Text: S.940 — 107th Congress (2001-2002)All Information (Except Text)

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Introduced in Senate (05/23/2001)

 
[Congressional Bills 107th Congress]
[From the U.S. Government Printing Office]
[S. 940 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 940

                       To leave no child behind.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 23, 2001

 Mr. Dodd (for himself, Mr. Kennedy, and Mr. Wellstone) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
                       To leave no child behind.

    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 ``Leave No Child Behind Act of 2001''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

          TITLE I--HEALTHY START--CHILDREN'S HEALTH INSURANCE

                Subtitle A--Children's Health Insurance

Sec. 1001. MediKids health insurance.
Sec. 1002. Benefits for all children born after 2002.
Sec. 1003. MediKids premium.
Sec. 1004. Refundable credit for cost-sharing expenses under MediKids 
                            program.
Sec. 1005. Report on long-term revenues.
   Subtitle B--Children's Health Insurance Eligibility Expansion and 
                        Enrollment Improvements

                   Csubchapter a--medicaid and schip
Sec. 1101. Expansion of children's eligibility for medicaid and SCHIP.
Sec. 1102. Optional coverage of legal immigrants under the medicaid 
                  subchapter b--family opportunity act
Sec. 1111. Short title; amendments to Social Security Act.
Sec. 1112. Opportunity for families of disabled children to purchase 
                            medicaid coverage for such children.
Sec. 1113. Treatment of inpatient psychiatric hospital services for 
                            individuals under age 21 in home or 
                            community-based services waivers.
Sec. 1114. Demonstration of coverage under the medicaid program of 
                            children with potentially severe 
                            disabilities.
Sec. 1115. Development and support of family-to-family health 
                            information centers.
Sec. 1116. Restoration of medicaid eligibility for certain SSI 
                            beneficiaries.
                   Chapter 2--Enrollment Improvements

Sec. 1121. Application of simplified title XXI procedures under the 
                            medicaid program.
Sec. 1122. Automatic enrollment of children born to title XXI parents.
                       Chapter 3--Effective Date

Sec. 1131. Effective date.
                  Subtitle C--Improving Access to Care

                         Chapter 1--Commission

Sec. 1201.  Commission on Children's Access to Care.
         Chapter 2--Children's Health Insurance Accountability

Sec. 1211. Short title.
Sec. 1212. Findings.
Sec. 1213. Amendments to the Public Health Service Act.
Sec. 1214. Amendments to the Employee Retirement Income Security Act of 
                            1974.
Sec. 1215. Studies.
                            Chapter 3--EPSDT

Sec. 1221. Collection of data regarding the delivery of EPSDT services.
                Subtitle D--Reducing Public Health Risks

                      Chapter 1--Asthma Treatments

Sec. 1301. Findings.
Sec. 1302. Asthma, vision, and hearing screening for early Head Start 
                            and Head Start programs.
Sec. 1303. Asthma, vision, and hearing screening and treatment for 
                            children enrolled in public schools.
Sec. 1304. General effective date.
                  Chapter 2--Increase in HUD Programs

Sec. 1311. Lead-based paint hazard control grants.
Sec. 1312. Healthy Homes Initiative program.
            Chapter 3--Youth Smoking Cessation and Education

Sec. 1321. subchapter a--protection of children from tobacco
Part I--Food and Drug Administration Jurisdiction and General Authority

Sec. 1331. Reference.
Sec. 1332. Statement of general authority.
Sec. 1333. Nonapplicability to other drugs or devices.
Sec. 1334. Conforming amendments to confirm jurisdiction.
Sec. 1335. General rule.
Sec. 1336. Safety and efficacy standard and recall authority.
                Part II--Regulation of Tobacco Products

Sec. 1341. Performance standards.
Sec. 1342. Application of Federal Food, Drug, and Cosmetic Act to 
                            tobacco products.
Sec. 1343. Funding.
Sec. 1344. Repealsubchapter b--miscellaneous provisions
Sec. 1351. Nonapplication to tobacco producers.
Sec. 1352. Equal treatment of retail outlets.
             Chapter 4--Coverage Of Childhood Immunizations

Sec. 1361. Short title.
Sec. 1362. Amendments to the Employee Retirement Income Security Act of 
                            1974.
Sec. 1363. Amendments to the Public Health Service Act.
Sec. 1364. Amendments to the Internal Revenue Code of 1986.
Sec. 1365. Effective dates.
            Subtitle E--Reducing Environmental Health Risks

            Chapter 1--Environmental Protection of Children

Sec. 1401. Short title.
Sec. 1402. Environmental protection for children and other vulnerable 
                            subpopulations.
Sec. 1403. Conforming amendment.
               Chapter 2--School Environmental Protection

Sec. 1411. Short title.
Sec. 1412. Integrated pest management systems for schools.
Sec. 1413. Conforming amendment.
Sec. 1414. Effective date.
        TITLE II--HEALTHY START--SUPPORT FOR HEALTHY DEVELOPMENT

            Subtitle A--Promotion of State and Local Support

Sec. 2001. State and local parenting support and education grant 
                            program.
          Subtitle B--Support for Parents Caring for Children

Sec. 2101. Short title.
Sec. 2102. Findings.
Sec. 2103. Coverage of employees.
                     Subtitle C--Paid Family Leave

Sec. 2201. Short title.
Sec. 2202. Findings.
Sec. 2203. Purposes.
Sec. 2204. Definitions.
Sec. 2205. Demonstration projects.
Sec. 2206. Evaluations and reports.
Sec. 2207. Authorization of appropriations.
               Subtitle D--Health Care for the Uninsured

Sec. 2301. Familycare coverage of parents under the medicaid program 
                            and title XXI.
        Subtitle E--Awareness of Environmental Risks to Children

Sec. 2401. Short title.
Sec. 2402. Finding.
    subchapter a--disclosure of industrial releases that present a 
                      significant risk to children
Ssubchapter b--disclosure of high health risk chemicals in children's 
                           consumer products
Sec. 2421. List of toxic chemicals.
Sec. 2422. Reporting of toxic chemicals in consumer products.
Sec. 2423. Exemptions.
Sec. 2424. Private citizen enforcement.
        Chapter 2--Public Right to Know About Toxic Chemical Use

Sec. 2431. Disclosure of toxic chemical use by comparable facilities.
Sec. 2432. Disclosure of toxic chemical use.
Sec. 2433. Streamlined data collection and dissemination.
Sec. 2434. Trade secret protection.
              Subtitle F--Promoting Responsible Fatherhood

                        Chapter 1--Block Grants

Sec. 2501. Block grants to States to encourage media campaigns.
Sec. 2502. Responsible fatherhood block grant.
                   Chapter 2--National Clearinghouse

Sec. 2511. National clearinghouse for responsible fatherhood programs.
                  TITLE III--HEAD START AND CHILD CARE

                    Subtitle A--Infants and Toddlers

Sec. 3001. Reservation of Head Start Act funds for infants and 
                            toddlers.
Sec. 3002. Reservation of child care and development block grant funds 
                            for infants and toddlers.
                     Subtitle B--Child Care Access

               Chapter 1--Improving Access to Child Care

Sec. 3101. Payment rates.
 Chapter 2--Improvements To the Child Care and Development Block Grant 
                                Program

Sec. 3111. Authorization of appropriations.
Sec. 3112. State plan requirements.
Sec. 3113. Definitions.
               Subtitle C--Child Care Quality Improvement

 Chapter 1--Focus On Committed and Underpaid Staff for Children's Sake

Sec. 3201. Short title.
Sec. 3202. Findings and purpose.
Sec. 3203. Definitions.
Sec. 3204. Funds for child care provider development and retention 
                            grants and for child care provider 
                            scholarships.
Sec. 3205. Allotments to States.
Sec. 3206. Application and plan.
Sec. 3207. Child care provider development and retention grant program.
Sec. 3208. Child care provider scholarship program.
Sec. 3209. Annual report.
Sec. 3210. Authorization of appropriations.
Chapter 2--Strengthening Quality Through the Child Care and Development 
                              Block Grant

Sec. 3231. State plan.
Sec. 3232. Child care quality improvements.
Sec. 3233. Administration and enforcement.
          Chapter 3--Child Care Centers in Federal Facilities

Sec. 3241. Short title.
Sec. 3242. Definitions.
Sec. 3243. Providing quality child care in Federal facilities.
Sec. 3244. Federal child care evaluation.
Sec. 3245. Child care services for Federal employees.
Sec. 3246. Miscellaneous provisions relating to child care provided by 
                            Federal agencies.
                       Chapter 4--Early Learning

Sec. 3251. Amendments to the Early Learning Opportunities Act.
               Chapter 5--Child Care Facilities Financing

Sec. 3261. Short title.
Sec. 3262. Technical and financial assistance grants.
             Subtitle D--Head Start Access and Improvement

Sec. 3301. Authorization of appropriations.
                   Subtitle E--Education Improvements

    Chapter 1--Increasing Access to Quality Prekindergarten Programs

Sec. 3401. Prekindergarten programs.
              Chapter 2--Expanding Early Literacy Efforts

Sec. 3411. Early literacy.
Sec. 3412. Technical amendments.
            Chapter 3--Increasing the Availability of Books

Sec. 3421. Short title.
Sec. 3422. Findings.
Sec. 3423. Definitions.
Sec. 3424. Grants to State agencies.
Sec. 3425. Contracts to child care resource and referral agencies.
Sec. 3426. Use of funds.
Sec. 3427. Report to Congress.
Sec. 3428. Special postage stamps for child literacy.
Sec. 3429. Authorization of appropriations.
                  Chapter 4--Increased Accountability

Sec. 3431. Low achieving children meet high standards.
Sec. 3432. Purpose and intent.
Sec. 3433. Authorization of appropriations.
Sec. 3434. Reservation and allocation.
Sec. 3435. State plans.
Sec. 3436. Local educational agency plans.
Sec. 3437. Targeted assistance schools.
Sec. 3438. School choice.
Sec. 3439. Assessment and local educational agency and school 
                            improvement.
Sec. 3440. State assistance for school support and improvement.
Sec. 3441. Academic achievement awards program; improving State 
                            assessments.
Sec. 3442. Parental involvement changes.
Sec. 3443. Professional development.
Sec. 3444. Requirements; records.
Sec. 3445. Coordination requirements.
 subchapter a--amendments to title ii of the elementary and secondary 
                         education act of 1965
Sec. 3461. subchapter b--national board certification program
Sec. 3471. Purpose.
Sec. 3472. Grants to expand participation in the national board 
          subchapter c--student loan forgiveness for teachers
Sec. 3481. Student loan forgiveness for teachers.
                subchapter a--school modernization bonds
Sec. 3501. Short title.
Sec. 3502. Expansion of incentives for public schools.
Sec. 3503. Application of certain labor standards on construction 
                            projects financed under public school 
           subchapter b--schools as centers of the community
Sec. 3551. Findings.
Sec. 3552. Purpose.
Sec. 3553. Program authorized.
Sec. 3554. Use of funds.
Sec. 3555. Applications.
Sec. 3556. Authorization of appropriations.
            Chapter 7--Child Opportunity Zone Family Centers

Sec. 3571. Child opportunity zone family centers.
         TITLE IV--FAIR START--LIFTING CHILDREN OUT OF POVERTY

               Subtitle A--Expanding the Child Tax Credit

Sec. 4001. Expansion of child tax credit; credit made partially 
                            refundable.
         Subtitle B--Strengthening the Earned Income Tax Credit

Sec. 4101. Short title.
Sec. 4102. Increased earned income tax credit for 2 or more qualifying 
                            children.
Sec. 4103. Simplification of definition of earned income.
Sec. 4104. Simplification of definition of child dependent.
Sec. 4105. Other modifications to earned income tax credit.
                  Subtitle C--Marriage Penalty Relief

Sec. 4201. Marriage penalty relief for earned income credit.
          Subtitle D--Expanding the Dependent Care Tax Credit

Sec. 4301. Dependent care tax credit.
    TITLE V--FAIR START--SUPPORT TO PROMOTE WORK AND REDUCE POVERTY

                   Subtitle A--Gateways Grant Program

Sec. 5001. Gateways grant program.
                 Subtitle B--Support From Both Parents

                 Chapter 1--Child Support Distribution

Sec. 5101. Shosubchapter a--distribution of child support
Sec. 5111. Distribution of child support collected by States on behalf 
                            of children receiving certain welfare 
      subchapter b--review and adjustment of child support orders
Sec. 5116. Mandatory review and modification of child support orders 
  subchapter c--demonstrations of expanded information and enforcement
Sec. 5121. Guidelines for involvement of public non-IV-D child support 
                            enforcement agencies in child support 
                            enforcement.
Sec. 5122. Demonstrations involving establishment and enforcement of 
                            child support obligations by public non-IV-
                            D child support enforcement agencies.
Sec. 5123. GAO report to Congress on private child support enforcement 
                            agencies.
Sec. 5124. Effectivsubchapter d--expanded enforcement
Sec. 5126. Decrease in amount of child support arrearage triggering 
                            passport denial.
Sec. 5127. Use of tax refund intercept program to collect past-due 
                            child support on behalf of children who are 
                            not minors.
Sec. 5128. Garnishment of compensation paid to veterans for service-
                            connected disabilities in order to enforce 
                      subchapter e--miscellaneousions.
Sec. 5131. Report on undistributed child support payments.
Sec. 5132. Use of new hire information to assist in administration of 
                            unemployment compensation programs.
Sec. 5133. Immigration provisions.
Sec. 5134. Correction of errors in conforming amendments in the 
                            welfare-to-work and child support 
                            amendments of 1999.
Sec. 5135. Increase in payment rate to States for expenditures for 
                            short-term training of staff of certain 
                            child welfare agencies.
Sec. 5136. Effective date.
            Chapter 2--Child Support Demonstration Programs-

Sec. 5141. Short title.
Sec. 5142. Purposes.
Sec. 5143. Definitions.
Sec. 5144. Establishment of child support assurance demonstration 
                            projects.
           Subtitle C--Fair Wages and Unemployment Insurance

                      Chapter 1--Fair Minimum Wage

Sec. 5201. Short title.
Sec. 5202. Minimum wage.
Sec. 5203. Applicability of minimum wage to the Commonwealth of the 
                            Northern Mariana Islands.
     Chapter 2--Livable Wages for Employees Under Federal Contracts

Sec. 5211. Short title.
Sec. 5212. Findings.
Sec. 5213. Poverty level wage.
Sec. 5214. Effective date.
                   Chapter 3--Unemployment Insurance

Sec. 5221. Parity for part-time workers, fair counting of wages, and 
                            use of improved technology for making wage 
                            data available.
Sec. 5222. Ensuring unemployment compensation for individuals that are 
                            separated from employment due to domestic 
                            violence.
Sec. 5223. Loss of child care as good cause for leaving employment.
                Subtitle D--Jobs for Low-Income Parents

Sec. 5301. Disregard of months engaged in work for purposes of 5-year 
                            TANF assistance limit.
Sec. 5302. Strengthening TANF education and training requirements.
Sec. 5303. Addition of poverty reduction bonus to TANF.
Sec. 5304. Participation in workforce investment boards.
Sec. 5305. Clarification of TANF purpose.
Sec. 5306. Effective date.
                Subtitle E--Incentives to Serve Families

Sec. 5401. Development of model caseworker training materials.
Sec. 5402. Exception to limit on TANF administrative expenditures for 
                            caseworker bonuses and other State 
                            initiatives to eliminate barriers to work.
Sec. 5403. Strengthening of TANF individual responsibility plans.
Sec. 5404. Effective date.
                  Subtitle F--Addressing Work Barriers

Sec. 5501. Funding to access to jobs program.
Sec. 5502. Requirement to identify and provide services to address 
                            barriers to employment of TANF recipients.
Sec. 5503. State option to establish exceptions from time limit for 
                            receipt of TANF assistance based on severe 
                            barriers to employment.
Sec. 5504. Effective date.
              Subtitle G--Protection for Families in Need

Sec. 5601. Earn-back of months of TANF assistance.
Sec. 5602. Establishment of a fair conciliation process for families 
                            under TANF.
Sec. 5603. Effective date.
                    Subtitle H--TANF Reauthorization

Sec. 5701. Reauthorization of TANF State family assistance grants.
Sec. 5702. Prohibition on supplantation of TANF funds.
                          TITLE VI--FAIR START

             Subtitle A--Child and Adult Care Food Program

Sec. 6001. Participation of for-profit care centers in child and adult 
                            care food program.
Sec. 6002. Categorical eligibility requirements.
Sec. 6003. Increase in administrative reimbursement rates.
Sec. 6004. Program for at-risk school children.
                     Subtitle B--Food Stamp Program

Sec. 6101. Limited eligibility of food stamp benefits for qualified 
                            aliens.
Sec. 6102. Conforming food stamp and medicaid income definitions; 
                            simplified income calculations.
Sec. 6103. Prevention of hunger among families with children.
Sec. 6104. Encouragement of collection of child support.
Sec. 6105. Elimination of excess shelter expense deduction cap for 
                            families with high shelter costs.
Sec. 6106. Periodic redetermination of eligibility.
Sec. 6107. Transitional benefits option.
Sec. 6108. Improving State incentives to serve working families.
Sec. 6109. Authorization of appropriations for additional commodities 
                            under emergency food assistance program.
                     TITLE VII--FAIR START HOUSING

                     Subtitle A--Section 8 Vouchers

Sec. 7001. Rental assistance voucher program.
Sec. 7002. Voucher success fund.
           Subtitle B--National Affordable Housing Trust Fund

Sec. 7101. Purposes.
Sec. 7102. National Affordable Housing Trust Fund.
Sec. 7103. Administration of National Affordable Housing Trust Fund.
Sec. 7104. Regulations.
            Subtitle C--Housing Preservation Matching Grants

Sec. 7201. Short title.
Sec. 7202. Findings and purposes.
Sec. 7203. Definitions.
Sec. 7204. Authority.
Sec. 7205. Applications.
Sec. 7206. Use of grants.
Sec. 7207. Grant amount limitation.
Sec. 7208. Matching requirements.
Sec. 7209. Treatment of subsidy layering requirements.
Sec. 7210. Regulations.
Sec. 7211. Authorization of appropriations.
                         TITLE VIII--SAFE START

            Subtitle A--Promotion of Permanency for Children

Sec. 8001. Reimbursement for preventive, protective, crisis, 
                            permanency, independent living, and post-
                            permanency services and activities.
Sec. 8002. Child and family service plan and case reviews.
Sec. 8003. Kinship guardianship assistance payments for children.
Sec. 8004. Elimination of financial eligibility requirement for foster 
                            care maintenance and adoption assistance 
                            payments.
Sec. 8005. Establishment of uniform Federal matching rate.
Sec. 8006. Elimination of disincentive for foster parents to adopt 
                            children with special needs who have been 
                            in their foster care.
Sec. 8007. Extension of adoption assistance payments.
Sec. 8008. Reimbursement for room and board in foster family homes, 
                            child care institutions, or supervised 
                            living arrangements for young people aging 
                            out of foster care.
Sec. 8009. Funding for vouchers to assist young people aging out of 
                            foster care make the transition to self-
                            sufficiency.
Sec. 8010. Additional accountability.
Sec. 8011. Authority of Indian tribes to receive Federal funds for 
                            foster care and adoption assistance.
             Subtitle B--Promoting Safe and Stable Families

Sec. 8101. Expansion of the promoting safe and stable families program.
                Subtitle C--Social Services Block Grant

Sec. 8201. Short title.
Sec. 8202. Findings.
Sec. 8202. Restoration of authority to transfer up to 10 percent of 
                            TANF fund to the social services block 
                            grant.
Sec. 8204. Restoration of funds for the social services block grant.
Sec. 8205. Requirement to submit annual report on State activities.
     Subtitle D--Child Protection and Alcohol and Drug Partnerships

Sec. 8301. Short title.
Sec. 8302. Child protection/alcohol and drug partnerships for children.
                     Subtitle E--Permanency Grants

Sec. 8401. Establishment of permanency grants program.
   Subtitle F--Addressing the Needs of Children Exposed to Domestic 
                                Violence

Sec. 8501. Purposes.
Sec. 8502. Definitions.
Sec. 8503. Grants to address the needs of children who are exposed to 
                            domestic violence.
Sec. 8504. Training and coordination of child welfare agencies and 
                            domestic violence service providers.
Sec. 8505. Research and data collection on the impact of domestic 
                            violence on children.
Sec. 8506. Grants to schools and early education and child care 
                            programs for prevention of violence against 
                            women.
Sec. 8507. Training of law enforcement and court personnel.
 Subtitle G--Enhancing Healthy Emotional Development in Young Children

Sec. 8601. Enhancing healthy emotional development.
              TITLE IX--SUCCESSFUL TRANSITION TO ADULTHOOD

          Subtitle A--21st Century Community Learning Centers

Sec. 9001. Centers.
                     Subtitle B--Youth Development

         Chapter 1--Short Title; Policy; Findings; Definitions

Sec. 9101. Short title.
Sec. 9102. A national youth policy.
Sec. 9103. Findings.
Sec. 9104. Definitions.
            Chapter 2--Coordination Of National Youth Policy

Sec. 9111. Office on National Youth Policy.
Sec. 9112. Council on National Youth Policy.
           Chapter 3--Grants For State and Community Programs

Sec. 9121. Purpose.
Sec. 9122. Authorization of appropriations.
Sec. 9123. Allotments to States.
Sec. 9124. State agencies and planning and mobilization areas.
Sec. 9125. State plans.
Sec. 9126. Distribution of funds for State activities and local 
                            allocations.
Sec. 9127. Community boards and area agencies on youth.
Sec. 9128. Area plans.
Sec. 9129. Grants and contracts to eligible entities.
Sec. 9130. Eligible entities.
Sec. 9131. Applications.
Sec. 9132. Youth development programs.
             Chapter 4--Training, Research, and Evaluation

Sec. 9141. Purpose.
Sec. 9142. Grants and contracts.
Sec. 9143. Authorization of appropriations.
                       Subtitle C--Youth Programs

Sec. 9201. Americorps.
Sec. 9202. Youthbuild program.
Sec. 9203. Youth workforce investment activities.
Sec. 9204. Transition training for reintegrating youth offenders.
                 TITLE X--SAFE START--JUVENILE JUSTICE

       Subtitle A--Juvenile Delinquency Prevention and Protection

Sec. 10001. Definition of juvenile.
Sec. 10002. State plan allocation.
Sec. 10003. State plan requirements.
Sec. 10004. Repeal of part H.
Sec. 10005. Funding of Federal assistance for State and local programs.
Sec. 10006. Funding of grants for prevention programs.
Sec. 10007. Authorization of appropriations.
               Subtitle B--Mental Health Juvenile Justice

Sec. 10101. Short title.
Sec. 10102. Training of justice system personnel.
Sec. 10103. Block grant funding for treatment and diversion programs.
Sec. 10104. Initiative for comprehensive, intersystem programs.
Sec. 10105. Federal Coordinating Council on the Criminalization of 
                            Juveniles With Mental Disorders.
Sec. 10106. Mental health screening and treatment for prisoners.
Sec. 10107. Inapplicability of amendments.
            Subtitle C--Juvenile Justice and Accountability

Sec. 10201. Short title.
Sec. 10202. Grant program.
Sec. 10203. Increase in funding for title III of the JJDPA.
Sec. 10204. Funding for the services for youthful offenders.
Sec. 10205. Authorization for the Juvenile Justice and Delinquency 
                            Prevention Act of 1974.
                    TITLE XI--SAFE START--GUN SAFETY

               Subtitle A--Closing the Gun Show Loophole

Sec. 11001. Extension of Brady background checks to gun shows.
                     Subtitle B--Child Safety Locks

Sec. 11101. Requirement of child handgun safety locks.
                 Subtitle C--Unlawful Weapons Transfers

Sec. 11201. Unlawful weapons transfers to juveniles.
         Subtitle D--Large Capacity Ammunition Feeding Devices

Sec. 11301. Ban on importing large capacity ammunition feeding devices.
                  Subtitle E--Enforcement of Gun Laws

Sec. 11401. Enhance enforcement of gun violence laws. 
                       Subtitle F--Miscellaneous

Sec. 11501. Study of marketing practices of the firearms industry.
Sec. 11502. Regulation of Internet firearms transfers.
Sec. 11503. Reduction of gun trafficking.
                        TITLE XII--MISCELLANEOUS

Sec. 12001. Advisory Committee on Private Sector Support for Children 
                            and Families.
Sec. 12002. Improvement of data collection and reporting regarding 
                            children and families.

          TITLE I--HEALTHY START--CHILDREN'S HEALTH INSURANCE

                Subtitle A--Children's Health Insurance

SEC. 1001. MEDIKIDS HEALTH INSURANCE.

    (a) Short Title of Title.--This title may be cited as the 
``MediKids Health Insurance Act of 2001''.
    (b) Findings.--Congress finds the following:
            (1) More than 11 million American children are uninsured.
            (2) Children who are uninsured receive less medical care 
        and less preventive care and have a poorer level of health, 
        which result in lifetime costs to themselves and to the entire 
        American economy.
            (3) Although SCHIP and Medicaid are successfully extending 
        a health coverage safety net to a growing portion of the 
        vulnerable low-income population of uninsured children, we now 
        see that they alone cannot achieve 100 percent health insurance 
        coverage for our nation's children due to inevitable gaps 
        during outreach and enrollment, fluctuations in eligibility, 
        and variations in access to private insurance at all income 
        levels.
            (4) As all segments of our society continue to become more 
        and more transient, with many changes in employment over the 
        working lifetime of parents, the need for a reliable safety net 
        of health insurance which follows children across State lines, 
        already a major problem for the children of migrant and 
        seasonal farmworkers, will become a major concern for all 
        families in the United States.
            (5) The Medicare program has successfully evolved over the 
        years to provide a stable, universal source of health insurance 
        for the nation's disabled and those over age 65, and therefore 
        provides a tested model for designing a program to reach out to 
        America's children.
            (6) The problem of insuring 100 percent of all American 
        children could be gradually solved by automatically enrolling 
        all children born after December 31, 2002, in a program modeled 
        after Medicare (and to be known as ``MediKids''), and allowing 
        those children to be transferred into other equivalent or 
        better insurance programs, including either private insurance, 
        SCHIP, or Medicaid, if they are eligible to do so, but 
        maintaining the child's default enrollment in MediKids for any 
        times when the child's access to other sources of insurance is 
        lost.
            (7) A family's freedom of choice to use other insurers to 
        cover children would not be interfered with in any way, and 
        children eligible for SCHIP and Medicaid would continue to be 
        enrolled in those programs, but the underlying safety net of 
        MediKids would always be available to cover any gaps in 
        insurance due to changes in medical condition, employment, 
        income, or marital status, or other changes affecting a child's 
        access to alternate forms of insurance.
            (8) The MediKids program can be administered without 
        impacting the finances or status of the existing Medicare 
        program.
            (9) The MediKids benefit package can be tailored to the 
        special needs of children and updated over time.
            (10) The financing of the program can be administered 
        without difficulty by a yearly payment of affordable premiums 
        through a family's tax filing (or adjustment of a family's 
        earned income tax credit).
            (11) The cost of the program will gradually rise as the 
        number of children using MediKids as the insurer of last resort 
        increases, and a future Congress always can accelerate or slow 
        down the enrollment process as desired, while the societal 
        costs for emergency room usage, lost productivity and work 
        days, and poor health status for the next generation of 
        Americans will decline.
            (12) Over time 100 percent of American children will always 
        have basic health insurance, and we can therefore expect a 
        healthier, more equitable, and more productive society.

SEC. 1002. BENEFITS FOR ALL CHILDREN BORN AFTER 2002.

    (a) In General.--The Social Security Act is amended by adding at 
the end the following new title:

                     ``TITLE XXII--MEDIKIDS PROGRAM

``SEC. 2201. ELIGIBILITY.

    ``(a) Eligibility of Individuals Born After December 31, 2002; All 
Children Under 23 Years of Age in Sixth Year.--An individual who meets 
the following requirements with respect to a month is eligible to 
enroll under this title with respect to such month:
            ``(1) Age.--
                    ``(A) First year.--During the first year in which 
                this title is effective, the individual has not 
                attained 6 years of age.
                    ``(B) Second year.--During the second year in which 
                this title is effective, the individual has not 
                attained 11 years of age.
                    ``(C) Third year.--During the third year in which 
                this title is effective, the individual has not 
                attained 16 years of age.
                    ``(D) Fourth year.--During the fourth year in which 
                this title is effective, the individual has not 
                attained 21 years of age.
                    ``(E) Fifth and subsequent years.--During the fifth 
                year in which this title is effective and each 
                subsequent year, the individual has not attained 23 
                years of age.
            ``(2) Citizenship.--The individual is a citizen or national 
        of the United States or is lawfully residing in the United 
        States.
    ``(b) Enrollment Process.--An individual may enroll in the program 
established under this title only in such manner and form as may be 
prescribed by regulations, and only during an enrollment period 
prescribed by the Secretary consistent with the provisions of this 
section. Such regulations shall provide a process under which--
            ``(1) individuals who are born in the United States after 
        December 31, 2002, are deemed to be enrolled at the time of 
        birth and a parent or guardian of such an individual is 
        permitted to pre-enroll in the month prior to the expected 
        month of birth;
            ``(2) individuals who are born outside the United States 
        after such date and who become eligible to enroll by virtue of 
        immigration into (or an adjustment of immigration status in) 
        the United States are deemed enrolled at the time of entry or 
        adjustment of status;
            ``(3) eligible individuals may otherwise be enrolled at 
        such other times and manner as the Secretary shall specify, 
        including the use of outstationed eligibility sites as 
        described in section 1902(a)(55)(A) and the use of presumptive 
        eligibility provisions like those described in section 1920A; 
        and
            ``(4) at the time of automatic enrollment of a child, the 
        Secretary provides for issuance to a parent or custodian of the 
        individual a card evidencing coverage under this title and for 
        a description of such coverage.
The provisions of section 1837(h) apply with respect to enrollment 
under this title in the same manner as they apply to enrollment under 
part B of title XVIII.
    ``(c) Date Coverage Begins.--
            ``(1) In general.--The period during which an individual is 
        entitled to benefits under this title shall begin as follows, 
        but in no case earlier than January 1, 2003:
                    ``(A) In the case of an individual who is enrolled 
                under paragraph (1) or (2) of subsection (b), the date 
                of birth or date of obtaining appropriate citizenship 
                or immigration status, as the case may be.
                    ``(B) In the case of an another individual who 
                enrolls (including pre-enrolls) before the month in 
                which the individual satisfies eligibility for 
                enrollment under subsection (a), the first day of such 
                month of eligibility.
                    ``(C) In the case of an another individual who 
                enrolls during or after the month in which the 
                individual first satisfies eligibility for enrollment 
                under such subsection, the first day of the following 
                month.
            ``(2) Authority to provide for partial months of 
        coverage.--Under regulations, the Secretary may, in the 
        Secretary's discretion, provide for coverage periods that 
        include portions of a month in order to avoid lapses of 
        coverage.
            ``(3) Limitation on payments.--No payments may be made 
        under this title with respect to the expenses of an individual 
        enrolled under this title unless such expenses were incurred by 
        such individual during a period which, with respect to the 
        individual, is a coverage period under this section.
    ``(d) Expiration of Eligibility.--An individual's coverage period 
under this part shall continue until the individual's enrollment has 
been terminated because the individual no longer meets the requirements 
of subsection (a) (whether because of age or change in immigration 
status).
    ``(e) Entitlement to MediKids Benefits for Enrolled Individuals.--
An individual enrolled under this section is entitled to the benefits 
described in section 2202.
    ``(f) Low-Income Information.--At the time of enrollment of a child 
under this title, the Secretary shall make an inquiry as to whether or 
not the family income of the family that includes the child is less 
than 150 percent of the poverty line for a family of the size involved. 
If the family income is below such level, the Secretary shall encode in 
the identification card issued in connection with eligibility under 
this title a code indicating such fact. The Secretary also shall 
provide for a toll-free telephone line at which providers can verify 
whether or not such a child is in a family the income of which is below 
such level.
    ``(g) Construction.--Nothing in this title shall be construed as 
requiring (or preventing) an individual who is enrolled under this 
section from seeking medical assistance under a State medicaid plan 
under title XIX or child health assistance under a State child health 
plan under title XXI.

``SEC. 2202. BENEFITS.

    ``(a) Secretarial Specification of Benefit Package.--
            ``(1) In general.--The Secretary shall specify the benefits 
        to be made available under this title consistent with the 
        provisions of this section and in a manner designed to meet the 
        health needs of children.
            ``(2) Updating.--The Secretary shall update the 
        specification of benefits over time to ensure the inclusion of 
        age-appropriate benefits as the enrollee population gets older.
            ``(3) Annual updating.--The Secretary shall establish 
        procedures for the annual review and updating of such benefits 
        to account for changes in medical practice, new information 
        from medical research, and other relevant developments in 
        health science.
            ``(4) Input.--The Secretary shall seek the input of the 
        pediatric community in specifying and updating such benefits.
            ``(5) Limitation on updating.--In no case shall updating of 
        benefits under this subsection result in a failure to provide 
        benefits required under subsection (b).
    ``(b) Inclusion of Certain Benefits.--
            ``(1) Medicare core benefits.--Such benefits shall include 
        (to the extent consistent with other provisions of this 
        section) at least the same benefits (including coverage, 
        access, availability, duration, and beneficiary rights) that 
        are available under parts A and B of title XVIII.
            ``(2) All required medicaid benefits.--Such benefits shall 
        also include all items and services for which medical 
        assistance is required to be provided under section 
        1902(a)(10)(A) to individuals described in such section, 
        including early and periodic screening, diagnostic services, 
        and treatment services.
            ``(3) Inclusion of prescription drugs.--Such benefits also 
        shall include (as specified by the Secretary) prescription 
        drugs and biologicals.
            ``(4) Cost-sharing.--
                    ``(A) In general.--Subject to subparagraph (B), 
                such benefits also shall include the cost-sharing (in 
                the form of deductibles, coinsurance, and copayments) 
                applicable under title XVIII with respect to comparable 
                items and services, except that no cost-sharing shall 
                be imposed with respect to early and periodic screening 
                and diagnostic services included under paragraph (2).
                    ``(B) No cost-sharing for lowest income children.--
                Such benefits shall not include any cost-sharing for 
                children in families the income of which (as determined 
                for purposes of section 1905(p)) does not exceed 150 
                percent of the official income poverty line (referred 
                to in such section) applicable to a family of the size 
                involved.
                    ``(C) Refundable credit for cost-sharing for other 
                low-income children.--For a refundable credit for cost-
                sharing in the case of children in certain families, 
                see section 35 of the Internal Revenue Code of 1986.
    ``(c) Payment Schedule.--The Secretary, with the assistance of the 
Medicare Payment Advisory Commission, shall develop and implement a 
payment schedule for benefits covered under this title. To the extent 
feasible, such payment schedule shall be consistent with comparable 
payment schedules and reimbursement methodologies applied under parts A 
and B of title XVIII.
    ``(d) Input.--The Secretary shall specify such benefits and payment 
schedules only after obtaining input from appropriate child health 
providers and experts.
    ``(e) Enrollment in Health Plans.--The Secretary shall provide for 
the offering of benefits under this title through enrollment in a 
health benefit plan that meets the same (or similar) requirements as 
the requirements that apply to Medicare+Choice plans under part C of 
title XVIII. In the case of individuals enrolled under this title in 
such a plan, the Medicare+Choice capitation rate described in section 
1853(c) shall be adjusted in an appropriate manner to reflect 
differences between the population served under this title and the 
population under title XVIII.

``SEC. 2203. PREMIUMS.

    ``(a) Amount of Monthly Premiums.--
            ``(1) In general.--The Secretary shall, during September of 
        each year (beginning with 2002), establish a monthly MediKids 
        premium. Subject to paragraph (2), the monthly MediKids premium 
        for a year is equal to \1/12\ of the annual premium rate 
        computed under subsection (b).
            ``(2) Elimination of monthly premium for demonstration of 
        equivalent coverage (including coverage under low-income 
        programs).--The amount of the monthly premium imposed under 
        this section for an individual for a month shall be zero in the 
        case of an individual who demonstrates to the satisfaction of 
        the Secretary that the individual has basic health insurance 
        coverage for that month the actuarial value of which, as 
        determined by the Secretary, is at least actuarially equivalent 
        to the benefits available under this title. For purposes of the 
        previous sentence enrollment in a medicaid plan under title 
        XIX, a State child health insurance plan under title XXI, or 
        under the medicare program under title XVIII is deemed to 
        constitute basic health insurance coverage described in such 
        sentence.
    ``(b) Annual Premium.--
            ``(1) National, per capita average.--The Secretary shall 
        estimate the average, annual per capita amount that would be 
        payable under this title with respect to individuals residing 
        in the United States who meet the requirement of section 
        2201(a)(1) as if all such individuals were eligible for (and 
        enrolled) under this title during the entire year (and assuming 
        that section 1862(b)(2)(A)(i) did not apply).
            ``(2) Annual premium.--Subject to subsection (d), the 
        annual premium under this subsection for months in a year is 
        equal to 25 percent of the average, annual per capita amount 
        estimated under paragraph (1) for the year.
    ``(c) Payment of Monthly Premium.--
            ``(1) Period of payment.--In the case of an individual who 
        participates in the program established by this title, subject 
        to subsection (d), the monthly premium shall be payable for the 
        period commencing with the first month of the individual's 
        coverage period and ending with the month in which the 
        individual's coverage under this title terminates.
            ``(2) Collection through tax return.--For provisions 
        providing for the payment of monthly premiums under this 
        subsection, see section 59B of the Internal Revenue Code of 
        1986.
            ``(3) Protections against fraud and abuse.--The Secretary 
        shall develop, in coordination with States and other health 
        insurance issuers, administrative systems to ensure that claims 
        which are submitted to more than one payor are coordinated and 
        duplicate payments are not made.
    ``(d) Reduction in Premium for Certain Low-Income Families.--For 
provisions reducing the premium under this section for certain low-
income families, see section 59B(c) of the Internal Revenue Code of 
1986.

``SEC. 2204. MEDIKIDS TRUST FUND.

    ``(a) Establishment of Trust Fund.--
            ``(1) In general.--There is hereby created on the books of 
        the Treasury of the United States a trust fund to be known as 
        the `MediKids Trust Fund' (in this section referred to as the 
        `Trust Fund'). The Trust Fund shall consist of such gifts and 
        bequests as may be made as provided in section 201(i)(1) and 
        such amounts as may be deposited in, or appropriated to, such 
        fund as provided in this title.
            ``(2) Premiums.--Premiums collected under section 2203 
        shall be transferred to the Trust Fund.
    ``(b) Incorporation of Provisions.--
            ``(1) In general.--Subject to paragraph (2), subsections 
        (b) through (i) of section 1841 shall apply with respect to the 
        Trust Fund and this title in the same manner as they apply with 
        respect to the Federal Supplementary Medical Insurance Trust 
        Fund and part B, respectively.
            ``(2) Miscellaneous references.--In applying provisions of 
        section 1841 under paragraph (1)--
                    ``(A) any reference in such section to `this part' 
                is construed to refer to title XXII;
                    ``(B) any reference in section 1841(h) to section 
                1840(d) and in section 1841(i) to sections 1840(b)(1) 
                and 1842(g) are deemed references to comparable 
                authority exercised under this title;
                    ``(C) payments may be made under section 1841(g) to 
                the Trust Funds under sections 1817 and 1841 as 
                reimbursement to such funds for payments they made for 
                benefits provided under this title; and
                    ``(D) the Board of Trustees of the MediKids Trust 
                Fund shall be the same as the Board of Trustees of the 
                Federal Supplementary Medical Insurance Trust Fund.

``SEC. 2205. OVERSIGHT AND ACCOUNTABILITY.

    ``(a) Through Annual Reports of Trustees.--The Board of Trustees of 
the MediKids Trust Fund under section 2204(b)(1) shall report on an 
annual basis to Congress concerning the status of the Trust Fund and 
the need for adjustments in the program under this title to maintain 
financial solvency of the program under this title.
    ``(b) Periodic GAO Reports.--The Comptroller General of the United 
States shall periodically submit to Congress reports on the adequacy of 
the financing of coverage provided under this title. The Comptroller 
General shall include in such report such recommendations for 
adjustments in such financing and coverage as the Comptroller General 
deems appropriate in order to maintain financial solvency of the 
program under this title.

``SEC. 2206. INCLUSION OF CARE COORDINATION SERVICES.

    ``(a) In General.--
            ``(1) Program authority.--The Secretary, beginning in 2003, 
        may implement a care coordination services program in 
        accordance with the provisions of this section under which, in 
        appropriate circumstances, eligible individuals may elect to 
        have health care services covered under this title managed and 
        coordinated by a designated care coordinator.
            ``(2) Administration by contract.--The Secretary may 
        administer the program under this section through a contract 
        with an appropriate program administrator.
            ``(3) Coverage.--Care coordination services furnished in 
        accordance with this section shall be treated under this title 
        as if they were included in the definition of medical and other 
        health services under section 1861(s) and benefits shall be 
        available under this title with respect to such services 
        without the application of any deductible or coinsurance.
    ``(b) Eligibility Criteria; Identification and Notification of 
Eligible Individuals.--
            ``(1) Individual eligibility criteria.--The Secretary shall 
        specify criteria to be used in making a determination as to 
        whether an individual may appropriately be enrolled in the care 
        coordination services program under this section, which shall 
        include at least a finding by the Secretary that for cohorts of 
        individuals with characteristics identified by the Secretary, 
        professional management and coordination of care can reasonably 
        be expected to improve processes or outcomes of health care and 
        to reduce aggregate costs to the programs under this title.
            ``(2) Procedures to facilitate enrollment.--The Secretary 
        shall develop and implement procedures designed to facilitate 
        enrollment of eligible individuals in the program under this 
        section.
    ``(c) Enrollment of Individuals.--
            ``(1) Secretary's determination of eligibility.--The 
        Secretary shall determine the eligibility for services under 
        this section of individuals who are enrolled in the program 
        under this section and who make application for such services 
        in such form and manner as the Secretary may prescribe.
            ``(2) Enrollment period.--
                    ``(A) Effective date and duration.--Enrollment of 
                an individual in the program under this section shall 
                be effective as of the first day of the month following 
                the month in which the Secretary approves the 
                individual's application under paragraph (1), shall 
                remain in effect for one month (or such longer period 
                as the Secretary may specify), and shall be 
                automatically renewed for additional periods, unless 
                terminated in accordance with such procedures as the 
                Secretary shall establish by regulation. Such 
                procedures shall permit an individual to disenroll for 
                cause at any time and without cause at re-enrollment 
                intervals.
                    ``(B) Limitation on reenrollment.--The Secretary 
                may establish limits on an individual's eligibility to 
                reenroll in the program under this section if the 
                individual has disenrolled from the program more than 
                once during a specified time period.
    ``(d) Program.--The care coordination services program under this 
section shall include the following elements:
            ``(1) Basic care coordination services.--
                    ``(A) In general.--Subject to the cost-
                effectiveness criteria specified in subsection (b)(1), 
                except as otherwise provided in this section, enrolled 
                individuals shall receive services described in section 
                1905(t)(1) and may receive additional items and 
                services as described in subparagraph (B).
                    ``(B) Additional benefits.--The Secretary may 
                specify additional benefits for which payment would not 
                otherwise be made under this title that may be 
                available to individuals enrolled in the program under 
                this section (subject to an assessment by the care 
                coordinator of an individual's circumstance and need 
                for such benefits) in order to encourage enrollment in, 
                or to improve the effectiveness of, such program.
            ``(2) Care coordination requirement.--Notwithstanding any 
        other provision of this title, the Secretary may provide that 
        an individual enrolled in the program under this section may be 
        entitled to payment under this title for any specified health 
        care items or services only if the items or services have been 
        furnished by the care coordinator, or coordinated through the 
        care coordination services program. Under such provision, the 
        Secretary shall prescribe exceptions for emergency medical 
        services as described in section 1852(d)(3), and other 
        exceptions determined by the Secretary for the delivery of 
        timely and needed care.
    ``(e) Care Coordinators.--
            ``(1) Conditions of participation.--In order to be 
        qualified to furnish care coordination services under this 
        section, an individual or entity shall--
                    ``(A) be a health care professional or entity 
                (which may include physicians, physician group 
                practices, or other health care professionals or 
                entities the Secretary may find appropriate) meeting 
                such conditions as the Secretary may specify;
                    ``(B) have entered into a care coordination 
                agreement; and
                    ``(C) meet such criteria as the Secretary may 
                establish (which may include experience in the 
                provision of care coordination or primary care 
                physician's services).
            ``(2) Agreement term; payment.--
                    ``(A) Duration and renewal.--A care coordination 
                agreement under this subsection shall be for one year 
                and may be renewed if the Secretary is satisfied that 
                the care coordinator continues to meet the conditions 
                of participation specified in paragraph (1).
                    ``(B) Payment for services.--The Secretary may 
                negotiate or otherwise establish payment terms and 
                rates for services described in subsection (d)(1).
                    ``(C) Liability.--Case coordinators shall be 
                subject to liability for actual health damages which 
                may be suffered by recipients as a result of the care 
                coordinator's decisions, failure or delay in making 
                decisions, or other actions as a care coordinator.
                    ``(D) Terms.--In addition to such other terms as 
                the Secretary may require, an agreement under this 
                section shall include the terms specified in 
                subparagraphs (A) through (C) of section 1905(t)(3).

``SEC. 2207. ADMINISTRATION AND MISCELLANEOUS.

    ``(a) In General.--Except as otherwise provided in this title--
            ``(1) the Secretary shall enter into appropriate contracts 
        with providers of services, other health care providers, 
        carriers, and fiscal intermediaries, taking into account the 
        types of contracts used under title XVIII with respect to such 
        entities, to administer the program under this title;
            ``(2) individuals enrolled under this title shall be 
        treated for purposes of title XVIII as though the individual 
        were entitled to benefits under part A and enrolled under part 
        B of such title;
            ``(3) benefits described in section 2202 that are payable 
        under this title to such individuals shall be paid in a manner 
        specified by the Secretary (taking into account, and based to 
        the greatest extent practicable upon, the manner in which they 
        are provided under title XVIII);
            ``(4) provider participation agreements under title XVIII 
        shall apply to enrollees and benefits under this title in the 
        same manner as they apply to enrollees and benefits under title 
        XVIII; and
            ``(5) individuals entitled to benefits under this title may 
        elect to receive such benefits under health plans in a manner, 
        specified by the Secretary, similar to the manner provided 
        under part C of title XVIII.
    ``(b) Coordination With Medicaid and SCHIP.--Notwithstanding any 
other provision of law, individuals entitled to benefits for items and 
services under this title who also qualify for benefits under title XIX 
or XXI or any other Federally funded program may continue to qualify 
and obtain benefits under such other title or program, and in such case 
such an individual shall elect either--
            ``(1) such other title or program to be primary payor to 
        benefits under this title, in which case no benefits shall be 
        payable under this title and the monthly premium under section 
        2203 shall be zero; or
            ``(2) benefits under this title shall be primary payor to 
        benefits provided under such program or title, in which case 
        the Secretary shall enter into agreements with States as may be 
        appropriate to provide that, in the case of such individuals, 
        the benefits under titles XIX and XXI or such other program 
        (including reduction of cost-sharing) are provided on a `wrap-
        around' basis to the benefits under this title.''.
    (b) Conforming Amendments to Social Security Act Provisions.--
            (1) Section 201(i)(1) of the Social Security Act (42 U.S.C. 
        401(i)(1)) is amended by striking ``or the Federal 
        Supplementary Medical Insurance Trust Fund'' and inserting 
        ``the Federal Supplementary Medical Insurance Trust Fund, and 
        the MediKids Trust Fund''.
            (2) Section 201(g)(1)(A) of such Act (42 U.S.C. 
        401(g)(1)(A)) is amended by striking `` and the Federal 
        Supplementary Medical Insurance Trust Fund established by title 
        XVIII'' and inserting ``, the Federal Supplementary Medical 
        Insurance Trust Fund, and the MediKids Trust Fund established 
        by title XVIII''.
            (3) Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) is 
        amended--
                    (A) in paragraph (1), by striking ``and (7)'' and 
                inserting ``, (7), and (8)'', and
                    (B) by adding at the end the following:
            ``(8) Adjustment for medikids.--In applying this subsection 
        with respect to individuals entitled to benefits under title 
        XXII, the Secretary shall provide for an appropriate adjustment 
        in the Medicare+Choice capitation rate as may be appropriate to 
        reflect differences between the population served under such 
        title and the population under parts A and B.''.
    (c) Maintenance of Medicaid Eligibility and Benefits for 
Children.--
            (1) In general.--In order for a State to continue to be 
        eligible for payments under section 1903(a) of the Social 
        Security Act (42 U.S.C. 1396b(a))--
                    (A) the State may not reduce standards of 
                eligibility, or benefits, provided under its State 
                medicaid plan under title XIX of the Social Security 
                Act or under its State child health plan under title 
                XXI of such Act for individuals under 23 years of age 
                below such standards of eligibility, and benefits, in 
                effect on the date of the enactment of this Act; and
                    (B) the State shall demonstrate to the satisfaction 
                of the Secretary of Health and Human Services that any 
                savings in State expenditures under title XIX or XXI of 
                the Social Security Act that results from children from 
                enrolling under title XXII of such Act shall be used in 
                a manner that improves services to beneficiaries under 
                title XIX of such Act, such as through increases in 
                provider payment rates, expansion of eligibility, 
                improved nurse and nurse aide staffing and improved 
                inspections of nursing facilities, and coverage of 
                additional services.
            (2) MediKids as primary payor.--In applying title XIX of 
        the Social Security Act, the MediKids program under title XXII 
        of such Act shall be treated as a primary payor in cases in 
        which the election described in section 2207(b)(2) of such Act, 
        as added by subsection (a), has been made.
    (d) Expansion of MedPAC Membership to 19.--
            (1) In general.--Section 1805(c) of the Social Security Act 
        (42 U.S.C. 1395b-6(c)) is amended--
                    (A) in paragraph (1), by striking ``17'' and 
                inserting ``19''; and
                    (B) in paragraph (2)(B), by inserting ``experts in 
                children's health,'' after ``other health 
                professionals,''.
            (2) Initial terms of additional members.--
                    (A) In general.--For purposes of staggering the 
                initial terms of members of the Medicare Payment 
                Advisory Commission under section 1805(c)(3) of the 
                Social Security Act (42 U.S.C. 1395b-6(c)(3)), the 
                initial terms of the 2 additional members of the 
                Commission provided for by the amendment under 
                subsection (a)(1) are as follows:
                            (i) One member shall be appointed for 1 
                        year.
                            (ii) One member shall be appointed for 2 
                        years.
                    (B) Commencement of terms.--Such terms shall begin 
                on January 1, 2002.

SEC. 1003. MEDIKIDS PREMIUM.

    (a) General Rule.--Subchapter A of chapter 1 of the Internal 
Revenue Code of 1986 (relating to determination of tax liability) is 
amended by adding at the end the following new part:

                     ``PART VIII--MEDIKIDS PREMIUM

                              ``Sec. 59B. MediKids premium.

``SEC. 59B. MEDIKIDS PREMIUM.

    ``(a) Imposition of Tax.--In the case of an individual to whom this 
section applies, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a MediKids premium for the taxable year.
    ``(b) Individuals Subject to Premium.--
            ``(1) In general.--This section shall apply to an 
        individual if the taxpayer has a MediKid at any time during the 
        taxable year.
            ``(2) MediKid.--For purposes of this section, the term 
        `MediKid' means, with respect to a taxpayer, any individual 
        with respect to whom the taxpayer is required to pay a premium 
        under section 2203(c) of the Social Security Act for any month 
        of the taxable year.
    ``(c) Amount of Premium.--For purposes of this section, the 
MediKids premium for a taxable year is the sum of the monthly premiums 
under section 2203 of the Social Security Act for months in the taxable 
year.
    ``(d) Exceptions Based on Adjusted Gross Income.--
            ``(1) Exemption for very low-income taxpayers.--
                    ``(A) In general.--No premium shall be imposed by 
                this section on any taxpayer having an adjusted gross 
                income not in excess of the exemption amount.
                    ``(B) Exemption amount.--For purposes of this 
                paragraph, with respect to a family, the exemption 
                amount is the amount equal to 150 percent of the income 
                official poverty line (as defined by the Office of 
                Management and Budget, and revised annually in 
                accordance with section 673(2) of the Omnibus Budget 
                Reconciliation Act of 1981) applicable to a family of 
                the size involved.
                    ``(C) Phaseout of exemption.--In the case of a 
                taxpayer having an adjusted gross income which exceeds 
                the exemption amount but does not exceed twice the 
                exemption amount, the premium shall be the amount which 
                bears the same ratio to the premium which would (but 
                for this subparagraph) apply to the taxpayer as such 
                excess bears to the exemption amount.
            ``(2) Premium limited to 5 percent of adjusted gross 
        income.--In no event shall any taxpayer be required to pay a 
        premium under this section in excess of an amount equal to 5 
        percent of the taxpayer's adjusted gross income.
    ``(e) Coordination With Other Provisions.--
            ``(1) Not treated as medical expense.--For purposes of this 
        chapter, any premium paid under this section shall not be 
        treated as expense for medical care.
            ``(2) Not treated as tax for certain purposes.--The premium 
        paid under this section shall not be treated as a tax imposed 
        by this chapter for purposes of determining--
                    ``(A) the amount of any credit allowable under this 
                chapter, or
                    ``(B) the amount of the minimum tax imposed by 
                section 55.
            ``(3) Treatment under subtitle f.--For purposes of subtitle 
        F, the premium paid under this section shall be treated as if 
        it were a tax imposed by section 1.''.
    (b) Technical Amendments.--
            (1) Subsection (a) of section 6012 of such Code is amended 
        by inserting after paragraph (9) the following new paragraph:
            ``(10) Every individual liable for a premium under section 
        59B.''.
            (2) The table of parts for subchapter A of chapter 1 of 
        such Code is amended by adding at the end the following new 
        item:

                              ``Part VIII. MediKids premium.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after December 2002, in taxable years ending 
after such date.

SEC. 1004. REFUNDABLE CREDIT FOR COST-SHARING EXPENSES UNDER MEDIKIDS 
              PROGRAM.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. COST-SHARING EXPENSES UNDER MEDIKIDS PROGRAM.

    ``(a) Allowance of Credit.--In the case of an individual who has a 
MediKid (as defined in section 59B) at any time during the taxable 
year, there shall be allowed as a credit against the tax imposed by 
this subtitle an amount equal to 50 percent of the amount paid by the 
taxpayer during the taxable year as cost-sharing under section 
2202(b)(4) of the Social Security Act.
    ``(b) Limitation Based on Adjusted Gross Income.--The amount of the 
credit which would (but for this subsection) be allowed under this 
section for the taxable year shall be reduced (but not below zero) by 
an amount which bears the same ratio to such amount of credit as the 
excess of the taxpayer's adjusted gross income for such taxable year 
over the exemption amount (as defined in section 59B(d)) bears to such 
exemption amount.''.
    (b) Technical Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the last item and inserting the following new items:

                              ``Sec. 35. Cost-sharing expenses under 
                                        MediKids program.
                              ``Sec. 36. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.

SEC. 1005. REPORT ON LONG-TERM REVENUES.

    Within 1 year after the date of enactment of this title, the 
Secretary of the Treasury shall propose a gradual schedule of 
progressive tax changes to fund the program under title XXII of the 
Social Security Act, as the number of enrollees grows in the out-years.

   Subtitle B--Children's Health Insurance Eligibility Expansion and 
                        Enrollment Improvements

                   CHAPTER 1--ELIGIBILITY EXPANSIONS

                    Subchapter A--Medicaid and SCHIP

SEC. 1101. EXPANSION OF CHILDREN'S ELIGIBILITY FOR MEDICAID AND SCHIP.

    (a) Expansion of Income Eligibility Under SCHIP.--Section 
2110(c)(4) of the Social Security Act (42 U.S.C. 42 U.S.C. 
1397jj(c)(4)) is amended by striking ``200'' and inserting ``300''.
    (b) Mandatory Buy-In Coverage.--
            (1) Medicaid.--Section 1902(a)(10)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(i)) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by striking the semicolon at the end of 
                subclause (VII) and insert ``, or''; and
                    (C) by adding at the end the following:
                                    ``(VIII) who are children in 
                                families whose income exceeds 300 
                                percent of the income official poverty 
                                line (as defined by the Office of 
                                Management and Budget, and revised 
                                annually in accordance with section 
                                673(2) of the Omnibus Budget 
                                Reconciliation Act of 1981) applicable 
                                to a family of the size involved 
                                subject, notwithstanding section 1916, 
                                to payment of premiums or other cost-
                                sharing charges (set on a sliding scale 
                                based on income) that the State may 
                                determine;''.
            (2) SCHIP.--Section 2107(e)(1) of such Act (42 U.S.C. 
        1397gg(e)(1)) is amended by adding at the end the following new 
        subparagraph:
                    ``(E) Section 1902(a)(10)(A)(i)(VIII) (relating to 
                buy-in coverage for children whose family income 
                exceeds 300 percent of the poverty line).''.
    (c) Effective Date.--The amendments made by this section apply to 
medical assistance and child health assistance provided on or after 
October 1, 2001.

SEC. 1102. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID 
              PROGRAM AND TITLE XXI.

    (a) Medicaid Program.--Section 1903(v) of the Social Security Act 
(42 U.S.C. 1396b(v)) is amended--
            (1) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (4)''; and
            (2) by adding at the end the following:
    ``(4)(A) A State may elect (in a plan amendment under this title) 
to provide medical assistance under this title for aliens who are 
lawfully residing in the United States (including battered aliens 
described in section 431(c) of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996) and who are otherwise eligible 
for such assistance, within any of the following eligibility 
categories:
            ``(i) Pregnant women.--Women during pregnancy (and during 
        the 60-day period beginning on the last day of the pregnancy).
            ``(ii) Children.--Children (as defined under such plan), 
        including optional targeted low-income children described in 
        section 1905(u)(2)(B).
    ``(B)(i) In the case of a State that has elected to provide medical 
assistance to a category of aliens under subparagraph (A), no debt 
shall accrue under an affidavit of support against any sponsor of such 
an alien on the basis of provision of assistance to such category and 
the cost of such assistance shall not be considered as an unreimbursed 
cost.
    ``(ii) The provisions of sections 401(a), 402(b), 403, and 421 of 
the Personal Responsibility and Work Opportunity Reconciliation Act of 
1996 shall not apply to a State that makes an election under 
subparagraph (A).''.
    (b) Title XXI.--Section 2107(e)(1) of the Social Security Act (42 
U.S.C. 1397gg(e)(1)), as amended by section 803 of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as 
enacted into law by section 1(a)(6) of Public Law 106-554), is amended 
by adding at the end the following:
                    ``(E) Section 1903(v)(4) (relating to optional 
                coverage of permanent resident alien children), but 
                only if the State has elected to apply such section to 
                that category of children under title XIX.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2001, and apply to medical assistance and child 
health assistance furnished on or after such date.

                  Subchapter B--Family Opportunity Act

SEC. 1111. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT.

    (a) Short Title.--This subchapter may be cited as the ``Family 
Opportunity Act of 2001'' or the ``Dylan Lee James Act''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.

SEC. 1112. OPPORTUNITY FOR FAMILIES OF DISABLED CHILDREN TO PURCHASE 
              MEDICAID COVERAGE FOR SUCH CHILDREN.

    (a) State Option To Allow Families of Disabled Children To Purchase 
Medicaid Coverage for Such Children.--
            (1) In general.--Section 1902 (42 U.S.C. 1396a), as amended 
        by section 2(a) of the Breast and Cervical Cancer Prevention 
        and Treatment Act of 2000 (Public Law 106-354; 114 Stat. 1381) 
        and section 702(b) of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (as enacted 
        into law by section 1(a)(6) of Public Law 106-554), is 
        amended--
                    (A) in subsection (a)(10)(A)(ii)--
                            (i) by striking ``or'' at the end of 
                        subclause (XVII);
                            (ii) by adding ``or'' at the end of 
                        subclause (XVIII); and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XIX) who are disabled children 
                                described in subsection (cc)(1);''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(cc)(1) Individuals described in this paragraph are individuals--
            ``(A) who have not attained 18 years of age;
            ``(B) who would be considered disabled under section 
        1614(a)(3)(C) (determined without regard to the reference to 
        age in that section) but for having earnings or deemed income 
        or resources (as determined under title XVI for children) that 
        exceed the requirements for receipt of supplemental security 
        income benefits; and
            ``(C) whose family income does not exceed such income level 
        as the State establishes and does not exceed--
                    ``(i) 300 percent of the income official poverty 
                line (as defined by the Office of Management and 
                Budget, and revised annually in accordance with section 
                673(2) of the Omnibus Budget Reconciliation Act of 
                1981) applicable to a family of the size involved; or
                    ``(ii) such higher percent of such poverty line as 
                a State may establish, except that no Federal financial 
                participation shall be provided under section 1903(a) 
                for any medical assistance provided to an individual 
                who would not be described in this subsection but for 
                this clause.''.
            (2) Interaction with employer-sponsored family coverage.--
        Section 1902(cc) (42 U.S.C. 1396a(cc)), as added by paragraph 
        (1), is amended by adding at the end the following new 
        paragraph:
    ``(2)(A) If an employer of a parent of an individual described in 
paragraph (1) offers family coverage under a group health plan (as 
defined in section 2791(a) of the Public Health Service Act), the State 
may--
            ``(i) require such parent to apply for, enroll in, and pay 
        premiums for, such coverage as a condition of such parent's 
        child being or remaining eligible for medical assistance under 
        subsection (a)(10)(A)(ii)(XIX) if the parent is determined 
        eligible for such coverage and the employer contributes at 
        least 50 percent of the total cost of annual premiums for such 
        coverage; and
            ``(ii) if such coverage is obtained--
                    ``(I) subject to paragraph (2) of section 1916(h), 
                reduce the premium imposed by the State under that 
                section (if any) in an amount that reasonably reflects 
                the premium contribution made by the parent for private 
                coverage on behalf of a child with a disability; and
                    ``(II) treat such coverage as a third party 
                liability under subsection (a)(25).
    ``(B) In the case of a parent to which subparagraph (A) applies, if 
the family income of such parent does not exceed 300 percent of the 
income official poverty line (referred to in paragraph (1)(C)(i)), a 
State may provide for payment of any portion of the annual premium for 
such family coverage that the parent is required to pay. Any payments 
made by the State under this subparagraph shall be considered, for 
purposes of section 1903(a), to be payments for medical assistance.''.
    (b) State Option To Impose Income-Related Premiums.--Section 1916 
(42 U.S.C. 1396o) is amended--
            (1) in subsection (a), by striking ``subsection (g)'' and 
        inserting ``subsections (g) and (h)''; and
            (2) by adding at the end the following new subsection:
    ``(h)(1) With respect to disabled children provided medical 
assistance under section 1902(a)(10)(A)(ii)(XIX), subject to paragraph 
(2), a State may (in a uniform manner for such children) require the 
families of such children to pay monthly premiums set on a sliding 
scale based on family income.
    ``(2) A premium requirement imposed under paragraph (1) may only 
apply to the extent that--
            ``(A) the aggregate amount of such premium and any premium 
        that the parent is required to pay for family coverage under 
        section 1902(cc)(2)(A)(i) does not exceed 5 percent of the 
        family's income; and
            ``(B) the requirement is imposed consistent with section 
        1902(cc)(2)(A)(ii)(I).
    ``(3) A State shall not require prepayment of a premium imposed 
pursuant to paragraph (1) and shall not terminate eligibility of a 
child under section 1902(a)(10)(A)(ii)(XIX) for medical assistance 
under this title on the basis of failure to pay any such premium until 
such failure continues for a period of not less than 60 days from the 
date on which the premium became past due. The State may waive payment 
of any such premium in any case where the State determines that 
requiring such payment would create an undue hardship.''.
    (c) Conforming Amendment.--Section 1903(f)(4) (42 U.S.C. 
1396b(f)(4)), as amended by section 710(a) of the Medicare, Medicaid, 
and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted 
into law by section 1(a)(6) of Public Law 106-554), is amended in the 
matter preceding subparagraph (A) by inserting 
``1902(a)(10)(A)(ii)(XIX),'' after ``1902(a)(10)(A) (ii)(XVIII),''.
    (d) Technical Amendments.--
            (1) Section 1902 (42 U.S.C. 1396a), as amended by section 
        702(b) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), is amended by 
        redesignating the subsection (aa) added by such section as 
        subsection (bb).
            (2) Section 1902(a)(15) (42 U.S.C. 1396a(a)(15)), as added 
        by section 702(a)(2) of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (as so enacted 
        into law), is amended by striking ``subsection (aa)'' and 
        inserting ``subsection (bb)''.
            (3) Section 1915(b) (42 U.S.C. 1396n(b)), as amended by 
        section 702(c)(2) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as so enacted into 
        law), is amended by striking ``1902(aa)'' and inserting 
        ``1902(bb)''.
    (e) Effective Date.--
            (1) In general.--The amendments made by subsections (a), 
        (b), and (c) shall apply to medical assistance for items and 
        services furnished on or after January 1, 2002.
            (2) Technical amendments.--The amendments made by 
        subsection (d) shall take effect as if included in the 
        enactment of section 702 of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (as enacted 
        into law by section 1(a)(6) of Public Law 106-554).

SEC. 1113. TREATMENT OF INPATIENT PSYCHIATRIC HOSPITAL SERVICES FOR 
              INDIVIDUALS UNDER AGE 21 IN HOME OR COMMUNITY-BASED 
              SERVICES WAIVERS.

    (a) In General.--Section 1915(c) (42 U.S.C. 1396n(c)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by inserting ``, or 
                inpatient psychiatric hospital services for individuals 
                under age 21,'' after ``intermediate care facility for 
                the mentally retarded''; and
                    (B) in the second sentence, by inserting ``, or 
                inpatient psychiatric hospital services for individuals 
                under age 21'' before the period;
            (2) in paragraph (2)(B), by striking ``or services in an 
        intermediate care facility for the mentally retarded'' each 
        place it appears and inserting ``, services in an intermediate 
        care facility for the mentally retarded, or inpatient 
        psychiatric hospital services for individuals under age 21'';
            (3) by striking paragraph (2)(C) and inserting the 
        following:
            ``(C) such individuals who are determined to be likely to 
        require the level of care provided in a hospital, nursing 
        facility, or intermediate care facility for the mentally 
        retarded, or inpatient psychiatric hospital services for 
        individuals under age 21, are informed of the feasible 
        alternatives, if available under the waiver, at the choice of 
        such individuals, to the provision of inpatient hospital 
        services, nursing facility services, services in an 
        intermediate care facility for the mentally retarded, or 
        inpatient psychiatric hospital services for individuals under 
        age 21;''; and
            (4) in paragraph (7)(A)--
                    (A) by inserting ``, or inpatient psychiatric 
                hospital services for individuals under age 21,'' after 
                ``intermediate care facility for the mentally 
                retarded''; and
                    (B) by inserting ``, or who would require inpatient 
                psychiatric hospital services for individuals under age 
                21'' before the period.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to medical assistance provided on or after January 1, 
2001.

SEC. 1114. DEMONSTRATION OF COVERAGE UNDER THE MEDICAID PROGRAM OF 
              CHILDREN WITH POTENTIALLY SEVERE DISABILITIES.

    (a) State Application.--A State may apply to the Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') for approval of a demonstration project (in this section 
referred to as a ``demonstration project'') under which up to a 
specified maximum number of children with a potentially severe 
disability (as defined in subsection (b)) are provided medical 
assistance under the State medicaid plan under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.).
    (b) Child With a Potentially Severe Disability Defined.--
            (1) In general.--In this section, the term ``child with a 
        potentially severe disability'' means, with respect to a 
        demonstration project, an individual who--
                    (A) has not attained 21 years of age;
                    (B) has a physical or mental condition, disease, 
                disorder (including a congenital birth defect or a 
                metabolic condition), injury, or developmental 
                disability that was incurred before the individual 
                attained such age; and
                    (C) is reasonably expected, but for the receipt of 
                medical assistance under the State medicaid plan, to 
                reach the level of disability defined under section 
                1614(a)(3) of the Social Security Act (42 U.S.C. 
                1382c(a)(3)), (determined without regard to the 
                reference to age in subparagraph (C) of that section).
            (2) Exception.--Such term does not include an individual 
        who would be considered disabled under section 1614(a)(3)(C) of 
        the Social Security Act (42 U.S.C. 1382c(a)(3)(C)) (determined 
        without regard to the reference to age in that section).
    (c) Approval of Demonstration Projects.--
            (1) In general.--Subject to paragraph (3), the Secretary 
        shall approve applications under subsection (a) that meet the 
        requirements of paragraph (2) and such additional terms and 
        conditions as the Secretary may require. The Secretary may 
        waive the requirement of section 1902(a)(1) of the Social 
        Security Act (42 U.S.C. 1396a(a)(1)) to allow for sub-State 
        demonstrations.
            (2) Terms and conditions of demonstration projects.--The 
        Secretary may not approve a demonstration project under this 
        section unless the State provides assurances satisfactory to 
        the Secretary that the following conditions are or will be met:
                    (A) Independent evaluation.--The State provides for 
                an independent evaluation of the project to be 
                conducted during fiscal year 2006.
                    (B) Consultation for development of criteria.--The 
                State consults with appropriate pediatric health 
                professionals in establishing the criteria for 
                determining whether a child has a potentially severe 
                disability.
                    (C) Annual report.--The State submits an annual 
                report to the Secretary (in a uniform form and manner 
                established by the Secretary) on the use of funds 
                provided under the grant that includes the following:
                            (i) Enrollment and financial statistics 
                        on--
                                    (I) the total number of children 
                                with a potentially severe disability 
                                enrolled in the demonstration project, 
                                disaggregated by disability;
                                    (II) the services provided by 
                                category or code and the cost of each 
                                service so categorized or coded; and
                                    (III) the number of children 
                                enrolled in the demonstration project 
                                who also receive services through 
                                private insurance.
                            (ii) With respect to the report submitted 
                        for fiscal year 2006, the results of the 
                        independent evaluation conducted under 
                        subparagraph (A).
                            (iii) Such additional information as the 
                        Secretary may require.
            (3) Limitations on federal funding.--
                    (A) Appropriation.--
                            (i) In general.--Out of any funds in the 
                        Treasury not otherwise appropriated, there is 
                        appropriated to carry out this section--
                                    (I) $16,666,000 for each of fiscal 
                                years 2002 and 2003; and
                                    (II) $16,667,000 for each of fiscal 
                                years 2004 through 2007.
                            (ii) Budget authority.--Clause (i) 
                        constitutes budget authority in advance of 
                        appropriations Acts and represents the 
                        obligation of the Federal Government to provide 
                        for the payment of the amounts appropriated 
                        under clause (i).
                    (B) Limitation on payments.--In no case may--
                            (i) the aggregate amount of payments made 
                        by the Secretary to States under this section 
                        exceed $100,000,000;
                            (ii) the aggregate amount of payments made 
                        by the Secretary to States for administrative 
                        expenses relating to the evaluations and annual 
                        reports required under subparagraphs (A) and 
                        (C) of paragraph (2) exceed $2,000,000 of such 
                        $100,000,000; or
                            (iii) payments be provided by the Secretary 
                        for a fiscal year after fiscal year 2010.
                    (C) Funds allocated to states.--
                            (i) In general.--The Secretary shall 
                        allocate funds to States based on their 
                        applications and the availability of funds. In 
                        making such allocations, the Secretary shall 
                        ensure an equitable distribution of funds among 
                        States with large populations and States with 
                        small populations.
                            (ii) Availability.--Funds allocated to a 
                        State under a grant made under this section for 
                        a fiscal year shall remain available until 
                        expended.
                    (D) Funds not allocated to states.--Funds not 
                allocated to States in the fiscal year for which they 
                are appropriated shall remain available in succeeding 
                fiscal years for allocation by the Secretary using the 
                allocation formula established under this section.
                    (E) Payments to states.--The Secretary shall pay to 
                each State with a demonstration project approved under 
                this section, from its allocation under subparagraph 
                (C), an amount for each quarter equal to the Federal 
                medical assistance percentage (as defined in section 
                1905(b) of the Social Security Act (42 U.S.C. 
                1395d(b))) of expenditures in the quarter for medical 
                assistance provided to children with a potentially 
                severe disability.
    (d) Recommendation.--Not later than October 1, 2005, the Secretary 
shall submit a recommendation to the Committee on Commerce of the House 
of Representatives and the Committee on Finance of the Senate regarding 
whether the demonstration project established under this section should 
be continued after fiscal year 2007.
    (e) State Defined.--In this section, the term ``State'' has the 
meaning given such term for purposes of title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.).

