[Federal Register Volume 62, Number 99 (Thursday, May 22, 1997)]
[Rules and Regulations]
[Pages 28248-28255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13490]



[[Page 28247]]

_______________________________________________________________________

Part IX





Department of Education





_______________________________________________________________________



34 CFR Parts 200 and 299



Elementary and Secondary Education Act General Provisions, Final Rule

  Federal Register / Vol. 62, No. 99 / Thursday, May 22, 1997 / Rules 
and Regulations  

[[Page 28248]]



DEPARTMENT OF EDUCATION

34 CFR Parts 200 and 299

RIN 1810-AA82


General Provisions, Elementary and Secondary Education Act

AGENCY: Department of Education.

ACTION: Final regulations.

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

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

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

COMPLIANCE: However, affected parties do not have to comply with the 
information requirements in 299.11(d) until the Department of Education 
publishes in the Federal Register the control numbers assigned by the 
Office of Management and Budget (OMB) to these information collection 
requirements. Publication of the control numbers notifies the public 
that OMB has approved these information requirements under the 
Paperwork Reduction Act of 1995.

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

SUPPLEMENTARY INFORMATION: On October 20, 1994, the President signed 
into law the Improving America's Schools Act of 1994 (IASA) (Pub. L. 
103-382). The IASA reauthorizes and fundamentally changes the ESEA, 
redesigning its programs so that they work together to support high-
quality teaching and learning to help all children learn challenging 
material in academic areas and acquire the knowledge and skills they 
will need to succeed in the 21st century.
    The reauthorized ESEA, including Title XIV, is designed to make it 
easier for programs to work with, rather than separately from, one 
another. In addition, the Act fosters the coordination of ESEA programs 
with the broader education services that children receive. For example, 
the reauthorized Act supports State and community reform efforts geared 
to challenging State academic standards, particularly those initiated 
or supported by the Goals 2000: Educate America Act.
    The new programs are also designed to target funds to areas, 
schools or students with the greatest needs for assistance, and to 
support State and local efforts at broader educational reform. At the 
same time they reduce burdens and provide for needed flexibility.
    Generally, in implementing the Act, the Department is issuing 
regulations only where absolutely necessary, or to provide increased 
flexibility. The regulations in Part 299 are consistent with this 
approach and are intended to provide support to educators at the State 
and local levels in their implementation of provisions in Title XIV and 
of the Act as a whole. Title XIV contains provisions that provide for 
flexibility; promote coordinated program services; authorize waivers of 
certain provisions to increase the quality of instruction or improve 
academic performance; authorize consolidated State and local plans and 
applications and consolidation of State and local administrative funds; 
and establish uniform provisions applicable to programs authorized in 
the ESEA.
    Most of the provisions of Title XIV are not the subject of 
regulations. The Department has issued, separately from this 
regulation, non-binding guidance to help grantees better understand and 
implement a number of Title XIV provisions such as State consolidated 
plans (section 14302 of the Act), waivers (section 14401 of the Act), 
and the Gun-Free Schools Act (sections 14601-14603 of the Act). Copies 
of these guidance packages are available from Delores Warner, U.S. 
Department of Education, 1250 Maryland Avenue S.W., Room 4000, Portals 
Building, Washington, DC 20202-6110. The Department is currently 
preparing additional non-binding guidance addressing certain other 
Title XIV provisions.
    On March 26, 1996, the Secretary published a notice of proposed 
rulemaking (NPRM) for Title XIV in the Federal Register (61 FR 13324). 
The preamble to the NPRM included a discussion of the provisions 
enacted by Congress that were addressed in the NPRM.

Analysis of Comments

    In response to the Secretary's invitation to comment in the NPRM, 
the Department received nine letters from State and local officials and 
various organizations. Most of the letters contained multiple comments. 
An analysis of the comments and the Secretary's responses to those 
comments is presented below.
    In developing these final regulations, the Secretary has considered 
these comments, balancing the concerns of State and local school 
officials, parents, and others with the statutory purposes of Title XIV 
and the needs of the students, parents, and teachers to be served. In 
addition, the Secretary took into account the principle of only 
regulating where absolutely necessary. As a result of considering all 
of these factors, the Department has made several substantive changes 
to the regulations. Several clarifying and technical changes were also 
made to the regulations.

