Senator John Thune (R-S.D.) today introduced legislation to improve the federal Impact Aid program’s efficiency by permanently simplifying payment calculation, resulting in the ability for school districts to receive payments in a timelier manner. The Local Taxpayer Relief Act (S. 1108) would also improve the Impact Aid program to ensure schools that have consolidated continue to be eligible for Impact Aid.
Impact Aid school districts receive compensation from the federal government for local taxes lost on account of federal land within their school districts, such as military bases and federal land like Indian Reservations or federal grasslands. In recent years, districts have experienced a delay in receiving timely payments, which puts additional financial burdens on already cash-strapped school districts.
“These bipartisan, common-sense changes make the Impact Aid program run more efficiently and ensure that school districts with federal lands will receive their payments in a more timely fashion,” said Thune. “I appreciate the work the school districts in South Dakota have done to bring these issues to my attention and look forward to continuing to work with them in the future to make this program more cost-efficient for everyone involved.”
Last year, Thune worked with Senator Tim Johnson (D-S.D.), Senator Patty Murray (D-W.A.) and Representative Kristi Noem (R-S.D) to enact a provision in the Fiscal Year 2013 National Defense Authorization Act (NDAA). The legislation ended the highly subjective “highest and best” formula that attempted to determine the “real value” of federal property that had bred a highly inefficient payment formula that was subject to local interpretation by assessors on the value of taxable property adjacent to eligible federal property. That legislation created a simpler formula that removed subjectivity from the process. It also prevented the need for the U.S. Department of Education to conduct regular, lengthy, resource-intensive audits of a school district’s Impact Aid application. Historically, these audits have resulted in delayed payments to every eligible district. Those changes enacted in the Fiscal Year 2013 NDAA sunset in 2015, and Senator Thune’s Local Taxpayer Relief Act would make those changes permanent.
The bill is cosponsored by Senator Mazie Hirono (D-Hawaii), and Representative Kristi Noem has introduced the companion legislation in the House of Representatives. The bill is supported by the National Association of Federally Impacted Schools.