[Federal Register Volume 61, Number 59 (Tuesday, March 26, 1996)]
[Proposed Rules]
[Pages 13324-13329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7098]




[[Page 13323]]

_______________________________________________________________________

Part IX





Department of Education





_______________________________________________________________________



34 CFR Part 299



General Provisions, Elementary and Secondary Education Act; Proposed 
Rule

  Federal Register / Vol. 61, No. 59 / Tuesday, March 26, 1996 / 
Proposed Rules  

[[Page 13324]]


DEPARTMENT OF EDUCATION

34 Part 299

RIN 1810-AA82


General Provisions, Elementary and Secondary Education Act

AGENCY: Department of Education.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The U.S. Secretary of Education (the Secretary) proposes to 
issue general regulations governing programs under the Elementary and 
Secondary Education Act of 1965, as amended by the Improving America's 
Schools Act of 1994 (the ``Elementary and Secondary Education Act'', 
``ESEA'' or the ``Act''). These proposed regulations would implement 
several provisions in Title XIV, General Provisions, of the Act. These 
proposed regulations would generally govern all programs under the Act, 
and would establish uniform provisions that would minimize burdensome 
differences in implementing these provisions in individual programs.
    The areas that would be covered by these proposed regulations for 
ESEA programs include: other regulations that would apply; priorities 
for empowerment zones or enterprise communities in discretionary 
grants; the consolidation of State and local administrative funds; 
maintenance of effort; services to private school children and 
teachers; and complaint procedures. In addition, the proposed 
regulations would provide further flexibility to States under Title III 
of the Goals 2000: Educate America Act.

DATES: Comments must be received on or before May 10, 1996.

ADDRESSES: All comments concerning these proposed regulations should be 
addressed to Delores Warner, U.S. Department of Education, Portals 
Building, 1250 Maryland Avenue SW., Room 4000, Washington, DC 20202-
6110. The fax number for submitting comments is (202) 260-0310. 
Comments may also be sent through the Internet to 
General__P[email protected].
    To ensure that public comments have maximum effect in developing 
the final regulations, the Department urges that each comment clearly 
identify the specific section or sections of the regulations that the 
comment addresses and that comments be in the same order as the 
regulations.
    A copy of any comments that concern information collection 
requirements should also be sent to the Office of Management and Budget 
at the address listed in the Paperwork Reduction Act section of this 
preamble.

FOR FURTHER INFORMATION CONTACT: For further information on this part, 
please contact Delores Warner. Telephone: (202) 260-1941. Individuals 
who use a telecommunications device for the deaf (TDD) may call the 
Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 
a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: On October 20, 1994, the President signed 
into law the Improving America's Schools Act of 1994 (IASA) (Pub. L. 
103-382). The IASA reauthorizes and fundamentally changes the ESEA, 
redesigning its programs so that they work together to support high-
quality teaching and learning to help all children learn challenging 
material in academic areas and acquire the knowledge and skills they 
will need to succeed in the 21st century.
    Throughout the reauthorized Elementary and Secondary Education Act, 
including Title XIV of the Act, provisions are designed to make it 
easier for programs to work together with, rather than separately from, 
one another. In addition, the Act fosters the operation of ESEA 
programs in unison with the broader education that children receive. 
For example, the reauthorized Act supports State and community reform 
efforts geared to challenging State academic standards, particularly 
those initiated or supported by the Goals 2000: Educate America Act.
    Unlike the reauthorized ESEA programs, earlier ESEA programs often 
were not coordinated with each other and with other educational 
programs in the schools. The previous programs often were not designed 
to target funds to areas, schools or students with the greatest needs 
for assistance, nor were they designed to support State and local 
efforts at broader educational reform. They were often burdensome 
without adequate provisions for needed flexibility.
    Virtually all of the major ESEA programs have been redesigned to 
include greater flexibility at the State and local levels, to support 
directly comprehensive State and local reforms of teaching and 
learning, and to ensure that all children--regardless of background and 
whatever school they attend--can achieve at high levels.
    In implementing the Act, the Department, is issuing regulations 
only where absolutely necessary, and is providing flexibility to the 
maximum extent permitted by statute. The regulations proposed in Part 
299 are consistent with this approach and are intended to provide 
support to educators at the State and local levels for the appropriate 
implementation of provisions in Title XIV and of the Act as a whole. 
Title XIV contains provisions that allow: flexibility, promote 
coordinated program services and allow waivers of certain provisions to 
increase the quality of instruction or improve academic performance, 
consolidated State and local plans and applications, consolidation of 
State and local administrative funds, and uniform provisions that apply 
to programs authorized in the ESEA. Most of the provisions of Title XIV 
are not the subject of regulations. The Department has issued, 
separately from this notice of proposed rulemaking (NPRM), non-binding 
guidance on a number of Title XIV provisions such as State consolidated 
plans (sections 14302 of the Act), waivers (section 14401 of the Act), 
and the Gun-Free Schools Act (sections 14601-03 of the Act). Copies of 
this guidance are available from Delores Warner, U.S. Department of 
Education, 1250 Maryland Avenue SW., Room 4000, Portals Building, 
Washington, DC 20202-6110.

