Title IHelping Disadvantaged Children Meet High Standards

SUMMARY: The U.S. Secretary of Education (Secretary) proposes to issue

a single set of regulations implementing the programs under Title I of

the Elementary and Secondary Education Act of 1965, as amended by the

Improving America's Schools Act of 1994. In order to provide maximum

flexibility to grantees implementing the programs under Title I, these

proposed regulations address only those few provisions for which the

Secretary believes rulemaking is absolutely necessary. These proposed

regulations would replace the regulations currently found at 34 CFR

parts 200, 201, 203, 205 and 212.

DATES: Written comments must be received on or before May 31, 1995.

ADDRESSES: All comments for subparts A, B, and D should be addressed to

Mary Jean LeTendre, Director, Compensatory Education Programs, Office

of Elementary and Secondary Education, U.S. Department of Education,

600 Independence Avenue, SW, Portals Building, room 4400, Washington,

DC 20202-6132. The Internet address for Part A comments is:

[email protected]; Part B: Even____S[email protected]; and Part D: Title

[email protected] The fax number for programs under subparts A, B, and D

is (202) 260-7764.

All comments concerning programs under subpart C should be

addressed to Bayla White, Director, Migrant Education Programs, Office

of Elementary and Secondary Education, U.S. Department of Education,

600 Independence Avenue, SW, Portals Building, room 4100, Washington,

DC 20202-6135. The Internet address for programs under subpart C is

Title I--M[email protected]. The fax number for programs under subpart C is

(202) 205-0089.

All comments concerning provisions under subpart E may be addressed

to the addresses above for subparts A or C, depending on the nature of

the comments.

A copy of any comments that concern information collection

requirements should also be sent to the Office of Management and Budget

at the address listed in the Paperwork Reduction Act section of this

preamble.

FOR FURTHER INFORMATION CONTACT: For subparts A and E, Wendy Jo New,

Telephone: (202) 260-0982; for subpart B, Patricia McKee, Telephone:

(202) 260-0991; for subpart D, Paul Brown, Telephone: (202) 260-0976:

Compensatory Education Programs, Office of Elementary and Secondary

Education, U.S. Department of Education, 600 Independence Avenue, SW,

Portals Building, room 4400, Washington, DC 20202-6132.

For subparts C and E, James English, Office of Migrant Education,

Office of Elementary and Secondary Education, U.S. Department of

Education, 600 Independence Avenue, SW, Portals Building, room 4100,

Washington, DC 20202-6135. Telephone: (202) 260-1394.

Individuals who use a telecommunications device for the deaf (TDD)

may call the Federal Information Relay Services (FIRS) at 1-800-877-

8339 between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: The 1994 reauthorization of the Elementary

and Secondary Education Act of 1965 (ESEA) revised extensively Federal

elementary and secondary education programs to help ensure that all

children acquire the knowledge and skills they will need to succeed in

the 21st century. Under the reauthorized ESEA, Federal education

programs for the first time are designed to work together with, rather

than separately from, one another. In addition, rather than operating

apart from the broader education that children receive, the ESEA

reinforces State and community reform efforts geared to challenging

State standards, particularly those initiated or supported by the Goals

2000: Educate America Act. In fact, all of the major ESEA programs are

redesigned to support comprehensive State and local reforms of teaching

and learning and ensure that all children--whatever their background

and whatever school they attend--can reap the benefit of those reforms.

As the largest by far of all ESEA programs, Title I is the

centerpiece of the ESEA's efforts to help the neediest schools and

students reach the same challenging standards expected of all children.

Effective July 1, 1995, the four Title I programs--the basic program in

local educational agencies (LEAs) (Part A), the Even Start Family

Literacy program (Part B), the Migrant Education Program (Part C), and

the Neglected, Delinquent, and At-Risk Youth program (Part D)--are

designed to work together in support of this common purpose. Moreover,

the programs embrace the same fundamental new strategies to help ensure

that the intended beneficiaries are not left behind in State and local

efforts to promote higher standards. These strategies include: a

schoolwide focus on improving teaching and learning, strong program

coordination by LEAs, flexibility at the local level combined with

clear accountability for results, more focused targeting of resources

on the neediest schools, and stronger partnerships between schools and

communities to support higher achievement for all children.

The Secretary proposes to issue one set of regulations for all

Title I programs that is consistent with the U.S. Department of

Education's (Department) new principles for regulating: to regulate

only where absolutely necessary and, when regulating, to promote

flexible approaches to meeting the requirements of the law. Based on

these principles, and in order to give States and localities maximum

flexibility to implement statutory provisions, the Secretary proposes a

regulatory package for Title I that would eliminate regulations for

both Parts B and D of Title I, other than definitions (34 CFR parts 212

and 203 respectively), as well as for the Migrant Education

Coordination Program (34 CFR part 205), and would promulgate few

regulations for Parts A and C of Title I, in addition to those required

as part of negotiated rulemaking.

Negotiated Rulemaking Process

Section 1601(b) of Title I contains procedural requirements that

the Department must follow in developing and issuing regulations to

govern the Title I programs. Under section 1601(b)(1), the Secretary

was required to obtain advice and recommendations of representatives of

Federal, State, and local administrators, parents, teachers, and

members of local boards of education involved with the implementation

and operation of programs under Title I. In accordance with this

requirement, the Department published in the Federal Register on

October 28, 1994 (59 FR 54372-74) a request for advice and

recommendations on regulatory issues under Title I and received over

200 responses. Following the review of these responses, the Secretary

submitted policy options on two key issues--``standards, assessment,

and accountability'' and ``schoolwide programs''--to a negotiated

rulemaking process in accordance with section 1601(b)(3)-(4). Twenty-

four individuals, representing Federal, State, and local

[[Page 21401]] administrators, parents, teachers, and members of local

boards of education from all geographic regions of the United States,

participated in this process. The sessions were held January 11-13 and

18-19, 1995 in Washington, D.C.

The following is a brief synopsis, by topic area, of the major

issues and outcomes of the five-day negotiations of the negotiated

rulemaking committee (``Committee''). Under the Committee's protocols,

``consensus'' meant unanimous agreement on all issues within a

regulatory section. As a result, the Committee reached consensus only

on Secs. 200.42 and 200.43 of these proposed regulations, which clarify

assessment requirements of States and their subgrantees in the Migrant

Education Program. However, agreement was reached on a majority of the

issues, and language reflecting those agreements is reflected in

Secs. 200.1-200.6 concerning standards, assessment, and accountability

and in Sec. 200.8 concerning schoolwide programs of these proposed

regulations.

Standards, Assessment, and Accountability

Part A of Title I aligns instruction, assessment, and

accountability procedures under Title I with high-quality State content

standards and challenging performance standards. Under section 1111 of

Title I, each State must have developed or adopted challenging content

and student performance standards to be used by the State, its LEAs,

and its schools to carry out Part A. If a State has developed

challenging standards for all students, for example, under the Goals

2000: Educate America Act or adopted challenging standards developed by

another entity, the State must use those standards for Part A purposes.

If a State has not developed or adopted content or performance

standards for all students, the State must develop or adopt State

content and student performance standards in at least mathematics and

reading/language arts for children participating under Part A. These

standards must include the same knowledge, skills, and levels of

performance expected of all children.

To track the progress of schools and districts, Part A no longer

mandates a separate Title I testing system; it relies instead on the

State's own assessment system to determine whether students are

progressing toward meeting the challenging State standards. Among other

things, these assessments must be aligned with the State's content and

performance standards; be used for purposes for which they are valid

and reliable; be administered at some time during grades 3-5, 6-9, and

10-12; and involve multiple measures of student performance. If a State

has developed its own assessment system under the Goals 2000: Educate

America Act, for example, or has adopted for its own use assessments

developed by another entity, the State must use those assessments for

Part A purposes. If a State has not developed or adopted its own State

assessment system, the State must develop or adopt a system of

assessments for Part A purposes. Until a State has met the requirements

concerning assessments in section 1111(b) of Title I, the State may use

a transitional set of yearly statewide assessments that will assess the

performance of complex skills and challenging subject matter.

Part A refocuses the review of progress from what is currently an

evaluation of how individual students are performing to an evaluation

of how well schools and LEAs are helping students meet the challenging

standards. Each Title I school and LEA must show ``adequate yearly

progress'' toward enabling children to meet the State's student

performance standards. Adequate yearly progress must be defined by the

State in a manner that results in continuous and substantial yearly

improvement sufficient to achieve the goal of all participating

children meeting the State's proficient and advanced levels of

performance, is sufficiently rigorous to achieve that goal within an

appropriate timeframe, and links progress primarily to performance on

the State's assessment system.

Besides reducing the amount of testing, the changes in Title I

assessments and accountability will help link Title I programs to

broader State reforms. The changes will also support the efforts of

high-poverty schools to raise expectations and enrich their curriculum

and instruction well beyond the basic skills programs that have been

their traditional focus. In drafting the regulations implementing the

statutory provisions on standards, assessment, and accountability, the

goals of the Secretary were to ensure that States develop the same

system of high-quality standards and assessments for all students,

including Title I participants; ensure that States develop effective

accountability systems that promote comprehensive planning and

improvement; and provide maximum flexibility during the transition

period to support ongoing development of standards and assessments.

The following discussion summarizes provisions in the proposed

regulations that reflect the Committee's debate on issues concerning

standards, assessment, and accountability:

1. Section 200.1(b)(1)(i) requires a State plan to provide

``evidence'' that demonstrates the State has developed or adopted

challenging content and student performance standards for all students.

At the suggestion of the Committee, further specification is included

in Sec. 200.1(b)(1)(i)(B) to require that a State's procedure for

setting student performance levels apply recognized professional and

technical knowledge for establishing those levels.

2. Section 200.1(b)(2)(ii)(A) clarifies the timeline for a State to

develop and field test its assessment system. This section also

incorporates the Committee's suggestion that a State be required to

describe in its State plan its ``quality benchmarks, timetables, and

reporting schedule'' for completing the development and field testing

of its assessment system.

3. Section 200.1(b)(2)(iii) requires a State to indicate in its

State plan the languages other than English that are spoken by the

student population participating in Title I and the languages for which

required yearly student assessments are not available and are needed.

The Committee added language requiring the State to include in its

State plan ``a timetable for progress towards the development of these

assessments.''

The Secretary specifically requests comment on

Sec. 200.1(b)(2)(iii), which requires a State to indicate in its State

plan the languages other than English that are spoken by the student

population participating in Title I and the languages for which

required yearly student assessments are not available and are needed.

4. The Committee agreed to include statutory language on capacity

building in Sec. 200.1(b)(4). As a result, this provision requires each

State plan to describe how the SEA will help each LEA and Title I

school, as applicable, develop the capacity to implement the components

of a schoolwide or targeted assistance program and meet its

responsibilities with respect to school improvement. The SEA must also

describe other factors it deems appropriate to provide students an

opportunity to achieve the knowledge and skills embodied in the State's

content standards.

5. Section 1111(b)(2)(B)(ii) of Title I requires that adequate

yearly progress be linked primarily to performance on State assessments

but permits progress to be established ``in part through the use of

other measures.'' At the Committee's suggestion, Sec. 200.3(b)(3)

clarifies that ``other measures'' may be [[Page 21402]] measures ``such

as dropout, retention, and attendance rates.''

6. Section 200.4(b)(3)(i)(A) requires that State assessments be

used for purposes for which they are valid and reliable. There was

considerable debate by the Committee as to whether the proposed

regulations should clarify that State assessments are not required to

meet one standard definition of valid and reliable. Because some

Committee members believed that language to this effect would weaken

the requirement that assessments be valid and reliable, the proposed

regulations do not go beyond the statutory language in section

1111(b)(3)(C) of Title I.

7. Section 200.4(b)(3)(ii) requires a State, if it uses assessment

measures that are not valid and reliable, to include ``sufficient''

information regarding the State's efforts to validate the measures

``and to report the results of those validation studies.'' The

Committee agreed to this language.

8. Section 200.4(c)(1) makes clear that a State that has developed

or adopted assessments for all students in mathematics and reading/

language arts under Goals 2000 or another process must use those

assessments to carry out Part A. By so stating, this provision

clarifies that assessments in mathematics and reading/language arts are

sufficient for accountability purposes under Title I. There was lengthy

debate as to whether Title I schools should also be held accountable

for other subject areas for which a State develops standards and

assessments. Some members of the Committee argued that holding Title I

schools accountable for all subject areas for which standards and

assessments are developed, even though Title I instruction is not

provided in those subject areas, would discourage States from

developing standards and assessments in subjects other than mathematics

and reading/language arts. Other Committee members argued that, if

standards and assessments have been developed in other subjects, Title

I schools should be held to the same expectations that the State places

on all schools. Agreement was not reached on this issue. Even though

the regulations do not require accountability for Part A purposes to be

based on subjects other than mathematics and reading/language arts,

Sec. 200.4(c)(2) was added to make clear that the State must include

students served under Part A in assessments in any other subjects the

State has developed or adopted for all children.

