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                                                       Calendar No. 570
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-327
_______________________________________________________________________


 
                EDUCATION FLEXIBILITY AMENDMENTS OF 1998

                                _______
                                

               September 14, 1998.--Ordered to be printed

_______________________________________________________________________


    Mr. Jeffords, from the Committee on Labor and Human Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 2213]

    The Committee on Labor and Human Resources, to which was 
referred the bill (S. 2213) to allow all States to participate 
in activities under the Education Flexibility Partnership 
Demonstration Act, having considered the same, reports 
favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill (as amended) do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for the legislation..........................2
III. History of the legislation and votes in committee................3
 IV. Explanation of the bill and committee views......................4
  V. Cost estimate....................................................5
 VI. Regulatory impact statement......................................6
VII. Application of law to the legislative branch.....................6
VIII.Section-by-section analysis......................................7

 IX. Additional views.................................................9
  X. Changes in existing law.........................................12

                         I. Purpose and Summary

    The purpose of S. 2213, as amended by the Senate Committee 
on Labor and Human Resources, is to authorize the expansion of 
the Education Flexibility Partnership Demonstration Program. 
The primary objective is to give all States, that are qualified 
and choose to do so, the opportunity to participate in the 
education flexibility initiative.
    S. 2213 amends section 311(e) of the Goals 2000: Educate 
America Act. All States that participate in the Education 
Flexibility Partnership Program (which will be referred to as 
Ed-Flex throughout this report) would be allowed to waive 
certain Federal regulations and requirements related to 
elementary and secondary education to the extent it is 
determined that the regulations and requirements were impeding 
effective education reform.
    Those 12 States currently participating in the Ed-Flex 
program would be grandfathered into S. 2213. Any new State 
choosing to participate in the Ed-Flex program must meet the 
following eligibility requirements: 1) a State must either have 
an approved Title I plan as described in section 1111(b) of the 
Improving America's Schools Act or the State must demonstrate 
substantial progress toward having an approved Title I plan; 2) 
a State must waive its own State regulations and requirements 
governing the implementation of Federal education programs; and 
3) a State must hold local educational agencies accountable for 
meeting the educational goals submitted in their local waiver 
applications.
    Under S. 2213, State educational agencies would not be 
allowed to waive certain requirements such as those pertaining 
to health, safety, or civil rights. In addition, States cannot 
waive requirements pertaining to maintenance of effort, 
comparability of services, nor those requirements that meet the 
underlying purposes of the programs from which waivers have 
been sought.

              II. Background and Need for the Legislation

    More than 46 million children attend public schools in the 
United States. These 46 million youngsters are enrolled in 
87,000 public schools.
    Federal education funding accounts for only 7 percent of 
total resources allocated for education. Some experts suggest 
that despite this rather low percentage in actual Federal 
education spending, Federal education programs may result in 
excessive administrative costs. Frank Brogan, Florida's 
Commissioner of Education, has reported that Florida has 297 
State employees overseeing $1 billion in federally funded 
education programs and 374 employees to oversee $7 billion in 
State education initiatives. In using this comparison, 
Commissioner Brogan comments that it appears that more 
individuals are required to oversee Federal programs than State 
programs--``we at the State and local level feel the crushing 
burden caused by too many Federal regulations, procedures, and 
mandates.''
    S. 2213 is a modest education reform. While giving States 
flexibility, S. 2213 also demands high accountability 
standards. Greater accountability is essential to improving our 
education system.
    Under the Ed-Flex program, the United States Department of 
Education gives States the ability to grant individual school 
districts temporary waivers from certain Federal requirements 
that impede State and local efforts to improve education. To be 
eligible, a State must also waiverelevant State education 
regulations and must hold schools accountable for results. Many of the 
12 States presently participating in Ed-Flex have used this flexibility 
to enable school districts to maximize Federal resources for improved 
student achievement.
    Ed-Flex will also enhance program coordination and 
strengthen planning processes. Through a better allocation of 
resources, a simultaneous reduction of cumbersome regulations, 
and the demand for greater accountability, the expansion of the 
Ed-Flex program will be a positive contributing factor to 
improving our education system.

