[Federal Register: August 6, 2002 (Volume 67, Number 151)]
[Proposed Rules]               
[Page 50985-51027]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au02-38]                         


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Part II





Department of Education





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34 CFR Part 200



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


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DEPARTMENT OF EDUCATION

34 CFR Part 200

RIN 1810-AA91

 
Title I--Improving the Academic Achievement of the Disadvantaged

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the regulations governing the 
programs administered under Title I of the Elementary and Secondary 
Education Act of 1965, as amended (ESEA)--referred to in these proposed 
regulations as the Title I programs. These proposed regulations are 
needed to implement recent changes to Title I of the ESEA made by the 
No Child Left Behind Act of 2001 (NCLB Act).

DATES: We must receive your comments on or before September 5, 2002.

ADDRESSES: Address all comments for subparts A, B, and D of part 200 in 
these proposed regulations and all comments on information collection 
requirements to Jacquelyn C. Jackson, Ed.D., Acting Director, Student 
Achievement and School Accountability Programs, Office of Elementary 
and Secondary Education, U.S. Department of Education, 400 Maryland 
Avenue, SW., room 3W230, FB-6, Washington, DC 20202-6132. The Fax 
number for submitting comments on subparts A, B, and D is (202) 260-
7764.
    Address all comments for subpart C of part 200 in these proposed 
regulations to Francisco Garcia, Director, Migrant Education Program, 
Office of Elementary and Secondary Education, U.S. Department of 
Education, 400 Maryland Avenue, SW., room 3E317, FB-6, Washington, DC 
20202-6135. The Fax number for submitting comments on subpart C is 
(202) 205-0089.
    If you prefer to send your comments through the Internet, use the 
following address: TitleIRulemaking@ed.gov.

FOR FURTHER INFORMATION CONTACT: For subparts A, B, D, and E, of part 
200, Jackie Jackson, Student Achievement and School Accountability 
Programs, Office of Elementary and Secondary Education, U.S. Department 
of Education, 400 Maryland Avenue, SW., room 3W202, FB-6, Washington, 
DC 20202-6132. Telephone: (202) 260-0826.
    For subparts C and E of part 200, James English, Migrant Education 
Program, Office of Elementary and Secondary Education, U.S. Department 
of Education, 400 Maryland Avenue, SW., room 3E315, FB-6, Washington, 
DC 20202-6135. Telephone (202) 260-1394.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION:  

Invitation to Comment

    We invite you to submit comments regarding these proposed 
regulations. To ensure that your comments have maximum value in helping 
us develop the final regulations, we urge you to identify clearly the 
specific section or sections of the proposed regulations that each 
comment addresses and to arrange your comments in the same order as the 
proposed regulations.
    During and after the comment period, you may inspect all public 
comments about subparts A, B, D, and E of part 200, as appropriate, of 
these proposed regulations in room 3C147, FB-6, 400 Maryland Avenue, 
SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Eastern 
time, Monday through Friday of each week except Federal holidays. You 
may inspect all public comments about subparts C and E of part 200, as 
appropriate, of these proposed regulations in room 3E315, FB-6, 400 
Maryland Avenue, SW., Washington, DC, between the hours of 8:30 a.m. 
and 4 p.m., Eastern time, Monday through Friday of each week except 
Federal holidays.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these proposed regulations. If you want to 
schedule an appointment for this type of aid, please contact the person 
listed under FOR FURTHER INFORMATION CONTACT.

Background

    The NCLB Act reauthorized the ESEA and incorporated the major 
educational reforms proposed by President George W. Bush in his No 
Child Left Behind initiative. These reforms included important changes 
to Title I of the ESEA, which is designed to help disadvantaged 
children meet high academic standards.
    These proposed regulations would implement those changes in a 
manner that respects State and local control over education while 
ensuring strong accountability for results. On July 5, 2002, the 
Secretary separately published in the Federal Register final 
regulations for the standards and assessment provisions of Title I, 
part A of the ESEA.
    The Secretary intends to regulate only if absolutely necessary: for 
example, if the statute requires regulations or if regulations are 
necessary to provide flexibility or clarification for State educational 
agencies (SEAs) and local educational agencies (LEAs). Rather than 
regulating extensively, the Secretary intends to issue nonregulatory 
guidance addressing particular legal and policy issues under the Title 
I programs. This guidance will inform schools, parents, school 
districts, States, and other affected parties about the flexibility 
that exists under the statute, including different approaches they may 
take to carry out the statute's requirements.

Significant Proposed Regulations

    We group major issues according to subject. We discuss other 
substantive issues under the sections of the proposed regulations to 
which they pertain. Generally, we do not address proposed regulatory 
provisions that are technical or otherwise minor in effect.

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

Section 200.11  Participation in NAEP

    Statute: Section 1111(c)(2) of the NCLB Act requires each State to 
participate in biennial State assessments of 4th and 8th grade reading 
and mathematics under the National Assessment of Educational Progress 
(NAEP). Similarly, section 1112(b)(1)(F) of the NCLB Act requires each 
LEA participating under subpart A of this part to participate, if 
selected, in the State NAEP.
    Proposed Regulations: The proposed regulation would clarify that 
LEAs receiving Title I funds must participate in NAEP if they are 
selected.
    Reasons: The proposed regulations make clear that a condition of 
receiving Title I funds is that, if selected, the LEA must participate 
in NAEP despite section 411(d)(1) of the National Education Statistics 
Act of 1994, which provides for voluntary participation of LEAs.

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State Accountability System

Section 200.12  Single State Accountability System

    Statute: Under section 1111(b)(2)(A) of the ESEA, each State must 
develop and implement a single, statewide accountability system to 
ensure that all LEAs and public schools in the State make adequate 
yearly progress. The State's accountability system must be based on the 
State's academic standards and assessment system and take into account 
all public elementary and secondary school students; be the same 
accountability system the State uses for all public schools and LEAs in 
the State; and include rewards and sanctions the State will use to hold 
LEAs and public schools accountable for student achievement. The 
State's accountability system may, but is not required to, apply the 
requirements in section 1116 of Title I relating to identifying schools 
for improvement, corrective action, and restructuring to non-Title I 
schools and non-Title I LEAs.
    Proposed Regulations: Proposed Sec. 200.12 would implement the 
statutory provisions requiring a single, statewide accountability 
system. It would make clear that these provisions take effect beginning 
with the 2002-2003 school year. Proposed Sec. 200.12 also would require 
States to include, in their accountability system, guidelines for 
identifying the students with disabilities who should take alternate 
assessments and would require reporting on the number of students with 
disabilities who take an alternate assessment.
    Reasons: Proposed Sec. 200.12 reflects the Secretary's goal of 
regulating only where necessary to provide clarity or flexibility. It 
emphasizes the importance of a single, statewide accountability system 
and sets the context for the subsequent regulations on adequate yearly 
progress. By requiring States to establish guidelines governing 
alternate assessments, it also ensures that only students with the most 
significant disabilities take those assessments.

Adequate Yearly Progress

Sections 200.13  Through 200.20 Adequate Yearly Progress

    Statute: Under section 1111(b)(2)(B), each State must demonstrate 
what constitutes adequate yearly progress of the State, and of all 
public elementary and secondary schools and LEAs in the State, toward 
enabling all students to meet the State's student achievement 
standards. ``Adequate yearly progress'' definitions must apply the same 
high standards of academic achievement to all public elementary and 
secondary school students in the State, be statistically valid and 
reliable, and measure progress based primarily on the State's academic 
assessments. The definition must include separate annual measurable 
objectives for continuous and substantial improvement in both 
mathematics and reading/language arts for all students and for each of 
the following specific groups of students: students who are 
economically disadvantaged, students from major racial and ethnic 
groups, students with disabilities, and students with limited English 
proficiency.
    Adequate yearly progress must include a timeline that ensures that 
all students in each subgroup meet or exceed the State's proficient 
level of academic achievement no later than the 2013-2014 school year. 
Using data from the 2001-2002 school year, each State must determine a 
starting point for reading/language arts and mathematics for measuring 
the percentage of students meeting or exceeding the State's proficient 
level of academic achievement. The starting point must, at a minimum, 
be based on the higher of two proficiency levels specified in the 
statute. Adequate yearly progress must include intermediate goals that 
increase in equal increments over the timeline; the first increment 
must occur in not more than two years from the baseline year (2001-
2002) and the following increases must occur in not more than three 
years. Adequate yearly progress must also include the graduation rate 
for high schools and a similar academic indicator for elementary and 
middle schools.
    To make adequate yearly progress, a school must meet two criteria. 
First, the school must meet or exceed the State's annual measurable 
objectives with respect to all students and students in each subgroup. 
If students in any subgroup fail to make the requisite progress, 
however, the school can still make adequate yearly progress if the 
percentage of students below proficient in that subgroup decreased by 
at least 10 percent compared to the preceding year and that subgroup 
made progress on one or more of the additional academic indicators. 
Second, at least 95 percent of the students in each subgroup enrolled 
in the school must take the assessment.
    Current Regulations: The current regulations governing adequate 
yearly progress (34 CFR 200.3) reflect provisions of section 1111 of 
the ESEA that were superseded by the NCLB Act.
    Proposed Regulations: The proposed regulations in Secs. 200.13 
through 200.20 would implement the statutory provisions in section 
1111(b)(2) that require each State to demonstrate what constitutes 
adequate yearly progress. For the most part, the proposed regulations 
would merely reorganize the statutory provisions to make them more 
understandable, particularly the interrelationship among the timeline, 
starting points, intermediate goals, and annual measurable objectives.
    In several instances, the proposed regulations would clarify the 
statutory provisions or provide flexibility. For example, proposed 
Sec. 200.13(c)(1) permits a State to define achievement standards for 
students with the most significant cognitive disabilities who take an 
alternate assessment. Section 1111(b)(2)(I)(ii) of the ESEA provides 
that children with disabilities who take an alternate assessment must 
be included in the 95 percent of students who must participate in the 
assessments in order for a school to make adequate yearly progress. 
Under the Title 1 accountability system, alternate assessments are an 
appropriate way to measure the progress of only that very limited 
portion of students with the most significant cognitive disabilities 
who will never be able to demonstrate progress on grade level academic 
achievement standards even if provided the very best possible 
education. Based on current prevalence rates of students with the most 
significant cognitive disabilities, proposed Sec. 200.13(c)(2), would 
set the number of students with disabilities who should be included in 
accountability measures using alternate standards at not more than 0.5 
percent of all students assessed in a State or LEA. For accountability 
purposes, the performance of all other students with disabilities 
(including any other students with disabilities who take an alternate 
assessment) must be assessed against the academic content and 
achievement standards established under Sec. 200.1.
    Proposed Sec. 200.13(d) would make clear that a State must have a 
way to hold accountable schools in which no grade level is assessed 
under the State's academic assessment system or whose purpose is to 
serve students for less than a full academic year. The proposed 
regulations emphasize, however, that the State does not need to 
administer a formal assessment to students in these schools. Similarly, 
proposed Sec. 200.15(b) would clarify that, if a State changes its 
academic assessment system or its definition of adequate yearly 
progress, the State may not extend, beyond the 2013-2014 school year, 
its timeline for enabling all students to reach proficiency. Proposed 
Sec. 200.16 would make clear that a State must set separate starting 
points for reading/language arts and mathematics, because the State

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must hold schools accountable for student achievement in each subject. 
That section would permit a State to establish separate starting points 
by grade span. Proposed Sec. 200.16(b)(2) also would clarify how a 
State determines a starting point based on the percentage of students 
at the proficient level in the ``school at the 20th percentile in the 
State, based on enrollment.''
    Section 1111(b)(2)(C)(vi) of the ESEA requires a State to include 
the graduation rate in its determination of adequate yearly progress 
for public secondary schools and defines graduation rate as ``the 
percentage of students who graduate from secondary school with a 
regular diploma in the standard number of years.'' Proposed 
Sec. 200.19, which deals with other academic indicators, would rely on 
language in the conference report to the NCLB Act to permit a State to 
submit for the Secretary's approval another definition that accurately 
measures the high school graduation rate. Proposed Sec. 200.19(c) would 
make clear that a State may, but is not required to, increase the goals 
of its other academic indicators over the course of its timeline.
    Proposed Sec. 200.20, which would implement the statutory 
provisions for how a school or LEA makes adequate yearly progress, 
would clarify the statutory requirement that 95 percent of the students 
enrolled in each subgroup in a school must take the State's academic 
assessment in order for the school to make adequate yearly progress. 
Proposed Sec. 200.20(c)(1)(ii) would make clear that the number of 
students in a subgroup must be of sufficient size to produce 
statistically reliable results for the 95 percent requirement to affect 
adequate yearly progress. In other words, if the number of students in 
a subgroup is too small to produce statistically reliable results, the 
State need not, on the basis of the 95 percent requirement, identify 
the school as failing to make adequate yearly progress if less than 95 
percent of the students in that subgroup take the State's assessment. 
This proposed provision would not, however, authorize a State to 
exclude students in small subgroups from taking the assessment. 
Finally, proposed Sec. 200.20(e) would permit a State to define ``full 
academic year'' for the purpose of determining adequate yearly 
progress.
    Reasons: Proposed Secs. 200.13 through 200.20 reflect the 
Secretary's goal of providing clarity where the statute is ambiguous 
and reorganizing the statutory requirements to facilitate a better 
understanding of and compliance with those requirements. These sections 
also reflect the Secretary's goal to provide added flexibility wherever 
possible.
    In developing these proposed regulations, the Department has 
carefully based them on the statutory provisions governing adequate 
yearly progress. These requirements are designed to enhance the quality 
systems of accountability that many States have already developed. At 
the core of the NCLB Act's accountability pillar, the statutory 
provisions require each State to implement a single statewide system 
for annually holding all public schools and LEAs accountable. This 
single system will ensure that all students, including students with 
disabilities, limited English proficient students, economically 
disadvantaged students, and students from major racial and ethnic 
groups, will be proficient in reading/language arts and mathematics by 
the 2013-2014 school year. We are aware that there are rigorous models 
that States have already developed that may achieve the same 
fundamental principles of the statute, although through different 
approaches. For example, some models establish a growth trajectory for 
each school based on the school's baseline performance. Other models, 
in determining a school's performance, take into consideration the 
school's progress in moving students from ``below basic'' to ``basic'' 
as well as from ``basic'' to ``proficient'' and from ``proficient'' to 
``advanced.'' We specifically invite States that have been using 
different models to comment on the statutory provisions that might 
affect their use, and how these requirements could be incorporated into 
their current systems.

Section 200.21  Adequate Yearly Progress of a State

    Statute: Section 6161 of the ESEA requires the Secretary, beginning 
with the 2004-2005 school year, to review whether each State that 
receives funds under Title I, part A has made adequate yearly progress 
with respect to each subgroup of students under section 
1111(b)(2)(C)(v) of the ESEA. If a State also receives funds under 
Title III, part A, subpart 1 of the ESEA, the Secretary must also 
review whether the State has met its annual measurable achievement 
objectives relating to the development and attainment of English 
proficiency by limited English proficient students.
    Proposed Regulations: Proposed Sec. 200.21 would implement this new 
requirement. This section would emphasize that the Secretary will 
review whether a State has made adequate yearly progress as defined in 
proposed Secs. 200.13 through 200.20 for each subgroup of students as 
well as has met its annual measurable achievement objectives relating 
to the development and attainment of English proficiency by limited 
English proficient students.
    Reasons: Proposed Sec. 200.21 reflects the Secretary's goal of 
regulating only where necessary to provide clarity or flexibility. It 
is included to emphasize, for the first time, a State's responsibility 
to make adequate yearly progress for each subgroup of students and meet 
its goals for improving the English proficiency of its limited English 
proficient students.

Schoolwide Programs

    Statute: Section 1114 of the ESEA made three substantive changes to 
the existing requirements governing schoolwide programs. Section 
1114(a)(1) allows a school to operate a schoolwide program if the 
school serves an eligible school attendance area in which at least 40 
percent of the children are from low-income families, or if at least 40 
percent of the children enrolled in the school are from such families. 
Under the previous statute, the eligibility threshold was 50 percent.
    Section 1114(b)(1)(A) requires the comprehensive needs assessment 
for a schoolwide program to take into account the needs of migratory 
children.
    Section 1306(b)(4) of the ESEA made one additional substantive 
change in the schoolwide program requirements. Under that provision, a 
school must document that the special educational needs of migrant 
students have been met before Title I, part C funds may be included in 
a schoolwide program. Previously, a school was required only to address 
those needs, not document that they had been met, before including 
Title I, part C funds.
    Current Regulations: Current Sec. 200.8 reflects the basic 
statutory requirements for schoolwide programs. The regulations specify 
(1) the eligibility requirements for a schoolwide program--including a 
provision that permits an LEA to determine schoolwide eligibility using 
a poverty measure that is different from the poverty measure used to 
identify and rank school attendance areas; (2) requirements for and 
restrictions on combining funds in a schoolwide program; (3) components 
of a schoolwide program; (4) schoolwide program planning and needs 
assessment; and (5) the effects of operating a schoolwide program in 
relation to other Federal program requirements.
    Proposed Regulations: The proposed regulations would not 
substantively

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change the current regulations beyond conforming them to the new 
statutory requirements. However, the proposed regulations would 
reorganize the current regulations in a way that emphasizes the 
fundamental purpose of a schoolwide program. The provisions of current 
Sec. 200.8 would be divided into four new, smaller and simpler 
sections--proposed Secs. 200.25 through 200.28.
    Proposed Sec. 200.25 would clarify that the purpose of a schoolwide 
program is to improve the academic achievement of all students, 
especially those furthest from meeting the State's proficient academic 
achievement standard. Proposed Sec. 200.25 would also contain the 
eligibility requirements.
    Proposed Sec. 200.26 would clarify that a schoolwide plan must 
describe how the school will improve academic achievement so that all 
students will meet the State's proficient academic achievement 
standard, especially those furthest from meeting proficiency. The 
proposed section would also clarify that the plan must be reviewed and 
revised as necessary to reflect changes in the schoolwide program or in 
the State's academic content standards and academic achievement 
standards. The proposed section would also include the provisions 
requiring the comprehensive needs assessment to take into account the 
needs of migratory children.
    Proposed Sec. 200.27 would reorganize the schoolwide components 
into four primary categories: (1) Schoolwide reform strategies, (2) 
instruction by highly qualified teachers, (3) parent involvement, and 
(4) additional support. The proposed section also would emphasize that 
reform strategies must address the needs of students in the school, but 
particularly those furthest from meeting the State's proficient 
academic achievement standard.
    Proposed Sec. 200.28 would group together all the statutory 
provisions addressing the uses of funds in a schoolwide program. These 
provisions include the new provisions governing meeting the needs of 
migrant students.
    Reasons: The Department has found that school-level officials are 
sometimes confused about the purpose of the schoolwide approach. Often, 
schools do not use the flexibility offered by the schoolwide approach 
as a means to improve achievement, particularly for those students 
furthest from meeting the proficient standard. These regulations are 
intended to help schools better understand that schoolwide flexibility 
is a strategic approach, using scientifically based strategies, for 
improving student achievement to ensure that no child is left behind.

LEA and School Improvement

Section 200.30  Local Review; and Sec. 200.31 Opportunity To Review 
School Level Data

    Statute: Under section 1116(a) and (b) of Title I, each 
participating LEA must use the State academic assessments and other 
indicators in the State plan, and, at the LEA's discretion, other 
academic indicators described in the LEA's plan, to review the progress 
of each school served under subpart A of this part to determine whether 
the school is making adequate yearly progress. The LEA must publicize 
the results of its review to parents, teachers, principals, schools, 
and the community.
    In general, the LEA's use of other academic indicators may not 
reduce the number or change the identity of schools that would 
otherwise be identified for improvement, corrective action, or 
restructuring, but may result in the identification of additional 
schools for improvement, corrective action, or restructuring. However, 
the use of these indicators may permit a school to make adequate yearly 
progress if the school reduces by at least 10 percent the percentage of 
a student subgroup failing to meet the proficient level of academic 
achievement.
    Before identifying a school for improvement, corrective action, or 
restructuring, an LEA must provide the school an opportunity to review 
the school-level data, including academic assessment data, on which the 
LEA has based the proposed identification.
    Current Regulations: The current regulations governing LEA review 
of school performance reflect provisions of section 1116 of the ESEA 
that were superseded by the NCLB Act.
    Proposed Regulations: Proposed Sec. 200.30 would repeat the 
statutory requirement for LEAs to conduct an annual review of the 
performance of all schools receiving funds under subpart A of this 
part. The review would determine whether the schools are making 
adequate yearly progress toward the goal of helping all students reach 
proficiency in reading and mathematics within 12 years of enactment of 
the NCLB Act.
    Proposed Sec. 200.30 would further clarify the circumstances under 
which an LEA could limit its review to the progress of only those 
students served, or eligible for services, in a school operating a 
targeted assistance program. The LEA could limit its review only if the 
students selected for services under the targeted assistance program 
are those with the greatest need for academic assistance.
    Proposed Sec. 200.31 would repeat and reorganize the statutory 
requirement that an LEA provide a school with the opportunity to review 
the data on which an LEA has based a proposed identification of the 
school for improvement, corrective action, or restructuring. The 
proposed provision would make clear that this review must occur before 
the LEA's final decision on identification.
    Reasons: Proposed Secs. 200.30 and 200.31 would reflect the 
Secretary's goal of clarifying and reorganizing the statutory 
requirements to facilitate a better understanding of and compliance 
with those requirements.

