79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–504

IMPACT AID REAUTHORIZATION ACT OF 2000

FEBRUARY 29, 2000.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. GOODLING, from the Committee on Education and the

Workforce, submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 3616]

[Including cost estimate of the Congressional Budget Office]

The Committee on Education and the Workforce, to whom was

referred the bill (H.R. 3616) to reauthorize the impact aid program

under the Elementary and Secondary Education Act of 1965, and

for other purposes, having considered the same, report favorably

thereon with an amendment and recommend that the bill as

amended do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Impact Aid Reauthorization Act of 2000’’.

SEC. 2. PURPOSE.

Section 8001 of the Elementary and Secondary Education Act of 1965 (20 U.S.C.

7701) is amended—

(1) in the matter preceding paragraph (1)—

(A) by inserting after ‘‘educational services to federally connected children’’ the following: ‘‘in a manner that promotes control by local educational

agencies with little or no Federal or State involvement’’; and

(B) by inserting after ‘‘certain activities of the Federal Government’’ the

following: ‘‘, such as activities to fulfill the responsibilities of the Federal

Government with respect to Indian tribes and activities under section 514

of the Soldiers’ and Sailors’ Civil Relief Act of 1940 (50 U.S.C. App. 574),’’;

(2) in paragraph (4), by adding ‘‘or’’ at the end;

(3) by striking paragraph (5);

(4) by redesignating paragraph (6) as paragraph (5); and
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(5) in paragraph (5) (as redesignated), by inserting before the period at the

end the following: ‘‘and because of the difficulty of raising local revenue through

bond referendums for capital projects due to the inability to tax Federal property’’.

SEC. 3. PAYMENTS RELATING TO FEDERAL ACQUISITION OF REAL PROPERTY.

(a) FISCAL YEAR REQUIREMENT.—Section 8002(a) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7702(a)) is amended in the matter preceding paragraph (1) by striking ‘‘1999’’ and inserting ‘‘2005’’.

(b) AMOUNT.— (1) INSUFFICIENT FUNDS.—Section 8002(b)(1)(B) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7702(b)(1)(B)) is amended by striking

‘‘shall ratably reduce the payment to each eligible local educational agency’’ and

inserting ‘‘shall calculate the payment for each eligible local educational agency

in accordance with subsection (h)’’.

(2) MAXIMUM AMOUNT.—Section 8002(b)(1)(C) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7702(b)(1)(C)) is amended by adding

at the end before the period the following: ‘‘, or the maximum amount that such

agency is eligible to receive for such fiscal year under this section, whichever

is greater’’.

(c) PAYMENTS WITH RESPECT TO FISCAL YEARS IN WHICH INSUFFICIENT FUNDS

ARE APPROPRIATED.—Section 8002(h) of the Elementary and Secondary Education

Act of 1965 (20 U.S.C. 7702(h)) is amended to read as follows:

‘‘(h) PAYMENTS WITH RESPECT TO FISCAL YEARS IN WHICH INSUFFICIENT FUNDS

ARE APPROPRIATED.—For any fiscal year for which the amount appropriated under

section 8014(a) is insufficient to pay to each local educational agency the full

amount determined under subsection (b), the Secretary shall make payments to

each local educational agency under this section as follows:

‘‘(1) FOUNDATION PAYMENTS FOR PRE-1995 RECIPIENTS.—

‘‘(A) IN GENERAL.—The Secretary shall first make a foundation payment

to each local educational agency that is eligible to receive a payment under

this section for the fiscal year involved and was eligible to receive a payment under section 2 of the Act of September 30, 1950 (Public Law 874,

81st Congress) (as such section was in effect on the day preceding the date

of the enactment of the Improving America’s Schools Act of 1994) for any

of the fiscal years 1989 through 1994.

‘‘(B) AMOUNT.—The amount of a payment under subparagraph (A) for a

local educational agency shall be equal to 37 percent of the payment

amount the local educational agency was eligible to receive under section

2 of the Act of September 30, 1950, for fiscal year 1994 (or if the local educational agency was not eligible to receive a payment under such section

2 for fiscal year 1994, the payment that local educational agency was eligible to receive under such section 2 for the most recent fiscal year preceding

1994).

‘‘(C) INSUFFICIENT APPROPRIATIONS.—If the amount appropriated under

section 8014(a) is insufficient to pay the full amount determined under this

paragraph for all eligible local educational agencies for the fiscal year, then

the Secretary shall ratably reduce the payment to each local educational

agency under this paragraph.

‘‘(2) PAYMENTS FOR 1995 RECIPIENTS.—

‘‘(A) IN GENERAL.—From any amounts remaining after making payments

under paragraph (1) for the fiscal year involved, the Secretary shall make

a payment to each eligible local educational agency that received a payment

under this section for fiscal year 1995.

‘‘(B) AMOUNT.—The amount of a payment under subparagraph (A) for a

local educational agency shall be determined as follows:

‘‘(i) Calculate the difference between the amount appropriated to

carry out this section for fiscal year 1995 and the total amount of foundation payments made under paragraph (1) for the fiscal year.

‘‘(ii) Determine the percentage share for each local educational agency that received a payment under this section for fiscal year 1995 by

dividing the assessed value of the Federal property of the local educational agency for fiscal year 1995 determined in accordance with subsection (b)(3), by the total national assessed value of the Federal property of all such local educational agencies for fiscal year 1995, as so determined.

‘‘(iii) Multiply the percentage share described in clause (ii) for the

local educational agency by the amount determined under clause (i).
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‘‘(3) SUBSECTION (i) RECIPIENTS.—From any funds remaining after making

payments under paragraphs (1) and (2) for the fiscal year involved, the Secretary shall make payments in accordance with subsection (i).

‘‘(4) REMAINING FUNDS.—From any funds remaining after making payments

under paragraphs (1), (2), and (3) for the fiscal year involved—

‘‘(A) the Secretary shall make a payment to each local educational agency

that received a foundation payment under paragraph (1) for the fiscal year

involved in an amount that bears the same relation to 25 percent of the

remainder as the amount the local educational agency received under paragraph (1) for the fiscal year involved bears to the amount all local educational agencies received under paragraph (1) for the fiscal year involved;

and

‘‘(B) the Secretary shall make a payment to each local educational agency

that is eligible to receive a payment under this section for the fiscal year

involved in an amount that bears the same relation to 75 percent of the

remainder as a percentage share determined for the local educational agency (in the same manner as percentage shares are determined for local educational agencies under paragraph (2)(B)(ii)) bears to the percentage share

determined (in the same manner) for all local educational agencies eligible

to receive a payment under this section for the fiscal year involved, except

that for the purpose of calculating a local educational agency’s assessed

value of the Federal property, data from the most current fiscal year shall

be used.’’.

(d) SPECIAL PAYMENTS.— (1) IN GENERAL.—Section 8002(i)(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7702(i)(1)) is amended to read as follows:

‘‘(1) IN GENERAL.—For any fiscal year beginning with fiscal year 2000 for

which the amount appropriated to carry out this section exceeds the amount so

appropriated for fiscal year 1996 and for which subsection (b)(1)(B) applies, the

Secretary shall use the remainder described in subsection (h)(3) for the fiscal

year involved (not to exceed the amount equal to the difference between (A) the

amount appropriated to carry out this section for fiscal year 1997 and (B) the

amount appropriated to carry out this section for fiscal year 1996) to increase

the payment that would otherwise be made under this section to not more than

50 percent of the maximum amount determined under subsection (b) for any

local educational agency described in paragraph (2).’’.

(2) CONFORMING AMENDMENT.—The heading of section 8002(i) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7702(i)) is amended by

striking ‘‘PRIORITY’’ and inserting SPECIAL’’.

(e) ADDITIONAL ASSISTANCE FOR CERTAIN LOCAL EDUCATIONAL AGENCIES IM- PACTED BY FEDERAL PROPERTY ACQUISITION.—Section 8002(j)(2) of the Elementary

and Secondary Education Act of 1965 (20 U.S.C. 7702(j)(2)) is amended—

(1) by striking ‘‘(A) A local educational agency’’ and inserting ‘‘A local educational agency’’;

(2) by redesignating clauses (i) through (v) as subparagraphs (A) through (E),

respectively; and

(3) in subparagraph (C) (as redesignated), by adding at the end before the

semicolon the following: ‘‘and such agency does not currently have a military

installation located within its geographic boundaries’’.

(f) DATA; PRELIMINARY AND FINAL PAYMENTS.—Section 8002 of the Elementary

and Secondary Education Act of 1965 (20 U.S.C. 7702) is amended by adding at the

end the following:

‘‘(l) DATA; PRELIMINARY AND FINAL PAYMENTS.—

‘‘(1) IN GENERAL.—The Secretary shall—

‘‘(A) not later than 30 days following the application deadline under section 8005(c) for a fiscal year, require any local educational agency that applied for a payment under subsection (b) for the fiscal year to submit such

data as may be necessary in order to compute the payment;

‘‘(B) as soon as possible after the beginning of any fiscal year, but no later

than 60 days after the enactment of an Act making appropriations to carry

out this title for the fiscal year, provide a preliminary payment under subsection (b) for any local educational agency that applied for a payment

under subsection (b) for the fiscal year and was eligible for such a payment

for the preceding fiscal year, in the amount of 60 percent of the payment

for the previous year; and

‘‘(C) provide a final payment under subsection (b) for any eligible local

educational agency not later than 12 months after the application deadline

established under section 8005(c), except that any local educational agency
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failing to submit all of the data required under subparagraph (A) shall be

denied such payment for the fiscal year for which the application is made

unless funds from a source other than the Act described in subparagraph

(B) are made available to provide such payment.

‘‘(2) ELIGIBILITY FOR PAYMENTS IN SUBSEQUENT YEARS.—The denial of a payment under subsection (b) to a local educational agency for a fiscal year pursuant to this subsection shall not affect the eligibility of the local educational

agency for a final payment under subsection (b) for a subsequent fiscal year.’’.

SEC. 4. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN.

(a) MILITARY INSTALLATION HOUSING UNDERGOING RENOVATION OR REBUILDING.— (1) IN GENERAL.—Section 8003(a)(4) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7703(a)) is amended—

(A) in the heading, by striking ‘‘UNDERGOING RENOVATION’’ and inserting

‘‘UNDERGOING RENOVATION OR REBUILDING’’;

(B) by striking ‘‘For purposes’’ and inserting the following:

‘‘(A) IN GENERAL.—For purposes’’;

(C) in subparagraph (A) (as designated by subparagraph (B)), by inserting

‘‘or rebuilding’’ after ‘‘undergoing renovation’’; and

(D) by adding at the end the following:

‘‘(B) LIMITATIONS.—(i)(I) Except as provided in subclause (II), children described in paragraph (1)(D)(i) may be deemed to be children described in

paragraph (1)(B) with respect to housing on Federal property undergoing

renovation or rebuilding in accordance with subparagraph (A) for a period

not to exceed 2 fiscal years.

‘‘(II) If the Secretary determines, on the basis of a certification provided

to the Secretary by a designated representative of the Secretary of Defense,

that the expected completion date of the renovation or rebuilding of the

housing has been delayed by not less than 1 year, then—

‘‘(aa) in the case of a determination made by the Secretary in the 1st

fiscal year described in subclause (I), the time period described such

subclause shall be extended by the Secretary for an additional 2 years;

and

‘‘(bb) in the case of a determination made by the Secretary in the 2nd

fiscal year described in subclause (I), the time period described such

subclause shall be extended by the Secretary for an additional 1 year.

‘‘(ii) The number of children described in paragraph (1)(D)(i) who are

deemed to be children described in paragraph (1)(B) with respect to housing

on Federal property undergoing renovation or rebuilding in accordance with

subparagraph (A) for any fiscal year may not exceed the maximum number

of children who are expected to occupy that housing upon completion of the

renovation or rebuilding.’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply

with respect to payments to a local educational agency for fiscal years beginning

before, on, or after the date of the enactment of this Act.

(b) MILITARY ‘BUILD TO LEASE’ PROGRAM HOUSING.—Section 8003(a) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7703(a)) is amended by

adding at the end the following:

‘‘(5) MILITARY ‘BUILD TO LEASE’ PROGRAM HOUSING.—

‘‘(A) IN GENERAL.—For purposes of computing the amount of payment for

a local educational agency for children identified under paragraph (1), the

Secretary shall consider children residing in housing initially acquired or

constructed under the former section 2828(g) of title 10, United States Code

(commonly known as the ‘Build to Lease’ program), as added by section 801

of the Military Construction Authorization Act, 1984, to be children described under paragraph (1)(B) if the property described is within the

fenced security perimeter of the military facility upon which such housing

is situated.

‘‘(B) ADDITIONAL REQUIREMENTS.—If the property described in subparagraph (A) is not owned by the Federal Government, is subject to taxation

by a State or political subdivision of a State, and thereby generates revenues for a local educational agency that is applying to receive a payment

under this section, then the Secretary—

‘‘(i) shall require the local educational agency to provide certification

from an appropriate official of the Department of Defense that the

property is being used to provide military housing; and

‘‘(ii) shall reduce the amount of the payment under this section by

an amount equal to the amount of revenue from such taxation received
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in the second preceding fiscal year by such local educational agency,

unless the amount of such revenue was taken into account by the State

for such second preceding fiscal year and already resulted in a reduction in the amount of State aid paid to such local educational agency.’’.

SEC. 5. MAXIMUM AMOUNT OF BASIC SUPPORT PAYMENTS.

Section 8003(b)(1) of the Elementary and Secondary Education Act of 1965 (20

U.S.C. 7703(b)(1)) is amended by adding at the end the following:

‘‘(D) INCREASE IN LOCAL CONTRIBUTION RATE DUE TO UNUSUAL GEOGRAPHIC FACTORS.—If the current expenditures in those local educational

agencies which the Secretary has determined to be generally comparable to

the local educational agency for which a computation is made under subparagraph (C) are not reasonably comparable because of unusual geographical factors which affect the current expenditures necessary to maintain, in such agency, a level of education equivalent to that maintained in

such other agencies, then the Secretary shall increase the local contribution

rate for such agency under subparagraph (C)(iii) by such an amount which

the Secretary determines will compensate such agency for the increase in

current expenditures necessitated by such unusual geographical factors.

The amount of any such supplementary payment may not exceed the perpupil share (computed with regard to all children in average daily attendance), as determined by the Secretary, of the increased current expenditures necessitated by such unusual geographic factors.’’.

SEC. 6. BASIC SUPPORT PAYMENTS FOR HEAVILY IMPACTED LOCAL EDUCATIONAL AGENCIES.

(a) IN GENERAL.—Section 8003(b) of the Elementary and Secondary Education Act

of 1965 (20 U.S.C. 7703(b)) is amended—

(1) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and

(2) by inserting after paragraph (1) the following:

‘‘(2) BASIC SUPPORT PAYMENTS FOR HEAVILY IMPACTED LOCAL EDUCATIONAL

AGENCIES.—

‘‘(A) IN GENERAL.—(i) From the amount appropriated under section

8014(b) for a fiscal year, the Secretary is authorized to make basic support

payments to eligible heavily impacted local educational agencies with children described in subsection (a).

‘‘(ii) A local educational agency that receives a basic support payment

under this paragraph for a fiscal year shall not be eligible to receive a basic

support payment under paragraph (1) for that fiscal year.

‘‘(B) ELIGIBILITY FOR CONTINUING HEAVILY IMPACTED LOCAL EDUCATIONAL

AGENCIES.—

‘‘(i) FISCAL YEAR 2001.—A heavily impacted local educational agency

is eligible to receive a basic support payment under subparagraph (A)

for fiscal year 2001 with respect to a number of children determined

under subsection (a)(1) only if the agency received an additional assistance payment under subsection (f) (as such subsection was in effect on

the day before the date of the enactment of the Impact Aid Reauthorization Act of 2000) for fiscal year 2000.

‘‘(ii) FISCAL YEAR 2002 AND SUBSEQUENT FISCAL YEARS.—A heavily impacted local educational agency described in clause (i) is eligible to receive a basic support payment under subparagraph (A) for fiscal year

2002 and any subsequent fiscal year with respect to a number of children determined under subsection (a)(1) only if the agency—

‘‘(I) received a basic support payment under subparagraph (A) for

fiscal year 2001; and

‘‘(II)(aa) is a local educational agency whose boundaries are the

same as a Federal military installation;

‘‘(bb) has an enrollment of federally connected children described

in subsection (a)(1) which constitutes a percentage of the total student enrollment of such agency which is not less than 35 percent,

has a per-pupil expenditure that is less than the average per-pupil

expenditure of the State in which the agency is located or the average per-pupil expenditure of all States (whichever average perpupil expenditure is greater), except that a local educational agency with a total student enrollment of less than 350 students shall

be deemed to have satisfied such per-pupil expenditure requirement, and has a tax rate for general fund purposes which is at
6

least 95 percent of the average tax rate for general fund purposes

of comparable local educational agencies in the State; or

‘‘(cc) has a total student enrollment of not less than 25,000 students, of which not less than 50 percent are federally connected

children described in subsection (a)(1) and not less than 6,000 of

such federally connected children are children described in subparagraphs (A) and (B) of subsection (a)(1).

‘‘(iii) RESUMPTION OF ELIGIBILITY.—A heavily impacted local educational agency described in clause (i) or (ii) that becomes ineligible

under either such clause for 1 or more fiscal years may resume eligibility for a basic support payment under this paragraph for a subsequent fiscal year only if the agency meets the requirements of item

(aa), (bb), or (cc) of clause (ii)(II) for that subsequent fiscal year.

‘‘(C) ELIGIBILITY FOR NEW HEAVILY IMPACTED LOCAL EDUCATIONAL AGENCIES.—

‘‘(i) IN GENERAL.—A heavily impacted local educational agency that

did not receive an additional assistance payment under subsection (f)

(as such subsection was in effect on the day before the date of the enactment of the Impact Aid Reauthorization Act of 2000) for fiscal year

2000 is eligible to receive a basic support payment under subparagraph

(A) for fiscal year 2002 and any subsequent fiscal year with respect to

a number of children determined under subsection (a)(1) only if the

agency—

‘‘(I) has an enrollment of federally connected children described

in subsection (a)(1) which constitutes a percentage of the total student enrollment of such agency which (aa) is not less than 50 percent if such agency receives a payment on behalf of children described in subparagraphs (F) and (G) of such subsection or (bb) is

not less than 40 percent if such agency does not receive a payment

on behalf of such children;

‘‘(II)(aa) is a local educational agency whose boundaries are the

same as a Federal military installation; or

‘‘(bb) is a local educational agency that has a tax rate for general

fund purposes which is at least 95 percent of the average tax rate

for general fund purposes of comparable local educational agencies

in the State; and

‘‘(III)(aa) for a local educational agency that has a total student

enrollment of 350 or more students, the agency has a per-pupil expenditure that is less than the average per-pupil expenditure of the

State in which the agency is located; or

‘‘(bb) for a local educational agency that has a total student enrollment of less than 350 students, the agency has a per-pupil expenditure that is less than the average per-pupil expenditure of a

comparable agency in the State in which the agency is located.

