``(a) Grants to States._

``(1) Purpose of grants._The Secretary shall make grants to States and the outlying areas, and provide funds to the Secretary of the Interior, to assist them to provide special education and related services to children with disabilities in accordance with this part.

`(a) GRANTS TO STATES-

(a) GRANTS TO STATES-

``(2) Maximum amount._The maximum amount available for awarding grants under this part for any fiscal year is_

`(2) MAXIMUM AMOUNTS- The maximum amount of the grant a State may receive under this section for any fiscal year is--

(2) MAXIMUM AMOUNTS- The maximum amount of the grant a State may receive under this section for any fiscal year is --

``(i) aged 3 through 5, if the State was eligible for a grant under section 619; and

``(ii) aged 6 through 21; multiplied by

`(i) aged 3 through 5 if the State is eligible for a grant under section 619; and

`(ii) aged 6 through 21; multiplied by

(ii) aged 6 through 21; multiplied by

``(C) the rate of change in the sum of_

``(i) 85 percent of the change in the nationwide total of the population described in (d)(3)(A)(i)(II); and

`(b) Outlying Areas and Freely Associated States._

``(1) Funds reserved._From the amount appropriated for any fiscal year under subsection (i), the Secretary shall reserve not more than 1 percent, which shall be used_

``(A) to provide assistance to the outlying areas in accordance with their respective populations of individuals aged 3 through 21; and

`(b) OUTLYING AREAS-

(b) OUTLYING AREAS AND FREELY ASSOCIATED STATES-

(A) to provide assistance to the outlying areas in accordance with their respective populations of individuals aged 3 through 21; and

(2) LIMITATION FOR FREELY ASSOCIATED STATES-

(C) ASSISTANCE REQUIREMENTS- Any freely associated State that wishes to receive funds under this part shall include, in its application for assistance --

(i) information demonstrating that it will meet all conditions that apply to States under this part;

(ii) an assurance that, notwithstanding any other provision of this part, it will use those funds only for the direct provision of special education and related services to children with disabilities and to enhance its capacity to make a free appropriate public education available to all children with disabilities;

(iii) the identity of the source and amount of funds, in addition to funds under this part, that it will make available to ensure that a free appropriate public education is available to all children with disabilities within its jurisdiction; and

(iv) such other information and assurances as the Secretary may require.

(D) TERMINATION OF ELIGIBILITY- Notwithstanding any other provision of law, the freely associated States shall not receive any funds under this part for any program year that begins after September 30, 2001.

(E) ADMINISTRATIVE COSTS- The Secretary may provide not more than five percent of the amount reserved for grants under this paragraph to pay the administrative costs of the Pacific Region Educational Laboratory under subparagraph (B).

``(d) Allocations to States._

`(d) ALLOCATIONS TO STATES-

(d) ALLOCATIONS TO STATES-

(e) PERMANENT FORMULA-

(2) USE OF BASE YEAR-

``(A) Allocation of increase._

``(i) In general._Except as provided in subparagraph (B), the Secretary shall allocate for the fiscal year_

``(I) to each State the amount the State received under this section for fiscal year 1999;

`(A)(i) Except as provided in subparagraph (B), the Secretary shall allocate--

`(I) to each State the amount it received for fiscal year 1999;

(I) allocate to each State the amount it received for the base year;

``(III) 15 percent of those remaining funds to States on the basis of the States' relative populations of children described in subclause (II) who are living in poverty.

`(III) 15 percent of those remaining funds to States on the basis of their relative populations of children described in subclause (II) who are living in poverty.

(III) allocate 15 percent of those remaining funds to States on the basis of their relative populations of children described in subclause (II) who are living in poverty.

``(B) Limitations._Notwithstanding subparagraph (A), allocations under this paragraph shall be subject to the following:

``(i) Preceding year allocation._No State's allocation shall be less than its allocation under this section for the preceding fiscal year.

``(ii) Minimum._No State's allocation shall be less than the greatest of_

``(I) the sum of_

`(B) Notwithstanding subparagraph (A), allocations under this paragraph shall be subject to the following:

`(i) No State's allocation shall be less than its allocation for the preceding fiscal year.

`(ii) No State's allocation shall be less than the greatest of--

`(I) the sum of--

(B) Notwithstanding subparagraph (A), allocations under this paragraph shall be subject to the following:

(i) No State's allocation shall be less than its allocation for the preceding fiscal year.

(ii) No State's allocation shall be less than the greatest of --

(I) the sum of --

``(bb) 1/3 of 1 percent of the amount by which the amount appropriated under subsection (i) for the fiscal year exceeds the amount appropriated for this section for fiscal year 1999;

``(II) the sum of_

``(aa) the amount the State received under this section for the preceding fiscal year; and

`(bb) one-third of one percent of the amount by which the amount appropriated under subsection (i) exceeds the amount appropriated under this section for fiscal year 1999;

`(II) the sum of--

`(aa) the amount it received for the preceding fiscal year; and

(II) the sum of --

(aa) the amount it received for the preceding fiscal year; and

``(III) the sum of_

``(aa) the amount the State received under this section for the preceding fiscal year; and

``(bb) that amount multiplied by 90 percent of the percentage increase in the amount appropriated for this section from the preceding fiscal year.

