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•HR 1 RH1&2 
‘‘(2) SPECIAL RULE.—No local educational agen-
cy shall be required to provide services under this 
part through a particular instructional method or in 
a particular instructional setting in order to dem-
onstrate such agency’s compliance with paragraph 
(1). 
‘‘(c) COMPARABILITY OF SERVICES.— 
‘‘(1) IN GENERAL.—(A) Except as provided in 
paragraphs (4) and (5), a local educational agency 
may receive funds under this part only if State and 
local funds will be used in schools served under this 
part to provide services that, taken as a whole, are at 
least comparable to services in schools that are not re-
ceiving funds under this part. 
‘‘(B) If the local educational agency is serving 
all of such agency’s schools under this part, such 
agency may receive funds under this part only if such 
agency will use State and local funds to provide serv-
ices that, taken as a whole, are substantially com-
parable in each school. 
‘‘(C) A local educational agency may meet the 
requirements of subparagraphs (A) and (B) on a 
grade-span by grade-span basis or a school-by-school 
basis. 
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•HR 1 RH1&2 
‘‘(2) WRITTEN
ASSURANCE.—(A) A local edu-
cational agency shall be considered to have met the re-
quirements of paragraph (1) if such agency has filed 
with the State educational agency a written assur-
ance that such agency has established and imple-
mented— 
‘‘(i) a local educational agency-wide salary 
schedule; 
‘‘(ii) a policy to ensure equivalence among 
schools in teachers, administrators, and other 
staff; and 
‘‘(iii) a policy to ensure equivalence among 
schools in the provision of curriculum materials 
and instructional supplies. 
‘‘(B) For the purpose of subparagraph (A), in 
the determination of expenditures per pupil from 
State and local funds, or instructional salaries per 
pupil from State and local funds, staff salary dif-
ferentials for years of employment shall not be in-
cluded in such determinations. 
‘‘(C) A local educational agency need not include 
unpredictable changes in student enrollment or per-
sonnel assignments that occur after the beginning of 
a school year in determining comparability of services 
under this subsection. 
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‘‘(3) PROCEDURES AND RECORDS.—Each local 
educational agency assisted under this part shall— 
‘‘(A) develop procedures for compliance with 
this subsection; and 
‘‘(B) maintain records that are updated bi-
ennially documenting such agency’s compliance 
with this subsection. 
‘‘(4) INAPPLICABILITY.—This subsection shall 
not apply to a local educational agency that does not 
have more than 1 building for each grade span. 
‘‘(5) COMPLIANCE.—For the purpose of deter-
mining compliance with paragraph (1), a local edu-
cational agency may exclude State and local funds 
expended for— 
‘‘(A) English language instruction for chil-
dren of limited English proficiency; and 
‘‘(B) excess costs of providing services to 
children with disabilities as determined by the 
local educational agency. 
‘‘(d) EXCLUSION OF FUNDS.—For the purpose of 
complying with subsections (b) and (c), a State or local 
educational agency may exclude supplemental State or 
local funds expended in any school attendance area or 
school for programs that meet the intent and purposes of 
this part. 
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•HR 1 RH1&2 
‘‘SEC. 1120B. COORDINATION REQUIREMENTS. 
‘‘(a) IN GENERAL.—Each local educational agency re-
ceiving assistance under this part shall carry out the activi-
ties described in subsection (b) with Head Start Agencies, 
and if feasible, other early childhood development programs 
such as Early Reading First. 
‘‘(b) ACTIVITIES.—The activities referred to in sub-
section (a) are activities that increase coordination between 
the local educational agency and a Head Start agency, and, 
if feasible, other early childhood development programs, 
such as Early Reading First serving children who will at-
tend the schools of such agency, including— 
‘‘(1) developing and implementing a systematic 
procedure for receiving records regarding such chil-
dren transferred with parental consent from a Head 
Start program or, where applicable, other early child-
hood development programs such as Early Reading 
First; 
‘‘(2) establishing channels of communication be-
tween school staff and their counterparts in such 
Head Start agencies (including teachers, social work-
ers, and health staff) or other early childhood develop-
ment programs such as Early Reading First, as ap-
propriate, to facilitate coordination of programs; 
‘‘(3) conducting meetings involving parents, kin-
dergarten or elementary school teachers, and Head 
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•HR 1 RH1&2 
Start teachers or, if appropriate, teachers from other 
early childhood development programs such as Early 
Reading First, to discuss the developmental and other 
needs of individual children; 
‘‘(4) organizing and participating in joint tran-
sition related training of school staff, Head Start 
staff, Early Reading First staff and, where appro-
priate, other early childhood staff; and 
‘‘(5) linking the educational services provided in 
such local educational agency with the services pro-
vided in local Head Start agencies and Early Read-
ing First programs. 
‘‘(c) COORDINATION OF REGULATIONS.—The Secretary 
shall work with the Secretary of Health and Human Serv-
ices to coordinate regulations promulgated under this part 
with regulations promulgated under the Head Start Act. 
‘‘Subpart 2—Allocations 
‘‘SEC. 1121. GRANTS FOR THE OUTLYING AREAS AND THE 
SECRETARY OF THE INTERIOR. 
‘‘(a) RESERVATION OF FUNDS.—From the amount ap-
propriated for payments to States for any fiscal year under 
section 1002(a), the Secretary shall reserve a total of 1 per-
cent to provide assistance to— 
‘‘(1) the outlying areas in the amount deter-
mined in accordance with subsection (b); and 
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•HR 1 RH1&2 
‘‘(2) the Secretary of the Interior in the amount 
necessary to make payments pursuant to subsection 
(d). 
‘‘(b) ASSISTANCE TO OUTLYING AREAS.— 
‘‘(1) FUNDS
RESERVED.—From the amount 
made available for any fiscal year under subsection 
(a), the Secretary shall award grants to the outlying 
areas. 
‘‘(2) COMPETITIVE GRANTS.—For each of fiscal 
years 2002 and 2003, the Secretary shall carry out 
the competition described in paragraph (3), except 
that the amount reserved to carry out such competi-
tion shall not exceed the amount reserved under this 
section for the freely associated states for fiscal year 
1999. 
‘‘(3) LIMITATION FOR COMPETITIVE GRANTS.— 
‘‘(A) COMPETITIVE GRANTS.—The Secretary 
shall use funds described in paragraph (2) to 
award grants, on a competitive basis, to the out-
lying areas and freely associated States to carry 
out the purposes of this part. 
‘‘(B) AWARD
BASIS.—The Secretary shall 
award grants under subparagraph (A) on a com-
petitive basis, pursuant to the recommendations 
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•HR 1 RH1&2 
of the Pacific Region Educational Laboratory in 
Honolulu, Hawaii. 
‘‘(C) ADMINISTRATIVE
COSTS.—The Sec-
retary may provide not more than 5 percent of 
the amount reserved for grants under this para-
graph to pay the administrative costs of the Pa-
cific Region Educational Laboratory under sub-
paragraph (B). 
‘‘(4) SPECIAL RULE.—The provisions of Public 
Law 95–134, permitting the consolidation of grants 
by the outlying areas, shall not apply to funds pro-
vided to the freely associated States under this sec-
tion. 
‘‘(c) DEFINITIONS.—For the purposes of subsections 
(a) and (b)— 
‘‘(1) the term ‘freely associated States’ means the 
Republic of the Marshall Islands, the Federated States 
of Micronesia, and the Republic of Palau; and 
‘‘(2) the term ‘outlying area’ means the United 
States Virgin Islands, Guam, American Samoa, and 
the Commonwealth of the Northern Mariana Islands. 
‘‘(d) ALLOTMENT TO THE SECRETARY OF THE INTE-
RIOR.— 
‘‘(1) IN GENERAL.—The amount allotted for pay-
ments to the Secretary of the Interior under sub-
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•HR 1 RH1&2 
section (a)(2) for any fiscal year shall be, as deter-
mined pursuant to criteria established by the Sec-
retary, the amount necessary to meet the special edu-
cational needs of— 
‘‘(A) Indian children on reservations served 
by elementary and secondary schools for Indian 
children operated or supported by the Depart-
ment of the Interior; and 
‘‘(B) out-of-State Indian children in ele-
mentary and secondary schools in local edu-
cational agencies under special contracts with 
the Department of the Interior. 
‘‘(2) PAYMENTS.—From the amount allotted for 
payments to the Secretary of the Interior under sub-
section (a)(2), the Secretary of the Interior shall make 
payments to local educational agencies, upon such 
terms as the Secretary determines will best carry out 
the purposes of this part, with respect to out-of-State 
Indian children described in paragraph (1). The 
amount of such payment may not exceed, for each 
such child, the greater of— 
‘‘(A) 40 percent of the average per-pupil ex-
penditure in the State in which the agency is lo-
cated; or 
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•HR 1 RH1&2 
‘‘(B) 48 percent of such expenditure in the 
United States. 
‘‘SEC. 1122. AMOUNTS FOR BASIC GRANTS, CONCENTRA-
TION GRANTS, AND TARGETED GRANTS. 
‘‘(a) ALLOCATION FORMULA.—Of the amount appro-
priated to carry out this part for each of fiscal years 2002 
through 2006 (referred to in this subsection as the current 
fiscal year)— 
‘‘(1) an amount equal to the amount appro-
priated to carry out section 1124 for fiscal year 2001 
shall be allocated in accordance with section 1124; 
‘‘(2) an amount equal to the amount appro-
priated to carry out section 1124A for fiscal year 
2001 shall be allocated in accordance with section 
1124A; and 
‘‘(3) an amount equal to 100 percent of the 
amount, if any, by which the amount appropriated 
under section 1002(a) for the current fiscal year ex-
ceeds the amount appropriated under such section for 
fiscal year 2001 shall be allocated in accordance with 
section 1125. 
‘‘(b) ADJUSTMENTS WHERE NECESSITATED BY AP-
PROPRIATIONS.— 
‘‘(1) IN GENERAL.—If the sums available under 
this part for any fiscal year are insufficient to pay 
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•HR 1 RH1&2 
the full amounts that all local educational agencies in 
States are eligible to receive under sections 1124, 
1124A, and 1125 for such year, the Secretary shall 
ratably reduce the allocations to such local edu-
cational agencies, subject to subsections (c) and (d) of 
this section. 
‘‘(2) ADDITIONAL FUNDS.—If additional funds 
become available for making payments under sections 
1124, 1124A, and 1125 for such fiscal year, alloca-
tions that were reduced under paragraph (1) shall be 
increased on the same basis as they were reduced. 
‘‘(c) HOLD-HARMLESS AMOUNTS.— 
‘‘(1) AMOUNTS FOR SECTIONS 1124 AND 1125.— 
For each fiscal year, the amount made available to 
each local educational agency under each of sections 
1124 and 1125 shall be— 
‘‘(A) not less than 95 percent of the amount 
made available in the preceding fiscal year if the 
number of children counted for grants under sec-
tion 1124 is not less than 30 percent of the total 
number of children aged 5 to 17 years, inclusive, 
in the local educational agency; 
‘‘(B) not less than 90 percent of the amount 
made available in the preceding fiscal year if the 
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•HR 1 RH1&2 
percentage described in subparagraph (A) is be-
tween 15 percent and 30 percent; and 
‘‘(C) not less than 85 percent of the amount 
made available in the preceding fiscal year if the 
percentage described in subparagraph (A) is 
below 15 percent. 
‘‘(2) AMOUNT FOR SECTION 1124A.—The amount 
made available to each local educational agency 
under section 1124A shall be not less than 85 percent 
of the amount made available in the preceding fiscal 
year. 
‘‘(3) PAYMENTS.—If sufficient funds are appro-
priated, the amounts described in paragraph (2) shall 
be paid to all local educational agencies that received 
grants under section 1124A for the preceding fiscal 
year, regardless of whether the local educational agen-
cy meets the minimum eligibility criteria for that fis-
cal year provided in section 1124A(a)(1)(A) except 
that a local educational agency that does not meet 
such minimum eligibility criteria for 4 consecutive 
years shall no longer be eligible to receive a hold 
harmless amount referred to in paragraph (2). 
