"W^fe*^- PUBLIC LAW 105-17-JUNE 4, 1997 111 STAT. 55 "(5) REPORT ON USE OF FUNDS.— As part of the information required to be submitted to the Secretary under section 612, each State shall annually describe— "(A) how amounts retained under paragraph (1) will be used to meet the requirements of this part; "(B) how those amounts will be allocated among the activities described in paragraphs (2) and (3) to meet State priorities based on input from local educational agencies; and "(C) the percentage of those amounts, if any, that will be distributed to local educational agencies by formula. "(g) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES. — "(1) SUBGRANTS REQUIRED.— Each State that receives a grant under this section for any fiscal year shall distribute any funds it does not retain under subsection (f) (at least 75 percent of the grant funds) to local educational agencies in the State that have established their eligibility under section 613, and to State agencies that received funds under section 614A(a) of this Act for fiscal year 1997, as then in effect, and have established their eligibility under section 613, for use in accordance with this part. "(2) ALLOCATIONS TO LOCAL EDUCATIONAL AGENCIES.— "(A) INTERIM PROCEDURE. — For each fiscal year for which funds are allocated to States under subsection (d)(2), each State shall allocate funds under paragraph (1) in accordance with section 611(d) of this Act, as in effect prior to the enactment of the Individuals with Disabilities Education Act Amendments of 1997. "(B) PERMANENT PROCEDURE.— For each fiscal year for which funds are allocated to States under subsection (e), each State shall allocate funds under paragraph (1) as follows: "(i) BASE PAYMENTS.—The State shall first award each agency described in paragraph (1) the amount that agency would have received under this section for the base year, as defined in subsection (e)(2)(A), if the State had distributed 75 percent of its grant for that year under section 611(d), as then in effect. "(ii) ALLOCATION OF REMAINING FUNDS. —After making allocations under clause (i), the State shall— "(I) allocate 85 percent of any remaining funds to those agencies on the basis of the relative numbers of children enrolled in public and private elementary and secondary schools within the agency's jurisdiction; and "(II) allocate 15 percent of those remaining funds to those agencies in accordance with their relative numbers of children living in poverty, as determined by the State educational agency. "(3) FORMER CHAPTER i STATE AGENCIES. — "(A) To the extent necessary, the State— "(i) shall use funds that are available under subsection (f)(1)(A) to ensure that each State agency that received fiscal year 1994 funds under subpart 2 of part D of chapter 1 of title I of the Elementary and Secondary Education Act of 1965 receives, from the combination of funds under subsection (f)(1)(A) and
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