SEC. 1115. DEVELOPMENT AND SUPPORT OF FAMILY-TO-FAMILY HEALTH 
              INFORMATION CENTERS.

    Section 501 (42 U.S.C. 701) is amended by adding at the end the 
following new subsection:
    ``(c)(1) In addition to amounts appropriated under subsection (a) 
and retained under section 502(a)(1) for the purpose of carrying out 
activities described in subsection (a)(2), there is appropriated to the 
Secretary, out of any money in the Treasury not otherwise appropriated, 
for the purpose of enabling the Secretary (through grants, contracts, 
or otherwise) to provide for special projects of regional and national 
significance for the development and support of family-to-family health 
information centers described in paragraph (2), $10,000,000 for each of 
fiscal years 2002 through 2007. Funds appropriated under this paragraph 
shall remain available until expended.
    ``(2) The family-to-family health information centers described in 
this paragraph are centers that--
            ``(A) assist families of children with disabilities or 
        special health care needs to make informed choices about health 
        care in order to promote good treatment decisions, cost-
        effectiveness, and improved health outcomes for such children;
            ``(B) provide information regarding the health care needs 
        of, and resources available for, children with disabilities or 
        special health care needs;
            ``(C) identify successful health delivery models for such 
        children;
            ``(D) develop with representatives of health care 
        providers, managed care organizations, health care purchasers, 
        and appropriate State agencies a model for collaboration 
        between families of such children and health professionals;
            ``(E) provide training and guidance regarding caring for 
        such children;
            ``(F) conduct outreach activities to the families of such 
        children, health professionals, schools, and other appropriate 
        entities and individuals; and
            ``(G) are staffed by families of children with disabilities 
        or special health care needs who have expertise in Federal and 
        State public and private health care systems and health 
        professionals.
    ``(3) The provisions of this title that are applicable to the funds 
made available to the Secretary under section 502(a)(1) apply in the 
same manner to funds made available to the Secretary under paragraph 
(1).''.

SEC. 1116. RESTORATION OF MEDICAID ELIGIBILITY FOR CERTAIN SSI 
              BENEFICIARIES.

    (a) In General.--Section 1902(a)(10)(A)(i)(II) (42 U.S.C. 
1396a(a)(10)(A)(i)(II)) is amended--
            (1) by inserting ``(aa)'' after ``(II)'';
            (2) by striking ``or who are'' and inserting ``, (bb) who 
        are''; and
            (3) by inserting before the comma at the end the following: 
        ``, or (cc) who are under 21 years of age and with respect to 
        whom supplemental security income benefits would be paid under 
        title XVI if subparagraphs (A) and (B) of section 1611(c)(7) 
        were applied without regard to the phrase `the first day of the 
        month following'''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to medical assistance for items and services furnished on or 
after the first day of the first calendar quarter that begins after the 
date of enactment of this Act.

                   CHAPTER 2--ENROLLMENT IMPROVEMENTS

SEC. 1121. APPLICATION OF SIMPLIFIED TITLE XXI PROCEDURES UNDER THE 
              MEDICAID PROGRAM.

    (a) Application Under Medicaid.--
            (1) In general.--Section 1902(l) of the Social Security Act 
        (42 U.S.C. 1396a(l)) is amended--
                    (A) in paragraph (3), by inserting ``subject to 
                paragraph (5)'', after ``Notwithstanding subsection 
                (a)(17),''; and
                    (B) by adding at the end the following:
    ``(5) With respect to determining the eligibility of individuals 
under 19 years of age (or such higher age as the State has elected 
under paragraph (1)(D)) for medical assistance under subsection 
(a)(10)(A) notwithstanding any other provision of this title, if the 
State has established a State child health plan under title XXI--
            ``(A) the State may not apply a resource standard;
            ``(B) the State shall use the same simplified eligibility 
        form (that in no case shall be more than 4 pages and that 
        permits application other than in person) as the State uses 
        under such State child health plan with respect to such 
        individuals;
            ``(C) the State shall provide for initial eligibility 
        determinations and redeterminations of eligibility using the 
        same verification policies, forms, and frequency as the State 
        uses for such purposes under such State child health plan with 
        respect to such individuals;
            ``(D) the State shall not require a face-to-face interview 
        for purposes of initial eligibility determinations and 
        redeterminations and shall allow for self-declaration of 
        initial eligibility and recertification information; and
            ``(E) the State shall coordinate the enrollment of children 
        under this title and title XXI with the enrollment of such 
        children and their families in other Federal means-tested 
        public assistance programs, including child care programs, free 
        or reduced price lunches or breakfasts under the Richard B. 
        Russell National School Lunch Act (42 U.S.C. 1751 et seq.), 
        assistance under the special supplemental nutrition program for 
        women, infants, and children (WIC) under section 17 of the 
        Child Nutrition Act of 1966 (42 U.S.C. 1786), and benefits 
        under the Food Stamp Act of 1977.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        apply to determinations of eligibility made on or after the 
        date that is 1 year after the date of the enactment of this 
        Act, whether or not regulations implementing such amendments 
        have been issued.
            (3) Development of uniform application.--Not later than 1 
        year after the date of enactment of this Act, the Secretary of 
        Health and Human Services, in consultation with States and 
        organizations with expertise in outreach to, and enrollment of, 
        children without health insurance, shall develop a uniform 
        application that meets the requirements of section 1902(l)(5) 
        of the Social Security Act, as added by paragraph (1), and may 
        be used in any State.
    (b) Presumptive Eligibility.--
            (1) In general.--Section 1920A(b)(3)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396r-1a(b)(3)(A)(i)), as amended by 
        section 708(a) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), is amended by inserting 
        ``a child care resource and referral agency,'' after ``a State 
        or tribal child support enforcement agency,''.
            (2) Application to presumptive eligibility for pregnant 
        women under medicaid.--Section 1920(b) of the Social Security 
        Act (42 U.S.C. 1396r-1(b)) is amended by adding at the end 
        after and below paragraph (2) the following flush sentence:
``The term `qualified provider' includes a qualified entity as defined 
in section 1920A(b)(3).''.
            (3) Application under title xxi.--
                    (A) In general.--Section 2107(e)(1)(D) of the 
                Social Security Act (42 U.S.C. 1397gg(e)(1)), as added 
                by section 803 of the Medicare, Medicaid, and SCHIP 
                Benefits Improvement and Protection Act of 2000 (as 
                enacted into law by section 1(a)(6) of Public Law 106-
                554), is amended to read as follows:
                    ``(D) Sections 1920 and 1920A (relating to 
                presumptive eligibility).''.
                    (B) Exception from limitation on administrative 
                expenses.--Section 2105(c)(2) of such Act (42 U.S.C. 
                1397ee(c)(2)) is amended by adding at the end the 
                following:
                    ``(C) Exception for presumptive eligibility 
                expenditures.--The limitation under subparagraph (A) on 
                expenditures shall not apply to expenditures 
                attributable to the application of section 1920 or 
                1920A (pursuant to section 2107(e)(1)(D)), regardless 
                of whether the child is determined to be ineligible for 
                the program under this title or title XIX.''.
                    (C) Conforming elimination of resource test.--
                Section 2102(b)(1)(A) of such Act (42 U.S.C. 
                1397bb(b)(1)(A)) is amended--
                            (i) by striking ``and resources (including 
                        any standards relating to spenddowns and 
                        disposition of resources)''; and
                            (ii) by adding at the end the following: 
                        ``Effective 1 year after the date of the 
                        enactment of the Leave No Child Behind Act of 
                        2001, such standards may not include the 
                        application of a resource standard or test.''.
    (c) Automatic Reassessment of Eligibility for Title XXI and 
Medicaid Benefits for Children Losing Medicaid or Title XXI 
Eligibility.--
            (1) Loss of medicaid eligibility.--Section 1902(a) of the 
        Social Security Act (42 U.S.C. 1396a(a)) is amended--
                    (A) by striking the period at the end of paragraph 
                (65) and inserting ``; and''; and
                    (B) by inserting after paragraph (65) the 
                following:
            ``(66) provide, in the case of a State with a State child 
        health plan under title XXI, that before medical assistance to 
        a child (or a parent of a child) is discontinued under this 
        title, a determination of whether the child (or parent) is 
        eligible for benefits under title XXI shall be made and, if 
        determined to be so eligible, the child (or parent) shall be 
        automatically enrolled in the program under such title without 
        the need for a new application.''.
            (2) Loss of title xxi eligibility.--Section 2102(b)(3) (42 
        U.S.C. 1397bb(b)(3)) is amended by redesignating subparagraphs 
        (D) and (E) as subparagraphs (E) and (F), respectively, and by 
        inserting after subparagraph (C) the following:
                    ``(D) that before health assistance to a child (or 
                a parent of a child) is discontinued under this title, 
                a determination of whether the child (or parent) is 
                eligible for benefits under title XIX is made and, if 
                determined to be so eligible, the child (or parent) is 
                automatically enrolled in the program under such title 
                without the need for a new application;''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) apply to individuals who lose eligibility under the 
        medicaid program under title XIX, or under a State child health 
        insurance plan under title XXI, respectively, of the Social 
        Security Act on or after the date that is 60 days after the 
        date of the enactment of this Act.
    (d) Provision of Medicaid and SCHIP Applications and Information 
Under the School Lunch Program.--Section 9(b)(2)(B) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is 
amended--
            (1) by striking ``(B) Applications'' and inserting ``(B)(i) 
        Applications''; and
            (2) by adding at the end the following:
    ``(ii)(I) Applications for free and reduced price lunches that are 
distributed pursuant to clause (i) to parents or guardians of children 
in attendance at schools participating in the school lunch program 
under this Act shall also contain information on the availability of 
medical assistance under title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.) (commonly referred to as the `medicaid program') 
and of child health assistance under title XXI of such Act (commonly 
referred to as `SCHIP'), including information on how to obtain an 
application for assistance under such program.
    ``(II) Information on the medicaid program and SCHIP under 
subclause (I) shall be provided on a form separate from the application 
form for free and reduced price lunches under clause (i).''.
    (e) 12-Months Continuous Eligibility.--
            (1) Medicaid.--Section 1902(e)(12) of the Social Security 
        Act (42 U.S.C. 1396a(e)(12)) is amended--
                    (A) by striking ``At the option of the State, the 
                plan may'' and inserting ``The plan shall'';
                    (B) by striking ``an age specified by the State 
                (not to exceed 19 years of age)'' and inserting ``19 
                years of age (or such higher age as the State has 
                elected under subsection (l)(1)(D)) or who is eligible 
                for medical assistance as the parent of such a child'';
                    (C) in subparagraph (A), by striking ``a period 
                (not to exceed 12 months)'' and inserting ``the 12-
                month period beginning on the date''; and
                    (D) in subparagraph (B), by inserting ``or, in the 
                case of a parent of a child, the child)'' after ``the 
                individual''.
            (2) Title XXI.--Section 2101(b)(2) of such Act (42 U.S.C. 
        1397aa(b)(2)) is amended by adding at the end the following: 
        ``Such methods shall provide 12-months continuous eligibility 
        for children and parents under this title in the same manner as 
        section 1902(e)(12) provides 12-months continuous eligibility 
        for individuals described in such section under title XIX.''.

SEC. 1122. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO TITLE XXI PARENTS.

    Section 2102(b)(1) of the Social Security Act (42 U.S.C. 
1397bb(b)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(C) Automatic eligibility of children born to a 
                parent being provided familycare.--Such eligibility 
                standards shall provide for automatic coverage of a 
                child born to an individual who is provided assistance 
                under this title in the same manner as medical 
                assistance would be provided under section 1902(e)(4) 
                to a child described in such section.''.

                       CHAPTER 3--EFFECTIVE DATE

SEC. 1131. EFFECTIVE DATE.

    (a) In General.--Subject to subsection (b), the amendments made by 
this subtitle take effect on the date of enactment of this Act.
    (b) Extension of Effective Date for State Law Amendment.--In the 
case of a State plan under title XIX or XXI of the Social Security Act 
which the Secretary of Health and Human Services determines requires 
State legislation in order for the plan to meet the additional 
requirements imposed by the amendments made by this subtitle, such 
State plan shall not be regarded as failing to comply with such 
requirements solely on the basis of its failure to meet the additional 
requirements before the first day of the first calendar quarter 
beginning after the close of the first regular session of the State 
legislature that begins after the date of enactment of this Act. For 
purposes of the previous sentence, in the case of a State that has a 2-
year legislative session, each year of the session is considered to be 
a separate regular session of the State legislature.

                  Subtitle C--Improving Access to Care

                         CHAPTER 1--COMMISSION

SEC. 1201. COMMISSION ON CHILDREN'S ACCESS TO CARE.

    (a) Establishment.--There is established a Commission on Children's 
Access to Care (in this section referred to as the ``Commission'').
    (b) Membership.--
            (1) Composition.--The Commission shall be composed of 11 
        members of whom--
                    (A) 3 members shall be appointed by the President;
                    (B) 2 members shall be appointed by the Majority 
                Leader of the Senate;
                    (C) 2 members shall be appointed by the Speaker of 
                the House of Representatives;
                    (D) 2 members shall be appointed by the Minority 
                Leader of the Senate; and
                    (E) 2 members shall be appointed by the Minority 
                Leader of the House of Representatives.
            (2) Qualifications.--Members of the Commission shall be 
        appointed from among representatives of children's advocacy 
        groups and children's health care providers.
            (3) Timing of appointments.--Members of the Commission 
        shall be appointed not later than 6 months after the date of 
        enactment of this Act.
            (4) Chair.--
                    (A) In general.--The Commission shall select a 
                Chair from among its members.
                    (B) Duties.--The Chair of the Commission shall be 
                responsible for--
                            (i) the assignment of duties and 
                        responsibilities among staff personnel and 
                        their continuing supervision; and
                            (ii) the use and expenditure of funds 
                        available to the Commission.
            (5) Vacancies.--Any vacancy on the Commission shall be 
        filled in the same manner as the original incumbent was 
        appointed.
            (6) Travel expenses.--The members of the Commission shall 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Commission.
    (c) Meetings.--
            (1) Initial meeting.--Not later than 30 days after the date 
        on which all members of the Commission have been appointed, the 
        Commission shall hold its first meeting.
            (2) Time.--The Commission shall meet at the call of the 
        Chair.
            (3) Quorum.--A majority of the members of the Commission 
        shall constitute a quorum, but a lesser number of members may 
        hold hearings.
    (d) Duties.--
            (1) In general.--The Commission shall conduct annual 
        studies of children's access to health care.
            (2) Matters studied.--Each year the Commission shall 
        study--
                    (A) the impact of payment rates under the medicaid 
                and the State children's health insurance programs on 
                access to health care and provider participation in the 
                delivery of health care to children;
                    (B) the access to health care of children with 
                special health care needs, particularly those in 
                managed care delivery systems;
                    (C) the access to, and delivery of, preventive 
                health care to children;
                    (D) Federal and State government efforts to collect 
                data, report, evaluate, and monitor children's access 
                to health care, including Federal and State government 
                deficiencies in assessing children's access to health 
                care;
                    (E) the needs for supplemental and enabling 
                services to improve children's access to health care, 
                including translation and transportation services; and
                    (F) other factors that impact the ability of 
                families with children to gain access to health care 
                services.
            (3) Reports.--
                    (A) In general.--Not later than 1 year after the 
                date of the initial meeting of the Commission, and 
                annually thereafter, the Commission shall submit to 
                Congress and the President a report.
                    (B) Contents.--Each report shall contain the 
                results of the study conducted for that year and the 
                Commission's recommendations to improve children's--
                            (i) health status; and
                            (ii) access to health care.
    (e) Powers of the Commission.--
            (1) Hearings.--The Commission may hold hearings, sit and 
        act at times and places, take testimony, and receive evidence 
        as the Commission considers advisable to carry out this 
        section.
            (2) Information from federal agencies.--The Commission may 
        secure directly from any Federal department or agency such 
        information as the Commission considers necessary to carry out 
        this section. Upon request of the Chair of the Commission, the 
        head of such department or agency shall furnish such 
        information to the Commission.
            (3) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as other departments and agencies of the Federal Government.
            (4) Gifts.--The Commission may accept, use, and dispose of 
        gifts or donations of services or property.
    (f) Staff and Administrative Support.--
            (1) In general.--The Chair of the Commission may, without 
        regard to the civil service laws and regulations, appoint and 
        terminate an executive director and such other additional 
        personnel as may be necessary to enable the Commission to 
        perform its duties. The employment of an executive director 
        shall be subject to confirmation by the Commission.
            (2) Compensation.--The Chair of the Commission may fix the 
        compensation of the executive director and other personnel 
        without regard to chapter 51 and subchapter III of chapter 53 
        of title 5, United States Code, relating to classification of 
        positions and General Schedule pay rates, except that the rate 
        of pay for the executive director and other personnel may not 
        exceed the rate payable for level V of the Executive Schedule 
        under section 5316 of title 5, United States Code.
            (3) Detail of government employees.--Any Federal Government 
        employee may be detailed to the Commission without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status or privilege.
            (4) Procurement of temporary and intermittent services.--
        The Chair of the Commission may procure temporary and 
        intermittent services under section 3109(b) of title 5, United 
        States Code, at rates for individuals which do not exceed the 
        daily equivalent of the annual rate of basic pay prescribed for 
        level V of the Executive Schedule under section 5316 of title 
        5, United States Code.

         CHAPTER 2--CHILDREN'S HEALTH INSURANCE ACCOUNTABILITY

SEC. 1211. SHORT TITLE.

    This chapter may be cited as the ``Children's Health Insurance 
Accountability Act of 2001''.

SEC. 1212. FINDINGS.

    Congress makes the following findings:
            (1) Children have health and development needs that are 
        markedly different than those for the adult population.
            (2) Children experience complex and continuing changes 
        during the continuum from birth to adulthood in which 
        appropriate health care is essential for optimal development.
            (3) The vast majority of work done on development methods 
        to assess the effectiveness of health care services and the 
        impact of medical care on patient outcomes and patient 
        satisfaction has been focused on adults.
            (4) Health outcome measures need to be age, gender, and 
        developmentally appropriate to be useful to families and 
        children.
            (5) Costly disorders of adulthood often have their origins 
        in childhood, making early access to effective health services 
        in childhood essential.
            (6) More than 200 chronic conditions, disabilities and 
        diseases affect children, including asthma, diabetes, sickle 
        cell anemia, spina bifida, epilepsy, autism, cerebral palsy, 
        congenital heart disease, mental retardation, and cystic 
        fibrosis. These children need the services of specialists who 
        have in depth knowledge about their particular condition.
            (7) Children's patterns of illness, disability and injury 
        differ dramatically from adults.

SEC. 1213. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Patient Protection Standards.--Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended--
            (1) by redesignating part C as part D; and
            (2) by inserting after part B the following new part:

            ``Part C--Children's Health Protection Standards

``SEC. 2770. ACCESS TO CARE.

    ``(a) Access to Appropriate Primary Care Providers.--
            ``(1) In general.--If a group health plan, or a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, requires or provides for an enrollee to 
        designate a participating primary care provider for a child of 
        such enrollee--
                    ``(A) the plan or issuer shall permit the enrollee 
                to designate a physician who specializes in pediatrics 
                as the child's primary care provider; and
                    ``(B) if such an enrollee has not designated such a 
                provider for the child, the plan or issuer shall 
                consider appropriate pediatric expertise in mandatorily 
                assigning such an enrollee to a primary care provider.
            ``(2) Construction.--Nothing in paragraph (1) shall waive 
        any requirements of coverage relating to medical necessity or 
        appropriateness with respect to coverage of services.
    ``(b) Access to Pediatric Specialty Services.--
            ``(1) Referral to specialty care for children requiring 
        treatment by specialists.--
                    ``(A) In general.--In the case of a child who is 
                covered under a group health plan, or health insurance 
                coverage offered by a health insurance issuer and who 
                has a mental or physical condition, disability, or 
                disease of sufficient seriousness and complexity to 
                require diagnosis, evaluation or treatment by a 
                specialist, the plan or issuer shall make or provide 
for a referral to a specialist who has extensive experience or 
training, and is available and accessible to provide the treatment for 
such condition or disease, including the choice of a nonprimary care 
physician specialist participating in the plan or a referral to a 
nonparticipating provider as provided for under subparagraph (D) if 
such a provider is not available within the plan.
                    ``(B) Specialist defined.--For purposes of this 
                subsection, the term `specialist' means, with respect 
                to a condition, disability, or disease, a health care 
                practitioner, facility, or center (such as a center of 
                excellence) that has extensive pediatric expertise 
                through appropriate training or experience to provide 
                high quality care in treating the condition, disability 
                or disease.
                    ``(C) Referrals to participating providers.--A plan 
                or issuer is not required under subparagraph (A) to 
                provide for a referral to a specialist that is not a 
                participating provider, unless the plan or issuer does 
                not have an appropriate specialist that is available 
                and accessible to treat the enrollee's condition and 
                that is a participating provider with respect to such 
                treatment.
                    ``(D) Treatment of nonparticipating providers.--If 
                a plan or issuer refers a child enrollee to a 
                nonparticipating specialist, services provided pursuant 
                to the referral shall be provided at no additional cost 
                to the enrollee beyond what the enrollee would 
                otherwise pay for services received by such a 
                specialist that is a participating provider.
                    ``(E) Specialists as primary care providers.--A 
                plan or issuer shall have in place a procedure under 
                which a child who is covered under health insurance 
                coverage provided by the plan or issuer who has a 
                condition or disease that requires specialized medical 
                care over a prolonged period of time shall receive a 
                referral to a pediatric specialist affiliated with the 
                plan, or if not available within the plan, to a 
                nonparticipating provider for such condition and such 
                specialist may be responsible for and capable of 
                providing and coordinating the child's primary and 
                specialty care.
            ``(2) Standing referrals.--
                    ``(A) In general.--A group health plan, or health 
                insurance issuer in connection with the provision of 
                health insurance coverage of a child, shall have a 
                procedure by which a child who has a condition, 
                disability, or disease that requires ongoing care from 
                a specialist may request and obtain a standing referral 
                to such specialist for treatment of such condition. If 
                the primary care provider in consultation with the 
                medical director of the plan or issuer and the 
                specialist (if any), determines that such a standing 
                referral is appropriate, the plan or issuer shall 
                authorize such a referral to such a specialist. Such 
                standing referral shall be consistent with a treatment 
                plan.
                    ``(B) Treatment plans.--A group health plan, or 
                health insurance issuer, with the participation of the 
                family and the health care providers of the child, 
                shall develop a treatment plan for a child who requires 
                ongoing care that covers a specified period of time 
                (but in no event less than a 6-month period). Services 
                provided for under the treatment plan shall not require 
                additional approvals or referrals through a gatekeeper.
                    ``(C) Terms of referral.--The provisions of 
                subparagraph (C) and (D) of paragraph (1) shall apply 
                with respect to referrals under subparagraph (A) in the 
                same manner as they apply to referrals under paragraph 
                (1)(A).
    ``(c) Adequacy of Access.--For purposes of subsections (a) and (b), 
a group health plan or health insurance issuer in connection with 
health insurance coverage shall ensure that a sufficient number, 
distribution, and variety of qualified participating health care 
providers are available so as to ensure that all covered health care 
services, including specialty services, are available and accessible to 
all enrollees in a timely manner.
    ``(d) Coverage of Emergency Services.--
            ``(1) In general.--If a group health plan, or health 
        insurance coverage offered by a health insurance issuer, 
        provides any benefits for children with respect to emergency 
        services (as defined in paragraph (2)(A)), the plan or issuer 
        shall cover emergency services furnished under the plan or 
        coverage--
                    ``(A) without the need for any prior authorization 
                determination;
                    ``(B) whether or not the physician or provider 
                furnishing such services is a participating physician 
                or provider with respect to such services; and
                    ``(C) without regard to any other term or condition 
                of such coverage (other than exclusion of benefits, or 
                an affiliation or waiting period, permitted under 
                section 2701).
            ``(2) Definitions.--In this subsection:
                    ``(A) Emergency medical condition based on prudent 
                layperson standard.--The term `emergency medical 
                condition' means a medical condition manifesting itself 
                by acute symptoms of sufficient severity (including 
                severe pain) such that a prudent layperson, who 
                possesses an average knowledge of health and medicine, 
                could reasonably expect the absence of immediate 
                medical attention to result in a condition described in 
                clause (i), (ii), or (iii) of section 1867(e)(1)(A) of 
                the Social Security Act.
                    ``(B) Emergency services.--The term `emergency 
                services' means--
                            ``(i) a medical screening examination (as 
                        required under section 1867 of the Social 
                        Security Act) that is within the capability of 
                        the emergency department of a hospital, 
including ancillary services routinely available to the emergency 
department to evaluate an emergency medical condition (as defined in 
subparagraph (A)); and
                            ``(ii) within the capabilities of the staff 
                        and facilities available at the hospital, such 
                        further medical examination and treatment as 
                        are required under section 1867 of such Act to 
                        stabilize the patient.
            ``(3) Reimbursement for maintenance care and post-
        stabilization care.--A group health plan, and health insurance 
        issuer offering health insurance coverage, shall provide, in 
        covering services other than emergency services, for 
        reimbursement with respect to services which are otherwise 
        covered and which are provided to an enrollee other than 
        through the plan or issuer if the services are maintenance care 
        or post-stabilization care covered under the guidelines 
        established under section 1852(d) of the Social Security Act 
        (relating to promoting efficient and timely coordination of 
        appropriate maintenance and post-stabilization care of an 
        enrollee after an enrollee has been determined to be stable).
    ``(e) Prohibition on Financial Barriers.--A health insurance issuer 
in connection with the provision of health insurance coverage may not 
impose any cost sharing for pediatric specialty services provided under 
such coverage to enrollee children in amounts that exceed the cost-
sharing required for other specialty care under such coverage.
    ``(f) Children With Special Health Care Needs.--A health insurance 
issuer in connection with the provision of health insurance coverage 
shall ensure that such coverage provides special consideration for the 
provision of services to enrollee children with special health care 
needs. Appropriate procedures shall be implemented to provide care for 
children with special health care needs. The development of such 
procedures shall include participation by the families of such 
children.
    ``(g) Definitions.--In this part:
            ``(1) Child.--The term `child' means an individual who is 
        under 19 years of age.
            ``(2) Children with special health care needs.--The term 
        `children with special health care needs' means those children 
        who have or are at elevated risk for chronic physical, 
        developmental, behavioral or emotional conditions and who also 
        require health and related services of a type and amount not 
        usually required by children.

``SEC. 2771. CONTINUITY OF CARE.

    ``(a) In General.--If a contract between a health insurance issuer, 
in connection with the provision of health insurance coverage, and a 
health care provider is terminated (other than by the issuer for 
failure to meet applicable quality standards or for fraud) and an 
enrollee is undergoing a course of treatment from the provider at the 
time of such termination, the issuer shall--
            ``(1) notify the enrollee of such termination, and
            ``(2) subject to subsection (c), permit the enrollee to 
        continue the course of treatment with the provider during a 
        transitional period (provided under subsection (b)).
    ``(b) Transitional Period.--
            ``(1) In general.--Except as provided in paragraphs (2) 
        through (4), the transitional period under this subsection 
        shall extend for at least--
                    ``(A) 60 days from the date of the notice to the 
                enrollee of the provider's termination in the case of a 
                primary care provider, or
                    ``(B) 120 days from such date in the case of 
                another provider.
            ``(2) Institutional care.--The transitional period under 
        this subsection for institutional or inpatient care from a 
        provider shall extend until the discharge or termination of the 
        period of institutionalization and shall include reasonable 
        follow-up care related to the institutionalization and shall 
        also include institutional care scheduled prior to the date of 
        termination of the provider status.
            ``(3) Pregnancy.--If--
                    ``(A) an enrollee has entered the second trimester 
                of pregnancy at the time of a provider's termination of 
                participation, and
                    ``(B) the provider was treating the pregnancy 
                before date of the termination,
        the transitional period under this subsection with respect to 
        provider's treatment of the pregnancy shall extend through the 
        provision of post-partum care directly related to the delivery.
            ``(4) Terminal illness.--
                    ``(A) In general.--If--
                            ``(i) an enrollee was determined to be 
                        terminally ill (as defined in subparagraph (B)) 
                        at the time of a provider's termination of 
                        participation, and
                            ``(ii) the provider was treating the 
                        terminal illness before the date of 
                        termination,
                the transitional period under this subsection shall 
                extend for the remainder of the enrollee's life for 
                care directly related to the treatment of the terminal 
                illness.
                    ``(B) Definition.--In subparagraph (A), an enrollee 
                is considered to be `terminally ill' if the enrollee 
                has a medical prognosis that the enrollee's life 
                expectancy is 6 months or less.
    ``(c) Permissible Terms and Conditions.--An issuer may condition 
coverage of continued treatment by a provider under subsection (a)(2) 
upon the provider agreeing to the following terms and conditions:
            ``(1) The provider agrees to continue to accept 
        reimbursement from the issuer at the rates applicable prior to 
        the start of the transitional period as payment in full.
            ``(2) The provider agrees to adhere to the issuer's quality 
        assurance standards and to provide to the issuer necessary 
        medical information related to the care provided.
            ``(3) The provider agrees otherwise to adhere to the 
        issuer's policies and procedures, including procedures 
        regarding referrals and obtaining prior authorization and 
        providing services pursuant to a treatment plan approved by the 
        issuer.

``SEC. 2772. CONTINUOUS QUALITY IMPROVEMENT.

    ``(a) In General.--A health insurance issuer that offers health 
insurance coverage for children shall establish and maintain an 
ongoing, internal quality assurance program that at a minimum meets the 
requirements of subsection (b).
    ``(b) Requirements.--The internal quality assurance program of an 
issuer under subsection (a) shall--
            ``(1) establish and measure a set of health care, 
        functional assessments, structure, processes and outcomes, and 
        quality indicators that are unique to children and based on 
        nationally accepted standards or guidelines of care;
            ``(2) maintain written protocols consistent with recognized 
        clinical guidelines or current consensus on the pediatric 
        field, to be used for purposes of internal utilization review, 
        with periodic updating and evaluation by pediatric specialists 
        to determine effectiveness in controlling utilization;
            ``(3) provide for peer review by health care professionals 
        of the structure, processes, and outcomes related to the 
        provision of health services, including pediatric review of 
        pediatric cases;
            ``(4) include in member satisfaction surveys, questions on 
        child and family satisfaction and experience of care, including 
        care to children with special needs;
            ``(5) monitor and evaluate the continuity of care with 
        respect to children;
            ``(6) include pediatric measures that are directed at 
        meeting the needs of at-risk children and children with chronic 
        conditions, disabilities and severe illnesses;
            ``(7) maintain written guidelines to ensure the 
        availability of medications appropriate to children;
            ``(8) use focused studies of care received by children with 
        certain types of chronic conditions and disabilities and 
        focused studies of specialized services used by children with 
        chronic conditions and disabilities;
            ``(9) monitor access to pediatric specialty services; and
            ``(10) monitor child health care professional satisfaction.
    ``(c) Utilization Review Activities.--
            ``(1) Compliance with requirements.--
                    ``(A) In general.--A health insurance issuer that 
                offers health insurance coverage for children shall 
                conduct utilization review activities in connection 
                with the provision of such coverage only in accordance 
                with a utilization review program that meets at a 
                minimum the requirements of this subsection.
                    ``(B) Definitions.--In this subsection:
                            ``(i) Clinical peers.--The term `clinical 
                        peer' means, with respect to a review, a 
                        physician or other health care professional who 
                        holds a non-restricted license in a State and 
                        in the same or similar specialty as typically 
                        manages the pediatric medical condition, 
                        procedure, or treatment under review.
                            ``(ii) Health care professional.--The term 
                        `health care professional' means a physician or 
                        other health care practitioner licensed or 
                        certified under State law to provide health 
                        care services and who is operating within the 
                        scope of such licensure or certification.
                            ``(iii) Utilization review.--The terms 
                        `utilization review' and `utilization review 
activities' mean procedures used to monitor or evaluate the clinical 
necessity, appropriateness, efficacy, or efficiency of health care 
services, procedures or settings for children, and includes prospective 
review, concurrent review, second opinions, case management, discharge 
planning, or retrospective review specific to children.
            ``(2) Written policies and criteria.--
                    ``(A) Written policies.--A utilization review 
                program shall be conducted consistent with written 
                policies and procedures that govern all aspects of the 
                program.
                    ``(B) Use of written criteria.--A utilization 
                review program shall utilize written clinical review 
                criteria specific to children and developed pursuant to 
                the program with the input of appropriate physicians, 
                including pediatricians, nonprimary care pediatric 
                specialists, and other child health professionals.
                    ``(C) Administration by health care 
                professionals.--A utilization review program shall be 
                administered by qualified health care professionals, 
                including health care professionals with pediatric 
                expertise who shall oversee review decisions.
            ``(3) Use of qualified, independent personnel.--
                    ``(A) In general.--A utilization review program 
                shall provide for the conduct of utilization review 
                activities only through personnel who are qualified 
                and, to the extent required, who have received 
                appropriate pediatric or child health training in the 
                conduct of such activities under the program.
                    ``(B) Peer review of adverse clinical 
                determinations.--A utilization review program shall 
                provide that clinical peers shall evaluate the clinical 
                appropriateness of adverse clinical determinations and 
                divergent clinical options.

``SEC. 2773. APPEALS AND GRIEVANCE MECHANISMS FOR CHILDREN.

    ``(a) Internal Appeals Process.--A health insurance issuer in 
connection with the provision of health insurance coverage for children 
shall establish and maintain a system to provide for the resolution of 
complaints and appeals regarding all aspects of such coverage. Such a 
system shall include an expedited procedure for appeals on behalf of a 
child enrollee in situations in which the time frame of a standard 
appeal would jeopardize the life, health, or development of the child.
    ``(b) External Appeals Process.--A health insurance issuer in 
connection with the provision of health insurance coverage for children 
shall provide for an independent external review process that meets the 
following requirements:
            ``(1) External appeal activities shall be conducted through 
        clinical peers, a physician or other health care professional 
        who is appropriately credentialed in pediatrics with the same 
        or similar specialty and typically manages the condition, 
        procedure, or treatment under review or appeal.
            ``(2) External appeal activities shall be conducted through 
        an entity that has sufficient pediatric expertise, including 
        subspecialty expertise, and staffing to conduct external appeal 
        activities on a timely basis.
            ``(3) Such a review process shall include an expedited 
        procedure for appeals on behalf of a child enrollee in which 
        the time frame of a standard appeal would jeopardize the life, 
        health, or development of the child.

``SEC. 2774. ACCOUNTABILITY THROUGH DISTRIBUTION OF INFORMATION.

    ``(a) In General.--A health insurance issuer in connection with the 
provision of health insurance coverage for children shall submit to 
enrollees (and prospective enrollees), and make available to the 
public, in writing the health-related information described in 
subsection (b).
    ``(b) Information.--The information to be provided under subsection 
(a) shall include a report of measures of structures, processes, and 
outcomes regarding each health insurance product offered to 
participants and dependents in a manner that is separate for both the 
adult and child enrollees, using measures that are specific to each 
group.''.
    (b) Application to Group Health Insurance Coverage.--
            (1) In general.--Subpart 2 of part A of title XXVII of the 
        Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
        amended by adding at the end the following new section:

``SEC. 2707. CHILDREN'S HEALTH ACCOUNTABILITY STANDARDS.

    ``(a) In General.--Each health insurance issuer shall comply with 
children's health accountability requirement under part C with respect 
to group health insurance coverage it offers.
    ``(b) Assuring Coordination.--The Secretary of Health and Human 
Services and the Secretary of Labor shall ensure, through the execution 
of an interagency memorandum of understanding between such Secretaries, 
that--
            ``(1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which such 
        Secretaries have responsibility under part C (and this section) 
        and section 714 of the Employee Retirement Income Security Act 
        of 1974 are administered so as to have the same effect at all 
        times; and
            ``(2) coordination of policies relating to enforcing the 
        same requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.''.
            (2) Conforming amendment.--Section 2792 of the Public 
        Health Service Act (42 U.S.C. 300gg-92) is amended by inserting 
        ``and section 2707(b)'' after ``of 1996''.
    (c) Application to Individual Health Insurance Coverage.--Part B of 
title XXVII of the Public Health Service Act (42 U.S.C. 300gg-41 et 
seq.) is amended by inserting after section 2752 the following new 
section:

``SEC. 2753. CHILDREN'S HEALTH ACCOUNTABILITY STANDARDS.

    ``Each health insurance issuer shall comply with children's health 
accountability requirements under part C with respect to individual 
health insurance coverage it offers.''.
    (d) Modification of Preemption Standards.--
            (1) Group health insurance coverage.--Section 2723 of the 
        Public Health Service Act (42 U.S.C. 300gg-23) is amended--
                    (A) in subsection (a)(1), by striking ``subsection 
                (b)'' and inserting ``subsections (b) and (c)'';
                    (B) by redesignating subsections (c) and (d) as 
                subsections (d) and (e), respectively; and
                    (C) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Special Rules in Case of Children's Health Accountability 
Requirements.--Subject to subsection (a)(2), the provisions of section 
2707 and part C, and part D insofar as it applies to section 2707 or 
part C, shall not prevent a State from establishing requirements 
relating to the subject matter of such provisions so long as such 
requirements are at least as stringent on health insurance issuers as 
the requirements imposed under such provisions.''.
            (2) Individual health insurance coverage.--Section 2762 of 
        the Public Health Service Act (42 U.S.C. 300gg-62), as added by 
        section 605(b)(3)(B) of Public Law 104-204, is amended--
                    (A) in subsection (a), by striking ``subsection 
                (b), nothing in this part'' and inserting ``subsections 
                (b) and (c)'', and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Special Rules in Case of Children's Health Accountability 
Requirements.--Subject to subsection (b), the provisions of section 
2753 and part C, and part D insofar as it applies to section 2753 or 
part C, shall not prevent a State from establishing requirements 
relating to the subject matter of such provisions so long as such 
requirements are at least as stringent on health insurance issuers as 
the requirements imposed under such section.''.

SEC. 1214. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et 
seq.) is amended by adding at the end the following:

``SEC. 714. CHILDREN'S HEALTH ACCOUNTABILITY STANDARDS.

    ``(a) In General.--Subject to subsection (b), the provisions of 
part C of title XXVII of the Public Health Service Act shall apply 
under this subpart and part to a group health plan (and group health 
insurance coverage offered in connection with a group health plan) as 
if such part were incorporated in this section.
    ``(b) Application.--In applying subsection (a) under this subpart 
and part, any reference in such part C--
            ``(1) to health insurance coverage is deemed to be a 
        reference only to group health insurance coverage offered in 
        connection with a group health plan and to also be a reference 
        to coverage under a group health plan;
            ``(2) to a health insurance issuer is deemed to be a 
        reference only to such an issuer in relation to group health 
        insurance coverage or, with respect to a group health plan, to 
        the plan;
            ``(3) to the Secretary is deemed to be a reference to the 
        Secretary of Labor;
            ``(4) to an applicable State authority is deemed to be a 
        reference to the Secretary of Labor; and
            ``(5) to an enrollee with respect to health insurance 
        coverage is deemed to include a reference to a participant or 
        beneficiary with respect to a group health plan.''.
    (b) Modification of Preemption Standards.--Section 731 of the 
Employee Retirement Income Security Act of 1974 (42 U.S.C. 1191) is 
amended--
            (1) in subsection (a)(1), by striking ``subsection (b)'' 
        and inserting ``subsections (b) and (c)'';
            (2) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Special Rules in Case of Patient Accountability 
Requirements.--Subject to subsection (a)(2), the provisions of section 
714, shall not prevent a State from establishing requirements relating 
to the subject matter of such provisions so long as such requirements 
are at least as stringent on group health plans and health insurance 
issuers in connection with group health insurance coverage as the 
requirements imposed under such provisions.''.
    (c) Conforming Amendments.--
            (1) Section 732(a) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1185(a)) is amended by striking 
        ``section 711'' and inserting ``sections 711 and 714''.
            (2) The table of contents in section 1 of the Employee 
        Retirement Income Security Act of 1974 is amended by inserting 
        after the item relating to section 713 the following new item:

``Sec. 714. Children's health accountability standards.''.

SEC. 1215. STUDIES.

    (a) By Secretary.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
conduct a study, and prepare and submit to Congress a report, 
concerning--
            (1) the unique characteristics of patterns of illness, 
        disability, and injury in children;
            (2) the development of measures of quality of care and 
        outcomes related to the health care of children; and
            (3) the access of children to primary mental health 
        services and the coordination of managed behavioral health 
        services.
    (b) By GAO.--
            (1) Managed care.--Not later than 1 year after the date of 
        enactment of this Act, the General Accounting Office shall 
        conduct a study, and prepare and submit to the Committee on 
        Health, Education, Labor, and Pensions of the Senate and the 
        Committee on Energy and Commerce of the House of 
        Representatives a report, concerning--
                    (A) an assessment of the structure and performance 
                of non-governmental health plans, medicaid managed care 
                organizations, plans under title XIX of the Social 
                Security Act (42 U.S.C. 1396 et seq.), and the program 
                under title XXI of the Social Security Act (42 U.S.C. 
                1397aa et seq.) serving the needs of children with 
                special health care needs;
                    (B) an assessment of the structure and performance 
                of non-governmental plans in serving the needs of 
                children as compared to medicaid managed care 
                organizations under title XIX of the Social Security 
                Act (42 U.S.C. 1396 et seq.); and
                    (C) the emphasis that private managed care health 
                plans place on primary care and the control of services 
                as it relates to care and services provided to children 
                with special health care needs.
            (2) Plan survey.--Not later than 1 year after the date of 
        enactment of this Act, the General Accounting Office shall 
        prepare and submit to the Committee on Health, Education, 
        Labor, and Pensions of the Senate and the Committee on Energy 
        and Commerce of the House of Representatives a report that 
        contains a survey of health plan activities that address the 
        unique health needs of adolescents, including quality measures 
        for adolescents and innovative practice arrangement.

                            CHAPTER 3--EPSDT

SEC. 1221. COLLECTION OF DATA REGARDING THE DELIVERY OF EPSDT SERVICES.

    Section 1902(a)(43) of the Social Security Act (42 U.S.C. 
1396a(a)(43)) is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D)(iv), by striking the semicolon and 
        inserting ``, and''; and
            (3) by inserting after subparagraph (D)(iv), the following 
        new subparagraph:
                    ``(E) beginning with fiscal year 2003, reporting to 
                the Secretary (in a uniform form and manner established 
                by the Secretary that does not identify individual 
                patients and that allows for the comparison of data 
                within and among States) the following information 
                relating to early and periodic screening, diagnostic, 
                and treatment services provided to each child enrolled 
                under the plan during each fiscal year:
                            ``(i) as of the date of enrollment of the 
                        child, the child's--
                                    ``(I) age, State of residence, 
                                gender, and race/ethnicity,
                                    ``(II) the basis for eligibility 
                                for medical assistance,
                                    ``(III) immunization history,
                                    ``(IV) blood-lead level,
                                    ``(V) weight and height percentile 
                                compared to the widely accepted 
                                standard percentiles for the child's 
                                age,
                                    ``(VI) general health and any 
                                chronic conditions or disabilities, and
                                    ``(VII) the primary service 
                                delivery arrangement (such as fee-for-
                                service, managed care, preferred 
                                provider organization, or other 
                                provider practice arrangement); and
                            ``(ii) throughout the fiscal year (at such 
                        intervals as the Secretary shall specify)--
                                    ``(I) the number of medical 
                                screenings the child received and a 
                                specific description of the services 
                                performed as part of such screenings 
                                (such as the weighing and measuring of 
                                the child and the administering of a 
                                blood-lead level test),
                                    ``(II) the number of screenings the 
                                child received for vision and hearing 
                                problems,
                                    ``(III) the number of dental 
                                screenings the child received,
                                    ``(IV) information regarding 
                                whether a condition was discovered from 
                                any of such screenings, whether the 
                                child was referred for, and received, 
                                further treatment, and if so, the 
                                number of visits, and the treatments 
                                received, and
                                    ``(V) the actual or estimated costs 
                                of each of such screenings and 
                                treatments,
                                    ``(VI) information regarding 
                                whether such screenings and treatments 
                                are more comprehensive than similar 
screenings and treatments provided to adult individuals enrolled in the 
plan, and
                                    ``(VII) the service delivery 
                                arrangement for such screening and 
                                treatment provided;''.

                Subtitle D--Reducing Public Health Risks

                      CHAPTER 1--ASTHMA TREATMENTS

SEC. 1301. FINDINGS.

    Congress finds that--
            (1)(A) asthma is 1 of the most common and deadly diseases 
        in the United States, affecting an estimated 14,000,000 to 
        15,000,000 individuals in the United States, including almost 
        5,000,000 children;
            (B) asthma is the most common chronic illness in children, 
        affecting an estimated 7 percent of children in the United 
        States;
            (C) although asthma can occur at any age, about 80 percent 
        of the children who develop asthma do so before starting 
        school;
            (D) asthma is the single greatest cause of school 
        absenteeism, with 10,100,000 days missed from school per year 
        in the United States; and
            (E) according to a 1995 National Institutes of Health 
        workshop report, the cost of lost productivity from missed 
        school days for parents of children with asthma is estimated at 
        $1,000,000,000 per year; and
            (2)(A) vision and hearing screening is an essential part of 
        child health care;
            (B) a vision or hearing deficit may undermine a child's 
        ability to learn;
            (C) the Chicago public school system has determined through 
        vision screening that a far higher number of children 
        identified as failing academically suffer from vision 
        impairment;
            (D) students who have failed a grade 1 or more times are 
        even more likely to have a vision problem;
            (E) more than 30 percent of students in Chicago public 
        schools who were retained during the 1998-1999 school year 
        failed their school-based vision screening, a rate that is 50 
        percent higher than children who were not failing;
            (F) schools play a critical role in promoting a clear link 
        between visual and hearing acuity and academic performance;
            (G) providing vision and hearing screening in schools helps 
        children receive those essential health care services in a 
        timely fashion;
            (H) many parents find it difficult to take time off work in 
        order to ensure that their children receive preventive or other 
        nonemergency health care services; and
            (I) allowing children to receive nonemergency health care 
        services at school would ensure that the children receive 
        services that promote healthy lives and better academic 
        achievement.

SEC. 1302. ASTHMA, VISION, AND HEARING SCREENING FOR EARLY HEAD START 
              AND HEAD START PROGRAMS.

    (a) Early Head Start Programs.--Section 645A of the Head Start Act 
(42 U.S.C. 9840a) is amended by adding at the end the following:
    ``(h) Asthma, Vision, and Hearing Screening.--
            ``(1) In general.--An entity that receives assistance under 
        this section may carry out a program under which the entity--
                    ``(A) determines whether a child eligible to 
                participate in the program described in subsection 
                (a)(1) has received each of an asthma, vision, and 
                hearing screening test using a test that is appropriate 
                for age and risk factors on the enrollment of the child 
                in the program; and
                    ``(B) in the case of a child who has not received 
                each of an asthma, and vision, and hearing screening 
                test, ensures that the enrolled child receives such a 
                test either by referral or by performing the test 
                (under contract or otherwise).
            ``(2) Reimbursement.--
                    ``(A) In general.--On the request of an entity that 
                performs or arranges for the performance of an asthma, 
                vision, or hearing screening test under paragraph (1) 
                on a child who is eligible for or receiving medical 
                assistance under a State plan under title XIX of the 
                Social Security Act (42 U.S.C. 1396 et seq.), the 
                Secretary of Health and Human Services, notwithstanding 
                any other provision of, or limitation under, title XIX 
                of the Social Security Act, shall reimburse the entity, 
                from funds that are made available under that title, 
                for 100 percent of the cost of the test and data 
                reporting.
                    ``(B) Costs.--The costs of a test conducted under 
                this subsection--
                            ``(i) shall include reimbursement for 
                        testing devices and associated supplies 
                        approved for sale by the Food and Drug 
                        Administration and used in compliance with 
                        section 353 of the Public Health Service Act 
                        (42 U.S.C. 263a); and
                            ``(ii) shall include reimbursement for 
                        administering the tests and related services, 
                        as determined appropriate by the State agency.
            ``(3) Head start.--This subsection shall apply to Head 
        Start programs that include coverage, directly or indirectly, 
        for infants and toddlers under the age of 3 years.''.
    (b) Head Start Programs.--Section 642(b) of the Head Start Act (42 
U.S.C. 9837(b)) is amended--
            (1) in paragraph (10), by striking ``and'' at the end;
            (2) in paragraph (11), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(12) with respect to an agency that elects to carry out a 
        program under section 645(h), comply with the requirements of 
        such section 645A(h) in the case of each child eligible to 
participate in the Head Start program to be carried out by the 
agency.''.
    (c) Payments for Screening and Treatment Provided to Children 
Eligible Under Medicaid or SCHIP.--
            (1) Medicaid.--Section 1903(c) of the Social Security Act 
        (42 U.S.C. 1396b(c)) is amended--
                    (A) by inserting ``(1)'' after ``(c)''; and
                    (B) by adding at the end the following:
    ``(2) Nothing in this title or any other provision of law, 
including the payment limitation commonly known as the `free care 
rule', shall be construed as prohibiting or restricting, or authorizing 
the Secretary to prohibit or restrict, payment under subsection (a) for 
medical assistance for covered services furnished to a child who is 
eligible for or receiving medical assistance under the State plan and 
who receives an asthma, vision, hearing, or other health screening 
test, or is provided treatment, education in disease management, 
corrective eyewear, or hearing aids, through a public elementary or 
secondary school, whether directly or indirectly, and regardless of 
whether the school participates in a program established under 
subsection (a) or (b) of section 320B of the Public Health Service 
Act.''.
            (2) SCHIP.--Section 2105 of the Social Security Act (42 
        U.S.C.1397ee) is amended by adding at the end the following:
    ``(g) Required Payment for Certain School-Based Services.--Nothing 
in this title or any other provision of law (including the payment 
limitation under title XIX commonly known as the `free care rule' to 
the extent, if any, such limitation applies to the program established 
under this title), shall be construed as prohibiting or restricting, or 
authorizing the Secretary to prohibit or restrict, payment under 
subsection (a) for child health assistance for covered services 
furnished to a child who is eligible for or receiving such assistance 
under the State plan and who receives an asthma, vision, or hearing 
screening test, or other health screening test that is available to 
children receiving assistance under the State plan, or is provided 
treatment, education in disease management, corrective eyewear, or 
hearing aids through a public elementary or secondary school, whether 
directly or indirectly, and regardless of whether the school 
participates in a program established under subsection (a) or (b) of 
section 320B of the Public Health Service Act.''.

SEC. 1303. ASTHMA, VISION, AND HEARING SCREENING AND TREATMENT FOR 
              CHILDREN ENROLLED IN PUBLIC SCHOOLS.

    Part B of title III of the Public Health Service Act (42 U.S.C. 243 
et seq.) is amended by adding at the end the following:

``SEC. 320B. ASTHMA, VISION, AND HEARING SCREENING AND TREATMENT FOR 
              CHILDREN ENROLLED IN PUBLIC SCHOOLS.

    ``(a) Asthma Screening and Case Management Program.--
            ``(1) In general.--The Secretary, in collaboration with the 
        Secretary of Education, shall carry out an asthma screening and 
        case management program under which local educational agencies 
        shall be reimbursed for the provision of asthma screening and 
        case management to children enrolled in public elementary 
        schools and secondary schools located in areas with respect to 
        which there is a high incidence of childhood asthma.
            ``(2) Program elements.--Under the program, a local 
        educational agency shall--
                    ``(A) determine whether a child enrolled in a 
                school described in paragraph (1) has received an 
                asthma screening test using a test that is appropriate 
                for age and risk factors on the enrollment of the child 
                in the school;
                    ``(B) in the case of a child who has not received 
                an asthma screening test, ensure that the child 
                receives such a test either by referral or by 
                performing the test (under contract or otherwise); and
                    ``(C) in the case of a child determined to have 
                asthma, provide treatment or refer the child for 
                treatment (including case management) and education in 
                the management of asthma.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection with respect to 
        a child, and any data reporting with respect to the child, who 
        is not eligible for coverage under title XIX or XXI of the 
        Social Security Act, or is not otherwise covered under a health 
        insurance plan, $10,000,000 for each fiscal year.
    ``(b) Vision and Hearing Screening Program.--
            ``(1) In general.--The Secretary shall carry out a vision 
        and hearing screening program under which local educational 
        agencies shall be reimbursed for the provision of vision and 
        hearing screening and corrective eyewear and hearing aids to 
        children enrolled in public elementary schools and secondary 
        schools.
            ``(2) Program elements.--Under the program, a local 
        educational agency shall--
                    ``(A) elect to provide vision and hearing screening 
                tests--
                            ``(i) to all children enrolled in a school 
                        who are most likely to suffer from vision or 
                        hearing loss; or
                            ``(ii) to all children enrolled in a 
                        school;
                    ``(B) ensure that the category of children elected 
                under subparagraph (A) receive such tests, either by 
                referral or by performing the test (under contract or 
                otherwise), that are appropriate for the age and risk 
                factors of the children, based on the enrollment of the 
                children in the school; and
                    ``(C) in the case of any child determined to have a 
                vision or hearing impairment, provide the child with 
                such eyewear and hearing aids as are appropriate to 
                correct the child's vision or hearing, to the extent 
                that such correction is feasible.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection with respect to 
        a child, and any data reporting with respect to the child, who 
        is not eligible for coverage under title XIX or XXI of the 
        Social Security Act, or is not otherwise covered under a health 
        insurance plan, $10,000,000 for each fiscal year.
    ``(c) Reimbursement.--
            ``(1) Children enrolled in or eligible for medicaid.--
                    ``(A) In general.--With respect to a child who is 
                eligible for or receiving medical assistance under a 
                State plan under title XIX of the Social Security Act 
                (42 U.S.C. 1396 et seq.) and who receives, or is 
                provided, a test, treatment, education, corrective 
                eyewear, or hearing aid under a program established 
                under subsection (a) or (b), the Secretary, 
                notwithstanding any other provision of, or limitation 
                under, such title XIX, including the payment limitation 
                commonly known as the `free care rule', shall reimburse 
                the local educational agency administering such program 
                from funds that are made available under such title XIX 
                for 100 percent of the cost of the performance, 
                arrangement, or provision and data reporting.
                    ``(B) Costs.--The costs of a test conducted under 
                this section shall include reimbursement for--
                            ``(i) testing devices and associated 
                        supplies approved for sale by the Food and Drug 
                        Administration and used in compliance with 
                        section 353; and
                            ``(ii) administering the tests and related 
                        services, as determined appropriate by the 
                        State agency responsible for the administration 
                        of title XIX of the Social Security Act (42 
                        U.S.C. 1396 et seq.).
            ``(2) Children enrolled in or eligible for schip.--
                    ``(A) In general.--With respect to a child who is 
                eligible for or receiving child health assistance under 
                a State plan under title XXI of the Social Security Act 
                (42 U.S.C. 1397aa et seq.) and who receives, or is 
                provided, a test, treatment, education, corrective 
                eyewear, or hearing aid under a program established 
                under subsection (a) or (b), the Secretary, 
                notwithstanding any other provision of, or limitation 
                under, such title XXI, or any other provision of law 
                (including the payment limitation under title XIX 
                commonly known as the `free care rule' to the extent, 
                if any, such limitation applies to the State children's 
                health insurance program established under title XXI of 
                that Act), shall reimburse the local educational agency 
                administering such program from funds that are made 
                available under such title XXI for 100 percent of the 
                cost of the performance, arrangement, or provision and 
                data reporting.
                    ``(B) Costs.--The costs shall include the costs 
                described in paragraph (1)(B).
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to require that a local educational agency participate in a 
program carried out by the Secretary under this section.
    ``(e) Definitions.--In this section, the terms `local educational 
agency' and `elementary and secondary school' shall have the meanings 
given such terms in section 14101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 8801).''.

SEC. 1304. GENERAL EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this chapter take effect on the date that is 18 
months after the date of enactment of this Act.
    (b) Head Start Waivers.--
            (1) In general.--An entity carrying out activities under 
        section 642 or 645A of the Head Start Act (42 U.S.C. 9837, 
        9840a), may be awarded a waiver from the amendments made by 
        section 1302 if the State where the entity is located 
        establishes to the satisfaction of the Secretary of Health and 
        Human Services, in accordance with requirements and procedures 
        recommended in accordance with paragraph (2) to the Secretary 
        by the Director of the Centers for Disease Control and 
        Prevention a plan for increasing the number of asthma, vision, 
        and hearing screening tests of children enrolled in the Early 
        Head Start and Head Start programs in the State.
            (2) Development of waiver procedures and requirements.--Not 
        later than 1 year after the date of enactment of this Act, the 
        Director of the Centers for Disease Control and Prevention 
        shall develop and recommend to the Secretary of Health and 
        Human Services criteria and procedures (including a timetable 
        for the submission of the State plan described in paragraph 
        (1)) for the awarding of waivers under that paragraph.

            CHAPTER 2--INCREASE IN FUNDING FOR HUD PROGRAMS

SEC. 1311. LEAD-BASED PAINT HAZARD CONTROL GRANTS.

    Section 1011(p) of the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4852) is amended by striking 
``appropriated'' and all that follows through the period and inserting 
``appropriated--
            ``(1) $125,000,000 for fiscal year 1993 and $250,000,000 
        for fiscal year 1994;
            ``(2) $200,000,000 for fiscal year 2002;
            ``(3) $250,000,000 for fiscal year 2003; and
            ``(4) $300,000,000 beginning with fiscal year 2004 and 
        fiscal years thereafter.''.

SEC. 1312. HEALTHY HOMES INITIATIVE PROGRAM.

    There are authorized to be appropriated for the Healthy Homes 
Initiative program pursuant to sections 501 and 502 of the Housing and 
Urban Development Act of 1970, for which funds were provided under 
title II of the Departments of Veterans Affairs and Housing and Urban 
Development, Independent Agencies Appropriations Act, 2000--
            (1) $100,000,000 for fiscal year 2002; and
            (2) $150,000,000 beginning with fiscal year 2003 and fiscal 
        years thereafter.

            CHAPTER 3--YOUTH SMOKING CESSATION AND EDUCATION

SEC. 1321. SHORT TITLE.

    This chapter may be cited as the ``Kids Deserve Freedom from 
Tobacco Act of 2001'' or the ``KIDS Act''.

           Subchapter A--Protection of Children from Tobacco

PART I--FOOD AND DRUG ADMINISTRATION JURISDICTION AND GENERAL AUTHORITY

SEC. 1331. REFERENCE.

    Whenever in this subchapter an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et 
seq.).

SEC. 1332. STATEMENT OF GENERAL AUTHORITY.

    The regulations promulgated by the Secretary in the rule dated 
August 28, 1996 (Vol. 61, No. 168 C.F.R.), adding part 897 to title 21, 
Code of Federal Regulations, shall be deemed to have been lawfully 
promulgated under the Food, Drug, and Cosmetic Act as amended by this 
subchapter. Such regulations shall apply to all tobacco products.

SEC. 1333. NONAPPLICABILITY TO OTHER DRUGS OR DEVICES.

    Nothing in this subchapter, or an amendment made by this 
subchapter, shall be construed to affect the regulation of drugs and 
devices that are not tobacco products by the Secretary under the 
Federal Food, Drug, and Cosmetic Act.

SEC. 1334. CONFORMING AMENDMENTS TO CONFIRM JURISDICTION.

    (a) Definitions.--
            (1) Drug.--Section 201(g)(1) (21 U.S.C. 321(g)(1)) is 
        amended by striking ``; and (D)'' and inserting ``; (D) 
        nicotine in tobacco products; and (E)''.
            (2) Devices.--Section 201(h) (21 U.S.C. 321(h)) is amended 
        by adding at the end the following: ``Such term includes a 
        tobacco product.''.
            (3) Other definitions.--Section 201 (21 U.S.C. 321) is 
        amended by adding at the end the following:
            ``(kk) The term `tobacco product' means any product made or 
        derived from tobacco that is intended for human consumption.''.
    (b) Prohibited Acts.--Section 301 (21 U.S.C. 331) is amended by 
adding at the end the following:
    ``(aa) The manufacture, labeling, distribution, advertising and 
sale of any adulterated or misbranded tobacco product in violation of--
            ``(1) regulations issued under this Act; or
            ``(2) the KIDS Act, or regulations issued under such 
        Act.''.
    (c) Adulterated Drugs and Devices.--
            (1) In general.--Section 501 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 351) is amended by adding at the end 
        the following:
    ``(j) If it is a tobacco product and it does not comply with the 
provisions of subchapter D of this chapter or the KIDS Act.''.
            (2) Misbranding.--Section 502(q) (21 U.S.C. 352(q)) is 
        amended--
                    (A) by striking ``or (2)'' and inserting in lieu 
                thereof ``(2)''; and
                    (B) by inserting before the period the following: 
                ``, or (3) in the case of a tobacco product, it is 
                sold, distributed, advertised, labeled, or used in 
                violation of this Act or the KIDS Act, or regulations 
                prescribed under such Acts''.
    (d) Restricted Device.--Section 520(e) (21 U.S.C. 360j(e)) is 
amended--
            (1) in paragraph (1), by striking ``or use--'' and 
        inserting ``or use, including restrictions on the access to, 
        and the advertising and promotion of, tobacco products--''; and
            (2) by adding at the end the following:
    ``(3) Tobacco products are a restricted device under this 
paragraph.''.
    (e) Regulatory Authority.--Section 503(g) (21 U.S.C. 353(g)) is 
amended by adding at the end the following:
    ``(5) The Secretary may regulate any tobacco product as a drug, 
device, or both, and may designate the office of the Administration 
that shall be responsible for regulating such products.''.

SEC. 1335. GENERAL RULE.

    Section 513(a)(1)(B) (21 U.S.C. 360c(a)(1)(B)) is amended by adding 
at the end the following: ``The sale of tobacco products to adults that 
comply with performance standards established for these products under 
section 514 and other provisions of this Act and any regulations 
prescribed under this Act shall not be prohibited by the Secretary, 
notwithstanding sections 502(j), 516, and 518.''.

SEC. 1336. SAFETY AND EFFICACY STANDARD AND RECALL AUTHORITY.

    (a) Safety and Efficacy Standard.--Section 513(a) (21 U.S.C. 
360c(a)) is amended--
            (1) in paragraph (1)(B), by inserting after the first 
        sentence the following: ``For a device which is a tobacco 
        product, the assurance in the previous sentence need not be 
        found if the Secretary finds that special controls achieve the 
        best public health result.''; and
            (2) in paragraph (2)--
                    (A) by redesignating subparagraphs (A), (B) and (C) 
                as clauses (i), (ii) and (iii), respectively;
                    (B) by striking ``(2) For'' and inserting ``(2)(A) 
                For''; and
                    (C) by adding at the end the following:
    ``(B) For purposes of paragraph (1)(B), subsections (c)(2)(C), 
(d)(2)(B), (e)(2)(A), (f)(3)(B)(i), and (f)(3)(C)(i), and sections 514, 
519(a), 520(e), and 520(f), the safety and effectiveness of a device 
that is a tobacco product need not be found if the Secretary finds that 
the action to be taken under any such provision would achieve the best 
public health result. The finding as to whether the best public health 
result has been achieved shall be determined with respect to the risks 
and benefits to the population as a whole, including users and non-
users of the tobacco product, and taking into account--
            ``(i) the increased or decreased likelihood that existing 
        consumers of tobacco products will stop using such products; 
        and
            ``(ii) the increased or decreased likelihood that those who 
        do not use tobacco products will start using such products.''.
    (b) Recall Authority.--Section 518(e)(1) (21 U.S.C. 360h(e)(1)) is 
amended by inserting after ``adverse health consequences or death,'' 
the following: ``and for tobacco products that the best public health 
result would be achieved,''.

                PART II--REGULATION OF TOBACCO PRODUCTS

SEC. 1341. PERFORMANCE STANDARDS.

    Section 514(a) (21 U.S.C. 60d(a)) is amended--
            (1) in paragraph (2), by striking ``device'' and inserting 
        ``nontobacco product device'';
            (2) by redesignating paragraphs (3) and (4) as paragraphs 
        (6) and (7), respectively; and
            (3) by inserting after paragraph (2) the following:
    ``(3) The Secretary may adopt a performance standard under section 
514(a)(2) for a tobacco product regardless of whether the product has 
been classified under section 513. Such standard may--
            ``(A) include provisions to achieve the best public health 
        result;
            ``(B) where necessary to achieve the best public health 
        result, include--
                    ``(i) provisions respecting the construction, 
                components, constituents, ingredients, and properties 
                of the tobacco product device, including the reduction 
                or elimination (or both) of nicotine and the other 
                components, ingredients, and constituents of the 
                tobacco product, its components and its by-products, 
                based upon the best available technology;
                    ``(ii) provisions for the testing (on a sample 
                basis or, if necessary, on an individual basis) of the 
                tobacco product device or, if it is determined that no 
                other more practicable means are available to the 
                Secretary to assure the conformity of the tobacco 
                product device to such standard, provisions for the 
                testing (on a sample basis or, if necessary, on an 
                individual basis) by the Secretary or by another person 
                at the direction of the Secretary;
                    ``(iii) provisions for the measurement of the 
                performance characteristics of the tobacco product 
                device;
                    ``(iv) provisions requiring that the results of 
                each test or of certain tests of the tobacco product 
                device required to be made under clause (ii) 
                demonstrate that the tobacco product device is in 
                conformity with the portions of the standard for which 
                the test or tests were required; and
                    ``(v) a provision that the sale and distribution of 
                the tobacco product device be restricted but only to 
                the extent that the sale and distribution of a tobacco 
                product device may otherwise be restricted under this 
                Act; and
            ``(C) where appropriate, require the use and prescribe the 
        form and content of labeling for the use of the tobacco product 
        device.
    ``(4) Not later than 1 year after the date of enactment of the KIDS 
Act, the Secretary (acting through the Commissioner of Food and Drugs) 
shall establish a Scientific Advisory Committee to evaluate whether a 
level or range of levels exists at which nicotine yields do not produce 
drug-dependence. The Advisory Committee shall also review any other 
safety, dependence or health issue assigned to it by the Secretary. The 
Secretary need not promulgate regulations to establish the 
Committee.''.

SEC. 1342. APPLICATION OF FEDERAL FOOD, DRUG, AND COSMETIC ACT TO 
              TOBACCO PRODUCTS.

    (a) Tobacco Products Regulation.--Chapter V (21 U.S.C. 351 et seq.) 
is amended by adding at the end the following:

``SUBCHAPTER F--TOBACCO PRODUCT DEVELOPMENT, MANUFACTURING, AND ACCESS 
                              RESTRICTIONS

``SEC. 570. PROMULGATION OF REGULATIONS.

    ``Any regulations necessary to implement this subchapter shall be 
promulgated not later than 12 months after the date of enactment of 
this subchapter using notice and comment rulemaking (in accordance with 
chapter 5 of title 5, United States Code). Such regulations may be 
revised thereafter as determined necessary by the Secretary.

``SEC. 571. MAIL-ORDER SALES.

    ``(a) In General.--Not later than 2 years after the date of 
enactment of this subchapter, the Secretary shall review and determine 
whether persons under the age of 18 years are obtaining tobacco 
products by means of the mail.
    ``(b) Restrictions.--Based solely upon the review conducted under 
subsection (a), the Secretary may take regulatory and administrative 
action to restrict or eliminate mail order sales of tobacco products.

``SEC. 572. IMPLEMENTATION OF THE PROPOSED RESOLUTION.

    ``(a) Additional Restrictions on Marketing, Advertising, and 
Access.--Not later than 18 months after the date of the enactment of 
this subchapter, the Secretary shall revise the regulations related to 
tobacco products promulgated by the Secretary on August 28, 1996 (61 
Fed. Reg. 44396) to include the additional restrictions on marketing, 
advertising, and access described in Title IA and Title IC of the 
Proposed Resolution entered into by the tobacco manufacturers and the 
State attorneys general on June 20, 1997, except that the Secretary 
shall not include an additional restriction on marketing or advertising 
in such regulations if its inclusion would violate the First Amendment 
to the Constitution.
    ``(b) Warnings.--Not later than 18 months after the date of the 
enactment of this subchapter, the Secretary shall promulgate 
regulations to require warnings on cigarette and smokeless tobacco 
labeling and advertisements. The content, format, and rotation of 
warnings shall conform to the specifications described in Title IB of 
the Proposed Resolution entered into by the tobacco manufacturers and 
the State attorneys general on June 20, 1997.
    ``(c) Rules of Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to limit the ability of the Secretary to change the 
        text or layout of any of the warning statements, or any of the 
        labeling provisions, under the regulations promulgated under 
        subsection (b) and other provisions of this Act, if determined 
        necessary by the Secretary in order to make such statements or 
        labels larger, more prominent, more conspicuous, or more 
        effective.
            ``(2) Unfair acts.--Nothing in this section (other than the 
        requirements of subsections (a) and (b)) shall be construed to 
        limit or restrict the authority of the Federal Trade Commission 
        with respect to unfair or deceptive acts or practices in the 
        advertising of tobacco products.
    ``(d) Limited Preemption.--
            ``(1) State and local action.--No warning label with 
        respect to tobacco products, or any other tobacco product for 
        which warning labels have been required under this section, 
        other than the warning labels required under this Act, shall be 
        required by any State or local statute or regulation to be 
        included on any package of a tobacco product.
            ``(2) Effect on liability law.--Nothing in this section 
        shall relieve any person from liability at common law or under 
        State statutory law to any other person.
    ``(e) Violation of Section.--Any tobacco product that is in 
violation of this section shall be deemed to be misbranded.

``SEC. 573. GENERAL RESPONSIBILITIES OF MANUFACTURERS, DISTRIBUTORS AND 
              RETAILERS.

    ``Each manufacturer, distributor, and retailer shall ensure that 
the tobacco products it manufactures, labels, advertises, packages, 
distributes, sells, or otherwise holds for sale comply with all 
applicable requirements of this Act.

``SEC. 574. DISCLOSURE AND REPORTING OF TOBACCO AND NONTOBACCO 
              INGREDIENTS AND CONSTITUENTS.

