[House Report 104-560]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-560
_______________________________________________________________________


 
              IMPACT AID TECHNICAL AMENDMENTS ACT OF 1996

                                _______


  May 7, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


     Mr. Goodling, from the Committee on Economic and Educational 
                 Opportunities, submitted the following

                              R E P O R T

                        [To accompany H.R. 3269]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Economic and Educational Opportunities, to 
whom was referred the bill (H.R. 3269) to amend the Impact Aid 
program to provide for a hold-harmless with respect to amounts 
for payments relating to the Federal acquisition of real 
property and for other purposes, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                Purpose

    The purpose of this legislation is to make clarifying and 
technical amendments with respect to the Impact Aid program and 
to address problems related to Impact Aid payments which have 
national application.

                            Committee Action

    The Subcommittee on Early Childhood, Youth and Families 
marked up the bill on April 24, at which time H.R. 3269 was 
reported out on a voice vote. On May 1, 1996, the Committee on 
Economic and Educational Opportunities reported the bill 
favorably by voice vote.

                  Background and Need for Legislation

    During the 103rd Congress, the Impact Aid program was 
significantly changed to focus on those school districts in 
greatest need. Prior to these changes, the program had gained a 
reputation for not being well focused and for the numerous 
amendments passed each year to ``fix'' problems for individual 
school districts. The current program is well-focused and 
demonstrates the government's commitment to assisting those 
school districts most heavily impacted by a federal presence.
    Several issues, however, have been brought to the attention 
of the Committee which require legislative action. In a number 
of instances, the intent of Congress in rewriting the Impact 
Aid law was misinterpreted by the Department of Education, 
resulting in a loss of Impact Aid for school districts which 
were otherwise eligible for program dollars. In these 
instances, the Committee has merely clarified existing law.
    Other changes were necessitated by efforts on the part of 
the military to upgrade housing for military personnel who 
lived on base.
    Finally, the Committee was informed that changes made to 
Sec. 8002, Payments for Federal Acquisition of Real Property, 
during the 103rd Congress would result in dramatic shifts in 
funds among eligible school districts. As such, the Committee 
thought it important that a hold harmless be instituted so that 
schools which lost funds would have a longer period of time to 
adjust to such loss.
    In each of these instances, the Committee felt it necessary 
to take action to insure that school districts would not be 
adversely affected by actions beyond their control--either on 
the part of Congress or of other government agencies.

                                Summary

    This legislation amends the Impact Aid program to provide 
for a hold harmless with respect to amounts for payments 
relating to the Federal acquisition of real property, to 
address funding concerns arising from renovation of military 
housing, to clarify the eligibility of consolidated school 
districts for payments relating to the Federal acquisition of 
real property and to clarify that each of Hawaii's seven 
administrative school districts are to be considered as 
separate local educational agencies.

                            Committee Views

    The Committee believes the government has a responsibility 
to assist those school districts most greatly affected by a 
federal presence. This legislation makes good on this promise 
and, at the same time, does not make any change which could be 
considered ``special fixes'' for any particular school 
district. The changes included in this bill either clarify 
current law or have broad application.

