After passing both the Senate and the House, legislation with provisions authored by Senators Tim Johnson (D-S.D.) and John Thune (R-S.D.) to expedite payments to school districts in federally impacted areas will soon be signed into law. Their amendment, included in the Fiscal Year 2013 National Defense Authorization Act (NDAA), will improve the Impact Aid program’s efficiency by simplifying payment calculation, resulting in the ability for school districts to receive payments in a more timely manner. As a member of the bicameral conference committee that reconciled the differences between the House and Senate versions of the Fiscal Year 2013 NDAA, Representative Kristi Noem worked to ensure the Senate-passed Impact Aid provision remained in the final version of the bill.
“The inclusion of these provisions is a great step forward in improving funding certainty for South Dakota schools that are impacted by a federal presence in their district,” said Johnson. “The provisions we pushed for will expedite payments to school districts and reduce administrative burdens. This was the product of extensive bipartisan collaboration and will greatly benefit school districts in our states that rely heavily on this funding.”
“School districts need certainty from the federal government about what to budget for annual Impact Aid revenues,” said Thune. “Due to complicated payment formulas, Impact Aid districts in South Dakota have suffered from persistently late distribution of these funds, placing an unfair burden on school districts to cover the shortfall. I am pleased that Congress has acted to include our amendment to accelerate Impact Aid payments and look forward to the president signing this bill into law.”
“This is a win for our South Dakota schools,” said Noem. “South Dakota schools impacted by federal lands face unique funding challenges. As a conferee on this legislation, I was proud to be a strong advocate for these Impact Aid provisions that will ensure our schools get critical funding more quickly.”
Impact Aid school districts receive direct payments from the federal government to compensate for the federal presence within their school districts, such as military bases and tribal land. In recent years, districts have experienced a delay in receiving payments, which puts additional financial burdens on already cash-strapped school districts.
The amendment sponsored by Senators Johnson and Thune replaces a highly subjective “highest and best” formula, which attempts to determine the value of federal property based on the value of adjacent non-federal property. The formula bred a highly inefficient payment process and was subject to local interpretation by assessors. The legislation establishes a simpler formula that will remove subjectivity from the process. Additionally, a provision was included to ensure current districts receive a comparably similar payment to the amount they received under the previous formula. The legislation will prevent the need for the U.S. Department of Education to conduct regular, lengthy, resource-intensive audits of a school district’s annual Impact Aid application. These audits have resulted in delayed payments to every eligible school district.The legislation also clarifies how children who have been temporarily relocated off federal military property should be counted during the duration of a base housing renovation, repair, modernization, or demolition project. Finally, the legislation includes the stand-alone Murray-Thune “Impact Aid Timely Repayment Act of 2011” (S. 595), which will require the U.S. Department of Education to make final payments to Impact Aid schools within two years of the funds being appropriated, rather than the current six years.