SECTION 1. HOLD-HARMLESS AMOUNTS FOR PAYMENTS RELATING TO FEDERAL 
              ACQUISITION OF REAL PROPERTY.

    Section 8002 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7702) is amended by adding at the end the following new 
subsections:
    ``(g) Former Districts.--
        ``(1) In general.--Where the school district of any local 
    educational agency described in paragraph (2) is formed at any time 
    after 1938 by the consolidation of two or more former school 
    districts, such agency may elect (at any time such agency files an 
    application under section 8005) for any fiscal year after fiscal 
    year 1994 to have (A) the eligibility of such local educational 
    agency, and (B) the amount which such agency shall be eligible to 
    receive, determined under this section only with respect to such of 
    the former school districts comprising such consolidated school 
    districts as such agency shall designate in such election.
        ``(2) Eligible local educational agencies.--A local educational 
    agency referred to in paragraph (1) is any local educational agency 
    that, for fiscal year 1994 or any preceding fiscal year, applied 
    for and was determined eligible under section 2(c) of the Act of 
    September 30, 1950 (Public Law 874, 81st Congress) as such section 
    was in effect for such fiscal year.
    ``(h) Hold-Harmless Amounts.--
        ``(1) In general.--Except as provided in paragraph (2)(A), the 
    total amount that the Secretary shall pay under subsection (b) to a 
    local educational agency that is otherwise eligible for a payment 
    under this section--
            ``(A) for fiscal year 1995 shall not be less than 85 
        percent of the amount such agency received for fiscal year 1994 
        under section 2 of the Act of September 30, 1950 (Public Law 
        874, 81st Congress) as such section was in effect on September 
        30, 1994; or
            ``(B) for fiscal year 1996 shall not be less than 85 
        percent of the amount such agency received for fiscal year 1995 
        under subsection (b).
        ``(2) Ratable reductions.--(A)(i) If necessary in order to make 
    payments to local educational agencies in accordance with paragraph 
    (1) for any fiscal year, the Secretary first shall ratably reduce 
    payments under subsection (b) for such year to local educational 
    agencies that do not receive a payment under this subsection for 
    such year.
        ``(ii) If additional funds become available for making payments 
    under subsection (b) for such year, then payments that were reduced 
    under clause (i) shall be increased on the same basis as such 
    payments were reduced.
        ``(B)(i) If the sums made available under this title for any 
    fiscal year are insufficient to pay the full amounts that all local 
    educational agencies in all States are eligible to receive under 
    paragraph (1) after the application of subparagraph (A) for such 
    year, then the Secretary shall ratably reduce payments under 
    paragraph (1) to all such agencies for such year.
        ``(ii) If additional funds become available for making payments 
    under paragraph (1) for such fiscal year, then payments that were 
    reduced under clause (i) shall be increased on the same basis as 
    such payments were reduced.''.

SEC. 2. APPLICATIONS FOR INCREASED PAYMENTS.

    (a) Payments.--Notwithstanding any other provision of law--
        (1) the Bonesteel-Fairfax School District Number 26-5, South 
    Dakota, and the Wagner Community School District Number 11-4, South 
    Dakota, shall be eligible to apply for payment for fiscal year 1994 
    under section 3(d)(2)(B) of the Act of September 30, 1950 (Public 
    Law 874, 81st Congress) (as such section was in effect on September 
    30, 1994); and
        (2) the Secretary of Education shall use a subgroup of 10 or 
    more generally comparable local educational agencies for the 
    purpose of calculating a payment described in paragraph (1) for a 
    local educational agency described in such paragraph.
    (b) Application.--In order to be eligible to receive a payment 
described in subsection (a), a school district described in such 
subsection shall apply for such payment within 30 days after the date 
of enactment of this Act.
    (c) Construction.--Nothing in this section shall be construed to 
require a local educational agency that received a payment under 
section 3(d)(2)(B) of the Act of September 30, 1950 (Public Law 874, 
81st Congress) (as such section was in effect on September 30, 1994) 
for fiscal year 1994 to return such payment or a portion of such 
payment to the Federal Government.

SEC. 3. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN RESIDING ON 
              MILITARY INSTALLATION HOUSING UNDERGOING RENOVATION.

    (a) In General.--Section 8003(a) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7703(a)) is amended by adding at the 
end the following new paragraph:
        ``(4) Military installation housing undergoing renovation.--For 
    purposes of computing the amount of a payment for a local 
    educational agency for children described in paragraph (1)(D)(i), 
    the Secretary shall consider such children to be children described 
    in paragraph (1)(B) if the Secretary determines, on the basis of a 
    certification provided to the Secretary by a designated 
    representative of the Secretary of Defense, that such children 
    would have resided in housing on Federal property in accordance 
    with paragraph (1)(B) except that such housing was undergoing 
    renovation on the date for which the Secretary determines the 
    number of children under paragraph (1).''.
    (b) Effective Date.--Paragraph (4) of section 8003(a) of the 
Elementary and Secondary Education Act of 1965, as added by subsection 
(a), shall apply with respect to fiscal years after fiscal year 1995.

