I
106TH CONGRESS
1ST SESSION
H. R. 892
To renew education in this country by providing funds for school renovation
and construction, scholarships that allow parents choice in education,
and tax incentives.
IN THE HOUSE OF REPRESENTATIVES
MARCH 2, 1999
Mr. FORBES introduced the following bill; which was referred to the Commit-
tee on Education and the Workforce, and in addition to the Committee
on Ways and Means, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To renew education in this country by providing funds for
school renovation and construction, scholarships that
allow parents choice in education, and tax incentives.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Renewing America’s
Schools Act’’.
TITLE I—EDUCATIONAL
FACILITIES IMPROVEMENT
SEC. 101. PROVISION OF ASSISTANCE FOR CONSTRUCTION
AND RENOVATION OF EDUCATIONAL FACILI-
TIES.
Title XII of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 8501 et seq.) is amended—
(1) by striking sections 12002 and 12003;
(2) by redesignating sections 12001 and 12004
through 12013, as sections 12101 and 12102
through 12111, respectively;
(3) by inserting after the title heading the fol-
lowing:
‘‘SEC. 12001. FINDINGS.
‘‘The Congress finds the following:
‘‘(1) The General Accounting Office performed
a comprehensive survey of the Nation’s public ele-
mentary and secondary school facilities, and found
severe levels of disrepair in all areas of the United
States.
‘‘(2) The General Accounting Office concluded
more than 14,000,000 children attend schools in
need of extensive repair or replacement. Seven mil-
lion children attend schools with life safety code vio-
full-scale use of technology. More than a third of
schools lack the requisite electrical power. Fifty-six
percent of schools have insufficient phone lines for
modems.
‘‘(7) The Department of Education reported
that elementary and secondary school enrollment, al-
ready at a record high level, will continue to grow
during the period between 1996 and 2000, and that
in order to accommodate this growth, the United
States will need to build an additional 6,000 schools
over this time period.
‘‘(8) The General Accounting Office found it
will cost $112,000,000,000 just to bring schools up
to good, overall condition, not including the cost of
modernizing schools so the schools can utilize 21st
century technology, nor including the cost of expan-
sion to meet record enrollment levels.
‘‘(9) State and local financing mechanisms have
proven inadequate to meet the challenges facing to-
day’s aging school facilities. Large numbers of local
educational agencies have difficulties securing fi-
nancing for school facility improvement.
‘‘(10) The Federal Government can support ele-
mentary and secondary school facilities, and can le-
verage additional funds for the improvement of ele-
mentary and secondary school facilities.
‘‘SEC. 12002. PURPOSE.
‘‘The purpose of this title is to help State and local
authorities improve the quality of education at their public
schools through the provision of Federal funds to enable
the State and local authorities to meet the cost associated
with the improvement of school facilities within their juris-
dictions.
‘‘PART A—GENERAL INFRASTRUCTURE
IMPROVEMENT GRANT PROGRAM’’;
and
(4) by adding at the end of part A the follow-
ing:
‘‘PART B—CONSTRUCTION AND RENOVATION
BOND SUBSIDY PROGRAM
‘‘SEC. 12201. DEFINITIONS.
‘‘As used in this part:
‘‘(1) EDUCATIONAL FACILITY.—The term ‘edu-
cational facility’ has the meaning given the term
‘school’ in section 12110.
‘‘(2) LOCAL
AREA.—The term ‘local area’
means the geographic area served by a local edu-
cational agency.
‘‘(3) LOCAL
BOND
AUTHORITY.—The term
‘local bond authority’ means—
‘‘(A) a local educational agency with au-
thority to issue a bond for construction or ren-
ovation of educational facilities in a local area;
and
‘‘(B) a political subdivision of a State with
authority to issue such a bond for an area in-
cluding a local area.
‘‘(4) POVERTY LINE.—The term ‘poverty line’
means the official poverty line (as defined by the Of-
fice of Management and Budget, and revised annu-
ally in accordance with section 673(2) of the Omni-
bus Budget Reconciliation Act of 1981 (42 U.S.C.
9902(2))) applicable to a family of the size involved.
‘‘(5) STATE.—The term ‘State’ means each of
the several States of the United States, the District
of Columbia, and the Commonwealth of Puerto Rico.
‘‘SEC. 12202. AUTHORIZATION OF PROGRAM.
‘‘(a) PROGRAM AUTHORITY.—Of the amount appro-
priated under section 12210 for a fiscal year and not re-
served under subsection (b), the Secretary shall use—
‘‘(1) 20 percent of such amount to award
grants to local bond authorities for not more than
125 eligible local areas as provided for under section
12203; and
‘‘(2) 80 percent of such amount to award
grants to States as provided for under section
12204.
