A bill to provide for planning grants for innovative demonstration projects and research, and for other purposes.

Authorizes the Secretary of Education to make grants to State and local educational agencies and consortia of such agencies to plan for innovative demonstration projects. Authorizes the use of such funds to plan for the development of: (1) State or local policies and procedures for open enrollment among public schools or programs, and for assisting parents, particularly those of disadvantaged or minority children, to become more involved in their children's education; and (2) improved methods for advancing equity in State and local systems of financing public elementary and secondary education and for involving businesses and communities in public education.

Gives priority in planning grants (other than those for open enrollment) to projects with the greatest potential to improve education of disadvantaged students and minority students. Gives equal priority in open enrollment planning grants to projects for such students and those for rural students.

Authorizes the Secretary, through the Office of Educational Research and Improvement, to: (1) conduct research on open enrollment systems, parental involvement, school finance equalization, and business involvement in public education; and (2) disseminate such research results. Directs the Secretary to coordinate identification and dissemination of exemplary projects through the National Diffusion Network.