Summary of Provisions

    Section 299.1 of these proposed regulations would provide general 
information about the scope of these regulations and the laws and 
regulations that would apply to ESEA programs. Further guidance about 
which general administrative regulations would apply is provided in the 
discussion of Sec. 299.2 in the next paragraph of this summary.
    Section 299.2 of these proposed regulations would provide 
flexibility by permitting a State to formally adopt its own general 
provisions, in lieu of 34 CFR Part 80 (Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments) of the Education Department General Provisions Regulations 
for most ESEA programs if the State meets several minimal requirements. 
This flexibility is similar to flexibility that was previously included 
in regulations for Chapters 1 and 2 of ESEA before the 1994 amendments.
    Section 299.2 would also indicate that 34 CFR Part 80 would apply 
to direct grant programs under ESEA and to Title XI. While this would 
provide States in ESEA State-administered programs the option of 
adopting and using their own procedures as an alternative to Part 80, 
the Department believes that the application of Part 80 to direct grant 
programs and to Title XI provides the appropriate balance of 
flexibility and accountability for results in those programs. As the 
Department continues to look for other ways to simplify the

[[Page 13325]]
direct grant process, the Department particularly invites comments on 
the appropriate balance of flexibility and accountability in direct 
grant and Title XI programs.
    Section 299.2 would indicate that 34 CFR Part 80 applies to State, 
local, and Indian tribal governments under direct grant programs, and 
programs under Title XI of ESEA (Coordinated Services). 34 CFR Part 80 
also applies to other programs under the ESEA unless a State formally 
adopts its own written fiscal and administrative requirements for 
expending and accounting for all funds received by State educational 
agencies (SEA) and local educational agencies (LEAs) under this part 
that meet certain minimal requirements contained in Sec. 299.2. This 
flexibility would also apply to Title III of the Goals 2000: Educate 
America Act.
    Section 299.2 would not affect the applicability of the 
Department's other general administrative regulations to ESEA programs. 
Therefore, unless a particular regulatory provision is inconsistent 
with a statutory provision (in which case the statute controls), the 
Department's general administrative regulations apply to ESEA programs 
as follows:
    (a) 34 CFR Part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals and Nonprofit Organizations) applies to 
grantees other than State and local governments and Indian tribal 
organizations.
    (b) 34 CFR Part 75 (Direct Grant Programs), except for Sec. 75.650 
(participation of students enrolled in private schools), applies to all 
direct grant programs.
    (c) 34 CFR Part 76 (State-Administered Programs), except for 
Secs. 76.650 through 76.662 (participation of students enrolled in 
private schools), applies to State administered grant programs.
    (d) 34 CFR Part 77 (Definitions that Apply to Department 
Regulations).
    (e) 34 CFR Part 79 (Intergovernmental Review of Department of 
Education Programs and Activities) applies to some of the ESEA 
programs.
    (f) 34 CFR Part 80 (Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments), as 
discussed in this preamble.
    (g) 34 CFR Part 81 (General Education Provisions Act--Enforcement) 
applies to all ESEA programs except for Title VIII (Impact Aid) of 
ESEA.
    (h) 34 CFR Part 82 (New Restrictions on Lobbying) applies to all 
ESEA programs.
    (i) 34 CFR Part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free 
Workplace (Grants)) applies to all ESEA programs.
    (j) 34 CFR Part 86 (Drug-Free Schools and Campuses) applies to 
institutions of higher education.
    Guidance on which of these provisions apply to Title VIII (Impact 
Aid) will be issued separately.
    Section 299.3 of these proposed regulations would authorize the 
Secretary to coordinate discretionary grants under the ESEA with the 
Empowerment Zones and Enterprise Community initiative, a critical 
community revitalization strategy. Under this initiative, the United 
States Department of Housing and Urban Development or the United States 
Department of Agriculture has designated certain urban and rural areas 
