[Federal Register: December 2, 2002 (Volume 67, Number 231)]
[Rules and Regulations]               
[Page 71709-71771]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02de02-25]                         




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Part IV










Department of Education










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34 CFR Part 200






Title I--Improving the Academic Achievement of the Disadvantaged; Final 
Rule




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DEPARTMENT OF EDUCATION


34 CFR Part 200


RIN 1810-AA91


 
Title I--Improving the Academic Achievement of the Disadvantaged


AGENCY: Office of Elementary and Secondary Education, Department of 
Education.


ACTION: Final regulations.


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SUMMARY: The Secretary amends the regulations governing the programs 
administered under Title I, parts A, C, and D of the Elementary and 
Secondary Education Act of 1965 (ESEA), as amended (hereinafter 
referred to as the Title I programs.) These regulations are needed to 
implement recent changes to Title I of the ESEA made by the No Child 
Left Behind Act of 2001 (NCLB Act).


DATES: These regulations are effective January 2, 2003.


FOR FURTHER INFORMATION CONTACT: For subparts A, D, and E of part 200, 
Jacquelyn C. Jackson, Ed. D. Acting Director, Student Achievement and 
School Accountability Programs, Office of Elementary and Secondary 
Education, U.S. Department of Education, 400 Maryland Avenue, SW., room 
3W202, FB-6, Washington, DC 20202-6132. Telephone: (202) 260-0826.
    For subparts B and C of part 200, Francisco Garcia, Director, 
Migrant Education Program, Office of Elementary and Secondary 
Education, U.S. Department of Education, 400 Maryland Avenue, SW., room 
3E217, FB-6, Washington, DC 20202-6135. Telephone: (202) 260-0089.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact persons listed under FOR FURTHER 
INFORMATION CONTACT.


SUPPLEMENTARY INFORMATION: These regulations implement changes to Title 
I of the ESEA, as amended by the NCLB Act (Public Law 107-110), enacted 
January 8, 2002. On August 6, 2002, the Secretary published a notice of 
proposed rulemaking (NPRM) for these programs in the Federal Register 
(67 FR 50986).
    In the preamble to the NPRM, the Secretary discussed on pages 50986 
through 51001 the major revisions proposed in that document to 
implement changes in the provisions of Title I made by the NCLB Act. 
These included the following:
    [sbull] Clarifying in Sec.  200.11 that a condition of receiving 
Title I funds is that, if selected, the local educational agency (LEA) 
must participate in the National Assessment for Educational Progress 
(NAEP).
    [sbull] Specifying in Sec.  200.12 that the implementation of the 
statutory provisions requiring a single, statewide accountability 
system take effect beginning with the 2002-2003 school year.
    [sbull] Requiring in Sec.  200.12 that States include, in their 
accountability systems, guidelines for identifying the students with 
disabilities who should take alternate assessments and that States 
report on the number of students who take an alternate assessment.
    [sbull] Clarifying in Sec. Sec.  200.13 through 200.20 statutory 
provisions in section 1111(b)(2) of the NCLB Act requiring each State 
to demonstrate what constitutes adequate yearly progress (AYP), 
particularly the interrelationship among the timeline, starting points, 
intermediate goals, and annual measurable objectives that are part of 
AYP.
    [sbull] Clarifying in Sec.  200.13(c)(1) and (2) that States can 
define achievement standards for students with the most significant 
cognitive disabilities who take an alternate assessment, but that the 
percentage of students with disabilities included in accountability 
measures using alternate standards cannot be more than .5 percent of 
all students assessed in a State or LEA.
    [sbull] Specifying in Sec.  200.16 that a State must set separate 
starting points for reading/language arts and mathematics, and 
permitting the establishment of separate starting points by grade span.
    [sbull] Clarifying in Sec.  200.20 the statutory requirement that 
95 percent of the students enrolled in each subgroup must take the 
State's academic assessment for the school to make AYP.
    [sbull] Requiring in Sec.  200.21 that the Secretary review both a 
State's AYP and its annual measurable achievement objectives relating 
to the English proficiency of limited English proficient students.
    [sbull] Reorganizing in Sec. Sec.  200.25 through 200.28 schoolwide 
program regulations to emphasize the fundamental purpose of a 
schoolwide program and to create smaller and simpler sections.
    [sbull] Clarifying in Sec. Sec.  200.30 and 200.31 the statutory 
requirement that an LEA conduct an annual review of the performance of 
all schools receiving funds under subpart A of the ESEA and provide 
schools with the data on which it has based a proposed identification 
for improvement, corrective action, or restructuring.
    [sbull] Clarifying in Sec. Sec.  200.32 through 200.35 the 
statutory provisions related to the LEA's identification of schools for 
improvement, corrective action, and restructuring as well as provisions 
governing the delay or termination of requirements related to 
identification.
    [sbull] Clarifying in Sec. Sec.  200.36 through 200.38 the manner 
in which State educational agencies (SEAs), LEAs, and schools must meet 
notification requirements under section 1116 of the ESEA.
    [sbull] Restating in Sec. Sec.  200.39 through 200.41 the statutory 
requirements related to both LEA and school-level responsibilities 
under the school improvement process.
    [sbull] Clarifying in Sec. Sec.  200.42 and 200.43 the statutory 
requirements related to corrective action and restructuring.
    [sbull] Restating and reorganizing in Sec.  200.44 the statutory 
provisions related to the public school choice option and clarifying 
the statutory deadline to provide this option.
    [sbull] Specifying in Sec. Sec.  200.45 through 200.47 requirements 
for the provision of supplemental services.
    [sbull] Clarifying in Sec.  200.48 statutory provisions regarding 
the reservation of funds to pay for choice-related transportation and 
supplemental educational services.
    [sbull] Clarifying in Sec. Sec.  200.49 through 200.51 statutory 
provisions related to SEA responsibilities in the school improvement 
process, including SEA review of LEA progress and notice requirements.
    [sbull] Including in Sec. Sec.  200.52 and 200.53 the statutory 
requirements for LEA improvement and corrective action.
    [sbull] Incorporating in Sec.  200.54 the statutory provision with 
respect to State or local laws or collective bargaining agreements in 
effect on January 8, 2002--the day the NCLB Act was signed into law.
    [sbull] Incorporating in Sec. Sec.  200.55 through 200.57 the 
statutory provisions regarding qualifications of teachers, and 
clarifying that the requirements apply to teachers of the core academic 
subjects and do not apply to teachers who do not teach core subjects, 
employees of third-party contractors, or supplemental services 
providers.
    [sbull] Incorporating in Sec. Sec.  200.58 and 200.59 statutory 
provisions governing paraprofessionals, clarifying that the term 
applies to individuals performing instructional support duties and to 
paraprofessionals in both targeted assistance and schoolwide program


[[Page 71711]]


schools supported by funds under subpart A of this part.
    [sbull] Clarifying in Sec.  200.60 that professional development 
funds may be used for paraprofessionals as well as teachers.
    [sbull] Incorporating in Sec. Sec.  200.61 through 200.66 statutory 
changes from the previous law governing the participation of eligible 
children in private schools and clarifying provisions in this area 
about which questions have arisen in the past.
    [sbull] Specifying in Sec. Sec.  200.70 through 200.75 procedures 
that SEAs must follow in adjusting allocations determined by the 
Secretary to account for unique situations within their states.
    [sbull] Clarifying in Sec. Sec.  200.77 and 200.78 within-district 
allocation procedures as specified in section 1113 of the ESEA.
    [sbull] Restating in Sec.  200.79 the criteria a State or local 
program must meet in order to be excluded from ``supplement not 
supplant'' and ``comparability'' determinations, and incorporating a 
change in the poverty threshold for schoolwide programs.
    [sbull] Clarifying in Sec. Sec.  200.81 through 200.88 program 
specific regulations for subpart C--Migrant Education Program (MEP).
    [sbull] Specifying that the regulations for subpart D--Prevention 
Programs for Children and Youth Who Are Neglected, Delinquent, or At-
risk of Dropping Out have not changed.
    [sbull] Clarifying in Sec. Sec.  200.100 through 200.103 new 
procedures an SEA must follow when reserving funds for school 
improvement, State administration, and the State academic achievement 
awards program, addressing the use of funds reserved for State 
administration, and providing certain definitions that apply to all of 
the programs governed by the regulations.
    The final regulations reflect these provisions, modified as noted 
in the analysis of comments and changes in the appendix.


Significant Changes From the NPRM


    [sbull] AYP Requirements: Numerous comments were received from 
states requesting information on potential flexibility in determining 
AYP. One of the cornerstones of the NCLB is its strong emphasis on 
accountability for results. Only if we hold schools and LEAs 
accountability for the improved achievement of all students will we 
meet the goal of leaving no child behind. As a result, the NCLB Act 
included very specific, rigorous requirements that States must 
implement to determine the AYP of each public school, LEA, and the 
State itself. In preparing the final regulations, the Secretary has 
faithfully implemented the statutory provisions governing AYP, 
addressing additional flexibility wherever possible. The Secretary 
realizes that the accountability systems currently in place in many 
States may not fully meet the statutory and regulatory requirements. To 
meet the requirements in NCLB and these final regulations, a State may 
continue to use its current State accountability system, consistent 
with Secretary's July 24, 2002 Dear Colleague letter, if that system 
integrates AYP, as defined in the statute and regulations, into its 
system. A State must submit evidence to the Secretary, for peer review, 
that thoroughly describes the State's accountability system and 
demonstrates how it has integrated the AYP provisions required by the 
statute and regulations.
    [sbull] AYP for students with the most significant cognitive 
disabilities: Section 200.13 of the NPRM would have allowed the use of 
alternate achievement standards for students with the most significant 
cognitive disabilities for determining the AYP of states and LEAs, 
provided that use did not exceed 0.5 percent of all students. Numerous 
comments were received on this proposal, with many of them indicating 
that commenters misunderstood this proposal as limiting the number of 
students with disabilities who could take an alternate assessment, 
rather than providing flexibility by allowing the use of alternate 
achievement standards to determine proficiency for calculating AYP for 
a limited group of students with disabilities. Because the Secretary 
believes that the policy may need further clarification, the Secretary 
will be seeking public comment in an NPRM to be published shortly on a 
proposed policy regarding the appropriate use of alternate achievement 
standards in determining AYP for students with the most significant 
cognitive disabilities.
    However, because it is critical to ensure that students with 
disabilities are not excluded from state accountability systems, the 
final regulations provide that the same grade level academic content 
and achievement standards that apply to all public schools and public 
school students in the State will be applied to alternate assessments. 
The Secretary anticipates that the separate NPRM will propose an 
exception to this policy for a small group of students with 
disabilities.
    [sbull] Graduation Rates and Other Indicators: Section 200.19 of 
the NPRM required States to include in their definition of AYP 
graduation rates and one other academic indicator for elementary and 
middle schools. The final regulation clarifies that States are required 
to use the other indicators to determine whether or not a school or LEA 
has made AYP.
    [sbull] Restructuring: Section 200.34 of the NPRM did not address 
school status after implementation of restructuring. The final 
regulations modify the NPRM by clarifying that a school in 
restructuring must continue to provide supplemental educational 
services and choice, and to implement its restructuring plan, until it 
has made AYP for two consecutive years.
    [sbull] School choice and capacity: Numerous commenters requested 
clarification of the NPRM on the issue of a school district's capacity 
to provide choice for all students. Section 200.44(d) of the final 
regulation clarifies that an LEA may not use lack of capacity to deny 
an eligible student the opportunity to transfer to another school not 
identified for improvement.
    [sbull] LEA responsibility for supplemental educational services. 
Sections 200.46(a)(4) and 200.47(a)(5) of the NPRM did not address the 
responsibility of LEAs and SEAs to ensure that limited English 
proficient students receive appropriate educational services and 
language assistance in the provision of supplemental services. The 
final regulation clarifies that both the LEA and SEA are required to 
ensure that students with limited English proficiency receive 
appropriate supplemental educational services and language assistance 
in the provision of those services.
    [sbull] Providers of supplemental educational services: Section 
200.47(b)(3) of the NPRM stated: ``A private provider may not, on the 
basis of disability, exclude a qualified student with disabilities or a 
student covered under Section 504 if the student can, with minor 
adjustments, be provided supplemental educational services designed to 
meet the individual educational needs of the student unless otherwise 
provided by law.'' NPRM provisions Sec. Sec.  200.46(a)(4) and 
200.47(a)(5) provided that LEAs and SEAs must ensure that eligible 
students with disabilities and students covered by Section 504 receive 
appropriate supplemental educational services and accommodations in the 
provision of those services. The final regulation is amended to 
eliminate the ``minor adjustments'' standard for private providers of 
supplemental services.
    [sbull] Scientifically Based Research and Supplemental Services 
Providers: Section 200.47(b)(4)(ii) of the NPRM prohibited states from 
requiring


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providers to demonstrate that their instructional strategies were based 
on scientifically based research as a condition of approval. The final 
regulation removes this restriction.
    [sbull] Alternate Certification: The NPRM specified that one of the 
requirements of being a ``highly qualified teacher'' is having obtained 
full State certification as a teacher--which may include certification 
obtained through alternative routes to certification. The final 
regulation adds language that requires teachers who are enrolled in 
alternative route programs to receive high-quality professional 
development before and while teaching, to participate in a program of 
intensive supervision or a teacher mentoring program, to assume the 
functions of a teacher while in the alternative route program only for 
a specified period of time not to exceed three years, and to 
demonstrate satisfactory progress toward full certification as 
prescribed by the State. The regulations have been further amended by 
requiring the State to ensure, through its certification and licensure 
process, that these provisions are met.


Analysis of Comments and Changes


    In response to the Secretary's invitation in the NPRM, 
approximately 140 parties submitted comments. An analysis of the 
comments and of the changes in the regulations since publication of the 
NPRM is published as an appendix at the end of these final regulations.
    We group major issues according to subject. We discuss other 
substantive issues under the sections of these regulations to which 
they pertain. Generally, we do not address regulatory provisions that 
are technical or otherwise minor in effect.


Waiver of Rulemaking


    In response to comments, the Secretary has added Sec.  200.61 in 
these final regulations regarding parents' right to know the 
qualifications of their child's teachers. This section merely 
incorporates statutory requirements in section 1111(h)(6) of Title I. 
The Secretary has included it, however, to emphasize the important 
responsibility of LEAs to notify parents of students in Title I schools 
that they have a right to request information regarding the 
professional qualifications of their child's teachers. Under the 
Administrative Procedure Act (5 U.S.C. 553), the Department generally 
offers interested parties the opportunity to comment on proposed 
regulations. However, these regulations merely reflect statutory 
provisions and do not establish or affect substantive policy. 
Therefore, under 5 U.S.C. 553(b)(B), the Secretary has determined that 
proposed regulations are unnecessary.


Executive Order 12866


    We have reviewed these final regulations in accordance with 
Executive Order 12866. Under the terms of the order, we have assessed 
the potential costs and benefits of this regulatory action.
    The potential costs associated with the final regulations are those 
resulting from statutory requirements, and those we have determined to 
be necessary for administering this program effectively and 
efficiently. Based on our assessment of the regulatory burden on 
States, LEAs, and schools, we estimate that the total cost of 
administering these regulations is $52 million. In deriving this cost 
estimate, we calculated the burden hours at the SEA level to be 55,952 
hours. Using a cost rate of $25 per hour at the SEA level, we estimated 
the administrative burden cost to States to be $1.4 million. At the LEA 
and school levels, we calculated the burden hours to be 2,530,476 
hours. Based on a cost rate of $20 per hour, the estimated 
administrative burden cost at the local level is $50.6 million. The 
section of this preamble on the Paperwork Reduction Act of 1995 
discusses the burden that the statutory requirements of the NCLB Act 
impose on States, LEAs, and schools in more detail. The fiscal year 
(FY) 2002 appropriation for Title I, part A provided a $1.6 billion (18 
percent) increase in funds. This increase in funding will enable 
States, LEAs, and schools to meet the administrative costs associated 
with the requirements of the NCLB Act at the State, LEA, and school 
levels.
    In assessing the potential costs of implementing these regulations 
compared to the $10.6 billion in Title I, Part A, Part C, and Part D, 
subpart 1 funds received by the States and LEAs, we have determined 
that the benefits of the regulations justify the costs. The FY 2002 
appropriation of $10.6 billion for these programs, which represents an 
18 percent increase over the prior year appropriation, will provide 
enough resources for States, LEAs, and schools to carry out the 
requirements of the statute. The NCLB Act represents a sweeping 
overhaul of Federal efforts to support elementary and secondary 
education in the United States and is a landmark in education reform 
designed to improve student achievement and change the culture of our 
nation's schools. The new law is based on four basic principles--
stronger accountability for results; greater flexibility for States, 
school districts, and schools in the use of Federal funds; more choices 
for parents of children from disadvantaged backgrounds; and an emphasis 
on teaching methods that have been demonstrated to work.
    We have also determined that this regulatory action does not unduly 
interfere with State, local, and tribal governments in the exercise of 
their governmental functions.
    Most of the final regulations would add clarity where the statute 
is ambiguous or unclear or would reorganize statutory provisions to 
facilitate a better understanding of their requirements. These 
regulations would not add significantly to the costs of implementing 
the Title I programs authorized by the Elementary and Secondary 
Education Act (ESEA) or alter the benefits that the Secretary believes 
will be obtained through successful implementation. The vast majority 
of the implementation costs and benefits will stem from the underlying 
legislation.
    The programs authorized by Title I of the ESEA, as reauthorized by 
the No Child Left Behind Act of 2001, have as their goal the education 
of all students, including students who are economically disadvantaged, 
limited English proficient, disabled, migratory, residing in 
institutions for neglected or delinquent youth and adults, or members 
of other groups typically considered ``at risk,'' so that they can 
achieve to challenging content and academic achievement standards. 
Thus, the benefits that will be obtained through the reauthorized Title 
I and its implementing regulations are those primarily of a more 
educated society. National data sets and studies by prominent 
researchers have demonstrated repeatedly that better education has 
major benefits, both economic and non-economic, not only for the 
individuals who receive it but for society as a whole. Nations that 
invest in quality education enjoy higher levels of growth and 
productivity, and a high-quality education system is an indispensable 
element of a strong economy and successful civil society.
    Data from the 1999 Current Population Survey, conducted by the 
Census Bureau, indicate that adults with a high school diploma (but no 
further education) had a median income of $23,061, compared to $17,015 
for those with no diploma and $15,098 for those with less than 9 years 
of education. High school graduates are more likely to continue their 
education and receive the additional skills and knowledge necessary to 
compete for jobs in a high-technology, knowledge-driven economy.


[[Page 71713]]


Scholars have also found strong, positive correlations between higher 
levels of schooling and higher lifetime earnings, higher savings rates, 
and reduced costs of job search.
    Researchers have, in addition, found that more and better education 
correlates with other outcomes that, while not directly related to 
employment and earnings, have a major, positive benefit on society. 
More educated individuals lead healthier lives and have lower mortality 
rates. They are more likely to donate time and money to charity, and to 
vote in elections. Researchers have demonstrated the intergenerational 
impact of education, as the educational level of parents is a positive 
predictor of children's health, cognitive development, education, 
occupational status, and future earnings. In addition, education is 
negatively correlated with criminal activity and incarceration, and 
more educated mothers are less likely to have daughters who give birth 
out of wedlock as teens.
    The reauthorized Title I programs, and the final regulations for 
those programs, will also lead to improvements in the qualifications of 
teachers, both in programs supported by Title I and in schools 
generally. The Department believes that the new teacher qualifications 
provisions will also convey major benefits on students and on society 
generally. Research has found that the academic success of children is 
more dependent on teacher quality than on any other variable, with the 
exception of family background; it is, in other words, the most 
important school-related determinant of achievement.
    The major costs to States and to LEAs imposed by the statute and 
the regulations are the costs of administering the Title I programs: At 
the State level, distributing funds to LEAs, monitoring LEA activities, 
providing technical assistance, and carrying out other activities 
specified in the statute, and, at the local level, administering 
programs in schools and classrooms, providing professional development 
to teachers and other staff, and ensuring program accountability, among 
other things. The Department believes that these activities will be 
financed through the appropriations for Title I and other Federal 
programs and that the responsibilities encompassed in the law and 
regulations will not impose a financial burden that States and LEAs 
will have to meet from non-Federal resources. For purposes of the 
Unfunded Mandates Reform Act of 1995, these regulations do not include 
a Federal mandate that might result in increased expenditures by State, 
local, and tribal governments, or increased expenditures by the private 
sector of more than $100 million in any one year.


Regulatory Flexibility Act


    This Final Regulatory Flexibility Analysis (FRFA) has been prepared 
in accordance with the Regulatory Flexibility Act. It involves final 
regulations under Title I of the ESEA, as amended by the NCLB Act. Its 
provisions require LEAs, without regard to size, to take certain 
actions to improve student academic achievement.


1. Need for, Objectives of, and Legal Basis for Final Regulations


    The purpose of the final regulations is to implement recent changes 
to Title I of the ESEA made by the NCLB Act. We are issuing final 
regulation under the authority in section 1901(a) of Title I.


2. Summary of Significant Issues Raised in Response to the Initial 
Regulatory Flexibility Analysis (IRFA)


    We have received no comments concerning the cost implications of 
these regulations on small entities as result of our request for 
comments to the IRFA published in the NPRM on August 6, 2002. However, 
there was one comment on the proposed regulation regarding the impact 
of particular provisions on small LEAs.
    Comment: One commenter recommended that the final regulations 
provide flexibility in defining AYP for small school districts, and 
single-school LEAs in particular, that may find it difficult to 
implement the subgroup-based accountability requirements of the Act.
    Discussion: The intent of the law is to ensure that all schools and 
districts are held accountable for student achievement. In those 
instances where schools and districts are too small to include any 
subgroups, the school and district will need to make a decision about 
AYP at least on the basis of all its students who were within the 
school or district for a full academic year. The Department of 
Education will issue nonregulatory guidance to advise States about 
particular methodologies for handling this issue. The regulations 
clarify at Sec.  200.7(d) that subgroups too small to be reported or 
identified at one level must be included at the next higher level, 
assuming the subgroup reaches the appropriate size.


3. A Description of the Small Entities to Which These Regulations Will 
Apply


    The small entities that would be affected by these final 
regulations are small LEAs receiving Federal funds under Title I 
programs. Based on the Small Business Administration's (SBA) standards, 
which defines ``small entities'' as those jurisdictions serving a 
population of less than 50,000, 13,231 LEAs out of a total of 13,335 
LEAs that receive Title I, part A funds would be considered small. As 
noted earlier, the FY 2002 appropriation provides a $1.6 billion 
increase in the Title I, part A amount available for school year 2002-
03 to States and to all LEAs, both large and small.


4. Reporting, Recordkeeping and Other Compliance Requirements


    Under these regulations, an LEA must: (1) Publicize and disseminate 
the results of its annual progress review, (2) notify parents and 
teachers of any school identified for improvement or subject to 
corrective action or restructuring, (3) publicize and disseminate 
information regarding any action taken by the school and LEA to address 
the problems that led to the identification, and (4) for schools 
subject to restructuring, prepare a plan to carry out alternative 
governance arrangements. An LEA also must maintain in its records, and 
provide to the SEA, a written affirmation, signed by officials of each 
private school with participating children or appropriate private 
school representatives, that the required consultation has occurred. 
The potential costs and benefits of associated with these regulations 
are discussed in the section on Executive Order 12866.


5. Agency Action To Minimize Effect on Small Entities


    The Regulatory Flexibility Act directs us to consider significant 
alternatives that would accomplish the stated objectives, while 
minimizing any significant adverse impact on small entities. Although 
the NCLB Act makes no special provisions for ``small'' LEAs that serve 
fewer than 50,000 students, which account for 99 percent of all school 
districts receiving Title I part A funds, the Department has, to the 
extent allowable under the statute accommodated small LEAs in these 
regulations. For example, Sec.  200.74 of the regulations outlines 
procedures a State must use in using alternative poverty data, which it 
believes better reflect where poor children are located, to determine 
final Title I allocations for LEAs with a total population of less than 
20,000. This provision potentially applies to roughly 80 percent of all 
LEAs nationally that meet this criteria. LEAs with fewer than 1,000 
students enrolled are exempt from the within-district allocation 
requirements outlined


[[Page 71714]]


in Sec.  200.78. More than 4,060 LEAs receiving Title I Part A funds 
are affected by this policy. Moreover, activities required under these 
regulations would be financed through the appropriations for Title I 
programs, which have increased by $1.6 billion for FY 2002, and the 
responsibilities encompassed in the law and regulations would not 
impose a financial burden that small entities would have to meet from 
non-Federal resources.


Paperwork Reduction Act of 1995


    The Paperwork Reduction Act of 1995 does not require you to respond 
to a collection of information unless it displays a valid Office of 
Management and Budget (OMB) control number. We display the valid OMB 
control numbers assigned to the collections of information in these 
final regulations at the end of the affected sections of the 
regulations.
    Title I, part A of the Elementary and Secondary Education, as 
amended by the No Child Left Behind Act, contains several provisions 
that require SEAs, LEAs, or schools to collect or disseminate 
information. They are: Sections 200.26, 200.27, 200.28, 200.30, 200.31, 
200.34, 200.36, 200.37, 200.38, 200.39, 200.41, 200.42, 200.43, 200.45, 
200.46, 200.47, 200.49, 200.50, 200.51, 200.52, 200.57, 200.61, and 
200.62. Section 200.61 was added to the final regulation to incorporate 
statutory language requiring LEAs to notify parents that they may 
request information about the professional qualifications of their 
child's classroom teacher. All these sections relate to OMB control 
number 1810-0581. Sections 200.12, 200.13, and 200.33 are covered under 
OMB control number 1810-0576. Section 200.53 is covered under OMB 
control number 1810-0516. Sections 200.70 through 200.75 and 200.100 
are covered under OMB control numbers 1810-0620 and 1810-0622. Section 
200.83, 200.84, and 200.88 are covered under OMB control number 1810-
0659. Section 200.91 is covered under OMB control number 1810-0060.
    SEAs must: (1) Provide annual notice to potential supplemental 
service providers of the opportunity to provide such services, (2) 
maintain an updated list of approved providers from which parents may 
select, and (3) publicly report on standards and techniques for 
monitoring the quality and effectiveness of the services offered by 
each approved provider and for withdrawing approval from a provider 
that fails, for two consecutive years, to contribute to increasing the 
academic proficiency of students receiving supplemental services. As 
part of their responsibility to annually review the progress of each 
LEA to determine whether schools are making AYP, SEAs must: (1) 
Provide, before the beginning of the next school year, the results of 
academic assessments administered as part of the State assessment 
system in a given school year to LEAs, (2) publicize and disseminate 
the results of the State review, (3) notify parents when LEAs are 
identified for improvement or corrective action, including providing 
information on the corrective action, and (4) notify the Secretary of 
Education of major factors that have significantly affected student 
academic achievement in schools identified for improvement. 
Additionally, under Title I, part D, States must submit a count of 
children and youth under the age of 21 enrolled in a regular program of 
instruction operated or supported by State agencies in institutions or 
community day programs for neglected children and youth and adult 
correctional institutions.
    As part of their responsibility to annually review the progress of 
schools to determine whether they are making AYP, each LEA must (1) 
publicize and disseminate the results of its annual progress review, 
(2) notify parents and teachers of any school identified for 
improvement or subject to corrective action or restructuring, (3) 
publicize and disseminate information regarding any action taken by the 
school and LEA to address the problems that lead to the identification, 
and (4) for schools subject to restructuring, prepare a plan to carry 
out alternative governance arrangements. LEAs also must maintain in 
their records, and provide to the SEA, written affirmation signed by 
officials of each private school with participating children, or 
appropriate private school representatives, that the required 
consultation has occurred.
    At the school level, an eligible school choosing to operate a 
schoolwide program must develop a comprehensive schoolwide plan and 
maintain records demonstrating that it addresses the intent and purpose 
of each Federal program included.
    The total estimated burden hours for SEA activities covered by the 
paperwork requirements are 55,952 across 52 SEAs. The total estimated 
burden hours for LEA activities covered by the paperwork requirements 
are 1,119,500 hours across 13,335 LEAs. The total estimated burden 
hours for school-level activities is 1,410,976 hours. Almost all the 
burden hours at the LEA and school level result from statutory 
requirements that require: (1) LEAs to prepare restructuring plans for 
schools that do not make AYP after one full year in corrective action, 
and (2) schools seeking to operate schoolwide programs to develop 
schoolwide program plans. The actual impact on an individual LEA or 
school will vary depending on whether the LEA or school is subject to 
these specific requirements. The estimate of the burden hours at the 
LEA level includes an estimate of additional hours that result from 
adding a new Sec.  200.61 to the final regulations, which requires an 
LEA to notify parents that they can request information about the 
professional qualifications of their child's classroom teacher.
    Section 200.83 outlines an SEA's responsibility to implement its 
State Title I, part C (Migrant Education) program through a 
comprehensive needs assessment and a comprehensive State plan for 
service delivery. Section 200.84 outlines an SEA's responsibility for 
evaluating the effectiveness of its Title I, part C (Migrant Education) 
program. The yearly estimated public reporting burden for the 
collection of information to implement these two regulatory 
requirements is 19,925 hours. The Department requested that the Office 
of Management and Budget (OMB)review the information collections, 1810-
0581 and 1810-0659, on an emergency basis. Although these information 
collections have been approved on an emergency basis, we continue to 
invite your comments through January 31, 2003. We request those wishing 
to comment to send their comments to the individual identified in the 
FOR FURTHER INFORMATION CONTACT section of this notice.


Unfunded Mandates Reform Act of 1995


    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effect of 
their regulatory actions on State, local and tribal government and the 
private sector. These regulations contain no Federal mandates (under 
the regulatory provisions of Title II of the UMRA) for State, local, 
and tribal governments or the private sector. As noted in the cost/
benefit analysis, the fiscal year 2002 appropriation for Title I, part 
A provided a $1.6 billion (18 percent) increase in funds for States to 
use in implementing the changes mandated by the NCLB Act. Therefore, 
these regulations are not subject to the requirements of sections 202 
and 205 of UMRA.


Federalism


    Executive Order 13132 requires us to ensure meaningful and timely 
input by State and local elected officials in the


[[Page 71715]]


development of regulatory policies that have federalism implications. 
``Federalism implications'' means substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Although we did not believe our NPRM 
would have federalism implications, we encouraged State and local 
elected officials to review the NPRM for federalism implications and to 
provide comments. We did not receive any comments on federalism 
implications. We also consulted extensively with Chief State School 
Officers, other State representatives, Superintendents, and leaders of 
various education organizations. In May of 2002, we hosted a series of 
regional meetings to share important information about the proposed 
regulations during the public comment period. We also conducted 
numerous teleconferences with State Chiefs and their staff to learn 
more about the implications of these regulations.
    These regulations implement various statutory changes to Title I of 
the ESEA made by the NCLB Act. We do not believe that these regulations 
have federalism implications as defined in Executive Order 13132 or 
that they preempt State law. Accordingly, the Secretary has determined 
that these regulations do not contain policies that have federalism 
implications.


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 the following site: 
http://www.ed.gov/legislation/FedRegister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, 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 Numbers: 84.010 Improving 
Programs Operated by Local Educational Agencies, 84.011 Education of 
Migrant Children, 84.013, Prevention and Intervention Programs for 
Children and Youth Who Are Neglected, Delinquent, or At-Risk of 
Dropping Out, 84.214A Even Start--Migrant Education)


List of Subjects in 34 CFR Part 200


    Administrative practice and procedure, Adult education, Children, 
Coordination, Education of children with disabilities, Education of 
disadvantaged children, Elementary and secondary education, 
Eligibility, Family, Family-centered education, Grant programs-
education, Indians education, Institutions of higher education, 
Interstate coordination, Intrastate coordination, Juvenile delinquency, 
Local educational agencies, Migratory children, Migratory workers, 
Neglected, Nonprofit private agencies, Private schools, Public 
agencies, Reporting and recordkeeping requirements, State-administered 
programs, State educational agencies, Subgrants.


    Dated: November 25, 2002.
Rod Paige,
Secretary of Education.




    The Secretary amends part 200 of title 34 of the Code of Federal 
Regulations as follows:


PART 200--TITLE I--IMPROVING THE ACADEMIC ACHIEVEMENT OF THE 
DISADVANTAGED


    1-2. The authority citation for part 200 is revised to read as 
follows:


    Authority: 20 U.S.C. 6301 through 6578, unless otherwise noted.


Subpart A--Improving Basic Programs Operated by Local Educational 
Agencies


    3. In Sec.  200.6, revise paragraph (a)(2) to read as follows:




Sec.  200.6  Inclusion of all students.


    (a) * * *
    (2) Alternate assessments. (i) The State's academic assessment 
system must provide for one or more alternate assessments for a child 
with a disability as defined under section 602(3) of the Individuals 
with Disabilities Education Act (IDEA) whom the child's IEP team 
determines cannot participate in all or part of the State assessments 
under paragraph (a)(1) of this section, even with appropriate 
accommodations.
    (ii) Alternate assessments must yield results for the grade in 
which the student is enrolled in at least reading/language arts, 
mathematics, and, beginning in the 2007-2008 school year, science.
* * * * *


    4. In Sec.  200.7, add new paragraphs (c) and (d) to read as 
follows:




Sec.  200.7  Disaggregation of data.


* * * * *
    (c) Inclusion of subgroups in assessments. If a subgroup under 
Sec.  200.2(b)(10) is not of sufficient size to produce statistically 
reliable results, the State must still include students in that 
subgroup in its State assessments under Sec.  200.2.
    (d) Disaggregation at the LEA and State. If the number of students 
in a subgroup is not statistically reliable at the school level, the 
State must include those students in disaggregations at each level for 
which the number of students is statistically reliable--e.g., the LEA 
or State level.


    5. In subpart A to part 200, remove the undesignated center 
headings ``Participation of Eligible Children in Private Schools'', 
``Capital Expenses'', ``Schoolwide Programs'', Procedures for the 
Within-State Allocation of LEA Program Funds'', and ``Procedures for 
the Within-District Allocation of LEA Program Funds''.


    6. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec.  200.10 to read as follows:


Participation in National Assessment of Educational Progress (NAEP)


    7. Revise Sec.  200.11 and place it under the new undesignated 
center heading ``Participation in National Assessment of Educational 
Progress (NAEP)'' in subpart A of part 200 to read as follows:




Sec.  200.11  Participation in NAEP.


    (a) State participation. Beginning in the 2002-2003 school year, 
each State that receives funds under subpart A of this part must 
participate in biennial State academic assessments of fourth and eighth 
grade reading and mathematics under the State National Assessment of 
Educational Progress (NAEP), if the Department pays the costs of 
administering those assessments.
    (b) Local participation. In accordance with section 1112(b)(1)(F) 
of the Elementary and Secondary Education Act of 1965 (ESEA), and 
notwithstanding section 411(d)(1) of the National Education Statistics 
Act of 1994, an LEA that receives funds under subpart A of this part 
must participate, if selected, in the State-NAEP assessments referred 
to in paragraph (a) of this section.


(Authority: 20 U.S.C. 6311(c)(2); 6312(b)(1)(F), 9010(d)(1))


    8. Add a new undesignated center heading to subpart A of part 200 
and place it after revised Sec.  200.11 to read as follows:


[[Page 71716]]


State Accountability System


    9. Revise Sec.  200.12 and place it under the new undesignated 
center heading ``State Accountability System'' in subpart A of part 200 
to read as follows:




Sec.  200.12  Single State accountability system.


    (a)(1) Each State must demonstrate in its State plan that the State 
has developed and is implementing, beginning with the 2002-2003 school 
year, a single, statewide accountability system.
    (2) The State's accountability system must be effective in ensuring 
that all public elementary and secondary schools and LEAs in the State 
make adequate yearly progress (AYP) as defined in Sec. Sec.  200.13 
through 200.20.
    (b) The State's accountability system must--
    (1) Be based on the State's academic standards under Sec.  200.1, 
academic assessments under Sec.  200.2, and other academic indicators 
under Sec.  200.19;
    (2) Take into account the achievement of all public elementary and 
secondary school students;
    (3) Be the same accountability system the State uses for all public 
elementary and secondary schools and all LEAs in the State; and
    (4) Include sanctions and rewards that the State will use to hold 
public elementary and secondary schools and LEAs accountable for 
student achievement and for making AYP, except that the State is not 
required to subject schools and LEAs not participating under subpart A 
of this part to the requirements of section 1116 of the ESEA. (Approved 
by the Office of Management and Budget under control number 1810-0576)


(Authority: 20 U.S.C. 6311(b)(2)(A))




    10. Add a new undesignated center heading to subpart A of part 200 
and place it after revised Sec.  200.12 to read as follows:


Adequate Yearly Progress (AYP)


    11. Revise Sec. Sec.  200.13 through 200.18 and place them under 
the new undesignated center heading ``Adequate Yearly Progress (AYP)'' 
in subpart A of part 200 to read as follows:




Sec.  200.13  Adequate yearly progress in general.


    (a) Each State must demonstrate in its State plan what constitutes 
AYP of the State and of all public schools and LEAs in the State--
    (1) Toward enabling all public school students to meet the State's 
student academic achievement standards; while
    (2) Working toward the goal of narrowing the achievement gaps in 
the State, its LEAs, and its public schools.
    (b) A State must define, in accordance with Sec. Sec.  200.14 
through 200.20, in a manner that--
    (1) Applies the same high standards of academic achievement to all 
public school students in the State;
    (2) Is statistically valid and reliable;
    (3) Results in continuous and substantial academic improvement for 
all students;
    (4) Measures the progress of all public schools, LEAs, and the 
State based primarily on the State's academic assessment system under 
Sec.  200.2;
    (5) Measures progress separately for reading/language arts and for 
mathematics;
    (6) Is the same for all public schools and LEAs in the State; and
    (7) Consistent with Sec.  200.7, applies the same annual measurable 
objectives under Sec.  200.18 separately to each of the following:
    (i) All public school students.
    (ii) Students in each of the following subgroups:
    (A) Economically disadvantaged students.
    (B) Students from major racial and ethnic groups.
    (C) Students with disabilities, as defined in section 9101(5) of 
the ESEA.
    (D) Students with limited English proficiency, as defined in 
section 9101(25) of the ESEA.
    (c) The State must establish a way to hold accountable schools in 
which no grade level is assessed under the State's academic assessment 
system (e.g., K-2 schools), although the State is not required to 
administer a formal assessment to meet this requirement.


(Approved by the Office of Management and Budget under control 
number 1810-0576)


(Authority: 20 U.S.C. 6311(b)(2))


Sec.  200.14  Components of Adequate Yearly Progress.


    A State's definition of AYP must include all of the following:
    (a) A timeline in accordance with Sec.  200.15.
    (b) Starting points in accordance with Sec.  200.16.
    (c) Intermediate goals in accordance with Sec.  200.17.
    (d) Annual measurable objectives in accordance with Sec.  200.18.
    (e) Other academic indicators in accordance with Sec.  200.19.
(Authority: 20 U.S.C. 6311(b)(2))




Sec.  200.15  Timeline.


    (a) Each State must establish a timeline for making AYP that 
ensures that, not later than the 2013-2014 school year, all students in 
each group described in Sec.  200.13(b)(7) will meet or exceed the 
State's proficient level of academic achievement.
    (b) Notwithstanding subsequent changes a State may make to its 
academic assessment system or its definition of AYP under Sec. Sec.  
200.13 through 200.20, the State may not extend its timeline for all 
students to reach proficiency beyond the 2013-2014 school year.


(Authority: 20 U.S.C. 6311(b)(2))


Sec.  200.16  Starting points.


    (a) Using data from the 2001-2002 school year, each State must 
establish starting points in reading/language arts and in mathematics 
for measuring the percentage of students meeting or exceeding the 
State's proficient level of academic achievement.
    (b) Each starting point must be based, at a minimum, on the higher 
of the following percentages of students at the proficient level:
    (1) The percentage in the State of proficient students in the 
lowest-achieving subgroup of students under Sec.  200.13(b)(7)(ii).
    (2) The percentage of proficient students in the school that 
represents 20 percent of the State's total enrollment among all schools 
ranked by the percentage of students at the proficient level. The State 
must determine this percentage as follows:
    (i) Rank each school in the State according to the percentage of 
proficient students in the school.
    (ii) Determine 20 percent of the total enrollment in all schools in 
the State.
    (iii) Beginning with the lowest-ranked school, add the number of 
students enrolled in each school until reaching the school that 
represents 20 percent of the State's total enrollment among all 
schools.
    (iv) Identify the percentage of proficient students in the school 
identified in paragraph (iii).
    (c)(1) Except as permitted under paragraph (c)(2) of this section, 
each starting point must be the same throughout the State for each 
school, each LEA, and each group of students under Sec.  200.13(b)(7).
    (2) A State may use the procedures under paragraph (b) of this 
section to establish separate starting points by grade span.


(Authority: 20 U.S.C. 6311(b)(2))


Sec.  200.17  Intermediate goals.


    Each State must establish intermediate goals that increase in equal


[[Page 71717]]


increments over the period covered by the timeline under Sec.  200.15 
as follows:
    (a) The first incremental increase must take effect not later than 
the 2004-2005 school year.
    (b) Each following incremental increase must occur in not more than 
three years.


(Authority: 20 U.S.C. 6311(b)(2))




Sec.  200.18  Annual measurable objectives.


    (a) Each State must establish annual measurable objectives that--
    (1) Identify for each year a minimum percentage of students that 
must meet or exceed the proficient level of academic achievement on the 
State's academic assessments; and
    (2) Ensure that all students meet or exceed the State's proficient 
level of academic achievement within the timeline under Sec.  200.15.
    (b) The State's annual measurable objectives--
    (1) Must be the same throughout the State for each school, each 
LEA, and each group of students under Sec.  200.13(b)(7); and
    (2) May be the same for more than one year, consistent with the 
State's intermediate goals under Sec.  200.17.


(Authority: 20 U.S.C. 6311(b)(2))


    12. Add Sec.  200.19 and place it under the new undesignated center 
heading ``Adequate Yearly Progress (AYP)'' in subpart A of part 200 to 
read as follows:




Sec.  200.19  Other academic indicators.


    (a) Each State must use the following other academic indicators to 
determine AYP:
    (1) High schools. (i) The graduation rate for public high schools, 
which means--
    (A) The percentage of students, measured from the beginning of high 
school, who graduate from high school with a regular diploma (not 
including an alternative degree that is not fully aligned with the 
State's academic standards, such as a certificate or a GED) in the 
standard number of years; or
    (B) Another definition, developed by the State and approved by the 
Secretary in the State plan, that more accurately measures the rate of 
students who graduate from high school with a regular diploma as 
defined in paragraph (a)(1)(i)(A) of this section.
    (ii) In defining graduation rate, the State must avoid counting a 
dropout as a transfer.
    (2) Elementary and middle schools. At least one academic indicator 
for public elementary schools and at least one academic indicator for 
public middle schools, such as those under paragraph (b) of this 
section.
    (b) The State may include additional academic indicators determined 
by the State, including, but not limited to, the following:
    (1) Additional State or locally administered assessments not 
included in the State assessment system under Sec.  200.2.
    (2) Grade-to-grade retention rates.
    (3) Attendance rates.
    (4) Percentages of students completing gifted and talented, 
advanced placement, and college preparatory courses.
    (c) A State must ensure that its other academic indicators are--
    (1) Valid and reliable;
    (2) Consistent with relevant, nationally recognized professional 
and technical standards, if any; and
    (3) Consistent throughout the State within each grade span.
    (d)(1) A State may, but is not required to, increase the goals of 
its other academic indicators over the course of the timeline under 
Sec.  200.15.
    (2) The State--
    (i) Must disaggregate its other academic indicators by each group 
in Sec.  200.13(b)(7) for purposes of Sec.  200.20(b)(2) and section 
1111(h) of the ESEA; but
    (ii) Need not disaggregate those indicators for determining AYP 
except as required under section 1111(b)(2)(C)(vii) of the ESEA.
    (e) Except as provided in Sec.  200.20(b)(2), a State--
    (1) May not use the indicators in paragraphs (a) and (b) of this 
section to reduce the number, or change the identity, of schools that 
would otherwise be subject to school improvement, corrective action, or 
restructuring if those indicators were not used; but
    (2) May use the indicators to identify additional schools for 
school improvement, corrective action, or restructuring.


(Authority: 20 U.S.C. 6311(b)(2), (h))




    13. Revise Sec. Sec.  200.20 and 200.21 and place them under the 
new undesignated center heading ``Adequate Yearly Progress (AYP)'' in 
subpart A of part 200 to read as follows:




Sec.  200.20  Making adequate yearly progress.


