Impact Aid Technical Amendments of 1996
PL 104-195 (H.R.3269), enacted 09/16/1996

PUBLIC LAW 104^195—SEPT. 16, 1996 
110 STAT. 2379 
Public Law 104-195 
104th Congress 
An Act 
To amend the Impact Aid program to provide for a hold-harmless with respect 
„ 
._ .___ 
to amounts for payments relating to the Federal acquisition of real property, 
—^L:—'. 
and for other purposes. 
[H.R. 3269] 
Be it enacted by the Senate and House of Representatives 
of 
the United States of America in Congress assembled, 
SECTION 1. HOLD-HARMLESS AMOUNTS FOR PAYMENTS RELATING 
TO FEDERAL ACQUISITION OF REAL PROPERTY. 
Section 8002 of the Elementary and Secondary Education Act 
of 1965 (20 U.S.C. 7702) is amended by adding at the end the 
following new subsections: 
"(g) FORMER DISTRICTS.— 
"(1) IN GENERAL.—^Where the school district of any local 
educational agency described in paragraph (2) is formed at 
any time after 1938 by the consolidation of two or more former 
school districts, such agency may elect (at any time such agency 
files an application under section 8005) for any fiscal year 
after fiscal year 1994 to have (A) the eligibility of such local 
educational agency, and (B) the amount which such agency 
shall be eligible to receive, determined under this section only 
with respect to such of the former school districts comprising 
such consolidated school districts as such agency shall designate 
in such election. 
"(2) ELIGIBLE LOCAL EDUCATIONAL AGENCIES.—A local edu-
cational agency referred to in paragraph (1) is any local 
educational agency that, for fiscal year 1994 or any preceding 
fiscal year, applied for and was determined eligible under sec-
tion 2(c) of the Act of September 30, 1950 (Public Law 874, 
81st Congress) as such section was in effect for such fiscal 
year. 
"(h) HOLD-HARMLESS AMOUNTS.— 
"(1) IN GENERAL.—^Except as provided in paragraph (2)(A), 
the total amount that the Secretary shall pay under subsection 
(b) to a local educational agency that is otherwise eligible 
for a payment under this section— 
"(A) for fiscal year 1995 shall not be less than 85 
percent of the amount such agency received for fiscal year 
1994 under section 2 of the Act of September 30, 1950 
(Public Law 874, 81st Congress) as such section was in 
effect on September 30, 1994; or 
"(B) for fiscal year 1996 shall not be less than 85 
percent of the amount such agency received for fiscal year 
1995 under subsection (b). 
110 STAT. 2380 
PUBLIC LAW 104-195—SEPT. 16, 1996 
"(2) RATABLE REDUCTIONS.—(A)(i) If necessary in order to 
make pajnnents to local educational agencies in accordance 
with paragraph (1) for any fiscal year, the Secretary first shall 
ratably reduce payments under subsection (b) for such year 
to local educational agencies that do not receive a payment 
under this subsection for such year. 
"(ii) If additional funds become available for making pay-
ments under subsection (b) for such year, then pajrments that 
were reduced under clause (i) shall be increased on the same 
basis as such payments were reduced. 
"(B)(i) If the sums made available under this title for 
any fiscal year are insufficient to pay the full amounts that 
all local educational agencies in all States are eligible to receive 
under paragraph (1) after the application of subparagraph (A) 
for such year, then the Secretary shall ratably reduce payments 
under paragraph (1) to all such agencies for such year. 
"(ii) If additional funds become available for making pay-
ments under paragraph (1) for such fiscal year, then payments 
that were reduced under clause (i) shall be increased on the 
same basis as such payments were reduced.". 
SEC. 2. APPLICATIONS FOR INCREASED PAYMENTS. 
(a) PAYMENTS.—Notwithstanding any other provision of law— 
South Dakota. 
