To improve education for all students, and for other purposes.

April 19, 2005

Mr. BUTTERFIELD (for himself, Mr. PAYNE, Ms. LEE, Mrs. JONES of Ohio, Mr. OWENS, Mr. RUSH, Mr. THOMPSON of Mississippi, Mr. HOLDEN, Ms. NORTON, Mr. BERMAN, Mr. CLAY, Mr. LEWIS of Georgia, Mr. FORD, Mr. WEXLER, Mr. CONYERS, Mr. CARDOZA, Mr. PETERSON of Minnesota, Mrs. TAUSCHER, Mr. PALLONE, Mr. CLEAVER, and Mr. CLYBURN) introduced the following bill; which was referred to the Committee on Education and the Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To improve education for all students, and for other purposes.

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 `Quality Education for All Act'.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I--STRENGTHENING HEAD START AND CHILD CARE PROGRAMS

Subtitle A--Increasing Access to Head Start Programs

Sec. 101. Authorization of appropriations.

Sec. 102. Strengthening Indian and migrant and seasonal Head Start programs.

Sec. 103. Expanding Early Head Start programs.

Sec. 104. Participation in Head Start programs.

Subtitle B--Enhancing the School Readiness of Head Start Children

Sec. 111. School readiness standards.

Sec. 112. Staff.

Subtitle C--Expanding Access to Quality, Affordable Child Care

Sec. 121. Authorization of appropriations.

Subtitle D--Strengthening the Quality of Child Care

Sec. 131. State plan requirements relating to training.

Sec. 132. Strengthening the quality of child care.

TITLE II--PROVIDING SAFE, RELIABLE TRANSPORTATION FOR RURAL SCHOOL CHILDREN

Sec. 201. Findings and purpose.

Sec. 202. Definitions.

Sec. 203. Grant program.

Sec. 204. Authorization of appropriations.

TITLE III--SENSE OF THE SENATE REGARDING FULLY FUNDING THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT BY 2011

Sec. 301. Findings.

Sec. 302. Sense of the Senate regarding authorization of appropriations.

TITLE IV--IMPROVEMENT OF ELEMENTARY AND SECONDARY EDUCATION

Subtitle A--Public School Choice, Supplemental Educational Services, and Teacher Quality

Sec. 401. Public school choice capacity.

Sec. 402. Supplemental educational services.

Sec. 403. Qualifications for teachers and paraprofessionals.

Subtitle B--Adequate Yearly Progress Determinations

Sec. 421. Review of adequate yearly progress determinations for schools for the 2002-2003 school year.

Sec. 422. Review of adequate yearly progress determinations for local educational agencies for the 2002-2003 school year.

Sec. 423. Definitions.

Subtitle C--Technical Assistance

Sec. 451. Technical assistance.

TITLE V--IMPROVING ASSESSMENT AND ACCOUNTABILITY

Sec. 501. Grants for increasing data capacity for purposes of assessment and accountability.

Sec. 502. Grants for assessment of children with disabilities and children who are limited English proficient.

Sec. 503. Reports on student enrollment and graduation rates.

Sec. 504. Civil rights.

TITLE VI--SENSE OF THE SENATE REGARDING FUNDING FOR ELEMENTARY AND SECONDARY EDUCATION

Sec. 601. Sense of the Senate.

TITLE VII--PROVIDING A ROADMAP FOR FIRST GENERATION COLLEGE FOR STUDENTS

Sec. 701. Expansion of TRIO and GEARUP.

TITLE VIII--COLLEGE TUITION RELIEF FOR STUDENTS AND THEIR FAMILIES THROUGH PELL GRANTS

Sec. 801. Pell Grants tax tables hold harmless.

Sec. 802. Sense of the Senate regarding increasing the maximum Pell Grant.

Sec. 803. Establishment of a Pell demonstration program.

TITLE IX--TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL EDUCATION TEACHERS

Sec. 901. Purpose.

Sec. 902. Tuition free college for mathematics, science, and special education teachers.

Sec. 903. Offset for tuition free college for mathematics, science, and special education teachers.

TITLE X--MAKING COLLEGE AFFORDABLE FOR ALL STUDENTS

Sec. 1001. Expansion of deduction for higher education expenses.

Sec. 1002. Credit for interest on higher education loans.

Sec. 1003. Hope and Lifetime Learning credits to be refundable.

TITLE I--STRENGTHENING HEAD START AND CHILD CARE PROGRAMS

Subtitle A--Increasing Access to Head Start Programs

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

Section 639(a) of the Head Start Act (42 U.S.C. 9834(a)) is amended by striking `such sums' and all that follows and inserting the following: `$8,570,000,000 for fiscal year 2006, $10,445,000,000 for fiscal year 2007, $12,384,000,000 for fiscal year 2008, $14,334,000,000 for fiscal year 2009, and $16,332,000,000 for fiscal year 2010.'.

SEC. 102. STRENGTHENING INDIAN AND MIGRANT AND SEASONAL HEAD START PROGRAMS.

Section 640(a)(2) of the Head Start Act (42 U.S.C. 9835(a)(2)) is amended by striking subparagraph (A) and inserting the following:

`(A) Indian Head Start programs, services for children with disabilities, and migrant and seasonal Head Start programs, except that the Secretary shall reserve for each fiscal year for use by Indian Head Start and migrant and seasonal Head Start programs (referred to in this subparagraph as `covered programs'), on a nationwide basis, a sum that is the total of not less than 4 percent of the amount appropriated under section 639(a) for that fiscal year (for Indian Head Start programs), and not less than 5 percent of that appropriated amount (for migrant and seasonal Head Start programs), except that--

`(i) if reserving the specified percentages for covered programs and would reduce the number of children served by Head Start programs, relative to the number of children served on the date of enactment of the Quality Education for All Act, taking into consideration an appropriate adjustment for inflation, the Secretary shall reserve percentages that approach, as closely as practicable, the specified percentages and that do not cause such a reduction; and

`(ii) notwithstanding any other provision of this subparagraph, the Secretary shall reserve for each fiscal year for use by Indian Head Start programs and by migrant and seasonal Head Start programs, on a nationwide basis, not less than the amount that was obligated for use by Indian Head Start programs and by migrant and seasonal Head Start programs, respectively, for the previous fiscal year;'.

SEC. 103. EXPANDING EARLY HEAD START PROGRAMS.

Section 640(a)(6) of the Head Start Act (42 U.S.C. 9835(a)(6)) is amended--

(1) in subparagraph (A), by striking `7.5 percent for fiscal year 1999' and all that follows and inserting `12 percent for fiscal year 2006, 14 percent for fiscal year 2007, 16 percent for fiscal year 2008, 18 percent for fiscal year 2009, and 20 percent for fiscal year 2010, of the amount appropriated pursuant to section 639(a).';

(2) by striking subparagraph (B); and

(3) by redesignating subparagraph (C) as subparagraph (B).

SEC. 104. PARTICIPATION IN HEAD START PROGRAMS.

Section 645 of the Head Start Act (42 U.S.C. 9840) is amended--

(1) in subsection (a)(1)(A), by inserting `130 percent of' after `below'; and

(2) by adding at the end the following:

`(e) After demonstrating a need through a community needs assessment, a Head Start agency may apply to the Secretary to convert part-day sessions, particularly consecutive part-day sessions, into full-day sessions.'.

Subtitle B--Enhancing the School Readiness of Head Start Children

SEC. 111. SCHOOL READINESS STANDARDS.

Section 641A(a)(1)(B)(ii) of the Head Start Act (42 U.S.C. 9836(a)(1)(B)(ii)) is amended by striking `at a minimum' and all that follows and inserting the following: `at a minimum, develop and demonstrate--

`(I) language skills, including an expanded use of vocabulary;

`(II) interest in and appreciation of books, reading, and writing (either alone or with others), phonological and phonemic awareness, and varied modes of expression and communication;

`(III) premathematics knowledge and skills, including knowledge and skills relating to aspects of classification, seriation, numbers, spatial relations, and time;

`(IV) cognitive abilities related to academic achievement;

`(V) abilities related to social and emotional development;

`(VI) gross and fine motor skills; and

`(VII) in the case of children with limited English proficiency, abilities related to progress toward acquisition of the English language.'.

SEC. 112. STAFF.

(a) Staff Qualifications and Development- Section 648A of the Head Start Act (42 U.S.C. 9843a) is amended--

(1) in subsection (a)(2)--

(A) in subparagraph (A)--

(i) in the matter preceding clause (i), by striking `not later than September 30, 2003' and all that follows through `programs have' and inserting `not later than the date determined under subparagraph (D) for a Head Start region, each Head Start agency in the region with a center-based program shall ensure that all classrooms in the program have at least 1 teacher who has';

(ii) in clause (i), strike `an associate, baccalaureate,' and insert `a baccalaureate'; and

(iii) in clause (ii), strike `an associate, baccalaureate,' and insert `a baccalaureate'; and

(B) by striking subparagraph (B) and inserting the following:

`(B) TEMPORARY REQUIREMENT- Until the date determined under subparagraph (D) for a Head Start region, the Secretary shall ensure that at least 50 percent of all Head Start teachers in the region in center-based programs have--

`(i) an associate, baccalaureate, or advanced degree in early childhood education; or

`(ii) an associate, baccalaureate, or advanced degree in a field related to early childhood education, with experience in teaching preschool children.

