SEC. 1017/SEC. 1125A

EDUCATION FINANCE INCENTIVE GRANT PROGRAM

 

 

Section Summary

 


ESSA Update

SEC. 1017. EDUCATION FINANCE INCENTIVE GRANT PROGRAM.

    Section 1125A (20 U.S.C. 6337) is amended--
            (1) in subsection (a), by striking ``funds appropriated
        under subsection (f)'' and inserting ``funds made available
        under section 1122(a)'';
            (2) in subsection (b)(1)--
                    (A) in subparagraph (A), by striking ``appropriated
                pursuant to subsection (f)'' and inserting ``made
                available for any fiscal year to carry out this
                section''; and
                    (B) in subparagraph (B)(i), by striking ``total
                appropriations'' and inserting ``the total amount
                reserved under section 1122(a) to carry out this
                section'';
            (3) in subsection (c), by redesignating subparagraphs (A) 
        and (B) as paragraphs (1) and (2), respectively;
            (4) in subsection (d)(1)(A)(ii), by striking ``clause
        ``(i)'' and inserting ``clause (i)'';
            (5) by striking subsection (e) and inserting the following:

    ``(e) Maintenance of Effort.--
            ``(1) In general.--A State is entitled to receive its full
        allotment of funds under this section for any fiscal year if the
        Secretary finds that the State's fiscal effort per student or
        the aggregate expenditures of the State with respect to the
        provision of free public education by the State for the
        preceding fiscal year was not less than 90 percent of the fiscal
        effort or aggregate expenditures for the second preceding fiscal
        year, subject to the requirements of paragraph (2).
            ``(2) Reduction in case of failure to meet.--
                    ``(A) In general.--The Secretary shall reduce the
                amount of the allotment of funds under this section for
                any fiscal year in the exact proportion by which a State
                fails to meet the requirement of paragraph (1) by
                falling below 90 percent of both the fiscal effort per
                student and aggregate expenditures (using the measure
                most favorable to the State), if such State has also
                failed to meet such requirement (as determined using the
                measure most favorable to the State) for 1 or more of
                the 5 immediately preceding fiscal years.

[[Page 129 STAT. 1879]]

                    ``(B) Special rule.--No such lesser amount shall be
                used for computing the effort required under paragraph
                (1) for subsequent years.
            ``(3) Waiver.--The Secretary may waive the requirements of
        this subsection if the Secretary determines that a waiver would
        be equitable due to--
                    ``(A) exceptional or uncontrollable circumstances, 
                such as a natural disaster or a change in the
                organizational structure of the State; or
                    ``(B) a precipitous decline in the financial
                resources of the State.'';
            (6) by striking subsection (f);
            (7) by redesignating subsection (g) as subsection (f); and
            (8) in subsection (f), as redesignated by paragraph (7)--
                    (A) in paragraph (1), by striking ``under this
                section'' and inserting ``to carry out this section''; 
                and
                    (B) in paragraph (3), in the matter preceding
                subparagraph (A), by striking ``shall be'' and inserting
                ``shall be--''.


NCLB Text

``SEC. <<NOTE: 20 USC 6337.>> 1125A. EDUCATION FINANCE INCENTIVE GRANT
            PROGRAM.

    ``(a) Grants.--From funds appropriated under subsection (f) the
Secretary is authorized to make grants to States, from allotments under
subsection (b), to carry out the programs and activities of this part.
    ``(b) Distribution Based Upon Fiscal Effort and Equity.--
            ``(1) In general.--
                    ``(A) In general.--Except as provided in
                subparagraph (B), funds appropriated pursuant to
                subsection (f) shall

[[Page 115 STAT. 1526]]