‘‘(b) SPECIAL RULE.—The Secretary may reserve—
‘‘(1) not more than 1 percent of the amount ap-
propriated under section 12210 to provide assistance
to Indian schools in accordance with the purpose of
this title;
‘‘(2) not more than 0.5 percent of the amount
appropriated under section 12210 to provide assist-
ance to Guam, the United States Virgin Islands,
American Samoa, the Commonwealth of the North-
ern Mariana Islands, the Republic of the Marshall
Islands, the Federated States of Micronesia, and the
Republic of Palau to carry out the purpose of this
title; and
‘‘(3) not more than 0.1 percent of the amount
appropriated under section 12210 to carry out sec-
tion 12209.
‘‘SEC. 12203. DIRECT GRANTS TO LOCAL BOND AUTHORI-
TIES.
‘‘(a) IN GENERAL.—The Secretary shall award a
grant under section 12202(a)(1) to eligible local bond au-
thorities to provide assistance for construction or renova-
tion of educational facilities in a local area.
‘‘(b) USE OF FUNDS.—The local bond authority shall
use amounts received through a grant made under section
12202(a)(1) to pay a portion of the interest costs applica-
ble to any local bond issued to finance an activity de-
scribed in section 12205 with respect to the local area.
‘‘(c) ELIGIBILITY AND DETERMINATION.—
‘‘(1) ELIGIBILITY.—To be eligible to receive a
grant under section 12202(a)(1) for a local area, a
local bond authority shall demonstrate the capacity
to issue a bond for an area that includes 1 of the
125 local areas for which the Secretary has made a
determination under paragraph (2).
‘‘(2) DETERMINATION.—
‘‘(A) MANDATORY.—The Secretary shall
make a determination of the 100 local areas
that have the highest numbers of children who
are—
‘‘(i) aged 5 to 17, inclusive; and
‘‘(ii) members of families with in-
comes that do not exceed 100 percent of
the poverty line.
‘‘(B) 
DISCRETIONARY.—The 
Secretary
may make a determination of 25 local areas, for
which the Secretary has not made a determina-
tion under subparagraph (A), that have extraor-
dinary needs for construction or renovation of
educational facilities that the local bond author-
ity serving the local area is unable to meet.
‘‘(d) APPLICATION.—To be eligible to receive a grant
under section 12202(a)(1), a local bond authority shall
prepare and submit to the Secretary an application at
such time, in such manner, and containing such informa-
tion as the Secretary may require, including—
‘‘(1) an assurance that the application was de-
veloped in consultation with parents and classroom
teachers;
‘‘(2) information sufficient to enable the Sec-
retary to make a determination under subsection
(c)(2) with respect to such local authority;
‘‘(3) a description of the architectural, civil,
structural, mechanical, or electrical construction or
renovation to be supported with the assistance pro-
vided under this part;
‘‘(4) a cost estimate of the proposed construc-
tion or renovation;
‘‘(5) an identification of other resources, such
as unused bonding capacity, that are available to
carry out the activities for which assistance is re-
quested under this part;
‘‘(6) a description of how activities supported
with funds provided under this part will promote en-
ergy conservation; and
‘‘(7) such other information and assurances as
the Secretary may require.
‘‘(e) AWARD OF GRANTS.—
‘‘(1) IN GENERAL.—In awarding grants under
section 12202(a)(1), the Secretary shall give pref-
erence to a local bond authority based on—
‘‘(A) the extent to which the local edu-
cational agency serving the local area involved
or the educational facility for which the author-
ity seeks a grant (as appropriate) meets the cri-
teria described in section 12103(a);
‘‘(B) the extent to which the educational
facility is overcrowded; and
‘‘(C) the extent to which assistance pro-
vided through the grant will be used to fund
construction or renovation that, but for receipt
of the grant, would not otherwise be possible to
undertake.
‘‘(2) AMOUNT OF ASSISTANCE.—
to finance an activity described in section
12205 with respect to the local area involved.
‘‘SEC. 12204. GRANTS TO STATES.
‘‘(a) IN GENERAL.—The Secretary shall award a
grant under section 12202(a)(2) to each eligible State to
provide assistance to the State, or local bond authorities
in the State, for construction and renovation of edu-
cational facilities in local areas.
‘‘(b) USE OF FUNDS.—The State shall use amounts
received 
through 
a 
grant 
made 
under 
section
12202(a)(2)—
‘‘(1) to pay a portion of the interest costs appli-
cable to any State bond issued to finance an activity
described in section 12205 with respect to the local
areas; or
‘‘(2) to provide assistance to local bond authori-
ties in the State to pay a portion of the interest
costs applicable to any local bond issued to finance
an activity described in section 12205 with respect
to the local areas.