`(C) REQUIREMENT FOR NEW HEAD START TEACHERS- Not later than 3 years after the date of enactment of the Quality Education for All Act, the Secretary shall require that all teachers hired nationwide in center-based programs of Head Start agencies following the date of the requirement--

`(i) have an associate, baccalaureate, or advanced degree in early childhood education;

`(ii) have an associate, baccalaureate, or advanced degree in a field related to early childhood education, with experience in teaching preschool children; or

`(iii) be enrolled, or enroll not later than 1 year after the date of hire, in a program of study leading to an associate degree in early childhood education.

`(D) APPROPRIATE DATE- The Secretary shall determine an appropriate date for Head Start agencies in each Head Start region to reach the result described in subparagraph (A), but in no case shall such a date be later than 8 years after the date of enactment of Quality Education for All Act.

`(E) PROGRESS-

`(i) REQUIREMENT- The Secretary shall require Head Start agencies with center-based programs to demonstrate continuing and consistent progress each year to reach the results described in subparagraphs (A) and (C).

`(ii) PLAN- Each State shall establish a plan for the Head Start agencies with center-based programs in the State to reach the results described in subparagraphs (A) and (C).

`(iii) PROGRESS- Each Head Start agency shall prepare and submit to the Secretary and the Governor of the State a report indicating the number and percentage of its teachers in center-based programs with child development associate credentials or associate, baccalaureate, or advanced degrees in early childhood education or a field related to early childhood education. The Secretary shall compile all such reports and submit a summary of the compiled reports to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives.';

(2) in subsection (a)(3), by striking `(2)(A)' and inserting `(2)(B)'; and

(3) by adding at the end the following:

`(f) Pre-Literacy and Language Training- To support local efforts to enhance early language and pre-literacy development of children in Head Start programs, and to provide the children with high-quality oral language skills and environments that are rich in literature, in which to acquire early language and pre-literacy skills, each Head Start agency shall ensure that all of the agency's Head Start teachers receive ongoing training in language and emergent literacy. Such training shall also include information regarding appropriate curricula and assessments to improve instruction and learning. Such training shall include training in methods to promote phonological and phonemic awareness and vocabulary development in an age-appropriate and culturally and linguistically appropriate manner.

`(g) Professional Development Plans- Each Head Start agency and center shall create, in consultation with employees of the agency or center (including family service workers), a professional development plan for employees who provide direct services to children, including a plan for teachers, to meet the requirements set forth in subsection (a).'.

(b) Attracting and Retaining High-Quality Head Start Teachers; Tribal College or University-Head Start Partnership Program-

(1) PROGRAM- The Head Start Act is amended by inserting after section 648A (42 U.S.C. 9843a) the following:

`SEC. 648B. ATTRACTING AND RETAINING HIGH-QUALITY HEAD START TEACHERS.

`(a) In General- The Secretary shall make grants to eligible Head Start agencies to enable the agencies to reach the results described in subparagraphs (A) and (C) of section 648A(a)(2). The Secretary shall make the grants from allotments determined under subsection (b).

`(b) Allotments- From the funds made available under section 639(c) for a fiscal year and not reserved under subsection (d), the Secretary shall allot to each Head Start agency an amount that bears the same relationship to such funds as the amount received by the agency under section 640 for that fiscal year bears to the amount received by all Head Start agencies under section 640 for that fiscal year.

`(c) Salary Plan- A Head Start agency that receives a grant under this section shall develop and carry out a plan to raise the average salaries of teachers in the agency's Head Start programs. In developing the plan, the agency shall take into consideration the training, level of education, and experience of the teachers, and the average salaries of prekindergarten and kindergarten teachers employed by the local educational agency for the school district in which the Head Start agency is located, with similar training, level of education, and experience.

`(d) Salaries in High-Cost Areas- The Secretary may reserve and use a portion of the funds available under section 639(c) to assist Head Start agencies located in high-cost areas to help reduce the discrepancy between such average salaries of such teachers and such average salaries of such prekindergarten and kindergarten teachers.

`SEC. 648C. TRIBAL COLLEGE OR UNIVERSITY-HEAD START PARTNERSHIP PROGRAM.

`(a) Tribal College or University-Head Start Partnership Program-

`(1) GRANTS- The Secretary is authorized to award grants, of not less than 5 years duration, to Tribal Colleges and Universities to--

`(A) implement education programs that include tribal culture and language and increase the number of associate, baccalaureate, and graduate degrees in early childhood education and related fields that are earned by Indian Head Start agency staff members, parents of children served by such an agency, and members of the tribal community involved;

`(B) develop and implement the programs under subparagraph (A) in technology-mediated formats; and

`(C) provide technology literacy programs for Indian Head Start agency staff members and children and families of children served by such an agency.

`(2) STAFFING- The Secretary shall ensure that the American Indian Programs Branch of the Head Start Bureau of the Department of Health and Human Services shall have staffing sufficient to administer the programs under this section and to provide appropriate technical assistance to Tribal Colleges and Universities receiving grants under this section.

`(b) Application- Each Tribal College or University 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 a certification that the Tribal College or University has established a partnership with 1 or more Indian Head Start agencies for the purpose of conducting the activities described in subsection (a).

`(c) Definitions- In this section:

`(1) INSTITUTION OF HIGHER EDUCATION- The term `institution of higher education' has the meaning given such term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).

`(2) TRIBAL COLLEGE OR UNIVERSITY- The term `Tribal College or University' means an institution--

`(A) defined by such term in section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 1059c(b)); and

`(B) determined to be accredited or a candidate for accreditation by a nationally recognized accrediting agency or association.

`(d) Authorization of Appropriations- There are authorized to be appropriated to carry out this section, $10,000,000 for fiscal year 2006 and such sums as may be necessary for each of fiscal years 2007 through 2010.'.

(2) AUTHORIZATION OF APPROPRIATIONS- Section 639 of the Head Start Act (42 U.S.C. 9834) is amended--

(A) in subsection (a), by inserting `(other than section 648B)' after `this subchapter'; and

(B) by adding at the end the following:

`(c) There are authorized to be appropriated to carry out section 648B $387,000,000 for fiscal year 2006, $496,000,000 for fiscal year 2007, $608,000,000 for fiscal year 2008, $723,000,000 for fiscal year 2009, and $841,000,000 for fiscal year 2010.'.

(3) CONFORMING AMENDMENTS- Section 640 of the Head Start Act (42 U.S.C. 9835) is amended--

(A) in subsection (a)--

(i) in paragraph (1), by striking `section 639' and inserting `section 639(a)';

(ii) in paragraph (2)--

(I) in the matter preceding subparagraph (A), by inserting `pursuant to section 639(a)' after `appropriated';

(II) in subparagraph (B), in the matter following clause (ii), by inserting `pursuant to section 639(a)' after `appropriated'; and

(III) in subparagraph (C), by inserting `pursuant to section 639(a)' after `appropriated' each place it appears; and

(iii) in paragraph (4), in the matter preceding subparagraph (A), by inserting `pursuant to section 639(a)' after `appropriated'; and

(B) in subsection (g)(1), by inserting `pursuant to section 639(a)' after `appropriated' each place it appears.

Subtitle C--Expanding Access to Quality, Affordable Child Care

SEC. 121. AUTHORIZATION OF APPROPRIATIONS.

Section 658B of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858) is amended--

(1) by striking `is' and inserting `are'; and

(2) by striking `subchapter' and all that follows and inserting `subchapter $3,100,000,000 for fiscal year 2006, $4,100,000,000 for fiscal year 2007, $5,100,000,000 for fiscal year 2008, $6,100,000,000 for fiscal year 2009, and $7,100,000,000 for fiscal year 2010.'.

Subtitle D--Strengthening the Quality of Child Care

SEC. 131. STATE PLAN REQUIREMENTS RELATING TO TRAINING.

Section 658E(c) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)) is amended by adding at the end the following:

`(6) TRAINING IN EARLY LEARNING AND CHILDHOOD DEVELOPMENT- The State plan shall describe any training requirements that are in effect within the State that are designed to enable child care providers to promote the social, emotional, physical, and cognitive development of children and that are applicable to child care providers that provide services for which assistance is made available under this subchapter in the State.'.

SEC. 132. STRENGTHENING THE QUALITY OF CHILD CARE.

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

`SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

`(a) In General-

`(1) RESERVATION- Each State that receives funds appropriated under section 639(a) for a fiscal year shall reserve and use not less than 6 percent of the funds for activities provided directly, or through grants or contracts with resource and referral organizations or other appropriate entities, that are designed to improve the quality of child care services.

