Impact Aid Fairness and Equity Act of 2011

Impact Aid Fairness and Equity Act of 2011 - Amends the Elementary and Secondary Education Act of 1965, with respect to the Impact Aid program (which compensates local educational agencies (LEAs) for the financial burden of federal activities affecting their areas), to alter the formula for determining the payments due LEAs for federal ownership of property in their areas.

Prohibits LEAs from being paid amounts that: (1) exceed their total current expenditures in the second prior fiscal year; or (2) are less than 85% of their payment for the prior fiscal year, in FYs 2012, 2013, and 2014.

Requires the ratable reduction of payments due LEAs for federal ownership of property when appropriations for a fiscal year are insufficient to provide them with full compensation.

Alters the formula for determining the payments due LEAs for eligible federally-connected children.

Includes not only children in average daily attendance, but also those enrolled pursuant to a state open enrollment policy. Caps such payments for heavily impacted LEAs at the amount needed to raise their per-pupil expenditures to the higher of 110% of the average per-pupil expenditure of their state or the average per-pupil expenditure of three comparable LEAs. Continues a heavily impacted LEA's eligibility for such payments while activities associated with military base closures and realignments or force structure changes or relocations are ongoing.

Alters the formula for determining the construction payments due LEAs that are eligible for other Impact Aid payments.

Requires the Secretary of Education to use all Impact Aid construction appropriations to award: (1) emergency construction grants to LEAs that have no practical capacity, or minimal capacity, to issue bonds or are otherwise eligible for Impact Aid and have a school facility emergency; and (2) modernization grants to LEAs that are eligible for other Impact Aid payments.