Title XIV

AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA)
SCHOOL FACILITIES COMMISSION

State Fiscal Stabilization Fund (Title XIV of ARRA)

Overview:
As part of the economic Stimulus Package, the federal government will be distributing funding to the districts through Title XIV: State Fiscal Stabilization Funds.  Title XIV is a new funding source available for States to utilize as a means to bringing their state educational funding resources back in line with their 2008 educational budget.

A total of 53,600,000,000 will be allocated for this effort.  Approximately 9,755,200,000 of the 53,600,000,000 will be available for school modernization and repair.

Under section 14001 of the Title XIV: State Fiscal Stabilization Funds it grants access to 18.2 percent of a State’s allocation for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education, and for modernization, renovation, or repair of public school facilities and institutions of higher education facilities, including modernizing, renovation, and repairs that are consistent with a recognized green building system.

The Governor then has the ability to distribute the funds in three ways.  The first is through subgrants. The local school districts can make application for grants for these funds that are applicable to efforts that meet the guidelines of subsection 14001 of Title XIV.  The second is that the Governor may distribute the funds as they see fit. Distribution must be met to meet the need of the districts or higher education institutions that are most in need, but proportionality they must be able to provide to all State and local education institutions. The third effort could be, if the Governor feels that the amount in the grant from the Federal Government is less than what is actually needed, used to supplement State educational needs, along with distribution to districts that the Governor feels meets the needs of those districts or higher education institutions that are most in need.

Available Funds:
$53.6 billion is available nationally to help restore education formulae cuts, support unfunded education formulae increases and restore higher education cuts. According to the U.S. Department of Education, “school systems” have discretion to use some of this money for school modernization. An additional $33.6 billion in state stabilization funds is available nationally as follows: $8.8 billion is available for public safety and other government services which may include education and education modernization, repair and renovation; and $24.8 billion dollars in bonds for renovation, repairs and school construction that will be retired through a combination of local, state and federal dollars.

Fund Availability:
50% of the funds are to be distributed to the states within forty (40) days and the second half of the funds within six (6) months.

Fund Allocation:
The funds will be allocated to states as follows: 61% on the basis of population of individuals aged 5 though 24, and 39% on the basis of the total population.

Use It or Lose It:
There is a “use it or lose it” provision which requires governors to sub-grant or commit funds within two (2) years of receipt of the funds after which time, the
U.S. Department of Education may reallocate the funds to other states. The funds may be used in state fiscal years 2009, 2010 and 2011.

Application Required:
To receive the funds, the Governor must submit an application to the Secretary of Education at such time, and in such manner, and containing information as the Secretary may reasonably require. There are also reporting requirements associated with receipt of the state fiscal stabilization funds.

Fund Usage:
81.8% of the state’s allocation must be used to support elementary, secondary, and postsecondary education and as applicable, early childhood education programs and services. The Governor shall first use the funds to restore state support for education (elementary, secondary and higher) or where applicable allow existing state formulae increases to support elementary and secondary education for fiscal years 2010 and 2011 to be implemented.

Sub-grants to local education agencies (local school districts) require the funds be used in accordance with ESEA, IDEA, Perkins or for the modernization, renovation, or repair of school facilities, including recognized green building rating systems. However, all K-12 school repair, modernization, or renovation must be consistent with state law and local school districts may not use the funds for payment of maintenance costs, stadiums or other athletic facilities, or for improvement of stand alone facilities whose primary purpose is not education of children (i.e. district administration facilities).

The Governor must also use 18.2% of the state’s allocation for public safety and other government services, which may include K-12 and HEA modernization, renovation, repair, including recognized green building rating systems.

Fund Distribution:
The Governor has the ability to distribute the funds in three ways. 

• Option 1 - Equal Distribution:  Funds distributed based on student population.
  
  
• Option 2 - Need-Based Sub-Grants:  The Governor may distribute the funds as they see fit.  The local school districts can make application for grants for these funds that are applicable to efforts that meet the guidelines of subsection 14001 of Title XIV.  Distribution must be met to meet the need of the districts or higher education institutions that are most in need, but proportionality they must be able to provide to all State and local education institutions.
  
  
• Option 3 - Governor's Discretion:  If the Governor feels that the amount of the State Stabilization funds is less than what is actually needed to supplement State educational needs, the governor can request permission from the federal government to distribute as they see fit. 

Impact Aid School Construction Grants:
There is also $100 million nationally for Impact Aid schools for school construction grants. Forty percent (40%) will be distributed via existing Impact Aid grant formulas and sixty percent (60%) for competitive grants for emergency repairs and modernization grants.