GRANTS TO LOCAL EDUCATIONAL AGENCIES.

SEC. 5312. GRANTS TO LOCAL EDUCATIONAL AGENCIES. (a) In General.—The Secretary shall, in order to effectuate the policy set forth in section 5311, carry out a program of making grants to local educational agencies which are entitled to payments under this subpart and which have submitted, and have had approved, applications therefor, in accordance with the provisions of this subpart. (b) Amount of Grants.— (1)(A) For any fiscal year for which appropriations are authorized under section 5316 of this Act, the Secretary shall determine the number of eligible Indian children who were enrolled in the schools of a local educational agency, and for whom such agency provided free public education, during such fiscal year. (B) For purposes of this subpart, the term “eligible Indian children” means Indian children whom the Secretary has determined— (i) were enrolled in a school of the local educational agency, and (ii) were provided free public education by the local educational agency, (2)(A) From the sums appropriated under section 5316(a) for any fiscal year, the Secretary shall allocate to each local educational agency which has an application approved under this subpart an amount which bears the same ratio to such sums as the product of— (i) the number of eligible Indian children, multiplied by (ii) the average per pupil expenditure per local educational agency, bears to the sum of such products for all such local educational agencies. (B) A local educational agency shall not be entitled to receive a grant under this subpart for any fiscal year unless the number of eligible Indian children, with respect to such agency, is at least 10 or constitutes at least 50 percent of its total enrollment. The requirements of this subparagraph shall not apply to any local educational agencies serving Indian children in Alaska, California, and Oklahoma or located on, or in proximity to, an Indian reservation. (C) For the purposes of this subsection, the average per pupil expenditure for a local educational agency is equal to the amount determined by dividing— (i) the sum of— (I) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the computation is made, of all of the local educational agencies in the State in which such agency is located, plus (II) any direct current expenditures by such State for the operation of such agencies (without regard to the sources of funds from which either of such expenditures are made), by 102 STAT. 397 (ii) the aggregate number of children who were in aver-age daily attendance for whom such agencies provided free public education during such preceding fiscal year. (3)(A) The first fiscal year for which schools operated by the Bureau of Indian Affairs of the Department of the Interior shall be treated as local educational agencies for the purposes of this subpart (other than sections 5314(b)(2)(B)(ii) and 5315(c)(2)) is the first fiscal year beginning after the date of enactment of this Act for which the amount of funds appropriated for allocation under this subsection equals or exceeds the amount of funds that, if such schools are not treated as local educational agencies, is necessary to allocate under paragraph (2) (determined without regard to subparagraph (B)) to each local educational agency which has an application approved under this subpart for such fiscal year an amount of funds for each eligible Indian child equal to the sum of— (i) the average amount of funds per eligible Indian child that was received by such local educational agency for fiscal year 1988 under section 303(a)(2) of the Indian Elementary and Secondary School Assistance Act (20 U.S.C. 241bb(a)(2)), plus (ii) 2 percent of the amount described in clause (i). (B)(i) Notwithstanding any other provision of this subpart, for each fiscal year to which this clause applies— (I) paragraph (2) shall first be applied to allocate the portion of the funds appropriated for such fiscal year for allocation under this subsection that does not exceed the amount determined to be necessary under subparagraph (A) among only those local educational agencies that received funds under section 303(a)(2) of the Indian Elementary and Secondary School Assistance Act (20 U.S.C 241bb(a)(2)) for fiscal year 1988, and (II) paragraph (2) shall then be applied to allocate the remaining portion (if any) of the funds appropriated for such fiscal year for allocation under this subsection among only those local educational agencies that are schools operated by the Bureau of Indian Affairs. (ii) Clause (i) applies to the first fiscal year described in subparagraph (A), and each succeeding fiscal year, until the amount of funds appropriated for allocation under this subsection for any fiscal year beginning after the date of enactment of this Act equals or exceeds the amount of funds that, if all schools operated by the Bureau of Indian Affairs are treated as local educational agencies, is necessary to allocate under para-graph (2) (determined without regard to clause (i)) to each local educational agency which has an application approved under this subpart for such fiscal year an amount of funds for each eligible Indian child equal to the sum of— (I) the average amount of funds per eligible Indian child that was received by such local educational agency for fiscal year 1988 under the Indian Elementary and Secondary School Assistance Act, plus (II) 2 percent of the amount described in subclause (I). (c) Grants to Schools That Are Not, or Have Not Been, Local Educational Agencies.— (1) In addition to the sums appropriated for any fiscal year for grants to local educational agencies under this subpart, there is 102 STAT. 398hereby authorized to be appropriated for any fiscal year an amount not in excess of 10 percent of the amount appropriated for payments on the basis of entitlements computed under subsection (b) for that fiscal year, for the purpose of enabling the Secretary to provide financial assistance in accordance with the provisions of this subpart to schools— (A) which are located on or near reservations; and (B) which— (i) are not local educational agencies, or (ii) have not been local educational agencies for more than 3 years. (2) The requirements of clause (A) of paragraph (1) shall not apply to any school serving Indian children in California, Oklahoma, or Alaska. (d) Grants for Demonstration Projects.—In addition to the sums appropriated for any fiscal year for grants to local educational agencies under this subpart, there is hereby authorized to be appropriated for any fiscal year an amount not in excess of 10 percent of the amount appropriated for payments of entitlements computed under subsection (b) for that fiscal year, for the purpose of enabling the Secretary to make grants on a competitive basis to local educational agencies to support demonstration projects and programs which are designed to plan for and improve educational opportunities for Indian children, except that the Secretary shall reserve a portion not to exceed 25 percent of such funds to make grants for demonstration projects examining the special educational and culturally related academic needs that arise in school districts with high concentrations of Indian children.