[Note: Title VII of the ESEA (Impact Aid) was amended on Aug. 2, 2002.]

SEC. 801. PAYMENTS RELATING TO FEDERAL ACQUISITION OF REAL PROPERTY.

(a) FOUNDATION PAYMENTS FOR PRE-1995 RECIPIENTS- Section 8002(h)(1) (20 U.S.C. 7702(h)(1)) is amended —

(1) in subparagraph (A), by striking and was eligible to receive a payment under section 2 of the Act of September 30, 1950' and inserting and that filed, or has been determined pursuant to statute to have filed a timely application, and met, or has been determined pursuant to statute to meet, the eligibility requirements of section 2(a)(1)(C) of the Act of September 30, 1950'; and

(2) in subparagraph (B), by striking (or if the local educational agency was not eligible to receive a payment under such section 2 for fiscal year 1994' and inserting (or if the local educational agency did not meet, or has not been determined pursuant to statute to meet, the eligibility requirements of section 2(a)(1)(C) of the Act of September 30, 1950 for fiscal year 1994'.

(b) PAYMENTS FOR 1995 RECIPIENTS- Section 8002(h)(2) (20 U.S.C. 7702(h)(2)) is amended —

(1) in subparagraph (A), by adding at the end before the period , or whose application under this section for fiscal year 1995 was determined pursuant to statute to be timely filed for purposes of payments for subsequent fiscal years'; and

(2) in subparagraph (B)(ii), by striking for each local educational agency that received a payment under this section for fiscal year 1995' and inserting for each local educational agency described in subparagraph (A)'.

(c) REMAINING FUNDS- Section 8002(h)(4)(B) (20 U.S.C. 7702(h)(4)(B)) is amended —

(1) by striking (in the same manner as percentage shares are determined for local educational agencies under paragraph (2)(B)(ii))' and inserting (by dividing the maximum amount that the agency is eligible to receive under subsection (b) by the total of the maximum amounts for all such agencies)'; and

(2) by striking , except that for the purpose of calculating a local educational agency's assessed value of the Federal property' and inserting , except that, for the purpose of calculating a local educational agency's maximum amount under subsection (b)'.

(d) ADDITIONAL ASSISTANCE FOR CERTAIN LOCAL EDUCATIONAL AGENCIES IMPACTED BY FEDERAL PROPERTY ACQUISITION- Section 8002 (20 U.S.C. 7702) is amended by striking subsection (j).

(e) MINIMUM PAYMENT WITH RESPECT TO LOSS OF ELIGIBILITY OF CERTAIN LOCAL EDUCATIONAL AGENCIES- Section 8002 (20 U.S.C. 7702) is amended by adding at the end the following:

(n) LOSS OF ELIGIBILITY-

(1) IN GENERAL- Notwithstanding any other provision of this section, the Secretary shall make a minimum payment to a local educational agency described in paragraph (2), for the first fiscal year that the agency loses eligibility for assistance under this section as a result of property located within the school district served by the agency failing to meet the definition of Federal property under section 8013(5)(C)(iii), in an amount equal to 90 percent of the amount received by the agency under this section for the preceding year.

(2) LOCAL EDUCATIONAL AGENCY DESCRIBED- A local educational agency described in this paragraph is an agency that —

(A) was eligible for, and received, a payment under this section for fiscal year 2002; and

(B) beginning in fiscal year 2003 or a subsequent fiscal year, is no longer eligible for payments under this section as provided for in subsection (a)(1)(C) as a result of the transfer of the Federal property involved to a non-Federal entity.'.

(f) APPLICATION FOR PAYMENT- Notwithstanding any other provision of law, the Secretary shall treat as timely filed an application under section 8002 (20 U.S.C. 7702) from Academy School District 20, Colorado, for a payment for fiscal year 1999, and shall process that application from funds appropriated for that section for fiscal year 2001.

