From the amount appropriated for payments to States for any fiscal year under section 1 6302(a) and 6337(f) of this title, the Secretary shall reserve a total of 1 percent to provide assistance to—
(1) the outlying areas in the amount determined in accordance with subsection (b) of this section; and
(2) the Secretary of the Interior in the amount necessary to make payments pursuant to subsection (d) of this section.
From the amount made available for any fiscal year under subsection (a) of this section, the Secretary shall award grants to local educational agencies in the outlying areas.
Until each appropriate outlying area enters into an agreement for extension of United States educational assistance under the Compact of Free Association after January 8, 2002, the Secretary shall carry out the competition described in paragraph (3), except that the amount reserved to carry out such competition shall not exceed $5,000,000.
The Secretary shall use funds described in paragraph (2) to award grants to the outlying areas and freely associated States to carry out the purposes of this part.
The Secretary shall award grants under subparagraph (A) on a competitive basis, taking into consideration the recommendations of the Pacific Region Educational Laboratory in Honolulu, Hawaii.
Except as provided in subparagraph (D), grant funds awarded under this paragraph may be used only—
(i) for programs described in this chapter, including teacher training, curriculum development, instructional materials, or general school improvement and reform; and
(ii) to provide direct educational services that assist all students with meeting challenging State academic content standards.
The Secretary may provide not more than 5 percent of the amount reserved for grants under this paragraph to pay the administrative costs of the Pacific Region Educational Laboratory under subparagraph (B).
The provisions of Public Law 95–134, permitting the consolidation of grants by the outlying areas, shall not apply to funds provided to the freely associated States under this section.
For the purpose of subsections (a) and (b) of this section—
(1) the term "freely associated states" means the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau; and
(2) the term "outlying area" means the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
The amount allotted for payments to the Secretary of the Interior under subsection (a)(2) of this section for any fiscal year shall be, as determined pursuant to criteria established by the Secretary, the amount necessary to meet the special educational needs of—
(A) Indian children on reservations served by elementary schools and secondary schools for Indian children operated or supported by the Department of the Interior; and
(B) out-of-State Indian children in elementary schools and secondary schools in local educational agencies under special contracts with the Department of the Interior.
From the amount allotted for payments to the Secretary of the Interior under subsection (a)(2) of this section, the Secretary of the Interior shall make payments to local educational agencies, on such terms as the Secretary determines will best carry out the purposes of this part, with respect to out-of-State Indian children described in paragraph (1). The amount of such payment may not exceed, for each such child, the greater of—
(A) 40 percent of the average per-pupil expenditure in the State in which the agency is located; or
(B) 48 percent of such expenditure in the United States.
(Pub. L. 89–10, title I, §1121, as added Pub. L. 107–110, title I, §101, Jan. 8, 2002, 115 Stat. 1513.)
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