[Federal Register Volume 83, Number 39 (Tuesday, February 27, 2018)]
[Proposed Rules]
[Pages 8396-8399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04102]



34 CFR Part 300

RIN 1820-AB77
[Docket ID ED-2017-OSERS-0128]

Assistance to States for the Education of Children With 
Disabilities; Preschool Grants for Children With Disabilities

AGENCY: Office of Special Education and Rehabilitative Services 
(OSERS), Department of Education.

ACTION: Notice of proposed rulemaking.


SUMMARY: In order to ensure the Department's ``Equity in IDEA'' or 
``significant disproportionality'' regulations effectively address 
significant disproportionality, the Department proposes to postpone the 
compliance date by two years, from July 1, 2018, to July 1, 2020. The 
Department also proposes to postpone the date for including children 
ages three through five in the analysis of significant 
disproportionality with respect to the identification of children as 
children with disabilities and as children with a particular impairment 
from July 1, 2020, to July 1, 2022.

DATES: We must receive your comments on or before May 14, 2018.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or email. To ensure that we do not receive 
duplicate copies, please submit your comments only once. In addition, 
please include the Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket is available on the site 
under the ``Help'' tab.
     Postal Mail, Commercial Delivery, or Hand Delivery: The 
Department strongly encourages commenters to submit their comments 
electronically. However, if you mail or deliver your comments in 
response to this request, address them to Johnny W. Collett, Assistant 
Secretary, Office of Special Education and Rehabilitation Services, 
U.S. Department of Education, 400 Maryland Avenue SW, Room 5107, 
Potomac Center Plaza, Washington, DC 20202-2500.
    Privacy Note: The Department's policy is to make all comments 
received from members of the public available for public viewing in 
their entirety on the Federal eRulemaking Portal at 
www.regulations.gov. Therefore, commenters should be careful to include 
in their comments only information that they wish to make publicly 

Education, 400 Maryland Avenue SW, Room 5104, Potomac Center Plaza, 
Washington, DC 20202-2500. Telephone: (202) 245-7605, or by email at: 
[email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service, toll free, at 1-800-

    Invitation to Comment: We invite you to submit comments regarding 
this notice of proposed rulemaking. We will consider comments on 
proposed delayed compliance dates only and will not consider comments 
on the text or substance of the final regulations. See ADDRESSES for 
instructions on how to submit comments.
    During and after the comment period, you may inspect all public 
comments about this notice of proposed rulemaking by accessing 
Regulations.gov. You may also inspect the comments in person in Room 
5104, 400 Maryland Avenue SW, Potomac Center Plaza, Washington, DC, 
between 8:30 a.m. and 4:00 p.m. Washington, DC time, Monday through 
Friday of each week, except Federal holidays. If you want to schedule 
time to inspect comments, please contact the person listed under FOR 
    Assistance to Individuals with Disabilities in Reviewing the 
Rulemaking Record: On request, we will provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for this notice of proposed rulemaking. If you 
want to schedule an appointment for this type of accommodation or 
auxiliary aid, please contact the person listed under FOR FURTHER 
    On February 24, 2017, President Trump signed Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' which established a policy 
``to alleviate unnecessary regulatory burdens'' on the American people. 
Section 3(a) of the Executive Order directed each Federal agency to 
establish a regulatory reform task force, the duty of which is to 
evaluate existing regulations and ``make recommendations to the agency 
head regarding their repeal, replacement, or modification.'' On June 
22, 2017, therefore, the Department published a notice in the Federal 
Register (82 FR 28431) seeking input on regulations that may be 
appropriate for repeal, replacement, or modification.
    As part of that regulatory review exercise, OSERS is reviewing the 
Assistance to States for the Education of Children With Disabilities; 
Preschool Grants for Children With Disabilities regulations (the 
``Equity in IDEA'' or ``significant disproportionality'' regulations), 
published in the Federal Register on December 19, 2016 (81 FR 92376). 
We are, therefore, proposing to postpone the compliance by two years in 
order that the Department may review the regulation to ensure it 
effectively addresses significant disproportionality.
    Statute: Section 618(d)(1) of IDEA (20 U.S.C. 1418(d)(1)) requires 
every State that receives IDEA Part B funds to

[[Page 8397]]

