General Provisions, Elementary and Secondary Education Act

SUMMARY: The U.S. Secretary of Education (the Secretary) issues final

general regulations governing programs under the Elementary and

Secondary Education Act of 1965, as amended by the Improving America's

Schools Act of 1994 (the ``Elementary and Secondary Education Act'',

``ESEA'' or the ``Act''). These regulations implement several

provisions in Title XIV (General Provisions) of the Act. These

regulations generally govern all programs under the Act, and establish

uniform provisions to minimize burdensome differences in implementing

similar statutory provisions in individual programs.

The areas that are covered by these regulations for ESEA programs

are: Other applicable regulations; priorities for empowerment zones or

enterprise communities in discretionary grants; the consolidation of

State and local administrative funds; maintenance of effort; services

to private school children and teachers; and complaint procedures. In

addition, these final regulations provide further flexibility to States

under Title III of the Goals 2000: Educate America Act.

EFFECTIVE DATES: These regulations take effect on June 23, 1997.

COMPLIANCE: However, affected parties do not have to comply with the

information requirements in 299.11(d) until the Department of Education

publishes in the Federal Register the control numbers assigned by the

Office of Management and Budget (OMB) to these information collection

requirements. Publication of the control numbers notifies the public

that OMB has approved these information requirements under the

Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: For further information, please

contact Delores Warner, Telephone: (202) 260-1941. Individuals who use

a telecommunications device for the deaf (TDD) may call the Federal

Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8

p.m., Eastern time, Monday through Friday. Internet:

Delores__W[email protected]

SUPPLEMENTARY INFORMATION: On October 20, 1994, the President signed

into law the Improving America's Schools Act of 1994 (IASA) (Pub. L.

103-382). The IASA reauthorizes and fundamentally changes the ESEA,

redesigning its programs so that they work together to support high-

quality teaching and learning to help all children learn challenging

material in academic areas and acquire the knowledge and skills they

will need to succeed in the 21st century.

The reauthorized ESEA, including Title XIV, is designed to make it

easier for programs to work with, rather than separately from, one

another. In addition, the Act fosters the coordination of ESEA programs

with the broader education services that children receive. For example,

the reauthorized Act supports State and community reform efforts geared

to challenging State academic standards, particularly those initiated

or supported by the Goals 2000: Educate America Act.

The new programs are also designed to target funds to areas,

schools or students with the greatest needs for assistance, and to

support State and local efforts at broader educational reform. At the

same time they reduce burdens and provide for needed flexibility.

Generally, in implementing the Act, the Department is issuing

regulations only where absolutely necessary, or to provide increased

flexibility. The regulations in Part 299 are consistent with this

approach and are intended to provide support to educators at the State

and local levels in their implementation of provisions in Title XIV and

of the Act as a whole. Title XIV contains provisions that provide for

flexibility; promote coordinated program services; authorize waivers of

certain provisions to increase the quality of instruction or improve

academic performance; authorize consolidated State and local plans and

applications and consolidation of State and local administrative funds;

and establish uniform provisions applicable to programs authorized in

the ESEA.

Most of the provisions of Title XIV are not the subject of

regulations. The Department has issued, separately from this

regulation, non-binding guidance to help grantees better understand and

implement a number of Title XIV provisions such as State consolidated

plans (section 14302 of the Act), waivers (section 14401 of the Act),

and the Gun-Free Schools Act (sections 14601-14603 of the Act). Copies

of these guidance packages are available from Delores Warner, U.S.

Department of Education, 1250 Maryland Avenue S.W., Room 4000, Portals

Building, Washington, DC 20202-6110. The Department is currently

preparing additional non-binding guidance addressing certain other

Title XIV provisions.

On March 26, 1996, the Secretary published a notice of proposed

rulemaking (NPRM) for Title XIV in the Federal Register (61 FR 13324).

The preamble to the NPRM included a discussion of the provisions

enacted by Congress that were addressed in the NPRM.

Analysis of Comments

In response to the Secretary's invitation to comment in the NPRM,

the Department received nine letters from State and local officials and

various organizations. Most of the letters contained multiple comments.

An analysis of the comments and the Secretary's responses to those

comments is presented below.

In developing these final regulations, the Secretary has considered

these comments, balancing the concerns of State and local school

officials, parents, and others with the statutory purposes of Title XIV

and the needs of the students, parents, and teachers to be served. In

addition, the Secretary took into account the principle of only

regulating where absolutely necessary. As a result of considering all

of these factors, the Department has made several substantive changes

to the regulations. Several clarifying and technical changes were also

made to the regulations.

Subpart A--Purpose and Applicability

Section 299.2 What General Administrative Regulations Apply to ESEA

Programs?

