H. R. 1—79
participation under this part and to explain the requirements
of this part, and the right of the parents to be involved;
‘‘(2) offer a flexible number of meetings, such as meetings
in the morning or evening, and may provide, with funds pro-
vided under this part, transportation, child care, or home visits,
as such services relate to parental involvement;
‘‘(3) involve parents, in an organized, ongoing, and timely
way, in the planning, review, and improvement of programs
under this part, including the planning, review, and improve-
ment of the school parental involvement policy and the joint
development of the schoolwide program plan under section
1114(b)(2), except that if a school has in place a process for
involving parents in the joint planning and design of the school’s
programs, the school may use that process, if such process
includes an adequate representation of parents of participating
children;
‘‘(4) provide parents of participating children—
‘‘(A) timely information about programs under this
part;
‘‘(B) a description and explanation of the curriculum
in use at the school, the forms of academic assessment
used to measure student progress, and the proficiency
levels students are expected to meet; and
‘‘(C) if requested by parents, opportunities for regular
meetings to formulate suggestions and to participate, as
appropriate, in decisions relating to the education of their
children, and respond to any such suggestions as soon
as practicably possible; and
‘‘(5) if the schoolwide program plan under section 1114(b)(2)
is not satisfactory to the parents of participating children,
submit any parent comments on the plan when the school
makes the plan available to the local educational agency.
‘‘(d) SHARED RESPONSIBILITIES FOR HIGH STUDENT ACADEMIC
ACHIEVEMENT.—As a component of the school-level parental involve-
ment policy developed under subsection (b), each school served
under this part shall jointly develop with parents for all children
served under this part a school-parent compact that outlines how
parents, the entire school staff, and students will share the responsi-
bility for improved student academic achievement and the means
by which the school and parents will build and develop a partner-
ship to help children achieve the State’s high standards. Such
compact shall—
‘‘(1) describe the school’s responsibility to provide high-
quality curriculum and instruction in a supportive and effective
learning environment that enables the children served under
this part to meet the State’s student academic achievement
standards, and the ways in which each parent will be respon-
sible for supporting their children’s learning, such as monitoring
attendance, homework completion, and television watching; vol-
unteering in their child’s classroom; and participating, as appro-
priate, in decisions relating to the education of their children
and positive use of extracurricular time; and
‘‘(2) address the importance of communication between
teachers and parents on an ongoing basis through, at a
minimum—
H. R. 1—80
‘‘(A) parent-teacher conferences in elementary schools,
at least annually, during which the compact shall be dis-
cussed as the compact relates to the individual child’s
achievement;
‘‘(B) frequent reports to parents on their children’s
progress; and
‘‘(C) reasonable access to staff, opportunities to volun-
teer and participate in their child’s class, and observation
of classroom activities.
‘‘(e) BUILDING CAPACITY FOR INVOLVEMENT.—To ensure effective
involvement of parents and to support a partnership among the
school involved, parents, and the community to improve student
academic achievement, each school and local educational agency
assisted under this part—
‘‘(1) shall provide assistance to parents of children served
by the school or local educational agency, as appropriate, in
understanding such topics as the State’s academic content
standards and State student academic achievement standards,
State and local academic assessments, the requirements of
this part, and how to monitor a child’s progress and work
with educators to improve the achievement of their children;
‘‘(2) shall provide materials and training to help parents
to work with their children to improve their children’s achieve-
ment, such as literacy training and using technology, as appro-
priate, to foster parental involvement;
‘‘(3) shall educate teachers, pupil services personnel, prin-
cipals, and other staff, with the assistance of parents, in the
value and utility of contributions of parents, and in how to
reach out to, communicate with, and work with parents as
equal partners, implement and coordinate parent programs,
and build ties between parents and the school;
‘‘(4) shall, to the extent feasible and appropriate, coordinate
and integrate parent involvement programs and activities with
Head Start, Reading First, Early Reading First, Even Start,
the Home Instruction Programs for Preschool Youngsters, the
Parents as Teachers Program, and public preschool and other
programs, and conduct other activities, such as parent resource
centers, that encourage and support parents in more fully
participating in the education of their children;
‘‘(5) shall ensure that information related to school and
parent programs, meetings, and other activities is sent to the
parents of participating children in a format and, to the extent
practicable, in a language the parents can understand;
‘‘(6) may involve parents in the development of training
for teachers, principals, and other educators to improve the
effectiveness of such training;
‘‘(7) may provide necessary literacy training from funds
received under this part if the local educational agency has
exhausted all other reasonably available sources of funding
for such training;
‘‘(8) may pay reasonable and necessary expenses associated
with local parental involvement activities, including transpor-
tation and child care costs, to enable parents to participate
in school-related meetings and training sessions;
‘‘(9) may train parents to enhance the involvement of other
parents;
H. R. 1—81
‘‘(10) may arrange school meetings at a variety of times,
or conduct in-home conferences between teachers or other edu-
cators, who work directly with participating children, with par-
ents who are unable to attend such conferences at school,
in order to maximize parental involvement and participation;
‘‘(11) may adopt and implement model approaches to
improving parental involvement;
‘‘(12) may establish a districtwide parent advisory council
to provide advice on all matters related to parental involvement
in programs supported under this section;
‘‘(13) may develop appropriate roles for community-based
organizations and businesses in parent involvement activities;
and
‘‘(14) shall provide such other reasonable support for
parental involvement activities under this section as parents
may request.
‘‘(f) ACCESSIBILITY.—In carrying out the parental involvement
requirements of this part, local educational agencies and schools,
to the extent practicable, shall provide full opportunities for the
participation of parents with limited English proficiency, parents
with disabilities, and parents of migratory children, including pro-
viding information and school reports required under section 1111
in a format and, to the extent practicable, in a language such
parents understand.
‘‘(g) INFORMATION FROM PARENTAL INFORMATION AND RESOURCE
CENTERS.—In a State where a parental information and resource
center is established to provide training, information, and support
to parents and individuals who work with local parents, local edu-
cational agencies, and schools receiving assistance under this part,
each local educational agency or school that receives assistance
under this part and is located in the State shall assist parents
and parental organizations by informing such parents and organiza-
tions of the existence and purpose of such centers.
‘‘(h) REVIEW.—The State educational agency shall review the
local educational agency’s parental involvement policies and prac-
tices to determine if the policies and practices meet the require-
ments of this section.
‘‘SEC. 1119. QUALIFICATIONS FOR TEACHERS AND PARAPROFES-
SIONALS.
‘‘(a) TEACHER QUALIFICATIONS AND MEASURABLE OBJECTIVES.—
‘‘(1) IN GENERAL.—Beginning with the first day of the first
school year after the date of enactment of the No Child Left
Behind Act of 2001, each local educational agency receiving
assistance under this part shall ensure that all teachers hired
after such day and teaching in a program supported with
funds under this part are highly qualified.
‘‘(2) STATE PLAN.—As part of the plan described in section
1111, each State educational agency receiving assistance under
this part shall develop a plan to ensure that all teachers
teaching in core academic subjects within the State are highly
qualified not later than the end of the 2005–2006 school year.
Such plan shall establish annual measurable objectives for
each local educational agency and school that, at a minimum—
‘‘(A) shall include an annual increase in the percentage
of highly qualified teachers at each local educational agency
and school, to ensure that all teachers teaching in core
H. R. 1—82
academic subjects in each public elementary school and
secondary school are highly qualified not later than the
end of the 2005–2006 school year;
‘‘(B) shall include an annual increase in the percentage
of teachers who are receiving high-quality professional
development to enable such teachers to become highly
qualified and successful classroom teachers; and
‘‘(C) may include such other measures as the State
educational agency determines to be appropriate to increase
teacher qualifications.
‘‘(3) LOCAL PLAN.—As part of the plan described in section
1112, each local educational agency receiving assistance under
this part shall develop a plan to ensure that all teachers
teaching within the school district served by the local edu-
cational agency are highly qualified not later than the end
of the 2005–2006 school year.
‘‘(b) REPORTS.—
‘‘(1) ANNUAL STATE AND LOCAL REPORTS.—
‘‘(A) LOCAL REPORTS.—Each State educational agency
described in subsection (a)(2) shall require each local edu-
cational agency receiving funds under this part to publicly
report, each year, beginning with the 2002–2003 school
year, the annual progress of the local educational agency
as a whole and of each of the schools served by the agency,
in meeting the measurable objectives described in sub-
section (a)(2).
‘‘(B) STATE REPORTS.—Each State educational agency
receiving assistance under this part shall prepare and
submit each year, beginning with the 2002–2003 school
year, a report to the Secretary, describing the State edu-
cational agency’s progress in meeting the measurable objec-
tives described in subsection (a)(2).
‘‘(C) INFORMATION FROM OTHER REPORTS.—A State edu-
cational agency or local educational agency may submit
information from the reports described in section 1111(h)
for the purposes of this subsection, if such report is modi-
fied, as may be necessary, to contain the information
required by this subsection, and may submit such informa-
tion as a part of the reports required under section 1111(h).
‘‘(2) ANNUAL
REPORTS
BY
THE
SECRETARY.—Each year,
beginning with the 2002–2003 school year, the Secretary shall
publicly report the annual progress of State educational agen-
cies, local educational agencies, and schools, in meeting the
measurable objectives described in subsection (a)(2).
‘‘(c) NEW PARAPROFESSIONALS.—
‘‘(1) IN GENERAL.—Each local educational agency receiving
assistance under this part shall ensure that all paraprofes-
sionals hired after the date of enactment of the No Child
Left Behind Act of 2001 and working in a program supported
with funds under this part shall have—
‘‘(A) completed at least 2 years of study at an institu-
tion of higher education;
‘‘(B) obtained an associate’s (or higher) degree; or
‘‘(C) met a rigorous standard of quality and can dem-
onstrate, through a formal State or local academic
assessment—
H. R. 1—83
‘‘(i) knowledge of, and the ability to assist in
instructing, reading, writing, and mathematics; or
‘‘(ii) knowledge of, and the ability to assist in
instructing, reading readiness, writing readiness, and
mathematics readiness, as appropriate.
‘‘(2) CLARIFICATION.—The receipt of a secondary school
diploma (or its recognized equivalent) shall be necessary but
not sufficient to satisfy the requirements of paragraph (1)(C).
‘‘(d) EXISTING
PARAPROFESSIONALS.—Each local educational
agency receiving assistance under this part shall ensure that all
paraprofessionals hired before the date of enactment of the No
Child Left Behind Act of 2001, and working in a program supported
with funds under this part shall, not later than 4 years after
the date of enactment satisfy the requirements of subsection (c).
‘‘(e) EXCEPTIONS
FOR TRANSLATION
AND PARENTAL INVOLVE-
MENT ACTIVITIES.—Subsections (c) and (d) shall not apply to a
paraprofessional—
‘‘(1) who is proficient in English and a language other
than English and who provides services primarily to enhance
the participation of children in programs under this part by
acting as a translator; or
‘‘(2) whose duties consist solely of conducting parental
involvement activities consistent with section 1118.
‘‘(f) GENERAL REQUIREMENT
FOR ALL PARAPROFESSIONALS.—
Each local educational agency receiving assistance under this part
shall ensure that all paraprofessionals working in a program sup-
ported with funds under this part, regardless of the paraprofes-
sionals’ hiring date, have earned a secondary school diploma or
its recognized equivalent.
‘‘(g) DUTIES OF PARAPROFESSIONALS.—
‘‘(1) IN GENERAL.—Each local educational agency receiving
assistance under this part shall ensure that a paraprofessional
working in a program supported with funds under this part
is not assigned a duty inconsistent with this subsection.
‘‘(2) 
RESPONSIBILITIES
PARAPROFESSIONALS
MAY
BE
ASSIGNED.—A paraprofessional described in paragraph (1) may
be assigned—
‘‘(A) to provide one-on-one tutoring for eligible students,
if the tutoring is scheduled at a time when a student
would not otherwise receive instruction from a teacher;
‘‘(B) to assist with classroom management, such as
organizing instructional and other materials;
‘‘(C) to provide assistance in a computer laboratory;
‘‘(D) to conduct parental involvement activities;
‘‘(E) to provide support in a library or media center;
‘‘(F) to act as a translator; or
‘‘(G) to provide instructional services to students in
accordance with paragraph (3).
‘‘(3) 
ADDITIONAL
LIMITATIONS.—A 
paraprofessional
described in paragraph (1)—
‘‘(A) may not provide any instructional service to a
student unless the paraprofessional is working under the
direct supervision of a teacher consistent with section 1119;
and
‘‘(B) may assume limited duties that are assigned to
similar personnel who are not working in a program sup-
ported with funds under this part, including duties beyond
H. R. 1—84
classroom instruction or that do not benefit participating
children, so long as the amount of time spent on such
duties is the same proportion of total work time as prevails
with respect to similar personnel at the same school.
‘‘(h) USE OF FUNDS.—A local educational agency receiving funds
under this part may use such funds to support ongoing training
and professional development to assist teachers and paraprofes-
sionals in satisfying the requirements of this section.
‘‘(i) VERIFICATION OF COMPLIANCE.—
‘‘(1) IN GENERAL.—In verifying compliance with this section,
each local educational agency, at a minimum, shall require
that the principal of each school operating a program under
section 1114 or 1115 attest annually in writing as to whether
such school is in compliance with the requirements of this
section.
‘‘(2) AVAILABILITY OF INFORMATION.—Copies of attestations
under paragraph (1)—
‘‘(A) shall be maintained at each school operating a
program under section 1114 or 1115 and at the main office
of the local educational agency; and
‘‘(B) shall be available to any member of the general
public on request.
‘‘(j) COMBINATIONS OF FUNDS.—Funds provided under this part
that are used for professional development purposes may be com-
bined with funds provided under title II of this Act, other Acts,
and other sources.
‘‘(k) SPECIAL RULE.—Except as provided in subsection (l), no
State educational agency shall require a school or a local educational
agency to expend a specific amount of funds for professional develop-
ment activities under this part, except that this paragraph shall
not apply with respect to requirements under section 1116(c)(3).
‘‘(l) MINIMUM EXPENDITURES.—Each local educational agency
that receives funds under this part shall use not less than 5 percent,
or more than 10 percent, of such funds for each of fiscal years
2002 and 2003, and not less than 5 percent of the funds for each
subsequent fiscal year, for professional development activities to
ensure that teachers who are not highly qualified become highly
qualified not later than the end of the 2005–2006 school year.
‘‘SEC. 1120. PARTICIPATION OF CHILDREN ENROLLED IN PRIVATE
SCHOOLS.
‘‘(a) GENERAL REQUIREMENT.—
‘‘(1) IN GENERAL.—To the extent consistent with the number
of eligible children identified under section 1115(b) in the school
district served by a local educational agency who are enrolled
in private elementary schools and secondary schools, a local
educational agency shall, after timely and meaningful consulta-
tion with appropriate private school officials, provide such chil-
dren, on an equitable basis, special educational services or
other benefits under this part (such as dual enrollment, edu-
cational radio and television, computer equipment and mate-
rials, other technology, and mobile educational services and
equipment) that address their needs, and shall ensure that
teachers and families of the children participate, on an equi-
table basis, in services and activities developed pursuant to
sections 1118 and 1119.
H. R. 1—85
‘‘(2) SECULAR, 
NEUTRAL, 
NONIDEOLOGICAL.—Such edu-
cational services or other benefits, including materials and
equipment, shall be secular, neutral, and nonideological.
‘‘(3) EQUITY.—Educational services and other benefits for
such private school children shall be equitable in comparison
to services and other benefits for public school children partici-
pating under this part, and shall be provided in a timely
manner.
‘‘(4) EXPENDITURES.—Expenditures for educational services
and other benefits to eligible private school children shall be
equal to the proportion of funds allocated to participating school
attendance areas based on the number of children from low-
income families who attend private schools, which the local
educational agency may determine each year or every 2 years.
‘‘(5) PROVISION OF SERVICES.—The local educational agency
may provide services under this section directly or through
contracts with public and private agencies, organizations, and
institutions.
‘‘(b) CONSULTATION.—
‘‘(1) IN GENERAL.—To ensure timely and meaningful con-
sultation, a local educational agency shall consult with appro-
priate private school officials during the design and develop-
ment of such agency’s programs under this part, on issues
such as—
‘‘(A) how the children’s needs will be identified;
‘‘(B) what services will be offered;
‘‘(C) how, where, and by whom the services will be
provided;
‘‘(D) how the services will be academically assessed
and how the results of that assessment will be used to
improve those services;
‘‘(E) the size and scope of the equitable services to
be provided to the eligible private school children, and
the proportion of funds that is allocated under subsection
(a)(4) for such services;
‘‘(F) the method or sources of data that are used under
subsection (c) and section 1113(c)(1) to determine the
number of children from low-income families in partici-
pating school attendance areas who attend private schools;
‘‘(G) how and when the agency will make decisions
about the delivery of services to such children, including
a thorough consideration and analysis of the views of the
private school officials on the provision of services through
a contract with potential third-party providers; and
‘‘(H) how, if the agency disagrees with the views of
the private school officials on the provision of services
through a contract, the local educational agency will pro-
vide in writing to such private school officials an analysis
of the reasons why the local educational agency has chosen
not to use a contractor.
‘‘(2) TIMING.—Such consultation shall include meetings of
agency and private school officials and shall occur before the
local educational agency makes any decision that affects the
opportunities of eligible private school children to participate
in programs under this part. Such meetings shall continue
throughout implementation and assessment of services provided
under this section.
H. R. 1—86
‘‘(3) DISCUSSION.—Such consultation shall include a discus-
sion of service delivery mechanisms a local educational agency
can use to provide equitable services to eligible private school
children.
‘‘(4) DOCUMENTATION.—Each local educational agency shall
maintain in the agency’s records and provide to the State
educational agency involved a written affirmation signed by
officials of each participating private school that the consulta-
tion required by this section has occurred. If such officials
do not provide such affirmation within a reasonable period
of time, the local educational agency shall forward the docu-
mentation that such consultation has taken place to the State
educational agency.
‘‘(5) COMPLIANCE.—
‘‘(A) IN GENERAL.—A private school official shall have
the right to complain to the State educational agency that
the local educational agency did not engage in consultation
that was meaningful and timely, or did not give due consid-
eration to the views of the private school official.
‘‘(B) PROCEDURE.—If the private school official wishes
to complain, the official shall provide the basis of the
noncompliance with this section by the local educational
agency to the State educational agency, and the local edu-
cational agency shall forward the appropriate documenta-
tion to the State educational agency.
‘‘(c) ALLOCATION FOR EQUITABLE SERVICE TO PRIVATE SCHOOL
STUDENTS.—
‘‘(1) CALCULATION.—A local educational agency shall have
the final authority, consistent with this section, to calculate
the number of children, ages 5 through 17, who are from
low-income families and attend private schools by—
‘‘(A) using the same measure of low income used to
count public school children;
‘‘(B) using the results of a survey that, to the extent
possible, protects the identity of families of private school
students, and allowing such survey results to be extrapo-
lated if complete actual data are unavailable;
‘‘(C) applying the low-income percentage of each partici-
pating public school attendance area, determined pursuant
to this section, to the number of private school children
who reside in that school attendance area; or
‘‘(D) using an equated measure of low income correlated
with the measure of low income used to count public school
children.
‘‘(2) COMPLAINT
PROCESS.—Any dispute regarding low-
income data for private school students shall be subject to
the complaint process authorized in section 9505.
