SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equal Protection School Finance 
Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) There are systems of public school finance within 
        States which subject American children to educations of 
        radically varying and grossly unequal quality solely on the 
        basis of where they live.
            (2) In its unanimous decision in the case of Brown v. Board 
        of Education, 347 U.S. 483, 493 (1954), the Supreme Court 
        stated: ``In these days, it is doubtful that any child may 
        reasonably be expected to succeed in life if he is denied the 
        opportunity of an education. Such an opportunity, where the 
        state has undertaken to provide it, is a right which must be 
        made available to all on equal terms.''
            (3) Education is a fundamental right under the equal 
        protection clause of the United States Constitution.
            (4) The provision of education to all children within a 
        State on an equal basis, including equality of financial 
        resources, is fundamental to the equal protection of laws.

SEC. 3. EQUALIZATION SYSTEM.

    (a) In General.--Subject to subsection (c), beginning 5 years after 
the date of enactment of this Act, a State shall be ineligible to 
receive Federal funds as specified in section 4(c) if such State does 
not maintain a coefficient of variation of at least 10 percent for per-
pupil expenditures in local educational agencies statewide, for 
elementary and secondary education in such State.
    (b) Coefficient of Variation Defined.--In this section, the term 
``coefficient of variation'' means the standard deviation of local 
educational agency expenditures divided by the mean per-student 
expenditure, calculated--
            (1) based on intrastate expenditures for current 
        operations, as determined by the State, without regard to 
        Federal contributions; and
            (2) excluding--
                    (A) local educational agencies with fewer than 250 
                students;
                    (B) capital expenditures; and
                    (C) funds targeted to address a specific need (such 
                as educationally disadvantaged, handicapped, gifted, or 
                language-deficient students), without regard to the 
                source of such funds, but nothing in this Act shall 
                preclude a State or the Federal Government from 
                providing additional resources to local educational 
                agencies to address any such specific need.
    (c) Waiver.--The Secretary may provide a single waiver of 
subsection (a) and provide continued funding for elementary and 
secondary education to a State which has not complied with the 
requirements of such subsection, if such State submits to the Secretary 
a plan for compliance which the Secretary determines will bring the 
State into compliance within 5 years. A waiver under this subsection 
may not be granted for a duration of more than five years after the 
date the Secretary approves such a plan for compliance.

SEC. 4. REPORT, CERTIFICATION, AND CHALLENGE.

    (a) Annual Report.--Not later than January 1 of each year, a State 
shall submit to the Secretary a report describing--
            (1) the manner in which the State has complied with section 
        3(a) or whether such State has received a waiver under section 
        3(c); and
            (2) such additional information as the Secretary may 
        require.
    (b) Annual Certification.--The report required by subsection (a) 
shall include a certification that the State has complied with the 
provisions of section 3(a) or has been granted a waiver under section 
3(c). Such certification shall be prima facie evidence that the State 
has complied with section 3 unless such certification is challenged 
under subsection (c).
    (c) Certification Challenge.--Not later than 90 days after the date 
on which a State certification is due under subsection (b), a local 
educational agency in a State may file a complaint with the Secretary 
challenging such certification.

SEC. 5. CONSEQUENCES OF NONCOMPLIANCE.

    (a) Ineligibility for Federal Education Funds.--If the Secretary 
determines, after notice and opportunity for a hearing, that a State 
fails to comply with section 3(a) and has not obtained a waiver under 
section 3(c), such State shall be ineligible to receive Federal funds 
administered by the Secretary to support elementary and secondary 
education, beginning on the first day of the first fiscal year after 
such finding.
    (b) Restoration of Eligibility.--Eligibility for funds identified 
under subsections (a) shall be restored at the beginning of the next 
fiscal year after the Secretary determines that the State has complied 
with section 3(a) or grants a waiver under section 3(c), whichever 
occurs first.
    (c) Redistribution of Funds.--Funds for elementary and secondary 
education made ineligible for a State under subsection (a) shall be 
reallocated by the Secretary among States that--
            (1) are in compliance with the requirements of section 
        3(a); or
            (2) are implementing compliance plans pursuant to section 
        3(c).

SEC. 6. RULEMAKING.

    The Secretary may make rules to carry out this Act.

SEC. 7. DEFINITIONS.

    In this Act:
            (1) The term ``local educational agency'' has the meaning 
        given such term in section 14101(18) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 8801(18)).
            (2) The term ``Secretary'' means the Secretary of 
        Education.
Output: Equal Protection School Finance Act - Provides for a system to help equalize funding for education within States.Makes a State ineligible for Federal funds administered by the Department of Education to support elementary and secondary education unless the coefficient of variation of per pupil expenditures in local educational agencies statewide for elementary and secondary education is greater than ten percent. Authorizes the Secretary of Education to provide such funding to a noncompliant State if that State submits a plan which the Secretary determines will bring the State into compliance within five years.Sets forth procedures for compliance reporting, certification, and challenges. Directs the Secretary to reallocate to compliant States, and States developing or implementing compliance plans, any funds that are not distributed to noncompliant States.