[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3651 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3651

    To reauthorize the Impact Aid Program under the Elementary and 
                    Secondary Education Act of 1965.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 25, 2009

  Mr. Boren 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 ``Impact Aid Fairness and Equity Act 
of 2009''.

SEC. 2. AMENDMENTS TO SECTION 8002 (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 to read as follows:

``SEC. 8002. PAYMENTS RELATING TO 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 a fiscal year ending prior to October 1, 2003--
            ``(1) that the United States owns Federal property in the 
        local educational agency, and that such property--
                    ``(A) has been acquired by the United States since 
                1938;
                    ``(B) was not acquired by exchange for other 
                Federal property in the local educational agency which 
                the United States owned before 1939; and
                    ``(C) had an assessed value (according to original 
                records (including reproductions of those records) 
                documenting the assessed value of such property 
                (determined as of the time or times when so acquired) 
                prepared by the local official referred to in 
                subsection (b)(3) or, when such original records are 
                not available due to unintentional destruction (such as 
                natural disaster, fire, flooding, pest infestation, or 
                deterioration due to age), other records, including 
                Federal agency records, local historical records, or 
                other records that the Secretary determines to be 
                appropriate and reliable) aggregating 10 percent or 
                more of the assessed value of--
                            ``(i) all real property in the local 
                        educational agency (similarly determined as of 
                        the time or times when such Federal property 
                        was so acquired); or
                            ``(ii) all real property in the local 
                        educational agency as assessed in the first 
                        year preceding or succeeding acquisition, 
                        whichever is greater, only if--
                                    ``(I) the assessment of all real 
                                property in the local educational 
                                agency is not made at the same time or 
                                times that such Federal property was so 
                                acquired and assessed; and
                                    ``(II) State law requires an 
                                assessment be made of property so 
                                acquired; and
            ``(2) that such agency is not being substantially 
        compensated for the loss in revenue resulting from such 
        ownership by increases in revenue accruing to the agency from 
        the conduct of Federal activities with respect to such Federal 
        property, then such agency shall be eligible to receive the 
        amount described in subsection (b).
    ``(b) Amount.--
            ``(1) In general.--(A)(i)(I) Subject to subclauses (II) and 
        (III), the amount that a local educational agency shall be paid 
        under subsection (a) for a fiscal year shall be calculated in 
        accordance with paragraph (2).
            ``(II) Except as provided in subclause (III), the Secretary 
        may not reduce the amount of a payment under this section to a 
        local educational agency for a fiscal year by (aa) the amount 
        equal to the amount of revenue, if any, the agency received 
        during the previous fiscal year from activities conducted on 
        Federal property eligible under this section and located in a 
        school district served by the agency, including amounts 
        received from any Federal department or agency (other than the 
        Department of Education) from such activities, by reason of 
        receipt of such revenue, or (bb) any other amount by reason of 
        receipt of such revenue.
            ``(III) If the amount equal to the sum of (aa) the proposed 
        payment under this section to a local educational agency for a 
        fiscal year and (bb) the amount of revenue described in 
        subclause (II)(aa) received by the agency during the previous 
        fiscal year, exceeds the maximum amount the agency is eligible 
        to receive under this section for the fiscal year involved, 
        then the Secretary shall reduce the amount of the proposed 
        payment under this section by an amount equal to such excess 
        amount.
            ``(ii) For purposes of clause (i), the amount of revenue 
        that a local educational agency receives during the previous 
        fiscal year from activities conducted on Federal property shall 
        not include payments received by the agency from the Secretary 
        of Defense to support--
                    ``(I) the operation of a domestic dependent 
                elementary or secondary school; or
                    ``(II) the provision of a free public education to 
                dependents of members of the Armed Forces residing on 
                or near a military installation.
            ``(B) If funds appropriated under section 8014(a) are 
        insufficient to pay the amount determined under subparagraph 
        (A), the Secretary shall calculate the payment for each 
        eligible local educational agency in accordance with subsection 
        (h).
            ``(C) Notwithstanding any other provision of this 
        subsection, a local educational agency may not be paid an 
        amount under this section that, when added to the amount such 
        agency receives under section 8003(b), exceeds the maximum 
        amount that such agency is eligible to receive for such fiscal 
        year under section 8003(b)(1)(C), or the maximum amount that 
        such agency is eligible to receive for such fiscal year under 
        this section, whichever is greater.
