 CHAPTER 70--STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY 
                                 SCHOOLS
 
                       SUBCHAPTER VIII--IMPACT AID
 
Sec. 7707. Construction


(a) Construction payments authorized

                           (1) In general

        From 40 percent of the amount appropriated for each fiscal year 
    under section 7714(e) of this title, the Secretary shall make 
    payments in accordance with this subsection to each local 
    educational agency that receives a basic support payment under 
    section 7703(b) of this title for that fiscal year.

                     (2) Additional requirements

        A local educational agency that receives a basic support payment 
    under section 7703(b)(1) of this title shall also meet at least one 
    of the following requirements:
            (A) The number of children determined under section 
        7703(a)(1)(C) of this title for the agency for the preceding 
        school year constituted at least 50 percent of the total student 
        enrollment in the schools of the agency during the preceding 
        school year.
            (B) The number of children determined under subparagraphs 
        (B) and (D)(i) of section 7703(a)(1) of this title for the 
        agency for the preceding school year constituted at least 50 
        percent of the total student enrollment in the schools of the 
        agency during the preceding school year.

                       (3) Amount of payments

        (A) Local educational agencies impacted by military dependent 
                children

            The amount of a payment to each local educational agency 
        described in this subsection that is impacted by military 
        dependent children for a fiscal year shall be equal to--
                (i)(II) 20 percent of the amount appropriated under 
            section 7714(e) of this title for such fiscal year; divided 
            by
                (II) the total number of weighted student units of 
            children described in subparagraphs (B) and (D)(i) of 
            section 7703(a)(1) of this title for all local educational 
            agencies described in this subsection (as calculated under 
            section 7703(a)(2) of this title), including the number of 
            weighted student units of such children attending a school 
            facility described in section 7708(a) of this title if the 
            Secretary does not provide assistance for the school 
            facility under that section for the prior fiscal year; 
            multiplied by
                (ii) the total number of such weighted student units for 
            the agency.

        (B) Local educational agencies impacted by children who reside 
                on Indian lands

            The amount of a payment to each local educational agency 
        described in this subsection that is impacted by children who 
        reside on Indian lands for a fiscal year shall be equal to--
                (i)(I) 20 percent of the amount appropriated under 
            section 7714(e) of this title for such fiscal year; divided 
            by
                (II) the total number of weighted student units of 
            children described in section 7703(a)(1)(C) of this title 
            for all local educational agencies described in this 
            subsection (as calculated under section 7703(a)(2) of this 
            title); multiplied by
                (ii) the total number of such weighted student units for 
            the agency.

                          (4) Use of funds

        Any local educational agency that receives funds under this 
    subsection shall use such funds for construction, as defined in 
    section 7713(3) of this title.

(b) School facility modernization grants authorized

                           (1) In general

        From 60 percent of the amount appropriated for each fiscal year 
    under section 7714(e) of this title, the Secretary shall award 
    grants in accordance with this subsection to eligible local 
    educational agencies to enable the local educational agencies to 
    carry out modernization of school facilities.

                    (2) Eligibility requirements

        A local educational agency is eligible to receive funds under 
    this subsection only if--
            (A) such agency (or in the case of a local educational 
        agency that does not have the authority to tax or issue bonds, 
        such agency's fiscal agent) has no capacity to issue bonds or is 
        at such agency's limit in bonded indebtedness for the purposes 
        of generating funds for capital expenditures, except that a 
        local educational agency that is eligible to receive funds under 
        section 7703(b)(2) of this title shall be deemed to meet the 
        requirements of this subparagraph; and
            (B)(i) such agency received assistance under section 7702(a) 
        of this title for the fiscal year and has an assessed value of 
        taxable property per student in the school district that is less 
        than the average of the assessed value of taxable property per 
        student in the State in which the local educational agency is 
        located; or
            (ii) such agency received assistance under subsection (a) of 
        this section for the fiscal year and has a school facility 
        emergency, as determined by the Secretary, that poses a health 
        or safety hazard to the students and school personnel assigned 
        to the school facility.

                         (3) Award criteria

        In awarding grants under this subsection the Secretary shall 
    consider one or more of the following factors:
            (A) The extent to which the local educational agency lacks 
        the fiscal capacity to undertake the modernization project 
        without Federal assistance.
            (B) The extent to which property in the local educational 
        agency is nontaxable due to the presence of the Federal 
        Government.
            (C) The extent to which the local educational agency serves 
        high numbers or percentages of children described in 
        subparagraphs (A), (B), (C), and (D) of section 7703(a)(1) of 
        this title.
            (D) The need for modernization to meet--
                (i) the threat that the condition of the school facility 
            poses to the health, safety, and well-being of students;
                (ii) overcrowding conditions as evidenced by the use of 
            trailers and portable buildings and the potential for future 
            overcrowding because of increased enrollment; and
                (iii) facility needs resulting from actions of the 
            Federal Government.

            (E) The age of the school facility to be modernized.