The Secretary specifically invites comments on whether

accountability under Title I should be based on all subject areas for

which a State has developed or adopted standards and assessments for

all children.

9. Section 200.4(d)(1)(ii) has been augmented through agreement by

the Committee to require States that do not yet have assessments that

meet the Title I requirements to develop a timetable and benchmarks,

including reports of validity studies, for completing the development

and field testing of those assessments.

10. Section 200.4(e)(1) requires that transitional assessments

assess the performance of complex skills and challenging subject matter

in at least mathematics and reading/language arts and be administered

at some time during grades 3 through 5, 6 through 9, and 10 through 12.

The Committee agreed with this provision. Section 200.4(e)(2) clarifies

that transitional assessments do not need to meet the other

requirements that apply to final assessments. After considerable

debate, there was not agreement with this provision. Several members of

the Committee dissented, arguing that there would be little

accountability during the transition period if other requirements of

final assessments, such as disaggregation of data and valid and

reliable measures, were not included. On the other hand, most of the

Committee members argued that transitional assessments should not be

encumbered by numerous requirements in order to allow States the

flexibility to develop and test their new assessment systems.

11. The Committee reached consensus on Secs. 200.42 and 200.43

which clarify requirements of States and their subgrantees in the

Migrant Education Program (MEP) relative to assessment and the use of

assessment results for improving their MEP programs and projects. These

sections clarify that, while the State assessments required under

Sec. 200.4 should be used wherever possible, MEP grantees and

subgrantees have the flexibility to use other assessment procedures

when conditions warrant doing so. These sections spell out those

conditions. In any case, assessment results must still be examined and

used for the purpose of improving services to migratory children.

Schoolwide Programs

Section 1114 of Title I authorizes a school with a high

concentration of children from low-income families to use Part A funds

to upgrade the entire educational program in the school. The

reauthorization dramatically expanded eligibility for schoolwide

programs by reducing the poverty threshold a school must meet from 75

percent poverty to 60 percent poverty for the 1995-1996 school year and

to 50 percent poverty in subsequent years. The reauthorization also

made a number of critical changes in the schoolwide program authority

to help ensure that Part A resources are used to stimulate

comprehensive reforms of the entire instructional program provided to

all children in these schools. For example, section 1114 permits a

schoolwide program to combine Part A funds with other State-

administered, non-competitive formula grant programs (other than the

Individuals with Disabilities Education Act) and certain Federal

discretionary grant programs administered by the Department, as well as

with State and local public education funds. In addition, section 1114

requires each schoolwide program to include a number of specific

components. A schoolwide program school, for example, must conduct a

comprehensive needs assessment of the entire school to determine the

performance of its children in relation to the State's standards;

implement schoolwide reform strategies that are based on effective

means of improving the achievement of children and that address the

needs of all children in the school, particularly the needs of children

who are members of the target population of any other Federal education

program that is included in the schoolwide program; use highly

qualified professional staff; provide professional development for

teachers, aides, and other staff; and implement strategies to increase

parental involvement.

The proposed regulations for schoolwide programs are designed to

support comprehensive schoolwide programs that benefit all children in

schools operating these programs. They include provisions that:

emphasize the importance of maximizing the resources available for

schoolwide programs; ensure that Federal funds and services are

integrated in a comprehensive manner to support the very nature of a

schoolwide program; and strike a balance between a school's

responsibility for designing and implementing schoolwide programs and

an LEA's overall responsibility for providing a high quality education

to all students.

The following discussion summarizes provisions in the proposed

regulations that reflect the Committee's debate on issues concerning

schoolwide programs:

1. Section 200.8(a)(1) states that an ``eligible school, in

consultation with its LEA,'' may use Part A funds or services, in

combination with other Federal, State, and local funds it receives, to

[[Page 21403]] operate a schoolwide program. By emphasizing that an

eligible school makes the decision to operate a schoolwide program,

albeit in consultation with its LEA, this language recognizes that a

schoolwide program can be successful only if the school community is

fully behind that decision. One member of the Committee dissented to

this language out of concern that it would abrogate an LEA's ultimate

authority for operating its schools.

2. Section 200.8(b)(1) makes clear that a school may not decide to

operate a schoolwide program unless the LEA has determined that the

school serves a participating attendance area or is a participating

school. The Committee agreed to this clarification.

3. Section 200.8(b)(2)(ii) provides LEAs with the flexibility to

identify areas and schools as eligible for schoolwide program

participation using a measure of poverty that is different from the

poverty measure or measures the LEA uses to identify and rank school

attendance areas for eligibility and participation. The Committee

agreed to include this flexibility in the proposed regulations.

4. Section 200.8(c) emphasizes a school's authority to combine Part

A funds with other Federal education program funds in a schoolwide

program. If a school combines other Federal program funds, the school

is exempt from complying with most statutory or regulatory provisions

of those programs if the intent and purposes of the other programs are

met. One negotiator argued that the regulations should only exempt

schools from complying with specific, limited provisions; otherwise,

the intent and purposes of the programs would be jeopardized. This

negotiator dissented to the proposed language.

5. Section 200.8(c)(2) emphasizes that the authority to combine

funds from other Federal education programs in a schoolwide program

also applies to services provided to the school with those funds. This

provision recognizes that, under most programs, funds may not be

provided directly to schools. Rather, schools may receive services in

the nature of staff or instructional equipment and materials. With the

one dissent noted above, the Committee agreed to include this

provision.

6. Section 200.8(c)(3)(ii)(B)(1) implements section 1306(b) of

Title I. The proposed language requires a school that combines Part C

of Title I funds in its schoolwide program to, ``[i]n consultation with

parents of migratory children or organizations representing those

parents, first address the identified needs of migratory children that

result from the effects of their migratory lifestyle or are needed to

permit migratory children to participate effectively in school''; and

to ``[d]ocument that services to address those needs have been

provided.'' The Committee agreed to this language.

7. Section 200.8(e)(1)(iv)(A) requires that disaggregated

assessment results for a schoolwide program be reported only when a

State's final assessment system is in place and only when those results

are statistically sound. Several Committee members dissented to this

provision, arguing that disaggregated data were essential to assessing

the specific progress of the target populations included in schoolwide

programs. The other Committee members countered, however, that the

transition period should not be encumbered with prescriptive

requirements to preserve States' flexibility to develop new forms of

assessment. Moreover, these members expressed concern that inaccurate

conclusions about the progress of target populations would be drawn

from disaggregated data if those data were not statistically sound.

8. Section 200.8(f)(1) clarifies that a schoolwide program school

is not required to identify particular children as eligible to

participate, document that Federal funds benefit only the intended

beneficiaries of those funds, or demonstrate that particular services

supplement the services regularly provided in the school. This

provision applies both to Part A funds and any other Federal education

funds included in the schoolwide program. It recognizes that the

central purpose of a schoolwide program is to use all available

resources to upgrade the entire instructional program for the benefit

of all children in the school, rather than focus on specific

categorical programs with a singular purpose. One negotiator dissented

to this provision out of concern that the intent and purposes of other

Federal education programs combined in a schoolwide program would be

jeopardized if the school did not have to meet these requirements.

Other Regulations Resulting From Reauthorization Subpart A--Improving

Basic Programs Operated by Local Educational Agencies

In addition to the schoolwide program provisions and the provisions

related to standards, assessment, and accountability, Subpart A also

contains sections on the participation of private school children,

within-State allocations, and within-district allocations.

Participation of private school children. Section 1120 of Title I

continues the requirement that an LEA provide equitable services to

eligible children enrolled in private schools. Because of other changes

in Title I, however, some regulatory provisions are necessary to ensure

that equitable services are provided. For example, section 1113(c) of

Title I requires an LEA to allocate funds to participating school

attendance areas or schools on the basis of the total number of

children from low-income families in each area or school. Section

200.28 of the proposed regulations makes clear that, in calculating the

total number of children from low-income families, an LEA must include

children from low-income families who attend private schools. The LEA

uses the same poverty data, if available, that it uses to count public

school children; however, if the same data are not available,

comparable data collected through alternative means such as a survey

may be used.

Although funds are allocated on the basis of poor children,

Sec. 200.10(b) of the proposed regulations makes clear that, as in

current practice, private school children eligible to be served are

children who reside in a participating public school attendance area

and who have educational needs under section 1115(b) of Title I.

Section 200.11(a) of the proposed regulations implements the equal

expenditure requirement in section 1120(a)(4) of Title I. Under the

proposed regulations, an LEA must reserve the funds generated by poor

private school children who reside in participating public school

attendance areas. In consultation with appropriate private school

officials, the LEA may choose one of two options. The LEA may provide

services to eligible children in a private school with the funds

generated by poor children who attend that school. Alternatively, the

LEA may combine the funds generated by poor private school children in

all participating areas to create a pool of funds. From this pool, the

LEA would provide services to eligible private school children who are

in the greatest educational need of those services. Under this option,

the services provided to eligible children in a particular private

school would not be dependent upon the amount of funds generated by

poor children in the school.

Section 200.16(a)(1) of the proposed regulations makes clear that

an LEA first uses funds it receives for capital expenses to cover

capital expenses it is currently incurring or would incur because of an

expected increase in the number of private school children to be

served. If an LEA can demonstrate that [[Page 21404]] its current needs

for capital expenses have been meet, the LEA may apply to use capital

expense funds to reimburse itself for capital expenses it incurred in

past years for which its has not been reimbursed.

Within-State Allocations

Allocation of funds to LEAs. Sections 200.20 and 200.21 of the

proposed regulations outline general procedures for a State educational

agency (SEA) to use in allocating basic grants, concentration grants,

and targeted grants. Under Section 200.20 an SEA may: (1) Make

subcounty allocations to LEAs based on county allocations determined by

the Secretary (adjusted for amounts reserved by the SEA for State

administration and school improvement); or (2) in the case of basic and

targeted grants only, allocate funds directly to LEAs without regard to

counties when a State has a large number of LEAs that overlap county

boundaries. Any SEA wishing to allocate funds directly to LEAs under

Sec. 200.20(b) must apply to the Secretary for authorization and obtain

approval of the data on the number of children from low-income families

it will use in allocating funds. Unlike Chapter 1, however, an SEA in

this situation is not limited to using the poverty criteria used in the

Federal formula.

Section 200.21(a) requires an SEA to base LEA allocations on the

number of children ages 5 through 17 from low-income families and

children residing in local institutions for neglected children. Section

200.21(b) gives an SEA the flexibility to use the best available data

on the number of children from low-income families. In selecting the

best available data, an SEA may use: (1) The factors in the Federal

formula, which include census poverty data, data on children in

families above poverty receiving payments under the Aid to Families

with Dependent Children (AFDC) program, and data on foster children;

(2) alternative data that an SEA determines best reflect the

distribution of poor children and are adjusted to be equivalent in

proportion to the total number of formula children counted under

section 1124(c) of Title I (excluding neglected or delinquent

children); and (3) data that more accurately target poverty. The SEA,

however, must use the same measure of poverty throughout the State for

basic grants, concentration grants, and targeted grants.

Finally, Sec. 200.20(c) implements the statutory requirement in

situations where an LEA contains two or more counties in their

entirety. Beginning in school year 1995-96, an SEA must treat each

county as if it were a separate LEA when allocating basic,

concentration, and targeted grant funds.

Basic grants. Section 200.22 of the proposed regulations outlines

the procedures for allocating basic grants to LEAs. Unlike Chapter 1,

the Title I statute requires for school year 1995-96 that an LEA have

at least 10 ``formula'' children counted for allocation purposes in

order to qualify. In order to qualify in school year 1996-97 and

beyond, an LEA must have at least 10 formula children and the number of

those children must be greater than two percent of the LEA's total

population aged 5 through 17 years. Under the Chapter 1 regulations, an

LEA was required only to be located in a county with 10 or more formula

children in order to qualify, and the SEA could choose whether to

allocate funds to LEAs with less than ten formula children.

