I of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) for the 
previous fiscal year bears to the total amount so received by all 
States for the previous fiscal year.
    (d) Reallotment.--If the Secretary determines that any amount of a 
State's allotment under this section will not be available to the State 
for such year, then the Secretary shall reallot such amount to other 
States in the same manner as the funds were originally allotted under 
subsection (b).
    (e) Definitions.--In this title:
            (1) Outlying area.--The term ``outlying area'' means the 
        United States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            (2) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.

SEC. 205. APPLICATIONS.

    (a) In General.--The State educational agency of each State 
desiring to receive funding under this title shall submit an 
application to the Secretary at such time, in such form, and containing 
such information as the Secretary may require.
    (b) Contents.--The application shall include--
            (1) the State educational agency's goals for using funds 
        under this title to reduce average class sizes in grades 1 
        through 3, including a description of current class sizes in 
        the schools served by local educational agencies of the State;
            (2) a description of the State educational agency's plan 
        for using funds under this title to reduce average class size 
        in grades 1 through 3;
            (3) a description of the State educational agency's plan 
        for allocating funds provided under this title within the 
        State, including an estimate of the impact of those allocations 
        on class sizes in the schools served by individual local 
        educational agencies of the State, and an assurance that the 
        State educational agency will make this plan public within the 
        State;
            (4) a description of the State educational agency's 
        strategy for improving teacher quality in grades 1 through 3 
        within the State (which may be a part of a broader strategy to 
        improve teacher quality generally), including actions the State 
        educational agency will take to ensure the availability, within 
        the State, of a sufficient number of qualified teachers to fill 
        the positions created with funds provided under this title, 
        which strategy shall describe how the State educational agency 
        and the local educational agencies within the State will ensure 
        that--
                    (A) individuals hired for positions created with 
                funds provided under this title will meet all of the 
                State's requirements for full certification or 
                licensure of teachers, or will make satisfactory 
                progress toward achieving such full certification or 
                licensure (which may include individuals pursuing 
                alternative routes to such certification or licensure); 
                and
                    (B) individuals hired for positions created with 
                funds provided under this title, and other teachers 
                affected by the funds, will be prepared to teach 
                reading effectively to all children and will take part 
in continuing professional development in effective reading instruction 
and in teaching effectively in small classes; and
            (5) a description of how the State will use other funds, 
        including other Federal funds, to improve teacher quality and 
        reading achievement within the State.
    (c) Approval.--The Secretary shall approve an application of a 
State if such application meets the requirements of this section and 
holds reasonable promise of achieving the purpose of this title.

SEC. 206. WITHIN STATE ALLOCATIONS.

    (a) Reservation.--From the amount allotted to a State under this 
title for a fiscal year, the State may reserve a total of not more than 
1 percent for the administrative costs of the State educational agency 
under this title and for State level activities described in section 
207.
    (b) Allocations.--
            (1) Minimum allocation to certain local educational 
        agencies.--
                    (A) In general.--From the amount allotted to a 
                State under this title and not reserved under 
                subsection (a) for a fiscal year, the State shall make 
                an allocation to each local educational agency in the 
                State that is described in subparagraph (B) in an 
                amount that bears the same relation to such amount as 
                the amount such local educational agency received under 
                part A of title I of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 6311 et seq.) for the 
                preceding fiscal year bears to the total amount all 
                such local educational agencies in the State received 
                under such part for the preceding year.
                    (B) Certain local educational agencies.--A local 
                educational agency referred to in subparagraph (A) is a 
                local educational agency that serves schools in which--
                            (i) at least 30 percent of the children 
                        enrolled in the schools are from families with 
                        incomes below the poverty line; or
                            (ii) at least 10,000 of the children 
                        enrolled in the schools are from such families.
            (2) Remainder.--From the amount allotted to a State under 
        this title, not reserved under subsection (a), and that remain 
        after application of paragraph (1), the State shall make 
        allocations to local educational agencies in the State--
                    (A) on the basis of--
                            (i) the local educational agencies' current 
                        or projected class sizes in grades 1 through 3; 
                        and
                            (ii) the relative ability of the local 
                        educational agencies to finance class size 
                        reductions with local educational agency funds; 
                        and
                    (B) in such a manner as to enable local educational 
                agencies to reduce their average class sizes, in grades 
                1 through 3, to the average class size proposed in the 
                State application.
            (3) Clarification regarding certain local educational 
        agencies.--A State shall make an allocation under paragraph (1) 
        to a local educational agency described in paragraph (1)(B) and 
        may make an allocation under paragraph (2) to a local 
        educational agency described in paragraph (1)(B).

SEC. 207. STATE LEVEL ACTIVITIES.

    From the amount reserved under section 206(a) for a fiscal year the 
State may carry out activities described in the application submitted 
under section 205. Such activities may include--
            (1) revision of State teacher certification or licensure 
        standards so as to promote the hiring of teachers with high 
        academic and pedagogical qualifications;
            (2) developing opportunities for professional development 
        for teachers with respect to skills and strategies that enable 
        the teachers to teach effectively in smaller classes; and
            (3) monitoring of activities assisted under this title and 
        other administrative costs associated with the operation of the 
        activities.

SEC. 208. LOCAL USES OF FUNDS.

    (a) Local Educational Agencies.--
            (1) In general.--
                    (A) Hiring of teachers.--Each local educational 
                agency receiving an allocation under this title shall 
                use the allocated funds, with the exception of funds 
                reserved under paragraph (2), for the payment of the 
                salaries and benefits for the additional teachers 
                needed to reduce class sizes in grades 1 through 3 to 
                the level determined as the State goal in the State 
                application under section 205(b)(1).
                    (B) Special rule.--A local educational agency that 
                has achieved the goal described in section 205(b)(1) 
                may use the allocated funds--
                            (i) to make further class size reductions 
                        in grades 1 through 3;
                            (ii) to reduce class sizes in grades other 
                        than grades 1 through 3; or
                            (iii) to undertake quality improvement 
                        activities such as the activities described in 
                        paragraph (2).
            (2) Special rule.--From the amount allocated to a local 
        educational agency under this title for each of the fiscal 
        years 1999 through 2003, the local educational agency shall use 
        not less than 10 percent for activities to ensure that teachers 
        hired with funds provided under this title, and other teachers 
        who will teach smaller classes as a result of activities 
        assisted under this title, are prepared to teach reading and 
        other subjects effectively in a smaller class setting. 
        Activities undertaken in pursuit of this objective may 
        include--
                    (A) training teachers in effective reading 
                instructional practices (including practices for 
                teaching students who experience initial difficulty in 
                learning to read) and in effective instructional 
                practices in small classes;
                    (B) paying the costs for teachers hired in grades 1 
                through 3 who are not fully certified or licensed to 
                obtain full certification or licensure;
                    (C) providing mentors or other support for teachers 
                in grades 1 through 3;
                    (D) establishing programs for the recruitment of 
                qualified teachers for schools that have a shortage of 
                certified or licensed teachers; and
                    (E) providing scholarships or other aid to 
                paraprofessionals or undergraduate students in order to 
                expand the pool of qualified teachers.
    (b) Schools.--Each school receiving funds from a local educational 
agency under this title may use the funds to produce for the public an 
annual report regarding the school's--
            (1) student achievement in reading (using the assessments 
        the State uses under section 1111(b) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6311(b)), and 
        disaggregating data in the same manner as required under such 
        section;
            (2) average class size; and
            (3) teacher qualifications for teachers of grades 1 through 
        3.

