481
on the effective use of books with young children at 
different stages of development; and 
(6) be a training resource for eligible providers 
that want to offer parent workshops on developing 
reading readiness. 
(c) DISCOUNTS.—
(1) IN GENERAL.—Federal funds made avail-
able under this chapter for the purchase of books 
may only be used to purchase books on the same 
terms as are customarily available in the book indus-
try to entities carrying out nonprofit bulk book pur-
chase and distribution programs. 
(2) TERMS.—An entity offering books for pur-
chase under this chapter shall be presumed to have 
met the requirements of paragraph (1), absent con-
trary evidence, if the terms include a discount of 43 
percent off the catalogue price of the books, with no 
additional charge for shipping and handling of the 
books. 
(d) ADMINISTRATION.—The child care resource and 
referral agency may not use more than 6 percent of the 
funds made available through the contract for administra-
tive costs.
482
SEC. 3417. REPORT TO CONGRESS. 
Not later than 2 years of the date of enactment of 
this chapter, the Secretary shall prepare and submit to 
Congress a report on the implementation of the activities 
carried out under this chapter. 
SEC. 3418. SPECIAL POSTAGE STAMPS FOR CHILD LIT-
ERACY. 
Chapter 4 of title 39, United States Code is amended 
by adding at the end the following: 
‘‘§ 417. Special postage stamps for child literacy 
‘‘(a) In order to afford the public a convenient way 
to contribute to funding for child literacy, the Postal Serv-
ice shall establish a special rate of postage for first-class 
mail under this section. The stamps that bear the special 
rate of postage shall promote childhood literacy and shall, 
to the extent practicable, contain an image relating to a 
character in a children’s book or cartoon. 
‘‘(b)(1) The rate of postage established under this 
section—
‘‘(A) shall be equal to the regular first-class 
rate of postage, plus a differential of not to exceed 
25 percent; 
‘‘(B) shall be set by the Governors in accord-
ance with such procedures as the Governors shall by 
regulation prescribe (in lieu of the procedures de-
scribed in chapter 36); and
483
‘‘(C) shall be offered as an alternative to the 
regular first-class rate of postage. 
‘‘(2) The use of the special rate of postage established 
under this section shall be voluntary on the part of postal 
patrons. 
‘‘(c)(1) Of the amounts becoming available for child 
literacy pursuant to this section, the Postal Service shall 
pay 100 percent to the Department of Health and Human 
Services. 
‘‘(2) Payments made under this subsection to the De-
partment shall be made under such arrangements as the 
Postal Service shall by mutual agreement with such De-
partment establish in order to carry out the objectives of 
this section, except that, under those arrangements, pay-
ments to such agency shall be made at least twice a year. 
‘‘(3) In this section, the term ‘amounts becoming 
available for child literacy pursuant to this section’ 
means—
‘‘(A) the total amounts received by the Postal 
Service that the Postal Service would not have re-
ceived but for the enactment of this section; reduced 
by 
‘‘(B) an amount sufficient to cover reasonable 
costs incurred by the Postal Service in carrying out 
this section, including costs attributable to the print-
484
ing, sale, and distribution of stamps under this sec-
tion, 
as determined by the Postal Service under regulations that 
the Postal Service shall prescribe. 
‘‘(d) It is the sense of Congress that nothing in this 
section should—
‘‘(1) directly or indirectly cause a net decrease 
in total funds received by the Department of Health 
and Human Services, or any other agency of the 
Government (or any component or program of the 
Government), below the level that would otherwise 
have been received but for the enactment of this sec-
tion; or 
‘‘(2) affect regular first-class rates of postage 
or any other regular rates of postage. 
‘‘(e) Special postage stamps made available under 
this section shall be made available to the public beginning 
on such date as the Postal Service shall by regulation pre-
scribe, but in no event later than 12 months after the date 
of enactment of this section. 
