[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4540 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 4540

    To reauthorize the impact aid program under the Elementary and 
                    Secondary Education Act of 1965.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 13, 2007

 Ms. Hirono (for herself and Mr. Terry) introduced the following bill; 
       which was referred to the Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
    To reauthorize the impact aid program under the Elementary and 
                    Secondary Education Act of 1965.

    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 ``Fair Funding for Schools Act''.

SEC. 2. PAYMENTS RELATING TO FEDERAL ACQUISITION OF REAL PROPERTY.

    Section 8002 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7702) is amended--
            (1) in subsection (a) by adding at the end the following: 
        ``The Secretary may base such a determination on original 
        records (including facsimiles or other reproductions of those 
        records) documenting the assessed value of that real property, 
        prepared by a legally authorized official as of the time of the 
        Federal acquisition, or other records that the Secretary 
        determines to be appropriate and reliable, including Federal 
        agency records or local historical records.'';
            (2) in subsection (f) by striking paragraphs (4) and (5);
            (3) in subsection (h) by striking paragraphs (1) through 
        (4) and inserting the following:
            ``(1) Foundation payments for current eligible local 
        educational agencies.--
                    ``(A) In general.--The Secretary shall first make a 
                foundation payment to each local educational agency 
                that was eligible for a payment under this section for 
                fiscal year 2006.
                    ``(B) Amount.--The amount of a payment under 
                subparagraph (A) for a local educational agency shall 
                be equal to 90 percent of the local educational 
                agency's calculated payment for fiscal year 2006.
                    ``(C) Insufficient appropriations.--If the amount 
                appropriated under section 8014(a) is insufficient to 
                pay the full amount determined under this paragraph for 
                all eligible local educational agencies for the fiscal 
                year, then the Secretary shall ratably reduce the 
                payment to each local educational agency under this 
                paragraph.
            ``(2) Foundation payments for local educational agencies 
        deemed eligible after fiscal year 2006.--
                    ``(A) In general.--From those funds remaining after 
                making payments under paragraph (1) for the fiscal year 
                involved, the Secretary shall make a payment to each 
                local educational agency deemed eligible after fiscal 
                year 2006 for the fiscal year in which such agency was 
                deemed eligible.
                    ``(B) In general.--The first payment made to a 
                local educational agency under subparagraph (A) shall 
                thereafter be treated as the foundation payment for 
                that local educational agency.
                    ``(C) Amounts.--The amount of a payment under 
                subparagraph (A) for a local educational agency shall 
                be determined as follows:
                            ``(i) Calculate the local educational 
                        agency's maximum payment under subsection (b).
                            ``(ii) Calculate the percentage that the 
                        amount appropriated under section 8014(a) for 
                        the most recent fiscal year for which the 
                        Secretary has completed making payments under 
                        this section is of the total maximum payments 
                        for such fiscal year for all eligible local 
                        educational agencies and multiply the agency's 
                        maximum payment by such percentage.
                            ``(iii) Multiply the amount determined 
                        under clause (ii) by 90 percent.
            ``(3) Remaining funds.--From any funds remaining after 
        making payments under paragraphs (1) and (2) for the fiscal 
        year involved, the Secretary shall make a payment to each local 
        educational agency that received a foundation payment under 
        paragraphs (1) or (2) for the fiscal year involved in an amount 
        that bears the same relation to the remainder as a percentage 
        share determined for the local educational agency (by dividing 
        the maximum amount that the agency is eligible to receive under 
        subsection (b) by the total of the maximum amounts for all such 
        agencies) bears to the percentage share determined (in the same 
        manner) for all local educational agencies eligible to receive 
        a payment under this section for the fiscal year involved, 
        except that, for the purpose of calculating a local educational 
        agency's maximum payment under subsection (b), data from the 
        most current fiscal year shall be used.'';
            (4) by striking subsections (i), (k), and (m); and
            (5) by redesignating subsections (l) and (n) as (i) and 
        (j), respectively.

SEC. 3. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN.