    A school or LEA makes AYP if it complies with paragraph (c) and 
with either paragraph (a) or (b) of this section separately in reading/
language arts and in mathematics.
    (a)(1) A school or LEA makes AYP if--
    (i) Each group of students under Sec.  200.13(b)(7) meets or 
exceeds the State's annual measurable objectives under Sec.  200.18; 
and
    (ii) The school or LEA, respectively, meets or exceeds the State's 
other academic indicators under Sec.  200.19.
    (2) For a group under Sec.  200.13(b)(7) to be included in the 
determination of AYP for a school or LEA, the number of students in the 
group must be sufficient to yield statistically reliable information 
under Sec.  200.7(a).
    (b) If students in any group under Sec.  200.13(b)(7) in a school 
or LEA do not meet the State's annual measurable objectives under Sec.  
200.18, the school or LEA makes AYP if--
    (1) The percentage of students in that group below the State's 
proficient achievement level decreased by at least 10 percent from the 
preceding year; and
    (2) That group made progress on one or more of the State's academic 
indicators under Sec.  200.19 or the LEA's academic indicators under 
Sec.  200.30(c).
    (c)(1) A school or LEA makes AYP if--
    (i) Not less than 95 percent of the students enrolled in each group 
under Sec.  200.13(b)(7) takes the State assessments under Sec.  200.2; 
and
    (ii) The group is of sufficient size to produce statistically 
reliable results under Sec.  200.7(a).
    (2) The requirement in paragraph (c)(1) of this section does not 
authorize a State, LEA, or school to systematically exclude 5 percent 
of the students in any group under Sec.  200.13(b)(7).
    (3) If a student takes the State assessments for a particular 
subject or grade level more than once, the State must use the student's 
results from the first administration to determine AYP.
    (d) For the purpose of determining whether a school or LEA has made 
AYP, a State may establish a uniform procedure for averaging data that 
includes one or more of the following:
    (1) Averaging data across school years. (i) A State may average 
data from the school year for which the determination is made with data 
from one or two school years immediately preceding that school year.
    (ii) If a State averages data across school years, the State must--
    (A) Implement, on schedule, the assessments in reading/language 
arts and mathematics in grades 3 through 8 and once in grades 10 
through 12 required under Sec.  200.5(a)(2);
    (B) Report data resulting from the assessments under Sec.  
200.5(a)(2);
    (C) Determine AYP under Sec. Sec.  200.13 through 200.20, although 
the State may base that determination on data only from the reading/
language arts and mathematics assessments in the three grade spans 
required under Sec.  200.5(a)(1); and
    (D) Implement the requirements in section 1116 of the ESEA.


[[Page 71718]]


    (iii) A State that averages data across years must determine AYP on 
the basis of the assessments under Sec.  200.5(a)(2) as soon as it has 
data from two or three years to average. Until that time, the State may 
use data from the reading/language arts and mathematics assessments 
required under Sec.  200.5(a)(1) to determine adequate yearly progress.
    (2) Combining data across grades. Within each subject area and 
subgroup, the State may combine data across grades in a school or LEA.
    (e)(1) In determining the AYP of an LEA, a State must include all 
students who were enrolled in schools in the LEA for a full academic 
year, as defined by the State.
    (2) In determining the AYP of a school, the State may not include 
students who were not enrolled in that school for a full academic year, 
as defined by the State.


(Authority: 20 U.S.C. 6311(b)(2), (b)(3)(C)(xi))


Sec.  200.21  Adequate yearly progress of a State.


    For each State that receives funds under subpart A of this part and 
under subpart 1 of part A of Title III of the ESEA, the Secretary must, 
beginning with the 2004-2005 school year, annually review whether the 
State has--
    (a)(1) Made AYP as defined by the State in accordance with 
Sec. Sec.  200.13 through 200.20 for each group of students in Sec.  
200.13(b)(7); and
    (2) Met its annual measurable achievement objectives under section 
3122(a) of the ESEA relating to the development and attainment of 
English proficiency by limited English proficient students.
    (b) A State must include all students who were enrolled in schools 
in the State for a full academic year in reporting on the yearly 
progress of the State.


(Authority: 20 U.S.C. 7325)




    14. Remove and reserve Sec. Sec.  200.22 through 200.24 and place 
them under the new undesignated center heading ``Adequate Yearly 
Progress (AYP)'' in subpart A of part 200.


    15. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec.  200.24 to read as follows:


Schoolwide Programs


    16. Revise Sec.  200.25 and place it under the undesignated center 
heading ``Schoolwide Programs'' in subpart A of part 200 to read as 
follows:




Sec.  200.25  Schoolwide programs in general.


    (a) Purpose. (1) The purpose of a schoolwide program is to improve 
academic achievement throughout a school so that all students, 
particularly the lowest-achieving students, demonstrate proficiency 
related to the State's academic standards under Sec.  200.1.
    (2) The improved achievement is to result from improving the entire 
educational program of the school.
    (b) Eligibility. (1) A school may operate a schoolwide program if--
    (i) The school's LEA determines that the school serves an eligible 
attendance area or is a participating school under section 1113 of the 
ESEA; and
    (ii) For the initial year of the schoolwide program--
    (A) The school serves a school attendance area in which not less 
than 40 percent of the children are from low-income families; or
    (B) Not less than 40 percent of the children enrolled in the school 
are from low-income families.
    (2) In determining the percentage of children from low-income 
families under paragraph (b)(1)(ii) of this section, the LEA may use a 
measure of poverty that is different from the measure or measures of 
poverty used by the LEA to identify and rank school attendance areas 
for eligibility and participation under subpart A of this part.
    (c) Participating students and services. A school operating a 
schoolwide program is not required to--
    (1) Identify particular children as eligible to participate; or
    (2) As required under section 1120A(b) of the ESEA, provide 
services that supplement, and do not supplant, the services 
participating children would otherwise receive if they were not 
participating in a program under subpart A of this part.
    (d) Supplemental funds. A school operating a schoolwide program 
must use funds available under subpart A of this part and under any 
other Federal program included under paragraph (e) of this section and 
Sec.  200.29 only to supplement the total amount of funds that would, 
in the absence of the Federal funds, be made available from non-Federal 
sources for that school, including funds needed to provide services 
that are required by law for children with disabilities and children 
with limited English proficiency.
    (e) Consolidation of funds. An eligible school may, consistent with 
Sec.  200.29, consolidate and use funds or services under subpart A of 
this part, together with other Federal, State, and local funds that the 
school receives, to operate a schoolwide program in accordance with 
Sec. Sec.  200.25 through 200.29.
    (f) Prekindergarten program. A school operating a schoolwide 
program may use funds made available under subpart A of this part to 
establish or enhance prekindergarten programs for children below the 
age of 6, such as Even Start programs or Early Reading First programs.


(Authority: 20 U.S.C. 6314)




    17. Add a new Sec.  200.26 and place it under the undesignated 
center heading ``Schoolwide Programs'' in subpart A of part 200 to read 
as follows:




Sec.  200.26  Core elements of a schoolwide program.


    (a) Comprehensive needs assessment. (1) A school operating a 
schoolwide program must conduct a comprehensive needs assessment of the 
entire school that--
    (i) Is based on academic achievement information about all students 
in the school, including all groups under Sec.  200.13(b)(7) and 
migratory children as defined in section 1309(2) of the ESEA, relative 
to the State's academic standards under Sec.  200.1 to--
    (A) Help the school understand the subjects and skills for which 
teaching and learning need to be improved; and
    (B) Identify the specific academic needs of students and groups of 
students who are not yet achieving the State's academic standards; and
    (ii) Assesses the needs of the school relative to each of the 
components of the schoolwide program under Sec.  200.28.
    (2) The comprehensive needs assessment must be developed with the 
participation of individuals who will carry out the schoolwide program 
plan.
    (3) The school must document how it conducted the needs assessment, 
the results it obtained, and the conclusions it drew from those 
results.
    (b) Comprehensive plan. Using data from the comprehensive needs 
assessment under paragraph (a) of this section, a school that wishes to 
operate a schoolwide program must develop a comprehensive plan, in 
accordance with Sec.  200.27, that describes how the school will 
improve academic achievement throughout the school, but particularly 
for those students furthest away from demonstrating proficiency, so 
that all students demonstrate at least proficiency on the State's 
academic standards.
    (c) Evaluation. A school operating a schoolwide program must--
    (1) Annually evaluate the implementation of, and results achieved 
by, the schoolwide program, using data from the State's annual 
assessments and other indicators of academic achievement;


[[Page 71719]]


    (2) Determine whether the schoolwide program has been effective in 
increasing the achievement of students in meeting the State's academic 
standards, particularly for those students who had been furthest from 
achieving the standards; and
    (3) Revise the plan, as necessary, based on the results of the 
evaluation, to ensure continuous improvement of students in the 
schoolwide program.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6314)




    18. Revise Sec. Sec.  200.27 and 200.28 and place them under the 
undesignated center heading ``Schoolwide Programs'' in subpart A of 
part 200 to read as follows:




Sec.  200.27  Development of a schoolwide program plan.


    (a)(1) A school operating a schoolwide program must develop a 
comprehensive plan to improve teaching and learning throughout the 
school.
    (2) The school must develop the comprehensive plan in consultation 
with the LEA and its school support team or other technical assistance 
provider under section 1117 of the ESEA.
    (3) The comprehensive plan must--
    (i) Describe how the school will carry out each of the components 
under Sec.  200.28;
    (ii) Describe how the school will use resources under subpart A of 
this part and from other sources to carry out the components under 
Sec.  200.28; and
    (iii) Include a list of State and local programs and other Federal 
programs under Sec.  200.29 that the school will consolidate in the 
schoolwide program.
    (b)(1) The school must develop the comprehensive plan, including 
the comprehensive needs assessment, over a one-year period unless--
    (i) The LEA, after considering the recommendations of its technical 
assistance providers under section 1117 of the ESEA, determines that 
less time is needed to develop and implement the schoolwide program; or
    (ii) The school was operating a schoolwide program on or before 
January 7, 2002, in which case the school may continue to operate its 
program, but must amend its existing plan to reflect the provisions of 
Sec. Sec.  200.25 through 200.29 during the 2002-2003 school year.
    (2) The school must develop the comprehensive plan with the 
involvement of parents, consistent with the requirements of section 
1118 of the ESEA, and other members of the community to be served and 
individuals who will carry out the plan, including--
    (i) Teachers, principals, and administrators, including 
administrators of programs described in other parts of Title I of the 
ESEA;
    (ii) If appropriate, pupil services personnel, technical assistance 
providers, and other school staff; and
    (iii) If the plan relates to a secondary school, students from the 
school.
    (3) If appropriate, the school must develop the comprehensive plan 
in coordination with other programs, including those carried out under 
Reading First, Early Reading First, Even Start, the Carl D. Perkins 
Vocational and Technical Education Act of 1998, and the Head Start Act.
    (4) The comprehensive plan remains in effect for the duration of 
the school's participation under Sec. Sec.  200.25 through 200.29.
    (c)(1) The schoolwide program plan must be available to the LEA, 
parents, and the public.
    (2) Information in the plan must be--
    (i) In an understandable and uniform format, including alternative 
formats upon request; and
    (ii) To the extent practicable, provided in a language that the 
parents can understand.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6314)




Sec.  200.28  Schoolwide program components.


    A schoolwide program must include the following components:
    (a) Schoolwide reform strategies. The schoolwide program must 
incorporate reform strategies in the overall instructional program. 
Those strategies must--
    (1) Provide opportunities for all students to meet the State's 
proficient and advanced levels of student academic achievement;
    (2)(i) Address the needs of all students in the school, 
particularly the needs of low-achieving students and those at risk of 
not meeting the State's student academic achievement standards who are 
members of the target population of any program included in the 
schoolwide program; and
    (ii) Address how the school will determine if those needs have been 
met;
    (3) Use effective methods and instructional practices that are 
based on scientifically based research, as defined in section 9101 of 
the ESEA, and that--
    (i) Strengthen the core academic program;
    (ii) Provide an enriched and accelerated curriculum;
    (iii) Increase the amount and quality of learning time, such as 
providing an extended school year and before- and after-school and 
summer programs and opportunities;
    (iv) Include strategies for meeting the educational needs of 
historically underserved populations; and
    (v) Are consistent with, and are designed to implement, State and 
local improvement plans, if any.
    (b) Instruction by highly qualified teachers. A schoolwide program 
must ensure instruction by highly qualified teachers and provide 
ongoing professional development. The schoolwide program must--
    (1) Include strategies to attract highly qualified teachers, as 
defined in Sec.  200.56;
    (2)(i) Provide high-quality and ongoing professional development in 
accordance with sections 1119 and 9101(34) of the ESEA for teachers, 
principals, paraprofessionals and, if appropriate, pupil services 
personnel, parents, and other staff, to enable all students in the 
school to meet the State's student academic standards; and
    (ii) Align professional development with the State's academic 
standards;
    (3) Devote sufficient resources to carry out effectively the 
professional development activities described in paragraph (b)(2) of 
this section; and
    (4) Include teachers in professional development activities 
regarding the use of academic assessments described in Sec.  200.2 to 
enable them to provide information on, and to improve, the achievement 
of individual students and the overall instructional program.
    (c) Parental involvement. (1) A schoolwide program must involve 
parents in the planning, review, and improvement of the schoolwide 
program plan.
    (2) A schoolwide program must have a parental involvement policy, 
consistent with section 1118(b) of the ESEA, that--
    (i) Includes strategies, such as family literacy services, to 
increase parental involvement in accordance with sections 1118(c) 
through (f) and 9101(32) of the ESEA; and
    (ii) Describes how the school will provide individual student 
academic assessment results, including an interpretation of those 
results, to the parents of students who participate in the academic 
assessments required by Sec.  200.2.
    (d) Additional support. A schoolwide program school must include 
activities to ensure that students who experience difficulty attaining 
the proficient or advanced levels of academic achievement standards 
required by Sec.  200.1 will be provided with effective, timely 
additional support, including measures to--


[[Page 71720]]


    (1) Ensure that those students' difficulties are identified on a 
timely basis; and
    (2) Provide sufficient information on which to base effective 
assistance to those students.
    (e) Transition. A schoolwide program in an elementary school must 
include plans for assisting preschool students in the successful 
transition from early childhood programs, such as Head Start, Even 
Start, Early Reading First, or a preschool program under IDEA or a 
State-run preschool program, to the schoolwide program.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6314)


    19. Add Sec.  200.29 and place it under the undesignated center 
heading ``Schoolwide Programs'' in subpart A of part 200 to read as 
follows:




Sec.  200.29  Consolidation of funds in a schoolwide program.


    (a) In addition to funds under subpart A of this part, a school may 
consolidate and use in its schoolwide program Federal funds from any 
program administered by the Secretary that is included in the most 
recent notice published for this purpose in the Federal Register.
    (2) For purposes of Sec. Sec.  200.25 through 200.29, the authority 
to consolidate funds from other Federal programs also applies to 
services provided to the school with those funds.
    (b)(1) Except as provided in paragraphs (b)(2) and (c) of this 
section, a school that consolidates and uses in a schoolwide program 
funds from any other Federal program administered by the Secretary--
    (i) Is not required to meet the statutory or regulatory 
requirements of that program applicable at the school level; but
    (ii) Must meet the intent and purposes of that program to ensure 
that the needs of the intended beneficiaries of that program are 
addressed.
    (2) A school that chooses to consolidate funds from other Federal 
programs must meet the requirements of those programs relating to--
    (i) Health;
    (ii) Safety;
    (iii) Civil rights;
    (iv) Student and parental participation and involvement;
    (v) Services to private school children;
    (vi) Maintenance of effort;
    (vii) Comparability of services;
    (viii) Use of Federal funds to supplement, not supplant non-Federal 
funds in accordance with Sec.  200.25(d); and
    (ix) Distribution of funds to SEAs or LEAs.
    (c) A school must meet the following requirements if the school 
consolidates and uses funds from these programs in its schoolwide 
program:
    (1) Migrant education. Before the school chooses to consolidate in 
its schoolwide program funds received under part C of Title I of the 
ESEA, the school must--
    (i) Use these funds, in consultation with parents of migratory 
children or organizations representing those parents, or both, first to 
meet the unique educational needs of migratory students that result 
from the effects of their migratory lifestyle, and those other needs 
that are necessary to permit these students to participate effectively 
in school, as identified through the comprehensive Statewide needs 
assessment under Sec.  200.83; and
    (ii) Document that these needs have been met.
    (2) Indian education. The school may consolidate funds received 
under subpart 1 of part A of Title VII of the ESEA if the parent 
committee established by the LEA under section 7114(c)(4) of the ESEA 
approves the inclusion of these funds.
    (3) Special education. (i) The school may consolidate funds 
received under part B of the IDEA.
    (ii) However, the amount of funds consolidated may not exceed the 
amount received by the LEA under part B of IDEA for that fiscal year, 
divided by the number of children with disabilities in the jurisdiction 
of the LEA, and multiplied by the number of children with disabilities 
participating in the schoolwide program.
    (iii) The school may also consolidate funds received under section 
8003(d) of the ESEA (Impact Aid) for children with disabilities in a 
schoolwide program.
    (iv) A school that consolidates funds under part B of IDEA or 
section 8003(d) of the ESEA may use those funds for any activities 
under its schoolwide program plan but must comply with all other 
requirements of part B of IDEA, to the same extent it would if it did 
not consolidate funds under part B of IDEA or section 8003(d) of the 
ESEA in the schoolwide program.
    (d) A school that consolidates and uses in a schoolwide program 
funds under subpart A of this part or from any other Federal program 
administered by the Secretary--
    (1) Is not required to maintain separate fiscal accounting records, 
by program, that identify the specific activities supported by those 
particular funds; but
    (2) Must maintain records that demonstrate that the schoolwide 
program, as a whole, addresses the intent and purposes of each of the 
Federal programs whose funds were consolidated to support the 
schoolwide program.
    (e) Each State must--
    (1) Encourage schools to consolidate funds from other Federal, 
State, and local sources in their schoolwide programs; and
    (2) Modify or eliminate State fiscal and accounting barriers so 
that schools can easily consolidate funds from other Federal, State, 
and local sources in their schoolwide programs.


(Authority: 20 U.S.C. 6314, 1413(a)(s)(D), 6396(b), 7703(d), 
7815(c))




    20. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec.  200.29 to read as follows:


LEA and School Improvement


    21. Transfer Sec. Sec.  200.30 through 200.69 to subpart A of part 
200.


    22. Revise Sec.  200.30 and place it under the new undesignated 
center heading ``LEA and School Improvement'' in subpart A of part 200 
to read as follows:




Sec.  200.30  Local review.


    (a) Each LEA receiving funds under subpart A of this part must use 
the results of the State assessment system described in Sec.  200.2 to 
review annually the progress of each school served under subpart A of 
this part to determine whether the school is making AYP in accordance 
with Sec.  200.20.
    (b)(1) In reviewing the progress of an elementary or secondary 
school operating a targeted assistance program, an LEA may choose to 
review the progress of only the students in the school who are served, 
or are eligible for services, under subpart A of this part.
    (2) The LEA may exercise the option under paragraph (b)(1) of this 
section so long as the students selected for services under the 
targeted assistance program are those with the greatest need for 
special assistance, consistent with the requirements of section 1115 of 
the ESEA.
    (c)(1) To determine whether schools served under subpart A of this 
part are making AYP, an LEA also may use any additional academic 
assessments or any other academic indicators described in the LEA's 
plan.
    (2)(i) The LEA may use these assessments and indicators--
    (A) To identify additional schools for school improvement or in 
need of corrective action or restructuring; and


[[Page 71721]]


    (B) To permit a school to make AYP if, in accordance with Sec.  
200.20(b), the school also reduces the percentage of a student group 
not meeting the State's proficient level of academic achievement by at 
least 10 percent.
    (ii) The LEA may not, with the exception described in paragraph 
(c)(2)(i)(B) of this section, use these assessments and indicators to 
reduce the number of, or change the identity of, the schools that would 
otherwise be identified for school improvement, corrective action, or 
restructuring if the LEA did not use these additional indicators.
    (d) The LEA must publicize and disseminate the results of its 
annual progress review to parents, teachers, principals, schools, and 
the community.
    (e) The LEA must review the effectiveness of actions and activities 
that schools are carrying out under subpart A of this part with respect 
to parental involvement, professional development, and other activities 
assisted under subpart A of this part.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(a) and (b))




    23. Add new Sec. Sec.  200.31 through 200.39 and place them under 
the new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:




Sec.  200.31  Opportunity to review school-level data.


    (a) Before identifying a school for school improvement, corrective 
action, or restructuring, an LEA must provide the school with an 
opportunity to review the school-level data, including academic 
assessment data, on which the proposed identification is based.
    (b)(1) If the principal of a school that an LEA proposes to 
identify for school improvement, corrective action, or restructuring 
believes, or a majority of the parents of the students enrolled in the 
school believe, that the proposed identification is in error for 
statistical or other substantive reasons, the principal may provide 
supporting evidence to the LEA.
    (2) The LEA must consider the evidence referred to in paragraph 
(b)(1) of this section before making a final determination.
    (c) The LEA must make public a final determination of the status of 
the school with respect to identification not later than 30 days after 
it provides the school with the opportunity to review the data on which 
the proposed identification is based.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(b)(2))


Sec.  200.32  Identification for school improvement.


    (a)(1) An LEA must identify for school improvement any elementary 
or secondary school served under subpart A of this part that fails, for 
two consecutive years, to make AYP as defined under Sec. Sec.  200.13 
through 200.20.
    (2) The LEA must make the identification described in paragraph 
(a)(1) of this section before the beginning of the school year 
following the year in which the LEA administered the assessments that 
resulted in the school's failure to make AYP for a second consecutive 
year.
    (b)(1) An LEA must treat any school that was in the first year of 
school improvement status on January 7, 2002 as a school that is in the 
first year of school improvement under Sec.  200.39 for the 2002-2003 
school year.
    (2) Not later than the first day of the 2002-2003 school year, the 
LEA must, in accordance with Sec.  200.44, provide public school choice 
to all students in the school.
    (c)(1) An LEA must treat any school that was identified for school 
improvement for two or more consecutive years on January 7, 2002 as a 
school that is in its second year of school improvement under Sec.  
200.39 for the 2002-2003 school year.
    (2) Not later than the first day of the 2002-2003 school year, the 
LEA must--
    (i) In accordance with Sec.  200.44, provide public school choice 
to all students in the school; and
    (ii) In accordance with Sec.  200.45, make available supplemental 
educational services to eligible students who remain in the school.
    (d) An LEA may remove from improvement status a school otherwise 
subject to the requirements of paragraphs (b) or (c) of this section 
if, on the basis of assessments the LEA administers during the 2001-
2002 school year, the school makes AYP for a second consecutive year.
    (e)(1) An LEA may, but is not required to, identify a school for 
improvement if, on the basis of assessments the LEA administers during 
the 2001-2002 school year, the school fails to make AYP for a second 
consecutive year.
    (2) An LEA that does not identify such a school for improvement, 
however, must count the 2001-2002 school year as the first year of not 
making AYP for the purpose of subsequent identification decisions under 
paragraph (a) of this section.
    (f) If an LEA identifies a school for improvement after the 
beginning of the school year following the year in which the LEA 
administered the assessments that resulted in the school's failure to 
make AYP for a second consecutive year--
    (1) The school is subject to the requirements of school improvement 
under Sec.  200.39 immediately upon identification, including the 
provision of public school choice; and
    (2) The LEA must count that school year as a full school year for 
the purposes of subjecting the school to additional improvement 
measures if the school continues to fail to make AYP.


(Authority: 20 U.S.C. 6316)




Sec.  200.33  Identification for corrective action.


    (a) If a school served by an LEA under subpart A of this part fails 
to make AYP by the end of the second full school year after the LEA has 
identified the school for improvement under Sec.  200.32(a) or (b), or 
by the end of the first full school year after the LEA has identified 
the school for improvement under Sec.  200.32(c), the LEA must identify 
the school for corrective action under Sec.  200.42.
    (b) If a school was subject to corrective action on January 7, 
2002, the LEA must--
    (1) Treat the school as a school identified for corrective action 
under Sec.  200.42 for the 2002-2003 school year; and
    (2) Not later than the first day of the 2002-2003 school year--
    (i) In accordance with Sec.  200.44, provide public school choice 
to all students in the school;
    (ii) In accordance with Sec.  200.45, make available supplemental 
educational services to eligible students who remain in the school; and
    (iii) Take corrective action under Sec.  200.42.
    (c) An LEA may remove from corrective action a school otherwise 
subject to the requirements of paragraphs (a) or (b) of this section 
if, on the basis of assessments administered by the LEA during the 
2001-2002 school year, the school makes AYP for a second consecutive 
year.


(Approved by the Office of Management and Budget under control 
number 1810-0576)


(Authority: 20 U.S.C. 6316)




Sec.  200.34  Identification for restructuring.


    (a) If a school continues to fail to make AYP after one full school 
year of corrective action under Sec.  200.42, the LEA must prepare a 
restructuring plan for the school and make arrangements to implement 
the plan.
    (b) If the school continues to fail to make AYP, the LEA must 
implement the


[[Page 71722]]


restructuring plan no later than the beginning of the school year 
following the year in which the LEA developed the restructuring plan 
under paragraph (a) of this section.


(Approved by the Office of Management and Budget under control 
number 1810-0576)


(Authority: 20 U.S.C. 6316(b)(8))




Sec.  200.35  Delay and removal.


    (a) Delay. (1) An LEA may delay, for a period not to exceed one 
year, implementation of requirements under the second year of school 
improvement, under corrective action, or under restructuring if--
    (i) The school makes AYP for one year; or
    (ii) The school's failure to make AYP is due to exceptional or 
uncontrollable circumstances, such as a natural disaster or a 
precipitous and unforeseen decline in the financial resources of the 
LEA or school.
    (2) The LEA may not take into account a period of delay under 
paragraph (a) of this section in determining the number of consecutive 
years of the school's failure to make AYP.
    (3) Except as provided in paragraph (b) of this section, the LEA 
must subject the school to further actions as if the delay never 
occurred.
    (b) Removal. If any school identified for school improvement, 
corrective action, or restructuring makes AYP for two consecutive 
school years, the LEA may not, for the succeeding school year--
    (1) Subject the school to the requirements of school improvement, 
corrective action, or restructuring; or
    (2) Identify the school for improvement.


(Authority: 20 U.S.C. 6316(b))




Sec.  200.36  Communication with parents.


    (a) Throughout the school improvement process, the State, LEA, or 
school must communicate with the parents of each child attending the 
school.
    (b) The State, LEA, or school must ensure that, regardless of the 
method or media used, it provides the information required by 
Sec. Sec.  200.37 and 200.38 to parents--
    (1) In an understandable and uniform format, including alternative 
formats upon request; and
    (2) To the extent practicable, in a language that parents can 
understand.
    (c) The State, LEA, or school must provide information to parents--
    (1) Directly, through such means as regular mail or e-mail, except 
that if a State does not have access to individual student addresses, 
it may provide information to the LEA or school for distribution to 
parents; and
    (2) Through broader means of dissemination such as the Internet, 
the media, and public agencies serving the student population and their 
families.
    (d) All communications must respect the privacy of students and 
their families.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316)




Sec.  200.37  Notice of identification for improvement, corrective 
action, or restructuring.


    (a) If an LEA identifies a school for improvement or subjects the 
school to corrective action or restructuring, the LEA must, consistent 
with the requirements of Sec.  200.36, promptly notify the parent or 
parents of each child enrolled in the school of this identification.
    (b) The notice referred to in paragraph (a) of this section must 
include the following:
    (1) An explanation of what the identification means, and how the 
school compares in terms of academic achievement to other elementary 
and secondary schools served by the LEA and the SEA involved.
    (2) The reasons for the identification.
    (3) An explanation of how parents can become involved in addressing 
the academic issues that led to identification.
    (4)(i) An explanation of the parents' option to transfer their 
child to another public school, including the provision of 
transportation to the new school, in accordance with Sec.  200.44.
    (ii) The explanation of the parents' option to transfer must 
include, at a minimum, information on the academic achievement of the 
school or schools to which the child may transfer.
    (iii) The explanation may include other information on the school 
or schools to which the child may transfer, such as--
    (A) A description of any special academic programs or facilities;
    (B) The availability of before- and after-school programs;
    (C) The professional qualifications of teachers in the core 
academic subjects; and
    (D) A description of parental involvement opportunities.
    (5)(i) If the school is in its second year of improvement or 
subject to corrective action or restructuring, a notice explaining how 
parents can obtain supplemental educational services for their child in 
accordance with Sec.  200.45.
    (ii) The annual notice of the availability of supplemental 
educational services must include, at a minimum, the following:
    (A) The identity of approved providers of those services available 
within the LEA, including providers of technology-based or distance-
learning supplemental educational services, and providers that make 
services reasonably available in neighboring LEAs.
    (B) A brief description of the services, qualifications, and 
demonstrated effectiveness of the providers referred to in paragraph 
(b)(5)(ii)(A) of this section.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316)




Sec.  200.38  Information about action taken.


    (a) An LEA must publish and disseminate to the parents of each 
student enrolled in the school, consistent with the requirements of 
Sec.  200.36, and to the public information regarding any action taken 
by a school and the LEA to address the problems that led to the LEA's 
identification of the school for improvement, corrective action, or 
restructuring.
    (b) The information referred to in paragraph (a) of this section 
must include the following:
    (1) An explanation of what the school is doing to address the 
problem of low achievement.
    (2) An explanation of what the LEA or SEA is doing to help the 
school address the problem of low achievement.
    (3) If applicable, a description of specific corrective actions or 
restructuring plans.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(b))




Sec.  200.39  Responsibilities resulting from identification for school 
improvement.


    (a) If an LEA identifies a school for school improvement under 
Sec.  200.32--
    (1) The LEA must--
    (i) Not later than the first day of the school year following 
identification, with the exception described in Sec.  200.32(f), 
provide all students enrolled in the school with the option to 
transfer, in accordance with Sec.  200.44, to another public school 
served by the LEA; and
    (ii) Ensure that the school receives technical assistance in 
accordance with Sec.  200.40; and
    (2) The school must develop or revise a school improvement plan in 
accordance with Sec.  200.41.
    (b) If a school fails to make AYP by the end of the first full 
school year after the LEA has identified it for improvement under Sec.  
200.32, the LEA must--
    (1) Continue to provide all students enrolled in the school with 
the option


[[Page 71723]]


to transfer, in accordance with Sec.  200.44, to another public school 
served by the LEA;
    (2) Continue to ensure that the school receives technical 
assistance in accordance with Sec.  200.40; and
    (3) Make available supplemental educational services in accordance 
with Sec.  200.45.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(b))


    24. Revise Sec. Sec.  200.40 through 200.45 and place them under 
the new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:




Sec.  200.40  Technical assistance.


    (a) An LEA that identifies a school for improvement under Sec.  
200.32 must ensure that the school receives technical assistance as the 
school develops and implements its improvement plan under Sec.  200.41 
and throughout the plan's duration.
    (b) The LEA may arrange for the technical assistance to be provided 
by one or more of the following:
    (1) The LEA through the statewide system of school support and 
recognition described under section 1117 of the ESEA.
    (2) The SEA.
    (3) An institution of higher education that is in full compliance 
with all of the reporting provisions of Title II of the Higher 
Education Act of 1965.
    (4) A private not-for-profit organization, a private for-profit 
organization, an educational service agency, or another entity with 
experience in helping schools improve academic achievement.
    (c) The technical assistance must include the following:
    (1) Assistance in analyzing data from the State assessment system, 
and other examples of student work, to identify and develop solutions 
to problems in--
    (i) Instruction;
    (ii) Implementing the requirements for parental involvement and 
professional development under this subpart; and
    (iii) Implementing the school plan, including LEA- and school-level 
responsibilities under the plan.
    (2) Assistance in identifying and implementing professional 
development and instructional strategies and methods that have proved 
effective, through scientifically based research, in addressing the 
specific instructional issues that caused the LEA to identify the 
school for improvement.
    (3) Assistance in analyzing and revising the school's budget so 
that the school allocates its resources more effectively to the 
activities most likely to--
    (i) Increase student academic achievement; and
    (ii) Remove the school from school improvement status.
    (d) Technical assistance provided under this section must be based 
on scientifically based research.


(Authority: 20 U.S.C. 6316(b)(4))




Sec.  200.41  School improvement plan.


    (a)(1) Not later than three months after an LEA has identified a 
school for improvement under Sec.  200.32, the school must develop or 
revise a school improvement plan for approval by the LEA.
    (2) The school must consult with parents, school staff, the LEA, 
and outside experts in developing or revising its school improvement 
plan.
    (b) The school improvement plan must cover a 2-year period.
    (c) The school improvement plan must--
    (1) Specify the responsibilities of the school, the LEA, and the 
SEA serving the school under the plan, including the technical 
assistance to be provided by the LEA under Sec.  200.40;
    (2)(i) Incorporate strategies, grounded in scientifically based 
research, that will strengthen instruction in the core academic 
subjects at the school and address the specific academic issues that 
caused the LEA to identify the school for improvement; and
    (ii) May include a strategy for implementing a comprehensive school 
reform model described in section 1606 of the ESEA;
    (3) With regard to the school's core academic subjects, adopt 
policies and practices most likely to ensure that all groups of 
students described in Sec.  200.13(b)(7) and enrolled in the school 
will meet the State's proficient level of achievement, as measured by 
the State's assessment system, not later than the 2013-2014 school 
year;
    (4) Establish measurable goals that--
    (i) Address the specific reasons for the school's failure to make 
adequate progress; and
    (ii) Promote, for each group of students described in Sec.  
200.13(b)(7) and enrolled in the school, continuous and substantial 
progress that ensures that all these groups meet the State's annual 
measurable objectives described in Sec.  200.18;
    (5) Provide an assurance that the school will spend not less than 
10 percent of the allocation it receives under subpart A of this part 
for each year that the school is in school improvement status, for the 
purpose of providing high-quality professional development to the 
school's teachers, principal, and, as appropriate, other instructional 
staff, consistent with section 9101(34) of the ESEA, that--
    (i) Directly addresses the academic achievement problem that caused 
the school to be identified for improvement;
    (ii) Is provided in a manner that affords increased opportunity for 
participating in that professional development; and
    (iii) Incorporates teacher mentoring activities or programs;
    (6) Specify how the funds described in paragraph (c)(5) of this 
section will be used to remove the school from school improvement 
status;
    (7) Describe how the school will provide written notice about the 
identification to parents of each student enrolled in the school;
    (8) Include strategies to promote effective parental involvement at 
the school; and
    (9) As appropriate, incorporate activities before school, after 
school, during the summer, and during any extension of the school year.
    (d)(1) Within 45 days of receiving a school improvement plan, the 
LEA must--
    (i) Establish a peer-review process to assist with review of the 
plan;
    (ii) Promptly review the plan;
    (iii) Work with the school to make any necessary revisions; and
    (iv) Approve the plan if it meets the requirements of this section.
    (2) The LEA may condition approval of the school improvement plan 
on--
    (i) Inclusion of one or more of the corrective actions specified in 
Sec.  200.42; or
    (ii) Feedback on the plan from parents and community leaders.
    (e) A school must implement its school improvement plan immediately 
on approval of the plan by the LEA.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(b)(3))




Sec.  200.42  Corrective action.


    (a) Definition. ``Corrective action'' means action by an LEA that--
    (1) Substantially and directly responds to--
    (i) The consistent academic failure of a school that led the LEA to 
identify the school for corrective action; and
    (ii) Any underlying staffing, curriculum, or other problems in the 
school;
    (2) Is designed to increase substantially the likelihood that each 
group of students described in Sec.  200.13(b)(7) and enrolled in the 
school will meet or exceed the State's proficient levels of achievement 
as


[[Page 71724]]


measured by the State assessment system; and
    (3) Is consistent with State law.
    (b) Requirements. If an LEA identifies a school for corrective 
action, in accordance with Sec.  200.33, the LEA must do the following:
    (1) Continue to provide all students enrolled in the school with 
the option to transfer to another public school in accordance with 
Sec.  200.44.
    (2) Continue to ensure that the school receives technical 
assistance consistent with the requirements of Sec.  200.40.
    (3) Make available supplemental educational services in accordance 
with Sec.  200.45.
    (4) Take at least one of the following corrective actions:
    (i) Replace the school staff who are relevant to the school's 
failure to make AYP.
    (ii) Institute and fully implement a new curriculum, including the 
provision of appropriate professional development for all relevant 
staff, that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement 
for low-achieving students and of enabling the school to make AYP.
    (iii) Significantly decrease management authority at the school 
level.
    (iv) Appoint one or more outside experts to advise the school on--
    (A) Revising the school improvement plan developed under Sec.  
200.41 to address the specific issues underlying the school's continued 
failure to make AYP and resulting in identification for corrective 
action; and
    (B) Implementing the revised improvement plan.
    (v) Extend for that school the length of the school year or school 
day.
    (vi) Restructure the internal organization of the school.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(b)(7))




Sec.  200.43  Restructuring.


    (a) Definition. ``Restructuring'' means a major reorganization of a 
school's governance arrangement by an LEA that--
    (1) Makes fundamental reforms, such as significant changes in the 
school's staffing and governance, to improve student academic 
achievement in the school;
    (2) Has substantial promise of enabling the school to make AYP as 
defined under Sec. Sec.  200.13 through 200.20; and
    (3) Is consistent with State law.
    (b) Requirements. If the LEA identifies a school for restructuring 
in accordance with Sec.  200.34, the LEA must do the following:
    (1) Continue to provide all students enrolled in the school with 
the option to transfer to another public school in accordance with 
Sec.  200.44.
    (2) Make available supplemental educational services in accordance 
with Sec.  200.45.
    (3) Prepare a plan to carry out one of the following alternative 
governance arrangements:
    (i) Reopen the school as a public charter school.
    (ii) Replace all or most of the school staff, which may include the 
principal, who are relevant to the school's failure to make AYP.
    (iii) Enter into a contract with an entity, such as a private 
management company, with a demonstrated record of effectiveness, to 
operate the school as a public school.
    (iv) Turn the operation of the school over to the SEA, if permitted 
under State law and agreed to by the State.
    (v) Any other major restructuring of a school's governance 
arrangement consistent with this section.
    (4) Provide to parents and teachers--
    (i) Prompt notice that the LEA has identified the school for 
restructuring; and
    (ii) An opportunity for parents and teachers to--
    (A) Comment before the LEA takes any action under a restructuring 
plan; and
    (B) Participate in the development of any restructuring plan.
    (c) Implementation. (1) If a school continues to fail to make AYP, 
the LEA must--
    (i) Implement the restructuring plan no later than the beginning of 
the school year following the year in which the LEA developed the 
restructuring plan under paragraph (b)(3) of this section; and
    (ii) Continue to offer public school choice and supplemental 
educational services in accordance with Sec. Sec.  200.44 and 200.45.
    (2) An LEA is no longer required to carry out the requirements of 
paragraph (c)(1) of this section if the restructured school makes AYP 
for two consecutive school years.
    (d) Rural schools. On request, the Secretary will provide technical 
assistance for developing and carrying out a restructuring plan to any 
rural LEA--
    (1) That has fewer than 600 students in average daily attendance at 
all of its schools; and
    (2) In which all of the schools have a School Locale Code of 7 or 
8, as determined by the National Center for Education Statistics.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(b)(8))




Sec.  200.44  Public school choice.


    (a) Requirements. (1) In the case of a school identified for school 
improvement under Sec.  200.32, for corrective action under Sec.  
200.33, or for restructuring under Sec.  200.34, the LEA must provide 
all students enrolled in the school with the option to transfer to 
another public school served by the LEA.
    (2) The LEA must offer this option not later than the first day of 
the school year following the year in which the LEA administered the 
assessments that resulted in its identification of the school for 
improvement, corrective action, or restructuring.
    (3) The schools to which students may transfer under paragraph 
(a)(1) of this section--
    (i) May not include schools that--
    (A) The LEA has identified for improvement under Sec.  200.32, 
corrective action under Sec.  200.33, or restructuring under Sec.  
200.34; or
    (B) Are persistently dangerous as determined by the State; and
    (ii) May include one or more public charter schools.
    (4) If more than one school meets the requirements of paragraph 
(a)(3) of this section, the LEA must--
    (i) Provide to parents of students eligible to transfer under 
paragraph (a)(1) of this section a choice of more than one such school; 
and
    (ii) Take into account the parents' preferences among the choices 
offered under paragraph (a)(4)(i) of this section.
    (5) The LEA must offer the option to transfer described in this 
section unless it is prohibited by State law in accordance with 
paragraph (b) of this section.
    (6) Except as described in Sec. Sec.  200.32(d) and 200.33(c), if a 
school was in school improvement or subject to corrective action before 
January 8, 2002, the State must ensure that the LEA provides a public 
school choice option in accordance with paragraph (a)(1) of this 
section not later than the first day of the 2002-2003 school year.
    (b) Limitation on State law prohibition. An LEA may invoke the 
State law prohibition on choice described in paragraph (a)(5) of this 
section only if the State law prohibits choice through restrictions on 
public school assignments or the transfer of students from one public 
school to another public school.
    (c) Desegregation plans. (1) If an LEA is subject to a 
desegregation plan, whether that plan is voluntary, court-


[[Page 71725]]


ordered, or required by a Federal or State administrative agency, the 
LEA is not exempt from the requirement in paragraph (a)(1) of this 
section.
    (2) In determining how to provide students with the option to 
transfer to another school, the LEA may take into account the 
requirements of the desegregation plan.
    (3) If the desegregation plan forbids the LEA from offering the 
transfer option required under paragraph (a)(1) of this section, the 
LEA must secure appropriate changes to the plan to permit compliance 
with paragraph (a)(1) of this section.
    (d) Capacity. An LEA may not use lack of capacity to deny students 
the option to transfer under paragraph (a)(1) of this section.
    (e) Priority. (1) In providing students the option to transfer to 
another public school in accordance with paragraph (a)(1) of this 
section, the LEA must give priority to the lowest-achieving students 
from low-income families.
    (2) The LEA must determine family income on the same basis that the 
LEA uses to make allocations to schools under subpart A of this part.
    (f) Status. Any public school to which a student transfers under 
paragraph (a)(1) of this section must ensure that the student is 
enrolled in classes and other activities in the school in the same 
manner as all other students in the school.
    (g) Duration of transfer. (1) If a student exercises the option 
under paragraph (a)(1) of this section to transfer to another public 
school, the LEA must permit the student to remain in that school until 
the student has completed the highest grade in the school.
    (2) The LEA's obligation to provide transportation for the student 
may be limited under the circumstances described in paragraph (i) of 
this section and in Sec.  200.48.
    (h) No eligible schools within an LEA. If all public schools to 
which a student may transfer within an LEA are identified for school 
improvement, corrective action, or restructuring, the LEA--
    (1) Must, to the extent practicable, establish a cooperative 
agreement for a transfer with one or more other LEAs in the area; and
    (2) May offer supplemental educational services to eligible 
students under Sec.  200.45 in schools in their first year of school 
improvement under Sec.  200.39.
    (i) Transportation. (1) If a student exercises the option under 
paragraph (a)(1) of this section to transfer to another public school, 
the LEA must, consistent with Sec.  200.48, provide or pay for the 
student's transportation to the school.
    (2) The limitation on funding in Sec.  200.48 applies only to the 
provision of choice-related transportation, and does not affect in any 
way the basic obligation to provide an option to transfer as required 
by paragraph (a) of this section.
    (3) The LEA's obligation to provide transportation for the student 
ends at the end of the school year in which the school from which the 
student transferred is no longer identified by the LEA for school 
improvement, corrective action, or restructuring.
    (j) Students with disabilities and students covered under Section 
504 of the Rehabilitation Act of 1973 (Section 504). For students with 
disabilities under the IDEA and students covered under Section 504, the 
public school choice option must provide a free appropriate public 
education as that term is defined in section 602(8) of the IDEA or 34 
CFR 104.33, respectively.


(Authority: 20 U.S.C. 6316)




Sec.  200.45  Supplemental educational services.