as Empowerment Zones, including Supplemental Empowerment Zones, or 
Enterprise Communities. These selected areas, which are characterized 
by pervasive poverty, unemployment, and general distress, are 
implementing locally designed strategies for building healthy, safe, 
and economically vibrant communities. Interested individuals may 
contact the Department of Housing and Urban Development at 1-800-998-
9999 for additional information on the Empowerment Zone and Enterprise 
Community initiative.
    The discretionary grants under the ESEA can play a key role in 
helping Empowerment Zones and Enterprise Communities address key 
educational needs as part of a community revitalization strategy. 
Therefore, to encourage grantees to concentrate resources to address 
multi-faceted problems, under the proposed Sec. 299.3, the Secretary 
would be able to give priority to applications that propose projects 
that serve these zones and communities.
    In Sec. 299.4, the Secretary proposes to authorize each SEA to 
adopt and use its own reasonable standards in determining whether the 
majority of its resources for administrative purposes come from non-
Federal sources, a prerequisite for the consolidation of State 
administrative funds as authorized by section 14201 of the ESEA. Under 
this section, SEAs would also be permitted to adopt reasonable 
standards for determining when to allow the consolidation of local 
administrative funds. This section would provide flexibility for SEAs 
in these State-administered programs and fulfill the Secretary's 
obligation to issue regulations under section 14203.
    Sections 299.5-299.12 of these proposed regulations would contain 
uniform provisions regarding maintaining fiscal effort, serving private 
school children and teachers, and for filing and resolving complaints 
from the public. In the past, these requirements have varied program-
by-program. The revised provisions discussed as follows are designed to 
reduce burden for grantees by making their implementation uniform among 
ESEA programs.
    The proposed regulations in Sec. 299.5 for maintenance of effort 
would, for the first time, provide uniform provisions to reduce the 
burden of requiring different recordkeeping for several programs. It 
would also provide more flexibility than in previous regulations by 
excluding all Federal funds and supplemental funds spent as a result of 
a Presidentially declared disaster. The exclusion of Federal funds from 
maintenance of effort calculations is consistent with the purposes of 
the statutory provision. The Secretary interprets the maintenance of 
effort provision in section 14501 of Title XIV not to apply to Title VI 
programs, because of the specific maintenance of effort provision in 
section 6401 of Title VI. Therefore, Sec. 299.5 also does not apply to 
Title VI programs.
    The proposed regulations governing participation of private schools 
students, teachers and other personnel in Secs. 299.6-299.9 are similar 
to the regulations for Title I of the Act (34 CFR Secs. 200.10-200.14 
(published on July 3, 1995 (60 FR 34800)). For example, Sec. 299.7 on 
equitable participation includes the same provisions on ``equal 
expenditures'' and ``equitable basis'' as in 34 CFR Sec. 200.11, except 
that Sec. 299.7 does not include provisions relating to the specific 
distribution of Title I funds. Instead of simply cross-referencing the 
Title I regulations, however, for the convenience of the reader, full 
provisions are included in this notice.
    Sections 299.6-299.9 also provide for more flexibility than in 
general regulations on participation of students enrolled in private 
schools currently in 34 CFR Secs. 76.650-76.662 that would otherwise 
apply. Sections 299.6-299.9 would supersede the provisions of 34 CFR 
Secs. 76.650-76.662 for the programs listed in Sec. 299.6.
    Sections 299.10-299.12 require States to establish complaint 
procedures in State-administered programs, so that the public is 
provided an opportunity to bring complaints to the attention of State 
program administrators. The provisions are similar to those previously 
included in the regulations for Chapter 1 of ESEA before the 1994 
amendments, but the new regulations would provide the SEA with 
considerably more flexibility in

[[Page 13326]]
establishing reasonable procedures for resolving these complaints by 
authorizing SEAs to adopt their own reasonable time limits for 
resolving a complaint.

