 
 CHAPTER 70--STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY 
                                 SCHOOLS
 
    SUBCHAPTER I--HELPING DISADVANTAGED CHILDREN MEET HIGH STANDARDS
 
 Part A--Improving Basic Programs Operated by Local Educational Agencies
 
                         subpart 2--allocations
 
Sec. 6333. Basic grants to local educational agencies


(a) Amount of grants

      (1) Grants for local educational agencies and Puerto Rico

        The grant which a local educational agency in a State is 
    eligible to receive under this subpart for a fiscal year shall 
    (except as provided in section 6337 of this title), be determined by 
    multiplying the number of children counted under subsection (c) of 
    this section by 40 percent of the amount determined under the next 
    sentence. The amount determined under this sentence shall be the 
    average per pupil expenditure in the State except that--
            (A) if the average per pupil expenditure in the State is 
        less than 80 percent of the average per pupil expenditure in the 
        United States, such amount shall be 80 percent of the average 
        per pupil expenditure in the United States; or
            (B) if the average per pupil expenditure in the State is 
        more than 120 percent of the average per pupil expenditure in 
        the United States, such amount shall be 120 percent of the 
        average per pupil expenditure in the United States.

                  (2) Basis for calculating grants

        For fiscal years 1995 through 1998, grants shall be calculated 
    by the Secretary on the basis of the number of children counted 
    under subsection (c) of this section for counties, and State 
    educational agencies shall suballocate county amounts to local 
    educational agencies, in accordance with regulations published by 
    the Secretary. In any State in which a large number of local 
    educational agencies overlap county boundaries, the State 
    educational agency may apply to the Secretary for authority during 
    any particular fiscal year to make the allocations under this part 
    (other than section 6334 of this title) directly to local 
    educational agencies without regard to the counties. If the 
    Secretary approves an application of a State educational agency for 
    a particular year under this subparagraph, the State educational 
    agency shall provide assurances that--
            (A) such allocations will be made using precisely the same 
        factors for determining a grant as are used under this part;
            (B) such allocations will be made using alternative data 
        approved by the Secretary that the State determines best 
        reflects the distribution of children in poor families and is 
        adjusted to be equivalent in proportion to the number of 
        children determined in accordance with subsection (c) of this 
        section; or
            (C) such allocations will be made using data that the State 
        educational agency submits to the Secretary for approval that 
        more accurately target poverty.

    In addition, the State educational agency shall provide assurances 
    that a procedure will be established through which local educational 
    agencies dissatisfied with the determinations made by the State 
    educational agency may appeal directly to the Secretary for a final 
    determination. Beginning in fiscal year 1999, grants shall be 
    calculated by the Secretary on the basis of population data compiled 
    for local educational agencies, unless the Secretary and the 
    Secretary of Commerce determine that use of the updated population 
    data would be inappropriate or unreliable taking into consideration 
    the recommendations of the study to be conducted by the National 
    Academy of Sciences. If the Secretary and the Secretary of Commerce 
    determine that some or all of the data referred to in this paragraph 
    are inappropriate or unreliable, the Secretaries shall jointly issue 
    a report setting forth their reasons in detail. In years when grants 
    are calculated by the Secretary on the basis of local educational 
    agency data, for each local educational agency serving an area with 
    a total population of at least 20,000 persons, the grant under this 
    section shall be the amount determined by the Secretary. For local 
    educational agencies serving areas with total populations of fewer 
    than 20,000 persons, the State educational agency may either--
            (i) distribute to such local educational agencies grants 
        under this section equal to the amounts determined by the 
        Secretary; and
            (ii) use an alternative method, approved by the Secretary, 
        to distribute the share of the State's total grants under this 
        section that is based on local educational agencies with total 
        populations of fewer than 20,000 persons. Such an alternative 
        method of distributing grants under this section among a State's 
        local educational agencies serving areas with total populations 
        of fewer than 20,000 persons shall be based upon population data 
        that the State educational agency determines best reflect the 
        current distribution of children in poor families among the 
        State's local educational agencies serving areas with total 
        populations of fewer than 20,000 persons. If a local educational 
        agency serving an area with total population of less than 20,000 
        persons is dissatisfied with the determination of its grant by 
        the State education agency, then such local educational agency 
        may appeal this determination to the Secretary. The Secretary 
        must respond to this appeal within 45 days of receipt.