    ``(a) Disclosure of All Ingredients.--
            ``(1) Immediate and annual disclosure.--Not later than 30 
        days after the date of enactment of this subchapter, and 
        annually thereafter, each manufacturer of a tobacco product 
        shall submit to the Secretary an ingredient list for each brand 
        of tobacco product it manufactures that contains the 
        information described in paragraph (2).
            ``(2) Requirements.--The list described in paragraph (1) 
        shall, with respect to each brand or variety of tobacco product 
        of a manufacturer, include--
                    ``(A) a list of all ingredients, constituents, 
                substances, and compounds that are found in or added to 
                the tobacco or tobacco product (including the paper, 
                filter, or packaging of the product if applicable) in 
                the manufacture of the tobacco product, for each brand 
                or variety of tobacco product so manufactured, 
                including, if determined necessary by the Secretary, 
                any material added to the tobacco used in the product 
                prior to harvesting;
                    ``(B) the quantity of the ingredients, 
                constituents, substances, and compounds that are listed 
                under subparagraph (A) in each brand or variety of 
                tobacco product;
                    ``(C) the nicotine content of the product, measured 
                in milligrams of nicotine;
                    ``(D) for each brand or variety of cigarettes--
                            ``(i) the filter ventilation percentage 
                        (the level of air dilution in the cigarette as 
                        provided by the ventilation holes in the 
                        filter, described as a percentage);
                            ``(ii) the pH level of the smoke of the 
                        cigarette; and
                            ``(iii) the tar, unionized (free) nicotine, 
                        and carbon monoxide delivery level and any 
                        other smoking conditions established by the 
                        Secretary, reported in milligrams of tar, 
                        nicotine, and carbon monoxide per cigarette;
                    ``(E) for each brand or variety of smokeless 
                tobacco products--
                            ``(i) the pH level of the tobacco;
                            ``(ii) the moisture content of the tobacco 
                        expressed as a percentage of the weight of the 
                        tobacco; and
                            ``(iii) the nicotine content--
                                    ``(I) for each gram of the product, 
                                measured in milligrams of nicotine;
                                    ``(II) expressed as a percentage of 
                                the dry weight of the tobacco; and
                                    ``(III) with respect to unionized 
                                (free) nicotine, expressed as a 
                                percentage per gram of the tobacco and 
                                expressed in milligrams per gram of the 
                                tobacco; and
                    ``(F) any other information determined appropriate 
                by the Secretary.
            ``(3) Methods.--The Secretary shall have the authority to 
        promulgate regulations to establish the methods to be used by 
        manufacturers in making the determinations required under 
        paragraph (2).
            ``(4) Other tobacco products.--The Secretary shall 
        prescribe such regulations as may be necessary to establish 
        information disclosure procedures for other tobacco products.
    ``(b) Safety Assessments.--
            ``(1) Application to new ingredients.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subchapter, and annually 
                thereafter, each manufacturer shall submit to the 
                Secretary a safety assessment for each new ingredient, 
                constituent, substance, or compound that such 
                manufacturer desires to make a part of a tobacco 
                product. Such new ingredient, constituent, substance, 
                or compound shall not be included in a tobacco product 
                prior to approval by the Secretary of such a safety 
                assessment.
                    ``(B) Method of filing.--A safety assessment 
                submitted under subparagraph (A) shall be signed by an 
                officer of the manufacturer who is acting on behalf of 
                the manufacturer and who has the authority to bind the 
                manufacturer, and contain a statement that ensures that 
                the information contained in the assessment is true, 
                complete and accurate.
                    ``(C) Definition of new ingredient.--For purposes 
                of subparagraph (A), the term `new ingredient, 
                constituent, substance, or compound' means an 
                ingredient, constituent, substance, or compound listed 
                under subsection (a)(1) that was not used in the brand 
                or variety of tobacco product involved prior to January 
                1, 1998.
            ``(2) Application to other ingredients.--With respect to 
        the application of this section to ingredients, constituents 
        substances, or compounds listed under subsection (a) to which 
        paragraph (1) does not apply, all such ingredients, 
        constituents, substances, or compounds shall be reviewed 
        through the safety assessment process within the 5-year period 
        beginning on the date of enactment of this subchapter. The 
        Secretary shall develop a procedure for the submission of 
        safety assessments of such ingredients, constituents, 
        substances, or compounds that staggers such safety assessments 
        within the 5-year period.
            ``(3) Basis of assessment.--The safety assessment of an 
        ingredient, constituent, substance, or compound described in 
        paragraphs (1) and (2) shall--
                    ``(A) be based on the best scientific evidence 
                available at the time of the submission of the 
                assessment; and
                    ``(B) demonstrate that there is a reasonable 
                certainty among experts qualified by scientific 
                training and experience who are consulted, that the 
                ingredient, constituent, substance, or compound will 
                not present any risk to consumers or the public in the 
                quantities used under the intended conditions of use.
    ``(c) Prohibition.--
            ``(1) Regulations.--Not later than 12 months after the date 
        of enactment of this subchapter, the Secretary shall promulgate 
        regulations to prohibit the use of any ingredient, constituent, 
        substance, or compound in the tobacco product of a 
        manufacturer--
                    ``(A) if no safety assessment has been submitted by 
                the manufacturer for the ingredient, constituent, 
                substance, or compound as otherwise required under this 
                section; or
                    ``(B) if the Secretary finds that the manufacturer 
                has failed to demonstrate the safety of the ingredient, 
                constituent, substance, or compound that was the 
                subject of the assessment under paragraph (2).
            ``(2) Review of assessments.--
                    ``(A) General review.--Not later than 180 days 
                after the receipt of a safety assessment under 
                subsection (b), the Secretary shall review the findings 
                contained in such assessment and approve or disapprove 
                of the safety of the ingredient, constituent, 
                substance, or compound that was the subject of the 
                assessment. The Secretary may, for good cause, extend 
                the period for such review. The Secretary shall provide 
                notice to the manufacturer of an action under this 
                subparagraph.
                    ``(B) Inaction by secretary.--If the Secretary 
                fails to act with respect to an assessment of an 
                existing ingredient, constituent, substance, or 
                additive during the period referred to in subparagraph 
                (A), the manufacturer of the tobacco product involved 
                may continue to use the ingredient, constituent, 
                substance, or compound involved until such time as the 
                Secretary makes a determination with respect to the 
                assessment.
    ``(d) Right To Know; Full Disclosure of Ingredients to the 
Public.--
            ``(1) In general.--Except as provided in paragraph (3), a 
        package of a tobacco product shall disclose all ingredients, 
        constituents, substances, or compounds contained in the product 
        in accordance with regulations promulgated under section 701(a) 
        by the Secretary.
            ``(2) Disclosure of percentage of domestic and foreign 
        tobacco.--The regulations referred to in paragraph (1) shall 
        require that the package of a tobacco product disclose, with 
        respect to the tobacco contained in the product--
                    ``(A) the percentage that is domestic tobacco; and
                    ``(B) the percentage that is foreign tobacco.
            ``(3) Health disclosure.--Notwithstanding section 301(j), 
        the Secretary may require the public disclosure of any 
        ingredient, constituent, substance, or compound contained in a 
        tobacco product that relates to a trade secret or other matter 
        referred to in section 1905 of title 18, United States Code, if 
        the Secretary determines that such disclosure will promote the 
        public health.

``SEC. 575. REDUCED RISK PRODUCTS.

    ``(a) Prohibition.--
            ``(1) In general.--No manufacturer, distributor or retailer 
        of tobacco products may make any direct or implied statement in 
        advertising or on a product package that could reasonably be 
        interpreted to state or imply a reduced health risk associated 
        with a tobacco product unless the manufacturer demonstrates to 
        the Secretary, in such form as the Secretary may require, that 
        based on the best available scientific evidence the product 
        significantly reduces the overall health risk to the public 
        when compared to other tobacco products.
            ``(2) Submission to secretary.--Prior to making any 
        statement described in paragraph (1), a manufacturer, 
        distributor or retailer shall submit such statement to the 
        Secretary, who shall review such statement to ensure its 
        accuracy and, in the case of advertising, to prevent such 
        statement from increasing, or preventing the contraction of, 
        the size of the overall market for tobacco products.
    ``(b) Determination by Secretary.--If the Secretary determines that 
a statement described in subsection (a)(2) is permissible because the 
tobacco product does present a significantly reduced overall health 
risk to the public, the Secretary may permit such statement to be made.
    ``(c) Development or Acquisition of Reduced Risk Technology.--
            ``(1) In general.--Any manufacturer that develops or 
        acquires any technology that the manufacturer reasonably 
        believes will reduce the risk from tobacco products shall 
        notify the Secretary of the development or acquisition of the 
        technology. Such notice shall be in such form and within such 
        time as the Secretary shall require.
            ``(2) Confidentiality.--With respect to any technology 
        described in paragraph (1) that is in the early stages of 
        development (as determined by the Secretary), the Secretary 
        shall establish protections to ensure the confidentiality of 
        any proprietary information submitted to the Secretary under 
        this subsection during such development.

``SEC. 576. ACCESS TO COMPANY INFORMATION.

    ``(a) Compliance Procedures.--Each manufacturer of tobacco products 
shall establish procedures to ensure compliance with this Act.
    ``(b) Requirement.--In addition to any other disclosure obligations 
under this Act, the KIDS Act, or any other law, each manufacturer of 
tobacco products shall, not later than 90 days after the date of the 
enactment of the KIDS Act and thereafter as required by the Secretary, 
disclose to the Secretary all nonpublic information and research in its 
possession or control relating to the addiction or dependency, or the 
health or safety of tobacco products, including (without limitation) 
all research relating to processes to make tobacco products less 
hazardous to consumers and the research and documents described in 
subsection (c).
    ``(c) Research and Documents.--The documents described in this 
section include any documents concerning tobacco product research 
relating to--
            ``(1) nicotine, including--
                    ``(A) the interaction between nicotine and other 
                components in tobacco products including ingredients in 
                the tobacco and smoke components;
                    ``(B) the role of nicotine in product design and 
                manufacture, including product charters, and parameters 
                in product development, the tobacco blend, filter 
                technology, and paper;
                    ``(C) the role of nicotine in tobacco leaf 
                purchasing;
                    ``(D) reverse engineering activities involving 
                nicotine (such as analyzing the products of other 
                companies);
                    ``(E) an analysis of nicotine delivery; and
                    ``(F) the biology, psychopharmacology and any other 
                health effects of nicotine;
            ``(2) other ingredients, including--
                    ``(A) the identification of ingredients in tobacco 
                products and constituents in smoke, including additives 
                used in product components such as paper, filter, and 
                wrapper;
                    ``(B) any research on the health effects of 
                ingredients; and
                    ``(C) any research or other information explaining 
                what happens to ingredients when they are heated and 
                burned;
            ``(3) less hazardous or safer products, including any 
        research or product development information on activities 
        involving reduced risk, less hazardous, low-tar or reduced-tar, 
        low-nicotine or reduced-nicotine or nicotine-free products; and
            ``(4) tobacco product advertising, marketing and promotion, 
        including--
                    ``(A) documents related to the design of 
                advertising campaigns, including the desired 
                demographics for individual products on the market or 
                being tested;
                    ``(B) documents concerning the age of initiation of 
                tobacco use, general tobacco use behavior, beginning 
                smokers, pre-smokers, and new smokers;
                    ``(C) documents concerning the effects of 
                advertising; and
                    ``(D) documents concerning future marketing options 
                or plans in light of the requirements and regulations 
                to be imposed under this subchapter or the KIDS Act.
    ``(d) Authority of Secretary.--With respect to tobacco product 
manufacturers, the Secretary shall have the same access to records and 
information and inspection authority as is available with respect to 
manufacturers of other medical devices.

``SEC. 577. OVERSIGHT OF TOBACCO PRODUCT MANUFACTURING.

    ``The Secretary shall by regulation prescribe good manufacturing 
practice standards for tobacco products. Such regulations shall be 
modeled after good manufacturing practice regulations for medical 
devices, food, and other items under section 520(f). Such standards 
shall be directed specifically toward tobacco products, and shall 
include--
            ``(1) a quality control system, to ensure that tobacco 
        products comply with such standards;
            ``(2) a system for inspecting tobacco product materials to 
        ensure their compliance with such standards;
            ``(3) requirements for the proper handling of finished 
        tobacco products;
            ``(4) strict tolerances for pesticide chemical residues in 
        or on tobacco or tobacco product commodities in the possession 
        of the manufacturer, except that nothing in this paragraph 
        shall be construed to affect any authority of the Environmental 
        Protection Agency;
            ``(5) authority for officers or employees of the Secretary 
        to inspect any factory, warehouse, or other establishment of 
        any tobacco product manufacturer, and to have access to 
        records, files, papers, processes, controls and facilities 
        related to tobacco product manufacturing, in accordance with 
        appropriate authority and rules promulgated under this Act; and
            ``(6) a requirement that the tobacco product manufacturer 
        maintain such files and records as the Secretary may specify, 
        as well as that the manufacturer report to the Secretary such 
        information as the Secretary shall require, in accordance with 
        section 519.

``SEC. 578. PRESERVATION OF STATE AND LOCAL AUTHORITY.

    ``Notwithstanding section 521 and except as otherwise provided for 
in section 572(e), nothing in this subchapter shall be construed as 
prohibiting a State or locality from imposing requirements, 
prohibitions, penalties or other measures to further the purposes of 
this subchapter that are in addition to the requirements, prohibitions, 
or penalties required under this subchapter. State and local 
governments may impose additional tobacco product control measures to 
further restrict or limit the use of such products.''.

SEC. 1343. FUNDING.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this part (and 
the amendments made by this part).
    (b) Trigger.--No expenditures shall be made under this part (or the 
amendments made by this part) during any fiscal year in which the 
annual amount appropriated for the Food and Drug Administration is less 
than the amount so appropriated for the prior fiscal year.

SEC. 1344. REPEALS.

    The following provisions of law are repealed:
            (1) The Federal Cigarette Labeling and Advertising Act (15 
        U.S.C. 1331 et seq.), except for sections 5(d)(1) and (2) and 
        6.
            (2) The Comprehensive Smokeless Tobacco Health Education 
        Act of 1986 (15 U.S.C. 4401 et seq.), except for sections 3(f) 
        and 8(a) and (b).
            (3) The Comprehensive Smoking Education Act of 1964 (Public 
        Law 98-474).

                 Subchapter B--Miscellaneous Provisions

SEC. 1351. NONAPPLICATION TO TOBACCO PRODUCERS.

    (a) In General.--This chapter and the amendments made by this 
chapter shall not apply to the producers of tobacco leaf, including 
tobacco growers, tobacco warehouses, and tobacco grower cooperatives.
    (b) Rule of Construction.--Nothing in this chapter, or an amendment 
made by this chapter, shall be construed to provide the Secretary of 
Health and Human Services with the authority to--
            (1) enter onto a farm owned by a producer of tobacco leaf 
        without the written consent of such producer; or
            (2) promulgate regulations on any matter that involves the 
        production of tobacco leaf or a producer thereof, other than 
        activities by a manufacturer that affect production.
    (c) Manufacturer Acting as Producer.--Notwithstanding any other 
provision of this section, if a producer of tobacco leaf is also a 
tobacco product manufacturer or is owned or controlled by a tobacco 
product manufacturer, the producer shall be subject to the provisions 
of this chapter, and the amendments made by this chapter, in the 
producer's capacity as a manufacturer.
    (d) Definition.--In this section, the term ``controlled by'' means 
a producer that is a member of the same controlled group of 
corporations, as that term is used for purposes of section 52(a) of the 
Internal Revenue Code of 1986, or under common control within the 
meaning of the regulations promulgated under section 52(b) of such 
Code.

SEC. 1352. EQUAL TREATMENT OF RETAIL OUTLETS.

    The Secretary of Health and Human Services shall promulgate 
regulations to require that retail establishments that are accessible 
to individuals under the age of 18, for which the predominant business 
is the sale of tobacco products, comply with any advertising 
restrictions applicable to such establishments.

             CHAPTER 4--COVERAGE OF CHILDHOOD IMMUNIZATIONS

SEC. 1361. SHORT TITLE.

    This chapter be cited as the ``Comprehensive Insurance Coverage of 
Childhood Immunization Act of 2001''.

SEC. 1362. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et 
seq.), as amended by section 1214, is further amended by adding at the 
end the following:

``SEC. 715. STANDARD RELATING TO COVERAGE OF CHILDHOOD IMMUNIZATION.

    ``(a) In General.--A group health plan, and a health insurance 
issuer offering health insurance coverage in connection with a group 
health plan, shall provide for each plan year comprehensive coverage 
for routine immunizations for each individual who is a dependent of a 
participant or beneficiary under the plan and is under 19 years of age.
    ``(b) Comprehensive Coverage.--For purposes of this section, 
comprehensive coverage for routine immunizations for a plan year 
consists of coverage, without deductibles, coinsurance, or other cost-
sharing, for immunizations (including the vaccine itself) in accordance 
with the most recent version of the Recommended Childhood Immunization 
Schedule issued prior to such plan year by the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
the Employee Retirement Income Security Act of 1974, as amended by 
section 1214, is further amended by inserting after the item relating 
to section 714 the following new item:

``Sec. 715. Standard relating to coverage of childhood immunization.''.

SEC. 1363. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Group Market.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-4 et seq.) is amended by adding at 
the end the following:

``SEC. 2707. STANDARD RELATING TO COVERAGE OF CHILDHOOD IMMUNIZATION.

    ``(a) In General.--A group health plan, and a health insurance 
issuer offering health insurance coverage in connection with a group 
health plan, shall provide for each plan year comprehensive coverage 
for routine immunizations for each individual who is a dependent of a 
participant or beneficiary under the plan and is under 19 years of age.
    ``(b) Comprehensive Coverage.--For purposes of this section, 
comprehensive coverage for routine immunizations for a plan year 
consists of coverage, without deductibles, coinsurance, or other cost-
sharing, for immunizations (including the vaccine itself) in accordance 
with the most recent version of the Recommended Childhood Immunization 
Schedule issued prior to such plan year by the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention.''.
    (b) Individual Market.--The first subpart 3 of part B of title 
XXVII of the Public Health Service Act (42 U.S.C. 300gg-51 et seq.) 
(relating to other requirements) (42 U.S.C. 300gg-51 et seq.) is 
amended--
            (1) by redesignating such subpart as subpart 2; and
            (2) by inserting after section 2753, as added by section 
        1213(c), the following:

``SEC. 2754. STANDARD RELATING TO COVERAGE OF CHILDHOOD IMMUNIZATION.

    ``The provisions of section 2707 shall apply to health insurance 
coverage offered by a health insurance issuer in the individual market 
in the same manner as they apply to health insurance coverage offered 
by a health insurance issuer in connection with a group health plan in 
the small or large group market.''.

SEC. 1364. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is 
amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9812 the following new item:

                              ``Sec. 9813. Standard relating to 
                                        coverage of childhood 
                                        immunization.'';
        and
            (2) by inserting after section 9812 the following:

``SEC. 9813. STANDARD RELATING TO COVERAGE OF CHILDHOOD IMMUNIZATION.

    ``(a) In General.--A group health plan shall provide for each plan 
year comprehensive coverage for routine immunizations for each 
individual who is a dependent of a participant or beneficiary under the 
plan and is under 19 years of age.
    ``(b) Comprehensive Coverage.--For purposes of this section, 
comprehensive coverage for routine immunizations for a plan year 
consists of coverage, without deductibles, coinsurance, or other cost-
sharing, for immunizations (including the vaccine itself) in accordance 
with the most recent version of the Recommended Childhood Immunization 
Schedule issued prior to such plan year by the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention.''.

SEC. 1365. EFFECTIVE DATES.

    (a) Group Health Insurance Coverage.--Subject to subsection (c), 
the amendments made by sections 1362, 1363(a), and 1364 apply with 
respect to group health plans for plan years beginning on or after 
January 1, 2002.
    (b) Individual Health Insurance Coverage.--The amendment made by 
section 1363(b) applies with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated in the 
individual market on or after such date.
    (c) Collective Bargaining Exception.--In the case of a group health 
plan maintained pursuant to 1 or more collective bargaining agreements 
between employee representatives and 1 or more employers ratified 
before the date of enactment of this Act, the amendments made sections 
1362, 1363(a), and 1364 shall not apply to plan years beginning before 
the later of--
            (1) the earliest date as of which all such collective 
        bargaining agreements relating to the plan have terminated 
        (determined without regard to any extension thereof agreed to 
        after the date of the enactment of this Act), or
            (2) January 1, 2002.
For purposes of paragraph (1), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by sections 1362, 
1363(a), and 1364 shall not be treated as a termination of such 
collective bargaining agreement.

            Subtitle E--Reducing Environmental Health Risks

            CHAPTER 1--ENVIRONMENTAL PROTECTION OF CHILDREN

SEC. 1401. SHORT TITLE.

    This chapter may be cited as the ``Children's Environmental 
Protection Act''.

SEC. 1402. ENVIRONMENTAL PROTECTION FOR CHILDREN AND OTHER VULNERABLE 
              SUBPOPULATIONS.

    The Toxic Substances Control Act (15 U.S.C. 2601 et seq.) is 
amended by adding at the end the following:

 ``TITLE V--ENVIRONMENTAL PROTECTION FOR CHILDREN AND OTHER VULNERABLE 
                             SUBPOPULATIONS

``SEC. 501. FINDINGS AND POLICY.

    ``(a) Findings.--Congress finds that--
            ``(1) the protection of public health and safety depends on 
        individuals and government officials being aware of the 
        pollution dangers that exist in their homes, schools, and 
        communities, and whether those dangers present special threats 
        to the health of children and other vulnerable subpopulations;
            ``(2) children spend much of their young lives in schools 
        and day care centers, and may face significant exposure to 
        pesticides and other environmental pollutants in those 
        locations;
            ``(3) the metabolism, physiology, and diet of children, and 
        exposure patterns of children to environmental pollutants, 
        differ from those of adults, and those differences and the 
        inherent nature of immature and developing systems of children 
        can make children more susceptible than adults to the harmful 
        effects of environmental pollutants;
            ``(4) a study conducted by the National Academy of Sciences 
        that particularly considered the effects of pesticides on 
        children concluded that current approaches to assessing 
        pesticide risks typically do not consider risks to children 
        and, as a result, current standards and tolerances often fail 
        to adequately protect children;
            ``(5) there are often insufficient data to enable the 
        Administrator, when establishing an environmental and public 
        health standard for an environmental pollutant, to evaluate the 
        special susceptibility or exposure of children to environmental 
        pollutants;
            ``(6) when data are lacking to evaluate the special 
        susceptibility or exposure of children to an environmental 
        pollutant, the Administrator generally--
                    ``(A) does not presume that the environmental 
                pollutant presents a special risk to children; and
                    ``(B) does not apply a special or additional margin 
                of safety to protect the health of children in 
                establishing an environmental or public health standard 
                for that pollutant; and
            ``(7) safeguarding children from environmental pollutants 
        requires the systematic collection of data concerning the 
        special susceptibility and exposure of children to those 
        pollutants, and the adoption of an additional safety factor of 
        at least 10-fold in the establishment of environmental and 
        public health standards where reliable data are not available.
    ``(b) Policy.--It is the policy of the United States that--
            ``(1) the public has the right to be informed about the 
        pollution dangers to which children are being exposed in their 
        homes, schools and communities, and how those dangers may 
        present special health threats to children and other vulnerable 
        subpopulations;
            ``(2) each environmental and public health standard for an 
        environmental pollutant established by the Administrator must, 
        with an adequate margin of safety, protect children and other 
        vulnerable subpopulations;
            ``(3) where data sufficient to evaluate the special 
        susceptibility and exposure of children (including exposure in 
        utero) to an environmental pollutant are lacking, the 
        Administrator should presume that the environmental pollutant 
        poses a special risk to children and should apply an 
        appropriate additional margin of safety of at least 10-fold in 
        establishing an environmental or public health standard for 
        that environmental pollutant;
            ``(4) since it is difficult to identify all conceivable 
        risks and address all uncertainties associated with pesticide 
        use, the use of dangerous pesticides in schools and day care 
        centers should be eliminated; and
            ``(5) the Environmental Protection Agency, the Department 
        of Health and Human Services (including the National Institute 
        of Environmental Health Sciences and the Agency for Toxic 
        Substances and Disease Registry), the National Institutes of 
        Health, and other Federal agencies should support research on 
        the short-term and long-term health effects of cumulative and 
        synergistic exposures of children and other vulnerable 
        subpopulations to environmental pollutants.

``SEC. 502. DEFINITIONS.

    ``In this title:
            ``(1) Child.--The term `child' means an individual 18 years 
        of age or younger.
            ``(2) Committee.--The term `Committee' means the Children's 
        Environmental Health Protection Advisory Committee established 
        under section 506.
            ``(3) Day care center.--The term `day care center' means a 
        center-based child care provider that is licensed, regulated, 
        or registered under applicable State or local law.
            ``(4) Environmental pollutant.--The term `environmental 
        pollutant' includes--
                    ``(A) a hazardous substance (as defined in section 
                101 of the Comprehensive Environmental Response, 
                Compensation, and Liability Act of 1980 (42 U.S.C. 
                9601));
                    ``(B) a contaminant (as defined in section 1401 of 
                the Safe Drinking Water Act (42 U.S.C. 300f))
                    ``(C) an air pollutant subject to regulation under 
                the Clean Air Act (42 U.S.C. 7401 et seq.);
                    ``(D) a water pollutant subject to regulation under 
                the Federal Water Pollution Control Act (33 U.S.C. 1251 
                et seq.); and
                    ``(E) a pesticide subject to regulation under the 
                Federal Insecticide, Fungicide, and Rodenticide Act (7 
                U.S.C. 136 et seq.).
            ``(5) Pesticide.--The term `pesticide' has the meaning 
        given the term in section 2 of the Federal Insecticide, 
        Fungicide, and Rodenticide Act (7 U.S.C. 136).
            ``(6) School.--The term `school' means an elementary school 
        (as defined in section 14101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 8801)), a secondary school (as 
        defined in section 14101 of that Act), a kindergarten, or a 
        nursery school that is public or receives Federal funding.
            ``(7) Vulnerable subpopulation.--The term `vulnerable 
        subpopulation' means--
                    ``(A) children;
                    ``(B) pregnant women;
                    ``(C) the elderly;
                    ``(D) individuals with a history of serious 
                illness; and
                    ``(E) any other subpopulation identified by the 
                Administrator as being likely to experience special 
                health risks from environmental pollutants.

``SEC. 503. SAFEGUARDING CHILDREN AND OTHER VULNERABLE SUBPOPULATIONS.

    ``(a) In General.--The Administrator shall--
            ``(1) ensure that each environmental and public health 
        standard for an environmental pollutant protects children and 
        other vulnerable subpopulations with an adequate margin of 
        safety;
            ``(2) explicitly evaluate data concerning the special 
        susceptibility and exposure of children to any environmental 
        pollutant for which an environmental or public health standard 
        is established; and
            ``(3) adopt an additional margin of safety of at least 10-
        fold in the establishment of an environmental or public health 
        standard for an environmental pollutant in the absence of 
        reliable data on toxicity and exposure of the child to an 
        environmental pollutant or if there is a lack of reliable data 
        on the susceptibility of the child to an environmental 
        pollutant for which the environmental and public health 
        standard is being established.
    ``(b) Establishing, Modifying, or Reevaluating Environmental and 
Public Health Standards.--
            ``(1) In general.--In establishing, modifying, or 
        reevaluating any environmental or public health standard for an 
        environmental pollutant under any law administered by the 
        Administrator, the Administrator shall take into consideration 
        available information concerning--
                    ``(A) all routes of exposure of children to that 
                environmental pollutant; and
                    ``(B) the special susceptibility of children to the 
                environmental pollutant, including--
                            ``(i) neurological differences between 
                        children and adults;
                            ``(ii) the effect of exposure to that 
                        environmental pollutant in utero; and
                            ``(iii) the cumulative effect on a child of 
                        exposure to that environmental pollutant and 
                        any other substance having a common 
                        toxicological mechanism.
            ``(2) Additional safety margin.--If any of the data 
        described in paragraph (1) are not available, the Administrator 
        shall, in completing a risk assessment, risk characterization, 
        or other assessment of risk underlying an environmental or 
        public health standard, adopt an additional margin of safety of 
        at least 10-fold to take into account--
                    ``(A) potential pre-natal and post-natal toxicity 
                of an environmental pollutant; and
                    ``(B) the completeness of data concerning the 
                exposure and toxicity of the environmental pollutant to 
                children.
    ``(c) Identification and Revision of Current Environmental and 
Public Health Standards That Present Special Risks to Children.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this title and annually thereafter, based on the 
        recommendations of the Committee, the Administrator shall--
                    ``(A) repromulgate, in accordance with this 
                section, at least 3 of the environmental and public 
                health standards identified by the Committee as posing 
                a special risk to children; or
                    ``(B) publish a finding in the Federal Register 
                that provides the reasons of the Administrator for 
                declining to repromulgate at least 3 of the 
                environmental and public health standards identified by 
                the Committee as posing a special risk to children.
            ``(2) Determination by administrator.--If the Administrator 
        makes the finding described in paragraph (1)(B), the 
        Administrator shall repromulgate in accordance with this 
        section at least 3 environmental and public health standards 
        determined to pose a greater risk to children's health than the 
        environmental and public health standards identified by the 
Children's Environmental Health Protection Advisory Committee.
            ``(3) Report.--Not later than 1 year after the date of 
        enactment of this title and annually thereafter, the 
        Administrator shall submit a report to Congress describing the 
        progress made by the Administrator in carrying out this 
        subsection.

``SEC. 504. SAFER ENVIRONMENT FOR CHILDREN.

    ``Not later than 1 year after the date of enactment of this title, 
the Administrator shall--
            ``(1) identify environmental pollutants commonly used or 
        found in areas that are reasonably accessible to children;
            ``(2) create a scientifically peer-reviewed list of 
        substances identified under paragraph (1) with known, likely, 
        or suspected health risks to children;
            ``(3) develop a scientifically peer reviewed list of safer-
        for-children substances and products recommended by the 
        Administrator for use in areas that are reasonably accessible 
        to children that, when applied as recommended by the 
        manufacturer, will minimize potential risks to children from 
        exposure to environmental pollutants;
            ``(4) establish guidelines to help reduce and eliminate 
        exposure of children to environmental pollutants in areas 
        reasonably accessible to children, including advice on how to 
        establish an integrated pest management program;
            ``(5) develop a family right-to-know information kit that 
        includes a summary of helpful information and guidance to 
        families, such as--
                    ``(A) the information developed under paragraph 
                (3);
                    ``(B) the guidelines established under paragraph 
                (4);
                    ``(C) information on the potential health effects 
                of environmental pollutants;
                    ``(D) practical suggestions on how parents may 
                reduce the exposure of their children to environmental 
                pollutants; and
                    ``(E) other information determined to be relevant 
                by the Administrator, in cooperation with the Director 
                of the Centers for Disease Control and Prevention;
            ``(6) make all information developed under this subsection 
        available to Federal and State agencies, to the public, and on 
        the Internet; and
            ``(7) review and update the lists developed under 
        paragraphs (2) and (3) at least annually.

``SEC. 505. RESEARCH TO IMPROVE INFORMATION ON THE EFFECTS OF 
              ENVIRONMENTAL POLLUTANTS ON CHILDREN.

    ``(a) Exposure and Toxicity Data.--The Administrator, the Secretary 
of Agriculture, and the Secretary of Health and Human Services shall 
coordinate and support the development and implementation of basic and 
applied research initiatives to examine--
            ``(1) the health effects and toxicity of pesticides 
        (including active and inert ingredients) and other 
        environmental pollutants on children and other vulnerable 
        subpopulations; and
            ``(2) the exposure of children and other vulnerable 
        subpopulations to environmental pollutants.
    ``(b) Biennial Reports.--The Administrator, the Secretary of 
Agriculture, and the Secretary of Health and Human Services shall 
submit biennial reports to Congress describing actions taken to carry 
out this section.

``SEC. 506. CHILDREN'S ENVIRONMENTAL HEALTH PROTECTION ADVISORY 
              COMMITTEE.

    ``(a) Establishment.--The Administrator shall establish a 
Children's Environmental Health Protection Advisory Committee to assist 
the Administrator in carrying out this title.
    ``(b) Composition.--The Committee shall be comprised of--
            ``(1) medical professionals specializing in pediatric 
        health;
            ``(2) educators;
            ``(3) representatives of community groups;
            ``(4) representatives of environmental and public health 
        nonprofit organizations;
            ``(5) industry representatives; and
            ``(6) representatives of State environmental and public 
        health departments.
    ``(c) Duties.--Not later than 2 years after the date of enactment 
of this title and annually thereafter, the Committee shall develop a 
list of standards that merit reevaluation by the Administrator in order 
to better protect the health of children.
    ``(d) Termination.--The Committee shall terminate not later than 15 
years after the date on which the Committee is established.

``SEC. 507. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this title.''.

SEC. 1403. CONFORMING AMENDMENT.

    The table of contents in section 1 of the Toxic Substances Control 
Act (15 U.S.C. prec. 2601) is amended by adding at the end the 
following:

 ``TITLE V--ENVIRONMENTAL PROTECTION FOR CHILDREN AND OTHER VULNERABLE 
                             SUBPOPULATIONS

``Sec. 501. Findings and policy.
``Sec. 502. Definitions.
``Sec. 503. Safeguarding children and other vulnerable subpopulations.
``Sec. 504. Safer environment for children.
``Sec. 505. Research to improve information on the effects of 
                            environmental pollutants on children.
``Sec. 506. Children's environmental health protection advisory 
                            committee.
``Sec. 507. Authorization of appropriations.''.

               CHAPTER 2--SCHOOL ENVIRONMENTAL PROTECTION

SEC. 1411. SHORT TITLE.

    This chapter may be cited as the ``School Environment Protection 
Act''.

SEC. 1412. INTEGRATED PEST MANAGEMENT SYSTEMS FOR SCHOOLS.

    The Federal Insecticide, Fungicide, and Rodenticide Act is 
amended--
            (1) by redesignating sections 33 and 34 (7 U.S.C. 136x, 
        136y) as sections 34 and 35, respectively; and
            (2) by inserting after section 32 (7 U.S.C. 136w-7) the 
        following:

``SEC. 33. INTEGRATED PEST MANAGEMENT SYSTEMS FOR SCHOOLS.

    ``(a) Definitions.--In this section:
            ``(1) Board.--The term `Board' means the National School 
        Integrated Pest Management Advisory Board established under 
        subsection (c).
            ``(2) Contact person.--The term `contact person' means an 
        individual who is--
                    ``(A) knowledgeable about integrated pest 
                management systems; and
                    ``(B) designated by a local educational agency as 
                the contact person under subsection (f).
            ``(3) Crack and crevice treatment.--The term `crack and 
        crevice treatment' means the application of small quantities of 
        a pesticide in a building into openings such as those commonly 
        found at expansion joints, between levels of construction, and 
        between equipment and floors.
            ``(4) Emergency.--The term `emergency' means an urgent need 
        to mitigate or eliminate a pest that threatens the health or 
        safety of a student or staff member.
            ``(5) Fund.--The term `Fund' means the Integrated Pest 
        Management Trust Fund established under subsection (m).
            ``(6) Integrated pest management system.--The term 
        `integrated pest management system' means a managed pest 
        control system that--
                    ``(A) eliminates or mitigates economic, health, and 
                aesthetic damage caused by pests;
                    ``(B) uses--
                            ``(i) integrated methods;
                            ``(ii) site or pest inspections;
                            ``(iii) pest population monitoring;
                            ``(iv) an evaluation of the need for pest 
                        control; and
                            ``(v) 1 or more pest control methods, 
                        including sanitation, structural repair, 
                        mechanical and biological controls, other 
                        nonchemical methods, and (if nontoxic options 
                        are unreasonable and have been exhausted) least 
                        toxic pesticides; and
                    ``(C) minimizes--
                            ``(i) the use of pesticides; and
                            ``(ii) the risk to human health and the 
                        environment associated with pesticide 
                        applications.
            ``(7) Least toxic pesticides.--
                    ``(A) In general.--The term `least toxic 
                pesticides' means--
                            ``(i) boric acid and disodium octoborate 
                        tetrahydrate;
                            ``(ii) silica gels;
                            ``(iii) diatomaceous earth;
                            ``(iv) nonvolatile insect and rodent baits 
                        in tamper resistant containers or for crack and 
                        crevice treatment only;
                            ``(v) microbe-based insecticides;
                            ``(vi) botanical insecticides (not 
                        including synthetic pyrethroids) without toxic 
                        synergists;
                            ``(vii) biological, living control agents; 
                        and
                            ``(viii) materials for which the inert 
                        ingredients are nontoxic and disclosed.
                    ``(B) Exclusions.--The term `least toxic 
                pesticides' does not include a pesticide that is 
                determined by the Administrator to be an acutely or 
                moderately toxic pesticide, carcinogen, mutagen, 
                teratogen, reproductive toxin, developmental 
                neurotoxin, endocrine disrupter, or immune system 
                toxin, and any application of the pesticide using a 
                broadcast spray, dust, tenting, fogging, or baseboard 
                spray application.
            ``(8) List.--The term `list' means the list of least toxic 
        pesticides established under subsection (d).
            ``(9) Local educational agency.--The term `local 
        educational agency' has the meaning given the term in section 
        14101 of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 8801).
            ``(10) Official.--The term `official' means the official 
        appointed by the Administrator under subsection (e).
            ``(11) Person.--The term `person' means--
                    ``(A) an individual that attends, has children 
                enrolled in, works at, or uses a school;
                    ``(B) a resident of a school district; and
                    ``(C) any other individual that may be affected by 
                pest management activities of a school.
            ``(12) Pesticide.--
                    ``(A) In general.--The term `pesticide' means any 
                substance or mixture of substances, including 
                herbicides and bait stations, intended for--
                            ``(i) preventing, destroying, repelling, or 
                        mitigating any pest;
                            ``(ii) use as a plant regulator, defoliant, 
                        or desiccant; or
                            ``(iii) use as a spray adjuvant such as a 
                        wetting agent or adhesive.
                    ``(B) Exclusion.--The term `pesticide' does not 
                include antimicrobial agents such as disinfectants or 
                deodorizers used for cleaning products.
            ``(13) School.--The term `school' means a public--
                    ``(A) elementary school (as defined in section 
                14101 of the Elementary and Secondary Education Act of 
                1965 (20 U.S.C. 8801));
                    ``(B) secondary school (as defined in section 14101 
                of that Act); or
                    ``(C) kindergarten or nursery school.
            ``(14) School grounds.--
                    ``(A) In general.--The term `school grounds' means 
                the area outside of the school buildings controlled, 
                managed, or owned by the school or school district.
                    ``(B) Inclusions.--The term `school grounds' 
                includes a lawn, playground, sports field, and any 
                other property or facility controlled, managed, owned, 
                or leased for use for a school-sponsored event, by a 
                school.
            ``(15) Space spraying.--
                    ``(A) In general.--The term `space spraying' means 
                application of a pesticide by discharge into the air 
throughout an inside area.
                    ``(B) Inclusion.--The term `space spraying' 
                includes the application of a pesticide using a 
                broadcast spray, dust, tenting, or fogging.
                    ``(C) Exclusion.--The term `space spraying' does 
                not include crack and crevice treatment.
            ``(16) Staff member.--
                    ``(A) In general.--The term `staff member' means an 
                employee of a school or local educational agency.
                    ``(B) Inclusions.--The term `staff member' includes 
                an administrator, teacher, and other person that is 
                regularly employed by a school or local educational 
                agency.
                    ``(C) Exclusions.--The term `staff member' does not 
                include--
                            ``(i) an employee hired by a school, local 
                        educational agency, or State to apply a 
                        pesticide; or
                            ``(ii) a person assisting in the 
                        application of a pesticide.
            ``(17) State educational agency.--The term `State 
        educational agency' has the meaning given the term in section 
        14101 of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 8801).
            ``(18) Universal notification.--The term `universal 
        notification' means notice provided by a local educational 
        agency or school to--
                    ``(A) all parents or guardians of children 
                attending the school; and
                    ``(B) staff members of the school or local 
                educational agency.
    ``(b) Integrated Pest Management Systems.--
            ``(1) In general.--The Administrator, in consultation with 
        the Secretary of Education, shall establish a National School 
        Integrated Pest Management Advisory System to develop and 
        update uniform standards and criteria for implementing 
        integrated pest management systems in schools.
            ``(2) Implementation.--Not later than 18 months after the 
        date of enactment of this subsection, each local educational 
        agency of a school district shall develop and implement in each 
        of the schools in the school district an integrated pest 
        management system that complies with this section.
            ``(3) State programs.--If, on the date of enactment of this 
        section, a State maintains an integrated pest management system 
        that meets the standards and criteria established under 
        paragraph (1) (as determined by the Board), a local educational 
        agency in the State may continue to implement the system in a 
        school or in the school district in accordance with paragraph 
        (2).
            ``(4) Application to schools and school grounds.--The 
        requirements of this section that apply to a school, including 
        the requirement to implement an integrated management system, 
        apply to pesticide application in a school building and on the 
        school grounds.
            ``(5) Application of pesticides when schools in use.--A 
        school shall prohibit--
                    ``(A) the application of a pesticide when a school 
                or school grounds are occupied or in use; or
                    ``(B) the use of an area or room treated by a 
                pesticide, other than a least toxic pesticide, during 
                the 24-hour period beginning at the end of the 
                treatment.
    ``(c) National School Integrated Pest Management Advisory Board.--
            ``(1) In general.--The Administrator, in consultation with 
        the Secretary of Education, shall establish a National School 
        Integrated Pest Management Advisory Board to--
                    ``(A) establish uniform standards and criteria for 
                developing integrated pest management systems and 
                policies in schools;
                    ``(B) develop standards for the use of least toxic 
                pesticides in schools; and
                    ``(C) advise the Administrator on any other aspects 
                of the implementation of this section.
            ``(2) Composition of board.--The Board shall be composed of 
        12 members and include 1 representative from each of the 
        following groups:
                    ``(A) Parents.
                    ``(B) Public health care professionals.
                    ``(C) Medical professionals.
                    ``(D) State integrated pest management system 
                coordinators.
                    ``(E) Independent integrated pest management 
                specialists that have carried out school integrated 
                pest management programs.
                    ``(F) Environmental advocacy groups.
                    ``(G) Children's health advocacy groups.
                    ``(H) Trade organization for pest control 
                operators.
                    ``(I) Teachers and staff members.
                    ``(J) School maintenance staff.
                    ``(K) School administrators.
                    ``(L) School board members.
            ``(3) Appointment.--Not later than 180 days after the date 
        of enactment of this section, the Administrator shall appoint 
        members of the Board from nominations received from Parent 
        Teacher Associations, school districts, States, and other 
        interested persons and organizations.
            ``(4) Term.--
                    ``(A) In general.--A member of the Board shall 
                serve for a term of 5 years, except that the 
                Administrator may shorten the terms of the original 
                members of the Board in order to provide for a 
                staggered term of appointment for all members of the 
                Board.
                    ``(B) Consecutive terms.--Subject to subparagraph 
                (C), a member of the Board shall not serve consecutive 
                terms unless the term of the member has been reduced by 
                the Administrator.
                    ``(C) Maximum term.--In no event may a member of 
                the Board serve for more than 6 consecutive years.
            ``(5) Meetings.--The Administrator shall convene--
                    ``(A) an initial meeting of the Board not later 
                than 60 days after the appointment of the members; and
                    ``(B) subsequent meetings on a periodic basis, but 
                not less often than 2 times each year.
            ``(6) Compensation.--A member of the Board shall serve 
        without compensation, but may be reimbursed by the 
        Administrator for expenses (in accordance with section 5703 of 
        title 5, United States Code) incurred in performing duties as a 
        member of the Board.
            ``(7) Chairperson.--The Board shall select a Chairperson 
        for the Board.
            ``(8) Quorum.--A majority of the members of the Board shall 
        constitute a quorum for the purpose of conducting business.
            ``(9) Decisive votes.--Two-thirds of the votes cast at a 
        meeting of the Board at which a quorum is present shall be 
        decisive for any motion.
            ``(10) Administration.--The Administrator--
                    ``(A) shall--
                            ``(i) authorize the Board to hire a staff 
                        director; and
                            ``(ii) detail staff of the Environmental 
                        Protection Agency, or allow for the hiring of 
                        staff for the Board; and
                    ``(B) subject to the availability of 
                appropriations, may pay necessary expenses incurred by 
                the Board in carrying out this subtitle, as determined 
                appropriate by the Administrator.
            ``(11) Responsibilities of the board.--
                    ``(A) In general.--The Board shall provide 
                recommendations to the Administrator regarding the 
                implementation of this section.
                    ``(B) List of least toxic pesticides.--Not later 
                than 1 year after the initial meeting of the Board, the 
                Board shall--
                            ``(i) review implementation of this section 
                        (including use of least toxic pesticides); and
                            ``(ii) review and make recommendations to 
                        the Administrator with respect to new proposed 
                        active and inert ingredients or proposed 
                        amendments to the list in accordance with 
                        subsection (d).
                    ``(C) Technical advisory panels.--
                            ``(i) In general.--The Board shall convene 
                        technical advisory panels to provide scientific 
                        evaluations of the materials considered for 
                        inclusion on the list.
                            ``(ii) Composition.--A panel described in 
                        clause (i) shall include experts on integrated 
                        pest management, children's health, entomology, 
                        health sciences, and other relevant 
                        disciplines.
                    ``(D) Special review.--
                            ``(i) In general.--Not later than 2 years 
                        after the initial meeting of the Board, the 
                        Board shall review, with the assistance of a 
                        technical advisory panel, pesticides used in 
                        school buildings and on school grounds for 
                        their acute toxicity and chronic effects, 
                        including cancer, mutations, birth defects, 
                        reproductive dysfunction, neurological and 
                        immune system effects, and endocrine system 
                        disruption.
                            ``(ii) Determination.--The Board--
                                    ``(I) shall determine whether the 
                                use of pesticides described in clause 
                                (i) may endanger the health of 
                                children; and
                                    ``(II) may recommend to the 
                                Administrator restrictions on pesticide 
                                use in school buildings and on school 
                                grounds.
            ``(12) Requirements.--In establishing the proposed list, 
        the Board shall--
                    ``(A) review available information from the 
                Environmental Protection Agency, the National Institute 
                of Environmental Health Studies, medical and scientific 
                literature, and such other sources as appropriate, 
                concerning the potential for adverse human and 
                environmental effects of substances considered for 
                inclusion in the proposed list; and
                    ``(B) cooperate with manufacturers of substances 
                considered for inclusion in the proposed list to obtain 
                a complete list of ingredients and determine that such 
                substances contain inert ingredients that are generally 
                recognized as safe.
            ``(13) Petitions.--The Board shall establish procedures 
        under which individuals may petition the Board for the purpose 
        of evaluating substances for inclusion on the list.
            ``(14) Periodic review.--
                    ``(A) In general.--The Board shall review each 
                substance included on the list at least once during 
                each 5-year period beginning on--
                            ``(i) the date that the substance was 
                        initially included on the list; or
                            ``(ii) the date of the last review of the 
                        substance under this subsection.
                    ``(B) Submission to administrator.--The Board shall 
                submit the results of a review under subparagraph (A) 
                to the Administrator with a recommendation as to 
                whether the substance should continue to be included on 
                the list.
            ``(15) Confidentiality.--Any business sensitive material 
        obtained by the Board in carrying out this section shall be 
        treated as confidential business information by the Board and 
        shall not be released to the public.
    ``(d) List of Least Toxic Pesticides; Pesticide Review.--
            ``(1) In general.--The Board shall recommend to the 
        Administrator a list of least toxic pesticides (including the 
        pesticides described in subsection (a)(7)) that may be used as 
        least toxic pesticides, any restrictions on the use of the 
        listed pesticides, and any recommendations regarding 
        restrictions on all other pesticides, in accordance with this 
        section.
            ``(2) Procedure for evaluating pesticide use.--
                    ``(A) List of least toxic pesticides.--
                            ``(i) In general.--The Administrator shall 
                        establish a list of least toxic pesticides that 
                        may be used in school buildings and on school 
                        grounds, including any restrictions on the use 
                        of the pesticides, that is based on the list 
                        prepared by the Board.
                            ``(ii) Regulatory review.--The 
                        Administrator shall initiate regulatory review 
                        of all other pesticides recommended for 
                        restriction by the Board.
                    ``(B) Recommendations.--Not later than 1 year after 
                receiving the proposed list and restrictions, and 
                recommended restrictions on all other pesticides from 
                the Board, the Administrator shall--
                            ``(i) publish the proposed list and 
                        restrictions and all other proposed pesticide 
                        restrictions in the Federal Register and seek 
                        public comment on the proposed proposals; and
                            ``(ii) after evaluating all comments 
                        received concerning the proposed list and 
                        restrictions, but not later than 1 year after 
                        the close of the period during which public 
                        comments are accepted, publish the final list 
                        and restrictions in the Federal Register, 
                        together with a discussion of comments 
                        received.
                    ``(C) Findings.--Not later than 2 years after 
                publication of the final list and restrictions, the 
                Administrator shall make a determination and issue 
                findings on whether use of registered pesticides in 
                school buildings and on school grounds may endanger the 
                health of children.
                    ``(D) Notice and comment.--
                            ``(i) In general.--Prior to establishing or 
                        making amendments to the list, the 
                        Administrator shall publish the proposed list 
                        or any proposed amendments to the list in the 
                        Federal Register and seek public comment on the 
                        proposals.
                            ``(ii) Recommendations.--The Administrator 
                        shall include in any publication described in 
                        clause (i) any changes or amendments to the 
                        proposed list that are recommended to and by 
                        the Administrator.
                    ``(E) Publication of list.--After evaluating all 
                comments received concerning the proposed list or 
                proposed amendments to the list, the Administrator 
                shall publish the final list in the Federal Register, 
                together with a description of comments received.
    ``(e) Office of Pesticide Programs.--
            ``(1) Establishment.--The Administrator shall appoint an 
        official for school pest management within the Office of 
        Pesticide Programs of the Environmental Protection Agency to 
        coordinate the development and implementation of integrated 
        pest management systems in schools.
            ``(2) Duties.--The official shall--
                    ``(A) coordinate the development of school 
                integrated pest management systems and policies;
                    ``(B) consult with schools concerning--
                            ``(i) issues related to the integrated pest 
                        management systems of schools;
                            ``(ii) the use of least toxic pesticides; 
                        and
                            ``(iii) the registration of pesticides, and 
                        amendments to the registrations, as the 
                        registrations and amendments relate to the use 
                        of integrated pest management systems in 
                        schools; and
                    ``(C) support and provide technical assistance to 
                the Board.
    ``(f) Contact Person.--
            ``(1) In general.--Each local educational agency of a 
        school district shall designate a contact person for carrying 
        out an integrated pest management system in schools in the 
        school district.
            ``(2) Duties.--The contact person of a school district 
        shall--
                    ``(A) maintain information about pesticide 
                applications inside and outside schools within the 
                school district, in school buildings, and on school 
                grounds;
                    ``(B) act as a contact for inquiries about the 
                integrated pest management system;
                    ``(C) maintain material safety data sheets and 
                labels for all pesticides that may be used in the 
                school district;
                    ``(D) be informed of Federal and State chemical 
                health and safety information and contact information;
                    ``(E) maintain scheduling of all pesticide usage 
                for schools in the school district;
                    ``(F) maintain contact with Federal and State 
                integrated pest management system experts; and
                    ``(G) obtain periodic updates and training from 
                State integrated pest management system experts.
            ``(3) Pesticide use data.--A local educational agency of a 
        school district shall--
                    ``(A) maintain all pesticide use data for each 
                school in the school district; and
                    ``(B) on request, make the data available to the 
                public for review.
    ``(g) Notice of Integrated Pest Management System.--
            ``(1) In general.--At the beginning of each school year, 
        each local educational agency or school of a school district 
        shall include a notice of the integrated pest management system 
        of the school district in school calendars or other forms of 
        universal notification.
            ``(2) Contents.--The notice shall include a description 
        of--
                    ``(A) the integrated pest management system of the 
                school district;
                    ``(B) any pesticide (including any least toxic 
                pesticide) or bait station that may be used in a school 
                building or on school grounds as part of the integrated 
                pest management system;
                    ``(C) the name, address, and telephone number of 
                the contact person of the school district;
                    ``(D) a statement that--
                            ``(i) the contact person maintains the 
                        product label and material safety data sheet of 
                        each pesticide (including each least toxic 
                        pesticide) and bait station that may be used by 
                        a school in buildings or on school grounds;
                            ``(ii) the label and data sheet is 
                        available for review by a parent, guardian, 
                        staff member, or student attending the school; 
                        and
                            ``(iii) the contact person is available to 
                        parents, guardians, and staff members for 
                        information and comment; and
                    ``(E) the time and place of any meetings that will 
                be held under subsection (g)(1).
            ``(3) Use of pesticides.--A local educational agency or 
        school may use a pesticide during a school year only if the use 
        of the pesticide has been disclosed in the notice required 
        under paragraph (1) at the beginning of the school year.
            ``(4) New employees and students.--After the beginning of 
        each school year, a local educational agency or school of a 
        school district shall provide the notice required under this 
        subsection to--
                    ``(A) each new staff member who is employed during 
                the school year; and
                    ``(B) the parent or guardian of each new student 
                enrolled during the school year.
    ``(h) Use of Pesticides.--
            ``(1) In general.--If a local educational agency or school 
        determines that a pest in the school or on school grounds 
        cannot be controlled after having used the integrated pest 
        management system of the school or school district and least 
        toxic pesticides, the school may use a pesticide (other than 
        space spraying of the pesticide) to control the pest in 
        accordance with this subsection.
            ``(2) Prior notification of parents, guardians, and staff 
        members.--
                    ``(A) In general.--Subject to paragraphs (4) and 
                (5), not less than 72 hours before a pesticide (other 
                than a least toxic pesticide) is used by a school, the 
                school shall provide to a parent or guardian of each 
                student enrolled at the school and each staff member of 
                the school, notice that includes--
                            ``(i) the common name, trade name, and 
                        Environmental Protection Agency registration 
                        number of the pesticide;
                            ``(ii) a description of the location of the 
                        application of the pesticide;
                            ``(iii) a description of the date and time 
                        of application, except that, in the case of 
                        outdoor pesticide applications, 1 notice shall 
                        include 3 dates, in chronological order, that 
                        the outdoor pesticide applications may take 
                        place if the preceding date is canceled;
                            ``(iv) a statement that `The Office of 
                        Pesticide Programs of the United States 
                        Environmental Protection Agency has stated: 
                        `Where possible, persons who potentially are 
                        sensitive, such as pregnant women and infants 
                        (less than 2 years old), should avoid any 
                        unnecessary pesticide exposure.';
                            ``(v) a description of potential adverse 
                        effects of the pesticide based on the material 
                        safety data sheet of the pesticide;
                            ``(vi) a description of the reasons for the 
                        application of the pesticide;
                            ``(vii) the name and telephone number of 
                        the contact person of the school district; and
                            ``(viii) any additional warning information 
                        related to the pesticide.
                    ``(B) Method of notification.--The school may 
                provide the notice required by subparagraph (A) by--
                            ``(i) written notice sent home with the 
                        student and provided to the staff member;
                            ``(ii) a telephone call;
                            ``(iii) direct contact; or
                            ``(iv) written notice mailed at least 1 
                        week before the application.
                    ``(C) Reissuance.--If the date of the application 
                of the pesticide needs to be extended beyond the period 
required for notice under this paragraph, the school shall reissue the 
notice under this paragraph for the new date of application.
            ``(3) Posting of signs.--
                    ``(A) In general.--Subject to paragraphs (4) and 
                (5), at least 72 hours before a pesticide (other than a 
                least toxic pesticide) is used by a school, the school 
                shall post a sign that provides notice of the 
                application of the pesticide--
                            ``(i) in a prominent place that is in or 
                        adjacent to the location to be treated; and
                            ``(ii) at each entrance to the building or 
                        school grounds to be treated.
                    ``(B) Administration.--A sign required under 
                subparagraph (A) for the application of a pesticide 
                shall--
                            ``(i) remain posted for at least 72 hours 
                        after the end of the treatment;
                            ``(ii) be at least 8 \1/2\ inches by 11 
                        inches; and
                            ``(iii) state the same information as that 
                        required for prior notification of the 
                        application under paragraph (2).
                    ``(C) Outdoor pesticide applications.--
                            ``(i) In general.--In the case of outdoor 
                        pesticide applications, each sign shall include 
                        3 dates, in chronological order, that the 
                        outdoor pesticide application may take place if 
                        the preceding date is canceled due to weather.
                            ``(ii) Duration of posting.--A sign 
                        described in clause (i) shall be posted after 
                        an outdoor pesticide application in accordance 
                        with subparagraph (B).
            ``(4) Administration.--
                    ``(A) Applicators.--Paragraphs (2) and (3) shall 
                apply to any person that applies a pesticide in a 
                school or on school grounds, including a custodian, 
                staff member, or commercial applicator.
                    ``(B) Time of year.--Paragraphs (2) and (3) shall 
                apply to a school--
                            ``(i) during the school year; and
                            ``(ii) during holidays and the summer 
                        months, if the school is in use, with notice 
                        provided to all staff members and the parents 
                        or guardians of the students that are using the 
                        school in an authorized manner.
            ``(5) Emergencies.--
                    ``(A) In general.--A school may apply a pesticide 
                (other than a least toxic pesticide) in the school or 
                on school grounds without complying with paragraphs (2) 
                and (3) in an emergency, subject to subparagraph (B).
                    ``(B) Subsequent notification of parents, 
                guardians, and staff members.--Not later than the 
                earlier of the time that is 24 hours after a school 
                applies a pesticide under this paragraph or on the 
                morning of the next school day, the school shall 
                provide to each parent or guardian of a student 
                enrolled at the school, and staff member of the school, 
                notice of the application of the pesticide for 
                emergency pest control that includes--
                            ``(i) the information required for a notice 
                        under paragraph (2)(A);
                            ``(ii) a description of the problem and the 
                        factors that qualified the problem as an 
                        emergency that threatened the health or safety 
                        of a student or staff member; and
                            ``(iii) a description of the steps the 
                        school will take in the future to avoid 
                        emergency application of a pesticide under this 
                        paragraph.
                    ``(C) Method of notification.--The school may 
                provide the notice required by subparagraph (B) by--
                            ``(i) written notice sent home with the 
                        student and provided to the staff member;
                            ``(ii) a telephone call; or
                            ``(iii) direct contact.
                    ``(D) Posting of signs.--A school applying a 
                pesticide under this paragraph shall post a sign 
                warning of the pesticide application in accordance with 
                paragraph (3).
                    ``(E) Modification of integrated pest management 
                plans.--If a school in a school district applies a 
                pesticide under this paragraph, the local educational 
                agency of the school district shall modify the 
                integrated pest management plan of the school district 
                to minimize the future applications of pesticides under 
                this paragraph.
            ``(6) Drift of pesticides onto school grounds.--Each local 
        educational agency, State pesticide lead agency, and the 
        Administrator are encouraged to--
                    ``(A) identify sources of pesticides that drift 
                from treated land to school grounds of the educational 
                agency; and
                    ``(B) take steps necessary to create an indoor and 
                outdoor school environment that are protected from 
                pesticides described in subparagraph (A).
    ``(i) Meetings.--
            ``(1) In general.--Before the beginning of a school year, 
        at the beginning of each new calendar year, and at a regularly 
        scheduled meeting of a school board, each local educational 
        agency shall provide an opportunity for the contact person 
        designated under subsection (d) to receive and address public 
        comments regarding the integrated pest management system of the 
        school district.
            ``(2) Emergency meetings.--An emergency meeting of a school 
        board to address a pesticide application may be called under 
        locally appropriate procedures for convening emergency 
        meetings.
    ``(j) Investigations and Orders.--
            ``(1) In general.--Not later than 60 days after receiving a 
        complaint of a violation of this section, the Administrator 
        shall--
                    ``(A) conduct an investigation of the complaint;
                    ``(B) determine whether it is reasonable to believe 
                the complaint has merit; and
                    ``(C) notify the complainant and the person alleged 
                to have committed the violation of the findings of the 
                Administrator.
            ``(2) Preliminary order.--If the Administrator determines 
        it is reasonable to believe a violation occurred, the 
        Administrator shall issue a preliminary order (that includes 
        findings) to impose the penalty described in subsection (j).
            ``(3) Objections to preliminary order.--
                    ``(A) In general.--Not later than 30 days after the 
                preliminary order is issued under paragraph (2), the 
                complainant and the person alleged to have committed 
                the violation may--
                            ``(i) file objections to the preliminary 
                        order (including findings); and
                            ``(ii) request a hearing on the record.
                    ``(B) Final order.--If a hearing is not requested 
                within 30 days after the preliminary order is issued, 
                the preliminary order shall be final and not subject to 
                judicial review.
            ``(4) Hearing.--A hearing under this subsection shall be 
        conducted expeditiously.
            ``(5) Final order.--Not later than 120 days after the end 
        of the hearing, the Administrator shall issue a final order.
            ``(6) Settlement agreement.--Before the final order is 
        issued, the proceeding may be terminated by a settlement 
        agreement, which shall remain open, entered into by the 
        Administrator, the complainant, and the person alleged to have 
        committed the violation.
            ``(7) Costs.--
                    ``(A) In general.--If the Administrator issues a 
                final order against a school or school district for 
                violation of this section and the complainant requests, 
                the Administrator may assess against the person against 
                whom the order is issued the costs (including 
                attorney's fees) reasonably incurred by the complainant 
                in bringing the complaint.
                    ``(B) Amount.--The Administrator shall determine 
                the amount of the costs that were reasonably incurred 
                by the complainant.
            ``(8) Judicial review and venue.--
                    ``(A) In general.--A person adversely affected by 
                an order issued after a hearing under this subsection 
                may file a petition for review not later than 60 days 
                after the date that the order is issued, in a district 
                court of the United States or other United States court 
                for any district in which a local educational agency or 
                school is found, resides, or transacts business.
                    ``(B) Timing.--The review shall be heard and 
                decided expeditiously.
                    ``(C) Collateral review.--An order of the 
                Administrator subject to review under this paragraph 
                shall not be subject to judicial review in a criminal 
                or other civil proceeding.
    ``(k) Civil Penalty.--
            ``(1) In general.--Any local educational agency, school, or 
        person that violates this section may be assessed a civil 
        penalty by the Administrator under subsections (h) and (i), 
        respectively, of not more than $10,000 for each offense.
            ``(2) Transfer to trust fund.--Except as provided in 
        subsection (i)(4)(B), civil penalties collected under paragraph 
        (1) shall be deposited in the Fund.
    ``(l) Integrated Pest Management Trust Fund.--
            ``(1) Establishment.--There is established in the Treasury 
        of the United States a trust fund to be known as the 
        `Integrated Pest Management Trust Fund', consisting of--
                    ``(A) amounts deposited in the Fund under 
                subsection (j)(2);
                    ``(B) amounts transferred to the Secretary of the 
                Treasury for deposit into the Fund under paragraph (5); 
                and
                    ``(C) any interest earned on investment of amounts 
                in the Fund under paragraph (3).
            ``(2) Expenditures from fund.--
                    ``(A) In general.--Subject to subparagraph (B), on 
                request by the Administrator, the Secretary of the 
                Treasury shall transfer from the Fund to the 
                Administrator, without further appropriation, such 
                amounts as the Secretary determines are necessary to 
                provide funds to each State educational agency of a 
                State, in proportion to the amount of civil penalties 
                collected in the State under subsection (j)(1), to 
                carry out education, training, propagation, and 
                development activities under integrated pest management 
                systems of schools in the State to remedy the harmful 
                effects of actions taken by the persons that paid the 
                civil penalties.
                    ``(B) Administrative expenses.--An amount not to 
                exceed 6 percent of the amounts in the Fund shall be 
                available for each fiscal year to pay the 
                administrative expenses necessary to carry out this 
                subsection.
            ``(3) Investment of amounts.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall invest such portion of the Fund as is not, in the 
                judgment of the Secretary of the Treasury, required to 
                meet current withdrawals. Investments may be made only 
                in interest-bearing obligations of the United States.
                    ``(B) Acquisition of obligations.--For the purpose 
                of investments under subparagraph (A), obligations may 
                be acquired--
                            ``(i) on original issue at the issue price; 
                        or
                            ``(ii) by purchase of outstanding 
                        obligations at the market price.
                    ``(C) Sale of obligations.--Any obligation acquired 
                by the Fund may be sold by the Secretary of the 
                Treasury at the market price.
                    ``(D) Credits to fund.--The interest on, and the 
                proceeds from the sale or redemption of, any 
                obligations held in the Fund shall be credited to and 
                form a part of the Fund.
            ``(4) Transfers of amounts.--
                    ``(A) In general.--The amounts required to be 
                transferred to the Fund under this subsection shall be 
                transferred at least monthly from the general fund of 
                the Treasury to the Fund on the basis of estimates made 
                by the Secretary of the Treasury.
                    ``(B) Adjustments.--Proper adjustment shall be made 
                in amounts subsequently transferred to the extent prior 
                estimates were in excess of or less than the amounts 
                required to be transferred.
            ``(5) Acceptance and use of donations.--The Secretary may 
        accept and use donations to carry out paragraph (2)(A). Amounts 
        received by the Secretary in the form of donations shall be 
        transferred to the Secretary of the Treasury for deposit into 
        the Fund.
    ``(m) Employee Protection.--
            ``(1) In general.--No local educational agency, school, or 
        person may harass, prosecute, hold liable, or discriminate 
        against any employee or other person because the employee or 
        other person--
                    ``(A) is assisting or demonstrating an intent to 
                assist in achieving compliance with this section 
                (including any regulation);
                    ``(B) is refusing to violate or assist in the 
                violation of this section (including any regulation); 
                or
                    ``(C) has commenced, caused to be commenced, or is 
                about to commence a proceeding, has testified or is 
                about to testify at a proceeding, or has assisted or 
                participated or is about to participate in any manner 
                in such a proceeding or in any other action to carry 
                out this section.
            ``(2) Complaints.--Not later than 1 year after an alleged 
        violation occurred, an employee or other person alleging a 
        violation of this section, or another person at the request of 
        the employee, may file a complaint with the Administrator.
            ``(3) Remedial action.--If the Administrator decides, on 
        the basis of a complaint, that a local educational agency, 
        school, or person violated paragraph (1), the Administrator 
        shall order the local educational agency, school, or person 
        to--
                    ``(A) take affirmative action to abate the 
                violation;
                    ``(B) reinstate the complainant to the former 
                position with the same pay and terms and privileges of 
                employment; and
                    ``(C) pay compensatory damages, including back pay.
    ``(n) Grants.--
            ``(1) In general.--The Administrator, in consultation with 
        the Secretary of Education, shall provide grants to local 
        educational agencies to develop and implement integrated pest 
        management systems in schools in the school district of the 
        local educational agencies.
            ``(2) Amount.--The amount of a grant provided to a local 
        educational agency of a school district under paragraph (1) 
        shall be based on the ratio that the number of students 
        enrolled in schools in the school district bears to the total 
        number of students enrolled in schools in all school districts 
        in the United States.
    ``(o) Relationship to State and Local Requirements.--This section 
(including regulations promulgated under this section) shall not 
preempt requirements imposed on local educational agencies and schools 
related to the use of integrated pest management by State or local law 
(including regulations) that are more stringent than the requirements 
imposed under this section.
    ``(p) Regulations.--Subject to subsection (m), the Administrator 
shall promulgate such regulations as are necessary to carry out this 
section.
    ``(q) Restriction on Pesticide Use.--Not later than 6 years after 
the date of enactment of this section, no pesticide, other than a 
pesticide that is defined as a least toxic pesticide under this 
subsection, shall be used in a school or on school grounds unless the 
Administrator has met the deadlines and requirements of this section.
    ``(r) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $7,000,000 for each of fiscal 
years 2002 through 2006.''.

SEC. 1413. CONFORMING AMENDMENT.

    The table of contents in section 1(b) of the Federal Insecticide, 
Fungicide, and Rodenticide Act (7 U.S.C. prec. 121) is amended by 
striking the items relating to sections 30 through 32 and inserting the 
following:

``Sec. 30. Minimum requirements for training of maintenance applicators 
                            and service technicians.
``Sec. 31. Environmental Protection Agency minor use program.
``Sec. 32. Department of Agriculture minor use program.
        ``(a) In general.
        ``(b)(1) Minor use pesticide data.
        ``(2) Minor Use Pesticide Data Revolving Fund.
``Sec. 33. Integrated pest management systems for schools.
        ``(a) Definitions.
            ``(1) Board.
            ``(2) Contact person.
            ``(3) Crack and crevice treatment.
            ``(4) Emergency.
            ``(5) Fund.
            ``(6) Integrated pest management system.
            ``(7) Least toxic pesticides.
            ``(8) List.
            ``(9) Local educational agency.
            ``(10) Official.
            ``(11) Person.
            ``(12) Pesticide.
            ``(13) School.
            ``(14) School grounds.
            ``(15) Space spraying.
            ``(16) Staff member.
            ``(17) State educational agency.
            ``(18) Universal notification.
        ``(b) Integrated pest management systems.
            ``(1) In general.
            ``(2) Implementation.
            ``(3) State programs.
            ``(4) Application to schools and school grounds.
            ``(5) Application of pesticides when schools in use.
        ``(c) National School Integrated Pest Management Advisory 
                            Board.
            ``(1) In general.
            ``(2) Composition of Board.
            ``(3) Appointment.
            ``(4) Term.
            ``(5) Meetings.
            ``(6) Compensation.
            ``(7) Chairperson.
            ``(8) Quorum.
            ``(9) Decisive votes.
            ``(10) Administration.
            ``(11) Responsibilities of the Board.
            ``(12) Requirements.
            ``(13) Petitions.
            ``(14) Periodic review.
            ``(15) Confidentiality.
        ``(d) List of least toxic pesticides.
            ``(1) In general.
            ``(2) Procedure for evaluating pesticide use.
        ``(e) Office of Pesticide Programs.
            ``(1) Establishment.
            ``(2) Duties.
        ``(f) Contact person.
            ``(1) In general.
            ``(2) Duties.
            ``(3) Pesticide use data.
        ``(g) Notice of integrated pest management system.
            ``(1) In general.
            ``(2) Contents.
            ``(3) Use of pesticides.
            ``(4) New employees and students.
        ``(h) Use of pesticides.
            ``(1) In general.
            ``(2) Prior notification of parents, guardians, and staff 
                            members.
            ``(3) Posting of signs.
            ``(4) Administration.
            ``(5) Emergencies.
            ``(6) Drift of pesticides onto school grounds.
        ``(i) Meetings.
            ``(1) In general.
            ``(2) Emergency meetings.
        ``(j) Investigations and orders.
            ``(1) In general.
            ``(2) Preliminary order.
            ``(3) Objections to preliminary order.
            ``(4) Hearing.
            ``(5) Final order.
            ``(6) Settlement agreement.
            ``(7) Costs.
            ``(8) Judicial review and venue.
        ``(k) Civil penalty.
            ``(1) In general.
            ``(2) Transfer to Trust Fund.
        ``(l) Integrated Pest Management Trust Fund.
            ``(1) Establishment.
            ``(2) Expenditures from Fund.
            ``(3) Investment of amounts.
            ``(4) Transfers of amounts.
            ``(5) Acceptance and use of donations.
        ``(m) Employee protection.
            ``(1) In general.
            ``(2) Complaints.
            ``(3) Remedial action.
        ``(n) Grants.
            ``(1) In general.
            ``(2) Amount.
        ``(o) Relationship to State and local requirements.
        ``(p) Regulations.
        ``(q) Restriction on pesticide use.
        ``(r) Authorization of appropriations.
``Sec. 34. Severability.
``Sec. 35. Authorization of appropriations.''.

SEC. 1414. EFFECTIVE DATE.

    This chapter and the amendments made by this chapter take effect on 
October 1, 2001.

        TITLE II--HEALTHY START-SUPPORT FOR HEALTHY DEVELOPMENT

            Subtitle A--Promotion of State and Local Support

SEC. 2001. STATE AND LOCAL PARENTING SUPPORT AND EDUCATION GRANT 
              PROGRAM.