SEC. 209. MATCHING REQUIREMENT.

    (a) Matching Funds.--In order to receive an allocation under this 
title for a fiscal year a local educational agency shall provide 
matching funds, in the amount determined under subsection (b), to pay 
the cost of activities assisted under this title for the fiscal year.
    (b) Amount.--The amount of matching funds required under subsection 
(a)--
            (1) in the case of a local educational agency for which the 
        number of children from families with incomes below the poverty 
        line that are served by the agency is 25 percent or greater 
        than 25 percent of all students served by the agency, 0 percent 
        of the cost of activities to be assisted under this title;
            (2) in the case of a local educational agency for which 
        such number is 20 percent or greater but less than 25 percent, 
        shall be not less than 10 percent of the costs;
            (3) in the case of a local educational agency for which 
        such number is 15 percent or greater but less than 20 percent, 
        shall be not less than 20 percent of the costs;
            (4) in the case of a local educational agency for which 
        such number is 10 percent or greater but less than 15 percent, 
        shall be not less than 30 percent of the costs;
            (5) in the case of a local educational agency for which 
        such number is 5 percent or greater but less than 10 percent, 
        shall be not less than 40 percent of the costs; and
            (6) in the case of a local educational agency for which 
        such number is less than 5 percent, shall be not less than 50 
        percent of the costs.
    (c) Determination.--For purposes of determining the applicable 
matching requirement under subsection (a), the Secretary shall 
determine the number of children from families with incomes below the 
poverty line for individual local educational agencies using the most 
recent data available from the Bureau of the Census.
    (d) Special Rule.--A local educational agency shall meet the 
matching requirement determined in subsection (b) through cash 
expenditures from non-Federal sources, except that schools operating 
schoolwide programs under section 1114 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6314) may use funds provided under 
part A of title I of such Act (20 U.S.C. 6311 et seq.) to meet the 
requirements, if the use of the part A funds is consistent with the 
school plan under section 1112 of such Act (20 U.S.C. 6312) and the 
requirements of sections 1120(c) and 1120A(b) of such Act (20 U.S.C. 
6321(c) and 6322).

SEC. 210. CARRYOVER.

    Notwithstanding section 421 of the General Education Provisions Act 
(20 U.S.C. 1225), funds made available to a local educational agency 
under this title shall be available for obligation until September 30, 
2008.

SEC. 211. ACCOUNTABILITY.

    (a) In General.--Not later than 3 years after a local educational 
agency receives funds under this title, the local educational agency 
shall provide to the State educational agency evidence of the 
achievement of the local educational agencies' students, in grades 1 
through 4, in reading. Such evidence shall be--
            (1) in a form determined by the State educational agency;
            (2) based on the assessments local educational agencies are 
        using under section 1111(b) of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6311(b)) or on comparably 
        rigorous State or local assessments; and
            (3) disaggregated to show the achievement of students in 
        individual schools and of students in different racial groups, 
        by gender, by family income, and for students with disabilities 
        and with limited English proficiency.
    (b) Improvement Plan.--Each local educational agency serving a 
school that fails to show improvement in reading achievement after 
receiving funds under this title for 3 years shall develop a program 
improvement plan that is approved by the Secretary. The program 
improvement plan may provide for--
            (1) additional technical assistance, in the school failing 
        to show improvement, in order to change curriculum, change 
        school leadership, or more effectively use staff;
            (2) implementation, in the school, of comprehensive, 
        research-based education reform models; or
            (3) any other improvement strategy agreed to by the local 
        educational agency and the Secretary.
    (c) Reduction of Allocation.--Beginning with fiscal year 2004, a 
State educational agency shall reduce the allocation to any local 
educational agency under section 206 for a fiscal year if the State 
educational agency determines that the local educational agency serves 
a school which fails to show improvement in reading achievement. The 
reduction shall be in an amount equivalent to the amount made available 
to the school for the fiscal year for which the determination is made.

SEC. 212. PARTICIPATION OF PRIVATE SCHOOL TEACHERS.

    (a) In General.--Proportionate to the number of children who are 
enrolled in private elementary schools or secondary schools in the area 
served by a local educational agency that receives an allocation under 
this title, the local educational agency shall provide for the 
inclusion of private school teachers in the professional development 
activities the local educational agencies and the schools served by 
such agency carries out under this title.
    (b) Waiver.--If, by reason of any provision of law, a local 
educational agency is prohibited from providing for the professional 
development activities for private school teachers and administrators 
as required by subsection (a), or if the Secretary determines that the 
agency is unwilling or unable to do so, the Secretary shall waive that 
requirement and shall use a portion of the agency's grant to arrange 
for the provision of those activities.

SEC. 213. EVALUATION.

    From the amount reserved under section 204(b)(1), the Secretary 
shall carry out an evaluation of--
            (1) the extent to which the activities assisted under this 
        title achieve the objective of reducing class sizes;
            (2) the impact of the activities on reading achievement;
            (3) the quality of the teachers hired with funds provided 
        under this title;
            (4) the success of State and local efforts to use funds 
        provided under this title to ensure high quality teaching; and
            (5) the effectiveness of the requirements under section 
        211.

 TITLE III--STRENGTHENING THE 21ST CENTURY COMMUNITY LEARNING CENTERS 
                                  ACT

SEC. 301. FINDINGS.

