SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Education Development 
Initiative for the 21st Century Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to provide rural school students in the 
United States with increased learning opportunities.

SEC. 3. FINDINGS.

    Congress makes the following findings:
            (1) While there are rural education initiatives identified 
        at the State and local level, no Federal education policy 
        focuses on the specific needs of rural school districts and 
        schools, especially those that serve poor students.
            (2) The National Center for Educational Statistics (NCES) 
        reports that while 46 percent of our Nation's public schools 
        serve rural areas, they only receive 22 percent of the Nation's 
        education funds annually.
            (3) A critical problem for rural school districts involves 
        the hiring and retention of qualified administrators and 
        certified teachers (especially in Special Education, Science, 
        and Mathematics). Consequently, teachers in rural schools are 
        almost twice as likely to provide instruction in two or more 
        subjects than teachers in urban schools. Rural schools also 
        face other tough challenges, such as shrinking local tax bases, 
        high transportation costs, aging buildings, limited course 
        offerings, and limited resources.
            (4) Data from the National Assessment of Educational 
        Progress (NAEP) consistently shows large gaps between the 
        achievement of students in high-poverty schools and those in 
        other schools. High-poverty schools will face special 
        challenges in preparing their students to reach high standards 
        of performance on State and national assessments.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Elementary school; local educational agency; secondary 
        school; state educational agency.--The terms ``elementary 
        school'', ``local educational agency'', ``secondary school'', 
        and ``State educational agency'' have the meanings given the 
        terms in section 14101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801).
            (2) Eligible local educational agency.--The term ``eligible 
        local educational agency'' means a local educational agency 
        that serves--
                    (A) a school age population 15 percent or more of 
                whom are from families with incomes below the poverty 
                line; and
                    (B)(i) a school locale code of 6, 7, 8; or
                    (ii) a school age population of 800 or fewer 
                students.
            (3) Rural area.--The term ``rural area'' includes the area 
        defined by the Department of Education using school locale 
        codes 6, 7, and 8.
            (4) Poverty line.--The term ``poverty line'' means the 
        poverty line (as defined by the Office of Management and 
        Budget, and revised annually in accordance with section 673(2) 
        of the Community Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
            (5) School locale code.--The term ``school locale code'' 
        has the meaning as defined by the Department of Education.
            (6) School age population.--The term ``school age 
        population'' means the number of students aged 5 through 17.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.

SEC. 5. PROGRAM AUTHORIZED.

    (a) Reservation.--From amounts appropriated under section 9 for a 
fiscal year the Secretary shall reserve 0.5 percent to make awards to 
elementary or secondary schools operated or supported by the Bureau of 
Indian Affairs to carry out the purpose of this Act.
    (b) Grants to States.--
            (1) In general.--From amounts appropriated under section 9 
        that are not reserved under subsection (a) for a fiscal year, 
        the Secretary shall award grants to State educational agencies 
        that have applications approved under section 7 to enable the 
        State educational agencies to award grants to eligible local 
        educational agencies for local authorized activities described 
        in subsection (c).
            (2) Formula.--
                    (A) In general.--Each State educational agency 
                shall receive a grant under this section in an amount 
                that bears the same relation to the amount of funds 
                appropriated under section 9 that are not reserved 
                under subsection (a) for a fiscal year as the school 
                age population served by eligible local educational 
                agencies in the State bears to the school age 
                population served by eligible local educational 
                agencies in all States.
                    (B) Data.--In determining the school age population 
                under subparagraph (A) the Secretary shall use the most 
                recent data available from the Bureau of the Census.
            (3) Direct awards to local educational agencies.--If a 
        State educational agency elects not to participate in the 
        program under this Act or does not have an application approved 
        under section 7, the Secretary may award, on a competitive 
        basis, the amount the State educational agency is eligible to 
        receive under paragraph (2) directly to eligible local 
        educational agencies in the State.
            (4) Matching requirement.--Each eligible local educational 
        agency that receives a grant under this Act shall contribute 
        resources with respect to the local authorized activities to be 
        assisted, in cash or in kind, from non-Federal sources, in an 
        amount equal to the Federal funds awarded under the grant.
    (c) Local Authorized Activities.--Grant funds awarded to local 
educational agencies under this Act shall be used for--
            (1) for local educational technology efforts as established 
        under section 6844 of title 20, United States Code;
            (2) for professional development activities designed to 
        prepare those teachers teaching out of their primary subject 
        area;
            (3) for academic enrichment programs established under 
        section 10204 of title 20 in United States Code;
            (4) innovative academic enrichment programs related to the 
        educational needs of students at-risk of academic failure, 
        including remedial instruction in one or more of the core 
        subject areas of English, Mathematics, Science, and History; or
            (5) activities to recruit and retain highly qualified 
        teachers in Special Education, Math, and Science.
    (d) Relation to Other Federal Funding.--Funds received under this 
Act by a State educational agency or an eligible local educational 
agency shall not be taken into consideration in determining the 
eligibility for, or amount of, any other Federal funding awarded to the 
agency.