    Section 8003 of that Act (20 U.S.C. 7703) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by inserting after ``such agency,'' 
                the following: ``including those children enrolled in a 
                State that has a State open enrollment policy (but not 
                including children enrolled in a distance learning 
                program not residing within the defined boundaries of 
                the agency),'';
                    (B) in paragraph (2)--
                            (i) by redesignating subparagraphs (D) 
                        through (F) as (E) through (G), respectively;
                            (ii) by inserting after subparagraph (C) 
                        the following:
                    ``(D) Multiply the number of children described in 
                subparagraph (A) and (B) of subsection (a)(1) by a 
                factor of 1.35 if the local educational agency has a 
                total student enrollment of not less than 25,000 
                students, of which not less than 50 percent are 
                children described in (a)(1) and not less than 6,000 of 
                such children are children described in subparagraph 
                (A) and (B) of subsection (a)(1).''; and
                            (iii) in subparagraph (F) (as so 
                        redesignated) by striking ``.10'' and inserting 
                        ``.05'';
                    (C) in paragraph (4)(B), in each of clauses (i)(I) 
                and (ii)(I), by striking ``3 fiscal years'' and 
                inserting ``4 fiscal years''; and
                    (D) in paragraph (5) by inserting after ``1984,'' 
                the following: ``or under lease of off-base property 
                under subchapter IV of chapter 169 of part IV of 
                subtitle A of title 10, United States Code (10 U.S.C. 
                2871 et seq.),'';
            (2) in subsection (b)(2)--
                    (A) in subparagraph (B)--
                            (i) in the subparagraph heading by striking 
                        ``continuing'';
                            (ii) in clause (i) by striking subclauses 
                        (I) and (II) and inserting the following:
                                    ``(I) is a local educational agency 
                                whose boundaries are the same as a 
                                Federal military installation or the 
                                boundaries are the same as island 
                                property designated by the Secretary of 
                                the Interior to be property that is 
                                held in trust by the Federal Government 
                                and the agency has no taxing authority, 
                                or the agency;
                                    ``(II) has an enrollment of 
                                children described in subsection (a)(1) 
                                that constitutes a percentage of the 
                                total student enrollment of the agency 
                                that is not less than 45 percent;
                                    ``(III) has a per-pupil expenditure 
                                that is less than--
                                            ``(aa) for a local 
                                        educational agency that has a 
                                        total student enrollment of 350 
                                        or more students, 120 percent 
                                        of the average per-pupil 
                                        expenditure of the State in 
                                        which the agency is located; or
                                            ``(bb) for a local 
                                        educational agency that has a 
                                        total student enrollment of 
                                        less than 350 students--

                                                    ``(AA) 120 percent 
                                                of the average per-
                                                pupil expenditure of 
                                                the State in which the 
                                                agency is located; or

                                                    ``(BB) the average 
                                                per-pupil expenditure 
                                                of three comparable 
                                                local educational 
                                                agencies in the State 
                                                in which the agency is 
                                                located;

