CHAPTER 13.-FINANCIAL ASSISTANCE TO LOCAL EDUCATIONAL AGENCIES

Subchapter I.-Assistance for Local Educational Agencies in Areas Affected by Federal Activity

§ 236. Congressional declaration of policy.

In recognition of the responsibility of the United States for the impact which certain Federal activities have on the local educational agencies in the areas in which such activities are carried on, the Congress declares it to be the policy of the United States to provide financial assistance (as set forth in this subchapter) for those local educational agencies upon which the United States has placed financial burdens by reason of the fact that

(1) the revenues available to such agencies from local sources have been reduced as the result of the acquisition of real property by the United States; or

(2) such agencies provide education for children residing on Federal property; or

(3) such agencies provide education for children whose parents are employed on Federal property; or

(4) there has been a sudden and substantial increase in school attendance as the result of Federal activities.

(Sept. 30, 1950, ch. 1124, § 1, 64 Stat. 1100; Apr. 11, 1965, Pub. L. 89-10, title I, § 2, 79 Stat. 27.)

§ 237. Federal acquisition of property_within school district as financial burden; Federal contributions; property excluded; effect of school district consolidations.

(a) Where the Commissioner, after consultation with any local educational agency and with the appropriate State educational agency, determines for any fiscal year ending prior to July 1, 1973

(1) that the United States owns Federal property in the school district of such 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 school district which the United States owned before 1939, and (C) had an assessed value (determined as of the time or times when so acquired) aggregating 10 per centum or more of the assessed value of all real property in the school district (similarly determined as of the time or times when such Federal property was so acquired); and

(2) that such acquisition has placed a substantial and continuing financial burden on such agency; and

(3) that such agency is not being substantially compensated for the loss in revenue resulting from such acquisition by increases in revenue accruing to the agency from the carrying on of Federal activities with respect to the property so acquired,

then the local educational agency shall be entitled to receive for such fiscal year such amount as, in the judgment of the Commissioner, is equal to the continuing responsibility for the additional finan

cial burden with respect to current expenditures placed on such agency by such acquisition of property. Such amount shall not exceed the amount which, in the judgment of the Commissioner, such agency would have derived in such year, and would have had available for current expenditures, from the property acquired by the United States (such amount to be determined without regard to any improvements or other changes made in or on such property since such acquisition).

(b) For the purposes of this section any real property with respect to which payments are being made under section 831L of Title 16 shall not be regarded as Federal property.

(c) Where the school district of any local educational agency shall have been formed at any time after 1938 by the consolidation of two or more former school districts, such agency may elect (at the time it files application under section 240 of this title) for any fiscal year to have (1) the eligibility of such local educational agency, and (2) the amount which such agency shall be entitled to receive, determined under this section only with respect to such of the former school districts comprising such consolidated school district as the agency shall designate in such election. (Sept. 30, 1950, ch. 1124, § 2, 64 Stat. 1101; Aug. 8, 1953, ch. 402, § 1, 67 Stat. 530; Aug. 12, 1955, ch. 868, § 1, 69 Stat. 713; Aug. 3, 1956, ch. 915, title II, § 201, 70 Stat. 970; Aug. 12, 1958, Pub. L. 85-620, title II, § 201, 72 Stat. 559; Oct. 3, 1961, Pub. L. 87-344, title I, § 102(a), 75 Stat. 759; Dec. 18, 1963, Pub. L. 88-210, title III, § 302, formerly § 32, 77 Stat. 419, renumbered Oct. 16, 1968, Pub. L. 90-576, title I, § 101(a)(1), 82 Stat. 1064; Oct. 16, 1964, Pub. L. 88665, title XI, § 1102(a), 78 Stat. 1109; Apr. 11, 1965, Pub. L. 89-10, title I, §§ 2, 5, 79 Stat. 27, 36; Jan. 2, 1968, Pub. L. 90-247, title II, § 204(a) (c), title III, § 301(e), 81 Stat. 808, 813; Apr. 13, 1970, Pub. L. 91230, title II, § 201(b), 84 Stat. 154.)

