SEC. 8019.




Section Summary




Section 8521, <<NOTE: 20 USC 7901.>> as redesignated by section 8001

of this Act, is amended--

(1) in subsection (a), by inserting ``, subject to the

requirements of subsection (b)'' after ``for the second

preceding fiscal year'';

(2) in subsection (b)(1), by inserting before the period at

the end the following: ``, if such local educational agency has

also failed to meet such requirement (as determined using the

measure most favorable to the local agency) for 1 or more of the

5 immediately preceding fiscal years''; and

(3) in subsection (c)(1), by inserting ``or a change in the

organizational structure of the local educational agency'' after

``, such as a natural disaster''.


 ``SEC. 9521. <<NOTE: 20 USC 7901.>> MAINTENANCE OF EFFORT.

``(a) In General.--A local educational agency may receive funds

under a covered program for any fiscal year only if the State

educational agency finds that either the combined fiscal effort per

student or the aggregate expenditures of the agency and the State with

respect to the provision of free public education by the agency for the

preceding fiscal year was not less than 90 percent of the combined

fiscal effort or aggregate expenditures for the second preceding fiscal


``(b) Reduction in Case of Failure To Meet.--

``(1) In general.--The State educational agency shall reduce

the amount of the allocation of funds under a covered program in

any fiscal year in the exact proportion by which a local

educational agency fails to meet the requirement of subsection

(a) of this section by falling below 90 percent of both the

combined fiscal effort per student and aggregate expenditures

(using the measure most favorable to the local agency).

``(2) Special rule.--No such lesser amount shall be used for

computing the effort required under subsection (a) of this

section for subsequent years.

``(c) Waiver.--The Secretary may waive the requirements of this

section if the Secretary determines that a waiver would be equitable due


``(1) exceptional or uncontrollable circumstances, such as a

natural disaster; or

``(2) a precipitous decline in the financial resources of

the local educational agency.