Consolidates the 13 current bilingual and immigrant education programs into a State formula program and significantly increases flexibility and accountability. (Most of the consolidation is accomplished only if the appropriation is at least $650 million.) Maintains the current focus on assisting school districts in teaching English to limited English proficient students and in helping these students meet the same challenging State standards required of all other students.

Major Changes from Current Law

• Trigger - If the appropriation exceeds $650 million, authorizes formula awards to States based on the State's share of limited English proficient and recent immigrant students. States, in turn, make competitive subgrants to local educational agencies. If a State does not apply, the Secretary makes competitive awards directly to "specially qualified agencies" (school districts).

• Discretionary Programs - If the appropriation is less than $650 million, continues to authorize three discretionary grant programs for instructional services, three support services programs, four professional development programs, and Immigrant Education formula grants. These programs are similar to those in the previous law.

• State Plans - Requires States to submit State plans establishing standards and benchmarks for LEP students aligned with State standards.

• Continuations - Provides for continuation grants to current instructional service and professional development grantees for the original period of their grant. Consequently, diverts an estimated $209 million from the formula in 2002 and declining amounts thereafter.

• National Leadership Activities - Authorizes National Leadership Activities: National Professional Development Project, National Clearinghouse, and evaluation activities. Under the National Professional Development Project, the Secretary makes 5-year competitive grants to institutions of higher education for professional development activities that will improve classroom instruction for limited English proficient students.

• Small-State Minimum - Guarantees all States at least $500,000 under the formula program.

Accountability

• States must establish annual achievement objectives for limited English proficient students that are related to gains in English proficiency and meeting challenging State academic standards and that are aligned with Title I achievement standards.

• States must assure that subgrantees will comply with the Title I requirement to annually assess in English children who have been in the United States for 3 or more consecutive years. States must hold subgrantees accountable for making adequate yearly progress as described in Title I and meeting all annual achievement objectives.

Allocations

• Federal to State - The Secretary determines formula allocations based on the State's share of limited English proficient students (80 percent) and recent immigrant students (20 percent). In 2002 and 2003, the Secretary calculates State shares using 2000 Census data. Thereafter, the Secretary may use either American Community Survey data from the Department of Commerce or data submitted by the States.

• State to Local - States allocate funds to school districts based on share of the limited English proficient student population except that States can reserve up to 15 percent for school districts that have experienced significant increases in the percentage or number of immigrant students or that have limited or no experience in serving immigrant students.

Set-Asides

• One-half of one percent or $5 million (whichever is higher) for schools operated predominantly for Native American students; one-half of one percent for the outlying areas; 6.5 percent for National Leadership Activities; and such sums as necessary for continuation awards.