                           TITLE 20--EDUCATION
 
 CHAPTER 70--STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY 
                                 SCHOOLS
 
                       SUBCHAPTER VIII--IMPACT AID
 
Sec. 7703. Payments for eligible federally connected children


(a) Computation of payment

                           (1) In general

        For the purpose of computing the amount that a local educational 
    agency is eligible to receive under subsection (b) or (d) of this 
    section for any fiscal year, the Secretary shall determine the 
    number of children who were in average daily attendance in the 
    schools of such agency, and for whom such agency provided free 
    public education, during the preceding school year and who, while in 
    attendance at such schools--
            (A)(i) resided on Federal property with a parent employed on 
        Federal property situated in whole or in part within the 
        boundaries of the school district of such agency; or
            (ii) resided on Federal property with a parent who is an 
        official of, and accredited by, a foreign government and is a 
        foreign military officer;
            (B) resided on Federal property and had a parent on active 
        duty in the uniformed services (as defined in section 101 of 
        title 37);
            (C) resided on Indian lands;
            (D)(i) had a parent on active duty in the uniformed services 
        (as defined by section 101 of title 37) but did not reside on 
        Federal property; or
            (ii) had a parent who is an official of, and has been 
        accredited by, a foreign government and is a foreign military 
        officer but did not reside on Federal property;
            (E) resided in low-rent housing;
            (F) resided on Federal property and is not described in 
        subparagraph (A) or (B); or
            (G) resided with a parent employed on Federal property 
        situated--
                (i) in whole or in part in the county in which such 
            agency is located, or in whole or in part in such agency if 
            such agency is located in more than one county; or
                (ii) if not in such county, in whole or in part in the 
            same State as such agency.

             (2) Determination of weighted student units

        For the purpose of computing the basic support payment under 
    subsection (b) of this section, the Secretary shall calculate the 
    total number of weighted student units for a local educational 
    agency by adding together the results obtained by the following 
    computations:
            (A) Multiply the number of children described in 
        subparagraphs (A) and (B) of paragraph (1) by a factor of 1.0.
            (B) Multiply the number of children described in paragraph 
        (1)(C) by a factor of 1.25.
            (C) Multiply the number of children described in 
        subparagraphs (A) and (B) of paragraph (1) by a factor of .35 if 
        the local educational agency has--
                (i) a number of such children described in such 
            subparagraphs which exceeds 6,500; and
                (ii) an average daily attendance for all children which 
            exceeds 100,000.

            (D) Multiply the number of children described in 
        subparagraph (D) of paragraph (1) by a factor of .20.
            (E) Multiply the number of children described in 
        subparagraph (E) of paragraph (1) by a factor of .10.
            (F) Multiply the number of children described in 
        subparagraphs (F) and (G) of paragraph (1) by a factor of .05.

                          (3) Special rule

        The Secretary shall only compute a payment for a local 
    educational agency for children described in subparagraph (F) or (G) 
    of paragraph (1) if the number of such children equals or exceeds 
    1,000 or such number equals or exceeds 10 percent of the total 
    number of students in average daily attendance in the schools of 
    such agency.

      (4) Military installation and Indian housing undergoing 
                          renovation or rebuilding

        (A) In general

            (i) 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 or rebuilding on the date 
        for which the Secretary determines the number of children under 
        paragraph (1).
            (ii) For purposes of computing the amount of a payment for a 
        local educational agency that received a payment for children 
        that resided on Indian lands in accordance with paragraph (1)(C) 
        for the fiscal year prior to the fiscal year for which the local 
        educational agency is making an application, the Secretary shall 
        consider such children to be children described in paragraph 
        (1)(C) if the Secretary determines, on the basis of a 
        certification provided to the Secretary by a designated 
        representative of the Secretary of the Interior or the Secretary 
        of Housing and Urban Development, that such children would have 
        resided in housing on Indian lands in accordance with paragraph 
        (1)(C) except that such housing was undergoing renovation or 
        rebuilding on the date for which the Secretary determines the 
        number of children under paragraph (1).

        (B) Limitations

            (i)(I) Children described in paragraph (1)(D)(i) may be 
        deemed to be children described in paragraph (1)(B) with respect 
        to housing on Federal property undergoing renovation or 
        rebuilding in accordance with subparagraph (A)(i) for a period 
        not to exceed 3 fiscal years.
            (II) The number of children described in paragraph (1)(D)(i) 
        who are deemed to be children described in paragraph (1)(B) with 
        respect to housing on Federal property undergoing renovation or 
        rebuilding in accordance with subparagraph (A)(i) for any fiscal 
        year may not exceed the maximum number of children who are 
        expected to occupy that housing upon completion of the 
        renovation or rebuilding.
            (ii)(I) Children that resided on Indian lands in accordance 
        with paragraph (1)(C) for the fiscal year prior to the fiscal 
        year for which the local educational agency is making an 
        application may be deemed to be children described in paragraph 
        (1)(C) with respect to housing on Indian lands undergoing 
        renovation or rebuilding in accordance with subparagraph (A)(ii) 
        for a period not to exceed 3 fiscal years.
            (II) The number of children that resided on Indian lands in 
        accordance with paragraph (1)(C) for the fiscal year prior to 
        the fiscal year for which the local educational agency is making 
        an application who are deemed to be children described in 
        paragraph (1)(C) with respect to housing on Indian lands 
        undergoing renovation or rebuilding in accordance with 
        subparagraph (A)(ii) for any fiscal year may not exceed the 
        maximum number of children who are expected to occupy that 
        housing upon completion of the renovation or rebuilding.

           (5) Military ``Build to Lease'' program housing

        (A) In general

            For purposes of computing the amount of payment for a local 
        educational agency for children identified under paragraph (1), 
        the Secretary shall consider children residing in housing 
        initially acquired or constructed under the former section 
        2828(g) of title 10 (commonly known as the ``Build to Lease'' 
        program), as added by section 801 of the Military Construction 
        Authorization Act, 1984, to be children described under 
        paragraph (1)(B) if the property described is within the fenced 
        security perimeter of the military facility upon which such 
        housing is situated.

        (B) Additional requirements

            If the property described in subparagraph (A) is not owned 
        by the Federal Government, is subject to taxation by a State or 
        political subdivision of a State, and thereby generates revenues 
        for a local educational agency that is applying to receive a 
        payment under this section, then the Secretary--
                (i) shall require the local educational agency to 
            provide certification from an appropriate official of the 
            Department of Defense that the property is being used to 
            provide military housing; and
                (ii) shall reduce the amount of the payment under this 
            section by an amount equal to the amount of revenue from 
            such taxation received in the second preceding fiscal year 
            by such local educational agency, unless the amount of such 
            revenue was taken into account by the State for such second 
            preceding fiscal year and already resulted in a reduction in 
            the amount of State aid paid to such local educational 
            agency.

