         CHAPTER 33--EDUCATION OF INDIVIDUALS WITH DISABILITIES
 
      SUBCHAPTER II--ASSISTANCE FOR EDUCATION OF ALL CHILDREN WITH 
                              DISABILITIES
 
Sec. 1413. Local educational agency eligibility


(a) In general

    A local educational agency is eligible for assistance under this 
subchapter for a fiscal year if such agency demonstrates to the 
satisfaction of the State educational agency that it meets each of the 
following conditions:

                 (1) Consistency with State policies

        The local educational agency, in providing for the education of 
    children with disabilities within its jurisdiction, has in effect 
    policies, procedures, and programs that are consistent with the 
    State policies and procedures established under section 1412 of this 
    title.

                         (2) Use of amounts

        (A) In general

            Amounts provided to the local educational agency under this 
        subchapter shall be expended in accordance with the applicable 
        provisions of this subchapter and--
                (i) shall be used only to pay the excess costs of 
            providing special education and related services to children 
            with disabilities;
                (ii) shall be used to supplement State, local, and other 
            Federal funds and not to supplant such funds; and
                (iii) shall not be used, except as provided in 
            subparagraphs (B) and (C), to reduce the level of 
            expenditures for the education of children with disabilities 
            made by the local educational agency from local funds below 
            the level of those expenditures for the preceding fiscal 
            year.

        (B) Exception

            Notwithstanding the restriction in subparagraph (A)(iii), a 
        local educational agency may reduce the level of expenditures 
        where such reduction is attributable to--
                (i) the voluntary departure, by retirement or otherwise, 
            or departure for just cause, of special education personnel;
                (ii) a decrease in the enrollment of children with 
            disabilities;
                (iii) the termination of the obligation of the agency, 
            consistent with this subchapter, to provide a program of 
            special education to a particular child with a disability 
            that is an exceptionally costly program, as determined by 
            the State educational agency, because the child--
                    (I) has left the jurisdiction of the agency;
                    (II) has reached the age at which the obligation of 
                the agency to provide a free appropriate public 
                education to the child has terminated; or
                    (III) no longer needs such program of special 
                education; or

                (iv) the termination of costly expenditures for long-
            term purchases, such as the acquisition of equipment or the 
            construction of school facilities.

        (C) Treatment of Federal funds in certain fiscal years

            (i) Notwithstanding clauses (ii) and (iii) of subparagraph 
        (A), for any fiscal year for which amounts appropriated to carry 
        out section 1411 of this title exceeds $4,100,000,000, a local 
        educational agency may treat as local funds, for the purpose of 
        such clauses, up to 20 percent of the amount of funds it 
        receives under this subchapter that exceeds the amount it 
        received under this subchapter for the previous fiscal year.
            (ii) Notwithstanding clause (i), if a State educational 
        agency determines that a local educational agency is not meeting 
        the requirements of this subchapter, the State educational 
        agency may prohibit the local educational agency from treating 
        funds received under this subchapter as local funds under clause 
        (i) for any fiscal year, only if it is authorized to do so by 
        the State constitution or a State statute.

        (D) Schoolwide programs under title I of the ESEA

            Notwithstanding subparagraph (A) or any other provision of 
        this subchapter, a local educational agency may use funds 
        received under this subchapter for any fiscal year to carry out 
        a schoolwide program under section 1114 of the Elementary and 
        Secondary Education Act of 1965 [20 U.S.C. 6314], except that 
        the amount so used in any such program shall not exceed--
                (i) the number of children with disabilities 
            participating in the schoolwide program; multiplied by
                (ii)(I) the amount received by the local educational 
            agency under this subchapter for that fiscal year; divided 
            by
                (II) the number of children with disabilities in the 
            jurisdiction of that agency.

                      (3) Personnel development

        The local educational agency--
            (A) shall ensure that all personnel necessary to carry out 
        this subchapter are appropriately and adequately prepared, 
        consistent with the requirements of section 1453(c)(3)(D) of 
        this title; and
            (B) to the extent such agency determines appropriate, shall 
        contribute to and use the comprehensive system of personnel 
        development of the State established under section 1412(a)(14) 
        of this title.

                     (4) Permissive use of funds

        Notwithstanding paragraph (2)(A) or section 1412(a)(18)(B) of 
    this title (relating to commingled funds), funds provided to the 
    local educational agency under this subchapter may be used for the 
    following activities:

        (A) Services and aids that also benefit nondisabled children

            For the costs of special education and related services and 
        supplementary aids and services provided in a regular class or 
        other education-related setting to a child with a disability in 
        accordance with the individualized education program of the 
        child, even if one or more nondisabled children benefit from 
        such services.