‘‘(4) POPULATION DATA.—In any fiscal year for 
which the Secretary calculates grants on the basis of 
population data for counties, the Secretary shall 
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•HR 1 RH1&2 
apply the hold harmless percentages in paragraphs 
(1) and (2) to counties, and if the Secretary’s alloca-
tion for a county is not sufficient to meet the hold- 
harmless requirements of this subsection for every 
local educational agency within that county, the State 
educational agency shall reallocate funds proportion-
ately from all other local educational agencies in the 
State that are receiving funds in excess of the hold 
harmless amounts specified in this subsection. 
‘‘(d) RATABLE REDUCTIONS.— 
‘‘(1) IN GENERAL.—If the sums made available 
under this part for any fiscal year are insufficient to 
pay the full amounts that all States are eligible to re-
ceive under subsection (c) for such year, the Secretary 
shall ratably reduce such amounts for such year. 
‘‘(2) ADDITIONAL FUNDS.—If additional funds 
become available for making payments under sub-
section (c) for such fiscal year, amounts that were re-
duced under paragraph (1) shall be increased on the 
same basis as such amounts were reduced. 
‘‘(e) DEFINITION.—For the purpose of this section and 
sections 1124, 1124A, and 1125, the term ‘State’ means 
each of the 50 States, the District of Columbia, and the 
Commonwealth of Puerto Rico. 
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•HR 1 RH1&2 
‘‘SEC. 1124. BASIC GRANTS TO LOCAL EDUCATIONAL AGEN-
CIES. 
‘‘(a) AMOUNT OF GRANTS.— 
‘‘(1) GRANTS FOR LOCAL EDUCATIONAL AGEN-
CIES
AND
PUERTO
RICO.—Except as provided in 
paragraph (4) and in section 1126, the grant that a 
local educational agency is eligible to receive under 
this section for a fiscal year is the amount determined 
by multiplying— 
‘‘(A) the number of children counted under 
subsection (c); and 
‘‘(B) 40 percent of the average per-pupil ex-
penditure in the State, except that the amount 
determined under this subparagraph shall not be 
less than 32 percent or more than 48 percent, of 
the average per-pupil expenditure in the United 
States. 
‘‘(2) CALCULATION OF GRANTS.— 
‘‘(A) ALLOCATIONS TO LOCAL EDUCATIONAL 
AGENCIES.—The Secretary shall calculate grants 
under this section on the basis of the number of 
children counted under subsection (c) for local 
educational agencies, unless the Secretary and 
the Secretary of Commerce determine that some 
or all of those data are unreliable or that their 
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•HR 1 RH1&2 
use would be otherwise inappropriate, in which 
case— 
‘‘(i) the 2 Secretaries shall publicly 
disclose the reasons for their determination 
in detail; and 
‘‘(ii) paragraph (3) shall apply. 
‘‘(B) ALLOCATIONS TO LARGE AND SMALL 
LOCAL
EDUCATIONAL
AGENCIES.—(i) For any 
fiscal year in which this paragraph applies, the 
Secretary shall calculate grants under this sec-
tion for each local educational agency. 
‘‘(ii) The amount of a grant under this sec-
tion for each large local educational agency shall 
be the amount determined under clause (i). 
‘‘(iii) For small local educational agencies, 
the State educational agency may either— 
‘‘(I) distribute grants under this sec-
tion in amounts determined by the Sec-
retary under clause (i); or 
‘‘(II) use an alternative method ap-
proved by the Secretary to distribute the 
portion of the State’s total grants under this 
section that is based on those small agen-
cies. 
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•HR 1 RH1&2 
‘‘(iv) An alternative method under clause 
(iii)(II) shall be based on population data that 
the State educational agency determines best re-
flect the current distribution of children in poor 
families among the State’s small local edu-
cational agencies that meet the eligibility criteria 
of subsection (b). 
‘‘(v) If a small local educational agency is 
dissatisfied with the determination of its grant 
by the State educational agency under clause 
(iii)(II), it may appeal that determination to the 
Secretary, who shall respond not later than 45 
days after receipt of such appeal. 
‘‘(vi) As used in this subparagraph— 
‘‘(I) the term ‘large local educational 
agency’ means a local educational agency 
serving an area with a total population of 
20,000 or more; and 
‘‘(II) the term ‘small local educational 
agency’ means a local educational agency 
serving an area with a total population of 
less than 20,000. 
‘‘(3) ALLOCATIONS TO COUNTIES.— 
‘‘(A) CALCULATION.—For any fiscal year to 
which this paragraph applies, the Secretary shall 
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•HR 1 RH1&2 
calculate grants under this section on the basis 
of the number of children counted under section 
1124(c) for counties, and State educational agen-
cies shall suballocate county amounts to local 
educational agencies, in accordance with regula-
tions issued by the Secretary. 
‘‘(B) DIRECT ALLOCATIONS.—In any State 
in which a large number of local educational 
agencies overlap county boundaries, or for which 
the State believes it has data that would better 
target funds than allocating them by county, the 
State educational agency may apply to the Sec-
retary for authority to make the allocations 
under this part for a particular fiscal year di-
rectly to local educational agencies without re-
gard to counties. 
‘‘(C) ASSURANCES.—If the Secretary ap-
proves the State educational agency’s application 
under subparagraph (B), the State educational 
agency shall provide the Secretary an assurance 
that such allocations shall be made— 
‘‘(i) using precisely the same factors 
for determining a grant as are used under 
this part; or 
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•HR 1 RH1&2 
‘‘(ii) using data that the State edu-
cational agency submits to the Secretary for 
approval that more accurately target pov-
erty. 
‘‘(D) APPEAL.—The State educational agen-
cy shall provide the Secretary an assurance that 
it shall establish a procedure through which a 
local educational agency that is dissatisfied with 
its determinations under subparagraph (B) may 
appeal directly to the Secretary for a final deter-
mination. 
‘‘(4) PUERTO RICO.— 
‘‘(A) IN GENERAL.—For each fiscal year, 
the grant which the Commonwealth of Puerto 
Rico shall be eligible to receive under this section 
shall be the amount determined by multiplying 
the number of children counted under subsection 
(c) for the Commonwealth of Puerto Rico by the 
product of— 
‘‘(i) the percentage which the average 
per-pupil expenditure in the Commonwealth 
of Puerto Rico is of the lowest average per- 
pupil expenditure of any of the 50 States; 
and 
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•HR 1 RH1&2 
‘‘(ii) 32 percent of the average per- 
pupil expenditure in the United States. 
‘‘(B) MINIMUM PERCENTAGE.—The percent-
age in subparagraph (A)(i) shall not be less 
than— 
‘‘(i) for fiscal year 2002, 77.5 percent; 
‘‘(ii) for fiscal year 2003, 80.0 percent; 
‘‘(iii) for fiscal year 2004, 82.5 per-
cent; and 
‘‘(iv) for fiscal year 2005 and suc-
ceeding fiscal years, 85.0 percent. 
‘‘(C) LIMITATION.—If the application of 
subparagraph (B) would result in any of the 50 
States or the District of Columbia receiving less 
under this part than it received under this part 
for the preceding fiscal year, the percentage in 
subparagraph (A) shall be the greater of the per-
centage in subparagraph (A)(i) or the percentage 
used for the preceding fiscal year. 
‘‘(5) DEFINITION.—For purposes of this sub-
section, the term ‘State’ does not include Guam, 
American Samoa, the Virgin Islands, and the North-
ern Mariana Islands. 
‘‘(b) MINIMUM NUMBER OF CHILDREN TO QUALIFY.— 
A local educational agency is eligible for a basic grant 
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under this section for any fiscal year only if the number 
of children counted under subsection (c) for that agency is 
both— 
‘‘(1) 10 or more; and 
‘‘(2) more than 2 percent of the total school-age 
population in the agency’s jurisdiction. 
‘‘(c) CHILDREN TO BE COUNTED.— 
‘‘(1) CATEGORIES OF CHILDREN.—The number 
of children to be counted for purposes of this section 
is the aggregate of— 
‘‘(A) the number of children aged 5 to 17, 
inclusive, in the school district of the local edu-
cational agency from families below the poverty 
level as determined under paragraph (2); 
‘‘(B) the number of children (determined 
under paragraph (4) for either the preceding 
year as described in that paragraph, or for the 
second preceding year, as the Secretary finds ap-
propriate) aged 5 to 17, inclusive, in the school 
district of such agency in institutions for ne-
glected and delinquent children (other than such 
institutions operated by the United States), but 
not counted pursuant to subpart 1 of part D for 
the purposes of a grant to a State agency, or 
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•HR 1 RH1&2 
being supported in foster homes with public 
funds; and 
‘‘(C) the number of children aged 5 to 17, 
inclusive, in the school district of such agency 
from families above the poverty level as deter-
mined under paragraph (4). 
‘‘(2) DETERMINATION
OF
NUMBER
OF
CHIL-
DREN.—For the purposes of this section, the Secretary 
shall determine the number of children aged 5 to 17, 
inclusive, from families below the poverty level on the 
basis of the most recent satisfactory data, described in 
paragraph (3), available from the Department of 
Commerce. The District of Columbia and the Com-
monwealth of Puerto Rico shall be treated as indi-
vidual local educational agencies. If a local edu-
cational agency contains 2 or more counties in their 
entirety, then each county will be treated as if such 
county were a separate local educational agency for 
purposes of calculating grants under this part. The 
total of grants for such counties shall be allocated to 
such a local educational agency, which local edu-
cational agency shall distribute to schools in each 
county within such agency a share of the local edu-
cational agency’s total grant that is no less than the 
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•HR 1 RH1&2 
county’s share of the population counts used to cal-
culate the local educational agency’s grant. 
‘‘(3) POPULATION
UPDATES.—In fiscal year 
2001 and every 2 years thereafter, the Secretary shall 
use updated data on the number of children, aged 5 
to 17, inclusive, from families below the poverty level 
for local educational agencies or counties, published 
by the Department of Commerce, unless the Secretary 
and the Secretary of Commerce determine that use of 
the updated population data would be inappropriate 
or unreliable. If the Secretary and the Secretary of 
Commerce determine that some or all of the data re-
ferred to in this paragraph are inappropriate or un-
reliable, they shall publicly disclose their reasons. In 
determining the families which are below the poverty 
level, the Secretary shall utilize the criteria of poverty 
used by the Bureau of the Census in compiling the 
most recent decennial census, in such form as those 
criteria have been updated by increases in the Con-
sumer Price Index for all urban consumers, published 
by the Bureau of Labor Statistics. 
‘‘(4) OTHER CHILDREN TO BE COUNTED.—For 
the purposes of this section, the Secretary shall deter-
mine the number of children aged 5 to 17, inclusive, 
from families above the poverty level on the basis of 
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•HR 1 RH1&2 
the number of such children from families receiving 
an annual income, in excess of the current criteria of 
poverty, from payments under a State program fund-
ed under part A of title IV of the Social Security Act; 
and in making such determinations the Secretary 
shall utilize the criteria of poverty used by the Bu-
reau of the Census in compiling the most recent de-
cennial census for a family of 4 in such form as those 
criteria have been updated by increases in the Con-
sumer Price Index for all urban consumers, published 
by the Bureau of Labor Statistics. The Secretary shall 
determine the number of such children and the num-
ber of children aged 5 through 17 living in institu-
tions for neglected or delinquent children, or being 
supported in foster homes with public funds, on the 
basis of the caseload data for the month of October of 
the preceding fiscal year (using, in the case of chil-
dren described in the preceding sentence, the criteria 
of poverty and the form of such criteria required by 
such sentence which were determined for the calendar 
year preceding such month of October) or, to the ex-
tent that such data are not available to the Secretary 
before January of the calendar year in which the Sec-
retary’s determination is made, then on the basis of 
the most recent reliable data available to the Sec-
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•HR 1 RH1&2 
retary at the time of such determination. The Sec-
retary of Health and Human Services shall collect 
and transmit the information required by this sub-
paragraph to the Secretary not later than January 1 
of each year. For the purpose of this section, the Sec-
retary shall consider all children who are in correc-
tional institutions to be living in institutions for de-
linquent children. 
