(b) State equalization plans
(1) In general
A State may reduce State aid to a local educational agency that receives a payment under section 7702 or 7703(b) of this title (except the amount calculated in excess of 1.0 under section 7703(a)(2)(B) of this title and, with respect to a local educational agency that receives a payment under section 7703(b)(2) of this title, the amount in excess of the amount that the agency would receive if the agency were deemed to be an agency eligible to receive a payment under section 7703(b)(1) of this title and not section 7703(b)(2) of this title) for any fiscal year if the Secretary determines, and certifies under subsection (c)(3)(A), that the State has in effect a program of State aid that equalizes expenditures for free public education among local educational agencies in the State.
(2) Computation
(A) In general
For purposes of paragraph (1), a program of State aid equalizes expenditures among local educational agencies if, in the second fiscal year preceding the fiscal year for which the determination is made, the amount of per-pupil expenditures made by, or per-pupil revenues available to, the local educational agency in the State with the highest such per-pupil expenditures or revenues did not exceed the amount of such per-pupil expenditures made by, or per-pupil revenues available to, the local educational agency in the State with the lowest such expenditures or revenues by more than 25 percent.
(B) Other factors
In making a determination under this subsection, the Secretary shall—
(i) disregard local educational agencies with per-pupil expenditures or revenues above the 95th percentile or below the 5th percentile of such expenditures or revenues in the State; and
(ii) take into account the extent to which a program of State aid reflects the additional cost of providing free public education in particular types of local educational agencies, such as those that are geographically isolated, or to particular types of students, such as children with disabilities.
(3) Exception
Notwithstanding paragraph (2), if the Secretary determines that the State has substantially revised its program of State aid, the Secretary may certify such program for any fiscal year only if—
(A) the Secretary determines, on the basis of projected data, that the State’s program will meet the disparity standard described in paragraph (2) for the fiscal year for which the determination is made; and
(B) the State provides an assurance to the Secretary that, if final data do not demonstrate that the State’s program met such standard for the fiscal year for which the determination is made, the State will pay to each affected local educational agency the amount by which the State reduced State aid to the local educational agency.
(c) Procedures for review of State equalization plans
(1) Written notice
(A) In general
Any State that wishes to consider payments described in subsection (b)(1) in providing State aid to local educational agencies shall submit to the Secretary, not later than 120 days before the beginning of the State’s fiscal year, a written notice of such State’s intention to do so.
(B) Contents
Such notice shall be in the form that the Secretary requires, including evidence that the State has notified each local educational agency in the State of such State’s intention to consider such payments in providing State aid.
(2) Opportunity to present views
Before making a determination under subsection (b), the Secretary shall afford the State, and local educational agencies in the State, an opportunity to present their views.
(3) Qualification procedures
If the Secretary determines that a program of State aid qualifies under subsection (b), the Secretary shall—
(A) certify the program and so notify the State; and
(B) afford an opportunity for a hearing, in accordance with
section 7711(a) of this title, to any local educational agency adversely affected by such certification.
(4) Nonqualification procedures
If the Secretary determines that a program of State aid does not qualify under subsection (b), the Secretary shall—
(A) so notify the State; and
(B) afford an opportunity for a hearing, in accordance with
section 7711(a) of this title, to the State, and to any local educational agency adversely affected by such determination.
Amendments
2015—Subsec. (b)(1). Pub. L. 114–95, § 7009(2), made technical amendments to references in original act which appear in text as references to sections 7703(b) and 7703(a)(2)(B) of this title.
Pub. L. 114–95, § 7001(d)(8), made technical amendment to references in original act which appear in two places in text as references to section 7703(b)(2) of this title.
Pub. L. 114–95, § 7001(d)(7), made technical amendment to reference in original act which appears in text as reference to section 7703(b)(1) of this title.
Pub. L. 114–95, § 7001(d)(1), made technical amendment to reference in original act which appears in text as reference to section 7702 of this title.
Subsec. (c)(1)(B). Pub. L. 114–95, § 7009(3), substituted “that the Secretary requires” for “and contain the information the Secretary requires”.
Subsec. (c)(3)(B), (4)(B). Pub. L. 114–95, § 7009(1), made technical amendment to reference in original act which appears in text as reference to section 7711(a) of this title.
2002—Subsec. (b)(1). Pub. L. 107–110 inserted “and, with respect to a local educational agency that receives a payment under section 7703(b)(2) of this title, the amount in excess of the amount that the agency would receive if the agency were deemed to be an agency eligible to receive a payment under section 7703(b)(1) of this title and not section 7703(b)(2) of this title” after “section 7703(a)(2)(B) of this title”.
2000—Subsec. (a)(1). Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812(1)], struck out “or under the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such Act was in effect on the day preceding October 20, 1994)” after “under this subchapter” in introductory provisions.
Subsec. (b)(1). Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812(2)], amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “A State may reduce State aid to a local educational agency that receives a payment under section 7702 or 7703(b) of this title (except the amount calculated in excess of 1.0 under subparagraph (B) of section 7703(a)(2) of this title) or under the Act of September 30, 1950 (Public Law 874, 81st Congress) as such Act was in effect on the day preceding October 20, 1994 (other than an increase in payments described in paragraphs (2)(B), (2)(C), (2)(D), or (3)(B)(ii) of section 3(d) of such Act of September 30, 1950) for any fiscal year if the Secretary determines, and certifies under subsection (c)(3)(A) of this section, that such State has in effect a program of State aid that equalizes expenditures for free public education among local educational agencies in such State.”
Subsec. (d). Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812(3)], struck out “or under the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such Act was in effect on the day preceding October 20, 1994)” after “under this subchapter” wherever appearing.
1996—Subsec. (b)(2)(A). Pub. L. 104–195 substituted “more than 25 percent” for “more than—
“(i) 25 percent for fiscal year 1995, 1996, or 1997; and
“(ii) 20 percent for fiscal year 1998 or 1999”.
Effective Date of 2015 Amendment
Amendment by Pub. L. 114–95 effective Dec. 10, 2015, and effective with respect to appropriations for use under this subchapter beginning fiscal year 2017, except as otherwise provided in such amendment, see section 5 of Pub. L. 114–95, set out as a note under section 6301 of this title.
Effective Date of 2002 Amendment
Amendment by Pub. L. 107–110 effective Jan. 8, 2002, and effective with respect to appropriations for use under this subchapter for fiscal year 2002, see section 5 of Pub. L. 107–110, set out as an Effective Date note under section 6301 of this title.