        (B) Integrated and coordinated services system

            To develop and implement a fully integrated and coordinated 
        services system in accordance with subsection (f) of this 
        section.

         (5) Treatment of charter schools and their students

        In carrying out this subchapter with respect to charter schools 
    that are public schools of the local educational agency, the local 
    educational agency--
            (A) serves children with disabilities attending those 
        schools in the same manner as it serves children with 
        disabilities in its other schools; and
            (B) provides funds under this subchapter to those schools in 
        the same manner as it provides those funds to its other schools.

            (6) Information for State educational agency

        The local educational agency shall provide the State educational 
    agency with information necessary to enable the State educational 
    agency to carry out its duties under this subchapter, including, 
    with respect to paragraphs (16) and (17) of section 1412(a) of this 
    title, information relating to the performance of children with 
    disabilities participating in programs carried out under this 
    subchapter.

                       (7) Public information

        The local educational agency shall make available to parents of 
    children with disabilities and to the general public all documents 
    relating to the eligibility of such agency under this subchapter.

(b) Exception for prior local plans

                           (1) In general

        If a local educational agency or State agency has on file with 
    the State educational agency policies and procedures that 
    demonstrate that such local educational agency, or such State 
    agency, as the case may be, meets any requirement of subsection (a) 
    of this section, including any policies and procedures filed under 
    this subchapter as in effect before the effective date of the 
    Individuals with Disabilities Education Act Amendments of 1997, the 
    State educational agency shall consider such local educational 
    agency or State agency, as the case may be, to have met such 
    requirement for purposes of receiving assistance under this 
    subchapter.

          (2) Modification made by local educational agency

        Subject to paragraph (3), an application submitted by a local 
    educational agency in accordance with this section shall remain in 
    effect until it submits to the State educational agency such 
    modifications as the local educational agency deems necessary.

       (3) Modifications required by State educational agency

        If, after the effective date of the Individuals with 
    Disabilities Education Act Amendments of 1997, the provisions of 
    this chapter are amended (or the regulations developed to carry out 
    this chapter are amended), or there is a new interpretation of this 
    chapter by Federal or State courts, or there is an official finding 
    of noncompliance with Federal or State law or regulations, the State 
    educational agency may require a local educational agency to modify 
    its application only to the extent necessary to ensure the local 
    educational agency's compliance with this subchapter or State law.

(c) Notification of local educational agency or State agency in case of 
        ineligibility

    If the State educational agency determines that a local educational 
agency or State agency is not eligible under this section, the State 
educational agency shall notify the local educational agency or State 
agency, as the case may be, of that determination and shall provide such 
local educational agency or State agency with reasonable notice and an 
opportunity for a hearing.

(d) Local educational agency compliance

                           (1) In general

        If the State educational agency, after reasonable notice and an 
    opportunity for a hearing, finds that a local educational agency or 
    State agency that has been determined to be eligible under this 
    section is failing to comply with any requirement described in 
    subsection (a) of this section, the State educational agency shall 
    reduce or shall not provide any further payments to the local 
    educational agency or State agency until the State educational 
    agency is satisfied that the local educational agency or State 
    agency, as the case may be, is complying with that requirement.

                     (2) Additional requirement

        Any State agency or local educational agency in receipt of a 
    notice described in paragraph (1) shall, by means of public notice, 
    take such measures as may be necessary to bring the pendency of an 
    action pursuant to this subsection to the attention of the public 
    within the jurisdiction of such agency.

                          (3) Consideration

        In carrying out its responsibilities under paragraph (1), the 
    State educational agency shall consider any decision made in a 
    hearing held under section 1415 of this title that is adverse to the 
    local educational agency or State agency involved in that decision.

(e) Joint establishment of eligibility

                       (1) Joint establishment

        (A) In general

            A State educational agency may require a local educational 
        agency to establish its eligibility jointly with another local 
        educational agency if the State educational agency determines 
        that the local educational agency would be ineligible under this 
        section because the local educational agency would not be able 
        to establish and maintain programs of sufficient size and scope 
        to effectively meet the needs of children with disabilities.

        (B) Charter school exception

            A State educational agency may not require a charter school 
        that is a local educational agency to jointly establish its 
        eligibility under subparagraph (A) unless it is explicitly 
        permitted to do so under the State's charter school statute.

