To improve the No Child Left Behind Act of 2001, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Child Left Behind Reform Act''.

SEC. 2. ADEQUATE YEARLY PROGRESS.

    (a) Definition of Adequate Yearly Progress.--Section 1111(b)(2) of 
the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
6311(b)(2)) is amended--
            (1) in subparagraph (C)(vii)--
                    (A) by striking ``such as'';
                    (B) by inserting ``such as measures of individual 
                or cohort growth over time based on the academic 
                assessments implemented in accordance with paragraph 
                (3),'' after ``described in clause (v),''; and
                    (C) by striking ``attendance rates,''; and
            (2) in subparagraph (D)--
                    (A) by striking clause (ii);
                    (B) by striking ``the State'' and all that follows 
                through ``ensure'' and inserting ``the State shall 
                ensure''; and
                    (C) by striking ``; and'' and inserting a period.
    (b) Academic Assessment and Local Educational Agency and School 
Improvement.--Section 1116(a)(1)(B) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6316(a)(1)(B)) is amended by striking 
``, except that'' and all that follows through ``action or 
restructuring''.

SEC. 3. GRANTS FOR INCREASING DATA CAPACITY FOR PURPOSES OF AYP.

    Part A of title I of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6311 et seq.) is amended by adding at the end the 
following:

``SEC. 1120C. GRANTS FOR INCREASING DATA CAPACITY FOR PURPOSES OF AYP.

    ``(a) Grant Authority.--The Secretary may award grants, on a 
competitive basis, to State educational agencies to enable the State 
educational agencies to develop or increase the capacity of data 
systems for accountability purposes and award subgrants to increase the 
capacity of local educational agencies to upgrade, create, or manage 
information databases for the purpose of measuring adequate yearly 
progress.
    ``(b) Priority.--In awarding grants under this section, the 
Secretary shall give priority to State educational agencies that have 
created, or are in the process of creating, a growth model or 
proficiency index as part of their adequate yearly progress 
determination.
    ``(c) State Use of Funds.--Each State that receives a grant under 
this section shall use--
            ``(1) not more than 20 percent of the grant funds for the 
        purpose of increasing the capacity of, or creating, State 
        databases to collect information related to adequate yearly 
        progress; and
            ``(2) not less than 80 percent of the grant funds to award 
        subgrants to local educational agencies within the State to 
        enable the local educational agencies to carry out the 
        authorized activities described in subsection (d).
    ``(d) Authorized Activities.--Each local educational agency that 
receives a subgrant under this section shall use the subgrant funds to 
increase the capacity of the local educational agency to upgrade 
databases or create unique student identifiers for the purpose of 
measuring adequate yearly progress, by--
            ``(1) purchasing database software or hardware;
            ``(2) hiring additional staff for the purpose of managing 
        such data;
            ``(3) providing professional development or additional 
        training for such staff; and
            ``(4) providing professional development or training for 
        principals and teachers on how to effectively use such data to 
        implement instructional strategies to improve student 
        achievement.
    ``(e) State Application.--Each State educational agency desiring a 
grant under this section shall submit an application to the Secretary 
at such time, in such manner, and containing such information as the 
Secretary may require.
    ``(f) LEA Application.--Each local educational agency desiring a 
subgrant under this section 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 require. Each such 
application shall include, at a minimum, a demonstration of the local 
educational agency's ability to put such a database in place.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $80,000,000 for each of fiscal 
years 2005, 2006, and 2007.''.

SEC. 4. TARGETING TRANSFER OPTIONS AND SUPPLEMENTAL SERVICES.