Comment: None.

Discussion: In reviewing the notice of proposed rulemaking, the

Department was concerned that it be clear that the three standards of

accountability that alternative State fiscal and administrative

provisions have to meet under the section, are adequate to ensure that

program costs are allocable to a particular ``cost objective.'' See OMB

circular A-87, Attachment A subsection C.3. The three standards are

that State provisions must ensure that (1) funds are used in compliance

with all applicable Federal provisions, (2) costs are reasonable and

necessary for operating these programs, and (3) funds are not to be

used for general expenses required to carry out other responsibilities

of a State or its subrecipients.

The Department has concluded that the three standards are

sufficient and, in particular, to meet the first of the three

standards, alternative State provisions must, among other things,

ensure that

[[Page 28249]]

costs are allocable to a particular cost objective. Therefore, there is

no need to add a specific additional standard on the allocability of

costs, but the Department has added a clarifying note after Sec. 299.2.

Change: The Department has added a clarifying note after

Sec. 299.2.

Subpart B--Selection Criteria

Section 299.3 What Priority May the Secretary Establish for Activities

in an Empowerment Zone or Enterprise Community?

Comment: One commenter stated that establishing a priority in

discretionary grants for Empowerment Zones or Enterprise Communities

(EZ/EC) gives an ``unfair competitive preference'' to EZ/EC communities

that already receive preferential consideration in several other

discretionary grant programs. The commenter believes that preferential

treatment of one set of identified applicants negates the fairness of

discretionary grant competitions.

Discussion: The Department often establishes priorities in grant

competitions. Establishment of a priority does not eliminate the

fairness or the competitive nature of a grant competition. For example,

even when a ``competitive preference'' is given, a high quality

application that addresses the other published criteria thoroughly may

more likely be funded than an applicant qualifying for an EZ/EC

preference that files a poorer quality application that does not

address the other criteria well. Additionally, the use of the proposed

priority is discretionary.

As a general matter, the Department believes that the general

purposes of the EZ/EC communities are appropriate to support through a

priority in certain competitions. The EZ/EC communities are

characterized by pervasive poverty, unemployment, and general distress,

and are implementing locally designed strategies for building healthy,

safe and economically vibrant communities with limited resources. Thus,

in certain competitions it will be appropriate to address greatest

needs by concentrating limited resources on an applicant that serves an

EZ/EC community.

Change: None.

Subpart C--Consolidation of State and Local Administrative Funds

Section 299.4(a) What Requirements Apply to the Consolidation of State

and Local Administrative Funds?

Comment: One commenter, representing a State educational agency

(SEA), recommended that regulatory language be added that specifically

states that ``program funds'' may not be consolidated. The commenter

believes that the specific statement would assist local educational

agencies (LEAs).

Discussion: Section 14203 of the ESEA, the provision of law that

the regulation implements, clearly applies only to the portion of

program funds that may be used for administration. Therefore, it is not

necessary to provide more detailed regulations on this point. Section

14203 requires that SEAs, in collaboration with LEAs in the State,

establish procedures for responding to requests from LEAs to

consolidate administrative funds, and for establishing limitations on

the amount of funds that may be used for administration on a

consolidated basis. As long as the State establishes reasonable

provisions, including that only reasonable and necessary expenses of

administering the programs properly can be incurred, the State has

flexibility in establishing procedures. To the extent that LEAs have

questions about these matters, SEAs have the authority to issue

regulations, guidance, and procedures to address them.

Change: None.

Comment: One commenter said that the regulations would go beyond

the language of the Act by specifying when and if a State can

consolidate administrative funds by adding the reference to ``for

administrative purposes.'' The commenter believes that it will be

difficult to define ``administrative funds''. The commenter asks the

Secretary to let the wording of the statute stand and eliminate the

reference to ``for administrative purposes.''

Discussion: The Department believes that the regulatory language is

consistent with the intent of section 14201 since this section concerns

the administration of programs. The intent of the provision is to

permit only SEAs with sufficient funding to support their

administrative activities to consolidate ESEA administrative funds.

Change: None.

Subpart D--Fiscal Requirements

Section 299.5 What Maintenance of Effort Requirements Apply to ESEA

Programs?

Comments: One commenter agreed with the proposed maintenance of

effort provisions, especially with regard to the Title I program. The

commenter felt that the maintenance of effort regulations are clearly

stated, easy to understand, and explicit about costs that may or may

not be included in calculations. The commenter also stated that

requiring a level of commitment from local school districts will ensure

that Title I funds benefit the students for whom they were allocated.

Discussion: None.