    (a) Definition. ``Supplemental educational services'' means 
tutoring and other supplemental academic enrichment services that are--
    (1) In addition to instruction provided during the school day;
    (2) Specifically designed to--
    (i) Increase the academic achievement of eligible students as 
measured by the State's assessment system; and
    (ii) Enable these children to attain proficiency in meeting State 
academic achievement standards; and
    (3) Of high quality and research-based.
    (b) Eligibility. (1) Only students from low-income families are 
eligible for supplemental educational services.
    (2) The LEA must determine family income on the same basis that the 
LEA uses to make allocations to schools under subpart A of this part.
    (c) Requirement. (1) If an LEA identifies a school for a second 
year of improvement under Sec.  200.32, corrective action under Sec.  
200.33, or restructuring under Sec.  200.34, the LEA must arrange, 
consistent with paragraph (d) of this section, for each eligible 
student in the school to receive supplemental educational services from 
a State-approved provider selected by the student's parents.
    (2) Except as described in Sec. Sec.  200.32(d) and 200.33(c), if a 
school was in school improvement status for two or more consecutive 
school years or subject to corrective action on January 7, 2002, the 
State must ensure that the LEA makes available, consistent with 
paragraph (d) of this section, supplemental educational services to all 
eligible students not later than the first day of the 2002-2003 school 
year.
    (3) The LEA must, consistent with Sec.  200.48, continue to make 
available supplemental educational services to eligible students until 
the end of the school year in which the LEA is making those services 
available.
    (4)(i) At the request of an LEA, the SEA may waive, in whole or in 
part, the requirement that the LEA make available supplemental 
educational services if the SEA determines that--
    (A) None of the providers of those services on the list approved by 
the SEA under Sec.  200.47 makes those services available in the area 
served by the LEA or within a reasonable distance of that area; and
    (B) The LEA provides evidence that it is not otherwise able to make 
those services available.
    (ii) The SEA must notify the LEA, within 30 days of receiving the 
LEA's request for a waiver under paragraph (c)(4)(i) of this section, 
whether it approves or disapproves the request and, if it disapproves, 
the reasons for the disapproval, in writing.
    (iii) An LEA that receives a waiver must renew its request for that 
waiver on an annual basis.
    (d) Priority. If the amount of funds available for supplemental 
educational services is insufficient to provide services to each 
student whose parents request these services, the LEA must give 
priority to the lowest-achieving students.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316)
    25. Add new Sec. Sec.  200.46 through 200.49 and place them under 
the new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:




Sec.  200.46  LEA responsibilities for supplemental educational 
services.


    (a) If an LEA is required to make available supplemental 
educational services under Sec.  200.39(b)(3), Sec.  200.42(b)(3), or 
Sec.  200.43(b)(2), the LEA must do the following:
    (1) Provide the annual notice to parents described in Sec.  
200.37(b)(5).
    (2) If requested, assist parents in choosing a provider from the 
list of approved providers maintained by the SEA.
    (3) Apply fair and equitable procedures for serving students if the 
number of spaces at approved providers is not sufficient to serve all 
eligible


[[Page 71726]]


students whose parents request services consistent with Sec.  200.45.
    (4) Ensure that eligible students with disabilities under IDEA and 
students covered under Section 504 receive appropriate supplemental 
educational services and accommodations in the provision of those 
services.
    (5) Ensure that eligible students who have limited English 
proficiency receive appropriate supplemental educational services and 
language assistance in the provision of those services.
    (6) Not disclose to the public, without the written permission of 
the student's parents, the identity of any student who is eligible for, 
or receiving, supplemental educational services.
    (b)(1) In addition to meeting the requirements in paragraph (a) of 
this section, the LEA must enter into an agreement with each provider 
selected by a parent or parents.
    (2) The agreement must--
    (i) Require the LEA to develop, in consultation with the parents 
and the provider, a statement that includes--
    (A) Specific achievement goals for the student;
    (B) A description of how the student's progress will be measured; 
and
    (C) A timetable for improving achievement;
    (ii) Describe procedures for regularly informing the student's 
parents and teachers of the student's progress;
    (iii) Provide for the termination of the agreement if the provider 
is unable to meet the goals and timetables specified in the agreement;
    (iv) Specify how the LEA will pay the provider; and
    (v) Prohibit the provider from disclosing to the public, without 
the written permission of the student's parents, the identity of any 
student who is eligible for, or receiving, supplemental educational 
services.
    (3) In the case of a student with disabilities under IDEA or a 
student covered under Section 504, the provisions of the agreement 
referred to in paragraph (b)(2)(i) of this section must be consistent 
with the student's individualized education program under section 
614(d) of the IDEA or the student's individualized services under 
Section 504.
    (4) The LEA may not pay the provider for religious worship or 
instruction.
    (c) If State law prohibits an SEA from carrying out one or more of 
its responsibilities under Sec.  200.47 with respect to those who 
provide, or seek approval to provide, supplemental educational 
services, each LEA must carry out those responsibilities with respect 
to its students who are eligible for those services.


(Authority: 20 U.S.C. 6316(e))


(Approved by the Office of Management and Budget under control 
number 1810-0581)




Sec.  200.47  SEA responsibilities for supplemental educational 
services.


    (a) If one or more LEAs in a State are required to make available 
supplemental educational services under Sec.  200.39(b)(3), Sec.  
200.42(b)(3), or Sec.  200.43(b)(2), the SEA for that State must do the 
following:
    (1)(i) In consultation with affected LEAs, parents, teachers, and 
other interested members of the public, promote participation by as 
many providers as possible.
    (ii) This promotion must include annual notice to potential 
providers of--
    (A) The opportunity to provide supplemental educational services; 
and
    (B) Procedures for obtaining the SEA's approval to be a provider of 
those services.
    (2) Consistent with paragraph (b) of this section, develop and 
apply to potential providers objective criteria.
    (3) Maintain by LEA an updated list of approved providers, 
including any technology-based or distance-learning providers, from 
which parents may select.
    (4) Develop, implement, and publicly report on standards and 
techniques for--
    (i) Monitoring the quality and effectiveness of the services 
offered by each approved provider; and
    (ii) Withdrawing approval from a provider that fails, for two 
consecutive years, to contribute to increasing the academic proficiency 
of students receiving supplemental educational services from that 
provider.
    (5) Ensure that eligible students with disabilities under IDEA and 
students covered under Section 504 receive appropriate supplemental 
educational services and accommodations in the provision of those 
services.
    (6) Ensure that eligible students who have limited English 
proficiency receive appropriate supplemental educational services and 
language assistance in the provision of those services.
    (b) Standards for approving providers. (1) As used in this section 
and in Sec.  200.46, ``provider'' means a non-profit entity, a for-
profit entity, an LEA, an educational service agency, a public school, 
including a public charter school, or a private school that--
    (i) Has a demonstrated record of effectiveness in increasing the 
academic achievement of students in subjects relevant to meeting the 
State's academic content and student achievement standards described 
under Sec.  200.1;
    (ii) Is capable of providing supplemental educational services that 
are consistent with the instructional program of the LEA and with the 
State academic content standards and State student achievement 
standards described under Sec.  200.1;
    (iii) Is financially sound; and
    (iv) In the case of--
    (A) A public school, has not been identified under Sec. Sec.  
200.32, 200.33, or 200.34; or
    (B) An LEA, has not been identified under Sec.  200.50(d) or (e).
    (2) In order for the SEA to include a provider on the State list, 
the provider must agree to--
    (i)(A) Provide parents of each student receiving supplemental 
educational services and the appropriate LEA with information on the 
progress of the student in increasing achievement; and
    (B) This information must be in an understandable and uniform 
format, including alternative formats upon request, and, to the extent 
practicable, in a language that the parents can understand;
    (ii) Ensure that the instruction the provider gives and the content 
the provider uses--
    (A) Are consistent with the instruction provided and the content 
used by the LEA and the SEA;
    (B) Are aligned with State student academic achievement standards; 
and
    (C) Are secular, neutral, and nonideological; and
    (iii) Meet all applicable Federal, State, and local health, safety, 
and civil rights laws.
    (3) As a condition of approval, a State may not require a provider 
to hire only staff who meet the requirements under Sec. Sec.  200.55 
and 200.56.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(e))




Sec.  200.48  Funding for choice-related transportation and 
supplemental educational services.


    (a) Amounts required. (1) To pay for choice-related transportation 
and supplemental educational services required under section 1116 of 
the ESEA, an LEA may use--
    (i) Funds allocated under subpart A of this part;
    (ii) Funds, where allowable, from other Federal education programs; 
and
    (iii) State, local, or private resources.
    (2) Unless a lesser amount is needed, the LEA must spend an amount 
equal to 20 percent of its allocation under subpart A of this part to--
    (i) Provide, or pay for, transportation of students exercising a 
choice option under Sec.  200.44;
    (ii) Satisfy all requests for supplemental educational services 
under Sec.  200.45; or


[[Page 71727]]


    (iii) Pay for both paragraph (a)(2)(i) and (ii) of this section, 
except that--
    (A) The LEA must spend a minimum of an amount equal to 5 percent of 
its allocation under subpart A of this part on transportation under 
paragraph (a)(2)(i) of this section and an amount equal to 5 percent of 
its allocation under subpart A of this part for supplemental 
educational services under paragraph (a)(2)(ii) of this section, unless 
lesser amounts are needed to meet the requirements of Sec. Sec.  200.44 
and 200.45; and
    (B) The LEA may not include costs for administration or 
transportation incurred in providing supplemental educational services, 
or administrative costs associated with the provision of public school 
choice options under Sec.  200.44, in the amounts required under 
paragraph (a)(2) of this section.
    (3) If the amount specified in paragraph (a)(2) of this section is 
insufficient to pay all choice-related transportation costs, or to meet 
the demand for supplemental educational services, the LEA may make 
available any additional needed funds from Federal, State, or local 
sources.
    (4) To assist an LEA that does not have sufficient funds to make 
available supplemental educational services to all students requesting 
these services, an SEA may use funds that it reserves under part A of 
Title I and part A of Title V of the ESEA.
    (b) Cap on school-level reduction. (1) An LEA may not, in applying 
paragraph (a) of this section, reduce by more than 15 percent the total 
amount it makes available under subpart A of this part to a school it 
has identified for corrective action or restructuring.
    (c) Per-child funding for supplemental educational services. For 
each student receiving supplemental educational services under Sec.  
200.45, the LEA must make available the lesser of--
    (1) The amount of its allocation under subpart A of this part, 
divided by the number of students from families below the poverty 
level, as counted under section 1124(c)(1)(A) of the ESEA; or
    (2) The actual costs of the supplemental educational services 
received by the student.


(Authority: 20 U.S.C. 6316)




Sec.  200.49  SEA responsibilities for school improvement, corrective 
action, and restructuring.


    (a) Transition requirements for public school choice and 
supplemental educational services. (1) Except as described in 
Sec. Sec.  200.32(d) and 200.33(c), if a school was in school 
improvement or subject to corrective action on January 7, 2002, the SEA 
must ensure that the LEA for that school provides public school choice 
in accordance with Sec.  200.44 not later than the first day of the 
2002-2003 school year.
    (2) Except as described in Sec. Sec.  200.32(d) and 200.33(c), if a 
school was in school improvement status for two or more consecutive 
school years or subject to corrective action on January 7, 2002, the 
SEA must ensure that the LEA for that school makes available 
supplemental educational services in accordance with Sec.  200.45 not 
later than the first day of the 2002-2003 school year.
    (b) State reservation of funds for school improvement. (1) In 
accordance with Sec.  200.100(a), an SEA must reserve 2 percent of the 
amount it receives under this part for fiscal years 2002 and 2003, and 
4 percent of the amount it receives under this part for fiscal years 
2004 through 2007, to--
    (i) Support local school improvement activities;
    (ii) Provide technical assistance to schools identified for 
improvement, corrective action, or restructuring; and
    (iii) Provide technical assistance to LEAs that the SEA has 
identified for improvement or corrective action in accordance with 
Sec.  200.50.
    (2) Of the amount it reserves under paragraph (b)(1) of this 
section, the SEA must--
    (i) Allocate not less than 95 percent directly to LEAs serving 
schools identified for improvement, corrective action, and 
restructuring to support improvement activities; or
    (ii) With the approval of the LEA, directly provide for these 
improvement activities or arrange to provide them through such entities 
as school support teams or educational service agencies.
    (3) In providing assistance to LEAs under paragraph (b)(2) of this 
section, the SEA must give priority to LEAs that--
    (i) Serve the lowest-achieving schools;
    (ii) Demonstrate the greatest need for this assistance; and
    (iii) Demonstrate the strongest commitment to ensuring that this 
assistance will be used to enable the lowest-achieving schools to meet 
the progress goals in the school improvement plans under Sec.  200.41.
    (c) Technical assistance. The SEA must make technical assistance 
available, through the statewide system of support and improvement 
required by section 1117 of the ESEA, to schools that LEAs have 
identified for improvement, corrective action, or restructuring.
    (d) LEA failure. If the SEA determines that an LEA has failed to 
carry out its responsibilities with respect to school improvement, 
corrective action, or restructuring, the SEA must take the actions it 
determines to be appropriate and in compliance with State law.
    (e) Assessment results. (1) The SEA must ensure that the results of 
academic assessments administered as part of the State assessment 
system in a given school year are available to LEAs before the 
beginning of the next school year and in such time as to allow for the 
identification described in Sec.  200.32(a)(2).
    (2) The SEA must provide the results described in paragraph (e)(1) 
of this section to a school before an LEA may identify the school for 
school improvement under Sec.  200.32, corrective action under Sec.  
200.33, or restructuring under Sec.  200.34.
    (f) Accountability for charter schools. The accountability 
provisions under section 1116 of the ESEA must be overseen for charter 
schools in accordance with State charter school law.
    (g) Factors affecting student achievement. The SEA must notify the 
Secretary of Education of major factors that have been brought to the 
SEA's attention under section 1111(b)(9) of the ESEA that have 
significantly affected student academic achievement in schools and LEAs 
identified for improvement within the State.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6311 and 6316)




    26. Revise Sec. Sec.  200.50 and 200.51 and place them under the 
new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:




Sec.  200.50  SEA review of LEA progress.


    (a) State review. (1) An SEA must annually review the progress of 
each LEA in its State that receives funds under subpart A of this part 
to determine whether--
    (i) The LEA's schools served under this part are making AYP, as 
defined under Sec. Sec.  200.13 through 200.20, toward meeting the 
State's student academic achievement standards; and
    (ii) The LEA is carrying out its responsibilities under this part 
with respect to school improvement, technical assistance, parental 
involvement, and professional development.
    (2) In reviewing the progress of an LEA, the SEA may, in the case 
of targeted assistance schools served by the LEA, consider the progress 
only of the students served or eligible for services under this 
subpart, provided the students selected for services in such schools 
are those with the greatest need


[[Page 71728]]


for special assistance, consistent with the requirements of section 
1115 of the ESEA.
    (b) Rewards. If an LEA has exceeded AYP as defined under Sec. Sec.  
200.13 through 200.20 for two consecutive years, the SEA may--
    (1) Reserve funds in accordance with Sec.  200.100(c); and
    (2) Make rewards of the kinds described under section 1117 of the 
ESEA.
    (c) Opportunity for review of LEA-level data. (1) Before 
identifying an LEA for improvement or corrective action, the SEA must 
provide the LEA with an opportunity to review the data, including 
academic assessment data, on which the SEA has based the proposed 
identification.
    (2)(i) If the LEA believes that the proposed identification is in 
error for statistical or other substantive reasons, the LEA may provide 
supporting evidence to the SEA.
    (ii) The SEA must consider the evidence before making a final 
determination not later than 30 days after it has provided the LEA with 
the opportunity to review the data under paragraph (c)(1) of this 
section.
    (d) Identification for improvement. (1) The SEA must identify for 
improvement an LEA that, for two consecutive years, including the 
period immediately before January 8, 2002, fails to make AYP as defined 
in the SEA's plan under section 1111(b)(2) of the ESEA.
    (2) The SEA must identify for improvement an LEA that was in 
improvement status on January 7, 2002.
    (3)(i) The SEA may identify an LEA for improvement if, on the basis 
of assessments the LEA administers during the 2001-2002 school year, 
the LEA fails to make AYP for a second consecutive year.
    (ii) An SEA that does not identify such an LEA for improvement, 
however, must count the 2001-2002 school year as the first year of not 
making AYP for the purpose of subsequent identification decisions under 
paragraph (d)(1) of this section.
    (4) The SEA may remove an LEA from improvement status if, on the 
basis of assessments the LEA administers during the 2001-2002 school 
year, the LEA makes AYP for a second consecutive year.
    (e) Identification for corrective action. After providing technical 
assistance under Sec.  200.52(b), the SEA--
    (1) May take corrective action at any time with respect to an LEA 
that the SEA has identified for improvement under paragraph (d) of this 
section;
    (2) Must take corrective action--
    (i) With respect to an LEA that fails to make AYP, as defined under 
Sec. Sec.  200.13 through 200.20, by the end of the second full school 
year following the year in which the LEA administered the assessments 
that resulted in the LEA's failure to make AYP for a second consecutive 
year and led to the SEA's identification of the LEA for improvement 
under paragraph (d) of this section; and
    (ii) With respect to an LEA that was in corrective action status on 
January 7, 2002; and
    (3) May remove an LEA from corrective action if, on the basis of 
assessments administered by the LEA during the 2001-2002 school year, 
it makes AYP for a second consecutive year.
    (f) Delay of corrective action. (1) The SEA may delay 
implementation of corrective action under Sec.  200.53 for a period not 
to exceed one year if--
    (i) The LEA makes AYP for one year; or
    (ii) The LEA's failure to make AYP is due to exceptional or 
uncontrollable circumstances, such as a natural disaster or a 
precipitous and unforeseen decline in the LEA's financial resources.
    (2)(i) The SEA may not take into account the period of delay 
referred to in paragraph (f)(1) of this section in determining the 
number of consecutive years the LEA has failed to make AYP; and
    (ii) The SEA must subject the LEA to further actions following the 
period of delay as if the delay never occurred.
    (g) Continuation of public school choice and supplemental 
educational services. An SEA must ensure that an LEA identified under 
paragraph (d) or (e) of this section continues to offer public school 
choice in accordance with Sec.  200.44 and supplemental educational 
services in accordance with Sec.  200.45.
    (h) Removal from improvement or corrective action status. If an LEA 
makes AYP for two consecutive years following identification for 
improvement under paragraph (d) or corrective action under paragraph 
(e) of this section, the SEA need no longer--
    (1) Identify the LEA for improvement; or
    (2) Subject the LEA to corrective action for the succeeding school 
year.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(c))




Sec.  200.51  Notice of SEA action.


    (a) In general. (1) An SEA must--
    (i) Communicate with parents throughout the review of an LEA under 
Sec.  200.50; and
    (ii) Ensure that, regardless of the method or media used, it 
provides information to parents--
    (A) In an understandable and uniform format, including alternative 
formats upon request; and
    (B) To the extent practicable, in a language that parents can 
understand.
    (2) The SEA must provide information to the parents of each student 
enrolled in a school served by the LEA--
    (i) Directly, through such means as regular mail or e-mail, except 
that if an SEA does not have access to individual student addresses, it 
may provide information to the LEA or school for distribution to 
parents; and
    (ii) Through broader means of dissemination such as the Internet, 
the media, and public agencies serving the student population and their 
families.
    (3) All communications must respect the privacy of students and 
their families.
    (b) Results of review. The SEA must promptly publicize and 
disseminate to the LEAs, teachers and other staff, the parents of each 
student enrolled in a school served by the LEA, students, and the 
community the results of its review under Sec.  200.50, including 
statistically sound disaggregated results in accordance with Sec. Sec.  
200.2 and 200.7.
    (c) Identification for improvement or corrective action. If the SEA 
identifies an LEA for improvement or subjects the LEA to corrective 
action, the SEA must promptly provide to the parents of each student 
enrolled in a school served by the LEA--
    (1) The reasons for the identification; and
    (2) An explanation of how parents can participate in improving the 
LEA.
    (d) Information about action taken. (1) The SEA must publish, and 
disseminate to the parents of each student enrolled in a school served 
by the LEA and to the public, information on any corrective action the 
SEA takes under Sec.  200.53.
    (2) The SEA must provide this information--
    (i) In a uniform and understandable format, including alternative 
formats upon request; and
    (ii) To the extent practicable, in a language that parents can 
understand.
    (3) The SEA must disseminate the information through such means as 
the Internet, the media, and public agencies.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(c))


    27. Add new Sec. Sec.  200.52 and 200.53 and place them under the 
new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:


[[Page 71729]]


Sec.  200.52  LEA improvement.


    (a) Improvement plan. (1) Not later than 3 months after an SEA has 
identified an LEA for improvement under Sec.  200.50(d), the LEA must 
develop or revise an LEA improvement plan.
    (2) The LEA must consult with parents, school staff, and others in 
developing or revising its improvement plan.
    (3) The LEA improvement plan must--
    (i) Incorporate strategies, grounded in scientifically based 
research, that will strengthen instruction in core academic subjects in 
schools served by the LEA;
    (ii) Identify actions that have the greatest likelihood of 
improving the achievement of participating children in meeting the 
State's student academic achievement standards;
    (iii) Address the professional development needs of the 
instructional staff serving the LEA by committing to spend for 
professional development not less than 10 percent of the funds received 
by the LEA under subpart A of this part for each fiscal year in which 
the SEA identifies the LEA for improvement. These funds--
    (A) May include funds reserved by schools for professional 
development under Sec.  200.41(c)(5); but
    (B) May not include funds reserved for professional development 
under section 1119 of the ESEA;
    (iv) Include specific measurable achievement goals and targets--
    (A) For each of the groups of students under Sec.  200.13(b)(7); 
and
    (B) That are consistent with AYP as defined under Sec. Sec.  200.13 
through 200.20;
    (v) Address--
    (A) The fundamental teaching and learning needs in the schools of 
the LEA; and
    (B) The specific academic problems of low-achieving students, 
including a determination of why the LEA's previous plan failed to 
bring about increased student academic achievement;
    (vi) As appropriate, incorporate activities before school, after 
school, during the summer, and during any extension of the school year;
    (vii) Specify the responsibilities of the SEA and LEA under the 
plan, including the technical assistance the SEA must provide under 
paragraph (b) of this section and the LEA's responsibilities under 
section 1120A of the ESEA; and
    (viii) Include strategies to promote effective parental involvement 
in the schools served by the LEA.
    (4) The LEA must implement the improvement plan--including any 
revised plan--expeditiously, but not later than the beginning of the 
school year following the year in which the LEA administered the 
assessments that resulted in the LEA's failure to make AYP for a second 
consecutive year and led to the SEA's identification of the LEA for 
improvement under Sec.  200.50(d).
    (b) SEA technical assistance. (1) An SEA that identifies an LEA for 
improvement under Sec.  200.50(d) must, if requested, provide or 
arrange for the provision of technical or other assistance to the LEA, 
as authorized under section 1117 of the ESEA.
    (2) The purpose of the technical assistance is to better enable the 
LEA to--
    (i) Develop and implement its improvement plan; and
    (ii) Work with schools needing improvement.
    (3) The technical assistance provided by the SEA or an entity 
authorized by the SEA must--
    (i) Be supported by effective methods and instructional strategies 
grounded in scientifically based research; and
    (ii) Address problems, if any, in implementing the parental 
involvement and professional development activities described in 
sections 1118 and 1119, respectively, of the ESEA.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6316(c))




Sec.  200.53  LEA corrective action.


    (a) Definition. For the purposes of this section, the term 
``corrective action'' means action by an SEA that--
    (1) Substantially and directly responds to--
    (i) The consistent academic failure that caused the SEA to identify 
an LEA for corrective action; and
    (ii) Any underlying staffing, curriculum, or other problems in the 
LEA;
    (2) Is designed to meet the goal that each group of students 
described in Sec.  200.13(b)(7) and enrolled in the LEA's schools will 
meet or exceed the State's proficient levels of achievement as measured 
by the State assessment system; and
    (3) Is consistent with State law.
    (b) Notice and hearing. Before implementing any corrective action 
under paragraph (c) of this section, the SEA must provide notice and a 
hearing to the affected LEA--if State law provides for this notice and 
hearing--not later than 45 days following the decision to take 
corrective action.
    (c) Requirements. If the SEA identifies an LEA for corrective 
action, the SEA must do the following:
    (1) Continue to make available technical assistance to the LEA.
    (2) Take at least one of the following corrective actions:
    (i) Defer programmatic funds or reduce administrative funds.
    (ii) Institute and fully implement a new curriculum based on State 
and local content and academic achievement standards, including the 
provision of appropriate professional development for all relevant 
staff that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement 
for low-achieving students.
    (iii) Replace the LEA personnel who are relevant to the failure to 
make AYP.
    (iv) Remove particular schools from the jurisdiction of the LEA and 
establish alternative arrangements for public governance and 
supervision of these schools.
    (v) Appoint a receiver or trustee to administer the affairs of the 
LEA in place of the superintendent and school board.
    (vi) Abolish or restructure the LEA.
    (vii) In conjunction with at least one other action in paragraph 
(c)(2) of this section--
    (A) Authorize students to transfer from a school operated by the 
LEA to a higher-performing public school operated by another LEA in 
accordance with Sec.  200.44, and
    (B) Provide to these students transportation, or the costs of 
transportation, to the other school consistent with Sec.  200.44(h).


(Approved by the Office of Management and Budget under control 
number 1810-0516)


(Authority: 20 U.S.C. 6316(c)(10))


    28. Place reserved Sec.  200.54 under the undesignated center 
heading ``LEA and school improvement'' in subpart A of part 200.
    29. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec.  200.54 to read as follows:


Qualifications Of Teachers And Paraprofessionals


    30. Add new Sec. Sec.  200.55 through 200.59 and place them under 
the new undesignated center heading ``Qualifications of Teachers and 
Paraprofessionals'' in subpart A of part 200 to read as follows:




Sec.  200.55  Qualifications of teachers.


    (a) Newly hired teachers in Title I programs. (1) An LEA must 
ensure that all teachers hired after the first day of the 2002-2003 
school year who teach core academic subjects in a program supported 
with funds under subpart A of this part are highly qualified as defined 
in Sec.  200.56.


[[Page 71730]]


    (2) For the purpose of paragraph (a)(1) of this section, a teacher 
teaching in a program supported with funds under subpart A of this part 
is--
    (i) A teacher in a targeted assisted school who is paid with funds 
under subpart A of this part;
    (ii) A teacher in a schoolwide program school; or
    (iii) A teacher employed by an LEA with funds under subpart A of 
this part to provide services to eligible private school students under 
Sec.  200.62.
    (b) All teachers of core academic subjects. (1) Not later than the 
end of the 2005-2006 school year, each State that receives funds under 
subpart A of this part, and each LEA in that State, must ensure that 
all public elementary and secondary school teachers in the State who 
teach core academic subjects, including teachers employed by an LEA to 
provide services to eligible private school students under Sec.  
200.62, are highly qualified as defined in Sec.  200.56.
    (2) A teacher who does not teach a core academic subject--such as 
some vocational education teachers--is not required to meet the 
requirements in Sec.  200.56.
    (c) Definition. The term ``core academic subjects'' means English, 
reading or language arts, mathematics, science, foreign languages, 
civics and government, economics, arts, history, and geography.
    (d) Private school teachers. The requirements in this section do 
not apply to teachers hired by private elementary and secondary 
schools.


(Authority: 20 U.S.C. 6319; 7801(11))




Sec.  200.56  Definition of ``highly qualified teacher.''


    To be a ``highly qualified teacher,'' a teacher covered under Sec.  
200.55 must meet the requirements in paragraph (a) and either paragraph 
(b) or (c) of this section.
    (a) In general. (1) Except as provided in paragraph (a)(3) of this 
section, a teacher covered under Sec.  200.55 must--
    (i) Have obtained full State certification as a teacher, which may 
include certification obtained through alternative routes to 
certification; or
    (ii)(A) Have passed the State teacher licensing examination; and
    (B) Hold a license to teach in the State.
    (2) A teacher meets the requirement in paragraph (a)(1) of this 
section if the teacher--
    (i) Has fulfilled the State's certification and licensure 
requirements applicable to the years of experience the teacher 
possesses; or
    (ii) Is participating in an alternative route to certification 
program under which--
    (A) The teacher--
    (1) Receives high-quality professional development that is 
sustained, intensive, and classroom-focused in order to have a positive 
and lasting impact on classroom instruction, before and while teaching;
    (2) Participates in a program of intensive supervision that 
consists of structured guidance and regular ongoing support for 
teachers or a teacher mentoring program;
    (3) Assumes functions as a teacher only for a specified period of 
time not to exceed three years; and
    (4) Demonstrates satisfactory progress toward full certification as 
prescribed by the State; and
    (B) The State ensures, through its certification and licensure 
process, that the provisions in paragraph (a)(2)(ii) of this section 
are met.
    (3) A teacher teaching in a public charter school in a State must 
meet the certification and licensure requirements, if any, contained in 
the State's charter school law.
    (4) If a teacher has had certification or licensure requirements 
waived on an emergency, temporary, or provisional basis, the teacher is 
not highly qualified.
    (b) Teachers new to the profession. A teacher covered under Sec.  
200.55 who is new to the profession also must--
    (1) Hold at least a bachelor's degree; and
    (2) At the public elementary school level, demonstrate, by passing 
a rigorous State test (which may consist of passing a State 
certification or licensing test), subject knowledge and teaching skills 
in reading/language arts, writing, mathematics, and other areas of the 
basic elementary school curriculum; or
    (3) At the public middle and high school levels, demonstrate a high 
level of competency by--
    (i) Passing a rigorous State test in each academic subject in which 
the teacher teaches (which may consist of passing a State certification 
or licensing test in each of these subjects); or
    (ii) Successfully completing in each academic subject in which the 
teacher teaches--
    (A) An undergraduate major;
    (B) A graduate degree;
    (C) Coursework equivalent to an undergraduate major; or
    (D) Advanced certification or credentialing.
    (c) Teachers not new to the profession. A teacher covered under 
Sec.  200.55 who is not new to the profession also must--
    (1) Hold at least a bachelor's degree; and
    (2)(i) Meet the applicable requirements in paragraph (b)(2) or (3) 
of this section; or
    (ii) Based on a high, objective, uniform State standard of 
evaluation in accordance with section 9101(23)(C)(ii) of the ESEA, 
demonstrate competency in each academic subject in which the teacher 
teaches.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 7801(23))




Sec.  200.57  Plans to increase teacher quality.


    (a) State plan. (1) A State that receives funds under subpart A of 
this part must develop, as part of its State plan under section 1111 of 
the ESEA, a plan to ensure that all public elementary and secondary 
school teachers in the State who teach core academic subjects are 
highly qualified not later than the end of the 2005-2006 school year.
    (2) The State's plan must--
    (i) Establish annual measurable objectives for each LEA and school 
that include, at a minimum, an annual increase in the percentage of--
    (A) Highly qualified teachers at each LEA and school; and
    (B) Teachers who are receiving high-quality professional 
development to enable them to become highly qualified and effective 
classroom teachers;
    (ii) Describe the strategies the State will use to--
    (A) Help LEAs and schools meet the requirements in paragraph (a)(1) 
of this section; and
    (B) Monitor the progress of LEAs and schools in meeting these 
requirements; and
    (iii) Until the SEA fully complies with paragraph (a)(1) of this 
section, describe the specific steps the SEA will take to--
    (A) Ensure that Title I schools provide instruction by highly 
qualified teachers, including steps that the SEA will take to ensure 
that minority children and children from low-income families are not 
taught at higher rates than other children by inexperienced, 
unqualified, or out-of-field teachers; and
    (B) Evaluate and publicly report the progress of the SEA with 
respect to these steps.
    (3) The State's plan may include other measures that the State 
determines are appropriate to increase teacher qualifications.
    (b) Local plan. An LEA that receives funds under subpart A of this 
part must develop, as part of its local plan under section 1112 of the 
ESEA, a plan to ensure that--
    (1) All public elementary and secondary school teachers in the LEA 
who teach core academic subjects, including teachers employed by the


[[Page 71731]]


LEA to provide services to eligible private school students under Sec.  
200.62, are highly qualified not later than the end of the 2005-2006 
school year; and
    (2) Through incentives for voluntary transfers, professional 
development, recruitment programs, or other effective strategies, 
minority students and students from low-income families are not taught 
at higher rates than other students by unqualified, out-of-field, or 
inexperienced teachers.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6311(b)(8)(C), 6312(c)(1)(I), (L); 6319(a)(2)-
(3); 7801(34))




Sec.  200.58  Qualifications of paraprofessionals.


    (a) Applicability. (1) An LEA must ensure that each 
paraprofessional who is hired by the LEA and who works in a program 
supported with funds under subpart A of this part meets the 
requirements in paragraph (b) of this section and, except as provided 
in paragraph (e) of this section, the requirements in either paragraph 
(c) or (d) of this section.
    (2) For the purpose of this section, the term 
``paraprofessional''--
    (i) Means an individual who provides instructional support 
consistent with Sec.  200.59; and
    (ii) Does not include individuals who have only non-instructional 
duties (such as providing technical support for computers, providing 
personal care services, or performing clerical duties).
    (3) For the purpose of paragraph (a) of this section, a 
paraprofessional working in ``a program supported with funds under 
subpart A of this part'' is--
    (i) A paraprofessional in a targeted assisted school who is paid 
with funds under subpart A of this part;
    (ii) A paraprofessional in a schoolwide program school; or
    (iii) A paraprofessional employed by an LEA with funds under 
subpart A of this part to provide instructional support to a public 
school teacher covered under Sec.  200.55 who provides equitable 
services to eligible private school students under Sec.  200.62.
    (b) All paraprofessionals. A paraprofessional covered under 
paragraph (a) of this section, regardless of the paraprofessional's 
hiring date, must have earned a secondary school diploma or its 
recognized equivalent.
    (c) New paraprofessionals. A paraprofessional covered under 
paragraph (a) of this section who is hired after January 8, 2002 must 
have--
    (1) Completed at least two years of study at an institution of 
higher education;
    (2) Obtained an associate's or higher degree; or
    (3)(i) Met a rigorous standard of quality, and can demonstrate--
through a formal State or local academic assessment--knowledge of, and 
the ability to assist in instructing, as appropriate--
    (A) Reading/language arts, writing, and mathematics; or
    (B) Reading readiness, writing readiness, and mathematics 
readiness.
    (ii) A secondary school diploma or its recognized equivalent is 
necessary, but not sufficient, to meet the requirement in paragraph 
(c)(3)(i) of this section.
    (d) Existing paraprofessionals. Each paraprofessional who was hired 
on or before January 8, 2002 must meet the requirements in paragraph 
(c) of this section no later than January 8, 2006.
    (e) Exceptions. A paraprofessional does not need to meet the 
requirements in paragraph (c) or (d) of this section if the 
paraprofessional--
    (1)(i) Is proficient in English and a language other than English; 
and
    (ii) Acts as a translator to enhance the participation of limited 
English proficient children under subpart A of this part; or
    (2) Has instructional-support duties that consist solely of 
conducting parental involvement activities.


(Authority: 20 U.S.C. 6319(c)-(f))




Sec.  200.59  Duties of paraprofessionals.


    (a) A paraprofessional covered under Sec.  200.58 may not be 
assigned a duty inconsistent with paragraph (b) of this section.
    (b) A paraprofessional covered under Sec.  200.58 may perform the 
following instructional support duties:
    (1) One-on-one tutoring for eligible students if the tutoring is 
scheduled at a time when a student would not otherwise receive 
instruction from a teacher.
    (2) Assisting in classroom management.
    (3) Assisting in computer instruction.
    (4) Conducting parent involvement activities.
    (5) Providing instructional support in a library or media center.
    (6) Acting as a translator.
    (7) Providing instructional support services.
    (c)(1) A paraprofessional may not provide instructional support to 
a student unless the paraprofessional is working under the direct 
supervision of a teacher who meets the requirements in Sec.  200.56.
    (2) A paraprofessional works under the direct supervision of a 
teacher if--
    (i) The teacher plans the instructional activities that the 
paraprofessional carries out;
    (ii) The teacher evaluates the achievement of the students with 
whom the paraprofessional is working; and
    (iii) The paraprofessional works in close and frequent physical 
proximity to the teacher.
    (d) A paraprofessional may assume limited duties that are assigned 
to similar personnel who are not working in a program supported with 
funds under subpart A of this part--including non-instructional duties 
and duties that do not benefit participating students--if the amount of 
time the paraprofessional spends on those duties is the same proportion 
of total work time as the time spent by similar personnel at the same 
school.


(Authority: 20 U.S.C. 6319(g))
    31. Revise Sec. Sec.  200.60 and 200.61 and place them under the 
new undesignated center heading ``Qualifications of Teachers and 
Paraprofessionals'' in subpart A of part 200 to read as follows:




Sec.  200.60  Expenditures for professional development.


    (a)(1) Except as provided in paragraph (a)(2) of this section, an 
LEA must use funds it receives under subpart A of this part as follows 
for professional development activities to ensure that teachers and 
paraprofessionals meet the requirements of Sec. Sec.  200.56 and 
200.58:
    (i) For each of fiscal years 2002 and 2003, the LEA must use not 
less than 5 percent or more than 10 percent of the funds it receives 
under subpart A of this part.
    (ii) For each fiscal year after 2003, the LEA must use not less 
than 5 percent of the funds it receives under subpart A of this part.
    (2) An LEA is not required to spend the amount required in 
paragraph (a)(1) of this section for a given fiscal year if a lesser 
amount is sufficient to ensure that the LEA's teachers and 
paraprofessionals meet the requirements in Sec. Sec.  200.56 and 
200.58, respectively.
    (b) The LEA may use additional funds under subpart A of this part 
to support ongoing training and professional development, as defined in 
section 9101(34) of the ESEA, to assist teachers and paraprofessionals 
in carrying out activities under subpart A of this part.


(Authority: 20 U.S.C. 6319(h), (l); 7801(34))




Sec.  200.61  Parents' right to know.


    (a) At the beginning of each school year, an LEA that receives 
funds under subpart A of this part must notify the parents of each 
student attending a Title I school that the parents may request, and 
the LEA will provide the parents on request, information regarding the 
professional qualifications of the


[[Page 71732]]


student's classroom teachers, including, at a minimum, the following:
    (1) Whether the teacher has met State qualification and licensing 
criteria for the grade levels and subject areas in which the teacher 
provides instruction.
    (2) Whether the teacher is teaching under emergency or other 
provisional status through which State qualification or licensing 
criteria have been waived.
    (3) The baccalaureate degree major of the teacher and any other 
graduate certification or degree held by the teacher, and the field of 
discipline of the certification or degree.
    (4) Whether the child is provided services by paraprofessionals 
and, if so, their qualifications.
    (b) A school that participates under subpart A of this part must 
provide to each parent--
    (1) Information on the level of achievement of the parent's child 
in each of the State academic assessments required under Sec.  200.2;
    (2) Timely notice that the parent's child has been assigned, or has 
been taught for four or more consecutive weeks by, a teacher of a core 
academic subject who is not highly qualified.
    (c) An LEA and school must provide the notice and information 
required under this section--
    (1) In a uniform and understandable format, including alternative 
formats upon request; and
    (2) To the extent practicable, in a language that parents can 
understand.


(Approved by the Office of Management and Budget under control number 
1810-0581)


(Authority: 20 U.S.C. 6311(h)(6))




    32. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec.  200.61 to read as follows:


Participation of Eligible Children in Private Schools


    33. Add Sec.  200.62 and place it under the undesignated center 
heading ``Participation of Eligible Children in Private Schools'' in 
subpart A of part 200 to read as follows:




Sec.  200.62  Responsibilities for providing services to private school 
children.


    (a) After timely and meaningful consultation with appropriate 
officials of private schools, an LEA must--
    (1) In accordance with Sec. Sec.  200.62 through 200.67 and section 
1120 of the ESEA, provide special educational services or other 
benefits under subpart A of this part, on an equitable basis and in a 
timely manner, to eligible children who are enrolled in private 
elementary and secondary schools; and
    (2) Ensure that teachers and families of participating private 
school children participate on a basis equitable to the participation 
of teachers and families of public school children receiving these 
services in accordance with Sec.  200.65.
    (b)(1) Eligible private school children are children who--
    (i) Reside in participating public school attendance areas of the 
LEA, regardless of whether the private school they attend is located in 
the LEA; and
    (ii) Meet the criteria in section 1115(b) of the ESEA.
    (2) Among the eligible private school children, the LEA must select 
children to participate, consistent with Sec.  200.64.
    (c) The services and other benefits an LEA provides under this 
section must be secular, neutral and nonideological.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6315(b); 6320(a))




    34. Revise Sec.  200.63 and place it under the undesignated center 
heading ``Participation of Eligible Children in Private Schools'' in 
subpart A of part 200 to read as follows:




Sec.  200.63  Consultation.


    (a) In order to have timely and meaningful consultation, an LEA 
must consult with appropriate officials of private schools during the 
design and development of the LEA's program for eligible private school 
children.
    (b) At a minimum, the LEA must consult on the following:
    (1) How the LEA will identify the needs of eligible private school 
children.
    (2) What services the LEA will offer to eligible private school 
children.
    (3) How and when the LEA will make decisions about the delivery of 
services.
    (4) How, where, and by whom the LEA will provide services to 
eligible private school children.
    (5) How the LEA will assess academically the services to eligible 
private school children in accordance with Sec.  200.10, and how the 
LEA will use the results of that assessment to improve Title I 
services.
    (6) The size and scope of the equitable services that the LEA will 
provide to eligible private school children, and, consistent with Sec.  
200.64, the proportion of funds that the LEA will allocate for these 
services.
    (7) The method or sources of data that the LEA will use under Sec.  
200.78 to determine the number of private school children from low-
income families residing in participating public school attendance 
areas, including whether the LEA will extrapolate data if a survey is 
used.
    (8) The equitable services the LEA will provide to teachers and 
families of participating private school children.
    (c)(1) Consultation by the LEA must--
    (i) Include meetings of the LEA and appropriate officials of the 
private schools; and
    (ii) Occur before the LEA makes any decision that affects the 
opportunity of eligible private school children to participate in Title 
I programs.
    (2) The LEA must meet with officials of the private schools 
throughout the implementation and assessment of the Title I services.
    (d)(1) Consultation must include--
    (i) A discussion of service delivery mechanisms the LEA can use to 
provide equitable services to eligible private school children; and
    (ii) A thorough consideration and analysis of the views of the 
officials of the private schools on the provision of services through a 
contract with a third-party provider.
    (2) If the LEA disagrees with the views of the officials of the 
private schools on the provision of services through a contract, the 
LEA must provide in writing to the officials of the private schools the 
reasons why the LEA chooses not to use a contractor.
    (e)(1) The LEA must maintain in its records and provide to the SEA 
a written affirmation, signed by officials of each private school with 
participating children or appropriate private school representatives, 
that the required consultation has occurred.
    (2) If the officials of the private schools do not provide the 
affirmations within a reasonable period of time, the LEA must submit to 
the SEA documentation that the required consultation occurred.
    (f) An official of a private school has the right to complain to 
the SEA that the LEA did not--
    (1) Engage in timely and meaningful consultation; or
    (2) Consider the views of the official of the private school.


(Approved by the Office of Management and Budget under control 
number 1810-0581)


(Authority: 20 U.S.C. 6320(b))


    35. Add Sec.  200.64 and place it under the undesignated center 
heading ``Participation of Eligible Children in Private Schools'' in 
subpart A of part 200 to read as follows:




Sec.  200.64  Factors for determining equitable participation of 
private school children.


    (a) Equal expenditures. (1) Funds expended by an LEA under subpart 
A of this part for services for eligible private school children in the 
aggregate must be equal to the amount of funds generated by private 
school children from low-income families under paragraph (a)(2) of this 
section.


[[Page 71733]]


    (2) An LEA must meet this requirement as follows:
    (i)(A) If the LEA reserves funds under Sec.  200.77 to provide 
instructional and related activities for public elementary or secondary 
school students at the district level, the LEA must also provide from 
those funds, as applicable, equitable services to eligible private 
school children.
    (B) The amount of funds available to provide equitable services 
from the applicable reserved funds must be proportionate to the number 
of private school children from low-income families residing in 
participating public school attendance areas.
    (ii) The LEA must reserve the funds generated by private school 
children under Sec.  200.78 and, in consultation with appropriate 
officials of the private schools, may--
    (A) Combine those amounts, along with funds under paragraph 
(a)(2)(i) of this section, if appropriate, to create a pool of funds 
from which the LEA provides equitable services to eligible private 
school children, in the aggregate, in greatest need of those services; 
or
    (B) Provide equitable services to eligible children in each private 
school with the funds generated by children from low-income families 
under Sec.  200.78 who attend that private school.
    (b) Services on an equitable basis. (1) The services that an LEA 
provides to eligible private school children must be equitable in 
comparison to the services and other benefits that the LEA provides to 
public school children participating under subpart A of this part.
    (2) Services are equitable if the LEA--
    (i) Addresses and assesses the specific needs and educational 
progress of eligible private school children on a comparable basis as 
public school children;
    (ii) Meets the equal expenditure requirements under paragraph (a) 
of section; and
    (iii) Provides private school children with an opportunity to 
participate that--
    (A) Is equitable to the opportunity provided to public school 
children; and
    (B) Provides reasonable promise of the private school children 
achieving the high levels called for by the State's student academic 
achievement standards or equivalent standards applicable to the private 
school children.
    (3)(i) The LEA may provide services to eligible private school 
children either directly or through arrangements with another LEA or a 
third-party provider.
    (ii) If the LEA contracts with a third-party provider--
    (A) The provider must be independent of the private school and of 
any religious organization; and
    (B) The contract must be under the control and supervision of the 
LEA.
    (4) After timely and meaningful consultation under Sec.  200.63, 
the LEA must make the final decisions with respect to the services it 
will provide to eligible private school children.