SEC. 802. PAYMENTS FOR ELIGIBLE FEDERALLY CONNECTED CHILDREN.

(a) ELIGIBILITY FOR CERTAIN HEAVILY IMPACTED LOCAL EDUCATIONAL AGENCIES-

(1) IN GENERAL- Section 8003(b)(2)(C) (20 U.S.C. 7703(b)(2)(C)) is amended —

(A) in clauses (i) and (ii), by inserting after Federal military installation' each place it appears the following: (or if the agency is a qualified local educational agency as described in clause (iv))'; and

(B) by adding at the end the following:

(iv) QUALIFIED LOCAL EDUCATIONAL AGENCY- A qualified local educational agency described in this clause is an agency that meets the following requirements:

(I) The boundaries of the agency are the same as island property designated by the Secretary of the Interior to be property that is held in trust by the Federal Government.

(II) The agency has no taxing authority.

(III) The agency received a payment under paragraph (1) for fiscal year 2001.'.

(2) EFFECTIVE DATE- The Secretary shall consider an application for a payment under section 8003(b)(2) for fiscal year 2002 from a qualified local educational agency described in section 8003(b)(2)(C)(iv), as added by paragraph (1), as meeting the requirements of section 8003(b)(2)(C)(iii), and shall provide a payment under section 8003(b)(2) for fiscal year 2002, if the agency submits to the Secretary an application for payment under such section not later than 30 days after the date of enactment of this Act.

(b) APPLICATIONS FOR PAYMENT-

(1) WARNER PUBLIC SCHOOLS, MUSKOGEE COUNTY, OKLAHOMA- Notwithstanding any other provision of law, the Secretary of Education shall treat as timely filed an application under section 8003 (20 U.S.C. 7703) from Warner Public Schools, Muskogee County, Oklahoma, for a payment for fiscal year 2002, and shall process that application for payment, if the Secretary has received the fiscal year 2002 application not later than 30 days after the date of enactment of this Act.

(2) PINE POINT SCHOOL, SCHOOL DISTRICT 25, MINNESOTA- Notwithstanding any other provision of law, the Secretary shall treat as timely filed an application under section 8003 (20 U.S.C. 7703) from Pine Point School, School District 25, Minnesota, for a payment for fiscal year 2002, and shall process that application for payment, if the Secretary has received the fiscal year 2002 application not later than 30 days after the date of enactment of this Act.

SEC. 803. CONSTRUCTION.

Section 8007(b) (20 U.S.C. 7707(b)) is amended to read as follows:

(b) SCHOOL FACILITY EMERGENCY AND MODERNIZATION GRANTS AUTHORIZED-

(1) IN GENERAL- From 60 percent of the amount appropriated for each fiscal year under section 8014(e), the Secretary —

(A) shall award emergency grants in accordance with this subsection to eligible local educational agencies to enable the agencies to carry out emergency repairs of school facilities; and

(B) shall award modernization grants in accordance with this subsection to eligible local educational agencies to enable the agencies to carry out the modernization of school facilities.

(2) PRIORITY- In approving applications from local educational agencies for emergency grants and modernization grants under this subsection, the Secretary shall give priority to applications in accordance with the following:

(A) The Secretary shall first give priority to applications for emergency grants from local educational agencies that meet the requirements of paragraph (3)(A) and, among such applications for emergency grants, shall give priority to those applications of local educational agencies based on the severity of the emergency, as determined by the Secretary.

(B) The Secretary shall next give priority to applications for emergency grants from local educational agencies that meet the requirements of subparagraph (C) or (D) of paragraph (3) and, among such applications for emergency grants, shall give priority to those applications of local educational agencies based on the severity of the emergency, as determined by the Secretary.

(C) The Secretary shall next give priority to applications for modernization grants from local educational agencies that meet the requirements of paragraph (3)(B) and, among such applications for modernization grants, shall give priority to those applications of local educational agencies based on the severity of the need for modernization, as determined by the Secretary.