``(iii) Maximum._Notwithstanding clause (ii), no State's allocation under this paragraph shall exceed the sum of_

``(I) the amount the State received under this section for the preceding fiscal year; and

``(II) that amount multiplied by the sum of 1.5 percent and the percentage increase in the amount appropriated under this section from the preceding fiscal year.

`(III) the sum of--

`(aa) the amount it received for the preceding fiscal year; and

`(bb) that amount multiplied by 90 percent of the percentage increase in the amount appropriated from the preceding fiscal year.

`(iii) Notwithstanding clause (ii), no State's allocation under this paragraph shall exceed the sum of--

`(I) the amount it received for the preceding fiscal year; and

`(II) that amount multiplied by the sum of 1.5 percent and the percentage increase in the amount appropriated.

(III) the sum of --

(aa) the amount it received for the preceding fiscal year; and

(bb) that amount multiplied by 90 percent of the percentage increase in the amount appropriated from the preceding fiscal year.

(iii) Notwithstanding clause (ii), no State's allocation under this paragraph shall exceed the sum of --

(I) the amount it received for the preceding fiscal year; and

(II) that amount multiplied by the sum of 1.5 percent and the percentage increase in the amount appropriated.

``(4) Decrease in funds._If the amount available for allocations to States under paragraph (1) for a fiscal year is less than the amount allocated to the States under this section for the preceding fiscal year, those allocations shall be calculated as follows:

`(4) DECREASE IN FUNDS- If the amount available for allocations to States under paragraph (1) is less than the amount allocated to the States under this section for the preceding fiscal year, those allocations shall be calculated as follows:

(4) DECREASE IN FUNDS- If the amount available for allocations to States under paragraph (1) is less than the amount allocated to the States under this section for the preceding fiscal year, those allocations shall be calculated as follows:

``(i) the amount the State received under this section for fiscal year 1999; and

``(ii) an amount that bears the same relation to any remaining funds as the increase the State received under this section for the preceding fiscal year over fiscal year 1999 bears to the total of all such increases for all States.

``(B) Amounts equal to or less than fiscal year 1999 allocations._

``(i) In general._If the amount available for allocations under this paragraph is equal to or less than the amount allocated to the States for fiscal year 1999, each State shall be allocated the amount the State received for fiscal year 1999.

`(i) the amount it received for fiscal year 1999; and

`(ii) an amount that bears the same relation to any remaining funds as the increase the State received for the preceding fiscal year over fiscal year 1999 bears to the total of all such increases for all States.

`(B)(i) If the amount available for allocations is equal to or less than the amount allocated to the States for fiscal year 1999, each State shall be allocated the amount it received for fiscal year 1999.

(i) the amount it received for the base year; and

(ii) an amount that bears the same relation to any remaining funds as the increase the State received for the preceding fiscal year over the base year bears to the total of all such increases for all States.

(B) (i) If the amount available for allocations is equal to or less than the amount allocated to the States for the base year, each State shall be allocated the amount it received for the base year.

`(e) STATE-LEVEL ACTIVITIES-

`(1) IN GENERAL-

`(A) Each State may retain not more than the amount described in subparagraph (B) for administration and other State-level activities in accordance with paragraphs (2), (3), and (4).

`(B) For each fiscal year, the Secretary shall determine and report to the State educational agency an amount that is 25 percent of the amount the State received under this section for fiscal year 1997, cumulatively adjusted by the Secretary for each succeeding fiscal year by the lesser of--

`(i) the percentage increase, if any, from the preceding fiscal year in the State's allocation under this section; or

`(ii) the rate of inflation, as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.

`(C) A State may use funds it retains under subparagraph (A) without regard to--

`(i) the prohibition on commingling of funds in section 612(a)(18)(B); and

(f) STATE-LEVEL ACTIVITIES-

(1) GENERAL-

(B) For each fiscal year, the Secretary shall determine and report to the State educational agency an amount that is 25 percent of the amount the State received under this section for fiscal year 1997, cumulatively adjusted by the Secretary for each succeeding fiscal year by the lesser of --

(i) the percentage increase, if any, from the preceding fiscal year in the State's allocation under this section; or

``(1) State administration._

`(2) STATE ADMINISTRATION-

`(A) For the purpose of administering this part, including section 619 (including the coordination of activities under this part with, and providing technical assistance to, other programs that provide services to children with disabilities)--

(2) STATE ADMINISTRATION-

`(i) each State may use not more than 20 percent of the maximum amount it may retain under paragraph (1)(A) for any fiscal year or $750,000, whichever is greater; and

``(C) Certification._Prior to expenditure of funds under this paragraph, the State shall certify to the Secretary that the arrangements to establish responsibility for services pursuant to section 612(a)(12)(A) are current.