(Authority: 20 U.S.C. 6320)




    36. Revise Sec.  200.65 and place it under the undesignated center 
heading ``Participation of Eligible Children in Private Schools'' in 
subpart A of part 200 to read as follows:




Sec.  200.65  Determining equitable participation of teachers and 
families of participating private school children.


    (a)(1) From applicable funds reserved for parent involvement and 
professional development under Sec.  200.77, an LEA shall ensure that 
teachers and families of participating private school children 
participate on an equitable basis in professional development and 
parent involvement activities, respectively.
    (2) The amount of funds available to provide equitable services 
from the applicable reserved funds must be proportionate to the number 
of private school children from low-income families residing in 
participating public school attendance areas.
    (b) After consultation with appropriate officials of the private 
schools, the LEA must conduct professional development and parent 
involvement activities for the teachers and families of participating 
private school children either--
    (1) In conjunction with the LEA's professional development and 
parent involvement activities; or
    (2) Independently.
    (c) Private school teachers are not covered by the requirements in 
Sec.  200.56.


(Authority: 20 U.S.C. 6320(a))




    37. Add new Sec. Sec.  200.66 and 200.67 and place them under the 
undesignated center heading ``Participation of Eligible Children in 
Private Schools'' in subpart A of part 200 to read as follows:




Sec.  200.66  Requirements to ensure that funds do not benefit a 
private school.


    (a) An LEA must use funds under subpart A of this part to provide 
services that supplement, and in no case supplant, the services that 
would, in the absence of Title I services, be available to 
participating private school children.
    (b)(1) The LEA must use funds under subpart A of this part to meet 
the special educational needs of participating private school children.
    (2) The LEA may not use funds under subpart A of this part for--
    (i) The needs of the private school; or
    (ii) The general needs of children in the private school.


(Authority: 20 U.S.C. 6320(a), 6321(b))




Sec.  200.67  Requirements concerning property, equipment, and supplies 
for the benefit of private school children.


    (a) The LEA must keep title to and exercise continuing 
administrative control of all property, equipment, and supplies that 
the LEA acquires with funds under subpart A of this part for the 
benefit of eligible private school children.
    (b) The LEA may place equipment and supplies in a private school 
for the period of time needed for the program.
    (c) The LEA must ensure that the equipment and supplies placed in a 
private school--
    (1) Are used only for Title I purposes; and
    (2) Can be removed from the private school without remodeling the 
private school facility.
    (d) The LEA must remove equipment and supplies from a private 
school if--
    (1) The LEA no longer needs the equipment and supplies to provide 
Title I services; or
    (2) Removal is necessary to avoid unauthorized use of the equipment 
or supplies for other than Title I purposes.
    (e) The LEA may not use funds under subpart A of this part for 
repairs, minor remodeling, or construction of private school 
facilities.


(Authority: 20 U.S.C. 6320(d))




    38. Place reserved Sec. Sec.  200.68 and 200.69 under the 
undesignated center heading ``Participation of Eligible Children in 
Private Schools'' in subpart A of part 200.
    39. Add a new undesignated center heading to subpart A of part 200 
and place it after reserved Sec.  200.69 to read as follows:


Allocations To LEAS


    40. Add new Sec. Sec.  200.70 through 200.75 and place them under 
the undesignated center heading ``Allocations to LEAs'' in subpart A of 
part 200 to read as follows:




Sec.  200.70  Allocation of funds to LEAs in general.


    (a) The Secretary allocates basic grants, concentration grants, 
targeted grants, and education finance incentive grants, through SEAs, 
to each eligible LEA for which the Bureau of the Census has provided 
data on the number of children from low-income families residing in the 
school attendance areas


[[Page 71734]]


of the LEA (hereinafter referred to as the ``Census list'').
    (b) In establishing eligibility and allocating funds under 
paragraph (a) of this section, the Secretary counts children ages 5 to 
17, inclusive (hereinafter referred to as ``formula children'')--
    (1) From families below the poverty level based on the most recent 
satisfactory data available from the Bureau of the Census;
    (2) From families above the poverty level receiving assistance 
under the Temporary Assistance for Needy Families program under Title 
IV of the Social Security Act;
    (3) Being supported in foster homes with public funds; and
    (4) Residing in local institutions for neglected children.
    (c) Except as provided in Sec. Sec.  200.72, 200.75, and 200.100, 
an SEA may not change the Secretary's allocation to any LEA that serves 
an area with a total census population of at least 20,000 persons.
    (d) In accordance with Sec.  200.74, an SEA may use an alternative 
method, approved by the Secretary, to distribute the State's share of 
basic grants, concentration grants, targeted grants, and education 
finance incentive grants to LEAs that serve an area with a total census 
population of less than 20,000 persons.


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)


(Authority: 20 U.S.C. 6333-6337)




Sec.  200.71  LEA eligibility.


    (a) Basic grants. An LEA is eligible for a basic grant if the 
number of formula children is--
    (1) At least 10; and
    (2) Greater than two percent of the LEA's total population ages 5 
to 17 years, inclusive.
    (b) Concentration grants. An LEA is eligible for a concentration 
grant if--
    (1) The LEA is eligible for a basic grant under paragraph (a) of 
this section; and
    (2) The number of formula children exceeds--
    (i) 6,500; or
    (ii) 15 percent of the LEA's total population ages 5 to 17 years, 
inclusive.
    (c) Targeted grants. An LEA is eligible for a targeted grant if the 
number of formula children is--
    (1) At least 10; and
    (2) At least five percent of the LEA's total population ages 5 to 
17 years, inclusive.
    (d) Education finance incentive grants. An LEA is eligible for an 
education finance incentive grant if the number of formula children 
is--
    (1) At least 10; and
    (2) At least five percent of the LEA's total population ages 5 to 
17 years, inclusive.


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)
(Authority: 20 U.S.C. 6333-6337)


Sec.  200.72  Procedures for adjusting allocations determined by the 
Secretary to account for eligible LEAs not on the Census list.


    (a) General. For each LEA not on the Census list (hereinafter 
referred to as a ``new'' LEA), an SEA must determine the number of 
formula children and the number of children ages 5 to 17, inclusive, in 
that LEA.
    (b) Determining LEA eligibility. An SEA must determine basic grant, 
concentration grant, targeted grant, and education finance incentive 
grant eligibility for each new LEA and re-determine eligibility for the 
LEAs on the Census list, as appropriate, based on the number of formula 
children and children ages 5 to 17, inclusive, determined in paragraph 
(a) of this section.
    (c) Adjusting LEA allocations. An SEA must adjust the LEA 
allocations calculated by the Secretary to determine allocations for 
eligible new LEAs based on the number of formula children determined in 
paragraph (a) of this section.


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)


(Authority: 20 U.S.C. 6333-6337)




Sec.  200.73  Applicable hold-harmless provisions.


    (a) General. (1) Except as authorized under paragraph (c) of this 
section and Sec.  200.100(d)(2), an SEA may not reduce the allocation 
of an eligible LEA below the hold-harmless amounts established under 
paragraph (a)(4) of this section.
    (2) The hold-harmless protection limits the maximum reduction of an 
LEA's allocation compared to the LEA's allocation for the preceding 
year.
    (3) Except as provided in Sec.  200.100(d), an SEA must apply the 
hold-harmless requirement separately for basic grants, concentration 
grants, targeted grants, and education finance incentive grants as 
described in paragraph (a)(4) of this section.
    (4) Under section 1122(c) of the ESEA, the hold-harmless percentage 
varies based on the LEA's proportion of formula children, as shown in 
the following table:


------------------------------------------------------------------------
    LEA's number of formula
     children ages 5 to 17,
 inclusive, as a percentage of    Hold-harmless      Applicable grant
    its total population of         percentage           formulas
     children ages 5 to 17,
           inclusive
------------------------------------------------------------------------
(i) 30% or more................              95   Basic Grants,
(ii) 15% or more but less than               90    Concentration Grants,
 30%.                                        85    Targeted Grants, and
(iii) Less than 15%............                    Education Finance
                                                   Incentive Grants.
------------------------------------------------------------------------


    (b) Targeted grants and education finance incentive grants. The 
number of formula children used to determine the hold-harmless 
percentage is the number before applying the weights described in 
section 1125 and section 1125A of the ESEA.
    (c) Adjustment for insufficient funds. If the amounts made 
available to the State are insufficient to pay the full amount that 
each LEA is eligible to receive under paragraph (a)(4) of this section, 
the SEA must ratably reduce the allocations for all LEAs in the State 
to the amount available.
    (d) Eligibility for hold-harmless protection. (1) An LEA must meet 
the eligibility requirements for a basic grant, targeted grant, or 
education finance incentive grant under Sec.  200.71 in order for the 
applicable hold-harmless provision to apply.
    (2) An LEA not meeting the eligibility requirements for a 
concentration grant under Sec.  200.71 must be paid its hold-harmless 
amount for four consecutive years.


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)


(Authority: 20 U.S.C. 6332(c))


Sec.  200.74  Use of an alternative method to distribute grants to LEAs 
with fewer than 20,000 total residents.


    (a) For eligible LEAs serving an area with a total census 
population of less than 20,000 persons (hereinafter


[[Page 71735]]


referred to as ``small LEAs''), an SEA may apply to the Secretary to 
use an alternative method to distribute basic grant, concentration 
grant, targeted grant, and education finance incentive grant funds.
    (b) In its application, the SEA must--
    (1) Identify the alternative data it proposes to use; and
    (2) Assure that it has established a procedure through which a 
small LEA that is dissatisfied with the determination of its grant may 
appeal directly to the Secretary.
    (c) The SEA must base its alternative method on population data 
that best reflect the current distribution of children from low-income 
families among the State's small LEAs and use the same poverty measure 
consistently for small LEAs across the State for all Title I, part A 
programs.
    (d) Based on the alternative poverty data selected, the SEA must--
    (1) Re-determine eligibility of its small LEAs for basic grants, 
concentration grants, targeted grants, and education finance incentive 
grants in accordance with Sec.  200.71;
    (2) Calculate allocations for small LEAs in accordance with the 
provisions of sections 1124, 1124A, 1125, and 1125A of the ESEA, as 
applicable; and
    (3) Ensure that each LEA receives the hold-harmless amount to which 
it is entitled under Sec.  200.73.
    (e) The amount of funds available for redistribution under each 
formula is the separate amount determined by the Secretary under 
sections 1124, 1124A, 1125, and 1125A of the ESEA for eligible small 
LEAs after the SEA has made the adjustments required under Sec.  
200.72(c).
    (f) If the amount available for redistribution to small LEAs under 
an alternative method is not sufficient to satisfy applicable hold-
harmless requirements, the SEA must ratably reduce all eligible small 
LEAs to the amount available.


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)


(Authority: 20 U.S.C. 6333-6337)


Sec.  200.75  Special procedures for allocating concentration grant 
funds in small States.


    (a) In a State in which the number of formula children is less than 
0.25 percent of the national total on January 8, 2002 (hereinafter 
referred to as a ``small State''), an SEA may either--
    (1) Allocate concentration grants among eligible LEAs in the State 
in accordance with Sec. Sec.  200.72 through 200.74, as applicable; or
    (2) Without regard to the allocations determined by the Secretary--
    (i) Identify those LEAs in which the number or percentage of 
formula children exceeds the statewide average number or percentage of 
those children; and
    (ii) Allocate concentration grant funds, consistent with Sec.  
200.73, among the LEAs identified in paragraph (a)(2)(i) of this 
section based on the number of formula children in each of those LEAs.
    (b) If the SEA in a small State uses an alternative method under 
Sec.  200.74, the SEA must use the poverty data approved under the 
alternative method to identify those LEAs with numbers or percentages 
of formula children that exceed the statewide average number or 
percentage of those children for the State as a whole.


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)


(Authority: 20 U.S.C. 6334(b))




    41. Add and reserve new Sec.  200.76 and place it under the revised 
undesignated center heading ``Allocations to LEAs'' in subpart A of 
part 200.


    42. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec.  200.76 to read as follows:


Procedures for the Within-District Allocation of LEA Program Funds


    43. Add new Sec. Sec.  200.77 and 200.78 and place them under the 
undesignated center heading ``Procedures for the Within-District 
Allocation of LEA Program Funds'' in subpart A of part 200 to read as 
follows:




Sec.  200.77  Reservation of funds by an LEA.


    Before allocating funds in accordance with Sec.  200.78, an LEA 
must reserve funds as are reasonable and necessary to--
    (a) Provide services comparable to those provided to children in 
participating school attendance areas and schools to serve--
    (1) Homeless children who do not attend participating schools, 
including providing educationally related support services to children 
in shelters and other locations where homeless children may live;
    (2) Children in local institutions for neglected children; and
    (3) If appropriate--
    (i) Children in local institutions for delinquent children; and
    (ii) Neglected and delinquent children in community-day school 
programs;
    (b) Provide, where appropriate under section 1113(c)(4) of the 
ESEA, financial incentives and rewards to teachers who serve students 
in Title I schools identified for school improvement, corrective 
action, and restructuring for the purpose of attracting and retaining 
qualified and effective teachers;
    (c) Meet the requirements for choice-related transportation and 
supplemental educational services in Sec.  200.48, unless the LEA meets 
these requirements with non-Title I funds;
    (d) Address the professional development needs of instructional 
staff, including--
    (1) Professional development requirements under Sec.  
200.52(a)(3)(iii) if the LEA has been identified for improvement or 
corrective action; and
    (2) Professional development expenditure requirements under Sec.  
200.60;
    (e) Meet the requirements for parental involvement in section 
1118(a)(3) of the ESEA;
    (f) Administer programs for public and private school children 
under this part, including special capital expenses, if any, incurred 
in providing services to eligible private school children, such as--
    (1) The purchase and lease of real and personal property (including 
mobile educational units and neutral sites);
    (2) Insurance and maintenance costs;
    (3) Transportation; and
    (4) Other comparable goods and services, including non-
instructional computer technicians; and
    (g) Conduct other authorized activities, such as school improvement 
and coordinated services.


(Authority: 20 U.S.C. 6313(c)(3) and (4), 6316(b)(10), (c)(7)(iii), 
6318(a)(3), 6319(l), 6320, 7279d)


Sec.  200.78  Allocation of funds to school attendance areas and 
schools.


    (a)(1) An LEA must allocate funds under subpart A of this part to 
school attendance areas and schools, identified as eligible and 
selected to participate under section 1113(a) or (b) of the ESEA, in 
rank order on the basis of the total number of children from low-income 
families in each area or school.
    (2)(i) In calculating the total number of children from low-income 
families, the LEA must include children from low-income families who 
attend private schools.
    (ii) To obtain a count of private school children, the LEA may--
    (A) Use the same poverty data the LEA uses to count public school 
children;
    (B)(1) Use comparable poverty data from a survey of families of 
private school students that, to the extent possible, protects the 
families' identity; and


[[Page 71736]]


    (2) Extrapolate data from the survey based on a representative 
sample if complete actual data are unavailable;
    (C) Use comparable poverty data from a different source, such as 
scholarship applications;
    (D) Apply the low-income percentage of each participating public 
school attendance area to the number of private school children who 
reside in that school attendance area; or
    (E) Use an equated measure of low income correlated with the 
measure of low income used to count public school children.
    (iii) An LEA may count private school children from low-income 
families every year or every two years.
    (iv) After timely and meaningful consultation in accordance with 
Sec.  200.63, the LEA shall have the final authority in determining the 
method used to calculate the number of private school children from 
low-income families;
    (3) If an LEA ranks its school attendance areas and schools by 
grade span groupings, the LEA may determine the percentage of children 
from low-income families in the LEA as a whole or for each grade span 
grouping.
    (b)(1) Except as provided in paragraphs (b)(2) and (d) of this 
section, an LEA must allocate to each participating school attendance 
area or school an amount for each low-income child that is at least 125 
percent of the per-pupil amount of funds the LEA received for that year 
under part A, subpart 2 of Title I. The LEA must calculate this per-
pupil amount before it reserves funds under Sec.  200.77, using the 
poverty measure selected by the LEA under section 1113(a)(5) of the 
ESEA.
    (2) If an LEA is serving only school attendance areas or schools in 
which the percentage of children from low-income families is 35 percent 
or more, the LEA is not required to allocate a per-pupil amount of at 
least 125 percent.
    (c) An LEA is not required to allocate the same per-pupil amount to 
each participating school attendance area or school provided the LEA 
allocates higher per-pupil amounts to areas or schools with higher 
concentrations of poverty than to areas or schools with lower 
concentrations of poverty.
    (d) An LEA may reduce the amount of funds allocated under this 
section to a school attendance area or school if the area or school is 
spending supplemental State or local funds for programs that meet the 
requirements in Sec.  200.79(b).
    (e) If an LEA contains two or more counties in their entirety, the 
LEA must distribute to schools within each county a share of the LEA's 
total grant that is no less than the county's share of the child count 
used to calculate the LEA's grant.


(Authority: 20 U.S.C. 6313(c), 6320(a) and (c)(1), 6333(c)(2))




    44. Add a new undesignated center heading to subpart A of part 200 
and place it after new Sec.  200.78 to read as follows:


Fiscal Requirements


    45. Add new Sec.  200.79 and place it under the new undesignated 
center heading ``Fiscal Requirements'' in subpart A of part 200 to read 
as follows:




Sec.  200.79  Exclusion of supplemental State and local funds from 
supplement, not supplant and comparability determinations.


    (a) For the purpose of determining compliance with the supplement 
not supplant requirement in section 1120A(b) and the comparability 
requirement in section 1120A(c) of the ESEA, a grantee or subgrantee 
under subpart A of this part may exclude supplemental State and local 
funds spent in any school attendance area or school for programs that 
meet the intent and purposes of Title I.
    (b) A program meets the intent and purposes of Title I if the 
program either--
    (1)(i) Is implemented in a school in which the percentage of 
children from low-income families is at least 40 percent;
    (ii) Is designed to promote schoolwide reform and upgrade the 
entire educational operation of the school to support students in their 
achievement toward meeting the State's challenging academic achievement 
standards that all students are expected to meet;
    (iii) Is designed to meet the educational needs of all students in 
the school, particularly the needs of students who are failing, or most 
at risk of failing, to meet the State's challenging student academic 
achievement standards; and
    (iv) Uses the State's assessment system under Sec.  200.2 to review 
the effectiveness of the program; or
    (2)(i) Serves only students who are failing, or most at risk of 
failing, to meet the State's challenging student academic achievement 
standards;
    (ii) Provides supplementary services designed to meet the special 
educational needs of the students who are participating in the program 
to support their achievement toward meeting the State's student 
academic achievement standards; and
    (iii) Uses the State's assessment system under Sec.  200.2 to 
review the effectiveness of the program.
    (c) The conditions in paragraph (b) of this section also apply to 
supplemental State and local funds expended under section 1113(b)(1)(D) 
and 1113(c)(2)(B) of the ESEA.


(Authority: 20 U.S.C. 6321(b)-(d))


    46. Revise subpart B of part 200 to read as follows:
Subpart B--Even Start Family Literacy Programs
Sec.
200.80 Migrant Education Even Start Program definition.


Subpart B--Even Start Family Literacy Programs




Sec.  200.80  Migrant Education Even Start Program definition.


    Eligible participants under the Migrant Education Even Start 
Program (MEES) must meet the definitions of a migratory child, a 
migratory agricultural worker, or a migratory fisher in Sec.  200.81.


(Authority: 20 U.S.C. 6381a and 20 U.S.C. 6399)




    47. Revise subpart C of part 200 to read as follows:
Subpart C--Migrant Education Program
Sec.
200.81 Program definitions.
200.82 Use of program funds for unique program function costs.
200.83 Responsibilities of SEAs to implement projects through a 
comprehensive needs assessment and a comprehensive State plan for 
service delivery.
200.84 Responsibilities of SEAs for evaluating the effectiveness of 
the MEP.
200.85 Responsibilities of SEAs and operating agencies for improving 
services to migratory children.
200.86 Use of MEP funds in schoolwide projects.
200.87 Responsibilities for participation of children in private 
schools.
200.88 Exclusion of supplemental State and local funds from 
supplement, not supplant and comparability determinations.
200.89 [Reserved]


Subpart C--Migrant Education Program




Sec.  200.81  Program definitions.


    The following definitions apply to programs and projects operated 
under subpart C of this part:
    (a) Agricultural activity means--
    (1) Any activity directly related to the production or processing 
of crops, dairy products, poultry or livestock for initial commercial 
sale or personal subsistence;
    (2) Any activity directly related to the cultivation or harvesting 
of trees; or
    (3) Any activity directly related to fish farms.
    (b) Fishing activity means any activity directly related to the 
catching or


[[Page 71737]]


processing of fish or shellfish for initial commercial sale or personal 
subsistence.
    (c) Migratory agricultural worker means a person who, in the 
preceding 36 months, has moved from one school district to another, or 
from one administrative area to another within a State that is 
comprised of a single school district, in order to obtain temporary or 
seasonal employment in agricultural activities (including dairy work) 
as a principal means of livelihood.
    (d) Migratory child means a child who is, or whose parent, spouse, 
or guardian is, a migratory agricultural worker, including a migratory 
dairy worker, or a migratory fisher, and who, in the preceding 36 
months, in order to obtain, or accompany such parent, spouse, guardian 
in order to obtain, temporary or seasonal employment in agricultural or 
fishing work--
    (1) Has moved from one school district to another;
    (2) In a State that is comprised of a single school district, has 
moved from one administrative area to another within such district; or
    (3) Resides in a school district of more than 15,000 square miles, 
and migrates a distance of 20 miles or more to a temporary residence to 
engage in a fishing activity.
    (e) Migratory fisher means a person who, in the preceding 36 
months, has moved from one school district to another, or from one 
administrative area to another within a State that is comprised of a 
single school district, in order to obtain temporary or seasonal 
employment in fishing activities as a principal means of livelihood. 
This definition also includes a person who, in the preceding 36 months, 
resided in a school district of more than 15,000 square miles, and 
moved a distance of 20 miles or more to a temporary residence to engage 
in a fishing activity as a principal means of livelihood.
    (f) Principal means of livelihood means that temporary or seasonal 
agricultural or fishing activity plays an important part in providing a 
living for the worker and his or her family.


(Authority: 20 U.S.C. 6391-6399, 6571)




Sec.  200.82  Use of program funds for unique program function costs.


    An SEA may use the funds available from its State Migrant Education 
Program (MEP) to carry out other administrative activities, beyond 
those allowable under Sec.  200.101, that are unique to the MEP, 
including those that are the same or similar to administrative 
activities performed by LEAs in the State under subpart A of this part. 
These activities include but are not limited to--
    (a) Statewide identification and recruitment of eligible migratory 
children;
    (b) Interstate and intrastate coordination of the State MEP and its 
local projects with other relevant programs and local projects in the 
State and in other States;
    (c) Procedures for providing for educational continuity for 
migratory children through the timely transfer of educational and 
health records, beyond that required generally by State and local 
agencies;
    (d) Collecting and using information for accurate distribution of 
subgrant funds;
    (e) Development of a statewide needs assessment and a comprehensive 
State plan for MEP service delivery;
    (f) Supervision of instructional and support staff;
    (g) Establishment and implementation of a State parent advisory 
council; and
    (h) Conducting an evaluation of the effectiveness of the State MEP.


(Authority: 20 U.S.C. 6392, 6571)




Sec.  200.83  Responsibilities of SEAs to implement projects through a 
comprehensive needs assessment and a comprehensive State plan for 
service delivery.


    (a) An SEA that receives a grant of MEP funds must develop and 
update a written comprehensive State plan (based on a current statewide 
needs assessment) that, at a minimum, has the following components:
    (1) Performance targets. The plan must specify--
    (i) Performance targets that the State has adopted for all children 
in reading and mathematics achievement, high school graduation, and the 
number of school dropouts, as well as the State's performance targets, 
if any, for school readiness; and
    (ii) Any other performance targets that the State has identified 
for migratory children.
    (2) Needs assessment. The plan must include an identification and 
assessment of--
    (i) The unique educational needs of migratory children that result 
from the children's migratory lifestyle; and
    (ii) Other needs of migratory students that must be met in order 
for migratory children to participate effectively in school.
    (3) Service delivery. The plan must describe the strategies that 
the SEA will pursue on a statewide basis to achieve the performance 
targets in paragraph (a)(1) of this section by addressing--
    (i) The unique educational needs of migratory children consistent 
with paragraph (a)(2)(i) of this section; and
    (ii) Other needs of migratory children consistent with paragraph 
(a)(2)(ii) of this section.
    (4) Evaluation. The plan must describe how the State will evaluate 
the effectiveness of its program.
    (b) The SEA must develop its comprehensive State plan in 
consultation with the State parent advisory council or, for SEAs not 
operating programs for one school year in duration, in consultation 
with the parents of migratory children. This consultation must be in a 
format and language that the parents understand.
    (c) Each SEA receiving MEP funds must ensure that its local 
operating agencies comply with the comprehensive State plan.


(Approved by the Office of Management and Budget under control 
number 1810-0659)


(Authority: 20 U.S.C. 6396)




Sec.  200.84  Responsibilities of SEAs for evaluating the effectiveness 
of the MEP.


    Each SEA must determine the effectiveness of its program through a 
written evaluation that measures the implementation and results 
achieved by the program against the State's performance targets in 
Sec.  200.83(a)(1), particularly for those students who have priority 
for service as defined in section 1304(d) of the ESEA.


(Approved by the Office of Management and Budget under control 
number 1810-0659)


(Authority: 20 U.S.C. 6394)




Sec.  200.85  Responsibilities of SEAs and operating agencies for 
improving services to migratory children.


    While the specific school improvement requirements of section 1116 
of the ESEA do not apply to the MEP, SEAs and local operating agencies 
receiving MEP funds must use the results of the evaluation carried out 
under Sec.  200.84 to improve the services provided to migratory 
children.


(Authority: 20 U.S.C. 6394)




Sec.  200.86  Use of MEP funds in schoolwide projects.


    Funds available under part C of Title I of the ESEA may be used in 
a schoolwide program subject to the requirements of Sec.  
200.28(c)(3)(i).
(Authority: 20 U.S.C. 6396)


Sec.  200.87  Responsibilities for participation of children in private 
schools.


    An SEA and its operating agencies must conduct programs and 
projects under subpart C of this part in a manner consistent with the 
basic requirements of section 9501 of the ESEA.




[[Page 71738]]




(Authority: 20 U.S.C. 6394)




Sec.  200.88  Exclusion of supplemental State and local funds from 
supplement, not supplant and comparability determinations.


    (a) For purposes of determining compliance with the comparability 
requirement in section 1120A(c) and the supplement, not supplant 
requirement in section 1120A(b) of the ESEA, a grantee or subgrantee 
under part C of Title I may exclude supplemental State and local funds 
expended in any school attendance area or school for carrying out 
special programs that meet the intent and purposes of part C of Title 
I.
    (b) Before funds for a State and local program may be excluded for 
purposes of these requirements, the SEA must make an advance written 
determination that the program meets the intent and purposes of part C 
of Title I.
    (c) A program meets the intent and purposes of part C of Title I if 
it meets the following requirements:
    (1) The program is specifically designed to meet the unique 
educational needs of migratory children, as defined in section 1309 of 
the ESEA.
    (2) The program is based on performance targets related to 
educational achievement that are similar to those used in programs 
funded under part C of Title I of the ESEA, and is evaluated in a 
manner consistent with those program targets.
    (3) The grantee or subgrantee keeps, and provides access to, 
records that ensure the correctness and verification of these 
requirements.
    (4) The grantee monitors program performance to ensure that these 
requirements are met.


(Approved by the Office of Management and Budget under control 
number 1810-0659)


(Authority 20 U.S.C. 6321(d))




Sec.  200.89  [Reserved]


    48. Revise subpart D of part 200 to read as follows:
Subpart D--Prevention and Intervention Programs for Children and Youth 
Who are Neglected, Delinquent, or At-Risk of Dropping Out
Sec.
200.90 Program definitions.
200.91 SEA counts of eligible children.
200.92-200.99 [Reserved]


Subpart D--Prevention and Intervention Programs for Children and 
Youth Who are Neglected, Delinquent, or At-Risk of Dropping Out




Sec.  200.90  Program definitions.


    (a) The following definitions apply to the programs authorized in 
part D, subparts 1 and 2 of Title I of the ESEA:
    Children and youth means the same as ``children'' as that term is 
defined in Sec.  200.103(a).
    (b) The following definitions apply to the programs authorized in 
part D, subpart 1 of Title I of the ESEA:
    Institution for delinquent children and youth means, as determined 
by the SEA, a public or private residential facility that is operated 
primarily for the care of children and youth who--
    (1) Have been adjudicated to be delinquent or in need of 
supervision; and
    (2) Have had an average length of stay in the institution of at 
least 30 days.
    Institution for neglected children and youth means, as determined 
by the SEA, a public or private residential facility, other than a 
foster home, that is operated primarily for the care of children and 
youth who--
    (1) Have been committed to the institution or voluntarily placed in 
the institution under applicable State law due to abandonment, neglect, 
or death of their parents or guardians; and
    (2) Have had an average length of stay in the institution of at 
least 30 days.
    Regular program of instruction means an educational program (not 
beyond grade 12) in an institution or a community day program for 
neglected or delinquent children that consists of classroom instruction 
in basic school subjects such as reading, mathematics, and vocationally 
oriented subjects, and that is supported by non-Federal funds. Neither 
the manufacture of goods within the institution nor activities related 
to institutional maintenance are considered classroom instruction.
    (c) The following definitions apply to the local agency program 
authorized in part D, subpart 2 of Title I of the ESEA:
    Immigrant children and youth and limited English proficiency have 
the same meanings as the term ``immigrant children'' is defined in 
section 3301 of the ESEA and the term ``limited English proficient'' is 
defined in section 9101 of the ESEA, except that the terms 
``individual'' and ``children and youth'' used in those definitions 
mean ``children and youth'' as defined in this section.
    Locally operated correctional facility means a facility in which 
persons are confined as a result of a conviction for a criminal 
offense, including persons under 21 years of age. The term also 
includes a local public or private institution and community day 
program or school not operated by the State that serves delinquent 
children and youth.
    Migrant youth means the same as ``migratory child'' as that term is 
defined in Sec.  200.81(d).


(Authority: 20 U.S.C. 6432, 6454, 6472, 7801)


Sec.  200.91  SEA counts of eligible children.


    To receive an allocation under part D, subpart 1 of Title I of the 
ESEA, an SEA must provide the Secretary with a count of children and 
youth under the age of 21 enrolled in a regular program of instruction 
operated or supported by State agencies in institutions or community 
day programs for neglected or delinquent children and youth and adult 
correctional institutions as specified in paragraphs (a) and (b) of 
this section.
    (a) Enrollment. (1) To be counted, a child or youth must be 
enrolled in a regular program of instruction for at least--
    (i) 20 hours per week if in an institution or community day program 
for neglected or delinquent children; or
    (ii) 15 hours per week if in an adult correctional institution.
    (2) The State agency must specify the date on which the enrollment 
of neglected or delinquent children is determined under paragraph 
(a)(1) of this section, except that the date specified must be--
    (i) Consistent for all institutions or community day programs 
operated by the State agency; and
    (ii) Represent a school day in the calendar year preceding the year 
in which funds become available.
    (b) Adjustment of enrollment. The SEA must adjust the enrollment 
for each institution or community day program served by a State agency 
by--
    (1) Multiplying the number determined in paragraph (a) of this 
section by the number of days per year the regular program of 
instruction operates; and
    (2) Dividing the result of paragraph (b)(1) of this section by 180.
    (c) Date of submission. The SEA must annually submit the data in 
paragraph (b) of this section no later than January 31.


(Approved by the Office of Management and Budget under control 
number 1810-0060)


(Authority: 20 U.S.C. 6432)


Sec. Sec.  200.92-200.99  [Reserved]


    49. Revise subpart E of part 200 to read as follows:
Subpart E--General Provisions
Sec.
200.100 Reservation of funds for school improvement, State 
administration, and the State academic achievement awards program.
200.101-200.102 [Reserved]
200.103 Definitions.
200.104-200.109 [Reserved]


[[Page 71739]]


Subpart E--General Provisions




Sec.  200.100  Reservation of funds for school improvement, State 
administration, and the State academic achievement awards program.


    A State must reserve funds for school improvement, State 
administration, and State academic achievement awards as follows:
    (a) School improvement. (1) To carry out school improvement 
activities authorized under sections 1116 and 1117 of the ESEA, an SEA 
must first reserve--
    (i) Two percent from the sum of the amounts allocated to the State 
under section 1002(a) of the ESEA for fiscal years 2002 and 2003; and
    (ii) Four percent from the sum of the amounts allocated to the 
State under section 1002(a) of the ESEA for fiscal year 2004 and 
succeeding years.
    (2) In reserving funds under paragraph (a)(1) of this section, a 
State may not reduce the sum of the allocations an LEA receives under 
section 1002(a) of the ESEA below the sum of the allocations the LEA 
received under section 1002(a) for the preceding fiscal year.
    (3) If funds under section 1002(a) are insufficient in a given 
fiscal year to implement both paragraphs (a)(1) and (2) of this 
section, a State is not required to reserve the full amount required 
under paragraph (a)(1) of this section.
    (b) State administration. (1) An SEA may reserve for State 
administrative activities authorized in sections 1004 and 1903 of the 
ESEA no more than the greater of--
    (i) One percent from each of the amounts allocated to the State or 
Outlying Area under section 1002(a), (c), and (d) of the ESEA; or
    (ii) $400,000 ($50,000 for the Outlying Areas).
    (2)(i) An SEA reserving $400,000 under paragraph (b)(1)(ii) of this 
section must reserve proportionate amounts from each of the amounts 
allocated to the State or Outlying Area under section 1002(a), but is 
not required to reserve proportionate amounts from section 1002(a), 
(c), and (d) of the ESEA.
    (ii) If an SEA reserves funds from the amounts allocated to the 
State or Outlying Area under section 1002(c) or (d) of the ESEA, the 
SEA may not reserve from those allocations more than the amount the SEA 
would have reserved if it had reserved proportionate amounts from 
section 1002(a), (c), and (d) of the ESEA.
    (3) If the sum of the amounts allocated to all the States under 
section 1002(a), (c), and (d) of the ESEA is greater than 
$14,000,000,000, an SEA may not reserve more than one percent of the 
amount the State would receive if $14,000,000,000 had been allocated 
among the States under section 1002(a), (c), and (d) of the ESEA.
    (4) An SEA may use the funds it has reserved under paragraph (b) of 
this section to perform general administrative activities necessary to 
carry out, at the State level, any of the programs authorized under 
Title I, parts A, C, and D of the ESEA.
    (c) State academic achievement awards program. To operate the State 
academic achievement awards program authorized under section 1117(b)(1) 
and (c)(2)(A) of the ESEA, an SEA may reserve up to five percent of the 
excess amount the State receives under section 1002(a) of the ESEA when 
compared to the amount the State received under section 1002(a) of the 
ESEA in the preceding fiscal year.
    (d) Reservations and hold-harmless. In reserving funds under 
paragraphs (b) and (c) of this section, an SEA may--
    (1) Proportionately reduce each LEA's total allocation received 
under section 1002(a) of the ESEA while ensuring that no LEA receives 
in total less than the hold-harmless percentage under Sec.  
200.73(a)(4), except that, when the amount remaining is insufficient to 
pay all LEAs the hold-harmless amount provided in Sec.  200.73, the SEA 
shall ratably reduce each LEA's hold-harmless allocation to the amount 
available; or
    (2) Proportionately reduce each LEA's total allocation received 
under section 1002(a) of the ESEA even if an LEA's total allocation 
falls below its hold-harmless percentage under Sec.  200.74(a)(3).


(Approved by the Office of Management and Budget under control 
numbers 1810-0620 and 1810-0622)


(Authority: 20 U.S.C. 6303, 6304, 6317(c)(2)(A))


Sec. Sec.  200.101--200.102  [Reserved]




Sec.  200.103  Definitions.


    The following definitions apply to programs operated under this 
part:
    (a) Children means--
    (1) Persons up through age 21 who are entitled to a free public 
education through grade 12; and
    (2) Preschool children below the age and grade level at which the 
agency provides free public education.
    (b) Fiscal year means the Federal fiscal year--a period beginning 
on October 1 and ending on the following September 30--or another 12-
month period normally used by the SEA for record-keeping.


(Authority: 20 U.S.C. 6315, 6571)


Sec. Sec.  200.104--200.109  [Reserved]


Appendix--Analysis of Comments and Changes


    (Note: This appendix will not be codified in the Code of Federal 
Regulations)


Section 200.11 Participation In NAEP


    Comment: One commenter recommended that the language requiring LEAs 
receiving Title I funds to participate in State-NAEP assessments be 
strengthened by specifying an expected participation rate for States 
and LEAs. The commenter further requested additional language that 
would describe allowable extenuating circumstances that would excuse 
schools from participating in the State NAEP assessments.
    Discussion: Section 1112(b)(1)(F) of the ESEA requires that an LEA, 
in its plan submitted to the State, provide an assurance that it will 
participate, if selected, in NAEP. The statute is clear that all LEAs, 
if selected, must participate. Therefore, the Secretary does not 
believe that language concerning expected participation rates is 
needed. The Secretary further believes that there will be few, if any, 
extenuating circumstances that would excuse a school from participating 
in the State-NAEP and will address any special circumstances on a case-
by-case basis.
    Changes: None.
    Comment: One commenter, while agreeing that participation of fourth 
and eighth graders in NAEP testing in mathematics and reading is 
appropriate, stated that the costs for administering those tests should 
not be taken from a district's Title I allocation.
    Discussion: Section 200.11 states that participation in the State 
NAEP is mandatory, if the Department pays the costs of administering 
those assessments.
    Changes: None.
    Comment: One commenter recommended clarifying that the criteria 
used for selecting students to participate in NAEP reflect the student 
population that the State tests for State assessment purposes and for 
making determinations.
    Discussion: Section 411(b)(2)of the National Education Statistics 
Act of 1994 requires NAEP to ``use a random sampling process which is 
consistent with relevant, widely accepted professional assessment 
standards and that produces data that are representative on a national 
and regional basis.''
    Changes: None.
    Comment: One commenter recommended adding language to


[[Page 71740]]


address the situation for rural schools with no fourth or eighth grade 
students by stating that ``if the selected school has students in 
fourth or eighth grade, the school is required to participate in 
NAEP.''
    Discussion: Since it would not be possible for a school to 
participate in NAEP if it had no students enrolled at the grade(s) 
tested, no further clarification is necessary.
    Changes: None
    Comment: One commenter stated that if NAEP results are to be valid 
and accurate, a district may not be allowed to opt out of tests that 
rely on sampling techniques. To reinforce this policy the commenter 
recommended that the Department request Congress to make a technical 
correction to the ESEA and statutorily modify the contradiction in 
Sec.  602 of that Act, which amended Sec.  411(d)(1) of the National 
Education Statistics Act of 1994. Another commenter, however, 
recommended that Sec.  200.11 allow for voluntary participation in 
NAEP, consistent with Sec.  1112(b)(1)(f) of the ESEA.
    Discussion: The regulation clarifies that, if selected, an LEA that 
receives funds under part A of Title I of the ESEA must participate in 
NAEP notwithstanding the provisions of Sec.  411(d)(1) of the National 
Education Statistics Act of 1994, which generally provides for 
voluntary participation of LEAs.
    Changes: None.
    Comment: One commenter recommended clarification of the meaning of 
``participate'' because an LEA could agree to participate, but all or 
most of the selected schools in that LEA could refuse to participate. 
The current NAEP guidelines require 85 percent participation of 
selected schools if a State is to report State-level results.
    Discussion: Additional clarification is not necessary because an 
LEA cannot meet the NAEP participation requirement unless it requires 
all schools selected to participate.
    Changes: None.


Section 200.12 Single State Accountability System


    Comment: One commenter suggested that States should be directed to 
develop accountability systems that include multiple assessments that 
measure higher-order thinking skills. The commenter's rationale was 
that this would provide more valid and reliable student data.
    Discussion: Section 1111(b)(3)(C)(vi) of the ESEA requires that 
statewide assessments include multiple measures that assess higher-
order thinking skills and understanding. This requirement is clarified 
in Sec.  200.2(b)(7) of the standards and assessment regulations 
published on July 5, 2002 at 67FR 45038.
    Changes: None.
    Comment: One commenter suggested that the statutory requirements 
for determining adequate yearly progress (AYP) be integrated into the 
State's existing system of accountability. Furthermore, the commenter 
expressed opposition to using different accountability measures in 
different States.
    Discussion: The Secretary agrees that the statutory and regulatory 
provisions governing AYP must be integrated into a State's 
accountability system. To comply with the NCLB Act, each State will 
need to incorporate these requirements into its current accountability 
system. The statute gives States flexibility to define achievement 
standards, design assessments, and implement the accountability 
provisions. The Secretary believes that these State responsibilities 
will necessarily result in variation among State accountability 
systems.
    Changes: None.
    Comment: One commenter expressed concerns that State accountability 
systems will exclude homeless children.
    Discussion: The statute and the regulations in Sec.  200.6(d) 
require States to include homeless students in their assessment, 
reporting, and accountability systems. However, the Secretary is aware 
that the NCLB Act does not specifically identify homeless students as 
one of the subgroups whose progress will be monitored in meeting the 
2013-2014 proficiency goals. Nevertheless, these students are required 
to be included in the accountability system. Schools and districts are 
required to test all students, and high participation rates in 
statewide assessments (i.e., 95 percent) are a condition of making AYP. 
Furthermore, these students will be included in at least one subgroup--
the ``all student'' category--and schools will be accountable for 
ensuring this group of students is proficient. To the extent that 
homeless children are mobile, and many are, the regulations clarify 
that students who have not been in a school for a full academic year 
must be included in district accountability, or in State accountability 
in those cases where students have been in multiple districts.
    Changes: None.


