Title 34—Education--Volume 1
PART 222—IMPACT AID PROGRAMS
§ 222.1   What is the scope of this part?
The regulations in this part govern the provision of financial assistance under title VIII of the Elementary and Secondary Education Act of 1965 (ESEA) to local educational agencies (LEAs) in areas affected by Federal activities.
§ 222.2   What definitions apply to this part?
(a)(1) The following terms defined in section 8013 of the Act apply to this part:
(2) The following term defined in § 222.30 applies to this part:
(b) The following terms defined in section 9101 of the ESEA (General Provisions) also apply to this part:
(c) In addition, the following definitions apply to this part:
Act means title VIII of the Elementary and Secondary Education Act of 1965 (ESEA), as amended.
Applicant means any LEA that files an application for financial assistance under section 8002 or section 8003 of the Act and the regulations in this part implementing those provisions. Except as provided in section 8005(d)(4) of the Act, an SEA may be an applicant for assistance under section 8003 only if the SEA directly operates and maintains facilities for providing free public education for the children it claims in its application.
Application means a complete and signed application in the form approved by the Secretary, filed by an applicant.
Federally connected children means children described in section 8003 or section 8010(c)(2) of the Act.
Federal property. (1) The term means—
(i) Federal property described in section 8013; and
(ii) Ships that are owned by the United States and whose home ports are located upon Federal property described in this definition.
(2) Notwithstanding paragraph (1) of this definition, for the purpose of section 8002 the term does not include—
(i) Any real property that the United States does not own in fee simple, except for Indian lands described in section 8013(7), and transferred property described in section 8002(d); and
(ii) Real property described in section 8002(c) (real property with respect to which payments are being made under section 13 of the Tennessee Valley Authority Act of 1933).
Fiscally dependent LEA means an LEA that does not have the final authority to determine the amount of revenue to be raised from local sources for current expenditure purposes.
Fiscally independent LEA means an LEA that has the final authority to determine the amount of revenue to be raised from local sources for current expenditure purposes within the limits established by State law.
Local educational agency (LEA) is defined in section 8013(9). Except for an SEA qualifying under section 8005(d)(4), the term includes an SEA only so long as—
(1) The SEA directly operates and maintains the facilities for providing free public education for the children it claims in its application;
(2) The children claimed by the SEA actually are attending those State-operated facilities; and
(3) The SEA does not, through a tuition arrangement, contract, or by any other means, pay another entity to operate and maintain facilities for those children.
Local real property tax rate for current expenditure purposes. (1) For a fiscally independent LEA, the term means the entire tax levied on real property within the LEA, if all but a de minimis amount of the total proceeds from the tax levy are available to that LEA for current expenditures (as defined in section 8013).
(2) For a fiscally dependent LEA, the term means the following:
(i) The entire tax levied by the general government on real property if all but a de minimis amount of the total proceeds from that tax levy are available to the LEA for current expenditures (as defined in section 8013);
(ii) That portion of a local real property tax rate designated by the general government for current expenditure purposes (as defined in section 8013); or
(iii) If no real property tax levied by the general government meets the criteria in paragraphs (2)(i) or (ii) of this definition, an imputed tax rate that the Secretary determines by—
(A) Dividing the total local real property tax revenue available for current expenditures of the general government by the total revenue from all local sources available for current expenditures of the general government;
(B) Multiplying the figure obtained in paragraph (2)(iii)(A) of this definition by the revenue received by the LEA for current expenditures (as defined in section 8013) from the general government; and
(C) Dividing the figure obtained in paragraph (2)(iii)(B) of this definition by the total current actual assessed value of all real property in the district.
(3) The term does not include any portion of a tax or revenue that is restricted to or dedicated for any specific purpose other than current expenditures (as defined in section 8013).
Membership means the following:
(1)(i) The definition given to the term by State law; or
(ii) If State law does not define the term, the number of children listed on an LEA's current enrollment records on its survey date(s).
(2) The term includes children for whom the applicant is responsible for providing a free public education, but who are attending schools other than those operated by the applicant under a tuition arrangement described in paragraph (4) of the definition of “free public education” in § 222.30.
(3) The term does not include children who—
(i) Have never attended classes in schools of the LEA or of another educational entity with which the LEA has a tuition arrangement;
(ii) Have permanently left the LEA;
(iii) Otherwise have become ineligible to attend classes there; or
(iv) Attend the schools of the applicant LEA under a tuition arrangement with another LEA that is responsible for providing them a free public education; or
(v) Reside in a State other than the State in which the LEA is located, unless the student is covered by the provisions of—
(A) Section 7010(c) of the Act; or
(B) A formal State tuition or enrollment agreement.
Parent employed on Federal property. (1) The term means:
(i) An employee of the Federal government who reports to work on, or whose place of work is located on, Federal property, including a Federal employee who reports to an alternative duty station on the survey date, but whose regular duty station is on Federal property.
(ii) A person not employed by the Federal government but who spends more than 50 percent of his or her working time on Federal property (whether as an employee or self-employed) when engaged in farming, grazing, lumbering, mining, or other operations that are authorized by the Federal government, through a lease or other arrangement, to be carried out entirely or partly on Federal property.
(2) Except as provided in paragraph (1)(ii) of this definition, the term does not include a person who is not employed by the Federal government and reports to work at a location not on Federal property, even though the individual provides services to operations or activities authorized to be carried out on Federal property.
Real property. (1) The term means—
(i) Land; and
(ii) Improvements (such as buildings and appurtenances to those buildings, railroad lines, utility lines, pipelines, and other permanent fixtures), except as provided in paragraph (2).
(2) The term does not include—
(i) Improvements that are classified as personal property under State law; or
(ii) Equipment and movable machinery, such as motor vehicles, movable house trailers, farm machinery, rolling railroad stock, and floating dry docks, unless that equipment or movable machinery is classified as real property or subject to local real property taxation under State law.
Revenues derived from local sources. (1) The term means—
(i) Tax funds derived from real estate; and
(ii) Other taxes or receipts that are received from the county, and any other local tax or miscellaneous receipts.
(2)(i) For the purpose of paragraph (1)(i) of this definition, the term tax funds derived from real estate means—
(A) Locally received funds that are derived from local taxation of real property;
(B) Tax funds that are received on account of Wherry-Spence housing projects (12 U.S.C. 1702 et seq. ) located on private property; and
(C) All local real property tax funds that are received from either the county or the State, serving as a collecting agency, and that are returned to the LEA for expenditure by that agency.
(ii) The term does not include—
(A) Any payments under this Act or the Johnson-O'Malley Act (25 U.S.C. 452);
(B) Tax payments that are received on account of Wherry-Spence housing projects located on federally owned property; or
(C) Local real property tax funds that are received by the State and distributed to LEAs on a per-pupil or formula basis.
State aid means any contribution, no repayment of which is expected, made by a State to or on behalf of an LEA within the State for the support of free public education.
Uniformed services means the United States Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration, and Public Health Service.
§ 222.3   How does a local educational agency apply for assistance under section 8002 or 8003 of the Act?
An LEA must meet the following application requirements to be considered for a payment under section 8002 or 8003:
(a) Except as provided in paragraphs (b) and (d) of this section, on or before January 31 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003, the LEA must—
(1) File with the Secretary a complete and signed application for payment under section 8002 or section 8003; and
(2) Certify to the Secretary that it will file, and file, a copy of the application referred to in paragraph (a) of this section with its SEA.
(b)(1) If any of the following events that give rise to eligibility for payment occur after the filing deadline in paragraph (a)(1) of this section, an LEA must file a complete and signed application within the time limits required by paragraph (b)(2) of this section:
(i) The United States Government initiates or reactivates a Federal activity, or acquires real property.
(ii) The United States Congress enacts new legislation.
(iii) A reorganization of school districts takes place.
(iv) Property, previously determined by the Secretary not to be Federal property, is determined in writing by the Secretary to be Federal property.
(2) Except as provided in paragraph (d) of this section, within 60 days after the applicable event occurs but not later than June 30 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003, the LEA must—
(i) File an application with the Secretary as permitted by paragraph (b)(1) of this section; and
(ii) File a copy of that application with its SEA.
(c)(1) If the SEA wishes to notify the Secretary of any inconsistencies or other concerns with an LEA's application, the SEA must do so—
(i) For an application subject to the filing deadlines in paragraph (a)(1) of this section, on or before February 15 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003; and
(ii) On or before fifteen days following the date by which an application subject to the filing deadlines in paragraph (b) of this section must be filed.
(2) The Secretary does not process for payment a timely filed application until any concerns timely raised by the SEA are resolved. If the Secretary does not receive comments or notification from the SEA by the applicable deadline set forth in paragraph (c)(1) of this section, the Secretary assumes that the data and statements in the application are, to the best of the SEA's knowledge, true, complete, and correct.
(d) If a filing date in this section falls on a Saturday, Sunday, or Federal holiday, the deadline for filing is the next succeeding business day.
§ 222.4   How does the Secretary determine when an application is timely filed?
To be timely filed under § 222.3, an application must be received by the Secretary on or before the applicable filing date.
§ 222.5   When may a local educational agency amend its application?
(a) An LEA may amend its application following any of the events described in § 222.3(b)(1) by submitting a written request to the Secretary and a copy to its SEA no later than the earlier of the following events:
(1) The 60th day following the applicable event.
(2) By June 30 of the Federal fiscal year preceding the fiscal year for which the LEA seeks assistance.
(b) The LEA also may amend its application based on actual data regarding eligible Federal properties or federally connected children if—
(1) Those data were not available at the time the LEA filed its application ( e.g., due to a second membership count of students) and are acceptable to the Secretary; and
(2) The LEA submits a written request to the Secretary with a copy to its SEA no later than the end of the Federal fiscal year preceding the fiscal year for which the LEA seeks assistance.
§ 222.6   Which applications does the Secretary accept?
(a) The Secretary accepts or approves for payment any otherwise approvable application under section 8002 or section 8003 that is timely filed with the Secretary in accordance with §§ 222.3, 222.4, and 222.5, as applicable.
(b) The Secretary does not accept or approve for payment any section 8002 or section 8003 application that is not timely filed with the Secretary as described in paragraph (a) of this section, except as follows:
(1) The Secretary accepts and approves for payment any otherwise approvable application filed within—
(i) 60 days from the application deadline established in § 222.3; or
(ii) 60 days from the date of the Secretary's written notice of an LEA's failure to comply with the applicable filing date.
(2) The Secretary reduces the payment for applications described in paragraph (b)(1) of this section by 10 percent of the amount that would have been paid if the LEA had timely filed the application.
§ 222.7   What information may a local educational agency submit after the application deadline?
(a) General. Except as indicated in paragraph (b) of this section, the Secretary does not consider information submitted by an applicant after the deadlines prescribed in this subpart for submission of applications and amendments to applications.
(b) Information solicited by the Secretary. The Secretary may solicit from an applicant at any time additional information to process an application.
§ 222.8   What action must an applicant take upon a change in its boundary, classification, control, governing authority, or identity?
(a) Any applicant that is a party to an annexation, consolidation, deconsolidation, merger, or other similar action affecting its boundaries, classification, control, governing authority, or identity must provide the following information to the Secretary as soon as practicable:
(1) A description of the character and extent of the change.
(2) The effective date of the change.
(3) Full identification of all predecessor and successor LEAs.
(4) Full information regarding the disposition of the assets and liabilities of all predecessor LEAs.
(5) Identification of the governing body of all successor LEAs.
(6) The name and address of each authorized representative officially designated by the governing body of each successor LEA for purposes of the Act.
(b) If a payment is made under section 8002 or 8003 to an LEA that has ceased to be a legally constituted entity during the regular school term due to an action described in paragraph (a) of this section, the LEA may retain that payment if—
(1) An adjustment is made in the payment of a successor LEA to account for the payment to the predecessor LEA; or
(2)(i) The payment amount does not exceed the amount the predecessor LEA would have been eligible to receive if the change in boundaries or organization had not taken place; and
(ii) A successor LEA is not an eligible applicant.
(c) A predecessor LEA receiving any portion of a payment under section 8002 or 8003 that exceeds the amount allowed by paragraph (b)(2)(i) of this section must return the excessive portion to the Secretary, unless the Secretary determines otherwise under section 8012 of the Act.
§ 222.9   What records must a local educational agency maintain?
Except as otherwise provided in § 222.10—
(a) An LEA must maintain adequate written records to support the amount of payment it received under the Act for any fiscal year;
(b) On request, the LEA must make its records available to the Secretary for the purpose of examination or audit; and
(c) Each applicant must submit such reports and information as the Secretary may require to determine the amount that the applicant may be paid under the Act.
§ 222.10   How long must a local educational agency retain records?
An LEA must retain the records described in § 222.9 until the later of—
(a) Three years after the last payment for a fiscal year; or
(b) If the records have been questioned on Federal audit or review, until the question is finally resolved and any necessary adjustments to payments have been made.
§ 222.11   How does the Secretary recover overpayments?
Except as otherwise provided in §§ 222.12-222.18, the Secretary adjusts for and recovers overpayments as follows:
(a) If the Secretary determines that an LEA has received a payment in excess of what it should have received under the Act and this part, the Secretary deducts the amount of the overpayment from subsequent payments for which the LEA is eligible under the Act.
(b)(1) If the LEA is not eligible for subsequent payments under the Act, the LEA must promptly refund the amount of the overpayment to the Secretary.
(2) If the LEA does not promptly repay the amount of the overpayment or promptly enter into a repayment agreement with the Secretary, the Secretary may use the procedures in 34 CFR part 30 to offset that amount against payments from other Department programs or, under the circumstances permitted in part 30, to request that another agency offset the debt.
§ 222.12   What overpayments are eligible for forgiveness under section 8012 of the Act?
(a) The Secretary considers as eligible for forgiveness under section 8012 of the Act (“eligible overpayment”) any amount that is more than an LEA was eligible to receive for a particular fiscal year under the Act, except for the types of overpayments listed in § 222.13.
(b) The Secretary applies §§ 222.14-222.18 in forgiving, in whole or part, an LEA's obligation to repay an eligible overpayment that resulted from error either by the LEA or the Secretary.
§ 222.13   What overpayments are not eligible for forgiveness under section 8012 of the Act?
The Secretary does not consider as eligible for forgiveness under section 8012 of the Act any overpayment caused by an LEA's failure to expend or account for funds properly under the following laws and regulations:
(a) Section 8003(d) of the Act (implemented in subpart D of this part) for certain federally connected children with disabilities.
(b) Section 8007 of the Act for construction.
§ 222.14   What requirements must a local educational agency meet for an eligible overpayment to be forgiven in whole or part?
The Secretary forgives an eligible overpayment, in whole or part as described in § 222.18, if—
(a) An LEA submits to the Department's Impact Aid Program office a written request for forgiveness by the later of—
(1) Thirty days from the LEA's initial receipt of a written notice of the overpayment; or
(2) September 2, 1997;
(b) The LEA submits to the Department's Impact Aid Program office the information and documentation described in § 222.16 by the deadlines described in paragraph (a) of this section, or other time limit established in writing by the Secretary due to lack of availability of the information and documentation; and
(c) The Secretary determines under § 222.17 that—
(1) In the case either of an LEA's or the Department's error, repayment of the LEA's total eligible overpayments will result in an undue financial hardship on the LEA and seriously harm the LEA's educational program; or
(2) In the case of the Department's error, determined on a case-by-case basis, repayment would be manifestly unjust (“manifestly unjust repayment exception”).
§ 222.15   How are the filing deadlines affected by requests for other forms of relief?
Unless the Secretary (or the Secretary's delegatee) extends the applicable time limit in writing—
(a) A request for forgiveness of an overpayment under § 222.14 does not extend the time within which an applicant must file a request for an administrative hearing under § 222.151; and
(b) A request for an administrative hearing under § 222.151, or for reconsideration under § 222.152, does not extend the time within which an applicant must file a request for forgiveness under § 222.14.
§ 222.16   What information and documentation must a local educational agency submit for an eligible overpayment to be considered for forgiveness?
(a) Every LEA requesting forgiveness must submit, within the time limits established under § 222.14(b), the following information and documentation for the fiscal year immediately preceding the date of the forgiveness request (“preceding fiscal year”):
(1) A copy of the LEA's annual financial report to the State.
(2) The LEA's local real property tax rate for current expenditure purposes, as described in § 222.17(b).
(3) The average local real property tax rate of all LEAs in the State.
(4) The average per pupil expenditure (APPE) of the LEA, calculated by dividing the LEA's aggregate current expenditures by the total number of children in average daily attendance for whom the LEA provided a free public education.
(5) The APPE of the State, as defined in section 8013 of the ESEA.
(b) An LEA requesting forgiveness under § 222.14(c)(2) (manifestly unjust repayment exception), or § 222.17(a)(3) (no present or prospective ability to repay), also must submit written information and documentation in specific support of its forgiveness request under those provisions within the time limits established under § 222.14(b).
§ 222.17   How does the Secretary determine undue financial hardship and serious harm to a local educational agency's educational program?
(a) The Secretary determines that repayment of an eligible overpayment will result in undue financial hardship on an LEA and seriously harm its educational program if the LEA meets the requirements in paragraph (a)(1), (2), or (3) of this section.
(1) An LEA other than an LEA described in paragraphs (a)(2) and (3) of this section meets the requirements of paragraph (a) of this section if—
(i) The LEA's eligible overpayments on the date of its request total at least $10,000;
(ii) The LEA's local real property tax rate for current expenditure purposes, for the preceding fiscal year, is equal to or higher than the State average local real property tax rate for that preceding fiscal year; and
(iii) The LEA's average per pupil expenditure (APPE) (as described in § 222.16(a)(4)) for the preceding fiscal year is lower than the State APPE (as described in § 222.16(a)(5)) for that preceding fiscal year.
(2) The following LEAs qualify under paragraph (a) of this section if they meet the requirements in paragraph (a)(1)(i) of this section and their APPE (as described in § 222.16(a)(4)) for the preceding fiscal year does not exceed 125 percent of the State APPE (as described in § 222.16(a)(5)) for that preceding fiscal year:
(i) An LEA with boundaries that are the same as a Federal military installation.
(ii) Other LEAs with no local real property tax revenues, or with minimal local real property tax revenues per pupil due to substantial amounts of Federal property in the LEA as compared with the average amount of those revenues per pupil for all LEAs in the State.
(3) An LEA qualifies under paragraph (a) of this section if neither the successor nor the predecessor LEA has the present or prospective ability to repay the eligible overpayment.