‘‘(5) ESTIMATE.—When requested by the Sec-
retary, the Secretary of Commerce shall make a spe-
cial updated estimate of the number of children of 
such ages who are from families below the poverty 
level (as determined under subparagraph (A) of this 
paragraph) in each school district, and the Secretary 
is authorized to pay (either in advance or by way of 
reimbursement) the Secretary of Commerce the cost of 
making this special estimate. The Secretary of Com-
merce shall give consideration to any request of the 
chief executive of a State for the collection of addi-
tional census information. 
‘‘(d) STATE MINIMUM.—Notwithstanding section 1122, 
the aggregate amount allotted for all local educational agen-
cies within a State may not be less than the lesser of— 
‘‘(1) 0.25 percent of total grants under this sec-
tion; or 
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‘‘(2) the average of— 
‘‘(A) one-quarter of 1 percent of the total 
amount available for such fiscal year under this 
section; and 
‘‘(B) the number of children in such State 
counted under subsection (c) in the fiscal year 
multiplied by 150 percent of the national aver-
age per-pupil payment made with funds avail-
able under this section for that year. 
‘‘SEC. 1124A. CONCENTRATION GRANTS TO LOCAL EDU-
CATIONAL AGENCIES. 
‘‘(a) ELIGIBILITY FOR AND AMOUNT OF GRANTS.— 
‘‘(1) IN GENERAL.—(A) Except as otherwise pro-
vided in this paragraph, each local educational agen-
cy, in a State other than Guam, American Samoa, 
the Virgin Islands, and the Commonwealth of the 
Northern Mariana Islands, which is eligible for a 
grant under section 1124 for any fiscal year is eligi-
ble for an additional grant under this section for that 
fiscal year if the number of children counted under 
section 1124(c) in the agency exceeds either— 
‘‘(i) 6,500; or 
‘‘(ii) 15 percent of the total number of chil-
dren aged 5 through 17 in the agency. 
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‘‘(B) Notwithstanding section 1122, no State de-
scribed in subparagraph (A) shall receive less than the 
lesser of— 
‘‘(i) 0.25 percent of total grants; or 
‘‘(ii) the average of— 
‘‘(I) one-quarter of 1 percent of the 
sums available to carry out this section for 
such fiscal year; and 
‘‘(II) the greater of— 
‘‘(aa) $340,000; or 
‘‘(bb) the number of children in 
such State counted for purposes of this 
section in that fiscal year multiplied 
by 150 percent of the national average 
per-pupil payment made with funds 
available under this section for that 
year. 
‘‘(2) SPECIAL RULE.—For each county or local 
educational agency eligible to receive an additional 
grant under this section for any fiscal year the Sec-
retary shall determine the product of— 
‘‘(A) the number of children counted under 
section 1124(c) for that fiscal year; and 
‘‘(B) the quotient resulting from the divi-
sion of the amount determined for those agencies 
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•HR 1 RH1&2 
under section 1124(a)(1) for the fiscal year for 
which the determination is being made divided 
by the total number of children counted under 
section 1124(c) for that agency for that fiscal 
year. 
‘‘(3) AMOUNT.—The amount of the additional 
grant for which an eligible local educational agency 
or county is eligible under this section for any fiscal 
year shall be an amount which bears the same ratio 
to the amount available to carry out this section for 
that fiscal year as the product determined under 
paragraph (2) for such local educational agency for 
that fiscal year bears to the sum of such products for 
all local educational agencies in the United States for 
that fiscal year. 
‘‘(4) LOCAL ALLOCATIONS.—(A) Grant amounts 
under this section shall be determined in accordance 
with section 1124(a)(2) and (3). 
‘‘(B) For any fiscal year for which the Secretary 
allocates funds under this section on the basis of coun-
ties, a State may reserve not more than 2 percent of 
its allocation under this section to make grants to 
local educational agencies that meet the criteria of 
paragraph (1)(A)(i) or (ii) and are in ineligible 
counties that do not meet these criteria. 
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‘‘(b) STATES
RECEIVING
MINIMUM
GRANTS.—In 
States that receive the minimum grant under subsection 
(a)(1)(B), the State educational agency shall allocate such 
funds among the local educational agencies in each State 
either— 
‘‘(1) in accordance with paragraphs (2) and (4) 
of subsection (a); or 
‘‘(2) based on their respective concentrations and 
numbers of children counted under section 1124(c), 
except that only those local educational agencies with 
concentrations or numbers of children counted under 
section 1124(c) that exceed the statewide average per-
centage of such children or the statewide average 
number of such children shall receive any funds on 
the basis of this paragraph. 
‘‘SEC. 1125. TARGETED GRANTS TO LOCAL EDUCATIONAL 
AGENCIES. 
‘‘(a) ELIGIBILITY
OF LOCAL EDUCATIONAL AGEN-
CIES.—A local educational agency in a State is eligible to 
receive a targeted grant under this section for any fiscal 
year if the number of children in the local educational agen-
cy counted under subsection 1124(c), before application of 
the weighting factor described in subsection (c), is at least 
10, and if the number of children counted for grants under 
section 1124 is at least 5 percent of the total population 
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•HR 1 RH1&2 
aged 5 to 17 years, inclusive, in the local educational agen-
cy. For each fiscal year for which the Secretary uses county 
population data to calculate grants, funds made available 
as a result of applying this subsection shall be reallocated 
by the State educational agency to other eligible local edu-
cational agencies in the State in proportion to the distribu-
tion of other funds under this section. 
‘‘(b) GRANTS FOR LOCAL EDUCATIONAL AGENCIES, 
THE DISTRICT OF COLUMBIA, AND PUERTO RICO.— 
‘‘(1) IN
GENERAL.—The amount of the grant 
that a local educational agency in a State or that the 
District of Columbia is eligible to receive under this 
section for any fiscal year shall be the product of— 
‘‘(A) the weighted child count determined 
under subsection (c); and 
‘‘(B) 
the 
amount 
in 
paragraph 
1124(a)(1)(B). 
‘‘(2) PUERTO RICO.—For each fiscal year, the 
amount of the grant for which the Commonwealth of 
Puerto Rico is eligible under this section shall be 
equal to the number of children counted under sub-
section (c) for Puerto Rico, multiplied by the amount 
determined in subparagraph 1124(a)(4). 
‘‘(c) WEIGHTED CHILD COUNT.— 
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‘‘(1) WEIGHTS
FOR
ALLOCATIONS
TO
COUN-
TIES.— 
‘‘(A) IN GENERAL.—For each fiscal year for 
which the Secretary uses county population data 
to calculate grants, the weighted child count used 
to determine a county’s allocation under this sec-
tion is the larger of the 2 amounts determined 
under clause (i) or (ii), as follows: 
‘‘(i) BY PERCENTAGE OF CHILDREN.— 
This amount is determined by adding— 
‘‘(I) the number of children deter-
mined under section 1124(c) for that 
county constituting up to 15 percent, 
inclusive, of the county’s total popu-
lation aged 5 to 17, inclusive, multi-
plied by 1.0; 
‘‘(II) the number of such children 
constituting more than 15 percent, but 
not more than 19 percent, of such pop-
ulation, multiplied by 1.75; 
‘‘(III) the number of such children 
constituting more than 19 percent, but 
not more than 24.20 percent, of such 
population, multiplied by 2.5; 
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•HR 1 RH1&2 
‘‘(IV) the number of such children 
constituting more than 24.20 percent, 
but not more than 29.20 percent, of 
such population, multiplied by 3.25; 
and 
‘‘(V) the number of such children 
constituting more than 29.20 percent of 
such population, multiplied by 4.0. 
‘‘(ii) BY NUMBER OF CHILDREN.—This 
amount is determined by adding— 
‘‘(I) the number of children deter-
mined under section 1124(c) consti-
tuting up to 2,311, inclusive, of the 
county’s total population aged 5 to 17, 
inclusive, multiplied by 1.0; 
‘‘(II) the number of such children 
between 2,312 and 7,913, inclusive, in 
such population, multiplied by 1.5; 
‘‘(III) the number of such children 
between 7,914 and 23,917, inclusive, in 
such population, multiplied by 2.0; 
‘‘(IV) the number of such children 
between 23,918 and 93,810, inclusive, 
in such population, multiplied by 2.5; 
and 
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•HR 1 RH1&2 
‘‘(V) the number of such children 
in excess of 93,811 in such population, 
multiplied by 3.0. 
‘‘(B) PUERTO RICO.—Notwithstanding sub-
paragraph (A), the weighted child count for 
Puerto Rico under this paragraph shall not be 
greater than the total number of children counted 
under subsection 1124(c) multiplied by 1.72. 
‘‘(2) WEIGHTS FOR ALLOCATIONS TO LOCAL EDU-
CATIONAL AGENCIES.— 
‘‘(A) IN GENERAL.—For each fiscal year for 
which the Secretary uses local educational agen-
cy data, the weighted child count used to deter-
mine a local educational agency’s grant under 
this section is the larger of the 2 amounts deter-
mined under clauses (i) and (ii), as follows: 
‘‘(i) BY PERCENTAGE OF CHILDREN.— 
This amount is determined by adding— 
‘‘(I) the number of children deter-
mined under section 1124(c) for that 
local educational agency constituting 
up to 15.233 percent, inclusive, of the 
agency’s total population aged 5 to 17, 
inclusive, multiplied by 1.0; 
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•HR 1 RH1&2 
‘‘(II) the number of such children 
constituting more than 15.233 percent, 
but not more than 22.706 percent, of 
such population, multiplied by 1.75; 
‘‘(III) the number of such children 
constituting more than 22.706 percent, 
but not more than 32.213 percent, of 
such population, multiplied by 2.5; 
‘‘(IV) the number of such children 
constituting more than 32.213 percent, 
but not more than 41.452 percent, of 
such population, multiplied by 3.25; 
and 
‘‘(V) the number of such children 
constituting more than 41.452 percent 
of such population, multiplied by 4.0. 
‘‘(ii) BY NUMBER OF CHILDREN.—This 
amount is determined by adding— 
‘‘(I) the number of children deter-
mined under section 1124(c) consti-
tuting up to 710, inclusive, of the 
agency’s total population aged 5 to 17, 
inclusive, multiplied by 1.0; 
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•HR 1 RH1&2 
‘‘(II) the number of such children 
between 711 and 2,384, inclusive, in 
such population, multiplied by 1.5; 
‘‘(III) the number of such children 
between 2,385 and 9,645, inclusive, in 
such population, multiplied by 2.0; 
‘‘(IV) the number of such children 
between 9,646 and 54,600, inclusive, in 
such population, multiplied by 2.5; 
and 
‘‘(V) the number of such children 
in excess of 54,601 in such population, 
multiplied by 3.0. 
‘‘(B) PUERTO RICO.—Notwithstanding sub-
paragraph (A), the weighted child count for 
Puerto Rico under this paragraph shall not be 
greater than the total number of children counted 
under section 1124(c) multiplied by 1.72. 
‘‘(d) CALCULATION
OF GRANT AMOUNTS.—Grants 
under this section shall be calculated in accordance with 
section 1124(a)(2) and (3). 
‘‘(e) STATE MINIMUM.—Notwithstanding any other 
provision of this section or section 1122, from the total 
amount available for any fiscal year to carry out this sec-
tion, each State shall be allotted at least the lesser of— 
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•HR 1 RH1&2 
‘‘(1) 0.25 percent of total appropriations; or 
‘‘(2) the average of— 
‘‘(A) one-quarter of 1 percent of the total 
amount available to carry out this section; and 
‘‘(B) 150 percent of the national average 
grant under this section per child described in 
section 1124(c), without application of a 
weighting factor, multiplied by the State’s total 
number of children described in section 1124(c), 
without application of a weighting factor. 
‘‘SEC. 1126. SPECIAL ALLOCATION PROCEDURES. 
‘‘(a) ALLOCATIONS FOR NEGLECTED CHILDREN.— 
‘‘(1) IN GENERAL.—If a State educational agen-
cy determines that a local educational agency in the 
State is unable or unwilling to provide for the special 
educational needs of children who are living in insti-
tutions for neglected children as described in subpara-
graph (B) of section 1124(c)(1), the State educational 
agency shall, if such agency assumes responsibility for 
the special educational needs of such children, receive 
the portion of such local educational agency’s alloca-
tion under sections 1124, 1124A, and 1125 that is at-
tributable to such children. 