    (a) Targeting Transfer Options and Supplemental Services.--Section 
1116 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
6316) is amended--
            (1) in paragraphs (1)(E)(i), (5)(A), (7)(C)(i), and 
        (8)(A)(i) of subsection (b), by striking the term ``all 
        students enrolled in the school'' each place such term appears 
        and inserting ``all students enrolled in the school, who are 
        members of a group described in section 1111(b)(2)(C)(v) that 
        fails to make adequate yearly progress as defined in the 
        State's plan under section 1111(b)(2),'';
            (2) in subsection (b)(1), by adding at the end the 
        following:
                    ``(G) Maintenance of least restrictive 
                environment.--A student who is eligible to receive 
                services under the Individuals with Disabilities 
                Education Act and who uses the option to transfer under 
                subparagraph (E), paragraph (5)(A), (7)(C)(i), or 
                (8)(A)(i), or subsection (c)(10)(C)(vii), shall be 
                placed and served in the least restrictive environment 
                appropriate, in accordance with the Individuals with 
                Disabilities Education Act.'';
            (3) in clause (vii) of subsection (c)(10)(C), by inserting 
        ``, who are members of a group described in section 
        1111(b)(2)(C)(v) that fails to make adequate yearly progress as 
        defined in the State's plan under section 1111(b)(2),'' after 
        ``Authorizing students''; and
            (4) in subparagraph (A) of subsection (e)(12), by inserting 
        ``, who is a member of a group described in section 
        1111(b)(2)(C)(v) that fails to make adequate yearly progress as 
        defined in the State's plan under section 1111(b)(2)'' after 
        ``under section 1113(c)(1)''.
    (b) Student Already Transferred.--A student who transfers to 
another public school pursuant to section 1116(b) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6316(b)) before the 
effective date of this section and the amendments made by this section, 
may continue enrollment in such public school after the effective date 
of this section and the amendments made by this section.
    (c) Effective Date.--This section and the amendments made by this 
section shall be effective for each fiscal year for which the amount 
appropriated to carry out title I of the Elementary and Secondary 
Education Act of 1965 for the fiscal year, is less than the amount 
authorized to be appropriated to carry out such title for the fiscal 
year.

SEC. 5. DEFINITION OF HIGHLY QUALIFIED TEACHERS.

    Section 9101(23)(B)(ii) of the Elementary and Secondary Act of 1965 
(20 U.S.C. 7801(23)(B)(ii)) is amended--
            (1) in subclause (I), by striking ``or'' after the 
        semicolon;
            (2) in subclause (II), by striking ``and'' after the 
        semicolon; and
            (3) by adding at the end the following:
                                    ``(III) in the case of a middle 
                                school teacher, passing a State 
                                approved middle school generalist exam 
                                when the teacher receives the teacher's 
                                license to teach middle school in the 
                                State;
                                    ``(IV) obtaining a State social 
                                studies certificate that qualifies the 
                                teacher to teach history, geography, 
                                economics, and civics in middle or 
                                secondary schools, respectively, in the 
                                State; or
                                    ``(V) obtaining a State science 
                                certificate that qualifies the teacher 
                                to teach earth science, biology, 
                                chemistry, and physics in middle or 
                                secondary schools, respectively, in the 
                                State; and''.

Summary: No Child Left Behind Reform Act - Amends the Elementary and Secondary Education Act of 1965 (ESEA) to revise certain requirements which were added by the No Child Left Behind Act of 2001, including ones relating to: (1) adequate yearly progress (AYP); (2) academic assessment and local educational agency and school improvement; (3) school choice and supplemental services options; and (4) teacher qualifications.

Allows schools to be given credit for performing well on measures other than test scores when calculating student achievement.

Authorizes the Secretary of Education to award competitive grants to State educational agencies to: (1) develop or increase the capacity of data systems for accountability purposes; and (2) subgrants to increase the capacity of local educational agencies to upgrade, create, or manage information databases for the purpose of measuring AYP.

 Allows schools to target school choice and supplemental services to the students who are members of specified types of groups that fail to make AYP. Requires placement and service in the least restrictive environment for students who receive services under the Individuals With Disabilities Education Act who use an option to transfer under ESEA.

Revises the definition of highly qualified teacher to authorize States to: (1) use a generalist exam for middle school teachers; and (2) issue certificates that qualify teachers to teach a number of subjects in social studies or in science.