Section 200.32  Identification for School Improvement; Sec. 200.33 
Identification for Corrective Action; Sec. 200.34 Identification for 
Restructuring; and Sec. 200.35 Delay and Removal

    Statute: Under section 1116(b) of Title I, an LEA must (1) identify 
for school improvement any school that fails to make adequate yearly 
progress for two consecutive years and (2) must make available public 
school choice to all students enrolled in the school. If the school 
fails to make adequate yearly progress for a third consecutive year, 
the LEA must continue to offer public school choice and must also make 
available supplemental educational services to students who remain in 
the school.
    In the case of a school that fails to make adequate yearly progress 
after two years of improvement, the LEA must identify the school for 
corrective action and continue to offer public school choice and 
supplemental educational services to students enrolled in the school. 
If a school fails to make adequate yearly progress after one year of 
corrective action, the LEA must identify the school for restructuring 
and must continue to offer public school choice and supplemental 
educational services while it prepares a restructuring plan for the 
school.
    The statute also includes transition provisions governing schools 
identified for improvement or corrective action before the enactment of 
the NCLB Act:
     An LEA must treat any school that was in improvement on 
January 7, 2002 as a school that is in the first year of improvement 
for the 2002-2003 school year.
     An LEA must treat any school that was in improvement for 
two or more consecutive years on January 7, 2002 as a school in its 
second year of school improvement for the 2002-2003 school year.
     An LEA must treat any school that was in corrective action 
on January 7,

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2002 as a school that is in corrective action for the 2002-2003 school 
year.
    An LEA may delay for one year the requirements for any school under 
the second year of improvement, under corrective action, or under 
restructuring, if (1) the school makes adequate yearly progress for one 
year or (2) if the school's failure to make adequate yearly progress is 
due to exceptional or uncontrollable circumstances, such as a natural 
disaster or a precipitous and unforeseen decline in the financial 
resources of the LEA or school. However, the LEA may not take into 
account this period of delay in determining the number of consecutive 
years of failure to make adequate yearly progress for the purpose of 
subjecting the school to further improvement actions.
    If a school identified for improvement, corrective action, or 
restructuring makes adequate yearly progress for two consecutive years, 
the LEA may no longer subject the school to the requirements of 
improvement, corrective action, or restructuring or identify the school 
for improvement for the next school year.
    Current Regulations: The current regulations governing LEA 
identification of schools for improvement and corrective action reflect 
provisions of section 1116 of the ESEA that were superseded by the NCLB 
Act.
    Proposed Regulations: In general, proposed Secs. 200.32, 200.33, 
200.34, and 200.35 would restate and reorganize the statutory 
provisions related to the LEA's identification of schools for 
improvement, corrective action, and restructuring, as well as 
provisions governing the delay or termination of requirements related 
to identification.
    Proposed Sec. 200.32 clarifies the statutory timeline for 
identifying schools for improvement. The statute requires the 
identification to take place ``before the beginning of the school year 
following such failure to make adequate yearly progress.'' To clarify 
the meaning of this deadline, proposed Sec. 200.32(a)(2) restates the 
deadline so that it is clear that the identification must take place 
``before the beginning of the school year following the year in which 
the LEA administered the assessments that resulted in the school's 
failure to make adequate yearly progress for a second consecutive 
year.''
    In addition, proposed Sec. 200.32(f) states that if the LEA misses 
this deadline, the school is nevertheless subject to the requirements 
of school improvement--including the provision of public school choice 
options to all students enrolled in the school--upon identification and 
that the LEA must count that school year as a full year of school 
improvement for the purpose of subjecting the school to additional 
improvement measures if it continues to fail to make adequate yearly 
progress. This proposed regulation is intended to prevent the potential 
delay of needed improvement measures for an additional year if States 
and LEAs fail to make identification in accordance with the statutory 
deadline.
    Proposed Secs. 200.32 and 200.33 also address identification issues 
related to schools that are not covered under the statutory transition 
provisions. More specifically, the statute does not account for the 
potential impact of the results of assessments administered during the 
2001-2002 school year. Proposed Sec. 200.32(d) gives an LEA discretion 
to remove from improvement status a school that, on the basis of the 
2001-2002 assessments, makes adequate yearly progress for a second 
consecutive year. Similarly, proposed Sec. 200.33(c) permits an LEA to 
remove from corrective action a school that, on the basis of the 2001-
2002 assessments, makes adequate yearly progress for a second 
consecutive year. Proposed Sec. 200.32(e) permits, but does not 
require, an LEA to identify for improvement a school that, on the basis 
of the 2001-2002 assessments, fails to make adequate yearly progress 
for a second consecutive year.
    Reasons: Proposed Secs. 200.32, 200.33, 200.34, and 200.35 reflect 
the Secretary's goal of providing clarity where the statute is 
ambiguous and reorganizing the statutory requirements to facilitate a 
better understanding of and compliance with those requirements. In 
particular, proposed Sec. 200.32(a)(2) clarifies the statutorily 
ambiguous deadline for identifying schools for improvement and proposed 
Sec. 200.32(f) ensures that the school improvement timeline is not 
thwarted by the failure to meet this deadline.
    In addition, proposed Sec. 200.32(d) and (e) and Sec. 200.33(c) 
apply the statutory provisions for entering and exiting improvement 
status--two consecutive years of failure to make adequate yearly 
progress and two consecutive years of making adequate yearly progress, 
respectively--to schools not covered under the transition provisions in 
section 1116(f) of the NCLB Act.

Section 200.36  Communication With Parents; Sec. 200.37 Notice of 
Identification for Improvement, Corrective Action, or Restructuring; 
and Sec. 200.38 Information About Action Taken

    Statute: Under section 1116 of Title I, SEAs and LEAs must keep 
parents informed throughout the improvement process. In particular, 
section 1116(b)(6) requires LEAs to provide the parents of each student 
enrolled in a school identified for improvement, corrective action, or 
restructuring an explanation of what the identification means, the 
reasons for the identification, what the school, LEA, and SEA are doing 
to address the achievement problems that led to the identification, how 
parents can help the school improve, and the parents' option to 
transfer their child to another public school or to obtain supplemental 
educational services for their child.
    Current Regulations: The current regulations governing LEA 
notification of parents during the school improvement process reflect 
provisions of section 1116 of the ESEA that were superseded by the NCLB 
Act.
    Proposed Regulations: Proposed Sec. 200.36 clarifies the manner in 
which SEAs, LEAs, and schools must meet notification requirements under 
section 1116 by providing guidelines for all communications with 
parents. These guidelines include the use of an understandable and 
uniform format for all required notices; the provision, to the extent 
practicable, of all notices in a language that parents can understand; 
the use of direct means of communication, such as mailing materials 
home, as well as broader electronic means such as the Internet; and 
assurances that all notices respect the privacy of students and their 
families.
    Proposed Sec. 200.37 repeats the statutory requirement to notify 
parents when the school their child attends is identified for 
improvement, corrective action, or restructuring. Proposed 
Sec. 200.37(b)(4) would add to the statutory requirement for an 
explanation of the public school choice option the inclusion of 
information on the performance of the schools to which a student may 
transfer. Proposed Sec. 200.37 also would require LEAs to include in 
their annual notice of the availability of supplemental educational 
services the identification of any providers of technology-based or 
distance-learning services.
    Proposed Sec. 200.38 restates the statutory requirement for LEA 
notification to parents of action taken to

[[Page 50991]]

address the problems that led the LEA to identify the school for 
improvement, corrective action, or restructuring.
    Reasons: Proposed Secs. 200.36, 200.37, and 200.38 reflect the 
Secretary's goal of providing clarity where the statute is ambiguous 
and reorganizing the statutory requirements to facilitate a better 
understanding of and compliance with those requirements. The proposed 
regulations would help ensure that SEAs, LEAs, and schools develop a 
uniform approach for communicating with parents throughout the school 
improvement process.

Section 200.39  Responsibilities Resulting From Identification for 
School Improvement; Sec. 200.40 Technical Assistance; and Sec. 200.41 
School Improvement Plan

    Statute: Under section 1116(b) of Title I, if an LEA identifies a 
school for improvement, the LEA must provide all students enrolled in 
the school with the option to transfer to schools served by the LEA 
that have not been identified for improvement. The LEA also must ensure 
that the school receives technical assistance in identifying and 
addressing the problems that led to the identification for improvement. 
The school must develop and implement a school improvement plan 
covering a two-year period that specifies the responsibilities of the 
school, the LEA, and the SEA under the plan; incorporates 
scientifically based strategies for strengthening instruction in the 
core academic subjects; includes annual measurable objectives for 
helping all student groups make adequate yearly progress; and sets 
aside 10 percent of the school's Title I allocation for professional 
development that directly addresses the achievement problems that led 
the LEA to identify the school for improvement.
    The LEA must promptly review the school improvement plan, work with 
the school to make any necessary revisions, and approve the plan within 
45 days of receiving it from the school. The LEA may condition approval 
of the plan on the inclusion of one of the corrective actions specified 
in section 1116(b)(7)(C)(iv) of Title I or on feedback from parents and 
community leaders.
    If a school continues to fail to make adequate yearly progress 
after one year of school improvement, the LEA must continue to offer a 
public school choice option to students enrolled in the school, 
continue to provide technical assistance, and make available 
supplemental educational services to eligible students who remain in 
the school.
    Current Regulations: The current regulations governing LEA and 
school-level responsibilities when the LEA identifies a school for 
improvement reflect provisions of section 1116 of the ESEA that were 
superseded by the NCLB Act.
    Proposed Regulations: In general, proposed Secs. 200.39, 200.40, 
and 200.41 restate the statutory requirements related to LEA and 
school-level responsibilities under the school improvement process, 
including the LEA's obligation to offer public school choice options 
and to provide technical assistance and the school's responsibility to 
develop and implement a comprehensive school improvement plan. Proposed 
Sec. 200.41(c)(4) also clarifies that school improvement plans must 
include measurable goals that address the specific reasons for the 
school's failure to make adequate yearly progress. This proposal is 
intended to eliminate possible confusion between the goals in the 
improvement plan and the State-level annual measurable objectives 
established under section 1111 for the purpose of determining adequate 
yearly progress.
    Proposed Sec. 200.41(c)(5) would increase flexibility in the use of 
the 10 percent set-aside for professional development under the school 
improvement plan by making instructional staff other than teachers and 
principals eligible for these professional development activities.
    Reasons: Proposed Secs. 200.39, 200.40, and 200.41 reflect the 
Secretary's goal of providing clarity where the statute is ambiguous 
and reorganizing the statutory requirements to facilitate a better 
understanding of and compliance with those requirements.

Section 200.42  Corrective Action; and Sec. 200.43 Restructuring

    Statute: Under section 1116(b)(7) of Title I, if an LEA identifies 
a school for corrective action, it must continue to provide all 
students enrolled in the school with the option to transfer to another 
public school, continue to ensure that the school receives technical 
assistance, continue to make available supplemental educational 
services to students who remain in the school, and take at least one of 
the corrective actions specified in the statute. These corrective 
actions include replacing the school staff, implementing a new 
curriculum, decreasing management authority at the school, appointing 
an outside expert to advise the school, extending the school day or 
year, and reorganizing the school internally.
    If an LEA identifies a school for restructuring, it must continue 
to provide a public school choice option and make available 
supplemental educational services while preparing a plan to carry out 
an alternative governance arrangement specified in the statute. These 
alternative governance arrangements include reopening the school as a 
public charter school, replacing all or most of the school staff, 
entering into a contract with a private management company to operate 
the school as a public school, turning over operation of the school to 
the SEA, or any other major restructuring of a school's governance 
arrangements.
    If the school continues to fail to make adequate yearly progress, 
the LEA must implement its restructuring plan no later than the 
beginning of the school year following the year in which it identified 
the school for restructuring.
    Current Regulations: The current regulations governing corrective 
action reflect provisions of section 1116 of the ESEA that were 
superseded by the NCLB Act, and restructuring is a new requirement 
under the NCLB Act.
    Proposed Regulations: In general, Secs. 200.42 and 200.43 restate 
the statutory requirements related to corrective action and 
restructuring. Proposed Sec. 200.42(b)(4)(iv)(A) and (B) clarify that 
the purpose of appointing an outside expert as a corrective action is 
to help revise the school improvement plan developed under Sec. 200.41 
and implement the revised plan.
    Reasons: Proposed Secs. 200.42 and 200.43 reflect the Secretary's 
goal of providing clarity where the statute is ambiguous and 
reorganizing the statutory requirements to facilitate a better 
understanding of and compliance with those requirements.

Section 200.44  Public School Choice

    Statute: Under section 1116(b) of Title I, if an LEA identifies a 
school for improvement, corrective action, or restructuring it must 
provide each student enrolled in the school with the option to transfer 
to another public school served by the LEA that is not identified for 
improvement, corrective action, or restructuring, unless such an option 
is prohibited by State law. The LEA must provide the option to transfer 
no later than the first day of the school year following the 
identification for improvement, corrective action, or restructuring, 
and must provide or pay for the transportation of the student to the 
school the student chooses to attend.
    In providing students the option to transfer, the LEA must give 
priority to the lowest-achieving students from low-income families. If 
a student exercises

[[Page 50992]]

the option to transfer to another public school, the LEA must permit 
the student to remain in that school until the student has completed 
the highest grade in the school. However, the LEA's obligation to 
provide transportation ends at the end of a school year if the school 
from which the student transferred is no longer identified for 
improvement, corrective action, or restructuring.
    Current Regulations: The public school choice requirement is new 
under the NCLB Act and not covered under current regulations.
    Proposed Regulations: Proposed Sec. 200.44 restates and reorganizes 
the statutory provisions in section 1116(b) related to public school 
choice. The proposed regulations also clarify the statutory deadline by 
requiring LEAs to provide a choice option not later than the first day 
of the school year following the year in which the LEA administered the 
assessments that resulted in the identification of the school for 
improvement, corrective action, or restructuring.
    In addition, proposed Sec. 200.44(a)(4) would require LEAs to offer 
the parents of each eligible student a choice of more than one school, 
if there is more than one school within the LEA that has not been 
identified for improvement, corrective action, or restructuring, and to 
take into account the parents' preferences in assigning students to a 
new school.
    Proposed Sec. 200.44(b) would clarify that the statutory exception 
from the public school choice requirements where choice is prohibited 
by State law applies only if the State law prohibits choice through 
restrictions on public school assignments or the transfer of students 
from one public school to another public school. Proposed 
Sec. 200.44(c) clarifies that LEA implementation of a desegregation 
plan does not exempt the LEA from the public school choice requirement 
in section 1116(b) of Title I.
    Proposed Sec. 200.44(f) and (h) would limit an LEA's obligation to 
provide or pay for choice-related transportation due to insufficient 
funding resulting from the application of Sec. 200.48.
    Reasons: Proposed Sec. 200.44 reflects the Secretary's goal of 
providing clarity where the statute is ambiguous and reorganizing the 
statutory requirements to facilitate a better understanding of and 
compliance with those requirements. Proposed Sec. 200.44(a)(2) 
clarifies the deadline for providing choice to be consistent with the 
statutory requirement that identification for improvement, corrective 
action, or restructuring occur prior to the beginning of the school 
year.
    Proposed Sec. 200.44(a)(4) would empower parents by ensuring, 
wherever possible, that they have the option of choosing, from among 
several options, the school that best meets the educational needs of 
their child.
    Proposed Sec. 200.44(b) and (c) are intended to prevent LEAs from 
arbitrarily invoking either State law or desegregation plans in seeking 
an exemption from the public school choice requirement. Proposed 
Sec. 200.44(f) and (h) reflect the interpretation under Sec. 200.48 
that the statute caps the set-aside for choice-related transportation 
and supplemental educational services at an amount equal to 20 percent 
of an LEA's allocation under subpart A of this part, thereby limiting 
the LEA's obligation to satisfy all requests for choice-related 
transportation.
    Proposed Sec. 200.44(i) clarifies that for children with 
disabilities, the public school choice option must provide a free and 
appropriate public education.

Section 200.45  Supplemental Educational Services; Sec. 200.46 LEA 
Responsibilities for Supplemental Educational Services; and Sec. 200.47 
SEA Responsibilities for Supplemental Educational Services

    Statute: Section 1116(e) of Title I defines supplemental 
educational services as tutoring and other academic enrichment services 
designed to increase the academic achievement of eligible students and 
help them attain proficiency in meeting State academic achievement 
standards. If an LEA has identified a school for a second year of 
school improvement, for corrective action, or for restructuring, it 
must arrange for supplemental educational services for each eligible 
student from a State-approved provider selected by the student's 
parents. Eligible students are defined in the statute as students from 
low-income families, and if funding is insufficient to provide services 
to all such students, LEAs must give priority to the lowest-achieving 
eligible students.
    SEAs must promote participation by as many providers as possible, 
develop criteria for approval as a provider that are based on a 
demonstrated record of effectiveness in increasing student achievement 
in subjects relevant to meeting State academic content and achievement 
standards, maintain an updated list of providers from which parents may 
select, and monitor the quality and effectiveness of approved 
providers.
    An LEA making available supplemental educational services must, 
funding permitting, continue to make available such services until the 
end of the school year. An SEA may waive the requirement for an LEA to 
provide supplemental educational services if none of the providers on 
the State's list make services available within a reasonable distance 
of the LEA and if the LEA itself is not able to provide the services.
    Current Regulations: The requirement to provide supplemental 
educational services is new under the NCLB Act and not covered under 
current regulations.
    Proposed Regulations: In general, proposed Secs. 200.45, 200.46, 
and 200.47 repeat the statutory requirements for the provision of 
supplemental educational services. Proposed Sec. 200.47 would modify 
the standards for SEA approval of providers to clarify that 
supplemental service providers may include a non-profit entity, a for-
profit entity, a public school, including a public charter school, a 
private school, or an LEA. The proposed Sec. 200.47 also would prohibit 
schools that are identified for improvement, corrective action, or 
restructuring from being a provider.
    Reasons: Proposed Secs. 200.45, 200.46, and 200.47 reflect the 
Secretary's goal of providing clarity where the statute is ambiguous 
and reorganizing the statutory requirements to facilitate a better 
understanding of and compliance with those requirements.
    Examples of evidence from a provider that may demonstrate 
effectiveness include the following:
     Significant improvement in student academic achievement as 
measured by statewide assessments;
     Successful use of instructional practices based on 
research;
     Successful and sustained remediation of reading/language 
arts or math difficulties, such as bringing students up to grade-level 
standards.

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

    Statute: Section 1116(b)(10) of Title I requires LEAs to make 
available funding to pay for transportation costs related to the 
provision of public school choice options and for supplemental 
educational services. In general, affected LEAs must spend an amount 
equal to 20 percent of their allocation under subpart A of this part to 
pay for choice-related transportation, supplemental educational 
services, or a combination of the two. In reserving such funds, an LEA 
may not reduce by more than 15 percent the allocation it provides to a

[[Page 50993]]

school identified for corrective action or restructuring.
    LEAs must use, at a minimum, an amount equal to five percent of 
their allocations under subpart A of this part to pay for supplemental 
educational services, if parents request such services. SEAs may use 
funds reserved for State-level activities under subpart A of this part 
and under part A of Title V to assist LEAs that do not have sufficient 
funds to satisfy all requests for supplemental educational services. 
For each student receiving such services, the LEA must make available 
the lesser of the LEA's per-child allocation under subpart A of this 
part or the actual cost of services.
    Current Regulations: The requirement to reserve funding for choice-
related transportation and supplemental educational services is new 
under the NCLB Act and not covered under current regulations.
    Proposed Regulations: Proposed Sec. 200.48 would clarify statutory 
ambiguity regarding the reservation of funding to pay for choice-
related transportation and supplemental educational services. 
Specifically, the proposed regulation would require LEAs to spend an 
amount equal to 20 percent of their allocation under subpart A of this 
part to provide or pay for the transportation of students exercising a 
choice option, to satisfy all requests for supplemental educational 
services, or a combination of the two. Proposed Sec. 200.48 clarifies 
that LEAs may use funds allocated under subpart A of this part, from 
other Federal education programs, or from State, local, or private 
resources to satisfy this requirement.
    Proposed Sec. 200.48 also clarifies that if the costs of satisfying 
all requests for supplemental educational services exceed an amount 
equal to 5 percent of an LEA's allocation under subpart A of this part, 
the LEA may not spend less than this amount for supplemental 
educational services. In addition, the proposed regulations would 
permit--but not require--LEAs to exceed the 20 percent cap to pay all 
choice-related transportation costs and to meet the demand for 
supplemental educational services.
    Reasons: Proposed Sec. 200.48 reflects the Secretary's goal of 
providing clarity where the statute is ambiguous and reorganizing the 
statutory requirements to facilitate a better understanding of and 
compliance with those requirements.

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

    Statute: Sections 1003 and 1116 of Title I include various 
provisions relating to SEA responsibilities in the school improvement 
process. Section 1116(f) requires an SEA to ensure that LEAs serving 
schools identified for improvement or corrective action prior to 
enactment of the NCLB Act provide public school choice options and make 
available supplemental educational services, as appropriate, not later 
than the first day of the 2002-2003 school year.
    Section 1003 requires SEAs to reserve two percent of the amounts 
received under subpart A of this part, rising to four percent in fiscal 
year 2004, to support local school improvement activities and to 
provide technical assistance to schools that LEAs have identified for 
improvement, corrective action, or restructuring and to LEAs that the 
SEA has identified for improvement or corrective action. SEAs must 
allocate not less than 95 percent of these funds directly to LEAs 
serving schools identified for improvement, corrective action, and 
restructuring, with a priority on LEAs serving the lowest-achieving 
schools and demonstrating the greatest need for assistance.
    SEAs also must ensure that the results of academic assessments in a 
given school year are available to LEAs before the beginning of the 
next school year, and that such results are provided to a school before 
an LEA may identify the school for school improvement, corrective 
action, or restructuring.
    Current Regulations: The current regulations governing SEA 
responsibilities related to school improvement reflect provisions of 
section 1116 of the ESEA that were superseded by the NCLB Act.
    Proposed Regulations: Proposed Sec. 200.49 repeats and reorganizes 
the statutory requirements related to SEA responsibilities in the 
school improvement process.
    Reasons: Proposed Sec. 200.49 reflects the Secretary's goal of 
providing clarity where the statute is ambiguous and reorganizing the 
statutory requirements to facilitate a better understanding of and 
compliance with those requirements.

Section 200.50  SEA Review of LEA Progress

    Statute: Under section 1116(c) of Title I, SEAs must annually 
review the progress of each LEA receiving funds under subpart A of this 
part to determine whether the LEA is making adequate yearly progress 
toward meeting the State's student academic achievement standards and 
whether the LEA is carrying out its responsibilities under subpart A of 
this part with respect to technical assistance, parental involvement, 
and professional development. After providing an LEA with the 
opportunity to review academic assessment data, the SEA must identify 
for improvement an LEA that has failed to make adequate yearly progress 
for two consecutive years.
    The SEA must identify for corrective action an LEA that fails to 
make adequate yearly progress for two consecutive years following the 
identification for improvement. The SEA may delay corrective action if 
the LEA makes adequate yearly progress for one year or if the LEA's 
failure to make adequate yearly progress is due to exceptional or 
uncontrollable circumstances, such as a natural disaster or a 
precipitous and unforeseen decline in the LEA's financial resources.
    The SEA may remove from improvement or corrective action status an 
LEA that makes adequate yearly progress for two consecutive years, and 
may provide rewards to LEAs that exceed adequate yearly progress for 
two consecutive years.
    Current Regulations: The current regulations governing SEA review 
of LEA progress reflect provisions of section 1116 of the ESEA that 
were superseded by the NCLB Act.
    Proposed Regulations: In general, proposed Sec. 200.50 repeats the 
statutory requirements related to SEA review of LEA progress in helping 
all students meet State academic achievement standards.
    In addition, proposed Sec. 200.50 clarifies the circumstances under 
which an SEA may include, in its review of an LEA serving schools 
operating targeted assistance programs, only the progress of students 
served or eligible for services under subpart A of this part. Proposed 
Sec. 200.50(d)(2) clarifies the timeline for identifying LEAs for 
corrective action to be consistent with the statutory requirement that 
such identification occur prior to the beginning of the school year.
    Proposed Sec. 200.50(d) and (e) also clarify SEA discretion in 
identifying LEAs for improvement or removing LEAs from improvement or 
corrective action status on the basis of assessments administered 
during the 2001-2002 school year.
    Reasons: Proposed Sec. 200.50 reflects the Secretary's goal of 
providing clarity where the statute is ambiguous and reorganizing the 
statutory requirements to facilitate a better understanding of

[[Page 50994]]

and compliance with those requirements. Specifically, the proposed 
regulation clarifies the identification timeline for LEA corrective 
action and applies the statutory provisions for entering and exiting 
improvement status--two consecutive years of failure to make adequate 
yearly progress and two consecutive years of making adequate yearly 
progress, respectively--to LEAs not covered by the transition language 
in section 1116(f) of the NCLB Act.

Section 200.51  Notice of SEA Action

    Statute: Under section 1116(c) of Title I, an SEA must publicize 
and disseminate the results of its review of an LEA to the LEA, 
teachers and other staff, parents, students, and the community. If an 
SEA identifies an LEA for improvement or corrective action, it must 
provide to the parents of each student enrolled in a school served by 
the LEA the reasons for the identification and an explanation of how 
the parents can participate in upgrading the LEA. The SEA also must 
publish and disseminate to parents and the public information on any 
corrective action it takes against an LEA.
    Current Regulations: The current regulations governing SEA notice 
requirements related to its review of LEA progress reflect provisions 
of section 1116 of the ESEA that were superseded by the NCLB Act.
    Proposed Regulations: In general, proposed Sec. 200.51 restates the 
statutory notice requirements triggered when an SEA reviews the 
progress of an LEA under Sec. 200.50. Proposed Sec. 200.51 also 
clarifies the manner in which SEAs must meet these notification 
requirements by providing guidelines for all communications with 
parents. These guidelines include the use of an understandable and 
uniform format for all required notices; the provision, to the extent 
practicable, of all notices in a language that parents can understand; 
the use of direct means of communication, such as sending materials 
home with students, as well as broader electronic means such as the 
Internet; and assurances that all notices respect the privacy of 
students and their families.
    Reasons: Proposed Sec. 200.51 reflects the Secretary's goal of 
providing clarity where the statute is ambiguous and reorganizing the 
statutory requirements to facilitate a better understanding of and 
compliance with those requirements. The proposed regulations would help 
ensure that SEAs develop a uniform approach for communicating with 
parents throughout the LEA review and improvement process.

