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Full text of Public Law 105-17, Individuals with Disabilities Education Act Amendments of 1997

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Part B  |   Section 619 of Part B  |   Part C  |   Part D


[DOCID: f:publ17.105]
[[Page 111 STAT. 37]]
Public Law 105-17
105th Congress

                                An Act
To amend the Individuals with Disabilities Education Act, to reauthorize 
and make improvements to that Act, and for other purposes. <<NOTE: June 
4, 1997 -  [H.R. 5]>> 


    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Individuals with 
Disabilities Education Act Amendments of 1997. Children, youth and 
families. Inter- governmental relations.>>  assembled,

SECTION 1. SHORT <<NOTE: 20 USC 1400 note.>>  TITLE.

This Act may be cited as the ``Individuals with Disabilities 
Education Act Amendments of 1997''.

TITLE I--AMENDMENTS TO THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT
SEC. 101. AMENDMENTS TO THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT.
Parts A through D of the Individuals with Disabilities Education Act

 (20 U.S.C. 1400 et seq.) are amended to read as follows:


  ``PART A--GENERAL PROVISIONS
``SEC. 601. SHORT <<NOTE: 20 USC 1400.>>  TITLE; TABLE OF CONTENTS; 
  FINDINGS; PURPOSES.
    ``(a) Short Title.--This Act may be cited as the `Individuals with 
Disabilities Education Act'.
    ``(b) Table of Contents.--The table of contents for this Act is as 
follows:
  ``Part A--General Provisions
``Sec. 601. Short title; table of contents; findings; purposes.
``Sec. 602. Definitions.
``Sec. 603. Office of Special Education Programs.
``Sec. 604. Abrogation of State sovereign immunity.
``Sec. 605. Acquisition of equipment; construction or alteration of 
 facilities.
``Sec. 606. Employment of individuals with disabilities.
``Sec. 607. Requirements for prescribing regulations.
``Part B--Assistance for Education of All Children with Disabilities
``Sec. 611. Authorization; allotment; use of funds; authorization of 
 appropriations.
``Sec. 612. State eligibility.
``Sec. 613. Local educational agency eligibility.
``Sec. 614. Evaluations, eligibility determinations, individualized 
 education programs, and educational placements.
``Sec. 615. Procedural safeguards.
``Sec. 616. Withholding and judicial review.
``Sec. 617. Administration.
[[Page 111 STAT. 38]]
``Sec. 618. Program information.

``Part C--Infants and Toddlers with Disabilities
``Sec. 631. Findings and policy.
``Sec. 632. Definitions.
``Sec. 633. General authority.
``Sec. 634. Eligibility.
``Sec. 635. Requirements for statewide system.
``Sec. 636. Individualized family service plan.
``Sec. 637. State application and assurances.
``Sec. 638. Uses of funds.
``Sec. 639. Procedural safeguards.
``Sec. 640. Payor of last resort.
``Sec. 641. State Interagency Coordinating Council.
``Sec. 642. Federal administration.
``Sec. 643. Allocation of funds.
``Sec. 644. Federal Interagency Coordinating Council.
``Sec. 645. Authorization of appropriations.
  ``Part D--National Activities to Improve Education of Children with Disabilities
    ``subpart 1--state program improvement grants for children with 
disabilities
``Sec. 651. Findings and purpose.
``Sec. 652. Eligibility and collaborative process.
``Sec. 653. Applications.
``Sec. 654. Use of funds.
``Sec. 655. Minimum State grant amounts.
``Sec. 656. Authorization of appropriations.
  ``subpart 2--coordinated research, personnel preparation, technical 
assistance, support, and dissemination of information
``Sec. 661. Administrative provisions.
``chapter 1--improving early intervention, educational, and transitional 
services and results for children with disabilities through coordinated 
research and personnel preparation
``Sec. 671. Findings and purpose.
``Sec. 672. Research and innovation to improve services and results for 
children with disabilities.
``Sec. 673. Personnel preparation to improve services and results for 
children with disabilities.
``Sec. 674. Studies and evaluations.
``chapter 2--improving early intervention, educational, and transitional 
services and results for children with disabilities through coordinated 
     technical assistance, support, and dissemination of information
``Sec. 681. Findings and purposes.
``Sec. 682. Parent training and information centers.
``Sec. 683. Community parent resource centers.
``Sec. 684. Technical assistance for parent training and information 
 centers.
``Sec. 685. Coordinated technical assistance and dissemination.
``Sec. 686. Authorization of appropriations.
``Sec. 687. Technology development, demonstration, and utilization, and 
 media services.
    ``(c) Findings.--The Congress finds the following:
  ``(1) Disability is a natural part of the human experience 
  and in no way diminishes the right of individuals to participate 
  in or contribute to society. Improving educational results for 
  children with disabilities is an essential element of our 
  national policy of ensuring equality of opportunity, full 
  participation, independent living, and economic self-sufficiency 
  for individuals with disabilities.
  ``(2) Before the date of the enactment of the Education for 
  All Handicapped Children Act of 1975 (Public Law 94-142)--
[[Page 111 STAT. 39]]
``(A) the special educational needs of children with 
disabilities were not being fully met;
``(B) more than one-half of the children with 
disabilities in the United States did not receive 
appropriate educational services that would enable such 
children to have full equality of opportunity;
``(C) 1,000,000 of the children with disabilities in 
the United States were excluded entirely from the public 
school system and did not go through the educational 
process with their peers;
``(D) there were many children with disabilities 
throughout the United States participating in regular 
school programs whose disabilities prevented such 
children from having a successful educational experience 
because their disabilities were undetected; and
``(E) because of the lack of adequate services 
within the public school system, families were often 
forced to find services outside the public school 
system, often at great distance from their residence and 
at their own expense.
  ``(3) Since the enactment and implementation of the 
  Education for All Handicapped Children Act of 1975, this Act has 
  been successful in ensuring children with disabilities and the 
  families of such children access to a free appropriate public 
  education and in improving educational results for children with 
  disabilities.
  ``(4) However, the implementation of this Act has been 
  impeded by low expectations, and an insufficient focus on 
  applying replicable research on proven methods of teaching and 
  learning for children with disabilities.
  ``(5) Over 20 years of research and experience has 
  demonstrated that the education of children with disabilities 
  can be made more effective by--
``(A) having high expectations for such children and 
ensuring their access in the general curriculum to the 
maximum extent possible;
``(B) strengthening the role of parents and ensuring 
that families of such children have meaningful 
opportunities to participate in the education of their 
children at school and at home;
``(C) coordinating this Act with other local, 
educational service agency, State, and Federal school 
improvement efforts in order to ensure that such 
children benefit from such efforts and that special 
education can become a service for such children rather 
than a place where they are sent;
``(D) providing appropriate special education and 
related services and aids and supports in the regular 
classroom to such children, whenever appropriate;
``(E) supporting high-quality, intensive 
professional development for all personnel who work with 
such children in order to ensure that they have the 
skills and knowledge necessary to enable them--
``(i) to meet developmental goals and, to the 
  maximum extent possible, those challenging 
  expectations that have been established for all 
  children; and
``(ii) to be prepared to lead productive, 
  independent, adult lives, to the maximum extent 
  possible;
[[Page 111 STAT. 40]]
``(F) providing incentives for whole-school 
approaches and pre-referral intervention to reduce the 
need to label children as disabled in order to address 
their learning needs; and
``(G) focusing resources on teaching and learning 
while reducing paperwork and requirements that do not 
assist in improving educational results.
  ``(6) While States, local educational agencies, and 
  educational service agencies are responsible for providing an 
  education for all children with disabilities, it is in the 
  national interest that the Federal Government have a role in 
  assisting State and local efforts to educate children with 
  disabilities in order to improve results for such children and 
  to ensure equal protection of the law.
  ``(7)(A) The Federal Government must be responsive to the 
  growing needs of an increasingly more diverse society. A more 
  equitable allocation of resources is essential for the Federal 
  Government to meet its responsibility to provide an equal 
  educational opportunity for all individuals.
  ``(B) America's racial profile is rapidly changing. Between 
  1980 and 1990, the rate of increase in the population for white 
  Americans was 6 percent, while the rate of increase for racial 
  and ethnic minorities was much higher: 53 percent for Hispanics, 
  13.2 percent for African-Americans, and 107.8 percent for 
  Asians.
  ``(C) By the year 2000, this Nation will have 275,000,000 
  people, nearly one of every three of whom will be either 
  African-American, Hispanic, Asian-American, or American Indian.
  ``(D) Taken together as a group, minority children are 
  comprising an ever larger percentage of public school students. 
  Large-city school populations are overwhelmingly minority, for 
  example: for fall 1993, the figure for Miami was 84 percent; 
  Chicago, 89 percent; Philadelphia, 78 percent; Baltimore, 84 
  percent; Houston, 88 percent; and Los Angeles, 88 percent.
  ``(E) Recruitment efforts within special education must 
  focus on bringing larger numbers of minorities into the 
  profession in order to provide appropriate practitioner 
  knowledge, role models, and sufficient manpower to address the 
  clearly changing demography of special education.
  ``(F) The limited English proficient population is the 
  fastest growing in our Nation, and the growth is occurring in 
  many parts of our Nation. In the Nation's 2 largest school 
  districts, limited English proficient students make up almost 
  half of all students initially entering school at the 
  kindergarten level. Studies have documented apparent 
  discrepancies in the levels of referral and placement of limited 
  English proficient children in special education. The Department 
  of Education has found that services provided to limited English 
  proficient students often do not respond primarily to the 
  pupil's academic needs. These trends pose special challenges for 
  special education in the referral, assessment, and services for 
  our Nation's students from non-English language backgrounds.
  ``(8)(A) Greater efforts are needed to prevent the 
  intensification of problems connected with mislabeling and high 
  dropout rates among minority children with disabilities.
[[Page 111 STAT. 41]]
  ``(B) More minority children continue to be served in 
  special education than would be expected from the percentage of 
  minority students in the general school population.
  ``(C) Poor African-American children are 2.3 times more 
  likely to be identified by their teacher as having mental 
  retardation than their white counterpart.
  ``(D) Although African-Americans represent 16 percent of 
  elementary and secondary enrollments, they constitute 21 percent 
  of total enrollments in special education.
  ``(E) The drop-out rate is 68 percent higher for minorities 
  than for whites.
  ``(F) More than 50 percent of minority students in large 
  cities drop out of school.
  ``(9)(A) The opportunity for full participation in awards 
  for grants and contracts; boards of organizations receiving 
  funds under this Act; and peer review panels; and training of 
  professionals in the area of special education by minority 
  individuals, organizations, and historically black colleges and 
  universities is essential if we are to obtain greater success in 
  the education of minority children with disabilities.
  ``(B) In 1993, of the 915,000 college and university 
  professors, 4.9 percent were African-American and 2.4 percent 
  were Hispanic. Of the 2,940,000 teachers, prekindergarten 
  through high school, 6.8 percent were African-American and 4.1 
  percent were Hispanic.
  ``(C) Students from minority groups comprise more than 50 
  percent of K-12 public school enrollment in seven States yet 
  minority enrollment in teacher training programs is less than 15 
  percent in all but six States.
  ``(D) As the number of African-American and Hispanic 
  students in special education increases, the number of minority 
  teachers and related service personnel produced in our colleges 
  and universities continues to decrease.
  ``(E) Ten years ago, 12 percent of the United States 
  teaching force in public elementary and secondary schools were 
  members of a minority group. Minorities comprised 21 percent of 
  the national population at that time and were clearly 
  underrepresented then among employed teachers. Today, the 
  elementary and secondary teaching force is 13 percent minority, 
  while one-third of the students in public schools are minority 
  children.
  ``(F) As recently as 1991, historically black colleges and 
  universities enrolled 44 percent of the African-American teacher 
  trainees in the Nation. However, in 1993, historically black 
  colleges and universities received only 4 percent of the 
  discretionary funds for special education and related services 
  personnel training under this Act.
  ``(G) While African-American students constitute 28 percent 
  of total enrollment in special education, only 11.2 percent of 
  individuals enrolled in preservice training programs for special 
  education are African-American.
  ``(H) In 1986-87, of the degrees conferred in education at 
  the B.A., M.A., and Ph.D. levels, only 6, 8, and 8 percent, 
  respectively, were awarded to African-American or Hispanic 
  students.
  ``(10) Minorities and underserved persons are socially 
  disadvantaged because of the lack of opportunities in training 
  and educational programs, undergirded by the practices in the
[[Page 111 STAT. 42]]
  private sector that impede their full participation in the 
  mainstream of society.
    ``(d) Purposes.--The purposes of this title are--
  ``(1)(A) to ensure that all children with disabilities have 
  available to them a free appropriate public education that 
  emphasizes special education and related services designed to 
  meet their unique needs and prepare them for employment and 
  independent living;
  ``(B) to ensure that the rights of children with 
  disabilities and parents of such children are protected; and
  ``(C) to assist States, localities, educational service 
  agencies, and Federal agencies to provide for the education of 
  all children with disabilities;
  ``(2) to assist States in the implementation of a statewide, 
  comprehensive, coordinated, multidisciplinary, interagency 
  system of early intervention services for infants and toddlers 
  with disabilities and their families;
  ``(3) to ensure that educators and parents have the 
  necessary tools to improve educational results for children with 
  disabilities by supporting systemic-change activities; 
  coordinated research and personnel preparation; coordinated 
  technical assistance, dissemination, and support; and technology 
  development and media services; and
  ``(4) to assess, and ensure the effectiveness of, efforts to 
  educate children with disabilities.
``SEC. 602. <<NOTE: 20 USC 1401.>>  DEFINITIONS.
    ``Except as otherwise provided, as used in this Act:
  ``(1) Assistive technology device.--The term `assistive 
  technology device' means any item, piece of equipment, or 
  product system, whether acquired commercially off the shelf, 
  modified, or customized, that is used to increase, maintain, or 
  improve functional capabilities of a child with a disability.
  ``(2) Assistive technology service.--The term `assistive 
  technology service' means any service that directly assists a 
  child with a disability in the selection, acquisition, or use of 
  an assistive technology device. Such term includes--
``(A) the evaluation of the needs of such child, 
including a functional evaluation of the child in the 
child's customary environment;
``(B) purchasing, leasing, or otherwise providing 
for the acquisition of assistive technology devices by 
such child;
``(C) selecting, designing, fitting, customizing, 
adapting, applying, maintaining, repairing, or replacing 
of assistive technology devices;
``(D) coordinating and using other therapies, 
interventions, or services with assistive technology 
devices, such as those associated with existing 
education and rehabilitation plans and programs;
``(E) training or technical assistance for such 
child, or, where appropriate, the family of such child; 
and
``(F) training or technical assistance for 
professionals (including individuals providing education 
and rehabilitation services), employers, or other 
individuals who provide services to, employ, or are 
otherwise substantially involved in the major life 
functions of such child.
  ``(3) Child with a disability.-
[[Page 111 STAT. 43]]