‘‘(c) AMOUNT OF GRANT TO STATE.—
‘‘(1) IN GENERAL.—From the amount available
for grants under section 12202(a)(2), the Secretary
shall award a grant to each eligible State that is
equal to the total of—
‘‘(A) a sum that bears the same relation-
ship to 50 percent of such amount as the total
amount of funds made available for all eligible
local educational agencies in the State under
part A of title I for such year bears to the total
amount of funds made available for all eligible
local educational agencies in all States under
such part for such year; and
‘‘(B) a sum that bears the same relation-
ship to 50 percent of such amount as the total
amount of funds made available for all eligible
local educational agencies in the State under
title VI for such year bears to the total amount
of funds made available for all eligible local
educational agencies in all States under such
title for such year.
‘‘(2) ELIGIBLE
LOCAL
EDUCATIONAL
AGEN-
CIES.—For the purpose of paragraph (1) the term
‘eligible local educational agency’ means a local edu-
cational agency that does not serve a local area for
which an eligible local bond authority received a
grant under section 12203.
‘‘(d) STATE APPLICATIONS REQUIRED.—To be eligi-
ble to receive a grant under section 12202(a)(2), a State
shall prepare and submit to the Secretary an application
at such time, in such manner, and containing such infor-
mation as the Secretary may require. Such application
shall contain—
‘‘(1) a description of the process the State will
use to determine which local bond authorities will re-
ceive assistance under subsection (b)(2).
‘‘(2) an assurance that grant funds under this
section will be used to increase the amount of school
construction or renovation in the State for a fiscal
year compared to such amount in the State for the
preceding fiscal years.
‘‘(e) ADMINISTERING AGENCY.—
‘‘(1) IN GENERAL.—The State agency with au-
thority to issue bonds for the construction or renova-
tion of educational facilities, or with the authority to
otherwise finance such construction or renovation,
shall administer the amount received through the
grant.
‘‘(2) SPECIAL RULE.—If no agency described in
paragraph (1) exits, or if there is more than one
such agency, then the chief executive officer of the
State and the chief State school officer shall des-
ignate a State entity or individual to administer the
amounts received through the grant.
‘‘(f) ASSISTANCE TO LOCAL BOND AUTHORITIES.—
‘‘(1) IN GENERAL.—To be eligible to receive as-
sistance from a State under this section, a local
bond authority shall prepare and submit to the State
agency designated under subsection (e) an applica-
tion at such time, in such manner, and containing
such information as the State agency may require,
including the information described in section
12203(d).
‘‘(2) CRITERIA.—In awarding grants under this
section, the State agency shall give preference to a
local bond authority based on—
‘‘(A) the extent to which the local edu-
cational agency serving the local area involved
or the educational facility for which the author-
ity seeks the grant (as appropriate) meets the
criteria described in section 12103(a);
‘‘(B) the extent to which the educational
facility is overcrowded; and
‘‘(C) the extent to which assistance pro-
vided through the grant will be used to fund
construction or renovation that, but for receipt
of the grant, would not otherwise be possible to
undertake.
‘‘(3) AMOUNT OF ASSISTANCE.—A local bond
authority seeking assistance for a local area served
by a local educational agency described in—
‘‘(A) clause (i)(I) or clause (ii)(I) of sec-
tion 1125(c)(2)(A), shall be eligible for assist-
ance in an amount that does not exceed 10 per-
cent;
‘‘(B) clause (i)(II) or clause (ii)(II) of sec-
tion 1125(c)(2)(A), shall be eligible for assist-
ance in an amount that does not exceed 20 per-
cent;
‘‘(C) clause (i)(III) or clause (ii)(III) of
section 1125(c)(2)(A), shall be eligible for as-
sistance in an amount that does not exceed 30
percent;
‘‘(D) clause (i)(IV) or clause (ii)(IV) of
section 1125(c)(2)(A), shall be eligible for as-
sistance in an amount that does not exceed 40
percent; and
‘‘(E) clause (i)(V) or clause (ii)(V) of sec-
tion 1125(c)(2)(A), shall be eligible for assist-
ance in an amount that does not exceed 50 per-
cent;
of the interest costs applicable to any local bond
issued to finance an activity described in section
12205 with respect to the local area.
‘‘(g) ASSISTANCE TO STATE.—
‘‘(1) IN GENERAL.—If a State issues a bond to
finance an activity described in section 12205 with
respect to local areas, the State shall be eligible for
assistance in an amount that does not exceed the
percentage calculated under the formula described in
paragraph (2) of the interest costs applicable to the
State bond with respect to the local areas.
‘‘(2) FORMULA.—The Secretary shall develop a
formula for determining the percentage referred to
in paragraph (1). The formula shall specify that the
percentage shall consist of a weighted average of the
percentages referred to in subparagraphs (A)
through (E) of subsection (f)(3) for the local areas
involved.
‘‘SEC. 12205. AUTHORIZED ACTIVITIES.