Change: Because Sec. 299.5 applies to Title I, these regulations

remove the existing Title I--specific maintenance of effort regulations

in 34 CFR 200.64.

Subpart E--Services to Private School Students and Teachers

Section 299.6 What Are the Responsibilities for Providing Services to

Children and Teachers in Private Schools?

Comment: Two commenters asked that the term ``meaningful

consultation'' be clarified. One commenter was concerned that the term

may not mean the same thing to public school administrators as it does

to private school representatives. The second commenter was concerned

that the provisions of the Education Department General Administrative

Regulations (EDGAR) pertaining to consultation no longer apply. One of

the commenters also noted that ``meaningful consultation'' is, however,

defined in the statute in section 14503(c) of Title XIV.

Discussion: Section 14503(c) of ESEA contains specific elements of

``meaningful consultation,'' and it is not necessary to restate them in

the regulations. While the EDGAR provisions on consultation are no

longer applicable to these programs, the Title XIV statutory provisions

regarding consultation are modeled after the EDGAR provisions, so that

consultation requirements have not been diminished.

Change: None.

Comment: One commenter expressed a concern that Sec. 299.6(c) makes

the private school participation provisions in EDGAR not applicable to

covered programs. Of particular interest to this commenter is

Sec. 76.659 of the EDGAR regulations, which permits publicly funded

personnel to provide services in other than public facilities. The

commenter recommends that the EDGAR regulation be incorporated in its

entirety into Subpart E of these regulations.

Discussion: Nothing in Sec. 299.6 precludes publicly-funded

personnel, in appropriate circumstances, from providing services in

non-public settings. The level of detail suggested by the commenter is

not necessary for this regulation. The Department will consider whether

further nonregulatory guidance on this issue is necessary.

Change: None.

[[Page 28250]]

Section 299.7 What are the Factors for Determining Equitable

Participation of Children and Teachers in Private Schools?

Comment: One commenter asked for further explanation of the term

``equitable basis.'' The commenter wanted it made clear that LEAs must

subtract administrative expenses before making an equitable

distribution of the remaining funds.

Discussion: The Secretary believes that, as drafted,

Sec. 299.7(a)(2) already indicates clearly that LEAs first must take

administrative expenses from the total allocation of program funds

before determining ``equal expenditures.''

Change: None.

Comment: One commenter called for more clarification of the phrase

``taking into account the number and educational needs of those

children and their teachers * * *,'' and ``other educational

personnel'' in Sec. 299.7(a)(1). Another commenter asked for more

specific definitions of ``benefits'' and ``special needs'' as used in

Sec. 299.7(c). All of these comments raise concern about the potential

for variations in interpretation at the LEA level.

Discussion: Section 299.7(b)(3) makes clear that an agency or

consortium of agencies, in consultation with private school officials,

makes the final determination as to what services shall be provided to

private school children. If, after timely and meaningful consultation,

the agency or consortium decides that private school children need

services that are different from those provided to public school

children, Sec. 299.7(c) requires them to provide those different

services. The Secretary believes that decisions about equitable

services are best made at the local level after meaningful consultation

as described in the statute, and that detailed regulations are

unnecessary.

Change: None.

Comment: One commenter suggested that this section would require an

LEA to assess the specific needs and educational progress of eligible

private school children and teachers. The commenter believes that such

an assessment would be difficult, unworkable, burdensome and viewed by

``private school operators'' with ``hostility'' as an intrusion into

their operations.

Discussion: The Secretary believes that, through meaningful

consultation, the LEA can work cooperatively with private school

representatives to acquire adequate information to make the types of

determinations required by this section. It is in the interest of

private school representatives and the LEA to work in a cooperative

manner to develop plans that ensure equitable services to meet the

needs of private school children and their teachers.

Change: None.

Section 299.8 What are the Requirements to Ensure That Funds do not

Benefit a Private School?

Comment: One commenter observed that this section does not contain

a particular method for determining compliance with the section. The

commenter believes that the lack of specific procedures will cause

confusion and the expenditure of time and effort by LEAs in attempting

to demonstrate to auditors and program monitors a district's compliance

with this regulation. The commenter suggested deleting the section.

Discussion: The Secretary believes that, by using meaningful

consultation and reasonable methods of administrative oversight, an LEA

will be able to develop a relatively simple process for ensuring

compliance with this section. This provision is similar to 34 CFR

76.658. The Secretary is reluctant to establish more specific

requirements and procedures that may or may not be appropriate to fit

particular local circumstances.

Change: None.

Section 299.9 What are the Requirements Concerning Property,

Equipment, and Supplies for the Benefit of Private School Children and

Teachers?