         III. History of the Legislation and Votes in Committee

                           EXECUTIVE SESSION

    The Education Flexibility Amendments of 1998, S. 2213 was 
introduced by Senators Frist and Wyden. Cosponsors are Senators 
Collins, DeWine, Ford, Glenn, Grassley, Helms, Kempthorne, 
Kerrey, Roth, Smith of Oregon, Hagel, Levin, McConnell, 
Hutchison, Domenici, and Bennett.
    The Committee on Labor and Human Resources met in executive 
session on July 22, July 29, and July 30, 1998 to consider S. 
2213. Four amendments were unanimously adopted by voice vote.
    The first amendment adopted was Senator Frist's amendment 
package which strengthened State eligibility requirements, 
removed Adult Education from the list of programs included as a 
part of S. 2213, changed the scope of those technology programs 
included in S. 2213, and authorized the continued existence of 
the Ed-Flex program through 2002.
    The second and third amendments the committee adopted were 
offered by Senator Jeffords. The first amendment created an 
Oregon Institute of Public Service and Constitutional Studies. 
The second amendment established the Paul Simon Public Policy 
Institute.
    The fourth amendment adopted by the committee encouraged 
the Secretary of Education to review the progress that States 
have made in establishing procedures for increasing the 
percentage of teachers that are suitably prepared and 
qualified. This amendment is not intended to be a precondition 
or requirement for Ed-Flex eligibility.
    Two amendments were offered by Senator Reed. The first 
amendment would have required the Secretary of Education to 
issue a report about the status of current Ed-Flex States which 
would have had to be submitted to Congress before additional 
States would have become eligible for Ed-Flex participation. 
The second amendment offered by Senator Reed would have 
required a public notice and a 30 day comment period prior to 
the request for, or granting of waivers. Both of these 
amendments were defeated by a 10-8 vote.
    Senator Dodd proposed two amendments. The first modified 
amendment would have increased the authorization levels for the 
Child Care Block Grant and for 21st Century Community Learning 
Centers. The second amendment would have authorized a grant 
program to combat truancy. Both amendments were defeated by a 
10-8 vote.
    Senator Dodd also offered an amendment on behalf of Senator 
Harkin which would have provided authority to buy down interest 
rates for school infrastructure projects. This amendmentwas 
defeated by a voice vote.
    Senator Murray offered and withdrew an amendment pertaining 
to teacher preparation in technology.
    Senator Murray offered and withdrew a second amendment to 
hire 100,000 teachers nationally to reduce class size.
    Senator Murray also offered and withdrew a third amendment 
to include parental involvement in school activities as an 
allowable use under the Family and Medical Leave Act.
    Senator Kennedy offered an amendment to establish 
educational opportunity zones to assist urban and rural local 
educational agencies to raise students' academic achievements. 
The amendment was defeated by a 10-8 vote.
    Following the consideration of all amendments, S. 2213, the 
Education Flexibility Partnership Demonstration Act, was voted 
out favorably by the committee by a vote of 17 yeas and 1 nay.

            IV. Explanation of the Bill and Committee Views

    The expansion of Ed-Flex waiver authority will allow for 
the waiver of statutory and regulatory requirements that hinder 
implementation of State and local educational improvement 
plans.
    The current Ed-Flex Demonstration Program is limited to 12 
States: Colorado, Illinois, Iowa, Kansas, Maryland, 
Massachusetts, Michigan, New Mexico, Ohio, Oregon, Texas, and 
Vermont. S. 2213 will expand the availability of the program to 
any eligible State. In determining the eligibility 
requirements, the Department of Education was consulted and 
their views were incorporated into the legislation as passed by 
the committee. The eligibility requirements mirror those 
contained in the current law.
    The eligibility requirements of Section 3, of S. 2213 
reflect those that have been established under Section 1111(b) 
of the Improving America's Schools Act. The present Title I 
plan has strict accountability measures that focus on content 
standards, performance measures, and assessments.
    Under S. 2213, a State must either have an approved Title I 
plan or have made substantial progress toward having an 
approved plan. The determination of whether a State has made 
``substantial progress'' will largely be up to the discretion 
of the Secretary. It should be noted, that the committee 
believes that a State will have to, at the very least, have the 
content standards required under section 1111(b) of the 
Improving America's Schools Act in order to be eligible for 
participation in the Ed-Flex program.
    S. 2213 only adds one new covered program to the current 
list of elementary and secondary education programs included 
under the Education Flexibility Partnership Demonstration Act. 
The program is the Technology Challenge Fund formula grant 
program. In addition, S. 2213 extends the authority for Ed-Flex 
for 5 years.
    Ed-Flex is not a block grant proposal. States cannot pool 
funds from various Federal education programs and they must 
ensure that the underlying purposes of the program in question 
will continue to be met. Ed-Flex simply allows States some 
relief from the burgeoning mass of bureaucratic Federal 
regulations and requirements that impede local education reform 
efforts.
    Ed-Flex is a good first step toward granting States and 
localities increased flexibility in using Federal funds more 
effectively and efficiently while demanding greater 
accountability. Our States and localities are the engines of 
change. The committee believes that the States should be 
provided with the mechanisms to positively impact and change 
our education system for the better--Ed-Flex is such a 
mechanism.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 4, 1998.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2213, the Education 
Flexibility Amendments of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Josh O'Harra.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