(b) Basic support payments; insufficient appropriations; State with only 
        one local educational agency

                     (1) Basic support payments

        (A) In general

            From the amount appropriated under section 7714(b) of this 
        title for a fiscal year, the Secretary is authorized to make 
        basic support payments to eligible local educational agencies 
        with children described in subsection (a) of this section.

        (B) Eligibility

            A local educational agency is eligible to receive a basic 
        support payment under subparagraph (A) for a fiscal year with 
        respect to a number of children determined under subsection 
        (a)(1) of this section only if the number of children so 
        determined with respect to such agency amounts to the lesser 
        of--
                (i) at least 400 such children; or
                (ii) a number of such children which equals at least 3 
            percent of the total number of children who were in average 
            daily attendance, during such year, at the schools of such 
            agency and for whom such agency provided free public 
            education.

        (C) Maximum amount

            The maximum amount that a local educational agency is 
        eligible to receive under this paragraph for any fiscal year is 
        the sum of the total weighted student units, as computed under 
        subsection (a)(2) of this section, multiplied by the greater 
        of--
                (i) one-half of the average per-pupil expenditure of the 
            State in which the local educational agency is located for 
            the third fiscal year preceding the fiscal year for which 
            the determination is made;
                (ii) one-half of the average per-pupil expenditure of 
            all of the States for the third fiscal year preceding the 
            fiscal year for which the determination is made;
                (iii) the comparable local contribution rate certified 
            by the State, as determined under regulations prescribed to 
            carry out the Act of September 30, 1950 (Public Law 874, 
            81st Congress), as such regulations were in effect on 
            January 1, 1994; or
                (iv) the average per-pupil expenditure of the State in 
            which the local educational agency is located, multiplied by 
            the local contribution percentage.

        (D) Data

            If satisfactory data from the third preceding fiscal year 
        are not available for any of the expenditures described in 
        clause (i) or (ii) of subparagraph (C), the Secretary shall use 
        data from the most recent fiscal year for which data that are 
        satisfactory to the Secretary are available.

        (E) Special rule

            For purposes of determining the comparable local 
        contribution rate under subparagraph (C)(iii) for a local 
        educational agency described in section 222.39(c)(3) of title 
        34, Code of Federal Regulations, that had its comparable local 
        contribution rate for fiscal year 1998 calculated pursuant to 
        section 222.39 of title 34, Code of Federal Regulations, the 
        Secretary shall determine such comparable local contribution 
        rate as the rate upon which payments under this subsection for 
        fiscal year 2000 were made to the local educational agency 
        adjusted by the percentage increase or decrease in the per pupil 
        expenditure in the State serving the local educational agency 
        calculated on the basis of the second most recent preceding 
        school year compared to the third most recent preceding school 
        year for which school year data are available.

        (F) Increase in local contribution rate due to unusual 
                geographic factors

            If the current expenditures in those local educational 
        agencies which the Secretary has determined to be generally 
        comparable to the local educational agency for which a 
        computation is made under subparagraph (C) are not reasonably 
        comparable because of unusual geographical factors which affect 
        the current expenditures necessary to maintain, in such agency, 
        a level of education equivalent to that maintained in such other 
        agencies, then the Secretary shall increase the local 
        contribution rate for such agency under subparagraph (C)(iii) by 
        such an amount which the Secretary determines will compensate 
        such agency for the increase in current expenditures 
        necessitated by such unusual geographical factors. The amount of 
        any such supplementary payment may not exceed the per-pupil 
        share (computed with regard to all children in average daily 
        attendance), as determined by the Secretary, of the increased 
        current expenditures necessitated by such unusual geographic 
        factors.

       (2) Basic support payments for heavily impacted local 
                            educational agencies

        (A) In general

            (i) From the amount appropriated under section 7714(b) of 
        this title for a fiscal year, the Secretary is authorized to 
        make basic support payments to eligible heavily impacted local 
        educational agencies with children described in subsection (a) 
        of this section.
            (ii) A local educational agency that receives a basic 
        support payment under this paragraph for a fiscal year shall not 
        be eligible to receive a basic support payment under paragraph 
        (1) for that fiscal year.

        (B) Eligibility for continuing heavily impacted local 
                educational agencies

            (i) In general

                A heavily impacted local educational agency is eligible 
            to receive a basic support payment under subparagraph (A) 
            with respect to a number of children determined under 
            subsection (a)(1) of this section if the agency--
                    (I) received an additional assistance payment under 
                subsection (f) of this section (as such subsection was 
                in effect on the day before October 30, 2000) for fiscal 
                year 2000; and
                    (II)(aa) is a local educational agency whose 
                boundaries are the same as a Federal military 
                installation;
                    (bb) has an enrollment of children described in 
                subsection (a)(1) of this section that constitutes a 
                percentage of the total student enrollment of the agency 
                which is not less than 35 percent, has a per-pupil 
                expenditure that is less than the average per-pupil 
                expenditure of the State in which the agency is located 
                or the average per-pupil expenditure of all States 
                (whichever average per-pupil expenditure is greater), 
                except that a local educational agency with a total 
                student enrollment of less than 350 students shall be 
                deemed to have satisfied such per-pupil expenditure 
                requirement, and has a tax rate for general fund 
                purposes which is not less than 95 percent of the 
                average tax rate for general fund purposes of local 
                educational agencies in the State;
                    (cc) has an enrollment of children described in 
                subsection (a)(1) of this section that constitutes a 
                percentage of the total student enrollment of the agency 
                which is not less than 30 percent, and has a tax rate 
                for general fund purposes which is not less than 125 
                percent of the average tax rate for general fund 
                purposes for comparable local educational agencies in 
                the State;
                    (dd) has a total student enrollment of not less than 
                25,000 students, of which not less than 50 percent are 
                children described in subsection (a)(1) of this section 
                and not less than 6,000 of such children are children 
                described in subparagraphs (A) and (B) of subsection 
                (a)(1) of this section; or
                    (ee) meets the requirements of subsection (f)(2) of 
                this section applying the data requirements of 
                subsection (f)(4) of this section (as such subsections 
                were in effect on the day before October 30, 2000).
            (ii) Loss of eligibility

                A heavily impacted local educational agency that met the 
            requirements of clause (i) for a fiscal year shall be 
            ineligible to receive a basic support payment under 
            subparagraph (A) if the agency fails to meet the 
            requirements of clause (i) for a subsequent fiscal year, 
            except that such agency shall continue to receive a basic 
            support payment under this paragraph for the fiscal year for 
            which the ineligibility determination is made.
            (iii) Resumption of eligibility

                A heavily impacted local educational agency described in 
            clause (i) that becomes ineligible under such clause for 1 
            or more fiscal years may resume eligibility for a basic 
            support payment under this paragraph for a subsequent fiscal 
            year only if the agency meets the requirements of clause (i) 
            for that subsequent fiscal year, except that such agency 
            shall not receive a basic support payment under this 
            paragraph until the fiscal year succeeding the fiscal year 
            for which the eligibility determination is made.