`(3) HIGH COST SPECIAL EDUCATION AND RELATED SERVICES- Each State may use not more than 40 percent of the maximum amount it may retain under paragraph (1)(A) for any fiscal year to establish and implement cost or risk sharing funds, consortia, or cooperatives to assist local educational agencies in providing high cost special education and related services.

``(2) Other state-level activities._

``(A) In general._For the purpose of providing State-level activities, each State may reserve for each of the fiscal years 2004 and 2005, not more than 10 percent of the amount that remains after subtracting the amount reserved under paragraph (1) from the amount of the State's allocation under subsection (d) for fiscal years 2004 and 2005, respectively. For fiscal years 2006, 2007, 2008, and 2009, the State may reserve the maximum amount the State was eligible to reserve under the preceding sentence for fiscal year 2005 (adjusted by the cumulative rate of inflation since fiscal year 2005 as measured by the percentage increase, if any, in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor).

``(B) Required activities._Funds reserved under subparagraph (A) shall be used to carry out the following activities:

``(i) For monitoring, enforcement and complaint investigation.

``(ii) To establish and implement the mediation, processes required by section 615(e)(1), including providing for the costs of mediators and support personnel;

``(iii) To fund the State protection and advocacy system, or other legal organizations that have expertise in_

``(I) dispute resolution and due process;

``(II) efforts to educate families regarding due process;

``(III) voluntary mediation; and

``(IV) the opportunity to resolve complaints.

``(C) Authorized activities._Funds reserved under subparagraph (A) may be used to carry out the following activities:

``(i) To provide technical assistance, personnel development and training.

``(ii) To support paperwork reduction activities, including expanding the use of technology in the IEP process.

``(iii) To assist local educational agencies in providing positive behavioral interventions and supports and mental health services for children with disabilities.

``(iv) To improve the use of technology in the classroom by children with disabilities to enhance learning.

``(v) To support the development and use of technology, including universally designed technologies and assistive technology devices, to maximize accessibility to the general curriculum for students with disabilities.

``(vi) Development and implementation of transition programs, including coordination of services with agencies involved in supporting the transition of students with disabilities to post-secondary activities.

``(vii) To assist local educational agencies in meeting personnel shortages.

``(viii) To support capacity building activities and improve the delivery of services by local educational agencies to improve results for children with disabilities.

``(ix) Alternative programming for children who have been expelled from school, and services for children in correctional facilities, children enrolled in State-operated or State-supported schools, and children in charter schools.

`(4) OTHER STATE-LEVEL ACTIVITIES- Each State shall use any funds it retains under paragraph (1) and does not use under paragraph (2) or (3) for any of the following:

`(A) Support and direct services, including technical assistance and personnel development and training.

`(B) Administrative costs of monitoring and complaint investigation.

`(C) To establish and implement the mediation and voluntary binding arbitration processes required by sections 612(a)(17) and 615(e), including providing for the costs of mediators, arbitrators, and support personnel.

`(D) To assist local educational agencies in meeting personnel shortages.

`(E) Activities at the State and local levels to meet the performance goals established by the State under section 612(a)(15) and to support implementation of the State plan under subpart 1 of part D if the State receives funds under that subpart.

`(F) To support paperwork reduction activities, including expanding the appropriate use of technology in the IEP process under this part.

`(G) To develop and maintain a comprehensive, coordinated, prereferral educational support system for students in kindergarten through grade 12 (with a particular emphasis on students in kindergarten through grade 3) who are not enrolled in special education but who need additional academic and behavioral support to succeed in a general education environment.

`(H) To support capacity building activities and improve the delivery of services by local educational agencies to improve results for children with disabilities.

`(I) For subgrants to local educational agencies for the purposes described in paragraph (5)(A).

(A) Support and direct services, including technical assistance and personnel development and training.

(B) Administrative costs of monitoring and complaint investigation, but only to the extent that those costs exceed the costs incurred for those activities during fiscal year 1985.

(D) To assist local educational agencies in meeting personnel shortages.

(E) To develop a State Improvement Plan under subpart 1 of part D.

``(3) Local educational agency risk pool._

``(A) In general._For the purpose of assisting local educational agencies (and charter schools that are local educational agencies) in addressing the needs of high-need children and the unanticipated enrollment of other children eligible for service under this part, each State shall reserve for each of the fiscal years 2004 through 2009, 2 percent of the amount that remains after subtracting the amount reserved under paragraph (1) from the amount of the State's allocation under subsection (d) for each of the fiscal years 2004 through 2009, respectively, to_

``(i) establish a high-cost fund; and

``(ii) make disbursements from the high-cost fund to local educational agencies in accordance with this paragraph.

``(B) Required disbursements from the fund._Each State educational agency shall make disbursements from the fund established under subparagraph (A) to local educational agencies to pay the percentage, described in subparagraph (D), of the costs of providing a free appropriate public education to high-need children.