``(A) In general.--The term `child with a disability 
' means a child--
``(i) with mental retardation, hearing 
  impairments (including deafness), speech or 
  language impairments, visual impairments 
  (including blindness), serious emotional 
  disturbance (hereinafter referred to as `emotional 
  disturbance'), orthopedic impairments, autism, 
  traumatic brain injury, other health impairments, 
  or specific learning disabilities; and
``(ii) who, by reason thereof, needs special 
  education and related services.
``(B) Child aged 3 through 9.--The term `child with 
a disability ' for a child aged 3 through 9 may, at the 
discretion of the State and the local educational 
agency, include a child--
``(i) experiencing developmental delays, as 
  defined by the State and as measured by 
  appropriate diagnostic instruments and procedures, 
  in one or more of the following areas: physical 
  development, cognitive development, communication 
  development, social or emotional development, or 
  adaptive development; and
``(ii) who, by reason thereof, needs special 
  education and related services.
  ``(4) Educational service agency.--The term `educational 
  service agency'--
``(A) means a regional public multiservice agency--
``(i) authorized by State law to develop, 
  manage, and provide services or programs to local 
  educational agencies; and
``(ii) recognized as an administrative agency 
  for purposes of the provision of special education 
  and related services provided within public 
  elementary and secondary schools of the State; and
``(B) includes any other public institution or 
agency having administrative control and direction over 
a public elementary or secondary school.
  ``(5) Elementary school.--The term `elementary school' means 
  a nonprofit institutional day or residential school that 
  provides elementary education, as determined under State law.
  ``(6) Equipment.--The term `equipment' includes--
``(A) machinery, utilities, and built-in equipment 

and any necessary enclosures or structures to house such 
machinery, utilities, or equipment; and
``(B) all other items necessary for the functioning 
of a particular facility as a facility for the provision 
of educational services, including items such as 
instructional equipment and necessary furniture; 
printed, published, and audio-visual instructional 
materials; telecommunications, sensory, and other 
technological aids and devices; and books, periodicals, 
documents, and other related materials.
  ``(7) Excess costs.--The term `excess costs' means those 
  costs that are in excess of the average annual per-student 
  expenditure in a local educational agency during the preceding 
  school year for an elementary or secondary school student, as 
  may be appropriate, and which shall be computed after 
  deducting--
``(A) amounts received--

[[Page 111 STAT. 44]]

``(i) under part B of this title;
``(ii) under part A of title I of the 
  Elementary and Secondary Education Act of 1965; or
``(iii) under part A of title VII of that Act; 
  and
``(B) any State or local funds expended for programs 
that would qualify for assistance under any of those 
parts.
  ``(8) Free appropriate public education.--The term `free 
  appropriate public education' means special education and 
  related services that--
``(A) have been provided at public expense, under 
public supervision and direction, and without charge;
``(B) meet the standards of the State educational 
agency;
``(C) include an appropriate preschool, elementary, 
or secondary school education in the State involved; and
``(D) are provided in conformity with the 
individualized education program required under section 
614(d).
  ``(9) Indian.--The term `Indian' means an individual who is 
  a member of an Indian tribe.
  ``(10) Indian tribe.--The term `Indian tribe' means any 
  Federal or State Indian tribe, band, rancheria, pueblo, colony, 
  or community, including any Alaska Native village or regional 
  village corporation (as defined in or established under the 
  Alaska Native Claims Settlement Act).
  ``(11) Individualized education program.--The term 
  `individualized education program' or `IEP ' means a written 
  statement for each child with a disability that is developed, 
  reviewed, and revised in accordance with section 614(d).
  ``(12) Individualized family service plan.--The term 
  `individualized family service plan' has the meaning given such 
  term in section 636.
  ``(13) Infant or toddler with a disability.--The term 
  `infant or toddler with a disability ' has the meaning given 
  such term in section 632.
  ``(14) Institution of higher education.--The term 
  `institution of higher education'--
``(A) has the meaning given that term in section 
1201(a) of the Higher Education Act of 1965; and
``(B) also includes any community college receiving 
funding from the Secretary of the Interior under the 
Tribally Controlled Community College Assistance Act of 
1978.
  ``(15) Local educational agency.--
``(A) The term `local educational agency' means a 
public board of education or other public authority 
legally constituted within a State for either 
administrative control or direction of, or to perform a 
service function for, public elementary or secondary 
schools in a city, county, township, school district, or 
other political subdivision of a State, or for such 
combination of school districts or counties as are 
recognized in a State as an administrative agency for 
its public elementary or secondary schools.
``(B) The term includes--
``(i) an educational service agency, as 
  defined in paragraph (4); and
``(ii) any other public institution or agency 
  having administrative control and direction of a 
  public elementary or secondary school.

[[Page 111 STAT. 45]]

``(C) The term includes an elementary or secondary 
school funded by the Bureau of Indian Affairs, but only 
to the extent that such inclusion makes the school 
eligible for programs for which specific eligibility is 
not provided to the school in another provision of law 
and the school does not have a student population that 
is smaller than the student population of the local 
educational agency receiving assistance under this Act 
with the smallest student population, except that the 
school shall not be subject to the jurisdiction of any 
State educational agency other than the Bureau of Indian 
Affairs.
  ``(16) Native language.--The term `native language', when 
  used with reference to an individual of limited English 
  proficiency, means the language normally used by the individual, 
  or in the case of a child, the language normally used by the 
  parents of the child.
  ``(17) Nonprofit.--The term `nonprofit', as applied to a 
  school, agency, organization, or institution, means a school, 
  agency, organization, or institution owned and operated by one 
  or more nonprofit corporations or associations no part of the 
  net earnings of which inures, or may lawfully inure, to the 
  benefit of any private shareholder or individual.
  ``(18) Outlying area.--The term `outlying area' means the 
  United States Virgin Islands, Guam, American Samoa, and the 
  Commonwealth of the Northern Mariana Islands.
  ``(19) Parent.--The term `parent'--
``(A) includes a legal guardian; and
``(B) except as used in sections 615(b)(2) and 
639(a)(5), includes an individual assigned under either 
of those sections to be a surrogate parent.
  ``(20) Parent organization.--The term `parent organization' 
  has the meaning given that term in section 682(g).
  ``(21) Parent training and information center.--The term 
  `parent training and information center' means a center assisted 
  under section 682 or 683.
  ``(22) Related services.--The term `related services' means 
  transportation, and such developmental, corrective, and other 
  supportive services (including speech-language pathology and 
  audiology services, psychological services, physical and 
  occupational therapy, recreation, including therapeutic 
  recreation, social work services, counseling services, including 
  rehabilitation counseling, orientation and mobility services, 
  and medical services, except that such medical services shall be 
  for diagnostic and evaluation purposes only) as may be required 
  to assist a child with a disability to benefit from special 
  education, and includes the early identification and assessment 
  of disabling conditions in children.
  ``(23) Secondary school.--The term `secondary school' means 
  a nonprofit institutional day or residential school that 
  provides secondary education, as determined under State law, 
  except that it does not include any education beyond grade 12.
  ``(24) Secretary.--The term `Secretary' means the Secretary 
  of Education.
  ``(25) Special education.--The term `special education' 
  means specially designed instruction, at no cost to parents, to 
  meet the unique needs of a child with a disability, including--