        (C) Eligibility for new heavily impacted local educational 
                agencies

            (i) In general

                A heavily impacted local educational agency that did not 
            receive an additional assistance payment under subsection 
            (f) of this section (as such subsection was in effect on the 
            day before October 30, 2000) for fiscal year 2000 is 
            eligible to receive a basic support payment under 
            subparagraph (A) for fiscal year 2002 and any subsequent 
            fiscal year with respect to a number of children determined 
            under subsection (a)(1) of this section only if the agency 
            is a local educational agency whose boundaries are the same 
            as a Federal military installation, or the agency--
                    (I) has an enrollment of children described in 
                subsection (a)(1) of this section that constitutes a 
                percentage of the total student enrollment of the agency 
                that--
                        (aa) is not less than 50 percent if such agency 
                    receives a payment on behalf of children described 
                    in subparagraphs (F) and (G) of such subsection; or
                        (bb) is not less than 40 percent if such agency 
                    does not receive a payment on behalf of such 
                    children;

                    (II)(aa) for a local educational agency that has a 
                total student enrollment of 350 or more students, has a 
                per-pupil expenditure that is less than the average per-
                pupil expenditure of the State in which the agency is 
                located; or
                    (bb) for a local educational agency that has a total 
                student enrollment of less than 350 students, has a per-
                pupil expenditure that is less than the average per-
                pupil expenditure of a comparable local educational 
                agency in the State in which the agency is located; and
                    (III) has a tax rate for general fund purposes that 
                is at least 95 percent of the average tax rate for 
                general fund purposes of comparable local educational 
                agencies in the State.
            (ii) Resumption of eligibility

                A heavily impacted local educational agency described in 
            clause (i) that becomes ineligible under such clause for 1 
            or more fiscal years may resume eligibility for a basic 
            support payment under this paragraph for a subsequent fiscal 
            year only if the agency is a local educational agency whose 
            boundaries are the same as a Federal military installation, 
            or meets the requirements of clause (i), for that subsequent 
            fiscal year, except that such agency shall continue to 
            receive a basic support payment under this paragraph for the 
            fiscal year for which the ineligibility determination is 
            made.
            (iii) Application

                With respect to the first fiscal year for which a 
            heavily impacted local educational agency described in 
            clause (i) applies for a basic support payment under 
            subparagraph (A), or with respect to the first fiscal year 
            for which a heavily impacted local educational agency 
            applies for a basic support payment under subparagraph (A) 
            after becoming ineligible under clause (i) for 1 or more 
            preceding fiscal years, the agency shall apply for such 
            payment at least 1 year prior to the start of that first 
            fiscal year.

        (D) Maximum amount for regular heavily impacted local 
                educational agencies

            (i) Except as provided in subparagraph (E), the maximum 
        amount that a heavily impacted local educational agency is 
        eligible to receive under this paragraph for any fiscal year is 
        the sum of the total weighted student units, as computed under 
        subsection (a)(2) of this section and subject to clause (ii), 
        multiplied by the greater of--
                (I) four-fifths of the average per-pupil expenditure of 
            the State in which the local educational agency is located 
            for the third fiscal year preceding the fiscal year for 
            which the determination is made; or
                (II) four-fifths of the average per-pupil expenditure of 
            all of the States for the third fiscal year preceding the 
            fiscal year for which the determination is made.

            (ii)(I) For a local educational agency with respect to which 
        35 percent or more of the total student enrollment of the 
        schools of the agency are children described in subparagraph (D) 
        or (E) (or a combination thereof) of subsection (a)(1) of this 
        section, the Secretary shall calculate the weighted student 
        units of such children for purposes of subsection (a)(2) of this 
        section by multiplying the number of such children by a factor 
        of 0.55.
            (II) For a local educational agency that has an enrollment 
        of 100 or fewer children described in subsection (a)(1) of this 
        section, the Secretary shall calculate the total number of 
        weighted student units for purposes of subsection (a)(2) of this 
        section by multiplying the number of such children by a factor 
        of 1.75.
            (III) For a local educational agency that has an enrollment 
        of more than 100 but not more than 750 children described in 
        subsection (a)(1) of this section, the Secretary shall calculate 
        the total number of weighted student units for purposes of 
        subsection (a)(2) of this section by multiplying the number of 
        such children by a factor of 1.25.

        (E) Maximum amount for large heavily impacted local educational 
                agencies

            (i)(I) Subject to clause (ii), the maximum amount that a 
        heavily impacted local educational agency described in subclause 
        (II) is eligible to receive under this paragraph for any fiscal 
        year shall be determined in accordance with the formula 
        described in paragraph (1)(C).
            (II) A heavily impacted local educational agency described 
        in this subclause is a local educational agency that has a total 
        student enrollment of not less than 25,000 students, of which 
        not less than 50 percent are children described in subsection 
        (a)(1) of this section and not less than 6,000 of such children 
        are children described in subparagraphs (A) and (B) of 
        subsection (a)(1) of this section.
            (ii) For purposes of calculating the maximum amount 
        described in clause (i), the factor used in determining the 
        weighted student units under subsection (a)(2) of this section 
        with respect to children described in subparagraphs (A) and (B) 
        of subsection (a)(1) of this section shall be 1.35.

        (F) Data

            For purposes of providing assistance under this paragraph 
        the Secretary--
                (i) shall use student, revenue, expenditure, and tax 
            data from the third fiscal year preceding the fiscal year 
            for which the local educational agency is applying for 
            assistance under this paragraph; and
                (ii) except as provided in subparagraph (C)(i)(I), shall 
            include all of the children described in subparagraphs (F) 
            and (G) of subsection (a)(1) of this section enrolled in 
            schools of the local educational agency in determining (I) 
            the eligibility of the agency for assistance under this 
            paragraph, and (II) the amount of such assistance if the 
            number of such children meet the requirements of subsection 
            (a)(3) of this section.

        (G) Determination of average tax rates for general fund purposes

            For the purpose of determining average tax rates for general 
        fund purposes for local educational agencies in a State under 
        this paragraph (except under subparagraph (C)(i)(II)(bb)), the 
        Secretary shall use either--
                (i) the average tax rate for general fund purposes for 
            comparable local educational agencies, as determined by the 
            Secretary in regulations; or
                (ii) the average tax rate of all the local educational 
            agencies in the State.

         (3) Payments with respect to fiscal years in which 
                     insufficient funds are appropriated

        (A) In general

            For any fiscal year in which the sums appropriated under 
        section 7714(b) of this title are insufficient to pay to each 
        local educational agency the full amount computed under 
        paragraphs (1) and (2), the Secretary shall make payments in 
        accordance with this paragraph.