Concentration grants. Section 200.23 (a) and (b) of the proposed

regulations outlines general procedures for allocating concentration

grant funds to LEAs. These procedures are similar to those provided

under Chapter 1. To receive concentration grant funds, an LEA must,

with certain exceptions, be located in whole or in part in a county

that receives a concentration grant allocation from the Secretary. In

addition, the number of ``formula'' children in an LEA counted for

allocation purposes must exceed 6,500 or 15 percent of the LEA's total

population ages 5 through 17. Unlike Chapter 1, however, eligibility

for concentration grants is based on current year counts of formula

children rather than prior year counts. Section 200.23(c) addresses

special situations in which eligible LEAs are located in ineligible

counties, eligible counties have no eligible LEAs, and States receive a

minimum concentration grant. If eligible LEAs are located in ineligible

counties, for example, Sec. 200.23(c)(1) allows an SEA to reserve two

percent or less of the concentration grant funds the State receives to

make direct payments to such LEAs.

Targeted grants. Section 200.24 provides for how an SEA allocates

targeted grant funds to LEAs. Allocations must be based on the same

``formula'' count of children used to allocate basic and concentration

grants. To qualify, an LEA must have at least 10 children who were

counted for purposes of allocating basic grants, and the number of such

children must equal at least five percent of the LEA's total population

ages 5 through 17 years. To determine an LEA's allocation, the SEA must

compute a weighted child count using the weights outlined in the tables

in Sec. 200.24(b) (1) and (2). In weighting each LEA's formula count,

the SEA must take the larger of the percent-weighted count or the

number-weighted count and apply the weights in steps so that only those

children above each threshold receive the higher weight.

Hold-harmless provisions. Section 200.25 outlines the statutory

``hold-harmless'' provisions more clearly. The hold-harmless protection

limits the maximum reduction in an LEA's allocation when compared to

its prior year's allocation and is applied separately for basic grants,

concentration grants, and targeted grants. For school year 1995-96,

each LEA is entitled to receive at least 85 percent of its prior year

amount for basic grants only. For school year 1996-97, each LEA is

entitled to receive 100 percent of its prior year amount for basic and

concentration grants. For school year 1997-98, each LEA is entitled to

receive a percent of its prior year basic and targeted grants (but not

concentration grant) that varies according to the percent the LEA's

number of ``formula'' children is of its total population ages 5

through 17. Section 200.25 also makes clear that an LEA must be

eligible to receive a basic grant, concentration grant, or targeted

grant in order for the respective hold-harmless provisions of this

section to apply.

Within-District Allocations

Sections 200.27 and 200.28 of the proposed regulations contain

procedures for within-district allocation of Part A funds in order to

clarify the changes made in the new act. Unlike Chapter 1 where LEAs

allocated funds to schools based on the number and needs of

educationally deprived children, Title I directs LEAs to allocate funds

to schools on the basis of the number of children from low-income

families. Section 200.27 clarifies what funds an LEA may reserve before

allocating funds to eligible schools. An LEA must, for example, reserve

funds needed to provide comparable services to children in local

institutions for neglected children. Where appropriate, the LEA may

reserve funds to provide services to homeless children, children in

local institutions for delinquent children, and neglected and

delinquent children in community-day school programs. An LEA must also

reserve funds as are reasonable and necessary to meet the parental

involvement requirements in section 1118 of Title I, administer

programs for public and private school children, including

[[Page 21405]] capital expenses, and conduct other authorized

activities.

Section 200.28 clarifies the requirements in section 1113(c) of

Title I concerning how to allocate funds to school attendance areas and

schools. Section 200.28(a) makes clear that an LEA must allocate funds

to areas and schools, in rank order, on the basis of the total number

of children from low-income families in each area or school. In

calculating the total number of low-income children, the LEA must

include children from low-income families attending private schools,

using the same poverty data, if available, as it is using to count

public school children. If the same poverty data are not available,

however, the LEA may use comparable data collected through alternative

means such as a survey.

Under Sec. 200.28(b), an LEA that serves any school below 35

percent poverty must allocate to each participating 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 subpart

2 of Part A. If an LEA serves only areas or schools above 35 percent

poverty, however, it does not need to allocate this minimum per-pupil

amount. Section 200.28(c) makes clear that an LEA is not required to

allocate the same per-pupil amount to each school attendance area and

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.

Subpart B--Title I Even Start Family Literacy Program

The President expects to consolidate the Even Start Family Literacy

program with other Adult Education and Family Literacy programs

beginning in 1996. Statutory provisions are sufficient to govern FY

1995 awards and project operation, without specific program

regulations. Therefore, the Even Start regulations found at 34 CFR Part

212 will be removed. However, in order to focus continuation awards

under the Migrant Education Even Start Program (MEES), authorized under

section 1202(a) of Title I, on migratory children, the Secretary has

determined that it is necessary to include a definition of eligible

MEES participants in Sec. 200.30 of the proposed regulations.

Subpart C--Title I Migrant Education Program

In order to provide the maximum flexibility to the States

implementing the MEP, the proposed MEP regulations contained in

Secs. 200.40-200.45, which would supersede those now contained in 34

CFR Part 201, only address a limited number of specific areas where the

statute's lack of clarity could undermine proper program

administration. These regulatory areas are as follows:

(1) Definitions. Under prior law, the MEP statute required the

Department to maintain the same definitions relating to eligibility to

be counted and served as a migratory child as have existed for nearly

20 years. However, because the new law eliminates this statutory freeze

on amending the MEP eligibility definitions, the Secretary now proposes

to amend the definitions in order to better ensure that those children

who receive MEP services are truly migratory. Specifically, Sec. 200.40

clarifies that, to be a migratory worker, a person must move to obtain

(or try to obtain) temporary or seasonal agricultural or fishing work

as a principal means of livelihood. This change is needed to focus

program services on children of persons with an actual, significant

dependency on migratory agricultural or fishing work--as opposed to

persons who may, from time to time, move across school district lines

to perform agricultural or fishing activities for a short time, but who

have other occupations and so are not truly migratory workers.

(2) Clarifications. In a number of respects, Part C of Title I

contains ambiguous or unclear requirements that these proposed

regulations clarify. In this regard--

(A) Section 200.41 (Use of program funds for unique program

function costs) clarifies that, under the new law, MEP funds can still

be used to carry out functions at the State level that are unique to

the MEP, and provides examples of these functions.

(B) As discussed in the negotiated rulemaking section, Sec. 200.42

(Responsibilities of SEAs and operating agencies for assessing the

effectiveness of the MEP) clarifies that, while MEP grantees shall,

where feasible, use the same assessment measures as are required under

the Title I, Part A program, they have the flexibility to use other

reasonable measures to examine the effectiveness of their MEPs and

projects in those situations where use of the Statewide assessment is

not feasible.

(C) Section 200.43 (Responsibilities of SEAs and operating agencies

for improving services to migratory children) clarifies that, while MEP

grantees and subgrantees are not subject to the specific program

improvement activities required under Title I, Part A, they still have

the basic responsibility to use assessment results to improve the

services they provide to migratory children.

Migrant Education Coordination Program

Section 1308 of Title I authorizes the Secretary, in consultation

with the States, to make grants or enter into contracts with SEA, LEAs

and other entities to improve the interstate and intrastate

coordination of migrant education projects among those agencies. The

Secretary proposes to delete current regulations as unnecessary at this

time. Those regulations primarily contain selection criteria for

awarding new grants that are overly complex for the kinds of grant

competitions that the Department anticipates conducting for fiscal year

1995. The Secretary believes that selection criteria in Part 75 of the

Education Department General Administrative Regulations (EDGAR), or as

would be contained in proposals for specific competitions, should be

used to make discretionary grants for this program.

Subpart D--Prevention and Intervention Programs for Children and Youth

Who Are Neglected, Delinquent, or At-Risk of Dropping Out

Part D, Subpart 1 of Title I provides financial assistance to State

agencies for services to neglected or delinquent children in State-

supported institutions or community-day programs to help those children

meet challenging State content and performance standards. Subpart 2

authorizes SEAs to retain funds generated by children residing in local

institutions for delinquent children under Part A of Title I and make

subgrants to LEAs with high numbers or percentages of those children.

LEAs may use these funds to meet the educational needs of youth in

local institutions for delinquent children and adult correctional

facilities and for dropout prevention programs that serve students at

educational risk. The Secretary proposes to delete the current

regulations in 32 CFR Part 203 governing the State Agency Neglected or

Delinquent Program and issue regulations only to define the count of

eligible children and youth needed to allocate Subpart 1 funds to the

States.

Subpart D specifies and defines the counts of eligible children and

youth needed to allocate Title I, subpart 1 State agency neglected or

delinquent (N or D) funds to the States and defines several terms used

in the Title I, subpart 2 local agency program. The definitions in

Sec. 200.50 are necessary to ensure that the data used by the Secretary

to allocate funds are based on common [[Page 21406]] definitions. For

example, the definition of a regular program of instruction is included

to ensure that the children counted are enrolled in educational

programs involving classroom instruction supported by State funds. The

definitions of institutions for N or D children and youth require that

the average length of stay in the institution be at least 30 days. This

continues current policy and is designed to ensure that the children

counted for allocation purposes are in an institution for a sufficient

length of time so that educational services provided by the institution

can be effective. Section 200.51 further provides for when the number

of N or D children is determined and how that count must be adjusted to

reflect the relative length of the school year.

Subpart E--General

State administration and program improvement. Section 200.60 of the

proposed regulations outlines procedures for how an SEA reserves funds

for State administration and school improvement. When reserving funds

for State administration and school improvement under Part A, an SEA

must ensure that no LEA receives less than its hold-harmless amounts

for basic grants, concentration grants, and targeted grants unless

funds are insufficient to meet the hold-harmless amounts and still

permit the SEA to reserve the full amount for administration and school

improvement. An SEA also must reserve proportionate amounts from each

of the State's basic grant, concentration grant, and targeted grant

allocations. Section 200.61 indicates that those funds reserved for

State administration are to be used for those general administrative

activities that are necessary to carry out any of the Title I programs.

Maintenance of Effort. Section 1120A(a) of Title I allows an LEA to

receive Part A funds for any fiscal year only if the SEA finds that the

LEA has maintained its fiscal effort in accordance with section 14501

of the ESEA--that is, either the combined fiscal effort per student or

the aggregate expenditures of the LEA and the State with respect to the

provision of free public education for the preceding fiscal year was

not less than 90 percent of such combined fiscal effort or aggregate

expenditures for the second preceding fiscal year. Currently, based on

the statutory definition of ``current expenditures'', the Chapter 1

regulations require an SEA to exclude from maintenance of effort

calculations any expenditures made from funds provided under Chapter 1

and Chapter 2 of Title I of the ESEA. The Secretary proposes in

Sec. 200.64(c)(2) to change this provision to exclude any expenditures

made from funds provided by the Federal Government for which an LEA is

required to account to the Federal Government directly or through the

SEA. As a result, an LEA would no longer be responsible for determining

effort with respect to Federal education funds that may decrease from

one year to the next and over which the LEA does not have control.

Supplement, not supplant. Section 1120A(b)(1)(B) of Title I allows,

for the purpose of complying with the supplement, not supplant

requirement, an SEA or LEA to exclude supplemental State and local

funds expended in any eligible school attendance area or school for

programs that meet the requirements of section 1114 or section 1115 of

Title I. Section 200.63(c) clarifies under what conditions a program

supported with State or local supplemental funds will be considered to

meet the requirements of section 1114 or 1115. These conditions also

apply to supplemental State and local funds expended under sections

1113(b)(1)(C) and 1113(c)(2)(B) of Title I.

Executive Order 12866

1. Assessment of Costs and Benefits

These proposed regulations have been reviewed in accordance with

Executive Order 12866. Under the terms of the order, the Secretary has

assessed the potential costs and benefits of this regulatory action.

The potential benefits associated with the proposed regulations are

clear. Because the Secretary has chosen to regulate on very few

statutory provisions, SEAs and LEAs have considerable flexibility in

implementing the provisions of Title I to meet their particular needs

and circumstances. Moreover, the potential costs associated with the

proposed regulations are minimal; they result from specific statutory

requirements or have been determined by the Secretary to be necessary

for administering the Title I programs effectively and efficiently.

Any burdens specifically associated with information collection

requirements, if any, are identified and explained elsewhere in this

preamble under the heading Paperwork Reduction Act of 1980. The

Secretary has also determined that this regulatory action does not

interfere unduly with State and local governments in the exercise of

their governmental functions.

To assist the Department in complying with the specific

requirements of Executive Order 12866, the Secretary invites comments

on whether there may be further opportunities to reduce any potential

costs or increase potential benefits resulting from these proposed

regulations without impeding the effective and efficient administration

of the program.

2. Clarity of the Regulations

Executive Order 12866 requires each Federal agency to write

regulations that are easy to understand.