(b) The Secretary uses the following methods to determine a tax rate for the purposes of paragraph (a)(1)(ii) of this section:
(1) If an LEA is fiscally independent, the Secretary uses actual tax rates if all the real property in the taxing jurisdiction of the LEA is assessed at the same percentage of true value. In the alternative, the Secretary computes a tax rate for fiscally independent LEAs by using the methods described in §§ 222.67-222.69.
(2) If an LEA is fiscally dependent, the Secretary imputes a tax rate using the method described in § 222.70(b).
§ 222.18   What amount does the Secretary forgive?
For an LEA that meets the requirements of § 222.14(a) (timely filed forgiveness request) and § 222.14(b) (timely filed information and documentation), the Secretary forgives an eligible overpayment as follows:
(a) Forgiveness in whole. The Secretary forgives the eligible overpayment in whole if the Secretary determines that the LEA meets—
(1) The requirements of § 222.17 (undue financial hardship), and the LEA's current expenditure closing balance for the LEA's fiscal year immediately preceding the date of its forgiveness request (“preceding fiscal year”) is ten percent or less of its total current expenditures (TCE) for that year; or
(2) The manifestly unjust repayment exception in § 222.14(c)(2).
(b) Forgiveness in part. (1) The Secretary forgives the eligible overpayment in part if the Secretary determines that the LEA meets the requirements of § 222.17 (undue financial hardship), and the LEA's preceding fiscal year's current expenditure closing balance is more than ten percent of its TCE for that year.
(2) For an eligible overpayment that is forgiven in part, the Secretary—
(i) Requires the LEA to repay the amount by which the LEA's preceding fiscal year's current expenditure closing balance exceeded ten percent of its preceding fiscal year's TCE (“calculated repayment amount”); and
(ii) Forgives the difference between the calculated repayment amount and the LEA's total overpayments.
(3) For the purposes of this section, “current expenditure closing balance” means an LEA's closing balance before any revocable transfers to non-current expenditure accounts, such as capital outlay or debt service accounts.
The Secretary calculates the amount that the LEA must repay by determining the amount by which the preceding fiscal year's closing balance exceeds 10 percent of the preceding year's TCE. This calculation is made by subtracting 10 percent of the LEA's TCE ($150,000) from the closing balance ($250,000), resulting in a difference of $100,000 that the LEA must repay. The Secretary then totals the eligible overpayment amounts ($200,000 + $300,000), resulting in a total amount of $500,000. The Secretary subtracts the calculated repayment amount ($100,000) from the total of the two overpayment balances ($500,000), resulting in $400,000 that the Secretary forgives.
§ 222.19   What other statutes and regulations apply to this part?
(a) The following Federal statutes and regulations on nondiscrimination apply to assistance under this part:
(1) The provisions of title VI of the Civil Rights Act of 1964 (Pub. L. 88-352) (prohibition of discrimination on the basis of race, color or national origin), and the implementing regulations (34 CFR part 100).
(2) The provisions of title IX of the Education Amendments of 1972 (Pub. L. 92-318) (prohibition of discrimination on the basis of sex), and the implementing regulations (34 CFR part 106).
(3) The provisions of section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112) (prohibition of discrimination on the basis of disability), and the implementing regulations (34 CFR part 104).
(4) The provisions of title II of the Americans with Disabilities Act of 1990 (Pub. L. 101-336) (prohibition of discrimination on basis of disability), and any implementing regulations.
(5) The provisions of the Age Discrimination Act of 1975 (Pub. L. 94-135) (prohibition of age discrimination), and any implementing regulations.
(b) The following Education Department General Administrative Regulations (EDGAR):
(1) Subparts A, E, F, and §§ 75.900 and 75.910 of 34 CFR part 75 (Direct Grant Programs) for payments under sections 8003(d) (payments for federally connected children with disabilities), 8007 (construction), and 8008 (school facilities), except for the following:
(i) Section 75.603 does not apply to payments under section 8007 (construction) or section 8008 (school facilities).
(ii) Section 75.605 does not apply to payments under section 8007 (construction).
(iii) Sections 75.600-602, 75.604, and 75.606-617 apply to payments under section 8007 (construction) only to the extent that funds received under that section are used for major renovations or to construct new school facilities.
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 82 (New Restrictions on Lobbying).
(4) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(c) 2 CFR part 180, as adopted and amended as regulations of the Department in 2 CFR part 3485 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)).
(d) 2 CFR part 200, as adopted in 2 CFR part 3474 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), for payments under sections 8003(d) (payments for federally connected children with disabilities), 8007 (construction), and 8008 (school facilities).
§ 222.20   What definitions apply to this subpart?
In addition to the terms referenced or defined in § 222.2, the following definitions apply to this subpart:
Acquisition or acquired by the United States. (1) The term means—
(i) The receipt or taking by the United States of ownership in fee simple of real property by condemnation, exchange, gift, purchase, transfer, or other arrangement;
(ii) The receipt by the United States of real property as trustee for the benefit of individual Indians or Indian tribes; or
(iii) The imposition by the United States of restrictions on sale, transfer, or exchange of real property held by individual Indians or Indian tribes.
(2) The definition of “acquisition” in 34 CFR 77.1(c) (Definitions that Apply to Department Regulations) of this title does not apply to this subpart.
Assessed value. For the purpose of determining eligibility under section 8002(a)(1) and § 222.21, the following definition applies:
(1) The term means the value that is assigned to real property, for the purpose of generating local real property tax revenues for current expenditures (as defined in section 8013 of the Act), by a State or local official who is legally authorized to determine that assessed value.
(2) The term does not include—
(i) A value assigned to tax-exempt real property;
(ii) A value assigned to real property for the purpose of generating other types of revenues, such as payments in lieu of taxes (PILOTs);
(iii) Fair market value, or a percentage of fair market value, of real property unless that value was actually used to generate local real property tax revenues for current expenditures (as defined in section 8013); or
(iv) A value assigned to real property in a condemnation or other court proceeding, or a percentage of that value, unless that value was actually used to generate local real property tax revenues for current expenditures (as defined in section 8013).
Eligible Federal property. (1) The term means “Federal property” as defined in § 222.2(c) for section 8002, which meets the following additional requirements:
(i) The United States has acquired the Federal property since 1938; and
(ii) The Federal property was not acquired by exchange for other Federal property that the United States owned within the school district before 1939.
(2) In addition, for local educational agencies (LEAs) that are eligible under § 222.21(a)(2), the term also means land acquired by the United States Forest Service between 1915 and 1990.
§ 222.21   What requirements must a local educational agency meet concerning Federal acquisition of real property within the local educational agency?
(a) For an LEA with an otherwise approvable application to be eligible to receive financial assistance under section 8002 of the Act, the LEA must meet the requirements in subpart A of this part and § 222.22. In addition, unless otherwise provided by statute as meeting the requirements in section 8002(a)(1)(C), the LEA must document—
(1) That the United States owns or has acquired “eligible Federal property” within the LEA, that has an aggregate assessed value of 10 percent or more of the assessed value of—
(i) All real property in that LEA, based upon the assessed values of the eligible Federal property and of all real property (including that Federal property) on the date or dates of acquisition of the eligible Federal property; or
(ii) All real property in the LEA as assessed in the first year preceding or succeeding acquisition, whichever is greater, only if—
(A) The assessment of all real property in the LEA is not made at the same time or times that the Federal property was so acquired and assessed; and
(B) State law requires an assessment be made of property so acquired; or
(2)(i) That, as demonstrated by written evidence from the United States Forest Service satisfactory to the Secretary, the LEA contains between 20,000 and 60,000 acres of land that has been acquired by the United States Forest Service between 1915 and 1990; and
(ii) That the LEA serves a county chartered by State law in 1875 or 1890.
(b) “Federal property” described in section 8002(d) (certain transferred property) is considered to be owned by the United States for the purpose of paragraph (a) of this section.
(c) If, during any fiscal year, the United States sells, transfers, is otherwise divested of ownership of, or relinquishes an interest in or restriction on, eligible Federal property, the Secretary redetermines the LEA's eligibility for the following fiscal year, based upon the remaining eligible Federal property, in accordance with paragraph (a) of this section. This paragraph does not apply to a transfer of real property by the United States described in section 8002(d).
(d) Except as provided under paragraph (a)(2) of this section, the Secretary's determinations and redeterminations of eligibility under this section are based on the following documents:
(1) For a new section 8002 applicant or newly acquired eligible Federal property, only upon—
(i) Original records as of the time(s) of Federal acquisition of real property, prepared by a legally authorized official, documenting the assessed value of that real property;
(ii) Facsimiles, such as microfilm, or other reproductions of those records; or
(iii) If the documents specified in paragraphs (d)(1)(i) and (ii) are unavailable, other records that the Secretary determines to be appropriate and reliable for establishing eligibility under section 8002(a)(1) of the Act, such as Federal agency records or local historical records.
(2) For a redetermination of an LEA's eligibility under section 8002(a)(1), only upon—
(i) Records described in paragraph (d)(1) of this section; or
(ii) Department records.
(e) The Secretary does not base the determination or redetermination of an LEA's eligibility under this section upon secondary documentation that is in the nature of an opinion, such as estimates, certifications, or appraisals.
§ 222.22   How does the Secretary treat compensation from Federal activities for purposes of determining eligibility and payments?
(a) An LEA with an otherwise approvable application is eligible to receive assistance under section 8002 for a fiscal year only if the LEA meets the requirements in subpart A of these regulations and § 222.21, and is not substantially compensated, for the loss in revenue resulting from Federal ownership of real property by increases in revenue accruing to the LEA during the previous fiscal year from Federal activities with respect to the eligible Federal property in the LEA.
(b) The Secretary considers that an LEA is substantially compensated by increases in revenue from Federal activities with respect to the eligible Federal property if—
(1) The LEA received revenue during the preceding fiscal year that is generated from activities in or on the eligible Federal property; and
(2) The revenue described in paragraph (b)(1) of this section equals or exceeds the maximum payment amount under section 8002(b) for the fiscal year for which the LEA seeks assistance.
(c) If an LEA described in paragraph (a) of this section received revenue described in paragraph (b)(1) of this section during the preceding fiscal year that, when added to the LEA's projected total section 8002 payment for the fiscal year for which the LEA seeks assistance, exceeds the maximum payment amount under section 8002(b) for the fiscal year for which the LEA seeks assistance, the Secretary reduces the LEA's projected section 8002 payment by an amount equal to that excess amount.
(d) For purposes of this section, the amount of revenue that an LEA receives during the previous fiscal year from activities conducted on Federal property includes payments received by any Federal agency due to activities on Federal property, including forestry, mining, and grazing, but does not include revenue from:
(1) Payments received by the LEA from the Secretary of Defense to support—
(i) The operation of a domestic dependent elementary or secondary school; or
(ii) The provision of a free public education to dependents of members of the Armed Forces residing on or near a military installation;
(2) Payments from the Department; or
(3) Payments in Lieu of Taxes from the Department of Interior under 31 U.S.C. 6901 et seq.
§ 222.23   How are consolidated LEAs treated for the purposes of eligibility and payment under section 7002?
(a) Eligibility. An LEA formed by the consolidation of one or more LEAs is eligible for section 7002 funds, notwithstanding section 222.21(a)(1), if—
(1) The consolidation occurred prior to fiscal year 1995 or after fiscal year 2005; and
(2) At least one of the former LEAs included in the consolidation:
(i) Was eligible for section 7002 funds in the fiscal year prior to the consolidation; and
(ii) Currently contains Federal property that meets the requirements of § 222.21(a) within the boundaries of the former LEA or LEAs.
(b) Documentation required. In the first year of application following the consolidation, an LEA that meets the requirements of paragraph (a) of this section must submit evidence that it meets the requirements of paragraphs (a)(1) and (a)(2)(ii) of this section.
(c) Basis for foundation payment. (1) The foundation payment for a consolidated district is based on the total section 7002 payment for the last fiscal year for which the former LEA received payment. When more than one former LEA qualifies under paragraph (a)(2) of this section, the payments for the last fiscal year for which the former LEAs received payment are added together to calculate the foundation basis.
(2) Consolidated LEAs receive only a foundation payment and do not receive a payment from any remaining funds.
§ 222.24   How does a local educational agency that has multiple tax rates for real property classifications derive a single real property tax rate?
An LEA that has multiple tax rates for real property classifications derives a single tax rate for the purposes of determining its Section 7002 maximum payment by dividing the total revenues for current expenditures it received from local real property taxes by the total taxable value of real property located within the boundaries of the LEA. These data are from the fiscal year prior to the fiscal year in which the applicant seeks assistance.
§§ 222.25-222.29   [Reserved]
§ 222.30   What is “free public education”?
In addition to the terms defined in § 222.2, the following definition applies to this part:
Free public education. (1) The term means education that is provided—
(i) At public expense;
(ii)(A) As the complete elementary or secondary educational program as determined under State law through grade 12; and
(B) Preschool education, whether or not included as elementary education by State law;
(iii) In a school of the local educational agency (LEA) or under a tuition arrangement with another LEA or other educational entity; and
(iv) Under public supervision and direction, except with respect to children with disabilities.
(2) For the purpose of paragraph (1)(i) of this definition, education is provided at public expense if—
(i) There is no tuition charge to the child or the child's parents; and
(ii) Federal funds, other than Impact Aid funds and charter school startup funds, do not provide a substantial portion of the educational program, in relation to other LEAs in the State, as determined by the Secretary.
(3) For the purpose of paragraph (1)(ii) of this definition, the complete elementary or secondary educational program is the program recognized by the State as meeting all requirements for elementary or secondary education for the children claimed and, except for preschool education, does not include a program that provides only—
(i) Supplementary services or instruction; or
(ii) A portion of the required educational program.
(4) For the purpose of paragraph (1)(iii) of this definition, a tuition arrangement must—
(i) Satisfy all applicable legal requirements in the State; and
(ii) Genuinely reflect the applicant LEA's responsibility to provide a free public education to the children claimed under section 8003.
(5) For the purpose of paragraph (1)(iv) of this definition, education provided under public supervision and direction means education that is provided—
(i) In a school of the applicant LEA or another LEA; or
(ii) By another educational entity, over which the applicant LEA, or other public agency, exercises authority with respect to the significant aspects of the educational program for the children claimed. The Secretary considers significant aspects of the educational program to include administrative decisions relating to teachers, instruction, and curriculum.
§ 222.31   To which local educational agencies does the Secretary make basic support payments under section 8003(b) of the Act?
The Secretary makes payments to an LEA with an otherwise approvable application for children claimed under section 8003(b) of the Act if—
(a) The LEA meets the requirements in subpart A of these regulations and this subpart; and
(b)(1) The LEA is responsible under applicable State or Federal law for providing a free public education to those children;
(2) The LEA is providing a free public education to those children; and
(3) The State provides funds for the education of those children on the same basis as all other public school children in the State, unless permitted otherwise under section 8009 of the Act.
§ 222.32   What information does the Secretary use to determine a local educational agency's basic support payment?
(a) The Secretary determines an LEA's payment under section 8003(b) on the basis of information in the LEA's application, including information regarding the membership of federally connected children.
(b) The LEA must supply information in its timely and complete application regarding its federally connected membership on the basis of any count described in §§ 222.33 through 222.35.
§ 222.33   When must an applicant make its first or only membership count?
(a)(1) An applicant must select a day in the current school year as the survey date for making the first membership count, which must be no earlier than the fourth day of the regular school year and before January 31.
(2) The applicant must use the same survey date for all schools in the LEA.
(b) As of the survey date, the applicant must—
(1) Count the membership of its federally connected children; and
(2) Count the total membership of its children—both federally connected and non-federally connected.
(c) The data on the application resulting from the count in paragraph (b) of this section must be accurate and verifiable by the application deadline.
§ 222.34   If an applicant makes a second membership count, when must that count be made?
(a)(1) The applicant may, but is not required to, make a second count of membership.
(2) If the applicant chooses to make a second count of membership, the applicant must select a day after January 31, but no later than May 14, as the survey date for making the second membership count, and make that count in accordance with § 222.33(b).
(3) The applicant must use the same survey date for the second membership count for all schools in the LEA.
(b) The applicant may use the information obtained from a second membership count to amend its application for assistance as described in § 222.5(b).
§ 222.35   How does a local educational agency count the membership of its federally connected children?
An applicant counts the membership of its federally connected children using one of the following methods:
(a) Parent-pupil survey. An applicant may conduct a parent-pupil survey to count the membership of its federally connected children, which must be counted as of the survey date.
(1) The applicant shall conduct a parent-pupil survey by providing a form to a parent of each pupil enrolled in the LEA to substantiate the pupil's place of residence and the parent's place of employment.
(2) A parent-pupil survey form must include the following:
(i) Pupil enrollment information (this information may also be obtained from school records), including—
(A) Name of pupil;
(B) Date of birth of the pupil; and
(C) Name of public school and grade of the pupil.
(ii) Pupil residence information, including:
(A) The complete address of the pupil's residence, or other acceptable location information for that residence, such as a complete legal description, a complete U.S. Geological Survey number, or complete property tract or parcel number, or acceptable certification by a Federal agency official with access to data or records to verify the location of the Federal property; and
(B) If the pupil's residence is on Federal property, the name of the Federal facility.
(3) If any of the following circumstances apply, the parent-pupil survey form must also include the following:
(i) If the parent is employed on Federal property, except for a parent who is a member of the uniformed services on active duty, parent employment information, including—
(A) Name (as it appears on the employer's payroll record) of the parent (mother, father, legal guardian or other person standing in loco parentis ) who is employed on Federal property and with whom the pupil resides; and
(B) Name of employer, name and complete address of the Federal property on which the parent is employed (or other acceptable location information, such as a complete legal description or acceptable certification by a Federal agency).
(ii) If the parent is a member of the uniformed services on active duty, the name, rank, and branch of service of that parent.
(iii) If the parent is both an official of, and accredited by a foreign government, and a foreign military officer, the name, rank, and country of service.
(iv) If the parent is a civilian employed on a Federal vessel, the name of the vessel, hull number, homeport, and name of the controlling agency.
(4)(i) Every parent-pupil survey form must include the signature of the parent supplying the information, except as provided in paragraph (a)(4)(ii) of this section, and the date of such signature, which must be on or after the survey date.
(ii) An LEA may accept an unsigned parent-pupil survey form, or a parent-pupil survey form that is signed by a person other than a parent, only under unusual circumstances. In those instances, the parent-pupil survey form must show why the parent did not sign the survey form, and when, how, and from whom the residence and employment information was obtained. Unusual circumstances may include, but are not limited to:
(A) A pupil who, on the survey date, resided with a person without full legal guardianship of the child while the pupil's parent or parents were deployed for military duty. In this case, the person with whom the child is residing may sign the parent-pupil survey form.