Section 200.13 Adequate Yearly Progress in General


    Comment: A number of commenters urged the Secretary to include 
flexibility in the final regulations on to accommodate ``rigorous 
models that States have already developed that may achieve the same 
fundamental principles of the statute, although through different 
approaches,'' as discussed in the preamble to the proposed regulations 
and the Secretary's July 24, 2002 Dear Colleague letter. In particular, 
commenters sought recognition of the validity of models that use 
``growth trajectories,'' performance indices, or other ``value-added'' 
measures. Other commenters, however, strongly urged the Secretary to 
ensure that any flexibility regarding the definition in the final 
regulations does not go beyond the original intention of the ESEA.
    Discussion: The NCLB Act included very specific, rigorous 
requirements that States must implement to determine the AYP of each 
public school, LEA, and the State itself. In preparing the final 
regulations, the Secretary has faithfully implemented the statutory 
provisions governing AYP addressing additional flexibility wherever 
possible. The Secretary realizes that the accountability systems 
currently in place in many States may not fully meet the statutory and 
regulatory requirements. To meet the requirements in the ESEA and these 
final regulations, a State may continue to use its current State 
accountability system, consistent with the Secretary's July 24, 2002 
Dear Colleague letter, if that system integrates AYP as defined in the 
statute and regulations.
    Changes: None.
    Comment: One commenter requested clarification regarding the impact 
of recent changes in the definitions of ethnic groups issued by the 
Office of Management and Budget (OMB) on the requirement to ensure by 
major racial and ethnic groups. Another commenter also suggested that 
any changes in such definitions could hinder State efforts to collect 
student level achievement data.
    Discussion: The Department is developing guidance on the 
implementation of OMB standards for data on multi-racial/ethnic groups 
of individuals. Those standards will take effect for educational 
agencies no sooner than the fall of 2004. Once the Department guidance 
is issued, the Department plans to provide adequate lead-time for 
educational agencies to make appropriate adjustments to their data 
systems. Until that happens, educational agencies are under no 
obligation to maintain, use, or report data under the OMB standards. 
Although implementation of the new multi-racial data requirements must 
await publication of guidance by the Department, the Secretary 
encourages States to consider taking appropriate steps to implement 
other provisions of


[[Page 71741]]


the OMB standards, such as separating Asians from Native Hawaiians and 
Other Pacific Islanders.
    Changes: None.
    Comment: Several commenters strongly recommended that any alternate 
assessment be based on the same State academic content standards used 
for the regular assessments. The commenters believed that applying the 
same standards to all children is the cornerstone of standards-based 
education. Other commenters, however, supported alternate standards as 
long as they are developed through a documented and validated process. 
Additional commenters urged that any student prevented by a disability 
from completing the regular assessment be permitted to take an 
alternate assessment based on different standards, not just students 
with ``the most significant cognitive disabilities.'' One commenter 
expressed concern that requiring grade-level testing for students with 
disabilities would be unfair both to individual students and to schools 
enrolling such students.
    Discussion: Too often in the past, schools and LEAs have not 
expected students with disabilities to meet the same grade-level 
standards as other students. The NCLB Act sought to correct this 
problem by requiring each State to develop grade-level academic content 
and achievement standards that it expects all students--including 
students with disabilities--to meet, and by holding schools and LEAs 
responsible for all students meeting those standards. If students with 
disabilities cannot take a State's regular assessment, even with 
accommodations, Sec.  200.6(a) of the final Title I regulations 
published on July 5, 2002 at 67 FR 45038, 45041 required the State to 
provide for one or more alternate assessments to measure those 
students' achievement against the State's standards. Those final 
regulations, however, did not clearly link those alternate assessments 
to grade-level expectations. To make this link, the Secretary has 
revised Sec.  200.6(a)(2)(ii) of the final regulations issued on July 
5, 2002 to make clear that alternate assessments must yield results for 
the grade in which a student with disabilities is enrolled. This change 
is critical to ensure that students with disabilities are not excluded 
from State accountability systems. This policy may be modified in the 
future after public comment on the separate notice of proposed 
rulemaking discussed in the preamble to these final regulations.
    Changes: Section 200.6(a)(2)(ii) has been revised to make clear 
that alternate assessments for students with disabilities who cannot 
take the State's regular assessment must yield results for the grade in 
which the student is enrolled.
    Comment: Several commenters expressed concern that proposed Sec.  
200.13(d) would create a ``loophole'' permitting arbitrary exclusion of 
some schools from an SEA's regular assessment and accountability 
system. The commenters noted in particular that widely differing 
definitions of ``full academic year'' could lead to abuses of the 
proposed regulations, and that the proposed regulations could be 
manipulated to avoid assessment of certain students. One commenter 
recommended clarifying that students attending a school for only part 
of the academic year, but who are in an assessed grade and who have 
attended schools in a single LEA for a full academic year, must be 
assessed and counted in the calculation of AYP for the LEA.
    Discussion: The intent behind the proposed regulation was to ensure 
that schools in which no student attends for a full academic year are 
held accountable. It was in no way intended to create a ``loophole'' 
that would permit certain students to not be assessed. In response to 
these comments, this proposed regulation is removed. Instead, these 
schools are governed by the final regulation in Sec. Sec.  200.20(e) 
and 200.21(b): any student who is not in a school for a full academic 
year but within a single district for a full academic year is included 
in accountability for the LEA, and any student who attends schools 
within several districts but within the same State for a full academic 
year is included in determinations of State AYP. Schools in which no 
student has attended for a full academic year would not be subject to 
determinations of AYP; those students, however, would be assessed and 
included, as discussed above, in decisions about LEA and State 
progress.
    Changes: Section 200.13(d) has been amended to remove the proposed 
requirement that a State must establish a way to hold accountable 
``schools whose purpose is to serve students for less than a full 
academic year.''
    Comment: Two commenters sought clarification of the types of 
schools referred to in proposed Sec.  200.13(d)(1)(ii)--that is, those 
whose purpose was to serve students for less than a full academic year. 
In particular, one commenter expressed concern that the proposed 
regulations might require an SEA to hold accountable schools not under 
its jurisdiction, such as juvenile justice alternative education 
programs.
    Discussion: As discussed above, proposed Sec.  200.13(d)(1)(ii) has 
been deleted. In accordance with Sec.  200.20(e)(2), to the extent that 
a school serves students in a juvenile justice alternative education 
program for less than a full academic year, the school would not be 
held accountable for those students in determinations of AYP.
    With respect to the issue of whether a State must hold accountable 
schools not under the jurisdiction of the SEA, Sec.  200.13 of the 
regulations, consistent with the statute, requires each State to 
develop a single, statewide accountability system that will be 
effective in ensuring that all LEAs, public elementary and public 
secondary schools make AYP. The Department generally defers to the 
State interpretation of what is a public elementary and secondary 
school and an LEA, in accordance with State law. In a number of States, 
juvenile justice alternative education programs are conducted in public 
schools operated within school districts or other entities that are 
LEAs under State law. In some States, the SEA has oversight 
responsibility for juvenile justice alternative education programs, or 
enters into an agreement with the State agency responsible for such 
programs.
    Changes: Section 200.13(d)(1)(ii) has been deleted.


Section 200.15 Timeline


    Comment: Several commenters requested clarification of how changes 
in assessment systems or AYP definitions will impact baselines and AYP 
calculations over the course of the 12-year timeline for ensuring that 
all students are proficient.
    Discussion: As a State changes its assessments and collects new 
data, the State may adjust its timeline, annual measurable objectives 
and intermediate goals, as long as the new system has as its goal that 
all students achieve proficiency by 2013-14. Further, regardless of 
changing assessment systems, States must review the progress of schools 
each year and, based on this annual review, identify schools that do 
not meet AYP. If a Title I school has not made AYP for two consecutive 
years, it must be identified for improvement, even if the assessment 
system changed between those years, thereby changing the basis for 
identification. Similarly, a school that has been identified for 
improvement cannot exit school improvement status merely because a 
different assessment system is used. Examples of ways in which States 
can continue providing accountability decisions while moving to new


[[Page 71742]]


assessments will be included in nonregulatory guidance.
    Changes: None.


Section 200.16 Starting Points


    Comment: One commenter requested clarification that States are 
permitted to average assessment data over a period of several years to 
establish starting points for reading/language arts and mathematics.
    Discussion: The Secretary agrees that, consistent with Sec.  
200.20(d)(1)(i), more than one year of data can be used to establish 
the starting point as long as that data includes assessment results 
from the 2001-02 school year and does not delay the establishment of 
the starting point. This clarification will be further explained in 
nonregulatory guidance.
    Changes: None.
    Comment: Three commenters requested that the final regulations 
permit States to establish separate starting points for each subgroup 
of students.
    Discussion: The NCLB Act clearly states that the starting point 
must be the same for each subgroup of students. The final regulations 
maintain this position. The Secretary believes that this approach 
establishes similar expectations for all schools and requires high 
achievement for all students. The final regulations do allow a State to 
establish separate starting points by grade span.
    Changes: None.


Section 200.18 Annual Measurable Objectives


    Comment: Two commenters requested that the final regulations permit 
a State to establish separate baselines and measurable objectives for 
each subgroup of students.
    Discussion: The ESEA clearly states that the starting point and 
annual measurable objectives must be the same for each subgroup of 
students.
    Changes: None.
    Comment: One commenter objected to determining AYP for an LEA based 
on the academic achievement of all the students enrolled in the LEA, 
rather than the performance of the schools within the LEA. On the other 
hand, another commenter recommended that the final regulations clarify 
that AYP for an LEA be based on the aggregated achievement of its 
students and not its schools.
    Discussion: The ESEA clearly specifies that LEAs are to be held 
accountable for the achievement of students in the same manner as 
schools. This means that each LEA is held accountable for all students 
attending schools within the district for a full academic year. These 
students must meet or exceed the annual measurable objectives and State 
goals for the other academic indicators. These provisions are a 
critical means of ensuring that students who are mobile within a 
district are not excluded from accountability; they are included in LEA 
and State accountability.
    Changes: None.


Section 200.19 Other Academic Indicators


    Comment: Several commenters asserted that, contrary to the ESEA, 
the proposed regulations appear to make the use of other academic 
indicators, including graduation rate, optional in the determination of 
AYP. The commenters recommended that the final regulations clarify that 
States must include graduation rate at the high school level and one 
other academic indicator at the elementary and middle school levels as 
part of their definitions of AYP, and that progress toward intermediate 
and final objectives for these indicators is required for a State, LEA, 
or school to make AYP. Another commenter made a similar recommendation, 
based on the principle that a school that improves test scores by 
increasing its dropout rate should not make AYP and should be 
identified for improvement. Another commenter requested that the final 
regulations reflect the statutory requirement that the other academic 
indicators adopted by a State be measured separately for each subgroup 
of students.
    Discussion: As stated in Sec.  200.19(a), a State must use 
graduation rate for high schools and another academic indicator of its 
choosing for elementary schools and for middle schools to determine 
AYP. Section 200.19(d)(2) makes clear that the State must disaggregate 
its other academic indicators, including graduation rate, by each 
subgroup in order to report that information under section 1111(h) of 
the ESEA and to calculate whether schools that do not meet the State's 
annual measurable objectives but have decreased for each subgroup the 
percentage of students below proficient by at least 10 percent can be 
considered to have made AYP. As indicated in Sec.  200.19(d)(2)(ii), 
however, the State need not disaggregate its other academic indicators 
for determining AYP. The Secretary is confident that publicly reporting 
disaggregated data on the other academic indicators will ensure that 
schools, LEAs, and the State are held accountable for subgroup 
performance.
    Changes: Section 200.19(a) and (d)(2) have been modified as 
discussed above.
    Comment: One commenter requested clarification on the definition of 
``a regular diploma,'' as used in Sec.  200.19(a)(1)(i). Another 
commenter asked whether a ``certificate of attendance'' or similar 
recognition for students with disabilities may be considered a 
``regular diploma.''
    Discussion: The Secretary believes it is important to clarify this 
term to ensure that States use graduation rates that are as accurate 
and meaningful as possible. As a result, the final regulations make 
clear that a ``regular diploma'' must be fully aligned with the State's 
academic content standards and may not include a certificate or GED. 
Thus, if a student with disabilities is given only a certificate of 
attendance that does not reflect the student's achievement against the 
State's content standards, that student would not have received a 
``regular diploma'' and thus would not be considered to have graduated 
for purposes of calculating graduation rate.
    Changes: The final regulations clarify in Sec.  200.19(a)(1)(i) 
that a regular diploma may not include an alternative degree that is 
not fully aligned with the State's academic standards, such as a 
certificate or GED.
    Comment: One commenter objected to the use of the term ``standard 
number of years'' as part of the regulatory definition of graduation 
rate, on the grounds that such a limitation could penalize schools 
serving students--such as students with disabilities, limited English 
proficient students, and returning dropouts--who typically take longer 
to graduate.
    Discussion: The Secretary believes that the regulations provide 
sufficient flexibility to address such students. For students that, in 
very limited instances, may take longer than the standard number of 
years to graduate, a State may propose a manner for accurately 
accounting for these students in an alternate definition of graduation 
rate under Sec.  200.19(a)(1)(i)(B). This definition must be included 
with the State accountability plan and submitted for peer review.
    Changes: None.
    Comment: Several commenters expressed concern that proposed Sec.  
200.19(a)(1) does not reflect conference report language accompanying 
the NCLB Act that requires measurement of graduation rates in a way 
that ``avoids counting dropouts as transfers'' and specifically 
includes the graduation rate in the definition of AYP. Several 
commenters also maintained that any alternative to the statutory 
definition of graduation rate must be based on a ``more accurate


[[Page 71743]]


longitudinal system that follows individual student progress'' and thus 
could accommodate varying numbers of years required to graduate for 
students with special educational needs. Two of the commenters 
encouraged the Secretary to take the lead in establishing a ``common 
framework'' for calculating graduation and dropout rates in all States, 
and one commenter recommended a specific definition based on a 
combination of statutory and conference report language. Two other 
commenters supported the flexibility regarding graduation rates 
provided in the proposed regulation.
    Discussion: The Secretary agrees that the graduation rate should 
not include students who have dropped out of school as students who 
have transferred to another school. With the passage of the NCLB Act, 
the expectations for schools to make AYP have increased; it is 
critically important that schools do not make AYP simply because 
students have dropped out of school. The Secretary also agrees that 
graduation rate should be measured from the beginning of high school in 
order to capture students who drop out before reaching 12th grade.
    Changes: Section 200.19(a)(1)(ii) of the final regulations 
clarifies that a State must define graduation rate in a manner that 
does not count students who have dropped out of school as students who 
have transferred to another school. In addition, Sec.  
200.19(a)(1)(i)(A) of the final regulations has been amended to require 
States to measure graduation rate ``from the beginning of high 
school.''
    Comment: One commenter agreed with proposed Sec.  200.19(c), that 
gives States discretion to require progress on other academic 
indicators by setting increasing goals for those indicators, but 
recommended that the final regulation also not permit a decline in such 
indicators from the initial baseline level. Another commenter requested 
clarification as to whether the State must set goals for these 
indicators or may simply require ``progress'' over a certain 
``threshold'' level. A third commenter recommended requiring a timeline 
for any additional indicators used by a State, including starting 
points, intermediate goals, and annual measurable objectives for such 
indicators.
    Discussion: The NCLB Act offers flexibility to States to define how 
progress will be measured relative to the other academic indicators. 
The regulations permit, but do not require, a State to increase the 
goals of its other academic indicators over the course of the timeline.
    Changes: None.


Section 200.20 Making Adequate Yearly Progress


    Comment: In determining AYP, one commenter requested clarification 
regarding the use of academic indicators in a school that includes both 
high school students and middle or elementary school students. Since 
these schools will have two indicators, the commenter asked if the 
groups must make progress on both for the school to make AYP.
    Discussion: The NCLB Act is silent on this issue. The use of these 
indicators in determining AYP may vary depending on the configuration 
of a school (e.g., kindergarten through eighth grade, eighth through 
twelfth grade). The Secretary asks States to propose a policy for 
addressing this issue when they submit plans for their State 
accountability systems.
    Changes: None.
    Comment: One commenter expressed concern that the 95 percent 
assessment requirement in proposed Sec.  200.20(c)(1)(i) may be 
misconstrued as relieving States, LEAs, and schools from the 
requirement to assess all students under Sec. Sec.  200.2(b)(9) and 
200.6.
    Discussion: The NCLB Act clearly states that all students must be 
assessed to measure their achievement toward meeting the State's 
challenging academic standards. Schools and districts are held 
accountable for ensuring high rates of participation: no less than 95 
percent of all students and student subgroups must participate in the 
statewide assessments.
    Changes: Section 200.20(c)(2) clarifies that a State, LEA, or 
school may not systematically exclude students from taking the 
statewide assessments.
    Comment: Several commenters requested that the final regulations 
provide flexibility to States in applying the requirement that 95 
percent of each subgroup be tested in order to make AYP. Three of these 
commenters were particularly concerned about the impact on this 
requirement of State rules permitting parents to exclude their children 
from statewide assessments. Two other commenters recommended phasing in 
the 95 percent requirement over several years.
    Discussion: The ESEA does not allow for a phase-in of the 
participation requirement for AYP. The statute does acknowledge through 
the 95 percent participation rate requirement that there may be 
instances in which parents do not allow their students to take the 
statewide assessments. Schools, LEAs, and States need to carefully and 
thoughtfully explain to parents the importance of participating in such 
assessments and the consequences for not participating.
    Changes: None.
    Comment: Two commenters requested clarification that proposed Sec.  
200.20(c)(1)(ii), which requires subgroups to be of sufficient size to 
produce statistically reliable results, applies only to the 
determination of AYP and does not change the requirement that all 
students must participate in the annual assessment system.
    Discussion: The ESEA clearly states that all students must be 
assessed to measure their achievement on challenging academic 
standards. For purposes of determining AYP, if a subgroup within any 
particular school or district is too small to produce statistically 
reliable results, the requirement for 95 percent participation would 
not apply to that subgroup. The Secretary clarifies in the final 
regulations that a State, LEA, or school may not systematically exclude 
students from participating in the assessments.
    Changes: Section 200.20(c)(2) of the final regulations clarifies 
that the ``95 percent participation rule'' does not permit a school or 
LEA to systematically exclude 5 percent of students from participating 
in the assessments.
    Comment: Several commenters recommended that the final regulations 
clarify that, even if a subgroup is too small to produce statistically 
reliable data at the school level, the results of that subgroup must be 
aggregated at the next level--in this case, for the LEA--to ensure that 
the progress of the subgroup is not simply overlooked or excluded from 
all calculations of AYP.
    Discussion: The Secretary agrees with these comments.
    Changes: Sections 200.20(e)(1) and 200.21(b) and 200.7(d) make 
clear that all students enrolled for a full academic year in an LEA or 
in a State must be included for accountability purposes at that level, 
provided the size of a subgroup is large enough to produce 
statistically reliable results. Subgroups too small to be reported or 
identified at one level must be included at the next higher level, 
assuming the subgroup reaches the appropriate size.
    Comment: Two commenters expressed concern that varying definitions 
of ``statistical significance'' applied under proposed Sec.  
200.20(c)(1)(ii) could undermine the subgroup-based accountability 
provisions of the NCLB Act. One commenter recommended that the final 
regulations include standards to guide States in determining the number 
of students required to yield statistically reliable information.


[[Page 71744]]


    Discussion: Determining the number of students required to yield 
statistically reliable information is the responsibility of each State. 
The Secretary will review and approve these definitions as part of his 
approval of State accountability systems. In nonregulatory guidance, 
the Department may offer some guidelines for States to consider as they 
make this decision.
    Changes: None.
    Comment: One commenter recommended that the final regulations 
provide flexibility in defining AYP for small school districts and 
single-school LEAs, in particular, that may find it difficult to 
implement the subgroup-based accountability requirements of the ESEA.
    Discussion: The intent of the law is to ensure that all schools and 
districts are held accountable for student achievement. In those 
instances in which schools and districts are too small to include any 
subgroups, the school and district will need to make a decision about 
AYP at least on the basis of all its students who were enrolled in the 
school or district for a full academic year. The Department of 
Education will issue nonregulatory guidance to provide examples of 
methodologies for handling this issue.
    Changes: None.
    Comment: Two commenters objected to proposed Sec.  
200.20(d)(1)(ii)(B), which would permit a State to delay the 
determination of AYP on the basis of the new assessments for grades 3-8 
required by the NCLB Act until the State has two or three years of data 
to average under proposed Sec.  200.20(d)(1)(i). One commenter noted 
that this provision potentially delays the use of the new assessment 
data until the final year of the current authorization. Another 
commenter, however, expressed support for the flexibility provided in 
the proposed regulation.
    Discussion: Section 1111(b)(2)(J) of the ESEA permits a State to 
establish a uniform procedure for averaging data across grades and 
across years in determining AYP. That provision specifically permits a 
State averaging data across years to accumulate two or three years of 
data under the new grades 3-8 assessments required by the NCLB Act 
before using that data to determine AYP. The final regulations 
accurately reflect this authority. They also make clear, however, that 
a State may not delay implementing the new grades 3-8 assessment 
requirements. Moreover, the State must report these data under section 
1111(h)of the ESEA. Further, at a minimum, the State must continue 
making annual decisions about AYP on the basis of data from the 
reading/language arts and mathematics assessments in the three grade 
spans required in Section 1111(b)(3)(C)(v)(I) of the ESEA.
    Changes: Section 200.20(d)(1) has been revised to clarify better 
the intent of these provisions.
    Comment: Two commenters recommended modifying proposed Sec.  
200.20(e) to restore the statutory emphasis on mitigating the impact of 
student mobility on assessment results and prevent the potential 
creation of a loophole permitting the exclusion of dropouts from the 
determination of AYP. Additionally, another commenter recommended 
permitting either the State or the LEA to define ``full academic 
year.''
    Discussion: The final regulations are an accurate reflection of the 
statute: students who are enrolled within a district for a full 
academic year must be included in the AYP of an LEA. Moreover, the 
final regulations clarify that students who were not enrolled within a 
school for a full academic year may not be included within that 
school's determination of AYP. The Secretary also believes that it is 
appropriate and justified to leave the decision of what is a ``full 
academic year'' to each State.
    Changes: None.


Section 200.21 Adequate Yearly Progress of a State


    Comment: Three commenters recommended that the final regulations 
specify that students who attend schools within a State but in more 
than one LEA must be included in the determination of AYP for the 
State. Two commenters also urged the Secretary to require States to 
report on the progress of these students.
    Discussion: The Secretary concurs with these comments.
    Changes: Section 200.21(b) of the final regulations specifies that 
all students who were enrolled within schools in a State for a full 
academic year must be included in determining the progress of the 
State.
    Comment: One commenter requested that the final regulations include 
a description of required technical assistance and other interventions 
by the Secretary in the case of States that do not make AYP.
    Discussion: In the case of a State that does not make AYP, the 
technical assistance offered by the Secretary would be specific to the 
State's needs. In order to offer the maximum amount of flexibility in 
designing technical assistance, this issue will not be addressed in the 
regulations but will be handled on a case-by-case basis within the 
statutory parameters.
    Changes: None.
    Comment: One commenter urged the Secretary to include in the final 
regulations a description of State obligations and requirements under 
section 1111 of the ESEA to ensure that each State provides sufficient 
support to LEAs and schools in implementation.
    Discussion: The ambitious goals for student achievement contained 
within the NCLB Act will best be achieved when States, districts, and 
schools work together. To that end, the Department will provide 
nonregulatory guidance about the roles of each entity and how they can 
support improved achievement. The Secretary understands the important 
role of the U.S. Department of Education as well and intends to review 
State accountability plans in an expeditious manner.
    Changes: None.
    Comment: Two commenters recommended that the final regulations 
require States to establish English Language Development Standards 
designed to measure the oral, reading, and written proficiency in 
English of limited English proficient students, as well as annual exams 
linked to those standards.
    Discussion: These final regulations cover only those provisions 
contained within Title I of the ESEA. The provisions governing the 
development of English proficiency are found in Title III. The 
Department plans to issue nonregulatory guidance on this issue.
    Changes: None.


Schoolwide Programs


Section 200.25 Schoolwide Program Purpose and Eligibility


    Comment: One commenter cautioned that because the final regulations 
are used frequently at the district and school level, they should 
adhere as closely as possible to the NCLB Act. The commenter strongly 
suggested that the regulations be restored to reflect the omitted 
statutory requirements for schoolwide programs such as: opportunities 
for advanced instruction and increased learning time, extended learning 
opportunities, and provisions related to the needs assessment. The 
commenter also recommended that the regulations be changed to ensure 
that schoolwide programs include strategies to meet the educational 
needs of historically underserved populations.
    Discussion: The preamble to the NPRM makes specific reference to 
the major purpose of schoolwide programs, which is to address the needs 
and improve academic achievement of all


[[Page 71745]]


students in the school, especially for those furthest away from 
demonstrating proficiency. The language in the preamble did not 
especially address the comprehensive needs assessment and its 
provisions because the needs assessment is an integral part of the 
schoolwide planning process outlined in Sec.  200.26.
    Changes: None.
    Comment: One commenter requested clarification of the apparently 
contradictory regulatory language in Sec. Sec.  200.25 through 200.27, 
that defines low-achieving children as ``those students furthest away 
from demonstrating proficiency,'' while the language in Sec.  200.25 
states that a schoolwide program need not identify, target, or track 
these children.
    Discussion: In defining lowest achieving children, the preamble 
refers to those students furthest away from meeting proficient and 
advanced levels of achievement consistent with sections 1111 and 1116 
of the Title I statute. The Secretary agrees that there is a need to 
clarify in guidance that identification of those students furthest away 
from meeting proficient and advanced levels of achievement and 
identification of students for program participation have different 
implications. Schoolwide programs must be able to accomplish the 
former. They do not have to perform the latter as a means to achieve 
it. The Department will clarify this issue further in nonregulatory 
guidance.
    Changes: None.
    Comment: One commenter expressed concern about the requirement that 
all paraprofessional instructional staff in the schoolwide program meet 
the requirements for paraprofessionals that apply to targeted 
assistance schools. The commenter expressed concern that many schools 
will elect to remain in or return to targeted assistance status.
    Discussion: Section 1119(c) of the ESEA requires that 
paraprofessionals hired after January 8, 2002 and working in a program 
supported with Title I, part A funds be highly qualified. Section 
200.58 of the regulations further clarifies that statutory requirement 
by providing that all paraprofessionals working in a schoolwide program 
are considered to be supported by Title I, Part A funds. The Secretary 
believes that individual schools will make the decision to operate a 
schoolwide program, and continue their operation based on the need to 
reform the school and improve student achievement.
    Changes: None.
    Comments: Two commenters objected to the provision in Sec.  
200.25(b)(1)(ii) that the 40 percent poverty eligibility threshold for 
operating a schoolwide program is required for only the initial year of 
the program. The commenters suggested that this provision be deleted, 
so that if a school's poverty level decreases in subsequent years it 
can no longer operate as a schoolwide project.
    Discussion: Section 1114(a)(1) of the ESEA establishes the 40 
percent eligibility threshold for a school to operate a schoolwide 
program. The intent of the statute is to enable the schoolwide program 
to improve the entire educational program of the school. Long-term 
reform occurs over time and requires sustained and consistent 
intervention if student achievement is to improve. The Secretary 
believes that making the 40 percent threshold an initial eligibility 
requirement, rather than an annual eligibility requirement, reinforces 
this long-range approach.
    Changes: None.
    Comments: Two commenters questioned, in Sec.  200.25(b)(2), the 
advisability of allowing schools to choose a measure of poverty to 
determine eligibility for schoolwide programs that is different from 
the measure used by LEAs for Title I allocation purposes. One 
recommended requiring identical measures of poverty across the LEA's 
Title I program, or at least requiring equivalent or comparable 
measures of poverty.
    Discussion: The provision to allow a school to use a poverty 
measure that is different from the one the LEA selects for Title I 
allocation purposes when determining eligibility for operating a 
schoolwide program is a continuation of flexibility provided under the 
old regulations. An LEA may use more restrictive free school lunch 
data, rather than free and reduced-price lunch data to determine which 
schools are eligible for Title I and to allocate funds. Based on free 
lunch data, however, a school might not meet the 40 percent schoolwide 
eligibility criteria data, while it might qualify if free and reduced-
price lunch data were used. The Secretary wants to continue providing 
as much flexibility as possible to enable schools to qualify for 
implementing a schoolwide program.
    Changes: None.


Section 200.26 Development and Evaluation of Schoolwide Program Plan


    Comment: One commenter remarked that the language of the proposed 
regulation concerning the development of the schoolwide plan is complex 
and confusing because of its organizational structure and recommended 
reorganizing Sec.  200.26 along the lines of the NCLB Act.
    Discussion: The language in Sec.  200.26 of the NPRM was intended 
to clarify that a schoolwide plan must describe how the school will 
improve academic achievement and make explicit the process used for 
developing the plan. However, the Secretary believes that the 
organization in the NPRM may be confusing and concurs that reorganizing 
the regulations to make them more consistent with the NCLB Act would 
make clearer the planning process required to operate a schoolwide 
program.
    Changes: The Secretary has reorganized the regulations by adding a 
new Sec.  200.26 (renamed ``Core elements of a schoolwide program'') 
and placed it under the undesignated center heading ``Schoolwide 
Programs'' in subpart A of part 200 to make the regulations consistent 
with the statute. All cross-references have been amended appropriately.
    Comment: One commenter recommended an addition to Sec.  
200.26(b)(1) to acknowledge that the needs of migratory children are 
constantly changing, requiring an ongoing needs assessment process.
    Discussion: The comprehensive needs assessment described in Sec.  
200.26 addresses the needs of the school, in general, and specifically 
requires that the needs of migratory children be taken into account 
when conducting the needs assessment. The Secretary has added language 
to this section that includes migratory children as part of the needs 
assessment and provides a specific reference to the definition 
contained in section 1309(2) of the ESEA.
    Changes: The Secretary has added a new Sec.  200.26 and placed it 
under the undesignated center heading ``Schoolwide Programs.'' The 
language in this new section provides for the use of academic 
achievement information for all students in the school including all 
demographic groups of students as part of the needs assessment. The 
inclusion of migratory students in the needs assessment, and as defined 
in section 1309(2) of the NCLB Act is referenced in this section.
    Comments: Several commenters referenced language in Sec.  
200.26(a)(2)(ii) requiring a focus on scientifically based research. 
One remarked that the meaning of this term is widely debated and that 
the application of science to improved instruction is often a complex 
process. One commenter asked for clarification about the meaning of 
regulatory language that requires a school's process for developing its 
schoolwide plan to focus on scientifically based research.


[[Page 71746]]


    Discussion: Scientifically based research is defined in section 
9101(B)(37) of the ESEA as ``research that involves the application of 
rigorous, systematic, and objective procedures to obtain reliable and 
valid knowledge relevant to education activities and programs.'' The 
strategies and methods used in schoolwide programs must be of high 
quality and have a reasonably high probability of increasing student 
achievement.
    Changes: None.
    Comments: Several commenters requested amplification of language 
regarding the schoolwide planning process to reinforce the notion that 
the process must be meaningful, to provide clarity regarding who should 
participate in the evaluation of the program's effectiveness, and to 
require that the comprehensive needs assessment include data on school 
funding and the school's capacity to meet needs. One commenter in this 
group also requested that the regulations be more explicit about the 
importance of the comprehensive needs assessment to the planning 
process.
    Discussion: The Secretary agrees that the schoolwide planning 
process must be meaningful, and reflect data obtained from the 
comprehensive needs assessment. The resulting plan must include 
strategies for improved student achievement, evaluation, monitoring for 
effectiveness, and for amendment of the plan, as needed.
    Changes: To make this policy clear and to address the comenters' 
concerns, the Secretary has reorganized Sec.  200.26 and renamed it 
``Core elements of a schoolwide program''. In the NPRM, these 
provisions were contained under Sec.  200.28--Use of funds in a 
schoolwide program. The new Sec.  200.26 outlines the basic elements of 
the schoolwide program planning process with regard to conducting a 
comprehensive needs assessment, developing a comprehensive plan, and 
evaluating the program.
    Comment: One commenter noted widespread confusion about the Title I 
provisions related to serving homeless children and recommended further 
elaboration in nonregulatory guidance on needs and issues affecting 
homeless students. The commenter also suggested that the school needs 
assessment take into account the needs of homeless as well as migrant 
students.
    Discussion: The Secretary agrees with the commenter's concerns and 
will address in nonregulatory guidance the issue of including the 
homeless population in all schoolwide reform efforts. The language 
included in revised Sec.  200.26(a)(1)(i) provides that the 
comprehensive needs assessment must be based on academic achievement 
information about all students in the school, which includes homeless 
and migrant students.
    Changes: None.
    Comments: One commenter expressed concern that the needs assessment 
was taken out of the listing of components, thereby eliminating the 
requirement for a school to describe the needs assessment in its 
schoolwide plan.
    Discussion: The needs assessment is critical to the development of 
the comprehensive schoolwide program plan. A review of the core 
elements of the schoolwide program includes the comprehensive needs 
assessment, the comprehensive plan, and the evaluation. The description 
of the comprehensive needs assessment may be included as a part of this 
section.
    Changes: In the revised Sec.  200.26, the Secretary has included 
three subparts that address the comprehensive needs assessment, the 
comprehensive plan, and the evaluation.
    Comments: Two commenters expressed concern about the importance of 
including strategies to increase parental involvement, and requested 
that the regulations make reference to the parental involvement 
requirements contained in section 1118 of the ESEA.
    Discussion: The Secretary concurs that including parents in all 
aspects of schoolwide program planning, development, and implementation 
is essential.
    Change: The Secretary has included provisions for parental 
involvement, consistent with the ESEA, in Sec. Sec.  200.27(b)(2); 
200.27(c)(1) and (2); and 200.28 (c)(3)(i).


Section 200.27 Schoolwide Program Implementation Components


    Comments: Several commenters expressed concern that this section of 
the proposed regulations omitted several key components that are 
critical to operating a schoolwide program: These components include 
the participation of teachers in the decisions regarding use of 
assessments, increasing the amount and quality of learning time, 
strategies to meet the needs of historically underserved populations, 
methods that help provide an accelerated and enriched curriculum, 
language that refers to proficient and advanced levels of academic 
achievement, inclusion of information about how the school will 
determine if academic needs have been met, and instruction by highly 
qualified teachers.
    Discussion: The proposed regulations organized the schoolwide 
requirements to emphasize key components necessary for the operation of 
a successful schoolwide program. The intent of the NPRM was to outline 
an approach that would lead schools to restructure in ways that would 
be most likely result in improved student achievement. However, the 
Secretary agrees that the proposed regulations may be confusing because 
those provisions did not parallel the language in the ESEA.
    Changes: The Secretary has amended and renamed Sec.  200.27--
Schoolwide program components--to make the regulations parallel the 
statute more closely and to address the specific concerns of the 
commenters.
    Comments: Two commenters expressed concerns about proposed language 
in Sec.  200.27(c) of the NPRM, which requires the inclusion of parents 
in the planning and academic intervention process, and requires that 
student achievement reports be provided to parents in a language that 
they can understand.
    Discussion: The Secretary strongly supports the right of parents to 
be involved in the schoolwide planning process and to have information 
regarding the education services provided to their children in a form 
and language they can understand.
    Changes: The Secretary has clarified the parental involvement 
provisions in Sec. Sec.  200.27(b)(2) and 200.27(c) to require that a 
school develop its schoolwide comprehensive plan with the involvement 
of parents, consistent with section 1118 of the ESEA and to make that 
plan available to parents in an understandable format and, to the 
extent practicable, in a language that parents can understand.
    Comment: One commenter believed that the reference in Sec.  
200.27(a) concerning the application of the new science requirement by 
2005-06 was inappropriate because improvement in meeting standards 
cannot be demonstrated without a proper assessment.
    Discussion: the Secretary agrees that the reference to science in 
Sec.  200.27(a) is confusing and that providing a general reference to 
improving the opportunities of students to meet the State's proficient 
and advanced levels of student achievement is more appropriate.
    Changes: The Secretary has made this clarifying change in Sec.  
200.28(a)(1).


Section 200.28 Use of Funds in a Schoolwide Program


    Comment: One commenter asked that Sec.  200.28 be further clarified 
to confirm that consolidation of funds does not constitute a waiver of 
the school's obligation to comply with the requirements of the NCLB 
Act, nor does


[[Page 71747]]


it diminish the school's obligation to fulfill other programs' 
purposes. All program purposes and needs must be met, not merely 
addressed.
    Discussion: The Secretary agrees with the commenter's concern and 
will provide further clarification in nonregulatory guidance.
    Changes: None.
    Comments: Several commenters recommended that Sec.  
200.28(c)(3)(i)(A) and (B) require that before consolidating Title I 
part C funds, a school first meet the unique educational needs of 
migratory students that result from their migratory lifestyle and 
document that these needs have been met. Several of these commenters 
further recommended that documentation could consist of maintaining a 
record of the actions taken by the school or LEA on behalf of migrant 
students.
    Discussion: The Secretary agrees with these concerns and will 
provide further clarification in nonregulatory guidance.
    Changes: None.
    Comment: Several commenters recommended an addition to Sec.  
200.28(c)(3)(i) of the NPRM to include consultation with parents of 
migrant children or organizations representing those parents, or both.
    Discussion: The Secretary concurs with commenters regarding the 
importance of involving parents of migratory children and the 
organizations that represent them.
    Changes: The Secretary has clarified in Sec.  200.28(c)(1)(i) that 
an LEA must consult with parents of migratory children or organizations 
representing those parents, or both.
    Comment: One commenter noted that currently the latest list of 
programs identified by the Department that may be combined in a 
schoolwide program was published in a September 21, 1995 Federal 
Register notice. This does not allow for combining of funds from new 
programs created by the NCLB Act. The commenter recommended that the 
regulations specify which Federal funds administered by the Secretary 
may be combined in a schoolwide program.
    Discussion: The Secretary understands the importance of LEAs and 
schools knowing which funds may be combined in a schoolwide program and 
will publish an updated list in the Federal Register soon after 
publication of the final regulations.
    Changes: None.
    Comment: One commenter noted that the provision in Sec.  
200.28(c)(3)(iii) allowing for consolidation of IDEA funds in a 
schoolwide program is not in the ESEA, and recommended that this 
provision should be deleted from the regulations.
    Discussion: The provisions in the regulations concerning 
consolidation of special education funds are consistent with the 
requirements of section 613(a)(2)(D) of the IDEA. The regulations 
provide that the amount of funds consolidated for special education 
purposes may not exceed the amount received by the LEA under part B of 
IDEA for that fiscal year, divided by the number of children with 
disabilities in the jurisdiction of the LEA, and multiplied by the 
number of children with disabilities participating in the schoolwide 
program.
    Changes: None.
    Comment: One commenter noted that Sec.  200.28(c)(4)(i)(A), of the 
proposed regulations, that provides that programs consolidated in a 
schoolwide program are exempt from statutory or regulatory provisions 
governing their operation, does not include an important qualification 
contained in section 1114 (a)(3)(A) of the ESEA. This statutory 
provision allows programs to be consolidated only ``if the intent and 
purpose of such other programs are met.'' This omission must be 
restored in order to conform to the ESEA.
    Discussion: The Secretary agrees with the commenter.
    Changes: The Secretary has added clarifying language in Sec.  
200.29(b)(1)(ii) requiring that a school consolidating and using in a 
schoolwide program funds from any other Federal program administered by 
the Department meet the intent and purposes of that program and ensure 
that the needs of the intended beneficiaries of that program are 
addressed.
    Comment: One commenter urged that the regulations be changed to 
ensure that a school operating a schoolwide program does not use Title 
II, part D, Education Technology Grant funds for purposes other than 
those authorized by the statute. The commenter suggested that language 
be added to Sec.  200.28(c)(4)(i)(C) to require that a schoolwide 
program as a whole, addresses the ``intent, purposes, activities and 
uses'' of funds, rather than just the ``intent and purposes'' of funds, 
for each Federal program whose funds were consolidated to support the 
schoolwide program.
    Discussion: The Secretary believes that the language now in Sec.  
200.29(d) requiring that the intent and purposes of the programs 
consolidated in a schoolwide program be met provides sufficient 
protection to ensure that the needs of the children specifically 
designed to be served by those programs are met. The proposed change 
would take away the flexibility a school would have in operating 
schoolwide programs. The purpose of a schoolwide program is to enable a 
school to combine its Federal, State and local resources so it can 
focus on providing comprehensive services that best enable its students 
to meet State's academic content and student achievement standards. In 
exchange for this flexibility, the school must ensure that its students 
make progress toward meeting those academic content and student 
achievement standards.
    Changes: None.
    Comment: One commenter recommended adding a new paragraph (d) to 
Sec.  200.28 mandating that States require LEAs to involve providers of 
federally funded adult education and career technical education 
programs to ensure the maximum support for the academic achievement of 
students in local schools.
    Discussion: While the Secretary agrees that providers of Federally 
funded adult education and career technical education programs can play 
an important role in providing services to students in local schools, 
involving these providers in not a specific statutory requirement and 
may not be appropriate in every schoolwide program.
    Changes: None.


LEA and School Improvement


Section 200.30 Local Review


    Comment: One commenter objected to giving LEAs the responsibility 
for conducting the annual progress review to determine whether 
participating schools are making AYP, on the grounds that a statewide 
system would better ensure equity and reliability in making AYP 
determinations.
    Discussion: The Secretary understands the concerns of the 
commenter, but believes that the combination of the statewide 
assessment system described in Sec.  200.2 and the AYP requirements 
described in Sec. Sec.  200.13 through 200.20, which LEAs must use in 
conducting their review of school performance, will ensure that such 
reviews are conducted in a fair and uniform manner across each State. 
While the statute clearly specifies that the local review and school 
improvement process is an LEA responsibility, it also ensures that, in 
carrying out this responsibility, LEAs will rely primarily on standards 
and indicators developed at the State level.
    Changes: None.
    Comment: One commenter expressed concern that the proposed 
regulations do not address the role of charter school LEAs or other 
single-school LEAs in the school review and improvement process.


[[Page 71748]]


    Discussion: Single-school LEAs have the same role and 
responsibilities in the school review and improvement process as other 
LEAs, including responsibility for review of school progress in meeting 
adequately yearly progress requirements, identifying the school for 
improvement, corrective action, or restructuring, providing public 
school choice options under Sec.  200.44, and making available 
supplemental educational services in accordance with Sec. Sec.  200.45 
and 200.46.
    Changes: None.
    Comment: One commenter expressed concern that the proposed 
regulations imply that LEAs are not required to use other academic 
indicators in determining whether a school has made AYP.
    Discussion: As clarified in Sec.  200.19(a), a State must use 
graduation rate for high schools and another academic indicator of its 
choosing for elementary schools and for middle schools to determine 
AYP. At the local level, an LEA may use additional academic assessments 
or indicators for the purpose of identifying additional schools for 
improvement, corrective action or restructuring. In addition, progress 
on these LEA academic indicators may permit a school to make AYP in 
accordance with the exception clause specified in Sec.  200.20(b).
    Changes: None.
    Comment: One commenter objected to the proposed regulation 
permitting an LEA to limit its review of a school operating a targeted 
assistance program to the academic achievement of only those children 
served by the program. The commenter noted that this regulation could 
create a disincentive for schools to operate schoolwide programs and 
could hinder the development of single, statewide accountability 
systems covering all students.
    Discussion: The Secretary agrees with the concerns expressed by the 
commenter, but notes that the regulations reflect the clear language of 
the statute. In addition, the Secretary believes that few schools will 
take advantage of this provision, because it would, by definition, 
limit review to the lowest-achieving students and thus might make it 
more difficult for a school to demonstrate AYP.
    Changes: None.
    Comment: One commenter recommended adding to the final regulations 
statutory language regarding the use of the results of the LEA's annual 
review of school performance.
    Discussion: The Secretary believes that in the overall context of 
AYP and school improvement requirements, the purposes of the annual 
progress review and the use of the results of that review are 
sufficiently explained in the regulations. Any further explanation may 
be accomplished through nonregulatory guidance.
    Changes: None.