‘‘(d) PUBLIC CONTROL OF FUNDS.—
‘‘(1) IN
GENERAL.—The control of funds provided under
this part, and title to materials, equipment, and property pur-
chased with such funds, shall be in a public agency, and a
public agency shall administer such funds, materials, equip-
ment, and property.
‘‘(2) PROVISION OF SERVICES.—
‘‘(A) PROVIDER.—The provision of services under this
section shall be provided—
‘‘(i) by employees of a public agency; or
H. R. 1—87
‘‘(ii) through contract by such public agency with
an individual, association, agency, or organization.
‘‘(B) REQUIREMENT.—In the provision of such services,
such employee, individual, association, agency, or organiza-
tion shall be independent of such private school and of
any religious organization, and such employment or con-
tract shall be under the control and supervision of such
public agency.
‘‘(e) STANDARDS FOR A BYPASS.—If a local educational agency
is prohibited by law from providing for the participation in programs
on an equitable basis of eligible children enrolled in private
elementary schools and secondary schools, or if the Secretary deter-
mines that a local educational agency has substantially failed or
is unwilling, to provide for such participation, as required by this
section, the Secretary shall—
‘‘(1) waive the requirements of this section for such local
educational agency;
‘‘(2) arrange for the provision of services to such children
through arrangements that shall be subject to the requirements
of this section and sections 9503 and 9504; and
‘‘(3) in making the determination under this subsection,
consider one or more factors, including the quality, size, scope,
and location of the program and the opportunity of eligible
children to participate.
‘‘SEC. 1120A. FISCAL REQUIREMENTS.
‘‘(a) MAINTENANCE OF EFFORT.—A local educational agency may
receive funds under this part for any fiscal year only if the State
educational agency involved finds that the local educational agency
has maintained the agency’s fiscal effort in accordance with section
9521.
‘‘(b) FEDERAL FUNDS TO SUPPLEMENT, NOT SUPPLANT, NON-
FEDERAL FUNDS.—
‘‘(1) IN GENERAL.—A State educational agency or local edu-
cational agency shall use Federal funds received under this
part only to supplement the funds that would, in the absence
of such Federal funds, be made available from non-Federal
sources for the education of pupils participating in programs
assisted under this part, and not to supplant such funds.
‘‘(2) SPECIAL RULE.—No local educational agency shall be
required to provide services under this part through a particular
instructional method or in a particular instructional setting
in order to demonstrate such agency’s compliance with para-
graph (1).
‘‘(c) COMPARABILITY OF SERVICES.—
‘‘(1) IN GENERAL.—
‘‘(A) COMPARABLE
SERVICES.—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 receiving funds under
this part.
‘‘(B) SUBSTANTIALLY
COMPARABLE
SERVICES.—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
H. R. 1—88
local funds to provide services that, taken as a whole,
are substantially comparable in each school.
‘‘(C) BASIS.—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.
‘‘(2) WRITTEN ASSURANCE.—
‘‘(A) EQUIVALENCE.—A local educational agency shall
be considered to have met the requirements of paragraph
(1) if such agency has filed with the State educational
agency a written assurance that such agency has estab-
lished and implemented—
‘‘(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 instruc-
tional supplies.
‘‘(B) DETERMINATIONS.—For the purpose of this sub-
section, in the determination of expenditures per pupil
from State and local funds, or instructional salaries per
pupil from State and local funds, staff salary differentials
for years of employment shall not be included in such
determinations.
‘‘(C) EXCLUSIONS.—A local educational agency need not
include unpredictable changes in student enrollment or
personnel assignments that occur after the beginning of
a school year in determining comparability of services
under this subsection.
‘‘(3) PROCEDURES
AND
RECORDS.—Each local educational
agency assisted under this part shall—
‘‘(A) develop procedures for compliance with this sub-
section; and
‘‘(B) maintain records that are updated biennially docu-
menting 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 one
building for each grade span.
‘‘(5) COMPLIANCE.—For the purpose of determining compli-
ance with paragraph (1), a local educational agency may exclude
State and local funds expended for—
‘‘(A) language instruction educational programs; and
‘‘(B) the 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 educational agency or local edu-
cational 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.
‘‘SEC. 1120B. COORDINATION REQUIREMENTS.
‘‘(a) IN GENERAL.—Each local educational agency receiving
assistance under this part shall carry out the activities described
in subsection (b) with Head Start agencies and, if feasible, other
entities carrying out early childhood development programs such
as the Early Reading First program.
H. R. 1—89
‘‘(b) ACTIVITIES.—The activities referred to in subsection (a)
are activities that increase coordination between the local edu-
cational agency and a Head Start agency and, if feasible, other
entities carrying out early childhood development programs, such
as the Early Reading First program, serving children who will
attend the schools of the local educational agency, including—
‘‘(1) developing and implementing a systematic procedure
for receiving records regarding such children, transferred with
parental consent from a Head Start program or, where
applicable, another early childhood development program such
as the Early Reading First program;
‘‘(2) establishing channels of communication between school
staff and their counterparts (including teachers, social workers,
and health staff) in such Head Start agencies or other entities
carrying out early childhood development programs such as
the Early Reading First program, as appropriate, to facilitate
coordination of programs;
‘‘(3) conducting meetings involving parents, kindergarten
or elementary school teachers, and Head Start teachers or,
if appropriate, teachers from other early childhood development
programs such as the Early Reading First program, to discuss
the developmental and other needs of individual children;
‘‘(4) organizing and participating in joint transition-related
training of school staff, Head Start program staff, Early
Reading First program staff, and, where appropriate, other
early childhood development program staff; and
‘‘(5) linking the educational services provided by such local
educational agency with the services provided by local Head
Start agencies and entities carrying out Early Reading First
programs.
‘‘(c) COORDINATION OF REGULATIONS.—The Secretary shall work
with the Secretary of Health and Human Services to coordinate
regulations promulgated under this part with regulations promul-
gated 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 appropriated
for payments to States for any fiscal year under section 1002(a)
and 1125A(f), the Secretary shall reserve a total of 1 percent to
provide assistance to—
‘‘(1) the outlying areas in the amount determined in accord-
ance with subsection (b); and
‘‘(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 local educational agencies in the outlying areas.
‘‘(2) COMPETITIVE GRANTS.—Until each appropriate outlying
area enters into an agreement for extension of United States
educational assistance under the Compact of Free Association
after the date of enactment of the No Child Left Behind Act
of 2001, the Secretary shall carry out the competition described
H. R. 1—90
in paragraph (3), except that the amount reserved to carry
out such competition shall not exceed $5,000,000.
‘‘(3) LIMITATION FOR COMPETITIVE GRANTS.—
‘‘(A) COMPETITIVE GRANTS.—The Secretary shall use
funds described in paragraph (2) to award grants to the
outlying 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 competitive basis, taking
into consideration the recommendations of the Pacific
Region Educational Laboratory in Honolulu, Hawaii.
‘‘(C) USES.—Except as provided in subparagraph (D),
grant funds awarded under this paragraph may be used
only—
‘‘(i) for programs described in this Act, including
teacher training, curriculum development, instruc-
tional materials, or general school improvement and
reform; and
‘‘(ii) to provide direct educational services that
assist all students with meeting challenging State aca-
demic content standards.
‘‘(D) ADMINISTRATIVE COSTS.—The Secretary may pro-
vide not more than 5 percent of the amount reserved for
grants under this paragraph to pay the administrative
costs of the Pacific Region Educational Laboratory under
subparagraph (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 provided to the freely associated States
under this section.
‘‘(c) DEFINITIONS.—For the purpose 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 INTERIOR.—
‘‘(1) IN GENERAL.—The amount allotted for payments to
the Secretary of the Interior under subsection (a)(2) for any
fiscal year shall be, as determined pursuant to criteria estab-
lished by the Secretary, the amount necessary to meet the
special educational needs of—
‘‘(A) Indian children on reservations served by
elementary schools and secondary schools for Indian chil-
dren operated or supported by the Department of the
Interior; and
‘‘(B) out-of-State Indian children in elementary schools
and secondary schools in local educational 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 subsection (a)(2), the
Secretary of the Interior shall make payments to local edu-
cational agencies, on 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
H. R. 1—91
amount of such payment may not exceed, for each such child,
the greater of—
‘‘(A) 40 percent of the average per-pupil expenditure
in the State in which the agency is located; or
‘‘(B) 48 percent of such expenditure in the United
States.
‘‘SEC. 1122. ALLOCATIONS TO STATES.
‘‘(a) ALLOCATION FORMULA.—Of the amount appropriated under
section 1002(a) to carry out this part for each of fiscal years 2002–
2007 (referred to in this subsection as the current fiscal year)—
‘‘(1) an amount equal to the amount made available to
carry out section 1124 for fiscal year 2001 shall be allocated
in accordance with section 1124;
‘‘(2) an amount equal to the amount made available 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 made available to carry out sections
1124, 1124A, and 1125 for the current fiscal year for which
the determination is made exceeds the amount available to
carry out sections 1124 and 1124A for fiscal year 2001 shall
be allocated in accordance with section 1125.
‘‘(b) ADJUSTMENTS WHERE NECESSITATED BY APPROPRIATIONS.—
‘‘(1) IN GENERAL.—If the sums available under this subpart
for any fiscal year are insufficient to pay 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
educational agencies, subject to subsections (c) and (d) of this
section.
‘‘(2) ADDITIONAL FUNDS.—If additional funds become avail-
able for making payments under sections 1124, 1124A, and
1125 for such fiscal year, allocations 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, 1124A, AND
1125.—For
each fiscal year, the amount made available to each local edu-
cational agency under each of sections 1124, 1124A, and 1125
shall be—
‘‘(A) not less than 95 percent of the amount made
available for the preceding fiscal year if the number of
children counted for grants under section 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 for the preceding fiscal year if the percentage
described in subparagraph (A) is between 15 percent and
30 percent; and
‘‘(C) not less than 85 percent of the amount made
available for the preceding fiscal year if the percentage
described in subparagraph (A) is below 15 percent.
‘‘(2) PAYMENTS.—If sufficient funds are appropriated, the
amounts described in paragraph (1) shall be paid to all local
educational agencies that received grants under section 1124A
for the preceding fiscal year, regardless of whether the local
H. R. 1—92
educational agency meets the minimum eligibility criteria for
that fiscal year described 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 para-
graph (1).
‘‘(3) APPLICABILITY.—Notwithstanding any other provision
of law, the Secretary shall not take into consideration the
hold-harmless provisions of this subsection for any fiscal year
for purposes of calculating State or local allocations for the
fiscal year under any program administered by the Secretary
other than a program authorized under this part.
‘‘(4) POPULATION DATA.—For any fiscal year for which the
Secretary calculates grants on the basis of population data
for counties, the Secretary shall apply the hold-harmless
percentages in paragraphs (1) and (2) to counties and, if the
Secretary’s allocation 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 edu-
cational agency shall reallocate funds proportionately 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
subpart for any fiscal year are insufficient to pay the full
amounts that local educational agencies in all States are eligible
to receive under subsection (c) for such year, the Secretary
shall ratably reduce such amounts for such year.
‘‘(2) ADDITIONAL FUNDS.—If additional funds become avail-
able for making payments under subsection (c) for such fiscal
year, amounts that were reduced 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, 1125, and 1125A, the term ‘State’ means each of
the 50 States, the District of Columbia, and the Commonwealth
of Puerto Rico.
‘‘SEC. 1124. BASIC GRANTS TO LOCAL EDUCATIONAL AGENCIES.
‘‘(a) AMOUNT OF GRANTS.—
‘‘(1) GRANTS FOR LOCAL EDUCATIONAL AGENCIES 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 expenditure
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
H. R. 1—93
Secretary and the Secretary of Commerce determine that
some or all of those data are unreliable or that their
use would be otherwise inappropriate, in which case—
‘‘(i) the two Secretaries shall publicly disclose the
reasons for their determination in detail; and
‘‘(ii) paragraph (3) shall apply.
‘‘(B) ALLOCATIONS TO LARGE AND SMALL LOCAL EDU-
CATIONAL AGENCIES.—
‘‘(i) For any fiscal year to which this paragraph
applies, the Secretary shall calculate grants under this
section for each local educational agency.
‘‘(ii) The amount of a grant under this section
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 section in
amounts determined by the Secretary under clause
(i); or
‘‘(II) use an alternative method approved by
the Secretary to distribute the portion of the
State’s total grants under this section that is based
on those small agencies.
‘‘(iv) An alternative method under clause (iii)(II)
shall be based on population data that the State edu-
cational agency determines best reflect the current dis-
tribution of children in poor families among the State’s
small local educational agencies that meet the eligi-
bility criteria of subsection (b).
‘‘(v) If a small local educational agency is dissatis-
fied 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 calculate grants
under this section on the basis of the number of children
counted under subsection (c) for counties, and State edu-
cational agencies shall suballocate county amounts to local
educational agencies, in accordance with regulations 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
Secretary for authority to make the allocations under this
subpart for a particular fiscal year directly to local edu-
cational agencies without regard to counties.
H. R. 1—94
‘‘(C) ALLOCATIONS TO LOCAL EDUCATIONAL AGENCIES.—
If the Secretary approves 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 deter-
mining a grant as are used under this subpart; or
‘‘(ii) using data that the State educational agency
submits to the Secretary for approval that more
accurately target poverty.
‘‘(D) APPEAL.—The State educational agency shall pro-
vide the Secretary an assurance that it will 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 that
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 sub-
section (c) for the Commonwealth of Puerto Rico by the
product of—
‘‘(i) subject to subparagraph (B), the percentage
that the average per-pupil expenditure in the Common-
wealth of Puerto Rico is of the lowest average per-
pupil expenditure of any of the 50 States; and
‘‘(ii) 32 percent of the average per-pupil expendi-
ture in the United States.
‘‘(B) 
MINIMUM
PERCENTAGE.—The 
percentage 
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 percent;
‘‘(iv) for fiscal year 2005, 85.0 percent;
‘‘(v) for fiscal year 2006, 92.5 percent; and
‘‘(vi) for fiscal year 2007 and succeeding fiscal
years, 100.0 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 subpart than it
received under this subpart for the preceding fiscal year,
the percentage in subparagraph (A) shall be the greater
of—
‘‘(i) the percentage in subparagraph (A)(i);
‘‘(ii) the percentage specified in subparagraph (B)
for the preceding fiscal year; or
‘‘(iii) the percentage used for the preceding fiscal
year.
‘‘(b) MINIMUM NUMBER
OF CHILDREN TO QUALIFY.—A local
educational agency is eligible for a basic grant 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.—
H. R. 1—95
‘‘(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 educational agency from
families below the poverty level as determined under para-
graph (2);
‘‘(B) the number of children (determined under para-
graph (4) for either the preceding year as described in
that paragraph, or for the second preceding year, as the
Secretary finds appropriate) aged 5 to 17, inclusive, in
the school district of such agency in institutions for
neglected and delinquent children (other than such institu-
tions 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 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 determined under paragraph (4).
‘‘(2) DETERMINATION OF NUMBER OF CHILDREN.—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 Commonwealth
of Puerto Rico shall be treated as individual local educational
agencies. If a local educational agency contains two 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 educational agency shall dis-
tribute to schools in each county within such agency a share
of the local educational agency’s total grant that is no less
than the county’s share of the population counts used to cal-
culate the local educational agency’s grant.
‘‘(3) POPULATION UPDATES.—
‘‘(A) IN GENERAL.—In fiscal year 2002 and each subse-
quent fiscal year, the Secretary shall use updated data
on the number of children, aged 5 to 17, inclusive, from
families below the poverty level for counties or local edu-
cational agencies, published by the Department of Com-
merce, unless the Secretary and the Secretary of Commerce
determine that the use of the updated population data
would be inappropriate or unreliable. If appropriate and
reliable data are not available annually, the Secretary shall
use data which are updated every 2 years.
‘‘(B) INAPPROPRIATE OR UNRELIABLE DATA.—If the Sec-
retary and the Secretary of Commerce determine that some
or all of the data referred to in subparagraph (A) are
inappropriate or unreliable, the Secretary and the Sec-
retary of Commerce shall publicly disclose their reasons.
‘‘(C) CRITERIA OF POVERTY.—In determining the fami-
lies that are below the poverty level, the Secretary shall
use the criteria of poverty used by the Bureau of the
Census in compiling the most recent decennial census,
H. R. 1—96
as the criteria have been updated by increases in the
Consumer Price Index for All Urban Consumers, published
by the Bureau of Labor Statistics.
‘‘(4) OTHER CHILDREN TO BE COUNTED.—
‘‘(A) For the purpose of this section, the Secretary
shall determine the number of children aged 5 to 17, inclu-
sive, from families above the poverty level on the basis
of the number of such children from families receiving
an annual income, in excess of the current criteria of pov-
erty, from payments under a State program funded under
part A of title IV of the Social Security Act; and in making
such determinations, the Secretary shall use the criteria
of poverty used by the Bureau of the Census in compiling
the most recent decennial census for a family of four in
such form as those criteria have been updated by increases
in the Consumer Price Index for All Urban Consumers,
published by the Bureau of Labor Statistics.
‘‘(B) The Secretary shall determine the number of such
children and the number of children aged 5 through 17
living in institutions 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 children
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 extent that such data
are not available to the Secretary before January of the
calendar year in which the Secretary’s determination is
made, then on the basis of the most recent reliable data
available to the Secretary at the time of such determina-
tion.
‘‘(C) Except for the data on children living in institu-
tions for neglected or delinquent children, the Secretary
of Health and Human Services shall collect and transmit
the information required by this subparagraph to the Sec-
retary not later than January 1 of each year.
‘‘(D) For the purpose of this section, the Secretary
shall consider all children who are in correctional institu-
tions to be living in institutions for delinquent children.
‘‘(5) ESTIMATE.—When requested by the Secretary, the Sec-
retary of Commerce shall make a special updated estimate
of the number of children of such ages who are from families
below the poverty level (as determined under paragraph (1)(A))
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 Commerce shall give consideration to any request
of the chief executive of a State for the collection of additional
census information.
‘‘(d) STATE
MINIMUM.—Notwithstanding section 1122, the
aggregate amount allotted for all local educational agencies within
a State may not be less than the lesser of—
‘‘(1) 0.25 percent of the total amount allocated to States
under this section for fiscal year 2001, plus 0.35 percent of
the total amount allocated to States under this section in excess
of the amount allocated for fiscal year 2001; or
H. R. 1—97
‘‘(2) the average of—
‘‘(A) the amount calculated in paragraph (1), above;
and
‘‘(B) the number of children in such State counted
under subsection (c) in the fiscal year multiplied by 150
percent of the national average per-pupil payment made
with funds available under this section for that year.
‘‘SEC. 1124A. CONCENTRATION GRANTS TO LOCAL EDUCATIONAL
AGENCIES.
‘‘(a) ELIGIBILITY FOR AND AMOUNT OF GRANTS.—
‘‘(1) IN GENERAL.—(A) Except as otherwise provided in this
paragraph, each local educational agency which is eligible for
a grant under section 1124 for any fiscal year is eligible 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 children aged
5 through 17 in the agency.
‘‘(B) Notwithstanding section 1122, no State shall receive
less than the lesser of—
‘‘(i) 0.25 percent of the total amount allocated to States
under this section for fiscal year 2001, plus 0.35 percent
of the total amount allocated to States under this section
in excess of the amount allocated for fiscal year 2001;
or
‘‘(ii) the average of—
‘‘(I) the amount calculated under clause (i); 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 avail-
able under this section for that year.
