Updates to the Impact Aid Regulations October 4, 2016 Impact Aid - - PDF document

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Updates to the Impact Aid Regulations

October 4, 2016

Impact Aid Regulations Update

• New regulations were published on September 20, 2016
• Statutory references changed from 8002 and 8003 to 7002 and 7003
• Does not include substantive changes due to reauthorization of law in

December 2015

• Regulations effective for FY 2018 applications, due 1/31/2017
• Most changes are clarifications of existing regulations and policies
• “Clarifying Regulation” does not constitute a policy change
• This presentation includes highlights from the Final Rule, including the
• preamble. The Final Rule is the definitive authority

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Old Regulation Membership means the following: (3) ***** (does not include) (iv) Attend the schools of the applicant LEA under a tuition arrangement with another LEA that is responsible for providing them a free public education. New Regulation

Membership means the following: (3)***** (does not include) (iv) Attend the schools of the applicant LEA under a tuition arrangement with another LEA that is responsible for providing them a free public education; or (v) Reside in a State other than the State in which the LEA is located, unless the student is covered by the provisions of‐‐ (A) Section 7010(c) of the Act; or (B) A formal State tuition or enrollment agreement.

§222.2 Definitions ‐ Membership

CLARIFYING REGULATION

§222.2 Definition of Membership

• Clarifies that children who reside in a different State than

the LEA that serves them are ineligible for the purposes

• f that LEA’s Impact Aid application.
• EXCEPTIONS TO THE RULE:
• The children covered by a formal tuition agreement
• The children covered under section 7010(c)of the

ESEA as amended by the ESSA

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Old Regulation

Parent employed on Federal property. (1) The term means the following: (i) An employee of the Federal Government who reports to work on, or whose place of work is located on, Federal property. (ii) ***** (iii) A proportion, to be determined by the Secretary, based

• n persons working on commingled Federal and non‐Federal

properties other than those persons covered under paragraph (1)(ii) of this definition. (2) The term does not include a person who reports to work at a work station not on Federal property but spends more than 50 percent of his working time on Federal property providing services to operations or activities authorized to be carried out on Federal property.

New Regulation

Parent employed on Federal property. (1) The term means: (i) An employee of the Federal government who reports to work

• n, or whose place of work is located on, Federal property,

including a Federal employee who reports to an alternative duty station on the survey date, but whose regular duty station is on Federal property. (ii) ***** (iii) A proportion, to be determined by the Secretary, based on persons working on commingled Federal and non‐Federal properties other than those persons covered under paragraph (1)(ii) of this definition. (2) Except as provided in paragraph (1)(ii) of this section, the term does not include a person who is not employed by the Federal government and reports to work at a location not on Federal property, even though the individual provides services to operations or activities authorized to be carried out on Federal property.

§222.2 Definitions – Parent Employed on Federal Property

CLARIFYING REGULATION

§222.2 Definition Parent Employed on Federal Property

• Clarifies that Federal employees with regular duty stations on

eligible Federal property, but who telework on the survey date, are eligible Parents Employed on Federal Property

• Examples added to clarify which parents may be eligible Parents

Employed on Federal Property (See separate handout)

• Clarifies the last paragraph to underscore that parents not

employed by the Federal government and whose regular duty station is not on Federal property are not eligible regardless if they provide services to a Federal property.

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Old Regulation

(a)(1) *** (2) Except as provided in paragraph (d) of this section, within 60 days after the applicable event occurs but not later than September 30 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003, the LEA must—.

New Regulation

(a)(1) *** (2) Except as provided in paragraph (d) of this section, within 60 days after the applicable event occurs but not later than June 30 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 7002 or section 7003, the LEA must—.

§222.3 How does a local educational agency apply for assistance under section 7002 or 7003 of the Act?

POLICY CHANGE

Old Regulation

(a) ***** (b) *** (2) The LEA submits a written request to the Secretary with a copy to its SEA no later than the end of the Federal fiscal year preceding the fiscal year for which the LEA seeks assistance.

New Regulation (a) *****

(b) *** (2) The LEA submits a written request to the Secretary with a copy to its SEA no later than June 30 of the Federal fiscal year preceding the fiscal year for which the LEA seeks assistance.

§222.5 When may a local educational agency amend its application?

