Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Rules and Regulations 33157 

(c) Sections of the OMB guidance that 

this part does not supplement. For any 

section of OMB guidance in subparts A 

through F of 2 CFR part 182 that is not 

listed in paragraph (b) of this section, 

the NEA’s policies and procedures are 

the same as those in the OMB guidance. 

Subpart A—[Reserved] 

Subpart B—Requirements for 

Recipients Other Than Individuals 

§ 3256.200 Whom in the NEA does a 

recipient other than an individual notify 

about a criminal drug conviction? 

A recipient other than an individual 

that is required under 2 CFR 182.225(a) 

to notify Federal agencies about an 

employee’s conviction for a criminal 

drug offense must notify the NEA 

awarding official or other designee for 

each award that it currently has. 

Subpart C—Requirements for 

Recipients Who Are Individuals 

§ 3256.300 Whom in the NEA does a 

recipient who is an individual notify about 

a criminal drug conviction? 

A recipient who is an individual and 

is required under 2 CFR 182.300(b) to 

notify Federal agencies about a 

conviction for a criminal drug offense 

must notify the NEA awarding official 

or other designee for each award that he 

or she currently has. 

Subpart D—Responsibilities of NEA 

Awarding Officials 

§ 3256.400 What method do I use as an 

agency awarding official to obtain a 

recipient’s agreement to comply with the 

OMB guidance? 

To obtain a recipient’s agreement to 

comply with applicable requirements in 

the OMB guidance at 2 CFR part 182, 

you must include the following term or 

condition in the award: Drug-free 

workplace. You as the recipient must 

comply with drug-free workplace 

requirements in subpart B (or subpart C, 

if the recipient is an individual) of this 

part, which adopts the Governmentwide 

implementation (2 CFR part 182) of sec. 

5152–5158 of the Drug-Free Workplace 

Act of 1988 (Pub. L. 100–690, Title V, 

Subtitle D; 41 U.S.C. 701–707). 

Subpart E—Violations of This Part and 

Consequences 

§ 3256.500 Who in the NEA determines 

that a recipient other than an individual 

violated the requirements of this part? 

The Chairman of the National 

Endowment for the Arts is the official 

authorized to make the determination 

under 2 CFR 182.500. 

§ 3256.505 Who in the NEA determines 

that a recipient who is an individual violated 

the requirements of this part? 

The Chairman of the National 

Endowment for the Arts is the official 

authorized to make the determination 

under 2 CFR 182.505. 

Subpart F—[Reserved] 

Title 45—Public Welfare 

PART 1155—[REMOVED] 

■ 2. Under the authority of 20 U.S.C. 

959(a)(1), part 1155 is removed. 

Kathy N. Daum, 

Director, Office of Administrative Services. 

[FR Doc. 2015–14163 Filed 6–10–15; 8:45 am] 

BILLING CODE 7537–01–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Chapter IX 

[Docket No. FR–5650–N–10] 

Native American Housing Assistance 

and Self-Determination Act of 1996: 

Negotiated Rulemaking Committee; 

Notice of Seventh Meeting; Correction 

AGENCY: Office of the General Counsel, 

HUD. 

ACTION: Notice of meetings of negotiated 

rulemaking committee; Correction. 

SUMMARY: On May 26, 2015, HUD 

published a notice in the Federal 

Register announcing the seventh 

meeting of the Indian Housing Block 

Grant (IHBG) program negotiated 

rulemaking committee. The notice 

advised the public that the seventh 

meeting of the IHBG negotiated 

rulemaking committee will be held on 

Tuesday, August 11, 2015, Wednesday, 

August 12, 2015, and Thursday, August 

13, 2015. The published notice 

incorrectly listed the location for the 

meeting. This document corrects the 

address and location for the meeting. 

FOR FURTHER INFORMATION CONTACT: 

Rodger J. Boyd, Deputy Assistant 

Secretary for Native American 

Programs, Office of Public and Indian 

Housing, Department of Housing and 

Urban Development, 451 Seventh Street 

SW., Room 4126, Washington, DC 

20410, telephone number 202–401–7914 

(this is not a toll-free number). Hearingor speech-impaired individuals may 

access this number via TTY by calling 

the toll-free Federal Relay Service at 1– 

800–877–8339. 

Corrections 

In the Federal Register of May 26, 

2015, in FR Doc. 2015–12648, please 

make the following corrections: 

1. On page 30004, in the third 

column, correct the ADDRESSES section 

to read as follows: 

ADDRESSES: The meeting will take place 

at the DoubleTree-Scottsdale, 5401 

North Scottsdale Road, Scottsdale, 

Arizona 85250–7090. 

2. On page 30005, in the second 

column, correct the first paragraph 

under Section II to read as follows: 

II. Seventh Committee Meeting 

The seventh meeting of the IHBG 

Formula Negotiation Rulemaking 

Committee will be held on Tuesday, 

August 11, 2015, Wednesday, August 

12, 2015, and Thursday, August 13, 

2015. On each day, the session will 

begin at approximately 8:30 a.m., and 

adjourn at approximately 5:30 p.m. The 

meeting will take place at the 

DoubleTree-Scottsdale, 5401 North 

Scottsdale Road, Scottsdale, Arizona. 

Dated: June 8, 2015. 

Aaron Santa Anna, 

Assistant General Counsel for Regulations. 

[FR Doc. 2015–14324 Filed 6–10–15; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF EDUCATION 

34 CFR Part 222 

RIN 1810–AB21 

Impact Aid Program 

AGENCY: Office of Elementary and 

Secondary Education, Department of 

Education 

ACTION: Final regulations. 

SUMMARY: The Secretary amends the 

Impact Aid Program regulations to 

reflect changes made to title VIII of the 

Elementary and Secondary Education 

Act of 1965 (ESEA or Act), as amended 

by various statutes, to delete obsolete 

provisions, to correct technical errors, 

and to incorporate relevant statutory 

and regulatory changes from the 

Individuals with Disabilities Education 

Act (IDEA) and its implementing 

regulations. The Secretary makes minor 

technical, clarifying, and streamlining 

changes for the reader’s convenience, 

including reordering the regulations that 

implement the section of the Act 

regarding local contribution rates that 

are based on generally comparable local 

educational agencies (LEAs). 

DATES: These regulations are effective 

June 11, 2015. 


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33158 Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Rules and Regulations 

FOR FURTHER INFORMATION CONTACT: 

Kristen Walls-Rivas, U.S. Department of 

Education, 400 Maryland Avenue SW., 

Room 3C155, Washington, DC 20202– 

6244. Telephone: (202) 260–3858 or by 

email: Impact.Aid@ed.gov. 

If you use a telecommunications 

device for the deaf (TDD) or a text 

telephone (TTY), call the Federal Relay 

Service (FRS), toll free, at 1–800–877– 

8339. 

Individuals with disabilities may 

obtain this document in an alternative 

format (e.g., braille, large print, 

audiotape, or compact disc) on request 

to the contact person listed under FOR

FURTHER INFORMATION CONTACT. 

SUPPLEMENTARY INFORMATION: These 

final regulations make technical changes 

to the existing regulations for the Impact 

Aid Program in 34 CFR part 222. The 

existing regulations contain technical 

errors and language that is inconsistent 

with other regulations and with the 

current provisions of the Impact Aid 

statute (title VIII of the ESEA) and 

statutory and regulatory provisions of 

parts B and C of the IDEA. The Impact 

Aid statute has been amended by a 

number of laws in recent years, 

including, for purposes of these 

regulations: 

• The National Defense Authorization 

Act for Fiscal Year 2013 (Pub. L. 112– 

239); 

• The 2002 Supplemental 

Appropriations Act (Pub. L. 107–206); 

• The No Child Left Behind Act of 

2001 (Pub. L. 107–110); 

• The Department of Education 

Appropriations Act, 2001 (Pub. L. 106– 

554); and 

• The Impact Aid Reauthorization 

Act of 2000 (Pub. L. 106–398). 

These final regulations make 

technical corrections, align the 

regulations with statutory changes made 

to the program and to relevant statutory 

and regulatory changes related to the 

IDEA, delete obsolete provisions, and 

streamline the regulations. There are 

also recent statutory changes that will 

require public comment in order to 

make changes to the regulations. These 

substantive changes are not included in 

this notice. We will seek public 

comment on them in a notice of 

proposed rulemaking that we intend to 

publish at a later date. 

In implementing the Impact Aid 

Program, the Secretary generally issues 

regulations only where absolutely 

necessary or to provide increased 

flexibility or reduce burden. We discuss 

the major technical changes made by 

these regulations under the sections of 

the regulations to which they pertain. 

We do not discuss minor technical 

changes. 

Subpart A—General 

• Revising § 222.2 to reflect that the 

definition of ‘‘modernization’’ in section 

8013 of the Act is applicable to this part. 

• Revising §§ 222.3 and 222.5 to 

reflect a change to the ESEA requiring 

that we use preceding-year data in 

calculating payments under section 

8002 of the Act, which means that 

applications for sections 8002 and 8003 

payments are based on the same year’s 

data. 

• Revising § 222.4 to remove outdated 

references to the submission of 

applications via U.S. mail. 

• Revising § 222.6 to conform to the 

requirement in section 8005 of the ESEA 

that we give written notice to an 

applicant following the applicant’s 

failure to comply with the applicable 

filing deadline. 

• Revising §§ 222.12 and 222.13, 

concerning overpayment forgiveness, to 

remove references to obsolete statutory 

provisions and deadlines since 

overpayments under those provisions 

no longer exist. 

• Revising § 222.19 to update the list 

of statutes and regulations that apply to 

the program. 

Subpart B—Payments for Federal 

Property Under Section 8002 of the Act 

• Revising § 222.22 to conform to 

statutory changes to section 8002 of the 

Act concerning compensation that LEAs 

receive from Federal activities on 

eligible Federal property. 

• Despite the fact that § 222.23 is 

currently superseded by statutory 

changes to section 8002 of the Act, we 

are not removing or revising § 222.23 

because those statutory provisions are 

scheduled to expire. 

Subpart C—Payments for Federally 

Connected Children Under Section 

8003(b) of the Act 

• Revising § 222.33 to indicate that an 

LEA makes its membership count before 

the deadline date upon which Impact 

Aid applications are due, rather than no 

later than that date. 

• Revising § 222.35(a)(2) to refer to an 

‘‘unsigned’’ parent-pupil survey form. 

• In § 222.36, amending paragraphs 

(a) and (b) to reflect a statutory change 

related to application data submitted by 

newly established LEAs, and removing 

paragraph (d) as obsolete. 

• In § 222.38, updating the statutory 

references in the heading and paragraph 

(a) to conform to current statutory 

designations and renumbering the 

provisions of the section. In addition, 

we add as new paragraph (b) provisions 

that incorporate the statutory 

requirement that we use data from the 

most recent fiscal year for which 

satisfactory data are available for local 

contribution rates based on one-half of 

the State average or one-half of the 

national average if satisfactory 

expenditure data from the third 

preceding fiscal year are not available. 

• Reorganizing the local contribution 

rate regulations currently in §§ 222.39 

through 222.41 of subpart C to 

streamline those provisions, remove 

redundancies, and reflect current law 

and procedures. In recent fiscal years, 

approximately 15 State educational 

agencies (SEAs) have opted to use these 

provisions. Fourteen of these SEAs used 

the provision in § 222.39 and only one 

SEA used the additional factor 

provisions in current § 222.39(c). For 

that reason we have reorganized the 

sections to keep the basic generally 

comparable regulations under § 222.39 

and move the more specific provisions 

relating to the use of additional factors 

to § 222.40. The substance of these 

provisions has not changed; in 

accordance with section 

8003(b)(1)(C)(iii) of the Act, the methods 

that SEAs use to determine generally 

comparable local contribution rates 

remain unchanged from the regulations 

in effect on January 1, 1994. 

