PUBLIC LAW 103-382—OCT. 20, 1994 108 STAT. 3755 the fiscal year for which the agency is making application for payment. " (d) CHILDREN WITH DISABILITIES.— "(1) IN GENERAL.—From the amount appropriated under section 8014(c) for a fiscal year, the Secretary shall pay to each eligible local educational agency, on a pro rata basis, the amounts determined by— "(A) multiplying the number of children described in subparagraphs (A)(ii), (B) and (C) of subsection (a)(1) who are eligible to receive services under the Individuals with L Disabilities Education Act (20 U.S.C. 1400 et seq.) by a factor of 1.0; and "(B) multiplying the number of children described in subparagraph (D) of subsection (a)(1) who are eligible to receive services under such Act by a factor of 0.5. "(2) USE OF FUNDS. —A local educational agency that receives funds under paragraph (1) shall use such funds to provide a free appropriate public education to children described in paragraph (1) in accordance with the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.). " (e) HOLD-HARMLESS AMOUNTS.— "(1) IN GENERAL. — (A) Except as provided in paragraph (4)(A), the total amount that the Secretary shall pay a local educational agency under subsection (b) shall not be less than 85 percent of the amount such agency received for the preceding fiscal year— "(i) in the case of fiscal year 1995 only, under subsections (a) and (b) of section 3 of the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such section was in effect on the day preceding the date of enactment of the Improving America's Schools Act of 1994); or "(ii) in the case of fiscal years 1996, 1997, 1998, or 1999, under such subsection (b). "(B) For fiscal year 1995 only, the Secretary shall pay, to each local educational agency that is not eligible for a pay- ment under subsection (b) but that received a payment under section 3 of the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such Act was in effect on the day preceding the date of enactment of the Improving America's Schools Act of 1994) for fiscal year 1994, an amount which is not less than 85 percent of the payment such agency received under such section 3 for fiscal year 1994. "(2) TWO-YEAR APPLICABILITY. —Paragraph (1)(A) shall apply to any one local educational agency for a maximum of two consecutive fiscal years. "(3) PHASE-OUT PAYMENT. — ^A local educational agency which received a payment under section 3(e) of the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such section was in effect on the day preceding the date of enactment of the Improving America's Schools Act of 1994) for fiscal year 1994 is eligible to receive a payment, under subsection (b) for fiscal year 1995, in an amount which is not less than 85 percent of the amount received by such agency in fiscal year 1994 under such section 3(e). "(4) RATABLE REDUCTIONS. —(A)(i) If necessary in order to make pa3anents to local educational agencies in accordance with paragraphs (1) and (2), the Secretary first shall ratably
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