S. 8Senate108th Congress (2003-2005)In Committee

Educational Excellence for All Learners Act of 2003

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SenateIntro Referral Latest Action

Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Health, Education, Labor, and Pensions Committee

January 7, 2003

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SenateIntro Referral

Introduced in Senate

January 7, 2003

SenateIntro Referral

Sponsor introductory remarks on measure. (CR 1/9/2003 S134)

January 7, 2003

SenateIntro Referral

Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Health, Education, Labor, and Pensions Committee

January 7, 2003

Floor Debate

5 members

What members said about S. 8 on the floor

2 Republicans3 Democrats

Sen. Harry ReidD-NV · Jan 9, 2003

Mr. President, we did have a meeting with the President yesterday. It was one where we talked about the things that need to be done. The people who were at the meeting are experienced and understand the legislative perils we face on a daily basis. But we also recognize there are things that need to be done for the country, and we have to work toward that.

I want to just briefly mention today that Senator Daschle introduced, on behalf of the Democratic caucus, bills that we believe are extremely important to pass. These are not necessarily in the order of importance, but the first bill introduced was S. 6, the Comprehensive Homeland Security Act.

Basically, this bill builds on legislative initiatives that were passed in the 107th Congress. It would authorize funding for important programs. We have big holes in our security blanket. We have to do something about chemical security, domestic nuclear plants. We have to do something about rail security, security of water treatment works, and border security efforts to combat terrorism generally. This legislation is, in my opinion, a must-do piece of legislation.

Prescription drugs has been talked about endlessly, with nothing having been done. It is so important that we pass legislation that makes Medicare a more meaningful, modern piece of legislation for our senior citizens.

When the Medicare legislation passed in 1965, there was really no need for prescription drugs because they were not used as they are today to make people more comfortable, to save lives, and to prevent disease. But now that is part of the basic treatment that seniors have.

The average senior has 18 prescriptions filled every year. As a result, they pay large amounts out of their pocket for prescription drugs. What we have to do is provide a prescription drug benefit as part of Medicare. We need to do that and also in the process preserve Medicare. Medicare is not a perfect program, but it is a good program. People are saying it is about to go broke. Medicare is not about to go broke. And always remember that Medicare is a pay-as-you-go program. We continually have to refund and figure out ways to finance Medicare. That is the way it is. It is different than Social Security.

So a prescription drug benefit is important for Medicare. Also, it is important we get ahold of prescription drug prices generally for everybody. Prescription drugs in this country are tremendously expensive, more expensive than in any other country, even though we develop and manufacture and produce most of them. It is not fair we spend more on prescription drugs than other countries. It is not fair they are cheaper in Canada and cheaper in Mexico than they are in the United States.

The Leave No Child Behind Act is something that is an important piece of legislation, but the problem now is that it is not funded. We have to provide full funding for this No Child Left Behind Act. We have to hold States accountable for ensuring that all students have access to educational resources.

We have to guarantee full funding of the Individuals With Disabilities Education Act.

The Senator from New Hampshire has been a loud advocate for doing something to fund that program. We have to, as part of S. 8, help communities modernize public schools, and there are other things we need to do included in S. 8 that we need to debate and pass this year.

S. 9 is the protection for pensions. This is a buildup of last year's corporate scandals and the 3-year stock market decline. They have simply highlighted the need to strengthen pension protections. That is what S. 9 is all about.

S. 10 deals with the more than 40 million people who have no health insurance. There are many other people who have inadequate health insurance. We have to do something to provide some way of these people getting decent medical care. Over 40 million people with no health insurance says it all. That is what S. 10 is all about.

As to the Equal Rights and Equal Dignity for Americans Act, we believe that we have to expand hate crimes protection, strengthen enforcement of existing civil rights laws, support legal representation for indigent Americans, and respond to the injustice of racial profiling. That is what S. 16 is all about. It is important legislation that needs to be passed.

Global warming is S. 17. There is no question, there is no debate-- sensibly, logically, intellectually--that global warming is taking place. It is. The question is, what are we going to do about it? That is the key.

We as Democrats talk about the minimum wage. We do it because most people have the stereotype that people who draw the minimum wage are kids flipping hamburgers at McDonald's. That is not the case. In fact, 60 percent of the people who draw the minimum wage are women; for 40 percent of those women, that is the only money they get for them and their families. So it is really important that we do something to increase the minimum wage. The minimum wage act would in two steps raise the minimum wage by $1.50: 75 cents when we pass the legislation; 75 cents after that. It is important we do that.

Many people who work two and sometimes three jobs, most of them part time, are paid the minimum wage. We need to increase that. That is the right thing to do.

I was very happy the leader included in his package of must-do legislation for the Democratic caucus this year the Veterans and Military Personnel Fairness Act. Among other provisions, this includes expanding full concurrent receipt of military retirement. We have made a little bit of progress over the last couple years. Last year we made the most progress, but we are still lacking.

If you retire from the military and have a medical disability, you cannot draw both pensions. Prior to last year, no one could. Last year we provided that people who are Purple Heart recipients basically can. We need to expand that. I was very happy the leader included this legislation that I authored and have worked on very closely with Senators Levin and Warner. It has taken years to get where we are now. We will continue to try to expand until people who retire from the military and have a disability can draw the same pension as somebody who retires from Sears and Roebuck and the Department of Interior and has the military disability. They should be able to draw the pension just the same. We want that to happen.

S. 21, the Emergency Disaster Assistance Act, addresses severe drought and floods, natural disasters farmers and ranchers face all over the country. We need to do more to take care of these desperate people. Time magazine had their pictures of the year. I looked at that last night before going to bed. It is interesting to note that a number of those pictures deal with the drought that has taken place. One picture is of a 67-year-old farmer. For the first time in his career, he has nothing. He said: Farmers know what to do when it rains; we don't know what to do when it doesn't rain.

That is what this legislation is all about. I hope in the spirit of what the majority leader talked about today and the President talked about at the White House yesterday we can work together to pass this legislation.

The majority has pieces of legislation that they believe are important to pass. What we should do is work together. They have pieces of our legislation. Maybe we can work together. That is what we should do to pass the legislation. I don't think there would be many who would disagree that this legislation is important. They may not agree with every part of it, but that is what legislation is about. Legislation is the art of compromise. I hope we can move forward and do some compromising and some legislating.

Before the Senator takes his 40 minutes, I would say to my friends on the Democratic side, prior to their arriving, Senator Gregg asked for 40 minutes of the hour that the Republicans have set aside. He will do that now. Do you want to lock in a time for the two Senators now?

You are entitled to 10. So following the remarks of the Senator from New Hampshire, the Senator from Arkansas will speak. The Senator from Minnesota?

Mr. President, I ask unanimous consent that following the statement of the Senator from New Hampshire, the Senator from Arkansas be recognized for up to 10 minutes and the Senator from Minnesota for up to 15 minutes.

Sen. Susan M. CollinsR-ME · Feb 25, 2003

Mr. President, I am pleased to join my colleague from Wisconsin, Senator Russ Feingold, in submitting a resolution to establish an annual National Visiting Nurse Associations Week in honor of these…

The Visiting Nurse Associations, VNAs, of today are founded on the principle that people who are sick, disabled and elderly benefit most from health care when it is offered in their own homes. Home care is an increasingly important part of our health care system today. The kinds of highly skilled--and often technically complex--services that the VNAs provide have enabled millions of our most frail and vulnerable patients to avoid hospitals and nursing homes and stay just where they want to be--in the comfort and security of their own homes.

Visiting Nurse Associations are non-profit home health agencies that provide cost-effective and compassionate home and community-based health care to individuals, regardless of their condition or ability to pay for services. VNAs literally created the profession and practice of home health care more than one hundred years ago, at a time when there were no hospitals in many communities and patients were cared for at home by families who did the best they could. VNAs made a critical difference to these families, bringing professional skills into the home to care for the patient and support the family. They made a critical difference in the late 19th century, and are making a critical difference now as we embark upon the 21st.

VNAs were pioneers in the public health movement, and, in the late 1800s, VNA responsiveness meant running milk banks, combating infectious diseases, and providing care for the poor during massive influenza epidemics. Today, that same responsiveness means caring for the dependent elderly, the chronically disabled, and the terminally ill--some of our most vulnerable citizens--and providing high-tech services previously provided in hospitals, such as ventilator care, blood transfusions, pain management and home chemotherapy.

Health care has gone full circle. Patients are spending less time in the hospital. More and more procedures are being done on an outpatient basis, and recovery and care for patients with chronic diseases and conditions has increasingly been taking place in the home. Moreover, the number of Americans who are chronically ill or disabled in some way continues to grow each year. Once again, VNAs are making a critical difference, providing comprehensive home health services and caring support to patients and their families across the country

There currently are approximately 500 VNAs nationwide. Through these exceptional organizations, 90,000 clinicians dedicate their lives to bringing health care into the homes of an estimated three million Americans every year. VNAs are truly the heart of home care in this country today, and it is time for Congress to recognize the vital services that visiting nurses provide to their patients and their families. I urge my colleagues to join Senator Feingold and me in cosponsoring this resolution establishing an annual National Visiting Nurse Associations' Week.

Sen. Judd GreggR-NH · Jan 9, 2003

I have no objection. Mr. President, I will speak for about 40 minutes. I understood the Senator from Arkansas only needed about 5 minutes. I am happy to yield to her now as long as it does not impact…

Sen. Blanche L. LincolnD-AR · Jan 9, 2003

Mr. President, I would need 5 minutes. Mr. President, I ask unanimous consent that I might proceed as in morning business for 5 minutes and that it not take anything out of the time of the Senator…

Sen. Mark DaytonD-MN · Jan 9, 2003

If I may have 15.

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Introduced in SenateIssued January 7, 2003

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 8 Introduced in Senate (IS)]

108th CONGRESS
1st Session
S. 8

To encourage lifelong learning by investing in public schools and
improving access to and affordability of higher education and job
training.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

January 7, 2003

Mr. Daschle (for himself, Mr. Kennedy, Mrs. Murray, Ms. Mikulski, Mr.
Dodd, Mr. Breaux, Mr. Johnson, Mr. Leahy, Mr. Rockefeller, Mr. Levin,
Mr. Durbin, Mr. Sarbanes, Mrs. Clinton, Mr. Akaka, Mr. Schumer, Mr.
Biden, Ms. Stabenow, Mr. Corzine, Mr. Dayton, Mr. Lautenberg, Mr. Reid,
and Mr. Baucus) introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

A BILL

To encourage lifelong learning by investing in public schools and
improving access to and affordability of higher education and job
training.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Educational Excellence for All
Learners Act of 2003''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--FUNDING EDUCATION REFORM

Sec. 101. Sense of the Senate.
Subtitle A--Elementary and Secondary Education Act of 1965

Sec. 111. Increase in authorization.
Subtitle B--Individuals With Disabilities Education Act

Sec. 121. Helping children succeed by fully funding part B of the
Individuals with Disabilities Education
Act.
Subtitle C--Educational Equity

Sec. 131. Findings and purposes.
Chapter 1subchapter a--access to educational opportunityl Systems
Sec. 135. State public school systems.
Sec. 136. Fundamentsubchapter b--state accountability
Sec. 141. State accountability plan.
Sec. 142. Cosubchapter c--report to congress and the public
Sec. 151. Annual report onsubchapter d--remedy systems.
Sec. 161. Civil action for enforcement.
Chapter 2--Effects Of Educational Disparities on Economic Growth and
National Defense

Sec. 171. Effects on economic growth and productivity.
Sec. 172. Effects on national defense.
Chapter 3--General Provisions

Sec. 181. Definitions.
Sec. 182. Rulemaking.
Sec. 183. Construction.
TITLE II--MODERNIZING SCHOOL FACILITIES

Sec. 201. Short title.
Sec. 202. Expansion of incentives for public schools.
Sec. 203. Application of certain labor standards on construction
projects financed under public school
modernization program.
Sec. 204. Employment and training activities relating to construction
or reconstruction of public school
facilities.
Sec. 205. Indian school construction.
TITLE III--MAKING HIGHER EDUCATION MORE ACCESSIBLE

Subtitle A--College Access

Sec. 301. Expansion of gearup and trio.
Sec. 302. Programs for students whose families are engaged in migrant
and seasonal farmwork.
Subtitle B--Enhancing Programs for Minority Serving Institutions

Sec. 311. Increasing diversity.
Subtitle C--NTIA Digital Network Technology Program

Sec. 331. Establishment of program.
Sec. 332. Definitions.
Sec. 333. Authorization of appropriations.
Subtitle D--Higher Education and Immigration

Sec. 341. Restoration of State option to determine residency for
purposes of higher education benefits.
Sec. 342. Cancellation of removal and adjustment of status of certain
alien high school graduates who are long-
term residents of the United States.
Sec. 343. Annual report.
TITLE IV--MAKING HIGHER EDUCATION AFFORDABLE

Subtitle A--Pell Grants

Sec. 411. Sense of the Senate.
Sec. 412. Covering Pell Grant shortfall.
Subtitle B--Student Loan Origination Fees

Sec. 421. Phaseout of student loan origination fees.
Subtitle C--Hope Scholarship

Sec. 431. Hope and lifetime learning credits to be refundable.

TITLE I--FUNDING EDUCATION REFORM

SEC. 101. SENSE OF THE SENATE.

