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SEC. 102. FULLY FUNDING TITLE I OF ESEA .

Section 1002(a) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6302(a)) is amended by striking `$7,400,000,000 for fiscal year 1995' and all that follows through the period and inserting `$7,400,000,000 for fiscal year 2000, $7,600,000,000 for fiscal year 2001, $8,000,000,000 for fiscal year 2002, $8,400,000,000 for fiscal year 2003, and $11,400,000,000 for fiscal year 2004'.

SEC. 103. RESERVATIONS FOR ACCOUNTABILITY AND EVALUATION.

Section 1003 of the Elementary and Secondary Education Act of 1965 (20 U.S.C 6303) is amended to read as follows:

`SEC. 1003. RESERVATIONS FOR ACCOUNTABILITY AND EVALUATION.

`(a) STATE RESERVATIONS- Each State educational agency shall reserve 2.5 percent of the amount the State educational agency receives under part A for each of the fiscal years 2001 and 2002, and 3.5 percent of that amount for each of the fiscal years 2003 through 2005, to carry out subsection (b) and to carry out the State educational agency's responsibilities under sections 1111(b)(2), 1116 and 1117, including the State educational agency's statewide system of technical assistance and support for local educational agencies.

`(b) USES- Of the amount reserved under subsection (a) for any fiscal year, the State educational agency shall--

`(1) allocate at least 70 percent directly to local educational agencies, by--

`(A) giving first priority to making allocations to those local educational agencies with schools identified for corrective action under section 1116(c)(5), which local educational agencies shall use the allocation effectively to carry out corrective action, as described in section 1116(c)(5), in those schools; and

`(B) giving second priority to making allocations to those local educational agencies having other schools identified for school improvement under section 1116(c)(1), which local educational agencies shall use the allocation to bring about substantial improvement in the performance of those schools; or

`(2) use at least 70 percent to carry out an alternative system of intervention and corrective action approved by the Secretary under section 1111(b)(2)(B)(ii).'.

SEC. 104. STATE PLANS.

Section 1111 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311) is amended--

(1) in subsection (b)--

(A) by amending the subsection heading to read as follows:

`(b) STANDARDS, ACCOUNTABILITY, AND ASSESSMENTS- ';

(2) by amending paragraph (2) to read as follows;

`(2) ACCOUNTABILITY- (A) Each State receiving assistance under this part shall develop, implement, and describe in its State plan a statewide accountability system, for holding local educational agencies and schools that receive assistance under this part accountable for student performance, that meets the following criteria:

`(i) The system is based on the State content and student performance standards described in paragraph (1) and on the assessments described in paragraph (3), and includes multiple indicators, such as attendance and dropout rates.

`(ii) The system holds local educational agencies and schools accountable for student achievement in at least reading and mathematics.

`(B) The accountability system described in subparagraph (A) shall include a procedure for identifying local educational agencies and schools in need of improvement, intervening in those agencies and schools, and (when those interventions are not effective) implementing corrective actions not later than 3 years after first identifying such an agency or school, that--

`(i) complies with sections 1116 and 1117 and includes rigorous criteria for identifying those agencies and schools that are based on the failure of those agencies and schools to make continuous and substantial gains, which the Secretary may define in regulations, in overall student performance and in the performance of the lowest-performing students; or

`(ii) includes an alternative procedure for identifying and intervening in those agencies and schools, which gives highest priority to corrective actions in the lowest-performing agencies and schools that fail to show gains over an extended period, if the Secretary determines that--

`(I) the alternative procedure is at least as effective as the procedure described in clause (i) and in sections 1116 and 1117, and that the State has shown substantial overall achievement gains and a reduction in the achievement gap between high-performing and low-performing students in the State; or

`(II) the alternative procedure will be at least as effective as the procedures described in clause (i) and in sections 1116 and 1117.

`(C) Each Statewide accountability system shall describe how the State will recognize and reward local educational agencies and schools under this part.

`(D)(i) If the Secretary determines that a State has failed substantially to carry out a requirement of this part or a provision in its approved accountability system described in this paragraph, or that its performance has failed substantially to meet a performance indicator described in the statewide accountability system, the Secretary shall take, consistent with applicable due process procedures, 1 or more of the following steps to ensure that the purpose of this part is carried out promptly:

`(I) Providing, or arranging for the provision of, technical assistance to the State educational agency in question.

`(II) Requiring a plan for corrective action.

`(III) Suspending or terminating authority to grant waivers under the Education Flexibility Partnership Act of 1999.

`(IV) Suspending or terminating eligibility to participate in competitive grant programs under this Act.