Paragraphs (a) and (b) of § 222.39 

describe the method SEAs use to 

identify generally comparable LEAs for 

determining local contribution rates, 

through grouping by grade span/legal 

classification, size, and location. The 

current provisions in § 222.40 and the 

examples also refer to grouping by grade 

span/legal classification, size, and 

location for determining local 

contribution rates; we move these 

provisions to § 222.39 in order to 

eliminate redundancy and streamline 

the provisions. We remove the 

remaining provisions in current 

§ 222.40, and in the example that 

follows the section, as they are 

redundant. 

The provisions in new § 222.40, 

moved from current § 222.39(c), 

describe the circumstances and 

procedures for using additional factors 

to identify a subgroup of generally 

comparable LEAs, for the limited 

number of LEAs that qualify for this 

option. The examples from current 

§ 222.39(c) are retained, with the 

exception of one example removed for 

redundancy. Paragraph (e) of new 

§ 222.40 contains the provisions of 

current § 222.39(c)(4), with the 

clarification that the SEA certifies the 

local contribution rate data by 

submitting that data to the Secretary, in 

accordance with the current text of 

section 8003(b)(1)(c)(iii) of the Act. 


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• Revising § 222.41 to add a reference 

to new § 222.40 and to add clarifying 

language regarding the certification of 

data by the SEA. 

• Reserving § 222.42 for further 

provisions regarding local contribution 

rates. 

• Moving to new § 222.43 the content 

of current §§ 222.63 and 222.64 (from 

subpart E). These provisions implement 

the authority in section 8003(b)(1)(F) of 

the ESEA regarding increases in the 

local contribution rate of an LEA that is 

unable to provide an equivalent level of 

education due to higher current 

expenditures caused by unusual 

geographic factors. Previously, this type 

of assistance was grouped as one type of 

heavily impacted district assistance. 

Although the Act does not currently 

treat this assistance as heavily impacted 

district funding, the substantive 

requirements for the statutory provision 

remain unchanged. Paragraph (a)(1)–(3) 

of new § 222.43 contains the 

information currently in § 222.63(a)–(c), 

updated to reflect statutory changes. 

Paragraph (a)(4) of new § 222.43 

contains the provisions of current 

§ 222.63(d), specifically that if an LEA is 

in a State authorized by the Department 

to take into account Impact Aid under 

section 8009 of the Act, then it is not 

eligible to use the ‘‘unusual geographic’’ 

provision. Paragraph (b) of new § 222.43 

contains the contents of current 

§ 222.64(b), with clarifying changes. We 

remove current § 222.64(a) as it is 

already covered by the provisions in 

§ 222.43. 

• Moving to new § 222.44 the 

provisions currently found in § 222.73 

related to the calculation of maximum 

payments for eligible LEAs under 

section 8003(b)(1)(F) of the ESEA. We 

remove § 222.73(c) in accordance with 

statutory changes. We also update 

statutory and regulatory references, and 

make minor clarifying changes; 

however, we do not change the content 

of these provisions. 

Subpart D—Payments Under Section 

8003(d) of the Act for Local Educational 

Agencies That Serve Children With 

Disabilities 

• Revising this subpart to incorporate 

amendments that have been made to 

parts B and C of the IDEA, through the 

2004 statutory changes to IDEA, the 

2006 IDEA part B final regulations 

codified in 34 CFR part 300, and the 

2011 IDEA part C final regulations 

codified in 34 CFR part 303. 

• Revising § 222.50 (definitions) by 

removing the previous definitions of the 

following terms and replacing them 

with cross-references to the definitions 

of those terms in the IDEA regulations: 

Free appropriate public education or 

FAPE, individualized education 

program or IEP, related services, and 

special education. In addition, we add 

the following relevant new terms with 

cross-references to their definitions in 

the applicable IDEA regulations: Child 

with a disability, early intervention 

services, individualized family service 

plan or IFSP, and infants, toddlers, and 

children with disabilities. We use the 

term ‘‘infants, toddlers, and children 

with disabilities’’ to refer to both 

‘‘infants and toddlers with disabilities’’ 

who are eligible to receive early 

intervention services under part C of the 

IDEA and ‘‘children with disabilities’’ 

who are eligible to receive special 

education and related services under 

part B of the IDEA. Combined, these are 

all children who are eligible to receive 

services under the IDEA for purposes of 

the Impact Aid statute (20 U.S.C. 

7703(d)(1)(A)) and we refer to them in 

these regulations as ‘‘infants, toddlers, 

and children with disabilities.’’ We 

remove the definition of ‘‘preschool’’ as 

it is unnecessary due to Impact Aid 

provisions that permit districts to claim 

preschool-age students regardless of 

whether their education is part of 

elementary education under State law, 

and to avoid any confusion with respect 

to the provisions in section 619 and part 

C of the IDEA regarding preschool 

children. We remove the definition of 

‘‘children with specific learning 

disabilities’’ because that term is already 

encompassed in the definition of 

‘‘children with disabilities’’ under part 

B of the IDEA. We remove the definition 

of ‘‘intermediate educational unit’’ 

because it has been subsumed in the 

IDEA definition of LEA in 34 CFR 

303.28. 

• Revising § 222.51(a) and (b) and 

adding § 222.51(c), to clarify the existing 

requirement, from the Impact Aid 

statute in 20 U.S.C. 7703(d)(1), that 

LEAs providing a free appropriate 

public education or early intervention 

services to infants, toddlers, and 

children with disabilities under Parts B 

and C of the IDEA may count for Impact 

Aid payment purposes only certain of 

those children who are federally 

connected and eligible to receive 

services under the IDEA. Under the 

Impact Aid statute and the IDEA, in 

order to count those infants, toddlers, 

and children with disabilities, the LEA 

must provide free appropriate public 

education or early intervention services 

(whichever is applicable) either directly 

or through an arrangement with another 

entity at no cost to the children’s 

parents, and each child being counted 

must have in place an IEP or IFSP (as 

appropriate). 

• Revising §§ 222.52, 222.53, 222.54, 

and 222.55 to reflect revisions to part C 

of the IDEA by including a reference to 

early intervention services. We also 

revise § 222.53 to improve its readability 

and consistency with IDEA statutory 

provisions regarding prior approval if 

funds are used for construction. 

Subpart E—Payments for Heavily 

Impacted Local Educational Agencies 

Under Section 8003(b)(2) of the Act 

• Removing subpart E in its entirety 

and replacing it with a new subpart E, 

consisting of a new heading and new 

§§ 222.60 through 222.79. The new 

subpart E, which governs payments to 

certain heavily impacted LEAs, reflects 

statutory changes to section 8003(b)(2) 

of the ESEA. We explain the statutory 

changes and implementing regulatory 

provisions by regulatory section number 

below. 

• New § 222.60 reflects the statutory 

change that payments to heavily 

impacted districts are no longer 

supplemental to other Impact Aid 

payments under section 8003(b). 

• New § 222.61 reflects changes to 

statutory requirements for data used to 

determine eligibility of heavily 

impacted LEAs. This section includes 

language clarifying that the tax rate 

requirement for these LEAs may be met 

by having a tax rate that is at least 95 

percent of the average tax rate of either 

comparable LEAs as identified in 

§ 222.74 or all LEAs in the State, 

pursuant to section 8003(b)(2)(G) of the 

Act. 

• New § 222.62 reflects changes to the 

criteria in section 8003(b)(2) of the Act 

that an LEA must meet to be considered 

an eligible ‘‘continuing’’ heavily 

impacted LEA, and the criteria that an 

LEA must meet to be considered an 

eligible ‘‘new’’ heavily impacted LEA. 

An LEA that applies and satisfies the 

eligibility requirements for two 

consecutive fiscal years is considered a 

‘‘new’’ heavily impacted LEA. Section 

222.62(b) reflects the statutory 

requirement that such an LEA would 

not receive its first payment as a ‘‘new’’ 

heavily impacted LEA until the second 

year of application eligibility. 

• New § 222.63 describes the primary 

statutory categories of a ‘‘continuing’’ 

heavily impacted LEA. An LEA that 

applies and satisfies the eligibility 

requirement of one of the primary 

statutory categories and that also 

received a heavily impacted payment 

for fiscal year 2000 under section 

8003(f) of the ESEA is considered a 

‘‘continuing’’ heavily impacted LEA. 


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33160 Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Rules and Regulations 

• New § 222.64 describes the 

statutory categories of a ‘‘new’’ heavily 

impacted LEA. These categories are 

similar to those described in new 

§ 222.63. There is one significant 

difference in the per pupil expenditure 

(PPE) requirement for a ‘‘new’’ heavily 

impacted LEA that has a total 

enrollment of 350 or more. Those LEAs 

do not have the option of satisfying the 

PPE requirement by using the average 

PPE of all the States. Instead, they can 

only satisfy this requirement by using 

the average PPE of all the LEAs within 

their State. The tax rate requirement for 

these LEAs may be met by having a tax 

rate that is at least 95 percent of the 

average tax rate of either comparable 

LEAs as identified in § 222.74 or all 

LEAs in the State, pursuant to section 

8003(b)(2)(G) of the ESEA. For an LEA 

that has a total enrollment of less than 

350, the PPE and tax rate are based on 

one or three comparable LEAs.] 

• New § 222.65 connects the new 

statutory requirements for heavily 

impacted LEAs with current regulatory 

provisions for calculating tax rates for 

those LEAs. 

• New § 222.66 reflects the statutory 

provisions regarding loss of and 

resumption of eligibility for section 

8003(b)(2) payments. In the year that 

either a ‘‘continuing’’ or ‘‘new’’ heavily 

impacted LEA loses its eligibility for a 

payment under section 8003(b)(2), it 

will still receive a section 8002(b)(2) 

payment for that year (commonly 

known as a ‘‘hold harmless’’ payment). 

However, the payment for the year of 

ineligibility will be based on the 

number of children in average daily 

attendance (ADA) that would be 

counted for that application if the LEA 

were eligible. 

For resumption of eligibility, a 

‘‘continuing’’ heavily impacted LEA 

must apply and be eligible for two 

consecutive years in order to receive 

another section 8003(b)(2) payment. In 

contrast, a ‘‘new’’ heavily impacted LEA 

must only apply and be eligible for the 

year of application to receive another 

section 8003(b)(2) payment. The 

examples and charts are provided for 

additional clarity as to the statutory 

requirements. 

• New § 222.67 contains the 

provisions of current § 222.65 with 

updated statutory references, and 

reflects the statutory change that 

payments to heavily impacted districts 

are no longer supplemental to other 

Impact Aid payments under section 

8003(b) of the Act. The revision also 

clarifies that in cases where certain 

States are certified by the Department to 

take into account Impact Aid payments, 

the State is still forbidden from taking 

into account the amount of Impact Aid 

that is due to a district’s heavily 

impacted status. There is no substantive 

change to these provisions. 

• New §§ 222.68–222.73 contain the 

provisions of current §§ 222.66 through 

222.71, revised to reflect statutory 

changes to the eligibility requirements 

for heavily impacted districts in section 

8003(b)(2)(B) and (C) of the Act, to make 

clarity changes, and to conform 

references to the other new regulatory 

sections of subpart E. 

