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[House Report 106-504]
[From the U.S. Government Publishing Office]

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
          (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).
          ``(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 
Impacted 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 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 
                        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 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.''.

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 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 
                        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
                          ``(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)''.
    (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
                                  ``(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
                          ``(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.
                  ``(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.
    (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 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 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.
    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 agricultural 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.
    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 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 on-base 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 program, 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 eligibility, 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/
private 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 on-base 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 
off-base 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 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 
Committee 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 improves 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.''
    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.

  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 one-
year 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 appropriations 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.
    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 tax-exempt 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
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 funding 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 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 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 
initiative, 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 received 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
          [(5) experience sudden and substantial increases or 
        decreases in enrollments because of military 
        realignments; or]
          [(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, [1999] 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 [shall 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 [section 
        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.

           *       *       *       *       *       *       *

    [(h) Hold-Harmless Amounts.--
          [(1) In general.--Except as provided in paragraph 
        (2)(A), the total amount that the Secretary shall pay 
        under subsection (b) to a local educational agency that 
        is otherwise eligible for a payment under this 
        section--
                  [(A) for fiscal year 1995 shall not be less 
                than 85 percent of the amount such agency 
                received for fiscal year 1994 under section 2 
                of the Act of September 30, 1950 (Public Law 
                874, 81st Congress) as such section was in 
                effect on September 30, 1994;
                  [(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
                  [(C) for fiscal year 1997 and each succeeding 
                fiscal year through fiscal year 2000 shall not 
                be less than 85 percent of the amount such 
                agency received for fiscal year 1996 under 
                subsection (b).
          [(2) Ratable reductions.--(A)(i) If necessary in 
        order to make payments to local educational agencies in 
        accordance with paragraph (1) for any fiscal year, the 
        Secretary first shall ratably reduce payments under 
        subsection (b) for such year to local educational 
        agencies that do not receive a payment under this 
        subsection for such year.
          [(ii) If additional funds become available for making 
        payments under subsection (b) for such year, then 
        payments that were reduced under clause (i) shall be 
        increased on the same basis as such payments were 
        reduced.
          [(B)(i) If the sums made available under this title 
        for any fiscal year are insufficient to pay the full 
        amounts that all local educational agencies in all 
        States are eligible to receive under paragraph (1) 
        after the application of subparagraph (A) for such 
        year, then the Secretary shall ratably reduce payments 
        under paragraph (1) to all such agencies for such year.
          [(ii) If additional funds become available for making 
        payments under paragraph (1) for such fiscal year, then 
        payments that were reduced under clause (i) shall be 
        increased on the same basis as such payments were 
        reduced.]
    (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).
          (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) [Priority] Special Payments.--
          [(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--
                  [(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
                  [(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.--[(A) A local educational agency] A 
        local educational agency is eligible to receive 
        additional assistance under this subsection only if 
        such agency--
                  [(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;
                  [(ii)] (B) provided a free public education 
                to children described under sections 
                8003(a)(1)(A), (B), or (D);
                  [(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;
                  [(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
                  [(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 [subsection (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 [undergoing 
        renovation] undergoing renovation or rebuilding.--[For 
        purposes]
                  (A) In general.--For purposes of computing 
                the amount of a payment for a local educational 
                agency for children described in paragraph 
                (1)(D)(i), the Secretary shall consider such 
                children to be children described in paragraph 
                (1)(B) if the Secretary determines, on the 
                basis of a certification provided to the 
                Secretary by a designated representative of the 
                Secretary of Defense, that such children would 
                have resided in housing on Federal property in 
                accordance with paragraph (1)(B) except that 
                such housing was undergoing renovation 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 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 [subsection] 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 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 
                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).
                  (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 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 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
                          (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.
          [(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 
                [paragraph (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 [paragraph (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.
                  [(C)] (D) Ratable distribution.--For fiscal 
                years described in subparagraph (A), the 
                Secretary shall make payments as a ratable 
                distribution based upon the [computation made 
                under subparagraph (B)] computations made under 
                subparagraphs (B) and (C).
          [(3)] (4) States with only one local educational 
        agency.--
                  (A) In general.--In any of the 50 States of 
                the United States in which there is only one 
                local educational agency, the Secretary shall, 
                for purposes of [paragraphs (1)(B), (1)(C), and 
                (2) of this subsection] 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 
                support 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 
                [paragraph (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 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 [paragraph (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.