                                    ``(IV) has a tax rate for general 
                                fund purposes that is at least 95 
                                percent of the average tax rate for 
                                general fund purposes of comparable 
                                local educational agencies in the 
                                State; and
                                    ``(V) for a local educational 
                                agency that has an enrollment of 
                                children described in subsection (a)(1) 
                                that constitutes a percentage of the 
                                total student enrollment of the agency 
                                which is not less than 30 percent, and 
                                has a tax rate for general fund 
                                purposes which is not less than 125 
                                percent of the average tax rate for 
                                general fund purposes for comparable 
                                local educational agencies in the 
                                State.'';
                            (iii) by adding at the end the following:
                            ``(iv) Special rule.--Notwithstanding 
                        clause (i)(II), a local educational agency 
                        shall be considered eligible to receive a basic 
                        support payment under subparagraph (A) with 
                        respect to the number of children determined 
                        under subsection (a)(1) if the agency--
                                    ``(I) has an enrollment of children 
                                described in subsection (a)(1) that 
                                constitutes a percentage of the total 
                                student enrollment of the agency that 
                                is not less than 35 percent including 
                                for purposes of determining eligibility 
                                those children described in 
                                subparagraph (F) and (G) of subsection 
                                (a)(1); and
                                    ``(II) was eligible to receive 
                                assistance under subsection (b)(2) of 
                                section 8003 in fiscal year 2001.'';
                    (B) by striking subparagraphs (C), (D), and (E);
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) Maximum amount for heavily impacted local 
                educational agencies.--
                            ``(i) In general.--The maximum amount that 
                        a heavily impacted local educational agency is 
                        eligible to receive under this paragraph for 
                        any fiscal year is the sum of the total 
                        weighted student units, as computed under 
                        subsection (a)(2) and subject to clause (ii), 
                        multiplied by the greater of--
                                            ``(I) four-fifths of the 
                                        average per-pupil expenditure 
                                        of the State in which the local 
                                        educational agency is located 
                                        for the third fiscal year 
                                        preceding the fiscal year for 
                                        which the determination is 
                                        made; or
                                            ``(II) four-fifths of the 
                                        average per-pupil expenditure 
                                        of all of the States for the 
                                        third fiscal year preceding the 
                                        fiscal year for which the 
                                        determination is made.
                            ``(ii) Special rule.--(I)(aa) For a local 
                        educational agency with respect to which 35 
                        percent or more of the total student enrollment 
                        of the schools of the agency are children 
                        described in subparagraph (D) or (E) (or a 
                        combination thereof) of subsection (a)(1), and 
                        has an enrollment of children described in 
                        subparagraph (A), (B), or (C) of such 
                        subsection equal to at least 10 percent of the 
                        agency's total enrollment, the Secretary shall 
                        calculate the weighted student units of those 
                        children described in subparagraph (D) or (E) 
                        of such subsection by multiplying the number of 
                        such children by a factor of 0.55.
                            ``(bb) For any local educational agency 
                        that received a payment under this clause in 
                        fiscal year 2006 the local educational agency 
                        shall not be required to have an enrollment of 
                        children described in subparagraphs (A), (B), 
                        or (C) of such subsection equal to at least 10 
                        percent of the agency's total enrollment.
                            ``(II) For a local educational agency that 
                        has an enrollment of 100 or fewer children 
                        described in subsection (a)(1), the Secretary 
                        shall calculate the total number of weighted 
                        student units for purposes of subsection (a)(2) 
                        by multiplying the number of such children by a 
                        factor of 1.75.
                            ``(III) For a local educational agency that 
                        does not qualify under (B)(i)(I) of this 
                        subsection and has an enrollment of more than 
                        100 but not more than 1000 children described 
                        in subsection (a)(1), the Secretary shall 
                        calculate the total number of weighted student 
                        units for purposes of subsection (a)(2) by 
                        multiplying the number of such children by a 
                        factor of 1.25.'';
                    (D) by redesignating subparagraph (F) as (D) and, 
                in that subparagraph--
                            (i) by striking clause (ii);
                            (ii) by striking ``; and'' at the end of 
                        clause (i) and inserting a period; and
                            (iii) by striking ``the Secretary--'' and 
                        all that follows through ``shall use'' and 
                        inserting ``the Secretary shall use'';
                    (E) by redesignating subparagraph (G) as (E) and, 
                in that subparagraph, in the matter preceding clause 
                (i), by striking ``(C)(i)(II)(bb)'' and inserting 
                ``(B)(i)(II)(bb)'';
                    (F) by redesignating subparagraph (H) as (F) and, 
                in that subparagraph--
                            (i) in clause (i)--
                                    (I) by striking ``(B), (C), (D), or 
                                (E),'' and inserting ``(B) or (C),'';
                                    (II) by striking ``by reason of'' 
                                and inserting ``due to'';
                                    (III) by inserting after ``clause 
                                (iii),'' the following: ``or as the 
