‘‘(B) LIMITATION.—In this subsection, the 
term ‘applicable funding’ does not include funds 
provided under any of the provisions listed in 
subparagraph (A) that local educational agencies 
are required by this Act— 
‘‘(i) to reserve, allocate, or spend for 
required activities; 
‘‘(ii) to allocate, allot, or award to en-
tities eligible to receive such funds; or 
‘‘(iii) to use for technical assistance or 
monitoring. 
‘‘(4) DISBURSEMENT.—Each State educational 
agency that receives applicable funding for a fiscal 
year shall disburse the applicable funding to local 
educational agencies for alternative uses under para-
graph (1) for the fiscal year at the same time as the 
State educational agency disburses the applicable 
funding to local educational agencies that do not in-
tend to use the applicable funding for such alternative 
uses for the fiscal year. 
‘‘(c) RULE
FOR ADMINISTRATIVE COSTS.—A State 
educational agency or a local educational agency shall only 
use applicable funding (as defined in subsection (a)(3) or 
(b)(3), respectively) for administrative costs incurred in 
carrying out a provision listed in subsection (a)(1) or 
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(b)(1), respectively, to the extent that the agency, in the ab-
sence of this section, could have used funds for administra-
tive costs with respect to a program listed in subsection 
(a)(3) or (b)(3), respectively. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to relieve a State educational agency 
or local educational agency of any requirements relating 
to— 
‘‘(1) use of Federal funds to supplement, not sup-
plant, non-Federal funds; 
‘‘(2) comparability of services; 
‘‘(3) equitable participation of private school stu-
dents and teachers; 
‘‘(4) applicable civil rights requirements; 
‘‘(5) section 1113; or 
‘‘(6) section 1111.’’. 
SEC. 104. SCHOOL IMPROVEMENT. 
Section 1003 (20 U.S.C. 6303) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘2 percent’’ and inserting 
‘‘7 percent’’; and 
(B) by striking ‘‘subpart 2 of part A’’ and 
all that follows through ‘‘sections 1116 and 
1117,’’ and inserting ‘‘chapter B of subpart 1 of 
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part A for each fiscal year to carry out sub-
section (b),’’; 
(2) in subsection (b)(1), by striking ‘‘for schools 
identified for school improvement, corrective action, 
and restructuring, for activities under section 
1116(b)’’ and inserting ‘‘to carry out the State’s sys-
tem 
of 
school 
improvement 
under 
section 
1111(b)(3)(B)(iii)’’; 
(3) in subsection (c)— 
(A) in paragraph (1), by inserting ‘‘and’’ at 
the end; 
(B) in paragraph (2), by striking ‘‘need for 
such funds; and’’ and inserting ‘‘commitment to 
using such funds to improve such schools.’’; and 
(C) by striking paragraph (3); 
(4) in subsection (d)(1), by striking ‘‘subpart 2 
of part A;’’ and inserting ‘‘chapter B of subpart 1 of 
part A;’’; 
(5) in subsection (e)— 
(A) by striking ‘‘in any fiscal year’’ and in-
serting ‘‘in fiscal year 2014 and each subsequent 
fiscal year’’; 
(B) by striking ‘‘subpart 2’’ and inserting 
‘‘chapter B of subpart 1 of part A’’; and 
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(C) by striking ‘‘such subpart’’ and insert-
ing ‘‘such chapter’’; 
(6) in subsection (f), by striking ‘‘and the per-
centage of students from each school from families 
with incomes below the poverty line’’; and 
(7) by striking subsection (g). 
SEC. 105. DIRECT STUDENT SERVICES. 
The Act (20 U.S.C. 6301 et seq.) is amended by insert-
ing after section 1003 the following: 
‘‘SEC. 1003A. DIRECT STUDENT SERVICES. 
‘‘(a) STATE RESERVATION.—Each State shall reserve 
3 percent of the amount the State receives under chapter 
B of subpart 1 of part A for each fiscal year to carry out 
this section. Of such reserved funds, the State educational 
agency may use up to 1 percent to administer direct student 
services. 
‘‘(b) DIRECT STUDENT SERVICES.—From the amount 
available after the application of subsection (a), each State 
shall award grants in accordance with this section to local 
educational agencies to support direct student services. 
‘‘(c) AWARDS.—The State educational agency shall 
award grants to geographically diverse local educational 
agencies including suburban, rural, and urban local edu-
cational agencies. If there are not enough funds to award 
all applicants in a sufficient size and scope to run an effec-
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tive direct student services program, the State shall 
prioritize awards to local educational agencies with the 
greatest number of low-performing schools. 
‘‘(d) LOCAL USE
OF FUNDS.—A local educational 
agency receiving an award under this section— 
‘‘(1) shall use up to 1 percent of each award for 
outreach and communication to parents about their 
options and to register students for direct student 
services; 
‘‘(2) may use not more than 2 percent of each 
award for administrative costs related to direct stu-
dent services; and 
‘‘(3) shall use the remainder of the award to pay 
the transportation required to provide public school 
choice or the hourly rate for high-quality academic 
tutoring services, as determined in the provider ap-
proval process under subsection (f)(2). 
‘‘(e) APPLICATION.—A local educational agency desir-
ing to receive an award under subsection (b) shall submit 
an application describing how the local educational agency 
will— 
‘‘(1) provide adequate outreach to ensure parents 
can exercise a meaningful choice of direct student 
services for their child’s education; 
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‘‘(2) ensure parents have adequate time and in-
formation to make a meaningful choice prior to en-
rolling their child in a direct student service; 
‘‘(3) ensure ample availability in the public 
schools the local educational agency will make avail-
able for public school choice options; 
‘‘(4) determine the requirements or criteria for 
student eligibility for direct student services; 
‘‘(5) select a variety of providers of high quality 
academic tutoring from the list required under sub-
section (f)(2) and ensure fair negotiations in selecting 
such providers of high-quality academic tutoring, in-
cluding online, on campus, and other models of tutor-
ing which provide meaningful choices to parents to 
find the best service for their child; and 
‘‘(6) develop an estimated per pupil expenditure 
available for eligible students to use toward high qual-
ity academic tutoring which shall allow for adequate 
level of services to increase academic achievement 
from a variety of high-quality academic tutoring pro-
viders. 
‘‘(f) PROVIDERS AND SCHOOLS.—The State— 
‘‘(1) shall ensure that each local educational 
agency receiving an award to provide public school 
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