34 C.F.R. Subpart B—Payments for Federal Property Under Section 8002 of the Act
Title 34 - Education
In addition to the terms referenced or defined in §222.2, the following definitions apply to this subpart: Acquisition or acquired by the United States. (1) The term means— (i) The receipt or taking by the United States of ownership in fee simple of real property by condemnation, exchange, gift, purchase, transfer, or other arrangement; (ii) The receipt by the United States of real property as trustee for the benefit of individual Indians or Indian tribes; or (iii) The imposition by the United States of restrictions on sale, transfer, or exchange of real property held by individual Indians or Indian tribes. (2) The definition of “acquisition” in 34 CFR 77.1(c) (Definitions that Apply to Department Regulations) of this title does not apply to this subpart. Assessed value. For the purpose of determining eligibility under section 8002(a)(1) and §222.21, the following definition applies: (1) The term means the value that is assigned to real property, for the purpose of generating local real property tax revenues for current expenditures (as defined in section 8013 of the Act), by a State or local official who is legally authorized to determine that assessed value. (2) The term does not include— (i) A value assigned to tax-exempt real property; (ii) A value assigned to real property for the purpose of generating other types of revenues, such as payments in lieu of taxes (PILOTs); (iii) Fair market value, or a percentage of fair market value, of real property unless that value was actually used to generate local real property tax revenues for current expenditures (as defined in section 8013); or (iv) A value assigned to real property in a condemnation or other court proceeding, or a percentage of that value, unless that value was actually used to generate local real property tax revenues for current expenditures (as defined in section 8013). Eligible Federal property. (1) The term means “Federal property” as defined in §222.2(c) for section 8002, which meets the following additional requirements: (i) The United States has acquired the Federal property since 1938; and (ii) The Federal property was not acquired by exchange for other Federal property that the United States owned within the school district before 1939. (2) In addition, for local educational agencies (LEAs) that are eligible under §222.21(a)(2), the term also means land acquired by the United States Forest Service between 1915 and 1990. (Authority: 20 U.S.C. 7702) (a) For an LEA with an otherwise approvable application to be eligible to receive financial assistance under section 8002, the LEA must meet the requirements in subpart A of these regulations and §222.22, and, unless otherwise provided by statute as meeting the requirements in section 8002(a)(1)(C), document— (1) That the United States owns or has acquired “eligible Federal property” within the LEA, that has an aggregate assessed value of 10 percent or more of the assessed value of— (i) All real property in that LEA, based upon the assessed values of the eligible Federal property and of all real property (including that Federal property) on the date or dates of acquisition of the eligible Federal property; or (ii) All real property in the LEA as assessed in the first year preceding or succeeding acquisition, whichever is greater, only if— (A) The assessment of all real property in the LEA is not made at the same time or times that the Federal property was so acquired and assessed; and (B) State law requires an assessment be made of property so acquired; or (2)(i) That, as demonstrated by written evidence from the United States Forest Service satisfactory to the Secretary, the LEA contains between 20,000 and 60,000 acres of land that has been acquired by the United States Forest Service between 1915 and 1990; and (ii) That the LEA serves a county chartered by State law in 1875 or 1890. (b) “Federal property” described in section 8002(d) (certain transferred property) is considered to be owned by the United States for the purpose of paragraph (a) of this section. (c) If, during any fiscal year, the United States sells, transfers, is otherwise divested of ownership of, or relinquishes an interest in or restriction on, eligible Federal property, the Secretary redetermines the LEA's eligibility for the following fiscal year, based upon the remaining eligible Federal property, in accordance with paragraph (a) of this section. This paragraph does not apply to a transfer of real property by the United States described in section 8002(d). (d) Except as provided under paragraph (a)(2) of this section, the Secretary's determinations and redeterminations of eligibility under this section are based on the following documents: (1) For a new section 8002 applicant or newly acquired eligible Federal property, only upon— (i) Original records as of the time(s) of Federal acquisition of real property, prepared by a legally authorized official, documenting the assessed value of that real property; or (ii) Facsimiles of those records such as microfilm or other reproduced copies. (2) For a redetermination of an LEA's eligibility under section 8002(a)(1), only upon— (i) Records described in paragraph (d)(1) of this section; or (ii) Department records. (e) The Secretary does not base the determination or redetermination of an LEA's eligibility under this section upon secondary documentation such as estimates, certifications, or appraisals. (Authority: 20 U.S.C. 7702(a)(1)) (a) An LEA with an otherwise approvable application is eligible to receive assistance under section 8002 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. (b) The Secretary considers that an LEA is substantially compensated by increases in revenue from Federal activities with respect to the eligible Federal property if— (1) The LEA received new or increased revenue during the preceding fiscal year that is generated directly from the eligible Federal property or activities in or on that property; and (2) The revenue described in paragraph (b)(1) of this section equals or exceeds the maximum payment amount under section 8002(b) for the fiscal year for which the LEA seeks assistance. (c) If an LEA described in paragraph (a) of this section received revenue described in paragraph (b)(1) of this section during the preceding fiscal year that is less than the maximum payment amount calculated under section 8002(b)(2) for the fiscal year for which the LEA seeks assistance, the Secretary reduces that maximum payment amount by the amount of that revenue received by the LEA. (d) For purposes of this section, the amount of revenue that an LEA receives during the previous fiscal year from activities conducted on Federal property does not include the following: (1) Payments received by the agency from the Secretary of Defense to support— (i) The operation of a domestic dependent elementary or secondary school; or (ii) The