            ``(D) Notwithstanding any other provision of this 
        subsection, a local educational agency may not be paid an 
        amount under this section that exceeds the total current 
        expenditures of the agency in the second prior fiscal year.
            ``(E) Notwithstanding any other provision of this 
        subsection, in fiscal years 2010, 2011, and 2012 a local 
        educational agency may not be paid an amount under this section 
        that is less than 85 percent of its payment under this section 
        for the prior fiscal year.
            ``(2) Application of current levied real property tax 
        rate.--In calculating the amount that a local educational 
        agency is eligible to receive for a fiscal year, the Secretary 
        shall apply the current levied real property tax rate for 
        current expenditures levied by fiscally independent local 
        educational agencies, or imputed for fiscally dependent local 
        educational agencies, to the current annually determined 
        aggregate assessed value of such acquired Federal property.
            ``(3) Determination of aggregate assessed value.--Such 
        aggregate assessed value of such acquired Federal property 
        shall be determined on the basis of the highest and best use of 
        property adjacent to such acquired Federal property as of the 
        time such value is determined, and provided to the Secretary, 
        by the local official responsible for assessing the value of 
        real property located in the jurisdiction of such local 
        educational agency for the purpose of levying a property tax.
    ``(c) Applicability to Tennessee Valley Authority Act.--For the 
purpose 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 shall not be regarded as Federal property.
    ``(d) Ownership by United States.--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 
        subparagraphs (A), (B), and (C) of subsection (a)(1); 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) restricts some or any construction on such 
                property;
                    ``(B) requires that the property be used in 
                perpetuity for the public purposes for which the 
                property was conveyed;
                    ``(C) requires the grantee of the property to 
                report to the Federal Government (or its agent) 
                regarding information on the use of the property;
                    ``(D) except with the approval of the Federal 
                Government (or its agent), prohibits the sale, lease, 
                assignment, or other disposal of the property unless 
                such sale, lease, assignment, or other disposal is to 
                another eligible government agency; and
                    ``(E) reserves 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) Local Educational Agency Containing Forest Service Land and 
Serving Certain Counties.--Beginning with fiscal year 1995, a local 
educational agency shall be deemed to meet the requirements of 
subsection (a)(1)(C) if such local educational agency meets the 
following requirements:
            ``(1) Acreage and acquisition by the forest service.--The 
        local educational agency serves a school district that contains 
        between 20,000 and 60,000 acres of land that has been acquired 
        by the Forest Service of the Department of Agriculture between 
        1915 and 1990, as demonstrated by written evidence from the 
        Forest Service satisfactory to the Secretary.
            ``(2) County charter.--The local educational agency serves 
        a county chartered under State law in 1875 or 1890.
    ``(f) Special Rule.--(1) Beginning with fiscal year 1994, and 
notwithstanding any other provision of law limiting the period during 
which fiscal year 1994 funds may be obligated, the Secretary shall 
treat the local educational agency serving the Wheatland R-II School 
District, Wheatland, Missouri, as meeting the eligibility requirements 
of section 2(a)(1)(C) of the Act of September 30, 1950 (Public Law 874, 
81st Congress) (as such section was in effect on the day preceding the 
date of enactment of the Improving America's Schools Act of 1994) (20 
U.S.C. 237(a)(1)(C)) or subsection (a)(1)(C).
    ``(2) For each fiscal year beginning with fiscal year 1999, the 
Secretary shall treat the Webster School District, Day County, South 
Dakota as meeting the eligibility requirements of subsection (a)(1)(C) 
of this section.
    ``(3) For each fiscal year beginning with fiscal year 2000, the 
Secretary shall treat the Central Union, California; Island, 
California; Hill City, South Dakota; and Wall, South Dakota local 
educational agencies as meeting the eligibility requirements of 
subsection (a)(1)(C) of this section.
    ``(4) For the purposes of payments under this section for each 
fiscal year beginning with fiscal year 2000, the Secretary shall treat 
the Hot Springs, South Dakota local educational agency as if it had 
filed a timely application under section 8002 of the Elementary and 
Secondary Education Act of 1965 for fiscal year 1994 if the Secretary 
has received the fiscal year 1994 application, as well as exhibits A 
and B not later than December 1, 1999.