(D) The Secretary shall next give priority to applications for modernization grants from local educational agencies that meet the requirements of subparagraph (C) or (D) of paragraph (3) and, among such applications for modernization grants, shall give priority to those applications of local educational agencies based on the severity of the need for modernization, as determined by the Secretary.

(3) ELIGIBILITY REQUIREMENTS-

(A) EMERGENCY GRANTS- A local educational agency is eligible to receive an emergency grant under paragraph (2)(A) if —

(i) the agency (or in the case of a local educational agency that does not have the authority to tax or issue bonds, the agency's fiscal agent) —

(I) has no practical capacity to issue bonds;

(II) has minimal capacity to issue bonds and is at not less than 75 percent of the agency's limit of bonded indebtedness; or

(III) does not meet the requirements of subclauses (I) and (II) but is eligible to receive funds under section 8003(b)(2) for the fiscal year; and

(ii) the agency is eligible to receive assistance under subsection (a) 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.

(B) MODERNIZATION GRANTS- A local educational agency is eligible to receive a modernization grant under paragraph (2)(C) if —

(i) the agency is eligible to receive assistance under this title for the fiscal year;

(ii) the agency (or in the case of a local educational agency that does not have the authority to tax or issue bonds, the agency's fiscal agent) meets the requirements of subclause (I), (II), or (III) of subparagraph (A)(i); and

(iii) the agency has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of tax-exempt Federal property, or an increase in enrollment due to the expansion of Federal activities, housing privatization, or the acquisition of Federal property.

(C) ADDITIONAL ELIGIBILITY FOR EMERGENCY AND MODERNIZATION GRANTS- (i) A local educational agency is eligible to receive an emergency grant or a modernization grant under subparagraph (B) or (D) of paragraph (2), respectively, if the agency meets the following requirements:

(I) The agency receives a basic support payment under section 8003(b) for the fiscal year and the agency meets at least one of the following requirements:

(aa) The number of children determined under section 8003(a)(1)(C) for the agency for the preceding school year constituted at least 40 percent of the total student enrollment in the schools of the agency during the preceding school year.

(bb) The number of children determined under subparagraphs (B) and (D)(i) of section 8003(a)(1) for the agency for the preceding school year constituted at least 40 percent of the total student enrollment in the schools of the agency during the preceding school year.

(II) The agency (or in the case of a local educational agency that does not have the authority to tax or issue bonds, the agency's fiscal agent) is at not less than 75 percent of the agency's limit of bonded indebtedness.

(III) The agency has an assessed value of real property per student that may be taxed for school purposes that is less than the average of the assessed value of real property per student that may be taxed for school purposes in the State in which the local educational agency is located.

(ii) A local educational agency is also eligible to receive a modernization grant under this subparagraph if the agency is eligible to receive assistance under section 8002 for the fiscal year and meets the requirements of subclauses (II) and (III) of clause (i).

(D) SPECIAL RULE-

(i) IN GENERAL- Any school described in clause (ii) that desires to receive an emergency grant or a modernization grant under subparagraph (B) or (D) of paragraph (2), respectively, shall, except as provided in the following sentence, submit an application in accordance with paragraph (6), and shall otherwise be treated as a local educational agency for the purpose of this subsection. The school shall submit an application for the grant to the local educational agency of such school and the agency shall submit the application on behalf of the school to the Secretary.

(ii) SCHOOL DESCRIBED- A school described in this clause is a school that meets the following requirements:

(I) The school is located within the geographic boundaries of a local educational agency that does not meet the applicable eligibility requirements under subparagraph (A), (B), or (C) for a grant under this subsection.

(II) The school meets at least one of the following requirements:

(aa) The number of children determined under section 8003(a)(1)(C) for the school for the preceding school year constituted at least 40 percent of the total student enrollment in the school during the preceding school year.