                           (3) Puerto Rico

        For each fiscal year, the Secretary shall determine the 
    percentage which the average per pupil expenditure in the 
    Commonwealth of Puerto Rico is of the lowest average per pupil 
    expenditure of any of the 50 States. The grant which the 
    Commonwealth of Puerto Rico shall be eligible to receive under this 
    section for a fiscal year shall be the amount arrived at by 
    multiplying the number of children counted under subsection (c) of 
    this section for the Commonwealth of Puerto Rico by the product of--
            (A) the percentage determined under the preceding sentence; 
        and
            (B) 32 percent of the average per pupil expenditure in the 
        United States.

                        (4) ``State'' defined

        For purposes of this subsection, the term ``State'' does not 
    include Guam, American Samoa, the Virgin Islands, the Northern 
    Mariana Islands, and Palau.

(b) Minimum number of children to qualify

    Subject to the succeeding sentence, a local educational agency shall 
be eligible for a basic grant for a fiscal year under this subpart only 
if the number of children counted under subsection (c) of this section 
in the school district of such local educational agency is at least 10. 
Beginning in fiscal year 1996, no local educational agency shall be 
eligible for a grant under this section if the number of children 
counted for grants under this section is equal to 2 percent or less of 
the total school age population in the local educational agency. For 
fiscal years 1996 through 1998, grants not made as a result of applying 
the preceding sentence shall be reallocated by the State educational 
agency to other eligible local educational agencies in the State in 
proportion to the distribution of other funds under this section.

(c) Children to be counted

                     (1) Categories of children

        The number of children to be counted for purposes of this 
    section is the aggregate of--
            (A) the number of children aged 5 to 17, inclusive, in the 
        school district of the local educational agency from families 
        below the poverty level as determined under paragraph (2);
            (B) the number of children aged 5 to 17, inclusive, in the 
        school district of such agency from families above the poverty 
        level as determined under paragraph (5); and
            (C) the number of children aged 5 to 17, inclusive, in the 
        school district of such agency in institutions for neglected and 
        delinquent children (other than such institutions operated by 
        the United States), but not counted pursuant to subpart 1 of 
        part D of this subchapter for the purposes of a grant to a State 
        agency, or being supported in foster homes with public funds.

               (2) Determination of number of children

        For the purposes of this section, the Secretary shall determine 
    the number of children aged 5 to 17, inclusive, from families below 
    the poverty level on the basis of the most recent satisfactory data, 
    described in paragraph (3), available from the Department of 
    Commerce. For fiscal year 1999 and beyond, the District of Columbia 
    and the Commonwealth of Puerto Rico shall be treated as individual 
    local educational agencies. If a local educational agency contains 
    two or more counties in their entirety, then each county will be 
    treated as if such county were a separate local educational agency 
    for purposes of calculating grants under this part. The total of 
    grants for such counties shall be allocated to such a local 
    educational agency, which local educational agency shall distribute 
    to schools in each county within such agency a share of the local 
    educational agency's total grant that is no less than the county's 
    share of the population counts used to calculate the local 
    educational agency's grant.

                       (3) Population updates

        In fiscal year 1997 and every 2 years thereafter, the Secretary 
    shall use updated data on the number of children, aged 5 to 17, 
    inclusive, from families below the poverty level for counties or 
    local educational agencies, published by the Department of Commerce, 
    unless the Secretary and the Secretary of Commerce determine that 
    use of the updated population data would be inappropriate or 
    unreliable, taking into consideration the recommendations of the 
    study to be conducted by the National Academy of Sciences. If the 
    Secretary and the Secretary of Commerce determine that some or all 
    of the data referred to in this paragraph are inappropriate or 
    unreliable, they shall jointly issue a report setting forth their 
    reasons in detail. In determining the families which are below the 
    poverty level, the Secretary shall utilize the criteria of poverty 
    used by the Bureau of the Census in compiling the most recent 
    decennial census, in such form as those criteria have been updated 
    by increases in the Consumer Price Index for all urban consumers, 
    published by the Bureau of Labor Statistics.