• Section 222.74 is revised to reflect 

new statutory requirements for the 

selection of one or three generally 

comparable LEAs for certain LEAs in 

section 8003(b)(2) of the ESEA and to 

update the statutory and regulatory 

citations. 

• Section 222.75 is revised to reflect 

the new statutory provisions in section 

8003(b)(2) of the ESEA that require the 

Department to use data from the third 

preceding fiscal year, and that limit the 

type of applicants for which we 

calculate the PPE of generally 

comparable school districts to only 

those districts described in new 

§ 222.64(a)(2)(ii), that is, ‘‘new’’ districts 

with less than 350 ADA. 

• Section 222.76, which pertains to 

ratable reduction of payments for years 

when insufficient funds are 

appropriated to make full payments 

under the Act, is removed because 

section 8003(b)(3) of the Act now 

contains detailed provisions for years in 

which insufficient funds are 

appropriated and applies to all 

payments, including those for heavily 

impacted districts, making this 

provision unnecessary. 

Subpart F—Payments to Local 

Educational Agencies for Children With 

Severe Disabilities Under Section 

8003(g) of the Act 

• Removing and reserving subpart F 

due to the repeal of the statutory 

authority. 

Subpart J—Impact Aid Administrative 

Hearings and Judicial Review Under 

Section 8011 of the Act 

• Revising § 222.151 to remove an 

obsolete statutory reference and 

incorporate a statutory change 

lengthening the time period for filing a 

written request for an administrative 

hearing from 30 to 60 days. 

• Revising § 222.152 to remove 

obsolete statutory references. 

• Revising § 222.153 to update the 

addresses to which applicants must 

mail or deliver those administrative 

hearing requests. We also add an option 

for emailing the requests and note our 

recommendation that applicants elect 

mail or email delivery. 

• Revising § 222.159 to reflect the 

statutory change that an applicant has 

30 working days to seek judicial review 

following an administrative hearing 

determination. 

Subpart K—Determinations Under 

Section 8009 of the Act 

• Revising §§ 222.161 and 222.163 to 

conform to a statutory change in section 

8009(b)(1) of the Act that eliminated 

obsolete references to payments under 

the former Impact Aid law, Public Law 

81–874. We also revise § 222.161(a) to 

reflect changes in section 8009(b)(1) of 

the Act relating to heavily impacted 

districts, and to delete a reference to a 

repealed provision regarding LEAs with 

high concentrations of children with 

severe disabilities. 

• Revising § 222.165 to incorporate a 

statutory change lengthening the time 

period for filing a written request for an 

administrative hearing from 30 to 60 

days. 

Executive Order 12866 

Regulatory Impact Analysis 

Under Executive Order 12866, the 

Secretary must determine whether this 

regulatory action is ‘‘significant’’ and, 

therefore, subject to the requirements of 

the Executive order and subject to 

review by the Office of Management and 

Budget (OMB). Section 3(f) of Executive 

Order 12866 defines a ‘‘significant 

regulatory action’’ as an action likely to 

result in a rule that may— 

(1) Have an annual effect on the 

economy of $100 million or more, or 

adversely affect a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities in a material way (also 

referred to as an ‘‘economically 

significant’’ rule); 

(2) Create serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

(4) Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

stated in the Executive order. 

This final regulatory action is not a 

significant regulatory action subject to 

review by OMB under section 3(f) of 

Executive Order 12866. 

We have also reviewed these 

regulations under Executive Order 

13563, which supplements and 

explicitly reaffirms the principles, 


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Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Rules and Regulations 33161 

structures, and definitions governing 

regulatory review established in 

Executive Order 12866. To the extent 

permitted by law, Executive Order 

13563 requires that an agency— 

(1) Propose or adopt regulations only 

on a reasoned determination that their 

benefits justify their costs (recognizing 

that some benefits and costs are difficult 

to quantify); 

(2) Tailor its regulations to impose the 

least burden on society, consistent with 

obtaining regulatory objectives and 

taking into account—among other things 

and to the extent practicable—the costs 

of cumulative regulations; 

(3) In choosing among alternative 

regulatory approaches, select those 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity); 

(4) To the extent feasible, specify 

performance objectives, rather than the 

behavior or manner of compliance a 

regulated entity must adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including economic incentives—such as 

user fees or marketable permits—to 

encourage the desired behavior, or 

provide information that enables the 

public to make choices. 

Executive Order 13563 also requires 

an agency ‘‘to use the best available 

techniques to quantify anticipated 

present and future benefits and costs as 

accurately as possible.’’ The Office of 

Information and Regulatory Affairs of 

OMB has emphasized that these 

techniques may include ‘‘identifying 

changing future compliance costs that 

might result from technological 

innovation or anticipated behavioral 

changes.’’ 

We are issuing these final regulations 

only on a reasoned determination that 

their benefits justify their costs. In 

choosing among alternative regulatory 

approaches, we selected those 

approaches that maximize net benefits. 

Based on the analysis that follows, the 

Department believes that these final 

regulations are consistent with the 

principles in Executive Order 13563. 

We also have determined that this 

regulatory action does not unduly 

interfere with State, local, and tribal 

governments in the exercise of their 

governmental functions. 

In accordance with both Executive 

orders, the Department has assessed the 

potential costs and benefits, both 

quantitative and qualitative, of this 

regulatory action. The potential costs 

associated with this regulatory action 

are those resulting from statutory 

requirements. 

Upon review of the costs to LEAs, we 

have determined there is no financial or 

resource burden associated with these 

changes. The LEAs will benefit from an 

updated and streamlined regulation that 

will facilitate a better understanding of 

the program requirements. 

Waiver of Proposed Rulemaking 

Under the Administrative Procedure 

Act (5 U.S.C. 553), the Department 

generally offers interested parties the 

opportunity to comment on proposed 

regulations. However, these final 

regulations merely reflect changes made 

to title VIII of the ESEA and to the IDEA 

and its implementing regulations, as 

well as technical corrections and 

clarifications to delete obsolete 

provisions, correct technical errors, and 

streamline the Impact Aid Program 

regulations for the reader’s convenience. 

These corrections and clarifications do 

not affect the substantive rights or 

obligations of individuals or institutions 

and do not establish or affect 

substantive policy. Thus, under 5 U.S.C. 

553(b)(B), the Secretary has determined 

that proposed regulations are 

unnecessary. 

Regulatory Flexibility Act Certification 

The Secretary certifies that these 

regulations will not have a significant 

economic impact on a substantial 

number of small entities. The small 

entities that are affected by these 

regulations are small LEAs receiving 

Federal funds under this program. 

These regulations contain technical 

corrections to current regulations. The 

changes will not have a significant 

economic impact on any of the entities 

affected because the regulations do not 

impose excessive burdens or require 

unnecessary Federal supervision. 

Paperwork Reduction Act of 1995 

The Paperwork Reduction Act of 1995 

does not require you to respond to a 

collection of information unless it 

displays a valid OMB control number. 

We display the valid OMB control 

number assigned to the collection of 

information in these final regulations at 

the end of the affected sections of the 

regulations. 

Intergovernmental Review 

This program is not subject to 

Executive Order 12372 and the 

regulations in 34 CFR part 79. 

Accessible Format: Individuals with 

disabilities can obtain this document in 

an accessible format (e.g., braille, large 

print, audiotape, or compact disc) on 

request to the program contact person 

listed under FOR FURTHER INFORMATION

CONTACT. 

Electronic Access to This Document: 

The official version of this document is 

the document published in the Federal 

Register. Free Internet access to the 

official edition of the Federal Register 

and the Code of Federal Regulations is 

available via the Federal Digital System 

at: www.gpo.gov/fdsys. At this site you 

can view this document, as well as all 

other documents of this Department 

published in the Federal Register, in 

text or Adobe Portable Document 

Format (PDF). To use PDF you must 

have Adobe Acrobat Reader, which is 

available free at the site. 

You may also access documents of the 

Department published in the Federal 

Register by using the article search 

feature at: www.federalregister.gov. 

Specifically, through the advanced 

search feature at this site, you can limit 

your search to documents published by 

the Department. (Catalog of Federal 

Domestic Assistance Number 84.041) 

List of Subjects in 34 CFR Part 222 

Education, Education of children with 

disabilities, Elementary and secondary 

education, Federally affected areas, 

Grant programs—education, Indians— 

education, Public housing, Reports and 

recordkeeping requirements, School 

construction. 

Dated: June 5, 2015. 

Deborah Delisle, 

Assistant Secretary for Elementary and 

Secondary Education. 

For the reasons discussed in the 

preamble, the Secretary amends part 

222 of title 34 of the Code of Federal 

Regulations as follows: 

PART 222—IMPACT AID PROGRAM 

■ 1–2. The authority citation for part 

222 continues to read as follows: 

Authority: 20 U.S.C. 7701–7714, unless 

otherwise noted. 

■ 3. Section 222.2 is amended by: 

■ A. In paragraph (a)(1), adding the term 

‘‘modernization’’ in alphabetical order. 

■ B. In paragraph (b) introductory text, 

removing the phrase ‘‘section 14101’’ 

and adding, in its place, the phrase 

‘‘section 9101’’. 

■ C. Revising the first sentence of the 

definition of ‘‘applicant’’ and the 

definition of ‘‘federally connected 

children’’ in paragraph (c). 

The revisions read as follows: 

§ 222.2 What definitions apply to this part? 

* * * * * 

(c) * * * 

Applicant means any LEA that files 

an application for financial assistance 

under section 8002 or section 8003 of 


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the Act and the regulations in this part 

implementing those provisions. * * * 

* * * * * 

Federally connected children means 

children described in section 8003 or 

section 8010(c)(2) of the Act. 

(Authority: 20 U.S.C. 7703(a)(1) and 7710(c); 

37 U.S.C. 101) 

* * * * * 

■ 4. Section 222.3 is amended by 

revising paragraphs (a) introductory 

text, (a)(1), (b)(2), and (c)(1)(i) to read as 

follows: 

§ 222.3 How does a local educational 

agency apply for assistance under section 

8002 or section 8003 of the Act? 

* * * * * 

(a) Except as provided in paragraphs 

(b) and (d) of this section, on or before 

January 31 of the fiscal year preceding 

the fiscal year for which the LEA seeks 

assistance under section 8002 or section 

8003, the LEA must— 

(1) File with the Secretary a complete 

and signed application for payment 

under section 8002 or section 8003; and 

* * * * * 

(b) * * * 

(2) Except as provided in paragraph 

(d) of this section, within 60 days after 

the applicable event occurs but not later 

than September 30 of the fiscal year 

preceding the fiscal year for which the 

LEA seeks assistance under section 8002 

or section 8003, the LEA must— 

(i) File an application with the 

Secretary as permitted by paragraph 

(b)(1) of this section; and 

(ii) File a copy of that application 

with its SEA. 

(c)(1) * * * 

(i) For an application subject to the 

filing deadlines in paragraph (a)(1) of 

this section, on or before February 15 of 

the fiscal year preceding the fiscal year 

for which the LEA seeks assistance 

under section 8002 or section 8003; and 

* * * * * 

§ 222.4 [Amended] 

■ 5. Section 222.4 is amended by: 

■ A. In paragraph (a), removing ‘‘, or 

mailed,’’ and removing the paragraph (a) 

designation. 

■ B. Removing paragraphs (b) and (c). 