    Congress makes the following findings:
            (1) In 1998 youth face far greater social risks than did 
        their parents and grandparents.
            (2) Students spend more of their waking hours alone, 
        without supervision, companionship, or activity, than the 
        students spend in school.
            (3) Nearly 5,000,000 children are home alone after school 
        each week.
            (4) Eighth graders left home alone after school report 
        greater use of cigarettes, alcohol, and marijuana than those in 
        adult-supervised settings.
            (5) Children who attend quality after-school programs--
                    (A) experience positive effects on their 
                development;
                    (B) have better peer relations, emotional 
                adjustment, grades, and conduct in school than their 
                peers in other care arrangements;
                    (C) have more learning opportunities and enrichment 
                activities then their peers in other care arrangements; 
                and
                    (D) are less likely to engage in delinquent 
                activity.
            (6) Most juvenile delinquent activity, whether committing 
        criminal acts or becoming victims of criminal acts, occurs 
        between 3 p.m. and 8 p.m.
            (7) From 1988 to 1992, juvenile arrests for violent acts 
        increased by 50 percent.
            (8) 1996 survey data indicate that parents overwhelmingly 
        support using school-based after-school programs for learning 
        and enrichment programs, but 70 percent of all public 
        elementary and secondary schools do not offer school-based 
        after-school programs.
            (9) Parents want more than babysitting from school-based 
        after-school programs, and computer classes, art and music 
        courses, tutoring, and community service rank high as 
        activities for after-school programs.
            (10) In 1993, only 33 percent of schools in low-income 
        neighborhoods offered before- and after-school programs, and 
        only 50 percent of schools in affluent neighborhoods offered 
        such programs. Efforts are clearly needed to expand access to 
        such programs both in schools and in other community-based 
        settings.

SEC. 302. PROGRAM AUTHORIZATION.

    Section 10903 of the 21st Century Community Learning Centers Act 
(20 U.S.C. 8243) is amended--
            (1) in subsection (a)--
                    (A) in the subsection heading, by inserting ``to 
                Local Educational Agencies for Schools'' after 
                ``Secretary''; and
                    (B) by striking ``rural and inner-city public'' and 
                all that follows through ``or to'' and inserting 
                ``local educational agencies for the support of public 
                elementary schools or secondary schools, including 
                middle schools, that serve communities with substantial 
                needs for expanded learning opportunities for children 
                and youth in the communities, to enable the schools to 
                establish or''; and
                    (C) by striking ``a rural or inner-city community'' 
                and inserting ``the communities'';
            (2) in subsection (b)--
                    (A) by striking ``States, among'' and inserting 
                ``States and among''; and
                    (B) by striking ``United States,'' and all that 
                follows through ``a State'' and inserting ``United 
                States''; and
            (3) in subsection (c), by striking ``3'' and inserting 
        ``5''.

SEC. 303. APPLICATIONS.

    Section 10904 of such Act (20 U.S.C. 8244) is amended--
            (1) by redesignating subsection (b) as subsection (c);
            (2) in subsection (a)--
                    (A) in the first sentence, by striking ``an 
                elementary or secondary school or consortium'' and 
                inserting ``a local educational agency'';
                    (B) in paragraph (1), by striking ``or 
                consortium'';
                    (C) in paragraph (2), by striking ``and'' after the 
                semicolon;
                    (D) in paragraph (3)--
                            (i) in subparagraph (B), by inserting ``, 
                        including programs under the Child Care and 
                        Development Block Grant Act of 1990'' after 
                        ``maximized'';
                            (ii) in subparagraph (D), by striking ``or 
                        consortium''; and
                            (iii) in subparagraph (E)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``or consortium''; and
                                    (II) in clause (ii), by striking 
                                the period and inserting a semicolon;
                    (E) by adding at the end the following:
            ``(4) information demonstrating that the local educational 
        agency will--
                    ``(A) provide not less than 50 percent of the 
                annual cost of the activities assisted under the 
                project from sources other than funds provided under 
                this part, which contribution may be provided in cash 
                or in kind, fairly evaluated;
                    ``(B) provide not more than 25 percent of the 
                annual cost of the activities assisted under the 
                project from funds provided by the Secretary under 
                other Federal programs that permit the use of those 
                other funds for activities assisted under the project; 
                and
                    ``(C) subject to subparagraph (B), in the fourth 
                and fifth years of a local educational agency's 
project, increase the percentage of the annual cost of activities 
assisted under the project that is paid for from sources other than the 
funds provided under this part; and
            ``(5) an assurance that the local educational agency, in 
        each year of the project, will maintain the agency's fiscal 
        effort, from non-Federal sources, from the preceding fiscal 
        year for the activities the local educational agency provides 
        with funds provided under this part.''; and
                    (F) in the second sentence of the matter preceding 
                paragraph (1), by striking ``Each such'' and inserting 
                the following:
    ``(b) Contents.--Each such''; and
            (3) in subsection (c) (as redesignated by paragraph (1)--
                    (A) by striking ``offer a broad selection of 
                services which''; and
                    (B) by striking ``the community'' and inserting 
                ``low-income communities''.

SEC. 304. USES OF FUNDS.

    Section 10905 of such Act (20 U.S.C. 8245) is amended--
            (1) by amending the matter preceding paragraph (1) to read 
        as follows:
    ``(a) In General.--Subject to subsection (b), grants awarded under 
this part may be used to establish or expand community learning centers 
that provide 1 or more of the following activities:'';
            (2) in subsection (a)(11) (as redesignated by paragraph 
        (1)), by inserting ``, and job skills preparation'' after 
        ``placement'';
            (3) by adding at the end of subsection (a) (as redesignated 
        by paragraph (1)) the following:
            ``(14) Mentoring programs.
            ``(15) Academic assistance programs.
            ``(16) Drug, alcohol, and gang prevention activities.''; 
        and
            (4) by adding at the end the following:
    ``(b) Special Rules.--Each grant awarded under this part--
            ``(1) shall be used for an activity described in subsection 
        (a) that--
                    ``(A) offers expanded learning opportunities for 
                children and youth in the community; and
                    ``(B) is conducted before or after school, except 
                that a supportive activity, such as training, may be 
                conducted during school if the supportive activity 
                relates directly to the activity described in 
                subsection (a) that is conducted before or after 
                school; and
            ``(2) may be used for an activity described in subsection 
        (a) that does not offer expanded learning opportunities for 
        children and youth in the community.''.

SEC. 305. CONTINUATION AWARDS UNDER CURRENT STATUTE.

    Such Act (20 U.S.C. 8241 et seq.) is further amended--
            (1) by redesignating sections 10906 and 10907 (20 U.S.C. 
        8246 and 8247) as sections 10907 and 10908, respectively; and
            (2) by inserting after section 10906 the following:

``SEC. 10907. CONTINUATION AWARDS.

