[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 874 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 874

 To reauthorize Public Law 81-874 (Impact Aid), and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                May 4 (legislative day, April 19), 1993

 Mr. Pressler (for himself, Mr. Warner, Mr. Daschle, Mr. Krueger, Mr. 
    Shelby, Mr. Gorton, Mr. Burns, and Mr. Campbell) introduced the 
 following bill; which was read twice and referred to the Committee on 
                       Labor and Human Resources

_______________________________________________________________________

                                 A BILL


 
 To reauthorize Public Law 81-874 (Impact Aid), and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Impact Aid Reauthorization Act of 
1993''.

SEC. 2. REAUTHORIZATION.

    Public Law 81-874 (20 U.S.C. 236 et seq.) is amended to read as 
follows:

``TITLE I--FINANCIAL ASSISTANCE FOR LOCAL EDUCATIONAL AGENCIES IN AREAS 
                      AFFECTED BY FEDERAL ACTIVITY

``SEC. 101. DECLARATION OF POLICY.

    ``(a) Policy.--In recognition of the responsibility of the United 
States to provide an educational program to local educational agencies 
impacted by the Federal presence of Federal land or that serve 
dependents of federally connected personnel, including children of 
those in the uniformed service, children residing on Federal Indian 
trust land and children residing on nontaxable federally subsidized 
low-rent housing projects, it shall be the policy of the United States 
to acknowledge that--
            ``(1) the need to ensure fair access and equitable 
        treatment of our Nation's children in the area of free public 
        education;
            ``(2) such fair access and equitable treatment of our 
        Nation's children is hampered when Federal ownership of real 
        property or Federal activities within a community adversely 
        affect any or all of the basic revenue sources which local 
        educational agencies depend upon for such fair access and 
        equitable treatment;
            ``(3) such local educational agencies are entitled to 
        relief from the unique burdens placed upon them by the Federal 
        ownership of real property or Federal activity in the form of 
        compensation for the basic educational program of the federally 
        connected student;
            ``(4) education is central to our Nation's quality of life 
        and the survival of our Nation's democratic society;
            ``(5) education is at the heart of our Nation's economic 
        strength and security, creativity, investment in the sciences, 
        and the perpetuation of our Nation's cultural values;
            ``(6) education is the key to United States international 
        competitiveness;
            ``(7) every child should be given an equal opportunity to 
        learn;
            ``(8) the United States presence creates a responsibility 
        to assure fair access and equitable educational opportunity for 
        all children residing on Federal land or otherwise affected 
        adversely by the Federal presence;
            ``(9) the United States presence should not reduce the 
        ability of a school district to achieve our Nation's education 
        goals; and
            ``(10) the failure to fully compensate such affected local 
        educational agencies, or the reduction in such compensation, 
        places the education and future of such students in jeopardy.
    ``(b) Declaration of Policy.--The Congress declares it to be the 
policy of the United States to provide financial assistance (as set 
forth in the following sections of this Act) for those local 
educational agencies upon which the United States has placed financial 
burdens by reason of the fact that--
            ``(1) the revenues available to such agencies from State 
        and local sources have been reduced as the result of--
                    ``(A) the acquisition of real property by the 
                United States; and
                    ``(B) providing retail services on the property 
                owned by the United States;
            ``(2) such agencies provide education for children residing 
        on Federal property;
            ``(3) such agencies provide education for children whose 
        parents are employed on Federal property; or
            ``(4) there has been a sudden and substantial increase in 
        school attendance as the result of Federal activities.
    ``(c) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        $900,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the 4 succeeding fiscal years, to carry 
        out this Act.
            ``(2) Contingency fund.--There are authorized to be 
        appropriated $14,000,000 for fiscal year 1994, which shall be 
        deposited into the contingency fund established under section 
        202.
    ``(d) Reservations.--
            ``(1) Federal acquisition of real property.--The Secretary 
        shall reserve 2.5 percent of the amount appropriated pursuant 
        to the authority of subsection (c)(1) in each fiscal year to 
        carry out section 102.
            ``(2) Department of education contingency fund.--Beginning 
        in fiscal year 1995 and in each succeeding fiscal year through 
        fiscal year 1998, the Secretary shall annually reserve from the 
        amount appropriated pursuant to the authority of subsection 
        (c)(1) and deposit into the contingency fund established under 
        section 202 an amount which is necessary to make the balance of 
        such contingency fund in such fiscal year (prior to withdrawal 
        of any funds from such fund for such fiscal year) equal to 2 
        percent of the amount appropriated pursuant to the authority of 
        subsection (c)(1) for such fiscal year.
            ``(3) Reservation for heavily impacted high need areas.--
        The Secretary, based on the annual estimate developed pursuant 
        to section 103(d)(3)(D), shall annually reserve from the amount 
        appropriated pursuant to the authority of subsection (c)(1) in 
        each fiscal year the amount necessary to carry out the 
        provisions of section 103(d)(3).
    ``(e) Forward Funding.--
            ``(1) Availability for obligation.--For the purpose of 
        affording adequate notice of funding available under this Act, 
        amounts appropriated in an appropriation Act for any fiscal 
        year to carry out this Act shall become available for 
        obligation on July 1 of that fiscal year.
            ``(2) Effectuation of forward funding.--In order to effect 
        a transition to the forward funding method of timing 
        appropriation action described in paragraph (1), there are 
        authorized to be appropriated, in an appropriation Act or Acts 
        for the same fiscal year, two separate appropriations to carry 
        out this Act, the first of which shall not be subject to 
        paragraph (1).

``SEC. 102. FEDERAL ACQUISITION OF REAL PROPERTY.

    ``(a) In General.--Where the Secretary, after consultation with any 
local educational agency and with the appropriate State educational 
agency, determines for any fiscal year ending prior to October 1, 1998, 
that the United States owns Federal property in the school district of 
such local educational agency, and that such property--
            ``(1) has been acquired by the United States since 1938;
            ``(2) was not acquired by exchange for other Federal 
        property in the school district which the United States owned 
        before 1939; and
            ``(3) had an assessed value (determined as of the time or 
        times when so acquired) aggregating 10 percent or more of the 
        assessed value of all real property in the school district 
        (similarly determined as of the time or times when such Federal 
        property was so acquired);
then such local educational agency shall be entitled to receive for 
such fiscal year such amount as, in the judgment of the Secretary, is 
equal to the continuing Federal responsibility for the additional 
financial burden with respect to current expenditures placed on such 
agency by such acquisition of property (in accordance with section 
222.98 of title 34, Code of Federal Regulations (as in effect on 
December 5, 1991), and without regard to the provisions of section 
222.101 of title 34, Code of Federal Regulations (as in effect on 
December 5, 1991)). Such entitled amount shall be reduced by any 
revenue received during the preceding fiscal year by the local 
educational agency that was generated directly from the Federal 
property or activities in or on that property and was exclusively 
provided to such local educational agency.
    ``(b) Applicability to the Tennessee Valley Authority Act.--For the 
purposes of this section any real property with respect to which 
payments are being made under section 13 of the Tennessee Valley 
Authority Act of 1933, as amended, shall not be regarded as Federal 
property.
    ``(c) Consolidated Districts.--Where the school district of any 
local educational agency shall have been formed at any time after 1938 
by the consolidation of two or more former school districts, such 
agency may elect (at the time such agency files application under 
section 105) for any fiscal year to have--
            ``(1) the eligibility of such local educational agency; and
            ``(2) the amount which such agency shall be entitled to 
        receive,
determined under this section only with respect to such of the former 
school districts comprising such consolidated school districts as the 
agency shall designate in such election.
    ``(d) Ownership.--The United States shall be deemed to own Federal 
property for the purposes of this Act where--
            ``(1) prior to the transfer of Federal property, the United 
        States owned Federal property meeting the requirements of 
        paragraphs (1), (2), and (3) of subsection (a); and
            ``(2) the United States transfers a portion of the property 
        referred to in paragraph (1) to another nontaxable entity, and 
        the United States--
                    ``(A) requires that the property be used in 
                perpetuity for the public purposes for which it was 
                conveyed;
                    ``(B) requires the grantee of the property to 
                report to the Federal Government (or its agent) setting 
                forth information on the use of the property;
                    ``(C) prohibits the sale, lease assignment or other 
                disposal of the property unless to another eligible 
                government agency and with the approval of the Federal 
                Government (or its agent); and
                    ``(D) reserved to the Federal Government a right of 
                reversion at any time the Federal Government (or its 
                agent) deems it necessary for the national defense.
    ``(e) Special Rule.--Beginning with fiscal year 1991, any school 
district which (1) as demonstrated by written evidence from the United 
States Forest Service satisfactory to the Secretary, contains between 
50,000 and 55,000 acres of land that has been acquired by the United 
States Forest Service between 1915 and 1990; and (2) serves a county 
chartered by State law in 1875, shall be deemed to have met the 
requirements of subsection (a)(3).
    ``(f) Hold Harmless.--No local educational agency which is eligible 
for a payment under this section in any fiscal year shall receive a 
payment under this section in such fiscal year in an amount which is 
less than 90 percent of the amount such agency received under this 
section in the preceding fiscal year.
    ``(g) Additional Information.--Whenever the Secretary, after 
receiving an application from any local educational agency under this 
section requests further information from the local educational agency 
for the Secretary's review of the application, the Secretary shall take 
such measures as are necessary to ensure that all information is 
gathered in a reasonable time, pursuant to regulations promulgated by 
the Secretary, in order to ensure that payments under this section for 
that fiscal year are provided to all applicant local educational 
agencies not later than December 1 of such fiscal year.

``SEC. 103. FEDERALLY CONNECTED CHILDREN.