POLICY CHANGE

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§222.3 & §222.5 Dates to make Changes to an Application

for assistance under section 7002 or 7003 of the Act?

• Amendment deadline changed from September

30 to June 30.

• A June 30th amendment deadline will ensure that

the Department receives complete application information that can be reviewed in an expedient manner.

Old Regulation (a) *****

(b) *** (1) The LEA received revenue during the preceding fiscal year that is generated directly from the eligible Federal property or activities in or on that property (c) *****

New Regulation

(a) ***** (b) *** (1) The LEA received revenue during the preceding fiscal year that is generated from activities in or on the eligible Federal property; and (c) *****

§222.22 How does the Secretary treat compensation from Federal activities for purposes of determining eligibility and payments?

CLARIFYING REGULATION

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Old Regulation

(d) For purposes of this section, the amount

• f revenue that an LEA receives during the

previous fiscal year from activities conducted on Federal property does not include payments received by the agency from the Secretary of Defense to support— (1) The operation of a domestic dependent elementary or secondary school (2) The provision of a free public education to dependents of members of the Armed Forces residing on or near a military installation

New Regulation

(d) For purposes of this section, the amount of revenue that

an LEA receives during the previous fiscal year from activities conducted on Federal property includes payments received by any Federal agency due to activities on Federal property, including forestry, mining, and grazing, but does not include revenue from: (1) Payments received by the LEA 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

• r near a military installation;

(2) Payments from the Department; or (3) Payments in Lieu of Taxes from the Department of Interior under 31 U.S.C. 6901 et seq.

§222.22 Continued

§222.22 How does the Secretary treat compensation from Federal activities for purposes of determining eligibility and payments?

• Clarifies how Payments in Lieu of Taxes (PILTs) are treated for Impact Aid

purposes.

• Only payments for activities conducted on Federal property will be included

as other Federal revenue in the ESEA section 7002 eligibility and payment calculations

• Adds examples of the types of Federal revenue to be reported
• Excludes:
• Dept. of ED payments
• DOD payments for the operation of schools or the provision free public

education for children of members of the Armed Forces

• Dept. of the Interior PILTS

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(a) Eligibility. An LEA formed by the consolidation of one or more LEAs is eligible for section 7002 funds, notwithstanding section 222.21(a)(1), if — (1) The consolidation occurred prior to fiscal year 1995 or after fiscal year 2005; and (2) At least one of the former LEAs included in the consolidation: (i) Was eligible for section 7002 funds in the fiscal year prior to the consolidation; and (ii) Currently contains Federal property that meets the requirements of 222.21(a) within the boundaries of the former LEA or LEAs.

§222.23 How are consolidated LEAs treated for the purposes of eligibility and payment under section 7002? (NEW)

REGULATING EXISTING STATUTORY PROVISION

(b) Documentation Required. In the first year of application following the consolidation, an LEA that meets the requirements of paragraph (a) of this section must submit evidence that it meets the requirements of paragraphs (a)(1) and (a)(2)(ii) of this section. (c) Basis for Foundation Payment. (1) The foundation payment for a consolidated district is based on the total section 7002 payment for the last fiscal year for which the former LEA received payment. When more than one former LEA qualifies under paragraph (a)(2) of this section, the payments for the last fiscal year for which the former LEAs received payment are added together to calculate the foundation basis. (2) Consolidated LEAs receive only a foundation payment and do not receive a payment from any remaining funds.

§222.23 Continued (NEW)

REGULATING EXISTING STATUTORY PROVISION

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§222.23 How are consolidated LEAs treated for the purposes of eligibility and payment under section 7002? (NEW)

• Regulates temporary authority that was made permanent
• Replaces previous §222.23 – determining the aggregate assessed

value of Federal property under the old payment formula

• Specifies how consolidated LEAs should apply, the documentation

required and how the payment will be calculated

• Consolidated LEAs will only receive a foundation payment

An LEA that has multiple tax rates for real property classifications derives a single tax rate for the purposes of determining its Section 7002 maximum payment by dividing the total revenues for current expenditures it received from local real property taxes by the total taxable value of real property located within the boundaries of the LEA. These data are from the fiscal year prior to the fiscal year in which the applicant seeks assistance.

§222.24 How does a local educational agency that has multiple tax rates for real property classifications derive a single real property tax rate?