‘‘(2) DETERMINATION.—For each county or local educational
agency eligible to receive an additional grant under this section
for any fiscal year, the Secretary shall determine the product
of—
‘‘(A) the number of children counted under section
1124(c) for that fiscal year; and
‘‘(B) the amount in section 1124(a)(1)(B) for each State
except the Commonwealth of Puerto Rico, and the amount
in section 1124(a)(4) for the Commonwealth of Puerto Rico.
‘‘(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), (3), and (4).
H. R. 1—98
‘‘(B) For any fiscal year for which the Secretary allocates
funds under this section on the basis of counties, 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 ineli-
gible counties that do not meet these criteria.
‘‘(b) SMALL STATES.—In any State for which on the date of
enactment of the No Child Left Behind Act of 2001 the number
of children counted under section 1124(c) is less than 0.25 percent
of the number of those children counted for all States, the State
educational agency shall allocate funds under this section among
the local educational agencies in the 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 state-
wide average percentage 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 AGENCIES.—
‘‘(1) IN GENERAL.—A local educational agency in a State
is eligible to receive a targeted grant under this section for
any fiscal year if—
‘‘(A) the number of children in the local educational
agency counted under section 1124(c), before application
of the weighted child count described in subsection (c),
is at least 10; and
‘‘(B) if the number of children counted for grants under
section 1124(c), before application of the weighted child
count described in subsection (c), is at least 5 percent
of the total number of children aged 5 to 17 years, inclusive,
in the school district of the local educational agency.
‘‘(2) SPECIAL RULE.—For any fiscal year for which the Sec-
retary allocates funds under this section on the basis of coun-
ties, funds made available as a result of applying this subsection
shall be reallocated by the State educational agency to other
eligible local educational agencies in the State in proportion
to the distribution of other funds under this section.
‘‘(b) GRANTS FOR LOCAL EDUCATIONAL AGENCIES, THE DISTRICT
OF COLUMBIA, AND THE COMMONWEALTH OF PUERTO RICO.—
‘‘(1) IN GENERAL.—The amount of the grant that a local
educational agency in a State (other than the Commonwealth
of Puerto Rico) is eligible to receive under this section for
any fiscal year shall be the product of—
‘‘(A) the weighted child count determined under sub-
section (c); and
‘‘(B) 
the 
amount 
determined 
under 
section
1124(a)(1)(B).
‘‘(2) PUERTO RICO.—For each fiscal year, the amount of
the grant the Commonwealth of Puerto Rico is eligible to receive
under this section shall be equal to the number of children
counted under subsection (c) for the Commonwealth of Puerto
H. R. 1—99
Rico, multiplied by the amount determined in section 1124(a)(4)
for the Commonwealth of Puerto Rico.
‘‘(c) WEIGHTED CHILD COUNT.—
‘‘(1) WEIGHTS FOR ALLOCATIONS TO COUNTIES.—
‘‘(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 section is the larger of the two
amounts determined under subparagraphs (B) and (C).
‘‘(B) BY
PERCENTAGE
OF
CHILDREN.—The amount
referred to in subparagraph (A) is determined by adding—
‘‘(i) the number of children determined under sec-
tion 1124(c) for that county who constitute not more
than 15.00 percent, inclusive, of the county’s total
population aged 5 to 17, inclusive, multiplied by 1.0;
‘‘(ii) the number of such children who constitute
more than 15.00 percent, but not more than 19.00
percent, of such population, multiplied by 1.75;
‘‘(iii) the number of such children who constitute
more than 19.00 percent, but not more than 24.20
percent, of such population, multiplied by 2.5;
‘‘(iv) the number of such children who constitute
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 who constitute
more than 29.20 percent of such population, multiplied
by 4.0.
‘‘(C) BY NUMBER OF CHILDREN.—The amount referred
to in subparagraph (A) is determined by adding—
‘‘(i) the number of children determined under sec-
tion 1124(c) who constitute not more than 2,311, inclu-
sive, 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
‘‘(v) the number of such children in excess of 93,811
in such population, multiplied by 3.0.
‘‘(D) PUERTO
RICO.—Notwithstanding subparagraph
(A), the weighting factor for the Commonwealth of Puerto
Rico under this paragraph shall not be greater than the
total number of children counted under section 1124(c)
multiplied by 1.82.
‘‘(2) WEIGHTS
FOR
ALLOCATIONS
TO
LOCAL
EDUCATIONAL
AGENCIES.—
‘‘(A) IN GENERAL.—For each fiscal year for which the
Secretary uses local educational agency data, the weighted
child count used to determine a local educational agency’s
grant under this section is the larger of the two amounts
determined under subparagraphs (B) and (C).
H. R. 1—100
‘‘(B) BY
PERCENTAGE
OF
CHILDREN.—The amount
referred to in subparagraph (A) is determined by adding—
‘‘(i) the number of children determined under sec-
tion 1124(c) for that local educational agency who con-
stitute not more than 15.58 percent, inclusive, of the
agency’s total population aged 5 to 17, inclusive, multi-
plied by 1.0;
‘‘(ii) the number of such children who constitute
more than 15.58 percent, but not more than 22.11
percent, of such population, multiplied by 1.75;
‘‘(iii) the number of such children who constitute
more than 22.11 percent, but not more than 30.16
percent, of such population, multiplied by 2.5;
‘‘(iv) the number of such children who constitute
more than 30.16 percent, but not more than 38.24
percent, of such population, multiplied by 3.25; and
‘‘(v) the number of such children who constitute
more than 38.24 percent of such population, multiplied
by 4.0.
‘‘(C) BY NUMBER OF CHILDREN.—The amount referred
to in subparagraph (A) is determined by adding—
‘‘(i) the number of children determined under sec-
tion 1124(c) who constitute not more than 691, inclu-
sive, of the agency’s total population aged 5 to 17,
inclusive, multiplied by 1.0;
‘‘(ii) the number of such children between 692 and
2,262, inclusive, in such population, multiplied by 1.5;
‘‘(iii) the number of such children between 2,263
and 7,851, inclusive, in such population, multiplied
by 2.0;
‘‘(iv) the number of such children between 7,852
and 35,514, inclusive, in such population, multiplied
by 2.5; and
‘‘(v) the number of such children in excess of 35,514
in such population, multiplied by 3.0.
‘‘(D) PUERTO
RICO.—Notwithstanding subparagraph
(A), the weighting factor for the Commonwealth of Puerto
Rico under this paragraph shall not be greater than the
total number of children counted under section 1124(c)
multiplied by 1.82.
‘‘(d) CALCULATION OF GRANT AMOUNTS.—Grant amounts under
this section shall be calculated in the same manner as grant
amounts are calculated under 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 section, each State shall be allotted
at least the lesser of—
‘‘(1) 0.35 percent of the total amount available to carry
out this section; or
‘‘(2) the average of—
‘‘(A) 0.35 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), with-
out application of a weighting factor.
H. R. 1—101
‘‘SEC. 1125AA. ADEQUACY OF FUNDING OF TARGETED GRANTS TO
LOCAL EDUCATIONAL AGENCIES IN FISCAL YEARS
AFTER FISCAL YEAR 2001.
‘‘(a) FINDINGS.—Congress makes the following findings:
‘‘(1) The current Basic Grant Formula for the distribution
of funds under this part often does not provide funds for the
economically disadvantaged students for which such funds are
targeted.
‘‘(2) Any school district in which more than 2 percent
of the students live below the poverty level qualifies for funding
under the Basic Grant Formula. As a result, 9 out of every
10 school districts in the country receive some form of aid
under the Formula.
‘‘(3) Fifty-eight percent of all schools receive at least some
funding under this part, including many suburban schools with
predominantly well-off students.
‘‘(4) One out of every 5 schools with concentrations of
poor students between 50 and 75 percent receive no funding
at all under this part.
‘‘(5) In passing the Improving America’s Schools Act in
1994, Congress declared that grants under this part would
more sharply target high poverty schools by using the Targeted
Grant Formula, but annual appropriation Acts have prevented
the use of that Formula.
‘‘(6) The advantage of the Targeted Grant Formula over
other funding formulas under this part is that the Targeted
Grant Formula provides increased grants per poor child as
the percentage of economically disadvantaged children in a
school district increases.
‘‘(7) Studies have found that the poverty of a child’s family
is much more likely to be associated with educational disadvan-
tage if the family lives in an area with large concentrations
of poor families.
‘‘(8) States with large populations of high poverty students
would receive significantly more funding if more funds under
this part were allocated through the Targeted Grant Formula.
‘‘(9) Congress has an obligation to allocate funds under
this part so that such funds will positively affect the largest
number of economically disadvantaged students.
‘‘(b) LIMITATION ON ALLOCATION OF TITLE I FUNDS CONTINGENT
ON ADEQUATE FUNDING OF TARGETED GRANTS.—Pursuant to section
1122, the total amount allocated in any fiscal year after fiscal
year 2001 for programs and activities under this part shall not
exceed the amount allocated in fiscal year 2001 for such programs
and activities unless the amount available for targeted grants to
local educational agencies under section 1125 in the applicable
fiscal year meets the requirements of section 1122(a).
‘‘SEC. 1125A. EDUCATION FINANCE INCENTIVE GRANT PROGRAM.
‘‘(a) GRANTS.—From funds appropriated under subsection (f)
the Secretary is authorized to make grants to States, from allot-
ments under subsection (b), to carry out the programs and activities
of this part.
‘‘(b) DISTRIBUTION BASED UPON FISCAL EFFORT AND EQUITY.—
‘‘(1) IN GENERAL.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), funds appropriated pursuant to subsection (f) shall
H. R. 1—102
be allotted to each State based upon the number of children
counted under section 1124(c) in such State multiplied
by the product of—
‘‘(i) the amount in section 1124(a)(1)(B) for all
States other than the Commonwealth of Puerto Rico,
except that the amount determined under that
subparagraph shall not be less that 34 percent or more
than 46 percent of the average per pupil expenditure
in the United States, and the amount in section
1124(a)(4) for the Commonwealth of Puerto Rico, except
that the amount in section 1124(a)(4)(A)(ii) shall be
34 percent of the average per pupil expenditure in
the United States; multiplied by
‘‘(ii) such State’s effort factor described in para-
graph (2); multiplied by
‘‘(iii) 1.30 minus such State’s equity factor
described in paragraph (3).
‘‘(B) 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—
‘‘(i) 0.35 percent of total appropriations; or
‘‘(ii) the average of—
‘‘(I) 0.35 percent of the total amount available
to carry out this section; and
‘‘(II) 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.
‘‘(2) EFFORT FACTOR.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), the effort factor for a State shall be determined in
accordance with the succeeding sentence, except that such
factor shall not be less than 0.95 nor greater than 1.05.
The effort factor determined under this sentence shall be
a fraction the numerator of which is the product of the
3-year average per-pupil expenditure in the State multi-
plied by the 3-year average per capita income in the United
States and the denominator of which is the product of
the 3-year average per capita income in such State multi-
plied by the 3-year average per-pupil expenditure in the
United States.
‘‘(B) COMMONWEALTH
OF
PUERTO
RICO.—The effort
factor for the Commonwealth of Puerto Rico shall be equal
to the lowest effort factor calculated under subparagraph
(A) for any State.
‘‘(3) EQUITY FACTOR.—
‘‘(A) DETERMINATION.—
‘‘(i) IN GENERAL.—Except as provided in subpara-
graph (B), the Secretary shall determine the equity
factor under this section for each State in accordance
with clause (ii).
‘‘(ii) COMPUTATION.—
H. R. 1—103
‘‘(I) IN
GENERAL.—For each State, the Sec-
retary shall compute a weighted coefficient of vari-
ation for the per-pupil expenditures of local edu-
cational agencies in accordance with subclauses
(II), (III), and (IV).
‘‘(II) VARIATION.—In computing coefficients of
variation, the Secretary shall weigh the variation
between per-pupil expenditures in each local edu-
cational agency and the average per-pupil expendi-
tures in the State according to the number of
pupils served by the local educational agency.
‘‘(III) NUMBER OF PUPILS.—In determining the
number of pupils under this paragraph served by
each local educational agency and in each State,
the Secretary shall multiply the number of chil-
dren counted under section 1124(c) by a factor
of 1.4.
‘‘(IV) ENROLLMENT
REQUIREMENT.—In com-
puting coefficients of variation, the Secretary shall
include only those local educational agencies with
an enrollment of more than 200 students.
‘‘(B) SPECIAL RULE.—The equity factor for a State that
meets the disparity standard described in section 222.162
of title 34, Code of Federal Regulations (as such section
was in effect on the day preceding the date of enactment
of the No Child Left Behind Act of 2001) or a State with
only one local educational agency shall be not greater than
0.10.
‘‘(c) USE OF FUNDS; ELIGIBILITY OF LOCAL EDUCATIONAL AGEN-
CIES.—All funds awarded to each State under this section shall
be allocated to local educational agencies under the following provi-
sions. Within local educational agencies, funds allocated under this
section shall be distributed to schools on a basis consistent with
section 1113, and may only be used to carry out activities under
this part. A local educational agency in a State is eligible to receive
a targeted grant under this section for any fiscal year if—
‘‘(A) the number of children in the local educational agency
counted under section 1124(c), before application of the
weighted child count described in paragraph (3), is at least
10; and
‘‘(B) if the number of children counted for grants under
section 1124(c), before application of the weighted child count
described in paragraph (3), is at least 5 percent of the total
number of children aged 5 to 17 years, inclusive, in the school
district of the local educational agency.
‘‘For any fiscal year for which the Secretary allocates funds
under this section on the basis of counties, funds made available
as a result of applying this subsection shall be reallocated by
the State educational agency to other eligible local educational
agencies in the State in proportion to the distribution of other
funds under this section.
‘‘(d) ALLOCATION OF FUNDS TO ELIGIBLE LOCAL EDUCATIONAL
AGENCIES.—Funds received by States under this section shall be
allocated within States to eligible local educational agencies on
the basis of weighted child counts calculated in accordance with
paragraph (1), (2), or (3), as appropriate for each State.
H. R. 1—104
‘‘(1) STATES WITH AN EQUITY FACTOR LESS THAN .10.—In
States with an equity factor less than .10, the weighted child
counts referred to in subsection (d) shall be calculated as fol-
lows:
‘‘(A) WEIGHTS FOR ALLOCATIONS TO COUNTIES.—
‘‘(i) 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 section is the larger
of the two amounts determined under clauses (ii) and
(iii).
‘‘(ii) BY PERCENTAGE OF CHILDREN.—The amount
referred to in clause ‘‘(i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) for that county who constitute not
more than 15.00 percent, inclusive, of the county’s
total population aged 5 to 17, inclusive, multiplied
by 1.0;
‘‘(II) the number of such children who con-
stitute more than 15.00 percent, but not more
than 19.00 percent, of such population, multiplied
by 1.75;
‘‘(III) the number of such children who con-
stitute more than 19.00 percent, but not more
than 24.20 percent, of such population, multiplied
by 2.5;
‘‘(IV) the number of such children who con-
stitute 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 who con-
stitute more than 29.20 percent of such population,
multiplied by 4.0.
‘‘(iii) BY
NUMBER
OF
CHILDREN.—The amount
referred to in clause (i) is determined by adding
‘‘(I) the number of children determined under
section 1124(c) who constitute not more than 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
‘‘(V) the number of such children in excess
of 93,811 in such population, multiplied by 3.0.
‘‘(B) WEIGHTS FOR ALLOCATIONS TO LOCAL EDUCATIONAL
AGENCIES.—
‘‘(i) IN GENERAL.—For each fiscal year for which
the Secretary uses local educational agency data, the
weighted child count used to determine a local edu-
cational agency’s grant under this section is the larger
H. R. 1—105
of the two amounts determined under clauses (ii) and
(iii).
‘‘(ii) BY PERCENTAGE OF CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) for that local educational agency
who constitute not more than 15.58 percent, inclu-
sive, of the agency’s total population aged 5 to
17, inclusive, multiplied by 1.0;
‘‘(II) the number of such children who con-
stitute more than 15.58 percent, but not more
than 22.11 percent, of such population, multiplied
by 1.75;
‘‘(III) the number of such children who con-
stitute more than 22.11 percent, but not more
than 30.16 percent, of such population, multiplied
by 2.5;
‘‘(IV) the number of such children who con-
stitute more than 30.16 percent, but not more
than 38.24 percent, of such population, multiplied
by 3.25; and
‘‘(V) the number of such children who con-
stitute more than 38.24 percent of such population,
multiplied by 4.0.
‘‘(iii) BY
NUMBER
OF
CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) who constitute not more than 691,
inclusive, of the agency’s total population aged 5
to 17, inclusive, multiplied by 1.0;
‘‘(II) the number of such children between 692
and 2,262, inclusive, in such population, multiplied
by 1.5;
‘‘(III) the number of such children between
2,263 and 7,851, inclusive, in such population,
multiplied by 2.0;
‘‘(IV) the number of such children between
7,852 and 35,514, inclusive, in such population,
multiplied by 2.5; and
‘‘(V) the number of such children in excess
of 35,514 in such population, multiplied by 3.0.
‘‘(2) STATES WITH AN EQUITY FACTOR GREATER THAN OR
EQUAL TO .10 AND LESS THAN .20.—In States with an equity
factor greater than or equal to .10 and less than .20, the
weighted child counts referred to in subsection (d) shall be
calculated as follows:
‘‘(A) WEIGHTS FOR ALLOCATIONS TO COUNTIES.—
‘‘(i) 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 section is the larger
of the two amounts determined under clauses (ii) and
(iii).
‘‘(ii) BY PERCENTAGE OF CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) for that county who constitute not
H. R. 1—106
more than 15.00 percent, inclusive, of the county’s
total population aged 5 to 17, inclusive, multiplied
by 1.0;
‘‘(II) the number of such children who con-
stitute more than 15.00 percent, but not more
than 19.00 percent, of such population, multiplied
by 1.5;
‘‘(III) the number of such children who con-
stitute more than 19.00 percent, but not more
than 24.20 percent, of such population, multiplied
by 3.0;
‘‘(IV) the number of such children who con-
stitute more than 24.20 percent, but not more
than 29.20 percent, of such population, multiplied
by 4.5; and
‘‘(V) the number of such children who con-
stitute more than 29.20 percent of such population,
multiplied by 6.0.
‘‘(iii) BY
NUMBER
OF
CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) who constitute not more than 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 2.25;
‘‘(IV) the number of such children between
23,918 and 93,810, inclusive, in such population,
multiplied by 3.375; and
‘‘(V) the number of such children in excess
of 93,811 in such population, multiplied by 4.5.
‘‘(B) WEIGHTS FOR ALLOCATIONS TO LOCAL EDUCATIONAL
AGENCIES.—
‘‘(i) IN GENERAL.—For each fiscal year for which
the Secretary uses local educational agency data, the
weighted child count used to determine a local edu-
cational agency’s grant under this section is the larger
of the two amounts determined under clauses (ii) and
(iii).
‘‘(ii) BY PERCENTAGE OF CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) for that local educational agency
who constitute not more than 15.58 percent, inclu-
sive, of the agency’s total population aged 5 to
17, inclusive, multiplied by 1.0;
‘‘(II) the number of such children who con-
stitute more than 15.58 percent, but not more
than 22.11 percent, of such population, multiplied
by 1.5;
‘‘(III) the number of such children who con-
stitute more than 22.11 percent, but not more
H. R. 1—107
than 30.16 percent, of such population, multiplied
by 3.0;
‘‘(IV) the number of such children who con-
stitute more than 30.16 percent, but not more
than 38.24 percent, of such population, multiplied
by 4.5; and
‘‘(V) the number of such children who con-
stitute more than 38.24 percent of such population,
multiplied by 6.0.
