20 U.S. Code § 6337 - Education finance incentive grant program
Except as provided in subparagraph (B), the effort factor for a State shall be determined in accordance with the succeeding sentence, except that such factor shall not be less than 0.95 nor greater than 1.05. The effort factor determined under this sentence shall be a fraction the numerator of which is the product of the 3-year average per-pupil expenditure in the State multiplied by the 3-year average per capita income in the United States and the denominator of which is the product of the 3-year average per capita income in such State multiplied by the 3-year average per-pupil expenditure in the United States.
The effort factor for the Commonwealth of Puerto Rico shall be equal to the lowest effort factor calculated under subparagraph (A) for any State.
Except as provided in subparagraph (B), the Secretary shall determine the equity factor under this section for each State in accordance with clause (ii).
In computing coefficients of variation, the Secretary shall include only those local educational agencies with an enrollment of more than 200 students.
The equity factor for a State that meets the disparity standard described in section 222.162 of title 34, Code of Federal Regulations (as such section was in effect on the day preceding January 8, 2002) or a State with only one local educational agency shall be not greater than 0.10.
A State is entitled to receive its full allotment of funds under this section for any fiscal year if the Secretary finds that the State’s fiscal effort per student or the aggregate expenditures of the State with respect to the provision of free public education by the State for the preceding fiscal year was not less than 90 percent of the fiscal effort or aggregate expenditures for the second preceding fiscal year, subject to the requirements of paragraph (2).
The Secretary shall reduce the amount of the allotment of funds under this section for any fiscal year in the exact proportion by which a State fails to meet the requirement of paragraph (1) by falling below 90 percent of both the fiscal effort per student and aggregate expenditures (using the measure most favorable to the State), if such State has also failed to meet such requirement (as determined using the measure most favorable to the State) for 1 or more of the 5 immediately preceding fiscal years.
No such lesser amount shall be used for computing the effort required under paragraph (1) for subsequent years.
If the sums available under this section for any fiscal year are insufficient to pay the full amounts that all local educational agencies in States are eligible to receive to carry out this section for such year, the Secretary shall ratably reduce the allocations to such local educational agencies, subject to paragraphs (2) and (3).
Notwithstanding any other provision of law, the Secretary shall not take into consideration the hold-harmless provisions of this subsection for any fiscal year for purposes of calculating State or local allocations for the fiscal year under any program administered by the Secretary other than a program authorized under this part.
 So in original. This subsec. does not contain a par. (3).
A prior section 6337, Pub. L. 89–10, title I, § 1126, as added Pub. L. 103–382, title I, § 101, Oct. 20, 1994, 108 Stat. 3577, related to special allocation procedures, prior to the general amendment of this subchapter by Pub. L. 107–110. See section 6338 of this title.
Subsec. (b)(1)(A). Pub. L. 114–95, § 1017(2)(A), substituted “funds made available for any fiscal year to carry out this section” for “funds appropriated pursuant to subsection (f) of this section” in introductory provisions.
Subsec. (c). Pub. L. 114–95, § 1017(3), redesignated pars. (A) and (B) as (1) and (2), respectively.
Subsec. (d)(1)(A)(ii). Pub. L. 114–95, § 1017(4), struck out opening quotation marks before “(i)” in introductory provisions.
Subsec. (e). Pub. L. 114–95, § 1017(5), added subsec. (e) and struck out former subsec. (e) which related to general rule for full allotment of funds, reduction of funds in any fiscal year where State fails to meet requirements, and equitable waiver of requirements for 1 fiscal year only.
Subsec. (f). Pub. L. 114–95, § 1017(6), (7), redesignated subsec. (g) as (f) and struck out former subsec. (f). Prior to amendment, text of subsec. (f) read as follows: “There are authorized to be appropriated to carry out this section such sums as may be necessary for fiscal year 2002 and for each of the 5 succeeding fiscal years.”
Subsec. (f)(1). Pub. L. 114–95, § 1017(8)(A), substituted “to carry out this section” for “under this section”.
Subsec. (f)(3). Pub. L. 114–95, § 1017(8)(B), substituted “shall be—” for “shall be” in introductory provisions.
Subsec. (g). Pub. L. 114–95, § 1017(7), redesignated subsec. (g) as (f).
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