[Federal Register: May 10, 2000 (Volume 65, Number 91)]
[Proposed Rules]
[Page 30313-30316]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10my00-40]
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Part V
Department of Education
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34 CFR Part 300
Assistance to States for the Education of Children With Disabilities;
Proposed Rule
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DEPARTMENT OF EDUCATION
34 CFR Part 300
RIN 1820-AB51
Assistance to States for the Education of Children With
Disabilities
AGENCY: Office of Special Education and Rehabilitative Services,
Department of Education.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Secretary proposes to amend the regulations governing the
Assistance to States for the Education of Children with Disabilities
program under Part B of the Individuals with Disabilities Education Act
(IDEA). This amendment is needed to implement the statutory provision
that for any fiscal year in which the appropriation for section 611 of
part B of IDEA exceeds $4.1 billion, a local educational agency (LEA)
may treat as local funds up to 20 percent of the amount it receives
under that part that exceeds the amount it received during the prior
fiscal year. The proposed regulation would ensure effective
implementation of this statutory provision by providing clarity about
the funds that can be included in this calculation, and would reduce
the potential for audit exceptions.
DATES: We must receive your comments on or before August 8, 2000.
ADDRESSES: Address all comments about these proposed regulations to
Thomas B. Irvin, Office of Special Education and Rehabilitative
Services, U.S. Department of Education, Room 3090, Mary E. Switzer
Building, 330 C Street, SW., Washington, DC 20202-2570.
If you prefer to send your comments through the internet, use the
following address: Comments@ed.gov.
You must use the term ``4.1 billion provision'' in the subject line
of your electronic message.
FOR FURTHER INFORMATION CONTACT: JoLeta Reynolds (202) 205-5507. If you
use a telecommunication device for the deaf (TDD), you may call the TDD
number at (202) 205-5465.
Individuals with disabilities may obtain this document in an
alternate format (e.g., Braille, large print, audiotape, or computer
diskette) on request to Katie Mimcey, Director of the Alternate Formats
Center. Telephone: (202) 205-8113.
SUPPLEMENTARY INFORMATION:
Invitation to Comment
We invite you to submit comments regarding this proposed
regulation.
We also invite you to assist us in complying with the specific
requirements of Executive Order 12866 and its overall requirement of
reducing regulatory burden that might result from the proposed
regulation. Please let us know of any further opportunities we should
take to reduce potential costs or increase potential benefits while
preserving the effective and efficient administration of the program.
During and after the comment period, you may inspect all public
comments about this proposed regulation in Room 3090, Mary E. Switzer
Building, 330 C Street SW., Washington, DC, between the hours of 8:30
a.m. and 4 p.m., Eastern time, Monday through Friday of each week
except Federal holidays.
Assistance to Individuals With Disabilities in Reviewing the
Rulemaking Record
On request, we will supply an appropriate aid, such as a reader or
print magnifier, to an individual with a disability who needs
assistance to review the comments or other documents in the public
rulemaking record for this proposed regulation. If you want to schedule
an appointment for this type of aid, you may call (202) 205-8113 or
(202) 260-9895. If you use a TDD, you may call the Federal Information
Relay Service at 1-800-877-8339.
Background
The IDEA Amendments of 1997 (Pub. L. 105-17) added a provision
related to the permissive treatment of a portion of Part B funds by
LEAs for maintenance of effort and non-supplanting purposes in certain
fiscal years (see section 613(a)(2)(C) of the Act and Sec. 300.233 of
the current regulations). Under that provision, for any fiscal year
(FY) for which the appropriation for section 611 of IDEA exceeds $4.1
billion, an LEA may treat as local funds, for maintenance of effort and
non-supplanting purposes, up to 20 percent of the amount it receives
that exceeds the amount it received under Part B during the prior year.
Under Sec. 300.233 an LEA is able to meet the maintenance of effort
requirement of Sec. 300.231 and non-supplant requirement of
Sec. 300.230(c) even though it reduces the amount of local or local and
State funds that it spends on the Part B program, by an amount equal to
the amount of Federal funds that may be treated as local funds. The
Federal fiscal year 1999 was the first year that section 611
appropriation exceeded $4.1 billion.
State and local educational agency officials have told the
Department that they believe it is not clear from the provision whether
the funds affected are only those that an LEA receives through
statutory subgrants under section 611(g), or whether the provision also
applies to other Part B funding sources (i.e., sub-grants to LEAs for
capacity-building and improvement under section 611(f)(4); other funds
the SEA may provide to LEAs under section 611(f); or funds provided
under section 619 (Preschool Grants program)). Further, because section
613(a)(2)(C) refers to an amount of funds that an LEA ``receives'' in
one fiscal year compared to the amount it ``received'' in the prior
fiscal year, and because agencies may, at any one point in time, be
using funds appropriated in several Federal fiscal years, agency
officials are uncertain as to how to determine that an LEA has
``received'' Federal funds.