                              (4) Study

        (A) The Secretary of Education shall, within 30 days after 
    October 20, 1994, contract with the National Academy of Sciences 
    (hereafter in this section referred to as the ``Academy'') to study 
    the program to produce intercensal poverty data for small geographic 
    areas and certain age cohorts being developed by the Bureau of the 
    Census.
        (B) In conducting its study, the Academy shall consider such 
    matters as--
            (i) the methodology used to produce and publish intercensal 
        poverty data, and possible alternative methods to improve the 
        usefulness of the data for Federal program purposes;
            (ii) the availability of alternative indicators of poverty 
        for small geographic areas, against which the poverty data 
        produced and published by the Bureau of the Census could be 
        compared;
            (iii) the reliability of the poverty data produced and 
        published by the Bureau of the Census, particularly for less 
        populous geographic areas;
            (iv) the reliability of intercensal poverty data produced 
        and published by the Bureau of the Census, as compared over time 
        to similar data produced by the Bureau of the Census during the 
        most recent decennial census; and
            (v) the usefulness of poverty data produced and published by 
        the Bureau of the Census for Federal programs that allocate 
        funds to State and sub-State areas based, in whole or in part, 
        on such data.

        (C) The Academy shall submit to the Secretary and the Secretary 
    of Commerce, as well as to the Committee on Education and Labor and 
    the Committee on Post Office and Civil Service of the House of 
    Representatives and the Committee on Labor and Human Resources and 
    the Committee on Governmental Affairs of the Senate--
            (i) not later than 18 months after the date on which a 
        contract is entered into under subsection (a) of this section, 
        and not later than every 18 months thereafter, such interim 
        reports on the Academy's activities under this chapter that the 
        Academy deems appropriate, including a detailed statement of the 
        Academy's findings and conclusions with respect to any poverty 
        data which the Bureau of the Census publishes and produces, 
        within 90 days of such publication; and
            (ii) not later than December 31, 1998, a final report which 
        shall include a more detailed statement of the Academy's 
        findings and conclusions with respect to the use of any 
        intercensal poverty data produced and published by the Bureau of 
        the Census as the basis for allocating Federal funds under this 
        chapter.

        (D) Of the funds appropriated under section 6302(f) of this 
    title, the Secretary shall use such sums as are necessary in each of 
    fiscal years 1995, 1996, 1997, 1998, and 1999 to carry out the 
    provisions of this paragraph.

                  (5) Other children to be counted

        For purposes of this section, the Secretary shall determine the 
    number of children aged 5 to 17, inclusive, from families above the 
    poverty level on the basis of the number of such children from 
    families receiving an annual income, in excess of the current 
    criteria of poverty, from payments under a State program funded 
    under part A of title IV of the Social Security Act [42 U.S.C. 601 
    et seq.]; and in making such determinations the Secretary shall 
    utilize the criteria of poverty used by the Bureau of the Census in 
    compiling the most recent decennial census for a family of 4 in such 
    form as those criteria have been updated by increases in the 
    Consumer Price Index for all urban consumers, published by the 
    Bureau of Labor Statistics. The Secretary shall determine the number 
    of such children and the number of children of such ages living in 
    institutions for neglected or delinquent children, or being 
    supported in foster homes with public funds, on the basis of the 
    caseload data for the month of October of the preceding fiscal year 
    (using, in the case of children described in the preceding sentence, 
    the criteria of poverty and the form of such criteria required by 
    such sentence which were determined for the calendar year preceding 
    such month of October) or, to the extent that such data are not 
    available to the Secretary before January of the calendar year in 
    which the Secretary's determination is made, then on the basis of 
    the most recent reliable data available to the Secretary at the time 
    of such determination. The Secretary of Health and Human Services 
    shall collect and transmit the information required by this 
    subparagraph to the Secretary not later than January 1 of each year.