Section 200.52  LEA Improvement; and Sec. 200.53  LEA Corrective Action

    Statute: Under section 1116(c) of Title I, if an SEA identifies an 
LEA for improvement, the LEA must develop or revise an LEA improvement 
plan that incorporates scientifically based strategies to strengthen 
instruction in core academic subjects in schools served by the LEA, 
addresses the professional development needs of the LEA's instructional 
staff by reserving for that purpose not less than 10 percent of the 
funds received by the LEA under subpart A of this part, and includes 
specific measurable goals and targets consistent with adequate yearly 
progress requirements. The improvement plan also must incorporate 
extended learning time strategies, specify LEA and SEA responsibilities 
under the plan, and promote effective parental involvement. At the 
request of the LEA, the SEA must provide or arrange for technical or 
other assistance in developing and implementing the improvement plan. 
The LEA must implement its improvement plan not later than the 
beginning of the school year after the school year in which the SEA 
identified the LEA for improvement.
    If an SEA identifies an LEA for corrective action, it must continue 
to make available technical assistance to the LEA and take at least one 
of the corrective actions specified in the statute. These corrective 
actions include deferring programmatic funds or reducing administrative 
funds, instituting a new curriculum, replacing LEA personnel, removing 
particular schools from the jurisdiction of the LEA and establishing 
alternative governance for these schools, appointing a receiver or 
trustee to administer the LEA in place of the superintendent and school 
board, and abolishing or restructuring the LEA. In addition, in 
conjunction with at least one of these actions, the SEA may authorize 
students to transfer, with transportation provided, from a school 
operated by the LEA to a higher-performing public school operated by 
another LEA.
    Current Regulations: The current regulations governing LEA 
improvement and corrective action reflect provisions of section 1116 of 
the ESEA that were superseded by the NCLB Act.
    Proposed Regulations: In general, Secs. 200.52 and 200.53 restate 
the statutory requirements for LEA improvement and corrective action. 
Proposed Sec. 200.52(a)(4) also clarifies that an LEA must implement 
its improvement plan not later than the beginning of the school year 
following the year in which the LEA administered the assessments that 
resulted in the SEA's identification of the LEA for improvement.
    Reasons: Proposed Secs. 200.52 and 200.53 reflect the Secretary's 
goal of providing clarity where the statute is ambiguous and 
reorganizing the statutory requirements to facilitate a better 
understanding of, and compliance with, those requirements. Proposed 
Sec. 200.52(a)(4) clarifies the deadline for implementation of an LEA's 
improvement plan to be consistent with the statutory requirement that 
such implementation occur prior to the beginning of the school year 
following the identification for improvement.

Section 200.54  Rights of School and School District Employees

    Statute: Section 1116(d) of Title I provides that none of the 
requirements concerning school and LEA improvement, corrective action, 
and restructuring shall be construed to alter or otherwise affect the 
rights, remedies, and procedures afforded school or LEA employees under 
Federal, State, or local law (including applicable regulations or court 
orders) or under the terms of collective bargaining agreements, 
memoranda of understanding, or other agreements between the employers 
and their employees.
    Current Regulations: The current regulations do not address this 
requirement.
    Proposed Regulations: Section 200.54(a) implements the statutory 
provision with respect to State or local laws or collective bargaining 
agreements in effect on January 8, 2002--the day the NCLB Act was 
signed into law. Section 200.54(b) makes clear, however, that any State 
or local laws, regulations, or policies adopted after January 8, 2002 
may not exempt an LEA from taking actions it may be required to take by 
Secs. 200.30-200.53 with respect to school and LEA employees. 
Similarly, Sec. 200.54(c) requires an LEA to ensure that any collective 
bargaining agreements, memoranda of understanding or other similar 
agreements negotiated after January 8, 2002 do not prohibit actions 
that the LEA may be required to take with respect to school or school 
district employees to implement Secs. 200.30-200.53.
    Reasons: These proposed regulations are necessary to clarify that 
the statutory provision applies to laws, regulations, and agreements in 
effect on January 8, 2002. States and LEAs, however, have affirmative 
responsibilities to ensure that laws, regulations, policies, and 
agreements that take effect after January 8 do not prohibit actions 
that an LEA or

[[Page 50995]]

State may be required to take to implement Secs. 200.30-200.53.

Qualifications of Teachers and Paraprofessionals

Sections 200.55 through 200.57  Highly Qualified Teachers

    Statute: Under section 9101(23) of the ESEA, a highly qualified 
teacher in any public elementary or secondary school must hold at least 
a bachelor's degree and either (1) have obtained full State teacher 
certification or (2) have passed the State teacher licensing 
examination and hold a license to teach in that State. A teacher in a 
public charter school may instead meet the certification or licensure 
requirements of the State's public charter school law. No highly 
qualified teacher may have his or her certification or licensure 
requirements waived on an emergency, temporary, or provisional basis.
    Section 9101(23) of the ESEA contains additional requirements for a 
highly qualified teacher depending on which grade level the teacher 
teaches and whether the teacher is new to the profession. An elementary 
school teacher who is new to the profession must have demonstrated 
subject knowledge and teaching skills in reading, writing, mathematics, 
and other areas of the basic elementary school curriculum by passing a 
rigorous State test. Passing a rigorous State test can mean passing a 
State-required certification or licensing test or tests in reading, 
writing, mathematics, and other areas of the basic elementary school 
curriculum.
    A middle or secondary school teacher who is new to the profession 
must have demonstrated a high level of competency in each academic 
subject that he or she teaches by (1) passing a rigorous State academic 
subject test in each of those subjects or (2) successfully completing, 
in each of those subjects, an academic major, coursework equivalent to 
an undergraduate academic major, a graduate degree, or advanced 
certification or credentialing. Passing the rigorous State test can 
mean receiving a passing level of performance on a State-required 
certification or licensing test or tests in each of the academic 
subjects that the teacher teaches.
    To be highly qualified, an elementary, middle, or secondary school 
teacher who is not new to the profession must meet the applicable 
requirements for a new teacher or must demonstrate competence in all 
academic subjects that he or she teaches based on a high objective 
uniform State standard of evaluation. To be considered a high objective 
uniform standard of evaluation, the State standard may involve 
multiple, objective measures of teacher competency and must satisfy 
these six criteria:
     Be set both for grade-appropriate academic subject matter 
knowledge and for teaching skills.
     Be aligned with challenging State academic content and 
student academic achievement standards and developed through 
consultation with core content specialists, teachers, principals, and 
school administrators.
     Provide objective and coherent information about the 
teacher's attainment of the core content knowledge in the applicable 
academic subject.
     Be applied uniformly to all teachers in the same academic 
subject and grade level throughout the State.
     Take into consideration, although not primarily, the time 
the teacher has been teaching the subject.
     Be available to the public on request.
    Under section 1119(a)(1) of the ESEA, beginning with the first day 
of the 2002-2003 school year, each LEA receiving assistance under Title 
I, part A is responsible for applying these requirements to any public 
school teacher in a core academic subject supported by part A funds who 
is hired after that day. The LEA also must have a plan to ensure that 
all public school teachers teaching in core academic subjects in the 
LEA meet these requirements by the end of the 2005-2006 school year.
    At the State level, section 1119(a)(2) of the ESEA requires each 
State to develop a plan to ensure that all teachers teaching in core 
academic subjects in the State meet these requirements by the end of 
the 2005-06 school year. The State plan must set annual measurable 
objectives for each LEA and school. At a minimum, these objectives must 
provide for an increase in the percentage of highly qualified teachers 
in each LEA and school and an annual increase in the percentage of 
teachers receiving high-quality professional development toward 
becoming highly qualified and successful. The objectives may include 
other appropriate measures to improve teacher qualifications.
    Proposed Regulations: In addition to incorporating the statutory 
provisions described above, proposed Secs. 200.55 through 200.57 would 
clarify that the requirements for teacher qualifications apply to 
teachers in core academic subjects. Proposed Sec. 200.55(a)(2) would 
clarify that a teacher in a program supported by funds under subpart A 
of this part is a teacher in a targeted assistance program paid with 
Title I, part A funds and any teacher in a schoolwide program. Proposed 
Sec. 200.56(a)(1)(iii) would clarify that a teacher meets the full 
certification and licensure requirements applicable to the years of 
experience the teacher possesses. For example, a first-year teacher 
would meet this requirement if State law requires that teacher to work 
on a probationary basis for a limited time. Proposed 
Sec. 200.56(a)(1)(iii) would also clarify that a teacher meets the 
alternate route certification program requirements if the State permits 
the teacher to assume functions as a teacher and if the teacher is 
making satisfactory progress toward full certification as prescribed by 
the State and the program.
    A teacher who does not teach a core academic subject, or an 
employee of a third-party contractor or supplemental services provider, 
would not be required to meet the teacher qualification requirements.
    Reasons: Most of the provisions in proposed Secs. 200.55 through 
200.57 would clarify unclear areas of the statute. Exempting teachers 
who do not teach in core academic subjects from the teacher 
qualification requirements, for example, would recognize and encourage 
the traditional flexibility that States have exercised in setting 
qualification standards in such areas as vocational education. Yet 
extending this flexibility would not jeopardize the statute's overall 
objective of ensuring that, through high-quality instruction, all 
students reach proficient levels of State academic student achievement 
standards.

Sections 200.58 through 200.59  Paraprofessionals

    Statute: Section 1119(c) through (g) of the ESEA contains 
requirements that apply to all paraprofessionals working in a program 
supported with Title I, part A funds and specify how each LEA receiving 
assistance under part A must ensure that those paraprofessionals meet 
those requirements.
    Under section 1119(a), each paraprofessional hired after January 8, 
2002, must have--
    (1) Completed at least two years of study at an institution of 
higher education;
    (2) Obtained an associate's or higher degree; or
    (3) Met a rigorous standard of quality and be able to demonstrate, 
through a formal State or local academic assessment, knowledge of, and 
the ability to assist in instructing reading, writing, and mathematics 
or, as appropriate, in reading readiness,

[[Page 50996]]

writing readiness, and mathematics readiness.
    Section 1119(d) requires a paraprofessional hired before January 8, 
2002, to meet these requirements within four years of that date. 
Section 1119(e) excepts from these requirements a paraprofessional who 
serves primarily as a translator, if the paraprofessional is proficient 
in English and a language other than English. Section 1119(e) also 
excepts a paraprofessional working solely on parental involvement 
activities.
    Section 1119(f) of the ESEA requires all paraprofessionals, 
regardless of hiring date, to have earned a secondary school diploma or 
the recognized equivalent.
    Section 1119(g) of the ESEA specifies that a paraprofessional may 
provide one-on-one tutoring for eligible students, provided the 
tutoring is scheduled at a time when a student would not otherwise 
receive instruction from a teacher; assist with classroom management, 
such as organizing instructional and other materials; provide 
assistance in a computer laboratory; conduct parental involvement 
activities; provide support in a library or media center; act as a 
translator; or provide, under the direct supervision of a teacher, 
instructional services.
    Section 1119(g)(3) allows a paraprofessional to assume limited 
duties assigned to similar personnel who do not work in a program 
supported with part A funds. Those duties may include duties beyond 
classroom instruction or duties that do not benefit participating 
children, if the paraprofessional spends the same proportion of time on 
those duties that similar personnel in the school spend on the same 
duties.
    Proposed regulations: Proposed Secs. 200.58 and 200.59 would 
incorporate the statutory provisions governing paraprofessionals. In 
addition, proposed Sec. 200.58(a)(2) would clarify that the term 
``paraprofessional'' applies to an individual performing instructional 
support duties and not to an individual performing only non-
instructional duties. Proposed Sec. 200.58(a)(3) would clarify that a 
paraprofessional in a program supported by funds under subpart A of 
this part means a paraprofessional in a targeted assisted program paid 
with those funds and any paraprofessional in a schoolwide program.
    Proposed Sec. 200.59(b) would clarify the duties that 
paraprofessionals may perform. Proposed Sec. 200.59(c)(2) would clarify 
that a paraprofessional works under the direct supervision of a teacher 
if the teacher plans the paraprofessional's instructional activities 
and evaluates the achievement of the students with whom the 
paraprofessional works. The paraprofessional also would be required to 
work in close physical proximity of the teacher.
    Reasons: The clarifications in proposed Secs. 200.58(a)(2) and 
200.59(b) would reinforce the consistent application of the statutory 
concept that paraprofessional qualification requirements apply to the 
performance of instructional support duties. The clarification in 
proposed Sec. 200.59(c)(2) on what would constitute working under the 
direct supervision of a teacher is intended to reinforce the statutory 
safeguards against the improper use of paraprofessionals to provide 
actual instruction.

Section 200.60  Expenditures for Professional Development

    Statute: Section 1119(h) allows an LEA to use funds under Title I, 
part A for ongoing training and professional development to help 
teachers and paraprofessionals meet the new statutory requirements 
governing their qualifications.
    Section 1119(l) requires the LEA, for each of fiscal years 2002 and 
2003, to use a minimum of 5 percent and a maximum of 10 percent of its 
part A funds for professional development aimed at ensuring that 
teachers who are not qualified become highly qualified by the end of 
the 2005-2006 school year. For each subsequent fiscal year, the LEA 
must use a minimum of 5 percent of its part A funds for that purpose. 
Section 1119(j) of the ESEA permits an LEA to combine part A funds used 
for professional development with other Federal funds, including those 
from Title II of the ESEA, and funds from other sources.
    Section 1119(k) prohibits a State from mandating, beyond the 
amounts specified in section 1119(l), the specific amount that an LEA, 
other than an LEA identified for improvement, may spend for 
professional development.
    Proposed Regulations: Proposed Sec. 200.60(a) would clarify that 
professional development funds may be used for paraprofessionals, as 
well as teachers. It also would clarify that the statutory minimum 
would not apply to an LEA, if most teachers and paraprofessionals in 
the LEA's school district already meet the statutory qualification 
requirements. Proposed Sec. 200.60(b) would clarify that an LEA may use 
additional funds under subpart A of this part for ongoing training and 
professional development to help teachers and paraprofessionals carry 
out their subpart A activities.
    Reasons: Proposed Sec. 200.60(a) is needed to ensure consistent 
application of the requirements in section 1119 and elsewhere in the 
ESEA that permit flexibility in the use of funds for professional 
development. The requirements in section 1119 contemplate that an LEA 
will give priority for the use of professional development expenditures 
to helping teachers and paraprofessionals meet the requirements for 
highly qualified teachers and the qualifications for paraprofessionals, 
respectively. Nevertheless, in cases where that priority has been met, 
and to help teachers and paraprofessionals carry out their activities 
under subpart A, funds under subpart A remain available, 
notwithstanding the mandated percentages in section 1119, to an LEA for 
ongoing training and professional development.

Participation of Eligible Children in Private Schools

    Statute: Section 1120 of Title I requires LEAs to provide on an 
equitable basis educational services or other benefits (1) to eligible 
children attending private schools; and (2) to the teachers and 
families of these children in Title I--supported parent involvement and 
professional development activities. It requires LEAs to develop these 
services in consultation with officials of the private schools and 
prescribes how an LEA determines that it is providing services on an 
equitable basis.
    Current Regulations: The current regulations governing equitable 
participation of eligible children in private schools (34 CFR 200.10 
through 200.13) implement provisions of section 1120 of the ESEA that 
were superseded by the NCLB Act.
    Proposed Regulations: Proposed Secs. 200.61 through 200.66 contain 
several provisions to address changes in the statute from the previous 
law and to clarify issues about which questions have arisen in the 
past. The proposed regulations would--
     Reiterate which children an LEA must serve;
     Clarify the equal expenditure requirement for 
instructional services;
     Define equitable expenditures for teachers and families of 
participating private school children;
     Require consultation on specified topics and expand those 
topics to include equitable services to teachers and families of 
participating private school students; and

[[Page 50997]]

     Clarify the flexibility that exists for private school 
officials to appoint representatives for consultation and sign-off 
purposes.
    Additionally, the proposed regulations would remove regulations 
governing capital expenses (currently contained in Secs. 200.15 through 
200.17), because the authority for capital expenses expires October 1, 
2003 and no funds were appropriated for fiscal year 2002.
    Reasons: The existing regulations need to be updated to reflect the 
changes made by the NCLB Act. The proposed regulations also facilitate 
implementation of the requirements for providing services to eligible 
private school students, their teachers, and their families by ensuring 
that both public and private school officials have consistent and 
accurate information to implement fully the requirements of this 
section. Finally, the proposed regulations remove current provisions 
that are no longer needed.

Allocations to LEAS

    Statute: Title I, part A, subpart 2 establishes the formulas the 
Secretary must use to determine LEA allocations for Basic Grants, 
Concentration Grants, Targeted Grants, and Education Finance Incentive 
Grants (EFIG). The Secretary makes allocations to LEAs for all four 
programs using data that include children ages 5 through 17 in families 
with incomes below the poverty line based on the most recent 
satisfactory data available from the Census Bureau, in families not in 
poverty but receiving assistance under the Temporary Assistance for 
Needy Families program, in foster homes, and in locally operated 
institutions for neglected children. These data are then adjusted to 
account for each State's per-pupil expenditure for education. The 
Targeted Grants program further requires that the Secretary adjust the 
number of children counted in the formula to give greater weight to 
those LEAs that have higher numbers or percentages of formula children. 
The formula for EFIG, in addition to including the number of children 
counted in the Title I formula and each State's per-pupil expenditure, 
uses two other factors that measure (1) a State's effort to provide 
financial support for education compared to its relative wealth based 
on its per capita income (fiscal effort factor) and (2) the degree to 
which education expenditures among school districts within a State are 
equalized (equity factor). Once a State's EFIG allocation is determined 
using all four of these factors, the Secretary distributes funds among 
LEAs within a State using a process similar to Targeted Grants by 
giving a greater weight to those LEAs that have higher numbers or 
percentages of formula children. The weights used to determine EFIG 
allocations for each LEA will vary for each State depending on its 
equity factor. After initial LEA allocations are determined for all 
four programs using the factors described, the Secretary must guarantee 
that no LEA (depending on its formula child rate) receives less than 
85, 90, or 95 percent of the amount allocated to it in the preceding 
year and ensure that no State in total receives less than the minimum 
amount prescribed in the statute.
    Title I further authorizes States to use alternative data to 
determine eligibility and redistribute allocations that the Secretary 
determined for its ``small'' LEAs with fewer than 20,000 residents. 
This provision in the law responds to concerns about the quality of 
census poverty estimates for small LEAs, which account for roughly 79 
percent of all districts nationally, but serve only 24 percent of all 
school-age children. Under this provision, SEAs have the flexibility to 
use alternative data, which the Secretary must approve, that better 
reflect the location of poor children among small LEAs in a State.
    Current Regulations: The current regulations (contained in 34 CFR 
200.20 through 200.26) outline procedures that an SEA uses to sub-
allocate county Title I, part A allocations determined by the Secretary 
to LEAs. Because the Secretary now makes Title I, part A allocations 
directly to LEAs rather than to counties, these regulations are no 
longer applicable and would be replaced by the proposed regulations.
    Proposed Regulations: Proposed Secs. 200.70 through 200.75 would 
outline procedures SEAs must follow to adjust allocations determined by 
the Secretary to account for unique situations within their States.
    Proposed Sec. 200.70 would outline the general process that the 
Secretary follows to determine Title I, part A LEA allocations and 
establish the principle that an SEA may change those allocations in 
limited instances.
    Proposed Sec. 200.71 would clarify the eligibility thresholds for 
Basic Grants, Concentration Grants, Targeted Grants, and EFIG. For 
Basic Grants, an LEA is eligible if the number of children counted for 
allocation purposes is at least 10 and exceeds two percent of its 
school-age population ages 5 through 17. An LEA is eligible for a 
Concentration Grant if it is eligible for a Basic Grant and the number 
of formula children exceeds 6,500 or 15 percent of its school-age 
population. To be eligible for a Targeted Grant and EFIG, an LEA must 
have at least 10 formula children and a formula child rate of at least 
5 percent. Targeted Grant and EFIG eligibility is based on the raw 
number of formula children without application of the weights provided 
in the statute.
    Proposed Sec. 200.72 would establish the general procedures an SEA 
must follow to adjust allocations determined by the Secretary to 
account for eligible ``new'' LEAs not on the Census list that the 
Secretary used to calculate LEA allocations and to reflect changes in 
district boundaries. Under this section, an SEA must first determine 
the number of Title I formula children for new LEAs that are not on the 
Secretary's list of LEAs, second determine the eligibility of these new 
LEAs for a Basic, Concentration, Targeted, and EFIG based on that 
number, and third provide the new LEAs with Title I funds based on the 
number of formula children that they draw from the LEAs that are on the 
Secretary's list for which the Department made allocations.
    Proposed Sec. 200.73 would outline 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. Under each program, an LEA is guaranteed at least 
85, 90, or 95 percent of the amount received in the preceding year. The 
hold-harmless percentage varies according to each LEA's formula child 
rate. For Targeted Grants and EFIG, the hold-harmless percentage is 
based on formula counts without application of the weights. Except when 
an SEA is calculating LEA reductions to account for reserves for school 
improvement, State administration, and the State academic achievement 
awards program, the hold-harmless percentage is applied separately for 
Basic Grants, Concentration Grants, Targeted Grants, and EFIG. With the 
exception of Concentration Grants, an LEA must be eligible for Basic 
Grants, Targeted Grants, and EFIG in order for the hold-harmless 
protection to apply. For Concentration Grants an LEA is entitled to its 
hold-harmless percentage based on its prior year amount for four 
consecutive years even if it no longer meets the eligibility 
thresholds.
    Proposed Sec. 200.74 would clarify the statutory procedures an SEA 
would follow if it chooses to use an alternative method to redistribute 
Title I, part A grants to LEAs with fewer than 20,000 total residents. 
Language in proposed Sec. 200.74(a) would extend this flexibility to 
EFIG.
    Proposed Sec. 200.75 would outline the flexibility available to 
States in which their Title I formula count on January 8,

[[Page 50998]]

2002 makes up less than .25 percent of the national total. These 
``small'' States may redistribute Concentration Grant allocations 
determined by the Secretary to LEAs in which the number or percentage 
of formula children equals or exceeds the Statewide average number or 
percentage.
    Reasons: The proposed regulations are needed to give guidance to 
States on how to adjust the LEA allocations determined by the Secretary 
to account for circumstances unique to each State. The Secretary 
determines LEA allocations directly using a list of LEAs provided to us 
by the Census Bureau, which is based on LEAs that existed in school 
year 1999-2000. Because that list does not match the current universe 
of LEAs in many States, SEAs must adjust the Secretary's LEA 
allocations to account for newly created LEAs (e.g. charter schools and 
LEA consolidations) and district boundary changes. An SEA must also 
adjust our allocations to (1) reserve funds for school improvement, 
State administration, and the State academic achievement awards 
programs, (2) allow for the use of alternative data to redistribute 
Title I allocations determined by the Secretary among districts with 
fewer than 20,000 total residents, and (3) in the case of ``small'' 
States, redistribute Concentration Grant allocations determined by the 
Secretary to LEAs in which the number or percentage of formula children 
equal or exceed the Statewide average number or percentage of formula 
children.
    In outlining SEA procedures for adjusting our allocations in the 
proposed regulations, we have tried to give SEAs as much flexibility as 
possible. For example, in proposed Sec. 200.72 concerning a State's use 
of alternative data to redistribute allocations determined by the 
Secretary, we believe it appropriate to extend that flexibility to EFIG 
even though the statute specifically authorizes this flexibility only 
for Basic, Concentration, and Targeted Grants.