‘‘(ii) RESUMPTION OF ELIGIBILITY.—A heavily impacted local educational agency described in clause (i) that becomes ineligible under

such clause for 1 or more fiscal years may resume eligibility for a basic

support payment under this paragraph for a subsequent fiscal year

only if the agency meets the requirements of subclauses (I), (II), and

(III) of clause (i) for that subsequent fiscal year.

‘‘(iii) APPLICATION.—With respect to the first fiscal year for which a

heavily impacted local educational agency described in clause (i) applies

for a basic support payment under subparagraph (A), or with respect

to the first fiscal year for which a heavily impacted local educational

agency applies for a basic support payment under subparagraph (A)

after becoming ineligible under clause (i) for 1 or more preceding fiscal

years, the agency shall apply for such payment at least 1 year prior to

the start of that first fiscal year.

‘‘(D) MAXIMUM AMOUNT FOR REGULAR HEAVILY IMPACTED LOCAL EDUCATIONAL AGENCIES.—(i) Except as provided in subparagraph (E), the maximum amount that a heavily impacted local educational agency is eligible

to receive under this paragraph for any fiscal year is the sum of the total

weighted student units, as computed under subsection (a)(2) (subject to

clause (ii)), multiplied by the greater of—

‘‘(I) four-fifths of the average per-pupil expenditure of the State in

which the local educational agency is located for the third fiscal year

preceding the fiscal year for which the determination is made; or
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‘‘(II) four-fifths of the average per-pupil expenditure of all of the

States for the third fiscal year preceding the fiscal year for which the

determination is made.

‘‘(ii)(I) For a local educational agency with respect to which 35 percent or

more of the total student enrollment of the schools of the agency are children described in subparagraph (D) or (E) (or a combination thereof) of subsection (a)(1), the Secretary shall calculate the weighted student units of

such children for purposes of subsection (a)(2) by multiplying the number

of such children by a factor of 0.55.

‘‘(II) For a local educational agency that has an enrollment of 100 or

fewer federally connected children described in subsection (a)(1), the Secretary shall calculate the total number of weighted student units for purposes of subsection (a)(2) by multiplying the number of such children by a

factor of 1.75.

‘‘(III) For a local educational agency that has an enrollment of more than

100 but not more than 750 children described in subsection (a)(1), the Secretary shall calculate the total number of weighted student units for purposes of subsection (a)(2) by multiplying the number of such children by a

factor of 1.25.

‘‘(E) MAXIMUM AMOUNT FOR LARGE HEAVILY IMPACTED LOCAL EDUCATIONAL AGENCIES.—(i)(I) Subject to clause (ii), the maximum amount that

a heavily impacted local educational agency described in subclause (II) is

eligible to receive under this paragraph for any fiscal year shall be determined in accordance with the formula described in paragraph (1)(C).

‘‘(II) A heavily impacted local educational agency described in this subclause is a local educational agency that has a total student enrollment of

not less than 25,000 students, of which not less than 50 percent are federally connected children described in subsection (a)(1) and not less than

6,000 of such federally connected children are children described in subparagraphs (A) and (B) of subsection (a)(1).

‘‘(ii) For purposes of calculating the maximum amount described in clause

(i), the factor used in determining the weighted student units under subsection (a)(2) with respect to children described in subparagraphs (A) and

(B) of subsection (a)(1) shall be 1.35.

‘‘(F) DATA.—For purposes of providing assistance under this paragraph,

the Secretary shall use student, revenue, expenditure, and tax data from

the third fiscal year preceding the fiscal year for which the local educational

agency is applying for assistance under this paragraph.’’.

(b) PAYMENTS WITH RESPECT TO FISCAL YEARS IN WHICH INSUFFICIENT FUNDS

ARE APPROPRIATED.—Paragraph (3) of section 8003(b) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7703(b)), as redesignated, is amended—

(1) in subparagraph (A), by striking ‘‘paragraph (1)’’ and inserting ‘‘paragraphs (1) and (2)’’;

(2) in subparagraph (B)—

(A) in the heading, by inserting after ‘‘PAYMENTS’’ the following: ‘‘IN LIEU

OF PAYMENTS UNDER PARAGRAPH (1)’’;

(B) in the matter preceding subclause (I) of clause (i), by inserting after

‘‘‘threshold payment’)’’ the following: ‘‘in lieu of basic support payments

under paragraph (1)’’;

(C) in clause (ii), by striking ‘‘paragraph (1)’’ and inserting ‘‘clause (i)’’;

and

(D) by adding at the end the following:

‘‘(iv) In the case of a local educational agency that has a total student enrollment of fewer than 1,000 students and that has a per-pupil expenditure

that is less than the average per-pupil expenditure of the State in which

the agency is located, the total percentage used to calculate threshold payments under clause (i) shall not be less than 40 percent.’’;

(3) by redesignating subparagraph (C) as subparagraph (D);

(4) by inserting after subparagraph (B) the following:

‘‘(C) LEARNING OPPORTUNITY THRESHOLD PAYMENTS IN LIEU OF PAYMENTS

UNDER PARAGRAPH (2).—For fiscal years described in subparagraph (A), the

learning opportunity threshold payment in lieu of basic support payments

under paragraph (2) shall be equal to the amount obtained under subparagraph (D) or (E) of paragraph (2), as the case may be.’’; and

(5) in subparagraph (D) (as redesignated), by striking ‘‘computation made

under subparagraph (B)’’ and inserting ‘‘computations made under subparagraphs (B) and (C)’’.
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(c) CONFORMING AMENDMENTS.—(1) Section 8002(b)(1)(C) of the Elementary and

Secondary Education Act of 1965 (20 U.S.C. 7702(b)(1)(C)) is amended by striking

‘‘section 8003(b)(1)(C)’’ and inserting ‘‘paragraph (1)(C) of section 8003(b) or subparagraph (D) or (E) of paragraph (2) of such section, as the case may be’’.

(2) Section 8003 of the Elementary and Secondary Education Act of 1965 (20

U.S.C. 7703) is amended—

(A) in subsection (a)(1), by striking ‘‘subsection (b), (d), or (f)’’ and inserting

‘‘subsection (b) or (d)’’;

(B) in subsection (b)—

(i) in paragraph (1)(C), in the matter preceding clause (i), by striking

‘‘this subsection’’ and inserting ‘‘this paragraph’’; and

(ii) in paragraph (4) (as redesignated)—

(I) in subparagraph (A), by striking ‘‘paragraphs (1)(B), (1)(C), and (2)

of this subsection’’ and inserting ‘‘subparagraphs (B) and (C) of paragraph (1) or subparagraphs (B) through (D) of paragraph (2), as the

case may be, paragraph (3) of this subsection’’; and

(II) in subparagraph (B)—

(aa) by inserting after ‘‘paragraph (1)(C)’’ the following: ‘‘or subparagraph (D) or (E) of paragraph (2), as the case may be,’’; and

(bb) by striking ‘‘paragraph (2)(B)’’ and inserting ‘‘subparagraph

(B) or (C) of paragraph (3)’’;

(C) in subsection (c)(1), by striking ‘‘paragraph (2) and subsection (f)’’ and inserting ‘‘subsection (b)(2) and paragraph (2)’’;

(D) by striking subsection (f); and

(E) in subsection (i), by striking ‘‘sections 8002 and 8003(b)’’ and inserting

‘‘section 8002 and subsection (b) of this section’’.

SEC. 7. BASIC SUPPORT PAYMENTS FOR LOCAL EDUCATIONAL AGENCIES AFFECTED BY REMOVAL OF FEDERAL PROPERTY.

Section 8003(b) of the Elementary and Secondary Education Act of 1965 (20

U.S.C. 7703(b)), as amended by this Act, is further amended by adding at the end

the following:

‘‘(5) LOCAL EDUCATIONAL AGENCIES AFFECTED BY REMOVAL OF FEDERAL PROPERTY.—

‘‘(A) IN GENERAL.—In computing the amount of a basic support payment

under this subsection for a fiscal year for a local educational agency described in subparagraph (B), the Secretary shall meet the additional requirements described in subparagraph (C).

‘‘(B) LOCAL EDUCATIONAL AGENCY DESCRIBED.—A local educational agency

described in this subparagraph is a local educational agency with respect

to which Federal property (i) located within the boundaries of the agency,

and (ii) on which 1 or more children reside who are receiving a free public

education at a school of the agency, is transferred by the Federal Government to another entity in any fiscal year beginning on or after the date of

the enactment of the Impact Aid Reauthorization Act of 2000 so that the

property is subject to taxation by the State or a political subdivision of the

State.

‘‘(C) ADDITIONAL REQUIREMENTS.—The additional requirements described

in this subparagraph are the following:

‘‘(i) For each fiscal year beginning after the date on which the Federal property is transferred, a child described in subparagraph (B) who

continues to reside on such property and who continues to receive a

free public education at a school of the agency shall be deemed to be

a child who resides on Federal property for purposes of computing

under the applicable subparagraph of subsection (a)(1) the amount that

the agency is eligible to receive under this subsection.

‘‘(ii)(I) For the third fiscal year beginning after the date on which the

Federal property is transferred, and for each fiscal year thereafter, the

Secretary shall, after computing the amount that the agency is otherwise eligible to receive under this subsection for the fiscal year involved, deduct from such amount an amount equal to the revenue received by the agency for the immediately preceding fiscal year as a result of the taxable status of the former Federal property.

‘‘(II) For purposes of determining the amount of revenue to be deducted in accordance with subclause (I), the local educational agency—

‘‘(aa) shall provide for a review and certification of such amount

by an appropriate local tax authority; and
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‘‘(bb) shall submit to the Secretary a report containing the

amount certified under item (aa).’’.

SEC. 8. ADDITIONAL PAYMENTS FOR LOCAL EDUCATIONAL AGENCIES WITH HIGH CONCENTRATIONS OF CHILDREN WITH SEVERE DISABILITIES.

(a) REPEAL.—Subsection (g) of section 8003 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7703(g)) is repealed.

(b) CONFORMING AMENDMENTS.—(1) Section 8003 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7703) is amended by redesignating subsections (h) and (i) as subsections (f) and (g), respectively.

(2) Section 426 of the General Education Provisions Act (20 U.S.C. 1228) is

amended by striking ‘‘subsections (d) and (g) of section 8003 of such Act’’ and inserting ‘‘section 8003(d) of such Act’’.

SEC. 9. APPLICATION FOR PAYMENTS UNDER SECTIONS 8002 AND 8003.

Section 8005(d) of the Elementary and Secondary Education Act of 1965 (20

U.S.C. 7705(d)) is amended—

(1) in paragraph (2), by inserting after ‘‘not more than 60 days after a deadline established under subsection (c)’’ the following: ‘‘, or not more than 60 days

after the date on which the Secretary sends written notice to the local educational agency pursuant to paragraph (3)(A), as the case may be,’’; and

(2) in paragraph (3) to read as follows:

‘‘(3) LATE APPLICATIONS.— ‘‘(A) NOTICE.—The Secretary shall, as soon as practicable after the deadline established under subsection (c), provide to each local educational agency that applied for a payment under section 8002 or 8003 for the prior fiscal

year, and with respect to which the Secretary has not received an application for a payment under either such section (as the case may be) for the

fiscal year in question, written notice of the failure to comply with the

deadline and instruction to ensure that the application is filed not later

than 60 days after the date on which the Secretary sends the notice.

‘‘(B) ACCEPTANCE AND APPROVAL OF LATE APPLICATIONS.—The Secretary

shall not accept or approve any application of a local educational agency

that is filed more than 60 days after the date on which the Secretary sends

written notice to the local educational agency pursuant to subparagraph

(A).’’.

SEC. 10. PAYMENTS FOR SUDDEN AND SUBSTANTIAL INCREASES IN ATTENDANCE OF MILITARY DEPENDENTS.

Section 8006 of the Elementary and Secondary Education Act of 1965 (20 U.S.C.

7706) is repealed.

SEC. 11. CONSTRUCTION.

(a) IN GENERAL.—Section 8007 of the Elementary and Secondary Education Act

of 1965 (20 U.S.C. 7707) is amended to read as follows:

‘‘SEC. 8007. CONSTRUCTION.

‘‘(a) CONSTRUCTION PAYMENTS AUTHORIZED.—

‘‘(1) IN GENERAL.—From 70 percent of the amount appropriated for each fiscal

year under section 8014(e), the Secretary shall make payments in accordance

with this subsection to each local educational agency that receives a basic support payment under section 8003(b) for that fiscal year.

‘‘(2) ADDITIONAL REQUIREMENTS.—A local educational agency that receives a

basic support payment under section 8003(b)(1) shall also meet at least 1 of the

following requirements:

‘‘(A) The number of children determined under section 8003(a)(1)(C) for

the agency for the preceding school year constituted at least 50 percent of

the total student enrollment in the schools of the agency during the preceding school year.

‘‘(B) The number of children determined under subparagraphs (B) and

(D)(i) of section 8003(a)(1) for the agency for the preceding school year constituted at least 50 percent of the total student enrollment in the schools

of the agency during the preceding school year.

‘‘(3) AMOUNT OF PAYMENTS.—

‘‘(A) LOCAL EDUCATIONAL AGENCIES IMPACTED BY MILITARY DEPENDENT

CHILDREN.—The amount of a payment to each local educational agency described in this subsection that is impacted by military dependent children

for a fiscal year shall be equal to—

‘‘(i)(II) 35 percent of the amount appropriated under section 8014(e)

for such fiscal year; divided by
10

‘‘(II) the total number of weighted student units of children described

in subparagraphs (B) and (D)(i) of section 8003(a)(1) for all local educational agencies described in this subsection (as calculated under section 8003(a)(2)), including the number of weighted student units of

such children attending a school facility described in section 8008(a) if

the Secretary does not provide assistance for the school facility under

that section for the prior fiscal year; multiplied by

‘‘(ii) the total number of such weighted student units for the agency.

‘‘(B) LOCAL EDUCATIONAL AGENCIES IMPACTED BY CHILDREN WHO RESIDE

ON INDIAN LANDS.—The amount of a payment to each local educational

agency described in this subsection that is impacted by children who reside

on Indian lands for a fiscal year shall be equal to—

‘‘(i)(I) 35 percent of the amount appropriated under section 8014(e)

for such fiscal year; divided by

‘‘(II) the total number of weighted student units of children described

in section 8003(a)(1)(C) for all local educational agencies described in

this subsection (as calculated under section 8003(a)(2)); multiplied by

‘‘(ii) the total number of such weighted student units for the agency.

‘‘(4) USE OF FUNDS.—Any local educational agency that receives funds under

this subsection shall use such funds for construction, as defined in section

8013(3).

‘‘(b) SCHOOL FACILITY MODERNIZATION GRANTS AUTHORIZED.—

‘‘(1) IN GENERAL.—From 30 percent of the amount appropriated for each fiscal

year under section 8014(e), the Secretary shall award grants in accordance with

this subsection to eligible local educational agencies to enable the local educational agencies to carry out modernization of school facilities.

‘‘(2) ELIGIBILITY REQUIREMENTS.—A local educational agency is eligible to receive funds under this subsection only if—

‘‘(A) such agency (or in the case of a local educational agency that does

not have the authority to tax or issue bonds, such agency’s fiscal agent) has

no capacity to issue bonds or is at such agency’s limit in bonded indebtedness for the purposes of generating funds for capital expenditures; and

‘‘(B)(i) such agency received assistance under section 8002(a) for the fiscal

year and has an assessed value of taxable property per student in the

school district that is less than the average of the assessed value of taxable

property per student in the State in which the local educational agency is

located; or

‘‘(ii) such agency received assistance under subsection (a) for the fiscal

year and has a school facility emergency, as determined by the Secretary,

that poses a health or safety hazard to the students and school personnel

assigned to the school facility.

‘‘(3) AWARD CRITERIA.—In awarding grants under this subsection the Secretary shall consider 1 or more of the following factors:

‘‘(A) The extent to which the local educational agency lacks the fiscal capacity to undertake the modernization project without Federal assistance.

‘‘(B) The extent to which property in the local educational agency is nontaxable due to the presence of the Federal Government.

‘‘(C) The extent to which the local educational agency serves high numbers or percentages of children described in subparagraphs (A), (B), (C), and

(D) of section 8003(a)(1).

‘‘(D) The need for modernization to meet—

‘‘(i) the threat that the condition of the school facility poses to the

safety and well-being of students;

‘‘(ii) overcrowding conditions as evidenced by the use of trailers and

portable buildings and the potential for future overcrowding because of

increased enrollment; and

‘‘(iii) facility needs resulting from actions of the Federal Government.

‘‘(E) The age of the school facility to be modernized.

‘‘(4) OTHER AWARD PROVISIONS.—

‘‘(A) FEDERAL SHARE.—The Federal funds provided under this subsection

to a local educational agency described in subparagraph (C) shall not exceed

50 percent of the total cost of the project to be assisted under this subsection. A local educational agency may use in-kind contributions to meet

the matching requirement of the preceding sentence.

‘‘(B) MAXIMUM GRANT.—A local educational agency described in subparagraph (C) may not receive a grant under this subsection in an amount that

exceeds $3,000,000 during any 5-year period.
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‘‘(C) LOCAL EDUCATIONAL AGENCY DESCRIBED.—A local educational agency

described in this subparagraph is a local educational agency that has the

authority to issue bonds but is at such agency’s limit in bonded indebtedness for the purposes of generating funds for capital expenditures.

‘‘(5) APPLICATIONS.—A local educational agency that desires to receive a grant

under this subsection shall submit an application to the Secretary at such time,

in such manner, and accompanied by such information as the Secretary may require. Each application shall contain—

‘‘(A) documentation certifying such agency’s lack of bonding capacity;

‘‘(B) a listing of the school facilities to be modernized, including the number and percentage of children determined under section 8003(a)(1) in average daily attendance in each school facility;

‘‘(C) a description of the ownership of the property on which the current

school facility is located or on which the planned school facility will be located;

‘‘(D) a description of any school facility deficiency that poses a health or

safety hazard to the occupants of the school facility and a description of

how that deficiency will be repaired;

‘‘(E) a description of the modernization to be supported with funds provided under this subsection;

‘‘(F) a cost estimate of the proposed modernization; and

‘‘(G) such other information and assurances as the Secretary may reasonably require.