‘‘(f) The Postmaster General shall include in each re-
port provided under section 2402, with respect to any pe-
riod during any portion of which this section is in effect, 
information concerning the operation of this section, ex-
485
cept that, at a minimum, each report shall include infor-
mation on—
‘‘(1) the total amounts described in subsection 
(c)(3)(A) that were received by the Postal Service 
during the period covered by such report; and 
‘‘(2) of the amounts described in paragraph (1), 
how much (in the aggregate and by category) was 
required for the purposes described in subsection 
(c)(3)(B). 
‘‘(g) This section shall cease to be effective at the 
end of the 2-year period beginning on the date on which 
special postage stamps made available under this section 
are first made available to the public.’’. 
SEC. 3419. AUTHORIZATION OF APPROPRIATIONS. 
There is authorized to be appropriated to carry out 
this chapter $50,000,000 for each of fiscal years 2004 
through 2008.
486
CHAPTER 3—QUALITY TEACHING AND 
LEADERSHIP 
Subchapter A—Amendment to Title II of the 
Elementary and Secondary Education Act 
of 1965
SEC. 3421. AMENDMENTS TO TITLE II. 
Title II of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 6601 et seq.) is amended by add-
ing at the end the following: 
‘‘PART E—CLASS SIZE REDUCTION 
‘‘SEC. 2501. GRANT PROGRAM. 
‘‘(a) PURPOSES.—The purposes of this section are—
‘‘(1) to reduce class size through the use of 
highly qualified teachers; 
‘‘(2) to assist States and local educational agen-
cies in recruiting, hiring, and training 100,000 
teachers in order to reduce class sizes nationally, in 
kindergarten through grade 3, to an average of 18 
students per regular classroom; and 
‘‘(3) to improve teaching in those grades so 
that all students can learn to read independently 
and well by the end of the 3d grade. 
‘‘(b) ALLOTMENT TO STATES.—
‘‘(1) RESERVATION.—From the amount made 
available to carry out this part for a fiscal year, the
487
Secretary shall reserve not more than 1 percent for 
the Secretary of the Interior (on behalf of the Bu-
reau of Indian Affairs) and the outlying areas for 
activities carried out in accordance with this section. 
‘‘(2) STATE ALLOTMENTS.—
‘‘(A) HOLD HARMLESS.—
‘‘(i) IN
GENERAL.—Subject to sub-
paragraph (B) and clause (ii), from the 
amount made available to carry out this 
part for a fiscal year and not reserved 
under paragraph (1), the Secretary shall 
allot to each State—
‘‘(I) for the first fiscal year for 
which allotments are made under this 
subparagraph, an amount equal to the 
amount that such State received 
under section 306 of the Department 
of 
Education 
Appropriations 
Act, 
2001; and 
‘‘(II) for each subsequent fiscal 
year for which allotments are made 
under this subparagraph, an amount 
equal to the amount that such State 
received for the preceding fiscal year 
under this section.
488
‘‘(ii) RATABLE
REDUCTION.—If the 
amount made available to carry out this 
part for a fiscal year and not reserved 
under paragraph (1) is insufficient to pay 
the full amounts that all States are eligible 
to receive under clause (i) for such fiscal 
year, the Secretary shall ratably reduce 
such amounts for such fiscal year. 
‘‘(B) 
ALLOTMENT
OF
ADDITIONAL 
FUNDS.—
‘‘(i) IN GENERAL.—Subject to clause 
(ii), for any fiscal year for which the 
amount made available to carry out this 
part and not reserved under paragraph (1) 
exceeds the amount needed to pay the full 
amounts that all States are eligible to re-
ceive under subparagraph (A) for such fis-
cal year, the Secretary shall allot to each 
State the percentage of the excess amount 
that is the greater of—
‘‘(I) the percentage that such 
State received for the preceding fiscal 
year of the total amount made avail-
able to the States under section 1122; 
or
489
‘‘(II)(aa) for the first of the fis-
cal years for which allotments are 
made under this subparagraph (re-
ferred to individually in this subclause 
as an ‘allotment year’), the percentage 
that such State received for the pre-
ceding fiscal year of the total amount 
made available to the States under 
section 5111(a); or 
‘‘(bb) for each subsequent allot-
ment year, the percentage that such 
State received for the preceding allot-
ment year of the total amount made 
available to the States under this sec-
tion. 