    ``Notwithstanding any other provision of law, the Secretary may use 
funds appropriated under this part to make payments under this part for 
projects that were funded under this part for fiscal year 1998, under 
the terms and conditions that applied to the original grants for the 
projects.''.

SEC. 306. AUTHORIZATION OF APPROPRIATIONS.

    Section 10908 of such Act (as redesignated by section 305(1)) (20 
U.S.C. 8247) is amended by striking ``$20,000,000 for fiscal year 
1995'' and inserting ``$200,000,000 for fiscal year 1999''.

SEC. 307. EFFECTIVE DATE.

    This title, and the amendments made by this title, shall take 
effect on October 1, 1998.

    TITLE IV--PROMOTING EFFECTIVE USE OF TECHNOLOGY IN THE CLASSROOM

SEC. 401. FINDINGS.

    Congress makes the following findings:
            (1) Integrating technology effectively in the classroom 
        must be a central component of preparing students for the 21st 
        century. The American people recognize that such effective 
        integration must be a priority. 74 percent of Americans agree 
        that computers improve the quality of education, and 48 percent 
        believe their community's public schools offer too little 
        access to adequate computers and technology.
            (2) Nearly \1/4\ of the jobs added to the economy in 1997 
        were in technology-based occupations, according to the 
        Department of Labor. By the year 2000, 60 percent of all jobs 
        in the Nation will require skills in computer and network use. 
        In 1998, just 22 percent of workers have those skills.
            (3) The effective use of technology in the classroom 
        improves students' mastery of basic skills, test scores, 
        writing, and engagement in school. With these gains come 
        decreases in dropout rates and decreases in attendance and 
        discipline problems.
            (4) 78 percent of our Nation's schools had access to the 
        Internet in 1997, representing an increase from 35 percent in 
        1994, so our Nation is making progress. But only 27 percent of 
        our Nation's classrooms are wired for the Internet and far 
        fewer classrooms in high-poverty areas are so wired.
            (5) The fund providing funds for the provision of 
        telecommunications services under section 254(h) of the 
        Telecommunications Act of 1934 (47 U.S.C. 254(h)) (popularly 
        known as the ``E-rate''), will provide up to $2,250,000,000 
        annually in discounts to assure every American school and 
        library access to telecommunications services, internal 
        connections, and Internet access. More than 20,000 schools and 
        libraries have applied to participate in the program assisted 
        under such section.
            (6) The National Governors' Association has urged Congress 
        to maintain the integrity of the fund described in paragraph 
        (5), including providing adequate funding for the fund 
        currently and in the future.
            (7) Congress has established important programs such as the 
        School Technology Resource Grants Program, the National 
        Challenge Grants for Technology in Education Program, and the 
        Star Schools Program to help schools obtain equipment. Federal 
        assistance has helped many communities integrate technology 
        into the classroom. Additional resources are needed to continue 
        this effort, as well as an effort to help train teachers in 
        using technology effectively.
            (8) The Nation's Governors and Congress have endorsed a set 
        of National Education Goals which include preparation of 
        teachers in the use of emerging technologies.
            (9) According to a 1997 study, only 10 percent of new 
        teachers reported they felt prepared to use technology in their 
        classrooms, reflecting inadequate training in the use of 
        classroom educational technology during undergraduate 
        preparation.
            (10) There is no national standard for the capabilities of 
        teachers in the use of emerging technologies, though several 
        voluntary standards have been developed by the National Council 
        for the Accreditation of Teacher Education (NCATE), and are 
        being developed by the Interstate Teacher Assessment and 
        Support Consortium (INTASC) and the National Board for 
        Professional Teaching Standards (NBPTS).
            (11) In 1996, when asked to rate the greatest barriers to 
        integrating the Internet into the classroom, 50 percent of 
        teachers cited the lack of time to train.
            (12) Only 14 percent of public school teachers had more 
        than 8 hours of training (in in-service or professional 
        development programs) in the area of educational technology in 
        the 1993-1994 school year.
            (13) Among teachers who report having 1 or more computer 
        systems readily available at school, only 62 percent use a 
        computer regularly for instruction.
            (14) The State of Florida has addressed the issue of 
        funding by requiring that recipients of its educational 
        technology grants set aside at least 30 percent of all grant 
        funds for staff development.
            (15) For most teachers, it will take between 3 and 6 years 
        to fully integrate information technologies into the teachers' 
        teaching activities, and ongoing technological changes are 
        likely to ensure that the learning curve never levels off 
        completely.
            (16) 18 States require preservice technology training, 
        while only 2 require in-service technology training, and 32 
        other States require a course or some equivalent experience in 
        educational technology.
            (17) A majority of teachers felt they needed training in 
        order to adequately use a personal computer (56 percent), 
        standard computer software (61 percent), multimedia software 
        (62 percent), instructional videodiscs (67 percent), and on-
        line databases (72 percent).
            (18) Accessing Federal funding for technology-related 
        teacher development is difficult. Many programs allow State or 
        local grantees to decide whether to fund teacher technology 
        training. Often technology-related training and, in general, 
        professional development are viewed as niceties rather than 
        necessities.
            (19) In academic year 1996-1997, school districts around 
        the Nation reported that only 6 percent of the technology 
        budget (or $4.18 per pupil), was spent on technology training 
        for teachers. This represents only \1/5\ of the 30 percent 
recommended by education experts.
            (20) Congress must provide new funding to help ensure that 
        all new teachers are prepared to integrate technology 
        effectively into the curriculum, and can understand the new 
        styles of teaching and learning facilitated by technology.
            (21) Most colleges of education do not adequately prepare 
        teachers to use educational technology. While many college 
        students are technology literate, incoming teachers require 
        focused training on how to use new technologies to enhance 
        student learning.

SEC. 402. INCREASED FUNDING FOR EDUCATION TECHNOLOGY.

    It is the sense of Congress that it is in our Nation's interest for 
the Federal Government to invest at least $4,000,000,000 in funding for 
Department of Education technology programs between fiscal years 1999 
and 2003.

SEC. 403. LIMITING INTERNET ACCESS TO INAPPROPRIATE MATERIALS.

    (a) Short Title.--This section may be cited as the ``Internet 
Access Protection Act of 1998''.
    (b) Supervision Policies Required.--Section 254 of the 
Communications Act of 1934 (47 U.S.C. 254) is amended by adding at the 
end the following:
    ``(l) Supervision Policies Required.--
            ``(1) Policy statement.--An elementary school, secondary 
        school, or library that obtains services or preferential rates 
        or treatment under this section shall establish a policy with 
        respect to access to material that is inappropriate for 
        children.
            ``(2) Continued eligibility conditioned on statement.--
        After January 1, 1999, an elementary school, secondary school, 
        or library may not continue to be eligible to obtain services 
        or preferential rates or treatment under this section unless 
        such school or library has filed a copy of the statement 
        required by paragraph (1) with the Commission or an entity 
        designated by the Commission.''.