‘‘(iii) BY
NUMBER
OF
CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) who constitute not more than 691,
inclusive, of the agency’s total population aged 5
to 17, inclusive, multiplied by 1.0;
‘‘(II) the number of such children between 692
and 2,262, inclusive, in such population, multiplied
by 1.5;
‘‘(III) the number of such children between
2,263 and 7,851, inclusive, in such population,
multiplied by 2.25;
‘‘(IV) the number of such children between
7,852 and 35,514, inclusive, in such population,
multiplied by 3.375; and
‘‘(V) the number of such children in excess
of 35,514 in such population, multiplied by 4.5.
‘‘(3) STATES WITH AN EQUITY FACTOR GREATER THAN OR
EQUAL TO .20.—In States with an equity factor greater than
or equal to .20, the weighted child counts referred to in sub-
section (d) shall be calculated as follows:
‘‘(A) WEIGHTS FOR ALLOCATIONS TO COUNTIES.—
‘‘(i) 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 section is the larger
of the two amounts determined under clauses (ii) and
(iii).
‘‘(ii) BY PERCENTAGE OF CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) for that county who constitute not
more than 15.00 percent, inclusive, of the county’s
total population aged 5 to 17, inclusive, multiplied
by 1.0;
‘‘(II) the number of such children who con-
stitute more than 15.00 percent, but not more
than 19.00 percent, of such population, multiplied
by 2.0;
‘‘(III) the number of such children who con-
stitute more than 19.00 percent, but not more
than 24.20 percent, of such population, multiplied
by 4.0;
‘‘(IV) the number of such children who con-
stitute more than 24.20 percent, but not more
than 29.20 percent, of such population, multiplied
by 6.0; and
H. R. 1—108
‘‘(V) the number of such children who con-
stitute more than 29.20 percent of such population,
multiplied by 8.0.
‘‘(iii) BY
NUMBER
OF
CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) who constitute not more than 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 2.0;
‘‘(III) the number of such children between
7,914 and 23,917, inclusive, in such population,
multiplied by 3.0;
‘‘(IV) the number of such children between
23,918 and 93,810, inclusive, in such population,
multiplied by 4.5; and
‘‘(V) the number of such children in excess
of 93,811 in such population, multiplied by 6.0.
‘‘(B) WEIGHTS FOR ALLOCATIONS TO LOCAL EDUCATIONAL
AGENCIES.—
‘‘(i) IN GENERAL.—For each fiscal year for which
the Secretary uses local educational agency data, the
weighted child count used to determine a local edu-
cational agency’s grant under this section is the larger
of the two amounts determined under clauses (ii) and
(iii).
‘‘(ii) BY PERCENTAGE OF CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) for that local educational agency
who constitute not more than 15.58 percent, inclu-
sive, of the agency’s total population aged 5 to
17, inclusive, multiplied by 1.0;
‘‘(II) the number of such children who con-
stitute more than 15.58 percent, but not more
than 22.11 percent, of such population, multiplied
by 2.0;
‘‘(III) the number of such children who con-
stitute more than 22.11 percent, but not more
than 30.16 percent, of such population, multiplied
by 4.0;
‘‘(IV) the number of such children who con-
stitute more than 30.16 percent, but not more
than 38.24 percent, of such population, multiplied
by 6.0; and
‘‘(V) the number of such children who con-
stitute more than 38.24 percent of such population,
multiplied by 8.0.
‘‘(iii) BY
NUMBER
OF
CHILDREN.—The amount
referred to in clause (i) is determined by adding—
‘‘(I) the number of children determined under
section 1124(c) who constitute not more than 691,
inclusive, of the agency’s total population aged 5
to 17, inclusive, multiplied by 1.0;
H. R. 1—109
‘‘(II) the number of such children between 692
and 2,262, inclusive, in such population, multiplied
by 2.0;
‘‘(III) the number of such children between
2,263 and 7,851, inclusive, in such population,
multiplied by 3.0;
‘‘(IV) the number of such children between
7,852 and 35,514, inclusive, in such population,
multiplied by 4.5; and
‘‘(V) the number of such children in excess
of 35,514 in such population, multiplied by 6.0.
‘‘(e) MAINTENANCE OF EFFORT.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
a State is entitled to receive its full allotment of funds under
this section for any fiscal year if the Secretary finds that
either the combined fiscal effort per student or the aggregate
expenditures within the State with respect to the provision
of free public education for the fiscal year preceding the fiscal
year for which the determination is made was not less than
90 percent of such combined fiscal effort or aggregate expendi-
tures for the second fiscal year preceding the fiscal year for
which the determination is made.
‘‘(2) REDUCTION
OF
FUNDS.—The Secretary shall reduce
the amount of funds awarded to any State under this section
in any fiscal year in the exact proportion to which the State
fails to meet the requirements of paragraph (1) by falling below
90 percent of both the fiscal effort per student and aggregate
expenditures (using the measure most favorable to the State),
and no such lesser amount shall be used for computing the
effort required under paragraph (1) for subsequent years.
‘‘(3) WAIVERS.—The Secretary may waive, for 1 fiscal year
only, the requirements of this subsection if the Secretary deter-
mines that such a waiver would be equitable due to exceptional
or uncontrollable circumstances such as a natural disaster or
a precipitous and unforeseen decline in the financial resources
of the State.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may
be necessary for fiscal year 2002 and for each of the 5 succeeding
fiscal years.
‘‘(g) ADJUSTMENTS WHERE NECESSITATED BY APPROPRIATIONS.—
‘‘(1) IN GENERAL.—If the sums available under this section
for any fiscal year are insufficient to pay the full amounts
that all local educational agencies in States are eligible to
receive under this section for such year, the Secretary shall
ratably reduce the allocations to such local educational agencies,
subject to paragraphs (2) and (3).
‘‘(2) ADDITIONAL FUNDS.—If additional funds become avail-
able for making payments under this section for such fiscal
year, allocations that were reduced under paragraph (1) shall
be increased on the same basis as they were reduced.
‘‘(3) HOLD-HARMLESS
AMOUNTS.—For each fiscal year, if
sufficient funds are available, the amount made available to
each local educational agency under this section shall be
‘‘(A) not less than 95 percent of the amount made
available for the preceding fiscal year if the number of
children counted for grants under section 1124 is not less
H. R. 1—110
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 for the preceding fiscal year if the percentage
described in subparagraph (A) is between 15 percent and
30 percent; and
‘‘(C) not less than 85 percent of the amount made
available for the preceding fiscal year if the percentage
described in subparagraph (A) is below 15 percent.
‘‘(4) APPLICABILITY.—Notwithstanding any other provision
of law, the Secretary shall not take into consideration the
hold-harmless provisions of this subsection for any fiscal year
for purposes of calculating State or local allocations for the
fiscal year under any program administered by the Secretary
other than a program authorized under this part.
‘‘SEC. 1126. SPECIAL ALLOCATION PROCEDURES.
‘‘(a) ALLOCATIONS FOR NEGLECTED CHILDREN.—
‘‘(1) IN GENERAL.—If a State educational agency determines
that a local educational agency in the State is unable or
unwilling to provide for the special educational needs of chil-
dren who are living in institutions for neglected children as
described in section 1124(c)(1)(B), 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 allocation under sections 1124,
1124A, 1125, and 1125A that is attributable to such children.
‘‘(2) SPECIAL RULE.—If the State educational agency does
not assume such responsibility, any other State or local public
agency that does assume such responsibility shall receive that
portion of the local educational agency’s allocation.
‘‘(b) ALLOCATIONS AMONG LOCAL EDUCATIONAL AGENCIES.—The
State educational agency may allocate the amounts of grants under
sections 1124, 1124A, 1125, and 1125A among the affected local
educational agencies—
‘‘(1) if two or more local educational agencies serve, in
whole or in part, the same geographical area;
‘‘(2) if a local educational agency provides free public edu-
cation 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 one 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, 1125, and 1125A is more than such
local educational agency will use, the State educational agency
shall make the excess amount available to other local educational
agencies in the State that need additional funds in accordance
with criteria established by the State educational agency.
‘‘SEC. 1127. CARRYOVER AND WAIVER.
‘‘(a) LIMITATION
ON
CARRYOVER.—Notwithstanding section
421(b) of the General Education Provisions Act or any other provi-
sion 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 one additional fiscal year.
H. R. 1—111
‘‘(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 subpart 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.
‘‘PART B—STUDENT READING SKILLS
IMPROVEMENT GRANTS
‘‘Subpart 1—Reading First
‘‘SEC. 1201. PURPOSES.
‘‘The purposes of this subpart are as follows:
‘‘(1) To provide assistance to State educational agencies
and local educational agencies in establishing reading programs
for students in kindergarten through grade 3 that are based
on scientifically based reading research, to ensure that every
student can read at grade level or above not later than the
end of grade 3.
‘‘(2) To provide assistance to State educational agencies
and local educational agencies in preparing teachers, including
special education teachers, through professional development
and other support, so the teachers can identify 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 State educational agencies
and local educational agencies in selecting or administering
screening, 
diagnostic, 
and 
classroom-based 
instructional
reading assessments.
‘‘(4) To provide assistance to State educational agencies
and local educational agencies in selecting or developing effec-
tive instructional materials (including classroom-based mate-
rials to assist teachers in implementing the essential compo-
nents of reading instruction), programs, learning systems, and
strategies to implement methods that have been proven to
prevent or remediate reading failure within a State.
‘‘(5) To strengthen coordination among schools, early lit-
eracy programs, and family literacy programs to improve
reading achievement for all children.
‘‘SEC. 1202. FORMULA GRANTS TO STATE EDUCATIONAL AGENCIES.
‘‘(a) IN GENERAL.—
‘‘(1) AUTHORIZATION TO MAKE GRANTS.—In the case of each
State educational agency that in accordance with section 1203
submits to the Secretary an application for a 6-year period,
the Secretary, from amounts appropriated under section
1002(b)(1) and subject to the application’s approval, shall make
a grant to the State educational agency for the uses specified
in subsections (c) and (d). For each fiscal year, the funds pro-
vided under the grant shall equal the allotment determined
for the State educational agency under subsection (b).
H. R. 1—112
‘‘(2) DURATION OF GRANTS.—Subject to subsection (e)(3),
a grant under this section shall be awarded for a period of
not more than 6 years.
‘‘(b) DETERMINATION OF AMOUNT OF ALLOTMENTS.—
‘‘(1) RESERVATIONS FROM APPROPRIATIONS.—From the total
amount made available to carry out this subpart for a fiscal
year, the Secretary—
‘‘(A) shall reserve one-half of 1 percent for allotments
for the United States Virgin Islands, Guam, American
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 one-half of 1 percent for the Secretary
of the Interior for programs under this subpart in schools
operated or funded by the Bureau of Indian Affairs;
‘‘(C) may reserve not more than 21⁄2
percent or
$25,000,000, whichever is less, to carry out section 1205
(relating to external evaluation) and section 1206 (relating
to national activities);
‘‘(D) shall reserve $5,000,000 to carry out sections 1207
and 1224 (relating to information dissemination); and
‘‘(E) for any fiscal year, beginning with fiscal year
2004, for which the amount appropriated to carry out this
subpart exceeds the amount appropriated for fiscal year
2003, shall reserve, to carry out section 1204, the lesser
of—
‘‘(i) $90,000,000; or
‘‘(ii) 10 percent of such excess amount.
‘‘(2) STATE
ALLOTMENTS.—In accordance with paragraph
(3), the Secretary shall allot among each of the States the
total amount made available to carry out this subpart for
any fiscal year and not reserved under paragraph (1).
‘‘(3) DETERMINATION OF STATE ALLOTMENT AMOUNTS.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
Secretary shall allot the amount made available under
paragraph (2) for a fiscal year among the States in propor-
tion to the number of children, aged 5 to 17, who reside
within the State and are from families with incomes below
the poverty line for the most recent fiscal year for which
satisfactory data are available, compared to the number
of such individuals who reside in all such States for that
fiscal year.
‘‘(B) EXCEPTIONS.—
‘‘(i) MINIMUM GRANT AMOUNT.—Subject to clause
(ii), no State receiving an allotment under subpara-
graph (A) may receive less than one-fourth 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 exceed the percentage that was received by
the Commonwealth of Puerto Rico of the funds allo-
cated to all States under subpart 2 of part A for the
preceding fiscal year.
‘‘(4) DISTRIBUTION
OF
SUBGRANTS.—The Secretary may
make a grant to a State educational agency only if the State
H. R. 1—113
educational agency agrees to expend at least 80 percent of
the amount of the funds provided under the grant for the
purpose of making, in accordance with subsection (c), competi-
tive subgrants to eligible local educational agencies.
‘‘(5) 
REALLOTMENT.—If 
a 
State 
educational 
agency
described in paragraph (2) does not apply for an allotment
under this section for any fiscal year, or if the State educational
agency’s application is not approved, the Secretary shall reallot
such amount to the remaining State educational agencies in
accordance with paragraph (3).
‘‘(6) DEFINITION OF STATE.—For purposes of this subsection,
the term ‘State’ means each of the 50 States, the District
of Columbia, and the Commonwealth of Puerto Rico.
‘‘(c) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES.—
‘‘(1) AUTHORIZATION TO MAKE SUBGRANTS.—In accordance
with paragraph (2), a State educational agency that receives
a grant under this section shall make competitive subgrants
to eligible local educational agencies.
‘‘(2) ALLOCATION.—
‘‘(A) MINIMUM
SUBGRANT
AMOUNT.—In making sub-
grants under paragraph (1), a State educational agency
shall allocate to each eligible local educational agency that
receives such a subgrant, at a minimum, an amount that
bears the same relation to the funds made available under
subsection (b)(4) as the amount the eligible local edu-
cational agency received under part A for the preceding
fiscal year bears to the amount all the local educational
agencies in the State received under part A for the pre-
ceding fiscal year.
‘‘(B) PRIORITY.—In making subgrants under paragraph
(1), a State educational agency shall give priority to eligible
local educational agencies in which at least—
‘‘(i) 15 percent of the children served by the eligible
local educational agency are from families with incomes
below the poverty line; or
‘‘(ii) 6,500 children served by the eligible local edu-
cational agency are from families with incomes below
the poverty line.
‘‘(3) NOTICE.—A State educational agency receiving a grant
under this section shall provide notice to all eligible 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.
‘‘(4) LOCAL
APPLICATION.—To be eligible to receive a
subgrant under this subsection, an eligible local educational
agency shall submit an application to the State educational
agency at such time, in such manner, and containing such
information as the State educational agency may reasonably
require.
‘‘(5) STATE REQUIREMENT.—In distributing subgrant funds
to eligible local educational agencies under this subsection,
a State educational agency shall—
‘‘(A) provide funds in sufficient size and scope to enable
the eligible local educational agencies to improve reading
instruction; and
H. R. 1—114
‘‘(B) provide the funds in amounts related to the
number or percentage of students in kindergarten through
grade 3 who are reading below grade level.
‘‘(6) LIMITATION
TO
CERTAIN
SCHOOLS.—In distributing
subgrant funds under this subsection, an eligible local edu-
cational agency shall provide funds only to schools that both—
‘‘(A) are among the schools served by that eligible
local educational agency with the highest percentages or
numbers of students in kindergarten through grade 3
reading below grade level, based on the most currently
available data; and
‘‘(B)(i) are identified for school improvement under sec-
tion 1116(b); or
‘‘(ii) have the highest percentages or numbers of chil-
dren counted under section 1124(c).
‘‘(7) LOCAL USES OF FUNDS.—
‘‘(A) REQUIRED
USES.—Subject to paragraph (8), an
eligible local educational agency that receives a subgrant
under this subsection shall use the funds provided under
the subgrant to carry out the following activities:
‘‘(i) Selecting and administering screening, diag-
nostic, and classroom-based instructional reading
assessments.
‘‘(ii) Selecting and implementing a learning system
or program of reading instruction based on scientif-
ically based reading research that—
‘‘(I) includes the essential components of
reading instruction; and
‘‘(II) provides such instruction to the children
in kindergarten through grade 3 in the schools
served by the eligible local educational agency,
including children who—
‘‘(aa) may have reading difficulties;
‘‘(bb) are at risk of being referred to special
education based on these difficulties;
‘‘(cc) have been evaluated under section
614 of the Individuals with Disabilities Edu-
cation Act but, in accordance with section
614(b)(5) of that Act, have not been identified
as being a child with a disability (as defined
in section 602 of that Act);
‘‘(dd) are being served under such Act pri-
marily due to being identified as being a child
with a specific learning disability (as defined
in section 602 of that Act) related to reading;
‘‘(ee) are deficient in the essential compo-
nents of reading skills, as listed in subpara-
graphs (A) through (E) of section 1208(3); or
‘‘(ff) are identified as having limited
English proficiency.
‘‘(iii) Procuring and implementing instructional
materials, including education technology such as soft-
ware and other digital curricula, that are based on
scientifically based reading research.
‘‘(iv) 
Providing 
professional 
development 
for
teachers of kindergarten through grade 3, and special
H. R. 1—115
education teachers of kindergarten through grade 12,
that—
‘‘(I) will prepare these teachers in all of the
essential components of reading instruction;
‘‘(II) shall include—
‘‘(aa) information on instructional mate-
rials, programs, strategies, and approaches
based on scientifically based reading research,
including 
early 
intervention, 
classroom
reading materials, and remedial programs and
approaches; and
‘‘(bb) instruction in the use of screening,
diagnostic, and classroom-based instructional
reading assessments 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 becoming highly
qualified in reading instruction in accordance with
the requirements of section 1119.
‘‘(v) Collecting and summarizing data—
‘‘(I) to document the effectiveness of activities
carried out under this subpart in individual schools
and in the local educational agency as a whole;
and
‘‘(II) to stimulate and accelerate improvement
by identifying the schools that produce significant
gains in reading achievement.
‘‘(vi) Reporting data for all students and categories
of students described in section 1111(b)(2)(C)(v)(II).
‘‘(vii) Promoting reading and library programs that
provide access to engaging reading material, including
coordination with programs funded through grants
received under subpart 4, where applicable.
‘‘(B) ADDITIONAL USES.—Subject to paragraph (8), an
eligible local educational agency that receives a subgrant
under this subsection may use the funds provided under
the subgrant to carry out the following activities:
‘‘(i) Humanities-based family literacy programs
(which may be referred to as ‘Prime Time Family
Reading Time’) that bond families around the acts
of reading and using public libraries.
‘‘(ii) Providing training in the essential components
of reading instruction to a parent or other individual
who volunteers to be a student’s reading tutor, to
enable such parent or individual to support instruc-
tional practices that are based on scientifically based
reading research and are being used by the student’s
teacher.
‘‘(iii) Assisting parents, through the use of mate-
rials and reading programs, strategies, and approaches
(including family literacy services) that are based on
scientifically based reading research, to encourage
reading and support their child’s reading development.
H. R. 1—116
‘‘(8) LOCAL
PLANNING
AND
ADMINISTRATION.—An eligible
local educational agency that receives a subgrant under this
subsection may use not more than 3.5 percent of the funds
provided under the subgrant for planning and administration.
‘‘(d) STATE USES OF FUNDS.—
‘‘(1) IN GENERAL.—A State educational agency that receives
a grant under this section may expend not more than a total
of 20 percent of the grant funds to carry out the activities
described in paragraphs (3), (4), and (5).