`(2) ACTIVITIES- The funds reserved under paragraph (1) may only be used to--

`(A) develop and implement voluntary guidelines on pre-reading and language skills and activities, for child care programs in the State, that are aligned with State standards for kindergarten through grade 12 or the State's general goals for school preparedness;

`(B) support activities and provide technical assistance in child care settings to enhance early learning for young children, to promote literacy, and to foster school preparedness;

`(C) offer training, professional development, and educational opportunities for child care providers that relate to the use of developmentally appropriate and age-appropriate curricula, and early childhood teaching strategies, that are scientifically based and aligned with the social, emotional, physical, and cognitive development of children, including--

`(i) developing and operating distance learning child care training infrastructures;

`(ii) developing model technology-based training courses;

`(iii) offering training for caregivers in informal child care settings; and

`(iv) offering training for child care providers who care for infants and toddlers and children with special needs;

`(D) engage in programs designed to increase the retention and improve the competencies of child care providers, including wage incentive programs and initiatives that establish tiered payment rates for providers that meet or exceed child care services guidelines, as defined by the State;

`(E) evaluate and assess the quality and effectiveness of child care programs and services offered in the State to young children on improving overall school preparedness; and

`(F) carry out other activities determined by the State to improve the quality of child care services provided in the State and for which measurement of outcomes relating to improved child safety, child well-being, or school preparedness is possible.

`(b) Certification- For each fiscal year beginning after September 30, 2005, the State shall annually submit to the Secretary a certification in which the State certifies and demonstrates that the State was in compliance with subsection (a) during the preceding fiscal year and describes how the State used funds made available to carry out this subchapter to comply with subsection (a) during that preceding fiscal year.'.

TITLE II--PROVIDING SAFE, RELIABLE TRANSPORTATION FOR RURAL SCHOOL CHILDREN

SEC. 201. FINDINGS AND PURPOSE.

(a) Findings- Congress finds that--

(1) school transportation issues have concerned parents, local educational agencies, lawmakers, the National Highway Traffic Safety Administration, the National Transportation Safety Board, and the Environmental Protection Agency for years;

(2) millions of children face potential future health problems because of exposure to noxious fumes emitted from older school buses;

(3) the Environmental Protection Agency established the Clean School Bus USA program to replace 129,000 of the oldest diesel buses that cannot be retrofitted in an effort to help children and the environment by improving air quality;

(4) unfortunately, many rural local educational agencies are unable to participate in that program because of the specialized fuels needed to sustain a clean bus fleet;

(5) many rural local educational agencies are operating outdated, unsafe school buses that are failing inspections because of automotive flaws, resulting in the depletion of the school bus fleets of the local educational agencies; and

(6) many rural local educational agencies are unable to afford to buy newer, safer buses.

(b) Purpose- The purpose of this title is to establish within the Department of Education a Federal cost-sharing program to assist rural local educational agencies with older, unsafe school bus fleets in purchasing newer, safer school buses.

SEC. 202. DEFINITIONS.

In this title:

(1) RURAL LOCAL EDUCATIONAL AGENCY- The term `rural local educational agency' means a local educational agency, as defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801), with respect to which--

(A) each county in which a school served by the local educational agency is located has a total population density of fewer than 10 persons per square mile;

(B) all schools served by the local educational agency are designated with a school locale code of 7 or 8, as determined by the Secretary; or

(C) all schools served by the local educational agency have been designated, by official action taken by the legislature of the State in which the local educational agency is located, as rural schools for purposes relating to the provision of educational services to students in the State.

(2) SECRETARY- The term `Secretary' means the Secretary of Education.

(3) SCHOOL BUS- The term `school bus' means a vehicle the primary purpose of which is to transport students to and from school or school activities.

SEC. 203. GRANT PROGRAM.

(a) In General- From amounts appropriated under subsection (e) for a fiscal year, the Secretary shall provide grants, on a competitive basis, to rural local educational agencies to pay the Federal share of the cost of purchasing new school buses.

(b) Application-

(1) IN GENERAL- Each rural local educational agency that seeks to receive a grant under this title shall submit to the Secretary for approval an application at such time, in such manner, and accompanied by such information (in addition to information required under paragraph (2)) as the Secretary may require.

(2) CONTENTS- Each application submitted under paragraph (1) shall include--

(A) documentation that, of the total number of school buses operated by the rural local educational agency, not less than 50 percent of the school buses are in need of repair or replacement;

(B) documentation of the number of miles that each school bus operated by the rural local educational agency traveled in the most recent 9-month academic year;

(C) documentation that the rural local educational agency is operating with a reduced fleet of school buses;

(D) a certification from the rural local educational agency that--

(i) authorizes the application of the rural local educational agency for a grant under this title; and

(ii) describes the dedication of the rural local educational agency to school bus replacement programs and school transportation needs (including the number of new school buses needed by the rural local educational agency); and

(E) an assurance that the rural local educational agency will pay the non-Federal share of the cost of the purchase of new school buses under this title from non-Federal sources.

(c) Priority- In providing grants under this title, the Secretary shall give priority to rural local educational agencies that, as determined by the Secretary--

(1) are transporting students in a bus manufactured before 1977;

(2) have a grossly depleted fleet of school buses; or

(3) serve a school that is required, under section 1116(b)(9) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6316(b)(9)), to provide transportation to students to enable the students to transfer to another public school served by the rural local educational agency.

(d) Use of Funds- School buses purchased with grant funds awarded under subsection (a) shall be in compliance with proposed air quality regulations and standards of the Environmental Protection Agency for 2006.

(e) Payments; Federal Share-

(1) PAYMENTS- The Secretary shall pay to each rural local educational agency having an application approved under this section the Federal share described in paragraph (2) of the cost of purchasing such number of new school buses as is specified in the approved application.

(2) FEDERAL SHARE- The Federal share of the cost of purchasing a new school bus under this title shall be 75 percent.

SEC. 204. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out this title $50,000,000 for fiscal year 2006 and such sums as may be necessary for each of fiscal years 2007 through 2010.

TITLE III--SENSE OF THE SENATE REGARDING FULLY FUNDING THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT BY 2011

SEC. 301. FINDINGS.

(a) Findings- The Senate finds the following:

(1) Disability is a natural part of the human experience and in no way diminishes the right of individuals to participate in or contribute to society. Improving educational results for children with disabilities is an essential element of our national policy of ensuring equality of opportunity, full participation, independent living, and economic self-sufficiency for individuals with disabilities.

(2) Before the date of enactment of the Education for All Handicapped Children Act of 1975 (Public Law 94-142), the predecessor to the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), the educational needs of millions of children with disabilities were not being fully met because--

(A) the children did not receive appropriate educational services;

(B) the children were excluded entirely from the public school system and from being educated with their peers;

(C) undiagnosed disabilities prevented the children from having a successful educational experience; or

(D) a lack of adequate resources within the public school system forced such families to find services outside the public school system.

(3) The Individuals with Disabilities Education Act has been successful in ensuring children with disabilities and the families of such children access to a free appropriate public education and in improving educational results for children with disabilities.

(4) The implementation of the Individuals with Disabilities Education Act has been impeded by the Federal Government's failure to honor the commitment it made 30 years ago to provide States with 40 percent of the excess costs of special education.

(5) While States, local educational agencies, and educational service agencies are primarily responsible for providing an education for all children with disabilities, it is in the national interest that the Federal Government have a supporting role in assisting State and local efforts to educate children with disabilities in order to improve results for such children and to ensure equal protection of the law.

(6) Congress passed authorizing language to fully fund the Individuals with Disabilities Education Act and should appropriate such sums as authorized.

(7) A more equitable allocation of resources is essential for the Federal Government to meet its responsibility to provide an equal educational opportunity for all individuals.

SEC. 302. SENSE OF THE SENATE REGARDING AUTHORIZATION OF APPROPRIATIONS.

It is the sense of the Senate that for the purpose of carrying out the Federal Government's commitment to children, parents, and the States, there should be authorized to be appropriated--

(1) $14,648,647,143 or the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act, whichever is lower, for fiscal year 2006, and there should be appropriated $4,058,901,319 for fiscal year 2006, which should become available for obligation on July 1, 2006, and should remain available through September 30, 2007, except that if the maximum amount available for awarding grants under section 611(a)(2) of such Act is less than $14,648,647,143, then the amount should be reduced by the difference between $14,648,647,143 and the maximum amount available for awarding grants under section 611(a)(2) of such Act;

(2) $16,938,917,714 or the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act, whichever is lower, for fiscal year 2007, and there should be appropriated $6,349,171,890 for fiscal year 2007, which should become available for obligation on July 1, 2007, and should remain available through September 30, 2008, except that if the maximum amount available for awarding grants under section 611(a)(2) of such Act is less than $16,938,917,714, then the amount should be reduced by the difference between $16,938,917,714 and the maximum amount available for awarding grants under section 611(a)(2) of such Act;

(3) $19,229,188,286 or the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act, whichever is lower, for fiscal year 2008, and there should be appropriated $8,639,442,462 for fiscal year 2008, which should become available for obligation on July 1, 2008, and should remain available through September 30, 2009, except that if the maximum amount available for awarding grants under section 611(a)(2) of such Act is less than $19,229,188,286, then the amount should be reduced by the difference between $19,229,188,286 and the maximum amount available for awarding grants under section 611(a)(2) of such Act;

