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American Recovery & Reinvestment Act of 2009

American Recovery & Reinvestment Act of 2009. Overview & Roadmap. David A DeSchryver, Esq. Legislative Counsel at Brustein & Manasevit Roadmap ARRA 2009 overview General Provisions Stabilization Funds Targeted Funds Questions & Discussion. Resources:. http://www.recovery.gov/

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American Recovery & Reinvestment Act of 2009

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  1. American Recovery & Reinvestment Act of 2009 Bruman.com

  2. Overview & Roadmap • David A DeSchryver, Esq. Legislative Counsel at Brustein & Manasevit • Roadmap • ARRA 2009 overview • General Provisions • Stabilization Funds • Targeted Funds • Questions & Discussion Bruman.com

  3. Resources: • http://www.recovery.gov/ • http://www.ed.gov/policy/gen/leg/recovery/index.html • “Recovery Act Guidance,” http://www.whitehouse.gov/omb/recovery_default/ Bruman.com

  4. ARRA 2009: Overview • The Act will lay the foundation for a generation of education reform by encouraging states to adopt college and career-ready standards and assessments, to build robust data systems that allow districts to better track the growth of individual students, to turn around failing schools and embrace innovative new learning models, and to invest heavily in teacher and principal quality initiatives that both elevate the teaching profession and help recruit and retain great teachers and principals for underserved schools and communities. Bruman.com

  5. Direct Education Funding - $77 Billion • $48.3 billion in state stabilization funds. • $8.8 billion is targeted to "public safety and other government services,” which may include including K-12 or higher education assistance or facilities modernization. • $10 billion for Title I. • $3 billion for Title I school improvement programs, 1003(g). • $12 billion for IDEA. Bruman.com

  6. Direct Education Funding - $77 Billion • $5 billion State incentive grants to be distributed on a competitive basis to states. • This includes $650 million to fund school systems and non-profits with strong records of innovation and improving student achievement. • $5 billion for Early Childhood, including Head Start, early Head Start, Childcare Block Grants, and programs for infants with disabilities. (Includes HHS programs) • $2 billion for other education investments, including pay for performance, data systems, teacher quality investments, technology grants, vocational rehab, work study, and Impact Aid Bruman.com

  7. General Provisions • Period of Availability: All funds appropriated under this Act shall remain available for obligation until September 30, 2010, unless expressly provided otherwise in this Act. Bruman.com

  8. General Provisions • Buy American: No funds may be used for construction, alteration, maintenance, repair of a public building or public work unless all of the iron, steel, and manufactured goods in the project are produced in the US. • There are exceptions. Bruman.com

  9. General Provisions • Wage Requirements: All laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal government pursuant to this Act shall be paid not less than the wages prevailing in the locality for similar projects as determined by the Secretary of Labor, in accordance with the Davis-Bacon Act. Bruman.com

  10. General Provisions • Relationship to other appropriations: Stimulus + FY09 Bruman.com

  11. General Provisions • Special contracting provisions: To the maximum extent possible, contracts funded under this Act shall be awarded as fixed-price contracts through the use of competitive procedures. • Any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the website established in section 1526. Bruman.com

  12. Stabilization Funds: 2 pots • Of the $53.6 billion, after reservations, $48.3 billion is dedicated for the support of state budgets • 81.8% or near $39.5 billion immediately earmarked for restoring education funding to the greater of the level in FY08 or FY09. • The recipient Governors must FIRST use the 81.8% of their allocation for filling shortfalls for • elementary, secondary and • post secondary and, as applicable, • early childhood education programs and services. • If there is a shortfall in both, the Gov. has to allocate proportionally across the accounts. Bruman.com

  13. Stabilization Funds: 2 pots • 18.1% or near $8.8 billion in funding (from the $48.3 billion) is for public safety & other govt. services, which may include: • assistance for elementary & secondary, and publicIHE • Modernization, renovation or repair of public school facilities and IHE • including M/R/R that are consistent with a recognized green building rating system (not required). Bruman.com

  14. Stabilization Funds: Fiscal • Timing: Stabilization funds will be distributed as soon as possible, pending completion of the Governor’s application guidelines by USED. • Period of availability: Plain language of the Act limits availability to September 30, 2010. • The Governor must return any funds that are not awarded as sub grants or “otherwise committed” within 2 yrs of receiving such funds. • There will be extensive reporting requirements. Bruman.com