``(C) Application._A local educational agency that desires a disbursement under this subsection shall submit an application to the State educational agency at such time, in such manner, and containing such information as the State educational agency may require. Such application shall include assurances that funds provided under this paragraph shall not be used to pay costs that otherwise would be reimbursable as medical assistance for a child with a disability under the State medicaid program under title XIX of the Social Security Act.

``(D) Disbursements._

``(i) In general._A State educational agency shall make a disbursement to a local educational agency that submits an application under subparagraph (C) in an amount that is equal to 75 percent of the costs that are in excess of 4 times the average per-pupil expenditure in the United States or in the State where the child resides (whichever average per-pupil expenditure is lower) associated with educating each high need child served by such local educational agency in a fiscal year for whom such agency desires a disbursement.

``(ii) Appropriate costs._The costs associated with educating a high need child under clause (i) are only those costs associated with providing direct special education and related services to such child that are identified in such child's appropriately developed IEP.

``(E) Legal fees._The disbursements under subparagraph (D) shall not support legal fees, court costs, or other costs associated with a cause of action brought on behalf of such child to ensure a free appropriate public education for such child.

``(F) Permissible disbursements from remaining funds._A State educational agency may make disbursements to local educational agencies from any funds that are remaining in the high cost fund after making the required disbursements under subparagraph (D) for a fiscal year for the following purposes:

``(i) To pay the costs associated with serving children with disabilities who moved into the areas served by such local agencies after the budget for the following school year had been finalized to assist the local educational agencies in providing a free appropriate public education for such children in such year.

``(ii) To compensate local educational agencies for extraordinary costs, as determined by the State, of any children eligible for services under this part due to_

``(I) unexpected enrollment or placement of children eligible for services under this part; or

``(II) a significant underestimate of the average cost of providing services to children eligible for services under this part.

``(G) Remaining funds._Funds reserved under subparagraph (A) in any fiscal year but not expended in that fiscal year pursuant to subparagraph (D) or subparagraph (F) shall_

``(i) be allocated to local educational agencies pursuant to subparagraphs (D) or (F) for the next fiscal year; or

``(ii) be allocated to local educational agencies in the same manner as funds are allocated to local educational agencies under subsection (f).

``(H) Assurance of a free appropriate public education._Nothing in this section shall be construed_

``(i) to limit or condition the right of a child with a disability who is assisted under this part to receive a free appropriate public education pursuant to section 612(a)(1) in a least restrictive environment pursuant to section 612(a)(5); or

``(ii) to authorize a State educational agency or local educational agency to indicate a limit on what is expected to be spent on the education of a child with a disability.

``(I) Medicaid services not affected._Disbursements provided under this subsection shall not be used to pay costs that otherwise would be reimbursable as medical assistance for a child with a disability under the State medicaid program under title XIX of the Social Security Act.

``(J) Definitions._In this paragraph:

``(i) Average per-pupil expenditure._The term `average per-pupil expenditure' has the meaning given the term in section 9101 of the Elementary and Secondary Education Act of 1965.

``(ii) High-need child._The term `high-need', when used with respect to a child with a disability, means a child with a disability for whom a free appropriate public education in a fiscal year costs more than 4 times the average per-pupil expenditure for such fiscal year.

``(4) Inapplicability of certain prohibitions._A State may use funds the State reserves under paragraphs (1), (2), and (3) without regard to_

``(A) the prohibition on commingling of funds in section 612(a)(17)(B); and

`(5)(A) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES FOR ACCOUNTABILITY - In any fiscal year in which the percentage increase in the State's allocation under this section exceeds the rate of inflation (as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor), each State shall reserve, from its allocation under this section, the amount described in subparagraph (B) to make subgrants to local educational agencies, unless that amount is less than $100,000, to provide technical assistance and direct services to local educational agencies identified as being in need of improvement under section 1116 of the Elementary and Secondary Education Act of 1965 on the basis, in whole or in part, of the assessment results of the disaggregated subgroup of students with disabilities, including providing professional development to special and regular education teachers, based on scientifically based research to improve educational instruction.

`(B) MAXIMUM SUBGRANT- For each fiscal year, the amount referred to in subparagraph (A) is--

`(i) the maximum amount the State was allowed to retain under paragraph (1)(A) for the prior fiscal year, or for fiscal year 1998, 25 percent of the State's allocation for fiscal year 1997 under this section; multiplied by

`(ii) the difference between the percentage increase in the State's allocation under this section and the rate of inflation, as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.

(i) Direct services, including alternative programming for children who have been expelled from school, and services for children in correctional facilities, children enrolled in State-operated or State-supported schools, and children in charter schools.

(iii) Adopting promising practices, materials, and technology, based on knowledge derived from education research and other sources.

(iv) Establishing, expanding, or implementing interagency agreements and arrangements between local educational agencies and other agencies or organizations concerning the provision of services to children with disabilities and their families.

(v) Increasing cooperative problem-solving between parents and school personnel and promoting the use of alternative dispute resolution.