SEC. 4. COMPUTATION OF PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED 
              CHILDREN IN STATES WITH ONLY ONE LOCAL EDUCATIONAL 
              AGENCY.

    (a) In General.--Section 8003(b) of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7703(b)) is amended by adding at the 
end the following new paragraph:
        ``(3) States with only one local educational agency.--
            ``(A) In general.--In any of the 50 States of the United 
        States in which there is only one local educational agency, the 
        Secretary shall, for purposes of paragraphs (1)(B), (1)(C), and 
        (2) of this subsection, and subsection (e), consider each 
        administrative school district in the State to be a separate 
        local educational agency.
            ``(B) Computation of maximum amount of basic support 
        payment and threshold payment.--In computing the maximum 
        payment amount under paragraph (1)(C) and the learning 
        opportunity threshold payment under paragraph (2)(B) for an 
        administrative school district described in subparagraph (A)--
                ``(i) the Secretary shall first determine the maximum 
            payment amount and the total current expenditures for the 
            State as a whole; and
                ``(ii) the Secretary shall then--

                    ``(I) proportionately allocate such maximum payment 
                amount among the administrative school districts on the 
                basis of the respective weighted student units of such 
                districts; and
                    ``(II) proportionately allocate such total current 
                expenditures among the administrative school districts 
                on the basis of the respective number of students in 
                average daily attendance at such districts.''.

    (b) Effective Date.--Paragraph (3) of section 8003(b) of the 
Elementary and Secondary Education Act of 1965, as added by subsection 
(a), shall apply with respect to fiscal years after fiscal year 1994.

SEC. 5. DATA AND DETERMINATION OF AVAILABLE FUNDS.

    (a) Data.--Paragraph (4) of section 8003(f) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7703(f)) is amended--
        (1) in the heading, by striking ``Current year'';
        (2) by amending subparagraph (A) to read as follows:
            ``(A) shall use student, revenue, and tax data from the 
        second fiscal year preceding the fiscal year for which the 
        local educational agency is applying for assistance under this 
        subsection;''; and
        (3) in subparagraph (B), by striking ``such year'' and 
    inserting ``the fiscal year for which the local educational agency 
    is applying for assistance under this subsection''.
    (b) Determination of Available Funds.--Paragraph (3) of section 
8003(f) of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7703(f)) is amended--
        (1) in the matter preceding subclause (I) of subparagraph 
    (A)(iii), by inserting ``, except as provided in subparagraph 
    (C),'' after ``but''; and
        (2) by adding at the end the following new subparagraph:
            ``(C) Determination of available funds.--When determining 
        the amount of funds available to the local educational agency 
        for current expenditures for purposes of subparagraph (A)(iii) 
        for a fiscal year, the Secretary shall include, with respect to 
        the local educational agency's opening cash balance for such 
        fiscal year, the portion of such balance that is the greater 
        of--
                ``(i) the amount that exceeds the maximum amount of 
            funds for current expenditures that the local educational 
            agency was allowed by State law to carry over from the 
            prior fiscal year, if State restrictions on such amounts 
            were applied uniformly to all local educational agencies in 
            the State; or
                ``(ii) the amount that exceeds 30 percent of the local 
            educational agency's operating costs for the prior fiscal 
            year.''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply with respect to fiscal years after fiscal year 1996.

SEC. 6. PAYMENTS RELATING TO FEDERAL PROPERTY.

    Section 8002 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7702) (as amended by section 1) is further amended by adding 
at the end thereof the following new subsection:
    ``(i) Priority Payments.--Notwithstanding subsection (b)(1)(B), and 
for any fiscal year beginning with fiscal year 1997 for which the 
amount appropriated to carry out this section exceeds the amount so 
appropriated for fiscal year 1996, the Secretary shall first use such 
excess amount to increase the payment that would otherwise be made 
under this section to not more than 50 percent of the maximum amount 
determined under subsection (b) for any local educational agency that--
        ``(1) received a payment under this section for fiscal year 
    1996;
        ``(2) serves a school district that contains all or a portion 
    of a United States military academy;
        ``(3) serves a school district in which the local tax assessor 
    has certified that at least 60 percent of the real property is 
    federally owned; and
        ``(4) demonstrates to the satisfaction of the Secretary that 
    such agency's per-pupil revenue derived from local sources for 
    current expenditures is not less than that revenue for the 
    preceding fiscal year.''.

SEC. 7. TREATMENT OF IMPACT AID PAYMENTS.

