REGULATORY

Supts. Memo. No. 170 (Informational), dated December 18, 1995
provided you with revised estimates of ADM-driven accounts, based
upon revisions to estimates of the one-cent state sales and use
tax and average daily membership, as proposed by Governor Allen
to the 1996 session of the General Assembly.   While the General
Assembly made no further changes to these accounts, other changes
were made in the current year budget (House Bill 29).  As you may
have read, Governor Allen has not signed House Bill 29 due to
some concerns surrounding the manner in which the bill was
enrolled and presented to him by the General Assembly.  The
Attorney General has initiated an action in the Supreme Court of
Virginia requesting the Court to provide answers to several major
questions surrounding this bill.  Attached is a copy of a letter
which was presented to the members of the General Assembly last
week in this regard.

Supts. Memo. No. 82 (Informational), dated April 19, 1996
provided you with entitlements in the Standards of Quality
accounts based upon your March 31, 1996 average daily membership
and the estimated sales tax contained in House Bill 29.  Due to
the above mentioned action, entitlements for Basic Aid and
Enrollment Loss must be recomputed using the estimate of sales
tax that was contained in the 1994-96 budget as adopted by the
1995 session of the General Assembly as Chapter 853.  A chart
reflecting these revised entitlements is attached for your use. 
All other SOQ accounts will remain as reflected in Supts. Memo.
No. 82.

To avoid any adverse impact on local school divisions, the
Governor has authorized a special payment in July of 1996 equal
to the amount of Basic Aid and Enrollment Loss increase that
would have been received under House Bill 29 as a result of the
reduced sales tax.  These payments will be made from funds
appropriated in the 1996-97 budget.  The Governor has stated his
intention to ask the 1997 General Assembly to appropriate this
additional payment in 1996-97 so that school divisions will
receive their regular Standards of Quality payments for 1996-97
and also receive this additional special payment.  The additional
funds should be provided to you as early in July as possible.

If you have questions, please call Mrs. Kathryn S. Kitchen,
Division Chief, Finance at (804) 225-2025.

WCB,Jr./kk

Attachments:   This memo and its attachment wil be sent to the
               superintendent's office.