Order Code RS20375
Updated June 20, 2001
CRS Report for Congress
Received through the CRS Web
Rural Education: Legislative Initiatives
James B. Stedman and Richard N. Apling
Specialists in Social Legislation
Domestic Social Policy Division
Summary
The House and Senate have passed similar programs to aid rural school districts.
The House and Senate versions of H.R. 1 (passed May 23, 2001, and June 14, 2001,
respectively) provide certain rural school districts with increased flexibility in the use of
funds under several federal education programs, and also authorize new funding for these
and other rural districts. The Rural Education Achievement Program, enacted last year
in the Consolidated Appropriations Act for FY2001, provides eligible districts with
flexibility under several federal education programs. A 1-year authority for grants for
these districts was not funded. This report describes the current program and the
programs in the House and Senate bills. It will be updated as major action occurs.
Introduction
The Congress is considering legislation to increase federal assistance to rural local
educational agencies (LEAs). Advocates contend that rural LEAs receive too little from
individual education formula grant programs for effective use, and they are unable to
secure federal competitive grants. During the 106th Congress, the Consolidated
Appropriations Act of FY2001 added a Rural Education Achievement Program to the
Elementary and Secondary Education Act (ESEA). This program provides eligible LEAs
(rural districts with small enrollment) with flexibility in the use of funds they receive under
specific ESEA authorities.1 The program also includes a 1-year authority for separate
grants to these LEAs, an authority that was not funded. Despite the absence of funding,
eligible districts can exercise the flexibility authority in the legislation.
1 In current law and these bills, a district’s rural location is determined by the “School Locale
Codes” for all of its schools. These codes are based on the Census Bureau’s classification of the
places. Currently, there are 8 such codes. The definitions of a rural location in the legislation
under consideration use different combinations of Locale Codes 6, 7, or 8. Locale Code 6 is
applied to a school in a place with a population of less than 25,000 and more than 2,500, located
outside a metropolitan statistical area. Locale code 7 is applied to a school in a place identified
as rural and outside a metropolitan statistical area. Locale code 8 is applied to a school in a place
identified as rural and inside a metropolitan statistical area.
Congressional Research Service ˜ The Library of Congress

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CRS-2
In its efforts to reauthorize the ESEA, the 107th Congress is seeking to expand
programs to provide flexibility and funding to rural school districts. These programs are
included in H.R. 1 (No Child Left Behind Act of 2001) as passed by the House on May
23, 2001; and in H.R. 1 as passed by the Senate on June 14, 2001, with amended text of
S. 1 (Better Education for Students and Teachers Act) inserted in lieu thereof. Each bill
would authorize two rural education programs that do not vary markedly from one bill to
the other. The first program in both bills is very similar to the program enacted in the 106th
Congress. The second program, with no parallel in current law, identifies another set of
districts (defined by low-income student population and rural location) and allocates funds
to states based on the enrollment in those districts. Table 1 below compares the
provisions in current law and the House and Senate bills. Other provisions in these bills
supporting rural school districts outside of these programs are not considered here. Table
2 shows the estimated number of eligible districts by state for each program.
Table 1. Comparison of Rural Education Provisions
Feature
Current law
House-passed H.R. 1
Senate-passed H.R. 1
Overall Title
Rural Education
Rural Education Initiative
Rural Education
Achievement Program
Act
Achievement Program
Location in
Part J Subpart 2 of ESEA
Part G of ESEA Title I
Part B Subpart 2 of ESEA
amended ESEA
Title X
Title V
Authorization
$62.5 million for FY2001
$300 million for FY2002
For each of the 2 programs
of
(FY2001 appropriations
and such sums as may be
— $150 million for
appropriations
legislation provided no
necessary for the next 4
FY2002 and such sums as
funding)
fiscal years; appropriation
may be necessary for the
divided equally between
next 6 fiscal years.
the two programs.
Limitation on
Not applicable — current
District eligible for the
District cannot concurrently
participation in
law authorizes only a single
Rural Education Flexibility
participate in both
both programs
program.
program not eligible for
programs.
Rural Education Assistance
program.
Flexibility
Yes
Yes
Yes
program
Title
Rural Education
Rural Education Flexibility
Small, Rural School
Achievement Program
Achievement Program
Overview
Eligible districts have
Similar to current law.
Similar to current law.
increased flexibility in the
uses of “applicable
funding;” formula grant
authorized.
Eligible
Fewer than 600 students in
Same as current law.
(1) Fewer than 600
Districts
average daily attendance
Locale criterion can be
students in ADA or all
(ADA), and all of its
waived by the Secretary.
schools in the district
schools with a School
located in counties with a
Locale Code of 7 or 8.
population density of fewer
than 10 persons per square
mile, and (2) all schools
have a Locale Code of 7 or
8. Locale Code can be
waived by the Secretary.