`(V) Withholding, in whole or in part, State administrative funds available under this Act.

`(VI) Withholding, in whole or in part, program funds available to the State under this Act.

`(VII) Imposing 1 or more conditions upon the Secretary's approval of a State plan or application under this Act.

`(VIII) Taking other action authorized under part D of the General Education Provisions Act, such as a cease-and-desist order or compliance agreement.

`(IX) Taking any other appropriate accountability step that is consistent with this Act, including referral to the Department of Justice for enforcement.

`(ii) If remedial steps taken by the Secretary under clause (i) fail to correct the State's noncompliance, the Secretary shall take 1 or more additional steps under clause (i) to bring the State into compliance.';

(3) in paragraph (3), by inserting `, starting not later than the 2000-2001 school year,' after `that will be used';

(4) in subsection (d)(1)(B), by inserting `, and who are experts on educational standards, assessments, accountability, and the diverse educational needs of students' after `parents';

(5) in subsection (e)(1)--

(A) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively; and

(B) by inserting before subparagraph (B) (as so redesignated) the following:

`(A) be submitted for the first year for which this part is in effect following the enactment of the Comprehensive School Improvement and Accountability Act of 1999;'; and

(6) by amending subsection (g) to read as follows:

`(g) ENFORCEMENT- If the Secretary determines that a State is not carrying out the requirements of subsection (b)(2), the Secretary may take any of the actions described in subsection (b)(2)(D), in addition to any other action authorized by law.'.

SEC. 105. ACCOUNTABILITY.

Subsections (a) through (d) of section 1116 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6317) are amended to read as follows:

`(a) LOCAL REVIEW- Each local educational agency receiving funds under this part shall--

`(1) use the State assessments and other indicators described in the State plan, as well as any additional measures or indicators described in the local educational agency's plan, to review annually the progress of each school served under this part to determine if the school is making continuous and substantial gains as described in section 1111(b)(2) toward enabling the school's students to meet the State student performance standards described in the State plan; and

`(2) provide the results of the local annual review to schools so that the schools can continually refine the program of instruction to help all children served under this part in the schools meet the standards.

`(b) DESIGNATION OF DISTINGUISHED SCHOOLS- Each State educational agency shall designate as `Distinguished Schools' those schools served under this part that meet criteria established by the State. The criteria established in accordance with the preceding sentence may include--

`(1) making the continuous and substantial gains described in section 1111(b)(2) toward enabling the school's students to meet the State student performance standards described in the State plan for 3 consecutive years;

`(2) having nearly all students in the school meet the State `proficient' or `advanced' levels of student performance; and

`(3) achieving, or significantly improving, equity in participation and achievement of students of all gender and race enrolled in the school .

`(c) SCHOOL IMPROVEMENT-

`(1) IDENTIFICATION-

`(A) IN GENERAL- In order to improve staff, curriculum, and the services offered to children, so that the children can meet challenging State standards, each local educational agency shall identify for school improvement any school served under this part that--

`(i) for 2 consecutive years, failed to meet the State's criteria under section 1111(b)(2) for overall improvement or for improvement of the lowest performing students, unless the Secretary has approved an alternative procedure proposed by the State in the State's plan under section 1111(b)(2)(B)(ii); or

`(ii) on the day before the date of enactment of the Comprehensive School Improvement and Accountability Act of 1999, was in school improvement status under this section, as this section was in effect on such day.

`(B) TRANSITION- The 2-year consecutive year period described in subparagraph (A)(i) shall include any continuous period of time that includes the day before the date of enactment of the Comprehensive School Improvement and Accountability Act of 1999, during which a school did not make adequate progress as defined in the State's plan under section 1111(b)(2)(B), as such section was in effect on such day.

`(C) TARGETED ASSISTANCE SCHOOLS- In determining whether a school that is conducting a targeted assistance program under section 1115 should be identified as in need of improvement under this paragraph, a local educational agency may choose to review the progress of only those students in that school who are served under this part.

`(2) OPPORTUNITY TO REVIEW AND PRESENT EVIDENCE-

`(A) IN GENERAL- Before identifying a school for school improvement under paragraph (1), the local educational agency shall provide the school with an opportunity to review the school-level data, including assessment data, on which the proposed identification is based.

`(B) SUPPORTING EVIDENCE- If the school believes that the proposed identification is in error for statistical or other substantive reasons, the school may provide supporting evidence to the local educational agency, and the local educational agency shall consider the evidence before making a final determination.