    (a) State Allotments.--
            (1) In general.--The Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary'') shall make 
        grants, from allotments made under paragraph (2), to eligible 
        States to support parenting support and education programs.
            (2) Allotments.--From the funds appropriated under 
        subsection (h) for a fiscal year, the Secretary shall allot to 
        each State an amount that bears the same relationship to the 
        funds as the total number of children in the State bears to the 
        total number of children in all States, but no State shall 
        receive less than \1/2\ of 1 percent of the funds.
            (3) Reservation.--
                    (A) In general.--For each State in which the 
                population of Indians (including Alaska Natives) is 
                more than 2 percent of the population of the State, the 
                Governor of the State shall reserve for Indian tribes 2 
                percent of the funds received through an allotment made 
                under paragraph (2).
                    (B) Distribution.--
                            (i) In general.--Except as described in 
                        clause (ii), from the funds reserved under 
                        subparagraph (A), the Governor shall allocate 
                        to each Indian tribe in the State an amount 
                        that bears the same relationship to the funds 
                        as the total number of children in the tribe 
                        bears to the total number of children in all 
                        Indian tribes in the State.
                            (ii) Alaska.--The Governor of Alaska shall 
                        allocate the funds reserved under subparagraph 
                        (A) for Indian tribes in Alaska to the 
                        nonprofit entities described in section 
                        419(4)(B) of the Social Security Act (42 U.S.C. 
                        619(4)(B)). The Governor shall allocate to each 
                        region of the State, for such entities, an 
                        amount that bears the same relationship to the 
                        funds as the total number of Alaska Native 
                        children in the region bears to the total 
                        number of Alaska Native children in all regions 
                        of the State.
                    (C) Definitions.--In this paragraph:
                            (i) Alaska native.--The term ``Alaska 
                        Native'' has the meaning given the term 
                        ``Native'' in section 3 of the Alaska Native 
                        Claims Settlement Act (43 U.S.C. 1602).
                            (ii) Indian; indian tribe.--The terms 
                        `Indian' and `Indian tribe' have the meanings 
                        given the terms in section 4 of the Indian 
                        Self-Determination and Education Assistance Act 
                        (25 U.S.C. 450b).
    (b) State Parenting Support and Education Councils.--
            (1) In general.--To be eligible to receive a grant under 
        subsection (a), the Governor of each State shall appoint or 
        designate an existing entity (as of the date of the appointment 
        or designation) to serve as a State Parenting Support and 
        Education Council (referred to in this section as the 
        ``Council''), which shall include--
                    (A) representatives of parents;
                    (B) representatives of the State government;
                    (C) bipartisan representation from the State 
                legislature;
                    (D) representatives from communities; and
                    (E) representatives of children's organizations 
                interested in promoting parenting support and education 
                programs.
            (2) Responsibilities.--
                    (A) Assessment.--The Council shall conduct a needs 
                and resources assessment of parenting support and 
                education programs in the State to--
                            (i) determine areas in which such programs 
                        are lacking or inadequate; and
                            (ii) identify the additional programs that 
                        are needed and the programs that require 
                        additional resources.
                    (B) Grants.--On completion of the assessment, the 
                Council for a State may use the grant received by the 
                State under subsection (a) to make grants under 
                subsection (c) in a manner that takes into account the 
                results of the assessment.
    (c) Grants to State and Local Agencies and Entities.--
            (1) In general.--The Council may carry out a program under 
        which the Council makes grants to State agencies to provide 
        parenting support and education programs on a statewide basis, 
        or to local agencies (including schools) and nonprofit service 
        providers (including faith-based organizations) to provide 
        parenting support and education programs.
            (2) Applications.--To be eligible to receive a grant under 
        this subsection, an agency or entity shall submit an 
        application to a Council at such time, in such manner, and 
        containing such information as the Council may require.
    (d) Local Use of Funds.--An agency or entity that receives a grant 
under subsection (c) may use the funds made available through the grant 
to carry out parenting support and education programs that--
            (1) provide parenting support to promote early brain 
        development and childhood development and education, 
        including--
                    (A) providing assistance to schools to offer 
                classroom instruction on brain stimulation, child 
                development, and early childhood education;
                    (B) distributing materials developed by entities 
                that reflect best parenting practices;
                    (C) developing and distributing referral 
                information on programs and services available to 
                children and families at the local level, including 
                information on eligibility criteria;
                    (D) conducting voluntary hospital visits for 
                postpartum women and in-home visits for families with 
                infants, toddlers, or newly adopted children to provide 
                hands-on training and one-on-one instruction on brain 
                stimulation, child development, and early childhood 
                education; and
                    (E) carrying out parenting education programs, 
                including training programs, with respect to best 
                parenting practices;
            (2) provide parenting support for parents of adolescents 
        and youth, including providing funds for services and support 
        for parents and other caregivers of adolescents and youth being 
        served by a range of education, social service, mental health, 
        health, runaway, and homeless youth programs, which parenting 
        support--
                    (A) may be provided by the Boys and Girls Club, the 
                YMCA, the YWCA, entities that provide after school 
                programs, entities that provide 4-H programs, or other 
                community based organizations; and
                    (B) may include providing parent-caregiver support 
                groups, peer support groups, parent education classes, 
                seminars or discussion groups on problems facing 
                adolescents and youth, or advocates and mentors to help 
                parents understand and work with schools, the courts, 
                and various treatment programs; or
            (3) provide parenting support and education resource 
        centers, including--
                    (A) centers that may serve as a single point of 
                contact for the provision to children and their 
                families of comprehensive services, which--
                            (i) shall include services available to 
                        children from Federal, State, and local 
                        government agencies and nonprofit 
                        organizations; and
                            (ii) may include child care, respite care, 
                        pediatric care, child abuse prevention 
                        programs, nutrition programs, parent training, 
                        infant and child cardiopulmonary resuscitation 
                        programs, safety training, caregiver training 
                        and education, and other related programs;
                    (B) centers that provide a national toll-free 
                parent hotline that provides 24-hour consultation and 
                advice, on an anonymous basis, including referrals to 
                local community-based services; and
                    (C) centers that provide respite care for parents 
                with children with special needs, single mothers, and 
                parents with at-risk youth.
    (e) Reporting.--Each agency or entity that receives a grant under 
this section shall prepare and submit to the Council every 2 years a 
report describing the program that the agency or entity carried out 
under this section, the number of parents and children served, and the 
success of the program in supporting and educating parents using 
specific performance measures.
    (f) Administrative Costs.--Not more than 5 percent of the amount 
made available through a grant received by a State under subsection (a) 
may be used for the administrative expenses of the State Council in 
implementing the grant program described in subsection (c).
    (g) Supplement Not Supplant.--Funds appropriated pursuant to this 
section shall be used to supplement and not supplant other Federal, 
State, and local public funds expended for parenting support and 
education programs.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $100,000,000 for each of fiscal 
years 2002 and 2003, $200,000,000 for each of fiscal years 2004 and 
2005, and $300,000,000 for fiscal year 2006.
    (i) Definition.--In this section, the term ``child'' means an 
individual who is younger than age 18.

          Subtitle B--Support for Parents Caring for Children

SEC. 2101. SHORT TITLE.

    This subtitle may be cited as the ``Family and Medical Leave 
Fairness Act of 2001''.

SEC. 2102. FINDINGS.

    Congress finds that--
            (1) the Family and Medical Leave Act of 1993 (29 U.S.C. 
        2601 et seq.) has provided employees with a significant new 
        tool in balancing the needs of their families with the demands 
        of work;
            (2) the Family and Medical Leave Act of 1993 has had a 
        minimal impact on business, and over 90 percent of private 
        employers covered by the Act experienced little or no cost and 
        a minimal, or positive, impact on productivity as a result of 
        the Act;
            (3) although both employers at workplaces with large 
        numbers of employees and employers at workplaces with small 
        numbers of employees reported that compliance with the Family 
        and Medical Leave Act of 1993 involved very easy administration 
        and low costs, the smaller employers found it easier and less 
        expensive to comply with the Act than the larger employers;
            (4) over three-quarters of worksites with under 50 
        employees covered by the Family and Medical Leave Act of 1993 
        report no cost increases or small cost increases associated 
        with compliance with the Act;
            (5) in 1998, 27 percent of Americans needed to take family 
        or medical leave but were unable to do so, and 44 percent of 
        these employees did not take such leave because they would have 
        lost their jobs or their employers did not allow it;
            (6) only 57 percent of the private workforce is currently 
        protected by the Family and Medical Leave Act of 1993; and
            (7) 13,000,000 more private employees, or an additional 14 
        percent of the private workforce, would be protected by the 
        Family and Medical Leave Act of 1993 if the Act was expanded to 
        cover private employers with 25 or more employees.

SEC. 2103. COVERAGE OF EMPLOYEES.

    Paragraphs (2)(B)(ii) and (4)(A)(i) of section 101 of the Family 
and Medical Leave Act of 1993 (29 U.S.C. 2611(2)(B)(ii) and (4)(A)(i)) 
are amended by striking ``50'' each place it appears and inserting 
``25''.

                     Subtitle C--Paid Family Leave

SEC. 2201. SHORT TITLE.

    This subtitle may be cited as the ``Family Income to Respond to 
Significant Transitions Insurance Act''.

SEC. 2202. FINDINGS.

    Congress finds that--
            (1) nearly every industrialized nation other than the 
        United States, and most developing nations, provide parents 
        with paid leave for infant care;
            (2)(A) parents' interactions with their infants have a 
        major influence on the physical, cognitive, and social 
        development of the infants; and
            (B) optimal development of an infant depends on a strong 
        attachment between an infant and the infant's parents;
            (3) nearly \2/3\ of employees, who need to take family or 
        medical leave, but do not take the leave, report that they 
        cannot afford to take the leave;
            (4) although some employees in the United States receive 
        wage replacement during periods of family or medical leave, the 
        benefit of wage replacement is not shared equally in the 
        workforce, as demonstrated by the fact that--
                    (A) employees with less education and lower income 
                are less likely to receive wage replacement than 
                employees with more education and higher salaries; and
                    (B) female employees, employees from racial 
                minority groups, and younger employees are slightly 
                less likely to receive wage replacement than male 
                employees, white employees, and older employees, 
                respectively;
            (5) in order to cope financially with taking family or 
        medical leave, of persons taking that leave without full wage 
        replacement--
                    (A) 40 percent cut their leave short;
                    (B) 39 percent put off paying bills;
                    (C) 25 percent borrowed money; and
                    (D) 9 percent obtained public assistance;
            (6) taking family or medical leave often drives employees 
        earning low wages into poverty, and 21 percent of such low-wage 
        employees who take family or medical leave without full wage 
        replacement resort to public assistance;
            (7) studies document shortages in the supply of infant 
        care, and that the shortages are expected to worsen as welfare 
        reform measures are implemented; and
            (8) compared to 30 years ago, families have experienced an 
        average decrease of 22 hours per week in time that parents 
        spend with their children.

SEC. 2203. PURPOSES.

    The purposes of this subtitle are--
            (1) to establish a demonstration program that supports the 
        efforts of States and political subdivisions to provide partial 
        or full wage replacement, often referred to as FIRST insurance, 
        to new parents so that the new parents are able to spend time 
        with a new infant or newly adopted child, and to other 
        employees; and
            (2) to learn about the most effective mechanisms for 
        providing the wage replacement assistance.

SEC. 2204. DEFINITIONS.

    In this subtitle:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor, acting after consultation with the Secretary of 
        Health and Human Services.
            (2) Son or daughter; state.--The terms ``son or daughter'' 
        and ``State'' have the meanings given the terms in section 101 
        of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611).

SEC. 2205. DEMONSTRATION PROJECTS.

    (a) Grants.--The Secretary shall make grants to eligible entities 
to pay for the Federal share of the cost of carrying out projects that 
assist families by providing, through various mechanisms, wage 
replacement for eligible individuals that are responding to caregiving 
needs resulting from the birth or adoption of a son or daughter or 
other family caregiving needs. The Secretary shall make the grants for 
periods of 5 years.
    (b) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity shall be a State or political subdivision of a 
State.
    (c) Use of Funds.--
            (1) In general.--An entity that receives a grant under this 
        section may use the funds made available through the grant to 
        provide partial or full wage replacement as described in 
        subsection (a) to eligible individuals--
                    (A) directly;
                    (B) through an insurance program, such as a State 
                temporary disability insurance program or the State 
                unemployment compensation benefit program;
                    (C) through a private disability or other insurance 
                plan, or another mechanism provided by a private 
                employer; or
                    (D) through another mechanism.
            (2) Administrative costs.--No entity may use more than 10 
        percent of the total funds made available through the grant 
        during the 5-year period of the grant to pay for the 
        administrative costs relating to a project described in 
        subsection (a).
    (d) Eligible Individuals.--To be eligible to receive wage 
replacement under subsection (a), an individual shall--
            (1) meet such eligibility criteria as the eligible entity 
        providing the wage replacement may specify in an application 
        described in subsection (e); and
            (2) be--
                    (A) an individual who is taking leave, under the 
                Family and Medical Leave Act of 1993 (29 U.S.C. 2601 et 
                seq.), other Federal, State, or local law, or a private 
                plan, for a reason described in subparagraph (A) or (B) 
                of section 102(a)(1) of the Family and Medical Leave 
                Act of 1993 (29 U.S.C. 2612(a)(1));
                    (B) at the option of the eligible entity, an 
                individual who--
                            (i) is taking leave, under that Act, other 
                        Federal, State, or local law, or a private 
                        plan, for a reason described in subparagraph 
                        (C) or (D) of section 102(a)(1) of the Family 
                        and Medical Leave Act of 1993 (29 U.S.C. 
                        2612(a)(1)); or
                            (ii) leaves employment because the 
                        individual has elected to care for a son or 
                        daughter under age 1; or
                    (C) at the option of the eligible entity, an 
                individual with other characteristics specified by the 
                eligible entity in an application described in 
                subsection (e).
    (e) Application.--To be eligible to receive a grant under this 
section, an entity shall submit an application to the Secretary, at 
such time, in such manner, and containing such information as the 
Secretary may require, including, at a minimum--
            (1) a plan for the project to be carried out with the 
        grant;
            (2) information demonstrating that the applicant consulted 
        representatives of employers and employees, including labor 
        organizations, in developing the plan;
            (3) estimates of the costs and benefits of the project;
            (4)(A) information on the number and type of families to be 
        covered by the project, and the extent of such coverage in the 
        area served under the grant; and
            (B) information on any criteria or characteristics that the 
        entity will use to determine whether an individual is eligible 
        for wage replacement under subsection (a), as described in 
        paragraphs (1) and (2)(C) of subsection (d);
            (5) if the project will expand on State and private systems 
        of wage replacement for eligible individuals, information on 
        the manner in which the project will expand on the systems;
            (6) information demonstrating the manner in which the wage 
        replacement assistance provided through the project will assist 
        families in which an individual takes leave as described in 
        subsection (d)(1); and
            (7) an assurance that the applicant will participate in 
        efforts to evaluate the effectiveness of the project.
    (f) Selection Criteria.--In selecting entities to receive grants 
for projects under this section, the Secretary shall--
            (1) take into consideration--
                    (A) the scope of the proposed projects;
                    (B) the cost-effectiveness, feasibility, and 
                financial soundness of the proposed projects;
                    (C) the extent to which the proposed projects would 
                expand access to wage replacement in response to family 
                caregiving needs, particularly for low-wage employees, 
in the area served by the grant; and
                    (D) the benefits that would be offered to families 
                and children through the proposed projects; and
            (2) to the extent feasible, select entities proposing 
        projects that utilize diverse mechanisms, including expansion 
        of State unemployment compensation benefit programs, and 
        establishment or expansion of State temporary disability 
        insurance programs, to provide the wage replacement.
    (g) Federal Share.--
            (1) In general.--The Federal share of the cost described in 
        subsection (a) shall be--
                    (A) 50 percent for the first year of the grant 
                period;
                    (B) 40 percent for the second year of that period;
                    (C) 30 percent for the third year of that period; 
                and
                    (D) 20 percent for each subsequent year.
            (2) Non-federal share.--The non-Federal share of the cost 
        may be in cash or in kind, fairly evaluated, including plant, 
        equipment, and services and may be provided from State, local, 
or private sources, or Federal sources other than this subtitle.
    (h) Supplement Not Supplant.--Funds appropriated pursuant to the 
authority of this subtitle shall be used to supplement and not supplant 
other Federal, State, and local public funds and private funds expended 
to provide wage replacement.
    (i) Effect on Existing Rights.--Nothing in this subtitle shall be 
construed to supersede, preempt, or otherwise infringe on the 
provisions of any collective bargaining agreement or any employment 
benefit program or plan that provides greater rights to employees than 
the rights established under this subtitle.

SEC. 2206. EVALUATIONS AND REPORTS.

    (a) Available Funds.--The Secretary shall use not more than 2 
percent of the funds made available under section 2205 to carry out 
this section.
    (b) Evaluations.--The Secretary shall, directly or by contract, 
evaluate the effectiveness of projects carried out with grants made 
under section 2205, including conducting--
            (1) research relating to the projects, including research 
        comparing--
                    (A) the scope of the projects, including the type 
                of insurance or other wage replacement mechanism used, 
                the method of financing used, the eligibility 
                requirements, the level of the wage replacement benefit 
                provided (such as the percentage of salary replaced), 
                and the length of the benefit provided, for the 
                projects;
                    (B) the utilization of the projects, including the 
                characteristics of individuals who benefit from the 
                projects, particularly low-wage workers, and factors 
                that determine the ability of eligible individuals to 
                obtain wage replacement through the projects; and
                    (C) the costs of and savings achieved by the 
                projects, including the cost-effectiveness of the 
                projects and their benefits for children and families;
            (2) analysis of the overall need for wage replacement; and
            (3) analysis of the impact of the projects on the overall 
        availability of wage replacement.
    (c) Reports.--
            (1) Initial report.--Not later than 3 years after the 
        beginning of the grant period for the first grant made under 
        section 2205, the Secretary shall prepare and submit to 
        Congress a report that contains information resulting from the 
        evaluations conducted under subsection (b).
            (2) Subsequent reports.--Not later than 4 years after the 
        beginning of that grant period, and annually thereafter, the 
        Secretary shall prepare and submit to Congress a report that 
        contains--
                    (A) information resulting from the evaluations 
                conducted under subsection (b); and
                    (B) usage data for the demonstration projects, for 
                the most recent year for which data are available.

SEC. 2207. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this subtitle 
$400,000,000 for fiscal year 2002 and such sums as may be necessary for 
each subsequent fiscal year.

               Subtitle D--Health Care for the Uninsured

SEC. 2301. FAMILYCARE COVERAGE OF PARENTS UNDER THE MEDICAID PROGRAM 
              AND TITLE XXI.

    (a) Incentives To Implement FamilyCare Coverage.--
            (1) Under medicaid.--
                    (A) Establishment of new optional eligibility 
                category.--Section 1902(a)(10)(A)(ii) of the Social 
                Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is 
                amended--
                            (i) by striking ``or'' at the end of 
                        subclause (XVI);
                            (ii) by adding ``or'' at the end of 
                        subclause (XVII); and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XVIII) who are parents described 
                                in subsection (k)(1), but only if the 
                                State meets the conditions described in 
                                subsection (k)(2);''.
                    (B) Conditions for coverage.--Section 1902 of such 
                Act is further amended by inserting after subsection 
                (j) the following new subsection:
    ``(k)(1)(A) Parents described in this paragraph are the parents of 
an individual who is under 19 years of age (or such higher age as the 
State may have elected under section 1902(l)(1)(D)) and who is eligible 
and enrolled for medical assistance under subsection (a)(10)(A), if--
            ``(i) such parents are not otherwise eligible for such 
        assistance under such subsection; and
            ``(ii) the income of the family that includes such parents 
        does not exceed an income level specified by the State 
        consistent with paragraph (2)(B).
    ``(B) In this subsection, the term `parent' has the meaning given 
the term `caretaker' for purposes of carrying out section 1931, and 
such additional meaning as defined by the State and approved by the 
Secretary.
    ``(2) The conditions for a State to provide medical assistance 
under subsection (a)(10)(A)(ii)(XVIII) are as follows:
            ``(A) The State has a State child health plan under title 
        XXI which (whether implemented under such title or under this 
        title)--
                    ``(i) has an income standard (or will establish an 
                income standard that is effective at the time 
                additional allotments are available to the State under 
                section 2104(d), as amended by the Leave No Child 
                Behind Act of 2001) for children that is at least 200 
                percent of the poverty line; and
                    ``(ii) does not limit the acceptance of 
                applications, does not use a waiting list for children 
                who meet eligibility standards to qualify for 
                assistance, and provides benefits to all children 
in the State who apply for and meet eligibility standards.
            ``(B) The income level specified under paragraph (1)(A)(ii) 
        for parents in a family exceeds the income level applicable 
        under section 1931 but does not exceed the highest income level 
        applicable to a child in the family under this title. A State 
        may not cover such parents with higher family income without 
        covering parents with a lower family income.
    ``(3) In the case of a parent described in paragraph (1) who is 
also the parent of a child who is eligible and enrolled for child 
health assistance under title XXI, the State may elect (on a uniform 
basis) to cover all such parents under section 2111 or under subsection 
(a)(10)(A).''.
                    (C) Enhanced matching funds available.--Section 
                1905 of such Act (42 U.S.C. 1396d) is amended--
                            (i) in the fourth sentence of subsection 
                        (b), by striking ``or subsection (u)(3)'' and 
                        inserting ``, (u)(3), or (u)(4)''; and
                            (ii) in subsection (u)--
                                    (I) by redesignating paragraph (4) 
                                as paragraph (6), and
                                    (II) by inserting after paragraph 
                                (3) the following new paragraph:
    ``(4) For purposes of subsection (b) and section 2105(a)(1):
            ``(A) FamilyCare parents.--The expenditures described in 
        this subparagraph are the following:
                    ``(i) Parents.--Expenditures for medical assistance 
                made available under section 1931, or under section 
                1902(a)(10)(A)(ii)(XVIII) for parents described in 
                section 1902(k)(1), in a family the income of which 
                exceeds the income level applicable under such section 
                1931 to a family of the size involved as of January 1, 
                2000.
                    ``(ii) Certain pregnant women.--Expenditures for 
                medical assistance for pregnant women under section 
                1902(l)(1)(A) in a family the income of which exceeds 
                the income level applicable under section 1902(l)(2)(A) 
                to a family of the size involved as of January 1, 
                2000.''.
                    (D) Appropriation from title xxi allotment for 
                certain medicaid expansion costs.--Section 
                2105(a)(1)(C) of such Act (42 U.S.C. 1397ee(a)(1)(C))) 
                is amended by inserting ``and for medical assistance 
                that is attributable to expenditures described in 
                section 1905(u)(4)(A)'' before the semicolon.
                    (E) Only counting enhanced portion for coverage of 
                additional pregnant women.--Section 1905 of such Act 
                (42 U.S.C. 1396d) is amended--
                            (i) in the fourth sentence of subsection 
                        (b), by inserting ``(except in the case of 
                        expenditures described in subsection (u)(5))'' 
                        after ``do not exceed'';
                            (ii) in subsection (u), by inserting after 
                        paragraph (4) (as inserted by subparagraph 
                        (C)), the following new paragraph:
    ``(5) For purposes of the fourth sentence of subsection (b) and 
section 2105(a), the following payments under this title do not count 
against a State's allotment under section 2104:
            ``(A) Regular fmap for expenditures for pregnant women with 
        income above january 1, 2000 income level and below 185 percent 
        of poverty.--The portion of the payments made for expenditures 
        described in paragraph (4)(A)(ii) that represents the amount 
        that would have been paid if the enhanced FMAP had not been 
        substituted for the Federal medical assistance percentage.''.
            (2) Under title xxi.--
                    (A) FamilyCare coverage.--Title XXI of such Act is 
                amended by adding at the end the following new section:

``SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PARENTS OF TARGETED LOW-
              INCOME CHILDREN.

    ``(a) Optional Coverage.--Notwithstanding any other provision of 
this title, a State child health plan may provide for coverage, through 
an amendment to its State child health plan under section 2102, of 
FamilyCare assistance for targeted low-income parents in accordance 
with this section, but only if--
            ``(1) the State meets the conditions described in section 
        1902(k)(2); and
            ``(2) the State elects to provide medical assistance under 
        section 1902(a)(10)(A)(ii)(XVIII) and elects an applicable 
        income limit that is not lower than the limit described in 
        subsection (b)(2)(A).
    ``(b) Definitions.--For purposes of this section:
            ``(1) FamilyCare assistance.--The term `FamilyCare 
        assistance' has the meaning given the term child health 
        assistance in section 2110(a) as if any reference to targeted 
low-income children were a reference to targeted low-income parents.
            ``(2) Targeted low-income parent.--The term `targeted low-
        income parent' has the meaning given the term targeted low-
        income child in section 2110(b) as if the reference to a child 
        were deemed a reference to a parent (as defined in paragraph 
        (3)) of the child; except that in applying such section--
                    ``(A) there shall be substituted for the income 
                limit described in paragraph (1)(B)(ii)(I) the 
                applicable income limit in effect for a targeted low-
                income child;
                    ``(B) in paragraph (3), January 1, 2000, shall be 
                substituted for July 1, 1997; and
                    ``(C) in paragraph (4), January 1, 2000, shall be 
                substituted for March 31, 1997.
            ``(3) Parent.--The term `parent' has the meaning given the 
        term `caretaker' for purposes of carrying out section 1931, and 
        such additional meaning as defined by the State and approved by 
        the Secretary.
            ``(4) Optional treatment of pregnant women as parents.--A 
        State child health plan may treat a pregnant woman who is not 
        otherwise a parent as a targeted low-income parent for purposes 
        of this section but only if the State has established an income 
        level under section 1902(l)(2)(A)(i) for pregnant women that is 
        at least 185 percent of the income official poverty line 
        described in such section.
    ``(c) References to Terms and Special Rules.--In the case of, and 
with respect to, a State providing for coverage of FamilyCare 
assistance to targeted low-income parents under subsection (a), the 
following special rules apply:
            ``(1) Any reference in this title (other than subsection 
        (b)) to a targeted low-income child is deemed to include a 
        reference to a targeted low-income parent.
            ``(2) Any such reference to child health assistance with 
        respect to such parents is deemed a reference to FamilyCare 
        assistance.
            ``(3) In applying section 2103(e)(3)(B) in the case of a 
        family provided coverage under this section, the limitation on 
        total annual aggregate cost-sharing shall be applied to the 
        entire family.
            ``(4) In applying section 2110(b)(4), any reference to 
        `section 1902(l)(2) or 1905(n)(2) (as selected by a State)' is 
        deemed a reference to the income level applicable to parents 
        under section 1931, or, in the case of a pregnant woman 
        described in subsection (b)(4), the income level established 
        under section 1902(l)(2)(A).''.
                    (B) Additional allotment for states providing 
                familycare.--
                            (i) In general.--Section 2104 of such Act 
                        (42 U.S.C. 1397dd) is amended by inserting 
                        after subsection (c) the following new 
                        subsection:
    ``(d) Additional Allotments for State Providing FamilyCare.--
            ``(1) Appropriation; total allotment.--For the purpose of 
        providing additional allotments to States electing to provide 
        FamilyCare coverage under section 2111, there is appropriated, 
        out of any money in the Treasury not otherwise appropriated--
                    ``(A) for fiscal year 2002, $2,000,000,000;
                    ``(B) for fiscal year 2003, $2,000,000,000;
                    ``(C) for fiscal year 2004, $3,000,000,000;
                    ``(D) for fiscal year 2005, $3,000,000,000;
                    ``(E) for fiscal year 2006, $6,000,000,000;
                    ``(F) for fiscal year 2007, $7,000,000,000;
                    ``(G) for fiscal year 2008, $8,000,000,000;
                    ``(H) for fiscal year 2009, $9,000,000,000;
                    ``(I) for fiscal year 2010, $10,000,000,000; and
                    ``(J) for fiscal year 2011 and each fiscal year 
                thereafter, the amount of the allotment provided under 
                this paragraph for the preceding fiscal year increased 
                by the percentage increase (if any) in the medical care 
                expenditure category of the Consumer Price Index for 
                All Urban Consumers (United States city average).
            ``(2) State and territorial allotments.--
                    ``(A) In general.--In addition to the allotments 
                provided under subsections (b) and (c), subject to 
                paragraph (3), of the amount available for the 
                additional allotments under paragraph (1) for a fiscal 
                year, the Secretary shall allot to each State with a 
                State child health plan approved under this title and 
                which has elected to provide coverage under section 
                2111 during the fiscal year--
                            ``(i) in the case of such a State other 
                        than a commonwealth or territory described in 
                        clause (ii), the same proportion as the 
                        proportion of the State's allotment under 
                        section 2104(b) (determined without regard to 
                        section 2104(f)) to 98.95 percent of the total 
                        amount of the allotments under such section for 
                        such States eligible for an allotment under 
                        this subparagraph for such fiscal year; and
                            ``(ii) in the case of a commonwealth or 
                        territory described in section 2104(c)(3), the 
                        same proportion as the proportion of the 
                        commonwealth's or territory's allotment under 
                        section 2104(c) (determined without regard to 
                        section 2104(f)) to 1.05 percent of the total 
                        amount of the allotments under such section for 
                        commonwealths and territories eligible for an 
                        allotment under this subparagraph for such 
                        fiscal year.
                    ``(B) Redistribution of unused allotments.--In 
                applying subsection (f) with respect to additional 
                allotments made available under this subsection, the 
                procedures established under such subsection shall 
                ensure such additional allotments are only made 
                available to States which have elected to provide 
                coverage under section 2111.
            ``(3) Use of additional allotment.--Additional allotments 
        provided under this subsection are not available for amounts 
expended before October 1, 2001. Such amounts are available for amounts 
expended on or after such date for child health assistance for targeted 
low-income children, as well as for FamilyCare assistance.''.
                            (ii) Conforming amendments.--Section 2104 
                        of such Act (42 U.S.C. 1397dd) is further 
                        amended--
                                    (I) in subsection (a), by inserting 
                                ``subject to subsection (d),'' after 
                                ``under this section,'';
                                    (II) in subsection (b)(1), by 
                                inserting ``and subsection (d)'' after 
                                ``Subject to paragraph (4)''; and
                                    (III) in subsection (c)(1), by 
                                inserting ``subject to subsection 
                                (d),'' after ``for a fiscal year,''.
                    (C) No cost-sharing for pregnancy-related 
                benefits.--Section 2103(e)(2) of such Act (42 U.S.C. 
                1397cc(e)(2)) is amended--
                            (i) in the heading, by inserting ``and 
                        pregnancy-related services'' after ``preventive 
                        services''; and
                            (ii) by inserting before the period at the 
                        end the following: ``and for pregnancy-related 
                        services''.
            (3) Effective date.--The amendments made by this subsection 
        apply to items and services furnished on or after October 1, 
        2001.
    (b) Rules for Implementation Beginning With Fiscal Year 2006.--
            (1) Required coverage of familycare parents.--Section 
        1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 
        1396a(a)(10)(A)(i)) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by striking the semicolon at the end of 
                subclause (VII) and insert ``, or''; and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VIII) who would be parents 
                                described in subsection (k)(1) if the 
                                income level specified in subsection 
                                (k)(2)(B) were equal to at least 100 
                                percent of the poverty line referred to 
                                in such subsection;''.
            (2) Expansion of availability of enhanced match under 
        medicaid for pre-chip expansions.--Paragraph (4) of section 
        1905(u) of such Act (42 U.S.C. 1396d(u)), as inserted by 
        subsection (a)(1)(C), is amended--
                    (A) by amending clause (ii) of subparagraph (A) to 
                read as follows:
                    ``(ii) Certain pregnant women.--Expenditures for 
                medical assistance for pregnant women under section 
                1902(l)(1)(A) in a family the income of which exceeds 
                the 133 percent of the income official poverty line.''; 
                and
                    (B) by adding at the end the following new 
                subparagraphs:
            ``(B) Parents with income above 100 percent of poverty but 
        below january 1, 2000 income level.--The expenditures described 
        in this subparagraph are expenditures for medical assistance 
        made available for any parents described in section 
        1902(a)(10)(A)(i)(VIII), whose income exceeds 100 percent of 
        the income official poverty line applicable to a family of the 
        size involved but does not exceed the applicable income level 
        established under this title (under section 1931 or otherwise) 
        for a parent in a family of the size involved as of January 1, 
        2000.
            ``(C) Children in families with income above medicaid 
        mandatory level not previously described.--The expenditures 
        described in this subparagraph are expenditures (other than 
        expenditures described in paragraph (2) or (3)) for medical 
        assistance made available to any child who is eligible for 
        assistance under section 1902(a)(10)(A) and the income of whose 
        family exceeds the minimum income level required under 
        subsection 1902(l)(2) for a child of the age involved (treating 
        any child who is 19 or 20 years of age as being 18 years of 
        age).''.
            (3) Offset of additional expenditures for enhanced match 
        for pre-chip expansion; elimination of offset for required 
        coverage of familycare parents.--
                    (A) In general.--Section 1905(u)(5) of such Act (42 
                U.S.C. 1396d(u)(5)), as added by subsection (a)(1)(E), 
                is amended--
                            (i) by amending subparagraph (A) to read as 
                        follows:
            ``(A) Regular fmap for expenditures for pregnant women with 
        income above 133 percent of poverty.--The portion of the 
        payments made for expenditures described in paragraph 
        (4)(A)(ii) that represents the amount that would have been paid 
        if the enhanced FMAP had not been substituted for the Federal 
        medical assistance percentage.''; and
                            (ii) by adding at the end the following new 
                        subparagraphs:
            ``(B) FamilyCare parents under 100 percent of poverty.--
        Payments for expenditures described in paragraph (4)(A)(i) in 
        the case of parents whose income does not exceed 100 percent of 
        the income official poverty line applicable to a family of the 
        size involved.
            ``(C) Regular fmap for expenditures for parents with income 
        above 100 percent of poverty but below january 1, 2000 income 
        level.--The portion of the payments made for expenditures 
        described in paragraph (4)(B) that represents the amount that 
        would have been paid if the enhanced FMAP had not been 
        substituted for the Federal medical assistance percentage.
            ``(D) Regular fmap for expenditures for certain children in 
        families with income above medicaid mandatory level.--The 
        portion of the payments made for expenditures described in 
paragraph (4)(C) that represents the amount that would have been paid 
if the enhanced FMAP had not been substituted for the Federal medical 
assistance percentage.''.
                    (B) Conforming amendments.--Section 2105(a)(1)(C) 
                of such Act (42 U.S.C. 1397ee(1)(1)(C)), as amended by 
                subsection (a)(1)(D), is amended by striking ``and for 
                medical assistance that is attributable to expenditures 
                described in section 1905(u)(4)(A)'' and inserting 
                ``and for medical assistance that is attributable to 
                expenditures described in section 1905(u)(4), except as 
                provided in section 1905(u)(5)''.
            (3) Effective date.--The amendments made by this subsection 
        apply as of October 1, 2005, to fiscal years beginning on or 
        after such date and to expenditures under the State plan on and 
        after such date.
    (c) Making Title XXI Base Allotments Permanent.--Section 2104(a) of 
such Act (42 U.S.C. 1397dd(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(11) for fiscal year 2008 and each fiscal year 
        thereafter, the amount of the allotment provided under this 
        subsection for the preceding fiscal year increased by the 
        percentage increase (if any) in the medical care expenditure 
        category of the Consumer Price Index for All Urban Consumers 
        (United States city average).''.
    (d) Optional Application of Presumptive Eligibility Provisions to 
Parents.--Section 1920A of such Act (42 U.S.C. 1396r-1a) is amended by 
adding at the end the following new subsection:
    ``(e) In accordance with regulations, a State may elect to apply 
the previous provisions of this section to provide for a period of 
presumptive eligibility for medical assistance for a parent of a child 
with respect to whom such a period is provided under this section.''.
    (e) Conforming Amendments.--
            (1) Eligibility categories.--Section 1905(a) of such Act 
        (42 U.S.C. 1396d(a)) is amended, in the matter before paragraph 
        (1)--
                    (A) by striking ``or'' at the end of clause (xi);
                    (B) by inserting ``or'' at the end of clause (xii); 
                and
                    (C) by inserting after clause (xii) the following 
                new clause:
            ``(xiii) who are parents described (or treated as if 
        described) in section 1902(k)(1),''.
            (2) Income limitations.--Section 1903(f)(4) of such Act (42 
        U.S.C. 1396b(f)(4))--
                    (A) effective October 1, 2005, by inserting 
                ``1902(a)(10)(A)(i)(VIII),'' after 
                ``1902(a)(10)(A)(i)(VII),''; and
                    (B) by inserting ``1902(a)(10)(A)(ii)(XVII), 
                1902(a)(10)(A)(ii)(XVIII),'' after 
                ``1902(a)(10)(A)(ii)(XVI),''.
            (3) Conforming amendment relating to no waiting period for 
        certain women.--Section 2102(b)(1)(B) of such Act (42 U.S.C. 
        1397bb(b)(1)(B)) is amended--
                    (A) by striking ``, and'' at the end of clause (i) 
                and inserting a semicolon;
                    (B) by striking the period at the end of clause 
                (ii) and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
                            ``(iii) may not apply a waiting period 
                        (including a waiting period to carry out 
                        paragraph (3)(C)) in the case of targeted low-
                        income women who are pregnant.''.

        Subtitle E--Awareness of Environmental Risks to Children

SEC. 2401. SHORT TITLE.

    This subtitle may be cited as the ``Children's Environmental 
Protection and Right to Know Act''.

SEC. 2402. FINDING.

    Congress finds that requirements to disclose information about 
environmental risks will improve health and safety by--
            (1) prompting persons causing those risks to reduce the 
        risks; and
            (2) enabling individuals to take actions to protect 
        themselves from those risks.

             CHAPTER 1--CHILDREN'S ENVIRONMENTAL PROTECTION

    Subchapter A--Disclosure of Industrial Releases That Present a 
                      Significant Risk to Children

SEC. 2411. REPORTING REQUIREMENTS.

    (a) In General.--Section 313(f) of the Emergency Planning and 
Community Right-To-Know Act of 1986 (42 U.S.C. 11023(f)) is amended by 
striking paragraph (1) and inserting the following:
            ``(1) In general.--
                    ``(A) Toxic chemical threshold quantity.--The 
                threshold quantities for purposes of reporting toxic 
                chemicals under this section are as follows:
                            ``(i) Toxic chemicals used at facilities.--
                        The threshold quantity of a toxic chemical used 
                        at a facility shall be 10,000 pounds of the 
                        toxic chemical per year.
                            ``(ii) Manufactured or processed toxic 
                        chemicals.--The threshold quantity of a toxic 
                        chemical manufactured or processed at a 
                        facility shall be--
                                    ``(I) 75,000 pounds of a toxic 
                                chemical per year, for any toxic 
                                chemical for which a toxic chemical 
                                release form is required to be 
                                submitted under this section on or 
                                before July 1, 1988;
                                    ``(II) 50,000 pounds of a toxic 
                                chemical per year, for any toxic 
                                chemical for which a toxic chemical 
                                release form is required to be 
                                submitted during the period beginning 
                                July 2, 1988, and ending July 1, 1989; 
                                and
                                    ``(III) 25,000 pounds of a toxic 
                                chemical per year, for any toxic 
                                chemical for which any toxic release 
                                form is required to be submitted on or 
                                after July 2, 1989.
                    ``(B) Toxic chemicals released from facilities.--
                            ``(i) Toxic chemical threshold program.--
                                    ``(I) Establishment.--Not later 
                                than 2 years after the date of 
                                enactment of the Children's 
                                Environmental Protection and Right to 
                                Know Act, subject to clause (ii) and in 
                                addition to the reporting thresholds 
                                for the toxic chemicals specified in 
                                subclause (II), the Administrator shall 
                                establish a reporting threshold for 
                                each toxic chemical that the 
                                Administrator determines may present a 
                                significant risk to children's health 
                                or the environment due to, as 
                                determined by the--
                                            ``(aa) the persistent use 
                                        or existence of the toxic 
                                        chemical in the environment;
                                            ``(bb) the potential of the 
                                        toxic chemical to bioaccumulate 
                                        or disrupt endocrine systems; 
                                        or
                                            ``(cc) other 
                                        characteristics of the toxic 
                                        chemical.
                                    ``(II) Toxic chemicals included.--
                                The Administrator shall establish a 
                                reporting threshold under subclause (I) 
                                for--
                                            ``(aa) lead;
                                            ``(bb) mercury;
                                            ``(cc) dioxin;
                                            ``(dd) cadmium;
                                            ``(ee) chromium; and
                                            ``(ff) each substance 
                                        identified as a bioaccumulative 
                                        chemical of concern in the 
                                        final rule promulgated by the 
                                        Administrator entitled `Water 
                                        Quality Guidance for the Great 
                                        Lakes System, Part III' (60 
                                        Fed. Reg. 15336 (March 23, 
                                        1995)).
                            ``(ii) Threshold quantity.--The 
                        Administrator shall establish by regulation 
                        each threshold quantity for a toxic chemical 
                        described in clause (i) at a level that, as 
                        determined by the Administrator, will ensure 
                        reporting of at least 80 percent of the 
                        aggregate of all releases of the toxic chemical 
                        from facilities that--
                                    ``(I) have 10 or more full-time 
                                employees; and
                                    ``(II) are designated with any of 
                                Standard Industrial Classification 
                                Codes 20 through 39 or any of the 
                                Standard Industrial Classification 
                                Codes added under subsection 
                                (b)(1)(B).''.
    (b) Conforming Amendments.--
            (1) Section 313 of the Emergency Planning and Community 
        Right-To-Know Act of 1986 (42 U.S.C. 11023) is amended--
                    (A) in subsections (a) and (b)(1)(A), by striking 
                ``or otherwise used'' each place it appears and 
                inserting ``otherwise used, or released'';
                    (B) in subsection (c)--
                            (i) by striking ``are those chemicals'' and 
                        inserting the following: ``are--
            ``(1) those chemicals'';
                            (ii) by striking the period at the end and 
                        inserting ``; and''; and
                            (iii) by adding at the end the following:
            ``(2) dioxin and each other substance identified as a 
        bioaccumulative chemical of concern in the final rule 
        promulgated by the Administrator entitled `Water Quality 
        Guidance for the Great Lakes System, Part III' (60 Fed. Reg. 
        15336 (March 23, 1995)).''; and
                    (C) in the first sentence of subsection (f)(2), by 
                striking ``paragraph (1)' and inserting ``subparagraph 
                (A) or (B) of paragraph (1)''.
            (2) Section 326(a)(1)(B) of the Emergency Planning and 
        Community Right-To-Know Act of 1986 (42 U.S.C. 11046(a)(1)(B)) 
        is amended by adding at the end the following:
            ``(vii) Establish reporting thresholds for chemicals 
        referred to in section 313(f)(1)(C).''.

 Subchapter B--Disclosure of High Health Risk Chemicals in Children's 
                           Consumer Products

SEC. 2421. LIST OF TOXIC CHEMICALS.

    (a) Definition of Eligible Product.--Section 2 of the Federal 
Hazardous Substances Act (15 U.S.C. 1261) is amended by adding at the 
end the following:
    ``(u) Eligible Product.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `eligible product' means any toy or other article intended 
        for use by children.
            ``(2) Exception.--On and after the date that is 3 years 
        after the date of enactment of this subsection, the term 
        `eligible product' means any consumer product (as defined in 
        section 3 of the Consumer Product Safety Act (15 U.S.C. 
        2052)).''.
    (b) List of Toxic Chemicals.--Section 3 of the Federal Hazardous 
Substances Act (15 U.S.C. 1262) is amended by adding at the end the 
following:
    ``(k) List of Toxic Chemicals.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Administrator.--The term `Administrator' 
                means the Administrator of the Environmental Protection 
                Agency.
                    ``(B) Chairman.--The term `Chairman' means the 
                Chairman of the Consumer Product Safety Commission.
            ``(2) List.--Not later than 1 year after the date of 
        enactment of this subsection, the Administrator, acting jointly 
        with the Chairman, shall publish in the Federal Register a list 
        of substances or mixtures of substances that have been 
        determined by the Administrator and the Chairman to be toxic to 
        children due to their carcinogenic, neurotoxic, or reproductive 
        toxic effects.
            ``(3) Substances and information to be included.--The list 
        under that paragraph shall include--
                    ``(A)(i) any chemical that has been identified by a 
                Federal agency as being a carcinogen, neurotoxin, or 
                reproductive toxin;
                    ``(ii) each chemical identified as a Group A or 
                Group B carcinogen in the notice published by the 
                Administrator entitled `Regulation of Pesticides in 
                Food: Addressing the Delaney Paradox Policy Statement' 
                (53 Fed. Reg. 41118 (October 19, 1988));
                    ``(iii) each chemical that adversely affects the 
                nervous system of children, as identified in criteria 
                documents of the National Institute for Occupational 
                Safety and Health;
                    ``(iv) each chemical identified by the Consumer 
                Product Safety Commission as having sufficient evidence 
                to demonstrate--
                            ``(I) carcinogenicity in humans or animals;
                            ``(II) neurotoxicity in humans or animals;
                            ``(III) human developmental toxicity; or
                            ``(IV) male or female reproductive toxicity 
                        in humans or animals;
                    ``(v) each chemical regulated as a neurotoxin, 
                reproductive toxin, or developmental toxin by the 
                Administrator; and
                    ``(vi) each chemical on the Biennial List of 
                Carcinogens submitted to Congress by the Secretary of 
                Health and Human Services; and
                    ``(B) such reasonably available information on 
                adverse health effects of any substance or mixture of 
                substances as was used to determine whether to include 
                the substance or mixture on the list required under 
                paragraph (2).
            ``(4) Data.--In carrying out paragraph (3), the Secretary 
        and the Chairman shall require manufacturers and importers of 
        substances and mixtures of substances on the list required 
        under paragraph (2) to generate, and shall obtain from any 
        Federal, State, or local government, such data as are 
        sufficient to identify substances or mixtures of substances--
                    ``(A) that are toxic within the meaning of 
                paragraph (2); and
                    ``(B) to which infants and young children are 
                exposed.
    ``(l) Chemical Testing and Risk Assessment.--As soon as practicable 
after the date of enactment of this subsection, the Administrator of 
the Environmental Protection Agency, in consultation with experts in 
pediatric toxicology and exposure, shall develop and implement new 
short-term and long-term strategies for more comprehensive chemical 
testing and risk assessment to ensure that risks of exposure to 
children (including exposure to children in utero) are, to the maximum 
extent practicable, fully understood.''.

SEC. 2422. REPORTING OF TOXIC CHEMICALS IN CONSUMER PRODUCTS.

    (a) Reporting.--The Federal Hazardous Substances Act (15 U.S.C. 
1261 et seq.) is amended by adding at the end the following:

``SEC. 25. REPORTING OF TOXIC CHEMICALS.

    ``(a) In General.--A manufacturer or importer of any eligible 
product that contains, or is composed of, a substance or mixture of 
substances listed under section 3(k) shall submit to the Commission a 
report that describes each of the following:
            ``(1) The identity of the manufacturer or importer of the 
        eligible product.
            ``(2) A description of the eligible product (including any 
        model name and model number of the eligible product).
            ``(3) The identity of the substance or mixture of 
        substances listed under section 3(k) (including the 
        concentration of the substance or mixture in the eligible 
        product).
            ``(4) Any information known to the manufacturer or importer 
        that would support a determination that the eligible product is 
        not a misbranded hazardous substance or a banned hazardous 
        substance.
            ``(5) Such data as are generated by the manufacturer or 
        importer as are sufficient to identify any substances or 
        mixtures of substances manufactured or imported that are toxic 
        to children, as described in section 3(k)(2).
    ``(b) Publication.--The Commission shall annually publish in the 
Federal Register, and make available to the public in an electronic 
format, the information submitted under subsection (a).
    ``(c) Regulations.--The Commission shall promulgate such 
regulations as necessary to carry out this section.
    ``(d) Application of Section.--Subsection (a) shall apply to a 
substance or mixture of substances listed under section 3(k) beginning 
on the date that is 1 year after the date on which the substance or 
mixture of substances is listed under that section.''.
    (b) Prohibited Acts.--
            (1) In general.--Section 4 of the Federal Hazardous 
        Substances Act (15 U.S.C. 1263) is amended by adding at the end 
        the following:
    ``(l) The failure to report as required under section 25.''.
            (2) Conforming amendment.--Section 5(c)(1) of the Federal 
        Hazardous Substances Act (15 U.S.C. 1264(c)(1)) is amended in 
        the second sentence by striking ``and (k)'' and inserting 
        ``(k), and (l)''.

SEC. 2423. EXEMPTIONS.

    (a) In General.--Section 3(c) of the Federal Hazardous Substances 
Act (15 U.S.C. 1262(c)) is amended--
            (1) by striking ``(c) If the Commission finds'' and 
        inserting the following:
    ``(c) Exemption From Requirements by Regulation.--
            ``(1) In general.--If the Commission determines''; and
            (2) by adding at the end the following:
            ``(2) Additional regulations.--In addition to regulations 
        promulgated under paragraph (1), the Commission may promulgate 
        regulations exempting from the reporting requirements of 
        section 25 any substance or mixture of substances.
            ``(3) Applicability.--This subsection shall not apply to 
        any substance or mixture of substances unless the Commission 
        determines that the substance or mixture would not, by reason 
        of containing a substance or mixture of substances listed under 
        section 3(k), cause substantial personal injury or substantial 
        illness during, or as a proximate result of, any customary or 
        reasonably foreseeable handling or use (including reasonably 
        foreseeable ingestion by children).''.
    (b) Conforming Amendment.--Section 3(d) of the Federal Hazardous 
Substances Act (15 U.S.C. 1262(d)) is amended by striking ``adequate 
requirements satisfying the purposes of'' and inserting ``requirements 
at least as stringent as''.

SEC. 2424. PRIVATE CITIZEN ENFORCEMENT.

    The Federal Hazardous Substances Act (15 U.S.C. 1261 et seq.) (as 
amended by section 2422(a)) is amended by adding at the end the 
following:

``SEC. 26. PRIVATE CITIZEN ENFORCEMENT.

    ``(a) In General.--Subject to subsection (c), any person other than 
the Commission may bring a civil action in United States district 
court--
            ``(1) against any person, for violation of subsection (a), 
        (b), or (l) of section 4; or
            ``(2) against the Commission, for a failure of the 
        Commission to perform any nondiscretionary act or duty under 
        the amendments made by the Children's Environmental Protection 
        and Right to Know Act.
    ``(b) Jurisdiction.--In the case of a civil action under subsection 
(a)--
            ``(1) the United States district courts shall have 
        jurisdiction over the civil action without regard to the amount 
        in controversy or the citizenship of the parties; and
            ``(2) the court may apply any appropriate civil penalties 
        under section 5 or order the Commission to perform any 
        nondiscretionary act or duty that the Commission failed to 
        perform.
    ``(c) Actions Prohibited.--No action may be commenced under this 
section unless--
            ``(1) not later than 60 days before the date on which the 
        action is filed, the plaintiff gives notice of the intent to 
        bring the action--
                    ``(A) to the Commission; and
                    ``(B) in the case of an action for a violation of 
                section 4, to the person that is alleged to have 
                violated that section; and
            ``(2) in the case of an action for a violation of section 
        4, the Commission has not commenced and is not diligently 
        pursuing a civil action on behalf of the United States.
    ``(d) Intervention.--In any action on behalf of the United States 
following receipt of a notice under subsection (d)(1), the person 
providing the notice may intervene as of right as a plaintiff in the 
action.
    ``(e) Costs.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        any action under subsection (a), the costs of litigation 
        (including reasonable attorney fees) may be awarded to--
                    ``(A) any substantially prevailing plaintiff; and
                    ``(B) in any action under subsection (c), the party 
                intervening under subsection (c), if that party 
                contributed significantly to the success of the 
                plaintiff.
            ``(2) Waiver.--The award of costs under paragraph (1) may 
        be fully or partially waived by a court if the court finds such 
an award to be inappropriate under the circumstances.
    ``(f) Burden of Proof.--In any action under subsection (a)(1), if 
the person alleged to have violated section 4 asserts that a substance 
or mixture of substances is not a hazardous substance by reason of 
containing a substance or mixture of substances listed under section 
3(k), the burden of proof shall be the alleged violator to establish 
that the substance or mixture of substances is not a hazardous 
substance.
    ``(g) Penalty Fund.--
            ``(1) Establishment.--There is established in the Treasury 
        of the United States a fund to be used in carrying out this 
        section (referred to in this section as the `Fund').
            ``(2) Deposit of assessed penalties.--A penalty assessed as 
        a result of a civil action under subsection (a) shall be 
        deposited in the Fund.
            ``(3) Use of funds.--On request by the Commission, the 
        Secretary of the Treasury shall transfer from the Fund to the 
        Commission such amounts as the Commission determines are 
        necessary to finance compliance and enforcement activities 
        under this Act.
            ``(4) Availability.--Amounts in the Fund shall remain 
        available for use by the Commission until expended, without 
        further appropriation.
            ``(5) Reports.--The Commission shall submit to Congress an 
        annual report that describes--
                    ``(A) any funds deposited into the Fund during the 
                year for which the report is submitted (including the 
                sources of those funds); and
                    ``(B) the actual and proposed uses of the funds.
    ``(h) Other Projects.--Notwithstanding subsection (g), in lieu of 
being deposited in the Fund, any civil penalty assessed may, at the 
option of the court (after consultation with the Commission), be used 
to fund projects of the Commission that are--
            ``(1) consistent with this Act; and
            ``(2) designed to enhance public awareness of--
                    ``(A) the health effects of toxic substances or 
                mixtures of toxic substances in eligible products; and
                    ``(B) the potential for exposure of children to 
                toxic substances or mixtures of toxic substances in 
                eligible products.''.

        CHAPTER 2--PUBLIC RIGHT TO KNOW ABOUT TOXIC CHEMICAL USE

SEC. 2431. DISCLOSURE OF TOXIC CHEMICAL USE BY COMPARABLE FACILITIES.

    Section 313(b)(1)(B) of the Emergency Planning and Community Right-
To-Know Act of 1986 (42 U.S.C. 11023(b)(1)(B)) is amended--
            (1) by striking ``(B) The Administrator'' and inserting the 
        following:
                    ``(B) Modifications to covered facilities.--
                            ``(i) Modification by the administrator.--
                        The Administrator''; and
            (2) by adding at the end the following:
                            ``(ii) Modifications beginning with 2002 
                        reporting year.--Effective beginning with the 
                        2002 reporting year, any facility identified by 
                        the Standard Industrial Classification Codes 
                        specified in the proposed rule entitled 
                        `Addition of Facilities in Certain Industry 
                        Sectors; Toxic Chemical Release Reporting; 
                        Community Right-to-Know, Part II' (61 Fed. Reg. 
                        33588 (June 27, 1996)) shall be subject to the 
                        requirements of this section.
                            ``(iii) Regulations to add additional 
                        categories of facilities.--
                                    ``(I) In general.--Not later than 2 
                                years after the date of enactment of 
                                this clause, subject to subclause (II), 
                                the Administrator shall promulgate 
                                final regulations to require compliance 
                                with this section by all additional 
                                categories of facilities that use or 
                                release toxic chemicals in volumes 
                                similar to the volumes used or released 
                                by facilities that are covered by this 
                                section as of the date of enactment of 
                                this clause.
                                    ``(II) Inapplicability to farms.--
                                Subclause (I) shall not apply to any 
                                farm.''.

SEC. 2432. DISCLOSURE OF TOXIC CHEMICAL USE.

    (a) In General.--Section 313 of the Emergency Planning and 
Community Right-To-Know Act of 1986 (42 U.S.C. 11023) is amended--
            (1) in the second sentence of subsection (a), by striking 
        ``releases'' and inserting ``toxic chemical uses and 
        releases'';
            (2) in subsection (g)(1)(C)--
                    (A) by inserting ``for the preceding calendar 
                year'' after ``items of information'';
                    (B) in clause (ii), by striking ``the preceding 
                calendar year'' and inserting ``the calendar year''; 
                and
                    (C) by adding at the end the following:
            ``(v)(I) The number of employees, including contractors, at 
        the facility.
            ``(II) The number of employees, including contractors, at 
        the facility that were exposed to the toxic chemical.
            ``(III) An estimate of the quantity and level of 
        occupational exposures to the toxic chemical.
            ``(vi)(I) The following materials accounting information:
                    ``(aa) A description of the uses of the toxic 
                chemical at the facility.
                    ``(bb) The starting inventory of the toxic chemical 
                at the facility.
                    ``(cc) The quantity of the toxic chemical produced 
                at the facility.
                    ``(dd) The quantity of the toxic chemical 
                transported into the facility and the mode of 
                transportation.
                    ``(ee) The quantity of the toxic chemical consumed 
                at the facility.
                    ``(ff) The quantity of the toxic chemical 
                transported out of the facility as products or in 
                products, and the quantity intended for--
                            ``(AA) industrial use;
                            ``(BB) commercial use;
                            ``(CC) consumer use; and
                            ``(DD) any additional category of use that 
                        the Administrator may designate.
                    ``(gg) The quantity of the toxic chemical entering 
                any waste stream (or otherwise released into the 
                environment) before recycling, treatment, or disposal.
                    ``(hh) The ending inventory of the toxic chemical 
                at the facility.
                    ``(ii) The quantity of the toxic chemical recycled 
                at the facility that is subsequently used at the 
                facility.
                    ``(jj) The quantity of the toxic chemical used, 
                which shall be calculated with respect to a toxic 
                chemical by adding the quantities reported under items 
                (bb), (cc), (dd), and (ii) with respect to the toxic 
                chemical and subtracting the quantity reported under 
                subclause (hh) with respect to the toxic chemical.
            ``(II) Each quantity reported under this clause shall be 
        complete and verifiable by computations using conventional 
        materials accounting practices.
            ``(III) If the sum of the quantities reported under items 
        (bb), (cc), (dd), and (ii) of subclause (I) does not equal the 
        sum of the quantities reported under subclauses (ee), (ff), 
        (gg), and (hh) of that subclause, the form shall provide an 
        explanation of the difference in the sums.
            ``(vii) The quantity of the reduction, from the year prior 
        to the preceding calendar year, in the quantity of the toxic 
        chemical entering any waste stream (or otherwise released into 
        the environment) before recycling, treatment, or disposal (as 
        reported under section 6607(b)(1) of the Pollution Prevention 
        Act of 1990 (42 U.S.C. 13106(b)(1)), as a result of--
                    ``(I) equipment or technology modifications;
                    ``(II) process or procedure modifications;
                    ``(III) reformulation or redesign of products;
                    ``(IV) substitution of raw materials; and
                    ``(V) improvements in housekeeping, maintenance, 
                training, or inventory control.
            ``(viii) The quantity of the reduction, from the year prior 
        to the preceding calendar year, in the quantity of the toxic 
        chemical used as determined under clause (vi)(I)(jj) as a 
        result of all activities specified in clause (vii).''; and
            (3) in the second sentence of subsection (h), by inserting 
        ``uses of toxic chemicals at covered facilities and'' after 
        ``inform persons about''.
    (b) Regulations.--Not later than 2 years after the date of 
enactment of this Act, the Administrator of the Environmental 
Protection Agency shall promulgate regulations concerning the 
information to be provided under section 313(g)(1)(C)(v) of the 
Emergency Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
11023(g)(1)(C)(v)).

SEC. 2433. STREAMLINED DATA COLLECTION AND DISSEMINATION.

    Section 313 of the Emergency Planning and Community Right-To-Know 
Act of 1986 (42 U.S.C. 11023) is amended by adding at the end the 
following:
    ``(m) Streamlined Data Collection and Dissemination.--
            ``(1) In general.--To enhance public access and use of 
        information resources, to facilitate compliance with reporting 
        requirements, and to promote multimedia permitting, reporting, 
        and pollution prevention, the Administrator shall, not later 
        than 3 years after the date of enactment of this subsection--
                    ``(A) establish standard data formats for 
                management of information collected under this title 
                and other Federal environmental laws;
                    ``(B) integrate information collected under this 
                title and other Federal environmental laws, using--
                            ``(i) common company, facility, industry, 
                        geographic, and chemical identifiers; and
                            ``(ii) other identifiers as the 
                        Administrator determines to be appropriate;
                    ``(C) establish a system for indexing, locating, 
                and obtaining agency-held information about parent 
                companies, facilities, industries, chemicals, 
                geographic locations, ecological indicators, and the 
                regulatory status of chemicals and entities subject to 
                regulation under this title and other Federal 
                environmental laws;
                    ``(D) consolidate all annual reporting 
                requirements, under this title and other Federal 
                environmental laws, for small business concerns (as 
                defined in section 3 of the Small Business Act (15 
                U.S.C. 632)) in a manner that allows reporting to 1 
                point of contact using 1 form or electronic reporting 
                system; and
                    ``(E) provide members of the public 1 point of 
                contact for access to all publicly available 
                information collected by the Administrator for any 1 
                regulated entity.
            ``(2) Consolidation.--Not later than 5 years after the date 
        of enactment of this subsection, the Administrator shall 
        consolidate all annual reporting under this title and other 
        Federal environmental laws, for each entity subject to such 
        reporting, in a manner that allows reporting to 1 point of 
        contact using 1 form or electronic reporting system.
            ``(3) Understandable language.--In improving the means by 
        which the Administrator provides information to the public and 
        requires information be reported by regulated entities, as 
        required by paragraphs (1) and (2), the Administrator shall use 
        language and methods of communication that the Administrator 
        finds to be clear and understandable by a member of the public 
of average intelligence, education, and experience.''.

SEC. 2434. TRADE SECRET PROTECTION.

    Section 322 of the Emergency Planning and Community Right-To-Know 
Act of 1986 (42 U.S.C. 11042) is amended--
            (1) in subsection (a)(1), by adding at the end the 
        following:
                    ``(C) Withholding of materials accounting 
                information.--
                            ``(i) In general.--Subject to clause (ii), 
                        any person required to submit materials 
                        accounting information under section 
                        313(g)(1)(C)(vi) may withhold any item of that 
                        information (as determined under regulations 
                        promulgated by the Administrator under 
                        subsection (c)) if the person complies with 
                        paragraph (2) with respect to the information 
                        to be withheld.
                            ``(ii) Limitation.--Clause (i) does not 
                        provide authority to withhold any information 
                        covered by the Pollution Prevention Act of 1990 
                        (42 U.S.C. 13101 et seq.).'';
            (2) in subsection (b)(4), by inserting ``or other 
        information withheld'' after ``The chemical identity'';
            (3) in subsection (d)--
                    (A) in the first sentence of paragraph (1), by 
                inserting ``, or other information withheld under 
                subsection (a)(1),'' after ``toxic chemical''; and
                    (B) in paragraphs (2) through (4), by inserting 
                ``or other information withheld'' after ``chemical 
                identity'' each place it appears;
            (4) in subsection (f), by inserting ``or other information 
        withheld under subsection (a)(1)'' after ``chemical identity''; 
        and
            (5) in subsection (h)--
                    (A) in paragraph (1), by inserting ``, or other 
                information withheld under subsection (a)(1),'' before 
                ``is claimed as''; and
                    (B) in paragraph (2), by inserting ``, or other 
                information withheld under subsection (a)(1),'' after 
                ``identity of a toxic chemical''.

              Subtitle F--Promoting Responsible Fatherhood

                        CHAPTER 1--BLOCK GRANTS

SEC. 2501. BLOCK GRANTS TO STATES TO ENCOURAGE MEDIA CAMPAIGNS.

    (a) In General.--Part D of title IV of the Social Security Act (42 
U.S.C. 651 et seq.) is amended by adding at the end the following:

``SEC. 469C. BLOCK GRANTS TO STATES FOR MEDIA CAMPAIGNS PROMOTING 
              RESPONSIBLE FATHERHOOD.

    ``(a) Definitions.--In this section:
            ``(1) Broadcast advertisement.--The term `broadcast 
        advertisement' means a communication intended to be aired by a 
        television or radio broadcast station, including a 
        communication intended to be transmitted through a cable 
        channel.
            ``(2) Child at risk.--The term `child at risk' means each 
        young child whose family income does not exceed the poverty 
        line.
            ``(3) Poverty line.--The term `poverty line' has the 
        meaning given such term in section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981 (including any revision required by 
        such section) that is applicable to a family of the size 
        involved.
            ``(4) Printed or other advertisement.--The term `printed or 
        other advertisement' includes any communication intended to be 
        distributed through a newspaper, magazine, outdoor advertising 
        facility, mailing, or any other type of general public 
        advertising, but does not include any broadcast advertisement.
            ``(5) State.--The term `State' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(6) Young child.--The term `young child' means an 
        individual under age 5.
    ``(b) State Certifications.--Not later than October 1 of each 
fiscal year for which a State desires to receive an allotment under 
this section, the chief executive officer of the State shall submit to 
the Secretary a certification that the State will--
            ``(1) use such funds to promote the formation and 
        maintenance of married 2-parent families, strengthen fragile 
        families, and promote responsible fatherhood through media 
        campaigns conducted in accordance with the requirements of 
        subsection (d);
            ``(2) return any unused funds to the Secretary in 
        accordance with the reconciliation process under subsection 
        (e); and
            ``(3) comply with the reporting requirements under 
        subsection (f).
    ``(c) Payments to States.--For each of fiscal years 2002 through 
2006, the Secretary shall pay to each State that submits a 
certification under subsection (b), from any funds appropriated under 
subsection (h), for the fiscal year an amount equal to the amount of 
the allotment determined for the fiscal year under subsection (g).
    ``(d) Establishment of Media Campaigns.--Each State receiving an 
allotment under this section for a fiscal year shall use the allotment 
to conduct media campaigns as follows:
            ``(1) Conduct of media campaigns.--
                    ``(A) Radio and television media campaigns.--
                            ``(i) Production of broadcast 
                        advertisements.--At the option of the State, to 
                        produce broadcast advertisements that promote 
                        the formation and maintenance of married 2-
                        parent families, strengthen fragile families, 
                        and promote responsible fatherhood.
                            ``(ii) Air time challenge program.--At the 
                        option of the State, to establish an air time 
                        challenge program under which the State may 
                        spend amounts allotted under this section to 
                        purchase time from a broadcast station to air a 
                        broadcast advertisement produced under 
                        subparagraph (A), but only if the State obtains 
                        an amount of time of the same class and during 
                        a comparable period to air the advertisement 
                        using non-Federal contributions.
                    ``(B) Other media campaigns.--At the option of the 
                State, to conduct a media campaign that consists of the 
                production and distribution of printed or other 
                advertisements that promote the formation and 
                maintenance of married 2-parent families, strengthen 
                fragile families, and promote responsible fatherhood.
            ``(2) Administration of media campaigns.--A State may 
        administer media campaigns funded under this section directly 
        or through grants, contracts, or cooperative agreements with 
        public agencies, local governments, or private entities, 
        including charitable and religious organizations.
            ``(3) Consultation with domestic violence assistance 
        centers.--In developing broadcast and printed advertisements to 
        be used in the media campaigns conducted under paragraph (1), 
        the State or other entity administering the campaign shall 
        consult with representatives of State and local domestic 
        violence centers.
            ``(4) Non-federal contributions.--In this subsection, the 
        term `non-Federal contributions' includes contributions by the 
        State and by public and private entities. Such contributions 
        may be in cash or in kind. Such term does not include any 
        amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government, or any amount expended by a State before October 1, 
        2002.
    ``(e) Reconciliation Process.--
            ``(1) 3-year availability of amounts allotted.--Each State 
        that receives an allotment under this section shall return to 
        the Secretary any unused portion of the amount allotted to a 
        State under this section for a fiscal year not later than the 
        last day of the second succeeding fiscal year together with any 
        earnings on such unused portion.
            ``(2) Procedure for redistribution of unused allotments.--
        The Secretary shall establish an appropriate procedure for 
        redistributing to States that have expended the entire amount 
        allotted under this section any amount that is--
                    ``(A) returned to the Secretary by States under 
                paragraph (1); or
                    ``(B) not allotted to a State under this section 
                because the State did not submit a certification under 
                subsection (b) by October 1 of a fiscal year.
    ``(f) Reporting Requirements.--
            ``(1) Monitoring and evaluation.--Each State receiving an 
        allotment under this section for a fiscal year shall monitor 
        and evaluate the media campaigns conducted using funds made 
        available under this section in such manner as the Secretary, 
        in consultation with the States, determines appropriate.
            ``(2) Annual reports.--Not less frequently than annually, 
        each State receiving an allotment under this section for a 
        fiscal year shall submit to the Secretary reports on the media 
        campaigns conducted under this section at such time, in such 
        manner, and containing such information as the Secretary may 
        require.
    ``(g) Amount of Allotments.--
            ``(1) In general.--Except as provided in paragraph (2), of 
        the amount appropriated for the purpose of making allotments 
        under this section for a fiscal year, the Secretary shall allot 
        to each State that submits a certification under subsection (b) 
        for the fiscal year an amount equal to the sum of--
                    ``(A) the amount that bears the same ratio to 50 
                percent of such funds as the number of young children 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) as bears to the number of such children in 
                all States; and
                    ``(B) the amount that bears the same ratio to 50 
                percent of such funds as the number of children at risk 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) bears to the number of such children in 
                all States.
            ``(2) Minimum allotments.--No allotment for a fiscal year 
        under this section shall be less than--
                    ``(A) in the case of a State other than the 
                Commonwealth of Puerto Rico, the United States Virgin 
                Islands, Guam, American Samoa, and the Commonwealth of 
                the Northern Mariana Islands, 1 percent of the amount 
                appropriated for the fiscal year under subsection (h); 
                and
                    ``(B) in the case of the Commonwealth of Puerto 
                Rico, the United States Virgin Islands, Guam, American 
                Samoa, and the Commonwealth of the Northern Mariana 
                Islands, 0.5 percent of such amount.
            ``(3) Pro rata reductions.--The Secretary shall make such 
        pro rata reductions to the allotments determined under 
        paragraph (1) as are necessary to comply with the requirements 
        of paragraph (2).
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated $25,000,000 for each of fiscal years 2002 through 2006 for 
purposes of making allotments to States under this section.''.
    (b) Evaluation.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct an evaluation of the impact of the media 
        campaigns funded under section 469C of the Social Security Act, 
        as added by subsection (a).
            (2) Report.--Not later than December 31, 2004, the 
        Secretary of Health and Human Services shall report to Congress 
        the results of the evaluation under paragraph (1).
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated $1,000,000 for fiscal year 2002 for purposes 
        of conducting the evaluation required under this subsection, to 
        remain available until expended.

SEC. 2502. RESPONSIBLE FATHERHOOD BLOCK GRANT.

    (a) In General.--Part D of title IV of the Social Security Act (42 
U.S.C. 651 et seq.), as amended by section 2501, is amended by adding 
at the end the following:

``SEC. 469D. RESPONSIBLE FATHERHOOD BLOCK GRANT.