‘‘(6) EMERGENCY GRANTS.— ‘‘(A) APPLICATIONS.—Each local educational agency described in paragraph (2)(B)(ii) that desires a grant under this subsection shall include in

the application submitted under paragraph (5) a signed statement from an

appropriate local official certifying that a health or safety deficiency exists.

‘‘(B) PRIORITY.—If the Secretary receives more than 1 application from

local educational agencies described in paragraph (2)(B)(ii) for grants under

this subsection for any fiscal year, the Secretary shall give priority to local

educational agencies based on the severity of the emergency, as determined

by the Secretary, and when the application was received.

‘‘(C) CONSIDERATION FOR FOLLOWING YEAR.—A local educational agency

described in paragraph (2)(B)(ii) that applies for a grant under this subsection for any fiscal year and does not receive the grant shall have the application for the grant considered for the following fiscal year, subject to the

priority described in subparagraph (B).’’.

(b) DEFINITION.—Section 8013 of the Elementary and Secondary Education Act of

1965 (20 U.S.C. 7713) is amended by adding at the end the following:

‘‘(13) MODERNIZATION.—The term ‘modernization’ means repair, renovation,

alteration, or construction, including—

‘‘(A) the concurrent installation of equipment; and

‘‘(B) the complete or partial replacement of an existing school facility, but

only if such replacement is less expensive and more cost-effective than repair, renovation, or alteration of the school facility.’’.

SEC. 12. FEDERAL ADMINISTRATION.

Section 8010(c) of the Elementary and Secondary Education Act of 1965 (20

U.S.C. 7710(c)) is amended—

(1) by striking paragraph (1);

(2) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and

(3) in paragraph (2)(D) (as redesignated), by striking ‘‘section 5(d)(2) of the

Act of September 30, 1950 (Public Law 874, 81st Congress) (as such section was

in effect on the day preceding the date of enactment of the Improving America’s

Schools Act of 1994) or’’.

SEC. 13. ADMINISTRATIVE HEARINGS AND JUDICIAL REVIEW.

(a) ADMINISTRATIVE HEARINGS.— (1) IN GENERAL.—Section 8011(a) of the Elementary and Secondary Education

Act of 1965 (20 U.S.C. 7711) is amended by adding at the end before the period

the following: ‘‘if the local educational agency or State, as the case may be, submits to the Secretary a request for the hearing not later than 60 days after the

date of the action of the Secretary under this title’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply

with respect to an action of the Secretary under title VIII of the Elementary

and Secondary Education Act of 1965 (20 U.S.C. 7701 et seq.) initiated on or

after the date of the enactment of this Act.
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(b) JUDICIAL REVIEW OF SECRETARIAL ACTION.—Section 8011(b)(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7711(b)(1)) is amended by

striking ‘‘60 days’’ and inserting ‘‘30 working days (as determined by the local educational agency or State)’’.

SEC. 14. DEFINITIONS.

Section 8013(5)(A)(iii) of the Elementary and Secondary Education Act of 1965 (20

U.S.C. 7713(5)(A)(iii)) is amended—

(1) in subclause (I), by striking ‘‘or’’ at the end; and

(2) by adding at the end the following:

‘‘(III) affordable housing assisted under the Native American Housing

Assistance and Self-Determination Act of 1996; or’’.

SEC. 15. AUTHORIZATION OF APPROPRIATIONS.

(a) PAYMENTS FOR FEDERAL ACQUISITION OF REAL PROPERTY.—Section 8014(a) of

the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7714(a)) is amended by striking ‘‘$16,750,000 for fiscal year 1995’’ and inserting ‘‘$32,000,000 for fiscal

year 2000’’.

(b) BASIC PAYMENTS.—Section 8014(b) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7714(b)) is amended—

(1) by striking ‘‘subsections (b) and (f) of section 8003’’ and inserting ‘‘section

8003(b)’’;

(2) by striking ‘‘$775,000,000 for fiscal year 1995’’ and inserting ‘‘$809,400,000

for fiscal year 2000’’; and

(3) by striking ‘‘, of which 6 percent’’ and all that follows and inserting a period.

(c) PAYMENTS FOR CHILDREN WITH DISABILITIES.—Section 8014(c) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7714(c)) is amended by striking ‘‘$45,000,000 for fiscal year 1995’’ and inserting ‘‘$50,000,000 for fiscal year

2000’’.

(d) PAYMENTS FOR INCREASES IN MILITARY CHILDREN.—Subsection (d) of section

8014 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7714) is

repealed.

(e) CONSTRUCTION.—Section 8014(e) of the Elementary and Secondary Education

Act of 1965 (20 U.S.C. 7714(e)) is amended by striking ‘‘$25,000,000 for fiscal year

1995’’ and inserting ‘‘$10,052,000 for fiscal year 2000’’.

(f) FACILITIES MAINTENANCE.—Section 8014(f) of the Elementary and Secondary

Education Act of 1965 (20 U.S.C. 7714(f)) is amended by striking ‘‘$2,000,000 for fiscal year 1995’’ and inserting ‘‘$5,000,000 for fiscal year 2000’’.

(g) ADDITIONAL ASSISTANCE FOR CERTAIN LOCAL EDUCATIONAL AGENCIES IMPACTED BY FEDERAL PROPERTY ACQUISITION.—Section 8014(g) of the Elementary

and Secondary Education Act of 1965 (20 U.S.C. 7714(g)) is amended—

(1) in the heading, by striking ‘‘FEDERAL PROPERTY LOCAL EDUCATIONAL

AGENCIES’’ and inserting ‘‘LOCAL EDUCATIONAL AGENCIES IMPACTED BY FEDERAL

PROPERTY ACQUISITION’’; and

(2) by striking ‘‘such sums as are necessary beginning in fiscal year 1998 and

for each succeeding fiscal year’’ and inserting ‘‘$1,500,000 for fiscal year 2000

and such sums as may be necessary for each of the four succeeding fiscal years’’.

SEC. 16. EFFECTIVE DATE.

This Act, and the amendments made by this Act, shall take effect on October 1,

2000, or the date of the enactment of this Act, whichever occurs later.

COMMITTEE ACTION

The Subcommittee on Early Childhood, Youth and Families held

one hearing in Washington, DC on Impact Aid on March 17, 1999.

The Subcommittee received testimony from two panels of witnesses. Panel 1: The Honorable Randy ‘‘Duke’’ Cunningham, Representative of the 51st District, California, U.S. House of Representatives; The Honorable Earl Pomeroy, At-Large Representative, South Dakota, U.S. House of Representatives; The Honorable

Lee Terry, Representative of the 2nd District, Nebraska, U.S.

House of Representatives; and The Honorable Chet Edwards, Representative of the 11th District, Texas, U.S. House of Representatives. Panel 2: Dr. Wayne Lett, Superintendent, Newport News
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Public School System, Newport News, Virginia; Dr. Richard Carson, Superintendent, North Hanover Township Board of Education,

McGuire AFB, New Jersey; Mr. Chuck Squier, Superintendent,

Santee School District, Niobrara, Nebraska; and Mr. Dennis

Jarrett, Director of Finance, York County School Board, Yorktown,

Virginia.

Introduction of the Impact Aid Reauthorization Act of 2000

On February 10, 2000, Mr. Robin Hayes (R–NC) introduced H.R.

3616, the Impact Aid Reauthorization Act of 2000.

Legislative action

On February 16, 2000, the Committee on Education and the

Workforce assembled to consider H.R. 3616, the Impact Aid Reauthorization Act of 2000. An amendment in the nature of a substitute, offered by Chairman Goodling, was adopted by voice vote,

and the bill was favorably reported by the Committee on Education

and the Workforce by a voice vote.

PURPOSE

The purpose of this legislation is to reauthorize and improve the

Impact Aid program so it can continue to provide important financial assistance to local educational agencies affected by the removal

of property from local tax rolls.

SUMMARY

H.R. 3616 provides several essential changes to the Impact Aid

program to ensure assistance to local educational agencies is provided in a fair and equitable manner. It adjusts the funding formula for payments for federal property removed from the tax rolls,

incorporates payments for heavily impacted local educational agencies into the basic payment structure, addresses issues related to

the privatization of military housing, modifies the construction program, and provides for local educational agencies to be notified if

they miss the deadline for filing applications for payments. The bill

also provides for the needs of small, poor districts by establishing

a funding floor for qualifying local educational agencies.

COMMITTEE VIEWS

BACKGROUND AND NEED FOR LEGISLATION

Over the years, the Impact Aid program has been the subject of

much debate and numerous legislative proposals and amendments.

This section provides a brief history of the Impact Aid program.

As originally enacted in 1950, the Impact Aid program was authorized for three years to provide federal financial assistance

under four circumstances: (1) local educational agencies in which

the federal government had acquired (after 1938) substantial real

property that, as a result of the federal acquisition, became tax-exempt, thus reducing the local tax base; (2) local educational agencies providing a free public education for substantial numbers of

federally connected students; (3) local educational agencies adversely affected by sudden and substantial increases in enrollments
14

by federally connected students; and (4) payments to other federal

agencies for the operation of schools for federally connected students where local educational agencies could not provide a free

public education for them—usually schools on military bases.

While the basic structure and purpose of the Impact Aid program

has remained intact since its enactment in 1950, the program has

been frequently amended. The effect of these amendments, with

certain exceptions, has been to increase the number of local educational agencies receiving Impact Aid payments and the amounts

of those payments. Over the 20 years (1953 through 1973) that followed the initial 3-year authorization of Impact Aid, Congress revised the original legislation to permit children of parents in the

uniformed services and Indian children to be considered as ‘‘federally connected.’’ The definition of what constitutes ‘‘federal property’’ was also expanded to include low-rent public housing property. These amendments increased the number of students that

could be counted for the purpose of calculating Impact Aid payments.

As a result of declining appropriations during the 1980’s the appropriations committees tried to target dollars to those local educational agencies that were highly dependent on Impact Aid dollars

to run their schools. Although these amendments did provide some

relief to highly impacted local educational agencies, it did so by

adding a variety of new subcategories (Super A, Subsuper A, Regular A, Super B, and Regular B) to the program, only to make Impact Aid more complex. Funds were to be allocated to local educational agencies based on their percentage of federally connected

students enrolled—with different amounts being allocated based on

whether or not students were considered category ‘‘a’’ children or

category ‘‘b’’ children. Because of the drop off in funding, the Impact Aid program became more susceptible to the parochial interests of the program, which, in turn, made the program more complex. The need for program reform was becoming more noticed by

the authorizing committees.

Amendments to Impact Aid made during the reauthorization of

the Elementary and Secondary Education Act in 1988 addressed

some of these concerns; however, serious problems continued until

the reforms brought about as a part of the Improving America’s

Schools Act of 1994 were made. The most significant changes enacted at this time affected how local educational agencies were

compensated for so-called ‘‘federally connected’’ children. A major

change was the recognition that the program was not going to be

fully funded, and that a more rationale formula must be adopted

to better allocate the dollars available to those school districts that

had a greater dependence on Impact Aid dollars to run their

schools. Prior law based payments on the ratio of ‘‘federally connected children’’ to total enrollment in school districts. During the

1994 amendments this provision was modified to include the ratio

of Impact Aid payments to a local educational agency’s total current expenditures. As a result, districts with a higher percentage

of federally connected children and with higher percentages of Impact Aid funds would receive a larger percentage of their full payment.
15

Although Impact Aid represents a federal commitment to local

educational agencies impacted by the presence of the federal government, the lack of full funding had created a variety of different

funding steps that tried to factor in ‘‘need.’’ It did so with little attention actually given to a local educational agency’s dependence on

Impact Aid funding to carry on the day-to-day operations of running a school. The 1994 changes to the Impact Aid law created a

new system that recognized that some local educational agencies

depended more on Impact Aid than others. For the first time a true

‘‘need’’ component was placed in the law.

Another key revision was the general elimination of payments for

the children of civilian employees who either lived or worked on

federal property. Support for these children was limited to local

educational agencies that enrolled at least 2,000 of such children

and such children represented at least 15 percent of the local educational agency’s total enrollment. That change represented a bipartisan plan intended to better target Impact Aid dollars to those

local educational agencies with the greatest need.

The Improving America’s Schools Act also modified provisions

dealing with payments for federal property. Prior to the 1994

amendments, payments were made based on the current assessed

value of property of the same use and condition as the federal property was at the time of purchase. This provision was modified to

base payments on the actual assessed value of the taxable property

adjacent to the federal property as determined by the local tax assessor.

Since the 1994 amendments, the program has been working as

intended and has received significant increases in appropriations.

However, the Committee has been made aware of several areas

where further modifications are necessary and addresses these concerns. ––

VIEWS

The changes to the Impact Aid statute being proposed by the

House Education and Workforce Committee make refinements to

the 1994 reauthorization bill.

Payments relating to Federal acquisition of real property–

In 1994, the formula by which a local educational agency’s maximum payment was to be determined was changed to reflect the actual assessed value of the taxable property immediately adjacent to

the federal property. The law continued the provision basing eligibility on property purchased by the federal government on or after

January 1, 1939 that at the time of purchase had a total value

equal to at least 10% of the total assessed value of all the taxable

property within the boundaries of the taxing authority of the local

educational agency. However, the method for determining the

amount of the payment received by the local educational agency

was modified.

Under the pre-1994 changes, a local educational agency’s maximum payment was calculated by determining the assessed value

of property within the taxing boundaries of the agency that is similar to the type of property originally purchased by the federal government. For example, if the property was considered as agricul-
16

tural property by the taxing authority at the time of purchase, the

assessment of the federal property must be the same as the current

assessment of similar agricultural property within the taxing

boundaries of the local educational agency. Under this system of

determining assessments, the total amount of the national assessment for all the eligible property in 1994 was approximately $28

million. The amount appropriated in fiscal year 1994 paid approximately 250 eligible local educational agencies 61% of their maximum payment.

The 1994 changes created a new system for determining a local

educational agency’s maximum payment. Rather than using land

comparable to the type of land the property was at the time of purchase by the federal government, the Department of Education

would now appraise the value of the taxable property adjacent to

the federal land, called the ‘‘highest and best’’ method. This new

method appraised the federal land based on the value of the taxable land adjacent to the federal land. For example, if an industrial

park or a shopping mall now resided next to the federal property,

the Department of Education would determine (based on data provided by the local tax assessor) the maximum payment of the federal land as based on the assessed value of the industrial park or

shopping mall. At that time, the Committee felt this approach better measured the loss of property tax to the local educational agency as determined by what had happened to the property adjacent

to the federal property since the original date of purchase. When

the new method was authorized in 1994, however, it increased the

total amount of funds needed to fully fund the estimated 250 eligible local educational agencies to an amount of approximately $300

million. However, the amount appropriated for this line item did

not increase at the same rate. In fiscal year 2000, the Section 8002

program received $32 million, just a little over 10% of the amount

needed.

The Committee recognized that problems were occurring in that

a majority of the eligible rural local educational agencies would not

see the assessed value of their federal property increase to the

same degree as many urban local educational agencies. As a result,

urban local educational agencies would absorb most of the money

while the rural local educational agencies would see significantly

lower payments. To address this problem the original 1994 legislation provided for a three-year hold harmless that was then extended throughout the period of the authorization in technical

amendments passed in 1997. The hold harmless provided that

those school districts eligible for federal property payments would

be provided a payment based on the amount of their fiscal year

1994 payment, which, due to insufficient appropriations, represented 61 percent of their fiscal year maximum payment. The

hold harmless established a three-year phase down covering fiscal

years 1995–1997. The fiscal year 1995 payment was based on 85

percent of the fiscal year 1994 payment, with each of the following

two fiscal years continuing to apply the 85 percent factor to the

amount received in the previous fiscal year. The fiscal year 1998

payment and subsequent years was then set at the amount received by each school district in fiscal year 1997.
17

In order to maintain a funding balance between the rural and

urban school districts, the Committee bill establishes a funding

floor for all local educational agencies at 37 percent of a local educational agency’s fiscal year 1994 maximum payment. Thirty-seven

percent was established as the funding floor because it represents

each local educational agency’s actual payment as a percentage of

their 1994 maximum payment when computing the three-year

phase-down contained in the hold harmless. The Committee felt

that this funding level, which is comparable to the amount received

in fiscal year 1997, would be fair and equitable to all school districts funded under this section. All federal property school districts—both rural and urban—would receive, at a minimum, an

amount equal to their percentage of what they would have received

in fiscal year 1994 as reduced by the three-year hold harmless. The

bill directs the Secretary of Education to make payments as provided under the funding floor (foundation payment) established by

the bill before any other payments are made.

Following payment of the funding floor, the Committee bill would

allocate the remaining dollars, not to exceed the amount appropriated in fiscal year 1996, as per the formula adopted in the 1994

amendments. This insures that those school districts benefiting by

the 1994 changes in determining the value of the federal property

will receive additional dollars to reflect the increased value of their

federal property.

After the initial allocation of payments, the Committee bill would

direct the Secretary to allocate: (1) 25 percent of the funds appropriated above the amount appropriated in fiscal year 1997 to all

districts receiving a foundation payment. The allocation would be

pro-rated based on the same percentage of funds that each district

received under the foundation payment. This will ensure that the

rural districts continue to see an increase in their federal property

payments as the appropriations for the program grow and (2) 75

percent of the funds appropriated above the fiscal year 1997 level

under the highest and best formula contained in current law. This

ensures that those school districts with increased property assessments (primarily urban districts) receive a greater portion of the

new money to reflect the higher property values in their area.

This provision is designed to insure that predominantly rural

local educational agencies will continue to receive foundation payments based on what they received in fiscal year 1994 as well as

a small portion of their ‘‘highest and best’’ payment. At the same

time the urban local educational agencies favored under the revised

‘‘highest and best’’ formula will receive their foundation payment in

addition to a payment under the ‘‘highest and best’’ formula that

reflects the increased assessments of their federal property under

the 1994 change to the law.

In order to receive funding under this revised provision of law,

all eligible local educational agencies must be eligible for funding

in the year they are applying.

Preliminary payments for federal property

H.R. 3616 adds a new subsection (l) that provides a preliminary

payment to Section 8002 eligible local educational agencies. It requires that such local educational agencies receive a preliminary
18

payment equal to 60% of the amount received from the previous

fiscal year no later than 60 days following the passage of the applicable appropriations bill. Final payment is to be made no later

than 12 months following the close of the application deadline (normally January 31). The new provision also requires that any data

to be submitted to the Department of Education from a local educational agency must be filed no later than 30 days following the

close of the application deadline, i.e. tax rates, assessment data,

etc. The Committee expects that the Department will not hold up

final payments because data has not been received from eligible

school districts. In addition, H.R. 3616 provides that any applicant

not complying with the new data submission requirement shall be

denied their final payment from funds appropriated under the applicable appropriations bill. Denial of a payment in one year, however, would not affect the local educational agency’s future eligibility for Section 8002 funding.