    ``(5) For purposes of payments under this section for each fiscal 
year beginning with fiscal year 2000, the Secretary shall treat the 
Hueneme, California local educational agency as if it had filed a 
timely application under section 8002 of the Elementary and Secondary 
Education Act of 1965 if the Secretary has received the fiscal year 
1995 application not later than December 1, 1999.
    ``(g) Former Districts.--
            ``(1) In general.--Where the school district of any local 
        educational agency described in paragraph (2) is formed at any 
        time after 1938 by the consolidation of two or more former 
        school districts, such agency may elect (at any time such 
        agency files an application under section 8005) for any fiscal 
        year after fiscal year 1994 to have (A) the eligibility of such 
        local educational agency, and (B) the amount which such agency 
        shall be eligible to receive, determined under this section 
        only with respect to such of the former school districts 
        comprising such consolidated school districts as such agency 
        shall designate in such election.
            ``(2) Eligible local educational agencies.--A local 
        educational agency referred to in paragraph (1) is any local 
        educational agency that, for fiscal year 1994 or any preceding 
        fiscal year, applied for and was determined eligible under 
        section 2(c) of the Act of September 30, 1950 (Public Law 874, 
        81st Congress) as such section was in effect for such fiscal 
        year.
    ``(h) Payments With Respect to Fiscal Years in Which Insufficient 
Funds Are Appropriated.--For any fiscal year for which the amount 
appropriated under section 8014(a) is insufficient to pay to each 
eligible local educational agency the full amount determined under 
subsection (b), the Secretary shall ratably reduce the payment to each 
local educational agency under subsection (b).
    ``(i) Special Rule.--For purposes of payments under this section 
for each fiscal year beginning with fiscal year 1998--
            ``(1) the Secretary shall, for the Stanley County, South 
        Dakota local educational agency, calculate payments as if 
        subsection (e) had been in effect for fiscal year 1994; and
            ``(2) the Secretary shall treat the Delaware Valley, 
        Pennsylvania local educational agency as if it had filed a 
        timely application under section 2 of Public Law 81-874 for 
        fiscal year 1994.
    ``(j) Prior Year Data.--Notwithstanding any other provision of this 
section, in determining the eligibility of a local educational agency 
for a payment under subsection (b) or (h)(4)(B) of this section for a 
fiscal year, and in calculating the amount of such payment, the 
Secretary--
            ``(1) shall use data from the prior fiscal year with 
        respect to the Federal property involved, including data with 
        respect to the assessed value of the property and the real 
        property tax rate for current expenditures levied against or 
        imputed to the property; and
            ``(2) shall use data from the second prior fiscal year with 
        respect to determining the amount of revenue referred to in 
        subsection (b)(1)(A)(i).
    ``(k) Eligibility.--
            ``(1) Old federal property.--Except as provided in 
        paragraph (2), a local educational agency that is eligible to 
        receive a payment under this section for Federal property 
        acquired by the Federal Government, before the date of the 
        enactment of the Impact Aid Reauthorization Act of 2000, shall 
        be eligible to receive the payment only if the local 
        educational agency submits an application for a payment under 
        this section not later than 7 years after the date of the 
        enactment of such Act.
            ``(2) Combined federal property.--A local educational 
        agency that is eligible to receive a payment under this section 
        for Federal property acquired by the Federal Government before 
        the date of the enactment of the Impact Aid Reauthorization Act 
        of 2000 shall be eligible to receive the payment if--
                    ``(A) the Federal property, when combined with 
                other Federal property in the school district served by 
                the local educational agency acquired by the Federal 
                Government after the date of the enactment of such Act, 
                meets the requirements of subsection (a); and
                    ``(B) the local educational agency submits an 
                application for a payment under this section not later 
                than 7 years after the date of acquisition of the 
                Federal property acquired after the date of the 
                enactment of such Act.
            ``(3) New federal property.--A local educational agency 
        that is eligible to receive a payment under this section for 
        Federal property acquired by the Federal Government after the 
        date of the enactment of the Impact Aid Reauthorization Act of 
        2000 shall be eligible to receive the payment only if the local 
        educational agency submits an application for a payment under 
        this section not later than 7 years after the date of 
        acquisition.