‘‘(ii) RATABLE REDUCTIONS.—If the 
excess amount for a fiscal year is insuffi-
cient to pay the full amounts that all 
States are eligible to receive under clause 
(i) for such fiscal year, the Secretary shall 
ratably reduce such amounts for such fis-
cal year. 
‘‘(C) DEFINITION.—In this paragraph, the 
term ‘State’ does not include an outlying area.
490
‘‘(c) ALLOCATION TO LOCAL EDUCATIONAL AGEN-
CIES.—
‘‘(1) ALLOCATION.—Each State that receives 
funds under this section shall allocate 100 percent 
of those funds to local educational agencies, of 
which—
‘‘(A) 80 percent shall be allocated to those 
local educational agencies in proportion to the 
number of children, age 5 through 17, 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))) applica-
ble to a family of the size involved, who reside 
in the school district served by that local edu-
cational agency for the most recent fiscal year 
for which satisfactory data are available, com-
pared to the number of those children who re-
side in the school districts served by all the 
local educational agencies in the State for that 
fiscal year; and 
‘‘(B) 20 percent shall be allocated to those 
local educational agencies in accordance with 
the relative enrollments of children, age 5
491
through 17, in public and private nonprofit ele-
mentary schools and secondary schools within 
the areas served by those agencies. 
‘‘(2) EXCEPTION.—Notwithstanding paragraph 
(1) and subsection (d)(2)(B), if the award to a local 
educational agency under this section is less than 
the starting salary for a new highly qualified teacher 
for a school served by that agency, that agency may 
use funds made available under this section to—
‘‘(A) help pay the salary of a full- or part-
time highly qualified teacher hired to reduce 
class size, which may be done in combination 
with the expenditure of other Federal, State, or 
local funds; or 
‘‘(B) pay for activities described in sub-
section (d)(2)(A)(iii) that may be related to 
teaching in smaller classes. 
‘‘(d) USE OF FUNDS.—
‘‘(1) MANDATORY
USES.—Each local edu-
cational agency that receives funds under this sec-
tion shall use those funds to carry out effective ap-
proaches to reducing class size through use of highly 
qualified teachers to improve educational achieve-
ment for both regular and special needs children, 
with particular consideration given to reducing class
492
size in the early elementary grades for which some 
research has shown class size reduction is most ef-
fective. 
‘‘(2) PERMISSIBLE USES.—
‘‘(A) IN GENERAL.—Each such local edu-
cational agency may use funds made available 
under this section for—
‘‘(i) recruiting (including through the 
use of signing bonuses and other financial 
incentives), hiring, and training highly 
qualified regular and special education 
teachers (which may include hiring special 
education teachers to team-teach with reg-
ular teachers in classrooms that contain 
both children with disabilities and non-
disabled children) and teachers of special 
needs children; 
‘‘(ii) testing new teachers for aca-
demic content knowledge, and to meet 
State certification or licensing require-
ments that are consistent with title II of 
the Higher Education Act of 1965; and 
‘‘(iii) providing professional develop-
ment (which may include such activities as 
promoting retention and mentoring) for
493
teachers, including special education teach-
ers and teachers of special needs children, 
in order to meet the goal of ensuring that 
all teachers have the general knowledge, 
teaching skills, and subject matter knowl-
edge necessary to teach effectively in the 
content areas in which the teachers teach, 
consistent with title II of the Higher Edu-
cation Act of 1965. 
‘‘(B) LIMITATION ON TESTING AND PRO-
FESSIONAL DEVELOPMENT.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a local educational 
agency may use not more than a total of 
25 percent of the funds received by the 
agency under this section for activities de-
scribed in clauses (ii) and (iii) of subpara-
graph (A). 
