[Federal Register Volume 63, Number 197 (Tuesday, October 13, 1998)]
[Rules and Regulations]
[Pages 54996-54998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27290]



[[Page 54995]]

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Part IV





Department of Education





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34 CFR Part 200



Title I--Helping Disadvantaged Children Meet High Standards; Final Rule

  Federal Register / Vol. 63, No. 197 / Tuesday, October 13, 1998 / 
Rules and Regulations  

[[Page 54996]]



DEPARTMENT OF EDUCATION

34 CFR Part 200

RIN 1810-AA89


Title I--Helping Disadvantaged Children Meet High Standards

AGENCY: Department of Education.

ACTION: Final regulations.

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SUMMARY: The U.S. Secretary of Education (Secretary) amends the 
regulations implementing programs under Title I of the Elementary and 
Secondary Education Act of 1965. These amendments update the 
regulations to reflect subsequent statutory changes that affect Title I 
programs and delete an inapplicable provision.

EFFECTIVE DATE: These regulations take effect on November 12, 1998.

FOR FURTHER INFORMATION CONTACT: Wendy Jo New, Compensatory Education 
Programs, Office of Elementary and Secondary Education, U.S. Department 
of Education, 600 Independence Avenue, SW., Portals Building, room 
4400, Washington, DC 20202-6140. Telephone: (202) 260-0982. 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.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: On March 31, 1998, the Secretary published 
in the Federal Register (63 FR 34800) a notice of proposed rulemaking 
(NPRM) under Title I. The preamble to the NPRM included a discussion of 
the major changes proposed in that document to update the Title I 
regulations to reflect some recent statutory changes and to increase 
program flexibility in order to improve services for students. These 
proposed changes included the following:
     Amending Sec. 200.8 of the Title I regulations to allow 
funds received by an LEA under Part B of the Individuals with 
Disabilities Education Act (IDEA) to be combined with other Federal, 
State, and local funds to carry out any activities in a schoolwide 
program.
     Amending Sec. 200.28 of the Title I regulations to include 
a ``no-wide-variance'' provision to allow an LEA to designate as 
eligible and serve all school attendance areas and schools within a 
grade span or the entire LEA if the poverty rates of all areas and 
schools do not vary more than 10 percentage points.
     Allowing the use of Title I funds for construction of real 
property if such construction is reasonable and necessary to carry out 
a Title I program.
     Amending Sec. 200.63 of the final regulations to implement 
a statutory change that allows a State or LEA to exclude supplemental 
State and local funds that are expended in any school attendance area 
or school from both supplement, not supplant and comparability 
determinations under Parts A and C of Title I, as long as the 
supplemental State and local expenditures are for programs that meet 
the intent and purposes of Part A.
    These final regulations reflect two significant changes from the 
NPRM. First, the Secretary has decided not to include the ``no-wide-
variance'' provision in the final regulations. Second, the Secretary 
has decided not to include the provision authorizing construction of 
real property in the final regulations. The reasons for these decisions 
are fully explained in the appendix to these regulations.

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, 11 parties 
submitted comments on the proposed regulations. An analysis of the 
comments and of the changes in the regulations since publication of the 
NPRM is published as an appendix to these final regulations.
    Major issues are grouped according to subject. Technical and other 
minor changes--and any suggested changes the Secretary is not legally 
authorized to make under the applicable statutory authority--are not 
addressed.

Executive Order 12866

    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 associated with the final regulations are those 
resulting from statutory requirements and those determined by the 
Secretary to be necessary for administering this program effectively 
and efficiently.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these final regulations, the Secretary has 
determined that the benefits of the regulations justify the costs.
    The Secretary has also determined that this regulatory action does 
not unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.

Paperwork Reduction Act of 1995

    These regulations have been examined under the Paperwork Reduction 
Act of 1995 and have been found to contain no information collection 
requirements.

