Federal Impact Aid is designed to assist

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

local

school district A school district is a special-purpose district that operates local public Primary school, primary or Secondary school, secondary schools or both in various countries. It is not to be confused with an attendance zone, which is within a school dis ...

s that have lost

property tax A property tax (whose rate is expressed as a percentage or per mille, also called ''millage'') is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or Wealth t ...

revenue due to the presence of

tax-exempt Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions. Tax-exempt status may provide complete relief from taxes, redu ...

Federal property, or that have experienced increased expenditures due to the enrollment of federally connected children, including children living on Indian lands. The Lanham Act (1940) provided for a rudimentary form of Impact Aid as payments in lieu of taxes for districts with

military base A military base is a facility directly owned and operated by or for the military or one of its branches that shelters military equipment and personnel, and facilitates training and operations. A military base always provides accommodations for ...

s within their boundaries. In 1941,

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

amended the Lanham Act, expanding Impact Aid to include funding for the construction of public schools. In 1950, Congress enacted two laws, P.L. 815 and P.L. 874, that began the grant program in its present form. The Impact Aid statute is now Title VII of the

Elementary and Secondary Education Act of 1965 The Elementary and Secondary Education Act (ESEA) was passed by the 89th United States Congress and signed into law by President Lyndon B. Johnson on April 11, 1965. Part of Johnson's "War on Poverty", the act has been one of the most far-rea ...

(ESEA)), and the program's regulations can be found in Title 34 of the

Code of Federal Regulations In the law of the United States, the ''Code of Federal Regulations'' (''CFR'') is the codification of the general and permanent regulatory law, regulations promulgated by the executive departments and agencies of the federal government of the ...

, section 222. Total funding for this program has exceeded $1 billion since 2002.

Payments for Federal Property (Section 7002 of ESEA)

Payments for Federal Property are funded through a

formula grant A formula grant is a United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal c ...

designed to offset the financial burden of school districts with large amounts of non-taxable,

Federal land Federal lands are lands in the United States owned and managed by the federal government. Pursuant to the Property Clause of the United States Constitution ( Article 4, section 3, clause 2), Congress has the power to retain, buy, sell, and regu ...

. In order to receive a payment, the school district must be able to prove that the Federal government took land off the tax rolls that was worth at least 10% of the total value of the district at that time of the government's acquisition. The amount of funding a district receives is based on a present valuation of the Federal property, which is derived from adjacent parcels in the school district. Congress has funded this grant annually since the inception of the Impact Aid law.

Payments for Federally Connected Children (Section 7003 of ESEA)

Payments for Federally Connected Children, otherwise known as "basic support payments," are made through a formula grant program that provides assistance to local school districts with concentrations of children residing on Indian lands,

s, low-rent housing properties, or other Federal properties, and concentrations of children who have parents in the uniformed services or employed on eligible Federal properties who do not live on Federal property. School districts submit student counts annually for each of the eligible categories. Each category is given a different weight in the funding formula. For example, children who live on and whose parents work on Federal property are given a weight of one, while children who live in Federal low-rent housing (subject to the

Housing Act of 1937 The Housing Act of 1937 (), formally the "United States Housing Act of 1937" and sometimes called the Wagner–Steagall Act, provided for subsidies to be paid from the United States federal government to local public housing agencies (LHAs) to ...

) are given a weight of 0.10, and children whose parents are in the military but do not live on base are given a weight of 0.20. Students with disabilities in certain categories are weighted an additional amount, and payments for these students come from a separate appropriation. The funding formula also accounts for average daily attendance in the district, percentage of students in the district who are federally connected, how many state and local funds are paid per student in the district, and the amount Impact Aid contributes to the district's total expenditures.20 U.S.C. 7703 Congress has funded this grant annually since the inception of the Impact Aid law.

School Construction (Section 8007 of ESEA)

The Impact Aid law also provides for payments to school districts that need assistance with

capital expenditure Capital expenditure or capital expense (abbreviated capex, CAPEX, or CapEx) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered ...

s for construction activities because they educate large numbers of children who live on Federal land and because of the difficulty of raising local revenue through bonds for capital projects due to the inability to tax Federal property. These funds may be awarded as a

or a discretionary grant subject to competition. Grantees are eligible for the formula awards if more than half of their enrollment lives on Indian land or has a parent in the military. Priorities for the discretionary grants are generally based on a low ability for the applicant to raise revenue for capital improvements and emergency conditions at the school to be repaired or rebuilt. School construction grants were funded under the

American Recovery and Reinvestment Act of 2009 The American Recovery and Reinvestment Act of 2009 (ARRA) (), nicknamed the Recovery Act, was a Stimulus (economics), stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed ...

. In fiscal Year 2011, Congress funded only formula grants. Discretionary grants were last funded in 2012.

References

{{Reflist United States federal education legislation