``(5) Report on use of funds._As part of the information required to be submitted to the Secretary under section 612, each State shall annually describe how amounts under this section_

``(A) will be used to meet the requirements of this Act; and

`(6) REPORT ON USE OF FUNDS- As part of the information required to be submitted to the Secretary under section 612, each State shall annually describe--

`(A) how amounts retained under paragraph (1) will be used to meet the requirements of this part;

`(B) how those amounts will be allocated among the activities described in this subsection to meet State priorities based on input from local educational agencies; and

``(f) Subgrants to Local Educational Agencies._

`(f) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES-

(g) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES-

``(2) Procedure for allocations to local educational agencies._

``(A) Procedure._For each fiscal year for which funds are allocated to States under subsection (d), each State shall allocate funds under paragraph (1) as follows:

`(2) PROCEDURE FOR ALLOCATIONS TO LOCAL EDUCATIONAL AGENCIES- For each fiscal year for which funds are allocated to States under subsection (e), each State shall allocate funds under paragraph (1) as follows:

(2) ALLOCATIONS TO LOCAL EDUCATIONAL AGENCIES-

``(ii) Allocation of remaining funds._After making allocations under clause (i), the State shall_

`(B) ALLOCATION OF REMAINING FUNDS- After making allocations under subparagraph (A), the State shall--

``(II) allocate 15 percent of those remaining funds to those local educational agencies in accordance with their relative numbers of children living in poverty, as determined by the State educational agency.

`(ii) allocate 15 percent of those remaining funds to those agencies in accordance with their relative numbers of children living in poverty, as determined by the State educational agency.

(II) allocate 15 percent of those remaining funds to those agencies in accordance with their relative numbers of children living in poverty, as determined by the State educational agency.

(4) REALLOCATION OF FUNDS- If a State educational agency determines that a local educational agency is adequately providing a free appropriate public education to all children with disabilities residing in the area served by that agency with State and local funds, the State educational agency may reallocate any portion of the funds under this part that are not needed by that local agency to provide a free appropriate public education to other local educational agencies in the State that are not adequately providing special education and related services to all children with disabilities residing in the areas they serve.

(3) FORMER CHAPTER 1 STATE AGENCIES-

(A) To the extent necessary, the State --

(II) the per-child amount provided under such subpart for fiscal year 1994; and

`(4) SPECIAL RULE FOR INCREASED FUNDS-

`(A) IN GENERAL- If the amount available for allocations to States under subsection (d)(1) for a fiscal year is equal to or greater than the amount allocated to States for fiscal year 2003, then each State may retain not more than the amount of funds it had reserved under subsection (e)(1)(B) for fiscal year 2003.

`(B) EXCEPTION- In any fiscal year in which the percentage increase of the amount available for allocations to States under subsection (d)(1) is equal to or greater than the rate of inflation, each State may increase its allocation under subsection (e)(1)(B) by the amount allowed under subsection (e)(4)(B), for the sole purpose of making grants under subsection (e)(4)(A).

``(g) Definitions._For the purpose of this section_

``(1) the term `average per-pupil expenditure in public elementary schools and secondary schools in the United States' means_

``(A) without regard to the source of funds_

``(i) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the determination is made (or, if satisfactory data for that year are not available, during the most recent preceding fiscal year for which satisfactory data are available) of all local educational agencies in the 50 States and the District of Columbia; plus

``(ii) any direct expenditures by the State for the operation of those local educational agencies; divided by

``(B) the aggregate number of children in average daily attendance to whom those local educational agencies provided free public education during that preceding year; and

`(g) DEFINITIONS- For the purpose of this section--

`(1) the term `average per-pupil expenditure in public elementary and secondary schools in the United States' means--

`(A) without regard to the source of funds--

`(i) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the determination is made (or, if satisfactory data for that year are not available, during the most recent preceding fiscal year for which satisfactory data are available) of all local educational agencies in the 50 States and the District of Columbia); plus

`(ii) any direct expenditures by the State for the operation of those agencies; divided by

`(B) the aggregate number of children in average daily attendance to whom those agencies provided free public education during that preceding year; and

(h) DEFINITIONS- For the purpose of this section --

(1) the term 'average per-pupil expenditure in public elementary and secondary schools in the United States' means --

(A) without regard to the source of funds --

(i) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the determination is made (or, if satisfactory data for that year are not available, during the most recent preceding fiscal year for which satisfactory data are available) of all local educational agencies in the 50 States and the District of Columbia); plus

(ii) any direct expenditures by the State for the operation of those agencies; divided by

(B) the aggregate number of children in average daily attendance to whom those agencies provided free public education during that preceding year; and

(2) the term 'State' means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.