Assessment of Educational Impact

    Based on the response to the NPRM and on its own review, the 
Department has determined that the regulations in this document do not 
require transmission of information that is being gathered by or is 
available from any other agency or authority of the United States.

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html

    To use the pdf, you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the pdf, call the U.S. Government Printing 
Office toll free at 1-888-293-6498.
    Anyone may also view this document in text copy only on an 
electronic bulletin board of the Department. Telephone: (202) 219-1511 
or, toll free, 1-800-222-4922. The document is located under Option G--
Files/Announcements, Bulletins and Press Releases.

    Note: The official version of this document is the document 
published in the Federal Register.

List of Subjects in 34 CFR Part 200

    Administrative practice and procedure, Adult education, Children, 
Coordination, Education, Education of disadvantaged children, Education 
of individuals with disabilities, Elementary and secondary education, 
Eligibility, Family, Family-centered education, Grant programs--
education, Indians--education, Institutions of higher education, 
Interstate coordination, Intrastate coordination, Juvenile delinquency, 
Local educational agencies, Migratory children, Migratory workers, 
Neglected, Nonprofit private agencies, Private schools, Public 
agencies, Reporting and recordkeeping requirements, State-administered 
programs, State educational agencies, Subgrants.


[[Page 54997]]


    Dated: October 6, 1998.
Richard W. Riley,
Secretary of Education.

(Catalog of Federal Domestic Assistance Numbers: 84:010, Improving 
Programs Operated by Local Educational Agencies; 84.011, Migrant 
Education Basic State Formula Grant Program; 84.013, Prevention and 
Intervention Programs for Children and Youth Who Are Neglected, 
Delinquent, or At-Risk of Dropping Out; 84.144, Migrant Education 
Coordination Program; 84.213, Even Start Family Literacy Program)

    The Secretary amends Title 34 of the Code of Federal Regulations by 
revising Part 200 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. In Sec. 200.8, paragraph (c)(1) is revised and paragraph 
(c)(3)(ii)(B)(3) is added to read as follows:


Sec. 200.8  Schoolwide program requirements.

* * * * *
    (c) Availability of other Federal funds. (1) In addition to funds 
under this subpart, a school may use in its schoolwide program Federal 
funds under any program administered by the Secretary that is included 
in the most recent notice published by the Secretary in the Federal 
Register or is addressed in paragraph (c)(3)(ii)(B)(3) of this section.
* * * * *
    (3) * * *
    (ii) * * *
    (B) * * *
    (3) Special Education. (i) A school may combine funds received 
under Part B of the Individuals with Disabilities Education Act (IDEA) 
in a schoolwide program, except that the amount so used in any 
schoolwide program may not exceed the amount received by the LEA under 
Part B of IDEA for that fiscal year; divided by the number of children 
with disabilities in the jurisdiction of the LEA; and multiplied by the 
number of children with disabilities participating in the schoolwide 
program.
    (ii) A school may also combine funds received under section 8003(d) 
of the Act (Impact Aid funds for children with disabilities) in a 
schoolwide program.
    (iii) A school that combines funds under Part B of IDEA or section 
8003(d) of the Act in its schoolwide program may use those funds for 
any activities under its schoolwide program plan but shall comply with 
all other requirements of Part B of IDEA, to the same extent it would 
if it did not combine funds under Part B of IDEA or section 8003(d) of 
the Act in schoolwide program.
* * * * *
(Authority: 20 U.S.C. 6314, 1413(a)(2)(D), 6396(b)(3), 7703(d), 
7815(c))

    3. Section 200.28 is amended by removing paragraph (a)(2)(iii).
    4. Section 200.63 is revised to read as follows:


Sec. 200.63  Exclusion of supplemental State and local funds from 
supplement, not supplant and comparability determinations.