‘‘(2) SPECIAL RULE.—If the State educational 
agency does not assume such responsibility, any other 
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•HR 1 RH1&2 
State or local public agency that does assume such re-
sponsibility shall receive that portion of the local edu-
cational agency’s allocation. 
‘‘(b) ALLOCATIONS
AMONG
LOCAL
EDUCATIONAL 
AGENCIES.—The State educational agency may allocate the 
amounts of grants under sections 1124, 1124A, and 1125 
among the affected local educational agencies— 
‘‘(1) if 2 or more local educational agencies 
serve, in whole or in part, the same geographical 
area; 
‘‘(2) if a local educational agency provides free 
public education for children who reside in the school 
district of another local educational agency; or 
‘‘(3) to reflect the merger, creation, or change of 
boundaries of 1 or more local educational agencies. 
‘‘(c) REALLOCATION.—If a State educational agency 
determines that the amount of a grant a local educational 
agency would receive under sections 1124, 1124A, and 1125 
is more than such local agency will use, the State edu-
cational agency shall make the excess amount available to 
other local educational agencies in the State that need addi-
tional funds in accordance with criteria established by the 
State educational agency. 
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•HR 1 RH1&2 
‘‘SEC. 1127. CARRYOVER AND WAIVER. 
‘‘(a) LIMITATION ON CARRYOVER.—Notwithstanding 
section 421 of the General Education Provisions Act or any 
other provision of law, not more than 15 percent of the 
funds allocated to a local educational agency for any fiscal 
year under this subpart (but not including funds received 
through any reallocation under this subpart) may remain 
available for obligation by such agency for 1 additional fis-
cal year. 
‘‘(b) WAIVER.—A State educational agency may, once 
every 3 years, waive the percentage limitation in subsection 
(a) if— 
‘‘(1) the agency determines that the request of a 
local educational agency is reasonable and necessary; 
or 
‘‘(2) supplemental appropriations for this sub-
part become available. 
‘‘(c) EXCLUSION.—The percentage limitation under 
subsection (a) shall not apply to any local educational 
agency that receives less than $50,000 under this subpart 
for any fiscal year. 
‘‘SEC. 1128. SECULAR, NEUTRAL, AND NONIDEOLOGICAL. 
‘‘Any school that receives funds under this part shall 
ensure that educational services or other benefits provided 
under this part, including materials and equipment, shall 
be secular, neutral, and nonideological.’’. 
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PART B—STUDENT READING SKILLS 
IMPROVEMENT GRANTS 
SEC. 111. READING FIRST; EARLY READING FIRST. 
Part B of title I (20 U.S.C. 6361 et seq.) is amended— 
(1) by striking the part heading and inserting 
the following: 
‘‘PART B—STUDENT READING SKILLS 
IMPROVEMENT GRANTS’’; 
(2) by redesignating sections 1201 through 1212 
as sections 1231 through 1242, respectively; and 
(3) by inserting after the part heading the fol-
lowing: 
‘‘Subpart 1—Reading First 
‘‘SEC. 1201. FINDINGS. 
‘‘The Congress finds as follows: 
‘‘(1) The 2000 National Assessment of Edu-
cational Progress found that 68 percent of fourth 
grade students in the United States are reading below 
the proficient level. 
‘‘(2) According to the 2000 National Assessment 
of Educational Progress report on reading, 63 percent 
of African Americans, 58 percent of Hispanic Ameri-
cans, 60 percent of children living in poverty, and 47 
percent of children in urban schools scored ‘below 
basic’ in reading. 
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•HR 1 RH1&2 
‘‘(3) More than 1⁄2 of the students placed in spe-
cial education classes are identified as learning dis-
abled and, for as many as 80 percent of the students 
so identified, reading is the primary difficulty. 
‘‘(4) It is estimated that, at a minimum, 
10,000,000 children have difficulty learning to read. 
10 to 15 percent of those children eventually drop out 
of high school, and only 2 percent complete a 4-year 
program at an institution of higher education. 
‘‘(5) It is estimated that the number of children 
who are typically identified as poor readers can be 
significantly reduced through the implementation of 
early identification and prevention programs that are 
based on scientifically based reading research. 
‘‘(6) The report issued by the National Reading 
Panel in 2000 found that the course of reading in-
struction that obtains maximum benefits for students 
includes explicit and systematic instruction in pho-
nemic awareness, phonics, vocabulary development, 
reading fluency, and reading comprehension strate-
gies. 
‘‘SEC. 1202. PURPOSES. 
‘‘The purposes of this subpart are as follows: 
‘‘(1) To provide assistance to States and local 
educational agencies in establishing reading programs 
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•HR 1 RH1&2 
for students in grades kindergarten through 3 that are 
based on scientifically based reading research, in 
order to ensure that every student can read at grade 
level or above not later than the end of the third 
grade. 
‘‘(2) To provide assistance to States and local 
educational agencies in preparing teachers, including 
special education teachers, through professional devel-
opment and other support, so the teachers can iden-
tify specific reading barriers facing their students 
and so the teachers have the tools to effectively help 
their students learn to read. 
‘‘(3) To provide assistance to States and local 
educational agencies in selecting and administering 
rigorous diagnostic reading and screening assessment 
tools that are valid and reliable, document the effec-
tiveness of this subpart in improving the reading 
skills of students, and improve classroom instruction. 
‘‘(4) To provide assistance to States and local 
educational agencies in selecting or developing effec-
tive classroom instructional materials, programs, and 
strategies to implement scientific research-based meth-
ods that have been proven to prevent or remediate 
reading failure. 
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‘‘(5) To strengthen coordination among schools 
and early literacy programs in order to improve 
reading achievement for all children. 
‘‘SEC. 1203. FORMULA GRANTS TO STATES. 
‘‘(a) IN GENERAL.— 
‘‘(1) AUTHORIZATION TO MAKE GRANTS.—In the 
case of each State that in accordance with section 
1204 submits to the Secretary an application for a 5- 
year period, the Secretary, subject to the application’s 
approval, shall make a grant to the State for the uses 
specified in subsections (c) and (d). For each fiscal 
year, the funds provided under the grant shall equal 
the allotment determined for the State under sub-
section (b). 
‘‘(2) DURATION OF GRANTS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a grant under this section shall be 
awarded for a period of not more than 5 years. 
‘‘(B) INTERIM REVIEW.— 
‘‘(i) PROGRESS REPORT.— 
‘‘(I) SUBMISSION.—Not later than 
60 days after the termination of the 
third year of the grant period, each 
State receiving a grant under this sec-
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tion shall submit a progress report to 
the Secretary. 
‘‘(II) INFORMATION INCLUDED.— 
The progress report shall include infor-
mation on the progress the State, and 
local educational agencies within the 
State, are making in reducing the 
number of students served under this 
subpart in the first and second grades 
who are reading below grade level, as 
demonstrated by such information as 
teacher reports and school evaluations 
of mastery of the essential components 
of reading instruction. The report shall 
also include evidence from the State 
and its local educational agencies that 
they have significantly increased the 
number of students reading at grade 
level or above, significantly increased 
the percentages of students in ethnic, 
racial, and low-income populations 
who are reading at grade level or 
above, and successfully implemented 
this subpart. 
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•HR 1 RH1&2 
‘‘(ii) PEER REVIEW.—The progress re-
port described in clause (i) shall be reviewed 
by the peer review panel convened under 
section 1204(c)(2). 
‘‘(iii) CONSEQUENCES
OF
INSUFFI-
CIENT PROGRESS.—After the submission of 
the progress report described in clause (i), if 
the Secretary determines that the State is 
not making significant progress in meeting 
the purposes of this subpart, the Secretary 
may withhold from the State, in whole or in 
part, further payments under this section in 
accordance with section 455 of the General 
Education 
Provisions 
Act 
(20 
U.S.C. 
1234d) or take such other action authorized 
by law as the Secretary deems necessary, 
including providing technical assistance 
upon request of the State. 
‘‘(b) DETERMINATION OF AMOUNT OF ALLOTMENTS.— 
‘‘(1) RESERVATIONS
FROM
APPROPRIATIONS.— 
From the total amount made available under section 
1002(b)(1) to carry out this subpart for a fiscal year, 
the Secretary— 
‘‘(A) shall reserve 1⁄2 of 1 percent for allot-
ments for the Virgin Islands, Guam, American 
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•HR 1 RH1&2 
Samoa, and the Commonwealth of the Northern 
Mariana Islands, to be distributed among these 
outlying areas on the basis of their relative need, 
as determined by the Secretary in accordance 
with the purposes of this subpart; 
‘‘(B) shall reserve 1⁄2 of 1 percent for the 
Secretary of the Interior for programs under this 
subpart in schools operated or funded by the Bu-
reau of Indian Affairs; 
‘‘(C) shall reserve not more than 3 percent 
or $30,000,000, whichever is less, to carry out 
section 1206; 
‘‘(D) may reserve not more than 1 percent 
to carry out section 1207; and 
‘‘(E) shall reserve $5,000,000 to carry out 
section 1208. 
‘‘(2) STATE
ALLOTMENTS.—From the total 
amount made available under section 1002(b)(1) to 
carry out this subpart for a fiscal year and not re-
served under paragraph (1), the Secretary shall allot 
80 percent under this section among each of the 50 
States, the District of Columbia, and the Common-
wealth of Puerto Rico. 
‘‘(3) DETERMINATION
OF
STATE
ALLOTMENT 
AMOUNTS.— 
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•HR 1 RH1&2 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary shall allot the amount 
made available under paragraph (2) for a fiscal 
year among the States described in such para-
graph in proportion to the number of children, 
aged 5 to 17, who reside within the State from 
families with incomes below the poverty line (as 
defined by the Office of Management and Budget 
and revised annually in accordance with section 
673(2) of the Community Services Block Grant 
Act (42 U.S.C. 9902(2)) applicable to a family 
of the size involved for the most recent fiscal year 
for which satisfactory data are available, com-
pared to the number of such individuals who re-
side in all such States for that fiscal year. 
‘‘(B) EXCEPTIONS.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), no State receiving an allotment under 
subparagraph (A) may receive less than 1⁄4 
of 1 percent of the total amount allotted 
under such subparagraph. 
‘‘(ii) PUERTO RICO.—The percentage of 
the amount allotted under subparagraph 
(A) that is allotted to the Commonwealth of 
Puerto Rico for a fiscal year may not ex-
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•HR 1 RH1&2 
ceed the percentage that was received by the 
Commonwealth of Puerto Rico of the funds 
allocated to all States under subpart 2 of 
part A for the preceding fiscal year. 
‘‘(4) REALLOTMENT.—If a State described in 
paragraph (2) does not apply for an allotment under 
this section for any fiscal year, or if the State’s appli-
cation is not approved, the Secretary shall reallot 
such amount to the remaining States in accordance 
with paragraph (3). 
‘‘(c) SUBGRANTS
TO LOCAL EDUCATIONAL AGEN-
CIES.— 
‘‘(1) DISTRIBUTION OF SUBGRANTS.—The Sec-
retary may make a grant to a State under this sec-
tion only if the State agrees to expend at least 80 per-
cent of the amount of the funds provided under the 
grant for the purpose of making, in accordance with 
this subsection, competitive subgrants to local edu-
cational agencies. 
‘‘(2) NOTICE.—A State receiving a grant under 
this section shall provide notice to all local edu-
cational agencies in the State of the availability of 
competitive subgrants under this subsection and of the 
requirements for applying for the subgrants. 
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•HR 1 RH1&2 
‘‘(3) LOCAL APPLICATIONS.—To be eligible to re-
ceive a subgrant under this subsection, a local edu-
cational agency shall submit an application to the 
State at such time, in such manner, and containing 
such information as the State may reasonably re-
quire. 