(a) Findings.--The Senate finds the following:
(1) Congress enacted, with bipartisan support, and the
President signed into law the No Child Left Behind Act of 2001,
that reauthorized the Elementary and Secondary Education Act of
1965 (20 U.S.C. 6301 et seq.). The new law required States to
set high standards for learning and required schools to
implement reforms to help improve student achievement. In
return, Congress and the President pledged to make sure schools
would have resources to carry out the reforms as called for in
the new law.
(2) $9,000,000,000 in additional resources are needed to
fully fund the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6301 et seq.) in fiscal year 2003.
(3) The Administration's budget request for fiscal year
2003 cut funding for programs in the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6301 et seq.) by $90,000,000,
meaning schools would have fewer resources to implement the new
law.
(4) The Administration's budget request for fiscal year
2003 provides insufficient resources to help communities
modernize schools and address overcrowding.
(5) Because of declining revenues due to the economic
recession and stock market declines, many States are being
forced to cut back support for public schools.
(b) Sense of the Senate.--It is the sense of the Senate that--
(1) it is in the best interest of the Nation that all
students have access to a high quality elementary and secondary
education; and
(2) the No Child Left Behind Act of 2001 should be fully
funded.

Subtitle A--Elementary and Secondary Education Act of 1965

SEC. 111. INCREASE IN AUTHORIZATION.

The Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301
et seq.) is amended--
(1) in section 1002--
(A) in subsection (a), by striking paragraphs (3)
through (6) and inserting the following:
``(3) $18,500,000,000 for fiscal year 2004;
``(4) $21,612,000,000 for fiscal year 2005;
``(5) $24,724,000,000 for fiscal year 2006;
``(6) $27,837,000,000 for fiscal year 2007;
``(7) $30,949,000,000 for fiscal year 2008;
``(8) $34,061,000,000 for fiscal year 2009;
``(9) $37,173,000,000 for fiscal year 2010;
``(10) $40,286,000,000 for fiscal year 2011;
``(11) $43,398,000,000 for fiscal year 2012; and
``(12) $46,510,000,000 for fiscal year 2013.''; and
(B) in subsection (c), by striking ``2002 and such
sums as may be necessary for each of the 5 succeeding
fiscal years'' and inserting ``2002, such sums as may
be necessary for fiscal year 2003, $500,000,000 for
fiscal year 2004, and such sums as may be necessary for
each succeeding fiscal year'';
(2) in section 1705, by adding at the end the following:
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $44,000,000 for fiscal year
2004, and such sums as may be necessary for each succeeding fiscal
year.'';
(3) in section 1803, by striking ``2002 and such sums as
may be necessary for each of the 5 succeeding fiscal years,''
and inserting ``2002, such sums as may be necessary for fiscal
year 2003, $125,000,000 for fiscal year 2004, and such sums as
may be necessary for each succeeding fiscal year,'';
(4) by striking section 2103(a) and inserting the
following:
``(a) Grants to States, Local Education Agencies, and Eligible
Partnerships.--There are authorized to be appropriated to carry out
this part (other than subpart 5) $3,175,000,000 for fiscal year 2002,
such sums as may be necessary for fiscal year 2003, $3,500,000,000 for
fiscal year 2004, and such sums as may be necessary for each succeeding
fiscal year.'';
(5) by striking section 3001(a)(1) and inserting the
following:
``(1) In general.--Subject to subsection (b), there are
authorized to be appropriated to carry out this title, except
for subpart 4 of part B, $750,000,000 for fiscal year 2002,
such sums as may be necessary for fiscal year 2003,
$1,200,000,000 for fiscal year 2004, and such sums as may be
necessary for each succeeding fiscal year.'';
(6) by striking section 4003 and inserting the following:

``SEC. 4003. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated--
``(1) $650,000,000 for fiscal year 2002, such sums as may
be necessary for fiscal year 2003, $700,000,000 for fiscal year
2004, and such sums as may be necessary for each succeeding
fiscal year, for State grants under subpart 1; and
``(2) such sums as may be necessary for fiscal years 2002
and 2003, $225,000,000 for fiscal year 2004, and such sums as
may be necessary for each succeeding fiscal year, for national
programs under subpart 2.'';
(7) by striking section 4206 and inserting the following:

``SEC. 4206. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated $1,250,000,000 for fiscal
year 2002, $1,500,000,000 for fiscal year 2003, $2,000,000,000 for
fiscal year 2004, and such sums as may be necessary for each succeeding
fiscal year.''; and
(8) in section 6234, by striking ``2002 and such sums as
may be necessary for each of the 5 succeeding fiscal years,''
and inserting ``2002, such sums as may be necessary for fiscal
year 2003, $300,000,000 for fiscal year 2004, and such sums as
may be necessary for each succeeding fiscal year,''.

Subtitle B--Individuals With Disabilities Education Act

SEC. 121. HELPING CHILDREN SUCCEED BY FULLY FUNDING PART B OF THE
INDIVIDUALS WITH DISABILITIES EDUCATION ACT.

(a) Findings.--Congress makes the following findings:
(1) All children deserve a quality education.
(2) In Pennsylvania Association for Retarded Children v.
Commonwealth of Pennsylvania (334 F. Supp. 1247) (E. Dist. Pa.
1971), and Mills v. Board of Education of the District of
Columbia (348 F. Supp. 866) (Dist. D.C. 1972), the courts found
that children with disabilities are entitled to an equal
opportunity to an education under the 14th amendment to the
Constitution.
(3) In 1975, Congress passed what is now known as the
Individuals with Disabilities Education Act (referred to in
this section as ``IDEA'') (20 U.S.C. 1400 et seq.) to help
States provide all children with disabilities a free,
appropriate public education in the least restrictive
environment. At full funding, Congress contributes 40 percent
of the excess cost of educating children with disabilities.
(4) Before 1975, only \1/5\ of the children with
disabilities received a formal education. At that time, many
States had laws that specifically excluded many children with
disabilities, including children who were blind, deaf, or
emotionally disturbed, from receiving such an education.
(5) IDEA currently serves an estimated 200,000 infants and
toddlers, 600,000 preschoolers, and 5,400,000 children 6 to 21
years of age, and their families.
(6) IDEA enables children with disabilities to be educated
in their communities, and thus, has assisted in dramatically
reducing the number of children with disabilities who must live
in State institutions away from their families.
(7) The number of children with disabilities who complete
high school has grown significantly since the enactment of
IDEA.
(8) The number of children with disabilities who enroll in
college as freshmen has more than tripled since the enactment
of IDEA.
(9) The overall effectiveness of IDEA depends upon well-
trained special education and general education teachers,
related services personnel, and other school personnel.
Congress recognizes concerns about the nationwide shortage of
personnel serving students with disabilities and the need for
improvement in the qualifications of such personnel.
(10) IDEA has raised the Nation's awareness about the
abilities and capabilities of children with disabilities.
(11) Improvements to IDEA in the 1997 amendments increased
the academic achievement of children with disabilities and
helped them to lead productive, independent lives.
(12) Changes made in 1997 also addressed the needs of those
children whose behavior impedes learning by implementing
behavioral assessments and intervention strategies to ensure
that they receive appropriate supports in order to receive a
quality education.
(13) IDEA requires a full partnership between parents of
children with disabilities and education professionals in the
design and implementation of the educational services provided
to children with disabilities.
(14) While the Federal Government has more than doubled
funding for part B of IDEA since 1995, the Federal Government
has never provided more than 16 percent of the maximum State
grant allocation for educating children with disabilities.
(15) By fully funding part B of IDEA, Congress will
strengthen the ability of States and localities to implement
the requirements of IDEA.
(b) Funding.--Section 611(j) of the Individuals with Disabilities
Education Act (20 U.S.C. 1411(j)) is amended to read as follows:
``(j) Funding.--For the purpose of carrying out this part, other
than section 619, there are authorized to be appropriated--
``(1) $11,029,000,000 for fiscal year 2004, and, there are
hereby appropriated $2,500,000,000 for fiscal year 2004, which
shall become available for obligation on July 1, 2004, and
shall remain available through September 30, 2005;
``(2) $13,529,000,000 for fiscal year 2005, and, there are
hereby appropriated $5,000,000,000 for fiscal year 2005, which
shall become available for obligation on July 1, 2005, and
shall remain available through September 30, 2006;
``(3) $16,029,000,000 for fiscal year 2006, and, there are
hereby appropriated $7,500,000,000 for fiscal year 2006, which
shall become available for obligation on July 1, 2006, and
shall remain available through September 30, 2007;
``(4) $18,529,000,000 for fiscal year 2007, and, there are
hereby appropriated $10,000,000,000 for fiscal year 2007, which
shall become available for obligation on July 1, 2007, and
shall remain available through September 30, 2008;
``(5) $21,029,000,000 for fiscal year 2008, and, there are
hereby appropriated $12,500,000,000 for fiscal year 2008, which
shall become available for obligation on July 1, 2008, and
shall remain available through September 30, 2009;
``(6) $23,192,000,000, or the sum of the maximum amounts of
grants that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2009, and there are hereby
appropriated $14,663,000,000 for fiscal year 2009, which shall
become available for obligation on July 1, 2009, and shall
remain available through September 30, 2010, except that if
such sum is less than $23,192,000,000, then the amount
appropriated under this paragraph shall be reduced by the
difference between $23,192,000,000 and such sum;
``(7) $23,845,000,000, or the sum of the maximum amount of
grants that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2010, and there are hereby
appropriated $15,317,000,000 for fiscal year 2010, which shall
become available for obligation on July 1, 2010, and shall
remain available through September 30, 2011, except that if
such sum is less than $23,845,000,000, then the amount
appropriated under this paragraph shall be reduced by the
difference between $23,845,000,000 and such sum;
``(8) $24,483,000,000, or the sum of the maximum amount of
grants that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2011, and there are hereby
appropriated $15,955,000,000 for fiscal year 2011, which shall
become available for obligation on July 1, 2011, and shall
remain available through September 30, 2012, except that if
such sum is less than $24,483,000,000, then the amount
appropriated under this paragraph shall be reduced by the
difference between $24,483,000,000 and such sum;
``(9) $25,125,000,000, or the sum of the maximum amount of
grants that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2012, and there are hereby
appropriated $16,596,000,000 for fiscal year 2012, which shall
become available for obligation on July 1, 2012, and shall
remain available through September 30, 2013, except that if
such sum is less than $25,125,000,000, then the amount
appropriated under this paragraph shall be reduced by the
difference between $25,125,000,000 and such sum;
``(10) $25,758,000,000, or the sum of the maximum amount of
grants that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2013, and there are hereby
appropriated $17,229,000,000 for fiscal year 2013, which shall
become available for obligation on July 1, 2013, and shall
remain available through September 30, 2014, except that if
such sum is less than $25,758,000,000, then the amount
appropriated under this paragraph shall be reduced by the
difference between $25,758,000,000 and such sum; and
``(11) such sums as may be necessary for fiscal year 2014
and each subsequent fiscal year.''.