                       (2) Amount of payments

        If a State educational agency requires the joint establishment 
    of eligibility under paragraph (1), the total amount of funds made 
    available to the affected local educational agencies shall be equal 
    to the sum of the payments that each such local educational agency 
    would have received under section 1411(g) of this title if such 
    agencies were eligible for such payments.

                          (3) Requirements

        Local educational agencies that establish joint eligibility 
    under this subsection shall--
            (A) adopt policies and procedures that are consistent with 
        the State's policies and procedures under section 1412(a) of 
        this title; and
            (B) be jointly responsible for implementing programs that 
        receive assistance under this subchapter.

          (4) Requirements for educational service agencies

        (A) In general

            If an educational service agency is required by State law to 
        carry out programs under this subchapter, the joint 
        responsibilities given to local educational agencies under this 
        subsection shall--
                (i) not apply to the administration and disbursement of 
            any payments received by that educational service agency; 
            and
                (ii) be carried out only by that educational service 
            agency.

        (B) Additional requirement

            Notwithstanding any other provision of this subsection, an 
        educational service agency shall provide for the education of 
        children with disabilities in the least restrictive environment, 
        as required by section 1412(a)(5) of this title.

(f) Coordinated services system

                           (1) In general

        A local educational agency may not use more than 5 percent of 
    the amount such agency receives under this subchapter for any fiscal 
    year, in combination with other amounts (which shall include amounts 
    other than education funds), to develop and implement a coordinated 
    services system designed to improve results for children and 
    families, including children with disabilities and their families.

                           (2) Activities

        In implementing a coordinated services system under this 
    subsection, a local educational agency may carry out activities that 
    include--
            (A) improving the effectiveness and efficiency of service 
        delivery, including developing strategies that promote 
        accountability for results;
            (B) service coordination and case management that 
        facilitates the linkage of individualized education programs 
        under this subchapter and individualized family service plans 
        under subchapter III of this chapter with individualized service 
        plans under multiple Federal and State programs, such as title I 
        of the Rehabilitation Act of 1973 [29 U.S.C. 720 et seq.] 
        (vocational rehabilitation), title XIX of the Social Security 
        Act [42 U.S.C. 1396 et seq.] (Medicaid), and title XVI of the 
        Social Security Act [42 U.S.C. 1381 et seq.] (supplemental 
        security income);
            (C) developing and implementing interagency financing 
        strategies for the provision of education, health, mental 
        health, and social services, including transition services and 
        related services under this chapter; and
            (D) interagency personnel development for individuals 
        working on coordinated services.

    (3) Coordination with certain projects under Elementary and 
                       Secondary Education Act of 1965

        If a local educational agency is carrying out a coordinated 
    services project under title XI of the Elementary and Secondary 
    Education Act of 1965 [20 U.S.C. 8401 et seq.] and a coordinated 
    services project under this subchapter in the same schools, such 
    agency shall use amounts under this subsection in accordance with 
    the requirements of that title.

(g) School-based improvement plan

                           (1) In general

        Each local educational agency may, in accordance with paragraph 
    (2), use funds made available under this subchapter to permit a 
    public school within the jurisdiction of the local educational 
    agency to design, implement, and evaluate a school-based improvement 
    plan that is consistent with the purposes described in section 
    1451(b) of this title and that is designed to improve educational 
    and transitional results for all children with disabilities and, as 
    appropriate, for other children consistent with subparagraphs (A) 
    and (B) of subsection (a)(4) of this section in that public school.

                            (2) Authority

        (A) In general

            A State educational agency may grant authority to a local 
        educational agency to permit a public school described in 
        paragraph (1) (through a school-based standing panel established 
        under paragraph (4)(B)) to design, implement, and evaluate a 
        school-based improvement plan described in paragraph (1) for a 
        period not to exceed 3 years.

        (B) Responsibility of local educational agency

            If a State educational agency grants the authority described 
        in subparagraph (A), a local educational agency that is granted 
        such authority shall have the sole responsibility of oversight 
        of all activities relating to the design, implementation, and 
        evaluation of any school-based improvement plan that a public 
        school is permitted to design under this subsection.

                        (3) Plan requirements

        A school-based improvement plan described in paragraph (1) 
    shall--
            (A) be designed to be consistent with the purposes described 
        in section 1451(b) of this title and to improve educational and 
        transitional results for all children with disabilities and, as 
        appropriate, for other children consistent with subparagraphs 
        (A) and (B) of subsection (a)(4) of this section, who attend the 
        school for which the plan is designed and implemented;
            (B) be designed, evaluated, and, as appropriate, implemented 
        by a school-based standing panel established in accordance with 
        paragraph (4)(B);
            (C) include goals and measurable indicators to assess the 
        progress of the public school in meeting such goals; and
            (D) ensure that all children with disabilities receive the 
        services described in the individualized education programs of 
        such children.