(1) the Bonesteel-Fairfax School District Number 26-5, 
South Dakota, and the Wagner Community School District 
Number 11-4, South Dakota, shall be eligible to apply for 
payment for fiscal year 1994 under section 3(d)(2)(B) of the 
Act of September 30, 1950 (Public Law 874, 81st Congress) 
(as such section was in effect on September 30, 1994); and 
(2) the Secretary of Education shall use a subgroup of 
10 or more generally comparable local educational agencies 
for the purpose of calculating a pajntnent described in paragraph 
(1) for a local educational agency described in such paragraph. 
(b) APPLICATION.—In order to be eligible to receive a payment 
described in subsection (a), a school district described in such sub-
section shall apply for such payment within 30 days after the 
date of enactment of this Act. 
(c) CONSTRUCTION.—^Nothing in this section shall be construed 
to require a local educational agency that received a pa3anent 
under section 3(d)(2)(B) of the Act of September 30, 1950 (Public 
Law 874, 81st Congress) (as such section was in effect on September 
30, 1994) for fiscal year 1994 to return such pajnnent or a portion 
of such payment to the Federal Grovemment. 
SEC. 3. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN 
RESIDING 
ON 
MILITARY 
INSTALLATION HOUSING 
UNDERGOING RENOVATION. 
(a) IN GENERAL.—Section 8003(a) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7703(a)) is amended 
by adding at the end the following new paragraph: 
"(4) MILITARY INSTALLATION HOUSING UNDERGOING RENOVA-
TION.—For purposes of computing the amount of a payment 
for a local educational agency for children described in para-
graph (l)(D)(i), the Secretary shall consider such children to 
be children described in paragraph (1)(B) if the Secretary deter-
mines, on the basis of a certification provided to the Secretary 
by a designated representative of the Secretary of Defense, 
that such children would have resided in housing on FederEil 
PUBLIC LAW 104-195—SEPT. 16, 1996 
110 STAT. 2381 
property in accordance with paragraph (1)(B) except that such 
housing was undergoing renovation on the date for which the 
Secretary determines the number of children under paragraph 
(1).". 
(b) EFFECTIVE DATE.—Paragraph (4) of section 8003(a) of the 
20 use 7703 
Elementary and Secondary Education Act of 1965, as added by ^'^^• 
subsection (a), shall apply with respect to fiscal years after fiscal 
year 1995. 
SEC. 4. COMPUTATION OF PAYMENTS FOR EUGIBLE FEDERALLY CON-
NECTED CHILDREN IN STATES WITH ONLY ONE LOCAL 
EDUCATIONAL AGENCY. 
(a) IN GENERAL.—Section 8003(b) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7703(b)) is amended 
by adding at the end the following new paragraph: 
"(3) STATES WITH ONLY ONE LOCAL EDUCATIONAL AGENCY.— 
"(A) IN GENERAL.—In any of the 50 States of the United 
States in which there is only one local educational agency, 
the Secretary shall, for purposes of paragraphs (1)(B), 
(1)(C), and (2) of this subsection, and subsection (e), con-
sider each administrative school district in the State to 
be a separate local educational agency. 
"(B) COMPUTATION OF MAXIMUM AMOUNT OF BASIC SUP-
PORT PAYMENT AND THRESHOLD PAYMENT.—In computing 
the maximum payment amount under paragraph (1)(C) 
and the learning opportunity threshold payment under 
paragraph (2)(B) for an administrative school district 
described in subparagraph (A)— 
"(i) the Secretary shall first determine the maxi-
mum payment amount and the total current expendi-
tures for the State as a whole; and 
"(ii) the Secretary shall then— 
"(I) proportionately allocate such maximum 
payment amount amon^ the administrative school 
districts on the basis of the respective weighted 
student units of such districts; and 
"(II) proportionately allocate such total current 
expenditures among th(^ administrative school dis-
tricts on the basis of the respective number of 
students in average da|ly attendance at such dis-
tricts.". 
(b) EFFECTIVE DATE.—Paragraph (3) of section 8003(b) of the 
20 use 7703 
Elementary and Secondary Education Act of 1965, as added by no^. 
subsection (a), shall apply with respect to fiscal years after fiscal 
year 1994. 
I 
SEC. 5. DATA AND DETERMINATION OF AVAILABLE FUNDS. 
