PUBLIC LAW 103-382—OCT. 20, 1994
108 STAT. 3575
"(1) 0.25 percent of total appropriations; or
"(2) the average of—
"(A) one-quarter of 1 percent of the total amount available to carry out this section; and
"(B) 150 percent of the national average grant under
this section per child described in section 1124(c), without
application of a weighting factor, multiplied by the State's
total number of children described in section 1124(c), without application of a weighting factor.
"SEC. 1125A- EDUCATION FINANCE INCENTIVE PROGRAM.
20 USC 6336.
"(a) GRANTS.— The Secretary is authorized to make grants to
States from the sums appropriated pursuant to subsection (e) to
carry out the purposes of this part.
"(b) DISTRIBUTION BASED UPON FISCAL EFFORT AND EQUITY.—
"(1) IN GENERA];.. —Funds appropriated pursuant to subsection (e) shall be allotted to each State based upon the number
of children aged 5 to 17, inclusive, of such State multiplied
by the product of—
"(A) such State's effort factor described in paragraph
(2); multiplied by
"(B) 1.30 minus such State's equity factor described
in paragraph (3),
except that for each fiscal year no State shall receive less
than one-quarter of 1 percent of the total amount appropriated
pursuant to subsection (e) for such fiscal year.
"(2) EFFORT FACTOR. —(A) Except as provided in subparagraph (B), the effort factor for a State shall be determined
in accordance with the succeeding sentence, except that such
factor shall not be less than.95 nor greater than 1.05. The
effort factor determined under this sentence shall be a fraction
the numerator of which is the product of the three-year average
per-pupil expenditure in the State multiplied by the threeyear average per capita income in the United States and the
denominator of which is the product of the three-year average
per capita income in such State multiplied by the three-year
average per-pupil expenditure in the United States.
"(B) The effort factor for the Commonwealth of Puerto
Rico shall be equal to the lowest effort factor calculated under
subparagraph (A) for any State.
"(3) EQUITY FACTOR.—(A)(i) Except as provided in subparagraph (B), the Secretary shall determine the equity factor under
this section for each State in accordance with clause (ii).
"(ii)(I) For each State, the Secretary shall compute a
weighted coefficient of variation for the per-pupil expenditures
of local educational agencies in accordance with subclauses
(II), (III), (IV), and (V).
"(II) In computing coefficients of variation, the Secretary
shall weigh the variation between per-pupil expenditures in
each local educational agency and the average per-pupil
expenditures in the State according to the number of pupils
in the local educational agency.
"(Ill) In determining the number of pupils under this paragraph in each local educational agency and each State, the
Secretary shall multiply the number of children from lowincome families by 1.4 under this paragraph.

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