Department of Education
- 34 CFR Part 222
- RIN 1810-AB66
AGENCY:
Office of Elementary and Secondary Education, U.S. Department of Education.
ACTION:
Final regulations.
SUMMARY:
The U.S. Department of Education (Department) amends the regulations that govern Impact Aid Programs (IAP) to make technical changes, to include correcting grammatical, spelling, and typographical errors; correcting or updating statutory authority citations and regulatory cross-references; and updating mailing and delivery methods. The technical amendments described in this document do not add or change any regulatory, recordkeeping, or reporting requirement or change interpretation of any regulation.
DATES:
These regulations are effective November 9, 2026.
FOR FURTHER INFORMATION CONTACT:
U.S. Department of Education, 400 Maryland Avenue SW, Washington, DC 20202. Telephone: (202) 260-0405. Email: impact.aid@ed.gov.
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION:
Due to the number of non-substantive technical changes made in this document, not all individual amendments are discussed below in this document's preamble, but all changes are described in the regulatory text section of this document.
With regard to updating statutory authority citations, the Department is primarily revising the statutory authority citations for the regulations contained in 34 CFR part 222, which is the section of the IAP regulations that govern the programs under title VII of the Elementary and Secondary Education Act of 1965 (ESEA) to local educational agencies (LEAs) in areas affected by Federal activities. These regulations govern the collection of data for grants, the administration of grants, and the resolution of overpayments, administrative hearings, and requests for reconsideration for programs authorized under 20 U.S.C. 7100-7714.
34 CFR part 222
20 U.S.C. 7100-7714All Subparts
The Department is changing the statutory references in this part from: 8002 to 7002, 8003 to 7003, 8004 to 7004, 8005 to 7005, 8007 to 7007, 8008 to 7008, 8009 to 7009, 8011 to 7011, 8012 to 7012, and 8013 to 7013 to reflect the change from Title VIII to Title VII of the ESEA, as amended. Additionally, the Department is updating the statutory title in all subparts from Title VIII to Title VII. The specific changes will be summarized for each subpart in the revised regulatory language section.
The Department is spelling out acronyms the first time they are used in a Subpart.
Subpart E—Payments for Heavily Impacted Local Educational Agencies Under Section 7003(b)(2) of the Act
Statute: Section 7003 of the ESEA.
Current Regulations:34 CFR 222.61(a) specifies that IAP uses third preceding fiscal year data to determine an LEA's eligibility and payments under section 7003(b)(2). Subsection (b) requires that all LEAs that are subject to the tax rate requirement use generally comparable LEAs that are identified in section 222.74 or all LEAs in the applicant's State to meet the tax rate requirement. Paragraph (c) aligns the definition of “tax rate for general fund purposes” with the definition of “local real property tax rates for current expenditures purposes” in section 8013(4) of the ESEA and the regulations at section 222.2. Section 222.75 describes how the Department computes average per-pupil expenditure of a generally comparable LEA by dividing the sum of the total current expenditures for the third preceding fiscal year for the identified generally comparable LEAs by the sum of the total ADA of those LEAs for the same fiscal year.
New Regulations: The Department is reorganizing section 222.61 to align its structure with the statute and improve readability. This reorganization includes adding descriptive headers to each paragraph and consolidating related data requirements.
Data and Tax Rates. Paragraph (a) now includes the header “Data.” Paragraph (b) is updated with the header “Tax rate” and is divided into two subparagraphs to clarify data requirements. Paragraph (b)(1) outlines the two options for tax rate data: using generally comparable LEAs identified in ( printed page 64269) section 222.74 or using all LEAs in the State. Paragraph (b)(2) incorporates the definitions for “tax rate for general fund purposes” and “current expenditures,” which were previously located in paragraph (c).
Per-Pupil Expenditures. The Department is removing and reserving section 222.75. The requirements for computing average per-pupil expenditures of generally comparable LEAs, formerly located in section 222.75, are moved to paragraph (c) of this section under the new header “Per-pupil expenditure.”
