 CHAPTER 70--STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY 
                                 SCHOOLS
 
   SUBCHAPTER IX--INDIAN, NATIVE HAWAIIAN, AND ALASKA NATIVE EDUCATION
 
                        Part A--Indian Education
 
         subpart 1--formula grants to local educational agencies
 
Sec. 7817. Payments


(a) In general

    Subject to subsections (b) and (c) of this section, the Secretary 
shall pay to each local educational agency that submits an application 
that is approved by the Secretary under this subpart the amount 
determined under section 7813 of this title. The Secretary shall notify 
the local educational agency of the amount of the payment not later than 
June 1 of the year for which the Secretary makes the payment.

(b) Payments taken into account by the State

    The Secretary may not make a grant under this subpart to a local 
educational agency for a fiscal year if, for such fiscal year, the State 
in which the local educational agency is located takes into 
consideration payments made under this subpart (or under subpart 1 of 
the Indian Education Act of 1988) in determining the eligibility of the 
local educational agency for State aid, or the amount of the State aid, 
with respect to the free public education of children during such fiscal 
year or the preceding fiscal year.

(c) Reduction of payment for failure to maintain fiscal effort

                           (1) In general

        The Secretary may not pay a local educational agency the full 
    amount of a grant award determined under section 7813 of this title 
    for any fiscal year unless the State educational agency notifies the 
    Secretary, and the Secretary determines, that with respect to the 
    provision of free public education by the local educational agency 
    for the preceding fiscal year, that the combined fiscal effort of 
    the local educational agency and the State, computed on either a per 
    student or aggregate expenditure basis was not less than 90 percent 
    of the amount of the combined fiscal effort, computed on the same 
    basis, for the second preceding fiscal year.

                             (2) Failure

        If, for any fiscal year, the Secretary determines that a local 
    educational agency failed to maintain the fiscal effort of such 
    agency at the level specified in paragraph (1), the Secretary 
    shall--
            (A) reduce the amount of the grant that would otherwise be 
        made to such agency under this subpart in the exact proportion 
        of such agency's failure to maintain its fiscal effort at such 
        level; and
            (B) not use the reduced amount of the agency's expenditures 
        for the preceding year to determine compliance with paragraph 
        (1) for any succeeding fiscal year, but shall use the amount of 
        expenditures that would have been required to comply with 
        paragraph (1).

                             (3) Waiver

        (A) The Secretary may waive the requirement of paragraph (1), 
    for not more than one year at a time, if the Secretary determines 
    that the failure to comply with such requirement is due to 
    exceptional or uncontrollable circumstances, such as a natural 
    disaster or a precipitous and unforeseen decline in the agency's 
    financial resources.
        (B) The Secretary shall not use the reduced amount of such 
    agency's expenditures for the fiscal year preceding the fiscal year 
    for which a waiver is granted to determine compliance with paragraph 
    (1) for any succeeding fiscal year, but shall use the amount of 
    expenditures that would have been required to comply with paragraph 
    (1) in the absence of the waiver.

(d) Reallocations

    The Secretary may reallocate, in a manner that the Secretary 
determines will best carry out the purpose of this subpart, any amounts 
that--
        (1) based on estimates made by local educational agencies or 
    other information, the Secretary determines will not be needed by 
    such agencies to carry out approved programs under this subpart; or
        (2) otherwise become available for reallocation under this 
    subpart.

(Pub. L. 89-10, title IX, Sec. 9117, as added Pub. L. 103-382, title I, 
Sec. 101, Oct. 20, 1994, 108 Stat. 3781.)

                       References in Text

    The Indian Education Act of 1988, referred to in subsec. (b), is 
part C (Secs. 5301-5352) of title V of Pub. L. 100-297, Apr. 28, 1988, 
102 Stat. 395. Subpart 1 (Secs. 5311-5316) of the Act was classified 
generally to subchapter I (Sec. 2601 et seq.) of chapter 28 of Title 25, 
Indians, prior to repeal by Pub. L. 103-382, title III, Sec. 367, Oct. 
20, 1994, 108 Stat. 3976.
