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``SEC. 1422. PROGRAMS OPERATED BY LOCAL EDUCATIONAL AGENCIES.
- ``(a) Local Subgrants.--With funds retained made available under section 1402(b), the State educational agency shall award subgrants to local educational agencies with high numbers or percentages of youth residing in locally operated (including county operated) correctional facilities for youth (including facilities involved in day programs).
- ``(b) Special Rule.--A local educational agency which includes a correctional facility that operates a school is not required to operate a dropout prevention program if more than 30 percent of the youth attending such facility will reside outside the boundaries of the local educational agency upon leaving such facility.
- ``(c) Notification.--A State educational agency shall notify local educational agencies within the State of the eligibility of such agencies to receive a subgrant under this subpart.
Subpart 2--Local Agency Programs
SEC. 1423. LOCAL EDUCATIONAL AGENCY APPLICATIONS.