To impose adequate standards for lead content of water dispensed for human consumption in elementary and secondary schools as a condition of receiving certain Federal financial assistance.

Requires all elementary and secondary schools (schools) that dispense water for human consumption to dispense lead-free water for such purposes. Requires certification of compliance with such requirement by each school within six months of enactment of this Act. Directs the Secretary of Education (the Secretary) to waive such requirement for an additional period for schools that have initiated remedial actions.

Directs the Secretary to penalize any school for noncompliance by withholding a portion of the school's funds payable under provisions for education of disadvantaged children under chapters 1 and 2 of title I of the Elementary and Secondary Education Act of 1965. Requires withholding of five percent of such funds in the first year of noncompliance and ten percent in the second and each succeeding year of noncompliance.

Directs the Secretary, in consultation with the Administrator of the Environmental Protection Agency, to issue regulations that describe acceptable tests for lead content in water that may be used by schools to determine compliance.

Defines "lead-free water" as water containing not more than 15 parts per billion of lead.