SEC. 1126. SPECIAL ALLOCATION PROCEDURES.
(a) ALLOCATIONS FOR NEGLECTED CHILDREN-
(1) IN GENERAL- If a State educational agency determines that a local educational agency in the State is unable or unwilling to provide for the special educational needs of children who are living in institutions for neglected children as described in section 1124(c)(1)(B), the State educational agency shall, if such agency assumes responsibility for the special educational needs of such children, receive the portion of such local educational agencys allocation under sections 1124, 1124A, 1125, and 1125A that is attributable to such children.
(2) SPECIAL RULE- If the State educational agency does not assume such responsibility, any other State or local public agency that does assume such responsibility shall receive that portion of the local educational agencys allocation.
(b) ALLOCATIONS AMONG LOCAL EDUCATIONAL AGENCIES- The State educational agency may allocate the amounts of grants under sections 1124, 1124A, 1125, and 1125A among the affected local educational agencies —
(1) if two or more local educational agencies serve, in whole or in part, the same geographical area;
(2) if a local educational agency provides free public education for children who reside in the school district of another local educational agency; or
(3) to reflect the merger, creation, or change of boundaries of one or more local educational agencies.
(c) REALLOCATION- If a State educational agency determines that the amount of a grant a local educational agency would receive under sections 1124, 1124A, 1125, and 1125A is more than such local educational agency will use, the State educational agency shall make the excess amount available to other local educational agencies in the State that need additional funds in accordance with criteria established by the State educational agency.