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``SEC. 5303. GRANTS TO LOCAL EDUCATIONAL AGENCIES.
- ``(a) Allotment to Categories of Local Educational Agencies.--From the amount appropriated under section 5308 for any fiscal year, the Secretary shall first reserve not more than $2,000,000 for the purposes of evaluating programs carried out with assistance under this part in accordance with section 14701. From the remaining amount, the Secretary shall allot the following percentages to each of the following categories of local educational agencies:
- ``(1) Local educational agencies administering schools with a total enrollment of 100,000 or more elementary and secondary school students shall be allotted 25 percent of such remaining amount.
- ``(2) Local educational agencies administering schools with a total enrollment of at least 20,000 but less than 100,000 elementary and secondary school students shall be allotted 40 percent of such remaining amount.
- ``(3) Local educational agencies administering schools with a total enrollment of less than 20,000 elementary and secondary school students shall be allotted 30 percent of such remaining amount. Grants may be made under this paragraph to educational service agencies and consortia of not more than 5 local educational agencies in any case in which the total enrollment of the largest such local educational agency is less than 20,000 elementary and secondary students. Such agencies and consortia may also apply for assistance under this part in conjunction with the State educational agency. Not less than 20 percent of funds available under this paragraph shall be awarded to local educational agencies administering schools with a total enrollment of less than 2,000 elementary and secondary school students.
- ``(4) Community-based organizations shall be allotted 5 percent of such remaining amount. Grants under this paragraph shall be made after consultation between the community-based organization and the local educational agency that is to benefit from such a grant.
- ``(b) Special Consideration.--
- ``(1) In general.--The Secretary shall give special consideration to awarding funds available for each category described in paragraphs (1), (2), and (3) of subsection (a) to local educational agencies participating in an educational partnership.
- ``(2) Educational partnerships.--For the purpose of this part the term `educational partnerships' means a partnership between--
- ``(A) a local educational agency; and
- ``(B) a business concern or business organization, community-based organization, nonprofit private organization, institution of higher education, State educational agency, State or local public agency, private industry council (established under the Job Training Partnership Act), museum, library, or educational television or broadcasting station.
- ``(c) Award of Grant.--
- ``(1) In general.--From the amount allotted for any fiscal year to a category of local educational agencies under subsection (a), the Secretary shall award as many grants as practicable within each such category to local educational agencies and educational partnerships whose applications have been approved by the Secretary for such fiscal year under section 5304 and whose applications propose a program of sufficient size, scope, and quality to be effective.
- ``(2) Additional funds.--Any local educational agency or educational partnership that has received a grant under this part shall be eligible for additional funds as provided under subsection (d).
- ``(3) Terms and conditions.--Grants under this part shall be made under such terms and conditions as the Secretary shall prescribe.
- ``(d) Use of Funds When Not Fully Allotted to Categories Under Subsection (a).--
- ``(1) In general.--Whenever the Secretary determines that the full amount of the sums allotted under any category set forth under subsection (a) will not be required for applications of the local educational agencies in the case of categories described in paragraphs (1), (2), or (3) of subsection (a), the Secretary shall make the amount not so required available to another category under subsection (a). In carrying out the provisions of this subsection, the Secretary shall assure that the transfer of amounts from one category to another is made to a category in which there is the greatest need for funds.
- ``(2) Peer review.--In order to transfer funds under this subsection, the Secretary shall use a peer review process to determine that such excess funds are not needed to fund projects in particular categories and shall prepare a list of the categories in which funds were not fully expended and the reasons therefor, and make such list available to local educational agencies and educational partnerships upon request. The Secretary may use the peer review process to determine grant recipients of funds transferred in accordance with this subsection.
- ``(e) Federal Share.--
- ``(1) Federal share.--The Federal share of a grant under this part may not exceed--
- ``(A) 90 percent of the total cost of a project for the first year for which the project receives assistance under this part; and
- ``(B) 75 percent of such cost in each such succeeding fiscal year.
- ``(2) Remaining costs.--The remaining cost of a project that receives assistance under this part may be paid from any source other than funds made available under this part, except that not more than 10 percent of the remaining cost in any fiscal year may be provided from Federal sources other than this part.
- ``(3) Non-federal share.--The share of payments from sources other than funds made available under this part may be in cash or in kind fairly evaluated, including plant, equipment or services.