    (a) For purposes of determining compliance with the comparability 
requirement in section 1120A(c) and the supplement, not supplant 
requirement in section 1120A(b) of the Act, a grantee or subgrantee 
under Parts A or C of Title I may exclude supplemental State and local 
funds spent in any school attendance area or school for programs that 
meet the intent and purposes of Title I.
    (b) A program meets the intent and purposes of Title I if the 
program either--
    (1)(i) Is implemented in a school in which the percentage of 
children from low-income families is at least 50 percent;
    (ii) Is designed to promote schoolwide reform and upgrade the 
entire educational operation of the school to support students in their 
achievement toward meeting the State's challenging student performance 
standards that all children are expected to meet;
    (iii) Is designed to meet the educational needs of all children in 
the school, particularly the needs of children who are failing, or most 
at risk of failing, to meet the State's challenging student performance 
standards; and
    (iv) Uses the State's system of assessment, if final, or the 
transitional assessment system to review the effectiveness of the 
program; or
    (2)(i) Serves only children who are failing, or most at risk of 
failing, to meet the State's challenging student performance standards;
    (ii) Provides supplementary services designed to meet the special 
educational needs of the children who are participating in the program 
to support their achievement toward meeting the State's student 
performance standards that all children are expected to meet; and
    (iii) Uses the State's system of assessment, if final, or the 
transitional assessment system to review the effectiveness of the 
program.
    (c) The conditions in paragraph (b) of this section also apply to 
supplemental State and local funds expended under sections 
1113(b)(1)(C) and 1113(c)(2)(B) of the Act.

    (Authority: 20 U.S.C. 6322(d))

Appendix--Analysis of Comments and Changes

    (Note: This appendix will not appear in the Code of Federal 
Regulations)

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

Procedures for the Within-District Allocation of LEA Program Funds

Section 200.28  Allocation of Funds to School Attendance Areas and 
Schools

    Comment: Several commenters objected to the proposed regulation 
to reinstitute the previously statutorily authorized no-wide-
variance provision. They argued that the Secretary does not have the 
legal authority to regulate on this issue because Congress omitted 
this discretionary option from the legislation. The commenters 
noted, however, that the Secretary can achieve essentially the same 
result because he has the authority to grant waivers on a case-by-
case basis to districts that can demonstrate that exercising the no-
wide variance option would overcome a barrier to improving school 
performance. A few commenters opposed the proposed no-wide-variance 
provision because they erroneously believed it would divert 
resources from higher-poverty schools outside the 10 percent band of 
poverty. In fact, however, this provision would only have applied to 
those districts with schools that all fall within a 10 percent band 
of poverty. One commenter supported the proposed regulation that 
would reinstitute the no-wide-variance option.
    Discussion: The no-wide-variance provision, authorized first by 
regulation and then under prior legislation, recognized that, in 
LEAs with a uniform distribution of children from low-income 
families, selecting only those areas or schools above the 
districtwide poverty average draws insignificant distinctions 
without furthering the goal of targeting Title I funds in the 
highest poverty schools. Nonetheless, in its 1994 reauthorization of 
Title I, Congress did not include the no-wide-variance provision in 
its efforts to improve targeting of Title I funds. As a result, a 
number of LEAs have requested waivers of the school selection 
provisions in section 1113 of Title I to allow them to serve all 
their schools if those schools have a low variation in their poverty 
percentages. Because all of these waiver requests have been granted, 
the Secretary had proposed to regulate on this issue to make it 
universally applicable. However, as a result of the negative 
comments we received, the Secretary reconsidered and has decided not 
to regulate on this issue. Rather, the Secretary will continue to 
consider no-wide-variance questions on a case-by-case basis through 
the waiver process and may reconsider this issue during the 
reauthorization of ESEA.
    Changes: The final regulations do not include the no-wide-
variance provision.
    General Provisions

[[Page 54998]]

