tural workers will be made on the basis of applications therefor which are submitted to the Commissioner and approved by him. Such a grant will not exceed the amount of the funds made available by the Commissioner for that State educational agency after setting aside such amounts as are necessary for carrying out special arrangements with other public or nonprofit private agencies for conducting educational programs for migratory children of migratory agricultural workers when the Commissioner determines that a State is unable or unwilling to conduct such educational programs or that such special arrangements will result in more efficient and economic administration of educational programs for such children or that they will add to the welfare or educational achievement of such children.

(c) Payments under Title I of the Act to the Department of the Interior for a program to meet the special educational needs of educationally deprived children on reservations serviced by elementary and secondary schools operated for Indian children by that Department will be made on the basis of an application submitted by that Department to the Commissioner and approved by him.

(d) Subject to the reallotment authority in § 116.9, no State or local educational agency may assign any part of its eligibility to another agency. This does not, however, prevent a State educational agency from exercising its authority under § 116.6 nor prevent two or more applicants in one or more States from conducting a joint program or project (including a planning project) through a combined use of funds made available to them.

§ 116.17 Project covered by an application.

(a) An application for a grant under Title I of the Act by a local educational agency (other than a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) shall set forth a project for educationally deprived children residing in a project area composed of school attendance areas having high concentrations of children from low-income families or a project for serving children living in institutions for neglected or delinquent children, which project shall have been designed specifically to meet special educational needs

of those educationally deprived children. The project itself shall be carried out at locations where the needs of the educationally deprived children can best be served. It may involve the participation of educationally deprived children residing outside the project area if such a participation will not dilute the effectiveness of the project with respect to children residing in the project area.

(b) A State or local educational agency (including a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) may apply for a grant in an amount not exceeding one percent of the maximum grant it is eligible to receive or $2,000, whichever is greater, for planning during the current fiscal year which was, or will be, directly related to programs or projects to be carried out under Title I of the Act and has resulted, or is reasonably likely to result, in a program which will be carried out, if funds are necessary for that purpose because of the innovative nature of the program or project or because the local educational agency lacks the resources necessary for adequate planning.

(c) Each application for a grant under Title I of the Act by such a local educational agency, other than an application for a grant for planning, shall designate the project area or the institution or special school for which the project is designed. A project area may include one or more attendance areas having high concentrations of children from low-income families, but the project area must be sufficiently restricted in size in relation to the nature of the project as to avoid jeopardizing its effectiveness in meeting the aims and objectives of the project. Each such application shall describe the special educational needs identified with educationally deprived children residing in the project area at which the project is directed. Each local educational agency shall design its projects in such a manner, and apply them to such school attendance areas having high concentrations of children from low-income families, as will best meet the special educational needs of the educationally deprived children.

(d) A school attendance area for either a public elementary or a public secondary school may be designated as a project area if the estimated percentage of children from low-income families residing in that attendance area is

as high as the percentage of such children residing in the whole of the school district, or if the estimated number of children from low-income families residing in that attendance area is as large as the average number of such children residing in the several school attendance areas in the school district. In certain

cases, the whole of a school district may be regarded as an area having a high concentration of such children and be approved as a project area, but only if there are no wide variances in the concentrations of such children among the several school attendance areas in the school district.

(e) In the case of such a project undertaken jointly by two or more such local educational agencies, the project area with respect to each school district must be one that qualifies as a project area under paragraph (d) of this section. However, the whole of the project area must be considered in determining whether it is sufficiently restricted in size in relation to the nature of the project as to maintain its effectiveness in meeting the aims and objectives of the project.

(f) The project for which an application for a grant is made by a local educational agency should be designed to meet the special educational needs of those educationally deprived children who have the greatest need for assistance. However, none of the educationally deprived children who are in need of the special educational services to be provided shall be denied the opportunity to participate in the project on the ground that they are not children from low-income families or on the ground that they are not attending school at the time.

(g) Each such project must be tailored to contribute particularly toward meeting one or more of the special educational needs of educationally deprived children and should not be designed merely to meet the needs of schools or of the student body at large in a school or in a specified grade in a school.

(h) Each application for a grant under Title I of the Act for educationally deprived children residing in a project area shall contain an assurance that the use of the grant funds will not result in a decrease in the use for educationally deprived children residing in that project area of State or local funds which, in the absence of funds under Title I of the Act, would be made available for

that project area, and that neither the project area nor the educationally deprived children residing therein will otherwise be penalized in the application of State and local funds because of such a use of funds under Title I of the Act. No project under Title I of the Act will be deemed to have been designed to meet the special educational needs of educationally deprived children unless the funds made available for that project are to be used to supplement, and not to supplant, State or local funds.