REGULATING EXISTING POLICY REGARDING STATUTORY PROVISION

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§222.24 How does a local educational agency that has multiple tax rates for real property classifications derive a single real property tax rate?

• Regulates the procedure for developing a single tax rate

under temporary authority that was made permanent

• Total Revenues for Current Expenditures

÷ Total Taxable Value of Real Property located within the boundaries of the LEA = Single Tax Rate

Old Regulation

* * * * * (2) * * * (ii) Federal funds, other than funds under the Act, do not provide a substantial portion of the educational program. * * * * *

New Regulation

* * * * * (2) * * * (ii) Federal funds, other than Impact Aid funds and charter school startup funds, do not provide a substantial portion of the educational program, in relation to other LEAs in the State, as determined by the Secretary. * * * * *

§222.30 What is “free public education”?

POLICY CHANGE

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§222.30 What is “free public education”?

• New Policy
• Amended to exclude Federal charter school startup funds

from the calculation to determine if Federal funds constitute a substantial portion of an LEA’s budget

• Charter school start up funds are temporary
• Temporarily available in the first few years of a charter

school’s operations

• Wide range of uses other than current expenditures

Old Regulation

(a)***** (b)The LEA must supply information in its application regarding its federally connected membership on the basis

• f any count described in

§§222.33 through 222.35.

New Regulation

(a)***** (b)The LEA must supply information in its timely and complete application regarding its federally connected membership on the basis of any count described in §§222.33 through 222.35.

§222.32 What information does the Secretary use to determine a local educational agency's basic support payment?

CLARIFYING REGULATION

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§222.32 What information does the Secretary use to determine a local educational agency's basic support payment?

• Clarifies that the application should be both timely and complete.
• A complete application should include:
• Signed Cover page and full assurance package
• A child count on any or all of Tables 1‐5 of the application
• A completed Table 6
• A complete Table 7 if the LEA received a payment for CWD children in the preceding year
• A complete Table 10 if the LEA received construction funds in the preceding year
• A contact form for LEAs requesting consideration for military or Indian lands housing

undergoing renovation or rebuilding

• A tax rate for LEAs applying for B2
• Current IPPs if the LEA claims any children residing on Indian lands

(c) The data on the application resulting from the count in paragraph (b) of this section must be accurate and verifiable by the application deadline.

§222.33 When must an applicant make its membership count? NEW

CLARIFYING REGULATION

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§222.33 When must an applicant make its membership count?

ONLY data than can be verified by the application deadline should be reported on the application

• An LEA estimates it has 2,000 federally connected children in its membership
• The LEA has only verified 100 children by the application deadline
• The LEA should only report the 100 verified children on its application.
• The LEA subsequently verified an additional 1,900 children
• The LEA may update its count through the amendment process until June 30th (no count changes

accepted after this date)

NO ESTIMATING CHILD COUNTS

CLARIFYING REGULATION

§222.35 How does a local educational agency count the membership of its federally connected children?

See handout for text changes

• Although Final Regs do not require it, we strongly encourage the use of a source

check for children that reside on Indian lands or in low rent housing

• Parent‐pupil survey forms for children that reside on Indian lands or in low rent

housing may require an additional certification from the BIA or HUD to establish the eligibility of the Federal property

• Comments to the Notice of Proposed Rulemaking asked the Department to be more

flexible about location information for Federal properties.

• If a parent cannot release their work location, their children cannot be counted for

Impact Aid.

• Location information is essential to determine eligibility.
• Many Federal employees do NOT work on eligible Federal properties

CLARIFYING REGULATION

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§222.35 Parent‐Pupil Survey Forms Highlight of Changes (continued):

• We will continue to work with other Federal agencies to assist

LEAs with obtaining location information.

• The preamble states that acceptable alternative location

information may include the name of a widely recognized military installation or Federal site for which the name and location are commonly known but typically not represented by a street address; examples:

• The Pentagon
• Jewel Cave National Monument.

POLICY CHANGE

Old Regulation

(b) Source check. (1) An applicant may count the membership of its federally connected children by using a source check to substantiate a pupil's place of residence or parent's place of employment on the survey date. (2) A source check is a form provided— (i) To a parent's employer, on which the employer certifies as to the place of employment

• f a parent of a pupil claimed;

(ii) To a housing official, on which the official certifies as to the residence of each pupil claimed; or (iii) To a tribal official, on which the official certifies as to the residence of each pupil claimed residing on Indian lands over which that tribal official has jurisdiction.