    ``(a) Computation of Payment.--
            ``(1) In general.--For the purpose of computing the amount 
        to which a local educational agency is to be paid under this 
        section for any fiscal year, the Secretary shall first 
        determine the number of children who were in average daily 
        attendance at the schools of such agency, and for whom such 
        agency provided free public education, during the preceding 
        fiscal year, and--
                    ``(A) while residing on Federal property did so 
                with a parent employed on Federal property situated (i) 
                in whole or in part in the county in which the school 
                district of such agency is located, or (ii) if not in 
                such county, in whole or in part in the same State as 
                the school district of such agency;
                    ``(B) while residing on Federal property had a 
                parent who was on active duty in the uniformed services 
                (as defined in section 101 of title 37, United States 
                Code);
                    ``(C) while in attendance at such schools, either--
                            ``(i) resided on Federal property;
                            ``(ii) resided with a parent employed on 
                        Federal property situated (I) in whole or in 
                        part in the county in which the school district 
                        of such agency is located, or in whole or in 
                        part in the school district of such agency if 
                        the school district is located in more than one 
                        county, or (II) if not in such county or 
                        district, in whole or in part in the same State 
                        as the school district of such agency; or
                            ``(iii) resided in any low-rent housing 
                        project as defined in section 204(a)(1)(C) of 
                        this Act; or
                    ``(D) had a parent who was on active duty in the 
                uniformed services (as defined in section 101 of title 
                37, United States Code).
            ``(2) Children residing on indian lands.--In making a 
        determination under paragraph (1)(B) with respect to a local 
        educational agency for any fiscal year, the Secretary shall 
        include the number of children who were in average daily 
        attendance at the schools of such agency, and for whom such 
        agency provided free public education, during the preceding 
        fiscal year, and who, while in attendance at such schools, 
        resided on Indian lands, as described in subparagraph (A) of 
        section 204(1).
    ``(b) Eligibility for Payments.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        local educational agency shall be entitled to receive a payment 
        for any fiscal year with respect to a number of children 
        determined under subsection (a), unless--
                    ``(A) the number of children so determined with 
                respect to such agency amounts to--
                            ``(i) at least 400 such children; or
                            ``(ii) a number of such children which 
                        equals at least 3 percent of the total number 
                        of children who were in average daily 
                        attendance, during the preceding year, at the 
                        schools of such agency and for whom such agency 
                        provided free public education,
                whichever is the lesser;
                    ``(B) such local educational agency is making a tax 
                effort, or complying with other State fiscal 
                requirements, required for eligibility for State 
                education funding; and
                    ``(C) such local educational agency--
                            ``(i) is certified or accredited by a--
                                    ``(I) State educational agency or 
                                regional accrediting association 
                                recognized by the Secretary, or is a 
                                candidate in good standing for such 
                                certification or accreditation under 
                                the rules of the State educational 
                                agency or regional accrediting 
                                association; or
                                    ``(II) tribal department of 
                                education if such certification or 
                                accreditation is accepted by a 
                                generally recognized regional or State 
                                certification or accreditation agency; 
                                or
                            ``(ii) demonstrates to the satisfaction of 
                        the Secretary that credits achieved by the 
                        students of such local educational agency are, 
                        or will be, accepted at grade level by a State 
                        or regional accrediting agency or association.
            ``(2) Continuing eligibility; special rules.--(A) If a 
        local educational agency is eligible for a payment for any 
        fiscal year by the operation of paragraph (1)(A)(ii), such 
        agency shall continue to be so eligible for the 2 succeeding 
        fiscal years even if such agency fails to meet the requirement 
        of such paragraph during such succeeding fiscal years, except 
        that the number of children determined for the second such 
        succeeding fiscal year with respect to such agency for the 
        purpose of subsection (c) shall not exceed 50 percent of the 
        number of children determined with respect to such agency for 
        the purpose of such paragraph for the last fiscal year which 
        such agency was so eligible.
            ``(B) If the Secretary determines with respect to any local 
        educational agency for any fiscal year that--
                    ``(i) such agency does not meet the requirement of 
                paragraph (1)(A)(ii); and
                    ``(ii) the application of such requirement, because 
                of exceptional circumstances, would defeat the purposes 
                of this title,
        then the Secretary is authorized to waive such requirement with 
        respect to such agency.
    ``(c) Allotment Formula; Determination of Equal Opportunity Cost.--
            ``(1) Allotment formula.--The amount of the payment to 
        which a local educational agency shall be entitled to receive 
        under this section is equal to such agency's equal opportunity 
        cost. A local educational agency's equal opportunity cost shall 
        be determined as follows:
                    ``(A) Calculate the total number of weighted 
                student units (determined in accordance with paragraph 
                (2)) for each child eligible to be counted by such 
                agency in accordance with subsection (a).
                    ``(B) Multiply the total number of weighted student 
                units determined under subparagraph (A) by the local 
                contribution rate (determined in accordance with 
                paragraph (3)).
            ``(2) Determination of weighted student unit.--The 
        Secretary shall calculate the total number of weighted student 
        units for a local educational agency as follows:
                    ``(A) Children living on indian lands.--(i) Each 
                child described in subsection (a)(2) who is not 
                receiving services under the Individuals with 
                Disabilities Education Act shall be assigned a weighted 
                student unit of 1.350.
                    ``(ii) Each child described in subsection (a)(2) 
                who is eligible for services under the Individuals with 
                Disabilities Education Act and for whom such local 
                educational agency is providing a program designed to 
                meet the special educational and related needs of such 
                children shall be assigned a weighted student unit of 
                2.025.
                    ``(B) Military connected children.--(i) Each child 
                described in subsection (a)(1)(B) who is not receiving 
                services under Individuals with Disabilities Education 
                Act shall be assigned a weighted student unit 1.100.
                    ``(ii) Each child described in subsection (a)(1)(B) 
                who is receiving services under Individuals with 
                Disabilities Education Act shall be assigned a weighted 
                student unit of 1.650.
                    ``(iii) Each child described in subsection 
                (a)(1)(D) who is not receiving services under 
                Individuals with Disabilities Education Act shall be 
                assigned a weighted student unit 0.300.
                    ``(iv) Each child described in subsection (a)(1)(D) 
                who is receiving services under Individuals with 
                Disabilities Education Act shall be assigned a weighted 
                student unit 0.450.
                    ``(C) Other federally connected children.--(i) Each 
                child described in subsection (a)(1)(A) (who is not 
                described in subparagraph (A) or (B)) shall be assigned 
                a weighted student unit of 1.000.
                    ``(ii) Each child described in subsection 
                (a)(1)(C)(iii) (who is not described in subparagraph 
                (A) or (B)) shall be assigned a weighted student unit 
                of 0.300.
                    ``(iii) Each child described in subsection 
                (a)(1)(C)(i) or (a)(1)(C)(ii) (who is not described in 
                subparagraph (A) or (B)) shall be assigned a weighted 
                student unit of 0.200.
                    ``(D) Data.--Calculations of weighted student units 
                for a local educational agency pursuant to this 
                paragraph shall be made on the basis of data from the 
                fiscal year preceding the fiscal year in which such 
                agency applies for a payment under this section in 
                accordance with section 105.
            ``(3) Local contribution rate.--(A) Except as provided in 
        subparagraph (B), in order to compute the local contribution 
        rate for a local educational agency for any fiscal year, the 
        Secretary, after consulting with the State educational agency 
        of the State in which the local educational agency is located 
        and with the local educational agency, shall determine which 
        school districts within such State are generally comparable to 
        the school district of the local educational agency for which 
        the computation is being made. The local contribution rate for 
        such agency shall be the quotient of--
                    ``(i) the aggregate current expenditures, during 
                the third fiscal year preceding the fiscal year for 
                which the computation is made, which the local 
                educational agencies of such comparable school 
                districts derived from local sources, divided by
                    ``(ii) the aggregate number of children in average 
                daily attendance for whom such agency provided free 
                public education during such third preceding fiscal 
                year.
            ``(B)(i) The local contribution rate for a local 
        educational agency in any State shall not be less than--
                    ``(I) 50 percent of the average per pupil 
                expenditure in such State; or
                    ``(II) 50 percent of such expenditures in all the 
                States,
        whichever is greater, except that clause (II) shall not operate 
        in such a manner as to make the local contribution rate for any 
        local educational agency in any State exceed an amount equal to 
        the average per pupil expenditure in such State.
            ``(ii) If the current expenditures in those school 
        districts which the Secretary has determined to be generally 
        comparable to the school district of the local educational 
        agency for which a computation is made under subparagraph (A) 
        are not reasonably comparable because of unusual geographical 
        factors which affect the current expenditures necessary to 
        maintain, in the school district of such agency, a level of 
        education equivalent to that maintained in such other school 
        districts, then the Secretary shall increase the local 
        contribution rate for such agency by such an amount which the 
        Secretary determines will compensate such agency for the 
        increase in current expenditures necessitated by such unusual 
        geographical factors. The amount of any such supplementary 
        payment may not exceed the per pupil share (computed with 
        regard to all children in average daily attendance), as 
        determined by the Secretary, of the increased current 
        expenditures necessitated by such unusual geographic factors.
            ``(iii) The local contribution rate for any local 
        educational agency in--
                    ``(I) the Commonwealth of Puerto Rico, Wake Island, 
                Guam, American Samoa, the Commonwealth of the Northern 
                Mariana Islands, or the Virgin Islands;
                    ``(II) any State in which a substantial proportion 
                of the land is in unorganized territory; or
                    ``(III) any State in which there is only one local 
                educational agency,
        shall be determined for any fiscal year by the Secretary in 
        accordance with policies and principles which will best achieve 
        the purposes of this section and which are consistent with the 
        policies and principles provided in this paragraph for 
        determining local contribution rates in States where it is 
        possible to determine generally comparable school districts.
            ``(C) The local contribution rate for a local educational 
        agency shall include current expenditures from that portion of 
        a real property tax required to be levied, collected, and 
        distributed to local educational agencies by county governments 
        pursuant to State law where the remainder of such real property 
        tax is transferred to the State.
            ``(D) Because local educational agencies for which the 
        boundaries of the school district of such agency are 
        coterminous with the boundaries of a military installation lack 
        a property tax base, the Secretary shall, for the fiscal year 
        beginning October 1, 1993, and for each fiscal year thereafter, 
        establish for such local educational agencies a local 