Renovation and rebuilding

Current law provides that children who move off base during the

renovation of on-base housing continue to be considered as on-base

children for purposes of calculating Impact Aid payments. H.R.

3616 extends this provision to cover children who move off base

during periods when the housing in which they reside is demolished and new housing is built on the military base. However, this

new provision only allows these children to be considered as onbase children for a period of two years. In addition, only the number of children expected to reoccupy base housing are permitted to

be counted as on-base children for purposes of calculating Impact

Aid payments. The Committee further understands that when students are relocated for the purposes of renovation or demolition, it

is often not evident how many students will be returned to base

housing. Therefore, if the estimated number of students cannot be

determined by the Department of Defense at the certification date,

the Committee’s intent is for the number of students last reported

in the units in question to be used for reporting purposes by a local

educational agency until accurate information is available.

The Committee believes that local educational agencies should

not be faced with fluctuating federal support for the children of

military personnel due to efforts by the Department of Defense to

improve military housing. The Committee believes this provision

will benefit both schools and the children of military personnel. The

bill also contains language that would forgive all school districts

whose interpretation of renovation prior to the enactment of this

legislation may result in an overpayment as determined by the Department of Education. The Committee does not wish to have any

school district face the potential of having future Impact Aid payments withheld due to the local educational agency’s interpretation

of base renovation prior to fiscal year 2000.

Military ‘‘build to lease’’ program

H.R. 3616 addresses an unusual situation affecting the Travis

Independent School District in California. A Department of Defense

program referred to as a ‘‘build to lease’’ program impacts this district. Unlike other military bases that participated in such a pro-
19

gram, the Travis Air Force Base developed a program that took private property upon which military housing was constructed, and

then expanded the parameters of the base to take in the housing

complex. For example, the only access to the complex is through

the main gate to the base and all fire and safety services are provided by the military police, etc. It did not, however, put the land

into federal ownership. Under this provision, the children residing

in such housing would be considered as on-base students and

counted as such when calculating the Impact Aid payment for the

local educational agency. However, any tax revenue received by the

local educational agency would then be subtracted from the Impact

Aid payment provided to the Travis Independent School District.

This language codifies the language currently in both the fiscal

year 1999 and fiscal year 2000 appropriations bills.

Payments for small school districts

The Committee is aware of the difficulty faced by many small

local educational agencies that have seen their Impact Aid payments reduced because of a dramatic decrease in the number of eligible children. In order to provide assistance to these small, often

poor local educational agencies, the Committee bill would provide

them with a funding floor of forty percent of the Impact Aid payment they would have received if the program were fully funded.

Basic support payments for heavily impacted local educational

agencies

The Committee believes it is vital that heavily impacted school

districts receive compensation in a timely manner. That is the purpose of the second major change from the existing statute. Although there is no change to the intent of this provision (formerly

Section 8003(f) in existing law), H.R. 3616 would move the supplemental program for heavily impacted districts in current law into

the basic support program. This concept has been tested in both

the fiscal year 1999 and fiscal year 2000 appropriations bills and

has been extremely successful.

The purpose of this change is to expedite the supplemental payments received by heavily impacted school districts. H.R. 3616

would change both the method by which the supplemental payments are calculated and paid out. Under the existing statute, local

educational agencies that are eligible (in FY 2000 there were 28

local educational agencies eligible) are provided a supplemental

payment. This payment is based on a formula that requires the Department of Education to collect a variety of data from the state

educational agency including tax data, per pupil spending, available revenue, and comparable data from other local educational

agencies in the state. As a result, supplemental payments are made

as long as 18 to 24 months following the fiscal year in which an

appropriation was initially made.

Although the initial requirements for eligibility remain the same

as in current law, the Committee bill would require that newly eligible local educational agencies receive funding under this subsection in the year following the year in which they are deemed eligible. Conversely, if a local educational agency should be denied eli-
20

gibility, their payment would cease the year following their loss of

eligibility.

The Committee bill changes the process by which the payment

for a heavily impacted school district will be calculated. The method in current law provides an additional payment to eligible local

educational agencies that would increase the local educational

agency’s per pupil spending to the state average per pupil expenditure or to the average per pupil spending of other non-impacted

local educational agencies within the state that are similar in size

and grade span. The committee bill provides that only federally impacted children are used in the computation of their payment.–

The Committee bill contains a new payment formula by simply

adjusting upward the weights of federal students as used in the

basic weight computation contained in current law. This will provide for an easier method for the Department of Education to calculate payments and will expedite the payment process.

The only exception to this calculation process is for eligible local

educational agencies with less than 350 students in total enrollment. Because smaller local educational agencies have a higher per

pupil expenditure, the weight adjustment approach will not adequately measure the additional dollars needed to operate the

school. Thus, the Committee bill provides that these local educational agencies can calculate their payment based on the per

pupil spending of non-federally connected local educational agencies in their state that are less than 350 students and are similar

in grade span.

The net effect of this change is that, while some local educational

agencies (currently in the program) would see (or actually have

seen through the pilot project) their supplemental payments drop

somewhat from what they received in the past, payments will be

expedited. For example, under the pilot project of this proposal

tested in both the fiscal year 1999 and 2000 appropriations bills,

70% of the fiscal year 1999 payments were paid out within four

and one-half months following passage of the fiscal year 1999 appropriations bill and the Department of Education expects to pay

out 85% of the total fiscal year 2000 appropriations before March

1, 2000. Local educational agencies affected by this provision were

willing to see a reduction in their Impact Aid payment in order to

receive funding in a more timely fashion. Since the new method for

calculating payments went into effect two years ago, the Committee

has not heard complaints from any of the local educational agencies

affected by this provision.

Basic support payments for local educational agencies affected by

removal of federal property

This is a new provision that primarily addresses actions taking

place relative to the development of housing for military personnel.

However, it is possible that similar situations could take place with

respect to children residing on Indian lands. For several years, the

Committee has received testimony from local educational agencies

concerned about the potential impact of efforts by the Department

of Defense to build additional housing for military personnel. They

are primarily concerned that housing built as part of a public/pri-
21

vate partnership will reduce Impact Aid payments to local school

districts for the children of military personnel.

The Committee bill addresses instances in which property under

federal ownership that is located within the boundaries of the local

educational agency is transferred, by an action of the federal government, to another entity and becomes subject to taxation. H.R.

3616 amends current law to permit the local educational agency to

continue to count the children residing on such property as on-federal property dependent children. However, the Department of

Education, when calculating the local educational agency’s payment, would reduce such payment by whatever amount of revenue

the local educational agency received from taxes assessed and collected on such property. Because it will require at least two years

for the property to provide taxable revenue to the taxing authority,

the Committee bill provides for a two-year transition period during

which such children would maintain their on-federal property status for payment purposes. Payments would not be reduced until

the third year.

The Committee takes this action due to its concern that the development of base housing by the Department of Defense through

the use of private developers provides the potential for current onbase housing to be deeded over to a private developer. In such instances, property would become taxable. Thus far, the federal land

upon which new on-base housing is being constructed through private developers has remained under federal ownership. This provision will address a concern on the part of local educational agencies

located near military bases. It would ensure that local educational

agencies would not suffer financially as a result of such transfers

should they occur at some future date.

The Committee notes that any tax revenue collected off of such

property would not be comparable to revenue collected from offbase housing, as the residence pool for on-base private housing

would be limited for the most part to military personnel. The assessed value of on-base ‘‘private property’’ for example, would not

increase over time, but would at best remain level.

It is the belief of the Committee that this provision provides a

fair resolution to what could become a difficult problem in future

years for school districts providing an education to the children of

military personnel.

Late applications for impact aid assistance

H.R. 3616 includes a provision intended to address the numerous

amendments contained in yearly appropriations bills to provide

that late applications for Impact Aid payments are to be considered

as being timely filed. Current law establishes very clear timelines

for the submission of applications for Impact Aid. In recent years,

local educational agencies have missed this deadline for a variety

of reasons. Section 8005 of Impact Aid is amended to direct the Department of Education to notify, in writing, every Impact Aid applicant that does not submit an application by the date due (normally

January 31) that their application has not been received. This provision would apply only to those local educational agencies that applied in the previous year. Applicants receiving such notification

would then have sixty days to submit their application. After sixty
22

days, local educational agencies would no longer be eligible for Impact Aid payments for that fiscal year. The 10 percent late filing

penalty would still apply to those applications received after the

original filing deadline. The Committee believes that local educational agencies will no longer have an excuse for submitting applications after established deadlines once this provision is enacted

into law.

School Construction

The Committee is concerned that a federal presence may not only

impact tax revenues and expenses of local school districts, but in

some cases can reduce or eliminate the ability of local educational

agencies to issue bonds, which are often used for the construction

or renovation of school facilities. The Committee bill maintains the

current section 8007, now identified as subsection (a) ‘‘Construction

Payments’’, and provides that 70% of the funds appropriated for

Impact Aid construction be reserved for this purpose. The only substantive change from current law to this subsection is that local

educational agencies that provide an educational program in facilities owned by the Department of Education (Section 8008) would

be allowed to count children enrolled in those facilities for purposes

of computing their payment under Section 8007(a). However, they

will only be able to count such students in a year following a year

in which they did not receive funding from the Department of Education under Section 8008. This will help ensure that such schools

receive an equitable share of funding, without double dipping and

depleting resources available for similar schools.

In addition, the Committee bill creates a new subsection (b)

‘‘School Facility Modernization Grants’’ that will provide modernization (construction, renovation and repair) funds to local educational agencies that lack bonding capacity or that enroll children

in a facility with hazardous conditions that threaten the health and

safety of students or school personnel.

Of the funds appropriated for construction, 30% would be reserved for these schools. Entities that would be eligible for this

money would only include local educational agencies that lack

bonding authority for construction due to a federal presence, or

have limited bonding authority and have exhausted it. However,

local educational agencies with some bonding authority will be required to match federal funds received on a one-to-one basis, and

would not qualify for a grant in excess of three million dollars. Further, in addition to lacking bonding authority, an interested local

educational agency will have to show that it is either eligible for

impact aid payments under section 8002 (federal property districts)

and has an assessed value of taxable property per student that is

less than the average of the assessed value of taxable property per

student in the state in which the local educational agency is located, or that it is eligible to receive funds under subsection (a),

and has facilities with conditions which present a health or safety

hazard to students. This will ensure that money awarded under

this subsection serves those with the greatest need.

In creating this new authorized use of construction funds, it is

the intent of the Committee that payments made under the existing construction authority are made on a timely basis. The Com-
23

mittee recognizes that the current construction payments are calculated on a formula basis, while the new authority will require

the Secretary to make payments based on an application process.

The Committee put these two authorities under separate subsections in order to ensure that the new application process under

subsection (b) does not slow down the payment of formula grants

under subsection (a).

Administrative hearings and judicial review

The Committee bill makes only minor changes to current law. It

clarifies the time line by which a local educational agency may request a hearing resulting in an action by the Secretary. The bill

also changes from 60 days to 30 days the time allowed a local educational agency to appeal a decision of the Secretary to the court

of appeals.

In both instances, H.R. 3616 would expedite the time involved in

a local educational agency’s appeal to the Secretary and the subsequent action on the part of the Secretary to render a decision. Continued delays in such proceedings sometimes hold up for as much

as five years the Department of Education’s ability to process final

payments. The Committee includes this provision at the request of

local educational agencies that wish to expedite the Department’s

payment system while still allowing due process to grieved local

educational agencies.

Changes to definitions

Minor changes have been made to the definition section of the

statute to update changes made in Indian housing legislation since

the last reauthorization. There is no policy change involved. The

changes are only intended to conform existing Indian housing legislation (the Native American Housing Assistance and Self-Determination Act of 1996) to the Impact Aid law.

While this is the only change to the definition section of current

law, the Committee would like to clarify its intention with respect

to the calculation of the amount of revenue available for general

fund purposes that the Department uses to determine the eligibility of a local educational agency for any program authorized

under the Impact Aid Program. The Committee believes that only

those funds not encumbered by contract for expenditure in any fiscal year should be considered as available to the local educational

agency for general fund expenditure. The Committee notes that in

past instances the Department of Education has considered funds

in the general fund of a local educational agency to be available

even if a portion of those funds have been obligated by contract for

expenditure in the following fiscal year.

In addition, the Committee wishes to point out that the language

currently in Department of Education regulations defining the

process used to determine the amount of revenue generated from

local sources when computing a local educational agency’s local

contribution rate follows the intent of the law and the Committee

would urge that no changes be made to such regulation.

The Committee bill not only continues to address the needs of

the 1,600 federally impacted local educational agencies that receive

funding under the Impact Aid program, but also refines and im-
24

proves the current Impact Aid law so that the federal obligation

first recognized by Congress in 1950 continues into the 21st century.

SECTION-BY-SECTION ANALYSIS

Section 1 states the short title as the ‘‘Impact Aid Reauthorization Act of 2000’’.

Section 2 amends and establishes the purpose.

Section 3 describes payments relating to federal acquisition of

real property.

Section 3(a) extends authorization through 2005.

Section 3(b) establishes the amount of payments.

Section 3(c) is amended to read as follows ‘‘Section 8002(h) establishes payments with respect to fiscal years in which insufficient

funds are appropriated.’’

Section 3(d) establishes special payments.

Section 3(e) establishes additional assistance for certain local

educational agencies impacted by federal property acquisition.

Section 3(f) establishes application deadline and payment requirements.

Section 4 establishes payments for eligible federally connected

children.

Section 4(a) addresses the issue of military installation housing

undergoing renovation or rebuilding.

Section 4(b) addresses military ‘build to lease’ program housing.

Section 5 establishes the maximum amount of basic support payments.

Section 6 establishes basic payments for heavily impacted local

educational agencies (LEAs).

Section 6(a) changes the current section 8003(f) to section

8003(b)(2) determining eligibility for heavily impacted local educational agencies.

Section 6(b) addresses payments with respect to fiscal years in

which insufficient funds are appropriated.

Section 6(c) establishes conforming amendments.

Section 7 establishes basic support payments for local educational agencies affected by removal of federal property.

Section 8 establishes additional payments for local educational

agencies with high concentrations of children with severe disabilities.

Section 8(a) repeals subsection (g) of section 8003 of the Elementary and Secondary Education Act of 1965.

Section 8(b) establishes conforming amendments.

Section 9 establishes the application for payments under sections

8002 and 8003.

Section 10 establishes payments for sudden and substantial increases in attendance of military dependents.

Section 11 establishes the construction program.

Section 11(a) authorizes the construction program and amends

Section 8007 of the Elementary and Secondary Education Act of

1965.

‘‘Section 8007(a) authorizes construction payments and establishes eligibility.’’

‘‘Section 8007(b) authorizes school facility modernization grants.’’
25

Section 11(b) add the definition of ‘modernization’.

Section 12 establishes the federal administration.

Section 13 establishes administrative hearings and judicial review.

Section 14 establishes definitions.

Section 15 establishes the authorization of appropriations.

Section 15(a) establishes the payments for federal acquisitions of

real property.

Section 15(b) establishes basic payments.

Section 15(c) establishes payments for children with disabilities.

Section 15(d) establishes payments for increases in military children.

Section 15(e) establishes appropriations for construction.

Section 15(f) establishes appropriations for facilities maintenance.

Section 15(g) establishes additional assistance for certain local

educational agencies impacted by federal property acquisitions.

Section 16 establishes the effective date as October 1, 2000.

EXPLANATION OF AMENDMENTS

The Amendment in the Nature of a Substitute is explained in the

body of this report.

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of

the application of this bill to the legislative branch. This bill, H.R.

3616, the ‘‘Impact Aid Reauthorization Act of 2000,’’ reauthorizes

and improves the Impact Aid program so it can continue to provide

important financial assistance to local educational agencies affected

by the removal of property from local tax rolls. The bill does not

prevent legislative branch employees from receiving the benefits of

this legislation.

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement of whether the

provisions of the reported bill include unfunded mandates. H.R.

3616 reauthorizes and improves the Impact Aid program so it can

continue to provide important financial assistance to local educational agencies affected by the removal of property from local tax

rolls. As such, the bill does not contain any unfunded mandates.

ROLL CALL VOTES

Clause 3(b) of Rule XIII of the Rules of the House of Representatives requires the Committee Report to include for each record vote

on a motion to report the measure or matter and on any amendments offered to the measure or matter the total number of votes

for and against and the names of the Members voting for and

against.
26
27

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1)

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the

body of this report.

NEW BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE

COST ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of

the House of Representatives and section 308(a) of the Congressional Budget Act of 1974 and with respect to requirements of

3(c)(3) of Rule XIII of the House of Representatives and section 402

of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for H.R. 3616 from the Director

of the Congressional Budget Office:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, February 28, 2000.

Hon. WILLIAM F. GOODLING,

Chairman, Committee on Education and the Workforce,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3616, the Impact Aid Reauthorization Act of 2000.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contacts are Audra Millen (for federal costs) and Susan Sieg (for the state and local impact).

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

H.R. 3616—Impact Aid Reauthorization Act of 2000

Summary: H.R. 3616 would reauthorize and revise the Impact

Aid Program under the Elementary and Secondary Education Act

of 1965 (ESEA). Under current law, the authorization expires in

2000; H.R. 3616 would extend the authorization through 2004.

Under the General Education Provisions Act (GEPA), programs

funded by the Department of Education receive an automatic oneyear authorization extension. Therefore, the bill would effectively

reauthorize the program through 2005. In addition, the bill would

establish a minimum payment level for small school districts, introduce a school modernization initiative within the current construction program, and modify certain payment formulas and procedures. It would also repeal two currently unfunded programs that

authorize additional payments for disabled students and districts

that experience significant increases in federally connected students.

CBO estimates that authorizations under the bill would total

$4.8 billion (with adjustments for inflation) or ($4.6 billion (without

such adjustments) over the 2001–2005 period. Assuming appropria-
28

tions of those amounts, CBO estimates that additional outlays over

the five-year period would total $4.7 billion (with adjustments for

inflation) or $4.4 billion (without adjustments for inflation). These

estimates assume a continuation of current funding levels and do

not reflect the cost of providing the full payments that would be required under the formulas specified in the ESEA. If full funding of

the formulas has been assumed, the estimated costs would be

roughly twice the amount that CBO estimates for the bill. Enacting

H.R. 3616 would not affect direct spending or receipts; therefore,

pay-as-you-go procedures would not apply.

