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Subpart A-Scope and Definitions § 115.1 Scope.

The regulations in this part govern the granting of financial assistance under the act to applicants within the continental United States, Hawaii, Alaska, Puerto Rico, the Virgin Islands, Wake Island, and Guam.

§ 115.2 Provisions not exhaustive of jurisdiction of the Commissioner.

No provision of this part now or hereafter promulgated shall be deemed exhaustive of the jurisdiction of the Commissioner under the act. The provisions of this part may be modified or further regulations may be issued hereafter as circumstances may warrant. § 115.3

Definitions.

All terms used in this part which are defined in the act and not defined in this section shall have the meaning given to them in the act. As used in this part, and for the purposes of this part and determinations under the act, the following terms shall have the meaning indicated in paragraphs (a) to (j) of this section.

(a) Act. "The act" means Public Law 874, 81st Congress (64 Stat. 1100); as amended by Public Law 248, 83d Congress (67 Stat. 530); Public Law 204, 84th Congress (69 Stat. 433); Public Law 221, 84th Congress (69 Stat. 485); Public Law 382, 84th Congress (69 Stat. 713); title II of Public Law 949, 84th Congress (70 Stat. 970); Public Law 896, 84th Congress (70 Stat. 909); and title II of Public Law 85-620 (72 Stat. 559).

(b) The Commissioner. "The Commissioner" means the Commissioner of Education, Department of Health, Education, and Welfare, or his delegatee.

(c) Applicant. "Applicant" means any local educational agency which files an application for financial assistance under sections 2, 3, or 4 of the act, or any subsection of section 3 or section 4, and this part, but does not include one proposing arrangements under section 6 of the act.

(d) Application. "Application" means Form RSF-1, "Application for Financial Assistance for Current Expenditures for Public Schools in Areas Affected by Federal Activities" properly completed and executed, including amendments thereto, and, to the extent indicated by the applicant, any document or documents in support thereof, filed by or on behalf of

an applicant requesting financial assistance under the act and this part.

(e) Local educational agency. "Local educational agency" means a board of education or other legally constituted local school authority (including, where applicable, a State agency which directly operates and maintains facilities for providing free public education) having exclusive administrative control and direction of free public education, or some phase thereof, in a county, township, independent, or other school district located within a State.

(f) Free public education. “Free public education" means education which is provided at public expense, under public supervision and direction, and without tuition charge, and which is provided as elementary or secondary school education in the applicable State. Elementary education may include kindergarten education meeting the above criteria.

(g) Financial assistance. "Financial assistance" means the payments made to an applicant under section 5(b) of the act by the Department of the Treasury upon authorization of the Commissioner.

(h) Entitlement. "Entitlement" means the amount of assistance which, if the appropriations for a fiscal year were adequate to pay all claims, an applicant under sections 2, 3, or 4 would receive under the formulae of the act.

(i) Generally comparable school districts. "Generally comparable school districts" are those so determined by the Commissioner, after consultation with the State educational agency and the applicant.

"Arrangements"

(j) Arrangements. means the agreement entered into between the Commissioner and a local educational agency or a Federal department or agency for the provision of free public education under section 6 of the act. Subpart B-Applications

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Congress, as amended,” an application for financial assistance, showing basis for entitlement under the terms and conditions of the act.

§ 115.11 Final date for filing applications for financial assistance from funds appropriated for fiscal year 1959 and thereafter.