        contribution rate which is not less than 70 percent of the 
        average per pupil expenditure in all States during the third 
        preceding fiscal year prior to the fiscal year for which the 
        determination is made. The first sentence of this subparagraph 
        shall not apply to local educational agencies in any State in 
        which the State equalization law would prohibit the local 
        educational agency from retaining such additional funds or in 
        which State law requires that the State contribution be reduced 
        in proportion to such additional funds, however the local 
        contribution rate for such agencies shall not be less than 50 
        percent of the average per pupil expenditure in all States 
        during the third preceding fiscal year prior to the fiscal year 
        for which the determination is made.
            ``(E) For the purposes of this paragraph--
                    ``(i) the term `State' does not include the 
                Commonwealth of Puerto Rico, Wake Island, Guam, 
                American Samoa, the Commonwealth of the Northern 
                Mariana Islands, or the Virgin Islands; and
                    ``(ii) the `average per pupil expenditure' in a 
                State shall be--
                            ``(I) the aggregate current expenditures, 
                        during the third fiscal year preceding the 
                        fiscal year for which the computation is made 
                        of all local educational agencies in the State, 
                        divided by
                            ``(II) the aggregate number of children in 
                        average daily attendance for whom such agencies 
                        provide free public education during such third 
                        preceding fiscal year.
    ``(d) Special Rules.--
            ``(1) Children with disabilities.--(A) The Secretary shall 
        by regulation establish criteria for assuring that programs 
        (including preschool programs) provided by local educational 
        agencies for children determined under subsections (a)(1)(B), 
        (a)(1)(D) and (a)(2), who are eligible for services under the 
        Individuals with Disabilities Education Act, are of sufficient 
        size, scope, and quality (taking into consideration the special 
        educational needs of such children) as to give reasonable 
        promise of substantial progress toward meeting those needs, and 
        in the implementation of such regulations the Secretary shall 
        consult with individuals in charge of special education 
        programs for children with disabilities in the local 
        educational agency of the State in which such local educational 
        agency is located.
            ``(B) For the purpose of this paragraph the term `children 
        with disabilities' has the same meaning given such term by 
        section 602(a)(1) of the Individuals with Disabilities 
        Education Act, and the term `children with specific learning 
        disabilities' has the same meaning given such term by section 
        602(a)(15) of such Act.
            ``(2) Indians.--Payments received for children described in 
        subsection (a)(2) may be used to pay tuition for any student 
        not eligible for funding under section 1128 of the Education 
        Amendments of 1978 in any school receiving assistance under 
        this section. No condition involving program or personnel shall 
        apply to such payments.
            ``(3) Special rule for heavily impacted high need areas.--
        (A) If in any fiscal year the Secretary determines that funds 
        provided to an eligible local educational agency under this 
        title, together with the funds available to such agency from 
        State and local sources is less than the amount necessary to 
        enable such agency to provide a level of education equivalent 
        to the State average during the preceding fiscal year or to the 
        average of that maintained during the preceding fiscal year in 
        3 or more of the school districts of the State which are 
        generally comparable to the school district of such agency, 
        whichever is higher, increased or decreased, as the case may 
        be, in the same percentage as the cost of such level of 
        education increased or decreased from the third preceding 
        fiscal year to the prior fiscal year for which the 
        determination is made, then the Secretary shall increase the 
        payment made under this section with respect to such agency for 
        such fiscal year on the basis of data from the fiscal year 
        preceding the fiscal year for which the determination is made 
        to the extent necessary to enable such agency to provide a 
        level of education equivalent to that maintained in such 
        comparable school districts. The increase computed under this 
        paragraph shall be sufficient to allow the school district of 
        the local educational agency to provide a level of education 
        (calculated in accordance with this subparagraph) equal to the 
        average of the three comparable districts in the State or the 
        State average, whichever is greater, as described in clause 
        (i).
            ``(B)(i) For the purpose of this paragraph the term 
        `eligible local educational agency' means a local educational 
        agency--
                    ``(I) that is making a reasonable tax effort and 
                exercising due diligence in availing itself of State 
                and other financial assistance;
                    ``(II) in which not less than 50 percent of the 
                total number of children who were in average daily 
                attendance at the schools of such agency during the 
                fiscal year for which the determination is made and for 
                whom such agency provided free public education were, 
                during such fiscal year, determined to be children 
                described in subsection (a), except that any local 
                educational agency in which the annual average 
                percentage of such total number of children described 
                in subsection (a) for the 3 fiscal years prior to the 
                fiscal year for which the determination is made exceeds 
                50 percent of the total children in average daily 
                attendance at the schools of such agency shall be 
                deemed to meet the requirements of this paragraph; and
                    ``(III) in which the eligibility of such agency 
                under State law for State aid with respect to free 
                public education of children residing on Federal 
                property, and the amount of such aid, are determined on 
                a basis no less favorable to such agency than the basis 
                used in determining the eligibility of local 
                educational agencies for State aid, and the amount 
                thereof, with respect to the free public education of 
                other children in the State.
            ``(ii) For the purpose of clause (i)(I), the Secretary 
        shall determine that a reasonable tax effort has been made if 
        the tax rate of the agency in the year for which the 
        determination is made (before any State mandated tax rate 
        reductions resulting from the receipt of State funds has been 
        implemented) is an amount that is at least equal to 95 percent 
        of the average tax rate for general fund purposes of comparable 
        school districts for such fiscal year or the agency's total tax 
        rate for the preceding fiscal year is at least 95 percent of 
        the average of the total tax rates of comparable school 
        districts. Coterminous military districts shall be deemed to 
        meet the requirement of such reasonable tax effort. Except for 
        coterminous military districts, payments made to any local 
        educational agency under this paragraph in any fiscal year 
        shall be reduced by the percentage that the average tax rate of 
        the comparable school districts or, if none, the State average 
        tax rate, exceeds the tax rate of such agency.
            ``(C) For the purpose of clause (i)--
                    ``(i) available funds may include any cash balance 
                at the end of a year allowed under State law; or
                    ``(ii) whenever no State law governing cash balance 
                exists, available funds shall exclude 30 percent of the 
                local educational agency's operating costs.
            ``(D) Except as provided in clause (ii), for any fiscal 
        year after September 30, 1993, the Secretary shall annually 
        estimate the funds required to carry out the provisions of this 
        paragraph and shall report the estimate to the Committees on 
        Appropriations and Education and Labor of the House of 
        Representatives and the Committees on Appropriations and Labor 
        and Human Resources of the Senate not later than 45 days after 
        the date applications are due to be submitted to the Secretary 
        from local educational agencies in accordance with section 
        105(a). Such estimate shall also include the amount of funds 
        required to pay to all local educational agencies eligible for 
        payments under this paragraph in the preceding fiscal year an 
        amount equal to the difference between the amount all such 
        agencies were entitled to receive under this paragraph in such 
        preceding fiscal year and the amount all such agencies received 
        under this section in such preceding fiscal year.
            ``(E) If in any fiscal year in which the total amount of 
        payments made under this paragraph are less than or equal to 
        the amount reserved pursuant to section 101(d)(3) to carry out 
        this paragraph in such fiscal year, then such funds as do not 
        exceed the amount so reserved shall remain available until 
        expended to carry out the provisions of this paragraph.
            ``(F) If the total amount of payments to be made under this 
        paragraph in a fiscal year exceeds the amount reserved pursuant 
        to section 101(d)(3) to carry out this paragraph in such fiscal 
        year, then the amount reserved to carry out this paragraph in 
        the succeeding fiscal year shall be available to pay to each 
        local educational agency eligible for payments under this 
        paragraph in the preceding fiscal year the difference between 
        the amount each such agency is entitled to receive under this 
        paragraph in such preceding fiscal year and the amount such 
        agency received under this paragraph in such preceding fiscal 
        year.
    ``(e) Adjustments for Decreases in Federal Activities.--
            ``(1) In general.--(A) Except as provided in subparagraph 
        (B), whenever the Secretary determines that--
                    ``(i) for any fiscal year, the number of children 
                determined with respect to any local educational agency 
                under section (a) is less than 90 percent of the number 
                determined with respect to such agency during the 
                preceding fiscal year;
                    ``(ii) there has been a decrease or cessation of 
                Federal activities within the State in which such 
                agency is located; and
                    ``(iii) such decrease or cessation has resulted in 
                a substantial decrease in the number of children 
                determined under subsection (a) with respect to such 
                agency for such fiscal year,
        then the amount to which such agency is entitled for such 
        fiscal year and for the following fiscal year shall not be less 
        than 90 percent of the payment such agency received under 
        subsection (a) for the preceding fiscal year.
            ``(B) The Secretary may adjust the amount to which a local 
        educational agency is entitled in accordance with the 
        provisions of subparagraph (A) for 1 additional fiscal year 
        after the last fiscal year for which such agency is eligible 
        for an adjustment under such subparagraph if the number of 
        children determined with respect to such agency under 
        subsection (a) during such last fiscal year equals or exceeds 
        25 percent of the number of such children in average daily 
        attendance at the schools of such agency in such last fiscal 
        year.
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated for each fiscal year such amount 
        as may be necessary to carry out the provisions of this 
        section, which shall remain available until expended.
            ``(3) Expenditures.--Expenditures pursuant to paragraph (2) 
        shall be reported by the Secretary to the Committees on 
        Appropriations and Education and Labor of the House of 
        Representatives and the Committees on Appropriations and Labor 
        and Human Resources of the Senate within 30 days of 
        expenditure.
            ``(4) Information on costs.--The Secretary shall make 
        available to the Congress in the Department of Education's 
        annual budget submission, the amount of funds necessary to 
        defray the costs associated with the provisions of this 
        subsection during the fiscal year for which the submission is 
        made.
    ``(f) New Applicants; Determinations on the Basis of Estimates.--
            ``(1) In general.--Any local educational agency that did 
        not apply for payments under this section in a preceding fiscal 
        year and that would be eligible to receive payments under this 
        section for the fiscal year in which such agency is applying 
        for the first time, shall be paid on the basis of the number of 
        children described in subsection (a) who, during the fiscal 
        year for which the determination is made, are in average daily 
        attendance at the schools of such agency and for whom such 
        agency provides free public education.
            ``(2) Satisfactory data.--Determinations with respect to a 
        number of children by the Secretary under this subsection for 
        any fiscal year shall be made, whenever satisfactory data are 
        not available, on the basis of estimates. No such determination 
        shall operate, because of an underestimate, to deprive any 
        local educational agency of its entitlement to any payments 
        under this section to which such agency would be entitled had 
        such determination been made on the basis of accurate data.
    ``(g) Prohibition.--Notwithstanding any other provisions of this 
Act, no State may require that a vote of the qualified electors of a 
heavily impacted school district of a local educational agency be held 
to determine if such school district will spend the amounts to which 
the local educational agency is entitled under this Act.