                                direct result of base realignment and 
                                closure or modularization as determined 
                                by the Secretary of Defense and force 
                                structure change or force 
                                relocation,''; and
                                    (IV) by inserting before the period 
                                at the end the following: ``or during 
                                such time as activities associated with 
                                base closure and realignment, 
                                modularization, force structure change, 
                                or force relocation is ongoing''; and
                            (ii) in clause (ii) by striking ``(D) or 
                        (E)'' both places such term appears and 
                        inserting ``(C)'';
            (3) in subsection (b)(3)(B)--
                    (A) by redesignating clause (iv) as (v); and
                    (B) by inserting after clause (iii) the following:
                            ``(iv) For any local educational agency 
                        that is providing a program of distant learning 
                        to children not residing within the legally 
                        defined boundaries of the agency, the Secretary 
                        shall disregard such children from such 
                        agency's total enrollment when calculating the 
                        percentage under subclause (I) of clause (i) 
                        and shall disregard any funds received for such 
                        children when calculating the total current 
                        expenditures attributed to the operation of 
                        such agency when calculating the percentage 
                        under subclause (II) of clause (i).'';
            (4) in subsection (b)(3)(C) by striking ``or (E) of 
        paragraph (2), as the case may be'' and inserting ``of 
        paragraph (2)''.
            (5) in subsection (b)(3), by amending subparagraph (D) to 
        read as follows:
                    ``(D) Ratable distribution.--For any fiscal year 
                described in subparagraph (A) for which the sums 
                available exceed the amount required to pay each local 
                educational agency 100 percent of its threshold payment 
                the Secretary shall distribute the excess sums to each 
                eligible local educational agency that has not received 
                its full amount computed under paragraph (1) or (2) (as 
                the case may be) by multiplying--
                            ``(i) a percentage, the denominator of 
                        which is the difference between the full amount 
                        computed under paragraph (1) or (2) (as the 
                        case may be) for all local educational agencies 
                        and the amount of the threshold payment (as 
                        calculated under subparagraphs (B) and (C) of 
                        all local educational agencies, and the 
                        numerator of which is the aggregate amount of 
                        the excess sums by:
                            ``(ii) the difference between the full 
                        amount computed under paragraph (1) or (2) (as 
                        the case may be) for the agency and the amount 
                        of the threshold payment as calculated under 
                        subparagraphs (B) and (C) of the agency.'';
            (6) in subsection (c) by amending paragraph (2) to read as 
        follows:
            ``(2) Exception.--Calculation of payments for a local 
        educational agency shall be based on data from the fiscal year 
        for which the agency is making an application for payment if 
        such agency:
                    ``(A) is newly established by a State (first year 
                of operation only), or
                    ``(B)(i) was eligible to receive a payment under 
                this section in the previous fiscal year and such 
                agency has had an overall increase (as determined by 
                the Secretary of Education in consultation with the 
                Secretary of Defense, the Secretary of Interior or 
                other Federal agencies) of not less than 250 students 
                or 10 percent as described in section 8003(a)(1)(A), 
                (B), (C), (D) or (F) and (G) if those children 
                described in (F) or (G) are civilian dependents of 
                employees of the Department of Defense and/or the 
                Department of the Interior; and
                    ``(ii) such increase occurred during the period 
                between the end of the school year preceding the fiscal 
                year for which the application is being made and the 
                beginning of the school year immediately preceding that 
                school year as the result of closure or realignment of 
                military installations under the base closure process 
                or the relocation of members of the Armed Forces and 
                civilian employees of the Department of Defense as part 
                of force structure changes or movements of units or 
                personnel between military installations or because of 
                actions initiated by the Secretary of Interior or other 
                Federal agency.'';
            (7) in subsection (e) by striking paragraphs (1) and (2) 
        and inserting the following:
            ``(1) In general.--Subject to paragraph (2), the total 
        amount the Secretary shall pay a local education agency 
        received under subsection (b)(1), (b)(2) or (b)(2)(B)(ii)--
                    ``(A) for fiscal year 2008 shall not be less than 
                90 percent of the total amount that the local education 
                agency received under subsection (b)(1), (b)(2) or 
                (b)(2)(B)(ii) for fiscal year 2007;
                    ``(B) for fiscal year 2009 shall not be less than 
                80 percent of the total amount that the local 
                educational agency received under subsection (b)(1), 
                (b)(2) or (b)(2)(B)(ii) for fiscal year 2007;
                    ``(C) for fiscal year 2010 shall not be less than 
                70 percent of the total amount that the local 
                educational agency received under subsection (b)(1), 
                (b)(2) or (b)(2)(B)(ii) for fiscal year 2007 of which 
                such amount shall be considered a foundation payment 
                for each succeeding fiscal year until such time as the 
                agency's maximum payment as determined under paragraphs 
                (1) or (2) of subsection (b) as the case may be, 
                exceeds the amount provided for under this 
                subparagraph.
            ``(2) Ratable reduction.--
                    ``(A) In general.--If the sums made available under 
                this title for any fiscal year are insufficient to pay 
                the full amounts that all local educational agencies in 
                all States are eligible to receive under paragraph (1) 
                for such year, then the Secretary shall ratably reduce 
                the payments to all agencies for such year.
                    ``(B) Additional funds.--If additional funds become 
                available for making payments under paragraph (1) for 
                such fiscal year, payments that were reduced under 
                subparagraph (A) shall be increased on the same basis 
                as such payments were reduced.''; and
            (8) by striking subsection (g).