The Secretary invites comment on how to make these regulations

easier to understand, including answers to questions such as the

following: (1) Are the requirements in the regulations clearly stated?

(2) Do the regulations contain technical terms or other wording that

interfere with the clarity? (3) Does the format of the regulations

(grouping and order of sections, use of headings, paragraphing, etc.)

aid or reduce their clarity? Would the regulations be easier to

understand if they were divided into more (but shorter) sections? (A

``section'' is preceded by the symbol ``Sec. '' and a numbered heading;

for example ``Sec. 200.1 Contents of a State plan.'') (4) Is the

description of the proposed regulations in the ``Supplementary

Information'' section of this preamble helpful in understanding the

proposed regulations? How could this description be more helpful in

making the proposed regulations easier to understand? (5) What else

could the Department do to make the regulations easier to understand?

A copy of any comments that concern whether these proposed

regulations are easy to understand should also be sent to Stanley

Cohen, Regulations Quality Officer, U.S. Department of Education, 600

Independence Avenue, SW. (room 5121, FOB-10), Washington, DC, 20202-

2241.

Regulatory Flexibility Act Certification

The Secretary certifies that these proposed regulations would not

have a significant economic impact on a substantial number of small

entities.

The small entities that would be affected by these proposed

regulations are small LEAs, institutions of higher education, and

public or nonprofit private agencies receiving Federal funds under the

Title I programs. The proposed regulations would not have a significant

economic impact on the small entities affected because the proposed

regulations would not impose excessive regulatory burden or require

unnecessary Federal supervision. The proposed regulations would impose

[[Page 21407]] minimal requirements to ensure the proper expenditure of

program funds.

Paperwork Reduction Act of 1980

Section 1116 (a) and (d) requires LEAs and SEAs, respectively, to

review the progress of Title I participating schools and LEAs to

determine whether they are making adequate progress toward enabling

children to meet the State's student performance standards. Sections

200.5 and 200.6 of the proposed regulations address requirements to

report the disaggregation of data for school and LEA improvement and

for 14,111 respondents, the estimated average annual burden is 564,440

hours.

In order to receive funds for the operation of a schoolwide

program, schools must prepare schoolwide program plans, which is

addressed in Sec. 200.8(e) of the proposed regulations and section

1114(b)(2) of Title I. Preparation of a one-time plan for 24,244

respondents is estimated to total 744,760 burden hours.

To receive its allocation, a State must submit to the Secretary

data on the number of children enrolled in educational programs of

State-operated institutions for N or D children, community day programs

for N or D children, and adult correctional institutions. It must also

submit the October caseload count of children in local institutions for

N or D children. Section 200.51 of the proposed regulations addresses

this collection of data, which is approved under OMB Control Number

1810-0060 and estimates for 52 respondents an average annual burden of

a total of 2,000 hours.

By statute, State educational agencies applying for Title I funds

must submit State plans or applications. The Secretary needs and uses

the information provided in these program plans and applications to

facilitate the Department's oversight of the programs with regard to

the grantees' administration of the programs under the statute and

regulations, and to ensure financial accountability for the Federal

funds. The public reporting burden for the collection of information

for these programs has been submitted to OMB on the separate State plan

and consolidated application packages, including the time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. The public reporting burden for the

collection of information for the Migrant Education Coordination

Program application will be announced when the Department publishes any

notices of proposed priorities for the award of grants under section

1308 of Title I. Section 200.1 of the proposed regulations addresses

what a State plan must contain, with respect to standards and

assessments, for a State to receive its Part A allocation. The State

plan package approved under OMB Control Number 1810-0571 estimates a

one-time burden of 80 hours for each of 52 respondents.

Organizations and individuals desiring to submit comments on these

information collection requirements should direct them to the Office of

Information and Regulatory Affairs, room 10235, New Executive Office

Building, Washington, DC 20503; Attention: Wendy Taylor.

Intergovernmental Review

Grants to SEAs for the MEP and grants to SEAs and LEAs for the

Migrant Education Coordination Program are subject to the requirements

of Executive Order 12372 and the regulations in 34 CFR Part 79. The

objective of the Executive Order is to foster an intergovernmental

partnership and a strengthened federalism by relying on processes

developed by State and local governments for coordination and review of

proposed Federal financial assistance.

In accordance with this order, this document is intended to provide

early notification of the Secretary's specific plans and actions for

these programs.

Invitation To Comment

Interested persons are invited to submit comments and

recommendations regarding these proposed regulations. In particular,

the Secretary invites comments on the following two provisions. The

Secretary invites comments on Sec. 200.1(b)(2)(iii), which requires a

State to indicate in its State plan the languages other than English

that are spoken by the student population participating in Title I and

the languages for which required yearly student assessments are not

available and are needed. The Secretary also invites comments on

whether accountability under Title I should be based on all subject

areas for which a State has developed or adopted standards and

assessments for all children, rather than mathematics and reading/

language arts as stated in Sec. 200.4(c)(1).

All comments submitted in response to these proposed regulations

will be available for public inspection during and after the comment

period, in rooms 4400 (subparts A, B, D, and E) and 4100 (subparts C

and E), Portals Building, 1250 Maryland Avenue, SW., Washington, DC,

between the hours of 8:30 a.m. and 4 p.m., Monday through Friday of

each week except Federal holidays.

List of Subjects in 34 CFR Part 200

Administrative practice and procedure, Adult education, Children,

Coordination, Education, Education of disadvantaged children, Education

of individuals with disabilities, 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: April 4, 1995.

Richard W. Riley,

Secretary of Education.

(Catalog of Federal Domestic Assistance Numbers: 84.010, Improving

Programs Operated by Local Educational Agencies; 84.011, Migrant

Education Basic State Formula Grant Program; 84.013, Prevention and

Intervention Programs for Children and Youth Who Are Neglected,

Delinquent, or At-Risk of Dropping Out; 84.144, Migrant Education

Coordination Program; 84.213, Even Start Family Literacy Program)

The Secretary proposes to amend Title 34 of the Code of Federal

Regulations by removing Parts 201, 203, 205, and 212 and revising Part

200 as follows:

Part 201 [Removed]

1. Part 201 is removed.

Part 203 [Removed]

2. Part 203 is removed.

Part 205 [Removed]

3. Part 205 is removed.

Part 212 [Removed]

4. Part 212 is removed.

5. Part 200 is revised to read as follows:

PART 200--TITLE I--HELPING DISADVANTAGED CHILDREN MEET HIGH

STANDARDS

Subpart A--Improving Basic Programs Operated by Local Educational

Agencies

Standards, Assessment, and Accountability

Sec.

200.1 Contents of a State plan.

200.2 State responsibilities for developing challenging standards.

200.3 Requirements for adequate progress. [[Page 21408]]

200.4 State responsibilities for assessment.

200.5 Requirements for school improvement.

200.6 Requirements for LEA improvement.

200.7 [Reserved]

Schoolwide Programs

200.8 Schoolwide program requirements.

200.9 [Reserved]

Participation of Eligible Children in Private Schools

200.10 Responsibilities for providing services to children in

private schools.

200.11 Factors for determining equitable participation of children

in private schools.

200.12 Requirements to ensure that funds do not benefit a private

school.

200.13 Requirements concerning property, equipment, and supplies

for the benefit of private school children.

200.14 [Reserved]

Capital Expenses

200.15 Payments to SEAs for capital expenses.

200.16 Payments to LEAs for capital expenses.

200.17 Use of LEA payments for capital expenses.

200.18-200.19 [Reserved]

Procedures for the Within-State Allocation of LEA Program Funds

200.20 Allocation of funds to LEAs.

200.21 Determination of the number of children eligible to be

counted.

200.22 Allocation of basic grants.

200.23 Allocation of concentration grants.

200.24 Allocation of targeted grants.

200.25 Applicable hold-harmless provisions.

200.26 [Reserved]

Procedures for the Within-District Allocation of LEA Program Funds

200.27 Reservation of funds by an LEA.

200.28 Allocation of funds to school attendance areas and schools.

200.29 [Reserved]

Subpart B--Even Start Family Literacy Programs

200.30 Migrant Education Even Start program definition.

200.31-200.39 [Reserved]

Subpart C--Migrant Education Program

200.40 Program definitions.

200.41 Use of program funds for unique program function costs.

200.42 Responsibilities of SEAs and operating agencies for

assessing the effectiveness of the MEP.

200.43 Responsibilities of SEAs and operating agencies for

improving services to migratory children.

200.44 Use of MEP funds in schoolwide projects.

200.45 Responsibilities for participation of children in private

schools.

200.46-200.49 [Reserved]

Subpart D--Prevention and Intervention Programs for Children and Youth

Who Are Neglected, Delinquent, or At-Risk of Dropping Out

200.50 Program definitions.

200.51 SEA counts of eligible children.

200.52-200.59 [Reserved]

Subpart E--General Provisions

200.60 Reservation of funds for State administration and school

improvement.

200.61 Use of funds reserved for State administration.

200.62 [Reserved]

200.63 Supplement, not supplant.

200.64 Maintenance of effort.

200.65 Definitions.

200.66-200.69 [Reserved]

Authority: 20 U.S.C. 6301-6514, unless otherwise noted.

Subpart A--Improving Basic Programs Operated by Local Educational

Agencies

Standards, Assessment, and Accountability

Sec. 200.1 Contents of a State plan.

(a) (1) A State that desires to receive a grant under this subpart

shall submit to the Secretary a plan that meets the requirements of

this section.

(2) A State plan must be--

(i) Developed with broad-based consultation throughout the planning

process with local educational agencies (LEAs), teachers, pupil

services personnel, other staff, parents, and administrators, including

principals;

(ii) Developed with substantial involvement of the Committee of

Practitioners established under section 1603(b) of the Elementary and

Secondary Education Act of 1965, as amended (Act), and continue to

involve the Committee in monitoring the plan's implementation; and

(iii) Coordinated with other plans developed under the Act, the

Goals 2000: Educate America Act, and other acts, as appropriate,

consistent with section 14307 of the Act.

(3) In lieu of a State plan under this section, a State may include

programs under this part in a consolidated State plan submitted in

accordance with section 14302 of the Act.

(b) A State plan must address the following:

(1) Challenging standards. The State plan must include--

(i) Evidence that demonstrates that--

(A) The State has developed or adopted challenging content and

student performance standards for all students in accordance with

Sec. 200.2; and

(B) The State's procedure for setting the student performance

levels applies recognized professional and technical knowledge for

establishing the student performance levels; or

(ii) The State's strategy and schedule for developing or adopting

by the beginning of the 1997-1998 school year--

(A) Challenging content and student performance standards for all

students in accordance with Sec. 200.2(b); or

(B) Content and student performance standards for elementary and

secondary school children served under this subpart in accordance with

Sec. 200.2(c), if the State will not have developed or adopted content

and student performance standards for all students by the 1997-1998

school year or does not intend to develop such standards.

(iii) For subjects in which students will be served under this

subpart but for which a State has no standards, the State plan must

describe the State's strategy for ensuring that those students are

taught the same knowledge and skills and held to the same expectations

as are all children.

(2) Assessments. The State plan must--

(i) Demonstrate that the State has developed or adopted a set of

high-quality yearly student assessments, including assessments in at

least mathematics and reading/language arts, in accordance with

Sec. 200.4, that will be used as the primary means of determining the

yearly performance of each school and LEA served under this subpart in

enabling all children participating under this subpart to meet the

State's student performance standards; or

(ii) If a State has not developed or adopted assessments in at

least mathematics and reading/language arts in accordance with

Sec. 200.4--

(A) Describe the State's quality benchmarks, timetables, and

reporting schedule for completing the development and field-testing of

those assessments by the beginning of the 2000-2001 school year; and

(B) Describe the transitional set of yearly statewide assessments

the State will use to assess students' performance in mastering complex

skills and challenging subject matter; and

(iii)(A) Identify the languages other than English that are spoken

by the student population participating under this subpart; and

(B) Indicate the languages for which yearly student assessments

that meet the requirements of this section are not available and are

needed and develop a timetable for progress towards the development of

these assessments.

(3) Adequate yearly progress. The State plan must-- [[Page 21409]]

(i) Demonstrate, based on the assessments described under

Sec. 200.4, what constitutes adequate yearly progress toward enabling

all children to meet the State performance standards of--

(A) Any school served under this subpart; and

(B) Any LEA that receives funds under this subpart; or

(ii) For any year in which a State uses transitional assessments

under Sec. 200.4(e), describe how the State will identify schools under

Sec. 200.5 and LEAs under Sec. 200.6 in accordance with Sec. 200.3.