``SEC. 104. SUDDEN AND SUBSTANTIAL CHANGES IN ATTENDANCE.

    ``(a) Increases Resulting From Base Closure or Military Realignment 
Activities.--
            ``(1) In general.--(A) If the Secretary determines for any 
        fiscal year ending prior to October 1, 1998 that, as a direct 
        result of base consolidation or realignment activities of the 
        Department of Defense (carried on either directly or through a 
        contractor), an increase in the number of children in average 
        daily attendance at the schools of any local educational agency 
        has occurred in such fiscal year, which increase so resulting 
        from such activities is equal to at least 5 percent of the 
        difference between the number of children in average daily 
        attendance at the schools of such agency during the preceding 
        fiscal year and the number of such children whose attendance 
        during such year resulted from base consolidation or 
        realignment activities of the Department of Defense (including 
        children who resided on Federal property or with a parent 
        employed on Federal property), then the amount to which such 
        agency is otherwise entitled under this section shall be paid 
        on the basis of the number of children who, during the fiscal 
        year for which the application is made, are in average daily 
        attendance at the schools of such agency and for whom such 
        agency provided free public education. Such application shall 
        include a certificate from the appropriate local base commander 
        that the increase is the result of Department of Defense base 
        closure or realignment activities.
            ``(B) The Secretary shall not make a payment to a local 
        educational agency for any fiscal year under subparagraph (A) 
        unless such agency submits a written request for such payment 
        to the Secretary by January 31 of such year.
            ``(2) Payment reductions.--If in any fiscal year the amount 
        appropriated pursuant to the authority of paragraph (3) is 
        insufficient to carry out the provisions of this subsection for 
        such fiscal year, then the Secretary shall make a reduction in 
        the amount that such agency receives under this subsection in 
        such year on the basis of the number of children in average 
        daily attendance at the schools of a local educational agency 
        compared to the total number of children in average daily 
        attendance in the schools of all local educational agencies in 
        all States.
            ``(3) Authorization of appropriations.--(A) There are 
        authorized to be appropriated for each fiscal year such amount 
        as may be necessary to carry out this subsection.
            ``(B) Funds appropriated pursuant to the authority of 
        subparagraph (A) shall remain available until expended.
    ``(b) Adjustment for Certain Decreases in Federal Activity.--
Whenever the Secretary determines that--
            ``(1) a local educational agency has made preparations to 
        provide during a fiscal year free public education for a 
        certain number of children to whom subsection (a) applies;
            ``(2) such preparations were in the Secretary's judgment 
        reasonable in the light of the information available to such 
        agency at the time such preparations were made; and
            ``(3) such number has been substantially reduced by reason 
        of a decrease in or cessation of Federal activities or by 
        reason of a failure of any such activities to occur,
then the amount to which such agency is otherwise entitled under this 
section for such year shall be increased to the amount to which, in the 
judgment of the Secretary, such agency would have been entitled but for 
such decrease in or cessation of Federal activities or the failure of 
such activities to occur, minus any reduction in current expenditures 
for such year which the Secretary determines that such agency has 
effected, or reasonably should have effected, by reason of such 
decrease in or cessation of Federal activities or the failure of such 
activities to occur.
    ``(c) Consultation With State and Local Authorities.--All 
determinations of the Secretary under subsection (a)(2) and subsection 
(b) of this section shall be made only after consultation with the 
State educational agency and the local educational agency.
    ``(d) Report on Expenditures.--Expenditures of funds appropriated 
pursuant to the authority of subsections (a)(3)(A) and (f)(1) shall be 
reported by the Secretary to the Committees on Appropriations and 
Education and Labor of the House of Representatives and the Committees 
on Appropriations and Labor and Human Resources of the Senate within 30 
days of expenditure.
    ``(e) Annual Budget Submission.--The Secretary shall make available 
to the Congress in the Department of Education's annual budget 
submission, the amount of funds necessary to defray the costs 
associated with the provisions of this section during the fiscal year 
for which the submission is made.
    ``(f) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        for each fiscal year such amount as may be necessary to carry 
        out subsections (b) through (e) of this section.
            ``(2) Availability.--Funds appropriated pursuant to the 
        authority of paragraph (1) shall remain available until 
        expended.