‘‘An activity described in this section is a project of
significant size and scope that consists of—
‘‘(1) the repair or upgrading of classrooms or
structures related to academic learning, including
the repair of leaking roofs, crumbling walls, inad-
equate plumbing, poor ventilation equipment, and in-
adequate heating or light equipment;
‘‘(2) an activity to increase physical safety at
the educational facility involved;
‘‘(3) an activity to enhance the educational fa-
cility involved to provide access for students, teach-
ers, and other individuals with disabilities;
‘‘(4) an activity to improve the energy efficiency
of the educational facility involved;
‘‘(5) an activity to address environmental haz-
ards at the educational facility involved, such as
poor ventilation, indoor air quality, or lighting;
‘‘(6) the provision of basic infrastructure that
facilitates educational technology, such as commu-
nications outlets, electrical systems, power outlets, or
a communication closet;
‘‘(7) the construction of new schools to meet
the needs imposed by enrollment growth;
‘‘(8) additional construction for existing schools
to meet needs imposed by overcrowding; and
‘‘(9) any other activity the Secretary determines
achieves the purpose of this title.
‘‘SEC. 12206. STATE GRANT WAIVERS.
‘‘(a) WAIVER FOR STATE ISSUANCE OF BOND.—
‘‘(1) IN GENERAL.—A State that issues a bond
described in section 12204(b)(1) with respect to a
local area may request that the Secretary waive the
limits described in section 12204(f)(3) for the local
area, in calculating the amount of assistance the
State may receive under section 12204(g). The State
may request the waiver only if no local entity is able,
for one of the reasons described in subparagraphs
(A) through (F) of paragraph (2), to issue bonds on
behalf of the local area. Under such a waiver, the
Secretary may permit the State to use amounts re-
ceived through a grant made under section
12202(a)(2) to pay for not more than 80 percent of
the interest costs applicable to the State bond with
respect to the local area.
‘‘(2) DEMONSTRATION BY STATE.—To be eligi-
ble to receive a waiver under this subsection, a State
shall demonstrate to the satisfaction of the Secretary
that—
‘‘(A) the local bond authority serving the
local area has reached a limit on its borrowing
authority as a result of a debt ceiling or prop-
erty tax cap;
‘‘(B) the local area has a high percentage
of low-income residents, or an unusually high
property tax rate;
‘‘(C) the demographic composition of the
local area will not support additional school
spending;
‘‘(D) the local bond authority has a history
of failed attempts to pass bond referenda;
‘‘(E) the local area contains a significant
percentage of Federally-owned land that is not
subject to local taxation; or
‘‘(F) for another reason, no local entity is
able to issue bonds on behalf of the local area.
‘‘(b) WAIVER FOR OTHER FINANCING SOURCES.—
‘‘(1) IN GENERAL.—A State may request that
the Secretary waive the use requirements of section
12204(b) for a local bond authority to permit the
State to provide assistance to the local bond author-
ity to finance construction or renovation by means
other than through the issuance of bonds.
‘‘(2) USE OF FUNDS.—A State that receives a
waiver granted under this subsection may provide
assistance to a local bond authority in accordance
with the criteria described in section 12204(f)(2) to
enable the local bond authority to repay the costs in-
curred by the local bond authority in financing an
activity described in section 12205. The local bond
authority shall be eligible to receive the amount of
such assistance that the Secretary estimates the
local bond authority would be eligible to receive
under section 12204(f)(3) if the construction or ren-
ovation were financed through the issuance of a
bond.
‘‘(3) MATCHING
REQUIREMENT.—The State
shall make available to the local bond authority (di-
rectly or through donations from public or private
entities) non-Federal contributions in an amount
equal to not less than $1 for every $1 of Federal
funds provided to the local bond authority through
the grant.
‘‘(c) WAIVER FOR OTHER USES.—
‘‘(1) IN GENERAL.—A State may request that
the Secretary waive the use requirements of section
12204(b) for a State to permit the State to carry
out activities that achieve the purpose of this title.
‘‘(2) DEMONSTRATION BY STATE.—To be eligi-
ble to receive a waiver under this subsection, a State
shall demonstrate to the satisfaction of the Secretary
that the use of assistance provided under the
waiver—
‘‘(A) will result in an equal or greater
amount of construction or renovation of edu-
cational facilities than the provision of assist-
ance to defray the interest costs applicable to a
bond for such construction or renovation; and
‘‘(B) will be used to fund activities that
are effective in carrying out the activities de-
scribed in section 12205, such as—
‘‘(i) the capitalization of a revolving
loan fund for such construction or renova-
tion;
‘‘(ii) the use of funds for reinsurance
or guarantees with respect to the financing
of such construction or renovation;
‘‘(iii) the creation of a mechanism to
leverage private sector resources for such
construction or renovation;
‘‘(iv) the capitalization of authorities
similar to State Infrastructure Banks to
leverage additional funds for such con-
struction or renovation; or
‘‘(v) any other activity the Secretary
determines achieves the purpose of this
title.