(a) The final date for filing applications for financial assistance under sections 2, 3, or 4 of the act, or under any subsection thereof, and this part, out of funds appropriate for any fiscal year shall be March 31st of such fiscal year for all applicants; except that, when ever such date shall fall on a Saturday, Sunday, or other legal holiday, the final date for filing applications shall be the next succeeding week day. An application must be received by the Commissioner, or under cover postmarked, on or before the final filing date after transmittal through and certification by the State educational agency. The applicant is responsible for obtaining the certification of the State educational agency and for securing transmittal of the application to the Commissioner of Education by the final filing date. The applicant, in order to give the State educational agency time in which it may process the application, should file its application with the State educational agency by March 1 of the fiscal year. The final date for filing the application with the Commissioner is subject to the following exceptions:

(1) With respect to an applicant whose eligibility for financial assistance under this act is established by an activity of the United States initiated or reactivated, or by the acquisition of Federal property, during the fiscal year, the filing date shall be extended 60 days beyond the date of such occurrence establishing eligibility;

(2) With respect to an applicant whose eligibility for financial assistance is established under or pursuant to an amendment to the act, adopted during the fiscal year, the filing date shall be extended 60 days beyond the date of such amendment;

(3) With respect to a local educational agency which, during the fiscal year, acquired administrative control and direction of free public education in all or any portion of an area of a previously existing local educational agency under the circumstances described in § 115.20 (b), the filing date shall be extended to

the extent necessary to allow sixty days beyond the effective date of the change in district organization for the filing of an application under sections 3 and 4 of the act: Provided, That, for the purposes of this paragraph, where an application is filed directly with the Commissioner within the applicable filing date, and a copy is filed within such time with the State educational agency, the application, for good cause shown, will be considered to be timely filed if within fifteen days after the applicable filing date the applicant obtains and files with the Commissioner approval, verification and certification of the application by the State educational agency: And provided further, That an application timely filed may be amended to obtain additional or alternative financial assistance based upon a Federal activity which has been initiated or reactivated, or upon property which has been acquired by the United States after the application was filed, or upon an amendment to the act enacted after the application was filed, or upon a determination of the Commissioner first communicated to the applicant that property is or is not "Federal property" under the act, if such amendment is made within 60 days of the occurrence or communication of the Commissioner's ruling to the applicant.

(b) After the applicable filing date an application cannot be amended or modified to assert a basis for financial assistance not clearly stated and supported by data in the application.

§ 115.12 Applications under sections 2, 3, and 4 received after deadline not considered for payment.

Applications under sections 2, 3, and 4 of the act or any subsection thereof for fiscal year 1959, and for fiscal years thereafter, received by the Commissioner after the filing dates prescribed by this part will not be considered for payment. § 115.13 Notification to applicants.

Each applicant will be notified of the initial approval or disapproval of its application under one or more of the sections or subsections of the act and this part, and the estimated amount of payment, if any, to be made.

Subpart C-Payment

§ 115.20 Changes in boundaries, classification and governing authority of applicants.

(a) If an applicant is party to any merger, consolidation, annexation, de

consolidation, or other similar action which may affect its boundaries, identity, governing authority, classification, or control, the Commissioner shall be notified as soon as practicable of the effective date of such action for all purposes, the extent and character thereof, and the legal authority under which the action was or is to be effected.

(b) If, as a result of a change in district organization through merger, annexation, consolidation, or other similar action, effective within the fiscal year covered by the application and prior to the close of the regular school term of such year, a local educational agency which had timely filed an application ceases to be a legally constituted local educational agency, it shall not be entitled to any payments under section 3 or 4 of the act for such fiscal year, except as provided in paragraph (c) of this section. However, except as provided in § 115.21 (c), a local educational agency which assumes administrative control and direction of free public education in all or a portion of the area of such previously existing applicant prior to the close of the regular school term of such previously existing applicant, shall, provided that (if not already an applicant under the section involved) it files an application in accordance with § 115.11 (a) (3), and subject to appropriate adjustment on account of payments made to such previously existing local educational agency, have its eligibility under section 3(c) (2) or (3), or section 4(a) (1) and the amount of its entitlement for the entire fiscal year, insofar as such eligibility or entitlement relates to the number of federally connected children, determined in accordance with either of the following, whichever is more favorable to it:

(1) On the basis of the entire area under its jurisdiction on the last day of such year; or

(2) On the basis only of the area acquired by the local educational agency from the previously existing local educational agency: Provided, however, That this latter basis may be used (i) for an application under section 3 only if a favorable finding has been made (or would have been made in due course but for such change in district organization) on the basis of the estimates required under section 3(c) (2) or (3), with respect to the previously existing agency, and (ii) for an application under section 4 only if such favorable finding has been

made (or would have been made in due course but for such change in district organization) under section 4(a) (1).