``SEC. 105. METHOD OF MAKING PAYMENTS.

    ``(a) Applications.--
            ``(1) In general.--Any local educational agency desiring to 
        receive the payments to which it is entitled for any fiscal 
        year under section 102, 103, or 104 shall submit an application 
        therefore to the Secretary and file a copy with the State 
        educational agency. Each such application shall be submitted in 
        such form, and containing such information as the Secretary may 
        reasonably require to determine whether such agency is entitled 
        to a payment under any of such sections and the amount of such 
        payment.
            ``(2) Deadline.--The Secretary shall establish a deadline 
        for the receipt of applications under this section. For each 
        fiscal year beginning after the date of enactment of the Impact 
        Aid Reauthorization Act of 1993, the Secretary shall accept an 
        approvable application received not more than 60 days after the 
        deadline, but shall reduce the payment based on such late 
        application by 10 percent of the amount that would otherwise be 
        paid. The Secretary shall not accept or approve any application 
        submitted more than 60 days after the application deadline.
            ``(3) Special rule.--Notwithstanding any other provision of 
        law or regulation, a State educational agency that had been 
        accepted as an applicant for funds under section 103 for fiscal 
        years 1985, 1986, 1987, and 1988 shall be permitted to continue 
        as an applicant under the same conditions by which it made 
        application during such fiscal years only if such State 
        educational agency distributes all funds received for the 
        students for which application is being made by such State 
        educational agency to the local educational agencies providing 
        educational services to such students.
    ``(b) Payments by the Secretary.--
            ``(1) In general.--The Secretary shall pay to each local 
        educational agency, rounded to the nearest whole dollar, making 
        application pursuant to subsection (a), the amount to which it 
        is entitled under section 102, 103, or 104. Sums appropriated 
        for any fiscal year, to enable the Secretary to make payments 
        pursuant to this title shall, notwithstanding any other 
        provision of law unless enacted in express limitation of this 
        subsection, remain available for obligation and payments with 
        respect to amounts due local educational agencies under this 
        title for such fiscal year, until the end of the fiscal year 
        succeeding the fiscal year for which such sums are 
        appropriated. The Secretary shall return to the United States 
        Treasury any funds appropriated for payments under this title 
        for fiscal year 1988, and thereafter that, as the result of 
        overpayment and uncontrollable expenditures, are recovered by 
        the Department of Education after or following the end of the 
        fifth fiscal year in which the sums were appropriated, or that 
        remain in Department of Education accounts after that time.
            ``(2) Data and timing.--Except as otherwise provided in 
        this title, the Secretary shall--
                    ``(A) make payments to those local educational 
                agencies eligible to receive funds under sections 102, 
                103, and 104.
                    ``(B) make such payments in accordance with section 
                101(e) or as soon as possible in a manner determined by 
                the Secretary.
            ``(3) Indian provisions.--(A) The portion of payment for a 
        local educational agency under section 103 which is 
        attributable to the difference between--
                    ``(i) the total number of weighted student units 
                for children determined under section 103(c)(2)(A)(i); 
                and
                    ``(ii) the total number of weighted student units 
                for children determined under section 103(c)(2)(C)(i),
        shall be made only to a local educational agency which has, 
        within 1 year of the date of enactment of this Act, or when a 
        local educational agency is formed after such date of 
        enactment, within 1 year of its formation, established such 
        policies and procedures with respect to information received 
        from Indian parents and tribes as required by this paragraph 
        and which has made assurances to the Secretary, at such time 
        and in such manner as shall be determined by regulations 
        promulgated by the Secretary, that such policies and procedures 
        have been established. The Secretary is authorized to waive 
        such 1-year limit for good cause, and in writing to the tribes 
        affected.
            ``(B) Each local educational agency shall establish such 
        policies and procedures as are necessary to ensure that--
                    ``(i) Indian children determined under section 
                103(a)(2) participate on an equal basis in the school 
                program with all other children educated by the local 
                educational agency;
                    ``(ii) applications, evaluations, and program plans 
                are adequately disseminated to the tribes and parents 
                of Indian children determined under section 103(a)(2); 
                and
                    ``(iii) tribes and parents of Indian children 
                determined under section 103(a)(2) are--
                            ``(I) afforded an opportunity to present 
                        their views with respect to the application, 
                        including the opportunity to make 
                        recommendations concerning the needs of their 
                        children and the ways by which they can assist 
                        their children in realizing the benefits to be 
                        derived from the educational program assisted 
                        under this paragraph;
                            ``(II) actively consulted and involved in 
                        the planning and development of programs 
                        assisted under this paragraph; and
                            ``(III) afforded a general opportunity to 
                        present their overall views on the educational 
                        program, including the operations of such 
                        programs, and the degree of parental 
                        participation allowed.
            ``(C)(i) Any tribe, or its designee, which has students in 
        attendance at a local educational agency may, in its discretion 
        and without regard to the requirement of any other provision of 
        law, file a written complaint with the Secretary regarding any 
        action of a local educational agency taken pursuant to, or 
        relevant to, the requirements of subparagraph (B) of this 
        paragraph.
            ``(ii) Within 10 working days from receipt of the 
        complaint, the Secretary shall--
                    ``(I) designate a time and place for a hearing into 
                the matters relating to the complaint at a location in 
                close proximity to the local educational agency 
                involved, or, if the Secretary determines there is good 
                cause, at some other location convenient to both the 
                tribe, or its designees, and the local educational 
                agency;
                    ``(II) designate a hearing examiner to conduct the 
                hearing; and
                    ``(III) notify the affected tribe or tribes and the 
                local educational agency involved of the time, place, 
                and nature of the hearing and send copies of the 
                complaint to the local educational agency and the 
                affected tribe or tribes.
            ``(iii) The hearing shall be held within 30 days of the 
        designation of a hearing examiner and shall be open to the 
        public. A record of the proceedings shall be established and 
        maintained.
            ``(iv) The complaining tribe, or its designees, and the 
        local educational agency shall be entitled to present evidence 
        on matters relevant to the complaint and to make 
        recommendations concerning the appropriate remedial actions. 
        Each party to the hearing shall bear only its own costs in the 
        proceeding.
            ``(v) Within 30 days of the completion of the hearing, the 
        hearing examiner shall, on the basis of the record, make 
        written findings of fact and recommendations concerning 
        appropriate remedial actions (if any) which should be taken. 
        The hearing examiner's findings and recommendations, along with 
        the hearing record, shall be forwarded to the Secretary.
            ``(vi) Within 30 days of the Secretary's receipt of the 
        findings, recommendations, and record, the Secretary, on the 
        basis of the record, shall make a written determination of the 
        appropriate remedial action, if any, to be taken by the local 
        educational agency, the schedule for completion of the remedial 
        action, and the reasons for the Secretary's decision.
            ``(vii) Upon completion of the Secretary's final 
        determination, the Secretary shall provide the complaining 
        tribe, or its designee, and the local educational agency with 
        copies of the hearing record, the hearing examiner's findings 
        and recommendations, and the Secretary's final determination. 
        The final determination of the Secretary shall be subject to 
        judicial review.
            ``(viii) In all actions under this subparagraph, the 
        Secretary shall have discretion to consolidate complaints 
        involving the same tribe or local educational agency.
            ``(D) If the local educational agency rejects the 
        determination of the Secretary, or if the remedy required is 
        not undertaken within the time established and the Secretary 
        determines that an extension of the time established will not 
        effectively encourage the remedy required, the Secretary shall 
        withhold payment of all moneys to which such local agency is 
        entitled under section 103 until such time as the remedy 
        required is undertaken, except--
                    ``(i) where the complaining tribe or its designees 
                formally requests that such funds be released to the 
                local educational agency; and
                    ``(ii) that the Secretary may not withhold such 
                moneys during the course of the school year if the 
                Secretary determines that it would substantially 
                disrupt the educational programs of the local 
                educational agency.
            ``(E) If the local educational agency rejects the 
        determination of the Secretary and a tribe exercises the option 
        under section 1101(d) of the Education Amendments of 1978, to 
        have education services provided either directly by the Bureau 
        of Indian Affairs or by contract with that Agency, any Indian 
        students affiliated with that tribe who wish to remain in 
        attendance at the local educational agency against whom the 
        complaint which led to the tribal action under such subsection 
        (d) was lodged may be counted with respect to that local 
        educational agency for the purpose of receiving funds under 
        section 103(c)(2)(A) of this Act. In such event, funds under 
        such section shall not be withheld pursuant to subparagraph (D) 
        and no further complaints with respect to such students may be 
        filed under subparagraph (C)(i).
            ``(F) This paragraph is based upon the special relationship 
        between the Indian nations and the United States and nothing in 
        this paragraph shall be deemed to relieve any State of any duty 
        with respect to any citizens of that State.
            ``(4) Military connected children.--(A) The portion of a 
        payment under section 103 to a local educational agency which 
        is attributable to the difference between--
                    ``(i) the total number of weighted student units 
                for children determined under section 103(c)(2)(B); and
                    ``(ii) the total number of weighted student units 
                for children determined under section 103(c)(2)(C) 
                shall be made only to a local educational agency which 
                has within 1 year of the date of enactment of the 
                Impact Aid Reauthorization Act of 1993, or when a local 
                educational agency is formed after such date of 
                enactment, within 1 year of its formation, established 
                a process, in accordance with regulations promulgated 
                by the Secretary, which ensures the involvement of the 
                local military base commander or such commander's 
                designee for the purpose of better meeting the 
                educational, emotional, and social needs of the 
                children determined under such sections.
            ``(B) The Secretary shall annually review the process 
        established under subparagraph (A) to ensure that local 
        educational agencies receiving funds for children determined 
        under section 103(c)(2)(B) are addressing the needs of such 
        children.
    ``(c) The Learning Opportunity Threshold; Adjustments Where 
Necessitated by Appropriations.--
            ``(1) In general.--Except as provided in paragraph (5), if 
        the sums appropriated for any fiscal year for making payments 
        on the basis of entitlements under section 103 are not 
        sufficient to pay in full the total amounts that the Secretary 
        calculated all local educational agencies are entitled to 
        receive under section 103 in such fiscal year, then the 
        Secretary, shall allocate such sums as do not exceed the total 
        amount necessary to pay the learning opportunity threshold 
        (described in paragraph (2)) for all local educational agencies 
        eligible for a payment under such section in such year, among 
        local educational agencies by paying to each such agency an 
        amount equal to such agencies' learning opportunity threshold.
            ``(2) Determination of learning opportunity threshold.--(A) 
        Except as provided in paragraph (3), the Secretary shall 
        calculate a local educational agency's learning opportunity 
        threshold by determining the percentage of federally connected 
        children served by such agency (in accordance with subparagraph 
        (B)), adding to such percentage the equal opportunity cost 
        percentage (determined in accordance with subparagraph (C)), 
        and multiply the resulting percentage by the equal opportunity 
        cost determined in accordance with section 103(c).
            ``(B) Determination of the percentage of federally 
        connected children.--The Secretary shall determine the 
        percentage of federally connected children for a local 
        educational agency in any fiscal year by calculating a 
        fraction, the numerator of which is the number of children 
        served by such agency in the preceding fiscal year who are 
        described in section 103(c)(2), and the denominator of which is 
        the total number of children in average daily attendance at the 
        schools served by such agency in the preceding fiscal year, and 
        multiplying such fraction by 100.
            ``(C) Determination of the equal opportunity cost 
        percentage.--(i) The Secretary shall determine the equal 
        opportunity cost percentage for a local educational agency in 
        any fiscal year by calculating a fraction, the numerator of 
        which is the equal opportunity cost (determined in accordance 
        with section 103(c)(1)) for such agency in the preceding fiscal 
        year, and the denominator of which is the total current 
        expenditures for such agency in such preceding fiscal year, and 
        multiplying such fraction by 100.
            ``(ii) The Secretary shall subtract payments provided 
        pursuant to section 103(d)(3) from the calculation of a local 
        educational agency's total current expenditures before 
        calculating such agency's equal opportunity cost percentage in 
        accordance with this paragraph.
            ``(iii) No local educational agency's equal opportunity 
        cost percentage as determined under this subsection shall 
        exceed 100 percent.
            ``(D) Maximum payment.--No local educational agency shall 
        receive a payment under this subsection that is greater than 
        such agency's equal opportunity cost calculated in accordance 
        with section 103(c)(1) of this Act.
            ``(3) Learning opportunity threshold modifier percentage.--
        (A) If a local educational agency has an average daily 
        attendance (hereafter referred to in this Act as the `ADA') of 
        fewer than 1,000 children, then the Secretary shall modify the 
        learning opportunity threshold (calculated in accordance with 
        paragraph (2)) by adding an additional learning opportunity 
        threshold modifier percentage for such agency (determined in 
        accordance with subparagraph (B)) to the percentage described 
        in paragraph (2) before multiplying the resultant percentage by 
        the equal opportunity cost (in accordance with paragraph (2)).
            ``(B) The Secretary shall calculate a local educational 
        agency's learning opportunity threshold modifier percentage by 
        calculating the percentage determined in accordance with the 
        following formula:

      1,000-the total number of students in ADA at the schools served
        by the local educational agency in the preceding fiscal year
 25<greek-e><3-ln (> --------------------------------------------------
                            ------ <3-ln )>.
                                    1,000

            ``(4) Special rule regarding additional funds.--If the sums 
        appropriated pursuant to the authority of section 103(c) in any 
        fiscal year are sufficient to pay learning opportunity 
        threshold (determined in accordance with paragraph (2)) for all 
        local educational agencies eligible to receive assistance under 
        section 103 in such year but are insufficient to pay the equal 
        opportunity cost (determined in accordance with section 
        103(c)(1)) of all such agencies in such year, then such funds 
        as exceed the amount necessary to pay the learning opportunity 
        threshold for all such agencies in such year shall be 
        distributed to such agencies in such year on the basis of the 
        total number of weighted student units (calculated in 
        accordance with section 103(c)(2)) applicable to each local 
        educational agency eligible to receive assistance under section 
        103 in such year compared to the total number of weighted 
        student units applicable to all such agencies in such year, 
        except that in no case shall the payment to a local educational 
        agency under this subsection exceed the amount equal to such 
        local educational agency's equal opportunity cost (determined 
        in accordance with section 103(c)(1)).
            ``(5) Insufficient appropriations.--If the sums 
        appropriated pursuant to the authority of section 101(c) in any 
        fiscal year are insufficient to pay the amount necessary to 
        make payments in accordance with paragraph (1), then the 
        Secretary shall determine the amount of such deficiency and 
        reduce the payments to each local educational agency as 
        follows:
                    ``(A) 50 percent of any deficiency shall be 
                addressed by ratably reducing the payments of all local 
                educational agencies receiving assistance under this 
                title in such year; and
                    ``(B) 50 percent of any deficiency shall be 
                addressed by reducing the payments to all local 
                educational agencies receiving assistance under this 
                title in such year on the basis of the total number of 
                weighted student units applicable to a local 
                educational agency receiving assistance under this 
                title in such year compared to the total number of 
                weighted student units applicable to all such agencies 
                in such year.
    ``(d) Treatment of Payment by the States in Determining Eligibility 
for, and the Amount of, State Aid.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary may withhold payments, in accordance with paragraph 
        (3), for any fiscal year to any State educational agency in any 
        State if--
                    ``(A) that State has taken into consideration 
                during that fiscal year or the preceding fiscal year 
                payments under this Act in determining--
                            ``(i) the eligibility of any local 
                        educational agency in that State for State aid 
                        for free public education of children;
                            ``(ii) the amount of such State aid with 
                        respect to any such agency during that fiscal 
                        year or the preceding fiscal year; or
                            ``(iii) a reduction in the amount of such 
                        State aid based on an end-of-year balance in 
                        any fund of the local educational agency into 
                        which payments under this Act have been 
                        deposited, unless such reduction is calculated 
                        in a manner that excludes the amount of funds 
                        deposited into such fund in any fiscal year 
                        that are attributable to payments under this 
                        Act; or
                    ``(B) that State makes such State aid available to 
                local educational agencies in such a manner as to 
                result in less State aid to any local educational 
                agency which is eligible for payments under this Act 
                than such agency would receive if such agency were not 
                so eligible.
            ``(2) Special rules.--(A) Notwithstanding paragraph (1) of 
        this subsection, if a State's per pupil expenditure is equal to 
        or greater than the average per pupil expenditure of all the 
        States and has in effect a program of State aid for free public 
        education for any fiscal year, which is designed to equalize 
        expenditures for free public education among the local 
        educational agencies of that State, payments under this title 
        for any fiscal year may be taken into consideration by such 
        State in determining the relative--
                    ``(i) financial resources available to local 
                educational agencies in that State; and
                    ``(ii) financial need of such agencies for the 
                provision of free public education for children served 
                by such agency,
        except that a State may consider as local resources funds 
        received under this Act only in proportion to that share that 
        local revenues covered under a State equalization program are 
        of total local revenues.
            ``(B) The amount of a payment to a local educational agency 
        under section 103 which is attributable to the sum of--
                    ``(i)(I) the total number of weighted student units 
                for students determined under sections 103(c)(2)(A), 
                103(c)(2)(B)(i), and 103(c)(2)(B)(ii); less
                    ``(II) the total number of the weighted student 
                units for such students if such students had been 
                determined under section 103(c)(2)(C); plus
                    ``(ii) the increase in payments described in 
                sections 103(c)(3)(B)(ii) and 103(d)(3),
        shall not be taken into consideration by the State for the 
        purpose of this paragraph.
            ``(C) Whenever a State educational agency or local 
        education agency will be adversely affected by the operation of 
        this subsection, such agency shall be afforded notice and an 
        opportunity for a hearing
        prior to the reduction or termination of payments pursuant to 
        this subsection.
            ``(D) The terms `State aid, State school finance program', 
        and `equalize expenditures' as used in this subsection shall be 
        defined by the Secretary by regulations after consultation with 
        the National Panel established in paragraph (4) and the State 
        and local education agencies affected by this subsection, 
        except that such terms shall be defined in a manner that 
        ensures that adequate provisions are made for the costs 
        required to--
                    ``(i) provide free public education for meeting the 
                special educational needs of particular groups or 
                categories of at-risk students such as children with 
                disabilities, economically disadvantaged children, 
                children who need bilingual education, and gifted and 
                talented children;
                    ``(ii) enable local educational agencies to provide 
                equivalent programs and services; and
                    ``(iii) recognize the special conditions among the 
                diverse local educational agencies in the State.
            ``(E)(i) In making the determination as to a State's 
        eligibility to consider payments under this title in the 
        calculation of State payments to local educational agencies in 
        accordance with subparagraph (A), equalization shall be 
        calculated on the basis of expenditure disparity per pupil. The 
        State school finance program shall be considered equalized when 
        the disparity in per pupil expenditures is not greater than 105 
        percent in terms of the relationship of the spending level per 
        pupil in the highest spending local educational agency to the 
        spending level per pupil in the lowest spending local 
        educational agency after excluding the highest spending local 
        educational agencies with 5 percent of the students. In 
        reviewing a State's eligibility to carry out the provisions of 
        subparagraph (A), the National Panel established in paragraph 
        (4) may recommend to the Secretary that the equalization 
        calculations exclude low spending local educational agencies 
        that serve not more than 5 percent of the students in the State 
        on a case-by-case basis when the National Panel determines that 
        unusual circumstances exist.
            ``(ii) If a State desires to take payments under this 
        section into consideration as provided in this paragraph for 
        any fiscal year, that State shall, not later than 60 days prior 
        to the beginning of such fiscal year, submit notice to the 
        Secretary of its intention to do so. Such notice shall be in 
        such form and be accompanied by such information as to enable 
        the Secretary to determine the extent to which the program of 
        State aid of that State is consistent with the provisions of 
        subparagraph (A). In addition, such notice shall be accompanied 
        by a narrative description of the State's school finance 
        program and include appropriate documentation of the manner in 
        which the State's school finance program provides adequate 
        recognition of special students and special conditions. If the 
        Secretary determines that the program of State aid of a State 
        submitting notice under this subparagraph is consistent with 
        the provisions of subparagraph (A), the Secretary shall certify 
        such determination to that State.
            ``(iii) A State shall not be eligible to carry out the 
        provisions of subparagraph (A) if such State's allocation of 
        funds under the State school finance program results in a local 
        education agency having less revenues per pupil for current 
        operations than the minimum per pupil provided in the State 
        school finance program.
            ``(iv) Prior to certifying any determination under clause 
        (i) for any State for any fiscal year, the Secretary shall give 
        the local educational agencies in that State an opportunity for 
        a hearing at which such agencies may present their views with 
        respect to the consistency of the State aid program of that 
        State with the provisions of subparagraph (A).
            ``(v) The Secretary shall not finally deny to any State for 
        any fiscal year certification of denial of payments under 
        clause (i) without first giving that State an opportunity for a 
        hearing.
            ``(vi) Any State certified in accordance with section 
        5(d)(2)(A) of this Act (as such section was in effect prior to 
        the date of enactment of this subsection) shall have 3 years 
        from the date of the enactment of the Impact Aid 
        Reauthorization Act of 1993 to comply with the requirements of 
        this paragraph.
            ``(3) Withholding authorized.--If, prior to a certification 
        determination of eligibility by the Secretary in accordance 
        with paragraph (2)(E)(i), a State takes payments under this 
        title for any fiscal year into consideration in determining the 
        financial resources available to local educational agencies 
        within the State or the financial need of such agencies to 
        provide for free public education, the Secretary shall withhold 
        all funds payable to the State educational agency for State 
        administrative expenses associated with any Federal elementary 
        and secondary education programs.
            ``(4) National advisory panel established.--(A)(i) There is 
        hereby established a National Advisory Panel on School Finance 
        and Impact Aid Equalization (hereafter in this Act referred to 
        as the `National Panel'), which shall consist of 11 members 
        appointed by the Secretary, of which--
                    ``(I) 5 members shall be employed in local 
                educational agencies;
                    ``(II) 3 members shall be employed in State 
                educational agencies; and
                    ``(III) 3 members shall be persons with experience 
                in the design and structure of State school finance 
                programs, one of whom shall have particular knowledge 
                of funding for special needs populations.
            ``(ii) The Secretary shall give consideration to ensuring 
        that the National Panel's membership includes representatives 
        of--
                    ``(I) States with large numbers of students 
                described in section 103(a); and
                    ``(II) local educational agencies with different 
                types of such students.
            ``(iii) Prior to making the appointments described in 
        clause (i), the Secretary shall request nominees from the 
        National Association of Federally Impacted Schools and the 
        Council of Chief State School Officers.
            ``(B) The National Panel shall--
                    ``(i) advise the Secretary with respect to the 
                development of regulations and administrative practices 
                and policies under this subsection;
                    ``(ii) advise the Secretary relative to the 
                evidence that each State is to submit when seeking a 
                determination under paragraph (2)(A); and
                    ``(iii) submit a recommendation to the Secretary 
                regarding a State's equalization status and eligibility 
                to consider payments under this title in making State 
                payments to local educational agencies, after reviewing 
                the narrative and statistical documents that each State 
                submits to the Secretary when seeking an equalization 
                certification under paragraph (2)(E)(i) in terms of the 
                extent to which the State's school finance program 
                makes provision for sufficient funds to ensure an 
                adequate program of free public education for all 
                children and recognizes the diversity of conditions 
                among local educational agencies in the State.
            ``(C) The National Panel may--
                    ``(i) review applications submitted to the 
                Secretary for, and make recommendations regarding, 
                funding from the contingency fund established in 
                section 202; and
                    ``(ii) respond to other requests from the Secretary 
                regarding any other provision of this Act.
            ``(D) Members of the National Panel shall not be 
        compensated for their service on the National Panel, but while 
        serving away from their homes or regular places of business, 
        members of the National Panel may be reimbursed for travel 
        expenses, including per diem in lieu of subsistence, as 
        authorized by section 5703 of title 5, United States Code, for 
        persons in government service employed intermittently.
    ``(e) Phase-In Provision.--
            ``(1) In general.--(A) Notwithstanding any other provision 
        of this Act and except as provided in paragraph (2), each local 
        educational agency which--
                    ``(i) received a payment in fiscal year 1993 under 
                section 3 of this Act (as such Act was in existence 
                prior to the date of enactment of the Impact Aid 
                Reauthorization Act of 1993) and is eligible to receive 
                a payment under section 103 in any of the fiscal years 
                1994, 1995, and 1996; or
                    ``(ii) is applying for funds under section 103 for 
                the first time in any of the fiscal years 1994, 1995, 
                and 1996,
        shall receive a payment under section 103 in any of the fiscal 
        years 1994, 1995, and 1996 in an amount determined on the basis 
        of the total number of weighted student units applicable to 
        such agency in the fiscal year preceding the fiscal year for 
        which the determination is made compared to the total number of 
        weighted student units applicable to all such agencies in all 
        States in such preceding fiscal year.
            ``(B) The payment a local educational agency receives 
        pursuant to the operation of subparagraph (A) in any of the 
        fiscal years 1994, 1995, and 1996 shall not be more than 10 
        percent greater than, nor less than 10 percent lesser than, the 
        amount such agency received by operation of subparagraph (A) in 
        the preceding fiscal year.
            ``(2) Special rules.--(A) If the amount appropriated to 
        carry out this title is insufficient to carry out the 
        provisions of paragraph (1), then the Secretary shall determine 
        the amount of such deficiency and reduce the payments described 
        in paragraph (1) in accordance with the provisions of 
        subparagraphs (A) and (B) of section 105(c)(5).
            ``(3) New applicants.--In the case of a local educational 
        agency applying for funds under section 103 for the first time 
        in any of the fiscal years 1994, 1995, and 1996, the Secretary, 
        prior to making a payment pursuant to paragraph (1), shall 
        determine the total number of weighted student units applicable 
        to such agency in the fiscal year preceding the fiscal year in 
        which such agency submits its initial application under section 
        103, and shall apply the provisions of paragraph (1) on the 
        basis of such determination.
    ``(f) Children With Disabilities.--
            ``(1) Indian lands connected children.--If in any fiscal 
        year the number of children determined under section 
        103(c)(2)(A)(ii) for a local educational agency who are 
        eligible to receive payments under section 103 exceeds the 
        average number of children eligible for services under the 
        Individuals with Disabilities Education Act for local 
        educational agencies in the State, then the Secretary of the 
        Interior shall make available in such year, from funds 
        available to the Secretary of the Interior to carry out the 
        Individuals with Disabilities Education Act, the funds required 
        to pay the portion of payments under section 103 to such local 
        educational agency which are attributable to the difference 
        between--
                    ``(A) the sum of the total number of weighted 
                student units for children determined under section 
                103(c)(2)(A)(ii); and
                    ``(B) the total number of weighted student units 
                for children determined under section 103(c)(2)(C)(i).
            ``(2) Defense connected children.--(A) If in any fiscal 
        year the number of children determined under sections 
        103(c)(2)(B)(ii) and 103(c)(2)(B)(iv) for a local educational 
        agency who are eligible to receive payments under section 103 
        exceeds the average number of children eligible for services 
        under the Individuals with Disabilities Education Act for local 
        educational agencies in the State, then the Secretary of 
        Defense shall make available, either directly or through 
        contract, from funds appropriated to carry out section 106, to 
        such local educational agency--
                    ``(A) the funds required to pay the portion of 
                payments under section 103 which are attributable to 
                the difference between--
                            ``(i) the sum of the total number of 
                        weighted student units for children determined 
                        under sections 103(c)(2)(B)(ii) and 
                        103(c)(2)(B)(iv); and
                            ``(ii) the total number of weighted student 
                        units for children determined under section 
                        103(c)(2)(C)(i); and
                    ``(B) the total cost associated with any child 
                determined under sections 103(c)(2)(B)(ii) and 
                103(c)(2)(B)(iv) who is enrolled by such local 
                educational agency because of a disability, in an 
                educational program provided outside the schools of 
                such local educational agency.
            ``(3) Use of funds.--The amount of funds provided to a 
        local educational agency by reason of the operation of 
        paragraph (2) shall be used by such agency for special 
        educational programs designed to meet the special educational 
        needs of children with respect to whom the determination under 
        such paragraph is made.
    ``(g) Special Payment Rule.--Each local educational agency 
described in section 103(c)(3)(D) which is not directly operating an 
educational program or has entered into a contract or similar 
arrangement with another local educational agency for the operation of 
a substantial number of such agency's educational programs (as 
determined by the Secretary), shall not receive a payment under section 
103 in any fiscal year that, when added to any payments received from 
State and local sources for such year, exceeds the amount such agency 
receives from State and local sources.
    ``(h) Hearing and Review.--Each local educational agency which is 
adversely affected or aggrieved by any action of the Secretary under 
this Act shall be entitled to a hearing on, and review of, such action 
in the same manner as if such agency were a person under the provisions 
of chapters 5 and 7 of title 5, United States Code.

``SEC. 106. CHILDREN FOR WHOM LOCAL AGENCIES ARE UNABLE TO PROVIDE 
              EDUCATION.