[[Page 111 STAT. 46]]

``(A) instruction conducted in the classroom, in the 
home, in hospitals and institutions, and in other 
settings; and
``(B) instruction in physical education.
  ``(26) Specific learning disability.--
``(A) In general.--The term `specific learning 
disability ' means a disorder in one or more of the 
basic psychological processes involved in understanding 
or in using language, spoken or written, which disorder 
may manifest itself in imperfect ability to listen, 
think, speak, read, write, spell, or do mathematical 
calculations.
``(B) Disorders included.--Such term includes such 
conditions as perceptual disabilities, brain injury, 
minimal brain dysfunction, dyslexia, and developmental 
aphasia.
``(C) Disorders not included.--Such term does not 
include a learning problem that is primarily the result 
of visual, hearing, or motor disabilities, of mental 
retardation, of emotional disturbance, or of 
environmental, cultural, or economic disadvantage.
  ``(27) State.--The term `State' means each of the 50 States, 
  the District of Columbia, the Commonwealth of Puerto Rico, and 
  each of the outlying areas.
  ``(28) State educational agency.--The term `State 
  educational agency' means the State board of education or other 
  agency or officer primarily responsible for the State 
  supervision of public elementary and secondary schools, or, if 
  there is no such officer or agency, an officer or agency 
  designated by the Governor or by State law.
  ``(29) Supplementary aids and services.--The term 
  `supplementary aids and services' means, aids, services, and 
  other supports that are provided in regular education classes or 
  other education-related settings to enable children with 
  disabilities to be educated with nondisabled children to the 
  maximum extent appropriate in accordance with section 612(a)(5).
  ``(30) Transition services.--The term `transition services' 
  means a coordinated set of activities for a student with a 
  disability that--
``(A) is designed within an outcome-oriented 
process, which promotes movement from school to post-
school activities, including post-secondary education, 
vocational training, integrated employment (including 
supported employment), continuing and adult education, 
adult services, independent living, or community 
participation;
``(B) is based upon the individual student's needs, 
taking into account the student's preferences and 
interests; and
``(C) includes instruction, related services, 
community experiences, the development of employment and 
other post-school adult living objectives, and, when 
appropriate, acquisition of daily living skills and 
functional vocational evaluation.

``SEC. 603. OFFICE <<NOTE: 20 USC 1402.>>  OF SPECIAL EDUCATION 
  PROGRAMS.

    ``(a) Establishment.--There shall be, within the Office of Special 
Education and Rehabilitative Services in the Department of Education, an 
Office of Special Education Programs, which shall

[[Page 111 STAT. 47]]

be the principal agency in such Department for administering and 
carrying out this Act and other programs and activities concerning the 
education of children with disabilities.
    ``(b) Director.--The Office established under subsection (a) shall 
be headed by a Director who shall be selected by the Secretary and shall 
report directly to the Assistant Secretary for Special Education and 
Rehabilitative Services.
    ``(c) Voluntary and Uncompensated Services.--Notwithstanding section 
1342 of title 31, United States Code, the Secretary is authorized to 
accept voluntary and uncompensated services in furtherance of the 
purposes of this Act.

``SEC. 604. ABROGATION <<NOTE: 20 USC 1403.>>  OF STATE SOVEREIGN 
  IMMUNITY.

    ``(a) In General.--A State shall not be immune under the eleventh 
amendment to the Constitution of the United States from suit in Federal 
court for a violation of this Act.
    ``(b) Remedies.--In a suit against a State for a violation of this 
Act, remedies (including remedies both at law and in equity) are 
available for such a violation to the same extent as those remedies are 
available for such a violation in the suit against any public entity 
other than a State.
    ``(c) Effective Date.--Subsections (a) and (b) apply with respect to 
violations that occur in whole or part after the date of the enactment 
of the Education of the Handicapped Act Amendments of 1990.

``SEC. 605. ACQUISITION <<NOTE: 20 USC 1404.>>  OF EQUIPMENT; 
  CONSTRUCTION OR ALTERATION OF FACILITIES.

    ``(a) In General.--If the Secretary determines that a program 
authorized under this Act would be improved by permitting program funds 
to be used to acquire appropriate equipment, or to construct new 
facilities or alter existing facilities, the Secretary is authorized to 
allow the use of those funds for those purposes.
    ``(b) Compliance With Certain Regulations.--Any construction of new 
facilities or alteration of existing facilities under subsection (a) 
shall comply with the requirements of--
  ``(1) appendix A of part 36 of title 28, Code of Federal 
  Regulations (commonly known as the `Americans with Disabilities 
  Accessibility Guidelines for Buildings and Facilities'); or
  ``(2) appendix A of part 101-19.6 of title 41, Code of 
  Federal Regulations (commonly known as the `Uniform Federal 
  Accessibility Standards').

``SEC. 606. EMPLOYMENT <<NOTE: 20 USC 1405.>>  OF INDIVIDUALS WITH 
  DISABILITIES.

    ``The Secretary shall ensure that each recipient of assistance under 
this Act makes positive efforts to employ and advance in employment 
qualified individuals with disabilities in programs assisted under this 
Act.

``SEC. 607. REQUIREMENTS <<NOTE: 20 USC 1406.>>  FOR PRESCRIBING 
  REGULATIONS.

    ``(a) Public Comment Period.--The Secretary shall provide a public 
comment period of at least 90 days on any regulation proposed under part 
B or part C of this Act on which an opportunity for public comment is 
otherwise required by law.
    ``(b) Protections Provided to Children.--The Secretary may not 
implement, or publish in final form, any regulation prescribed pursuant 
to this Act that would procedurally or substantively lessen the 
protections provided to children with disabilities under this

[[Page 111 STAT. 48]]

Act, as embodied in regulations in effect on July 20, 1983 (particularly 
as such protections relate to parental consent to initial evaluation or 
initial placement in special education, least restrictive environment, 
related services, timelines, attendance of evaluation personnel at 
individualized education program meetings, or qualifications of 
personnel), except to the extent that such regulation reflects the clear 
and unequivocal intent of the Congress in legislation.
    ``(c) Policy Letters and Statements.--The Secretary may not, through 
policy letters or other statements, establish a rule that is required 
for compliance with, and eligibility under, this part without following 
the requirements of section 553 of title 5, United States Code.
    ``(d) Correspondence From Department of Education Describing 
Interpretations of This Part.--
  ``(1) In general <<NOTE: Federal Register, 
  publication.>> .--The Secretary shall, on a quarterly basis, 
  publish in the Federal Register, and widely disseminate to 
  interested entities through various additional forms of 
  communication, a list of correspondence from the Department of 
  Education received by individuals during the previous quarter 
  that describes the interpretations of the Department of 
  Education of this Act or the regulations implemented pursuant to 
  this Act.
  ``(2) Additional information.--For each item of 
  correspondence published in a list under paragraph (1), the 
  Secretary shall identify the topic addressed by the 
  correspondence and shall include such other summary information 
  as the Secretary determines to be appropriate.

    ``(e) Issues of National Significance.--If the Secretary receives a 
written request regarding a policy, question, or interpretation under 
part B of this Act, and determines that it raises an issue of general 
interest or applicability of national significance to the implementation 
of part B, the Secretary shall--
  ``(1) include a statement to that effect in any written 
  response;
  ``(2) widely disseminate that response to State educational 
  agencies, local educational agencies, parent and advocacy 
  organizations, and other interested organizations, subject to 
  applicable laws relating to confidentiality of information; and
  ``(3) not later than one year after the date on which the 
  Secretary responds to the written request, issue written 
  guidance on such policy, question, or interpretation through 
  such means as the Secretary determines to be appropriate and 
  consistent with law, such as a policy memorandum, notice of 
  interpretation, or notice of proposed rulemaking.

    ``(f ) Explanation.--Any written response by the Secretary under 
subsection (e) regarding a policy, question, or interpretation under 
part B of this Act shall include an explanation that the written 
response--
  ``(1) is provided as informal guidance and is not legally 
  binding; and
  ``(2) represents the interpretation by the Department of 
  Education of the applicable statutory or regulatory requirements 
  in the context of the specific facts presented.

[[Page 111 STAT. 49]]
**
   ``PART B--ASSISTANCE FOR EDUCATION OF ALL CHILDREN WITH DISABILITIES  |  Return to Top of Page

``SEC. 611. AUTHORIZATION; <<NOTE: 20 USC 1411.>>  ALLOTMENT; USE OF 
  FUNDS; AUTHORIZATION OF APPROPRIATIONS.

    ``(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.
  ``(2) Maximum amounts.--The maximum amount of the grant a 
  State may receive under this section for any fiscal year is--
``(A) the number of children with disabilities in 
the State who are receiving special education and 
related services--
``(i) aged 3 through 5 if the State is 
  eligible for a grant under section 619; and
``(ii) aged 6 through 21; multiplied by
``(B) 40 percent of the average per-pupil 
expenditure in public elementary and secondary schools 
in the United States.

    ``(b) Outlying Areas and Freely Associated States.--
  ``(1) Funds reserved.--From the amount appropriated for any 
  fiscal year under subsection (j), the Secretary shall reserve 
  not more than one 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) for fiscal years 1998 through 2001, to carry 
out the competition described in paragraph (2), except 
that the amount reserved to carry out that competition 
shall not exceed the amount reserved for fiscal year 
1996 for the competition under part B of this Act 
described under the heading ``SPECIAL EDUCATION'' in 
Public Law 104-134.
  ``(2) Limitation for freely associated states.--
``(A) Competitive grants.--The Secretary shall use 
funds described in paragraph (1)(B) to award grants, on 
a competitive basis, to Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, and the 
freely associated States to carry out the purposes of 
this part.
``(B) Award basis.--The Secretary shall award grants 
under subparagraph (A) on a competitive basis, pursuant 
to the recommendations of the Pacific Region Educational 
Laboratory in Honolulu, Hawaii. Those recommendations 
shall be made by experts in the field of special 
education and related services.
``(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;

[[Page 111 STAT. 50]]

``(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).
  ``(3) Limitation.--An outlying area is not eligible for a 
  competitive award under paragraph (2) unless it receives 
  assistance under paragraph (1)(A).
  ``(4) Special rule.--The provisions of Public Law 95-134, 
  permitting the consolidation of grants by the outlying areas, 
  shall not apply to funds provided to those areas or to the 
  freely associated States under this section.
  ``(5) Eligibility for discretionary programs.--The freely 
  associated States shall be eligible to receive assistance under 
  subpart 2 of part D of this Act until September 30, 2001.
  ``(6) Definition.--As used in this subsection, the term 
  `freely associated States' means the Republic of the Marshall 
  Islands, the Federated States of Micronesia, and the Republic of 
  Palau.