        (B) Learning opportunity threshold payments in lieu of payments 
                under paragraph (1)

            (i) For fiscal years described in subparagraph (A), the 
        Secretary shall compute a learning opportunity threshold payment 
        (hereafter in this subchapter referred to as the ``threshold 
        payment'') in lieu of basic support payments under paragraph (1) 
        by multiplying the amount obtained under paragraph (1)(C) by the 
        total percentage obtained by adding--
                (I) the percentage of federally connected children for 
            each local educational agency determined by calculating the 
            fraction, the numerator of which is the total number of 
            children described under subsection (a)(1) of this section 
            and the denominator of which is the total number of children 
            in average daily attendance at the schools served by such 
            agency; and
                (II) the percentage that funds under paragraph (1)(C) 
            represent of the total budget of the local educational 
            agency, determined by calculating the fraction, the 
            numerator of which is the total amount of funds calculated 
            for each local educational agency under this paragraph, and 
            the denominator of which is the total current expenditures 
            for such agency in the second preceding fiscal year for 
            which the determination is made.

            (ii) Such total percentage used to calculate threshold 
        payments under paragraph (1) shall not exceed 100.
            (iii) For the purpose of determining the percentages 
        described in subclauses (I) and (II) of clause (i) that are 
        applicable to the local educational agency providing free public 
        education to students in grades 9 through 12 residing on Hanscom 
        Air Force Base, Massachusetts, the Secretary shall consider only 
        that portion of such agency's total enrollment of students in 
        grades 9 through 12 when calculating the percentage under such 
        subclause (I) and only that portion of the total current 
        expenditures attributed to the operation of grades 9 through 12 
        in such agency when calculating the percentage under subclause 
        (II).
            (iv) In the case of a local educational agency that has a 
        total student enrollment of fewer than 1,000 students and that 
        has a per-pupil expenditure that is less than the average per-
        pupil expenditure of the State in which the agency is located, 
        the total percentage used to calculate threshold payments under 
        clause (i) shall not be less than 40 percent.

        (C) Learning opportunity threshold payments in lieu of payments 
                under paragraph (2)

            For fiscal years described in subparagraph (A), the learning 
        opportunity threshold payment in lieu of basic support payments 
        under paragraph (2) shall be equal to the amount obtained under 
        subparagraph (D) or (E) of paragraph (2), as the case may be.

        (D) Ratable distribution

            For fiscal years described in subparagraph (A), the 
        Secretary shall make payments as a ratable distribution based 
        upon the computations made under subparagraphs (B) and (C).

          (4) States with only one local educational agency

        (A) In general

            In any of the 50 States of the United States in which there 
        is only one local educational agency, the Secretary shall, for 
        purposes of subparagraphs (B) and (C) of paragraph (1) or 
        subparagraphs (B) through (D) of paragraph (2), as the case may 
        be, paragraph (3) of this subsection, and subsection (e) of this 
        section, 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) or subparagraph (D) or (E) of paragraph (2), as the case 
        may be, and the learning opportunity threshold payment under 
        subparagraph (B) or (C) of paragraph (3), as the case may be, 
        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.

       (5) Local educational agencies affected by removal of 
                              Federal property

        (A) In general

            In computing the amount of a basic support payment under 
        this subsection for a fiscal year for a local educational agency 
        described in subparagraph (B), the Secretary shall meet the 
        additional requirements described in subparagraph (C).

        (B) Local educational agency described

            A local educational agency described in this subparagraph is 
        a local educational agency with respect to which Federal 
        property (i) located within the boundaries of the agency, and 
        (ii) on which one or more children reside who are receiving a 
        free public education at a school of the agency, is transferred 
        by the Federal Government to another entity in any fiscal year 
        beginning on or after October 30, 2000, so that the property is 
        subject to taxation by the State or a political subdivision of 
        the State.

        (C) Additional requirements

            The additional requirements described in this subparagraph 
        are the following:
                (i) For each fiscal year beginning after the date on 
            which the Federal property is transferred, a child described 
            in subparagraph (B) who continues to reside on such property 
            and who continues to receive a free public education at a 
            school of the agency shall be deemed to be a child who 
            resides on Federal property for purposes of computing under 
            the applicable subparagraph of subsection (a)(1) of this 
            section the amount that the agency is eligible to receive 
            under this subsection.
                (ii)(I) For the third fiscal year beginning after the 
            date on which the Federal property is transferred, and for 
            each fiscal year thereafter, the Secretary shall, after 
            computing the amount that the agency is otherwise eligible 
            to receive under this subsection for the fiscal year 
            involved, deduct from such amount an amount equal to the 
            revenue received by the agency for the immediately preceding 
            fiscal year as a result of the taxable status of the former 
            Federal property.
                (II) For purposes of determining the amount of revenue 
            to be deducted in accordance with subclause (I), the local 
            educational agency--
                    (aa) shall provide for a review and certification of 
                such amount by an appropriate local tax authority; and
                    (bb) shall submit to the Secretary a report 
                containing the amount certified under item (aa).

(c) Prior year data

                           (1) In general

        Except as provided in subsections (b)(1)(D), (b)(2), and 
    paragraph (2), all calculations under this section shall be based on 
    data for each local educational agency from not later than the 
    fiscal year preceding the fiscal year for which the agency is making 
    application for payment.

                            (2) Exception

        Calculations for a local educational agency that is newly 
    established by a State shall, for the first year of operation of 
    such agency, be based on data from the fiscal year for which the 
    agency is making application for payment.

(d) Children with disabilities

                           (1) In general

        From the amount appropriated under section 7714(c) of this title 
    for a fiscal year, the Secretary shall pay to each eligible local 
    educational agency, on a pro rata basis, the amounts determined by--
            (A) multiplying the number of children described in 
        subparagraphs (A)(ii), (B) and (C) of subsection (a)(1) of this 
        section who are eligible to receive services under the 
        Individuals with Disabilities Education Act (20 U.S.C. 1400 et 
        seq.) by a factor of 1.0; and
            (B) multiplying the number of children described in 
        subparagraph (D) of subsection (a)(1) of this section who are 
        eligible to receive services under such Act by a factor of 0.5.

                          (2) Use of funds

        A local educational agency that receives funds under paragraph 
    (1) shall use such funds to provide a free appropriate public 
    education to children described in paragraph (1) in accordance with 
    the Individuals with Disabilities Education Act (20 U.S.C. 1400 et 
    seq.).

(e) Hold harmless

                           (1) In general

        Subject to paragraphs (2) and (3), the total amount the 
    Secretary shall pay a local educational agency under subsection (b) 
    of this section--
            (A) for fiscal year 2001 shall not be less than 85 percent 
        of the total amount that the local educational agency received 
        under subsections (b) and (f) of this section for fiscal year 
        2000; and
            (B) for fiscal year 2002 shall not be less than 70 percent 
        of the total amount that the local educational agency received 
        under subsections (b) and (f) of this section for fiscal year 
        2000.

