[Federal Register Volume 82, Number 129 (Friday, July 7, 2017)]
[Rules and Regulations]
[Pages 31690-31713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12126]



[[Page 31689]]

Vol. 82

Friday,

No. 129

July 7, 2017

Part II





Department of Education





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34 CFR Parts 200 and 299





Elementary and Secondary Education Act of 1965, as Amended by the Every 
Student Succeeds Act--Accountability and State Plans; Final Rule

Federal Register / Vol. 82 , No. 129 / Friday, July 7, 2017 / Rules 
and Regulations

[[Page 31690]]


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DEPARTMENT OF EDUCATION

34 CFR Parts 200 and 299

[Docket ID ED-2016-OESE-0032]
RIN 1810-AB27


Elementary and Secondary Education Act of 1965, as Amended by the 
Every Student Succeeds Act--Accountability and State Plans

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

ACTION: Final regulations; CRA revocation.

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SUMMARY: Under the Congressional Review Act, Congress has passed, and 
the President has signed, a resolution of disapproval of the 
accountability and State plans final regulations that were published on 
November 29, 2016. Because the resolution of disapproval invalidates 
these final regulations, the Department of Education (Department) is 
hereby removing these final regulations from the Code of Federal 
Regulations.

DATES: This action is effective July 7, 2017.

FOR FURTHER INFORMATION CONTACT: Melissa Siry, U.S. Department of 
Education, 400 Maryland Avenue SW., Room 3W104, Washington, DC 20202. 
Telephone: (202) 260-0926 or by email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: On November 29, 2016, the Department 
published the accountability and State plans final regulations (81 FR 
86076). The regulations were effective on March 21, 2017. On March 27, 
2017, President Trump signed into law Congress' resolution of 
disapproval of the accountability and State plans final regulations 
under the Congressional Review Act as Public Law 115-13. Section 801(f) 
of the Congressional Review Act states that ``[a]ny rule that takes 
effect and later is made of no force or effect by enactment of a joint 
resolution under section 802 shall be treated as though such rule had 
never taken effect.'' Accordingly, the Department is hereby removing 
the accountability and State plans final regulations from the Code of 
Federal Regulations, and ensuring the CFR is returned to the state it 
would have been if this ``rule had never taken effect.'' Consistent 
with Executive Order 13777, the Department is evaluating all existing 
regulations and making recommendations to the agency head regarding 
their repeal, replacement, or modification, consistent with applicable 
law. As part of that effort, we will review the regulations in parts 
200 and 299.

List of Subjects

34 CFR Part 200

    Elementary and secondary education, Grant programs--education, 
Indians--education, Infants and children, Juvenile delinquency, Migrant 
labor, Private schools, Reporting and recordkeeping requirements.

34 CFR Part 299

    Administrative practice and procedure, Elementary and secondary 
education, Grant programs--education, Private schools, Reporting and 
recordkeeping requirements.

    Dated: June 7, 2017.
Betsy DeVos,
Secretary of Education.

Amendment to 34 CFR Chapter II

    For the reasons discussed in the preamble, and under the authority 
of the Congressional Review Act (5 U.S.C. 801 et seq.) and Public Law 
115-13 (March 27, 2017), the Secretary of Education amends parts 200 
and 299 of title 34 of the Code of Federal Regulations as follows:

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

0
 1. The authority citation for part 200 is revised to read as follows:

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


0
 2. Section 200.7 is added to read as follows:


Sec.  200.7  Disaggregation of data.

    (a) Statistically reliable information. (1) A State may not use 
disaggregated data for one or more subgroups under Sec.  200.2(b)(10) 
to report achievement results under section 1111(h) of the Act or to 
identify schools in need of improvement, corrective action, or 
restructuring under section 1116 of the Act if the number of students 
in those subgroups is insufficient to yield statistically reliable 
information.
    (2)(i) Based on sound statistical methodology, each State must 
determine the minimum number of students sufficient to--
    (A) Yield statistically reliable information for each purpose for 
which disaggregated data are used; and
    (B) Ensure that, to the maximum extent practicable, all student 
subgroups in Sec.  200.13(b)(7)(ii) (economically disadvantaged 
students; students from major racial and ethnic groups; students with 
disabilities as defined in section 9101(5) of the Act; and students 
with limited English proficiency as defined in section 9101(25) of the 
Act) are included, particularly at the school level, for purposes of 
making accountability determinations.
    (ii) Each State must revise its Consolidated State Application 
Accountability Workbook under section 1111 of the Act to include--
    (A) An explanation of how the State's minimum group size meets the 
requirements of paragraph (a)(2)(i) of this section;
    (B) An explanation of how other components of the State's 
definition of adequate yearly progress (AYP), in addition to the 
State's minimum group size, interact to affect the statistical 
reliability of the data and to ensure the maximum inclusion of all 
students and student subgroups in Sec.  200.13(b)(7)(ii); and
    (C) Information regarding the number and percentage of students and 
student subgroups in Sec.  200.13(b)(7)(ii) excluded from school-level 
accountability determinations.
    (iii) Each State must submit a revised Consolidated State 
Application Accountability Workbook in accordance with paragraph 
(a)(2)(ii) of this section to the Department for technical assistance 
and peer review under the process established by the Secretary under 
section 1111(e)(2) of the Act in time for any changes to be in effect 
for AYP determinations based on school year 2009-2010 assessment 
results.
    (iv) Beginning with AYP decisions that are based on the assessments 
administered in the 2007-08 school year, a State may not establish a 
different minimum number of students under paragraph (a)(2)(i) of this 
section for separate subgroups under Sec.  200.13(b)(7)(ii) or for the 
school as a whole.
    (b) Personally identifiable information. (1) A State may not use 
disaggregated data for one or more subgroups under Sec.  200.2(b)(10) 
to report achievement results under section 1111(h) of the Act if the 
results would reveal personally identifiable information about an 
individual student.
    (2) To determine whether disaggregated results would reveal 
personally identifiable information about an individual student, a 
State must apply the requirements under section 444(b) of the General 
Education

[[Page 31691]]

Provisions Act (the Family Educational Rights and Privacy Act of 1974).
    (3) Nothing in paragraph (b)(1) or (b)(2) of this section shall be 
construed to abrogate the responsibility of States to implement the 
requirements of section 1116(a) of the Act for determining whether 
States, LEAs, and schools are making AYP on the basis of the 
performance of each subgroup under section 1111(b)(2)(C)(v) of the Act.
    (4) Each State shall include in its State plan, and each State and 
LEA shall implement, appropriate strategies to protect the privacy of 
individual students in reporting achievement results under section 
1111(h) of the Act and in determining whether schools and LEAs are 
making AYP on the basis of disaggregated subgroups.
    (c) Inclusion of subgroups in assessments. If a subgroup under 
Sec.  200.2(b)(10) is not of sufficient size to produce statistically 
reliable results, the State must still include students in that 
subgroup in its State assessments under Sec.  200.2.
    (d) Disaggregation at the LEA and State. If the number of students 
in a subgroup is not statistically reliable at the school level, the 
State must include those students in disaggregations at each level for 
which the number of students is statistically reliable--e.g., the LEA 
or State level.

(Authority: 20 U.S.C. 6311(b)(3); 1232g)



0
3. Section 200.12 is revised to read as follows:


Sec.  200.12  Single statewide 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 AYP as defined in Sec. Sec.  200.13 through 200.20.
    (b) The State's accountability system must--
    (1) Be based on the State's academic standards under Sec.  200.1, 
academic assessments under Sec.  200.2, and other academic indicators 
under Sec.  200.19;
    (2) Take into account the achievement of all public elementary and 
secondary school students;
    (3) Be the same accountability system the State uses for all public 
elementary and secondary schools and all LEAs in the State; and
    (4) Include sanctions and rewards that the State will use to hold 
public elementary and secondary schools and LEAs accountable for 
student achievement and for making AYP, except that the State is not 
required to subject schools and LEAs not participating under subpart A 
of this part to the requirements of section 1116 of the ESEA.

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

Sec.  200.12   [Amended]

0
4. Add an undesignated center heading ``Adequate Yearly Progress 
(AYP)'' following Sec.  200.12.

0
5. Section 200.13 is revised to read as follows:


Sec.  200.13  Adequate yearly progress in general.

    (a) Each State must demonstrate in its State plan what constitutes 
AYP of the State and of all public schools and LEAs in the State--
    (1) Toward enabling all public school students to meet the State's 
student academic achievement standards; while
    (2) Working toward the goal of narrowing the achievement gaps in 
the State, its LEAs, and its public schools.
    (b) A State must define adequate yearly progress, in accordance 
with Sec. Sec.  200.14 through 200.20, in a manner that--
    (1) Applies the same high standards of academic achievement to all 
public school students in the State, except as provided in paragraph 
(c) of this section;
    (2) Is statistically valid and reliable;
    (3) Results in continuous and substantial academic improvement for 
all students;
    (4) Measures the progress of all public schools, LEAs, and the 
State based primarily on the State's academic assessment system under 
Sec.  200.2;
    (5) Measures progress separately for reading/language arts and for 
mathematics;
    (6) Is the same for all public schools and LEAs in the State; and
    (7) Consistent with Sec.  200.7, applies the same annual measurable 
objectives under Sec.  200.18 separately to each of the following:
    (i) All public school students.
    (ii) Students in each of the following subgroups:
    (A) Economically disadvantaged students.
    (B) Students from major racial and ethnic groups.
    (C) Students with disabilities, as defined in section 9101(5) of 
the ESEA.
    (D) Students with limited English proficiency, as defined in 
section 9101(25) of the ESEA.
    (c)(1) In calculating AYP for schools, LEAs, and the State, a State 
must, consistent with Sec.  200.7(a), include the scores of all 
students with disabilities.
    (2) A State may include the proficient and advanced scores of 
students with the most significant cognitive disabilities based on the 
alternate academic achievement standards described in Sec.  200.1(d), 
provided that the number of those scores at the LEA and at the State 
levels, separately, does not exceed 1.0 percent of all students in the 
grades assessed in reading/language arts and in mathematics.
    (3) A State may not request from the Secretary an exception 
permitting it to exceed the cap on proficient and advanced scores based 
on alternate academic achievement standards under paragraph (c)(2) of 
this section.
    (4)(i) A State may grant an exception to an LEA permitting it to 
exceed the 1.0 percent cap on proficient and advanced scores based on 
the alternate academic achievement standards described in paragraph 
(c)(2) of this section only if--
    (A) The LEA demonstrates that the incidence of students with the 
most significant cognitive disabilities exceeds 1.0 percent of all 
students in the combined grades assessed;
    (B) The LEA explains why the incidence of such students exceeds 1.0 
percent of all students in the combined grades assessed, such as 
school, community, or health programs in the LEA that have drawn large 
numbers of families of students with the most significant cognitive 
disabilities, or that the LEA has such a small overall student 
population that it would take only a few students with such 
disabilities to exceed the 1.0 percent cap; and
    (C) The LEA documents that it is implementing the State's 
guidelines under Sec.  200.1(f).
    (ii) The State must review regularly whether an LEA's exception to 
the 1.0 percent cap is still warranted.
    (5) In calculating AYP, if the percentage of proficient and 
advanced scores based on alternate academic achievement standards under 
Sec.  200.1(d) exceeds the cap in paragraph (c)(2) of this section at 
the State or LEA level, the State must do the following:
    (i) Consistent with Sec.  200.7(a), include all scores based on 
alternate academic achievement standards.
    (ii) Count as non-proficient the proficient and advanced scores 
that exceed the cap in paragraph (c)(2) of this section.
    (iii) Determine which proficient and advanced scores to count as 
non-proficient in schools and LEAs responsible for students who are 
assessed based on alternate academic achievement standards.