(4) $21,519,458,857 or the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act, whichever is lower, for fiscal year 2009, and there should be appropriated $10,929,713,033 for fiscal year 2009, which should become available for obligation on July 1, 2009, and should remain available through September 30, 2010, except that if the maximum amount available for awarding grants under section 611(a)(2) of such Act is less than $21,519,458,857, then the amount should be reduced by the difference between $21,519,458,857 and the maximum amount available for awarding grants under section 611(a)(2) of such Act;

(5) $23,809,729,429 or the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act, whichever is lower, for fiscal year 2010, and there should be appropriated $13,219,983,605 for fiscal year 2010, which should become available for obligation on July 1, 2010, and should remain available through September 30, 2011, except that if the maximum amount available for awarding grants under section 611(a)(2) of such Act is less than $23,809,729,429, then the amount should be reduced by the difference between $23,809,729,429 and the maximum amount available for awarding grants under section 611(a)(2) of such Act;

(6) $26,100,000,000 or the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act, whichever is lower, for fiscal year 2011, and there should be appropriated $15,510,254,176 for fiscal year 2011, which should become available for obligation on July 1, 2011, and should remain available through September 30, 2012, except that if the maximum amount available for awarding grants under section 611(a)(2) of such Act is less than $26,100,000,000, then the amount should be reduced by the difference between $26,100,000,000 and the maximum amount available for awarding grants under section 611(a)(2) of such Act; and

(7) the maximum amount available for awarding grants under section 611(a)(2) of the Individuals with Disabilities Education Act for fiscal year 2012 and each succeeding fiscal year, and there should be appropriated for each such year an amount equal to the maximum amount available for awarding grants under section 611(a)(2) of such Act for the fiscal year for which the determination is made minus $10,589,745,824, which should become available for obligation on July 1 of the fiscal year for which the determination is made and should remain available through September 30 of the succeeding fiscal year.

TITLE IV--IMPROVEMENT OF ELEMENTARY AND SECONDARY EDUCATION

Subtitle A--Public School Choice, Supplemental Educational Services, and Teacher Quality

SEC. 401. PUBLIC SCHOOL CHOICE CAPACITY.

(a) School Capacity- Section 1116(b)(1)(E) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6316(b)(1)(E)) is amended--

(1) in clause (i), by striking `In the case' and inserting `Subject to clauses (ii) and (iii), in the case';

(2) by redesignating clause (ii) as clause (iii);

(3) by inserting after clause (i) the following:

`(ii) SCHOOL CAPACITY- The obligation of a local educational agency to provide the option to transfer to students under clause (i) is subject to all applicable State and local health and safety code requirements regarding facility capacity.'; and

(4) in clause (iii) (as redesignated by paragraph (2)), by inserting `and subject to clause (ii),' after `public school,'.

(b) Grants for School Construction and Renovation-

(1) IN GENERAL- 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 adding at the end the following:

`SEC. 1120C. GRANTS FOR SCHOOL CONSTRUCTION AND RENOVATION.

`(a) Program Authorized- From funds appropriated under subsection (g), the Secretary is authorized to award grants to local educational agencies experiencing overcrowding in the schools served by the local educational agencies, for the construction and renovation of safe, healthy, high-performance school buildings.

`(b) Application- Each local educational agency desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such additional information as the Secretary may require.

`(c) Priority- In awarding grants under this section, the Secretary shall give priority to local educational agencies--

`(1) who have documented difficulties in meeting the public school choice requirements of paragraph (1)(E), (5)(A), (7)(C)(i), or (8)(A)(i) of section 1116(b), or section 1116(c)(10)(C)(vii); and

`(2) with the highest number of schools at or above capacity.

`(d) Award Basis- From funds remaining after awarding grants under subsection (c), the Secretary shall award grants to local educational agencies that are experiencing overcrowding in the schools served by the local educational agencies.

`(e) Prevailing Wages- Any laborer or mechanic employed by any contractor or subcontractor in the performance of work on any construction funded by a grant awarded under this section will be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor under subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act).

`(f) Definitions- In this section:

`(1) AT OR ABOVE CAPACITY- The term `at or above capacity', in reference to a school, means a school in which 1 additional student would increase the average class size of the school above the average class size of all schools in the State in which the school is located.

`(2) HEALTHY, HIGH-PERFORMANCE SCHOOL BUILDING- The term `healthy, high-performance school building' has the meaning given such term in section 5586.

`(g) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $250,000,000 for fiscal year 2006, and such sums as may be necessary for each of the 2 succeeding fiscal years.'.

(2) TABLE OF CONTENTS- The table of contents of the Elementary and Secondary Education Act of 1965 (20 U.S.C.6301 note) is amended by inserting after the item relating to section 1120B the following:

SEC. 402. SUPPLEMENTAL EDUCATIONAL SERVICES.

Section 1116(e) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6316(e)) is amended--

(1) in paragraph (4)--

(A) in subparagraph (B), by striking the semicolon and inserting `, including criteria that--

`(i) ensure that personnel delivering supplemental educational services to students have adequate qualifications; and

`(ii) may, at the State's discretion, ensure that personnel delivering supplemental educational services to students are teachers that are highly qualified, as such term is defined in section 9101;';

(B) in subparagraph (D), by striking `and' after the semicolon;

(C) in subparagraph (E), by striking the period and inserting `; and'; and

(D) by adding at the end the following:

`(F) ensure that the list of approved providers of supplemental educational services described in subparagraph (C) includes a choice of providers that have sufficient capacity to provide effective services for children who are limited English proficient and children with disabilities.';

(2) in paragraph (5)(C)--

(A) by striking `applicable'; and

(B) by inserting before the period `, and acknowledge in writing that, as an approved provider in the relevant State educational agency program of providing supplemental educational services, the provider is deemed to be a recipient of Federal financial assistance';

(3) by redesignating paragraphs (6), (7), (8), (9), (10), (11), and (12) as paragraphs (7), (8), (9), (10), (11), (12), and (13), respectively;

(4) by inserting after paragraph (5) the following:

`(6) RULE OF CONSTRUCTION- Nothing in this section shall be construed to prohibit a local educational agency from being considered by a State educational agency as a potential provider of supplemental educational services under this subsection, if such local educational agency meets the criteria adopted by the State educational agency in accordance with paragraph (5).';

(5) in paragraph (13) (as redesignated by paragraph (3))--

(A) in subparagraph (B)--

(i) in clause (ii), by striking `and' after the semicolon;

(ii) in clause (iii), by striking `and' after the semicolon; and

(iii) by adding at the end the following:

`(iv) may employ teachers who are highly qualified, as such term is defined in section 9101; and

`(v) pursuant to its inclusion on the relevant State educational agency's list described in paragraph (4)(C), is deemed to be a recipient of Federal financial assistance; and'; and

(B) in subparagraph (C)--

(i) in the matter preceding clause (i), by striking `are';

(ii) in clause (i)--

(I) by inserting `are' before `in addition'; and

(II) by striking `and' after the semicolon;

(iii) in clause (ii), by striking the period and inserting `; and'; and

(iv) by adding at the end the following:

`(iii) if provided by providers that are included on the relevant State educational agency's list described in paragraph (4)(C), shall be deemed to be programs or activities of the relevant State educational agency.'; and

(6) by adding at the end the following:

`(14) CIVIL RIGHTS- In providing supplemental educational services under this subsection, no State educational agency or local educational agency may, directly or through contractual, licensing, or other arrangements with a provider of supplemental educational services, engage in any form of discrimination prohibited by--

`(A) title VI of the Civil Rights Act of 1964;

`(B) title IX of the Education Amendments of 1972;

`(C) section 504 of the Rehabilitation Act of 1973;

`(D) titles II and III of the Americans with Disabilities Act;

`(E) the Age Discrimination Act of 1975;

`(F) regulations promulgated under the authority of the laws listed in subparagraphs (A) through (E); or

`(G) other Federal civil rights laws.'.

SEC. 403. QUALIFICATIONS FOR TEACHERS AND PARAPROFESSIONALS.

(a) High Objective Uniform State Standard of Evaluation- Section 1119 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6319) is amended--

(1) in subsection (a)(2)--

(A) by redesignating subparagraphs (A) through (C) as clauses (i) through (iii), respectively, and indenting as appropriate;

(B) by striking `(2) STATE PLAN- As part' and inserting the following:

`(2) STATE PLAN-

`(A) IN GENERAL- As part'; and

(C) by adding at the end the following:

`(B) AVAILABILITY OF STATE STANDARDS- Each State educational agency shall make available to teachers in the State the high objective uniform State standard of evaluation, as described in section 9101(23)(C)(ii), for the purpose of meeting the teacher qualification requirements established under this section.';

(2) by redesignating subsections (e), (f), (g), (h), (i), (j), (k), and (l) as subsections (f), (g), (h), (i), (j), (k), (l), and (m), respectively;

(3) by inserting after subsection (d) the following:

`(e) State Responsibilities- Each State educational agency shall ensure that local educational agencies in the State make available all options described in subparagraphs (A) through (C) of subsection (c)(1) to each new or existing paraprofessional for the purpose of demonstrating the qualifications of the paraprofessional, consistent with the requirements of this section.'; and

(4) in subsection (l) (as redesignated by paragraph (2)), by striking `subsection (l)' and inserting `subsection (m)'.