  15. Stabilization Funds: Fiscal • Sec. 14012, fiscal relief, includes a maintenance of effort provision that may be waived or modified under certain conditions. • Lower % analysis: State receiving the waiver must not provide a lower percentage of the total funds available for elementary and secondary education that in the preceding fiscal year. • States, with prior approval, may treat stabilization funds as “non federal funds” for purposes of meeting MOE under “any other” USED program. • There is no SNS provision applicable to fiscal stability funds. • Uncertainty within USED as to the application of SNS to the stabilization funds. Bruman.com

  16. Stabilization Funds: How Distributed • The Secretary of Education will distribute funds to States according to the following formula: • 61% of a state’s allocation will be based on the state’s relative population of individuals ages 5 through 24; and • 39% of a state’s allocation will be based on the state’s relative total population compared to the country. Bruman.com

  17. Stabilization, the 82% • The restoration funds are distributed among the shortfalls in K-12 and higher education. • The K12 funds go to restore, through the state's primary elementary and secondary funding “formulae,” the level of support provided to the greater of the state FY 2008 or 09 level; and • Where applicable, to allow existing state formulae increases to support elementary and secondary education for fiscal years 2010 and 2011 to be implemented and • allow for phasing in a state equity and adequacy adjustments, • if such increases were enacted prior to October 1, 2008. Bruman.com

  18. Stabilization, the 82% • For higher education, • for each fiscal year 2009, 2010 and 2011 • the amount of funds to public IHE to restore state support (excluding tuition and fees paid by students) • to the greater of fiscal year 2008 or fiscal year 2009 level. Bruman.com

  19. Stabilization, the 82% • Shortfall provision: • If the funds, in each of fiscal years ‘09, ‘10, and ‘11 is insufficient to support both higher education and K-12, • then the Governor shall allocate the funds between the two in proportion to the relative shortfall in state support for those two education sectors. Bruman.com

  20. Stabilization, the 82% • Once the restoration is carried out, the Governor shall use any remaining funds to provide LEAs with sub grants based on the relative shares of funding under part a Title I of ESEA for most recent year for which data are available. Bruman.com

  21. Stabilization, the 18% 14002(a) Is for restoration and (b) is the 18.2% of the State’s allocation for: • public safety and • other “gov’t services,” that may include • assistance for elementary & secondary, and public IHE • M/R/R of public school facilities and IHE • including M/R/R that are consistent with a recognized green building rating system (not required). Bruman.com

  22. Sec.14003, uses of funds by LEAs: Critical topic! • LEAs that receive funds under “this title” “may” use the funds for any activity authorized by the: • ESEA • IDEA • The Adult and Family Literacy Act, or • The Perkins act, or • MRR of public school facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system. (The drafting is critical!) Bruman.com

  23. Section 14003: LEA Prohibitions • An LEA may not use funds for • payment of maintenance costs; • stadiums or other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public; • purchase or upgrade of vehicles; or • improvement of stand-alone facilities whose purpose is not the education of children, including central office administration or operations or logistical support facilities. Bruman.com

  24. Section 14003: LEA Prohibitions • Nothing in this section shall allow a local educational agency to engage in school modernization, renovation, or repair that is inconsistent with State law. Bruman.com

  25. Section 14003, Drafting Qs • Critical interpretations: • What will be “unfettered” funds? • LEAs that receive funds under “this title” “may” use the funds for any activity authorized by the… • Can we use the 81.8 percent of funds that are distributed based on cuts in the basic formula to pay the salaries of education staff who were losing their jobs because of the shortfall? Bruman.com

  26. Key issues for LEA use • Is the activity allowable? • Review statute • Review guidance • Review cost principles • Does it violate non-supplanting provisions? • Review three scenarios where supplanting is presumed, see Revised Non-Regulatory Guidance Title I Fiscal Issues, Feb. 2008 (http://www.ed.gov/programs/titleiparta/fiscalguid.pdf). • When federal funds are used to provide services that the SEA/LEA is required to make available under other federal, state or local laws; • When federal funds are used to provide services that the LEA/SEA provided with State or local funds in the prior year; or • When federal funds are used to provide the same services to Title I participating students that are being received by nonparticipating students. • Is the documentation in place to rebut the presumption of supplanting? Bruman.com

