Impact Aid, Title VIII of the Elementary and Secondary Education Act: A Primer

Summary

The Impact Aid program, administered by the U.S. Department of Education (ED) and authorized by Title VIII of the Elementary and Secondary Education Act (ESEA) is one of the oldest federal education programs, dating from 1950. Impact Aid compensates local educational agencies (LEAs) for “substantial and continuing financial burden” resulting from federal activities. These activities include federal ownership of certain lands, as well as the enrollments in LEAs of children whose parents work or live on federal land and children living on Indian lands. The federal government provides compensation because LEAs are unable to collect property or other taxes from these individuals (e.g., members of the Uniformed Services living on military bases) even though the LEAs are obligated to provide free public education to their children. Thus Impact Aid is intended to compensate LEAs for the resulting loss of tax revenue. Authorizations of appropriations for the program were explicitly authorized through FY2007. Congress has not acted to reauthorize the Impact Aid program, though it continues to receive annual appropriations (which are thus considered to be implicitly rather than explicitly authorized).

The Impact Aid program authorizes several types of payments:

Federal Property (Section 8002),

Federally Connected Children: Basic Support Payments (Section 8003(b) and Payments for Children with Disabilities (Section 8003(d),

Construction (Section 8007), and

Facilities Maintenance (Section 8008).

Overall, the Impact Aid program received about $1.3 billion in FY2015. The largest Impact Aid payment is basic support payments for federally connected children (Section 8003(b)), accounting for nearly 90% of the total appropriation. Federally connected children are children who reside with a parent who is a member of the Uniformed Services living on or off federal property; with a parent who is an accredited foreign military officer living on or off federal property; on Indian lands; in low-rent public housing; or with a parent who is a civilian working or living on federal land. Basic support payments are allocated directly to LEAs based on a formula that uses weights assigned to different categories of federally connected children and cost factors to determine maximum payment amounts.

This report begins with a general overview of the various payments made under the Impact Aid program, followed by a detailed discussion of each section of Title VIII. This discussion is followed by information about recent appropriations for Impact Aid. The report concludes with an overview of programs administered by the U.S. Department of Defense (DOD) that are often referred to as the “DOD Impact Aid” programs.