Executive Order 12866

1. Assessment of Costs and Benefits

    These proposed regulations have been reviewed in accordance with 
Executive Order 12866. Under the terms of the order, the Secretary has 
assessed the potential costs and benefits of this regulatory action. 
The potential costs and benefits associated with the proposed 
regulations are minimal and to the extent there are costs, the costs 
result from the statutory requirements and regulations determined by 
the Secretary to be necessary for administering these programs 
effectively and efficiently. To the extent there are burdens 
specifically associated with information collection requirements, they 
are identified and explained elsewhere in this preamble under the 
heading ``Paperwork Reduction Act of 1995.''
    Thus, in assessing the potential costs and benefits--both 
quantitative and qualitative--of these proposed regulations, the 
Secretary has determined that the benefits of the proposed regulations 
justify the costs. The Secretary has also determined that this 
regulatory action does not interfere unduly with State and local 
governments in the exercise of their governmental functions.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866, the Secretary invites comments 
on whether there may be further opportunities to reduce any potential 
costs or increase potential benefits resulting from these proposed 
regulations without impeding the effective and efficient administration 
of the program.

2. Clarity of the Regulations

    Executive Order 12866 requires each Federal agency to write 
regulations that are easy to understand.
    The Secretary invites comment on how to make these regulations 
easier to understand, including answers to questions such as the 
following: (1) Are the requirements in the regulations clearly stated? 
(2) Do the regulations contain technical terms or other wording that 
interferes with the clarity? (3) Does the format of the regulations 
(grouping and order of sections, use of headings, paragraphing, etc.) 
aid or reduce their clarity? Would the regulations be easier to 
understand if they were divided into more (but shorter) sections? (A 
``section'' is preceded by the symbol ``Sec. '' and a numbered heading; 
for example ``Sec. 299.1 What are the purpose and scope of the 
regulations?'') (4) Is the description of the proposed regulations in 
the ``Supplementary Information'' section of this preamble helpful in 
understanding the proposed regulations? How could this description be 
more helpful in making the proposed regulations easier to understand? 
(5) What else could the Department do to make the regulations easier to 
understand?
    A copy of any comments that concern whether these proposed 
regulations are easy to understand should also be sent to Stanley M. 
Cohen, Regulations Quality Officer, U.S. Department of Education, 600 
Independence Avenue, S.W. (room 5121, FOB-10), Washington, DC, 20202-
2241.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities.
    The small entities that would be affected by these proposed 
regulations are small local educational agencies (LEAs), and public or 
nonprofit private agencies receiving Federal funds under the ESEA 
programs. The proposed regulations would not have a significant 
economic impact on the small entities affected because the proposed 
regulations would not impose excessive regulatory burdens or require 
unnecessary Federal supervision. The proposed regulations would impose 
minimal requirements to ensure the proper expenditure of program funds.

Paperwork Reduction Act of 1995

    Collection of Information: General Provisions, Elementary and 
Secondary Education Act: Complaint Process: Sections 299.10-299.12 
contain information collection requirements. As required by the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department of 
Education has submitted a copy of these sections to the Office of 
Management and Budget (OMB) for its review under that Act.
    Under sections 299.10-299.12, an SEA is required to adopt written 
procedures for receiving and resolving on a timely basis complaints 
from an organization or individual that the SEA or an agency or 
consortium of agencies is violating a Federal statute or regulations 
that apply to a covered program listed in Sec. 299.10(b). The 
resolution of a complaint by the SEA may be reviewed by the Secretary, 
at the Secretary's discretion.
    The likely respondents to the collection of information in the 
complaint process are individuals and organizations that submit 
complaints. The information submitted is used to resolve complaints and 
will be collected as complaints are submitted.
    We estimate that each State will receive, an average of twenty 
complaints each year, and that each complaint will take an average of 
four burden hours to prepare. Therefore, the total annual reporting and 
recordkeeping burden that will result from the collection of this 
information is 4560 burden hours (fifty-seven State entities, 
multiplied by twenty complaints, multiplied by four burden hours for 
preparing each complaint).
    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, OMB, Room 10235, New Executive 
Office Building, Washington, D.C. 20503; Attention: Desk Officer for 
U.S. Department of Education.
    The Department considers comments by the public on these proposed 
collections of information in:
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the 
proposed regulations.

