---
kind: "section"
citation: "20 U.S.C. § 7709"
title: "20"
title_heading: "Education"
number: "7709"
heading: "State consideration of payments in providing State aid"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/20/7709"
units:
  - "Chapter 70 — Strengthening and Improvement of Elementary and Secondary Schools"
  - "Subchapter VII — Impact Aid"
---

# §7709. State consideration of payments in providing State aid

- (a) **General prohibition—** Except as provided in [subsection (b)](#b), a [State](/usc/20/7171.md?p=b-6) may not—
  - (1) consider payments under this subchapter in determining for any fiscal year—
    - (A) the eligibility of a [local educational agency](/usc/20/7713.md?p=9-A) for [State](/usc/20/7171.md?p=b-6) aid for [free public education](/usc/20/7713.md?p=6); or
    - (B) the amount of such aid; or
  - (2) make such aid available to [local educational agencies](/usc/20/7713.md?p=9-A) in a manner that results in less [State](/usc/20/7171.md?p=b-6) aid to any [local educational agency](/usc/20/7713.md?p=9-A) that is eligible for such payment than such agency would receive if such agency were not so eligible.
- (b) **State equalization plans—**
  - (1) **In general—** A [State](/usc/20/7171.md?p=b-6) may reduce [State](/usc/20/7171.md?p=b-6) aid to a [local educational agency](/usc/20/7713.md?p=9-A) that receives a payment under section [7702](/usc/20/7702.md) or [7703(b)](/usc/20/7703.md?p=b) of this title (except the amount calculated in excess of 1.0 under [section 7703(a)(2)(B) of this title](/usc/20/7703.md?p=a-2-B) and, with respect to a [local educational agency](/usc/20/7713.md?p=9-A) that receives a payment under [section 7703(b)(2) of this title](/usc/20/7703.md?p=b-2), the amount in excess of the amount that the agency would receive if the agency were deemed to be an agency eligible to receive a payment under [section 7703(b)(1) of this title](/usc/20/7703.md?p=b-1) and not [section 7703(b)(2) of this title](/usc/20/7703.md?p=b-2)) for any fiscal year if the [Secretary](/usc/20/7801.md?p=46) determines, and certifies under [subsection (c)(3)(A)](#c-3-A), that the [State](/usc/20/7171.md?p=b-6) has in effect a program of [State](/usc/20/7171.md?p=b-6) aid that equalizes expenditures for [free public education](/usc/20/7713.md?p=6) among [local educational agencies](/usc/20/7713.md?p=9-A) in the [State](/usc/20/7171.md?p=b-6).
  - (2) **Computation—**
    - (A) **In general—** For purposes of [paragraph (1)](#b-1), a program of [State](/usc/20/7171.md?p=b-6) aid equalizes expenditures among [local educational agencies](/usc/20/7713.md?p=9-A) if, in the second fiscal year preceding the fiscal year for which the determination is made, the amount of per-pupil expenditures made by, or per-pupil revenues available to, the [local educational agency](/usc/20/7713.md?p=9-A) in the [State](/usc/20/7171.md?p=b-6) with the highest such per-pupil expenditures or revenues did not exceed the amount of such per-pupil expenditures made by, or per-pupil revenues available to, the [local educational agency](/usc/20/7713.md?p=9-A) in the [State](/usc/20/7171.md?p=b-6) with the lowest such expenditures or revenues by more than 25 percent.
    - (B) **Other factors—** In making a determination under this subsection, the [Secretary](/usc/20/7801.md?p=46) shall—
      - (i) disregard [local educational agencies](/usc/20/7713.md?p=9-A) with per-pupil expenditures or revenues above the 95th percentile or below the 5th percentile of such expenditures or revenues in the [State](/usc/20/7171.md?p=b-6); and
      - (ii) take into account the extent to which a program of [State](/usc/20/7171.md?p=b-6) aid reflects the additional cost of providing [free public education](/usc/20/7713.md?p=6) in particular types of [local educational agencies](/usc/20/7713.md?p=9-A), such as those that are geographically isolated, or to particular types of students, such as children with disabilities.
  - (3) **Exception—** Notwithstanding [paragraph (2)](#b-2), if the [Secretary](/usc/20/7801.md?p=46) determines that the [State](/usc/20/7171.md?p=b-6) has substantially revised its program of [State](/usc/20/7171.md?p=b-6) aid, the [Secretary](/usc/20/7801.md?p=46) may certify such program for any fiscal year only if—
    - (A) the [Secretary](/usc/20/7801.md?p=46) determines, on the basis of projected data, that the [State](/usc/20/7171.md?p=b-6)’s program will meet the disparity standard described in [paragraph (2)](#b-2) for the fiscal year for which the determination is made; and
    - (B) the [State](/usc/20/7171.md?p=b-6) provides an assurance to the [Secretary](/usc/20/7801.md?p=46) that, if final data do not demonstrate that the [State](/usc/20/7171.md?p=b-6)’s program met such standard for the fiscal year for which the determination is made, the [State](/usc/20/7171.md?p=b-6) will pay to each affected [local educational agency](/usc/20/7713.md?p=9-A) the amount by which the [State](/usc/20/7171.md?p=b-6) reduced [State](/usc/20/7171.md?p=b-6) aid to the [local educational agency](/usc/20/7713.md?p=9-A).