SEC. 404. SCHOOL TECHNOLOGY RESOURCE GRANTS.

    Subsection (a) of section 3132 of the Technology for Education Act 
of 1994 (20 U.S.C. 6842(a)) is amended by adding at the end the 
following:
            ``(3) Priority.--Each State educational agency receiving a 
        grant under paragraph (1) shall give priority to awarding 
        grants under this section to local educational agencies that--
                    ``(A) serve the highest number or percentage of 
                children in poverty, and have the lowest level of 
                technology resources, in the State; or
                    ``(B) provide evidence in the application submitted 
                under section 3133 of a substantial commitment to train 
                teachers and staff in the effective use of education 
                technology, as demonstrated by devoting not less than 
                30 percent of the funds to be provided under the grant 
                for preparing teachers to use technology as a tool in 
                conducting lessons and academic instruction in core 
                academic subject areas.
            ``(4) Matching requirement.--In order to receive a grant 
        under paragraph (1) for any of the fiscal years 1999 through 
        2004, a State educational agency shall provide matching funds 
        from non-Federal sources, in an amount equal to the amount of 
        the grant for the fiscal year, which matching funds shall be 
        used to award grants to local educational agencies under this 
        section for the fiscal year.
            ``(5) Supplement not supplant.--Grant funds provided to a 
        State educational agency under paragraph (1) shall be used to 
        supplement and not supplant State and local funds available to 
        carry out the activities assisted under this section.
            ``(6) Report.--Each State educational agency receiving a 
        grant under this section shall annually report to the Secretary 
        regarding--
                    ``(A) the criteria the State educational agency 
                uses to award grants to local educational agencies 
                under this section; and
                    ``(B) the types of grants so awarded and a 
                description of the activities assisted under each grant 
                so awarded.''.

SEC. 405. NATIONAL CHALLENGE GRANTS FOR TECHNOLOGY IN EDUCATION.

    Section 3136 of the Technology for Education Act of 1994 (20 U.S.C. 
6846) is amended by adding at the end the following:
    ``(e) Special Priority Rule.--Notwithstanding any other provision 
of this section, the Secretary shall use the greater of $30,000,000 or 
30 percent of the amount available to carry out this section for a 
fiscal year to award grants to consortia that--
            ``(1) demonstrate in the application submitted under 
        subsection (d) that the consortia will focus the activities 
        assisted under the grant on professional development in the 
        effective use of learning technologies;
            ``(2) have as members of the consortia departments of 
        education within an institution of higher education; and
            ``(3) demonstrate in the application that the consortia 
        have carried out, and are carrying out, the professional 
        development described in paragraph (1).''.

SEC. 406. TECHNOLOGY TRAINING FOR PRESERVICE AND NOVICE TEACHERS.

    Subpart 2 of part A of the Technology for Education Act of 1994 (20 
U.S.C. 6841 et seq.) is amended by adding at the end the following:

``SEC. 3138. TECHNOLOGY TRAINING FOR PRESERVICE AND NOVICE TEACHERS.

    ``(a) Purpose.--The purpose of this section is to promote the 
training of teaching candidates and faculty at schools of education 
within institutions of higher education regarding the effective use and 
integration of education technology in teaching academic subjects to 
elementary and secondary school students.
    ``(b) Grants.--From amounts appropriated under subsection (g), the 
Secretary may award grants, on a competitive basis, to eligible 
partnerships to enable the eligible partnerships to carry out the 
authorized activities described in subsection (d).
    ``(c) Eligible Partnerships Defined.--In this section the term 
`eligible partnership' means a partnership between 2 or more of the 
following:
            ``(1) A State educational agency.
            ``(2) A school of education within an institution of higher 
        education.
            ``(3) A local educational agency that frequently employs 
        individuals recently trained at a school described in paragraph 
        (2).
            ``(4) A nonprofit or other organization.
    ``(d) Authorized Activities.--Grant funds under this section may be 
used--
            ``(1) to integrate technology into academic subject areas;
            ``(2) to provide training to faculty in effective use of 
        learning technologies in raising student achievement and 
        individualizing instruction to best take advantage of reduced 
        class size;
            ``(3) to expand exemplary practices within States, with 
        respect to the effective use and integration of technology in 
        teaching;
            ``(4) to disseminate effective practices nationwide, with 
        respect to the effective use and integration of technology in 
        teaching;
            ``(5) to support strategies such as intensive summer 
        institutes, faculty development and curriculum reform, and 
        hands-on experience pairing preservice and master teachers, 
        with respect to the effective use and integration of technology 
        in teaching; and
            ``(6) to target 1 or more core subject areas, and focus on 
        specific grade levels, or to target school districts with high 
        rates of novice teachers, with respect to the effective use and 
        integration of technology in teaching.
    ``(e) Requirements.--
            ``(1) Equitable distribution.--In awarding grants under 
        this section, the Secretary shall ensure an equitable 
        distribution among eligible partnerships serving different 
        geographic areas of the United States.
            ``(2) Coordination.--The Secretary shall carry out 
        activities under this section and section 3136 through the same 
        office or entity within the Department.
    ``(f) Applicability.--The provisions of this subpart other than 
this section shall not apply to this section.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated $75,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.''.

SEC. 407. RESEARCH, DEVELOPMENT, AND EVALUATION.

    The Education for Technology Act of 1994 (20 U.S.C. 6801 et seq.) 
is amended by adding at the end the following:

           ``Subpart 5--Research, Development, and Education

``SEC. 3152. EDUCATION TECHNOLOGY INNOVATION PROGRAM.