Section 200.32 Identification for School Improvement


    Comment: Several commenters maintained that the identification 
timeline in the proposed regulations does not allow sufficient time for 
States to make available assessment data from a given school year, or 
for school districts to analyze that data and identify schools for 
improvement, corrective action, or restructuring, prior to the 
beginning of the next school year.
    Discussion: The identification timeline in the proposed regulations 
is faithful to the timeline specified in the ESEA. The Secretary 
recognizes that States may have to adjust their assessment schedules to 
comply with this timeline, but the centrality of the timeline to the 
integrity of the entire improvement process, as well as the plain 
language of the statute, permit no alternative.
    Changes: None.
    Comment: One commenter recommended that the timeline for 
identifying schools for improvement be based on the school year in 
which assessment results become available, rather than the school year 
in which the assessments are administered.
    Discussion: Section 1116(b)(1)(B) of the ESEA requires 
identification ``before the beginning of the school year following such 
failure to make.'' The Secretary believes that this phrase 
unambiguously links identification to the school year in which the 
failure occurred, and not to the availability of assessment results 
documenting that failure. In addition, section 1116(a)(2) of the ESEA, 
incorporated into the regulations as Sec.  200.49(e), reinforces this 
approach by requiring SEAs to make assessment results in a given school 
year available to LEAs before the beginning of the next school year. 
Any delay in this identification timeline would severely undermine the 
strong accountability, with consequences for schools and options for 
students, that is at the core of the NCLB Act.
    Changes: None.
    Comment: Two commenters expressed concern that the proposed 
regulations appear to hold LEAs responsible for identifying schools for 
improvement prior to the beginning of the school year even if SEAs fail 
to make assessment results available on a timely basis.
    Discussion: Section 200.49(e) of the final regulations specifically 
requires SEAs to ensure that the results of academic assessments 
administered as part of the State assessment system for a given year 
are available to LEAs before the beginning of the next school year. In 
addition, Sec.  200.49(e)(1) clarifies that the SEA must provide the 
required assessment data in sufficient time to permit the LEA to make 
the identification in accordance with Sec.  200.32(a)(2). Finally, 
Sec.  200.49(e)(2) prohibits an LEA from identifying a school for 
improvement, corrective action, or restructuring unless the SEA has 
provided assessment results to the school.
    Changes: The final regulations include additional language in Sec.  
200.49(e)(1) requiring SEAs to make available assessment data for a 
given school year to LEAs ``in such time as to allow for the 
identification'' for improvement prior to the beginning of the next 
school year.
    Comment: Several commenters objected to the flexibility provided in 
proposed Sec.  200.32(d) and (e) regarding the identification of 
schools for improvement or removal of schools from improvement status 
on the basis of 2001-2002 assessment results. The commenters interpret 
the statute as requiring the identification for improvement of any 
school that fails to make AYP for two consecutive years, as well as the 
removal from improvement status of any school that makes AYP for two 
consecutive years, regardless of the years involved.
    Discussion: The Secretary believes that the absence of any 
reference to 2001-2002 assessment results in the otherwise very 
specific transition provisions of the statute, combined with the strong 
likelihood that many States would not be able to make these results 
available to LEAs prior to the beginning of the 2002-2003 school year, 
supports a flexible approach to the use of those results for 
identification purposes during the transition to the NCLB Act.
    Changes: None.
    Comment: Two commenters expressed concern that the proposed 
regulations, which give LEAs flexibility in the use of 2001-2002 
assessment data in making identification decisions not specifically 
covered under the transition provisions of the statute, could create 
confusion regarding the use of 2001-2002 assessment data in subsequent 
years.
    Discussion: The Secretary agrees that the flexibility provided in 
the proposed regulations could be interpreted as permitting LEAs to 
ignore 2001-2002 assessment data in making


[[Page 71749]]


identification decisions in subsequent years. The regulations clarify 
that an LEA decision not to identify for improvement a school that, on 
the basis of 2001-2002 assessment data, does not make AYP for a second 
consecutive year, does not permit the LEA to ignore that failure in 
making future identification decisions.
    Changes: Section 200.32(e) has been amended to clarify that if an 
LEA chooses not to identify for improvement a school that, on the basis 
of 2001-2002 assessment results, does not make AYP for a second 
consecutive year, it nevertheless must consider the school's 2001-2002 
performance as the first year of not making AYP for the purpose of 
subsequent identification decisions.
    Comment: One commenter asserted that the proposed regulations 
unfairly penalize schools that were hoping to exit improvement status 
by making AYP in two out of three years, as provided for under the 
previous statute. For example, under the old law, a school that made 
AYP in the 1999-2000 school year, failed to make AYP in 2000-2001, and 
made AYP in 2001-2002 would be removed from improvement status. Under 
the new law, however, such a school would continue to be identified for 
improvement until it makes AYP for two consecutive years.
    Discussion: The reauthorized ESEA specifies the identification 
status of schools identified for improvement under the previous law, 
but makes no exceptions to the new requirement that schools may be 
removed from improvement only after making AYP for two consecutive 
years. The Secretary has provided limited flexibility to LEAs to 
identify for improvement or remove from improvement schools in certain 
situations not covered by the statutory transition provisions. In both 
instances, however, this flexibility is consistent with the ``two 
consecutive year'' standard of the statute. The Secretary's authority 
to provide flexibility in implementing the new law does not extend to 
overriding this standard.
    Changes: None.
    Comment: Several commenters objected to the proposed requirement 
that LEAs make choice immediately available to students attending 
schools that are identified for improvement after the beginning of the 
school year following the year in which the LEA administered the 
assessments that resulted in the identification for improvement. The 
commenters believe that this requirement will be unnecessary if 
identification takes place in accordance with the statutory timeline 
(prior to the beginning of the school year), and that if identification 
occurs following the beginning of the school year, the statute requires 
LEAs to provide choice no sooner than the first day of the school year 
following identification.
    Discussion: The commenters are correct in their observation that 
the mid-year choice requirement of proposed Sec.  200.32(f)(1) is 
unnecessary if identification occurs in accordance with the statutory 
timeline. The Secretary's intention, however, was to encourage 
adherence to that statutory timeline by removing a potential incentive 
for delaying identification until after the beginning of the school 
year. In other words, an LEA may not postpone its obligation to provide 
public school options to students attending schools identified for 
improvement simply by delaying identification.
    Changes: None.
    Comment: Several commenters objected to the proposed regulations 
requiring an LEA to count as a full year of improvement any year in 
which the LEA identifies a school for improvement after the beginning 
of the school year. The commenters maintained that mid-year 
identification would not provide adequate time for districts and 
schools to develop and implement effective improvement plans. They also 
noted that the statutory timeline is linked to identification and 
generally requires a ``full school year'' at each stage of the 
improvement process. One commenter suggested that while a school 
identified in mid-year should start the improvement process, it should 
not officially enter improvement status until the beginning of the next 
school year.
    Discussion: The Secretary understands the concerns of the 
commenters, particularly with regard to giving schools adequate time to 
prepare and carry out effective improvement plans. However, the clear 
intention of the NCLB Act is to impose rigorous accountability measures 
on a precise timeline designed both to bring about rapid improvement in 
school quality and to provide immediate options to students attending 
identified schools. Giving primacy to the ``full school year'' language 
of the statute potentially rewards LEAs that violate the statutory 
identification timeline, delays the availability of public school 
choice and supplemental educational services to students, and 
unacceptably extends an already lengthy improvement timeline (which 
permits six years of not making before implementation of 
restructuring). The regulations underscore, in Sec.  200.49(e), the 
importance of SEAs ensuring that LEAs and schools receive their 
assessment data in a timely manner so that they can meet the statutory 
school improvement deadlines.
    Changes: None.


Section 200.33 Identification for Corrective Action


    Comment: Two commenters objected to the flexibility provided to 
LEAs in proposed Sec.  200.33(c) to remove from corrective action a 
school that, on the basis of assessments administered during the 2001-
2002 school year, makes AYP for a second consecutive year. They 
maintained that the statute requires LEAs to remove schools from 
corrective action in such cases, and one commenter argued that LEAs 
also should use 2001-2002 assessment data to identify additional 
schools for corrective action.
    Discussion: The Secretary believes that the proposed regulations 
are an appropriate way to address an inequity in the statutory 
transition provisions covering identification for corrective action. 
These provisions require LEAs to treat schools that were identified for 
corrective action prior to enactment of the NCLB Act as subject to 
corrective action for the 2002-2003 school year. Some of these schools, 
however, may have made AYP in both 2000-2001 and 2001-2002, thus 
meeting the statutory requirement for removal from corrective action. 
The proposed regulations permit LEAs to remove these schools from 
corrective action, but does not require such removal because some LEAs 
may, in part due to the uncertain timing of assessment results, prefer 
simply to adhere to the statutory transition provisions.
    On the issue of identifying additional schools for corrective 
action, Sec.  200.32(c)(1) already specifies the identification status 
of schools that have been identified for improvement for two or more 
consecutive years. LEAs must treat such schools as being in the second 
year of improvement under the new law for the 2002-2003 school year. 
Failure to make AYP in 2001-2002 would not change this designation. The 
proposed regulations thus reflect the clear intent of the NCLB Act to 
identify for corrective action, for the 2002-2003 school year, only 
those schools identified for corrective action under the previous law.
    Changes: None.


Section 200.36 Communication with Parents


    Comment: One commenter expressed concern about the rights of 
parents with limited English proficiency, in light of Title VI of the 
Civil Rights Act and Executive Order 13166, to receive communications 
about their child in a


[[Page 71750]]


language that they understand. In addition, two commenters urged the 
Secretary to require the use of native language to communicate with 
parents in areas where large numbers of students share the same primary 
language.
    Discussion: Section 1116 of the ESEA requires SEAs and LEAs to keep 
parents informed during the school improvement process and, to the 
extent practicable, to provide information to parents with limited 
English proficiency in a language the parent understands. In addition, 
Title VI of the Civil Rights Act of 1964 and longstanding Department 
policy require SEAs and LEAs to communicate information to limited-
English proficient parents that is communicated to non-limited English 
proficient parents. Under Title VI, SEAs and LEAs have flexibility in 
determining what mix of oral and written translation services may be 
necessary and reasonable for communicating this information. This 
policy is also consistent with Executive Order 13166.
    It is the Department's position that, pursuant to the requirements 
of section 1116 of the ESEA, it is ``practicable'' to provide 
information to limited-English proficient parents orally in a language 
that they understand. This interpretation of Section 1116 of the ESEA 
also is consistent with Title VI, longstanding Department policy under 
Title VI, and Executive Order 13166.
    Additionally, section 1116 of the ESEA requires written 
translations of printed information to be provided to parents with 
limited English proficiency in a language they understand, whenever 
such written translations are ``practicable.'' If it is not 
``practicable'' to provide written translations of notices, section 
1116 requires SEAs and LEAs to ensure that parents with limited English 
proficiency are provided oral translations of the written information. 
This requirement to translate orally written information whenever a 
written translation is not practicable is consistent with Title VI, 
longstanding Department policy under Title VI, and Executive Order 
13166.
    Changes: None.
    Comment: One commenter suggested additional regulatory language to 
ensure effective communication with the parents of limited English 
proficient and migrant students. In particular, the commenter 
recommended the use of non-traditional communication vehicles, such as 
posting notices at churches and distributing information through social 
service providers.
    Discussion: The Secretary agrees that effective communication with 
the parents of limited-English proficient and migrant students is 
important, but he believes that widely varying local circumstances 
argue in favor of addressing the concerns raised by the commenter in 
nonregulatory guidance rather than through ``one-size-fits-all'' 
regulatory prescription.
    Changes: None.
    Comment: One commenter expressed concern that it would not be 
possible for a State to communicate directly with parents, as required 
by the proposed regulations, if the State does not maintain 
information, such as street or e-mail addresses, on individual 
students. The commenter recommended requiring States to communicate to 
parents only through such broader means as the Internet and other 
media. Another commenter addressed a similar concern by recommending 
that States be permitted to fulfill their obligation by providing 
school improvement information to LEAs and schools, which would then 
distribute the information to parents, rather than requiring States to 
communicate directly with parents.
    Discussion: The Secretary agrees that the proposed regulations 
should be amended to reflect the limited student information available 
to States in some cases. However, the final regulations continue to 
require States to communicate to individual students and their 
families, even if they must do so indirectly through LEAs and schools.
    Changes: Section 200.36(b)(1) has been amended to permit States to 
distribute information to parents through LEAs and schools.
    Comment: One commenter recommended that any information provided to 
parents also be provided to teachers and other school staff so that 
educators know and understand what is happening in their schools.
    Discussion: Section 200.36 is intended to clarify statutory 
requirements regarding communication with parents during the school 
improvement process. Notice requirements affecting teachers and school 
staff are addressed elsewhere, such as in Sec. Sec.  200.30 and 200.43.
    Changes: None.
    Comment: One commenter requested clarification of proposed Sec.  
200.36(c), which requires all communications to respect the privacy of 
students and their families.
    Discussion: The proposed regulations are intended to help prevent, 
for example, the public disclosure of the names of students receiving 
supplemental educational services, as prohibited by Sec.  200.46(a)(5) 
and (b)(2)(v). Further clarification will be provided in nonregulatory 
guidance.
    Changes: None.


Section 200.37 Notice of Identification for Improvement, Corrective 
Action, or Restructuring


    Comment: Two commenters recommended adding a definition of 
``promptly'' in proposed Sec.  200.37(a), which requires LEAs to 
``promptly notify'' parents when their child's school has been 
identified for improvement. The commenters expressed particular concern 
that parents have sufficient time to consider public school choice 
options.
    Discussion: The Secretary agrees that timely notification is 
essential to ensuring that parents are able to make informed choices 
regarding their children's education. Such notifications should be made 
as soon as possible. However, the precise amount of time required may 
vary depending on local circumstances. The Department has issued 
nonregulatory guidance on this issue.
    Changes: None.
    Comment: One commenter recommended including, in the notice to 
parents that their child's school has been identified for improvement, 
a description of the actions being taken to improve the school.
    Discussion: The Secretary agrees that information on the action 
being taken to improve a school is important, and notes that Sec.  
200.38(a) requires an LEA to provide such information to parents. 
However, because parental consideration of choice and supplemental 
educational service options generally must occur at the same time a 
school is developing its school improvement plan, it will usually be 
impossible to include such information in the initial notice of 
identification.
    Changes: None.
    Comment: One commenter recommended that the explanation of the 
option to transfer described in Sec.  200.37(b)(4)(i) include a 
reference to the provision of transportation to the new school.
    Discussion: The proposed regulations referenced proposed Sec.  
200.44, which included choice-related transportation requirements, but 
the Secretary agrees that the restoration of the statutory reference to 
transportation in the notice requirement will clarify this issue.
    Changes: Section 200.37(b)(4)(i) has been amended to include a 
discussion of transportation in the explanation of the option to 
transfer provided to parents as part of the notice of identification 
for improvement, corrective action, or restructuring.


[[Page 71751]]


    Comment: Two commenters objected to the proposed requirement in 
Sec.  200.37(b)(4)(ii) that LEAs provide information to parents on the 
performance of the school or schools to which their children may 
transfer. Both commenters found this requirement administratively 
burdensome, particularly in districts that offer a large number of 
choices and thus would have to document the performance of many 
schools. One commenter suggested that LEAs be permitted to ``direct'' 
parents to publicly available sources of such information, such as a 
school or district Web site.
    Discussion: Since a basic principle of the public school choice 
option required as part of the school improvement process is to give 
parents in low-performing schools the opportunity to send their 
children to a higher-performing school, the Secretary believes the 
provision of the information called for in proposed Sec.  
200.37(b)(4)(ii) is essential. However, the regulations provide 
substantial flexibility to LEAs in selecting the most meaningful local 
measures of academic achievement, rather than mandating either the kind 
or number of such measures. LEAs are free, and indeed encouraged, to 
summarize school performance in a manageable and understandable format, 
rather than overwhelm parents with detailed reports. In addition, the 
final regulations clarify that, for the purposes of Sec.  200.44, the 
only required indicator of performance is the academic achievement of 
students in the receiving schools. Finally, while it may be appropriate 
to direct parents to sources such as Web sites for additional 
information, basic performance information should be provided directly 
to parents, many of whom lack access to electronic information sources 
such as the Internet.
    Changes: Section 200.37(b)(4)(ii) has been amended so that the only 
performance information required in the explanation of the public 
school choice option is the academic achievement of the schools to 
which a student may transfer.
    Comment: One commenter suggested that the Secretary require, rather 
than encourage, LEAs to provide the additional information on public 
school choice options described in Sec.  200.37(b)(4)(iii).
    Discussion: The ESEA requires only that LEAs offer parents and 
students the option to transfer to another public school that is not 
identified for improvement, corrective action, or restructuring. This 
emphasis on academic performance is reflected in the information 
required by Sec.  200.37(b)(4)(ii). The Secretary agrees that 
additional information on the options available to parents is 
desirable, but believes that LEAs should have flexibility to provide 
the most useful information in light of local needs and circumstances.
    Changes: None.
    Comment: One commenter recommended that the information on the 
school or schools to which a student may transfer include a description 
of parental involvement programs.
    Discussion: The Secretary agrees that, in addition to the academic 
quality of the school, the opportunity for greater involvement in their 
child's education could be an important consideration for parents 
exploring public school choice options. However, we do not agree that 
such information should be required.
    Changes: In order to clarify that information on parent 
opportunities may be provided in the explanation of the parents' option 
to transfer their child to another school, Sec.  200.37(b)(4)(iii)(D) 
has been amended to specifically authorize provision of a description 
of parental involvement opportunities at the school or schools to which 
the student may transfer.
    Comment: Two commenters objected to the proposed requirement that 
the annual notice of the availability of supplemental educational 
services include approved providers of technology-based or distance-
learning services. One commenter maintained that the proposed 
regulations are unnecessary and implied a preference for technology-
based providers over other providers, while another asserted that any 
clarification of means of providing services is more properly the role 
of SEAs, since they are responsible for approving providers.
    Discussion: The success of the supplemental educational services 
component of the school improvement process depends on the availability 
of a sufficient number of providers to meet the diverse educational 
needs of students. Provider availability is a particular concern in 
poor urban and rural areas where it is reasonable to expect there will 
be the greatest demand for supplemental educational services. 
Technology provides a means to overcome geographic and demographic 
barriers to the provision of high-quality services. For this reason, 
the Secretary believes it is appropriate to emphasize the potential 
role of technology-based providers. Finally, the ESEA clearly assigns 
responsibility for providing annual notice to parents of the 
availability of supplemental educational services to the LEA, not the 
SEA.
    Changes: None.
    Comment: One commenter recommended including in the information 
about supplemental educational service providers the religious 
affiliation of such providers, the duration of services, whether 
services are school-based, and whether transportation to the provider 
is available.
    Discussion: The Secretary believes that Sec.  200.37(b)(5)(ii)(B) 
is sufficient to ensure the provision of such information in the annual 
notice of the availability of supplemental educational services, and 
will clarify this requirement in nonregulatory guidance.
    Changes: None.
    Comment: One commenter recommended requiring LEAs to include, in 
the explanation of public school choice and supplemental educational 
service options, a detailed discussion of procedures required to 
exercise such options, including any required forms, documentation, and 
schedules or deadlines.
    Discussion: Procedures for exercising a public school choice or 
supplemental educational service option may vary widely from district 
to district depending on such factors as pre-existing choice programs, 
the timing of identification, and the use of technology. For this 
reason, the Secretary believes that the best way to address the 
commenter's concerns is through general guidelines in nonregulatory 
guidance.
    Changes: None.


Section 200.38 Information About Action Taken


    Comment: One commenter suggested that the final regulations require 
an LEA to include, in its explanation of corrective action or 
restructuring, a description of actions recommended by school-level 
staff or a school-level governance committee.
    Discussion: The ESEA requires only that LEAs publish and 
disseminate information about measures actually taken to address the 
problems that led to the identification of a school for improvement, 
corrective action, or restructuring. Districts are free to provide 
additional information on the process that led to the adoption of such 
measures if they believe such information will support school 
improvement efforts.
    Changes: None.


Section 200.39 Responsibilities Resulting From Identification for 
School Improvement


    Comment: One commenter expressed concern that proposed Sec.  
200.39(a)(1)(i)


[[Page 71752]]


potentially misleads students and their families by suggesting that all 
students in schools identified for improvement will have the option to 
transfer to a better-performing school, when in fact the ESEA requires 
LEAs to give priority to the lowest-achieving students from low-income 
families in providing public school choice options.
    Discussion: The regulation, like the statute, does indeed require 
that LEAs provide a public school choice option to all eligible 
students, defined as all students--regardless of achievement or family 
income--enrolled in a school identified for improvement, corrective 
action, or restructuring. The statutory priority on the lowest-
achieving students from low-income families is a priority in providing 
transportation, as well as in making assignments to the family's 
preferred choice among available schools. It is not an invitation to 
LEAs to limit choice to only those students.
    Changes: None.


Section 200.40 Technical Assistance


    Comment: One commenter recommended that all technical assistance 
providers comply with the requirements of Title II of the Higher 
Education Act of 1965 (HEA), which requires institutions of higher 
education that conduct teacher preparation programs and receive Federal 
financial assistance under the HEA to issue reports on the ``pass 
rates'' of their teacher education graduates on State certification and 
licensure assessments, as well as on other aspects of their teacher 
education programs.
    Discussion: The requirements in Title II of the Higher Education 
Act do not apply to other private organizations or to technical 
assistance providers.
    Changes: None.
    Comment: One commenter recommended that an LEA be required to 
``publicly identify'' any entities providing technical assistance when 
it identifies a school for improvement.
    Discussion: The ESEA requires only that an LEA ``ensure the 
provision of technical assistance as the school develops and 
implements'' its improvement plan. In addition, the improvement plan 
must include a description of the technical assistance to be provided 
by the LEA. This suggests that information on the precise nature of the 
technical assistance required, as well as the identity of the 
providers, is unlikely to be available at the time of identification.
    Changes: None.
    Comment: One commenter observed that the proposed regulations are 
inconsistent with the statutory requirements governing technical 
assistance to schools identified for improvement, particularly with 
regard to the goals of such technical assistance.
    Discussion: The Secretary agrees that the proposed regulations 
inadvertently omitted the statutory reference to technical assistance 
in identifying and addressing any failure of the LEA or school in 
implementing the school plan.
    Changes: Section 200.40(c)(1) has been amended to restore the 
omitted reference to technical assistance regarding LEA and school 
fulfillment of responsibilities under the school plan.


Section 200.41 School Improvement Plan


    Comment: One commenter requested that the parental consultation 
requirement in Sec.  200.41(a)(2) include a reference to a similar 
requirement in section 1118 of the ESEA.
    Discussion: The Secretary believes that both the ESEA and the 
proposed regulations are unambiguous in requiring schools to consult 
with parents in developing or revising their school improvement plans, 
and that further clarification is unnecessary.
    Changes: None.
    Comment: One commenter suggested that the required consultation 
with parents, school staff, the LEA, and outside experts should take 
the form of written comments that are included in the school 
improvement plan.
    Discussion: The ESEA does not require schools to seek comments in 
written form as part of the consultation process, but also does not 
preclude such an approach. The final regulations maintain this 
flexibility, which helps to ensure that school improvement planning is 
focused on results, not process.
    Changes: None.
    Comment: One commenter objected to the proposed regulation 
requiring school improvement plans to include ``measurable goals'' 
rather than the ``annual, measurable objectives'' terminology employed 
by the ESEA.
    Discussion: The Secretary believes that the term ``annual, 
measurable objectives'' used in section 1116(b)(3)(A)(v) of the ESEA is 
ambiguous and, in particular, risks unintentional confusion with the 
annual measurable objectives required by Sec.  200.18 as part of the 
definition of AYP. The substitution of the term ``measurable goals'' is 
intended to clarify that schools must set their own separate, interim 
performance goals that will contribute to the attainment of the annual 
measurable objectives required to make AYP and gain removal from 
improvement status.
    Changes: None.
    Comment: Two commenters requested that schools identified for 
improvement be permitted to use both Part A and non-Part A funds to 
satisfy the requirement in Sec.  200.41(c)(5) that such schools spend 
not less than 10 percent of their part A allocation on professional 
development designed to help remove the school from improvement status.
    Discussion: The proposed regulations accurately reflect the 
specific language of the ESEA, and the Secretary has no authority to 
modify this requirement.
    Changes: None.
    Comment: One commenter requested the addition of a reference to 
section 1119 of the ESEA in proposed Sec.  200.41(c)(5), which outlines 
the requirements for school improvement-related professional 
development.
    Discussion: The Secretary modified the statutory reference to 
section 1119 of the ESEA because this provision specifically covers 
professional development intended to ensure that all teachers are 
highly qualified, and not professional development designed to help 
remove a school from school improvement status.
    Changes: None.
    Comment: One commenter objected to the omission of the statutory 
requirement for an explanation of how funds reserved for professional 
development will be used to remove a school from improvement status, 
which in the proposed regulations was reflected only in a requirement 
for an assurance that such funds would ``contribute to removing the 
school from school improvement status.''
    Discussion: The Secretary agrees that the proposed regulations 
could have inadvertently weakened the requirement for a firm commitment 
on the use of professional development funds in school improvement 
plans.
    Changes: Section 200.41(c)(6) of the final regulations requires a 
school to specify how it will use its 10 percent reservation of Part A 
funds to gain removal from improvement status.
    Comment: One commenter objected to the requirement that school 
improvement plans incorporate teacher mentoring programs.
    Discussion: The Secretary has no authority to remove this 
requirement, which is specifically provided for in the ESEA. However, 
the final regulations clarify that the intention is to include teacher 
mentoring programs as a necessary element of the professional 
development provided as part of the school improvement plan.
    Changes: The requirement for teacher mentoring programs has been 
moved to


[[Page 71753]]


Sec.  200.41(c)(5)(iii) of the final regulations.
    Comment: One commenter objected to the omission of the notice 
requirement from the proposed regulation on school improvement plans.
    Discussion: The notice requirement was omitted from proposed Sec.  
200.41 both because it concerned the initial identification for 
improvement, which in most cases will precede the development of the 
school improvement plan, and because it was included in proposed Sec.  
200.37, which covers all of the various statutory notice requirements 
related to the school improvement process. The Secretary agrees with 
the commenter, however, that it is important for the school improvement 
plan to describe how the school will notify parents of the 
identification for improvement.
    Changes: Section 200.41(c)(7) requires the school improvement plan 
to include a description of how notice of identification for 
improvement will be provided to parents.


Section 200.42 Corrective Action


    Comment: One commenter expressed concern that some of the 
corrective actions described in the proposed regulations may conflict 
with State charter school laws.
    Discussion: Section 200.42(a) includes a range of corrective action 
options and requires any action taken to be ``consistent with State 
law.'' Where certain corrective actions specified in the ESEA and 
regulations conflict with State charter school laws, LEAs are not 
required to adopt those actions.
    Changes: None.
    Comment: One commenter requested clarification of the role of 
school support teams in providing technical assistance during 
corrective action.
    Discussion: As described in Sec.  200.42(b)(2), the LEA must 
continue to make available technical assistance, whether provided 
through school support teams or through some other mechanism, that 
meets the requirements of Sec.  200.40.
    Changes: None.
    Comment: One commenter requested explanation of the proposed 
regulations regarding the appointment of an outside expert as a 
corrective action.
    Discussion: The ESEA includes, as one of the corrective actions 
that may be taken by an LEA, the appointment of an outside expert ``to 
advise the school on its progress toward making AYP, based on its 
school plan under paragraph (3).'' The school plan cited in the 
statute, however, is the school improvement plan developed after 
initial identification for improvement and covering the two years of 
improvement efforts prior to the identification for corrective action. 
Since it presumably was at least in part the failure of this plan to 
improve the performance of the school that led to identification for 
corrective action, the Secretary believed that rather than providing 
advice based on this plan, it would be more appropriate for the outside 
expert to assist in revising the plan and in implementing the revised 
plan. Accordingly, Sec.  200.42(b)(4)(iv) requires this approach when 
an LEA appoints an outside expert as a corrective action.
    Changes: None.


Section 200.43 Restructuring


    Comment: Three commenters requested clarification of the status of 
a school that has implemented a restructuring plan. One recommended 
that it be treated as a new school, and one asked whether such a school 
would be required to offer choice and supplemental educational services 
to its students.
    Discussion: The ESEA does not address the status of a school that 
has implemented a restructuring plan. However, section 1116(b)(12) of 
the statute requires an LEA to remove a school from improvement, 
corrective action, or restructuring status only after the school has 
made AYP for two consecutive school years. The Secretary believes that 
the best interpretation of this language as it applies to a 
restructured school is that such a school remains ``in improvement'' 
until it makes AYP for two consecutive school years. For this reason, 
the LEA serving a restructured school must continue to provide public 
school choice options and make available supplemental educational 
services to eligible students enrolled in the school until the school 
makes AYP for two consecutive school years.
    Changes: Section 200.43(c)(2) of the final regulations requires an 
LEA to provide public school choice options and make available 
supplemental educational services to students enrolled in a 
restructured school until the school makes AYP for two consecutive 
school years.
    Comment: One commenter recommended that any entity selected to 
operate a school as part of a restructuring plan be required to 
demonstrate financial stability.
    Discussion: The ESEA and proposed regulations require only that 
such an entity have a ``demonstrated record of effectiveness.'' States 
and LEAs, which presumably will enter into a contract with the entity, 
may identify other requirements or standards that the entity must meet. 
The ESEA requires that restructuring options be implemented 
``consistent with state law.''
    Changes: None.


Section 200.44 Public School Choice


    Comment: One commenter requested clarification regarding LEA 
flexibility in providing public school choice options to students 
enrolled in schools identified for improvement, including whether an 
LEA may, in view of capacity constraints, offer choice to students only 
at some and not all of the schools it has identified for improvement.
    Discussion: Both the ESEA and the proposed regulations clearly 
require, except where State law prohibits, LEAs to offer all students 
enrolled in all schools identified for improvement the option of 
transferring to another public school that has not been identified for 
improvement.
    Changes: None.
    Comment: Several commenters maintained that existing overcrowding 
of schools, teacher shortages, transportation difficulties, class-size 
limits, health and safety concerns, and other capacity issues prevent 
many LEAs from implementing the public school choice option in 
accordance with the requirements of Sec.  200.44. One commenter, for 
example, recommended that the final regulations permit LEAs to preclude 
transfers to schools that have reached their ``maximum instructional 
capacity under State or local laws or ordinances.'' Another asked 
whether a State law limiting class size would permit an LEA to limit 
choice on the basis of the ``State law prohibition'' in Sec.  
200.44(a)(5).
    Discussion: In general, as the Secretary has made clear in Dear 
Colleague letters, nonregulatory guidance, proposed regulations, and 
other policy statements, the ESEA does not permit an LEA to preclude 
choice options on the basis of capacity constraints. Rather, the 
statute requires an LEA to take measures to overcome issues such as 
overcrowding, class size limits, and health and safety concerns, that 
otherwise might prevent the LEA from complying with Title I public 
school choice requirements. This could mean, for example, adding 
classes and hiring additional teachers so that the LEA can offer 
choices to students while adhering to State-mandated class size limits.
    In addition, LEAs have broad latitude in determining the schools to 
which students can transfer. They may, for example, consider health and 
safety factors in providing transfer options to


[[Page 71754]]


students and their parents. Such factors do not permit an LEA, however, 
to simply avoid its obligation to provide public school choice options 
as required by section 1116 of the ESEA. The expectation is that LEAs 
will need to find ways to provide choice, consistent with their 
obligations to provide a healthy and safe learning environment.
    Changes: Section 200.44(d) of the final regulations clarifies that 
an LEA may not use lack of capacity to deny an eligible student the 
opportunity to transfer to another school not identified for 
improvement.
    Comment: Two commenters requested that the final regulations 
include language permitting LEAs to limit the availability of choice 
options to comply with ``health and safety code requirements regarding 
facility capacity.''
    Discussion: In implementing the public school choice requirements, 
an LEA must provide parents of students eligible to transfer a choice 
of more than one school if more than one school is available. The LEA 
is not required, however, to make available every school in the 
district. Rather, the LEA may take into consideration factors such as 
health and safety requirements or transportation costs in determining 
which schools in the district would be available to accept transfer 
students. Such factors may not be used, however, to deny students the 
opportunity to transfer to any other school.
    Changes: Section 200.44(d) of the final regulations makes clear 
that an LEA may not use lack of capacity to deny an eligible student 
the opportunity to transfer to another school not identified for 
improvement.
    Comment: One commenter recommended that the final regulations 
permit LEAs to offer supplemental educational services to those 
students whose transfer requests cannot be accommodated due to capacity 
constraints.
    Discussion: Section 200.44(g)(2) of the final regulations permits 
an LEA with no eligible schools to which a student may transfer to 
offer supplemental educational services to eligible students enrolled 
in schools identified for their first year of improvement. However, 
since neither the ESEA nor Sec.  200.44(d) of the final regulations 
permits an LEA to deny public school choice options to eligible 
students due to capacity constraints, there is no reason to offer 
supplemental educational services in lieu of choice under the 
circumstances suggested by the commenter.
    Changes: None.
    Comment: One commenter noted that some States and school districts 
currently operate public school choice plans and asked whether the new 
law requires additional choices beyond those already provided.
    Discussion: If an existing choice plan meets the requirements of 
Sec.  200.44, then the LEA is already in compliance with the ESEA. In 
most cases, however, the Secretary believes that it will be necessary 
to modify existing choice plans to meet these requirements, which 
include, for example, the provision of transportation, a choice of more 
than one school, and a priority for the lowest-achieving students from 
low-income families.
    Changes: None.
    Comment: One commenter expressed concern that proposed Sec.  
200.44(a)(2), which would require LEAs to offer choice ``not later than 
the first day of the school year following the year in which the LEA 
administered the assessments that resulted in the identification of the 
school for improvement, corrective action, or restructuring,'' could 
require mid-year implementation of choice that would lead to major 
disruptions in both sending and receiving schools.
    Discussion: Proposed Sec.  200.44(a)(2) is based on the clear 
language of section 1116(b)(1)(E)(i) of the ESEA, which assumes SEA and 
LEA compliance with the equally clear statutory identification 
timeline. SEAs and LEAs that adhere to this timeline will not face the 
additional challenge of implementing the public school choice 
requirements of Sec.  200.44 in the middle of a school year. The 
Secretary does not believe it is appropriate, however, to reward LEAs 
that do not comply with the law by permitting them to postpone their 
obligations under Sec.  200.44 until the following school year and 
thereby deny students attending identified schools the opportunity to 
transfer immediately to a better school.
    Changes: None.
    Comment: One commenter noted that States and school districts may 
have their own ``improvement'' designations based on different criteria 
than those provided under section 1116 of the ESEA. For this reason, 
the commenter requested clarification that the standard proposed under 
Sec.  200.44(a)(3)(i)(A) limits transfers to schools that have not been 
identified for improvement, corrective action, or restructuring under 
Title I.
    Discussion: The Secretary agrees that the proposed regulations did 
not clearly reflect the statutory requirement under section 
1116(b)(1)(E)(i) of the ESEA that an LEA provide a public school choice 
option ``that has not been identified for school improvement under this 
paragraph.'' The phrase ``under this paragraph'' expressly limits the 
exclusion from eligible choice options of schools identified under 
section 1116(b)(1) of the ESEA, and does not rule out schools that may 
have been identified for improvement under other State or local 
criteria as possible schools to which students may transfer.
    Changes: The final regulations specify that transfers are limited 
to schools that have not been identified under Sec. Sec.  200.32 
through 200.34.
    Comment: Two commenters requested clarification that proposed Sec.  
200.44(a)(3)(ii) refers only to public charter schools that are served 
by the LEA.
    Discussion: The Secretary believes that both the ESEA and the 
regulations are clear in requiring choice only within LEAs. The precise 
relationship between public charter schools and LEAs, however, varies 
widely and is better addressed through nonregulatory guidance.
    Changes: No change.
    Comment: Several commenters objected to proposed Sec.  
200.44(a)(4)(i), which requires LEAs to offer parents of eligible 
students the choice of more than one school that is not identified for 
improvement, corrective action, or restructuring. The commenters argued 
that this requirement is inconsistent with both the NCLB Act and the 
Secretary's overall goal of regulating only where necessary to provide 
clarity or flexibility.
    Discussion: The Secretary believes that the principle and intent of 
choice embodied in the NCLB Act has meaning only if parents and 
students have the ability to choose from more than one public school 
choice option. One school is effectively no choice. Choice implies, at 
a minimum, the opportunity to choose between at least two better-
performing schools. However, the regulations do not prohibit an LEA 
from limiting choice options on the basis of such factors as 
transportation arrangements, so long as it provides more than one 
option to students enrolled in schools identified for improvement, 
corrective action, or restructuring.
    Changes: None.
    Comment: One commenter requested clarification as to whether an LEA 
may limit the number of schools to which a student may transfer on the 
basis of such factors as transportation arrangements, so long as the 
LEA provides parents and students more than one option from which to 
choose.
    Discussion: The Secretary has issued nonregulatory guidance 
explaining that LEAs are indeed permitted to take into account 
logistical concerns, such as


[[Page 71755]]


transportation, in limiting the range of available choices to students 
exercising an option under Sec.  200.44.
    Changes: None.
    Comment: One commenter recommended deletion of proposed Sec.  
200.44(a)(4)(ii), which requires LEAs to ``take into account'' parent 
preferences in making final assignments among public school choice 
options offered to students attending schools identified for 
improvement, corrective action, and restructuring. The commenter noted 
that this provision is not included in the ESEA and ``interferes with 
the local control of school systems.''
    Discussion: The Secretary recognizes that the final decision 
regarding student assignment among available choices rests with the 
LEA, but believes that meaningful choice requires that LEAs take into 
account parental preferences.
    Changes: None.
    Comment: One commenter requested clarification of the eligibility 
for choice and supplemental educational services of students who plan 
to attend, but are not yet enrolled in, a school for which an LEA must 
provide such options.
    Discussion: The answer to this question depends in large part on 
State and local definitions of ``enrollment,'' but the Secretary 
believes that in general LEAs should provide new students the same 
options offered to existing students at a given school.
    Changes: None.
    Comment: One commenter requested clarification of the limitation on 
the State law prohibition in Sec.  200.44(b), including examples of 
improper application of the prohibition.
    Discussion: Section 1116(b)(1)(E)(i) of the ESEA requires an LEA to 
provide public school choice to any student in a school identified for 
improvement, unless such public school choice is prohibited by State 
law. Section 200.44(b) of the final regulations clarifies that an LEA 
may invoke the State law exception only if the State law prohibits 
choice through restrictions on public school assignments or student 
transfers among schools. Such a State law could explicitly prohibit an 
LEA from permitting students to transfer to other public schools or it 
could, for example, enforce desegregation by restricting transfers in 
such a way that effectively makes choice impossible. A State law that 
limits class size, however, is not a State law prohibiting choice, 
because an LEA could add teachers to meet class size requirements and 
still permit students to transfer.
    Changes: None.
    Comment: Several commenters objected to the language in proposed 
Sec.  200.44(c)(3) requiring LEAs to ``secure appropriate changes'' to 
desegregation plans to permit compliance with the public school choice 
requirements of Sec.  200.44. Commenters noted that LEAs could only 
seek such changes and only courts or the responsible agencies could 
grant the changes. In addition, two commenters were concerned that this 
provision may impose the burden and expense of protracted litigation on 
LEAs.
    Discussion: Nothing in the proposed regulations or these final 
regulations provides an LEA with the authority to violate an applicable 
desegregation plan; rather, Sec.  200.44(c)(1) holds that the existence 
of a desegregation plan does not exempt an LEA from the public school 
choice requirements of Sec.  200.44. In addition, Sec.  200.44(c)(2) 
states that an LEA may take into account the requirements of its 
desegregation plan in determining how to implement a transfer option. 
An LEA is required to ``secure appropriate changes'' from the court 
only if it is unable to implement the choice requirement consistent 
with the plan. The Department of Education anticipates that courts and 
responsible agencies will recognize the benefits of allowing students 
to transfer from schools identified as needing improvement and will 
grant amendments to desegregation plans permitting such transfers. If a 
court or responsible agency denies an LEA's request to amend its 
desegregation plan to allow for choice, then the LEA should contact the 
Department of Education. It is not the Secretary's intent to deny Title 
I funding to an LEA that in good faith takes appropriate action to seek 
amendments to the desegregation plan in order to comply with the public 
school choice requirements of Sec.  200.44.
    Changes: None.
    Comment: One commenter recommended that LEAs be permitted to limit 
eligible students to a single public school choice option, rather than 
the multiple options required by Sec.  200.44(a)(4)(i), in order to 
support the goals of existing desegregation plans.
    Discussion: Section 1116(b)(1)(E)(i) of the ESEA requires an LEA 
with Title I schools identified for improvement to provide students in 
those schools the opportunity to transfer to a school not identified 
for improvement. Consistent with Sec.  200.44(a), eligible students 
must have the opportunity to express a preference among at least two 
eligible schools and that preference must be considered by the school 
district in making their assignment. An LEA may take into account the 
requirements of its desegregation plan in determining how to implement 
the transfer option. If its desegregation plan offers no opportunity 
for the LEA to implement the choice requirement consistent with the 
plan, the LEA would need to secure appropriate changes from the court.
    Changes: None.
    Comment: One commenter maintained that compliance with the priority 
in Sec.  200.44(d), and a similar priority for supplemental educational 
services in Sec.  200.45(d), will require students to re-apply annually 
for a public school choice option to ensure equity in the context of 
limited funding for choice-related transportation and supplemental 
educational services.
    Discussion: The Secretary understands the concerns of the 
commenter, but notes that Sec.  200.44(f) contains the statutory 
requirement permitting students who exercise a public school choice 
option to remain in the new school until the student has completed the 
highest grade in that school. For this reason, the Secretary believes 
that the priority in Sec.  200.44(d) was intended to apply only to 
students requesting a choice option for the first time, not those who 
have already exercised such an option. As for the commenter's similar 
concern regarding supplemental educational services, Sec.  200.45(b)(3) 
requires LEAs to make such services available only until the end of the 
school year in which they are first provided, a limitation that 
mandates annual re-application for such services.
    Changes: None.
    Comment: One commenter recommended that the Department regulate the 
State role in encouraging cooperative agreements between LEAs to make 
available choice to students in LEAs in which all schools have been 
identified for improvement, corrective action, or restructuring.
    Discussion: While the Secretary agrees that it would helpful, and 
consistent with the spirit of the NCLB Act, for States to encourage 
cooperative agreements between LEAs that would increase the 
availability of public school choice options, it would be inappropriate 
to regulate in this area of State authority.
    Changes: None.
    Comment: One commenter recommended setting geographic limits on the 
distance between LEAs that arrange cooperative agreements for the 
purpose of expanding public school choice options available to students 
enrolled in schools identified for improvement, corrective action, or 
restructuring.
    Discussion: The Secretary believes that geographic limits are the 
kind of issue the authorizers intended to


[[Page 71756]]


address when they called for such cooperative agreements ``to the 
extent practicable,'' a limitation that is repeated in Sec.  
200.44(h)(1).
    Changes: None.
    Comment: One commenter requested clarification as to whether 
``receiving school districts,'' presumably under a cooperative 
agreement such as that provided for under Sec.  200.44(h)(1), would be 
permitted to refuse to accept certain students, such as students with 
disabilities who might require special services and support.
    Discussion: All public school districts, as recipients of Federal 
financial assistance, must comply with applicable Federal civil rights 
requirements, including those under Title VI of the Civil Rights Act of 
1964, Section 504 of the Rehabilitation Act of 1973 (Section 504), and 
Title II of the Americans with Disabilities Act of 1990 (ADA).
    Changes: None.
    Comment: One commenter objected to Sec.  200.44(h)(2), which 
permits LEAs with no eligible schools to which a student may transfer 
to offer supplemental educational services in lieu of choice to 
students enrolled in schools identified for their first year of 
improvement. The commenter stated that the proposed regulations go 
beyond the scope of the statute.
    Discussion: The proposed regulations are consistent with the NCLB 
Act's emphasis on increasing educational options for all students 
attending low-performing schools. The proposed regulations do not 
create a new authority, but merely highlight an existing one, since the 
provision of tutoring and other supplemental instructional services is 
already a permissible use of Federal funds as part of the regular Title 
I program in both schoolwide projects and targeted assistance schools. 
An LEA may implement any corrective action or restructuring measure 
earlier than what is required by the statute.
    Changes: None.
    Comment: One commenter suggested that if the transportation costs 
associated with public school choice become excessive, funds might be 
better used to pay for supplemental educational services.
    Discussion: Section 200.44(h)(2) permits an LEA with no eligible 
schools to which a student may transfer to offer supplemental 
educational services to eligible students enrolled in a school in its 
first year of improvement. Neither the ESEA nor the regulations, 
however, allow an LEA to offer supplemental educational services in 
lieu of choice solely on basis of the costs incurred in providing 
choice in accordance with the requirements of Sec.  200.44.
    Changes: None.
    Comment: Two commenters expressed concern that public school choice 
could require costly replication of specialized services for various 
student populations, including limited-English proficient and migrant 
students and students with disabilities.
    Discussion: In order to provide public school choice, some school 
districts may need to make specialized services for special populations 
of students, such as limited-English proficient students and students 
with disabilities, available in other schools in order to provide those 
students with the opportunity to attend an eligible school, namely, a 
school that has not been identified for school improvement, corrective 
action or for restructuring, and that has not been identified by the 
State as persistently dangerous. However, in offering school choice, 
the school district has the flexibility to offer parents the option to 
enroll their child in eligible schools of choice that already provide 
the language or disability-related services needed by the student.
    Changes: None.
    Comment: One commenter expressed concern about the eligibility for 
choice and supplemental services of students who have been 
involuntarily transferred from Title I schools that are identified for 
improvement, corrective action, or restructuring.
    Discussion: Generally, Title I affords parents of students in low-
performing schools an option to choose a school that has not been 
identified for improvement for their child. There are a very few 
situations, however, that are handled differently. If a student is 
assigned to a particular school by a family court for child custody 
reasons and that school has been identified for improvement, the 
student could be eligible to transfer under the provisions in the ESEA. 
However, the student's parents may not be able to exercise that option 
without first obtaining permission from the court to move their child. 
In the case of a student assigned to a particular school by a juvenile 
court due to the student's violent or criminal behavior, or for 
disciplinary reasons sufficiently serious to justify placement in a 
particular learning environment, the LEA may limit or deny the choice 
option.
    Changes: None.
    Comment: Two commenters expressed concern that parental exercise of 
a choice option in the case of a student receiving special education 
services, without the approval of the student's Individualized 
Education Program (IEP) team, may constitute a unilateral change in 
placement under the IDEA that could violate the student's right to a 
free appropriate public education (FAPE).
    Discussion: Under the IDEA, a change in the location of delivery of 
services, in and of itself, does not trigger the ``change of 
placement'' procedures of the IDEA. The LEA can allow the school of 
choice either to implement the IEP that the prior school developed for 
the new school year, or convene an IEP team meeting and develop a new 
IEP that meets the student's needs. If the LEA adopts the student's 
existing IEP, none of the ``change of placement'' procedures apply. 
However, the school district must comply with the ``change of 
placement'' requirements of the IDEA if the new IEP will change either 
the services in the IEP or the extent to which the student will 
participate with nondisabled students in academic and nonacademic 
activities. Similar rules apply to students who are covered only by 
Section 504 and Title II of the ADA.
    Changes: None.
    Comment: One commenter requested clarification that an LEA would be 
permitted to limit the choices of a student with a disability to those 
eligible schools with the capacity to provide the services required by 
the student's IEP.
    Discussion: LEAs are not required to offer students with 
disabilities the same choices of schools as are offered to nondisabled 
students, but may match the abilities and needs of a student with a 
disability, as indicated on the student's IEP, to those schools that 
have the ability to provide FAPE to the student. However, school 
districts must offer students with disabilities and those eligible 
under Section 504 and Title II of the ADA the opportunity to be 
educated in an eligible school, namely, a school that has not been 
identified for school improvement, corrective action, or restructuring 
and that has not been identified by the State as persistently 
dangerous. Like other students, students with disabilities and those 
covered by Section 504 and Title II of the ADA must have the 
opportunity to express a preference among at least two eligible schools 
and that preference must be considered by the school district in making 
their assignment.
    Changes: None.