Subpart A--Purpose and Applicability

Section 299.2  What General Administrative Regulations Apply to ESEA 
Programs?

    Comment: None.
    Discussion: In reviewing the notice of proposed rulemaking, the 
Department was concerned that it be clear that the three standards of 
accountability that alternative State fiscal and administrative 
provisions have to meet under the section, are adequate to ensure that 
program costs are allocable to a particular ``cost objective.'' See OMB 
circular A-87, Attachment A subsection C.3. The three standards are 
that State provisions must ensure that (1) funds are used in compliance 
with all applicable Federal provisions, (2) costs are reasonable and 
necessary for operating these programs, and (3) funds are not to be 
used for general expenses required to carry out other responsibilities 
of a State or its subrecipients.
    The Department has concluded that the three standards are 
sufficient and, in particular, to meet the first of the three 
standards, alternative State provisions must, among other things, 
ensure that

[[Page 28249]]

costs are allocable to a particular cost objective. Therefore, there is 
no need to add a specific additional standard on the allocability of 
costs, but the Department has added a clarifying note after Sec. 299.2.
    Change: The Department has added a clarifying note after 
Sec. 299.2.

Subpart B--Selection Criteria

Section 299.3  What Priority May the Secretary Establish for Activities 
in an Empowerment Zone or Enterprise Community?

    Comment: One commenter stated that establishing a priority in 
discretionary grants for Empowerment Zones or Enterprise Communities 
(EZ/EC) gives an ``unfair competitive preference'' to EZ/EC communities 
that already receive preferential consideration in several other 
discretionary grant programs. The commenter believes that preferential 
treatment of one set of identified applicants negates the fairness of 
discretionary grant competitions.
    Discussion: The Department often establishes priorities in grant 
competitions. Establishment of a priority does not eliminate the 
fairness or the competitive nature of a grant competition. For example, 
even when a ``competitive preference'' is given, a high quality 
application that addresses the other published criteria thoroughly may 
more likely be funded than an applicant qualifying for an EZ/EC 
preference that files a poorer quality application that does not 
address the other criteria well. Additionally, the use of the proposed 
priority is discretionary.
    As a general matter, the Department believes that the general 
purposes of the EZ/EC communities are appropriate to support through a 
priority in certain competitions. The EZ/EC communities are 
characterized by pervasive poverty, unemployment, and general distress, 
and are implementing locally designed strategies for building healthy, 
safe and economically vibrant communities with limited resources. Thus, 
in certain competitions it will be appropriate to address greatest 
needs by concentrating limited resources on an applicant that serves an 
EZ/EC community.
    Change: None.

Subpart C--Consolidation of State and Local Administrative Funds

Section 299.4(a)  What Requirements Apply to the Consolidation of State 
and Local Administrative Funds?

    Comment: One commenter, representing a State educational agency 
(SEA), recommended that regulatory language be added that specifically 
states that ``program funds'' may not be consolidated. The commenter 
believes that the specific statement would assist local educational 
agencies (LEAs).
    Discussion: Section 14203 of the ESEA, the provision of law that 
the regulation implements, clearly applies only to the portion of 
program funds that may be used for administration. Therefore, it is not 
necessary to provide more detailed regulations on this point. Section 
14203 requires that SEAs, in collaboration with LEAs in the State, 
establish procedures for responding to requests from LEAs to 
consolidate administrative funds, and for establishing limitations on 
the amount of funds that may be used for administration on a 
consolidated basis. As long as the State establishes reasonable 
provisions, including that only reasonable and necessary expenses of 
administering the programs properly can be incurred, the State has 
flexibility in establishing procedures. To the extent that LEAs have 
questions about these matters, SEAs have the authority to issue 
regulations, guidance, and procedures to address them.
    Change: None.
    Comment: One commenter said that the regulations would go beyond 
the language of the Act by specifying when and if a State can 
consolidate administrative funds by adding the reference to ``for 
administrative purposes.'' The commenter believes that it will be 
difficult to define ``administrative funds''. The commenter asks the 
Secretary to let the wording of the statute stand and eliminate the 
reference to ``for administrative purposes.''
    Discussion: The Department believes that the regulatory language is 
consistent with the intent of section 14201 since this section concerns 
the administration of programs. The intent of the provision is to 
permit only SEAs with sufficient funding to support their 
administrative activities to consolidate ESEA administrative funds.
    Change: None.

