A bill to amend the small rural school achievement program and the rural and low-income school program under part B of title VI of the Elementary and Secondary Education Act of 1965.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Education Achievement Program 
Reauthorization Act of 2007''.

SEC. 2. SMALL, RURAL SCHOOL ACHIEVEMENT PROGRAM.

    Sections 6211 and 6212 of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7345, 7345a) are amended to read as follows:

``SEC. 6211. USE OF APPLICABLE FUNDING.

    ``(a) Alternative Uses.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, an eligible local educational agency may use the 
        applicable funding that the agency is eligible to receive from 
        the State educational agency for a fiscal year to carry out 
        local activities authorized under any of the following 
        provisions:
                    ``(A) Part A of title I.
                    ``(B) Part A or D of title II.
                    ``(C) Title III.
                    ``(D) Part A or B of title IV.
                    ``(E) Part A of title V.
            ``(2) Notification.--An eligible local educational agency 
        shall notify the State educational agency of the local 
        educational agency's intention to use the applicable funding in 
        accordance with paragraph (1), by a date that is established by 
        the State educational agency for the notification.
    ``(b) Eligibility.--
            ``(1) In general.--A local educational agency shall be 
        eligible to use the applicable funding in accordance with 
        subsection (a) if--
                    ``(A)(i)(I) the total number of students in average 
                daily attendance at all of the schools served by the 
                local educational agency is fewer than 600; or
                    ``(II) each county in which a school served by the 
                local educational agency is located has a total 
                population density of fewer than 10 persons per square 
                mile; and
                    ``(ii) all of the schools served by the local 
                educational agency are designated with a school locale 
                code of Fringe Rural, Distant Rural, or Remote Rural, 
                as determined by the Secretary; or
                    ``(B) the agency meets the criteria established in 
                subparagraph (A)(i) and the Secretary, in accordance 
                with paragraph (2), grants the local educational 
                agency's request to waive the criteria described in 
                subparagraph (A)(ii).
            ``(2) Certification.--The Secretary shall determine whether 
        to waive the criteria described in paragraph (1)(A)(ii) based 
        on a demonstration by the local educational agency, and 
        concurrence by the State educational agency, that the local 
        educational agency is located in an area defined as rural by a 
        governmental agency of the State.
    ``(c) Applicable Funding Defined.--In this section, the term 
`applicable funding' means funds provided under any of the following 
provisions:
            ``(1) Subpart 2 and section 2412(a)(2)(A) of title II.
            ``(2) Section 4114.
            ``(3) Part A of title V.
    ``(d) Disbursement.--Each State educational agency that receives 
applicable funding for a fiscal year shall disburse the applicable 
funding to local educational agencies for alternative uses under this 
section for the fiscal year at the same time as the State educational 
agency disburses the applicable funding to local educational agencies 
that do not intend to use the applicable funding for such alternative 
uses for the fiscal year.
    ``(e) Applicable Rules.--Applicable funding under this section 
shall be available to carry out local activities authorized under 
subsection (a).

``SEC. 6212. GRANT PROGRAM AUTHORIZED.

    ``(a) In General.--The Secretary is authorized to award grants to 
eligible local educational agencies to enable the local educational 
agencies to carry out activities authorized under any of the following 
provisions:
            ``(1) Part A of title I.
            ``(2) Part A or D of title II.
            ``(3) Title III.
            ``(4) Part A or B of title IV.
            ``(5) Part A of title V.
    ``(b) Allocation.--
            ``(1) In general.--Except as provided in paragraph (3), the 
        Secretary shall award a grant under subsection (a) to a local 
        educational agency eligible under section 6211(b) for a fiscal 
        year in an amount equal to the initial amount determined under 
        paragraph (2) for the fiscal year minus the total amount 
        received by the agency under the provisions of law described in 
        section 6211(c) for the preceding fiscal year.
            ``(2) Determination of initial amount.--
                    ``(A) In general.--The initial amount referred to 
                in paragraph (1) is equal to $100 multiplied by the 
                total number of students in excess of 50 students, in 
                average daily attendance at the schools served by the 
                local educational agency, plus $20,000, except that the 
                initial amount may not exceed $60,000.
                    ``(B) Special rule.--For any fiscal year for which 
                the amount made available to carry out this part is 
                $100,000,000 or more, subparagraph (A) shall be 
                applied--
                            ``(i) by substituting `$25,000' for 
                        `$20,000'; and
                            ``(ii) by substituting `$80,000' for 
                        `$60,000'.
            ``(3) Ratable adjustment.--
                    ``(A) In general.--If the amount made available to 
                carry out this section for any fiscal year is not 
                sufficient to pay in full the amounts that local 
                educational agencies are eligible to receive under 
                paragraph (1) for such year, the Secretary shall 
                ratably reduce such amounts for such year.
                    ``(B) Additional amounts.--If additional funds 
                become available for making payments under paragraph 
                (1) for such fiscal year, payments that were reduced 
                under subparagraph (A) shall be increased on the same 
                basis as such payments were reduced.
    ``(c) Disbursement.--The Secretary shall disburse the funds awarded 
to a local educational agency under this section for a fiscal year not 
later than July 1 of that fiscal year.
    ``(d) Special Eligibility Rule.--A local educational agency that 
receives a grant under this subpart for a fiscal year is not eligible 
to receive funds for such fiscal year under subpart 2.''.