(b) Definition of Highly Qualified Teachers- Section 9101(23)(B)(ii) is amended--

(1) in subclause (I), by striking `or' after the semicolon;

(2) in subclause (II), by striking `and' after the semicolon; and

(3) by adding at the end the following:

`(III) in the case of a middle school teacher, passing a State-approved middle school generalist exam when the teacher receives a license to teach middle school in the State;

`(IV) obtaining a State middle school or secondary school social studies certificate that qualifies the teacher to teach history, geography, economics, civics, and government in middle schools or in secondary schools, respectively, in the State; or

`(V) obtaining a State middle school or secondary school science certificate that qualifies the teacher to teach earth science, biology, chemistry, and physics in middle schools or secondary schools, respectively, in the State; and'.

(c) Ensuring Highly Qualified Teachers-

(1) REQUIREMENT- The Secretary of Education shall improve coordination among the teacher quality programs authorized under the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.), the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), and the Carl D. Perkins Vocational and Technical Education Act of 1998 (20 U.S.C. 2301 et seq.), to provide a unified effort in strengthening the American teaching workforce and ensuring highly qualified teachers.

(2) REPORT- Not later than 6 months after the date of enactment of this Act, the Secretary of Education shall submit a report to the relevant committees of Congress, that shall be made available on the website of the Department of Education, on efforts to coordinate programs pursuant to paragraph (1).

Subtitle B--Adequate Yearly Progress Determinations

SEC. 421. REVIEW OF ADEQUATE YEARLY PROGRESS DETERMINATIONS FOR SCHOOLS FOR THE 2002-2003 SCHOOL YEAR.

(a) In General- The Secretary shall require each local educational agency to provide each school served by the agency with an opportunity to request a review of a determination by the agency that the school did not make adequate yearly progress for the 2002-2003 school year.

(b) Final Determination- Not later than 30 days after receipt of a request by a school for a review under this section, a local educational agency shall issue and make publicly available a final determination on whether the school made adequate yearly progress for the 2002-2003 school year.

(c) Evidence- In conducting a review under this section, a local educational agency shall--

(1) allow the principal of the school involved to submit evidence on whether the school made adequate yearly progress for the 2002-2003 school year; and

(2) consider that evidence before making a final determination under subsection (b).

(d) Standard of Review- In conducting a review under this section, a local educational agency shall revise, consistent with the applicable State plan under section 1111 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311), the local educational agency's original determination that a school did not make adequate yearly progress for the 2002-2003 school year if the agency finds that the school made such progress, taking into consideration--

(1) the amendments made to part 200 of title 34, Code of Federal Regulations (68 Fed. Reg. 68698) (relating to accountability for the academic achievement of students with the most significant cognitive disabilities); or

(2) any regulation or guidance that, subsequent to the date of such original determination, was issued by the Secretary relating to--

(A) the assessment of limited English proficient children;

(B) the inclusion of limited English proficient children as part of the subgroup described in section 1111(b)(2)(C)(v)(II)(dd) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311(b)(2)(C)(v)(II)(dd)) after such children have obtained English proficiency; or

(C) any requirement under section 1111(b)(2)(I)(ii) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311(b)(2)(I)(ii)).

(e) Effect of Revised Determination-

(1) IN GENERAL- If pursuant to a review under this section a local educational agency determines that a school made adequate yearly progress for the 2002-2003 school year, upon such determination--

(A) any action by the Secretary, the State educational agency, or the local educational agency that was taken because of a prior determination that the school did not make such progress shall be terminated; and

(B) any obligations or actions required of the local educational agency or the school because of the prior determination shall cease to be required.

(2) EXCEPTIONS- Notwithstanding paragraph (1), a determination under this section shall not affect any obligation or action required of a local educational agency or school under the following:

(A) Section 1116(b)(13) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6316(b)(13)) (requiring a local educational agency to continue to permit a child who transferred to another school under such section to remain in that school until completion of the highest grade in the school).

(B) Section 1116(e)(9) of the Elementary and Secondary Education Act of 1965 (as redesignated by section 402(3)) (20 U.S.C. 6316(e)(9)) (requiring a local educational agency to continue to provide supplemental educational services under such section until the end of the school year).

(3) SUBSEQUENT DETERMINATIONS- In determining whether a school is subject to school improvement, corrective action, or restructuring as a result of not making adequate yearly progress, the Secretary, a State educational agency, or a local educational agency may not take into account a determination that the school did not make adequate yearly progress for the 2002-2003 school year if such determination was revised under this section and the school received a final determination of having made adequate yearly progress for the 2002-2003 school year.

(f) Notification- The Secretary--

(1) shall require each State educational agency to notify each school served by the agency of the school's ability to request a review under this section; and

(2) not later than 30 days after the date of the enactment of this section, shall notify the public by means of the Department of Education's website of the review process established under this section.

SEC. 422. REVIEW OF ADEQUATE YEARLY PROGRESS DETERMINATIONS FOR LOCAL EDUCATIONAL AGENCIES FOR THE 2002-2003 SCHOOL YEAR.

(a) In General- The Secretary shall require each State educational agency to provide each local educational agency in the State with an opportunity to request a review of a determination by the State educational agency that the local educational agency did not make adequate yearly progress for the 2002-2003 school year.

(b) Application of Certain Provisions- Except as inconsistent with, or inapplicable to, this section, the provisions of section 421 shall apply to review by a State educational agency of a determination described in subsection (a) in the same manner and to the same extent as such provisions apply to review by a local educational agency of a determination described in section 421(a).

SEC. 423. DEFINITIONS.

In this subtitle:

(1) The term `adequate yearly progress' has the meaning given to that term in section 1111(b)(2)(C) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311(b)(2)(C)).

(2) The term `local educational agency' means a local educational agency (as that term is defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)) receiving funds under part A of title I of such Act (20 U.S.C. 6311 et seq.).

(3) The term `Secretary' means the Secretary of Education.

(4) The term `school' means an elementary school or a secondary school (as those terms are defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)) served under part A of title I of such Act (20 U.S.C. 6311 et seq.).

(5) The term `State educational agency' means a State educational agency (as that term is defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)) receiving funds under part A of title I of such Act (20 U.S.C. 6311 et seq.).

Subtitle C--Technical Assistance

SEC. 451. TECHNICAL ASSISTANCE.

(a) In General- Part F of title IX of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7941) is amended--

(1) in the part heading, by inserting `AND TECHNICAL ASSISTANCE' after `EVALUATIONS'; and

(2) by adding at the end the following:

`SEC. 9602. TECHNICAL ASSISTANCE.

`The Secretary shall ensure that the technical assistance provided by, and the research developed and disseminated through, the Institute of Education Sciences and other offices or agencies of the Department provide educators and parents with the needed information and support for identifying and using educational strategies, programs, and practices, including strategies, programs, and practices available through the clearinghouses supported under the Education Sciences Reform Act of 2002 (20 U.S.C. 9501 et seq.) and other federally supported clearinghouses, that have been successful in improving educational opportunities and achievement for all students.'.

(b) Table of Contents- The table of contents of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 note) is amended by inserting after the item relating to section 9601 the following:

TITLE V--IMPROVING ASSESSMENT AND ACCOUNTABILITY

SEC. 501. GRANTS FOR INCREASING DATA CAPACITY FOR PURPOSES OF ASSESSMENT AND ACCOUNTABILITY.

(a) Program Authorized- From funds appropriated for a fiscal year, the Secretary may award grants, on a competitive basis, to State educational agencies--

(1) to enable the State educational agencies to develop or increase the capacity of data systems for assessment and accountability purposes, including the collection of graduation rates; and

(2) to award subgrants to increase the capacity of local educational agencies to upgrade, create, or manage longitudinal data systems for the purpose of measuring student academic progress and achievement.

(b) State Application- Each 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.

(c) State Use of Funds- Each State educational agency that receives a grant under this section shall use--

(1) not more than 20 percent of the grant funds for the purpose of--

(A) increasing the capacity of, or creating, State databases to collect, disaggregate, and report information related to student achievement, enrollment, and graduation rates for assessment and accountability purposes; and

(B) reporting, on an annual basis, for the elementary schools and secondary schools within the State, on--

(i) the enrollment data from the beginning of the academic year;

(ii) the enrollment data from the end of the academic year; and

(iii) the twelfth grade graduation rates; and

(2) not less than 80 percent of the grant funds to award subgrants to local educational agencies within the State to enable the local educational agencies to carry out the authorized activities described in subsection (e).

(d) Local Application- Each local educational agency 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. Each such application shall include, at a minimum, a demonstration of the local educational agency's ability to put a longitudinal data system in place.

(e) Local Authorized Activities- Each local educational agency that receives a subgrant under this section shall use the subgrant funds to increase the capacity of the local educational agency to upgrade or manage longitudinal data systems consistent with the uses in subsection (c)(1), by--

(1) purchasing database software or hardware;

(2) hiring additional staff for the purpose of managing such data;

(3) providing professional development or additional training for such staff; and

(4) providing professional development or training for principals and teachers on how to effectively use such data to implement instructional strategies to improve student achievement and graduation rates.

