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SEC. 2412. USE OF ALLOTMENT BY STATE.

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(a) IN GENERAL- Of the amount provided to a State educational agency (from the agencys allotment under section 2411(a)(2)) for a fiscal year—

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(1) the State educational agency may use not more than 5 percent to carry out activities under section 2415; and

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(2) the State educational agency shall distribute the remainder as follows:

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(A) From 50 percent of the remainder, the State educational agency shall award subgrants by allocating to each eligible local educational agency that has submitted an application to the State educational agency under section 2414, for the activities described in section 2416, an amount that bears the same relationship to 50 percent of the remainder for such year as the amount received under part A of title I for such year by such local educational agency bears to the amount received under such part for such year by all local educational agencies within the State.

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(B) From 50 percent of the remainder and subject to subsection (b), the State educational agency shall award subgrants, through a State-determined competitive process, to eligible local entities that have submitted applications to the State educational agency under section 2414, for the activities described in section 2416.

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(b) SUFFICIENT AMOUNTS-

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(1) SPECIAL RULE- In awarding a subgrant under subsection (a)(2)(B), the State educational agency shall—

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(A) determine the local educational agencies that—

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(i) received allocations under subsection (a)(2)(A) that are not of sufficient size to be effective, consistent with the purposes of this part; and

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(ii) are eligible local entities;

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(B) give priority to applications submitted by eligible local educational agencies described in subparagraph (A); and

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(C) determine the minimum amount for awards under subsection (a)(2)(B) to ensure that subgrants awarded under that subsection are of sufficient size to be effective.

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(2) SUFFICIENCY- In awarding subgrants under subsection (a)(2)(B), each State educational agency shall ensure that each subgrant is of sufficient size and duration, and that the program funded by the subgrant is of sufficient scope and quality, to carry out the purposes of this part effectively.

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(3) DISTRIBUTION- In awarding subgrants under subsection (a)(2)(B), each State educational agency shall ensure an equitable distribution of assistance under this subpart among urban and rural areas of the State, according to the demonstrated need of those local educational agencies serving the areas.

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(c) FISCAL AGENT- If an eligible local partnership receives a subgrant under subsection (a)(2)(B), a local educational agency in the partnership shall serve as the fiscal agent for the partnership.
(d) TECHNICAL ASSISTANCE- Each State educational agency receiving a grant under section 2411(a) shall—

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(1) identify the local educational agencies served by the State educational agency that—

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(A) have the highest numbers or percentages of children from families with incomes below the poverty line; and

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(B) demonstrate to such State educational agency the greatest need for technical assistance in developing an application under section 2414; and

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(2) offer the technical assistance described in paragraph (1)(B) to those local educational agencies.