(bb) The number of children determined under subparagraphs (B) and (D)(i) of section 8003(a)(1) for the school for the preceding school year constituted at least 40 percent of the total student enrollment in the school during the preceding school year.

(III) The school is located within the geographic boundaries of a local educational agency that meets the requirements of subclauses (II) and (III) of subparagraph (C)(i).

(E) RULE OF CONSTRUCTION- For purposes of subparagraph (A)(i), a local educational agency —

(i) has no practical capacity to issue bonds if the total assessed value of real property that may be taxed for school purposes is less than $25,000,000; and

(ii) has minimal capacity to issue bonds if the total assessed value of real property that may be taxed for school purposes is at least $25,000,000 but not more than $50,000,000.

(4) AWARD CRITERIA- In awarding emergency grants and modernization grants under this subsection, the Secretary shall consider the following factors:

(A) The ability of the local educational agency to respond to the emergency, or to pay for the modernization project, as the case may be, as measured by —

(i) the agency's level of bonded indebtedness;

(ii) the assessed value of real property per student that may be taxed for school purposes compared to the average of the assessed value of real property per student that may be taxed for school purposes in the State in which the agency is located;

(iii) the agency's total tax rate for school purposes (or, if applicable, for capital expenditures) compared to the average total tax rate for school purposes (or the average capital expenditure tax rate, if applicable) in the State in which the agency is located; and

(iv) funds that are available to the agency, from any other source, including subsection (a), that may be used for capital expenditures.

(B) The percentage of property in the agency that is nontaxable due to the presence of the Federal Government.

(C) The number and percentages of children described in subparagraphs (A), (B), (C), and (D) of section 8003(a)(1) served in the school facility with the emergency or served in the school facility proposed for modernization, as the case may be.

(D) In the case of an emergency grant, the severity of the emergency, as measured by the threat that the condition of the school facility poses to the health, safety, and well-being of students.

(E) In the case of a modernization grant —

(i) the severity of the need for modernization, as measured by such factors as —

(I) overcrowding, as evidenced by the use of portable classrooms, or the potential for future overcrowding because of increased enrollment; or

(II) the agency's inability to utilize technology or offer a curriculum in accordance with contemporary State standards due to the physical limitations of the current school facility; and

(ii) the age of the school facility proposed for modernization.

(5) OTHER AWARD PROVISIONS-

(A) GENERAL PROVISIONS-

(i) LIMITATIONS ON AMOUNT OF FUNDS-

(I) IN GENERAL- The amount of funds provided under an emergency grant or a modernization grant awarded under this subsection to a local educational agency that meets the requirements of subclause (II) or (III) of paragraph (3)(A)(i) for purposes of eligibility under subparagraph (A) or (B) of paragraph (3) or that meets the requirements of clause (i) or (ii) of paragraph (3)(C) for purposes of eligibility under such paragraph (3)(C), or to a school that is eligible under paragraph (3)(D) —

(aa) shall not exceed 50 percent of the total cost of the project to be assisted under this subsection; and

(bb) shall not exceed $4,000,000 during any 4-year period.

(II) IN-KIND CONTRIBUTIONS- A local educational agency may use in-kind contributions to meet the matching requirement of subclause (I)(aa).

(ii) PROHIBITIONS ON USE OF FUNDS- A local educational agency may not use funds provided under an emergency grant or modernization grant awarded under this subsection for —

(I) a project for a school facility for which the agency does not have full title or other interest;

(II) stadiums or other school facilities that are primarily used for athletic contests, exhibitions, or other events for which admission is charged to the general public; or

(III) the acquisition of real property.

(iii) SUPPLEMENT, NOT SUPPLANT- A local educational agency shall use funds provided under an emergency grant or modernization grant awarded under this subsection only to supplement the amount of funds that would, in the absence of the Federal funds provided under the grant, be made available from non-Federal sources to carry out emergency repairs of school facilities or to carry out the modernization of school facilities, as the case may be, and not to supplant such funds.