Section 200.62  Use of Funds for Construction of Real Property

    Comment: Several commenters supported the proposed regulation 
authorizing the use of Title I funds for construction of real 
property if reasonable and necessary to carry out a Title I 
activity. They suggested, however, restricting the cost of any such 
construction to no more than 5 percent of an LEA's Title I 
allocation and suggested that specific criteria be included to 
ensure construction would be linked to a needs assessment and school 
improvement plan. Others suggested limiting construction and 
alterations to preschool activities and parent involvement centers. 
One commenter suggested that a Title I program that uses Title I 
funds for renovation would need to operate for a given number of 
years or Title I would have to be paid back the cost of the 
renovation. Several commenters, however, objected to using Title I 
funds for construction at the expense of reducing direct academic 
services to children. Some commenters argued that the Secretary does 
not have the authority to regulate on construction absent specific 
statutory authority.
    Discussion: The statute included express authority to use 
Chapter 1 (now Title I) funds for construction prior to 1994. 
However, the reauthorization of Title I did not include such 
authority. Section 76.533 of the Education Department General 
Administrative Regulations (EDGAR) prohibits a State or subgrantee 
from using Federal education funds for construction or acquisition 
of real property unless specifically permitted by the authorizing 
statute or implementing regulations for the program. Based on actual 
instances in which the prohibition of construction with Title I 
funds was an obstacle to LEAs who could have offered enhanced Title 
I services, the Secretary had proposed to allow, through 
regulations, the use of Title I funds for construction and 
renovation of real property if reasonable and necessary to carry out 
Title I purposes. Authorizing construction by regulation is clearly 
permitted under Sec. 76.533 of EDGAR. However, the number of 
comments opposing the use of Title I funds for construction were 
compelling, and the Secretary has reconsidered regulating on this 
issue at this time. The Secretary may reconsider this issue during 
the upcoming reauthorization of the ESEA.
    Changes: The final regulations do not include a provision 
authorizing construction of real property with Title I funds.

Section 200.63  Exclusion from Supplement, not Supplant and 
Comparability Determinations

    Comment: One commenter suggested modifying the regulation to 
clarify that it applies to programs using either a State's 
assessment system, if final, or its transitional assessment system.
    Discussion: The Secretary agrees that this clarification would 
be helpful.
    Changes: The Secretary has revised Sec. 200.63(b)(1)(iv) 
and(2)(iii) to include the recommended language.
    Comment: One commenter suggested that the regulations clarify 
what is meant by meeting the intent and purposes of Title I. The 
commenter further recommended that the provisions under Chapter 1, 
which required the Secretary or a State, respectively, to approve 
the exclusion of State and local compensatory funds, be included in 
these regulations.
    Discussion: The Omnibus Consolidated Rescissions and 
Appropriations Act of 1996 permits the exclusion of supplemental 
State and local funds from supplement, not supplant and 
comparability determinations if those funds are expended in any 
school for programs that meet the ``intent and purposes of Title 
I.'' Section 200.63(b) of the final regulations specifies those 
characteristics a program must have to meet the intent and purposes 
of Title I. The Secretary believes that these provisions are 
sufficient to ensure that programs subject to the exclusion meet the 
intent and purposes of Title I. Neither the ESEA nor the amendment 
made by the Omnibus Consolidated Rescissions and Appropriations Act 
of 1996 requires approval by the Secretary or a State, respectively, 
and, therefore, the Secretary does not believe it is appropriate to 
add the suggested provisions to these regulations.
    Changes: None.
    Comment: One commenter recommended that the regulations permit 
State and local supplemental funds to be excluded from the 
supplement, not supplant and comparability determinations in a 
schoolwide-like program even if the school does not have at least 
50% poverty.
    Discussion: The law permits the exclusion of State and local 
supplemental funds from supplement, not supplant and comparability 
determinations if those funds are used for programs that meet the 
intent and purposes of Title I. Given that the authority in Title I 
permits only those schools with at least 50% poverty to use Title I 
funds to conduct schoolwide programs, the Secretary believes that 
poverty threshold should also govern schools conducting programs 
subject to the exclusions in Sec. 200.63.
    Changes: None.

[FR Doc. 98-27290 Filed 10-9-98; 8:45 am]
BILLING CODE 4000-01-P