                         (2) Maximum amount

        The total amount provided to a local educational agency under 
    subparagraph (A) or (B) of paragraph (1) for a fiscal year shall not 
    exceed the maximum basic support payment amount for such agency 
    determined under paragraph (1) or (2) of subsection (b) of this 
    section, as the case may be.

                       (3) Ratable reductions

        (A) In general

            If the sums made available under this subchapter for any 
        fiscal year are insufficient to pay the full amounts that all 
        local educational agencies in all States are eligible to receive 
        under paragraph (1) for such year, then the Secretary shall 
        ratably reduce the payments to all such agencies for such year.

        (B) Additional funds

            If additional funds become available for making payments 
        under paragraph (1) for such fiscal year, payments that were 
        reduced under subparagraph (A) shall be increased on the same 
        basis as such payments were reduced.

(f) Other funds

    Notwithstanding any other provision of law, a local educational 
agency receiving funds under this section may also receive funds under 
section 386 of the National Defense Authorization Act for Fiscal Year 
1993 or such section's successor authority.

(g) Maintenance of effort

    A local educational agency may receive funds under subsection (b) of 
this section and section 7702 of this title for any fiscal year only if 
the State educational agency finds that either the combined fiscal 
effort per student or the aggregate expenditures of that agency and the 
State with respect to the provision of free public education by that 
agency for the preceding fiscal year was not less than 90 percent of 
such combined fiscal effort or aggregate expenditures for the second 
preceding fiscal year.

(Pub. L. 89-10, title VIII, Sec. 8003, as added Pub. L. 103-382, title 
I, Sec. 101, Oct. 20, 1994, 108 Stat. 3752; amended Pub. L. 104-106, 
div. A, title X, Sec. 1074(f), (g), Feb. 10, 1996, 110 Stat. 448, 449; 
Pub. L. 104-195, Secs. 3(a), 4(a), 5(a), (b), Sept. 16, 1996, 110 Stat. 
2380-2382; Pub. L. 104-201, div. A, title III, Sec. 376, Sept. 23, 1996, 
110 Stat. 2503; Pub. L. 104-208, div. A, title I, Sec. 101(e) [title 
III, Sec. 307(a)], Sept. 30, 1996, 110 Stat. 3009-233, 3009-262; Pub. L. 
105-18, title VI, Sec. 60005(a), June 12, 1997, 111 Stat. 214; Pub. L. 
105-78, title III, Nov. 13, 1997, 111 Stat. 1497; Pub. L. 106-398, 
Sec. 1 [[div. A], title XVIII, Secs. 1804(a), (b)(1), (c), 1805-
1808(b)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-372, 1654A-374 to 
1654A-382; Pub. L. 106-554, Sec. 1(a)(1) [title III, Sec. 323], Dec. 21, 
2000, 114 Stat. 2763, 2763A-61.)

                       References in Text

    Section 2828(g) of title 10 (commonly known as the ``Build to 
Lease'' program), as added by section 801 of the Military Construction 
Authorization Act, 1984, referred to in subsec. (a)(5)(A), means the 
subsection (g) added to section 2828 of Title 10, Armed Forces, by 
section 801 of Pub. L. 98-115, which was repealed by Pub. L. 102-190, 
div. B, title XXVIII, Sec. 2806(b), Dec. 5, 1991, 105 Stat. 1540.
    Act of September 30, 1950, referred to in subsec. (b)(1)(C)(iii), is 
act Sept. 30, 1950, ch. 1124, 64 Stat. 1100, as amended, which was 
classified generally to chapter 13 (Sec. 236 et seq.) of this title, 
prior to repeal by Pub. L. 103-382, title III, Sec. 331(b), Oct. 20, 
1994, 108 Stat. 3965. For complete classification of this Act to the 
Code, see Tables.
    The Individuals with Disabilities Education Act, referred to in 
subsec. (d), is title VI of Pub. L. 91-230, Apr. 13, 1970, 84 Stat. 175, 
as amended, which is classified generally to chapter 33 (Sec. 1400 et 
seq.) of this title. For complete classification of this Act to the 
Code, see section 1400 of this title and Tables.
    Section 386 of the National Defense Authorization Act for Fiscal 
Year 1993, referred to in subsec. (f), is section 386 of Pub. L. 102-
484, which is set out as a note below.


                            Prior Provisions

    Provisions similar to those in this section were contained in 
section 238 of this title prior to repeal by Pub. L. 103-382, 
Sec. 331(b).