(a) DATA.—^Paragraph (4) of section f 8003(f) of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 7703(f)) is 
amended— 
(1) in the heading, by striking "CURRENT YEAR"; 
(2) by amending subparagraph (A) to read as follows: 
"(A) shall use student, revenue, and tax data from 
the second fiscal year preceding the fiscal year for which 
the local educational agency is appl3dng for assistance 
under this subsection;"; and 
110 STAT. 2382 
PUBLIC LAW 104-195—SEPT. 16, 1996 
(3) in subparagraph (B), by striking "such year" and insert-
ing "the fiscal year for which the local educational agency 
is appl3dng for assistance under this subsection". 
(b) DETERMINATION OF AVAILABLE FUNDS.—^Paragraph (3) of 
section 8003(f) of the Elementary and Secondary Education Act 
of 1965 (20 U.S.C. 7703(f)) is amended— 
(1) in the matter preceding subclause (I) of subparagraph 
(A)(iii), by inserting *, except as provided in subparagraph 
(C)," after "but"; and 
(2) by adding at the end the following new subparagraph: 
"(C) 
DETERMINATION OF AVAILABLE FUNDS.—^When 
determining the amount of funds available to the local 
educational agency for current expenditures for purposes 
of subparagraph (A)(iii) for a fiscal year, the Secretary 
shall include, with respect to the local educational agency's 
opening cash balance for such fiscal year, the portion of 
such balance that is the greater of— 
"(i) the amount that exceeds the maximum amount 
of funds for current expenditures that the local edu-
cational agency was allowed by State law to carry 
over from the prior fiscal year, if State restrictions 
on such amounts were applied uniformly to all local 
educational agencies in the State; or 
"(ii) the amount that exceeds 30 percent of the 
local educational agency's operating costs for the prior 
fiscal year.". 
20 use 7703 
(c) EFFECTIVE DATE.—^The amendments made by subsections 
note. 
(a) and (b) shall apply with respect to fiscal years after fiscal 
year 1996. 
SEC. 
6
. 
PAYMENTS 
RELATING 
TO 
FEDERAL 
PROPERTY. 
Section 8002 of the Elementary and Secondary Education Act 
of 1965 (20 U.S.C. 7702) (as amended by section 1) is further 
amended by adding at the end thereof the following new subsection: 
"(i) PRIORITY PAYMENTS.—Notwithstanding subsection (b)(1)(B), 
and for any fiscal year beginning with fiscal year 1997 for which 
the amount appropriated to carry out this section exceeds the 
amount so appropriated for fiscEil year 1996, the Secretary shall 
first use such excess amount to increase the pajmaent that would 
otherwise be made under this section to not more than 50 percent 
of the maximum amount determined under subsection (b) for any 
local educational agency that— 
"(1) received a payment under this section for fiscal yeeir 
1996; 
"(2) serves a school district that contains all or a portion 
of a United States military academy; 
"(3) serves a school district in which the local tax assessor 
has certified that at least 60 percent of the real property 
is federally owned; and 
"(4) demonstrates to the satisfaction of the Secretary that 
such agency's per-pupil revenue derived from local sources for 
current expenditures is not less than that revenue for the 
preceding fiscal year.". 
SEC. 7. TREATMENT OF IMPACT AID PAYMENTS. 
(a) IN GENERAL.—^The Secretary of Education shall treat any 
State as having met the requirements of section 5(d)(2)(A) of the 
Act of September 30, 1950 (PubUc Law 874, 81st Congress) for 
PUBLIC LAW 104-195—SEPT. 16, 1996 
110 STAT. 2383 
fiscal year 1991 (as such section was in effect for such fiscal year), 
and as not having met those requirements for each of the fiscal 
years 1992, 1993, and 1994 (as such section was in effect for 
fiscal year 1992, 1993, and 1994, respectively), if— 
(1) the State's program of State aid was not certified by 
the Secretary under section 5(d)(2)(C)(i) of the Act of September 
30, 1950 (Public Law 874, 81st Congress) for any fiscal year 
prior to fiscal year 1991; 
(2) the State submitted timely notice under that section 
of the State's intention to seek that certification for fiscal year 
1991; 
(3) the Secretary determined that the State did not meet 
the requirements of section 5(d)(2)(A) of such Act for fiscal 
year 1991; and 
(4) the State made a payment to each local educational 
agency in the State (other than a local educational agency 
that received a payment under section 3(d)(2)(B) of such Act 
for fiscal year 1991) in an amount equal to the difference 
between the amount such agency received under such Act for 
fiscal year 1991 and the amount such agency would have 
received under such Act for fiscal year 1991 if payments under 
such Act had not been taken into consideration in awarding 
State aid to such agencies for fiscal year 1991. 