‘‘(d) LOCAL BOND AUTHORITY WAIVER.—
‘‘(1) IN GENERAL.—A local bond authority may
request the Secretary waive the use requirements of
section 12203(b) for a local head authority to permit
the authority to finance construction or renovation
of educational facilities by means other than through
use of bonds.
‘‘(2) DEMONSTRATION.—To be eligible to re-
ceive a waiver under this subsection, a local bond
authority shall demonstrate that the amounts made
available through a grant under the waiver will re-
sult in an equal or greater amount of construction
or renovation of educational facilities than the provi-
sion of assistance to defray the interest costs appli-
cable to a bond for such construction or renovation.
‘‘(e) REQUEST FOR WAIVER.—A State or local bond
authority that desires a waiver under this section shall
submit a waiver request to the Secretary that—
‘‘(1) identifies the type of waiver requested;
‘‘(2) with respect to a waiver described in sub-
section (a), (c), or (d), makes the demonstration de-
scribed in subsection (a)(2), (c)(2), or (d)(2), respec-
tively;
‘‘(3) describes the manner in which the waiver
will further the purpose of this title; and
‘‘(4) describes the use of assistance provided
under such waiver.
‘‘(f) ACTION BY SECRETARY.—The Secretary shall
make a determination with respect to a request submitted
under subsection (d) not later than 90 days after the date
on which such request was submitted.
‘‘(g) GENERAL REQUIREMENTS.—
‘‘(1) STATES.—In the case of a waiver request
submitted by a State under this section, the State
shall—
‘‘(A) provide all interested local edu-
cational agencies in the State with notice and a
reasonable opportunity to comment on the re-
quest;
‘‘(B) submit the comments to the Sec-
retary; and
‘‘(C) provide notice and information to the
public regarding the waiver request in the man-
ner that the applying State customarily pro-
vides similar notices and information to the
public.
‘‘(2) LOCAL BOND AUTHORITIES.—In the case
of a waiver request submitted by a local bond au-
thority under this section, the local bond authority
shall—
‘‘(A) provide the affected local educational
agency with notice and a reasonable oppor-
tunity to comment on the request;
‘‘(B) submit the comments to the Sec-
retary; and
‘‘(C) provide notice and information to the
public regarding the waiver request in the man-
ner that the applying local bond authority cus-
tomarily provides similar notices and informa-
tion to the public.
‘‘SEC. 12207. GENERAL PROVISIONS.
‘‘(a) FAILURE TO ISSUE BONDS.—
‘‘(1) STATES.—If a State that receives assist-
ance under this part fails to issue a bond for which
the assistance is provided, the amount of such as-
sistance shall be made available to the State as pro-
vided for under section 12204, during the first fiscal
year following the date of repayment.
‘‘(2) LOCAL
BOND
AUTHORITIES
AND
LOCAL
AREAS.—If a local bond authority that receives as-
sistance under this part fails to issue a bond, or a
local area that receives such assistance fails to be-
come the beneficiary of a bond, for which the assist-
ance is provided, the amount of such assistance—
‘‘(A) in the case of assistance received
under section 12202(a)(1), shall be repaid to
the Secretary and made available as provided
for under section 12203; and
‘‘(B) in the case of assistance received
under section 12202(a)(2), shall be repaid to
the State and made available as provided for
under section 12204.
‘‘(b) LIABILITY OF THE FEDERAL GOVERNMENT.—
The Secretary shall not be liable for any debt incurred
by a State or local bond authority for which assistance
is provided under this part. If such assistance is used by
a local educational agency to subsidize a debt other than
the issuance of a bond, the Secretary shall have no obliga-
tion to repay the lending institution to whom the debt is
owed if the local educational agency defaults.
‘‘SEC. 12208. FAIR WAGES.
‘‘The provisions of section 12107 shall apply with re-
spect to all laborers and mechanics employed by contrac-
tors or subcontractors in the performance of any contract
and subcontract for the repair, renovation, alteration, or
construction, including painting and decorating, of any
building or work that is financed in whole or in part using
assistance provided under this part.
‘‘SEC. 12209. REPORT.
‘‘From amounts reserved under section 12202(b)(3)
for each fiscal year the Secretary shall—
‘‘(1) collect such data as the Secretary deter-
mines necessary at the school, local, and State levels;
‘‘(2) conduct studies and evaluations, including
national studies and evaluations, in order to—
‘‘(A) monitor the progress of activities sup-
ported with funds provided under this part; and
‘‘(B) evaluate the state of United States
educational facilities; and
‘‘(3) report to the appropriate committees of
Congress regarding the findings of the studies and
evaluations described in paragraph (2).
‘‘SEC. 12210. FUNDING.