                be allotted to each State based upon the number of
                children counted under section 1124(c) in such State
                multiplied by the product of--
                          ``(i) the amount in section 1124(a)(1)(B) for
                      all States other than the Commonwealth of Puerto
                      Rico, except that the amount determined under that
                      subparagraph shall not be less that 34 percent or
                      more than 46 percent of the average per pupil
                      expenditure in the United States, and the amount
                      in section 1124(a)(4) for the Commonwealth of
                      Puerto Rico, except that the amount in section
                      1124(a)(4)(A)(ii) shall be 34 percent of the
                      average per pupil expenditure in the United
                      States; multiplied by
                          ``(ii) such State's effort factor described in
                      paragraph (2); multiplied by
                          ``(iii) 1.30 minus such State's equity factor
                      described in paragraph (3).
                    ``(B) State minimum.--Notwithstanding any other
                provision of this section or section 1122, from the
                total amount available for any fiscal year to carry out
                this section, each State shall be allotted at least the
                lesser of--
                          ``(i) 0.35 percent of total appropriations; or
                          ``(ii) the average of--
                                    ``(I) 0.35 percent of the total
                                amount available to carry out this
                                section; and
                                    ``(II) 150 percent of the national
                                average grant under this section per
                                child described in section 1124(c), 
                                without application of a weighting
                                factor, multiplied by the State's total
                                number of children described in section
                                1124(c), without application of a
                                weighting factor.
            ``(2) Effort factor.--
                    ``(A) In general.--Except as provided in
                subparagraph (B), the effort factor for a State shall be
                determined in accordance with the succeeding sentence, 
                except that such factor shall not be less than 0.95 nor
                greater than 1.05. The effort factor determined under
                this sentence shall be a fraction the numerator of which
                is the product of the 3-year average per-pupil
                expenditure in the State multiplied by the 3-year
                average per capita income in the United States and the
                denominator of which is the product of the 3-year
                average per capita income in such State multiplied by
                the 3-year average per-pupil expenditure in the United
                States.
                    ``(B) Commonwealth of puerto rico.--The effort
                factor for the Commonwealth of Puerto Rico shall be
                equal to the lowest effort factor calculated under
                subparagraph (A) for any State.
            ``(3) Equity factor.--
                    ``(A) Determination.--
                          ``(i) In general.--Except as provided in
                      subparagraph (B), the Secretary shall determine
                      the equity factor under this section for each
                      State in accordance with clause (ii).
                          ``(ii) Computation.--

[[Page 115 STAT. 1527]]

                                    ``(I) In general.--For each State, 
                                the Secretary shall compute a weighted
                                coefficient of variation for the per-
                                pupil expenditures of local educational
                                agencies in accordance with subclauses
                                (II), (III), and (IV).
                                    ``(II) Variation.--In computing
                                coefficients of variation, the Secretary
                                shall weigh the variation between per-
                                pupil expenditures in each local
                                educational agency and the average per-
                                pupil expenditures in the State
                                according to the number of pupils served
                                by the local educational agency.
                                    ``(III) Number of pupils.--In
                                determining the number of pupils under
                                this paragraph served by each local
                                educational agency and in each State, 
                                the Secretary shall multiply the number
                                of children counted under section
                                1124(c) by a factor of 1.4.
                                    ``(IV) Enrollment requirement.--In
                                computing coefficients of variation, the
                                Secretary shall include only those local
                                educational agencies with an enrollment
                                of more than 200 students.
                    ``(B) Special rule.--The equity factor for a State
                that meets the disparity standard described in section
                222.162 of title 34, Code of Federal Regulations (as
                such section was in effect on the day preceding the date
                of enactment of the No Child Left Behind Act of 2001) or
                a State with only one local educational agency shall be
                not greater than 0.10.

    ``(c) Use of Funds; Eligibility of Local Educational Agencies.--All
funds awarded to each State under this section shall be allocated to
local educational agencies under the following provisions. Within local
educational agencies, funds allocated under this section shall be
distributed to schools on a basis consistent with section 1113, and may
only be used to carry out activities under this part. A local
educational agency in a State is eligible to receive a targeted grant
under this section for any fiscal year if--
            ``(A) the number of children in the local educational agency
        counted under section 1124(c), before application of the
        weighted child count described in paragraph (3), is at least 10; 
        and
            ``(B) if the number of children counted for grants under
        section 1124(c), before application of the weighted child count
        described in paragraph (3), is at least 5 percent of the total
        number of children aged 5 to 17 years, inclusive, in the school
        district of the local educational agency.

    ``For any fiscal year for which the Secretary allocates funds under
this section on the basis of counties, funds made available as a result
of applying this subsection 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.
    ``(d) Allocation of Funds to Eligible Local Educational Agencies.--
Funds received by States under this section shall be allocated within
States to eligible local educational agencies on the basis of weighted
child counts calculated in accordance with paragraph (1), (2), or (3), 
as appropriate for each State.