    ``(c) Secretary of the Interior.--From the amount appropriated for 
any fiscal year under subsection (j), the Secretary shall reserve 1.226 
percent to provide assistance to the Secretary of the Interior in 
accordance with subsection (i).
    ``(d) Allocations to States.--
  ``(1) In general.--After reserving funds for studies and 
  evaluations under section 674(e), and for payments to the 
  outlying areas and the Secretary of the Interior under 
  subsections (b) and (c), the Secretary shall allocate the 
  remaining amount among the States in accordance with paragraph 
  (2) or subsection (e), as the case may be.
  ``(2) Interim formula.--Except as provided in subsection 
  (e), the Secretary shall allocate the amount described in 
  paragraph (1) among the States in accordance with section 
  611(a)(3), (4), and (5) and (b)(1), (2), and (3) of this Act, as 
  in effect prior to the enactment of the Individuals with 
  Disabilities Education Act Amendments of 1997, except that the 
  determination of the number of children with disabilities 
  receiving special education and related services under such 
  section 611(a)(3) may, at the State's discretion, be calculated 
  as of the last

[[Page 111 STAT. 51]]

  Friday in October or as of December 1 of the fiscal year for 
  which the funds are appropriated.

    ``(e) Permanent Formula.--
  ``(1) Establishment of base year.--The Secretary shall 
  allocate the amount described in subsection (d)(1) among the 
  States in accordance with this subsection for each fiscal year 
  beginning with the first fiscal year for which the amount 
  appropriated under subsection (j) is more than $4,924,672,200.
  ``(2) Use of base year.--
``(A) Definition.--As used in this subsection, the 
term `base year' means the fiscal year preceding the 
first fiscal year in which this subsection applies.
``(B) Special rule for use of base year amount.--If 
a State received any funds under this section for the 
base year on the basis of children aged 3 through 5, but 
does not make a free appropriate public education 
available to all children with disabilities aged 3 
through 5 in the State in any subsequent fiscal year, 
the Secretary shall compute the State's base year 
amount, solely for the purpose of calculating the 
State's allocation in that subsequent year under 
paragraph (3) or (4), by subtracting the amount 
allocated to the State for the base year on the basis of 
those children.
  ``(3) Increase in funds.--If the amount available for 
  allocations to States under paragraph (1) is equal to or greater 
  than the amount allocated to the States under this paragraph for 
  the preceding fiscal year, those allocations shall be calculated 
  as follows:
``(A)(i) Except as provided in subparagraph (B), the 
Secretary shall--
``(I) allocate to each State the amount it 
  received for the base year;
``(II) allocate 85 percent of any remaining 
  funds to States on the basis of their relative 
  populations of children aged 3 through 21 who are 
  of the same age as children with disabilities for 
  whom the State ensures the availability of a free 
  appropriate public education under this part; and
``(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.
``(ii) For the purpose of making grants under this 
paragraph, the Secretary shall use the most recent 
population data, including data on children living in 
poverty, that are available and satisfactory to the 
Secretary.
``(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--
    ``(aa) the amount it 
received for the base year; and
    ``(bb) one third of one 
percent of the amount by which 
the amount appropriated

[[Page 111 STAT. 52]]