Comment: One commenter expressed a concern that the wording of this

section is too broad and asked for greater specificity, particularly

exempting ``consumable'' products from the requirement.

Discussion: These requirements are the same as those established

for the Title I, Part A program at 34 CFR 200.13. There is no reason

for treating ``consumable'' products differently from other supplies.

Change: None.

Subpart F--Complaint Procedures

Section 299.10 What Complaint Procedures Shall an SEA Adopt?

Comment: One commenter asked that the provision cover Title VII and

the Bilingual Education Act. Three commenters asked that this provision

be extended to cover other programs, outside of ESEA (e.g., the Carl D.

Perkins Vocational and Applied Technology Education Act, the McKinney

Homeless Assistance Act, the School to Work Opportunities Act, or Goals

2000), in addition to those listed in paragraph (b).

Discussion: The purpose of this subpart is to give the SEA the

responsibility to resolve complaints where the SEA has administrative

responsibilities for how a subgrantee implements the program. Because

the Bilingual Education Act in Title VII is a discretionary grant

program administered primarily at the LEA and Federal levels, rather

than by the SEA, it is not appropriate to have SEAs establish and

administer a complaint procedure. Part C of Title VII (Emergency

Immigrant Education), which is State-administered, has been added to

the list of covered programs. Additionally, language has been added to

clarify that these procedures apply only to the State-administered

portions of the Even Start programs.

Because Title XIV of ESEA, the primary subject of these

regulations, applies only to programs in ESEA, these regulations were

designed to fit the needs of the programs in ESEA. Once the Department

has experience with the implementation of these regulations, we will

consider whether they should be extended to other programs.

Change: One program has been added to the list of applicable

programs, and language has been added to clarify that these procedures

apply only to the State-administered portions of the Even Start

programs.

Section 299.11 What Are Included in the Complaint Procedures?

Comment: Several commenters suggested that the regulations be more

specific. They suggested that the regulations require the provision of

specific information to parents and LEAs; include minimum time limits

for resolving a complaint, and require a written decision to resolve

the complaint. One commenter suggested that the regulations indicate

more clearly that they apply to complaints about services to private

school students as well as other matters.

Some commenters suggested that parents of eligible children be

given notice that complaint procedures exist, and be provided advice on

how to file complaints. A commenter further recommended that the

procedures be made available in languages other than English, as

appropriate.

Discussion: These regulations balance the flexibility of ESEA and

the principle of regulating only when absolutely necessary with the

need in certain cases to establish minimum requirements to ensure that

the purposes of the statute are met. Generally, the level of detail

that these commenters suggest be included in the regulations on

complaint procedures goes beyond what

[[Page 28251]]

the Secretary considers absolutely necessary for these programs.

Moreover, these matters are best left to the SEA to address after

taking into account its particular circumstances. The Secretary does

not think it is appropriate to prescribe further detailed

specifications for the procedures. For example, although the Secretary

believes that a reasonable period of time for hearing and resolving a

complaint would generally be 60 to 90 days, regulating specific

timelines for all complaints, no matter how detailed, does not seem

necessary or appropriate.

The regulations clarify that they apply, among other things, to

complaints about violations of the requirements to serve private school

children and that the resolution be in writing.

On the other hand, the need for parents to be aware of the

complaint procedures seems basic to ensuring proper accountability and

involvement in the programs. Therefore, the Secretary has added a

provision to ensure that LEAs adequately inform parents of the

complaint procedures. In determining whether LEAs adequately informed

parents, LEAs would be expected to make information available in

languages other than English to the extent appropriate.

Change: The Secretary has added clarifying language in paragraphs

(a) and (c) and added a new paragraph (d) to Sec. 299.11 requiring that

the complaint procedures include informing parents of the procedures.

Executive Order 12866

1. Assessment of Costs and Benefits

These final 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 costs and benefits associated with the final

regulations are minimal and to the extent there are costs, the costs

result primarily from the statutory requirements and regulations

determined by the Secretary to be necessary for administering these

programs effectively and efficiently.

Thus, in assessing the potential costs and benefits--both

quantitative and qualitative--of these proposed regulations, the

Secretary has determined that the benefits of the proposed regulations

justify the costs.

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.

Summary of Potential Costs and Benefits

The potential costs and benefits are discussed elsewhere in this

preamble under the following heading: Analysis of Comments and Changes.

Paperwork Reduction Act of 1995

Collection of Information: General Provisions, Elementary and Secondary

Education Act: Complaint Process

1. Section 299.11(d) contains information collection requirements.

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)),

the Department of Education has submitted a copy of this provision to

the Office of Management and Budget (OMB) for its review under that

Act.