§ 238. Payments to local school agencies.

(a) Children of persons who reside and work on Federal property; parent in uniformed services.

For the purpose of computing the amount to which a local educational agency is entitled under this section for any fiscal year, the Commissioner shall determine the number of children who were in average daily attendance at the schools of such agency, and for whom such agency provided free public education, during such fiscal year, and who, while in attendance at such schools, resided on Federal property and (1) did so with a parent employed on Federal property situated in whole or in part in the same State as the school district of such agency or situated within reasonable commuting distance from the school district of such agency, or (2) had a parent who was on active duty in the uniformed services (as defined in section 102 of the Career Compensation Act of 1949).

(b) Children of persons who reside or work on Federal property, who are on active duty in the uniformed service, or who are refugees. For the purpose of computing the amount to which a local educational agency is entitled under this section for any fiscal year ending prior to July 1, 1973, the Commissioner shall also deter

mine the number of children (other than children to whom subsection (a) of this section applies) who were in average daily attendance at the schools of a local educational agency, and for whom such agency provided free public education, during such fiscal year and who, while in attendance at such schools, either (1) resided on Federal property, or (2) resided with a parent employed on Federal property situated in whole or in part in the same State as such agency or situated within reasonable commuting distance from the school district of such agency, or (3) had a parent who was on active duty in the uniformed services (as defined in section 102 of the Career Compensation Act of 1949). In the case of fiscal years ending prior to July 1, 1973, the Commissioner shall also determine the number of children (other than children to whom subsection (a) of this section or any other provision of this subsection applies) who were in average daily attendance at the schools of a local educational agency and for whom such agency provided free public education, during such fiscal year, and who, while in attendance at such schools resided with a parent who was, at any time during the three-year period immediately preceding the fiscal year for which the determination is made, a refugee who meets the requirements of section 2601(b)(3) (A) and (B) of Title 22.

(c) Computation of amount of entitlement.

(1) The amount to which a local educational agency is entitled under this section for any fiscal year shall be an amount equal to (A) the local contribution rate (determined under subsection (d) of this section) multiplied by (B) the sum of the number of children determined under subsection (a) and one-half of the number determined under subsection (b) of this section.

(2) No local educational agency shall be entitled to receive any payment for a fiscal year with respect to a number of children determined under subsection (a) or the first sentence of subsection (b) of this section, as the case may be, unless the number of children who were in average daily attendance during such year and to whom such subsection or such sentence applies

(A) is ten or more; and

(B) amounts to, whichever is the lesser, four hundred such children, or a number of such children equal to 3 per centum or more of the total number of children who were in average daily attendance during such year and for whom such agency provided free public education, except that such 3 per centum requirement need not be met by such agency for any period of two fiscal years which follows a fiscal year during which such agency met such requirement and was entitled to payment under the provisions of this section, but the payment, under the provisions of this section to such agency for the second fiscal year of any such two-year period during which such requirement is not met, shall be reduced by 50 per centum of the amount thereof.

For the purposes of this paragraph, a local educational agency may count as children determined under the first sentence of subsection (b) of this section any number of children determined under subsection (a) of this section. Notwithstanding the provisions of clause (B) of this paragraph, the Commissioner may waive the 3 per centum condition of entitlement contained in such clause whenever, in his judgment, exceptional circumstances exist which would make the application of such condition inequitable and would defeat the purposes of this subchapter.

