115 STAT. 1500 PUBLIC LAW 107-110-JAN. 8, 2002 appropriate, take alternative actions with regard to the school. "(b) STATE RECOGNITION.— "(1) ACADEMIC ACHIEVEMENT AWARDS PROGRAM. — "(A) IN GENERAL. —Each State receiving a grant under this part— "(i) shall establish a program for making academic achievement awards to recognize schools that meet the criteria described in subparagraph (B); and "(ii) as appropriate and as funds are available under subsection (c)(2)(A), may financially reward schools served under this part that meet the criteria described in clause (ii). "(B) CRITERIA.— The criteria referred to in subparagraph (A) are that a school— "(i) significantly closed the achievement gap between the groups of students described in section 1111(b)(2); or "(ii) exceeded their adequate yearly progress, consistent with section 1111(b)(2), for 2 or more consecutive years. "(2) DISTINGUISHED SCHOOLS. — Of those schools meeting the criteria described in paragraph (2), each State shall designate as distinguished schools those schools that have made the greatest gains in closing the achievement gap as described in subparagraph (B)(i) or exceeding adequate yearly progress as described in subparagraph (B)(ii). Such distinguished schools may serve as models for and provide support to other schools, especially schools identified for improvement under section 1116, to assist such schools in meeting the State's academic content standards and student academic achievement standards. "(3) AWARDS TO TEACHERS.—^A State program under paragraph (1) may also recognize and provide financial awards to teachers teaching in a school described in such paragraph that consistently makes significant gains in academic achievement in the areas in which the teacher provides instruction, or to teachers or principals designated as distinguished under subsection (a)(4)(A)(iii). " (c) FUNDING.— "(1) IN GENERAL.— Each State— "(A) shall use funds reserved under section 1003(a) and may use funds made available under section 1003(g) for the approaches described under subsection (a)(4)(A); and "(B) shall use State administrative funds authorized under section 1004(a) to establish the statewide system of support described under subsection (a). "(2) RESERVATIONS OF FUNDS BY STATE.— "(A) AWARDS PROGRAM. —For the purpose of carrying out subsection (b)(1), each State receiving a grant under this part may reserve, from the amount (if any) by which the funds received by the State under subpart 2 for a fiscal year exceed the amount received by the State under that subpart for the preceding fiscal year, not more than 5 percent of such excess amount.
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