                               Amendments

    2000--Subsec. (a)(1). Pub. L. 106-398, Sec. 1 [[div. A], title 
XVIII, Sec. 1806(c)(1)], substituted ``subsection (b) or (d)'' for 
``subsection (b), (d), or (f)'' in introductory provisions.
    Subsec. (a)(2)(D). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1804(a)(1)(B)], substituted ``subparagraph (D) of paragraph (1) by 
a factor of .20'' for ``subparagraphs (D) and (E) of paragraph (1) by a 
factor of .10''.
    Subsec. (a)(2)(E), (F). Pub. L. 106-398, Sec. 1 [[div. A], title 
XVIII, Sec. 1804(a)(1)(A), (C)], added subpar. (E) and redesignated 
former subpar. (E) as (F).
    Subsec. (a)(4). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1804(b)(1)], inserted ``and Indian'' after ``Military 
installation'' and ``or rebuilding'' after ``renovation'' in par. 
heading, designated existing provisions as subpar. (A)(i), inserted 
subpar. (A) heading, inserted ``or rebuilding'' after ``undergoing 
renovation'', added cl. (ii) to subpar. (A) and added subpar. (B).
    Subsec. (a)(5). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1804(c)], added par. (5).
    Subsec. (b)(1)(C). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(c)(2)(A)], substituted ``this paragraph'' for ``this 
subsection'' in introductory provisions.
    Subsec. (b)(1)(D), (E). Pub. L. 106-398, Sec. 1 [[div. A], title 
XVIII, Sec. 1804(a)(2)], added subpars. (D) and (E).
    Subsec. (b)(1)(F). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1805], added subpar. (F).
    Subsec. (b)(2). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(a)(2)], added par. (2). Former par. (2) redesignated (3).
    Subsec. (b)(2)(F). Pub. L. 106-554, Sec. 1(a)(1) [title III, 
Sec. 323(a)], substituted ``the Secretary--'' for ``the Secretary'', 
designated remaining provisions as cl. (i), and added cl. (ii).
    Subsec. (b)(2)(G). Pub. L. 106-554, Sec. 1(a)(1) [title III, 
Sec. 323(b)], added subpar. (G).
    Subsec. (b)(3). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(a)(1)], redesignated par. (2) as (3). Former par. (3) 
redesignated (4).
    Subsec. (b)(3)(A). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(b)(1)], substituted ``paragraphs (1) and (2)'' for ``paragraph 
(1)''.
    Subsec. (b)(3)(B). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(b)(2)(A)], inserted ``in lieu of payments under paragraph 
(1)'' after ``payments'' in heading.
    Subsec. (b)(3)(B)(i). Pub. L. 106-398, Sec. 1 [[div. A], title 
XVIII, Sec. 1806(b)(2)(B)], inserted ``in lieu of basic support payments 
under paragraph (1)'' before ``by multiplying'' in introductory 
provisions and struck out ``(not including amounts received under 
subsection (f) of this section)'' after ``under this paragraph'' in 
subcl. (II).
    Subsec. (b)(3)(B)(iv). Pub. L. 106-398, Sec. 1 [[div. A], title 
XVIII, Sec. 1806(b)(2)(C)], added cl. (iv).
    Subsec. (b)(3)(C). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(b)(4)], added subpar. (C). Former subpar. (C) redesignated 
(D).
    Subsec. (b)(3)(D). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(b)(3), (5)], redesignated subpar. (C) as (D) and substituted 
``computations made under subparagraphs (B) and (C)'' for ``computation 
made under subparagraph (B)''.
    Subsec. (b)(4). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(a)(1)], redesignated par. (3) as (4).
    Subsec. (b)(4)(A). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(c)(2)(B)(i)], substituted ``subparagraphs (B) and (C) of 
paragraph (1) or subparagraphs (B) through (D) of paragraph (2), as the 
case may be, paragraph (3) of this subsection'' for ``paragraphs (1)(B), 
(1)(C), and (2) of this subsection''.
    Subsec. (b)(4)(B). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(c)(2)(B)(ii)], in introductory provisions, inserted ``or 
subparagraph (D) or (E) of paragraph (2), as the case may be,'' after 
``paragraph (1)(C)'' and substituted ``subparagraph (B) or (C) of 
paragraph (3), as the case may be,'' for ``paragraph (2)(B)''.
    Subsec. (b)(5). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1807], added par. (5).
    Subsec. (c)(1). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1806(c)(3)], substituted ``subsections (b)(1)(D), (b)(2), and 
paragraph (2)'' for ``paragraph (2) and subsection (f) of this 
section''.
    Subsec. (e). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1804(a)(3)], amended heading and text of subsec. (e) generally. 
Prior to amendment, subsec. (e) required the Secretary to pay local 
education agencies under subsec. (b) of this section certain minimum 
amounts for fiscal years 1995 to 1999.
    Subsec. (f). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Secs. 1806(c)(4), 1808(b)(1)], redesignated subsec. (h) as (f) and 
struck out heading and text of former subsec. (f) which required the 
Secretary to provide additional assistance to meet special circumstances 
relating to the provision of education in local educational agencies 
eligible to receive assistance under this section.
    Subsec. (g). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1808(a), (b)(1)], redesignated subsec. (i) as (g) and struck out 
heading and text of former subsec. (g) which related to additional 
payments for local educational agencies with high concentrations of 
children with severe disabilities.
    Subsec. (h). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1808(b)(1)], redesignated subsec. (h) as (f).
    Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, Sec. 1806(c)(5)], 
substituted ``section 386 of the National Defense Authorization Act for 
Fiscal Year 1993'' for ``section 6 of the Act of September 30, 1950 
(Public Law 874, 81st Congress) (as such section was in effect on the 
day preceding October 20, 1994)''.
    Subsec. (i). Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1808(b)(1)], redesignated subsec. (i) as (g).
    1997--Subsec. (f)(2)(A)(ii)(I). Pub. L. 105-78, which directed the 
amendment of section 8003(f)(2)(ii)(I) of the Elementary and Secondary 
Education Act of 1965 by substituting ``25 percent of the total student 
enrollment of such agency. For purposes of this subclause, all students 
described in subsection (a)(1) of this section are used to determine 
eligibility, regardless of whether or not a local educational agency 
receives funds for these children from subsection (b) of this section;'' 
for ``35 percent'' and all that follows through the semicolon, was 
executed by making the substitution for ``35 percent of the total 
student enrollment of such agency;'' in subsection (f)(2)(A)(ii)(I) of 
this section, to reflect the probable intent of Congress.
    Subsec. (f)(4). Pub. L. 105-18 struck out hyphen after ``Secretary'' 
in introductory provisions, redesignated subpar. (A) as entire par. (4), 
inserted ``expenditure,'' after ``revenue,'', substituted period for 
semicolon after ``assistance under this subsection'', and struck out 
subpar. (B) which read as follows: ``shall derive the per pupil 
expenditure amount for the fiscal year for which the local educational 
agency is applying for assistance under this subsection for the local 
educational agency's comparable school districts by increasing or 
decreasing the per pupil expenditure data for the second fiscal year 
preceding the fiscal year for which the determination is made by the 
same percentage increase or decrease reflected between the per pupil 
expenditure data for the fourth fiscal year preceding the fiscal year 
for which the determination is made and the per pupil expenditure data 
for such second year.''
    1996--Subsec. (a)(3). Pub. L. 104-201 substituted ``1,000 or such 
number equals or exceeds 10 percent'' for ``2,000 and such number equals 
or exceeds 15 percent''.
    Subsec. (a)(4). Pub. L. 104-195, Sec. 3(a), added par. (4).
    Subsec. (b)(3). Pub. L. 104-195, Sec. 4(a), added par. (3).
    Subsec. (f)(2)(A). Pub. L. 104-106, Sec. 1074(f)(1)(A), substituted 
``if such agency is eligible for a supplementary payment in accordance 
with subparagraph (B) or such agency'' for ``only if such agency'' in 
introductory provisions.
    Subsec. (f)(2)(D). Pub. L. 104-106, Sec. 1074(f)(1)(B), added 
subpar. (D).
    Subsec. (f)(3)(A). Pub. L. 104-106, Sec. 1074(f)(2)(A)(i), inserted 
``(other than any amount received under paragraph (2)(B))'' after 
``subsection'' in introductory provisions.
    Subsec. (f)(3)(A)(i). Pub. L. 104-208, Sec. 101(e) [title III, 
Sec. 307(a)(1), (5)], substituted in introductory provisions, ``The 
Secretary, in conjunction with the local educational agency, shall first 
determine each of the following:'' for ``The Secretary shall first 
determine the greater of--'' and inserted concluding provisions.
    Subsec. (f)(3)(A)(i)(I). Pub. L. 104-208, Sec. 101(e) [title III, 
Sec. 307(a)(2), (3)], substituted ``The average'' for ``the average'' 
before ``of the State'' and substituted period for semicolon at end.
    Pub. L. 104-106, Sec. 1074(f)(2)(A)(ii), struck out ``or the average 
per-pupil expenditure of all the States'' after ``is located''.
    Subsec. (f)(3)(A)(i)(II). Pub. L. 104-208, Sec. 101(e) [title III, 
Sec. 307(a)(2)], substituted ``The average'' for ``the average''.
    Pub. L. 104-208, Sec. 101(e) [title III, Sec. 307(a)(4)], which 
directed substitution of period for ``: or'', was executed by making 
substitution for ``; or'' to reflect the probable intent of Congress.
    Subsec. (f)(3)(A)(i)(III). Pub. L. 104-208, Sec. 101(e) [title III, 
Sec. 307(a)(2)], substituted ``The average'' for ``the average''.
    Subsec. (f)(3)(A)(ii). Pub. L. 104-106, Sec. 1074(f)(2)(A)(iii), 
amended cl. (ii) generally. Prior to amendment, cl. (ii) read as 
follows: ``The Secretary shall next subtract from the amount determined 
under clause (i) the average amount of State aid per pupil received by 
the local educational agency.''
    Subsec. (f)(3)(A)(iii). Pub. L. 104-195, Sec. 5(b)(1), inserted ``, 
except as provided in subparagraph (C),'' after ``but'' in introductory 
provisions.
    Pub. L. 104-106, Sec. 1074(f)(2)(A)(iv), amended cl. (iii) 
generally. Prior to amendment, cl. (iii) read as follows: ``The 
Secretary shall next multiply the amount determined under clause (ii) by 
the total number of students in average daily attendance at the schools 
of the local educational agency as determined by the Secretary under 
subsection (a)(1) of this section.''
    Subsec. (f)(3)(B). Pub. L. 104-106, Sec. 1074(f)(2)(B), amended 
heading and text of subpar. (B) generally. Prior to amendment, text read 
as follows: ``With respect to payments under this subsection for a local 
educational agency described in clause (ii) or (iii) of paragraph 
(2)(A), the maximum amount of such payments shall be computed by taking 
the product of the average per-pupil expenditure in all States 
multiplied by 0.7, except that such amount may not exceed 125 percent of 
the average per-pupil expenditure in all local educational agencies in 
the State.''
    Subsec. (f)(3)(C). Pub. L. 104-195, Sec. 5(b)(2), added subpar. (C).
    Subsec. (f)(4). Pub. L. 104-195, Sec. 5(a), substituted ``Data'' for 
``Current year data'' in heading, amended subpar. (A) generally, 
substituting present provisions for provisions which read ``shall use 
student and revenue data from the fiscal year for which the local 
educational agency is applying for assistance under this subsection; 
and'', and in subpar. (B) substituted ``the fiscal year for which the 
local educational agency is applying for assistance under this 
subsection'' for ``such year''.
    Pub. L. 104-106, Sec. 1074(g), amended heading and text of par. (4) 
generally. Prior to amendment, text read as follows: ``The Secretary 
shall, for purposes of providing assistance under this subsection, use--
        ``(A) student and revenue data from the fiscal year for which 
    the local educational agency is applying for assistance under this 
    subsection; and
        ``(B) the most recent data available which is adjusted to such 
    fiscal year.''