                         Clarifying Current Law

    During consideration of changes to the Elementary and 
Secondary Education Act during the 103rd Congress, one of the 
changes made to Sec. 8002 eliminated the grandfather clause for 
consolidated districts. In these school districts, one of the 
consolidated districts may have met the criteria for Section 
8002 (10 % of the property or more is owned by the federal 
government) but when it was consolidated with another district, 
its eligibility disappeared. Prior law permitted these school 
districts to continue to receive impact aid payments. During 
the House/Senate conference on the Improving America's Schools 
Act, it was assumed that the Department of Education would 
continue eligibility for these consolidated districts. However, 
the Department has determined they are no longer eligible. This 
determination affects approximately 75 districts--many in South 
Dakota, Kansas, California and Indiana. H.R. 3269 clarifies 
that these districts remain eligible for Impact Aid payments.
    Another problem stemming from the rewrite of the Impact Aid 
law is the calculation of Impact Aid payments for the State of 
Hawaii.
    Hawaii is the only State in the Nation which has only one 
Local Educational Agency (LEA). However, for the purpose of 
administering federal grants, the Department of Education has 
routinely recognized the seven administrative districts within 
Hawaii's LEA as individual school districts. This has been the 
case for Impact Aid for many years.
    When Congress modified the Impact Aid law during the 103rd 
Congress, it did not intend to change the treatment of Hawaii 
for purposes of determining Impact Aid payments and fully 
expected the Department to continue to consider Hawaii as 
having seven school districts. However, the Department has 
interpreted the law to treat Hawaii as one LEA. Changing the 
treatment of Hawaii in the Impact Aid program from seven 
districts to one district will result in the State losing over 
half of its Impact Aid funds. With over 30,000 federally-
connected children in Hawaii, certain areas of the State are 
among the most impacted in our Nation. H.R. 3269 clarifies that 
Hawaii's seven administrative districts are to be considered as 
seven school districts for purposes of Impact Aid.

    Ensuring Children of Military Personnel Receive a Good Education

    The Department of Defense (DOD) has started a major 
renovation of military housing across the country. The 
Committee applauds this effort. However, in 90% of the cases, 
families must move off base during renovation. The Department 
of Education, as a result, no longer considers children in such 
families as so-called ``a'' children (those children whose 
families live and work on a military base). In some areas, this 
has caused a major reduction in Impact Aid for a school 
district with no corresponding reduction in the number of 
children they must educate. According to DOD, the average 
period of time children are off base is 90-120 days. However, 
if they are off when Impact Aid counts are taken, school 
districts lose funds. DOD indicates this renovation is national 
in scope and will go on for years.
    H.R. 3269 remedies this problem by enabling a 
representative of the Secretary of Defense (i.e. the base 
commander), to determine how many children would be living in 
the renovated properties in question. The representative will 
include these children in the Impact Aid counts done by the 
bases. These children would not be included in the count of so-
called ``b'' children as long as they continue to be counted as 
``a'' children. Therefore, schools will not see an increase or 
a decrease in their Impact Aid dollars nor will they experience 
difficulties in planning for each school year because of the 
uncertainty of Impact Aid funding due to the renovation of 
military housing.
    The Committee believes this is the only fair solution to 
this problem. Our military personnel risk their lives defending 
their country and their children should be ensured of the same 
high quality education as that provided to their non-military 
peers.

           Helping Schools to Adjust to a Loss of Impact Aid

    When Congress modified the Impact Aid Program during the 
103rd Congress, they included a hold harmless for Section 8003 
for payments for federally connected children to help schools 
adjust to a change in the level of funding they would receive 
under the Impact Aid program in future years. A hold harmless 
was not included for the Section 8002 program for payments 
related to land removed from the local tax base.
    However, it has come to the Committee's attention that a 
change in the mechanism for determining payments under Section 
8002 will cause major shifts in funding under this section of 
the law. This change will base payments on an assessment of the 
``highest and best use'' of property currently adjoining 
federal property rather than the highest and best use at the 
time such property was acquired as was the case under previous 
law. The hold harmless provisions contained in H.R. 3269 will 
provide Section 8002 districts 85 percent of the amount they 
received in 1994 in 1995 and 85 percent of what they received 
in FY 1995 and 85 percent of what they received in 1995 in FY 
1996. As a result, school districts will have a longer period 
of time during which they can adjust their budgets or seek 
additional sources of revenue to replace Impact Aid dollars 
lost due to the change in how payments are made under this 
section of the law.