Section 200.45 Supplemental Educational Services


    Comment: Two commenters expressed concern that proposed Sec.  
200.45(b)(1) goes beyond the NCLB Act in requiring LEAs to ``arrange'' 
for each eligible student to receive


[[Page 71757]]


supplemental educational services, rather than ``make available'' such 
services at the request of parents.
    Discussion: The ESEA requires LEAs that are identified for a second 
year of improvement or subject to corrective action or restructuring to 
``make supplemental services available'' in accordance with section 
1116(e) of the statute. Section 1116(e)(1) requires such LEAs to 
``arrange for the provision of supplemental educational services to 
eligible children in the school from a provider with a demonstrated 
record of effectiveness, that is selected by the parents.'' The 
proposed regulations are consistent with this statutory language.
    Changes: None.
    Comment: One commenter urged the Secretary to issue ``clarifying 
regulations and guidance'' encouraging States and LEAs to promote 
maximum participation by providers that utilize distance-learning 
technologies.
    Discussion: The Secretary recognizes the potential value of 
technology as a means to overcome geographic and cost barriers to the 
universal availability of high-quality supplemental educational 
services, particularly in poor urban and rural areas where it is 
reasonable to expect there will be the greatest demand for such 
services. This is why Sec.  200.37(b)(5)(i)(A) requires the LEA's 
annual notice of the availability of supplemental educational services 
to specifically include providers of technology-based or distance-
learning services, when such providers are on the SEA's list. However, 
the ESEA does not give the Secretary authority to promote one type of 
provider over another; rather, it places responsibility for promoting 
participation by the maximum number of providers on SEAs, which must 
develop standards for approving providers and maintain an updated list 
of approved providers from which parents may select. Unless evidence 
emerges that the State approval process presents barriers to 
participation by technology-based or distance-learning providers, the 
Secretary believes there is no need for further regulations on this 
issue.
    Changes: None.
    Comment: One commenter requested additional language in proposed 
Sec.  200.45(b)(4)(i)(A) requiring an SEA, before granting a waiver 
from the requirement to provide supplemental educational services, to 
determine that the providers on its approved list makes services 
available within the LEA requesting the waiver through technology-based 
or distance-learning methods.
    Discussion: The proposed regulations require the SEA to determine 
that none of the providers on its list makes available supplemental 
educational services to students served by the LEA before granting a 
waiver from the requirement to provide such services. Since the SEA's 
list presumably will include providers using technology-based or 
distance-learning methods, no additional language is needed.
    Changes: None, except that the final regulation has been renumbered 
as Sec.  200.45(c)(4)(i)(A).
    Comment: One commenter maintained that since any transportation 
costs related to supplemental educational services would strain 
``already tight school budgets,'' the final regulations should 
encourage the use of school-based services wherever possible.
    Discussion: The Secretary appreciates the concern of the commenter, 
and acknowledges the potential benefits of providing supplemental 
educational services at the school site. However, the ESEA 
unambiguously leaves the selection of services up to the parents of 
eligible students.
    Changes: None.


Section 200.46 LEA Responsibilities for Supplemental Educational 
Services


    Comment: One commenter recommended that the regulations clarify 
that for students with disabilities, supplemental educational services 
must ``continue to meet the goals and objectives of the IEP.''
    Discussion: For a student with disabilities, the supplemental 
educational services agreement must include a statement of specific 
achievement goals for the student, a description of how the student's 
progress will be measured, and a timetable for improving achievement, 
that are consistent with the student's IEP. However, the supplemental 
educational services do not also have to meet the goals and objectives 
of the IEP.
    Changes: Section 200.46(b)(3) of the final regulations clarifies 
that each of the provisions of the statement included in the 
supplemental educational services agreement, and not just the timetable 
for improving achievement, must be consistent with the student's IEP or 
individualized services under Section 504.
    Comment: One commenter requested clarification of the relationship 
of supplemental educational services to Individualized Education 
Programs (IEPs) under IDEA or individualized services under a section 
504 plan, out of concern that if such services are written into these 
plans, they could be subject to challenge in a due process proceeding.
    Discussion: Sec.  200.46(b)(2)(i)(c) requires supplemental 
educational services to be ``consistent'' with IEPs and section 504 
services, but these services are provided in addition to the 
instruction and services provided during the school day under the IEP 
or Section 504 plan and are not considered part of IEPs or section 504 
plans.
    Changes: None.
    Comment: One commenter requested that the regulations provide an 
exemption from restrictions under the Family Educational Rights and 
Privacy Act to permit the sharing of IEP and section 504 plans with 
supplemental educational services providers.
    Discussion: Under the Family Educational Rights and Privacy Act 
(FERPA), parental consent must be obtained before developing the 
supplemental services agreements provided for in section 1116(e)(3) of 
the ESEA and Sec.  200.46(b), without regard to whether a particular 
student is a student with disabilities or a nondisabled student, 
because all supplemental services agreements will require the LEA to 
share information from education records with the services provider. 
Therefore, an exemption for students with IEPs or Section 504 plans is 
not appropriate.
    Changes: None.
    Comment: One commenter recommended strengthening proposed 
Sec. Sec.  200.46(a)(4) and 200.47(a)(5) by adding language ensuring 
that eligible students with disabilities and students covered under 
section 504 of the Rehabilitation Act of 1973 ``are provided with equal 
access to each provider.''
    Discussion: The Secretary has determined that no change is 
necessary. Sections 200.46(a)(4) and 200.47(a)(5) of the final 
regulations must be read consistent with the requirements of Section 
504 and Title II of the ADA. Under Section 504, SEAs and LEAS, as 
recipients of Federal financial assistance, have responsibility for 
ensuring that there is no discrimination in the supplemental services 
program. SEAs and LEAS have similar duties under Title II of the ADA, 
which applies to public entities. In particular, SEAs and LEAs must 
ensure that students with disabilities and students covered by Section 
504 receive appropriate supplemental educational services and necessary 
accommodations in the provision of those services. Consistent with this 
duty, LEAs may not, through contractual or other arrangements with 
private providers, discriminate against a student with a disability by 
failing to provide for appropriate supplemental educational services 
with necessary


[[Page 71758]]


accommodations. Such services and necessary accommodations must be 
available, but not necessarily from each provider. Rather, SEAs and 
LEAs are responsible for ensuring that the supplemental educational 
service providers made available to parents include some providers that 
can serve students with disabilities and students covered under Section 
504 with any necessary accommodations, with or without the assistance 
of the SEA or LEA. If no provider is able to make the services with 
necessary accommodations available to a student with a disability, the 
LEA would need to provide these services, with necessary 
accommodations, either directly or through a contract.
    Changes: None.
    Comment: In giving further consideration to the proposed 
regulations during the review of public comments, the Secretary noted 
that while proposed Sec.  200.46(a)(4) required an LEA to ensure that 
eligible students with disabilities and students covered under Section 
504 receive appropriate supplemental educational services and 
accommodations in the provision of those services, the proposed 
regulations were silent on the LEA's obligation to ensure the provision 
of appropriate services, including any necessary language assistance, 
to students with limited English proficiency.
    Discussion: Eligible students are entitled to supplemental 
educational services regardless of their English proficiency and, in 
fact, some students may need such services due to their limited English 
proficiency. Under Sec.  200.20, each LEA is required to report on the 
annual yearly progress of each subgroup, including students with 
limited English proficiency. Additionally, under Title VI of the Civil 
Rights Act of 1964, 42 U.S.C. 2000d, an LEA implementing the Title I 
program is prohibited from discriminating against students with limited 
English proficiency. For these reasons, the final regulations include 
new language emphasizing an LEA's responsibility to ensure that the 
supplemental education providers made available to parents include some 
who can serve students with limited English proficiency, with or 
without the assistance of the LEA.
    Changes: Section 200.46(a)(5) of the final regulations require LEAs 
to ensure that students who have limited English proficiency receive 
appropriate supplemental educational services and language assistance 
in the provision of those services.
    Comment: One commenter asked whether an LEA may identify and 
approve providers of supplemental educational services if an SEA fails 
to provide a list of approved providers in a timely manner.
    Discussion: The ESEA does not authorize an LEA to identify and 
approve providers of supplemental educational services except, as 
described under section 1116(e)(11), when State law prohibits an SEA 
from carrying out this responsibility. In general, the Secretary would 
consider an SEA that fails to provide a list of approved providers in a 
timely manner to be out of compliance with the statute, and would take 
action to bring the SEA into compliance and ensure that LEAs can 
arrange for eligible students to receive supplemental educational 
services.
    Changes: None.
    Comment: One commenter asked whether LEAs are permitted to 
establish additional criteria for supplemental educational service 
providers on the SEA's list.
    Discussion: With the narrow exception in Sec.  200.46(c), the ESEA 
clearly assigns authority for identifying and approving supplemental 
service providers to the SEA. LEAs, which also may serve as providers 
and thus would face a potential conflict of interest in setting 
additional barriers to participation by SEA-approved providers, are not 
permitted to set additional criteria or otherwise modify the list of 
providers made available by the SEA.
    Changes: None.


Section 200.47 SEA Responsibilities for Supplemental Educational 
Services


    Comment: One commenter expressed concern that proposed Sec.  
200.47(a)(3), which requires SEAs to ``maintain by LEA an updated list 
of approved providers from which parents may select,'' could 
inadvertently lead to the exclusion of technology-based or distance-
learning providers located outside the LEA.
    Discussion: The Secretary agrees that the language of the proposed 
regulations could be misconstrued to exclude technology-based or 
distance-learning providers.
    Changes: Final Sec.  200.47(a)(3) includes additional language 
requiring the updated LEA lists of providers to include technology-
based and distance-learning providers serving the respective LEAs.
    Comment: None.
    Discussion: In giving further consideration to the proposed 
regulations during the review of public comments, the Secretary noted 
that while proposed Sec.  200.47(a)(5) requires an SEA to ensure that 
eligible students with disabilities and students covered under Section 
504 receive appropriate supplemental educational services and 
accommodations in the provision of those services, the proposed 
regulations were silent on the SEA's obligation to ensure the provision 
of appropriate services, including any necessary language assistance, 
to students with limited English proficiency.
    Eligible students are entitled to supplemental educational services 
regardless of their English proficiency and, in fact, some students may 
need such services due to their limited English proficiency. Under 
Sec.  200.21, each SEA is required to report on the annual yearly 
progress of each subgroup, including students with limited English 
proficiency. Additionally, under Title VI of the Civil Rights Act of 
1964, 42 U.S.C. 2000d, an SEA implementing a Title I program is 
prohibited from discriminating against students with limited English 
proficiency. For these reasons, the final regulations include new 
language emphasizing an SEA's responsibility to ensure that the 
supplemental education providers made available to parents include some 
who can serve students with limited English proficiency, with or 
without the assistance of the SEA.
    Changes: Section 200.47(a)(6) of the final regulations requires 
SEAs to ensure that students who have limited English proficiency 
receive appropriate supplemental educational services and language 
assistance in the provision of those services.
    Comment: One commenter expressed concern over the exclusion of 
educational service agencies from the list of potential providers in 
proposed Sec.  200.47(b)(1). The commenter noted that such agencies may 
be considered LEAs under section 9101(26) of the NCLB Act.
    Discussion: The Secretary agrees that it is appropriate to clarify 
that educational service agencies may be supplemental educational 
service providers.
    Changes: Educational service agencies have been added to the 
definition of entities eligible to be supplemental educational service 
providers in Sec.  200.47(b)(1).
    Comment: Several commenters objected to proposed Sec.  
200.47(b)(1)(iv), which would prohibit States from approving as a 
supplemental service provider any school that has been identified for 
improvement, corrective, or restructuring. Commenters asserted that 
this restriction would prevent some identified schools that operate 
``very effective'' after-school programs from serving as providers, 
complicate efforts


[[Page 71759]]


to make services available on school grounds, and limit the 
availability of providers in poor and rural communities.
    Discussion: The Secretary believes that schools that are identified 
for improvement or subjected to corrective action or restructuring need 
to be focused on carrying out comprehensive efforts to make in helping 
all student meet challenging State academic achievement standards, and 
not divert staff and other resources to the creation and operation of 
supplemental educational service programs. Though the proposed 
regulations excluded only identified schools as service providers, the 
same concerns apply to LEAs identified for improvement or corrective 
action. The purpose of supplemental educational services--increasing 
the academic achievement of eligible children on State assessments and 
helping them attain proficiency in meeting the State's academic 
achievement standards--is not well served if students obtain such 
services from an entity that is demonstrably failing to achieve those 
goals as shown by a consistent inability to make AYP. The final 
regulations do not hinder in any way the ability of a provider to offer 
services on school grounds or in LEA facilities. Finally, the success 
of supplemental educational services depends not merely on the 
availability of services, but on the availability of high-quality 
services that meet student needs. The Secretary believes there will be 
sufficient incentive for independent providers or potential providers, 
including those offering technology-based or distance-learning 
services, to offer such services in poor urban and rural communities.
    Changes: Section 200.47(b)(1)(v) has been added to clarify that an 
LEA that has been identified for improvement or corrective action is 
not eligible to be a supplemental educational services provider.
    Comment: One commenter supported proposed Sec.  200.47(b)(1)(iv), 
which would prohibit States from approving as a supplemental service 
provider any school that has been identified for improvement, 
corrective action, or restructuring. However, the commenter requested 
clarification that highly qualified teachers employed by such schools 
are eligible to provide such services.
    Discussion: The final regulations do not restrict in any way the 
ability of a highly qualified teacher employed by a school identified 
for improvement, corrective action, or restructuring from forming an 
entity that would serve as a supplemental educational services 
provider, or from working for such an entity.
    Changes: None.
    Comment: One commenter expressed concern that the purpose and 
quality of supplemental educational services may be undermined if 
providers are permitted to hire as instructors staff who teach at 
schools identified for improvement, corrective action, or 
restructuring.
    Discussion: The Secretary understands the concern of the commenter, 
but believes that even the lowest-performing schools may have teachers 
who have the experience and skill to provide high-quality supplemental 
educational services. In addition, the Secretary has no authority to 
limit contractual agreements between teachers and other entities.
    Changes: None.
    Comment: One commenter recommended that the regulations encourage 
SEAs to include input from parents in developing standards for 
approving and monitoring supplemental educational service providers.
    Discussion: The ESEA neither requires nor precludes participation 
by parents in the process of approving and monitoring supplemental 
educational service providers, and SEAs that wish to include parents in 
this process are free to do so.
    Changes: None.
    Comment: Several commenters maintained that proposed Sec.  
200.47(b)(3) could have permitted providers to exclude students with 
disabilities, based on the possibility of an ``arbitrary judgment'' 
regarding the ``minor adjustments'' required to serve them. Some 
commenters requested a definition of ``minor adjustments,'' including 
an explanation of who would pay for such adjustments, while others 
recommended that the final regulations simply prohibit providers from 
discriminating against any eligible student with a disability.
    Discussion: The Secretary agrees with commenters that the proposed 
regulations potentially created confusion regarding the civil rights 
obligations that are applicable when students with disabilities and 
students covered by Section 504 and Title II of the ADA receive 
supplemental educational services. Under Section 504 and Title II, SEAs 
and LEAs have primary responsibility for ensuring that there is no 
discrimination in the provision of supplemental educational services. 
Thus, SEAs and LEAs are responsible for ensuring that the supplemental 
educational service providers made available to parents include some 
providers that can serve students with disabilities and students 
covered by Section 504 with any necessary accommodations, with or 
without the assistance of the SEA or LEA.
    At the SEA level, this responsibility must involve efforts to 
identify and approve providers that will be available to serve these 
students with necessary accommodations. LEAs also are responsible for 
ensuring that supplemental services are available for students with 
disabilities and students covered by Section 504, and may have to 
provide services and necessary accommodations directly to these 
students in the absence of a private provider that is able to provide 
supplemental educational services with necessary accommodations.
    Private supplemental service providers are not deemed recipients 
merely by virtue of their provision of these services and therefore are 
not covered under Section 504; nor are they covered under Title II of 
the ADA since they are not public entities. For this reason, proposed 
Sec.  200.47(b)(3), which governed the obligations of private providers 
of supplemental educational services for students with disabilities and 
students covered by Section 504 and Title II of the ADA, has been 
removed from the final regulations. However, private providers may have 
certain responsibilities under Federal, State and local civil rights 
laws, and SEAs must ensure that providers fulfill these 
responsibilities as a condition of approval as a supplemental 
educational services provider. For example, private providers that are 
not religious entities must comply with the nondiscrimination 
requirements of Title III of the ADA (Title III).
    Under Title III, which is enforced by the U.S. Department of 
Justice, private entities that are places of public accommodation 
(except for religious entities) must make reasonable modifications to 
their policies, practices, and procedures to ensure nondiscrimination 
on the basis of disability, unless to do so would fundamentally alter 
the nature of the program. Likewise, these providers must take those 
steps necessary to ensure that students with disabilities are not 
denied services or excluded because of the absence of auxiliary aids 
and services, unless taking those steps would fundamentally alter the 
nature of the services or would result in an undue burden (i.e., 
significant difficulty or expense). Private providers may also be 
subject to Title VII of the Civil Rights Act concerning discrimination 
in employment.


[[Page 71760]]


    Changes: Proposed Sec.  200.47(b)(3) has been removed from the 
final regulations.
    Comment: Two commenters found proposed Sec.  200.47(b)(3), which 
appears to permit providers to exclude some students with disabilities, 
to be inconsistent with proposed Sec. Sec.  200.46(a)(4) and 
200.47(a)(5), which require LEAs and SEAs to ensure that these students 
``receive appropriate supplemental educational services and 
accommodations in the provision of those services.''
    Discussion: The Secretary agrees with the commenters, as explained 
in the discussion of the previous comment.
    Changes: Proposed Sec.  200.47(b)(3) has been removed from the 
final regulation.
    Comment: Several commenters objected to proposed Sec.  
200.47(b)(4)(i), which would prohibit States from requiring providers 
to hire staff who are highly qualified, as defined by Sec. Sec.  200.55 
and 200.56. The commenters argued that the proposed regulations are 
inconsistent with the letter and spirit of the NCLB Act, which 
prohibits Title I programs from hiring new teachers who are not highly 
qualified and requires States to adopt plans for ensuring that all 
public school teachers are highly qualified by 2005-2006.
    Discussion: The Secretary believes that requiring supplemental 
educational service providers to use only highly qualified staff, as 
defined in the NCLB Act, would severely limit the availability of 
providers, particularly in poor urban and rural areas. For example, 
retired teachers might not be able to provide services through approved 
providers. States, LEAs, and schools receive substantial resources 
through Federal education programs that may be used to help ensure that 
all teachers are highly qualified. Because these resources are 
unavailable to supplemental service providers, few providers would be 
able to meet the same standard. In addition, unprecedented 
accountability requirements will help to ensure the quality of 
instruction offered by providers. All providers must have a 
``demonstrated record of effectiveness'' to win approval by the SEA, 
must be selected by parents, must enter into agreements with specific 
achievement goals for each student, and must meet those goals to remain 
on the SEA's list of approved providers. Furthermore, parents of 
eligible students must request services annually, giving providers a 
strong incentive both to produce results as measured by improved 
achievement and to offer high-quality customer service to parents and 
students. Finally, even though States may not bar participation by 
providers who do not use only highly qualified staff, they would be 
permitted to indicate the qualifications of provider staff in 
information provided to parents.
    Changes: None.
    Comment: Several commenters also objected to proposed Sec.  
200.47(b)(4)(ii), under which States could not require, as a condition 
of approval, that supplemental educational service providers document 
that they use instructional strategies based on scientifically based 
research. The commenters believe that this proposal would have 
undermined one of the core principles of the NCLB Act, which requires 
the use of instructional strategies based on scientifically based 
research in nearly all of its authorities, including Part A of Title I.
    Discussion: The use of instruction based on scientifically based 
research is indeed a core principle of the NCLB Act. It is absent, 
however, from the statutory definition of supplemental educational 
services, which refers only to services that are ``research-based.'' 
This term suggests that Congress intended a different standard to apply 
to supplemental educational services, one based on the unique 
accountability inherent in such services. However, the Secretary agrees 
that States should be permitted, but not required, to include the use 
of instruction grounded in scientifically based research in the 
criteria used to approve supplemental educational service providers.
    Changes: Proposed Sec.  200.47(b)(4)(ii) has been removed from the 
final regulations.


Section 200.48 Funding for Choice-Related Transportation and 
Supplemental Educational Services


    Comment: A number of commenters raised objections to proposed Sec.  
200.48(a)(2), which covers funding requirements related to the 
provision of public school choice options and supplemental educational 
services. Their comments focused primarily on concerns that the 
proposed regulations were confusing and deviated from what commenters 
believed was the clear language of the ESEA.
    Discussion: Proposed Sec.  200.48(a)(2) reflects the Secretary's 
best interpretation of a section of the ESEA that includes ambiguous 
and sometimes contradictory provisions. This interpretation is based 
primarily on section 1116(b)(10)(A) of the statute, which states that 
``Unless a lesser amount is needed to comply with paragraph (9) 
[choice-related transportation] and to satisfy all requests for 
supplemental educational services under subsection (e), a local 
educational agency shall spend an amount equal to 20 percent of its 
allocation under subpart 2 [Title I, Part A allocations]'' for choice-
related transportation and supplemental educational services.
    The primary effect of this provision, as described in proposed 
Sec.  200.48(a)(2), is to clearly obligate an LEA to spend ``an amount 
equal to'' 20 percent of its allocation under subpart 2 on choice-
related transportation, supplemental educational services, or a 
combination of the two, regardless of the actual source of the funds. 
The emphasis is on the amount that must be spent--an amount equal to 20 
percent of its subpart 2 allocation--not the source of the funds. The 
final regulations maintain this requirement.
    LEA discretion in spending such funds is limited by the requirement 
in section 1116(b)(10)(A)(i) and (ii) of the ESEA that an LEA spend an 
amount equal to 5 percent of its allocation under subpart 2 on choice-
related transportation and 5 percent on supplemental educational 
services, assuming there is demand for both. In other words, if 
students require transportation to a school selected under Sec.  
200.44, and parents have requested supplemental educational services 
under Sec.  200.45, the LEA does not have discretion to use the full 20 
percent reservation on only one of these activities.
    Proposed Sec.  200.48(a)(2)(iii)(A), which was intended to prevent 
an LEA from using the entire 20 percent on choice-related 
transportation and ignoring demand for supplemental educational 
services, should have clarified that an LEA also is not permitted to 
use the entire amount for supplemental educational services and 
potentially deny choice to students by failing to provide or pay for 
choice-related transportation.
    On the other hand, if there is demand for either choice-related 
transportation or supplemental educational services, but not both, the 
Secretary believes that section 1116(b)(10)(A) of the statute requires 
an LEA to spend the full 20 percent on the required activity, and not 
the maximum of 15 percent suggested by some commenters.
    In addition, the claim by some commenters that section 
1116(b)(10)(B) of the ESEA caps an LEA's spending on supplemental 
educational services at an amount equal to 5 percent of its allocation 
ignores the requirements of the introductory clause of section 
1116(b)(10)(A) of the statute and the overall legislative context of 
this provision. Section 1116(b)(10)(B) appears to set such a cap, and 
thus


[[Page 71761]]


contradict the introductory clause of subparagraph (A), which requires 
the expenditure of an amount equal to 20 percent of an LEA's subpart 2 
allocation ``to satisfy all requests for supplemental educational 
services under subsection (e).'' However, the plain language of section 
1116(b)(10)(B) of the statute refers to a maximum amount to be spent on 
supplemental services ``under this part.'' ``[T]his part'' refers to 
the source of funds, which is Title I, Part A. Thus, the maximum amount 
that an LEA is required to spend out of its Title I, Part A funds is an 
amount equal to 5 percent of its allocation under subpart 2 of this 
part. Subparagraph (B) does not change or otherwise reduce the 
obligation under subparagraph (A) for an LEA to spend an amount equal 
to 20 percent of its subpart 2 allocation, but simply places a 5 
percent limitation on the required use of Title I, Part A funds for 
this purpose. An LEA, for example, could use funds allocated under Part 
A of Title V of the ESEA to meet the remaining 15 percent requirement. 
However, the 5 percent limitation on the required use of Title I, part 
A funds for this purpose does not prevent an LEA, at its option, from 
using a higher percentage of Title I, part A funds for this purpose.
    Finally, one commenter observed that the proposed regulations 
appear to ignore section 1116(b)(9) of the ESEA, which requires 
affected LEAs to provide or pay for choice-related transportation, 
without specifying either the source of funds or any limit on such 
costs. Section 1116(b)(9) must be read in context with section 
1116(b)(10), which was negotiated during the House Senate conference 
committee meetings on the ESEA. Earlier versions of the bill had 
uniformly required transportation for all students exercising a choice 
option until all needs were met, while limiting the contribution of 
subpart 2 funds for transportation to 15 percent of an LEA's 
allocation. If transportation costs exceeded this 15 percent cap on 
subpart 2 funds, an LEA would have had to use other funds to pay the 
balance of the choice-related transportation costs. However, the final 
language of the NCLB Act required only the expenditure of an ``amount 
equal to 20 percent of its allocation under subpart 2,'' thereby 
extending the cap to funding from all sources and limiting the 
obligation to pay transportation costs until all needs were met.
    Changes: The final regulations maintain the NPRM requirement in 
Sec.  200.48(a)(2) that an LEA spend an amount equal to 20 percent of 
its Title I, part A allocation on choice-related transportation and 
supplemental educational services, unless a lesser amount is needed to 
meet the requirements of Sec. Sec.  200.44 and 200.45. Section 
200.48(a)(2)(iii)(A) has been amended to clarify that an affected LEA 
must spend a minimum of an amount equal to 5 percent of its allocation 
under subpart A for transportation required under Sec.  200.44 and an 
identical amount for supplemental educational services under Sec.  
200.45, unless a lesser amount is needed to comply with all requests 
for choice-related transportation and supplemental educational 
services.
    Comment: One commenter requested regulatory clarification that 
Title I, Part A funds may be used to pay the administrative costs 
associated with supplemental educational services.
    Discussion: Section 1116(b)(10) of the ESEA requires an LEA to 
spend an amount equal to 20 percent of its Title I allocation for 
transportation costs related to public school choice and to provide 
supplemental educational services. This requirement establishes a 
minimum amount an LEA must spend on the actual supplemental educational 
services in order to make those services available to as many eligible 
students as possible. As a result, the Secretary has revised Sec.  
200.48(a)(2)(iii)(B) of the final regulations to make clear that an LEA 
may not include costs for administration or transportation incurred in 
providing supplemental educational services, or any administrative 
costs associated with the provision of public school choice options 
under Sec.  200.44, in the amounts required to be spent to meet the 
requirements of section 1116(b)(10) of the ESEA. Such costs, however, 
are allowable Title I expenditures and may be taken off the top of the 
LEA's Title I allocation like other proper administrative costs.
    Changes: Section 200.48(a)(2)(iii)(B) has been amended to clarify 
that administrative costs associated with providing supplemental 
educational services may not ``count'' toward meeting the minimum 
expenditure requirements in section 1116(b)(10) of the ESEA.
    Comment: Two commenters objected to proposed Sec.  
200.48(a)(2)(iii)(B), which prohibits an LEA from including 
supplemental educational services-related administrative or 
transportation costs as part of the minimum 5 percent of an LEA's Part 
A allocation that must be spent on satisfying all requests for such 
services. One of the commenters asserted that since a provider would be 
permitted to include transportation costs in its fees, LEAs should be 
permitted to include similar costs under the 5 percent minimum.
    Discussion: The ESEA is silent on the treatment of administrative 
or transportation costs associated with supplemental educational 
services. The Secretary believes, however, that the funds made 
available for supplemental educational services under Sec.  
200.48(a)(2) are intended to pay for actual services and not 
administrative or transportation costs. Funding limitations may 
restrict significantly the availability of supplemental educational 
services in many LEAs, and permitting LEAs to count administrative or 
transportation costs toward satisfying the funding requirements of 
Sec.  200.48(a)(2) would only further reduce the number of students 
receiving supplemental educational services. In addition, the proposed 
regulations should have stated that an LEA may not use administrative 
or transportation costs related to supplemental educational services to 
satisfy any of the funding requirements of Sec.  200.48(a)(2), and not 
just the 5 percent minimum requirements under Sec.  
200.48(a)(2)(iii)(A).
    Changes: The final regulations clarify that LEAs may not include 
administrative or transportation costs associated with the provision of 
supplemental educational services in meeting the funding requirements 
of Sec.  200.48(a)(2).
    Comment: One commenter requested that the final regulations clarify 
that LEAs have fulfilled their responsibility to fund ``all requests 
for supplemental educational services'' once they have spent an amount 
equal to 20 percent of their Part A allocations on choice-related 
transportation, supplemental educational services, or a combination of 
the two.
    Discussion: The Secretary believes that it is clear from the 
proposed regulations that an LEA's obligation to ``satisfy all requests 
for supplemental educational services'' is limited by available funding 
specified under Sec.  200.48(a)(2). This limitation is explicitly 
acknowledged in proposed Sec.  200.48(a)(3) and (4), which permit but 
do not require LEAs and SEAs to make available additional funding for 
choice-related transportation and supplemental educational services 
from other sources.
    Changes: None.
    Comment: One commenter requested that the final regulations permit 
the use of alternatives to census poverty estimates in calculating the 
per-child funding for supplemental educational services under proposed 
Sec.  200.48(c).
    Discussion: Section 1116(e)(6) of the ESEA explicitly requires an 
LEA to use census poverty estimates to calculate the per-child amount 
available for


[[Page 71762]]


providing supplemental educational services. The Department provides 
these estimates to each State when it makes annual Title I allocations, 
and thus they are available to each LEA. The Secretary has no authority 
to permit the use of alternative poverty data to determine the per-
child amount available for supplemental educational services. We note, 
however, that an LEA does not use the census poverty estimates to 
identify those low-income students eligible for supplemental 
educational services. Rather, an eligible student is a student from a 
low-income family as determined by the LEA for purposes of allocating 
Title I funds to schools under section 1113 of the ESEA.
    Changes: None.


Section 200.49 SEA Responsibilities for School Improvement, Corrective 
Action, and Restructuring


    Comment: Several commenters recommended modifying proposed Sec.  
200.49(b)(2)(ii), which permits an SEA to use school improvement funds 
to directly provide school improvement activities ``if requested by an 
LEA,'' by returning to the language of section 1003(b)(2) of the ESEA, 
which permits SEA retention of such funds ``with the approval of the 
local educational agency.'' The proposed regulations could be 
interpreted as preventing a State from developing a cost-effective, 
statewide approach to supporting school improvement efforts absent a 
request from LEAs.
    Discussion: The Secretary agrees that the proposed regulations 
could be subject to misinterpretation.
    Changes: Section 200.49(b)(2)(ii) has been changed to permit SEAs 
to directly support school improvement activities ``with the approval 
of the LEA.''
    Comment: One commenter expressed concern that while proposed Sec.  
200.49(e) requires SEAs to make the results of academic assessments in 
a given year available to LEAs before the beginning of the next school 
year, the inclusion of local assessments, over which SEAs have little 
or no authority, in State assessment systems may prevent SEAs from 
meeting this requirement.
    Discussion: SEAs are responsible for ensuring that their State 
assessment systems, which may include local assessments, comply with 
all the requirements of the ESEA.
    Changes: None.
    Comment: One commenter expressed concern that charter schools, many 
of which enjoy LEA status or are treated as LEAs in the administration 
of Federal education programs, might not be subject to the rigorous 
accountability of the NCLB Act if they are effectively permitted to 
monitor themselves.
    Discussion: Section 1111(b)(2)(K) of the ESEA recognizes the unique 
and varying circumstances of charter schools by requiring that 
accountability be overseen for charter schools in accordance with State 
charter school law. The Secretary agrees that the inclusion of this 
language in the final regulations would help clarify that while the 
accountability provisions of the NCLB Act apply to charter schools, 
they are not intended to expand the authority of SEAs or LEAs over 
charter school operations except to the extent authorized by State 
charter school law.
    Changes: Section 200.49(f) of the final regulations incorporates 
the charter school accountability language of section 1111(b)(2)(K) of 
the ESEA.


Section 200.50 SEA Review of LEA Progress


    Comment: One commenter requested clarification of the SEA review of 
LEA progress required by proposed Sec.  200.50(a), which does not 
appear to include progress on other indicators, such as graduation 
rates.
    Discussion: The Secretary agrees that proposed Sec.  
200.50(a)(1)(ii)(A) appears to require progress only in meeting State 
student academic achievement standards, rather than the broader 
definition of suggested by the statutory reference to section 
1111(b)(2) of the ESEA.
    Changes: Section 200.50(a)(1)(i) has been amended to require ``as 
defined under Sec. Sec.  200.13 through 200.20,'' which includes 
progress on other academic indicators in the State plan.
    Comment: Two commenters objected to the permissive authority in 
proposed Sec. Sec.  200.50(d)(3) and (d)(4) to identify an LEA for 
improvement or remove an LEA from improvement, respectively, on the 
basis of 2001-2002 assessment data. The commenters interpret the ESEA 
as requiring the identification for improvement of any LEA that fails 
to make AYP for two consecutive years, as well as the removal from 
improvement status of any LEA that makes AYP for two consecutive years, 
regardless of the years involved.
    Discussion: The Secretary believes that the absence of any 
reference to 2001-2002 assessment results in the otherwise very 
specific transition provisions of the new law, combined with the strong 
likelihood that many States would not be able to make these results 
available to LEAs prior to the beginning of the 2002-2003 school year, 
supports a flexible approach to the use of those results for 
identification purposes during the transition to the new law. To avoid 
any confusion about the use of 2001-2002 assessment results in 
subsequent years, however, the Secretary has added language clarifying 
that an SEA decision not to identify for improvement an LEA that, on 
the basis of 2001-2002 assessment data, does not make AYP for a second 
consecutive year, does not permit the SEA to ignore that failure in 
making future identification decisions.
    Changes: Section 200.50(d)(3)(ii) clarifies that if an SEA chooses 
not to identify for improvement a school that, on the basis of 2001-
2002 assessment results, does not make AYP for a second consecutive 
year, it nevertheless must consider the LEA's 2001-2002 performance as 
the first year of not making AYP for the purpose of subsequent 
identification decisions.
    Comment: One commenter objected to the flexibility provided SEAs in 
proposed Sec.  200.50(e)(3) to remove from corrective action an LEA 
that, on the basis of assessments administered during the 2001-2002 
school year, makes AYP for a second consecutive year. The commenter 
maintained that the ESEA requires SEAs to remove LEAs from corrective 
action in such cases, as well as to use 2001-2002 assessment data to 
identify additional LEAs for corrective action.
    Discussion: The Secretary believes that the proposed regulations 
are an appropriate way to address an inequity in the statutory 
transition provisions covering identification for corrective action. 
These provisions require SEAs to treat LEAs that were identified for 
corrective prior to enactment of the NCLB Act as subject to corrective 
action for the 2002-2003 school year. Some of these LEAs, however, may 
have made AYP in both 2000-2001 and 2001-2002, thus meeting the 
statutory requirement for removal from corrective action. The proposed 
regulations thus permit SEAs to remove these LEAs from corrective 
action, but does not require such removal because some SEAs may, in 
part due to the uncertain timing of assessment results, prefer to 
simply adhere to the statutory transition provisions. As for 
identifying additional LEAs for corrective action on the basis of 2001-
2002 assessment data, proposed Sec.  200.50(e)(1) already permits an 
SEA to take corrective action against any LEA that it has identified 
for improvement, but the statutory transition provisions suggest that 
mandatory identification for corrective action in the 2002-2003 school 
year is limited to those LEAs identified under the previous law.
    Changes: None.


[[Page 71763]]


Section 200.51 Notice of SEA Action


    Comment: Two commenters requested clarification on whether SEAs, 
rather than communicating directly to parents as required by proposed 
Sec.  200.51(a)(2)(i), are permitted to work with the LEA to deliver 
information about the LEA review and improvement process directly to 
parents.
    Discussion: The Secretary agrees that it may be more effective for 
SEAs, in cases where an SEA does not have access to individual student 
addresses, to communicate with parents through means provided by the 
LEA.
    Changes: Section 200.51(a)(2)(i) has been changed to permit an SEA, 
in cases where an SEA does not have access to individual student 
addresses, to provide information on the LEA review and improvement 
process by using LEA- and school-level delivery mechanisms.


Section 200.54 Rights of School and School District Employees


    Comment: Numerous commenters objected to proposed Sec.  200.54, 
which would have given LEAs greater flexibility in negotiating 
collective bargaining agreements and other agreements between employers 
and employees that are consistent with the school and LEA improvement 
requirements of proposed Sec. Sec.  200.30 through 200.53. Commenters 
maintained that the proposed regulations were inconsistent with both 
the statute and with many State and local laws governing collective 
bargaining agreements.
    Discussion: The Secretary believes that section 1116(d) of the ESEA 
was not intended to deny LEA and school leaders the management tools 
needed to implement effective LEA and school improvement measures, 
which may often involve changes in the assignment and duties of LEA and 
school personnel. However, the Secretary agrees that the proposed 
regulations arguably were inconsistent with a strict reading of the 
NCLB Act and may have conflicted with applicable State and local laws.
    Changes: Proposed Sec.  200.54 has been removed from the final 
regulations.
    Qualifications of Teachers and Paraprofessionals


Section 200.55 Qualifications of Teachers


    Comment: Several commenters asked for clarification as to which 
subjects are ``core academic subjects.'' One commenter asked that 
foreign languages and the arts be excluded from the definition of core 
academic subjects. One commenter asked why science was listed as a 
stand-alone discipline when social studies was broken down into civics, 
geography, and history. Another commenter asked why special education 
was not listed as a core academic area.
    Discussion: The definition of core academic subjects is in section 
9101(11) of the ESEA, and is repeated in Sec.  200.55(c) of the 
regulations. The statute defines core academic subjects as English, 
reading or language arts, mathematics, science, foreign languages, 
civics and government, economics, arts, history, and geography. Hence, 
the definition lists science generally but civics, geography, and 
history separately. The statute does not identify special education as 
a core academic subject, and the Secretary lacks authority to delete or 
change the subjects included in this statutory definition.
    Changes: None.
    Comment: A commenter recommended that newly hired Title I teachers 
serving private school students meet the same standards of quality as 
those who teach in public schools.
    Discussion: We agree with this recommendation.
    Changes: Section 200.55 (a)(2) and (b) has been modified to clarify 
that the requirements governing ``highly qualified'' teachers apply to 
teachers employed by an LEA with funds under part A of Title I, who 
teach eligible private school students, to the same extent as they 
apply to those who teach eligible public school students.
    Comment: One commenter recommended that the regulations clarify 
that a teacher in a targeted assistance program is one who teaches 
students participating in that program.
    Discussion: We believe that the existing language is clear and that 
no further clarification is needed.
    Changes: None.
    Comment: One commenter recommended that the ``highly qualified'' 
requirement not apply to all teachers in a school that operates a 
schoolwide program.
    Discussion: Inherent to the concept of schoolwide programs is the 
elimination of any distinction between Title I and non-Title I 
students; that is, a schoolwide program is intended to provide an 
instructional program that helps all students in the school. Therefore, 
it would subvert the intent of schoolwide programs to have requirements 
that govern highly qualified teachers apply to some, but not all, 
teachers in a schoolwide program school.
    Changes: None.
    Comment: One commenter recommended that Sec.  200.55(b)(1) clarify 
that the requirement that ``all teachers in the State'' be highly 
qualified by the end of the 2005-2006 school year applies only to 
public elementary and secondary school teachers, and not to others, 
such as private school and college teachers.
    Discussion: The Secretary agrees with the comment.
    Changes: Section 200.55(b) has been revised to clarify that the 
requirements governing highly qualified teachers apply to ``all public 
elementary and secondary school teachers.'' This clarification was also 
made in Sec.  200.56(b)(1) and (b)(2). In addition, Sec.  200.55(d) has 
been added to clarify that the requirements of the section do not apply 
to teachers hired by private elementary and secondary schools.
    Comment: As proposed, Sec.  200.55(b)(2) provided, as an example of 
teachers who do not need to meet the highly qualified requirements 
because they do not teach a core academic subject, ``some vocational 
educational teachers.'' One commenter recommended deletion of the word 
``some.''
    Discussion: We disagree with the comment. If a vocational education 
teacher teaches a core academic subject, such as applied physics, 
section 1119 of the ESEA requires that teacher to be highly qualified. 
On the other hand, if a vocational education teacher teaches only a 
trade, such as auto mechanics, the teacher would not need to meet these 
requirements since the law does not treat that area of study as a core 
academic subject. Hence, Sec.  200.56(b)(2) only exempts ``some'' 
vocational educational teachers.
    Changes: None.
    Comment: A number of commenters requested clarification about how 
the ``highly qualified'' requirements apply to special education 
teachers and teachers of limited-English proficient (LEP) students. 
Several recommended that special education teachers be deemed to have 
met the ``highly qualified'' requirements that apply to other teachers 
if they are certified or licensed in special education and have passed 
an appropriate State test.
    Discussion: The ESEA specifies that all teachers of core academic 
subjects are to meet the requirements set forth in the statute. 
Students with limited English proficiency or with disabilities are 
expected to meet the same standards as all other students, and their 
teachers should be expected to have met the same standards for content 
knowledge. On the other hand, special educators who do not directly 
instruct students on any core academic subject or who provide only 
consultation to highly qualified teachers of core academic subjects in 
adapting curricula, using


[[Page 71764]]


behavioral supports and interventions, and selecting appropriate 
accommodations do not need to meet the same ``highly qualified'' 
subject-matter competency requirements that apply under the NCLB Act to 
teachers of core academic subjects. SEAs and LEAs must ensure that all 
special education personnel, including related services providers, meet 
the personnel-standards requirements of section 612(a)(15) of the IDEA 
and 34 CFR Sec.  300.136. Special education teachers who are providing 
instruction in core academic subjects also must meet the ``highly 
qualified'' requirements of the ESEA.
    The Secretary recognizes that there is an urgent need for highly 
qualified teachers, and that critical shortages exist in some areas, 
particularly math and science teachers, and special education teachers. 
Nevertheless, the NCLB Act sets high standards for students, as well as 
teachers, and states should work to meet them. The statute provides a 
certain amount of flexibility in how the standards are met. Teachers 
can demonstrate competency by taking a test, and States have 
flexibility to tailor those tests to the subjects taught by teachers, 
including special education teachers and teachers of LEP students. This 
issue will be addressed further in guidance.
    Changes: None.