                    Effective Date of 2000 Amendment

    Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, Sec. 1804(b)(2)], 
Oct. 30, 2000, 114 Stat. 1654, 1654A-375, provided that: ``The 
amendments made by paragraph (1) [amending this section] shall apply 
with respect to payments to a local educational agency for fiscal years 
beginning before, on, or after the date of the enactment of this Act 
[Oct. 30, 2000].''


                    Effective Date of 1997 Amendments

    Title III of Pub. L. 105-78, Nov. 13, 1997, 111 Stat. 1497, provided 
in part that: ``The amendment made by this proviso [amending this 
section] shall apply with respect to fiscal years beginning with fiscal 
year 1996''.
    Section 60005(b) of Pub. L. 105-18 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply with respect 
to fiscal years after fiscal year 1997.''


                    Effective Date of 1996 Amendments

    Section 101(e) [title III, Sec. 307(b)] of div. A of Pub. L. 104-208 
provided that: ``The amendments made by subsection (a) [amending this 
section] shall apply with respect to fiscal years beginning with fiscal 
year 1995.''
    Section 3(b) of Pub. L. 104-195 provided that: ``Paragraph (4) of 
section 8003(a) of the Elementary and Secondary Education Act of 1965 
[20 U.S.C. 7703(a)(4)], as added by subsection (a), shall apply with 
respect to fiscal years after fiscal year 1995.''
    Section 4(b) of Pub. L. 104-195 provided that: ``Paragraph (3) of 
section 8003(b) of the Elementary and Secondary Education Act of 1965 
[20 U.S.C. 7703(b)(3)], as added by subsection (a), shall apply with 
respect to fiscal years after fiscal year 1994.''
    Section 5(c) of Pub. L. 104-195 provided that: ``The amendments made 
by subsections (a) and (b) [amending this section] shall apply with 
respect to fiscal years after fiscal year 1996.''


  Assistance to Local Educational Agencies That Benefit Dependents of 
  Members of Armed Forces and Department of Defense Civilian Employees