  27. Section 14005, state applications • How to get the funds - the Governor’s application is a three-part application: • 1) Assurances as required under the law • 2) Provision of baseline data demonstrating the state’s current status in each of the assurances • 3) Description of how the state intends to use the allocation, including a description if the state will use the funds to meet maintenance of effort requirements under ESEA and IDEA. (See fiscal relief section!). Bruman.com

  28. Section 14005, the assurances • 1) MOE: in each fiscal year’s ‘09, ‘10, and ‘11 maintain state support for elem. & secondary education and higher education at least at the level of support in FY ‘06. • See Sec 14012 Fiscal Relief if unable to meet ‘06 MOE. • 2) Equity and teacher distribution: State “will take actions” to improve teacher effectiveness and comply with the ESEA to address inequities in the distribution of highly qualified teachers between high & low poverty schools, and to ensure low income and minority are not taught at higher rates than other children by inexperienced or out of field teachers. (ESEA 1111(b)(8)(c)) Bruman.com

  29. Section 14005, the assurances • 3) The state will establish a K-16 longitudinal data system, according to the elements described in the America Competes Act (20 USC 9871). Bruman.com

  30. Section 14005, the assurances • 4) Standards and assessments: • Will enhance the quality of academic assessments, (ESEA 1111(b)(3)); • Comply ESEA requirements related to the inclusion of students with disabilities and limited English proficient students in state assessments, the development of valid and reliable assessments and provisions of accommodations (ESEA 1111(b)(3)(C)(ix) and (6); IDEA 612(a)(16)); • Take Steps to improve State academic content standards. (America Competes 6401(e)(1)(9)(A)(ii)). Bruman.com

  31. Section 14005, the assurances • 5) Supporting struggling schools: the State will ensure compliance with the requirements of the ESEA related to corrective action and restructuring. (ESEA 1116(a)(7)(C)(iv), 1116(a)(8)(B)). • And what if the Governor fails to make an assurance? No penalties, but consider: • loss of State Incentive funding. • Audit/monitoring findings Bruman.com

  32. Section 14012, fiscal relief • For the purpose of relieving fiscal burdens on States and LEAs that have • experienced a precipitous decline in financial resources, • the Sec. of Education may waive or modify any requirement of this title (the stabilization title) relating to maintaining fiscal effort. Bruman.com

  33. Section 14012, fiscal relief • (b) A waiver modification under this section shall be for any fiscal year 2009, 2010, or 2011. • (c) Criteria: Secretary shall not grant a waiver or modification unless • the state or local educational agency will not provide a smaller % of the total revenues available than the amount provided in the preceding fiscal year. • It can not be a smaller percentage! Bruman.com

  34. Section 14012, fiscal relief • (d) Maintenance of effort: upon prior approval from the Secretary, a state or LEA that receives funds under this title may treat any portion of such funds that is used for elementary, secondary, or post secondary education as nonfederal funds for the purpose of any requirement to maintain fiscal efforts under any other program administered by the Secretary. Bruman.com

  35. Section 14012, fiscal relief • Notwithstanding (d), the level of effort required by a state or local educational agency for the following fiscal year shall not be reduced. Bruman.com

  36. State Incentive Grants • Up to $5 billion that the Secretary shall, in FY 2010, make grants to states that have made significant progress in meeting the assurances identified in the State application: • Achieving equity in teacher distribution • Improving collection and use of data • Standards and assessments • Supporting struggling schools, corrective action and restructuring • And other criteria the Sec. determines appropriate • This is a large amount of funding at the Sec.’s discretion. Bruman.com

  37. State Incentive Grants • State must use at least 50% of the grant to provide local educational agencies with sub grants based on the relative share Title I funding. Bruman.com

  38. Innovation Fund: LEAs & nonprofit innovation • The Secretary may reserve up to $650 million for the innovation fund that consists of academic achievement awards for eligible entities that meet certain requirements. • This fund appears to be available immediately. • Awards for eligible entities to • allow them to expand successful practices and served as the best model; • allow the entities to work in partnership with the private sector and the philanthropic community; • and identify best practices that can be shared and taken to scale. Bruman.com

  39. Innovation Fund: LEAs & nonprofit innovation • To be eligible and entities shall: • Significantly close the achievement gaps (ESEA 1111(b)(2)); • Exceeded the state’s AMO is consistent with ESEA for 2 or more consecutive years or have demonstrated success in increasing student academic achievement for all groups of students through another measure as described in ESEA 1111(c)(2); • Have made significant improvement in other areas such as highly qualified teachers, HQT, data, graduation rates, etc. • Demonstrated an established partnership with the private sector and that the private sector will provide matching funds to help bring results to scale. Bruman.com