H.R. 3616 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).

Enactment of the bill would benefit state and local governments,

and any costs to them would be incurred voluntarily as conditions

of federal aid.

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 3616 is shown in Table 1. The costs of this

legislation fall within budget function 500 (education, training, employment, and social services).

TABLE 1. ESTIMATED BUDGETARY EFFECTS OF H.R. 3616

[By fiscal year, in million of dollars]

2000 2001 2002 2003 2004 2005

Spending Under Current Law:

Budget Authority .............................................................................. 906 0 0 0 0 0

Estimated Outlays ........................................................................... 900 93 21 1 0 0

Without Adjustments for Inflation

Proposed Changes:

Estimated Authorization Level ......................................................... 2 914 914 914 914 914

Estimated Outlays ........................................................................... 1 817 891 913 914 914

Spending Under H.R. 3616:

Estimated Authorization Level ......................................................... 908 914 914 914 914 914

Estimated Outlays ........................................................................... 901 910 911 913 914 914

With Adjustments for Inflation

Total Proposed Changes:

Estimated Authorization Level ......................................................... 2 929 944 960 977 993

Estimated Outlays ........................................................................... 1 831 919 957 974 991

Spending Under H.R. 3616:

Estimated Authorization Level ......................................................... 908 929 944 960 977 993

Estimated Outlays ........................................................................... 900 924 939 957 974 991

None: Components may not sum to totals because of rounding.

Basis of estimate

H.R. 3616 would reauthorize and revise the Impact Aid Program

under Title VII of ESEA. The current authorization for Impact Aid

expires at the end of 2000 under GEPA. The bill would reauthorize

funding for 2000 through 2004; however, programmatic changes

would not take effect until 2001. Under GEPA, the program would

automatically be authorized for an additional year; therefore, CBO

estimates costs through 2005. In general, the bill would set authorization levels for 2000 equal to actual appropriations and would authorize the appropriation of such sums as necessary for the subsequent years, when the programmatic changes would become effective.
29

For 2000, the bill would authorize appropriations totaling $908 million, $1.5 million more than has been appropriated to date. CBO

assumes spending levels for 2001 through 2005 will remain consistent with the 2000 amount except when the bill introduces structural changes that would require additional funding. Spending is

projected two different ways: (1) assuming that funding each year

is identical to the 2000 authorization, adjusted for program

changes, and (2) adjusting the 2000 authorizations for both program changes and projected inflation. With adjustments for inflation, CBO estimates the authorizations would total $929 million for

2001 and would grow to $993 million by 2005. Table 2 shows CBO’s

estimates of projected spending for each program, including adjustments for inflation.

The Impact Aid Program provides assistance to Local Education

Agencies (LEAs) that are hindered in their ability to generate local

revenues for education by their proximity to federal property. The

program provides formula grants to cover a portion of per-pupil

education costs, as well as grants to support construction and

maintenance needs. H.R. 3616 would continue the program’s authorization, introduce minor revisions, and repeal two provisions.

Payments Relating to Federal Acquisition of Real Property

Under subsection 8002(b) of ESEA, grants are made to LEAs to

compensate for the loss of local property taxes because of the taxexempt status of certain federal property. The maximum amount

an LEA is eligible to receive is calculated as the assessed value of

the property times the appropriate tax rate, less any revenue collected as a result of activities conducted on such federal property.

The amount LEAs receive is subject to a hold-harmless provision

and is ratably reduced if full funding is not provided. Approximately 100 of the LEAs receiving payments under this section are

also eligible for basic support payments under section 8003. Payments under section 8003 compensate LEAs that educate children

whose parents’ residence or work location partially or fully exempt

them from paying local taxes. Under current law, the total payment an LEA receives under both programs cannot exceed its maximum allowable payment as defined by section 8003.

TABLE 2. ESTIMATED BUDGETARY EFFECTS OF H.R. 3616, WITH ADJUSTMENTS FOR INFLATION

[By fiscal year, in millions of dollars]

2000 2001 2002 2003 2004 2005

SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law:

Budget Authority .............................................................................. 906 0 0 0 0 0

Estimated Outlays ........................................................................... 900 93 21 1 0 0

Proposed Changes:

Payments for Federal Acquisition of Property:

Payments to LEAs:

Estimated Authorization Level .................................................................. 0 33 33 34 34 35

Estimated Outlays .................................................................................... 0 29 32 34 34 35

Additional Payments:

Estimated Authorization Level .................................................................. 2 2 2 2 2 2

Estimated Outlays .................................................................................... 1 2 2 2 2 2

Payments for Federally Connected Children:

Basic Support and Heavily Impacted Districts:

Estimated Authorization Level .................................................................. 0 823 836 851 865 880
30

TABLE 2. ESTIMATED BUDGETARY EFFECTS OF H.R. 3616, WITH ADJUSTMENTS FOR INFLATION—

Continued

[By fiscal year, in millions of dollars]

2000 2001 2002 2003 2004 2005

Estimated Outlays .................................................................................... 0 741 818 849 864 878

40 Percent LOT floor for Small LEAs:

Estimated Authorization Level .................................................................. 0 6 6 6 6 6

Estimated Outlays .................................................................................... 0 5 6 6 6 6

Payments for Children with Disabilities:

Estimated Authorization Level ................................................ 0 51 52 53 53 54

Estimated Outlays .................................................................. 0 46 51 52 53 54

Construction Grants:

Formula Construction:

Estimated Authorization Level .................................................................. 0 7 7 7 8 8

Estimated Outlays .................................................................................... 0 6 7 7 8 8

School Renovation:

Estimated Authorization Level .................................................................. 0 3 3 3 3 3

Estimated Outlays .................................................................................... 0 0 1 3 3 3

Facilities Maintenance:

Estimated Authorization Level ................................................ 0 5 5 5 5 5

Estimated Outlays .................................................................. 0 1 2 4 5 5

Total Proposed Changes:

Estimated Authorization Level ......................................................... 2 929 944 960 977 993

Estimated Outlays ........................................................................... 1 831 919 957 974 991

Total Spending Under H.R. 3616:

Estimated Authorization Level ......................................................... 908 929 944 960 977 993

Estimated Outlays ........................................................................... 901 924 939 957 974 991

Note: Components may not sum to totals because of rounding.

Information from the Department of Education indicates that full

funding of section 8002 payments would cost over $300 million. The

cap on total payments specified in section 8003 would reduce this

to approximately $250 million. However, actual funding in 2000

was $32 million.

The discrepancy between full funding and actual funding increased significantly as a result of changes made in 1994. Before

1994, the property valuation base was the assessed value of similar

property. In 1994 the valuation base was changed to a ‘‘highest and

best’’ method, under which the value was determined based on

property values of adjacent land. In areas with significant growth

in property values, the calculation of maximum payments and

therefore the basis for allocating actual payments grew comparably. In contrast, areas with little or no growth in property values did not experience such an increase in payments.

The Impact Aid Technical Amendments Act of 1996 (Public Law

104–195) addressed this problem by establishing a payment floor

equal to 37 percent of an LEAs 1994 maximum allowable payment.

H.R. 3616 would continue this floor, but would revise the procedure

for allocating appropriations in excess of the amount required to

cover the floor payments. Remaining funds would be allocated

based on a combination of the hold-harmless provision and consideration of the ‘‘highest and best’’ assessment. CBO estimates no

cost as a result of this revision.

H.R. 3616 would also change the caps on total payments for

LEAs that also receive basic support payments under section 8003.

The bill would cap total payments at the higher of the maximum

amount an LEA is eligible to receive under section 8002 or 8003.

The potential costs of this change would be substantial if full fund-
31

ing were to be provided, as many districts have maximum 8002

payments that are much greater than their 8003 maximums. Assuming continuation of past funding trends, however, CBO estimates any increased payments to be negligible. For payments under section 8002, H.R. 3616 would authorize $32

million in 2000 and such sums as necessary for the 2001–2005 period. CBO’s estimate assumes that total funding for the 2001–2005

period would be $168 million (assuming adjustments for inflation)

or $160 million (without such adjustments).

Additional assistance for LEAs impacted by the acquisition

of real property

H.R. 3616 would also continue to authorize additional payments

for certain LEAs under subsection 8002(j), a previously unfunded

provision. Payments under this section would support LEAs that

qualify for payments under subsections 8002(b) and 8003(b) and

have unique circumstances that increase the costs imposed by the

existence of federally owned property. The bill would authorize $1.5 million for 2000 and such sums as

may be necessary for fiscal years 2001 to 2005. Assuming an enactment date and additional appropriations in fiscal year 2000, CBO

estimates that this provision would increase budget authority by

$1.5 million and outlays by $600,000 in 2000. CBO’s estimate assumes funding of about $8 million over the 2001–2005 period.

Payments for eligible federally connected children

Payments under section 8003 compensate LEAs that educate

children whose parents’ residence or work location partially or fully

exempts them from local taxes. Under subsection 8003(b), eligible

LEAs are entitled to compensation based on the product of a

weighted count of eligible students and the amount of per-pupil

spending that is generated through local tax revenue. If funding

levels are insufficient to provide all LEAs with this calculated

amount, payments are multiplied by a calculated percentage to

compute the learning opportunity threshold (LOT) payment. This

percent is the sum of the LEAs percentage of federally connected

students and the ratio of its maximum allowable payment to its

total expenditures. This percentage cannot exceed 100 percent. If

funding levels are still insufficient, these LOT payments are subject to further ratable reductions.

Based on information from the Department of Education, CBO

estimates full funding for 1999 would have been $1.4 billion. But

the program has never been fully funded and, in 1999, the appropriation was $704 million.

Under subsection 8003(f), certain LEAs are eligible for an additional payment if they have a particularly large percentage of federally connected children. These payments are based on a formula,

but subject to appropriations. Payments are ratably reduced when

funding is insufficient to cover the costs calculated by the formula.

Information from the Department of Education indicates that full

funding for 1999 would have been more than $76 million, compared

with the actual appropriation of $70 million.

H.R. 3616 adds several provisions relating to basic support payments under section 8003. First, it would continue an existing
32

practice of allowing students temporarily living off military bases

during renovations to retain their previous classification. Second, it

would codify language included in previous appropriations bills to

reduce payments in cases where property is leased by the federal

government. As each of these provisions represents current practice, CBO estimates no additional costs for these provisions.

A third provision would require a LOT minimum of 40 percent

for any LEA with fewer than 1000 students that currently spends

less per pupil than the average LEA in the state or substate area.

CBO estimates this would affect over 300 LEAs (out of a total of

1400) and increase annual costs by $6 million.

Finally, H.R. 3616 would continue a pilot program, authorized in

the 1999 and 2000 appropriation acts, that expedites the disbursement of 8003(f) payments and coordinates 8003(b) and 8003(f) payments for LEAs that receive both. To reflect this change, H.R. 3616

would consolidate the two line items into a single authorized

amount of $809 million for 2000. This amount equals the combined

fiscal year 2000 appropriations for the two programs. Taking into

consideration the additional costs of the 40 percent LOT floor, CBO

estimates the total cost of these payments to be $829 million in

2001 (with adjustments for inflation) or $815 million (without the

adjustments). Over the 2001–2005 period, the estimate assumes

funding of $4.3 billion (with adjustment for inflation) or $4.1 billion

(without such adjustments).

Payments for children with disabilities

Under subsection 8003(d), special payments are made to compensate LEAs that educate a significant number of students with

disabilities for the additional costs of educating those students. Districts receive a prorated amount of the appropriation based on the

number of eligible children they serve. H.R. 3616 would authorize

$50 million for 2000. CBO’s estimate assumes funding of $263 million (assuming adjustments for inflation) or $250 million (without

such adjustments) over the 2001–2005 period.

Construction

Under section 8008 of ESEA, funds are made available to support school construction or renovation projects for certain LEAs.

Only LEAs eligible for basic support payments qualify for payments under this section. In addition, they must qualify for payments under 8003(j) or have at least 50 percent of their students

residing on Indian lands or have parents in the uniformed services.

Available funds are allocated based on the number of federally connected students. Of the $10 million provided for construction programs in 2000, just over $3 million was earmarked for specific

LEAs with special construction needs.

H.R. 3616 would permanently set aside 30 percent of funds appropriated under section 8007 for a new school modernization initiative. LEAs with significant repair needs would be eligible to

compete for grants if they had no remaining capacity to issue bonds

or their facilities posed health or safety threats to their students.

Recipients would be required to use nonfederal funds to cover half

of any project costs. Remaining funds would continue to be allocated on a formula basis to qualifying schools, although 50 percent
33

of the funds would be required to go to schools that educate a large

number of children residing on Indian land. H.R. 3616 would authorize $10 million for 2000 for the construction grants and school modernization initiative under section 8007.

CBO estimates the application and matching requirements of the

school modernization component would cause spending to occur

more slowly than for the current construction grants. CBO estimates that first-year outlays of the estimated $3 million set aside

for the school modernization initiative would be $300,000. The remaining $7 million of the construction money is still expected to

spend at its current rate, resulting in first year outlays of $6 million.

For the construction program and the school modernization ini- tiative, CBO’s estimate assumes funding of $53 million (with adjustments for inflation) or $50 million (without such adjustments)

over the 2001–2005 period.

Facilities maintenance

Section 8008 funds are used to maintain schools that are owned

by the Department of Education. LEAs that serve a significant

number of federally connected children are allowed to use these facilities, but the department is responsible for costs of renovations

and repairs. Although it is the goal of the department to eventually

transfer ownership of these facilities to the LEAs, CBO does not expect the timing of these transfers to decrease funding for 2001. H.R. 3616 would authorize $5 million in 2000 for funding under

section 8008. Over the 2001–2005 period, CBO’s estimate assumes

funding of $26 million (assuming adjustments for inflation) and

$25 million (without such adjustments).

Repeal of unfunded uthorizations

H.R. 3616 would repeal sections 8003(g) and 8006, both of which

were not funded in 2000. Section 8003(g) authorized additional

payments for LEAs with disabled students. Section 8006 authorized payments to support sudden and substantial increases in the

number of federally connected students.

Estimated impact on State, local, and tribal governments: H.R.

3616 contains no intergovernmental mandates as defined in

UMRA. The bill would reauthorize formula grants to local educational agencies affected by the presence of federal property within their districts. Any cost of state or local governments arising

from application for or participation in the grant program would be

incurred voluntarily.

Estimated impact on the private sector: The bill contains no private-sector mandates as defined in UMRA.

Estimate prepared by: Federal costs: Audra Millen. Impact on

State, local, and tribal governments: Susan Sieg.

Estimate approved by: Robert A. Sunshine, Assistant Director for

Budget Analysis.

STATEMENT OF OVERSIGHT FINDINGS OF THE COMMITTEE ON

GOVERNMENT REFORM

With respect of the requirement of clause 3(c)(4) of rule XIII of

the Rules of the House of Representatives, the Committee has re-
34

ceived no report of oversight findings and recommendations from

the Committee on Government Reform on the subject of H.R. 3616.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee believes that the amendments

made by this bill to the Elementary and Secondary Education Act

are within Congress’s authority under Article I, section 8, clause 1

of the Constitution.

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R.

3616. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its

report a timely submitted cost estimate of the bill prepared by the

Director of the Congressional Budget Office under section 402 of

the Congressional Budget Act.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported are shown as follows (new matter is printed in italic

and existing law in which no change is proposed is shown in

roman):

ELEMENTARY AND SECONDARY EDUCATION ACT OF

1965

* * * * * * *

TITLE VIII—IMPACT AID

SEC. 8001. PURPOSE.

In order to fulfill the Federal responsibility to assist with the

provision of educational services to federally connected children in

a manner that promotes control by local educational agencies with

little or no Federal or State involvement, because certain activities

of the Federal Government, such as activities to fulfill the responsibilities of the Federal Government with respect to Indian tribes

and activities under section 514 of the Soldiers’ and Sailors’ Civil

Relief Act of 1940 (50 U.S.C. App. 574), place a financial burden

on the local educational agencies serving areas where such activities are carried out, and to help such children meet challenging

State standards, it is the purpose of this title to provide financial

assistance to local educational agencies that—

(1) * * *

* * * * * * *

(4) educate heavy concentrations of children whose parents

are civilian employees of the Federal Government and do not

reside on Federal property; or
35

ø(5) experience sudden and substantial increases or decreases in enrollments because of military realignments; or¿

ø(6)¿ (5) need special assistance with capital expenditures

for construction activities because of the enrollments of substantial numbers of children who reside on Federal lands and

because of the difficulty of raising local revenue through bond

referendums for capital projects due to the inability to tax Federal property.

SEC. 8002. PAYMENTS RELATING TO FEDERAL ACQUISITION OF REAL

PROPERTY.

(a) IN GENERAL.—Where the Secretary, after consultation with

any local educational agency and with the appropriate State educational agency, determines for a fiscal year ending prior to October 1, ø1999¿ 2005—

(1) * * *

* * * * * * *

(b) AMOUNT.—

(1) IN GENERAL.—(A) * * *

* * * * * * *

(B) If funds appropriated under section 8014(a) are insufficient to pay the amount determined under subparagraph (A),

the Secretary øshall ratably reduce the payment to each eligible local educational agency¿ shall calculate the payment for

each eligible local educational agency in accordance with subsection (h).

(C) Notwithstanding any other provision of this subsection,

a local educational agency may not be paid an amount under

this section that, when added to the amount such agency receives under section 8003(b), exceeds the maximum amount

that such agency is eligible to receive for such fiscal year under

øsection 8003(b)(1)(C)¿ paragraph (1)(C) of section 8003(b) or

subparagraph (D) or (E) of paragraph (2) of such section, as the

case may be, or the maximum amount that such agency is eligible to receive for such fiscal year under this section, whichever

is greater.

* * * * * * *

ø(h) HOLD-HARMLESS AMOUNTS.—

ø(1) IN GENERAL.—Except as provided in paragraph (2)(A),

the total amount that the Secretary shall pay under subsection

(b) to a local educational agency that is otherwise eligible for

a payment under this section—

ø(A) for fiscal year 1995 shall not be less than 85 percent of the amount such agency received for fiscal year

1994 under section 2 of the Act of September 30, 1950

(Public Law 874, 81st Congress) as such section was in effect on September 30, 1994;

ø(B) for fiscal year 1996 shall not be less than 85 percent of the amount such agency received for fiscal year

1995 under subsection (b); and

ø(C) for fiscal year 1997 and each succeeding fiscal year

through fiscal year 2000 shall not be less than 85 percent
36

of the amount such agency received for fiscal year 1996

under subsection (b).