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Intergovernmental Review

    Some of the programs that would be affected by these regulations 
are subject to the requirements of Executive Order 12372 and the 
regulations in 34 CFR Part 79. The objective of the Executive order is 
to foster an inter-governmental partnership and a strengthened 
federalism by relying on processes developed by State and local 
governments for coordination and review of proposed Federal financial 
assistance. In accordance with the order, this document is intended to 
provide early notification of the Department's specific plans and 
actions for these programs.

Invitation to Comment

    Interested persons are invited to submit comments and 
recommendations regarding these proposed regulations.
    All comments submitted in response to these proposed regulations 
will be available for public inspection during and after the comment 
period, in rooms 4400 and 4100, respectively, Portals Building, 1250 
Maryland Avenue, S.W., Washington, DC., between the hours of 8:30 a.m. 
and 4 p.m., Monday through Friday of each week except Federal holidays.

List of Subjects in 34 CFR Part 299

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

(Catalog of Federal Domestic Assistance Number does not apply)

    Dated: March 20, 1996.
Richard W. Riley,
Secretary of Education.

    The Secretary proposes to amend Title 34 of the Code of Federal 
Regulations by adding a new Part 299 to read as follows:

PART 299--GENERAL PROVISIONS

Subpart A--Purpose and Applicability

Sec.
299.1  What are the purpose and scope of these regulations?
299.2  What regulations apply to ESEA programs?

Subpart B--Selection Criteria

299.3  What priority may the Secretary establish for activities in 
an Empowerment Zone or Enterprise Community?

Subpart C--Consolidation of State and Local Administrative Funds

299.4  What requirements apply to the consolidation of state and 
local administrative funds?

Subpart D--Fiscal Requirements

299.5  What maintenance of effort requirements apply to ESEA 
programs?

Subpart E--Services to Private School Students and Teachers

299.6  What are the responsibilities for providing services to 
children and teachers in private schools?
299.7  What are the factors for determining equitable participation 
of children and teachers in private schools?
299.8  What are the requirements to ensure that funds do not benefit 
a private school?
299.9  What are the requirements concerning property, equipment, and 
supplies for the benefit of private school children and teachers?

Subpart F--Complaint Procedures

299.10  What complaint procedures shall an SEA adopt?
299.11  What are included in the complaint procedures?
299.12  How does an organization or individual file a complaint?

    Authority: 20 U.S.C. 1221e-3, unless otherwise noted.

Subpart A--Purpose and Applicability


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

    (a) This part establishes uniform administrative rules for programs 
in Titles I through XIII of the Elementary and Secondary Education Act 
of 1965, as amended (ESEA), except where otherwise indicated. As 
indicated in particular sections of this part, certain provisions apply 
only to a specific group of programs.
    (b) If an ESEA program does not have implementing regulations, the 
Secretary implements the program under the authorizing statute, and, to 
the extent applicable, Title XIV of ESEA, the General Education 
Provisions Act, the regulations in this part, and the Education 
Department General Administrative Regulations (34 CFR Parts 74 through 
86) that are not inconsistent with specific statutory provisions of 
this Act.

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


Sec. 299.2  What regulations apply to ESEA programs?