Subpart D--Fiscal Requirements

Section 299.5  What Maintenance of Effort Requirements Apply to ESEA 
Programs?

    Comments: One commenter agreed with the proposed maintenance of 
effort provisions, especially with regard to the Title I program. The 
commenter felt that the maintenance of effort regulations are clearly 
stated, easy to understand, and explicit about costs that may or may 
not be included in calculations. The commenter also stated that 
requiring a level of commitment from local school districts will ensure 
that Title I funds benefit the students for whom they were allocated.
    Discussion: None.
    Change: Because Sec. 299.5 applies to Title I, these regulations 
remove the existing Title I--specific maintenance of effort regulations 
in 34 CFR 200.64.

Subpart E--Services to Private School Students and Teachers

Section 299.6  What Are the Responsibilities for Providing Services to 
Children and Teachers in Private Schools?

    Comment: Two commenters asked that the term ``meaningful 
consultation'' be clarified. One commenter was concerned that the term 
may not mean the same thing to public school administrators as it does 
to private school representatives. The second commenter was concerned 
that the provisions of the Education Department General Administrative 
Regulations (EDGAR) pertaining to consultation no longer apply. One of 
the commenters also noted that ``meaningful consultation'' is, however, 
defined in the statute in section 14503(c) of Title XIV.
    Discussion: Section 14503(c) of ESEA contains specific elements of 
``meaningful consultation,'' and it is not necessary to restate them in 
the regulations. While the EDGAR provisions on consultation are no 
longer applicable to these programs, the Title XIV statutory provisions 
regarding consultation are modeled after the EDGAR provisions, so that 
consultation requirements have not been diminished.
    Change: None.
    Comment: One commenter expressed a concern that Sec. 299.6(c) makes 
the private school participation provisions in EDGAR not applicable to 
covered programs. Of particular interest to this commenter is 
Sec. 76.659 of the EDGAR regulations, which permits publicly funded 
personnel to provide services in other than public facilities. The 
commenter recommends that the EDGAR regulation be incorporated in its 
entirety into Subpart E of these regulations.
    Discussion: Nothing in Sec. 299.6 precludes publicly-funded 
personnel, in appropriate circumstances, from providing services in 
non-public settings. The level of detail suggested by the commenter is 
not necessary for this regulation. The Department will consider whether 
further nonregulatory guidance on this issue is necessary.
    Change: None.

[[Page 28250]]

Section 299.7  What are the Factors for Determining Equitable 
Participation of Children and Teachers in Private Schools?

    Comment: One commenter asked for further explanation of the term 
``equitable basis.'' The commenter wanted it made clear that LEAs must 
subtract administrative expenses before making an equitable 
distribution of the remaining funds.
    Discussion: The Secretary believes that, as drafted, 
Sec. 299.7(a)(2) already indicates clearly that LEAs first must take 
administrative expenses from the total allocation of program funds 
before determining ``equal expenditures.''
    Change: None.
    Comment: One commenter called for more clarification of the phrase 
``taking into account the number and educational needs of those 
children and their teachers * * *,'' and ``other educational 
personnel'' in Sec. 299.7(a)(1). Another commenter asked for more 
specific definitions of ``benefits'' and ``special needs'' as used in 
Sec. 299.7(c). All of these comments raise concern about the potential 
for variations in interpretation at the LEA level.
    Discussion: Section 299.7(b)(3) makes clear that an agency or 
consortium of agencies, in consultation with private school officials, 
makes the final determination as to what services shall be provided to 
private school children. If, after timely and meaningful consultation, 
the agency or consortium decides that private school children need 
services that are different from those provided to public school 
children, Sec. 299.7(c) requires them to provide those different 
services. The Secretary believes that decisions about equitable 
services are best made at the local level after meaningful consultation 
as described in the statute, and that detailed regulations are 
unnecessary.
    Change: None.
    Comment: One commenter suggested that this section would require an 
LEA to assess the specific needs and educational progress of eligible 
private school children and teachers. The commenter believes that such 
an assessment would be difficult, unworkable, burdensome and viewed by 
``private school operators'' with ``hostility'' as an intrusion into 
their operations.
    Discussion: The Secretary believes that, through meaningful 
consultation, the LEA can work cooperatively with private school 
representatives to acquire adequate information to make the types of 
determinations required by this section. It is in the interest of 
private school representatives and the LEA to work in a cooperative 
manner to develop plans that ensure equitable services to meet the 
needs of private school children and their teachers.
    Change: None.