        (4) Responsibilities of the local educational agency

        A local educational agency that is granted authority under 
    paragraph (2) to permit a public school to design, implement, and 
    evaluate a school-based improvement plan shall--
            (A) select each school under the jurisdiction of such agency 
        that is eligible to design, implement, and evaluate such a plan;
            (B) require each school selected under subparagraph (A), in 
        accordance with criteria established by such local educational 
        agency under subparagraph (C), to establish a school-based 
        standing panel to carry out the duties described in paragraph 
        (3)(B);
            (C) establish--
                (i) criteria that shall be used by such local 
            educational agency in the selection of an eligible school 
            under subparagraph (A);
                (ii) criteria that shall be used by a public school 
            selected under subparagraph (A) in the establishment of a 
            school-based standing panel to carry out the duties 
            described in paragraph (3)(B) and that shall ensure that the 
            membership of such panel reflects the diversity of the 
            community in which the public school is located and 
            includes, at a minimum--
                    (I) parents of children with disabilities who attend 
                such public school, including parents of children with 
                disabilities from unserved and underserved populations, 
                as appropriate;
                    (II) special education and general education 
                teachers of such public school;
                    (III) special education and general education 
                administrators, or the designee of such administrators, 
                of such public school; and
                    (IV) related services providers who are responsible 
                for providing services to the children with disabilities 
                who attend such public school; and

                (iii) criteria that shall be used by such local 
            educational agency with respect to the distribution of funds 
            under this subchapter to carry out this subsection;

            (D) disseminate the criteria established under subparagraph 
        (C) to local school district personnel and local parent 
        organizations within the jurisdiction of such local educational 
        agency;
            (E) require a public school that desires to design, 
        implement, and evaluate a school-based improvement plan to 
        submit an application at such time, in such manner, and 
        accompanied by such information as such local educational agency 
        shall reasonably require; and
            (F) establish procedures for approval by such local 
        educational agency of a school-based improvement plan designed 
        under this subsection.

                           (5) Limitation

        A school-based improvement plan described in paragraph (1) may 
    be submitted to a local educational agency for approval only if a 
    consensus with respect to any matter relating to the design, 
    implementation, or evaluation of the goals of such plan is reached 
    by the school-based standing panel that designed such plan.

                     (6) Additional requirements

        (A) Parental involvement

            In carrying out the requirements of this subsection, a local 
        educational agency shall ensure that the parents of children 
        with disabilities are involved in the design, evaluation, and, 
        where appropriate, implementation of school-based improvement 
        plans in accordance with this subsection.

        (B) Plan approval

            A local educational agency may approve a school-based 
        improvement plan of a public school within the jurisdiction of 
        such agency for a period of 3 years, if--
                (i) the approval is consistent with the policies, 
            procedures, and practices established by such local 
            educational agency and in accordance with this subsection; 
            and
                (ii) a majority of parents of children who are members 
            of the school-based standing panel, and a majority of other 
            members of the school-based standing panel, that designed 
            such plan agree in writing to such plan.

                        (7) Extension of plan

        If a public school within the jurisdiction of a local 
    educational agency meets the applicable requirements and criteria 
    described in paragraphs (3) and (4) at the expiration of the 3-year 
    approval period described in paragraph (6)(B), such agency may 
    approve a school-based improvement plan of such school for an 
    additional 3-year period.

(h) Direct services by State educational agency

                           (1) In general

        A State educational agency shall use the payments that would 
    otherwise have been available to a local educational agency or to a 
    State agency to provide special education and related services 
    directly to children with disabilities residing in the area served 
    by that local agency, or for whom that State agency is responsible, 
    if the State educational agency determines that the local education 
    \1\ agency or State agency, as the case may be--
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``educational''.
---------------------------------------------------------------------------
            (A) has not provided the information needed to establish the 
        eligibility of such agency under this section;
            (B) is unable to establish and maintain programs of free 
        appropriate public education that meet the requirements of 
        subsection (a) of this section;
            (C) is unable or unwilling to be consolidated with one or 
        more local educational agencies in order to establish and 
        maintain such programs; or
            (D) has one or more children with disabilities who can best 
        be served by a regional or State program or service-delivery 
        system designed to meet the needs of such children.

          (2) Manner and location of education and services

        The State educational agency may provide special education and 
    related services under paragraph (1) in such manner and at such 
    locations (including regional or State centers) as the State agency 
    considers appropriate. Such education and services shall be provided 
    in accordance with this subchapter.