    With regard to the applicability of Education Department General 
Administrative Regulations (EDGAR) to the ESEA programs (in addition to 
any other specific implementing regulations):
    (a) 34 CFR Part 80 (Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments) applies to 
State, local, and Indian tribal governments under direct grant programs 
(as defined in 34 CFR 75.1(b)), and programs under Title XI of ESEA.
    (b) 34 CFR Part 80 also applies to all other programs under the 
ESEA and to programs under Title III of the Goals 2000: Educate America 
Act (Title III of Goals 2000), unless a State formally adopts its own 
written fiscal and administrative requirements for expending and 
accounting for all funds received by State educational agencies (SEAs) 
and local educational agencies (LEAs) under the ESEA and Title III of 
Goals 2000. If a State adopts its own alternative requirements, the 
requirements must be available for inspection upon the request of the 
Secretary or the Secretary's representatives and must--
    (1) Be sufficiently specific to ensure that funds received under 
ESEA and Title III of Goals 2000 are used in compliance with all 
applicable statutory and regulatory provisions;
    (2) Ensure that funds received under ESEA and Title III of Goals 
2000 are spent only for reasonable and necessary costs of operating 
programs under this part; and
    (3) Ensure that funds received under ESEA and Title III of Goals 
2000 are not used for general expenses required to carry out other 
responsibilities of State or local governments.

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

Subpart B--Selection Criteria


Sec. 299.3  What priority may the Secretary establish for activities in 
an Empowerment Zone or Enterprise Community?

    For any ESEA discretionary grant program, the Secretary may 
establish a priority, as authorized by 34 CFR 75.105(b), for projects 
that will--
    (a) Use a significant portion of the program funds to address 
substantial problems in an Empowerment Zone, including a Supplemental 
Empowerment Zone, or an Enterprise Community designated by the United 
States Department of Housing and Urban Development or the United States 
Department of Agriculture; and
    (b) Contribute to systemic educational reform in an Empowerment 
Zone, including a Supplemental Empowerment Zone, or an Enterprise 
Community, and are made an integral

[[Page 13328]]
part of the Zone or Community's comprehensive community revitalization 
strategies.

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

Subpart C--Consolidation of State and Local Administrative Funds


Sec. 299.4  What requirements apply to the consolidation of state and 
local administrative funds?

    An SEA may adopt and use its own reasonable standards in 
determining whether--
    (a) The majority of its resources for administrative purposes come 
from non-Federal sources to permit the consolidation of State 
administrative funds in accordance with section 14201 of the Act; and
    (b) To approve an LEA's consolidation of its administrative funds 
in accordance with section 14203 of the Act.

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

Subpart D--Fiscal Requirements


Sec. 299.5  What maintenance of effort requirements apply to ESEA 
programs?

    (a) General. An LEA receiving funds under a covered program listed 
in subsection (b) may receive its full allocation of funds if the SEA 
finds that either the combined fiscal effort per student or the 
aggregate expenditures of State and local funds with respect to the 
provision of free public education in the LEA for the preceding fiscal 
year was not less than 90 percent of combined fiscal effort per student 
or the aggregate expenditures for the second preceding fiscal year.
    (b) Covered programs. Programs covered by this subpart are the 
following:
    (1) Part A of Title I (Improving Basic Programs Operated by Local 
Educational Agencies).
    (2) Title II (Eisenhower Professional Development Program) (other 
than section 2103 and part C of this title).
    (3) Subpart 2 of Part A of Title III (State and Local Programs for 
School Technology Resources).
    (4) Part A of Title IV (Safe and Drug-Free Schools and Communities) 
(other than section 4114).
    (c) Meaning of ``preceding fiscal year.'' For purposes of 
determining if the requirement of paragraph (a) of this section is met, 
the ``preceding fiscal year'' means the Federal fiscal year, or the 12-
month fiscal period most commonly used in a State for official 
reporting purposes, prior to the beginning of the Federal fiscal year 
in which funds are available for obligation by the Department.

    Example: For fiscal year 1995 funds, that are first made 
available on July 1, 1995, if a State is using the Federal fiscal 
year, the ``preceding fiscal year'' is Federal fiscal year 1994 
(which began on October 1, 1993 and ended September 30, 1994) and 
the ``second preceding fiscal year'' is Federal fiscal year 1993 
(which began on October 1, 1992). If a State is using a fiscal year 
that begins on July 1, 1995, the ``preceding fiscal year'' is the 
12-month period ending on June 30, 1994, and the ``second preceding 
fiscal year,'' is the period ending on June 30, 1993.