under subsection (j) exceeds the 
amount appropriated under this 
section for the base year;
``(II) the sum of--
    ``(aa) the amount it 
received for the preceding 
fiscal year; and
    ``(bb) that amount 
multiplied by the percentage by 
which the increase in the funds 
appropriated from the preceding 
fiscal year exceeds 1.5 percent; 
or
``(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.
``(C) If the amount available for allocations under 
this paragraph is insufficient to pay those allocations 
in full, those allocations shall be ratably reduced, 
subject to subparagraph (B)(i).
  ``(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:
``(A) If the amount available for allocations is 
greater than the amount allocated to the States for the 
base year, each State shall be allocated the sum of--
``(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.
``(ii) If the amount available is insufficient to 
make the allocations described in clause (i), those 
allocations shall be ratably reduced.
    ``(f ) State-Level Activities.--
  ``(1) 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) and (3).
``(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--
[[Page 111 STAT. 53]]
``(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
``(ii) the prohibition on supplanting other 
  funds in section 612(a)(18)(C).
  ``(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)--
``(i) each State may use not more than twenty 
  percent of the maximum amount it may retain under 
  paragraph (1)(A) for any fiscal year or $500,000 
  (adjusted by the cumulative rate of inflation 
  since fiscal year 1998, 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), whichever is greater; and
``(ii) each outlying area may use up to five 
  percent of the amount it receives under this 
  section for any fiscal year or $35,000, whichever 
  is greater.
``(B) Funds described in subparagraph (A) may also 
be used for the administration of part C of this Act, if 
the State educational agency is the lead agency for the 
State under that part.
  ``(3) Other state-level activities.--Each State shall use 
  any funds it retains under paragraph (1) and does not use for 
  administration under paragraph (2) 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, but only to the extent that 
those costs exceed the costs incurred for those 
activities during fiscal year 1985.
``(C) To establish and implement the mediation 
process required by section 615(e), including providing 
for the costs of mediators and support personnel.
``(D) To assist local educational agencies in 
meeting personnel shortages.
``(E) To develop a State Improvement Plan under 
subpart 1 of part D.
``(F) Activities at the State and local levels to 
meet the performance goals established by the State 
under section 612(a)(16) and to support implementation 
of the State Improvement Plan under subpart 1 of part D 
if the State receives funds under that subpart.
[[Page 111 STAT. 54]]
``(G) To supplement other amounts used to develop 
and implement a Statewide coordinated services system 
designed to improve results for children and families, 
including children with disabilities and their families, 
but not to exceed one percent of the amount received by 
the State under this section. This system shall be 
coordinated with and, to the extent appropriate, build 
on the system of coordinated services developed by the 
State under part C of this Act.
``(H) For subgrants to local educational agencies 
for the purposes described in paragraph (4)(A).
  ``(4)(A) Subgrants to local educational agencies for 
  capacity-building and improvement.--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 assist them in providing direct services and in making 
  systemic change to improve results for children with 
  disabilities through one or more of the following:
``(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.
``(ii) Addressing needs or carrying out improvement 
strategies identified in the State's Improvement Plan 
under subpart 1 of part D.
``(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.
  ``(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.
[[Page 111 STAT. 55]]
  ``(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--
``(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 paragraphs (2) and (3) to meet 
State priorities based on input from local educational 
agencies; and
``(C) the percentage of those amounts, if any, that 
will be distributed to local educational agencies by 
formula.
    ``(g) Subgrants to Local Educational Agencies.--
  ``(1) Subgrants required.--Each State that receives a grant 
  under this section for any fiscal year shall distribute any 
  funds it does not retain under subsection (f ) (at least 75 
  percent of the grant funds) to local educational agencies in the 
  State that have established their eligibility under section 613, 
  and to State agencies that received funds under section 614A(a) 
  of this Act for fiscal year 1997, as then in effect, and have 
  established their eligibility under section 613, for use in 
  accordance with this part.
  ``(2) Allocations to local educational agencies.--
``(A) Interim procedure.--For each fiscal year for 
which funds are allocated to States under subsection 
(d)(2), each State shall allocate funds under paragraph 
(1) in accordance with section 611(d) of this Act, as in 
effect prior to the enactment of the Individuals with 
Disabilities Education Act Amendments of 1997.
``(B) Permanent procedure.--For each fiscal year for 
which funds are allocated to States under subsection 
(e), each State shall allocate funds under paragraph (1) 
as follows:
``(i) Base payments.--The State shall first 
  award each agency described in paragraph (1) the 
  amount that agency would have received under this 
  section for the base year, as defined in 
  subsection (e)(2)(A), if the State had distributed 
  75 percent of its grant for that year under 
  section 611(d), as then in effect.
``(ii) Allocation of remaining funds.--After 
  making allocations under clause (i), the State 
  shall--
``(I) allocate 85 percent of any 
  remaining funds to those agencies on the 
  basis of the relative numbers of 
  children enrolled in public and private 
  elementary and secondary schools within 
  the agency's jurisdiction; and
``(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.
  ``(3) Former chapter 1 state agencies.--
``(A) To the extent necessary, the State--
``(i) shall use funds that are available under 
  subsection (f )(1)(A) to ensure that each State 
  agency that received fiscal year 1994 funds under 
  subpart 2 of part D of chapter 1 of title I of the 
  Elementary and Secondary Education Act of 1965 
  receives, from the combination of funds under 
  subsection (f )(1)(A) and
[[Page 111 STAT. 56]]
  funds provided under paragraph (1) of this 
  subsection, an amount equal to--
``(I) the number of children with 
  disabilities, aged 6 through 21, to whom 
  the agency was providing special 
  education and related services on 
  December 1 of the fiscal year for which 
  the funds were appropriated, subject to 
  the limitation in subparagraph (B); 
  multiplied by
``(II) the per-child amount provided 
  under such subpart for fiscal year 1994; 
  and
``(ii) may use those funds to ensure that each 
  local educational agency that received fiscal year 
  1994 funds under that subpart for children who had 
  transferred from a State-operated or State-
  supported school or program assisted under that 
  subpart receives, from the combination of funds 
  available under subsection (f )(1)(A) and funds 
  provided under paragraph (1) of this subsection, 
  an amount for each such child, aged 3 through 21 
  to whom the agency was providing special education 
  and related services on December 1 of the fiscal 
  year for which the funds were appropriated, equal 
  to the per-child amount the agency received under 
  that subpart for fiscal year 1994.
``(B) The number of children counted under 
subparagraph (A)(i)(I) shall not exceed the number of 
children aged 3 through 21 for whom the agency received 
fiscal year 1994 funds under subpart 2 of part D of 
chapter 1 of title I of the Elementary and Secondary 
Education Act of 1965.
  ``(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.
    ``(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
[[Page 111 STAT. 57]]
  ``(2) the term `State' means each of the 50 States, the 
  District of Columbia, and the Commonwealth of Puerto Rico.
    ``(i) Use of Amounts by Secretary of the Interior.--
  ``(1) Provision of amounts for assistance.--
``(A) In general.--The Secretary of Education shall 
provide amounts to the Secretary of the Interior to meet 
the need for assistance for the education of children 
with disabilities on reservations aged 5 to 21, 
inclusive, enrolled in elementary and secondary schools 
for Indian children operated or funded by the Secretary 
of the Interior. The amount of such payment for any 
fiscal year shall be equal to 80 percent of the amount 
allotted under subsection (c) for that fiscal year.
``(B) Calculation of number of children.--In the 
case of Indian students aged 3 to 5, inclusive, who are 
enrolled in programs affiliated with the Bureau of 
Indian Affairs (hereafter in this subsection referred to 
as `BIA') schools and that are required by the States in 
which such schools are located to attain or maintain 
State accreditation, and which schools have such 
accreditation prior to the date of enactment of the 
Individuals with Disabilities Education Act Amendments 
of 1991, the school shall be allowed to count those 
children for the purpose of distribution of the funds 
provided under this paragraph to the Secretary of the 
Interior. The Secretary of the Interior shall be 
responsible for meeting all of the requirements of this 
part for these children, in accordance with paragraph 
(2).
``(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;
[[Page 111 STAT. 58]]
``(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 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.
  Section 616(a) shall apply to the information described in this 
  paragraph.
  ``(3) Payments for education and services for indian 
  children with disabilities aged 3 through 5.--
``(A) In general.--With funds appropriated under 
subsection (j), the Secretary of Education shall make 
payments to the Secretary of the Interior to be 
distributed to tribes or tribal organizations (as 
defined under section 4 of the Indian Self-Determination 
and Education Assistance Act) or consortia of the above 
to provide for the coordination of assistance for 
special education and related services for children with 
disabilities aged 3 through 5 on reservations served by 
elementary and secondary schools for Indian children 
operated or funded by the Department of the Interior. 
The amount of such payments under subparagraph (B) for 
any fiscal year shall be equal to 20 percent of the 
amount allotted under subsection (c).
``(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
[[Page 111 STAT. 59]]
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 one 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. 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)(21), the Secretary of the 
  Interior shall establish, not later than 6 months after the date 
  of the enactment of the Individuals with Disabilities Education 
  Act Amendments of 1997, 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
[[Page 111 STAT. 60]]
  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).
  ``(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).
    ``(j) 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.
``SEC. 612. STATE <<NOTE: 20 USC 1412.>>  ELIGIBILITY.
    ``(a) In General.--A State is eligible for assistance under this 
part for a fiscal year if the State demonstrates to the satisfaction of 
the Secretary that the State has in effect policies and procedures to 
ensure that it meets each of the following conditions:
  ``(1) Free appropriate public education.--
``(A) In general.--A free appropriate public 
education is available to all children with disabilities 
residing in the State between the ages of 3 and 21, 
inclusive, including children with disabilities who have 
been suspended or expelled from school.
``(B) Limitation.--The obligation to make a free 
appropriate public education available to all children 
with disabilities does not apply with respect to 
children:
``(i) aged 3 through 5 and 18 through 21 in a 
  State to the extent that its application to those 
  children would be inconsistent with State law or 
  practice, or the order of any court, respecting 
  the provision of public education to children in 
  those age ranges; and
``(ii) aged 18 through 21 to the extent that 
  State law does not require that special education 
  and related services under this part be provided 
  to children with disabilities who, in the 
  educational placement prior to their incarceration 
  in an adult correctional facility:
[[Page 111 STAT. 61]]
``(I) were not actually identified 
  as being a child with a disability under 
  section 602(3) of this Act; or
``(II) did not have an 
  individualized education program under 
  this part.
  ``(2) Full educational opportunity goal.--The State has 
  established a goal of providing full educational opportunity to 
  all children with disabilities and a detailed timetable for 
  accomplishing that goal.
  ``(3) Child find.--
``(A) In general.--All children with disabilities 
residing in the State, including children with 
disabilities attending private schools, regardless of 
the severity of their disabilities, and who are in need 
of special education and related services, are 
identified, located, and evaluated and a practical 
method is developed and implemented to determine which 
children with disabilities are currently receiving 
needed special education and related services.
``(B) Construction.--Nothing in this Act requires 
that children be classified by their disability so long 
as each child who has a disability listed in section 602 
and who, by reason of that disability, needs special 
education and related services is regarded as a child 
with a disability under this part.
  ``(4) Individualized education program.--An individualized 
  education program, or an individualized family service plan that 
  meets the requirements of section 636(d), is developed, 
  reviewed, and revised for each child with a disability in 
  accordance with section 614(d).
  ``(5) Least restrictive environment.--
``(A) In general.--To the maximum extent 
appropriate, children with disabilities, including 
children in public or private institutions or other care 
facilities, are educated with children who are not 
disabled, and special classes, separate schooling, or 
other removal of children with disabilities from the 
regular educational environment occurs only when the 
nature or severity of the disability of a child is such 
that education in regular classes with the use of 
supplementary aids and services cannot be achieved 
satisfactorily.
``(B) Additional requirement.--
``(i) In general.--If the State uses a funding 
  mechanism by which the State distributes State 
  funds on the basis of the type of setting in which 
  a child is served, the funding mechanism does not 
  result in placements that violate the requirements 
  of subparagraph (A).
``(ii) Assurance.--If the State does not have 
  policies and procedures to ensure compliance with 
  clause (i), the State shall provide the Secretary 
  an assurance that it will revise the funding 
  mechanism as soon as feasible to ensure that such 
  mechanism does not result in such placements.
  ``(6) Procedural safeguards.--
``(A) In general.--Children with disabilities and 
their parents are afforded the procedural safeguards 