‘‘(4) LIMITATION
TO
CERTAIN
LOCAL
AGEN-
CIES.—A State receiving a grant under this section 
may award subgrants under this subsection only to 
local educational agencies— 
‘‘(A) that have the highest percentages of 
students in grades kindergarten through 3 read-
ing below grade level; and 
‘‘(B) that— 
‘‘(i) have jurisdiction over— 
‘‘(I) a geographic area that in-
cludes an area designated as an em-
powerment zone, or an enterprise com-
munity, under part I of subchapter U 
of chapter 1 of the Internal Revenue 
Code of 1986; or 
‘‘(II) a significant number of 
schools that are identified for school 
improvement under section 1116(b); or 
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•HR 1 RH1&2 
‘‘(ii) are located in areas having the 
greatest numbers or percentages of children 
aged 5 through 17 from low-income fami-
lies. 
‘‘(5) STATE
REQUIREMENT.—In distributing 
subgrant funds to local educational agencies under 
this subsection, a State shall provide funds in suffi-
cient size and scope to enable local educational agen-
cies to improve reading instruction, as determined by 
rigorous diagnostic reading and screening assessment 
tools. 
‘‘(6) LIMITATION TO CERTAIN SCHOOLS.—In dis-
tributing subgrant funds under this subsection, a 
local educational agency may provide funds only to 
schools— 
‘‘(A) that have the highest percentages of 
students in grades kindergarten through 3 read-
ing below grade level; and 
‘‘(B) that— 
‘‘(i) are identified for school improve-
ment under section 1116(b); or 
‘‘(ii) have the greatest numbers or per-
centages of children aged 5 through 17 from 
low-income families. 
‘‘(7) LOCAL USES OF FUNDS.— 
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•HR 1 RH1&2 
‘‘(A) REQUIRED
USES.—Subject to para-
graph (8), a local educational agency that re-
ceives a subgrant under this subsection shall use 
the funds provided under the subgrant to carry 
out the following activities: 
‘‘(i) Selecting and administering rig-
orous diagnostic reading and screening as-
sessment tools. 
‘‘(ii) Selecting and implementing a 
program or programs of classroom reading 
instruction based on scientifically based 
reading research that— 
‘‘(I) includes the essential compo-
nents of reading instruction; and 
‘‘(II) provides such instruction to 
all children, including children who— 
‘‘(aa) may have reading dif-
ficulties; 
‘‘(bb) are at risk of being re-
ferred to special education based 
on these difficulties; 
‘‘(cc) have been evaluated 
under section 614 of the Individ-
uals with Disabilities Education 
Act but, in accordance with sec-
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208 
•HR 1 RH1&2 
tion 614(b)(5) of such Act, have 
not been identified as being a 
child with a disability (as defined 
in section 602 of such Act); 
‘‘(dd) are being served under 
such Act primarily due to being 
identified as being a child with a 
specific learning disability (as de-
fined in section 602 of such Act) 
related to reading; 
‘‘(ee) are deficient in their 
phonemic 
awareness, 
phonics 
skills, 
vocabulary 
development, 
oral reading fluency, or com-
prehension strategies; or 
‘‘(ff) are identified as having 
limited English proficiency. 
‘‘(iii) Procuring classroom instruc-
tional materials based on scientifically 
based reading research. 
‘‘(iv) Providing professional develop-
ment for teachers of grades kindergarten 
through 3, and special education teachers of 
grades kindergarten through 12, that— 
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•HR 1 RH1&2 
‘‘(I) will prepare these teachers in 
all of the essential components of read-
ing instruction; 
‘‘(II) shall include— 
‘‘(aa) information, instruc-
tional materials, programs, strate-
gies, and approaches based on sci-
entifically based reading research, 
including early intervention and 
classroom reading materials and 
remedial 
programs 
and 
ap-
proaches; and 
‘‘(bb) instruction in the use 
of rigorous diagnostic reading and 
screening assessment tools and 
other procedures that effectively 
identify students who may be at 
risk for reading failure or who are 
having difficulty reading; 
‘‘(III) shall be provided by eligible 
professional 
development 
providers; 
and 
‘‘(IV) will assist teachers in be-
coming fully qualified in accordance 
with the requirements of section 1119. 
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•HR 1 RH1&2 
‘‘(B) OPTIONAL
USES.—Subject to para-
graph (8), a local educational agency that re-
ceives a subgrant under this subsection may use 
the funds provided under the subgrant to carry 
out the following activities: 
‘‘(i) Providing training to parents and 
other individuals who volunteer to be read-
ing tutors in the essential components of 
reading instruction. 
‘‘(ii) Providing family literacy serv-
ices, especially to parents enrolled in par-
ticipating schools, through the use of library 
materials and reading programs, strategies, 
and approaches that are based on scientif-
ically based reading research, to encourage 
reading and support their children’s read-
ing development. 
‘‘(8) LOCAL PLANNING AND ADMINISTRATION.—A 
local educational agency that receives a subgrant 
under this subsection may use not more than 2 per-
cent of the funds provided under the subgrant for 
planning and administration. 
‘‘(d) OTHER STATE USES OF FUNDS.— 
‘‘(1) PROFESSIONAL DEVELOPMENT.— 
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•HR 1 RH1&2 
‘‘(A) IN GENERAL.—A State that receives a 
grant under this section may expend not more 
than 15 percent of the amount of the funds pro-
vided under the grant— 
‘‘(i) to develop and implement a pro-
gram of in-service professional development 
for teachers of kindergarten through third 
grade, and special education teachers of 
grades kindergarten through 12, that— 
‘‘(I) will prepare these teachers in 
all of the essential components of read-
ing instruction; 
‘‘(II) shall include— 
‘‘(aa) information on inter-
ventions, instructional materials, 
programs, and approaches based 
on scientifically based reading re-
search, including early interven-
tion and reading remediation ma-
terials, programs, and approaches; 
and 
‘‘(bb) instruction in the use 
of rigorous diagnostic reading and 
screening assessment tools and 
other procedures to improve in-
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212 
•HR 1 RH1&2 
struction and effectively identify 
students who may be at risk for 
reading failure or who are having 
difficulty reading; and 
‘‘(III) shall be provided by eligible 
professional development providers; 
‘‘(ii) to strengthen and enhance profes-
sional development courses for students pre-
paring, at all public institutions of higher 
education in the State, to teach kinder-
garten through third grades by— 
‘‘(I) reviewing such courses to de-
termine whether their content is con-
sistent with the findings of the most 
current scientifically based reading re-
search, including findings on the essen-
tial components of reading instruction; 
‘‘(II) following up such reviews 
with recommendations to ensure that 
such institutions offer courses that 
meet the highest standards; and 
‘‘(III) preparing a report on the 
results of such reviews, submitting it to 
the reading and literacy partnership 
for the State established under section 
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213 
•HR 1 RH1&2 
1204(d), and making it available for 
public review via the Internet; and 
‘‘(iii) to make recommendations on 
how the State’s licensure and certification 
standards in the area of reading might be 
improved. 
‘‘(B) FUNDS NOT USED FOR PROFESSIONAL 
DEVELOPMENT.—Any portion of the funds de-
scribed in subparagraph (A) that a State does 
not expend in accordance with such subpara-
graph shall be expended for the purpose of mak-
ing subgrants in accordance with subsection (c). 
‘‘(2) OTHER STATE-LEVEL ACTIVITIES.—A State 
that receives a grant under this section may expend 
not more than 3 percent of the amount of the funds 
provided under the grant for one or more of the fol-
lowing authorized State activities: 
‘‘(A) Assisting local educational agencies in 
accomplishing the tasks required to design and 
implement a classroom reading program under 
this subpart, including— 
‘‘(i) selecting and implementing a pro-
gram or programs of classroom reading in-
struction based on scientifically based read-
ing research; 
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•HR 1 RH1&2 
‘‘(ii) selecting rigorous diagnostic read-
ing and screening assessment tools; and 
‘‘(iii) identifying eligible professional 
development providers to help prepare read-
ing teachers to teach students using the pro-
grams and assessments described in clauses 
(i) and (ii); 
‘‘(B) Providing to students in kindergarten 
through third grades, through appropriate pro-
viders, reading instruction that includes— 
‘‘(i) rigorous diagnostic reading and 
screening assessment tools; and 
‘‘(ii) as need is indicated by such as-
sessments, instruction based on scientifically 
based reading research that includes the es-
sential components of reading instruction. 
‘‘(3) PLANNING, ADMINISTRATION, AND REPORT-
ING.— 
‘‘(A) IN GENERAL.—A State that receives a 
grant under this section shall expend not more 
than 2 percent of the amount of the funds pro-
vided under the grant for the activities described 
in this paragraph. 
‘‘(B) PLANNING AND ADMINISTRATION.—A 
State that receives a grant under this section 
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•HR 1 RH1&2 
may expend funds described in subparagraph 
(A) for— 
‘‘(i) planning and administration re-
lating to the State uses of funds authorized 
under this subpart, including administering 
the distribution of competitive subgrants to 
local educational agencies under this section 
and section 1205; and 
‘‘(ii) assessing and evaluating, on a 
regular basis, local educational agency ac-
tivities assisted under this subpart, with re-
spect to whether they have been effective in 
increasing the number of children in first 
and second grades served under this subpart 
who can read at or above grade level. 
‘‘(C) ANNUAL REPORTING.— 
‘‘(i) IN
GENERAL.—A State that re-
ceives a grant under this section shall ex-
pend funds provided under the grant to pro-
vide the Secretary annually with a report 
on the implementation of this subpart. The 
report shall include evidence that the State 
is fulfilling its obligations under this sub-
part. The report shall include a specific 
identification of those schools and local edu-
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•HR 1 RH1&2 
cational agencies that report the largest 
gains in reading achievement. 
‘‘(ii) PRIVACY PROTECTION.—Data in 
the report shall be set forth in a manner 
that protects the privacy of individuals. 
‘‘(iii) CONTRACT.—To the extent prac-
ticable, a State shall enter into a contract 
with an entity that conducts scientifically 
based reading research, under which con-
tract the entity will produce the reports re-
quired to be submitted under this subpara-
graph. 
‘‘SEC. 1204. STATE FORMULA GRANT APPLICATIONS. 
‘‘(a) IN GENERAL.—A State that desires to receive a 
grant under section 1203 shall submit an application to 
the Secretary at such time and in such form as the Sec-
retary may require. The application shall contain the infor-
mation described in subsection (b). 
‘‘(b) CONTENTS.—An application under this section 
shall contain the following: 
‘‘(1) An assurance that the Governor of the 
State, in consultation with the State educational 
agency, has established a reading and literacy part-
nership described in subsection (d), and a description 
of how such partnership— 
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•HR 1 RH1&2 
‘‘(A) coordinated the development of the ap-
plication; and 
‘‘(B) will assist in the oversight and evalua-
tion of the State’s activities under this subpart. 
‘‘(2) An assurance that the State will submit to 
the Secretary, at such time and in such manner as 
the Secretary may reasonably require, a State plan 
containing a description of a process— 
‘‘(A) to evaluate programs carried out by 
local educational agencies under this subpart; 
‘‘(B) to assist local educational agencies in 
identifying rigorous diagnostic reading and 
screening assessment tools; and 
‘‘(C) to assist local educational agencies in 
identifying interventions, and instructional ma-
terials, programs and approaches, based on sci-
entifically based reading research, including 
early intervention and classroom reading mate-
rials and remedial programs and approaches. 
‘‘(3) An assurance that the State, and local edu-
cational agencies in the State, will participate in all 
national evaluations under this subpart. 
‘‘(c) APPROVAL OF APPLICATIONS.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the peer review panel convened under para-
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•HR 1 RH1&2 
graph (2), shall approve an application of a State 
under this section if such application meets the re-
quirements of this section. 
‘‘(2) PEER REVIEW.— 
‘‘(A) IN GENERAL.—The Secretary, in con-
sultation with the National Institute for Lit-
eracy, shall convene a panel to evaluate applica-
tions under this section. At a minimum, the 
panel shall include— 
‘‘(i) 3 individuals selected by the Sec-
retary; 
‘‘(ii) 3 individuals selected by the Na-
tional Institute for Literacy; 
‘‘(iii) 3 individuals selected by the Na-
tional Research Council of the National 
Academy of Sciences; and 
‘‘(iv) 3 individuals selected by the Na-
tional Institute of Child Health and 
Human Development. 
‘‘(B) EXPERTS.—The panel shall include 
experts who are competent, by virtue of their 
training, expertise, or experience, to evaluate ap-
plications under this section, and experts who 
provide professional development to teachers of 
reading to children and adults, and experts who 
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•HR 1 RH1&2 
provide professional development to other in-
structional staff, based on scientifically based 
reading research. 