    ``(a) In General.--In the case of children who reside on Federal 
property--
            ``(1) if no tax revenues of the State or any political 
        subdivision thereof may be expended for the free public 
        education of such children; or
            ``(2) if it is the judgment of the Secretary, after the 
        Secretary has consulted with the appropriate State educational 
        agency, that no local educational agency is able to provide 
        suitable free public education for such children,
then the Secretary shall make such arrangements (other than 
arrangements with respect to the acquisition of land, the erection of 
facilities, interest, or debt service) as may be necessary to provide 
free public education for such children. Such arrangements to provide 
free public education may also be made for children of members of the 
Armed Forces on active duty, if the schools in which the free public 
education is usually provided for such children are made unavailable to 
such children as a result of official action by State or local 
governmental authority and it is the judgment of the Secretary, after 
the Secretary has consulted with the appropriate State educational 
agency, that no local educational agency is able to provide suitable 
free public education for such children. To the maximum extent 
practicable, the local educational agency, or the head of the Federal 
department or agency, with which any arrangement is made under this 
section shall take such action as may be necessary to ensure that the 
education provided pursuant to such arrangement is comparable to free 
public education provided for children in comparable communities in the 
State or in the case of education provided under this section outside 
the continental United States, Alaska, and Hawaii, comparable to free 
public education provided for children in the District of Columbia. For 
the purpose of providing such comparable education, personnel may be 
employed and the compensation, tenure, leave, hours of work, and other 
incidents of the employment relationship may be fixed without regard to 
the provisions of title 5 of the United States Code. Personnel provided 
for under this subsection outside of the continental United States, 
Alaska, and Hawaii, shall receive such compensation, tenure, leave, 
hours of work, and other incidents of employment on the same basis as 
provided for similar positions in the public schools of the District of 
Columbia. In any case where education was being provided on January 1, 
1955, or thereafter under an arrangement made under this subsection for 
children residing on an Army, Navy (including the Marine Corps), or Air 
Force installation, it shall be presumed, for the purposes of this 
subsection, that no local educational agency is able to provide 
suitable free public education for the children residing on such 
installation, until the Secretary and the Secretary of the military 
department concerned jointly determine, after consultation with the 
appropriate State educational agency, that a local educational agency 
is able to do so.
    ``(b) Adjacent Property.--In any case in which the Secretary makes 
such arrangements for the provision of free public education in 
facilities situated on Federal property, the Secretary may also make 
arrangements for providing free public education in such facilities for 
children residing in any area adjacent to such property with a parent 
who during some portion of the fiscal year in which such education is 
provided, was employed on such property, but only if the Secretary 
determines after consultation with the appropriate State educational 
agency--
            ``(1) that the provision of such education is appropriate 
        to carry out the purposes of this title;
            ``(2) that no local educational agency is able to provide 
        suitable free public education for such children; and
            ``(3) in any case where in the judgment of the Secretary 
        the need for the provision of such education will not be 
        temporary in duration, that the local educational agency of the 
        school district in which such children reside, or the State 
        educational agency, or both, will make reasonable tuition 
        payments to the Secretary for the education of such children. 
        Such payments may be made either directly or through deductions 
        from amounts to which the local educational agency is entitled 
        under this title, or both, as may be agreed upon between such 
        agency and the Secretary. Any amounts paid to the Secretary by 
        a State or local educational agency pursuant to this section 
        shall be covered into the Treasury as miscellaneous receipts.
    ``(c) Outlying Areas.--In any case in which the Secretary makes 
arrangements under this section for the provision of free public 
education in facilities situated on Federal property in the 
Commonwealth of Puerto Rico, Wake Island, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, or the Virgin Islands, 
the Secretary may also make arrangements for providing free public 
education in such facilities for children residing with a parent 
employed by the United States, in a grade, position, or classification 
subject by policy and practice to transfer or reassignment to areas 
where English is the language of instruction in the schools normally 
attended by children of Federal employees. Dependents of excepted 
service professional employees of the schools shall be eligible to 
attend the schools. In any case where education is being provided under 
an arrangement made under this subsection, it shall be presumed that no 
local educational agency is able to provide suitable free public 
education for the children of eligible parents employed by the United 
States until the Secretary determines, after consultation with the 
appropriate State educational agency, that a local educational agency 
is able to do so.
    ``(d) Arrangements.--The Secretary may make an arrangement under 
this section only with a local educational agency or with the head of a 
Federal department or agency administering Federal property on which 
children reside who are to be provided education pursuant to such 
arrangement or, in the case of children to whom the second sentence of 
subsection (a) applies, with the head of any Federal department or 
agency having jurisdiction over the parents of some or all of such 
children. Except where the Secretary makes arrangements pursuant to the 
second sentence of subsection (a), arrangements may be made under this 
section only for the provision of education in facilities of a local 
educational agency or in facilities situated on Federal property. The 
Secretary shall ensure that funds provided under such arrangement or 
arrangements are expended in an efficient manner, and shall require an 
accounting of funds by such agency at least on an annual basis. The 
Secretary shall further be provided with data relating to the quality 
and type of education provided to such children under such arrangement 
or arrangements.
    ``(e) Limitation on Payments.--To the maximum extent practicable, 
the Secretary shall limit the total payments made pursuant to any such 
arrangement for educating children within the continental United 
States, Alaska, or Hawaii, to an amount per pupil which will not exceed 
the per pupil cost of free public education provided for children in 
comparable communities in the State. The Secretary shall limit the 
total payments made pursuant to any arrangement for educating children 
outside the continental United States, Alaska, or Hawaii, to an amount 
per pupil which will not exceed the amount the Secretary determines to 
be necessary to provide education comparable to the free public 
education provided for children in the District of Columbia.
    ``(f) Expenditure of Tax Revenues.--If no tax revenues of a State 
or of any political subdivision of the State may be expended for the 
free public education of children who reside on any Federal property 
within the State, or if no tax revenues of a State are allocated for 
the free public education of such children, then the property on which 
such children reside shall not be considered Federal property for the 
purposes of sections 103 and 104 of this Act. If a local educational 
agency refuses for any other reason to provide in any fiscal year free 
public education for children who reside on Federal property which is 
within the school district of that agency or which, in the 
determination of the Secretary, would be within the school district if 
it were not Federal property, there shall be deducted from any amount 
to which the local educational agency is otherwise entitled for that 
year under section 103 or 104 an amount equal to--
            ``(1) the amount (if any) by which the cost to the 
        Secretary of providing free public education for that year for 
        each such child exceeds the local contribution rate of that 
        agency for that year, multiplied by
            ``(2) the number of such children.
    ``(g) Elective School Board.--The Secretary shall ensure the 
establishment of an elective school board in schools assisted under 
this section. Such school board shall be composed of a minimum of 3 
members, elected by the parents of students in attendance at such 
school. The Secretary shall, by regulation, establish procedures for 
carrying out such school board elections as provided in this 
subsection.
    ``(h) Powers of Elective School Boards.--A school board established 
pursuant to subsection (g) shall be empowered to oversee school 
expenditures and operations, subject to audit procedures established by 
the Secretary, and other provisions of this section.
    ``(i) Special Rule.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a local educational agency receiving funds under section 
        103 may also receive funds under this section, if--
                    ``(A) at least 30 percent of the students enrolled 
                in the schools served by such agency are students 
                determined under section 103(c)(2)(B);
                    ``(B) such agency applied for and received, or will 
                receive, financial assistance from all available 
                Federal, State, and local revenue sources, including 
                revenue available from other sections of this title; 
                and
                    ``(C) such agency provides educational services to 
                students determined under section 103(c)(2)(B) free of 
                charge.
            ``(2) Reservations.--The Secretary of Defense shall 
        reserve--
                    ``(A) 80 percent of the amount available to carry 
                out this subsection for distribution to local 
                educational agencies in accordance with the provisions 
                of this subsection whose per pupil expenditure is less 
                than the State average per pupil expenditure; and
                    ``(B) 20 percent of such amount for distribution to 
                local educational agencies whose per pupil expenditure 
                is higher than the State average per pupil expenditure.
            ``(3) Counting.--Beginning in fiscal year 1994 and in each 
        succeeding fiscal year, payments to a local educational agency 
        in a fiscal year under this subsection shall be made on the 
        basis of the total number of students determined under clauses 
        (i) and (ii) of section 103(c)(2)(B) applicable to such agency 
        compared to the total number of students determined under such 
        clauses applicable to all local educational agencies receiving 
        payments under this subsection in such fiscal year.

``SEC. 107. ASSISTANCE FOR CURRENT SCHOOL EXPENDITURES IN CASES OF 
              CERTAIN DISASTERS.

    ``(a) In General.--In any case in which--
            ``(1) the Director of the Federal Emergency Management 
        Agency determines with respect to any local educational agency 
        (including for the purpose of this section any other public 
        agency which operates schools providing technical, vocational, 
        or other special education to children of elementary or 
        secondary school age) that such agency is located in whole or 
        in part within an area which after August 30, 1965, and prior 
        to October 1, 1998, has suffered a major disaster as the result 
        of any flood, drought, fire, hurricane, earthquake, storm, or 
        other catastrophe which, in the determination of the President 
        pursuant to sections 102(2) and 401 of the Robert T. Stafford 
        Disaster Relief and Emergency Assistance Act, is or threatens 
        to be of sufficient severity and magnitude to warrant disaster 
        assistance by the Federal Government, and
            ``(2) the Governor of the State in which such agency is 
        located has certified the need for disaster assistance under 
        this section, and has given assurance of expenditure of a 
        reasonable amount of the funds of the government of such State, 
        or of any political subdivision thereof, for the same or 
        similar purposes with respect to such catastrophe,
and if the Secretary determines with respect to such agency that--
                    ``(A) such agency is utilizing or will utilize all 
                State and other financial assistance available to it 
                for the purpose of meeting the cost of providing free 
                public education for the children attending the schools 
                of such agency, but as a result of such disaster it is 
                unable to obtain sufficient funds for such purpose and 
                requires an amount of additional assistance equal to at 
                least $10,000 or 5 percent of such agency's current 
                operating expenditures during the fiscal year preceding 
                the fiscal year in which such disaster occurred, 
                whichever is less, and
                    ``(B) in the case of any such major disaster to the 
                extent that the operation of private elementary and 
                secondary schools in the school attendance area of such 
                local educational agency has been disrupted or impaired 
                by such disaster, such local educational agency has 
                made provisions for the conduct of educational programs 
                under public auspices and administration in which 
                children enrolled in such private elementary and 
                secondary schools may attend and participate, except 
                that nothing contained in this Act shall be construed 
                to authorize the making of any payment under this Act 
                for religious worship or instruction,
then the Secretary may provide to such agency the additional assistance 
necessary to provide free public education to the children attending 
the schools of such agency, upon such terms and in such amounts 
(subject to the provisions of this section) as the Secretary may 
consider to be in the public interest. Such additional assistance may 
be provided for a period not greater than a 5-fiscal-year period 
beginning with the fiscal year in which it is determined pursuant to 
paragraph (1) of this subsection that such agency suffered a disaster. 
The amount so provided for any fiscal year shall not exceed the amount 
which the Secretary determines to be necessary to enable such agency, 
with the State, local, and other Federal funds available to it for such 
purpose, to provide a level of education equivalent to that maintained 
in the schools of such agency prior to the occurrence of such disaster, 
taking into account the additional costs reasonably necessary to carry 
out the provisions of paragraph (2)(B) of this subsection. The amount, 
if any, so provided for the second, third, and fourth fiscal years 
following the fiscal year in which it is so determined that such agency 
has suffered a disaster shall not exceed 75 percent, 50 percent, and 25 
percent, respectively, of the amount so provided for the first fiscal 
year following such determination.
    ``(b) Additional Funds.--In addition to and apart from the funds 
provided under subsection (a), the Secretary is authorized to provide 
to such agency an amount which the Secretary determines to be necessary 
to replace instructional and maintenance supplies, equipment, and 
materials (including textbooks) destroyed or seriously damaged as a 
result of such disaster, to make minor repairs, and to lease or 
otherwise provide (other than by acquisition of land or erection of 
facilities) school and cafeteria facilities needed to replace 
temporarily such facilities which have been made unavailable as a 
result of the disaster.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated for each fiscal year such amounts as may be necessary to 
carry out the provisions of this section. Pending such appropriation, 
the Secretary is authorized to expend (without regard to the provisions 
of sections 1341 and 1515 of title 31, United States Code) from any 
funds appropriated to the Department of Education and at that time 
available to the Secretary, such sums as may be necessary for providing 
immediate assistance under this section. Expenditures pursuant to the 
preceding sentence shall--
            ``(1) be reported by the Secretary to the Committees on 
        Appropriations and Education and Labor of the House of 
        Representatives and the Committees on Appropriations and Labor 
        and Human Resources of the Senate within 30 days of the 
        expenditure; and
            ``(2) be reimbursed from the appropriations authorized by 
        the first sentence of this subsection.
The report required to be submitted to the Committees on Appropriations 
by paragraph (1) of the preceding sentence shall constitute a budget 
estimate with the meaning of section 3109 of title 31, United States 
Code.
    ``(d) Application Required.--No payment may be made to any local 
educational agency under this section except upon application therefore 
which is submitted through the appropriate State educational agency and 
is filed with the Secretary in accordance with the regulations 
prescribed by the Secretary. In determining the order in which such 
applications shall be approved, the Secretary shall consider the 
relative educational and financial needs of the local educational 
agencies which have submitted approved applications. The Secretary 
shall complete action of approval or disapproval of an application 
within 90 days of the filing of an application.
    ``(e) Payment.--Amounts paid by the Secretary to local educational 
agencies under this section may be paid in advance or by way of 
reimbursement and in such installments as the Secretary may determine. 
Any funds paid to a local educational agency and not expended or 
otherwise used for the purposes for which paid shall be repaid to the 
Treasury of the United States.
    ``(f) Availability.--Funds available for this section for any 
fiscal year shall also be available for section 16 of the Act of 
September 23, 1950 (Public Law 815, 81st Congress).

                     ``TITLE II--GENERAL PROVISIONS

``SEC. 201. ADMINISTRATION.