‘‘(2) PRIORITY.—A State educational agency shall give pri-
ority to carrying out the activities described in paragraphs
(3), (4), and (5) for schools described in subsection (c)(6).
‘‘(3) PROFESSIONAL
INSERVICE
AND
PRESERVICE
DEVELOP-
MENT AND REVIEW.—A State educational agency may expend
not more than 65 percent of the amount of the funds made
available under paragraph (1)—
‘‘(A) to develop and implement a program of profes-
sional development for teachers, including special education
teachers, of kindergarten through grade 3 that—
‘‘(i) will prepare these teachers in all the essential
components of reading instruction;
‘‘(ii) shall include—
‘‘(I) information on instructional materials,
programs, strategies, and approaches based on sci-
entifically based reading research, including early
intervention and reading remediation materials,
programs, and approaches; and
‘‘(II) instruction in the use of screening, diag-
nostic, and classroom-based instructional reading
assessments and other scientifically based proce-
dures that 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;
‘‘(B) to strengthen and enhance preservice courses for
students preparing, at all public institutions of higher edu-
cation in the State, to teach kindergarten through grade
3 by—
‘‘(i) reviewing such courses to determine whether
the courses’ content is consistent with the findings
of the most current scientifically based reading
research, including findings on the essential compo-
nents of reading instruction;
‘‘(ii) following up such reviews with recommenda-
tions to ensure that such institutions offer courses
that meet the highest standards; and
‘‘(iii) preparing a report on the results of such
reviews, submitting the report to the reading and lit-
eracy partnership for the State established under sec-
tion 1203(d), and making the report available for public
review by means of the Internet; and
‘‘(C) to make recommendations on how the State licen-
sure and certification standards in the area of reading
might be improved.
‘‘(4) TECHNICAL ASSISTANCE FOR LOCAL EDUCATIONAL AGEN-
CIES AND SCHOOLS.—A State educational agency may expend
H. R. 1—117
not more than 25 percent of the amount of the funds made
available under paragraph (1) for one or more of the following:
‘‘(A) Assisting local educational agencies in accom-
plishing the tasks required to design and implement a
program under this subpart, including—
‘‘(i) selecting and implementing a program or pro-
grams of reading instruction based on scientifically
based reading research;
‘‘(ii) selecting screening, diagnostic, and classroom-
based instructional reading assessments; and
‘‘(iii) identifying eligible professional development
providers to help prepare reading teachers to teach
students 
using 
the 
programs 
and 
assessments
described in clauses (i) and (ii).
‘‘(B) Providing expanded opportunities to students in
kindergarten through grade 3 who are served by eligible
local educational agencies for receiving reading assistance
from alternative providers that includes—
‘‘(i) screening, diagnostic, and classroom-based
instructional reading assessments; and
‘‘(ii) as need is indicated by the assessments under
clause (i), instruction based on scientifically based
reading research that includes the essential compo-
nents of reading instruction.
‘‘(5) PLANNING, ADMINISTRATION, AND REPORTING.—
‘‘(A) EXPENDITURE
OF
FUNDS.—A State educational
agency may expend not more than 10 percent of the amount
of funds made available under paragraph (1) for the activi-
ties described in this paragraph.
‘‘(B) PLANNING
AND
ADMINISTRATION.—A State edu-
cational agency that receives a grant under this section
may expend funds made available under subparagraph (A)
for planning and administration relating to the State uses
of funds authorized under this subpart, including the fol-
lowing:
‘‘(i) Administering the distribution of competitive
subgrants to eligible local educational agencies under
subsection (c) and section 1204(d).
‘‘(ii) Assessing and evaluating, on a regular basis,
eligible local educational agency activities assisted
under this subpart, with respect to whether they have
been effective in increasing the number of children
in grades 1, 2, and 3 served under this subpart who
can read at or above grade level.
‘‘(C) ANNUAL REPORTING.—
‘‘(i) IN GENERAL.—A State educational agency that
receives a grant under this section shall expend funds
made available under subparagraph (A) to provide the
Secretary annually with a report on the implementa-
tion of this subpart.
‘‘(ii) INFORMATION INCLUDED.—Each report under
this subparagraph shall include information on the
following:
‘‘(I) Evidence that the State educational agency
is fulfilling its obligations under this subpart.
H. R. 1—118
‘‘(II) Specific identification of those schools and
local educational agencies that report the largest
gains in reading achievement.
‘‘(III) The progress the State educational
agency and local educational agencies within the
State are making in reducing the number of stu-
dents served under this subpart in grades 1, 2,
and 3 who are reading below grade level, as dem-
onstrated by such information as teacher reports
and school evaluations of mastery of the essential
components of reading instruction.
‘‘(IV) Evidence on whether the State edu-
cational agency and local educational agencies
within the State have significantly increased the
number of students reading at grade level or above,
significantly increased the percentages of students
described in section 1111(b)(2)(C)(v)(II) who are
reading at grade level or above, and successfully
implemented this subpart.
‘‘(iii) PRIVACY
PROTECTION.—Data in the report
shall be reported in a manner that protects the privacy
of individuals.
‘‘(iv) CONTRACT.—To the extent practicable, a State
educational agency shall enter into a contract with
an entity that conducts scientifically based reading
research, under which contract the entity will assist
the State educational agency in producing the reports
required to be submitted under this subparagraph.
‘‘(e) REVIEW.—
‘‘(1) PROGRESS REPORT.—
‘‘(A) SUBMISSION.—Not later than 60 days after the
termination of the third year of the grant period, each
State educational agency receiving a grant under this sec-
tion shall submit a progress report to the Secretary.
‘‘(B) INFORMATION
INCLUDED.—The progress report
shall include information on the progress the State edu-
cational agency and local educational agencies within the
State are making in reducing the number of students
served under this subpart in grades 1, 2, and 3 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 edu-
cational agency and local educational agencies within the
State that the State educational agency and the local edu-
cational agencies have significantly increased the number
of students reading at grade level or above, significantly
increased the percentages of students described in section
1111(b)(2)(C)(v)(II) who are reading at grade level or above,
and successfully implemented this subpart.
‘‘(2) PEER REVIEW.—The progress report described in para-
graph (1) shall be reviewed by the peer review panel convened
under section 1203(c)(2).
‘‘(3) CONSEQUENCES
OF
INSUFFICIENT
PROGRESS.—After
submission of the progress report described in paragraph (1),
if the Secretary determines that the State educational agency
is not making significant progress in meeting the purposes
H. R. 1—119
of this subpart, the Secretary may withhold from the State
educational agency, in whole or in part, further payments under
this section in accordance with section 455 of the General
Education Provisions Act or take such other action authorized
by law as the Secretary determines necessary, including pro-
viding technical assistance upon request of the State edu-
cational agency.
‘‘(f) FUNDS NOT USED FOR STATE LEVEL ACTIVITIES.—Any por-
tion of funds described in subsection (d)(1) that a State educational
agency does not expend in accordance with subsection (d)(1) shall
be expended for the purpose of making subgrants in accordance
with subsection (c).
‘‘SEC. 1203. STATE FORMULA GRANT APPLICATIONS.
‘‘(a) APPLICATIONS.—
‘‘(1) IN GENERAL.—A State educational agency that desires
to receive a grant under section 1202 shall submit an applica-
tion to the Secretary at such time and in such form as the
Secretary may require. The application shall contain the
information described in subsection (b).
‘‘(2) SPECIAL
APPLICATION
PROVISIONS.—For those State
educational agencies that have received a grant under part
C of title II (as such part was in effect on the day before
the date of enactment of the No Child Left Behind Act of
2001), the Secretary shall establish a modified set of require-
ments for an application under this section that takes into
account the information already submitted and approved under
that program and minimizes the duplication of effort on the
part of such State educational agencies.
‘‘(b) CONTENTS.—An application under this section shall contain
the following:
‘‘(1) An assurance that the Governor of the State, in con-
sultation with the State educational agency, has established
a reading and literacy partnership described in subsection (d),
and a description of how such partnership—
‘‘(A) coordinated the development of the application;
and
‘‘(B) will assist in the oversight and evaluation of the
State educational agency’s activities under this subpart.
‘‘(2) A description, if applicable, of the State’s strategy
to expand, continue, or modify activities authorized under part
C of title II (as such part was in effect on the day before
the date of enactment of the No Child Left Behind Act of
2001).
‘‘(3) An assurance that the State educational agency, and
any local educational agencies receiving a subgrant from that
State educational agency under section 1202, will, if requested,
participate in the external evaluation under section 1205.
‘‘(4) A State educational agency plan containing a descrip-
tion of the following:
‘‘(A) How the State educational agency will assist local
educational agencies in identifying screening, diagnostic,
and classroom-based instructional reading assessments.
‘‘(B) How the State educational agency will assist local
educational agencies in identifying instructional materials,
programs, strategies, and approaches, based on scientif-
ically based reading research, including early intervention
H. R. 1—120
and 
reading 
remediation 
materials, 
programs, 
and
approaches.
‘‘(C) How the State educational agency will ensure
that professional development activities related to reading
instruction and provided under section 1202 are—
‘‘(i) coordinated with other Federal, State, and local
level funds, and used effectively to improve instruc-
tional practices for reading; and
‘‘(ii) based on scientifically based reading research.
‘‘(D) How the activities assisted under section 1202
will address the needs of teachers and other instructional
staff in implementing the essential components of reading
instruction.
‘‘(E) How subgrants made by the State educational
agency under section 1202 will meet the requirements of
section 1202, including how the State educational agency
will ensure that eligible local educational agencies receiving
subgrants under section 1202 will use practices based on
scientifically based reading research.
‘‘(F) How the State educational agency will, to the
extent practicable, make grants to eligible local educational
agencies in both rural and urban areas.
‘‘(G) How the State educational agency will build on,
and promote coordination among literacy programs in the
State (including federally funded programs such as pro-
grams under the Adult Education and Family Literacy
Act, the Individuals with Disabilities Education Act, and
subpart 2), to increase the effectiveness of the programs
in improving reading for adults and children and to avoid
duplication of the efforts of the program.
‘‘(H) How the State educational agency will assess and
evaluate, on a regular basis, eligible local educational
agency activities assisted under section 1202, with respect
to whether the activities have been effective in achieving
the purposes of section 1202.
‘‘(I) Any other information that the Secretary may
reasonably require.
‘‘(c) APPROVAL OF APPLICATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall approve an applica-
tion of a State educational agency under this section only
if such application meets the requirements of this section.
‘‘(2) PEER REVIEW.—
‘‘(A) IN GENERAL.—The Secretary, in consultation with
the National Institute for Literacy, shall convene a panel
to evaluate applications under this section. At a minimum,
the panel shall include—
‘‘(i) three individuals selected by the Secretary;
‘‘(ii) three individuals selected by the National
Institute for Literacy;
‘‘(iii) three individuals selected by the National
Research Council of the National Academy of Sciences;
and
‘‘(iv) three individuals selected by the National
Institute of Child Health and Human Development.
‘‘(B) EXPERTS.—The panel shall include—
H. R. 1—121
‘‘(i) experts who are competent, by virtue of their
training, expertise, or experience, to evaluate applica-
tions under this section;
‘‘(ii) experts who provide professional development
to individuals who teach reading to children and adults
based on scientifically based reading research;
‘‘(iii) experts who provide professional development
to other instructional staff based on scientifically based
reading research; and
‘‘(iv) an individual who has expertise in screening,
diagnostic, and classroom-based instructional reading
assessments.
‘‘(C) RECOMMENDATIONS.—The panel shall recommend
grant applications from State educational agencies under
this section to the Secretary for funding or for disapproval.
‘‘(d) READING AND LITERACY PARTNERSHIPS.—
‘‘(1) IN GENERAL.—For a State educational agency to receive
a grant under section 1202, the Governor of the State, in
consultation with the State educational agency, shall establish
a reading and literacy partnership.
‘‘(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 member 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 eligible
local educational agency.
‘‘(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, particularly a community-based organization
using tutors and scientifically based reading research.
‘‘(F) State directors of appropriate Federal or State
programs with a strong reading component, selected jointly
by the Governor and the chief State school officer.
‘‘(G) A parent of a public or private school student
or a parent who educates the parent’s child in the parent’s
home, selected jointly by the Governor and the chief State
school officer.
‘‘(H) A teacher, who may be a special education teacher,
who successfully teaches reading, and another instructional
staff member, selected jointly by the Governor and the
chief State school officer.
‘‘(I) A family literacy service provider selected jointly
by the Governor and the chief State school officer.
‘‘(3) OPTIONAL
PARTICIPANTS.—The reading and literacy
partnership may include additional participants, who shall be
selected jointly by the Governor and the chief State school
officer, and who may include a representative of—
‘‘(A) an institution of higher education operating a
program of teacher preparation in the State that is based
on scientifically based reading research;
‘‘(B) a local educational agency;
H. R. 1—122
‘‘(C) a private nonprofit or for-profit eligible profes-
sional development provider providing instruction based
on scientifically based reading research;
‘‘(D) an adult education provider;
‘‘(E) a volunteer organization that is involved in
reading programs; or
‘‘(F) a school library or a public library that offers
reading or literacy programs for children or families.
‘‘(4) PREEXISTING
PARTNERSHIP.—If, before the date of
enactment of the No Child Left Behind Act of 2001, a State
educational agency established a consortium, partnership, or
any other similar body that was considered a reading and
literacy partnership for purposes of part C of title II of this
Act (as such part was in effect on the day before the date
of enactment of No Child Left Behind Act of 2001), that consor-
tium, partnership, or body may be considered a reading and
literacy partnership for purposes of this subsection consistent
with the provisions of this subpart.
‘‘SEC. 1204. TARGETED ASSISTANCE GRANTS.
‘‘(a) ELIGIBILITY CRITERIA FOR AWARDING TARGETED ASSISTANCE
GRANTS TO STATES.—Beginning with fiscal year 2004, from funds
appropriated under section 1202(b)(1)(E), the Secretary shall make
grants, on a competitive basis, to those State educational agencies
that—
‘‘(1) for each of 2 consecutive years, demonstrate that an
increasing percentage of third graders in each of the groups
described in section 1111(b)(2)(C)(v)(II) in the schools served
by the local educational agencies receiving funds under section
1202 are reaching the proficient level in reading; and
‘‘(2) for each of the same such consecutive 2 years, dem-
onstrate that schools receiving funds under section 1202 are
improving the reading skills of students in grades 1, 2, and
3 based on screening, diagnostic, and classroom-based instruc-
tional reading assessments.
‘‘(b) CONTINUATION OF PERFORMANCE AWARDS.—For any State
educational agency that receives a competitive grant under this
section, the Secretary shall make an award for each of the suc-
ceeding years that the State educational agency demonstrates it
is continuing to meet the criteria described in subsection (a).
‘‘(c) DISTRIBUTION OF TARGETED ASSISTANCE GRANTS.—
‘‘(1) IN GENERAL.—The Secretary shall make a grant to
each State educational agency with an application approved
under this section in an amount that bears the same relation
to the amount made available to carry out this section for
a fiscal year as the number of children counted under section
1124(c) for the State bears to the number of such children
so counted for all States with applications approved for that
year.
‘‘(2) PEER REVIEW.—The peer review panel convened under
section 1203(c)(2) shall review the applications submitted under
this subsection. The panel shall recommend such applications
to the Secretary for funding or for disapproval.
‘‘(3) APPLICATION CONTENTS.—A State educational agency
that desires to receive a grant under this section shall submit
an application to the Secretary at such time, in such manner,
H. R. 1—123
and accompanied by such information as the Secretary may
require. Each such application shall include the following:
‘‘(A) Evidence that the State educational agency has
carried out its obligations under section 1203.
‘‘(B) Evidence that the State educational agency has
met the criteria described in subsection (a).
‘‘(C) The amount of funds requested by the State edu-
cational agency and a description of the criteria the State
educational agency intends to use in distributing subgrants
to eligible local educational agencies under this section
to continue or expand activities under subsection (d)(5).
‘‘(D) Evidence that the State educational agency has
increased significantly the percentage of students reading
at grade level or above.
‘‘(E) Any additional evidence that demonstrates success
in the implementation of this section.
‘‘(d) SUBGRANTS TO ELIGIBLE LOCAL EDUCATIONAL AGENCIES.—
‘‘(1) IN GENERAL.—The Secretary may make a grant to
a State educational agency under this section only if the State
educational agency 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
eligible local educational agencies.
‘‘(2) NOTICE.—A State educational agency receiving a grant
under this section shall provide notice to all local educational
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, an eligible local educational agency shall
submit an application to the State educational agency at such
time, in such manner, and containing such information as
the State educational agency may reasonably require.
‘‘(4) DISTRIBUTION.—
‘‘(A) IN GENERAL.—A State educational agency shall
distribute subgrants under this section through a competi-
tive process based on relative need of eligible local edu-
cational agencies and the evidence described in this para-
graph.
‘‘(B) EVIDENCE USED IN ALL YEARS.—For all fiscal years,
a State educational agency shall distribute subgrants under
this section based on evidence that an eligible local edu-
cational agency—
‘‘(i) satisfies the requirements of section 1202(c)(4);
‘‘(ii) will carry out its obligations under this sub-
part;
‘‘(iii) will work with other local educational agen-
cies in the State that have not received a subgrant
under this subsection to assist such nonreceiving agen-
cies in increasing the reading achievement of students;
and
‘‘(iv) is meeting the criteria described in subsection
(a).
‘‘(5) LOCAL USES OF FUNDS.—An eligible local educational
agency that receives a subgrant under this subsection—
H. R. 1—124
‘‘(A) shall use the funds provided under the subgrant
to carry out the activities described in section 1202(c)(7)(A);
and
‘‘(B) may use such funds to carry out the activities
described in section 1202(c)(7)(B).
‘‘SEC. 1205. EXTERNAL EVALUATION.
‘‘(a) 
IN
GENERAL.—From 
funds 
reserved 
under 
section
1202(b)(1)(C), the Secretary shall contract with an independent
organization outside of the Department for a 5-year, rigorous, sci-
entifically valid, quantitative evaluation of this subpart.
‘‘(b) PROCESS.—The evaluation under subsection (a) shall be
conducted by an organization that is capable of designing and
carrying out an independent evaluation that identifies the effects
of specific activities carried out by State educational agencies and
local educational agencies under this subpart on improving reading
instruction. Such evaluation shall take into account factors influ-
encing student performance that are not controlled by teachers
or education administrators.
‘‘(c) ANALYSIS.—The evaluation under subsection (a) shall
include the following:
‘‘(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 State
educational agencies and local educational agencies measure
the essential components of reading.
‘‘(3) An analysis of how State reading standards correlate
with the essential components of reading instruction.
‘‘(4) An analysis of whether the receipt of a targeted assist-
ance grant under section 1204 results in an increase in the
number of children who read proficiently.
‘‘(5) A measurement of the extent to which specific instruc-
tional materials improve reading proficiency.
‘‘(6) A measurement of the extent to which specific
screening, 
diagnostic, 
and 
classroom-based 
instructional
reading assessments assist teachers in identifying specific
reading deficiencies.
‘‘(7) A measurement of the extent to which professional
development programs implemented by State educational agen-
cies using funds received under this subpart improve reading
instruction.
‘‘(8) A measurement of how well students preparing to
enter the teaching profession are prepared to teach the essential
components of reading instruction.
‘‘(9) An analysis of changes in students’ interest in reading
and time spent reading outside of school.
‘‘(10) Any other analysis or measurement pertinent to this
subpart that is determined to be appropriate by the Secretary.