                           Section-by-Section

    Sec. 1.--Short Title. Sets for the short title of the bill 
as the ``Impact Aid Technical Amendments of 1996.''
    Sec. 2.--Hold-Harmless Amounts for Payments Relating to 
Federal Acquisition of Real Property. Provides for the 
continued eligibility of consolidated school districts for 
payments relating to federal acquisition of real property. 
Institutes a hold-harmless for 1995 and 1996 for local 
educational agencies for payments related to federal 
acquisition of real property.
    Sec. 3.--Payments for Eligible Federally Connected Children 
Residing on Military Installation Housing Undergoing 
Renovation. Requires the Secretary to consider children 
residing on military facilities who have moved off base due to 
the renovation of housing to continue to be counted as on-base 
children for purposes of computing payments to local 
educational agencies if a designated representative of the 
Secretary of Defense certifies that such children would have 
resided in such housing except for renovation activities.
    Sec. 4.--Computation of Payments for Eligible Federally 
Connected Children in States with Only One Local Educational 
Agency. Requires the Secretary, in States in which there is 
only one local educational agency, to consider each 
administrative school district in the State to be a separate 
local educational agencies for purposes of computing Impact Aid 
payments.

                  Oversight Findings of the Committee

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives and clause 2(b)(1) of 
rule X of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in the body of this report.

                     Inflationary Impact Statement

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the Committee estimates that 
the enactment into law of H.R. 3269 will have no significant 
inflationary impact on prices and costs in the operation of the 
national economy. It is the judgment of the Committee that the 
inflationary impact of this legislation as a component of the 
federal budget is negligible.

                    Government Reform and Oversight

    With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations form the Committee on Government Reform and 
Oversight on the subject of H.R. 3269.

                           Committee Estimate

    Clause 7 of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 3269. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                Application of Law to Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill makes clarifying and technical amendments 
with respect to the Impact Aid program and to address problems 
related to Impact Aid payments which have national application. 
The bill does not prohibit legislative branch employees from 
otherwise being eligible for services under these programs.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates; the bill provides 
funds for programs authorized under this bill at the local 
level and as such does not contain any unfunded mandates. The 
Committee also received a letter regarding unfunded mandates 
from the Director of the Congressional Budget Office. See 
infra.

                             Correspondence

    The Committee received the following letters regarding this 
legislation:

                                                     NAFIS,
                                    Washington, DC, April 30, 1996.
Hon. William Goodling,
Chairman, Economic and Education Opportunities Committee,
Washington, DC.
    Dear Chairman Goodling: On behalf of the 1,600 school 
districts represented by the National Association of Federally 
Impacted Schools, I write to thank you for your help in 
bringing H.R. 3269 to the Committee and wish to communicate our 
total support for this very important piece of legislation.
    As you know, H.R. 3269 is for the most part corrective 
legislation. Last Congress during consideration of the 
``Improving America's Schools Act of 1994'', there were 
provisions of the previous statute that were to carry over to 
the new law, but which were inadvertently overlooked. These are 
provisions that are extremely important to local educational 
agencies receiving funds under section 8002, as it applies to 
how these funds are to be allocated. This includes both FY'95 
funding as well as FY'96. The bill also insures that the 
Department of Education in making payments to the State of 
Hawaii, will do so in the same manner as they did under the 
previous statute. None of the above represents any kind of 
policy change, rather it simply conforms the present law with 
the previous statute as it applies to section 8002 and the 
State of Hawaii.
    H.R. 3269 does include one ``new'' provision which I 
applaud your committee for having the foresight to recognize. 
It is designed to address the issue of on-base housing 
renovation that is now facing many of our heavily impacted 
military school districts. Many of these school districts face 
uncertainty when it comes to impact aid funding because of the 
differences in how the law treats children residing with 
parents living off-base. Section 3 of H.R. 3269 addresses this 
problem so that these schools will be allowed to develop school 
budgets knowing what their on-base student counts will be. The 
approach included in H.R. 3269 is fair and reasonable.
    Again Mr. Chairman, NAFIS appreciates your leadership and 
would only hope that H.R. 3269 can be dispensed with quickly in 
order that FY'95/FY'96 funding for section 8002 districts and 
the State of Hawaii, can be allocated by the Department of 
Education without any additional delay.
            Sincerely,
                                       John B. Forkenbrock,
                                                Executive Director.
                              ----------                              