``(h) Use of Amounts by Secretary of the Interior._

``(1) Provision of amounts for assistance._

`(h) USE OF AMOUNTS BY SECRETARY OF THE INTERIOR-

`(1) PROVISION OF AMOUNTS FOR ASSISTANCE-

(i) USE OF AMOUNTS BY SECRETARY OF THE INTERIOR-

(1) PROVISION OF AMOUNTS FOR ASSISTANCE-

`(i) 80 percent shall be allocated to such schools by July 1 of that fiscal year; and

``(C) Additional requirement._With respect to all other children aged 3 through 21 on reservations, the State educational agency shall be responsible for ensuring that all of the requirements of this part are implemented.

``(2) Submission of information._The Secretary of Education may provide the Secretary of the Interior amounts under paragraph (1) for a fiscal year only if the Secretary of the Interior submits to the Secretary of Education information that_

``(A) demonstrates that the Department of the Interior meets the appropriate requirements, as determined by the Secretary of Education, of sections 612 (including monitoring and evaluation activities) and 613;

``(B) includes a description of how the Secretary of the Interior will coordinate the provision of services under this part with local educational agencies, tribes and tribal organizations, and other private and Federal service providers;

``(C) includes an assurance that there are public hearings, adequate notice of such hearings, and an opportunity for comment afforded to members of tribes, tribal governing bodies, and affected local school boards before the adoption of the policies, programs, and procedures described in subparagraph (A)

``(D) includes an assurance that the Secretary of the Interior will provide such information as the Secretary of Education may require to comply with section 618;

``(E) includes an assurance that the Secretary of the Interior and the Secretary of Health and Human Services have entered into a memorandum of agreement, to be provided to the Secretary of Education, for the coordination of services, resources, and personnel between their respective Federal, State, and local offices and with State and local educational agencies and other entities to facilitate the provision of services to Indian children with disabilities residing on or near reservations (such agreement shall provide for the apportionment of responsibilities and costs including, but not limited to, child find, evaluation, diagnosis, remediation or therapeutic measures, and (where appropriate) equipment and medical or personal supplies as needed for a child to remain in school or a program); and

`(C) ADDITIONAL REQUIREMENT- With respect to all other children aged 3 to 21, inclusive, on reservations, the State educational agency shall be responsible for ensuring that all of the requirements of this part are implemented.

`(2) SUBMISSION OF INFORMATION- The Secretary of Education may provide the Secretary of the Interior amounts under paragraph (1) for a fiscal year only if the Secretary of the Interior submits to the Secretary of Education information that--

`(A) demonstrates that the Department of the Interior meets the appropriate requirements, as determined by the Secretary of Education, of sections 612 (including monitoring and evaluation activities) and 613;

`(B) includes a description of how the Secretary of the Interior will coordinate the provision of services under this part with local educational agencies, tribes and tribal organizations, and other private and Federal service providers;

`(C) includes an assurance that there are public hearings, adequate notice of such hearings, and an opportunity for comment afforded to members of tribes, tribal governing bodies, and affected local school boards before the adoption of the policies, programs, and procedures described in subparagraph (A);

`(D) includes an assurance that the Secretary of the Interior will provide such information as the Secretary of Education may require to comply with section 618;

`(E) includes an assurance that the Secretary of the Interior and the Secretary of Health and Human Services have entered into a memorandum of agreement, to be provided to the Secretary of Education, for the coordination of services, resources, and personnel between their respective Federal, State, and local offices and with State and local educational agencies and other entities to facilitate the provision of services to Indian children with disabilities residing on or near reservations (such agreement shall provide for the apportionment of responsibilities and costs including, but not limited to, child find, evaluation, diagnosis, remediation or therapeutic measures, and (where appropriate) equipment and medical or personal supplies as needed for a child to remain in school or a program); and

`(F) includes an assurance that the Department of the Interior will cooperate with the Department of Education in its exercise of monitoring, enforcement, and oversight of this application, and any agreements entered into between the Secretary of the Interior and other entities under this part, and will fulfill its duties under this part.

(C) ADDITIONAL REQUIREMENT- With respect to all other children aged 3 to 21, inclusive, on reservations, the State educational agency shall be responsible for ensuring that all of the requirements of this part are implemented.

(B) includes a description of how the Secretary of the Interior will coordinate the provision of services under this part with local educational agencies, tribes and tribal organizations, and other private and Federal service providers;

(E) includes an assurance that the Secretary of the Interior and the Secretary of Health and Human Services have entered into a memorandum of agreement, to be provided to the Secretary of Education, for the coordination of services, resources, and personnel between their respective Federal, State, and local offices and with State and local educational agencies and other entities to facilitate the provision of services to Indian children with disabilities residing on or near reservations (such agreement shall provide for the apportionment of responsibilities and costs including, but not limited to, child find, evaluation, diagnosis, remediation or therapeutic measures, and (where appropriate) equipment and medical or personal supplies as needed for a child to remain in school or a program); and

``(3) Payments for education and services for indian children with disabilities aged 3 through 5._

`(3) PAYMENTS FOR EDUCATION AND SERVICES FOR INDIAN CHILDREN WITH DISABILITIES AGED 3 THROUGH 5-

(3) PAYMENTS FOR EDUCATION AND SERVICES FOR INDIAN CHILDREN WITH DISABILITIES AGED 3 THROUGH 5-

``(B) Distribution of funds._The Secretary of the Interior shall distribute the total amount of the payment under subparagraph (A) by allocating to each tribe or tribal organization an amount based on the number of children with disabilities ages 3 through 5 residing on reservations as reported annually, divided by the total of those children served by all tribes or tribal organizations.

