determined under clause (v) with respect
to such indicator.
‘‘(vii) SPECIAL
RULES
FOR
LEAS
SERVING ONLY ELEMENTARY SCHOOL STU-
DENTS.—In the case of a local educational
agency that does not provide secondary
education (as determined under State law),
at the option of the State—
‘‘(I) the maximum funding pro-
portion described in clause (iii) shall
be 2.5 percent in lieu of 1 percent,
and the local educational agency may
receive a dollar amount credit under
this subparagraph with respect to per-
formance only on the outcome indica-
tors described in subclauses (I) and
(II) of subparagraph (B)(i); or
‘‘(III) the maximum funding pro-
portion described in clause (iii) shall
be 1 2⁄3 percent in lieu of 1 percent,
and the local educational agency may
receive a dollar amount credit under
this subparagraph with respect to per-
formance only on the outcome indica-
tors described in subclauses (I) and
(II) of subparagraph (B)(i) and an
additional 
outcome 
indicator 
that
measures the differences between chil-
dren with disabilities receiving special
education and related services under
this part (other than under section
619) from the agency, and other chil-
dren served by the agency, with re-
spect 
to 
grade-to-grade 
retention
rates.
‘‘(viii) LEA
REPORTS
TO
STATES.—
Each local educational agency annually
shall submit to the State a report, at such
time and in such manner as the State shall
specify, containing the data, measure-
ments, and calculations of the agency pur-
suant to subparagraph (B) and this sub-
paragraph.
‘‘(D) BONUS PAYMENTS TO STATES.—
‘‘(i) 
STATE
REPORTS
TO
SEC-
RETARY.—Each State annually shall sub-
mit to the Secretary a report, at such time
and in such manner as the Secretary shall
specify, containing the data, measure-
ments, and calculations of each local edu-
cational agency in the State pursuant to
subparagraphs (B) and (C).
‘‘(ii) 
CALCULATION
OF
PAYMENT
AMOUNT.—Subject to clauses (iii) and (iv),
each State shall receive a bonus payment
for a fiscal year equal to—
‘‘(I) the sum of all dollar amount
credits determined under subpara-
graph (C) for such year for all local
educational agencies in the State; plus
‘‘(II) the bonus payment received
by the State for the preceding fiscal
year.
‘‘(iii) LIMITATION.—In no case may a
State receive a bonus payment under this
paragraph for a fiscal year that would
cause the State to receive an amount
under this section for the year that exceeds
the maximum amount described in sub-
section (a)(2). The Secretary shall reduce
the bonus payment to such a State until
the State receives an amount under this
section that equals such maximum amount.
‘‘(iv) REDETERMINATIONS.—In any
case in which a local educational agency
has made an error, has used data improp-
erly, or has used data that are not satis-
factory, Secretary shall redetermine any
determination made by such agency under
this paragraph.
‘‘(E) REPORTS TO CONGRESS.—The Sec-
retary shall submit to the Congress an annual
report describing—
‘‘(i) the most recent bonus payments
made to States under this paragraph; and
‘‘(ii) the data, measurements, and cal-
culations that were the basis for such pay-
ments.’’.
SEC. 4. MODIFICATIONS TO FUNDING FOR PRESCHOOL
GRANTS.
Section 619(j) of the Individuals with Disabilities
Education Act (20 U.S.C. 1419(j)) is amended to read
as follows:
‘‘(j) FUNDING.—
‘‘(1) IN
GENERAL.—For the purpose of car-
rying out this section, there is authorized to be ap-
propriated, and there is appropriated, for each fiscal
year after fiscal year 2002, the amount determined
under paragraph (2) for such year.