SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Department of Education Elimination 
Act of 2014''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Principles of federalism embodied in the Constitution 
        of the United States entrust authority over issues of 
        educational policy to the States and the people and a Federal 
        Department of Education is inconsistent with such principles.
            (2) Tradition and experience dictate that the governance 
        and management of schools in the United States are best 
        performed by parents, teachers, and communities.
            (3) The education of the Nation's students is suffering 
        under a managerial government.
            (4) The Department of Education has weakened the ability of 
        parents to make essential decisions about their children's 
        education and has undermined the capacity of communities to 
        govern their schools.
            (5) In the 34 years of its existence, the Department of 
        Education has grown from a budget of $14 billion to almost 
        $65.7 billion in annual discretionary appropriations 
        administering around 100 programs. Meanwhile, education 
        performance for 17-year olds has stagnated since 1971.
            (6) The Department of Education has fostered over-
        regulation, standardization, bureaucratization, and litigation 
        in United States education.
            (7) The Department of Education expends large amounts of 
        money on its own maintenance and overhead. While the average 
        salary for public school teachers is around $56,000, the 
        average salary for a Department of Education employee is 
        $108,571.
            (8) Recent tests reflect poor results in mathematics, 
        science, and reading for American students compared with 
        students from other nations.
            (9) Only through initiatives led by parents and local 
        communities with the power to act can the United States elevate 
        educational performance toward an acceptable level.
            (10) The current system of top down education uniformity is 
        detrimental to local businesses and communities, the economic 
        needs of the states, and the Nation's ability to compete 
        globally for jobs.
            (11) The Department of Education has been hostile to many 
        promising reform ideas or empowering parents, teachers, and 
        local communities. The United States, once a laboratory of 
        innovation through the experiments of the States, is moving 
        toward education standardization that does not consider the 
        individual educational needs of our diverse population of 
        students.

SEC. 3. ABOLITION OF DEPARTMENT OF EDUCATION.

    The Department of Education is abolished, and, with the exception 
of the programs transferred under section 7, any program for which the 
Secretary of Education or the Department of Education has 
administrative responsibility as provided by law or by delegation of 
authority pursuant to law is repealed, including each program under the 
following:
            (1) The Department of Education Organization Act (20 U.S.C. 
        3401 et seq.).
            (2) The General Education Provisions Act (20 U.S.C. 1221 et 
        seq.).

SEC. 4. GRANTS TO STATES FOR ELEMENTARY AND SECONDARY AND FOR 
              POSTSECONDARY EDUCATION PROGRAMS.

    (a) In General.--Subject to the requirements of this title, each 
State is entitled to receive from the Secretary of the Treasury, by not 
later than July 1 of the preceding fiscal year--
            (1) a grant for fiscal year 2015 and each succeeding fiscal 
        year through fiscal year 2024, that is equal to the amount of 
        funds appropriated for the State for Federal elementary school 
        and secondary school programs for fiscal year 2012 (except for 
        the funds appropriated for fiscal year 2012 for such programs 
        for such State that are being transferred under section 7); and
            (2) a grant for fiscal year 2015 and each succeeding fiscal 
        year through fiscal year 2024, that is equal to the amount of 
        funds appropriated for the State for Federal postsecondary 
        education programs for fiscal year 2012 (except for the funds 
        appropriated for fiscal year 2012 for such programs for such 
        State that are being transferred under section 7).
    (b) Appropriation.--Out of any money in the Treasury of the United 
States not otherwise appropriated, there are appropriated for fiscal 
years 2015 through 2024, such sums as are necessary for grants under 
subsection (a).
    (c) Requirements Relating to Intergovernmental Financing.--The 
Secretary of the Treasury shall make the transfer of funds under grants 
under subsection (a) directly to each State in accordance with the 
requirements of section 6503 of title 31, United States Code.
    (d) Expenditure of Funds.--Amounts received by a State under this 
section for any fiscal year shall be expended by the State in such 
fiscal year or in the succeeding fiscal year.
    (e) Use of Funds.--Funds made available to a State--
            (1) under subsection (a)(1), shall be used by the State for 
        any elementary or secondary education purpose permitted by 
        State law; and
            (2) under subsection (a)(2), shall be used by the State for 
        any postsecondary education purpose permitted by State law.
    (f) Supplement, Not Supplant.--A grant received under subsection 
(a) shall only be used to supplement the amount of funds that would, in 
the absence of such grant, be made available from non-Federal sources 
for elementary school and secondary school programs or postsecondary 
education programs, and not to supplant those funds.

SEC. 5. ADMINISTRATIVE AND FISCAL ACCOUNTABILITY.