    ``(l) Loss of Eligibility.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, the Secretary shall make a minimum payment to a 
        local educational agency described in paragraph (2), for the 
        first fiscal year that the agency loses eligibility for 
        assistance under this section as a result of property located 
        within the school district served by the agency failing to meet 
        the definition of Federal property under section 
        8013(5)(C)(iii), in an amount equal to 90 percent of the amount 
        received by the agency under this section for the preceding 
        year.
            ``(2) Local educational agency described.--A local 
        educational agency described in this paragraph is an agency 
        that--
                    ``(A) was eligible for, and received, a payment 
                under this section for fiscal year 2002; and
                    ``(B) beginning in fiscal year 2003 or a subsequent 
                fiscal year, is no longer eligible for payments under 
                this section as provided for in subsection (a)(1)(C) as 
                a result of the transfer of the Federal property 
                involved to a non-Federal entity.''.

SEC. 3. AMENDMENTS TO SECTION 8003 (PAYMENTS FOR ELIGIBLE FEDERALLY 
              CONNECTED CHILDREN).

    Section 8003 of the Elementary and Secondary Education Act of 1965 
(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 
                subparagraphs (A) and (B) of paragraph (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 paragraph (1) and not less than 6,000 of such 
                children are children described in subparagraph (A) and 
                (B) of paragraph (1).'';
            (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;
                                    ``(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, 150 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) 150 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 this paragraph 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 1,000 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.
                            ``(iii) Payment cap.--The amount of such 
                        payment to a local educational agency under 
                        this subparagraph shall be no more than needed 
                        to raise the per-pupil expenditure of such 
                        local educational agency to the higher of 110 
                        percent of the State average per-pupil 
                        expenditure of the State in which the local 
                        educational agency is located or the average 
                        per-pupil expenditure of three comparable local 
                        educational agencies.'';
                    (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)''; and
                    (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)--
                                    (I) by striking ``(D) or (E), as 
                                the case may be,'' and inserting 
                                ``(C)''; and
                                    (II) by striking ``(D) or (E) 
                                under'' and inserting ``(C) under'';
            (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 is newly established by a State (first year of 
        operation only).'';
            (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 2010 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 2008;
                    ``(B) for fiscal year 2011 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 2008;
                    ``(C) for fiscal year 2012 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 2008, 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. AMENDMENTS TO SECTION 8007 (CONSTRUCTION).

    Section 8007 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7707) is amended to read as follows:

``SEC. 8007. CONSTRUCTION.

    ``(a) School Facility Emergency and Modernization Grants 
Authorized.--
            ``(1) In general.--From 100 percent of the amount 
        appropriated for each fiscal year under section 8014(e), the 
        Secretary--
                    ``(A) shall award emergency grants in accordance 
                with this subsection to eligible local educational 
                agencies to enable the agencies to carry out emergency 
                repairs of school facilities; and
                    ``(B) shall award modernization grants in 
                accordance with this subsection to eligible local 
                educational agencies to enable the agencies to carry 
                out the modernization of school facilities.
            ``(2) Priority.--In approving applications from local 
        educational agencies for emergency grants and modernization 
        grants under this subsection, the Secretary shall give priority 
        to applications in accordance with the following:
                    ``(A) The Secretary shall first give priority to 
                applications for emergency grants from local 
                educational agencies that meet the requirements of 
                paragraph (3)(A) and, among such applications for 
                emergency grants, shall give priority to those 
                applications from local educational agencies based on 
                the severity of the emergency, as determined by the 
                Secretary.
                    ``(B) The Secretary shall next give priority to 
                applications for modernization grants from local 
                educational agencies that meet the requirements of 
                paragraph (3)(B) and, among such applications for 
                modernization grants, shall give priority to those 
                applications from local educational agencies based on 
                the severity of the need for modernization, as 
                determined by the Secretary.
            ``(3) Eligibility requirements.--
                    ``(A) Emergency grants.--A local educational agency 
                is eligible to receive an emergency grant under 
                paragraph (2)(A) if--
                            ``(i) the agency (or in the case of a local 
                        educational agency that does not have the 
                        authority to tax or issue bonds, the agency's 
                        fiscal agent)--
                                    ``(I) has no practical capacity to 
                                issue bonds; or
                                    ``(II) has minimal capacity to 
                                issue bonds and is at not less than 75 
                                percent of the agency's limit of bonded 
                                indebtedness; or
                            ``(ii) the agency is eligible to receive 
                        assistance under subsection (a) for the fiscal 
                        year and has a school facility emergency, as 
                        determined by the Secretary, that poses a 
                        health or safety hazard to the students and 
                        school personnel assigned to the school 
                        facility.
