Impact Aid

To provide financial assistance to local educational agencies (LEAs) where affected by Federal activities, i.e., where the tax base of a district is reduced through the Federal acquisition of real property (Section 7002, ESEA), and where the presence

The Impact Aid program provides financial assistance to school districts affected by Federal activities. The presence of certain children living on Federal property across the country can place a financial burden on the local educational agencies (LEAs) that educate them because such property is exempt from local property taxes, denying LEAs access to the primary source of revenue used by most communities to finance education. Impact Aid helps replace the lost local revenue that would otherwise be available to LEAs to pay for the education of these children.

Local educational agencies that provide free public elementary or secondary education may apply. Under Section 7002, generally, assistance is provided to districts where an aggregate of 10 percent or more of the assessed valuation of all real property in the school district as of the time(s) of acquisition has been acquired by the Federal Government since 1938 and the district is not being substantially compensated by revenue from activities on the eligible Federal property. Under Section 7003, assistance is provided to districts where at least three percent or 400 of the total number of eligible federally connected children in average daily attendance (ADA) live on Federal property including Indian lands and/or have a parent who works on Federal property or is on active duty in the uniformed services. Under Section 7007(b), "heavily impacted" LEAs that enroll a high proportion (at least 40 percent) of federally connected children, or have little or no funding capacity, may be eligible for a competitive construction award.

Public elementary and secondary school children benefit.

Under formula awards, most assistance becomes part of the general operating fund of the LEAs. Districts usually deposit the Federal payment in the general operating funds account in accordance with State laws, together with all State and local funds available for current operating expenses and use this combined account to finance the school program in the district. Special additional payments made to LEAs related to enrollments of federally connected children with disabilities must be used for programs and projects designed to meet the special educational and related needs of these children. Payments for construction may be used for construction and renovation, debt service, or other capital fund activities. Under discretionary construction awards, funds must be used for the project grant described in the application and grant award notification. The discretionary construction grant program is subject to non-supplanting requirements and must use a restricted indirect cost rate which is referenced under 34 CFR 76.564-76.569. For assistance call the Office of the Chief Financial Officer/Indirect Cost Group on 202-708-7770.

Except for Discretionary construction which is the only program within Impact Aid that allows new construction.

Payments are made annually to eligible LEAs.

Payments are computed on the basis of the statutory formula. Payments are prorated if appropriations are insufficient.

Funds are generally made available when an appropriation is made.

Contact the Program Office for this information.

An administrative law hearing is available for any LEA or State adversely affected by any action of the Secretary. The hearing must be requested under the time frame included under the program regulations.