General Questions | Section 8002

General Questions

1. We just received notice that our school district is going to be reviewed. What should we do to get ready?

   We will send you a list of the documents we need to review. These documents include your parent/pupil survey forms or source check documents, your membership as of the survey date, final average daily attendance for the preceding year, and individual education plans for each of the children with disabilities claimed on your application. If you claim children living on Indian lands, we will also review your Indian Policies and Procedures. If you claim children residing in low-rent housing, we will need to review information about those properties.

   Because we must review so many individual documents, we will ask you to organize them in certain ways to help us manage the task quickly. We will send you detailed instructions before the review. You can also call us if you have specific questions while you are preparing.

2. How long will this review take?

   Be prepared to set aside at least one or two business days. The time required for each review varies depending upon the number of children claimed, the type of survey you use, and how well you organize your documents.

3. What happens if you find something wrong with our records?

   If we find a particular area of concern, we will work with you to try to solve the problem and we will allow you additional time after the review to locate the necessary documents. Of course, if after a reasonable time you cannot document all of the information in your application, we will pay you on the basis of the documented information.

4. We had a field review the year before last. How often do you do this?

   Due to the large number of school districts that receive Impact Aid, we cannot review each applicant every year. We try to regularly review those school districts that receive large payments, and periodically review school districts that receive smaller payments.

   We review applicants annually if they receive more than $750,000 under section 8003(b) or any funds under section 8003(f). We also periodically review applicants that receive more than $200,000. If your school district has fewer than 300 federally connected students, or if you count your students by source-check, we may ask you to mail us your documents for review.

Section 8002

1. What is Section 8002?

   Section 8002 of the Impact Aid program provides assistance to local school districts that have lost a portion of their local tax base because of federal ownership.

2. Who is Eligible?

   • School districts that can demonstrate that the Federal government has acquired, since 1938, real property with an assessed value of at least 10 percent of all real property at the time of acquisition.

   • Any LEA that contains between 20,000 and 60,000 acres of land that has been acquired by the U.S. Forest Service between 1915 and 1990 and that serves a county charted by State law in 1875 or 1890.

3. What is an Eligible Federal Property?

   An eligible Federal property meets one or more of the following criteria:

   • An eligible Federal property is a property acquired by the U.S. government by condemnation, gift, exchange, purchase transfer or other arrangement;
   • Real property assumed by the U.S. government in trust for the benefit of individual Indians or Indian tribes;
   • Restrictions placed by the U.S. government on the sale, transfer, or exchange of real property held by individual Indians or Indian tribes.

   In addition the property must have been acquired since 1938 and the property was not acquired by exchange for other Federal property that was owned within the district since 1939.

4. What is Assessed Value?

   Assessed Value (AV) means the value that is assigned to real property, for the purpose of generating local real property tax revenues for current expenditures by a State or local official.

5. What happens if the Federal government relinquishes its claim to a property?

   If, during any fiscal year, the United States sells, transfers or relinquishes an interest in or restriction on, eligible Federal property, the Secretary re-determines the LEA's eligibility for the following fiscal year, based upon the remaining eligible Federal property.

6. What must an applicant provide to be considered for eligibility under Section 8002?

   Original records as of the time(s) of Federal acquisition of real property, prepared by a legally authorized official, documenting the assessed value of that real property; or facsimiles of those records such as microfilm or other reproduced copies.

Please see: Exhibit A and Exhibit B

7. How does a local official determine the aggregate assessed value of eligible Federal property?

   • The local official must first determine the fair market value (FMV) of the eligible land, which is based on the highest and best use of taxable properties adjacent to the eligible Federal property.

   • The local official then determines a Section 8002 assessed value for each federally owned property by adjusting the FMV by any percentage, ratio, index, or other factor the assessor would use if the property were subject to taxation to derive its assessed value.

   • The local official then calculates the aggregate Section 8002 assessed value for all eligible Federal properties in the LEA by adding the Section 8002 assessed value for all federally owned properties in the LEA.

8. What is an adjacent parcel?

   An adjacent parcel of land is close to or next to the eligible Federal property. In most cases, this means the closest taxable parcels of land.

9. What does "highest and best use" mean?

   Highest and best use of a parcel of adjacent property means the FMV based upon the "highest and best use" standard in accordance with State or local law. If no guideline exists, the local official may base the determination on the current use of those lands. The local official may take into consideration the most developed and profitable use for which the adjacent property is physically adaptable and for which there is a demand or need for in the near future.

10. How is a Section 8002 payment calculated?

    Step 1: (Foundation Payment) The foundation payment is 38% of the fiscal year (FY) 1994 maximum entitlement for each district that was eligible to receive a payment in FY 1994 (or of a district's maximum entitlement from the most recent fiscal year from FY 1989 to 1993 for which the district was eligible to receive a payment).

    Step 2: (1995 Recipients) The difference between the FY 1995 section 8002 appropriation and the total for Step 1 is distributed to each eligible district that received a section 8002 payment for FY 1995. Each district's payment is based on the percentage share that the district's assessed value of eligible Federal property for FY 1995 was of the total of those assessed values for all districts for FY 1995.

    Step 3: (Twenty-five percent) Twenty five percent of any remaining funds is paid to FY 1994 districts that received a foundation payment under Step 1, based on each district's proportional share of payments under Step 1.

    Step 4: (Seventy-five percent) The remaining 75% of funds is paid to all districts eligible (based upon prior year data) for section 8002 funds for the current year, based upon the percentage share that each district's maximum payment is of the total maximum payment for all of the eligible districts for that year.

11. What is a Maximum Entitlement?

    A district's maximum entitlement is an LEA's estimated assessed valuation of the Federal property multiplied by the tax rate for current operational expenditures for school tax purposes.

12. What is meant by the local real property tax rate?

    For a fiscally independent LEA, the term means the entire tax levied on real property within the LEA, if all but a de minimus amount of the total proceeds from the tax levy are available to that LEA for current expenditures.

    For a fiscally dependent LEA, the term means the following:

    1. The entire tax levied by the general government on real property if all but a de minimus amount of the total proceeds from that tax levy are available to the LEA for current expenditures.;

    2. That portion of a local real property tax rate designated by the general government for current expenditure purposes; or

    3. If no real property tax levied by the general government meets the criteria in (i) or (ii) of this definition, an imputed tax rate that the Secretary determines by-

       1. Dividing the total local real property tax revenue available for current expenditures of the general government by the total revenue from all local sources available for current expenditures of the general government;

       2. Multiplying the figure obtained in paragraph (A) by the revenue received by the LEA for current expenditures from the general government; and

       3. Dividing the figure obtained in paragraph (B) of this definition by the total current actual assessed value of all real property in the district.

    NOTE: The term does not include any portion of a tax or revenue that is restricted to or dedicated for any specific purpose other than current expenditures.

13. What is the application deadline?

    The filing date is January 31^st.

14. What is the deadline for filing an amended application?

    The deadline for filing an amended application is September 30 of the filing year.