I work in a public library, have done so most of my working years, and I support much of the proposal. Unfortunately, it does not distinguish between elementary/middle, and high school- high schoolers need to have these conversations, and putting them on the same level as the lower grades is a serious oversight.
But for applying it in elementary and middle schools: The legal definition of sexually explicit is actually very specific, for those who take the time to look it up, and there's no logical reason one would want to expose minors to what it prohibits. If we have parental ratings for movies, video games and websites it only stands to reason that books should be treated the same as well- these are schools after all, and should have some kind of standard for what it gives children access to based on their age. The conceit that "all books are good for everyone" falls flat when faced with the prospect of giving them access to substantially the same material that would get them refused service at a theater.
(In any event, both sides can rest assured that keeping out explicit material will probably work just as well as keeping anything - drugs, alcohol, guns - out of schools has worked in recent years.)