Section 299.8  What are the Requirements to Ensure That Funds do not 
Benefit a Private School?

    Comment: One commenter observed that this section does not contain 
a particular method for determining compliance with the section. The 
commenter believes that the lack of specific procedures will cause 
confusion and the expenditure of time and effort by LEAs in attempting 
to demonstrate to auditors and program monitors a district's compliance 
with this regulation. The commenter suggested deleting the section.
    Discussion: The Secretary believes that, by using meaningful 
consultation and reasonable methods of administrative oversight, an LEA 
will be able to develop a relatively simple process for ensuring 
compliance with this section. This provision is similar to 34 CFR 
76.658. The Secretary is reluctant to establish more specific 
requirements and procedures that may or may not be appropriate to fit 
particular local circumstances.
    Change: None.

Section 299.9  What are the Requirements Concerning Property, 
Equipment, and Supplies for the Benefit of Private School Children and 
Teachers?

    Comment: One commenter expressed a concern that the wording of this 
section is too broad and asked for greater specificity, particularly 
exempting ``consumable'' products from the requirement.
    Discussion: These requirements are the same as those established 
for the Title I, Part A program at 34 CFR 200.13. There is no reason 
for treating ``consumable'' products differently from other supplies.
    Change: None.

Subpart F--Complaint Procedures

Section 299.10  What Complaint Procedures Shall an SEA Adopt?

    Comment: One commenter asked that the provision cover Title VII and 
the Bilingual Education Act. Three commenters asked that this provision 
be extended to cover other programs, outside of ESEA (e.g., the Carl D. 
Perkins Vocational and Applied Technology Education Act, the McKinney 
Homeless Assistance Act, the School to Work Opportunities Act, or Goals 
2000), in addition to those listed in paragraph (b).
    Discussion: The purpose of this subpart is to give the SEA the 
responsibility to resolve complaints where the SEA has administrative 
responsibilities for how a subgrantee implements the program. Because 
the Bilingual Education Act in Title VII is a discretionary grant 
program administered primarily at the LEA and Federal levels, rather 
than by the SEA, it is not appropriate to have SEAs establish and 
administer a complaint procedure. Part C of Title VII (Emergency 
Immigrant Education), which is State-administered, has been added to 
the list of covered programs. Additionally, language has been added to 
clarify that these procedures apply only to the State-administered 
portions of the Even Start programs.
    Because Title XIV of ESEA, the primary subject of these 
regulations, applies only to programs in ESEA, these regulations were 
designed to fit the needs of the programs in ESEA. Once the Department 
has experience with the implementation of these regulations, we will 
consider whether they should be extended to other programs.
    Change: One program has been added to the list of applicable 
programs, and language has been added to clarify that these procedures 
apply only to the State-administered portions of the Even Start 
programs.

Section 299.11  What Are Included in the Complaint Procedures?

    Comment: Several commenters suggested that the regulations be more 
specific. They suggested that the regulations require the provision of 
specific information to parents and LEAs; include minimum time limits 
for resolving a complaint, and require a written decision to resolve 
the complaint. One commenter suggested that the regulations indicate 
more clearly that they apply to complaints about services to private 
school students as well as other matters.
    Some commenters suggested that parents of eligible children be 
given notice that complaint procedures exist, and be provided advice on 
how to file complaints. A commenter further recommended that the 
procedures be made available in languages other than English, as 
appropriate.
    Discussion: These regulations balance the flexibility of ESEA and 
the principle of regulating only when absolutely necessary with the 
need in certain cases to establish minimum requirements to ensure that 
the purposes of the statute are met. Generally, the level of detail 
that these commenters suggest be included in the regulations on 
complaint procedures goes beyond what