            National Military Impacted Schools Association,
                                      Bellevue, NE, April 30, 1996.
Hon. William Goodling,
Chairman, Economic and Education Opportunities Committee,
Washington, DC.
    Dear Chairman Goodling: On behalf of the 500,000 military 
dependents served by the Impact Aid Program, I want to thank 
you for bringing H.R. 3269 to your committee. This bill is long 
overdue and critically needed by schools serving military 
installations throughout the United States.
    Many school districts serving the children of military 
personnel will benefit from this legislation and in the end it 
will be good for the children they educate. H.R. 3269 will help 
school districts cope with the effects of base housing 
renovations when trying to budget for educational programs for 
the children they are responsible for serving.
    The Military Impacted Schools Association (MISA) is working 
hard to represent the needs of military school districts and 
work in conjunction with the National Association of Federally 
Impacted Schools (NAFIS) to support the Impact Aid Program. We 
are very fortunate to have leaders in Congress that help take 
the lead on issues such as addressed in H.R. 3269.
            Sincerely,
                                     John F. Deegan, Ed.D.,
                                                Executive Director.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the House of Representatives and section 308(a) of 
the Congressional Budget Act of 1974 and with respect to 
requirements of clause 2(l)(3)(C) of rule XI of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 3269 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 6, 1996.
Hon. William F. Goodling,
Chairman, Committee on Economic and Educational Opportunities,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3269, the Impact 
Aid Technical Amendments Act of 1996, as ordered reported by 
the House Committee on Economic and Educational Opportunities 
on May 1, 1996. Because enactment of H.R. 3269 would not affect 
direct spending or receipts, pay-as-you-go procedures would not 
apply to the bill.
    The bill would impose no intergovernmental or private 
sector mandates as defined in Public Law 104-4.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact for federal cost 
implications is Justin Latus. For state and local costs, the 
staff contact is Mark Nicole, and for private sector impacts, 
the staff contact is Jay Noell.
            Sincerely,
                                         June E. O'Neill, Director.

               Congressional Budget Office Cost Estimate

    1. Bill number: H.R. 3269.
    2. Bill title: Impact Aid Technical Amendments Act of 1996.
    3. Bill status: As ordered reported by the House Committee 
on Economic and Educational Opportunities on May 1, 1996.
    4. Bill purpose: H.R. 3269 would make changes to the Impact 
Aid program. Three of the changes would revisit and clarify the 
revisions made to the Impact Aid program when it was 
reauthorized in the 103rd Congress. H.R. 3269 would allow 
consolidated districts that previously received Impact Aid 
funding to continue to receive funding, and would once again 
make the state of Hawaii's seven administrative districts each 
eligible for funding. The third change would institute a hold 
harmless clause that would phase in the new funding formula 
contained in the reauthorization of the program in the 103rd 
Congress.
    H.R. 3269 would also make school districts eligible to 
receive higher payments for families who have moved off of 
military bases due to renovations than the districts are 
eligible for under current law.
    5. Estimated cost to the Federal Government: The following 
table (Table 1) shows discretionary spending under H.R. 3269 
with and without adjustments for inflation in cases where the 
bill would authorize such sums as necessary. With adjustments 
for inflation, authorizations of appropriations would total 
$3.054 billion under H.R. 3269 over the 1997-2000 period, as 
compared with $2.98 billion under current law. Without 
adjustments for inflation, authorizations of appropriations 
would total $2.843 billion over the 1997-2000 period, as 
compared with $2.772 billion under current law. Table 2 shows 
the proposed changes under H.R. 3269 by section.