    (a) Audits.--
            (1) Contract with approved auditing entity.--Not later than 
        October 1, 2015, and annually thereafter, a State shall 
        contract with an approved auditing entity (as defined under 
        paragraph (3)(B)) for purposes of conducting an audit under 
        paragraph (2) (with respect to the fiscal year ending September 
        30 of such year).
            (2) Audit requirement.--Under a contract under paragraph 
        (1), an approved auditing entity shall conduct an audit of the 
        expenditures or transfers made by a State from amounts received 
        under a grant under section 4, with respect to the fiscal year 
        which such audit covers, to determine the extent to which such 
        expenditures and transfers were expended in accordance with 
        section 4.
            (3) Entity conducting audit.--
                    (A) In general.--With respect to a State, the audit 
                under paragraph (2) shall be conducted by an approved 
                auditing entity in accordance with generally accepted 
                auditing principles.
                    (B) Approved auditing entity.--For purposes of this 
                section, the term ``approved auditing entity'' means, 
                with respect to a State, an entity that is--
                            (i) approved by the Secretary of the 
                        Treasury;
                            (ii) approved by the chief executive 
                        officer of the State; and
                            (iii) independent of any Federal, State, or 
                        local agency.
            (4) Submission of audit.--Not later than April 30, 2016, 
        and annually thereafter, a State shall submit the results of 
        the audit under paragraph (2) (with respect to the fiscal year 
        ending on September 30 of such year) to the State legislature 
        and to the Secretary of the Treasury.
    (b) Reimbursement and Penalty.--If, through an audit conducted 
under subsection (a), an approved auditing entity finds that a State 
violated the requirements of subsection (d) or (e) of section 4, the 
State shall pay to the Treasury of the United States 100 percent of the 
amount of State funds that were used in violation of section 4 as a 
penalty. Insofar as a State fails to pay any such penalty, the 
Secretary of the Treasury shall offset the amount not so paid against 
the amount of any grant otherwise payable to the State under this Act.
    (c) Annual Reporting Requirements.--
            (1) In general.--Not later than January 31, 2016, and 
        annually thereafter, each State shall submit to the Secretary 
        of the Treasury and the State legislature a report on the 
        activities carried out by the State during the most recently 
        completed fiscal year with funds received by the State under a 
        grant under section 4 for such fiscal year.
            (2) Content.--A report under paragraph (1) shall, with 
        respect to a fiscal year--
                    (A) contain the results of the audit conducted by 
                an approved auditing entity for a State for such fiscal 
                year, in accordance with the requirements of subsection 
                (a) of this section;
                    (B) specify the amount of the grant made to the 
                State under section 4; and
                    (C) be in such form and contain such other 
                information as the State determines is necessary to 
                provide--
                            (i) an accurate description of the 
                        activities conducted by the State for the 
                        purpose described under section 4; and
                            (ii) a complete record of the purposes for 
                        which amounts were expended in accordance with 
                        this section.
            (3) Public availability.--A State shall make copies of the 
        reports required under this section available on a public Web 
        site and shall make copies available in other formats upon 
        request.
    (d) Failure To Comply With Requirements.--The Secretary of the 
Treasury shall not make any payment to a State under a grant authorized 
by section 4--
            (1) if an audit for a State is not submitted as required 
        under subsection (a), during the period between the date such 
        audit is due and the date on which such audit is submitted;
            (2) if a State fails to submit a report as required under 
        subsection (c), during the period between the date such report 
        is due and the date on which such report is submitted; or
            (3) if a State violates a requirement of section 4, during 
        the period beginning on the date the Secretary becomes aware of 
        such violation and the date on which such violation is 
        corrected by the State.
    (e) Administrative Supervision and Oversight.--
            (1) Limited role for secretary of treasury and the attorney 
        general.--
                    (A) Treasury.--The authority of the Secretary of 
                the Treasury under this Act is limited to--
                            (i) promulgating regulations, issuing 
                        rules, or publishing guidance documents to the 
                        extent necessary for purposes of implementing 
                        subsection (a)(3)(B), subsection (b), and 
                        subsection (d);
                            (ii) making payments to the States under 
                        grants under section 4;
                            (iii) approving entities under subsection 
                        (a)(3)(B) for purposes of the audits required 
                        under subsection (a);
                            (iv) withholding payment to a State of a 
                        grant under subsection (d) or offsetting a 
                        payment of such a grant to a State under 
                        subsection (b); and
                            (v) exercising the authority relating to 
                        nondiscrimination that is specified in section 
                        6(b).
                    (B) Attorney general.--The authority of the 
                Attorney General to supervise the amounts received by a 
                State under section 4 is limited to the authority under 
                section 6(b).
    (f) Reservation of State Powers.--Nothing in this section shall be 
construed to limit the power of a State, including the power of a State 
to pursue civil and criminal penalties under State law against any 
individual or entity that misuses, or engages in fraud or abuse related 
to, the funds provided to a State under section 4.

SEC. 6. NONDISCRIMINATION PROVISIONS.