‘‘(a) IN GENERAL.—There are authorized to be ap-
propriated $5,000,000,000 for fiscal year 2000 to carry
out this part.
‘‘(b) ENTITLEMENT.—Subject to subsection (a), each
State or local bond authority awarded a grant under this
part shall be entitled to payments under the grant.
‘‘(c) AVAILABILITY.—Any amounts appropriated pur-
suant to the authority of subsection (a) shall remain avail-
able until expended.’’.
SEC. 102. CONFORMING AMENDMENTS.
(a) CROSS REFERENCES.—Part A of title XII of the
Elementary and Secondary Education Act of 1965 (as re-
designated by section 102(3)) is amended—
(1) in section 12102(a) (as redesignated by sec-
tion 102(2))—
(A) in paragraph (1)—
(i) by striking ‘‘12013’’ and inserting
‘‘12111’’;
(ii) by striking ‘‘12005’’ and inserting
‘‘12103’’; and
(iii) by striking ‘‘12007’’ and insert-
ing ‘‘12105’’; and
(B) in paragraph (2), by striking ‘‘12013’’
and inserting ‘‘12111’’; and
(2) in section 12110(3)(C) (as redesignated by
section 102(2)), by striking ‘‘12006’’ and inserting
‘‘12104’’.
(b) CONFORMING AMENDMENTS.—Part A of title XII
of the Elementary and Secondary Education Act of 1965
(as redesignated by section 202(3)) (20 U.S.C. 8501 et
seq.) is further amended—
(1) in section 12101 (as redesignated by section
102(2)), by striking ‘‘This title’’ and inserting ‘‘This
part’’; and
(2) in sections 12102(a)(2), 12102(b)(1),
12103(a), 
12103(b), 
12103(b)(2), 
12103(c),
12103(d), 
12104(a), 
12104(b)(2), 
12104(b)(3),
12104(b)(4), 12104(b)(6), 12104(b)(7), 12105(a),
12105(b), 
12106(a), 
12106(b), 
12106(c),
12106(c)(1), 
12106(c)(7), 
12106(e), 
12107,
12108(a)(1), 
12108(a)(2), 
12108(b)(1),
12108(b)(2), 
12108(b)(3), 
12108(b)(4),
12109(2)(A), and 12110 (as redesignated by section
102(2)), by striking ‘‘this title’’ each place it ap-
pears and inserting ‘‘this part’’.
TITLE II—SCHOLARSHIPS
SEC. 201. DEFINITIONS.
Section 6003 of the Elementary and Secondary Edu-
cation Act of 1965 is amended—
(1) in the section heading by striking ‘‘defini-
tion’’ and inserting ‘‘definitions’’;
(2) in the matter preceding subparagraph (A)—
(A) by striking ‘‘(1)’’, ‘‘(2)’’, and ‘‘(3)’’;
(B) by striking ‘‘title the term’’ and insert-
ing the following: ‘‘title—
‘‘(1) the term’’;
(3) by striking the period at the end; and
(4) by adding at the end the following:
‘‘(2) the term ‘poverty line’ means the poverty
line (as defined by the Office of Management and
Budget, and revised annually in accordance with sec-
tion 673(2) of the Community Services Block Grant
Act (42 U.S.C. 9902(2)) applicable to a family of
the size involved; and
‘‘(3) the term ‘voluntary public and private pa-
rental choice program’ means a program that meets
the requirements of section 6301(b)(9), is authorized
by State law, and includes 1 or more private schools
to allow low-income parents to choose the appro-
priate school for their children.’’.
SEC. 202. ALLOCATION TO LOCAL EDUCATIONAL AGEN-
CIES.
Section 6102(a) of the Elementary and Secondary
Education Act of 1965 is amended to read as follows:
‘‘(a) DISTRIBUTION RULE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), from the sums made available each year
to carry out this title, the State educational agency
shall distribute not less than 90 percent to local edu-
cational agencies within such State according to the
relative enrollments in public and private, nonprofit
schools within the school districts of such agencies,
adjusted, in accordance with criteria approved by the
Secretary, to provide higher per pupil allocations to
local educational agencies which have the greatest
numbers or percentages of children whose education
imposes a higher than average cost per child, such
as—
‘‘(A) children living in areas with high con-
centrations of low-income families;
‘‘(B) children from low-income families;
and
‘‘(C) children living in sparsely populated
areas.
‘‘(2) EXCEPTION.—A State that has enacted or
will enact a law that establishes a voluntary public
and private parental choice program and that com-
plies with the provisions of section 6301(b)(9) may
reserve an additional 15 percent from the sums
made available each year to carry out this title if the
additional amount reserved is used exclusively for
voluntary public and private parental choice pro-
grams.’’.
SEC. 203. USES OF FUNDS.