■ 6. Section 222.5 is revised to read as 

follows: 

§ 222.5 When may a local educational 

agency amend its application? 

(a) An LEA may amend its application 

following any of the events described in 

§ 222.3(b)(1) by submitting a written 

request to the Secretary and a copy to 

its SEA no later than the earlier of the 

following events: 

(1) The 60th day following the 

applicable event. 

(2) By the end of the Federal fiscal 

year preceding the fiscal year for which 

the LEA seeks assistance. 

(b) The LEA also may amend its 

application based on actual data 

regarding eligible Federal properties or 

federally connected children if— 

(1) Those data were not available at 

the time the LEA filed its application 

(e.g., due to a second membership count 

of students) and are acceptable to the 

Secretary; and 

(2) The LEA submits a written request 

to the Secretary with a copy to its SEA 

no later than the end of the Federal 

fiscal year preceding the fiscal year for 

which the LEA seeks assistance. 

(Authority: 20 U.S.C. 7705) 

■ 7. Section 222.6 is amended by: 

■ A. In paragraph (a), adding ‘‘section’’ 

before ‘‘8003’’. 

■ B. Revising paragraph (b). 

The revision reads as follows: 

§ 222.6 Which applications does the 

Secretary accept? 

* * * * * 

(b) The Secretary does not accept or 

approve for payment any section 8002 

or section 8003 application that is not 

timely filed with the Secretary as 

described in paragraph (a) of this 

section, except as follows: 

(1) The Secretary accepts and 

approves for payment any otherwise 

approvable application filed within— 

(i) 60 days from the application 

deadline established in § 222.3; or 

(ii) 60 days from the date of the 

Secretary’s written notice of an LEA’s 

failure to comply with the applicable 

filing date. 

(2) The Secretary reduces the payment 

for applications described in paragraph 

(b)(1) of this section by 10 percent of the 

amount that would have been paid if the 

LEA had timely filed the application. 

* * * * * 

■ 8. Section 222.12 is amended by 

revising paragraph (a) to read as follows: 

§ 222.12 What overpayments are eligible 

for forgiveness under section 8012 of the 

Act? 

(a) The Secretary considers as eligible 

for forgiveness under section 8012 of the 

Act (‘‘eligible overpayment’’) any 

amount that is more than an LEA was 

eligible to receive for a particular fiscal 

year under the Act, except for the types 

of overpayments listed in § 222.13. 

* * * * * 

■ 9. Section 222.13 is revised to read as 

follows: 

§ 222.13 What overpayments are not 

eligible for forgiveness under section 8012 

of the Act? 

The Secretary does not consider as 

eligible for forgiveness under section 

8012 of the Act any overpayment caused 

by an LEA’s failure to expend or 

account for funds properly under the 

following laws and regulations: 

(a) Section 8003(d) of the Act 

(implemented in subpart D of this part) 

for certain federally connected children 

with disabilities. 

(b) Section 8007 of the Act for 

construction. 

(Authority: 20 U.S.C. 7712) 

■ 10. Section 222.16 is amended by 

revising the section heading to read as 

follows: 

§ 222.16 What information and 

documentation must a local educational 

agency submit for an eligible overpayment 

to be considered for forgiveness? 

* * * * * 

■ 11. Section 222.19 is amended by: 

■ A. Removing paragraphs (b)(3) and (5) 

and redesignating paragraph (b)(4) as 

paragraph (b)(3). 

■ B. Adding new paragraph (b)(4). 

■ C. Revising paragraph (c). 

■ D. Adding paragraph (d). 

The additions and revision read as 

follows: 

§ 222.19 What other statutes and 

regulations apply to this part? 

* * * * * 

(b) * * * 

(4) 34 CFR part 84 (Governmentwide 

Requirements for Drug-Free Workplace 

(Financial Assistance)). 

(c) 2 CFR part 180, as adopted and 

amended as regulations of the 

Department in 2 CFR part 3485 (OMB 

Guidelines to Agencies on 

Governmentwide Debarment and 

Suspension (Nonprocurement)). 

(d) 2 CFR part 200, as adopted in 2 

CFR part 3474 (Uniform Administrative 

Requirements, Cost Principles, and 

Audit Requirements for Federal 

Awards), for payments under sections 

8003(d) (payments for federally 

connected children with disabilities), 

8007 (construction), and 8008 (school 

facilities). 

* * * * * 

■ 12. Section 222.22 is amended by 

revising paragraphs (b)(1), (c), and (d) to 

read as follows: 

§ 222.22 How does the Secretary treat 

compensation from Federal activities for 

eligibility and payment purposes? 

* * * * * 

(b) * * * 

(1) The LEA received revenue during 

the preceding fiscal year that is 


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generated directly from the eligible 

Federal property or activities in or on 

that property; and * * * 

(c) If an LEA described in paragraph 

(a) of this section received revenue 

described in paragraph (b)(1) of this 

section during the preceding fiscal year 

that, when added to the LEA’s projected 

total section 8002 payment for the fiscal 

year for which the LEA seeks assistance, 

exceeds the maximum payment amount 

under section 8002(b) for the fiscal year 

for which the LEA seeks assistance, the 

Secretary reduces the LEA’s projected 

section 8002 payment by an amount 

equal to that excess amount. 

(d) For purposes of this section, the 

amount of revenue that an LEA receives 

during the previous fiscal year from 

activities conducted on Federal property 

does not include payments received by 

the agency from the Secretary of Defense 

to support— 

(1) The operation of a domestic 

dependent elementary or secondary 

school; or 

(2) The provision of a free public 

education to dependents of members of 

the Armed Forces residing on or near a 

military installation. 

* * * * * 

Subpart C—Payments for Federally 

Connected Children Under Section 

8003(b) of the Act. 

■ 12. Subpart C is amended by revising 

the subpart heading to read as set forth 

above. 

■ 13. Section 222.32 is amended by 

revising the section heading to read as 

follows: 

§ 222.32 What information does the 

Secretary use to determine a local 

educational agency’s basic support 

payment? 

* * * * * 

§ 222.33 [Amended] 

■ 14. Section 222.33 is amended by: 

■ A. Removing the words ‘‘on or’’ in 

paragraph (a)(1). 

■ B. Removing ‘‘, 7706’’ from the 

authority citation. 

§ 222.34 [Amended] 

■ 15. Section 222.34 is amended by 

removing ‘‘§ 222.5(b)(1)’’ in paragraph 

(b) and adding in its place ‘‘§ 222.5(b)’’. 

§ 222.35 [Amended] 

■ 16. Section 222.35 is amended by: 

■ A. Removing the words ‘‘accept a 

parent-pupil survey form’’ in paragraph 

(a)(2) and adding in their place the 

words ‘‘accept an unsigned parent-pupil 

survey form’’. 

■ B. Removing ‘‘and 7706’’ from the 

authority citation. 

■ 17. Section 222.36 is amended by: 

■ A. Revising the section heading. 

■ B. Revising paragraph (a) introductory 

text. 

■ C. Revising paragraph (b). 

■ D. Removing paragraph (d). 

The revisions read as follows: 

§ 222.36 How many federally connected 

children must a local educational agency 

have to receive a payment under section 

8003? 

(a) An LEA is eligible to receive a 

payment under section 8003 for a fiscal 

year only if the total number of eligible 

federally connected children for whom 

it provided a free public education for 

the preceding fiscal year was— 

* * * * * 

(b) An LEA is eligible to receive a 

payment under section 8003 for a fiscal 

year on behalf of federally connected 

children described in section 

8003(a)(1)(F) or (G) only if the total 

number of those children for whom it 

provided a free public education for the 

preceding fiscal year was— 

(1) At least 1,000 in ADA; or 

(2) At least 10 percent of the total 

number of children in ADA. 

* * * * * 

■ 18. Section 222.38 is revised to read 

as follows: 

§ 222.38 What is the maximum basic 

support payment that a local educational 

agency may receive under section 

8003(b)(1)? 

(a) The maximum basic support 

payment that an LEA may receive under 

section 8003(b)(1) for any fiscal year is 

the sum of its total weighted student 

units under section 8003(a)(2) for the 

federally connected children eligible to 

be counted as the basis for payment, 

multiplied by the greater of the 

following: 

(1) One-half of the State average per 

pupil expenditure for the third fiscal 

year preceding the fiscal year for which 

the LEA seeks assistance. 

(2) One-half of the national average 

per pupil expenditure for the third fiscal 

year preceding the fiscal year for which 

the LEA seeks assistance. 

(3) The local contribution rate (LCR) 

based on generally comparable LEAs 

determined in accordance with 

§§ 222.39–222.41. 

(4) The State average per pupil 

expenditure for the third preceding 

fiscal year multiplied by the local 

contribution percentage as defined in 

section 8013(8) of the Act for that same 

year. 

(b) If satisfactory data from the third 

preceding fiscal year are not available 

for the expenditures described in 

paragraphs (a)(1) or (2), the Secretary 

uses data from the most recent fiscal 

year for which data that are satisfactory 

to the Secretary are available. 

(Authority: 20 U.S.C. 7703(a) and (b)) 

■ 19. Section 222.39 is amended by: 

■ A. Revising paragraphs (a) 

introductory text, (a)(1), (a)(2)(i), and 

(a)(2)(iii). 

■ B. Revising paragraph (c). 

■ C. Adding an example after paragraph 

(d)(6). 

The revisions and addition read as 

follows: 

§ 222.39 How does a State educational 

agency identify generally comparable local 

educational agencies for local contribution 

rate purposes? 

(a) To identify generally comparable 

LEAs within its State for LCR purposes, 

the State educational agency (SEA) for 

that State, after appropriate consultation 

with the applicant LEAs in the State, 

shall use data from the third fiscal year 

preceding the fiscal year for which the 

LCR is being computed to group all of 

its LEAs, including all applicant LEAs, 

as follows: 

(1) Grouping by grade span/legal 

classification alone. Divide all LEAs 

into groups that serve the same grade 

span and then subdivide the grade span 

groups by legal classification, if the 

Secretary considers this classification 

relevant and sufficiently different from 

grade span within the State. As an 

alternative grade-span division, divide 

all LEAs into elementary, secondary, or 

unified grade-span groups, as 

appropriate, within the State. 

(2) Grouping by grade span/legal 

classification and size. (i) Divide all 

LEAs into groups by grade span (or the 

alternative grade-span groups described 

in paragraph (a)(1) of this section) and 

legal classification, if relevant and 

sufficiently different from grade span 

and size. 

* * * * * 

(iii) Divide each group into either two 

subgroups or three subgroups. 

* * * * * 

(c) The LCR for a ‘‘significantly 

impacted’’ LEA described in paragraph 

(b)(1) of this section is the LCR of any 

group in which that LEA would be 

included based on grade span/legal 

classification, size, location, or a 

combination of these factors, if the LEA 

were not excluded as significantly 

impacted. 

(d) * * * 

(6) * * * 

Example. An LEA applies for 

assistance under section 8003 and 

wishes to recommend to the Secretary 

an LCR based on generally comparable 

LEAs within its State. 


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1. Characteristics of Applicant LEA. 

The grade span of an applicant LEA is 

kindergarten through grade 8 (K–8). In 

the applicant’s State, legal classification 

of LEAs is based on grade span, and 

thus does not act to further subdivide 

groups of LEAs. 

The ADA of the applicant LEA is 

above the median ADA of LEAs serving 

only K–8 in the State. 

The applicant LEA is located outside 

an MSA. 