  40. Innovation Fund: LEAs & nonprofit innovation • The term “eligible entity” means: • an LEA, • or a partnership between a nonprofit organization and • (i) one or more LEAs or • (ii) a consortium of schools. Bruman.com

  41. Stabilization reporting • States receiving Stabilization funds must submit a report to the Sec. describing: • How the funds were used • How the fund were distributed • Estimated number of jobs saved or created using the stabilization funds • Tax increases averted • State’s progress in meeting the assurances • Increases in tuition and fees at public IHEs • Changes in enrollment in public IHEs • Each M/R/R project funded Bruman.com

  42. Targeted Funds: Fiscal • Timing: Title I funds are expected to be allocated by the end of March. Then, on July 1, schools will receive their regular, fiscal year 2009 Title I allocations • Period of availability: depends upon guidance. Plain language of the Act limits availability to September 30, 2010. • Programs are governed by current statutory provisions regarding MOE, SNS, but it is clear that USED wants to provide great flexibility. • Sec. 14012 Fiscal Relief: on the prior approval of the Secretary of Education, stabilization funds to be counted as non-Federal for the purposes of maintaining fiscal effort for "other" programs. Bruman.com

  43. Targeted Funds: Set asides • USED officials said they may providing relief from provisions of NCLB, such as: • 20% set asides, that could be especially burdensome in the context of the stimulus • 15% carryover limit • NCLB 1004 1% State administrative cap Bruman.com

  44. Targeted Funds • ESEA Title I, Sec. 1125 and 1125A: $10,000,000,000 • Reporting: Each LEA must file school by school listing of PP expenditures from state & local sources during the 08-09 SY by Dec.1, 2009. • School Improvement Grants, ESEA1003(g): $3,000,000,000 • Reporting: Each LEA must file school by school listing of PP expenditures from state & local sources during the 08-09 SY by Dec.1, 2009. • ED encourages States to use 40% of SIG for middle and high schools Bruman.com

  45. Targeted Funds • Impact Aid, ESEA VIII, Sec 8007: $100,000,000 • Construction payments by formula to eligible LEAs receiving Impact Aid payments. • 40% by formula based on LEA’s proportion of military children and children living on Indian lands. 60% made available by competitive grant. • Enhancing Education Through Technology, ESEA Title II Part D-1: $650,000,000 Bruman.com

  46. Targeted Funds • Education for homeless children and youth, McKinney Vento Title VII Subtitle B: $70,000,000 • Grants allocated in proportion to the number of homeless students identified by the State during 07-08 SY relative to the number of homeless students identified nationally during the 07-08SY, rather than existing statutory provisions. • Sec. is required to make grants to States not later than 60 days after the date of enactment. SEA must make subgrants to LEAs not later than 120 days after receiving the funds. Bruman.com

  47. Targeted Funds • Credit Enhancement for Charter Schools Facilities, ESEA Title V Part B subpart 2: $0 • Teacher Incentive Fund, ESEA Title V, part D subpart 1: $200,000,000 • Statewide Data Systems, ETAA sec. 208: $250,000,000 • Up to $5M may be used for State data coordinators and for awards to public or private organizations or agencies to improve data coordination. Bruman.com

  48. Targeted Funds • IDEA, Part B, C & Infants and Families. : $11,300,000,000 Part B 611; $400,000,000 Part B 619; $500,000,000 Part C • Estimated percentage of the “excess cost” of educating children with disabilities that the fed. govt. will pay for FY09 is 34.2% (still not 40%). • Vocational Rehabilitation State Grants, RA, Title I Part B: $540,000,000 Bruman.com

  49. Targeted Funds: Higher Education • Pell Grants, HEA IV, A. Maximum for award year 2009-2010 $4,860 (discretionary): $15,640,000,000 • For the 2009-2010 award year, the maximum Pell Grant award will be $5,350. • This will consist of a discretionary maximum award amount of $4,860 and an add-on of $490 (funded by mandatory appropriations). • $1.474B in mandatory appropriations for the Federal Pell Grant program, with $683 million provided for FY2009, and $831 million provided for FY2010. Bruman.com

  50. Targeted Funds: Higher Education • Work Study, HEA IV-C: $200 million in supplemental discretionary appropriations for the FWS program for FY2009. Bruman.com

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