(i) No application for a project grant under Title I of the Act may cover the construction of school facilities unless such construction is demonstrated as being essential in order to assure the success of a program or project under Title I of the Act. If the construction of school facilities is so demonstrated as being essential for a program or project, the application must nevertheless comply with other requirements of Title I of the Act and the regulations in this part, such as the requirements in § 116.21 in regard to labor standards and overall State construction planning and, in relation to the overall program, the requirements in § 116.19 in regard to participation by children enrolled in private schools.

(j) A project by a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children may include the acquisition of equipment and, in the case of schools owned by that State or a public agency of that State, the construction of school facilities. Each project of such a State agency shall be designed to meet the special educational needs of children attending schools operated or supported by that State agency.

(k) An application by a State educational agency to the Commissioner for a grant under Title I of the Act for the education of migratory children of migratory agricultural workers shall describe a program designed to meet the special educational needs of such migratory children. The application shall describe the individual projects that are contemplated and identify the local educational agencies, if any, through which the projects will be carried out, which application shall be in sufficient detail to enable the Commissioner to determine whether he will exercise his authority to make special arrangements pursuant to

agencies directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) have responsibility for different groups of children in a district, or serve school districts which overlap, or in any case in which a local educational agency provides free public education for a substantial number of children residing in the school district of another local educational agency, the State educational agency may allocate the amount of the maximum grants among such local educational agencies in such manner as it determines will best carry out the purposes for which the grants under Title I of the Act are respectively made available.

§ 116.7 Changes in local educational agencies.

(a) In any case in which there is a merger or consolidation of local educational agencies during the school year, the maximum grant which each was eligible to receive shall become available to the surviving or consolidated agency. The surviving or consolidated agency shall be responsible for projects previously approved for each of the agencies participating in the merger or consolidation.

(b) In any case in which the geographical area of a school district served by a local educational agency is diminished, or divided with another local educational agency, during the school year, the State educational agency shall redetermine the maximum grants by using the same method used in making the original determination. However, nothing herein shall preclude the completion, where appropriate, of previously approved projects by the agency originally submitting the projects by itself through a cooperative undertaking. § 116.8 Limitation on grants for fiscal year 1967.

or

(a) The total amount approved for grants to any local educational agency (other than a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) for fiscal year 1967 shall be limited to 50 percent of the sum budgeted by that agency for current expeditures (see paragraph (h) of § 116.1) for that year.

(b) The determination of the budgeted sum shall be made on the basis of the budget as finally approved by the public authority responsible for such an approval. Until such time as the budget for that fiscal year shall have been finally approved, the grant to the local educational agency shall be tentatively limited to 40 percent of current expenditures for fiscal year 1966, subject to such upward adjustment as may be occasioned by the final approval of the budget for fiscal year 1967. The limitation on the grant to a local educational agency will be determined by the State educational agency at the time of the initial application of the educational agency except that where necessary the final determination of that limitation shall be deferred until the time of the first such application after final budget approval.

(a) If the sums appropriated for any fiscal year are not sufficient to pay in full the amounts which all local and State educational agencies and the Department of the Interior are eligible to receive under Title I of the Act for that year, the amounts available to State and local educational agencies (other than those in Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands) will, subject to such limitations as may be applied by statute to funds appropriated under Title I of the Act, be ratably reduced, except that the amounts made available to State educational agencies for administration and technical assistance with respect to the measurement of educational achievement and evaluation of projects will not be reduced below $75,000. Inasmuch as the amounts available for allotment among Puerto Rico, Guam, American Samoa, the Virgin Islands, the Trust Territory of the Pacific Islands, and the Department of the Interior for grants and payments are, in the first instance, based on the sums appropriated, such amounts are not subject to pro rata reduction under this paragraph.

(b) The Commissioner may set dates by which State educational agencies (other than those in Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands) must certify to him the amounts for which applications of State and local

educational agencies (including State agencies directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) have been or will, during that fiscal year, be approved by such agencies and by which such State educational agencies must file applications with the Commissioner for establishing or improving programs for migratory children of migratory agricultural workers. Subject to such limitations as may be applied by statute to funds appropriated under Title I of the Act, the excess of the amounts made available to such State and local educational agencies in accordance with paragraph (a) of this section over the amounts necessary to fund such approved or approvable applications (including amounts necessary to fund such special arrangements as may be made by the Commissioner for education of migratory children of migratory agricultural workers) shall be made available, first by State educational agencies to other educational agencies in the particular State and then by the Commissioner for educational agencies in other such States to offset ratable reductions made pursuant to paragraph (a) of this section but not to make available to an agency more than the maximum grant to which that agency is entitled. The amounts so made available under this paragraph shall be distributed among the State and local educational agencies applying for additional funds in amounts as nearly proportionate to the amounts of the ratable reductions applied to those agencies as is practicable for approvable new projects or enlargements or extensions of existing projects.