(c) Any payment made to a local educational agency prior to the date on which the first sentence of paragraph (b) of this section became applicable to it, need not be repaid to the United States to the extent that (1) it is accounted for by the adjustments made in the entitlements of any successor applicant local educational agencies pursuant to paragraph (b) of this section or paragraph (c) of 115.21 and (2) any balance remaining thereafter is found by the Commissioner not to be in excess of the amount to which the pre-existing local educational agency would have become entitled on the basis of the number of federally connected children not covered by any other application, to whom free public education was provided by the previously existing local educational agency or by any successor non-applicant local educational agency.

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(a) Pursuant to the exception provision of section 3 (c) (2) (B) of the act, an applicant is not required to meet the 3 percent eligibility requirement of such section (or the 6 percent eligibility requirement specified in section 3 (c) (3), as the case may be) if in either of the two years preceding the year of application the applicant met such percentage requirement and received a net payment under section 3 of the act. In the second year following the year in which the applicant last met the percentage requirement and received a payment, however, the net payment under section 3 shall be reduced by 50 percent.

(b) If an applicant local educational agency was not in existence in either one or both of the two preceding fiscal years, such agency may nevertheless receive the benefit of the provisions of paragraph (a) of this section provided such agency is comprised only of territory which was formerly included in a predecessor agency which met (or predecessor agencies all of which met) the percentage eligibility requirement and received a net payment under section 3 for the same fiscal year of the two fiscal year periods preceding the fiscal year of application.

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(c) If a local educational agency, which had timely filed an application under section 3 and was entitled to payment by virtue of paragraph (a) or (b) of this section, ceases to be a legally constituted local educational agency as a result of district reorganization through merger, annexation, consolidation, other similar action, effective prior to the close of the regular school term within the fiscal year covered by the application (thereby becoming subject to the provisions of § 115.20 (b)), a successor local educational agency which assumes administrative control and direction of free public education in all or a portion of the area of such previously existing applicant prior to the close of the regular school term of such previously existing applicant, shall, provided that (unless already an applicant under section 3) it files an application in accordance with § 115.11(a)(3), and subject to appropriate adjustment on account of payments made to such previously existing local educational agency, be entitled, if it so desires, to have its application processed on the basis of the area acquired from the previously existing local educational agency, and on the basis of the rights of such agency, without regard to the 3 percent requirement.

[24 F.R. 60, Jan. 3, 1959, as amended at 25 F.R. 2532, Mar. 25, 1960]

§ 115.22 Election provision of section 4 (c).

Pursuant to section 4 (c) of the act, a local educational agency may elect to count for eligibility and payment under section 4 (a) the entire increase in the number of children in average daily attendance at its schools during the fiscal year who are otherwise eligible to be counted under section 3. Such election may be made only if an application under section 4 is timely filed on Form RSF-1 in accordance with § 115.11. Such election is not subject to change after, and shall become final upon, the date of final payment for the fiscal year involved.

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duced or increased, as the case may be, by any sum by which the Commissioner finds that the amount paid to the applicant for any prior period, whether or not within the fiscal year, was greater or less than the amount which should have been paid for such prior period.

§ 115.24 Payments of financial assistance under sections 2, 3, and 4 from fiscal year appropriations.

As prescribed by section 5 (c) of the act, if the funds appropriated for a fiscal year are not sufficient to pay in full the total amounts which all applicants whose applications have been considered for payment pursuant to this part are entitled to receive under sections 2, 3, and 4 of the act or any subsection thereof for such fiscal year, the Commissioner will reduce the amounts which he certifies under section 5 (b) of the act for such fiscal year for payment to each such applicant by the percentage by which the funds so appropriated are less than the total necessary to pay such applicants the full amount which they are entitled to receive under the act and this part. Subpart D-Generally Comparable Districts; Local Contribution Rate § 115.30 Determination of generally comparable school districts.