SEC. 6. STATE DISTRIBUTION OF FUNDS.

    (a) Award Basis.--A State educational agency shall award grants to 
eligible local educational agencies according to a formula or 
competitive grant program developed by the State educational agency and 
approved by the Secretary.
    (b) First Year.--For the first year that a State educational agency 
receives a grant under this Act, the State educational agency--
            (1) shall use not less than 99 percent of the grant funds 
        to award grants to eligible local educational agencies in the 
        State; and
            (2) may use not more than 1 percent for State activities 
        and administrative costs and technical assistance related to 
        the program.
    (c) Succeeding Years.--For the second and each succeeding year that 
a State educational agency receives a grant under this Act, the State 
educational agency--
            (1) shall use not less than 99.5 percent of the grant funds 
        to award grants to eligible local educational agencies in the 
        State; and
            (2) may use not more than 0.5 percent of the grant funds 
        for State activities and administrative costs related to the 
        program.

SEC. 7. APPLICATIONS.

    Each State educational agency, or local educational agency eligible 
for a grant under section 5(b)(3), that desires a grant under this Act 
shall submit an application to the Secretary at such time, in such 
manner, and accompanied by such information as the Secretary may 
require.

SEC. 8. REPORTS; ACCOUNTABILITY; STUDY.

    (a) State Reports.--
            (1) Contents.--Each State educational agency that receives 
        a grant under this Act shall provide an annual report to the 
Secretary. The report shall describe--
                    (A) the method the State educational agency used to 
                award grants to eligible local educational agencies 
                under this Act;
                    (B) how eligible local educational agencies used 
                funds provided under this Act;
                    (C) how the State educational agency provided 
                technical assistance for an eligible local educational 
                agency that did not meet the goals and objectives 
                described in subsection (c)(3); and
                    (D) how the State educational agency took action 
                against an eligible local educational agency if the 
                local educational agency failed, for 2 consecutive 
                years, to meet the goals and objectives described in 
                subsection (c)(3).
            (2) Availability.--The Secretary shall make the annual 
        State reports received under paragraph (1) available for 
        dissemination to Congress, interested parties (including 
        educators, parents, students, and advocacy and civil rights 
        organizations), and the public.
    (b) Local Educational Agency Reports.--Each eligible local 
educational agency that receives a grant under section 5(b)(3) shall 
provide an annual report to the Secretary. The report shall describe 
how the local educational agency used funds provided under this Act and 
how the local educational agency coordinated funds received under this 
Act with other Federal, State, and local funds.
    (c) Report to Congress.--The Secretary shall prepare and submit to 
Congress an annual report. The report shall describe--
            (1) the methods the State educational agencies used to 
        award grants to eligible local educational agencies under this 
        Act;
            (2) how eligible local educational agencies used funds 
        provided under this Act; and
            (3) the progress made by State educational agencies and 
        eligible local educational agencies receiving assistance under 
        this Act in meeting specific, annual, measurable performance 
        goals and objectives established by such agencies for 
        activities assisted under this Act.
    (d) Accountability.--The Secretary, at the end of the third year 
that a State educational agency participates in the program assisted 
under this Act, shall permit only those State educational agencies that 
met their performance goals and objectives, for two consecutive years, 
to continue to participate in the program.
    (e) Study.--The Comptroller General of the United States shall 
conduct a study regarding the impact of assistance provided under this 
Act on student achievement. The Controller General shall report the 
results of the study to Congress.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this Act 
$300,000,000 for each of the fiscal years 2002 through 2005.
Output: Rural Education Development Initiative for the 21st Century Act - Directs the Secretary of Education to make: (1) formula grants to applicant State educational agencies to award subgrants to rural local educational agencies (LEAs) serving certain percentages of children from poor families, for elementary and secondary education development activities; and (2) direct competitive grants for such activities to specially qualified LEAs in nonparticipating States.Requires LEAs or their schools to use such funds for: (1) educational technology, including software and hardware; (2) professional development; (3) technical assistance; (4) teacher recruitment and retention; (5) parental involvement activities; or (6) academic enrichment programs or other education programs.