           *       *       *       *       *       *       *

    [(f) Additional Assistance for Heavily Impacted Local 
Educational Agencies.--
          [(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.
          [(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--
                  [(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
                  [(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;
                  [(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
                  [(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
                  [(iii) is a local educational agency whose 
                boundaries are the same as a Federal military 
                installation.
          [(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.
          [(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.
                  [(D) local educational agency shall only be 
                eligible to receive additional assistance under 
                this subsection if the Secretary determines 
                that--
                          [(i) such agency is exercising due 
                        diligence in availing itself of State 
                        and other financial assistance; and
                          [(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.
          [(3) Maximum payments.--
                  [(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:
                                  [(I) The average per-pupil 
                                expenditure of the State in 
                                which the local educational 
                                agency is located.
                                  [(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.
                                  [(III) The average per-pupil 
                                expenditure of three generally 
                                comparable local educational 
                                agencies located in the State 
                                of the local educational 
                                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.
                          [(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.
                          [(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--
                                  [(I) under this Act; or
                                  [(II) by any department or 
                                agency of the Federal 
                                Government (other than the 
                                Department) that are used for 
                                capital expenses.
                          [(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--
                                  [(I) the average tax rate of 
                                its generally comparable local 
                                educational agencies; or
                                  [(II) the average tax rate of 
                                all the local educational 
                                agencies in the State in which 
                                the local educational agency is 
                                located.
                          [(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.
                  [(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--
                          [(i) the product of--
                                  [(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 per-
                                pupil expenditure in all local 
                                educational agencies in the 
                                State; multiplied by
                                  [(II) the number of students 
                                described in subparagraph (A) 
                                or (B) of subsection (a)(1) for 
                                such agency; minus
                          [(ii) the amount of payments such 
                        agency receives under subsections (b) 
                        and (d) for such year.
                  [(C) Determination of available funds.--When 
                determining the amount of funds available to 
                the local educational agency for current 
                expenditures for purposes of subparagraph 
                (A)(iii) for a fiscal year, the Secretary shall 
                include, with respect to the local educational 
                agency's opening cash balance for such fiscal 
                year, the portion of such balance that is the 
                greater of--
                          [(i) the amount that exceeds the 
                        maximum amount of funds for current 
                        expenditures that the local educational 
                        agency was allowed by State law to 
                        carry over from the prior fiscal year, 
                        if State restrictions on such amounts 
                        were applied uniformly to all local 
                        educational agencies in the State; or
                          [(ii) the amount that exceeds 30 
                        percent of the local educational 
                        agency's operating costs for the prior 
                        fiscal year.
          [(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.
          [(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.
    [(g) Additional Payments for Local Educational Agencies 
With High Concentrations of Children With Severe 
Disabilities.--
          [(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.
          [(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.
          [(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.
          [(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.]
    [(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.
    [(i)] (g) Maintenance of Effort.--A local educational 
agency may receive funds under [sections 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.
          [(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 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. 8006. PAYMENTS FOR SUDDEN AND SUBSTANTIAL INCREASES IN ATTENDANCE 
                    OF MILITARY DEPENDENTS.

    [(a) Eligibility.--A local educational agency is eligible 
for a payment under this section if--
          [(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
          [(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.
    [(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.
    [(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--
          [(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
          [(2) the number of children described in subsection 
        (a)(2).
    [(d) Payments.--
          [(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.
          [(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 
        Secretary shall ratably reduce the payments to such 
        agencies for such year.
          [(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.
    [(e) Notification Process.--
          [(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.
          [(2) Information.--Such process shall provide timely 
        information regarding such closures and such 
        adjustments--
                  [(A) by the Secretary of Defense to the 
                Secretary; and
                  [(B) by the Secretary to the affected local 
                educational agencies.

[SEC. 8007. CONSTRUCTION.

    [(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--
          [(1) that receives a basic payment under section 
        8003(b); and
          [(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;
          [(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;
          [(C) that receives assistance under section 8003(f); 
        or
          [(D) that receives assistance under section 8006.
    [(b) Amount of Payments.--The amount of a payment to each 
such agency for a fiscal year shall be equal to--
          [(1) the amount appropriated under section 8014(e) 
        for such year; divided by
          [(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
          [(3) the number of such children determined for such 
        agency.
    [(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).]

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.
          (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.
                  (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).

           *       *       *       *       *       *       *

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.--
          [(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.]
          [(2)] (1) Certain children eligible under 
        subparagraphs (a) and (g)(ii) of section 8003(a)(1).--
        (A)  * * *

           *       *       *       *       *       *       *

          [(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 [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] 
                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 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 [60 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; [or]

           *       *       *       *       *       *       *

                          (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 [$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 
[subsections (b) and (f) of section 8003] section 8003(b), 
there are authorized to be appropriated [$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 
years[, 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 [$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.
    [(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 [$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 
[$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 [Federal Property] 
Local Educational Agencies Impacted by Federal Property 
Acquisition.--For the purpose of carrying out section 8002(j) 
there are authorized to be appropriated [such 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 
[subsections (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.

                            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.

                                

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