collect and examine data to determine if significant disproportionality 
based on race or ethnicity exists in the State or the LEAs of the State 
with respect to (a) the identification of children as children with 
disabilities; (b) the placement in particular educational settings of 
such children; and (c) the incident, duration, and type of disciplinary 
actions, including suspensions and expulsions. IDEA does not define 
``significant disproportionality'' or instruct how data must be 
collected and examined.
    Current Regulations: The current Equity in IDEA regulations 
effectively define ``significant disproportionality.'' Sections 
300.646(b) and 300.647 establish a standard methodology States must use 
to determine whether significant disproportionality based on race and 
ethnicity is occurring in the State and in its local educational 
agencies (LEAs) with respect to the identification, placement, and 
discipline of children with disabilities.
    In addition, if a State determines that there is significant 
disproportionality occurring in an LEA, section 618(d)(2)(B) of the 
Individuals with Disabilities Education Act (IDEA) and Sec.  300.646(d) 
require the LEA to reserve 15 percent of its Part B funds to be used 
for comprehensive coordinated early intervening services (comprehensive 
CEIS). Section 300.646(d)(1)(ii) requires the LEA to identify and 
address the factors contributing to significant disproportionality as 
part of implementing comprehensive CEIS. Section 300.646(d)(2) expands 
the populations of children eligible for these services to include 
children, with and without disabilities, from age 3 through grade 12.
    The significant disproportionality regulations became effective 
January 18, 2017, but the Department delayed the date for compliance. 
States are not required to begin complying until July 1, 2018, and are 
not required to include children ages three through five in their 
analyses of significant disproportionality with respect to the 
identification of children as children with disabilities and as 
children with a particular impairment until July 1, 2020.
    Proposed Regulations: The Department proposes to postpone the 
compliance date for implementing the regulations to July 1, 2020 from 
July 1, 2018. The Department also proposes to postpone the compliance 
date for including children ages three through five in the significant 
disproportionality analysis to July 1, 2022, from July 1, 2020.
    Reasons: As the Department noted in the Notice of Proposed 
Rulemaking (NPRM) proposing the significant disproportionality 
regulations and again in the final rule adopting them, the status quo 
for school districts across the country properly identifying children 
with disabilities is troubling. In 2012, American Indian and Alaska 
Native students were 60 percent more likely to be identified for an 
intellectual disability than children in other racial or ethnic groups, 
while black children were more than twice as likely as other groups to 
be so identified. Similarly, American Indian or Alaska Native students 
were 90 percent more likely, black students were 50 percent more 
likely, and Hispanic students were 40 percent more likely to be 
identified as having a learning disability. In addition, black children 
were more than twice as likely to be identified with an emotional 
disturbance. And yet, in SY 2012-13, only 28 States and the District of 
Columbia identified any LEAs with significant disproportionality, and 
of the 491 LEAs identified, 75 percent were located in only seven 
States. Of the States that identified LEAs with significant 
disproportionality, only the District of Columbia and four States 
identified significant disproportionality in all three categories of 
analysis--identification, placement, and in discipline. 81 FR 92380.
    The Department is concerned, however, given the public comments it 
has received in response to its general solicitation in 2017 on 
regulatory reform, that the Equity in IDEA regulations may not 
appropriately address the problem of significant disproportionality. We 
therefore propose to postpone by two years the compliance dates for the 
regulations so that we may review all of the issues raised and 
determine how to better serve children with disabilities.
    A number of commenters suggested, for example, that the Department 
lacks the statutory authority under IDEA to require States to use a 
standard methodology, pointing out as well that the Department's 
previous position, adopted in the 2006 regulations implementing the 
2004 amendments to IDEA, was that States are in the best position to 
evaluate factors affecting determinations of significant 
    Similarly, one detailed comment expressed concern that the standard 
methodology improperly looks at group outcomes through statistical 
measures rather than focusing on what is at the foundation of IDEA, 
namely the needs of each individual child and on the appropriateness of 
individual identifications, placements, or discipline. Further, a 
number of commenters suggested that the standard methodology would 
provide incentives to LEAs to establish numerical quotas on the number 
of children who can be identified as children with disabilities, 
assigned to certain classroom placements, or disciplined in certain 
    Finally, still other commenters suggested that the Department could 
not accurately assess the impact of the regulations given that it did 
not provide any standards by which it would assess the required 
``reasonableness'' of State risk ratio thresholds and that calculations 
of significant disproportionality should be better aligned with State 
Performance Plan indicators, including the percent of districts that 
have a significant discrepancy, by race or ethnicity, in the rate of 
suspensions and expulsion for children with disabilities (Indicator 
4B), and the percent of districts with disproportionate representation 
of racial and ethnic groups in special education and related services 
(Indicator 9) and in specific disability categories (Indicator 10) that 
is the result of inappropriate identification.

Executive Orders 12866, 13563, and 13771

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and, therefore, subject to 
the requirements of the Executive order and subject to review by the 
Office of Management and Budget (OMB). Section 3(f) of Executive Order 
12866 defines a ``significant regulatory action'' as an action likely 
to result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local or 
tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This proposed regulatory action is a significant regulatory action 
subject to review by OMB under section 3(f) of Executive Order 12866.
    We have also reviewed these regulations under Executive Order

[[Page 8398]]

13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor their regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things, and to the extent practicable--the costs 
of cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than specifying the behavior or manner of compliance that regulated 
entities must adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including providing economic incentives--such as user fees 
or marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing this proposed regulatory action only upon a reasoned 
determination that its benefits justify its costs. Based on the 
analysis that follows, the Department believes that these regulations 
are consistent with the principles in Executive Order 13563.
    We also have determined that this regulatory action would not 
unduly interfere with State, local, and Tribal governments in the 
exercise of their governmental functions.
    In this regulatory impact analysis we discuss the need for 
regulatory action, alternatives considered, the potential costs and 
benefits, net budget impacts, assumptions, limitations, and data 