Reasons: The Department is adding headers to improve the clarity of the regulations and deleting a reference to “new” LEA because the ESEA no longer maintains a distinction between new and continuing LEAs. The Department is combining subsection (b) and (c) under new (b) with the tax rate header to better organize the regulations using existing regulatory language. The Department is removing section 222.75 and adding it to paragraph (c) since it was a data element related to eligibility so that all related data elements are contained within one location in the regulations.
Statute: Section 7003(b)(2) of the ESEA.
Current Regulations: Section 222.62 specifies the requirements an applicant must meet to be considered for an IAP payment. Paragraph (a) requires that an LEA that wishes to be considered for heavily impacted funding must annually submit the required information indicating tax rate eligibility with its annual section 7003 IAP application and that the final LEA tax rate eligibility must be verified by the State educational agency (SEA) under the process described in section 222.73. Paragraph (b) defines who is eligible to receive a “continuing” payment as an LEA that received a payment in fiscal year 2000 and meets the eligibility requirements in section 222.63. Paragraph (c) defines who is eligible for a “new” payment as an LEA that did not receive a heavily impacted payment in fiscal year 2000 and meets the eligibility criteria in section 222.64. Section 222.65 details other requirements an LEA must meet to be eligible for a heavily impacted payment, including that an LEA must timely apply for assistance and meet all statutory and regulatory requirements, and must meet applicable tax rate requirements.
New Regulations: This reorganization consolidates requirements by incorporating the provisions of section 222.65 into section 222.62. Consequently, the Department is removing and reserving section 222.65.
The revised structure of section 222.62 is as follows:
Paragraph (a) requires an LEA to submit a timely application, provide a copy to its SEA, and meet all statutory and regulatory requirements to be considered for funding.
Paragraph (b) requires an LEA to indicate on its application that it wishes to be considered for a heavily impacted payment. The LEA must also submit relevant per-pupil expenditure information and tax rate verification.
Paragraph (c) requires an LEA to meet the eligibility criteria in section 222.63 for two consecutive years. This paragraph also cross-references section 222.66, which details the requirements for losing or resuming eligibility and the “hold harmless” payment provisions.
Reasons: The Department is revising the heading of section 222.62 to clarify that this section specifies the requirements for receiving a payment rather than the process for determining eligibility. Consistent with the current statute, the Department is updating the requirements related to “new” and “continuing” LEAs because the ESEA no longer uses those terms to distinguish LEAs. Additionally, these revisions more accurately reflect that the regulations specify the requirements an LEA must meet to receive a payment, not a determination of eligibility. The Department is moving the requirements from section 222.65 into section 222.62 so that all the requirements related to receiving a payment are in one place. The Department is revising this section using language from existing regulations and the current statute to reflect the application steps and requirements an LEA must take to receive a heavily impacted section 7003(b)(2) payment.
Statute: Section 7003(b)(2) of the ESEA.
Current Regulations: Section 222.63 specifies eligibility requirements for a “continuing” LEA. Section 222.64 specifies the eligibility requirements for a “new” LEA.
New Regulations: The Department is revising section 222.63 to align with the ESEA, as amended by the National Defense Authorization Act for Fiscal Year 2016 and the Consolidated Appropriations Act, 2018. The Department is also removing and reserving section 222.64.
(a) Eligibility Under Section 7003(b)(2)(B)(II). Paragraph (a) implements three criteria that an LEA must meet to be eligible:
Enrollment. Paragraph (a)(1) requires an enrollment of at least 45 percent federally connected children in average daily attendance (ADA).
Per-Pupil Expenditure. Paragraph (a)(2) establishes per-pupil expenditure requirements based on an LEA's FY 2001 funding status:
FY 2001 Recipients: If enrollment exceeds 350 students, the per-pupil expenditure must be less than the national or State average. If enrollment is 350 or fewer, no per-pupil expenditure requirement applies.
Non-FY 2001 Recipients: If enrollment exceeds 350 students, the per-pupil expenditure must be less than the State average. If enrollment is 350 or fewer, the per-pupil expenditure must be less than the per-pupil expenditure of one generally comparable LEA or the average of three generally comparable LEAs, whichever is greater.