(B) A pupil who, on the survey date, was a ward of the juvenile justice system. In this case, an administrator of the institution where the pupil was held on the survey date may sign the parent-pupil survey form.
(C) A pupil who, on the survey date, was an emancipated youth may sign his or her own parent-pupil survey form.
(D) A pupil who, on the survey date, was at least 18 years old but who was not past the 12th grade may sign his or her own parent-pupil survey form.
(iii) The Department does not accept a parent-pupil survey form signed by an employee of the school district who is not the student's mother, father, legal guardian or other person standing in loco parentis.
(b) Source check. A source check is a type of survey tool that groups children being claimed on the Impact Aid application by Federal property. This form is used in lieu of the parent-pupil survey form to substantiate a pupil's place of residence or parent's place of employment on the survey date.
(1) The source check must include sufficient information to determine the eligibility of the Federal property and the individual children claimed on the form.
(2) A source check may also include:
(i) Certification by a parent's employer regarding the parent's place of employment;
(ii) Certification by a military or other Federal housing official as to the residence of each pupil claimed;
(iii) Certification by a military personnel official regarding the military active duty status of the parent of each pupil claimed as active duty uniformed services; or
(iv) Certification by the Bureau of Indian Affairs (BIA) or authorized tribal official regarding the eligibility of Indian lands.
(c) Another method approved by the Secretary.
§ 222.36   How many federally connected children must a local educational agency have to receive a payment under section 8003?
(a) An LEA is eligible to receive a payment under section 8003 for a fiscal year only if the total number of eligible federally connected children for whom it provided a free public education for the preceding fiscal year was—
(1) At least 400 who were in average daily attendance (ADA); or
(2) At least 3 percent of the total number of children in ADA.
(b) An LEA is eligible to receive a payment under section 8003 for a fiscal year on behalf of federally connected children described in section 8003(a)(1)(F) or (G) only if the total number of those children for whom it provided a free public education for the preceding fiscal year was—
(1) At least 1,000 in ADA; or
(2) At least 10 percent of the total number of children in ADA.
(c) Children described in paragraph (b) of this section are counted for the purposes of paragraph (a) of this section only if the applicant LEA is eligible to receive a payment on behalf of those children under section 8003.
§ 222.37   How does the Secretary calculate the average daily attendance of federally connected children?
(a) This section describes how the Secretary computes the ADA of federally connected children for each category in section 8003 to determine an applicant's payment.
(b)(1) For purposes of this section, actual ADA means raw ADA data that have not been weighted or adjusted to reflect higher costs for specific types of students for purposes of distributing State aid for education.
(2) If an LEA provides a program of free public summer school, attendance data for the summer session are included in the LEA's ADA figure in accordance with State law or practice.
(3) An LEA's ADA count includes attendance data for children who do not attend the LEA's schools, but for whom it makes tuition arrangements with other educational entities.
(4) Data are not counted for any child—
(i) Who is not physically present at school for the daily minimum time period required by the State, unless the child is—
(A) Participating via telecommunication or correspondence course programs that meet State standards; or
(B) Being served by a State-approved homebound instruction program for the daily minimum time period appropriate for the child; or
(ii) Attending the applicant's schools under a tuition arrangement with another LEA.
(c) An LEA may determine its average daily attendance calculation in one of the following ways:
(1) If an LEA is in a State that collects actual ADA data for purposes of distributing State aid for education, the Secretary calculates the ADA of that LEA's federally connected children for the current fiscal year payment as follows:
(i) By dividing the ADA of all the LEA's children for the second preceding fiscal year by the LEA's total membership on its survey date for the second preceding fiscal year (or, in the case of an LEA that conducted two membership counts in the second preceding fiscal year, by the average of the LEA's total membership on the two survey dates); and
(ii) By multiplying the figure determined in paragraph (c)(1)(i) of this section by the LEA's total membership of federally connected children in each subcategory described in section 7003 and claimed in the LEA's application for the current fiscal year payment.
(2) An LEA may submit its total preceding year ADA data. The Secretary uses these data to calculate the ADA of the LEA's federally connected children by—
(i) Dividing the LEA's preceding year's total ADA data by the preceding year's total membership data; and
(ii) Multiplying the figure determined in paragraph (c)(2)(i) of this section by the LEA's total membership of federally connected children as described in paragraph (c)(1)(i) of this section.
(3) An LEA may submit attendance data based on sampling conducted during the previous fiscal year.
(i) The sampling must include attendance data for all children for at least 30 school days.
(ii) The data must be collected during at least three periods evenly distributed throughout the school year.
(iii) Each collection period must consist of at least five consecutive school days.
(iv) The Secretary uses these data to calculate the ADA of the LEA's federally connected children by—
(A) Determining the ADA of all children in the sample;
(B) Dividing the figure obtained in paragraph (c)(3)(iv)(A) of this section by the LEA's total membership for the previous fiscal year; and
(C) Multiplying the figure determined in paragraph (c)(3)(iv)(B) of this section by the LEA's total membership of federally connected children for the current fiscal year, as described in paragraph (c)(1)(i) of this section.
(d) An SEA may submit data to calculate the average daily attendance calculation for the LEAs in that State in one of the following ways:
(1) If the SEA distributes State aid for education based on data similar to attendance data, the SEA may request that the Secretary use those data to calculate the ADA of each LEA's federally connected children. If the Secretary determines that those data are, in effect, equivalent to attendance data, the Secretary allows use of the requested data and determines the method by which the ADA for all of the LEA's federally connected children will be calculated.
(2) An SEA may submit data necessary for the Secretary to calculate a State average attendance ratio for all LEAs in the State by submitting the total ADA and total membership data for the State for each of the last three most recent fiscal years that ADA data were collected. The Secretary uses these data to calculate the ADA of the federally connected children for each LEA in the State by—
(i)(A) Dividing the total ADA data by the total membership data for each of the three fiscal years and averaging the results; and
(B) Multiplying the average determined in paragraph (d)(2)(i)(A) of this section by the LEA's total membership of federally connected children as described in paragraph (c)(1)(i) of this section.
(e) The Secretary may calculate a State average attendance ratio in States with LEAs that would benefit from such calculation by using the methodology in paragraph (d)(2)(i) of this section.
§ 222.38   What is the maximum basic support payment that a local educational agency may receive under section 8003(b)(1)?
(a) The maximum basic support payment that an LEA may receive under section 8003(b)(1) for any fiscal year is the sum of its total weighted student units under section 8003(a)(2) for the federally connected children eligible to be counted as the basis for payment, multiplied by the greater of the following:
(1) One-half of the State average per pupil expenditure for the third fiscal year preceding the fiscal year for which the LEA seeks assistance.
(2) One-half of the national average per pupil expenditure for the third fiscal year preceding the fiscal year for which the LEA seeks assistance.
(3) The local contribution rate (LCR) based on generally comparable LEAs determined in accordance with §§ 222.39-222.41.
(4) The State average per pupil expenditure for the third preceding fiscal year multiplied by the local contribution percentage as defined in section 8013(8) of the Act for that same year.
(b) If satisfactory data from the third preceding fiscal year are not available for the expenditures described in paragraphs (a)(1) or (2), the Secretary uses data from the most recent fiscal year for which data that are satisfactory to the Secretary are available.
§ 222.39   How does a State educational agency identify generally comparable local educational agencies for local contribution rate purposes?
(a) To identify generally comparable LEAs within its State for LCR purposes, the State educational agency (SEA) for that State, after appropriate consultation with the applicant LEAs in the State, shall use data from the third fiscal year preceding the fiscal year for which the LCR is being computed to group all of its LEAs, including all applicant LEAs, as follows:
(1) Grouping by grade span/legal classification alone. Divide all LEAs into groups that serve the same grade span and then subdivide the grade span groups by legal classification, if the Secretary considers this classification relevant and sufficiently different from grade span within the State. As an alternative grade-span division, divide all LEAs into elementary, secondary, or unified grade-span groups, as appropriate, within the State.
(2) Grouping by grade span/legal classification and size. (i) Divide all LEAs into groups by grade span (or the alternative grade-span groups described in paragraph (a)(1) of this section) and legal classification, if relevant and sufficiently different from grade span and size.
(ii) List all LEAs within each group in descending order by size as measured by ADA, placing the LEA with the largest ADA at the top of the list. A State that does not tabulate actual annual ADA shall use the same formula for establishing ADA for the purpose of ranking LEAs by size as the Department has approved for the purpose of calculating payments under section 8003 for applicant LEAs in the State.
(iii) Divide each group into either two subgroups or three subgroups.
(iv) To determine the subgroups, divide each list at the point(s) that will result in as nearly equal numbers of LEAs in each subgroup as possible, so that no group is more than one LEA larger than any other group.
(3) Grouping by grade span/legal classification and location. Divide all LEAs into groups by grade span (or the alternative grade-span groups described in paragraph (a)(1) of this section) and, if relevant and sufficiently different from grade span and location, legal classification; then subdivide these groups by location, as determined by placement inside or outside a metropolitan statistical area (MSA) as defined by the U.S. Bureau of the Census. The Department will supply SEAs with lists of MSA classifications for their LEAs, and only the classifications on those lists will be recognized by the Department for the purposes of these regulations.
(4) Grouping by grade span/legal classification, size, and location. (i) Divide all LEAs into groups by grade span (or the alternative grade-span groups described in paragraph (a)(1) of this section) and, if relevant and sufficiently different from grade span, size, and location, legal classification; then subdivide these groups by size (into two or three subgroups for each grade span, as described in paragraph (a)(2) of this section); and further subdivide these groups by location (inside or outside an MSA).
(ii) In using both the size and location factors, the SEA shall subdivide according to the size factor before the location factor.
(b) After applying the following restrictions, the SEA shall compute an LCR according to the provisions of § 222.41 for each group of generally comparable LEAs identified under paragraph (a) of this section, as follows:
(1) The SEA shall not, when computing an LCR, include the following “significantly impacted” LEAs in any group of generally comparable LEAs:
(i) Any LEA having—in the third fiscal year preceding the fiscal year for which the LCR is being computed—20 percent or more of its ADA composed of children identified under section 8003(a)(1)(A)-(C).
(ii) Any LEA having—in the third fiscal year preceding the fiscal year for which the LCR is being computed—50 percent or more of its ADA composed of children identified under section 8003(a)(1)(A)-(G) who were eligible under § 222.36 to be counted as the basis for payment under section 8003.
(2) The SEA may not compute an LCR for any group that contains fewer than 10 LEAs.
(c) The LCR for a “significantly impacted” LEA described in paragraph (b)(1) of this section is the LCR of any group in which that LEA would be included based on grade span/legal classification, size, location, or a combination of these factors, if the LEA were not excluded as significantly impacted.
(d) This section does not apply to applicant LEAs located in—
(1) Puerto Rico;
(2) Wake Island;
(3) Guam;
(4) American Samoa;
(5) Any outlying area; and
(6) Any State in which there is only one LEA.
1. Characteristics of Applicant LEA. The grade span of an applicant LEA is kindergarten through grade 8 (K-8). In the applicant's State, legal classification of LEAs is based on grade span, and thus does not act to further subdivide groups of LEAs.
The ADA of the applicant LEA is above the median ADA of LEAs serving only K-8 in the State.
The applicant LEA is located outside an MSA.
2. Characteristics of Other LEAs Serving Same Grade Span. The SEA of the applicant's State groups all LEAs in its State according to the factors in § 222.39.
a. The SEA identifies the following groups:
(i) One hundred and one LEAs serve only K-8. The SEA has identified a group of 50 LEAs having an ADA above the median ADA for the group of 101, one LEA having an ADA at the median, and a group of 50 LEAs having an ADA below the median ADA; and according to § 222.39(a)(2), the SEA considers 51 LEAs to have an ADA below the median ADA.
(ii) Of the 101 LEAs in the group, the SEA has identified a group of 64 LEAs as being inside an MSA and a group of 37 LEAs as being outside an MSA.
(iii) Among the group of 50 LEAs having an ADA above the median, the SEA has identified a group of 35 LEAs as being inside an MSA and a group of 15 LEAs as being outside an MSA.
(iv) Among the group of 51 LEAs having an ADA at or below the median, the SEA has identified a group of 29 LEAs as being inside an MSA and 22 LEAs as being outside an MSA.
(v) One LEA has 20 percent of its ADA composed of children identified under section 8003(a)(1)(A)-(C) and, therefore, must be excluded from any group it falls within before the SEA computes an LCR for the group. The LEA has an ADA below the median ADA and is located outside an MSA.
b. On the basis of § 222.41, the SEA computes the LCR for each group of generally comparable LEAs that the SEA has identified.
§ 222.40   What procedures does a State educational agency use for certain local educational agencies to determine generally comparable local educational agencies using additional factors, for local contribution rate purposes?
(a) To use the procedures in this section, the applicant LEA, for the year of application, must either—
(1)(i) Be located entirely on Federal land; and
(ii) Be raising either no local revenues or an amount of local revenues the Secretary determines to be minimal; or
(2)(i) Be located in a State where State aid makes up no more than 40 percent of the State average per pupil expenditure in the third fiscal year preceding the fiscal year for which the LCR is being computed;
(ii) In its application, have federally connected children identified under section 8003(a)(1)(A)-(C) equal to at least 20 percent of its total ADA; and
(iii) In its application, have federally connected children identified under section 8003(a)(1)(A)-(G) who were eligible to be counted as the basis for payment under section 8003 equal to at least 50 percent of its total ADA.
(b) If requested by an applicant LEA described in paragraph (a) of this section, the SEA follows the procedures in this section, in consultation with the LEA, to determine generally comparable LEAs using additional factors for the purpose of calculating and certifying an LCR for that LEA.
(c) The SEA identifies—
(1) The subgroup of generally comparable LEAs from the group identified under § 222.39(a)(2) (grouping by grade span/legal classification and size) that includes the applicant LEA; or
(2) For an LEA described in paragraph (a) of this section that serves a different span of grades from all other LEAs in its State (and therefore cannot match any group of generally comparable LEAs under § 222.39(a)(2)), for purposes of this section only, a group using only legal classification and size as measured by ADA.
(d) From the subgroup described in paragraph (c) of this section, the SEA then identifies 10 or more generally comparable LEAs that share one or more additional common factors of general comparability with the applicant LEA described in paragraph (a) of this section, as follows:
(1)(i) The SEA must consider one or more generally accepted, objectively defined factors that affect the applicant's cost of educating its children. Examples of such cost-related factors include location inside or outside an MSA, an unusually large geographical area or an economically depressed area, sparsity or density of population, and the percentage of its students who are from low-income families or who are children with disabilities, neglected or delinquent children, low-achieving children, or children with limited English proficiency.
(ii) The SEA may not consider cost-related factors that can be varied at the discretion of the applicant LEA or its generally comparable LEAs or factors dependent on the wealth of the applicant LEA or its generally comparable LEAs. Examples of factors that may not be considered include special alternative curricular programs, pupil-teacher ratio, and per pupil expenditures.
(iii) If an SEA proposes to use one or more special additional factors to determine generally comparable LEAs, the SEA must submit, with its annual submission of generally comparable data to the Department, its rationale for selecting the additional factor or factors and describe how they affect the cost of education in the LEA.
(2) The SEA applies the factor or factors of general comparability identified under paragraph (d)(1)(i) of this section in one of the following ways in order to identify 10 or more generally comparable LEAs for the eligible applicant LEA, none of which may be significantly impacted LEAs:
(i) The SEA identifies all of the LEAs in the group to which the eligible applicant LEA belongs under § 222.39(a)(2) that share the factor or factors. If the subgroup containing the eligible applicant LEA includes at least 10 other LEAs (excluding significantly impacted LEAs), it will be the eligible applicant LEA's new group of generally comparable LEAs. The SEA computes the LCR for the eligible applicant LEA using the data for all of the LEAs in the subgroup except the eligible applicant LEA.
(ii) After the SEA identifies all of the LEAs in the group to which the eligible applicant LEA belongs under § 222.39(a)(2) that share the factor or factors, the SEA then systematically orders by ADA all of the LEAs in the group that includes the eligible applicant LEA. The SEA may further divide the ordered LEAs into subgroups by using logical division points ( e.g., the median, quartiles, or standard deviations) or a continuous interval of the ordered LEAs ( e.g., a percentage or a numerical range). If the subgroup containing the eligible applicant LEA includes at least 10 other LEAs (excluding significantly impacted LEAs), it will be the eligible applicant LEA's new group of generally comparable LEAs. The SEA computes the LCR for the eligible applicant LEA using the data for all of the LEAs in the subgroup except the eligible applicant LEA.
(iii) The SEA may apply more than one factor of general comparability in identifying a new group of 10 or more generally comparable LEAs for the eligible applicant LEA. If the subgroup containing the eligible applicant LEA includes at least 10 other LEAs (excluding significantly impacted LEAs), it will be the eligible applicant LEA's new group of generally comparable LEAs. The SEA computes the LCR for the eligible applicant LEA using the data from all of the LEAs in the subgroup except the eligible applicant LEA.
(e)(1) Using the new group of generally comparable LEAs selected under paragraph (d) of this section, the SEA computes the LCR for the eligible applicant LEA according to the provisions of § 222.41.
(2) The SEA certifies the resulting LCR by submitting that LCR to the Secretary and providing the Secretary a description of the additional factor or factors of general comparability and the data used to identify the new group of generally comparable LEAs.
(3) The Secretary reviews the data submitted by the SEA, and accepts the LCR for the purpose of use under section 8003(b)(1)(C)(iii) in determining the LEA's maximum payment under section 8003 if the Secretary determines that it meets the purposes and requirements of the Act and this part.
§ 222.41   How does a State educational agency compute and certify local contribution rates based upon generally comparable local educational agencies?
Except as otherwise specified in the Act, the SEA, subject to the Secretary's review and approval, computes and certifies an LCR for each group of generally comparable LEAs within its State that was identified using the factors in § 222.39, and § 222.40 if appropriate, as follows:
(a)(1) The SEA shall compile the aggregate local current expenditures of the comparable LEAs in each group for the third fiscal year preceding the fiscal year for which the LCR is being computed.
(2) For purposes of this section, the SEA shall consider only those aggregate current expenditures made by the generally comparable LEAs from revenues derived from local sources. No State or Federal funds may be included.