    ``(a) Definitions.--In this section:
            ``(1) Child at risk.--The term `child at risk' has the 
        meaning given such term in section 469C(a)(2).
            ``(2) Poverty line.--The term `poverty line' has the 
        meaning given such term in section 469C(a)(3).
            ``(3) State.--The term `State' has the meaning given such 
        term in section 469C(a)(5).
            ``(4) Young child.--The term `young child' has the meaning 
        given such term in section 469C(a)(6).
    ``(b) State Certifications.--Not later than October 1 of each 
fiscal year for which a State desires to receive an allotment under 
this section, the chief executive officer of the State shall submit to 
the Secretary a certification that the State will--
            ``(1) comply with the matching requirements under 
        subsection (c)(2);
            ``(2) use such funds to promote responsible fatherhood in 
        accordance with the requirements of subsection (d);
            ``(3) use such funds to promote or sustain marriage in 
        accordance with subparagraph (A) or (B) of subsection (d)(2);
            ``(4) return any unused funds to the Secretary in 
        accordance with the reconciliation process under subsection 
        (e); and
            ``(5) comply with the reporting requirements under 
        subsection (f).
    ``(c) Payments to States.--
            ``(1) In general.--Subject to paragraph (2), for each of 
        fiscal years 2002 through 2006, the Secretary shall pay to each 
        State that submits a certification described in subsection (b), 
        from any funds appropriated under subsection (h), for the 
        fiscal year an amount equal to the amount of the allotment 
        determined under subsection (g).
            ``(2) Matching requirement.--The Secretary may not make a 
        payment to a State under paragraph (1) unless the State agrees 
        that, with respect to the costs to be incurred by the State in 
        supporting the programs described in subsection (d), the State 
        will make available non-Federal contributions in an amount 
        equal to 25 percent of the amount of Federal funds paid to the 
        State under such clause.
            ``(3) Non-federal contributions.--In this subsection, the 
        term `non-Federal contributions' includes contributions by the 
        State and by public and private entities. Such contributions 
        may be in cash or in kind. Such term does not include any 
        amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government or any amount expended by a State before October 1, 
        2002.
    ``(d) Responsible Fatherhood Programs.--
            ``(1) Support of programs.--A State shall use the 
        allotments received under this section to support programs 
        described in paragraph (2) directly or through a grant, 
        contract, or cooperative agreement with any public agency, 
        local government, or private entity (including any charitable 
        or religious organization) with experience in administering 
        such a program.
            ``(2) Programs described.--Responsible Fatherhood programs 
        include programs that--
                    ``(A) promote marriage through such activities as 
                counseling, mentoring, disseminating information about 
                the benefits of marriage and 2-parent involvement for 
                children, enhancing relationship skills, teaching on 
                how to control aggressive behavior, and disseminating 
                information on the causes of domestic violence and 
                child abuse;
                    ``(B) sustain marriages through marriage 
                preparation programs, premarital counseling, marital 
                inventories, skills-based marriage education, financial 
                planning seminars, programs to help parents improve 
                their economic status, and divorce education and 
                reduction programs, including mediation and counseling;
                    ``(C) promote responsible parenting through such 
                activities as counseling, mentoring, disseminating 
                information about good parenting practices, skills-
                based parenting education, encouraging child support 
                payments, and other methods; and
                    ``(D) help fathers and their families avoid or 
                leave cash welfare and improve their economic status by 
                providing such activities as work first services, job 
                search, job training, subsidized employment, job 
                retention, job enhancement, and encouraging education, 
                including career-advancing education, dissemination of 
                employment materials, coordination with existing 
                employment services such as Welfare to Work and 
                referrals to local employment training initiatives, and 
                other methods.
            ``(3) Targeted low-income participants.--Not less than 50 
        percent of the participants in each program supported under 
        paragraph (1) shall be--
                    ``(A) parents of a child who is, or within the past 
                24 months has been, a recipient of assistance or 
                services under a State program funded under this part; 
                or
                    ``(B) parents, including an expectant parent or a 
                married parent, whose income (after adjustment for 
                court-ordered child support paid or received) does not 
                exceed 150 percent of the poverty line.
            ``(4) Consultation with domestic violence assistance 
        centers.--Each State or entity administering a program 
        supported under paragraph (1) shall consult with 
        representatives of State and local domestic violence centers.
            ``(5) Supplement not supplant.--Amounts allotted to a State 
        under this section shall be used to supplement and not supplant 
        other Federal, State, or local funds provided to the State 
        under this part or any other provision of law that are used to 
        support programs and activities similar to the responsible 
        fatherhood program described in paragraph (2).
            ``(6) Restrictions on use.--No amount allotted under this 
        section may be used for court proceedings on matters of child 
        visitation or child custody, or for legislative advocacy.
    ``(e) Reconciliation Process.--
            ``(1) 3-year availability of amounts allotted.--Each State 
        that receives an allotment under this section shall return to 
        the Secretary any unused portion of the amount allotted to a 
        State under this section for a fiscal year not later than the 
        last day of the second succeeding fiscal year, together with 
        any earnings on such unused portion.
            ``(2) Procedure for redistribution of unused allotments.--
        The Secretary shall establish an appropriate procedure for 
        redistributing to States that have expended the entire amount 
        allotted under this section any amount that is--
                    ``(A) returned to the Secretary by States under 
                paragraph (1); or
                    ``(B) not allotted to a State under this section 
                because the State did not submit a certification under 
                subsection (b) by October 1 of a fiscal year.
    ``(f) Reporting Requirements.--
            ``(1) Monitoring and evaluation.--Each State receiving an 
        allotment under this section shall monitor and evaluate the 
        programs supported using funds made available under this 
        section in such manner as the Secretary, in consultation with 
        the States, determines appropriate.
            ``(2) Annual reports.--Not less frequently than annually, 
        each State receiving an allotment under this section for a 
        fiscal year shall submit to the Secretary reports on the 
        programs supported under this section at such time, in such 
        manner, and containing such information as the Secretary may 
        reasonably require.
    ``(g) Amount of Allotments.--
            ``(1) In general.--Except as provided in paragraph (2), of 
        the amount appropriated for the purpose of making allotments 
        under this section for a fiscal year the Secretary shall allot 
        to each State that submits a certification under subsection (b) 
        for that fiscal year an amount equal to the sum of--
                    ``(A) the amount that bears the same ratio to 50 
                percent of such funds as the number of young children 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) as bears to the number of such children in 
                all States; and
                    ``(B) the amount that bears the same ratio to 50 
                percent of such funds as the number of children at risk 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) bears to the number of such children in 
                all States.
            ``(2) Minimum allotments.--No allotment for a fiscal year 
        under this section shall be less than--
                    ``(A) in the case of a State other than the 
                Commonwealth of Puerto Rico, the United States Virgin 
                Islands, Guam, American Samoa, and the Commonwealth of 
                the Northern Mariana Islands, 1 percent of the amount 
                appropriated for the fiscal year under subsection (h); 
                and
                    ``(B) in the case of the Commonwealth of Puerto 
                Rico, the United States Virgin Islands, Guam, American 
                Samoa, and the Commonwealth of the Northern Mariana 
                Islands, 0.5 percent of such amount.
            ``(3) Pro rata reductions.--The Secretary shall make such 
        pro rata reductions to the allotments determined under 
        paragraph (1) as are necessary to comply with the requirements 
        of paragraph (2).
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated $50,000,000 for each of fiscal years 2002 through 2006 for 
purposes of making allotments to States under this section.''.
    (b) Evaluation and Report.--
            (1) Evaluation.--
                    (A) In general.--The Secretary of Health and Human 
                Services (in this subsection referred to as the 
                ``Secretary''), in consultation with the Secretary of 
                Labor, shall, directly or through a grant, contract, or 
                interagency agreement, conduct an evaluation of the 
                projects funded under section 469D of the Social 
                Security Act (as added by subsection (a)).
                    (B) Outcomes assessment.--The evaluation conducted 
                under subparagraph (A) shall assess, among other 
                outcomes selected by the Secretary, effects of the 
projects on marriage, parenting, employment, earnings, payment of child 
support, and incidence of domestic violence and child abuse.
                    (C) Project selection.--In selecting projects for 
                the evaluation, the Secretary should include projects 
                that are most likely to further the purposes of this 
                section.
                    (D) Random assignment.--In conducting the 
                evaluation, random assignment should be used wherever 
                possible.
            (2) Report.--Not later than December 31, 2004, the 
        Secretary shall submit to Congress a report on the results of 
        the evaluation conducted under paragraph (1).
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated $1,000,000 for each of fiscal years 2002 
        through 2006 to carry out this subsection.

                   CHAPTER 2--NATIONAL CLEARINGHOUSE

SEC. 2511. NATIONAL CLEARINGHOUSE FOR RESPONSIBLE FATHERHOOD PROGRAMS.

    Part D of title IV of the Social Security Act (42 U.S.C. 651), as 
amended by section 2502, is amended by adding at the end the following:

``SEC. 469E. MEDIA CAMPAIGN NATIONAL CLEARINGHOUSE FOR RESPONSIBLE 
              FATHERHOOD.

    ``(a) Media Campaign and National Clearinghouse.--
            ``(1) In general.--From any funds appropriated under 
        subsection (c), the Secretary shall contract with a nationally 
        recognized, nonprofit fatherhood promotion organization 
        described in subsection (b) to--
                    ``(A) develop, promote, and distribute to 
                interested States, local governments, public agencies, 
                and private entities a media campaign that encourages 
                the appropriate involvement of both parents in the life 
                of any child of the parents, with a priority for 
                programs that specifically address the issue of 
                responsible fatherhood; and
                    ``(B) develop a national clearinghouse to assist 
                States and communities in efforts to promote and 
                support marriage and responsible fatherhood by 
                collecting, evaluating, and making available (through 
                the Internet and by other means) to other States 
                information regarding the media campaigns established 
                under section 469C.
            ``(2) Coordination with domestic violence programs.--The 
        Secretary shall ensure that the nationally recognized nonprofit 
        fatherhood promotion organization with a contract under 
        paragraph (1) coordinates the media campaign developed under 
        subparagraph (A) of such paragraph and the national 
        clearinghouse developed under subparagraph (B) of such 
        paragraph with a national, State, or local domestic violence 
        program.
    ``(b) Nationally Recognized, Nonprofit Fatherhood Promotion 
Organization Described.--The nationally recognized, nonprofit 
fatherhood promotion organization described in this subsection is such 
an organization that has at least 4 years of experience in--
            ``(1) designing and disseminating a national public 
        education campaign, including the production and successful 
        placement of television, radio, and print public service 
        announcements that promote the importance of responsible 
        fatherhood; and
            ``(2) providing consultation and training to community-
        based organizations interested in implementing fatherhood 
        outreach, support, or skill development programs with an 
        emphasis on promoting married fatherhood as the ideal.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated $2,000,000 for each of fiscal years 2002 through 2006 to 
carry out this section.''.

                  TITLE III--HEAD START AND CHILD CARE

                    Subtitle A--Infants and Toddlers

SEC. 3001. RESERVATION OF HEAD START ACT FUNDS FOR INFANTS AND 
              TODDLERS.

    Section 640(a)(6) of the Head Start Act (42 U.S.C. 9835(a)(6)) is 
amended--
            (1) by striking subparagraph (A) and inserting the 
        following:
    ``(A) Except as provided in subparagraph (B), from amounts reserved 
and allotted pursuant to paragraphs (2) and (4), the Secretary shall 
use, for grants for programs described in section 645A(a), a portion of 
the combined total of such amounts equal to--
            ``(i) 10 percent of the funds appropriated pursuant to 
        section 639(a) for fiscal year 2002;
            ``(ii) 11 percent of such funds for fiscal year 2003;
            ``(iii) 12 percent of such funds for fiscal year 2004;
            ``(iv) 13 percent of such funds for fiscal year 2005;
            ``(v) 15 percent of such funds for fiscal year 2006;
            ``(vi) 20 percent of such funds for fiscal year 2007;
            ``(vii) 25 percent of such funds for fiscal year 2008;
            ``(viii) 30 percent of such funds for fiscal 2009;
            ``(ix) 35 percent of such funds for fiscal 2010; and
            ``(x) 40 percent of such funds for fiscal 2011.''; and
            (2) in subparagraph (B)--
                    (A) by striking clause (i); and
                    (B) by redesignating clauses (ii) and (iii) as 
                clauses (i) and (ii), respectively.

SEC. 3002. RESERVATION OF CHILD CARE AND DEVELOPMENT BLOCK GRANT FUNDS 
              FOR INFANTS AND TODDLERS.

    Section 658G of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858e) is amended--
            (1) by striking the heading and inserting the following:

``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE AND 
              ACTIVITIES FOR INFANTS AND TODDLERS.'';

            (2) by inserting before ``A State'' the following:
    ``(a) Activities To Improve the Quality of Child Care.--''; and
            (3) by adding at the end the following:
    ``(b) Activities for Infants and Toddlers.--A State that receives 
funds to carry out this subchapter for a fiscal year shall use, for 
activities that are designed to improve and expand child care for 
children from birth through age 3, not less than--
            ``(1) 5 percent of such funds for fiscal year 2002;
            ``(2) 6 percent of such funds for fiscal year 2003;
            ``(3) 7 percent of such funds for fiscal year 2004;
            ``(4) 8 percent of such funds for fiscal year 2005;
            ``(5) 9 percent of such funds for fiscal year 2006; and
            ``(6) 10 percent of such funds for fiscal year 2007.''.

                     Subtitle B--Child Care Access

               CHAPTER 1--IMPROVING ACCESS TO CHILD CARE

SEC. 3101. PAYMENT RATES.

    Section 658E(c)(4) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858c(c)(4)) is amended by striking subparagraph 
(A) and inserting the following:
                    ``(A) In general.--The State plan shall provide an 
                assurance that payment rates for the provision of child 
                care services for which assistance is provided under 
                this subchapter--
                            ``(i) are set at not less than the rate at 
                        the 100th percentile of the market rate for 
                        child care in the State, calculated as a rate--
                                    ``(I) determined in accordance with 
                                market surveys (that reflect variations 
                                in the cost of care by locality) 
                                conducted by the State not less often 
                                than once every 2 years; and
                                    ``(II) adjusted at intervals 
                                between such surveys to reflect 
                                increases in the cost of living, in 
                                such manner as the Secretary may 
                                specify;
                            ``(ii) are set at rates higher than the 
                        rate at the 100th percentile of the market rate 
                        for care of higher than average quality, such 
                        as care by accredited providers, care that 
                        includes the provision of comprehensive 
                        services, care provided at unusual hours, care 
                        for children with special needs, care for 
                        children from low-income and rural communities, 
                        and care of a type that is in short supply; and
                            ``(iii) are set at rates that reflect 
                        variations in the cost of providing care for 
                        children of different ages and different types 
                        of care.''.

 CHAPTER 2--IMPROVEMENTS TO THE CHILD CARE AND DEVELOPMENT BLOCK GRANT 
                                PROGRAM

SEC. 3111. AUTHORIZATION OF APPROPRIATIONS.

    (a) Child Care and Development Block Grant Act of 1990.--Section 
658B of the Child Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858), is amended to read as follows:

``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this 
subchapter--
            ``(1) $2,936,400,000 for fiscal year 2002;
            ``(2) $4,104,300,000 for fiscal year 2003;
            ``(3) $5,292,400,000 for fiscal year 2004;
            ``(4) $6,524,900,000 for fiscal year 2005;
            ``(5) $7,827,700,000 for fiscal year 2006;
            ``(6) $9,092,800,000 for fiscal year 2007;
            ``(7) $10,524,100,000 for fiscal year 2008;
            ``(8) $11,830,500,000 for fiscal year 2009;
            ``(9) $13,343,900,000 for fiscal year 2010; and
            ``(10) $14,991,200,000 for fiscal year 2011.''.
    (b) Social Security Act.--Section 418(a)(3) of the Social Security 
Act (42 U.S.C. 618(a)(3)) is amended by striking subparagraphs (A) 
through (F) and inserting the following:
                    ``(A) $3,989,100,000 for fiscal year 2002;
                    ``(B) $5,575,600,000 for fiscal year 2003;
                    ``(C) $7,189,800,000 for fiscal year 2004;
                    ``(D) $8,864,100,000 for fiscal year 2005;
                    ``(E) $10,634,000,000 for fiscal year 2006;
                    ``(F) $12,352,500,000 for fiscal year 2007;
                    ``(G) $14,297,000,000 for fiscal year 2008;
                    ``(H) $16,071,800,000 for fiscal year 2009;
                    ``(I) $18,127,600,000 for fiscal year 2010; and
                    ``(J) $20,365,600,000 for fiscal year 2011.''.

SEC. 3112. STATE PLAN REQUIREMENTS.

    Section 658E(c)(2) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858c(c)(2)) is amended--
            (1) by striking subparagraph (D) and inserting the 
        following:
                    ``(D) Consumer education information.--Certify that 
                the State will collect and disseminate to parents of 
                eligible children and the general public, consumer 
                education information that will promote informed child 
                care choices, and describe how the State will inform 
                parents receiving assistance under a State program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.) and low-income parents 
                about eligibility for assistance under this 
                subchapter.''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(I) Availability of staff.--Describe how the 
                State will ensure that staff from the lead agency 
                described in section 658D will be available, at the 
                offices of the State program funded under part A of 
                title IV of the Social Security Act, to provide 
                information about eligibility for assistance under this 
                subchapter.
                    ``(J) Eligibility redetermination.--Demonstrate 
                that each child that receives assistance under this 
                subchapter in the State will receive such assistance 
                for not less than 1 year before the State redetermines 
                the eligibility of the child under this subchapter.''.

SEC. 3113. DEFINITIONS.

    Section 658P(4)(C) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858n(4)(C)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) in clause (ii), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
                            ``(iii) is a foster child.''.

               Subtitle C--Child Care Quality Improvement

 CHAPTER 1--FOCUS ON COMMITTED AND UNDERPAID STAFF FOR CHILDREN'S SAKE

SEC. 3201. SHORT TITLE.

    This Act may be cited as the ``Focus On Committed and Underpaid 
Staff for Children's Sake Act'' or as the ``FOCUS Act''.

SEC. 3202. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) Research on early brain development and early childhood 
        demonstrates that the experiences children have and the 
        attachments children form early in life have a decisive, long-
        lasting impact on their later development and learning.
            (2) High-quality, developmentally appropriate child care 
        beginning in early childhood and continuing through the years 
        that children are in school improves the scholastic success and 
        educational attainment of children, and the success and 
        attainment persist into adulthood.
            (3) According to a growing body of research, the single 
        most important determinant of child care quality is the 
        presence of consistent, sensitive, well-trained, and well-
        compensated child care providers. However, child care programs 
        nationwide experience high turnover in teaching staff, fueled 
        by poor compensation and few opportunities for advancement.
            (4) The Department of Labor reports that, in 1999, the 
        average wage for a child care provider was $7.42 per hour, or 
        $15,430 annually. For full-time, full-year work, the average 
        annual wage for a child care provider was not much above the 
        1999 poverty line of $13,423 for a family consisting of a 
        parent and 2 children. Family child care providers earned even 
        less. The median weekly wage of a family child care provider in 
        1999 was $264, which equals an annual wage of $13,728.
            (5) Despite the important role child care providers may 
        play in early child development and learning, on average, a 
        child care provider earns less in a year than a bus driver 
        ($26,460), barber ($20,970), or janitor ($18,220).
            (6) Employer-sponsored benefits are minimal for most child 
        care staff. Even for child care providers at child care 
        centers, the availability of health care coverage for staff 
        remains woefully inadequate.
            (7) To offer compensation that would be sufficient to 
        attract and retain qualified child care providers, child care 
        programs would have to charge parents fees that many parents 
        could not afford. For programs that serve low-income children 
        whose families qualify for Federal and State child care 
        subsidies, the reimbursement rates set by the State strongly 
        influence the level of compensation that staff receive. Current 
        reimbursement rates for center-based child care services and 
        family child care services are insufficient to recruit and 
        retain qualified child care providers and to ensure high-
        quality services for children.
            (8) Teachers leaving the profession are being replaced by 
        staff with less education and formal training in early child 
        development.
            (9) As a result of low wages and limited benefits, many 
        child care providers do not work for long periods in the child 
        care field. Approximately 30 percent of all teaching staff 
        employed at child care centers leaves employment with a child 
        care center each year.
            (10) Child care providers, as well as the children, 
        families, and businesses that depend upon the providers, suffer 
        the consequences of inadequate compensation. This is true, with 
        few exceptions, for providers in all types of programs, 
        including subsidized and nonsubsidized programs, programs 
        offered by for-profit and nonprofit entities, and programs in 
        large and small child care settings.
            (11) Because of the severe nationwide shortage of qualified 
        staff available for employment by child care programs, several 
        States have recently initiated programs to improve the quality 
        of child care by increasing the training and compensation of 
        child care providers. Such programs encourage the training, 
        education, and increased retention of qualified child care 
        providers by offering financial incentives, including 
        scholarships and increases in compensation, that range from 
        $350 to $6,500 annually.
    (b) Purposes.--The purposes of this Act are--
            (1) to establish the Child Care Provider Development and 
        Retention Grant Program and the Child Care Provider Scholarship 
        Program; and
            (2) to help children receive the high quality child care 
        and early education the children need for positive cognitive 
        and social development, by rewarding and promoting the 
        retention of committed, qualified child care providers and by 
        providing financial assistance to improve the educational 
        qualifications of child care providers.

SEC. 3203. DEFINITIONS.

    In this Act:
            (1) Child care provider.--The term ``child care provider'' 
        means an individual who provides a service directly to a child 
        on a person to person basis for compensation for--
                    (A) a center-based child care provider that is 
                licensed or regulated under State or local law and that 
                satisfies the State and local requirements applicable 
                to the child care services provided;
                    (B) a licensed or regulated family child care 
                provider that satisfies the State and local 
                requirements applicable to the child care services 
                provided; or
                    (C) an out-of-school time program that is licensed 
                or regulated under State or local law and that 
                satisfies the State and local requirements applicable 
                to the child care services provided.
            (2) Family child care provider.--The term ``family child 
        care provider'' has the meaning given such term in section 658P 
        of the Child Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858n).
            (3) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given such term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (4) In-kind contribution.--The term ``in-kind 
        contribution'' means payment of the costs of participation of 
        eligible child care providers in health insurance programs or 
        retirement programs.
            (5) Lead agency.--The term ``lead agency'' means the agency 
        designated under section 658D of the Child Care and Development 
        Block Grant Act of 1990 (42 U.S.C. 9858b).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (7) State.--The term ``State'' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, Guam, American Samoa, or the Commonwealth of the Northern 
        Mariana Islands.
            (8) Tribal organization.--The term ``tribal organization'' 
        has the meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).

SEC. 3204. FUNDS FOR CHILD CARE PROVIDER DEVELOPMENT AND RETENTION 
              GRANTS AND FOR CHILD CARE PROVIDER SCHOLARSHIPS.

    (a) In General.--The Secretary may allot and distribute funds 
appropriated to carry out this Act to eligible States and Indian tribes 
and tribal organizations to pay for the Federal share of the cost of 
making grants under sections 3207 and 3208 to eligible child care 
providers.
    (b) Allotments.--The funds shall be allotted and distributed by the 
Secretary in accordance with section 3205, and expended by the States 
(directly, or at the option of the States, through units of general 
purpose local government), and by Indian tribes and tribal 
organizations, in accordance with this Act.

SEC. 3205. ALLOTMENTS TO STATES.

    (a) Amounts Reserved.--
            (1) Territories and possessions.--The Secretary shall 
        reserve not more than \1/2\ of 1 percent of the funds 
        appropriated to carry out this Act for any fiscal year for 
        distribution to Guam, American Samoa, and the Commonwealth of 
        the Northern Mariana Islands, to be allotted in accordance with 
        their respective needs, to plan and carry out programs and 
        activities to encourage child care providers to improve their 
        qualifications and to retain qualified child care providers in 
        the child care field.
            (2) Indian tribes and tribal organizations.--The Secretary 
        shall reserve not more than 3 percent of the funds appropriated 
        to carry out this Act for any fiscal year for payments to 
        Indian tribes and tribal organizations with applications 
        approved under subsection (c), to plan and carry out programs 
        and activities to encourage child care providers to improve 
        their qualifications and to retain qualified child care 
        providers in the child care field.
    (b) Allotments to Remaining States.--
            (1) General authority.--From the funds appropriated to 
        carry out this Act for any fiscal year and remaining after the 
        reservations made under subsection (a), the Secretary shall 
        allot to each State (excluding Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands) an amount equal 
        to the sum of--
                    (A) an amount that bears the same ratio to 50 
                percent of such remainder as the product of the young 
                child factor of the State and the allotment percentage 
                of the State bears to the sum of the corresponding 
                products for all States; and
                    (B) an amount that bears the same ratio to 50 
                percent of such remainder as the product of the school 
                lunch factor of the State and the allotment percentage 
                of the State bears to the sum of the corresponding 
                products for all States.
            (2) Young child factor.--In this subsection, the term 
        ``young child factor'' means the ratio of the number of 
        children under 5 years of age in the State to the number of 
        such children in all the States, as determined according to the 
        most recent annual estimates of population in the States, as 
        provided by the Bureau of the Census.
            (3) School lunch factor.--In this subsection, the term 
        ``school lunch factor'' means the ratio of the number of 
        children who are receiving free or reduced price lunches under 
        the school lunch program established under the Richard B. 
        Russell National School Lunch Act (42 U.S.C. 1751 et seq.) in 
        the State to the number of such children in all the States, as 
        determined annually by the Department of Agriculture.
            (4) Allotment percentage.--
                    (A) In general.--Except as provided in subparagraph 
                (B), for purposes of this subsection, the allotment 
                percentage for a State shall be determined by dividing 
                the per capita income of all individuals in the United 
                States, by the per capita income of all individuals in 
                the State.
                    (B) Limitations.--For purposes of this subsection, 
                if an allotment percentage determined under 
                subparagraph (A)--
                            (i) is more than 1.2 percent, the allotment 
                        percentage of that State shall be considered to 
                        be 1.2 percent; and
                            (ii) is less than 0.8 percent, the 
                        allotment percentage of the State shall be 
                        considered to be 0.8 percent.
                    (C) Per capita income.--For purposes of 
                subparagraph (A), per capita income shall be--
                            (i) determined at 2-year intervals;
                            (ii) applied for the 2-year period 
                        beginning on October 1 of the first fiscal year 
                        beginning after the date such determination is 
                        made; and
                            (iii) equal to the average of the annual 
                        per capita incomes for the most recent period 
                        of 3 consecutive years for which satisfactory 
                        data are available from the Department of 
Commerce at the time such determination is made.
    (c) Payments to Indian Tribes and Tribal Organizations.--
            (1) Reservation of funds.--From amounts reserved under 
        subsection (a)(2), the Secretary may make grants to or enter 
        into contracts with Indian tribes and tribal organizations that 
        submit applications under this subsection, to plan and carry 
        out programs and activities to encourage child care providers 
        to improve their qualifications and to retain qualified child 
        care providers in the child care field.
            (2) Applications and requirements.--To be eligible to 
        receive a grant or contract under this subsection, an Indian 
        tribe or tribal organization shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require. The application shall 
        provide that the applicant--
                    (A) will coordinate the programs and activities 
                involved, to the maximum extent practicable, with the 
                lead agency in each State in which the applicant will 
                carry out such programs and activities; and
                    (B) will make such reports on, and conduct such 
                audits of the funds made available through the grant or 
                contract for, programs and activities under this Act as 
                the Secretary may require.
    (d) Data and Information.--The Secretary shall obtain from each 
appropriate Federal agency, the most recent data and information 
necessary to determine the allotments provided for in subsection (b).
    (e) Reallotments.--
            (1) In general.--Any portion of the allotment under 
        subsection (b) to a State for a fiscal year that the Secretary 
        determines will not be distributed to the State for such fiscal 
        year shall be reallotted by the Secretary to other States in 
        proportion to the original allotments made under such 
        subsection to such States for such fiscal year.
            (2) Limitations.--
                    (A) Reduction.--The amount of any reallotment to 
                which a State is entitled under this subsection shall 
                be reduced to the extent that such amount exceeds the 
                amount that the Secretary estimates will be distributed 
                to the State to make grants under this Act.
                    (B) Reallotments.--The amount of such reduction 
                shall be reallotted to States for which no reduction in 
                an allotment, or in a reallotment, is required by this 
                subsection, in proportion to the original allotments 
                made under subsection (b) to such States for such 
                fiscal year.
            (3) Amounts reallotted.--For purposes of this Act (other 
        than this subsection and subsection (b)), any amount reallotted 
        to a State under this subsection shall be considered to be part 
        of the allotment made under subsection (b) to the State.
    (f) Cost-Sharing.--
            (1) Federal share.--The Federal share of the cost of 
making grants under sections 3207 and 3208, with funds allotted under 
this section and distributed by the Secretary to a State, shall be--
                    (A) not more than 90 percent of the cost of each 
                grant made under such sections, in the 1st fiscal year 
                for which the State receives such funds;
                    (B) not more than 85 percent of the cost of each 
                grant made under such sections, in the 2d fiscal year 
                for which the State receives such funds;
                    (C) not more than 80 percent of the cost of each 
                grant made under such sections, in the 3d fiscal year 
                for which the State receives such funds; and
                    (D) not more than 75 percent of the cost of each 
                grant made under such sections, in any subsequent 
                fiscal year for which the State receives such funds.
            (2) State share.--The non-Federal share of the cost of 
        making such grants shall be paid by the State in cash or in the 
        form of an in-kind contribution, fairly evaluated by the 
        Secretary.
    (g) Availability of Allotted Funds Distributed to States.--Of the 
funds allotted under this section and distributed by the Secretary to a 
State for a fiscal year--
            (1) not less than 67.5 percent shall be available to the 
        State for grants under section 3207;
            (2) not less than 22.5 percent shall be available to the 
        State for grants under section 3208; and
            (3) not more than 10 percent shall be available to pay 
        administrative costs incurred by the State to carry out this 
        Act.

SEC. 3206. APPLICATION AND PLAN.

    (a) Application.--To be eligible to receive a distribution of funds 
allotted under section 3205, a State shall submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require by rule and shall include in 
such application a State plan that satisfies the requirements of 
subsection (b).
    (b) Requirements of Plan.--
            (1) Lead agency.--The State plan shall identify the lead 
        agency to make grants under this Act for the State.
            (2) Recruitment and retention of child care providers.--The 
        State plan shall describe how the lead agency will encourage 
        both the recruitment of eligible child care providers who are 
        new to the child care field and the retention of eligible child 
        care providers who have a demonstrated commitment to the child 
        care field.
            (3) Notification of grant availability.--The State plan 
        shall describe how the lead agency will identify all eligible 
        child care providers in the State and notify the providers of 
        the availability of grants under this Act.
            (4) Distribution of grants.--The State plan shall describe 
        how the lead agency will make grants under sections 3207 and 
        3208 to child care providers in selected geographical areas in 
        the State in compliance with the following requirements:
                    (A) Selection of geographical areas.--For the 
                purpose of making such grants for a fiscal year, the 
                State shall--
                            (i) select a variety of geographical areas, 
                        determined by the State, that, collectively--
                                    (I) include urban areas, suburban 
                                areas, and rural areas; and
                                    (II) are areas whose residents have 
                                diverse income levels; and
                            (ii) give special consideration to 
                        geographical areas selected under this 
                        subparagraph for the preceding fiscal year.
                    (B) Selection of child care providers to receive 
                grants.--In making grants under section 3207, the State 
                may make grants only to eligible child care providers 
                in geographical areas selected under subparagraph (A), 
                but--
                            (i) may give special consideration in such 
                        areas to eligible child care providers who have 
                        attained a higher relevant educational 
                        credential, who provide a specific kind of 
                        child care services, who provide child care 
                        services to populations who meet specific 
                        economic characteristics, or who meet such 
                        other criteria as the State may establish; and
                            (ii) shall give special consideration to 
                        eligible child care providers who received a 
                        grant under such section in the preceding 
                        fiscal year.
                    (C) Limitation.--The State shall describe how the 
                State will ensure that grants made under section 3207 
                to child care providers will not be used to offset 
                reductions in the compensation of such providers.
                    (D) Reporting requirement.--With respect to each 
                particular geographical area selected under 
                subparagraph (A), the State shall provide an assurance 
                that the State will, for each fiscal year for which 
                such State receives a grant under section 3207--
                            (i) include in the report required by 
                        section 3209, detailed information regarding--
                                    (I) the continuity of employment of 
                                the grant recipients as child care 
                                providers with the same employer;
                                    (II) with respect to each employer 
                                that employed such a grant recipient, 
                                whether such employer was accredited by 
                                a recognized national or State 
                                accrediting body during the period of 
                                employment; and
                                    (III) to the extent practicable and 
                                available to the State, the rate and 
                                frequency of employment turnover of 
                                qualified child care providers 
                                throughout such area,
                        during the 2-year period ending on the deadline 
                        for submission of applications for grants under 
                        section 3207 for that fiscal year; and
                            (ii) provide a follow-up report, not later 
                        than 90 days after the end of the succeeding 
                        fiscal year that includes information 
                        regarding--
                                    (I) the continuity of employment of 
                                the grant recipients as child care 
                                providers with the same employer;
                                    (II) with respect to each employer 
                                that employed such a grant recipient, 
                                whether such employer was accredited by 
                                a recognized national or State 
                                accrediting body during the period of 
                                employment; and
                                    (III) to the extent practicable and 
                                available to the State, detailed 
                                information regarding the rate and 
                                frequency of employment turnover of 
                                qualified child care providers 
                                throughout such area,
                        during the 1-year period beginning on the date 
                        on which the grant to the State was made under 
                        section 3207.
            (5) Child care provider development and retention grant 
        program.--The State plan shall describe how the lead agency 
        will determine the amounts of grants to be made under section 
        3207 in accordance with the following requirements:
                    (A) Sufficient amounts.--The State shall 
                demonstrate that the amounts of individual grants to be 
                made under section 3207 will be sufficient--
                            (i) to encourage child care providers to 
                        improve their qualifications; and
                            (ii) to retain qualified child care 
                        providers in the child care field.
                    (B) Amounts to credentialed providers.--Such grants 
                made to child care providers who have a child 
                development associate credential and who are employed 
                full-time to provide child care services shall be in an 
                amount that is not less than $1,000 per year.
                    (C) Amounts to providers with higher levels of 
                education.--The State shall make such grants in amounts 
                greater than $1,000 per year to child care providers 
                who have higher levels of education than the education 
                required for a credential such as a child development 
                associate credential, according to the following 
                requirements:
                            (i) Providers with baccalaureate degrees in 
                        relevant fields.--A child care provider who has 
                        a baccalaureate degree in the area of child 
                        development or early child education shall 
                        receive a grant under section 3207 in an amount 
                        that is not less than twice the amount of 
the grant that is made under section 3207 to a child care provider who 
has an associate of the arts degree in the area of child development or 
early child education.
                            (ii) Providers with associate degrees.--A 
                        child care provider who has an associate of the 
                        arts degree in the area of child development or 
                        early child education shall receive a grant 
                        under section 3207 in an amount that is not 
                        less than 150 percent of the amount of the 
                        grant that is made under section 3207 to a 
                        child care provider who has a child development 
                        associate credential and is employed full-time 
                        to provide child care services.
                            (iii) Other providers with baccalaureate 
                        degrees.--
                                    (I) In general.--Except as provided 
                                in subclause (II), a child care 
                                provider who has a baccalaureate degree 
                                in a field other than child development 
                                or early child education shall receive 
                                a grant under section 3207 in an amount 
                                equal to the amount of the grant that 
                                is made under section 3207 to a child 
                                care provider who has an associate of 
                                the arts degree in the area of child 
                                development or early child education.
                                    (II) Exception.--If a child care 
                                provider who has such a baccalaureate 
                                degree obtains additional educational 
                                training in the area of child 
                                development or early child education, 
                                as specified by the State, such 
                                provider shall receive a grant under 
                                section 3207 in an amount equal to the 
                                amount of the grant that is made under 
                                section 3207 to a child care provider 
                                who has a baccalaureate degree 
                                specified in clause (i).
                    (D) Amounts to full-time providers.--The State 
                shall make a grant under section 3207 to a child care 
                provider who works full-time in a greater amount than 
                the amount of the grant that is made under section 3207 
                to a child care provider who works part-time, based on 
                the State definitions of full-time and part-time work.
                    (E) Amounts to experienced providers.--The State 
                shall make grants under section 3207 in progressively 
                larger amounts to child care providers to reflect the 
                number of years worked as child care providers.
            (6) Distribution of child care provider scholarships.--The 
        State plan shall describe how the lead agency will make grants 
        for scholarships in compliance with section 3208 and shall 
        specify the types of educational and training programs for 
        which the scholarship grants made under such section may be 
        used, including only programs that--
                    (A) are administered by institutions of higher 
                education that are eligible to participate in student 
                financial assistance programs under title IV of the 
                Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); 
                and
                    (B) lead to a State or nationally recognized 
                credential in the area of child development or early 
                child education, an associate of the arts degree in the 
                area of child development or early child education, or 
                a baccalaureate degree in the area of child development 
                or early child education.
            (7) Employer contribution.--The State plan shall describe 
        how the lead agency will encourage employers of child care 
        providers to contribute to the attainment of education goals by 
        child care providers who receive grants under section 3208.
            (8) Supplementation.--The State plan shall provide 
        assurances that amounts received by the State to carry out 
        sections 3207 and 3208 will be used only to supplement, and not 
        to supplant, Federal, State, and local funds otherwise 
        available to support existing services and activities (as of 
        the date the amounts are used) that encourage child care 
        providers to improve their qualifications and that promote the 
        retention of qualified child care providers in the child care 
        field.

SEC. 3207. CHILD CARE PROVIDER DEVELOPMENT AND RETENTION GRANT PROGRAM.

    (a) In General.--A State that receives funds allotted under section 
3205 and made available to carry out this section shall expend such 
funds to make grants to eligible child care providers in accordance 
with this section, to improve the qualifications and promote the 
retention of qualified child care providers.
    (b) Eligibility To Receive Grants.--To be eligible to receive a 
grant under this section, a child care provider shall--
            (1) have a child development associate credential or 
        equivalent, an associate of the arts degree in the area of 
        child development or early child education, a baccalaureate 
        degree in the area of child development or early child 
        education, or a baccalaureate degree in an unrelated field; and
            (2) be employed as a child care provider for not less than 
        1 calendar year, or (if the provider is employed on the date of 
        the eligibility determination in a child care program that 
        operates for less than a full calendar year) the program 
        equivalent of 1 calendar year, ending on the date of the 
        application for such grant, except that not more than 3 months 
        of education related to child development or to early child 
        education obtained during the corresponding calendar year may 
        be treated as employment that satisfies the requirements of 
        this paragraph.
    (c) Preservation of Eligibility.--A State shall not take into 
consideration whether a child care provider is receiving, may receive, 
or may be eligible to receive any funds under section 3208 for purposes 
of selecting eligible child care providers to receive grants under this 
section.

SEC. 3208. CHILD CARE PROVIDER SCHOLARSHIP PROGRAM.

    (a) In General.--A State that receives funds allotted under section 
3205 and made available to carry out this section shall expend such 
funds to make scholarship grants to eligible child care providers in 
accordance with this section, to improve their educational 
qualifications to provide child care services.
    (b) Eligibility Requirement for Scholarship Grants.--To be eligible 
to receive a scholarship grant under this section, a child care 
provider shall be employed as a child care provider for not less than 1 
calendar year, or (if the provider is employed on the date of the 
eligibility determination in a child care program that operates for 
less than a full calendar year) the program equivalent of 1 calendar 
year, ending on the date of the application for such grant.
    (c) Selection of Grantees.--For purposes of selecting eligible 
child care providers to receive scholarship grants under this section 
and determining the amounts of such grants, a State shall not--
            (1) take into consideration whether a child care provider 
        is receiving, may receive, or may be eligible to receive any 
        funds under any other provision of this Act, or under any other 
        Federal or State law that provides funds for educational 
        purposes; or
            (2) consider as resources of such provider any funds such 
        provider is receiving, may receive, or may be eligible to 
        receive under any other provision of this Act, under any other 
        Federal or State law that provides funds for educational 
        purposes, or from a private entity.
    (d) Cost-Sharing Required.--The amount of a scholarship grant made 
under this section to an eligible child care provider shall be less 
than the cost of the educational or training program for which such 
grant is made.
    (e) Annual Maximum Scholarship Grant Amount.--The maximum aggregate 
dollar amount of a scholarship grant made by a State to an eligible 
child care provider under this section in a fiscal year shall $1,500.

SEC. 3209. ANNUAL REPORT.

    A State that receives funds appropriated to carry out this Act for 
a fiscal year shall submit to the Secretary, not later than 90 days 
after the end of such fiscal year, a report--
            (1) specifying the uses for which the State expended such 
        funds, and the aggregate amount of funds (including State 
        funds) expended for each of such uses;
            (2) containing available data relating to grants made with 
        such funds, including--
                    (A) the number of child care providers who received 
                such grants;
                    (B) the amounts of such grants;
                    (C) any other information that describes or 
                evaluates the effectiveness of this Act;
                    (D) the particular geographical areas selected 
                under section 3206 for the purpose of making such 
                grants;
                    (E) with respect to grants made under section 
                3207--
                            (i) the number of years grant recipients 
                        have been employed as child care providers;
                            (ii) the level of training and education of 
                        grant recipients;
                            (iii) to the extent practicable and 
                        available to the State, detailed information 
                        regarding the salaries and other compensation 
                        received by grant recipients to provide child 
                        care services before, during, and after 
                        receiving such grant;
                            (iv) the number of children who received 
                        child care services provided by grant 
                        recipients;
                            (v) information on family demographics of 
                        such children;
                            (vi) the types of settings described in 
                        subparagraphs (A), (B), and (C) of section 
                        3203(a)(1) in which grant recipients are 
                        employed; and
                            (vii) the ages of the children who received 
                        child care services provided by grant 
                        recipients;
                    (F) with respect to grants made under section 
                3208--
                            (i) the number of years grant recipients 
                        have been employed as child care providers;
                            (ii) the level of training and education of 
                        grant recipients;
                            (iii) to the extent practicable and 
                        available to the State, detailed information 
                        regarding the salaries and other compensation 
                        received by grant recipients to provide child 
                        care services before, during, and after 
                        receiving such grant;
                            (iv) the types of settings described in 
                        subparagraphs (A), (B), and (C) of section 
                        3203(a)(1) in which grant recipients are 
                        employed;
                            (v) the ages of the children who received 
                        child care services provided by grant 
                        recipients;
                            (vi) the number of course credits or 
                        credentials obtained by grant recipients; and
                            (vii) the amount of time taken for 
                        completion of the educational and training 
                        programs for which such grants were made; and
                    (G) such other information as the Secretary may 
                require by rule.

SEC. 3210. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $5,000,000,000 in the 
aggregate for fiscal years 2002 through 2006 to carry out this Act.

CHAPTER 2--STRENGTHENING QUALITY THROUGH THE CHILD CARE AND DEVELOPMENT 
                              BLOCK GRANT

SEC. 3231. STATE PLAN.

    Section 658E(c)(2) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858c(c)(2)), as amended in section 3112, is 
further amended by adding at the end the following:
                    ``(K) Establishment of training requirements.--
                Certify that there are requirements in effect within 
                the State, under State or local law, that are designed 
                to support the learning and development of children and 
                that are applicable to all child care providers that 
                provide services for which assistance is made available 
                under this subchapter. Such requirements shall include 
                requirements relating to preservice training in 
                childhood development.
                    ``(L) Insuring the safety of children.--Certify 
                that there are requirements in effect within the State, 
                under State or local law, that require that evaluators 
                from an appropriate State or local agency make not less 
                than 2 unannounced visits annually to each child care 
                provider in the State that provides services for which 
                assistance is made available under this subchapter.''.

SEC. 3232. CHILD CARE QUALITY IMPROVEMENTS.

    Section 658G of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858e), as amended in section 3002, is further amended 
by striking subsection (a) and inserting the following:
    ``(a) Activities To Improve the Quality of Child Care.--
            ``(1) In general.--A State that receives funds to carry out 
        this subchapter shall reserve and use not less than 12 percent 
        of the funds--
                    ``(A) for 1 or more activities consisting of--
                            ``(i) providing directly, or providing 
                        financial assistance to private nonprofit 
                        organizations or public entities (including 
                        units of general purpose local government) for 
                        the development, establishment, expansion, 
                        operation, and coordination of, child care 
                        resource and referral services;
                            ``(ii) making grants or providing loans to 
                        eligible child care providers to assist the 
                        providers in meeting applicable State and local 
                        child care standards and recognized 
                        accreditation standards;
                            ``(iii) improving the ability of State or 
                        local government, as applicable, to monitor 
                        compliance with, and to enforce, State and 
                        local licensing and regulatory requirements 
                        (including registration requirements) 
                        applicable to child care providers;
                            ``(iv) providing training and technical 
                        assistance in areas relating to the provision 
                        of child care services, such as training 
                        relating to promotion of health and safety, 
                        promotion of good nutrition, provision of first 
                        aid, recognition of communicable diseases, 
                        child abuse detection and prevention, and care 
                        of children with special needs; and
                            ``(v) improving salaries and other 
                        compensation paid to full-time and part-time 
                        staff who provide child care services for which 
                        assistance is made available under this 
                        subchapter; and
                    ``(B) to support the system described in paragraph 
                (2).
            ``(2) Child care resource and referral system.--The State 
        shall use a portion of the funds reserved under paragraph (1) 
        to support a system of local child care resource and referral 
        organizations coordinated by a statewide lead child care 
        resource and referral organization. The local child care 
        resource and referral organizations shall--
                    ``(A) provide parents in the State with information 
                and support concerning child care options in their 
                communities;
                    ``(B) collect data on the supply of and demand for 
                child care in political subdivisions within the State;
                    ``(C) develop links with the business community; 
                and
                    ``(D) increase the supply and improve the quality 
                of child care in the State and in political 
                subdivisions in the State.''.

SEC. 3233. ADMINISTRATION AND ENFORCEMENT.

    (a) In General.--Section 658I of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858g) is amended by adding at the 
end the following:
    ``(c) Federal Administration Activities.--The Secretary shall use 
the funds reserved under section 658O(a)(3)--
            ``(1) to support the establishment of a national data 
        system to develop statistics on the supply of, demand for, and 
        quality of child care, early education, and non-school-hours 
        programs, including use of data collected through child care 
        resource and referral organizations at the national, State, and 
        local levels;
            ``(2) to prepare and submit to Congress an annual report on 
        the supply of, demand for, and quality of child care, early 
        education, and non-school-hours programs, using data collected 
        through State and local child care resource and referral 
        organizations and other sources; and
            ``(3) to provide technical assistance to States to enable 
        the States to participate in carrying out the activities 
        described in paragraphs (1) and (2).''.
    (b) Reservation.--Section 658O(a) of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858m(a)) is amended by adding at 
the end the following:
            ``(3) Administration.--The Secretary shall reserve not more 
        than 2 percent of the amount appropriated under section 658B 
        for each fiscal year to carry out section 658I(c).''.

          CHAPTER 3--CHILD CARE CENTERS IN FEDERAL FACILITIES

SEC. 3241. SHORT TITLE.

    This chapter may be cited as the ``Federal Employees Child Care 
Act''.

SEC. 3242. DEFINITIONS.

    In this chapter (except as otherwise provided in section 3245):
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of General Services.
            (2) Child care accreditation entity.--The term ``child care 
        accreditation entity'' means a nonprofit private organization 
        or public agency that--
                    (A) is recognized by a State agency or by a 
                national organization that serves as a peer review 
                panel on the standards and procedures of public and 
                private child care or school accrediting bodies; and
                    (B) accredits a facility to provide child care on 
                the basis of--
                            (i) an accreditation or credentialing 
                        instrument based on peer-validated research;
                            (ii) compliance with applicable State or 
                        local licensing requirements, as appropriate, 
                        for the facility;
                            (iii) outside monitoring of the facility; 
                        and
                            (iv) criteria that provide assurances of--
                                    (I) use of developmentally 
                                appropriate health and safety standards 
                                at the facility;
                                    (II) use of developmentally 
                                appropriate educational activities, as 
                                an integral part of the child care 
                                program carried out at the facility; 
                                and
                                    (III) use of ongoing staff 
                                development or training activities for 
                                the staff of the facility, including 
                                related skills-based testing.
            (3) Entity sponsoring a child care facility.--The term 
        ``entity sponsoring a child care facility'' means a Federal 
        agency that operates, or an entity that enters into a contract 
        or licensing agreement with a Federal agency to operate, a 
        child care facility primarily for the use of Federal employees.
            (4) Executive agency.--The term ``Executive agency'' has 
        the meaning given the term in section 105 of title 5, United 
        States Code, except that the term--
                    (A) does not include the Department of Defense and 
                the Coast Guard; and
                    (B) includes the General Services Administration, 
                with respect to the administration of a facility 
                described in paragraph (5)(B).
            (5) Executive facility.--The term ``executive facility''--
                    (A) means a facility that is owned or leased by an 
                Executive agency; and
                    (B) includes a facility that is owned or leased by 
                the General Services Administration on behalf of a 
                judicial office.
            (6) Federal agency.--The term ``Federal agency'' means an 
        Executive agency, a legislative office, or a judicial office.
            (7) Judicial facility.--The term ``judicial facility'' 
        means a facility that is owned or leased by a judicial office 
        (other than a facility that is also a facility described in 
        paragraph (5)(B)).
            (8) Judicial office.--The term ``judicial office'' means an 
        entity of the judicial branch of the Federal Government.
            (9) Legislative facility.--The term ``legislative 
        facility'' means a facility that is owned or leased by a 
        legislative office.
            (10) Legislative office.--The term ``legislative office'' 
        means an entity of the legislative branch of the Federal 
        Government.
            (11) State.--The term ``State'' has the meaning given the 
        term in section 658P of the Child Care and Development Block 
        Grant Act of 1990 (42 U.S.C. 9858n).

SEC. 3243. PROVIDING QUALITY CHILD CARE IN FEDERAL FACILITIES.

    (a) Executive Facilities.--
            (1) State and local licensing requirements.--
                    (A) In general.--Any entity sponsoring a child care 
                facility in an executive facility shall--
                            (i) comply with child care standards 
                        described in paragraph (2) that are no less 
                        stringent than applicable State or local 
                        licensing requirements that are related to the 
                        provision of child care in the State or 
                        locality involved; or
                            (ii) obtain the applicable State or local 
                        licenses, as appropriate, for the facility.
                    (B) Compliance.--Not later than 6 months after the 
                date of enactment of this Act--
                            (i) the entity shall comply, or make 
                        substantial progress (as determined by the 
                        Administrator) toward complying, with 
                        subparagraph (A); and
                            (ii) any contract or licensing agreement 
                        used by an Executive agency for the provision 
                        of child care services in the child care 
                        facility shall include a condition that the 
                        child care be provided by an entity that 
                        complies with the standards described in 
                        subparagraph (A)(i) or obtains the licenses 
                        described in subparagraph (A)(ii).
            (2) Health, safety, and facility standards.--The 
        Administrator shall by regulation establish standards relating 
        to health, safety, facilities, facility design, and other 
        aspects of child care that the Administrator determines to be 
        appropriate for child care in executive facilities, and require 
        child care facilities, and entities sponsoring child care 
        facilities, in executive facilities to comply with the 
        standards. The standards shall include requirements that 
child care facilities be inspected for, and be free of, lead hazards.
            (3) Accreditation standards.--
                    (A) In general.--The Administrator shall issue 
                regulations requiring, to the maximum extent possible, 
                any entity sponsoring an eligible child care facility 
                (as defined by the Administrator) in an executive 
                facility to comply with standards of a child care 
                accreditation entity.
                    (B) Compliance.--The regulations shall require 
                that, not later than 3 years after the date of 
                enactment of this Act--
                            (i) the entity shall comply, or make 
                        substantial progress (as determined by the 
                        Administrator) toward complying, with the 
                        standards; and
                            (ii) any contract or licensing agreement 
                        used by an Executive agency for the provision 
                        of child care services in the child care 
                        facility shall include a condition that the 
                        child care be provided by an entity that 
                        complies with the standards.
            (4) Evaluation and compliance.--
                    (A) In general.--The Administrator shall evaluate 
                the compliance, with the requirements of paragraph (1) 
                and the regulations issued pursuant to paragraphs (2) 
                and (3), as appropriate, of child care facilities, and 
                entities sponsoring child care facilities, in executive 
                facilities. The Administrator may conduct the 
                evaluation of such a child care facility or entity 
                directly, or through an agreement with another Federal 
                agency or private entity, other than the Federal agency 
                for which the child care facility is providing 
                services. If the Administrator determines, on the basis 
                of such an evaluation, that the child care facility or 
                entity is not in compliance with the requirements, the 
                Administrator shall notify the Executive agency.
                    (B) Effect of noncompliance.--On receipt of the 
                notification of noncompliance issued by the 
                Administrator, the head of the Executive agency shall--
                            (i) if the entity operating the child care 
                        facility is the agency--
                                    (I) not later than 2 business days 
                                after the date of receipt of the 
                                notification, correct any deficiencies 
                                that are determined by the 
                                Administrator to be life threatening or 
                                to present a risk of serious bodily 
                                harm;
                                    (II) not later than 4 months after 
                                the date of receipt of the 
                                notification, develop and provide to 
                                the Administrator a plan to correct any 
                                other deficiencies in the operation of 
                                the facility and bring the facility and 
                                entity into compliance with the 
                                requirements;
                                    (III) provide the parents of the 
                                children receiving child care services 
                                at the child care facility and 
                                employees of the facility with a 
                                notification detailing the deficiencies 
                                described in subclauses (I) and (II) 
                                and actions that will be taken to 
                                correct the deficiencies, and post a 
                                copy of the notification in a 
                                conspicuous place in the facility for 5 
                                working days or until the deficiencies 
                                are corrected, whichever is later;
                                    (IV) bring the child care facility 
                                and entity into compliance with the 
                                requirements and certify to the 
                                Administrator that the facility and 
                                entity are in compliance, based on an 
                                onsite evaluation of the facility 
                                conducted by an individual with 
                                expertise in child care health and 
                                safety; and
                                    (V) in the event that deficiencies 
                                determined by the Administrator to be 
                                life threatening or to present a risk 
                                of serious bodily harm cannot be 
                                corrected within 2 business days after 
                                the date of receipt of the 
                                notification, close the child care 
                                facility, or the affected portion of 
                                the facility, until the deficiencies 
                                are corrected and notify the 
                                Administrator of the closure; and
                            (ii) if the entity operating the child care 
                        facility is a contractor or licensee of the 
                        Executive agency--
                                    (I) require the contractor or 
                                licensee, not later than 2 business 
                                days after the date of receipt of the 
                                notification, to correct any 
                                deficiencies that are determined by the 
                                Administrator to be life threatening or 
                                to present a risk of serious bodily 
                                harm;
                                    (II) require the contractor or 
                                licensee, not later than 4 months after 
                                the date of receipt of the 
                                notification, to develop and provide to 
                                the head of the agency a plan to 
                                correct any other deficiencies in the 
                                operation of the child care facility 
                                and bring the facility and entity into 
                                compliance with the requirements;
                                    (III) require the contractor or 
                                licensee to provide the parents of the 
                                children receiving child care services 
                                at the child care facility and 
                                employees of the facility with a 
                                notification detailing the deficiencies 
                                described in subclauses (I) and (II) 
                                and actions that will be taken to 
                                correct the deficiencies, and to post a 
                                copy of the notification in a 
                                conspicuous place in the facility for 5 
                                working days or until the deficiencies 
                                are corrected, whichever is later;
                                    (IV) require the contractor or 
                                licensee to bring the child care 
                                facility and entity into compliance 
                                with the requirements and certify to 
                                the head of the agency that the 
                                facility and entity are in compliance, 
                                based on an onsite evaluation of the 
                                facility conducted by an independent 
                                entity with expertise in child care 
                                health and safety; and
                                    (V) in the event that deficiencies 
                                determined by the Administrator to be 
                                life threatening or to present a risk 
                                of serious bodily harm cannot be 
                                corrected within 2 business days after 
                                the date of receipt of the 
                                notification, close the child care 
                                facility, or the affected portion of 
                                the facility, until the deficiencies 
                                are corrected and notify the 
                                Administrator of the closure, which 
                                closure may be grounds for the 
                                immediate termination or suspension of 
                                the contract or license of the 
                                contractor or licensee.
                    (C) Cost reimbursement.--The Executive agency shall 
                reimburse the Administrator for the costs of carrying 
                out subparagraph (A) for child care facilities located 
                in an executive facility other than an executive 
                facility of the General Services Administration. If an 
                entity is sponsoring a child care facility for 2 or 
                more Executive agencies, the Administrator shall 
                allocate the reimbursement costs with respect to the 
                entity among the agencies in a fair and equitable 
                manner, based on the extent to which each agency is 
                eligible to place children in the facility.
            (5) Disclosure of prior violations to parents and facility 
        employees.--
                    (A) In general.--The Administrator shall issue 
                regulations that require that each entity sponsoring a 
                child care facility in an executive facility, upon 
                receipt by the child care facility or the entity (as 
                applicable) of a request by any individual who is--
                            (i) a parent of any child enrolled at the 
                        facility;
                            (ii) a parent of a child for whom an 
                        application has been submitted to enroll at the 
                        facility; or
                            (iii) an employee of the facility;
                shall provide to the individual the copies and 
                description described in subparagraph (B).
                    (B) Copies and description.--The entity shall 
                provide--
                            (i) copies of all notifications of 
                        deficiencies that have been provided in the 
                        past with respect to the facility under clause 
                        (i)(III) or (ii)(III), as applicable, of 
                        paragraph (4)(B); and
                            (ii) a description of the actions that were 
                        taken to correct the deficiencies.
    (b) Legislative Facilities.--
            (1) Accreditation.--The Chief Administrative Officer of the 
        House of Representatives, the Librarian of Congress, and the 
        head of a designated entity in the Senate shall ensure that, 
        not later than 1 year after the date of enactment of this Act, 
        the corresponding child care facility obtains accreditation by 
        a child care accreditation entity, in accordance with the 
        accreditation standards of the entity.
            (2) Regulations.--
                    (A) In general.--If the corresponding child care 
                facility does not maintain accreditation status with a 
                child care accreditation entity, the Chief 
                Administrative Officer of the House of Representatives, 
                the Librarian of Congress, or the head of the 
                designated entity in the Senate shall issue regulations 
                governing the operation of the corresponding child care 
                facility, to ensure the safety and quality of care of 
                children placed in the facility. The regulations shall 
                be no less stringent in content and effect than the 
                requirements of subsection (a)(1) and the regulations 
                issued by the Administrator under paragraphs (2) and 
                (3) of subsection (a), except to the extent that 
                appropriate administrative officers make the 
                determination described in subparagraph (B).
                    (B) Modification more effective.--The determination 
                referred to in subparagraph (A) is a determination, for 
                good cause shown and stated together with the 
                regulations, that a modification of the regulations 
                would be more effective for the implementation of the 
                requirements and standards described in subsection (a) 
                for the corresponding child care facilities, 
and entities sponsoring the corresponding child care facilities, in 
legislative facilities.
            (3) Corresponding child care facility.--In this subsection, 
        the term ``corresponding child care facility'', used with 
        respect to the Chief Administrative Officer, the Librarian, or 
        the head of a designated entity described in paragraph (1), 
        means a child care facility operated by, or under a contract or 
        licensing agreement with, an office of the House of 
        Representatives, the Library of Congress, or an office of the 
        Senate, respectively.
    (c) Judicial Branch Standards and Compliance.--
            (1) State and local licensing requirements health, safety, 
        and facility standards, and accreditation standards.--The 
        Director of the Administrative Office of the United States 
        Courts shall issue regulations for child care facilities, and 
        entities sponsoring child care facilities, in judicial 
        facilities, which shall be no less stringent in content and 
        effect than the requirements of subsection (a)(1) and the 
        regulations issued by the Administrator under paragraphs (2) 
        and (3) of subsection (a), except to the extent that the 
        Director may determine, for good cause shown and stated 
        together with the regulations, that a modification of such 
        regulations would be more effective for the implementation of 
        the requirements and standards described in paragraphs (1), 
        (2), and (3) of subsection (a) for child care facilities, and 
        entities sponsoring child care facilities, in judicial 
        facilities.
            (2) Evaluation and compliance.--
                    (A) Director of the administrative office of the 
                united states courts.--The Director of the 
                Administrative Office of the United States Courts shall 
                have the same authorities and duties with respect to 
                the evaluation of, compliance of, and cost 
                reimbursement for child care facilities, and entities 
                sponsoring child care facilities, in judicial 
                facilities as the Administrator has under subsection 
                (a)(4) with respect to the evaluation of, compliance 
                of, and cost reimbursement for such centers and 
                entities sponsoring such centers, in executive 
                facilities.
                    (B) Head of a judicial office.--The head of a 
                judicial office shall have the same authorities and 
                duties with respect to the compliance of and cost 
                reimbursement for child care facilities, and entities 
                sponsoring child care facilities, in judicial 
                facilities as the head of an Executive agency has under 
                subsection (a)(4) with respect to the compliance of and 
                cost reimbursement for such centers and entities 
                sponsoring such centers, in executive facilities.
    (d) Application.--Notwithstanding any other provision of this 
section, if 8 or more child care facilities are sponsored in facilities 
owned or leased by an Executive agency, the Administrator shall 
delegate to the head of the agency the evaluation and compliance 
responsibilities assigned to the Administrator under subsection 
(a)(4)(A).
    (e) Technical Assistance, Studies, and Reviews.--The Administrator 
may provide technical assistance, and conduct and provide the results 
of studies and reviews, for Executive agencies, and entities sponsoring 
child care facilities in executive facilities, on a reimbursable basis, 
in order to assist the entities in complying with this section. The 
Chief Administrative Officer of the House of Representatives, the 
Librarian of Congress, the head of the designated Senate entity 
described in subsection (b), and the Director of the Administrative 
Office of the United States Courts, may provide technical assistance, 
and conduct and provide the results of studies and reviews, or request 
that the Administrator provide technical assistance, and conduct and 
provide the results of studies and reviews, for legislative offices and 
judicial offices, as appropriate, and entities operating child care 
facilities in legislative facilities or judicial facilities, as 
appropriate, on a reimbursable basis, in order to assist the entities 
in complying with this section.
    (f) Interagency Council.--
            (1) Composition.--The Administrator shall establish an 
        interagency council, comprised of--
                    (A) representatives of all Executive agencies 
                described in subsection (d) and other Executive 
                agencies at the election of the heads of the agencies;
                    (B) a representative of the Chief Administrative 
                Officer of the House of Representatives, at the 
                election of the Chief Administrative Officer;
                    (C) a representative of the head of the designated 
                Senate entity described in subsection (b), at the 
                election of the head of the entity;
                    (D) a representative of the Librarian of Congress, 
                at the election of the Librarian; and
                    (E) a representative of the Director of the 
                Administrative Office of the United States Courts, at 
                the election of the Director.
            (2) Functions.--The council shall facilitate cooperation 
        and sharing of best practices, and develop and coordinate 
        policy, regarding the provision of child care, including the 
        provision of areas for nursing mothers and other lactation 
        support facilities and services, in the Federal Government.
    (g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $900,000 for fiscal year 2002 
and such sums as may be necessary for each subsequent fiscal year.

SEC. 3244. FEDERAL CHILD CARE EVALUATION.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator and the Director of the Office of 
Personnel Management shall jointly prepare and submit to Congress a 
report that evaluates child care provided by entities sponsoring child 
care facilities in executive facilities, legislative facilities, or 
judicial facilities.
    (b) Contents.--The evaluation shall contain, at a minimum--
            (1) information on the number of children receiving child 
        care described in subsection (a), analyzed by age, including 
        information on the number of those children who are age 6 
        through 12;
            (2) information on the number of families not using child 
        care described in subsection (a) because of the cost of the 
        child care; and
            (3) recommendations for improving the quality and cost-
        effectiveness of child care described in subsection (a), 
        including recommendations of options for creating an optimal 
        organizational structure and using best practices for the 
        delivery of the child care.

SEC. 3245. CHILD CARE SERVICES FOR FEDERAL EMPLOYEES.

    (a) In General.--In addition to services authorized to be provided 
by an agency of the United States pursuant to section 616 of the Act of 
December 22, 1987 (40 U.S.C. 490b), an Executive agency that provides 
or proposes to provide child care services for Federal employees may 
use agency funds to provide the child care services, in a facility that 
is owned or leased by an Executive agency, or through a contractor, for 
civilian employees of the agency.
    (b) Affordability.--Funds so used with respect to any such facility 
or contractor shall be applied to improve the affordability of child 
care for lower income Federal employees using or seeking to use the 
child care services offered by the facility or contractor.
    (c) Regulations.--The Administrator after consultation with the 
Director of the Office of Personnel Management, shall, within 180 days 
after the date of enactment of this Act, issue regulations necessary to 
carry out this section.
    (d) Definition.--For purposes of this section, the term ``Executive 
agency'' has the meaning given the term by section 105 of title 5, 
United States Code, but does not include the General Accounting Office.

SEC. 3246. MISCELLANEOUS PROVISIONS RELATING TO CHILD CARE PROVIDED BY 
              FEDERAL AGENCIES.

    (a) Availability of Federal Child Care Centers for Onsite 
Contractors; Percentage Goal.--Section 616 of the Act of December 22, 
1987 (40 U.S.C. 490b) is amended--
            (1) in subsection (a)--
                    (A) by striking ``officer or agency of the United 
                States'' and inserting ``Federal agency or officer of a 
                Federal agency''; and
                    (B) by striking paragraphs (2) and (3) and 
                inserting the following:
            ``(2) the officer or agency determines that the space will 
        be used to provide child care and related services to--
                    ``(A) children of Federal employees or onsite 
                Federal contractors; or
                    ``(B) dependent children who live with Federal 
                employees or onsite Federal contractors; and
            ``(3) the officer or agency determines that the individual 
        or entity will give priority for available child care and 
        related services in the space to Federal employees and onsite 
        Federal contractors.''; and
            (2) by adding at the end the following:
    ``(f)(1)(A) The Administrator of General Services shall confirm 
that at least 50 percent of aggregate enrollment in Federal child care 
centers governmentwide are children of Federal employees or onsite 
Federal contractors, or dependent children who live with Federal 
employees or onsite Federal contractors.
    ``(B) Each provider of child care services at an individual Federal 
child care center shall maintain 50 percent of the enrollment at the 
center of children described under subparagraph (A) as a goal for 
enrollment at the center.
    ``(C)(i) If enrollment at a center does not meet the percentage 
goal under subparagraph (B), the provider shall develop and implement a 
business plan with the sponsoring Federal agency to achieve the goal 
within a reasonable timeframe.
    ``(ii) The plan shall be approved by the Administrator of General 
Services based on--
            ``(I) compliance of the plan with standards established by 
        the Administrator; and
            ``(II) the effect of the plan on achieving the aggregate 
        Federal enrollment percentage goal.
    ``(2) The Administrator of General Services may enter into public-
private partnerships or contracts with nongovernmental entities to 
increase the capacity, quality, affordability, or range of child care 
and related services and may, on a demonstration basis, waive 
subsection (a)(3) and paragraph (1) of this subsection.''.
    (b) Payment of Costs of Training Programs.--Section 616(b)(3) of 
such Act (40 U.S.C. 490b(b)(3)) is amended to read as follows:
    ``(3) If a Federal agency has a child care facility in a Federal 
space, or is a sponsoring agency for a child care facility in a Federal 
space, the agency or the General Services Administration may pay 
accreditation fees, including renewal fees, for that center to be 
accredited. Any Federal agency that provides or proposes to provide 
child care services for children referred to in subsection (a)(2), may 
reimburse any Federal employee or any person employed to provide the 
services for the costs of training programs, conferences, and meetings 
and related travel, transportation, and subsistence expenses incurred 
in connection with those activities. Any per diem allowance made under 
this section shall not exceed the rate specified in regulations 
prescribed under section 5707 of title 5, United States Code.''.
    (c) Technical and Conforming Amendments.--Section 616(c) of such 
Act (40 U.S.C. 490b(c)) is amended--
            (1) by inserting ``Federal'' before ``child care centers''; 
        and
            (2) by striking ``Federal workers'' and inserting ``Federal 
        employees''.
    (d) Provision of Child Care by Private Entities.--Section 616(d) of 
such Act (40 U.S.C. 490b(d)) is amended to read as follows:
    ``(d)(1) If a Federal agency has a child care facility in a Federal 
space, or is a sponsoring agency for a child care facility in a Federal 
space, the agency, the child care center board of directors, or the 
General Services Administration may enter into an agreement with 1 or 
more private entities under which the private entities would assist in 
defraying the general operating expenses of the child care providers 
including salaries and tuition assistance programs at the facility.
    ``(2)(A) Notwithstanding any other provision of law, if a Federal 
agency does not have a child care program, or if the Administrator of 
General Services has identified a need for child care for Federal 
employees at a Federal agency providing child care services that do not 
meet the requirements of subsection (a), the agency or the 
Administrator may enter into an agreement with a non-Federal, licensed, 
and accredited child care facility, or a planned child care facility 
that will become licensed and accredited, for the provision of child 
care services for children of Federal employees.
    ``(B) Before entering into an agreement, the head of the Federal 
agency shall determine that child care services to be provided through 
the agreement are more cost-effectively provided through the 
arrangement than through establishment of a Federal child care 
facility.
    ``(C) The Federal agency may provide any of the services described 
in subsection (b)(3) if, in exchange for the services, the facility 
reserves child care spaces for children referred to in subsection 
(a)(2), as agreed to by the parties. The cost of any such services 
provided by a Federal agency to a Federal child care facility on behalf 
of another Federal agency shall be reimbursed by the receiving agency.
    ``(3) This subsection does not apply to residential child care 
programs.''.
    (e) Pilot Projects.--Section 616 of such Act (40 U.S.C. 490b) is 
further amended by adding at the end the following:
    ``(g)(1) Upon approval of the agency head, a Federal agency may 
conduct a pilot project not otherwise authorized by law for no more 
than 2 years to test innovative approaches to providing alternative 
forms of quality child care assistance for Federal employees. A Federal 
agency head may extend a pilot project for an additional 2-year period. 
Before any pilot project may be implemented, a determination shall be 
made by the agency head that initiating the pilot project would be more 
cost-effective than establishing a new Federal child care facility. 
Costs of any pilot project shall be paid solely by the agency 
conducting the pilot project.
    ``(2) The Administrator of General Services shall serve as an 
information clearinghouse for pilot projects initiated by other Federal 
agencies to disseminate information concerning the pilot projects to 
the other Federal agencies.
    ``(3) Within 6 months after completion of the initial 2-year pilot 
project period, a Federal agency conducting a pilot project under this 
subsection shall provide for an evaluation of the impact of the project 
on the delivery of child care services to Federal employees, and shall 
submit the results of the evaluation to the Administrator of General 
Services. The Administrator shall share the results with other Federal 
agencies.''.
    (f) Definitions.--Section 616 of such Act (40 U.S.C. 490b) is 
further amended by adding at the end the following:
    ``(h) In this section:
            ``(1) The term `Federal agency' has the meaning given the 
        term `Executive agency' in section 3242 of the Federal 
        Employees Child Care Act.
            ``(2) The terms `Federal building' and `Federal space' have 
        the meanings given the term `executive facility' in such 
        section 3242.
            ``(3) The term `Federal child care center' means a child 
        care center in an executive facility, as defined in such 
        section 3242.
            ``(4) The terms `Federal contractor' and `Federal employee' 
        mean a contractor and an employee, respectively, of an 
        Executive agency, as defined in such section 3242.''.

                       CHAPTER 4--EARLY LEARNING

SEC. 3251. AMENDMENTS TO THE EARLY LEARNING OPPORTUNITIES ACT.

    Section 805 of the Early Learning Opportunities Act (title VIII of 
the Departments of Labor, Health and Human Services, and Education, and 
Related Agencies Appropriations Act, 2001) (as enacted into law by 
section 1(a)(1) of Public Law 106-554) is amended--
            (1) in the matter preceding paragraph (1), by inserting ``, 
        and there are appropriated,'' after ``appropriated''; and
            (2) by striking paragraphs (1) through (4) and inserting 
        the following:
            ``(1) $750,000,000 for fiscal year 2002;
            ``(2) $1,000,000,000 for fiscal year 2003;
            ``(3) $1,500,000,000 for fiscal year 2004;
            ``(4) $2,000,000,000 for fiscal year 2005; and
            ``(5) $2,500,000,000 for fiscal year 2006.''.

               CHAPTER 5--CHILD CARE FACILITIES FINANCING

SEC. 3261. SHORT TITLE.

    This chapter may be cited as the ``Child Care Facilities Financing 
Act''.

SEC. 3262. TECHNICAL AND FINANCIAL ASSISTANCE GRANTS.

    (a) Definitions.--In this section:
            (1) Child care facility.--The term ``child care facility'' 
        means a center-based or home-based child care facility.
            (2) Eligible intermediary.--The term ``eligible 
        intermediary'' means a private, nonprofit intermediary 
        organization that has demonstrated experience in--
                    (A) providing technical or financial assistance for 
                the construction and renovation of physical facilities;
                    (B) providing technical or financial assistance to 
                child care providers; and
                    (C) securing private sources for capital financing 
                of child care or other low-income community 
                development.
            (3) Eligible recipient.--The term ``eligible recipient'' 
        means--
                    (A) any existing or new center-based or home-based 
                child care provider that provides services to eligible 
                children under a program carried out under the Child 
                Care and Development Block Grant Act of 1990 (42 U.S.C. 
                9858 et seq.), or another program serving low-income 
children as determined by the Secretary; and
                    (B) any organization in the process of establishing 
                a center-based or home-based child care program or 
                otherwise seeking to provide child care services to 
                children described in subparagraph (A).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (b) Grant Authority.--The Secretary may award grants on a 
competitive basis in accordance with this section to eligible 
intermediaries to assist the intermediaries in carrying out the 
activities described in subsection (e).
    (c) Applications.--To be eligible to receive a grant under this 
section an eligible intermediary shall submit to the Secretary an 
application, in such form and containing such information as the 
Secretary may require.
    (d) Priority.--In awarding grants under this section the Secretary 
shall give a priority to applicants under subsection (c) that serve 
low-income areas or individuals.
    (e) Use of Funds.--
            (1) Revolving fund.--Each eligible intermediary that 
        receives a grant under this section shall deposit the grant 
        amount into a child care revolving fund established by the 
        eligible intermediary.
            (2) Payments from fund.--Subject to subsection (f), from 
        amounts deposited into the revolving fund under paragraph (1), 
        each eligible intermediary shall provide technical and 
        financial assistance (in the form of loans, grants, 
        investments, guarantees, interest subsidies, and other 
        appropriate forms of assistance) to eligible recipients to pay 
        for the Federal share of the cost of the acquisition, 
        construction, or improvement of child care facilities or 
        equipment, or for the improvement of related management and 
        business practices, for each such recipient. The amounts may be 
        used solely for the purpose of providing technical or financial 
        assistance.
            (3) Loan repayments and investment proceeds.--Any amount 
        received by an eligible intermediary from an eligible recipient 
        in the form of a loan repayment or investment proceeds shall be 
        deposited into the child care revolving fund of the eligible 
        intermediary for redistribution to other eligible recipients in 
        accordance with this section.
    (f) Federal Share.--
            (1) In general.--The Federal share of the cost described in 
        subsection (e)(2) shall be not more than 50 percent.
            (2) Non-federal share.--The non-Federal share of the cost 
        may be provided in cash or in kind, fairly evaluated, including 
        plant, equipment, or services.
    (g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $500,000,000 for each of fiscal 
years 2002 through 2006.

             Subtitle D--Head Start Access and Improvement

SEC. 3301. AUTHORIZATION OF APPROPRIATIONS.