Need for These Regulations

    As explained in the previous section, we are proposing this 
regulatory action in order to delay implementation of a regulation that 
we are concerned may not meet its fundamental purpose, namely to 
properly identify and address significant disproportionality among 
children with disabilities. We propose the delay as well to give the 
Department, the States, and the public additional time to study the 
questions involved and determine how to better serve children with 

Alternatives Considered

    The Department considered proposing a delay of the compliance dates 
for different lengths of time and decided upon two years as an 
appropriate length, given a realistic measure of how long it takes the 
agency to develop, propose, and promulgate complex regulations. In the 
Department's experience, one year is too little time as a general 
matter and, for these regulations in particular, given the amount of 
work on this issue the Department has already done, three years is too 

Analysis of Costs and Benefits

    The Department has analyzed the costs of complying with the 
proposed regulatory action. While postponing the obligation to comply 
with the regulations would not place any new requirements on States, 
the delay in the compliance date would reduce costs over the 10 years 
relative to the baseline set out in the December 2016 final rule.
    The Department estimates that this regulatory action would generate 
cost savings between $10.9 and $11.5 million, with a reduction in 
transfers of between $59.6 and $63.0 million. These savings are driven 
by two separate, but related factors: Fewer States implementing the 
regulations during the 2018-19 and 2019-20 school years and, as a 
result, the lower number of LEAs identified as having significant 
disproportionality in each of those years under the standard 
    In developing our estimates, the Department assumed that a small 
number of States, who may already be prepared, or nearly prepared, to 
implement the regulations on July 1, 2018 will continue to do so, 
regardless of any delay in the compliance date. We also assume that a 
subset of States will implement the regulations in the following school 
year (2019-20), with the remainder of States waiting until the 2020 
compliance date to implement the regulations. We assume that 10 States 
would implement the revised regulations on July 1, 2018, five States 
would implement them as of July 1, 2019, and the remaining 40 would 
wait until July 1, 2020.
    Further, the Department estimates that the number of LEAs 
identified with significant disproportionality in each year as a result 
of the revised regulations would be reduced due to the delay in 
implementation. Previously, the Department estimated that 400 new LEAs 
would be identified each year. We estimate that the delay in compliance 
date would result in only 80 additional LEAs being identified in the 
2018-2019 school year (a reduction of 320) and only 100 additional LEAs 
identified in the 2019-20 school year (a reduction of 300). These 
estimates assume that the number of additional LEAs identified each 
year is roughly proportional to the number of States that implement the 
revised regulations.\1\

    \1\ This calculation of savings includes a change to the 
baseline in the December 2016 final rule due to an incorrect 
calculation in the 3 percent discount rate, shown in detail in the 
cost analysis spreadsheet posted in the docket with this document. 
This calculation of cost savings does not change any of the 
assumptions regarding wage rates, hours of burden, or number of 
personnel that were discussed in the final rule. The assumptions 
upon which the cost-benefit calculations in the final rule are based 
are being evaluated by the Department as part of the review of the 
final rule itself.

Executive Order 13771

    Consistent with Executive Order 13771 (82 FR 9339, February 3, 
2017), we have estimated that this proposed regulatory action will not 
impose any additional costs.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
    The U.S. Small Business Administration (SBA) Size Standards define 
``small entities'' as for-profit or nonprofit institutions with total 
annual revenue below $7,000,000 or, if they are institutions controlled 
by small governmental jurisdictions (that are comprised of cities, 
counties, towns, townships, villages, school districts, or special 
districts), with a population of less than 50,000. These proposed 
regulations would affect all LEAs, including the estimated 17,371 LEAs 
that meet the definition of small entities. However, we have determined 
that the proposed regulations would not have a significant economic 
impact on these small entities. As stated earlier, this proposed 
regulatory action imposes no new costs.

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Paperwork Reduction Act of 1995

    This regulatory action does not contain any information collection 

Intergovernmental Review

    This program is subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. One of the objectives of the Executive 
order is to foster an intergovernmental partnership and a strengthened 
federalism. The Executive order relies on processes developed by State 
and local governments for coordination and review of proposed Federal 
financial assistance.
    This document provides early notification of the Department's 
specific plans and actions for this program.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the contact person listed 
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. Free 
internet access to the official edition of the Federal Register and the 
Code of Federal Regulations is available via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Portable Document Format (PDF). To use PDF you 
must have Adobe Acrobat Reader, which is available free at the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

List of Subjects in 34 CFR Part 300

    Administrative practice and procedure, Education of individuals 
with disabilities, Elementary and secondary education, Equal 
educational opportunity, Grant programs--education, Privacy, Private 
schools, Reporting and recordkeeping requirements.

    Dated: February 23, 2018.
Johnny W. Collett,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 2018-04102 Filed 2-23-18; 4:15 pm]