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the Secretary considers absolutely necessary for these programs. 
Moreover, these matters are best left to the SEA to address after 
taking into account its particular circumstances. The Secretary does 
not think it is appropriate to prescribe further detailed 
specifications for the procedures. For example, although the Secretary 
believes that a reasonable period of time for hearing and resolving a 
complaint would generally be 60 to 90 days, regulating specific 
timelines for all complaints, no matter how detailed, does not seem 
necessary or appropriate.
    The regulations clarify that they apply, among other things, to 
complaints about violations of the requirements to serve private school 
children and that the resolution be in writing.
    On the other hand, the need for parents to be aware of the 
complaint procedures seems basic to ensuring proper accountability and 
involvement in the programs. Therefore, the Secretary has added a 
provision to ensure that LEAs adequately inform parents of the 
complaint procedures. In determining whether LEAs adequately informed 
parents, LEAs would be expected to make information available in 
languages other than English to the extent appropriate.
    Change: The Secretary has added clarifying language in paragraphs 
(a) and (c) and added a new paragraph (d) to Sec. 299.11 requiring that 
the complaint procedures include informing parents of the procedures.

Executive Order 12866

1. Assessment of Costs and Benefits

    These final regulations have been reviewed in accordance with 
Executive Order 12866. Under the terms of the order, the Secretary has 
assessed the potential costs and benefits of this regulatory action.
    The potential costs and benefits associated with the final 
regulations are minimal and to the extent there are costs, the costs 
result primarily from the statutory requirements and regulations 
determined by the Secretary to be necessary for administering these 
programs effectively and efficiently.
    Thus, in assessing the potential costs and benefits--both 
quantitative and qualitative--of these proposed regulations, the 
Secretary has determined that the benefits of the proposed regulations 
justify the costs.
    The Secretary has also determined that this regulatory action does 
not interfere unduly with State and local governments in the exercise 
of their governmental functions.

Summary of Potential Costs and Benefits

    The potential costs and benefits are discussed elsewhere in this 
preamble under the following heading: Analysis of Comments and Changes.

Paperwork Reduction Act of 1995

Collection of Information: General Provisions, Elementary and Secondary 
Education Act: Complaint Process

    1. Section 299.11(d) contains information collection requirements. 
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), 
the Department of Education has submitted a copy of this provision to 
the Office of Management and Budget (OMB) for its review under that 
Act.
    Under the Paperwork Reduction Act of 1995, no persons are required 
to respond to a collection of information unless it displays a valid 
OMB control number. The valid OMB control number assigned to the 
collection of information in these final regulations is displayed at 
the end of the affected sections of the regulations. The approval 
number for the information collection contained in Secs. 299.10-299.12 
(except for Sec. 299.11(d)) is 1810-0591 and the approval expires 05/
31/99.
    2. Section 299.11(d) was added as a result of public comments, and 
it contains an information collection requirement. As required by the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department of 
Education has submitted a copy of this provision to the Office of 
Management and Budget (OMB) for its review under the Act.
    Under Sec. 299.11(d), an SEA is required to indicate to LEAs that 
they must notify parents and appropriate private school officials or 
representatives of the complaint procedures. The likely respondents to 
the collection of information in the complaint process are SEAs and 
LEAs who will have to notify parents and the other individuals.
    We estimate that the burden associated with the public notification 
process will amount to an additional 136,000 hours. Some 17,000 school 
districts will have to spend an average of eight person hours 
developing a notice, reproducing it, and distributing it. Some LEAs may 
choose to put a notification in a local newspaper; others may 
distribute the notification to each student or parents or private 
school representative or official. Our estimate is based on the latter 
assumption. The other option would probably save a significant amount 
of time reproducing and distributing the notice. Additionally, if an 
SEA developed a standard notice for the LEAs in its State, burden would 
be reduced substantially. Therefore, if LEAs develop their own notice 
and distribute it to each student or parent or private school 
representative or official, the total annual reporting and 
recordkeeping burden that will result from the collection of this 
information is likely to be 136,000 burden hours (17,000 LEAs, 
multiplied by eight burden hours for developing a notice, reproducing 
it, and distributing it). If other options are taken by the SEA or LEA, 
many fewer burden hours will be involved.
    Organizations and individuals desiring to submit comments on the 
information collection requirement in Sec. 299.11(d) should direct them 
to the Office of Information and Regulatory Affairs, OMB, Room 10235, 
New Executive Office Building, Washington, D.C. 20503; Attention: Desk 
Officer for U.S. Department of Education.
    The Department considers comments by the public on this proposed 
collection of information in:
     Evaluating whether the proposed collection of information 
is necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the collection of 
information contained in Sec. 299.11(d) between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication.

