 CHAPTER 70--STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY 
                                 SCHOOLS
 
         SUBCHAPTER VI--INNOVATIVE EDUCATION PROGRAM STRATEGIES
 
                    Part A--State and Local Programs
 
Sec. 7312. Allocation to local educational agencies


(a) Distribution rule

    From the sums made available each year to carry out this subchapter, 
the State educational agency shall distribute not less than 85 percent 
to local educational agencies within such State according to the 
relative enrollments in public and private, nonprofit schools within the 
school districts of such agencies, adjusted, in accordance with criteria 
approved by the Secretary, to provide higher per pupil allocations to 
local educational agencies which have the greatest numbers or 
percentages of children whose education imposes a higher than average 
cost per child, such as--
        (1) children living in areas with high concentrations of low-
    income families;
        (2) children from low-income families; and
        (3) children living in sparsely populated areas.

(b) Calculation of enrollments

                           (1) In general

        The calculation of relative enrollments under subsection (a) of 
    this section shall be on the basis of the total of--
            (A) the number of children enrolled in public schools; and
            (B) the number of children enrolled in private nonprofit 
        schools that desire that their children participate in programs 
        or projects assisted under this subchapter, for the fiscal year 
        preceding the fiscal year for which the determination is made.

                          (2) Construction

        Nothing in this subsection shall diminish the responsibility of 
    local educational agencies to contact, on an annual basis, 
    appropriate officials from private nonprofit schools within the 
    areas served by such agencies in order to determine whether such 
    schools desire that their children participate in programs assisted 
    under this part.

                           (3) Adjustments

        (A) Relative enrollments under subsection (a) of this section 
    shall be adjusted, in accordance with criteria approved by the 
    Secretary under subparagraph (B), to provide higher per pupil 
    allocations only to local educational agencies which serve the 
    greatest numbers or percentages of--
            (i) children living in areas with high concentrations of 
        low-income families;
            (ii) children from low-income families; or
            (iii) children living in sparsely populated areas.

        (B) The Secretary shall review criteria submitted by a State 
    educational agency for adjusting allocations under paragraph (1) and 
    shall approve such criteria only if the Secretary determines that 
    such criteria are reasonably calculated to produce an adjusted 
    allocation that reflects the relative needs within the State's local 
    educational agencies based on the factors set forth in subparagraph 
    (A).

(c) Payment of allocations

                          (1) Distribution

        From the funds paid to a State educational agency pursuant to 
    section 7302 of this title for a fiscal year, a State educational 
    agency shall distribute to each eligible local educational agency 
    which has submitted an application as required in section 7332 of 
    this title the amount of such local educational agency allocation as 
    determined under subsection (a) of this section.

                        (2) Additional funds

        (A) Additional funds resulting from higher per pupil allocations 
    provided to a local educational agency on the basis of adjusted 
    enrollments of children described in subsection (a) of this section, 
    may, at the discretion of the local educational agency, be allocated 
    for expenditures to provide services for children enrolled in public 
    and private nonprofit schools in direct proportion to the number of 
    children described in subsection (a) of this section and enrolled in 
    such schools within the local educational agency.
        (B) In any fiscal year, any local educational agency that elects 
    to allocate such additional funds in the manner described in 
    subparagraph (A) shall allocate all additional funds to schools 
    within the local educational agency in such manner.
        (C) The provisions of subparagraphs (A) and (B) may not be 
    construed to require any school to limit the use of such additional 
    funds to the provision of services to specific students or 
    categories of students.

(Pub. L. 89-10, title VI, Sec. 6102, as added Pub. L. 103-382, title I, 
Sec. 101, Oct. 20, 1994, 108 Stat. 3708.)

                  Section Referred to in Other Sections

    This section is referred to in section 7351 of this title.
