H.R. 7989 — ACE Act

This section amends section 1125AA of the Elementary and Secondary Education Act of 1965 (ESEA) (1) by revising the heading to read "1125AA. Increase grants per formula student as the percentage of economically disadvantaged children in a local educational agency increases"; and (2) by replacing subsection (a) with new congressional findings. The findings assert that the formulas for Title I-A Targeted Grants and Education Finance Incentive Grants—which allocate more funds per formula student (i.e., children aged 5-17 eligible under Title I-A) to local educational agencies (LEAs) with higher concentrations of such students, using the higher of percentage weighting or number weighting—disadvantage smaller LEAs with high poverty concentrations by shifting funds to larger LEAs, contrary to congressional intent, as confirmed by Congressional Research Service and National Center for Education Statistics analyses. (Thus, the findings support reducing the influence of number weighting relative to percentage weighting.)

This section modifies the weighted child count used to determine targeted grants to local educational agencies under ESEA Title I-A when the Secretary allocates based on local educational agency data, maintaining the current formula—taking the larger of the concentration-based amount under subparagraph (B) and the number-based amount under subparagraph (C)—through FY2025 and requiring use of only the concentration-based amount under subparagraph (B) for FY2026 and succeeding fiscal years. (The concentration-based formula weights children in poverty by LEA poverty concentration—i.e., 1.0 times children constituting the first 5+% of the LEA population aged 5-17, 2.0 times the next 10%, 3.0 times the next 5%, and 4.0 times any excess—while the number-based formula equals total children aged 5-17 times the LEA poverty rate. Thus, the change may reduce targeted grants for LEAs with high total numbers of poor children but lower poverty concentrations.)

This section revises the weighted child count used to determine local educational agency grants under the Education Finance Incentive Grant Program (i.e., formula grants to states based on state fiscal effort for education and equity between high- and low-spending districts)—for each fiscal year for which the Secretary uses local educational agency data—such that the count is (1) through FY2025, the larger of the two amounts determined under clauses (ii) and (iii); and (2) for FY2026 and succeeding fiscal years, the amount determined under clause (iii). These changes apply to states with an equity factor less than 0.10, greater than or equal to 0.10 and less than 0.20, and greater than or equal to 0.20.