ment under circumstances described in section 
8003 (b)(2)(B)(ii).’’; and 
(C) by striking paragraph (3) and insert-
ing the following: 
‘‘(3) AMOUNT OF PAYMENTS.— 
‘‘(A) LOCAL EDUCATIONAL AGENCIES IM-
PACTED
BY
MILITARY
DEPENDENT
CHIL-
DREN.—The amount of a payment to each local 
educational agency described in this subsection 
that is impacted by military dependent children 
for fiscal year shall be equal to— 
‘‘(i)(I) 40 percent of the amount ap-
propriated under section 8014(e) for such 
fiscal year; divided by 
‘‘(II) the number of children described 
in subparagraphs (B) and (D)(i) of section 
8003(a)(1) who were in average daily at-
tendance for all local educational agencies 
described in paragraph (2), including the 
number of children attending a school fa-
cility described in section 8008(a) if the 
Secretary does not provide assistance for 
the school facility under that section for 
the fiscal year; multiplied by 
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‘‘(ii) the number of children deter-
mined for such agency; 
‘‘(I) but not less than $25,000, 
except that this subparagraph shall 
not apply if the amount available to 
carry out paragraph (1) for such fis-
cal year is less than $32,000,000; and 
‘‘(II) not more than $3,000,000. 
‘‘(B) LOCAL EDUCATIONAL AGENCIES IM-
PACTED BY CHILDREN WHO RESIDE ON INDIAN 
LANDS.—The amount of a payment to each 
local educational agency described in this sub-
section that is impacted by children who reside 
on Indian lands for a fiscal year shall be equal 
to— 
‘‘(i)(I) 40 percent of the amount ap-
propriated under section 8014(e) for such 
fiscal year divided by 
‘‘(II) the number of children described 
in section 8003(a)(1)(C) who were in aver-
age daily attendance for all local edu-
cational agencies described in paragraph 
(2); multiplied by— 
‘‘(ii) the number of children deter-
mined for such agency; 
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‘‘(I) but not less than $25,000, 
except that this subparagraph shall 
not apply if the amount available to 
carry out paragraph (1) for such fis-
cal year is less than $32,000,000 and 
‘‘(II) 
not 
more 
than 
$3,000,000.’’; and 
(2) in subsection (b)— 
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by striking ‘‘60 per-
cent’’ and inserting ‘‘20 percent’’; 
(B) in paragraph (3)(A), in the matter 
preceding clause (i), by inserting after ‘‘an 
emergency grant under paragraph (2)(A)’’ the 
following: ‘‘if the agency is covered by para-
graph (7), or’’; 
(C) in paragraph (3)(C)(i)(I) by striking 
‘‘the agency meets at least one’’ and all that 
follows through the period at the end and in-
serting ‘‘the number of children determined 
under section 8003(a)(1)(C) for the agency for 
the preceding school year constituted at least 
40 percent of the total student enrollment in 
the schools of the agency during the preceding 
school year.’’; 
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(D) by striking paragraph (3)(D)(ii)(II) 
and inserting the following: 
‘‘(II) The number of children de-
termined under section 8003(a)(1)(C) 
for the school for the preceding school 
year constituted at least 40 percent of 
the total student enrollment in the 
school during the preceding school 
year.’’; 
(E) in paragraph (4)(C) by striking ‘‘(A), 
(B), (C), and (D)’’ and inserting ‘‘(A) and 
(C)’’; 
(F) by redesignating paragraph (7) as 
paragraph (8); and 
(G) by inserting after paragraph (6) the 
following: 
‘‘(7) SPECIAL
RULE.—Notwithstanding para-
graphs (3)(C)(i)(I) and (3)(D)(ii)(II), a local edu-
cational agency is eligible to receive a grant under 
this subsection not to exceed $3,000,000 in any one 
fiscal year if such agency— 
‘‘(A) was eligible to receive a payment 
under section 8003 for the fiscal year prior to 
the year for which the application is made; and 
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‘‘(B) has had an overall increase in enroll-
ment— 
‘‘(i) during the period between the end 
of the school year preceding the fiscal year 
for which the application is made and the 
beginning of the school year immediately 
preceding that school year; 
‘‘(ii) of not less than 250 students or 
10 percent (whichever is lower), are chil-
dren described in— 
‘‘(I) subparagraph (A), (B), (C), 
or (D) of section 8003(a) (1); or 
‘‘(II) subparagraph (F) or (G) of 
section 8003(a) (1), but only to the 
extent such children are civilian de-
pendents of employees of the Depart-
ment of Defense; and 
‘‘(iii) that is the direct result of one or 
more of the following: 
‘‘(I) Base realignment and clo-
sure or global rebasing, as determined 
by the Secretary of Defense. 
‘‘(II) Force structure changes or 
force reductions. 
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‘‘(III) An action initiated by the 
Secretary of Interior or other Federal 
agency.’’. 
SEC. 5. STATE CONSIDERATION OF PAYMENTS IN PRO-
VIDING STATE AID. 
Section 8009 of that Act (20 U.S.C. 7709) is amend-
ed— 
(1) in subsection (b)(1) by inserting before the 
period at the end the following: ‘‘and for which the 
average per pupil expenditure is equal to or greater 
than the average per pupil expenditure of all the 
States in the third fiscal year preceding the fiscal 
year for which the State is applying for equalization 
under the section’’; 
(2) in subsection (b)(2) by striking subpara-
graphs (A) and (B) and inserting the following: 
‘‘(A) STATES CURRENTLY QUALIFYING.— 
‘‘(i) IN
GENERAL.—For purposes of 
paragraph (1), a program of State aid for 
any State qualifying under this section in 
fiscal year 2006 equalizes expenditures 
among local educational agencies if, in the 
second fiscal year preceding the fiscal year 
for which the determination is made the 
amount of per-pupil expenditures made by, 
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