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SEC. 1604. STATE USE OF FUNDS.

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    (a) IN GENERAL- Except as provided in subsection (e), a State educational agency that receives a grant under this part shall use the grant funds to award subgrants, on a competitive basis, to local educational agencies or consortia of local educational agencies in the State that receive funds under part A, to support comprehensive school reforms in schools that are eligible for funds under part A.
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    (b) SUBGRANT REQUIREMENTS- A subgrant to a local educational agency or consortium shall be —
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    • (1) of sufficient size and scope to support the initial costs of comprehensive school reforms selected or designed by each school identified in the application of the local educational agency or consortium;
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    • (2) in an amount not less than $50,000 —
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;

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      • (A) for each participating school; or
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      • (B) for each participating consortium of small schools (which for purposes of this subparagraph means a consortium of small schools serving a total of not more than 500 students); and
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    • (3) renewable for two additional 1-year subgrant periods after the initial 1-year subgrant is made if the school is or the schools are making substantial progress in the implementation of reforms.
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    (c) PRIORITY- A State educational agency, in awarding subgrants under this part, shall give priority to local educational agencies or consortia that —
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    • (1) plan to use the funds in schools identified as being in need of improvement or corrective action under section 1116(c); and
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;

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    • (2) demonstrate a commitment to assist schools with budget allocation, professional development, and other strategies necessary to ensure the comprehensive school reforms are properly implemented and are sustained in the future.
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    (d) GRANT CONSIDERATION- In awarding subgrants under this part, the State educational agency shall take into consideration the equitable distribution of subgrants to different geographic regions within the State, including urban and rural areas, and to schools serving elementary and secondary students.
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    (e) ADMINISTRATIVE COSTS- A State educational agency that receives a grant under this part may reserve not more than 5 percent of the grant funds for administrative, evaluation, and technical assistance expenses.
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    (f) SUPPLEMENT- Funds made available under this part shall be used to supplement, and not supplant, any other Federal, State, or local funds that would otherwise be available to carry out the activities assisted under this part.
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    (g) REPORTING- Each State educational agency that receives a grant under this part shall provide to the Secretary such information as the Secretary may require, including the names of local educational agencies and schools receiving assistance under this part, the amount of the assistance, a description of the comprehensive school reforms selected and used, and a copy of the States annual evaluation of the implementation of comprehensive school reforms supported under this part and the student achievement results.