Subtitle C--Educational Equity

SEC. 131. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds the following:
(1) A high-quality, highly competitive education for all
students is imperative for the economic growth and productivity
of the United States, for its effective national defense, and
to achieve the historical aspiration to be one Nation of equal
citizens. It is therefore necessary and proper to overcome the
nationwide phenomenon of State public school systems that do not meet
the requirements of section 135(a), in which high-quality public
schools typically serve high-income communities and poor-quality
schools typically serve low-income, urban, rural, and minority
communities.
(2) There exists in the States a significant educational
opportunity gap for low-income, urban, rural, and minority
students characterized by the following:
(A) Continuing disparities within States in
students' access to the fundamentals of educational
opportunity described in section 136.
(B) Highly differential educational expenditures
(adjusted for cost and need) among school districts
within States.
(C) Radically differential educational achievement
among students in school districts within States as
measured by the following:
(i) Achievement in mathematics, reading or
language arts, and science on State academic
assessments required under section 1111(b)(3)
of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6311(b)(3)) and on the
National Assessment of Educational Progress.
(ii) Advanced placement courses taken.
(iii) SAT and ACT test scores.
(iv) Dropout rates and graduation rates.
(v) College-going and college-completion
rates.
(vi) Job placement and retention rates and
indices of job quality.
(3) As a consequence of this educational opportunity gap,
the quality of a child's education depends largely upon where
the child's family can afford to live, and the detriments of
lower quality education are imposed particularly on--
(A) children from low-income families;
(B) children living in urban and rural areas; and
(C) minority children.
(4) Since 1785, Congress, exercising the power to admit new
States under section 3 of article IV of the Constitution (and
previously, the Congress of the Confederation of States under
the Articles of Confederation), has imposed upon every State,
as a fundamental condition of the State's admission, that the
State provide for the establishment and maintenance of systems
of public schools open to all children in such State.
(5) Over the years since the landmark ruling in Brown v.
Board of Education, 347 U.S. 483, 493 (1954), when a unanimous
Supreme Court held that ``the opportunity of an education...,
where the State has undertaken to provide it, is a right which
must be made available to all on equal terms'', courts in 44
States have heard challenges to the establishment, maintenance,
and operation of State public school systems that are separate
and not educationally adequate.
(6) In 1970, the Presidential Commission on School Finance
found that significant disparities in the distribution of
educational resources existed among school districts within
States because the States relied too significantly on local
district financing for educational revenues, and that reforms
in systems of school financing would increase the Nation's
ability to serve the educational needs of all children.
(7) In 1999, the National Research Council of the National
Academy of Sciences published a report entitled ``Making Money
Matter, Financing America's Schools'', which found that the
concept of funding adequacy, which moves beyond the more
traditional concepts of finance equity to focus attention on
the sufficiency of funding for desired educational outcomes, is an
important step in developing a fair and productive educational system.
(8) In 2001, the Executive Order establishing the
President's Commission on Educational Resource Equity declared,
``A quality education is essential to the success of every
child in the 21st century and to the continued strength and
prosperity of our Nation. . . . [L]ong-standing gaps in access
to educational resources exist, including disparities based on
race and ethnicity.'' (Exec. Order No. 13190, 66 Fed. Reg. 5424
(2001)).
(9) According to the Secretary of Education, as stated in a
letter (with enclosures) from the Secretary to States dated
January 19, 2001--
(A) racial and ethnic minorities continue to suffer
from lack of access to educational resources, including
``experienced and qualified teachers, adequate
facilities, and instructional programs and support,
including technology, as well as...the funding
necessary to secure these resources''; and
(B) these inadequacies are ``particularly acute in
high-poverty schools, including urban schools, where
many students of color are isolated and where the
effect of the resource gaps may be cumulative. In other
words, students who need the most may often receive the
least, and these students often are students of
color.''.
(10) In the amendments made by the No Child Left Behind Act
of 2001, Congress--
(A)(i) required each State to establish standards
and assessments in mathematics, reading or language
arts, and science; and
(ii) required schools to ensure that all students
are proficient in mathematics, reading or language
arts, and science not later than 12 years after the end
of the 2001-2002 school year, and held schools
accountable for the students' progress; and
(B) required each State to describe how the State
will help local educational agencies and schools to
develop the capacity to improve student academic
achievement.
(11) The standards and accountability movement will succeed
only if, in addition to standards and accountability, all
schools have access to the educational resources necessary to
enable students to achieve.
(12) Raising standards without ensuring access to
educational resources may in fact exacerbate achievement gaps
and set children up for failure.
(13) According to the World Economic Forum's Global
Competitiveness Report 2001-2002, the United States ranks last
among developed countries in the difference in the quality of
schools available to rich and poor children.
(14) The persistence of pervasive inadequacies in the
quality of education provided by State public school systems
effectively deprives millions of children throughout the United
States of the opportunity for an education adequate to enable
the children to--
(A) acquire the knowledge and skills necessary for
responsible citizenship in a diverse democracy,
including the ability to participate fully in the
political process through informed electoral choice;
(B) meet challenging student academic achievement
standards; and
(C) be able to compete and succeed in a global
economy.
(15) Each State government has ultimate authority to
determine every important aspect and priority of the public
school system that provides elementary and secondary education
to children in the State, including whether students throughout
the State have access to the fundamentals of educational
opportunity described in section 136.
(16) Because a well-educated populace is critical to the
Nation's political and economic well-being and national
security, the Federal Government has a substantial interest in
ensuring that States provide a high-quality education by
ensuring that all students have access to the fundamentals of
educational opportunity described in section 136 to enable the
students to succeed academically and in life.
(b) Purposes.--The purposes of this subtitle are the following:
(1) To further the goals of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6301 et seq.) (as amended by
the No Child Left Behind Act of 2001), by holding States
accountable for providing all students with access to the
fundamentals of educational opportunity described in section
136.
(2) To ensure that all students in public elementary
schools and secondary schools receive educational opportunities
that enable such students to--
(A) acquire the knowledge and skills necessary for
responsible citizenship in a diverse democracy,
including the ability to participate fully in the
political process through informed electoral choice;
(B) meet challenging student academic achievement
standards; and
(C) be able to compete and succeed in a global
economy.
(3) To end the pervasive pattern of States maintaining
public school systems that do not meet the requirements of
section 135(a).

CHAPTER 1--EDUCATIONAL OPPORTUNITY IN STATE PUBLIC SCHOOL SYSTEMS

Subchapter A--Access to Educational Opportunity

SEC. 135. STATE PUBLIC SCHOOL SYSTEMS.

(a) Requirements.--Each State receiving Federal financial
assistance for elementary or secondary education shall ensure that the
State's public school system provides all students within the State
with an education that enables the students to acquire the knowledge
and skills necessary for responsible citizenship in a diverse
democracy, including the ability to participate fully in the
political process through informed electoral choice, to meet
challenging student academic achievement standards, and to be able to
compete and succeed in a global economy, through--
(1) the provision of fundamentals of educational
opportunity described in section 136, at adequate or ideal
levels as defined by the State under section 141(a)(1)(A) to
students at each public elementary school and secondary school
in the State;
(2) the provision of educational services in school
districts that receive funds under part A of title I of the
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311
et seq.) that are, taken as a whole, at least comparable to
educational services provided in school districts not receiving
such funds; and
(3) compliance with any final Federal or State court order
in any matter concerning the adequacy or equitableness of the
State's public school system.
(b) Determinations Concerning State Public School Systems.--Not
later than October 1 of each year, the Secretary shall determine
whether each State maintains a public school system that meets the
requirements of subsection (a). The Secretary may make a determination
that a State public school system does not meet such requirements only
after providing notice and an opportunity for a hearing.
(c) Publication.--The Secretary shall publish and make available to
the general public (including by means of the Internet) the
determinations made under subsection (b).

SEC. 136. FUNDAMENTALS OF EDUCATIONAL OPPORTUNITY.

The fundamentals of educational opportunity are the following:
(1) Highly qualified teachers, principals, and academic
support personnel.--
(A) Highly qualified teachers.--Instruction from
highly qualified teachers in core academic subjects.
(B) Highly qualified principals.--Leadership,
management, and guidance from principals who meet State
certification standards.
(C) Highly qualified academic support personnel.--
Necessary additional academic support in reading or
language arts, mathematics, and other core academic
subjects from personnel who meet applicable State
standards.
(2) Rigorous academic standards, curricula, and methods of
instruction.--Rigorous academic standards, curricula, and
methods of instruction, as measured by the extent to which each
school district succeeds in providing high-quality academic
standards, curricula, and methods of instruction to students in
each public elementary school and secondary school within the
district.
(3) Small class sizes.--Small class sizes, as measured by--
(A) the average class size and the range of class
sizes; and
(B) the percentage of classes with 17 or fewer
students.
(4) Textbooks, instructional materials, and supplies.--
Textbooks, instructional materials, and supplies, as measured
by--
(A) the average age and quality of textbooks,
instructional materials, and supplies used in core
academic subjects; and
(B) the percentage of students who begin the school
year with school-issued textbooks, instructional
materials, and supplies.
(5) Library resources.--Library resources, as measured by--
(A) the size and qualifications of the library's
staff, including whether the library is staffed by a
full-time librarian certified under applicable State
standards;
(B) the size (relative to the number of students)
and quality (including age) of the library's collection
of books and periodicals; and
(C) the library's hours of operation.
(6) School facilities and computer technology.--
(A) Quality school facilities.--Quality school
facilities, as measured by--
(i) the physical condition of school
buildings and major school building features;
(ii) environmental conditions in school
buildings; and
(iii) the quality of instructional space.
(B) Computer technology.--Computer technology, as
measured by--
(i) the ratio of computers to students;
(ii) the quality of computers and software
available to students;
(iii) Internet access;
(iv) the quality of system maintenance and
technical assistance for the computers; and
(v) the number of computer laboratory
courses taught by qualified computer
instructors.
(7) Quality guidance counseling.--Qualified guidance
counselors, as measured by the ratio of students to qualified
guidance counselors who have been certified under an applicable
State or national program.

Subchapter B--State Accountability

SEC. 141. STATE ACCOUNTABILITY PLAN.

(a) General Plan.--
(1) Contents.--Each State receiving Federal financial
assistance for elementary and secondary education shall
annually submit to the Secretary a plan, developed by the State
educational agency, in consultation with local educational
agencies, teachers, principals, pupil services personnel,
administrators, other staff, and parents, that contains the
following:
(A) A description of 2 levels of high access
(adequate and ideal) to each of the fundamentals of
educational opportunity described in section 136 that
measure how well the State, through school districts,
public elementary schools, and public secondary
schools, is achieving the purposes of this subtitle by
providing children with the resources they need to
succeed academically and in life.
(B) A description of a third level of access
(basic) to each of the fundamentals of educational
opportunity described in section 136 that measures how
well the State, through school districts, public
elementary schools, and public secondary schools, is
achieving the purposes of this subtitle by providing
children with the resources they need to succeed
academically and in life.
(C) A description of the level of access of each
school district, public elementary school, and public
secondary school in the State to each of the
fundamentals of educational opportunity described in
section 136, including identification of any such
schools that lack high access (as described in
subparagraph (A)) to any of the fundamentals.
(D) An estimate of the additional cost, if any, of
ensuring that the system meets the requirements of
section 135(a).
(E) Information stating the percentage of students
in each school district, public elementary school, and
public secondary school in the State that are
proficient in mathematics, reading or language arts,
and science, as measured through assessments
administered as described in section 1111(b)(3)(C)(v)
of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6311(b)(3)(C)(v)).
(F) Information stating whether each school
district, public elementary school, and public
secondary school in the State is making adequate yearly
progress, as defined under section 1111(b)(2) of the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 6311(b)(2)).
(G)(i) For each school district, public elementary
school, and public secondary school in the State,
information stating--
(I) the number and percentage of children
counted under section 1124(c) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C.
6333(c)); and
(II) the number and percentage of students
described in section 1111(b)(3)(C)(xiii) of the
Elementary and Secondary Education Act of 1965
(20 U.S.C. 6311(b)(3)(C)(xiii)).
(ii) For each such school district, information
stating whether the district is an urban, mixed, or
rural district (as defined by the National Center for
Education Statistics).
(2) Levels of access.--For purposes of the plan submitted
under paragraph (1)--
(A) in defining basic, adequate, and ideal levels
of access to each of the fundamentals of educational
opportunity, each State shall consider, in addition to
the factors described in section 136, the access
available to students in the highest achieving decile
of public elementary schools and secondary schools, the
unique needs of low-income, urban and rural, and
minority students, and other educationally appropriate
factors; and
(B) the levels of access described in subparagraphs
(A) and (B) of paragraph (1) shall be aligned with the
challenging academic content standards, challenging
student academic achievement standards, and high-
quality academic assessments required under the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 6301 et seq.).
(3) Information.--The State shall annually disseminate to
parents, in an understandable and uniform format, the
descriptions, estimate, and information described in paragraph
(1).
(b) Accountability and Remediation.--
(1) Accountability.--If the Secretary determines under
section 135(b) that a State maintains a public school system
that fails to meet the requirements of section 135(a)(1), the
plan submitted under subsection (a)(1) shall--
(A) demonstrate that the State has developed and is
implementing a single, statewide State accountability
system that will be effective in ensuring that the
State makes adequate yearly progress under this
subtitle (as defined by the State in a manner that annually reduces the
number of public elementary schools and secondary schools in the State
without high access (as described in subsection (a)(1)(A)) to each of
the fundamentals of educational opportunity described in section 136);
(B) demonstrate, based on the levels of access
described in paragraph (1) what constitutes adequate
yearly progress of the State under this subtitle toward
providing all students with high access to the
fundamentals of educational opportunity described in
section 136; and
(C) ensure--
(i) the establishment of a timeline for
that adequate yearly progress that includes
interim yearly goals for the reduction of the
number of public elementary schools and
secondary schools in the State without high
access to each of the fundamentals of
educational opportunity described in section
136; and
(ii) that not later than 12 years after the
end of the 2001-2002 school year, each public
elementary or secondary school in the State
shall have high access to each of the
fundamentals of educational opportunity
described in section 136.
(2) Remediation.--If the Secretary determines under section
135(b) that a State maintains a public school system that fails
to meet the requirements of section 135(a)(2), not later than 1
year after the Secretary makes the determination, the State
shall include in the plan submitted under subsection (a)(1) a
strategy to remediate the conditions that caused the Secretary
to make such determination, not later than the end of the
second school year beginning after submission of the plan.
(c) Amendments.--A State may amend the plan submitted under
subsection (a)(1) to improve the plan or to take into account
significantly changed circumstances.
(d) Disapproval.--The Secretary may disapprove the plan submitted
under subsection (a)(1) (or an amendment to such a plan) if the
Secretary determines, after notice and opportunity for hearing, that
the plan (or amendment) is inadequate to meet the requirements
described in subsections (a) and (b).
(e) Waiver.--
(1) In general.--A State may request, and the Secretary may
grant, a waiver of the requirements of subsections (a) and (b)
for 1 year for exceptional circumstances, such as a precipitous
decrease in State revenues, or another circumstance that the
Secretary determines to be exceptional, that prevents a State
from complying with the requirements of subsections (a) and
(b).
(2) Contents of waiver request.--A State that requests a
waiver under paragraph (1) shall include in the request--
(A) a description of the exceptional circumstance
that prevents the State from complying with the
requirements of subsections (a) and (b); and
(B) a plan that details the manner in which the
State will comply with such requirements by the end of
the waiver period.

SEC. 142. CONSEQUENCES OF FAILURE TO MEET REQUIREMENTS.