(4) Capacity building. Each State plan shall describe--

(i) How the State educational agency (SEA) will help each LEA and

school affected by the State plan to develop the capacity to comply

with each of the requirements of sections 1112(c)(1)(D), 1114(b), and

1115(c) of the Act that is applicable to the LEA and school; and

(ii) Other factors the State deems appropriate, which may include

opportunity-to-learn standards or strategies developed under the Goals

2000: Educate America Act, to provide students an opportunity to

achieve the knowledge and skills described in the challenging content

standards developed or adopted by the State.

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

Sec. 200.2 State responsibilities for developing challenging

standards.

(a) Standards in general. (1) A State shall develop or adopt

challenging content and student performance standards that will be used

by the State, its LEAs, and its schools to carry out this subpart.

(2) Standards under this subpart must include--

(i) Challenging content standards in academic subjects that--

(A) Specify what children are expected to know and be able to do;

(B) Contain coherent and rigorous content; and

(C) Encourage the teaching of advanced skills; and

(ii) Challenging student performance standards that--

(A) Are aligned with the State's content standards;

(B) Describe two levels of high performance--proficient and

advanced--that determine how well children are mastering the material

in the State's content standards; and

(C) Describe a third level of performance--partially proficient--to

provide complete information to measure the progress of lower-

performing children toward achieving to the proficient and advanced

levels of performance.

(b) Standards for all children. A State that has developed or

adopted content standards and student performance standards for all

students under Title III of the Goals 2000: Educate America Act or

under another process, or will develop or adopt such standards by the

beginning of the 1997-1998 school year, shall use those standards,

modified, if necessary, to conform with the requirements in paragraph

(a) of this section and Sec. 200.3, to carry out this subpart.

(c) Standards for children served under this subpart. (1) If a

State will not have developed or adopted content and student

performance standards for all students by the beginning of the 1997-

1998 school year, or does not intend to develop those standards, the

State shall develop content and student performance standards for

elementary and secondary school children served under this subpart in

subject areas as determined by the State, but including at least

mathematics and reading/language arts. These standards must--

(i) Include the same knowledge, skills, and levels of performance

expected of all children;

(ii) Meet the requirements in paragraph (a) of this section and

Sec. 200.3; and

(iii) Be developed by the beginning of the 1997-1998 school year.

(2) If a State has not developed content and student performance

standards in mathematics and reading/language arts for elementary and

secondary school children served under this subpart by the beginning of

the 1997-1998 school year, the State shall then adopt a set of

standards in those subjects such as the standards contained in other

State plans the Secretary has approved.

(3) If and when a State develops or adopts standards for all

children, the State shall use those standards to carry out this

subpart.

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

Sec. 200.3 Requirements for adequate progress.

(a) Except as provided in paragraph (c) of this section, each State

shall determine, based on the State assessment system described in

Sec. 200.1, what constitutes adequate yearly progress of--

(1) Any school served under this subpart toward enabling children

to meet the State's student performance standards; and

(2) Any LEA that receives funds under this subpart toward enabling

children in schools served under this subpart to meet the State's

student performance standards.

(b) Adequate yearly progress must be defined in a manner that--

(1) Results in continuous and substantial yearly improvement of

each school and LEA sufficient to achieve the goal of all children

served under this subpart, particularly economically disadvantaged and

limited-English proficient children, meeting the State's proficient and

advanced levels of performance;

(2) Is sufficiently rigorous to achieve that goal within an

appropriate timeframe; and

(3) Links progress primarily to performance on the State's

assessment system under Sec. 200.4, while permitting progress to be

established in part through the use of other measures, such as dropout,

retention, and attendance rates.

(c) For any year in which a State uses transitional assessments

under Sec. 200.4(e), the State shall devise a procedure for identifying

schools under Sec. 200.5 and LEAs under Sec. 200.6 that relies on

accurate information about the continuous and substantial yearly

academic progress of each school and LEA.

(Authority: 20 U.S.C. 6311(b)(2), (7)(B))

Sec. 200.4 State responsibilities for assessment.

(a) Each State shall develop or adopt a set of high-quality yearly

student assessments, including assessments in at least mathematics and

reading/language arts, that will be used as the primary means of

determining the yearly performance of each school and LEA served under

this subpart in enabling all children participating under this subpart

to meet the State's student performance standards.

(b) Assessments under this section must meet the following

requirements:

(1) Be the same assessments used to measure the performance of all

children, if the State measures the performance of all children.

(2)(i) Be aligned with the State's challenging content and student

performance standards; and

(ii) Provide coherent information about student attainment of the

State's content and student performance standards.

(3)(i)(A) Be used for purposes for which the assessments are valid

and reliable; and

(B) Be consistent with relevant, nationally recognized professional

and technical standards for those assessments.

(ii) Assessment measures that do not meet these requirements may be

included as one of the multiple measures if the State includes in its

[[Page 21410]] State plan sufficient information regarding the State's

efforts to validate the measures and to report the results of those

validation studies.

(4) Measure the proficiency of students in the academic subjects in

which a State has adopted challenging content and student performance

standards.

(5) Be administered at some time during--

(i) Grades 3 through 5;

(ii) Grades 6 through 9; and

(iii) Grades 10 through 12.

(6) Involve multiple approaches within an assessment system with

up-to-date measures of student performance, including measures that

assess complex thinking skills and understanding of challenging

content.

(7) Provide for--

(i) Participation in the assessment of all students in the grades

being assessed;

(ii) Reasonable adaptations and accommodations for students with

diverse learning needs necessary to measure the achievement of those

students relative to the State's standards; and

(iii)(A) Inclusion of limited-English proficient students who shall

be assessed, to the extent practicable, in the language and form most

likely to yield accurate and reliable information on what those

students know and can do to determine the students' mastery of skills

in subjects other than English.

(B) To meet this requirement, the State--

(1) Shall make every effort to use or develop linguistically

accessible assessment measures; and

(2) May request assistance from the Secretary if those measures are

needed.

(8) Include, for determining the progress of the LEA only, students

who have attended schools in the LEA for a full academic year, but who

have not attended a single school in the LEA for a full academic year.

(9) Provide individual student interpretive and descriptive reports

that include--

(i) Individual scores; or

(ii) Other information on the attainment of student performance

standards.

(10) Enable results to be disaggregated within each State, LEA, and

school by--

(i) Gender;

(ii) Each major racial and ethnic group;

(iii) English proficiency status;

(iv) Migrant status;

(v) Students with disabilities as compared to students without

disabilities; and

(vi) Economically disadvantaged students as compared to students

who are not economically disadvantaged.

(c)(1) If a State has developed or adopted assessments for all

students in mathematics and reading/language arts under Title III of

the Goals 2000: Educate America Act or under another process, the State

shall use those assessments, modified, if necessary, to conform with

the requirements in paragraph (b) of this section and Sec. 200.3, to

carry out this subpart.

(2) Paragraph (c)(1) of this section does not relieve the State

from including students served under this subpart in assessments in any

other subjects the State has developed or adopted for all children.

(d)(1) Except as provided in paragraph (d)(2) and (3) of this

section, if a State has not developed or adopted assessments in at

least mathematics and reading/language arts that meet the requirements

in paragraph (b) of this section, the State shall--

(i) By the beginning of the 2000-2001 school year, develop those

assessments and field-test them for one year; and

(ii) Develop a timetable and benchmarks, including reports of

validity studies, for completing the development and field testing of

those assessments.

(2) The State may request a one-year extension from the Secretary

to test its new assessments if the State submits a strategy to correct

problems identified in the field testing of its assessments.

(3) If a State has not developed assessments in at least

mathematics and reading/language arts that meet the requirements in

paragraph (b) of this section by the beginning of the 2000-2001 school

year and is denied an extension, the State shall adopt a set of

assessments in those subjects such as assessments contained in the

plans of other States the Secretary has approved.

(e)(1) While a State is developing assessments under paragraph (d)

of this section, the State may propose to use a transitional set of

yearly statewide assessments that will--

(i) Assess the performance of complex skills and challenging

subject matter in at least mathematics and reading/language arts; and

(ii) Be administered at some time during--

(A) Grades 3 through 5;

(B) Grades 6 through 9; and

(C) Grades 10 through 12.

(2) Transitional assessments do not need to meet the other

requirements of this section.

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

Sec. 200.5 Requirements for school improvement.

(a) Local review. (1)(i) Each LEA receiving funds under this

subpart shall review annually the progress of each school served under

this subpart to determine whether the school is meeting or making

adequate progress toward enabling its students to meet the State's

student performance standards described in the State plan.

(ii) An LEA may review a targeted assistance school on the progress

of only those students that have been or are served under this subpart.

(2) In conducting its review, an LEA shall--

(i)(A) Use the State assessments or transitional assessments

described in the State plan; and

(B) Use any additional measures or indicators described in the

LEA's plan; or

(ii) If the State assessments are not conducted in a Title I

school, use other appropriate measures or indicators to review the

school's progress; and

(iii)(A) Disaggregate the results of the review according to the

categories specified in Sec. 200.4(b)(10);

(B) Seek to produce, in schoolwide program schools, statistically

sound results for each category through the use of oversampling or

other means; and

(C) Report disaggregated data to the public only when those data

are statistically sound.

(3) The LEA shall--

(i) Publicize and disseminate to teachers and other staff, parents,

students, the community, and administrators, including principals, the

results of the annual review of all schools served under this subpart

in individual school performance profiles; and

(ii) Provide the results of the annual review to schools served

under this subpart so that the schools can continually refine their

program of instruction to help all children participating under this

subpart meet the State's student performance standards.

(Authority: 20 U.S.C. 6317(a))

Sec. 200.6 Requirements for LEA improvement.

(a) State review. (1)(i) Each SEA shall review annually the

progress of each LEA served under this subpart to determine whether the

schools receiving assistance under this subpart are making adequate

progress toward enabling their students to meet the State's student

performance standards described in the State plan.

(ii) An SEA may review the progress of the schools served by an LEA

only for [[Page 21411]] those students that have been or are being

served under this subpart.

(2) In conducting its review, an SEA shall--

(i) Disaggregate the results of the review according to the

categories specified in Sec. 200.4(b)(10);

(ii) Consider other indicators, if applicable, in accordance with

section 1112(b)(1) of the Act; and

(iii) Report disaggregated data to the public only when those data

are statistically sound.

(3) The SEA shall publicize and disseminate to LEAs, teachers, and

other staff, parents, students, the community, and administrators,

including principals, the results of the State review.

(Authority: 20 U.S.C. 6317(d))

Sec. 200.7 [Reserved]

Schoolwide Programs

Sec. 200.8 Schoolwide program requirements.

(a) General. (1) An eligible school, in consultation with its LEA,

may use funds or services under this subpart, in combination with other

Federal, State, and local funds it receives, to upgrade the entire

educational program in the school to support systemic reform in

accordance with the provisions of this section.

(2)(i) Except as provided in paragraph (a)(2)(ii) of this section,

a school may not start a new schoolwide program until the SEA provides

written information to each LEA that the SEA has established a

statewide system of support and improvement.

(ii) If a school desires to start a schoolwide program prior to the

establishment of a statewide system of support and improvement, the

school shall demonstrate to the LEA that the school has received high-

quality technical assistance and support from other providers of

assistance.

(b) Eligibility for a schoolwide program. A school may operate a

schoolwide program if--

(1) The LEA determines that the school serves a participating

attendance area or is a participating school under section 1113 of the

Act; and

(2)(i) For the initial year of the schoolwide program, the school

meets either of the following criteria:

(A) For the 1995-1996 school year--

(1) The school serves a school attendance area in which not less

than 60 percent of the children are from low-income families; or

(2) Not less than 60 percent of the children enrolled in the school

are from low-income families.

(B) For the 1996-1997 school year and subsequent years, the

percentages of children from low-income families in paragraph

(b)(2)(i)(A) may not be less than 50 percent.

(ii) The LEA may choose to determine the percentage of children

from low-income families under paragraph (b)(2)(i) based on a measure

of poverty that is different from the poverty measure or measures used

by the LEA to identify and rank school attendance areas for eligibility

and participation under this subpart.

(c) Availability of other Federal funds. (1) In addition to funds

under this subpart, a school may use in its schoolwide program Federal

funds under any program administered by the Secretary, except programs

under the Individuals with Disabilities Education Act (IDEA), that is

included on the most recent notice published by the Secretary in the

Federal Register.

(2) For the purposes of this section, the authority to combine

funds from other Federal programs also applies to services provided to

a school with those funds.