(a) STATE USES OF FUNDS.—Section 6201(a)(1) of
the Elementary and Secondary Education Act of 1965 is
amended—
(1) in subparagraph (C), by striking ‘‘and’’
after the semicolon; and
(2) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) establishing voluntary public and pri-
vate parental choice programs in accordance
with section 6301(b)(9); and’’.
(b) LOCAL USES OF FUNDS.—Section 6301(b) of the
Elementary and Secondary Education Act of 1965 is
amended—
(1) in paragraph (8), by striking ‘‘and’’ after
the semicolon;
(2) in paragraph (9), by striking the period and
inserting ‘‘; and’’; and
(3) by inserting after paragraph (9) the follow-
ing:
‘‘(10) voluntary public and private parental
choice programs that—
‘‘(A) are located in an area that has the
greatest numbers or percentages of children—
‘‘(i) living in areas with a high con-
centration of low-income families;
‘‘(ii) from low-income families; or
‘‘(iii) living in sparsely populated
areas;
‘‘(B) ensure that participation in such a
voluntary public and private parental choice
program is limited to families whose family in-
come does not exceed 185 percent of the pov-
erty line;
‘‘(C) ensure that—
‘‘(i) the maximum amount of a vol-
untary public and private parental choice
scholarship does not exceed the per pupil
expenditure of the local educational agency
in which an applicant for a voluntary pub-
lic and private parental choice scholarship
resides; and
‘‘(ii) the minimum amount of a vol-
untary public and private parental choice
scholarship is not less than 60 percent of
the per pupil expenditure of the local edu-
cational agency in which an applicant for
a voluntary public and private parental
choice scholarship resides or the cost of
tuition at a private school, whichever is
less;
‘‘(D) ensure that for a private school that
chooses to participate in a voluntary public and
private parental choice program—
‘‘(i) such a school is permitted to im-
pose the same academic requirements for
all students, including students selected for
a scholarship as provided under this para-
graph;
‘‘(ii) receipt of funds under this title
is not conditioned with requirements or
regulations that preclude the use of such
funds for sectarian educational purposes or
require removal of religious art, icons,
scripture, or other symbols; and
‘‘(iii) such a school is in compliance
with all State requirements applicable to
the operation of a private school that are
in effect in the year preceding the date of
the enactment of the Renewing America’s
Schools Act;
‘‘(E) may allow State, local, and private
funds to be used for voluntary public and pri-
vate parental choice programs; and
‘‘(F) ensure priority for students who were
enrolled in a public school in the school year
preceding the school year in which a voluntary
public and private parental choice school begins
operation.’’.
SEC. 204. EVALUATION.
Part D of title VI of the Elementary and Secondary
Education Act of 1965 is amended—
(1) by adding at the end of section 6402 the
following new subsection:
‘‘(j) APPLICATION.—This section shall not apply to
funds that a State or local educational agency uses to es-
tablish a voluntary public and private parental choice pro-
gram in accordance with section 6301(b)(9).’’; and
(2) by adding at the end of such part the fol-
lowing new sections:
‘‘SEC. 6404. EVALUATION.
‘‘(a) ANNUAL EVALUATION.—
‘‘(1) CONTRACT.—The Comptroller General of
the United States shall enter into a contract, with
an evaluating agency that has demonstrated experi-
ence in conducting evaluations, for the conduct of an
ongoing rigorous evaluation of the programs estab-
lished under section 6301(b)(9).
‘‘(2) ANNUAL
EVALUATION
REQUIREMENT.—
The contract described in paragraph (1) shall re-
quire the evaluating agency entering into such con-
tract to evaluate annually each program established
under section 6301(b)(9) in accordance with the
evaluation criteria described in subsection (b).
‘‘(3) TRANSMISSION.—The contract described
in paragraph (1) shall require the evaluating agency
entering into such contract to transmit to the Comp-
troller General of the United States the findings of
each annual evaluation under paragraph (1).
‘‘(b) EVALUATION CRITERIA.—The Comptroller Gen-
eral of the United States, in consultation with the Sec-
retary, shall establish minimum criteria for evaluating
each program established under section 6301(b)(9). Such
criteria shall provide for—
‘‘(1) a description of the implementation of
each program established under section 6301(b)(9)
and the program’s effects on all participants,
schools, and communities in the program area, with
particular attention given to the effect of parent par-
ticipation in the life of the school and the level of
parental satisfaction with the program; and
‘‘(2) a comparison of the educational achieve-
ment of all students in the program area, including
a comparison between—
‘‘(A) students receiving a voluntary public
and private parental choice scholarships under
section 6301(b)(9); and
‘‘(B) students not receiving a voluntary
public and private parental choice scholarships
under such section.
‘‘(c) EVALUATION FUNDS.—Pursuant to the author-
ity provided under section 14701, the Secretary shall re-
serve not more than 0.50 percent of the amount of funds
made available under section 6002 to carry out this sec-
tion.