(f) Definitions- In this section:

(1) GRADUATION RATE- The term `graduation rate' means the percentage that--

(A) the total number of students who--

(i) graduate from a secondary school with a regular diploma (which shall not include the recognized equivalent of a secondary school diploma or an alternative degree) in an academic year; and

(ii) graduated on time by progressing 1 grade per academic year; represents of

(B) the total number of students who entered the secondary school in the entry level academic year applicable to the graduating students.

(2) SECRETARY- The term `Secretary' means the Secretary of Education.

(3) STATE EDUCATIONAL AGENCY AND LOCAL EDUCATIONAL AGENCY- The terms `State educational agency' and `local educational agency' have the meanings given such terms in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

(g) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $100,000,000 for fiscal year 2006, and such sums as may be necessary for each of the 2 succeeding fiscal years.

SEC. 502. GRANTS FOR ASSESSMENT OF CHILDREN WITH DISABILITIES AND CHILDREN WHO ARE LIMITED ENGLISH PROFICIENT.

(a) Grants for Assessment of Children With Disabilities and Children Who Are Limited English Proficient- Part E of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6491 et seq.) is amended by adding at the end the following:

`SEC. 1505. GRANTS FOR ASSESSMENT OF CHILDREN WITH DISABILITIES AND CHILDREN WHO ARE LIMITED ENGLISH PROFICIENT.

`(a) Grants Authorized- From amounts authorized to be appropriated under subsection (e) for a fiscal year, the Secretary shall award grants, on a competitive basis, to State educational agencies, or to consortia of State educational agencies, to enable the State educational agencies or consortia to collaborate with institutions of higher education, research institutions, or other organizations--

`(1) to design and improve State academic assessments for students who are limited English proficient and students with disabilities; and

`(2) to ensure the most accurate, valid, and reliable means to assess academic content standards and student academic achievement standards for students who are limited English proficient and students with disabilities.

`(b) Authorized Activities- A State educational agency or consortium that receives a grant under this section shall use the grant funds to carry out 1 or more of the following activities:

`(1) Developing alternate assessments for students with disabilities, consistent with section 1111 and the amendments made on December 9, 2003, to part 200 of title 34, Code of Federal Regulations (68 Fed. Reg. 68698) (relating to accountability for the academic achievement of students with the most significant cognitive disabilities), including--

`(A) the alignment of such assessments, as appropriate and consistent with such amendments, with--

`(i) State student academic achievement standards and State academic content standards for all students; or

`(ii) alternate State student academic achievement standards that reflect the intended instructional construct for students with disabilities;

`(B) activities to ensure that such assessments do not reflect the disabilities, or associated characteristics, of the students that are extraneous to the intent of the measurement;

`(C) the development of an implementation plan for pilot tests for such assessments, in order to determine the level of appropriateness and feasibility of full-scale administration; and

`(D) activities that provide for the retention of all feasible standardized features in the alternate assessments.

`(2) Developing alternate assessments that meet the requirements of section 1111 for students who are limited English proficient, including--

`(A) the alignment of such assessments with State student academic achievement standards and State academic content standards for all students;

`(B) the development of parallel native language assessments or linguistically modified assessments for limited English proficient students that meet the requirements of section 1111(b)(3)(C)(ix)(III);

`(C) the development of an implementation plan for pilot tests for such assessments, in order to determine the level of appropriateness and feasibility of full-scale administration; and

`(D) activities that provide for the retention of all feasible standardized features in the alternate assessments.

`(3) Developing, modifying, or revising State policies and criteria for appropriate accommodations to ensure the full participation of students who are limited English proficient and students with disabilities in State academic assessments, including--

`(A) developing a plan to ensure that assessments provided with accommodations are fully included and integrated into the accountability system, for the purpose of making the determinations of adequate yearly progress required under section 1116;

`(B) ensuring the validity, reliability, and appropriateness of such accommodations, such as--

`(i) a modification to the presentation or format of the assessment;

`(ii) the use of assistive devices;

`(iii) an extension of the time allowed for testing;

`(iv) an alteration of the test setting or procedures;

`(v) the administration of portions of the test in a method appropriate for the level of language proficiency of the test taker;

`(vi) the use of a glossary or dictionary; and

`(vii) the use of a linguistically modified assessment;

`(C) ensuring that State policies and criteria for appropriate accommodations take into account the form or program of instruction provided to students, including the level of difficulty, reliability, cultural difference, and content equivalence of such form or program;

`(D) ensuring that such policies are consistent with the standards prepared by the Joint Committee on Standards for Educational and Psychological Testing of the American Educational Research Association, the American Psychological Association, and the National Council on Measurement in Education; and

`(E) developing a plan for providing training on the use of accommodations to school instructional staff, families, students, and other appropriate parties.

`(4) Developing universally designed assessments that can be accessible to all students, including--

`(A) examining test item or test performance for students with disabilities and students who are limited English proficient, to determine the extent to which the test item or test is universally designed;

`(B) using think aloud and cognitive laboratory procedures, as well as item statistics, to identify test items that may pose particular problems for students with disabilities or students who are limited English proficient;

`(C) developing and implementing a plan to ensure that developers and reviewers of test items are trained in the principles of universal design; and

`(D) developing computer-based applications of universal design principles.

`(c) Application- Each State educational agency, or consortium of State educational agencies, desiring to apply for 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) information regarding the institutions of higher education, research institutions, or other organizations that are collaborating with the State educational agency or consortium, in accordance with subsection (a);

`(2) in the case of a consortium of State educational agencies, the designation of 1 State educational agency as the fiscal agent for the receipt of grant funds;

`(3) a description of the process and criteria by which the State educational agency will identify students that are unable to participate in general State content assessments and are eligible to take alternate assessments, consistent with the amendments made to part 200 of title 34, Code of Federal Regulations (68 Fed. Reg. 68698);

`(4) in the case of a State educational agency or consortium carrying out the activity described in subsection (b)(1)(A), a description of how the State educational agency plans to fulfill the requirement of subsection (b)(1)(A);

`(5) in the case of a State educational agency or consortium carrying out the activities described in paragraphs (1), (2), and (4) of subsection (b), information regarding the proposed techniques for the development of alternate assessments, including a description of the technical adequacy of, technical aspects of, and scoring for such assessments;

`(6) a plan for providing training for school instructional staff, families, students, and other appropriate parties on the use of alternate assessments; and

`(7) information on how the scores of students participating in alternate assessments will be reported to the public and to parents.

`(d) Evaluation and Reporting Requirements- Each State educational agency receiving a grant under this section shall submit an annual report to the Secretary describing the activities carried out under the grant and the result of such activities, including--

`(1) details on the effectiveness of the activities supported under this section in helping students with disabilities, or students who are limited English proficient, better participate in State assessment programs; and

`(2) information on the change in achievement, if any, of students with disabilities and students who are limited English proficient, as a result of a more accurate assessment of such students.

`(e) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $50,000,000 for fiscal year 2006, and such sums as may be necessary for each of the 2 succeeding fiscal years.'.

(b) Table of Contents- The table of contents of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 note) is amended by inserting after the item relating to section 1504 the following:

SEC. 503. REPORTS ON STUDENT ENROLLMENT AND GRADUATION RATES.

(a) Student Enrollment and Graduation Rates- Part E of title I of the Elementary and Secondary Education Act of 1965 (as amended by section 502) (20 U.S.C. 6491 et seq.) is amended by adding at the end the following:

`SEC. 1506. REPORTS ON STUDENT ENROLLMENT AND GRADUATION RATES.

`(a) In General- The Secretary shall collect from each State educational agency, local educational agency, and school, on an annual basis, the following data:

`(1) The number of students enrolled in each of grades 7 through 12 at the beginning of the most recent school year.

`(2) The number of students enrolled in each of grades 7 through 12 at the end of the most recent school year.

`(3) The graduation rate for the most recent school year.

`(4) The data described in paragraphs (1) through (3), disaggregated by the groups of students described in section 1111(b)(2)(C)(v)(II).

`(b) Annual Report- The Secretary shall report the information collected under subsection (a) on an annual basis.'.

(b) Table of Contents- The table of contents of the Elementary and Secondary Education Act of 1965 (as amended by section 502(b)) (20 U.S.C. 6301 note) is amended by inserting after the item relating to section 1505 the following:

SEC. 504. CIVIL RIGHTS.

Section 9534 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7914) is amended--

(1) by redesignating subsections (a) and (b) as subsections (b) and (c), respectively; and

(2) by inserting before subsection (b) (as redesignated by paragraph (1)) the following:

`(a) Prohibition of Discrimination- Discrimination on the basis of race, color, religion, sex (except as otherwise permitted under title IX of the Education Amendments of 1972), national origin, or disability in any program funded under this Act is prohibited.'.

TITLE VI--SENSE OF THE SENATE REGARDING FUNDING FOR ELEMENTARY AND SECONDARY EDUCATION

SEC. 601. SENSE OF THE SENATE.

(a) Findings- The Senate finds the following:

(1) Congress enacted, with bipartisan support, and the President signed into law the No Child Left Behind Act of 2001 (Public Law 107-210; 115 Stat. 1425), that reauthorized the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.). The new law required States to set high standards for learning and required schools to implement reforms to help improve student achievement. In return, Congress and the President pledged to make sure schools would have resources to carry out the reforms as called for in the new law.