Under the Paperwork Reduction Act of 1995, no persons are required

to respond to a collection of information unless it displays a valid

OMB control number. The valid OMB control number assigned to the

collection of information in these final regulations is displayed at

the end of the affected sections of the regulations. The approval

number for the information collection contained in Secs. 299.10-299.12

(except for Sec. 299.11(d)) is 1810-0591 and the approval expires 05/

31/99.

2. Section 299.11(d) was added as a result of public comments, and

it contains an information collection requirement. As required by the

Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department of

Education has submitted a copy of this provision to the Office of

Management and Budget (OMB) for its review under the Act.

Under Sec. 299.11(d), an SEA is required to indicate to LEAs that

they must notify parents and appropriate private school officials or

representatives of the complaint procedures. The likely respondents to

the collection of information in the complaint process are SEAs and

LEAs who will have to notify parents and the other individuals.

We estimate that the burden associated with the public notification

process will amount to an additional 136,000 hours. Some 17,000 school

districts will have to spend an average of eight person hours

developing a notice, reproducing it, and distributing it. Some LEAs may

choose to put a notification in a local newspaper; others may

distribute the notification to each student or parents or private

school representative or official. Our estimate is based on the latter

assumption. The other option would probably save a significant amount

of time reproducing and distributing the notice. Additionally, if an

SEA developed a standard notice for the LEAs in its State, burden would

be reduced substantially. Therefore, if LEAs develop their own notice

and distribute it to each student or parent or private school

representative or official, the total annual reporting and

recordkeeping burden that will result from the collection of this

information is likely to be 136,000 burden hours (17,000 LEAs,

multiplied by eight burden hours for developing a notice, reproducing

it, and distributing it). If other options are taken by the SEA or LEA,

many fewer burden hours will be involved.

Organizations and individuals desiring to submit comments on the

information collection requirement in Sec. 299.11(d) should direct them

to the Office of Information and Regulatory Affairs, OMB, Room 10235,

New Executive Office Building, Washington, D.C. 20503; Attention: Desk

Officer for U.S. Department of Education.

The Department considers comments by the public on this proposed

collection of information in:

Evaluating whether the proposed collection of information

is necessary for the proper performance of the functions of the

Department, including whether the information will have practical

utility;

Evaluating the accuracy of the Department's estimate of

the burden of the proposed collection of information, including the

validity of the methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the

information to be collected; and

Minimizing the burden of the collection of information on

those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology; e.g., permitting

electronic submission of responses.

OMB is required to make a decision concerning the collection of

information contained in Sec. 299.11(d) between 30 and 60 days after

publication of this document in the Federal Register. Therefore, a

comment to OMB is best assured of having its full effect if OMB

receives it within 30 days of publication.

Intergovernmental Review

Some of the programs affected by these final regulations 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 inter-governmental partnership and a strengthened

federalism by relying on processes

[[Page 28252]]

developed by State and local governments for coordination and review of

proposed Federal financial assistance. In accordance with the order,

this document is intended to provide early notification of the

Department's specific plans and actions for these programs.

List of Subjects

34 CFR Part 200

Education of disadvantaged, Elementary and secondary education,

Grant programs--education, Indians-education, Infants and children,

Juvenile delinquency, Migrant labor, Private schools, Reporting and

recordkeeping requirements.

34 CFR Part 299

Administrative practice and procedure, Education, Elementary and

secondary education, Grant programs--education, Private schools,

Reporting and recordkeeping requirements.

Dated: May 19, 1997.

Richard W. Riley,

Secretary of Education.

(Catalog of Federal Domestic Assistance Number does not apply)

The Secretary amends Title 34 of the Code of Federal Regulations by

amending Part 200 and adding a new Part 299 to read as follows:

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

STANDARDS

1. The authority citation for Part 200 continues to read as

follows:

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

2. Section 200.64 is amended by removing and reserving the section.

Sec. 200.64 [Reserved]

3. A new Part 299 is added to read as follows:

PART 299--GENERAL PROVISIONS

Subpart A--Purpose and Applicability

Sec.

299.1 What are the purpose and scope of these regulations?

299.2 What general administrative regulations apply to ESEA

programs?

Subpart B--Selection Criteria

299.3 What priority may the Secretary establish for activities in

an Empowerment Zone or Enterprise Community?

Subpart C--Consolidation of State and Local Administrative Funds

299.4 What requirements apply to the consolidation of State and

local administrative funds?

Subpart D--Fiscal Requirements

299.5 What maintenance of effort requirements apply to ESEA

programs?

Subpart E--Services to Private School Students and Teachers

299.6 What are the responsibilities of a recipient of funds for

providing services to children and teachers in private schools?

