(1) in subsection (a) by adding at the end the 
following: ‘‘The Secretary may base such a deter-
mination on original records (including facsimiles or 
other reproductions of those records) documenting 
the assessed value of that real property, prepared by 
a legally authorized official as of the time of the 
Federal acquisition, or other records that the Sec-
retary determines to be appropriate and reliable, in-
cluding Federal agency records or local historical 
records.’’; 
(2) in subsection (f) by striking paragraphs (4) 
and (5); 
(3) in subsection (h) by striking paragraphs (1) 
through (4) and inserting the following: 
‘‘(1) FOUNDATION
PAYMENTS
FOR
CURRENT 
ELIGIBLE LOCAL EDUCATIONAL AGENCIES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
first make a foundation payment to each local 
educational agency that was eligible for a pay-
ment under this section for fiscal year 2006. 
‘‘(B) AMOUNT.—The amount of a payment 
under subparagraph (A) for a local educational 
agency shall be equal to 90 percent of the local 
educational agency’s calculated payment for fis-
cal year 2006. 
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‘‘(C) INSUFFICIENT APPROPRIATIONS.—If 
the amount appropriated under section 8014(a) 
is insufficient to pay the full amount deter-
mined under this paragraph for all eligible local 
educational agencies for the fiscal year, then 
the Secretary shall ratably reduce the payment 
to each local educational agency under this 
paragraph. 
‘‘(2) FOUNDATION PAYMENTS FOR LOCAL EDU-
CATIONAL AGENCIES DEEMED ELIGIBLE AFTER FIS-
CAL YEAR 2006.— 
‘‘(A) IN GENERAL.—From those funds re-
maining after making payments under para-
graph (1) for the fiscal year involved, the Sec-
retary shall make a payment to each local edu-
cational agency deemed eligible after fiscal year 
2006 for the fiscal year in which such agency 
was deemed eligible. 
‘‘(B) IN
GENERAL.—The first payment 
made to a local educational agency under sub-
paragraph (A) shall thereafter be treated as the 
foundation payment for that local educational 
agency. 
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‘‘(C) AMOUNTS.—The amount of a pay-
ment under subparagraph (A) for a local edu-
cational agency shall be determined as follows: 
‘‘(i) Calculate the local educational 
agency’s maximum payment under sub-
section (b). 
‘‘(ii) Calculate the percentage that the 
amount 
appropriated 
under 
section 
8014(a) for the most recent fiscal year for 
which the Secretary has completed making 
payments under this section is of the total 
maximum payments for such fiscal year for 
all eligible local educational agencies and 
multiply the agency’s maximum payment 
by such percentage. 
‘‘(iii) Multiply the amount determined 
under clause (ii) by 90 percent. 
‘‘(3) REMAINING FUNDS.—From any funds re-
maining after making payments under paragraphs 
(1) and (2) for the fiscal year involved, the Sec-
retary shall make a payment to each local edu-
cational agency that received a foundation payment 
under paragraphs (1) or (2) for the fiscal year in-
volved in an amount that bears the same relation to 
the remainder as a percentage share determined for 
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the local educational agency (by dividing the max-
imum amount that the agency is eligible to receive 
under subsection (b) by the total of the maximum 
amounts for all such agencies) bears to the percent-
age share determined (in the same manner) for all 
local educational agencies eligible to receive a pay-
ment under this section for the fiscal year involved, 
except that, for the purpose of calculating a local 
educational agency’s maximum payment under sub-
section (b), data from the most current fiscal year 
shall be used.’’; 
(4) by striking subsections (i), (k), and (m); 
and 
(5) by redesignating subsections (l) and (n) as 
(i) and (j), respectively. 
SEC. 3. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED 
CHILDREN. 
Section 8003 of that Act (20 U.S.C. 7703) is amend-
ed— 
(1) in subsection (a)— 
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by inserting after 
‘‘such agency,’’ the following: ‘‘including those 
children enrolled in a State that has a State 
open enrollment policy (but not including chil-
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dren enrolled in a distance learning program 
not residing within the defined boundaries of 
the agency),’’; 
(B) in paragraph (2)— 
(i) by redesignating subparagraphs 
(D) through (F) as (E) through (G), re-
spectively; 
(ii) by inserting after subparagraph 
(C) the following: 
‘‘(D) Multiply the number of children de-
scribed in subparagraph (A) and (B) of sub-
section (a)(1) by a factor of 1.35 if the local 
educational agency has a total student enroll-
ment of not less than 25,000 students, of which 
not less than 50 percent are children described 
in (a)(1) and not less than 6,000 of such chil-
dren are children described in subparagraph 
(A) and (B) of subsection (a)(1).’’; and 
(iii) in subparagraph (F) (as so redes-
ignated) by striking ‘‘.10’’ and inserting 
‘‘.05’’; 
(C) in paragraph (4)(B), in each of clauses 
(i)(I) and (ii)(I), by striking ‘‘3 fiscal years’’ 
and inserting ‘‘4 fiscal years’’; and 
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(D) in paragraph (5) by inserting after 
‘‘1984,’’ the following: ‘‘or under lease of off- 
base property under subchapter IV of chapter 
169 of part IV of subtitle A of title 10, United 
States Code (10 U.S.C. 2871 et seq.),’’; 
(2) in subsection (b)(2)— 
(A) in subparagraph (B)— 
(i) in the subparagraph heading by 
striking ‘‘CONTINUING’’; 
(ii) in clause (i) by striking subclauses 
(I) and (II) and inserting the following: 
‘‘(I) is a local educational agency 
whose boundaries are the same as a 
Federal military installation or the 
boundaries are the same as island 
property designated by the Secretary 
of the Interior to be property that is 
held in trust by the Federal Govern-
ment and the agency has no taxing 
authority, or the agency; 
‘‘(II) has an enrollment of chil-
dren described in subsection (a)(1) 
that constitutes a percentage of the 
total student enrollment of the agency 
that is not less than 45 percent; 
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