Tax Rate. Paragraph (a)(3) requires a tax rate for general fund purposes of at least 95 percent of the State average or the average rate of generally comparable LEAs.
(b) Eligibility for FY 2001 Recipients. Paragraph (b) implements four mandatory criteria for LEAs that received heavily impacted payments in FY 2001:
Enrollment. At least 35 percent federally connected children in ADA, including children described in ESEA section 7003(a)(1)(F) and (G).
Per-pupil expenditure. If enrollment exceeds 350, the per-pupil expenditure must be less than the national or State average. If enrollment is 350 or fewer, no per-pupil expenditure requirement applies.
Tax Rate. A tax rate of at least 95 percent of the State average or the average rate of generally comparable LEAs.
Historical Eligibility. The LEA must have been eligible for a heavily impacted payment in FY 2001.
Eligibility Under Section 7003(b)(2)(B)(III). Paragraph (c) requires LEAs to meet three criteria:
Enrollment. An LEA must have at least 30 percent federally connected children in ADA. Alternatively, an LEA may have at least 20 percent federally connected children in ADA if:
For the three preceding fiscal years, at least 65 percent of the LEA's membership was eligible for free or reduced-price lunch; and the LEA was eligible under section 7003(b)(2)(G) in 2017 due to military housing privatization.
Tax Rate. A tax rate of at least 125 percent of the State or national average, or the average rate of generally comparable LEAs.
Historical Payment. The LEA must have received a heavily impacted ( printed page 64270) payment for a fiscal year prior to FY 2017.
Eligibility for Large LEAs. Paragraph (d) implements two requirements for LEAs with large enrollments:
Enrollment. A total enrollment of at least 25,000 students, of which at least 35 percent are federally connected. Additionally, the LEA must enroll at least 3,500 children described in section 7003(a)(1)(A) and (B), or at least 7,000 children described in section 7003(a)(1)(D).
Historical Payment for Large local educational agencies. The LEA must have received a heavily impacted payment under section 8003(b)(2)(E) for FY 2015.
Boundary-Based Eligibility. Paragraph (e) provides two criteria. An LEA is eligible if it meets either of the following:
The LEA shares the same boundaries as a federal military installation; or
The LEA shares the same boundaries as an island held in trust by the United States and has no taxing authority.
Reasons: The Department is updating the requirements to align with the amendments to the ESEA affecting eligibility, including the 2015 ESSA amendments, the 2015 NDAA amendments, and the 2018 Consolidated Appropriations Act. More specifically, the 2015 ESSA amendments to the ESEA created five new eligibility categories described above. The 2015 NDAA amendments affected the per-pupil expenditure requirements in two of those categories, ESEA section 7003(b)(2)(B)(II) and 7003(b)(2)(B)(V), for fiscal years 2017, 2018, and 2019. The 2018 Consolidated Appropriations Act made the 2015 NDAA per-pupil expenditure changes permanent. The Department is also reorganizing the list of eligibility criteria in each of the categories for greater clarity, to be more easily comprehensible to prospective applicants.
Statute: Section 7003(b)(2) of the ESEA.
Current Regulations: Section 222.66 specifies how LEAs lose and resume eligibility. Subsection (a) provides that if a continuing LEA is no longer eligible, it will still receive a payment in the first year based on the number of children in ADA as if the LEA were eligible. Subsection (b) provides that a continuing LEA must be eligible for two consecutive years to receive a payment in the second year and that in the first year the LEA will only receive a basic support payment under section 7003(b)(1). Subsection (c) provides that a new LEA may resume eligibility for heavily impacted payment if it meets the eligibility criteria in the year in which it applies.
New Regulations: The Department is revising this section to clarify payment rules for LEAs that lose eligibility. The changes incorporate existing statutory and regulatory requirements.
One-year ineligibility: Under paragraph (a)(1), an LEA that received a heavily impacted payment last year but failed to meet requirements this year will still receive a payment for the first year of ineligibility. The payment will be based on the number of children in ADA as if the LEA were still eligible.
Two-year ineligibility (Tax Rate): Under paragraph (a)(2), an LEA that fails to meet the tax rate requirement for two consecutive years, will receive payments for both years. These payments are based on the ADA count from the LEA's application.