(iv) MAINTENANCE COSTS- Nothing in this subsection shall be construed to authorize the payment of maintenance costs in connection with any school facility modernized in whole or in part with Federal funds provided under this subsection.

(v) ENVIRONMENTAL SAFEGUARDS- All projects carried out with Federal funds provided under this subsection shall comply with all relevant Federal, State, and local environmental laws and regulations.

(vi) CARRY-OVER OF CERTAIN APPLICATIONS- A local educational agency that applies for an emergency grant or a modernization grant under this subsection for a fiscal year and does not receive the grant for the fiscal year shall have the application for the grant considered for the following fiscal year, subject to the priority requirements of paragraph (2) and the award criteria requirements of paragraph (4).

(B) EMERGENCY GRANTS; PROHIBITION ON USE OF FUNDS- A local educational agency that is awarded an emergency grant under this subsection may not use amounts under the grant for the complete or partial replacement of an existing school facility unless such replacement is less expensive or more cost-effective than correcting the identified emergency.

(6) APPLICATION- A local educational agency that desires to receive an emergency grant or a modernization 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 the following:

(A) A description of how the local educational agency meets the award criteria under paragraph (4), including the information described in clauses (i) through (iv) of paragraph (4)(A) and subparagraphs (B) and (C) of paragraph (4).

(B) In the case of an application for an emergency grant —

(i) a description of the school facility deficiency that poses a health or safety hazard to the occupants of the facility and a description of how the deficiency will be repaired; and

(ii) a signed statement from an appropriate local official certifying that a deficiency in the school facility threatens the health or safety of the occupants of the facility or that prevents the use of all or a portion of the building.

(C) In the case of an application for a modernization grant —

(i) an explanation of the need for the school facility modernization project;

(ii) the date on which original construction of the facility to be modernized was completed;

(iii) a listing of the school facilities to be modernized, including the number and percentage of children determined under section 8003(a)(1) in average daily attendance in each school facility; and

(iv) 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 the project for which a grant under this subsection will be used, including a cost estimate for the project.

(E) A description of the interest in, or authority over, the school facility involved, such as an ownership interest or a lease arrangement.

(F) Such other information and assurances as the Secretary may reasonably require.

(7) REPORT-

(A) 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.

(B) DEFINITION- In this paragraph, the term appropriate congressional committees' means —

(i) the Committee on Appropriations and the Committee on Education and the Workforce of the House of Representatives; and

(ii) the Committee on Appropriations and the Committee on Health, Education, Labor, and Pensions of the Senate.

SEC. 804. STATE CONSIDERATION OF PAYMENTS IN PROVIDING STATE AID.

Section 8009(b)(1) (20 U.S.C. 7709(b)(1)) is amended by inserting after `section 8003(a)(2)(B)' the following: `and, with respect to a local educational agency that receives a payment under section 8003(b)(2), the amount in excess of the amount that the agency would receive if the agency were deemed to be an agency eligible to receive a payment under section 8003(b)(1) and not section 8003(b)(2)'.

SEC. 805. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL- Section 8014 (20 U.S.C. 7714) is amended in subsections (a), (b), (c), and (f) by striking three succeeding fiscal years' each place it appears and inserting seven succeeding fiscal years'.

(b) CONSTRUCTION- Section 8014(e) (20 U.S.C. 7714(e)) is amended by striking for each of the three succeeding fiscal years' and inserting for fiscal year 2001, $150,000,000 for fiscal year 2002, and such sums as may be necessary for each of the five succeeding fiscal years'.

(c) ADDITIONAL ASSISTANCE FOR CERTAIN LOCAL EDUCATIONAL AGENCIES IMPACTED BY FEDERAL PROPERTY ACQUISITION- Section 8014 (20 U.S.C. 7714) is amended by striking subsection (g).

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