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SEC. 1234. USES OF FUNDS.

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    (a) IN GENERAL- In carrying out an Even Start program under this subpart, a recipient of funds under this subpart shall use those funds to pay the Federal share of the cost of providing intensive family literacy services that involve parents and children, from birth through age 7, in a cooperative effort to help parents become full partners in the education of their children and to assist children in reaching their full potential as learners.
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    (b) FEDERAL SHARE LIMITATION-
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    • (1) IN GENERAL-
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      • (A) FEDERAL SHARE- Except as provided in paragraph (2), the Federal share under this subpart may not exceed —
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        • (i) 90 percent of the total cost of the program in the first year that the program receives assistance under this subpart or its predecessor authority;
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        • (ii) 80 percent in the second year;
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        • (iii) 70 percent in the third year;
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        • (iv) 60 percent in the fourth year;
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        • (v) 50 percent in the fifth, sixth, seventh, and eighth such years; and
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        • (vi) 35 percent in any subsequent year.
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      • (B) REMAINING COST- The remaining cost of a program assisted under this subpart may be provided in cash or in kind, fairly evaluated, and may be obtained from any source, including other Federal funds under this Act.
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    • (2) WAIVER- The State educational agency may waive, in whole or in part, the Federal share described in paragraph (1) for an eligible entity if the entity —
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      • (A) demonstrates that it otherwise would not be able to participate in the program assisted under this subpart; and
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      • (B) negotiates an agreement with the State educational agency with respect to the amount of the remaining cost to which the waiver will be applicable.
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    • (3) PROHIBITION- Federal funds provided under this subpart may not be used for the indirect costs of a program assisted under this subpart, except that the Secretary may waive this paragraph if an eligible recipient of funds reserved under section 1232(a)(1)(C) demonstrates to the Secretarys satisfaction that the recipient otherwise would not be able to participate in the program assisted under this subpart.
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    (c) USE OF FUNDS FOR FAMILY LITERACY SERVICES-
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    • (1) IN GENERAL- A State educational agency may use a portion of funds reserved under section 1233(a), to assist eligible entities receiving a subgrant under section 1233(b) in improving the quality of family literacy services provided under Even Start programs under this subpart, except that in no case may a State educational agencys use of funds for this purpose for a fiscal year result in a decrease from the level of activities and services provided to program participants in the preceding year.
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    • (2) PRIORITY- In carrying out paragraph (1), a State educational agency shall give priority to programs that were of low quality, as evaluated based on the indicators of program quality developed by the State educational agency under section 1240.
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    • (3) TECHNICAL ASSISTANCE TO HELP LOCAL PROGRAMS RAISE ADDITIONAL FUNDS- In carrying out paragraph (1), a State educational agency may use the funds referred to in that paragraph to provide technical assistance to help local programs of demonstrated effectiveness to access and leverage additional funds for the purpose of expanding services and reducing waiting lists, including requesting and applying for non-Federal resources.
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    • (4) TECHNICAL ASSISTANCE AND TRAINING- Assistance under paragraph (1) shall be in the form of technical assistance and training, provided by a State educational agency through a grant, contract, or cooperative agreement with an entity that has experience in offering high-quality training and technical assistance to family literacy providers.