                                TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 3269                               
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                     1996     1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                         With Adjustments for Inflation                                         
                                                                                                                
Spending Under Current Law:                                                                                     
    Estimated authorization......................      693      714      735      755      776        0        0
    Estimated outlays............................      726      711      730      751      772      139       16
Proposed Changes:                                                                                               
    Estimated authorization......................        0       18       18       19       19        0        0
    Estimated outlays............................        0       15       18       19       19        3        0
Spending Under H.R. 3269:                                                                                       
    Estimated authorization......................      693      732      753      774      796        0        0
    Estimated outlays............................      726      726      748      770      791      143       16
                                                                                                                
                                        Without Adjustments for Inflation                                       
                                                                                                                
Spending Under Current Law:                                                                                     
    Estimated authorization......................      693      693      693      693      693        0        0
    Estimated outlays............................      726      694      693      693      693      125       14
Proposed Changes:                                                                                               
    Estimated authorization......................        0       18       18       18       18        0        0
    Estimated outlays............................        0       15       17       18       18        3        0
Spending Under H.R. 3269:                                                                                       
    Estimated authorization......................      693      711      711      711      711        0        0
    Estimated outlays............................      726      709      710      711      711      128       14
----------------------------------------------------------------------------------------------------------------
Note.--Components may not sum to totals because of rounding. Authorizations of education programs assume a one- 
  year extension as provided under the General Education Provisions Act (GEPA).                                 

    The costs of this bill fall within budget function 500.

                          TABLE 2.--ESTIMATED BUDGETARY IMPACT OF H.R. 3269 BY SECTION                          
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                     1996     1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                         With Adjustments for Inflation                                         
                                                                                                                
Section 1:                                                                                                      
    Estimated authorization......................        0        3        3        4        4        0        0
    Estimated outlays............................        0        3        3        4        4        1        0
Section 2:                                                                                                      
    Estimated authorization......................        0        5        5        5        5        0        0
    Estimated outlays............................        0        4        5        5        5        1        0
Section 3:                                                                                                      
    Estimated authorization......................        0       10       10       11       11        0        0
    Estimated outlays............................        0        8       10       11       11        2        0
Total:                                                                                                          
    Estimated authorization......................        0       18       18       19       19        0        0
    Estimated outlays............................        0       15       18       19       19        3        0
                                                                                                                
                                        Without Adjustments for Inflation                                       
                                                                                                                
Section 1:                                                                                                      
    Estimated authorization......................        0        3        3        3        3        0        0
    Estimated outlays............................        0        3        3        3        3        1        0
Section 2:                                                                                                      
    Estimated authorization......................        0        5        5        5        5        0        0
    Estimated outlays............................        0        4        4        5        5        1        0
Section 3:                                                                                                      
    Estimated authorization......................        0       10       10       10       10        0        0
    Estimated outlays............................        0        8       10       10       10        2        0
Total:                                                                                                          
    Estimated authorization......................        0       18       18       18       18        0        0
    Estimated outlays............................        0       15       17       18       18        3        0
----------------------------------------------------------------------------------------------------------------
Note.--Components may not sum to totals because of rounding. Authorizations of education programs assume a one- 
  year extension as provided under the General Education Provisions Act (GEPA).                                 