``(C) Submission of information._To receive a payment under this paragraph, the tribe or tribal organization shall submit such figures to the Secretary of the Interior as required to determine the amounts to be allocated under subparagraph (B). This information shall be compiled and submitted to the Secretary of Education.

`(B) DISTRIBUTION OF FUNDS- The Secretary of the Interior shall distribute the total amount of the payment under subparagraph (A) by allocating to each tribe or tribal organization an amount based on the number of children with disabilities ages 3 through 5 residing on reservations as reported annually, divided by the total of those children served by all tribes or tribal organizations.

`(C) SUBMISSION OF INFORMATION- To receive a payment under this paragraph, the tribe or tribal organization shall submit such figures to the Secretary of the Interior as required to determine the amounts to be allocated under subparagraph (B). This information shall be compiled and submitted to the Secretary of Education.

(D) USE OF FUNDS- The funds received by a tribe or tribal organization shall be used to assist in child find, screening, and other procedures for the early identification of children aged 3 through 5, parent training, and the provision of direct services. These activities may be carried out directly or through contracts or cooperative agreements with the BIA, local educational agencies, and other public or private nonprofit organizations. The tribe or tribal organization is encouraged to involve Indian parents in the development and implementation of these activities. The above entities shall, as appropriate, make referrals to local, State, or Federal entities for the provision of services or further diagnosis.

``(E) Biennial report._To be eligible to receive a grant pursuant to subparagraph (A), the tribe or tribal organization shall provide to the Secretary of the Interior a biennial report of activities undertaken under this paragraph, including the number of contracts and cooperative agreements entered into, the number of children contacted and receiving services for each year, and the estimated number of children needing services during the 2 years following the year in which the report is made. The Secretary of the Interior shall include a summary of this information on a biennial basis in the report to the Secretary of Education required under this subsection. The Secretary of Education may require any additional information from the Secretary of the Interior.

``(F) Prohibitions._None of the funds allocated under this paragraph may be used by the Secretary of the Interior for administrative purposes, including child count and the provision of technical assistance.

``(4) Plan for coordination of services._The Secretary of the Interior shall develop and implement a plan for the coordination of services for all Indian children with disabilities residing on reservations covered under this Act. Such plan shall provide for the coordination of services benefiting these children from whatever source, including tribes, the Indian Health Service, other BIA divisions, and other Federal agencies. In developing the plan, the Secretary of the Interior shall consult with all interested and involved parties. The plan shall be based on the needs of the children and the system best suited for meeting those needs, and may involve the establishment of cooperative agreements between the BIA, other Federal agencies, and other entities. The plan shall also be distributed upon request to States, State and local educational agencies, and other agencies providing services to infants, toddlers, and children with disabilities, to tribes, and to other interested parties.

``(5) Establishment of advisory board._To meet the requirements of section 612(a)(20), the Secretary of the Interior shall establish, under the BIA, an advisory board composed of individuals involved in or concerned with the education and provision of services to Indian infants, toddlers, children, and youth with disabilities, including Indians with disabilities, Indian parents or guardians of such children, teachers, service providers, State and local educational officials, representatives of tribes or tribal organizations, representatives from State Interagency Coordinating Councils under section 641 in States having reservations, and other members representing the various divisions and entities of the BIA. The chairperson shall be selected by the Secretary of the Interior. The advisory board shall_

``(A) assist in the coordination of services within the BIA and with other local, State, and Federal agencies in the provision of education for infants, toddlers, and children with disabilities;

``(B) advise and assist the Secretary of the Interior in the performance of the Secretary's responsibilities described in this subsection;

``(C) develop and recommend policies concerning effective inter- and intra-agency collaboration, including modifications to regulations, and the elimination of barriers to inter- and intra-agency programs and activities;

``(D) provide assistance and disseminate information on best practices, effective program coordination strategies, and recommendations for improved educational programming for Indian infants, toddlers, and children with disabilities; and

`(E) ANNUAL REPORT- To be eligible to receive a grant pursuant to subparagraph (A), the tribe or tribal organization shall provide to the Secretary of the Interior an annual report of activities undertaken under this paragraph, including the number of contracts and cooperative agreements entered into, the number of children contacted and receiving services for each year, and the estimated number of children needing services during the year following the one in which the report is made. The Secretary of the Interior shall include a summary of this information on an annual basis in the report to the Secretary of Education required under this subsection. The Secretary of Education may require any additional information from the Secretary of the Interior.

`(F) PROHIBITIONS- None of the funds allocated under this paragraph may be used by the Secretary of the Interior for administrative purposes, including child count and the provision of technical assistance.

