Impact Aid is a federal formula grant program designed to assist local school districts that have lost property tax revenue due to the presence of tax-exempt federal property or that have experienced increased expenditures due to the enrollment of federally connected children. Federally connected children are those whose parents pay minimal or no property taxes and who reside on Indian lands, military bases, low-rent housing properties, or other federal properties, or those who have parents in the uniformed services or employed on eligible federal properties. This booklet provides information on the Impact Aid program. The introduction describes Impact Aid, summarizes the statute (now Title VIII of the Elementary and Secondary Education Act of 1965), and gives a history of appropriations. The chapter on Section 8003 presents the categories of federally connected children; calculations of basic support, learning opportunity threshold, hold-harmless, and children with disabilities payments; eligibility standards for prekindergarten children, children connected with low-rent housing, and children with disabilities; documentation requirements for employment on public lands; formulae for applicants in states that do not collect average daily attendance data; and current expenditures and exclusions. The chapter on Section 8003(f), which addresses additional assistance for heavily impacted school districts, describes the types of districts eligible and the calculation of maximum payments. The chapter on Section 8004, dealing with Indian lands, discusses eligibility requirements. The next two chapters contain sample forms and worksheets. The administrative review process is explained, and names and phone numbers for program staff are given. (TD)