    6. Basis of estimate: The spending that would occur under 
H.R. 3269 would be subject to the availability of appropriated 
funds. For the purposes of this estimate, CBO assumes that the 
bill will be enacted on September 30, 1996. Estimated outlay 
patterns are based on historical spending on Impact Aid.
    For current law authorizations of appropriations, CBO took 
the amount appropriated in 1996 for the Impact Aid program and 
adjusted it for inflation where such sums as may be necessary 
are authorized. The current law for Impact Aid authorizes the 
various grants programs through fiscal year 1999, and the 
General Education Provisions Act (GEPA) automatically extends 
these authorizations through fiscal year 2000.
    For proposed changes, CBO estimated the increases in 
authorizations of appropriations under U.R. 3269 as compared to 
current law. These increases reflect the fact that several 
sections of H.R. 3269 would expand the number of school 
districts that are eligible for federal grants through Impact 
Aid or would increase the level of award for certain types of 
families. This estimate does not indicate how much would 
actually be spent on Impact Aid under H.R. 3269; this decision 
ultimately rests with the Appropriations Committees. The Impact 
Aid law contains provisions which would reduce how much each 
school district would receive so that total spending would not 
exceed the appropriation.
    Section 2 of H.R. 3269 would expand eligibility for 
payments to certain consolidated school districts under Section 
8002 of the Impact Aid law when federal property is removed 
from the local tax rolls. Under the bill, a consolidated 
district would be eligible for these payments if one of the 
former districts making up the consolidated district had 
previously been eligible. Since the reauthorization of the 
Impact Aid law in 1994, these consolidated districts have not 
been eligible for aid. Under H.R. 3269, these districts would 
be again eligible. This increase in authorizations, with 
adjustments for inflation, would amount to $3 million in fiscal 
year 1997 and $14 million over the 1996-2000 period. The 
increase without adjustments for inflation would total $13 
million for the period.
    Section 2 would also institute a hold harmless clause that 
would phase in funding when federal property is removed from 
the local tax rolls based on the new formula enacted in 1994. 
CBO is unable to determine how much this provision would 
increase the authorization of appropriations for these programs 
but estimates that these amounts would be small.
    Section 3 of H.R. 3269 relates to families who move off of 
military bases during renovations to their housing. Under 
current law, the Department of Education counts these families 
as working but not living on federal property, making their 
school districts eligible for lower payments. Under H.R. 3269, 
a representative of the Department of Defense could count these 
families as living on the base, and their school districts 
would be eligible for higher payments. CBO estimates that this 
would increase authorizations of appropriations for section 
8003(a) by $5 million in fiscal year 1997, or a total of $19 
million for fiscal years 1997 through 2000 when adjustments for 
inflation are made. If inflation is not considered, this would 
increase authorizations by a total of 418 million for the 1997-
2000 period.
    Section 4 would change the authorizations of appropriations 
for Impact Aid payments to the State of Hawaii. Hawaii is the 
only state with only one Local Educational Agency (LEA). Before 
the reauthorization of the Impact Aid bill in the 103rd 
Congress, Hawaii's seven administrative districts were 
recognized as individual school districts and were each 
eligible for Impact Aid. Under the reauthorization of Impact 
Aid, however, these seven administrative districts are no 
longer recognized as individual districts, and Hawaii can only 
receive funding to its one LEA. The hold harmless provisions of 
the current Impact Aid law protect Hawaii's funding through 
fiscal year 1996, but beginning in fiscal year 1997, Hawaii's 
funding through fiscal year 1996, but beginning in fiscal ear 
1997, Hawaii is authorized to receive only about half of what 
it received before. CBO estimates that Section 4 of H.R. 3269, 
which would again allow each of Hawaii's seven administrative 
districts to be viewed as individual school districts (and 
therefore receive funding), would increase authorizations of 
appropriations by $10 million in fiscal year 1997, or $42 
million over fiscal years 1997 through 2000 with adjustments 
for inflation. The total increase in authorizations of 
appropriations for the same period without adjustments for 
inflation would be $40 million.
    7. Pay-as you-go considerations: None.
    8. Estimated cost to State and local governments: H.R. 3269 
contains no intergovernmental mandates as defined in Public Law 
104-4 and would impose no direct costs on state, local or 
tribal governments. Assuming the appropriation of the necessary 
amounts, CBO estimates that enactment of H.R. 3269 would 
increase the amounts the federal government would provide to 
school districts for impact aid. Compared to current law, we 
estimate that school districts would receive an additional $18 
million in fiscal year 1997 and $74 million between fiscal 
years 1997 and 2000.
    9. Estimated impact on the private sector: H.R. 3269 
contains no private sector mandates as defined in Public Law 
104-4.
    10. Estimate comparison: None.
    11. Previous CBO estimate: None.
    12. Estimate prepared by: Federal Cost Estimate: Justin 
Latus, State and Local Cost Estimate: Mark Nicole, Private 
Sector Mandate Estimate: Jay Noell.
    13. Estimate approved by: Paul N. Van de Water, Assistant 
Director, for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

             ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965

          * * * * * * *

                         TITLE VIII--IMPACT AID

          * * * * * * *

SEC. 8002. PAYMENTS RELATING TO FEDERAL ACQUISITION OF REAL PROPERTY.