New Regulation

(b) Source check. A source check is a type of survey tool that groups children being claimed on the Impact Aid application by Federal property. This form is used in lieu

• f the parent‐pupil survey form to substantiate a pupil's place of residence or

parent's place of employment on the survey date. (1) The source check must include sufficient information to determine the eligibility of the Federal property and the individual children claimed on the form. (2) A source check may also include: (i) Certification by a parent's employer regarding the parent’s place of employment; (ii) Certification by a military or other Federal housing official as to the residence of each pupil claimed; (iii) Certification by a military personnel official regarding the military active duty status of the parent of each pupil claimed as active duty uniformed services; or (iv) Certification by the Bureau of Indian Affairs (BIA) or authorized tribal official regarding the eligibility of Indian lands.

§222.35 How does a local educational agency count the membership of its federally connected children? Source Checks

CLARIFYING REGULATION

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§222.35 How does a local educational agency count the membership of its federally connected children?

SOURCE CHECKS

• The new regulatory language more explicitly

states who should certify the various types of Federal properties. The new regulation is also reorganized for clarity.

(c) Another method approved by the Secretary.

• NPRM comments called for increased data collection flexibility
• New paragraph (c) allows LEAs to propose alternative methods for collecting data
• Example: hybrid approach in which Parent‐Pupil survey forms verify certain data elements and a

Federal certification to verify other data.

• Electronic Data Collection Pilot‐ IAP is soliciting proposals from LEAs that may wish to use

their student information systems (SIS) to collect and report federally‐connected children to the Impact Aid Program.

• Any alternatives would be at the cost of the LEA and subject to approval by IAP

§222.35(c) How does a local educational agency count the membership of its federally connected children? Alternative Method **NEW

POLICY CHANGE

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• Reorganizes this section so options for actors are grouped together (LEAs,

States, Secretary)

• Allows any State to ask the Secretary for a State average attendance ratio
• Reduces the LEAs’ data collection burden and provides more options for

each LEA to obtain a higher attendance ratio (generally higher ratio = higher payment)

• Where there is reliable public data, the Secretary may also calculate the State

average attendance ratio

§222.37 How does the Secretary calculate the average daily attendance of federally connected children?

POLICY CHANGE * * * * * (d) * * * (1) * * * (iii) If an SEA proposes to use one or more special additional factors to determine generally comparable LEAs, the SEA must submit, with its annual submission of generally comparable data to the Department, its rationale for selecting the additional factor or factors and describe how they affect the cost of education in the LEA. * * * * *

§222.40 What procedures does a State educational agency use for certain local educational agencies to determine generally comparable local educational agencies using additional factors, for local contribution rate purposes? NEW

CLARIFYING REGULATION

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• Clarifies that the SEA, not the LEA, submits the GCD data at the request of the Department,
• Requires an SEA using special additional factors to submit a rationale for its use with the

annual submission of GCD data.

• Annual explanation required
• Changing circumstances in a State may make a special additional factor appropriate in one

year, but not in the next.

• Regulatory examples of special additional factors
• Does not mean that every special additional factor is appropriate for every LEA
• Regulations require that a factor increase costs for that LEA.
• Each LEA’s individual characteristics will dictate the suitability of cost factors for

selecting its GCD

§222.40 What procedures does a State educational agency use for certain local educational agencies to determine generally comparable local educational agencies using additional factors, for local contribution rate purposes?

Old Regulation

New paragraph (a) added. Previous paragraphs (a) and (b) are renumbered (b) and (c) respectively

New Regulation

(a) An applicant that wishes to be considered to receive a heavily impacted payment must submit the required information indicating tax rate eligibility under §§222.63 or 222.64 with the annual section 7003 Impact Aid application. Final LEA tax rate eligibility must be verified by the SEA under the process described in §222.73.

§222.62 How are local educational agencies determined eligible under section 7003(b)(2)?

POLICY CHANGE

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• Previous regulations did not specify how an applicant may apply for heavily

impacted funding under section 7003(b)(2) (aka B2) on the Impact Aid application.

• LEAs applying for B2 have to submit 3rd preceding tax rate data for general

fund purposes for the LEA and the average tax rate for general fund purposes for the State with the annual Impact Aid application due January 31st .