‘‘(d) PROGRAM IMPROVEMENT.—The findings of the evaluation
conducted under this section shall be provided to State educational
agencies and local educational agencies on a periodic basis for
use in program improvement.
‘‘SEC. 1206. NATIONAL ACTIVITIES.
‘‘From 
funds 
reserved 
under 
section 
1202(b)(1)(C), 
the
Secretary—
H. R. 1—125
‘‘(1) may provide technical assistance in achieving the pur-
poses of this subpart to State educational agencies, local edu-
cational agencies, and schools requesting such assistance;
‘‘(2) shall, at a minimum, evaluate the impact of services
provided to children under this subpart with respect to their
referral to, and eligibility for, special education services under
the Individuals with Disabilities Education Act (based on their
difficulties learning to read); and
‘‘(3) shall carry out the external evaluation as described
in section 1205.
‘‘SEC. 1207. INFORMATION DISSEMINATION.
‘‘(a) 
IN
GENERAL.—From 
funds 
reserved 
under 
section
1202(b)(1)(D), the National Institute for Literacy, in collaboration
with the Secretary of Education, the Secretary of Health and
Human Services, and the Director of the National Institute for
Child Health and Human Development shall—
‘‘(1) disseminate information on scientifically based reading
research pertaining to children, youth, and adults;
‘‘(2) identify and disseminate information about schools,
local educational agencies, and State educational agencies that
have effectively developed and implemented classroom reading
programs that meet the requirements of this subpart, including
those State educational agencies, local educational agencies,
and schools that have been identified as effective through the
evaluation and peer review provisions of this subpart; and
‘‘(3) support the continued identification and dissemination
of information on reading programs that contain the essential
components of reading instruction as supported by scientifically
based reading research, that can lead to improved reading
outcomes for children, youth, and adults.
‘‘(b) DISSEMINATION AND COORDINATION.—At a minimum, the
National Institute for Literacy shall disseminate the information
described in subsection (a) to—
‘‘(1) recipients of Federal financial assistance under this
title, title III, the Head Start Act, the Individuals with Disabil-
ities Education Act, and the Adult Education and Family Lit-
eracy Act; and
‘‘(2) each Bureau funded school (as defined in section 1141
of the Education Amendments of 1978).
‘‘(c) USE OF EXISTING NETWORKS.—In carrying out this section,
the National Institute for Literacy shall, to the extent practicable,
use existing information and dissemination networks developed and
maintained through other public and private entities including
through the Department and the National Center for Family Lit-
eracy.
‘‘(d) NATIONAL INSTITUTE FOR LITERACY.—For purposes of funds
reserved under section 1202(b)(1)(D) to carry out this section, the
National Institute for Literacy shall administer such funds in
accordance with section 242(b) of Public Law 105–220 (relating
to the establishment and administration of the National Institute
for Literacy).
‘‘SEC. 1208. DEFINITIONS.
‘‘In this subpart:
‘‘(1) ELIGIBLE
LOCAL
EDUCATIONAL
AGENCY.—The term
‘eligible local educational agency’ means a local educational
agency that—
H. R. 1—126
‘‘(A) is among the local educational agencies in the
State with the highest numbers or percentages of students
in kindergarten through grade 3 reading below grade level,
based on the most currently available data; and
‘‘(B) has—
‘‘(i) jurisdiction over a geographic area that
includes an area designated as an empowerment zone,
or an enterprise community, under part I of subchapter
U of chapter 1 of the Internal Revenue Code of 1986;
‘‘(ii) jurisdiction over a significant number or
percentage of schools that are identified for school
improvement under section 1116(b); or
‘‘(iii) the highest numbers or percentages of chil-
dren who are counted under section 1124(c), in
comparison to other local educational agencies in the
State.
‘‘(2) ELIGIBLE PROFESSIONAL DEVELOPMENT PROVIDER.—The
term ‘eligible professional development provider’ means a pro-
vider of professional development in reading instruction to
teachers, including special education teachers, that is based
on scientifically based reading research.
‘‘(3) ESSENTIAL COMPONENTS OF READING INSTRUCTION.—
The term ‘essential components of reading instruction’ means
explicit and systematic instruction in—
‘‘(A) phonemic awareness;
‘‘(B) phonics;
‘‘(C) vocabulary development;
‘‘(D) reading fluency, including oral reading skills; and
‘‘(E) reading comprehension strategies.
‘‘(4) INSTRUCTIONAL STAFF.—The term ‘instructional staff’—
‘‘(A) means individuals who have responsibility for
teaching children to read; and
‘‘(B) includes principals, teachers, supervisors 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.
‘‘(5) 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 understand how pho-
nemes, or speech sounds, are connected to print.
‘‘(B) The ability to decode unfamiliar words.
‘‘(C) The ability to read fluently.
‘‘(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.
‘‘(6) SCIENTIFICALLY BASED READING RESEARCH.—The term
‘scientifically based reading research’ means research that—
‘‘(A) applies rigorous, systematic, and objective proce-
dures to obtain valid knowledge relevant to reading
development, reading instruction, and reading difficulties;
and
‘‘(B) includes research that—
H. R. 1—127
‘‘(i) employs systematic, empirical methods that
draw on observation or experiment;
‘‘(ii) involves rigorous data analyses that are ade-
quate to test the stated hypotheses and justify the
general conclusions drawn;
‘‘(iii) relies on measurements or observational
methods that provide valid data across evaluators and
observers and across multiple measurements and
observations; and
‘‘(iv) has been accepted by a peer-reviewed journal
or approved by a panel of independent experts through
a comparably rigorous, objective, and scientific review.
‘‘(7) 
SCREENING, 
DIAGNOSTIC, 
AND
CLASSROOM-BASED
INSTRUCTIONAL READING ASSESSMENTS.—
‘‘(A) IN GENERAL.—The term ‘screening, diagnostic, and
classroom-based 
instructional 
reading 
assessments’
means—
‘‘(i) screening reading assessments;
‘‘(ii) diagnostic reading assessments; and
‘‘(iii) classroom-based instructional reading assess-
ments.
‘‘(B) SCREENING
READING
ASSESSMENT.—The term
‘screening reading assessment’ means an assessment that
is—
‘‘(i) valid, reliable, and based on scientifically based
reading research; and
‘‘(ii) a brief procedure designed as a first step in
identifying children who may be at high risk for
delayed development or academic failure and in need
of further diagnosis of their need for special services
or additional reading instruction.
‘‘(C) DIAGNOSTIC
READING
ASSESSMENT.—The term
‘diagnostic reading assessment’ means an assessment that
is—
‘‘(i) valid, reliable, and based on scientifically based
reading research; and
‘‘(ii) used for the purpose of—
‘‘(I) identifying a child’s specific areas of
strengths and weaknesses so that the child has
learned to read by the end of grade 3;
‘‘(II) determining any difficulties that a child
may have in learning to read and the potential
cause of such difficulties; and
‘‘(III) helping to determine possible reading
intervention strategies and related special needs.
‘‘(D) 
CLASSROOM-BASED
INSTRUCTIONAL
READING
ASSESSMENT.—The term ‘classroom-based instructional
reading assessment’ means an assessment that—
‘‘(i) evaluates children’s learning based on system-
atic observations by teachers of children performing
academic tasks that are part of their daily classroom
experience; and
‘‘(ii) is used to improve instruction in reading,
including classroom instruction.
H. R. 1—128
‘‘Subpart 2—Early Reading First
‘‘SEC. 1221. PURPOSES; DEFINITIONS.
‘‘(a) PURPOSES.—The purposes of this subpart are as follows:
‘‘(1) To support local efforts to enhance the early language,
literacy, and prereading development of preschool age children,
particularly those from low-income families, through strategies
and professional development that are based on scientifically
based reading research.
‘‘(2) To provide preschool age children with cognitive
learning opportunities in high-quality language and literature-
rich environments, so that the children can attain the funda-
mental knowledge and skills necessary for optimal reading
development in kindergarten and beyond.
‘‘(3) To demonstrate language and literacy activities based
on scientifically based reading research that supports the age-
appropriate development of—
‘‘(A) recognition, leading to automatic recognition, of
letters of the alphabet;
‘‘(B) knowledge of letter sounds, the blending of sounds,
and the use of increasingly complex vocabulary;
‘‘(C) an understanding that written language is com-
posed of phonemes and letters each representing one or
more speech sounds that in combination make up syllables,
words, and sentences;
‘‘(D) spoken language, including vocabulary and oral
comprehension abilities; and
‘‘(E) knowledge of the purposes and conventions of
print.
‘‘(4) To use screening assessments to effectively identify
preschool age children who may be at risk for reading failure.
‘‘(5) To integrate such scientific reading research-based
instructional materials and literacy activities with existing pro-
grams of preschools, child care agencies and programs, Head
Start centers, and family literacy services.
‘‘(b) DEFINITIONS.—For purposes of this subpart:
‘‘(1) ELIGIBLE
APPLICANT.—The term ‘eligible applicant’
means—
‘‘(A) one or more local educational agencies that are
eligible to receive a subgrant under subpart 1;
‘‘(B) one or more public or private organizations or
agencies, acting on behalf of one or more programs that
serve preschool age children (such as a program at a Head
Start center, a child care program, or a family literacy
program), which organizations or agencies shall be located
in a community served by a local educational agency
described in subparagraph (A); or
‘‘(C) one or more local educational agencies described
in subparagraph (A) in collaboration with one or more
organizations or agencies described in subparagraph (B).
‘‘(2) SCIENTIFICALLY BASED READING RESEARCH.—The term
‘scientifically based reading research’ has the same meaning
given to that term in section 1208.
‘‘(3) SCREENING READING ASSESSMENT.—The term ‘screening
reading assessment’ has the same meaning given to that term
in section 1208.
H. R. 1—129
‘‘SEC. 1222. LOCAL EARLY READING FIRST GRANTS.
‘‘(a) PROGRAM AUTHORIZED.—From amounts appropriated under
section 1002(b)(2), the Secretary shall award grants, on a competi-
tive basis, for periods of not more than 6 years, to eligible applicants
to enable the eligible applicants to carry out the authorized activi-
ties described in subsection (d).
‘‘(b) APPLICATIONS.—An eligible applicant that desires to receive
a grant under this section shall submit an application to the Sec-
retary, which shall include a description of—
‘‘(1) the programs to be served by the proposed project,
including demographic and socioeconomic information on the
preschool age children enrolled in the programs;
‘‘(2) how the proposed project will enhance the school readi-
ness of preschool age children in high-quality oral language
and literature-rich environments;
‘‘(3) how the proposed project will prepare and provide
ongoing assistance to staff in the programs, through profes-
sional development and other support, to provide high-quality
language, literacy, and prereading activities using scientifically
based reading research, for preschool age children;
‘‘(4) how the proposed project will provide services and
use instructional materials that are based on scientifically
based 
reading 
research 
on 
early 
language 
acquisition,
prereading activities, and the development of spoken vocabulary
skills;
‘‘(5) how the proposed project will help staff in the programs
to meet more effectively the diverse needs of preschool age
children in the community, including such children with limited
English proficiency, disabilities, or other special needs;
‘‘(6) how the proposed project will integrate such instruc-
tional materials and literacy activities with existing preschool
programs and family literacy services;
‘‘(7) how the proposed project will help children, particularly
children 
experiencing 
difficulty 
with 
spoken 
language,
prereading, and early reading skills, to make the transition
from preschool to formal classroom instruction in school;
‘‘(8) if the eligible applicant has received a subgrant under
subpart 1, how the activities conducted under this subpart
will be coordinated with the eligible applicant’s activities under
subpart 1 at the kindergarten through grade 3 level;
‘‘(9) how the proposed project will evaluate the success
of the activities supported under this subpart in enhancing
the early language, literacy, and prereading development of
preschool age children served by the project; and
‘‘(10) such other information as the Secretary may require.
‘‘(c) APPROVAL OF LOCAL APPLICATIONS.—The Secretary shall
select applicants for funding under this subpart based on the quality
of the applications and the recommendations of a peer review panel
convened under section 1203(c)(2), that includes, at a minimum,
three individuals, selected from the entities described in clauses
(ii), (iii), and (iv) of section 1203(c)(2)(A), who are experts in early
reading development and early childhood development.
‘‘(d) AUTHORIZED
ACTIVITIES.—An eligible applicant that
receives a grant under this subpart shall use the funds provided
under the grant to carry out the following activities:
H. R. 1—130
‘‘(1) Providing preschool age children with high-quality oral
language and literature-rich environments in which to acquire
language and prereading skills.
‘‘(2) Providing professional development that is based on
scientifically based reading research knowledge of early lan-
guage and reading development for the staff of the eligible
applicant and that will assist in developing the preschool age
children’s—
‘‘(A) recognition, leading to automatic recognition, of
letters of the alphabet, knowledge of letters, sounds,
blending of letter sounds, and increasingly complex vocabu-
lary;
‘‘(B) understanding that written language is composed
of phonemes and letters each representing one or more
speech sounds that in combination make up syllables,
words, and sentences;
‘‘(C) spoken language, including vocabulary and oral
comprehension abilities; and
‘‘(D) knowledge of the purposes and conventions of
print.
‘‘(3) Identifying and providing activities and instructional
materials that are based on scientifically based reading
research for use in developing the skills and abilities described
in paragraph (2).
‘‘(4) Acquiring, providing training for, and implementing
screening reading assessments or other appropriate measures
that are based on scientifically based reading research to deter-
mine whether preschool age children are developing the skills
described in this subsection.
‘‘(5) Integrating such instructional materials, activities,
tools, and measures into the programs offered by the eligible
applicant.
‘‘(e) AWARD AMOUNTS.—The Secretary may establish a max-
imum 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 to coordinate the activities under this subpart
with preschool age programs administered by the Department of
Health and Human Services.
‘‘SEC. 1224. INFORMATION DISSEMINATION.
‘‘From the funds the National Institute for Literacy receives
under section 1202(b)(1)(D), the National Institute for Literacy,
in consultation with the Secretary, shall disseminate information
regarding projects assisted under this subpart that have proven
effective.
‘‘SEC. 1225. 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.
Such report shall include, at a minimum, a description of—
‘‘(1) the research-based instruction, materials, and activities
being used in the programs funded under the grant;
‘‘(2) the types of programs funded under the grant and
the ages of children served by such programs;
H. R. 1—131
‘‘(3) the qualifications of the program staff who provide
early literacy instruction under such programs and the type
of ongoing professional development provided to such staff;
and
‘‘(4) the results of the evaluation described in section
1222(b)(9).
‘‘SEC. 1226. EVALUATION.
‘‘(a) IN GENERAL.—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 $3,000,000 to conduct an independent evaluation of the
effectiveness of this subpart.
‘‘(b) REPORTS.—
‘‘(1) INTERIM
REPORT.—Not later than October 1, 2004,
the Secretary shall submit an interim report to the Committee
on Education and the Workforce of the House of Representa-
tives and the Committee on Health, Education, Labor, and
Pensions of the Senate.
‘‘(2) FINAL REPORT.—Not later than September 30, 2006,
the Secretary shall submit a final report to the committees
described in paragraph (1).
‘‘(c) CONTENTS.—The reports submitted under subsection (b)
shall include information on the following:
‘‘(1) How the grant recipients under this subpart are
improving the prereading skills of preschool children.
‘‘(2) The effectiveness of the professional development pro-
gram assisted under this subpart.
‘‘(3) How early childhood teachers are being prepared with
scientifically based reading research on early reading develop-
ment.
‘‘(4) What activities and instructional practices are most
effective.
‘‘(5) How prereading instructional materials and literacy
activities based on scientifically based reading research are
being integrated into preschools, child care agencies and pro-
grams, programs carried out under the Head Start Act, and
family literacy programs.
‘‘(6) Any recommendations on strengthening or modifying
this subpart.
‘‘Subpart 3—William F. Goodling Even Start
Family Literacy Programs
‘‘SEC. 1231. STATEMENT OF PURPOSE.
‘‘It is the purpose of this subpart to help break the cycle
of poverty and illiteracy by—
‘‘(1) improving the educational opportunities of the Nation’s
low-income families by integrating early childhood education,
adult literacy or adult basic education, and parenting education
into a unified family literacy program, to be referred to as
‘Even Start’; and
‘‘(2) establishing a program that shall—
‘‘(A) be implemented through cooperative projects that
build on high-quality existing community resources to
create a new range of services;
H. R. 1—132
‘‘(B) promote the academic achievement of children
and adults;
‘‘(C) assist children and adults from low-income fami-
lies to achieve to challenging State content standards and
challenging State student achievement standards; and
‘‘(D) use instructional programs based on scientifically
based reading research and addressing the prevention of
reading difficulties for children and adults, to the extent
such research is available.
‘‘SEC. 1232. PROGRAM AUTHORIZED.
‘‘(a) RESERVATION FOR MIGRANT PROGRAMS, OUTLYING AREAS,
AND INDIAN TRIBES.—
‘‘(1) IN GENERAL.—For each fiscal year, the Secretary shall
reserve 5 percent of the amount appropriated under section
1002(b)(3) 
(or, 
if 
such 
appropriated 
amount 
exceeds
$200,000,000, 6 percent of such amount) for programs, under
such terms and conditions as the Secretary shall establish,
that are consistent with the purpose of this subpart, and
according to their relative needs, for—
‘‘(A) children of migratory workers;
‘‘(B) the outlying areas; and
‘‘(C) Indian tribes and tribal organizations.
‘‘(2) SPECIAL RULE.—After December 21, 2000, the Secretary
shall award a grant, on a competitive basis, of sufficient size
and for a period of sufficient duration to demonstrate the
effectiveness of a family literacy program in a prison that
houses women and their preschool age children and that has
the capability of developing a program of high quality.
‘‘(3) COORDINATION OF PROGRAMS FOR AMERICAN INDIANS.—
The Secretary shall ensure that programs under paragraph
(1)(C) are coordinated with family literacy programs operated
by the Bureau of Indian Affairs in order to avoid duplication
and to encourage the dissemination of information on high-
quality family literacy programs serving American Indians.
‘‘(b) RESERVATION FOR FEDERAL ACTIVITIES.—
‘‘(1) 
EVALUATION, 
TECHNICAL
ASSISTANCE, 
PROGRAM
IMPROVEMENT, AND REPLICATION ACTIVITIES.—Subject to para-
graph (2), from amounts appropriated under section 1002(b)(3),
the Secretary may reserve not more than 3 percent of such
amounts for purposes of—
‘‘(A) carrying out the evaluation required by section
1239; and
‘‘(B) providing, through grants or contracts with eligible
organizations, technical assistance, program improvement,
and replication activities.
‘‘(2) RESEARCH.—In any fiscal year, if the amount appro-
priated under section 1002(b)(3) for such year—
‘‘(A) is equal to or less than the amount appropriated
for the preceding fiscal year, the Secretary may reserve
from such amount only the amount necessary to continue
multi-year activities carried out pursuant to section 1241(b)
that began during or prior to the fiscal year preceding
the fiscal year for which the determination is made; or
‘‘(B) exceeds the amount appropriated for the preceding
fiscal year, then the Secretary shall reserve from such
H. R. 1—133
excess amount $2,000,000 or 50 percent, whichever is less,
to carry out section 1241(b).