(3)(i) Except as provided in paragraph (c)(3)(ii) of this section,

a school that combines funds from any other Federal program

administered by the Secretary in a schoolwide program--

(A) Is not required to meet the statutory or regulatory

requirements of that program applicable at the school level; but

(B) Shall meet the intent and purposes of that program to ensure

that the needs of the intended beneficiaries of that program are

addressed.

(ii)(A) An LEA or a school that chooses to use funds from other

programs shall not be relieved of statutory and regulatory requirements

applicable to those programs relating to--

(1) Health and safety;

(2) Civil rights;

(3) Gender equity;

(4) Participation and involvement of parents and students;

(5) Private school children, teachers, and other educational

personnel;

(6) Maintenance of effort;

(7) Comparability of services;

(8) Use of Federal funds to supplement, not supplant non-Federal

funds in accordance with paragraph (f) (1)(iii) and (2) of this

section; and

(9) Distribution of funds to SEAs and LEAs.

(B) A school operating a schoolwide program shall comply with the

following requirements if it combines funds from these programs in its

schoolwide program:

(1) Migrant education. A school that combines in its schoolwide

program funds received under Part C of Title I of the Act shall--

(A) In consultation with parents of migratory children or

organizations representing those parents, first address the identified

needs of migratory children that result from the effects of their

migratory lifestyle or are needed to permit migratory children to

participate effectively in school; and

(B) Document that services to address those needs have been

provided.

(2) Indian education. A school may combine funds received under

subpart 1 of Part A of Title IX of the Act in its schoolwide program if

the parent committee established by the LEA under section 9114(c)(4) of

the Act approves the inclusion of those funds.

(iii) This paragraph does not relieve--

(A) An LEA from complying with all requirements that do not affect

the operation of a schoolwide program; or

(B) A non-schoolwide program school from complying with all

applicable requirements.

(d) Components of a schoolwide program. A schoolwide program must

include the following components:

(1) A comprehensive needs assessment involving the parties listed

in paragraph (e)(2)(ii) of this section of the entire school that is

based on--

(i) Information on the performance of children in relation to the

State content standards and the State student performance standards

under section 1111(b)(1) of the Act; or

(ii) Until the State develops or adopts standards under section

1111(b)(1) of the Act, an analysis of available data on the achievement

of students in the school.

(2) Schoolwide reform strategies that--

(i) Provide opportunities, based on best knowledge and practice,

for all children in the school to meet the State's proficient and

advanced levels of student performance;

(ii) Are based on effective means of improving the achievement of

children, such as utilizing research-based teaching strategies;

(iii) Use effective instructional strategies that--

(A) Increase the amount and quality of learning time, such as

providing an extended school year and before- and after-school and

summer programs;

(B) Provide an enriched and accelerated curriculum; and

(C) Meet the educational needs of historically underserved

populations;

(iv)(A) Address the needs of all children in the school,

particularly the needs of children who are members of the target

population of any program that is included in the schoolwide program

under paragraph (c) of this section; and [[Page 21412]]

(B) Address how the school will determine if those needs have been

met; and

(v) Are consistent with, and designed to implement, the State and

local improvement plans, if any, approved under Title III of the Goals

2000: Educate America Act.

(3) Instruction by highly qualified professional staff.

(4)(i) Professional development, in accordance with section 1119 of

the Act, for teachers and aides and, where appropriate, principals,

pupil services personnel, other school staff, and parents to enable all

children in the school to meet the State's student performance

standards.

(ii) The school shall devote sufficient resources to effectively

carry out its responsibilities for professional development, either

alone or in consortia with other schools.

(5) Strategies to increase parental involvement, such as family

literacy services.

(6) Strategies in an elementary school for assisting preschool

children in the transition from early childhood programs, such as Head

Start, Even Start, or a State-run preschool program, to the schoolwide

program.

(7) Strategies to involve teachers in the decisions regarding the

use of additional local, high-quality student assessments, if any,

under section 1112(b)(1) of the Act to provide information on, and to

improve, the performance of individual students and the overall

instructional program.

(8)(i) Activities to ensure that students who experience difficulty

mastering any of the standards required by section 1111(b) of the Act

during the school year will be provided effective, timely additional

assistance, which must include

(A) Strategies to ensure that students' difficulties are identified

on a timely basis and to provide sufficient information on which to

base effective assistance;

(B) To the extent the school determines feasible using funds under

this subpart, periodic training for teachers in how to identify those

difficulties and to provide assistance to individual students; and

(C) For any student who has not met those standards, parent-teacher

conferences to discuss--

(1) What the school will do to help the student meet the standards;

(2) What the parents can do to help the student improve the

student's performance; and

(3) Additional assistance that may be available to the student at

the school or elsewhere in the community.

(ii) This provision does not--

(A) Require the school or LEA to develop an individualized

education program (IEP) for each student identified under paragraph

(d)(8) of this section; or

(B) Relieve the school or LEA from the requirement under the IDEA

to develop IEPs for students with disabilities.

(e) Schoolwide program plan. (1) An eligible school that desires to

operate a schoolwide program shall develop, in consultation with the

LEA and its school support team or other technical assistance provider,

a comprehensive plan for reforming the total instructional program in

the school that--

(i) Incorporates the components under paragraph (d) of this

section;

(ii) Describes how the school will use resources under this subpart

and from other sources to implement those components;

(iii) Includes a list of State and local programs and other Federal

programs under paragraph (c) of this section that will be included in

the schoolwide program; and

(iv)(A) If the State has developed or adopted a State assessment

system under section 1111(b)(3) of the Act--

(1) Describes how the school will provide individual student

assessment results, including an interpretation of those results, to

the parents of each child who participates in that assessment; and

(2) Provides for the disaggregation of data on the assessment

results of students and the reporting of those data in accordance with

Sec. 200.5(a); or

(B) If the State has not developed or adopted a State assessment

system under section 1111(b)(3) of the Act, describes the data on the

achievement of students in the school and effective instructional and

school improvement practices on which the plan is based.

(2) The schoolwide program plan must be--

(i) Developed during a one-year period unless--

(A) The LEA, after considering the recommendation of its technical

assistance providers, determines that less time is needed to develop

and implement the schoolwide program; or

(B) The school is operating a schoolwide program under section 1015

of Chapter 1 of Title I of the Act during the 1994-1995 school year, in

which case the school may continue its schoolwide program but shall

amend its current plan or develop a new plan in accordance with this

section during the first year it receives funds under this part;

(ii) Developed with the involvement of the community to be served

and individuals who will carry out the plan, including--

(A) Teachers;

(B) Principals;

(C) Other school staff;

(D) Pupil services personnel, if appropriate;

(E) Parents of students in the school; and

(F) If the plan relates to a secondary school, students from the

school;

(iii) Available to the LEA, parents, and the public;

(iv) Translated, to the extent feasible, into any language that a

significant percentage of the parents of participating children in the

school speak as their primary language; and

(v) If appropriate, developed in coordination with other programs,

including those under the School-to-Work Opportunities Act of 1994, the

Carl D. Perkins Vocational and Applied Technology Education Act, and

the National and Community Service Act of 1990.

(3) The schoolwide program plan remains in effect for the duration

of the school's participation under this section.

(4) A school operating a schoolwide program shall review and revise

its plan, as necessary, to reflect changes in its schoolwide program or

changes to reflect State standards established after the plan was

developed.

(f) Effect of operating a schoolwide program. (1) No school

operating a schoolwide program shall be required to--

(i) Identify particular children under this subpart and under any

other Federal program included under paragraph (c) of this section as

eligible to participate in the schoolwide program;

(ii) Document that funds available under this subpart and any other

Federal program included under paragraph (c) of this section are used

to benefit only the intended beneficiaries of the respective programs;

or

(iii) Demonstrate that the particular services paid for with funds

under this subpart and under any other Federal program included under

paragraph (c) of this section supplement the services regularly

provided in that school.

(2) A school operating a schoolwide program shall use funds

available under this subpart and under any other Federal program

included under paragraph (c) of this section only to supplement the

total amount of funds that would, in the absence of those funds, be

made available from non-Federal sources for that school, including

funds needed to provide services that are required by law for

[[Page 21413]] children with disabilities and children with limited-

English proficiency.

(Authority: 20 U.S.C. 6314, 6396(b))

Sec. 200.9 [Reserved]

Participation of Eligible Children in Private Schools

Sec. 200.10 Responsibilities for providing services to children in

private schools.

(a) An LEA shall, after timely and meaningful consultation with

appropriate private school officials, provide special educational

services or other benefits under this subpart, on an equitable basis,

to eligible children who are enrolled in private elementary and

secondary schools in accordance with the requirements in Secs. 200.11

through 200.17 and section 1120 of the Act.

(b) Eligible private school children are children who--

(1) Reside in a participating school attendance area of the LEA;

and

(2) Meet the criteria in section 1115(b) of the Act.

(3) Among the eligible private school children, the LEA shall

select children to participate in a manner that is consistent with the

provisions in Sec. 200.11.

(Authority: 20 U.S.C. 6315(b); 6321(a))

Sec. 200.11 Factors for determining equitable participation of

children in private schools.

(a) Equal expenditures. (1) Expenditures of funds made available

under this subpart 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 Sec. 200.28.

(2) An LEA shall meet this requirement as follows:

(i) Before determining equal expenditures under paragraph (a)(1) of

this section, the LEA shall reserve, from the LEA's whole allocation,

funds needed to carry out Sec. 200.27.

(ii) The LEA shall reserve the amounts of funds generated by

private school children under Sec. 200.28 and, in consultation with

appropriate private school officials, may--

(A) Combine those amounts 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. 200.28 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 provided to public school

children participating under this subpart.

(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 this 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 those children achieving the

high levels called for by the State's student performance standards.

(3) The LEA shall make the final decisions with respect to the

services to be provided to eligible private school children.

(Authority: 20 U.S.C. 6321(a))

Sec. 200.12 Requirements to ensure that funds do not benefit a private

school.

(a) An LEA shall use funds under this subpart to provide services

that supplement, and in no case supplant, the level of services that

would, in the absence of Title I services, be available to

participating children in private schools.

(b) An LEA shall use funds under this subpart to meet the special

educational needs of participating private school children, but not

for--

(1) The needs of the private school; or

(2) The general needs of children in the private school.

(Authority: 20 U.S.C. 6321(a), 6322(b))

Sec. 200.13 Requirements concerning property, equipment, and supplies

for the benefit of private school children.

(a) A public agency must keep title to and exercise continuing

administrative control of all property, equipment, and supplies that

the public agency acquires with funds under this subpart for the

benefit of eligible private school children.

(b) The public agency may place equipment and supplies in a private

school for the period of time needed for the program.

(c) The public agency shall 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 public agency shall remove equipment and supplies from a

private school if--

(1) The equipment and supplies are no longer needed for Title I

purposes; or

(2) Removal is necessary to avoid unauthorized use of the equipment

or supplies for other than Title I purposes.

(e) No funds under this subpart may be used for repairs, minor

remodeling, or construction of private school facilities.

(f) For the purpose of this section, the term public agency

includes the LEA.

(Authority: 20 U.S.C. 6321(c))

Sec. 200.14 [Reserved]

Capital Expenses

Sec. 200.15 Payments to SEAs for capital expenses.

(a) From the amount appropriated for capital expenses under section

1002(e) of the Act, the Secretary pays a State an amount that bears the

same ratio to the amount appropriated as the number of private school

children in the State who received services under this subpart in the

most recent year for which data satisfactory to the Secretary are

available bears to the total number of private school children served

in that same year in all the States.

(b) The Secretary reallocates funds not used by a State for

purposes of Sec. 200.16 among other States on the basis of their

respective needs.

(Authority: 20 U.S.C. 6321(e)(1))

Sec. 200.16 Payments to LEAs for capital expenses.

(a)(1)(i) An LEA may apply to the SEA for a payment to cover

capital expenses that the LEA, in providing equitable services to

eligible private school children--

(A) Is currently incurring; or

(B) Would incur because of an expected increase in the number of

private school children to be served.

(ii) An LEA may apply for a payment to cover capital expenses it

incurred in prior years for which it has not been reimbursed if the LEA

demonstrates that its current needs for capital expenses have been met.

(2) Capital expenses means only expenditures for noninstructional

goods and services that are incurred as a result of implementation of

alternative delivery systems to comply with the requirements of Aguilar

v. Felton. These expenditures--

(i) Include--

(A) The purchase, lease, and renovation of real and personal

property (including mobile educational units, and leasing of neutral

sites or space);

(B) Insurance and maintenance costs;

(C) Transportation; and

(D) Other comparable goods and services; and [[Page 21414]]

(ii) Do not include the purchase of instructional equipment such as

computers.