Section 200.56 Definition of ``Highly Qualified Teacher''


    Comment: Several commenters recommended tightening the requirements 
for teachers in alternative route programs so that these individuals 
receive, as quickly as possible, the training and full State 
certification they need to be effective teachers.
    Discussion: We agree with the comment. Our proposal that a teacher 
in an alternative route program be considered highly qualified if the 
teacher ``is making satisfactory progress toward full certification as 
prescribed by the State and the program'' reflects the need for States 
to ensure that alternative routes to certification do not become 
vehicles for granting long-term waivers of certification requirements. 
Still, we understand that, for these teachers to be effective, those in 
alternative route programs need to be prepared to teach their students 
from the moment they step into their classrooms, and receive the 
follow-up support they need as beginning teachers. We also believe 
that, in order to ensure that alternative route programs do not become 
long-term vehicles for waiving State requirements for full 
certification, it is reasonable to establish a maximum period--three 
years--in which a teacher in an alternative route can be considered to 
be fully certified without having received State certification.
    Changes: Section 200.56(a)(1)(iii)(B) is amended by adding language 
that requires teachers in alternate route programs to (1) receive high-
quality professional development that is sustained, intensive, and 
classroom-focused in order to have a positive and lasting impact on 
classroom instruction, before and while teaching, (2) participate in a 
program of intensive supervision that consists of structured guidance 
and regular ongoing support for teachers or a teacher mentoring 
program, (3) assume functions as a teacher only for a specified period 
of time not to exceed three years before receiving full State 
certification, and (4) demonstrate satisfactory progress toward full 
certification as prescribed by the State. The regulations have been 
further amended by requiring that the State ensure, through its 
certification and licensure process, that these provisions are met.
    Comment: A commenter recommended deleting the proposed language 
that would permit teachers in alternative route programs to be deemed 
to have obtained full State certification for purposes of meeting the 
requirements governing highly qualified teachers. Several other 
commenters expressed support for the Department's proposal.
    Discussion: We do not agree with those commenters who wish to 
delete the flexibility that we would provide LEAs for teachers in 
alternative routes to certification. First, Congress has chosen both to 
authorize and fund two alternative route programs, Troops-to-Teachers 
and Transition to Teaching, in Title II, part C of the ESEA, and has 
permitted States and LEAs to use Title II, part A formula grant funds 
to hire teachers in alternative route programs. Hence, we do not 
believe that Congress intended that teachers in alternative route 
program would be unable to teach until they had obtained full State 
certification. Beyond this, we believe that LEAs can and should be able 
to continue to effectively use alternate routes to certification as a 
mechanism for increasing the number of teachers who are capable of 
providing effective instruction, and, indeed that these alternative 
routes can also serve as models for the certification system as a 
whole.
    Changes: None.
    Comment: A commenter recommended that teachers participating in 
alternative certification programs be required to demonstrate subject 
matter competency.
    Discussion: Sections 9101(23)(B) and (C) of the ESEA, and Sec.  
200.56(b) and (c) of the regulations already require this.
    Changes: None.
    Comment: A commenter requested that the regulations clarify that 
current teachers may demonstrate their subject area competency in the 
same ways as new teachers can, or through a state-established system of 
evaluation as section 9101(23)(c)(ii) of the ESEA permits.
    Discussion: Section 200.56(c)(2) already provides this 
clarification.
    Changes: None.
    Comment: One commenter recommended that teachers be allowed to 
demonstrate subject-matter competency needed to be highly qualified on 
the basis of a minor in an academic area. Another commenter requested 
that where an evaluation of teacher performance is used to demonstrate 
competency, LEAs, rather than SEAs, be allowed to determine the 
standard of evaluation.
    Discussion: We disagree with both recommendations. Section 
9101(b)(ii) of the ESEA permits middle and secondary school teachers to 
demonstrate subject-matter competency by successful completion, in each 
academic subject the teacher teaches, of an academic major or 
coursework equivalent to an academic major (or a graduate degree or 
advanced certification or recredentialing). The law does not authorize 
receipt of a minor in the subject being taught as sufficient to 
demonstrate competency. Similarly, section 9101(23)(c)(ii) of the ESEA 
expressly permits the demonstration of subject-matter competency to be 
based on ``a high objective State standard of evaluation,'' not a 
``local standard'' of evaluation. Moreover, the Secretary lacks 
authority to delete or change the aspects of this statutory definition.
    Changes: None.
    Comment: Section 9101(23(A)(ii)) of the ESEA, like Sec.  
200.56(B)(3), provides that to be highly qualified a teacher may not 
have had ``certification or licensure requirements waived on an 
emergency, temporary, or provisional basis.'' One commenter recommended 
that the terms temporary, emergency, and provisional licensure be 
defined.
    Discussion: State certification and licensure is a matter of State 
law and policy, and hence the definition of these terms is left to 
State decisionmaking. We do not believe that attempting to establish a 
common definition of these terms is needed. We add only that with one 
exception the Secretary interprets the phrase ``waived on an emergency,


[[Page 71765]]


provisional, or temporary basis,'' to encompass any form of a waiver, 
by whatever name a State uses, under which the State permits a teacher 
to teach without having obtained full certification or licensure 
applicable to the years of experience the teacher possesses. That 
exception is for teachers in alternative routes to certification 
consistent with Sec.  200.56(a)(2)(ii).
    Change: None.
    Comment: One commenter requested that all of the highly qualified 
teacher provisions apply to charter school teachers.
    Discussion: Section 9101(23)(A)(i) of the ESEA provides that, for 
teachers of public charter schools, obtaining full State certification 
(or passing the State teacher licensing examination and holding a 
license to teach) means that teachers have met the requirements of 
their State charter school laws. Thus, the certification and licensure 
requirements of the ESEA do not apply to charter school teachers if 
State law exempts charter school teachers from these requirements. The 
statute's definition of highly qualified teachers provides no other 
exceptions for charter school teachers.
    Changes: None.
    Comment: One commenter recommended that, as part of the definition 
of highly qualified, all teachers be required to complete an approved 
educator preparation program.
    Discussion: We assume that the comment was meant to apply to 
teachers progressing through alternate routes to certification. The 
Secretary agrees that proposed Sec.  200.56(a)(1)(iii)(B) should be 
modified to include a requirement that teachers in alternative route 
programs receive high-quality professional development before beginning 
to teach. However, the Secretary does not believe that those 
progressing through alternative routes to teaching should need to 
complete a State ``approved educator preparation program,'' 
particularly since this kind of requirement would very likely 
discourage a great many talented individuals who would want to change 
careers and become teachers from ever doing so.
    Changes: Sec.  200.56(a)(2)(ii)(A) now contains language that 
requires teachers in alternative route programs to receive rigorous 
training before assuming instructional duties and to participate in a 
teacher mentoring program.
    Comment: One commenter requested that the language in paragraph 
(b)(1) be revised to require teachers new to the profession either to 
hold a Bachelor's degree or, for those in teacher preparation programs, 
to have completed all of the requirements for the degree with the 
exception of student teaching.
    Discussion: Sections 9101(23)(B)(i)(I), 9101(23)(B)(ii), and 
9101(23)(C)(i) of the ESEA expressly require all teachers to hold a 
Bachelor's degree in order to be considered highly qualified. The 
Secretary lacks authority to delete or change the subjects included in 
this statutory definition.
    Changes: None.
    Comment: A commenter requested clarification of the terms 
``advanced certification or credentialing.''
    Discussion: The NCLB Act offers these vehicles as alternative means 
by which middle and high school teachers not new to the profession may 
demonstrate subject matter competency in the subjects they teach. Each 
State may define these terms, and establish policies that implement 
them, as it believes will meet the purpose of the law--to enable 
teachers to demonstrate subject matter competency.
    Changes: None.


Section 200.57 Plans to Increase Teacher Quality


    Comment: One commenter recommended that the regulations should 
require the State to outline specific steps for carrying out the highly 
qualified teacher provision, and how the State intends to monitor LEAs 
in this regard.
    Discussion: The Secretary agrees with this recommendation.
    Changes: Section 200.57(a) has been amended to require that the 
State's plan describe the strategies the state will use to help LEAs 
and schools have all teachers meet the highly qualified requirements no 
later than the end of the 2005-2006 school year, and to monitor the 
progress of LEAs and schools in meeting these requirements.
    Comment: One commenter recommended that the regulations include the 
statutory references to the ``parents right to know'' provision.
    Discussion: The Secretary believes that it is critical that parents 
be kept well informed on the status of their child's education, and so 
he agrees with this recommendation.
    Changes: A new section, Sec.  200.61, has been added that restates 
the language on a ``parent's right to know,'' as stated in section 
1111(h)(6) of the NCLB Act.
    Comment: A commenter recommended that the regulations clarify that 
State plans to increase teacher quality must indicate both the steps 
States will take to ensure that minority students have equal access to 
high quality teachers, and how the States will measure their progress 
in meeting this requirement.
    Discussion: The Secretary agrees with this recommendation. 
Including this information in the State plan merely ensures that, 
through the plan, the SEA is ensuring that LEAs implement the assurance 
they provide the State in section 1111(c)(1)(L) of the ESEA that they 
``ensure, through incentives for voluntary transfers, the provision of 
professional development, recruitment programs, or other effective 
strategies, that low-income students and minority students are not 
taught at higher rates than other students by unqualified, out-of-
field, or inexperienced teachers.'' Indeed, given this LEA assurance, 
the Secretary also believes that comparable information should be 
included in the local plan to increase teacher quality.
    Changes: Section 200.57(a) has been amended to require that the SEA 
take specific steps to ensure that Title I schools provide instruction 
by highly qualified teachers, including steps to ensure that poor and 
minority children are not taught at higher rates than other children by 
inexperienced, unqualified, or out-of-field teachers. SEAs must 
evaluate and publicly report their progress with respect to these 
steps.


Section 200.58 Qualifications of Paraprofessionals


    Comment: One commenter asked that the regulations clarify that it 
is the paraprofessional's choice as to which of the three allowable 
options (two years of study at an institute of higher education, an 
associate's degree, or demonstrating knowledge and ability to assist in 
instruction through an assessment) the paraprofessional will meet. The 
commenter also recommends that the regulations clarify that once a 
paraprofessional has met qualification requirements in one district, he 
or she does not have to re-qualify after moving to another school 
district.
    Discussion: The Secretary does not believe a change in the 
regulations is necessary. Any needed clarifications will be addressed 
in future nonregulatory guidance.
    Changes: None.
    Comment: Several commenters asked for greater clarification about 
which paraprofessionals must meet the requirements in Sec.  200.58. One 
commenter requested that the regulations be revised to clarify that the 
requirements apply only to paraprofessionals hired by the school 
district or school. Another commenter asked whether the requirements 
apply to paraprofessionals with non-instructional duties working in a 
schoolwide project school.


[[Page 71766]]


    Discussion: The requirements of section 1119(c) of the ESEA and 
Sec.  200.58 apply to individuals hired by an LEA whether individually 
or as part of a partnership. They do not apply to volunteers or other 
paraprofessionals who may be employed by a private contractor. They 
also do not apply to individuals with solely non-instructional roles in 
schoolwide project schools.
    Changes: Section 200.58(a)(1) has been amended to clarify that the 
qualification requirements apply to each paraprofessional ``who is 
hired by the LEA'' and who meets the other criteria set out in this 
section of the regulations.
    Comment: Two commenters asked that the regulations be modified to 
provide a four-year transition period for paraprofessionals to obtain a 
high school diploma or the equivalent. Another commenter recommended 
that the regulations include a grandfather clause that would exempt 
paraprofessionals with ten or more years of experience from having to 
meet any of the qualification requirements.
    Discussion: Section 1119(f) of the ESEA requires that LEAs 
receiving Title I, part A funds ensure that all paraprofessionals 
working in a program supported with Title I, part A funds, regardless 
of the paraprofessional's hiring date, have a high school diploma. The 
ESEA provides no authority for a phase-in of this requirement or to 
exempt paraprofessionals with ten or more years of experience from 
meeting this requirement.
    Changes: None.
    Comment: One commenter requested that the regulations be modified 
to permit a paraprofessional enrolled in an associate's degree program 
to be considered as meeting the qualification requirements through an 
alternative qualification process.
    Discussion: The statute does not authorize paraprofessionals to 
meet the qualification requirements in the manner suggested.
    Changes: None.
    Comment: Two commenters objected to the qualification option that 
paraprofessionals have an associate's degree.
    Discussion: An associate's degree is one of the three ways that the 
statute provides for paraprofessionals to demonstrate they are 
qualified. A paraprofessional may (1) complete two years of study at an 
institution of higher education, or (2) have an associate's degree, or 
(3) pass a state or local assessment that demonstrates knowledge of and 
ability to assist in the instruction of reading, writing or mathematics 
(or reading readiness, writing readiness, or mathematics readiness), as 
appropriate. The options recognize that, depending on a 
paraprofessional's background and experience, there is more than one 
way to demonstrate the appropriate competency.
    Changes: None.
    Comment: Several commenters sought clarification of what it means 
for a paraprofessional to have completed at least two years of study at 
an institution of higher education. One commenter asked that the 
regulations specify the specific number of semester hours necessary to 
demonstrate that a paraprofessional has completed the required two 
years of study. On the other hand, other commenters asked that the 
regulations make it clear that there is no specific number of credit 
hours that defines two years of study.
    Discussion: The number of credit hours necessary to demonstrate 
that a paraprofessional has completed at least two years of study at an 
institution of higher education will vary by institution. Therefore, a 
``one-size-fits-all'' definition would be inappropriate. Each State may 
choose to define, for paraprofessionals working in the State, what 
these two years of study encompass. If it does not do so, the policies 
of each institution will govern whether a paraprofessional has 
completed two years of study.
    Changes: None.
    Comment: One commenter requested that the regulations make it clear 
that paraprofessionals providing instructional support for teachers of 
eligible students attending private schools must meet the same 
standards as other paraprofessionals.
    Discussion: The Secretary agrees with this recommendation. 
Paraprofessionals hired by an LEA to provide instructional support for 
Title I, part A teachers of eligible students attending private schools 
are employees of the school district and must meet the same 
requirements as any other paraprofessionals providing instructional 
support in a program supported by Title I, part A funds.
    Change: Section 200.58(a)(3)(iii) is added to clarify that the 
qualification requirements apply to paraprofessionals hired by an LEA 
to provide instructional support to public school teachers providing 
Title I services to eligible private school students.
    Comment: Several commenters sought clarification of the option that 
paraprofessionals may meet a rigorous standard of quality by 
demonstrating competency through a formal State or local academic 
assessment. One commenter requested clarification that the assessment 
does not have to be in writing. Other commenters wanted the regulations 
to require States and districts to develop these assessments; make 
clear that States or districts may adopt an existing assessment; 
require that assessments be available before September 2003; specify 
that the assessment should be made available at no cost to the 
paraprofessionals; and clarify that Title I, part A funds may be used 
to develop or purchase such assessments.
    Discussion: Under the ESEA, States and LEAs have considerable 
flexibility in how they design and administer their assessments. The 
Secretary does not believe that additional regulations are necessary 
and intends to highlight this flexibility in future nonregulatory 
guidance.
    Change: None.
    Comment: Two commenters sought clarification on how the 
requirements apply to paraprofessionals hired ``on'' January 8, 2002 as 
opposed to those before or after that date.
    Discussion: The Secretary agrees that clarification is needed.
    Changes: Section 200.58(d) is amended to clarify that existing 
paraprofessionals are those hired on or before January 8, 2002.
    Comment: Several commenters sought clarification on how the 
requirements apply to paraprofessionals in specified circumstances, 
e.g., paraprofessionals with multiple roles, such as translators who 
also provide instructional support, paraprofessionals who provide 
instructional support to teachers of subjects other than core academic 
subjects, such as physical education, and non-instructional computer 
technicians.
    Discussion: The ESEA is very explicit about the requirements and to 
whom they apply. The requirements apply to any paraprofessionals in 
Title I, part A programs who are assigned an instructional support 
duty, even as one of many assigned responsibilities, identified in 
section 1111(g)(2) of the ESEA and Sec.  200.59(b). With regard to 
computer technicians, Sec.  200.58(a)(2)(ii) of the regulations states 
that solely providing technical support for computers is a non-
instructional duty.
    Changes: None.
    Comment: One commenter sought clarification on how the requirements 
apply to paraprofessionals working in a variety of pre-Kindergarten 
programs, such as Head Start, or pre-Kindergarten programs funded with 
Head Start and State pre-Kindergarten funds.
    Discussion: A number of questions have been raised about how the 
paraprofessional qualification


[[Page 71767]]


requirements apply to paraprofessionals working in these pre-
Kindergarten programs. The Secretary intends to address this issue in 
nonregulatory guidance.
    Change: None.


Section 200.59 Duties of Paraprofessionals


    Comment: One commenter wanted changes in the proposed Sec.  200.59 
in order to reinforce the difference between instructional and non-
instructional duties.
    Discussion: The Secretary agrees with the recommendation.
    Changes: Section 200.59(b) is amended to read, ``A paraprofessional 
covered under Sec.  200.58 may perform the following instructional 
support duties:'' Regardless of an employee's title, an individual 
hired by an LEA who does not perform instructional support duties as 
identified in Sec.  200.59 is not a ``paraprofessional'' for purposes 
of Section 1119 of the ESEA or these regulations. Moreover, it is 
possible that one employee, for example, performs parental involvement 
that is instructional support while another employee performs parental 
involvement that is not instructional support. The Department intends 
to issue guidance to help explain that distinction.
    Comment: Several commenters recommended deleting language that 
would specify that one-on-one tutoring must take place outside of the 
regular school day.
    Discussion: The Secretary agrees that there may be circumstances in 
which tutoring could be provided during the school day at a time when a 
student is not receiving instruction from a teacher.
    Changes: Section 200.59(b)(1) is amended to remove the language 
requiring one-on-one tutoring to take place outside of the regular 
school day.
    Comment: Many commenters addressed the regulatory provisions in 
paragraph (c), and asked that it clarify what it means for a 
paraprofessional to work under the direct supervision of a teacher. For 
example, several commenters said that the proposed language was too 
prescriptive, while another proposed that the regulations require 
paraprofessionals to work in the same room as the teacher. One 
commenter sought additional clarification of what ``close and physical 
proximity to a teacher'' means, while still another commenter 
recommended deleting this language.
    Discussion: This regulatory provision responds to a finding of the 
National Assessment of Title I that, even though the prior statute also 
required paraprofessionals to work under the direct supervision of a 
teacher, 41 percent of paraprofessionals reported that half or more of 
the time they spent teaching or helping to teach was on their own, 
without a teacher present.
    Changes: None.


Participation of Eligible Children in Private Schools


Section 200.62 Responsibilities for Providing Services to Private 
School Children


    Comment: One commenter recommended that the regulations confirm 
that Title I services and benefits to private school students be 
secular, neutral, and non-ideological.
    Discussion: The Secretary concurs. Section 1120(a) of the ESEA 
requires that Title I services and benefits provided to eligible 
private school children be secular, neutral, and non ideological.
    Changes: Section 200.62 incorporates the statutory language that 
reflects the recommended change.


Section 200.63 Consultation


    Comment: One commenter recommended that the consultation topics 
listed in Sec.  200.63(b) be examples of timely and meaningful 
consultation by the LEA rather than required topics for consultation.
    Discussion: Section 1120(b)(2) of the ESEA requires that 
consultation by an LEA occur prior to an LEA's making any decision that 
affects the opportunities of private school children to participate in 
Title I. The Secretary believes that all of the consultation topics 
listed in Sec.  200.63(b) are necessary because they affect the 
opportunities of private school children to participate in Title I.
    Changes: None.
    Comment: One commenter asked that Sec.  200.63(b)(5), concerning an 
LEA's responsibility for assessing services to private school children, 
be clarified by adding a reference to the LEA's assessment 
responsibility under Sec.  200.10.
    Discussion: The Secretary concurs that a reference to Sec.  200.10 
clarifies the LEA's assessment responsibility.
    Changes: Section 200.63(b)(5) contains a reference to Sec.  200.10.
    Comment: One commenter recommended that Sec.  200.63(b)(6), 
concerning size and scope of equitable services, be clarified by 
including a reference to Sec.  200.64, that addresses factors for 
determining equitable participation of private school children.
    Discussion: The Secretary agrees that a reference to Sec.  200.64 
clarifies an LEA's responsibility to consider the factors listed in 
that section when determining equitable participation for private 
school students.
    Changes: Section 200.63(b)(6) contains a reference to Sec.  200.64.
    Comment: One commenter suggested that Sec.  200.63(b)(7) singles 
out one method for determining poverty data for private school 
children, and asked that the words ``including whether the LEA will 
extrapolate data from a survey'' be deleted.
    Discussion: Section 1120(c) of the ESEA lists four ways an LEA may 
determine the number of private school children from low-income 
families. The Secretary's intent is to give direction for consultation 
rather than to indicate a preference for any method.
    Changes: To make the intent clear, Sec.  200.63(b)(7) has been 
amended to clarify that consultation regarding the source of poverty 
data for private school children must include a discussion of 
extrapolation only if a survey is used.
    Comment: One commenter recommended that the SEA be allowed 
flexibility in implementing Sec.  200.63(e)(1), that outlines the 
records an LEA must maintain and submit to the SEA when documenting 
that it has consulted with private school officials.
    Discussion: The Secretary believes that the language in Sec.  
200.63(e) accurately reflects the statute and gives an SEA the 
flexibility needed to implement provisions of this section.
    Changes: None.
    Comment: One commenter requested that Sec.  200.63(e)(2), that 
requires an LEA to report to the SEA that it has consulted private 
school representatives, be amended by adding a provision requiring that 
an LEA indicate the reason why the private school officials did not 
provide affirmation.
    Discussion: The Secretary believes that the proposed regulations 
accurately reflect the NCLB Act. The Secretary assumes, and would 
encourage, that any documentation that an LEA provides to the SEA 
concerning its consultation with private school officials would include 
an explanation about why private school officials did not provide the 
requisite affirmation.
    Changes: None.


Section 200.64 Factors for Determining Equitable Participation of 
Private School Children


    Comment: One commenter asked that the clause ``In the aggregate,'' 
at the beginning of Sec.  200.64(a)(1), concerning equal expenditures, 
be deleted.
    Discussion: The Secretary concurs and believes that this clause was


[[Page 71768]]


included in error. This same clause is contained elsewhere in Sec.  
200.64(a)(1).
    Changes: Section 200.64(a)(1) has been amended to remove ``In the 
aggregate.''
    Comment: One commenter stated that the language concerning equal 
expenditures lacks specificity and could result in confusion. The 
equitable services requirements would not apply to all of the district-
wide activities for which an LEA must reserve funds under Sec.  200.77. 
For example, an LEA would not need to ensure that private school 
students receive equitable services from funds reserved to meet 
transportation costs related to public school choice or to provide 
supplemental services to students in public schools identified as in 
need of improvement. The commenter asked that Sec.  200.64(a)(2) be 
changed to make clear that the equitable services requirement applies 
only to reserved funds that affect services to private school students. 
Another commenter stated that funds reserved under Sec.  200.77 are not 
limited to instructional activities, and that Sec.  200.64(a)(2) should 
not limit the use of the funds only to ``instructional activities.'' In 
order to be consistent with the language in Sec.  200.77, the commenter 
recommended the use of the more inclusive word ``services.''
    Discussion: The Secretary agrees that, where applicable, funds an 
LEA reserves under Sec.  200.77 must be used to provide equitable 
services for private school children. An LEA must also, when reserving 
funds under Sec.  200.77, ensure that it provides instructional and 
related activities for eligible private school children that are 
equitable to activities provided for public elementary or secondary 
school students.
    Changes: Section 200.64(a)(2)(i)(A) is amended to make clear that 
an LEA must provide equitable services to private school students from 
funds it reserves off the top of its allocation if those funds are used 
to provide instructional and related activities to public elementary 
and secondary school students.
    Comment: One commenter recommended that Sec.  200.64(a)(2)(i) be 
changed to specify that the equitable services an LEA must provide 
include ``necessary educational support such as technology and 
interpreters''.
    Discussion: The needs of the private school participants determine 
what Title I services an LEA provides. Technology and interpreters are 
two of many Title I service options available, but may not be what is 
required in all instances.
    Change: None.
    Comment: One commenter stated the language in Sec.  
200.64(a)(2)(i), concerning district-level funds reserved for student 
instructional and related activities, is confusing with regard to how 
an LEA provides equitable services to private school children from 
Title I funds reserved by the LEA for district-wide activities. The 
commenter believes that equitable services should be based on a 
comparison to services and benefits provided to public school students 
rather than on the proportion to the number of private school children 
from low-income families residing in participating attendance areas.
    Discussion: The Secretary believes that, in order to ensure that 
private school children receive an equitable share of services from 
funds an LEA reserves under Sec.  200.77, the amount of funds made 
available from that reserve for equitable services must be 
proportionate to the number of private school children from low-income 
families residing in participating attendance areas. The Secretary 
agrees that this regulatory language needs to be modified in order to 
make this policy clearer.
    Changes: The Secretary has amended proposed Sec.  
200.62(a)(2)(i)(B) to clarify that equitable services must be 
proportionate to the number of private school children from low-income 
families residing in participating public school attendance areas.
    Comment: None.
    Discussion: In giving further consideration to the proposed 
regulations, Departmental staff determined that Sec.  
200.64(b)(2)(iii)(B) needed further clarification concerning the need 
for private school participants to meet the State's student academic 
performance standards. Because a private school's curriculum may not be 
aligned with State standards, it may be inappropriate to expect private 
school participants to meet the same State standards. The Secretary is 
making a clarifying change to give an LEA the flexibility to use 
equivalent standards to measure the academic progress of private school 
participants.
    Changes: The Secretary has made this change.
    Comment: One commenter recommended a technical correction in Sec.  
200.64(b)(3)(i), concerning an LEA's choice to provide services to 
private school children either directly or through a third-party 
contractor, to replace the word ``must'' with the word ``may'' and 
thereby make the language consistent with the statute.
    Discussion: The Secretary concurs with this change.
    Changes: Section 200.64(b)(3)(i) has been amended to make clear 
that an LEA may provide equitable services either directly or through a 
third-party provider.
    Comment: One commenter suggested that Sec.  200.64(b)(3)(ii) of the 
regulations be clarified so that, if an LEA provides services through a 
contract with a third-party provider, the contractor must be 
independent of the private school and of any religious organization.
    Discussion: The Secretary agrees with the recommended change. 
Section 1120(c)(2)(B) of the ESEA requires that a third-party provider 
who provides equitable services to private school students must be 
independent of the private school and of any religious organization and 
that the contractor be under the control and supervision of the LEA.
    Changes: The Secretary has amended Sec.  200.64(b)(3)(ii) to 
include the statutory language.
    Comment: One commenter suggested that Sec.  200.64(b)(4) be changed 
to clarify that timely and meaningful consultation with private school 
officials must take place in accordance with Sec.  200.63 before an LEA 
makes final decisions with respect to providing Title I services to 
eligible private school children.
    Discussion: The Secretary agrees that an LEA must make final 
decisions with respect to the services it will provide to eligible 
private school children only after timely and meaningful consultation 
with private school officials in accordance with Sec.  200.63.
    Changes: Section 200.64(b)(4) has been amended to reflect the 
recommended clarification.


Section 200.65 Determining Equitable Participation of Teachers and 
Families of Participating Private School Children


    Comment: A commenter recommended clarifying Sec.  200.65(a)(1), 
concerning the reservation of funds for parent involvement and 
professional development activities, by inserting the word 
``applicable'' before ``funds''.
    Discussion: The Secretary agrees with this recommendation because 
the equitable services requirements apply to most, but not all, funds 
reserved for professional development and parent involvement 
activities. For example, equitable services for private school teachers 
would not apply to professional development funds an LEA in improvement 
must reserve in order to improve the quality of its schools.
    Changes: The Secretary has made this change.
    Comment: A commenter recommended that Sec.  200.65(a)(1) be changed 
so that an LEA must ensure


[[Page 71769]]


that ``pupil services personnel,'' in addition to teachers who provide 
services to private school children, be involved in professional 
development on an equitable basis.
    Discussion: The requirement for equitable services in section 
1120(a) of the ESEA applies to private school teachers of students 
participating in Title I to improve the achievement of those students. 
To the extent that ``pupil services personnel'' are involved with 
improving the achievement of participating private school students, 
they may participate in professional development activities under Title 
I.
    Changes: None.
    Comment: One commenter did not agree that the amount of funds an 
LEA must make available under Sec.  200.65(a)(1) to ensure equitable 
services to private school children must be based on the proportion of 
private school children from low-income families residing in 
participating school attendance areas. The commenter believed that the 
measure of service equity is more appropriately based on the services 
provided to the teachers and parents of private school students 
compared to services provided to teachers and parents of public school 
students.
    Discussion: The Secretary believes that the best way to ensure that 
the equitable participation of teachers and families of participating 
private school children occurs is to base the amount available for 
those services from the applicable reserve on the proportion of private 
school children from low-income families residing in participating 
public school attendance areas. To make this policy more clear, the 
Secretary has made a clarifying amendment.
    Change: The Secretary has amended Sec.  200.65(a)(2) to clarify 
that the amount of funds available to provide equitable services from 
reserved funds for parent involvement and professional development must 
be proportionate to the number of private school children from low-
income families residing in participating public school attendance 
areas.


Allocations to LEAs


Section 200.70 Allocation of Funds to LEA in General


    Comment: One commenter recommended clarifying the references to 
total population used for determining whether an LEA is a small or 
large LEA in Sec.  200.70(c) and (d) to indicate that this means total 
census population.
    Discussion: The language in the proposed regulations is consistent 
with the statutory language in section 1124(a)(2)(B)(vi)(II) of the 
ESEA, which defines a small LEA as one with a total population of less 
than 20,000. However, the Secretary, in fact, provides States with data 
from the Census Bureau on the total resident population for each LEA in 
order for the SEA to identify large and small LEAs for the purpose of 
redistributing Title I, Part A funds among its small LEAs using 
alternative poverty data. We agree that the commenter's recommendation 
adds clarity. Such a change will make the regulations consistent with 
the Department's current practice of providing States with total census 
population data for each LEA.
    Changes: The Secretary has changed the ``total population'' 
references in Sec. Sec.  200.70(c) and (d) and 200.74(a) to ``total 
census population''.
    Comment: One commenter asked what was meant by the term ``limited 
instances'' used in the preamble to the proposed regulations, which 
stated that Sec.  200.70 establishes the principle that an SEA must 
change the allocations determined by the Department in limited 
instances.
    Discussion: As a general rule, the Department of Education 
determines allocations for LEAs. Sections 200.70 through 200.75 outline 
the specific, limited instances when an SEA must adjust the allocations 
determined by the Department. For example, the list of LEAs that the 
Secretary uses to determine LEA allocations is provided by the Census 
Bureau and is based on the geographic boundaries of LEAs as they 
existed several years ago. Because that list does not match the current 
universe of LEAs in many States, SEAs must adjust the Department's LEA 
allocations to account for school district consolidations, break-ups, 
and boundary changes and to account for the creation of new LEAs (such 
as charter school LEAs) that are legitimately eligible for Title I, 
part A funds. In addition, SEAs must adjust the Department's 
allocations to (1) reserve funds for school improvement, State 
administration, and the State academic achievement awards program; and 
(2) allow, in certain cases, for the use of alternative poverty data to 
redistribute Department-determined Title I allocations among districts 
with fewer than 20,000 total residents.
    Changes: None.


Section 200.72 Procedures for Adjusting Allocations Determined by the 
Secretary To Account for Eligible LEAs not on the Census List


    Comment: One commenter recommended that this section be revised to 
require that an SEA provide final allocations to LEAs no later than 60 
days following the receipt of the final allocation notification from 
the Department.
    Discussion: While the Secretary supports the need for SEAs to 
determine final allocations as quickly as possible, it is sometimes 
impossible for an SEA with a significant number of newly created or 
expanding charter school LEAs to make final allocations within the 60 
day deadline recommended by the commenter. In many cases the poverty 
and enrollment data for the charter school LEAs and the districts from 
which they draw their students are not available until the beginning of 
the school year. The data available at the beginning of the school year 
are often estimates, which the SEA uses to determine preliminary 
allocations. The SEA must adjust these allocations later in the school 
year after it receives actual data in order to determine final LEA 
allocations.
    Changes: None.


Section 200.73 Applicable Hold-Harmless Provisions


    Comment: One commenter believed that the language of this section 
implied that an LEA must meet the eligibility requirements for three of 
the four Title I, part A formulas in order to benefit from the hold-
harmless protection.
    Discussion: For the Basic, Targeted, and Education Finance 
Incentive Grant formulas, Sec.  200.73(d)(1) requires that an LEA be 
eligible under each of those formulas in order for the applicable hold-
harmless provision to apply.
    Changes: The Secretary has amended the language in Sec.  
200.73(d)(1) to clarify that, to benefit from the hold-harmless 
provision under a particular formula, an LEA need only be eligible 
under that formula.


Section 200.75 Special Procedures for Allocating Concentration Grant 
Funds to Small States


    Comment: One commenter raised a concern whether the Concentration 
Grant hold-harmless provision applies to the special procedures that a 
small State may use in allocating those funds to LEAs.
    Discussion: The Concentration Grant hold-harmless provision 
described in Sec.  200.73(d)(2) applies to LEAs in all States. 
Therefore, an SEA must pay an LEA not meeting the eligibility 
thresholds for Concentration Grants its hold-harmless amount for four 
consecutive years. This hold-harmless provision applies to a small 
State that uses the flexibility available to it under section 1124A(d) 
of the ESEA and


[[Page 71770]]


Sec.  200.75 of the regulations when allocating Concentration Grant 
funds to eligible LEAs in which the number or percentage of formula 
children equals or exceeds the Statewide average number or percentage 
of those children.
    Changes: The Secretary has added a reference Sec.  200.75(a)(2)(ii) 
to make clear that the Concentration Grant hold-harmless provision in 
Sec.  200.73(d) applies to small States using the special procedures 
outlined in Sec.  200.75.


Procedures for the Within-District Allocation of LEA Program Funds


Section 200.77 Reservation of Funds by an LEA


    Comment: One commenter asked why there is a provision regarding 
reserving funds for capital expenses since there are no funds 
appropriated for the Capital Expenses program and the authorization for 
that program will expire on September 30, 2003.
    Discussion: Section 200.77(f) of the regulations continues the 
authority for an LEA reserve Title I funds that are reasonable and 
necessary to administer programs for public and private school 
children. An LEA may still use Title I funds it reserves for 
administration to pay for capital expenses associated with providing 
services to private school children even though Congress has 
appropriated no funds specifically for capital expenses in fiscal year 
2002 and the authorization, which governs the use of funds appropriated 
for the program will expire on September 30, 2003.
    Changes: None.
    Comment: One person commented that an LEA should have the 
flexibility to meet the reserve requirements for professional 
development in Sec. Sec.  200.52(a)(3)(iii) and 200.60 from non-Title I 
funds and asked whether the parental involvement reserve can be met 
from non-Title I funds.
    Discussion: In all three instances, the Title I statute requires 
that these reserve requirements be met from Title I funds received by 
the LEA.
    Change: None.


Section 200.78 Allocation of Funds to School Attendance Areas and 
Schools


    Comment: One commenter recommended amending the language in Sec.  
200.78(a)(2)(ii)(B)(1) related to obtaining a poverty count of children 
in private schools through a survey to make it consistent with the 
statute.
    Discussion: In obtaining a count of private school children from 
low-income families for within-district Title I, part A allocation 
purposes, the regulations provide that an LEA could, instead of using 
the same poverty data it uses to count public school children, use 
comparable poverty data from a different source such as a private 
school survey so long as that survey protects the identity of families 
of private school children. In order to be consistent with the language 
in the statute, the Secretary agrees with the language change in Sec.  
200.78(a)(2)(ii)(B)(1) that the commenter suggests. However, in order 
to provide LEAs with the greatest flexibility possible in obtaining 
poverty data for students attending private schools, the Secretary is 
adding language that enables an LEA to use comparable poverty data from 
a different source such as scholarship applications.
    Changes: The Secretary has made the suggested change and added 
further clarifying language noted in the discussion by adding a new 
paragraph (a)(2)(ii)(C) to Sec.  200.78.
    Comment: One commenter recommended changing the language in Sec.  
200.78(a)(2)(iv) to make it consistent with the provisions in Sec.  
200.63 that address district consultation with private school officials 
and reference Sec.  200.78. The commenter believed this change would 
make clearer that an LEA has the final authority to determine the 
method used to calculate the number of private school children from 
low-income families for Title I allocation purposes only after the LEA 
has engaged in timely and meaningful consultation with private school 
officials.
    Discussion: The Secretary agrees that the commenter's proposed 
change makes it clearer that an LEA must engage in timely and 
meaningful consultations with local private school officials before 
making a final decision about the method it will use to determine the 
number of private school children from low-income families who reside 
in participating public school attendance areas. The change would also 
make this provision consistent with the requirements in Sec.  200.63.
    Changes: The Secretary has modified Sec.  200.78(a)(2)(iv) to make 
clear that an LEA must consult with appropriate private school 
officials about the method of collection of poverty data.


Fiscal Requirements


Section 200.79 Exclusion of Supplemental State and Local Funds From 
Supplement, Not Supplant and Comparability Determinations


    Comment: One commenter asked for clarification, in either the 
regulations or guidance, to indicate that the use of Title I funds to 
pay for substantial increases in transportation costs of an LEA 
directly attributable to the public school choice provisions of section 
1116 of the ESEA do not violate supplement, not supplant or 
comparability provisions. Another commenter asked whether an LEA could 
combine State and local funds with Title I, part A funds to pay for 
transportation costs associated with implementing the public school 
choice provision in section 1116 of the ESEA. If an LEA can combine 
State and local funds with Title I funds for transportation costs, the 
commenter further asked whether an LEA will be in compliance with the 
supplement, not supplant requirement even though it is using Title I 
funds to supplement local funds for transportation.
    Discussion: The Secretary will address this issue in guidance. 
Generally, however, an LEA must first determine what its transportation 
costs would be in the absence of Title I. Additional transportation 
costs attributable to the public choice provision of section 1116 of 
ESEA may be met with Title I, part A funds.
    Changes: None.


Subpart C--Migrant Education Program


Section 200.82 Use of Program Funds for Unique Program Function Costs


    Comment: One commenter recommended adding in Sec.  200.82(e) the 
term ``MEP'' to clarify that the comprehensive State plan is for the 
delivery of MEP services.
    Discussion: The Secretary agrees with the suggested editorial 
change.
    Change: Section 200.82(e) has been amended to refer to a 
``comprehensive State plan for MEP service delivery.''
    Comment: Three commenters recommended adding several additional 
items to the list of examples in Sec.  200.82 of ``other administrative 
activities * * * unique to the MEP'' for which an SEA may expend MEP 
funds that it does not reserve for general administration. The 
commenters recommended adding one or more of the following activities: 
parent advisory council activities; advocacy and outreach activities 
for migratory children and their families; planning, operation and 
evaluation of program effectiveness; and services to migratory children 
who are failing, or most at risk of failing, to meet the State's 
academic standards and whose parents do not have a high school diploma 
or its recognized equivalent or who have low levels of literacy.
    Discussion: The Secretary agrees that, under the statute, MEP funds 
can be expended for all of these activities. However, the Secretary 
does not agree that each of these activities constitutes


[[Page 71771]]


the other administrative activities unique to the MEP, or activities 
that are the same or similar to administrative activities that LEAs 
perform under Title I, part A, for which MEP funds not reserved for 
general administration may be expended under Sec.  200.82. Of the 
commenters' suggestions, the Secretary believes that activities 
associated with an SEA's establishment and operation of a State parent 
advisory council, and its evaluation of the effectiveness of the State 
MEP are the appropriate additional examples of those other 
administrative activities that are the subject of Sec.  200.82.
    Change: Section 200.82(g) and (h) has been added to clarify that 
the establishment and implementation of a State parent advisory 
committee and the evaluation of the effectiveness of the State MEP are 
additional examples of other administrative activities, unique to the 
MEP, or are the same or similar to administrative activities that LEAs 
perform under Title I, part A for which an SEA may expend MEP funds 
that are not reserved for general administration.


Section 200.83 Responsibilities of SEAs To Implement Projects Through a 
Comprehensive Needs Assessment and a Comprehensive State Plan for 
Service Delivery


    Comment: None.
    Discussion: In giving further consideration to the proposed 
regulations, Departmental staff determined that Sec.  200.83(a)(3)(ii) 
refers to the ``general educational needs of migratory children'' that 
must be addressed by an SEA's MEP service delivery plan, while Sec.  
200.83(a)(2)(ii) refers to the ``other needs of migratory children'' 
that are to be identified in an SEA's needs assessment. Given that both 
references are intended to refer to the same needs, and that section 
1306(a) of the ESEA provides that these needs are to be ``special 
educational needs of migratory children,'' the Secretary believes that 
it is desirable to improve the clarity of both of these regulations so 
that they reflect special educational needs that an SEA's needs 
assessment must address.
    Change: The ``special educational needs'' of migratory children 
that are identified and addressed through the SEA's comprehensive needs 
assessment and State plan for service delivery are those identified in 
section 1306(b)(1) of the ESEA, i.e., (1) unique needs arising from 
these children's migratory lifestyle, and (2) those needs that must be 
addressed in order to permit these children to participate effectively 
in school. Section 200.83(a)(2)(i) and (a)(3)(i) already provide that 
the SEA's needs assessment and service delivery must address the unique 
needs arising from migratory lifestyle. Section 200.83(a)(2)(ii) and 
(a)(3)(ii) have been revised to clarify that the needs assessment and 
service delivery also must address other needs of migratory children 
that must be met in order for these children to participate effectively 
in school.
    Comment: One commenter recommended the inclusion of additional, 
detailed requirements and examples for carrying out parental 
consultation under Sec.  200.83(b). The commenter proposed adding 
language to this paragraph to require that this consultation include 
(1) interpreter services; (2) notices to parents in a language that the 
parents can understand; taking into account language proficiency and 
literacy levels; (3) the use of non-traditional communications 
vehicles, such as posting notices at churches and other social service 
facilities; and (4) the establishment of networks with other care-
givers who serve the population of migratory workers. The commenter 
stated that providing these examples of communication strategies would 
help ensure more effective communications with the families of 
migratory children.
    Discussion: Section 200.83(b) requires an SEA to develop its MEP 
service delivery plan in consultation with parents. The Secretary 
believes that this level of detail is more appropriate for 
nonregulatory guidance. However, the Secretary does agree that, 
consistent with Sec.  1304(c)(3)(B) of the ESEA, Sec.  200.83(b) should 
clarify that the required parental consultation regarding the SEA's MEP 
service delivery plan must be through a format and language that 
parents understand.
    Change: Section 200.83(b) has been amended to note that 
consultation shall be in a format and language that parents understand.


Section 200.84 Responsibilities of SEAs for Evaluating the 
Effectiveness of the MEP


    Comment: One commenter recommended amending Sec.  200.84 to 
specifically include the use of alternatives to standardized testing 
used with other children when an SEA evaluates the effectiveness of its 
MEP. The commenter suggested that migratory children often cannot be 
assessed through standard or traditional means since standardized 
testing used with other children to determine overall program progress 
is not likely to be valid with the population of migratory children.
    Discussion: The Secretary does not believe the commenter's proposed 
additional language to Sec.  200.84 is needed. The Secretary believes 
that specific details about the methods an SEA might use for 
determining the effectiveness of its MEP are more appropriately 
presented in nonregulatory guidance.
    Change: None.


Subpart D--Prevention and Intervention Programs for Children and Youth 
Who are Neglected, Delinquent, or At-risk of Dropping Out


Section 200.90 Program Definitions


    Comment: One commenter asked that a provision be added to clarify 
that the supplement, not supplant requirement applies to Title I, part 
D, subpart 2.
    Discussion: This fiscal requirement does not apply because NCLB 
does not specifically make the supplement, not supplant requirement 
applicable to programs authorized under part D, Subpart 2 of Title I.
    Changes: None.


Subpart E--General Provisions


Section 200.100 Reservation of Funds for School Improvement, State 
Administration, and the State Academic Achievement Awards Program


    Comment: One commenter stated that the $400,000 cap on the amount a 
small State may reserve for State administration is inadequate.
    Discussion: Section 1004 of the ESEA authorizes an SEA to reserve 
for State administration up to one percent from funds allocated to the 
State under Title I, part A (Grants to LEAs), part C (Migrant 
Education), and part D, Subpart 1 (State Agency Neglected or Delinquent 
Program. The ESEA further provides that if the amount calculated as 
available to be reserved for State administration totals less than 
$400,000, an SEA may reserve up to $400,000. The Department cannot 
increase these limitations through regulations.
    Changes: None.


[FR Doc. 02-30294 Filed 11-25-02; 3:50 pm]

BILLING CODE 4000-01-P