Resuming Eligibility: Under paragraph (b), to resume eligibility, an LEA must meet all application and eligibility requirements for two consecutive years. The LEA will receive a payment in the second year.
Reasons: The Department is revising the regulations to restate the current statutory requirements related to losing and regaining eligibility, and the hold harmless payments.
Section 222.68—The Department is updating the regulatory references due to the reorganization of § 222.62 and § 222.63.
Section 222.74—The Department is updating the regulatory references due to the reorganization of § 222.62 and § 222.63.
Subpart G—Special Provisions for Local Educational Agencies That Claim Children Residing on Indian Lands
Section 222.92—The Department is updating the regulatory references due to the reorganization of § 222.62 and § 222.63.
Section 222.94—The Department is correcting capitalization and making a grammatical correction by removing extraneous punctuation.
Section 222.118(d)—The Department is removing the reference to obsolete technology and updating the manner in which an applicant may request a withholding hearing.
Subpart J—Impact Aid Administrative Hearings and Judicial Review Under Section 7011 of the Act
Sections 222.153-154—The Department is removing references to obsolete technology and updating the manner in which an applicant may request an administrative hearing.
Section 222.155—The Department is revising to clarify that an administrative hearing under this subpart may be held by telephone or video conference.
Subpart K—Determinations Under Section 7009 of the Act
Section 222.165(c)—The Department is revising to clarify that an administrative hearing under this subpart may be held by telephone or video conference.
Section 222.165(f)—The Department is revising to remove references to obsolete technology and adding the options for submitting documents by email or the electronic filing system maintained by the Office of Hearings and Appeals.
Waiver of Proposed Rulemaking and Delayed Effective Date
In accordance with the Administrative Procedure Act (APA), 5 U.S.C. 553, the Department generally offers interested parties the opportunity to comment on proposed regulations. However, the APA provides that an agency is not required to conduct notice-and-comment rulemaking when the agency, for good cause, finds that the requirement is impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). There is good cause to waive rulemaking here as unnecessary.
Rulemaking is “unnecessary” in those situations in which “the administrative rule is a routine determination, insignificant in nature and impact, and inconsequential to the industry and to the public.” Utility Solid Waste Activities Group v. EPA, 236 F.3d 749, 755 (D.C. Cir. 2001) (quoting U.S. Department of Justice, Attorney General's Manual on the Administrative Procedure Act 31 (1947)) and South Carolina v. Block, 558 F. Supp. 1004, 1016 (D.S.C. 1983). However, the regulatory changes in this document are necessary to make routine technical updates and non-substantive technical corrections. Thus, the Department has determined that publication of a proposed rule is unnecessary under 5 U.S.C. 553(b)(B).
The APA generally requires that regulations be published at least 30 days before their effective date, unless the agency has good cause to implement its regulations sooner. 5 U.S.C. 553(d)(3). As previously stated, because the final regulations make routine technical updates and non-substantive technical corrections, there is good cause to waive the delayed effective date in the APA and make the final regulations effective upon publication. ( printed page 64271)
Executive Orders 12866, 13563, and 14192
Regulatory Impact Analysis: This regulatory action is not a significant regulatory action subject to review by the Office of Management and Budget under section 3(f) of Executive Order 12866. This regulatory action is not considered an “Executive Order 14192 regulatory action.” We have also reviewed this regulatory action under Executive Order 13563. We are issuing these final regulations only on a reasoned determination that their benefits would justify their costs. The Department believes that this regulatory action is consistent with the principles in Executive Order 13563. We also have determined that this regulatory action would not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.
Potential Costs and Benefits: In accordance with these Executive Orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. These final regulations are not expected to have a significant impact because they are designed to merely make routine technical updates and non-substantive technical corrections. We believe any costs would be de minimis and will be significantly outweighed by the potential benefits of ensuring clarity and consistency of the regulations.
Regulatory Flexibility Act Certification
The Regulatory Flexibility Act does not apply to this rulemaking because there is good cause to waive notice and comment under 5 U.S.C. 553.
Paperwork Reduction Act of 1995
These final regulations do not create any new information collection requirements.