                    ``(B) Modernization grants.--A local educational 
                agency is eligible to receive a modernization grant 
                under paragraph (2)(B) if--
                            ``(i) the agency receives a basic support 
                        payment under section 8003(b) for the fiscal 
                        year; or
                            ``(ii) the agency receives a federal 
                        properties payment under section 8002 for the 
                        fiscal year.
                    ``(C) Rule of construction.--For purposes of 
                subparagraph (A)(i), a local educational agency--
                            ``(i) has no practical capacity to issue 
                        bonds if the total assessed value of real 
                        property that may be taxed for school purposes 
                        is less than $25,000,000; and
                            ``(ii) has minimal capacity to issue bonds 
                        if the total assessed value of real property 
                        that may be taxed for school purposes is at 
                        least $25,000,000 but not more than 
                        $50,000,000.
            ``(4) Award criteria.--In awarding emergency grants and 
        modernization grants under this subsection, the Secretary shall 
        consider the following factors:
                    ``(A) The ability of the local educational agency 
                to respond to the emergency, or to pay for the 
                modernization project, as the case may be, as measured 
                by--
                            ``(i) the agency's level of bonded 
                        indebtedness;
                            ``(ii) the assessed value of real property 
                        per student that may be taxed for school 
                        purposes compared to the average of the 
                        assessed value of real property per student 
                        that may be taxed for school purposes in the 
                        State in which the agency is located;
                            ``(iii) the agency's total tax rate for 
                        school purposes (or for capital expenditures, 
                        if applicable) compared to the average total 
                        tax rate for school purposes (or the average 
                        capital expenditure tax rate, if applicable) in 
                        the State in which the agency is located; and
                            ``(iv) funds that are available to the 
                        agency, from any other source, including 
                        subsection (a), that may be used for capital 
                        expenditures.
                    ``(B) The percentage of property in the agency that 
                is nontaxable due to the presence of the Federal 
                Government.
                    ``(C) The number and percentages of children 
                described in subparagraphs (A), (B), (C), and (D) of 
                section 8003(a)(1) served in the school facility with 
                the emergency or served in the school facility proposed 
                for modernization, as the case may be.
                    ``(D) In the case of an emergency grant, the 
                severity of the emergency, as measured by the threat 
                that the condition of the school facility poses to the 
                health, safety, and well-being of students.
                    ``(E) In the case of a modernization grant--
                            ``(i) the severity of the need for 
                        modernization, as measured by such factors as--
                                    ``(I) overcrowding, as evidenced by 
                                the use of portable classrooms, or the 
                                potential for future overcrowding 
                                because of increased enrollment; or
                                    ``(II) the agency's inability to 
                                utilize technology or offer a 
                                curriculum in accordance with 
                                contemporary State standards due to the 
                                physical limitations of the current 
                                school facility; and
                            ``(ii) the age of the school facility 
                        proposed for modernization.
            ``(5) Other award provisions.--
                    ``(A) General provisions.--
                            ``(i) Limitations on amount of funds.--
                                    ``(I) In general.--The amount of 
                                funds provided under an emergency grant 
                                or a modernization grant awarded under 
                                this subsection to a local educational 
                                agency that meets the requirements of 
                                subclause (II) of paragraph (3)(A)(i) 
                                for purposes of eligibility under 
                                subparagraph (A) or (B) of paragraph 
                                (3)--
                                            ``(aa) shall not exceed 50 
                                        percent of the total cost of 
                                        the project to be assisted 
                                        under this subsection; and
                                            ``(bb) shall not exceed 
                                        $4,000,000 during any 4-year 
                                        period.
                                    ``(II) In-kind contributions.--A 
                                local educational agency may use in-
                                kind contributions to meet the matching 
                                requirement of subclause (I)(aa).
                            ``(ii) Prohibitions on use of funds.--A 
                        local educational agency may not use funds 
                        provided under an emergency grant or 
                        modernization grant awarded under this 
                        subsection for--
                                    ``(I) a project for a school 
                                facility for which the agency does not 
                                have full title or other interest;
                                    ``(II) stadiums or other school 
                                facilities that are primarily used for 
                                athletic contests, exhibitions, or 
                                other events for which admission is 
                                charged to the general public; or
                                    ``(III) the acquisition of real 
                                property.
