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SEC. 4202. ALLOTMENTS TO STATES.

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(a) RESERVATION- From the funds appropriated under section 4206 for any fiscal year, the Secretary shall reserve —

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(1) such amount as may be necessary to make continuation awards to grant recipients under covered programs (under the terms of those grants);

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(2) not more than 1 percent for national activities, which the Secretary may carry out directly or through grants and contracts, such as providing technical assistance to eligible entities carrying out programs under this part or conducting a national evaluation; and

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(3) not more than 1 percent for payments to the outlying areas and the Bureau of Indian Affairs, to be allotted in accordance with their respective needs for assistance under this part, as determined by the Secretary, to enable the outlying areas and the Bureau to carry out the purpose of this part.

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(b) STATE ALLOTMENTS-

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(1) DETERMINATION- From the funds appropriated under section 4206 for any fiscal year and remaining after the Secretary makes reservations under subsection (a), the Secretary shall allot to each State for the fiscal year an amount that bears the same relationship to the remainder as the amount the State received under subpart 2 of part A of title I for the preceding fiscal year bears to the amount all States received under that subpart for the preceding fiscal year, except that no State shall receive less than an amount equal to one-half of 1 percent of the total amount made available to all States under this subsection.

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(2) REALLOTMENT OF UNUSED FUNDS- If a State does not receive an allotment under this part for a fiscal year, the Secretary shall reallot the amount of the States allotment to the remaining States in accordance with this section.

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(c) STATE USE OF FUNDS-

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(1) IN GENERAL- Each State that receives an allotment under this part shall reserve not less than 95 percent of the amount allotted to such State under subsection (b), for each fiscal year for awards to eligible entities under section 4204.

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(2) STATE ADMINISTRATION- A State educational agency may use not more than 2 percent of the amount made available to the State under subsection (b) for —

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(A) the administrative costs of carrying out its responsibilities under this part;

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(B) establishing and implementing a peer review process for grant applications described in section 4204(b) (including consultation with the Governor and other State agencies responsible for administering youth development programs and adult learning activities); and

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supervising the awarding of funds to eligible entities (in consultation with the Governor and other State agencies responsible for administering youth development programs and adult learning activities).

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(3) STATE ACTIVITIES- A State educational agency may use not more than 3 percent of the amount made available to the State under subsection (b) for the following activities:

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(A) Monitoring and evaluation of programs and activities assisted under this part.

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(B) Providing capacity building, training, and technical assistance under this part.

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(C) Comprehensive evaluation (directly, or through a grant or contract) of the effectiveness of programs and activities assisted under this part.

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(D) Providing training and technical assistance to eligible entities who are applicants for or recipients of awards under this part.