- (c) **Procedures for review of State equalization plans—**
  - (1) **Written notice—**
    - (A) **In general—** Any [State](/usc/20/7171.md?p=b-6) that wishes to consider payments described in [subsection (b)(1)](#b-1) in providing [State](/usc/20/7171.md?p=b-6) aid to [local educational agencies](/usc/20/7713.md?p=9-A) shall submit to the [Secretary](/usc/20/7801.md?p=46), not later than 120 days before the beginning of the [State](/usc/20/7171.md?p=b-6)’s fiscal year, a written notice of such [State](/usc/20/7171.md?p=b-6)’s intention to do so.
    - (B) **Contents—** Such notice shall be in the form that the [Secretary](/usc/20/7801.md?p=46) requires, including evidence that the [State](/usc/20/7171.md?p=b-6) has notified each [local educational agency](/usc/20/7713.md?p=9-A) in the [State](/usc/20/7171.md?p=b-6) of such [State](/usc/20/7171.md?p=b-6)’s intention to consider such payments in providing [State](/usc/20/7171.md?p=b-6) aid.
  - (2) **Opportunity to present views—** Before making a determination under [subsection (b)](#b), the [Secretary](/usc/20/7801.md?p=46) shall afford the [State](/usc/20/7171.md?p=b-6), and [local educational agencies](/usc/20/7713.md?p=9-A) in the [State](/usc/20/7171.md?p=b-6), an opportunity to present their views.
  - (3) **Qualification procedures—** If the [Secretary](/usc/20/7801.md?p=46) determines that a program of [State](/usc/20/7171.md?p=b-6) aid qualifies under [subsection (b)](#b), the [Secretary](/usc/20/7801.md?p=46) shall—
    - (A) certify the program and so notify the [State](/usc/20/7171.md?p=b-6); and
    - (B) afford an opportunity for a hearing, in accordance with [section 7711(a) of this title](/usc/20/7711.md?p=a), to any [local educational agency](/usc/20/7713.md?p=9-A) adversely affected by such certification.
  - (4) **Nonqualification procedures—** If the [Secretary](/usc/20/7801.md?p=46) determines that a program of [State](/usc/20/7171.md?p=b-6) aid does not qualify under [subsection (b)](#b), the [Secretary](/usc/20/7801.md?p=46) shall—
    - (A) so notify the [State](/usc/20/7171.md?p=b-6); and
    - (B) afford an opportunity for a hearing, in accordance with [section 7711(a) of this title](/usc/20/7711.md?p=a), to the [State](/usc/20/7171.md?p=b-6), and to any [local educational agency](/usc/20/7713.md?p=9-A) adversely affected by such determination.
- (d) **Treatment of State aid—**
  - (1) **In general—** If a [State](/usc/20/7171.md?p=b-6) has in effect a program of [State](/usc/20/7171.md?p=b-6) aid for [free public education](/usc/20/7713.md?p=6) for any fiscal year, which is designed to equalize expenditures for [free public education](/usc/20/7713.md?p=6) among the [local educational agencies](/usc/20/7713.md?p=9-A) of that [State](/usc/20/7171.md?p=b-6), payments under this subchapter for any fiscal year may be taken into consideration by such [State](/usc/20/7171.md?p=b-6) in determining the relative—
    - (A) financial resources available to [local educational agencies](/usc/20/7713.md?p=9-A) in that [State](/usc/20/7171.md?p=b-6); and
    - (B) financial need of such agencies for the provision of [free public education](/usc/20/7713.md?p=6) for children served by such agency, except that a [State](/usc/20/7171.md?p=b-6) may consider as local resources funds received under this subchapter only in proportion to the share that local tax revenues covered under a [State](/usc/20/7171.md?p=b-6) equalization program are of total local tax revenues.
  - (2) **Prohibition—** A [State](/usc/20/7171.md?p=b-6) may not take into consideration payments under this subchapter before such [State](/usc/20/7171.md?p=b-6)’s program of [State](/usc/20/7171.md?p=b-6) aid has been certified by the [Secretary](/usc/20/7801.md?p=46) under [subsection (c)(3)](#c-3).
- (e) **Remedies for State violations—**
  - (1) **In general—** The [Secretary](/usc/20/7801.md?p=46) or any aggrieved [local educational agency](/usc/20/7713.md?p=9-A) may, not earlier than 150 days after an adverse determination by the [Secretary](/usc/20/7801.md?p=46) against a [State](/usc/20/7171.md?p=b-6) for violation of subsections [(a)](#a) or [(d)(2)](#d-2) or for failure to carry out an assurance under [subsection (b)(3)(B)](#b-3-B), and if an administrative proceeding has not been concluded within such time, bring an action in a United States district court against such [State](/usc/20/7171.md?p=b-6) for such violations or failure.
  - (2) **Immunity—** A [State](/usc/20/7171.md?p=b-6) shall not be immune under the 11th amendment to the Constitution of the United States from an action described in [paragraph (1)](#e-1).
  - (3) **Relief—** The court shall grant such relief as the court determines is appropriate.