ø(2) RATABLE REDUCTIONS.—(A)(i) If necessary in order to

make payments to local educational agencies in accordance

with paragraph (1) for any fiscal year, the Secretary first shall

ratably reduce payments under subsection (b) for such year to

local educational agencies that do not receive a payment under

this subsection for such year.

ø(ii) If additional funds become available for making payments under subsection (b) for such year, then payments that

were reduced under clause (i) shall be increased on the same

basis as such payments were reduced.

ø(B)(i) If the sums made available under this title for any fiscal year are insufficient to pay the full amounts that all local

educational agencies in all States are eligible to receive under

paragraph (1) after the application of subparagraph (A) for

such year, then the Secretary shall ratably reduce payments

under paragraph (1) to all such agencies for such year.

ø(ii) If additional funds become available for making payments under paragraph (1) for such fiscal year, then payments

that were reduced under clause (i) shall be increased on the

same basis as such payments were reduced.¿

(h) PAYMENTS WITH RESPECT TO FISCAL YEARS IN WHICH INSUF- FICIENT FUNDS ARE APPROPRIATED.—For any fiscal year for which

the amount appropriated under section 8014(a) is insufficient to pay

to each local educational agency the full amount determined under

subsection (b), the Secretary shall make payments to each local educational agency under this section as follows:

(1) FOUNDATION PAYMENTS FOR PRE-1995 RECIPIENTS.— (A) IN GENERAL.—The Secretary shall first make a foundation payment to each local educational agency that is eligible to receive a payment under this section for the fiscal

year involved and was eligible to receive a payment under

section 2 of the Act of September 30, 1950 (Public Law 874,

81st Congress) (as such section was in effect on the day preceding the date of the enactment of the Improving America’s Schools Act of 1994) for any of the fiscal years 1989

through 1994.

(B) AMOUNT.—The amount of a payment under subparagraph (A) for a local educational agency shall be equal to

37 percent of the payment amount the local educational

agency was eligible to receive under section 2 of the Act of

September 30, 1950, for fiscal year 1994 (or if the local educational agency was not eligible to receive a payment under

such section 2 for fiscal year 1994, the payment that local

educational agency was eligible to receive under such section 2 for the most recent fiscal year preceding 1994).

(C) INSUFFICIENT APPROPRIATIONS.—If the amount appropriated under section 8014(a) is insufficient to pay the

full amount determined under this paragraph for all eligible local educational agencies for the fiscal year, then the

Secretary shall ratably reduce the payment to each local

educational agency under this paragraph.

(2) PAYMENTS FOR 1995 RECIPIENTS.—
37

(A) IN GENERAL.—From any amounts remaining after

making payments under paragraph (1) for the fiscal year

involved, the Secretary shall make a payment to each eligible local educational agency that received a payment under

this section for fiscal year 1995.

(B) AMOUNT.—The amount of a payment under subparagraph (A) for a local educational agency shall be determined as follows:

(i) Calculate the difference between the amount appropriated to carry out this section for fiscal year 1995

and the total amount of foundation payments made

under paragraph (1) for the fiscal year.

(ii) Determine the percentage share for each local

educational agency that received a payment under this

section for fiscal year 1995 by dividing the assessed

value of the Federal property of the local educational

agency for fiscal year 1995 determined in accordance

with subsection (b)(3), by the total national assessed

value of the Federal property of all such local educational agencies for fiscal year 1995, as so determined.

(iii) Multiply the percentage share described in

clause (ii) for the local educational agency by the

amount determined under clause (i).

(3) SUBSECTION (i) RECIPIENTS.—From any funds remaining

after making payments under paragraphs (1) and (2) for the fiscal year involved, the Secretary shall make payments in accordance with subsection (i).

(4) REMAINING FUNDS.—From any funds remaining after

making payments under paragraphs (1), (2), and (3) for the fiscal year involved—

(A) the Secretary shall make a payment to each local educational agency that received a foundation payment under

paragraph (1) for the fiscal year involved in an amount

that bears the same relation to 25 percent of the remainder

as the amount the local educational agency received under

paragraph (1) for the fiscal year involved bears to the

amount all local educational agencies received under paragraph (1) for the fiscal year involved; and

(B) the Secretary shall make a payment to each local educational agency that is eligible to receive a payment under

this section for the fiscal year involved in an amount that

bears the same relation to 75 percent of the remainder as

a percentage share determined for the local educational

agency (in the same manner as percentage shares are determined for local educational agencies under paragraph

(2)(B)(ii)) bears to the percentage share determined (in the

same manner) for all local educational agencies eligible to

receive a payment under this section for the fiscal year involved, except that for the purpose of calculating a local

educational agency’s assessed value of the Federal property,

data from the most current fiscal year shall be used.

(i) øPRIORITY¿ SPECIAL PAYMENTS.—
38

ø(1) IN GENERAL.—Notwithstanding subsection (b)(1)(B), and

for any fiscal year beginning with fiscal year 1997 for which

the amount appropriated to carry out this section exceeds the

amount so appropriated for fiscal year 1996—

ø(A) the Secretary shall first use the excess amount (not

to exceed the amount equal to the difference of (i) the

amount appropriated to carry out this section for fiscal

year 1997, and (ii) the amount appropriated to carry out

this section for fiscal year 1996) to increase the payment

that would otherwise be made under this section to not

more than 50 percent of the maximum amount determined

under subsection (b) for any local educational agency described in paragraph (2); and

ø(B) the Secretary shall use the remainder of the excess

amount to increase the payments to each eligible local educational agency under this section.¿

(1) IN GENERAL.—For any fiscal year beginning with fiscal

year 2000 for which the amount appropriated to carry out this

section exceeds the amount so appropriated for fiscal year 1996

and for which subsection (b)(1)(B) applies, the Secretary shall

use the remainder described in subsection (h)(3) for the fiscal

year involved (not to exceed the amount equal to the difference

between (A) the amount appropriated to carry out this section

for fiscal year 1997 and (B) the amount appropriated to carry

out this section for fiscal year 1996) to increase the payment

that would otherwise be made under this section to not more

than 50 percent of the maximum amount determined under

subsection (b) for any local educational agency described in

paragraph (2).

* * * * * * *

(j) ADDITIONAL ASSISTANCE FOR CERTAIN LOCAL EDUCATIONAL

AGENCIES IMPACTED BY FEDERAL PROPERTY ACQUISITION.— (1) * * *

(2) ELIGIBILITY.—ø(A) A local educational agency¿ A local

educational agency is eligible to receive additional assistance

under this subsection only if such agency—

ø(i)¿ (A) received a payment under both this section and

section 8003(b) for fiscal year 1996 and is eligible to receive payments under those sections for the year of application;

ø(ii)¿ (B) provided a free public education to children described under sections 8003(a)(1)(A), (B), or (D);

ø(iii)¿ (C) had a military installation located within the

geographic boundaries of the local educational agency that

was closed as a result of base closure or realignment and

such agency does not currently have a military installation

located within its geographic boundaries;

ø(iv)¿ (D) remains responsible for the free public education of children residing in housing located on Federal

property within the boundaries of the closed military installation but whose parents are on active duty in the uniformed services and assigned to a military activity located

within the boundaries of an adjoining local educational

agency; and
39

ø(v)¿ (E) demonstrates to the satisfaction of the Secretary that such agency’s per-pupil revenue derived from

local sources for current expenditures is not less than that

revenue for the preceding fiscal year.

* * * * * * *

(l) DATA; PRELIMINARY AND FINAL PAYMENTS.— (1) IN GENERAL.—The Secretary shall—

(A) not later than 30 days following the application deadline under section 8005(c) for a fiscal year, require any

local educational agency that applied for a payment under

subsection (b) for the fiscal year to submit such data as

may be necessary in order to compute the payment;

(B) as soon as possible after the beginning of any fiscal

year, but no later than 60 days after the enactment of an

Act making appropriations to carry out this title for the fiscal year, provide a preliminary payment under subsection

(b) for any local educational agency that applied for a payment under subsection (b) for the fiscal year and was eligible for such a payment for the preceding fiscal year, in the

amount of 60 percent of the payment for the previous year;

and

(C) provide a final payment under subsection (b) for any

eligible local educational agency not later than 12 months

after the application deadline established under section

8005(c), except that any local educational agency failing to

submit all of the data required under subparagraph (A)

shall be denied such payment for the fiscal year for which

the application is made unless funds from a source other

than the Act described in subparagraph (B) are made

available to provide such payment.

(2) ELIGIBILITY FOR PAYMENTS IN SUBSEQUENT YEARS.—The

denial of a payment under subsection (b) to a local educational

agency for a fiscal year pursuant to this subsection shall not affect the eligibility of the local educational agency for a final

payment under subsection (b) for a subsequent fiscal year.

SEC. 8003. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN.

(a) COMPUTATION OF PAYMENT.—

(1) IN GENERAL.—For the purpose of computing the amount

that a local educational agency is eligible to receive under

øsubsection (b), (d), or (f)¿ subsection (b) or (d) for any fiscal

year, the Secretary shall determine the number of children

who were in average daily attendance in the schools of such

agency, and for whom such agency provided free public education, during the preceding school year and who, while in attendance at such schools—

(A) * * *

* * * * * * *

(4) MILITARY INSTALLATION HOUSING øUNDERGOING RENOVATION¿ UNDERGOING RENOVATION OR REBUILDING.—øFor purposes¿

(A) IN GENERAL.—For purposes of computing the amount

of a payment for a local educational agency for children de-
40

scribed in paragraph (1)(D)(i), the Secretary shall consider

such children to be children described in paragraph (1)(B)

if the Secretary determines, on the basis of a certification

provided to the Secretary by a designated representative of

the Secretary of Defense, that such children would have

resided in housing on Federal property in accordance with

paragraph (1)(B) except that such housing was undergoing

renovation or rebuilding on the date for which the Secretary determines the number of children under paragraph

(1).

(B) LIMITATIONS.—(i)(I) Except as provided in subclause

(II), children described in paragraph (1)(D)(i) may be

deemed to be children described in paragraph (1)(B) with

respect to housing on Federal property undergoing renovation or rebuilding in accordance with subparagraph (A) for

a period not to exceed 2 fiscal years.

(II) If the Secretary determines, on the basis of a certification provided to the Secretary by a designated representative of the Secretary of Defense, that the expected completion date of the renovation or rebuilding of the housing has

been delayed by not less than 1 year, then—

(aa) in the case of a determination made by the Secretary in the 1st fiscal year described in subclause (I),

the time period described such subclause shall be extended by the Secretary for an additional 2 years; and

(bb) in the case of a determination made by the Secretary in the 2nd fiscal year described in subclause (I),

the time period described such subclause shall be extended by the Secretary for an additional 1 year.

(ii) The number of children described in paragraph

(1)(D)(i) who are deemed to be children described in paragraph (1)(B) with respect to housing on Federal property

undergoing renovation or rebuilding in accordance with

subparagraph (A) for any fiscal year may not exceed the

maximum number of children who are expected to occupy

that housing upon completion of the renovation or rebuilding.

(5) MILITARY ‘‘BUILD TO LEASE’’ PROGRAM HOUSING.—

(A) IN GENERAL.—For purposes of computing the amount

of payment for a local educational agency for children identified under paragraph (1), the Secretary shall consider

children residing in housing initially acquired or constructed under the former section 2828(g) of title 10, United

States Code (commonly known as the ‘‘Build to Lease’’ program), as added by section 801 of the Military Construction

Authorization Act, 1984, to be children described under

paragraph (1)(B) if the property described is within the

fenced security perimeter of the military facility upon which

such housing is situated.

(B) ADDITIONAL REQUIREMENTS.—If the property described in subparagraph (A) is not owned by the Federal

Government, is subject to taxation by a State or political

subdivision of a State, and thereby generates revenues for
41

a local educational agency that is applying to receive a payment under this section, then the Secretary—

(i) shall require the local educational agency to provide certification from an appropriate official of the Department of Defense that the property is being used to

provide military housing; and

(ii) shall reduce the amount of the payment under

this section by an amount equal to the amount of revenue from such taxation received in the second preceding fiscal year by such local educational agency, unless the amount of such revenue was taken into account

by the State for such second preceding fiscal year and

already resulted in a reduction in the amount of State

aid paid to such local educational agency.

(b) BASIC SUPPORT PAYMENTS AND PAYMENTS WITH RESPECT TO

FISCAL YEARS IN WHICH INSUFFICIENT FUNDS ARE APPROPRIATED.—

(1) BASIC SUPPORT PAYMENTS.—

(A) * * *

* * * * * * *

(C) MAXIMUM AMOUNT.—The maximum amount that a

local educational agency is eligible to receive under this

øsubsection¿ paragraph for any fiscal year is the sum of

the total weighted student units, as computed under subsection (a)(2), multiplied by the greater of—

* * * * * * *

(D) INCREASE IN LOCAL CONTRIBUTION RATE DUE TO UN- USUAL GEOGRAPHIC FACTORS.—If the current expenditures

in those local educational agencies which the Secretary has

determined to be generally comparable to the local educational agency for which a computation is made under

subparagraph (C) are not reasonably comparable because of

unusual geographical factors which affect the current expenditures necessary to maintain, in such agency, a level of

education equivalent to that maintained in such other

agencies, then the Secretary shall increase the local contribution rate for such agency under subparagraph (C)(iii)

by such an amount which the Secretary determines will

compensate such agency for the increase in current expenditures necessitated by such unusual geographical factors.

The amount of any such supplementary payment may not

exceed the per-pupil share (computed with regard to all

children in average daily attendance), as determined by the

Secretary, of the increased current expenditures necessitated by such unusual geographic factors.

(2) BASIC SUPPORT PAYMENTS FOR HEAVILY IMPACTED LOCAL

EDUCATIONAL AGENCIES.—

(A) IN GENERAL.—(i) From the amount appropriated

under section 8014(b) for a fiscal year, the Secretary is authorized to make basic support payments to eligible heavily

impacted local educational agencies with children described in subsection (a).
42

(ii) A local educational agency that receives a basic support payment under this paragraph for a fiscal year shall

not be eligible to receive a basic support payment under

paragraph (1) for that fiscal year.

(B) ELIGIBILITY FOR CONTINUING HEAVILY IMPACTED

LOCAL EDUCATIONAL AGENCIES.— (i) FISCAL YEAR 2001.—A heavily impacted local educational agency is eligible to receive a basic support

payment under subparagraph (A) for fiscal year 2001

with respect to a number of children determined under

subsection (a)(1) only if the agency received an additional assistance payment under subsection (f) (as such

subsection was in effect on the day before the date of

the enactment of the Impact Aid Reauthorization Act of

2000) for fiscal year 2000.

(ii) FISCAL YEAR 2002 AND SUBSEQUENT FISCAL

YEARS.—A heavily impacted local educational agency

described in clause (i) is eligible to receive a basic support payment under subparagraph (A) for fiscal year

2002 and any subsequent fiscal year with respect to a

number of children determined under subsection (a)(1)

only if the agency—

(I) received a basic support payment under subparagraph (A) for fiscal year 2001; and

(II)(aa) is a local educational agency whose

boundaries are the same as a Federal military installation;

(bb) has an enrollment of federally connected

children described in subsection (a)(1) which constitutes a percentage of the total student enrollment of such agency which is not less than 35 percent, has a per-pupil expenditure that is less than

the average per-pupil expenditure of the State in

which the agency is located or the average perpupil expenditure of all States (whichever average

per-pupil expenditure is greater), except that a

local educational agency with a total student enrollment of less than 350 students shall be deemed

to have satisfied such per-pupil expenditure requirement, and has a tax rate for general fund

purposes which is at least 95 percent of the average tax rate for general fund purposes of comparable local educational agencies in the State; or

(cc) has a total student enrollment of not less

than 25,000 students, of which not less than 50

percent are federally connected children described

in subsection (a)(1) and not less than 6,000 of such

federally connected children are children described

in subparagraphs (A) and (B) of subsection (a)(1).

(iii) RESUMPTION OF ELIGIBILITY.—A heavily impacted local educational agency described in clause (i)

or (ii) that becomes ineligible under either such clause

for 1 or more fiscal years may resume eligibility for a

basic support payment under this paragraph for a sub-
43

sequent fiscal year only if the agency meets the requirements of item (aa), (bb), or (cc) of clause (ii)(II) for that

subsequent fiscal year.

(C) ELIGIBILITY FOR NEW HEAVILY IMPACTED LOCAL EDU- CATIONAL AGENCIES.— (i) IN GENERAL.—A heavily impacted local educational agency that did not receive an additional assistance payment under subsection (f) (as such subsection was in effect on the day before the date of the

enactment of the Impact Aid Reauthorization Act of

2000) for fiscal year 2000 is eligible to receive a basic

support payment under subparagraph (A) for fiscal

year 2002 and any subsequent fiscal year with respect

to a number of children determined under subsection

(a)(1) only if the agency—

(I) has an enrollment of federally connected children described in subsection (a)(1) which constitutes a percentage of the total student enrollment of such agency which (aa) is not less than 50

percent if such agency receives a payment on behalf of children described in subparagraphs (F)

and (G) of such subsection or (bb) is not less than

40 percent if such agency does not receive a payment on behalf of such children;

(II)(aa) is a local educational agency whose

boundaries are the same as a Federal military installation; or

(bb) is a local educational agency that has a tax

rate for general fund purposes which is at least 95

percent of the average tax rate for general fund

purposes of comparable local educational agencies

in the State; and

(III)(aa) for a local educational agency that has

a total student enrollment of 350 or more students,

the agency has a per-pupil expenditure that is less

than the average per-pupil expenditure of the State

in which the agency is located; or

(bb) for a local educational agency that has a

total student enrollment of less than 350 students,

the agency has a per-pupil expenditure that is less

than the average per-pupil expenditure of a comparable agency in the State in which the agency is

located.

(ii) RESUMPTION OF ELIGIBILITY.—A heavily impacted local educational agency described in clause (i)

that becomes ineligible under such clause for 1 or more

fiscal years may resume eligibility for a basic support

payment under this paragraph for a subsequent fiscal

year only if the agency meets the requirements of subclauses (I), (II), and (III) of clause (i) for that subsequent fiscal year.

(iii) APPLICATION.—With respect to the first fiscal

year for which a heavily impacted local educational

agency described in clause (i) applies for a basic sup-
44

port payment under subparagraph (A), or with respect

to the first fiscal year for which a heavily impacted

local educational agency applies for a basic support

payment under subparagraph (A) after becoming ineligible under clause (i) for 1 or more preceding fiscal

years, the agency shall apply for such payment at least

1 year prior to the start of that first fiscal year.