(b) The SEA shall compile the aggregate number of children in ADA to whom the generally comparable LEAs in each group provided a free public education during the third fiscal year preceding the fiscal year for which the LCR is being computed.
(c) The SEA shall divide—
(1) The aggregate current expenditures determined under paragraph (a) of this section by;
(2) The aggregate number of children determined under paragraph (b) of this section.
(d) The SEA certifies the resulting figure for each group as the LCR for that group of generally comparable LEAs to be used by the Secretary under section 8003(b)(1)(C)(iii) in determining the LEA's maximum payment amount under section 8003.
§ 222.42   [Reserved]
§ 222.43   What requirements must a local educational agency meet in order to be eligible for financial assistance under section 8003(b)(1)(F) due to unusual geographic features?
An LEA is eligible for financial assistance under section 8003(b)(1)(F) if the Secretary determines that the LEA meets all of the following requirements—
(a)(1) The LEA is eligible for a basic support payment under section 8003(b), including meeting the maintenance of effort requirements in section 8003(g) of the Act;
(2) The LEA timely applies for assistance under section 8003(b)(1)(F) and meets all other requirements of subparts A and C;
(3) The LEA is meeting the tax rate requirement in § 222.68(c) and the other applicable requirements of §§ 222.68 through 222.72; and
(4) The LEA is not in a State that takes the LEA's payment under section 8003(b)(1)(F) into account in an equalization program that qualifies under section 8009 of the Act.
(b)(1) As part of its section 8003 application, the LEA indicates in writing that it wishes to apply for an “unusual geographic” payment and it will provide the Secretary with documentation upon request that demonstrates that the LEA is unable to provide a level of education equivalent to that provided by its generally comparable LEAs because—
(i) The applicant's current expenditures are affected by unusual geographic factors; and
(ii) As a result, those current expenditures are not reasonably comparable to the current expenditures of its generally comparable LEAs.
(2) The LEA's documentation must include—
(i) A specific description of the unusual geographic factors on which the applicant is basing its request for compensation under this section and objective data demonstrating that the applicant is more severely affected by the factors than any other LEA in its State;
(ii) Objective data demonstrating the specific ways in which the unusual geographic factors affect the applicant's current expenditures so that they are not reasonably comparable to the current expenditures of its generally comparable LEAs;
(iii) Objective data demonstrating the specific ways in which the unusual geographic factors prevent the applicant from providing a level of education equivalent to that provided by its generally comparable LEAs; and
(iv) Any other information that the Secretary may require to make an eligibility determination under this section.
§ 222.44   How does the Secretary determine a maximum payment for local educational agencies that are eligible for financial assistance under section 8003(b)(1)(F) and § 222.43?
The Secretary determines a maximum payment under section 8003(b)(1)(F) for an eligible LEA, using data from the third preceding fiscal year, as follows:
(a) Subject to paragraph (b) of this section, the Secretary increases the eligible LEA's local contribution rate (LCR) for section 8003(b) payment purposes to the amount the Secretary determines will compensate the applicant for the increase in its current expenditures necessitated by the unusual geographic factors identified under § 222.43(b)(2).
(b) The Secretary does not increase the LCR under this section to an amount that is more than—
(1) Is necessary to allow the applicant to provide a level of education equivalent to that provided by its generally comparable LEAs; or
(2) The per pupil share for all children in ADA of the increased current expenditures necessitated by the unusual geographic factors identified under § 222.43, as determined by the Secretary.
§§ 222.45-222.49   [Reserved]
§ 222.50   What definitions apply to this subpart?
In addition to the terms referenced or defined in § 222.2, the following definitions apply to this subpart:
Child with a disability as defined in 34 CFR 300.8.
Early intervention services as defined in 34 CFR 303.13.
Free appropriate public education or FAPE as defined in 34 CFR 300.17.
Individualized education program or IEP as defined in 34 CFR 300.22.
Individualized family service plan or IFSP as defined in 34 CFR 303.20.
Infant or toddler with a disability as defined in 34 CFR 303.21.
Infants, toddlers, and children with disabilities, for these regulations, means both a “child with a disability” as defined in 34 CFR 300.8 and an “infant or toddler with a disability” as defined in 34 CFR 303.21.
Related services as defined in 34 CFR 300.34.
Special education as defined in 34 CFR 300.39.
§ 222.51   Which children may a local educational agency count for payment under section 8003(d) of the Act?
(a) An LEA may count children described in sections 8003(a)(1)(A)(ii), (a)(1)(B), (a)(1)(C), and (a)(1)(D) of the Act who are eligible for services under the provisions of Part B or Part C of the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq. ) (IDEA), for the purpose of computing a payment under section 8003(d) in accordance with the provisions of this section.
(b)(1) An LEA may count a child with a disability described in paragraph (a) of this section who attends a private school or residential program if the LEA has placed or referred the child in accordance with the provisions of section 613 of the IDEA and 34 CFR part 300, subparts C and D.
(2) An LEA may not count a child with a disability described in paragraph (a) of this section who is placed in a private school by his or her parents, but that child may participate in public school programs that use section 8003(d) funds.
(c) An LEA may count infants and toddlers with disabilities described in paragraph (a) of this section if—
(1) The LEA provides early intervention services or FAPE to each of those children—
(i) Either directly or through an arrangement with another entity; and
(ii) The State does not charge a fee or other out-of-pocket cost to the child's parents under the State's system of payments on file with the Secretary required under 34 CFR 303.203(b)(1), 303.520, and 303.521, and there is no other cost to the child's parents (the costs of premiums do not count as out-of-pocket costs); and
(2) Each of those children has an IFSP or IEP (as appropriate).
§ 222.52   What requirements must a local educational agency meet to receive a payment under section 8003(d)?
To receive a payment under section 8003(d), an eligible LEA shall—
(a) State in its application the number of federally connected children with disabilities it claims for a payment under section 8003(d);
(b) Have in effect written IEPs or IFSPs for all federally connected children with disabilities it claims under section 8003(d); and
(c) Meet the requirements of subparts A and C of the regulations in this part.
§ 222.53   What restrictions and requirements apply to the use of funds provided under section 8003(d)?
(a) An LEA shall use funds provided under section 8003(d) in accordance with the provisions of section 8003(d)(2) and 34 CFR parts 300 and 303.
(b) Obligations and expenditures of section 8003(d) funds may be incurred in either of the two following ways:
(1) An LEA may obligate or expend section 8003(d) funds for the fiscal year for which the funds were appropriated.
(2) An LEA may reimburse itself for obligations or expenditures of local and general State aid funds for the fiscal year for which the section 8003(d) funds were appropriated.
(c) An LEA shall use its section 8003(d) funds for the following types of expenditures:
(1) Expenditures that are reasonably related to the conduct of programs or projects for the free appropriate public education of, or early intervention services for, federally connected children with disabilities, which may include—
(i) Program planning and evaluation; and
(ii) Construction of or alteration to existing school facilities, but only when in accordance with section 605 of the IDEA and when the Secretary authorizes in writing those uses of funds.
(2) Acquisition cost (net invoice price) of equipment required for the free appropriate public education of, and early intervention services for, federally connected children with disabilities.
(i) If section 8003(d) funds are used for the acquisition of any equipment described in this paragraph (c)(2) of this section, the fair market value of any financial advantage realized through rebates, discounts, bonuses, free pieces of equipment used in a program or project for the free appropriate public education of, or early intervention services for, federally connected children with disabilities, or other circumstances, is not an allowable expenditure and may not be credited as an expenditure of those funds.
(ii) Funds awarded under the provisions of section 8003(d) may be used to acquire equipment for the free appropriate public education of, or early intervention services for, the federally connected children with disabilities only if title to the equipment would be in the applicant agency.
(d) An LEA shall account for the use of section 8003(d) funds as follows:
(1) By recording, for each fiscal year, the receipt (or credit) of section 8003(d) funds separately from other funds received under the Act, i.e. , on a line item basis in the general fund account or in a separate account; and
(2) By demonstrating that, for each fiscal year, the amount of expenditures for special education and related services and for early intervention services provided to the federally connected children with disabilities is at least equal to the amount of section 8003(d) funds received or credited for that fiscal year. This is done as follows:
(i) For each fiscal year determine the amount of an LEA's expenditures for special education and related services and for early intervention services provided to all children with disabilities.
(ii) The amount determined in paragraph (d)(2)(i) of this section is divided by the average daily attendance (ADA) of the total number of children with disabilities the LEA served during that fiscal year.
(iii) The amount determined in paragraph (d)(2)(ii) of this section is then multiplied by the total ADA of the LEA's federally connected children with disabilities claimed by the LEA for that fiscal year.
(3) If the amount of section 8003(d) funds the LEA received (or was credited) for the fiscal year exceeds the amount obtained in paragraph (d)(2)(iii) of this section, an overpayment equal to the excess section 8003(d) funds is established. This overpayment may be reduced or eliminated to the extent that the LEA can demonstrate that the average per pupil expenditure for special education and related services and for early intervention services provided to federally connected children with disabilities exceeded its average per pupil expenditure for serving non-federally connected children with disabilities.
§ 222.54   What supplement-not-supplant requirement applies to this subpart?
Funds provided under section 8003(d) may not supplant any State funds that were or would have been available to the LEA for the free appropriate public education of children counted under section 8003(d).
(a) No section 8003(d) funds may be paid to an LEA whose per pupil State aid for federally connected children with disabilities, either general State aid or special education State aid, has been or would be reduced as a result of eligibility for or receipt of section 8003(d) funds, whether or not a State has a program of State aid that meets the requirements of section 8009 of the Act and subpart K of the regulations in this part.
(1) A reduction in the per pupil amount of State aid for children with disabilities, including children counted under section 8003(d), from that received in a previous year raises a presumption that supplanting has occurred.
(2) The LEA may rebut this presumption by demonstrating that the reduction was unrelated to the receipt of section 8003(d) funds.
(b) In any State in which there is only one LEA, all funds for programs, and for early intervention services, for children with disabilities other than funds from Federal sources are considered by the Secretary to be local funds.
§ 222.55   What other statutes and regulations are applicable to this subpart?
Local educational agencies receiving funds under section 8003(d) are subject to the requirements of the Individuals with Disabilities Education Act, and related regulations (20 U.S.C. 1401 et seq. and 34 CFR parts 300 and 303).
§§ 222.56-222.59   [Reserved]
§ 222.60   What are the scope and purpose of this subpart?
The regulations in this subpart implement section 8003(b)(2) of the Act, which provides financial assistance to certain heavily impacted local educational agencies (LEAs). The specific eligibility requirements are detailed in §§ 222.62 through 222.66.
§ 222.61   What data are used to determine a local educational agency's eligibility under section 8003(b)(2) of the Act?
(a) Computations and determinations made with regard to an LEA's eligibility under section 8003(b)(2) in §§ 222.61 through 222.66 of these regulations are based on the LEA's final student, revenue, expenditure, and tax data from the third fiscal year preceding the fiscal year for which it seeks assistance.
(b) Except for an LEA described in § 222.64(a)(3)(ii), the LEAs used for meeting the applicable tax rate requirement are the comparable LEAs that are identified in § 222.74 or all LEAs in the applicant's State.
(c) As used in this subpart, the phrase “tax rate for general fund purposes” means “local real property tax rates for current expenditures purposes” as defined in § 222.2. “Current expenditures” is defined in section 8013(4) of the ESEA.
§ 222.62   How are local educational agencies determined eligible under section 8003(b)(2)?
(a) An applicant that wishes to be considered to receive a heavily impacted payment must submit the required information indicating tax rate eligibility under §§ 222.63 or 222.64 with the annual section 7003 Impact Aid application. Final LEA tax rate eligibility must be verified by the SEA under the process described in § 222.73.
(b) An LEA that is eligible to apply for a “continuing” heavily impacted payment under section 8003(b)(2)(B) is one that received a heavily impacted LEA payment for fiscal year 2000 and that meets eligibility requirements specified in § 222.63.
(c) An LEA that is eligible to apply for a “new” heavily impacted payment under section 8003(b)(2)(C) is one that did not receive see above and throughout the section for fiscal year 2000 and that meets eligibility requirements specified in § 222.64 for two consecutive application years.
§ 222.63   When is a local educational agency eligible as a continuing applicant for payment under section 8003(b)(2)(B)?
A continuing heavily impacted LEA must have—
(a) The same boundaries as those of a Federal military installation;
(b)(1) An enrollment of federally connected children described in section 8003(a)(1) equal to at least 35 percent of the total number of children in average daily attendance (ADA) in the LEA;
(2) A per pupil expenditure (PPE) that is less than the average PPE of the State in which the LEA is located or of all the States, whichever PPE is greater (except that an LEA with a total student enrollment of less than 350 students shall be determined to have met the PPE requirement); and
(3) A tax rate for general fund purposes of at least 95 percent of the average tax rate of comparable LEAs identified under § 222.74 or all LEAs in the applicant's State;
(c)(1) An enrollment of federally connected children described in section 8003(a)(1) equal to at least 30 percent of the total number of children in ADA in the LEA; and
(2) A tax rate for general fund purposes of at least 125 percent of the average tax rate of comparable LEAs identified under §§ 222.39-40 or of all LEAs in the applicant's State; or
(d) A total enrollment of at least 25,000 students, of which at least 50 percent are children described in section 8003(a)(1) and at least 6,000 of such children are children described in section 8003(a)(1)(A) and (B).
§ 222.64   When is a local educational agency eligible as a new applicant for payment under section 8003(b)(2)(C)?
A new heavily impacted LEA must have—
(a)(1)(i) Federally connected children equal to at least 50 percent of the total number of children in average daily attendance (ADA) in the LEA if children described in section 8003(a)(1)(F)-(G) are eligible to be counted for a section 8003(b)(1) payment; or
(ii) Federally connected children equal to at least 40 percent of the total number of children in ADA if children described in section 8003(a)(1)(F)-(G) are not eligible to be counted for a section 8003(b)(1) payment; and
(2)(i) If the LEA has a total ADA of more than 350 children,
(A) A per pupil expenditure (PPE) that is less than the average of the State in which the LEA is located; and
(B) A tax rate for general fund purposes equal to at least 95 percent of the average tax rate of comparable LEAs identified in § 222.74 or of all LEAs in the applicant's State; or
(ii) If the LEA has a total ADA of less than 350 children,
(A) A PPE that is less than the average PPE of one or three generally comparable LEAs identified in § 222.74(b); and
(B) A tax rate equal to at least 95 percent of the average tax rate of one or three generally comparable LEAs identified in § 222.74(b);
(b) The same boundaries as those of a Federal military installation; or
(c)(1) The same boundaries as island property held in trust by the Federal government;
(2) No taxing authority; and
(3) Received a payment under section 8003(b)(1) for fiscal year 2001.
§ 222.65   What other requirements must a local educational agency meet to be eligible for financial assistance under section 8003(b)(2)?
Subject to § 222.66, an LEA described in § 222.63 or § 222.64 is eligible for financial assistance under section 8003(b)(2) if the Secretary determines that the LEA meets the following requirements:
(a) The LEA timely applies for assistance under section 8003(b)(2) and meets all of the other application and eligibility requirements of subparts A and C of these regulations.
(b) Except for an LEA described in § 222.63(a) or (d), or § 222.64(b) or (c), the LEA meets the applicable tax rate requirement in accordance with the procedures and requirements of §§ 222.68 through 222.74.
§ 222.66   How does a local educational agency lose and resume eligibility under section 8003(b)(2)?
(a) A continuing heavily impacted LEA that fails to meet the eligibility requirements in § 222.63 in any fiscal year or a new heavily impacted LEA that received a section 8003(b)(2) payment but then fails to meet the eligibility requirements in § 222.64 will still receive a heavily impacted payment in the first year of ineligibility, based on the number of children in ADA that would be counted for that application if the LEA were eligible.
(b)(1) A continuing heavily impacted LEA may resume eligibility for a heavily impacted payment if it applies in the fiscal year preceding the year for which it seeks eligibility and it meets the eligibility requirements in § 222.63 for both fiscal years.
(2) In the first fiscal year that a continuing heavily impacted LEA qualifies to resume eligibility, it cannot receive a heavily impacted payment but instead will receive a basic support payment under section 8003(b)(1) for that year.
Continuing LEAs
(c) A new heavily impacted LEA may resume eligibility for a heavily impacted payment if it meets the eligibility requirements in § 222.64 for the fiscal year for which it seeks a payment.
New LEAs
§ 222.67   How may a State aid program affect a local educational agency's eligibility for assistance under section 8003(b)(2)?
The Secretary determines that an LEA is not eligible for financial assistance under section 8003(b)(2) if—
(a) The LEA is in a State that has an equalized program of State aid that meets the requirements of section 8009; and
(b) The State, in determining the LEA's eligibility for or amount of State aid, takes into consideration the portion of the LEA's payment under section 8003(b)(2) that exceeds what the LEA would receive under section 8003(b)(1).
§ 222.68   How does the Secretary determine whether a fiscally independent local educational agency meets the applicable tax rate requirement?
(a) To determine whether a fiscally independent LEA, as defined in § 222.2(c), meets the applicable tax rate requirement in §§ 222.63(b)(3), 222.63(c)(2), and 222.64(a)(3), the Secretary compares the LEA's local real property tax rate for current expenditure purposes, as defined in § 222.2(c) (referred to in this part as “tax rate” or “tax rates”), with the tax rates of its generally comparable LEAs.
(b) For purposes of this section, the Secretary uses—
(1) The actual tax rate if all the real property in the LEA and its generally comparable LEAs is assessed at the same percentage of true value; or
(2) Tax rates computed under §§ 222.69-222.71.
(c) The Secretary determines that an LEA described in §§ 222.63(b), 222.63(c), or 222.64(a) meets the applicable tax rate requirement if—
(1) The LEA's tax rate is equal to at least 95 percent (or 125 percent under 222.63(c)) of the average tax rate of its generally comparable LEAs;
(2) Each of the LEA's tax rates for each classification of real property is equal to at least 95 percent (or 125 percent under 222.63(c)) of each of the average tax rates of its generally comparable LEAs for the same classification of property;
(3) The LEA taxes all of its real property at the maximum rates allowed by the State, if those maximum rates apply uniformly to all LEAs in the State and the State does not permit any rates higher than the maximum; or
(4) The LEA has no taxable real property.
§ 222.69   What tax rates does the Secretary use if real property is assessed at different percentages of true value?