SEC. 4. CONSTRUCTION.

    Section 8007 of that Act (20 U.S.C. 7707) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``40 percent'' 
                and inserting ``80 percent'';
                    (B) in paragraph (2) by adding at the end the 
                following:
                    ``(C) The agency is eligible under section 
                8003(b)(2) or is receiving a basic support payment 
                under circumstances described in section 8003 
                (b)(2)(B)(ii).''; and
                    (C) by striking paragraph (3) and inserting the 
                following:
            ``(3) Amount of payments.--
                    ``(A) Local educational agencies impacted by 
                military dependent children.--The amount of a payment 
                to each local educational agency described in this 
                subsection that is impacted by military dependent 
                children for fiscal year shall be equal to--
                            ``(i)(I) 40 percent of the amount 
                        appropriated under section 8014(e) for such 
                        fiscal year; divided by
                            ``(II) the number of children described in 
                        subparagraphs (B) and (D)(i) of section 
                        8003(a)(1) who were in average daily attendance 
                        for all local educational agencies described in 
                        paragraph (2), including the number of children 
                        attending a school facility described in 
                        section 8008(a) if the Secretary does not 
                        provide assistance for the school facility 
                        under that section for the fiscal year; 
                        multiplied by
                            ``(ii) the number of children determined 
                        for such agency;
                                    ``(I) but not less than $25,000, 
                                except that this subparagraph shall not 
                                apply if the amount available to carry 
                                out paragraph (1) for such fiscal year 
                                is less than $32,000,000; and
                                    ``(II) not more than $3,000,000.
                    ``(B) Local educational agencies impacted by 
                children who reside on indian lands.--The amount of a 
                payment to each local educational agency described in 
                this subsection that is impacted by children who reside 
                on Indian lands for a fiscal year shall be equal to--
                            ``(i)(I) 40 percent of the amount 
                        appropriated under section 8014(e) for such 
                        fiscal year divided by
                            ``(II) the number of children described in 
                        section 8003(a)(1)(C) who were in average daily 
                        attendance for all local educational agencies 
                        described in paragraph (2); multiplied by--
                            ``(ii) the number of children determined 
                        for such agency;
                                    ``(I) but not less than $25,000, 
                                except that this subparagraph shall not 
                                apply if the amount available to carry 
                                out paragraph (1) for such fiscal year 
                                is less than $32,000,000 and
                                    ``(II) not more than $3,000,000.''; 
                                and
            (2) in subsection (b)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by striking ``60 percent'' and 
                inserting ``20 percent'';
                    (B) in paragraph (3)(A), in the matter preceding 
                clause (i), by inserting after ``an emergency grant 
                under paragraph (2)(A)'' the following: ``if the agency 
                is covered by paragraph (7), or'';
                    (C) in paragraph (3)(C)(i)(I) by striking ``the 
                agency meets at least one'' and all that follows 
                through the period at the end and inserting ``the 
                number of children determined under section 
                8003(a)(1)(C) for the agency for the preceding school 
                year constituted at least 40 percent of the total 
                student enrollment in the schools of the agency during 
                the preceding school year.'';
                    (D) by striking paragraph (3)(D)(ii)(II) and 
                inserting the following:
                                    ``(II) The number of children 
                                determined under section 8003(a)(1)(C) 
                                for the school for the preceding school 
                                year constituted at least 40 percent of 
                                the total student enrollment in the 
                                school during the preceding school 
                                year.'';
                    (E) in paragraph (4)(C) by striking ``(A), (B), 
                (C), and (D)'' and inserting ``(A) and (C)'';
                    (F) by redesignating paragraph (7) as paragraph 
                (8); and
                    (G) by inserting after paragraph (6) the following:
            ``(7) Special rule.--Notwithstanding paragraphs 
        (3)(C)(i)(I) and (3)(D)(ii)(II), a local educational agency is 
        eligible to receive a grant under this subsection not to exceed 
        $3,000,000 in any one fiscal year if such agency--
                    ``(A) was eligible to receive a payment under 
                section 8003 for the fiscal year prior to the year for 
                which the application is made; and
                    ``(B) has had an overall increase in enrollment--
                            ``(i) during the period between the end of 
                        the school year preceding the fiscal year for 
                        which the application is made and the beginning 
                        of the school year immediately preceding that 
                        school year;
                            ``(ii) of not less than 250 students or 10 
                        percent (whichever is lower), are children 
                        described in--
                                    ``(I) subparagraph (A), (B), (C), 
                                or (D) of section 8003(a) (1); or
                                    ``(II) subparagraph (F) or (G) of 
                                section 8003(a) (1), but only to the 
                                extent such children are civilian 
                                dependents of employees of the 
                                Department of Defense; and
                            ``(iii) that is the direct result of one or 
                        more of the following:
                                    ``(I) Base realignment and closure 
                                or global rebasing, as determined by 
                                the Secretary of Defense.
                                    ``(II) Force structure changes or 
                                force reductions.
                                    ``(III) An action initiated by the 
                                Secretary of Interior or other Federal 
                                agency.''.