2. Characteristics of Other LEAs 

Serving Same Grade Span. The SEA of 

the applicant’s State groups all LEAs in 

its State according to the factors in 

§ 222.39. 

a. The SEA identifies the following 

groups: 

(i) One hundred and one LEAs serve 

only K–8. The SEA has identified a 

group of 50 LEAs having an ADA above 

the median ADA for the group of 101, 

one LEA having an ADA at the median, 

and a group of 50 LEAs having an ADA 

below the median ADA; and according 

to § 222.39(a)(2), the SEA considers 51 

LEAs to have an ADA below the median 

ADA. 

(ii) Of the 101 LEAs in the group, the 

SEA has identified a group of 64 LEAs 

as being inside an MSA and a group of 

37 LEAs as being outside an MSA. 

(iii) Among the group of 50 LEAs 

having an ADA above the median, the 

SEA has identified a group of 35 LEAs 

as being inside an MSA and a group of 

15 LEAs as being outside an MSA. 

(iv) Among the group of 51 LEAs 

having an ADA at or below the median, 

the SEA has identified a group of 29 

LEAs as being inside an MSA and 22 

LEAs as being outside an MSA. 

(v) One LEA has 20 percent of its 

ADA composed of children identified 

under section 8003(a)(1)(A)–(C) and, 

therefore, must be excluded from any 

group it falls within before the SEA 

computes an LCR for the group. The 

LEA has an ADA below the median 

ADA and is located outside an MSA. 

b. On the basis of § 222.41, the SEA 

computes the LCR for each group of 

generally comparable LEAs that the SEA 

has identified. 

■ 20. Section 222.40 is revised to read 

as follows: 

§ 222.40 What procedures does a State 

educational agency use for certain local 

educational agencies to determine 

generally comparable local educational 

agencies using additional factors, for local 

contribution rate purposes? 

(a) To use the procedures in this 

section, the applicant LEA, for the year 

of application, must either— 

(1)(i) Be located entirely on Federal 

land; and 

(ii) Be raising either no local revenues 

or an amount of local revenues the 

Secretary determines to be minimal; or 

(2)(i) Be located in a State where State 

aid makes up no more than 40 percent 

of the State average per pupil 

expenditure in the third fiscal year 

preceding the fiscal year for which the 

LCR is being computed; 

(ii) In its application, have federally 

connected children identified under 

section 8003(a)(1)(A)–(C) equal to at 

least 20 percent of its total ADA; and 

(iii) In its application, have federally 

connected children identified under 

section 8003(a)(1)(A)–(G) who were 

eligible to be counted as the basis for 

payment under section 8003 equal to at 

least 50 percent of its total ADA. 

(b) If requested by an applicant LEA 

described in paragraph (a) of this 

section, the SEA follows the procedures 

in this section, in consultation with the 

LEA, to determine generally comparable 

LEAs using additional factors for the 

purpose of calculating and certifying an 

LCR for that LEA. 

(c) The SEA identifies— 

(1) The subgroup of generally 

comparable LEAs from the group 

identified under § 222.39(a)(2) (grouping 

by grade span/legal classification and 

size) that includes the applicant LEA; or 

(2) For an LEA described in paragraph 

(a) of this section that serves a different 

span of grades from all other LEAs in its 

State (and therefore cannot match any 

group of generally comparable LEAs 

under § 222.39(a)(2)), for purposes of 

this section only, a group using only 

legal classification and size as measured 

by ADA. 

(d) From the subgroup described in 

paragraph (c) of this section, the SEA 

then identifies 10 or more generally 

comparable LEAs that share one or more 

additional common factors of general 

comparability with the applicant LEA 

described in paragraph (a) of this 

section, as follows: 

(1)(i) The SEA must consider one or 

more generally accepted, objectively 

defined factors that affect the 

applicant’s cost of educating its 

children. Examples of such cost-related 

factors include location inside or 

outside an MSA, an unusually large 

geographical area or an economically 

depressed area, sparsity of population, 

and the percentage of its students who 

are from low-income families or who are 

children with disabilities, neglected or 

delinquent children, low-achieving 

children, or children with limited 

English proficiency. 

(ii) The SEA may not consider costrelated factors that can be varied at the 

discretion of the applicant LEA or its 

generally comparable LEAs or factors 

dependent on the wealth of the 

applicant LEA or its generally 

comparable LEAs. Examples of factors 

that may not be considered include 

special alternative curricular programs, 

pupil-teacher ratio, and per pupil 

expenditures. 

(2) The SEA applies the factor or 

factors of general comparability 

identified under paragraph (d)(1)(i) of 

this section in one of the following ways 

in order to identify 10 or more generally 

comparable LEAs for the eligible 

applicant LEA, none of which may be 

significantly impacted LEAs: 

(i) The SEA identifies all of the LEAs 

in the group to which the eligible 

applicant LEA belongs under 

§ 222.39(a)(2) that share the factor or 

factors. If the subgroup containing the 

eligible applicant LEA includes at least 

10 other LEAs (excluding significantly 

impacted LEAs), it will be the eligible 

applicant LEA’s new group of generally 

comparable LEAs. The SEA computes 

the LCR for the eligible applicant LEA 

using the data for all of the LEAs in the 

subgroup except the eligible applicant 

LEA. 

Example 1. An eligible applicant LEA 

contains a designated economically 

depressed area, and the SEA, in 

consultation with the LEA, identifies 

‘‘economically depressed area’’ as an 

additional factor of general 

comparability. From the group of LEAs 

under § 222.39(a)(2) that includes the 

eligible applicant LEA, the SEA 

identifies two subgroups, those LEAs 

that contain a designated economically 

depressed area and those that do not. 

The entire subgroup identified by the 

SEA that includes the eligible applicant 

LEA is that LEA’s new group of 

generally comparable LEAs if it contains 

at least 10 LEAs. 

(ii) After the SEA identifies all of the 

LEAs in the group to which the eligible 

applicant LEA belongs under 

§ 222.39(a)(2) that share the factor or 

factors, the SEA then systematically 

orders by ADA all of the LEAs in the 

group that includes the eligible 

applicant LEA. The SEA may further 

divide the ordered LEAs into subgroups 

by using logical division points (e.g., the 

median, quartiles, or standard 

deviations) or a continuous interval of 

the ordered LEAs (e.g., a percentage or 

a numerical range). If the subgroup 

containing the eligible applicant LEA 

includes at least 10 other LEAs 

(excluding significantly impacted 

LEAs), it will be the eligible applicant 

LEA’s new group of generally 

comparable LEAs. The SEA computes 

the LCR for the eligible applicant LEA 

using the data for all of the LEAs in the 


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subgroup except the eligible applicant 

LEA. 

Example 2. An eligible applicant LEA 

serves an unusually high percentage of 

children with disabilities, and the SEA, 

in consultation with the LEA, identifies 

‘‘proportion of children with 

disabilities’’ as an additional 

comparability factor. From the group of 

LEAs under § 222.39(a)(2) that includes 

the eligible applicant LEA, the SEA lists 

the LEAs in descending order according 

to the percentage of children with 

disabilities enrolled in each of the LEAs. 

The SEA divides the list of LEAs into 

four groups containing equal numbers of 

LEAs. The group containing the eligible 

applicant LEA is that LEA’s new group 

of generally comparable LEAs if it 

contains at least 10 LEAs. 

(iii) The SEA may apply more than 

one factor of general comparability in 

identifying a new group of 10 or more 

generally comparable LEAs for the 

eligible applicant LEA. If the subgroup 

containing the eligible applicant LEA 

includes at least 10 other LEAs 

(excluding significantly impacted 

LEAs), it will be the eligible applicant 

LEA’s new group of generally 

comparable LEAs. The SEA computes 

the LCR for the eligible applicant LEA 

using the data from all of the LEAs in 

the subgroup except the eligible 

applicant LEA. 

Example 3. An eligible applicant LEA 

is very sparsely populated and serves an 

unusually high percentage of children 

with limited English proficiency. The 

SEA, in consultation with the LEA, 

identifies ‘‘sparsity of population’’ and 

‘‘proportion of children with limited 

English proficiency’’ as additional 

comparability factors. From the group of 

LEAs under § 222.39(a)(2) that includes 

the eligible applicant LEA, the SEA 

identifies all LEAs that are sparsely 

populated. The SEA further subdivides 

the sparsely populated LEAs into two 

groups, those that serve an unusually 

high percentage of children with limited 

English proficiency and those that do 

not. The subgroup of at least 10 sparsely 

populated LEAs that serve a high 

percentage of children with limited 

English proficiency is the eligible 

applicant LEA’s new group of generally 

comparable LEAs. 

(e)(1) Using the new group of 

generally comparable LEAs selected 

under paragraph (d) of this section, the 

SEA computes the LCR for the eligible 

applicant LEA according to the 

provisions of § 222.41. 

(2) The SEA certifies the resulting 

LCR by submitting that LCR to the 

Secretary and providing the Secretary a 

description of the additional factor or 

factors of general comparability and the 

data used to identify the new group of 

generally comparable LEAs. 

(3) The Secretary reviews the data 

submitted by the SEA, and accepts the 

LCR for the purpose of use under 

section 8003(b)(1)(C)(iii) in determining 

the LEA’s maximum payment under 

section 8003 if the Secretary determines 

that it meets the purposes and 

requirements of the Act and this part. 

(Authority: 20 U.S.C. 7703(b)(1)(C)(iii)) 

■ 21–22. Section 222.41 is amended by 

revising the section heading, the 

introductory text, and paragraph (d) to 

read as follows: 

§ 222.41 How does a State educational 

agency compute and certify local 

contribution rates based upon generally 

comparable local educational agencies? 

Except as otherwise specified in the 

Act, the SEA, subject to the Secretary’s 

review and approval, computes and 

certifies an LCR for each group of 

generally comparable LEAs within its 

State that was identified using the 

factors in § 222.39, and § 222.40 if 

appropriate, as follows: 

* * * * * 

(d) The SEA certifies the resulting 

figure for each group as the LCR for that 

group of generally comparable LEAs to 

be used by the Secretary under section 

8003(b)(1)(C)(iii) in determining the 

LEA’s maximum payment amount 

under section 8003. 

* * * * * 

■ 23. Section 222.43 is added to read as 

follows: 

§ 222.43 What requirements must a local 

educational agency meet in order to be 

eligible for financial assistance under 

section 8003(b)(1)(F) due to unusual 

geographic features? 

An LEA is eligible for financial 

assistance under section 8003(b)(1)(F) if 

the Secretary determines that the LEA 

meets all of the following 

requirements— 

(a)(1) The LEA is eligible for a basic 

support payment under section 8003(b), 

including meeting the maintenance of 

effort requirements in section 8003(g) of 

the Act; 

(2) The LEA timely applies for 

assistance under section 8003(b)(1)(F) 

and meets all other requirements of 

subparts A and C; 

(3) The LEA is meeting the tax rate 

requirement in § 222.68(c) and the other 

applicable requirements of §§ 222.68 

through 222.72; and 

(4) The LEA is not in a State that takes 

the LEA’s payment under section 

8003(b)(1)(F) into account in an 

equalization program that qualifies 

under section 8009 of the Act. 

(b)(1) As part of its section 8003 

application, the LEA indicates in 

writing that it wishes to apply for an 

‘‘unusual geographic’’ payment and it 

will provide the Secretary with 

documentation upon request that 

demonstrates that the LEA is unable to 

provide a level of education equivalent 

to that provided by its generally 

comparable LEAs because— 

(i) The applicant’s current 

expenditures are affected by unusual 

geographic factors; and 

(ii) As a result, those current 

expenditures are not reasonably 

comparable to the current expenditures 

of its generally comparable LEAs. 