S. 2213.--Education Flexibility Amendments of 1998

    Summary: Title I of S. 2213 would allow all states to 
participate in the Education Flexibility Demonstration Program 
(ED-FLEX) that grants participating educational agencies the 
ability to waive many federal and state education regulations. 
Currently, only 12 states participate in the demonstration 
project. Titles II and III would endow the Oregon Institute of 
Public Service and Constitutional Studies and establish the 
Paul Simon Public Policy Institute.
    CBO estimates that this bill would cost $6 million in 1999, 
subject to appropriation of the necessary funds. Because S. 
2213 would not affect direct spending or receipts, pay-as-you-
go procedures would not apply.
    S. 2213 contains no private-sector or intergovernmental 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs to state and local governments resulting from 
enactment of the bill would be incurred voluntarily.
    Estimated costs to the Federal Government: The estimated 
budgetary impact of S. 2213 is shown in the following table.

                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                   1999    2000    2001    2002    2003 
------------------------------------------------------------------------
Authorization under S. 2213:                                            
    Authorization levels........       6       0       0       0       0
    Estimated outlays...........       6       0       0       0       0
------------------------------------------------------------------------

    The costs of this legislation fall within budget function 
500 (education, training, employment, and social services).
    Basis of estimate: Title I of this bill would allow state 
education agencies that participate in ED-FLEX demonstration 
projects to waive federal and state regulations deemed 
unnecessary for educational attainment. CBO's analysis, 
supported by conversations with staff at the Department of 
Education, suggests that expanding the eligibility for these 
demonstration projects to educational agencies in all 50 states 
would not create any new federal costs.
    Title II would authorize a grant of $3 million to endow the 
Oregon Institute of Public Service and Constitutional Studies. 
Similarly, Title III of S. 2213 would authorize $3 million 
dollars in 1999 to establish the Paul Simon Public Policy 
Institute at Southern Illinois University. The legislation 
would make the funds available for the Paul Simon Pubic Policy 
Institute available only if the university matches every $3 of 
federal funding with $1 of its own. For the purposes of this 
estimate, CBO assumes that the univesity would be able to 
provide the $1 million to match the $3 million in federal 
funding available. CBO expects the universites to access these 
funds promptly, thus resulting in $6 million in outlays in 
1999.
    Pay-as-you-go-considerations: None.
    Intergovernmental and private-sector impact: S. 2213 
contians no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would allow officials in all 50 
states to participate in the Education Flexibility 
Demonstration Program. Twelve states now participate in this 
program, which gives state officials the authority to 
temporarily free individual school districts from certain 
federal requirements. The bill would also authorize 
appropriations of $6 million to endow public policy programs at 
two public universites. Participation in these programs would 
be voluntary as would any associated costs.
    Estimate prepared by: Federal Cost: Josh O'Harra. Impact on 
State, Local, and Tribal Governments: Marc Nicole. Impact on 
the Private Sector: Nabeel Alsalam.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                    VI. Regulatory Impact Statement

     The committee has determined that S. 2213 may result in 
some additional paperwork, time, and costs to the Department of 
Education which would be entrusted with implementation and 
enforcement of the act. It is difficult to estimate the volume 
of additional paperwork necessitated by the act, but the 
committee does not believe it will be significant.

         VII. Application of the Law to the Legislative Branch

     Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. S. 2213 
amends title 311(e) of the ``Goals 2000: Educate America Act.'' 
Therefore, S. 2213 does not amend any act that applies to the 
legislative branch.

                   VIII. Section-by-Section Analysis

                     Title I--Education Flexibility

SECTION 101. SHORT TITLE.

    Section 101 specifies the short title of the bill, 
``Education Flexibility Amendments of 1998.''

SECTION 102. FINDINGS.