`(3) SCHOOL PLAN-

`(A) IN GENERAL- Each school identified under paragraph (1), within 3 months of being so identified, shall develop or revise a school plan, in consultation with parents, school staff, the local educational agency, and a State school support team or other outside experts, that includes research-based strategies and specific goals and objectives for making continuous and substantial progress, and that--

`(i) has the greatest likelihood of improving the performance of participating children in meeting the State's student performance standards;

`(ii) addresses the fundamental teaching and learning needs in that school, and the specific academic problems of low-performing students;

`(iii) identifies and addresses the need to improve the skills of the school's staff through effective professional development;

`(iv) identifies student performance targets and goals for the next 3 years; and

`(v) specifies the responsibilities of the local educational agency and the school under the plan.

`(B) PEER REVIEW- The local educational agency shall promptly subject the plan to a peer review process, work with the school to revise the plan as necessary, and approve the plan.

`(C) IMPLEMENTATION- The school shall implement the school's plan (or revised plan) as soon as the plan (or revised plan) is approved.

`(4) TECHNICAL ASSISTANCE- For each school identified under paragraph (1), the local educational agency shall provide technical or other assistance as the school develops and implements the plan.

`(5) CORRECTIVE ACTION- In order to help students served under this part meet challenging State standards, each local educational agency shall implement a system of corrective action in accordance with the following, unless the Secretary has approved an alternative procedure proposed by the State in its plan under section 1111(b)(2)(B)(ii):

`(A) IN GENERAL- After providing technical assistance under paragraph (4) and taking other remedial measures, the local educational agency--

`(i) may take corrective action at any time with respect to a school that has been identified under paragraph (1);

`(ii) shall take corrective action with respect to any school that fails to make continuous and substantial gains, as defined by the State, after the third year following the school's identification under paragraph (1), except that the local educational agency may refrain from taking such action for not more than 1 additional year if the local educational agency assesses the school's performance and determines that--

`(I) the school is meeting the targets and goals of the school improvement plan as shown by an improvement in student achievement through a 1-year gain in scores on the State assessment; and

`(II) the school will meet the State's criteria for continuous and substantial gains within 1 year; and

`(iii) shall continue to provide technical assistance while instituting any corrective action under clause (i) or (ii).

`(B) DEFINITION OF CORRECTIVE ACTION- In this paragraph, the term `corrective action' means action, consistent with State and local law, that--

`(i) substantially and directly responds to--

`(I) the consistent academic failure that caused a local educational agency to take the action; and

`(II) any underlying staffing, curricular, or other problems in the school; and

`(ii) is designed to substantially increase the likelihood that students in the school will meet challenging State standards.

`(C) MANDATORY CORRECTIVE ACTIONS- In the case of a school described in subparagraph (A)(ii), the local educational agency shall take at least 1 of the following corrective actions:

`(i) Instituting and fully implementing a new curriculum, including appropriate professional development for all relevant staff, that is research-based and offers substantial promise of improving educational achievement for low-performing students.

`(ii) Redesigning the school by reconstituting all or part of the school staff, restructuring the school such as by creating schools within schools or other smaller learning environments, or reopening the school under alternative governance arrangements such as a public charter school.

`(iii) Closing the school.

`(iv) In conjunction with any other action described in clauses (i) through (iii), allowing students in the school who are served under this part to choose to attend other public schools and providing the students transportation (or the costs of transportation) to those schools.

`(D) AVAILABILITY- The local educational agency shall make public and disseminate any corrective action the local educational agency takes under this paragraph.

`(E) OPPORTUNITY TO REVIEW AND PRESENT EVIDENCE-

`(i) IN GENERAL- Before determining that a local educational agency will take corrective action with respect to any school under this paragraph, the local educational agency shall provide the school an opportunity to review the school-level data, including assessment data, on which the proposed determination is made.

`(ii) SUPPORTING EVIDENCE- If the school believes that the proposed determination is in error for statistical or other substantive reasons, the school may provide supporting evidence to the local educational agency, and the local educational agency shall consider the evidence before making a final determination.

`(6) STATE EDUCATIONAL AGENCY RESPONSIBILITIES- If a State educational agency determines that a local educational agency failed to carry out the local educational agency's responsibilities under paragraphs (4) and (5), the State educational agency shall take such action as the State educational agency finds necessary to improve the affected schools and to ensure that the local educational agency carries out those responsibilities.

`(7) SPECIAL RULE- A local educational agency may remove from school improvement status under this subsection any school that meets the State's criteria under section 1111(b)(2), including showing substantial gains by the lowest-performing students, for at least two of the three years following the school's identification under paragraph (1).

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