[[Page 31692]]

    (iv) Include non-proficient scores that exceed the cap in paragraph 
(c)(2) of this section in each applicable subgroup at the school, LEA, 
and State level.
    (v) Ensure that parents of a child who is assessed based on 
alternate academic achievement standards are informed of the actual 
academic achievement levels of their child.
    (d) The State must establish a way to hold accountable schools in 
which no grade level is assessed under the State's academic assessment 
system (e.g., K-2 schools), although the State is not required to 
administer a formal assessment to meet this requirement.

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



0
6. Section 200.14 is revised to read as follows:


Sec.  200.14  Components of Adequate Yearly Progress.

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

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



0
7. Section 200.15 is revised to read as follows:


Sec.  200.15  Timeline.

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

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



0
8. Section 200.16 is revised to read as follows:


Sec.  200.16  Starting points.

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



0
9. Section 200.17 is revised to read as follows:


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 in not more than 
three years.

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



0
 10. Section 200.18 is revised 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))



0
11. Section 200.19 is revised to read as follows:


Sec.  200.19  Other academic indicators.

    (a) Elementary and middle schools. (1) Choice of indicator. To 
determine AYP, consistent with Sec.  200.14(e), each State must use at 
least one other academic indicator for public elementary schools and at 
least one other academic indicator for public middle schools, such as 
those in paragraph (c) of this section.
    (2) Goals. A State may, but is not required to, increase the goals 
of its other academic indicators over the course of the timeline under 
Sec.  200.15.
    (3) Reporting. A State and its LEAs must report under section 
1111(h) of the Act (annual report cards) performance on the academic 
indicators for elementary and middle schools at the school, LEA, and 
State levels in the aggregate and disaggregated by each subgroup 
described in Sec.  200.13(b)(7)(ii).
    (4) Determining AYP. A State--
    (i) Must disaggregate its other academic indicators for elementary 
and middle schools by each subgroup described in Sec.  200.13(b)(7)(ii) 
for purposes of determining AYP under Sec.  200.20(b)(2) (``safe 
harbor'') and as required under section 1111(b)(2)(C)(vii) of the Act 
(additional academic indicators under paragraph (c) of this section); 
but
    (ii) Need not disaggregate those indicators for determining AYP 
under Sec.  200.20(a)(1)(ii) (meeting the State's annual measurable 
objectives).
    (b) High schools--(1) Graduation rate. Consistent with paragraphs 
(b)(4) and (b)(5) of this section regarding reporting and determining 
AYP, respectively, each State must calculate a graduation rate, defined 
as follows, for all public high schools in the State:
    (i)(A) A State must calculate a ``four-year adjusted cohort 
graduation rate,'' defined as the number of students who graduate in 
four years with a regular high school diploma divided by the number of 
students who form the adjusted cohort for that graduating class.
    (B) For those high schools that start after grade nine, the cohort 
must be calculated based on the earliest high school grade.

[[Page 31693]]

    (ii) The term ``adjusted cohort'' means the students who enter 
grade 9 (or the earliest high school grade) and any students who 
transfer into the cohort in grades 9 through 12 minus any students 
removed from the cohort.
    (A) The term ``students who transfer into the cohort'' means the 
students who enroll after the beginning of the entering cohort's first 
year in high school, up to and including in grade 12.
    (B) To remove a student from the cohort, a school or LEA must 
confirm in writing that the student transferred out, emigrated to 
another country, or is deceased.
    (1) To confirm that a student transferred out, the school or LEA 
must have official written documentation that the student enrolled in 
another school or in an educational program that culminates in the 
award of a regular high school diploma.
    (2) A student who is retained in grade, enrolls in a General 
Educational Development (GED) program, or leaves school for any other 
reason may not be counted as having transferred out for the purpose of 
calculating graduation rate and must remain in the adjusted cohort.
    (iii) The term ``students who graduate in four years'' means 
students who earn a regular high school diploma at the conclusion of 
their fourth year, before the conclusion of their fourth year, or 
during a summer session immediately following their fourth year.
    (iv) The term ``regular high school diploma'' means the standard 
high school diploma that is awarded to students in the State and that 
is fully aligned with the State's academic content standards or a 
higher diploma and does not include a GED credential, certificate of 
attendance, or any alternative award.
    (v) In addition to calculating a four-year adjusted cohort 
graduation rate, a State may propose to the Secretary for approval an 
``extended-year adjusted cohort graduation rate.''
    (A) An extended-year adjusted cohort graduation rate is defined as 
the number of students who graduate in four years or more with a 
regular high school diploma divided by the number of students who form 
the adjusted cohort for the four-year adjusted cohort graduation rate, 
provided that the adjustments account for any students who transfer 
into the cohort by the end of the year of graduation being considered 
minus the number of students who transfer out, emigrate to another 
country, or are deceased by the end of that year.
    (B) A State may calculate one or more extended-year adjusted cohort 
graduation rates.
    (2) Transitional graduation rate. (i) Prior to the deadline in 
paragraph (b)(4)(ii)(A) of this section, a State must calculate 
graduation rate as defined in paragraph (b)(1) of this section or use, 
on a transitional basis--
    (A) A graduation rate that measures the percentage of students from 
the beginning of high school who graduate with a regular high school 
diploma in the standard number of years; or
    (B) Another definition, developed by the State and approved by the 
Secretary, that more accurately measures the rate of student graduation 
from high school with a regular high school diploma.
    (ii) For a transitional graduation rate calculated under paragraph 
(b)(2)(i) of this section--
    (A) ``Regular high school diploma'' has the same meaning as in 
paragraph (b)(1)(iv) of this section;
    (B) ``Standard number of years'' means four years unless a high 
school begins after ninth grade, in which case the standard number of 
years is the number of grades in the school; and
    (C) A dropout may not be counted as a transfer.
    (3) Goal and targets. (i) A State must set--
    (A) A single graduation rate goal that represents the rate the 
State expects all high schools in the State to meet; and
    (B) Annual graduation rate targets that reflect continuous and 
substantial improvement from the prior year toward meeting or exceeding 
the graduation rate goal.
    (ii) Beginning with AYP determinations under Sec.  200.20 based on 
school year 2009-2010 assessment results, in order to make AYP, any 
high school or LEA that serves grade 12 and the State must meet or 
exceed--
    (A) The graduation rate goal set by the State under paragraph 
(b)(3)(i)(A) of this section; or
    (B) The State's targets for continuous and substantial improvement 
from the prior year, as set by the State under paragraph (b)(3)(i)(B) 
of this section.
    (4) Reporting. (i) In accordance with the deadlines in paragraph 
(b)(4)(ii) of this section, a State and its LEAs must report under 
section 1111(h) of the Act (annual report cards) graduation rate at the 
school, LEA, and State levels in the aggregate and disaggregated by 
each subgroup described in Sec.  200.13(b)(7)(ii).
    (ii)(A) Beginning with report cards providing results of 
assessments administered in the 2010-2011 school year, a State and its 
LEAs must report the four-year adjusted cohort graduation rate 
calculated in accordance with paragraph (b)(1)(i) through (iv) of this 
section.
    (B) If a State adopts an extended-year adjusted cohort graduation 
rate calculated in accordance with paragraph (b)(1)(v) of this section, 
the State and its LEAs must report, beginning with the first year for 
which the State calculates such a rate, the extended-year adjusted 
cohort graduation rate separately from the four-year adjusted cohort 
graduation rate.
    (C) Prior to the deadline in paragraph (b)(4)(ii)(A) of this 
section, a State and its LEAs must report a graduation rate calculated 
in accordance with paragraph (b)(1) or (b)(2) of this section in the 
aggregate and disaggregated by the subgroups in Sec.  200.13(b)(7)(ii).
    (5) Determining AYP. (i) Beginning with AYP determinations under 
Sec.  200.20 based on school year 2011-2012 assessment results, a State 
must calculate graduation rate under paragraph (b)(1) of this section 
at the school, LEA, and State levels in the aggregate and disaggregated 
by each subgroup described in Sec.  200.13(b)(7)(ii).
    (ii) Prior to the AYP determinations described in paragraph 
(b)(5)(i) of this section, a State must calculate graduation rate in 
accordance with either paragraph (b)(1) or (b)(2) of this section--
    (A) In the aggregate at the school, LEA, and State levels for 
determining AYP under Sec.  200.20(a)(1)(ii) (meeting the State's 
annual measurable objectives), except as provided in paragraph 
(b)(7)(iii) of this section; but
    (B) In the aggregate and disaggregated by each subgroup described 
in Sec.  200.13(b)(7)(ii) for purposes of determining AYP under Sec.  
200.20(b)(2) (``safe harbor'') and as required under section 
1111(b)(2)(C)(vii) of the Act (additional academic indicators under 
paragraph (c) of this section).
    (6) Accountability workbook. (i) A State must revise its 
Consolidated State Application Accountability Workbook submitted under 
section 1111 of the Act to include the following:
    (A) The State's graduation rate definition that the State will use 
to determine AYP based on school year 2009-2010 assessment results.
    (B) The State's progress toward meeting the deadline in paragraph 
(b)(4)(ii)(A) of this section for calculating and reporting the four-
year adjusted cohort graduation rate defined in paragraph (b)(1)(i) 
through (iv) of this section.
    (C) The State's graduation rate goal and targets.
    (D) An explanation of how the State's graduation rate goal 
represents the rate the State expects all high schools in the State to 
meet and how the State's targets demonstrate continuous and substantial