    Section 639(a) of the Head Start Act (42 U.S.C. 9834(a)) is amended 
to read as follows:
    ``(a) There are authorized to be appropriated to carry out this 
subchapter--
            ``(1) $7,199,812,000 for fiscal year 2002;
            ``(2) $8,000,000,000 for fiscal year 2003;
            ``(3) $9,000,000,000 for fiscal year 2004;
            ``(4) $10,000,000,000 for fiscal year 2005;
            ``(5) $11,002,000,000 for fiscal year 2006;
            ``(6) $12,200,000,000 for fiscal year 2007;
            ``(7) $13,605,000,000 for fiscal year 2008;
            ``(8) $15,275,000,000 for fiscal year 2009;
            ``(9) $17,280,000,000 for fiscal year 2010; and
            ``(10) $19,720,000,000 for fiscal year 2011.''.

                   Subtitle E--Education Improvements

    CHAPTER 1--INCREASING ACCESS TO QUALITY PREKINDERGARTEN PROGRAMS

SEC. 3401. PREKINDERGARTEN PROGRAMS.

    Title X of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8001 et seq.) is amended--
            (1) by redesignating part L as part N; and
            (2) by inserting after part K the following:

                   ``PART L--PREKINDERGARTEN PROGRAMS

``SEC. 10996A. FINDINGS.

    ``Congress finds the following:
            ``(1) Countless studies have shown what every parent 
        already knows: High-quality preschool education programs work. 
        Such programs prepare children to learn when they go to school, 
        and increase the success of students throughout their lives.
            ``(2) Children who get a high-quality prekindergarten 
        education are less likely to repeat a grade level and have less 
        need for special education instruction than those with no 
        prekindergarten experience.
            ``(3) Prekindergarten programs make a significant 
        difference in the lives of children from low-income families. A 
        recent study found that children in high-quality child care 
        programs had better thinking and attention skills, better 
        mathematics and pre-reading skills, and fewer behavioral 
        problems.
            ``(4) In a study following children to age 21 who received 
        high-quality early childhood education, such children were more 
        likely to have enrolled in college, been employed, and delayed 
        parenthood.

``SEC. 10996B. DEFINITIONS.

    ``In this part:
            ``(1) Prekindergarten.--The term `prekindergarten' means a 
        program serving children ages 3, 4, and 5 years old that 
        supports children's cognitive, social, emotional, and physical 
        development and helps prepare children for the transition to 
        kindergarten.
            ``(2) Eligible prekindergarten provider.--The term 
        `eligible prekindergarten provider' means--
                    ``(A) a child care program or Head Start agency 
                under the Head Start Act (42 U.S.C. 9831 et seq.) 
                that--
                            ``(i) has met applicable State licensing 
                        requirements and has obtained accreditation by 
                        a national accrediting body with demonstrated 
                        experience in accrediting child care programs, 
prekindergarten programs, or schools; or
                            ``(ii) agrees to obtain such accreditation 
                        not later than 3 years after receipt of a grant 
                        under this part; and
                    ``(B) a local educational agency in partnership 
                with an early childhood program, organization, or 
                agency that serves prekindergarten school children.
            ``(3) Prekindergarten Teacher.--The term `prekindergarten 
        teacher' means an individual who has, or is working toward, a 
        bachelor of arts degree in early childhood development.

``SEC. 10996C. PROGRAM AUTHORIZED.

    ``(a) In General.--From amounts made available under section 
10996G, the Secretary may provide grants to States with approved 
applications under subsection (b)(2) for the purpose of enabling to 
States to award subgrants to eligible prekindergarten providers to 
establish, enhance, or expand prekindergarten programs.
    ``(b) State Agency.--
            ``(1) In general.--A State desiring a grant under this part 
        shall designate a State agency to administer the grant.
            ``(2) Application.--
                    ``(A) In general.--With respect to a State desiring 
                a grant under this part, the State agency designated 
                under paragraph (1) shall submit an application to the 
                Secretary at such time, in such manner, and containing 
                such information as the Secretary may require.
                    ``(B) Contents.--The application submitted under 
                subparagraph (A) shall include--
                            ``(i) an assurance that the State will 
                        provide non-Federal matching funds, for 
                        carrying out the programs to be funded by a 
                        grant under this part, in an amount equal to 
                        not less than 20 percent of the grant award; 
                        and
                            ``(ii) a description of--
                                    ``(I) how grant funds will be used 
                                to expand or enhance existing efforts 
                                across the State in providing access to 
                                high quality prekindergarten programs;
                                    ``(II) how the State will 
                                collaborate with local child care 
                                agencies and councils, including local 
                                child care resource and referral 
                                agencies;
                                    ``(III) how grant funds will be 
                                used to supplement and not supplant 
                                existing Federal, State, local and 
                                private funds used for prekindergarten 
                                programs;
                                    ``(IV) how the State will ensure 
                                that grant funds are provided to a 
                                range of types of eligible 
                                prekindergarten providers;
                                    ``(V) how the State will help 
                                eligible prekindergarten providers 
                                attract and retain qualified 
                                prekindergarten teachers;
                                    ``(VI) how the State will identify 
                                eligible prekindergarten providers and 
                                identify children to receive 
                                prekindergarten education; and
                                    ``(VII) how the State will give 
                                priority in awarding subgrants under 
                                paragraph (3)(B) to full-time 
                                prekindergarten programs, including the 
                                expansion of existing part-time 
                                programs into full-time programs.
            ``(3) Duties.--The State agency designated under paragraph 
        (1) shall--
                    ``(A) receive and administer grant funds received 
                under this part;
                    ``(B) award subgrants, from such grant funds 
                received, to eligible prekindergarten providers to 
                carry out section 10996E; and
                    ``(C) conduct evaluations of prekindergarten 
                programs carried out by eligible prekindergarten 
                providers that receive subgrants under subparagraph 
                (B).

``SEC. 10996D. LOCAL APPLICATIONS.

    ``(a) In General.--An eligible prekindergarten provider that 
desires to receive a subgrant under this part shall submit an 
application to the appropriate State agency designated under section 
10996C(b)(1) at such time, in such manner, and containing such 
information as such State agency may reasonably require.
    ``(b) Content.--An application submitted under subsection (a), at a 
minimum, shall--
            ``(1) demonstrate a need for the establishment, 
        enhancement, or expansion of a prekindergarten program;
            ``(2) describe how the eligible prekindergarten provider 
        will collaborate with local early childhood councils and 
        agencies;
            ``(3) provide an assurance that each individual hired as a 
        teacher by the eligible prekindergarten provider is qualified 
        to teach children at the prekindergarten level;
            ``(4) provide an assurance that the ratio of teacher or 
        child development specialist to children at each 
        prekindergarten program administered by the provider will not 
        exceed 1-10;
            ``(5) provide a description of how funds will be used to 
        coordinate with and enhance, but not duplicate or supplant, 
        early childhood programs serving eligible children that exist 
        in the community;
            ``(6) describe how the eligible prekindergarten provider 
        will use a collaborative process with organizations and members 
        of the community that have an interest and experience in early 
        childhood development and education to establish, enhance, or 
        expand prekindergarten programs;
            ``(7) describe how the program to be funded under the 
        subgrant will meet the diverse needs of children, ages 3 
        through 5, in the community who are not enrolled in 
        kindergarten, including children with disabilities or whose 
        native language is other than English;
            ``(8) describe how the eligible prekindergarten provider 
        will collaborate with local schools to ensure a smooth 
        transition for participating students from prekindergarten to 
        kindergarten and early elementary education;
            ``(9) describe the results the prekindergarten program is 
        intended to achieve, and what tools will be used to measure the 
        progress in attaining those results; and
            ``(10) provide an assurance that none of the funds received 
        under this part will be used for the construction or renovation 
        of existing or new facilities (except for minor remodeling 
        needed to accomplish the purposes of this part).

``SEC. 10996E. LOCAL USES OF FUNDS.

    ``(a) In General.--An eligible prekindergarten provider that 
receives a subgrant under this part shall use funds received under such 
subgrant to establish, enhance, or expand prekindergarten programs for 
children, ages 3 through 5, who are not enrolled in kindergarten, 
including--
            ``(1) providing a program that focuses on the developmental 
        needs of participating children, including their social, 
        cognitive, physical, and language-development needs, and uses 
        research-based approaches that build on competencies that lead 
        to school success, particularly in language and literacy 
        development and in reading;
            ``(2) paying the costs of purchasing educational equipment, 
        including educational materials, necessary to provide a high 
        quality program;
            ``(3) pursuing accreditation by a national accreditation 
        body with demonstrated experience in accreditation of 
        prekindergarten programs, to be obtained not later than 3 years 
        after the date on which funds are first received under this 
        part;
            ``(4) helping prekindergarten teachers pursue and attain 
        the credential and degree requirements established by the State 
        and provide a stipend for attaining educational or professional 
        development; and
            ``(5) meeting the needs of working parents.
    ``(b) Permissible Uses of Funds.--An eligible prekindergarten 
provider that receives a subgrant under this part may use funds 
received under such subgrant to pay for transporting students to and 
from a prekindergarten program.

``SEC. 10996F. REPORTING.

    ``(a) Local Reports.--Each eligible prekindergarten provider that 
receives a subgrant under this part shall submit to the State agency 
designated under section 10996C(b)(1), not later than 18 months after 
the date on which the provider first receives such subgrant, a report 
relating to the period for which subgrant funds were received, 
containing information on--
            ``(1) the number and ages of children served by the 
        provider, including information disaggregated by family income, 
        race, disability, native language;
            ``(2) the number of hours of service per day and number of 
        months of service;
            ``(3) the total number of prekindergarten teachers employed 
        by the provider; and
            ``(4) other sources of Federal, State, local, and private 
        funds used to operate the prekindergarten program for which 
        subgrants funds were received under this part.
    ``(b) Report to Congress.--The Secretary shall submit an annual 
report to Congress that evaluates the prekindergarten programs 
established, enhanced, or expanded under this part.

``SEC. 10996G. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$2,000,000,000 for fiscal year 2002, $4,000,000,000 for fiscal year 
2003, $5,000,000,000 for fiscal year 2004, $8,000,000,000 for fiscal 
year 2005, and $10,000,000,000 for fiscal year 2006.''.

              CHAPTER 2--EXPANDING EARLY LITERACY EFFORTS

SEC. 3411. EARLY LITERACY.

    Part C of Title II of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6661 et seq.) is amended--
            (1) by redesignating section 2251 as section 2251A;
            (2) by inserting before section 2251A (as so redesignated) 
        the following:

``SEC. 2251. SHORT TITLE.

    ``This part may be cited as the `Reading Excellence Act'.'';
            (3) by redesignating section 2260 as section 2261;
            (4) by inserting after section 2259 the following:

``SEC. 2260. EARLY LITERACY.

    ``(a) Definitions.--In this section:
            ``(1) Early childhood educator.--The term `early childhood 
        educator' means an individual who spends most or all of the 
        program day working directly with young children and who has 
        responsibility for implementing the educational components of 
        an early childhood education program.
            ``(2) Early childhood education program.--The term `early 
        childhood education program' means a licensed or regulated 
        child care center, preschool, State-funded prekindergarten 
        program, or Head Start program.
            ``(3) Early literacy.--The term `early literacy' means the 
        development of young children's vocabulary, reading, and 
        writing skills in preparation to learn to read and write.
            ``(4) Local early literacy partnership.--The term `local 
        early literacy partnership' means a partnership, council, or 
        consortia that includes representatives of--
                    ``(A) the local educational agency;
                    ``(B) teachers in kindergarten through 3d grade who 
                are responsible for reading instruction, including 
                teachers working with children whose native language is 
                not English and children with disabilities;
                    ``(C) early childhood educators working in a range 
                of early childhood education programs and with children 
                in a range of ages from birth through age 5, including 
                educators working with children whose native language 
is not English and children with disabilities;
                    ``(D) the local child care resource and referral 
                agency, local child care council, Head Start agency, 
                and other appropriate local child care agencies;
                    ``(E) family literacy programs;
                    ``(F) public libraries;
                    ``(G) local institutions of higher education that 
                provide professional development in research-based 
                early literacy and scientifically based reading 
                instruction; and
                    ``(H) parents of children in early childhood 
                programs and in schools.
            ``(5) Research-based early literacy.--The term `research-
        based early literacy' means the application of rigorous, 
        systemic and objective procedures to obtain valid knowledge 
        relevant to language and literacy development and instruction 
        that--
                    ``(A) is based on recent national reports 
                synthesizing research on effective practices to support 
                children's literacy and prevent later reading 
                difficulties;
                    ``(B) draws on high quality quantitative research;
                    ``(C) uses systematic methods that draw on 
                observation or experiment;
                    ``(D) relies on multiple measures;
                    ``(E) meets accepted standards of evidence as 
                judged by a panel of independent experts; and
                    ``(F) draws on the knowledge of effective teaching 
                strategies for young children.
            ``(6) Young children.--The term `young children' means 
        children from birth through age 5 (or until mandatory school 
        age as determined by the State).
    ``(b) Grant Program.--The Secretary shall award grants to State 
educational agencies to enable such State educational agencies to award 
subgrants to local early literacy partnerships for the purpose of 
enhancing the early literacy in early childhood programs serving 
children from birth until kindergarten.
    ``(c) Application.--A State educational agency desiring a grant 
under this section shall submit an application to the Secretary at such 
time, in such manner, and containing such information as the Secretary 
may require, including--
            ``(1) how the State educational agency will disseminate 
        information to a range of early childhood education providers, 
        organizations, local educational agencies, and institutions of 
        higher education regarding the partnership grants;
            ``(2) how the State educational agency will provide 
        technical assistance to local early literacy partnerships by 
        disseminating information on research regarding early literacy 
        curricula and teaching practice; and
            ``(3) how the State educational agency will coordinate with 
        other State agencies having responsibility for early childhood 
        education programs in the selection of the local grantees and 
        in providing technical assistance and information.
    ``(d) Administration.--A State educational agency receiving a grant 
under this section may reserve not more than 2 percent of the grant 
funds received for administrative purposes.
    ``(e) Local Early Literacy Partnership Application.--A local early 
literacy partnership desiring a subgrant under this section shall 
submit an application to the State educational agency at such time, in 
such manner, and containing such information as the State educational 
agency may require. The application shall identify the lead partner 
(which shall have a demonstrated history of effective administration of 
large grants) that will act as the fiscal agent and shall describe--
            ``(1) the roles and responsibilities of each partner entity 
        in the partnership and the resources that will be made 
        available to each such partner entity to carry out those roles 
        and responsibilities;
            ``(2) how the partnership will identify early childhood 
        education programs and early childhood educators that would 
        benefit from the services and professional development to be 
        provided by the partnership under this section;
            ``(3) how the partnership will coordinate Federal, State, 
        local, and private resources related to early literacy and 
        family literacy;
            ``(4) how the research-based early literacy curricula and 
        materials will be made available to early childhood education 
        programs;
            ``(5) how ongoing professional development in research-
        based early literacy will be provided to early childhood 
        educators in a range of early childhood education programs, 
        including the use of technology to deliver such professional 
        development as appropriate;
            ``(6) how the partnership will establish the presence of an 
        early literacy specialist in the local child care resource and 
        referral agency or other appropriate early childhood education 
        agency in order to provide technical assistance and information 
        to programs and early childhood educators;
            ``(7) how the services will build on existing early 
        literacy and family literacy programs and professional 
        development in the community;
            ``(8) how the early literacy activities and professional 
        development for early childhood educators will be coordinated 
        with the activities and professional development of 
        kindergarten teachers in the same geographic area;
            ``(9) how families will participate in early literacy 
        programs to enhance their children's language and literacy 
        progress;
            ``(10) how the partnership will collect and report data as 
        required under subsection (g); and
            ``(11) how the professional development and other 
        activities and materials to be supplied by the partnership 
        under this section will support the early literacy of children 
        whose native language is not English, children with 
        disabilities, and other children at risk of having reading 
        difficulties.
    ``(f) Uses of Funds.--The early literacy partnership shall use 
funds for--
            ``(1) providing research-based early literacy instruction 
        methods, strategies, and curricula to early childhood providers 
        serving children from birth through age 5 in a range of 
        settings in the community;
            ``(2) providing ongoing, regular, professional development 
        to early childhood educators in the selection and use of 
        research-based early literacy instruction methods, strategies, 
        and curricula;
            ``(3) providing a stipend or bonus of sufficient size to 
        each childhood educator who receives the ongoing professional 
        development in research-based early literacy, and who commits 
        to remaining in the same early childhood education program for 
        a minimum of 1 additional full year;
            ``(4) establishing 1 or more early literacy specialists in 
        the local child care resource and referral agency or other 
        appropriate local child care agency or council to provide 
        technical assistance and to disseminate information;
            ``(5) coordinating the delivery of early literacy and 
        family literacy services within the community; and
            ``(6) collecting and reporting information to the State 
        educational agency as required in subsection (g).
    ``(g) Evaluations and Reports.--Each local partnership that 
receives a grant under this section shall submit a report to the State 
educational agency that includes--
            ``(1) a description of the types of early childhood 
        education programs that received services through the grant, 
        including disaggregated information on the age, race, 
        ethnicity, native language, disability status, gender, and 
        family income of the children served and the qualifications, by 
        credential or degree, and compensation of the staff (including 
        directors and teachers);
            ``(2) the extent to which professional development in 
        research-based early literacy was made accessible and used by 
        early childhood education staff in the local area;
            ``(3) how early literacy activities were coordinated with 
        family literacy programs and activities; and
            ``(4) how each partner carried out the partner's respective 
        roles and responsibilities under the application.''; and
            (5) by amending section 2261 (as so redesignated) by adding 
        at the end the following:
            ``(3) Fiscal years 2002 to 2006.--There are authorized to 
        be appropriated to carry out this part--
                    ``(A) $500,000,000 for fiscal year 2002;
                    ``(B) $600,000,000 for fiscal year 2003;
                    ``(C) $700,000,000 for fiscal year 2004;
                    ``(D) $850,000,000 for fiscal year 2005; and
                    ``(E) $1,000,000,000 for fiscal year 2006.''.

SEC. 3412. TECHNICAL AMENDMENTS.

    The Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 
et seq.) is amended--
            (1) in section 1202(c)(1), by striking ``section 
        2260(b)(3)'' and inserting ``section 2261(b)(3)'';
            (2) in section 2257, by striking ``section 2260(b)(1)'' and 
        inserting ``section 2261(b)(1)''; and
            (3) in section 2258, by striking ``2260(b)(2)'' and 
        inserting ``section 2261(b)(2)''.

            CHAPTER 3--INCREASING THE AVAILABILITY OF BOOKS

SEC. 3421. SHORT TITLE.

    This chapter may be cited as the ``Book Stamp Act''.

SEC. 3422. FINDINGS.

    Congress finds the following:
            (1) Literacy is fundamental to all learning.
            (2) Between 40 and 60 percent of the Nation's children do 
        not read at grade level, particularly children in families and 
        school districts that are challenged by significant financial 
        or social instability.
            (3) Increased investments in child literacy are needed to 
        improve opportunities for children and the efficacy of the 
        Nation's education investments.
            (4) Increasing access to books in the home is an important 
        means of improving child literacy, which can be accomplished 
        nationally at modest cost.
            (5) Effective channels for book distribution already exist 
        through child care providers.

SEC. 3423. DEFINITIONS.

    In this chapter:
            (1) Early learning program.--The term ``early learning'', 
        used with respect to a program, means a program of activities 
        designed to facilitate development of cognitive, language, 
        motor, and social-emotional skills in children under age 6 as a 
        means of enabling the children to enter school ready to learn, 
        such as a Head Start or Early Head Start program carried out 
        under the Head Start Act (42 U.S.C. 9831 et seq.), or a State 
        pre-kindergarten program.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) State.--The term ``State'' means the 50 States, the 
        District of Columbia, the Commonwealth of Puerto Rico, Guam, 
        the United States Virgin Islands, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            (4) State agency.--The term ``State agency'' means an 
        agency designated under section 658D of the Child Care and 
        Development Block Grant Act of 1990 (42 U.S.C. 9858b).

SEC. 3424. GRANTS TO STATE AGENCIES.

    (a) Establishment of Program.--The Secretary shall establish and 
carry out a program to promote child literacy and improve children's 
access to books at home and in early learning and other child care 
programs, by making books available through early learning and other 
child care programs.
    (b) Grants.--
            (1) In general.--In carrying out the program, the Secretary 
        shall make grants to State agencies from allotments determined 
        under paragraph (2).
            (2) Allotments.--For each fiscal year, the Secretary shall 
        allot to each State an amount that bears the same ratio to the 
        total of the available funds for the fiscal year as the amount 
        the State receives under section 658O(b) of the Child Care and 
        Development Block Grant Act of 1990 (42 U.S.C. 9858m(b)) for 
        the fiscal year bears to the total amount received by all 
        States under that section for the fiscal year.
    (c) Applications.--To be eligible to receive an allotment under 
this section, a State shall submit an application to the Secretary at 
such time, in such manner, and containing such information as the 
Secretary may require.
    (d) Accountability.--The provisions of sections 658I(b) and 658K(b) 
of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
9858g(b), 9858i(b)) shall apply to States receiving grants under this 
chapter, except that references in those sections--
            (1) to a chapter shall be considered to be references to 
        this chapter; and
            (2) to a plan or application shall be considered to be 
        references to an application submitted under subsection (c).
    (e) Definition.--In this section, the term ``available funds'', 
used with respect to a fiscal year, means the total of--
            (1) the funds made available under section 416(c)(1) of 
        title 39, United States Code for the fiscal year; and
            (2) the amounts appropriated under section 3409 for the 
        fiscal year.

SEC. 3425. CONTRACTS TO CHILD CARE RESOURCE AND
              REFERRAL AGENCIES.

    A State agency that receives a grant under section 3404 shall use 
funds made available through the grant to enter into contracts with 
local child care resource and referral agencies to carry out the 
activities described in section 3406. The State agency may reserve not 
more than 3 percent of the funds made available through the grant to 
support a public awareness campaign relating to the activities.

SEC. 3426. USE OF FUNDS.

    (a) Activities.--
            (1) Book payments for eligible providers.--A child care 
        resource and referral agency that receives a contract under 
        section 3405 shall use the funds made available through the 
        grant to provide payments for eligible early learning program 
        and other child care providers, on the basis of local needs, to 
        enable the providers to make books available, to promote child 
        literacy and improve children's access to books at home and in 
        early learning and other child care programs.
            (2) Eligible providers.--To be eligible to receive a 
        payment under paragraph (1), a provider shall--
                    (A)(i) be a center-based child care provider, a 
                group home child care provider, or a family child care 
                provider, described in section 658P(5)(A) of the Child 
                Care and Development Block Grant Act of 1990 (42 U.S.C. 
                9858n(5)(A)); or
                    (ii) be a Head Start agency designated under 
                section 641 of the Head Start Act (42 U.S.C. 9836), an 
                entity that receives assistance under section 645A of 
                such Act (42 U.S.C. 9840a) to carry out an Early Head 
                Start program or another provider of an early learning 
                program; and
                    (B) provide services in an area where children face 
                high risks of literacy difficulties, as defined by the 
                Secretary.
    (b) Responsibilities.--A child care resource and referral agency 
that receives a contract under section 3405 to provide payments to 
eligible providers shall--
            (1) consult with local individuals and organizations 
        concerned with early literacy (including parents and 
        organizations carrying out the Reach Out and Read, First Book, 
        and Reading Is Fundamental programs) regarding local book 
        distribution needs;
            (2) make reasonable efforts to learn public demographic and 
        other information about local families and child literacy 
        programs carried out by the eligible providers, as needed to 
        inform the agency's decisions as the agency carries out the 
        contract;
            (3) coordinate local orders of the books made available 
        under this chapter;
            (4) distribute, to each eligible provider that receives a 
        payment under this chapter, not fewer than 1 book every 6 
        months for each child served by the provider for more than 3 of 
        the preceding 6 months;
            (5) use not more than 5 percent of the funds made available 
        through the contract to provide training and technical 
        assistance to the eligible providers on the effective use of 
        books with young children at different stages of development; 
        and
            (6) be a training resource for eligible providers that want 
        to offer parent workshops on developing reading readiness.
    (c) Discounts.--
            (1) In general.--Federal funds made available under this 
        chapter for the purchase of books may only be used to purchase 
        books on the same terms as are customarily available in the 
        book industry to entities carrying out nonprofit bulk book 
        purchase and distribution programs.
            (2) Terms.--An entity offering books for purchase under 
        this chapter shall be presumed to have met the requirements of 
        paragraph (1), absent contrary evidence, if the terms include a 
        discount of 43 percent off the catalogue price of the books, 
        with no additional charge for shipping and handling of the 
        books.
    (d) Administration.--The child care resource and referral agency 
may not use more than 6 percent of the funds made available through the 
contract for administrative costs.

SEC. 3427. REPORT TO CONGRESS.

    Not later than 2 years of the date of enactment of this chapter, 
the Secretary shall prepare and submit to Congress a report on the 
implementation of the activities carried out under this chapter.

SEC. 3428. SPECIAL POSTAGE STAMPS FOR CHILD LITERACY.

    Chapter 4 of title 39, United States Code is amended by adding at 
the end the following:
``Sec. 416. Special postage stamps for child literacy
    ``(a) In order to afford the public a convenient way to contribute 
to funding for child literacy, the Postal Service shall establish a 
special rate of postage for first-class mail under this section. The 
stamps that bear the special rate of postage shall promote childhood 
literacy and shall, to the extent practicable, contain an image 
relating to a character in a children's book or cartoon.
    ``(b)(1) The rate of postage established under this section--
            ``(A) shall be equal to the regular first-class rate of 
        postage, plus a differential of not to exceed 25 percent;
            ``(B) shall be set by the Governors in accordance with such 
        procedures as the Governors shall by regulation prescribe (in 
        lieu of the procedures described in chapter 36); and
            ``(C) shall be offered as an alternative to the regular 
        first-class rate of postage.
    ``(2) The use of the special rate of postage established under this 
section shall be voluntary on the part of postal patrons.
    ``(c)(1) Of the amounts becoming available for child literacy 
pursuant to this section, the Postal Service shall pay 100 percent to 
the Department of Health and Human Services.
    ``(2) Payments made under this subsection to the Department shall 
be made under such arrangements as the Postal Service shall by mutual 
agreement with such Department establish in order to carry out the 
objectives of this section, except that, under those arrangements, 
payments to such agency shall be made at least twice a year.
    ``(3) In this section, the term `amounts becoming available for 
child literacy pursuant to this section' means--
            ``(A) the total amounts received by the Postal Service that 
        the Postal Service would not have received but for the 
        enactment of this section; reduced by
            ``(B) an amount sufficient to cover reasonable costs 
        incurred by the Postal Service in carrying out this section, 
        including costs attributable to the printing, sale, and 
        distribution of stamps under this section,
as determined by the Postal Service under regulations that the Postal 
Service shall prescribe.
    ``(d) It is the sense of Congress that nothing in this section 
should--
            ``(1) directly or indirectly cause a net decrease in total 
        funds received by the Department of Health and Human Services, 
        or any other agency of the Government (or any component or 
        program of the Government), below the level that would 
        otherwise have been received but for the enactment of this 
section; or
            ``(2) affect regular first-class rates of postage or any 
        other regular rates of postage.
    ``(e) Special postage stamps made available under this section 
shall be made available to the public beginning on such date as the 
Postal Service shall by regulation prescribe, but in no event later 
than 12 months after the date of enactment of this section.
    ``(f) The Postmaster General shall include in each report provided 
under section 2402, with respect to any period during any portion of 
which this section is in effect, information concerning the operation 
of this section, except that, at a minimum, each report shall include 
information on--
            ``(1) the total amounts described in subsection (c)(3)(A) 
        that were received by the Postal Service during the period 
        covered by such report; and
            ``(2) of the amounts described in paragraph (1), how much 
        (in the aggregate and by category) was required for the 
        purposes described in subsection (c)(3)(B).
    ``(g) This section shall cease to be effective at the end of the 2-
year period beginning on the date on which special postage stamps made 
available under this section are first made available to the public.''.

SEC. 3429. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this chapter 
$50,000,000 for each of fiscal years 2002 through 2006.

                  CHAPTER 4--INCREASED ACCOUNTABILITY

SEC. 3431. LOW ACHIEVING CHILDREN MEET HIGH STANDARDS.

    The Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 
et seq.) is amended in the heading for title I by striking 
``DISADVANTAGED'' and inserting ``LOW-ACHIEVING''.

SEC. 3432. PURPOSE AND INTENT.

    Section 1001 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6301) is amended to read as follows:

``SEC. 1001. FINDINGS; RECOGNITION OF NEED; STATEMENT OF PURPOSE.

    ``(a) Findings.--Congress finds the following:
            ``(1) Schools that enroll high concentrations of children 
        living in poverty face the greatest challenges, but effective 
        educational strategies based on scientifically based research 
        can succeed in educating children to high standards.
            ``(2) High-poverty schools are much more likely to be 
        identified as failing to meet State standards for satisfactory 
        progress. As a result, these schools are generally the most in 
        need of additional resources and technical assistance to build 
        the capacity of these schools to address the many needs of 
        their students.
            ``(3) The educational progress of children participating in 
        programs under this title is closely associated with their 
        being taught by a fully qualified staff, particularly in 
        schools with the highest concentrations of poverty, where 
        paraprofessionals, uncertified teachers, and teachers teaching 
        out of field frequently provide instructional services.
            ``(4) States, local educational agencies, and schools 
        should be held accountable for improving student achievement, 
        while being given appropriate flexibility.
            ``(5) Programs funded under this title must demonstrate 
        increased effectiveness in improving schools in order to ensure 
        all children achieve to high standards.
    ``(b) Recognition of Need.--The Congress recognizes the following:
            ``(1) Educational needs are particularly great for low-
        achieving children in our Nation's highest-poverty schools, 
        children with limited English proficiency, children of migrant 
        workers, children with disabilities, Indian children, children 
        who are neglected or delinquent, and young children and their 
        parents who are in need of family literacy services.
            ``(2) Despite decades of education reform efforts, a 
        sizable achievement gap remains between minority and 
        nonminority students, and between disadvantaged students and 
        their more advantaged peers.
            ``(3) States, local educational agencies and schools should 
        be held accountable for improving the academic achievement of 
        all students, and for identifying and turning around low-
        performing schools.
            ``(4) Federal education assistance is intended not only to 
        increase pupil achievement overall, but also more specifically 
        and importantly, to help ensure that all pupils, especially the 
        disadvantaged, meet challenging standards for curriculum 
        content and pupil performance. It can only be determined if 
        schools, local educational agencies, and States, are reaching 
        this goal if pupil achievement results are disaggregated by at-
        risk categories.
    ``(c) Purpose and Intent.--The purpose and intent of this title are 
to ensure that all children have a fair and equal opportunity to obtain 
a high quality education.

SEC. 3433. AUTHORIZATION OF APPROPRIATIONS.

    (a) Additional Assistance.--Subsection (f) of section 1002 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6302(f)) is 
amended to read as follows:
    ``(f) School Improvement.--Each State may reserve for the purpose 
of carrying out its duties under section 1116 and 1117, the greater of 
one-half of 1 percent of the amount allocated under this part, or 
$200,000.''.
    (b) Federal Activities.--Subsection (g) of section 1002 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6302(g)) is 
amended by striking ``1995'' each place it appears and inserting 
``2002''.
    (c) State Administration.--Section 1002 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6302) is amended by adding 
at the end the following:
    ``(h) State Administration.--
            ``(1) State reservation.--Each State may reserve, from the 
        grants it receives under parts A, C, and D, of this title, an 
        amount equal to the greater of--
                    ``(A) 1 percent of the amount it received under 
                parts A, C, and D; or
                    ``(B) $400,000 ($50,000 for each outlying area), to 
                carry out administrative duties assigned under parts A, 
                C, and D.
            ``(2) Special rule.--The amount reserved by each State 
        under this subsection may not exceed the amount of State funds 
        expended by the State educational agency to administer 
        elementary and secondary education programs in such State.
    ``(i) Assistance for Local School Improvement.--
            ``(1) Program authorized.--The Secretary shall award grants 
        to States to provide subgrants to local educational agencies 
        for the purpose of providing assistance for school improvement 
        consistent with section 1116. Such grants shall be allocated 
        among States, the Bureau of Indian Affairs, and the outlying 
        areas, in the same proportion to the grants received by each 
        State, the Bureau of Indian Affairs, and the outlying areas for 
        the fiscal year under parts A, C, and D of this title. The 
        Secretary shall expeditiously allocate a portion of such funds 
        to States for the purpose of assisting local educational 
        agencies and schools that were in school improvement status on 
        the date preceding the date of enactment of the Leave No Child 
        Behind Act of 2001.
            ``(2) Reallocations.--If a State does not apply for funds 
        under this subsection, the Secretary shall reallocate such 
        funds to other States in the same proportion that funds are 
        allocated under paragraph (1).
            ``(3) State applications.--Each State educational agency 
        that desires to receive funds under this subsection shall 
        submit an application to the Secretary at such time, and 
        containing such information as the Secretary shall reasonably 
        require, except that such requirement shall be waived if a 
        State educational agency has submitted such information as part 
        of its State plan under this part. Each State plan shall 
        describe how such funds will be allocated to ensure that the 
        State educational agency and local educational agencies comply 
        with school improvement and corrective action requirements of 
        section 1116.
            ``(4) Local educational agency grants.--A grant to a local 
        educational agency under this subsection shall be--
                    ``(A) of sufficient size and scope to support the 
                activities required under sections 1116 and 1117, but 
                not less than $50,000 and not more than $500,000 to 
                each participating school;
                    ``(B) integrated with other funds under this Act; 
                and
                    ``(C) renewable for 2 additional 1-year periods if 
                schools are making yearly progress consistent with 
                State and local educational agency plans developed 
                under section 1116.
            ``(5) Priority.--The State, in awarding such grants, shall 
        give priority to local educational agencies with the lowest 
        achieving schools, that demonstrate the greatest need for such 
        funds, and that demonstrate the strongest commitment to making 
sure such funds are used to provide adequate resources to enable such 
schools to meet the yearly progress goals under State and local school 
improvement and corrective action plans under section 1116.
            ``(6) Administrative costs.--A State educational agency 
        that receives a grant award under this subsection may reserve 
        not more than 5 percent of such award for administration, 
        evaluation, and technical assistance expenses.
            ``(7) Local awards.--Each local educational agency that 
        applies for assistance under this subsection shall describe how 
        it will provide the lowest achieving schools the resources 
        necessary to meet yearly progress goals under State and local 
        school improvement and corrective action plans under section 
        1116.
            ``(8) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        $250,000,000 for fiscal year 2002, $300,000,000 for fiscal year 
        2003, $350,000,000 for fiscal year 2004, $400,000,000 for 
        fiscal year 2005, and $450,000,000 for fiscal year 2006.''.

SEC. 3434. RESERVATION AND ALLOCATION.

    Section 1003 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6303) is repealed.

SEC. 3435. STATE PLANS.

    Section 1111 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6311) is amended to read as follows:

``SEC. 1111. STATE PLANS.

    ``(a) Plans Required.--
            ``(1) In general.--Any State desiring to receive a grant 
        under this part shall submit to the Secretary a plan, developed 
        in consultation with local educational agencies, teachers, 
        pupil services personnel, administrators (including 
        administrators of programs described in other parts of this 
        title), other staff, and parents, that satisfies the 
        requirements of this section and that is coordinated with other 
        programs under this Act, the Individuals with Disabilities 
        Education Act, the Carl D. Perkins Vocational and Technical 
        Education Act of 1998, and the Head Start Act.
            ``(2) Consolidated plan.--A State plan submitted under 
        paragraph (1) may be submitted as part of a consolidated plan 
        under section 10202.
    ``(b) Standards, Assessments, and Accountability.--
            ``(1) Challenging standards.--(A) Each State plan shall 
        demonstrate that the State has adopted and implemented 
        challenging content standards and challenging student 
        performance standards that will be used by the State, its local 
        educational agencies, and its schools to carry out this part, 
        except that a State shall not be required to submit such 
        standards to the Secretary.
            ``(B) The standards required by subparagraph (A) shall be 
        the same standards that the State applies to all schools and 
        children in the State.
            ``(C) The State shall have such standards for elementary 
        school and secondary school children served under this part in 
        subjects determined by the State, but including at least 
        mathematics, reading or language arts, and science, which shall 
        include the same knowledge, skills, and levels of performance 
        expected of all children.
            ``(D) Standards under this paragraph shall include--
                    ``(i) challenging content standards in academic 
                subjects that--
                            ``(I) specify what children are expected to 
                        know and be able to do;
                            ``(II) contain coherent and rigorous 
                        content; and
                            ``(III) encourage the teaching of advanced 
                        skills; and
                    ``(ii) challenging student performance standards 
                that--
                            ``(I) are aligned with the State's content 
                        standards;
                            ``(II) describe 2 levels of high 
                        performance, proficient and advanced, that 
                        determine how well children are mastering the 
                        material in the State content standards; and
                            ``(III) describe a third level of 
                        performance, basic, to provide complete 
                        information about the progress of the lower 
                        performing children toward achieving to the 
                        proficient and advanced levels of performance.
            ``(E) For the subjects in which students will be served 
        under this part, but for which a State is not required by 
        subparagraphs (A), (B), and (C) to develop, and has not 
        otherwise developed such standards, the State plan shall 
        describe a strategy for ensuring that such students are taught 
        the same knowledge and skills and held to the same expectations 
        as are all children.
            ``(2) Adequate yearly progress.--
                    ``(A) In general.--Each State plan shall 
                demonstrate, based on assessments described under 
                paragraph (4), what constitutes adequate yearly 
                progress of--
                            ``(i) any school served under this part 
                        toward enabling all children to meet the 
                        State's challenging student performance 
                        standards;
                            ``(ii) any local educational agency that 
                        received funds under this part toward enabling 
                        all children in schools receiving assistance 
                        under this part to meet the State's challenging 
                        student performance standards; and
                            ``(iii) the State in enabling all children 
                        in schools receiving assistance under this part 
                        to meet the State's challenging student 
                        performance standards.
                    ``(B) Definition.--Adequate yearly progress shall 
                be defined in a manner that--
                            ``(i) applies the same high standards of 
                        academic performance to all students in the 
                        State;
                            ``(ii) takes into account the progress of 
                        all students in the State and in each local 
                        educational agency and school served under 
                        section 1114 or 1115;
                            ``(iii) uses the State challenging content 
                        and challenging student performance standards 
                        and assessments described in paragraphs (1) and 
                        (4);
                            ``(iv) compares separately, within each 
                        State, local educational agency, and school, 
                        the performance and progress of students by 
                        gender, each major ethnic and racial group, by 
                        English proficiency status, by migrant status, 
                        by students with disabilities as compared to 
                        nondisabled students, and by economically 
                        disadvantaged students as compared to students 
                        who are not economically disadvantaged (except 
                        that such disaggregation shall not be required 
                        in a case in which the number of students in a 
                        category is insufficient to yield statistically 
                        reliable information or the results would 
                        reveal individually identifiable information 
                        about an individual student);
                            ``(v) compares the proportions of students 
                        at the `basic', `proficient', and `advanced' 
                        levels of performance with the proportions of 
                        students at each of the 3 levels in the same 
                        grade in the previous school year;
                            ``(vi) includes annual numerical goals for 
                        improving the performance of all groups 
                        specified in clause (iv) and narrowing gaps in 
                        performance between these groups; and
                            ``(vii) includes a timeline for ensuring 
                        that each group of students described in clause 
                        (iv) meets or exceeds the State's proficient 
                        level of performance on each State assessment 
                        used for the purposes of section 1111 and 
                        section 1116 not later than 10 years after the 
                        date of enactment of the Leave No Child Behind 
                        Act of 2001; and
                            ``(viii) at the State's discretion, may 
                        also include other academic measures such as 
                        promotion, completion of college preparatory 
                        courses, and high school completion, except 
                        that inclusion of such other measures may not 
                        change which schools or local educational 
                        agencies would otherwise be subject to 
                        improvement or corrective action under section 
                        1116 if the discretionary indicators were not 
                        included.
                    ``(C) Annual improvement for states.--For a State 
                to make adequate yearly progress under subparagraph 
                (A)(iii), not less than 90 percent of the local 
                educational agencies within its jurisdiction shall meet 
                the State's criteria for adequate yearly progress.
                    ``(D) Annual improvement for local educational 
                agencies.--For a local educational agency to make 
                adequate yearly progress under subparagraph (A)(ii), 
                not less than 90 percent of the schools within its 
                jurisdiction must meet the State's criteria for 
                adequate yearly progress.
                    ``(E) Annual improvement for schools.--For a school 
                to make adequate yearly progress under subparagraph 
                (A)(i), not less than 90 percent of each group of 
                students described in subparagraph (B)(iv) who are 
                enrolled in such school are required to take the 
                assessments consistent with section 612(a)(17)(A) of 
                the Individuals with Disabilities Education Act and 
                paragraph (4)(F)(iii) on which adequate yearly progress 
                is based. The requirement of this subparagraph must be 
                met for such assessments to be used to determine 
                whether a school is making adequate yearly progress.
                    ``(F) Public notice and comment.--Each State shall 
                ensure that in developing its plan for adequate yearly 
                progress, it diligently seeks public comment from a 
                range of institutions and individuals in the State with 
                an interest in improved student achievement and that 
                the State makes and will continue to make a substantial 
                effort to ensure that information under this part is 
                widely known and understood by the public, parents, 
                teachers, and school administrators throughout the 
                State. Such efforts shall include, at a minimum, 
                publication of such information and explanatory text, 
                broadly to the public through such means as the 
                Internet, the media, and public agencies.
                    ``(G) Review.--The Secretary shall review the 
                information from States on the adequate yearly progress 
                of schools and local educational agencies required 
                under subparagraphs (A) and (B) for the purpose of 
                determining State and local compliance with section 
                1116.
                    ``(H) Revision.--The Secretary shall require States 
                to revise their definition of adequate yearly progress, 
                consistent with the requirements of this paragraph. 
                Such revisions shall be submitted to the Secretary for 
                approval not later than 1 year after the date of 
                enactment of the Leave No Child Behind Act of 2001.
            ``(3) State authority.--If a State educational agency 
        provides evidence that is satisfactory to the Secretary that 
        neither the State educational agency nor any other State 
        government official, agency, or entity has sufficient 
        authority, under State law, to adopt curriculum content and 
        student performance standards, and assessments aligned with 
        such standards, that will be applicable to all students 
        enrolled in the State's public schools, then the State 
        educational agency may meet the requirements of this subsection 
        by--
                    ``(A) adopting standards and assessments that meet 
                the requirements of this subsection, on a statewide 
                basis, limiting their applicability to students served 
                under this part; or
                    ``(B) adopting and implementing policies that 
                ensure that each local educational agency in the State 
                that receives grants under this part will adopt 
                curriculum content and student performance standards, 
                and assessments aligned with such standards, that meet 
                all of the criteria in this subsection and any 
                regulations regarding such standards and assessments 
                that the Secretary may publish, and that are applicable 
                to all students served by each such local educational 
                agency.
            ``(4) Assessments.--Each State plan shall demonstrate that 
        the State has implemented and is administering a set of high-
        quality, yearly student assessments that include, at a minimum, 
        assessments in mathematics, reading or language arts, and 
        science as the primary means of determining the yearly 
        performance of each local educational agency and school served 
        under this title in enabling all children served under this 
        part to meet the State's challenging student performance 
        standards. Such assessments shall--
                    ``(A) be the same assessments used to measure the 
                performance of all children, if the State measures the 
                performance of all children;
                    ``(B) be criterion referenced and aligned with the 
                State's challenging content and student performance 
                standards and provide coherent information about 
                student attainment of such standards;
                    ``(C) be used for purposes for which such 
                assessments are valid and reliable, and be consistent 
                with relevant, nationally recognized professional and 
                technical standards for such assessments;
                    ``(D) measure the proficiency of students in the 
                academic subjects in which a State has adopted 
                challenging content and student performance standards 
                and be administered not less than one or more times 
                during--
                            ``(i) grades 3 through 5;
                            ``(ii) grades 6 through 9; and
                            ``(iii) grades 10 through 12;
                    ``(E) involve multiple up-to-date measures of 
                student performance, including measures that assess 
                higher order thinking skills and understanding;
                    ``(F) provide for--
                            ``(i) the participation in such assessments 
                        of all students;
                            ``(ii) the reasonable adaptations and 
                        accommodations for students with disabilities 
                        defined under 602(3) of the Individuals with 
                        Disabilities Education Act necessary to measure 
                        the achievement of such students relative to 
                        State content and State student performance 
                        standards; and
                            ``(iii) the inclusion of limited English 
                        proficient students who shall be assessed, to 
                        the extent practicable, in the language and 
                        form most likely to yield accurate and reliable 
                        information on such students' knowledge of, and 
                        skills in, the subject area being assessed;
                    ``(G) include students who have attended schools in 
                a local educational agency for a full academic year but 
                have not attended a single school for a full academic 
                year, except that the performance of students who have 
                attended more than 1 school in the local educational 
                agency in any academic year shall be used only in 
                determining the progress of the local educational 
                agency;
                    ``(H) provide individual student reports, which 
                include assessment scores, or other information on the 
                attainment of student performance standards; and
                    ``(I) enable results to be disaggregated within 
                each State, local educational agency, and school by 
                gender, by each major racial and ethnic group, by 
                English proficiency status, by migrant status, by 
                students with disabilities as compared to nondisabled 
                students, and by economically disadvantaged students as 
                compared to students who are not economically 
                disadvantaged.
            ``(5) Special rule.--
                    ``(A) In general.--Assessment measures that do not 
                meet the requirements of paragraph (4)(C) may be 
                included as one of the multiple measures, if a State 
                includes in the State plan information regarding the 
                State's efforts to validate such measures.
                    ``(B) Student literacy skills.--States may measure 
                the literacy skills of students 1 or more times during 
                kindergarten through grade 2. Such measurement shall 
                serve only as a diagnostic tool, with its sole purpose 
                being the improvement of reading instruction.
            ``(6) Language assessments.--Each State plan shall identify 
        the languages other than English that are present in the 
        participating student population and indicate the languages for 
        which yearly student assessments are not available and are 
        needed. The State shall make every effort to develop such 
        assessments and may request assistance from the Secretary if 
        linguistically accessible assessment measures are needed. Upon 
        request, the Secretary shall assist with the identification of 
        appropriate assessment measures in the needed languages, but 
        shall not mandate a specific assessment or mode of instruction.
            ``(7) Requirement.--Each State plan shall describe--
                    ``(A) how the State educational agency will ensure 
                that each local educational agency and school affected 
                by the State plan to develop the capacity to comply 
                with each of the requirements of sections 
                1112(c)(1)(D), 1114(c), and 1115(c) that is applicable 
to such agency or school;
                    ``(B) what specific steps the State educational 
                agency will take to assist, and provide resources to, 
                schools and local educational agencies that receive 
                funds under this part to ensure that all students 
                enrolled in such schools and local educational agencies 
                reach, at a minimum, the proficient level of 
                performance;
                    ``(C) the actions the State will take to ensure 
                that critical education services and resources are 
                available in local educational agencies that receive 
                funds under this part to the extent that such services 
                are available in local educational agencies that do not 
                receive funds under this part;
                    ``(D) whether services in local educational 
                agencies that receive funds under this part are of 
                comparable quality to the services in local educational 
                agencies that do not receive funds under this part;
                    ``(E) at a minimum--
                            ``(i) how the State will ensure, not later 
                        than December 1, 2004, that students from 
                        families with incomes below the poverty line 
                        and minority students receive instruction from 
                        fully qualified teachers at the same rate as 
                        other students;
                            ``(ii) how the State will ensure, not later 
                        than December 1, 2004, that students from 
                        families with incomes below the poverty line 
                        and minority students have the same access to 
                        challenging curricula and rigorous courses, 
                        including advance placement courses, as do 
                        other students;
                            ``(iii) how the State will ensure, not 
                        later than December 1, 2004, that the quality 
                        and availability of instructional materials and 
                        instructional resources including technology in 
                        local educational agencies receiving funds 
                        under this part, is comparable to such quality 
                        and availability in local educational agencies 
                        not receiving funds under this part; and
                    ``(F) the measures that the State educational 
                agency will use annually to measure and publicly report 
                progress regarding subparagraph (E).
            ``(8) Exclusion from assessments.--
                    ``(A) In general.--Local educational agencies 
                receiving funds under this part shall compile 
                information and report, by individual school, on 
                students who do not participate in assessments required 
                under paragraph (4). Such report, which shall be 
                distributed widely to the public, shall include--
                            ``(i) a list of each reason that students 
                        did not participate in any such assessment; and
                            ``(ii) the number from each group of 
                        students described in paragraph (2)(B)(iv) who 
                        did not participate on any such assessment for 
                        each reason.
                    ``(B) Protection.--Reports required under 
                subparagraph (A) shall not report information in a case 
                in which it would reveal individually identifiable 
                information.
    ``(c) Other Provisions To Support Teaching and Learning.--Each 
State plan shall contain assurances that--
            ``(1) the State educational agency will work with other 
        agencies, including educational service agencies or other local 
        consortia, and institutions to provide technical assistance to 
        local educational agencies and schools to carry out the State 
        educational agency's responsibilities under this part, 
        including technical assistance in providing professional 
        development under section 1119 and technical assistance under 
        section 1117; and
            ``(2)(A) where educational service agencies exist, the 
        State educational agency will consider providing professional 
        development and technical assistance through such agencies; and
            ``(B) where educational service agencies do not exist, the 
        State educational agency will consider providing professional 
        development and technical assistance through other cooperative 
        agreements such as through a consortium of local educational 
        agencies;
            ``(3) the State educational agency will notify local 
        educational agencies and the public of the content and student 
        performance standards and assessments developed under this 
        section, and of the authority to operate schoolwide programs, 
        and will fulfill the State educational agency's 
        responsibilities regarding local educational agency improvement 
        and school improvement under section 1116, including such 
        corrective actions as are necessary;
            ``(4) the State educational agency will provide the least 
        restrictive and burdensome regulations for local educational 
        agencies and individual schools participating in a program 
        assisted under this part;
            ``(5) if applicable, the State educational agency will 
        inform the Secretary and the public of how and which Federal 
        laws hinder the ability of States--
                    ``(A) to improve overall student achievement; and
                    ``(B) to close achievement gaps between groups of 
                students described in subsection (b)(2)(B)(iv);
            ``(6) the State educational agency will encourage schools 
        to consolidate funds from other Federal, State, and local 
        sources for schoolwide reform in schoolwide programs under 
        section 1114;
            ``(7) the State educational agency will modify or eliminate 
        State fiscal and accounting barriers so that schools can easily 
        consolidate funds from other Federal, State, and local sources 
        for schoolwide programs under section 1114;
            ``(8) the State educational agency has involved the 
        committee of practitioners established under section 1603(b) in 
        developing the plan and monitoring its implementation; and
            ``(9) the State educational agency will inform local 
        educational agencies of the local educational agency's 
authority to seek waivers under title X and, if the State is an Ed-Flex 
Partnership State, waivers under the Education Flexibility Partnership 
Act of 1999 (30 U.S.C. 589a et seq.).
    ``(d) Peer Review and Secretarial Approval.--
            ``(1) Secretarial duties.--The Secretary shall--
                    ``(A) establish a peer review process to assist in 
                the review of State plans;
                    ``(B) approve a State plan after its submission 
                unless the Secretary determines that the plan does not 
                meet the requirements of this section;
                    ``(C) if the Secretary determines that the State 
                plan does not meet the requirements of subsection (a), 
                (b), or (c), immediately notify the State of such 
                determination and the reasons for such determination;
                    ``(D) not decline to approve a State's plan 
                before--
                            ``(i) offering the State an opportunity to 
                        revise its plan;
                            ``(ii) providing technical assistance in 
                        order to assist the State to meet the 
                        requirements under subsections (a), (b), and 
                        (c); and
                            ``(iii) providing a hearing;
                    ``(E) have the authority to disapprove a State plan 
                for not meeting the requirements of this part, but 
                shall not have the authority to require a State, as a 
                condition of approval of the State plan, to include in, 
                or delete from, such plan one or more specific elements 
                of the State's content standards or to use specific 
                assessment instruments or items; and
            ``(2) State revisions.--States shall revise their plans if 
        necessary to satisfy the requirements of this section. Revised 
        plans shall be submitted to the Secretary for approval not 
        later than 1 year after the date of enactment of the Leave No 
        Child Behind Act of 2001.
    ``(e) Duration of the Plan.--
            ``(1) In general.--Each State plan shall--
                    ``(A) be submitted for the first year for which 
                this part is in effect after the date of enactment of 
                the Leave No Child Behind Act of 2001;
                    ``(B) remain in effect for the duration of the 
                State's participation under this part; and
                    ``(C) be periodically reviewed and revised by the 
                State, as necessary, to reflect changes in the State's 
                strategies and programs under this part.
            ``(2) Additional information.--If the State makes 
        significant changes in its plan, such as the adoption of new 
        State content standards and State student performance 
        standards, new assessments, or a new definition of adequate 
        yearly progress, the State shall submit such information to the 
        Secretary.
    ``(f) Limitation on Conditions.--Nothing in this part shall be 
construed to authorize an officer or employee of the Federal Government 
to mandate, direct, or control a State, local educational agency, or 
school's specific instructional content or student performance 
standards and assessments, curriculum, or program of instruction, as a 
condition of eligibility to receive funds under this part.
    ``(g) Penalties.--
            ``(1) In general.--If a State fails to demonstrate that it 
        has in place challenging content standards and student 
        performance standards and assessments, and a system for 
        measuring and monitoring adequate yearly progress which 
        includes the disaggregation of data by groups, as described in 
        subsection (b)(2)(B)(iv), the State shall be ineligible to 
        receive any administrative funds under section 1002(h) that 
        exceed the amount received by the State for such purpose in the 
        previous year.
            ``(2) Additional funds.--Based on the extent to which the 
        requirements of paragraph (1) are not met, additional 
        administrative funds shall be withheld in such amount as the 
        Secretary determines appropriate, except that for each 
        additional year that the State fails to comply with such 
        requirements, the Secretary shall withhold not less than one-
        fifth of the amount the State receives for administrative 
        expenses under section 1002(h).
            ``(3) Waiver.--Notwithstanding title X of this Act and the 
        Education Flexibility Partnership Act of 1999 or any other 
        provision of law, a waiver shall not be granted except that a 
        State may request a 1-time, 1-year waiver to meet the 
        requirements of this section.
    ``(h) School Report Cards; Parental Information.--
            ``(1) In general.--
                    ``(A) Annual report cards.--Not later than the 
                beginning of the 2002-2003 school year, a State that 
                receives assistance under this Act shall prepare and 
                publicly disseminate an annual report card on all 
                schools that receive funds under this part. States and 
                local educational agencies may issue report cards under 
                this section only for local educational agencies and 
                schools receiving funds under this part, except that if 
                a State or local educational agency issues a report 
                card for all students, the State or local educational 
                agency may include the information under this section 
                as part of such report card.
                    ``(B) Implementation.--The State shall ensure the 
                dissemination of this information at all levels. Such 
                information shall be--
                            ``(i) concise; and
                            ``(ii) presented in a format and manner, 
                        and to the extent practicable, in a language 
                        that parents can understand.
            ``(2) Content of annual state report cards.--
                    ``(A) Required information.--The State shall, at a 
                minimum, include in the annual State report cards 
                information for the State on each local educational 
                agency and school regarding--
                            ``(i) student performance on statewide 
                        assessments for the current and preceding years 
                        in at least mathematics, reading or language 
                        arts, and science, including--
                                    ``(I) a comparison of the 
                                proportions of students who performed 
                                at `basic', `proficient', and 
                                `advanced' levels in each subject area, 
                                for each grade level at which 
                                assessments are required under this 
                                part, with proportions in each of the 
                                same 3 categories at the same grade 
                                levels in the previous school year; and
                                    ``(II) a statement of the 
                                percentage of students not tested and a 
                                listing of categories of the reasons 
                                why they were not tested;
                            ``(ii) retention in grade, completion of 
                        advanced placement courses, and 4-year 
                        graduation rates;
                            ``(iii) the professional qualifications of 
                        teachers in the aggregate, including the 
                        percentage of course sections in core academic 
                        subjects taught by teachers with emergency or 
                        provisional credentials, and the percentage of 
                        class sections not taught by fully qualified 
                        teachers; and
                            ``(iv) the professional qualifications of 
                        paraprofessionals, the number of 
                        paraprofessionals in the aggregate and the 
                        ratio of paraprofessionals to teachers in the 
                        classroom.
                    ``(B) Student data.--Student data in each report 
                card shall contain disaggregated results for the 
                following categories:
                            ``(i) Gender.
                            ``(ii) Racial and ethnic group.
                            ``(iii) Migrant status.
                            ``(iv) Students with disabilities, as 
                        compared to students who are not disabled.
                            ``(v) Economically disadvantaged students, 
                        as compared to students who are not 
                        economically disadvantaged.
                            ``(vi) Students with limited English 
                        proficiency, as compared to students who are 
                        proficient in English.
                    ``(C) Optional information.--A State may include in 
                its report card any other information it determines 
                appropriate to reflect school quality and school 
                achievement, including information on average class 
                size by grade level, and information on school safety, 
                such as the incidence of school violence and drug and 
                alcohol abuse, and the incidence of student suspensions 
                and expulsions.
            ``(3) Content of local educational agencies reports.--
                    ``(A) Minimum requirements.--The State shall ensure 
                that each local educational agency collects appropriate 
                data and publishes and publicly disseminates an annual 
                report card for each of its schools that includes, at a 
                minimum--
                            ``(i) the information described in 
                        paragraphs (2)(A) and (2)(B) for each local 
                        educational agency and school and--
                                    ``(I) in the case of a local 
                                educational agency--
                                            ``(aa) the number and 
                                        percentage of schools 
                                        identified for school 
                                        improvement, including schools 
                                        identified under section 
                                        1116(b) of this Act;
                                            ``(bb) information that 
                                        shows how students in its 
                                        schools perform on the 
                                        statewide assessment compared 
                                        to students in the State as a 
                                        whole; and
                                    ``(II) in the case of a school--
                                            ``(aa) whether it has been 
                                        identified for school 
                                        improvement; and
                                            ``(bb) information that 
                                        shows how its students 
                                        performed on the statewide 
                                        assessment compared to students 
                                        in the local educational agency 
                                        and the State as a whole.
                    ``(B) Other information.--A local educational 
                agency may include in its annual report card any other 
                appropriate information regardless of whether such 
                information is included in the annual State report 
                card.
            ``(4) Dissemination and accessibility of reports.--
                    ``(A) State report cards.--State annual report 
                cards under paragraph (2) shall be disseminated to all 
                schools and local educational agencies in the State, 
                and made broadly available to the public through means 
                such as posting on the Internet, distribution to the 
                media, and distribution through public agencies.
                    ``(B) Local educational agency reports.--Local 
                educational agency report cards under paragraph (3) 
                shall be disseminated to all schools in the school 
                district and to all parents of students attending these 
                schools and made broadly available to the public 
                through means such as posting on the Internet, 
                distribution to the media, and distribution through 
                public agencies.
            ``(5) Parent's right-to-know.--
                    ``(A) Qualifications.--A local educational agency 
                that receives funds under this part shall provide, upon 
                request, in an understandable and uniform format, to 
                any parent of a student attending any school receiving 
                funds under this part, information regarding the 
                professional qualifications of the student's classroom 
                teachers, including, at a minimum, the following:
                            ``(i) Whether the teacher has met State 
                        qualification and licensing criteria for the 
                        grade levels and subject areas in which the 
                        teacher provides instruction.
                            ``(ii) Whether the teacher is teaching 
                        under emergency or other provisional status 
                        through which State qualification or licensing 
                        criteria have been waived.
                            ``(iii) The baccalaureate degree major of 
                        the teacher and any other graduate 
                        certification or degree held by the teacher, 
                        and the field of discipline of the 
                        certification or degree.
                            ``(iv) Whether the child is provided 
                        services by paraprofessionals and the 
                        qualifications of such paraprofessional.
                    ``(B) Additional information.--In addition to the 
                information that parents may request under subparagraph 
                (A), and the information provided in subsection (c), a 
                school that receives funds under this part shall 
                provide to each individual parent or guardian--
                            ``(i) information on the level of 
                        performance of the individual student for whom 
                        they are the parent or guardian in each of the 
                        State assessments as required under this part; 
                        and
                            ``(ii) timely notice that the student for 
                        whom they are the parent or guardian has been 
                        assigned or has been taught for 2 or more 
                        consecutive weeks by a substitute teacher or by 
                        a teacher not fully qualified.
                    ``(C) Notification.--A local educational agency 
                shall notify parents of students attending any school 
                receiving funds under this part, on an annual basis, of 
                their ability to request information under this 
                paragraph and initially not later than 1 year after the 
                date of enactment of the Leave No Child Behind Act of 
                2001. A local educational agency shall provide such 
                notification to parents in a format, and to the extent 
                practicable, in a language they can understand.
            ``(6) Plan content.--A State shall include in its plan 
        under subsection (b) an assurance that it has in effect a 
        policy that meets the requirements of this section.
    ``(i) Privacy.--Information collected under this section shall be 
collected and disseminated in a manner that protects the privacy of 
individuals.
    ``(j) Special Rule on Science Standards and Assessments.--
Notwithstanding subsections (b) and (h), no State shall be required to 
meet the requirements under this title relating to science standards or 
assessments until the beginning of the 2006-2007 school year.''.

SEC. 3436. LOCAL EDUCATIONAL AGENCY PLANS.

    (a) Plans Required.--Subsection (a) of section 1112 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6312(a)) is 
amended--
            (1) in paragraph (1), by striking ``the Goals 2000: Educate 
        America Act'' and all that follows and inserting the following: 
        ``the Individuals with Disabilities Education Act, the Carl D. 
        Perkins Vocational and Technical Education Act of 1998, the 
        Head Start Act, and other Acts, as appropriate.''; and
            (2) in paragraph (2), by striking ``14304'' and inserting 
        ``10204''.
    (b) Plan Provisions.--Subsection (b) of section 1112 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6312(b)) is 
amended--
            (1) by striking ``Each'' in the matter preceding paragraph 
        (1) and inserting ``In order to help low-achieving children 
        achieve to high standards, each'';
            (2) in paragraph (1)--
                    (A) by striking ``part'' each place it appears and 
                inserting ``title'';
                    (B) in subparagraph (B), by inserting ``low-
                achieving'' before ``children'';
                    (C) by striking ``and'' at the end of subparagraph 
                (B);
                    (D) by inserting ``and'' at the end of subparagraph 
                (C); and
                    (E) by adding at the end the following new 
                subparagraph:
                    ``(D) determine the literacy levels of first 
                graders and their need for interventions, and a 
                description of how the local educational agency will 
                ensure that any such assessments--
                            ``(i) are developmentally appropriate; and
                            ``(ii) use multiple measures to provide 
                        information about the variety of skills that 
                        scientifically based research has identified as 
                        leading to early acquisition of reading 
                        skills.'';
            (3) in paragraph (4)(B), by striking ``under part C or who 
        were formerly eligible for services under part C in the two-
        year period preceding the date of enactment of the Improving 
        America's School Act of 1994, neglected or delinquent youth and 
        youth at risk of dropping out served under part D'' and 
        inserting ``under part C, neglected or delinquent youth, Indian 
        children served under title IX,'';
            (4) in paragraph (7), by striking ``eligible homeless 
        children'' and inserting ``homeless children'';
            (5) by striking the period at the end of paragraph (9) and 
        inserting ``; and''; and
            (6) by adding at the end the following new paragraphs:
            ``(10) a description of the actions the local educational 
        agency will take to assist its low-performing schools, 
        including schools identified for improvement under section 
        1116;
            ``(11) a description of how the agency will promote the use 
        of extended learning time, such as an extended school year and 
        before and after school and summer programs; and
            ``(12) a description of the activity established by the 
        local educational agency in accordance with section 
        1119(b)(1).''.
    (c) Assurances.--Subsection (c) of section 1112 of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6312(c)) is amended to 
read as follows:
    ``(c) Assurances.--
            ``(1) In general.--Each local educational agency plan shall 
        provide assurances that the local educational agency will--
                    ``(A) inform eligible schools and parents of 
                schoolwide project authority and the ability of such 
                schools to consolidate funds from Federal, State, and 
                local sources;
                    ``(B) provide technical assistance and support to 
                schoolwide programs;
                    ``(C) work in consultation with schools as the 
                schools develop the schools' plans pursuant to section 
                1114 and assist schools as the schools implement such 
                plans or undertake activities pursuant to section 1115 
                so that each school can make adequate yearly progress 
                toward meeting the State student performance standards;
                    ``(D) fulfill such agency's school improvement 
                responsibilities under section 1116, including taking 
                corrective actions under section 1116(b)(9);
                    ``(E) provide services to eligible children 
                attending private elementary and secondary schools in 
                accordance with section 1120, and timely and meaningful 
                consultation with private school officials regarding 
                such services;
                    ``(F) take into account the experience of model 
                programs for the educationally disadvantaged, and the 
                findings of relevant scientifically based research 
                indicating that services may be most effective if 
                focused on students in the earliest grades at schools 
                that receive funds under this part;
                    ``(G) in the case of a local educational agency 
                that chooses to use funds under this part to provide 
                early childhood development services to low-income 
                children below the age of compulsory school attendance, 
                ensure that such services comply with the performance 
                standards established under section 641A(a) of the Head 
                Start Act;
                    ``(H) inform eligible schools of the local 
                educational agency's authority to obtain waivers on the 
                school's behalf under title X of this Act, and if the 
                State is an Ed-Flex Partnership State, waivers under 
                the Education Flexibility Partnership Act of 1999;
                    ``(I) coordinate and collaborate, to the extent 
                feasible and necessary as determined by the local 
                educational agency, with other agencies providing 
                services to children, youth, and families; and
                    ``(J) ensure that by not later than December 1, 
                2004, students from families with incomes below the 
                poverty line and minority students are not taught by 
                teachers who are not fully qualified at a greater rate 
                than other students.
            ``(2) Special rule.--The Secretary--
                    ``(A) shall consult with the Secretary of Health 
                and Human Services on the implementation of 
                subparagraph (G) and shall establish procedures (taking 
                into consideration existing State and local laws, and 
                local teacher contracts) to assist local educational 
                agencies to comply with such subparagraph; and
                    ``(B) upon publication, shall disseminate to local 
                educational agencies the Head Start performance 
                standards as in effect under section 641A(a) of the 
                Head Start Act, and such agencies affected by 
                subparagraph (G) shall plan for the implementation of 
                such subparagraph (taking into consideration existing 
                State and local laws, and local teacher contracts), 
                including pursuing the availability of other Federal, 
                State, and local funding sources to assist in 
                compliance with such subparagraph.''.
    (d) Plan Development and Duration.--Section 1112 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6312) is 
amended by striking subsection (d) and inserting the following:
    ``(d) Plan Development and Duration.--
            ``(1) Consultation.--Each local educational agency plan 
        shall be developed in consultation with teachers, 
        administrators (including administrators of programs described 
        in other parts of this title), and other appropriate school 
        personnel, and with parents of children in schools served under 
        this part.
            ``(2) Duration.--Each such plan shall be submitted for the 
        first year for which this part is in effect following the date 
        of enactment of the Leave No Child Behind Act of 2001 and shall 
        remain in effect for the duration of the agency's participation 
        under this part.
            ``(3) Review.--Each such local educational agency shall 
        periodically review, and as necessary, revise its plan.''.
    (e) State Approval.--Section 1112 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6312(e)) is amended by striking 
subsection (e) and inserting the following:
    ``(e) State Approval.--
            ``(1) In general.--Each local educational agency plan shall 
        be filed according to a schedule established by the State 
        educational agency.
            ``(2) Approval.--The State educational agency shall approve 
        a local educational agency's plan only if the State educational 
        agency determines that the local educational agency's plan--
                    ``(A) will enable schools served under this part to 
                substantially help children served under this part meet 
                the standards expected of all children described in 
                section 1111(b)(1); and
                    ``(B) will meet the requirements of this 
                section.''.

SEC. 3437. TARGETED ASSISTANCE SCHOOLS.

    (a) Fully Qualified Teacher.--Subsection (c)(1)(F) of section 1115 
of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
6315(c)(1)(F)) is amended by striking ``highly qualified staff;'' and 
inserting ``fully qualified teachers as defined in section 
2812(4)(A);''.
    (b) Integration of Professional Development.--Subsection (d) of 
section 1115 of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6515(d)) is amended to read as follows:
    ``(d) Integration of Professional Development.--To promote the 
integration of staff supported with funds under this part, public 
school personnel who are paid with funds received under this part may 
participate in general professional development and school planning 
activities.''.

SEC. 3438. SCHOOL CHOICE.

    Subsection (b) of section 1115A of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6316(b)) is amended by striking 
paragraphs (7) through (10) and inserting the following:
            ``(7) parents of eligible students in the local educational 
        agency will be given prompt notice of the existence of the 
        public school choice program and its availability to them, and 
        a clear explanation of how the program will operate;
            ``(8) the program will include charter schools and any 
        other public school and shall not include a school that is or 
        has been identified as a school in school improvement or is or 
        has been in corrective action for the past 2 consecutive years;
            ``(9) transportation services or the costs of 
        transportation may be provided by the local educational agency 
        with funds under this part; and
            ``(10) such local educational agency will comply with the 
        other requirements of this part.''.

SEC. 3439. ASSESSMENT AND LOCAL EDUCATIONAL AGENCY AND SCHOOL 
              IMPROVEMENT.