(D) MAXIMUM AMOUNT FOR REGULAR HEAVILY IMPACTED

LOCAL EDUCATIONAL AGENCIES.—(i) Except as provided in

subparagraph (E), the maximum amount that a heavily impacted local educational agency is eligible to receive under

this paragraph for any fiscal year is the sum of the total

weighted student units, as computed under subsection

(a)(2) (subject to clause (ii)), multiplied by the greater of—

(I) four-fifths of the average per-pupil expenditure of

the State in which the local educational agency is located for the third fiscal year preceding the fiscal year

for which the determination is made; or

(II) four-fifths of the average per-pupil expenditure of

all of the States for the third fiscal year preceding the

fiscal year for which the determination is made.

(ii)(I) For a local educational agency with respect to

which 35 percent or more of the total student enrollment of

the schools of the agency are children described in subparagraph (D) or (E) (or a combination thereof) of subsection

(a)(1), the Secretary shall calculate the weighted student

units of such children for purposes of subsection (a)(2) by

multiplying the number of such children by a factor of 0.55.

(II) For a local educational agency that has an enrollment of 100 or fewer federally connected children described

in subsection (a)(1), the Secretary shall calculate the total

number of weighted student units for purposes of subsection

(a)(2) by multiplying the number of such children by a factor of 1.75.

(III) For a local educational agency that has an enrollment of more than 100 but not more than 750 children described in subsection (a)(1), the Secretary shall calculate

the total number of weighted student units for purposes of

subsection (a)(2) by multiplying the number of such children by a factor of 1.25.

(E) MAXIMUM AMOUNT FOR LARGE HEAVILY IMPACTED

LOCAL EDUCATIONAL AGENCIES.—(i)(I) Subject to clause (ii),

the maximum amount that a heavily impacted local educational agency described in subclause (II) is eligible to receive under this paragraph for any fiscal year shall be determined in accordance with the formula described in paragraph (1)(C).

(II) A heavily impacted local educational agency described in this subclause is a local educational agency that

has a total student enrollment of not less than 25,000 students, of which not less than 50 percent are federally connected children described in subsection (a)(1) and not less

than 6,000 of such federally connected children are chil-
45

dren described in subparagraphs (A) and (B) of subsection

(a)(1).

(ii) For purposes of calculating the maximum amount described in clause (i), the factor used in determining the

weighted student units under subsection (a)(2) with respect

to children described in subparagraphs (A) and (B) of subsection (a)(1) shall be 1.35.

(F) DATA.—For purposes of providing assistance under

this paragraph, the Secretary shall use student, revenue,

expenditure, and tax data from the third fiscal year preceding the fiscal year for which the local educational agency is applying for assistance under this paragraph.

ø(2)¿ (3) PAYMENTS WITH RESPECT TO FISCAL YEARS IN WHICH

INSUFFICIENT FUNDS ARE APPROPRIATED.—

(A) IN GENERAL.—For any fiscal year in which the sums

appropriated under section 8014(b) are insufficient to pay

to each local educational agency the full amount computed

under øparagraph (1)¿ paragraphs (1) and (2), the Secretary shall make payments in accordance with this paragraph.

(B) LEARNING OPPORTUNITY THRESHOLD PAYMENTS IN

LIEU OF PAYMENTS UNDER PARAGRAPH (1).—(i) For fiscal

years described in subparagraph (A), the Secretary shall

compute a learning opportunity threshold payment (hereafter in this title referred to as the ‘‘threshold payment’’)

in lieu of basic support payments under paragraph (1) by

multiplying the amount obtained under paragraph (1)(C)

by the total percentage obtained by adding—

(I) * * *

* * * * * * *

(ii) Such total percentage used to calculate threshold

payments under øparagraph (1)¿ clause (i) shall not exceed

100.

* * * * * * *

(iv) In the case of a local educational agency that has a

total student enrollment of fewer than 1,000 students and

that has a per-pupil expenditure that is less than the average per-pupil expenditure of the State in which the agency

is located, the total percentage used to calculate threshold

payments under clause (i) shall not be less than 40 percent.

(C) LEARNING OPPORTUNITY THRESHOLD PAYMENTS IN

LIEU OF PAYMENTS UNDER PARAGRAPH (2).—For fiscal years

described in subparagraph (A), the learning opportunity

threshold payment in lieu of basic support payments under

paragraph (2) shall be equal to the amount obtained under

subparagraph (D) or (E) of paragraph (2), as the case may

be.

ø(C)¿ (D) RATABLE DISTRIBUTION.—For fiscal years described in subparagraph (A), the Secretary shall make payments as a ratable distribution based upon the øcomputation made under subparagraph (B)¿ computations made

under subparagraphs (B) and (C).
46

ø(3)¿ (4) STATES WITH ONLY ONE LOCAL EDUCATIONAL AGEN- CY.— (A) IN GENERAL.—In any of the 50 States of the United

States in which there is only one local educational agency,

the Secretary shall, for purposes of øparagraphs (1)(B),

(1)(C), and (2) of this subsection¿ subparagraphs (B) and

(C) of paragraph (1) or subparagraphs (B) through (D) of

paragraph (2), as the case may be, paragraph (3) of this

subsection, and subsection (e), consider each administrative school district in the State to be a separate local educational agency.

(B) COMPUTATION OF MAXIMUM AMOUNT OF BASIC SUP- PORT PAYMENT AND THRESHOLD PAYMENT.—In computing

the maximum payment amount under paragraph (1)(C) or

subparagraph (D) or (E) of paragraph (2), as the case may

be, and the learning opportunity threshold payment under

øparagraph (2)(B)¿ subparagraph (B) or (C) of paragraph

(3) for an administrative school district described in subparagraph (A)—

(5) LOCAL EDUCATIONAL AGENCIES AFFECTED BY REMOVAL OF

FEDERAL PROPERTY.— (A) IN GENERAL.—In computing the amount of a basic

support payment under this subsection for a fiscal year for

a local educational agency described in subparagraph (B),

the Secretary shall meet the additional requirements described in subparagraph (C).

(B) LOCAL EDUCATIONAL AGENCY DESCRIBED.—A local

educational agency described in this subparagraph is a

local educational agency with respect to which Federal

property (i) located within the boundaries of the agency,

and (ii) on which 1 or more children reside who are receiving a free public education at a school of the agency, is

transferred by the Federal Government to another entity in

any fiscal year beginning on or after the date of the enactment of the Impact Aid Reauthorization Act of 2000 so that

the property is subject to taxation by the State or a political

subdivision of the State.

(C) ADDITIONAL REQUIREMENTS.—The additional requirements described in this subparagraph are the following:

(i) For each fiscal year beginning after the date on

which the Federal property is transferred, a child described in subparagraph (B) who continues to reside on

such property and who continues to receive a free public education at a school of the agency shall be deemed

to be a child who resides on Federal property for purposes of computing under the applicable subparagraph

of subsection (a)(1) the amount that the agency is eligible to receive under this subsection.

(ii)(I) For the third fiscal year beginning after the

date on which the Federal property is transferred, and

for each fiscal year thereafter, the Secretary shall, after

computing the amount that the agency is otherwise eligible to receive under this subsection for the fiscal year

involved, deduct from such amount an amount equal to
47

the revenue received by the agency for the immediately

preceding fiscal year as a result of the taxable status

of the former Federal property.

(II) For purposes of determining the amount of revenue to be deducted in accordance with subclause (I),

the local educational agency—

(aa) shall provide for a review and certification

of such amount by an appropriate local tax authority; and

(bb) shall submit to the Secretary a report containing the amount certified under item (aa).

(i) * * *

* * * * * * *

(c) PRIOR YEAR DATA.— (1) IN GENERAL.—Except as provided in øparagraph (2) and

subsection (f)¿ subsection (b)(2) and paragraph (2), all calculations under this section shall be based on data for each local

educational agency from not later than the fiscal year preceding the fiscal year for which the agency is making application for payment.

* * * * * * *

ø(f) ADDITIONAL ASSISTANCE FOR HEAVILY IMPACTED LOCAL EDU- CATIONAL AGENCIES.— ø(1) RESERVATION.—From amounts appropriated under section 8014(b) for a fiscal year, the Secretary shall provide additional assistance to meet special circumstances relating to the

provision of education in local educational agencies eligible to

receive assistance under this section.

ø(2) ELIGIBILITY.—(A) A local educational agency is eligible

to receive additional assistance under this subsection if such

agency is eligible for a supplementary payment in accordance

with subparagraph (B) or such agency—

ø(i)(I) has an enrollment of federally connected children

described in subsection (a)(1) which constitutes a percentage of the total student enrollment of such agency which

is not less than 50 percent if such agency receives a payment on behalf of children described in subparagraphs (F)

and (G) of such subsection, or not less than 40 percent if

such agency does not receive a payment on behalf of such

children; and

ø(II) has a tax rate for general fund purposes which is

at least 95 percent of the average tax rate for general fund

purposes of comparable local educational agencies in the

State;

ø(ii)(I) has an enrollment of federally connected children

described in subsection (a)(1) which constitutes at least 35

percent of the total student enrollment of such agency; and

ø(II) has a tax rate for general fund purposes which is

at least 125 percent of the average tax rate for general

fund purposes of comparable local educational agencies in

the State; or

ø(iii) is a local educational agency whose boundaries are

the same as a Federal military installation.
48

ø(B) If the current expenditures in those local educational

agencies which the Secretary has determined to be generally

comparable to the local educational agency for which a computation is made under subsection (b)(1)(C) are not reasonably

comparable because of unusual geographical factors which affect the current expenditures necessary to maintain, in such

agency, a level of education equivalent to that maintained in

such other agencies, then the Secretary shall increase the local

contribution rate for such agency by such an amount which the

Secretary determines will compensate such agency for the increase in current expenditures necessitated by such unusual

geographical factors. The amount of any such supplementary

payment may not exceed the per-pupil share (computed with

regard to all children in average daily attendance), as determined by the Secretary, of the increased current expenditures

necessitated by such unusual geographic factors.

ø(C) Any local educational agency determined eligible under

clause (iii) of subparagraph (A) shall be deemed to have met

the tax effort requirements for eligibility under clause (i)(II) or

(ii)(II) of such subparagraph.

ø(D) local educational agency shall only be eligible to receive additional assistance under this subsection if the

Secretary determines that—

ø(i) such agency is exercising due diligence in

availing itself of State and other financial assistance;

and

ø(ii) the eligibility of such agency under State law

for State aid with respect to the free public education

of children described in subsection (a)(1) and the

amount of such aid are determined on a basis no less

favorable to such agency than the basis used in determining the eligibility of local educational agencies for

State aid, and the amount of such aid, with respect to

the free public education of other children in the

State.

ø(3) MAXIMUM PAYMENTS.—

ø(A) IN GENERAL.—Subject to subparagraph (B), the Secretary shall determine the maximum amount that a local

educational agency may receive under this subsection

(other than any amount received under paragraph (2)(B))

in accordance with the following computations: The Secretary, in conjunction with the local educational agency,

shall first determine each of the following:

ø(I) The average per-pupil expenditure of the

State in which the local educational agency is located.

ø(II) The average per-pupil expenditure of generally comparable local educational agencies located in the State of the local educational agency,

as defined in regulations issued by the Secretary.

ø(III) The average per-pupil expenditure of

three generally comparable local educational agencies located in the State of the local educational
49

agency, as defined in regulations issued by the

Secretary.

The local educational agency shall select one of the amounts determined under subclause (I), (II), or (III) for purposes of the remaining computations under this subparagraph.

ø(ii) The Secretary shall next multiply the amount

determined under clause (i) by the total number of

students in average daily attendance at the schools of

the local educational agency.

ø(iii) The Secretary shall next subtract from the

amount determined under clause (ii) all funds available to the local educational agency for current expenditures, but, except as provided in subparagraph

(C), shall not so subtract funds provided—

ø(I) under this Act; or

ø(II) by any department or agency of the Federal Government (other than the Department)

that are used for capital expenses.

ø(iv) If the tax rate used by the local educational

agency is greater than 95 percent, but less than 100

percent, of the tax rate of comparable local educational

agencies, the Secretary shall next multiply the amount

determined under clause (iii) by the percentage that

the tax rate of the local educational agency is of—

ø(I) the average tax rate of its generally comparable local educational agencies; or

ø(II) the average tax rate of all the local educational agencies in the State in which the local

educational agency is located.

ø(v) The Secretary shall next subtract the total

amount of payments received by a local educational

agency under subsections (b) and (d) for a fiscal year

from the amount determined under clause (iii) or

clause (iv), as the case may be.

ø(B) SPECIAL RULE.—With respect to payments under

this subsection for a fiscal year for a local educational

agency described in clause (ii) or (iii) of paragraph (2)(A),

the maximum amount of payments under this subsection

shall be equal to—

ø(i) the product of—

ø(I) the average per-pupil expenditure in all

States multiplied by 0.7, except that such amount

may not exceed 125 percent of the average perpupil expenditure in all local educational agencies

in the State; multiplied by

ø(II) the number of students described in subparagraph (A) or (B) of subsection (a)(1) for such

agency; minus

ø(ii) the amount of payments such agency receives

under subsections (b) and (d) for such year.

ø(C) DETERMINATION OF AVAILABLE FUNDS.—When determining the amount of funds available to the local educational agency for current expenditures for purposes of

subparagraph (A)(iii) for a fiscal year, the Secretary shall
50

include, with respect to the local educational agency’s

opening cash balance for such fiscal year, the portion of

such balance that is the greater of—

ø(i) the amount that exceeds the maximum amount

of funds for current expenditures that the local educational agency was allowed by State law to carry over

from the prior fiscal year, if State restrictions on such

amounts were applied uniformly to all local educational agencies in the State; or

ø(ii) the amount that exceeds 30 percent of the local

educational agency’s operating costs for the prior fiscal

year.

ø(4) DATA.—For purposes of providing assistance under this

subsection the Secretary shall use student, revenue, expenditure, and tax data from the second fiscal year preceding the

fiscal year for which the local educational agency is applying

for assistance under this subsection.

ø(5) REDUCTION IN PAYMENTS.—If funds appropriated to

carry out this subsection are insufficient to pay in full the

amounts determined under paragraph (3), the Secretary shall

ratably reduce the payment to each eligible local educational

agency.

ø(g) ADDITIONAL PAYMENTS FOR LOCAL EDUCATIONAL AGENCIES

WITH HIGH CONCENTRATIONS OF CHILDREN WITH SEVERE DISABILITIES.—

ø(1) IN GENERAL.—If any local educational agency receives

Federal funds from sources other than this title to carry out

the purposes of this title for any fiscal year due to the enrollment of children described under subsection (a), then the Secretary shall consider such funds as a payment to such agency

under this part for such fiscal year.

ø(2) SPECIAL RULE.—Notwithstanding any other provision of

law, if funds appropriated pursuant to section 8014(b) for payments under subsection (b) to such agency for a fiscal year

which, when added to the funds described in paragraph (1) received by such agency for such fiscal year, exceed the maximum amount described under subsection (b)(1)(C), then the

Secretary shall make available from the funds appropriated

under section 8014(b) for such fiscal year such excess amounts

to any local educational agency serving two or more children

described under subparagraph (B) or (D) of subsection (a)(1)

who have a severe disability and a parent serving in the uniformed services (as defined by section 101 of title 37, United

States Code) who is assigned to a particular permanent duty

station for compassionate reasons (compassionate post assignment) for the total costs associated with such children who are

provided an educational program provided outside the schools

of such agency.

ø(3) REMAINING FUNDS.—If funds remain after payments are

made under paragraph (2) for any fiscal year, then such remaining funds shall be made available for expenditures under

subsection (d) in such fiscal year on a pro rata basis consistent

with the requirements of such subsection.
51

ø(4) RATABLE REDUCTIONS.—If amounts available to carry

out paragraph (2) for any fiscal year are insufficient to pay in

full the total payment that all eligible local educational agencies are eligible to receive under such paragraph for such year,

then the Secretary shall ratably reduce such payments to such

agencies for such year.¿

ø(h)¿ (f) OTHER FUNDS.—Notwithstanding any other provision of

law, a local educational agency receiving funds under this section

may also receive funds under section 6 of the Act of September 30,

1950 (Public Law 874, 81st Congress) (as such section was in effect

on the day preceding the date of enactment of the Improving America’s Schools Act of 1994) or such section’s successor authority.

ø(i)¿ (g) MAINTENANCE OF EFFORT.—A local educational agency

may receive funds under øsections 8002 and 8003(b)¿ section 8002

and subsection (b) of this section for any fiscal year only if the State

educational agency finds that either the combined fiscal effort per

student or the aggregate expenditures of that agency and the State

with respect to the provision of free public education by that agency for the preceding fiscal year was not less than 90 percent of such

combined fiscal effort or aggregate expenditures for the second preceding fiscal year.

* * * * * * *

SEC. 8005. APPLICATION FOR PAYMENTS UNDER SECTIONS 8002 AND

8003.

(a) IN GENERAL.—A local educational agency desiring to receive

a payment under section 8002 or 8003 shall—

* * * * * * *

(d) APPROVAL.—

(1) * * *

* * * * * * *

(2) REDUCTION IN PAYMENT.—The Secretary shall approve an

application filed not more than 60 days after a deadline established under subsection (c), or not more than 60 days after the

date on which the Secretary sends written notice to the local

educational agency pursuant to paragraph (3)(A), as the case

may be, that otherwise meets the requirements of this title, except that, notwithstanding section 8003(e), the Secretary shall

reduce the payment based on such late application by 10 percent of the amount that would otherwise be paid.

ø(3) LATE APPLICATIONS.—The Secretary shall not accept or

approve any application that is filed more than 60 days after

a deadline established under subsection (c).¿

(3) LATE APPLICATIONS.—

(A) NOTICE.—The Secretary shall, as soon as practicable

after the deadline established under subsection (c), provide

to each local educational agency that applied for a payment

under section 8002 or 8003 for the prior fiscal year, and

with respect to which the Secretary has not received an application for a payment under either such section (as the

case may be) for the fiscal year in question, written notice

of the failure to comply with the deadline and instruction
52

to ensure that the application is filed not later than 60

days after the date on which the Secretary sends the notice.

(B) ACCEPTANCE AND APPROVAL OF LATE APPLICATIONS.— The Secretary shall not accept or approve any application

of a local educational agency that is filed more than 60

days after the date on which the Secretary sends written

notice to the local educational agency pursuant to subparagraph (A).

* * * * * * *

øSEC. 8006. PAYMENTS FOR SUDDEN AND SUBSTANTIAL INCREASES

IN ATTENDANCE OF MILITARY DEPENDENTS.