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CRS-3
Feature
Current law
House-passed H.R. 1
Senate-passed H.R. 1
Applicable
Applicable funding: Title II
Applicable funding: ESEA
Applicable funding
Funding
(Eisenhower professional
Title II A (teacher quality);
parallels current law,
development program);
Section 3106 (education of
coming from: Title II
Title IV (Safe and Drug-
limited English proficient
(teacher quality); Title IV
Free Schools and
and immigrant children);
(Safe and Drug-Free
Communities Act of 1994);
Title IV Part A (innovative
Schools and Communities
and Title VI (innovative
programs); Title V Part A,
Act of 1994); and Title V
education program
Subpart 1 (safe schools);
Part B, Subpart 4
strategies, includes funding
and Section 5212(a)(2)(A)
(innovative education
for class size reduction).
(enhancing education
program strategies).
through technology).
Flexible uses of
District may use applicable
District may use applicable
District may use applicable
applicable
funding for the local
funding for the local
funding for the activities
funding
activities authorized in:
activities authorized in:
authorized in: Section
Title I Part A
Title I Part A; Title II Part
1114 (schoolwide
(compensatory education
A (teacher quality), Title III
programs); Section 1115
for educationally
Part A (education of limited
(targeted assistance
disadvantaged students);
English proficient and
schools); Section 1116
Section 2210(b) (teacher
immigrant children); Title
(assessments and school
professional development
IV Part A (innovative
improvement); Section
activities); Section 3134
programs); Title V Part A
2123 (teacher quality —
(technology acquisition and
(safe schools and 21st
local uses of state grant
applications under the
century schools); or Title V
funds); Section 4116 (safe
technology innovation
Part B (enhancing
and drug-free schools —
challenge fund); or Section
education through
local drug and violence
4116 (school safety and
technology).
prevention); or Section
drug abuse prevention
5331(b) (local activities
activities).
under innovative education
program strategies).
Grants to
Grants authorized for
Grants authorized for
Grants authorized for
districts eligible
eligible LEAs for the same
eligible districts to be used
eligible districts for same
for flexibility
activities supported under
to improve the academic
activities supported under
the flexibility authority.
achievement of students
the flexibility authority (see
The size of the grant to an
and quality of instruction
above), with the addition
individual LEA is equal to
they receive. The size of
of: Section 2213
(1) $20,000 plus $100
the grant to individual
(mathematics and science
times the number of
districts is determined as
partnerships), or Section
students in ADA in excess
would be under current
2306 (state and local
of 50 students, but not to
law.
programs for technology).
exceed $60,000, minus (2)
The size of the grants to
the applicable funding the
individual districts is
district receives.
determined as would be
under current law.
Accountability
LEA must assess its student
LEA must administer
Same as current law.
achievement using
assessments consistent with
statewide assessment
the provisions of ESEA
consistent with the
Title I, Section 1111. SEA
assessment under ESEA
permits only a district
Title I, Section 1111(b), or,
meeting “adequate yearly
absent such assessment, a
progress” as defined under
test of its own selection.
Section 1111 to continue to
State permits an LEA to
participate after second
continue for additional
year of participation.
three year period only if its
students perform “better”
on the assessment after the
third year than they did in
the first year. An LEA that
does not meet this criterion
is ineligible to participate
for a 3-year period.

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CRS-4
Feature
Current law
House-passed H.R. 1
Senate-passed H.R. 1
Formula Grant
No
Yes
Yes
Program
Title
Rural Education Assistance
Low-Income and Rural
School Program
Overview
Formula grant to states
Same as House bill.
based on enrollment in
eligible school districts.
Eligible
For a district to be eligible,
Same as House bill.
districts
20% or more of its school-
aged (5-17) population
must be in poverty and all
of its schools must have
Locale Codes of 6, 7, or 8.
“Specially qualified”
agency is an eligible LEA
that applies directly to the
Secretary because it is in a
non-participating state.
Allocation
Funding allocated among
Same as House bill, but
formula
SEAs based on states’
does not include 0.5%
shares of students in ADA
reservation for Bureau of
in all eligible districts.
Indian Affairs schools.
Prior to SEA allocation,
0.5% of the program’s
funding reserved for
Bureau of Indian Affairs
schools. Up to 5% of state
allocation reserved for
administrative expenses.
Allocation to
SEA decides whether to
Same as House bill.
LEAs
award funds to eligible
LEAs competitively or by
formula based on ADA.
Uses of funds
Funds used for teacher
Funds used for the
recruitment and retention,
activities described in
professional development
ESEA Section 5331(b)
for teachers, acquisition of
(local activities authorized
educational technology,
under Title V Part B,
parental involvement
Subpart 4 — innovative
activities, or programs to
programs). These uses
improve student
include those identified in
achievement.
House bill and other uses,
such as acquisition of
instructional materials,
assessments, and curricular
materials; and student and
parental literacy efforts.