• The submitted tax rate data will be confirmed by IAP with the best available

State sources prior to final determinations

• Requires applicants to evaluate eligibility to make an informed application
• New regulations do not replace the SEA reporting requirements under 222.73.

§222.62 How are local educational agencies determined eligible under section 7003(b)(2)?

Old Regulation

To receive a payment under section 7003

• f the Act for children residing on Indian

lands, a local educational agency (LEA) must— (a) Meet the application and eligibility requirements in section 7003 and subparts A and C of these regulations; (b) Develop and implement policies and procedures in accordance with the provisions of section 7004(a) of the Act; and

New Regulation (a) To receive a payment under section 7003 of the Act for children residing on Indian lands, an LEA must— (1) Meet the application and eligibility requirements in section 7003 and subparts A and C of these regulations; (2) Except as provided in paragraph (b) of this section, develop and implement policies and procedures in accordance with §222.94; and

§222.91 What requirements must a local educational agency meet to receive a payment under section 7003 of the Act for children residing on Indian lands?

CLARIFYING REGULATION

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Old Regulation (c) Include in its application for payments under section 7003— (1) An assurance that the LEA established these policies and procedures in consultation with and based on information from tribal officials and parents of those children residing on Indian lands who are Indian children; and (2) A copy of the policies and procedures

• r documentation that the LEA has

received a waiver in accordance with the provisions of section 7004(c). New Regulation (3) Include in its application for payments under section 7003— (i) An assurance that the LEA established these policies and procedures in consultation with and based on information from tribal officials and parents of those children residing on Indian lands who are Indian children, except as provided in paragraph (b) of this section; (ii) An assurance that the LEA has provided a written response to the comments, concerns and recommendations received through the Indian policies and procedures consultation process, except as provided in paragraph (b) of this section; and (iii) Either a copy of the policies and procedures, or documentation that the LEA has received a waiver in accordance with the provisions of paragraph (b) of this section.

§222.91 Continued

POLICY CHANGE

§222.91 What requirements must a local educational agency meet to receive a payment under section 7003 of the Act for children residing on Indian lands?

New paragraph (b) An LEA is not required to comply with §222.94 with respect to students from a tribe that has provided the LEA with a waiver that meets the requirements of this paragraph. (1) A waiver must contain a voluntary written statement from an appropriate tribal official or tribal governing body that‐‐ (i) The LEA need not comply with §222.94 because the tribe is satisfied with the LEA’s provision

• f educational services to the tribe’s students; and

(ii) The tribe was provided a copy of the requirements in §222.91 and §222.94, and understands the requirements that are being waived. (2) The LEA must submit the waiver at the time of application. (3) The LEA must obtain a waiver from each tribe that has Indian children living on Indian lands claimed by the LEA on its application under section 7003 of the Act. If the LEA only obtains waivers from some, but not all, applicable tribes, the LEA must comply with the requirements of §222.94 with respect to those tribes that did not agree to waive these requirements.

POLICY CHANGE

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§222.91 What requirements must a local educational agency meet to receive a payment under section 7003 of the Act for children residing on Indian lands?

• New LEA assurance that it has provided a written response to feedback

resulting from the IPP consultation process

• New regulations require that an IPP waiver be submitted with the annual

application

• Waiver must include a written statement from the appropriate tribal
• fficial stating:
• The tribe has received a copy and understands the requirements of

§222.91 and §222.94

• The tribe is satisfied with the LEA’s educational services provided to the

tribe’s students.

§222.94 What are the responsibilities of the LEA with regard to Indian policies and procedures?

• Rewritten and re‐organized the information from §§222.94 and 222.95(e)‐(g)
• New Requirements‐ LEAs must:
• Respond in writing to the comments and recommendations received through

the IPP Process in advance of submitting the section 7003 application

• Responses should demonstrate how the feedback has been thoughtfully

considered in the development of the educational program, and should be reflected in the IPPs.

• Provide a copy of the IPPs to the tribe prior to submitting the Impact Aid

application

• Increased the time an LEA has to resolve IPP issues from 60 to 90 days

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Old Regulation

*****

(c) An LEA shall make the necessary changes within 60 days of receipt of written notification from the Director. (d) If the LEA fails to make the necessary adjustments or changes within the prescribed period of time, the Director may withhold all payments that the LEA is eligible to receive under section 7003. New Regulation ***** (c) An LEA shall make the necessary changes within 90 days of receipt of written notification from the Director. (d) If the LEA fails to make the necessary adjustments or changes within the prescribed period of time, the Director may withhold all or part of the payments that the LEA is eligible to receive under section 7003.

