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SEC. 1303. STATE ALLOCATIONS.

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    (a) STATE ALLOCATIONS-
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    • (1) FISCAL YEAR 2002- For fiscal year 2002, each State (other than the Commonwealth of Puerto Rico) is entitled to receive under this part an amount equal to —
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      • (A) the sum of the estimated number of migratory children aged 3 through 21 who reside in the State full time and the full-time equivalent of the estimated number of migratory children aged 3 through 21 who reside in the State part time, as determined in accordance with subsection (e); multiplied by
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      • (B) 40 percent of the average per-pupil expenditure in the State, except that the amount determined under this paragraph shall not be less than 32 percent, nor more than 48 percent, of the average per-pupil expenditure in the United States.
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    • (2) SUBSEQUENT YEARS-
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      • (A) BASE AMOUNT-
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        • (i) IN GENERAL- Except as provided in subsection (b) and clause (ii), each State (other than the Commonwealth of Puerto Rico) is entitled to receive under this part, for fiscal year 2003 and succeeding fiscal years, an amount equal to —
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          • (I) the amount that such State received under this part for fiscal year 2002; plus
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          • (II) the amount allocated to the State under subparagraph (B).
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        • (ii) NONPARTICIPATING STATES- In the case of a State (other than the Commonwealth of Puerto Rico) that did not receive any funds for fiscal year 2002 under this part, the State shall receive, for fiscal year 2003 and succeeding fiscal years, an amount equal to —
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          • (I) the amount that such State would have received under this part for fiscal year 2002 if its application under section 1304 for the year had been approved; plus
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          • (II) the amount allocated to the State under subparagraph (B).
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      • (B) ALLOCATION OF ADDITIONAL AMOUNT- For fiscal year 2003 and succeeding fiscal years, the amount (if any) by which the funds appropriated to carry out this part for the year exceed such funds for fiscal year 2002 shall be allocated to a State (other than the Commonwealth of Puerto Rico) so that the State receives an amount equal to —
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        • (i) the sum of —
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          • (I) the number of identified eligible migratory children, aged 3 through 21, residing in the State during the previous year; and
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          • (II) the number of identified eligible migratory children, aged 3 through 21, who received services under this part in summer or intersession programs provided by the State during such year; multiplied by
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        • (ii) 40 percent of the average per-pupil expenditure in the State, except that the amount determined under this clause may not be less than 32 percent, or more than 48 percent, of the average per-pupil expenditure in the United States.
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    (b) ALLOCATION TO PUERTO RICO-
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    • (1) IN GENERAL- For each fiscal year, the grant which the Commonwealth of Puerto Rico shall be eligible to receive under this part shall be the amount determined by multiplying the number of children who would be counted under subsection (a)(1)(A) if such subsection applied to the Commonwealth of Puerto Rico by the product of —
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      • (A) the percentage which the average per-pupil expenditure in the Commonwealth of Puerto Rico is of the lowest average per-pupil expenditure of any of the 50 States; and
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      • (B) 32 percent of the average per-pupil expenditure in the United States.
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    • (2) MINIMUM PERCENTAGE- The percentage in paragraph (1)(A) shall not be less than —
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      • (A) for fiscal year 2002, 77.5 percent;
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      • (B) for fiscal year 2003, 80.0 percent;
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      • (C) for fiscal year 2004, 82.5 percent; and
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      • (D) for fiscal year 2005 and succeeding fiscal years, 85.0 percent.
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    • (3) LIMITATION- If the application of paragraph (2) for any fiscal year would result in any of the 50 States or the District of Columbia receiving less under this part than it received under this part for the preceding fiscal year, then the percentage described in paragraph (1)(A) that is used for the Commonwealth of Puerto Rico for the fiscal year for which the determination is made shall be the greater of the percentage in paragraph (1)(A) for such fiscal year or the percentage used for the preceding fiscal year.
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    (c) RATABLE REDUCTIONS; REALLOCATIONS-
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    • (1) IN GENERAL- (A) If, after the Secretary reserves funds under section 1308(c), the amount appropriated to carry out this part for any fiscal year is insufficient to pay in full the amounts for which all States are eligible, the Secretary shall ratably reduce each such amount.
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    • (B) If additional funds become available for making such payments for any fiscal year, the Secretary shall allocate such funds to States in amounts that the Secretary determines will best carry out the purpose of this part.
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    • (2) SPECIAL RULE- (A) The Secretary shall further reduce the amount of any grant to a State under this part for any fiscal year if the Secretary determines, based on available information on the numbers and needs of migratory children in the State and the program proposed by the State to address such needs, that such amount exceeds the amount required under section 1304.
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    • (B) The Secretary shall reallocate such excess funds to other States whose grants under this part would otherwise be insufficient to provide an appropriate level of services to migratory children, in such amounts as the Secretary determines are appropriate.
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    (d) CONSORTIUM ARRANGEMENTS-
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    • (1) IN GENERAL- In the case of a State that receives a grant of $1,000,000 or less under this section, the Secretary shall consult with the State educational agency to determine whether consortium arrangements with another State or other appropriate entity would result in delivery of services in a more effective and efficient manner.
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    • (2) PROPOSALS- Any State, regardless of the amount of such States allocation, may submit a consortium arrangement to the Secretary for approval.
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    • (3) APPROVAL- The Secretary shall approve a consortium arrangement under paragraph (1) or (2) if the proposal demonstrates that the arrangement will —
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      • (A) reduce administrative costs or program function costs for State programs; and
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      • (B) make more funds available for direct services to add substantially to the welfare or educational attainment of children to be served under this part.
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    (e) DETERMINING NUMBERS OF ELIGIBLE CHILDREN- In order to determine the estimated number of migratory children residing in each State for purposes of this section, the Secretary shall —
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    • (1) use such information as the Secretary finds most accurately reflects the actual number of migratory children;
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    • (2) develop and implement a procedure for more accurately reflecting cost factors for different types of summer and intersession program designs;
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    • (3) adjust the full-time equivalent number of migratory children who reside in each State to take into account —
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      • (A) the special needs of those children participating in special programs provided under this part that operate during the summer and intersession periods; and
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      • (B) the additional costs of operating such programs; and
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    • (4) conduct an analysis of the options for adjusting the formula so as to better direct services to the child whose education has been interrupted.