(2) The LEA’s documentation must 

include— 

(i) A specific description of the 

unusual geographic factors on which the 

applicant is basing its request for 

compensation under this section and 

objective data demonstrating that the 

applicant is more severely affected by 

the factors than any other LEA in its 

State; 

(ii) Objective data demonstrating the 

specific ways in which the unusual 

geographic factors affect the applicant’s 

current expenditures so that they are not 

reasonably comparable to the current 

expenditures of its generally comparable 

LEAs; 

(iii) Objective data demonstrating the 

specific ways in which the unusual 

geographic factors prevent the applicant 

from providing a level of education 

equivalent to that provided by its 

generally comparable LEAs; and 

(iv) Any other information that the 

Secretary may require to make an 

eligibility determination under this 

section. 

(Authority: 20 U.S.C. 7703(b)(1)(F)) 

■ 23–24. Section 222.44 is added to read 

as follows: 

§ 222.44 How does the Secretary 

determine a maximum payment for local 

educational agencies that are eligible for 

financial assistance under section 

8003(b)(1)(F) and § 222.43? 

The Secretary determines a maximum 

payment under section 8003(b)(1)(F) for 

an eligible LEA, using data from the 

third preceding fiscal year, as follows: 

(a) Subject to paragraph (b) of this 

section, the Secretary increases the 

eligible LEA’s local contribution rate 

(LCR) for section 8003(b) payment 

purposes to the amount the Secretary 

determines will compensate the 

applicant for the increase in its current 

expenditures necessitated by the 

unusual geographic factors identified 

under § 222.43(b)(2). 


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(b) The Secretary does not increase 

the LCR under this section to an amount 

that is more than— 

(1) Is necessary to allow the applicant 

to provide a level of education 

equivalent to that provided by its 

generally comparable LEAs; or 

(2) The per pupil share for all 

children in ADA of the increased 

current expenditures necessitated by the 

unusual geographic factors identified 

under § 222.43, as determined by the 

Secretary. 

(Authority: 20 U.S.C. 7703(b)(1)(F)) 

■ 25. Section 222.50 is revised to read 

as follows: 

§ 222.50 What definitions apply to this 

subpart? 

In addition to the terms referenced or 

defined in § 222.2, the following 

definitions apply to this subpart: 

Child with a disability as defined in 

34 CFR 300.8. 

Early intervention services as defined 

in 34 CFR 303.13. 

Free appropriate public education or 

FAPE as defined in 34 CFR 300.17. 

Individualized education program or 

IEP as defined in 34 CFR 300.22. 

Individualized family service plan or 

IFSP as defined in 34 CFR 303.20. 

Infant or toddler with a disability as 

defined in 34 CFR 303.21. 

Infants, toddlers, and children with 

disabilities, for these regulations, means 

both a ‘‘child with a disability’’ as 

defined in 34 CFR 300.8 and an ‘‘infant 

or toddler with a disability’’ as defined 

in 34 CFR 303.21. 

Related services as defined in 34 CFR 

300.34. 

Special education as defined in 34 

CFR 300.39. 

(Authority: 20 U.S.C. 1401, 1414, 1432, 1436, 

7703, 7705, 7713; 34 CFR parts 300 and 303) 

■ 26. Section 222.51 is revised to read 

as follows: 

§ 222.51 Which children may a local 

educational agency count for payment 

under section 8003(d) of the Act? 

(a) An LEA may count children 

described in sections 8003(a)(1)(A)(ii), 

(a)(1)(B), (a)(1)(C), and (a)(1)(D) of the 

Act who are eligible for services under 

the provisions of Part B or Part C of the 

Individuals with Disabilities Education 

Act (20 U.S.C. 1400 et seq.) (IDEA), for 

the purpose of computing a payment 

under section 8003(d) in accordance 

with the provisions of this section. 

(b)(1) An LEA may count a child with 

a disability described in paragraph (a) of 

this section who attends a private 

school or residential program if the LEA 

has placed or referred the child in 

accordance with the provisions of 

section 613 of the IDEA and 34 CFR part 

300, subparts C and D. 

(2) An LEA may not count a child 

with a disability described in paragraph 

(a) of this section who is placed in a 

private school by his or her parents, but 

that child may participate in public 

school programs that use section 

8003(d) funds. 

(c) An LEA may count infants and 

toddlers with disabilities described in 

paragraph (a) of this section if— 

(1) The LEA provides early 

intervention services or FAPE to each of 

those children— 

(i) Either directly or through an 

arrangement with another entity; and 

(ii) The State does not charge a fee or 

other out-of-pocket cost to the child’s 

parents under the State’s system of 

payments on file with the Secretary 

required under 34 CFR 303.203(b)(1), 

303.520, and 303.521, and there is no 

other cost to the child’s parents (the 

costs of premiums do not count as outof-pocket costs); and 

(2) Each of those children has an IFSP 

or IEP (as appropriate). 

(Authority: 20 U.S.C. 1400 et seq. and 

7703(d)) 

■ 27. Section 222.52 is amended by 

revising paragraph (b) to read as follows: 

§ 222.52 What requirements must a local 

educational agency meet to receive a 

payment under section 8003(d)? 

* * * * * 

(b) Have in effect written IEPs or 

IFSPs for all federally connected 

children with disabilities it claims 

under section 8003(d); and 

* * * * * 

■ 28. Section 222.53 is amended by: 

■ A. In paragraph (a), removing the 

phrase ‘‘part 300’’ and adding in its 

place the phrase ‘‘parts 300 and 303’’. 

■ B. Revising paragraph (c)(1). 

■ C. In paragraph (c)(2) introductory 

text, adding ‘‘, and early intervention 

services for,’’ following the words 

‘‘public education of’’. 

■ D. In paragraphs (c)(2)(i) and (ii), 

adding ‘‘, or early intervention services 

for,’’ following the words ‘‘public 

education of’’. 

■ E. In paragraph (d)(2) introductory 

text adding the phrase ‘‘and for early 

intervention services’’ following 

‘‘special education and related 

services’’. 

■ F. In paragraph (d)(2)(i), adding the 

phrase ‘‘and for early intervention 

services’’ following ‘‘special education 

and related services’’. 

■ G. In paragraph (d)(3), adding the 

phrase ‘‘and for early intervention 

services’’ following ‘‘special education 

and related services’’. 

The revision reads as follows: 

§ 222.53 What restrictions and 

requirements apply to the use of funds 

provided under section 8003(d)? 

* * * * * 

(c) * * * 

(1) Expenditures that are reasonably 

related to the conduct of programs or 

projects for the free appropriate public 

education of, or early intervention 

services for, federally connected 

children with disabilities, which may 

include— 

(i) Program planning and evaluation; 

and 

(ii) Construction of or alteration to 

existing school facilities, but only when 

in accordance with section 605 of the 

IDEA and when the Secretary authorizes 

in writing those uses of funds. 

* * * * * 

§ 222.54 [Amended] 

■ 29. Section 222.54 is amended by 

adding ‘‘, and for early intervention 

services,’’ in paragraph (b) following 

‘‘all funds for programs’’. 

§ 222.55 [Amended] 

■ 30. Section 222.55 is amended by 

removing the phrase ‘‘part 300’’ and 

adding, in its place, the phrase ‘‘parts 

300 and 303’’. 

■ 31. Subpart E is revised to read as 

follows: 

Subpart E—Payments for Heavily Impacted 

Local Educational Agencies Under Section 

8003(b)(2) of the Act 

Sec. 

222.60 What are the scope and purpose of 

this subpart? 

222.61 What data are used to determine a 

local educational agency’s eligibility 

under section 8003(b)(2) of the Act? 

222.62 How are local educational agencies 

determined eligible under section 

8003(b)(2)? 

222.63 When is a local educational agency 

eligible as a continuing applicant for 

payment under section 8003(b)(2)(B)? 

222.64 When is a local educational agency 

eligible as a new applicant for payment 

under section 8003(b)(2)(C)? 

222.65 What other requirements must a 

local educational agency meet to be 

eligible for financial assistance under 

section 8003(b)(2)? 

222.66 How does a local educational agency 

lose and resume eligibility under section 

8003(b)(2)? 

222.67 How may a State aid program affect 

a local educational agency’s eligibility 

for assistance under section 8003(b)(2)? 

222.68 How does the Secretary determine 

whether a fiscally independent local 

educational agency meets the applicable 

tax rate requirement? 

222.69 What tax rates does the Secretary 

use if real property is assessed at 

different percentages of true value? 


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222.70 What tax rates does the Secretary 

use if two or more different 

classifications of real property are taxed 

at different rates? 

222.71 What tax rates may the Secretary use 

if substantial local revenues are derived 

from local tax sources other than real 

property taxes? 

222.72 How does the Secretary determine 

whether a fiscally dependent local 

educational agency meets the applicable 

tax rate requirement? 

222.73 What information must the State 

educational agency provide? 

222.74 How does the Secretary identify 

generally comparable local educational 

agencies for purposes of section 

8003(b)(2)? 

222.75 How does the Secretary compute the 

average per pupil expenditure of 

generally comparable local educational 

agencies under this subpart? 

222.76–222.79 [Reserved] 

Subpart E—Payments for Heavily 

Impacted Local Educational Agencies 

Under Section 8003(b)(2) of the Act 

§ 222.60 What are the scope and purpose 

of this subpart? 

The regulations in this subpart 

implement section 8003(b)(2) of the Act, 

which provides financial assistance to 

certain heavily impacted local 

educational agencies (LEAs). The 

specific eligibility requirements are 

detailed in §§ 222.62 through 222.66. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.61 What data are used to determine 

a local educational agency’s eligibility 

under section 8003(b)(2) of the Act? 

(a) Computations and determinations 

made with regard to an LEA’s eligibility 

under section 8003(b)(2) in §§ 222.61 

through 222.66 of these regulations are 

based on the LEA’s final student, 

revenue, expenditure, and tax data from 

the third fiscal year preceding the fiscal 

year for which it seeks assistance. 

(b) Except for an LEA described in 

§ 222.64(a)(3)(ii), the LEAs used for 

meeting the applicable tax rate 

requirement are the comparable LEAs 

that are identified in § 222.74 or all 

LEAs in the applicant’s State. 

(c) As used in this subpart, the phrase 

‘‘tax rate for general fund purposes’’ 

means ‘‘local real property tax rates for 

current expenditures purposes’’ as 

defined in § 222.2. ‘‘Current 

expenditures’’ is defined in section 

8013(4) of the ESEA. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.62 How are local educational 

agencies determined eligible under section 

8003(b)(2)? 

(a) An LEA that is eligible to apply for 

a ‘‘continuing’’ heavily impacted 

payment under section 8003(b)(2)(B) is 

one that received an additional 

assistance payment under section 

8003(f) for fiscal year 2000 and that 

meets eligibility requirements specified 

in § 222.63. 

(b) An LEA that is eligible to apply for 

a ‘‘new’’ heavily impacted payment 

under section 8003(b)(2)(C) is one that 

did not receive an additional assistance 

payment under section 8003(f) for fiscal 

year 2000 and that meets eligibility 

requirements specified in § 222.64 for 

two consecutive application years. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.63 When is a local educational 

agency eligible as a continuing applicant 

for payment under section 8003(b)(2)(B)? 