(3) No local educational agency shall be entitled to receive any payment for a fiscal year with respect to a number of children determined under the second sentence of subsection (b) of this section unless the number of children who were in average daily attendance to whom such sentence applies amounts to 20 per centum or more of the number of children who were in average daily attendance during such year and for whom such agency provided free public education, but in determining the number of such children under such second sentence no child shall be counted with respect to whose education a payment was made under section 2601(b)(4) of Title 22. (4) If

(A) the amount computed under paragraph (1) of this subsection for a local educational agency for any fiscal year, together with the funds available to such agency from State, local, and other Federal sources (including funds available under section 239 of this title, but excluding funds available under subchapter II of this chapter) is, in the judgment of the Commissioner, less than the amount necessary to enable such agency to provide a level of education equivalent to that maintained in the school districts of the State which, in the judgment of the Commissioner, are generally comparable to the school district of such agency;

(B) such agency is, in the judgment of the Commissioner, making a reasonable tax effort and exercising due diligence in availing itself of State and other financial assistance;

(C) not less than 50 per centum of the total number of children who were in average daily attendance at the schools of such agency, and for whom such agency provided free public education, during such fiscal year resided on Federal property; and

(D) the eligibility of such agency under State law for State aid with respect to the free public education of children residing on Federal property, and the amount of such aid, is determined on a basis no less favorable to such agency than the basis used in determining the eligibility of local educational agencies for State aid, and the amount thereof, with respect to the free public education of other children in the State, the Commissioner may increase the amount computed under paragraph (1) of this subsection to the extent necessary to enable such agency to provide a level of education equivalent to that maintained in such comparable school districts; except that this paragraph shall in no case operate to increase the amount computed for any fiscal year under paragraph (1) of this subsection for a local educational agency above the amount determined by the Commissioner to be the cost per pupil of providing a level of education equivalent to that maintained in such comparable school districts, multiplied by the number of children who were in average daily attendance at the schools of such agency, and for whom such agency provided free public education, during such year and who resided on Federal property during such year, minus the amount of State aid which the Commissioner determines to be available with respect to such children for the year for which the computation is being made.

(5) The determinations whether a local educational agency has met the requirements for eligibility under paragraph (2)(B) and (4)(C) of this subsection for any fiscal year shall be made on the basis of estimates by the Commissioner made prior to the close of such year, except that an underestimate made by the Commissioner pur

suant to the foregoing provisions of this sentence shall not operate to deprive an agency of its entitlement to any payments under this section to which it would be entitled had the estimate been accurate.

(d) Local contribution rate; special determination for territories.

The local contribution rate for a local educational agency (other than a local educational agency in Puerto Rico, Wake Island, Guam, American Samoa, or the Virgin Islands, or in a State in which a substantial proportion of the land is in unorganized territory for which a State agency is the local educational agency, or in a State in which there is only one local educational agency) for any fiscal year shall be computed by the Commissioner of Education, after consultation with the State educational agency and the local educational agency, in the following manner:

(1) he shall determine which school districts within the State are in his judgment generally comparable to the school districts of the agency for which the computation is being made; and

(2) he shall then divide (A) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which he is making the computation, which the local educational agencies of such comparable school districts made from revenues derived from local sources, by (B) the aggregate number of children in average daily attendance to whom such agencies provided free public education during such second preceding fiscal year. The local contribution rate shall be an amount equal to the quotient obtained under clause (2) of this subsection. If, in the judgment of the Commissioner, the current expenditures in those school districts which he has selected under clause (1) of this subsection are not reasonably comparable because of unusual geographical factors which affect the current expenditures necessary to maintain, in the school district of the local educational agency for which the computation is being made, a level of education equivalent to that maintained in such other districts, the Commissioner may increase the local contribution rate for such agency by such amount as he determines will compensate such agency for the increase in current expenditures necessitated by such unusual geographical factors. In no event shall the local contribution rate for any local educational agency in any State (other than Puerto Rico, Wake Island, Guam, American Samoa, or the Virgin Islands) for any fiscal year be less than (i) 50 per centum of the average per pupil expenditure in such State or (ii) 50 per centum of the average per pupil expenditure in the United States (which for the purposes of this sentence and the next sentence means the fifty States and the District of Columbia), but not to exceed the average per pupil expenditure in the State: Provided, That if, for the fiscal year ending June 30, 1959, the application of clause (ii) of this sentence results in a lower local contribution rate than resulted from the application of such clause during the fiscal year ending June 30, 1958, as such clause was then in effect, then such clause, as in effect during the fiscal year ending June 30, 1958, shall be in effect during the fiscal year ending June 30, 1959. For the purposes of the preceding sentence the "average per pupil expenditure" in a State, or in the United States, shall be the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the computation is made, of all local educational agencies in the State, or in the United States, as the case may