If the real property of an LEA and its generally comparable LEAs consists of one classification of property but the property is assessed at different percentages of true value in the different LEAs, the Secretary determines whether the LEA meets the applicable tax rate requirement under § 222.68(c)(1) by using tax rates computed by—
(a) Multiplying the LEA's actual tax rate for real property by the percentage of true value assigned to that property for tax purposes; and
(b) Performing the computation in paragraph (a) of this section for each of its generally comparable LEAs and determining the average of those computed tax rates.
§ 222.70   What tax rates does the Secretary use if two or more different classifications of real property are taxed at different rates?
If the real property of an LEA and its generally comparable LEAs consists of two or more classifications of real property taxed at different rates, the Secretary determines whether the LEA meets the applicable tax rate requirement under § 222.68(c)(1) or (2) by using one of the following:
(a) Actual tax rates for each of the classifications of real property.
(b) Tax rates computed in accordance with § 222.69 for each of the classifications of real property.
(c) Tax rates computed by—
(1) Determining the total true value of all real property in the LEA by dividing the assessed value of each classification of real property in the LEA by the percentage of true value assigned to that property for tax purposes and aggregating the results;
(2) Determining the LEA's total revenues derived from local real property taxes for current expenditures (as defined in section 8013);
(3) Dividing the amount determined in paragraph (c)(2) of this section by the amount determined in paragraph (c)(1) of this section; and
(4) Performing the computations in paragraphs (c)(1), (2), and (3) of this section for each of the generally comparable LEAs and then determining the average of their computed tax rates.
§ 222.71   What tax rates may the Secretary use if substantial local revenues are derived from local tax sources other than real property taxes?
(a) In a State in which a substantial portion of revenues for current expenditures for educational purposes is derived from local tax sources other than real property taxes, the State educational agency (SEA) may request that the Secretary take those revenues into account in determining whether an LEA in that State meets the applicable tax rate requirement under § 222.68.
(b) If, based upon the request of an SEA, the Secretary determines that it is appropriate to take the revenues described in paragraph (a) of this section into account in determining whether an LEA in that State meets the applicable tax rate requirement under § 222.68, the Secretary uses tax rates computed by—
(1) Dividing the assessed value of each classification of real property in the LEA by the percentage of true value assigned to that property for tax purposes and aggregating the results;
(2) Determining the LEA's total revenues derived from local tax sources for current expenditures (as defined in section 8013);
(3) Dividing the amount determined in paragraph (b)(2) of this section by the amount determined in paragraph (b)(1) of this section; and
(4) Performing the computations in paragraphs (b)(1), (2), and (3) of this section for each of the generally comparable LEAs and then determining the average of those computed tax rates.
§ 222.72   How does the Secretary determine whether a fiscally dependent local educational agency meets the applicable tax rate requirement?
(a) If an LEA is fiscally dependent, as defined in § 222.2(c), the Secretary compares the LEA's imputed local tax rate, calculated under paragraph (b) of this section, with the average tax rate of its generally comparable LEAs, calculated under paragraph (c) of this section, to determine whether the LEA meets the applicable tax rate requirement.
(b) The Secretary imputes a local tax rate for a fiscally dependent LEA by—
(1) Dividing the assessed value of each classification of real property within the boundaries of the general government by the percentage of true value assigned to that property for tax purposes and aggregating the results;
(2) Determining the amount of locally derived revenues made available by the general government for the LEA's current expenditures (as defined in section 8013); and
(3) Dividing the amount determined in paragraph (b)(2) of this section by the amount determined in paragraph (b)(1) of this section.
(c) The Secretary performs the computations in paragraph (b) of this section for each of the fiscally dependent generally comparable LEAs and the computations in §§ 222.68 through 222.71, whichever is applicable, for each of the fiscally independent generally comparable LEAs and determines the average of all those tax rates.
(d) The Secretary determines that a fiscally dependent LEA described in § 222.63(b) or § 222.64(a) meets the applicable tax rate requirement if its imputed local tax rate is equal to at least 95 percent of the average tax rate of its generally comparable LEAs.
(e) The Secretary determines that a fiscally dependent LEA described in § 222.63(c) meets the applicable tax rate requirement if its imputed local tax rate is equal to at least 125 percent of the average tax rate of its generally comparable LEAs.
§ 222.73   What information must the State educational agency provide?
The SEA of any State with an LEA applying for assistance under section 8003(b)(2) shall provide the Secretary with relevant information necessary to determine the PPE for all LEAs in the State and whether the LEA meets the applicable tax rate requirement under this subpart.
§ 222.74   How does the Secretary identify generally comparable local educational agencies for purposes of section 8003(b)(2)?
(a) Except as otherwise provided in paragraph (b) of this section, the Secretary identifies generally comparable LEAs for purposes of this subpart in accordance with the local contribution rate procedures described in §§ 222.39 through 222.40.
(b) For applicant LEAs described in § 222.64(a)(2)(ii) and (a)(3)(ii), to identify the one or three generally comparable LEAs, the Secretary uses the following procedures:
(1) The Secretary asks the SEA of the applicant LEA to identify generally comparable LEAs in the State by first following the directions in § 222.39(a)(4), using data from the preceding fiscal year. The SEA then removes from the resulting list any LEAs that are significantly impacted, as described in § 222.39(b)(1), except the applicant LEA.
(2) If the remaining LEAs are not in rank order by total ADA, the SEA lists them in that order.
(3) The LEA may then select as its generally comparable LEAs, for purposes of section 8003(b)(2) only, one or three LEAs from the list that are closest to it in size as determined by total ADA ( i.e., the next one larger or the next one smaller, or the next three larger LEAs, the next three smaller, the next two larger and the next one smaller, or the next one larger and the next two smaller).
§ 222.75   How does the Secretary compute the average per pupil expenditure of generally comparable local educational agencies under this subpart?
For applicant LEAs described in § 222.64(a)(2)(ii), the Secretary computes average per pupil expenditures (APPE) by dividing the sum of the total current expenditures for the third preceding fiscal year for the identified generally comparable LEAs by the sum of the total ADA of those LEAs for the same fiscal year.
§§ 222.76-222.79   [Reserved]
§ 222.90   What definitions apply to this subpart?
In addition to the definitions in § 222.2, the following definitions apply to this subpart:
Indian children means children residing on Indian lands who are recognized by an Indian tribe as being affiliated with that tribe.
Indian tribe means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established under the Alaska Native Claims Settlement Act (85 Stat. 688), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
§ 222.91   What requirements must a local educational agency meet to receive a payment under section 7003 of the Act for children residing on Indian lands?
(a) To receive a payment under section 7003 of the Act for children residing on Indian lands, an LEA must—
(1) Meet the application and eligibility requirements in section 7003 and subparts A and C of these regulations;
(2) Except as provided in paragraph (b) of this section, develop and implement policies and procedures in accordance with § 222.94; and
(3) Include in its application for payments under section 7003—
(i) An assurance that the LEA established these policies and procedures in consultation with and based on information from tribal officials and parents of those children residing on Indian lands who are Indian children, except as provided in paragraph (b) of this section;
(ii) An assurance that the LEA has provided a written response to the comments, concerns and recommendations received through the Indian policies and procedures consultation process, except as provided in paragraph (b) of this section; and
(iii) Either a copy of the policies and procedures, or documentation that the LEA has received a waiver in accordance with the provisions of paragraph (b) of this section.
(b) An LEA is not required to comply with § 222.94 with respect to students from a tribe that has provided the LEA with a waiver that meets the requirements of this paragraph.
(1) A waiver must contain a voluntary written statement from an appropriate tribal official or tribal governing body that—
(i) The LEA need not comply with § 222.94 because the tribe is satisfied with the LEA's provision of educational services to the tribe's students; and
(ii) The tribe was provided a copy of the requirements in § 222.91 and § 222.94, and understands the requirements that are being waived.
(2) The LEA must submit the waiver at the time of application.
(3) The LEA must obtain a waiver from each tribe that has Indian children living on Indian lands claimed by the LEA on its application under section 7003 of the Act. If the LEA only obtains waivers from some, but not all, applicable tribes, the LEA must comply with the requirements of § 222.94 with respect to those tribes that did not agree to waive these requirements.
§ 222.92   What additional statutes and regulations apply to this subpart?
(a) The following statutes and regulations apply to LEAs that claim children residing on Indian lands for payments under section 8003:
(1) The General Education Provisions Act (GEPA) in 20 U.S.C. 1221 et seq., unless otherwise noted.
(2) Other relevant regulations in this part.
(b) The following statutes, rules, and regulations do not apply to any hearing proceedings under this subpart:
(1) Administrative Procedure Act.
(2) Federal Rules of Civil Procedure.
(3) Federal Rules of Evidence.
(4) GEPA, part E.
(5) 34 CFR part 81.
§ 222.93   [Reserved]
§ 222.94   What are the responsibilities of the LEA with regard to Indian policies and procedures?
(a) An LEA that is subject to the requirements of § 222.91(a) must consult with and involve local tribal officials and parents of Indian children in the planning and development of:
(1) Its Indian policies and procedures (IPPs), and
(2) The LEA's general educational program and activities.
(b) An LEA's IPPs must include a description of the specific procedures for how the LEA will:
(1) Disseminate relevant applications, evaluations, program plans and information related to the LEA's education program and activities with sufficient advance notice to allow tribes and parents of Indian children the opportunity to review and make recommendations.
(2) Provide an opportunity for tribes and parents of Indian children to provide their views on the LEA's educational program and activities, including recommendations on the needs of their children and on how the LEA may help those children realize the benefits of the LEA's education programs and activities. As part of this requirement, the LEA will—
(i) Notify tribes and the parents of Indian children of the opportunity to submit comments and recommendations, considering the tribe's preference for method of communication, and
(ii) Modify the method of and time for soliciting Indian views, if necessary, to ensure the maximum participation of tribes and parents of Indian children.
(3) At least annually, assess the extent to which Indian children participate on an equal basis with non-Indian children in the LEA's education program and activities. As part of this requirement, the LEA will:
(i) Share relevant information related to Indian children's participation in the LEA's education program and activities with tribes and parents of Indian children; and
(ii) Allow tribes and parents of Indian children the opportunity and time to review and comment on whether Indian children participate on an equal basis with non-Indian children.
(4) Modify the IPPs if necessary, based upon the results of any assessment or input described in paragraph (b) of this section.
(5) Respond at least annually in writing to comments and recommendations made by tribes or parents of Indian children, and disseminate the responses to the tribe and parents of Indian children prior to the submission of the IPPs by the LEA.
(6) Provide a copy of the IPPs annually to the affected tribe or tribes.
(c)(1) An LEA that is subject to the requirements of § 222.91(a) must implement the IPPs described in paragraph (b) of this section.
(2) Each LEA that has developed IPPs shall review those IPPs annually to ensure that they comply with the provisions of this section, and are implemented by the LEA in accordance with this section.
(3) If an LEA determines, after input from the tribe and parents of Indian children, that its IPPs do not meet the requirements of this section, the LEA shall amend its IPPs to conform to those requirements within 90 days of its determination.
(4) An LEA that amends its IPPs shall, within 30 days, send a copy of the amended IPPs to—
(i) The Impact Aid Program Director for approval; and
(ii) The affected tribe or tribes.
§ 222.95   How are Indian policies and procedures reviewed to ensure compliance with the requirements in section 8004(a) of the Act?
(a) The Director of the Impact Aid Program (Director) periodically reviews applicant LEAs' IPPs to ensure that they comply with the provisions of section 8004(a) and § 222.94.
(b) If the Director determines either that the LEA's IPPs do not comply with the minimum standards of section 8004(a), or that the IPPs have not been implemented in accordance with § 222.94, the Director provides the LEA with written notification of the deficiencies related to its IPPs and requires that the LEA take appropriate action.
(c) An LEA shall make the necessary changes within 90 days of receipt of written notification from the Director.
(d) If the LEA fails to make the necessary adjustments or changes within the prescribed period of time, the Director may withhold all or part of the payments that the LEA is eligible to receive under section 8003.
§§ 222.96-222.101   [Reserved]
§ 222.102   Who may file a complaint about a local educational agency's Indian policies and procedures?
(a) Only a tribal chairman or an authorized designee for a tribe that has students attending an LEA's schools may file a written complaint with the Assistant Secretary for Elementary and Secondary Education (Assistant Secretary) regarding any action of the LEA pursuant to, or relevant to, section 8004(a) and § 222.94.
(b) If a tribe files a complaint through a designee, the tribe shall acknowledge in writing in the complaint that the designee is authorized to act on its behalf.
§ 222.103   What must be included in a complaint?
For purposes of this subpart, a complaint is a signed statement that includes—
(a) An allegation that an LEA has failed to develop and implement IPPs in accordance with section 8004(a);
(b) Information that supports the allegation;
(c) A specific request for relief; and
(d) A statement describing what steps the tribe has taken to resolve with the LEA the matters on which the complaint is based.
§ 222.104   When does the Assistant Secretary consider a complaint received?
(a) The Assistant Secretary considers a complaint to have been received only after the Assistant Secretary determines that the complaint—
(1) Satisfies the requirements in §§ 222.102 and 222.103; and
(2) Is in writing and signed by the tribal chairman or the tribe's authorized designee.
(b) If the Assistant Secretary determines that a complaint fails to meet the requirements in §§ 222.102-222.103, the Assistant Secretary notifies the tribe or its designee in writing that the complaint has been dismissed for purposes of invoking the hearing procedures in §§ 222.102-222.113.
(c) Any notification that a complaint has been dismissed includes the reasons why the Assistant Secretary determined that the complaint did not meet the requirements in §§ 222.102 and 222.103.
(d) Notification that a complaint has been dismissed does not preclude other efforts to investigate or resolve the issues raised in the complaint, including the filing of an amended complaint.
§§ 222.105-222.107   [Reserved]
§ 222.108   What actions must be taken upon receipt of a complaint?
Within 10 working days of receipt of a complaint, the Secretary or his designee—
(a) Designates a hearing examiner to conduct a hearing;
(b) Designates a time for the hearing that is no more than 30 days after the designation of a hearing examiner;
(c) Designates a place for the hearing that, to the extent possible, is—
(1) Near the LEA; or
(2) At another location convenient to the tribe and the LEA, if it is determined that there is good cause to designate another location;
(d) Notifies the tribe and the LEA of the time, place, and nature of the hearing; and
(e) Transmits copies of the complaint to the LEA and the affected tribe or tribes.
§ 222.109   When may a local educational agency reply to a complaint?
An LEA's reply to the charges in the complaint must be filed with the hearing examiner within 15 days of the date the LEA receives a copy of the notice and complaint described in § 222.108 (d) and (e) from the hearing examiner.
§ 222.110   What are the procedures for conducting a hearing on a local educational agency's Indian policies and procedures?
Hearings on IPP complaints filed by an Indian tribe or tribes against an LEA are conducted as follows:
(a) The hearing must be open to the public.
(b) Parties may be represented by counsel.
(c)(1) Each party may submit oral and written testimony that is relevant to the issues in the proceeding and make recommendations concerning appropriate remedial actions.
(2) A party may object to evidence it considers to be irrelevant or unduly repetitious.
(d) No party shall communicate orally or in writing with the hearing examiner or the Assistant Secretary on matters under review, except minor procedural matters, unless all parties to the complaint are given—
(1) Timely and adequate notice of the communication; and
(2) Reasonable opportunity to respond.
(e) For each document that a party submits, the party shall—
(1) File one copy for inclusion in the record of the proceeding; and
(2) Provide a copy to each of the other parties to the proceeding.
(f) Each party shall bear only its own costs in the proceeding.
§ 222.111   What is the authority of the hearing examiner in conducting a hearing?
The hearing examiner is authorized to conduct a hearing under section 8004(e) and §§ 222.109-222.113 as follows:
(a) The hearing examiner may—
(1) Clarify, simplify, or define the issues or consider other matters that may aid in the disposition of the complaint;
(2) Direct the parties to exchange relevant documents or information; and
(3) Examine witnesses.
(b) The hearing examiner—
(1) Regulates the course of proceedings and conduct of the parties;
(2) Arranges for the preparation of a transcript of each hearing and provides one copy to each party;
(3) Schedules the submission of oral and documentary evidence;
(4) Receives, rules on, excludes, or limits evidence;
(5) Establishes and maintains a record of the proceeding, including any transcripts referenced above;
(6) Establishes reasonable rules governing public attendance at the proceeding; and
(7) Is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
§ 222.112   What procedures are followed after the hearing?
(a) Each party may submit to the hearing examiner additional evidence that is relevant to the issues raised at the hearing, within the time period and in the manner specified by the hearing examiner.
(b) Within 30 days after the hearing, the hearing examiner—
(1) Makes, on the basis of the record, written findings of fact and recommendations concerning any appropriate remedial action that should be taken;
(2) Submits those findings and recommendations, along with the hearing record, to the Assistant Secretary; and
(3) Sends a copy of those findings and recommendations to each party.
(c)(1) Each party may file with the Assistant Secretary comments on the hearing examiner's findings and recommendations.
(2) The comments must be received by the Assistant Secretary within 10 days after the party receives a copy of the hearing examiner's findings and recommendations.
§ 222.113   What are the responsibilities of the Assistant Secretary after the hearing?
(a) Within 30 days after receiving the entire hearing record and the hearing examiner's findings and recommendations, the Assistant Secretary makes, on the basis of the record, a written determination that includes—
(1) Any appropriate remedial action that the LEA must take;
(2) A schedule for completing any remedial action; and
(3) The reasons for the Assistant Secretary's decision.
(b) After completing the final determination required by paragraph (a) of this section, the Assistant Secretary sends the parties a copy of that determination.
(c) The Assistant Secretary's final determination under paragraph (a) of this section is the final action of the Department concerning the complaint and is subject to judicial review.
§ 222.114   How does the Assistant Secretary implement the provisions of this subpart?
The Assistant Secretary implements section 8004 of the Act and this subpart through such actions as the Assistant Secretary determines to be appropriate, including the withholding of funds in accordance with §§ 222.115-222.122, after affording the affected LEA, parents, and Indian tribe or tribes an opportunity to present their views.
§ 222.115   When does the Assistant Secretary withhold payments from a local educational agency under this subpart?
Except as provided in § 222.120, the Assistant Secretary withholds payments to an LEA if—
(a) The Assistant Secretary determines it is necessary to enforce the requirements of section 8004 of the Act or this subpart; or
(b) After a hearing has been conducted under section 8004(e) of the Act and §§ 222.102-222.113 (IPP hearing)—
(1) The LEA rejects the final determination of the Assistant Secretary; or
(2) The LEA fails to implement the required remedy within the time established and the Assistant Secretary determines that the required remedy will not be undertaken by the LEA even if the LEA is granted a reasonable extension of time.