[[Page 31694]]

improvement from the prior year toward meeting or exceeding the goal.
    (E) The graduation rate for the most recent school year of the high 
school at the 10th percentile, the 50th percentile, and the 90th 
percentile in the State (ranked in terms of graduation rate).
    (F) If a State uses an extended-year adjusted cohort graduation 
rate, a description of how it will use that rate with its four-year 
adjusted cohort graduation rate to determine whether its schools and 
LEAs have made AYP.
    (ii) Each State must submit, consistent with the timeline in Sec.  
200.7(a)(2)(iii), its revised Consolidated State Application 
Accountability Workbook in accordance with paragraph (b)(6)(i) of this 
section to the Department for technical assistance and peer review 
under the process established by the Secretary under section 1111(e)(2) 
of the Act.
    (7) Extension. (i) If a State cannot meet the deadline in paragraph 
(b)(4)(ii)(A) of this section, the State may request an extension of 
the deadline from the Secretary.
    (ii) To receive an extension, a State must submit to the Secretary, 
by March 2, 2009--
    (A) Evidence satisfactory to the Secretary demonstrating that the 
State cannot meet the deadline in paragraph (b)(4)(ii)(A) of this 
section; and
    (B) A detailed plan and timeline addressing the steps the State 
will take to implement, as expeditiously as possible, a graduation rate 
consistent with paragraph (b)(1)(i) through (iv) of this section.
    (iii) A State that receives an extension under this paragraph must, 
beginning with AYP determinations under Sec.  200.20 based on school 
year 2011-2012 assessment results, calculate graduation rate under 
paragraph (b)(2) of this section at the school, LEA, and State levels 
in the aggregate and disaggregated by each subgroup described in Sec.  
200.13(b)(7)(ii).
    (c) 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.
    (d) A State must ensure that its other academic indicators are--
    (1) Valid and reliable;
    (2) Consistent with relevant, nationally recognized professional 
and technical standards, if any; and
    (3) Consistent throughout the State within each grade span.
    (e) Except as provided in Sec.  200.20(b)(2), a State--
    (1) May not use the indicators in paragraphs (a) through (c) of 
this section to reduce the number, or change the identity, of schools 
that would otherwise be subject to school improvement, corrective 
action, or restructuring if those indicators were not used; but
    (2) May use the indicators to identify additional schools for 
school improvement, corrective action, or restructuring.

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



0
12. Section 200.20 is revised to read as follows:


Sec.  200.20  Making adequate yearly progress.

    A school or LEA makes AYP if it complies with paragraph (c) and 
with either paragraph (a) or (b) of this section separately in reading/
language arts and in mathematics.
    (a)(1) A school or LEA makes AYP if, consistent with paragraph (f) 
of this section--
    (i) Each group of students under Sec.  200.13(b)(7) meets or 
exceeds the State's annual measurable objectives under Sec.  200.18; 
and
    (ii) The school or LEA, respectively, meets or exceeds the State's 
other academic indicators under Sec.  200.19.
    (2) For a group under Sec.  200.13(b)(7) to be included in the 
determination of AYP for a school or LEA, the number of students in the 
group must be sufficient to yield statistically reliable information 
under Sec.  200.7(a).
    (b) If students in any group under Sec.  200.13(b)(7) in a school 
or LEA do not meet the State's annual measurable objectives under Sec.  
200.18, the school or LEA makes AYP if, consistent with paragraph (f) 
of this section--
    (1) The percentage of students in that group below the State's 
proficient achievement level decreased by at least 10 percent from the 
preceding year; and
    (2) That group made progress on one or more of the State's academic 
indicators under Sec.  200.19 or the LEA's academic indicators under 
Sec.  200.30(c).
    (c)(1) A school or LEA makes AYP if, consistent with paragraph (f) 
of this section--
    (i) Not less than 95 percent of the students enrolled in each group 
under Sec.  200.13(b)(7) takes the State assessments under Sec.  200.2; 
and
    (ii) The group is of sufficient size to produce statistically 
reliable results under Sec.  200.7(a).
    (2) The requirement in paragraph (c)(1) of this section does not 
authorize a State, LEA, or school to systematically exclude 5 percent 
of the students in any group under Sec.  200.13(b)(7).
    (3) To count a student who is assessed based on alternate academic 
achievement standards described in Sec.  200.1(d) as a participant for 
purposes of meeting the requirements of this paragraph, the State must 
have, and ensure that its LEAs adhere to, guidelines that meet the 
requirements of Sec.  200.1(f).
    (d) For the purpose of determining whether a school or LEA has made 
AYP, a State may establish a uniform procedure for averaging data that 
includes one or more of the following:
    (1) Averaging data across school years. (i) A State may average 
data from the school year for which the determination is made with data 
from one or two school years immediately preceding that school year.
    (ii) If a State averages data across school years, the State must--
    (A) Implement, on schedule, the assessments in reading/language 
arts and mathematics in grades 3 through 8 and once in grades 10 
through 12 required under Sec.  200.5(a)(2);
    (B) Report data resulting from the assessments under Sec.  
200.5(a)(2);
    (C) Determine AYP under Sec. Sec.  200.13 through 200.20, although 
the State may base that determination on data only from the reading/
language arts and mathematics assessments in the three grade spans 
required under Sec.  200.5(a)(1); and
    (D) Implement the requirements in section 1116 of the ESEA.
    (iii) A State that averages data across years must determine AYP on 
the basis of the assessments under Sec.  200.5(a)(2) as soon as it has 
data from two or three years to average. Until that time, the State may 
use data from the reading/language arts and mathematics assessments 
required under Sec.  200.5(a)(1) to determine adequate yearly progress.
    (2) Combining data across grades. Within each subject area and 
subgroup, the State may combine data across grades in a school or LEA.
    (e)(1) In determining the AYP of an LEA, a State must include all 
students who were enrolled in schools in the LEA for a full academic 
year, as defined by the State.
    (2) In determining the AYP of a school, the State may not include 
students who were not enrolled in that school for a full academic year, 
as defined by the State.
    (f)(1) In determining AYP for a school or LEA, a State may--
    (i) Count recently arrived limited English proficient students as 
having participated in the State assessments for

[[Page 31695]]

purposes of meeting the 95 percent participation requirement under 
paragraph (c)(1)(i) of this section if they take--
    (A) Either an assessment of English language proficiency under 
Sec.  200.6(b)(3) or the State's reading/language arts assessment under 
Sec.  200.2; and
    (B) The State's mathematics assessment under Sec.  200.2; and
    (ii) Choose not to include the scores of recently arrived limited 
English proficient students on the mathematics assessment, the reading/
language arts assessment (if administered to these students), or both, 
even if these students have been enrolled in the same school or LEA for 
a full academic year as defined by the State.
    (2)(i) In determining AYP for the subgroup of limited English 
proficient students and the subgroup of students with disabilities, a 
State may include, for up to two AYP determination cycles, the scores 
of--
    (A) Students who were limited English proficient but who no longer 
meet the State's definition of limited English proficiency; and
    (B) Students who were previously identified under section 602(3) of 
the IDEA but who no longer receive special education services.
    (ii) If a State, in determining AYP for the subgroup of limited 
English proficient students and the subgroup of students with 
disabilities, includes the scores of the students described in 
paragraph (f)(2)(i) of this section, the State must include the scores 
of all such students, but is not required to--
    (A) Include those students in the limited English proficient 
subgroup or in the students with disabilities subgroup in determining 
if the number of limited English proficient students or students with 
disabilities, respectively, is sufficient to yield statistically 
reliable information under Sec.  200.7(a); or
    (B) With respect to students who are no longer limited English 
proficient--
    (1) Assess those students' English language proficiency under Sec.  
200.6(b)(3); or
    (2) Provide English language services to those students.
    (iii) For the purpose of reporting information on report cards 
under section 1111(h) of the Act--
    (A) A State may include the scores of former limited English 
proficient students and former students with disabilities as part of 
the limited English proficient and students with disabilities 
subgroups, respectively, for the purpose of reporting AYP at the State 
level under section 1111(h)(1)(C)(ii) of the Act;
    (B) An LEA may include the scores of former limited English 
proficient students and former students with disabilities as part of 
the limited English proficient and students with disabilities 
subgroups, respectively, for the purpose of reporting AYP at the LEA 
and school levels under section 1111(h)(2)(B) of the Act; but
    (C) A State or LEA may not include the scores of former limited 
English proficient students or former students with disabilities as 
part of the limited English proficient or students with disabilities 
subgroup, respectively, in reporting any other information under 
section 1111(h) of the Act.
    (g) Student academic growth. (1) A State may request authority 
under section 9401 of the Act to incorporate student academic growth in 
the State's definition of AYP under this section.
    (2) A State's policy for incorporating student academic growth in 
the State's definition of AYP must--
    (i) Set annual growth targets that--
    (A) Will lead to all students, by school year 2013-2014, meeting or 
exceeding the State's proficient level of academic achievement on the 
State assessments under Sec.  200.2;
    (B) Are based on meeting the State's proficient level of academic 
achievement on the State assessments under Sec.  200.2 and are not 
based on individual student background characteristics; and
    (C) Measure student achievement separately in mathematics and 
reading/language arts;
    (ii) Ensure that all students enrolled in the grades tested under 
Sec.  200.2 are included in the State's assessment and accountability 
systems;
    (iii) Hold all schools and LEAs accountable for the performance of 
all students and the student subgroups described in Sec.  
200.13(b)(7)(ii);
    (iv) Be based on State assessments that--
    (A) Produce comparable results from grade to grade and from year to 
year in mathematics and reading/language arts;
    (B) Have been in use by the State for more than one year; and
    (C) Have received full approval from the Secretary before the State 
determines AYP based on student academic growth;
    (v) Track student progress through the State data system;
    (vi) Include, as separate factors in determining whether schools 
are making AYP for a particular year--
    (A) The rate of student participation in assessments under Sec.  
200.2; and
    (B) Other academic indicators as described in Sec.  200.19; and
    (vii) Describe how the State's annual growth targets fit into the 
State's accountability system in a manner that ensures that the system 
is coherent and that incorporating student academic growth into the 
State's definition of AYP does not dilute accountability.
    (3) A State's proposal to incorporate student academic growth in 
the State's definition of AYP will be peer reviewed under the process 
established by the Secretary under section 1111(e)(2) of the Act.

