H. R. 5—35
any requirement of subsection (a), including any policies and
procedures filed under this part as in effect before the effective
date of the Individuals with Disabilities Education Act Amend-
ments of 1997, the Secretary shall consider such State to have
met such requirement for purposes of receiving a grant under
this part.
‘‘(2) MODIFICATIONS MADE BY STATE.—Subject to paragraph
(3), an application submitted by a State in accordance with
this section shall remain in effect until the State submits
to the Secretary such modifications as the State deems
necessary. This section shall apply to a modification to an
application to the same extent and in the same manner as
this section applies to the original plan.
‘‘(3) MODIFICATIONS REQUIRED BY THE SECRETARY.—If, after
the effective date of the Individuals with Disabilities Education
Act Amendments of 1997, the provisions of this Act are
amended (or the regulations developed to carry out this Act
are amended), or there is a new interpretation of this Act
by a Federal court or a State’s highest court, or there is an
official finding of noncompliance with Federal law or
regulations, the Secretary may require a State to modify its
application only to the extent necessary to ensure the State’s
compliance with this part.
‘‘(d) APPROVAL BY THE SECRETARY.—
‘‘(1) IN GENERAL.—If the Secretary determines that a State
is eligible to receive a grant under this part, the Secretary
shall notify the State of that determination.
‘‘(2) NOTICE AND HEARING.—The Secretary shall not make
a final determination that a State is not eligible to receive
a grant under this part until after providing the State—
‘‘(A) with reasonable notice; and
‘‘(B) with an opportunity for a hearing.
‘‘(e) ASSISTANCE UNDER OTHER FEDERAL PROGRAMS.—Nothing
in this title permits a State to reduce medical and other assistance
available, or to alter eligibility, under titles V and XIX of the
Social Security Act with respect to the provision of a free appro-
priate public education for children with disabilities in the State.
‘‘(f ) BY-PASS FOR CHILDREN IN PRIVATE SCHOOLS.—
‘‘(1) IN GENERAL.—If, on the date of enactment of the Edu-
cation of the Handicapped Act Amendments of 1983, a State
educational agency is prohibited by law from providing for
the participation in special programs of children with disabil-
ities enrolled in private elementary and secondary schools as
required by subsection (a)(10)(A), the Secretary shall, notwith-
standing such provision of law, arrange for the provision of
services to such children through arrangements which shall
be subject to the requirements of such subsection.
‘‘(2) PAYMENTS.—
‘‘(A) DETERMINATION OF AMOUNTS.—If the Secretary
arranges for services pursuant to this subsection, the Sec-
retary, after consultation with the appropriate public and
private school officials, shall pay to the provider of such
services for a fiscal year an amount per child that does
not exceed the amount determined by dividing—
‘‘(i) the total amount received by the State under
this part for such fiscal year; by
H. R. 5—36
‘‘(ii) the number of children with disabilities served
in the prior year, as reported to the Secretary by
the State under section 618.
‘‘(B) WITHHOLDING
OF
CERTAIN
AMOUNTS.—Pending
final resolution of any investigation or complaint that could
result in a determination under this subsection, the Sec-
retary may withhold from the allocation of the affected
State educational agency the amount the Secretary esti-
mates would be necessary to pay the cost of services
described in subparagraph (A).
‘‘(C) PERIOD OF PAYMENTS.—The period under which
payments are made under subparagraph (A) shall continue
until the Secretary determines that there will no longer
be any failure or inability on the part of the State edu-
cational agency to meet the requirements of subsection
(a)(10)(A).
‘‘(3) NOTICE AND HEARING.—
‘‘(A) IN GENERAL.—The Secretary shall not take any
final action under this subsection until the State
educational agency affected by such action has had an
opportunity, for at least 45 days after receiving written
notice thereof, to submit written objections and to appear
before the Secretary or the Secretary’s designee to show
cause why such action should not be taken.
‘‘(B) REVIEW OF ACTION.—If a State educational agency
is dissatisfied with the Secretary’s final action after a
proceeding under subparagraph (A), such agency may, not
later than 60 days after notice of such action, file with
the United States court of appeals for the circuit in which
such State is located a petition for review of that action.
A copy of the petition shall be forthwith transmitted by
the clerk of the court to the Secretary. The Secretary there-
upon shall file in the court the record of the proceedings
on which the Secretary based the Secretary’s action, as
provided in section 2112 of title 28, United States Code.
‘‘(C) REVIEW OF FINDINGS OF FACT.—The findings of
fact by the Secretary, if supported by substantial evidence,
shall be conclusive, but the court, for good cause shown,
may remand the case to the Secretary to take further
evidence, and the Secretary may thereupon make new or
modified findings of fact and may modify the Secretary’s
previous action, and shall file in the court the record of
the further proceedings. Such new or modified findings
of fact shall likewise be conclusive if supported by substan-
tial evidence.
‘‘(D) JURISDICTION OF COURT OF APPEALS; REVIEW BY
UNITED STATES SUPREME COURT.—Upon the filing of a peti-
tion under subparagraph (B), the United States court of
appeals shall have jurisdiction to affirm the action of the
Secretary or to set it aside, in whole or in part. The judg-
ment of the court shall be subject to review by the Supreme
Court of the United States upon certiorari or certification
as provided in section 1254 of title 28, United States Code.