    Section 102 finds that states differ significantly with 
regard to elementary and secondary education, and that the 
administrative and funding mechanisms that help schools in one 
State improve may not prove successful in other States. In 
addition, some Federal regulations may impede local efforts to 
improve education. Because State educational agencies are 
closer to the local schools than the Federal government, they 
are in the best position to align Federal, State, and local 
initiatives. The SEA has flexibility to waive certain Federal 
requirements and related State requirements in 12 States 
currently, and an expansion of this authority to other states 
will serve to improve their education systems.

SECTION 103. EXPANSION OF THE EDUCATION FLEXIBILITY PARTNERSHIP 
                    DEMONSTRATION ACT.

     Section 103 expands the Education Flexibility Partnership 
Demonstration Act by amending section 311(e) of the ``Goals 
2000: Educate America Act.''
     Section 103(a)(1)(a) which previously limited Ed-Flex to 6 
States (amended in 1996 to grant 6 more States waiver authority 
bringing the grand total to 12) is amended to allow all 50 
States the opportunity to become an Ed-Flex State. The bill 
adds Subpart 2 of Part a of Title III, the Technology for 
Education Act, as another covered program under Ed-Flex 
authority in addition to the current list of programs for which 
certain statutory or regulatory requirements may be waived (the 
list is found in section 311(b) of ``Goals''). The bill also 
references the requirements that cannot be waived in section 
14401(c).
     Section 103(a)(1)(B) strikes subparagraph (B) and 
redesignates subparagraph (C) as subparagraph (B).
     Section 103(a)(2)(a) amends subparagraph (a) to specify 
the eligibility of States for participation in the Ed-Flex 
program by replacing it with the following:
          (1) a State must either have an approved Title I plan 
        (have approved content standards, performance measures, 
        and assessments in place as described in section 
        1111(b) of ESEA), or have made substantial progress 
        towards having an approved Title I plan.
          (2) a State must hold local educational agencies 
        accountable for meeting the educational goals submitted 
        in their local applications for waivers.
     Subparagraph (B), which requires States to waive their own 
state regulations and requirements governing the implementation 
of federal education programs, remains.
     Section 103(b), The Authority to Issue Waivers, authorizes 
the Secretary to carry-out the Ed-Flex program through 2003.
     Section 103(c), Accountability, authorizes the Secretary 
to review the progress of the State educational agency to 
determine if it has instituted the proper accountability 
measures.
     Section 103(d), Transition Rules, grandfathers the current 
Ed-Flex States.

Title II--Oregon Institute of Public Service and Constitutional Studies

    Title II authorizes appropriation of funds to award a grant 
to Portland State University in Portland, Oregon for the 
creation and support of the Oregon Institute of Public Service 
and Constitutional Studies at the Mark O. Hatfield School of 
Government at Portland State University. The Institute shall 
further the knowledge and understanding of students about 
public service, the United States Government, and the 
Constitution of the United States, and will increase awareness 
of the importance of public service.

              Title III--Paul Simon Public Policy Institute

    Title III authorizes appropriation of funds to award a 
grant to Southern Illinois University for the creation and 
support of the Paul Simon Public Policy Institute. This 
Institute will engage in research, analysis, debate, and policy 
recommendations affecting world hunger, mass media, foreign 
policy, education, and employment.

                  IX. ADDITIONAL VIEWS OF SENATOR DODD

    Although I supported S. 2213, the Education Flexibility 
Amendments of 1998, I continue to have strong concerns 
regarding this legislation as well as the committee's 
consideration of it.
    S. 2213 was introduced by Senator Frist and Senator Wyden a 
little over a month before the committee took up the bill. The 
committee held no hearings on this important bill and little 
notice was provided to the committee that it would be 
considered. The accountability provisions of the bill were 
substantially strengthened in the days immediately before the 
markup; however, the committee had little opportunity to 
examine the fundamentals of this important initiative.
    The legislation extends the education flexibility 
demonstration program to all 50 states. With this extension, 
Governors would have broad new authority to restructure some of 
the key federal elementary and secondary education programs, 
such as Title I and the Safe and Drug Free Schools and 
Communities Program. And yet, we have no evidence that the 
current demonstration, limited to 12 states, has resulted in 
any increase in student achievement. I supported the original 
enactment of this program, despite my concerns about ceding 
waiver authority for federal laws to the states. However, the 
original demonstration was limited to six states, then 12, and 
was to be carefully evaluated for its impact. It concerns me 
that the committee has moved forward to expand this to all 50 
states in the absence of this evaluation. This is particularly 
troubling given that the committee will take up the 
reauthorization of the Elementary and Secondary Education Act 
next year.
    As part of this critical reauthorization, we will conduct a 
comprehensive review, including hearings, of the many federal 
efforts to improve our nation's schools and the interaction 
between these efforts and those of state and local governments. 
The Education Flexibility Demonstration program should rightly 
be considered in this context. It is my expectation that we 
will continue to address the appropriate balance between 
accountability and flexibility raised by S. 2213 as well as 
other critical needs of our students and schools during the 
reauthorization process.
    During the committee's mark up, several strong initiatives 
were introduced to support the pressing needs of our schools. I 
offered two amendments--one to support local communities in 
meeting the needs of students during non-school hours and a 
second to help schools address the growing problem of truancy. 
These two initiatives are desperately needed by parents and 
schools and are deserving of the committee's attention. I 
regret we have been unable to move such clear, simple and 
compelling legislation.