‘‘(c) RESERVATION FOR GRANTS.—
‘‘(1) GRANTS AUTHORIZED.—
‘‘(A) IN GENERAL.—For any fiscal year for which at
least one State educational agency applies and submits
an application that meets the requirements and goals of
this subsection and for which the amount appropriated
under section 1002(b)(3) exceeds the amount appropriated
under that section for the preceding fiscal year, the Sec-
retary shall reserve, from the amount of the excess
remaining after the application of subsection (b)(2), the
amount of the remainder or $1,000,000, whichever is less,
to award grants, on a competitive basis, to State edu-
cational agencies to enable them to plan and implement
statewide family literacy initiatives to coordinate and,
where appropriate, integrate existing Federal, State, and
local literacy resources consistent with the purposes of
this subpart.
‘‘(B) COORDINATION AND INTEGRATION.—The coordina-
tion and integration described in subparagraph (A) shall
include coordination and integration of funds available
under the Adult Education and Family Literacy Act, the
Head Start Act, this subpart, part A of this title, and
part A of title IV of the Social Security Act.
‘‘(C) RESTRICTION.—No State educational agency may
receive more than one grant under this subsection.
‘‘(2) CONSORTIA.—
‘‘(A) ESTABLISHMENT.—To receive a grant under this
subsection, a State educational agency shall establish a
consortium of State-level programs under the following
provisions of laws:
‘‘(i) This title (other than part D).
‘‘(ii) The Head Start Act.
‘‘(iii) The Adult Education and Family Literacy
Act.
‘‘(iv) All other State-funded preschool programs
and programs providing literacy services to adults.
‘‘(B) PLAN.—To receive a grant under this subsection,
the consortium established by a State educational agency
shall create a plan to use a portion of the State educational
agency’s resources, derived from the programs referred to
in subparagraph (A), to strengthen and expand family lit-
eracy services in the State.
‘‘(C) COORDINATION WITH SUBPART 1.—The consortium
shall coordinate its activities under this paragraph with
the activities of the reading and literacy partnership for
the State educational agency established under section
1203(d), if the State educational agency receives a grant
under section 1202.
‘‘(3) READING INSTRUCTION.—Statewide family literacy ini-
tiatives implemented under this subsection shall base reading
instruction on scientifically based reading research.
‘‘(4) TECHNICAL ASSISTANCE.—The Secretary shall provide,
directly or through a grant or contract with an organization
with experience in the development and operation of successful
H. R. 1—134
family literacy services, technical assistance to State edu-
cational agencies receiving a grant under this subsection.
‘‘(5) MATCHING
REQUIREMENT.—The Secretary shall not
make a grant to a State educational agency under this sub-
section unless the State educational agency agrees that, with
respect to the costs to be incurred by the eligible consortium
in carrying out the activities for which the grant was awarded,
the State educational agency will make available non-Federal
contributions in an amount equal to not less than the Federal
funds provided under the grant.
‘‘(d) STATE EDUCATIONAL AGENCY ALLOCATION.—
‘‘(1) IN GENERAL.—From amounts appropriated under sec-
tion 1002(b)(3) and not reserved under subsection (a), (b), or
(c), the Secretary shall make grants to State educational agen-
cies from allocations under paragraph (2).
‘‘(2) ALLOCATIONS.—Except as provided in paragraph (3),
from the total amount available under paragraph (1) for alloca-
tion to State educational agencies in any fiscal year, each
State educational agency shall be eligible to receive a grant
under paragraph (1) in an amount that bears the same ratio
to the total amount as the amount allocated under part A
to that State educational agency bears to the total amount
allocated under that part to all State educational agencies.
‘‘(3) MINIMUM.—No State educational agency shall receive
a grant under paragraph (1) in any fiscal year in an amount
that is less than $250,000, or one-half of 1 percent of the
amount appropriated under section 1002(b)(3) and not reserved
under subsections (a), (b), and (c) for such year, whichever
is greater.
‘‘(e) DEFINITIONS.—For the purpose of this subpart—
‘‘(1) the term ‘eligible entity’ means a partnership composed
of—
‘‘(A) a local educational agency; and
‘‘(B) a nonprofit community-based organization, a
public agency other than a local educational agency, an
institution of higher education, or a public or private non-
profit organization other than a local educational agency,
of demonstrated quality;
‘‘(2) the term ‘eligible organization’ means any public or
private nonprofit organization with a record of providing effec-
tive services to family literacy providers, such as the National
Center for Family Literacy, Parents as Teachers, Inc., the Home
Instruction Program for Preschool Youngsters, and the Home
and School Institute, Inc.;
‘‘(3) the terms ‘Indian tribe’ and ‘tribal organization’ have
the meanings given those terms in section 4 of the Indian
Self-Determination and Education Assistance Act;
‘‘(4) the term ‘scientifically based reading research’ has
the meaning given that term in section 1208; and
‘‘(5) the term ‘State’ means each of the 50 States, the
District of Columbia, and the Commonwealth of Puerto Rico.
‘‘SEC. 1233. STATE EDUCATIONAL AGENCY PROGRAMS.
‘‘(a) STATE EDUCATIONAL AGENCY LEVEL ACTIVITIES.—Each
State educational agency that receives a grant under section
1232(d)(1) may use not more than a total of 6 percent of the
grant funds for the costs of—
H. R. 1—135
‘‘(1) administration, which amount shall not exceed half
of the total;
‘‘(2) providing, through one or more subgrants or contracts,
technical assistance for program improvement and replication,
to eligible entities that receive subgrants under subsection (b);
and
‘‘(3) carrying out sections 1240 and 1234(c).
‘‘(b) SUBGRANTS FOR LOCAL PROGRAMS.—
‘‘(1) IN GENERAL.—Each State educational agency shall use
the grant funds received under section 1232(d)(1) and not
reserved under subsection (a) to award subgrants to eligible
entities to carry out Even Start programs.
‘‘(2) MINIMUM SUBGRANT AMOUNTS.—
‘‘(A) IN
GENERAL.—Except as provided in subpara-
graphs (B) and (C), no State educational agency shall award
a subgrant under paragraph (1) in an amount less than
$75,000.
‘‘(B) SUBGRANTEES IN NINTH AND SUCCEEDING YEARS.—
No State educational agency shall award a subgrant under
paragraph (1) in an amount less than $52,500 to an eligible
entity for a fiscal year to carry out an Even Start program
that is receiving assistance under this subpart or its prede-
cessor authority for the ninth (or any subsequent) fiscal
year.
‘‘(C) EXCEPTION FOR SINGLE SUBGRANT.—A State edu-
cational agency may award one subgrant in each fiscal
year of sufficient size, scope, and quality to be effective
in an amount less than $75,000 if, after awarding subgrants
under paragraph (1) for that fiscal year in accordance with
subparagraphs (A) and (B), less than $75,000 is available
to the State educational agency to award those subgrants.
‘‘SEC. 1234. USES OF FUNDS.
‘‘(a) IN GENERAL.—In carrying out an Even Start program
under this subpart, a recipient of funds under this subpart shall
use those funds to pay the Federal share of the cost of providing
intensive family literacy services that involve parents and children,
from birth through age 7, in a cooperative effort to help parents
become full partners in the education of their children and to
assist children in reaching their full potential as learners.
‘‘(b) FEDERAL SHARE LIMITATION.—
‘‘(1) IN GENERAL.—
‘‘(A) FEDERAL SHARE.—Except as provided in paragraph
(2), the Federal share under this subpart may not exceed—
‘‘(i) 90 percent of the total cost of the program
in the first year that the program receives assistance
under this subpart or its predecessor authority;
‘‘(ii) 80 percent in the second year;
‘‘(iii) 70 percent in the third year;
‘‘(iv) 60 percent in the fourth year;
‘‘(v) 50 percent in the fifth, sixth, seventh, and
eighth such years; and
‘‘(vi) 35 percent in any subsequent year.
‘‘(B) REMAINING COST.—The remaining cost of a pro-
gram assisted under this subpart may be provided in cash
or in kind, fairly evaluated, and may be obtained from
any source, including other Federal funds under this Act.
H. R. 1—136
‘‘(2) WAIVER.—The State educational agency may waive,
in whole or in part, the Federal share described in paragraph
(1) for an eligible entity if the entity—
‘‘(A) demonstrates that it otherwise would not be able
to participate in the program assisted under this subpart;
and
‘‘(B) negotiates an agreement with the State edu-
cational agency with respect to the amount of the remaining
cost to which the waiver will be applicable.
‘‘(3) PROHIBITION.—Federal funds provided under this sub-
part may not be used for the indirect costs of a program
assisted under this subpart, except that the Secretary may
waive this paragraph if an eligible recipient of funds reserved
under section 1232(a)(1)(C) demonstrates to the Secretary’s
satisfaction that the recipient otherwise would not be able
to participate in the program assisted under this subpart.
‘‘(c) USE OF FUNDS FOR FAMILY LITERACY SERVICES.—
‘‘(1) IN
GENERAL.—A State educational agency may use
a portion of funds reserved under section 1233(a), to assist
eligible entities receiving a subgrant under section 1233(b) in
improving the quality of family literacy services provided under
Even Start programs under this subpart, except that in no
case may a State educational agency’s use of funds for this
purpose for a fiscal year result in a decrease from the level
of activities and services provided to program participants in
the preceding year.
‘‘(2) PRIORITY.—In carrying out paragraph (1), a State edu-
cational agency shall give priority to programs that were of
low quality, as evaluated based on the indicators of program
quality developed by the State educational agency under section
1240.
‘‘(3) TECHNICAL ASSISTANCE TO HELP LOCAL PROGRAMS RAISE
ADDITIONAL
FUNDS.—In carrying out paragraph (1), a State
educational agency may use the funds referred to in that para-
graph to provide technical assistance to help local programs
of demonstrated effectiveness to access and leverage additional
funds for the purpose of expanding services and reducing
waiting lists, including requesting and applying for non-Federal
resources.
‘‘(4) TECHNICAL
ASSISTANCE
AND
TRAINING.—Assistance
under paragraph (1) shall be in the form of technical assistance
and training, provided by a State educational agency through
a grant, contract, or cooperative agreement with an entity
that has experience in offering high-quality training and tech-
nical assistance to family literacy providers.
‘‘SEC. 1235. PROGRAM ELEMENTS.
‘‘Each program assisted under this subpart shall—
‘‘(1) include the identification and recruitment of families
most in need of services provided under this subpart, as
indicated by a low level of income, a low level of adult literacy
or English language proficiency of the eligible parent or parents,
and other need-related indicators;
‘‘(2) include screening and preparation of parents, including
teenage parents, and children to enable those parents and
H. R. 1—137
children to participate fully in the activities and services pro-
vided under this subpart, including testing, referral to nec-
essary counselling, other developmental and support services,
and related services;
‘‘(3) be designed to accommodate the participants’ work
schedule and other responsibilities, including the provision of
support services, when those services are unavailable from
other sources, necessary for participation in the activities
assisted under this subpart, such as—
‘‘(A) scheduling and locating of services to allow joint
participation by parents and children;
‘‘(B) child care for the period that parents are involved
in the program provided under this subpart; and
‘‘(C) transportation for the purpose of enabling parents
and their children to participate in programs authorized
by this subpart;
‘‘(4) include high-quality, intensive instructional programs
that promote adult literacy and empower parents to support
the educational growth of their children, developmentally
appropriate early childhood educational services, and prepara-
tion of children for success in regular school programs;
‘‘(5) with respect to the qualifications of staff the cost
of whose salaries are paid, in whole or in part, with Federal
funds provided under this subpart, ensure that—
‘‘(A) not later than December 21, 2004—
‘‘(i) a majority of the individuals providing aca-
demic instruction—
‘‘(I) shall have obtained an associate’s, bach-
elor’s, or graduate degree in a field related to
early childhood education, elementary school or
secondary school education, or adult education; and
‘‘(II) if applicable, shall meet qualifications
established by the State for early childhood edu-
cation, elementary school or secondary school edu-
cation, or adult education provided as part of an
Even Start program or another family literacy pro-
gram;
‘‘(ii) the individual responsible for administration
of family literacy services under this subpart has
received training in the operation of a family literacy
program; and
‘‘(iii) paraprofessionals who provide support for
academic instruction have a secondary school diploma
or its recognized equivalent; and
‘‘(B) all new personnel hired to provide academic
instruction—
‘‘(i) have obtained an associate’s, bachelor’s, or
graduate degree in a field related to early childhood
education, elementary school or secondary school edu-
cation, or adult education; and
‘‘(ii) if applicable, meet qualifications established
by the State for early childhood education, elementary
school or secondary school education, or adult edu-
cation provided as part of an Even Start program
or another family literacy program;
‘‘(6) include special training of staff, including child-care
staff, to develop the skills necessary to work with parents
H. R. 1—138
and young children in the full range of instructional services
offered through this subpart;
‘‘(7) provide and monitor integrated instructional services
to participating parents and children through home-based pro-
grams;
‘‘(8) operate on a year-round basis, including the provision
of some program services, including instructional and enrich-
ment services, during the summer months;
‘‘(9) be coordinated with—
‘‘(A) other programs assisted under this Act;
‘‘(B) any relevant programs under the Adult Education
and Family Literacy Act, the Individuals with Disabilities
Education Act, and title I of the Workforce Investment
Act of 1998; and
‘‘(C) the Head Start program, volunteer literacy pro-
grams, and other relevant programs;
‘‘(10) use instructional programs based on scientifically
based reading research for children and adults, to the extent
that research is available;
‘‘(11) encourage participating families to attend regularly
and to remain in the program a sufficient time to meet their
program goals;
‘‘(12) include reading-readiness activities for preschool chil-
dren based on scientifically based reading research, to the
extent available, to ensure that children enter school ready
to learn to read;
‘‘(13) if applicable, promote the continuity of family literacy
to ensure that individuals retain and improve their educational
outcomes;
‘‘(14) ensure that the programs will serve those families
most in need of the activities and services provided by this
subpart; and
‘‘(15) provide for an independent evaluation of the program,
to be used for program improvement.
‘‘SEC. 1236. ELIGIBLE PARTICIPANTS.
‘‘(a) IN GENERAL.—Except as provided in subsection (b), eligible
participants in an Even Start program are—
‘‘(1) a parent or parents—
‘‘(A) who are eligible for participation in adult edu-
cation and literacy activities under the Adult Education
and Family Literacy Act; or
‘‘(B) who are within the State’s compulsory school
attendance age range, so long as a local educational agency
provides (or ensures the availability of) the basic education
component required under this subpart, or who are
attending secondary school; and
‘‘(2) the child or children, from birth through age 7, of
any individual described in paragraph (1).
‘‘(b) ELIGIBILITY FOR CERTAIN OTHER PARTICIPANTS.—
‘‘(1) IN GENERAL.—Family members of eligible participants
described in subsection (a) may participate in activities and
services provided under this subpart, when appropriate to serve
the purpose of this subpart.
‘‘(2) SPECIAL RULE.—Any family participating in a program
assisted under this subpart that becomes ineligible to partici-
pate as a result of one or more members of the family becoming
H. R. 1—139
ineligible to participate may continue to participate in the
program until all members of the family become ineligible
to participate, which—
‘‘(A) in the case of a family in which ineligibility was
due to the child or children of the family attaining the
age of 8, shall be in 2 years or when the parent or parents
become ineligible due to educational advancement, which-
ever occurs first; and
‘‘(B) in the case of a family in which ineligibility was
due to the educational advancement of the parent or par-
ents of the family, shall be when all children in the family
attain the age of 8.
‘‘(3) CHILDREN 8 YEARS OF AGE OR OLDER.—If an Even
Start program assisted under this subpart collaborates with
a program under part A, and funds received under the part
A program contribute to paying the cost of providing programs
under this subpart to children 8 years of age or older, the
Even Start program may, notwithstanding subsection (a)(2),
permit the participation of children 8 years of age or older
if the focus of the program continues to remain on families
with young children.
‘‘SEC. 1237. APPLICATIONS.
‘‘(a) SUBMISSION.—To be eligible to receive a subgrant under
this subpart, an eligible entity shall submit an application to the
State educational agency in such form and containing or accom-
panied by such information as the State educational agency shall
require.
‘‘(b) 
REQUIRED
DOCUMENTATION.—Each 
application 
shall
include documentation, satisfactory to the State educational agency,
that the eligible entity has the qualified personnel needed—
‘‘(1) to develop, administer, and implement an Even Start
program under this subpart; and
‘‘(2) to provide access to the special training necessary
to prepare staff for the program, which may be offered by
an eligible organization.
‘‘(c) PLAN.—
‘‘(1) IN GENERAL.—The application shall also include a plan
of operation and continuous improvement for the program, that
includes—
‘‘(A) a description of the program objectives, strategies
to meet those objectives, and how those strategies and
objectives are consistent with the program indicators estab-
lished by the State;
‘‘(B) a description of the activities and services that
will be provided under the program, including a description
of how the program will incorporate the program elements
required by section 1235;
‘‘(C) a description of the population to be served and
an estimate of the number of participants to be served;
‘‘(D) as appropriate, a description of the applicant’s
collaborative efforts with institutions of higher education,
community-based organizations, the State educational
agency, private elementary schools, or other eligible
organizations in carrying out the program for which assist-
ance is sought;
‘‘(E) a statement of the methods that will be used—
H. R. 1—140
‘‘(i) to ensure that the programs will serve families
most in need of the activities and services provided
by this subpart;
‘‘(ii) to provide services under this subpart to
individuals with special needs, such as individuals with
limited English proficiency and individuals with
disabilities; and
‘‘(iii) to encourage participants to remain in the
program for a time sufficient to meet the program’s
purpose;
‘‘(F) a description of how the plan is integrated with
other programs under this Act or other Acts, as appropriate;
and
‘‘(G) a description of how the plan provides for rigorous
and objective evaluation of progress toward the program
objectives described in subparagraph (A) and for continuing
use of evaluation data for program improvement.
‘‘(2) DURATION OF THE PLAN.—Each plan submitted under
paragraph (1) shall—
‘‘(A) remain in effect for the duration of the eligible
entity’s participation under this subpart; and
‘‘(B) be periodically reviewed and revised by the eligible
entity as necessary.
‘‘(d) CONSOLIDATED APPLICATION.—The plan described in sub-
section (c)(1) may be submitted as part of a consolidated application
under section 9305.
‘‘SEC. 1238. AWARD OF SUBGRANTS.
‘‘(a) SELECTION PROCESS.—
‘‘(1) IN
GENERAL.—The State educational agency shall
establish a review panel in accordance with paragraph (3) that
will approve applications that—
‘‘(A) are most likely to be successful in—
‘‘(i) meeting the purpose of this subpart; and
‘‘(ii) effectively implementing the program ele-
ments required under section 1235;
‘‘(B) demonstrate that the area to be served by the
program has a high percentage or a large number of chil-
dren and families who are in need of those services as
indicated by high levels of poverty, illiteracy, unemploy-
ment, limited English proficiency, or other need-related
indicators, such as a high percentage of children to be
served by the program who reside in a school attendance
area served by a local educational agency eligible for
participation in programs under part A, a high number
or percentage of parents who have been victims of domestic
violence, or a high number or percentage of parents who
are receiving assistance under a State program funded
under part A of title IV of the Social Security Act (42
U.S.C. 601 et seq.);
‘‘(C) provide services for at least a 3-year age range,
which may begin at birth;
‘‘(D) demonstrate the greatest possible cooperation and
coordination between a variety of relevant service providers
in all phases of the program;
‘‘(E) include cost-effective budgets, given the scope of
the application;
H. R. 1—141
‘‘(F) demonstrate the applicant’s ability to provide the
non-Federal share required by section 1234(b);
‘‘(G) are representative of urban and rural regions of
the State; and
‘‘(H) show the greatest promise for providing models
that may be adopted by other family literacy projects and
other local educational agencies.
