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SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--The Congress finds the following:
(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 face special challenges in
preparing their students to reach high standards of performance
on State and national assessments.
(b) Purpose.--The purpose of this Act is to provide rural school
students in the United States with increased learning opportunities.

SEC. 3. DEFINITIONS.

In this Act:
(1) The terms ''elementary school'', ''local educational
agency'', and ''State educational agency'' have the meanings
given such terms in section 14101 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 8801).
(2) The term ''eligible local educational agency'' means a
local educational agency that serves--
(A) a school-age population, 20 percent or more of
whom are from families with incomes below the poverty
line; and
''(B)(i) only schools designated by the Secretary
with a school locale code of 6, 7, or 8; or
(ii) a school-age population of 800 or fewer.
(3) The term ''poverty line'' has the meaning given such
term by section 673(2) of the Community Services Block Grant
Act (42 U.S.C. 9902(2)) applicable to a family of the size
involved.
(4) The term ''rural area'' means the area defined by the
Secretary using school locale codes 6, 7, and 8.
(5) The term ''school-age population'' means the number of
students aged 5 through 17.
(6) The term ''school locale code'' has the meaning given
such term by the Secretary.
(7) The term ''Secretary'' means the Secretary of
Education.
(8) The term ''specially qualified agency'' means an
eligible local educational agency, located in a State that does
not participate in a program under this Act in a fiscal year,
that may apply directly to the Secretary for a grant in such
year under section 4(a)(3).

SEC. 4. RURAL EDUCATION INITIATIVE AUTHORIZED.

(a) Grants to States.--
(1) In general.--Except as provided in paragraph (3), from
the amount appropriated under section 10 and not reserved under
subsection (c) for a fiscal year, the Secretary shall award
grants to State educational agencies that have applications
approved under section 5 to enable such 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 that
receives a grant under this section shall receive an
amount that bears the same relation to the amount of
funds appropriated under section 10 that are not
reserved under subsection (c) for a fiscal year as the
number of students in average daily attendance served
by eligible local education agencies in the State bears
to the number of all such students served by eligible
local education agencies in all States for that fiscal
year.
(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 specially qualified 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 5, the Secretary may award, on a competitive
basis, the amount the State educational agency is eligible to
receive under paragraph (2) directly to specially qualified agencies in
the State.
(b) Local Authorized Activities.--Funds made available under this
Act may be used for--
(1) local educational technology efforts as described in
section 3134 of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 6844);
(2) professional development activities designed to prepare
teachers who are teaching out of their primary subject area;
(3) academic enrichment programs described in section 10204
of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 8034);
(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;
and
(5) activities to recruit and retain highly qualified
teachers in special education, mathematics, or science.
(c) Reservation of Funds.--From the amount appropriated under
section 10 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.
(d) Relation to Other Federal Funding.--Funds received under this
Act by a State educational agency or a specially qualified agency shall
not be taken into consideration in determining the eligibility for, or
amount of, any other Federal funding awarded to such agency.

SEC. 5. APPLICATIONS.

Each State educational agency or specially qualified agency
desiring 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. Such application shall
include specific measurable goals and objectives relating to increased
student academic achievement, decreased student drop-out rates, or such
other factors that the State educational agency or specially qualified
agency may choose to measure.

SEC. 6. STATE DISTRIBUTION OF FUNDS.

(a) Award Basis.--A State educational agency that receives funds
under this Act shall award grants to eligible local educational
agencies or provide assistance to schools described in subsection
(b)(2)--
(1) on a competitive basis; or
(2) according to a formula based on the number of students
served by the eligible local educational agencies or schools
(as appropriate) in the State, as determined by the State.

SEC. 7. ADMINISTRATIVE COSTS.

A State educational agency or specially qualified agency that
receives funds under this Act may not use more than 5 percent of the
grant funds for State activities or administrative costs related to the
program.

SEC. 8. REPORTS.

(a) State Educational Agency Reports.--
(1) Contents.--Each State educational agency that receives
a grant under this Act shall submit an annual report to the
Secretary describing--
(A) the methods the State educational agency used
to award grants to eligible local educational agencies
under this Act;
(B) how eligible local educational agencies and
schools used funds provided under this Act; and
(C) the degree to which progress has been made
toward meeting the goals and objectives described the
application submitted under section 5.
(2) Availability.--The Secretary shall make available the
annual State reports received under paragraph (1) for
dissemination to the Congress, interested parties (including
educators, parents, students, and advocacy and civil rights
organizations), and the public.
(b) Specially Qualified Agency Reports.--Each specially qualified
agency that receives a grant under this Act shall submit an annual
report to the Secretary describing how such agency used funds received
under this Act to coordinate with other Federal, State, and local
programs.
(c) Report by Secretary to Congress.--The Secretary shall prepare
and submit to Congress an annual report which shall describe--
(1) the methods the State educational agency used to award
grants to eligible local educational agencies and to provide
assistance to schools under this Act;
(2) how eligible local educational agencies used funds
provided under this Act; and
(3) 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.

SEC. 9. ACCOUNTABILITY.

If, at the end of the third consecutive year in which a State
educational agency or specially qualified agency receives funds under
this Act, the Secretary determines that such agency has not
substantially met its performance goals and objectives described in the
application submitted under section 5, such agency shall be ineligible
to receive additional funds under this Act for a period of one year
after the date of such determination.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out this Act
$300,000,000 for each of fiscal years 2002 through 2005.
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 competitive or formula subgrants to rural local educational agencies (LEAs) for elementary and secondary education development activities; and (2) direct competitive grants for such activities to specially qualified LEAs in nonparticipating States.Authorizes local use of such funds for: (1) certain local educational technology activities; (2) professional development designed to prepare teachers who are teaching out of their primary subject area; (3) certain academic enrichment programs; (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; and (5) recruitment and retention of highly qualified teachers in special education, mathematics, or science.