Section 200.78  Allocation of Funds to School Attendance Areas and 
Schools

    Statute: Section 1113 of the Title I statute lays out the 
procedures an LEA must use to determine school-level Title I 
allocations once it receives its final allocation from the State. In 
calculating school-level allocations, an LEA must first determine which 
school attendance areas or schools are eligible to participate in Title 
I. As a general rule, a school attendance area is eligible if its 
percentage of children from low-income families is above 35 percent 
poverty or is at least as high as the percentage of children from low-
income families in the LEA as a whole. An LEA may also serve a school 
in an ineligible area if the percentage of children from low-income 
families enrolled in that school is equal to, or greater than, the 
percentage of such children in a participating school attendance area. 
The statute also allows an LEA to continue serving an attendance area 
or school for one more year if it has become ineligible.
    An LEA must serve eligible schools or attendance areas in rank 
order according to their poverty percentage. An LEA must serve those 
areas or schools above 75 percent poverty, including any middle or high 
schools, before it serves any with a poverty percentage below 75 
percent. Once all of the attendance areas or schools with a poverty 
rate above 75 percent have been served, an LEA may serve lower-poverty 
areas and schools either by continuing with the district-wide ranking 
or by ranking its areas or schools below 75 percent poverty according 
to grade-span groupings.
    When calculating the total number of children from low-income 
families, the LEA must include children from low-income families who 
reside in a participating area and attend private schools. If the same 
poverty data for public and private school children are not available, 
an LEA may use comparable poverty data for private school children. If 
complete actual poverty data are not available on private school 
children, an LEA may extrapolate, from actual data on a representative 
sample of private school children, the number of children from low-
income families who attend private schools. An LEA may also correlate 
sources of data or apply the low-income percentage of each 
participating public school attendance area to the number of private 
school children who reside in that area. If an LEA selects a public 
school to participate on the basis of enrollment, rather than because 
it serves an eligible school attendance area, the LEA must determine an 
equitable way to count poor private school children in order to 
calculate the amount of Title I funds available to serve private school 
children. In making this determination an LEA must consult with private 
school officials.
    If an LEA serves any attendance area with a poverty rate less than 
35 percent, the LEA must allocate to all its participating school 
attendance areas or schools an amount per poor child that equals at 
least 125 percent of the LEA's part A allocation per poor child. If an 
LEA serves only areas with a poverty rate greater than 35 percent, it 
must allocate funds in rank order on the basis of the total number of 
poor children in each area or school but is not required to allocate a 
per-pupil amount of at least 125 percent.
    Proposed Regulations: Proposed Secs. 200.77 and 200.78 would 
clarify the within-district allocation procedures in section 1113 of 
the statute. Because the section 1113 requirements in the new law are 
largely the same as the old law, the proposed regulations change little 
from the old regulations.
    Proposed Sec. 200.77 would clarify what funds an LEA must reserve 
before allocating funds to school attendance areas and schools. An LEA 
must, for example, reserve funds needed to provide comparable services 
to children in local institutions for neglected children and for 
homeless children. An LEA is also required to reserve funds, as 
appropriate, to meet the (1) transportation and supplemental services 
requirements in Sec. 200.48, unless the LEA meets those requirements 
with non-Title I funds, (2) the professional development requirements 
for LEAs identified for improvement under section 1116(c)(7)(A)(iii), 
(3) the professional development needs of teachers who are not highly 
qualified under section 1119(l), and (4) the parental support and 
involvement requirements in section 1118(a)(3)(A). An LEA may further 
reserve funds to meet the needs of children in local institutions for 
delinquent children and of neglected or delinquent children in 
community day school programs, to provide financial incentives and 
rewards (not to exceed 5 percent of the amount received by the LEA 
under Title I, part A) for teachers who serve schools identified for 
improvement, and to conduct other authorized activities such as school 
improvement and coordinated services.
    Reasons: The proposed regulations are needed to clarify statutory 
provisions concerning how LEAs allocate Title I funds within school 
districts.

Fiscal Requirements

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

    Statute: Under section 1120A(d) of Title I, an LEA may exclude 
supplemental State and local funds from supplement, not supplant and 
comparability determinations if those supplemental funds meet the 
intent and purposes of Title I.
    Current Regulations: Section 200.63 of the current regulations 
clarifies a similar provision in the old law by describing what 
criteria a State or local program

[[Page 50999]]

must meet in order to be excluded from supplement, not supplant and 
comparability determinations.
    Proposed Regulations: Proposed Sec. 200.79 would continue the 
provisions contained in Sec. 200.63 of the current regulations by 
clarifying the criteria a State or local program must meet in order to 
be excluded from supplement, not supplant and comparability 
determinations. Section 200.79(b)(1)(i) reflects the change in the 
poverty threshold for schoolwide programs under section 1114.
    Reasons: Proposed Sec. 200.79 is needed to provide continued 
guidance to LEAs on what criteria a State or local program must fulfill 
in order to meet the intent and purposes of Title I.

Subpart C--Migrant Education Program

    Subpart C of this part contains the program-specific regulations 
for the Migrant Education Program (MEP) authorized under Title I, part 
C of the statute. The proposed MEP regulations contained in 
Secs. 200.81 through 200.88 are intended to clarify ambiguous or 
unclear provisions of the statute and replace Secs. 200.40 through 
200.45 of the current regulations.

Section 200.81  Program Definitions

    Statute: Section 1309 of Title I provides a basic definition of a 
``migratory child.''
    Current Regulations: The current regulations (contained in 34 CFR 
200.40) provide definitions of several additional terms that are 
necessary to interpret the statutory definition of a ``migratory 
child.''
    Proposed Regulations: Proposed Sec. 200.81 would make no changes to 
these additional program definitions included in the current 
regulations.
    Reasons: The program definitions are included in these proposed 
regulations solely to provide, in one place, a complete set of the 
regulations published for subpart C.

Section 200.82  Use of Program Funds for Unique Program Function Costs

    Statute: Section 1302 of Title I provides the authority for SEAs to 
operate the MEP either directly or though local operating agencies. 
This authority means that the MEP, unlike the Title I, part A program, 
is a State-operated, not simply a State-administered, program and, as 
such, may carry out particular operational functions that are unique to 
the program and beyond those usually carried out by SEAs under Title I, 
part A.
    Current Regulations: The current regulations (contained in 34 CFR 
200.41) clarify that SEAs may use MEP funds to carry out ``other 
administrative activities,'' beyond those normally paid for by the SEA 
using its general Title I administrative set-aside funds. These ``other 
administrative activities'' are those that are unique to the MEP, 
including activities that are the same as, or similar to, those carried 
out by an LEA under Title I, part A. The current regulations provide 
several examples of such unique program costs.
    Proposed Regulations: Proposed Sec. 200.82 would repeat the current 
regulations, except that proposed Sec. 200.82(e) has been revised to 
clarify that MEP funds may be used for the administrative aspects of 
developing the statewide needs assessment and comprehensive State plan 
that are required in section 1306(a) of the statute and proposed 
Sec. 200.83.
    Reasons: The revision to Sec. 200.82(e) is intended to emphasize 
that SEAs may use MEP funds to conduct the statewide needs assessment 
and develop the statewide service delivery plan required under section 
1306(a) of the statute and proposed Sec. 200.83.

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

    Statute: Under section 1306(a) of Title I, each SEA receiving MEP 
funds must identify and address the special educational needs of 
migrant children in accordance with a comprehensive needs assessment 
and service delivery plan.
    Proposed Regulations: Proposed Sec. 200.83 would clarify the 
responsibilities of an SEA receiving MEP funds regarding development of 
a comprehensive needs assessment and service delivery plan. The 
proposed regulations would clarify that SEAs must deliver and evaluate 
MEP-funded services to migratory children based on a written plan that 
reflects the results of a current statewide needs assessment and 
identified performance targets. The proposed regulations would further 
clarify that this plan must be developed in consultation with the 
parents of migratory children, and that this requirement is applicable 
to both SEAs and their local operating agency projects.
    Reasons: The provisions in proposed Sec. 200.83 would outline to 
grantees the minimum requirements the Secretary believes necessary for 
the development of a comprehensive needs assessment and plan for 
service delivery required by section 1306(a) of Title I.

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

    Statute: Section 1304(c)(5) of Title I requires SEAs to provide an 
assurance that the effectiveness of the State MEP be determined, where 
feasible, using the same approaches and standards that will be used to 
assess Title I, part A.
    Current Regulations: The current regulations (contained in 34 CFR 
200.42) define the responsibilities of SEAs and their local projects in 
regard to assessing the effectiveness of their operations using the 
content and performance standards and, where possible, the assessments 
that the State has established for all children. The current 
regulations also note that, where it is not feasible to use the 
assessments the State has established for all children, e.g., in short-
term summer projects, the SEA and the local project still have a 
responsibility to use a reasonable process for assessing the 
effectiveness of the project.
    Proposed Regulations: Proposed Sec. 200.84 renames and simplifies 
the language of the regulatory requirements to clarify that SEAs have a 
responsibility to evaluate the MEP in terms of the performance targets 
established for migratory children in proposed Sec. 200.83.
    Reasons: The provisions of proposed Sec. 200.84 simplify the 
regulatory language and align it with the requirements of proposed 
Sec. 200.83.

Section 200.85  Responsibilities of SEAs and Operating Agencies for 
Improving Services to Migratory Children

    Statute: Section 1304(b)(1)(D) of the new statute requires that 
measurable goals and outcomes be used when planning and implementing 
State and local MEP projects to address the needs of migratory 
children.
    Current Regulations: The current regulations (contained in 34 CFR 
200.43) explain that, while the specific school improvement 
requirements of section 1116 of the statute do not apply to the MEP, 
SEAs and their local projects are required to use assessment results to 
improve the design of services provided to migratory children.
    Proposed Regulations: In proposed Sec. 200.85, a minor conforming 
change has been made to the language of the current regulations that 
would clarify that it is the results of the evaluations conducted under 
proposed Sec. 200.84 that are to be used to improve the design of 
services to migratory children.
    Reasons: The minor conforming change is necessary to establish the

[[Page 51000]]

correct reference to the evaluations to be conducted under proposed 
Sec. 200.84.

Section 200.86  Use of MEP funds in Schoolwide Projects

    Statute: The new statute sets a new and higher threshold for 
combining MEP funds with other funds in a schoolwide program. Section 
1306(b)(4) of Title I now requires that a schoolwide program that 
receives MEP funds must not only continue to ``address'' the identified 
needs of migratory children (as was required under the prior statute) 
but now must also ``meet'' these identified needs before it can combine 
the MEP funds with other funds in the schoolwide program. This new 
statutory requirement would be addressed in Sec. 200.28 of the proposed 
subpart A regulations.
    Current Regulations: The current regulations (contained in 34 CFR 
200.44) note that a schoolwide program may combine MEP funds with other 
funds subject to meeting the requirements found in current 
Sec. 200.8(c)(3)(ii)(B)(1).
    Proposed Regulations: In proposed Sec. 200.86, a minor conforming 
change would be made to clarify that the requirements for combining MEP 
funds are now to be found in proposed Sec. 200.28(c)(3)(i) of the 
proposed subpart A regulations.
    Reasons: The minor conforming change is necessary to establish the 
correct reference to the requirements of proposed Sec. 200.28(c)(3)(i).

Section 200.87  Responsibilities for Participation of Children in 
Private Schools

    Statute: Section 1304(c)(2) of Title I eliminates the reference, in 
the prior statute, to the applicability of section 1120 (Participation 
of Children in Private Schools) of Title I to the MEP. Instead, section 
9501(b) of the new statute makes the private school provisions of 
section 9501 of the statute applicable to the MEP.
    Current Regulations: The current regulations (contained in 34 CFR 
200.45) note that the provisions of section 1120 regarding the 
participation of private school children are applicable to the MEP.
    Proposed Regulations: In proposed Sec. 200.87, a minor conforming 
change has been made that would clarify that the provisions regarding 
the participation of children in private schools contained in section 
9501 of the new statute apply to the MEP.
    Reasons: The minor conforming change is necessary to establish the 
correct reference to the requirements of section 9501 of the new 
statute.

Section 200.88  Exclusion of Supplemental State and Local Funds From 
Supplement, not Supplant and Comparability Determinations

    Statute: Section 1120A(b) and (c) of the statute define the 
``comparability'' and ``supplement, not supplant'' requirements that 
apply to Title I, part A. Subsection (d) of section 1120A provides an 
exception to the ``comparability'' and ``supplement, not supplant'' 
requirements for State and local funds that are expended for programs 
that meet the intent and purposes of Title I. The assurances in section 
1304(c)(2) of Title I, in turn, adopt, by reference, the 
``comparability'' and ``supplement, not supplant'' requirements in 
section 1120A.
    Current Regulations: The current regulations (contained in 34 CFR 
200.63) implement the exclusion from both the ``comparability'' and 
``supplement, not supplant'' requirements in section 1120A(d), and, 
because of section 1304(c)(2), make that exclusion applicable, as a 
general regulatory provision, to the MEP as well as to Title I, part A. 
The exclusion is only for State and local funds spent for programs that 
meet the intent and purposes of Title I. That is, under current 
Sec. 200.63(b), a State or local program is considered to meet the 
intent and purposes of Title I if it has basic aspects of the Title I, 
part A program--e.g., if implemented in any schoolwide program or 
school that: (1) serves only children failing or at risk of failing to 
achieve to high standards, (2) provides supplementary educational 
services to meet the special educational needs of participating 
children, and (3) uses the State's system of assessments.
    Proposed Regulations: Proposed Sec. 200.88 would clarify that, for 
purposes of the MEP, only ``supplemental'' State or local funds that 
are used for programs specifically designed to meet the unique needs of 
migratory children may be excluded in terms of determining compliance 
with the ``comparability'' and ``supplement, not supplant'' provisions 
of the statute.
    Reasons: In the past few years, the Department has learned of 
situations in which, with State approval, one or more LEAs paid the 
costs of their summer programs with a mixture of State compensatory 
education program funds and MEP funds. While these programs served both 
migratory and non-migratory children, they paid for a portion of 
services available to migrant students out of their MEP funds, 
excluding them from the level of services provided with the State 
compensatory education program funds to non-migratory children. While 
this arrangement is consistent with the letter of current Sec. 200.63 
as written, the Department believes that it violates the intent of 
section 1304(c)(2) of the statute.
    The broad purpose of the section 1120A statutory exclusion is to 
encourage States and LEAs to use their own funds to support 
supplemental programs without concern for ``comparability'' and 
``supplement, not supplant'' considerations. The Department believes 
that the requirement in section 1304(c)(2), that the MEP be implemented 
``in a manner consistent with the objectives of'' the section 1120A 
``comparability'' and ``supplement, not supplant'' requirements, is 
best interpreted, for purposes of the MEP, to exclude only State and 
local funds used in programs that are specifically designed, like the 
MEP itself, to serve migratory children. Proposed Sec. 200.88 would 
serve to establish this reasonable interpretation through regulations.

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

    Statute: Title I, part D of the ESEA authorizes two programs that 
address the needs of neglected, delinquent, and at-risk children and 
youth. The basic provisions of this part of the new law are the same as 
the old law. Subpart l of part D establishes the State agency Neglected 
or Delinquent (N or D) program, which provides Federal financial 
assistance to State agencies that operate educational programs for 
children and youth in institutions or community day programs for N or D 
children and for youth in adult correctional facilities. Subpart 2 of 
part D authorizes a program that provides assistance to LEAs to serve 
children and youths who are in locally operated correctional facilities 
(including institutions for delinquent children) or are at risk of 
dropping out of school. Funds for this program are generated by counts 
of children, which the Department collects annually for Title I, part A 
purposes, that live in locally operated institutions for delinquent 
children or are in locally operated correctional facilities. States 
award Subpart 2 funds to LEAs with high numbers or percentages of youth 
residing in correctional facilities or institutions for delinquent 
children to conduct programs that provide an array of services to meet 
the special needs of at-risk children and youth.
    Current Regulations: The current regulations in 34 CFR 200.50 and 
200.51 contain several specific program

[[Page 51001]]

definitions and set out requirements for SEAs to follow when providing 
the Department with enrollment data used to determine State agency N or 
D allocations.
    Proposed Regulation: The proposed regulations would continue the 
regulations with no change in policy.
    Reasons: The Department needs the proposed regulations in order to 
collect the annual data used for determining part D, Subpart 1 
allocations, and to provide guidance and clarification about the 
children, who are eligible for services under part D, subpart 2.
    The definitions in proposed Sec. 200.90 would ensure that the data 
used by the Secretary to allocate funds are based on common 
definitions. For example, the definition of a regular program of 
instruction is included to ensure that the children counted are 
enrolled in actual educational programs that involve classroom 
instruction supported by State funds. The definitions of institutions 
for neglected or delinquent children and youth further require that the 
average length of stay in the institution be at least 30 days. This 
continues current policy and ensures 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.
    Proposed Sec. 200.92, which outlines the requirements for an SEA in 
providing the Department with enrollment data for use in determining 
State Agency N or D allocations, clarifies, for example, how States 
adjust their enrollment counts to account for the length of the school 
year as required by the statute.

Subpart E--General Provisions  Section 200.100  Reservation of Funds 
for School Improvement, State Administration, and the State Academic 
Achievement Award Program; and Sec. 200.103  Definitions

    Statute: Section 1003 of Title I requires that an SEA reserve two 
percent of its funds received under Title I, part A for school 
improvement activities authorized in section 1116 and 1117 of the 
statute. The amount reserved rises to four percent beginning in 2004. 
Section 1004 authorizes an SEA to reserve up to the greater of one 
percent or $400,000 from funds it receives under Title I, part A, part 
C (Migrant Education program) and part D (State Agency Neglected or 
Delinquent program) for State administration. Section 1117(c)(2)(A) 
further authorizes the SEA to reserve up to five percent of the Title 
I, part A amount received in excess of the prior-year amount for the 
State academic awards program.
    Current Regulations: The current regulations (contained in 34 CFR 
200.60 through 200.65) outline procedures for how a State reserves 
funds for State administration and school improvement activities, 
provides guidance to an SEA on the use of funds reserved for State 
administration, and defines certain terms that apply to all programs 
covered by the regulations.
    Proposed Regulations: Proposed Sec. 200.100 would clarify new 
procedures an SEA must follow when reserving funds for school 
improvement, State administration, and the State academic achievement 
awards program. When reserving funds for these activities, the SEA must 
first reserve funds for school improvement activities authorized under 
sections 1116 and 1117 of the Title I statute. In reserving funds for 
school improvement, an SEA may not reduce the sum of the Title I, part 
A allocations each LEA would receive below the total amount the LEA 
received in the preceding year. After reserving funds for school 
improvement, an SEA may then reserve funds for State administration and 
the State academic achievement awards program. In reducing LEA 
allocations, the SEA has the flexibility of (1) ensuring that no LEA 
receives, in total, less than 85, 90, or 95 percent, as applicable, of 
the amount it received in the preceding year (depending on its 
percentage of formula children) or (2) reducing each LEA at the same 
rate even if that results in an LEA receiving less than its hold-
harmless amount.
    In addition, proposed Secs. 200.100 and 200.103 would (1) address 
the use of funds reserved for State administration and (2) provide 
certain definitions that apply to all of the programs governed by the 
proposed regulations.
    Reasons: The provisions in proposed Sec. 200.100 work in 
combination with the requirements outlined in proposed Secs. 200.70 
through 200.75 for allocating Title I, part A funds to an LEA by 
establishing the procedures that an SEA follows when reserving funds 
for school improvement, State administration, and the State academic 
achievement awards program. The key issue in proposed Sec. 200.100 is 
whether the Department should give an SEA the flexibility to reduce an 
LEA below its hold-harmless amount when reserving funds for State 
administration and the State academic awards program so that all LEAs 
would contribute proportionately to these activities.
    In the past, an SEA has always followed Title I's hold-harmless 
provisions when reserving funds for State administration, provided 
there was enough money available to honor the hold-harmless 
requirement. However, in ensuring that no LEA receives less than its 
hold-harmless amount, any LEA that gained additional funds under the 
Title I formula had to give up all or part of its gain in order to 
bring any LEA falling below its hold-harmless amount up to that level. 
As a result, any LEA that gained funds under the formula contributed a 
disproportionately larger share of its Title I allocations to support 
these Statewide activities, while an LEA funded at its hold-harmless 
level contributed nothing.
    In order to provide more equity in how each LEA contributes to the 
reserve for State administration and the State academic achievement 
award program, the language in proposed Sec. 200.100(d) would give a 
State the option of proportionately reducing each LEA's total Title I 
allocation even if the outcome results in some LEAs receiving less than 
their hold-harmless amounts. If the SEA adopts this option, every LEA 
would contribute an equal proportion of its Title I allocation to these 
Statewide activities.
    The language in proposed Sec. 200.103 is the same as in the current 
regulations and would define certain terms that are used throughout the 
proposed regulations.

Executive Order 12866

1. Potential Costs and Benefits
    The proposed costs have been reviewed in accordance with Executive 
Order 12866. Under the terms of the Order, the Department has assessed 
the costs and benefits of this regulatory action.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these proposed regulations, the Department has 
determined that the benefits of the proposed regulations justify the 
costs. The Department has also determined that this regulatory action 
does not unduly interfere with State, local, and tribal governments in 
the exercise of their governmental functions.
    To assist the Department in complying with the requirements of 
Executive Order 12866, the Secretary invites comment 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 programs.