(i) State agency eligibility

    Any State agency that desires to receive a subgrant for any fiscal 
year under section 1411(g) of this title shall demonstrate to the 
satisfaction of the State educational agency that--
        (1) all children with disabilities who are participating in 
    programs and projects funded under this subchapter receive a free 
    appropriate public education, and that those children and their 
    parents are provided all the rights and procedural safeguards 
    described in this subchapter; and
        (2) the agency meets such other conditions of this section as 
    the Secretary determines to be appropriate.

(j) Disciplinary information

    The State may require that a local educational agency include in the 
records of a child with a disability a statement of any current or 
previous disciplinary action that has been taken against the child and 
transmit such statement to the same extent that such disciplinary 
information is included in, and transmitted with, the student records of 
nondisabled children. The statement may include a description of any 
behavior engaged in by the child that required disciplinary action, a 
description of the disciplinary action taken, and any other information 
that is relevant to the safety of the child and other individuals 
involved with the child. If the State adopts such a policy, and the 
child transfers from one school to another, the transmission of any of 
the child's records must include both the child's current individualized 
education program and any such statement of current or previous 
disciplinary action that has been taken against the child.

(Pub. L. 91-230, title VI, Sec. 613, as added Pub. L. 105-17, title I, 
Sec. 101, June 4, 1997, 111 Stat. 73.)

                       References in Text

    For the effective date of the Individuals with Disabilities 
Education Act Amendments of 1997, referred to in subsec. (b)(1), (3), 
see section 201 of Pub. L. 105-17, set out as an Effective Date note 
under section 1400 of this title.
    The Rehabilitation Act of 1973, referred to in subsec. (f)(2)(B), is 
Pub. L. 93-112, Sept. 26, 1973, 87 Stat. 355, as amended. Title I of the 
Rehabilitation Act of 1973 is classified generally to subchapter I 
(Sec. 720 et seq.) of chapter 16 of Title 29, Labor. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 701 of Title 29 and Tables.
    The Social Security Act, referred to in subsec. (f)(2)(B), is act 
Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Titles XVI and XIX of 
the Act are classified generally to subchapters XVI (Sec. 1381 et seq.) 
and XIX (Sec. 1396 et seq.), respectively, of chapter 7 of Title 42, The 
Public Health and Welfare. For complete classification of this Act to 
the Code, see section 1305 of Title 42 and Tables.
    The Elementary and Secondary Education Act of 1965, referred to in 
subsec. (f)(3), is Pub. L. 89-10, Apr. 11, 1965, 79 Stat. 27, as amended 
generally by Pub. L. 103-382, title I, Sec. 101, Oct. 20, 1994, 108 
Stat. 3519. Title XI of the Act is classified generally to subchapter XI 
(Sec. 8401 et seq.) of chapter 70 of this title. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 6301 of this title and Tables.


                            Prior Provisions

    A prior section 1413, Pub. L. 91-230, title VI, Sec. 613, Apr. 13, 
1970, 84 Stat. 179; Pub. L. 93-380, title VI, Secs. 614(c), (d), 615(b), 
(c), title VIII, Sec. 843(b)(2), Aug. 21, 1974, 88 Stat. 581, 583, 611; 
Pub. L. 94-142, Sec. 5(a), Nov. 29, 1975, 89 Stat. 782; Pub. L. 98-199, 
Secs. 3(b), 7, Dec. 2, 1983, 97 Stat. 1358, 1359; Pub. L. 99-457, title 
II, Sec. 203(b), title IV, Sec. 405, Oct. 8, 1986, 100 Stat. 1159, 1174; 
Pub. L. 100-630, title I, Sec. 102(c), Nov. 7, 1988, 102 Stat. 3291; 
Pub. L. 101-476, title II, Sec. 202, title IX, Sec. 901(b)(47)-(58), 
Oct. 30, 1990, 104 Stat. 1111, 1144; Pub. L. 102-119, Secs. 5, 25(a)(6), 
(b), Oct. 7, 1991, 105 Stat. 591, 606, 607; Pub. L. 103-382, title III, 
Sec. 391(f)(2), Oct. 20, 1994, 108 Stat. 4023, related to requisite 
features of a State plan, approval of State plan by Secretary, and 
participation of children with disabilities enrolled in private schools, 
prior to the general amendment of subchapters I to IV of this chapter by 
Pub. L. 105-17.

                  Section Referred to in Other Sections

    This section is referred to in sections 1411, 1412, 1419, 8063 of 
this title.