§ 222.116   How are withholding procedures initiated under this subpart?
(a) If the Assistant Secretary decides to withhold an LEA's funds, the Assistant Secretary issues a written notice of intent to withhold the LEA's payments.
(b) In the written notice, the Assistant Secretary—
(1) Describes how the LEA failed to comply with the requirements at issue; and
(2)(i) Advises an LEA that has participated in an IPP hearing that it may request, in accordance with § 222.117(c), that its payments not be withheld; or
(ii) Advises an LEA that has not participated in an IPP hearing that it may request a withholding hearing in accordance with § 222.117(d).
(c) The Assistant Secretary sends a copy of the written notice of intent to withhold payments to the LEA and the affected Indian tribe or tribes by certified mail with return receipt requested.
§ 222.117   What procedures are followed after the Assistant Secretary issues a notice of intent to withhold payments?
(a) The withholding of payments authorized by section 8004 of the Act is conducted in accordance with section 8004 (d)(2) or (e)(8)-(9) of the Act and the regulations in this subpart.
(b) An LEA that receives a notice of intent to withhold payments from the Assistant Secretary is not entitled to an Impact Aid hearing under the provisions of section 8011 of the Act and subpart J of this part.
(c) After an IPP hearing. (1) An LEA that rejects or fails to implement the final determination of the Assistant Secretary after an IPP hearing has 10 days from the date of the LEA's receipt of the written notice of intent to withhold funds to provide the Assistant Secretary with a written explanation and documentation in support of the reasons why its payments should not be withheld. The Assistant Secretary provides the affected Indian tribe or tribes with an opportunity to respond to the LEA's submission.
(2) If after reviewing an LEA's written explanation and supporting documentation, and any response from the Indian tribe or tribes, the Assistant Secretary determines to withhold an LEA's payments, the Assistant Secretary notifies the LEA and the affected Indian tribe or tribes of the withholding determination in writing by certified mail with return receipt requested prior to withholding the payments.
(3) In the withholding determination, the Assistant Secretary states the facts supporting the determination that the LEA failed to comply with the legal requirements at issue, and why the provisions of § 222.120 (provisions governing circumstances when an LEA is exempt from the withholding of payments) are inapplicable. This determination is the final decision of the Department.
(d) An LEA that has not participated in an IPP hearing. (1) An LEA that has not participated in an IPP hearing has 30 days from the date of its receipt of the Assistant Secretary's notice of intent to withhold funds to file a written request for a withholding hearing with the Assistant Secretary. The written request for a withholding hearing must—
(i) Identify the issues of law and facts in dispute; and
(ii) State the LEA's position, together with the pertinent facts and reasons supporting that position.
(2) If the LEA's request for a withholding hearing is accepted, the Assistant Secretary sends written notification of acceptance to the LEA and the affected Indian tribe or tribes and forwards to the hearing examiner a copy of the Assistant Secretary's written notice, the LEA's request for a withholding hearing, and any other relevant documents.
(3) If the LEA's request for a withholding hearing is rejected, the Assistant Secretary notifies the LEA in writing that its request for a hearing has been rejected and provides the LEA with the reasons for the rejection.
(4) The Assistant Secretary rejects requests for withholding hearings that are not filed in accordance with the time for filing requirements described in paragraph (d)(1) of this section. An LEA that files a timely request for a withholding hearing, but fails to meet the other filing requirements set forth in paragraph (d)(1) of this section, has 30 days from the date of receipt of the Assistant Secretary's notification of rejection to submit an acceptable amended request for a withholding hearing.
(e) If an LEA fails to file a written explanation in accordance with paragraph (c) of this section, or a request for a withholding hearing or an amended request for a withholding hearing in accordance with paragraph (d) of this section, the Secretary proceeds to take appropriate administrative action to withhold funds without further notification to the LEA.
§ 222.118   How are withholding hearings conducted in this subpart?
(a) Appointment of hearing examiner. Upon receipt of a request for a withholding hearing that meets the requirements of § 222.117(d), the Assistant Secretary requests the appointment of a hearing examiner.
(b) Time and place of the hearing. Withholding hearings under this subpart are held at the offices of the Department in Washington, DC, at a time fixed by the hearing examiner, unless the hearing examiner selects another place based upon the convenience of the parties.
(c) Proceeding. (1) The parties to the withholding hearing are the Assistant Secretary and the affected LEA. An affected Indian tribe is not a party, but, at the discretion of the hearing examiner, may participate in the hearing and present its views on the issues relevant to the withholding determination.
(2) The parties may introduce all relevant evidence on the issues stated in the LEA's request for withholding hearing or other issues determined by the hearing examiner during the proceeding. The Assistant Secretary's notice of intent to withhold, the LEA's request for a withholding hearing, and all amendments and exhibits to those documents, must be made part of the hearing record.
(3) Technical rules of evidence, including the Federal Rules of Evidence, do not apply to hearings conducted under this subpart, but the hearing examiner may apply rules designed to assure production of the most credible evidence available, including allowing the cross-examination of witnesses.
(4) Each party may examine all documents and other evidence offered or accepted for the record, and may have the opportunity to refute facts and arguments advanced on either side of the issues.
(5) A transcript must be made of the oral evidence unless the parties agree otherwise.
(6) Each party may be represented by counsel.
(7) The hearing examiner is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(d) Filing requirements. (1) All written submissions must be filed with the hearing examiner by hand-delivery, mail, or facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(2) If agreed upon by the parties, a party may serve a document upon the other party by facsimile transmission.
(3) The filing date for a written submission under this subpart is the date the document is—
(i) Hand-delivered;
(ii) Mailed; or
(iii) Sent by facsimile transmission.
(4) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was timely received by the hearing examiner.
(5) Any party filing a document by facsimile transmission must file a follow-up hard copy by hand-delivery or mail within a reasonable period of time.
(e) Procedural rules. (1) If the hearing examiner determines that no dispute exists as to a material fact or that the resolution of any disputes as to material facts would not be materially assisted by oral testimony, the hearing examiner shall afford each party an opportunity to present its case—
(i) In whole or in part in writing; or
(ii) In an informal conference after affording each party sufficient notice of the issues to be considered.
(2) With respect to withholding hearings involving a dispute as to a material fact the resolution of which would be materially assisted by oral testimony, the hearing examiner shall afford to each party—
(i) Sufficient notice of the issues to be considered at the hearing;
(ii) An opportunity to present witnesses on the party's behalf; and
(iii) An opportunity to cross-examine other witnesses either orally or through written interrogatories.
(f) Decision of the hearing examiner. (1) The hearing examiner—
(i) Makes written findings and an initial withholding decision based upon the hearing record; and
(ii) Forwards to the Secretary, and mails to each party and to the affected Indian tribe or tribes, a copy of the written findings and initial withholding decision.
(2) A hearing examiner's initial withholding decision constitutes the Secretary's final withholding decision without any further proceedings unless—
(i) Either party to the withholding hearing, within 30 days of the date of its receipt of the initial withholding decision, requests the Secretary to review the decision and that request is granted; or
(ii) The Secretary otherwise determines, within the time limits stated in paragraph (g)(2)(ii) of this section, to review the initial withholding decision.
(3) When an initial withholding decision becomes the Secretary's final decision without any further proceedings, the Department notifies the parties and the affected Indian tribe or tribes of the finality of the decision.
(g) Administrative appeal of an initial decision. (1)(i) Any party may request the Secretary to review an initial withholding decision.
(ii) A party must file this request for review within 30 days of the party's receipt of the initial withholding decision.
(2) The Secretary may—
(i) Grant or deny a timely request for review of an initial withholding decision; or
(ii) Otherwise determine to review the decision, so long as that determination is made within 45 days of the date of receipt of the initial decision by the Secretary.
(3) The Secretary mails to each party and the affected Indian tribe or tribes, by certified mail with return receipt requested, written notice of—
(i) The Secretary's action granting or denying a request for review of an initial decision; or
(ii) The Secretary's determination to review an initial decision.
(h) Secretary's review of an initial withholding decision. (1) When the Secretary reviews an initial withholding decision, the Secretary notifies each party and the affected Indian tribe or tribes in writing, by certified mail with return receipt requested, that it may file a written statement or comments; and
(2) Mails to each party and to the affected Indian tribe or tribes, by certified mail with return receipt requested, written notice of the Secretary's final withholding decision.
§ 222.119   What is the effect of withholding under this subpart?
(a) The withholding provisions in this subpart apply to all payments that an LEA is otherwise eligible to receive under section 8003 of the Act for any fiscal year.
(b) The Assistant Secretary withholds funds after completion of any administrative proceedings under §§ 222.116-222.118 until the LEA documents either compliance or exemption from compliance with the requirements in section 8004 of the Act and this subpart.
§ 222.120   When is a local educational agency exempt from withholding of payments?
Except as provided in paragraph (d)(2) of this section, the Assistant Secretary does not withhold payments to an LEA under the following circumstances:
(a) The LEA documents that it has received a written statement from the affected Indian tribe or tribes that the LEA need not comply with section 8004 (a) and (b) of the Act, because the affected Indian tribe or tribes is satisfied with the provision of educational services by the LEA to the children claimed on the LEA's application for assistance under section 8003 of the Act.
(b) The Assistant Secretary receives from the affected Indian tribe or tribes a written request that meets the requirements of § 222.121 not to withhold payments from an LEA.
(c) The Assistant Secretary, on the basis of documentation provided by the LEA, determines that withholding payments during the course of the school year would substantially disrupt the educational programs of the LEA.
(d)(1) The affected Indian tribe or tribes elects to have educational services provided by the Bureau of Indian Affairs under section 1101(d) of the Education Amendments of 1978.
(2) For an LEA described in paragraph (d)(1) of this section, the Secretary recalculates the section 8003 payment that the LEA is otherwise eligible to receive to reflect the number of students who remain in attendance at the LEA.
§ 222.121   How does the affected Indian tribe or tribes request that payments to a local educational agency not be withheld?
(a) The affected Indian tribe or tribes may submit to the Assistant Secretary a formal request not to withhold payments from an LEA.
(b) The formal request must be in writing and signed by the tribal chairman or authorized designee.
§ 222.122   What procedures are followed if it is determined that the local educational agency's funds will not be withheld under this subpart?
If the Secretary determines that an LEA's payments will not be withheld under this subpart, the Assistant Secretary notifies the LEA and the affected Indian tribe or tribes, in writing, by certified mail with return receipt requested, of the reasons why the payments will not be withheld.
§§ 222.123-222.129   [Reserved]
§ 222.140   What definitions apply to this subpart?
In addition to the terms referenced or defined in § 222.2, the following definitions apply to this subpart:
Minimum school facilities means those school facilities for which the Secretary may provide assistance under this part as follows:
(1) The Secretary, after consultation with the State educational agency and the local educational agency (LEA), considers these facilities necessary to support an educational program—
(i) For the membership of students residing on Federal property to be served at normal capacity; and
(ii) In accordance with applicable Federal and State laws and, if necessary or appropriate, common practice in the State.
(2) The term includes, but is not restricted to—
(i) Classrooms and related facilities; and
(ii) Machinery, utilities, and initial equipment, to the extent that these are necessary or appropriate for school purposes.
Providing assistance means constructing, leasing, renovating, remodeling, rehabilitating, or otherwise providing minimum school facilities.
§ 222.141   For what types of projects may the Secretary provide assistance under section 8008 of the Act?
The types of projects for which the Secretary may provide assistance under section 8008 of the Act during any given year include, but are not restricted to, one or more of the following:
(a)(1) Emergency repairs to existing facilities for which the Secretary is responsible under section 8008.
(2) As used in this section, the term emergency repairs means those repairs necessary—
(i) For the health and safety of persons using the facilities;
(ii) For the removal of architectural barriers to the disabled; or
(iii) For the prevention of further deterioration of the facilities.
(b) Renovation of facilities for which the Secretary is responsible under section 8008 to meet the standards of minimum school facilities in exchange for an LEA or another appropriate entity accepting transfer of the Secretary's interest in them under § 222.143.
(c) Provision of temporary facilities on Federal property pending emergency repairs.
(d) Construction of replacement minimum school facilities when more cost-effective than renovation and when the replacement facilities are to be transferred to local ownership under § 222.143.
§ 222.142   What terms and conditions apply to minimum school facilities operated under section 8008 by another agency?
When minimum school facilities are provided under section 8008, the Secretary may—
(a) Arrange for the operation of the facilities by an agency other than the Department;
(b) Establish terms and conditions for the operation of the facilities; and
(c) Require the operating agency to submit assurances and enter into other arrangements that the Secretary specifies.
§ 222.143   What terms and conditions apply to the transfer of minimum school facilities?
When the Secretary transfers to an LEA or other appropriate entity (transferee) facilities that have been used to carry out the purposes of section 10 of Pub. L. 81-815 or section 8008, the Secretary establishes appropriate terms and conditions for the transfer including that it be—
(a) Without charge; and
(b) Consented to by the transferee.
§§ 222.144-222.149   [Reserved]
§ 222.150   What is the scope of this subpart?
(a) Except as provided in paragraph (b) of this section, the regulations in this subpart govern all Impact Aid administrative hearings under section 8011(a) of the Act and requests for reconsideration.
(b) Except as otherwise indicated in this part, the regulations in this subpart do not govern the following administrative hearings:
(1) Subpart G, §§ 222.90-222.122 (Indian policies and procedures tribal complaint and withholding hearings.
(2) Subpart K, § 222.165 (hearings concerning determinations under section 8009 of the Act).
§ 222.151   When is an administrative hearing provided to a local educational agency?
(a) Any local educational agency (LEA) that is adversely affected by the Secretary's (or the Secretary's delegatee's) action or failure to act upon the LEA's application under the Act is entitled to an administrative hearing in accordance with this subpart.
(b) An applicant is entitled to an administrative hearing under this subpart only if—
(1) The applicant files a written request for an administrative hearing within 60 days of its receipt of written notice of the adverse action; and
(2) The issues of fact or law specified in the hearing request are material to the determination of the applicant's rights and are not committed wholly to the discretion of the Secretary.
§ 222.152   When may a local educational agency request reconsideration of a determination?
(a)(1) An LEA may request reconsideration of any determination made by the Secretary (or the Secretary's delegatee) under the Act, either in addition to or instead of requesting an administrative hearing under § 222.151.
(2) A request for reconsideration, or actual reconsideration by the Secretary (or the Secretary's delegatee), does not extend the time within which an applicant must file a request for an administrative hearing under § 222.151, unless the Secretary (or the Secretary's delegatee) extends that time limit in writing.
(b) The Secretary's (or the Secretary's delegatee's) consideration of a request for reconsideration is not prejudiced by a pending request for an administrative hearing on the same matter, or the fact that a matter has been scheduled for a hearing. The Secretary (or the Secretary's delegatee) may, but is not required to, postpone the administrative hearing due to a request for reconsideration.
(c) The Secretary (or the Secretary's delegatee) may reconsider any determination under the Act concerning a particular party unless the determination has been the subject of an administrative hearing under this part with respect to that party.
§ 222.153   How must a local educational agency request an administrative hearing?
An applicant requesting a hearing in accordance with this subpart must—
(a)(1) If it mails the hearing request, address it to the Secretary, c/o Director, Impact Aid Program, Room 3E105, U.S. Department of Education, 400 Maryland Avenue SW., Washington, DC 20202-6244;
(2) If it hand-delivers the hearing request, deliver it to the Director, Impact Aid Program, Room 3E105, U.S. Department of Education, 400 Maryland Avenue SW., Washington, DC 20202-6244; or
(3) If it emails the hearing request, send it to Impact.Aid@ed.gov.
Note to paragraph (a): The Secretary encourages applicants requesting an Impact Aid hearing to mail or email their requests. Because of enhanced security procedures, building access for non-official staff may be limited. Applicants should be prepared to mail their hearing requests if they or their courier are unable to obtain access to the building.
(b) Clearly specify in its written hearing request the issues of fact and law to be considered; and
(c) Furnish a copy of its hearing request to its State educational agency (SEA) (unless the applicant is an SEA).
§ 222.154   How must written submissions under this subpart be filed?
(a) All written submissions under this subpart must be filed by hand-delivery, mail, or facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(b) If agreed upon by the parties, a party may serve a document upon the other party or parties by facsimile transmission.
(c) The filing date for a written submission under this subpart is the date the document is—
(1) Hand-delivered;
(2) Mailed; or
(3) Sent by facsimile transmission.
(d) A party other than the Department filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department, including by the administrative law judge (ALJ).
(e) Any party filing a document by facsimile transmission must file a follow-up hard copy by hand-delivery or mail within a reasonable period of time.
§ 222.155   When and where is an administrative hearing held?
Administrative hearings under this subpart are held at the offices of the Department in Washington, DC, at a time fixed by the ALJ, unless the ALJ selects another place based upon the convenience of the parties.
§ 222.156   How is an administrative hearing conducted?
Administrative hearings under this subpart are conducted as follows:
(a) The administrative hearing is conducted by an ALJ appointed under 5 U.S.C. 3105, who issues rules of procedure that are proper and not inconsistent with this subpart.
(b) The parties may introduce all relevant evidence on the issues stated in the applicant's request for hearing or on other issues determined by the ALJ during the proceeding. The application in question and all amendments and exhibits must be made part of the hearing record.
(c) Technical rules of evidence, including the Federal Rules of Evidence, do not apply to hearings conducted under this subpart, but the ALJ may apply rules designed to assure production of the most credible evidence available, including allowing the cross-examination of witnesses.
(d) Each party may examine all documents and other evidence offered or accepted for the record, and may have the opportunity to refute facts and arguments advanced on either side of the issues.
(e) A transcript must be made of the oral evidence unless the parties agree otherwise.
(f) Each party may be represented by counsel.
(g) The ALJ is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
§ 222.157   What procedures apply for issuing or appealing an administrative law judge's decision?
(a) Decision. (1) The ALJ—
(i) Makes written findings and an initial decision based upon the hearing record; and
(ii) Forwards to the Secretary, and mails to each party, a copy of the written findings and initial decision.
(2) An ALJ's initial decision constitutes the Secretary's final decision without any further proceedings unless—
(i) A party, within the time limits stated in paragraph (b)(1)(ii) of this section, requests the Secretary to review the decision and that request is granted; or
(ii) The Secretary otherwise determines, within the time limits stated in paragraph (b)(2)(ii) of this section, to review the initial decision.
(3) When an initial decision becomes the Secretary's final decision without any further proceedings, the Department's Office of Hearings and Appeals notifies the parties of the finality of the decision.
