A Microsoft Word version of this letter is available for download and PRINTING.

May 20, 2010

Subject: New Instructional Facility Allotment (NIFA); Online Application for Funding

TO THE ADMINISTRATOR ADDRESSED:

This letter is to inform you about the New Instructional Facility Allotment (NIFA), available to public school districts. It describes the allotment, explains the eligibility criteria and application process, and spells out the NIFA payments process. 

The Texas Education Code (TEC), §42.158, enacted by Senate Bill 4 of the 76th Texas Legislature, 1999, created the NIFA for public school districts. The 81st Legislature funded the NIFA at $25 million for each year of the biennium with an additional $1 million that first must be used to fund high school projects. (The complete statutory reference for the NIFA is shown in Attachment I, and the commissioner’s rules for the NIFA are shown in Attachment II.) Some important facts and common misconceptions about the NIFA are addressed below:

• The NIFA and the IFA (Instructional Facilities Allotment) are not the same, but are two different programs with different eligibility requirements, application processes, and application deadlines.
• The NIFA is essentially a reimbursement program for start-up costs of new campuses. Initial (first-year) applications must be submitted during the summer before the expected opening of the new building. Follow-up (second year) applications must be submitted during the summer after the first year of occupation. Special one-year funding is available for facilities that were occupied for the first time in 2009–2010 but did not receive NIFA funds because of the district’s failure to apply for funding before opening the campus. Any such eligible campus will receive funds for one year of operation only.
• NIFA funding is based on the average daily attendance (ADA) earned on a new campus. Since many new campuses open during the middle of a year, funding for these campuses is prorated for the first year. For all eligible campuses, the second year funds any growth in ADA between the first year and the second. Second-year funding is not automatic; all eligible districts must reapply for second-year funds.
• The NIFA is part of the cost of the first tier of the Foundation School Program (FSP), but is not counted in the calculation of weighted average daily attendance (WADA) for the second tier. Districts not eligible for Tier I funding are eligible for the NIFA.

Eligibility Criteria: The NIFA is available to all public school districts that construct new campuses. Open‑enrollment charter schools are also eligible. Districts that must take action under the TEC, Chapter 41, to reduce wealth per student to the equalized wealth level and school districts that do not otherwise qualify for state aid are eligible to receive the NIFA. Definitions and eligibility criteria for the NIFA are provided below.

To be eligible for the NIFA:

• The facility for which funds are requested must be a newly constructed instructional site (campus) used for teaching the curriculum required by the TEC, Chapter 28.
• The new facility must have its own campus ID number as designated by the Texas Education Agency (TEA).
• The new facility must have its own principal or be eligible to receive an accountability rating through standard analysis as described in the most current Accountability Manual.
• The new facility must have its own assigned instructional staff and instructional program distinct from other facilities.
• The new facility must have its own record of expenditures that is not a sub-set of another school budget and attendance data that can be reported for those students assigned to its campus.
• The new facility must be physically separate from other existing school structures. However, a covered walkway may connect the new facility to another building.

Funds Available:

• To qualify for initial (first-year) funding, the campus must be occupied for the first time in the 2010–2011school year.
• To qualify for follow-up (second-year) funding, the campus must have been occupied for the first time in 2009–2010 and must have received NIFA funds for that (prior) year.
• To qualify for special one-year funding, the instructional facility must have been occupied for the first time in 2009–2010, but must not have received NIFA funds for this first year of operation.

Prohibitions and Restrictions:

• The facility for which funds are requested cannot be for a program for students enrolled in another public school (summer school, evening school, etc.).
• The facility cannot be a renovated building. The building and the slab must be new from the ground up. The only exception would be for a campus with newly constructed instructional facilities and renovated or retained noninstructional structures, such as a cafeteria or library.
• The facility cannot be an expansion of existing facilities.
• The facility cannot be a portable or temporary structure.