(a) Interim Yearly Goals.--
(1) In general.--For a fiscal year and a State described in
section 141(b)(1), the Secretary shall withhold from the State
2.75 percent of funds otherwise available to the State for the
administration of Federal elementary and secondary education
programs, for each covered goal that the Secretary determines
the State is not meeting during that year.
(2) Definition.--In this subsection, the term ``covered
goal'', used with respect to a fiscal year, means an interim
yearly goal described in section 141(b)(1)(C)(i) that is
applicable to that year or a prior fiscal year.
(b) Consequences of Nonremediation.--Notwithstanding any other
provision of law, if the Secretary determines that a State required to
include a strategy under section 141(b)(2) continues to maintain a
public school system that does not meet the requirements of section
135(a)(2) at the end of the second school year described in section
141(b)(2), the Secretary shall withhold from the State not more than
33\1/3\ percent of funds otherwise available to the State for the
administration of Federal elementary and secondary education programs
until the Secretary determines that the State maintains a public school
system that meets the requirements of section 135(a)(2).
(c) Consequences of Noncompliance With Court Orders.--If the
Secretary determines under section 135(b) that a State maintains a
public school system that fails to meet the requirements of section
135(a)(3), the Secretary shall withhold from the State not more than
33\1/3\ percent of funds otherwise available to the State for the
administration of Federal elementary and secondary education programs.
(d) Disposition of Funds Withheld.--
(1) Determination.--Not later than 1 year after the
Secretary withholds funds from a State under this section, the
Secretary shall determine whether the State has corrected the
condition that led to the withholding.
(2) Disposition.--
(A) Correction.--If the Secretary determines under
paragraph (1), that the State has corrected the
condition that led to the withholding, the Secretary
shall make the withheld funds available to the State to
use for the original purpose of the funds during 1 or
more fiscal years specified by the Secretary.
(B) Noncorrection.--If the Secretary determines
under paragraph (1), that the State has not corrected
the condition that led to the withholding, the
Secretary shall allocate the withheld funds to public
school districts, public elementary schools, or public
secondary schools in the State that are most adversely
affected by the condition that led to the withholding, to enable the
districts or schools to correct the condition during 1 or more fiscal
years specified by the Secretary.
(3) Availability.--Amounts made available or allocated
under subparagraph (A) or (B) of paragraph (2) shall remain
available during the fiscal years specified by the Secretary
under that subparagraph.

Subchapter C--Report to Congress and the Public

SEC. 151. ANNUAL REPORT ON STATE PUBLIC SCHOOL SYSTEMS.

(a) Annual Report to Congress.--Not later than October 1 of each
year, beginning the year after completion of the first full school year
after the date of enactment of this subtitle, the Secretary shall
submit to Congress a report that includes a full and complete analysis
of the public school system of each State.
(b) Contents of Report.--The analysis conducted under subsection
(a) shall include the following:
(1) Public school system information.--The following
information related to the public school system of each State:
(A) The number of school districts, public
elementary schools, public secondary schools, and
students in the system.
(B)(i) For each such school district and school--
(I) information stating the number and
percentage of children counted under section
1124(c) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6333(c)); and
(II) the number and percentage of students,
disaggregated by groups described in section
1111(b)(3)(C)(xiii) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C.
6311(b)(3)(C)(xiii)).
(ii) For each such district, information stating
whether the district is an urban, mixed, or rural
district (as defined by the National Center for
Education Statistics).
(C) The average per-pupil expenditure (both in
actual dollars and adjusted for cost and need) for the
State and for each school district in the State.
(D) Each school district's decile ranking as
measured by achievement in mathematics, reading or
language arts, and science on State academic
assessments required under section 1111(b)(3) of the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 6311(b)(3)) and on the National Assessment of
Educational Progress.
(E) For each school district, public elementary
school, and public secondary school--
(i) the level of access (as described in
section 141(a)(1)) to each of the fundamentals
of educational opportunity described in section
136;
(ii) the percentage of students that are
proficient in mathematics, reading or language
arts, and science, as measured through
assessments administered as described in
section 1111(b)(3)(C)(v) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C.
6311(b)(3)(C)(v)); and
(iii) whether the school district or school
is making adequate yearly progress--
(I) as defined under section
1111(b)(2) of the Elementary and
Secondary Education Act of 1965 (20
U.S.C. 6311(b)(2)); and
(II) as defined by the State under
section 141(b)(1)(A).
(F) For each State, the number of public elementary
schools and secondary schools that lack, and names of
each such school that lacks, high access (as described
in section 141(a)(1)(A)) to any of the fundamentals of
educational opportunity described in section 136.
(G) For the year covered by the report, a summary
of any changes in the data required in subparagraphs
(A) through (F) for each of the preceding 3 years
(which may be based on such data as are available, for
the first 3 reports submitted under subsection (a)).
(H) Such other information as the Secretary
considers useful and appropriate.
(2) State actions.--For each State that the Secretary
determines under section 135(b) maintains a public school
system that fails to meet the requirements of section 135(a), a
detailed description and evaluation of the success of any
actions taken by the State, and measures proposed to be taken
by the State, to meet the requirements.
(3) State plans.--A copy of each State's most recent plan
submitted under section 141(a)(1).
(4) Relationship between compliance and achievement.--An
analysis of the relationship between meeting the requirements
of section 135(a) and improving student academic achievement,
as measured on State academic assessments required under
section 1111(b)(3) of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 6311(b)(3)).
(c) Scope of Report.--The report required under subsection (a)
shall cover the school year ending in the calendar year in which the
report is required to be submitted.
(d) Submission of Data to Secretary.--Each State receiving Federal
financial assistance for elementary and secondary education shall
submit to the Secretary, at such time and in such manner as the
Secretary may reasonably require, such data as the Secretary determines
to be necessary to make a determination under section 135(b) and to
submit the report under this section. Such data shall include the
information used to measure the State's success in providing the
fundamentals of educational opportunity described in section 136.
(e) Failure To Submit Data.--If a State fails to submit the data
that the Secretary determines to be necessary to make a determination
under section 135(b) regarding whether the State maintains a public
school system that meets the requirements of section 135(a)--
(1) such State's public school system shall be deemed not
to have met the applicable requirements until the State submits
such data and the Secretary is able to make such determination
under section 135(b); and
(2) the Secretary shall provide, to the extent practicable,
the analysis required in subsection (a) for the State based on
the best data available to the Secretary.
(f) Publication.--The Secretary shall publish and make available to
the general public (including by means of the Internet) the report
required under subsection (a).

Subchapter D--Remedy

SEC. 161. CIVIL ACTION FOR ENFORCEMENT.

A student or parent of a student aggrieved by a violation of this
subtitle may bring a civil action against the appropriate official in
an appropriate Federal district court seeking declaratory or injunctive
relief to enforce the requirements of this subtitle, together with
reasonable attorney's fees and the costs of the action.

CHAPTER 2--EFFECTS OF EDUCATIONAL DISPARITIES ON ECONOMIC GROWTH AND
NATIONAL DEFENSE

SEC. 171. EFFECTS ON ECONOMIC GROWTH AND PRODUCTIVITY.

(a) Study.--The Commissioner for Education Statistics, in
consultation with the Secretary of Commerce, Secretary of Labor,
Secretary of the Treasury, and the National Research Council of the
National Academy of Sciences, shall conduct a comprehensive study
concerning the effects on economic growth and productivity of ensuring
that each State public school system meets the requirements of section
135(a). Such study shall include assessments of--
(1) the economic costs to the Nation resulting from the
maintenance by States of public school systems that do not meet
the requirements of section 135(a);
(2) the economic gains to be expected from States'
compliance with the requirements of section 135(a); and
(3) the costs, if any, of ensuring that each State
maintains a public school system that meets the requirements of
section 135(a).
(b) Report to Congress.--Not later than 1 year after the date of
enactment of this subtitle, the Commissioner for Education Statistics
shall submit to Congress a final report detailing the results of the
study required under subsection (a).

SEC. 172. EFFECTS ON NATIONAL DEFENSE.

(a) Study.--The Commissioner for Education Statistics, in
consultation with the Secretary of Defense, shall conduct a
comprehensive study concerning the effects on national defense of
ensuring that each State public school system meets the requirements of
section 135(a). Such study shall include assessments of--
(1) the detriments to national defense resulting from the
maintenance by States of public school systems that do not meet
the requirements of section 135(a), including the effects on--
(A) knowledge and skills necessary for the
effective functioning of the Armed Forces;
(B) the costs to the Armed Forces of training; and
(C) efficiency resulting from the use of
sophisticated equipment and information technology; and
(2) the gains to national defense to be expected from
ensuring that each State public school system meets the
requirements of section 135(a).
(b) Report to Congress.--Not later than 1 year after the date of
enactment of this subtitle, the Commissioner for Education Statistics
shall submit to Congress a final report detailing the results of the
study required under subsection (a).

CHAPTER 3--GENERAL PROVISIONS

SEC. 181. DEFINITIONS.

In this subtitle:
(1) Referenced terms.--The terms ``elementary school'',
``secondary school'', ``local educational agency'', ``highly
qualified'', ``core academic subjects'', ``parent'', and
``average per-pupil expenditure'' have the meanings given those
terms in section 9101 of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 7801).
(2) Federal elementary and secondary education programs.--
The term ``Federal elementary and secondary education
programs'' means programs providing Federal financial
assistance for elementary or secondary education, other than
programs under the following provisions of law:
(A) The Individuals with Disabilities Education Act
(20 U.S.C. 1400 et seq.).
(B) Title III of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6801 et seq.).
(C) The Richard B. Russell National School Lunch
Act (42 U.S.C. 1751 et seq.).
(D) The Child Nutrition Act of 1966 (42 U.S.C. 1771
et seq.).
(3) Public school system.--The term ``public school
system'' means a State's system of public elementary and
secondary education.
(4) State.--The term ``State'' means each of the several
States, the District of Columbia, and the Commonwealth of
Puerto Rico.

SEC. 182. RULEMAKING.

The Secretary may prescribe regulations to carry out this subtitle.

SEC. 183. CONSTRUCTION.

Nothing in this subtitle shall be construed to require a
jurisdiction to increase its property tax or other tax rates or to
redistribute revenues from such taxes.

TITLE II--MODERNIZING SCHOOL FACILITIES

SEC. 201. SHORT TITLE.

This title may be cited as the ``America's Better Classrooms Act of
2003''.

SEC. 202. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

(a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subchapter:

``Subchapter Z--Public School Modernization Provisions

``Sec. 1400M. Credit to holders of
qualified public school
modernization bonds.
``Sec. 1400N. Qualified school
construction bonds.
``Sec. 1400O. Qualified zone academy
bonds.

``SEC. 1400M. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL
MODERNIZATION BONDS.

``(a) Allowance of Credit.--In the case of a taxpayer who holds a
qualified public school modernization bond on a credit allowance date
of such bond which occurs during the taxable year, there shall be
allowed as a credit against the tax imposed by this chapter for such
taxable year an amount equal to the sum of the credits determined under
subsection (b) with respect to credit allowance dates during such year
on which the taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a qualified public school modernization bond is 25 percent
of the annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified public school modernization bond is
the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate with respect to an issue is the
rate equal to an average market yield (as of the day before the
date of issuance of the issue) on outstanding long-term
corporate debt obligations (determined under regulations
prescribed by the Secretary).
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under part
IV of subchapter A (other than subpart C thereof,
relating to refundable credits).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.
``(d) Qualified Public School Modernization Bond; Credit Allowance
Date.--For purposes of this section--
``(1) Qualified public school modernization bond.--The term
`qualified public school modernization bond' means--
``(A) a qualified zone academy bond, or
``(B) a qualified school construction bond.
``(2) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(e) Other Definitions.--For purposes of this subchapter--
``(1) Local educational agency.--The term `local
educational agency' has the meaning given to such term by
section 14101 of the Elementary and Secondary Education Act of
1965. Such term includes the local educational agency that
serves the District of Columbia but does not include any other
State agency.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of
Columbia and any possession of the United States.
``(4) Public school facility.--The term `public school
facility' shall not include--
``(A) any stadium or other facility primarily used
for athletic contests or exhibitions or other events
for which admission is charged to the general public,
or
``(B) any facility which is not owned by a State or
local government or any agency or instrumentality of a
State or local government.
``(f) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(g) Bonds Held by Regulated Investment Companies.--If any
qualified public school modernization bond is held by a regulated
investment company, the credit determined under subsection (a) shall be
allowed to shareholders of such company under procedures prescribed by
the Secretary.
``(h) Credits May Be Stripped.--Under regulations prescribed by the
Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified public school
modernization bond and the entitlement to the credit under this
section with respect to such bond. In case of any such
separation, the credit under this section shall be allowed to
the person who on the credit allowance date holds the
instrument evidencing the entitlement to the credit and not to
the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified public school modernization bond as if
it were a stripped bond and to the credit under this section as
if it were a stripped coupon.
``(i) Treatment for Estimated Tax Purposes.--Solely for purposes of
sections 6654 and 6655, the credit allowed by this section to a
taxpayer by reason of holding a qualified public school modernization
bond on a credit allowance date shall be treated as if it were a
payment of estimated tax made by the taxpayer on such date.
``(j) Credit May Be Transferred.--Nothing in any law or rule of law
shall be construed to limit the transferability of the credit allowed
by this section through sale and repurchase agreements.
``(k) Reporting.--Issuers of qualified public school modernization
bonds shall submit reports similar to the reports required under
section 149(e).
``(l) Termination.--This section shall not apply to any bond issued
after September 30, 2008.

``SEC. 1400N. QUALIFIED SCHOOL CONSTRUCTION BONDS.