## Source credit

(Pub. L. 89–10, title VII, § 7009, formerly title VIII, § 8009, as added Pub. L. 103–382, title I, § 101, Oct. 20, 1994, 108 Stat. 3764; amended Pub. L. 104–195, § 10, Sept. 16, 1996, 110 Stat. 2384; Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812], Oct. 30, 2000, 114 Stat. 1654, 1654A–386; Pub. L. 107–110, title VIII, § 804, Jan. 8, 2002, 115 Stat. 1956; renumbered title VII, § 7009, and amended Pub. L. 114–95, title VII, §§ 7001(c)(2), (d)(1), (7), (8), 7009, Dec. 10, 2015, 129 Stat. 2074, 2087.)

## Notes

### Editorial Notes

### Amendments

2015—Subsec. (b)(1). Pub. L. 114–95, § 7009(2), made technical amendments to references in original act which appear in text as references to sections 7703(b) and 7703(a)(2)(B) of this title.

Pub. L. 114–95, § 7001(d)(8), made technical amendment to references in original act which appear in two places in text as references to section 7703(b)(2) of this title.

Pub. L. 114–95, § 7001(d)(7), made technical amendment to reference in original act which appears in text as reference to section 7703(b)(1) of this title.

Pub. L. 114–95, § 7001(d)(1), made technical amendment to reference in original act which appears in text as reference to section 7702 of this title.

Subsec. (c)(1)(B). Pub. L. 114–95, § 7009(3), substituted “that the Secretary requires” for “and contain the information the Secretary requires”.

Subsec. (c)(3)(B), (4)(B). Pub. L. 114–95, § 7009(1), made technical amendment to reference in original act which appears in text as reference to section 7711(a) of this title.

2002—Subsec. (b)(1). Pub. L. 107–110 inserted “and, with respect to a local educational agency that receives a payment under section 7703(b)(2) of this title, the amount in excess of the amount that the agency would receive if the agency were deemed to be an agency eligible to receive a payment under section 7703(b)(1) of this title and not section 7703(b)(2) of this title” after “section 7703(a)(2)(B) of this title”.

2000—Subsec. (a)(1). Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812(1)], struck out “or under the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such Act was in effect on the day preceding October 20, 1994)” after “under this subchapter” in introductory provisions.

Subsec. (b)(1). Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812(2)], amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “A State may reduce State aid to a local educational agency that receives a payment under section 7702 or 7703(b) of this title (except the amount calculated in excess of 1.0 under subparagraph (B) of section 7703(a)(2) of this title) or under the Act of September 30, 1950 (Public Law 874, 81st Congress) as such Act was in effect on the day preceding October 20, 1994 (other than an increase in payments described in paragraphs (2)(B), (2)(C), (2)(D), or (3)(B)(ii) of section 3(d) of such Act of September 30, 1950) for any fiscal year if the Secretary determines, and certifies under subsection (c)(3)(A) of this section, that such State has in effect a program of State aid that equalizes expenditures for free public education among local educational agencies in such State.”

Subsec. (d). Pub. L. 106–398, § 1 [[div. A], title XVIII, § 1812(3)], struck out “or under the Act of September 30, 1950 (Public Law 874, 81st Congress) (as such Act was in effect on the day preceding October 20, 1994)” after “under this subchapter” wherever appearing.

1996—Subsec. (b)(2)(A). Pub. L. 104–195 substituted “more than 25 percent” for “more than—

“(i) 25 percent for fiscal year 1995, 1996, or 1997; and

“(ii) 20 percent for fiscal year 1998 or 1999”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2015 Amendment

Amendment by Pub. L. 114–95 effective Dec. 10, 2015, and effective with respect to appropriations for use under this subchapter beginning fiscal year 2017, except as otherwise provided in such amendment, see section 5 of Pub. L. 114–95, set out as a note under section 6301 of this title.

### Effective Date of 2002 Amendment

Amendment by Pub. L. 107–110 effective Jan. 8, 2002, and effective with respect to appropriations for use under this subchapter for fiscal year 2002, see section 5 of Pub. L. 107–110, set out as an Effective Date note under section 6301 of this title.