(2) $22,750,000,000 is needed to fund part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) in fiscal year 2006, as promised pursuant to the No Child Left Behind Act of 2001 (Public Law 107-210; 115 Stat. 1425).

(3) $25,000,000,000 is needed to fund part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) in fiscal year 2007, as promised pursuant to the No Child Left Behind Act of 2001 (Public Law 107-210; 115 Stat. 1425).

(b) Sense of the Senate- It is the sense of the Senate that--

(1) it is in the best interest of the Nation that all students have access to a high-quality elementary and secondary education; and

(2) part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) should be funded as promised pursuant to the No Child Left Behind Act of 2001 (Public Law 107-210; 115 Stat. 1425).

TITLE VII--PROVIDING A ROADMAP FOR FIRST GENERATION COLLEGE FOR STUDENTS

SEC. 701. EXPANSION OF TRIO AND GEARUP.

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended--

(1) in section 402A(f), by striking `$700,000,000 for fiscal year 1999' and inserting `$1,000,000,000 for fiscal year 2006'; and

(2) by striking section 404H and inserting the following:

`SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

`There are authorized to be appropriated to carry out this chapter $400,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 4 succeeding fiscal years.'.

TITLE VIII--COLLEGE TUITION RELIEF FOR STUDENTS AND THEIR FAMILIES THROUGH PELL GRANTS

SEC. 801. PELL GRANTS TAX TABLES HOLD HARMLESS.

Notwithstanding any other provision of law, the annual updates to the allowance for State and other taxes in the tables used in the Federal Need Analysis Methodology to determine a student's expected family contribution for the award year 2005-2006 under part F of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087kk et seq.), published in the Federal Register on Thursday, December 23, 2004 (69 Fed. Reg. 76926), shall not apply to a student to the extent the updates will reduce the amount of Federal student assistance for which the student is eligible.

SEC. 802. SENSE OF THE SENATE REGARDING INCREASING THE MAXIMUM PELL GRANT.

(a) Findings- The Senate makes the following findings:

(1) Increasing the percentage of individuals who obtain a postsecondary education has become increasingly important, not just to the individual beneficiary, but to the Nation as a whole. The growth and continued expansion of the Nation's economy is heavily dependent on an educated and highly skilled workforce.

(2) The opportunity to gain a postsecondary education also is important to the Nation as a means to help advance the American ideals of progress and equality.

(3) The Federal Government plays an invaluable role in making student financial aid available to ensure that qualified students are able to attend college, regardless of their financial means. Since the inception of the Pell Grant program in 1973, nearly 80,000,000 grants have helped low- and middle-income students go to college, enrich their lives, and become productive members of society.

(4) Nationwide, almost 63 percent of secondary school graduates continue on to higher education immediately after completing secondary school. This degree of college participation would not exist without the Federal investment in student aid, especially the Pell Grant program. More than 4,000,000 low- and middle-income students receive Pell Grants; 95 percent of whom have a family income of not more than $40,000.

(5) In the next 10 years, the number of undergraduate students enrolled in the Nation's colleges and universities will increase by 15 percent to more than 15,000,000 students. Many of these students will be the first in their families to attend college. The continued investment in the Pell Grant program is essential if college is to remain an achievable part of the American dream.

(6) Increasing the maximum Pell Grant to $5,100 would allow more than 430,000 additional students to benefit from the program.

(7) Increasing the maximum Pell Grant to $5,100 would result in 200,000 new Pell Grant recipients.

(8) Pell Grant recipients are more likely to graduate with student loan debt and to amass more debt than other student borrowers. Increasing the maximum Pell Grant to $5,100 will help remedy this disparity.

(b) Sense of the Senate- It is the sense of the Senate that--

(1) the maximum Pell Grant should be increased to $5,100 during award year 2006-2007; and

(2) the maximum Pell Grant amount set by Congress should be the amount eligible students receive.

SEC. 803. ESTABLISHMENT OF A PELL DEMONSTRATION PROGRAM.

(a) Findings- Congress finds that:

(1) A student remains eligible to receive a Federal Pell Grant as long as the student is income-eligible and has not received a bachelor's degree.

(2) By encouraging persistence and degree acquisition in a timely manner, the Federal Government, in effect, saves money--

(A) by reducing the courses that do not lead to a degree; and

(B) by helping students get the financial benefits of a college degree as soon as possible.

(b) Pell Demonstration Program-

(1) AUTHORIZATION- The Secretary of Education shall establish a demonstration program to facilitate the ability of low-income students to complete the students' degree within 150 percent of the time expected to complete such degree.

(2) GRANTS- The Secretary of Education shall award competitive grants to institutions of higher education to enable students who are eligible to receive Federal Pell Grants under subpart 1 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a et seq.) to enroll in courses in the summer at such institutions to expedite the students' graduation from the institutions.

(3) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection $500,000,000 for the period of fiscal years 2006 through 2008.

TITLE IX--TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL EDUCATION TEACHERS

SEC. 901. PURPOSE.

It is the purpose of this title to make public college tuition free for future mathematics, science, and special education teachers and to provide additional assistance to students eligible to receive a Federal Pell Grant under subpart 1 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a et seq.).

SEC. 902. TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL EDUCATION TEACHERS.

(a) Additional Amounts for Teachers in Mathematics, Science, and Special Education-

(1) FFEL LOANS- Section 428J(c)(3) of the Higher Education Act of 1965 (20 U.S.C. 1078-10(c)(3)) is amended by striking `$17,500' and inserting `$23,000'.

(2) DIRECT LOANS- Section 460(c)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087j(c)(3)) is amended by striking `$17,500' and inserting `$23,000'.

(b) Effective Date- The amendments made by this section shall apply only with respect to eligible individuals who are new borrowers on or after October 1, 1998.

SEC. 903. OFFSET FOR TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL EDUCATION TEACHERS.

(a) Special Allowances-

(1) IN GENERAL- Section 438(b)(2)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(B)) is amended--

(A) in clause (iv), by striking `or refunded after September 30, 2004, and before January 1, 2006,' and inserting `or refunded on or after the date of enactment of the Taxpayer-Teacher Protection Act of 2004,'; and

(B) by striking clause (v) and inserting the following:

`(v) Notwithstanding clauses (i) and (ii), the quarterly rate of the special allowance shall be the rate determined under subparagraph (A), (E), (F), (G), (H), or (I) of this paragraph, or paragraph (4), as the case may be, for loans--

`(I) originated, transferred, or purchased on or after the date of enactment of the Taxpayer-Teacher Protection Act of 2004;

`(II) financed by an obligation that has matured, been retired, or defeased on or after the date of enactment of the Taxpayer-Teacher Protection Act of 2004;

`(III) which the special allowance was determined under such subparagraphs or paragraph, as the case may be, on or after the date of enactment of the Taxpayer-Teacher Protection Act of 2004;

`(IV) for which the maturity date of the obligation from which funds were obtained for such loans was extended on or after the date of enactment of the Taxpayer-Teacher Protection Act of 2004; or

`(V) sold or transferred to any other holder on or after the date of enactment of the Taxpayer-Teacher Protection Act of 2004.'.

(2) RULE OF CONSTRUCTION- Nothing in the amendment made by paragraph (1) shall be construed to abrogate a contractual agreement between the Federal Government and a student loan provider.

(b) Available Funds From Reduced Expenditures-

(1) IN GENERAL- Any funds available to the Secretary of Education as a result of reduced expenditures under section 438 of the Higher Education Act of 1965 (20 U.S.C. 1087-1) secured by the enactment of subsection (a) shall first be used by the Secretary for loan cancellation and loan forgiveness for teachers under sections 428J and 460 of the Higher Education Act of 1965 (20 U.S.C. 1078-10, 1087j), as amended by section 902 of this Act.

(2) REMAINING FUNDS-

(A) IN GENERAL- Any such funds remaining after carrying out paragraph (1) shall be used by the Secretary of Education to make payments to each nonprofit lender in an amount that bears the same relation to the remaining funds as the amount the nonprofit lender receives for fiscal year 2005 under section 438(b)(2)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(B)) bears to the total amount received by nonprofit lenders for fiscal year 2005 under such section.

(B) DEFINITION OF NONPROFIT LENDER- In this paragraph the term `nonprofit lender' means an eligible lender (as defined in section 435(d) of the Higher Education Act of 1965 (20 U.S.C.1085(d)) that--

(i) is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986;

(ii) is a nonprofit entity as defined by applicable State law; and

(iii) meets the following requirements:

(I) The nonprofit lender does not confer a salary or benefits to any employee of the nonprofit lender in an amount that is in excess of the salary and benefits provided to the Secretary of Education by the Department of Education.

(II) The nonprofit lender does not maintain an ongoing relationship whereby the nonprofit lender passes on revenue directly or indirectly through lease, securitization, resale, or any other financial instrument to a for-profit entity or to shareholders.