[[Page 115 STAT. 1528]]

            ``(1) States with an equity factor less than .10.--In States
        with an equity factor less than .10, the weighted child counts
        referred to in subsection (d) shall be calculated as follows:
                    ``(A) Weights for allocations to counties.--
                          ``(i) In general.--For each fiscal year for
                      which the Secretary uses county population data to
                      calculate grants, the weighted child count used to
                      determine a county's allocation under this section
                      is the larger of the two amounts determined under
                      clauses (ii) and (iii).
                          ``(ii) By percentage of children.--The amount
                      referred to in clause ``(i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) for
                                that county who constitute not more than
                                15.00 percent, inclusive, of the
                                county's total population aged 5 to 17, 
                                inclusive, multiplied by 1.0;
                                    ``(II) the number of such children
                                who constitute more than 15.00 percent, 
                                but not more than 19.00 percent, of such
                                population, multiplied by 1.75;
                                    ``(III) the number of such children
                                who constitute more than 19.00 percent, 
                                but not more than 24.20 percent, of such
                                population, multiplied by 2.5;
                                    ``(IV) the number of such children
                                who constitute more than 24.20 percent, 
                                but not more than 29.20 percent, of such
                                population, multiplied by 3.25; and
                                    ``(V) the number of such children
                                who constitute more than 29.20 percent
                                of such population, multiplied by 4.0.
                          ``(iii) By number of children.--The amount
                      referred to in clause (i) is determined by adding
                                    ``(I) the number of children
                                determined under section 1124(c) who
                                constitute not more than 2,311, 
                                inclusive, of the county's total
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    ``(II) the number of such children
                                between 2,312 and 7,913, inclusive, in
                                such population, multiplied by 1.5;
                                    ``(III) the number of such children
                                between 7,914 and 23,917, inclusive, in
                                such population, multiplied by 2.0;
                                    ``(IV) the number of such children
                                between 23,918 and 93,810, inclusive, in
                                such population, multiplied by 2.5; and
                                    ``(V) the number of such children in
                                excess of 93,811 in such population, 
                                multiplied by 3.0.
                    ``(B) Weights for allocations to local educational
                agencies.--
                          ``(i) In general.--For each fiscal year for
                      which the Secretary uses local educational agency
                      data, the weighted child count used to determine a
                      local educational agency's grant under this
                      section is the larger

[[Page 115 STAT. 1529]]

                      of the two amounts determined under clauses (ii) 
                      and (iii).
                          ``(ii) By percentage of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) for
                                that local educational agency who
                                constitute not more than 15.58 percent, 
                                inclusive, of the agency's total
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    ``(II) the number of such children
                                who constitute more than 15.58 percent, 
                                but not more than 22.11 percent, of such
                                population, multiplied by 1.75;
                                    ``(III) the number of such children
                                who constitute more than 22.11 percent, 
                                but not more than 30.16 percent, of such
                                population, multiplied by 2.5;
                                    ``(IV) the number of such children
                                who constitute more than 30.16 percent, 
                                but not more than 38.24 percent, of such
                                population, multiplied by 3.25; and
                                    ``(V) the number of such children
                                who constitute more than 38.24 percent
                                of such population, multiplied by 4.0.
                          ``(iii) By number of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) who
                                constitute not more than 691, inclusive, 
                                of the agency's total population aged 5
                                to 17, inclusive, multiplied by 1.0;
                                    ``(II) the number of such children
                                between 692 and 2,262, inclusive, in
                                such population, multiplied by 1.5;
                                    ``(III) the number of such children
                                between 2,263 and 7,851, inclusive, in
                                such population, multiplied by 2.0;
                                    ``(IV) the number of such children
                                between 7,852 and 35,514, inclusive, in
                                such population, multiplied by 2.5; and
                                    ``(V) the number of such children in
                                excess of 35,514 in such population, 
                                multiplied by 3.0.
            ``(2) States with an equity factor greater than or equal to
        .10 and less than .20.--In States with an equity factor greater
        than or equal to .10 and less than .20, the weighted child
        counts referred to in subsection (d) shall be calculated as
        follows:
                    ``(A) Weights for allocations to counties.--
                          ``(i) In general.--For each fiscal year for
                      which the Secretary uses county population data to
                      calculate grants, the weighted child count used to
                      determine a county's allocation under this section
                      is the larger of the two amounts determined under
                      clauses (ii) and (iii).
                          ``(ii) By percentage of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) for
                                that county who constitute not

[[Page 115 STAT. 1530]]