Intergovernmental Review
The programs covered in this notice are subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.
This document provides early notification of our specific plans and actions for these programs.
Accessible Format: On request to the program contact person listed under FOR FURTHER INFORMATION CONTACT , individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or another accessible format.
Electronic Access to This Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov.
www.federalregister.govList of Subjects for 34 CFR Part 222
Administrative practice and procedure, Education of individuals with disabilities, Elementary and secondary education, federally affected areas, Formula grant programs—education, Indians—education, Military child—education, Reporting and recordkeeping requirements.
Kirsten Baesler,
Assistant Secretary, Office of Elementary and Secondary Education.
For the reasons discussed in the preamble, the Department of Education amends 34 CFR part 222 as follows:
PART 222—IMPACT AID PROGRAMS
1. The authority citation for part 222 is revised to read as follows:
Authority: 20 U.S.C. 7701-7714, Pub. L. 114-95, title VII, § 7001, 129 Stat. 1802; unless otherwise noted.2. Amend part 222 by removing the text listed in the “Remove” column and adding in its place the text listed in the “Add” column wherever they appear in part 222:
| Remove | Add |
|---|---|
| section 8002 | section 7002. |
| section 8003 | section 7003. |
| section 8004 | section 7004. |
| section 8005 | section 7005. |
| section 8007 | section 7007. |
| section 8008 | section 7008. |
| section 8009 | section 7009. |
| section 8011 | section 7011. |
| section 8012 | section 7012. |
| section 8013 | section 7013. |
| Title VIII | Title VII. |
| ALJ | Administrative law judge. |
| ESEA | Elementary and Secondary Education Act. |
| IPPs | Indian Policies Procedures. |
| LEA | local educational agency. |
| PPE | per-pupil expenditure. |
| SEA | state educational agency. |
3. In § 222.2 in paragraph (c) amend paragraph (1)(i) of the definition of “Parent employed on Federal property” by revising Example 2 to read as follows:
(c) * * *
Parent employed on Federal property
(1) * * *
(i) * * *
Example 2: Becca works at a privately owned convenience store on leased property on a military installation in Maine. Becca's children attend school at LEA E, a Maine public school district. On a daily basis, including on the survey date, Becca reports to work at the convenience store where she works her entire shift. Becca meets the definition of a “parent employed on Federal property” for LEA E because, although Becca is not a Federal employee, her duty station is the convenience store, which is located on an eligible Federal property within the same State as LEA E. LEA E may claim Becca's children on its Impact Aid application.
4. Section 222.22 is amended by revising paragraph (a) to read as follows:
(a) An LEA with an otherwise approvable application is eligible to receive assistance under section 7002 for a fiscal year only if the LEA meets the requirements in subpart A of these regulations and § 222.21, and is not substantially compensated for the loss in revenue resulting from Federal ownership of real property by increases in revenue accruing to the LEA during the previous fiscal year from Federal activities with respect to the eligible Federal property in the LEA.
5. Revise the heading of Subpart E to read as follows:
Subpart E—Payments for Heavily Impacted Local Educational Agencies Under Section 7003(b)(2) of the Act
6. Revise § 222.61 to read as follows:
(a) Data. Computations and determinations made about an LEA's ( printed page 64272) eligibility under section 7003(b)(2) in §§ 222.61 through 222.66 are based on the LEA's final student, revenue, expenditure, and tax data from the third fiscal year preceding the fiscal year for which it seeks assistance.
(b) Tax rate. (1) Consistent with the requirements in §§ 222.68 through 222.74, the tax rate LEAs used for meeting the applicable tax rate requirement are either:
(i) The generally comparable LEAs that are identified in § 222.74; or
(ii) All LEAs in the applicant's State.
(2) As used in this subpart, the phrase “tax rate for general fund purposes” means “local real property tax rates for current expenditures purposes” as defined in § 222.2. “Current expenditures” is defined in section 7013(4) of the ESEA.
