^3^";^ ' PUBLIC LAW 105-17-JUNE 4, 1997 111 STAT. 53 "(i) the percentage increase, if any, from the preceding fiscal year in the State's allocation under this section; or "(ii) the rate of inflation, as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor. "(C) A State may use funds it retains under subparagraph (A) without regard to— "(i) the prohibition on commingling of funds in section 612(a)( 18)(B); and "(ii) the prohibition on supplanting other funds in section 612(a)(18)(C). "(2) STATE ADMINISTRATION.— "(A) For the purpose of administering this part, including section 619 (including the coordination of activities under this part with, and providing technical assistance to, other programs that provide services to children with disabilities)— "(i) each State may use not more than twenty percent of the maximum amount it may retain under paragraph (1)(A) for any fiscal year or $500,000 (adjusted by the cumulative rate of inflation since fiscal year 1998, as measured by the percentage increase, if any, in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor), whichever is greater; and "(ii) each outlying area may use up to five percent of the amount it receives under this section for any fiscal year or $35,000, whichever is greater. "(B) Funds described in subparagraph (A) may also be used for the administration of part C of this Act, if the State educational agency is the lead agency for the State under that part. "(3) OTHER STATE-LEVEL ACTIVITIES. —Each State shall use any funds it retains under paragraph (1) and does not use for administration under paragraph (2) for any of the following: "(A) Support and direct services, including technical assistance and personnel development and training. "(B) Administrative costs of monitoring and complaint investigation, but only to the extent that those costs exceed the costs incurred for those activities during fiscal year 1985. "(C) To establish and implement the mediation process required by section 615(e), including providing for the costs of mediators and support personnel. "(D) To assist local educational agencies in meeting personnel shortages. "(E) To develop a State Improvement Plan under subpart 1 of part D. "(F) Activities at the State and local levels to meet the performance goals established by the State under section 612(a)(16) and to support implementation of the State Improvement Plan under subpart 1 of part D if the State receives funds under that subpart.