    (d) Expenditures. (1) In determining an LEA's compliance with 
paragraph (a) of this section, the SEA shall consider only the LEA's 
expenditures from State and local funds for free public education. 
These include expenditures for administration, instruction, attendance 
and health services, pupil transportation services, operation and 
maintenance of plant, fixed charges, and net expenditures to cover 
deficits for food services and student body activities.
    (2) The SEA may not consider the following expenditures in 
determining an LEA's compliance with the requirement in paragraph (a) 
of this section:
    (i) Any expenditures for community services, capital outlay, debt 
service or supplemental expenses made as a result of a Presidentially 
declared disaster.
    (ii) Any expenditures made from funds provided by the Federal 
Government.

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

Subpart E--Services to Private School Students and Teachers


Sec. 299.6  What are the responsibilities for providing services to 
children and teachers in private schools?

    (a) General. An agency or consortium of agencies receiving funds 
under a program listed in subsection (b) of this section shall, after 
timely and meaningful consultation with appropriate private school 
officials, in accordance with that section, provide special educational 
services or other benefits under this part, on an equitable basis, to 
children who are enrolled in private elementary and secondary schools, 
and are eligible for that program, and to their teachers or other 
educational personnel.
    (b) Covered programs. In accordance with section 14503(b) of ESEA, 
programs covered by this subpart are the following:
    (1) Part C of Title I (Migrant Education).
    (2) Title II (Professional Development) (other than section 2103 
and part C of this title).
    (3) Title III (other than Part B of the Title) (Star Schools).
    (4) Part A of Title IV (Safe and Drug-Free Schools and Communities) 
(other than section 4114).
    (5) Title VI (Innovative Education Program Strategies).
    (6) Title VII (Bilingual Education).
    (c) Provisions not applicable. Sections 75.650 and 76.650 through 
76.662 of Part 34 of the Code of Federal Regulations (participation of 
students enrolled in private schools) do not apply to covered programs.

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


Sec. 299.7  What are the factors for determining equitable 
participation of children and teachers in private schools?

    (a) Equal expenditures. (1) Expenditures of funds made by an agency 
or consortium of agencies under a covered program for services for 
eligible private school children and their teachers and other 
educational personnel must be equal on a per-pupil basis to the amount 
of funds expended for participating public school children and their 
teachers and other educational personnel taking into account the number 
and educational needs of those children and their teachers or other 
educational personnel.
    (2) Before determining equal expenditures under paragraph (a)(1) of 
this section, an agency or consortium of agencies shall pay for the 
reasonable and necessary administrative costs of providing services to 
public and private school children and their teachers or other 
educational personnel, from the agency's or consortium of agencies' 
total allocation of funds under the applicable ESEA program.
    (b) Services on an equitable basis. (1) The services that an agency 
or consortium of agencies provides to eligible private school children 
and their teachers and other educational personnel must also be 
equitable in comparison to the services and other benefits provided to 
public school children and their teachers or other educational 
personnel participating in a program under this subpart.
    (2) Services are equitable if the agency or consortium of these 
agencies--
    (i) Addresses and assesses the specific needs and educational 
progress of eligible private school children and their teachers or 
other educational personnel on a comparable basis as public school 
children and their teachers or other educational personnel;
    (ii) Determines the number of students to be served on an equitable 
basis;

[[Page 13329]]

    (ii) Meets the equal expenditure requirements under paragraph (a) 
of this section; and
    (iii) Provides private school children and their teachers or other 
educational personnel with an opportunity to participate that--
    (A) Is equitable to the opportunity and the benefits provided to 
public school children and their teachers or other educational 
personnel; and
    (B) Provides reasonable promise of those children meeting 
challenging academic standards as called for by the State's student 
performance standards and has their teachers or other educational 
personnel assisting these students in meeting high standards.
    (3) The agency or consortium of these agencies shall make the final 
decisions with respect to the services to be provided to eligible 
private school children and their teachers or other educational 
personnel.
    (c) If the needs of private school students, their teachers or 
other educational personnel are different from the needs of students, 
teachers or other educational personnel in the public schools, the 
agency or consortium of these agencies shall provide program benefits 
for the private school students, teachers, or other educational 
personnel that are different from the benefits the subgrantee provides 
for the public school children and their teachers or other educational 
personnel.