                            (6) Estimate

        When requested by the Secretary, the Secretary of Commerce shall 
    make a special updated estimate of the number of children of such 
    ages who are from families below the poverty level (as determined 
    under subparagraph (A) of this paragraph \1\) in each school 
    district, and the Secretary is authorized to pay (either in advance 
    or by way of reimbursement) the Secretary of Commerce the cost of 
    making this special estimate. The Secretary of Commerce shall give 
    consideration to any request of the chief executive of a State for 
    the collection of additional census information. For purposes of 
    this section, the Secretary shall consider all children who are in 
    correctional institutions to be living in institutions for 
    delinquent children.
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    \1\ So in original. Probably should be ``paragraph (2) of this 
subsection''.
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(d) State minimum

    Notwithstanding subsection (b)(1) or (d) of section 6332 of this 
title, the aggregate amount allotted for all local educational agencies 
within a State may not be less than the lesser of--
        (1) 0.25 percent of total grants under this section; or
        (2) the average of--
            (A) one-quarter of 1 percent of the total amount available 
        for such fiscal year under this section; and
            (B) the number of children in such State counted under 
        subsection (c) of this section in the fiscal year multiplied by 
        150 percent of the national average per pupil payment made with 
        funds available under this section for that year.

(Pub. L. 89-10, title I, Sec. 1124, as added Pub. L. 103-382, title I, 
Sec. 101, Oct. 20, 1994, 108 Stat. 3564; amended Pub. L. 104-193, title 
I, Sec. 110(j)(2), Aug. 22, 1996, 110 Stat. 2172.)

                       References in Text

    The Social Security Act, referred to in subsec. (c)(5), is act Aug. 
14, 1935, ch. 531, 49 Stat. 620, as amended. Part A of title IV of the 
Act is classified generally to part A (Sec. 601 et seq.) of subchapter 
IV 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.


                               Amendments

    1996--Subsec. (c)(5). Pub. L. 104-193 substituted ``a State program 
funded under part A of'' for ``the program of aid to families with 
dependent children under a State plan approved under''.

                         Change of Name

    Committee on Education and Labor of House of Representatives treated 
as referring to Committee on Economic and Educational Opportunities of 
House of Representatives by section 1(a) of Pub. L. 104-14, set out as a 
note preceding section 21 of Title 2, The Congress. Committee on 
Economic and Educational Opportunities of House of Representatives 
changed to Committee on Education and the Workforce of House of 
Representatives by House Resolution No. 5, One Hundred Fifth Congress, 
Jan. 7, 1997.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-193 effective July 1, 1997, with transition 
rules relating to State options to accelerate such date, rules relating 
to claims, actions, and proceedings commenced before such date, rules 
relating to closing out of accounts for terminated or substantially 
modified programs and continuance in office of Assistant Secretary for 
Family Support, and provisions relating to termination of entitlement 
under AFDC program, see section 116 of Pub. L. 104-193, as amended, set 
out as an Effective Date note under section 601 of Title 42, The Public 
Health and Welfare.

      Abolition of House Committee on Post Office and Civil Service

    Committee on Post Office and Civil Service of House of 
Representatives abolished by House Resolution No. 6, One Hundred Fourth 
Congress, Jan. 4, 1995. References to Committee on Post Office and Civil 
Service treated as referring to Committee on Government Reform and 
Oversight of House of Representatives, see section 1(b) of Pub. L. 104-
14, set out as a note preceding section 21 of Title 2, The Congress. 
Committee on Government Reform and Oversight of House of Representatives 
changed to Committee on Government Reform of House of Representatives by 
House Resolution No. 5, One Hundred Sixth Congress, Jan. 6, 1999.

                  Section Referred to in Other Sections

    This section is referred to in sections 1070a-24, 2351, 6332, 6334, 
6335, 6336, 6337, 6661d, 6661e of this title.
