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``SEC. 3504. ALLOTMENTS OF FUNDS.
- ``(a) In General.--From the amount appropriated under section 3509 for any fiscal year, the Secretary shall reserve--
- ``(1) not more than one-half of 1 percent for allotment among Guam, American Samoa, the Virgin Islands, and the Northern Mariana Islands according to their respective needs for assistance under this part; and
- ``(2) one-half of 1 percent for programs for Indian students served by schools funded by the Secretary of the Interior which are consistent with the purposes of this part
- ``(b) Allotment.--
- ``(1) In general.--The remainder of the amount so appropriated (after meeting requirements in subsection (a)) shall be allotted among State educational agencies so that--
- ``(A) one-half of such remainder shall be distributed by allotting to each State educational agency an amount which bears the same ratio to such one-half of such remainder as the number of children aged 5 to 17, inclusive, in the State bears to the number of such children in all States; and
- ``(B) one-half of such remainder shall be distributed according to each State's share of allocations under part A of title I.
- ``(2) Minimum.--Except as provided in paragraph (3), no State educational agency shall receive an allotment under this subsection for any fiscal year in an amount that is--
- ``(A) less than one-half of 1 percent of the amount made available under this subsection for such fiscal year; or
- ``(B) less than the amount allotted to such State for fiscal year 1988 under title II of the Education for Economic Security Act.
- ``(3) Ratable reductions.--
- ``(A) If the sums made available under this part for any fiscal year are insufficient to pay the full amounts that all State educational agencies are eligible to receive under paragraph (2)(B) for such year, the Secretary shall ratably reduce the allotment to such agencies for such year.
- ``(B) If additional funds become available for making payments under paragraph (2)(B) for such fiscal year, allotments that were reduced under subparagraph (A) shall be increased on the same basis as such allotments were reduced.
- ``(c) Reallotment of Unused Funds.--The amount of any State educational agency's allotment under subsection (b) for any fiscal year to carry out this part which the Secretary determines will not be required for that fiscal year to carry out this part shall be available for reallotment from time to time, on such dates during that year as the Secretary may determine, to other State educational agencies in proportion to the original allotments to those State educational agencies under subsection (b) for that year but with such proportionate amount for any of those other State educational agencies being reduced to the extent it exceeds the sum the Secretary estimates that the State educational agency needs and will be able to use for that year, and the total of those reductions shall be similarly reallotted among the State educational agencies whose proportionate amounts were not so reduced. Any amounts reallotted to a State educational agency under this subsection during a year shall be deemed a part of the State educational agency's allotment under subsection (b) for that year.
- ``(d) Definition.--For the purposes of this part the term `State' means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
- ``(e) Data.--The number of children aged 5 to 17, inclusive, in the State and in all States shall be determined by the Secretary on the basis of the most recent satisfactory data available to the Secretary.
SEC. 3505. STATE APPLICATION.