``(a) Qualified School Construction Bond.--For purposes of this
subchapter, the term `qualified school construction bond' means any
bond issued as part of an issue if--
``(1) 95 percent or more of the proceeds of such issue are
to be used for the construction, rehabilitation, or repair of a
public school facility or for the acquisition of land on which
such a facility is to be constructed with part of the proceeds
of such issue,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such school is located,
``(3) the issuer designates such bond for purposes of this
section, and
``(4) the term of each bond which is part of such issue
does not exceed 15 years.
``(b) Limitation on Amount of Bonds Designated.--The maximum
aggregate face amount of bonds issued during any calendar year which
may be designated under subsection (a) by any issuer shall not exceed
the sum of--
``(1) the limitation amount allocated under subsection (d)
for such calendar year to such issuer, and
``(2) if such issuer is a large local educational agency
(as defined in subsection (e)(4)) or is issuing on behalf of
such an agency, the limitation amount allocated under
subsection (e) for such calendar year to such agency.
``(c) National Limitation on Amount of Bonds Designated.--There is
a national qualified school construction bond limitation for each
calendar year. Such limitation is--
``(1) $11,000,000,000 for 2004,
``(2) $11,000,000,000 for 2005, and
``(3) except as provided in subsection (f), zero after
2005.
``(d) 60 Percent of Limitation Allocated Among States.--
``(1) In general.--60 percent of the limitation applicable
under subsection (c) for any calendar year shall be allocated
by the Secretary among the States in proportion to the
respective numbers of children in each State who have attained
age 5 but not age 18 for the most recent fiscal year ending
before such calendar year. The limitation amount allocated to a
State under the preceding sentence shall be allocated by the
State to issuers within such State.
``(2) Minimum allocations to states.--
``(A) In general.--The Secretary shall adjust the
allocations under this subsection for any calendar year
for each State to the extent necessary to ensure that
the sum of--
``(i) the amount allocated to such State
under this subsection for such year, and
``(ii) the aggregate amounts allocated
under subsection (e) to large local educational
agencies in such State for such year,
is not less than an amount equal to such State's
minimum percentage of the amount to be allocated under
paragraph (1) for the calendar year.
``(B) Minimum percentage.--A State's minimum
percentage for any calendar year is the minimum
percentage described in section 1124(d) of the
Elementary and Secondary Education Act of 1965 (20
U.S.C. 6334(d)) for such State for the most recent
fiscal year ending before such calendar year.
``(3) Allocations to certain possessions.--The amount to be
allocated under paragraph (1) to any possession of the United
States  other than Puerto Rico shall be the amount which would
have been allocated if all allocations under paragraph (1) were made on
the basis of respective populations of individuals below the poverty
line (as defined by the Office of Management and Budget). In making
other allocations, the amount to be allocated under paragraph (1) shall
be reduced by the aggregate amount allocated under this paragraph to
possessions of the United States.
``(4) Allocations for indian schools.--The provisions of
section 1400P shall apply with respect to the construction,
rehabilitation, and repair of schools funded by the Bureau of
Indian Affairs. No funds may be allocated under this section
for such schools.
``(e) 40 Percent of Limitation Allocated Among Largest School
Districts.--
``(1) In general.--40 percent of the limitation applicable
under subsection (c) for any calendar year shall be allocated
under paragraph (2) by the Secretary among local educational
agencies which are large local educational agencies for such
year.
``(2) Allocation formula.--The amount to be allocated under
paragraph (1) for any calendar year shall be allocated among
large local educational agencies in proportion to the
respective amounts each such agency received for Basic Grants
under subpart 2 of part A of title I of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for
the most recent fiscal year ending before such calendar year.
``(3) Allocation of unused limitation to state.--The amount
allocated under this subsection to a large local educational
agency for any calendar year may be reallocated by such agency
to the State in which such agency is located for such calendar
year. Any amount reallocated to a State under the preceding
sentence may be allocated as provided in subsection (d)(1).
``(4) Large local educational agency.--For purposes of this
section, the term `large local educational agency' means, with
respect to a calendar year, any local educational agency if
such agency is--
``(A) among the 100 local educational agencies with
the largest numbers of children aged 5 through 17 from
families living below the poverty level, as determined
by the Secretary using the most recent data available
from the Department of Commerce that are satisfactory
to the Secretary, or
``(B) 1 of not more than 25 local educational
agencies (other than those described in subparagraph
(A)) that the Secretary of Education determines (based
on the most recent data available satisfactory to the
Secretary) are in particular need of assistance, based
on a low level of resources for school construction, a
high level of enrollment growth, or such other factors
as the Secretary deems appropriate.
``(f) Carryover of Unused Limitation.--If for any calendar year--
``(1) the amount allocated under subsection (d) to any
State, exceeds
``(2) the amount of bonds issued during such year which are
designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State for the
following calendar year shall be increased by the amount of such
excess. A similar rule shall apply to the amounts allocated under
subsection (e).
``(g) Special Rules Relating to Arbitrage.--
``(1) In general.--A bond shall not be treated as failing
to meet the requirement of subsection (a)(1) solely by reason
of the fact that the proceeds of the issue of which such bond
is a part are invested for a temporary period (but not more
than 36 months) until such proceeds are needed for the purpose
for which such issue was issued.
``(2) Binding commitment requirement.--Paragraph (1) shall
apply to an issue only if, as of the date of issuance, there is
a reasonable expectation that--
``(A) at least 10 percent of the proceeds of the
issue will be spent within the 6-month period beginning
on such date for the purpose for which such issue was
issued, and
``(B) the remaining proceeds of the issue will be
spent with due diligence for such purpose.
``(3) Earnings on proceeds.--Any earnings on proceeds
during the temporary period shall be treated as proceeds of the
issue for purposes of applying subsection (a)(1) and paragraph
(1) of this subsection.

``SEC. 1400O. QUALIFIED ZONE ACADEMY BONDS.

``(a) Qualified Zone Academy Bond.--For purposes of this
subchapter--
``(1) In general.--The term `qualified zone academy bond'
means any bond issued as part of an issue if--
``(A) 95 percent or more of the proceeds of such
issue are to be used for a qualified purpose with
respect to a qualified zone academy established by a
local educational agency,
``(B) the bond is issued by a State or local
government within the jurisdiction of which such
academy is located,
``(C) the issuer--
``(i) designates such bond for purposes of
this section,
``(ii) certifies that it has written
assurances that the private business
contribution requirement of paragraph (2) will
be met with respect to such academy, and
``(iii) certifies that it has the written
approval of the local educational agency for
such bond issuance, and
``(D) the term of each bond which is part of such
issue does not exceed 15 years.
Rules similar to the rules of section 1400N(g) shall apply for
purposes of paragraph (1).
``(2) Private business contribution requirement.--
``(A) In general.--For purposes of paragraph (1),
the private business contribution requirement of this
paragraph is met with respect to any issue if the local
educational agency that established the qualified zone
academy has written commitments from private entities
to make qualified contributions having a present value
(as of the date of issuance of the issue) of not less
than 10 percent of the proceeds of the issue.
``(B) Qualified contributions.--For purposes of
subparagraph (A), the term `qualified contribution'
means any contribution (of a type and quality
acceptable to the local educational agency) of--
``(i) equipment for use in the qualified
zone academy (including state-of-the-art
technology and vocational equipment),
``(ii) technical assistance in developing
curriculum or in training teachers in order to
promote appropriate market driven technology in
the classroom,
``(iii) services of employees as volunteer
mentors,
``(iv) internships, field trips, or other
educational opportunities outside the academy
for students, or
``(v) any other property or service
specified by the local educational agency.
``(3) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within a
public school) which is established by and operated under the
supervision of a local educational agency to provide education
or training below the postsecondary level if--
``(A) such public school or program (as the case
may be) is designed in cooperation with business to
enhance the academic curriculum, increase graduation
and employment rates, and better prepare students for
the rigors of college and the increasingly complex
workforce,
``(B) students in such public school or program (as
the case may be) will be subject to the same academic
standards and assessments as other students educated by
the local educational agency,
``(C) the comprehensive education plan of such
public school or program is approved by the local
educational agency, and
``(D)(i) such public school is located in an
empowerment zone or enterprise community (including any
such zone or community designated after the date of the
enactment of this section), or
``(ii) there is a reasonable expectation (as of the
date of issuance of the bonds) that at least 35 percent
of the students attending such school or participating
in such program (as the case may be) will be eligible
for free or reduced-cost lunches under the school lunch
program established under the Richard B. Russell
National School Lunch Act.
``(4) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) constructing, rehabilitating, or repairing
the public school facility in which the academy is
established,
``(B) acquiring the land on which such facility is
to be constructed with part of the proceeds of such
issue,
``(C) providing equipment for use at such academy,
``(D) developing course materials for education to
be provided at such academy, and
``(E) training teachers and other school personnel
in such academy.
``(b) Limitations on Amount of Bonds Designated.--
``(1) In general.--There is a national zone academy bond
limitation for each calendar year. Such limitation is--
``(A) $400,000,000 for 2003,
``(B) $400,000,000 for 2004,
``(C) $400,000,000 for 2005,
``(D) $400,000,000 for 2006,
``(E) $1,400,000,000 for 2007,
``(F) $1,400,000,000 for 2008, and
``(G) except as provided in paragraph (3), zero
after 2008.
``(2) Allocation of limitation.--
``(A) Allocation among states.--
``(i) 2003, 2004, 2005, and 2006
limitations.--The national zone academy bond
limitations for calendar years 2003, 2004,
2005, and 2006 shall be allocated by the
Secretary among the States on the basis of
their respective populations of individuals
below the poverty line (as defined by the
Office of Management and Budget).
``(ii) Limitation after 2006.--The national
zone academy bond limitation for any calendar
year after 2006 shall be allocated by the
Secretary among the States in proportion to the
respective amounts each such State received for
Basic Grants under subpart 2 of part A of title
I of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6331 et seq.) for the most
recent fiscal year ending before such calendar
year.
``(B) Allocation to local educational agencies.--
The limitation amount allocated to a State under
subparagraph (A) shall be allocated by the State to
qualified zone academies within such State.
``(C) Designation subject to limitation amount.--
The maximum aggregate face amount of bonds issued
during any calendar year which may be designated under
subsection (a) with respect to any qualified zone
academy shall not exceed the limitation amount
allocated to such academy under subparagraph (B) for
such calendar year.
``(3) Carryover of unused limitation.--If for any calendar
year--
``(A) the limitation amount under this subsection
for any State, exceeds
``(B) the amount of bonds issued during such year
which are designated under subsection (a) (or the
corresponding provisions of prior law) with respect to
qualified zone academies within such State,
the limitation amount under this subsection for such State for
the following calendar year shall be increased by the amount of
such excess.''.
(b) Reporting.--Subsection (d) of section 6049 of the Internal
Revenue Code of 1986 (relating to returns regarding payments of
interest) is amended by adding at the end the following new paragraph:
``(8) Reporting of credit on qualified public school
modernization bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 1400M(f) and such amounts
shall be treated as paid on the credit allowance date
(as defined in section 1400M(d)(2)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A) of this
paragraph, subsection (b)(4) of this section shall be
applied without regard to subparagraphs (A), (H), (I),
(J), (K), and (L)(i).
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(c) Conforming Amendments.--
(1) Subchapter U of chapter 1 of the Internal Revenue Code
of 1986 is amended by striking part IV, by redesignating part V
as part IV, and by redesignating section 1397F as section
1397E.
(2) The table of subchapters for chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new item:

``Subchapter Z. Public school
modernization provisions.''
(3) The table of parts of subchapter U of chapter 1 of the
Internal Revenue Code of 1986 is amended by striking the last 2
items and inserting the following item:

``Part IV. Regulations.''
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
obligations issued after December 31, 2002.
(2) Repeal of restriction on zone academy bond holders.--In
the case of bonds to which section 1397E of the Internal
Revenue Code of 1986 (as in effect before the date of the
enactment of this Act) applies, the limitation of such section
to eligible taxpayers (as defined in subsection (d)(6) of such
section) shall not apply after the date of the enactment of
this Act.

SEC. 203. APPLICATION OF CERTAIN LABOR STANDARDS ON CONSTRUCTION
PROJECTS FINANCED UNDER PUBLIC SCHOOL MODERNIZATION
PROGRAM.

Section 439 of the General Education Provisions Act (relating to
labor standards) (20 U.S.C. 1232b) is amended--
(1) by inserting ``(a)'' before ``All laborers and
mechanics''; and
(2) by adding at the end the following:
``(b)(1) For purposes of this section, the term `applicable
program' also includes the qualified zone academy bond provisions
enacted by section 226 of the Taxpayer Relief Act of 1997 and the
program established by section 202 of the America's Better Classrooms
Act of 2003.
``(2) A State or local government participating in a program
described in paragraph (1) shall--
``(A) in the awarding of contracts, give priority to
contractors with substantial numbers of employees residing in
the local education area to be served by the school being
constructed; and
``(B) include in the construction contract for such school
a requirement that the contractor give priority in hiring new
workers to individuals residing in such local education area.
``(3) In the case of a program described in paragraph (1), nothing
in this subsection or subsection (a) shall be construed to deny any tax
credit allowed under such program. If amounts are required to be
withheld from contractors to pay wages to which workers are entitled,
such amounts shall be treated as expended for construction purposes in
determining whether the requirements of such program are met.''.

SEC. 204. EMPLOYMENT AND TRAINING ACTIVITIES RELATING TO CONSTRUCTION
OR RECONSTRUCTION OF PUBLIC SCHOOL FACILITIES.