required by section 615.
[[Page 111 STAT. 62]]
``(B) Additional procedural safeguards.--Procedures 
to ensure that testing and evaluation materials and 
procedures utilized for the purposes of evaluation and 
placement of children with disabilities will be selected 
and administered so as not to be racially or culturally 
discriminatory. Such materials or procedures shall be 
provided and administered in the child's native language 
or mode of communication, unless it clearly is not 
feasible to do so, and no single procedure shall be the 
sole criterion for determining an appropriate 
educational program for a child.
  ``(7) Evaluation.--Children with disabilities are evaluated 
  in accordance with subsections (a) through (c) of section 614.
  ``(8) Confidentiality.--Agencies in the State comply with 
  section 617(c) (relating to the confidentiality of records and 
  information).
  ``(9) Transition from part c to preschool programs.--
  Children participating in early-intervention programs assisted 
  under part C, and who will participate in preschool programs 
  assisted under this part, experience a smooth and effective 
  transition to those preschool programs in a manner consistent 
  with section 637(a)(8). By the third birthday of such a child, 
  an individualized education program or, if consistent with 
  sections 614(d)(2)(B) and 636(d), an individualized family 
  service plan, has been developed and is being implemented for 
  the child. The local educational agency will participate in 
  transition planning conferences arranged by the designated lead 
  agency under section 637(a)(8).
  ``(10) Children in private schools.--
``(A) Children enrolled in private schools by their 
parents.--
``(i) In general.--To the extent consistent 
  with the number and location of children with 
  disabilities in the State who are enrolled by 
  their parents in private elementary and secondary 
  schools, provision is made for the participation 
  of those children in the program assisted or 
  carried out under this part by providing for such 
  children special education and related services in 
  accordance with the following requirements, unless 
  the Secretary has arranged for services to those 
  children under subsection (f ):
``(I) Amounts expended for the 
  provision of those services by a local 
  educational agency shall be equal to a 
  proportionate amount of Federal funds 
  made available under this part.
``(II) Such services may be provided 
  to children with disabilities on the 
  premises of private, including 
  parochial, schools, to the extent 
  consistent with law.
``(ii) Child-find requirement.--The 
  requirements of paragraph (3) of this subsection 
  (relating to child find) shall apply with respect 
  to children with disabilities in the State who are 
  enrolled in private, including parochial, 
  elementary and secondary schools.
``(B) Children placed in, or referred to, private 
schools by public agencies.--
[[Page 111 STAT. 63]]
``(i) In general.--Children with disabilities 
  in private schools and facilities are provided 
  special education and related services, in 
  accordance with an individualized education 
  program, at no cost to their parents, if such 
  children are placed in, or referred to, such 
  schools or facilities by the State or appropriate 
  local educational agency as the means of carrying 
  out the requirements of this part or any other 
  applicable law requiring the provision of special 
  education and related services to all children 
  with disabilities within such State.
``(ii) Standards.--In all cases described in 
  clause (i), the State educational agency shall 
  determine whether such schools and facilities meet 
  standards that apply to State and local 
  educational agencies and that children so served 
  have all the rights they would have if served by 
  such agencies.
``(C) Payment for education of children enrolled in 
private schools without consent of or referral by the 
public agency.--
``(i) In general.--Subject to subparagraph 
  (A), this part does not require a local 
  educational agency to pay for the cost of 
  education, including special education and related 
  services, of a child with a disability at a 
  private school or facility if that agency made a 
  free appropriate public education available to the 
  child and the parents elected to place the child 
  in such private school or facility.
``(ii) Reimbursement for private school 
  placement.--If the parents of a child with a 
  disability, who previously received special 
  education and related services under the authority 
  of a public agency, enroll the child in a private 
  elementary or secondary school without the consent 
  of or referral by the public agency, a court or a 
  hearing officer may require the agency to 
  reimburse the parents for the cost of that 
  enrollment if the court or hearing officer finds 
  that the agency had not made a free appropriate 
  public education available to the child in a 
  timely manner prior to that enrollment.
``(iii) Limitation on reimbursement.--The cost 
  of reimbursement described in clause (ii) may be 
  reduced or denied--
``(I) if--
    ``(aa) at the most recent 
IEP meeting that the parents 
attended prior to removal of the 
child from the public school, 
the parents did not inform the 
IEP Team that they were 
rejecting the placement proposed 
by the public agency to provide 
a free appropriate public 
education to their child, 
including stating their concerns 
and their intent to enroll their 
child in a private school at 
public expense; or
    ``(bb) 10 business days 
(including any holidays that 
occur on a business day) prior 
to the removal of the child from 
the public school, the parents 
did not give written notice to 
the
[[Page 111 STAT. 64]]
public agency of the information 
described in division (aa);
``(II) if, prior to the parents' 
  removal of the child from the public 
  school, the public agency informed the 
  parents, through the notice requirements 
  described in section 615(b)(7), of its 
  intent to evaluate the child (including 
  a statement of the purpose of the 
  evaluation that was appropriate and 
  reasonable), but the parents did not 
  make the child available for such 
  evaluation; or
``(III) upon a judicial finding of 
  unreasonableness with respect to actions 
  taken by the parents.
``(iv) Exception.--Notwithstanding the notice 
  requirement in clause (iii)(I), the cost of 
  reimbursement may not be reduced or denied for 
  failure to provide such notice if--
``(I) the parent is illiterate and 
  cannot write in English;
``(II) compliance with clause 
  (iii)(I) would likely result in physical 
  or serious emotional harm to the child;
``(III) the school prevented the 
  parent from providing such notice; or
``(IV) the parents had not received 
  notice, pursuant to section 615, of the 
  notice requirement in clause (iii)(I).
  ``(11) State educational agency responsible for general 
  supervision.--
``(A) In general.--The State educational agency is 
responsible for ensuring that--
``(i) the requirements of this part are met; 
  and
``(ii) all educational programs for children 
  with disabilities in the State, including all such 
  programs administered by any other State or local 
  agency--
``(I) are under the general 
  supervision of individuals in the State 
  who are responsible for educational 
  programs for children with disabilities; 
  and
``(II) meet the educational 
  standards of the State educational 
  agency.
``(B) Limitation.--Subparagraph (A) shall not limit 
the responsibility of agencies in the State other than 
the State educational agency to provide, or pay for some 
or all of the costs of, a free appropriate public 
education for any child with a disability in the State.
``(C) Exception.--Notwithstanding subparagraphs (A) 
and (B), the Governor (or another individual pursuant to 
State law), consistent with State law, may assign to any 
public agency in the State the responsibility of 
ensuring that the requirements of this part are met with 
respect to children with disabilities who are convicted 
as adults under State law and incarcerated in adult 
prisons.
  ``(12) Obligations related to and methods of ensuring 
  services.--
``(A) Establishing responsibility for services.--The 
Chief Executive Officer or designee of the officer shall
[[Page 111 STAT. 65]]
ensure that an interagency agreement or other mechanism 
for interagency coordination is in effect between each 
public agency described in subparagraph (B) and the 
State educational agency, in order to ensure that all 
services described in subparagraph (B)(i) that are 
needed to ensure a free appropriate public education are 
provided, including the provision of such services 
during the pendency of any dispute under clause (iii). 
Such agreement or mechanism shall include the following:
``(i) Agency financial responsibility.--An 
  identification of, or a method for defining, the 
  financial responsibility of each agency for 
  providing services described in subparagraph 
  (B)(i) to ensure a free appropriate public 
  education to children with disabilities, provided 
  that the financial responsibility of each public 
  agency described in subparagraph (B), including 
  the State Medicaid agency and other public 
  insurers of children with disabilities, shall 
  precede the financial responsibility of the local 
  educational agency (or the State agency 
  responsible for developing the child's IEP).
``(ii) Conditions and terms of 
  reimbursement.--The conditions, terms, and 
  procedures under which a local educational agency 
  shall be reimbursed by other agencies.
``(iii) Interagency disputes.--Procedures for 
  resolving interagency disputes (including 
  procedures under which local educational agencies 
  may initiate proceedings) under the agreement or 
  other mechanism to secure reimbursement from other 
  agencies or otherwise implement the provisions of 
  the agreement or mechanism.
``(iv) Coordination of services procedures.--
  Policies and procedures for agencies to determine 
  and identify the interagency coordination 
  responsibilities of each agency to promote the 
  coordination and timely and appropriate delivery 
  of services described in subparagraph (B)(i).
``(B) Obligation of public agency.--
``(i) In general.--If any public agency other 
  than an educational agency is otherwise obligated 
  under Federal or State law, or assigned 
  responsibility under State policy or pursuant to 
  subparagraph (A), to provide or pay for any 
  services that are also considered special 
  education or related services (such as, but not 
  limited to, services described in sections 602(1) 
  relating to assistive technology devices, 602(2) 
  relating to assistive technology services, 602(22) 
  relating to related services, 602(29) relating to 
  supplementary aids and services, and 602(30) 
  relating to transition services) that are 
  necessary for ensuring a free appropriate public 
  education to children with disabilities within the 
  State, such public agency shall fulfill that 
  obligation or responsibility, either directly or 
  through contract or other arrangement.
``(ii) Reimbursement for services by public 
  agency.--If a public agency other than an 
  educational
[[Page 111 STAT. 66]]
  agency fails to provide or pay for the special 
  education and related services described in clause 
  (i), the local educational agency (or State agency 
  responsible for developing the child's IEP) shall 
  provide or pay for such services to the child. 
  Such local educational agency or State agency may 
  then claim reimbursement for the services from the 
  public agency that failed to provide or pay for 
  such services and such public agency shall 
  reimburse the local educational agency or State 
  agency pursuant to the terms of the interagency 
  agreement or other mechanism described in 
  subparagraph (A)(i) according to the procedures 
  established in such agreement pursuant to 
  subparagraph (A)(ii).
``(C) Special rule.--The requirements of 
subparagraph (A) may be met through--
``(i) state statute or regulation;
``(ii) signed agreements between respective 
  agency officials that clearly identify the 
  responsibilities of each agency relating to the 
  provision of services; or
``(iii) other appropriate written methods as 
  determined by the Chief Executive Officer of the 
  State or designee of the officer.
  ``(13) Procedural requirements relating to local educational 
  agency eligibility.--The State educational agency will not make 
  a final determination that a local educational agency is not 
  eligible for assistance under this part without first affording 
  that agency reasonable notice and an opportunity for a hearing.
  ``(14) Comprehensive system of personnel development.--The 
  State has in effect, consistent with the purposes of this Act 
  and with section 635(a)(8), a comprehensive system of personnel 
  development that is designed to ensure an adequate supply of 
  qualified special education, regular education, and related 
  services personnel that meets the requirements for a State 
  improvement plan relating to personnel development in 
  subsections (b)(2)(B) and (c)(3)(D) of section 653.
  ``(15) Personnel standards.--
``(A) In general.--The State educational agency has 
established and maintains standards to ensure that 
personnel necessary to carry out this part are 
appropriately and adequately prepared and trained.
``(B) Standards described.--Such standards shall--
``(i) be consistent with any State-approved or 
  State-recognized certification, licensing, 
  registration, or other comparable requirements 
  that apply to the professional discipline in which 
  those personnel are providing special education or 
  related services;
``(ii) to the extent the standards described 
  in subparagraph (A) are not based on the highest 
  requirements in the State applicable to a specific 
  profession or discipline, the State is taking 
  steps to require retraining or hiring of personnel 
  that meet appropriate professional requirements in 
  the State; and
``(iii) allow paraprofessionals and assistants 
  who are appropriately trained and supervised, in 
  accordance with State law, regulations, or written 
  policy,
[[Page 111 STAT. 67]]
  in meeting the requirements of this part to be 
  used to assist in the provision of special 
  education and related services to children with 
  disabilities under this part.
``(C) Policy.--In implementing this paragraph, a 
State may adopt a policy that includes a requirement 
that local educational agencies in the State make an 
ongoing good-faith effort to recruit and hire 
appropriately and adequately trained personnel to 
provide special education and related services to 
children with disabilities, including, in a geographic 
area of the State where there is a shortage of such 
personnel, the most qualified individuals available who 
are making satisfactory progress toward completing 
applicable course work necessary to meet the standards 
described in subparagraph (B)(i), consistent with State 
law, and the steps described in subparagraph (B)(ii) 
within three years.
  ``(16) Performance goals and indicators.--The State--
``(A) has established goals for the performance of 
children with disabilities in the State that--
``(i) will promote the purposes of this Act, 
  as stated in section 601(d); and
``(ii) are consistent, to the maximum extent 
  appropriate, with other goals and standards for 
  children established by the State;
``(B) has established performance indicators the 
State will use to assess progress toward achieving those 
goals that, at a minimum, address the performance of 
children with disabilities on assessments, drop-out 
rates, and graduation rates;