222.95 How are Indian policies and procedures reviewed to ensure compliance with the requirements in section 7004(a) of the Act?

POLICY CHANGE

222.95 How are Indian policies and procedures reviewed to ensure compliance with the requirements in section 7004(a) of the Act?

• Allows greater flexibility related to withholding of

payments for IPP non‐compliance

• Paragraphs (e)‐(g) moved to 222.94

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Old Regulation

(a) * * * (5) Expenditures of funds received by the agency under sections 8002 and 7003(b) (including hold harmless payments calculated under section 7003(e)) that are not taken into consideration under the State aid program and exceed the proportion of those funds that the State would be allowed to take into consideration under §222.163.

New Regulation

(a) * * * (5) Except as provided in paragraph (a)(6), a State may not take into consideration payments under the Act in making estimated or final State aid payments before its State aid program has been certified by the Secretary.

Section 222.161 How is State aid treated under Section 7009 of the Act?

CLARIFYING REGULATION

Section 222.161 How is State aid treated under Section 7009 of the Act? NEW

(6)(i) If the Secretary has not made a determination under section 7009 of the Act for a fiscal year, the State may request permission from the Secretary to make estimated or preliminary State aid payments for that fiscal year, that consider a portion of Impact Aid payments as local resources in accordance with this section. (ii) The State must include with its request an assurance that if the Secretary determines that the State does not meet the requirements of section 222.162 for that State fiscal year, the State must pay to each affected LEA, within 60 days of the Secretary’s determination, the amount by which the State reduced State aid to the LEA. (iii) In determining whether to grant permission, the Secretary may consider factors including whether— (A) The Secretary certified the State under §222.162 in the prior State fiscal year; and (B) Substantially the same State aid program is in effect since the date of the last certification.

CLARIFYING REGULATION

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Section 222.161 How is State aid treated under Section 7009 of the Act? NEW

(b) * * * (3) For a State that has not previously been certified by the Secretary under §222.162, or if the last certification was more than two years prior, the State submits projected data showing whether it meets the disparity standard in §222.162. The projected data must show the resulting amounts of State aid as if the State were certified to consider Impact Aid in making State aid payments

Old Regulation

Current expenditures means the total charges incurred for the benefit of the school year in an elementary (including pre‐ kindergarten) or secondary school program. “Current expenditures” does not include— (1) Expenditures for capital outlay; (2) Expenditures for debt service for capital outlay; (3) Expenditures from State sources for special cost differentials

• f the type specified in §222.162(c)(2);

(4) Expenditures of revenues from local or intermediate sources that are designated for special cost differentials of the type specified in §222.162(c)(2); or (5) Expenditures of funds received by the agency under sections 8002 and 7003(b) (including hold harmless payments calculated under section 7003(e)) that are not taken into consideration under the State aid program and exceed the proportion of those funds that the State would be allowed to take into consideration under §222.163.

New Regulation Current expenditures is defined in section 7013(4) of the Act. Additionally, for the purposes of this section it does not include expenditures of funds received by the agency under sections 7002 and 7003(b) (including hold harmless payments calculated under section 7003(e)) that are not taken into consideration under the State aid program and exceed the proportion of those funds that the State would be allowed to take into consideration under §222.162.

Section 222.161 How is State aid treated under Section 7009 of the Act?

POLICY CHANGE

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Section 222.161 How is State aid treated under Section 7009 of the Act?

• States may request permission from the Secretary to make estimated State aid

payments that take Impact Aid into account as local revenue if ED has not made a 7009 determination

• Request must include an assurance that the State will make full payments to the

LEA within 60 days if the State does not meet the requirements of 222.162

• Department Considers in its decision if:
• The State was certified under 222.162 in the previous year
• There have been no major changes to the State’s State aid formula

Section 222.161 How is State aid treated under Section 7009 of the Act?