(b) Administrative appeal of an initial decision. (1)(i) Any party may request the Secretary to review an initial decision.
(ii) A party must file such a request for review within 30 days of the party's receipt of the initial decision.
(2) The Secretary may—
(i) Grant or deny a timely request for review of an initial decision; or
(ii) Otherwise determine to review the decision, so long as that determination is made within 45 days of the date of receipt of the initial decision.
(3) The Secretary mails to each party written notice of—
(i) The Secretary's action granting or denying a request for review of an initial decision; or
(ii) The Secretary's determination to review an initial decision.
§ 222.158   What procedures apply to the Secretary's review of an initial decision?
When the Secretary reviews an initial decision, the Secretary—
(a) Notifies the applicant in writing that it may file a written statement or comments; and
(b) Mails to each party written notice of the Secretary's final decision.
§ 222.159   When and where does a party seek judicial review?
If an LEA or a State that is aggrieved by the Secretary's final decision following an administrative hearing proceeding under this subpart wishes to seek judicial review, the LEA or State must, within 30 working days (as determined by the LEAs or State) after receiving notice of the Secretary's final decision, file with the United States Court of Appeals for the circuit in which that LEA or State is located a petition for review of the final agency action, in accordance with section 8011(b) of the Act.
§ 222.160   What are the scope and purpose of this subpart?
(a) Scope. This subpart applies to determinations made by the Secretary under section 8009 of the Act.
(b) Purpose. The sole purpose of the regulations in this subpart is to implement the provisions of section 8009. The definitions and standards contained in this subpart apply only with respect to section 8009 and do not establish definitions and standards for any other purpose.
§ 222.161   How is State aid treated under section 7009 of the Act?
(a) General rules. (1) A State may take into consideration payments under sections 8002 and 8003(b) of the Act (including hold harmless payments calculated under section 8003(e)) in allocating State aid if that State has a State aid program that qualifies under § 222.162, except as follows:
(i) Those payments may be taken into consideration for each affected local educational agency (LEA) only in the proportion described in § 222.163.
(ii) A State may not take into consideration—
(A) That portion of an LEA's payment that is generated by the portion of a weight in excess of one under section 8003(a)(2)(B) of the Act (children residing on Indian lands);
(B) Payments under section 8003(d) of the Act (children with disabilities); or
(C) The amount that an LEA receives under section 8003(b)(2) that exceeds the amount the LEA would receive if eligible under section 8003(b)(1) and not section 8003(b)(2) (heavily impacted LEAs).
(2) No State aid program may qualify under this subpart if a court of that State has determined by final order, not under appeal, that the program fails to equalize expenditures for free public education among LEAs within the State or otherwise violates law, and if the court's order provides that the program is no longer in effect.
(3) No State, whether or not it has an equalization program that qualifies under § 222.162, may, in allocating State aid, take into consideration an LEA's eligibility for payments under the Act if that LEA does not apply for and receive those payments.
(4) Any State that takes into consideration payments under the Act in accordance with the provisions of section 8009 in allocating State aid to LEAs must reimburse any LEA for any amounts taken into consideration for any fiscal year to the extent that the LEA did not in fact receive payments in those amounts during that fiscal year.
(5) Except as provided in paragraph (a)(6), a State may not take into consideration payments under the Act in making estimated or final State aid payments before its State aid program has been certified by the Secretary.
(6)(i) If the Secretary has not made a determination under section 7009 of the Act for a fiscal year, the State may request permission from the Secretary to make estimated or preliminary State aid payments for that fiscal year, that consider a portion of Impact Aid payments as local resources in accordance with this section.
(ii) The State must include with its request an assurance that if the Secretary determines that the State does not meet the requirements of section 222.162 for that State fiscal year, the State must pay to each affected LEA, within 60 days of the Secretary's determination, the amount by which the State reduced State aid to the LEA.
(iii) In determining whether to grant permission, the Secretary may consider factors including whether—
(A) The Secretary certified the State under § 222.162 in the prior State fiscal year; and
(B) Substantially the same State aid program is in effect since the date of the last certification.
(b) Data for determinations. (1) Except as provided in paragraph (b)(2) of this section, determinations under this subpart requiring the submission of financial or school population data must be made on the basis of final data for the second fiscal year preceding the fiscal year for which the determination is made if substantially the same program was then in effect.
(2)(i) If the Secretary determines that the State has substantially revised its State aid program, the Secretary may certify that program for any fiscal year only if—
(A) The Secretary determines, on the basis of projected data, that the State's program will meet the disparity standard described in § 222.162 for the fiscal year for which the determination is made; and
(B) The State provides an assurance to the Secretary that, if final data do not demonstrate that the State's program met that standard for the fiscal year for which the determination is made, the State will pay to each affected LEA the amount by which the State reduced State aid to the LEA.
(ii) Data projections submitted by a State must set forth the assumptions upon which the data projections are founded, be accompanied by an assurance as to their accuracy, and be adjusted by actual data for the fiscal year of determination that must be submitted to the Secretary as soon as these data are available.
(3) For a State that has not previously been certified by the Secretary under § 222.162, or if the last certification was more than two years prior, the State submits projected data showing whether it meets the disparity standard in § 222.162. The projected data must show the resulting amounts of State aid as if the State were certified to consider Impact Aid in making State aid payments.
(c) Definitions. The following definitions apply to this subpart:
Current expenditures is defined in section 7013(4) of the Act. Additionally, for the purposes of this section it does not include expenditures of funds received by the agency under sections 7002 and 7003(b) (including hold harmless payments calculated under section 7003(e)) that are not taken into consideration under the State aid program and exceed the proportion of those funds that the State would be allowed to take into consideration under § 222.162.
Equalize expenditures means to meet the standard set forth in § 222.162.
Local tax revenues means compulsory charges levied by an LEA or by an intermediate school district or other local governmental entity on behalf of an LEA for current expenditures for educational services. “Local tax revenues” include the proceeds of ad valorem taxes, sales and use taxes, income taxes and other taxes. Where a State funding formula requires a local contribution equivalent to a specified mill tax levy on taxable real or personal property or both, “local tax revenues” include any revenues recognized by the State as satisfying that local contribution requirement.
Local tax revenues covered under a State equalization program means “local tax revenues” as defined in paragraph (c) of this section contributed to or taken into consideration in a State aid program subject to a determination under this subpart, but excluding all revenues from State and Federal sources.
Revenue means an addition to assets that does not increase any liability, does not represent the recovery of an expenditure, does not represent the cancellation of certain liabilities without a corresponding increase in other liabilities or a decrease in assets, and does not represent a contribution of fund capital in food service or pupil activity funds. Furthermore, the term “revenue” includes only revenue for current expenditures.
State aid means any contribution, no repayment for which is expected, made by a State to or on behalf of LEAs within the State for current expenditures for the provision of free public education.
Total local tax revenues means all “local tax revenues” as defined in paragraph (c) of this section, including tax revenues for education programs for children needing special services, vocational education, transportation, and the like during the period in question but excluding all revenues from State and Federal sources.
§ 222.162   What disparity standard must a State meet in order to be certified and how are disparities in current expenditures or revenues per pupil measured?
(a) Percentage disparity limitation. The Secretary considers that a State aid program equalizes expenditures if the disparity in the amount of current expenditures or revenues per pupil for free public education among LEAs in the State is no more than 25 percent. In determining the disparity percentage, the Secretary disregards LEAs with per pupil expenditures or revenues above the 95th or below the 5th percentile of those expenditures or revenues in the State. The method for calculating the percentage of disparity in a State is in the appendix to this subpart.
(b)(1) Weighted average disparity for different grade level groups. If a State requests it, the Secretary will make separate disparity computations for different groups of LEAs in the State that have similar grade levels of instruction.
(2) In those cases, the weighted average disparity for all groups, based on the proportionate number of pupils in each group, may not be more than the percentage provided in paragraph (a) of this section. The method for calculating the weighted average disparity percentage is set out in the appendix to this subpart.
(c) Per pupil figure computations. In calculating the current expenditures or revenue disparities under this section, computations of per pupil figures are made on one of the following bases:
(1) The per pupil amount of current expenditures or revenue for an LEA is computed on the basis of the total number of pupils receiving free public education in the schools of the agency. The total number of pupils is determined in accordance with whatever standard measurement of pupil count is used in the State.
(2) If a State aid program uses “weighted pupil,” “classroom,” “instructional unit,” or another designated measure of need in determining allocations of State aid to take account of special cost differentials, the computation of per pupil revenue or current expenditures may be made using one of the methods in paragraph (d) of this section. The two allowable categories of special cost differentials are—
(i) Those associated with pupils having special educational needs, such as children with disabilities, economically disadvantaged children, non-English speaking children, and gifted and talented children; and
(ii) Those associated with particular types of LEAs such as those affected by geographical isolation, sparsity or density of population, high cost of living, or special socioeconomic characteristics within the area served by an LEA.
(d) Accounting for special cost differentials. In computing per-pupil figures under paragraph (c) of this section, the State accounts for special cost differentials that meet the requirements of paragraph (c)(2) of this section in one of four ways:
(1) The inclusion method on a revenue basis. The State divides total revenues by a weighted pupil count that includes only those weights associated with the special cost differentials.
(2) The inclusion method on an expenditure basis. The State divides total current expenditures by a weighted pupil count that includes only those weights associated with the special cost differentials.
(3) The exclusion method on a revenue basis. The State subtracts revenues associated with the special cost differentials from total revenues, and divides this net amount by an unweighted pupil count.
(4) The exclusion method on an expenditure basis. The State subtracts current expenditures from revenues associated with the special cost differentials from total current expenditures, and divides this net amount by an unweighted pupil count.
§ 222.163   What proportion of Impact Aid funds may a State take into consideration upon certification?
(a) Provision of law. Section 8009(d)(1)(B) provides that, upon certification by the Secretary, in allocating State aid a State may consider as local resources funds received under sections 8002 and 8003(b) (including hold harmless payments calculated under section 8003(e)) only in proportion to the share that local tax revenues covered under a State equalization program are of total local tax revenues. Determinations of proportionality must be made on a case-by-case basis for each LEA affected and not on the basis of a general rule to be applied throughout a State.
(b) Computation of proportion. (1) In computing the share that local tax revenues covered under a State equalization program are of total local tax revenues for an LEA with respect to a program qualifying under § 222.162, the proportion is obtained by dividing the amount of local tax revenues covered under the equalization program by the total local tax revenues attributable to current expenditures for free public education within that LEA.
(2) In cases where there are no local tax revenues for current expenditures and the State provides all of those revenues on behalf of the LEA, the State may consider up to 100 percent of the funds received under the Act by that LEA in allocating State aid.
(c) Application of proportion to Impact Aid payments. Except as provided in § 222.161(a)(1)(ii) and (iii), the proportion established under this section (or a lesser proportion) for any LEA receiving payments under sections 8002 and 8003(b) (including hold harmless payments calculated under section 8003(e)) may be applied by a State to actual receipts of those payments.
§ 222.164   What procedures does the Secretary follow in making a determination under section 7009?
(a) Initiation. (1) A proceeding under this subpart leading to a determination by the Secretary under section 8009 may be initiated—
(i) By the State educational agency (SEA) or other appropriate agency of the State;
(ii) By an LEA; or
(iii) By the Secretary, if the Secretary has reason to believe that the State's action is in violation of section 8009.
(2) Whenever a proceeding under this subpart is initiated, the party initiating the proceeding shall provide either the State or all LEAs with a complete copy of the submission required in paragraph (b) of this section. Following receipt of the submission, the Secretary shall notify the State and all LEAs in the State of their right to request from the Secretary, within 30 days of the initiation of a proceeding, the opportunity to present their views to the Secretary before the Secretary makes a determination.
(b) Submission. (1) A submission by a State or LEA under this section must be made in the manner requested by the Secretary and must contain the information and assurances as may be required by the Secretary in order to reach a determination under section 8009 and this subpart.
(2)(i) A State in a submission shall—
(A) Demonstrate how its State aid program comports with § 222.162; and
(B) Demonstrate for each LEA receiving funds under the Act that the proportion of those funds that will be taken into consideration comports with § 222.163.
(ii) The submission must be received by the Secretary no later than 120 calendar days before the beginning of the State's fiscal year for the year of the determination, and must include (except as provided in § 222.161(c)(2)) final second preceding fiscal year disparity data enabling the Secretary to determine whether the standard in § 222.162 has been met. The submission is considered timely if received by the Secretary on or before the filing deadline or if it bears a U.S. Postal Service postmark dated on or before the filing deadline.
(3) An LEA in a submission must demonstrate whether the State aid program comports with section 8009.
(4) Whenever a proceeding is initiated under this subpart, the Secretary may request from a State the data deemed necessary to make a determination. A failure on the part of a State to comply with that request within a reasonable period of time results in a summary determination by the Secretary that the State aid program of that State does not comport with the regulations in this subpart.
(5) Before making a determination under section 8009, the Secretary affords the State, and all LEAs in the State, an opportunity to present their views as follows:
(i) Upon receipt of a timely request for a predetermination hearing, the Secretary notifies all LEAs and the State of the time and place of the predetermination hearing.
(ii) Predetermination hearings are informal and any LEA and the State may participate whether or not they requested the predetermination hearing.
(iii) At the conclusion of the predetermination hearing, the Secretary holds the record open for 15 days for the submission of post-hearing comments. The Secretary may extend the period for post-hearing comments for good cause for up to an additional 15 days.
(iv) Instead of a predetermination hearing, if the party or parties requesting the predetermination hearing agree, they may present their views to the Secretary exclusively in writing. In such a case, the Secretary notifies all LEAs and the State that this alternative procedure is being followed and that they have up to 30 days from the date of the notice in which to submit their views in writing. Any LEA or the State may submit its views in writing within the specified time, regardless of whether it requested the opportunity to present its views.
(c) Determinations. The Secretary reviews the participants' submissions and any views presented at a predetermination hearing under paragraph (b)(5) of this section, including views submitted during the post-hearing comment period. Based upon this review, the Secretary issues a written determination setting forth the reasons for the determination in sufficient detail to enable the State or LEAs to respond. The Secretary affords reasonable notice of a determination under this subpart and the opportunity for a hearing to the State or any LEA adversely affected by the determination.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, an applicant should check with its local post office.
§ 222.165   What procedures does the Secretary follow after making a determination under section 8009?
(a) Request for hearing. (1) A State or LEA that is adversely affected by a determination under section 8009 and this subpart and that desires a hearing regarding that determination must submit a written request for a hearing within 60 days of receipt of the determination. The time within which a request must be filed may not be extended unless the Secretary, or the Secretary's delegatee, extends the time in writing at the time notice of the determination is given.
(2) A request for a hearing in accordance with this section must specify the issues of fact and law to be considered.
(3) If an LEA requests a hearing, it must furnish a copy of the request to the State. If a State requests a hearing, it must furnish a copy of the request to all LEAs in the State.
(b) Right to intervene. Any LEA or State that is adversely affected by a determination shall have the right of intervention in the hearing.
(c) Time and place of hearing. The hearing is held at a time and place fixed by the Secretary or the Secretary's delegatee (with due regard to the mutual convenience of the parties).
(d) Counsel. In all proceedings under this section, all parties may be represented by counsel.
(e) Proceedings. (1) The Secretary refers the matter in controversy to an administrative law judge (ALJ) appointed under 5 U.S.C. 3105.
(2) The ALJ is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(f) Filing requirements. (1) Any written submission under this section must be filed by hand-delivery, mail, or facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(2) If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.
(3) The filing date for a written submission under this section is the date the document is—
(i) Hand-delivered;
(ii) Mailed; or
(iii) Sent by facsimile transmission.
(4) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.
(5) Any party filing a document by facsimile transmission must file a follow-up hard copy by hand-delivery or mail within a reasonable period of time.
(g) Procedural rules. (1) If, in the opinion of the ALJ, no dispute exists as to a material fact the resolution of which would be materially assisted by oral testimony, the ALJ shall afford each party to the proceeding an opportunity to present its case—
(i) In whole or in part in writing; or
(ii) In an informal conference after affording each party sufficient notice of the issues to be considered.
(2) With respect to hearings involving a dispute as to a material fact the resolution of which would be materially assisted by oral testimony, the ALJ shall afford the following procedures to each party:
(i) Sufficient notice of the issues to be considered at the hearing.
(ii) An opportunity to make a record of the proceedings.
(iii) An opportunity to present witnesses on the party's behalf.
(iv) An opportunity to cross-examine other witnesses either orally or through written interrogatories.
(h) Decisions. (1) The ALJ—
(i) Makes written findings and an initial decision based upon the hearing record; and
(ii) Forwards to the Secretary, and mails to each party, a copy of the written findings and initial decision.
(2) Appeals to the Secretary and the finality of initial decisions under section 8009 are governed by §§ 222.157(b), 222.158, and 222.159 of subpart J of this part.
(i) Corrective action. (1) Within 30 days after a determination by the Secretary that a State has been in violation of section 8009 unless the determination is timely appealed by the State, the State shall provide satisfactory written assurances that it will undertake appropriate corrective action if necessary.
(2) A State found by the Secretary to have been in violation of section 8009 following a hearing shall provide, within 30 days after disposal of the hearing request (such as by a final decision issued under this subpart or withdrawal of the hearing request), satisfactory assurances that it is taking corrective action, if necessary.
(3) At any time during a hearing under this subpart, a State may provide the Secretary appropriate assurances that it will undertake corrective action if necessary. The Secretary or the ALJ, as applicable, may stay the proceedings pending completion of corrective action.
§§ 222.166-222.169   [Reserved]
§ 222.170   What is the purpose of the Impact Aid Discretionary Construction grant program (Section 8007(b) of the Act)?
The Impact Aid Discretionary Construction grant program provides competitive grants for emergency repairs and modernization of school facilities to certain eligible local educational agencies (LEAs) that receive formula Impact Aid funds.
§ 222.171   What LEAs may be eligible for Discretionary Construction grants?
(a) Applications for these grants are considered in four funding priority categories. The specific requirements for each priority are detailed in §§ 222.177 through 222.182.
(b)(1) Generally, to be eligible for an emergency construction grant, an LEA must—
(i) Enroll a high proportion (at least 40 percent) of federally connected children in average daily attendance (ADA) who reside on Indian lands or who have a parent on active duty in the U.S. uniformed services;
(ii) Have a school that enrolls a high proportion of one of these types of students;
(iii) Be eligible for funding for heavily impacted LEAs under section 8003(b)(2) of the Act; or
(iv) Meet the specific numeric requirements regarding bonding capacity.