SEC. 5. STATE CONSIDERATION OF PAYMENTS IN PROVIDING STATE AID.

    Section 8009 of that Act (20 U.S.C. 7709) is amended--
            (1) in subsection (b)(1) by inserting before the period at 
        the end the following: ``and for which the average per pupil 
        expenditure is equal to or greater than the average per pupil 
        expenditure of all the States in the third fiscal year 
        preceding the fiscal year for which the State is applying for 
        equalization under the section'';
            (2) in subsection (b)(2) by striking subparagraphs (A) and 
        (B) and inserting the following:
                    ``(A) States currently qualifying.--
                            ``(i) In general.--For purposes of 
                        paragraph (1), a program of State aid for any 
                        State qualifying under this section in fiscal 
                        year 2006 equalizes expenditures among local 
                        educational agencies if, in the second fiscal 
                        year preceding the fiscal year for which the 
                        determination is made the amount of per-pupil 
                        expenditures made by, or per-pupil revenues 
                        available to, the local educational agency in 
                        the State with the highest such per-pupil 
                        expenditures or revenues did not exceed the 
                        amount of such per-pupil expenditures made by, 
                        or per-pupil revenues available to, the local 
                        educational agency in the State with the lowest 
                        such expenditures or revenues by more than 25 
                        percent as calculated under clause (i).
                            ``(ii) Other factors.--In making a 
                        determination under this subparagraph, the 
                        Secretary notwithstanding regulations in use 
                        prior to the enactment of this Act shall--
                                    ``(I) arrange all local educational 
                                agencies in the State by per-pupil 
                                expenditures or revenues in descending 
                                order from the highest to the lowest;
                                    ``(II) using per pupil expenditures 
                                or revenues as the only criteria 
                                disregard those local educational 
                                agencies that are spending above the 
                                95th percentile and those spending 
                                below the 5th percentile;
                                    ``(III) identify the local 
                                educational agency at the 95th 
                                percentile and the local educational 
                                agency at the 5th percentile;
                                    ``(IV) subtract the amount of per-
                                pupil expenditures or revenues of the 
                                local educational agency at the 5th 
                                percentile from the amount of per-pupil 
                                expenditures or revenues of the local 
                                educational agency at the 95th 
                                percentile and divide the difference by 
                                the per-pupil expenditures or revenues 
                                of the local educational agency at the 
                                5th percentile; and
                                    ``(V) take into account the extent 
                                to which a program of State aid 
                                reflects the additional cost of 
                                providing free public education in 
                                particular types of local educational 
                                agencies, such as those that are 
                                geographically isolated, or to 
                                particular types of students, such as 
                                children with disabilities.
                    ``(B) New states applicants.--
                            ``(i) In general.--For purposes of 
                        paragraph (1), a program of State aid for this 
                        section after fiscal year 2006 equalizes 
                        expenditures among local educational agencies 
                        if, in the second fiscal year preceding the 
                        fiscal year for which the determination is 
                        made, the amount of per-pupil expenditures made 
                        by, or per pupil revenues available to, the 
                        local educational agency in the State with the 
                        highest such per-pupil expenditures or revenues 
                        did not exceed the amount of such per-pupil 
                        expenditures made by, or per-pupil revenues 
                        available to, the local educational agency in 
                        the State with the lowest such expenditures or 
                        revenues by more than 10 percent as calculated 
                        under clause (i).
                            ``(ii) Other factors.--In making a 
                        determination under this subparagraph, the 
                        Secretary notwithstanding regulations in use 
                        prior to the enactment of this Act shall--
                                    ``(I) arrange all local educational 
                                agencies in the State by per pupil 
                                expenditures or revenues in descending 
                                order from the highest to the lowest;
                                    ``(II) using per-pupil expenditures 
                                or revenues as the only criteria 
                                disregard those local educational 
                                agencies that are spending above the 
                                95th percentile and those spending 
                                below the 5th percentile;
                                    ``(III) identify the local 
                                educational agency at the 95th 
                                percentile and the local educational 
                                agency at the 5th percentile;
                                    ``(IV) subtract the amount of per-
                                pupil expenditures or revenues of the 
                                local educational agency at the 5th 
                                percentile from the amount of per-pupil 
                                expenditures or revenues of the local 
                                educational agency at the 95th 
                                percentile and divide the difference by 
                                the per-pupil expenditures or revenues 
                                of the local educational agency at the 
                                5th percentile; and
                                    ``(V) take into account the extent 
                                to which a program of State aid 
                                reflects the additional cost of 
                                providing free public education in 
                                particular types of local educational 
                                agencies, such as those that are 
                                geographically isolated, or to 
                                particular types of students, such as 
                                children with disabilities.''; and
            (3) in subsection (d)(2)--
                    (A) by striking ``A State'' and inserting the 
                following:
                    ``(A) In general.--A State''; and
                    (B) by adding at the end the following:
                    ``(B) States that are not equalized states.--A 
                State that has not been approved as an equalized State 
                under subsection (b) shall not consider funds received 
                under section 8002 or section 8003 of this title in any 
                State formula or place a limit or direct the use of 
                such funds or consider such funds in any State 
                formula.''.