(III) The nonprofit lender does not offer benefits to a borrower in a manner directly or indirectly predicated on such borrower's participation--

(aa) in a program under part B or D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq., 1087a et seq.); or

(bb) with any particular lender.

(IV) The nonprofit lender certifies that the nonprofit lender uses the payment received pursuant to subparagraph (A) to confer grant or scholarship benefits to students who are eligible to receive Federal Pell Grants under subpart 1 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a et seq.).

(V) The nonprofit lender is subject to public oversight through either a State charter, or through not less than 50 percent of the nonprofit lender's board of directors consisting of State appointed representatives.

(VI) The nonprofit lender does not engage in the marketing of the relative value of programs under part B of title IV of the Higher Education Act of 1965 as compared to programs under part D of title IV of the Higher Education Act of 1965, nor does the nonprofit lender engage in the marketing of loans or programs offered by for-profit lenders. This subclause shall not be construed to prohibit the nonprofit lender from conferring basic information on lenders under part B of title IV of the Higher Education Act of 1965 and the related benefits offered by such nonprofit lenders.

TITLE X--MAKING COLLEGE AFFORDABLE FOR ALL STUDENTS

SEC. 1001. EXPANSION OF DEDUCTION FOR HIGHER EDUCATION EXPENSES.

(a) Amount of Deduction- Subsection (b) of section 222 of the Internal Revenue Code of 1986 (relating to deduction for qualified tuition and related expenses) is amended to read as follows:

`(b) Limitations-

`(1) DOLLAR LIMITATIONS-

`(A) IN GENERAL- Except as provided in paragraph (2), the amount allowed as a deduction under subsection (a) with respect to the taxpayer for any taxable year shall not exceed the applicable dollar limit.

`(B) APPLICABLE DOLLAR LIMIT- The applicable dollar limit for any taxable year shall be determined as follows:

2005 and 2006

--$6,000

2007 and 2008

--$8,000

2009 and 2010

--$10,000

2011 and thereafter

--$12,000.

`(2) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME-

`(A) IN GENERAL- The amount which would (but for this paragraph) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under subparagraph (B).

`(B) AMOUNT OF REDUCTION- The amount determined under this subparagraph equals the amount which bears the same ratio to the amount which would be so taken into account as--

`(i) the excess of--

`(I) the taxpayer's modified adjusted gross income for such taxable year, over

`(II) $65,000 ($130,000 in the case of a joint return), bears to

`(ii) $15,000 ($30,000 in the case of a joint return).

`(C) MODIFIED ADJUSTED GROSS INCOME- For purposes of this paragraph, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined--

`(i) without regard to this section and sections 199, 911, 931, and 933, and

`(ii) after the application of sections 86, 135, 137, 219, 221, and 469.

For purposes of the sections referred to in clause (ii), adjusted gross income shall be determined without regard to the deduction allowed under this section.

`(D) INFLATION ADJUSTMENTS-

`(i) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2005, both of the dollar amounts in subparagraph (B)(i)(II) shall be increased by an amount equal to--

`(I) such dollar amount, multiplied by

`(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2004' for `calendar year 1992' in subparagraph (B) thereof.

`(ii) ROUNDING- If any amount as adjusted under clause (i) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50.'.

(b) Qualified Tuition and Related Expenses of Eligible Students-

(1) IN GENERAL- Section 222(a) of the Internal Revenue Code of 1986 (relating to allowance of deduction) is amended by inserting `of eligible students' after `expenses'.

(2) DEFINITION OF ELIGIBLE STUDENT- Section 222(d) of such Code (relating to definitions and special rules) is amended by redesignating paragraphs (2) through (6) as paragraphs (3) through (7), respectively, and by inserting after paragraph (1) the following new paragraph:

`(2) ELIGIBLE STUDENT- The term `eligible student' has the meaning given such term by section 36(b)(3).'.

(c) Deduction Made Permanent- Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 (relating to sunset of provisions of such Act) shall not apply to the amendments made by section 431 of such Act.

(d) Effective Date- The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2004.

SEC. 1002. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS.

(a) In General- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25B the following new section:

`SEC. 25C. INTEREST ON HIGHER EDUCATION LOANS.

`(a) Allowance of Credit- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan.

`(b) Maximum Credit-

`(1) IN GENERAL- Except as provided in paragraph (2), the credit allowed by subsection (a) for the taxable year shall not exceed $1,500.

`(2) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME-

`(A) IN GENERAL- If the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($100,000 in the case of a joint return), the amount which would (but for this paragraph) be allowable as a credit under this section shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so allowable as such excess bears to $20,000 ($40,000 in the case of a joint return).

`(B) MODIFIED ADJUSTED GROSS INCOME- The term `modified adjusted gross income' means adjusted gross income determined without regard to sections 199, 222, 911, 931, and 933.

`(C) INFLATION ADJUSTMENT- In the case of any taxable year beginning after 2005, the $50,000 and $100,000 amounts referred to in subparagraph (A) shall be increased by an amount equal to--

`(i) such dollar amount, multiplied by

`(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `2004' for `1992'.

`(D) ROUNDING- If any amount as adjusted under subparagraph (C) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50.

`(c) Dependents Not Eligible for Credit- No credit shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual's taxable year begins.

`(d) Limit on Period Credit Allowed- A credit shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months (whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan.

`(e) Definitions- For purposes of this section--

`(1) QUALIFIED EDUCATION LOAN- The term `qualified education loan' has the meaning given such term by section 221(d)(1).

`(2) DEPENDENT- The term `dependent' has the meaning given such term by section 152.

`(f) Special Rules-

`(1) DENIAL OF DOUBLE BENEFIT- No credit shall be allowed under this section for any amount taken into account for any deduction under any other provision of this chapter.

`(2) MARRIED COUPLES MUST FILE JOINT RETURN- If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year.

`(3) MARITAL STATUS- Marital status shall be determined in accordance with section 7703.'.

(b) Conforming Amendment- The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25B the following new item:

(c) Effective Date- The amendments made by this section shall apply to any qualified education loan (as defined in section 25C(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act, but only with respect to any loan interest payment due after December 31, 2004.

SEC. 1003. HOPE AND LIFETIME LEARNING CREDITS TO BE REFUNDABLE.

(a) Credit To Be Refundable- Section 25A of the Internal Revenue Code of 1986 (relating to Hope and Lifetime Learning credits) is hereby moved to subpart C of part IV of subchapter A of chapter 1 of such Code (relating to refundable credits) and inserted after section 35.

(b) Technical Amendments-

(1) Section 36 of such Code is redesignated as section 37.

(2) Section 25A of such Code (as moved by subsection (a)) is redesignated as section 36.

(3) Paragraph (1) of section 36(a) of such Code (as redesignated by paragraph (2)) is amended by striking `this chapter' and inserting `this subtitle'.

(4) Subparagraph (B) of section 72(t)(7) of such Code is amended by striking `section 25A(g)(2)' and inserting `section 36(g)(2)'.

(5) Subparagraph (A) of section 135(d)(2) of such Code is amended by striking `section 25A' and inserting `section 36'.

(6) Section 221(d) of such Code is amended--

(A) by striking `section 25A(g)(2)' in paragraph (2)(B) and inserting `section 36(g)(2)',

(B) by striking `section 25A(f)(2)' in the matter following paragraph (2)(B) and inserting `section 36(f)(2)', and

(C) by striking `section 25A(b)(3)' in paragraph (3) and inserting `section 36(b)(3)'.

(7) Section 222 of such Code is amended--

(A) by striking `section 25A' in subparagraph (A) of subsection (c)(2) and inserting `section 36',

(B) by striking `section 25A(f)' in subsection (d)(1) and inserting `section 36(f)', and

(C) by striking `section 25A(g)(2)' in subsection (d)(1) and inserting `section 36(g)(2)'.

(8) Section 529 of such Code is amended--

(A) by striking `section 25A(g)(2)' in subclause (I) of subsection (c)(3)(B)(v) and inserting `section 36(g)(2)',

(B) by striking `section 25A' in subclause (II) of subsection (c)(3)(B)(v) and inserting `section 36', and

(C) by striking `section 25A(b)(3)' in clause (i) of subsection (e)(3)(B) and inserting `section 36(b)(3)'.

(9) Section 530 of such Code is amended--

(A) by striking `section 25A(g)(2)' in subclause (I) of subsection (d)(2)(C)(i) and inserting `section 36(g)(2)',

(B) by striking `section 25A' in subclause (II) of subsection (d)(2)(C)(i) and inserting `section 36', and

(C) by striking `section 25A(g)(2)' in clause (iii) of subsection (d)(4)(B) and inserting `section 36(g)(2)'.

(10) Subsection (e) of section 6050S of such Code is amended by striking `section 25A' and inserting `section 36'.

(11) Subparagraph (J) of section 6213(g)(2) of such Code is amended by striking `section 25A(g)(1)' and inserting `section 36(g)(1)'.

(12) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period `or from section 36 of such Code'.

(13) The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 36 and inserting the following:

`Sec. 36. Hope and Lifetime Learning credits.

`Sec. 37. Overpayments of tax.'.

(14) The table of sections for subpart A of such part IV is amended by striking the item relating to section 25A.

(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2004.

END