    ``(a) In General.--The Secretary shall administer this Act, and the 
Secretary may make such regulations and perform such other functions as 
the Secretary finds necessary to carry out the provisions of this Act.
    ``(b) Report.--The Secretary shall include in the Secretary's 
annual report to the Congress a full report of the administration of 
the Secretary's functions under this Act, including a detailed 
statement of receipts and disbursements.

``SEC. 202. DEPARTMENT OF EDUCATION CONTINGENCY FUND.

    ``(a) Establishment.--
            ``(1) In general.--There is established a Department of 
        Education Contingency Fund (hereafter in this Act referred to 
        as the `Fund').
            ``(2) Contents.--The Fund shall consist of amounts 
        appropriated to the Fund pursuant to section 101(c)(2), amounts 
        deposited into the Fund pursuant to section 101(d)(2), and any 
        interest on or earnings from the Fund.
    ``(b) Uses.--The Secretary shall use amounts in the Fund to meet 
emergencies and unforeseen contingencies affecting the local 
educational agencies assisted under this Act (including local 
educational agencies assisted under section 103(d)(3)) when other 
funding sources have been exhausted. The Secretary shall consider as 
examples of emergencies to be funded under this section--
            ``(1) a local educational agency eligible for payment under 
        section 103(e);
            ``(2) a local educational agency that experiences an 
        increase in the number of federally connected children 
        described in section 103(a) from the prior fiscal year to the 
        fiscal year in which the determination is made, but is not 
        eligible for a payment under section 104; and
            ``(3) a local educational agency that does not receive a 
        payment under section 102 because of the operation of 
        subsection (g) of such section due to circumstances beyond the 
        control of such agency.
    ``(c) Availability.--Amounts in the Fund shall be available to the 
Secretary to carry out the provisions of this section and shall remain 
available without fiscal year limitation until expended.
    ``(d) Report.--Whenever the Secretary makes funds available under 
this section, or denies the availability of such funds, to a local 
educational agency, the Secretary shall report such action to the 
Committees on Appropriations and Education and Labor of the House of 
Representatives and the Committees on Appropriations and Labor and 
Human Resources of the Senate within 30 days of such expenditure. Such 
report shall include a description of the request for funding under 
this section from the local educational agency applying for such 
funding along with the Secretary's justification for approval or 
disapproval of such request.
    ``(e) Application.--Each local educational agency desiring 
assistance under this section in any fiscal year shall submit an 
application, in accordance with such regulations as the Secretary may 
promulgate, to the Secretary postmarked not later than January 31 of 
such fiscal year.

``SEC. 203. USE OF OTHER FEDERAL AGENCIES; TRANSFER AND AVAILABILITY OF 
              APPROPRIATIONS.

    ``(a) Use of Other Federal Agencies.--In carrying out the 
Secretary's functions under this Act, the Secretary is authorized, 
pursuant to proper agreement with any other Federal department or 
agency, to utilize the services and facilities of such department or 
agency, and, when the Secretary deems it necessary or appropriate, to 
delegate to any officer or employee thereof the function under section 
106 of making arrangements for providing free public education. Payment 
to cover the cost of such utilization or of carrying out such delegated 
function shall be made either in advance of or by way of reimbursement, 
as may be provided in such agreement.
    ``(b) Requests for Information.--All Federal departments or 
agencies administering Federal property on which children reside, and 
all such departments or agencies principally responsible for Federal 
activities which may occasion assistance under title I, shall to the 
maximum extent practicable comply with requests of the Secretary for 
information the Secretary may require in carrying out the purposes of 
title I.

``SEC. 204. DEFINITIONS; ATTENDANCE DETERMINATION.

    ``(a) Definitions.--As used in this Act:
            ``(1) The term `Federal property' means real property which 
        is owned by the United States or is leased by the United 
        States, and which is not subject to taxation by any State or 
        any political subdivision of a State or by the District of 
        Columbia. Such term includes (A) except for purposes of section 
        106, real property held in trust by the United States for 
        individual Indians or Indian tribes, and real property held by 
        individual Indians or Indian tribes, which is subject to 
        restrictions on alienation imposed by the United States, (B) 
        for one year beyond the end of the fiscal year in which 
        occurred the sale or transfer thereof by the United States, any 
        property considered prior to such sale or transfer to be 
        Federal property for the purposes of this Act, (C) any low-rent 
        housing (whether or not owned by the United States) which is 
        part of a low-rent housing project assisted under the United 
        States Housing Act of 1937, section 516 of the Housing Act of 
        1949, or part B of title III of the Economic Opportunity Act of 
        1964, (D) any school which is providing flight training to 
        members of the Air Force under contractual arrangements with 
        the Department of the Air Force at an airport which is owned by 
        a State or a political subdivision of a State and (E) any 
        property owned by a foreign government or by an international 
        organization which by reason of such ownership is not subject 
        to taxation by the State in which it is located or a 
        subdivision thereof. Such term also includes any interest in 
        Federal property (as defined in the foregoing provisions of 
        this paragraph) under an easement, lease, license, permit, or 
        other arrangement, as well as any improvements of any nature 
        (other than pipelines or utility lines) on such property even 
        though such interests or improvements are subject to taxation 
        by a State or political subdivision of a State or by the 
        District of Columbia. Notwithstanding the foregoing provisions 
        of this paragraph, such term does not include any real property 
        under the jurisdiction of the United States Postal Service and 
        used primarily for the provision of postal service. Real 
        property which qualifies as Federal property under clause (A) 
        of this paragraph shall not lose such qualification because it 
        is used for a low-rent housing project. Any real property that 
        was designated by treaty as tribal land, or was formerly 
        property described under subparagraph (A) and is currently 
        owned by an Indian housing authority and used for low-rent 
        housing described in subparagraph (C) (including a mutual help 
        homeownership opportunity project assisted under section 202 of 
        the United States Housing Act of 1937), shall be deemed to 
        qualify as Federal property under subparagraph (A).
            ``(2) The term `child' means any child who is within the 
        age limits for which the applicable State provides free public 
        education.
            ``(3) The term `parent' includes a legal guardian or other 
        person standing in loco parentis.
            ``(4) The term `free public education' means education 
        which is provided at public expense, under public supervision 
        and direction, and without tuition charge, and which is 
        provided as preschool, kindergarten, elementary or secondary 
        school education in the applicable State.
            ``(5)(A) The term `current expenditures' means expenditures 
        for free public education, including expenditures for 
        administration, instruction, attendance and health services, 
        pupil transportation services, operation and maintenance of 
        plant, fixed charges, and net expenditures to cover deficits 
        for food services and student body activities, but not 
        including expenditures for community services, capital outlay, 
        and debt service, or any expenditures made of funds granted 
        under chapter 1 or chapter 2 of title I of the Elementary and 
        Secondary Education Act of 1965, the Indian Education Act of 
        1988 and the Johnson-O'Malley Act.
            ``(B) The determination of whether an expenditure for the 
        replacement of equipment is considered a current expenditure or 
        a capital outlay shall be determined in accordance with 
        generally accepted State accounting principles.
            ``(6)(A) For purposes of title I, the term `local 
        educational agency' means a board of education or other legally 
        constituted local school authority having administrative 
        control and direction of free public elementary and secondary 
        education through grade 12 in a county, township, independent, 
        or other school district located within a State. Such term 
        includes any State agency which directly operates and maintains 
        facilities for providing free public education. Such term does 
        not include any agency or school authority that the Secretary 
        determines on a case-by-case basis--
                    ``(i) was constituted or reconstituted primarily 
                for the purpose of receiving assistance under this Act 
                or increasing the amount of that assistance;
                    ``(ii) is not constituted or reconstituted for 
                legitimate educational purposes; or
                    ``(iii) was previously part of a school district 
                upon being constituted or reconstituted.
            ``(B) For the purpose of carrying out the provisions of 
        section 103(a)(1)(B), such term includes any agency or school 
        authority that has had an arrangement with a nonadjacent school 
        district for the education of children of persons who reside or 
        work on an installation of the Department of Defense for more 
        than 25 years, but only if the Secretary determines that there 
        is no single school district adjacent to the school district in 
        which the installation is located that is capable of educating 
        all such children.
            ``(7) The term `State educational agency' means the officer 
        or agency primarily responsible for the State supervision of 
        public elementary and secondary schools.
            ``(8) The term `State' means a State, the Commonwealth of 
        Puerto Rico, Wake Island, Guam, the District of Columbia, 
        American Samoa, the Commonwealth of the Northern Mariana 
        Islands, or the Virgin Islands.
            ``(9) The term `Secretary' means the Secretary of 
        Education.
            ``(10) The term `county' means those divisions of a State 
        utilized by the Secretary of Commerce in compiling and 
        reporting data regarding counties.
            ``(11) The term `construction' includes the preparation of 
        drawings and specifications for school facilities; erecting, 
        building, acquiring, altering, remodeling, improving, or 
        extending school facilities; and the inspection and supervision 
        of the construction of school facilities.
            ``(12) The term `school facilities' means classrooms and 
        related facilities (including initial equipment) for free 
        public education and interests in land (including site, 
        grading, and improvements) on which such facilities are 
        constructed, except that such term does not include those 
        gymnasiums and similar facilities intended primarily for 
        exhibitions for which admission is to be charged to the general 
        public.
            ``(13) The term `equipment' includes machinery, utilities, 
        and built-in equipment and any necessary enclosures or 
        structures to house them, and includes all other items 
        necessary for the functioning of a particular facility as a 
        facility for the provision of educational services, including 
        items such as instructional equipment and necessary furniture, 
        printed, published, and audio-visual instructional materials, 
        and books, periodicals, documents, and other related materials.
    ``(b) Attendance Determination.--For the purpose of this Act, 
average daily attendance shall be determined in accordance with State 
law, except that (A) the average daily attendance of children with 
respect to whom payment is to be made under section 103 or 104 of this 
Act shall be determined in accordance with regulations of the 
Secretary, and (B) notwithstanding any other provision of this Act, 
where the local educational agency of the school district in which any 
child resides makes or contracts to make a tuition payment for the free 
public education of such child in a school situated in another school 
district, for purposes of this Act the attendance of such child at such 
school shall be held and considered (i) to be attendance at a school of 
the local educational agency so making or contracting to make such 
tuition payment and (ii) not to be attendance at a school of the local 
educational agency receiving such tuition payment or entitled to 
receive such payment under the contract. A child shall, for the 
purposes of section 103, be deemed to be in attendance at a school of a 
local educational agency if such child is determined to be federally 
connected under section 103(a) for any fiscal year and if such child is 
attending a school other than a school of such agency because such 
child is a child with a disability (as such term is defined in section 
602(a)(1) of the Individuals with Disabilities Education Act) and if 
such agency makes a tuition payment on behalf of such child to such 
school for such fiscal year. Regulations promulgated by the Secretary 
in accordance with subparagraph (A) of this paragraph shall permit the 
conversion of average daily membership to average daily attendance for 
local educational agencies in States which reimburse local educational 
agencies based upon average daily membership and which do not require 
local educational agencies to keep records based on average daily 
attendance.

``SEC. 205. REGULATION REQUIREMENTS.

    ``The Secretary is authorized to promulgate such regulations as the 
Secretary considers necessary to reasonably ensure compliance with the 
provisions of this Act in accordance with the procedures provided for 
under section 1431 of the Elementary and Secondary Education Act of 
1965.''.

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