provision of a free public education to dependents of members of the Armed Forces residing on or near a military installation. (2) Federal payments-in-lieu-of-taxes (PILOTs or PILTs), including PILTs for Federal entitlement lands authorized by Public Law 97–258, 31 U.S.C. 6901–6906. (Authority: 20 U.S.C. 7702(a)(2) and (b)(1)(A)) [60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35414, July 1, 1997] (a) The aggregate assessed value of eligible Federal property for the purpose of an LEA's section 8002 payment must be determined, by a local official responsible for assessing the value of real property located in the jurisdiction of the LEA for the purpose of levying a property tax, as follows: (1) The local official first determines a fair market value (FMV) for the eligible Federal property in each Federal installation or other federally owned property (e.g., Federal forest), based on the highest and best use of taxable properties adjacent to the eligible Federal property. (2) The local official then determines a section 8002 assessed value for each Federal installation or federally owned property by adjusting the FMV established in paragraph (a)(1) of this section by any percentage, ratio, index, or other factor that the official would use, if the eligible Federal property were taxable, to determine its assessed value for the purpose of generating local real property tax revenues for current expenditures. In making this adjustment, the official may assume that there was a transfer of ownership of the eligible Federal property for the year for which the section 8002 assessed value is being determined. (3) The local official then calculates the aggregate section 8002 assessed value for all eligible Federal property in the LEA by adding the section 8002 assessed values for each different Federal installation or federally owned property determined in paragraph (a)(2) of this section. Example: Two different Federal properties are located within an LEA—a Federal forest, and a naval facility. Based upon the highest and best use of taxable properties adjacent to the eligible Federal property, the local assessor establishes a FMV for the Federal forest of $1 million (woodland), and a FMV for the naval facility of $3 million (50 percent residential and 50 percent commercial/industrial). Assessed values in that taxing jurisdiction are determined by multiplying the FMV of property by an assessment ratio—the assessment ratio for woodland property is 30 percent of FMV, for residential 60 percent of FMV, and for commercial 75 percent of FMV.
To determine the section 8002 assessed value of the Federal forest, the assessor multiplies the FMV for that property ($1,000,000) by 30 percent (the assessment ratio for woodland property), resulting in a section 8002 assessed value of $300,000. To determine the section 8002 assessed value for the naval facility, the assessor first must determine the portion of the total FMV attributable to each property type if that portion has not already been established. To make this determination for the residential portion, the assessor could multiply the total FMV ($3,000,000) for the naval facility by 50 percent (the portion of residential property), resulting in a $1.5 million FMV for the residential property. To determine a section 8002 assessed value for this residential portion, the assessor then would multiply the $1.5 million by 60 percent (assessment ratio for residential property), resulting in $900,000. Similarly, to determine the portion of the FMV for the naval facility attributable to the commercial/industrial property, the assessor could multiply the total FMV ($3,000,000) by 50 percent (the portion of commercial/industrial property), resulting in $1.5 million. To determine the section 8002 assessed value for this commercial/industrial portion, the official then would multiply the $1.5 million by 75 percent (the assessment ratio for commercial/industrial property), resulting in $1,025,000. The assessor then must add the section 8002 assessed value figures for the residential portion ($900,000) and for the commercial/industrial portion ($1,025,000), resulting in a total section 8002 assessed value for the entire naval facility of $1,925,000. Finally, the assessor determines the aggregate section 8002 assessed value for the LEA by adding the section 8002 assessed value for the Federal forest ($300,000), and the section 8002 assessed value for the naval facility ($1,925,000), resulting in an aggregate assessed value of $2,325,000. (b) For the purpose of this section, the terms listed below have the following meanings: (1) Adjacent means next to or close to the eligible Federal property. In most cases, this will be the closest taxable parcels. (2)(i) Highest and best use of a parcel of adjacent property means the FMV of that parcel determined based upon a “highest and best use” standard in accordance with State or local law or guidelines if available. To the extent that State or local law or guidelines are not available, “highest and best use” generally will be a reasonable fair market value based upon the current use of those properties. However, the local official may also consider the most developed and profitable use for which the adjacent taxable property is physically adaptable and for which there is a need or demand for that use in the near future. (ii) A local official may not base the “highest and best use” value of adjacent taxable property upon potential uses that are speculative or remote. (iii) If the taxable properties adjacent to the eligible Federal property have different highest and best uses, these different uses must enter into the local official's determination of the FMV of the eligible Federal property under paragraph (a)(1) of this section. Example: If a portion of a Federal installation to be valued has road or highway frontage with adjacent properties that are used for residential and commercial purposes, but the rest of the Federal installation is rural and vacant with adjacent properties that are agricultural, the local official must take into consideration the various uses of the adjacent properties (residential, commercial, and agricultural) in determining the FMV of the Federal property under paragraph (a)(1) of this section. (Authority: 20 U.S.C. 7702) [62 FR 35414, July 1, 1997]
Title 34: Education
PART 222—IMPACT AID PROGRAMS
Subpart B—Payments for Federal Property Under Section 8002 of the Act
§ 222.20 What definitions apply to this subpart?
§ 222.21 What requirements must a local educational agency meet concerning Federal acquisition of real property within the local educational agency?
§ 222.22 How does the Secretary treat compensation from Federal activities for purposes of determining eligibility and payments?
§ 222.23 How does a local official determine the aggregate assessed value of eligible Federal property for the purpose of a local educational agency's section 8002 payment?
§§ 222.24-222.29 [Reserved]