(b) An SEA shall distribute funds it receives under Sec. 200.15 to

LEAs that apply on the basis of need.

(Authority: 20 U.S.C. 6321(e))

Sec. 200.17 Use of LEA payments for capital expenses.

(a) Unless an LEA is authorized by the SEA to reimburse itself for

capital expenses incurred in prior years, the LEA shall use payments

received under Sec. 200.16 to cover capital expenses the LEA is

incurring or will incur to maintain or increase the number of private

school children being served.

(b) The LEA may not take the payments received under Sec. 200.16

into account in meeting the requirements in Sec. 200.11(a).

(c) The LEA shall account separately for payments received under

Sec. 200.16.

(Authority: 20 U.S.C. 6321(e)(3))

Sec. 200.18-200.19 [Reserved]

Procedures for the Within-State Allocation of LEA Program Funds

Sec. 200.20 Allocation of funds to LEAs.

(a) Subcounty allocations. (1) Except as provided in paragraph (b)

of this section, Sec. 200.23(c) (1) and (3)(ii), and Sec. 200.25, an

SEA shall allocate the county amounts determined by the Secretary for

basic grants, concentration grants, and targeted grants to each

eligible LEA within the county on the basis of the number of children

counted in Sec. 200.21.

(2) If an LEA overlaps a county boundary, the SEA shall make, on a

proportionate basis, a separate allocation to the LEA from the county

aggregate amount for each county in which the LEA is located, provided

the LEA is eligible for a grant.

(b) Statewide allocations. (1) In any State in which a large number

of LEAs overlap county boundaries, an SEA may apply to the Secretary

for authority to make allocations under basic grants or targeted grants

directly to LEAs without regard to counties.

(2) In its application, the SEA shall--

(i) Identify the data in Sec. 200.21(b) the SEA will use for LEA

allocations; and

(ii) Provide assurances that--

(A) Allocations will be based on the data approved by the Secretary

under this paragraph; and

(B) A procedure has been established through which an LEA

dissatisfied with the determination by the SEA may appeal directly to

the Secretary for a final determination.

(c) LEAs containing two or more counties in their entirety. If an

LEA contains two or more counties in their entirety, the SEA shall

allocate funds under paragraphs (a) and (b) of this section to each

county as if such county were a separate LEA.

(Authority: 20 U.S.C. 6333-6335)

Sec. 200.21 Determination of the number of children eligible to be

counted.

(a) General. An SEA shall count the number of children aged 5-17,

inclusive, from low-income families and the number of children residing

in local institutions for neglected children.

(b) Children from low-income families. (1) An SEA shall count the

number of children from low-income families in the school districts of

the LEAs using the best available data. The SEA shall use the same

measure of low-income throughout the State.

(2) An SEA may use one of the following options to obtain its count

of children from low-income families:

(i) The factors under section 1124(c)(1) of the Act (excluding

children in local institutions for neglected or delinquent children),

which include--

(A) Census data on children in families below the poverty level;

(B) Data on children in families above poverty receiving payments

under the program of Aid to Families with Dependent Children; and

(C) Data on foster children.

(ii) Alternative data that an SEA determines best reflect the

distribution of children from low-income families and that are adjusted

to be equivalent in proportion to the total number of children counted

under section 1124(c) of the Act (excluding children in local

institutions for neglected or delinquent children).

(iii) Data that more accurately reflect the distribution of

poverty.

(c) Children in local institutions for neglected children.

The SEA shall count the number of children ages 5 to 17, inclusive,

in the LEA who resided in a local institution for neglected children--

and were not counted under subpart 1 of Part D of Title I (programs for

neglected or delinquent children operated by State agencies)--for at

least 30 consecutive days, at least one day of which was in the month

of October of the preceding fiscal year.

(Authority: 20 U.S.C. 6333(c))

Sec. 200.22 Allocation of basic grants.

(a) Eligibility. An LEA is eligible for a basic grant if--

(1) In school year 1995-96, there are at least 10 children counted

under Sec. 200.21 in the LEA; and

(2) Beginning in school year 1996-97--

(i) There are at least 10 children counted under Sec. 200.21 in the

LEA; and

(ii) The number of those children is greater than two percent of

the LEA's total population aged 5 to 17 years, inclusive.

(b) Amount of the LEA grant. An SEA shall allocate basic grant

funds to eligible LEAs as provided in Sec. 200.20, except that the SEA

shall apply the hold-harmless provisions described in Sec. 200.25.

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

Sec. 200.23 Allocation of concentration grants.

(a) Eligibility. An LEA is eligible for a concentration grant if--

(1) The LEA is eligible for a basic grant under paragraph

Sec. 200.22(a); and

(2) The number of children counted under Sec. 200.21 in the LEA

exceeds--

(i) 6,500; or

(ii) 15 percent of the LEA's total population ages 5 to 17,

inclusive.

(b) Amount of the grant. (1) Except as provided in paragraph (c) of

this section, an SEA shall allocate a county's concentration grant

funds only to LEAs that--

(i) Lie, in whole or in part, within the county; and

(ii) Meet the eligibility criteria in paragraph (a) of this

section.

(2) An SEA shall allocate concentration grant funds to eligible

LEAs as provided in Sec. 200.20(a), except that the SEA shall apply the

hold-harmless provision described in Sec. 200.25(a).

(c) Exceptions. (1) Eligible LEAs in ineligible counties.

(i) An SEA may reserve not more than two percent of the amount of

concentration grant funds it receives to make direct allocations to

eligible LEAs that are located in counties that do not receive a

concentration grant allocation.

(ii) If an SEA plans to reserve concentration grant funds under

paragraph (c)(1)(i) of this section, the SEA, before allocating any

concentration grant funds under paragraph (b) of this section, shall--

(A) Determine which LEAs located in ineligible counties are

eligible to receive concentration grant funds;

(B) Determine the appropriate amount to be reserved;

(C) Proportionately reduce the amount available for concentration

grants for eligible counties or LEAs to provide the reserved amount,

except that for school year 1996-97 an SEA may not reduce an LEA's

allocation below the hold-harmless amount determined under

Sec. 200.25(a); [[Page 21415]]

(D) Rank order the LEAs eligible for concentration grant funds that

are located in ineligible counties according to the number or

percentage of children counted under Sec. 200.21;

(E) Select in rank order, those LEAs that the SEA plans to provide

concentration grant funds; and

(F) Distribute the reserved funds among the selected LEAs based on

the number of children counted under Sec. 200.21.

(2) Eligible counties with no eligible LEAs. In a county in which

no LEA meets the eligibility criteria in paragraph (a) of this section,

an SEA shall--

(i) Identify those LEAs in which either the number or percentage of

children counted under Sec. 200.21 exceeds the average number or

percentage of those children in the county; and

(ii) Allocate concentration grant funds for the county among the

LEAs identified in paragraph (c)(2)(i) of this section based on the

number of children counted under Sec. 200.21 in each LEA compared to

the number of those children in all those LEAs.

(3) States receiving minimum allocations. In a State that receives

a minimum concentration grant under section 1124A(d) of the Act, the

SEA shall--

(i) Allocate concentration grant funds among LEAs in the State

under paragraphs (a), (b), and (c) (1) and (2) of this section; or

(ii) Without regard to the counties in which the LEAs are located--

(A) Identify those LEAs in which either the number or percentage of

children counted under Sec. 200.21 exceeds the average number or

percentage of those children in the State; and

(B) Allocate concentration grant funds among the LEAs identified in

paragraph (c)(3)(ii)(A) of this section based on the number of children

counted under Sec. 200.21 in each LEA.

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

Sec. 200.24 Allocation of targeted grants.

(a) Eligibility. An LEA is eligible for a targeted grant if--

(1) There are at least 10 children counted under Sec. 200.21 in the

LEA; and

(2) The number of those children is at least five percent of the

LEA's total population ages 5 to 17 years, inclusive.

(b) Weighted child count. In determining an LEA's grant, the SEA

shall compute a weighted child count in accordance with section 1125(c)

of the Act by taking the larger of--

(1) Percent-weighted child count. The number of children counted

under Sec. 200.21 multiplied by the weights shown in the following

table, with the weights applied in a step-wise manner so that only

those children above each weighting threshold receive the higher

weight:

------------------------------------------------------------------------

LEA percentage of children counted under Sec. 200.21 as a

percent of total children ages 5 through 17 Weights

------------------------------------------------------------------------

0 to 14.265%................................................. 1.00

More than 14.265% up to 21.553%.............................. 1.75

More than 21.553% up to 29.223%.............................. 2.50

More than 29.223% up to 36.538%.............................. 3.25

More than 36.538%............................................ 4.00

------------------------------------------------------------------------

or;

(2) Number-weighted child count. The number of children counted

under Sec. 200.21 multiplied by the weights shown in the following

table, with the weights applied in a step-wise manner so that only

those children above each weighting threshold receive the higher

weight:

------------------------------------------------------------------------

LEA number of children counted under Sec. 200.21 Weights

------------------------------------------------------------------------

1 to 575..................................................... 1.0

576 to 1,870................................................. 1.5

1,871 to 6,910............................................... 2.0

6,911 to 42,000.............................................. 2.5

42,001 or more............................................... 3.0

------------------------------------------------------------------------

(c) Amount of LEA grant. An SEA shall allocate targeted grant funds

to eligible LEAs as provided in Sec. 200.20 based on the weighted child

count determined in paragraph (b) of this section, except that the SEA

shall apply the hold-harmless provisions described in Sec. 200.25.

(Authority: 20 U.S.C. 6335)

Sec. 200.25 Applicable hold-harmless provisions.

(a) General. (1) An SEA may not reduce the allocation of an

eligible LEA below the hold-harmless amounts established under section

1122(c) of the Act.

(2) The hold-harmless protection limits the maximum reduction in an

LEA's allocation when compared to the LEA's allocation for the

preceding year.

(3) The hold-harmless shall be applied separately for basic grants,

concentration grants, and targeted grants, but shall be applied for

each grant formula only in those years authorized under section 1122(c)

of the Act, as shown in the table contained in paragraph (a)(4) of this

section.

(4) Under section 1122(c) of the Act, the hold-harmless percentage

varies based on the year and, for school years 1997-98 and beyond,

based on the LEA's number of children counted under Sec. 200.21 as a

percentage of the total number of children ages 5-17, inclusive, in the

LEA, as shown in the following table:

--------------------------------------------------------------------------------------------------------------------------------------------------------

Hold-

School year LEA's Sec. 200.21 children as a percentage of harmless Applicable grant formulas

children ages 5-17, inclusive percentage

--------------------------------------------------------------------------------------------------------------------------------------------------------

1995-96.......................... Not applicable.................................... 85 Basic Grants.

1996-97.......................... Not applicable.................................... 100 Basic Grants and Concentration Grants.

1997-98 and beyond............... 30 or more........................................ 95 Basic Grants and Targeted Grants.

15% or more and less than 30%..................... 90

Less than 15%..................................... 85

--------------------------------------------------------------------------------------------------------------------------------------------------------

(5) For school year 1995-96, the SEA shall compute each LEA's hold-

harmless amount without regard to the amount the LEA received for

delinquent children counted under section 1005 of Chapter 1 of Title I

of the Elementary and Secondary Education Act of 1965 as in effect on

September 30, 1994.

(b) Adjustment for insufficient funds. (1) School year 1995-96. If

the Secretary's allocation for a county is not sufficient to give an

LEA 85 percent of the amount it received for school year 1994-95,

without regard to the amount the LEA received for delinquent children,

the SEA may use funds received under Part D, subpart 2 (local agency

programs) of the Act to bring such LEA up to its hold-harmless amount.

(2) School years 1997-98 and beyond. If the Secretary's allocation

for a county is not sufficient to meet the LEA hold-harmless

requirements of paragraph (a) of this section, the SEA shall reallocate

funds proportionately from all other [[Page 21416]] LEAs in the State

that are receiving funds in excess of the hold-harmless amounts

specified in paragraph (a) of this section.

(c) Eligibility for hold-harmless protection. An LEA must be

eligible for basic grant, concentration grant, and targeted grant funds

in order for the respective provisions in paragraphs (a) and (b) of

this section to apply.

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

Sec. 200.26 [Reserved]

Procedures for the Within-District Allocation of LEA Program Funds

Sec. 200.27 Reservation of funds by an LEA.