ø(a) ELIGIBILITY.—A local educational agency is eligible for a payment under this section if—

ø(1) the number of children in average daily attendance during the school year for which the determination is made is at

least 10 percent or 100 more than the number of children in

average daily attendance in the school year preceding the

school year for which the determination is made; and

ø(2) the number of children in average daily attendance with

a parent on active duty (as defined in section 101(18) of title

37, United States Code) in the Armed Forces who are in attendance at such agency because of the assignment of their

parent to a new duty station between May 15 and September

30, inclusive, of the fiscal year for which the determination is

made, as certified by an appropriate local official of the Department of Defense, is at least 10 percent or 100 more than the

number of children in average daily attendance in the preceding school year.

ø(b) APPLICATION.—A local educational agency that wishes to receive a payment under this section shall file an application with

the Secretary by October 15 of the school year for which payment

is requested, in such manner and containing such information as

the Secretary may prescribe, including information demonstrating

that such agency is eligible for such a payment.

ø(c) CHILDREN TO BE COUNTED.—For each eligible local educational agency that applies for a payment under this section, the

Secretary shall determine the lesser of—

ø(1) the increase in the number of children in average daily

attendance from the school year preceding the fiscal year for

which the determination is made; and

ø(2) the number of children described in subsection (a)(2).

ø(d) PAYMENTS.—

ø(1) IN GENERAL.—Except as provided in paragraph (2), from

the amount appropriated for a fiscal year under section

8014(d), the Secretary shall pay each local educational agency

with an approved application an amount equal to one-half of

the national average per-pupil expenditure multiplied by the

number of such children determined under subsection (c) for

that local educational agency.

ø(2) RATABLE REDUCTION.—(A) If the amount appropriated to

carry out this section for any fiscal year is insufficient to pay

the full payment that all eligible local educational agencies are

eligible to receive under this section for such year, then the
53

Secretary shall ratably reduce the payments to such agencies

for such year.

ø(B) If additional funds become available for making payments under paragraph (1) for such fiscal year, payments that

were reduced under subparagraph (A) shall be increased on the

same basis as such payments were reduced.

ø(e) NOTIFICATION PROCESS.—

ø(1) ESTABLISHMENT.—The Secretary shall establish, with

the Secretary of Defense, a notification process relating to the

closure of Department of Defense facilities, or the adjustment

of personnel levels assigned to such facilities, which may substantially affect the student enrollment levels of local educational agencies which receive or may receive payments under

this title.

ø(2) INFORMATION.—Such process shall provide timely information regarding such closures and such adjustments—

ø(A) by the Secretary of Defense to the Secretary; and

ø(B) by the Secretary to the affected local educational

agencies.

øSEC. 8007. CONSTRUCTION.

ø(a) PAYMENTS AUTHORIZED.—From the amount appropriated for

each fiscal year under section 8014(e), the Secretary shall make

payments to each local educational agency—

ø(1) that receives a basic payment under section 8003(b); and

ø(2)(A) in which the number of children determined under

section 8003(a)(1)(C) constituted at least 50 percent of the

number of children who were in average daily attendance in

the schools of such agency during the preceding school year;

ø(B) in which the number of children determined under subparagraphs (B) and (D)(i) of section 8003(a)(1) constituted at

least 50 percent of the number of children who were in average

daily attendance in the schools of such agency during the

school year preceding the school year for which the determination is made;

ø(C) that receives assistance under section 8003(f); or

ø(D) that receives assistance under section 8006.

ø(b) AMOUNT OF PAYMENTS.—The amount of a payment to each

such agency for a fiscal year shall be equal to—

ø(1) the amount appropriated under section 8014(e) for such

year; divided by

ø(2) the number of children determined under section

8003(a)(2) for all local educational agencies described in subsection (a), but not including any children attending a school

assisted or provided by the Secretary under section 8008 or

section 10 of the Act of September 23, 1950 (Public Law 815,

81st Congress) (as such Act was in effect on the day preceding

the date of enactment of the Improving America’s Schools Act

of 1994); multiplied by

ø(3) the number of such children determined for such agency.

ø(c) USE OF FUNDS.—Any local educational agency that receives

funds under this section shall use such funds for construction, as

defined in section 8013(3).¿
54

SEC. 8007. CONSTRUCTION.

(a) CONSTRUCTION PAYMENTS AUTHORIZED.—

(1) IN GENERAL.—From 70 percent of the amount appropriated for each fiscal year under section 8014(e), the Secretary

shall make payments in accordance with this subsection to each

local educational agency that receives a basic support payment

under section 8003(b) for that fiscal year.

(2) ADDITIONAL REQUIREMENTS.—A local educational agency

that receives a basic support payment under section 8003(b)(1)

shall also meet at least 1 of the following requirements:

(A) The number of children determined under section

8003(a)(1)(C) for the agency for the preceding school year

constituted at least 50 percent of the total student enrollment in the schools of the agency during the preceding

school year.

(B) The number of children determined under subparagraphs (B) and (D)(i) of section 8003(a)(1) for the agency

for the preceding school year constituted at least 50 percent

of the total student enrollment in the schools of the agency

during the preceding school year.

(3) AMOUNT OF PAYMENTS.—

(A) LOCAL EDUCATIONAL AGENCIES IMPACTED BY MILITARY DEPENDENT CHILDREN.—The amount of a payment to

each local educational agency described in this subsection

that is impacted by military dependent children for a fiscal

year shall be equal to—

(i)(II) 35 percent of the amount appropriated under

section 8014(e) for such fiscal year; divided by

(II) the total number of weighted student units of

children described in subparagraphs (B) and (D)(i) of

section 8003(a)(1) for all local educational agencies described in this subsection (as calculated under section

8003(a)(2)), including the number of weighted student

units of such children attending a school facility described in section 8008(a) if the Secretary does not provide assistance for the school facility under that section

for the prior fiscal year; multiplied by

(ii) the total number of such weighted student units

for the agency.

(B) LOCAL EDUCATIONAL AGENCIES IMPACTED BY CHILDREN WHO RESIDE ON INDIAN LANDS.—The amount of a

payment to each local educational agency described in this

subsection that is impacted by children who reside on Indian lands for a fiscal year shall be equal to—

(i)(I) 35 percent of the amount appropriated under

section 8014(e) for such fiscal year; divided by

(II) the total number of weighted student units of

children described in section 8003(a)(1)(C) for all local

educational agencies described in this subsection (as

calculated under section 8003(a)(2)); multiplied by

(ii) the total number of such weighted student units

for the agency.
55

(4) USE OF FUNDS.—Any local educational agency that receives funds under this subsection shall use such funds for construction, as defined in section 8013(3).

(b) SCHOOL FACILITY MODERNIZATION GRANTS AUTHORIZED.— (1) IN GENERAL.—From 30 percent of the amount appropriated for each fiscal year under section 8014(e), the Secretary

shall award grants in accordance with this subsection to eligible local educational agencies to enable the local educational

agencies to carry out modernization of school facilities.

(2) ELIGIBILITY REQUIREMENTS.—A local educational agency

is eligible to receive funds under this subsection only if—

(A) such agency (or in the case of a local educational

agency that does not have the authority to tax or issue

bonds, such agency’s fiscal agent) has no capacity to issue

bonds or is at such agency’s limit in bonded indebtedness

for the purposes of generating funds for capital expenditures; and

(B)(i) such agency received assistance under section

8002(a) for the fiscal year and has an assessed value of

taxable property per student in the school district that is

less than the average of the assessed value of taxable

property per student in the State in which the local educational agency is located; or

(ii) such agency received assistance under subsection (a)

for the fiscal year and has a school facility emergency, as

determined by the Secretary, that poses a health or safety

hazard to the students and school personnel assigned to

the school facility.

(3) AWARD CRITERIA.—In awarding grants under this subsection the Secretary shall consider 1 or more of the following

factors:

(A) The extent to which the local educational agency

lacks the fiscal capacity to undertake the modernization

project without Federal assistance.

(B) The extent to which property in the local educational

agency is nontaxable due to the presence of the Federal

Government.

(C) The extent to which the local educational agency

serves high numbers or percentages of children described

in subparagraphs (A), (B), (C), and (D) of section

8003(a)(1).

(D) The need for modernization to meet—

(i) the threat that the condition of the school facility

poses to the safety and well-being of students;

(ii) overcrowding conditions as evidenced by the use

of trailers and portable buildings and the potential for

future overcrowding because of increased enrollment;

and

(iii) facility needs resulting from actions of the Federal Government.

(E) The age of the school facility to be modernized.

(4) OTHER AWARD PROVISIONS.—

(A) FEDERAL SHARE.—The Federal funds provided under

this subsection to a local educational agency described in
56

subparagraph (C) shall not exceed 50 percent of the total

cost of the project to be assisted under this subsection. A

local educational agency may use in-kind contributions to

meet the matching requirement of the preceding sentence.

(B) MAXIMUM GRANT.—A local educational agency described in subparagraph (C) may not receive a grant under

this subsection in an amount that exceeds $3,000,000 during any 5-year period.

(C) LOCAL EDUCATIONAL AGENCY DESCRIBED.—A local

educational agency described in this subparagraph is a

local educational agency that has the authority to issue

bonds but is at such agency’s limit in bonded indebtedness

for the purposes of generating funds for capital expenditures.

(5) APPLICATIONS.—A local educational agency that desires to

receive a grant under this subsection shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require. Each

application shall contain—

(A) documentation certifying such agency’s lack of bonding capacity;

(B) a listing of the school facilities to be modernized, including the number and percentage of children determined

under section 8003(a)(1) in average daily attendance in

each school facility;

(C) a description of the ownership of the property on

which the current school facility is located or on which the

planned school facility will be located;

(D) a description of any school facility deficiency that

poses a health or safety hazard to the occupants of the

school facility and a description of how that deficiency will

be repaired;

(E) a description of the modernization to be supported

with funds provided under this subsection;

(F) a cost estimate of the proposed modernization; and

(G) such other information and assurances as the Secretary may reasonably require.

(6) EMERGENCY GRANTS.—

(A) APPLICATIONS.—Each local educational agency described in paragraph (2)(B)(ii) that desires a grant under

this subsection shall include in the application submitted

under paragraph (5) a signed statement from an appropriate local official certifying that a health or safety deficiency exists.

(B) PRIORITY.—If the Secretary receives more than 1 application from local educational agencies described in paragraph (2)(B)(ii) for grants under this subsection for any fiscal year, the Secretary shall give priority to local educational agencies based on the severity of the emergency,

as determined by the Secretary, and when the application

was received.

(C) CONSIDERATION FOR FOLLOWING YEAR.—A local educational agency described in paragraph (2)(B)(ii) that applies for a grant under this subsection for any fiscal year
57

and does not receive the grant shall have the application

for the grant considered for the following fiscal year, subject to the priority described in subparagraph (B).

* * * * * * *

SEC. 8010. FEDERAL ADMINISTRATION.

(a) PAYMENTS IN WHOLE DOLLAR AMOUNTS.—The Secretary shall

round any payments under this title to the nearest whole dollar

amount.

* * * * * * *

(c) SPECIAL RULES.— ø(1) CERTAIN CHILDREN ELIGIBLE UNDER SUBSECTION (a) OR

(b) OF SECTION 3 OF PUBLIC LAW 81–874.—Notwithstanding any

other provision of law, for any fiscal year before fiscal year

1995, the Secretary shall treat as eligible under subsection (a)

or (b) of section 3 of the Act of September 30, 1950 (Public Law

874, 81st Congress) (as such subsection was in effect on the

day preceding the date of enactment of the Improving America’s Schools Act of 1994), and shall forgive the obligation of a

local educational agency to repay any amounts that such agency received under such section for such fiscal year based on,

any child who would be eligible under such subsections except

that such child does not meet the requirements of subsection

(a)(1)(B) or (b)(2)(B), respectively, of such section 3, if such

child meets the requirements of paragraph (3) of this subsection.¿

ø(2)¿ (1) CERTAIN CHILDREN ELIGIBLE UNDER SUBPARAGRAPHS

(A) AND (G)(ii) OF SECTION 8003(a)(1).—(A) * * *

* * * * * * *

ø(3)¿ (2) REQUIREMENTS.—A child meets the requirements of

this paragraph if—

(A) * * *

* * * * * * *

(D) the State in which such child attends school provides

funds for the education of such child on the same basis as

all other public school children in the State, unless otherwise permitted under øsection 5(d)(2) of the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such

section was in effect on the day preceding the date of enactment of the Improving America’s Schools Act of 1994)

or¿ section 8009(b) of this title; and

* * * * * * *

SEC. 8011. ADMINISTRATIVE HEARINGS AND JUDICIAL REVIEW.

(a) ADMINISTRATIVE HEARINGS.—A local educational agency and

a State that is adversely affected by any action of the Secretary

under this title or under the Act of September 30, 1950 (Public Law

874, 81st Congress) (as such Act was in effect on the day preceding

the date of enactment of the Improving America’s Schools Act of

1994) shall be entitled to a hearing on such action in the same

manner as if such agency were a person under chapter 5 of title

5, United States Code if the local educational agency or State, as

the case may be, submits to the Secretary a request for the hearing
58

not later than 60 days after the date of the action of the Secretary

under this title. (b) JUDICIAL REVIEW OF SECRETARIAL ACTION.— (1) IN GENERAL.—A local educational agency or a State aggrieved by the Secretary’s final decision following an agency

proceeding under subsection (a) may, within ø60 days¿ 30

working days (as determined by the local educational agency or

State) after receiving notice of such decision, file with the

United States court of appeals for the circuit in which such

agency or State is located a petition for review of that action.

The clerk of the court shall promptly transmit a copy of the petition to the Secretary. The Secretary shall then file in the

court the record of the proceedings on which the Secretary’s action was based, as provided in section 2112 of title 28, United

States Code.

* * * * * * *

SEC. 8013. DEFINITIONS.

For purposes of this title:

(1) * * *

* * * * * * *

(5) FEDERAL PROPERTY.— (A) IN GENERAL.—Except as provided in subparagraphs

(B) through (F), the term ‘‘Federal property’’ means real

property that is not subject to taxation by any State or any

political subdivision of a State due to Federal agreement,

law, or policy, and that is—

(i) * * *

* * * * * * *

(iii)(I) part of a low-rent housing project assisted

under the United States Housing Act of 1937; øor¿

* * * * * * *

(III) affordable housing assisted under the Native

American Housing Assistance and Self-Determination

Act of 1996; or

* * * * * * *

(13) MODERNIZATION.—The term ‘‘modernization’’ means repair, renovation, alteration, or construction, including—

(A) the concurrent installation of equipment; and

(B) the complete or partial replacement of an existing

school facility, but only if such replacement is less expensive and more cost-effective than repair, renovation, or alteration of the school facility.

SEC. 8014. AUTHORIZATION OF APPROPRIATIONS.

(a) PAYMENTS FOR FEDERAL ACQUISITION OF REAL PROPERTY.— For the purpose of making payments under section 8002, there are

authorized to be appropriated ø$16,750,000 for fiscal year 1995¿

$32,000,000 for fiscal year 2000 and such sums as may be necessary for each of the four succeeding fiscal years.

(b) BASIC PAYMENTS; PAYMENTS FOR HEAVILY IMPACTED LOCAL

EDUCATIONAL AGENCIES.—For the purpose of making payments

under øsubsections (b) and (f) of section 8003¿ section 8003(b),
59

there are authorized to be appropriated ø$775,000,000 for fiscal

year 1995¿ $809,400,000 for fiscal year 2000 and such sums as may

be necessary for each of the four succeeding fiscal yearsø, of which

6 percent shall be available, until expended, for each such fiscal

year to carry out section 8003(f)¿.

(c) PAYMENTS FOR CHILDREN WITH DISABILITIES.—For the purpose of making payments under section 8003(d), there are authorized to be appropriated ø$45,000,000 for fiscal year 1995¿

$50,000,000 for fiscal year 2000 and such sums as may be necessary for each of the four succeeding fiscal years.

ø(d) PAYMENTS FOR INCREASES IN MILITARY CHILDREN.—For the

purpose of making payments under section 8006, there are authorized to be appropriated $2,000,000 for fiscal year 1995 and such

sums as may be necessary for each of the four succeeding fiscal

years.¿

(e) CONSTRUCTION.—For the purpose of carrying out section 8007,

there are authorized to be appropriated ø$25,000,000 for fiscal year

1995¿ $10,052,000 for fiscal year 2000 and such sums as may be

necessary for each of the four succeeding fiscal years.

(f) FACILITIES MAINTENANCE.—For the purpose of carrying out

section 8008, there are authorized to be appropriated ø$2,000,000

for fiscal year 1995¿ $5,000,000 for fiscal year 2000 and such sums

as may be necessary for each of the four succeeding fiscal years.

(g) ADDITIONAL ASSISTANCE FOR CERTAIN øFEDERAL PROPERTY¿

LOCAL EDUCATIONAL AGENCIES IMPACTED BY FEDERAL PROPERTY

ACQUISITION.—For the purpose of carrying out section 8002(j) there

are authorized to be appropriated øsuch sums as are necessary beginning in fiscal year 1998 and for each succeeding fiscal year¿

$1,500,000 for fiscal year 2000 and such sums as may be necessary

for each of the four succeeding fiscal years.

* * * * * * *

SECTION 426 OF THE GENERAL EDUCATION

PROVISIONS ACT

PROHIBITION AGAINST USE OF APPROPRIATED FUNDS FOR BUSING

SEC. 426. No funds appropriated for the purpose of carrying out

any applicable program may be used for the transportation of students or teachers (or for the purchase of equipment for such transportation) in order to overcome racial imbalance in any school or

school system, or for the transportation of students or teachers (or

for the purchase of equipment for such transportation) in order to

carry out a plan of racial desegregation of any school or school system, except for funds appropriated pursuant to title VIII of the Elementary and Secondary Education Act of 1965, but not including

any portion of such funds as are attributable to children counted

under øsubsections (d) and (g) of section 8003 of such Act¿ section

8003(d) of such Act or residing on property described in section

8013(10) of such Act.
(60)

ADDITIONAL VIEWS

Presently, the current weight assigned to military off-base children is .10 and civilian dependent children is .05. These weights

are used to calculate the level of assistance provided to school districts. Under the Impact Aid Program, we feel these levels do not

adequately measure the financial impact these categories of children place on a federally impacted local educational agency. Impact

aid weights for military off-base children and civilian dependent

children should reflect what is at least close to what the actual impact of these children is on a school district.It is our hope that an

agreement can be reached in Conference that will increase the

weights assigned these two categories of children.

BILL CLAY.

DALE E. KILDEE.

BOBBY SCOTT.

Æ