‘‘(C) RECOMMENDATIONS.—The panel shall 
recommend grant applications from States under 
this section to the Secretary for funding or for 
disapproval. 
‘‘(d) READING AND LITERACY PARTNERSHIPS.— 
‘‘(1) IN GENERAL.—In order for a State to re-
ceive a grant under section 1203, the Governor of the 
State, in consultation with the State educational 
agency, shall establish a reading and literacy part-
nership. 
‘‘(2) REQUIRED
PARTICIPANTS.—The reading 
and literacy partnership shall include the following 
participants: 
‘‘(A) The Governor of the State. 
‘‘(B) The chief State school officer. 
‘‘(C) The chairman and the ranking mem-
ber of each committee of the State legislature 
that is responsible for education policy. 
‘‘(D) A representative, selected jointly by the 
Governor and the chief State school officer, of at 
least one local educational agency that is eligible 
to receive a subgrant under section 1203. 
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•HR 1 RH1&2 
‘‘(E) A representative, selected jointly by the 
Governor and the chief State school officer, of a 
community-based organization working with 
children to improve their reading skills, particu-
larly a community-based organization using tu-
tors and scientifically based reading research. 
‘‘(F) State directors of appropriate Federal 
or State programs with a strong reading compo-
nent. 
‘‘(G) A parent of a public or private school 
student or a parent who educates their child or 
children in their home, selected jointly by the 
Governor and the chief State school officer. 
‘‘(H) A teacher, who may be a special edu-
cation teacher, who successfully teaches reading 
and an instructional staff member, selected joint-
ly by the Governor and the chief State school of-
ficer. 
‘‘(I) A family literacy service provider se-
lected jointly by the Governor and the chief state 
school officer. 
‘‘(3) OPTIONAL PARTICIPANTS.—The reading and 
literacy partnership may include additional partici-
pants, who shall be selected jointly by the Governor 
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•HR 1 RH1&2 
and the chief State school officer, and who may in-
clude a representative of— 
‘‘(A) an institution of higher education op-
erating a program of teacher preparation based 
on scientifically based reading research in the 
State; 
‘‘(B) a local educational agency; 
‘‘(C) a private nonprofit or for-profit eligi-
ble professional development provider providing 
instruction based on scientifically based reading 
research; 
‘‘(D) an adult education provider; 
‘‘(E) a volunteer organization that is in-
volved in reading programs; or 
‘‘(F) a school library or a public library 
that offers reading or literacy programs for chil-
dren or families. 
‘‘SEC. 1205. DISCRETIONARY GRANTS TO STATES. 
‘‘(a) IN GENERAL.—In the case of a State that, in ac-
cordance with sections 1203 and 1204, has received ap-
proval of an application for a 5-year formula grant, the 
Secretary may make additional 2-year discretionary grants 
to the State for the use specified in (d). For each fiscal year, 
the funds provided under the discretionary grant shall equal 
the allotment determined for the State under subsection (b). 
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•HR 1 RH1&2 
‘‘(b) DETERMINATION OF AMOUNT OF ALLOTMENTS.— 
From the total amount made available under section 
1002(b)(1) to carry out this subpart for a fiscal year and 
not reserved under paragraph (1), the Secretary, upon the 
recommendation of the peer review panel convened under 
section 1204(c)(2), shall allot 20 percent under this section 
among the States described in subsection (a)— 
‘‘(1) for fiscal years 2002 and 2003, based upon 
a determination of such States’ relative likelihood of 
effectively implementing a program under this sub-
part; and 
‘‘(2) for fiscal year 2004 and subsequent fiscal 
years, based upon such States’ applications under 
subsection (c). 
‘‘(c) STATE DISCRETIONARY GRANT APPLICATIONS.— 
‘‘(1) IN GENERAL.—A State that desires to re-
ceive a grant under this section for a grant period 
that includes any fiscal year after fiscal year 2003 
shall submit the information described in paragraph 
(3) to the Secretary at such time and in such form 
as the Secretary may require. 
‘‘(2) PEER REVIEW.—The peer review panel con-
vened under section 1204(c)(2) shall review the infor-
mation submitted under this subsection. The panel 
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•HR 1 RH1&2 
shall recommend such applications to the Secretary 
for funding or for disapproval. 
‘‘(3) INFORMATION.—The information described 
in this paragraph is the following: 
‘‘(A) An assurance that the State will 
award competitive subgrants to local educational 
agencies consistent with subsection (d)(4). 
‘‘(B) An assurance that the State will en-
sure that local educational agencies that receive 
a subgrant under subsection (d) use the funds 
provided under the subgrant in accordance with 
subsection (d)(5). 
‘‘(C) Evidence that the State has increased 
significantly the percentage of students reading 
at grade level or above. 
‘‘(D) Evidence that the State has been suc-
cessful in increasing the percentage of students 
in ethnic, racial, and low-income populations 
who are reading at grade level or above. 
‘‘(E) Any additional evidence that dem-
onstrates success in the implementation of this 
subpart. 
‘‘(d) SUBGRANTS
TO LOCAL EDUCATIONAL AGEN-
CIES.— 
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•HR 1 RH1&2 
‘‘(1) IN GENERAL.—The Secretary may make a 
grant to a State under this section only if the State 
agrees to expend 100 percent of the amount of the 
funds provided under the grant for the purpose of 
making competitive subgrants in accordance with this 
subsection to local educational agencies. 
‘‘(2) NOTICE.—A State receiving a grant under 
this section shall provide notice to all local edu-
cational agencies in the State of the availability of 
competitive subgrants under this subsection and of the 
requirements for applying for the subgrants. 
‘‘(3) APPLICATION.—To be eligible to receive a 
subgrant under this subsection, a local educational 
agency shall submit an application to the State at 
such time, in such manner, and containing such in-
formation as the State may reasonably require. 
‘‘(4) DISTRIBUTION.— 
‘‘(A) IN GENERAL.—A State shall distribute 
subgrants under this section through a competi-
tive process based on relative need and the evi-
dence described in this paragraph. 
‘‘(B) EVIDENCE USED IN ALL YEARS.—For 
all fiscal years, a State shall distribute subgrants 
under this section based on evidence that a local 
educational agency— 
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•HR 1 RH1&2 
‘‘(i) satisfies the requirements of sec-
tion 1203(c)(4); 
‘‘(ii) will carry out its obligations 
under this subpart, particularly paragraph 
(5); and 
‘‘(iii) will work with other local edu-
cational agencies in the State that have not 
received a subgrant under this subsection to 
assist such non-receiving agencies in in-
creasing the reading achievement of stu-
dents. 
‘‘(C) EVIDENCE
USED
IN
FISCAL
YEARS 
AFTER 2003.—For fiscal year 2004 and subse-
quent fiscal years, a State shall distribute sub-
grants under this section based on the evidence 
described in subparagraph (B) and, in addition, 
evidence that a local educational agency— 
‘‘(i) has significantly increased the 
percentage of all students reading at grade 
level or above; 
‘‘(ii) has significantly increased the 
percentage of students in ethnic, racial, and 
low-income populations who are reading at 
grade level or above; and 
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•HR 1 RH1&2 
‘‘(iii) has demonstrated success in the 
implementation of this subpart. 
‘‘(5) LOCAL
USES
OF
FUNDS.—A local edu-
cational agency that receives a subgrant under this 
subsection— 
‘‘(A) shall use the funds provided under the 
subgrant to carry out the activities described in 
section 1203(c)(7)(A); and 
‘‘(B) may use such funds to carry out the 
activities described in section 1203(c)(7)(B). 
‘‘(e) DEFINITION.—For purposes of this section, the 
term ‘State’ means each of the 50 States, the District of 
Columbia, and the Commonwealth of Puerto Rico. 
‘‘SEC. 1206. EXTERNAL EVALUATION. 
‘‘(a) IN GENERAL.—From funds reserved under section 
1203(b)(1)(C), the Secretary shall contract with an inde-
pendent outside organization for a 5-year, rigorous, sci-
entifically valid, quantitative evaluation of this subpart. 
‘‘(b) PROCESS.—Such evaluation shall be conducted by 
an organization outside of the Department that is capable 
of designing and carrying out an independent evaluation 
that identifies the effects of specific activities carried out 
by States and local educational agencies under this subpart 
on improving reading instruction. Such evaluation shall 
use only data relating to students served under this subpart 
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•HR 1 RH1&2 
and shall take into account factors influencing student per-
formance that are not controlled by teachers or education 
administrators. 
‘‘(c) ANALYSIS.—Such evaluation shall include the fol-
lowing: 
‘‘(1) An analysis of the relationship between each 
of the essential components of reading instruction and 
overall reading proficiency. 
‘‘(2) An analysis of whether assessment tools 
used by States and local educational agencies measure 
the essential components of reading instruction. 
‘‘(3) An analysis of how State reading standards 
correlate with the essential components of reading in-
struction. 
‘‘(4) An analysis of whether the receipt of a dis-
cretionary grant under section 1205 results in an in-
crease in the number of children who read pro-
ficiently. 
‘‘(5) A measurement of the extent to which spe-
cific instructional materials improve reading pro-
ficiency. 
‘‘(6) A measurement of the extent to which spe-
cific rigorous diagnostic reading and screening assess-
ment tools assist teachers in identifying specific read-
ing deficiencies. 
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•HR 1 RH1&2 
‘‘(7) A measurement of the extent to which pro-
fessional development programs implemented by 
States using funds received under this subpart im-
prove reading instruction. 
‘‘(8) A measurement of how well students pre-
paring to enter the teaching profession are prepared 
to teach the essential components of reading instruc-
tion. 
‘‘(9) An analysis of changes in students’ interest 
in reading and time spent reading outside of school. 
‘‘(10) Any other analysis or measurement perti-
nent to this subpart that is determined to be appro-
priate by the Secretary. 
‘‘(d) PROGRAM IMPROVEMENT.—The findings of the 
evaluation conducted under this section shall be provided 
to States and local educational agencies on a periodic basis 
for use in program improvement. 
‘‘SEC. 1207. NATIONAL ACTIVITIES. 
‘‘From funds reserved under section 1203(b)(1)(D), the 
Secretary may provide technical assistance in achieving the 
purposes of this subpart to States, local educational agen-
cies, and schools requesting such assistance. 
‘‘SEC. 1208. INFORMATION DISSEMINATION. 
‘‘(a) IN GENERAL.—From funds reserved under section 
1203(b)(1)(E), the National Institute for Literacy, in col-
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•HR 1 RH1&2 
laboration with the Secretary of Education, the Secretary 
of Health and Human Services, and the Director of the Na-
tional Institute for Child Health and Human Develop-
ment— 
‘‘(1) shall disseminate information on scientif-
ically based reading research pertaining to children, 
youth, and adults; 
‘‘(2) shall identify and disseminate information 
about schools, local educational agencies, and States 
that effectively developed and implemented classroom 
reading programs that meet the requirements of this 
subpart, including those effective States, local edu-
cational agencies, and schools identified through the 
evaluation and peer review provisions of this subpart; 
and 
‘‘(3) shall support the continued identification 
and dissemination of information on reading pro-
grams that contain the essential components of read-
ing instruction as supported by scientifically based 
reading research, that can lead to improved reading 
outcomes for children, youth, and adults. 
‘‘(b) DISSEMINATION.— 
‘‘(1) IN GENERAL.—At a minimum, the National 
Institute for Literacy shall disseminate such informa-
tion to— 
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•HR 1 RH1&2 
‘‘(A) recipients of Federal financial assist-
ance under part A of this title, part A of title 
III, the Head Start Act, the Individuals with 
Disabilities Education Act, and the Adult Edu-
cation and Family Literacy Act; and 
‘‘(B) each Bureau funded school (as defined 
in section 1141(3) of the Education Amendments 
of 1978). 
‘‘(2) USE OF EXISTING NETWORKS.—In carrying 
out this section, the National Institute for Literacy 
shall, to the extent practicable, utilize existing infor-
mation and dissemination networks developed and 
maintained through other public and private entities. 