    ``(a) Purpose.--The purpose of this section is to establish 
funding, to be managed jointly by the Director of the Office of 
Educational Research and Improvement and the Chairperson of the 
National Science Foundation, to support innovative research in 
education technology, development of research results in partnership 
with the private sector, and evaluation that identifies the most 
effective approaches of implementing education technology.
    ``(b) Program Authorized.--From amounts appropriated under 
subsection (f), the Director of the Office of Educational Research and 
Improvement and the Chairperson of the National Science Foundation, in 
conjunction with the Secretary's adviser on education technology, shall 
establish a program to be known as the `Education Technology Innovation 
and Evaluation Program'. Such program shall--
            ``(1) support early stage research on new education 
        technologies and innovative methods of integrating technology 
        and academic instruction;
            ``(2) promote joint product development, adoption, and 
        dissemination of high-quality software and instructional 
        approaches with private sector firms;
            ``(3) conduct evaluative research into the effectiveness of 
        integrating learning technology in raising student achievement; 
        and
            ``(4) demonstrate how technology can be used to 
        individualize instruction and capitalize on smaller teacher-
        student ratios.
    ``(c) Evaluative Research.--The evaluative research described in 
subsection (b)(3) shall be performed by conducting a large scale study 
comparing learning for students exposed to education technology to a 
control group.
    ``(d) Competitive Awards.--The activities described in paragraphs 
(1) through (4) of subsection (b) (including the study described in 
subsection (c)) shall be conducted through awards made on a competitive 
basis to consortia of research entities.
    ``(e) Objective and Administration.--The Director of the Office of 
Educational Research and Improvement and the Chairperson of the 
National Science Foundation shall ensure an appropriate balance among 
the activities described in subsection (b) in order to promote the 
long-term growth and effectiveness of technology in schools.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated $75,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.''.

                  TITLE V--EDUCATION OPPORTUNITY ZONES

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Education Opportunity Zones Act of 
1998''.

SEC. 502. FINDINGS.

    Congress makes the following findings:
            (1) Students in schools that have high concentrations of 
        poor children begin school academically behind their peers in 
        other schools and are often unable to close the gap as they 
        progress through school. In later years, these students are 
        less likely than other students to attend a college or 
        university and more likely to experience unemployment.
            (2) Because of high levels of poverty in the communities 
        served by the schools and low levels of resources, many 
        children who attend these high-poverty schools lack access to 
        the challenging curricula, well-prepared teachers, and high 
        expectations that make better achievement possible.
            (3) Data from the National Assessment of Educational 
        Progress consistently show large gaps between the achievement 
        of students in high-poverty schools and those in other schools. 
        High-poverty schools will face special challenges in preparing 
        their students to succeed on new and more challenging national 
        and State assessments, such as voluntary national tests and the 
        assessments States are developing under the programs assisted 
        under the Goals 2000: Educate America Act and section 1111(b) 
        of the Elementary and Secondary Education Act of 1965.
            (4) Recent reports have found that students in urban school 
        districts are more likely to attend high-poverty schools, are 
        more frequently taught by teachers possessing only an emergency 
        or temporary license, and are less likely to score above the 
        basic level on achievement tests, than are nonurban students.
            (5) High-poverty rural schools, because of their isolation, 
        small size, and low level of resources, also face particular 
        challenges. For example, teachers in rural school districts are 
        nearly twice as likely as nonrural teachers to provide 
        instruction in 3 or more subjects.
            (6) Notwithstanding these general trends, some high-poverty 
        school districts have shown that they can achieve outstanding 
        educational outcomes, if they adopt challenging standards for 
        all children, expand public school choice for parents and 
        students, adopt the other components of systemic educational 
        reform, and hold schools, staff, and students accountable for 
        results. Generally, however, these successes have occurred in 
        isolated schools rather than throughout a school district.
            (7) School districts that have established the policies 
        needed to attain widespread student achievement gains, and have 
        attained those gains in some of their schools, can serve as 
        models for other school districts desiring to improve the 
        academic achievement of their students. The Federal Government 
        can spur more school districts in this direction by providing 
        targeted resources for urban and rural school districts willing 
        to carry out solid plans for improving the educational 
        achievement of all their children.

 SEC. 503. PURPOSE.

    The purpose of this title is to assist urban and rural local 
educational agencies that--
            (1) have high concentrations of children from low-income 
        families; and
            (2) are implementing standards-based systemic reform 
        strategies in order to pursue further reforms and raise the 
        academic achievement of all their students.

 SEC. 504. DEFINITIONS.

    In this title:
            (1) Central city.--The term ``central city'' includes the 
        area defined as such by the Director of the Office of 
        Management and Budget.
            (2) High-poverty local educational agency.--The term 
        ``high-poverty local educational agency'' means a local 
        educational agency in which the percentage of children, ages 5 
        through 17, from families with incomes below the poverty level 
        is 20 percent or greater or the number of such children exceeds 
        10,000.
            (3) Local educational agency.--The term ``local educational 
        agency''--
                    (A) has the meaning given that term in subparagraph 
                (A) or (B) of section 14101(18) of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 8801(18)); 
                and
                    (B) includes elementary schools and secondary 
                schools operated or supported by the Bureau of Indian 
                Affairs.
            (4) Metropolitan statistical area.--The term ``metropolitan 
        statistical area'' includes the area defined as such by the 
        Director of the Office of Management and Budget.
            (5) Rural locality.--The term ``rural locality'' means a 
        locality that is not within a metropolitan statistical area and 
        has a population of less than 25,000.
            (6) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, Guam, American Samoa, the United 
        States Virgin Islands, and the Commonwealth of the Northern 
        Mariana Islands.
            (7) Urban locality.--The term ``urban locality'' means a 
        locality that is--
                    (A) a central city of a metropolitan statistical 
                area; or
                    (B) any other locality within a metropolitan 
                statistical area if that area has a population of at 
                least 400,000 or a population density of at least 6,000 
                persons per square mile.

SEC. 505. GRANTS AUTHORIZED.

    (a) Grants Authorized.--From funds appropriated under section 515 
for a fiscal year, the Secretary may award grants to eligible local 
educational agencies described in subsection (b) to enable the local 
educational agencies to carry out the authorized activities described 
in section 510.
    (b) Eligible Local Educational Agencies.--A local educational 
agency is eligible to receive a grant under this title if the local 
educational agency is--
            (1) a high-poverty local educational agency;
            (2) located in, or serves, an urban locality or a rural 
        locality; and
            (3) serves schools located in a State.
    (c) Determination of Eligibility.--The Secretary shall determine 
which local educational agencies meet the eligibility requirements of 
subsection (a) on the basis of the most recent data that are 
satisfactory to the Secretary.

 SEC. 506. APPLICATIONS.