(a) In General.--Section 134 of the Workforce Investment Act of
1998 (29 U.S.C. 2864) is amended by adding at the end the following:
``(f) Local Employment and Training Activities Relating to
Construction or Reconstruction of Public School Facilities.--
``(1) In general.--In order to provide training services
related to construction or reconstruction of public school
facilities receiving funding assistance under an applicable
program, each State shall establish a specialized program of
training meeting the following requirements:
``(A) The specialized program provides training for
jobs in the construction industry.
``(B) The program provides trained workers for
projects for the construction or reconstruction of
public school facilities receiving funding assistance
under an applicable program.
``(C) The program ensures that skilled workers
(residing in the area to be served by the school
facilities) will be available for the construction or
reconstruction work.
``(2) Coordination.--The specialized program established
under paragraph (1) shall be integrated with other activities
under this Act, with the activities carried out under the
National Apprenticeship Act of 1937 by the State Apprenticeship
Council or through the Bureau of Apprenticeship and Training in
the Department of Labor, as appropriate, and with activities
carried out under the Carl D. Perkins Vocational and Technical
Education Act of 1998. Nothing in this subsection shall be
construed to require services duplicative of those referred to
in the preceding sentence.
``(3) Applicable program.--In this subsection, the term
`applicable program' has the meaning given the term in section
439(b) of the General Education Provisions Act (relating to
labor standards).''.
(b) State Plan.--Section 112(b)(17)(A) of the Workforce Investment
Act of 1998 (29 U.S.C. 2822(b)(17)(A)) is amended--
(1) in clause (iii), by striking ``and'' at the end;
(2) by redesignating clause (iv) as clause (v); and
(3) by inserting after clause (iii) the following:
``(iv) how the State will establish and
carry out a specialized program of training
under section 134(f); and''.

SEC. 205. INDIAN SCHOOL CONSTRUCTION.

(a) Definitions.--In this section:
(1) Bureau.--The term ``Bureau'' means the Bureau of Indian
Affairs of the Department of the Interior.
(2) Indian.--The term ``Indian'' means any individual who
is a member of a tribe.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(4) Tribal school.--The term ``tribal school'' means an
elementary school, secondary school, or dormitory that is
operated by a tribal organization or the Bureau for the
education of Indian children and that receives financial
assistance for its operation under an appropriation for the
Bureau under section 102, 103(a), or 208 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450f,
450h(a), and 458d) or under the Tribally Controlled Schools Act
of 1988 (25 U.S.C. 2501 et seq.) under a contract, a grant, or
an agreement, or for a Bureau-operated school.
(5) Tribe.--The term ``tribe'' has the meaning given the
term ``Indian tribal government'' by section 7701(a)(40) of the
Internal Revenue Code of 1986, including the application of
section 7871(d) of such Code. Such term includes any consortium
of tribes approved by the Secretary.
(b) Issuance of Bonds.--
(1) In general.--The Secretary shall establish a pilot
program under which eligible tribes have the authority to issue
qualified tribal school modernization bonds to provide funding
for the construction, rehabilitation, or repair of tribal
schools, including the advance planning and design thereof.
(2) Eligibility.--
(A) In general.--To be eligible to issue any
qualified tribal school modernization bond  under the
program under paragraph (1), a tribe shall--
(i) prepare and submit to the Secretary a
plan of construction that meets the
requirements of subparagraph (B);
(ii) provide for quarterly and final
inspection of the project by the Bureau; and
(iii) pledge that the facilities financed
by such bond will be used primarily for
elementary and secondary educational purposes
for not less than the period such bond remains
outstanding.
(B) Plan of construction.--A plan of construction
meets the requirements of this subparagraph if such
plan--
(i) contains a description of the
construction to be undertaken with funding
provided under a qualified tribal school
modernization bond;
(ii) demonstrates that a comprehensive
survey has been undertaken concerning the
construction needs of the tribal school
involved;
(iii) contains assurances that funding
under the bond will be used only for the
activities described in the plan;
(iv) contains response to the evaluation
criteria contained in Instructions and
Application for Replacement School
Construction, Revision 6, dated February 6,
1999; and
(v) contains any other reasonable and
related information determined appropriate by
the Secretary.
(C) Priority.--In determining whether a tribe is
eligible to participate in the program under this
subsection, the Secretary shall give priority to tribes
that, as demonstrated by the relevant plans of
construction, will fund projects--
(i) described in the Education Facilities
Replacement Construction Priorities List as of
FY 2000 of the Bureau of Indian Affairs (65
Fed. Reg. 4623-4624);
(ii) described in any subsequent priorities
list published in the Federal Register; or
(iii) which meet the criteria for ranking
schools as described in Instructions and
Application for Replacement School
Construction, Revision 6, dated February 6,
1999.
(D) Advance planning and design funding.--A tribe
may propose in its plan of construction to receive
advance planning and design funding from the tribal
school modernization escrow account established under
paragraph (6)(B). Before advance planning and design
funds are allocated from the escrow account, the tribe
shall agree to issue qualified tribal school
modernization bonds after the receipt of such funds and
agree as a condition of each bond issuance that the
tribe will deposit into such account or a fund managed
by the trustee as described in paragraph (4)(C) an
amount equal to the amount of such funds received from
the escrow account.
(3) Permissible activities.--In addition to the use of
funds permitted under paragraph (1), a tribe may use amounts
received through the issuance of a qualified tribal school
modernization bond to--
(A) enter into and make payments under contracts
with licensed and bonded architects, engineers, and
construction firms in order to determine the needs of
the tribal school and for the design and engineering of
the school;
(B) enter into and make payments under contracts
with financial advisors, underwriters, attorneys,
trustees, and other professionals who would be able to
provide assistance to the tribe in issuing bonds; and
(C) carry out other activities determined
appropriate by the Secretary.
(4) Bond trustee.--
(A) In general.--Notwithstanding any other
provision of law, any qualified tribal school
modernization bond issued by a tribe under this
subsection shall be subject to a trust agreement
between the tribe and a trustee.
(B) Trustee.--Any bank or trust company that meets
requirements established by the Secretary may be
designated as a trustee under subparagraph (A).
(C) Content of trust agreement.--A trust agreement
entered into by a tribe under this paragraph shall
specify that the trustee,  with respect to any bond
issued under this subsection shall--
(i) act as a repository for the proceeds of
the bond;
(ii) make payments to bondholders;
(iii) receive, as a condition to the
issuance of such bond, a transfer of funds from
the tribal school modernization escrow account
established under paragraph (6)(B) or from
other funds furnished by or on behalf of the
tribe in an amount, which together with
interest earnings from the investment of such
funds in obligations of or fully guaranteed by
the United States or from other investments
authorized by paragraph (10), will produce
moneys sufficient to timely pay in full the
entire principal amount of such bond on the
stated maturity date therefore;
(iv) invest the funds received pursuant to
clause (iii) as provided by such clause; and
(v) hold and invest the funds in a
segregated fund or account under the agreement,
which fund or account shall be applied solely
to the payment of the costs of items described
in paragraph (3).
(D) Requirements for making direct payments.--
(i) In general.--Notwithstanding any other
provision of law, the trustee shall make any
payment referred to in subparagraph (C)(v) in
accordance with requirements that the tribe
shall prescribe in the trust agreement entered
into under subparagraph (C). Before making a
payment to a contractor under subparagraph
(C)(v), the trustee shall require an inspection
of the project by a local financial institution
or an independent inspecting architect or
engineer, to ensure the completion of the
project.
(ii) Contracts.--Each contract referred to
in paragraph (3) shall specify, or be
renegotiated to specify, that payments under
the contract shall be made in accordance with
this paragraph.
(5) Payments of principal and interest.--
(A) Principal.--No principal payments on any
qualified tribal school modernization bond shall be
required until the final, stated maturity of such bond,
which stated maturity shall be within 15 years from the
date of issuance. Upon the expiration of such period,
the entire outstanding principal under the bond shall
become due and payable.
(B) Interest.--In lieu of interest on a qualified
tribal school modernization bond there shall be awarded
a tax credit under section 1400P of the Internal
Revenue Code of 1986.
(6) Bond guarantees.--
(A) In general.--Payment of the principal portion
of a qualified tribal school modernization bond issued
under this subsection shall be guaranteed solely by
amounts deposited with each respective bond trustee as
described in paragraph (4)(C)(iii).
(B) Establishment of account.--
(i) In general.--Notwithstanding any other
provision of law, beginning in fiscal year
2003, from amounts made available for school
replacement under the construction account of
the Bureau, the Secretary is authorized to
deposit not more than $30,000,000 each fiscal
year into a tribal school modernization escrow account.
(ii) Payments.--The Secretary shall use any
amounts deposited in the escrow account under
clauses (i) and (iii) to make payments to
trustees appointed and acting pursuant to
paragraph (4) or to make payments described in
paragraph (2)(D).
(iii) Transfers of excess proceeds.--Excess
proceeds held under any trust agreement that
are not needed for any of the purposes
described in clauses (iii) and (v) of paragraph
(4)(C) shall be transferred, from time to time,
by the trustee for deposit into the tribal
school modernization escrow account.
(7) Limitations.--
(A) Obligation to repay.--Notwithstanding any other
provision of law, the principal amount on any qualified
tribal school modernization bond issued under this
subsection shall be repaid only to the extent of any
escrowed funds furnished under paragraph (4)(C)(iii).
No qualified tribal school modernization bond issued by
a tribe shall be an obligation of, nor shall payment of
the principal thereof be guaranteed by, the United
States.
(B) Land and facilities.--Any land or facilities
purchased or improved with amounts derived from
qualified tribal school modernization bonds issued
under this subsection shall not be mortgaged or used as
collateral for such bonds.
(8) Sale of bonds.--Qualified tribal school modernization
bonds may be sold at a purchase price equal to, in excess of,
or at a discount from the par amount thereof.
(9) Treatment of trust agreement earnings.--Any amounts
earned through the investment of funds under the control of a
trustee under any trust agreement described in paragraph (4)
shall not be subject to Federal income tax.
(10) Investment of sinking funds.--Any sinking fund
established for the purpose of the payment of principal on a
qualified tribal school modernization bond shall be invested in
obligations issued by or guaranteed by the United States or in
such other assets as the Secretary of the Treasury may by
regulation allow.
(c) Expansion of Incentives for Tribal Schools.--Chapter 1 of the
Internal Revenue Code of 1986 (as amended by section 2) is further
amended by adding at the end the following new subchapter:

``Subchapter AA--Tribal School Modernization Provisions

``Sec. 1400P. Credit to holders of qualified tribal school
modernization bonds.

``SEC. 1400P. CREDIT TO HOLDERS OF QUALIFIED TRIBAL SCHOOL
MODERNIZATION BONDS.

``(a) Allowance of Credit.--In the case of a taxpayer who holds a
qualified tribal school modernization bond on a credit allowance date
of such bond which occurs during the taxable year, there shall be
allowed as a credit against the tax imposed by this chapter for such
taxable year an amount equal to the sum of the credits determined under
subsection (b) with respect to credit allowance dates during such year
on which the taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a qualified tribal school modernization bond is 25 percent
of the annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified tribal school modernization bond is
the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate with respect to an issue is the
rate equal to an average market yield (as of the date of sale
of the issue) on outstanding long-term corporate obligations
(as determined by the Secretary).
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under part
IV of subchapter A (other than subpart C thereof,
relating to refundable credits).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.
``(d) Qualified Tribal School Modernization Bond; Other
Definitions.--For purposes of this section--
``(1) Qualified tribal school modernization bond.--
``(A) In general.--The term `qualified tribal
school modernization bond' means, subject to
subparagraph (B), any bond issued as part of an issue
under section 2(c) of the Indian School Construction
Act, as in effect on the date of the enactment of this
section, if--
``(i) 95 percent or more of the proceeds of
such issue are to be used for the construction,
rehabilitation, or repair of a school facility
funded by the Bureau of Indian Affairs of the
Department of the Interior or for the
acquisition of land on which such a facility is
to be constructed with part of the proceeds of
such issue,
``(ii) the bond is issued by a tribe,
``(iii) the issuer designates such bond for
purposes of this section, and
``(iv) the term of each bond which is part
of such issue does not exceed 15 years.
``(B) National limitation on amount of bonds
designated.--
``(i) National limitation.--There is a
national qualified tribal school modernization
bond limitation for each calendar year. Such
limitation is--
``(I) $200,000,000 for 2004,
``(II) $200,000,000 for 2005, and
``(III) zero after 2005.
``(ii) Allocation of limitation.--The
national qualified tribal school modernization
bond limitation shall be allocated to tribes by
the Secretary of the Interior subject to the
provisions of section 2 of the Indian School
Construction Act, as in effect on the date of
the enactment of this section.
``(iii) Designation subject to limitation
amount.--The maximum aggregate face amount of
bonds issued during any calendar year which may
be designated under subsection (d)(1) with
respect to any tribe shall not exceed the
limitation amount allocated to such government
under clause (ii) for such calendar year.
``(iv) Carryover of unused limitation.--If
for any calendar year--
``(I) the limitation amount under
this subparagraph, exceeds
``(II) the amount of qualified
tribal school modernization bonds
issued during such year,
the limitation amount under this subparagraph
for the following calendar year shall be
increased by the amount of such excess. The
preceding sentence shall not apply if such
following calendar year is after 2012.
``(2) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(3) Bond.--The term `bond' includes any obligation.
``(4) Tribe.--The term `tribe' has the meaning given the
term `Indian tribal government' by section 7701(a)(40),
including the application of section 7871(d). Such term
includes any consortium of tribes approved by the Secretary of
the Interior.
``(e) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(f) Bonds Held by Regulated Investment Companies.--If any
qualified tribal school modernization bond is held by a regulated
investment company, the credit determined under subsection (a) shall be
allowed to shareholders of such company under procedures prescribed by
the Secretary.
``(g) Credits May Be Stripped.--Under regulations prescribed by the
Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified tribal school
modernization bond and the entitlement to the credit under this
section with respect to such bond. In case of any such
separation, the credit under this section shall be allowed to
the person who on the credit allowance date holds the
instrument evidencing the entitlement to the credit and not to
the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified tribal school modernization bond as if
it were a stripped bond and to the credit under this section as
if it were a stripped coupon.
``(h) Treatment for Estimated Tax Purposes.--Solely for purposes of
sections 6654 and 6655, the credit allowed by this section to a
taxpayer by reason of holding a qualified tribal school modernization
bond on a credit allowance date shall be treated as if it were a
payment of estimated tax made by the taxpayer on such date.
``(i) Credit May Be Transferred.--Nothing in any law or rule of law
shall be construed to limit the transferability of the credit allowed
by this section through sale and repurchase agreements.
``(j) Credit Treated as Allowed Under Part IV of Subchapter A.--For
purposes of subtitle F, the credit allowed by this section shall be
treated as a credit allowable under part IV of subchapter A of this
chapter.
``(k) Reporting.--Issuers of qualified tribal school modernization
bonds shall submit reports similar to the reports required under
section 149(e).''.
(d) Additional Provisions.--
(1) Sovereign immunity.--This section and the amendments
made by this section shall not be construed to impact, limit,
or affect the sovereign immunity of the Federal Government or
any State or tribal government.
(2) Application.--This section and the amendments made by
this section shall take effect on the date of the enactment of
this Act with respect to bonds issued after December 31, 2002,
regardless of the status of regulations promulgated thereunder.