Intergovernmental Review

    Some of the programs affected by these final regulations are 
subject to the requirements of Executive Order 12372 and the 
regulations in 34 CFR Part 79. The objective of the Executive order is 
to foster an inter-governmental partnership and a strengthened 
federalism by relying on processes

[[Page 28252]]

developed by State and local governments for coordination and review of 
proposed Federal financial assistance. In accordance with the order, 
this document is intended to provide early notification of the 
Department's specific plans and actions for these programs.

List of Subjects

34 CFR Part 200

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

34 CFR Part 299

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

    Dated: May 19, 1997.
Richard W. Riley,
Secretary of Education.
(Catalog of Federal Domestic Assistance Number does not apply)

    The Secretary amends Title 34 of the Code of Federal Regulations by 
amending Part 200 and adding a new Part 299 to read as follows:

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

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

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

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


Sec. 200.64  [Reserved]

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

PART 299--GENERAL PROVISIONS

Subpart A--Purpose and Applicability

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

Subpart B--Selection Criteria

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

Subpart C--Consolidation of State and Local Administrative Funds

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

Subpart D--Fiscal Requirements

299.5  What maintenance of effort requirements apply to ESEA 
programs?

Subpart E--Services to Private School Students and Teachers

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

Subpart F--Complaint Procedures

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

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

Subpart A--Purpose and Applicability


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

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

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


Sec. 299.2  What general administrative regulations apply to ESEA 
programs?

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

    Note: 34 CFR 222.13 indicates which EDGAR provisions apply to 
Title VIII programs (Impact Aid).

    Note: To meet the first of the three standards, alternative 
State provisions must, among other things, ensure that costs are 
allocable to a particular cost objective.

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

Subpart B--Selection Criteria


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

    For any ESEA discretionary grant program, the Secretary may 
establish a priority, as authorized by 34 CFR 75.105(b), for projects 
that will--
    (a) Use a significant portion of the program funds to address 
substantial problems in an Empowerment Zone, including a Supplemental 
Empowerment Zone, or an Enterprise

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Community designated by the United States Department of Housing and 
Urban Development or the United States Department of Agriculture; and
    (b) Contribute to systemic educational reform in such an 
Empowerment Zone, including a Supplemental Empowerment Zone, or such an 
Enterprise Community, and are made an integral part of the Zone or 
Community's comprehensive community revitalization strategies.

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

Subpart C--Consolidation of State and Local Administrative Funds


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

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

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

Subpart D--Fiscal Requirements


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

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

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

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

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

Subpart E--Services to Private School Students and Teachers


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

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

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


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

    (a) Equal expenditures. (1) Expenditures of funds made by an agency 
or consortium of agencies under a program listed in Sec. 299.6 (b) for 
services for eligible private school children and their teachers and 
other educational personnel must be equal on a per-pupil basis to the 
amount of funds expended for participating public school children and 
their teachers and other educational personnel, taking into account the 
number and educational needs of those children and their teachers and 
other educational personnel.
    (2) Before determining equal expenditures under paragraph (a)(1) of 
this section, an agency or consortium of agencies shall pay for the 
reasonable and necessary administrative costs of providing services to 
public and private school children and their teachers and other 
educational personnel from the agency's or consortium of agencies' 
total allocation of funds under the applicable ESEA program.
    (b) Services on an equitable basis. (1) The services that an agency 
or consortium of agencies provides to eligible private school children 
and their teachers and other educational personnel must also be 
equitable in comparison to the services and other benefits provided to 
public school children and their teachers or other educational 
personnel participating in a program under this subpart.
    (2) Services are equitable if the agency or consortium of 
agencies--
    (i) Addresses and assesses the specific needs and educational 
progress of eligible private school children and their teachers and 
other educational

[[Page 28254]]

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

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


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

    (a) An agency or consortium of agencies shall use funds under a 
program listed in Sec. 299.6(b) to provide services that supplement, 
and in no case supplant, the level of services that would, in the 
absence of services provided under that program, be available to 
participating children and their teachers and other educational 
personnel in private schools.
    (b) An agency or consortium of agencies shall use funds under a 
program listed in Sec. 299.6(b) to meet the special educational needs 
of participating children who attend a private school and their 
teachers and other educational personnel, but may not use those funds 
for--
    (1) The needs of the private school; or
    (2) The general needs of children and their teachers and other 
educational personnel in the private school.