SEC. 3. RURAL AND LOW-INCOME SCHOOL PROGRAM.

    Section 6221 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7351) is amended to read as follows:

``SEC. 6221. PROGRAM AUTHORIZED.

    ``(a) Grants to States.--
            ``(1) In general.--From amounts appropriated under section 
        6234 for this subpart for a fiscal year that are not reserved 
        under subsection (c), the Secretary shall award grants (from 
        allotments made under paragraph (2)) for the fiscal year to 
        State educational agencies that have applications submitted 
        under section 6223 approved to enable the State educational 
        agencies to award grants to eligible local educational agencies 
        for local authorized activities described in section 6222(a).
            ``(2) Allotment.--From amounts described in paragraph (1) 
        for a fiscal year, the Secretary shall allot to each State 
        educational agency for that fiscal year an amount that bears 
        the same ratio to those amounts as the number of students in 
        average daily attendance served by eligible local educational 
        agencies in the State for that fiscal year bears to the number 
        of all such students served by eligible local educational 
        agencies in all States for that fiscal year.
            ``(3) Specially qualified agencies.--
                    ``(A) Eligibility and application.--If a State 
                educational agency elects not to participate in the 
                program under this subpart or does not have an 
                application submitted under section 6223 approved, a 
                specially qualified agency in such State desiring a 
                grant under this subpart may submit an application 
                under such section directly to the Secretary to receive 
                an award under this subpart.
                    ``(B) Direct awards.--The Secretary may award, on a 
                competitive basis or by formula, the amount the State 
                educational agency is eligible to receive under 
                paragraph (2) directly to a specially qualified agency 
                in the State that has submitted an application in 
                accordance with subparagraph (A) and obtained approval 
                of the application.
                    ``(C) Specially qualified agency defined.--In this 
                subpart, the term `specially qualified agency' means an 
                eligible local educational agency served by a State 
                educational agency that does not participate in a 
                program under this subpart in a fiscal year, that may 
                apply directly to the Secretary for a grant in such 
                year under this subsection.
    ``(b) Local Awards.--
            ``(1) Eligibility.--A local educational agency shall be 
        eligible to receive a grant under this subpart if--
                    ``(A) 40 percent or more of the children ages 5 
                through 17 years served by the local educational agency 
                are eligible for a free or reduced price lunch under 
                the Richard B. Russell National School Lunch Act; and
                    ``(B) all of the schools served by the agency are 
                designated with a school locale code of Distant Town, 
                Remote Town, Fringe Rural, Distant Rural, or Remote 
                Rural, as determined by the Secretary.
            ``(2) Award basis.--A State educational agency shall award 
        grants to eligible local educational agencies--
                    ``(A) on a competitive basis;
                    ``(B) according to a formula based on the number of 
                students in average daily attendance served by the 
                eligible local educational agencies or schools in the 
                State; or
                    ``(C) according to an alternative formula, if, 
                prior to awarding the grants, the State educational 
                agency demonstrates, to the satisfaction of the 
                Secretary, that the alternative formula enables the 
                State educational agency to allot the grant funds in a 
                manner that serves equal or greater concentrations of 
                children from families eligible for a free or reduced 
                price lunch under the Richard B. Russell National 
                School Lunch Act, relative to the concentrations that 
                would be served if the State educational agency used 
                the formula described in subparagraph (B).
    ``(c) Reservations.--From amounts appropriated under section 6234 
for this subpart for a fiscal year, the Secretary shall reserve--
            ``(1) one-half of 1 percent to make awards to elementary 
        schools or secondary schools operated or supported by the 
        Bureau of Indian Affairs, to carry out the activities 
        authorized under this subpart; and
            ``(2) one-half of 1 percent to make awards to the outlying 
        areas in accordance with their respective needs, to carry out 
        the activities authorized under this subpart.
    ``(d) Special Eligibility Rule.--A local educational agency that is 
eligible to receive a grant under this subpart and is also eligible to 
receive a grant under subpart 1, may receive a grant under this subpart 
for a fiscal year only if the local educational agency does not receive 
a grant under subpart 1 for such fiscal year.''.

Summary: Rural Education Achievement Program Reauthorization Act of 2007 - Amends part B (Rural Education Initiative) of title VI of the Elementary and Secondary Education Act of 1965 to revise the Small, Rural School Achievement program, which gives rural local educational agencies (LEAs) federal formula grants and greater flexibility in the use of state educational funds.

Limits eligibility to LEAs whose schools are all designated with a school locale code of Fringe Rural, Distant Rural, or Remote Rural, unless located in an area the state defines as rural.

Raises federal grant limits when funds available to implement the program equal or exceed $100 million.

Alters LEAs' eligibility for federal funds under the Rural and Low-Income School program by requiring that: (1) at least 40% of the children ages 5 through 17 that LEAs serve be eligible for a free or reduced price lunch under the Richard B. Russell National School Lunch Act; and (2) all of their schools be designated with a school locale code of Distant Town, Remote Town, Fringe Rural, Distant Rural, or Remote Rural.