‘‘SEC. 1209. DEFINITIONS. 
‘‘For purposes of this subpart: 
‘‘(1) ELIGIBLE
PROFESSIONAL
DEVELOPMENT 
PROVIDER.—The term ‘eligible professional develop-
ment provider’ means a provider of professional devel-
opment in reading instruction to teachers, including 
special education teachers, that is based on scientif-
ically based reading research. 
‘‘(2) ESSENTIAL COMPONENTS OF READING IN-
STRUCTION.—The term ‘essential components of read-
ing instruction’ means explicit and systematic in-
struction in— 
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•HR 1 RH1&2 
‘‘(A) phonemic awareness; 
‘‘(B) phonics; 
‘‘(C) vocabulary development; 
‘‘(D) oral reading fluency; and 
‘‘(E) reading comprehension strategies. 
‘‘(3) INSTRUCTIONAL STAFF.—The term ‘instruc-
tional staff’— 
‘‘(A) means individuals who have responsi-
bility for teaching children to read; and 
‘‘(B) includes principals, teachers, super-
visors of instruction, librarians, library school 
media specialists, teachers of academic subjects 
other than reading, and other individuals who 
have responsibility for assisting children to learn 
to read. 
‘‘(4) READING.—The term ‘reading’ means a 
complex system of deriving meaning from print that 
requires all of the following: 
‘‘(A) The skills and knowledge to under-
stand how phonemes, or speech sounds, are con-
nected to print. 
‘‘(B) The ability to decode unfamiliar 
words. 
‘‘(C) The ability to read fluently. 
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•HR 1 RH1&2 
‘‘(D) Sufficient background information 
and vocabulary to foster reading comprehension. 
‘‘(E) The development of appropriate active 
strategies to construct meaning from print. 
‘‘(F) The development and maintenance of a 
motivation to read. 
‘‘(5) 
RIGOROUS
DIAGNOSTIC
READING
AND 
SCREENING ASSESSMENT TOOLS.—The term ‘rigorous 
diagnostic reading and screening assessment tools’ 
means assessments that— 
‘‘(A) are valid, reliable, and based on sci-
entifically based reading research; 
‘‘(B) measure progress in developing pho-
nemic awareness and phonics skills, vocabulary, 
reading fluency, and reading comprehension; 
‘‘(C) identify students who may be at risk 
for reading failure or who are having difficulty 
reading; and 
‘‘(D) are used to improve instruction. 
‘‘(6) 
SCIENTIFICALLY
BASED
READING
RE-
SEARCH.—The term ‘scientifically based reading re-
search’— 
‘‘(A) means the application of rigorous, sys-
tematic, and objective procedures to obtain valid 
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•HR 1 RH1&2 
knowledge relevant to reading development, read-
ing instruction, and reading difficulties; and 
‘‘(B) shall include research that— 
‘‘(i) employs systematic, empirical 
methods that draw on observation or experi-
ment; 
‘‘(ii) involves rigorous data analyses 
that are adequate to test the stated 
hypotheses and justify the general conclu-
sions drawn; 
‘‘(iii) relies on measurements or obser-
vational methods that provide valid data 
across evaluators and observers and across 
multiple measurements and observations; 
and 
‘‘(iv) has been accepted by a peer-re-
viewed journal or approved by a panel of 
independent experts through a comparably 
rigorous, objective, and scientific review. 
‘‘Subpart 2—Early Reading First 
‘‘SEC. 1221. PURPOSES. 
‘‘The purposes of this subpart are as follows: 
‘‘(1) To improve prereading skills in children 
aged 3 through 5, particularly children from low-in-
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•HR 1 RH1&2 
come families, in high-quality oral language and lit-
erature-rich environments. 
‘‘(2) To provide professional development for 
early childhood teachers that prepares them with sci-
entific research-based knowledge of early reading de-
velopment to assist in developing the children’s— 
‘‘(A) automatic recognition of the letters of 
the alphabet; 
‘‘(B) understanding that spoken words are 
made up of small segments of speech sounds and 
that certain letters regularly represent such 
speech sounds; 
‘‘(C) spoken vocabulary and oral com-
prehension abilities; and 
‘‘(D) understanding of semiotic concepts. 
‘‘(3) To use scientific research-based screening 
tools or other appropriate measures to determine 
whether preschool children are developing the skills 
identified in this section. 
‘‘(4) To identify and provide scientific research- 
based prereading language and literacy activities and 
instructional materials that can be used to assist in 
the development of prereading skills in children. 
‘‘(5) To integrate such scientific research-based 
instructional materials and literacy activities with 
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•HR 1 RH1&2 
existing programs of preschools, child care agencies, 
and Head Start centers, and with family literacy 
services. 
‘‘SEC. 1222. LOCAL EARLY READING FIRST GRANTS. 
‘‘(a) PROGRAM AUTHORIZED.—From amounts appro-
priated under section 1002(b)(2), the Secretary shall make 
awards, on a competitive basis and for periods of not more 
than 5 years, to eligible applicants to enable such appli-
cants to carry out activities that are consistent with the 
purposes of this subpart. 
‘‘(b) DEFINITION OF ELIGIBLE APPLICANT.—In this 
subpart, the term ‘eligible applicant’ means— 
‘‘(1) a local educational agency; 
‘‘(2) one or more public or private organizations, 
acting on behalf of one or more programs that serve 
children aged 3 through 5 (such as a program at a 
child care agency or Head Start center or a family 
literacy program), which organizations shall be lo-
cated in a community served by a local educational 
agency; or 
‘‘(3) one or more local educational agencies in 
collaboration with one or more organizations de-
scribed in paragraph (2). 
‘‘(c) APPLICATIONS.—An eligible applicant that de-
sires to receive a grant under this subpart shall submit an 
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•HR 1 RH1&2 
application to the Secretary, which shall include a descrip-
tion of— 
‘‘(1) the programs to be served by the proposed 
project, including general demographic and socio-
economic information on the communities in which 
the proposed project will be administered; 
‘‘(2) how the proposed project will enhance the 
school readiness of children aged 3 through 5 in high- 
quality oral language and literature-rich environ-
ments; 
‘‘(3) how the proposed project will provide early 
childhood teachers with scientific research-based 
knowledge of early reading development and assist 
such teachers in developing the children’s prereading 
skills; 
‘‘(4) how the proposed project will provide serv-
ices and utilize instructional materials that are based 
on scientifically based reading research on early lan-
guage acquisition, prereading activities, and the de-
velopment of spoken vocabulary skills; 
‘‘(5) how the proposed project will integrate such 
instructional materials and literacy activities with 
existing preschool programs and family literacy serv-
ices; 
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•HR 1 RH1&2 
‘‘(6) how the proposed project will help staff in 
the programs to meet the diverse needs of children in 
the community, including children with limited 
English proficiency and children with learning dis-
abilities; 
‘‘(7) how the proposed project will help children, 
particularly children experiencing difficulty with spo-
ken language, prereading, and early reading skills, to 
make the transition from preschool to formal class-
room instruction in school; 
‘‘(8) how the activities conducted under this sub-
part will be coordinated with the eligible applicant’s 
activities under subpart 1, if the applicant has re-
ceived a subgrant under such subpart, at the kinder-
garten through third grade levels; 
‘‘(9) how the proposed project will evaluate the 
success of the activities supported under this subpart 
in enhancing the early language and reading develop-
ment of children served by the project; and 
‘‘(10) such other information as the Secretary 
may require. 
‘‘(d) APPROVAL OF LOCAL APPLICATIONS.—The Sec-
retary shall select applicants for funding under this subpart 
based on the quality of the applications and the rec-
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•HR 1 RH1&2 
ommendations of the peer review panel convened under sec-
tion 1204(c)(2). 
‘‘(e) LOCAL USES OF FUNDS.— 
‘‘(1) REQUIRED ACTIVITIES.—An eligible appli-
cant that receives a grant under this subpart shall use 
the funds provided under the grant to carry out the 
following activities: 
‘‘(A) Providing children aged 3 through 5 
with high-quality oral language and literature- 
rich 
environments 
in 
which 
to 
acquire 
prereading skills. 
‘‘(B) Providing professional development for 
early childhood teachers that prepares them with 
scientific research-based knowledge of early read-
ing development to assist in developing the chil-
dren’s— 
‘‘(i) automatic recognition of the letters 
of the alphabet; 
‘‘(ii) understanding that spoken words 
are made up of small segments of speech 
sounds and that certain letters regularly 
represent such speech sounds; 
‘‘(iii) spoken vocabulary and oral com-
prehension abilities; and 
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•HR 1 RH1&2 
‘‘(iv) understanding of semiotic con-
cepts. 
‘‘(C) Identifying and providing scientific 
research-based prereading language and literacy 
activities and instructional materials for use in 
developing the children’s— 
‘‘(i) automatic recognition of the letters 
of the alphabet; 
‘‘(ii) understanding that spoken words 
are made up of small segments of speech 
sounds and that certain letters regularly 
represent such speech sounds; 
‘‘(iii) spoken vocabulary and oral com-
prehension abilities; and 
‘‘(iv) understanding of semiotic con-
cepts. 
‘‘(2) OPTIONAL ACTIVITIES.—An eligible appli-
cant that receives a grant under this subpart may use 
the funds provided under the grant to carry out the 
following activities: 
‘‘(A) Using scientific research-based screen-
ing tools or other appropriate measures to deter-
mine whether preschool children are developing 
the skills identified in this subsection. 
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•HR 1 RH1&2 
‘‘(B) Integrating such instructional mate-
rials and literacy activities with programs of ex-
isting child care agencies, preschools, and Head 
Start centers, and with family literacy services. 
‘‘(f) AWARD AMOUNTS.—The Secretary may establish 
a maximum award amount, or ranges of award amounts, 
for grants under this subpart. 
‘‘SEC. 1223. FEDERAL ADMINISTRATION. 
‘‘The Secretary shall consult with the Secretary of 
Health and Human Services in order to coordinate the ac-
tivities undertaken under this subpart with programs under 
the Head Start Act (42 U.S.C. 9831 et seq.). 
‘‘SEC. 1224. REPORTING REQUIREMENTS. 
‘‘Each eligible applicant receiving a grant under this 
subpart shall report annually to the Secretary regarding 
the eligible applicant’s progress in addressing the purposes 
of this subpart. 
‘‘SEC. 1225. EVALUATION. 
‘‘From the total amount made available under section 
1002(b)(2) for the period beginning October 1, 2002, and 
ending September 30, 2006, the Secretary shall reserve not 
more than $1,000,000 to conduct an independent evaluation 
of the effectiveness of this subpart. 
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•HR 1 RH1&2 
‘‘SEC. 1226. ADDITIONAL RESEARCH. 
‘‘From the amount made available under section 
1002(b)(2) for each of the fiscal years 2002 through 2006, 
the Secretary shall reserve not more than $3,000,000 to con-
duct, in consultation with the National Institute for Child 
Health and Human Development, the National Institute for 
Literacy, and the Department of Health and Human Serv-
ices, additional research on language and literacy develop-
ment for children aged 3 through 5.’’. 
SEC. 112. AMENDMENTS TO EVEN START. 