(Authority: 20 U.S.C. 6311(b)(2), (b)(3)(C)(xi); 7861)



0
 13. Section 200.21 is revised to read as follows:


Sec.  200.21  Adequate yearly progress of a State.

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

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



0
14. Section 200.22 is revised to read as follows:


Sec.  200.22  National Technical Advisory Council.

    (a) To provide advice to the Department on technical issues related 
to the design and implementation of standards, assessments, and 
accountability systems, the Secretary shall establish a National 
Technical Advisory Council (hereafter referred to as the ``National 
TAC''), which shall be governed by the provisions of the Federal 
Advisory Committee Act (FACA) (Pub. L. 92-463, as amended; 5 U.S.C. 
App.).
    (b)(1) The members of the National TAC must include persons who 
have knowledge of and expertise in the design and implementation of 
educational standards, assessments, and accountability systems for all 
students, including students with disabilities and limited English 
proficient students, and experts with technical knowledge related to 
statistics and psychometrics.
    (2) The National TAC shall be composed of 10 to 20 members who

[[Page 31696]]

may meet as a whole or in committees, as the Secretary may determine.
    (3) The Secretary shall, through a notice published in the Federal 
Register--
    (i) Solicit nominations from the public for members of the National 
TAC; and
    (ii) Publish the list of members, once selected.
    (4) The Secretary shall screen nominees for membership on the 
National TAC for potential conflicts of interest to prevent, to the 
extent possible, such conflicts, or the appearance thereof, in the 
National TAC's performance of its responsibilities under this section.
    (c) The Secretary shall use the National TAC to provide its expert 
opinions on matters that arise during the State Plan review process.
    (d) The Secretary shall prescribe and publish the rules of 
procedure for the National TAC.

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

Sec.  200.23  [Removed and Reserved]

0
15. Remove and reserve Sec.  200.23.


Sec.  200.24  [Removed and Reserved]

0
16. Remove and reserve Sec.  200.24.


Sec.  200.29  [Amended]

0
17. Revise the undesignated center heading following Sec.  200.29 to 
read as follows:

LEA and School Improvement

0
18. Section 200.30 is revised to read as follows:


Sec.  200.30  Local review.

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

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



0
 19. Section 200.31 is revised to read as follows:


Sec.  200.31  Opportunity to review school-level data.

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

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



0
20. Section 200.32 is revised to read as follows:


Sec.  200.32  Identification for school improvement.

    (a)(1)(i) An LEA must identify for school improvement any 
elementary or secondary school served under subpart A of this part that 
fails, for two consecutive years, to make AYP as defined under 
Sec. Sec.  200.13 through 200.20.
    (ii) In identifying schools for improvement, an LEA--
    (A) May base identification on whether a school did not make AYP 
because it did not meet the annual measurable objectives for the same 
subject or meet the same other academic indicator for two consecutive 
years; but
    (B) May not limit identification to those schools that did not make 
AYP only because they did not meet the annual measurable objectives for 
the same subject or meet the same other academic indicator for the same 
subgroup under Sec.  200.13(b)(7)(ii) for two consecutive years.
    (2) The LEA must make the identification described in paragraph 
(a)(1) of this section before the beginning of the school year 
following the year in which the LEA administered the assessments that 
resulted in the school's failure to make AYP for a second consecutive 
year.
    (b)(1) An LEA must treat any school that was in the first year of 
school improvement status on January 7, 2002 as a school that is in the 
first year of school improvement under Sec.  200.39 for the 2002-2003 
school year.
    (2) Not later than the first day of the 2002-2003 school year, the 
LEA must, in accordance with Sec.  200.44, provide public school choice 
to all students in the school.
    (c)(1) An LEA must treat any school that was identified for school 
improvement for two or more consecutive years on January 7, 2002 as a 
school that is in its second year of school improvement under Sec.  
200.39 for the 2002-2003 school year.
    (2) Not later than the first day of the 2002-2003 school year, the 
LEA must--
    (i) In accordance with Sec.  200.44, provide public school choice 
to all students in the school; and
    (ii) In accordance with Sec.  200.45, make available supplemental 
educational services to eligible students who remain in the school.
    (d) An LEA may remove from improvement status a school otherwise 
subject to the requirements of

[[Page 31697]]

paragraphs (b) or (c) of this section if, on the basis of assessments 
the LEA administers during the 2001-2002 school year, the school makes 
AYP for a second consecutive year.
    (e)(1) An LEA may, but is not required to, identify a school for 
improvement if, on the basis of assessments the LEA administers during 
the 2001-2002 school year, the school fails to make AYP for a second 
consecutive year.
    (2) An LEA that does not identify such a school for improvement, 
however, must count the 2001-2002 school year as the first year of not 
making AYP for the purpose of subsequent identification decisions under 
paragraph (a) of this section.
    (f) If an LEA identifies a school for improvement after the 
beginning of the school year following the year in which the LEA 
administered the assessments that resulted in the school's failure to 
make AYP for a second consecutive year--
    (1) The school is subject to the requirements of school improvement 
under Sec.  200.39 immediately upon identification, including the 
provision of public school choice; and
    (2) The LEA must count that school year as a full school year for 
the purposes of subjecting the school to additional improvement 
measures if the school continues to fail to make AYP.

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



0
21. Section 200.33 is revised to read as follows:


Sec.  200.33  Identification for corrective action.

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

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



0
22. Section 200.34 is revised to read as follows:


Sec.  200.34  Identification for restructuring.

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



0
23. Section 200.35 is revised to read as follows:


Sec.  200.35  Delay and removal.

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

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



0
24. Section 200.36 is revised to read as follows:


Sec.  200.36  Communication with parents.

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

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



0
25. Section 200.37 is revised to read as follows:


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

    (a) If an LEA identifies a school for improvement or subjects the 
school to corrective action or restructuring, the LEA must, consistent 
with the requirements of Sec.  200.36, promptly notify the parent or 
parents of each child enrolled in the school of this identification.
    (b) The notice referred to in paragraph (a) of this section must 
include the following:
    (1) An explanation of what the identification means, and how the 
school compares in terms of academic achievement to other elementary 
and secondary schools served by the LEA and the SEA involved.
    (2) The reasons for the identification.
    (3) An explanation of how parents can become involved in addressing 
the academic issues that led to identification.
    (4)(i) An explanation of the parents' option to transfer their 
child to another public school, including the provision of 
transportation to the new school, in accordance with Sec.  200.44.

[[Page 31698]]

    (ii) The explanation of the parents' option to transfer must 
include, at a minimum, information on the academic achievement of the 
school or schools to which the child may transfer.
    (iii) The explanation may include other information on the school 
or schools to which the child may transfer, such as--
    (A) A description of any special academic programs or facilities;
    (B) The availability of before- and after-school programs;
    (C) The professional qualifications of teachers in the core 
academic subjects; and
    (D) A description of parental involvement opportunities.
    (iv) The explanation of the available school choices must be made 
sufficiently in advance of, but no later than 14 calendar days before, 
the start of the school year so that parents have adequate time to 
exercise their choice option before the school year begins.
    (5)(i) If the school is in its second year of improvement or 
subject to corrective action or restructuring, a notice explaining how 
parents can obtain supplemental educational services for their child in 
accordance with Sec.  200.45.
    (ii) The annual notice of the availability of supplemental 
educational services must include, at a minimum, the following:
    (A) The identity of approved providers of those services available 
within the LEA, including providers of technology-based or distance-
learning supplemental educational services, and providers that make 
services reasonably available in neighboring LEAs.
    (B) A brief description of the services, qualifications, and 
demonstrated effectiveness of the providers referred to in paragraph 
(b)(5)(ii)(A) of this section, including an indication of those 
providers who are able to serve students with disabilities or limited 
English proficient students.
    (C) An explanation of the benefits of receiving supplemental 
educational services.
    (iii) The annual notice of the availability of supplemental 
educational services must be--
    (A) Clear and concise; and
    (B) Clearly distinguishable from the other information sent to 
parents under this section.

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



0
26. Add Sec.  200.38 to read as follows:


Sec.  200.38  Information about action taken.

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

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



0
27. Add Sec.  200.39 to read as follows:


Sec.  200.39  Responsibilities resulting from identification for school 
improvement.

    (a) If an LEA identifies a school for school improvement under 
Sec.  200.32--
    (1) The LEA must--
    (i) Not later than the first day of the school year following 
identification, with the exception described in Sec.  200.32(f), 
provide all students enrolled in the school with the option to 
transfer, in accordance with Sec.  200.44, to another public school 
served by the LEA; and
    (ii) Ensure that the school receives technical assistance in 
accordance with Sec.  200.40; and
    (2) The school must develop or revise a school improvement plan in 
accordance with Sec.  200.41.
    (b) If a school fails to make AYP by the end of the first full 
school year after the LEA has identified it for improvement under Sec.  
200.32, the LEA must--
    (1) Continue to provide all students enrolled in the school with 
the option 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.
    (c)(1) Except as provided in paragraph (c)(2) of this section, the 
LEA must prominently display on its Web site, in a timely manner to 
ensure that parents have current information, the following information 
regarding the LEA's implementation of the public school choice and 
supplemental educational services requirements of the Act and this 
part:
    (i) Beginning with data from the 2007-2008 school year and for each 
subsequent school year, the number of students who were eligible for 
and the number of students who participated in public school choice.
    (ii) Beginning with data from the 2007-2008 school year and for 
each subsequent school year, the number of students who were eligible 
for and the number of students who participated in supplemental 
educational services.
    (iii) For the current school year, a list of supplemental 
educational services providers approved by the State to serve the LEA 
and the locations where services are provided.
    (iv) For the current school year, a list of available schools to 
which students eligible to participate in public school choice may 
transfer.
    (2) If the LEA does not have its own Web site, the SEA must include 
on the SEA's Web site the information required in paragraph (c)(1) of 
this section for the LEA.

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



0
28. Add Sec.  200.40 to read as follows:


Sec.  200.40  Technical assistance.