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


Sec. 299.8  What are the requirements to ensure that funds do not 
benefit a private school?

    (a) An agency or consortium of these agencies shall use funds under 
a covered program to provide services that supplement, and in no case 
supplant, the level of services that would, in the absence of services 
under that ESEA program, be available to participating children and 
their teachers or other educational personnel in private schools.
    (b) An agency or consortium of those agencies shall use funds under 
a listed program to meet the special educational needs of participating 
children who attend a private school and their teachers or other 
educational personnel, but may not use those funds for--
    (1) The needs of the private school; or
    (2) The general needs of children and their teachers or other 
educational personnel in the private school.

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


Sec. 299.9  What are the requirements concerning property, equipment, 
and supplies for the benefit of private school children and teachers?

    (a) A public agency must keep title to, and exercise continuing 
administrative control of, all property, equipment, and supplies that 
the public agency acquires with funds under a covered program for the 
benefit of eligible private school children and their teachers or other 
educational personnel.
    (b) The public agency may place equipment and supplies in a private 
school for the period of time needed for the program.
    (c) The public agency shall ensure that the equipment and supplies 
placed in a private school--
    (1) Are used only for proper ESEA program purposes; and
    (2) Can be removed from the private school without remodeling the 
private school facility.
    (d) The public agency must remove equipment and supplies from a 
private school if--
    (1) The equipment and supplies are no longer needed for ESEA 
program purposes; or
    (2) Removal is necessary to avoid unauthorized use of the equipment 
or supplies for other than ESEA program purposes.
    (e) No funds may be used for repairs, minor remodeling, or 
construction of private school facilities.
    (f) For the purpose of this section, the term public agency 
includes the agency or consortium of these agencies.

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

Subpart F--Complaint Procedures


Sec. 299.10  What complaint procedures shall an SEA adopt?

    (a) General. An SEA shall adopt written procedures, consistent with 
State law, for--
    (1) Receiving and resolving any complaint from an organization or 
individual that the SEA or an agency or consortium of agencies is 
violating a Federal statute or regulations that apply to a covered 
program listed in subsection (b) of this section.
    (2) Reviewing an appeal from a decision of an agency or consortium 
of agencies with respect to a complaint; and
    (3) Conducting an independent on-site investigation of a complaint 
if the SEA determines that an on-site investigation is necessary.
    (b) Covered programs. Programs covered by this subpart are the 
following:
    (1) Part A of Title I (Improving Basic Programs Operated by Local 
Educational Agencies).
    (2) Part B of Title I (Even Start Family Literacy Programs).
    (3) Part C of Title I (Migrant Education).
    (4) Part D of Title I (Children and Youth Who Are Neglected, 
Delinquent, or At Risk of Dropping Out).
    (5) Title II (Eisenhower Professional Development Program) (other 
than section 2103 and part C of this title).
    (6) Subpart 2 of Part A of Title III (State and Local Programs for 
School Technology Resources).
    (7) Part A of Title IV (Safe and Drug-Free Schools and Communities) 
(other than section 4114).
    (8) Title VI (Innovative Education Program Strategies).

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


Sec. 299.11  What are included in the complaint procedures?

    An SEA shall include the following in its complaint procedures--
    (a) A reasonable time limit after the SEA receives a complaint for 
resolving the complaint, including a provision for carrying out an 
independent on-site investigation, if necessary.
    (b) An extension of the time limit under paragraph (a) of this 
section only if exceptional circumstances exist with respect to a 
particular complaint.
    (c) The right for the complainant to request the Secretary to 
review the final decision of the SEA, at the Secretary's discretion.

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


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

    An organization or individual may file a written signed complaint 
with an SEA. The complaint must include--
    (a) A statement that the SEA or an agency or consortium of these 
agencies has violated a requirement of a Federal statute or regulations 
that apply to the ESEA program; and
    (b) The facts on which the statement is based, and the specific 
requirement violated.

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

[FR Doc. 96-7098 Filed 3-25-96; 8:45 am]
BILLING CODE 4000-01-P