                                more than 15.00 percent, inclusive, of
                                the county's total population aged 5 to
                                17, inclusive, multiplied by 1.0;
                                    ``(II) the number of such children
                                who constitute more than 15.00 percent, 
                                but not more than 19.00 percent, of such
                                population, multiplied by 1.5;
                                    ``(III) the number of such children
                                who constitute more than 19.00 percent, 
                                but not more than 24.20 percent, of such
                                population, multiplied by 3.0;
                                    ``(IV) the number of such children
                                who constitute more than 24.20 percent, 
                                but not more than 29.20 percent, of such
                                population, multiplied by 4.5; and
                                    ``(V) the number of such children
                                who constitute more than 29.20 percent
                                of such population, multiplied by 6.0.
                          ``(iii) By number of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) who
                                constitute not more than 2,311, 
                                inclusive, of the county's total
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    ``(II) the number of such children
                                between 2,312 and 7,913, inclusive, in
                                such population, multiplied by 1.5;
                                    ``(III) the number of such children
                                between 7,914 and 23,917, inclusive, in
                                such population, multiplied by 2.25;
                                    ``(IV) the number of such children
                                between 23,918 and 93,810, inclusive, in
                                such population, multiplied by 3.375; 
                                and
                                    ``(V) the number of such children in
                                excess of 93,811 in such population, 
                                multiplied by 4.5.
                    ``(B) Weights for allocations to local educational
                agencies.--
                          ``(i) In general.--For each fiscal year for
                      which the Secretary uses local educational agency
                      data, the weighted child count used to determine a
                      local educational agency's grant under this
                      section is the larger of the two amounts
                      determined under clauses (ii) and (iii).
                          ``(ii) By percentage of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) for
                                that local educational agency who
                                constitute not more than 15.58 percent, 
                                inclusive, of the agency's total
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    ``(II) the number of such children
                                who constitute more than 15.58 percent, 
                                but not more than 22.11 percent, of such
                                population, multiplied by 1.5;
                                    ``(III) the number of such children
                                who constitute more than 22.11 percent, 
                                but not more

[[Page 115 STAT. 1531]]

                                than 30.16 percent, of such population, 
                                multiplied by 3.0;
                                    ``(IV) the number of such children
                                who constitute more than 30.16 percent, 
                                but not more than 38.24 percent, of such
                                population, multiplied by 4.5; and
                                    ``(V) the number of such children
                                who constitute more than 38.24 percent
                                of such population, multiplied by 6.0.
                          ``(iii) By number of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) who
                                constitute not more than 691, inclusive, 
                                of the agency's total population aged 5
                                to 17, inclusive, multiplied by 1.0;
                                    ``(II) the number of such children
                                between 692 and 2,262, inclusive, in
                                such population, multiplied by 1.5;
                                    ``(III) the number of such children
                                between 2,263 and 7,851, inclusive, in
                                such population, multiplied by 2.25;
                                    ``(IV) the number of such children
                                between 7,852 and 35,514, inclusive, in
                                such population, multiplied by 3.375; 
                                and
                                    ``(V) the number of such children in
                                excess of 35,514 in such population, 
                                multiplied by 4.5.
            ``(3) States with an equity factor greater than or equal to
        .20.--In States with an equity factor greater than or equal to
        .20, the weighted child counts referred to in subsection (d) 
        shall be calculated as follows:
                    ``(A) Weights for allocations to counties.--
                          ``(i) In general.--For each fiscal year for
                      which the Secretary uses county population data to
                      calculate grants, the weighted child count used to
                      determine a county's allocation under this section
                      is the larger of the two amounts determined under
                      clauses (ii) and (iii).
                          ``(ii) By percentage of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) for
                                that county who constitute not more than
                                15.00 percent, inclusive, of the
                                county's total population aged 5 to 17, 
                                inclusive, multiplied by 1.0;
                                    ``(II) the number of such children
                                who constitute more than 15.00 percent, 
                                but not more than 19.00 percent, of such
                                population, multiplied by 2.0;
                                    ``(III) the number of such children
                                who constitute more than 19.00 percent, 
                                but not more than 24.20 percent, of such
                                population, multiplied by 4.0;
                                    ``(IV) the number of such children
                                who constitute more than 24.20 percent, 
                                but not more than 29.20 percent, of such
                                population, multiplied by 6.0; and

[[Page 115 STAT. 1532]]