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

[[Page 31699]]

that have proved effective, through scientifically based research, in 
addressing the specific instructional issues that caused the LEA to 
identify the school for improvement.
    (3) Assistance in analyzing and revising the school's budget so 
that the school allocates its resources more effectively to the 
activities most likely to--
    (i) Increase student academic achievement; and
    (ii) Remove the school from school improvement status.
    (d) Technical assistance provided under this section must be based 
on scientifically based research.

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



0
29. Add Sec.  200.41 to read as follows:


Sec.  200.41  School improvement plan.

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

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



0
30. Add Sec.  200.42 to read as follows:


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 AYP.
    (ii) Institute and fully implement a new curriculum, including the 
provision of appropriate professional development for all relevant 
staff, that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement 
for low-achieving students and of enabling the school to make AYP.
    (iii) Significantly decrease management authority at the school 
level.
    (iv) Appoint one or more outside experts to advise the school on--
    (A) Revising the school improvement plan developed under Sec.  
200.41 to address the specific issues underlying the school's continued 
failure to make AYP and resulting in identification for corrective 
action; and
    (B) Implementing the revised improvement plan.
    (v) Extend for that school the length of the school year or school 
day.
    (vi) Restructure the internal organization of the school.
    (5) Continue to comply with Sec.  200.39(c).

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

Sec.  200.42  [Amended]

0
31. Remove the undesignated center heading ``Other State Plan 
Provisions'' following Sec.  200.42.


0
32. Revise Sec.  200.43 to read as follows:

[[Page 31700]]

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 to improve student academic 
achievement in the school;
    (2) Has substantial promise of enabling the school to make AYP as 
defined under Sec. Sec.  200.13 through 200.20;
    (3) Is consistent with State law;
    (4) Is significantly more rigorous and comprehensive than the 
corrective action that the LEA implemented in the school under Sec.  
200.42, unless the school has begun to implement one of the options in 
paragraph (b)(3) of this section as a corrective action; and
    (5) Addresses the reasons why the school was identified for 
restructuring in order to enable the school to exit restructuring as 
soon as possible.
    (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, 
but may not be limited to, replacing the principal) who are relevant to 
the school's failure to make AYP.
    (iii) Enter into a contract with an entity, such as a private 
management company, with a demonstrated record of effectiveness, to 
operate the school as a public school.
    (iv) Turn the operation of the school over to the SEA, if permitted 
under State law and agreed to by the State.
    (v) Any other major restructuring of a school's governance 
arrangement that makes fundamental reforms, such as significant changes 
in the school's staffing and governance, in order to improve student 
academic achievement in the school and that has substantial promise of 
enabling the school to make AYP. The major restructuring of a school's 
governance may include replacing the principal so long as this change 
is part of a broader reform effort.
    (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.
    (5) Continue to comply with Sec.  200.39(c).
    (c) Implementation. (1) If a school continues to fail to make AYP, 
the LEA must--
    (i) Implement the restructuring plan no later than the beginning of 
the school year following the year in which the LEA developed the 
restructuring plan under paragraph (b)(3) of this section;
    (ii) Continue to offer public school choice and supplemental 
educational services in accordance with Sec. Sec.  200.44 and 200.45; 
and
    (iii) Continue to comply with Sec.  200.39(c).
    (2) An LEA is no longer required to carry out the requirements of 
paragraph (c)(1) of this section if the restructured school makes AYP 
for two consecutive school years.
    (d) Rural schools. On request, the Secretary will provide technical 
assistance for developing and carrying out a restructuring plan to any 
rural LEA--
    (1) That has fewer than 600 students in average daily attendance at 
all of its schools; and
    (2) In which all of the schools have a School Locale Code of 7 or 
8, as determined by the National Center for Education Statistics.

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



0
33. Add Sec.  200.44 to read as follows:


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, through the notice required in 
Sec.  200.37, so that students may transfer in the school year 
following the school year in which the LEA administered the assessments 
that resulted in its identification of the school for improvement, 
corrective action, or restructuring.
    (3) The schools to which students may transfer under paragraph 
(a)(1) of this section--
    (i) May not include schools that--
    (A) The LEA has identified for improvement under Sec.  200.32, 
corrective action under Sec.  200.33, or restructuring under Sec.  
200.34; or
    (B) Are persistently dangerous as determined by the State; and
    (ii) May include one or more public charter schools.
    (4) If more than one school meets the requirements of paragraph 
(a)(3) of this section, the LEA must--
    (i) Provide to parents of students eligible to transfer under 
paragraph (a)(1) of this section a choice of more than one such school; 
and
    (ii) Take into account the parents' preferences among the choices 
offered under paragraph (a)(4)(i) of this section.
    (5) The LEA must offer the option to transfer described in this 
section unless it is prohibited by State law in accordance with 
paragraph (b) of this section.
    (6) Except as described in Sec. Sec.  200.32(d) and 200.33(c), if a 
school was in school improvement or subject to corrective action before 
January 8, 2002, the State must ensure that the LEA provides a public 
school choice option in accordance with paragraph (a)(1) of this 
section not later than the first day of the 2002-2003 school year.
    (b) Limitation on State law prohibition. An LEA may invoke the 
State law prohibition on choice described in paragraph (a)(5) of this 
section only if the State law prohibits choice through restrictions on 
public school assignments or the transfer of students from one public 
school to another public school.
    (c) Desegregation plans. (1) If an LEA is subject to a 
desegregation plan, whether that plan is voluntary, court-ordered, or 
required by a Federal or State administrative agency, the LEA is not 
exempt from the requirement in paragraph (a)(1) of this section.
    (2) In determining how to provide students with the option to 
transfer to another school, the LEA may take into account the 
requirements of the desegregation plan.
    (3) If the desegregation plan forbids the LEA from offering the 
transfer option required under paragraph (a)(1) of this section, the 
LEA must secure appropriate changes to the plan to permit compliance 
with paragraph (a)(1) of this section.
    (d) Capacity. An LEA may not use lack of capacity to deny students 
the option to transfer under paragraph (a)(1) of this section.
    (e) Priority. (1) In providing students the option to transfer to 
another public school in accordance with paragraph (a)(1) of this 
section, the LEA must give priority to the lowest-achieving students 
from low-income families.
    (2) The LEA must determine family income on the same basis that the 
LEA

[[Page 31701]]

uses to make allocations to schools under subpart A of this part.
    (f) Status. Any public school to which a student transfers under 
paragraph (a)(1) of this section must ensure that the student is 
enrolled in classes and other activities in the school in the same 
manner as all other students in the school.
    (g) Duration of transfer. (1) If a student exercises the option 
under paragraph (a)(1) of this section to transfer to another public 
school, the LEA must permit the student to remain in that school until 
the student has completed the highest grade in the school.
    (2) The LEA's obligation to provide transportation for the student 
may be limited under the circumstances described in paragraph (i) of 
this section and in Sec.  200.48.
    (h) No eligible schools within an LEA. If all public schools to 
which a student may transfer within an LEA are identified for school 
improvement, corrective action, or restructuring, the LEA--
    (1) Must, to the extent practicable, establish a cooperative 
agreement for a transfer with one or more other LEAs in the area; and
    (2) May offer supplemental educational services to eligible 
students under Sec.  200.45 in schools in their first year of school 
improvement under Sec.  200.39.
    (i) Transportation. (1) If a student exercises the option under 
paragraph (a)(1) of this section to transfer to another public school, 
the LEA must, consistent with Sec.  200.48, provide or pay for the 
student's transportation to the school.
    (2) The limitation on funding in Sec.  200.48 applies only to the 
provision of choice-related transportation, and does not affect in any 
way the basic obligation to provide an option to transfer as required 
by paragraph (a) of this section.
    (3) The LEA's obligation to provide transportation for the student 
ends at the end of the school year in which the school from which the 
student transferred is no longer identified by the LEA for school 
improvement, corrective action, or restructuring.
    (j) Students with disabilities and students covered under Section 
504 of the Rehabilitation Act of 1973 (Section 504). For students with 
disabilities under the IDEA and students covered under Section 504, the 
public school choice option must provide a free appropriate public 
education as that term is defined in section 602(8) of the IDEA or 34 
CFR 104.33, respectively.

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



0
34. Add Sec.  200.45 to read as follows:


Sec.  200.45  Supplemental educational services.

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

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



0
35. Add Sec.  200.46 to read as follows:


Sec.  200.46  LEA responsibilities for supplemental educational 
services.

    (a) If an LEA is required to make available supplemental 
educational services under Sec.  200.39(b)(3), Sec.  200.42(b)(3), or 
Sec.  200.43(b)(2), the LEA must do the following:
    (1) Provide the annual notice to parents described in Sec.  
200.37(b)(5).
    (2) If requested, assist parents in choosing a provider from the 
list of approved providers maintained by the SEA.
    (3) Apply fair and equitable procedures for serving students if the 
number of spaces at approved providers is not sufficient to serve all 
eligible students whose parents request services consistent with Sec.  
200.45.
    (4) Ensure that eligible students with disabilities under IDEA and 
students covered under Section 504 receive appropriate supplemental 
educational services and accommodations in the provision of those 
services.
    (5) Ensure that eligible students who have limited English 
proficiency receive appropriate supplemental educational services and 
language assistance in the provision of those services.
    (6) Not disclose to the public, without the written permission of 
the student's parents, the identity of any student who is eligible for, 
or receiving, supplemental educational services.
    (b)(1) In addition to meeting the requirements in paragraph (a) of 
this section, the LEA must enter into an agreement with each provider 
selected by a parent or parents.
    (2) The agreement must--
    (i) Require the LEA to develop, in consultation with the parents 
and the provider, a statement that includes--
    (A) Specific achievement goals for the student;
    (B) A description of how the student's progress will be measured; 
and
    (C) A timetable for improving achievement;

[[Page 31702]]

    (ii) Describe procedures for regularly informing the student's 
parents and teachers of the student's progress;
    (iii) Provide for the termination of the agreement if the provider 
is unable to meet the goals and timetables specified in the agreement;
    (iv) Specify how the LEA will pay the provider; and
    (v) Prohibit the provider from disclosing to the public, without 
the written permission of the student's parents, the identity of any 
student who is eligible for, or receiving, supplemental educational 
services.
    (3) In the case of a student with disabilities under IDEA or a 
student covered under Section 504, the provisions of the agreement 
referred to in paragraph (b)(2)(i) of this section must be consistent 
with the student's individualized education program under section 
614(d) of the IDEA or the student's individualized services under 
Section 504.
    (4) The LEA may not pay the provider for religious worship or 
instruction.
    (c) If State law prohibits an SEA from carrying out one or more of 
its responsibilities under Sec.  200.47 with respect to those who 
provide, or seek approval to provide, supplemental educational 
services, each LEA must carry out those responsibilities with respect 
to its students who are eligible for those services.