TITLE III--MAKING HIGHER EDUCATION MORE ACCESSIBLE

Subtitle A--College Access

SEC. 301. EXPANSION OF GEARUP AND TRIO.

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is
amended--
(1) in section 402A(f), by striking ``$700,000,000 for
fiscal year 1999, and such sums as may be necessary for each of
the 4 succeeding fiscal years'' and inserting ``$700,000,000
for fiscal year 1999, such sums as may be necessary for each of
fiscal years 2000 through 2003, $1,000,000,000 for fiscal year
2004, and such sums as may be necessary for each of the
succeeding fiscal years''; and
(2) by striking section 404H and inserting the following:

``SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this chapter
$200,000,000 for fiscal year 1999, such sums as may be necessary for
each of fiscal years 2000 through 2003, $570,000,000 for fiscal year
2004, and such sums as may be necessary for each of the succeeding
fiscal years.''.

SEC. 302. PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE ENGAGED IN MIGRANT
AND SEASONAL FARMWORK.

Section 418A(h) of the Higher Education Act of 1965 (20 U.S.C.
1070d-2(h)) is amended--
(1) in paragraph (1), by striking ``$15,000,000 for fiscal
year 1999 and such sums as may be necessary for each of the 4
succeeding fiscal years'' and inserting ``$15,000,000 for
fiscal year 1999, such sums as may be necessary for each of
fiscal years 2000 through 2003, $29,000,000 for fiscal year
2004, and such sums as may be necessary for each of the
succeeding fiscal years''; and
(2) in paragraph (2), by striking ``$5,000,000 for fiscal
year 1999 and such sums as may be necessary for each of the 4
succeeding fiscal years'' and inserting ``$5,000,000 for fiscal
year 1999, such sums as may be necessary for each of fiscal
years 2000 through 2003, $21,000,000 for fiscal year 2004, and
such sums as may be necessary for each of the succeeding fiscal
years''.

Subtitle B--Enhancing Programs for Minority Serving Institutions

SEC. 311. INCREASING DIVERSITY.

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is
amended--
(1) in section 399(a)--
(A) by striking paragraph (1)(B) and inserting the
following:
``(B) There are authorized to be appropriated to
carry out section 316, $10,000,000 for fiscal year
1999, such sums as may be necessary for each of fiscal
years 2000 through 2003, $35,000,000 for fiscal year
2004, and such sums as may be necessary for each of the
succeeding fiscal years.'';
(B) by striking paragraph (1)(C) and inserting the
following:
``(C) There are authorized to be appropriated to
carry out section 317, $5,000,000 for fiscal year 1999,
such sums as may be necessary for each of fiscal years
2000 through 2003, $13,000,000 for fiscal year 2004,
and such sums as may be necessary for each of the
succeeding fiscal years.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by striking ``and
such sums as may be necessary for each of the 4
succeeding fiscal years'' and inserting ``such
sums as may be necessary for each of fiscal
years 2000 through 2003, $412,000,000 for
fiscal year 2004, and such sums as may be
necessary for each of the succeeding fiscal
years''; and
(ii) in subparagraph (B), by striking ``and
such sums as may be necessary for each of the 4
succeeding fiscal years'' and inserting ``such
sums as may be necessary for each of fiscal
years 2000 through 2003, $98,000,000 for fiscal
year 2004, and such sums as may be necessary
for each of the succeeding fiscal years'';
(D) in paragraph (3), by striking ``and such sums
as may be necessary for each of the 4 succeeding fiscal
years'' and inserting ``such sums as may be necessary
for each of fiscal years 2000 through 2003, $50,000,000
for fiscal year 2004, and such sums as may be necessary
for each of the succeeding fiscal years''; and
(E) in paragraph (5), by striking ``and such sums
as may be necessary for each of the 4 succeeding fiscal
years'' and inserting ``such sums as may be necessary
for each of fiscal years 2000 through 2003, $17,000,000
for fiscal year 2004, and such sums as may be necessary
for each of the succeeding fiscal years''; and
(2) by striking section 518(a) and inserting the following:
``(a) Authorizations.--There are authorized to be appropriated to
carry out this title $62,500,000 for fiscal year 1999, such sums as may
be necessary for each of fiscal years 2000 through 2003, $172,000,000
for fiscal year 2004, and such sums as may be necessary for each of the
succeeding fiscal years.''.

Subtitle C--NTIA Digital Network Technology Program

SEC. 331. ESTABLISHMENT OF PROGRAM.

Title I of the National Telecommunications and Information
Administration Organization Act (47 U.S.C. 901 et seq.) is amended by
adding at the end the following:

``PART D--DIGITAL NETWORK TECHNOLOGY PROGRAM

``SEC. 171. PROGRAM AUTHORIZED.

``The Secretary shall establish, within the NTIA's Technology
Opportunities Program a digital network technologies program to
strengthen the ability of eligible institutions to provide capacity for
instruction in digital network technologies by providing grants to, or
executing contracts or cooperative agreements with, those institutions
to provide such instruction.

``SEC. 172. ACTIVITIES SUPPORTED.

``An eligible institution shall use a grant, contract, or
cooperative agreement awarded under this part--
``(1) to acquire the equipment, instrumentation, networking
capability, hardware and software, digital network technology,
and infrastructure;
``(2) to develop and provide educational services,
including faculty development, to prepare students or faculty
seeking a degree or certificate that is approved by the State,
or a regional accrediting body recognized by the Secretary of
Education;
``(3) to provide teacher education, library and media
specialist training, and preschool and teacher aid
certification to individuals who seek to acquire or enhance
technology skills in order to use technology in the classroom
or instructional process;
``(4) to implement a joint project to provide education
regarding technology in the classroom with a State or State
educational agency, local educational agency, community-based
organization, national nonprofit organization, or business,
including minority business or a business located in HUB zones,
as defined by the Small Business Administration; or
``(5) to provide professional development to administrators
and faculty of eligible institutions with institutional
responsibility for technology education.

``SEC. 173. APPLICATION AND REVIEW PROCEDURE.

``(a) In General.--To be eligible to receive a grant, contract, or
cooperative agreement under this part, an eligible institution shall
submit an application to the Secretary at such time, in such manner,
and accompanied by such information as the Secretary may reasonably
require. The Secretary, in consultation with the panel described in
subsection (b), shall establish a procedure by which to accept such
applications and publish an announcement of such procedure, including a
statement regarding the availability of funds, in the Federal Register.
``(b) Peer Review Panel.--The Secretary shall establish a peer
review panel to aid the Secretary in establishing the application
procedure described in subsection (a) and selecting applicants to
receive grants, contracts, and cooperative agreements under section
171. In selecting the members for such panel, the Secretary may consult
with appropriate cabinet-level officials, representatives of non-
Federal organizations, and representatives of eligible institutions to
ensure that the membership of such panel reflects membership of the
minority higher education community, including Federal agency personnel
and other individuals who are knowledgeable about issues regarding
minority education institutions.

``SEC. 174. MATCHING REQUIREMENT.

``The Secretary may not award a grant, contract, or cooperative
agreement to an eligible institution under this part unless such
institution agrees that, with respect to the costs to be incurred by
the institution in carrying out the program for which the grant,
contract, or cooperative agreement was awarded, such institution will
make available (directly or through donations from public or private
entities) non-Federal contributions in an amount equal to \1/4\ of the
amount of the grant, contract, or cooperative agreement awarded by the
Secretary, or $500,000, whichever is the lesser amount. The Secretary
shall waive the matching requirement for any institution or consortium
with no endowment, or an endowment that has a current dollar value
lower than $50,000,000.

``SEC. 175. LIMITATION.

``An eligible institution that receives a grant, contract, or
cooperative agreement under this part that exceeds $2,500,000, shall
not be eligible to receive another grant, contract, or cooperative
agreement under this part until every other eligible institution has
received a grant, contract, or cooperative agreement under this part.

``SEC. 176. ANNUAL REPORT AND EVALUATION.

``(a) Annual Report Required From Recipients.--Each institution
that receives a grant, contract, or cooperative agreement under this
part shall provide an annual report to the Secretary on its use of the
grant, contract, or cooperative agreement.
``(b) Evaluation by Secretary.--The Secretary, in consultation with
the Secretary of Education, shall--
``(1) review the reports provided under subsection (a) each
year;
``(2) evaluate the program authorized by section 171 on the
basis of those reports; and
``(3) conduct an evaluation at the end of the third year.
``(c) Contents of Evaluation.--The Secretary, in the evaluation,
shall describe the activities undertaken by those institutions and
shall assess the short-range and long-range impact of activities
carried out under the grant, contract, or cooperative agreement on the
students, faculty, and staff of the institutions.
``(d) Report to Congress.--The Secretary shall submit a report to
Congress based on the evaluation not later than 1 year after conducting
the evaluation. In the report, the Secretary shall include such
recommendations, including recommendations concerning the continuing
need for Federal support of the program, as may be appropriate.''.

SEC. 332. DEFINITIONS.

Section 102(a) of the National Telecommunications and Information
Administration Organization Act (47 U.S.C. 901(a)) is amended by adding
at the end the following:
``(6) The term `eligible institution' means an institution
that is--
``(A) a part B institution, as defined in section
322(2) of the Higher Education Act of 1965 (20 U.S.C.
1061(2)), an institution identified in subparagraph
(A), (B), or (C) of section 326(e)(1) of such Act (20
U.S.C. 1063b(e)(1) (A), (B), or (C)), or a consortium
of institutions described in this subparagraph;
``(B) a Hispanic-serving institution, as defined in
section 502(a)(5) of the Higher Education Act of 1965
(20 U.S.C. 1101a(a)(5));
``(C) a tribal college or university, as defined in
section 316(b)(3) of the Higher Education Act of 1965
(20 U.S.C. 1059c(b)(3));
``(D) an Alaska Native-serving institution under
section 317(b) of the Higher Education Act of 1965 (20
U.S.C. 1059d(b));
``(E) a Native Hawaiian-serving institution under
section 317(b) of the Higher Education Act of 1965 (20
U.S.C. 1059d(b)); or
``(F) an institution determined by the Secretary,
in consultation with the Secretary of Education, to
have enrolled a substantial number of minority, low-
income students during the previous academic year who
received assistance under subpart 1 of part A of title
IV of the Higher Education Act of 1965 (20 U.S.C. 1070a
et seq.) for that year.''.

SEC. 333. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary of
Commerce to carry out part D of title I of the National
Telecommunications and Information Administration Organization Act not
more than $250,000,000 for the period of fiscal years 2003 through
2007.

Subtitle D--Higher Education and Immigration

SEC. 341. RESTORATION OF STATE OPTION TO DETERMINE RESIDENCY FOR
PURPOSES OF HIGHER EDUCATION BENEFITS.

Section 505 of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 (Division C of Public Law 104-208; 110 Stat.
3009-672; 8 U.S.C. 1623) is repealed.

SEC. 342. CANCELLATION OF REMOVAL AND ADJUSTMENT OF STATUS OF CERTAIN
ALIEN HIGH SCHOOL GRADUATES WHO ARE LONG-TERM RESIDENTS
OF THE UNITED STATES.