(a) The Commissioner may determine for a fiscal year the school districts generally comparable to that of an applicant (1) by classification of all school districts in a State into groups based upon a recommendation by the State educational agency made with the consent of all applicants in the State; or (2) by a selection of individual school districts. If the Commissioner has determined that group classifications shall be used in a State no departure therefrom will be permitted in that State for the fiscal year.

(b) The State educational agency for any fiscal year, with the consent of all applicants in the State, may recommend to the Commissioner classification of all school districts in the State into generally comparable groups. The State educational agency should initially establish groups based upon legal classifications or justify the use of another factor as the principal factor. Unless the State educational agency can establish to the satisfaction of the Commissioner that the consideration of additional factors will not result in greater

comparability, division into further groups will be required and for the purposes of such further division consideration shall be given to grade level, size as measured by total average daily attendance, geographical size, density of population, industrialization, current revenues, aggregate value of property, and any other relevant factors. In making its recommendations to the Commissioner, the State educational agency will furnish such information as he may require, including information justifying the factors used and financial and attendance data necessary for the computation of per pupil expenditure and local contribution rate. On the basis of the recommendation by the State educational agency, the data furnished and other information which he may obtain, and applying the above criteria, the Commissioner shall determine whether all school districts in the State shall be classified into generally comparable groups and, if so, shall determine such groups.

(c) In a State for which group classifications of generally comparable school districts are not established pursuant to paragraph (b) of this section, an applicant must submit to the Commissioner in its application the names of districts, preferably five in number which it deems generally comparable to the school district of the applicant with all data requested by the Commissioner The selection by the applicant of such school districts shall be based upon the criteria set forth in paragraph (b) of this section and shall be submitted through the State educational agency for review and comment. The Commissioner's determination will be based upon such criteria and any other relevant factors. The financial, attendance, and other data of the selected districts must be sufficient to justify the selection of such districts as generally comparable and to determine the per pupil expenditures and the local contribution rates in such districts. On the basis of information and data furnished by the applicant, or information otherwise obtained, and applying the above criteria, the Commissioner shall select those school districts, which in number and identity may be different from those submitted by the applicant, which he determines to be generally comparable to the school district of the applicant.

§ 115.31 Computation of local contribution rate in continental United States.

The local contribution rate for an applicant in the continental United States for any fiscal year shall be computed by the Commissioner, after consultation with the State educational agency and the applicant, in the following manner: He shall divide (a) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which he is making the computation, which the local educational agencies of the school districts, determined to be generally comparable to that of the applicant, made from revenues derived from local sources, by (b) the aggregate number of children in average daily attendance to whom such agencies provided free public education during such second preceding fiscal year. The local contribution rate shall be an amount equal to the quotient so obtained.

§ 115.32 Increase in or special local contribution rate.

(a) Notwithstanding the provision in § 115.31 and in accordance with the provision in section 3 (d) of the act, if the current expenditures in those school districts which the Commissioner has determined to be generally comparable to that of the applicant nevertheless in his judgment are not reasonably comparable for the purposes of section 3 (d) of the act because of unusual geographical factors which affect the current expenditures necessary to maintain in the school district of the applicant a level of education equivalent to that maintained in such other districts, the Commissioner may increase the local contribution rate for such applicant by the amount he determines will compensate the applicant for the increase in current expenditures necessitated by such unusual geographical factors.

(b) In no event shall the local contribution rate for any local educational agency in any State in the continental United States for any fiscal year be less than (1) 50 per centum of the average per pupil expenditure in such State or (2) 50 per centum of the average per pupil expenditure in the continental United States, but not to exceed the average per pupil expenditure in the State. For the purposes of the preceding sentence the "average per pupil expenditure" in a State, or in the continental United States, shall be the aggre

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