Summary of Benefits and Costs

    As noted elsewhere, most of the regulations the Secretary proposes 
to

[[Page 51002]]

issue through this notice would add clarity where the statute is 
ambiguous or unclear or would reorganize statutory provisions to 
facilitate a better understanding of their requirements. The proposed 
regulations would not add significantly to the costs of implementing 
the programs authorized by ESEA Title I or alter the benefits that the 
Secretary believes will be obtained through successful implementation. 
The vast majority of the implementation costs and benefits will stem 
from the underlying legislation.
    The programs authorized by Title I of the Elementary and Secondary 
Education Act, as reauthorized by the No Child Left Behind Act of 2001, 
have as their goal the education of all students, including students 
who are economically disadvantaged, limited English proficient, 
disabled, migrant, residing in institutions for neglected or delinquent 
youth and adults, or members of other groups typically considered ``at 
risk,'' so that they can achieve to challenging content and academic 
achievement standards. Thus, the benefits that will be obtained through 
the reauthorized Title I and its implementing regulations are those 
primarily of a more educated society. National data sets and studies by 
prominent researchers have demonstrated repeatedly that better 
education has major benefits, both economic and non-economic, not only 
for the individuals who receive it but for society as a whole. Nations 
that invest in quality education enjoy higher levels of growth and 
productivity, and a high-quality education system is an indispensable 
element of a strong economy and successful civil society.
    Data from the 1999 Current Population Survey, conducted by the 
Census Bureau, indicate that adults with a high school diploma (but no 
further education) had a median income of $23,061, compared to $17,015 
for those with no diploma and $15,098 for those with less than 9 years 
of education. High school graduates are more likely to continue their 
education and receive the additional skills and knowledge necessary to 
compete for jobs in a high-technology, knowledge-driven economy. 
Scholars have also found strong, positive correlations between higher 
levels of schooling and higher lifetime earnings, higher savings rates, 
and reduced costs of job search.
    Researchers have, in addition, found that more and better education 
correlates with other outcomes that, while not directly related to 
employment and earnings, have a major, positive benefit on society. 
More educated individuals lead healthier lives and have lower mortality 
rates. They are more likely to donate time and money to charity, and to 
vote in elections. Researchers have demonstrated the intergenerational 
impact of education, as the educational level of parents is a positive 
predictor of children's health, cognitive development, education, 
occupational status, and future earnings. In addition, education is 
negatively correlated with criminal activity and incarceration, and 
more educated mothers are less likely to have daughters who give birth 
out of wedlock as teens.
    The reauthorized Title I programs, and the regulations that the 
Department is proposing for those programs, will also lead to 
improvements in the qualifications of teachers, both in programs 
supported by Title I and in schools generally. The Department believes 
that the new teacher qualifications provisions will also convey major 
benefits on students and on society generally. Research has found that 
the academic success of children is more dependent on teacher quality 
than on any other variable, with the exception of family background; it 
is, in other words, the most important school-related determinant of 
achievement.
    The major costs to States and to LEAs imposed by the statute and 
the proposed regulations are the costs of administering the Title I 
programs: at the State level, distributing funds to LEAs, monitoring 
LEA activities, providing technical assistance, and carrying out other 
activities specified in the statute, and, at the local level, 
administering programs in schools and classrooms, providing 
professional development to teachers and other staff, and ensuring 
program accountability, among other things. The Department believes 
that these activities will be financed through the appropriations for 
Title I and other Federal programs and that the responsibilities 
encompassed in the law and regulations will not impose a financial 
burden that States and LEAs will have to meet from non-Federal 
resources. For purposes of the Unfunded Mandates Reform Act of 1995, 
this rule does not include a Federal mandate that might result in 
increased expenditures by State, local, and tribal governments, or 
increased expenditures by the private sector of more than $100 million 
in any one year.
2. Clarity of the Regulations
    Executive Order 12866 and the Presidential Memorandum on ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following:
     Are the requirements in the proposed regulations clearly 
stated?
     Do the proposed regulations contain technical terms or 
other wording that interferes with their clarity?
     Does the format of the proposed regulations (grouping and 
order of sections, use of headings, paragraphing, etc.) aid or reduce 
their clarity?
     Would the proposed regulations be easier to understand if 
we divided them into more (but shorter) sections? (A ``section'' is 
preceded by the symbol ``Sec. '' and a numbered heading; for example, 
Sec. 200.12 Single State accountability system.)
     Could the description of the proposed regulations in the 
``Supplementary Information'' section of this preamble be more helpful 
in making the proposed regulations easy to understand? If so, how?
     What else could we do to make the proposed regulations 
easier to understand?
    Send any comments that concern how the Department could make these 
proposed regulations easier to understand to the person listed in the 
ADDRESSES section of the preamble.

Initial Regulatory Flexibility Analysis

    This Initial Regulatory Flexibility Analysis (IRFA) has been 
prepared in accordance with the Regulatory Flexibility Act. It involves 
proposed rules under Title I of the Elementary and Secondary Education 
Act, as amended by the NCLB Act. Its provisions require LEAs, without 
regard to size, to take certain actions to improve student academic 
achievement.
1. Reasons for, and Objectives of, Proposed Rules
    The purpose of the proposed rules is to implement recent changes to 
Title I of the ESEA made by the NCLB Act.
2. Legal Basis
    We are proposing the rules under the authority in section 1901(a) 
of Title I.
3. Small Entities Subject to the Proposed Rules
    The small entities that would be affected by these proposed 
regulations are small LEAs receiving Federal funds under Title I 
programs.
4. Reporting, Recordkeeping and Other Compliance Requirements
    Among other requirements, LEAs must: (1) Publicize and disseminate 
the results of its annual progress review, (2)

[[Page 51003]]

notify parents and teachers of any school identified for improvement or 
subject to corrective action or restructuring, (3) publicize and 
disseminate information regarding any action taken by the school and 
LEA to address the problems that led to the identification, and (4) for 
schools subject to restructuring, prepare a plan to carry out 
alternative governance arrangements. An LEA also must maintain in its 
records, and provide to the SEA, a written affirmation, signed by 
officials of each private school with participating children or 
appropriate private school representatives, that the required 
consultation has occurred.
5. Duplicative, Overlapping or Conflicting Federal Rules
    We believe that there are no rules that duplicate, overlap or 
conflict with the proposed rules.
6. Agency Action to Minimize Effect on Small Entities
    The Regulatory Flexibility Act directs us to consider significant 
alternatives that would accomplish the stated objectives, while 
minimizing any significant adverse impact on small entities. We believe 
there are no regulatory alternatives as the portions of these 
regulations that would affect small entities restate statutory 
requirements. Moreover, activities required under these proposed 
regulations would be financed through the appropriations for Title I 
programs, and the responsibilities encompassed in the law and 
regulations would not impose a financial burden that small entities 
would have to meet from non-Federal resources.
7. Request for Comments
    Little data are available that would permit a separate analysis of 
how the proposed changes affect small entities in particular. 
Therefore, the Secretary specifically invites comments on the 
differential effects of the proposed regulations on small entities, and 
whether there may be further opportunities to reduce any potential 
adverse impact or increase potential benefits resulting from these 
proposed regulations without impeding the effective and efficient 
administration of Title I programs. Commenters are requested to 
describe the nature of any effect and provide empirical data and other 
factual support for their views to the extent possible. These comments 
will be considered in the preparation of the final regulations and the 
accompanying Final Regulatory Flexibility Analysis, and will be placed 
in the public comment file.

Federalism

    Executive Order 13132 requires us to ensure meaningful and timely 
input by State and local elected officials in the development of 
regulatory policies that have federalism implications.
    ``Federalism implications'' means substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Although we do not believe these proposed 
requirements would have federalism implications as defined in Executive 
Order 13132, we encourage State and local elected officials to review 
them and to provide comments.

Paperwork Reduction Act of 1995

    Title I, part A of the Elementary and Secondary Education, as 
amended by the No Child Left Behind Act, contains several provisions 
that require State educational agencies (SEAs), Local educational 
agencies (LEAs), or schools to collect or disseminate information. They 
are: Sections 200.26, 200.27, 200.28, 200.30, 200.31, 200.34, 200.36, 
200.36, 200.37, 200.38, 200.39, 200.41, 200.42, 200.43, 200.45, 200.46, 
200.47, 200.49, 200.50, 200.51, 200.52, 200.57, and 200.62. Sections 
200.12, 200.13, and 200.33 are covered under OMB control number 1810-
0576. Section 200.53 is covered under OMB control number 1810-0516. 
Sections 200.70 through 200.75 are covered under OMB control numbers 
1810-0620 and 1810-0622. Section 200.91 is covered under OMB control 
number 1810-0060.
    SEAs must: (1) Provide annual notice to potential supplemental 
service providers of the opportunity to provide such services, and (2) 
maintain an updated list of approved providers from which parents may 
select, and (3) publicly report on standards and techniques for 
monitoring the quality and effectiveness of the services offered by 
each approved provider and for withdrawing approval from a provider 
that fails, for two consecutive years, to contribute to increasing the 
academic proficiency of students receiving supplemental services. As 
part of their responsibility to annually review the progress of each 
LEA to determine whether schools are making adequate yearly progress, 
SEAs must: (1) Provide, before the beginning of the next school year, 
the results of academic assessments administered as part of the State 
assessment system in a given school year to LEAs, (2) publicize and 
disseminate the results of the State review, (3) notify parents when 
LEAs are identified for improvement or corrective action, including 
providing information on the corrective action, and (4) notify the 
Secretary of Education of major factors that have significantly 
affected student academic achievement in schools identified for 
improvement. Additionally, under Title I, part D, States must submit a 
count of children and youth under the age of 21 enrolled in a regular 
program of instruction operated or supported by State agencies in 
institutions or community day programs for neglected children and youth 
and adult correctional institutions.
    As part of their responsibility to annually review the progress of 
schools to determine whether they are making adequate yearly progress, 
each LEA must (1) publicize and disseminate the results of its annual 
progress review, (2) notify parents and teachers of any school 
identified for improvement or subject to corrective action or 
restructuring, (3) publicize and disseminate information regarding any 
action taken by the school and LEA to address the problems that lead to 
the identification, and (4) for schools subject to restructuring, 
prepare a plan to carry out alternative governance arrangements. LEAs 
also must maintain in their records, and provide to the SEA, written 
affirmation signed by officials of each private school with 
participating children, or appropriate private school representatives, 
that the required consultation has occurred.
    At the school level, an eligible school choosing to operate a 
schoolwide program must develop a comprehensive schoolwide plan and 
maintain records demonstrating that it addresses the intents and 
purpose of each Federal program included.
    The total estimated burden hours for SEA activities covered by the 
paperwork requirements is 55,952 across 52 SEAs. The total estimated 
burden hours for LEA activities covered by the paperwork requirements 
is 959,480 hours across 13,335 LEAs. The total estimated burden hours 
for school-level activities is 1,410,976 hours. Almost all the burden 
hours at the LEA and school level result from statutory requirements 
that require: (1) LEAs to prepare restructuring plans for schools that 
do not make adequate yearly progress after one full year in corrective 
action, and (2) schools seeking to operate schoolwide programs to 
develop schoolwide program plans. The actual impact on an individual 
LEA or school will vary depending on whether the LEA or school is 
subject to these specific requirements.

[[Page 51004]]

    Sec. 200.83 outlines an SEA's responsibility to implement its State 
Title I, part C (Migrant Education) program through a comprehensive 
needs assessment and a comprehensive State plan for service delivery. 
Sec. 200.84 outlines an SEA's responsibility for evaluating the 
effectiveness of its Title I, part C (Migrant Education) program. The 
yearly estimated public reporting burden for the collection of 
information to implement these two proposed regulatory requirements is 
19,405 hours.
    The Office of Management and Budget is currently reviewing the 
information collections pertaining to this regulation. We invite 
comments on the paperwork sections of this proposed regulation by 
September 5, 2002. If you want to comment on the information collection 
requirements, please send your comments to Jacquelyn C. Jackson at the 
address listed under ADDRESSES.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.ed.gov/legislation/FedRegister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at:http://www.access.gpo.gov/
nara/index.html.

(Catalog of Federal Domestic Assistance Numbers: 84.010 Improving 
Programs Operated by Local Educational Agencies)

List of Subjects in 34 CFR Part 200

    Administrative practice and procedure, Adult education, Children, 
Coordination, Education, Education of disadvantaged children, Education 
of children 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: July 30, 2002.
Rod Paige,
Secretary of Education.
    The Secretary proposes to amend part 200 of title 34 of the Code of 
Federal Regulations as follows:

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

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

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

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

    2. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec. 200.10 (as revised in a final rule published in 
the Federal Register on July 5, 2002 (67 FR 45038)) to read as follows:

Participation in NAEP

    2a. In subpart A to part 200, remove the undesignated center 
headings ``Schoolwide Programs'', ``Participation of Eligible Children 
in Private Schools'', ``Capital Expenses'', Procedures for the Within-
State Allocation of LEA Program Funds'', and ``Procedures for the 
Within-District Allocation of LEA Program Funds''.
    3. Revise Sec. 200.11 and place it under the new undesignated 
center heading ``Participation in NAEP'' in subpart A of part 200 to 
read as follows:


Sec. 200.11  Participation in NAEP.

    (a) State participation. Beginning in the 2002-2003 school year, 
each State that receives funds under subpart A of this part must 
participate in biennial State academic assessments of fourth and eighth 
grade reading and mathematics under the State National Assessment of 
Educational Progress (NAEP), if the Department pays the costs of 
administering those assessments.
    (b) Local participation. In accordance with section 1112(b)(1)(F) 
of the Act, and notwithstanding section 441(d)(1) of the National 
Education Statistics Act, an LEA that receives funds under subpart A of 
this part, if selected, must participate in the State-NAEP assessments 
referred to in paragraph (a) of this section.

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

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

State Accountability System

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


Sec. 200.12  Single State accountability system.

    (a)(1) Each State must demonstrate in its State plan that the State 
has developed and is implementing, beginning with the 2002-2003 school 
year, a single, statewide accountability system.
    (2) The State's accountability system must be effective in ensuring 
that all public elementary and secondary schools and LEAs in the State 
make adequate yearly progress as defined in Secs. 200.13 through 
200.20.
    (b)(1) Except as provided in paragraph (b)(2) of this section, each 
State must use the same accountability system for all public elementary 
and secondary schools and all LEAs in the State.
    (2) The State may, but is not required to, subject schools and LEAs 
not participating under subpart A of this part to the requirements of 
section 1116 of the Act.
    (c) The State's accountability system must--
    (1) Be based on the State's academic standards under Sec. 200.1, 
academic assessments under Sec. 200.2, and other academic indicators 
under Sec. 200.19;
    (2) Take into account the achievement of all public elementary and 
secondary school students;
    (3) Include sanctions and rewards that the State will use to hold 
public elementary and secondary schools and LEAs accountable for 
student achievement and for making adequate yearly progress;
    (4) Establish guidelines to ensure that alternate assessments are 
used only when appropriate for students with disabilities who have the 
most significant cognitive disabilities; and
    (5) Require schools and LEAs to report the percentage of students 
taking an alternate assessment.

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

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

Adequate Yearly Progress

    7. Revise Sec. 200.13 and place it under the new undesignated 
center heading ``Adequate Yearly Progress'' in subpart A of part 200 to 
read as follows:

[[Page 51005]]

Sec. 200.13  Adequate yearly progress in general.

    (a) Each State must demonstrate in its State plan what constitutes 
adequate yearly progress of the State and of all public schools and 
LEAs in the State--
    (1) Toward enabling all public school students to meet the State's 
student academic achievement standards; while
    (2) Working toward the goal of narrowing the achievement gaps in 
the State, its LEAs, and its schools.
    (b) A State must define adequate yearly progress, in accordance 
with Secs. 200.14 through 200.20, in a manner that--
    (1) Except as provided in paragraph (c) of this paragraph, applies 
the same high standards of academic achievement to all public school 
students in the State;
    (2) Is statistically valid and reliable;
    (3) Results in continuous and substantial academic improvement for 
all students;
    (4) Measures the progress of all public schools, LEAs, and the 
State--
    (i) Based primarily on the State's academic assessment system under 
Sec. 200.2; or
    (ii) Consistent with paragraph (d) of this section;
    (5) Measures progress separately for reading/language arts and for 
mathematics;
    (6) Is the same for all public schools and LEAs in the State; and
    (7) Consistent with Sec. 200.7, applies the same intermediate 
goals, annual measurable objectives, and other academic indicators 
under Secs. 200.17 through 200.19 to each of the following:
    (i) All public school students.
    (ii) Students in each of the following subgroups:
    (A) Economically disadvantaged students.
    (B) Students from major racial and ethnic groups.
    (C) Students with disabilities, as defined in section 9101(5) of 
the Act.
    (D) Students with limited English proficiency, as defined in 
section 9101(25) of the Act.
    (c)(1) For students with the most significant cognitive 
disabilities who take an alternate assessment, a State may, through a 
documented and validated standards-setting process, define achievement 
standards that--
    (i) Are aligned with the State's academic content standards; and
    (ii) Reflect professional judgment of the highest learning 
standards possible for those students.
    (2)(i) In calculating adequate yearly progress for schools, a State 
may permit the use of the achievement standards in paragraph (c)(1) of 
this section, provided that schools in the aggregate do not exceed the 
State and LEA limitations in paragraph (c)(2)(ii) of this section.
    (ii) In calculating adequate yearly progress for States and LEAs, a 
State may not permit the use of the achievement standards in paragraph 
(c)(1) of this section for more than 0.5 percent of all students in the 
grades assessed.
    (iii) For purposes of calculating adequate yearly progress for 
States and LEAs, the State must require that grade-level academic 
content and achievement standards established under Sec. 200.1 apply to 
any students taking alternate assessments that exceed the number 
established under paragraph(c)(2)(ii) of this section.
    (d)(1) The State must establish a way to hold accountable schools--
    (i) In which no grade level is assessed under the State's academic 
assessment system; or
    (ii) Whose purpose is to serve students for less than a full 
academic year.
    (2) The State is not required to administer a formal assessment to 
meet the requirement in paragraph (d)(1) of this section.

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

    8. Add Sec. 200.14 and place it under the new undesignated center 
heading ``Adequate Yearly Progress'' in subpart A of part 200 to read 
as follows:


Sec. 200.14  Components of adequate yearly progress.

    A State's definition of adequate yearly progress must include all 
of the following:
    (a) A timeline in accordance with Sec. 200.15.
    (b) Starting points in accordance with Sec. 200.16.
    (c) Intermediate goals in accordance with Sec. 200.17.
    (d) Annual measurable objectives in accordance with Sec. 200.18.
    (e) Other academic indicators in accordance with Sec. 200.19.

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

    9. Revise Secs. 200.15 through 200.17 and place them under the new 
undesignated center heading ``Adequate Yearly Progress'' in subpart A 
of part 200 to read as follows:


Sec. 200.15  Timeline.

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

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

Sec. 200.16  Starting points.

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

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


Sec. 200.17  Intermediate goals.

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

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


[[Page 51006]]


    10. Add Secs. 200.18 and 200.19 and place them under the new 
undesignated center heading ``Adequate Yearly Progress'' in subpart A 
of part 200 to read as follows:


Sec. 200.18  Annual measurable objectives.

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

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


Sec. 200.19  Other academic indicators.

    (a) Each State must include in its definition of adequate yearly 
progress--
    (1) The graduation rate for public high schools, which means--
    (i) The percentage of students who graduate from high school with a 
regular diploma (not including a GED) in the standard number of years; 
or
    (ii) Another definition, developed by the State and approved by the 
Secretary in the State plan, that more accurately measures the high 
school graduation rate; and
    (2) At least one academic indicator for public elementary schools 
and at least one academic indicator for public middle schools, such as 
those under paragraph (b) of this section.
    (b) The State may include additional academic indicators determined 
by the State, including, but not limited to, the following:
    (1) Additional State or locally administered assessments not 
included in the State assessment system under Sec. 200.2.
    (2) Grade-to-grade retention rates.
    (3) Attendance rates.
    (4) Percentages of students completing gifted and talented, 
advanced placement, and college preparatory courses.
    (c) The State may, but is not required to, increase the goals of 
its other academic indicators over the course of the timeline under 
Sec. 200.15.
    (d) In carrying out paragraphs (a) and (b) of this section, a State 
must ensure that the indicators are--
    (1) Valid and reliable;
    (2) Consistent with relevant, nationally recognized professional 
and technical standards, if any; and
    (3) Consistent throughout the State within each grade span.
    (e) Except as provided in Sec. 200.20(b)(2), a State--
    (1) May not use the indicators in paragraphs (a) and (b) of this 
section to reduce the number, or change the identity, of schools that 
would otherwise be subject to school improvement, corrective action, or 
restructuring if those indicators were not used; but
    (2) May use the indicators to identify additional schools for 
school improvement, corrective action, or restructuring.

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

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


Sec. 200.20  Making adequate yearly progress.

    A school or LEA makes adequate yearly progress if it complies with 
paragraph (c) and with either paragraph (a) or (b) of this section 
separately in reading/language arts and in mathematics.
    (a) A school or LEA makes adequate yearly progress if each group of 
students under Sec. 200.13(b)(7) meets or exceeds the State's--
    (1) Annual measurable objectives under Sec. 200.18; and
    (2) Other academic indicators consistent with Sec. 200.19(e).
    (b) If students in any group under Sec. 200.13(b)(7) in a school or 
LEA do not meet the State's annual measurable objectives under 
Sec. 200.18, the school or LEA makes adequate yearly progress if--
    (1) The percentage of students in that group below the State's 
proficient achievement level decreased by at least 10 percent from the 
preceding year; and
    (2) That group made progress on one or more of the State's academic 
indicators under Sec. 200.19 or the LEA's academic indicators under 
Sec. 200.70(a)(2)(ii).
    (c)(1) A school or LEA makes adequate yearly progress if, 
consistent with paragraph (e) of this section--
    (i) Not less than 95 percent of the students enrolled in each group 
under Sec. 200.13(b)(7) take the State assessments under Sec. 200.2; 
and
    (ii) The group is of sufficient size to produce statistically 
reliable results under Sec. 200.7(a).
    (2) If a group under Sec. 200.13(b)(7) is not of sufficient size to 
produce statistically reliable results under paragraph (c)(1)(ii) of 
this section, the State must still include students in that group in 
its State assessments under Sec. 200.2.
    (d) For the purpose of determining whether a school or LEA has made 
adequate yearly progress, a State may establish a uniform procedure for 
averaging data that includes one or more of the following:
    (1) Averaging data across school years. (i) A State may average 
data from the school year for which the determination is made with data 
from one or two school years immediately preceding that school year.
    (ii) If a State averages data across school years, the State--
    (A) May not delay--
    (1) Implementing the assessments under Sec. 200.5(a)(2) and (b);
    (2) Determining adequate yearly progress under Secs. 200.13 through 
200.20 on the basis of assessments under Sec. 200.5(a)(1);
    (3) Reporting data resulting from the assessments under 
Sec. 200.5(a)(2) and (b); or
    (4) Implementing the requirements in section 1116 of the Act; but
    (B) May delay determining adequate yearly progress on the basis of 
assessments under Sec. 200.5(a)(2) until it has data from two or three 
years to average.
    (2) Combining data across grades. Within each subject area, the 
State may combine data across grades in a school or LEA.
    (e)(1) In determining the adequate yearly progress of an LEA, a 
State must include all students who were enrolled in schools in the LEA 
for a full academic year, as defined by the State.
    (2) In determining the adequate yearly progress of a school, the 
State may not include students who were not enrolled in that school for 
a full academic year, as defined by the State.

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


Sec. 200.21  Adequate yearly progress of a State.

    For each State that receives funds under subpart A of this part and 
under subpart 1 of part A of Title III of the Act, the Secretary must, 
beginning with the 2004-2005 school year, annually review whether the 
State has--
    (a) Made adequate yearly progress as defined in Secs. 200.13 
through 200.20 for each group of students in Sec. 200.13(b)(7); and
    (b) Met its annual measurable achievement objectives relating to 
the development and attainment of English proficiency by limited 
English

[[Page 51007]]

proficient students under section 3122(a) of the Act.

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

    12. Remove and reserve Secs. 200.22 through 200.24 and place them 
under the new undesignated center heading ``Adequate Yearly Progress'' 
in subpart A of part 200.
    12a. Add a new undesignated center heading following Sec. 200.24 to 
read as follows:

Schoolwide Programs

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


Sec. 200.25  Schoolwide program purpose and eligibility.