‘‘SEC. 6405. APPLICABILITY.
‘‘(a) NOT SCHOOL AID.—Subject to subsection (b),
funds used under this title to establish a voluntary public
and private parental choice program shall be considered
assistance to the student and shall not be considered as
assistance to any school that chooses to participate in such
program.
‘‘(b) NO FEDERAL CONTROL.—The Secretary is not
permitted to exercise any direction, supervision, or control
over curricula, program of instruction, administration, or
personnel of any school that chooses to participate in a
voluntary public and private choice program established
under 6309(b)(9).’’.
TITLE III—A+ ACCOUNTS FOR
PUBLIC AND PRIVATE SCHOOLS
SEC. 301. SHORT TITLE.
This title may be cited as the ‘‘A+ Accounts for Pub-
lic and Private Schools Act’’.
SEC. 302. MODIFICATIONS TO EDUCATION INDIVIDUAL RE-
TIREMENT ACCOUNTS.
(a) TAX-FREE EXPENDITURES
FOR ELEMENTARY
AND SECONDARY SCHOOL EXPENSES.—
(1) IN GENERAL.—Section 530(b)(2) of the In-
ternal Revenue Code of 1986 is amended to read as
follows:
‘‘(2) QUALIFIED EDUCATION EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
education expenses’ means—
‘‘(i) qualified higher education ex-
penses (as defined in section 529(e)(3)),
and
‘‘(ii) qualified elementary and second-
ary education expenses (as defined in para-
graph (4)).
Such expenses shall be reduced as provided in
section 25A(g)(2) but only with respect to
amounts in the account which are attributable
to contributions for any taxable year ending be-
fore January 1, 2004, and earnings on such
contributions.
‘‘(B) QUALIFIED
STATE
TUITION
PRO-
GRAMS.—Such term shall include amounts paid
or incurred to purchase tuition credits or cer-
tificates, or to make contributions to an ac-
count, under a qualified State tuition program
(as defined in section 529(b)) for the benefit of
the beneficiary of the account.’’.
(2) QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION
EXPENSES.—Section 530(b) of such
Code is amended by adding at the end the following
new paragraph:
‘‘(4) QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION EXPENSES.—
‘‘(A) IN GENERAL.—The term ‘qualified el-
ementary and secondary education expenses’
means tuition, fees, tutoring, special needs serv-
ices, books, supplies, computer equipment (in-
cluding related software and services) and other
equipment, transportation, and supplementary
expenses required for the enrollment or attend-
ance of the designated beneficiary of the trust
at a public, private, or religious school.
‘‘(B) 
SPECIAL
RULE
FOR
HOMESCHOOLING.—Such term shall include ex-
penses described in subparagraph (A) required
for education provided for homeschooling if the
requirements of any applicable State or local
law are met with respect to such education.
‘‘(C) SCHOOL.—The term ‘school’ means
any school which provides elementary education
or secondary education (through grade 12), as
determined under State law.’’.
(3) CONFORMING
AMENDMENTS.—Subsections
(b)(1) and (d)(2) of section 530 of such Code are
each amended by striking ‘‘higher’’ each place it ap-
pears in the text and heading thereof.
(b) TEMPORARY INCREASE IN MAXIMUM ANNUAL
CONTRIBUTIONS.—
(1) IN GENERAL.—Section 530(b)(1)(A)(iii) of
such Code is amended by striking ‘‘$500’’ and in-
serting ‘‘the contribution limit for such taxable
year’’.
(2) CONTRIBUTION LIMIT.—Section 530(b) of
such Code, amended by subsection (a)(2) of this sec-
tion, is amended by adding at the end the following
new paragraph:
‘‘(5) CONTRIBUTION
LIMIT.—The term ‘con-
tribution limit’ means $2,500 ($500 in the case of
any taxable year ending after December 31, 2003).’’.
(3) 
CONFORMING
AMENDMENT.—Section
4973(e)(1)(A) of such Code is amended by striking
‘‘$500’’ and inserting ‘‘the contribution limit (as de-
fined in section 530(b)(4)) for such taxable year’’.
(c) WAIVER OF AGE LIMITATIONS FOR CHILDREN
WITH SPECIAL NEEDS.—Paragraph (1) of section 530(b)
of such Code is amended by adding at the end the follow-
ing flush sentence:
‘‘The age limitations in the preceding sentence shall
not apply to any designated beneficiary with special
needs (as determined under regulations prescribed
by the Secretary).’’.
(d) CORPORATIONS PERMITTED TO CONTRIBUTE TO
ACCOUNTS.—Paragraph (1) of section 530(c) of such
Code is amended by striking ‘‘The maximum amount
which a contributor’’ and inserting ‘‘In the case of a con-
tributor who is an individual, the maximum amount the
contributor’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
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