A continuing heavily impacted LEA 

must have— 

(a) The same boundaries as those of a 

Federal military installation; 

(b)(1) An enrollment of federally 

connected children described in section 

8003(a)(1) equal to at least 35 percent of 

the total number of children in average 

daily attendance (ADA) in the LEA; 

(2) A per pupil expenditure (PPE) that 

is less than the average PPE of the State 

in which the LEA is located or of all the 

States, whichever PPE is greater (except 

that an LEA with a total student 

enrollment of less than 350 students 

shall be determined to have met the PPE 

requirement); and 

(3) A tax rate for general fund 

purposes of at least 95 percent of the 

average tax rate of comparable LEAs 

identified under § 222.74 or all LEAs in 

the applicant’s State; 

(c)(1) An enrollment of federally 

connected children described in section 

8003(a)(1) equal to at least 30 percent of 

the total number of children in ADA in 

the LEA; and 

(2) A tax rate for general fund 

purposes of at least 125 percent of the 

average tax rate of comparable LEAs 

identified under §§ 222.39–40 or of all 

LEAs in the applicant’s State; or 

(d) A total enrollment of at least 

25,000 students, of which at least 50 

percent are children described in 

section 8003(a)(1) and at least 6,000 of 

such children are children described in 

section 8003(a)(1)(A) and (B). 

(Authority: 20 U.S.C. 7703(b)(2)(B)) 

§ 222.64 When is a local educational 

agency eligible as a new applicant for 

payment under section 8003(b)(2)(C)? 

A new heavily impacted LEA must 

have— 

(a)(1)(i) Federally connected children 

equal to at least 50 percent of the total 

number of children in average daily 

attendance (ADA) in the LEA if children 

described in section 8003(a)(1)(F)–(G) 

are eligible to be counted for a section 

8003(b)(1) payment; or 

(ii) Federally connected children 

equal to at least 40 percent of the total 

number of children in ADA if children 

described in section 8003(a)(1)(F)–(G) 

are not eligible to be counted for a 

section 8003(b)(1) payment; and 

(2)(i) If the LEA has a total ADA of 

more than 350 children, 

(A) A per pupil expenditure (PPE) 

that is less than the average of the State 

in which the LEA is located; and 

(B) A tax rate for general fund 

purposes equal to at least 95 percent of 

the average tax rate of comparable LEAs 

identified in § 222.74 or of all LEAs in 

the applicant’s State; or 

(ii) If the LEA has a total ADA of less 

than 350 children, 

(A) A PPE that is less than the average 

PPE of one or three generally 

comparable LEAs identified in 

§ 222.74(b); and 

(B) A tax rate equal to at least 95 

percent of the average tax rate of one or 

three generally comparable LEAs 

identified in § 222.74(b); 

(b) The same boundaries as those of 

a Federal military installation; or 

(c)(1) The same boundaries as island 

property held in trust by the Federal 

government; 

(2) No taxing authority; and 

(3) Received a payment under section 

8003(b)(1) for fiscal year 2001. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.65 What other requirements must a 

local educational agency meet to be eligible 

for financial assistance under section 

8003(b)(2)? 

Subject to § 222.66, an LEA described 

in § 222.63 or § 222.64 is eligible for 

financial assistance under section 

8003(b)(2) if the Secretary determines 

that the LEA meets the following 

requirements: 

(a) The LEA timely applies for 

assistance under section 8003(b)(2) and 

meets all of the other application and 

eligibility requirements of subparts A 

and C of these regulations. 

(b) Except for an LEA described in 

§ 222.63(a) or (d), or § 222.64(b) or (c), 

the LEA meets the applicable tax rate 

requirement in accordance with the 

procedures and requirements of 

§§ 222.68 through 222.74. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.66 How does a local educational 

agency lose and resume eligibility under 

section 8003(b)(2)? 

(a) A continuing heavily impacted 

LEA that fails to meet the eligibility 

requirements in § 222.63 in any fiscal 

year or a new heavily impacted LEA 

that received a section 8003(b)(2) 


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payment but then fails to meet the 

eligibility requirements in § 222.64 will 

still receive a heavily impacted payment 

in the first year of ineligibility, based on 

the number of children in ADA that 

would be counted for that application if 

the LEA were eligible. 

(b)(1) A continuing heavily impacted 

LEA may resume eligibility for a heavily 

impacted payment if it applies in the 

fiscal year preceding the year for which 

it seeks eligibility and it meets the 

eligibility requirements in § 222.63 for 

both fiscal years. 

(2) In the first fiscal year that a 

continuing heavily impacted LEA 

qualifies to resume eligibility, it cannot 

receive a heavily impacted payment but 

instead will receive a basic support 

payment under section 8003(b)(1) for 

that year. 

Example: 

CONTINUING LEA 

In Federal Fiscal Years (FFYs) 1 and 

2, a continuing LEA is eligible for a 

section 8003(b)(2) payment. In FFY 3, 

the LEA applies but is ineligible for 

section 8003(b)(2). However, it will still 

receive a payment under section 

8003(b)(2) for FFY 3 (a ‘‘hold harmless’’ 

payment under § 222.66(a)). For FFY 4, 

the LEA applies and meets the 

requirements. The LEA is not eligible to 

receive a section 8003(b)(2) payment in 

FFY 4 but is instead eligible for a 

section 8003(b)(1) payment (see 

§ 222.66(b)). In FFY 5, the LEA applies, 

meets the requirements, and receives a 

section 8003(b)(2) payment. The LEA 

not only must apply one year in 

advance and meet the section 8003(b)(2) 

requirements (FFY 4) but it must apply 

and meet the requirements for the 

subsequent FFY (year 5). The effects of 

these requirements on a continuing 

applicant’s status and payments are 

summarized in the table below. 

CONTINUING LEAS

FFY 1 FFY 2 FFY 3 FFY 4 FFY 5 

8003(b)(2) Eligibility ............................ Yes ....................... Yes ....................... No ........................ Yes ....................... Yes 

Payment Type ..................................... (b)(2) .................... (b)(2) .................... (b)(2) Hold Harmless.(b)(1) .................... (b)(2) 

(c) A new heavily impacted LEA may 

resume eligibility for a heavily impacted 

payment if it meets the eligibility 

requirements in § 222.64 for the fiscal 

year for which it seeks a payment. 

Example: 

NEW LEA 

A new LEA applies for a section 

8003(b)(2) payment and meets the 

applicable eligibility criteria. The LEA 

does not receive a section 8003(b)(2) 

payment in FFY 1 and it must apply and 

meet the requirements again in FFY 2 

before it can receive a (b)(2) payment 

(see § 222.62(b)). If that new district is 

then ineligible for a year, it can regain 

eligibility only if it meets the applicable 

criteria in a subsequent year. For 

example, if a new LEA loses its section 

8003(b)(2) eligibility in FFY 3 because 

its tax rate dropped to 94 percent of the 

average tax rate of comparable districts 

in the State, that LEA is still entitled to 

receive a payment under section 

8003(b)(2) in FFY 3 if it applies for such 

payment (a ‘‘hold harmless’’ payment 

under § 222.66(a)). Then if the LEA 

applies in FFY 4 and meets the 

eligibility requirement under section 

8003(b)(2), it is once again eligible to 

receive a section 8003(b)(2) payment 

(see § 222.66(c)). The effects of these 

requirements on a new applicant’s 

status and payments are summarized in 

the table below. 

NEW LEAS

FFY 1 FFY 2 FFY 3 FFY 4 FFY 5 

8003(b)(2) Eligibility ............................ Yes ....................... Yes ....................... No ........................ Yes ....................... Yes 

Payment Type ..................................... (b)(1) .................... (b)(2) .................... (b)(2) Hold Harmless.(b)(2) .................... (b)(2) 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.67 How may a State aid program 

affect a local educational agency’s 

eligibility for assistance under section 

8003(b)(2)? 

The Secretary determines that an LEA 

is not eligible for financial assistance 

under section 8003(b)(2) if— 

(a) The LEA is in a State that has an 

equalized program of State aid that 

meets the requirements of section 8009; 

and 

(b) The State, in determining the 

LEA’s eligibility for or amount of State 

aid, takes into consideration the portion 

of the LEA’s payment under section 

8003(b)(2) that exceeds what the LEA 

would receive under section 8003(b)(1). 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.68 How does the Secretary 

determine whether a fiscally independent 

local educational agency meets the 

applicable tax rate requirement? 

(a) To determine whether a fiscally 

independent LEA, as defined in 

§ 222.2(c), meets the applicable tax rate 

requirement in §§ 222.63(b)(3), 

222.63(c)(2), and 222.64(a)(3), the 

Secretary compares the LEA’s local real 

property tax rate for current expenditure 

purposes, as defined in § 222.2(c) 

(referred to in this part as ‘‘tax rate’’ or 

‘‘tax rates’’), with the tax rates of its 

generally comparable LEAs. 

(b) For purposes of this section, the 

Secretary uses— 

(1) The actual tax rate if all the real 

property in the LEA and its generally 

comparable LEAs is assessed at the 

same percentage of true value; or 

(2) Tax rates computed under 

§§ 222.69–222.71. 

(c) The Secretary determines that an 

LEA described in §§ 222.63(b), 

222.63(c), or 222.64(a) meets the 

applicable tax rate requirement if— 

(1) The LEA’s tax rate is equal to at 

least 95 percent (or 125 percent under 

222.63(c)) of the average tax rate of its 

generally comparable LEAs; 

(2) Each of the LEA’s tax rates for each 

classification of real property is equal to 

at least 95 percent (or 125 percent under 

222.63(c)) of each of the average tax 

rates of its generally comparable LEAs 

for the same classification of property; 

(3) The LEA taxes all of its real 

property at the maximum rates allowed 

by the State, if those maximum rates 

apply uniformly to all LEAs in the State 


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and the State does not permit any rates 

higher than the maximum; or 

(4) The LEA has no taxable real 

property. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.69 What tax rates does the Secretary 

use if real property is assessed at different 

percentages of true value? 

If the real property of an LEA and its 

generally comparable LEAs consists of 

one classification of property but the 

property is assessed at different 

percentages of true value in the different 

LEAs, the Secretary determines whether 

the LEA meets the applicable tax rate 

requirement under § 222.68(c)(1) by 

using tax rates computed by— 

(a) Multiplying the LEA’s actual tax 

rate for real property by the percentage 

of true value assigned to that property 

for tax purposes; and 

(b) Performing the computation in 

paragraph (a) of this section for each of 

its generally comparable LEAs and 

determining the average of those 

computed tax rates. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.70 What tax rates does the Secretary 

use if two or more different classifications 

of real property are taxed at different rates? 

If the real property of an LEA and its 

generally comparable LEAs consists of 

two or more classifications of real 

property taxed at different rates, the 

Secretary determines whether the LEA 

meets the applicable tax rate 

requirement under § 222.68(c)(1) or (2) 

by using one of the following: 

(a) Actual tax rates for each of the 

classifications of real property. 

(b) Tax rates computed in accordance 

with § 222.69 for each of the 

classifications of real property. 

(c) Tax rates computed by— 

(1) Determining the total true value of 

all real property in the LEA by dividing 

the assessed value of each classification 

of real property in the LEA by the 

percentage of true value assigned to that 

property for tax purposes and 

aggregating the results; 

(2) Determining the LEA’s total 

revenues derived from local real 

property taxes for current expenditures 

(as defined in section 8013); 

(3) Dividing the amount determined 

in paragraph (c)(2) of this section by the 

amount determined in paragraph (c)(1) 

of this section; and 

(4) Performing the computations in 

paragraphs (c)(1), (2), and (3) of this 

section for each of the generally 

comparable LEAs and then determining 

the average of their computed tax rates. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.71 What tax rates may the Secretary 

use if substantial local revenues are derived 

from local tax sources other than real 

property taxes? 