299.7 What are the factors for determining equitable participation

of children and teachers in private schools?

299.8 What are the requirements to ensure that funds do not benefit

a private school?

299.9 What are the requirements concerning property, equipment, and

supplies for the benefit of private school children and teachers?

Subpart F--Complaint Procedures

299.10 What complaint procedures shall an SEA adopt?

299.11 What items are included in the complaint procedures?

299.12 How does an organization or individual file a complaint?

Authority: 20 U.S.C. 1221e-3(a)(1), 6511(a), and 7373(b) unless

otherwise noted.

Subpart A--Purpose and Applicability

Sec. 299.1 What are the purpose and scope of these regulations?

(a) This part establishes uniform administrative rules for programs

in Titles I through XIII of the Elementary and Secondary Education Act

of 1965, as amended (ESEA). As indicated in particular sections of this

part, certain provisions apply only to a specific group of programs.

(b) If an ESEA program does not have implementing regulations, the

Secretary implements the program under the authorizing statute, and, to

the extent applicable, Title XIV of ESEA, the General Education

Provisions Act, the regulations in this part, and the Education

Department General Administrative Regulations (34 CFR Parts 74 through

86) that are not inconsistent with specific statutory provisions of

ESEA.

(Authority: 20 U.S.C. 1221e-3(a)(1))

Sec. 299.2 What general administrative regulations apply to ESEA

programs?

With regard to the applicability of Education Department General

Administrative Regulations (EDGAR) in Part 80 to the ESEA programs

except for Title VIII programs (Impact Aid) (in addition to any other

specific implementing regulations):

(a) 34 CFR Part 80 (Uniform Administrative Requirements for Grants

and Cooperative Agreements to State and Local Governments) applies to

State, local, and Indian tribal governments under direct grant programs

(as defined in 34 CFR 75.1(b)), and programs under Title XI of ESEA.

(b) 34 CFR Part 80 also applies to State, local, and Indian tribal

governments under all other programs under the ESEA and to programs

under Title III of the Goals 2000: Educate America Act (Title III of

Goals 2000), unless a State formally adopts its own written fiscal and

administrative requirements for expending and accounting for all funds

received by State educational agencies (SEAs) and local educational

agencies (LEAs) under the ESEA and Title III of Goals 2000. If a State

adopts its own alternative requirements, the requirements must be

available for inspection upon the request of the Secretary or the

Secretary's representatives and must--

(1) Be sufficiently specific to ensure that funds received under

ESEA and Title III of Goals 2000 are used in compliance with all

applicable statutory and regulatory provisions;

(2) Ensure that funds received for programs under ESEA and Title

III of Goals 2000 are spent only for reasonable and necessary costs of

operating those programs; and

(3) Ensure that funds received under ESEA and Title III of Goals

2000 are not used for general expenses required to carry out other

responsibilities of State or local governments.

Note: 34 CFR 222.13 indicates which EDGAR provisions apply to

Title VIII programs (Impact Aid).

Note: To meet the first of the three standards, alternative

State provisions must, among other things, ensure that costs are

allocable to a particular cost objective.

(Authority: 20 U.S.C. 1221e-3(a)(1))

Subpart B--Selection Criteria

Sec. 299.3 What priority may the Secretary establish for activities in

an Empowerment Zone or Enterprise Community?

For any ESEA discretionary grant program, the Secretary may

establish a priority, as authorized by 34 CFR 75.105(b), for projects

that will--

(a) Use a significant portion of the program funds to address

substantial problems in an Empowerment Zone, including a Supplemental

Empowerment Zone, or an Enterprise

[[Page 28253]]

Community designated by the United States Department of Housing and

Urban Development or the United States Department of Agriculture; and

(b) Contribute to systemic educational reform in such an

Empowerment Zone, including a Supplemental Empowerment Zone, or such an

Enterprise Community, and are made an integral part of the Zone or

Community's comprehensive community revitalization strategies.

(Authority: 20 U.S.C. 2831(a))

Subpart C--Consolidation of State and Local Administrative Funds

Sec. 299.4 What requirements apply to the consolidation of State and

local administrative funds?

An SEA may adopt and use its own reasonable standards in

determining whether--

(a) The majority of its resources for administrative purposes comes

from non-Federal sources to permit the consolidation of State

administrative funds in accordance with section 14201 of the Act; and

(b) To approve an LEA's consolidation of its administrative funds

in accordance with section 14203 of the Act.

(Authority: 20 U.S.C. 8821 and 8823)

Subpart D--Fiscal Requirements

Sec. 299.5 What maintenance of effort requirements apply to ESEA

programs?