(c) Per-pupil expenditure. For LEAs described in § 222.63(a) and (b), the Secretary computes average per-pupil expenditures by dividing the sum of the total current expenditures for the third preceding fiscal year for those LEAs which the Secretary has determined to be generally comparable, consistent with § 222.74, by the sum of the total ADA of those LEAs for the same fiscal year.
7. Revise § 222.62 to read as follows:
(a) An LEA must annually apply for assistance under section 7003(b)(1) Basic Support Payment by submitting a timely application to the Secretary and providing its state educational agency (SEA) with a copy of the application and must meet all the other application and eligibility requirements in statute and these regulations.
(b) An LEA must note on its annual Impact Aid application that it wishes to be considered for a heavily impacted payment under section 7003(b)(2)(B), and the SEA must submit relevant average per-pupil expenditure information and verify the LEA's tax rate under the process described in § 222.73.
(c) An LEA must meet the eligibility criteria listed in § 222.63 for two consecutive application years and, consistent with § 222.66, will not receive a heavily impacted payment for the first year of eligibility.
8. Revise § 222.63 to read as follows:
A heavily impacted LEA must meet one of the following criteria—
(a) * * *
(1) Enrollment. An enrollment of federally connected children described in section 7003(a)(1) equal to at least 45 percent of the total number of children in average daily attendance in the LEA;
(2) Per-pupil expenditure. (i) For a district that received a basic support payment for fiscal year 2001 under section 8003(b)(2)(B) of the ESEA (as such section was in effect for such fiscal year):
(ii) If total student enrollment is more than 350 students, a per-pupil expenditure that is less than the average per-pupil expenditure of the state in which the agency is located, consistent with § 222.74, or a per-pupil expenditure that is less than the average per-pupil expenditures of all States; or
(iii) If the LEA has a total student enrollment that is less than 350 students, they shall be deemed to have satisfied the per-pupil expenditure per-pupil expenditure requirements; or
(iv) For a district that did not receive a support payment for fiscal year 2015 under section 8003(b)(2)(B) of the ESEA (as such section was in effect for such fiscal year):
(A) If total student enrollment is 350 or more students, a per-pupil expenditure that is less than the State average per-pupil expenditure; or
(B) If total student enrollment is less than 350 students, a per-pupil expenditure that is less than the average per-pupil expenditure of a generally comparable LEA or 3 generally comparable LEAs (whichever average per-pupil expenditure is greater), in the state in which the agency is located, consistent with § 222.74; and
(3) Tax rate. A tax rate for general fund purposes of at least 95 percent of the State average tax rate or the average tax rate of generally comparable LEAs identified under § 222.74.
(b)(1) Enrollment. An enrollment of federally connected children equal to at least 35 percent of total students in ADA in the LEA, including children described in subparagraphs (F) and (G) of section 7003(a)(1);
(2) Per-pupil expenditure. For a district that received a basic support payment for fiscal year 2001 under section 8003(b)(2)(B) of the ESEA (as such section was in effect for such fiscal year):
(i) If total student enrollment is more than 350 students, the LEA must have a per-pupil expenditure that is less than the average per-pupil expenditure of the State in which the agency is located, consistent with § 222.74, or a per-pupil expenditure that is less than the average per-pupil expenditure of all States; or
(ii) If the LEA has a total student enrollment that is less than 350 students, they shall be deemed to have satisfied the per-pupil expenditure requirements;
(3) Tax rate. A tax rate for general fund purposes of at least 95 percent of the State average tax rate or the average tax rate of generally comparable LEAs in the State identified under § 222.74; and
(4) Basic support payments for Local Educational Agencies that were eligible in 2001. Local educational agencies that were eligible to receive a heavily impacted payment for fiscal year 2001.
(c)(1) Enrollment. Had an enrollment of federally connected children described in section 7003(a)(1) that is:
(i) Equal to at least 30 percent of the total number of children in ADA in the LEA; or
(ii) Equal to at least 20 percent of the total number of children in ADA in the LEA, and for the 3 fiscal years proceeding for which this determination was made, the average enrollment of non-federally connected children eligible for a free or reduced price lunch under the Richard B. Russell National School Lunch Act is equal to or at least 65 percent, and received assistance for fiscal year 2017 pursuant to the privatization of military housing under section 7003(b)(2)(G); and
(2) Tax rate. A tax rate for general fund purposes which is not less than 125 percent of the State average tax rate or the average tax rate of generally comparable LEAS identified under § 222.74; and
(3) Historical Payment. Received a heavily impacted payment for a fiscal year prior to fiscal year 2017.