(a) Special Rule for Certain Alien High School Graduates.--
(1) In general.--Except as otherwise provided in paragraph
(2), notwithstanding any other provision of law, the Attorney
General may cancel the removal of, and adjust to the status of
an alien lawfully admitted for permanent residence, an alien
who is inadmissible or deportable from the United States, if
the alien applies for such cancellation and adjustment of
status and demonstrates that--
(A) the alien has attained 12 years of age prior to
the date of enactment of this Act;
(B) the alien has not, prior to the date of filing
the application for cancellation of removal and
adjustment of status under this subsection, attained
the age of 21 years;
(C) the alien, prior to the date of filing an
application for cancellation of removal and adjustment
of status under this subsection, has received a
certificate of graduation from a school providing
secondary education or the recognized equivalent of
such certificate;
(D) has maintained a continuous physical presence
in the United States for a period of not less than 5
years immediately preceding the date of enactment of
this Act;
(E) the alien is a person of good moral character;
and
(F) is not inadmissible under section 212(a)(2) (8
U.S.C. 1182(a)(2)) or 212(a)(3) (8 U.S.C. 1182(a)(3))
or deportable under section 237(a)(2) (8 U.S.C.
1227(a)(2)) or 237(a)(4) (8 U.S.C. 1227(a)(4)) of the
Immigration and Nationality Act.
(2) Exceptions.--
(A) Rehabilitation and hardship to certain
aliens.--Notwithstanding subparagraph (F) of paragraph
(1), the Attorney General may cancel the removal of,
and adjust to the status of an alien lawfully admitted
for permanent residence, an alien (other than an alien
convicted of an aggravated felony, as defined in
section 101(a)(43) of the Immigration and Nationality
Act (8 U.S.C. 1101(a)(43)) or an alien who is
inadmissible under section 212(a)(3) (8 U.S.C.
1182(a)(3)) or deportable under section 237(a)(4) (8
U.S.C. 1227(a)(4)) of such Act) who but for that
subparagraph would qualify for cancellation of removal
and adjustment of status under this section if the
alien demonstrates rehabilitation and that the alien's
removal will result in exceptional and extremely
unusual hardship to the alien or a United States
citizen or lawful permanent resident spouse, parent, or
child.
(B) Aliens qualifying before the date of
enactment.--Notwithstanding paragraph (1), the Attorney
General may cancel the removal of, and adjust to the
status of an alien lawfully admitted for permanent
residence, an alien if--
(i) the alien would have met the
requirements of paragraph (1) at any time
during the 4-year period immediately preceding
the date of enactment of this Act; and
(ii) the alien has graduated from, or is,
on the date of filing an application for
cancellation of removal under this subsection,
enrolled in the United States in an institution
of higher education, as defined by section 101
of the Higher Education Act of 1965 (20 U.S.C.
1001).
(3) Procedures.--
(A) In general.--The Attorney General shall by
regulation establish a procedure that permits aliens to
apply for cancellation of removal and adjustment of
status available under this subsection without being
placed in removal proceedings, except that, in
addition, such cancellation of removal and adjustment
of status shall be available in removal proceedings. In
the case of an alien in an exclusion or deportation
hearing, suspension of deportation on the same grounds
as are provided under this subsection for cancellation
of removal, together with adjustment of status, shall
be available.
(B) Treatment prior to graduation.--
(i) In general.--Notwithstanding any other
provision of law, an alien described in clause
(ii) may not be removed so long as the alien
continues to meet the criteria of that clause.
(ii) Covered aliens.--An alien described in
this clause is an alien who does not meet the
requirements of paragraph (1)(C) but is
otherwise able to demonstrate prima facie
eligibility for cancellation of removal and
adjustment of status under this section and has
a reasonable opportunity of meeting all the
requirements of cancellation of removal and
adjustment of status under this section in the
future.
(iii) Work authorization.--The Attorney
General shall grant an alien described in
clause (ii) authorization to engage in
employment in the United States.
(C) Expedited processing of applications;
prohibition on fees.--Regulations promulgated under
this paragraph shall provide that applications for cancellation of
removal and adjustment of status under this subsection will be
considered on an expedited basis and without a requirement for the
payment by the applicant of any additional fee for such expedited
processing.
(4) Confidentiality of information.--
(A) Prohibition.--Neither the Attorney General nor
any other official or employee of the Department of
Justice may--
(i) use the information furnished by the
applicant pursuant to an application filed
under this subsection for any purpose other
than to make a determination on the
application;
(ii) make any publication whereby the
information furnished by any particular
individual can be identified; or
(iii) permit anyone other than a sworn
officer or employee of the Department of
Justice or, with respect to an application
filed under this subsection with a designated
entity, that designated entity, to examine
applications filed under this subsection.
(B) Penalty.--Whosoever knowingly uses, publishes,
or permits information to be examined in violation of
this subsection shall be fined not more than $10,000.
(b) Termination of Period of Continuous Period.--For purposes of
this section, any period of continuous physical presence in the United
States of an alien who applies for cancellation of removal and
adjustment of status under subsection (a) shall not terminate when the
alien is served a notice to appear under section 239(a) of the
Immigration and Nationality Act (8 U.S.C. 1229) or any other document
notifying the alien of the initiation of immigration proceedings under
that Act.
(c) Treatment of Certain Breaks in Presence.--An alien shall be
considered to have failed to maintain continuous physical presence in
the United States under subsection (a)(1)(D) if the alien has departed
from the United States for any period in excess of 90 days or for any
periods in the aggregate exceeding 180 days, except that an alien may
remain eligible for cancellation of removal and adjustment of status
under this section notwithstanding a failure to maintain continuous
physical presence in the United States if the alien demonstrates that
failure is due to exceptional circumstances, as defined by section
240(e)(1) of the Immigration and Nationality Act (8 U.S.C.
1229a(e)(1)), or circumstances described in subparagraphs (A), (B), or
(C) of section 244(b)(1) of the Immigration and Nationality Act (8
U.S.C. 1254a(b)(1)).
(d) Statutory Construction.--Nothing in this section may be
construed to apply a numerical limitation on the number of aliens who
may be eligible for cancellation of removal under section 240A of the
Immigration and Nationality Act (8 U.S.C. 1229b).
(e) Regulations.--Not later than 180 days after the date of
enactment of this Act, the Attorney General shall publish regulations
implementing this section. Such regulations shall be effective
immediately on an interim, final basis, but are subject to change and
revision after public notice and opportunity for a period for public
comment.

SEC. 343. ANNUAL REPORT.

Not later than one year after the date of enactment of this Act,
and annually thereafter, the Attorney General shall submit a report to
the Committees on the Judiciary of the Senate and the House of
Representatives and to the Secretary of Education setting forth--
(1) the number of aliens who applied for cancellation of
removal and adjustment of status under section 3;
(2) the number of aliens who were granted cancellation of
removal and adjustment of status under section 3;
(3) the number of aliens who applied for cancellation of
removal and adjustment of status under section 3 but whose
applications were denied and the basis for the denial of each
application; and
(4) the number of pending applications for cancellation of
removal and adjustment of status under section 3.

TITLE IV--MAKING HIGHER EDUCATION AFFORDABLE

Subtitle A--Pell Grants

SEC. 411. SENSE OF THE SENATE.

(a) Findings.--Congress makes the following findings:
(1) Increasing the percentage of individuals who obtain a
postsecondary education has become increasingly important, not
just to the individual beneficiary, but to the Nation as a
whole. The growth and continued expansion of the Nation's
economy is heavily dependent on an educated and highly skilled
workforce.
(2) The opportunity to gain a postsecondary education also
is important to the Nation as a means to help advance the
American ideals of progress and equality.
(3) Not all qualified students have the opportunity to earn
a college degree because of significant financial barriers.
According to Empty Promises, a report of the Advisory Committee
on Student Financial Assistance, in 2003, nearly \1/2\ of all
low- and moderate-income secondary school graduates (more than
400,000 students) will be unable to attend a 4-year college and
170,000 of these students will attend no college at all.
(4) The Federal Government plays an invaluable role in
making student financial aid available to ensure that qualified
students are able to attend college, regardless of their
financial means. Since the inception of the Pell Grant program
in 1973, nearly 80,000,000 grants have helped low- and middle-
income students go to college, enrich their lives, and become
productive members of society.
(5) Nationwide, almost 63 percent of secondary school
graduates continue on to higher education immediately after
completing secondary school. This degree of college
participation would not exist without the Federal investment in
student aid, especially the Pell Grant program. More than
4,000,000 low- and middle-income students receive Pell Grants;
95 percent of whom have a family income of not more than
$40,000.
(6) In the next 10 years, the number of undergraduate
students enrolled in the Nation's colleges and universities
will increase by 15 percent to more than 15,000,000 students.
Many of these students will be the first in their families to
attend college. The continued investment in the Pell Grant
program is essential if college is to remain an achievable part
of the American dream.
(7) Increasing the maximum Pell Grant to $4,500 would allow
approximately 430,000 additional students to benefit from the
program.
(8) Increasing the maximum Pell Grant to $4,500 would
result in 200,000 new Pell grant recipients.
(9) Pell Grant recipients are more likely to graduate with
student loan debt and to amass more debt than other student
borrowers. Increasing the maximum Pell Grant to $4,500 will
help remedy this disparity.
(b) Sense of the Senate.--It is the sense of the Senate that--
(1) the maximum Pell Grant should be increased to $4,500
during award year 2003-2004; and
(2) the maximum Pell Grant amount set by Congress should be
the amount eligible students receive.

SEC. 412. COVERING PELL GRANT SHORTFALL.

The following sums are appropriated, out of any money in the
Treasury not otherwise appropriated for the fiscal year ending
September 30, 2003, for an additional amount for ``Student Financial
Assistance'' for carrying out subpart 1 of part A of title IV of the
Higher Education Act of 1965, as amended, not more than $3,500,000,000,
to remain available through September 30, 2004: Provided, That the
Congress designates the entire amount as an emergency requirement
pursuant to section 252(e) of the Balanced Budget and Emergency Deficit
Control Act of 1985.

Subtitle B--Student Loan Origination Fees

SEC. 421. PHASEOUT OF STUDENT LOAN ORIGINATION FEES.

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is
amended--
(1) in section 438(c)(2), by striking ``is authorized to
charge the borrower an origination fee in an amount not to
exceed 3.0 percent'' and inserting ``is authorized to charge
the borrower an origination fee during fiscal year 2003 in an
amount not to exceed 3.0 percent, during fiscal year 2004 in an
amount not to exceed 2.0 percent, and during fiscal year 2005
in amount not to exceed 1.0 percent''; and
(2) by striking section 455(c) and inserting the following:
``(c) Loan Fee.--The Secretary shall charge the borrower of a loan
made under this part--
``(1) during fiscal year 2003 an origination fee of 3.0
percent of the principal amount of loan;
``(2) during fiscal year 2004 an origination fee of 2.0
percent of the principal amount of loan; and
``(3) during fiscal year 2005 an origination fee of 1.0
percent of the principal amount of loan.''.

Subtitle C--Hope Scholarship

SEC. 431. HOPE AND LIFETIME LEARNING CREDITS TO BE REFUNDABLE.

(a) Credit To Be Refundable.--Section 25A of the Internal Revenue
Code of 1986 (relating to Hope and Lifetime Learning credits) is hereby
moved to subpart C of part IV of subchapter A of chapter 1 of such Code
(relating to refundable credits) and inserted after section 35.
(b) Technical Amendments.--
(1) Section 36 of such Code is redesignated as section 37.
(2) Section 25A of such Code (as moved by subsection (a))
is redesignated as section 36.
(3) Paragraph (1) of section 36(a) of such Code (as
redesignated by paragraph (2)) is amended by striking ``this
chapter'' and inserting ``this subtitle''.
(4) Subparagraph (B) of section 72(t)(7) of such Code is
amended by striking ``section 25A(g)(2)'' and inserting
``section 36(g)(2)''.
(5) Subparagraph (A) of section 135(d)(2) of such Code is
amended by striking ``section 25A'' and inserting ``section
36''.
(6) Section 221(d) of such Code is amended--
(A) by striking ``section 25A(g)(2)'' in paragraph
(2)(B) and inserting ``section 36(g)(2)'',
(B) by striking ``section 25A(f)(2)'' in paragraph
(2)(B) and inserting ``section 36(f)(2)'', and
(C) by striking ``section 25A(b)(3)'' in paragraph
(3) and inserting ``section 36(b)(3)''.
(7) Section 222 of such Code is amended--
(A) by striking ``section 25A'' in subparagraph (A)
of subsection (c)(2) and inserting ``section 36'',
(B) by striking ``section 25A(f)'' in subsection
(d)(1) and inserting ``section 36(f)'', and
(C) by striking ``section 25A(g)(2)'' in subsection
(d)(1) and inserting ``section 36(g)(2)''.
(8) Section 529 of such Code is amended--
(A) by striking ``section 25A(g)(2)'' in subclause
(I) of subsection (c)(3)(B)(v) and inserting ``section
36(g)(2)'',
(B) by striking ``section 25A'' in subclause (II)
of subsection (c)(3)(B)(v) and inserting ``section
36'', and
(C) by striking ``section 25A(b)(3)'' in clause (i)
of subsection (e)(3)(B) and inserting ``section
36(b)(3)''.
(9) Section 530 of such Code is amended--
(A) by striking ``section 25A(g)(2)'' in subclause
(I) of subsection (d)(2)(C)(i) and inserting ``section
36(g)(2)'',
(B) by striking ``section 25A'' in subclause (II)
of subsection (d)(2)(C)(i) and inserting ``section
36'', and
(C) by striking ``section 25A(g)(2)'' in clause
(iii) of subsection (d)(4)(B) and inserting ``section
36(g)(2)''.
(10) Subsection (e) of section 6050S of such Code is
amended by striking ``section 25A'' and inserting ``section
36''.
(11) Subparagraph (J) of section 6213(g)(2) of such Code is
amended by striking ``section 25A(g)(1)'' and inserting
``section 36(g)(1)''.
(12) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``or
from section 36 of such Code''.
(13) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by striking the item relating to section 36 and
inserting the following:

``Sec. 36. Hope and Lifetime Learning
credits.
``Sec. 37. Overpayments of tax.''.
(14) The table of sections for subpart A of such part IV is
amended by striking the item relating to section 25A.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
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