    (a) Applications Required.--In order to receive a grant under this 
title, an eligible local educational agency shall submit an application 
to the Secretary at such time, in such form, and containing such 
information as the Secretary may require.
    (b) Contents.--The application shall include evidence that the 
local educational agency--
            (1) has begun to raise student achievement throughout the 
        school district or, at a minimum, in schools that have 
        implemented a comprehensive school improvement strategy that 
        the Secretary determines has the potential to raise student 
        achievement, as measured through the assessments States develop 
        under title III of the Goals 2000: Educate America Act (20 
        U.S.C. 5881 et seq.) or section 1111(b) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.), or 
        through comparably rigorous State or local assessments (which 
        shall include data disaggregated to show the achievement of 
        students in different racial groups, by gender, and for 
        students with disabilities and with limited English 
        proficiency);
            (2) expects all students to achieve to challenging State or 
        local content standards, has developed or is developing 
        assessments aligned with those standards, and has implemented 
        or is implementing comprehensive reform policies designed to 
        assist all children to achieve to the standards;
            (3) has entered into a partnership that--
                    (A) includes the active involvement of 
                representatives of local educational organizations and 
                agencies, parents, and other members of the community; 
                and
                    (B) is designed to guide the implementation of the 
                local educational agency's comprehensive reform 
                strategy; and
            (4) has put or is putting into place effective educational 
        reform policies, including policies that--
                    (A) hold schools accountable for helping all 
                students, including students with limited English 
                proficiency and students with disabilities, reach high 
                academic standards, including by rewarding schools that 
                succeed and providing technical assistance to schools 
                that fail to make progress (including evidence of the 
                approach that the local educational agency will take to 
                assist schools that fail to achieve progress toward 
                student achievement goals);
                    (B) require all students, including students with 
                disabilities and students with limited English 
                proficiency, to meet academic standards, such as 
                standards adopted under section 1111(b) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6311 (b)), before being promoted to the next 
                grade level at key transition points in their academic 
                careers or graduating from secondary school, including 
                evidence of the local educational agency's strategy for 
                providing students with effective, research-based 
                programs and a rich curriculum tied to high standards, 
                and with qualified teachers and class sizes conducive 
                to high student achievement;
                    (C) identify, during the early stages of their 
                academic careers, students who have difficulty in 
                achieving to high standards, and provide them, and 
                other students who have failed to meet the standards, 
                with additional learning opportunities, so that the 
                students are able to meet the standards at key 
                transition points in their academic careers;
                    (D) hold teachers and principals accountable for 
                quality, including the local educational agency's 
                strategies for ensuring quality through, among other 
                things--
                            (i) development of clearly articulated 
                        standards for teachers and school 
                        administrators, and development, in cooperation 
                        with teacher organizations, of procedures for 
                        identifying, working with, and, if necessary, 
                        fairly and expeditiously removing, teachers who 
                        fail to meet the standards (consistent with 
                        procedural and substantive due process rights);
                            (ii) implementation of a comprehensive 
                        professional development plan for teachers, 
                        school employees, and school administrators; 
                        and
                            (iii) encouraging excellent teaching by, 
                        among other things, providing incentives for 
                        teachers to obtain certification from the 
                        National Board for Professional Teaching 
                        Standards; and
                    (E) provide students and parents with expanded 
                choice within public education.
    (c) Description of Proposed Program.--The application shall also 
include a description of how the local educational agency will use the 
grant funds provided under this title, including descriptions of--
            (1) how the local educational agency will use all available 
        resources (including Federal, State, local, and private 
        resources) to carry out the local educational agency's reform 
        strategy;
            (2) the specific measures that the local educational agency 
        proposes to use to provide evidence of future progress in 
        improving student achievement, including the subject areas and 
        grade levels in which the local educational agency will measure 
        that progress, and an assurance that the local educational 
        agency will collect such student data in a manner that 
        demonstrates the achievement of students in different racial 
        groups, by gender, from families with different income levels, 
        and for students with disabilities and with limited English 
        proficiency; and
            (3) how the local educational agency will continue the 
        activities carried out under the grant after the grant has 
        expired.

 SEC. 507. SELECTION OF APPLICATIONS.

    (a) Criteria.--The Secretary, using a peer review process, shall 
select a local educational agency to receive a grant under this title 
based on--
            (1) evidence that--
                    (A) the local educational agency has made progress 
                in improving student achievement, in at least some of 
                the schools served by the local educational agency that 
                enroll concentrations of children from low-income 
                families; or
                    (B) the local educational agency has put or is 
                putting into place effective educational reform 
                policies as described in section 506(b)(4); and
            (2) the quality of the local educational agency's plan for 
        carrying out activities under the grant as set forth in the 
        application.
    (b) Equitable Distribution.--In approving applications, the 
Secretary shall seek to ensure that there is an equitable distribution 
of grants among--
            (1) geographic regions of the States;
            (2) varying sizes of urban local educational agencies; and
            (3) rural local educational agencies, including rural local 
        educational agencies serving concentrations of Indian children.

 SEC. 508. PRESIDENTIAL DESIGNATION; TECHNICAL ASSISTANCE.

    (a) Designation as Education Opportunity Zone.--The President shall 
designate the school district served by each local educational agency 
selected by the Secretary to receive a grant under this title as an 
``Education Opportunity Zone''.
    (b) Technical Assistance.--The President may instruct Federal 
agencies to provide grant recipients under this title with such 
technical and other assistance as those agencies can make available to 
enable the recipients to carry out the activities assisted under this 
title.

 SEC. 509. AMOUNT AND DURATION OF GRANTS; CONTINUATION AWARDS.

    (a) Grant Amounts.--
            (1) In general.--In determining the amount of a grant, the 
        Secretary shall consider such factors as--
                    (A) the scope of the activities proposed in the 
                application;
                    (B) the number of students served by the local 
                educational agency who are from low-income families;
                    (C) the number of low-performing schools served by 
                the local educational agency; and
                    (D) the number of students served by the local 
                educational agency who are not reaching State or local 
                standards.
            (2) Increases.--The Secretary may increase the amount of a 
        grant in the second year, in order to permit full 
        implementation of grant activities, except that--
                    (A) the amount of a second-year award shall be not 
                more than 140 percent of the award for the first year;
                    (B) the amount of a third-year award shall be not 
                more than 80 percent of the second-year award;
                    (C) the amount of a fourth-year award shall be not 
                more than 70 percent of the second-year award; and
                    (D) the amount of a fifth-year award shall be not 
                more than 50 percent of the second-year award.
    (b) Grant Duration.--Each grant shall be awarded for a period of 3 
years, but may be continued for not more than 2 additional years if the 
local educational agency is achieving the levels of achievement 
described in subsection (c) before the end of the third year of the 
grant.
    (c) Expected Levels of Achievement and Continuation Awards.--
            (1) In general.--Before receiving an award under this 
        title, each local educational agency shall develop and adopt, 
        with the approval of the Secretary, specific, ambitious levels 
        of achievement that the local educational agency will commit to 
        attaining during the period of the grant.
            (2) Levels of Achievement.--The levels of achievement--
                    (A) shall reflect progress in student academic 
                achievement;
                    (B) shall also reflect progress in--
                            (i) dropout rates;
                            (ii) attendance; and
                            (iii) such other areas as may be proposed 
                        by the local educational agency or the 
                        Secretary; and
                    (C) shall provide for the disaggregation of data on 
                the basis of race and gender, and for disabled and 
                limited English proficient students.
            (3) Continuation awards.--The Secretary shall make 
        continuation awards for the 4th and 5th years of a grant only 
        after determining that the local educational agency has 
        achieved the agreed-upon levels of achievement.