Because section 613(a)(2)(C) of IDEA and Sec. 300.233(a)(1) (which
tracks the statutory language) may not be sufficiently clear with
respect to which precise funds are affected, this could result in the
provision being interpreted and applied differently from LEA to LEA. If
that situation were to occur, it could result in a significant increase
in the number of audit exceptions against LEAs. Thus, it is important
to set out in the regulations a clear interpretation of section
613(a)(2)(C) to support its consistent application across LEAs and
States, and to reduce the potential for audit exceptions.
In light of the statutory structure for distribution of Federal
funds to LEAs, we believe that the most reasonable interpretation is to
apply that provision only to subgrants to LEAs under section 611(g) of
the Act (Sec. 300.712 of the regulations) from funds appropriated for
one Federal fiscal year compared to funds appropriated for the prior
Federal fiscal year. This interpretation (as reflected in the proposed
regulation) would ensure that an LEA could treat as local funds up to
20 percent of the increase in the amount it is entitled to receive as a
subgrant under Sec. 300.712 for any fiscal year for which the Federal
appropriation to carry out section 611 of the IDEA exceeds
$4,100,000,000. Excluded from the Federal funds that can be treated as
local funds will be sub-grants to LEAs for capacity-building and
improvement under section 611(f)(4) (Sec. 300.622); other funds the SEA
may provide to LEAs under section 611(f) (Sec. 300.602); and funds
provided under section 619 (Preschool Grants program) (34 CFR Part
301).
First, if IDEA funds that States have the authority to provide to
LEAs on a discretionary basis, such as subgrants to LEAs for capacity
building and improvement under section 611(f)(4) (Sec. 300.622) and
other funds the SEA may provide to LEAs under section
[[Page 30315]]
611(f) (Sec. 300.602), are included in this calculation, it would
result in some LEAs receiving a proportionately greater benefit from
this provision than other LEAs based on receipt of funds that may be
earmarked for a specific, time-limited purpose. This would lead to
inequitable results of the Sec. 300.233 exception across LEAs in a
State. In addition, including section 619 formula grant funds (34 CFR
Part 301) in the calculation does not appear to be justified as the
`trigger' appropriation is the amount appropriated under section 611.
The proposed regulation also would provide that if funds are being
withheld from an LEA or have been reallocated to other LEAs, those
funds would not be included in this calculation, as they would not be
available to the LEA for the provision of special education and related
services to children with disabilities.
Below are examples showing how this proposed regulation would apply
under several situations:
* Example 1: An LEA receives $100,000 in Federal LEA
Subgrant funds under section 611(g) of the Act in one fiscal year (FY-
1), and $120,000 in section 611(g) funds in the following fiscal year
(FY-2). The LEA may treat as local funds up to 20 percent of the
$20,000 in section 611(g) funds it receives in FY-2 (i.e., up to
$4,000), since this is the amount that exceeds the amount it received
in the prior year.
* Example 2: An LEA, in one fiscal year (FY-1), receives
$100,000 in section 611(g) funds, and $20,000 in LEA discretionary
funds under section 611(f) of the Act; and in the following fiscal year
(FY-2), the LEA receives $120,000 in section 611(g) funds, but does not
receive any funds under section 611(f). The LEA may treat as local
funds up to 20 percent of the $20,000 in section 611(g) funds it
receives in FY-2 (i.e., up to $4,000), since this is the amount of
section 611(g) funds that exceeds the amount it received in FY-1.
* Example 3: An LEA had all of its section 611(g) funds
($100,000) withheld in one fiscal year (FY-1); but in the next fiscal
year (FY-2), the LEA received a total of $220,000 in section 611(g)
funds (i.e., $100,000 for FY-1, plus $120,000 for FY-2). Because the
LEA would have been entitled to $100,000 in FY-1, the LEA may treat as
local funds up 20 percent of the $20,000 in FY-2 that exceeded its FY-1
allotment, or up to $4,000.
* Example 4: An LEA received $100,000 under section 611(g)
in one fiscal year (FY-1), and would have received $120,000 in section
611(g) funds for the next fiscal year (FY-2); but the LEA has all of
its section 611(g) funds withheld in FY-2. The LEA would have no
section 611(g) funds that could be treated as local funds in FY-2.
By clearly articulating that the standard refers to funds that an
LEA is eligible to receive from a particular Federal appropriation, the
proposed regulation would provide for consistent application from year
to year across LEAs. It also would provide necessary clarity to budget
officials and auditors, and ensure that each LEA receives a comparable
benefit from this statutory provision.
It is important to note that Sec. 303.233(b) of the existing
regulation (which tracks the statutory language under section
613(a)(2)(C)(ii)) provides that ``If an SEA determines that an LEA is
not meeting the requirements of this part, the SEA may prohibit the LEA
from treating funds received under Part B of the Act as local funds
under paragraph (a)(1) of this section for any fiscal year, but only if
it is authorized to do so by the State constitution or a State
statute.''