• New States, or States that have not been certified in 2 year will have to provide:
• Projected data showing whether it meets the disparity standard in §222.162
• Data showing the resulting amounts of State aid as if the State were certified to

consider Impact Aid in making State aid payments

• Changes definition of current expenditures to statutory definition in 7013(4)
• Does not include expenditures of Impact Aid that are not taken into

consideration under the State aid program and exceed the proportion of those funds that the State would be allowed to take into consideration under §222.162

10/3/2016 24

Old Regulations (c)*** (2) If a State aid program uses “weighted pupil,” “classroom,” “instructional unit,” or another designated measure of need in determining allocations of State aid to take account of special cost differentials, the computation of per pupil revenue or current expenditures may be made on those bases. The two allowable categories of special cost differentials are— New Regulations (c)*** (2) If a State aid program uses “weighted pupil,” “classroom,” “instructional unit,” or another designated measure of need in determining allocations of State aid to take account of special cost differentials, the computation of per pupil revenue or current expenditures may be made using one of the methods in paragraph (d). The two allowable categories of special cost differentials are—

§222.162 What disparity standard must a State meet in

• rder to be certified and how are disparities in current

expenditures or revenues per pupil measured?

CLARIFYING REGULATION

Old Regulation (d) Revenues and current expenditures included in

• determinations. All

revenues or current expenditures must be included for each LEA in the State in determining the percentage of disparity under paragraph (a) of this section. New Regulation – Completely Revised

(d) Accounting for Special Cost Differentials. In computing per‐pupil figures under paragraph (c) of this section, the State accounts for special cost differentials that meet the requirements of paragraph (c)(2) of this section in one of four ways: (i) The Inclusion Method on a Revenue Basis. The State divides total revenues by a weighted pupil count that includes only those weights associated with the special cost differentials. (ii) The Inclusion Method on an Expenditure Basis. The State divides total current expenditures by a weighted pupil count that includes only those weights associated with the special cost differentials. (iii) The Exclusion Method on a Revenue Basis. The State subtracts revenues associated with the special cost differentials from total revenues, and divides this net amount by an unweighted pupil count. (iv) The Exclusion Method on an Expenditure Basis. The State subtracts current expenditures from revenues associated with the special cost differentials from total current expenditures, and divides this net amount by an unweighted pupil count.

§222.162 What disparity standard must a State meet in

• rder to be certified and how are disparities in current

expenditures or revenues per pupil measured?

CLARIFYING REGULATION

10/3/2016 25

§222.162 What disparity standard must a State meet in

• rder to be certified and how are disparities in current

expenditures or revenues per pupil measured?

4 ways to account for cost differentials

• 1. The inclusion method on a revenue basis =LEA’s total revenue ÷ weighted

pupil count associated with special cost differentials

• 2. The inclusion method on an expenditure basis= LEA’s TCE ÷ weighted pupil

count associated with special cost differentials

• 3. The exclusion method on a revenue basis = LEA’s total revenues ‐ revenues

relating to special cost differentials ÷ unweighted pupil count

• 4. The exclusion method on an expenditure basis = LEA’s total expenditures ‐

expenditures relating to special cost differentials ÷ unweighted pupil count

Old Regulation (a) * * * (2) Whenever a proceeding under this subpart is initiated, the party initiating the proceeding shall give adequate notice to the State and all LEAs in the State and provide them with a complete copy of the submission initiating the proceeding. In addition, the party initiating the proceeding shall notify the State and all LEAs in the State of their right to request from the Secretary, within 30 days of the initiation of a proceeding, the opportunity to present their views to the Secretary before the Secretary makes a determination. New Regulation (a) * * * (2) Whenever a proceeding under this subpart is initiated, the party initiating the proceeding shall provide either the State or all LEAs with a complete copy of the submission required in paragraph (b) of this

• section. Following receipt of the submission,

the Secretary shall notify the State and all LEAs in the State of their right to request from the Secretary, within 30 days of the initiation of a proceeding, the opportunity to present their views to the Secretary before the Secretary makes a determination.

§222.164 What procedures does the Secretary follow in making a determination under section 7009?

POLICY CHANGE

10/3/2016 26

§222.164 What procedures does the Secretary follow in making a determination under section 7009?

• Secretary will notify the State and all LEAs in the State of

their right to present their views before the Secretary makes a determination under Section 7009.

Impact Aid Program Final Rule

https://www.federalregister.gov/d/2016‐22407 Contact Us: Impact.Aid@ed.gov 202‐260‐3858