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CRS-5
Feature
Current law
House-passed H.R. 1
Senate-passed H.R. 1
Accountability
SEA or specially qualified
Reporting requirement
LEA must include in
same as House bill, except
application to the Secretary
report to congressional
specific measurable goals
committees not required.
and objectives relating to
Participating LEA must
increased student
administer the same
achievement, decreased
assessment that is
dropout rates, or other
administered statewide and
factors selected by the
consistent with Title I
agency. Annual report
testing requirements;
must be submitted to the
absent such test, LEA
Secretary describing award
administers one of its own
and use of funds, and
choosing. SEA determines
progress toward goals and
whether LEA can
objectives. Secretary of
participate for an additional
Education reports similar
3 years based on whether
information to the
its test scores after the third
education committees of
year are “better” than its
the U.S. Congress. Three
test scores after the first
years after an SEA or a
year. LEA failing to meet
specially qualified LEA
this requirement cannot
first receives funds,
participate for a 3-year
Secretary reviews progress
period.
toward its goals and
objectives. Additional
funding denied if Secretary
determines agency’s use of
its funds is “inadequate to
justify continuation.” It is
unclear whether these
provisions also apply to
eligible LEAs.
Table 2 provides estimated number of districts in each state meeting the eligibility
criteria in current law and in the provisions of the House and Senate bills. The primary
data source is the revised 1998-1999 Common Core of Data (CCD) compiled by the U.S.
Department of Education (ED). Due to ED’s recent revisions to the School Locale
Codes, estimates in Table 2 show a modest increase in the number of eligible districts
compared to prior CRS estimates. Given an absence of available data, total membership
as of October 1, 1998, is used instead of ADA as specified in the legislation. U.S. Bureau
of the Census poverty data for 5-17 year olds by school district are for 1997. The
population density used in the Senate flexibility program is from the 1990 census.
Excluded are supervisory union administrative centers and regional education services
agencies, as well as any LEA reporting no enrollment. Total number eligible for each
Senate program shown below, although eligible districts cannot concurrently participate
in both programs. As a result, the numbers for the Senate formula grant program appear
to be larger than those for the House formula grant program.
Table 2. Estimated Number of Eligible Districts
House
Senate
House
Formula
Senate
Formula
Total
Flexibility
Grant
Flexibility
Grant
State
districts
Current law
Program
Program
Program
Program
Alabama
128
0
0
67
0
67
Alaska
53
28
28
8
34
20
Arizona
353
78
78
38
96
77

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CRS-6
House
Senate
House
Formula
Senate
Formula
Total
Flexibility
Grant
Flexibility
Grant
State
districts
Current law
Program
Program
Program
Program
Arkansas
310
120
120
111
121
204
California
988
297
297
89
301
265
Colorado
176
81
81
20
94
56
Connecticut
166
23
23
1
23
1
Delaware
19
0
0
4
0
4
District of Columbia
1
0
0
0
0
0
Florida
67
0
0
29
2
29
Georgia
180
7
7
110
8
117
Hawaii
1
0
0
0
0
0
Idaho
112
40
40
14
49
30
Illinois
936
237
237
58
237
124
Indiana
292
9
9
12
9
14
Iowa
375
151
151
7
151
18
Kansas
304
148
148
20
152
57
Kentucky
176
9
9
95
9
102
Louisiana
70
1
1
39
2
39
Maine
224
109
109
10
109
38
Maryland
24
0
0
3
0
3
Massachusetts
244
34
34
3
34
7
Michigan
687
100
100
80
101
111
Minnesota
387
112
112
14
118
40
Mississippi
152
5
5
96
5
98
Missouri
523
227
227
89
230
201
Montana
456
355
355
32
357
196
Nebraska
596
462
462
13
464
104
Nevada
17
2
2
1
5
2
New Hampshire
165
65
65
2
65
8
New Jersey
581
66
66
5
66
7
New Mexico
89
32
32
39
42
66
New York
705
81
81
117
81
167
North Carolina
120
0
0
41
2
41
North Dakota
229
193
193
5
199
76
Ohio
625
20
20
43
20
44
Oklahoma
546
290
290
125
290
321
Oregon
197
74
74
16
77
34
Pennsylvania
500
8
8
33
8
39
Rhode Island
36
2
2
0
2
0
South Carolina
90
1
1
45
1
46
South Dakota
173
123
123
9
131
62
Tennessee
137
3
3
46
3
47
Texas
1,042
352
352
256
364
478
Utah
40
5
5
3
11
4
Vermont
248
158
158
2
158
19
Virginia
129
1
1
42
2
43
Washington
296
102
102
27
109
71
West Virginia
55
0
0
37
1
37
Wisconsin
426
100
100
12
104
30
Wyoming
48
13
13
1
22
4
Total
14,494
4,324
4,324
1,969
4,469
3,668

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