                                    ``(V) the number of such children
                                who constitute more than 29.20 percent
                                of such population, multiplied by 8.0.
                          ``(iii) By number of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) who
                                constitute not more than 2,311, 
                                inclusive, of the county's total
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    ``(II) the number of such children
                                between 2,312 and 7,913, inclusive, in
                                such population, multiplied by 2.0;
                                    ``(III) the number of such children
                                between 7,914 and 23,917, inclusive, in
                                such population, multiplied by 3.0;
                                    ``(IV) the number of such children
                                between 23,918 and 93,810, inclusive, in
                                such population, multiplied by 4.5; and
                                    ``(V) the number of such children in
                                excess of 93,811 in such population, 
                                multiplied by 6.0.
                    ``(B) Weights for allocations to local educational
                agencies.--
                          ``(i) In general.--For each fiscal year for
                      which the Secretary uses local educational agency
                      data, the weighted child count used to determine a
                      local educational agency's grant under this
                      section is the larger of the two amounts
                      determined under clauses (ii) and (iii).
                          ``(ii) By percentage of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) for
                                that local educational agency who
                                constitute not more than 15.58 percent, 
                                inclusive, of the agency's total
                                population aged 5 to 17, inclusive, 
                                multiplied by 1.0;
                                    ``(II) the number of such children
                                who constitute more than 15.58 percent, 
                                but not more than 22.11 percent, of such
                                population, multiplied by 2.0;
                                    ``(III) the number of such children
                                who constitute more than 22.11 percent, 
                                but not more than 30.16 percent, of such
                                population, multiplied by 4.0;
                                    ``(IV) the number of such children
                                who constitute more than 30.16 percent, 
                                but not more than 38.24 percent, of such
                                population, multiplied by 6.0; and
                                    ``(V) the number of such children
                                who constitute more than 38.24 percent
                                of such population, multiplied by 8.0.
                          ``(iii) By number of children.--The amount
                      referred to in clause (i) is determined by
                      adding--
                                    ``(I) the number of children
                                determined under section 1124(c) who
                                constitute not more than 691, inclusive, 
                                of the agency's total population aged 5
                                to 17, inclusive, multiplied by 1.0;

[[Page 115 STAT. 1533]]

                                    ``(II) the number of such children
                                between 692 and 2,262, inclusive, in
                                such population, multiplied by 2.0;
                                    ``(III) the number of such children
                                between 2,263 and 7,851, inclusive, in
                                such population, multiplied by 3.0;
                                    ``(IV) the number of such children
                                between 7,852 and 35,514, inclusive, in
                                such population, multiplied by 4.5; and
                                    ``(V) the number of such children in
                                excess of 35,514 in such population, 
                                multiplied by 6.0.

    ``(e) Maintenance of Effort.--
            ``(1) In general.--Except as provided in paragraph (2), a
        State is entitled to receive its full allotment of funds under
        this section for any fiscal year if the Secretary finds that
        either the combined fiscal effort per student or the aggregate
        expenditures within the State with respect to the provision of
        free public education for the fiscal year preceding the fiscal
        year for which the determination is made was not less than 90
        percent of such combined fiscal effort or aggregate expenditures
        for the second fiscal year preceding the fiscal year for which
        the determination is made.
            ``(2) Reduction of funds.--The Secretary shall reduce the
        amount of funds awarded to any State under this section in any
        fiscal year in the exact proportion to which the State fails to
        meet the requirements of paragraph (1) by falling below 90
        percent of both the fiscal effort per student and aggregate
        expenditures (using the measure most favorable to the State), 
        and no such lesser amount shall be used for computing the effort
        required under paragraph (1) for subsequent years.
            ``(3) Waivers.--The Secretary may waive, for 1 fiscal year
        only, the requirements of this subsection if the Secretary
        determines that such a waiver would be equitable due to
        exceptional or uncontrollable circumstances such as a natural
        disaster or a precipitous and unforeseen decline in the
        financial resources of the State.

    ``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary for
fiscal year 2002 and for each of the 5 succeeding fiscal years.
    ``(g) Adjustments Where Necessitated by Appropriations.--
            ``(1) In general.--If the sums available under this section
        for any fiscal year are insufficient to pay the full amounts
        that all local educational agencies in States are eligible to
        receive under this section for such year, the Secretary shall
        ratably reduce the allocations to such local educational
        agencies, subject to paragraphs (2) and (3).
            ``(2) Additional funds.--If additional funds become
        available for making payments under this section for such fiscal
        year, allocations that were reduced under paragraph (1) shall be
        increased on the same basis as they were reduced.
            ``(3) Hold-harmless amounts.--For each fiscal year, if
        sufficient funds are available, the amount made available to
        each local educational agency under this section shall be
                    ``(A) not less than 95 percent of the amount made
                available for the preceding fiscal year if the number of
                children counted for grants under section 1124 is not
                less

[[Page 115 STAT. 1534]]

                than 30 percent of the total number of children aged 5
                to 17 years, inclusive, in the local educational agency;
                    ``(B) not less than 90 percent of the amount made
                available for the preceding fiscal year if the
                percentage described in subparagraph (A) is between 15
                percent and 30 percent; and
                    ``(C) not less than 85 percent of the amount made
                available for the preceding fiscal year if the
                percentage described in subparagraph (A) is below 15
                percent.
            ``(4) Applicability.--Notwithstanding any other provision of
        law, the Secretary shall not take into consideration the hold-
        harmless provisions of this subsection for any fiscal year for
        purposes of calculating State or local allocations for the
        fiscal year under any program administered by the Secretary
        other than a program authorized under this part.