    (a) No Discrimination Against Individuals.--No individual shall be 
excluded from participation in, denied the benefits of, or subjected to 
discrimination under, any program or activity funded in whole or in 
part with amounts paid to a State under section 4 on the basis of such 
individual's--
            (1) disability under section 504 of the Rehabilitation Act 
        of 1973 (29 U.S.C. 794);
            (2) sex under title IX of the Education Amendments of 1972 
        (20 U.S.C. 1681 et seq.); or
            (3) race, color, or national origin under title VI of the 
        Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
    (b) Compliance.--
            (1) In general.--If the Attorney General determines that a 
        State or an entity that has received funds from amounts paid to 
        a State under a grant under section 4 has failed to comply with 
        a provision of law referred to in subsection (a), the Secretary 
        of the Treasury shall notify the chief executive officer of the 
        State of such failure to comply and shall request that such 
        chief executive officer secure such compliance.
            (2) Enforcement.--If, not later than 60 days after 
        receiving notification under paragraph (1), the chief executive 
        officer of a State fails or refuses to secure compliance with 
        the provision of law referred to in such notification, the 
        Attorney General may--
                    (A) institute an appropriate civil action; or
                    (B) exercise the powers and functions provided 
                under section 505 of the Rehabilitation Act of 1973 (29 
                U.S.C. 794a), title IX of the Education Amendments of 
                1972 (20 U.S.C. 1681 et seq.), or title VI of the Civil 
                Rights Act of 1964 (42 U.S.C. 2000d et seq.) (as 
                applicable).

SEC. 7. TRANSFER OF CERTAIN DEPARTMENT OF EDUCATION PROGRAMS.

    Not later than 24 months after the date of enactment of this Act--
            (1) each job training program under the jurisdiction of the 
        Department of Education, including the Carl D. Perkins Career 
        and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.) 
        shall be transferred to the Department of Labor;
            (2) each special education grant program under the 
        Individuals with Disabilities Education Act (20 U.S.C. 1460 et 
        seq.) shall be transferred to the Department of Health and 
        Human Services;
            (3) each Indian Education program under the jurisdiction of 
        the Department of Education shall be transferred to the 
        Department of the Interior;
            (4) each Impact Aid program under title VIII of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 7701 
        et seq.) shall be transferred to the Department of Defense; and
            (5) the Federal Pell Grant program under subpart 1 of part 
        A of title IV of the Higher Education Act of 1965 (20 U.S.C. 
        1070a), which shall be capped at $18,000,000,000 per fiscal 
        year, and the Federal student loan programs under parts B and D 
        of title IV of such Act (20 U.S.C. 1070 et seq.; 20 U.S.C. 
        1087a et seq.) shall be transferred to the Department of Health 
        and Human Services.

SEC. 8. GAO REPORT.

    Not later than 90 days after the date of enactment of this Act, the 
Comptroller General of the United States shall submit to the Committee 
on Education and the Workforce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pensions of the Senate 
report, which shall include--
            (1) a review and evaluation as to the feasibility of 
        enhancing the ability of States and local communities to fund 
        education by reducing the Federal tax burden and commensurately 
        eliminating Federal Government involvement in providing grants 
        for education programs; and
            (2) an evaluation of the feasibility of the successor 
        Federal agencies for maintaining the programs to be transferred 
        under section 7.

SEC. 9. PLAN FOR WINDING UP AFFAIRS.

    Not later than 180 days after the date of the enactment of this 
Act, the President shall submit to the Congress a plan for winding up 
the affairs of the Department of Education in accordance with this Act.

SEC. 10. DEFINITIONS.

    In this Act:
            (1) Elementary school; secondary school.--The terms 
        ``elementary school'' and ``secondary school'' have the 
        meanings given the terms in section 9101 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 9101).
            (2) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 102 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 1002).
            (3) State.--The term ``State'' has the meaning given the 
        term in section 103 of the Higher Education Act of 1965 (20 
        U.S.C. 1003).
Output: Department of Education Elimination Act of 2014 - Abolishes the Department of Education (Department) and repeals any program for which it or the Secretary of Education has administrative responsibility. Directs the Secretary of the Treasury to provide grants to states, for FY2015-FY2024, for any: (1) elementary and secondary education purpose permitted by state law, and (2) postsecondary education purpose permitted by state law. Sets the funding level for those grants at the amount of funding provided to states for federal elementary and secondary education programs and the amount provided for federal postsecondary education programs, respectively, for FY2012, minus the funding they were provided for education programs that this Act transfers to other federal agencies. Requires states to contract for an annual audit of their expenditures or transfers of grant funds. Requires the transfer of:  each of the Department's job training programs to the Department of Labor; each special education grant program under the Individuals with Disabilities Education Act to the Department of Health and Human Services (HHS); each of the Department's Indian Education programs to the Department of the Interior; each Impact Aid program under the Elementary and Secondary Education Act of 1965 to the Department of Defense (DOD); and the Federal Pell Grant program and the Federal Family Education Loan and William D. Ford Federal Direct Loan programs, under the Higher Education Act of 1965, to the Department of HHS.  Sets a fiscal year cap on Federal Pell Grant funding.