                            ``(iii) Supplement, not supplant.--A local 
                        educational agency shall use funds provided 
                        under an emergency grant or modernization grant 
                        awarded under this subsection only to 
                        supplement the amount of funds that would, in 
                        the absence of the Federal funds provided under 
                        the grant, be made available from non-Federal 
                        sources to carry out emergency repairs of 
                        school facilities or to carry out the 
                        modernization of school facilities, as the case 
                        may be, and not to supplant such funds.
                            ``(iv) Maintenance costs.--Nothing in this 
                        subsection shall be construed to authorize the 
                        payment of maintenance costs in connection with 
                        any school facility modernized in whole or in 
                        part with Federal funds provided under this 
                        subsection.
                            ``(v) Environmental safeguards.--All 
                        projects carried out with Federal funds 
                        provided under this subsection shall comply 
                        with all relevant Federal, State, and local 
                        environmental laws and regulations.
                            ``(vi) Carry-over of certain 
                        applications.--A local educational agency that 
                        applies for an emergency grant or a 
                        modernization grant under this subsection for a 
                        fiscal year and does not receive the grant for 
                        the fiscal year shall have the application for 
                        the grant considered for the following fiscal 
                        year, subject to the priority requirements of 
                        paragraph (2) and the award criteria 
                        requirements of paragraph (4).
                    ``(B) Emergency grants; prohibition on use of 
                funds.--A local educational agency that is awarded an 
                emergency grant under this subsection may not use 
                amounts under the grant for the complete or partial 
                replacement of an existing school facility unless such 
                replacement is less expensive or more cost-effective 
                than correcting the identified emergency.
            ``(6) Application.--A local educational agency that desires 
        to receive an emergency grant or a modernization grant under 
        this subsection shall submit an application to the Secretary at 
        such time, in such manner, and accompanied by such information 
        as the Secretary may require. Each application shall contain 
        the following:
                    ``(A) A description of how the local educational 
                agency meets the award criteria under paragraph (4), 
                including the information described in clauses (i) 
                through (iv) of paragraph (4)(A) and subparagraphs (B) 
                and (C) of paragraph (4).
                    ``(B) In the case of an application for an 
                emergency grant--
                            ``(i) a description of the school facility 
                        deficiency that poses a health or safety hazard 
                        to the occupants of the facility and a 
                        description of how the deficiency will be 
                        repaired; and
                            ``(ii) a signed statement from an 
                        appropriate local official certifying that a 
                        deficiency in the school facility threatens the 
                        health or safety of the occupants of the 
                        facility or that prevents the use of all or a 
                        portion of the building.
                    ``(C) In the case of an application for a 
                modernization grant--
                            ``(i) an explanation of the need for the 
                        school facility modernization project;
                            ``(ii) the date on which original 
                        construction of the facility to be modernized 
                        was completed;
                            ``(iii) a listing of the school facilities 
                        to be modernized, including the number and 
                        percentage of children determined under section 
                        8003(a)(1) in average daily attendance in each 
                        school facility; and
                            ``(iv) a description of the ownership of 
                        the property on which the current school 
                        facility is located or on which the planned 
                        school facility will be located.
                    ``(D) A description of the project for which a 
                grant under this subsection will be used, including a 
                cost estimate for the project.
                    ``(E) A description of the interest in, or 
                authority over, the school facility involved, such as 
                an ownership interest or a lease arrangement.
                    ``(F) Such other information and assurances as the 
                Secretary may reasonably require.
            ``(7) Report.--
                    ``(A) In general.--Not later than January 1 of each 
                year, the Secretary shall prepare and submit to the 
                appropriate congressional committees a report that 
                contains a justification for each grant awarded under 
                this subsection for the prior fiscal year.
                    ``(B) Definition.--In this paragraph, the term 
                `appropriate congressional committees' means--
                            ``(i) the Committee on Appropriations and 
                        the Committee on Education and Labor of the 
                        House of Representatives; and
                            ``(ii) the Committee on Appropriations and 
                        the Committee on Health, Education, Labor, and 
                        Pensions of the Senate.''.
                                 <all>