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



0
 36. Add Sec.  200.47 to read as follows:


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--
    (A) Annual notice to potential providers of--
    (1) The opportunity to provide supplemental educational services; 
and
    (2) Procedures for obtaining the SEA's approval to be a provider of 
those services; and
    (B) Posting on the SEA's Web site, for each LEA--
    (1) The amount equal to 20 percent of the LEA's Title I, Part A 
allocation available for choice-related transportation and supplemental 
educational services, as required in Sec.  200.48(a)(2); and
    (2) The per-child amount for supplemental educational services 
calculated under Sec.  200.48(c)(1).
    (2) Consistent with paragraph (b) of this section, develop and 
apply to potential providers objective criteria.
    (3)(i) Maintain by LEA an updated list of approved providers, 
including any technology-based or distance-learning providers, from 
which parents may select; and
    (ii) Indicate on the list those providers that are able to serve 
students with disabilities or limited English proficient students.
    (4) Consistent with paragraph (c) of this section, develop, 
implement, and publicly report on standards and techniques for--
    (i) Monitoring the quality and effectiveness of the services 
offered by each approved provider;
    (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; and
    (iii) Monitoring LEAs' implementation of the supplemental 
educational services requirements of the Act and this part.
    (5) Ensure that eligible students with disabilities under IDEA and 
students covered under Section 504 receive appropriate supplemental 
educational services and accommodations in the provision of those 
services.
    (6) Ensure that eligible students who have limited English 
proficiency receive appropriate supplemental educational services and 
language assistance in the provision of those services.
    (b) Standards for approving providers. (1) As used in this section 
and in Sec.  200.46, ``provider'' means a non-profit entity, a for-
profit entity, an LEA, an educational service agency, a public school, 
including a public charter school, or a private school that--
    (i) Has a demonstrated record of effectiveness in increasing the 
academic achievement of students in subjects relevant to meeting the 
State's academic content and student achievement standards described 
under Sec.  200.1;
    (ii) Is capable of providing supplemental educational services that 
are consistent with the instructional program of the LEA and with the 
State academic content standards and State student achievement 
standards described under Sec.  200.1;
    (iii) Is financially sound; and
    (iv) In the case of--
    (A) A public school, has not been identified under Sec.  200.32, 
Sec.  200.33, or Sec.  200.34; or
    (B) An LEA, has not been identified under Sec.  200.50(d) or (e).
    (2) In order for the SEA to include a provider on the State list, 
the provider must agree to--
    (i)(A) Provide parents of each student receiving supplemental 
educational services and the appropriate LEA with information on the 
progress of the student in increasing achievement; and
    (B) This information must be in an understandable and uniform 
format, including alternative formats upon request, and, to the extent 
practicable, in a language that the parents can understand;
    (ii) Ensure that the instruction the provider gives and the content 
the provider uses--
    (A) Are consistent with the instruction provided and the content 
used by the LEA and the SEA;
    (B) Are aligned with State academic content and student academic 
achievement standards;
    (C) Are of high quality, research-based, and specifically designed 
to increase the academic achievement of eligible children; and
    (D) Are secular, neutral, and nonideological; and
    (iii) Meet all applicable Federal, State, and local health, safety, 
and civil rights laws.
    (3) In approving a provider, the SEA must consider, at a minimum--
    (i) Information from the provider on whether the provider has been 
removed from any State's approved provider list;
    (ii) Parent recommendations or results from parent surveys, if any, 
regarding the success of the provider's instructional program in 
increasing student achievement; and
    (iii) Evaluation results, if any, demonstrating that the 
instructional program has improved student achievement.
    (4) As a condition of approval, a State may not require a provider 
to hire only staff who meet the requirements under Sec. Sec.  200.55 
and 200.56.
    (c) Standards for monitoring approved providers. To monitor the 
quality and effectiveness of services offered by an approved provider 
in order to inform the renewal or the withdrawal of approval of the 
provider--
    (1) An SEA must examine, at a minimum, evidence that the provider's 
instructional program--
    (i) Is consistent with the instruction provided and the content 
used by the LEA and the SEA;
    (ii) Addresses students' individual needs as described in students' 
supplemental educational services plans under Sec.  200.46(b)(2)(i);
    (iii) Has contributed to increasing students' academic proficiency; 
and

[[Page 31703]]

    (iv) Is aligned with the State's academic content and student 
academic achievement standards; and
    (2) The SEA must also consider information, if any, regarding--
    (i) Parent recommendations or results from parent surveys regarding 
the success of the provider's instructional program in increasing 
student achievement; and
    (ii) Evaluation results demonstrating that the instructional 
program has improved student achievement.

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

Sec.  200.47  [Amended]

0
37. Remove the undesignated center heading ``Local Educational Agency 
Plans'' following Sec.  200.47.

0
38. Revise Sec.  200.48 to read as follows:


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

    (a) Amounts required. (1) To pay for choice-related transportation 
and supplemental educational services required under section 1116 of 
the ESEA, an LEA may use--
    (i) Funds allocated under subpart A of this part;
    (ii) Funds, where allowable, from other Federal education programs; 
and
    (iii) State, local, or private resources.
    (2) Unless a lesser amount is needed, the LEA must spend an amount 
equal to 20 percent of its allocation under subpart A of this part 
(``20 percent obligation'') 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) The LEA must spend a minimum of an amount equal to 5 percent of 
its allocation under subpart A of this part on transportation under 
paragraph (a)(2)(i) of this section and an amount equal to 5 percent of 
its allocation under subpart A of this part for supplemental 
educational services under paragraph (a)(2)(ii) of this section, unless 
lesser amounts are needed to meet the requirements of Sec. Sec.  200.44 
and 200.45;
    (B) Except as provided in paragraph (a)(2)(iii)(C) of this section, 
the LEA may not include costs for administration or transportation 
incurred in providing supplemental educational services, or 
administrative costs associated with the provision of public school 
choice options under Sec.  200.44, in the amounts required under 
paragraph (a)(2) of this section; and
    (C) The LEA may count in the amount the LEA is required to spend 
under paragraph (a) of this section its costs for outreach and 
assistance to parents concerning their choice to transfer their child 
or to request supplemental educational services, up to an amount equal 
to 0.2 percent of its allocation under subpart 2 of part A of Title I 
of the Act.
    (3) If the amount specified in paragraph (a)(2) of this section is 
insufficient to pay all choice-related transportation costs, or to meet 
the demand for supplemental educational services, the LEA may make 
available any additional needed funds from Federal, State, or local 
sources.
    (4) To assist an LEA that does not have sufficient funds to make 
available supplemental educational services to all students requesting 
these services, an SEA may use funds that it reserves under part A of 
Title I and part A of Title V of the ESEA.
    (b) Cap on school-level reduction. (1) An LEA may not, in applying 
paragraph (a) of this section, reduce by more than 15 percent the total 
amount it makes available under subpart A of this part to a school it 
has identified for corrective action or restructuring.
    (2) [Reserved]
    (c) Per-child funding for supplemental educational services. For 
each student receiving supplemental educational services under Sec.  
200.45, the LEA must make available the lesser of--
    (1) The amount of its allocation under subpart A of this part, 
divided by the number of students from families below the poverty 
level, as counted under section 1124(c)(1)(A) of the ESEA; or
    (2) The actual costs of the supplemental educational services 
received by the student.
    (d) Unexpended funds for choice-related transportation and 
supplemental educational services. (1)(i) Except as provided in 
paragraph (d)(2) of this section, if an LEA does not meet its 20 
percent obligation in a given school year, the LEA must spend the 
unexpended amount in the subsequent school year on choice-related 
transportation costs, supplemental educational services, or parent 
outreach and assistance (consistent with paragraph (a)(2)(iii)(C) of 
this section).
    (ii) The LEA must spend the unexpended amount under paragraph 
(d)(1)(i) of this section in addition to the amount it is required to 
spend to meet its 20 percent obligation in the subsequent school year.
    (2) To spend less than the amount needed to meet its 20 percent 
obligation, an LEA must--
    (i) Meet, at a minimum, the following criteria:
    (A) Partner, to the extent practicable, with outside groups, such 
as faith-based organizations, other community-based organizations, and 
business groups, to help inform eligible students and their families of 
the opportunities to transfer or to receive supplemental educational 
services.
    (B) Ensure that eligible students and their parents have a genuine 
opportunity to sign up to transfer or to obtain supplemental 
educational services, including by--
    (1) Providing timely, accurate notice as required in Sec. Sec.  
200.36 and 200.37;
    (2) Ensuring that sign-up forms for supplemental educational 
services are distributed directly to all eligible students and their 
parents and are made widely available and accessible through broad 
means of dissemination, such as the internet, other media, and 
communications through public agencies serving eligible students and 
their families; and
    (3) Providing a minimum of two enrollment ``windows,'' at separate 
points in the school year, that are of sufficient length to enable 
parents of eligible students to make informed decisions about 
requesting supplemental educational services and selecting a provider.
    (C) Ensure that eligible supplemental educational services 
providers are given access to school facilities, using a fair, open, 
and objective process, on the same basis and terms as are available to 
other groups that seek access to school facilities;
    (ii) Maintain records that demonstrate the LEA has met the criteria 
in paragraph (d)(2)(i) of this section; and
    (iii) Notify the SEA that the LEA--
    (A) Has met the criteria in paragraph (d)(2)(i) of this section; 
and
    (B) Intends to spend the remainder of its 20 percent obligation on 
other allowable activities, specifying the amount of that remainder.
    (3)(i) Except as provided in paragraph (d)(3)(ii) of this section, 
an SEA must ensure an LEA's compliance with paragraph (d)(2)(i) of this 
section through its regular monitoring process.
    (ii)(A) In addition to its regular monitoring process, an SEA must 
review any LEA that--
    (1) The SEA determines has spent a significant portion of its 20 
percent obligation for other activities under paragraph (d)(2)(iii)(B) 
of this section; and
    (2) Has been the subject of multiple complaints, supported by 
credible evidence, regarding implementation of the public school choice 
or

[[Page 31704]]

supplemental educational services requirements; and
    (B) The SEA must complete its review by the beginning of the next 
school year.
    (4)(i) If an SEA determines under paragraph (d)(3) of this section 
that an LEA has failed to meet any of the criteria in paragraph 
(d)(2)(i) of this section, the LEA must--
    (A) Spend an amount equal to the remainder specified in paragraph 
(d)(2)(iii)(B) of this section in the subsequent school year, in 
addition to its 20 percent obligation for that year, on choice-related 
transportation costs, supplemental educational services, or parent 
outreach and assistance; or
    (B) Meet the criteria in paragraph (d)(2)(i) of this section and 
obtain permission from the SEA before spending less in that subsequent 
school year than the amount required by paragraph (d)(4)(i)(A) of this 
section.
    (ii) The SEA may not grant permission to the LEA under paragraph 
(d)(4)(i)(B) of this section unless the SEA has confirmed the LEA's 
compliance with paragraph (d)(2)(i) of this section for that subsequent 
school year.