`(4) PLAN FOR COORDINATION OF SERVICES- The Secretary of the Interior shall develop and implement a plan for the coordination of services for all Indian children with disabilities residing on reservations covered under this Act. Such plan shall provide for the coordination of services benefiting these children from whatever source, including tribes, the Indian Health Service, other BIA divisions, and other Federal agencies. In developing the plan, the Secretary of the Interior shall consult with all interested and involved parties. It shall be based on the needs of the children and the system best suited for meeting those needs, and may involve the establishment of cooperative agreements between the BIA, other Federal agencies, and other entities. The plan shall also be distributed upon request to States, State and local educational agencies, and other agencies providing services to infants, toddlers, and children with disabilities, to tribes, and to other interested parties.

`(5) ESTABLISHMENT OF ADVISORY BOARD- To meet the requirements of section 612(a)(22), the Secretary of the Interior shall establish, under the BIA, an advisory board composed of individuals involved in or concerned with the education and provision of services to Indian infants, toddlers, children, and youth with disabilities, including Indians with disabilities, Indian parents or guardians of such children, teachers, service providers, State and local educational officials, representatives of tribes or tribal organizations, representatives from State Interagency Coordinating Councils under section 641 in States having reservations, and other members representing the various divisions and entities of the BIA. The chairperson shall be selected by the Secretary of the Interior. The advisory board shall--

`(A) assist in the coordination of services within the BIA and with other local, State, and Federal agencies in the provision of education for infants, toddlers, and children with disabilities;

`(B) advise and assist the Secretary of the Interior in the performance of the Secretary's responsibilities described in this subsection;

`(C) develop and recommend policies concerning effective inter- and intra-agency collaboration, including modifications to regulations, and the elimination of barriers to inter- and intra-agency programs and activities;

`(D) provide assistance and disseminate information on best practices, effective program coordination strategies, and recommendations for improved educational programming for Indian infants, toddlers, and children with disabilities; and

`(E) provide assistance in the preparation of information required under paragraph (2)(D).

(F) PROHIBITIONS- None of the funds allocated under this paragraph may be used by the Secretary of the Interior for administrative purposes, including child count and the provision of technical assistance.

(4) PLAN FOR COORDINATION OF SERVICES- The Secretary of the Interior shall develop and implement a plan for the coordination of services for all Indian children with disabilities residing on reservations covered under this Act. Such plan shall provide for the coordination of services benefiting these children from whatever source, including tribes, the Indian Health Service, other BIA divisions, and other Federal agencies. In developing the plan, the Secretary of the Interior shall consult with all interested and involved parties. It shall be based on the needs of the children and the system best suited for meeting those needs, and may involve the establishment of cooperative agreements between the BIA, other Federal agencies, and other entities. The plan shall also be distributed upon request to States, State and local educational agencies, and other agencies providing services to infants, toddlers, and children with disabilities, to tribes, and to other interested parties.

(A) assist in the coordination of services within the BIA and with other local, State, and Federal agencies in the provision of education for infants, toddlers, and children with disabilities;

(B) advise and assist the Secretary of the Interior in the performance of the Secretary's responsibilities described in this subsection;

(C) develop and recommend policies concerning effective inter- and intra-agency collaboration, including modifications to regulations, and the elimination of barriers to inter- and intra-agency programs and activities;

(D) provide assistance and disseminate information on best practices, effective program coordination strategies, and recommendations for improved educational programming for Indian infants, toddlers, and children with disabilities; and

``(6) Annual reports._

``(A) In general._The advisory board established under paragraph (5) shall prepare and submit to the Secretary of the Interior and to Congress an annual report containing a description of the activities of the advisory board for the preceding year.

``(B) Availability._The Secretary of the Interior shall make available to the Secretary of Education the report described in subparagraph (A).

``(i) Authorization of Appropriations._For the purpose of carrying out this part, other than section 619, there are authorized to be appropriated such sums as may be necessary.

`(6) ANNUAL REPORTS-

`(A) IN GENERAL- The advisory board established under paragraph (5) shall prepare and submit to the Secretary of the Interior and to the Congress an annual report containing a description of the activities of the advisory board for the preceding year.

`(B) AVAILABILITY- The Secretary of the Interior shall make available to the Secretary of Education the report described in subparagraph (A).

`(i) AUTHORIZATION OF APPROPRIATIONS- For the purpose of carrying out this part, other than section 619, there are authorized to be appropriated--

`(1) $11,074,398,000 for fiscal year 2004;

`(2) $13,574,398,000 for fiscal year 2005;

`(3) $15,746,302,000 for fiscal year 2006;

`(4) $17,918,205,000 for fiscal year 2007;

`(5) $20,090,109,000 for fiscal year 2008;

`(6) $22,262,307,000 for fiscal year 2009;

`(7) $25,198,603,000 for fiscal year 2010; and

`(8) such sums as may be necessary for fiscal year 2011 and each subsequent fiscal year.'.

(6) ANNUAL REPORTS-