SEC. 1017
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.