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



0
39. Add Sec.  200.49 to read as follows:


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

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

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



0
40. Add Sec.  200.50 to read as follows:


Sec.  200.50  SEA review of LEA progress.

    (a) State review. (1) An SEA must annually review the progress of 
each LEA in its State that receives funds under subpart A of this part 
to determine whether--
    (i) The LEA's schools served under this part are making AYP, as 
defined under Sec. Sec.  200.13 through 200.20, toward meeting the 
State's student academic achievement standards; and
    (ii) The LEA is carrying out its responsibilities under this part 
with respect to school improvement, technical assistance, parental 
involvement, and professional development.
    (2) In reviewing the progress of an LEA, the SEA may, in the case 
of targeted assistance schools served by the LEA, consider the progress 
only of the students served or eligible for services under this 
subpart, provided the students selected for services in such schools 
are those with the greatest need for special assistance, consistent 
with the requirements of section 1115 of the ESEA.
    (b) Rewards. If an LEA has exceeded AYP as defined under Sec. Sec.  
200.13 through 200.20 for two consecutive years, the SEA may--
    (1) Reserve funds in accordance with Sec.  200.100(c); and
    (2) Make rewards of the kinds described under section 1117 of the 
ESEA.
    (c) Opportunity for review of LEA-level data. (1) Before 
identifying an LEA for improvement or corrective action, the SEA must 
provide the LEA with an opportunity to review the data, including 
academic assessment data, on which the SEA has based the proposed 
identification.
    (2)(i) If the LEA believes that the proposed identification is in 
error for statistical or other substantive reasons, the LEA may provide 
supporting evidence to the SEA.
    (ii) The SEA must consider the evidence before making a final 
determination not later than 30 days after it has provided the LEA with 
the opportunity to review the data under paragraph (c)(1) of this 
section.
    (d) Identification for improvement. (1)(i) The SEA must identify 
for

[[Page 31705]]

improvement an LEA that, for two consecutive years, including the 
period immediately before January 8, 2002, fails to make AYP as defined 
in the SEA's plan under section 1111(b)(2) of the ESEA.
    (ii) In identifying LEAs for improvement, an SEA--
    (A) May base identification on whether an LEA did not make AYP 
because it did not meet the annual measurable objectives for the same 
subject or meet the same other academic indicator for two consecutive 
years; but
    (B) May not limit identification to those LEAs that did not make 
AYP only because they did not meet the annual measurable objectives for 
the same subject or meet the same other academic indicator for the same 
subgroup under Sec.  200.13(b)(7)(ii) for two consecutive years.
    (2) The SEA must identify for improvement an LEA that was in 
improvement status on January 7, 2002.
    (3)(i) The SEA may identify an LEA for improvement if, on the basis 
of assessments the LEA administers during the 2001-2002 school year, 
the LEA fails to make AYP for a second consecutive year.
    (ii) An SEA that does not identify such an LEA for improvement, 
however, must count the 2001-2002 school year as the first year of not 
making AYP for the purpose of subsequent identification decisions under 
paragraph (d)(1) of this section.
    (4) The SEA may remove an LEA from improvement status if, on the 
basis of assessments the LEA administers during the 2001-2002 school 
year, the LEA makes AYP for a second consecutive year.
    (e) Identification for corrective action. After providing technical 
assistance under Sec.  200.52(b), the SEA--
    (1) May take corrective action at any time with respect to an LEA 
that the SEA has identified for improvement under paragraph (d) of this 
section;
    (2) Must take corrective action--
    (i) With respect to an LEA that fails to make AYP, as defined under 
Sec. Sec.  200.13 through 200.20, by the end of the second full school 
year following the year in which the LEA administered the assessments 
that resulted in the LEA's failure to make AYP for a second consecutive 
year and led to the SEA's identification of the LEA for improvement 
under paragraph (d) of this section; and
    (ii) With respect to an LEA that was in corrective action status on 
January 7, 2002; and
    (3) May remove an LEA from corrective action if, on the basis of 
assessments administered by the LEA during the 2001-2002 school year, 
it makes AYP for a second consecutive year.
    (f) Delay of corrective action. (1) The SEA may delay 
implementation of corrective action under Sec.  200.53 for a period not 
to exceed one year if--
    (i) The LEA makes AYP for one year; or
    (ii) The LEA's failure to make AYP is due to exceptional or 
uncontrollable circumstances, such as a natural disaster or a 
precipitous and unforeseen decline in the LEA's financial resources.
    (2)(i) The SEA may not take into account the period of delay 
referred to in paragraph (f)(1) of this section in determining the 
number of consecutive years the LEA has failed to make AYP; and
    (ii) The SEA must subject the LEA to further actions following the 
period of delay as if the delay never occurred.
    (g) Continuation of public school choice and supplemental 
educational services. An SEA must ensure that an LEA identified under 
paragraph (d) or (e) of this section continues to offer public school 
choice in accordance with Sec.  200.44 and supplemental educational 
services in accordance with Sec.  200.45.
    (h) Removal from improvement or corrective action status. If an LEA 
makes AYP for two consecutive years following identification for 
improvement under paragraph (d) or corrective action under paragraph 
(e) of this section, the SEA need no longer--
    (1) Identify the LEA for improvement; or
    (2) Subject the LEA to corrective action for the succeeding school 
year.

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



0
41. Add Sec.  200.51 to read as follows:


Sec.  200.51  Notice of SEA action.

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

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



0
42. Add Sec.  200.52 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, grounded in scientifically based 
research, that will strengthen instruction in core academic subjects in 
schools served by the LEA;
    (ii) Identify actions that have the greatest likelihood of 
improving the achievement of participating children in meeting the 
State's student academic achievement standards;
    (iii) Address the professional development needs of the 
instructional

[[Page 31706]]

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

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



0
43. Add Sec.  200.53 to read as follows:


Sec.  200.53  LEA corrective action.

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

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

Sec.  200.54  [Amended]

0
44. Revise the undesignated center heading following reserved Sec.  
200.54 to read as follows:

Qualifications of Teachers and Paraprofessionals


0
45. Revise Sec.  200.55 to read as follows:


Sec.  200.55  Qualifications of teachers.

    (a) Newly hired teachers in Title I programs. (1) An LEA must 
ensure that all teachers hired after the first day of the 2002-2003 
school year who teach core academic subjects in a program supported 
with funds under subpart A of this part are highly qualified as defined 
in Sec.  200.56.
    (2) For the purpose of paragraph (a)(1) of this section, a teacher 
teaching in a program supported with funds under subpart A of this part 
is--
    (i) A teacher in a targeted assisted school who is paid with funds 
under subpart A of this part;
    (ii) A teacher in a schoolwide program school; or
    (iii) A teacher employed by an LEA with funds under subpart A of 
this part to provide services to eligible private school students under 
Sec.  200.62.
    (b) All teachers of core academic subjects. (1) Not later than the 
end of the 2005-2006 school year, each State that receives funds under 
subpart A of this part, and each LEA in that State, must ensure that 
all public elementary and secondary school teachers in the State who 
teach core academic subjects, including teachers employed by an LEA to 
provide services to eligible private school students under Sec.  
200.62, are highly qualified as defined in Sec.  200.56.
    (2) A teacher who does not teach a core academic subject--such as 
some vocational education teachers--is not required to meet the 
requirements in Sec.  200.56.
    (c) Definition. The term ``core academic subjects'' means English, 
reading or language arts, mathematics,

[[Page 31707]]

science, foreign languages, civics and government, economics, arts, 
history, and geography.
    (d) Private school teachers. The requirements in this section do 
not apply to teachers hired by private elementary and secondary 
schools.

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



0
46. Revise Sec.  200.56 to read as follows:


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

    A teacher described in Sec.  200.55(a) and (b)(1) is a ``highly 
qualified teacher'' if the teacher meets the requirements in paragraph 
(a) and paragraphs (b), (c), or (d) of this section.
    (a) In general. (1) Except as provided in paragraph (a)(3) of this 
section, a teacher covered under Sec.  200.55 must--
    (i) Have obtained full State certification as a teacher, which may 
include certification obtained through alternative routes to 
certification; or
    (ii)(A) Have passed the State teacher licensing examination; and
    (B) Hold a license to teach in the State.
    (2) A teacher meets the requirement in paragraph (a)(1) of this 
section if the teacher--
    (i) Has fulfilled the State's certification and licensure 
requirements applicable to the years of experience the teacher 
possesses; or
    (ii) Is participating in an alternative route to certification 
program under which--
    (A) The teacher--
    (1) Receives high-quality professional development that is 
sustained, intensive, and classroom-focused in order to have a positive 
and lasting impact on classroom instruction, before and while teaching;
    (2) Participates in a program of intensive supervision that 
consists of structured guidance and regular ongoing support for 
teachers or a teacher mentoring program;
    (3) Assumes functions as a teacher only for a specified period of 
time not to exceed three years; and
    (4) Demonstrates satisfactory progress toward full certification as 
prescribed by the State; and
    (B) The State ensures, through its certification and licensure 
process, that the provisions in paragraph (a)(2)(ii) of this section 
are met.
    (3) A teacher teaching in a public charter school in a State must 
meet the certification and licensure requirements, if any, contained in 
the State's charter school law.
    (4) If a teacher has had certification or licensure requirements 
waived on an emergency, temporary, or provisional basis, the teacher is 
not highly qualified.
    (b) Teachers new to the profession. A teacher covered under Sec.  
200.55 who is new to the profession also must--
    (1) Hold at least a bachelor's degree; and
    (2) At the public elementary school level, demonstrate, by passing 
a rigorous State test (which may consist of passing a State 
certification or licensing test), subject knowledge and teaching skills 
in reading/language arts, writing, mathematics, and other areas of the 
basic elementary school curriculum; or
    (3) At the public middle and high school levels, demonstrate a high 
level of competency by--
    (i) Passing a rigorous State test in each academic subject in which 
the teacher teaches (which may consist of passing a State certification 
or licensing test in each of these subjects); or
    (ii) Successfully completing in each academic subject in which the 
teacher teaches--
    (A) An undergraduate major;
    (B) A graduate degree;
    (C) Coursework equivalent to an undergraduate major; or
    (D) Advanced certification or credentialing.
    (c) Teachers not new to the profession. A teacher covered under 
Sec.  200.55 who is not new to the profession also must--
    (1) Hold at least a bachelor's degree; and
    (2)(i) Meet the applicable requirements in paragraph (b)(2) or (3) 
of this section; or
    (ii) Based on a high, objective, uniform State standard of 
evaluation in accordance with section 9101(23)(C)(ii) of the ESEA, 
demonstrate competency in each academic subject in which the teacher 
teaches.
    (d) A special education teacher is a ``highly qualified teacher'' 
under the Act if the teacher meets the requirements for a ``highly 
qualified special education teacher'' in 34 CFR 300.18.