Before allocating funds in accordance with Sec. 200.28, an LEA

shall 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) Children in local institutions for neglected children; and

(2) Where appropriate--

(i) Eligible homeless children who do not attend participating

schools, including providing educationally related support services to

children in shelters;

(ii) Children in local institutions for delinquent children; and

(iii) Neglected and delinquent children in community-day school

programs;

(b) Meet the requirements for parental involvement in section

1118(a)(3) of the Act;

(c) Administer programs for public and private school children

under this part, including special capital expenses defined in

Sec. 200.16; and

(d) Conduct other authorized activities such as professional

development, school improvement, and coordinated services.

(Authority: 20 U.S.C. 6313(c)(3), 6317(c), 6319(a)(3), 6320)

Sec. 200.28 Allocation of funds to school attendance areas and

schools.

(a) (1) An LEA shall allocate funds under this subpart to school

attendance areas or schools, identified as eligible and selected to

participate under section 1113 (a) or (b) of the Act, in rank order on

the basis of the total number of children from low-income families in

each area or school.

(2) In calculating the total number of children from low-income

families, the LEA shall include children from low-income families who

attend private schools, using--

(i) The same poverty data, if available, as the LEA uses to count

public school children; or

(ii) If the same data are not available, comparable data collected

through alternative means such as a survey.

(b) (1) Except as provided in paragraphs (b)(2) and (d) of this

section, an LEA shall 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 subpart 2 of Part A of Title I. The LEA shall use the poverty

measure selected by the LEA under section 1113(a)(5) of the Act to

compute the per-pupil amount.

(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. 200.62(c).

(e) If an LEA contains two or more counties in their entirety, the

LEA shall 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), 6333(c)(2))

Sec. 200.29 [Reserved]

Subpart B--Even Start Family Literacy Program

Sec. 200.30 Migrant Education Even Start Program Definition.

Eligible participants under the Migrant Education Even Start

Program (MEES) are those who meet the definitions of a migratory child,

a migratory agricultural worker or a migratory fisher in Sec. 200.40.

(Authority: 20 U.S.C. 6362, 6511)

Secs. 200.31-200.39 [Reserved]

Subpart C--Migrant Education Program

Sec. 200.40 Program definitions.

The following definitions apply to programs and projects operated

under this subpart:

(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 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 has moved 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 resides in a school district

of more than 15,000 square miles, and moves a distance of 20 miles or

more to a [[Page 21417]] temporary residence to engage in a fishing

activity.

(f) Principal means of livelihood means that the agricultural or

fishing activity constitutes an essential part of providing a living

for the worker and his or her family.

(Authority: 20 U.S.C. 6391-6399, 6511)

Sec. 200.41 Use of program funds for unique program function costs.

An SEA may use the funds available from its State Migrant Education

Program to carry out other administrative activities, beyond those

allowable under Sec. 200.61, that are unique to the MEP or that are the

same or similar to those performed by LEAs in the State under subpart

A. 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; and

(e) Development and implementation of a statewide plan for needs

assessment and service delivery.

(Authority: 20 U.S.C. 6392, 6511)

Sec. 200.42 Responsibilities of SEAs and operating agencies for

assessing the effectiveness of the MEP.

(a) Each SEA and operating agency receiving funds under the MEP has

the responsibility to determine the effectiveness of its program and

projects in providing migratory students with the opportunity to meet

the same challenging State content and performance standards, required

under Sec. 200.2, that the State has established for all children.

(b) To determine the effectiveness of its program and projects,

each SEA and operating agency receiving MEP funds shall, wherever

feasible, use the same high-quality yearly student assessments or

transitional assessments that the State establishes for use in meeting

the requirements of Sec. 200.4.

(c) In a project where it is not feasible to use the same student

assessments that are being used to meet the requirements of Sec. 200.4

(e.g., in a summer-only project, or in a project where no migratory

students are enrolled at the time the State-established assessment

takes place), the SEA must ensure that the relevant operating agency

carries out some other reasonable process or processes for examining

the effectiveness of the project.

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

Sec. 200.43 Responsibilities of SEAs and operating agencies for

improving services to migratory children.

While the specific school improvement requirements of section 1116

of the statute do not apply to the MEP, SEAs and local operating

agencies receiving MEP funds shall use the results of the assessments

carried out under Sec. 200.42 to improve the services provided to

migratory children.

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

Sec. 200.44 Use of MEP funds in schoolwide projects.

Funds available under Part C of Title I of the Act may be used in a

schoolwide program subject to the requirements of

Sec. 200.8(c)(3)(ii)(B)(1).

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

Sec. 200.45 Responsibilities for participation of children in private

schools.

An SEA and its operating agencies shall conduct programs and

projects under this subpart in a manner consistent with the basic

requirements of section 1120 of the Act.

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

Secs. 200.46-200.49 [Reserved]

Subpart D--Prevention and Intervention Programs for Children and

Youth Who Are Neglected, Delinquent, or At-Risk of Dropping Out

Sec. 200.50 Program definitions.

(a) The following definitions apply to the programs authorized in

Part D, subparts 1 and 2 of Title I of the Act:

Children and youth means the same as ``children'' as that term is

defined in Sec. 200.65(a).

(b) The following definitions apply to the programs authorized in

Part D, subpart 1 of Title I of the Act:

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 Act:

Immigrant children and youth and Limited English Proficiency have

the same meanings as those terms are defined in section 7501 of the

Act, except that the terms ``individual'' and ``children and youth''

used in those definition 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. 200.40(d).

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

Sec. 200.51 SEA counts of eligible children.

To receive an allocation under Part D, subpart 1 of Title I of the

Act, 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 [[Page 21418]]

(ii) 15 hours per week if in an adult correctional institution.

(2) The State agency shall 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 shall 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 shall 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.

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

Secs. 200.52-200.59 [Reserved]

Subpart E--General Provisions

Sec. 200.60 Reservation of funds for State administration and school

improvement.

(a) State administration. An SEA may reserve for State

administration activities authorized in section 1603 of the Act no more

than--

(1) One percent from each of the amounts allocated to the State or

Outlying Area under section 1002(a), (c), and (d) of the Act; or

(2) (i) $400,000 ($50,000 for the Outlying Areas), whichever is

greater.

(ii) An SEA reserving $400,000 under paragraph (a)(2)(i) of this

section shall reserve proportionate amounts from each of the amounts

allocated to the State or Outlying Area under section 1002 (a), (c),

and (d) of the Act.

(b) School improvement. (1) To carry out school improvement

activities authorized under sections 1116 and 1117 of the Act, an SEA

may reserve no more than .5 percent from each of the amounts allocated

to the State or Outlying Area under section 1002(a), (c), and (d) of

the Act.

(2) (i) An SEA shall have available from funds received under

section 1002(f) of the Act or reserved under paragraph (b)(1) of this

section no less than $200,000 ($25,000 for the Outlying Areas) to carry

out school improvement activities.

(ii)(A) If funds made available for school improvement under

section 1002(f) of the Act do not equal $200,000 ($25,000 for Outlying

Areas), the SEA shall reserve funds in accordance with paragraph (b)(1)

of this section.

(B) If the amount reserved under paragraph (b)(1) when added to

funds received under section 1002(f), does not equal $200,000 ($25,000

for the Outlying Areas), the SEA shall reserve additional funds under

section 1002 (a), (c), and (d) as are necessary to make $200,000

($25,000 for the Outlying Areas) available to the SEA.

(c) Reservation from section 1002(a) funds. In reserving funds for

State administration and school improvement under section 1002(a) of

the Act, an SEA shall--

(1) Reserve proportionate amounts from each of the State's basic

grant, concentration grant, and targeted grant allocations; and

(2) Ensure that from the funds remaining for basic grants,

concentration grants, and targeted grants after reserving funds for

State administration and school improvement, no eligible LEA receives

less than the hold-harmless amounts determined under Sec. 200.25,

except when the amounts remaining are insufficient to pay all LEAs the

hold-harmless amounts provided in Sec. 200.25, the SEA shall ratably

reduce each LEA's hold harmless allocation to the amount available.

(Authority: 20 U.S.C. 6303, 6513(c))

Sec. 200.61 Use of funds reserved for State administration.

An SEA may use any of the funds that it has reserved under

Sec. 200.60(a) to perform general administrative activities necessary

to carry out, at the State level, any of the programs authorized under

Title I of the Act.

(Authority: 20 U.S.C. 6513(c))

Sec. 200.62 [Reserved]

Sec. 200.63 Supplement, not supplant.

(a) Except as provided in paragraph (c) of this section, a grantee

or subgrantee under subparts A, C, or D of this part may use funds

available under these subparts only to supplement the amount of funds

that would be made available, in the absence of funds made available

under subparts A, C, and D from non-Federal sources for the education

of pupils participating in programs assisted under subparts A, C, and D

and in no case may funds available under these subparts be used to

supplant those non-Federal funds.

(b) To meet the requirement in paragraph (a) of this section, a

grantee or subgrantee under subparts A, C, or D is not required to

provide services under subparts A, C, or D through the use of a

particular instructional method or in a particular instructional

setting.

(c) (1) For purposes of determining compliance with paragraph (a)

of this section, a grantee or subgrantee under subparts A or C may

exclude supplemental State and local funds spent in any eligible school

attendance area or eligible school for programs that meet the

requirements of section 1114 or section 1115 of the Act.

(2) A supplemental State or local program will be considered to

meet the requirements of section 1114 if the program--

(i) Is implemented in a school that meets the schoolwide poverty

threshold for eligibility in Sec. 200.8(b);

(ii) Is designed to upgrade the entire educational program in the

school to support students in their achievement toward meeting the

State's challenging student performance standards;

(iii) Is designed to meet the educational needs of all children in

the school, particularly the needs of children who are failing, or most

at risk of failing, to meet the State's challenging student performance

standards; and

(iv) Uses the State's system of assessment to review the

effectiveness of the program.

(3) A supplemental State or local program will be considered to

meet the requirements of section 1115 if the program--

(i) Serves only children who are failing, or most at risk of

failing, to meet the State's challenging student performance standards;

(ii) Provides supplementary services designed to meet the special

educational needs of the children who are participating to support

their achievement toward meeting the State's student performance

standards that all children are expected to meet; and

(iii) Uses the State's system of assessment to review the

effectiveness of the program.

(4) These conditions also apply to supplemental State and local

funds expended under sections 1113(b)(1)(C) and 1113(c)(2)(B) of the

Act.

(Authority: 20 U.S.C. 6322(b))

Sec. 200.64 Maintenance of effort.

(a) General. An LEA receiving funds under subparts A or C may

receive its full allocation of funds under subparts A and C if it finds

that either the combined fiscal effort per student or the aggregate

expenditures of State and local funds with respect to the provision of

free public education in the LEA for the preceding fiscal year was not

less than 90 percent of combined fiscal effort per student or the

aggregate [[Page 21419]] expenditures for the second preceding fiscal

year.

(b) Meaning of ``preceding fiscal year''. For purposes of

determining maintenance of effort, the ``preceding fiscal year'' is the

Federal fiscal year or the 12-month fiscal period most commonly used in

a State for official reporting purposes prior to the beginning of the

Federal fiscal year in which funds are available.

Example: For funds first made available on July 1, 1995, if a

State is using the Federal fiscal year, the ``preceding fiscal

year'' is Federal fiscal year 1994 (which began on October 1, 1993)

and the ``second preceding fiscal year'' is Federal fiscal year 1993

(which began on October 1, 1992). If a State is using a fiscal year

that begins on July 1, 1995, the ``preceding fiscal year'' is the

12-month period ending on June 30, 1994, and the ``second preceding

fiscal year, is the period ending on June 30, 1993.

(c) Expenditures. (1) To be considered. In determining an LEA's

compliance with the maintenance of effort requirement, the SEA shall

consider the LEA's expenditures from State and local funds for free

public education. These include expenditures for administration,

instruction, attendance and health services, pupil transportation

services, operation and maintenance of plant, fixed charges, and net

expenditures to cover deficits for food services and student body

activities.

(2) Not to be considered. The SEA shall not consider the following

expenditures in determining an LEA's compliance with the maintenance of

effort requirement:

(i) Any expenditures for community services, capital outlay, and

debt service; and

(ii) Any expenditures made from funds provided by the Federal

Government for which the LEA is required to account to the Federal

Government directly or through the SEA.

(Authority: 20 U.S.C. 6322(a))

Sec. 200.65 Definitions.

The following definitions apply to programs and projects 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.

(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.

(c) Preschool children means children who are--

(1) Below the age and grade level at which the agency provides free

public education; and

(2) Of an age at which they can benefit from an organized

instructional program provided in a school or educational setting.

(Authority: 20 U.S.C. 6315, 6511)

Secs. 200.66-200.69 [Reserved]

[FR Doc. 95-10663 Filed 4-28-95; 8:45 am]

BILLING CODE 4000-01-P