(a) In a State in which a substantial 

portion of revenues for current 

expenditures for educational purposes 

is derived from local tax sources other 

than real property taxes, the State 

educational agency (SEA) may request 

that the Secretary take those revenues 

into account in determining whether an 

LEA in that State meets the applicable 

tax rate requirement under § 222.68. 

(b) If, based upon the request of an 

SEA, the Secretary determines that it is 

appropriate to take the revenues 

described in paragraph (a) of this 

section into account in determining 

whether an LEA in that State meets the 

applicable tax rate requirement under 

§ 222.68, the Secretary uses tax rates 

computed by— 

(1) Dividing the assessed value of 

each classification of real property in 

the LEA by the percentage of true value 

assigned to that property for tax 

purposes and aggregating the results; 

(2) Determining the LEA’s total 

revenues derived from local tax sources 

for current expenditures (as defined in 

section 8013); 

(3) Dividing the amount determined 

in paragraph (b)(2) of this section by the 

amount determined in paragraph (b)(1) 

of this section; and 

(4) Performing the computations in 

paragraphs (b)(1), (2), and (3) of this 

section for each of the generally 

comparable LEAs and then determining 

the average of those computed tax rates. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.72 How does the Secretary 

determine whether a fiscally dependent 

local educational agency meets the 

applicable tax rate requirement? 

(a) If an LEA is fiscally dependent, as 

defined in § 222.2(c), the Secretary 

compares the LEA’s imputed local tax 

rate, calculated under paragraph (b) of 

this section, with the average tax rate of 

its generally comparable LEAs, 

calculated under paragraph (c) of this 

section, to determine whether the LEA 

meets the applicable tax rate 

requirement. 

(b) The Secretary imputes a local tax 

rate for a fiscally dependent LEA by— 

(1) Dividing the assessed value of 

each classification of real property 

within the boundaries of the general 

government by the percentage of true 

value assigned to that property for tax 

purposes and aggregating the results; 

(2) Determining the amount of locally 

derived revenues made available by the 

general government for the LEA’s 

current expenditures (as defined in 

section 8013); and 

(3) Dividing the amount determined 

in paragraph (b)(2) of this section by the 

amount determined in paragraph (b)(1) 

of this section. 

(c) The Secretary performs the 

computations in paragraph (b) of this 

section for each of the fiscally 

dependent generally comparable LEAs 

and the computations in §§ 222.68 

through 222.71, whichever is 

applicable, for each of the fiscally 

independent generally comparable LEAs 

and determines the average of all those 

tax rates. 

(d) The Secretary determines that a 

fiscally dependent LEA described in 

§ 222.63(b) or § 222.64(a) meets the 

applicable tax rate requirement if its 

imputed local tax rate is equal to at least 

95 percent of the average tax rate of its 

generally comparable LEAs. 

(e) The Secretary determines that a 

fiscally dependent LEA described in 

§ 222.63(c) meets the applicable tax rate 

requirement if its imputed local tax rate 

is equal to at least 125 percent of the 

average tax rate of its generally 

comparable LEAs. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.73 What information must the State 

educational agency provide? 

The SEA of any State with an LEA 

applying for assistance under section 

8003(b)(2) shall provide the Secretary 

with relevant information necessary to 

determine the PPE for all LEAs in the 

State and whether the LEA meets the 

applicable tax rate requirement under 

this subpart. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.74 How does the Secretary identify 

generally comparable local educational 

agencies for purposes of section 

8003(b)(2)? 

(a) Except as otherwise provided in 

paragraph (b) of this section, the 

Secretary identifies generally 

comparable LEAs for purposes of this 

subpart in accordance with the local 

contribution rate procedures described 

in §§ 222.39 through 222.40. 

(b) For applicant LEAs described in 

§ 222.64(a)(2)(ii) and (a)(3)(ii), to 

identify the one or three generally 

comparable LEAs, the Secretary uses the 

following procedures: 

(1) The Secretary asks the SEA of the 

applicant LEA to identify generally 

comparable LEAs in the State by first 

following the directions in 

§ 222.39(a)(4), using data from the 

preceding fiscal year. The SEA then 

removes from the resulting list any 

LEAs that are significantly impacted, as 

described in § 222.39(b)(1), except the 

applicant LEA. 


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33170 Federal Register / Vol. 80, No. 112 / Thursday, June 11, 2015 / Rules and Regulations 

(2) If the remaining LEAs are not in 

rank order by total ADA, the SEA lists 

them in that order. 

(3) The LEA may then select as its 

generally comparable LEAs, for 

purposes of section 8003(b)(2) only, one 

or three LEAs from the list that are 

closest to it in size as determined by 

total ADA (i.e., the next one larger or the 

next one smaller, or the next three larger 

LEAs, the next three smaller, the next 

two larger and the next one smaller, or 

the next one larger and the next two 

smaller). 

(Authority: 20 U.S.C. 7703(b)(2)) 

§ 222.75 How does the Secretary compute 

the average per pupil expenditure of 

generally comparable local educational 

agencies under this subpart? 

For applicant LEAs described in 

§ 222.64(a)(2)(ii), the Secretary 

computes average per pupil 

expenditures (APPE) by dividing the 

sum of the total current expenditures for 

the third preceding fiscal year for the 

identified generally comparable LEAs 

by the sum of the total ADA of those 

LEAs for the same fiscal year. 

(Authority: 20 U.S.C. 7703(b)(2)) 

§§ 222.76–222.79 [Reserved] 

Subpart F [Removed and Reserved] 

■ 32. Subpart F, consisting of §§ 222.80 

through 222.85, is removed and 

reserved. 

§ 222.151 [Amended] 

■ 33. Section 222.151 is amended by: 

■ A. In paragraph (a), removing the 

phrase ‘‘or Pub. L. 81–874’’. 

■ B. In paragraph (b)(1), removing the 

number ‘‘30’’ and adding in its place the 

number ‘‘60’’. 

§ 222.152 [Amended] 

■ 34. Section 222.152 is amended in 

paragraphs (a)(1) and (c) by removing 

the phrase ‘‘or Pub. L. 81–874’’ from 

each of those paragraphs. 

■ 35. Section 222.153 is amended by 

revising paragraph (a) to read as follows: 

§ 222.153 How must a local educational 

agency request an administrative hearing? 

* * * * * 

(a)(1) If it mails the hearing request, 

address it to the Secretary, c/o Director, 

Impact Aid Program, Room 3E105, U.S. 

Department of Education, 400 Maryland 

Avenue SW., Washington, DC 20202– 

6244; 

(2) If it hand-delivers the hearing 

request, deliver it to the Director, Impact 

Aid Program, Room 3E105, U.S. 

Department of Education, 400 Maryland 

Avenue SW., Washington, DC 20202– 

6244; or 

(3) If it emails the hearing request, 

send it to Impact.Aid@ed.gov. 

Note to paragraph (a): The Secretary 

encourages applicants requesting an 

Impact Aid hearing to mail or email 

their requests. Because of enhanced 

security procedures, building access for 

non-official staff may be limited. 

Applicants should be prepared to mail 

their hearing requests if they or their 

courier are unable to obtain access to 

the building. 

* * * * * 

§ 222.159 [Amended] 

■ 36. Section 222.159 is amended by 

removing the phrase ‘‘60 days’’ and 

adding, in its place, the phrase ‘‘30 

working days (as determined by the 

LEAs or State)’’. 

■ 37. Section 222.161 is amended by: 

■ A. Revising paragraph (a)(1)(ii). 

■ B. Removing paragraph (a)(1)(iii). 

■ C. Revising paragraph (a)(5). 

■ D. In paragraph (c), amending 

paragraph (4) of the definition of 

‘‘current expenditures’’ by adding the 

word ‘‘or’’ after the semicolon. 

■ E. In paragraph (c), amending 

paragraph (5) of the definition of 

‘‘current expenditures’’ by removing the 

phrase ‘‘or under Pub. L. 81–874’’ and 

removing ‘‘; or’’ and adding in its place 

a period. 

■ F. In paragraph (c), removing 

paragraph (6) of the definition of 

‘‘current expenditures’’. 

The revisions read as follows: 

§ 222.161 How is State aid treated under 

section 8009 of the Act? 

(a) * * * 

(1) * * * 

(ii) A State may not take into 

consideration— 

(A) That portion of an LEA’s payment 

that is generated by the portion of a 

weight in excess of one under section 

8003(a)(2)(B) of the Act (children 

residing on Indian lands); 

(B) Payments under section 8003(d) of 

the Act (children with disabilities); or 

(C) The amount that an LEA receives 

under section 8003(b)(2) that exceeds 

the amount the LEA would receive if 

eligible under section 8003(b)(1) and not 

section 8003(b)(2) (heavily impacted 

LEAs). 

* * * * * 

(5) A State may not take into 

consideration payments under the Act 

before its State aid program has been 

certified by the Secretary. 

* * * * * 

§ 222.163 [Amended] 

■ 38. Section 222.163 is amended by: 

■ A. In paragraph (a), removing the 

phrase ‘‘and Pub. L. 81–874’’. 

■ B. In paragraph (c), removing the 

phrase ‘‘and Pub. L. 81–874’’ and ‘‘or 

payments under Pub. L. 81–874’’. 

§ 222.165 [Amended] 

■ 39. Section 222.165 is amended in 

paragraph (a)(1) by removing the 

number ‘‘30’’ and adding in its place the 

number ‘‘60’’. 

§ 222.175 [Amended] 

■ 40. Section 222.175 is amended by: 

■ A. Removing paragraphs (a)(4) and (8) 

and redesignating paragraphs (a)(5) 

through (7) as paragraphs (a)(4) through 

(6), respectively. 

■ B. Redesignating paragraph (b) as 

paragraph (c) and adding a new 

paragraph (b). 

The addition reads as follows: 

§ 222.175 What regulations apply to 

recipients of funds under this program? 

* * * * * 

(b) The OMB Guidelines to Agencies 

on Governmentwide Debarment and 

Suspension (Nonprocurement) in 2 CFR 

part 180, as adopted and amended as 

regulations of the Department in 2 CFR 

part 3485, and the Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards in 2 CFR part 200, as 

adopted and amended in 2 CFR part 

3474. 

* * * * * 

[FR Doc. 2015–14213 Filed 6–10–15; 8:45 am] 

BILLING CODE 4000–01–P 

DEPARTMENT OF COMMERCE 

Patent and Trademark Office 

37 CFR Parts 2 and 7 

[Docket No. PTO–T–2013–0027] 

RIN 0651–AC89 

Changes in Requirements for 

Collective Trademarks and Service 

Marks, Collective Membership Marks, 

and Certification Marks 

AGENCY: United States Patent and 

Trademark Office, Commerce. 

ACTION: Final rule. 

SUMMARY: The United States Patent and 

Trademark Office (‘‘USPTO’’) is 

amending the rules related to collective 

trademarks, collective service marks, 

and collective membership marks 

(together ‘‘collective marks’’), and 

certification marks to clarify application 

requirements, allegations of use 

requirements, multiple-class application 

requirements, and registration 

maintenance requirements for such 


Lhorne on DSK2VPTVN1PROD with RULES