‘‘(III) has a per-pupil expendi-
ture that is less than— 
‘‘(aa) for a local educational 
agency that has a total student 
enrollment of 350 or more stu-
dents, 120 percent of the average 
per-pupil 
expenditure 
of 
the 
State in which the agency is lo-
cated; or 
‘‘(bb) for a local educational 
agency that has a total student 
enrollment of less than 350 stu-
dents— 
‘‘(AA) 120 percent of 
the average per-pupil ex-
penditure of the State in 
which the agency is located; 
or 
‘‘(BB) the average per- 
pupil expenditure of three 
comparable local educational 
agencies in the State in 
which the agency is located; 
‘‘(IV) has a tax rate for general 
fund purposes that is at least 95 per-
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cent of the average tax rate for gen-
eral fund purposes of comparable local 
educational agencies in the State; and 
‘‘(V) for a local educational agen-
cy that has an enrollment of children 
described in subsection (a)(1) that 
constitutes a percentage of the total 
student enrollment of the agency 
which is not less than 30 percent, and 
has a tax rate for general fund pur-
poses which is not less than 125 per-
cent of the average tax rate for gen-
eral fund purposes for comparable 
local educational agencies in the 
State.’’; 
(iii) by adding at the end the fol-
lowing: 
‘‘(iv) 
SPECIAL
RULE.—Notwith-
standing clause (i)(II), a local educational 
agency shall be considered eligible to re-
ceive a basic support payment under sub-
paragraph (A) with respect to the number 
of children determined under subsection 
(a)(1) if the agency— 
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‘‘(I) has an enrollment of chil-
dren described in subsection (a)(1) 
that constitutes a percentage of the 
total student enrollment of the agency 
that is not less than 35 percent in-
cluding for purposes of determining 
eligibility those children described in 
subparagraph (F) and (G) of sub-
section (a)(1); and 
‘‘(II) was eligible to receive as-
sistance under subsection (b)(2) of 
section 8003 in fiscal year 2001.’’; 
(B) by striking subparagraphs (C), (D), 
and (E); 
(C) by inserting after subparagraph (B) 
the following: 
‘‘(C) MAXIMUM AMOUNT FOR HEAVILY IM-
PACTED LOCAL EDUCATIONAL AGENCIES.— 
‘‘(i) IN
GENERAL.—The maximum 
amount that a heavily impacted local edu-
cational agency is eligible to receive under 
this paragraph for any fiscal year is the 
sum of the total weighted student units, as 
computed under subsection (a)(2) and sub-
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ject to clause (ii), multiplied by the greater 
of— 
‘‘(I) four-fifths of the aver-
age per-pupil expenditure of the 
State in which the local edu-
cational agency is located for the 
third fiscal year preceding the 
fiscal year for which the deter-
mination is made; or 
‘‘(II) four-fifths of the aver-
age per-pupil expenditure of all 
of the States for the third fiscal 
year preceding the fiscal year for 
which the determination is made. 
‘‘(ii) SPECIAL RULE.—(I)(aa) For a 
local educational agency with respect to 
which 35 percent or more of the total stu-
dent enrollment of the schools of the agen-
cy are children described in subparagraph 
(D) or (E) (or a combination thereof) of 
subsection (a)(1), and has an enrollment of 
children described in subparagraph (A), 
(B), or (C) of such subsection equal to at 
least 10 percent of the agency’s total en-
rollment, the Secretary shall calculate the 
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weighted student units of those children 
described in subparagraph (D) or (E) of 
such subsection by multiplying the number 
of such children by a factor of 0.55. 
‘‘(bb) For any local educational agen-
cy that received a payment under this 
clause in fiscal year 2006 the local edu-
cational agency shall not be required to 
have an enrollment of children described in 
subparagraphs (A), (B), or (C) of such 
subsection equal to at least 10 percent of 
the agency’s total enrollment. 
‘‘(II) For a local educational agency 
that has an enrollment of 100 or fewer 
children described in subsection (a)(1), the 
Secretary shall calculate the total number 
of weighted student units for purposes of 
subsection (a)(2) by multiplying the num-
ber of such children by a factor of 1.75. 
‘‘(III) For a local educational agency 
that does not qualify under (B)(i)(I) of 
this subsection and has an enrollment of 
more than 100 but not more than 1000 
children described in subsection (a)(1), the 
Secretary shall calculate the total number 
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of weighted student units for purposes of 
subsection (a)(2) by multiplying the num-
ber of such children by a factor of 1.25.’’; 
(D) by redesignating subparagraph (F) as 
(D) and, in that subparagraph— 
(i) by striking clause (ii); 
(ii) by striking ‘‘; and’’ at the end of 
clause (i) and inserting a period; and 
(iii) by striking ‘‘the Secretary—’’ and 
all that follows through ‘‘shall use’’ and in-
serting ‘‘the Secretary shall use’’; 
(E) by redesignating subparagraph (G) as 
(E) and, in that subparagraph, in the matter 
preceding clause (i), by striking ‘‘(C)(i)(II)(bb)’’ 
and inserting ‘‘(B)(i)(II)(bb)’’; 
(F) by redesignating subparagraph (H) as 
(F) and, in that subparagraph— 
(i) in clause (i)— 
(I) by striking ‘‘(B), (C), (D), or 
(E),’’ and inserting ‘‘(B) or (C),’’; 
(II) by striking ‘‘by reason of’’ 
and inserting ‘‘due to’’; 
(III) by inserting after ‘‘clause 
(iii),’’ the following: ‘‘or as the direct 
result of base realignment and closure 
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