(a) General. An LEA receiving funds under an applicable program

listed in paragraph (b) of this section may receive its full allocation

of funds only if the SEA 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 the combined

fiscal effort per student or the aggregate expenditures for the second

preceding fiscal year.

(b) Applicable programs. This subpart is applicable to the

following programs:

(1) Part A of Title I (Improving Basic Programs Operated by Local

Educational Agencies).

(2) Title II (Eisenhower Professional Development Program) (other

than section 2103 and part C of this title).

(3) Subpart 2 of Part A of Title III (State and Local Programs for

School Technology Resources).

(4) Part A of Title IV (Safe and Drug-Free Schools and Communities)

(other than section 4114).

(c) Meaning of ``preceding fiscal year''. For purposes of

determining if the requirement of paragraph (a) of this section is met,

the ``preceding fiscal year'' means 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 for obligation by the Department.

Example: For fiscal year 1995 funds that are 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 ended September 30, 1994) 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.

(d) Expenditures. (1) In determining an LEA's compliance with

paragraph (a) of this section, the SEA shall consider only 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) The SEA may not consider the following expenditures in

determining an LEA's compliance with the requirements in paragraph (a)

of this section:

(i) Any expenditures for community services, capital outlay, debt

service or supplemental expenses made as a result of a Presidentially

declared disaster.

(ii) Any expenditures made from funds provided by the Federal

Government.

(Authority: 20 U.S.C. 8891)

Subpart E--Services to Private School Students and Teachers

Sec. 299.6 What are the responsibilities of a recipient of funds for

providing services to children and teachers in private schools?

(a) General. An agency or consortium of agencies receiving funds

under an applicable program listed in paragraph (b) of this section,

after timely and meaningful consultation with appropriate private

school officials (in accordance with the statute), shall 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, and to their teachers and other

educational personnel.

(b) Applicable programs. This subpart is applicable to the

following programs:

(1) Part C of Title I (Migrant Education).

(2) Title II (Professional Development) (other than section 2103

and part C of this title).

(3) Title III (Technology for Education) (other than Part B of this

title) (Star Schools).

(4) Part A of Title IV (Safe and Drug-Free Schools and Communities)

(other than section 4114).

(5) Title VI (Innovative Education Program Strategies).

(6) Title VII (Bilingual Education).

(c) Provisions not applicable. Sections 75.650 and 76.650 through

76.662 of Title 34 of the Code of Federal Regulations (participation of

students enrolled in private schools) do not apply to programs listed

in paragraph (b) of this section.

(Authority: 20 U.S.C. 8893)

Sec. 299.7 What are the factors for determining equitable

participation of children and teachers in private schools?

(a) Equal expenditures. (1) Expenditures of funds made by an agency

or consortium of agencies under a program listed in Sec. 299.6 (b) for

services for eligible private school children and their teachers and

other educational personnel must be equal on a per-pupil basis to the

amount of funds expended for participating public school children and

their teachers and other educational personnel, taking into account the

number and educational needs of those children and their teachers and

other educational personnel.

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

this section, an agency or consortium of agencies shall pay for the

reasonable and necessary administrative costs of providing services to

public and private school children and their teachers and other

educational personnel from the agency's or consortium of agencies'

total allocation of funds under the applicable ESEA program.

(b) Services on an equitable basis. (1) The services that an agency

or consortium of agencies provides to eligible private school children

and their teachers and other educational personnel must also be

equitable in comparison to the services and other benefits provided to

public school children and their teachers or other educational

personnel participating in a program under this subpart.

(2) Services are equitable if the agency or consortium of

agencies--

(i) Addresses and assesses the specific needs and educational

progress of eligible private school children and their teachers and

other educational

[[Page 28254]]

personnel on a comparable basis to public school children and their

teachers and other educational personnel;

(ii) Determines the number of students and their teachers and other

educational personnel to be served on an equitable basis;

(iii) Meets the equal expenditure requirements under paragraph (a)

of this section; and

(iv) Provides private school children and their teachers and other

educational personnel with an opportunity to participate that--

(A) Is equitable to the opportunity and benefits provided to public

school children and their teachers and other educational personnel; and

(B) Provides reasonable promise of participating private school

children meeting challenging academic standards called for by the

State's student performance standards and of private school teachers

and other educational personnel assisting their students in meeting

high standards.

(3) The agency or consortium of agencies shall make the final

decisions with respect to the services to be provided to eligible

private school children and their teachers and the other educational

personnel.

(c) If the needs of private school children, their teachers and

other educational personnel are different from the needs of children,

teachers and other educational personnel in the public schools, the

agency or consortium of agencies shall provide program benefits for the

private school children, teachers, and other educational personnel that

are different from the benefits it provides for the public school

children and their teachers and other educational personnel.

