A bill to amend Public Law 874, 81st Congress, relating to impact aid payments.

Amends Federal law relating to impact aid payments.

Revises the title and policy declaration to use the term reimbursement (rather than assistance) with respect to local educational agencies in areas affected by Federal activity.

Refers to school membership (rather than attendance) throughout the Act.

Revises formulas for determining the amount of payments to local educational agencies.

Provides that certain increases in such payments shall be sufficient to allow the school district to have an operating cost no greater than the State average or the average of comparable school districts in the State.

Provides that a reasonable tax effort has been made if the agency receives at least 80 percent of the taxes levied which would have been received if the applicant district had an operational tax rate equal to the average of comparable districts.

Reduces certain payments to an agency by the percentage of the difference that the actual taxes levied of such agency are of the taxes that would have been levied if the applicant district had an operational tax rate equal to the average of comparable districts or State average.

Provides that, for FY 1988 and for each fiscal year thereafter, the local contribution rate for agencies whose school district boundaries are coterminous with the boundaries of a military installation shall not be less than 70 percent of the average per pupil expenditure in all States during the second preceding year prior to the current fiscal year.

Provides that any agency eligible for an increase under certain provisions shall receive 100 percent of the amount to which it is entitled under other specified provisions.

Provides for rounding of payments to the nearest whole dollar.

Changes the formulas determining how the Secretary of Education shall allocate among various categories of local educational agencies additional funds left over after the initial allocation.

Revises provisions concerning State treatment of Federal impact aid payments with respect to a local educational agency's eligibility for, and the amount of, State aid. Requires that the State formula ensure that the local agency will have sufficient funds available to expand at or above the State average per pupil expenditure or the average per pupil expenditure for comparable districts, whichever is greater. Provides that specified types of impact aid shall not be taken into consideration as local resources by the State.

Directs the Secretary, for any fiscal year following FY 1987, to allocate to any local educational agency which received certain payments in FY 1987 an amount which is not less than the product of 100 percent of the year pupil amount paid to such agency in FY 1987 or FY 1986, whichever is higher, and the number of children in current average daily membership.

Permits a local educational agency receiving funds for impact aid payments to agencies also to receive funds for education of children where local agencies cannot supply facilities.

Revises provisions relating to Federal acquisition of property within a school district to require that the amount which a local educational agency is entitled to receive under such provisions for any fiscal year be at least as much as the agency received for FY 1983, except where Federal activity has declined since 1983.