    (a) Purpose. (1) The purpose of a schoolwide program is to improve 
academic achievement throughout a school so that all students 
demonstrate proficiency related to the State's academic content and 
student academic achievement standards, particularly those students 
furthest away from demonstrating proficiency.
    (2) The improved achievement is to result from improving the entire 
educational program of the school.
    (b) Eligibility. (1) A school may operate a schoolwide program if--
    (i) The school's LEA determines that the school serves an eligible 
attendance area or is a participating school under section 1113 of the 
Act; and
    (ii) For the initial year of the schoolwide program--
    (A) The school serves a school attendance area in which not less 
than 40 percent of the children are from low-income families; or
    (B) Not less than 40 percent of the children enrolled in the school 
are from low-income families.
    (2) In determining the percentage of children from low-income 
families under paragraph (b)(1)(ii) of this section, the LEA may use a 
measure of poverty that is different from the measure or measures of 
poverty used by the LEA to identify and rank school attendance areas 
for eligibility and participation under subpart A of this part.
    (c) Participating students and services. A school operating a 
schoolwide program is not required to--
    (1) Identify particular children under subpart A of this part as 
eligible to participate in a schoolwide program; or
    (2) Provide services to those children that supplement the services 
they would receive, as otherwise required by section 1120A(b) of the 
Act.
    (d) Funding. An eligible school may consolidate and use funds or 
services under subpart A of this part, together with other Federal, 
State, and local funds that the school receives, to operate a 
schoolwide program in accordance with Secs. 200.25 through 200.28.

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

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


Sec. 200.26  Development and evaluation of program plan.

    (a) Development of plan. (1) A school must develop for its 
schoolwide program a comprehensive schoolwide program plan that 
describes how the school will improve academic achievement so that all 
students demonstrate proficiency on the State's academic content and 
student academic achievement standards, particularly those students 
furthest away from demonstrating proficiency.
    (2) The school's process for developing its schoolwide plan must--
    (i) Reflect an understanding of the school's academic strengths and 
needs related to the State's academic content and student academic 
achievement standards;
    (ii) Focus on scientifically based research that reflects best 
practices for improving student academic achievement;
    (iii) Involve the individuals who will have responsibility for 
implementing the schoolwide program plan in accordance with paragraph 
(d)(2) of this section;
    (3) Reflect a process that occurs over time; and
    (4) Provide for regular evaluation of the program's effectiveness 
related to the State's academic content and student academic 
achievement standards.
    (b) Comprehensive needs assessment. An eligible school that desires 
to operate a schoolwide program must first conduct a comprehensive 
needs assessment of the entire school that--
    (1) Takes into account the needs of migratory children as defined 
in section 1309(2) of the Act;
    (2) Is developed with the participation of individuals who will 
carry out the comprehensive schoolwide program plan as that plan is 
described in paragraph (c) of this section;
    (3) Is based on information about all students in the school, 
including all the demographic groups of students listed in section 
1111(b)(2)(C) of the Act in relation to the State academic standards 
described in Sec. 200.1;
    (4) Reflects current achievement data that will help the school 
understand the subjects and skills in which teaching and learning need 
to be improved; and
    (5) Reflects data that will identify--
    (i) Students and groups of students who are not yet achieving to 
the State academic content standards and the State student academic 
achievement standards; and
    (ii) The specific academic needs of those students that are to be 
addressed in the schoolwide program plan.
    (c) Comprehensive schoolwide program plan. (1) After conducting the 
comprehensive needs assessment described in paragraph (b) of this 
section, the school must develop a comprehensive plan for assisting all 
students to achieve proficiency in relation to the State's academic 
content and student academic achievement standards.
    (2) The school must develop the comprehensive plan in consultation 
with the LEA and its school support team or other technical assistance 
provider under section 1117 of the Act.
    (3) The comprehensive plan must--
    (i) Describe how the school will carry out the implementation 
components described in Sec. 200.27;
    (ii) Describe how the school will use resources under this part and 
from other sources to carry out the implementation components described 
in Sec. 200.27; and
    (iii) Include a list of SEA and LEA programs and other Federal 
programs under Sec. 200.28 that the school will consolidate in the 
schoolwide program.
    (d) Schoolwide program planning process. (1) The school must 
develop the comprehensive schoolwide program plan, including the 
comprehensive needs assessment over a one-year period unless--
    (i) The LEA, after considering the recommendations of its technical 
assistance providers under section 1117 of the Act, determines that 
less time is needed to develop and implement the schoolwide program; or
    (ii) The school is operating a schoolwide program on or before 
January 7, 2002, in which case the school may continue to operate its 
program, but must amend its existing plan to reflect the provisions of 
Secs. 200.25 through 200.28 during the first year that it receives 
funds under subpart A of this part.
    (2) The school must develop the comprehensive plan with the 
involvement of parents and other members of the community to be served 
and individuals who will carry out the plan, including--
    (i) Teachers, principals, and administrators, including 
administrators of programs described in other parts of Title I of the 
Act;

[[Page 51008]]

    (ii) If appropriate, pupil services personnel, technical assistance 
providers, and other school staff; and
    (iii) If the plan relates to a secondary school, students from the 
school.
    (3) If appropriate, the school must develop the comprehensive plan 
in coordination with other programs including those under Reading 
First, Early Reading First, Even Start, the Carl D. Perkins Vocational 
and Technical Education Act of 1998, and the Head Start Act.
    (4) The comprehensive plan must remain in effect for the duration 
of the school's participation under Secs. 200.25 through 200.28.
    (5) The school must review and revise the plan as necessary to 
reflect changes in the schoolwide program or changes in State academic 
content standards and student academic achievement standards.
    (e) Evaluation. The school must include in the comprehensive 
schoolwide program plan provisions to--
    (1) Evaluate the implementation and results achieved by the 
schoolwide program using the State's annual assessment data, other 
State indicators of academic achievement, and other locally determined 
indicators of achievement;
    (2) Determine whether the schoolwide program has been effective in 
increasing the extent to which students are meeting the State's 
academic content and student academic achievement standards, 
particularly those students who had been furthest from achieving those 
standards; and
    (3) Amend the plan, as necessary, based on the results of this 
evaluation, to ensure continuous improvement of the schoolwide program.

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

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


Sec. 200.27  Schoolwide program implementation components.

    The schoolwide program must include the following implementation 
components:
    (a) Schoolwide reform strategies. The schoolwide program must 
incorporate reform strategies in the overall instructional program. 
Those strategies must--
    (1) Address the needs of all children in the school, particularly 
the needs of students furthest away from demonstrating proficiency 
related to the State's academic content and student academic 
achievement standards; and
    (2) Reflect effective methods and instructional practices that are 
based on scientifically based research, as defined in section 9101 of 
the Act, and that--
    (i) Improve the teaching of reading/language arts, mathematics, 
and, at least by the 2005-2006 school year, science, consistent with 
the State's academic content and student academic achievement standards 
throughout the school;
    (ii) Strengthen the core academic program; and
    (iii) Increase the amount and quality of learning time.
    (b) Instruction by highly qualified teachers. A schoolwide program 
must ensure instruction by highly qualified teachers and ongoing 
professional development by--
    (1) Including strategies to ensure instruction in the schoolwide 
program by highly qualified teachers, as defined in Sec. 200.56;
    (2)(i) Providing high-quality and ongoing professional development 
in accordance with sections 1119 and 9101 of the Act for teachers, 
principals, paraprofessionals and, if appropriate, pupil services 
personnel, parents, and other staff; and
    (ii) Aligning professional development with the State's academic 
content and student academic achievement standards;
    (3) Devoting sufficient resources to carry out effectively the 
professional development activities described in paragraph (b)(2) of 
this section; and
    (4) Including teachers in professional development activities 
regarding the use of academic assessments described in Sec. 200.2 and, 
thus, to enable them to provide information on, and to improve, the 
achievement of individual students and the overall instructional 
program.
    (c) Parental involvement. (1) A schoolwide program must involve 
parents in the planning, review, and improvement of the comprehensive 
schoolwide program plan.
    (2) A schoolwide program must have a parental involvement policy 
that--
    (i) Includes strategies to increase parental involvement in 
accordance with sections 1118 and 9101 of the Act, such as family 
literacy services;
    (ii) Describes how the school will provide individual student 
academic assessment results, including an interpretation of those 
results, to the parents of students who participate in the academic 
assessments required by Sec. 200.1;
    (iii) Makes the comprehensive schoolwide program plan available to 
the LEA, parents, and the public; and
    (iv) Provides the information contained in the comprehensive 
schoolwide program plan in an understandable and uniform format and, to 
the extent practicable, in a language that the parents can understand.
    (d) Additional support. A schoolwide program must improve the 
entire educational program of a school, particularly with respect to 
those students who are furthest away from demonstrating proficiency in 
attaining the State's academic content and academic achievement 
standards. The schoolwide program must--
    (1) Include activities to ensure that students who experience 
difficulty attaining the proficient or advanced levels of academic 
achievement standards required by Sec. 200.1 will be provided with 
effective, timely additional support;
    (2) Ensure that those students' difficulties are identified on a 
timely basis; and
    (3) Provide sufficient information to teachers on which to base 
effective assistance to those students.
    (e) Transition. A schoolwide program in an elementary school must 
include plans for assisting preschool students in the successful 
transition from early childhood programs, such as Head Start, Even 
Start, Early Reading First, or a preschool program under Individuals 
with Disabilities Act or a State-run preschool program, to the 
schoolwide program.

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

Sec. 200.28  Use of funds in a schoolwide program.

    (a) Supplemental funds. A school operating a schoolwide program 
must use funds available to carry out Secs. 200.25 through 200.28 only 
to supplement funds that would, in the absence of funds under subpart A 
of this part, be made available from non-Federal sources for the 
school, including funds needed to provide services that are required by 
law for children with disabilities and children with limited English 
proficiency.
    (b) Prekindergarten Program. A school that is eligible for a 
schoolwide program under Sec. 200.1 may use funds made available under 
subpart A of this part to establish or enhance prekindergarten programs 
for children below the age of 6, such as Even Start programs or Early 
Reading First programs.
    (c) Availability of other Federal funds. (1) In addition to funds 
under subpart A of this part, a school may use for its schoolwide 
program Federal funds of any program administered by the Secretary that 
is included in the most recent notice published for this purpose in the 
Federal Register.

[[Page 51009]]

    (2) For the purposes of Secs. 200.25 through 200.28, the authority 
of the school to consolidate funds from other Federal programs also 
applies to the consolidation of services provided to the school with 
those funds.
    (3) If a school consolidates and uses funds from other programs in 
its schoolwide program, the school must meet the following 
requirements:
    (i) Migrant education. Before the school chooses to consolidate in 
its schoolwide program funds received under part C of Title I of the 
Act, the school must--
    (A) Use these funds first to meet the identified unique educational 
needs of migratory students that result from the effects of their 
migratory lifestyle, and to permit these students to participate 
effectively in school; and
    (B) Document that these needs have been met.
    (ii) Indian education. The school may consolidate funds received 
under subpart 1 of part A of Title VII of the Act if the parent 
committee established by the LEA under section 7114(c)(4) of the Act 
approves the inclusion of these funds.
    (iii) Special education. (A) The school may consolidate funds 
received under part B of the Individuals with Disabilities Education 
Act (IDEA).
    (B) However, the amount of funds consolidated may not exceed the 
amount received by the LEA under part B of IDEA for that fiscal year, 
divided by the number of children with disabilities in the jurisdiction 
of the LEA, and multiplied by the number of children with disabilities 
participating in the schoolwide program.
    (C) The school may also consolidate funds received under section 
8003(d) of the Act (Impact Aid) for children with disabilities in a 
schoolwide program.
    (D) A school that consolidates funds under part B of IDEA or 
section 8003(d) of the Act may use those funds for any activities under 
its schoolwide program plan but must comply with all other requirements 
of part B of IDEA, to the same extent it would if it did not 
consolidate funds under part B of IDEA or section 8003(d) of the Act in 
the schoolwide program.
    (4)(i) Except as provided in paragraph (c)(4)(ii) of this section, 
a school that consolidates and uses in a schoolwide program funds from 
different Federal programs administered by the Secretary--
    (A) Is not required to meet the statutory or regulatory 
requirements of that program applicable at the school level;
    (B) Is not required to maintain separate fiscal accounting records, 
by program, that identify the specific activities supported by those 
particular funds;
    (C) Is required to maintain records that demonstrate that the 
schoolwide program, as a whole, addresses the intent and purposes of 
each of the Federal programs whose funds were consolidated to support 
the schoolwide program; and
    (D) Is required to ensure that the needs of the intended 
beneficiaries of those other programs are addressed.
    (ii) A school that chooses to use funds from other Federal programs 
must meet the requirements of those other programs relating to--
    (A) Health;
    (B) Safety;
    (C) Civil rights;
    (D) Student and parental participation and involvement;
    (E) Services to private school children;
    (F) Maintenance of effort;
    (G) Comparability of services;
    (H) Use of Federal funds to supplement, not supplant non-Federal 
funds in accordance with paragraph (a) of this section; and
    (I) Distribution of funds to SEAs or LEAs.

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

    16. Place reserved Sec. 200.29 under the undesignated center 
heading ``Schoolwide Programs'' in subpart A of part 200.
    17. Add a new undesignated center heading to subpart A of part 200 
and place it after reserved Sec. 200.29 to read as follows:

LEA and School Improvement

    18. Transfer Secs. 200.30 through 200.69 to subpart A of part 200.
    19. Revise Sec. 200.30 and place it under the new undesignated 
center heading ``LEA and School Improvement'' in subpart A of part 200 
to read as follows:


Sec. 200.30  Local review.

    (a) Each LEA receiving funds under subpart A of this part must use 
the results of the State assessment system described in Sec. 200.2 to 
review annually the progress of each school served under subpart A of 
this part to determine whether the school is making adequate yearly 
progress in accordance with Sec. 200.20.
    (b)(1) In reviewing the progress of an elementary or secondary 
school operating a targeted assistance program, an LEA may choose to 
review the progress of only the students in the school who are served, 
or are eligible for services, under subpart A of this part.
    (2) The LEA may exercise the option under paragraph (b)(1) of this 
section so long as the students selected for services under the 
targeted assistance program are those with the greatest need for 
academic assistance, consistent with the requirements of section 1115 
of the Act.
    (c)(1) To determine whether schools served under subpart A of this 
part are making adequate yearly progress, an LEA also may use any 
additional academic assessments or any other academic indicators 
described in the LEA's plan.
    (2) These indicators--
    (i) May identify additional schools for school improvement or in 
need of corrective action or restructuring;
    (ii) May permit a school to make adequate yearly progress if, in 
accordance with Sec. 200.20(b), the school also reduces the percentage 
of a student group failing to meet the State's proficient level of 
academic achievement by at least 10 percent; and
    (iii) With the exception described in paragraph (ii), may not be 
used to reduce the number of or change the schools that would otherwise 
be identified for school improvement, corrective action, or 
restructuring if the LEA did not use these additional indicators.
    (d) The LEA must publicize and disseminate the results of its 
annual progress review to parents, teachers, principals, schools, and 
the community.
    (e) The LEA must review the effectiveness of actions and activities 
that schools are carrying out under subpart A of this part with respect 
to parental involvement, professional development, and other activities 
assisted under subpart A of this part.

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

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


Sec. 200.31  Opportunity to review school-level data.

    (a) Before identifying a school for school improvement, corrective 
action, or restructuring, an LEA must provide the school with an 
opportunity to review the school-level data, including academic 
assessment data, on which the proposed identification is based.
    (b)(1) If the principal of a school that an LEA proposes to 
identify for school improvement, corrective action, or restructuring 
believes, or a majority of the parents of the students enrolled in the 
school believe, that the proposed identification is in error for 
statistical or other substantive reasons, the principal

[[Page 51010]]

may provide supporting evidence to the LEA.
    (2) The LEA must consider the evidence referred to in paragraph 
(b)(1) of this section before making a final determination.
    (c) The LEA must make public a final determination of the status of 
the school with respect to identification not later than 30 days after 
it provides the school with the opportunity to review the data on which 
the proposed identification is based.

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

Sec. 200.32  Identification for school improvement.

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

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

Sec. 200.33  Identification for corrective action.

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

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

Sec. 200.34  Identification for restructuring.

    (a) If a school continues to fail to make adequate yearly progress 
after one full school year of corrective action under Sec. 200.42, the 
LEA must prepare a restructuring plan for the school and make 
arrangements to implement the plan.
    (b) If the school continues to fail to make adequate yearly 
progress, the LEA must implement the restructuring plan no later than 
the beginning of the school year following the year in which the LEA 
developed the restructuring plan under paragraph (a) of this section.

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

Sec. 200.35  Delay and removal.

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

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

Sec. 200.36  Communication with parents.

    (a) Throughout the school improvement process, the State, LEA, and 
school must communicate with the parents of each child attending the 
school.
    (b) The State, LEA, and school must ensure that, regardless of the 
method or media used, it provides information to parents--
    (1) In an understandable and uniform format, including alternative 
formats upon request; and
    (2) To the extent practicable, in a language that parents can 
understand.

[[Page 51011]]

    (c) The State, LEA, and school must provide information to parents-
-
    (1) Directly, through such means as regular mail or, if possible, 
e-mail; and
    (2) Through broader means of dissemination such as the Internet, 
the media, and public agencies serving the student population and their 
families.
    (d) All communications must respect the privacy of students and 
their families.

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

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

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

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

Sec. 200.38  Information about action taken.

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

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


Sec. 200.39  Responsibilities resulting from identification for school 
improvement.

    (a) If an LEA identifies a school for school improvement under 
Sec. 200.32--
    (1) The LEA must--
    (i) Not later than the first day of the school year following 
identification, with the exception described in Sec. 200.32(f), provide 
all students enrolled in the school with the option to transfer, in 
accordance with Sec. 200.44, to another public school served by the 
LEA; and
    (ii) Ensure that the school receives technical assistance in 
accordance with Sec. 200.40; and
    (2) The school must develop or revise a school improvement plan in 
accordance with Sec. 200.41.
    (b) If a school fails to make adequate yearly progress by the end 
of the first full school year after the LEA has identified it for 
improvement under Sec. 200.32, the LEA must--
    (1) Continue to provide all students enrolled in the school with 
the option to transfer, in accordance with Sec. 200.44, to another 
public school served by the LEA;
    (2) Continue to ensure that the school receives technical 
assistance in accordance with Sec. 200.40; and
    (3) Make available supplemental educational services in accordance 
with Sec. 200.45.

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

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


Sec. 200.40  Technical assistance.

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

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

Sec. 200.41  School improvement plan.

    (a)(1) Not later than three months after an LEA has identified a 
school for

[[Page 51012]]

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

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

Sec. 200.42  Corrective action.

    (a) Definition. ``Corrective action'' means action by an LEA that--
    (1) Substantially and directly responds to--
    (i) The consistent academic failure of a school that led the LEA to 
identify the school for corrective action; and
    (ii) Any underlying staffing, curriculum, or other problems in the 
school;
    (2) Is designed to increase substantially the likelihood that each 
group of students described in Sec. 200.13(b)(7) and enrolled in the 
school will meet or exceed the State's proficient levels of achievement 
as measured by the State assessment system; and
    (3) Is consistent with State law.
    (b) Requirements. If an LEA identifies a school for corrective 
action, in accordance with Sec. 200.33, the LEA must do the following:
    (1) Continue to provide all students enrolled in the school with 
the option to transfer to another public school in accordance with 
Sec. 200.44.
    (2) Continue to ensure that the school receives technical 
assistance consistent with the requirements of Sec. 200.40.
    (3) Make available supplemental educational services in accordance 
with Sec. 200.45.
    (4) Take at least one of the following corrective actions:
    (i) Replace the school staff who are relevant to the school's 
failure to make adequate yearly progress.
    (ii) Institute and fully implement a new curriculum, including the 
provision of appropriate professional development for all relevant 
staff, that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement 
for low-achieving students and of enabling the school to make adequate 
yearly progress.
    (iii) Significantly decrease management authority at the school 
level.
    (iv) Appoint one or more outside experts to advise the school on--
    (A) Revising the school improvement plan developed under 
Sec. 200.41 to address the specific issues underlying the school's 
continued failure to make adequate yearly progress and resulting in 
identification for corrective action; and
    (B) Implementing the revised improvement plan.
    (v) Extend for that school the length of the school year or school 
day.
    (vi) Restructure the internal organization of the school.

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

Sec. 200.43  Restructuring.

    (a) Definition. ``Restructuring'' means a major reorganization of a 
school's governance arrangement by an LEA that--
    (1) Makes fundamental reforms, such as significant changes in the 
school's staffing and governance, to improve student academic 
achievement in the school;
    (2) Has substantial promise of enabling the school to make adequate 
yearly progress as defined under Secs. 200.13 through 200.20; and
    (3) Is consistent with State law.
    (b) Requirements. If the LEA identifies a school for restructuring 
in accordance with Sec. 200.34, the LEA must do the following:
    (1) Continue to provide all students enrolled in the school with 
the option to transfer to another public school in accordance with 
Sec. 200.44.
    (2) Make available supplemental educational services in accordance 
with Sec. 200.45.
    (3) Prepare a plan to carry out one of the following alternative 
governance arrangements:
    (i) Reopen the school as a public charter school.
    (ii) Replace all or most of the school staff, which may include the 
principal, who are relevant to the school's failure to make adequate 
yearly progress.
    (iii) Enter into a contract with an entity, such as a private 
management

[[Page 51013]]

company, with a demonstrated record of effectiveness, to operate the 
school as a public school.
    (iv) Turn the operation of the school over to the SEA, if permitted 
under State law and agreed to by the State.
    (v) Any other major restructuring of a school's governance 
arrangement consistent with this section.
    (4) Provide to parents and teachers--
    (i) Prompt notice that the LEA has identified the school for 
restructuring; and
    (ii) An opportunity for parents and teachers to--
    (A) Comment before the LEA takes any action under a restructuring 
plan; and
    (B) Participate in the development of any restructuring plan.
    (c) Implementation. If a school continues to fail to make adequate 
yearly progress, the LEA must implement the restructuring plan no later 
than the beginning of the school year following the year in which the 
LEA developed the restructuring plan under paragraph (b)(3) of this 
section.
    (d) Rural schools. On request, the Secretary will provide technical 
assistance for developing and carrying out a restructuring plan to any 
rural LEA--
    (1) That has fewer than 600 students in average daily attendance at 
all of its schools; and
    (2) In which all of the schools have a School Locale Code of 7 or 
8, as determined by the National Center for Education Statistics.

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


Sec. 200.44  Public school choice.