(d)(1) Enrollment. A total student enrollment of at least 25,000 students, of which at least 35 percent are children described in section 7003(a)(1), and at least 3,500 such children are described in subparagraphs (A) and (B) of that section or at least 7,000 such children are described in subparagraph (D) of that section; and
(2) Historical payment. Received a heavily impacted payment for fiscal year 2015 under ESEA section 8003(b)(2)(E), as so in effect.
9. Remove and reserve §§ 222.64 and 222.65.
10. Section 222.66 is revised to read as follows:
(a) Hold-harmless payments. (1) Except as provided in paragraph (a)(2) ( printed page 64273) of this section, an LEA that received a payment as a heavily impacted LEA in the preceding year but fails to meet the eligibility requirements in the following fiscal year will still receive a heavily impacted payment in the first year of ineligibility, based on the number of children in ADA that would be counted for that application if the LEA were eligible.
(2) For an LEA that is required to have a tax rate of at least 95 percent of the average tax rate for general fund purposes, and would be eligible for a heavily impacted payment except that it fails to meet that tax rate requirement for two consecutive fiscal years, the LEA will still receive a heavily impacted payment in the first two years of ineligibility, based on the number of children in ADA that would be counted for that application if the LEA were eligible.
(b) Resumption of Payment. After a heavily impacted LEA becomes ineligible for one or more fiscal years, the LEA may resume eligibility for a heavily impacted payment if it meets all application and eligibility requirements for two consecutive fiscal years. In the first fiscal year the LEA resumes meeting the application and eligibility requirements, it will not receive a heavily impacted payment in that year but instead will receive a basic support payment under section 7003(b)(1) for that year. The LEA will receive a heavily impacted payment in the second consecutive year that it meets application and eligibility requirements.
(c) Example. An LEA applies for a section 7003(b)(2) payment for the first time and meets the applicable eligibility criteria. The LEA does not receive a section 7003(b)(2) payment for federal fiscal year (FFY) 1 and must apply and meet the requirements again in FFY 2 before it can receive a 7003(b)(2) payment ( see § 222.62). If that LEA is later ineligible for a year, it can receive a 7003(b)(2) payment again only if it meets the eligibility criteria for two consecutive years. The LEA is entitled to receive a hold-harmless payment under 7003(b)(2) the first year it is ineligible. If, for example, an LEA becomes ineligible in FFY 3, the LEA will still receive a (b)(2) “hold harmless” payment. If the LEA applies and meets the requirements in FFY 4, the LEA will not receive a payment under 7003(b)(2) but would instead be eligible for a section 7003(b)(1) payment. In FFY 5, if the LEA applies and meets the eligibility requirements for 7003(b)(2), the LEA will receive a section 7003(b)(2) payment. The effects of these requirements on an applicant's status and payments are summarized in the table below. This example is intended to convey typical (b)(2) hold-harmless situations and is not intended to cover anomalies.
| FFY 1 | FFY 2 | FFY 3 | FFY 4 | FFY 5 | |
|---|---|---|---|---|---|
| 7003(b)(2) Eligibility | Yes | Yes | No | Yes | Yes. |
| Payment Type | 7003(b)(1) | 7003(b)(2) | Hold Harmless | 7003(b)(1) | 7003(b)(2). |
11. Amend § 222.68 by revising paragraphs (a) and (c) introductory text to read as follows:
(a) To determine whether a fiscally independent LEA, as defined in § 222.2(c), meets the applicable tax rate requirement in § 222.63, the Secretary compares the LEA's local real property tax rate for current expenditure purposes, as defined in § 222.2(c) (referred to in this part as “tax rate” or “tax rates”), with the tax rates of its generally comparable LEAs.