(c) The Commissioner may set dates by which State educational agencies in Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands must certify to him the amounts for which applications have been or will, during that fiscal year, be approved by such agencies, and by which the Department of the Interior will report to the Commissioner the amount needed by that Department for Title I projects. The excess of the amounts made available to any of such agencies or the Department of the Interior over the amounts which the Commissioner determines are needed by them will be redistributed among other such

agencies and the Department of the Interior according to their respective needs for such amounts as redetermined by the Commissioner at that time.

(d) In the event that additional funds are made available for making payments under Title I of the Act for that year, such additional funds will be applied to increase ratably the amounts available under paragraphs (a) and (b) of this section to State and local educational agencies in States other than Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands and, to the extent called for by the Act appropriating such additional funds, the amounts available for allotment for grants and payments among the Department of the Interior and, together with appropriate additional amounts for administration and technical assistance, Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands. The amounts available to State educational agencies for administration and technical assistance will be ratably increased pursuant to this paragraph only to the extent that the amounts made available for grants, in the case of Puerto Rico, Wake Island, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands, are increased above $2,500,000 or, in the case of any other State, above $7,500,000. In no event, however, will the total amount made available to an agency exceed the maximum grant to which that agency is entitled. §§ 116.10-116.15

[Reserved]

Subpart C-Project Applications § 116.16 Project applications.

(a) Grants under Title I of the Act to a local educational agency (including a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) will be made on the basis of applications therefor which are submitted to the State educational agency and approved by it in an aggregate amount not in excess of the amount of the funds made available for that local educational agency.

(b) Grants under Title I of the Act to a State educational agency for establishing or improving programs for migratory children of migratory agricul

tural workers will be made on the basis of applications therefor which are submitted to the Commissioner and approved by him. Such a grant will not exceed the amount of the funds made available by the Commissioner for that State educational agency after setting aside such amounts as are necessary for carrying out special arrangements with other public or nonprofit private agencies for conducting educational programs for migratory children of migratory agricultural workers when the Commissioner determines that a State is unable or unwilling to conduct such educational programs or that such special arrangements will result in more efficient and economic administration of educational programs for such children or that they will add to the welfare or educational achievement of such children.

(c) Payments under Title I of the Act to the Department of the Interior for a program to meet the special educational needs of educationally deprived children on reservations serviced by elementary and secondary schools operated for Indian children by that Department will be made on the basis of an application submitted by that Department to the Commissioner and approved by him.

(d) Subject to the reallotment authority in § 116.9, no State or local educational agency may assign any part of its eligibility to another agency. This does not, however, prevent a State educational agency from exercising its authority under § 116.6 nor prevent two or more applicants in one or more States from conducting a joint program or project (including a planning project) through a combined use of funds made available to them.

(a) An application for a grant under Title I of the Act by a local educational agency (other than a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) shall set forth a project for educationally deprived children residing in a project area composed of school attendance areas having high concentrations of children from low-income families or a project for serving children living in institutions for neglected or delinquent children, which project shall have been designed specifically to meet special educational needs

of those educationally deprived children. The project itself shall be carried out at locations where the needs of the educationally deprived children can best be served. It may involve the participation of educationally deprived children residing outside the project area if such a participation will not dilute the effectiveness of the project with respect to children residing in the project area.

(b) A State or local educational agency (including a State agency directly responsible for providing free public education for handicapped children or for children in institutions for neglected or delinquent children) may apply for a grant in an amount not exceeding one percent of the maximum grant it is eligible to receive or $2,000, whichever is greater, for planning during the current fiscal year which was, or will be. directly related to programs or projects to be carried out under Title I of the Act and has resulted, or is reasonably likely to result, in a program which will be carried out, if funds are necessary for tha purpose because of the innovative natu: of the program or project or becau the local educational agency lacks the : sources necessary for adequate planni

(c) Each application for a grant un Title I of the Act by such a local edu tional agency, other than an applica for a grant for planning, shall desig the project area or the institutio special school for which the proje designed. A project area may in one or more attendance areas high concentrations of children low-income families, but the projec must be sufficiently restricted in relation to the nature of the pro to avoid jeopardizing its effective meeting the aims and objectives project. Each such application s scribe the special educational identified with educationally children residing in the project which the project is directed. F educational agency shall design ects in such a manner, and ap to such school attendance are high concentrations of child low-income families, as will bes special educational needs of t tionally deprived children.

(d) A school attendance either a public elementary secondary school may be de a project area if the estimat age of children from low-in lies residing in that attend