(Authority: 20 U.S.C. 1401(10); 7801(23))



0
47. Revise Sec.  200.57 to read as follows:


Sec.  200.57  Plans to increase teacher quality.

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

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



0
48. Revise Sec.  200.58 to read as follows:


Sec.  200.58  Qualifications of paraprofessionals.

    (a) Applicability. (1) An LEA must ensure that each 
paraprofessional who is hired by the LEA and who works in a program 
supported with funds under subpart A of this part meets the 
requirements in paragraph (b) of this section and, except as provided 
in paragraph (e) of this section, the requirements in either paragraph 
(c) or (d) of this section.

[[Page 31708]]

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

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



0
49. Revise Sec.  200.59 to read as follows:


Sec.  200.59  Duties of paraprofessionals.

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

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



0
50. Revise Sec.  200.60 to read as follows:


Sec.  200.60  Expenditures for professional development.

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

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



0
 51. Add Sec.  200.61 to read as follows:


Sec.  200.61  Parents' right to know.

    (a) At the beginning of each school year, an LEA that receives 
funds under subpart A of this part must notify the parents of each 
student attending a Title I school that the parents may request, and 
the LEA will provide the parents on request, information regarding the 
professional qualifications of the student's classroom teachers, 
including, at a minimum, the following:
    (1) Whether the teacher has met State qualification and licensing 
criteria for the grade levels and subject areas in which the teacher 
provides instruction.
    (2) Whether the teacher is teaching under emergency or other 
provisional status through which State qualification or licensing 
criteria have been waived.
    (3) The baccalaureate degree major of the teacher and any other 
graduate certification or degree held by the teacher, and the field of 
discipline of the certification or degree.
    (4) Whether the child is provided services by paraprofessionals 
and, if so, their qualifications.
    (b) A school that participates under subpart A of this part must 
provide to each parent--
    (1) Information on the level of achievement of the parent's child 
in each of the State academic assessments required under Sec.  200.2;
    (2) Timely notice that the parent's child has been assigned, or has 
been taught for four or more consecutive weeks by, a teacher of a core 
academic subject who is not highly qualified.

[[Page 31709]]

    (c) An LEA and school must provide the notice and information 
required under this section--
    (1) In a uniform and understandable format, including alternative 
formats upon request; and
    (2) To the extent practicable, in a language that parents can 
understand.


Sec.  200.61   [Amended]

0
52. Add an undesignated center heading ``Participation of Eligible 
Children in Private Schools'' following Sec.  200.61.

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



0
53. Add Sec.  200.62 to read as follows:


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

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


Sec.  200.62   [Amended]

0
54. Remove the undesignated center heading ``Allocations to LEAs'' 
following Sec.  200.62.

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



0
55. Revise Sec.  200.63 to read as follows:


Sec.  200.63   Consultation.

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

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



0
56. Revise Sec.  200.64 to read as follows:


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

    (a) Equal expenditures. (1) Funds expended by an LEA under subpart 
A of this part for services for eligible private school children in the 
aggregate must be equal to the amount of funds generated by private 
school children from low-income families under paragraph (a)(2) of this 
section.
    (2) An LEA must meet this requirement as follows:
    (i)(A) If the LEA reserves funds under Sec.  200.77 to provide 
instructional and related activities for public elementary or secondary 
school students at the district level, the LEA must also provide from 
those funds, as applicable, equitable services to eligible private 
school children.
    (B) The amount of funds available to provide equitable services 
from the applicable reserved funds must be proportionate to the number 
of private school children from low-income families residing in 
participating public school attendance areas.
    (ii) The LEA must reserve the funds generated by private school 
children under Sec.  200.78 and, in consultation with appropriate 
officials of the private schools, may--
    (A) Combine those amounts, along with funds under paragraph 
(a)(2)(i) of this section, if appropriate, to create a pool of funds 
from which the LEA provides equitable services to eligible private 
school children, in the aggregate, in greatest need of those services; 
or
    (B) Provide equitable services to eligible children in each private 
school with the funds generated by children from low-income families 
under Sec.  200.78 who attend that private school.
    (b) Services on an equitable basis. (1) The services that an LEA 
provides to eligible private school children must be equitable in 
comparison to the services and other benefits that the LEA provides to 
public school children participating under subpart A of this part.
    (2) Services are equitable if the LEA--

[[Page 31710]]

    (i) Addresses and assesses the specific needs and educational 
progress of eligible private school children on a comparable basis as 
public school children;
    (ii) Meets the equal expenditure requirements under paragraph (a) 
of section; and
    (iii) Provides private school children with an opportunity to 
participate that--
    (A) Is equitable to the opportunity provided to public school 
children; and
    (B) Provides reasonable promise of the private school children 
achieving the high levels called for by the State's student academic 
achievement standards or equivalent standards applicable to the private 
school children.
    (3)(i) The LEA may provide services to eligible private school 
children either directly or through arrangements with another LEA or a 
third-party provider.
    (ii) If the LEA contracts with a third-party provider--
    (A) The provider must be independent of the private school and of 
any religious organization; and
    (B) The contract must be under the control and supervision of the 
LEA.
    (4) After timely and meaningful consultation under Sec.  200.63, 
the LEA must make the final decisions with respect to the services it 
will provide to eligible private school children.

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



0
 57. Revise Sec.  200.65 to read as follows:


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

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

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



0
58. Revise Sec.  200.66 to read as follows:


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

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

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



0
 59. Revise Sec.  200.67 to read as follows:


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

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


Sec.  200.68  [Removed and Reserved]

0
60. Remove and reserve Sec.  200.68.


Sec.  200.69   [Amended]

0
61. Revise the undesignated center heading following reserved Sec.  
200.69 to read as follows:

Allocations to LEAs

0
62. Revise Sec.  200.70 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 Sec. Sec.  200.72, 200.75, and 200.100, 
an SEA may not change the Secretary's allocation to any LEA that serves 
an area with a total census population of at least 20,000 persons.
    (d) In accordance with Sec.  200.74, an SEA may use an alternative 
method, approved by the Secretary, to distribute the State's share of 
basic grants, concentration grants, targeted grants, and education 
finance incentive grants to LEAs that serve an area with a total census 
population of less than 20,000 persons.

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


0
63. Revise Sec.  200.71 to read as follows:


Sec.  200.71  LEA eligibility.

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

[[Page 31711]]

    (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.  200.71  [Amended]

0
64. Remove the undesignated center heading ``Fiscal Requirements'' 
following Sec.  200.71.

0
65. Add Sec.  200.72 to read as follows:


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

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

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



0
66. Revise Sec.  200.73 to read as follows:


Sec.  200.73  Applicable hold-harmless provisions.

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

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

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

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



0
67. Add Sec.  200.74 to read as follows:


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

    (a) For eligible LEAs serving an area with a total census 
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 for small LEAs across the State for all Title I, part A 
programs.
    (d) Based on the alternative poverty data selected, the SEA must--
    (1) Re-determine eligibility of its small LEAs for basic grants, 
concentration grants, targeted grants, and education finance incentive 
grants in accordance with Sec.  200.71;
    (2) Calculate allocations for small LEAs in accordance with the 
provisions of sections 1124, 1124A, 1125, and 1125A of the ESEA, as 
applicable; and
    (3) Ensure that each LEA receives the hold-harmless amount to which 
it is entitled under Sec.  200.73.
    (e) The amount of funds available for redistribution under each 
formula is the separate amount determined by the Secretary under 
sections 1124, 1124A, 1125, and 1125A of the ESEA for eligible small 
LEAs after the SEA has made the adjustments required under Sec.  
200.72(c).
    (f) If the amount available for redistribution to small LEAs under 
an alternative method is not sufficient to satisfy applicable hold-
harmless requirements, the SEA must ratably reduce all eligible small 
LEAs to the amount available.

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



0
68. Add Sec.  200.75 to read as follows:

[[Page 31712]]

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

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

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



0
69. Add Sec.  200.77 to read as follows:


Sec.  200.77  Reservation of funds by an LEA.

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

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



0
70. Add Sec.  200.78 to read as follows:


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

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

[[Page 31713]]

Sec.  200.78  [Amended]

0
71. Add an undesignated center heading ``Fiscal Requirements'' 
following Sec.  200.78.


0
72. Add Sec.  200.79 to read as follows:


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

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

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

PART 299--GENERAL PROVISIONS

0
73. The authority citation for part 299 is revised to read as follows:

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


0
74. In Sec.  299.1 revise paragraph (a) to read as follows:


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

    (a) This part establishes uniform administrative rules for programs 
in titles I through XIII of the Elementary and Secondary Education Act 
of 1965, as amended (ESEA). As indicated in particular sections of this 
part, certain provisions apply only to a specific group of programs.
* * * * *

Subpart G--[Removed]

0
75. Remove subpart G.

[FR Doc. 2017-12126 Filed 7-6-17; 8:45 am]
BILLING CODE 4000-01-P