    (a) Requirements. (1) In the case of a school identified for school 
improvement under Sec. 200.32, for corrective action under Sec. 200.33, 
or for restructuring under Sec. 200.34, the LEA must provide all 
students enrolled in the school with the option to transfer to another 
public school served by the LEA.
    (2) The LEA must offer this option not later than the first day of 
the school year following the year in which the LEA administered the 
assessments that resulted in its identification of the school for 
improvement, corrective action, or restructuring.
    (3) The schools to which students may transfer under paragraph 
(a)(1) of this section--
    (i) May not include schools that--
    (A) The LEA has identified for improvement, corrective action, or 
restructuring; or
    (B) Are persistently dangerous as determined by the State; and
    (ii) May include one or more public charter schools.
    (4) If more than one school meets the requirements of paragraph 
(a)(3) of this section, the LEA must--
    (i) Provide to parents of students eligible to transfer under 
paragraph (a)(1) of this section a choice of more than one such school; 
and
    (ii) Take into account the parents' preferences among the choices 
offered under paragraph (a)(4)(i) of this section.
    (5) The LEA must offer the option to transfer described in this 
section unless it is prohibited by State law in accordance with 
paragraph (b) of this section.
    (6) Except as described in Secs. 200.32(d) and 200.33(c), if a 
school was in school improvement or subject to corrective action before 
January 8, 2002, the State must ensure that the LEA provides a public 
school choice option in accordance with paragraph (a)(1) of this 
section not later than the first day of the 2002-2003 school year.
    (b) Limitation on State law prohibition. An LEA may invoke the 
State law prohibition on choice described in paragraph (a)(4) of this 
section only if the State law prohibits choice through restrictions on 
public school assignments or the transfer of students from one public 
school to another public school.
    (c) Desegregation plans. (1) If an LEA is subject to a 
desegregation plan, whether that plan is voluntary, court-ordered, or 
required by a Federal or State administrative agency, the LEA is not 
exempt from the requirement in paragraph (a)(1) of this section.
    (2) In determining how to provide students with the option to 
transfer to another school, the LEA may take into account the 
requirements of the desegregation plan.
    (3) If the desegregation plan forbids the LEA from offering the 
transfer option required under paragraph (a)(1) of this section, the 
LEA must secure appropriate changes to the plan to permit compliance 
with paragraph (a)(1) of this section.
    (d) Priority. (1) In providing students the option to transfer to 
another public school in accordance with paragraph (a)(1) of this 
section, the LEA must give priority to the lowest-achieving children 
from low-income families.
    (2) The LEA must determine family income on the same basis that the 
LEA uses to make allocations to schools under subpart A of this part.
    (e) Status. Any public school to which a student transfers under 
paragraph (a)(1) of this section must ensure that the student is 
enrolled in classes and other activities in the school in the same 
manner as all other students in the school.
    (f) Duration of transfer. (1) If a student exercises the option 
under paragraph (a)(1) of this section to transfer to another public 
school, the LEA must permit the student to remain in that school until 
the student has completed the highest grade in the school.
    (2) The LEA's obligation to provide transportation for the student 
may be limited under the circumstances described in paragraph (h) of 
this section and in Sec. 200.48.
    (g) No eligible schools within an LEA. If all public schools to 
which a student may transfer within an LEA are identified for school 
improvement, corrective action, or restructuring, the LEA--
    (1) Must, to the extent practicable, establish a cooperative 
agreement for a transfer with one or more other LEAs in the area; and
    (2) May offer supplemental educational services to eligible 
students under Sec. 200.45 in schools in their first year of school 
improvement under Sec. 200.39.
    (h) Transportation. (1) If a student exercises the option under 
paragraph (a)(1) of this section to transfer to another public school, 
the LEA must, consistent with Sec. 200.48, provide or pay for the 
student's transportation to the school.
    (2) The LEA's obligation to provide transportation for the student 
ends at the end of the school year in which the school from which the 
student transferred is no longer identified by the LEA for school 
improvement, corrective action, or restructuring.
    (i) Students with disabilities and students covered under section 
504 of the Rehabilitation Act of 1973 (Section 504). For students with 
disabilities under the IDEA and students covered under Section 504, the 
public school choice option must provide a free appropriate public 
education as that term is defined in section 602(8) of the IDEA or 34 
CFR 104.33, respectively.

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


Sec. 200.45  Supplemental educational services.

    (a) Definition. ``Supplemental educational services'' means 
tutoring and other supplemental academic enrichment services that are--
    (1) In addition to instruction provided during the school day;
    (2) Specifically designed to--
    (i) Increase the academic achievement of eligible students as 
measured by the State's assessment system; and
    (ii) Enable these children to attain proficiency in meeting State 
academic achievement standards; and

[[Page 51014]]

    (3) Of high quality and research-based.
    (b) Requirement. (1) If an LEA identifies a school for improvement 
under Sec. 200.39(b), corrective action under Sec. 200.33, or 
restructuring under Sec. 200.34, the LEA must arrange, consistent with 
paragraph (d) of this section, for each eligible student in the school 
to receive supplemental educational services from a State-approved 
provider selected by the student's parents.
    (2) Except as described in Secs. 200.32(d) and 200.33(c), if the 
school was in school improvement status for two or more consecutive 
school years or subject to corrective action on January 7, 2002, the 
State must ensure that the LEA makes available, consistent with 
paragraph (d) of this section, supplemental educational services to all 
eligible students not later than the first day of the 2002-2003 school 
year.
    (3) The LEA must, consistent with Sec. 200.48, continue to make 
available supplemental educational services to eligible students until 
the end of the school year in which the LEA is making those services 
available.
    (4)(i) At the request of an LEA, the SEA may waive, in whole or in 
part, the requirement that the LEA make available supplemental 
educational services if the SEA determines that--
    (A) None of the providers of those services on the list approved by 
the SEA under Sec. 200.47 makes those services available in the area 
served by the LEA or within a reasonable distance of that area; and
    (B) The LEA provides evidence that it is not otherwise able to make 
those services available.
    (ii) The SEA must notify the LEA, within 30 days of receiving the 
LEA's request for a waiver under paragraph (b)(4)(i) of this section, 
whether it approves or disapproves the request, and if it disapproves, 
the reasons for the disapproval, in writing.
    (iii) An LEA that receives a waiver must renew its request for that 
waiver on an annual basis.
    (c) Eligibility. (1) Only students from low-income families are 
eligible for supplemental educational services.
    (2) The LEA must determine family income on the same basis that the 
LEA uses to make allocations to schools under subpart A of this part.
    (d) Priority. If the amount of funds available for supplemental 
educational services is insufficient to provide services to each 
student whose parents request these services, the LEA must give 
priority to the lowest-achieving students.

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

    22. Add new Secs. 200.46 through 200.49 and place them under the 
new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:


Sec. 200.46  LEA responsibilities for supplemental educational 
services.

    (a) If an LEA is required to make available supplemental 
educational services under Sec. 200.39(b)(3), Sec. 200.42(b)(3), or 
Sec. 200.43(b)(2), the LEA must do the following:
    (1) Provide the notice to parents described in Sec. 200.37(b)(5).
    (2) If requested, assist parents in choosing a provider from the 
list of approved providers maintained by the SEA.
    (3) Apply fair and equitable procedures for serving students if the 
number of spaces at approved providers is not sufficient to serve all 
eligible students whose parents request services.
    (4) Ensure that eligible students with disabilities and students 
covered under Section 504 receive appropriate supplemental educational 
services and accommodations in the provision of those services.
    (5) Not disclose to the public, without the written permission of 
the student's parents, the identity of any student who is eligible for, 
or receiving, supplemental educational services.
    (b)(1) In addition to meeting the requirements in paragraph (a) of 
this section, the LEA must enter into an agreement with each provider 
selected by a parent or parents.
    (2) The agreement must--
    (i) Require the LEA to develop, in consultation with the parents 
and the provider--
    (A) A statement of specific achievement goals for the student;
    (B) A description of how the student's progress will be measured; 
and
    (C) A timetable for improving achievement that, in the case of a 
student with disabilities under IDEA or a student covered under Section 
504, is consistent with the student's individualized education program 
under section 614(d) of the IDEA or the student's individualized 
services under Section 504;
    (ii) Describe procedures for regularly informing the student's 
parents and teachers of the student's progress;
    (iii) Provide for the termination of the agreement if the provider 
is unable to meet the goals and timetables specified in the agreement;
    (iv) Specify how the LEA will pay the provider; and
    (v) Prohibit the provider from disclosing to the public, without 
the written permission of the student's parents, the identity of any 
student who is eligible for, or receiving, supplemental educational 
services.
    (3) The LEA may not pay the provider for religious worship or 
instruction.
    (c) If State law prohibits an SEA from carrying out one or more of 
its responsibilities under Sec. 200.47 with respect to those who 
provide, or seek approval to provide, supplemental educational 
services, each LEA must carry out those responsibilities with respect 
to its students who are eligible for those services.

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


Sec. 200.47  SEA responsibilities for supplemental educational 
services.

    (a) If one or more LEAs in a State are required to make available 
supplemental educational services under Sec. 200.39(b)(3), 
Sec. 200.42(b)(3), or Sec. 200.43(b)(2), the SEA for that State must do 
the following:
    (1)(i) In consultation with affected LEAs, parents, teachers, and 
other interested members of the public, promote participation by as 
many providers as possible.
    (ii) This promotion must include annual notice to potential 
providers of--
    (A) The opportunity to provide supplemental educational services; 
and
    (B) Procedures for obtaining the SEA's approval to be a provider of 
those services.
    (2) Consistent with paragraph (b) of this section, develop and 
apply to potential providers objective criteria that are based on a 
demonstrated record of effectiveness in increasing the academic 
proficiency of students in subjects relevant to meeting the State 
academic content standards and the State student achievement standards 
described under Sec. 200.1;
    (3) Maintain by LEA an updated list of approved providers from 
which parents may select.
    (4) Develop, implement, and publicly report on standards and 
techniques for--
    (i) Monitoring the quality and effectiveness of the services 
offered by each approved provider; and
    (ii) Withdrawing approval from a provider that fails, for two 
consecutive years, to contribute to increasing the academic proficiency 
of students receiving supplemental educational services from that 
provider.
    (5) Ensure that eligible students with disabilities and students 
covered under Section 504 receive appropriate supplemental educational 
services and accommodations in the provision of those services.
    (b) Standards for approving providers. (1) As used in this section 
and in

[[Page 51015]]

Sec. 200.46, ``provider'' means a non-profit entity, a for-profit 
entity, an LEA, a public school, including a public charter school, or 
a private school that----
    (i) Has a demonstrated record of effectiveness in increasing 
student academic achievement;
    (ii) Is capable of providing supplemental educational services that 
are consistent with the instructional program of the LEA and with the 
State academic content standards and State student achievement 
standards described under Sec. 200.1;
    (iii) Is financially sound; and
    (iv) In the case of a public school, has not been identified under 
Secs. 200.32, 200.33, or 200.34.
    (2) In order for the SEA to include a provider on the State list, 
the provider must agree to--
    (i)(A) Provide parents of each student receiving supplemental 
educational services and the responsible LEA with information on the 
progress of the student in increasing achievement.
    (B) This information must be in an understandable and uniform 
format, including alternative formats upon request, and, to the extent 
practicable, in a language that the parents can understand;
    (ii) Ensure that the instruction the provider gives and the content 
the provider uses--
    (A) Are consistent with the instruction provided and the content 
used by the LEA and the SEA;
    (B) Are aligned with State student academic achievement standards; 
and
    (C) Are secular, neutral, and nonideological; and
    (iii) Meet all applicable Federal, State, and local health, safety, 
and civil rights laws.
    (3) A private provider may not, on the basis of disability, exclude 
a qualified student with disabilities or a student covered under 
Section 504 if the student can, with minor adjustments, be provided 
supplemental educational services designed to meet the individual 
educational needs of the student unless otherwise provided by law.
    (4) As a condition of approval, a State may not require a provider 
to----
    (i) Hire only staff who meet the requirements under Secs. 200.55 
and 200.56; or
    (ii) Document that its instructional strategies include 
scientifically based research, as that term is defined in section 
9101(37) of the Act.

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


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

    (a) Amounts required. (1) To pay for choice-related transportation 
and supplemental educational services required under section 1116 of 
the Act, an LEA may use--
    (i) Funds allocated under subpart A of this part;
    (ii) Funds, where authorized, from other Federal education 
programs; and
    (iii) State, local, or private resources.
    (2) Unless a lesser amount is needed, the LEA must spend an amount 
equal to 20 percent of its allocation under subpart A of this part to--
--
    (i) Provide, or pay for, transportation of students exercising a 
choice option under Sec. 200.44;
    (ii) Satisfy all requests for supplemental educational services 
under Sec. 200.45; or
    (iii) Pay for both paragraph (a)(2)(i) and (ii) of this section, 
except that----
    (A) If the cost of satisfying all requests for supplemental 
educational services under Sec. 200.45 exceeds an amount equal to 5 
percent of the LEA's allocation under subpart A of this part, the LEA 
may not spend less than this amount for supplemental educational 
services; and
    (B) The LEA may not include costs for transportation or 
administration in meeting this 5 percent requirement
    (3) If the amount specified in paragraph (a)(2) of this section is 
insufficient to pay all choice-related transportation costs, the LEA 
may, but is not required to, make available any additional needed funds 
from Federal, State, or local sources.
    (4) To assist an LEA that does not have sufficient funds to make 
available supplemental educational services to all students requesting 
these services, an SEA may use funds that it reserves under part A of 
Title I and part A of Title V.
    (b) Cap on school-level reduction. (1) An LEA may not, in applying 
paragraph (a) of this section, reduce by more than 15 percent the total 
amount it makes available under subpart A of this part to a school it 
has identified for corrective action or restructuring.
    (c) Per-child funding for supplemental educational services. For 
each student receiving supplemental educational services under 
Sec. 200.45, the LEA must make available the lesser of----
    (1) The amount of its allocation under subpart A of this part, 
divided by the number of students from families below the poverty 
level, as counted under section 1124(c)(1)(A) of the Act; or
    (2) The actual costs of the supplemental educational services 
received by the student.

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


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

    (a) Transition requirements for public school choice and 
supplemental educational services. (1) Except as described in 
Secs. 200.32(d) and 200.33(c), if a school was in school improvement or 
subject to corrective action on January 7, 2002, the SEA must ensure 
that the LEA for that school provides public school choice in 
accordance with Sec. 200.44 not later than the first day of the 2002-
2003 school year.
    (2) Except as described in Secs. 200.32(d) and 200.33(c), if a 
school was in school improvement status for two or more consecutive 
school years or subject to corrective action on January 7, 2002, the 
SEA must ensure that the LEA for that school makes available 
supplemental educational services in accordance with Sec. 200.45 not 
later than the first day of the 2002-2003 school year.
    (b) State reservation of funds for school improvement. (1) In 
accordance with Sec. 200.100(a), an SEA must reserve two percent of the 
amount it receives under subpart A of this part for fiscal years 2002 
and 2003, and four percent of the amount it receives under subpart A of 
this part for fiscal years 2004 through 2007, to----
    (i) Support local school improvement activities;
    (ii) Provide technical assistance to schools identified for 
improvement, corrective action, or restructuring; and
    (iii) Provide technical assistance to LEAs that the SEA has 
identified for improvement or corrective action in accordance with 
Sec. 200.50.
    (2) Of the amount it reserves under paragraph (a)(1) of this 
section, the SEA must--
    (i) Allocate not less than 95 percent directly to LEAs serving 
schools identified for improvement, corrective action, and 
restructuring to support improvement activities; or
    (ii) If requested by an LEA, directly provide for these improvement 
activities or arrange to provide them through such entities as school 
support teams or educational service agencies.
    (3) In providing assistance to LEAs under paragraph (b)(2) of this 
section, the SEA must give priority to LEAs that--
    (i) Serve the lowest-achieving schools;
    (ii) Demonstrate the greatest need for this assistance; and
    (iii) Demonstrate the strongest commitment to ensuring that this 
assistance will be used to enable the lowest-achieving schools to meet 
the progress goals in the school improvement plans under Sec. 200.41.

[[Page 51016]]

    (c) Technical assistance. The SEA must make technical assistance 
available, through the statewide system of support and improvement 
required by section 1117 of the Act, to schools that LEAs have 
identified for improvement, corrective action, or restructuring.
    (d) LEA failure. If the SEA determines that an LEA has failed to 
carry out its responsibilities with respect to school improvement, 
corrective action, or restructuring, the SEA must take the corrective 
actions it determines to be appropriate and in compliance with State 
law.
    (e) Assessment results. (1) The SEA must ensure that the results of 
academic assessments administered as part of the State assessment 
system in a given school year are available to LEAs before the 
beginning of the next school year.
    (2) The SEA must provide the results described in paragraph (e)(1) 
of this section to a school before an LEA may identify the school for 
school improvement under Sec. 200.32, corrective action under 
Sec. 200.33, or restructuring under Sec. 200.34.
    (f) Factors affecting student achievement. Consistent with section 
1111(b)(9) of the Act, the SEA must notify the Secretary of Education 
of major factors that have significantly affected student academic 
achievement in schools and LEAs identified for improvement within the 
State.

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

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


Sec. 200.50  SEA review of LEA progress.

    (a) State review. (1)(i) An SEA must annually review the progress 
of each LEA in its State that receives funds under subpart A of this 
part.
    (ii) The review must determine whether--
    (A) The LEA's schools served under subpart A of this part are 
making adequate yearly progress toward meeting the State's student 
academic achievement standards; and
    (B) The LEA is carrying out its responsibilities under subpart A of 
this part with respect to technical assistance, parental involvement, 
and professional development.
    (2) In reviewing the progress of an LEA, the SEA may, in the case 
of targeted assistance schools served by the LEA, consider the progress 
only of the students served or eligible for services under subpart A of 
this part, provided the students selected for services in such schools 
are those with the greatest need for academic assistance, consistent 
with the requirements of section 1115 of the Act.
    (b) Rewards. If an LEA has exceeded adequate yearly progress as 
defined under Secs. 200.13 through 200.20 for two consecutive years, 
the SEA may--
    (1) Reserve funds in accordance with Sec. 200.100(c); and
    (2) Make rewards of the kinds described under section 1117 of the 
Act.
    (c) Opportunity for review of LEA-level data. (1) Before 
identifying an LEA for improvement or corrective action, the SEA must 
provide the LEA with an opportunity to review the data, including 
academic assessment data, on which the SEA has based the proposed 
identification.
    (2)(i) If the LEA believes that the proposed identification is in 
error for statistical or other substantive reasons, the LEA may provide 
supporting evidence to the SEA.
    (ii) The SEA must consider the evidence before making a final 
determination not later than 30 days after it has provided the LEA with 
the opportunity to review the data under paragraph (c)(1) of this 
section.
    (d) Identification for improvement. (1) The SEA must identify for 
improvement an LEA that, for two consecutive years, including the 
period immediately before January 8, 2002, fails to make adequate 
yearly progress as defined under Secs. 200.13 through 200.20.
    (2) The SEA must identify for improvement an LEA that was in 
improvement status on January 7, 2002.
    (3) The SEA may identify an LEA for improvement if, on the basis of 
assessments the LEA administers during the 2001-2002 school year, the 
LEA fails to make adequate yearly progress for a second consecutive 
year.
    (4) The SEA may remove an LEA from improvement status if, on the 
basis of assessments the LEA administers during the 2001-2002 school 
year, the LEA makes adequate yearly progress for a second consecutive 
year.
    (e) Identification for corrective action. After providing technical 
assistance under Sec. 200.52(b), the SEA--
    (1) May take corrective action at any time with respect to an LEA 
that the SEA has identified for improvement under paragraph (d) of this 
section;
    (2) Must take corrective action--
    (i) With respect to an LEA that fails to make adequate yearly 
progress, as defined under Secs. 200.13 through 200.20, by the end of 
the second full school year following the year in which the LEA 
administered the assessments that resulted in the LEA's failure to make 
adequate yearly progress for a second consecutive year and led to the 
SEA's identification for improvement under paragraph (d) of this 
section; and
    (ii) With respect to an LEA that was in corrective action status on 
January 7, 2002; and
    (3) May remove an LEA from corrective action if, on the basis of 
assessments administered by the LEA during the 2001-2002 school year, 
it makes adequate yearly progress for a second consecutive year.
    (f) Delay of corrective action. (1) The SEA may delay 
implementation of corrective action under Sec. 200.53 for a period not 
to exceed one year if--
    (i) The LEA makes adequate yearly progress for one year; or
    (ii) The LEA's failure to make adequate yearly progress is due to 
exceptional or uncontrollable circumstances, such as a natural disaster 
or a precipitous and unforeseen decline in the LEA's financial 
resources.
    (2)(i) The SEA may not take into account the period of delay 
referred to in paragraph (f)(1) of this section in determining the 
number of consecutive years the LEA has failed to make adequate yearly 
progress; and
    (ii) The SEA must subject the LEA to further actions following the 
period of delay as if the delay never occurred.
    (g) Continuation of public school choice and supplemental 
educational services. An SEA must ensure that an LEA identified under 
paragraph (d) or (e) of this section continues to offer public school 
choice in accordance with Sec. 200.44 and supplemental educational 
services in accordance with Sec. 200.45.
    (h) Removal from improvement or corrective action status. If an LEA 
makes adequate yearly progress for two consecutive years following 
identification for improvement under paragraph (d) of this section, the 
SEA need no longer--
    (1) Identify the LEA for improvement; or
    (2) Subject the LEA to corrective action for the succeeding school 
year.

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


Sec. 200.51  Notice of SEA action.

    (a) In general. (1) An SEA must--
    (i) Communicate with parents throughout the review of an LEA under 
Sec. 200.50; and
    (ii) Ensure that, regardless of the method or media used, it 
provides information to parents--
    (A) In an understandable and uniform format, including alternative 
formats upon request; and
    (B) To the extent practicable, in a language that parents can 
understand.
    (2) The SEA must provide information to parents--

[[Page 51017]]

    (i) Directly, through such means as regular mail or, if possible, 
e-mail; and
    (ii) Through broader means of dissemination such as the Internet, 
the media, and public agencies serving the student population and their 
families.
    (3) All communications must respect the privacy of students and 
their families.
    (b) Results of review. The SEA must publicize and disseminate to 
the LEAs, teachers and other staff, parents, students, and the 
community the results of its review under Sec. 200.50, including 
statistically sound disaggregated results in accordance with 
Secs. 200.2 and 200.7.
    (c) Identification for improvement or corrective action. If the SEA 
identifies an LEA for improvement or subjects the LEA to corrective 
action, the SEA must promptly provide to the parents of each student 
enrolled in a school served by the LEA--
    (1) The reasons for the identification; and
    (2) An explanation of how parents can participate in upgrading the 
LEA.
    (d) Information about action taken. (1) The SEA must publish, and 
disseminate to parents and the public, information on any corrective 
action the SEA takes under Sec. 200.53.
    (2) The SEA must provide this information--
    (i) In a uniform and understandable format, including alternative 
formats upon request; and
    (ii) To the extent practicable, in a language that parents can 
understand.
    (3) The SEA must disseminate the information through such means as 
the Internet, the media, and public agencies.

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

    24. Add new Secs. 200.52 through 200.54 and place them under the 
new undesignated center heading ``LEA and School Improvement'' in 
subpart A of part 200 to read as follows:


Sec. 200.52  LEA improvement.

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

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

Sec. 200.53  LEA corrective action.

    (a) Definition. For the purposes of this section, the term 
``corrective action'' means action by an SEA that--
    (1) Substantially and directly responds to--
    (i) The consistent academic failure that caused the SEA to identify 
an LEA for corrective action; and
    (ii) Any underlying staffing, curriculum, or other problems in the 
LEA;
    (2) Is designed to increase substantially the likelihood that each 
group of students described in Sec. 200.13(b)(7) and enrolled in the 
LEA's schools will meet or exceed the State's proficient levels of 
achievement as measured by the State assessment system; and
    (3) Is consistent with State law.
    (b) Notice and hearing. Before implementing any corrective action 
under paragraph (c) of this section, the SEA must provide notice and a 
hearing to the affected LEA--if State law provides for this notice and 
hearing--not later than 45 days following the decision to take 
corrective action.
    (c) Requirements. If the SEA identifies an LEA for corrective 
action, the SEA must do the following:
    (1) Continue to make available technical assistance to the LEA.
    (2) Take at least one of the following corrective actions:
    (i) Defer programmatic funds or reduce administrative funds.
    (ii) Institute and fully implement a new curriculum based on State 
and local content and academic achievement standards, including the 
provision of appropriate professional development for all relevant 
staff that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement 
for low-achieving students.
    (iii) Replace the LEA personnel who are relevant to the failure to 
make adequate yearly progress.

[[Page 51018]]

    (iv) Remove particular schools from the jurisdiction of the LEA and 
establish alternative arrangements for public governance and 
supervision of these schools.
    (v) Appoint a receiver or trustee to administer the affairs of the 
LEA in place of the superintendent and school board.
    (vi) Abolish or restructure the LEA.
    (vii) In conjunction with at least one other action in paragraph 
(c)(2) of this section--
    (A) Authorize students to transfer from a school operated by the 
LEA to a higher-performing public school operated by another LEA in 
accordance with Sec. 200.44, and
    (B) Provide to these students transportation, or the costs of 
transportation, to the other school consistent with Sec. 200.44(h).