                                               Christopher J. Dodd.

                    ADDITIONAL VIEWS OF SENATOR REED

    S. 2213, the Education Flexibility Amendments of 1998, will 
expand the current twelve state education flexibility (Ed-Flex) 
demonstration program to all fifty states. While I supported S. 
2213--primarily because the substitute version contained 
stronger accountability provisions than the original version of 
the bill--I have serious concerns about this legislation.
    The Labor Committee acted on this legislation without the 
benefit of research on the effectiveness of Ed-Flex. Had the 
formal hearing process been observed with respect to S. 2213, 
the Committee would have had the data and perspective to 
properly assess the expansion of the Ed-Flex demonstration 
program. Moreover, there have only been two reports issued by 
the Department of Education on Ed-Flex--an October 1997 waivers 
report and an April 1998 Goals 2000 report--which provide very 
limited information on how a few of the twelve Ed-Flex states 
are administering their waiver authority.
    Indeed, these preliminary reports fail to provide any data 
on student achievement gains in these states, let alone any 
information that demonstrates an increase in student 
achievement due to the waiver authority provided by the Ed-Flex 
program.
    Student achievement gains should be the basis for Ed-Flex 
expansion or any education policy. Until we have student 
achievement data and fully understand the impact of Ed-Flex, it 
is unwise to expand this authority--intended to be a limited 
demonstration program--to the fifty states. For this reason, I 
offered an amendment during the markup to require the Secretary 
of Education to report on data collected on student achievement 
gains in the twelve current Ed-Flex demonstration states before 
the program could be expanded. Although this amendment failed, 
I will continue to pursue this matter as S. 2213 moves to the 
floor, and next year during the reauthorization of the 
Elementary and Secondary Education Act--the proper vehicle for 
the consideration of Ed-Flex expansion.
    During the markup, I offered another amendment to bolster 
the accountability provisions included in the bill. My 
amendment would have required an open process to inform the 
public of the waivers sought by a local educational agency 
(LEA) and offered an opportunity for public comment on the 
waiver request.
    Members of the public, including individuals directly 
impacted by waiver requests, such as parents, students, and 
teachers, should be able to easily learn of such requests when 
reading their local newspaper just as they learn about other 
local issues. These individuals should also be provided with a 
description of how the proposed waiver will improve student 
performance--the intended goal of education flexibility. And, 
lastly, to ensure that all voices are heard, these individuals 
should be able to provide comments to the LEA and the state 
educational agency (SEA) before the issuance of the waiver. 
This is a common sense provision, which should be incorporated 
into S. 2213 prior to floor consideration.
    Lastly, I am disappointed that the Labor Committee did not 
take the opportunity to act on amendments offered by my 
Democratic colleagues to reduce class size, modernize our 
public schools, and provide students with after school care--
reforms that are backed by research to strengthen our schools 
and boost the achievement of students.
    I hope that these concerns will be resolved before S. 2213 
is taken to the floor. I look forward to working with the 
sponsors of S. 2213 on this matter and with the Committee to 
pass proven and needed education reforms.

                                                         Jack Reed.

                       X. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

GOALS 2000: EDUCATE AMERICA ACT

           *       *       *       *       *       *       *


       TITLE III--STATE AND LOCAL EDUCATION SYSTEMIC IMPROVEMENT

SEC. 301. [20 U.S.C. 5881] FINDINGS.

    The Congress finds that--

           *       *       *       *       *       *       *


SEC. 311. [20 U.S.C. 5891] WAIVERS OF STATUTORY AND REGULATORY 
                    REQUIREMENTS.