‘‘(2) PRIORITY
FOR
SUBGRANTS.—The State educational
agency shall give priority for subgrants under this subsection
to applications that—
‘‘(A) target services primarily to families described in
paragraph (1)(B); or
‘‘(B) are located in areas designated as empowerment
zones or enterprise communities.
‘‘(3) REVIEW PANEL.—A review panel shall consist of at
least three members, including one early childhood professional,
one adult education professional, and one individual with exper-
tise in family literacy programs, and may include other individ-
uals, such as one or more of the following:
‘‘(A) A representative of a parent-child education
organization.
‘‘(B) A representative of a community-based literacy
organization.
‘‘(C) A member of a local board of education.
‘‘(D) A representative of business and industry with
a commitment to education.
‘‘(E) An individual who has been involved in the
implementation of programs under this title in the State.
‘‘(b) DURATION.—
‘‘(1) IN GENERAL.—Subgrants under this subpart may be
awarded for a period not to exceed 4 years.
‘‘(2) STARTUP PERIOD.—The State educational agency may
provide subgrant funds to an eligible recipient, at the recipient’s
request, for a 3- to 6-month start-up period during the first
year of the 4-year grant period, which may include staff recruit-
ment and training, and the coordination of services, before
requiring full implementation of the program.
‘‘(3) CONTINUING ELIGIBILITY.—In awarding subgrant funds
to continue a program under this subpart after the first year,
the State educational agency shall review the progress of each
eligible entity in meeting the objectives of the program referred
to in section 1237(c)(1)(A) and shall evaluate the program based
on the indicators of program quality developed by the State
under section 1240.
‘‘(4) 
INSUFFICIENT
PROGRESS.—The 
State 
educational
agency may refuse to award subgrant funds to an eligible
entity if the agency finds that the eligible entity has not suffi-
ciently improved the performance of the program, as evaluated
based on the indicators of program quality developed by the
State under section 1240, after—
‘‘(A) providing technical assistance to the eligible
entity; and
‘‘(B) affording the eligible entity notice and an oppor-
tunity for a hearing.
‘‘(5) GRANT RENEWAL.—(A) An eligible entity that has pre-
viously received a subgrant under this subpart may reapply
under this subpart for additional subgrants.
H. R. 1—142
‘‘(B) The Federal share of any subgrant renewed under
subparagraph (A) shall be limited in accordance with section
1234(b).
‘‘SEC. 1239. EVALUATION.
‘‘From funds reserved under section 1232(b)(1), the Secretary
shall provide for an independent evaluation of programs assisted
under this subpart—
‘‘(1) to determine the performance and effectiveness of pro-
grams assisted under this subpart;
‘‘(2) to identify effective Even Start programs assisted under
this subpart that can be duplicated and used in providing
technical assistance to Federal, State, and local programs; and
‘‘(3) to provide State educational agencies and eligible enti-
ties receiving a subgrant under this subpart, directly or through
a grant or contract with an organization with experience in
the development and operation of successful family literacy
services, technical assistance to ensure that local evaluations
undertaken under section 1235(15) provide accurate informa-
tion on the effectiveness of programs assisted under this sub-
part.
‘‘SEC. 1240. INDICATORS OF PROGRAM QUALITY.
‘‘Each State educational agency receiving funds under this sub-
part shall develop, based on the best available research and evalua-
tion data, indicators of program quality for programs assisted under
this subpart. The indicators shall be used to monitor, evaluate,
and improve those programs within the State. The indicators shall
include the following:
‘‘(1) With respect to eligible participants in a program
who are adults—
‘‘(A) achievement in the areas of reading, writing,
English-language 
acquisition, 
problem 
solving, 
and
numeracy;
‘‘(B) receipt of a secondary school diploma or a general
equivalency diploma (GED);
‘‘(C) entry into a postsecondary school, job retraining
program, or employment or career advancement, including
the military; and
‘‘(D) such other indicators as the State may develop.
‘‘(2) With respect to eligible participants in a program
who are children—
‘‘(A) improvement in ability to read on grade level
or reading readiness;
‘‘(B) school attendance;
‘‘(C) grade retention and promotion; and
‘‘(D) such other indicators as the State may develop.
‘‘SEC. 1241. RESEARCH.
‘‘(a) IN GENERAL.—The Secretary shall carry out, through grant
or contract, research into the components of successful family lit-
eracy services, in order to—
‘‘(1) improve the quality of existing programs assisted under
this subpart or other family literacy programs carried out under
this Act or the Adult Education and Family Literacy Act; and
‘‘(2) develop models for new programs to be carried out
under this Act or the Adult Education and Family Literacy
Act.
H. R. 1—143
‘‘(b) SCIENTIFICALLY BASED RESEARCH ON FAMILY LITERACY.—
‘‘(1) IN GENERAL.—From amounts reserved under section
1232(b)(2), the National Institute for Literacy, in consultation
with the Secretary, shall carry out research that—
‘‘(A) is scientifically based reading research; and
‘‘(B) determines—
‘‘(i) the most effective ways of improving the lit-
eracy skills of adults with reading difficulties; and
‘‘(ii) how family literacy services can best provide
parents with the knowledge and skills the parents
need to support their children’s literacy development.
‘‘(2) USE OF EXPERT ENTITY.—The National Institute for
Literacy, in consultation with the Secretary, shall carry out
the research under paragraph (1) through an entity, including
a Federal agency, that has expertise in carrying out longitudinal
studies of the development of literacy skills in children and
has developed effective interventions to help children with
reading difficulties.
‘‘(c) DISSEMINATION.—The National Institute for Literacy shall
disseminate, pursuant to section 1207, the results of the research
described in subsections (a) and (b) to State educational agencies
and recipients of subgrants under this subpart.
‘‘SEC. 1242. CONSTRUCTION.
‘‘Nothing in this subpart shall be construed to prohibit a
recipient of funds under this subpart from serving students partici-
pating in Even Start simultaneously with students with similar
educational needs, in the same educational settings where appro-
priate.
‘‘Subpart 4—Improving Literacy Through School
Libraries
‘‘SEC. 1251. IMPROVING LITERACY THROUGH SCHOOL LIBRARIES.
‘‘(a) PURPOSES.—The purpose of this subpart is to improve
literacy skills and academic achievement of students by providing
students with increased access to up-to-date school library mate-
rials, a well-equipped, technologically advanced school library media
center, and well-trained, professionally certified school library
media specialists.
‘‘(b) RESERVATION.—From the funds appropriated under section
1002(b)(4) for a fiscal year, the Secretary shall reserve—
‘‘(1) one-half of 1 percent to award assistance under this
section to the Bureau of Indian Affairs to carry out activities
consistent with the purpose of this subpart; and
‘‘(2) one-half of 1 percent to award assistance under this
section to the outlying areas according to their respective needs
for assistance under this subpart.
‘‘(c) GRANTS.—
‘‘(1) COMPETITIVE GRANTS TO ELIGIBLE LOCAL EDUCATIONAL
AGENCIES.—If the amount of funds appropriated under section
1002(b)(4) for a fiscal year is less than $100,000,000, then
the Secretary shall award grants, on a competitive basis, to
eligible local educational agencies under subsection (e).
‘‘(2) FORMULA GRANTS TO STATES.—If the amount of funds
appropriated under section 1002(b)(4) for a fiscal year equals
or exceeds $100,000,000, then the Secretary shall award grants
H. R. 1—144
to State educational agencies from allotments under subsection
(d).
‘‘(3) DEFINITION OF ELIGIBLE LOCAL EDUCATIONAL AGENCY.—
In this section the term ‘eligible local educational agency’
means—
‘‘(A) in the case of a local educational agency receiving
assistance made available under paragraph (1), a local
educational agency in which 20 percent of the students
served by the local educational agency are from families
with incomes below the poverty line; and
‘‘(B) in the case of a local educational agency receiving
assistance from State allocations made available under
paragraph (2), a local educational agency in which—
‘‘(i) 15 percent of the students who are served
by the local educational agency are from such families;
or
‘‘(ii) the percentage of students from such families
who are served by the local educational agency is
greater than the statewide percentage of children from
such families.
‘‘(d) STATE GRANTS.—
‘‘(1) ALLOTMENTS.—From funds made available under sub-
section (c)(2) and not reserved under subsections (b) and (j)
for a fiscal year, the Secretary shall allot to each State edu-
cational agency having an application approved under sub-
section (f)(1) an amount that bears the same relation to the
funds as the amount the State educational agency received
under part A for the preceding fiscal year bears to the amount
all such State educational agencies received under part A for
the preceding fiscal year, to increase literacy and reading skills
by improving school libraries.
‘‘(2) COMPETITIVE GRANTS TO ELIGIBLE LOCAL EDUCATIONAL
AGENCIES.—Each State educational agency receiving an allot-
ment under paragraph (1) for a fiscal year—
‘‘(A) may reserve not more than 3 percent of the allotted
funds to provide technical assistance, disseminate informa-
tion about school library media programs that are effective
and based on scientifically based research, and pay
administrative costs related to activities under this section;
and
‘‘(B) shall use the allotted funds that remain after
making the reservation under subparagraph (A) to award
grants, for a period of 1 year, on a competitive basis,
to eligible local educational agencies in the State that have
an application approved under subsection (f)(2) for activities
described in subsection (g).
‘‘(3) REALLOTMENT.—If a State educational agency does
not apply for an allotment under this section for any fiscal
year, or if the State educational agency’s application is not
approved, the Secretary shall reallot the amount of the State
educational agency’s allotment to the remaining State edu-
cational agencies in accordance with paragraph (1).
‘‘(e) DIRECT COMPETITIVE GRANTS
TO ELIGIBLE LOCAL EDU-
CATIONAL AGENCIES.—
‘‘(1) IN GENERAL.—From amounts made available under
subsection (c)(1) and not reserved under subsections (b) and
(j) for a fiscal year, the Secretary shall award grants, on a
H. R. 1—145
competitive basis, to eligible local educational agencies that
have applications approved under subsection (f)(2) for activities
described in subsection (g).
‘‘(2) DURATION.—The Secretary shall award grants under
this subsection for a period of 1 year.
‘‘(3) DISTRIBUTION.—The Secretary shall ensure that grants
under this subsection are equitably distributed among the dif-
ferent geographic regions of the United States, and among
local educational agencies serving urban and rural areas.
‘‘(f) APPLICATIONS.—
‘‘(1) STATE EDUCATIONAL AGENCY.—Each State educational
agency desiring assistance under this section shall submit to
the Secretary an application at such time, in such manner,
and containing such information as the Secretary shall require.
The application shall contain a description of—
‘‘(A) how the State educational agency will assist
eligible local educational agencies in meeting the require-
ments of this section and in using scientifically based
research to implement effective school library media pro-
grams; and
‘‘(B) the standards and techniques the State edu-
cational agency will use to evaluate the quality and impact
of activities carried out under this section by eligible local
educational agencies to determine the need for technical
assistance and whether to continue to provide additional
funding to the agencies under this section.
‘‘(2) ELIGIBLE LOCAL EDUCATIONAL AGENCY.—Each eligible
local educational agency desiring assistance under this section
shall submit to the Secretary or State educational agency,
as appropriate, an application at such time, in such manner,
and containing such information as the Secretary or State
educational agency, respectively, shall require. The application
shall contain a description of—
‘‘(A) a needs assessment relating to the need for school
library media improvement, based on the age and condition
of school library media resources, including book collections,
access of school library media centers to advanced tech-
nology, and the availability of well-trained, professionally
certified school library media specialists, in schools served
by the eligible local educational agency;
‘‘(B) the manner in which the eligible local educational
agency will use the funds made available through the grant
to carry out the activities described in subsection (g);
‘‘(C) how the eligible local educational agency will
extensively involve school library media specialists,
teachers, administrators, and parents in the activities
assisted under this section, and the manner in which the
eligible local educational agency will carry out the activities
described in subsection (g) using programs and materials
that are grounded in scientifically based research;
‘‘(D) the manner in which the eligible local educational
agency will effectively coordinate the funds and activities
provided under this section with Federal, State, and local
funds and activities under this subpart and other literacy,
library, technology, and professional development funds
and activities; and
H. R. 1—146
‘‘(E) the manner in which the eligible local educational
agency will collect and analyze data on the quality and
impact of activities carried out under this section by schools
served by the eligible local educational agency.
‘‘(g) LOCAL ACTIVITIES.—Funds under this section may be used
to—
‘‘(1) acquire up-to-date school library media resources,
including books;
‘‘(2) acquire and use advanced technology, incorporated into
the curricula of the school, to develop and enhance the informa-
tion literacy, information retrieval, and critical thinking skills
of students;
‘‘(3) facilitate Internet links and other resource-sharing
networks among schools and school library media centers, and
public and academic libraries, where possible;
‘‘(4) provide professional development described in section
1222(d)(2) for school library media specialists, and activities
that foster increased collaboration between school library media
specialists, teachers, and administrators; and
‘‘(5) provide students with access to school libraries during
nonschool hours, including the hours before and after school,
during weekends, and during summer vacation periods.
‘‘(h) ACCOUNTABILITY AND REPORTING.—
‘‘(1) LOCAL
REPORTS.—Each eligible local educational
agency that receives funds under this section for a fiscal year
shall report to the Secretary or State educational agency, as
appropriate, on how the funding was used and the extent
to which the availability of, the access to, and the use of,
up-to-date school library media resources in the elementary
schools and secondary schools served by the eligible local edu-
cational agency was increased.
‘‘(2) STATE REPORT.—Each State educational agency that
receives funds under this section shall compile the reports
received under paragraph (1) and submit the compiled reports
to the Secretary.
‘‘(i) SUPPLEMENT, NOT SUPPLANT.—Funds made available under
this section shall be used to supplement, and not supplant, other
Federal, State, and local funds expended to carry out activities
relating to library, technology, or professional development activi-
ties.
‘‘(j) NATIONAL ACTIVITIES.—
‘‘(1) EVALUATIONS.—From the funds appropriated under
section 1002(b)(4) for each fiscal year, the Secretary shall
reserve not more than 1 percent for annual, independent,
national evaluations of the activities assisted under this section
and their impact on improving the reading skills of students.
The evaluations shall be conducted not later than 3 years
after the date of enactment of the No Child Left Behind Act
of 2001, and biennially thereafter.
‘‘(2) REPORT TO CONGRESS.—The Secretary shall transmit
the State reports received under subsection (h)(2) and the
evaluations conducted under paragraph (1) to the Committee
on Health, Education, Labor, and Pensions of the Senate and
the Committee on Education and the Workforce of the House
of Representatives.
H. R. 1—147
‘‘PART C—EDUCATION OF MIGRATORY
CHILDREN
‘‘SEC. 1301. PROGRAM PURPOSE.
‘‘It is the purpose of this part to assist States to—
‘‘(1) support high-quality and comprehensive educational
programs for migratory children to help reduce the educational
disruptions and other problems that result from repeated
moves;
‘‘(2) ensure that migratory children who move among the
States are not penalized in any manner by disparities among
the States in curriculum, graduation requirements, and State
academic content and student academic achievement standards;
‘‘(3) ensure that migratory children are provided with
appropriate educational services (including supportive services)
that address their special needs in a coordinated and efficient
manner;
‘‘(4) ensure that migratory children receive full and appro-
priate opportunities to meet the same challenging State aca-
demic content and student academic achievement standards
that all children are expected to meet;
‘‘(5) design programs to help migratory children overcome
educational disruption, cultural and language barriers, social
isolation, various health-related problems, and other factors
that inhibit the ability of such children to do well in school,
and to prepare such children to make a successful transition
to postsecondary education or employment; and
‘‘(6) ensure that migratory children benefit from State and
local systemic reforms.
‘‘SEC. 1302. PROGRAM AUTHORIZED.
‘‘In order to carry out the purpose of this part, the Secretary
shall make grants to State educational agencies, or combinations
of such agencies, to establish or improve, directly or through local
operating agencies, programs of education for migratory children
in accordance with this part.
‘‘SEC. 1303. STATE ALLOCATIONS.
‘‘(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 3 through 21 who reside in the State full
time and the full-time equivalent of the estimated number
of migratory children aged 3 through 21 who reside in
the State part time, as determined in accordance with
subsection (e); multiplied by
‘‘(B) 40 percent of the average per-pupil expenditure
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 per-pupil expenditure in
the United States.
‘‘(2) SUBSEQUENT YEARS.—
‘‘(A) BASE AMOUNT.—
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‘‘(i) IN GENERAL.—Except as provided in subsection
(b) and clause (ii), each State (other than the Common-
wealth 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 Commonwealth 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 Commonwealth
of Puerto Rico) so that the State receives an amount equal
to—
‘‘(i) the sum of—
‘‘(I) the number of identified eligible migratory
children, aged 3 through 21, residing in the State
during the previous year; and
‘‘(II) the number of identified eligible migra-
tory children, aged 3 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 expendi-
ture 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.
‘‘(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 who would be counted under subsection
(a)(1)(A) if such subsection applied to the Commonwealth of
Puerto Rico by the product of—
‘‘(A) 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
‘‘(B) 32 percent of the average per-pupil expenditure
in the United States.
‘‘(2) MINIMUM PERCENTAGE.—The percentage in paragraph
(1)(A) shall not be less than—
H. R. 1—149
‘‘(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 paragraph (2) for
any fiscal year 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, then
the percentage described in paragraph (1)(A) that is used for
the Commonwealth of Puerto Rico for the fiscal year for which
the determination is made shall be the greater of the percentage
in paragraph (1)(A) for such fiscal year or the percentage used
for the preceding fiscal year.
‘‘(c) RATABLE REDUCTIONS; REALLOCATIONS.—
‘‘(1) IN GENERAL.—(A) If, after the Secretary reserves funds
under section 1308(c), the amount appropriated to carry out
this part for any fiscal year is insufficient to pay in full the
amounts for which all States are eligible, the Secretary shall
ratably reduce each such amount.
‘‘(B) If additional funds become available for making such
payments for any fiscal year, the Secretary shall allocate such
funds to States in amounts that the Secretary determines will
best carry out the purpose of this part.
‘‘(2) SPECIAL RULE.—(A) The Secretary shall further reduce
the amount of any grant to a State under this part for any
fiscal year if the Secretary determines, based on available
information on the numbers and needs of migratory children
in the State and the program proposed by the State to address
such needs, that such amount exceeds the amount required
under section 1304.
‘‘(B) The Secretary shall reallocate such excess funds to
other States whose grants under this part would otherwise
be insufficient to provide an appropriate level of services to
migratory children, in such amounts as the Secretary deter-
mines are appropriate.
‘‘(d) CONSORTIUM ARRANGEMENTS.—
‘‘(1) IN
GENERAL.—In the case of a State that receives
a grant of $1,000,000 or less under this section, the Secretary
shall consult with the State educational agency to determine
whether consortium arrangements with another State or other
appropriate entity would result in delivery of services in a
more effective and efficient manner.
‘‘(2) PROPOSALS.—Any State, regardless of the amount of
such State’s allocation, may submit a consortium arrangement
to the Secretary for approval.
‘‘(3) APPROVAL.—The Secretary shall approve a consortium
arrangement under paragraph (1) or (2) if the proposal dem-
onstrates that the arrangement will—
‘‘(A) reduce administrative costs or program function
costs for State programs; and
‘‘(B) make more funds available for direct services to
add substantially to the welfare or educational attainment
of children to be served under this part.
‘‘(e) DETERMINING NUMBERS OF ELIGIBLE CHILDREN.—In order
to determine the estimated number of migratory children residing
in each State for purposes of this section, the Secretary shall—