(b) REPAYMENT NOT REQUIRED.—Notwithstanding any other 
provision of law, any local educational agency in a State that 
meets the requirements of paragraphs (1) through (4) of subsection 
(a) and that received funds under section 3(d)(2)(B) of the Act 
of September 30, 1950 (Public Law 874, 81st Congress) for fiscal 
year 1991 (as such section was in effect for such fiscal year) shall 
not, by virtue of subsection (a), be required to repay those funds 
to the Secretary of Education. 
SEC. 8. SPECIAL RULE RELATING TO AVAILABIUTY OF FUNDS FOR 
THE LOCAL EDUCATIONAL AGENCY SERVING THE NORTH 
HANOVER TOWNSHIP PUBUC SCHOOLS, NEW JERSEY, 
UNDER PUBLIC LAW 874,81ST CONGRESS. 
The Secretary of Education shall not consider any funds that 
the Secretary of Education determines the local educational agency 
serving the North Hanover Township Public Schools, New Jersey, 
has designated for a future liability under an early retirement 
incentive program as funds available to such local educational 
agency for purposes of determining the eligibility of such local 
educational agency for a payment for fiscal year 1994, or the amount 
of any such pa3anent, under section 3(d)(2)(B) of the Act of Septem-
ber 30, 1950 (Public Law 874, 81st Congress), as such section 
was in effect for such fiscal year. 
SEC. 
9
. 
CORRECTED 
LOCAL 
CONTRIBUTION 
RATE. 
(a) COMPUTATION.—The Secretary of Education shall compute 
a payment for a local educational agency under the Act of September 
30, 1950 (Public Law 874, 81st Congress) for each of the fiscal 
years 1991 through 1994 (as such Act was in effect for each of 
those fiscal years, as the case may be) using a corrected local 
contribution rate based on generally comparable school districts, 
if— 
(1) an incorrect local contribution rate was submitted to 
the Secretary of Education by the State in which such agency 
110 STAT. 2384 
PUBLIC LAW 104-195—SEPT. 16, 1996 
is located, and the incorrect local contribution rate was verified 
as correct by the Secretary of Education; and 
(2) the corrected local contribution rate is subject to review 
by the Secretary of Education. 
(b) PAYMENT.—Using funds appropriated under the Act of 
September 30, 1950 (Public Law 874, 81st Congress) for fiscal 
ye£irs 1991 through 1994 that remain available for obligation (if 
any), the Secretary of Education shall make payments based on 
the computations described in subsection (a) to the local educational 
agency for such fiscgJ years. 
SEC. 10. STATE EQUALIZATION PLANS. 
Subparagraph (A) of section 8009(b)(2) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7709(b)(2)) is amended 
by striking "more thsin" and £dl that follows through the period 
and inserting "more than 25 percent.". 
Approved September 16, 1996. 
LEGISLATIVE HTSTORY—H.R. 3269 (S. 1509): 
HOUSE REPORTS: No. 104-560 (Comm. on Economic and Educational Opportuni-
ties). 
CONGRESSIONAL RECORD: 
Vol. 141 (1995): Dec. 22, S. 1509 considered and passed Senate. 
Vol. 142 (1996): May 7, H.R. 3269 considered and passed House. 
Aug. 2, considered and passed Senate, amended. 
Sept. 4, House concurred in Senate amendment.