(c) The Secretary determines that an LEA described in §§ 222.63 meets the applicable tax rate requirement if—
12. Amend § 222.74 by revising paragraph (b) introductory text to read as follows:
(b) For applicant LEAs described in § 222.63(a), (b) or (c), to identify the one or three generally comparable LEAs, the Secretary uses the following procedures:
13. Remove § 222.75.
14. Section 222.94 is amended by revising paragraph (b)(1) to read as follows:
(b) * * *
(1) Disseminate relevant applications, evaluations, program plans and information related to the LEA's education program and activities with sufficient advance notice to allow tribes and parents of Indian children the opportunity to review and make recommendations.
15. Section 222.118 is amended by revising paragraph (d) to read as follows:
(d) Filing requirements. (1) All written submissions must be filed with the hearing examiner by hand-delivery, mail, email, or the electronic filing system maintained by the Office of Hearings and Appeals.
(2) If agreed upon by the parties, a party may serve a document upon the other party by email, or the electronic filing system maintained by the Office of Hearings and Appeals.
(3) The filing date for a written submission under this subpart is the date the document is
(i) Hand-delivered; or
(ii) Mailed; or
(iii) Emailed; or
(iv) Filed with the electronic filing system maintained by the Office of Hearings and Appeals.
(4) A party filing by email is responsible for confirming that a complete and legible copy of the document was timely received by the hearing examiner.
16. Amend § 222.153 by revising paragraph (a) to read as follows:
(a)(1) If it mails the hearing request, address it to the Secretary, c/o Director, Impact Aid Program, U.S. Department of Education, 400 Maryland Avenue SW, Washington, DC 20202-6244;
(2) If it hand-delivers the hearing request, deliver it to the Director, Impact Aid Program, U.S. Department of ( printed page 64274) Education, 400 Maryland Avenue SW, Washington, DC 20202-6244; or
(3) If it emails the hearing request, send it to Impact.Aid@ed.gov.
Note to paragraph (a): The Secretary encourages applicants requesting an IAP hearing to email their requests. Because of enhanced security procedures, building access for non-official staff may be limited. Applicants should be prepared to mail or email their hearing requests if they or their courier is unable to obtain access to the building.
17. Revise § 222.154 to read as follows:
(a) All written submissions under this part must be filed by hand-delivery, mail, email, or the electronic filing system maintained by the Office of Hearings and Appeals.
(b) If agreed upon by the parties, a party may serve a document upon the other party by email or the electronic filing system maintained by the Office of Hearings and Appeals.
(c) The filing date for a written submission under this subpart is the date the document is
(1) Hand-delivered; or
(2) Mailed; or
(3) Emailed; or
(4) Filed with the electronic filing system maintained by the Office of Hearings and Appeals.
(d) A party filing by email is responsible for confirming that a complete and legible copy of the document was timely received by the administrative law judge.
18. Section 222.155 is revised to read as follows:
Administrative hearings under this subpart are held at the offices of the Department in Washington, DC, at a time fixed by the administrative law judge, unless the administrative law judge selects another place based upon the convenience of the parties. Administrative hearings may also be held by telephone or video conference at the discretion of the administrative law judge.
19. Amend § 222.165 by revising paragraphs (c) and (f) to read as follows:
(c) Time and place of hearing. The hearing is held at a time and place fixed by the Secretary or the Secretary's delegate (with due regard to the mutual convenience of the parties). Administrative hearings may also be held by telephone or video conference at the discretion of the administrative law judge.
(f) Filing requirements. (1) Any written submission under this section must be filed by hand-delivery, mail, email, or the electronic filing system maintained by the Office of Hearings and Appeals.
(2) If agreed upon by the parties, service of a document may be made upon the other party by mail, email or the electronic filing system maintained by the Office of Hearings and Appeals.
(3) The filing date for a written submission under this section is the date the document is
(i) Hand-delivered; or
(ii) Mailed; or
(iii) Emailed; or
(iv) Filed with the electronic filing system maintained by the Office of Hearings and firming that a complete and legible copy of the document was received by the Department.
(4) A party filing by email is responsible for confirming that a complete and legible copy of the document was received by the Department.
[FR Doc. 2026-20687 Filed 10-7-26; 8:45 am]
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