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

Sec. 200.54  Rights of school and school district employees.

    (a) Nothing in Secs. 200.30 through 200.53 is intended to alter or 
otherwise affect the rights, remedies, and procedures afforded school 
or school district employees under Federal, State, or local laws 
(including applicable regulations or court orders) or under the terms 
of collective bargaining agreements, memoranda of understanding, or 
other agreements between those employees and their employers in effect 
on January 8, 2002.
    (b)(1) Any State or local law, regulation, or policy adopted after 
January 8, 2002 may not exempt an LEA from taking actions it may be 
required to take with respect to school or school district employees to 
implement Secs. 200.30 through 200.53.
    (2) When the collective bargaining agreements, memoranda of 
understanding, or other agreements referred to in paragraph (a) of this 
section are renegotiated, an LEA must ensure that those agreements do 
not prohibit actions that the LEA may be required to take with respect 
to school or school district employees to implement Secs. 200.30 
through 200.53.

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

    25. Add a new undesignated center heading to subpart A of part 200 
and place it after Sec. 200.54 to read as follows:

Qualifications of Teachers and Paraprofessionals

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


Sec. 200.55  Qualifications of teachers.

    (a) Newly hired teachers in Title I programs. (1) An LEA must 
ensure that all teachers hired after the first day of the 2002-2003 
school year to teach core academic subjects in a program supported with 
funds under subpart A of this part are highly qualified as defined in 
Sec. 200.56.
    (2) For the purpose of paragraph (a)(1) of this section, a teacher 
teaching in a program supported with funds under subpart A of this part 
is--
    (i) A teacher in a targeted assisted school who is paid with funds 
under subpart A of this part; or
    (ii) A teacher in a schoolwide program school.
    (b)(1) All teachers of core academic subjects. Not later than the 
end of the 2005-2006 school year, each State that receives funds under 
subpart A of this part must ensure that all teachers in the State who 
teach core academic subjects are highly qualified as defined in 
Sec. 200.56.
    (2) A teacher of a subject other than a core academic subject--such 
as some vocational education teachers--is not required to meet the 
requirements in Sec. 200.56.
    (c) Definition. The term ``core academic subjects'' means English, 
reading or language arts, mathematics, science, foreign languages, 
civics and government, economics, arts, history, and geography.

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

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

    To be a ``highly qualified teacher,'' a teacher covered under 
Sec. 200.55 must meet the requirements in paragraph (a) and either 
paragraph (b) or (c) of this section.
    (a) In general. (1) Except as provided in paragraph (a)(2) of this 
section, a teacher covered under Sec. 200.55 must--
    (i) Have obtained full State certification as a teacher--which may 
include certification obtained through alternative routes to 
certification; or
    (ii)(A) Have passed the State teacher licensing examination; and
    (B) Hold a license to teach in the State.
    (iii) A teacher meets the requirement in paragraphs (a)(1)(i) or 
(ii) of this section if the teacher--
    (A) Has fulfilled the State's certification and licensure 
requirements applicable to the years of experience the teacher 
possesses; or
    (B) Is participating in an alternate route certification program 
under which the teacher is--
    (1) Permitted by the State to assume functions as a teacher; and
    (2) Making satisfactory progress toward full certification as 
prescribed by the State and the program.
    (2) A teacher teaching in a public charter school in a State must 
meet the certification and licensure requirements, if any, contained in 
a State's charter school law.
    (3) If a teacher has had certification or licensure requirements 
waived on an emergency, temporary, or provisional basis, the teacher is 
not highly qualified.
    (b) Teachers new to the profession. A teacher covered under 
Sec. 200.55 who is new to the profession must--
    (1) Hold at least a bachelor's degree; and
    (2) At the elementary level, demonstrate, by passing a State test, 
subject knowledge and teaching skills in reading/language arts, 
writing, mathematics, and other areas of the basic elementary school 
curriculum; or
    (3) At the middle and high school levels, demonstrate a high level 
of competency by--
    (i) Passing a State test in each academic subject in which the 
teacher teaches; or
    (ii) Successfully completing in each academic subject in which the 
teacher teaches--
    (A) An undergraduate major;
    (B) A graduate degree;
    (C) Coursework equivalent to an undergraduate major; or
    (D) Advanced certification or credentials.
    (c) Teachers not new to the profession. A teacher covered under 
Sec. 200.55 who is not new to the profession must--
    (1) Hold at least a bachelor's degree;
    (2) Meet the applicable requirements in paragraph (b) of this 
section; and
    (3) Based on a high, objective, uniform State standard of 
evaluation in accordance with section 9101(23)(C)(ii) of the Act, 
demonstrate competence in all the academic subjects in which the 
teacher teaches.

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


Sec. 200.57  Plans to increase teacher quality.

    (a) State plan. (1) A State that receives funds under subpart A of 
this part must develop a plan to ensure that all teachers in the State 
who teach core academic subjects are highly qualified not later than 
the end of the 2005-2006 school year.
    (2) The State's plan--
    (i) Must establish annual measurable objectives for each LEA and 
school that include, at a minimum, an annual increase in the percentage 
of--
    (A) Highly qualified teachers at each LEA and school; and
    (B) Teachers who are receiving high-quality professional 
development as

[[Page 51019]]

defined in section 9101(34) of the Act; and
    (ii) May include other measures that the State determines are 
appropriate to increase teacher qualifications.
    (b) Local plan. An LEA that receives funds under subpart A of this 
part must develop a plan to ensure that all teachers in the LEA who 
teach core academic subjects are highly qualified not later than the 
end of the 2005-2006 school year.

(Authority: 20 U.S.C. 6319(a)(2)-(3); 7801(34))


Sec. 200.58  Qualifications of paraprofessionals.

    (a)(1) Applicability. An LEA must ensure that each paraprofessional 
who works in a program supported with funds under subpart A of this 
part meets the requirements in paragraph (b) of this section and, 
except as provided in paragraph (e) of this section, the requirements 
in paragraph (c) or (d) of this section.
    (2) For purposes of this section, the term ``paraprofessional''--
    (i) Means an individual who provides instructional support 
consistent with Sec. 200.59; and
    (ii) Does not include individuals who have only non-instructional 
duties (such as providing technical support for computers, providing 
personal care services, or performing clerical duties).
    (3) For the purpose of paragraph (a) of this section, a 
paraprofessional working in ``a program supported with funds under 
subpart A of this part'' is--
    (i) A paraprofessional in a targeted assisted school who is paid 
with funds under subpart A of this part; or
    (ii) Any paraprofessional in a schoolwide program school.
    (b) All paraprofessionals. A paraprofessional covered under 
paragraph (a) of this section, regardless of the paraprofessional's 
hiring date, must have earned a secondary school diploma or its 
recognized equivalent.
    (c) New paraprofessionals. A paraprofessional covered under 
paragraph (a) of this section who is hired after January 8, 2002 must 
have--
    (1) Completed at least two years of study at an institution of 
higher education;
    (2) Obtained an associate's or higher degree; or
    (3)(i) Met a rigorous standard of quality, and can demonstrate--
through a formal State or local academic assessment--knowledge of, and 
the ability to assist in instructing, as appropriate--
    (A) Reading/language arts, writing, and mathematics; or
    (B) Reading readiness, writing readiness, and mathematics 
readiness.
    (ii) A secondary school diploma or its recognized equivalent is 
necessary, but not sufficient, to meet the requirement in paragraph 
(c)(3)(i) of this section.
    (d) Existing paraprofessionals. Each paraprofessional who was hired 
before January 8, 2002 must meet the requirements in paragraph (c) of 
this section within four years after that date.
    (e) Exceptions. A paraprofessional does not need to meet the 
requirements in paragraph (c) or (d) of this section if the 
paraprofessional--
    (1)(i) Is proficient in English and a language other than English; 
and
    (ii) Acts as a translator to enhance the participation of limited 
English proficient children under subpart A of this part; or
    (2) Has duties that consist solely of conducting parental 
involvement activities.

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


Sec. 200.59  Duties of paraprofessionals.

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

(Authority: 20 U.S.C. 6319(g))

    27. Revise Sec. 200.60 and place it under the new undesignated 
center heading ``Qualifications of Teachers and Paraprofessionals'' in 
subpart A of part 200 to read as follows:


Sec. 200.60  Expenditures for professional development.

    (a)(1) Unless a lesser amount is needed because most teachers and 
paraprofessionals covered under Secs. 200.55 and 200.58 meet the 
requirements in those sections, an LEA must use funds it receives under 
subpart A of this part for professional development activities to 
ensure that teachers and paraprofessionals meet the requirements of 
Secs. 200.56 and 200.58.
    (2) The LEA must use these funds as follows:
    (i) For each of fiscal years 2002 and 2003, the LEA must use not 
less than 5 percent or more than 10 percent of the funds it receives 
under subpart A of this part.
    (ii) For each fiscal year after 2003, the LEA must use not less 
than 5 percent of the funds it receives under subpart A of this part.
    (b) The LEA may use additional funds under subpart A of this part 
to support ongoing training and professional development, as defined in 
section 9101(34) of the Act, to assist teachers and paraprofessionals 
in carrying out activities under subpart A of this part.

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

    27a. Add a new undesignated center heading following Sec. 200.60 to 
read as follows:

Participation of Eligible Children in Private Schools

    28. Revise Sec. 200.61 and place it under the undesignated center 
heading ``Participation of Eligible Children in Private Schools'' in 
subpart A of part 200 to read as follows:


Sec. 200.61  Responsibilities for providing services to private school 
children.

    (a) After timely and meaningful consultation with appropriate 
officials of private schools, an LEA must--
    (1) In accordance with Secs. 200.61 through 200.66 and section 1120 
of the Act, provide special educational services or other benefits 
under subpart A of this part, on an equitable basis and

[[Page 51020]]

in a timely manner, to eligible children who are enrolled in private 
elementary and secondary schools; and
    (2) Ensure that teachers and families of these children 
participate, on a basis equitable to the participation of teachers and 
families of other children receiving these services in accordance with 
Sec. 200.53.
    (b) Eligible private school children are children who--
    (1) Reside in participating public school attendance areas of the 
LEA, regardless of whether the private school they attend is located in 
the LEA; and
    (2) Meet the criteria in section 1115(b) of the Act.
    (c) Among the eligible private school children, the LEA must select 
children to participate, consistent with Sec. 200.63.

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

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


Sec. 200.62  Consultation.

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

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

    30. Revise Secs. 200.63 through 200.65 and place them under the 
undesignated center heading ``Participation of Eligible Children in 
Private Schools'' in subpart A of part 200 to read as follows:


Sec. 200.63  Factors for determining equitable participation of private 
school children.

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

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


[[Page 51021]]




Sec. 200.64  Determining equitable participation of teachers and 
families of participating private school children.

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

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

Sec. 200.65  Requirements to ensure that funds do not benefit a private 
school.

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

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

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


Sec. 200.66  Requirements concerning property, equipment, and supplies 
for the benefit of private school children.

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

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

    32. Place reserved Secs. 200.67 through 200.69 under the 
undesignated center heading ``Participation of Eligible Children in 
Private Schools'' in subpart A of part 200.
    33-34. Add a new undesignated center heading to subpart A of part 
200 and place it after reserved Sec. 200.69 to read as follows:

Allocations to LEAS

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


Sec. 200.70  Allocation of funds to LEAs in general.

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

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


Sec. 200.71  LEA eligibility.

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

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


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

    (a) General. For each LEA not on the Census list (hereinafter 
referred to as a ``new'' LEA), an SEA must determine the number of 
formula children and the number of children ages 5 to 17, inclusive, in 
that LEA.
    (b) Determining LEA eligibility. An SEA must determine basic grant, 
concentration grant, targeted grant, and education finance incentive 
grant eligibility for each new LEA and redetermine eligibility for the 
LEAs on the Census list, as appropriate, based on the number of formula 
children and

[[Page 51022]]

children ages 5 to 17, inclusive, determined in paragraph (a) of this 
section.
    (c) Adjusting LEA allocations. An SEA must adjust the LEA 
allocations calculated by the Secretary to determine allocations for 
eligible new LEAs based on the number of formula children determined in 
paragraph (a) of this section.

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


Sec. 200.73  Applicable hold-harmless provisions.

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

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

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

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


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

    (a) For eligible LEAs serving an area with a total population of 
less than 20,000 persons (hereinafter referred to as ``small LEAs''), 
an SEA may apply to the Secretary to use an alternative method to 
distribute basic grant, concentration grant, targeted grant, and 
education finance incentive grant funds.
    (b) In its application, the SEA must--
    (1) Identify the alternative data it proposes to use; and
    (2) Assure that it has established a procedure through which a 
small LEA that is dissatisfied with the determination of its grant may 
appeal directly to the Secretary.
    (c) The SEA must base its alternative method on population data 
that best reflect the current distribution of children from low-income 
families among the State's small LEAs and use the same poverty measure 
consistently across the State for all Title I, part A programs.
    (d) Based on the alternative poverty data selected, the SEA must--
    (1) Redetermine eligibility of its small LEAs for basic grants, 
concentration grants, targeted grants, and education finance incentive 
grants in accordance with Sec. 200.71;
    (2) Calculate allocations for small LEAs in accordance with the 
provisions of sections 1124, 1124A, 1125, and 1125A of the Act, as 
applicable; and
    (3) Ensure that each LEA receives the hold-harmless amount to which 
it is entitled under Sec. 200.73.
    (e) The amount of funds available for redistribution under each 
formula is the separate amount determined by the Secretary under 
sections 1124, 1124A, 1125, and 1125A of the Act for eligible small 
LEAs after the SEA has made the adjustments required under 
Sec. 200.72(c).
    (f) If the amount available for redistribution to small LEAs under 
an alternative method is not sufficient to satisfy applicable hold-
harmless requirements, the SEA must ratably reduce all eligible small 
LEAs to the amount available.

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


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

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

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

    36. Add and reserve new Sec. 200.76 and place it under the revised 
undesignated center heading ``Allocations to LEAs'' in subpart A of 
part 200.
    36a. Add a new undesignated center heading following Sec. 200.76 to 
read as follows:

Procedures for the Within-District Allocation of LEA Program Funds

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

[[Page 51023]]

Sec. 200.77  Reservation of funds by an LEA.

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

(Authority: 20 U.S.C. 6313(c)(3) and (4), 6316(b)(10), (c)(7)(iii), 
and (e)(6), 6318(a)(3), 6319(l), 6320).


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

    (a)(1) An LEA must allocate funds under subpart A of this part to 
school attendance areas and schools, identified as eligible and 
selected to participate under section 1113(a) or (b) of the Act, in 
rank order on the basis of the total number of children from low-income 
families in each area or school.
    (2)(i) In calculating the total number of children from low-income 
families, the LEA must include children from low-income families who 
attend private schools.
    (ii) To obtain a count of private school children, the LEA may--
    (A) Use the same poverty data the LEA uses to count public school 
children;
    (B)(1) Use comparable poverty data from a different source such as 
a private school survey that, to the extent possible, protects the 
identity of families of private school students; and
    (2) Extrapolate data from the survey based on a representative 
sample if complete actual data are unavailable;
    (C) Apply the low-income percentage of each participating public 
school attendance area to the number of private school children who 
reside in that school attendance area; or
    (D) Use an equated measure of low income correlated with the 
measure of low income used to count public school children.
    (iii) An LEA may count private school children from low-income 
families every year or every two years.
    (iv) The LEA shall have the final authority in determining the 
method used to calculate the number of private school children from 
low-income families;
    (3) If an LEA ranks its school attendance areas and schools by 
grade span groupings, the LEA may determine the percentage of children 
from low-income families in the LEA as a whole or for each grade span 
grouping.
    (b)(1) Except as provided in paragraphs (b)(2) and (d) of this 
section, an LEA must allocate to each participating school attendance 
area or school an amount for each low-income child that is at least 125 
percent of the per-pupil amount of funds the LEA received for that year 
under part A, subpart 2 of Title I. The LEA must calculate this per-
pupil amount before it reserves funds under Sec. 200.77, using the 
poverty measure selected by the LEA under section 1113(a)(5) of the 
Act.
    (2) If an LEA is serving only school attendance areas or schools in 
which the percentage of children from low-income families is 35 percent 
or more, the LEA is not required to allocate a per-pupil amount of at 
least 125 percent.
    (c) An LEA is not required to allocate the same per-pupil amount to 
each participating school attendance area or school provided the LEA 
allocates higher per-pupil amounts to areas or schools with higher 
concentrations of poverty than to areas or schools with lower 
concentrations of poverty.
    (d) An LEA may reduce the amount of funds allocated under this 
section to a school attendance area or school if the area or school is 
spending supplemental State or local funds for programs that meet the 
requirements in Sec. 200.79.
    (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), 6320(a) and (c)(1), 6333(c)(2)).

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

Fiscal Requirements

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


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

    (a) For the purpose of determining compliance with the supplement 
not supplant requirement in section 1120A(b) and the comparability 
requirement in section 1120A(c) of the Act, a grantee or subgrantee 
under subpart A of this part may exclude supplemental State and local 
funds spent in any school attendance area or school for programs that 
meet the intent and purposes of Title I.
    (b) A program meets the intent and purposes of Title I if the 
program either--
    (1)(i) Is implemented in a school in which the percentage of 
children from low-income families is at least 40 percent;
    (ii) Is designed to promote schoolwide reform and upgrade the 
entire educational operation of the school to support students in their 
achievement toward meeting the State's challenging academic achievement 
standards that all children are expected to meet;
    (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

[[Page 51024]]

student academic achievement standards; and
    (iv) Uses the State's assessment system under Sec. 200.2 to review 
the effectiveness of the program; or
    (2)(i) Serves only children who are failing, or most at risk of 
failing, to meet the State's challenging academic achievement 
standards;
    (ii) Provides supplementary services designed to meet the special 
educational needs of the children who are participating in the program 
to support their achievement toward meeting the State's academic 
achievement standards; and
    (iii) Uses the State's assessment system under Sec. 200.2 to review 
the effectiveness of the program.
    (c) The conditions in paragraph (b) of this section also apply to 
supplemental State and local funds expended under section 1113(b)(1)(D) 
and 1113(c)(2)(B) of the Act.

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

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

Subpart B--Even Start Family Literacy Programs


Sec. 200.80  Migrant Education Even Start Program definition.

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

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

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

Subpart C--Migrant Education Program


Sec. 200.81  Program definitions.

    The following definitions apply to programs and projects operated 
under subpart C of this part:
    (a) Agricultural activity means--
    (1) Any activity directly related to the production or processing 
of crops, dairy products, poultry or livestock for initial commercial 
sale or personal subsistence;
    (2) Any activity directly related to the cultivation or harvesting 
of trees; or
    (3) Any activity directly related to fish farms.
    (b) Fishing activity means any activity directly related to the 
catching or processing of fish or shellfish for initial commercial sale 
or personal subsistence.
    (c) Migratory agricultural worker means a person who, in the 
preceding 36 months, has moved from one school district to another, or 
from one administrative area to another within a State that is 
comprised of a single school district, in order to obtain temporary or 
seasonal employment in agricultural activities (including dairy work) 
as a principal means of livelihood.
    (d) Migratory child means a child who is, or whose parent, spouse, 
or guardian is, a migratory agricultural worker, including a migratory 
dairy worker, or a migratory fisher, and who, in the preceding 36 
months, in order to obtain, or accompany such parent, spouse, guardian 
in order to obtain, temporary or seasonal employment in agricultural or 
fishing work--
    (1) Has moved from one school district to another;
    (2) In a State that is comprised of a single school district, has 
moved from one administrative area to another within such district; or
    (3) Resides in a school district of more than 15,000 square miles, 
and migrates a distance of 20 miles or more to a temporary residence to 
engage in a fishing activity.
    (e) Migratory fisher means a person who, in the preceding 36 
months, has moved from one school district to another, or from one 
administrative area to another within a State that is comprised of a 
single school district, in order to obtain temporary or seasonal 
employment in fishing activities as a principal means of livelihood. 
This definition also includes a person who, in the preceding 36 months, 
resided in a school district of more than 15,000 square miles, and 
moved a distance of 20 miles or more to a temporary residence to engage 
in a fishing activity as a principal means of livelihood.
    (f) Principal means of livelihood means that temporary or seasonal 
agricultural or fishing activity plays an important part in providing a 
living for the worker and his or her family.

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


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

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

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


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

    (a) An SEA that receives a grant of MEP funds must develop and 
update a written comprehensive State plan (based on a current statewide 
needs assessment) that, at a minimum, has the following components:
    (1) Performance targets. The plan must specify--
    (i) Performance targets that the State has adopted for all children 
in reading and mathematics achievement, high school graduation, and the 
number of school dropouts, as well as the State's performance targets, 
if any, for school readiness; and

[[Page 51025]]

    (ii) Any other performance targets that the State has identified 
for migratory children.
    (2) Needs assessment. The plan must include an identification and 
assessment of--
    (i) The unique educational needs of migratory children that result 
from the childrens' migratory lifestyle; and
    (ii) Other needs of migratory students.
    (3) Service delivery. The plan must describe the strategies that 
the SEA will pursue on a statewide basis to achieve the performance 
targets in paragraph (a)(1) of this section by addressing--
    (i) First, the unique educational needs of migratory children 
consistent with paragraph (a)(2)(i) of this section; and
    (ii) Then, the general educational needs of migratory children 
consistent with paragraph (a)(2)(ii) of this section.
    (4) Evaluation. The plan must describe how the State will evaluate 
the effectiveness of its program.
    (b) The SEA must develop its comprehensive State plan in 
consultation with the State parent advisory council or, for SEAs not 
operating programs for one school year in duration, in consultation 
with the parents of migratory children.
    (c) Each SEA receiving MEP funds must ensure that its local 
operating agencies comply with the comprehensive State plan.

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

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

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

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


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

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

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


Sec. 200.86  Use of MEP funds in schoolwide projects.

    Funds available under part C of Title I of the Act may be used in a 
schoolwide program subject to the requirements of Sec. 200.28(c)(3)(i).

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


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

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

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

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

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

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


Sec. 200.89  [Reserved]

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

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


Sec. 200.90  Program definitions.

    (a) The following definitions apply to the programs authorized in 
part D, subparts 1 and 2 of Title I of the Act:
    Children and youth means the same as ``children'' as that term is 
defined in Sec. 200.103(a).
    (b) The following definitions apply to the programs authorized in 
part D, subpart 1 of Title I of the 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 the term ``immigrant children'' is defined in 
section 3301 of the Act and the term ``limited English proficient'' is 
defined in section 9101 of the Act, except that the terms 
``individual'' and ``children and youth'' used in those definitions 
mean ``children and youth'' as defined in this section.
    Locally operated correctional facility means a facility in which 
persons are confined as a result of a conviction for a criminal 
offense, including persons

[[Page 51026]]

under 21 years of age. The term also includes a local public or private 
institution and community day program or school not operated by the 
State that serves delinquent children and youth.
    Migrant youth means the same as ``migratory child'' as that term is 
defined in Sec. 200.81(d).

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


Sec. 200.91  SEA counts of eligible children.

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

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

Secs. 200.92--200.99  [Reserved]

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

Subpart E--General Provisions


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

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

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

Secs. 200.101-200.102  [Reserved]


Sec. 200.103  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 below the age and grade level at which the 
agency provides free public education.
    (b) Fiscal year means the Federal fiscal year--a period beginning 
on October 1 and ending on the following September 30--or another 12-
month

[[Page 51027]]

period normally used by the SEA for record-keeping.

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


Secs. 200.104-200.109  [Reserved]

[FR Doc. 02-19539 Filed 7-31-02; 4:01 pm]
BILLING CODE 4000-01-P