Part B of title I (20 U.S.C. 6361 et seq.), as amended 
by section 111, is further amended— 
(1) by inserting before section 1231 (as so redes-
ignated by section 111) the following: 
‘‘Subpart 3—William F. Goodling Even Start Family 
Literacy Programs’’; 
(2) in each of sections 1231 through 1242 (as so 
redesignated by section 111)— 
(A) by striking ‘‘this part’’ each place such 
term appears and inserting ‘‘this subpart’’; and 
(B) by striking ‘‘1002(b)’’ each place such 
term appears and inserting ‘‘1002(b)(3)’’; 
(3) in section 1231(4), by striking ‘‘2252)’’ and 
inserting ‘‘1209)’’; 
(4) in section 1232— 
(A) in subsection (b)— 
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•HR 1 RH1&2 
(i) in paragraph (1)(A), by moving the 
margins of clauses (v) and (vi) 2 ems to the 
right; and 
(ii) in paragraph (3), by striking 
‘‘1202(a)(1)(C)’’ 
and 
inserting 
‘‘1232(a)(1)(C)’’; and 
(B) in subsection (c)— 
(i) in paragraph (1)— 
(I) by striking ‘‘1203(a),’’ and in-
serting ‘‘1233(a),’’; and 
(II) by striking ‘‘1203(b)’’ and in-
serting ‘‘1233(b)’’; and 
(ii) in paragraph (2), by striking 
‘‘1210.’’ and inserting ‘‘1240.’’; 
(7) in section 1235— 
(A) in paragraph (10), by striking ‘‘2252)’’ 
and inserting ‘‘1209)’’; 
(B) in paragraph (12), by striking ‘‘2252),’’ 
and inserting ‘‘1209),’’; and 
(C) in paragraph (15), by striking ‘‘pro-
gram.’’ and inserting ‘‘program to be used for 
program improvement.’’; 
(8) in section 1237— 
(A) in subsection (c)(1)— 
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•HR 1 RH1&2 
(i) in subparagraph (B), by striking 
‘‘1205;’’ and inserting ‘‘1235;’’; and 
(ii) in subparagraph (F), by striking 
‘‘14306;’’ and inserting ‘‘8306;’’; and 
(B) in subsection (d), by striking ‘‘14302.’’ 
and inserting ‘‘8302.’’; 
(9) in section 1238— 
(A) in subsection (a)(1)— 
(i) in subparagraph (A)(ii), by strik-
ing ‘‘1205;’’ and inserting ‘‘1235;’’; and 
(ii) in subparagraph (F), by striking 
‘‘1204(b);’’ and inserting ‘‘1234(b);’’; and 
(B) in subsection (b)— 
(i) in paragraph (3)— 
(I) by striking ‘‘1207(c)(1)(A)’’ 
and inserting ‘‘1237(c)(1)(A)’’; and 
(II) by striking ‘‘1210.’’ and in-
serting ‘‘1240.’’; 
(ii) in paragraph (4), by striking 
‘‘1210,’’ and inserting ‘‘1240,’’; and 
(iii) in paragraph (5)(B), by striking 
‘‘1204(b).’’ and inserting ‘‘1234(b).’’; 
(10) in section 1239— 
(A) by striking ‘‘1202(b)(1),’’ and inserting 
‘‘1232(b)(1),’’; and 
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•HR 1 RH1&2 
(B) by striking ‘‘1205(10)’’ and inserting 
‘‘1235(10)’’; and 
(11) in section 1241— 
(A) in subsection (b)(1)— 
(i) by striking ‘‘1202(b)(2),’’ and in-
serting ‘‘1232(b)(2),’’; and 
(ii) by striking ‘‘2252);’’ and inserting 
‘‘1209);’’; and 
(B) in subsection (c), by striking ‘‘2258,’’ 
and inserting ‘‘1208,’’. 
SEC. 113. INEXPENSIVE BOOK DISTRIBUTION PROGRAM. 
(a) TRANSFER AND REDESIGNATION.—Part E of title 
X (20 U.S.C. 8131) is transferred and redesignated as sub-
part 4 of part B of title I. Section 10501 is redesignated 
as section 1251. 
(b) PURPOSE.—Section 1251 (as so redesignated) is 
amended— 
(1) by striking subsection (e); 
(2) by redesignating subsection (d) as subsection 
(g); 
(3) by redesignating subsections (a) through (c) 
as subsections (b) through (d), respectively; and 
(4) by inserting before subsection (b) (as so re-
designated) the following: 
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‘‘(a) PURPOSE.—The purpose of this program is to es-
tablish and implement a model partnership between a gov-
ernmental entity and a private entity, to help prepare 
young children for reading, and motivate older children to 
read, through the distribution of inexpensive books. Local 
reading motivation programs assisted under this section 
shall use such assistance to provide books, training for vol-
unteers, motivational activities, and other essential literacy 
resources, and shall assign the highest priority to serving 
the youngest and neediest children in the United States.’’. 
(c) AUTHORIZATION.—Section 1251(b) (as so redesig-
nated) is amended by striking ‘‘books to students, that moti-
vate children to read.’’ and inserting ‘‘books to young and 
school-aged children that motivate them to read.’’. 
(d) REQUIREMENTS OF CONTRACT.—Section 1251(c) 
(as so redesignated) is amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘subsection (a)’’ and inserting ‘‘subsection 
(b)’’; and 
(2) in paragraph (4), by inserting ‘‘training 
and’’ before ‘‘technical’’. 
(e) SPECIAL RULES FOR CERTAIN SUBCONTRACTORS; 
MULTI-YEAR CONTRACTS.—Section 1251 (as so redesig-
nated) is amended by inserting after subsection (d) the fol-
lowing: 
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•HR 1 RH1&2 
‘‘(e) SPECIAL RULES
FOR CERTAIN SUBCONTRAC-
TORS.— 
‘‘(1) FUNDS FROM OTHER FEDERAL SOURCES.— 
Subcontractors operating programs under this section 
in low-income communities with a substantial num-
ber or percentage of children with special needs, as 
described in subsection (c)(3), may use funds from 
other Federal sources to pay the non-Federal share of 
the cost of the program, if those funds do not comprise 
more than 50 percent of the non-Federal share of the 
funds used for the cost of acquiring and distributing 
books. 
‘‘(2) 
WAIVER
AUTHORITY.—Notwithstanding 
subsection (c), the contractor may waive, in whole or 
in part, the requirement in subsection (c)(1) for a 
subcontractor, if the subcontractor demonstrates that 
it would otherwise not be able to participate in the 
program, and enters into an agreement with the con-
tractor with respect to the amount of the non-Federal 
share to which the waiver will apply. In a case in 
which such a waiver is granted, the requirement in 
subsection (c)(2) shall not apply. 
‘‘(f) MULTI-YEAR CONTRACTS.—The contractor may 
enter into a multi-year subcontract under this section, if— 
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‘‘(1) the contractor believes that such subcontract 
will provide the subcontractor with additional lever-
age in seeking local commitments; and 
‘‘(2) the subcontract does not undermine the fi-
nances of the national program.’’. 
(f) CONTINUATION OF AWARDS.—Notwithstanding any 
other provision of this Act, any person or agency that was 
awarded a contract under part E of title X (20 U.S.C. 
8131) prior to the date of the enactment of this Act shall 
continue to receive funds in accordance with the terms of 
such contract until the date on which the contract period 
terminates under such terms. 
PART C—EDUCATION OF MIGRATORY CHILDREN 
SEC. 121. STATE ALLOCATIONS. 
Section 1303 (20 U.S.C. 6393) is amended— 
(1) by amending subsection (a) to read as fol-
lows: 
‘‘(a) STATE ALLOCATIONS.— 
‘‘(1) FISCAL YEAR 2002.—For fiscal year 2002, 
each State (other than the Commonwealth of Puerto 
Rico) is entitled to receive under this part an amount 
equal to— 
‘‘(A) the sum of the estimated number of 
migratory children aged three through 21 who 
reside in the State full time and the full-time 
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equivalent of the estimated number of migratory 
children aged three through 21 who reside in the 
State part time, as determined in accordance 
with subsection (d); multiplied by 
‘‘(B) 40 percent of the average per-pupil ex-
penditure in the State, except that the amount 
determined under this paragraph shall not be 
less than 32 percent, nor more than 48 percent, 
of the average expenditure per pupil in the 
United States. 
‘‘(2) SUBSEQUENT YEARS.— 
‘‘(A) BASE AMOUNT.— 
‘‘(i) IN GENERAL.—Except as provided 
in subsection (b) and clause (ii), each State 
(other than the Commonwealth of Puerto 
Rico) is entitled to receive under this part, 
for fiscal year 2003 and succeeding fiscal 
years, an amount equal to— 
‘‘(I) the amount that such State 
received under this part for fiscal year 
2002; plus 
‘‘(II) the amount allocated to the 
State under subparagraph (B). 
‘‘(ii) NONPARTICIPATING STATES.—In 
the case of a State (other than the Common-
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•HR 1 RH1&2 
wealth of Puerto Rico) that did not receive 
any funds for fiscal year 2002 under this 
part, the State shall receive, for fiscal year 
2003 and succeeding fiscal years, an 
amount equal to— 
‘‘(I) the amount that such State 
would have received under this part for 
fiscal year 2002 if its application 
under section 1304 for the year had 
been approved; plus 
‘‘(II) the amount allocated to the 
State under subparagraph (B). 
‘‘(B) 
ALLOCATION
OF
ADDITIONAL 
AMOUNT.—For fiscal year 2003 and succeeding 
fiscal years, the amount (if any) by which the 
funds appropriated to carry out this part for the 
year exceed such funds for fiscal year 2002 shall 
be allocated to a State (other than the Common-
wealth of Puerto Rico) so that the State receives 
an amount equal to— 
‘‘(i) the sum of— 
‘‘(I) the number of identified eligi-
ble migratory children, aged 3 through 
21, residing in the State during the 
previous year; and 
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•HR 1 RH1&2 
‘‘(II) the number of identified eli-
gible 
migratory 
children, 
aged 
through 21, who received services under 
this part in summer or intersession 
programs provided by the State during 
such year; multiplied by 
‘‘(ii) 40 percent of the average per- 
pupil expenditure in the State, except that 
the amount determined under this clause 
may not be less than 32 percent, or more 
than 48 percent, of the average per-pupil 
expenditure in the United States.’’; 
(2) by amending subsection (b) to read as fol-
lows: 
‘‘(b) ALLOCATION TO PUERTO RICO.— 
‘‘(1) IN
GENERAL.—For each fiscal year, the 
grant which the Commonwealth of Puerto Rico shall 
be eligible to receive under this part shall be the 
amount determined by multiplying the number of 
children counted under subsection (a)(1)(A) for the 
Commonwealth of Puerto Rico by the product of— 
‘‘(A) the percentage which the average per 
pupil expenditure in the Commonwealth of Puer-
to Rico is of the lowest average per pupil expend-
iture of any of the 50 States; and 
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‘‘(B) 32 percent of the average per pupil ex-
penditure in the United States. 
‘‘(2) MINIMUM PERCENTAGE.—The percentage in 
paragraph (1)(A) shall not be less than— 
‘‘(A) for fiscal year 2002, 77.5 percent; 
‘‘(B) for fiscal year 2003, 80.0 percent; 
‘‘(C) for fiscal year 2004, 82.5 percent; and 
‘‘(D) for fiscal year 2005 and succeeding 
fiscal years, 85.0 percent. 
‘‘(3) LIMITATION.—If the application of para-
graph (2) would result in any of the 50 States or the 
District of Columbia receiving less under this part 
than it received under this part for the preceding fis-
cal year, the percentage in paragraph (1) shall be the 
greater of the percentage in paragraph (1)(A) or the 
percentage used for the preceding fiscal year.’’; and 
(3) by striking subsection (d) and redesignating 
subsection (e) as subsection (d). 
SEC. 122. STATE APPLICATIONS; SERVICES. 
(a) PROGRAM INFORMATION.—Section 1304(b) (20 
U.S.C. 6394(b)) is amended— 
(1) in paragraph (1), by striking ‘‘addressed 
through’’ and all that follows through the semicolon at 
the end and inserting the following: 
‘‘addressed through— 
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•HR 1 RH1&2 
‘‘(A) the full range of services that are 
available for migratory children from appro-
priate local, State, and Federal educational pro-
grams; 
‘‘(B) joint planning among local, State, and 
Federal educational programs serving migrant 
children, including programs under part A of 
title III; 
‘‘(C) the integration of services available 
under this part with services provided by those 
other programs; and 
‘‘(D) measurable program goals and out-
comes;’’; and 
(2) in paragraph (5), by striking ‘‘the require-
ments of paragraph (1);’’ and inserting ‘‘the numbers 
and needs of migratory children, the requirements of 
subsection (d), and the availability of funds from 
other Federal, State, and local programs;’’. 
(b) 
ASSURANCES.—Section 
1304(c) 
(20 
U.S.C. 
6394(c)) is amended— 
(1) in paragraph (1), by striking ‘‘1306(b)(1);’’ 
and inserting ‘‘1306(a);’’; 
(2) in paragraph (2), by striking ‘‘part F;’’ and 
inserting ‘‘part H;’’ 
(3) in paragraph (3)— 
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