be, plus any direct current expenditures by the States for the operation of such agencies (without regard to the sources of funds from which either of such expenditures are made), divided by the aggregate number of children in average daily attendance to whom such agencies provided free public education during such preceding fiscal year. The local contribution rate for any local educational agency in Puerto Rico, Wake Island, Guam, American Samoa, or the Virgin Islands, or in any State in which a substantial proportion of the land is in unorganized territory for which a State agency is the local educational agency, or in any State in which there is only one local educational agency, shall be determined for any fiscal year by the Commissioner in accordance with policies and principles which will, in his judgment, best effectuate the purposes of this subchapter and most nearly approximate the policies and principles provided herein for determining local contribution rates in other States.

(e) Adjustment for certain decreases in Federal activities. Whenever the Commissioner determines that(1) a local educational agency has made preparations to provide during a fiscal year free public education for a certain number of children to whom subsection (a) or (b) of this section applies;

(2) such preparations were in his judgment reasonable in the light of the information available to such agency at the time such preparations were made; and

(3) such number has been substantially reduced by reason of a decrease in or cessation of Federal activities or by reason of a failure of any of such activities to occur,

the amount to which such agency is otherwise entitled under this section for such year shall be increased to the amount to which, in the judgment of the Commissioner, such agency would have been entitled but for such decrease in or cessation of Federal activities or the failure of such activities to occur, minus any reduction in current expenditures for such year which the Commissioner determines that such agency has effected, or reasonably should have effected, by reason of such decrease in or cessation of Federal activities or the failure of such activities to occur. (Sept 30, 1950, ch. 1124, § 3, 64 Stat. 1102; Aug. 8, 1953, ch. 402, § 2, 67 Stat. 530; Aug. 12, 1955, ch. 868, § 1, 69 Stat. 713; Aug. 1, 1956, ch. 852, § 10, 70 Stat. 909; Aug. 3, 1956, ch. 915, title II, §§ 202-206, 70 Stat. 970; Aug. 12, 1958, Pub. L. 85-620, title II, § 202, 72 Stat. 559; June 25, 1959, Pub. L. 86-70, § 18(dX1)(3), 73 Stat. 144; July 12, 1960, Pub. L. 86-624, § 14(d)1)-(3), 74 Stat. 414; Oct. 3, 1961, Pub. L. 87-344, title I, § 102(a), 75 Stat. 759; Dec. 18, 1963, Pub. L. 88-210, title III, § 302, formerly § 32, 77 Stat. 419, renumbered Oct. 16, 1968, Pub. L. 90-576, title I, § 101(a)(1), 82 Stat. 1064; Oct. 16, 1964, Pub. L. 88-665, title XI, § 1102(a), 78 Stat. 1109; Apr. 11, 1965, Pub. L. 89-10, title I, §§ 2, 3(a), 4(d)(2), 5, 79 Stat. 27, 34-36; Nov. 1, 1965, Pub. L. 89-313, § 4(a), 79 Stat. 1161; Nov. 3, 1966, Pub. L. 89-750, title II, § 201, 80 Stat. 1210; Jan. 2, 1968, Pub. L. 90-247, title II, §§ 204(d), 205(a), 206, title III, § 301(e), 81 Stat. 808, 809, 813; Apr. 13, 1970, Pub. L. 91-230, title II, §§ 201(b), 202, 84 Stat. 154, 155.)

§ 239. Sudden and substantial increases in attendance.

(a) Determination by Commissioner; amount of contribution.

If the Commissioner determines for any fiscal year ending prior to July 1, 1973