‘‘(i) for support and direct services,
including technical assistance and person-
nel development and training;
‘‘(ii) for administrative costs of mon-
itoring and complaint investigation, but
only to the extent that such costs exceed
the costs incurred for those activities dur-
ing fiscal year 1985;
‘‘(iii) to establish and implement the
mediation process required by section
615(d);
‘‘(iv) to assist local educational agen-
cies in meeting personnel shortages;
‘‘(v) to develop a State improvement
plan under part D;
‘‘(vi) for activities at the State and
local levels to meet the performance goals
established by the State under section
612(a)(14) and to support implementation
of the State improvement plan under part
D if the State receives funds under that
part; or
‘‘(vii) to supplement other amounts
used to develop and implement a Statewide
coordinated services system designed to im-
prove results for children and families, in-
cluding children with disabilities and their
families, but not to exceed one percent of
the amount received by the State under
this section (such system shall be coordi-
nated with and, to the extent appropriate,
build on the system of coordinated services
developed by the State under part C).
‘‘(D) ADDITIONAL AMOUNTS.—Subject to
the approval of the Secretary, a State may re-
serve up to an additional 15 percent of the
amount allotted to the State under paragraph
(1) or (3) of subsection (b) for a fiscal year for
the purpose of carrying out clause (i), (ii), (iii),
or (iv) of subparagraph (C).
‘‘(2) SUBGRANTS
TO
LOCAL
EDUCATIONAL
AGENCIES AND CERTAIN STATE AGENCIES.—
‘‘(A) IN GENERAL.—The State shall pro-
vide at least 90 percent of the amount received
under a grant for a fiscal year to local edu-
cational agencies in the State that have estab-
lished their eligibility under section 613, and to
State agencies that received funds under section
614A(a) (as such section was in effect on the
day before the date of the enactment of the
IDEA Improvement Act of 1996) for fiscal year
1996 and have established their eligibility under
section 613, for use in accordance with this
part.
‘‘(B) METHODS
OF
DISTRIBUTION.—A
State may provide amounts under subpara-
graph (A) to local educational agencies and
State agencies described under such subpara-
graph on the basis of—
‘‘(i) school-age population;
‘‘(ii) school enrollment;
‘‘(iii) numbers of children with disabil-
ities receiving a free appropriate public
education;
‘‘(iv) allocations for previous fiscal
years;
‘‘(v) any two or more of the factors
described in clauses (i) through (iv); or
‘‘(vi) poverty, in combination with one
or more of the factors described in clauses
(i) through (iv).
‘‘(C) FORMER
CHAPTER
STATE
AGEN-
CIES.—
‘‘(i) IN GENERAL.—To the extent nec-
essary for each of the fiscal years 1997,
1998, and 1999, the State shall use
amounts that are available under para-
graph (1)(A) to ensure that each State
agency that received amounts in fiscal year
1994 under subpart 2 of part D of chapter
1 of title I of the Elementary and Second-
ary Education Act of 1965 (as such sub-
part was in effect on the day before the
date of the enactment of the Improving
America’s Schools Act of 1994) receives,
from the combination of funds under para-
graph (1)(A) and funds provided under
subparagraph (A), an amount equal to—
‘‘(I) the number of children with
disabilities, aged 6 to 21, inclusive, to
whom the agency was providing spe-
cial education and related services on
December 1 of the fiscal year for
which the funds were appropriated,
subject to the methods of distribution
under subparagraph (B); multiplied
by
‘‘(II) the per-child amount pro-
vided under such subpart for fiscal
year 1994.
‘‘(ii) 
ADDITIONAL
USE
OF
AMOUNTS.—The State may use amounts
described in clause (i) to ensure that each
local educational agency that received fis-
cal year 1994 funds under that subpart for
children who had transferred from a State-
operated or State-supported school or pro-
gram assisted under that subpart receives,
from the combination of funds available
under paragraph (1)(A) and funds pro-
vided under subparagraph (A), an amount
for each such child, aged 3 to 21, inclusive,
to whom the agency was providing special
education and related services on Decem-
ber 1 of the fiscal year for which the funds
were appropriated, equal to the per-child
amount the agency received under that
subpart for fiscal year 1994.
‘‘(iii) DETERMINATION
OF
NUMBER
OF
CHILDREN.—The number of children
counted under clause (i)(I) shall not exceed
the number of children aged 3 to 21, inclu-
sive, 
for 
whom 
the 
agency 
received
amounts in fiscal year 1994 under subpart
2 of part D of chapter 1 of title I of the
Elementary and Secondary Education Act
of 1965 (as such subpart was in effect on
the day before the date of the enactment
of the Improving America’s Schools Act of
1994).
‘‘(D) REALLOCATION OF AMOUNTS.—If a
State educational agency determines that a
local educational agency is adequately providing
a free appropriate public education to all chil-
dren with disabilities residing in the area served
by that agency with State and local funds, the
State educational agency may reallocate any
portion of amounts received under a grant
under this part that are not needed by that
local agency to other local educational agencies
in the State that are not adequately providing
special education and related services to all chil-
dren with disabilities residing in the areas they
serve.
‘‘(d) USE OF AMOUNTS BY SECRETARY OF THE IN-
TERIOR.—
‘‘(1) PROVISION
OF
AMOUNTS
FOR
ASSIST-
ANCE.—
‘‘(A) IN GENERAL.—The Secretary of Edu-
cation shall provide amounts to the Secretary of