    (a) In General.--The Secretary of Education shall treat any State 
as having met the requirements of section 5(d)(2)(A) of the Act of 
September 30, 1950 (Public Law 874, 81st Congress) for fiscal year 1991 
(as such section was in effect for such fiscal year), and as not having 
met those requirements for each of the fiscal years 1992, 1993, and 
1994 (as such section was in effect for fiscal year 1992, 1993, and 
1994, respectively), if--
        (1) the State's program of State aid was not certified by the 
    Secretary under section 5(d)(2)(C)(i) of the Act of September 30, 
    1950 (Public Law 874, 81st Congress) for any fiscal year prior to 
    fiscal year 1991;
        (2) the State submitted timely notice under that section of the 
    State's intention to seek that certification for fiscal year 1991;
        (3) the Secretary determined that the State did not meet the 
    requirements of section 5(d)(2)(A) of such Act for fiscal year 
    1991; and
        (4) the State made a payment to each local educational agency 
    in the State (other than a local educational agency that received a 
    payment under section 3(d)(2)(B) of such Act for fiscal year 1991) 
    in an amount equal to the difference between the amount such agency 
    received under such Act for fiscal year 1991 and the amount such 
    agency would have received under such Act for fiscal year 1991 if 
    payments under such Act had not been taken into consideration in 
    awarding State aid to such agencies for fiscal year 1991.
    (b) Repayment Not Required.--Notwithstanding any other provision of 
law, any local educational agency in a State that meets the 
requirements of paragraphs (1) through (4) of subsection (a) and that 
received funds under section 3(d)(2)(B) of the Act of September 30, 
1950 (Public Law 874, 81st Congress) for fiscal year 1991 (as such 
section was in effect for such fiscal year) shall not, by virtue of 
subsection (a), be required to repay those funds to the Secretary of 
Education.

SEC. 8. SPECIAL RULE RELATING TO AVAILABILITY OF FUNDS FOR THE LOCAL 
              EDUCATIONAL AGENCY SERVING THE NORTH HANOVER TOWNSHIP 
              PUBLIC SCHOOLS, NEW JERSEY, UNDER PUBLIC LAW 874, 81ST 
              CONGRESS.

    The Secretary of Education shall not consider any funds that the 
Secretary of Education determines the local educational agency serving 
the North Hanover Township Public Schools, New Jersey, has designated 
for a future liability under an early retirement incentive program as 
funds available to such local educational agency for purposes of 
determining the eligibility of such local educational agency for a 
payment for fiscal year 1994, or the amount of any such payment, under 
section 3(d)(2)(B) of the Act of September 30, 1950 (Public Law 874, 
81st Congress), as such section was in effect for such fiscal year.

SEC. 9. CORRECTED LOCAL CONTRIBUTION RATE.

    (a) Computation.--The Secretary of Education shall compute a 
payment for a local educational agency under the Act of September 30, 
1950 (Public Law 874, 81st Congress) for each of the fiscal years 1991 
through 1994 (as such Act was in effect for each of those fiscal years, 
as the case may be) using a corrected local contribution rate based on 
generally comparable school districts, if--
        (1) an incorrect local contribution rate was submitted to the 
    Secretary of Education by the State in which such agency is 
    located, and the incorrect local contribution rate was verified as 
    correct by the Secretary of Education; and
        (2) the corrected local contribution rate is subject to review 
    by the Secretary of Education.
    (b) Payment.--Using funds appropriated under the Act of September 
30, 1950 (Public Law 874, 81st Congress) for fiscal years 1991 through 
1994 that remain available for obligation (if any), the Secretary of 
Education shall make payments based on the computations described in 
subsection (a) to the local educational agency for such fiscal years.

SEC. 10. STATE EQUALIZATION PLANS.

    Subparagraph (A) of section 8009(b)(2) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7709(b)(2)) is amended by 
striking ``more than'' and all that follows through the period and 
inserting ``more than 25 percent.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
Amends the Elementary and Secondary Education Act of 1965 (ESEA) with respect to impact aid programs. 
(Sec. 1) Adds a hold harmless provision relating to Federal acquisition of real property, whereby no eligible local educational agency (LEA) shall receive less than 85 percent of the preceding year's amount in payment for any fiscal year. 
(Sec. 2) Makes two specified school districts in South Dakota eligible to apply for certain increased payments. 
(Sec. 3) Provides that children who would have resided in military installation housing on Federal property, if such property were not undergoing renovation on the date of eligibility determination, shall be considered eligible federally connected children for purposes of impact aid payments to LEAs. 
(Sec. 4) Sets forth requirements for the method of computation of impact aid payments with respect to eligible federally connected children in States with only one LEA. 
(Sec. 5) Revises certain provisions relating to data and determination of available funds of LEAs. 
(Sec. 6) Provides for priority payments relating to Federal property.  Directs the Secretary of Education to first use certain excess amounts to make increased payments for any LEA that:  (1) received a specified payment FY 1996; (2) serves a school district that contains all or a portion of a U.S. military academy; (3) serves a school district in which the local tax assessor has certified that at least 60 percent of the real property is federally owned; and (4) demonstrates to the satisfaction of the Secretary that such agency's per-pupil revenue derived from local sources for current expenditures is not less than that revenue for the preceding fiscal year. 
(Sec. 7) Sets forth requirements relating to the Secretary's treatment of certain impact aid payments.  Prohibits the Secretary from requiring repayment of such payments in certain cases. 
(Sec. 8) Sets forth a special rule relating to availability of funds for a certain LEA in New Jersey, under specified Federal law relating to impact aid. 
(Sec. 9) Directs the Secretary to compute certain impact aid payments to LEAs on the basis of a corrected local contribution rate, under specified conditions. 
(Sec. 10) Amends ESEA with respect to State equalization plans.
Impact Aid Technical Amendments of 1996