Federal fiscal year 1999 was the first year that the section 611
appropriation exceeded $4.1 billion. However, since awards for fiscal
year 1999 have already been made, these proposed regulations would be
effective only for fiscal year 2000 and later appropriations. Thus,
under the proposed regulation, FY 1999 would be the ``previous fiscal
year'' for purposes of determining the amount of an LEA's FY 2000 grant
under Sec. 300.712 that it may treat as local funds. The amount of
increase from FY 1999 to FY 2000 for purposes of this calculation would
be based on the amount of funds the LEA was eligible to receive under
Sec. 300.712 in each of those years, rather than the amount it received
during a particular year, or some other amount. Funds that were
withheld from the LEA could not be considered.
Executive Order 12866
1. Potential Cost and Benefits
Under Executive Order 12866, we have assessed the potential costs
and benefits of this regulatory action.
The potential costs associated with the proposed regulations are
those resulting from statutory requirements and those we have
determined as necessary for administering this program effectively and
efficiently.
In assessing the potential costs and benefits--both quantitative
and qualitative--of this regulatory action, we have determined that the
benefits would justify the costs.
We have also determined that this regulatory action would not
unduly interfere with State, local, and tribal governments in the
exercise of their governmental functions.
Summary of Potential Costs and Benefits
The potential costs and benefits of this proposed regulation are
discussed elsewhere in this document under the Supplementary
Information section.
2. Clarity of the Regulations
Executive Order 12866 and the President's Memorandum of June 1,
1998 on ``Plain Language in Government Writing'' require each agency to
write regulations that are easy to understand.
We invite comments on how to make this proposed regulation easier
to understand, including answers to questions such as the following:
* Are the requirements in the proposed regulation clearly
stated?
* Does the proposed regulation contain technical terms or
other wording that interferes with its clarity?
* Does the format of the proposed regulation (use of
headings, paragraphing, etc.) aid or reduce it's clarity?
* Could the description of the proposed regulation in the
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in
making the proposed regulation easier to understand? If so, how?
* What else could we do to make the proposed regulation
easier to understand?
Send any comments that concern how the Department could make this
proposed regulation easier to understand to the person listed in the
ADDRESSES section of the preamble.
Regulatory Flexibility Act Certification
The Secretary certifies that these proposed regulations would not
have significant economic impact on a substantial number of small
entities. The small entities affected would be small LEAs. The
regulations would benefit the small entities affected by clarifying the
statutory requirements and reducing the possibility of audit
exceptions. By ensuring consistency, the regulations would promote more
effective and efficient program administration.
Paperwork Reduction Act of 1995
This proposed regulation does not contain any information
collection requirements.
Intergovernmental Review
This program is subject to Executive Order 12372 and the
regulations in 34
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CFR part 79. One of the objectives of the Executive order is to foster
an intergovernmental partnership and a strengthened federalism. The
Executive order relies on processes developed by State and local
governments for coordination and review of proposed Federal financial
assistance.
This document provides early notification of our specific plans and
actions for this program.
Assessment of Educational Impact
The Secretary particularly requests comments on whether this
proposed regulation would require transmission of information that any
other agency or authority of the United States gathers or makes
available.
Electronic Access to This Document
You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF) on the Internet at either of the
following sites:
http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html
To use the PDF you must have Adobe Acrobat Reader Program with Search,
which is available free at either of the previous sites. If you have
questions about using the PDF, call the U.S. Government Printing Office
(GPO), toll free, at 1-800-293-6498; or in the Washington, D.C., area
at (202) 512-1530.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at:
http://www.access.gpo.gov/nara/index.html
(Catalog of Federal Domestic Assistance Number: 84.027 Assistance to
States for the Education of Children with Disabilities)
List of Subjects in 34 CFR Part 300
Administrative practice and procedure, Education of individuals
with disabilities, Elementary and secondary education, Equal
educational opportunity, Grant programs--education, Privacy, Private
schools, Reporting and recordkeeping requirements.
Dated: February 29, 2000.
Richard W. Riley,
Secretary of Education.
For the reasons described in the preamble, the Secretary proposes
to amend title 34 of the Code of Federal Regulations as follows:
PART 300--ASSISTANCE TO STATES FOR THE EDUCATION OF CHILDREN WITH
DISABILITIES PROGRAM
1. The authority citation for part 300 continues to read as
follows:
Authority: 20 U.S.C. 1411-1420, unless otherwise noted.
2. Section 300.233 is amended by revising paragraph (a)(1), and by
adding a new paragraph (a)(3), to read as follows:
Sec. 300.233 Treatment of Federal funds in certain fiscal years.
(a)(1) Subject to paragraphs (a)(2), (a)(3), and (b) of this
section, for any fiscal year for which amounts appropriated to carry
out section 611 of the Act exceed $4,100,000,000, an LEA may treat as
local funds up to 20 percent of the amount of funds it is eligible to
receive under Sec. 300.712 from that appropriation that exceeds the
amount from funds appropriated for the previous fiscal year that the
LEA was eligible to receive under Sec. 300.712.
* * * * *
(3) For purposes of this section, an LEA is not eligible to receive
funds that have been withheld under Sec. 300.197 or 300.587 or have
been reallocated to other LEAs in the State under Sec. 300.714.
* * * * *
[FR Doc. 00-11601 Filed 5-9-00; 8:45 am]
BILLING CODE 4000-01-U