``(C) will, <<NOTE: Reports.>>  every two years, 
report to the Secretary and the public on the progress 
of the State, and of children with disabilities in the 
State, toward meeting the goals established under 
subparagraph (A); and
``(D) based on its assessment of that progress, will 
revise its State improvement plan under subpart 1 of 
part D as may be needed to improve its performance, if 
the State receives assistance under that subpart.
  ``(17) Participation in assessments.--
``(A) In general.--Children with disabilities are 
included in general State and district-wide assessment 
programs, with appropriate accommodations, where 
necessary. As appropriate, the State or local 
educational agency--
``(i) develops guidelines for the 
  participation of children with disabilities in 
  alternate assessments for those children who 
  cannot participate in State and district-wide 
  assessment programs; and
``(ii) develops and, beginning not later than 
  July 1, 2000, conducts those alternate 
  assessments.
``(B) Reports.--The State educational agency makes 
available to the public, and reports to the public with 
the same frequency and in the same detail as it reports 
on the assessment of nondisabled children, the 
following:
``(i) The number of children with disabilities 
  participating in regular assessments.
``(ii) The number of those children 
  participating in alternate assessments.
[[Page 111 STAT. 68]]
``(iii)(I) The performance of those children 
  on regular assessments (beginning not later than 
  July 1, 1998) and on alternate assessments (not 
  later than July 1, 2000), if doing so would be 
  statistically sound and would not result in the 
  disclosure of performance results identifiable to 
  individual children.
``(II) Data relating to the performance of 
  children described under subclause (I) shall be 
  disaggregated--
``(aa) for assessments conducted 
  after July 1, 1998; and
``(bb) for assessments conducted 
  before July 1, 1998, if the State is 
  required to disaggregate such data prior 
  to July 1, 1998.
  ``(18) Supplementation of state, local, and other federal 
  funds.--
``(A) Expenditures.--Funds paid to a State under 
this part will be expended in accordance with all the 
provisions of this part.
``(B) Prohibition against commingling.--Funds paid 
to a State under this part will not be commingled with 
State funds.
``(C) Prohibition against supplantation and 
conditions for waiver by secretary.--Except as provided 
in section 613, funds paid to a State under this part 
will be used to supplement the level of Federal, State, 
and local funds (including funds that are not under the 
direct control of State or local educational agencies) 
expended for special education and related services 
provided to children with disabilities under this part 
and in no case to supplant such Federal, State, and 
local funds, except that, where the State provides clear 
and convincing evidence that all children with 
disabilities have available to them a free appropriate 
public education, the Secretary may waive, in whole or 
in part, the requirements of this subparagraph if the 
Secretary concurs with the evidence provided by the 
State.
  ``(19) Maintenance of state financial support.--
``(A) In general.--The State does not reduce the 
amount of State financial support for special education 
and related services for children with disabilities, or 
otherwise made available because of the excess costs of 
educating those children, below the amount of that 
support for the preceding fiscal year.
``(B) Reduction of funds for failure to maintain 
support.--The Secretary shall reduce the allocation of 
funds under section 611 for any fiscal year following 
the fiscal year in which the State fails to comply with 
the requirement of subparagraph (A) by the same amount 
by which the State fails to meet the requirement.
``(C) Waivers for exceptional or uncontrollable 
circumstances.--The Secretary may waive the requirement 
of subparagraph (A) for a State, for one fiscal year at 
a time, if the Secretary determines that--
``(i) granting 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; or
[[Page 111 STAT. 69]]
``(ii) the State meets the standard in 
  paragraph (18)(C) of this section for a waiver of 
  the requirement to supplement, and not to 
  supplant, funds received under this part.
``(D) Subsequent years.--If, for any year, a State 
fails to meet the requirement of subparagraph (A), 
including any year for which the State is granted a 
waiver under subparagraph (C), the financial support 
required of the State in future years under subparagraph 
(A) shall be the amount that would have been required in 
the absence of that failure and not the reduced level of 
the State's support.
``(E) Regulations.--
``(i) The Secretary shall, by regulation, 
  establish procedures (including objective criteria 
  and consideration of the results of compliance 
  reviews of the State conducted by the Secretary) 
  for determining whether to grant a waiver under 
  subparagraph (C)(ii).
``(ii) The Secretary shall publish proposed 
  regulations under clause (i) not later than 6 
  months after the date of the enactment of the 
  Individuals with Disabilities Education Act 
  Amendments of 1997, and shall issue final 
  regulations under clause (i) not later than 1 year 
  after such date of enactment.
  ``(20) Public participation.--Prior to the adoption of any 
  policies and procedures needed to comply with this section 
  (including any amendments to such policies and procedures), the 
  State ensures that there are public hearings, adequate notice of 
  the hearings, and an opportunity for comment available to the 
  general public, including individuals with disabilities and 
  parents of children with disabilities.
  ``(21) State advisory panel.--
``(A) In general.--The State has established and 
maintains an advisory panel for the purpose of providing 
policy guidance with respect to special education and 
related services for children with disabilities in the 
State.
``(B) Membership.--Such advisory panel shall consist 
of members appointed by the Governor, or any other 
official authorized under State law to make such 
appointments, that is representative of the State 
population and that is composed of individuals involved 
in, or concerned with, the education of children with 
disabilities, including--
``(i) parents of children with disabilities;
``(ii) individuals with disabilities;
``(iii) teachers;
``(iv) representatives of institutions of 
  higher education that prepare special education 
  and related services personnel;
``(v) State and local education officials;
``(vi) administrators of programs for children 
  with disabilities;
``(vii) representatives of other State 
  agencies involved in the financing or delivery of 
  related services to children with disabilities;
``(viii) representatives of private schools 
  and public charter schools;
[[Page 111 STAT. 70]]
``(ix) at least one representative of a 
  vocational, community, or business organization 
  concerned with the provision of transition 
  services to children with disabilities; and
``(x) representatives from the State juvenile 
  and adult corrections agencies.
``(C) Special rule.--A majority of the members of 
the panel shall be individuals with disabilities or 
parents of children with disabilities.
``(D) Duties.--The advisory panel shall--
``(i) advise the State educational agency of 
  unmet needs within the State in the education of 
  children with disabilities;
``(ii) comment publicly on any rules or 
  regulations proposed by the State regarding the 
  education of children with disabilities;
``(iii) advise the State educational agency in 
  developing evaluations and reporting on data to 
  the Secretary under section 618;
``(iv) advise the State educational agency in 
  developing corrective action plans to address 
  findings identified in Federal monitoring reports 
  under this part; and
``(v) advise the State educational agency in 
  developing and implementing policies relating to 
  the coordination of services for children with 
  disabilities.
  ``(22) Suspension and expulsion rates.--
``(A) In general.--The State educational agency 
examines data to determine if significant discrepancies 
are occurring in the rate of long-term suspensions and 
expulsions of children with disabilities--
``(i) among local educational agencies in the 
  State; or
``(ii) compared to such rates for nondisabled 
  children within such agencies.
``(B) Review and revision of policies.--If such 
discrepancies are occurring, the State educational 
agency reviews and, if appropriate, revises (or requires 
the affected State or local educational agency to 
revise) its policies, procedures, and practices relating 
to the development and implementation of IEPs, the use 
of behavioral interventions, and procedural safeguards, 
to ensure that such policies, procedures, and practices 
comply with this Act.
    ``(b) State Educational Agency as Provider of Free Appropriate 
Public Education or Direct Services.--If the State educational agency 
provides free appropriate public education to children with 
disabilities, or provides direct services to such children, such 
agency--
  ``(1) shall comply with any additional requirements of 
  section 613(a), as if such agency were a local educational 
  agency; and
  ``(2) may use amounts that are otherwise available to such 
  agency under this part to serve those children without regard to 
  section 613(a)(2)(A)(i) (relating to excess costs).
    ``(c) Exception for Prior State Plans.--
  ``(1) In general.--If a State has on file with the Secretary 
  policies and procedures that demonstrate that such State meets
[[Page 111 STAT. 71]]
  any requirement of subsection (a), including any policies and 
  procedures filed under this part as in effect before the 
  effective date of the Individuals with Disabilities Education 
  Act Amendments of 1997, the Secretary shall consider such State 
  to have met such requirement for purposes of receiving a grant 
  under this part.
  ``(2) Modifications <<NOTE: Applicability.>>  made by 
  state.--Subject to paragraph (3), an application submitted by a 
  State in accordance with this section shall remain in effect 
  until the State submits to the Secretary such modifications as 
  the State deems necessary. This section shall apply to a 
  modification to an application to the same extent and in the 
  same manner as this section applies to the original plan.
  ``(3) Modifications required by the secretary.--If, after 
  the effective date of the Individuals with Disabilities 
  Education Act Amendments of 1997, the provisions of this Act are 
  amended (or the regulations developed to carry out this Act are 
  amended), or there is a new interpretation of this Act by a 
  Federal court or a State's highest court, or there is an 
  official finding of noncompliance with Federal law or 
  regulations, the Secretary may require a State to modify its 
  application only to the extent necessary to ensure the State's 
  compliance with this part.
    ``(d) Approval by the Secretary.--
  ``(1) In general.--If the Secretary determines that a State 
  is eligible to receive a grant under this part, the Secretary 
  shall notify the State of that determination.
  ``(2) Notice and hearing.--The Secretary shall not make a 
  final determination that a State is not eligible to receive a 
  grant under this part until after providing the State--
``(A) with reasonable notice; and
``(B) with an opportunity for a hearing.
    ``(e) Assistance Under Other Federal Programs.--Nothing in this 
title permits a State to reduce medical and other assistance available, 
or to alter eligibility, under titles V and XIX of the Social Security 
Act with respect to the provision of a free appropriate public education 
for children with disabilities in the State.
    ``(f ) By-Pass for Children in Private Schools.--
  ``(1) In general.--If, on the date of enactment of the 
  Education of the Handicapped Act Amendments of 1983, a State 
  educational agency is prohibited by law from providing for the 
  participation in special programs of children with disabilities 
  enrolled in private elementary and secondary schools as required 
  by subsection (a)(10)(A), the Secretary shall, notwithstanding 
  such provision of law, arrange for the provision of services to 
  such children through arrangements which shall be subject to the 
  requirements of such subsection.
  ``(2) Payments.--
``(A) Determination of amounts.--If the Secretary 
arranges for services pursuant to this subsection, the 
Secretary, after consultation with the appropriate 
public and private school officials, shall pay to the 
provider of such services for a fiscal year an amount 
per child that does not exceed the amount determined by 
dividing--
``(i) the total amount received by the State 
  under this part for such fiscal year; by
[[Page 111 STAT. 72]]
``(ii) the number of children with 
  disabilities served in the prior year, as reported 
  to the Secretary by the State under section 618.
``(B) Withholding of certain amounts.--Pending final 
resolution of any investigation or complaint that could 
result in a determination under this subsection, the 
Secretary may withhold from the allocation of the 
affected State educational agency the amount the 
Secretary estimates would be necessary to pay the cost 
of services described in subparagraph (A).
``(C) Period of payments.--The period under which 
payments are made under subparagraph (A) shall continue 
until the Secretary determines that there will no longer 
be any failure or inability on the part of the State 
educational agency to meet the requirements of 
subsection (a)(10)(A).
  ``(3) Notice and hearing.--
``(A) In general.--The Secretary shall not take any 
final action under this subsection until the State 
educational agency affected by such action has had an 
opportunity, for at least 45 days after receiving 
written notice thereof, to submit written objections and 
to appear before the Secretary or the Secretary's 
designee to show cause why such action should not be 
taken.
``(B) Review of action.--If a State educational 
agency is dissatisfied with the Secretary's final action 
after a proceeding under subparagraph (A), such agency 
may, not later than 60 days after notice of such action, 
file with the United States court of appeals for the 
circuit in which such State is located a petition for 
review of that action. A copy of the petition shall be 
forthwith transmitted by the clerk of the court to 
the <<NOTE: Records.>>  Secretary. The Secretary 
thereupon shall file in the court the record of the 
proceedings on which the Secretary based the Secretary's 
action, as provided in section 2112 of title 28, United 
States Code.
``(C) Review of <<NOTE: Records.>>  findings of 
fact.--The findings of fact by the Secretary, if 
supported by substantial evidence, shall be conclusive, 
but the court, for good cause shown, may remand the case 
to the Secretary to take further evidence, and the 
Secretary may thereupon make new or modified findings of 
fact and may modify the Secretary's previous action, and 
shall file in the court the record of the further 
proceedings. Such new or modified findings of fact shall 
likewise be conclusive if supported by substantial 
evidence.
``(D) Jurisdiction of court of appeals; review by 
united states supreme court.--Upon the filing of a 
petition under subparagraph (B), the United States court 
of appeals shall have jurisdiction to affirm the action 
of the Secretary or to set it aside, in whole or in 
part. The judgment of the court shall be subject to 
review by the Supreme Court of the United States upon 
certiorari or certification as provided in section 1254 
of title 28, United States Code.