‘‘(ii) SPECIAL
RULE.—A local edu-
cational agency may use more than 25 per-
cent of the funds the agency receives under 
this section for activities described in sub-
paragraph (A)(iii) for the purpose of help-
ing teachers who are not yet highly quali-
fied in attaining full qualification if 10 per-
494
cent or more of the elementary school 
classes in a school are taught by individ-
uals who are not highly qualified teachers 
or the State educational agency has waived 
State certification or licensing require-
ments for 10 percent or more of such 
teachers. 
‘‘(C) USE OF FUNDS BY AGENCIES THAT 
HAVE REDUCED CLASS SIZE.—Notwithstanding 
subparagraph (B), a local educational agency 
that has already reduced class size in the early 
elementary grades to 18 or fewer children (or 
has already reduced class size to a State or 
local class size reduction goal that was in effect 
on November 28, 1999, if that goal is 20 or 
fewer children) may use funds received under 
this section—
‘‘(i) to make further class size reduc-
tions in kindergarten through 3d grade; 
‘‘(ii) to reduce class size in other 
grades; or 
‘‘(iii) to carry out activities to improve 
teacher quality, including professional de-
velopment.
495
‘‘(3) SUPPLEMENT, 
NOT
SUPPLANT.—Each 
such agency shall use funds made available under 
this section only to supplement, and not to supplant, 
State and local funds that, in the absence of funds 
made available under this section, would otherwise 
be expended for activities described in this section. 
‘‘(4) LIMITATION ON USE FOR SALARIES AND 
BENEFITS.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), no funds made available 
under this section may be used to increase the 
salaries of, or provide benefits (other than par-
ticipation in professional development and en-
richment programs) to, teachers who are not 
hired under this section. 
‘‘(B) EXCEPTION.—Funds made available 
under this section may be used to pay the sala-
ries of teachers hired under section 306 of the 
Department of Education Appropriations Act, 
2001 or section 2123(a)(2). 
‘‘(e) REPORTS.—
‘‘(1) STATE ACTIVITIES.—Each State receiving 
funds under this section shall prepare and submit to 
the Secretary a biennial report on activities carried 
out in the State under this section that provides the
496
information described in section 5122(b) with re-
spect to the activities. 
‘‘(2) PROGRESS CONCERNING CLASS SIZE AND 
QUALIFIED TEACHERS.—Each State and local edu-
cational agency receiving funds under this section 
shall annually report to parents and the public, in 
numeric form as compared to the previous year, 
on—
‘‘(A) the agency’s progress in reducing 
class size, and increasing the percentage of 
classes in core academic areas taught by highly 
qualified teachers; and 
‘‘(B) the impact that hiring additional 
highly qualified teachers and reducing class 
size, has had, if any, on increasing student aca-
demic achievement. 
‘‘(f) PRIVATE SCHOOLS.—If a local educational agen-
cy uses funds made available under this section for profes-
sional development activities, the agency shall ensure the 
equitable participation of private nonprofit elementary 
schools and secondary schools in such activities in accord-
ance with section 5142. Section 5142 shall not apply to 
other activities carried out under this section. 
‘‘(g) ADMINISTRATIVE
EXPENSES.—A local edu-
cational agency that receives funds under this section may
497
use not more than 3 percent of such funds for local admin-
istrative costs. 
‘‘(h) APPLICATION.—Each local educational agency 
that desires to receive funds under this section shall sub-
mit an application to the State educational agency at such 
time, in such manner, and containing such information as 
the State educational agency may require. Each such ap-
plication shall include a description of the agency’s pro-
gram to reduce class size by hiring additional highly quali-
fied teachers. 
‘‘(i) 
CERTIFICATION, 
LICENSING, 
AND
COM-
PETENCY.—No funds made available under this section 
may be used to pay the salary of any teacher unless such 
teacher is highly qualified. 
‘‘(j) DEFINITION.—In this section, the term ‘cer-
tified’ includes certification through State or local alter-
native routes. 
‘‘SEC. 2502. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this 
part, 
$2,537,000,000 
for 
fiscal 
year 
2004, 
$3,452,000,000 for fiscal year 2005, $4,336,000,000 for 
fiscal year 2006, and $5,281,000,000 for each of fiscal 
years 2007 and 2008.