SEC. 6. DEFINITIONS.

    Section 8013 of that Act (20 U.S.C. 7713) is amended--
            (1) in paragraph (1) by striking ``and Marine Corps'' and 
        inserting ``Marine Corps, and Coast Guard'';
            (2) in paragraph (9) by adding at the end the following:
                    ``(C) New local educational agencies.--Except for 
                those agencies deemed eligible under section 8003 prior 
                to the enactment of this subparagraph, any new local 
                educational agency making application must have 
                boundaries as defined by State law and which has been 
                granted the authority to tax or to receive an imputed 
                tax from either a city, county or township body.''.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    Section 8014 of that Act (20 U.S.C. 7714) is amended--
            (1) in subsection (a) by striking ``$32,000,000 for fiscal 
        year 2000'' and inserting ``$75,000,000 for fiscal year 2008'';
            (2) in subsection (b) by striking ``$809,400,000 for fiscal 
        year 2000'' and inserting ``$1,225,000,000 for fiscal year 
        2008'';
            (3) in subsection (c) by striking ``$50,000,000 for fiscal 
        year 2000'' and inserting ``$55,000,000 for fiscal year 2008'';
            (4) by redesignating subsection (e) as (d) and, in that 
        subsection, by striking ``$10,052,000'' and all that follows 
        through ``and such sums'' and inserting ``$150,000,000 for 
        fiscal year 2008 and such sums'';
            (5) by redesignating subsection (f) as (e) and, in that 
        subsection, by striking ``$5,000,000 for fiscal year 2000'' and 
        inserting ``$10,000,000 for fiscal year 2008''; and
            (6) by adding at the end the following:
    ``(f) Allocation of Dollars From Previous Fiscal Years.--When final 
payments are made for a fiscal year the Secretary shall add any 
remaining funds to those funds appropriated for such section for the 
next fiscal year for the purpose of making payments subject to the 
provisions of the applicable section.''.

SEC. 8. CONFORMING REPEAL.

    Subpart 20 (20 U.S.C. 7281 et seq.) of part D of title V of that 
Act (relating to additional assistance for certain local educational 
agencies impacted by Federal property acquisition) is repealed.
                                 <all>