  (a)  * * *
          * * * * * * *
  (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 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 on September 30, 1994.
  (h) Hold-Harmless Amounts.--
          (1) In general.--Except as provided in paragraph 
        (2)(A), the total amount that the Secretary shall pay a 
        local educational agency that is otherwise eligible 
        under subsection (b)--
                  (A) for fiscal year 1995 shall not be less 
                than 85 percent of the amount such agency 
                received for fiscal year 1994 under section 2 
                of the Act of September 30, 1950 (Public Law 
                874, 81st Congress) as such section was in 
                effect on September 30, 1994; or
                  (B) for fiscal year 1996 shall not be less 
                than 85 percent of the amount such agency 
                received for fiscal year 1995 under subsection 
                (b).
          (2) Ratable reductions.--(A)(i) If necessary in order 
        to make payments to local educational agencies in 
        accordance with paragraph (1) for any fiscal year, the 
        Secretary first shall ratably reduce payments under 
        subsection (b) for such year to local educational 
        agencies that do not receive a payment under this 
        subsection for such year.
          (ii) If additional funds become available for making 
        payments under subsection (b) for such year, then 
        payments that were reduced under clause (i) shall be 
        increased on the same basis as such payments were 
        reduced.
          (B)(i) If the sums made available under this title 
        for any fiscal year are insufficient to pay the full 
        amounts that all local educational agencies in all 
        States are eligible to receive under paragraph (1) 
        after the application of subparagraph (A) for such 
        year, then the Secretary shall ratably reduce payments 
        under paragraph (1) to all such agencies for such year.
          (ii) If additional funds become available for making 
        payments under paragraph (1) for such fiscal year, then 
        payments that were reduced under clause (i) shall be 
        increased on the same basis as such payments were 
        reduced.

SEC. 8003. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN.

  (a) Computation of Payment.--
          (1)  * * *
          * * * * * * *
          (4) Military installation housing undergoing 
        renovation.--For purposes of computing the amount of a 
        payment for a local educational agency for children 
        described in paragraph (1)(D)(i), the Secretary shall 
        consider such children to be children described in 
        paragraph (1)(B) if the Secretary determines, on the 
        basis of a certification provided to the Secretary by a 
        designated representative of the Secretary of Defense, 
        that such children would have resided in housing on 
        Federal property in accordance with paragraph (1)(B) 
        except that such housing was undergoing renovation on 
        the date for which the Secretary determines the number 
        of children under paragraph (1).
  (b) Basic Support Payments and Payments With Respect to 
Fiscal Years in Which Insufficient Funds Are Appropriated.--
          (1)  * * *
          * * * * * * *
          (3) States with only one local educational agency.--
                  (A) In general.--In any of the 50 States in 
                which there is only one local educational 
                agency, the Secretary shall, for purposes of 
                paragraphs (1)(C) and (2) of this subsection 
                and subsection (e), consider each 
                administrative school district in the State to 
                be a separate local educational agency.
                  (B) Computation of maximum amount of basic 
                support payment and threshold payment.--In 
                computing the maximum payment amount under 
                paragraph (1)(C) and the learning opportunity 
                threshold payment under paragraph (2)(B) for an 
                administrative school district described in 
                subparagraph (A)--
                          (i) the Secretary shall first 
                        determine the maximum payment amount 
                        and the total current expenditures for 
                        the State as a whole; and
                          (ii) the Secretary shall then--
                                  (I) proportionately allocate 
                                such maximum payment amount 
                                among the administrative school 
                                districts on the basis of the 
                                respective weighted student 
                                units of such districts; and
                                  (II) proportionately allocate 
                                such total current expenditures 
                                among the administrative school 
                                districts on the basis of the 
                                respective number of students 
                                in average daily attendance at 
                                such districts.
          * * * * * * *

                                
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