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


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

    (a) A public agency must keep title to, and exercise continuing 
administrative control of, all property, equipment, and supplies that 
the public agency acquires with funds under a program listed in 
Sec. 299.6(b) for the benefit of eligible private school children and 
their teachers and other educational personnel.
    (b) The public agency may place equipment and supplies in a private 
school for the period of time needed for the program.
    (c) The public agency shall ensure that the equipment and supplies 
placed in a private school--
    (1) Are used only for proper purposes of the program; and
    (2) Can be removed from the private school without remodeling the 
private school facility.
    (d) The public agency must remove equipment and supplies from a 
private school if--
    (1) The equipment and supplies are no longer needed for the 
purposes of the program; or
    (2) Removal is necessary to avoid unauthorized use of the equipment 
or supplies for other than the purposes of the program.
    (e) No funds may be used for repairs, minor remodeling, or 
construction of private school facilities.
    (f) For the purpose of this section, the term public agency 
includes the agency or consortium of agencies.

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

Subpart F--Complaint Procedures


Sec. 299.10  What complaint procedures shall an SEA adopt?

    (a) General. An SEA shall adopt written procedures, consistent with 
State law, for--
    (1) Receiving and resolving any complaint from an organization or 
individual that the SEA or an agency or consortium of agencies is 
violating a Federal statute or regulation that applies to an applicable 
program listed in paragraph (b) of this section;
    (2) Reviewing an appeal from a decision of an agency or consortium 
of agencies with respect to a complaint; and
    (3) Conducting an independent on-site investigation of a complaint 
if the SEA determines that an on-site investigation is necessary.
    (b) Applicable programs. This subpart is applicable to the 
following programs:
    (1) Part A of Title I (Improving Basic Programs Operated by Local 
Educational Agencies).
    (2) Part B of Title I (Even Start Family Literacy Programs) (other 
than the federally administered direct grants for Indian tribes and 
tribal organizations, children of migratory workers, Statewide family 
literacy initiatives, and a prison that house women and children).
    (3) Part C of Title I (Migrant Education).
    (4) Part D of Title I (Children and Youth Who Are Neglected, 
Delinquent, or At Risk of Dropping Out).
    (5) Title II (Eisenhower Professional Development Program) (other 
than section 2103 and part C of this title).
    (6) Subpart 2 of Part A of Title III (State and Local Programs for 
School Technology Resources).
    (7) Part A of Title IV (Safe and Drug-Free Schools and Communities) 
(other than section 4114).
    (8) Title VI (Innovative Education Program Strategies).
    (9) Part C of Title VII (Emergency Immigrant Education)

(Approved by the Office of Management and Budget under OMB Control 
Number 1810-0591)

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


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

    An SEA shall include the following in its complaint procedures:
    (a) A reasonable time limit after the SEA receives a complaint for 
resolving the complaint in writing, including a provision for carrying 
out an independent on-site investigation, if necessary.
    (b) An extension of the time limit under paragraph (a) of this 
section only if exceptional circumstances exist with respect to a 
particular complaint.
    (c) The right for the complainant to request the Secretary to 
review the final decision of the SEA, at the Secretary's discretion. In 
matters involving violations of section 14503 (participation of private 
school children), the Secretary will follow the procedures in section 
14505(b).

(Approved by the Office of Management and Budget under OMB Control 
Number 1810-0591)

    (d) A requirement for LEAs to disseminate, free of charge, adequate 
information about the complaint

[[Page 28255]]

procedures to parents of students, and appropriate private school 
officials or representatives.

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


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

    An organization or individual may file a written signed complaint 
with an SEA. The complaint must be in writing and signed by the 
complainant, and include--
    (a) A statement that the SEA or an agency or consortium of agencies 
has violated a requirement of a Federal statute or regulation that 
applies to an applicable program; and
    (b) The facts on which the statement is based and the specific 
requirement allegedly violated.

(Approved by the Office of Management and Budget under OMB Control 
Number 1810-0591)

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

[FR Doc. 97-13490 Filed 5-21-97; 8:45 am]
BILLING CODE 4000-01-P