    Pub. L. 102-484, div. A, title III, Sec. 386, Oct. 23, 1992, 106 
Stat. 2394, as amended by Pub. L. 103-160, div. A, title III, 
Sec. 373(a), (b), Nov. 30, 1993, 107 Stat. 1635, 1636; Pub. L. 103-382, 
title III, Sec. 391(d), Oct. 20, 1994, 108 Stat. 4022; Pub. L. 104-106, 
div. A, title X, Sec. 1074(c)-(e), (h), Feb. 10, 1996, 110 Stat. 448, 
449; Pub. L. 105-85, div. A, title III, Sec. 381(e), Nov. 18, 1997, 111 
Stat. 1709; Pub. L. 106-65, div. A, title III, Sec. 351(e), Oct. 5, 
1999, 113 Stat. 572, provided that:
    ``(a) Assistance Authorized.--The Secretary of Defense, in 
consultation with the Secretary of Education, shall provide financial 
assistance to local educational agencies in States as provided in this 
section.
    ``(b) Schools With Significant Numbers of Military Dependent 
Students.--The Secretary of Defense shall provide financial assistance 
to an eligible local educational agency described in subsection (c) if, 
without such assistance, that agency will be unable (as determined by 
the Secretary of Defense in consultation with the Secretary of 
Education) to provide the students in the schools of the agency with a 
level of education that is equivalent to the minimum level of education 
available in the schools of the other local educational agencies in the 
same State.
    ``(c) Eligible Local Educational Agencies.--A local educational 
agency is eligible for assistance under subsection (b) for a fiscal year 
if--
        ``(1) at least 20 percent (as rounded to the nearest whole 
    percent) of the students in average daily attendance in the schools 
    of that agency during the preceding school year were military 
    dependent students counted under section 8003(a)(1) of the 
    Elementary and Secondary Education Act of 1965 (20 U.S.C. 
    7703(a)(1));
        ``(2) there has been a significant increase, as determined by 
    the Secretary of Defense, in the number of military dependent 
    students in average daily attendance in the schools of that agency 
    as a result of a relocation of Armed Forces personnel or civilian 
    employees of the Department of Defense or as a result of a 
    realignment of one or more military installations; or
        ``(3) by reason of a consolidation or reorganization of local 
    educational agencies, the local educational agency is a successor of 
    a local educational agency that, for fiscal year 1992--
            ``(A) was eligible to receive payments in accordance with 
        Department of Defense Instruction 1342.18, dated June 3, 1991; 
        and
            ``(B) satisfied the requirement in paragraph (1) or (2).
    ``(d) Adjustments Related to Base Closures and Realignments.--To 
assist communities in making adjustments resulting from reductions in 
the size of the Armed Forces, the Secretary of Defense shall, in 
consultation with the Secretary of Education, make payments to local 
educational agencies that, during the period between the end of the 
school year preceding the fiscal year for which the payments are 
authorized and the beginning of the school year immediately preceding 
that school year, had an overall reduction of not less than 20 percent 
in the number of military dependent students as a result of the closure 
or realignment of military installations.
    ``(e) Report on Impact of Base Closures on Educational Agencies.--
(1) Not later than February 15 of each of 1993, 1994, 1995, and 1996, 
the Secretary of Defense, in consultation with the Secretary of 
Education, shall submit to Congress a report on the local educational 
agencies affected by the closures and realignment of military 
installations and by redeployments of members of the Armed Forces.
    ``(2) Each report shall contain the following:
        ``(A) The number of dependent children of members of the Armed 
    Forces or civilian employees of the Department of Defense who 
    entered the schools of the local educational agencies during the 
    preceding school year as a result of closures, realignments, or 
    redeployments.
        ``(B) The number of dependent children of such members or 
    employees who withdrew from the schools of the local educational 
    agencies during that school year as a result of closures, 
    realignments, or redeployments.
        ``(C) The amounts paid to the local educational agencies during 
    that year under the Act of September 30, 1950 (Public Law 874, 
    Eighty-first Congress; [former] 20 U.S.C. 236 et seq.), title VIII 
    of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
    7701 et seq.), or any other provision of law authorizing the payment 
    of financial assistance to local communities or local educational 
    agencies on the basis of the presence of dependent children of such 
    members or employees in such communities and in the schools of such 
    agencies.
        ``(D) The projected transfers of such members and employees in 
    connection with closures, realignments, and redeployments during the 
    12-month period beginning on the date of the report, including--
            ``(i) the installations to be closed or realigned;
            ``(ii) the installations to which personnel will be 
        transferred as a result of closures, realignments, and 
        redeployments; and
            ``(iii) the effects of such transfers on the number of 
        dependent children who will be included in determinations with 
        respect to the payment of funds to each affected local 
        educational agency.
    ``(f) Funding.--Of the amounts appropriated for the Department of 
Defense for operation and maintenance in fiscal year 1993 pursuant to 
the authorization of appropriations in section 301 [106 Stat. 2360]--
        ``(1) $50,000,000 shall be available for providing assistance to 
    local educational agencies under subsection (b); and
        ``(2) $8,000,000 shall be available for making payments to local 
    educational agencies under subsection (d).
    ``(g) Limitation on Transfer and Obligation of Funds.--(1) The 
amount made available pursuant to subsection (f)(2) for adjustment 
assistance related to base closures and realignments under subsection 
(d) may be obligated for such adjustment assistance only if expenditures 
for that adjustment assistance for fiscal year 1993 have been determined 
by the Director of the Office of Management and Budget to be counted 
against the defense category of the discretionary spending limits for 
fiscal year 1993 (as defined in section 601(a)(2) of the Congressional 
Budget Act of 1974 [2 U.S.C. 665(a)(2)]) for purposes of part C of the 
Balanced Budget and Emergency Deficit Control Act of 1985 [2 U.S.C. 900 
et seq.].
    ``(2) Not later than the third day after the date of the enactment 
of this Act [Oct. 23, 1992], the Director of the Office of Management 
and Budget shall make a determination as to the classification by 
discretionary spending limit category for purposes of the Balanced 
Budget and Emergency Deficit Control Act of 1985 [see Short Title note 
set out under section 900 of Title 2, The Congress] of the amount 
appropriated for adjustment assistance related to base closures and 
realignments under subsection (d). If the Director determines that the 
amount shall not classify against the defense category (as described in 
paragraph (1)), then the President shall submit to Congress a report 
stating that the Director has made such a determination and the amount 
that will not classify against the defense category and containing an 
explanation for the determination.
    ``(3) The amount listed in the report under paragraph (2) may be 
transferred only to the programs under title III [see Tables for 
classification] other than the program under subsection (d) pursuant to 
amounts specified in appropriation Acts. Any such transfer shall be 
taken into account for purposes of calculating all reports under section 
254 of the Balanced Budget and Emergency Deficit Control Act of 1985 [2 
U.S.C. 904].
    ``(h) Definitions.--In this section:
        ``(1) The term `local educational agency' has the meaning given 
    that term in section 8013(9) of the Elementary and Secondary 
    Education Act of 1965 (20 U.S.C. 7713(9)).
        ``(2) The term `military dependent student' means a student that 
    is--
            ``(A) a dependent child of a member of the Armed Forces; or
            ``(B) a dependent child of a civilian employee of the 
        Department of Defense.
        ``(3) The term `State' means each of the 50 States and the 
    District of Columbia.''
    [Section 373(c) of Pub. L. 103-160 provided that: ``The amendments 
made by subsections (a) and (b) [amending section 386 of Pub. L. 102-484 
set out above] shall take effect as of October 23, 1992, as if section 
386 of Public Law 102-484 had been enacted as amended by such 
subsections.'']


Notice to Local and State Educational Agencies of Enrollment Changes Due 
                    to Base Closures and Realignments

    For provisions requiring Secretary of Defense to identify local 
educational agencies that will experience at least a 5-percent increase 
or 10-percent reduction in enrollment in number of dependent children of 
members of Armed Forces and of civilian employees of Department of 
Defense enrolled in schools under jurisdiction of such agencies during 
next academic year as a result of closure or realignment of a military 
installation, and to transmit notice of schedule of such closure or 
realignment to affected local and State educational agencies, see 
section 2833 of Pub. L. 101-189, set out as a note under section 2687 of 
Title 10, Armed Forces.

                  Section Referred to in Other Sections

    This section is referred to in sections 1228, 7702, 7703a, 7704, 
7705, 7707, 7709, 7710, 7714 of this title.