(2) The Secretary must also consider such factors as an LEA's total assessed value of real property that may be taxed for school purposes, its availability and use of bonding capacity, and the nature and severity of the emergency.
(c)(1) Generally, to be eligible for a modernization construction grant, an LEA must—
(i) Be eligible for Impact Aid funding under either section 8002 or 8003 of the Act;
(ii) Be eligible for funding for heavily impacted LEAs under section 8003(b)(2) of the Act;
(iii) Enroll a high proportion (at least 40 percent) of federally connected children in ADA who reside on Indian lands or who have a parent on active duty in the U.S. uniformed services;
(iv) Have a school that enrolls a high proportion of one of these types of students; or
(v) Meet the specific numeric requirements regarding bonding capacity.
(2) The Secretary must also consider such factors as an LEA's total assessed value of real property that may be taxed for school purposes, its availability and use of bonding capacity, and the nature and severity of its need for modernization funds.
§ 222.172   What activities may an LEA conduct with funds received under this program?
(a) An LEA may use emergency grant funds received under this program only to repair, renovate, alter, and, in the limited circumstances described in paragraph (c) of this section, replace a public elementary or secondary school facility used for free public education to ensure the health and safety of students and personnel, including providing accessibility for the disabled as part of a larger project.
(b) An LEA may use modernization grant funds received under this program only to renovate, alter, retrofit, extend, and, in the limited circumstances described in paragraph (c) of this section, replace a public elementary or secondary school facility used for free public education to provide school facilities that support a contemporary educational program for the LEA's students at normal capacity, and in accordance with the laws, standards, or common practices in the LEA's State.
(c)(1) An emergency or modernization grant under this program may be used for the construction of a new school facility but only if the Secretary determines—
(i) That the LEA holds title to the existing facility for which funding is requested; and
(ii) In consultation with the grantee, that partial or complete replacement of the facility would be less expensive or more cost-effective than improving the existing facility.
(2) When construction of a new school facility is permitted, emergency and modernization funds may be used only for a new school facility that is used for free public education. These funds may be used for the—
(i) Construction of instructional, resource, food service, and general or administrative support areas, so long as they are a part of the instructional facility; and
(ii) Purchase of initial equipment or machinery, and initial utility connections.
§ 222.173   What activities will not receive funding under a Discretionary Construction grant?
The Secretary does not fund the following activities under a Discretionary Construction grant:
(a) Improvements to facilities for which the LEA does not have full title or other interest, such as a lease-hold interest.
(b) Improvements to or repairs of school grounds, such as environmental remediation, traffic remediation, and landscaping, that do not directly involve instructional facilities.
(c) Repair, renovation, alteration, or construction for stadiums or other facilities that are primarily used for athletic contests, exhibitions, and other events for which admission is charged to the general public.
(d) Improvements to or repairs of teacher housing.
(e) Except in the limited circumstances as provided in § 222.172(c), when new construction is permissible, acquisition of any interest in real property.
(f) Maintenance costs associated with any of an LEA's school facilities.
§ 222.174   What prohibitions apply to these funds?
Grant funds under this program may not be used to supplant or replace other available non-Federal construction money. These grant funds may be used for emergency or modernization activities only to the extent that they supplement the amount of construction funds that would, in the absence of these grant funds, be available to a grantee from non-Federal funds for these purposes.
§ 222.175   What regulations apply to recipients of funds under this program?
The following regulations apply to the Impact Aid Discretionary Construction program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs) except for 34 CFR §§ 75.600 through 75.617.
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(b) The OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted and amended as regulations of the Department in 2 CFR part 3485, and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted and amended in 2 CFR part 3474.
(c) The regulations in 34 CFR part 222.
§ 222.176   What definitions apply to this program?
(a) In addition to the terms referenced in 34 CFR 222.2, the following definitions apply to this program:
Bond limit means the cap or limit that a State may impose on an LEA's capacity for bonded indebtedness. For applicants in States that place no limit on an LEA's capacity for bonded indebtedness, the Secretary shall consider the LEA's bond limit to be 10 percent of its total assessed valuation.
Construction means
(1) Preparing drawings and specifications for school facilities;
(2) Repairing, renovating, or altering school facilities;
(3) Extending school facilities as described in § 222.172(b);
(4) Erecting or building school facilities, as described in § 222.172(c); and
(5) Inspections or supervision related to school facilities projects.
Emergency means a school facility condition that is so injurious or hazardous that it either poses an immediate threat to the health and safety of the facility's students and staff or can be reasonably expected to pose such a threat in the near future. These conditions can include deficiencies in the following building features: a roof; electrical wiring; a plumbing or sewage system; heating, ventilation, or air conditioning; the need to bring a school facility into compliance with fire and safety codes, or providing accessibility for the disabled as part of a larger project.
Level of bonded indebtedness means the amount of long-term debt issued by an LEA divided by the LEA's bonding capacity.
Minimal capacity to issue bonds means that the total assessed value of real property in an LEA that may be taxed for school purposes is at least $25,000,000 but not more than $50,000,000.
Modernization means the repair, renovation, alteration, or extension of a public elementary or secondary school facility in order to support a contemporary educational program for an LEA's students in normal capacity, and in accordance with the laws, standards, or common practices in the LEA's State.
No practical capacity to issue bonds means that the total assessed value of real property in an LEA that may be taxed for school purposes is less than $25,000,000.
School facility means a building used to provide free public education, including instructional, resource, food service, and general or administrative support areas, so long as they are a part of the facility.
Total assessed value per student means the assessed valuation of real property per pupil (AVPP), unless otherwise defined by an LEA's State.
(b) The following terms used in this subpart are defined or referenced in 34 CFR 77.1:
§ 222.177   What eligibility requirements must an LEA meet to apply for an emergency grant under the first priority?
An LEA is eligible to apply for an emergency grant under the first priority of section 8007(b) of the Act if it—
(a) Is eligible to receive formula construction funds for the fiscal year under section 8007(a) of the Act;
(b)(1) Has no practical capacity to issue bonds;
(2) Has minimal capacity to issue bonds and has used at least 75 percent of its bond limit; or
(3) Is eligible to receive funds for the fiscal year for heavily impacted districts under section 8003(b)(2) of the Act; and
(c) Has a school facility emergency that the Secretary has determined poses a health or safety hazard to students and school personnel.
§ 222.178   What eligibility requirements must an LEA meet to apply for an emergency grant under the second priority?
Except as provided in § 222.179, an LEA is eligible to apply for an emergency grant under the second priority of section 8007(b) of the Act if it—
(a) Is eligible to receive funds for the fiscal year under section 8003(b) of the Act;
(b)(1) Enrolls federally connected children living on Indian lands equal to at least 40 percent of the total number of children in average daily attendance (ADA) in its schools; or
(2) Enrolls federally connected children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA in its schools;
(c) Has used at least 75 percent of its bond limit;
(d) Has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average; and
(e) Has a school facility emergency that the Secretary has determined poses a health or safety hazard to students and school personnel.
§ 222.179   Under what circumstances may an ineligible LEA apply on behalf of a school for an emergency grant under the second priority?
An LEA that is eligible to receive section 8003(b) assistance for the fiscal year but that does not meet the other eligibility criteria described in § 222.178(a) or (b) may apply on behalf of a school located within its geographic boundaries for an emergency grant under the second priority of section 8007(b) of the Act if—
(a) The school—
(1) Enrolls children living on Indian lands equal to at least 40 percent of the total number of children in ADA; or
(2) Enrolls children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA;
(b) The school has a school facility emergency that the Secretary has determined poses a health or safety hazard to students and school personnel;
(c) The LEA has used at least 75 percent of its bond limit; and
(d) The LEA has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average.
§ 222.180   What eligibility requirements must an LEA meet to apply for a modernization grant under the third priority?
An LEA is eligible to apply for a modernization grant under the third priority of section 8007(b) of the Act if it—
(a) Is eligible to receive funds for the fiscal year under section 8002 or 8003(b) of the Act;
(b)(1) Has no practical capacity to issue bonds;
(2) Has minimal capacity to issue bonds and has used at least 75 percent of its bond limit; or
(3) Is eligible to receive funds for the fiscal year for heavily impacted districts under section 8003(b)(2) of the Act; and
(c) Has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of Federal property, or an increase in enrollment due to expanded Federal activities, housing privatization, or the acquisition of Federal property.
§ 222.181   What eligibility requirements must an LEA meet to apply for a modernization grant under the fourth priority?
An LEA is eligible to apply for a modernization grant under the fourth priority of section 8007(b) of the Act if it—
(a)(1) Is eligible to receive funds for the fiscal year under section 8003(b) of the Act; and
(i) Enrolls children living on Indian lands equal to at least 40 percent of the total number of children in ADA in its schools; or
(ii) Enrolls children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA in its schools; or
(2) Is eligible to receive assistance for the fiscal year under section 8002 of the Act;
(b) Has used at least 75 percent of its bond limit;
(c) Has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average; and
(d) Has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of Federal property, or an increase in enrollment due to expanded Federal activities, housing privatization, or the acquisition of Federal property.
§ 222.182   Under what circumstances may an ineligible LEA apply on behalf of a school for a modernization grant under the fourth priority?
An LEA that is eligible to receive a payment under Title VIII for the fiscal year but that does not meet the other eligibility criteria described in § 222.181 may apply on behalf of a school located within its geographic boundaries for a modernization grant under the fourth priority of section 8007(b) of the Act if—
(a) The school—
(1) Enrolls children living on Indian lands equal to at least 40 percent of the total number of children in ADA; or
(2) Enrolls children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA;
(b) The LEA has used at least 75 percent of its bond limit;
(c) The LEA has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average; and
(d) The school has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of Federal property, or an increase in enrollment due to expanded Federal activities, housing privatization, or the acquisition of Federal property.
§ 222.183   How does an LEA apply for a grant?
(a) To apply for funds under this program, an LEA may submit only one application for one educational facility for each competition.
(b) An application must—
(1) Contain the information required in §§ 222.184 through 222.186, as applicable, and in any application notice that the Secretary may publish in the Federal Register ; and
(2) Be timely filed in accordance with the provisions of the Secretary's application notice.
§ 222.184   What information must an application contain?
An application for an emergency or modernization grant must contain the following information:
(a) The name of the school facility the LEA is proposing to repair, construct, or modernize.
(b)(1) For an applicant under section 8003(b) of the Act, the number of federally connected children described in section 8003(a)(1) enrolled in the school facility, as well as the total enrollment in the facility, for which the LEA is seeking a grant; or
(2) For an applicant under section 8002 of the Act, the total enrollment, for the preceding year, in the LEA and in the school facility for which the LEA is seeking a grant, based on the fall State count date.
(c) The identification of the LEA's interest in, or authority over, the school facility involved, such as an ownership interest or a lease arrangement.
(d) The original construction date of the school facility that the LEA proposes to renovate or modernize.
(e) The dates of any major renovations of that school facility and the areas of the school covered by the renovations.
(f) The proportion of Federal acreage within the geographic boundaries of the LEA.
(g) Fiscal data including the LEA's—
(1) Maximum bonding capacity;
(2) Amount of bonded debt;
(3) Total assessed value of real property available to be taxed for school purposes;
(4) State average assessed value per pupil of real property available to be taxed for school purposes;
(5) Local real property tax levy, in mills or dollars, used to generate funds for capital expenditures; and
(6) Sources and amounts of funds available for the proposed project.
(h) A description of the need for funds and the proposed project for which a grant under this subpart L would be used, including a cost estimate for the project.
(i) Applicable assurances and certifications identified in the approved grant application package.
§ 222.185   What additional information must be included in an emergency grant application?
In addition to the information specified in § 222.184, an application for an emergency grant must contain the following:
(a) A description of the deficiency that poses a health or safety hazard to occupants of the facility.
(b) A description of how the deficiency adversely affects the occupants and how it will be repaired.
(c) A statement signed by an appropriate local official, as defined below, that the deficiency threatens the health and safety of occupants of the facility or prevents the use of the facility. An appropriate local official may include a local building inspector, a licensed architect, or a licensed structural engineer. An appropriate local official may not include a member of the applicant LEA's staff.
§ 222.186   What additional information must be included in a modernization grant application?
In addition to the information specified in § 222.184, an application for a modernization grant must contain a description of—
(a) The need for modernization; and
(b) How the applicant will use funds received under this program to address the need referenced in paragraph (a) of this section.
§ 222.187   Which year's data must an SEA or LEA provide?
(a) Except as provided in paragraph (b) of this section, the Secretary will determine eligibility under this discretionary program based on student and fiscal data for each LEA from the fiscal year preceding the fiscal year for which the applicant is applying for funds.
(b) If satisfactory fiscal data are not available from the preceding fiscal year, the Secretary will use data from the most recent fiscal year for which data that are satisfactory to the Secretary are available.
§ 222.188   What priorities may the Secretary establish?
In any given year, the Secretary may assign extra weight for certain facilities systems or emergency and modernization conditions by identifying the systems or conditions and their assigned weights in a notice published in the Federal Register.
§ 222.189   What funding priority does the Secretary give to applications?
(a) Except as provided in paragraph (b) of this section, the Secretary gives funding priority to applications in the following order:
(1) First priority is given to applications described under § 222.177 and, among those applicants for emergency grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the emergency.
(2) After all eligible first-priority applications are funded, second priority is given to applications described under §§ 222.178 and 222.179 and, among those applicants for emergency grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the emergency.
(3) Third priority is given to applications described under § 222.180 and, among those applicants for modernization grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the need for modernization.
(4) Fourth priority is given to applications described under §§ 222.181 and 222.182 and, among those applicants for modernization grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the need for modernization.
(b)(1) The Secretary makes awards in each priority described above until the Secretary is unable to make an approvable award in that priority.
(2) If the Secretary is unable to fund a full project or a viable portion of a project, the Secretary may continue to fund down the list of high-ranking applicants within a priority.
(3) The Secretary applies any remaining funds to awards in the next priority.
(4) If an applicant does not receive an emergency or modernization grant in a fiscal year, the Secretary will, subject to the availability of funds and to the priority and award criteria, consider that application in the following year along with the next fiscal year's pool of applications.
§ 222.190   How does the Secretary rank and select applicants?
(a) To the extent that they are consistent with these regulations and section 8007(b) of the Act, the Secretary will follow grant selection procedures that are specified in 34 CFR 75.215 through 75.222. In general these procedures are based on the authorizing statute, the selection criteria, and any priorities or other applicable requirements that have been published in the Federal Register.
(b) In the event of ties in numeric ranking, the Secretary may consider as tie-breaking factors: the severity of the emergency or the need for modernization; for applicants under section 8003 of the Act, the numbers of federally connected children who will benefit from the project; or for applicants under section 8002 of the Act, the numbers of children who will benefit from the project; the AVPP compared to the LEA's State average; and available resources or non-Federal funds available for the grant project.
§ 222.191   What is the maximum award amount?
(a) Subject to any applicable contribution requirements as described in §§ 222.192 and 222.193, the procedures in 34 CFR 75.231 through 75.236, and the provisions in paragraph (b) of this section, the Secretary may fund up to 100 percent of the allowable costs in an approved grantee's proposed project.
(b) An award amount may not exceed the difference between—
(1) The cost of the proposed project; and
(2) The amount the grantee has available or will have available for this purpose from other sources, including local, State, and other Federal funds.
§ 222.192   What local funds may be considered as available for this project?
To determine the amount of local funds that an LEA has available under § 222.191(b)(2) for a project under this program, the Secretary will consider as available all LEA funds that may be used for capital expenditures except $100,000 or 10 percent of the average annual capital expenditures of the applicant for the three previous fiscal years, whichever is greater. The Secretary will not consider capital funds that an LEA can demonstrate have been committed through signed contracts or other written binding agreements but have not yet been expended.
§ 222.193   What other limitations on grant amounts apply?
(a) Except as provided in paragraph (b) of this section and § 222.191, the amount of funds provided under an emergency grant or a modernization grant awarded to an eligible LEA is subject to the following limitations:
(1) The award amount may not be more than 50 percent of the total cost of an approved project.
(2) The total amount of grant funds may not exceed four million dollars during any four-year period.
(b) Emergency or modernization grants to LEAs with no practical capacity to issue bonds as defined in § 222.176 are not subject to the award limitations described in paragraph (a) of this section.
§ 222.194   Are “in-kind” contributions permissible?
(a) LEAs that are subject to the applicable matching requirement described in § 222.193(a) may use allowable third party in-kind contributions as defined below to meet the requirements.
(b) Third party in-kind contributions mean property or services that benefit this grant program and are contributed by non-Federal third parties without charge to the grantee or by a cost-type contractor under the grant agreement.
(c) Subject to the limitations of 34 CFR 75.564(c)(2) regarding indirect costs, the provisions of 2 CFR 200.306 govern the allowability and valuation of in-kind contributions, except that it is permissible for a third party to contribute real property to a grantee for a project under this program, so long as no Federal funds are spent for the acquisition of real property.
§ 222.195   How does the Secretary make funds available to grantees?
The Secretary makes funds available to a grantee during a project period using the following procedure:
(a) Upon final approval of the grant proposal, the Secretary authorizes a project period of up to 60 months based upon the nature of the grant proposal and the time needed to complete the project.
(b) The Secretary then initially makes available to the grantee 10 percent of the total award amount.
(c) After the grantee submits a copy of the emergency or modernization contract approved by the grantee's governing board, the Secretary makes available 80 percent of the total award amount to a grantee.
(d) The Secretary makes available up to the remaining 10 percent of the total award amount to the grantee after the grantee submits a statement that—
(1) Details any earnings, savings, or interest;
(2) Certifies that—
(i) The project is fully completed; and
(ii) All the awarded funds have been spent for grant purposes; and
(3) Is signed by the—
(i) Chairperson of the governing board;
(ii) Superintendent of schools; and
(iii) Architect of the project.
§ 222.196   What additional construction and legal requirements apply?
(a) Except as provided in paragraph (b) of this section, a grantee under this program must comply with—
(1) The general construction legal requirements identified in the grant application assurances;
(2) The prevailing wage standards in the grantee's locality that are established by the Secretary of Labor in accordance with the Davis-Bacon Act (40 U.S.C. 276a, et seq. ); and
(3) All relevant Federal, State, and local environmental laws and regulations.
(b) A grantee that qualifies for a grant because it enrolls a high proportion of federally connected children who reside on Indian lands is considered to receive a grant award primarily for the benefit of Indians and must therefore comply with the Indian preference requirements of section 7(b) of the Indian Self-Determination Act.