(Authority: 20 U.S.C. 8893)

Sec. 299.8 What are the requirements to ensure that funds do not

benefit a private school?

(a) An agency or consortium of agencies shall use funds under a

program listed in Sec. 299.6(b) to provide services that supplement,

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

absence of services provided under that program, be available to

participating children and their teachers and other educational

personnel in private schools.

(b) An agency or consortium of agencies shall use funds under a

program listed in Sec. 299.6(b) to meet the special educational needs

of participating children who attend a private school and their

teachers and other educational personnel, but may not use those funds

for--

(1) The needs of the private school; or

(2) The general needs of children and their teachers and other

educational personnel in the private school.

(Authority: 20 U.S.C. 8893)

Sec. 299.9 What are the requirements concerning property, equipment,

and supplies for the benefit of private school children and teachers?

(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 a program listed in

Sec. 299.6(b) for the benefit of eligible private school children and

their teachers and other educational personnel.

(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 proper purposes of the program; and

(2) Can be removed from the private school without remodeling the

private school facility.

(d) The public agency must remove equipment and supplies from a

private school if--

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

purposes of the program; or

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

or supplies for other than the purposes of the program.

(e) No funds 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 agency or consortium of agencies.

(Authority: 20 U.S.C. 8893)

Subpart F--Complaint Procedures

Sec. 299.10 What complaint procedures shall an SEA adopt?

(a) General. An SEA shall adopt written procedures, consistent with

State law, for--

(1) Receiving and resolving any complaint from an organization or

individual that the SEA or an agency or consortium of agencies is

violating a Federal statute or regulation that applies to an applicable

program listed in paragraph (b) of this section;

(2) Reviewing an appeal from a decision of an agency or consortium

of agencies with respect to a complaint; and

(3) Conducting an independent on-site investigation of a complaint

if the SEA determines that an on-site investigation is necessary.

(b) Applicable programs. This subpart is applicable to the

following programs:

(1) Part A of Title I (Improving Basic Programs Operated by Local

Educational Agencies).

(2) Part B of Title I (Even Start Family Literacy Programs) (other

than the federally administered direct grants for Indian tribes and

tribal organizations, children of migratory workers, Statewide family

literacy initiatives, and a prison that house women and children).

(3) Part C of Title I (Migrant Education).

(4) Part D of Title I (Children and Youth Who Are Neglected,

Delinquent, or At Risk of Dropping Out).

(5) Title II (Eisenhower Professional Development Program) (other

than section 2103 and part C of this title).

(6) Subpart 2 of Part A of Title III (State and Local Programs for

School Technology Resources).

(7) Part A of Title IV (Safe and Drug-Free Schools and Communities)

(other than section 4114).

(8) Title VI (Innovative Education Program Strategies).

(9) Part C of Title VII (Emergency Immigrant Education)

(Approved by the Office of Management and Budget under OMB Control

Number 1810-0591)

(Authority: 20 U.S.C. 1221e-3(a)(1), 8895)

Sec. 299.11 What items are included in the complaint procedures?

An SEA shall include the following in its complaint procedures:

(a) A reasonable time limit after the SEA receives a complaint for

resolving the complaint in writing, including a provision for carrying

out an independent on-site investigation, if necessary.

(b) An extension of the time limit under paragraph (a) of this

section only if exceptional circumstances exist with respect to a

particular complaint.

(c) The right for the complainant to request the Secretary to

review the final decision of the SEA, at the Secretary's discretion. In

matters involving violations of section 14503 (participation of private

school children), the Secretary will follow the procedures in section

14505(b).

(Approved by the Office of Management and Budget under OMB Control

Number 1810-0591)

(d) A requirement for LEAs to disseminate, free of charge, adequate

information about the complaint

[[Page 28255]]

procedures to parents of students, and appropriate private school

officials or representatives.

(Authority: 20 U.S.C. 1221e-3(a)(1), 8895)

Sec. 299.12 How does an organization or individual file a complaint?

An organization or individual may file a written signed complaint

with an SEA. The complaint must be in writing and signed by the

complainant, and include--

(a) A statement that the SEA or an agency or consortium of agencies

has violated a requirement of a Federal statute or regulation that

applies to an applicable program; and

(b) The facts on which the statement is based and the specific

requirement allegedly violated.

(Approved by the Office of Management and Budget under OMB Control

Number 1810-0591)

(Authority: 20 U.S.C. 1221e-3(a)(1), 8895)

[FR Doc. 97-13490 Filed 5-21-97; 8:45 am]

BILLING CODE 4000-01-P