Allotment Amount: For an initial (first-year) or special (one-year) application, a school district is entitled to an allotment of $250 per ADA earned by students on an eligible new campus. Funding is prorated for a facility that opens after the beginning of the school year. For a follow‑up (second‑year) application, a school district is entitled to an allotment of $250 for each additional student in ADA on the eligible campus. The number of additional students is the difference between the number of students in ADA in the second year at the eligible facility and the number of students in ADA in the first year.

Allotment Proration: Funding for the NIFA is limited by appropriation. If the total amount of allotments to which all districts are entitled for a school year exceeds the amount appropriated, the commissioner will reduce each district’s allotment so that the total amount to be distributed equals the total amount available. Reductions to allotments are made by applying the same number of cents of tax rate to each district’s taxable value of property. For each district, the taxable value of property is the property value certified by the Texas Comptroller for the preceding school year as determined under the Texas Government Code, Subchapter M, Chapter 403, or, if applicable, a reduced property value that reflects either a rapid decline pursuant to the TEC, §42.2521, or a grade-level adjustment pursuant to the TEC, §42.106.

Application Process: The NIFA application is available online. Applications must be entered, saved, and sent through the online FSP System. Applications must be sent electronically by July 15, 2010. Neither late applications nor paper applications will be accepted. Pictures, site plans, floor plans, demolition plans (if applicable), and legal documentation must be uploaded into the FSP System by July 15, 2010.

Online FSP System: The online FSP System requires a Texas Education Agency Secure Environment (TEASE) user ID and assigned password with NIFA User as a designation. Applications must be approved by the district approver before they are sent to the TEA for review. The FSP System will not process a NIFA application until the applicant agrees that certain required conditions apply to the newly constructed site. Moreover, the system assumes that the applicant is the superintendent or the superintendent’s authorized designee and that the applicant is fully familiar with the pertinent facts. Please be cautious about who is granted online access, since the information provided in the NIFA application is subject to audit.

TEASE users should first complete the online training modules associated with the NIFA program that are located at the following link: http://ritter.tea.state.tx.us/school.finance/training.html.

Selecting the appropriate application type:

• An initial application applies to a facility that was not occupied before the 2010–2011 school year and has never before received NIFA funds. An initial application includes a verification of eligibility, a brief description and photograph of the newly built instructional facility, and a copy of a legal document that clearly describes the nature and dates of construction. The documentation may be a copy of a contract, certification of project compliance, or certification of substantial completion.
• A one-year application is for a campus that was occupied for the first time in the 2009–2010 school year but did not receive funding because of the district’s failure to apply for funding before opening the campus. A one-year application includes a verification of eligibility, a brief description and photograph of the newly built instructional facility, and a copy of a legal document that clearly describes the nature and dates of construction. The documentation may be a copy of a contract, certification of project compliance, or certification of substantial completion.
• A follow-up application is for a facility that was occupied for the first time in the 2009–2010 school year and received NIFA funding for that year. Funding for the second year is based on the number of students in ADA as compared to the number in the first year.

Preliminary Payments: A separate NIFA payment will not be sent. Rather, preliminary payments will be incorporated into allocations for the FSP according to a district’s payment class. NIFA payments are reflected on the Summary of Finances reports. For a district that is not subject to the requirements of the TEC, Chapter 41, and does not receive payments from the Foundation School Fund, NIFA distributions will correspond to the schedule for payment class 3. For a district that is required to reduce wealth pursuant to the TEC, Chapter 41, any NIFA funds for which the district is eligible will be applied as credits to the amounts owed to equalize wealth.

For all districts receiving the NIFA, a settle‑up amount is determined by the commissioner when final counts of ADA, as reported through the Public Education Information Management System, are available for each campus. The amount of funds to be distributed for the NIFA to a school district is in addition to any other state aid entitlements.

Questions: If you have any questions related to the NIFA or the NIFA application, please contact Cassie Huggins by telephone at (512) 463-9232 or by email at Cassie.Huggins@tea.state.tx.us.

Sincerely,

Helen Daniels
Director, State Funding Division