Page:United States Statutes at Large Volume 124.djvu/2416

124 STAT. 2390 PUBLIC LAW 111–226—AUG. 10, 2010 (2) RESERVATION.—A State that receives an allocation of funds appropriated under this heading may reserve not more than 2 percent for the administrative costs of carrying out its responsibilities with respect to those funds. (3) AWARDS TO LOCAL EDUCATIONAL AGENCIES.— (A) Except as specified in paragraph (2), an allocation of funds to a State shall be used only for awards to local educational agencies for the support of elementary and secondary education in accordance with paragraph (5) for the 2010–2011 school year (or, in the case of reallocations made under section 14001(f) of division A of Public Law 111–5, for the 2010–2011 or the 2011–2012 school year). (B) Funds used to support elementary and secondary education shall be distributed through a State’s primary elementary and secondary funding formulae or based on local educational agencies’ relative shares of funds under part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) for the most recent fiscal year for which data are available. (C) Subsections (a) and (b) of section 14002 of division A of Public Law 111–5 shall not apply to funds appropriated under this heading. (4) COMPLIANCE WITH EDUCATION REFORM ASSURANCES.— For purposes of awarding funds appropriated under this heading, any State that has an approved application for Phase II of the State Fiscal Stabilization Fund that was submitted in accordance with the application notice published in the Fed- eral Register on November 17, 2009 (74 Fed. Reg. 59142) shall be deemed to be in compliance with subsection (b) and para- graphs (2) through (5) of subsection (d) of section 14005 of division A of Public Law 111–5. (5) REQUIREMENT TO USE FUNDS TO RETAIN OR CREATE EDUCATION JOBS.—Notwithstanding section 14003(a) of division A of Public Law 111–5, funds awarded to local educational agencies under paragraph (3)— (A) may be used only for compensation and benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services; and (B) may not be used for general administrative expenses or for other support services expenditures as those terms were defined by the National Center for Education Statistics in its Common Core of Data as of the date of enactment of this Act. (6) PROHIBITION ON USE OF FUNDS FOR RAINY-DAY FUNDS OR DEBT RETIREMENT.—A State that receives an allocation may not use such funds, directly or indirectly, to— (A) establish, restore, or supplement a rainy-day fund; (B) supplant State funds in a manner that has the effect of establishing, restoring, or supplementing a rainy- day fund; (C) reduce or retire debt obligations incurred by the State; or