[[Page 111 STAT. 73]]
``SEC. 613. LOCAL <<NOTE: 20 USC 1413.>>  EDUCATIONAL AGENCY 
  ELIGIBILITY.
    ``(a) In General.--A local educational agency is eligible for 
assistance under this part for a fiscal year if such agency demonstrates 
to the satisfaction of the State educational agency that it meets each 
of the following conditions:
  ``(1) Consistency with state policies.--The local 
  educational agency, in providing for the education of children 
  with disabilities within its jurisdiction, has in effect 
  policies, procedures, and programs that are consistent with the 
  State policies and procedures established under section 612.
  ``(2) Use of amounts.--
``(A) In general.--Amounts provided to the local 
educational agency under this part shall be expended in 
accordance with the applicable provisions of this part 
and--
``(i) shall be used only to pay the excess 
  costs of providing special education and related 
  services to children with disabilities;
``(ii) shall be used to supplement State, 
  local, and other Federal funds and not to supplant 
  such funds; and
``(iii) shall not be used, except as provided 
  in subparagraphs (B) and (C), to reduce the level 
  of expenditures for the education of children with 
  disabilities made by the local educational agency 
  from local funds below the level of those 
  expenditures for the preceding fiscal year.
``(B) Exception.--Notwithstanding the restriction in 
subparagraph (A)(iii), a local educational agency may 
reduce the level of expenditures where such reduction is 
attributable to--
``(i) the voluntary departure, by retirement 
  or otherwise, or departure for just cause, of 
  special education personnel;
``(ii) a decrease in the enrollment of 
  children with disabilities;
``(iii) the termination of the obligation of 
  the agency, consistent with this part, to provide 
  a program of special education to a particular 
  child with a disability that is an exceptionally 
  costly program, as determined by the State 
  educational agency, because the child--
``(I) has left the jurisdiction of 
  the agency;
``(II) has reached the age at which 
  the obligation of the agency to provide 
  a free appropriate public education to 
  the child has terminated; or
``(III) no longer needs such program 
  of special education; or
``(iv) the termination of costly expenditures 
  for long-term purchases, such as the acquisition 
  of equipment or the construction of school 
  facilities.
``(C) Treatment of federal funds in certain fiscal 
years.--
``(i) Notwithstanding clauses (ii) and (iii) 
  of subparagraph (A), for any fiscal year for which 
  amounts appropriated to carry out section 611 
  exceeds $4,100,000,000, a local educational agency 
  may treat as local funds, for the purpose of such 
  clauses, up
[[Page 111 STAT. 74]]
  to 20 percent of the amount of funds it receives 
  under this part that exceeds the amount it 
  received under this part for the previous fiscal 
  year.
``(ii) Notwithstanding clause (i), if a State 
  educational agency determines that a local 
  educational agency is not meeting the requirements 
  of this part, the State educational agency may 
  prohibit the local educational agency from 
  treating funds received under this part as local 
  funds under clause (i) for any fiscal year, only 
  if it is authorized to do so by the State 
  constitution or a State statute.
``(D) Schoolwide programs under title i of the 
esea.--Notwithstanding subparagraph (A) or any other 
provision of this part, a local educational agency may 
use funds received under this part for any fiscal year 
to carry out a schoolwide program under section 1114 of 
the Elementary and Secondary Education Act of 1965, 
except that the amount so used in any such program shall 
not exceed--
``(i) the number of children with disabilities 
  participating in the schoolwide program; 
  multiplied by
``(ii)(I) the amount received by the local 
  educational agency under this part for that fiscal 
  year; divided by
``(II) the number of children with 
  disabilities in the jurisdiction of that agency.
  ``(3) Personnel development.--The local educational agency--
``(A) shall ensure that all personnel necessary to 
carry out this part are appropriately and adequately 
prepared, consistent with the requirements of section 
653(c)(3)(D); and
``(B) to the extent such agency determines 
appropriate, shall contribute to and use the 
comprehensive system of personnel development of the 
State established under section 612(a)(14).
  ``(4) Permissive use of funds.--Notwithstanding paragraph 
  (2)(A) or section 612(a)(18)(B) (relating to commingled funds), 
  funds provided to the local educational agency under this part 
  may be used for the following activities:
``(A) Services and aids that also benefit 
nondisabled children.--For the costs of special 
education and related services and supplementary aids 
and services provided in a regular class or other 
education-related setting to a child with a disability 
in accordance with the individualized education program 
of the child, even if one or more nondisabled children 
benefit from such services.
``(B) Integrated and coordinated services system.--
To develop and implement a fully integrated and 
coordinated services system in accordance with 
subsection (f ).
  ``(5) Treatment of charter schools and their students.--In 
  carrying out this part with respect to charter schools that are 
  public schools of the local educational agency, the local 
  educational agency--
[[Page 111 STAT. 75]]
``(A) serves children with disabilities attending 
those schools in the same manner as it serves children 
with disabilities in its other schools; and
``(B) provides funds under this part to those 
schools in the same manner as it provides those funds to 
its other schools.
  ``(6) Information for state educational agency.--The local 
  educational agency shall provide the State educational agency 
  with information necessary to enable the State educational 
  agency to carry out its duties under this part, including, with 
  respect to paragraphs (16) and (17) of section 612(a), 
  information relating to the performance of children with 
  disabilities participating in programs carried out under this 
  part.
  ``(7) Public information.--The local educational agency 
  shall make available to parents of children with disabilities 
  and to the general public all documents relating to the 
  eligibility of such agency under this part.
    ``(b) Exception for Prior Local Plans.--
  ``(1) In general.--If a local educational agency or State 
  agency has on file with the State educational agency policies 
  and procedures that demonstrate that such local educational 
  agency, or such State agency, as the case may be, meets any 
  requirement of subsection (a), including any policies and 
  procedures filed under this part as in effect before the 
  effective date of the Individuals with Disabilities Education 
  Act Amendments of 1997, the State educational agency shall 
  consider such local educational agency or State agency, as the 
  case may be, to have met such requirement for purposes of 
  receiving assistance under this part.
  ``(2) Modification made by local educational agency.--
  Subject to paragraph (3), an application submitted by a local 
  educational agency in accordance with this section shall remain 
  in effect until it submits to the State educational agency such 
  modifications as the local educational agency deems necessary.
  ``(3) Modifications required by state educational agency.--
  If, after the effective date of the Individuals with 
  Disabilities Education Act Amendments of 1997, the provisions of 
  this Act are amended (or the regulations developed to carry out 
  this Act are amended), or there is a new interpretation of this 
  Act by Federal or State courts, or there is an official finding 
  of noncompliance with Federal or State law or regulations, the 
  State educational agency may require a local educational agency 
  to modify its application only to the extent necessary to ensure 
  the local educational agency's compliance with this part or 
  State law.
    ``(c) Notification of Local Educational Agency or State Agency in 
Case of Ineligibility.--If the State educational agency determines that 
a local educational agency or State agency is not eligible under this 
section, the State educational agency shall notify the local educational 
agency or State agency, as the case may be, of that determination and 
shall provide such local educational agency or State agency with 
reasonable notice and an opportunity for a hearing.
    ``(d) Local Educational Agency Compliance.--
  ``(1) In general.--If the State educational agency, after 
  reasonable notice and an opportunity for a hearing, finds that
[[Page 111 STAT. 76]]
  a local educational agency or State agency that has been 
  determined to be eligible under this section is failing to 
  comply with any requirement described in subsection (a), the 
  State educational agency shall reduce or shall not provide any 
  further payments to the local educational agency or State agency 
  until the State educational agency is satisfied that the local 
  educational agency or State agency, as the case may be, is 
  complying with that requirement.
  ``(2) Additional requirement.--Any State agency or local 
  educational agency in receipt of a notice described in paragraph 
  (1) shall, by means of public notice, take such measures as may 
  be necessary to bring the pendency of an action pursuant to this 
  subsection to the attention of the public within the 
  jurisdiction of such agency.
  ``(3) Consideration.--In carrying out its responsibilities 
  under paragraph (1), the State educational agency shall consider 
  any decision made in a hearing held under section 615 that is 
  adverse to the local educational agency or State agency involved 
  in that decision.
    ``(e) Joint Establishment of Eligibility.--
  ``(1) Joint establishment.--
``(A) In general.--A State educational agency may 
require a local educational agency to establish its 
eligibility jointly with another local educational 
agency if the State educational agency determines that 
the local educational agency would be ineligible under 
this section because the local educational agency would 
not be able to establish and maintain programs of 
sufficient size and scope to effectively meet the needs 
of children with disabilities.
``(B) Charter school exception.--A State educational 
agency may not require a charter school that is a local 
educational agency to jointly establish its eligibility 
under subparagraph (A) unless it is explicitly permitted 
to do so under the State's charter school statute.
  ``(2) Amount of payments.--If a State educational agency 
  requires the joint establishment of eligibility under paragraph 
  (1), the total amount of funds made available to the affected 
  local educational agencies shall be equal to the sum of the 
  payments that each such local educational agency would have 
  received under section 611(g) if such agencies were eligible for 
  such payments.
  ``(3) Requirements.--Local educational agencies that 
  establish joint eligibility under this subsection shall--
``(A) adopt policies and procedures that are 
consistent with the State's policies and procedures 
under section 612(a); and
``(B) be jointly responsible for implementing 
programs that receive assistance under this part.
  ``(4) Requirements for educational service agencies.--
``(A) In general.--If an educational service agency 
is required by State law to carry out programs under 
this part, the joint responsibilities given to local 
educational agencies under this subsection shall--
``(i) not apply to the administration and 
  disbursement of any payments received by that 
  educational service agency; and
[[Page 111 STAT. 77]]
``(ii) be carried out only by that educational 
  service agency.
``(B) Additional requirement.--Notwithstanding any 
other provision of this subsection, an educational 
service agency shall provide for the education of 
children with disabilities in the least restrictive 
environment, as required by section 612(a)(5).
    ``(f ) Coordinated Services System.--
  ``(1) In general.--A local educational agency may not use 
  more than 5 percent of the amount such agency receives under 
  this part for any fiscal year, in combination with other amounts 
  (which shall include amounts other than education funds), to 
  develop and implement a coordinated services system designed to 
  improve results for children and families, including children 
  with disabilities and their families.
  ``(2) Activities.--In implementing a coordinated services 
  system under this subsection, a local educational agency may 
  carry out activities that include--
``(A) improving the effectiveness and efficiency of 
service delivery, including developing strategies that 
promote accountability for results;
``(B) service coordination and case management that 
facilitates the linkage of individualized education 
programs under this part and individualized family 
service plans under part C with individualized service 
plans under multiple Federal and State programs, such as 
title I of the Rehabilitation Act of 1973 (vocational 
rehabilitation), title XIX of the Social Security Act 
(Medicaid), and title XVI of the Social Security Act 
(supplemental security income);
``(C) developing and implementing interagency 
financing strategies for the provision of education, 
health, mental health, and social services, including 
transition services and related services under this Act; 
and
``(D) interagency personnel development for 
individuals working on coordinated services.
  ``(3) Coordination with certain projects under elementary 
  and secondary education act of 1965.--If a local educational 
  agency is carrying out a coordinated services project under 
  title XI of the Elementary and Secondary Education Act of 1965 
  and a coordinated services project under this part in the same 
  schools, such agency shall use amounts under this subsection in 
  accordance with the requirements of that title.
    ``(g) School-Based Improvement Plan.--
  ``(1) In general.--Each local educational agency may, in 
  accordance with paragraph (2), use funds made available under 
  this part to permit a public school within the jurisdiction of 
  the local educational agency to design, implement, and evaluate 
  a school-based improvement plan that is consistent with the 
  purposes described in section 651(b) and that is designed to 
  improve educational and transitional results for all children 
  with disabilities and, as appropriate, for other children 
  consistent with subparagraphs (A) and (B) of subsection (a)(4) 
  in that public school.
  ``(2) Authority.--
``(A) In general.--A State educational agency may 
grant authority to a local educational agency to permit
[[Page 111 STAT. 78]]
a public school described in paragraph (1) (through a 
school-based standing panel established under paragraph 
(4)(B)) to design, implement, and evaluate a school-
based improvement plan described in paragraph (1) for a 
period not to exceed 3 years.
``(B) Responsibility of local educational agency.--
If a State educational agency grants the authority 
described in subparagraph (A), a local educational 
agency that is granted such authority shall have the 
sole responsibility of oversight of all activities 
relating to the design, implementation, and evaluation 
of any school-based improvement plan that a public 
school is permitted to design under this subsection.
  ``(3) Plan requirements.--A school-based improvement plan 
  described in paragraph (1) shall--
``(A) be designed to be consistent with the purposes 
described in section 651(b) and to improve educational 
and transit