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an obligation to assist the States in making available to all

2 children an education of high quality.

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(b) It is therefore the purpose of this title to provide 4 financial assistance to the States and to local educational 5 agencies to assure that their resources when supplemented 6 by this Federal assistance will be adequate to provide to all 7 children an elementary and secondary education of high 8 quality.

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AMOUNT OF BASIC GRANTS

SEC. 102. (a) From the sums appropriated for the fiscal 11 year ending September 30, 1978, and for each of the suc12 ceeding fiscal years ending prior to October 1, 1982, the 13 Commissioner shall reserve an amount not to exceed 2 per 14 centum for basic grants to Puerto Rico, Guam, American 15 Samoa, the Virgin Islands, and the Trust Territory of the 16 Pacific Islands according to their respective needs for such 17 assistance under this section, and the Commissioner shall set 18 the maximum amounts which their local educational agencies 19 shall be eligible to receive.

20 (b) (1) From the remainder of the sums appropriated 21 for each such fiscal year, the Commissioner shall pay to each 22 local educational agency within a State the basic grant to 23 which it is entitled, as determined under paragraph (2). 24 (2) The amount of the basic grant to which a local 25 educational agency is entitled is equal to $100 for every child

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1 in average daily membership in elementary and secondary 2 schools in the school district of such agency, reduced by the 3 percentage that its non-Federal per pupil expenditure exceeds

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115 per centum of the State average per pupil expenditure.

APPLICATIONS FOR BASIC GRANTS

SEC. 103. (a) Any local educational agency which

7 desires to receive for any fiscal year the basic grant to which

g it is entitled under section 102 must submit to the appro

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9 priate State educational agency an application which con10 tains

(1) an assessment of the educational needs of the children enrolled in the schools of such agency and its

plans for meeting those needs with funds provided under this title;

(2) an evaluation of the effectiveness, including objective measurements of educational achievement of programs funded in the preceding fiscal year from funds 'provided under this title;

(3) such other information as the State educational agency may reasonably need to enable it to perform its

(A) (i) to the extent consistent with the number of children in the school district of such agency

who are enrolled in private nonprofit elementary and

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secondary schools, such agency, after consultation

with the appropriate private school officials, will provide for the benefit of such children in such schools

secular, neutral, or nonideological services, mate

rials, and equipment including such facilities as necsary for their provision consistent with subparagraph (B) of this section, or, if such are not feasibly or necessary in one or more of such private schools as determined by the local educational agency after consultation with the appropriate private school officials, such other arrangements, as dual enrollments,

which will assure adequate participation of such children, and (ii) from the funds received by such agency under the provisions of section 102, such agency will expend, for the purposes of fulfilling the requirements of this paragraph, an amount which bears the same ratio to the total amount received under section 102 as the number of children enrolled in private nonprofit schools who are counted for purposes of section 102 (b) (2) bears to the total number of such children enrolled in elementary and secondary schools in the school district of such agency; (B) (i) the control of funds provided under this title and title to property acquired therewith shall be in a public agency for the uses and purposes pro

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vided in this title, and that a public agency will administer such funds and property; (ii) the provision

of services pursuant to subparagraph (A) shall be provided by employees of such public agency or through contract by such public agency with a person, an association, agency, or corporation who or which in the provision of such services, is independent of such private school and any religious organiza

tion, and such employment or contract shall be

under the control and supervision of such public agency; and (iii) the funds provided under this title shall not be commingled with State or local funds; and

(5) assurances that

(A) Federal funds made available under this title will be so used as to supplement and, to the extent possible, increase the level of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of pupils participating in programs assisted under this title;

(B) it will keep such records and afford such access thereto as the State educational agency may

find necessary to assure the correctness and verifica

tion of such applications; and

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(C) no more than 10 per centun of the funds received under this title in any fiscal year will be

used for capital outlay and debt service.

(b) The State educational agency shall not finally dis

5 approve in whole or in part any application for funds under 6 this title without first affording the local educational agency 7 submitting the application reasonable notice and opportunity 8 for a hearing.

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STATE PARTICIPATION IN BASIC GRANT PROGRAM

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SEC. 104. (a) Any State which desires to participate 11 under this title shall submit through its State educational 12 agency to the Commissioner an application, in such detail 13 as the Commissioner deems necessary, which provides satis14 factory assurances that—

(1) except as provided in section 105 (b), payments under this title will be used only for prograins

which have been approved by the State educational agency pursuant to section 103 and which meet the applicable requirements of that section, and that such agency will in all other respects comply with the provisions of this title, including the enforcement of any obligations imposed upon a local educational agency under section 103; and

(2), the State educational agency will make to the

Commissioner (A) periodic reports (including the re