	Introduction

The Impact Aid program, administered by the U.S. Department of Education (ED), was originally established in 1950 by P.L. 81-815 and P.L. 81-874, 15 years prior to the enactment of the Elementary and Secondary Education Act (ESEA). Impact Aid compensates local educational agencies (LEAs) for a "substantial and continuing financial burden" resulting from federal activities. These activities include federal ownership of certain lands, as well as the enrollments in LEAs of children whose parents work or live on federal property and children living on Indian lands. The federal government provides compensation because LEAs are unable to collect property or other taxes from these individuals (e.g., members of the uniformed services living on military bases) or their employers, even though the LEAs are obligated to provide free public education to their children. Thus, Impact Aid is intended to compensate LEAs, in part, for the resulting loss of tax revenue. In addition to the Impact Aid programs administered by ED, a smaller set of programs administered by the Department of Defense (DOD) are often referred to as the "DOD Impact Aid" programs. These two programs include one that provides supplemental aid to LEAs serving children with a parent on active duty in the uniformed services, and one that provides assistance to LEAs serving children with severe disabilities with a parent on active duty in the uniformed services. Overview of FY2018 Impact Aid Payments5

ESEA Title VII authorizes several types of Impact Aid payments. These are children who reside with a parent who is on active duty in the uniformed services living on or off federal property, with a parent who is an accredited foreign military officer living on or off federal property, on Indian lands, in low-rent public housing, or with a parent who is a civilian working or living on federal property. Section 7003(b) authorizes basic support payments (BSPs) for federally connected children. 4. Actual payments are reduced if appropriations are insufficient to make maximum grant payments. Types of Federally Connected Children and Their Formula Weights

 Table 2 details the categories of federally connected children and the weights that the act assigns to them. 5. The authorizations of appropriations for these programs have been lower than those provided for the Impact Aid programs administered by ED.
The Impact Aid program, administered by the U.S. Department of Education (ED) and authorized by Title VII of the Elementary and Secondary Education Act (ESEA), was originally established in 1950 by P.L. 81-815 and P.L. 81-874, 15 years prior to the enactment of the ESEA. Impact Aid compensates local educational agencies (LEAs) for a "substantial and continuing financial burden" resulting from federal activities. These activities include federal ownership of certain lands, as well as the enrollments in LEAs of children whose parents work or live on federal property and children living on Indian lands. The federal government provides compensation because LEAs are unable to collect property or other taxes from these individuals (e.g., members of the uniformed services living on military bases) or their employers, even though the LEAs are obligated to provide free public education to their children. Thus, Impact Aid is intended to compensate LEAs, in part, for the resulting loss of tax revenue.
The Impact Aid program authorizes several types of payments, as detailed in the table below.
Overall, the Impact Aid program received about $1.4 billion in FY2019. The largest Impact Aid payment is basic support payments (BSPs) for federally connected children (Section 7003(b)), accounting for nearly 90% of the total appropriation. Federally connected children are those who reside with a parent who is a member of the uniformed services living on or off federal property, with a parent who is an accredited foreign military officer living on or off federal property, on Indian lands, in low-rent public housing, or with a parent who is a civilian working or living on federal property. BSPs are allocated directly to LEAs based on a formula that uses weights assigned to different categories of federally connected children, cost factors to determine maximum payment amounts, and provisions to determine payment amounts when appropriations are insufficient to provide maximum payments.
In addition to the Impact Aid programs administered by ED, a smaller set of programs administered by the Department of Defense (DOD) are often referred to as the "DOD Impact Aid" programs. These two programs include one that provides supplemental aid to LEAs serving military children, and one that provides assistance to LEAs serving military children with severe disabilities. For FY2018, total appropriations for these programs were $35 million ($30 million for the first program and $5 million for the second).