    (a) Waiver Authority.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

    (e) Flexibility Demonstration.--
          (1) Short title.--The subsection may be cited as the 
        ``Education Flexibility Partnership Demonstration 
        Act''.
        (2) Program authorized.--
                  [(A) In general.--The Secretary may carry out 
                an education flexibility demonstration program 
                under which the Secretary authorizes not more 
                than 6 State educational agencies serving 
                eligible States to waive statutory or 
                regulatory requirements applicable to 1 or more 
                programs or Acts described in subsection (b), 
                or other than requirements described in 
                subsection (c), for the State educational 
                agency or any local educational agency or 
                school within the State.]
                  (A) In general.--The Secretary may carry out 
                an education flexibility demonstration program 
                under which the Secretary authorizes a State 
                educational agency that serves an eligible 
                State to waive statutory or regulatory 
                requirements applicable to 1 or more programs 
                or Acts described in subsection (b) or 1 or 
                more programs described in subpart 2 of part A 
                of title III of the Elementary and Secondary 
                Education Act of 1965 (except section 3136 of 
                such Act), other than requirements described in 
                subsection (c) of this Act and section 14401(c) 
                of the Elementary and Secondary Education Act 
                of 1965, for the State educational agency or 
                any local educational agency or school within 
                the State.
                  [(B) Award rule.--In carrying out 
                subparagraph (A), the Secretary shall select 
                for participation in the demonstration program 
                described in subparagraph (A) three State 
                educational agencies serving eligible States 
                that each have a population of 3,500,000 or 
                greater and three State educational agencies 
                serving eligible States that each have a 
                population of less than 3,500,000 determined in 
                accordance with the most recent decennial 
                census of the population performed by the 
                Bureau of the Census.]
                  [(C)] (B) Designation.--Each eligible State 
                participating in the demonstration program 
                described in subparagraph (A) shall be known as 
                an ``Ed-Flex Partnership State''.
          (3) Eligible state.--For the purpose of this 
        subsection the term ``eligible State'' means a State 
        that--
                  [(A) has developed a State improvement plan 
                under section 306 that is approved by the 
                Secretary; and]
                  (A)(i) has--
                          (I) developed and implemented the 
                        challenging State content standards, 
                        challenging State student performance 
                        standards, and aligned assessments 
                        described in section 1111(b) of the 
                        Elementary and Secondary Education Act 
                        of 1965, including the requirements of 
                        that section relating to disaggregation 
                        of data, and for which local 
                        educational agencies in the State are 
                        producing the individual school 
                        performance profiles required by 
                        section 1116(a) of such Act; or
                          (II) made substantial progress, as 
                        determined by the Secretary, toward 
                        developing and implementing the 
                        standards and assessments, and toward 
                        having local educational agencies in 
                        the State produce the profiles, 
                        described in subclause (I); and
                  (ii) holds local educational agencies and 
                schools accountable for meeting the educational 
                goals described in the local applications 
                submitted under paragraph (5), and for taking 
                corrective actions, consistent with section 
                1116 of the Elementary and Secondary Education 
                Act of 1965, for the local educational agencies 
                that do not meet the goals; and

           *       *       *       *       *       *       *

          (8) Authority to issue waivers.--Notwithstanding any 
        other provision of law, the Secretary is authorized to 
        carry out the education flexibility demonstration 
        program under this subsection for each of the fiscal 
        years 1999 through 2003.
    (f) Accountability.--In deciding whether to extend a 
request for a waiver under subsection (a)(1), or a State 
educational agency's authority to issue waivers under 
subsection (e), the Secretary shall review the progress of the 
State educational agency, local educational agency, or school 
affected by such waiver or authority to determine if such 
agency or school has made progress toward achieving the desired 
results described in the application submitted pursuant to 
subsection (a)(2)(B)(iii) or (e)(5)(A)(ii). In the case of 
deciding whether to extend a State educational agency's 
authority to issue waivers under subsection (e), the Secretary 
also shall review the progress of the State educational agency 
to determine if such agency--
          (1) has established procedures for increasing the 
        percentage of elementary school and secondary school 
        teachers in the State who have demonstrated, by 
        traditional or alternative routes, the subject matter 
        knowledge and pedagogical skill necessary to provide 
        effective instruction in the content area or areas in 
        which the teachers provide instruction; and
          (2) has decreased the percentage of elementary school 
        and secondary school teachers teaching in high poverty 
        elementary schools and secondary schools who do not 
        demonstrate such knowledge and skills.

           *       *       *       *       *       *       *