H. R. 5—37
‘‘SEC. 613. LOCAL EDUCATIONAL AGENCY ELIGIBILITY.
‘‘(a) IN GENERAL.—A local educational agency is eligible for
assistance under this part for a fiscal year if such agency dem-
onstrates to the satisfaction of the State educational agency that
it meets each of the following conditions:
‘‘(1) 
CONSISTENCY
WITH
STATE
POLICIES.—The 
local
educational agency, in providing for the education of children
with disabilities within its jurisdiction, has in effect policies,
procedures, and programs that are consistent with the State
policies and procedures established under section 612.
‘‘(2) USE OF AMOUNTS.—
‘‘(A) IN
GENERAL.—Amounts provided to the local
educational agency under this part shall be expended in
accordance with the applicable provisions of this part and—
‘‘(i) shall be used only to pay the excess costs
of providing special education and related services to
children with disabilities;
‘‘(ii) shall be used to supplement State, local, and
other Federal funds and not to supplant such funds;
and
‘‘(iii) shall not be used, except as provided in sub-
paragraphs (B) and (C), to reduce the level of expendi-
tures for the education of children with disabilities
made by the local educational agency from local funds
below the level of those expenditures for the preceding
fiscal year.
‘‘(B) EXCEPTION.—Notwithstanding the restriction in
subparagraph (A)(iii), a local educational agency may
reduce the level of expenditures where such reduction is
attributable to—
‘‘(i) the voluntary departure, by retirement or
otherwise, or departure for just cause, of special edu-
cation personnel;
‘‘(ii) a decrease in the enrollment of children with
disabilities;
‘‘(iii) the termination of the obligation of the
agency, consistent with this part, to provide a program
of special education to a particular child with a disabil-
ity that is an exceptionally costly program, as
determined by the State educational agency, because
the child—
‘‘(I) has left the jurisdiction of the agency;
‘‘(II) has reached the age at which the obliga-
tion of the agency to provide a free appropriate
public education to the child has terminated; or
‘‘(III) no longer needs such program of special
education; or
‘‘(iv) the termination of costly expenditures for
long-term purchases, such as the acquisition of equip-
ment or the construction of school facilities.
‘‘(C) TREATMENT OF FEDERAL FUNDS IN CERTAIN FISCAL
YEARS.—
‘‘(i) Notwithstanding clauses (ii) and (iii) of
subparagraph (A), for any fiscal year for which
amounts appropriated to carry out section 611 exceeds
$4,100,000,000, a local educational agency may treat
as local funds, for the purpose of such clauses, up
H. R. 5—38
to 20 percent of the amount of funds it receives under
this part that exceeds the amount it received under
this part for the previous fiscal year.
‘‘(ii) Notwithstanding clause (i), if a State edu-
cational agency determines that a local educational
agency is not meeting the requirements of this part,
the State educational agency may prohibit the local
educational agency from treating funds received under
this part as local funds under clause (i) for any fiscal
year, only if it is authorized to do so by the State
constitution or a State statute.
‘‘(D) SCHOOLWIDE
PROGRAMS
UNDER
TITLE
I
OF
THE
ESEA.—Notwithstanding subparagraph (A) or any other
provision of this part, a local educational agency may use
funds received under this part for any fiscal year to carry
out a schoolwide program under section 1114 of the
Elementary and Secondary Education Act of 1965, except
that the amount so used in any such program shall not
exceed—
‘‘(i) the number of children with disabilities partici-
pating in the schoolwide program; multiplied by
‘‘(ii)(I) the amount received by the local educational
agency 
under 
this 
part 
for 
that 
fiscal 
year;
divided by
‘‘(II) the number of children with disabilities in
the jurisdiction of that agency.
‘‘(3) PERSONNEL
DEVELOPMENT.—The local educational
agency—
‘‘(A) shall ensure that all personnel necessary to carry
out this part are appropriately and adequately prepared,
consistent with the requirements of section 653(c)(3)(D);
and
‘‘(B) to the extent such agency determines appropriate,
shall contribute to and use the comprehensive system of
personnel development of the State established under sec-
tion 612(a)(14).
‘‘(4) PERMISSIVE
USE
OF
FUNDS.—Notwithstanding para-
graph (2)(A) or section 612(a)(18)(B) (relating to commingled
funds), funds provided to the local educational agency under
this part may be used for the following activities:
‘‘(A) SERVICES
AND
AIDS
THAT
ALSO
BENEFIT
NON-
DISABLED
CHILDREN.—For the costs of special education
and related services and supplementary aids and services
provided in a regular class or other education-related set-
ting to a child with a disability in accordance with the
individualized education program of the child, even if one
or more nondisabled children benefit from such services.
‘‘(B) INTEGRATED
AND
COORDINATED
SERVICES
SYS-
TEM.—To develop and implement a fully integrated and
coordinated services system in accordance with subsection
(f ).
‘‘(5) TREATMENT
OF
CHARTER
SCHOOLS
AND
THEIR
STU-
DENTS.—In carrying out this part with respect to charter schools
that are public schools of the local educational agency, the
local educational agency—