    (a) Local Review.--Section 1116(a) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6317(a)) is amended--
            (1) in paragraph (2), by striking ``1111(b)(2)(A)(i)'' and 
        inserting ``1111(b)(2)(B)'';
            (2) in paragraph (3), by striking ``individual school 
        performance profiles'' and inserting ``school reports'';
            (3) in paragraph (3), by striking ``and'' after the 
        semicolon;
            (4) in paragraph (4), by striking the period at the end and 
        inserting ``; and''; and
            (5) by adding at the end the following:
            ``(5) review the effectiveness of the actions and 
        activities the schools are carrying out under this part with 
        respect to parental involvement assisted under this Act.''.
    (b) School Improvement.--Section 1116 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6317) is amended by striking 
subsections (b), (c), and (d) and by inserting after subsection (a) the 
following:
    ``(b) School Improvement.--
            ``(1) In general.--A local educational agency shall 
        identify for school improvement any school served under this 
        part that--
                    ``(A) for 2 consecutive years failed to make 
                adequate yearly progress as defined in the State's plan 
                under section 1111(b)(2); or
                    ``(B) was in school improvement status under this 
                section on the day preceding the date of enactment of 
                the Leave No Child Behind Act of 2001.
            ``(2) Transition.--The 2-year period described in paragraph 
        (1)(A) shall include any continuous period of time immediately 
        preceding the date of enactment of the Leave No Child Behind 
        Act of 2001 during which a school did not make adequate yearly 
        progress as defined in the State's plan, as such plan was in 
        effect on the day preceding the date of such enactment.
            ``(3) Targeted assistance schools.--To determine if a 
        school that is conducting a targeted assistance program under 
        section 1115 should be identified as in need of improvement 
        under this subsection, a local educational agency may choose to 
        review the progress of only those students in such school who 
        are served under this part.
            ``(4) Opportunity to review and present evidence.--
                    ``(A) In general.--Before identifying a school for 
                school improvement under paragraph (1), the local 
                educational agency shall provide the school with an 
                opportunity to review the school-level data, including 
                assessment data, on which the proposed identification 
                is based.
                    ``(B) Supporting evidence.--If the school principal 
                believes that the proposed identification is in error 
                for statistical or other substantive reasons, the 
                principal may provide supporting evidence to the local 
                educational agency, which such agency shall consider 
                before making a final determination.
            ``(5) Notification to parents.--A local educational agency 
        shall, in an easily understandable format, provide in writing 
        to parents of each student in a school identified for school 
        improvement--
                    ``(A) an explanation of what the school improvement 
                identification means and how the school compares in 
                terms of academic performance to other schools in the 
                local educational agency and State;
                    ``(B) the reasons for such identification;
                    ``(C) the data on which such identification is 
                based;
                    ``(D) an explanation of what the school is doing to 
                address the problem of low achievement;
                    ``(E) an explanation of how parents can become 
                involved in upgrading the quality of the school;
                    ``(F) an explanation of the right of parents, 
                pursuant to paragraph (6), to transfer their child to 
                another public school, including a public charter 
                school, that is not in school improvement, and how such 
                transfer shall operate; and
                    ``(G) notification to parents in a format and, to 
                the extent practicable, in a language they can 
                understand.
            ``(6) Public school choice option.--
                    ``(A) Schools identified for improvement.--After 
                the date of enactment of the Leave No Child Behind Act 
                of 2001, a local educational agency shall provide all 
                students enrolled in a school identified for school 
                improvement with an option to transfer to any other 
                public school within the local educational agency or 
                any public school consistent with subparagraph (C), 
                including a public charter school that has not been 
                identified for school improvement, unless such option 
                to transfer is prohibited by State law, or local law, 
                which includes school board-approved local educational 
                agency policy.
                    ``(B) Capacity.--If a local educational agency 
                described in subparagraph (A) demonstrates to the 
                satisfaction of the State educational agency that such 
                local educational agency lacks the capacity to provide 
                all students with the option to transfer described in 
                subparagraph (A), and after giving notice to the 
                parents of children affected that it is not possible, 
                consistent with State and local law, to accommodate the 
                transfer request of every student, the local 
                educational agency shall permit as many students as 
                possible (who shall be selected by the local 
                educational agency on an equitable basis) to transfer 
                to a public school that has not been identified for 
                school improvement under section 1116(b).
                    ``(C) Cooperative agreement.--If all public schools 
                in the local educational agency to which a child may 
                transfer to, are identified for school improvement, the 
                agency shall, to the extent practicable, establish a 
                cooperative agreement with other local educational 
                agencies in the area for the transfer.
                    ``(D) Transportation.--The local educational agency 
                in which the schools have been identified for 
                improvement may use up to 10 percent of the funds 
                received under this part to provide transportation to 
                students whose parents choose to transfer their child 
                or children to a different school.
                    ``(E) Waiver.--A local educational agency using 
                funds received under this part for transportation 
                consistent with subparagraph (D) may request a waiver 
                of the limit of the use of such funds described in 
                subparagraph (D) from the Secretary.
                    ``(F) Continue option.--Once a school is no longer 
                identified for school improvement, the local 
                educational agency may continue to provide public 
                school choice as an option to students in such school 
                for a period of not less than 2 years.
            ``(7) School plan.--
                    ``(A) In general.--Each school identified under 
                paragraph (1) for school improvement shall, not later 
                than 3 months after being so identified, develop or 
                revise a school plan, in consultation with parents, 
                school staff, the local educational agency, and other 
                outside experts for approval by the local educational 
                agency. Such plan shall--
                            ``(i) incorporate scientifically based 
                        research strategies that strengthen the core 
                        academic program in the school;
                            ``(ii) adopt policies that have the 
                        greatest likelihood of improving the 
                        performance of participating children in 
                        meeting the State's student performance 
                        standards;
                            ``(iii) address the professional 
                        development needs of staff, particularly 
                        teachers and principals;
                            ``(iv) establish specific goals and 
                        objectives the school will undertake for making 
                        adequate yearly progress which include specific 
                        numerical performance goals and targets for 
                        each of the groups of students identified in 
                        the disaggregated data pursuant to section 
                        1111(b)(2), consistent with section 
                        1111(b)(2)(B);
                            ``(v) identify how the school will provide 
                        written notification to parents, in a format 
                        and to the extent practicable in a language 
                        such parents can understand; and
                            ``(vi) specify the responsibilities of the 
                        local educational agency and the school under 
                        the plan.
                    ``(B) Conditional approval.--A local educational 
                agency may condition approval of a school plan, 
                including a revised plan, on inclusion of one or more 
                of the corrective actions specified in paragraph (9).
                    ``(C) Implementation.--A school shall implement its 
                plan or revised plan expeditiously, but not later than 
                the beginning of the school year after which the school 
                has been identified for improvement.
                    ``(D) Review.--The local educational agency shall 
                promptly review the plan, including a revised plan, 
                work with the school as necessary, and approve the plan 
                if it meets the requirements of this section.
            ``(8) Technical assistance.--
                    ``(A) In general.--For each school identified for 
                school improvement under paragraph (1), the local 
                educational agency shall provide technical assistance 
                as the school develops and implements its plan, 
                including a revised plan.
                    ``(B) Specific technical assistance.--Such 
                technical assistance--
                            ``(i) shall include effective methods and 
                        instructional strategies that are based upon 
                        scientifically based research that strengthens 
                        the core academic program in the school and 
                        addresses the specific elements of student 
                        performance problems in the school;
                            ``(ii) may be provided directly by the 
                        local educational agency, through mechanisms 
                        authorized under section 1117, or with the 
                        local educational agency's approval, by an 
                        institution of higher education, a private 
                        nonprofit organization, an educational service 
                        agency, a comprehensive regional assistance 
                        center under part A of title XIII (as such 
center was in existence prior to the date of enactment of Leave No 
Child Behind Act of 2001), or other entities with experience in helping 
schools improve achievement.
                    ``(C) Technical assistance.--Technical assistance 
                provided under this section by the local educational 
                agency or an entity authorized by such agency shall be 
                based upon scientifically based research.
            ``(9) Corrective action.--In order to help students served 
        under this part meet challenging State standards, each local 
        educational agency shall implement a system of corrective 
        action in accordance with the following:
                    ``(A) In general.--After providing technical 
                assistance under paragraph (8) and subject to 
                subparagraph (F), the local educational agency--
                            ``(i) may take corrective action at any 
                        time with respect to a school that has been 
                        identified under paragraph (1);
                            ``(ii) shall take corrective action with 
                        respect to any school that fails to make 
                        adequate yearly progress, as defined by the 
                        State, after the end of the second year 
                        following its identification under paragraph 
                        (1); and
                            ``(iii) shall continue to provide technical 
                        assistance while instituting any corrective 
                        action under clause (i) or (ii).
                    ``(B) Definition.--As used in this paragraph, the 
                term `corrective action' means action, consistent with 
                State and local law, that--
                            ``(i) substantially and directly responds 
                        to the consistent academic failure that caused 
                        the local educational agency to take such 
                        action and to any underlying staffing, 
                        curricular, or other problems in the school; 
                        and
                            ``(ii) is designed to substantially 
                        increase the likelihood that students will 
                        perform at the proficient and advanced 
                        performance levels.
                    ``(C) Certain schools.--In the case of a school 
                described in subparagraph (A)(ii), the local 
                educational agency shall take not less than 1 of the 
                following corrective actions:
                            ``(i) Withhold funds from the school.
                            ``(ii) Decrease decisionmaking authority at 
                        the school level.
                            ``(iii) Make alternative governance 
                        arrangements, including reopening the school as 
                        a public charter school.
                            ``(iv) Reconstitute the school by requiring 
                        each person employed at the school to reapply 
                        for future employment at the same school or for 
                        any position in the local educational agency.
                            ``(v) Authorize students to transfer to 
                        other higher performing public schools served 
                        by the local educational agency, including 
                        public charter schools, and provide such 
                        students transportation (or the costs of 
                        transportation) to such schools in conjunction 
                        with not less than 1 additional action 
                        described under this subparagraph.
                            ``(vi) Institute and fully implement a new 
                        curriculum, including appropriate professional 
                        development for all relevant staff, that is 
                        based upon scientifically based research and 
                        offers substantial promise of improving 
                        educational achievement for low-performing 
                        students.
                    ``(D) Implementation delay.--A local educational 
                agency may delay, for a period not to exceed 1 year, 
                implementation of corrective action only if the failure 
                to make adequate yearly progress was justified due to 
                exceptional or uncontrollable circumstances such as a 
                natural disaster or a precipitous and unforeseen 
                decline in the financial resources of the local 
                educational agency or school.
                    ``(E) Publication.--The local educational agency 
                shall publish, and disseminate to the public and to 
                parents in a format and, to the extent practicable, in 
                a language that they can understand, any corrective 
                action it takes under this paragraph through such means 
                as the Internet, the media, and public agencies.
                    ``(F) Review.--(i) Before taking corrective action 
                with respect to any school under this paragraph, a 
                local educational agency shall provide the school an 
                opportunity to review the school level data, including 
                assessment data, on which the proposed determination is 
                made.
                    ``(ii) If the school believes that the proposed 
                determination is in error for statistical or other 
                substantive reasons, it may provide supporting evidence 
                to the local educational agency, which shall consider 
                such evidence before making a final determination.
            ``(10) State educational agency responsibilities.--If a 
        State educational agency determines that a local educational 
        agency failed to carry out its responsibilities under this 
        section, it shall take such action as it finds necessary, 
        consistent with this section, to improve the affected schools 
        and to ensure that the local educational agency carries out its 
        responsibilities under this section.
    ``(c) State Review and Local Educational Agency Improvement.--
            ``(1) In general.--A State educational agency shall--
                    ``(A) annually review the progress of each local 
                educational agency receiving funds under this part to 
                determine whether schools receiving assistance under 
                this part are making adequate yearly progress as 
                defined in section 1111(b)(2) toward meeting the 
                State's student performance standards; and
                    ``(B) publicize and disseminate to local 
                educational agencies, teachers and other staff, 
                parents, students, and the community the results of the 
                State review consistent with section 1111, including 
                statistically sound disaggregated results, as required 
                by section 1111(b)(2).
            ``(2) Identification of local educational agency for 
        improvement.--A State educational agency shall identify for 
        improvement any local educational agency that--
                    ``(A) for 2 consecutive years failed to make 
                adequate yearly progress as defined in the State's plan 
                under section 1111(b)(2); or
                    ``(B) was in improvement status under this section 
                as this section was in effect on the day preceding the 
                date of enactment of the Leave No Child Behind Act of 
                2001.
            ``(3) Transition.--The 2-year period described in paragraph 
        (2)(A) shall include any continuous period of time immediately 
        preceding the date of enactment of the Leave No Child Behind 
        Act of 2001, during which a local educational agency did not 
        make adequate yearly progress as defined in the State's plan, 
        as such plan was in effect on the day preceding the date of 
        such enactment.
            ``(4) Targeted assistance schools.--For purposes of 
        targeted assistance schools in a local educational agency, a 
State educational agency may choose to review the progress of only the 
students in such schools who are served under this part.
            ``(5) Opportunity to review and present evidence.--
                    ``(A) Review.--Before identifying a local 
                educational agency for improvement under paragraph (2), 
                a State educational agency shall provide the local 
                educational agency with an opportunity to review the 
                local educational agency data, including assessment 
                data, on which that proposed identification is based.
                    ``(B) Supporting evidence.--If the local 
                educational agency believes that the proposed 
                identification is in error for statistical or other 
                substantive reasons, it may provide supporting evidence 
                to the State educational agency, which such agency 
                shall consider before making a final determination.
            ``(6) Notification to parents.--The State educational 
        agency shall promptly notify parents in a format, and to the 
        extent practicable in a language they can understand, of each 
        student enrolled in a school in a local educational agency 
        identified for improvement, of the reasons for such agency's 
        identification and how parents can participate in upgrading the 
        quality of the local educational agency.
            ``(7) Local educational agency revisions.--
                    ``(A) Plan.--Each local educational agency 
                identified under paragraph (2) shall, not later than 3 
                months after being so identified, develop or revise a 
                local educational agency plan, in consultation with 
                parents, school staff, and others. Such plan shall--
                            ``(i) incorporate scientifically based 
                        research strategies that strengthen the core 
                        academic program in the local educational 
                        agency;
                            ``(ii) identify specific goals and 
                        objectives the local educational agency will 
                        undertake to make adequate yearly progress and 
                        which--
                                    ``(I) have the greatest likelihood 
                                of improving the performance of 
                                participating children in meeting the 
                                State's student performance standards;
                                    ``(II) address the professional 
                                development needs of staff; and
                                    ``(III) include specific numerical 
                                performance goals and targets for each 
                                of the groups of students identified in 
                                the disaggregated data pursuant to 
                                section 1111(b)(2) consistent with 
                                section 1111(b)(2)(B);
                            ``(iii) identify how the local educational 
                        agency will provide written notification to 
                        parents in a format, and to the extent 
                        practicable in a language, they can understand, 
                        pursuant to paragraph (6); and
                            ``(iv) specify the responsibilities of the 
                        State educational agency and the local 
                        educational agency under the plan.
                    ``(B) Implementation.--The local educational agency 
                shall implement its plan or revised plan expeditiously, 
                but not later than the beginning of the school year 
                after which the school has been identified for 
                improvement.
            ``(8) State educational agency responsibility.--
                    ``(A) In general.--For each local educational 
                agency identified under paragraph (2), the State 
                educational agency shall provide technical or other 
                assistance, if requested, as authorized under section 
                1117, to better enable the local educational agency--
                            ``(i) to develop and implement its revised 
                        plan as approved by the State educational 
                        agency consistent with the requirements of this 
                        section; and
                            ``(ii) to work with schools needing 
                        improvement.
                    ``(B) Technical assistance.--Technical assistance 
                provided under this section by the State educational 
                agency or an entity authorized by such agency shall be 
                based upon scientifically based research.
            ``(9) Corrective action.--In order to help students served 
        under this part meet challenging State standards, each State 
        educational agency shall implement a system of corrective 
        action in accordance with the following:
                    ``(A) In general.--After providing technical 
                assistance under paragraph (8) and subject to 
                subparagraph (D), the State educational agency--
                            ``(i) may take corrective action at any 
                        time with respect to a local educational agency 
                        that has been identified under paragraph (2);
                            ``(ii) shall take corrective action with 
                        respect to any local educational agency that 
                        fails to make adequate yearly progress, as 
                        defined by the State, after the end of the 
                        second year following its identification under 
                        paragraph (2); and
                            ``(iii) shall continue to provide technical 
                        assistance while instituting any corrective 
                        action under clause (i) or (ii).
                    ``(B) Definition.--As used in this paragraph, the 
                term `corrective action' means action, consistent with 
                State law, that--
                            ``(i) substantially and directly responds 
                        to the consistent academic failure that caused 
                        the State educational agency to take such 
                        action and to any underlying staffing, 
                        curricular, or other problems in the school; 
                        and
                            ``(ii) is designed to meet the goal of 
                        having all students served under this part 
                        perform at the proficient and advanced 
                        performance levels.
                    ``(C) Certain local educational agencies.--In the 
                case of a local educational agency described in this 
                paragraph, the State educational agency shall take not 
                less than 1 of the following corrective actions:
                            ``(i) Withhold funds from the local 
                        educational agency.
                            ``(ii) Reconstitute school district 
                        personnel.
                            ``(iii) Remove particular schools from the 
                        jurisdiction of the local educational agency 
                        and establish alternative arrangements for 
                        public governance and supervision of such 
                        schools.
                            ``(iv) Appoint, through the State 
                        educational agency, a receiver or trustee to 
                        administer the affairs of the local educational 
                        agency in place of the superintendent and 
                        school board.
                            ``(v) Abolish or restructure the local 
                        educational agency.
                            ``(vi) Authorize students to transfer from 
                        a school operated by a local educational agency 
                        to a higher performing public school operated 
                        by another local educational agency, or to a 
                        public charter school and provide such students 
                        transportation (or the costs of transportation) 
                        to such schools, in conjunction with not less 
                        than 1 additional action described under this 
                        paragraph.
                    ``(D) Hearing.--Prior to implementing any 
                corrective action, the State educational agency shall 
                provide due process and a hearing to the affected local 
                educational agency, if State law provides for such 
                process and hearing.
                    ``(E) Publication.--The State educational agency 
                shall publish, and disseminate to parents and the 
                public any corrective action it takes under this 
                paragraph through such means as the Internet, the 
                media, and public agencies.
                    ``(F) Delay.--A State educational agency may delay, 
                for a period not to exceed 1 year, implementation of 
                corrective action if the failure to make adequate 
                yearly progress was justified due to exceptional or 
                uncontrollable circumstances such as a natural disaster 
                or a precipitous and unforeseen decline in the 
                financial resources of the local educational agency or 
                school.''.

SEC. 3440. STATE ASSISTANCE FOR SCHOOL SUPPORT AND IMPROVEMENT.

    Section 1117 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6318) is amended to read as follows:

``SEC. 1117. STATE ASSISTANCE FOR SCHOOL SUPPORT AND IMPROVEMENT.

    ``(a) System for Support.--Each State educational agency shall 
establish a statewide system of intensive and sustained support and 
improvement for local educational agencies and schools receiving funds 
under this part, in order to increase the opportunity for all students 
in those agencies and schools to meet the State's content standards and 
student performance standards.
    ``(b) Priorities.--In carrying out this section, a State 
educational agency shall--
            ``(1) first, provide support and assistance to local 
        educational agencies subject to corrective action under section 
        1116 and assist schools, in accordance with section 
        1116(b)(10), for which a local educational agency has failed to 
        carry out its responsibilities under paragraph (8) or (9) of 
        section 1116(b);
            ``(2) second, provide support and assistance to other local 
        educational agencies identified for improvement under section 
        1116; and
            ``(3) third, provide support and assistance to other local 
        educational agencies and schools participating under this part 
        that need that support and assistance in order to achieve the 
        purpose of this part.
    ``(c) Approaches.--In order to achieve the purpose described in 
subsection (a), each such system shall provide technical assistance and 
support through such approaches as--
            ``(1) school support teams, composed of individuals who are 
        knowledgeable about scientifically based research on and 
        practice of teaching and learning, particularly about 
        strategies for improving educational results for low-achieving 
        children; and
            ``(2) the designation and use of ``Distinguished 
        Educators'', chosen from schools served under this part that 
        have been especially successful in improving academic 
        achievement.
    ``(d) Funds.--Each State educational agency shall use funds 
reserved under section 1002(f) and authorized under section 1002(i) for 
such purpose.
    ``(e) Alternatives.--The State may devise additional approaches to 
providing the assistance described in paragraphs (1) and (2) of 
subsection (c), such as providing assistance through institutions of 
higher education and educational service agencies or other local 
consortia, and the State may seek approval from the Secretary to use 
funds made available under section 1002(h) for such approaches as part 
of the State plan.''.

SEC. 3441. ACADEMIC ACHIEVEMENT AWARDS PROGRAM; IMPROVING STATE 
              ASSESSMENTS.

    Subpart 1 of part A of title I of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6311 et seq.) is amended by inserting 
after section 1117 the following:

``SEC. 1117A. ACADEMIC ACHIEVEMENT AWARDS PROGRAM.

    ``(a) Establishment of Academic Achievement Awards Program.--
            ``(1) In general.--Each State receiving a grant under this 
        part shall establish a program for making academic achievement 
        awards to recognize and financially reward schools served under 
        this part that have--
                    ``(A) significantly closed the achievement gap 
                between the groups of students defined in section 
                1111(b)(2); or
                    ``(B) exceeded their adequate yearly progress 
                goals, consistent with section 1111(b)(2), for 2 or 
                more consecutive years.
            ``(2) Awards to teachers.--A State program under paragraph 
        (1) shall also recognize and provide financial awards to 
        teachers teaching in a school described in such paragraph whose 
        students consistently make significant gains in academic 
        achievement in the areas in which the teacher provides 
        instruction over multiple academic years.
    ``(b) Funding.--
            ``(1) Reservation of funds by state.--For the purpose of 
        carrying out this section, each State receiving a grant under 
        this part shall reserve, from the amount (if any) by which the 
        funds received by the State under this part for a fiscal year 
        exceed the amount received by the State under this part for the 
        preceding fiscal year, not more than 25 percent of such excess 
        amount.
            ``(2) Use within 3 years.--Notwithstanding any other 
        provision of law, the amount reserved under paragraph (1) by a 
        State for each fiscal year shall remain available to the State 
        until expended for a period not exceeding 3 years.
            ``(3) Special allocation rule for schools in high-poverty 
        areas.--
                    ``(A) In general.--Each State receiving a grant 
                under this part shall distribute at least 85 percent of 
                the amount reserved under paragraph (1) for each fiscal 
                year to schools described in subparagraph (B), or to 
                teachers teaching in such schools.
                    ``(B) Schools described.--A school described in 
                subparagraph (A) is a school whose student population 
                is in the highest quartile of schools statewide in 
                terms of the percentage of children eligible for free 
                or reduced priced lunches under the Richard B. Russell 
                National School Lunch Act.

``SEC. 1117B. GRANTS FOR THE IMPROVEMENT OF STATE ASSESSMENT SYSTEMS.

    ``(a) Purpose.--The purpose of this section is to enable States to 
improve the quality and fairness of State assessment systems and to 
ensure that such assessment systems accurately measure how well all 
children are achieving challenging State student performance standards.
    ``(b) Program Authorized.--The Secretary is authorized to award 
grants, in an amount not less than $500,000, to State educational 
agencies with final assessment systems that have been reviewed by the 
Secretary and approved as being deemed in full compliance with section 
1111(b)(4).
    ``(c) Application.--A State educational agency desiring a grant 
under this section for any fiscal year, shall submit an application to 
the Secretary for approval, at such time and containing such 
information as the Secretary may require.
    ``(d) Authorized Uses of Funds.--States having an approved 
application under subsection (c) may use grant funds for the purpose 
of--
            ``(1) assuring the continued validity and reliability of 
        State assessments;
            ``(2) refining the assessments to ensure their continued 
        alignment with the State's content standards;
            ``(3) providing for multiple measures to increase the 
        reliability and validity of student and school classifications 
        that have high stakes consequences;
            ``(4) strengthening the capacity of local educational 
        agencies and schools to provide all students the opportunity to 
        increase educational achievement and to ensure fairness and 
        equitable treatment in testing;
            ``(5) expanding the range of accommodations available to 
        limited English proficient students and students with 
        disabilities to improve rates of inclusion and to include 
        instructional material development and modified assessment 
        practices that are culturally and ability appropriate, 
        respectively;
            ``(6) improving the alignment of curricula and instruction 
        materials with the State content standards and State 
        performance standards;
            ``(7) enhancing opportunities for professional development 
        for teachers that include--
                    ``(A) improving the capability of teachers to be 
                proficient in sound classroom assessment and 
                knowledgeable in State content and performance 
                standards and assessments; and
                    ``(B) improving the capability of teachers to 
                provide high quality instruction within the content 
                areas;
            ``(8) providing for the collection of performance data for 
        children in kindergarten through grade 2--
                    ``(A) for early diagnosis of children's needs;
                    ``(B) to evaluate program effectiveness;
                    ``(C) to guide curriculum and instruction; or
                    ``(D) to provide information that can be used to 
                measure school and local educational agency progress;
            ``(9) expanding the range of valid and reliable assessments 
        to other academic subjects such as science, history, geography, 
        foreign languages, the arts, civic and government, and 
        economics; and
            ``(10) improving the dissemination of information on 
        student achievement and school performance to parents and the 
        community.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $100,000,000 for fiscal year 
2002, and such sums as may be necessary for each of the 4 succeeding 
fiscal years.''.

SEC. 3442. PARENTAL INVOLVEMENT CHANGES.

    (a) Local Educational Agency Policy.--Subsection (a) of section 
1118 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
6319(a)) is amended--
            (1) in paragraph (1), by striking ``programs, activities, 
        and procedures'' and inserting ``activities and procedures''.
            (2) in paragraph (2) by striking subparagraphs (E) and (F) 
        and inserting the following:
                    ``(E) conduct, with the involvement of parents, an 
                annual evaluation of the content and effectiveness of 
                the parental involvement policy in improving the 
                academic quality of the schools served under this part;
                    ``(F) involve parents in efforts to improve 
                academics in schools served under this part; and
                    ``(G) promote consumer friendly environments at the 
                local educational agency and schools served under this 
                part.'';
            (3) in paragraph (3) by adding at the end the following new 
        subparagraph:
            ``(C) Not less than 90 percent of the funds reserved under 
        subparagraph (A) shall be distributed to schools served under 
        this part.''.
    (b) Notice.--Paragraph (1) of section 1118(b) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6319(b)(1)) is amended by 
inserting after the first sentence the following: ``Parents shall be 
notified of the policy in a format, and to the extent practicable, in a 
language they can understand.''.
    (c) Parental Involvement.--Paragraph (4) of section 1118(c) of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6319(c)(4)) 
is amended--
            (1) in subparagraph (B), by striking ``performance profiles 
        required under section 1116(a)(3)'' and inserting ``school 
        report cards required under section 1111'';
            (2) by redesignating subparagraphs (D) and (E) as 
        subparagraphs (F) and (G), respectively;
            (3) by inserting after subparagraph (C) the following new 
        subparagraphs:
                    ``(D) notice of the school's status as a school 
                identified for school improvement under section 
                1116(b), if applicable, and a clear explanation of what 
                such identification means;
                    ``(E) notice of the corrective action that has been 
                taken against the school under section 1116(b)(9) and 
                1116(c)(9), if applicable, and a clear explanation of 
                what such action means;''; and
            (4) in subparagraph (G) (as so redesignated), by striking 
        ``subparagraph (D)'' and inserting ``subparagraph (F)''.
    (d) Building Capacity for Involvement.--Subsection (e) of section 
1118 of the Elementary and Secondary Education Act of 1965 (20 U.S.C 
6319(e)) is amended to read as follows:
    ``(e) Building Capacity for Involvement.--To ensure effective 
involvement of parents and to support a partnership among the school, 
parents, and the community to improve student achievement, each school 
and local educational agency--
            ``(1) shall provide assistance to participating parents in 
        such areas as understanding the State's content standards and 
        State student performance standards, the provisions of section 
        1111(b)(8), State and local assessments, the requirements of 
        this part, and how to monitor a child's progress and work with 
        educators to improve the performance of their children as well 
        as information on how parents can participate in decisions 
        relating to the education of their children;
            ``(2) shall provide materials and training, such as--
                    ``(A) coordinating necessary literacy training from 
                other sources to help parents work with their children 
                to improve their children's achievement; and
                    ``(B) training to help parents work with their 
                children to improve their children's achievement;
            ``(3) shall educate teachers, pupil services personnel, 
        principals, and other staff, with the assistance of parents, in 
        the value and utility of contributions of parents, and in how 
        to reach out to, communicate with, and work with parents as 
        equal partners, implement and coordinate parent programs, and 
        build ties between home and school;
            ``(4) shall coordinate and integrate parent involvement 
        programs and activities with Head Start, Even Start, the Home 
        Instruction Programs for Preschool Youngsters, the Parents as 
        Teachers Program, and public preschool programs and other 
        programs, to the extent feasible and appropriate;
            ``(5) shall conduct other activities, as appropriate and 
        feasible, such as parent resource centers and opportunities for 
        parents to learn how to become full partners in the education 
        of their children;
            ``(6) shall ensure, to the extent possible, that 
        information related to school and parent programs, meetings, 
        and other activities is sent to the homes of participating 
        children in the language used in such homes;
            ``(7) shall provide such other reasonable support for 
        parental involvement activities under this section as parents 
        may request;
            ``(8) shall expand the use of electronic communications 
        among teachers, students, and parents, such as through the use 
        of websites and e-mail communications;
            ``(9) may involve parents in the development of training 
        for teachers, principals, and other educators to improve the 
        effectiveness of such training in improving instruction and 
        services to the children of such parents in a format, and to 
        the extent practicable, in a language the parents can 
        understand;
            ``(10) may provide necessary literacy training from funds 
        received under this part if the local educational agency has 
        exhausted all other reasonably available sources of funding for 
        such activities;
            ``(11) may pay reasonable and necessary expenses associated 
        with local parental involvement activities, including 
        transportation and child care costs, to enable parents to 
        participate in school-related meetings and training sessions;
            ``(12) may train and support parents to enhance the 
        involvement of other parents;
            ``(13) may arrange meetings at a variety of times, such as 
        in the mornings and evenings, in order to maximize the 
        opportunities for parents to participate in school related 
        activities;
            ``(14) may arrange for teachers or other educators, who 
        work directly with participating children, to conduct in-home 
        conferences with parents who are unable to attend such 
        conferences at school;
            ``(15) may adopt and implement model approaches to 
        improving parental involvement, such as Even Start;
            ``(16) may establish a district-wide parent advisory 
        council to advise on all matters related to parental 
        involvement in programs supported under this part; and
            ``(17) may develop appropriate roles for community-based 
        organizations and businesses in parent involvement activities, 
        including providing information about opportunities for 
        organizations and businesses to work with parents and schools, 
        and encouraging the formation of partnerships between 
        elementary, middle, and secondary schools and local businesses 
        that include a role for parents.''.
    (e) Accessibility.--Subsection (f) of section 1118 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6319(f)) is 
amended to read as follows:
    ``(f) Accessibility.--In carrying out the parental involvement 
requirements of this part, local educational agencies and schools, to 
the extent practicable, shall provide full opportunities for the 
participation of parents with limited English proficiency, parents with 
disabilities, and parents of migratory children, including providing 
information and school report cards required under section 1111 in a 
format, and to the extent practicable, in a language such parents 
understand.''.

SEC. 3443. PROFESSIONAL DEVELOPMENT.

    Subpart 1 of part A of title I of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6311 et seq.) is amended by inserting 
after section 1119 the following:

``SEC. 1119A. PROFESSIONAL DEVELOPMENT.

    ``(a) Purpose.--The purpose of this section is to assist each local 
educational agency receiving assistance under this part in increasing 
the academic achievement of eligible children (as defined in section 
1115(b)(1)(B)) through improved teacher quality.
    ``(b) Professional Development Activities.--
            ``(1) Required activities.--Professional development 
        activities under this section shall--
                    ``(A) support professional development activities 
                that give teachers, principals, and administrators the 
                knowledge and skills to provide students with the 
                opportunity to meet challenging State or local content 
                standards and student performance standards;
                    ``(B) support the recruiting, hiring, and training 
                of fully qualified teachers, including teachers fully 
                qualified through State and local alternative routes;
                    ``(C) advance teacher understanding of effective 
                instructional strategies based on scientifically based 
                research for improving student achievement, at a 
                minimum, in reading or language arts and mathematics;
                    ``(D) be directly related to the curriculum and 
                content areas in which the teacher provides 
                instruction;
                    ``(E) be designed to enhance the ability of a 
                teacher to understand and use the State's standards for 
                the subject area in which the teacher provides 
                instruction;
                    ``(F) be tied to scientifically based research 
                demonstrating the effectiveness of such professional 
                development activities or programs in increasing 
                student achievement or substantially increasing the 
                knowledge and teaching skills of teachers;
                    ``(G) be of sufficient intensity and duration (not 
                to include 1-day or short-term workshops and 
                conferences) to have a positive and lasting impact on 
                the teacher's performance in the classroom, except that 
                this paragraph shall not apply to an activity if such 
                activity is 1 component of a long-term comprehensive 
                professional development plan established by the 
                teacher and the teacher's supervisor based upon an 
                assessment of their needs, their students' needs, and 
                the needs of the local educational agency;
                    ``(H) be developed with extensive participation of 
                teachers, principals, parents, and administrators of 
                schools to be served under this part;
                    ``(I) to the extent appropriate, provide training 
                for teachers in the use of technology so that 
                technology and its applications are effectively used in 
                the classroom to improve teaching and learning in the 
                curriculum and academic content areas in which the 
                teachers provide instruction;
                    ``(J) as a whole, be regularly evaluated for their 
                impact on increased teacher effectiveness and improved 
                student achievement, with the findings of such 
                evaluations used to improve the quality of professional 
                development; and
                    ``(K) include strategies for identifying and 
                eliminating gender and racial bias in instructional 
                materials, methods, and practices.
            ``(2) Optional activities.--Such professional development 
        activities may include--
                    ``(A) instruction in the use of data and 
                assessments to inform and instruct classroom practice;
                    ``(B) instruction in ways that teachers, 
                principals, pupil services personnel, and school 
                administrators may work more effectively with parents;
                    ``(C) the forming of partnerships with institutions 
                of higher education to establish school-based teacher 
                training programs that provide prospective teachers and 
                novice teachers with an opportunity to work under the 
                guidance of experienced teachers and college faculty, 
                but only if each such institution of higher education 
                meets the reporting requirements of section 207 of the 
                Higher Education Act of 1965 (20 U.S.C. 1027) and its 
                teacher preparation program has not been identified by 
                its State as low-performing under such Act;
                    ``(D) the creation of career ladder programs for 
                paraprofessionals (assisting teachers under this part) 
                to obtain the education necessary for such 
                paraprofessionals to become licensed and certified 
                teachers;
                    ``(E) instruction in ways to teach special needs 
                children;
                    ``(F) instruction in the ways that teachers, 
                principals, and guidance counselors can work with 
                parents and students from groups such as females and 
                minorities that are under represented in careers in 
                mathematics, science, engineering, and technology, to 
                encourage and maintain the interest of such students in 
                these careers;
                    ``(G) joint professional development activities 
                involving programs under this part, Head Start, Even 
                Start, or State-run preschool program personnel;
                    ``(H) instruction in experiential-based teaching 
                methods such as service or applied learning;
                    ``(I) mentoring programs focusing on changing 
                teacher behaviors and practices to help novice 
                teachers, including teachers who are members of a 
                minority group, develop and gain confidence in their 
                skills, to increase the likelihood that they will 
                continue in the teaching profession, and generally to 
                improve the quality of their teaching; and
                    ``(J) instruction in gender-equitable methods, 
                techniques, and practices.
    ``(c) Program Participation.--Each local educational agency 
receiving assistance under this part may design professional 
development programs so that--
            ``(1) all school staff in schools participating in a 
        schoolwide program under section 1114 can participate in 
        professional development activities; and
            ``(2) all school staff in targeted assistance schools may 
        participate in professional development activities if such 
        participation will result in better addressing the needs of 
        students served under this part.
    ``(d) Parental Participation.--Parents may participate in 
professional development activities under this part if the school 
determines that parental participation is appropriate.
    ``(e) Consortia.--In carrying out such professional development 
programs, local educational agencies may provide services through 
consortia arrangements with other local educational agencies, 
educational service agencies or other local consortia, institutions of 
higher education, or other public or private institutions or 
organizations, but only if each such institution of higher education 
meets the reporting requirements of section 207 of the Higher Education 
Act of 1965 (20 U.S.C. 1027) and its teacher preparation program has 
not been identified by its State as low-performing under such Act.
    ``(f) Consolidation of Funds.--Funds provided under this part that 
are used for professional development purposes may be consolidated with 
funds provided under title II of this Act and other sources.
    ``(g) Special Rule.--No State educational agency shall require a 
school or a local educational agency to expend a specific amount of 
funds for professional development activities under this part, except 
that this paragraph shall not apply with respect to requirements under 
section 1116(c)(9).''.

SEC. 3444. REQUIREMENTS; RECORDS.

    (a) Requirements.--Section 1120A(c)(2) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6322(c)(2)) is amended to 
read as follows:
            ``(2) Criteria for meeting comparability requirement.--
                    ``(A) Approval.--To meet the requirement of 
                paragraph (1), a local educational agency shall obtain 
                the State educational agency's approval of a 
                comprehensive, 3-year plan to ensure comparability in 
                the use of State and local funds and educational 
                services among its schools receiving funds under this 
                part and its other schools with respect to:
                            ``(i) the rates at which class sections are 
                        taught by experienced and fully qualified 
                        teachers, including such rates for low-income 
                        and minority students;
                            ``(ii) curriculum, in terms of both the 
                        range of courses offered, and the opportunity 
                        to participate in rigorous courses including 
                        advanced placement (AP) courses, including such 
                        rates for low-income and minority students; and
                            ``(iii) the quality and availability of 
                        instructional materials and instructional 
                        resources including technology.''
                    ``(B) Exclusion.--A local educational agency need 
                not include unpredictable changes in student enrollment 
                or personnel assignments that occur after the beginning 
                of a school year in determining comparability of 
                services under this subsection.
                    ``(C) Requirements.--Notwithstanding subparagraph 
                (A), a local educational agency may continue to meet 
                the requirement of paragraph (1) by complying with 
                subparagraph (A) as such subparagraph was in effect on 
                the day preceding the date of enactment of the Leave No 
                Child Behind Act of 2001, except that each local 
                educational agency shall be required to comply with 
                subparagraph (A), as amended by such Act not later than 
                July 1, 2004.''.
    (b) Records.--Section 1120A(c)(3)(B) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6322(c)(3)(B)) is amended by 
striking ``biennially'' and inserting ``annually''.

SEC. 3445. COORDINATION REQUIREMENTS.

    Section 1120B of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6323 et seq.) is amended--
            (1) in subsection (a), by striking ``to the extent 
        feasible'' and all that follows through the period and 
        inserting ``with local Head Start agencies, and if feasible, 
        other early childhood development programs.'';
            (2) in subsection (b)--
                    (A) in paragraph (3) by striking ``and'' after the 
                semicolon;
                    (B) in paragraph (4) by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end, the following:
            ``(5) linking the educational services provided in such 
        local educational agency with the services provided in local 
        Head Start agencies.''.

               Chapter 5--Quality Teaching and Leadership

 Subchapter A--Amendments to Title II of the Elementary and Secondary 
                         Education Act of 1965

SEC. 3461. AMENDMENTS TO TITLE II.

    Title II of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6601 et seq.) is amended--
            (1) by redesignating part E as part J;
            (2) by redesignating sections 2401 and 2402 as sections 
        2901 and 2902 respectively; and
            (3) by inserting after part D the following:

                     ``PART E--CLASS SIZE REDUCTION

``SEC. 2401. GRANT PROGRAM.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to reduce class size through the use of fully 
        qualified teachers;
            ``(2) to assist States and local educational agencies in 
        recruiting, hiring, and training 100,000 teachers in order to 
        reduce class sizes nationally, in kindergarten through grade 3, 
        to an average of 18 students per regular classroom; and
            ``(3) to improve teaching in those grades so that all 
        students can learn to read independently and well by the end of 
        the 3d grade.
    ``(b) Allotment to States.--
            ``(1) Reservation.--From the amount made available to carry 
        out this part for a fiscal year, the Secretary shall reserve 
        not more than 1 percent for the Secretary of the Interior (on 
        behalf of the Bureau of Indian Affairs) and the outlying areas 
        for activities carried out in accordance with this section.
            ``(2) State allotments.--
                    ``(A) Hold harmless.--
                            ``(i) In general.--Subject to subparagraph 
                        (B) and clause (ii), from the amount made 
                        available to carry out this part for a fiscal 
                        year and not reserved under paragraph (1), the 
                        Secretary shall allot to each State an amount 
                        equal to the amount that such State received 
                        for the preceding fiscal year under this 
                        section or section 306 of the Department of 
                        Education Appropriations Act, 2001, as the case 
                        may be.
                            ``(ii) Ratable reduction.--If the amount 
                        made available to carry out this part for a 
                        fiscal year and not reserved under paragraph 
                        (1) is insufficient to pay the full amounts 
                        that all States are eligible to receive under 
                        clause (i) for such fiscal year, the Secretary 
                        shall ratably reduce such amounts for such 
                        fiscal year.
                    ``(B) Allotment of additional funds.--
                            ``(i) In general.--Subject to clause (ii), 
                        for any fiscal year for which the amount made 
                        available to carry out this part and not 
                        reserved under paragraph (1) exceeds the amount 
                        made available to the States for the preceding 
                        year under the authorities described in 
                        subparagraph (A)(i), the Secretary shall allot 
                        to each of those States the percentage of the 
                        excess amount that is the greater of--
                                    ``(I) the percentage the State 
                                received for the preceding fiscal year 
                                of the total amount made available to 
                                the States under section 1122; or
                                    ``(II) the percentage so received 
                                of the total amount made available to 
                                the States under section 6101(b), as in 
                                effect on the day before the date of 
                                enactment of the Leave No Child Behind 
                                Act of 2001, or the corresponding 
                                provision of this title, as the case 
                                may be.
                            ``(ii) Ratable reductions.--If the excess 
                        amount for a fiscal year is insufficient to pay 
                        the full amounts that all States are eligible 
                        to receive under clause (i) for such fiscal 
                        year, the Secretary shall ratably reduce such 
                        amounts for such fiscal year.
    ``(c) Allocation to Local Educational Agencies.--
            ``(1) Allocation.--Each State that receives funds under 
        this section shall allocate 100 percent of those funds to local 
        educational agencies, of which--
                    ``(A) 80 percent shall be allocated to those local 
                educational agencies in proportion to the number of 
                children, age 5 through 17, from families with incomes 
                below the poverty line (as defined by the Office of 
                Management and Budget and revised annually in 
                accordance with section 673(2) of the Community 
                Services Block Grant Act (42 U.S.C. 9902(2))) 
                applicable to a family of the size involved, who reside 
                in the school district served by that local educational 
                agency for the most recent fiscal year for which 
                satisfactory data are available, compared to the number 
                of those children who reside in the school districts 
                served by all the local educational agencies in the 
                State for that fiscal year; and
                    ``(B) 20 percent shall be allocated to those local 
                educational agencies in accordance with the relative 
                enrollments of children, age 5 through 17, in public 
                and private nonprofit elementary schools and secondary 
                schools within the areas served by those agencies.
            ``(2) Exception.--Notwithstanding paragraph (1) and 
        subsection (d)(2)(B), if the award to a local educational 
        agency under this section is less than the starting salary for 
        a new fully qualified teacher for a school served by that 
        agency, that agency may use funds made available under this 
        section to--
                    ``(A) help pay the salary of a full- or part-time 
                fully qualified teacher hired to reduce class size, 
                which may be done in combination with the expenditure 
                of other Federal, State, or local funds; or
                    ``(B) pay for activities described in subsection 
                (d)(2)(A)(iii) that may be related to teaching in 
                smaller classes.
    ``(d) Use of Funds.--
            ``(1) Mandatory uses.--Each local educational agency that 
        receives funds under this section shall use those funds to 
        carry out effective approaches to reducing class size through 
        use of fully qualified teachers to improve educational 
        achievement for both regular and special needs children, with 
        particular consideration given to reducing class size in the 
        early elementary grades for which some research has shown class 
        size reduction is most effective.
            ``(2) Permissible uses.--
                    ``(A) In general.--Each such local educational 
                agency may use funds made available under this section 
                for--
                            ``(i) recruiting (including through the use 
                        of signing bonuses and other financial 
                        incentives), hiring, and training fully 
                        qualified regular and special education 
                        teachers (which may include hiring special 
                        education teachers to team-teach with regular 
                        teachers in classrooms that contain both 
                        children with disabilities and non-disabled 
                        children) and teachers of special needs 
                        children;
                            ``(ii) testing new teachers for academic 
                        content knowledge, and to meet State 
                        certification or licensing requirements that 
                        are consistent with title II of the Higher 
                        Education Act of 1965; and
                            ``(iii) providing professional development 
                        (which may include such activities as promoting 
                        retention and mentoring) for teachers, 
                        including special education teachers and 
                        teachers of special needs children, in order to 
                        meet the goal of ensuring that all teachers 
                        have the general knowledge, teaching skills, 
                        and subject matter knowledge necessary to teach 
                        effectively in the content areas in which the 
                        teachers teach, consistent with title II of the 
                        Higher Education Act of 1965.
                    ``(B) Limitation on testing and professional 
                development.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), a local educational agency may use 
                        not more than a total of 25 percent of the 
                        funds received by the agency under this section 
                        for activities described in clauses (ii) and 
                        (iii) of subparagraph (A).
                            ``(ii) Special rule.--A local educational 
                        agency may use more than 25 percent of the 
                        funds the agency receives under this section 
                        for activities described in subparagraph 
                        (A)(iii) for the purpose of helping teachers 
                        who are not yet fully qualified in attaining 
                        full qualification if 10 percent or more of the 
                        elementary school classes in a school are 
                        taught by individuals who are not fully 
                        qualified teachers or the State educational 
                        agency has waived State certification or 
                        licensing requirements for 10 percent or more 
                        of such teachers.
                    ``(C) Use of funds by agencies that have reduced 
                class size.--Notwithstanding subparagraph (B), a local 
                educational agency that has already reduced class size 
                in the early elementary grades to 18 or fewer children 
                (or has already reduced class size to a State or local 
                class size reduction goal that was in effect on 
                November 28, 1999 if that goal is 20 or fewer children) 
                may use funds received under this section--
                            ``(i) to make further class size reductions 
                        in kindergarten through third grade;
                            ``(ii) to reduce class size in other 
                        grades; or
                            ``(iii) to carry out activities to improve 
                        teacher quality, including professional 
                        development.
            ``(3) Supplement, not supplant.--Each such agency shall use 
        funds made available under this section only to supplement, and 
        not to supplant, State and local funds that, in the absence of 
        funds made available under this section, would otherwise be 
        expended for activities described in this section.
            ``(4) Limitation on use for salaries and benefits.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no funds made available under this 
                section may be used to increase the salaries of, or 
                provide benefits (other than participation in 
                professional development and enrichment programs) to, 
                teachers who are not hired under this section.
                    ``(B) Exception.--Funds made available under this 
                section may be used to pay the salaries of teachers 
                hired under section 306 of the Department of Education 
                Appropriations Act, 2001.
    ``(e) Reports.--
            ``(1) State activities.--Each State receiving funds under 
        this section shall prepare and submit to the Secretary a 
        biennial report on activities carried out in the State under 
        this section that provides the information described in section 
        6202(a)(2) with respect to the activities.
            ``(2) Progress concerning class size and qualified 
        teachers.--Each State and local educational agency receiving 
        funds under this section shall annually report to parents and 
        the public, in numeric form as compared to the previous year, 
        on--
                    ``(A) the agency's progress in reducing class size, 
                and increasing the percentage of classes in core 
                academic areas taught by fully qualified teachers; and
                    ``(B) the impact that hiring additional fully 
                qualified teachers and reducing class size, has had, if 
                any, on increasing student academic achievement.
            ``(3) Notice.--Each local educational agency that receives 
        funds under this section shall provide, to each individual 
        parent of a child who attends a school served by such local 
        educational agency, timely, written notice if the child has 
        been assigned or has been taught for 2 or more consecutive 
        weeks by a substitute teacher, as defined by such local 
        educational agency, or a teacher who is not fully qualified.
    ``(f) Private Schools.--If a local educational agency uses funds 
made available under this section for professional development 
activities, the agency shall ensure the equitable participation of 
private nonprofit elementary schools and secondary schools in such 
activities in accordance with section 6402. Section 6402 shall not 
apply to other activities carried out under this section.
    ``(g) Administrative Expenses.--A local educational agency that 
receives funds under this section may use not more than 3 percent of 
such funds for local administrative costs.
    ``(h) Application.--Each local educational agency that desires to 
receive funds under this section shall submit an application to the 
State educational agency at such time, in such manner, and containing 
such information as the State educational agency may require. Each such 
application shall include a description of the agency's program to 
reduce class size by hiring additional fully qualified teachers.
    ``(i) Certification, Licensing, and Competency.--No funds made 
available under this section may be used to pay the salary of any 
teacher unless such teacher is fully qualified.
    ``(j) Definition.--As used in this section, the term `certified' 
includes certification through State or local alternative routes.

``SEC. 2402. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$2,537,000,000 for fiscal year 2002, $3,452,000,000 for fiscal year 
2003, $4,336,000,000 for fiscal year 2004, and $5,281,000,000 for each 
of fiscal years 2005 and 2006.

                      ``PART F--TROOPS TO TEACHERS

``SEC. 2501. FINDINGS.

    ``Congress finds the following:
            ``(1) School districts will need to hire more than 
        2,000,000 teachers during the first decade of the 21st century.
            ``(2) The need for teachers in the areas of mathematics, 
        science, foreign languages, special education, and bilingual 
        education, and for teachers able to teach in high-poverty 
        school districts, will be particularly high. To meet this need, 
        talented Americans of all ages should be recruited to become 
        successful, qualified teachers.
            ``(3) Nearly 13 percent of teachers of academic subjects 
        have neither an undergraduate major nor minor in their main 
        assignment fields. This problem is most acute in high-poverty 
        local educational agencies, where the out-of-field teaching 
        percentage is 22 percent.
            ``(4) The Third International Math and Science Study 
        (TIMSS) ranked United States high school seniors last among 16 
        countries in physics and next to last in mathematics. It is 
        also evident, mainly from the TIMSS data, that based on 
        academic scores, a stronger emphasis needs to be placed on the 
        academic preparation of our children in mathematics and 
        science.
            ``(5) One-fourth of high-poverty local educational agencies 
        find it very difficult to fill bilingual teaching positions, 
        and nearly half of public school teachers have students in 
        their classrooms for whom English is a second language.
            ``(6) Many career-changing professionals with strong 
        content-area skills are interested in a teaching career, but 
        they need assistance in getting the appropriate pedagogical 
        training and classroom experience.
            ``(7) The teacher placement program known as the `troops-
        to-teachers program', which was established by the Secretary of 
        Defense and the Secretary of Transportation under section 1151 
        of title 10, United States Code, has been highly successful in 
        securing high-quality teachers for teaching positions in high-
        poverty local educational agencies.

``SEC. 2502. PURPOSE.

    ``The purpose of this part is to address the need of local 
educational agencies that are high-poverty local educational agencies 
or low-performing local educational agencies for fully qualified 
teachers in particular subject areas, such as mathematics, science, 
foreign languages, bilingual education, and special education, by--
            ``(1) continuing and enhancing the troops-to-teachers 
        program for recruiting and supporting the placement of former 
        members of the Armed Forces as teachers in such local 
        educational agencies; and
            ``(2) recruiting, preparing, placing, and supporting 
        career-changing professionals who have knowledge and experience 
        that will help them become such teachers.

``SEC. 2503. CONTINUATION AND SUPPORT FOR TROOPS-TO-TEACHERS PROGRAM.

    ``(a) Continuation.--The Secretary may enter into a written 
agreement with the Secretary of Defense and the Secretary of 
Transportation, or take such other steps as the Secretary determines 
are appropriate, to ensure effective continuation of the troops-to-
teachers program, notwithstanding the duration of the program specified 
in section 1151(c)(1)(A) of title 10, United States Code.
    ``(b) Support.--Before providing any assistance under section 2504 
for a fiscal year, the Secretary shall first--
            ``(1) consult with the Secretary of Defense and the 
        Secretary of Transportation regarding the appropriate amount of 
        funding needed to continue and enhance the troops-to-teachers 
        program; and
            ``(2) upon agreement, transfer that amount to the Secretary 
        of Defense to carry out the troops-to-teachers program.

``SEC. 2504. TRANSITION OF CAREER-CHANGING PROFESSIONALS TO TEACHING.

    ``(a) Authority To Support Transition Programs.--The Secretary may 
use funds appropriated pursuant to the authorization of appropriations 
in section 2507 to award grants to, and enter into contracts or 
cooperative agreements with, institutions of higher education, 
including historically Black colleges and universities and Hispanic-
serving institutions, and public and private nonprofit agencies or 
organizations to recruit, prepare, place, and support career-changing 
professionals as teachers in local educational agencies that are high-
poverty local educational agencies or low-performing local educational 
agencies.
    ``(b) Application.--Each entity described in subsection (a) that 
desires assistance under subsection (a) shall submit an application to 
the Secretary containing such information as the Secretary may require, 
including--
            ``(1) a description of the target group of career-changing 
        professionals upon which the applicant will focus in carrying 
        out its program under this part, including a description of the 
        characteristics of that target group that shows how the 
        knowledge and experience of its members are relevant to meeting 
        the purpose of this part;
            ``(2) a description of how the applicant will identify and 
        recruit career-changing professionals for its program under 
        this part;
            ``(3) a description of the training that career-changing 
        professionals will receive in the program and how that training 
        will relate to their certification as teachers;
            ``(4) a description of how the applicant will ensure that 
        career-changing professionals are placed and teach in high-
        poverty local educational agencies or low-performing local 
        educational agencies;
            ``(5) a description of the teacher induction services 
        (which may be provided through existing induction programs) 
        that the career-changing professionals in the program will 
        receive throughout at least their first year of teaching;
            ``(6) a description of how the applicant will collaborate, 
        as needed, with other institutions, agencies, or organizations 
to recruit, train, place, and support career-changing professionals 
under this part, including evidence of the commitment of those 
institutions, agencies, or organizations to the applicant's program;
            ``(7) a description of how the applicant will evaluate the 
        progress and effectiveness of its program, including--
                    ``(A) the program's goals and objectives;
                    ``(B) the performance indicators the applicant will 
                use to measure the program's progress; and
                    ``(C) the outcome measures that will be used to 
                determine the program's effectiveness; and
            ``(8) an assurance that the applicant will provide to the 
        Secretary such information as the Secretary determines 
        necessary to evaluate the overall effectiveness of programs 
        under this part.

``SEC. 2505. USES OF FUNDS AND PERIOD OF SERVICE.

    ``(a) Authorized Activities.--Funds provided under section 2504 may 
be used for--
            ``(1) recruiting career-changing professionals, including 
        informing them of opportunities under the program and putting 
        them in contact with other institutions, agencies, or 
        organizations that will train, place, and support them;
            ``(2) training stipends and other financial incentives for 
        career-changing professionals in the program, such as moving 
        expenses, not to exceed $5,000, in the aggregate, per 
        participant;
            ``(3) assisting institutions of higher education or other 
        providers of teacher training to tailor their training to meet 
        the particular needs of career-changing professionals;
            ``(4) placement activities, including identifying high-
        poverty, low-performing local educational agencies with needs 
        for the particular skills and characteristics of the newly 
        trained career-changing professionals and assisting those 
        persons to obtain employment in those local educational 
        agencies; and
            ``(5) post-placement induction or support activities.
    ``(b) Period of Service.--A career-changing professional selected 
to participate in a program under this part who completes his or her 
training shall serve in a high-poverty local educational agency or a 
low-performing local educational agency for at least 3 years.
    ``(c) Repayment.--The Secretary shall establish such requirements 
as the Secretary determines appropriate to ensure that career-changing 
professionals who receive a training stipend or other financial 
incentive under subsection (a)(2), but who fail to complete their 
service obligation under subsection (b), repay all or a portion of such 
stipend or other incentive.

``SEC. 2506. EQUITABLE DISTRIBUTION.

    ``To the extent practicable, the Secretary shall make awards and 
enter into contracts and cooperative agreements under section 2504 to 
support teacher placement programs for career-changing professionals in 
different geographic regions of the United States.

``SEC. 2507. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to the Secretary to carry 
out this part, $40,000,000 for fiscal year 2002 and such sums as may be 
necessary for the next 4 succeeding fiscal years.

      ``PART G--EARLY CHILDHOOD EDUCATOR PROFESSIONAL DEVELOPMENT

``SEC. 2601. PURPOSE.

    ``In support of the national effort to attain the first of 
America's Education Goals, the purpose of this part is to enhance the 
school readiness of young children, particularly disadvantaged young 
children, and to prevent them from encountering difficulties once they 
enter school, by improving the knowledge and skills of early childhood 
educators who work in communities that have high concentrations of 
children living in poverty.

``SEC. 2602. PROGRAM AUTHORIZED.

    ``(a) Grants to Partnerships.--The Secretary shall carry out the 
purpose of this part by awarding grants, on a competitive basis, to 
partnerships consisting of--
            ``(1)(A) one or more institutions of higher education that 
        provide professional development for early childhood educators 
        who work with children from low-income families in high-need 
        communities; or
            ``(B) another public or private, nonprofit entity that 
        provides such professional development;
            ``(2) one or more public agencies (including local 
        educational agencies, State educational agencies, State human 
        services agencies, and State and local agencies administering 
        programs under the Child Care and Development Block Grant Act 
        of 1990), Head Start agencies, or private, nonprofit 
        organizations; and
            ``(3) to the extent feasible, an entity with demonstrated 
        experience in providing training to educators in early 
        childhood education programs in identifying and preventing 
        behavior problems or working with children identified or 
        suspected to be victims of abuse.
    ``(b) Duration and Number of Grants.--
            ``(1) Duration.--Each grant under this part shall be 
        awarded for not more than 4 years.
            ``(2) Number.--No partnership may receive more than 1 grant 
        under this part.

``SEC. 2603. APPLICATIONS.

    ``(a) Applications Required.--Any partnership that desires to 
receive a grant under this part shall submit an application to the 
Secretary at such time, in such manner, and containing such information 
as the Secretary may require.
    ``(b) Contents.--Each such application shall include--
            ``(1) a description of the high-need community to be served 
        by the project, including such demographic and socioeconomic 
        information as the Secretary may request;
            ``(2) information on the quality of the early childhood 
        educator professional development program currently conducted 
        by the institution of higher education or other provider in the 
        partnership;
            ``(3) the results of the needs assessment that the entities 
        in the partnership have undertaken to determine the most 
critical professional development needs of the early childhood 
educators to be served by the partnership and in the broader community, 
and a description of how the proposed project will address those needs;
            ``(4) a description of how the proposed project will be 
        carried out, including--
                    ``(A) how individuals will be selected to 
                participate;
                    ``(B) the types of research-based professional 
                development activities that will be carried out;
                    ``(C) how research on effective professional 
                development and on adult learning will be used to 
                design and deliver project activities;
                    ``(D) how the project will coordinate with and 
                build on, and will not supplant or duplicate, early 
                childhood education professional development activities 
                that exist in the community;
                    ``(E) how the project will train early childhood 
                educators to provide services that are based on 
                developmentally appropriate practices and the best 
                available research on child social, emotional, physical 
                and cognitive development and on early childhood 
                pedagogy;
                    ``(F) how the program will train early childhood 
                educators to meet the diverse educational needs of 
                children in the community, including children who have 
                limited English proficiency, disabilities, or other 
                special needs; and
                    ``(G) how the project will train early childhood 
                educators in identifying and preventing behavioral 
                problems or working with children identified as or 
                suspected to be victims of abuse;
            ``(5) a description of--
                    ``(A) the specific objectives that the partnership 
                will seek to attain through the project, and how the 
                partnership will measure progress toward attainment of 
                those objectives; and
                    ``(B) how the objectives and the measurement 
                activities align with the performance indicators 
                established by the Secretary under section 2606(a);
            ``(6) a description of the partnership's plan for 
        institutionalizing the activities carried out under the 
        project, so that the activities continue once Federal funding 
        ceases;
            ``(7) an assurance that, where applicable, the project will 
        provide appropriate professional development to volunteers 
        working directly with young children, as well as to paid staff; 
        and
            ``(8) an assurance that, in developing its application and 
        in carrying out its project, the partnership has consulted 
        with, and will consult with, relevant agencies, early childhood 
        educator organizations, and early childhood providers that are 
        not members of the partnership.

``SEC. 2604. SELECTION OF GRANTEES.

    ``(a) Criteria.--The Secretary shall select partnerships to receive 
funding on the basis of the community's need for assistance and the 
quality of the applications.
    ``(b) Geographic Distribution.--In selecting partnerships, the 
Secretary shall seek to ensure that communities in different regions of 
the Nation, as well as both urban and rural communities, are served.

``SEC. 2605. USES OF FUNDS.

    ``(a) In General.--Each partnership receiving a grant under this 
part shall use the grant funds to carry out activities that will 
improve the knowledge and skills of early childhood educators who are 
working in early childhood programs that are located in high-need 
communities and serve concentrations of children from low-income 
families.
    ``(b) Allowable Activities.--Such activities may include--
            ``(1) professional development for individuals working as 
        early childhood educators, particularly to familiarize those 
        individuals with the application of recent research on child, 
        language, and literacy development and on early childhood 
        pedagogy;
            ``(2) professional development for early childhood 
        educators in working with parents, based on the best current 
        research on child social, emotional, physical and cognitive 
        development and parent involvement, so that the educators can 
        prepare their children to succeed in school;
            ``(3) professional development for early childhood 
        educators to work with children who have limited English 
        proficiency, disabilities, and other special needs;
            ``(4) professional development to train early childhood 
        educators in identifying and preventing behavioral problems in 
        children or working with children identified or suspected to be 
        victims of abuse;
            ``(5) activities that assist and support early childhood 
        educators during their first three years in the field;
            ``(6) development and implementation of early childhood 
        educator professional development programs that make use of 
        distance learning and other technologies;
            ``(7) professional development activities related to the 
        selection and use of screening and diagnostic assessments to 
        improve teaching and learning; and
            ``(8) data collection, evaluation, and reporting needed to 
        meet the requirements of this part relating to accountability.

``SEC. 2606. ACCOUNTABILITY.

    ``(a) Performance Indicators.--Simultaneously with the publication 
of any application notice for grants under this part, the Secretary 
shall announce performance indicators for this part, which shall be 
designed to measure--
            ``(1) the quality and accessibility of the professional 
        development provided;
            ``(2) the impact of that professional development on the 
        early childhood education provided by the individuals who are 
        trained; and
            ``(3) such other measures of program impact as the 
        Secretary determines appropriate.
    ``(b) Annual Reports; Termination.--
            ``(1) Annual reports.--Each partnership receiving a grant 
        under this part shall report annually to the Secretary on the 
        partnership's progress against the performance indicators.
            ``(2) Termination.--The Secretary may terminate a grant 
        under this part at any time if the Secretary determines that 
        the partnership is not making satisfactory progress against the 
        indicators.

``SEC. 2607. COST-SHARING.

    ``(a) In General.--Each partnership shall provide, from other 
sources, which may include other Federal sources--
            ``(1) at least 50 percent of the total cost of its project 
        for the grant period; and
            ``(2) at least 20 percent of the project cost in each year.
    ``(b) Acceptable Contributions.--A partnership may meet the 
requirement of subsection (a) through cash or in-kind contributions, 
fairly valued.
    ``(c) Waivers.--The Secretary may waive or modify the requirements 
of subsection (a) in cases of demonstrated financial hardship.

``SEC. 2608. DEFINITIONS.

    ``In this part:
            ``(1) High-need community.--
                    ``(A) In general.--The term `high-need community' 
                means--
                            ``(i) a municipality, or a portion of a 
                        municipality, in which at least 50 percent of 
                        the children are from low-income families; or
                            ``(ii) a municipality that is one of the 10 
                        percent of municipalities within the State 
                        having the greatest numbers of such children.
                    ``(B) Determination.--In determining which 
                communities are described in subparagraph (A), the 
                Secretary shall use such data as the Secretary 
                determines are most accurate and appropriate.
            ``(2) Low-income family.--The term `low-income family' 
        means a family with an income below the poverty line (as 
        defined by the Office of Management and Budget and revised 
        annually in accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a 
        family of the size involved for the most recent fiscal year for 
        which satisfactory data are available.
            ``(3) Early childhood educator.--The term `early childhood 
        educator' means a person providing or employed by a provider of 
        non-residential child care services (including center-based, 
        family-based, and in-home child care services) for compensation 
        that is legally operating under State law, and that complies 
        with applicable State and local requirements for the provision 
        of child care services to children at any age from birth 
        through kindergarten.

``SEC. 2609. FEDERAL COORDINATION.

    ``The Secretary and the Secretary of Health and Human Services 
shall coordinate activities under this part and other early childhood 
programs administered by the two Secretaries.

``SEC. 2610. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated $100,000,000 for fiscal year 2002 and such sums as 
may be necessary for each of the 6 succeeding fiscal years.

               ``PART H--PRINCIPAL LEADERSHIP DEVELOPMENT

``SEC. 2701. PROFESSIONAL DEVELOPMENT FOR PRINCIPALS AS LEADERS OF 
              SCHOOL REFORM.

    ``(a) Competitive Grants.--The Secretary is authorized to award, on 
a competitive basis, grants to eligible partnerships--
            ``(1) consisting of--
                    ``(A) one or more institutions of higher education 
                that provide professional development for principals 
                and other school administrators; and
                    ``(B) one or more local educational agencies; and
            ``(2) that may include other entities, agencies, and 
        organizations, such as a State educational agency, a State 
        agency for higher education, and professional organizations for 
        principals, administrators, teachers, and parents.
    ``(b) Application.--An eligible partnership that desires to receive 
a grant under this section shall submit an application to the Secretary 
at such time, in such form, and containing such information as the 
Secretary may require. Each such application shall include--
            ``(1) a description of the activities the partnership will 
        carry out to meet the purpose of this part;
            ``(2) a description of how those activities will build on 
        and be coordinated with other professional development 
        activities, including activities under this title and title II 
        of the Higher Education Act of 1965;
            ``(3) a description of how principals, teachers, and other 
        interested parties were involved in developing the application 
        and will be involved in planning and carrying out the 
        activities under this section; and
            ``(4) a description of how the professional development 
        will result in the acquisition of a license, degree, or 
        continuing education unit.
    ``(c) Use of Funds.--An eligible partnership that receives a grant 
under this section shall use the grant funds to provide professional 
development to principals and other school administrators to enable 
them to be effective school leaders and prepare all students to achieve 
to challenging State content and student performance standards, 
including professional development on--
            ``(1) comprehensive school reform;
            ``(2) leadership skills;
            ``(3) recruitment, assignment, retention, and evaluation of 
        teacher and other instructional staff;
            ``(4) State content standards;
            ``(5) effective instructional practice;
            ``(6) using smaller classes effectively; and
            ``(7) parental and community involvement.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this part, $100,000,000 for fiscal year 2002, 
and such sums as may be necessary for each of the 4 succeeding fiscal 
years.

``PART I--COMPETITIVE GRANTS TO ESTABLISH PROGRAMS FOR TEACHER QUALITY 
                              IMPROVEMENT

``SEC. 2801. ALLOTMENTS TO STATES.

    ``(a) In General.--The Secretary is authorized to make grants to 
eligible State educational agencies for the improvement of teaching and 
learning through sustained and intensive high-quality professional 
development, mentoring, and recruitment activities (and covered 
recruitment, at the election of a local educational agency) at the 
State and local levels. Each grant shall consist of the allotment 
determined for the State under subsection (b).
    ``(b) Determination of Amount of Allotment.--
            ``(1) Reservation of funds.--
                    ``(A) In general.--From the total amount made 
                available to carry out this part for any fiscal year, 
                the Secretary shall reserve--
                            ``(i) \1/2\ of 1 percent for allotments for 
                        the outlying areas to be distributed among 
                        those outlying areas on the basis of their 
                        relative need, as determined by the Secretary, 
                        for professional development, mentoring, and 
                        recruitment activities carried out in 
                        accordance with the purposes of this part; and
                            ``(ii) \1/2\ of 1 percent for the Secretary 
                        of the Interior for programs carried out in 
                        accordance with the purposes of this part to 
                        provide professional development, mentoring, 
                        and recruitment activities for teachers and 
                        other staff in schools operated or funded by 
                        the Bureau of Indian Affairs.
                    ``(B) Limitation.--Notwithstanding subparagraph 
                (A), the Secretary shall not reserve, for either the 
                outlying areas under subparagraph (A)(i) or the schools 
                operated or funded by the Bureau of Indian Affairs 
                under subparagraph (A)(ii), more than the amount 
                reserved for those areas or schools for fiscal year 
                2000 under the authority described in paragraph 
                (2)(A)(i).
            ``(2) State allotments.--
                    ``(A) Hold harmless.--
                            ``(i) In general.--Subject to subparagraph 
                        (B), from the total amount made available to 
                        carry out this part for any fiscal year and not 
                        reserved under paragraph (1), the Secretary 
                        shall allot to each of the 50 States, the 
                        District of Columbia, and the Commonwealth of 
                        Puerto Rico an amount equal to the amount that 
                        the State received for fiscal year 2000 under 
                        section 2202(b) of this Act (as in effect on 
                        the day before the date of enactment of the 
                        Leave No Child Behind Act of 2001).
                            ``(ii) Ratable reduction.--If the total 
                        amount made available to carry out this part 
                        for any fiscal year and not reserved under 
                        paragraph (1) is insufficient to pay the full 
                        amounts that all States are eligible to receive 
                        under clause (i) for any fiscal year, the 
                        Secretary shall ratably reduce such amounts for 
                        such fiscal year.
                    ``(B) Allotment of additional funds.--
                            ``(i) In general.--Subject to clause (ii), 
                        for any fiscal year for which the total amount 
                        made available to carry out this part and not 
                        reserved under paragraph (1) exceeds the total 
                        amount made available to the 50 States, the 
                        District of Columbia, and the Commonwealth of 
                        Puerto Rico for fiscal year 2000 under the 
                        authority described in subparagraph (A)(i), the 
                        Secretary shall allot to each of those States 
                        the sum of--
                                    ``(I) an amount that bears the same 
                                relationship to 40 percent of the 
                                excess amount as the number of 
                                individuals age 5 through 17 in the 
                                State, as determined by the Secretary 
                                on the basis of the most recent 
                                satisfactory data, bears to the number 
                                of those individuals in all such 
                                States, as so determined; and
                                    ``(II) an amount that bears the 
                                same relationship to 60 percent of the 
                                excess amount as the number of 
                                individuals age 5 through 17 from 
                                families with incomes below the poverty 
                                line in the State, as determined by the 
                                Secretary on the basis of the most 
                                recent satisfactory data, bears to the 
                                number of those individuals in all such 
                                States, as so determined.
                            ``(ii) Exception.--No State receiving an 
                        allotment under clause (i) may receive less 
                        than \1/2\ of 1 percent of the total excess 
                        amount allotted under clause (i) for a fiscal 
                        year.
            ``(3) Reallotment.--If any State described in paragraph (2) 
        does not apply for an allotment under paragraph (2) for any 
        fiscal year, the Secretary shall reallot such amount to the 
        remaining such States in accordance with paragraph (2).

``SEC. 2802. STATE APPLICATIONS.

    ``(a) Applications Required.--
            ``(1) In general.--Each State desiring to receive a grant 
        under this part shall submit an application to the Secretary at 
        such time, in such manner, and containing such information as 
        the Secretary may reasonably require.
            ``(2) Development.--The State educational agency shall 
        develop the State application--
                    ``(A) in consultation with the State agency for 
                higher education, community-based and other nonprofit 
                organizations, and institutions of higher education; 
                and
                    ``(B) with the extensive participation of teachers, 
                teacher educators, school administrators, and content 
                specialists.
    ``(b) Contents.--Each such application shall include--
            ``(1) a description of the State's shortages of fully 
        qualified teachers relating to high-poverty school districts 
        and high-need academic subjects (as such districts or subjects 
        are determined by the State);
            ``(2) an assessment of the need for professional 
        development for veteran teachers in the State and the need for 
        strong mentoring programs for beginning teachers that are--
                    ``(A) developed with the involvement of teachers; 
                and
                    ``(B) based on student achievement data in the core 
                academic subjects and other indicators of the need for 
                professional development and mentoring programs;
            ``(3) a description of how the State educational agency 
        will use funds made available under this part to improve the 
        quality of the State's teaching force, eliminate the use of 
        out-of-field placement of teachers, and eliminate the use of 
        teachers hired with emergency or other provisional credentials 
        by setting numerical, annual improvement goals, and meet the 
        requirements of this section;
            ``(4) a description of how the State educational agency 
        will align activities assisted under this part with State 
        content and student performance standards, and State 
        assessments, by setting numerical, annual improvement goals;
            ``(5) a description of how the State educational agency 
        will coordinate activities funded under this part with 
        professional development, mentoring, and recruitment activities 
        that are supported with funds from other relevant Federal and 
        non-Federal programs;
            ``(6) a plan, developed with the extensive participation of 
        teachers, for addressing long-term teacher recruitment, 
        retention, professional development, and mentoring needs, which 
        may include--
                    ``(A) providing technical assistance to help school 
                districts reform hiring and employment practices to 
                improve the recruitment and retention of fully 
                qualified teachers, especially with respect to high-
                poverty schools; and
                    ``(B) establishing State or regional partnerships 
                to address teacher shortages;
            ``(7) a description of how the State educational agency 
        will assist local educational agencies in implementing 
        effective and sustained professional development and mentoring 
        activities and high-quality recruitment activities under this 
        part;
            ``(8) an assurance that the State will consistently monitor 
        the progress of each local educational agency and school in the 
        State in achieving the goals specified in the information 
        submitted under paragraphs (1) through (7);
            ``(9) a description of how the State educational agency 
        will work with recipients of grants awarded for recruitment 
        activities under section 2805(b) to ensure that recruits who 
        successfully complete a teacher corps program will be certified 
        or licensed; and
            ``(10) the assurances and description referred to in 
        section 2810.
    ``(c) Approval.--The Secretary shall, using a peer-review process, 
approve a State application if the application meets the requirements 
of this section and holds reasonable promise of achieving the purposes 
of this part.

``SEC. 2803. STATE USE OF FUNDS.