                     (4) Other award provisions

        (A) Federal share

            The Federal funds provided under this subsection to a local 
        educational agency described in subparagraph (C) shall not 
        exceed 50 percent of the total cost of the project to be 
        assisted under this subsection. A local educational agency may 
        use in-kind contributions to meet the matching requirement of 
        the preceding sentence.

        (B) Maximum grant

            A local educational agency described in subparagraph (C) may 
        not receive a grant under this subsection in an amount that 
        exceeds $3,000,000 during any 5-year period.

        (C) Local educational agency described

            A local educational agency described in this subparagraph is 
        a local educational agency that has the authority to issue bonds 
        but is at such agency's limit in bonded indebtedness for the 
        purposes of generating funds for capital expenditures.

                          (5) Applications

        A local educational agency that desires to receive a grant under 
    this subsection shall submit an application to the Secretary at such 
    time, in such manner, and accompanied by such information as the 
    Secretary may require. Each application shall contain--
            (A) documentation certifying such agency's lack of bonding 
        capacity;
            (B) a listing of the school facilities to be modernized, 
        including the number and percentage of children determined under 
        section 7703(a)(1) of this title in average daily attendance in 
        each school facility;
            (C) a description of the ownership of the property on which 
        the current school facility is located or on which the planned 
        school facility will be located;
            (D) a description of any school facility deficiency that 
        poses a health or safety hazard to the occupants of the school 
        facility and a description of how that deficiency will be 
        repaired;
            (E) a description of the modernization to be supported with 
        funds provided under this subsection;
            (F) a cost estimate of the proposed modernization; and
            (G) such other information and assurances as the Secretary 
        may reasonably require.

                        (6) Emergency grants

        (A) Applications

            Each local educational agency described in paragraph 
        (2)(B)(ii) that desires a grant under this subsection shall 
        include in the application submitted under paragraph (5) a 
        signed statement from an appropriate local official certifying 
        that a health or safety deficiency exists.

        (B) Priority

            If the Secretary receives more than one application from 
        local educational agencies described in paragraph (2)(B)(ii) for 
        grants under this subsection for any fiscal year, the Secretary 
        shall give priority to local educational agencies based on the 
        severity of the emergency, as determined by the Secretary, and 
        when the application was received.

        (C) Allocation; reporting requirement

            (i) Allocation

                In awarding grants under this subsection to local 
            educational agencies described in paragraph (2)(B)(ii), the 
            Secretary shall consider all applications received from 
            local educational agencies that meet the requirement of 
            subsection (a)(2)(A) of this section and local educational 
            agencies that meet the requirement of subsection (a)(2)(B) 
            of this section.
            (ii) Reporting requirement

                (I) In general

                    Not later than January 1 of each year, the Secretary 
                shall prepare and submit to the appropriate 
                congressional committees a report that contains a 
                justification for each grant awarded under this 
                subsection for the prior fiscal year.
                (II) Definition

                    In this clause, the term ``appropriate congressional 
                committees'' means the Committee on Appropriations and 
                the Committee on Education and the Workforce of the 
                House of Representatives and the Committee on 
                Appropriations and the Committee on Health, Education, 
                Labor and Pensions of the Senate.

        (D) Consideration for following year

            A local educational agency described in paragraph (2)(B)(ii) 
        that applies for a grant under this subsection for any fiscal 
        year and does not receive the grant shall have the application 
        for the grant considered for the following fiscal year, subject 
        to the priority described in subparagraph (B).

                     (7) Supplement not supplant

        An eligible local educational agency shall use funds received 
    under this subsection only to supplement the amount of funds that 
    would, in the absence of such Federal funds, be made available from 
    non-Federal sources for the modernization of school facilities used 
    for educational purposes, and not to supplant such funds.

(Pub. L. 89-10, title VIII, Sec. 8007, as added Pub. L. 103-382, title 
I, Sec. 101, Oct. 20, 1994, 108 Stat. 3763; amended Pub. L. 104-134, 
title I, Sec. 101(d) [title III, Sec. 306(b)], Apr. 26, 1996, 110 Stat. 
1321-211, 1321-236; renumbered title I, Pub. L. 104-140, Sec. 1(a), May 
2, 1996, 110 Stat. 1327; Pub. L. 106-398, Sec. 1 [[div. A], title XVIII, 
Sec. 1811], Oct. 30, 2000, 114 Stat. 1654, 1654A-383.)


                               Amendments

    2000--Pub. L. 106-398 amended section generally. Prior to amendment, 
section consisted of subsecs. (a) to (c) authorizing payments to certain 
local educational agencies for construction.
    1996--Subsec. (a)(2)(B). Pub. L. 104-134 struck out ``and in which 
the agency at any 2 times during the four fiscal years preceding October 
20, 1994, was denied by a vote of the agency's eligible voters a bond 
referendum for the purposes of school construction or renovation'' 
before semicolon at end.

                  Section Referred to in Other Sections

    This section is referred to in section 7714 of this title.