 SEC. 510. AUTHORIZED ACTIVITIES.

    (a) In General.--Each local educational agency shall use grant 
funds under this title only for activities that support the 
comprehensive reform efforts described in the local educational 
agency's application or that are otherwise consistent with the purpose 
of this title.
    (b) Authorized Activities.--Activities that may be carried out with 
funds under this title include--
            (1) implementing school-performance-information systems to 
        measure the performance of schools in educating their students 
        to high standards, maintaining a safe school environment, and 
        achieving the anticipated school attendance and graduation 
        rates;
            (2) implementing school district accountability systems 
        that reward schools that raise student achievement and provide 
        assistance to, and ultimately result in comprehensive reforms 
        in and redesign of, schools that fail to do so, including such 
        strategies as technical assistance on school management and 
        leadership, intensive professional development for school 
        staff, or institution of new instructional programs that are 
        based on reliable research;
            (3) providing students with expanded choice and increased 
        curriculum options within public education, through such means 
        as open-enrollment policies, schools within schools, magnet 
        schools, charter schools, distance-learning programs, and 
        opportunities for secondary school students to take 
        postsecondary courses;
            (4) implementing financial incentives for schools to make 
        progress against the goals and benchmarks the local educational 
        agency has established for the program;
            (5) providing additional learning opportunities to students 
        who are failing, or are at risk of failing, to achieve to high 
        standards, such as after-school, weekend, and summer programs;
            (6) providing ongoing professional development 
        opportunities to teachers, principals, and other school staff 
        that are tailored to the needs of individual schools, and 
        aligned with the State or local academic standards and to the 
        objectives of the program carried out under the grant;
            (7) implementing programs to provide remuneration for 
        teachers who earn certification from the National Board for 
        Professional Teaching Standards;
            (8) implementing procedures for identifying ineffective 
        teachers, providing the teachers with assistance to improve 
        their skills and, if there is no improvement, fairly and 
        expeditiously removing the teachers from the classroom 
        (consistent with procedural and substantive due process 
        rights);
            (9) establishing programs to improve the recruitment of 
        qualified teachers;
            (10) implementing procedures for selecting and retaining 
        principals who have the ability to provide the school with the 
        leadership needed to raise student achievement;
            (11) strengthening the management of the local educational 
        agency so that all components of management are focused on 
        improving student achievement;
            (12) carrying out activities to build stronger partnerships 
        among schools, parents, local businesses, and communities; and
            (13) assessing activities carried out under the grant, 
        including the extent to which the grant is achieving the 
        objectives for which the grant is awarded.

 SEC. 511. FLEXIBILITY.

    (a) Eligibility for Schoolwide Programs Under Title I of the 
Elementary and Secondary Education Act of 1965.--Each school served by 
a local educational agency receiving funding under this title shall be 
considered as meeting the criteria for eligibility to implement a 
schoolwide program described in section 1114 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6314).
    (b) Carrying Out Schoolwide Programs.--Each school that meets the 
criteria for eligibility to implement a schoolwide program pursuant to 
subsection (a) and that wishes to carry out a schoolwide program shall 
develop--
            (1) a plan that satisfies the requirements of section 
        1114(b)(2) of the Elementary and Secondary Education Act of 
        1965; and
            (2) a program that includes the components of a schoolwide 
        program described in section 1114(b)(1) of that Act.
    (c) Applicability.--The provisions of section 1114 of the 
Elementary and Secondary Education Act of 1965 (other than the 
provisions referred to in subsection (b)) shall not apply to a school 
operating a schoolwide program pursuant to this section.

 SEC. 512. PARTICIPATION OF PRIVATE SCHOOL STUDENTS AND TEACHERS.

    (a) Materials and Training.--Proportionate to the number of 
children who are eligible for assistance under part A of title I of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) 
and are enrolled in private elementary or secondary schools in the area 
served by a local educational agency that receives a grant under this 
title--
            (1) if the local educational agency uses funds under this 
        title to develop curricular materials, the local educational 
        agency shall, upon request, make information about those 
        materials available to private schools; and
            (2) if the local educational agency uses funds under this 
        title for teacher and administrator training, the local 
        educational agency shall, upon request, provide for the 
        participation of teachers and administrators from private 
        schools in that training.
    (b) Waiver.--If, by reason of any provision of law, a local 
educational agency is prohibited from providing training for private 
school teachers and administrators as required by subsection (a)(2), or 
if the Secretary determines that the agency is unwilling or unable to 
do so, the Secretary shall waive that requirement and shall use a 
portion of the agency's grant to arrange for the provision of that 
training.

 SEC. 513. EVALUATION.

    The Secretary shall carry out an evaluation of the program assisted 
under this title, that shall address such issues as the extent to 
which--
            (1) student achievement increases in local educational 
        agencies receiving assistance under this title;
            (2) local educational agencies receiving assistance under 
        this title expand the choices for students and parents within 
        public education;
            (3) local educational agencies receiving assistance under 
        this title develop and implement systems to hold schools, 
        teachers, and principals accountable for student achievement; 
        and
            (4) school staff and leadership receive ongoing 
        professional development aligned with the needs of the school.

 SEC. 514. NATIONAL ACTIVITIES.

    The Secretary may reserve not more than 5 percent of the amount 
appropriated under section 515 for any fiscal year for--
            (1) peer review activities;
            (2) evaluation of the program under section 513 and 
        measurement of the program's effectiveness in accordance with 
        the amendments made by the Government Performance and Results 
        Act of 1993 (Public Law 103-62; 107 Stat. 285);
            (3) dissemination of research findings, evaluation data, 
        and the experiences of other school districts implementing 
        comprehensive school reform; and
            (4) technical assistance to local educational agencies 
        receiving grants under this title.

 SEC. 515. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title 
$200,000,000 for fiscal year 1999, and such sums as may be necessary 
for each of the 4 succeeding fiscal years.
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