    ``(a) In General.--Of the funds allotted to a State under section 
2801 for a fiscal year--
            ``(1) not more than 6 percent shall be used by the State 
        educational agency to carry out State activities described in 
        section 2804, or for the administration of this part (other 
        than the administration of section 2809) except that not more 
        than 3 percent shall be used for the administration of this 
        part;
            ``(2) 60 percent shall be used by the State educational 
        agency to provide grants to local educational agencies under 
        section 2805(a) for professional development and mentoring 
        (except as provided in section 2807(c));
            ``(3) 30 percent shall be used by the State educational 
        agency--
                    ``(A) except as provided in subparagraph (B), to 
                provide grants to recruitment partnerships under 
                section 2805(b) for recruitment activities; or
                    ``(B) if the State educational agency determines 
                that all elementary school and secondary school 
                teachers in the State that are teaching core academic 
                subjects are fully qualified, to provide the grants 
                described in paragraph (2); and
            ``(4) 4 percent (or 4 percent of the amount the State would 
        have been allotted if the appropriation for this part were 
        $1,730,000,000, whichever is greater) shall be used by the 
        State agency for higher education to provide grants to 
        partnerships under section 2809.
    ``(b) Priority for Professional Development and Mentoring in 
Mathematics and Science.--
            ``(1) Priority.--
                    ``(A) Appropriations of not more than 
                $300,000,000.--Except as provided in section 2807(c), 
                for any fiscal year for which the appropriation for 
                this part is $300,000,000 or less, each State 
                educational agency that receives funds under this part, 
                working jointly with the State agency for higher 
                education, shall ensure that all funds received under 
                this part are used for--
                            ``(i) professional development and 
                        mentoring in mathematics and science that are 
                        aligned with State content and student 
                        performance standards; and
                            ``(ii) recruitment activities to attract 
                        fully qualified math and science teachers to 
                        high-poverty schools.
                    ``(B) Appropriations of more than $300,000,000.--
                Except as provided in section 2807(c), for any fiscal 
                year for which the appropriation for this part is 
                greater than $300,000,000, the State educational agency 
                and the State agency for higher education shall jointly 
                ensure that the total amount of funds that the agencies 
                receive under this part and that the agencies use for 
                activities described in subparagraph (A) is at least as 
                great as the allotment the State would have received if 
                that appropriation had been $300,000,000.
            ``(2) Interdisciplinary activities.--A State may use funds 
        received under this part for activities that focus on more than 
        1 core academic subject, and apply the funds toward meeting the 
        requirements of paragraph (1), if the activities include a 
        strong focus on improving instruction in mathematics or 
        science.
            ``(3) Additional funds.--Except as provided in section 
        2807(c), each State educational agency that receives funds 
        under this part and the State agency for higher education shall 
        jointly ensure that any portion of the funds that exceeds the 
        amount required by paragraph (1) to be spent on activities 
        described in paragraph (1)(A) is used to provide--
                    ``(A) professional development and mentoring in 1 
                or more of the core academic subjects that are aligned 
                with State content and student performance standards; 
                and
                    ``(B) recruitment activities involving teachers of 
                1 or more of the core academic subjects.

``SEC. 2804. STATE LEVEL ACTIVITIES.

    ``(a) Activities.--Each State educational agency that receives a 
grant described in section 2801 shall use the funds made available 
under section 2803(a)(1) to carry out statewide strategies and 
activities to improve teacher quality, including--
            ``(1) establishing, expanding, or improving alternative 
        routes to State certification or licensing of teachers, for 
        highly qualified individuals with a baccalaureate degree, mid-
        career professionals from other occupations, or 
        paraprofessionals, that are at least as rigorous as the State's 
        standards for initial certification or licensing of teachers;
            ``(2) developing or improving systems to evaluate the 
        effectiveness of professional development, mentoring, and 
        recruitment activities in improving teacher quality, skills, 
        and content knowledge, and the impact of the professional 
        development, mentoring, and recruitment activities on 
        increasing student academic achievement and student performance 
        with performance measures drawn from assessments that 
        objectively measure student achievement against State 
        performance standards;
            ``(3) funding projects to promote reciprocity of teacher 
        certification or licensure between or among States;
            ``(4) providing assistance to local educational agencies to 
        reduce out-of-field placements and the use of emergency 
        credentials;
            ``(5) supporting certification by the National Board for 
        Professional Teaching Standards of teachers who are teaching or 
        will teach in high-poverty schools;
            ``(6) providing assistance to local educational agencies in 
        implementing effective programs of recruitment activities, and 
        professional development and mentoring, including supporting 
        efforts to encourage and train teachers to become mentor 
        teachers;
            ``(7) increasing the rigor and quality of State 
        certification and licensure tests for individuals entering the 
        field of teaching, including subject matter tests for 
        elementary school, middle school, and secondary school 
        teachers; and
            ``(8) implementing teacher recognition programs.
    ``(b) Coordination.--A State that receives a grant to carry out 
this part and a grant under section 202 of the Higher Education Act of 
1965 shall coordinate the activities carried out under this section and 
the activities carried out under that section 202.

``SEC. 2805. GRANTS TO LOCAL EDUCATIONAL AGENCIES.

    ``(a) Grants for Professional Development and Mentoring 
Activities.--
            ``(1) In general.--A State educational agency that receives 
        a grant described in section 2801 shall use the funds made 
        available under section 2803(a)(2) (and any funds made 
        available under section 2803(a)(3)(B)) to make grants to 
        eligible local educational agencies, from allocations made 
        under paragraph (2), to carry out the activities described in 
        section 2807(a) (except as provided in section 2807(c)).
            ``(2) Allocations.--The State educational agency shall 
        allocate to each eligible local educational agency the sum of--
                    ``(A) an amount that bears the same relationship to 
                20 percent of the funds described in paragraph (1) as 
                the number of individuals enrolled in public and 
                private nonprofit elementary schools and secondary 
                schools in the geographic area served by the agency 
                bears to the number of those individuals in the 
                geographic areas served by all the local educational 
                agencies in the State; and
                    ``(B) an amount that bears the same relationship to 
                80 percent of the funds as the number of individuals 
                age 5 through 17 from families with incomes below the 
                poverty line, in the geographic area served by the 
                agency, as determined by the Secretary on the basis of 
                the most recent satisfactory data, bears to the number 
                of those individuals in the geographic areas served by 
                all the local educational agencies in the State, as so 
                determined.
            ``(3) Eligibility.--To be eligible to receive a grant from 
        a State educational agency under this subsection, a local 
educational agency shall serve schools that include--
                    ``(A) high-poverty schools;
                    ``(B) schools that need support for improving 
                teacher quality based on low achievement of students 
                served;
                    ``(C) schools that have low teacher retention 
                rates;
                    ``(D) schools that need to improve or expand the 
                knowledge and skills of new and veteran teachers in 
                high-priority content areas;
                    ``(E) schools that have high out-of-field placement 
                rates; or
                    ``(F) high-poverty schools that have been 
                identified for improvement in accordance with section 
                1116.
            ``(4) Equitable geographic distribution.--A State 
        educational agency shall ensure an equitable distribution of 
        grants under this subsection among eligible local educational 
        agencies serving urban and rural areas.
    ``(b) Grants for Recruitment Activities.--
            ``(1) In general.--A State educational agency that receives 
        a grant under section 2801 shall use the funds made available 
        under section 2803(a)(3)(A) to make grants to eligible 
        recruitment partnerships, on a competitive basis, to carry out 
        the recruitment activities and meet requirements described in 
        section 2807(b).
            ``(2) Eligibility.--
                    ``(A) In general.--To be eligible to receive a 
                grant from a State educational agency under this 
                subsection, a recruitment partnership--
                            ``(i) shall include an eligible local 
                        educational agency, or a consortium of eligible 
                        local educational agencies;
                            ``(ii) shall include an institution of 
                        higher education, a tribal college, or a 
                        community college; and
                            ``(iii) may include other members, such as 
                        a nonprofit organization or professional 
                        education organization.
                    ``(B) Eligible local educational agency.--In 
                subparagraph (A), the term `eligible local educational 
                agency' means a local educational agency that receives 
                assistance under part A of title I, and meets any 
                additional eligibility criteria that the appropriate 
                State educational agency may establish.
            ``(3) Equitable geographic distribution.--A State 
        educational agency shall ensure an equitable distribution of 
        grants under this subsection among eligible recruitment 
        partnerships serving urban and rural areas.

``SEC. 2806. LOCAL APPLICATIONS.

    ``(a) In General.--A local educational agency or a recruitment 
partnership seeking to receive a grant from a State educational agency 
under section 2805 to carry out activities described in section 2807 
shall submit an application to the State educational agency at such 
time, in such manner, and containing such information as the State 
educational agency may reasonably require.
    ``(b) Contents Relating to Professional Development and Mentoring 
Activities.--If the local educational agency seeks a grant under 
section 2805(a) to carry out activities described in section 2807(a), 
the local application described in subsection (a) shall include in the 
application, at a minimum, the following:
            ``(1) A description of how the local educational agency 
        intends to use the funds provided through the grant to carry 
        out activities that meet requirements described in section 
        2807(a).
            ``(2) An assurance that the local educational agency will 
        target the funds to high-poverty, low-performing schools served 
        by the local educational agency that--
                    ``(A) have the lowest proportions of qualified 
                teachers;
                    ``(B) are identified for school improvement and 
                corrective action under section 1116; or
                    ``(C) are identified for school improvement in 
                accordance with other measures of school quality as 
                determined and documented by the local educational 
                agency.
            ``(3) A description of how the local educational agency 
        will coordinate professional development and mentoring 
        activities described in section 2807(a) with professional 
        development and mentoring activities provided through other 
        Federal, State, and local programs, including programs 
        authorized under--
                    ``(A) titles I, IV, and V, and part A of title VII; 
                and
                    ``(B) where applicable, the Individuals with 
                Disabilities Education Act, the Carl D. Perkins 
                Vocational and Technical Education Act of 1998, and 
                title II of the Higher Education Act of 1965.
            ``(4) A description of how the local educational agency 
        will integrate funds received to carry out activities described 
        in section 2807(a) with funds received under title V that are 
        used for professional development and mentoring in order to 
        carry out professional development and mentoring activities 
        that--
                    ``(A) train teachers, paraprofessionals, 
                counselors, pupil services personnel, administrators, 
                and other school staff, including school library media 
                specialists, in how to use technology to improve 
                learning and teaching; and
                    ``(B) take into special consideration the different 
                learning needs for, and exposures to, technology for 
                all students, including females, students with 
                disabilities, students with limited English 
                proficiency, and students who have economic and 
                educational disadvantages.
            ``(5) A description of how the local application was 
        developed with extensive participation of teachers, 
        paraprofessionals, principals, and parents.
            ``(6) A description of how the professional development and 
        mentoring activities described in section 2807(a) will address 
        the ongoing professional development and mentoring of teachers, 
        paraprofessionals, counselors, pupil services personnel, 
        administrators, and other school staff, including school 
        library media specialists.
            ``(7) A description of how the professional development and 
        mentoring activities described in section 2807(a) will have a 
        substantial, measurable, and positive impact on student 
        achievement and how the activities will be used as part of a 
        broader strategy to eliminate the achievement gap that 
        separates low-income and minority students from other students.
            ``(8) A description of how the local educational agency 
        will address the needs of teachers of students with 
        disabilities, students with limited English proficiency, and 
        other students with special needs.
            ``(9) A description of how the local educational agency 
        will provide training to teachers to enable the teachers to 
        work with parents, involve parents in their child's education, 
        and encourage parents to become collaborators with schools in 
        promoting their child's education.
            ``(10) The assurances and description referred to in 
        section 2811, with respect to professional development and 
        mentoring activities.
    ``(c) Development and Contents Relating to Recruitment 
Activities.--If an eligible local educational agency (as defined in 
section 2805(b)) seeks a grant under section 2805(b) to carry out 
activities described in section 2807(b)--
            ``(1) the eligible local educational agency shall enter 
        into a recruitment partnership, which shall jointly prepare and 
        submit the local application described in subsection (a); and
            ``(2) at a minimum, the application shall include--
                    ``(A) a description of how the recruitment 
                partnership will meet the teacher corps program 
                requirements described in section 2808;
                    ``(B) a description of the individual and 
                collective responsibilities of members of the 
                recruitment partnership in meeting the requirements and 
                goals of a teacher corps program described in section 
                2808;
                    ``(C) information demonstrating that the State 
                agency responsible for teacher licensure or 
                certification in the State in which a recruitment 
                partnership is established will--
                            ``(i) ensure that a corps member who 
                        successfully completes a teacher corps program 
                        will have the academic requirements necessary 
                        for initial certification or licensure as a 
                        teacher in the State; and
                            ``(ii) work with the recruitment 
                        partnership to ensure the partnership uses 
                        high-quality methods and establishes high-
                        quality requirements concerning alternative 
                        routes to certification or licensing, in order 
                        to meet State requirements for certification or 
                        licensure; and
                    ``(D) the assurances and description referred to in 
                section 2811, with respect to recruitment activities.
    ``(d) Contents Relating to Covered Recruitment.--If the local 
educational agency seeks a grant under section 2805(a) to carry out 
activities described in section 2807(c), the local application 
described in subsection (a) shall include, at a minimum, a description 
of the activities and the manner in which the activities will 
contribute to accomplishing the objectives of section 2811, and how the 
activities are in compliance with the requirements of title I.
    ``(e) Approval.--A State educational agency shall approve a local 
educational agency's or recruitment partnership's application under 
this section only if the State educational agency determines that the 
application is of high quality and holds reasonable promise of 
achieving the purposes of this part.

``SEC. 2807. LOCAL ACTIVITIES.

    ``(a) Professional Development and Mentoring Activities.--Except as 
provided in subsection (c), each local educational agency receiving a 
grant under section 2805(a) shall use the funds made available through 
the grant to carry out activities that--
            ``(1) are professional development activities (as defined 
        in section 2812(12)(A)) that--
                    ``(A) improve teacher knowledge of--
                            ``(i) 1 or more of the core academic 
                        subjects;
                            ``(ii) effective instructional strategies, 
                        methods, and skills for improving student 
                        achievement in core academic subjects, 
                        including strategies for identifying and 
                        eliminating gender and racial bias;
                            ``(iii) the use of data and assessments to 
                        inform teachers about and thereby help teachers 
                        improve classroom practice; and
                            ``(iv) innovative instructional 
                        methodologies designed to meet the 
diverse learning needs of individual students, including methodologies 
that integrate academic and technical skills and applied learning (such 
as service learning), methodologies for interactive and 
interdisciplinary team teaching, and other alternative teaching 
strategies, such as strategies for experiential learning, career-
related education, and environmental education, that integrate real 
world applications into the core academic subjects;
                    ``(B) provide teachers and paraprofessionals (and 
                other staff as appropriate) with information on recent 
                research findings on how children learn to read and 
                with staff development on research-based instructional 
                strategies for the teaching of reading;
                    ``(C) replicate effective instructional practices 
                that involve collaborative groups of teachers and 
                administrators from the same school or district, using 
                strategies such as--
                            ``(i) provision of dedicated time for 
                        collaborative lesson planning and curriculum 
                        development meetings;
                            ``(ii) provision of collaborative 
                        professional development experiences for 
                        veteran teachers based on the standards in the 
                        core academic subjects of the National Board 
                        for Professional Teaching Standards;
                            ``(iii) consultation with exemplary 
                        teachers;
                            ``(iv) provision of short-term and long-
                        term visits to classrooms and schools;
                            ``(v) participation of teams of teachers in 
                        summer institutes and summer immersion 
                        activities that are focused on preparing 
                        teachers to enable all students to meet high 
                        standards in 1 or more of the core academic 
                        subjects; and
                            ``(vi) establishment and maintenance of 
                        local professional networks that provide a 
                        forum for interaction among teachers and 
                        administrators and that allow for the exchange 
of information on advances in content knowledge and teaching skills;
                    ``(D) provide for the participation of 
                paraprofessionals, pupil services personnel, and other 
                school staff;
                    ``(E) include strategies for fostering meaningful 
                parental involvement and relations with parents to 
                encourage parents to become collaborators in their 
                children's education, for improving classroom 
                management and discipline, and for integrating 
                technology into a curriculum;
                    ``(F) as a whole, are regularly evaluated for their 
                impact on increased teacher effectiveness and improved 
                student achievement, with the findings of the 
                evaluations used to improve the quality of activities 
                described in this paragraph;
                    ``(G) include, to the extent practicable, the 
                establishment of a partnership with an institution of 
                higher education, another local educational agency, a 
                teacher organization, or another organization, for the 
                purpose of carrying out activities described in this 
                paragraph; and
                    ``(H) include ongoing and school-based support for 
                activities described in this paragraph, such as support 
                for peer review, coaching, or study groups, and the 
                provision of release time as needed for the activities; 
                and
            ``(2) are mentoring activities.
    ``(b) Recruitment Activities.--Each recruitment partnership 
receiving a grant under section 2805(b) shall use the funds made 
available through the grant to carry out recruitment activities 
described in section 2808.
    ``(c) Covered Recruitment.--A local educational agency receiving a 
grant under section 2805(a) for a fiscal year may elect to use a 
portion of the funds made available through the grant, but not more 
than the agency's share of 10 percent of the funds allotted to the 
State involved under section 2801 for the fiscal year, to carry out 
recruitment (including recruitment through the use of signing bonuses 
and other financial incentives) and hiring of fully qualified teachers.

``SEC. 2808. RECRUITMENT ACTIVITIES THROUGH A TEACHER CORPS PROGRAM.

    ``(a) Teacher Corps Program Requirements.--
            ``(1) Recruitment.--A recruitment partnership that receives 
        a grant under section 2805(b) shall broadly recruit and screen 
        for a teacher corps a highly qualified pool of candidates who 
        demonstrate the potential to become effective teachers. Each 
        candidate shall meet--
                    ``(A) standards to ensure that--
                            ``(i) each corps member possesses 
                        appropriate, high-level credentials and 
                        presents the likelihood of becoming an 
                        effective teacher; and
                            ``(ii) each group of corps members includes 
                        people who have expertise in academic subjects 
                        and otherwise meet the specific needs of the 
                        district to be served; and
                    ``(B) any additional standard that the recruitment 
                partnership establishes to enhance the quality and 
                diversity of candidates and to meet the academic and 
                grade level needs of the partnership.
            ``(2) Required curriculum and placement.--Members of the 
        recruitment partnership shall work together to plan and develop 
        a program that includes--
                    ``(A) a rigorous curriculum that includes a 
                preservice training program (incorporating innovative 
                approaches to preservice training, such as distance 
                learning), for a period not to exceed 1 year, that 
                provides corps members with the skills and knowledge 
                necessary to become effective teachers, by--
                            ``(i) requiring completed course work in 
                        basic areas of teaching, such as principles of 
                        learning and child development, effective 
                        teaching strategies, assessments, and classroom 
                        management, and in the pedagogy related to the 
                        academic subjects in which a corps member 
                        intends to teach;
                            ``(ii) providing extensive preparation in 
                        the pedagogy of reading to corps members, 
                        including preparation components that focus 
                        on--
                                    ``(I) understanding the psychology 
                                of reading, and human growth and 
                                development;
                                    ``(II) understanding the structure 
                                of the English language; and
                                    ``(III) learning and applying the 
                                best teaching methods to all aspects of 
                                reading instruction;
                            ``(iii) providing training in the use of 
                        technology as a tool to enhance a corps 
                        member's effectiveness as a teacher and improve 
                        the achievement of the corps member's students; 
                        and
                            ``(iv) focusing on the teaching skills and 
                        knowledge that corps members need to enable all 
                        students to meet the State's highest 
                        challenging content and student performance 
                        standards;
                    ``(B) placement of a corps member with the local 
                educational agency participating in the recruitment 
                partnership, in a teaching internship that--
                            ``(i) includes intensive mentoring;
                            ``(ii) provides a reduced teaching load; 
                        and
                            ``(iii) provides regular opportunities for 
                        the corps member to co-teach with a mentor 
                        teacher, observe other teachers, and be 
                        observed and coached by other teachers;
                    ``(C) individualized inservice training over the 
                course of the corps member's first 2 years of full-time 
                teaching that provides--
                            ``(i) high-quality professional 
                        development, coordinated jointly by members of 
                        the recruitment partnership, and the course 
work necessary to provide additional or supplementary knowledge to meet 
the specific needs of the corps member; and
                            ``(ii) ongoing mentoring by a teacher who 
                        meets the criteria for a mentor teacher 
                        described in paragraph (4)(B), including the 
                        requirements of section 2812(10); and
                    ``(D) collaboration between the recruitment 
                partnership and local community student and parent 
                groups, to assist corps members in enhancing their 
                understanding of the community in which the members are 
                placed.
            ``(3) Evaluation.--A recruitment partnership shall evaluate 
        a corps member's progress in course study and classroom 
        practice at regular intervals. Each recruitment partnership 
        shall have a formal process to identify corps members who seem 
        unlikely to become effective teachers and terminate their 
        participation in the program.
            ``(4) Mentor teachers.--
                    ``(A) In general.--A recruitment partnership shall 
                develop a plan for the program, which shall include 
                strategies for identifying, recruiting, training, and 
                providing ongoing support to individuals who will serve 
                as mentor teachers to corps members.
                    ``(B) Mentor teacher requirements.--The plan 
                described in subparagraph (A) shall specify the 
                criteria that the recruitment partnership will use to 
                identify and select mentor teachers and, at a minimum, 
                shall--
                            ``(i) require a mentor teacher to meet the 
                        requirements of section 2812(10); and
                            ``(ii) require that consideration be given 
                        to teachers with national board certification.
                    ``(C) Compensation.--The plan shall specify the 
                compensation--
                            ``(i) for mentor teachers, including 
                        monetary compensation, release time, or a 
                        reduced work load to ensure that mentor 
                        teachers can provide ongoing support for corps 
                        members; and
                            ``(ii) for corps members, including salary 
                        levels and the stipends, if any, that will be 
                        provided during a corps member's preservice 
                        training.
            ``(5) Assurances.--The plan shall include assurances that--
                    ``(A) a corps member will be assigned to teach only 
                academic subjects and grade levels for which the member 
                is fully qualified;
                    ``(B) corps members, to the extent practicable, 
                will be placed in schools with teams of corps members; 
                and
                    ``(C) every mentor teacher will be provided 
                sufficient time to meet the needs of the corps members 
                assigned to the mentor teacher.
    ``(b) Corps Member Qualifications.--
            ``(1) Candidates intending to teach in elementary 
        schools.--At a minimum, to be accepted by a teacher corps 
        program, a candidate who intends to teach at the elementary 
        school level shall--
                    ``(A) have a bachelor's degree;
                    ``(B) possess an outstanding commitment to working 
                with children and youth;
                    ``(C) possess a strong professional or 
                postsecondary record of achievement; and
                    ``(D) pass all basic skills and subject matter 
                tests required by the State for teacher certification 
                or licensure.
            ``(2) Candidates intending to teach in secondary schools.--
        At a minimum, to be accepted by a teacher corps program, a 
        candidate who intends to teach at the secondary school level 
        shall--
                    ``(A) meet the requirements described in paragraph 
                (1); and
                    ``(B)(i) possess at least an academic major or 
                postsecondary degree in each academic subject in which 
                the candidate intends to teach; or
                    ``(ii) if the candidate did not major or earn a 
                postsecondary degree in an academic subject in which 
                the candidate intends to teach, have completed a 
                rigorous course of instruction in that subject that is 
                equivalent to having majored in the subject.
            ``(3) Special rule.--Notwithstanding paragraph (2)(B), the 
        recruitment partnership may consider the candidate to be an 
        eligible corps member and accept the candidate for a teacher 
        corps program if the candidate has worked successfully and 
        directly in a field and in a position that provided the 
        candidate with direct and substantive knowledge in the academic 
        subject in which the candidate intends to teach.
    ``(c) Three-Year Commitment to Teaching in Eligible Districts.--
            ``(1) In general.--In return for acceptance to a teacher 
        corps program, a corps member shall commit to 3 years of full-
        time teaching in a school or district served by a local 
        educational agency participating in a recruitment partnership 
        receiving funds under this part.
            ``(2) Reimbursement.--
                    ``(A) In general.--If a corps member leaves the 
                school district to which the corps member has been 
                assigned prior to the end of the 3-year period 
                described in paragraph (1), the corps member shall be 
                required to reimburse the Secretary for the amount of 
                the Federal share of the cost of the corps member's 
                participation in the teacher corps program.
                    ``(B) Partnership claims.--A recruitment 
                partnership that provides a teacher corps program to a 
                corps member who leaves the school district, as 
                discussed in subparagraph (A), may submit a claim to 
                the corps member requiring the corps member to 
                reimburse the recruitment partnership for the amount of 
                the partnership's share of the cost described in 
                subparagraph (A).
                    ``(C) Reduction.--Reimbursements required under 
                this paragraph may be reduced proportionally based on 
                the amount of time a corps member remained in the 
                teacher corps program beyond the corps member's initial 
                2 years of service.
                    ``(D) Waiver.--The Secretary may waive 
                reimbursements required under subparagraph (A) in the 
                case of severe hardship to a corps member who leaves 
                the school district, as described in subparagraph (A).
    ``(d) Federal Share; Non-Federal Share.--
            ``(1) Payment of federal share.--The Secretary shall pay to 
        each recruitment partnership carrying out a teacher corps 
        program under this section the Federal share of the cost of the 
        activities described in the partnership's application under 
        section 2806(c).
            ``(2) Non-federal share.--A recruitment partnership's share 
        of the cost of the activities described in the partnership's 
        application under section 2806(c)--
                    ``(A) may be provided in cash or in kind, fairly 
                evaluated, including plant, equipment, or services; and
                    ``(B)(i) for the first year for which the 
                partnership receives assistance under this part, shall 
                be not less than 10 percent;
                    ``(ii) for the second such year, shall be not less 
                than 20 percent;
                    ``(iii) for the third year such year, shall be not 
                less than 30 percent;
                    ``(iv) for the fourth such year, shall be not less 
                than 40 percent; and
                    ``(v) for the fifth such year, shall be not less 
                than 50 percent.

``SEC. 2809. GRANTS TO PARTNERSHIPS OF INSTITUTIONS OF HIGHER EDUCATION 
              AND LOCAL EDUCATIONAL AGENCIES.

    ``(a) Administration.--A State agency for higher education may use, 
from the funds made available to the agency under section 2803(a)(4) 
for any fiscal year, not more than 3\1/3\ percent for the expenses of 
the agency in administering this section, including conducting 
evaluations of activities on the performance measures described in 
section 2804(a)(2).
    ``(b) Grants to Partnerships.--
            ``(1) In general.--The State agency for higher education 
        shall use the remainder of the funds, in cooperation with the 
        State educational agency, to make grants to (including entering 
        into contracts or cooperative agreements with) partnerships 
        of--
                    ``(A) institutions of higher education that are in 
                full compliance with all reporting requirements of 
                title II of the Higher Education Act of 1965 or 
                nonprofit organizations of demonstrated effectiveness 
                in providing professional development and mentoring in 
                the core academic subjects; and
                    ``(B) eligible local educational agencies (as 
                defined in section 2805(b)(2)), to carry out activities 
                (and only activities) described in subsection (e).
            ``(2) Size; duration.--Each grant made under this section 
        shall be--
                    ``(A) in a sufficient amount to carry out the 
                objectives of this section effectively; and
                    ``(B) for a period of 3 years, which the State 
                agency for higher education may extend for an 
                additional 2 years if the agency determines that the 
                partnership is making substantial progress toward 
                meeting the specific goals set out in the written 
                agreement required in subsection (c) and on the 
                performance measures described in section 2804(a)(2).
            ``(3) Applications.--To be eligible to receive a grant 
        under this section, a partnership shall submit an application 
        to the State agency for higher education at such time, in such 
        manner, and containing such information as the agency may 
        reasonably require.
            ``(4) Award process and basis.--The State agency for higher 
        education shall make the grants on a competitive basis, using a 
        peer review process.
            ``(5) Priority.--In making the grants, the State agency for 
        higher education shall give priority to partnerships submitting 
        applications for projects that focus on mentoring programs for 
        beginning teachers.
            ``(6) Considerations.--In making such a grant for a 
        partnership, the State agency for higher education shall 
        consider--
                    ``(A) the need of the local educational agency 
                involved for the professional development and mentoring 
                activities proposed in the application;
                    ``(B) the quality of the program proposed in the 
                application and the likelihood of success of the 
                program in improving classroom instruction and student 
                academic achievement; and
                    ``(C) such other criteria as the agency finds to be 
                appropriate.
    ``(c) Agreements.--
            ``(1) In general.--No partnership may receive a grant under 
        this section unless the institution of higher education or 
        nonprofit organization involved enters into a written agreement 
        with at least 1 eligible local educational agency (as defined 
        in section 2805(b)(2)) to provide professional development and 
        mentoring for elementary school and secondary school teachers 
        in the schools served by that agency in the core academic 
        subjects.
            ``(2) Goals.--Each such agreement shall identify specific 
        measurable annual goals concerning how the professional 
        development and mentoring that the partnership provides will 
        enhance the ability of the teachers to prepare all students to 
        meet challenging State and local content and student 
        performance standards.
    ``(d) Joint Efforts Within Institutions of Higher Education.--Each 
professional development and mentoring activity assisted under this 
section by a partnership containing an institution of higher education 
shall involve the joint effort of the institution of higher education's 
school or department of education and the schools or departments of the 
institution in the specific disciplines in which the professional 
development and mentoring will be provided.
    ``(e) Uses of Funds.--A partnership that receives funds under this 
section shall use the funds for activities (and only for activities) 
that consist of--
            ``(1) professional development and mentoring in the core 
        academic subjects, aligned with State or local content 
        standards, for teams of teachers from a school or school 
        district and, where appropriate, administrators and 
        paraprofessionals;
            ``(2) research-based professional development and mentoring 
        programs to assist beginning teachers, which may include--
                    ``(A) mentoring and coaching by trained mentor 
                teachers that lasts at least 2 years;
                    ``(B) team teaching with veteran teachers who have 
                a consistent record of helping their students make 
                substantial academic gains;
                    ``(C) provision of time for observation of, and 
                consultation with, veteran teachers;
                    ``(D) provision of reduced teaching loads; and
                    ``(E) provision of additional time for preparation;
            ``(3) the provision of technical assistance to school and 
        agency staff for planning, implementing, and evaluating 
        professional development and mentoring;
            ``(4) the provision of training for teachers to help the 
        teachers develop the skills necessary to work most effectively 
        with parents; and
            ``(5) in appropriate cases, the provision of training to 
        address areas of teacher and administrator shortages.
    ``(f) Coordination.--Any partnership that carries out professional 
development and mentoring activities under this section shall 
coordinate the activities with activities carried out under title II of 
the Higher Education Act of 1965, if a local educational agency or 
institution of higher education in the partnership is participating in 
programs funded under that title.
    ``(g) Annual Reports.--
            ``(1) In general.--Beginning with fiscal year 2002, each 
        partnership that receives a grant under this section shall 
        prepare and submit to the appropriate State agency for higher 
        education, by a date set by that agency, an annual report on 
        the progress of the partnership on the performance measures 
        described in section 2804(a)(2).
            ``(2) Contents.--Each such report shall--
                    ``(A) include a copy of each written agreement 
                required by subsection (c) that is entered into by the 
                partnership; and
                    ``(B) describe how the members of the partnership 
                have collaborated to achieve the specific goals set out 
                in the agreement, and the results of that 
                collaboration.
            ``(3) Copy.--The State agency for higher education shall 
        provide the State educational agency with a copy of each such 
        report.

``SEC. 2810. STATE APPLICATION ACCOUNTABILITY PROVISIONS.

    ``(a) Assurances.--Each State application submitted under section 
2802 shall contain assurances that--
            ``(1) beginning on the date of enactment of the Leave No 
        Child Behind Act of 2001, no school in the State that is served 
        under this part will use funds received under this part to hire 
        a teacher who is not a fully qualified teacher; and
            ``(2) not later than 4 years after the date of enactment of 
        the Leave No Child Behind Act of 2001, each teacher in the 
        State who provides services to students served under this part 
        shall be a fully qualified teacher.
    ``(b) Withholding.--If a State fails to meet the requirements 
described in subsection (a)(2) for a fiscal year in which the 
requirements apply--
            ``(1) the Secretary shall withhold, for the following 
        fiscal year, a portion of the funds that would otherwise be 
        available to the State under section 2803(a)(1) for the 
        administration of this part; and
            ``(2) the State shall be subject to such other penalties as 
        are provided by law for a violation of this Act.
    ``(c) Assistance by State Educational Agency.--Each State 
application submitted under section 2802 shall describe how the State 
educational agency will help each local educational agency and school 
in the State develop the capacity to comply with the requirements of 
this section.

``SEC. 2811. LOCAL APPLICATION ACCOUNTABILITY PROVISIONS.

    ``Each local application submitted under section 2806 shall contain 
assurances that--
            ``(1) the agency will not hire a teacher with funds made 
        available to the agency under this part, unless the teacher is 
        a fully qualified teacher;
            ``(2) the local educational agency and schools served by 
        the agency will work to ensure, through voluntary agreements 
        and incentive programs, that elementary school and secondary 
        school teachers in high-poverty schools served by the local 
        educational agency will be at least as well qualified, in terms 
        of experience and credentials, as the instructional staff in 
        schools served by the same local educational agency that are 
        not high-poverty schools;
            ``(3) any teacher who receives certification from the 
        National Board for Professional Teaching Standards will be 
        considered fully qualified to teach in the academic subjects in 
        which the teacher is certified in high-poverty schools in any 
        school district or community served by the local educational 
        agency; and
            ``(4) the agency will--
                    ``(A) make available, on request and in an 
                understandable and uniform format, to any parent of a 
                student attending any school served by the local 
                educational agency, information regarding the 
                professional qualifications of the student's classroom 
                teachers with regard to--
                            ``(i) whether the teacher has met State 
                        certification or licensing criteria for the 
                        academic subjects and grade level in which the 
                        teacher teaches the student;
                            ``(ii) whether the teacher is teaching with 
                        emergency credentials or whether any State 
                        certification or licensing standard has been 
                        waived for the teacher; and
                            ``(iii) the academic qualifications of the 
                        teacher in the academic subjects and grade 
                        levels in which the teacher teaches; and
                    ``(B) inform parents that the parents are entitled 
                to receive the information upon request.

``SEC. 2812. DEFINITIONS.

    ``In this part:
            ``(1) Beginning teacher.--The term `beginning teacher' 
        means a fully qualified teacher who has taught for 3 years or 
        less.
            ``(2) Core academic subjects.--The term `core academic 
        subjects' means--
                    ``(A) mathematics;
                    ``(B) science;
                    ``(C) reading (or language arts) and English;
                    ``(D) social studies (consisting of history, 
                civics, government, geography, and economics);
                    ``(E) foreign languages; and
                    ``(F) fine arts (consisting of music, dance, drama, 
                and the visual arts).
            ``(3) Covered recruitment.--The term `covered recruitment' 
        means activities described in section 2807(c).
            ``(4) Fully qualified.--
                    ``(A) In general.--The term `fully qualified', used 
                with respect to a teacher, means a teacher who--
                            ``(i)(I) is certified or licensed and has 
                        demonstrated the academic subject knowledge, 
                        teaching knowledge, and teaching skills 
                        necessary to teach effectively in the academic 
                        subject in which the teacher teaches, according 
                        to the standards described in subparagraph (B) 
                        or (C), as appropriate; and
                            ``(II) shall not be a teacher for whom 
                        State certification or licensing requirements 
                        have been waived or who is teaching under 
                        emergency credentials; or
                            ``(ii) meets the standards of the National 
                        Board for Professional Teaching Standards.
                    ``(B) Elementary school instructional staff.--For 
                purposes of complying with subparagraph (A)(i), each 
                elementary school teacher (other than a middle school 
                teacher) in the State shall, at a minimum--
                            ``(i) have State certification or a State 
                        license to teach (which may include 
                        certification or licensing obtained through 
                        alternative routes); and
                            ``(ii) hold a bachelor's degree and 
                        demonstrate the academic subject knowledge, 
                        teaching knowledge, and teaching skills 
                        required to teach effectively in reading, 
                        writing, mathematics, social studies, science, 
                        and other academic subjects.
                    ``(C) Middle school and secondary school 
                instructional staff.--For purposes of complying with 
                subparagraph (A)(i), each middle school or secondary 
                school teacher in the State shall, at a minimum--
                            ``(i) have State certification or a State 
                        license to teach (which may include 
                        certification or licensing obtained through 
                        alternative routes); and
                            ``(ii) hold a bachelor's degree or higher 
                        degree and demonstrate a high level of 
                        competence in all academic subjects in which 
                        the teacher teaches through--
                                    ``(I) achievement of a high level 
                                of performance on rigorous academic 
                                subject tests;
                                    ``(II) completion of an academic 
                                major (or courses totaling an 
                                equivalent number of credit hours) in 
                                each of the academic subjects in which 
                                the teacher teaches; or
                                    ``(III) for a teacher hired prior 
                                to the date of enactment of the Leave 
                                No Child Behind Act of 2001, completion 
                                of appropriate course work for mastery 
                                of such academic subjects.
            ``(5) High-poverty.--The term `high-poverty', used with 
        respect to a school, means a school that serves a high number 
        or percentage of children from families with incomes below the 
        poverty line, as determined by the State in which the school is 
        located.
            ``(6) High-poverty local educational agency.--The term 
        `high-poverty local educational agency' means a local 
        educational agency for which the number of children served by 
        the agency who are age 5 through 17, and from families with 
        incomes below the poverty line--
                    ``(A) is not less than 20 percent of the number of 
                all children served by the agency; or
                    ``(B) is more than 10,000.
            ``(7) Institution of higher education.--The term 
        `institution of higher education'--
                    ``(A) has the meaning given the term in section 
                101(a) of the Higher Education Act of 1965; and
                    ``(B) if such an institution prepares teachers and 
                receives Federal funds, means such an institution 
                that--
                            ``(i) is in full compliance with the 
                        requirements of section 207 of the Higher 
                        Education Act of 1965; and
                            ``(ii) does not have a teacher preparation 
                        program identified by a State as low-
                        performing.
            ``(8) Low-performing school.--The term `low-performing 
        school' means--
                    ``(A) a school identified by a local educational 
                agency for school improvement under section 1116(c); or
                    ``(B) a school in which the great majority of 
                students, as determined by the State in which the 
                school is located, fail to meet State student 
                performance standards based on assessments the local 
                educational agency is using under part A of title I.
            ``(9) Mentoring.--The term `mentoring' means activities 
        that--
                    ``(A) consist of structured guidance and regular 
                and ongoing support for beginning teachers, that--
                            ``(i) is designed to help the teachers 
                        continue to improve their practice of teaching 
                        and to develop their instructional skills; and
                            ``(ii)(I) is part of a multiyear, 
                        developmental induction process;
                            ``(II) involves the assistance of a mentor 
                        teacher and other appropriate individuals from 
                        a school, local educational agency, or 
                        institution of higher education; and
                            ``(III) may include coaching, classroom 
                        observation, team teaching, and reduced 
                        teaching loads; and
                    ``(B) may include the establishment of a 
                partnership by a local educational agency with an 
                institution of higher education, another local 
                educational agency, teacher organization, or another 
                organization, for the purpose of carrying out the 
                activities described in subparagraph (A).
            ``(10) Mentor teacher.--The term `mentor teacher' means a 
        fully qualified teacher who--
                    ``(A) is a highly competent classroom teacher who 
                is formally selected and trained to work effectively 
                with beginning teachers (including corps members 
                described in section 2808);
                    ``(B) is full-time, and is assigned and qualified 
                to teach in the content area or grade level in which a 
                beginning teacher (including a corps member described 
                in section 2808), to whom the teacher provides 
                mentoring, intends to teach;
                    ``(C) has been consistently effective in helping 
                diverse groups of students make substantial achievement 
                gains; and
                    ``(D) has been selected to provide mentoring 
                through a peer review process that uses, as the primary 
                selection criterion for the process, the teacher's 
                ability to help students achieve academic gains.
            ``(11) Poverty line.--The term `poverty line' means the 
        poverty line (as defined by the Office of Management and 
        Budget, and revised annually in accordance with section 673(2) 
        of the Community Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
            ``(12) Professional development.--The term `professional 
        development' means activities that are--
                    ``(A)(i) an integral part of broad schoolwide and 
                districtwide educational improvement plans and enhance 
                the ability of teachers and other staff to help all 
                students, including females, students with 
                disabilities, students with limited English 
                proficiency, and students who have economic and 
                educational disadvantages, meet high State and local 
                content and student performance standards;
                    ``(ii) sustained, intensive, school-embedded, tied 
                to State standards, and of high quality and sufficient 
                duration to have a positive and lasting impact on 
                classroom instruction (not one-time workshops); and
                    ``(iii) based on the best available research on 
                teaching and learning; and
                    ``(B) described in subparagraphs (A) through (F) of 
                section 2807(a)(1).
            ``(13) Recruitment activities.--The term `recruitment 
        activities' means activities carried out through a teacher 
        corps program as described in section 2808 to attract highly 
        qualified individuals, including individuals taking 
        nontraditional routes to teaching, to enter teaching and 
        support the individuals during necessary certification and 
        licensure activities.
            ``(14) Recruitment partnership.--The term `recruitment 
        partnership' means a partnership described in section 
        2805(b)(2).

``SEC. 2813. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part, 
$1,730,000,000 for fiscal year 2002 and for each of the 4 succeeding 
fiscal years.''.

           Subchapter B--National Board Certification Program

SEC. 3471. PURPOSE.

    It is the purpose of this subchapter to assist 105,000 elementary 
school or secondary school teachers in becoming board certified by the 
year 2006.

SEC. 3472. GRANTS TO EXPAND PARTICIPATION IN THE NATIONAL BOARD 
              CERTIFICATION PROGRAM.

    (a) Definitions.--The terms used in this section have the meanings 
given the terms in section 14101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 8801).
    (b) Grants Authorized.--From amounts appropriated under subsection 
(f), the Secretary shall award grants to States to enable such States 
to provide subsidies to elementary school and secondary school teachers 
who enroll in the certification program of the National Board for 
Professional Teaching Standards.
    (c) Application.--To be eligible to receive a grant under 
subsection (b), a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require.
    (d) Amount of Grant.--The amount of a grant awarded to a State 
under subsection (b) shall be determined by the Secretary.
    (e) Use of Funds.--
            (1) In general.--A State shall use amounts received under a 
        grant under this section to provide a subsidy to an eligible 
        teacher who enrolls and completes the teaching certification 
        program of the National Board for Professional Teaching 
        Standards.
            (2) Eligibility.--
                    (A) In general.--To be eligible to receive a 
                subsidy under this section an individual shall--
                            (i) be a teacher in an elementary school or 
                        secondary school, served by a local educational 
                        agency that meets the eligibility requirements 
                        described in subparagraph (B), in the State 
                        involved;
                            (ii) prepare and submit to the State an 
                        application at such time, in such manner, and 
                        containing such information as the State may 
                        require; and
                            (iii) certify to the State that the 
                        individual intends to enroll and complete the 
                        teaching certification program of the National 
                        Board for Professional Teaching Standards.
                    (B) Local educational agency.--A local educational 
                agency described in subparagraph (A)(i) is a local 
                educational agency that--
                            (i) serves low achieving students as 
                        measured by low graduation rates or low scores 
                        on assessment exams;
                            (ii) has a low teacher retention rate in 
                        the schools served by the local educational 
                        agency;
                            (iii) has a high rate of out-of-field 
                        placement of teachers in the schools served by 
                        the local educational agency; and
                            (iv) has a shortage of teachers of 
                        mathematics or physical science in the schools 
                        served by the local educational agency.
            (3) Amount of subsidy.--Subject to the availability of 
        funds, a State shall provide a teacher who has an application 
        approved under paragraph (2) with a subsidy in an amount equal 
        to 90 percent of the cost of enrollment in the program 
        described in paragraph (2)(A)(iii).
    (f) Appropriations.--There are authorized to be appropriated to 
carry out this section, $37,800,000 for each of the fiscal years 2002 
through 2006.

          Subchapter C--Student Loan Forgiveness for Teachers

SEC. 3481. STUDENT LOAN FORGIVENESS FOR TEACHERS.

    (a) Guaranteed Loans.--Section 428J of the Higher Education Act of 
1965 (20 U.S.C. 1078-10) is amended to read as follows:

``SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

    ``(a) Statement of Purpose.--It is the purpose of this section to 
encourage individuals to enter and continue in the teaching profession.
    ``(b) Program Authorized.--The Secretary shall carry out a program, 
through the holder of the loan, of assuming the obligation to repay in 
accordance with subsection (c) a qualified loan amount for a loan made 
under section 428 or 428H for any borrower who--
            ``(1) is employed as a full-time teacher during the 
        academic year beginning in calendar year 2001 or during any 
        subsequent academic year--
                    ``(A) in a school that qualifies under section 
                465(a)(2)(A) for loan cancellation for Perkins loan 
                recipients who teach in such schools;
                    ``(B) if employed as a secondary school teacher, is 
                teaching--
                            ``(i) a subject area that is relevant to 
                        the borrower's academic major as certified by 
                        the chief administrative officer of the public 
                        or nonprofit private secondary school in which 
                        the borrower is employed; or
                            ``(ii) special education or bilingual 
                        education;
                    ``(C) if employed as an elementary school teacher, 
                has demonstrated, as certified by the chief 
                administrative officer of the public or nonprofit 
                private elementary school in which the borrower is 
                employed, knowledge and teaching skills in reading, 
                writing, mathematics, special education, bilingual 
                education, or other areas of the elementary school 
                curriculum; and
                    ``(D) is fully qualified, as such term is defined 
                in section 2812(4)(A) of the Elementary and Secondary 
                Education Act of 1965; and
            ``(2) is not in default on a loan for which the borrower 
        seeks forgiveness.
    ``(c) Qualified Loans Amount.--
            ``(1) In general.--Of the aggregate loan obligations of a 
        borrower on loans made under section 428 or 428H that are 
        outstanding after the completion of the first complete school 
        year of teaching described in subsection (b)(1) for which the 
        borrower applies for repayment under this section, the 
        Secretary shall repay not more than--
                    ``(A) $3,000 for each of the first and second such 
                complete school years;
                    ``(B) $4,000 for the third such complete school 
                year; and
                    ``(C) $5,000 for each of the fourth and fifth such 
                complete school years.
            ``(2) Treatment of consolidation loans.--A loan amount for 
        a loan made under section 428C may be a qualified loan amount 
        for the purposes of this subsection only to the extent that 
        such loan amount was used to repay a Federal Direct Stafford 
        Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan 
        made under section 428 or 428H for a borrower who meets the 
        requirements of subsection (b), as determined in accordance 
        with regulations prescribed by the Secretary.
    ``(d) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.
    ``(f) List.--If the list of schools in which a teacher may perform 
service pursuant to subsection (b) is not available before May 1 of any 
year, the Secretary may use the list for the year preceding the year 
for which the determination is made to make such service determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility.--Any teacher who performs 
        service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be eligible for 
        loan forgiveness pursuant to subsection (b).
            ``(2) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this subsection 
        and subtitle D of title I of the National and Community Service 
        Act of 1990 (42 U.S.C. 12571 et seq.). No borrower may receive 
        a reduction of loan obligations under both this section and 
        section 460.
    ``(h) Definition.--For purposes of this section, the term `year', 
where applied to service as a teacher, means an academic year as 
defined by the Secretary.''.
    (b) Direct Loans.--Section 460 of such Act (20 U.S.C. 1087j) is 
amended to read as follows:

``SEC. 460. LOAN FORGIVENESS FOR TEACHERS.

    ``(a) Statement of Purpose.--It is the purpose of this section to 
encourage individuals to enter and continue in the teaching profession.
    ``(b) Program Authorized.--The Secretary shall carry out a program 
of canceling the obligation to repay a qualified loan amount in 
accordance with subsection (c) for Federal Direct Stafford Loans and 
Federal Direct Unsubsidized Stafford Loans made under this part for any 
borrower who--
            ``(1) is employed as a full-time teacher during the 
        academic year beginning in calendar year 2001 or during any 
        subsequent academic year--
                    ``(A) in a school that qualifies under section 
                465(a)(2)(A) for loan cancellation for Perkins loan 
                recipients who teach in such schools;
                    ``(B) if employed as a secondary school teacher, is 
                teaching--
                            ``(i) a subject area that is relevant to 
                        the borrower's academic major as certified by 
                        the chief administrative officer of the public 
                        or nonprofit private secondary school in which 
                        the borrower is employed; or
                            ``(ii) special education or bilingual 
                        education;
                    ``(C) if employed as an elementary school teacher, 
                has demonstrated, as certified by the chief 
                administrative officer of the public or nonprofit 
                private elementary school in which the borrower is 
                employed, knowledge and teaching skills in reading, 
                writing, mathematics, special education, bilingual 
                education, and other areas of the elementary school 
                curriculum; and
                    ``(D) is fully qualified, as such term is defined 
                in section 2812(4)(A) of the Elementary and Secondary 
                Education Act of 1965; and
            ``(2) is not in default on a loan for which the borrower 
        seeks forgiveness.
    ``(c) Qualified Loans Amount.--
            ``(1) In general.--Of the aggregate loan obligations of a 
        borrower on Federal Direct Stafford Loans and Federal Direct 
        Unsubsidized Stafford Loans made under this part that are 
        outstanding after the completion of the first complete school 
        year of teaching described in subsection (b)(1) for which the 
        borrower applies for cancellation under this section, the 
        Secretary shall cancel not more than--
                    ``(A) $3,000 for each of the first and second such 
                complete school years;
                    ``(B) $4,000 for the third such complete school 
                year; and
                    ``(C) $5,000 for each of the fourth and fifth such 
                complete school years.
            ``(2) Treatment of consolidation loans.--A loan amount for 
        a Federal Direct Consolidation Loan may be a qualified loan 
        amount for the purposes of this subsection only to the extent 
        that such loan amount was used to repay a Federal Direct 
        Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or 
        a loan made under section 428 or 428H, for a borrower who meets 
        the requirements of subsection (b), as determined in accordance 
        with regulations prescribed by the Secretary.
    ``(d) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.
    ``(f) List.--If the list of schools in which a teacher may perform 
service pursuant to subsection (b) is not available before May 1 of any 
year, the Secretary may use the list for the year preceding the year 
for which the determination is made to make such service determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility.--Any teacher who performs 
        service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be eligible for 
        loan forgiveness pursuant to subsection (b).
            ``(2) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this subsection 
        and subtitle D of title I of the National and Community Service 
        Act of 1990 (42 U.S.C. 12571 et seq.). No borrower may receive 
        a reduction of loan obligations under both this section and 
        section 428J.
    ``(h) Definition.--For purposes of this section, the term `year', 
where applied to service as a teacher, means an academic year as 
defined by the Secretary.''.

                     CHAPTER 6--SCHOOL CONSTRUCTION

                Subchapter A--School Modernization Bonds

SEC. 3501. SHORT TITLE.

    This subchapter may be cited as the ``America's Better Classroom 
Act of 2001''.

SEC. 3502. 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:

         ``Subchapter Y--Public School Modernization Provisions

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

``SEC. 1400K. 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 
        (1), 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, and
                    ``(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 
bonds 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, 2006.

``SEC. 1400L. 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 2002,
            ``(2) $11,000,000,000 for 2003, and
            ``(3) except as provided in subsection (f), zero after 
        2003.
    ``(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 and such allocations may be 
        made only if there is an approved State application.
            ``(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.--In addition to the 
        amounts allocated under this subsection, $200,000,000 for 
        calendar year 2002, and $200,000,000 for calendar year 2003, 
        shall be allocated by the Secretary of the Interior for 
        purposes of the construction, rehabilitation, and repair of 
        schools funded by the Bureau of Indian Affairs. In the case of 
        amounts allocated under the preceding sentence, Indian tribal 
        governments (as defined in section 7871) shall be treated as 
        qualified issuers for purposes of this subchapter.
            ``(5) Approved state application.--For purposes of 
        paragraph (1), the term `approved State application' means an 
        application which is approved by the Secretary of Education and 
        which includes--
                    ``(A) the results of a recent publicly-available 
                survey (undertaken by the State with the involvement of 
                local education officials, members of the public, and 
                experts in school construction and management) of such 
                State's needs for public school facilities, including 
                descriptions of--
                            ``(i) health and safety problems at such 
                        facilities,
                            ``(ii) the capacity of public schools in 
                        the State to house projected enrollments, and
                            ``(iii) the extent to which the public 
                        schools in the State offer the physical 
                        infrastructure needed to provide a high-quality 
                        education to all students, and
                    ``(B) a description of how the State will allocate 
                to local educational agencies, or otherwise use, its 
                allocation under this subsection to address the needs 
                identified under subparagraph (A), including a 
                description of how it will--
                            ``(i) ensure that the needs of both rural 
                        and urban areas will be recognized,
                            ``(ii) give highest priority to localities 
                        with the greatest needs, as demonstrated by 
                        inadequate school facilities coupled with a low 
                        level of resources to meet those needs,
                            ``(iii) use its allocation under this 
                        subsection to assist localities that lack the 
                        fiscal capacity to issue bonds on their own, 
                        and
                            ``(iv) ensure that its allocation under 
                        this subsection is used only to supplement, and 
                        not supplant, the amount of school 
                        construction, rehabilitation, and repair in the 
                        State that would have occurred in the absence 
                        of such allocation.
        Any allocation under paragraph (1) by a State shall be binding 
        if such State reasonably determined that the allocation was in 
        accordance with the plan approved under this paragraph.
    ``(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. No qualified school construction bond may be issued by 
        reason of an allocation to a large local educational agency 
        under the preceding sentence unless such agency has an approved 
        local application.
            ``(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.
            ``(5) Approved local application.--For purposes of 
        paragraph (1), the term `approved local application' means an 
        application which is approved by the Secretary of Education and 
        which includes--
                    ``(A) the results of a recent publicly-available 
                survey (undertaken by the local educational agency or 
                the State with the involvement of school officials, 
                members of the public, and experts in school 
                construction and management) of such agency's needs for 
                public school facilities, including descriptions of--
                            ``(i) the overall condition of the local 
                        educational agency's school facilities, 
                        including health and safety problems,
                            ``(ii) the capacity of the agency's schools 
                        to house projected enrollments, and
                            ``(iii) the extent to which the agency's 
                        schools offer the physical infrastructure 
                        needed to provide a high-quality education to 
                        all students,
                    ``(B) a description of how the local educational 
                agency will use its allocation under this subsection to 
                address the needs identified under subparagraph (A), 
                and
                    ``(C) a description of how the local educational 
                agency will ensure that its allocation under this 
                subsection is used only to supplement, and not 
                supplant, the amount of school construction, 
                rehabilitation, or repair in the locality that would 
                have occurred in the absence of such allocation.
        A rule similar to the rule of the last sentence of subsection 
        (d)(5) shall apply for purposes of this paragraph.
    ``(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 (d)(5) or (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. 1400M. 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 1400L(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 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 1998,
                    ``(B) $400,000,000 for 1999,
                    ``(C) $400,000,000 for 2000,
                    ``(D) $400,000,000 for 2001,
                    ``(E) $1,400,000,000 for 2002,
                    ``(F) $1,400,000,000 for 2003, and
                    ``(G) except as provided in paragraph (3), zero 
                after 2003.
            ``(2) Allocation of limitation.--
                    ``(A) Allocation among states.--
                            ``(i) 1998, 1999, 2000, and 2001 
                        limitations.--The national zone academy bond 
                        limitations for calendar years 1998, 1999, 
                        2000, and 2001 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 2001.--The national 
                        zone academy bond limitation for any calendar 
                        year after 2001 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:
            ``(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 1400K(f) and such amounts 
                shall be treated as paid on the credit allowance date 
                (as defined in section 1400K(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:

                              ``Subchapter Y. 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:

                              ``Part IV. Regulations.''
    (e) 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, 2001.
            (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 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 enactment of this 
        Act.

SEC. 3503. 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 3502 of the America's Better Classroom 
Act of 2001.
    ``(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.''.

           Subchapter B--Schools as Centers of the Community

SEC. 3551. FINDINGS.

    Congress makes the following findings:
            (1) Communities across the Nation need to build and 
        modernize thousands of public elementary schools and secondary 
        schools in the coming decade in ways that reflect new 
        approaches to teaching and learning, and in ways that reflect 
        the fact that learning is a lifelong process for persons of all 
        ages. These schools can make an enduring difference for these 
        communities by affecting not just students but entire 
        neighborhoods for generations.
            (2) The National Symposium on School Design has recommended 
        that local educational agencies hold community dialogues that 
        discuss the planning and design of their new school buildings. 
        Community partnerships of parents, educators, architects, urban 
        planners, students, and other interested parties can assist 
        local educational agencies to design new schools that better 
        meet the needs of their communities now and in the future.
            (3) Establishing such community partnerships for the 
        purpose of broadening public participation in the planning and 
        design of schools encourages broader community involvement in 
        the schools, generates creativity in the planning process, and 
        promotes savings, cost-sharing, and the most effective use of 
        the school building by the entire community. Such partnerships 
        can help create schools that are centers of teaching and 
        learning for the entire community.

SEC. 3552. PURPOSE.

    The purpose of this subchapter is to assist local educational 
agencies and their communities to increase the involvement of parents, 
teachers, students, and community groups in the planning and design of 
new and renovated public elementary school and secondary school 
buildings that--
            (1) enhance teaching and learning, and accommodate the 
        needs of all learners;
            (2) serve as a center of the community;
            (3) promote health, safety, and security;
            (4) effectively use all available resources; and
            (5) are flexible and can accommodate changing community 
        needs.

SEC. 3553. PROGRAM AUTHORIZED.

    (a) Grants Authorized.--
            (1) In general.--From funds appropriated under section 
        3556, the Secretary shall award grants to local educational 
        agencies participating in eligible consortia to enable the 
        eligible consortia to support the planning and design of--
                    (A) new elementary school or secondary school 
                buildings; or
                    (B) the renovation of existing elementary school or 
                secondary school buildings.
            (2) Definition of eligible consortium.--In this subchapter, 
        the term ``eligible consortium'' means a consortium that--
                    (A) shall include at least 1 local educational 
                agency; and
                    (B) may include such organizations and individuals 
                as a State educational agency, a community-based 
                organization, a local government, a business or 
                industry, an architect, a parent, teacher, or senior 
                citizen group, a library, or a museum.
    (b) Requirements.--
            (1) Duration.--Grants under this subchapter shall be 
        awarded for not more than 1 year.
            (2) Limitation.--Not more than 1 grant provided under this 
        subchapter may be used to plan or design the same school.
            (3) Matching.--A grant under this subchapter shall not be 
        used to pay for more than 50 percent of the cost of a planning 
        or design project. A recipient of a grant under this subchapter 
        shall provide at least 50 percent of the cost of the planning 
        or design project from non-Federal sources, which may include 
        in-kind contributions, fairly evaluated.
    (c) Geographic Distribution.--In awarding grants under this 
subchapter, the Secretary is authorized to take such steps as are 
necessary to ensure an equitable geographic distribution of the grants, 
including distributing the grants among rural, urban, and suburban 
local educational agencies.

SEC. 3554. USE OF FUNDS.

    A grant under this subchapter shall be used by a local educational 
agency to support the planning or design of a new school building, or 
of the renovation of an existing school building, and may be used for 
activities such as--
            (1) community outreach activities (including the 
        development and circulation of explanatory materials and the 
        cost of meetings) designed to encourage greater participation 
        by the community;
            (2) the development, with the involvement of all 
        stakeholders, of a master plan for a school district; and
            (3) necessary administrative support for the eligible 
        consortium.

SEC. 3555. APPLICATIONS.

    (a) In General.--Each local educational agency desiring a grant 
under this subchapter shall submit to the Secretary an application at 
such time, and containing such information, as the Secretary may 
require.
    (b) Contents.--Each application submitted under this subchapter 
shall describe--
            (1) the community to be served by the new or renovated 
        school, including the needs of that community with respect to 
        such school;
            (2) the individuals and groups that compose the eligible 
        consortium and their respective functions;
            (3) the project activities to be supported by the grant and 
        how the activities will help meet the needs of that community 
        and the purpose of this subchapter; and
            (4) the availability of resources for the project, and how 
        the resources will be obtained.

SEC. 3556. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
subchapter $10,000,000 for fiscal year 2002, and such sums as may be 
necessary for each of the 4 succeeding fiscal years.

            Chapter 7--Child Opportunity Zone Family Centers

SEC. 3571. CHILD OPPORTUNITY ZONE FAMILY CENTERS.

    Title X of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8001 et seq.), as amended by section 3401, is further amended by 
inserting after part L the following:

            ``PART M--CHILD OPPORTUNITY ZONE FAMILY CENTERS

``SEC. 10997A. SHORT TITLE.

    ``This part may be cited as the `Child Opportunity Zone Family 
Center Act of 2001'.

``SEC. 10997B. PURPOSE.

    ``The purpose of this part is to encourage eligible partnerships to 
establish or expand child opportunity zone family centers in public 
elementary schools and secondary schools in order to provide 
comprehensive support services for children and their families, and to 
improve the children's educational, health, mental health, and social 
outcomes.

``SEC. 10997C. DEFINITIONS.

    ``In this part:
            ``(1) Child opportunity zone family center.--The term 
        `child opportunity zone family center' means a school-based or 
        school-linked community service center that provides and links 
        children and their families with comprehensive information, 
        support, services, and activities to improve the education, 
        health, mental health, safety, and economic well-being of the 
        children and their families.
            ``(2) Eligible partnership.--The term `eligible 
        partnership' means a partnership--
                    ``(A) that contains--
                            ``(i) at least 1 public elementary school 
                        or secondary school that--
                                    ``(I) receives assistance under 
                                title I and for which a measure of 
                                poverty determination is made under 
                                section 1113(a)(5) with respect to a 
                                minimum of 40 percent of the children 
                                in the school; and
                                    ``(II) demonstrates parent 
                                involvement and parent support for the 
                                partnership's activities;
                            ``(ii) a local educational agency;
                            ``(iii) a public agency, other than a local 
                        educational agency, such as a local or State 
                        department of health, mental health, or social 
                        services;
                            ``(iv) a nonprofit community-based 
                        organization, providing health, mental health, 
                        or social services;
                            ``(v) a local child care resource and 
                        referral agency; and
                            ``(vi) a local organization representing 
                        parents; and
                    ``(B) that may contain--
                            ``(i) an institution of higher education; 
                        and
                            ``(ii) other public or private nonprofit 
                        entities with experience in providing services 
                        to disadvantaged families.

``SEC. 10997D. GRANTS AUTHORIZED.

    ``(a) In General.--The Secretary may award, on a competitive basis, 
grants to eligible partnerships to pay for the Federal share of the 
cost of establishing and expanding child opportunity zone family 
centers.
    ``(b) Duration.--The Secretary shall award grants under this 
section for periods of 5 years.

``SEC. 10997E. REQUIRED ACTIVITIES.

    ``Each eligible partnership receiving a grant under this part shall 
use the grant funds--
            ``(1) in accordance with the needs assessment described in 
        section 10997F(b)(1), to provide or link children and their 
        families with information, support, activities, or services in 
        core areas such as education, child care, before- and after-
        school care and enrichment programs, health services, mental 
        health services, family support, nutrition, literacy services, 
        parenting skills, and drop-out prevention;
            ``(2) to provide intensive, high-quality, research-based 
        programs that--
                    ``(A) provide violence prevention education for 
                families and developmentally appropriate instructional 
                services to children (including children below the age 
                of compulsory school attendance); and
                    ``(B) provide effective strategies for nurturing 
                and supporting the emotional, social, and cognitive 
                growth of children; and
            ``(3) to provide training, information, and support to 
        families to enable the families to participate effectively in 
        their children's education, and to help their children meet 
        challenging standards, including assisting families to--
                    ``(A) understand the applicable accountability 
                systems, including State and local content standards, 
                performance standards, and assessments, their 
                children's educational performance in comparison to the 
                standards, and the steps the school is taking to 
                address the children's needs and to help the children 
                meet the standards; and
                    ``(B) communicate effectively with personnel 
                responsible for providing educational services to the 
                families' children, and to participate in the 
                development and implementation of school-parent 
                compacts, parent involvement policies, and school 
                plans.

``SEC. 10997F. APPLICATIONS.

    ``(a) In General.--Each eligible partnership desiring a grant under 
this part shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.
    ``(b) Contents.--Each application submitted pursuant to subsection 
(a) shall--
            ``(1) include a needs assessment, including a description 
        of how the partnership will ensure that the activities to be 
        assisted under this part will be tailored to meet the specific 
        needs of the children and families to be served;
            ``(2) describe arrangements that have been formalized 
        between the participating public elementary school or secondary 
        school, and other partnership members;
            ``(3) describe how the partnership will effectively 
        coordinate with the centers under section 1118 and utilize 
        Federal, State, and local sources of funding that provide 
        assistance to families and their children;
            ``(4) describe the partnership's plan to--
                    ``(A) develop and carry out the activities assisted 
                under this part with extensive participation of 
                parents, administrators, teachers, pupil services 
                personnel, social and human service agencies, and 
                community organizations and leaders; and
                    ``(B) coordinate the activities assisted under this 
                part with the education reform efforts of the 
                participating public elementary school or secondary 
                school, and the participating local educational agency;
            ``(5) describe how the partnership will ensure that 
        underserved populations such as families of students with 
        limited English proficiency, and families of students with 
        disabilities, are effectively involved, informed, and assisted;
            ``(6) describe how the partnership will collect and analyze 
        data, and will utilize specific performance measures and 
        indicators to--
                    ``(A) determine the impact of activities assisted 
                under this part as described in section 10997I(a); and
                    ``(B) improve the activities assisted under this 
                part; and
            ``(7) describe how the partnership will protect the privacy 
        of families and their children participating in the activities 
        assisted under this part.

``SEC. 10997G. FEDERAL SHARE.

    ``The Federal share of the cost of establishing and expanding child 
opportunity zone family centers--
            ``(1) for the first year for which an eligible partnership 
        receives assistance under this part shall not exceed 90 
        percent;
            ``(2) for the second such year, shall not exceed 80 
        percent;
            ``(3) for the third such year, shall not exceed 70 percent;
            ``(4) for the fourth such year, shall not exceed 60 
        percent; and
            ``(5) for the fifth such year, shall not exceed 50 percent.

``SEC. 10997H. FUNDING.

    ``(a) Continuation of Funding.--Each eligible partnership that 
receives a grant under this part shall, after the third year for which 
the partnership receives funds through the grant, be eligible to 
continue to receive the funds if the Secretary determines that the 
partnership has made significant progress in meeting the 
performance measures used for the partnership's local evaluation under 
section 10997I(a).
    ``(b) Limitation on Use of Funds To Offset Other Programs.--
Notwithstanding any other provision of law, none of the funds received 
under a grant under this part may be used to pay for expenses related 
to any other Federal program, including treating such funds as an 
offset against such a Federal program.

``SEC. 10997I. EVALUATIONS AND REPORTS.

    ``(a) Local Evaluations.--Each partnership receiving funds under 
this part shall conduct annual evaluations and submit to the Secretary 
reports containing the results of the evaluations. The reports shall 
include the results of the partnership's performance assessment 
effectiveness in reaching and meeting the needs of families and 
children served under this part, including performance measures 
demonstrating--
            ``(1) improvements in areas such as student achievement, 
        family participation in schools, and access to health care, 
        mental health care, child care, and family support services, 
        resulting from activities assisted under this part; and
            ``(2) reductions in such areas as violence among youth, 
        truancy, suspension, and dropout rates, resulting from 
        activities assisted under this part.
    ``(b) National Evaluations.--The Secretary shall reserve not more 
than 3 percent of the amount appropriated under this part to carry out 
a national evaluation of the effectiveness of the activities assisted 
under this part. Such evaluation shall be completed not later than 3 
years after the date of enactment of the Child Opportunity Zone Family 
Center Act of 2001, and every year thereafter and shall be submitted to 
Congress.
    ``(c) Exemplary Activities.--The Secretary shall broadly 
disseminate information on exemplary activities developed under this 
part.

``SEC. 10997J. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$100,000,000 for fiscal year 2002, and such sums as may be necessary 
for each of the fiscal years 2003 through 2005.''.

         TITLE IV--FAIR START--LIFTING CHILDREN OUT OF POVERTY

               Subtitle A--Expanding the Child Tax Credit

SEC. 4001. EXPANSION OF CHILD TAX CREDIT; CREDIT MADE PARTIALLY 
              REFUNDABLE.

    (a) Increase in Amount Allowed.--Subsection (a) of section 24 of 
the Internal Revenue Code of 1986 (relating to allowance of credit) is 
amended to read as follows:
    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year 
        with respect to each qualifying child of the taxpayer an amount 
        equal to the applicable amount.
            ``(2) Applicable amount.--For purposes of paragraph (1), 
        the applicable amount shall be determined as follows:

``In the case of any taxable year   The applicable amount is--
        beginning in--
    2002..........................................                $600 
    2003..........................................                 700 
    2004..........................................                 800 
    2005..........................................                 900 
    2006 or thereafter............................            1,000.''.
    (b) Credit Allowed Against Alternative Minimum Tax.--
            (1) In general.--Section 24(b) of the Internal Revenue Code 
        of 1986 (relating to limitation based on adjusted gross income) 
        is amended by adding at the end the following new paragraph:
            ``(3) Limitation based on amount of tax.--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 this 
                subpart (other than this section) and section 27 for 
                the taxable year.''.
            (2) Conforming amendments.--
                    (A) Section 24(d) of such Code is amended--
                            (i) by striking ``section 26(a)'' each 
                        place it appears and inserting ``subsection 
                        (b)(3)'', and
                            (ii) in paragraph (1)(B) by striking 
                        ``aggregate amount of credits allowed by this 
                        subpart'' and inserting ``amount of credit 
                        allowed by this section''.
                    (B) Paragraph (1) of section 26(a) of such Code is 
                amended by inserting ``(other than section 24)'' after 
                ``this subpart''.
                    (C) Subsection (c) of section 23 is amended by 
                striking ``and section 1400C'' and inserting ``and 
                sections 24 and 1400C''.
                    (D) Subparagraph (C) of section 25(e)(1) is amended 
                by inserting ``, 24,'' after ``sections 23''.
                    (E) Section 904(h) of such Code is amended by 
                inserting ``(other than section 24)'' after 
                ``chapter''.
                    (F) Subsection (d) of section 1400C is amended by 
                inserting ``and section 24'' after ``this section''.
                    (G) The heading for section 24(b) of such Code is 
                amended to read as follows: ``Limitations.--''.
                    (H) The heading for section 24(b)(1) of such Code 
                is amended to read as follows: ``Limitation based on 
                adjusted gross income.--''.
    (c) Portion of Child Credit Treated as Refundable.--
            (1) In general.--Paragraph (1) of section 24(d) of the 
        Internal Revenue Code of 1986 (relating to additional credit 
        for families with 3 or more children), as amended by subsection 
        (b)(2)(A), is amended to read as follows:
            ``(1) In general.--The aggregate credits allowed to a 
        taxpayer under subpart C shall be increased by the sum of the 
        credits allowable under this section for all qualifying 
        children of the taxpayer (determined without regard to this 
        subsection and the limitation under subsection (b)(3)). The 
amount of the credit allowed under this subsection shall not be treated 
as a credit allowed under this subpart and shall reduce the amount of 
credit otherwise allowable under subsection (a) without regard to 
subsection (b)(3).''.
            (2) Conforming amendments.--
                    (A) Section 24(d) of such Code is amended by 
                striking paragraphs (2) and (3).
                    (B) The heading for section 24(d) of such Code is 
                amended to read as follows: ``Additional Credit for 
                Certain Families.--''.
                    (C) Section 32 of such Code is amended by striking 
                subsection (m).
    (d) Coordination With Federal Means-Tested Programs.--Section 24(d) 
of the Internal Revenue Code of 1986 (relating to additional credit for 
certain families), as amended by subsection (c), is amended by adding 
at the end the following new paragraph:
            ``(2) Coordination with means-tested programs.--For 
        purposes of any benefits, assistance, or supportive services 
        under any Federal program or under any State or local program 
        financed, in whole or in part, with Federal funds or with State 
        funds, taken into account under any maintenance of effort 
        requirements, which imposes income limitations on eligibility 
        for such program, any refund made to an individual (or the 
        spouse of an individual) by reason of this subsection shall not 
        be treated as income (and shall not be taken into account in 
        determining resources for the month of its receipt and the 
        following month).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

         Subtitle B--Strengthening the Earned Income Tax Credit

SEC. 4101. SHORT TITLE.

    This subtitle may be cited as the ``Tax Relief for Working Families 
Act of 2001''.

SEC. 4102. INCREASED EARNED INCOME TAX CREDIT FOR 2 OR MORE QUALIFYING 
              CHILDREN.

    (a) In General.--The table in section 32(b)(1)(A) of the Internal 
Revenue Code of 1986 (relating to percentages) is amended--
            (1) in the second item--
                    (A) by striking ``or more'', and
                    (B) by striking ``21.06'' and inserting ``19.06'', 
                and
            (2) by inserting after the second item the following:


``3 or more qualifying children....  45..................................                 19.06''.