[Federal Register Volume 67, Number 156 (Tuesday, August 13, 2002)]
[Rules and Regulations]
[Pages 52828-52830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20497]



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Part III





Department of the Interior





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Bureau of Indian Affairs



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25 CFR Part 39



Indian School Equalization Program; Final Rule

  Federal Register / Vol. 67, No. 156 / Tuesday, August 13, 2002 / 
Rules and Regulations  

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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 39

RIN 1076-AE14


Indian School Equalization Program

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Final rule with request for comments.

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SUMMARY: In order to comply with part B of the Individuals with 
Disabilities Education Act (IDEA), the Bureau of Indian Affairs is 
revising the sections of the Indian School Equalization Program (ISEP) 
Exceptional Child Program regulations concerning placement and funding. 
The changes will ensure that the funding mechanism under the Indian 
School Education program (ISEP) does not result in placements that 
violate the requirement of IDEA that special education students are 
placed in the least restrictive environment possible and that 
placements are based upon the needs of students, not the funding 
formula.

DATES: Effective Date: August 19, 2002.
    Comment Date: Comments must be received on or before September 12, 
2002.

ADDRESSES: If you wish to comment on the interim rule, you may submit 
your comments to William Mehojah, Director, Office of Indian Education 
Programs, Bureau of Indian Affairs, Department of the Interior, 1849 C 
Street, NW., Mail Stop 3512-MIB, Washington, DC 20240. See 
SUPPLEMENTARY INFORMATION section for other methods to submit comments.

FOR FURTHER INFORMATION CONTACT: Glenn F. Allison, Office of Indian 
Education Programs, Bureau of Indian Affairs, 202-208-3628 (This is not 
a toll free number).

SUPPLEMENTARY INFORMATION: The Department of Education--Office of 
Special Education Programs (Education) has found us to be out of 
compliance with certain requirements of the Individuals with 
Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq. Specifically, 
Education determined that special education students are not being 
served in the least restrictive environment in part because of our 
funding formula under the Indian School Equalization Program (ISEP). 
This funding formula resulted in placements that violated the 
requirement that, to the maximum extent appropriate, children with 
disabilities be placed in the least restrictive environment for 
educational services based upon their individual needs. In accordance 
with section 612(a)(5)(B) of IDEA, the Secretary of the Interior and 
the Office of Indian Education Programs assured the Department of 
Education that the curent regulations regarding the funding mechanism 
would be revised as soon as possible to ensure that the regulations do 
not result in pavements that violate the least restrictive environment 
requirements of IDEA.

What Regulations Will Be Changed

    In order to comply with IDEA and maintain the Bureau of Indian 
Affairs's eligibility for IDEA funding, we are making the following 
changes:
    1. Eliminating the definitions of high and moderate service levels 
in 25 CFR 39.11(i)(16) and 25 CFR 39.11(i)(17);
    2. Changing the weighted student unit factors under 25 CFR 39.12 
and eliminating the Exceptional Child Residential Program weights under 
25 CFR 39.13; and
    3. Eliminating the eligibility restrictions for the Exceptional 
Child Residential Programs and the Intensive Residential Guidance 
Program under 25 CFR 39.11(h)(1)(v).
    We are also changing the weighted unit for the Gifted and Talented 
Program to conform with Public Law 100-297, which states that a gifted 
and talented student generates two weighted units. Because we changed 
the basic instructional program weight by grade level, the gifted and 
talented weighted unit had to be changed to conform with Public Law 
100-297.

Purpose of the Change

    The purpose of this change is to ensure that all children with 
disabilities as defined under IDEA, including those students living in 
dormitories, are provided a free and appropriate public education in 
the least restrictive environment under a neutral placement funding 
formula.

Detailed Discussion of Change

    Education found that the definitions in our current regulations do 
not encourage neutral placement funding for children with disabilities 
as required by IDEA. As now written, the regulations inadvertently 
encourage schools to place the children outside the regular classroom 
in order to receive additional funding. (See Sec. 39.11(i)(16), Full 
Time--High Service Level, and Sec. 9.11(i)(17), Part Time--Moderate 
Service Level, and the weighted formula found in Sec. 39.12.) As now 
written, the regulations also inadvertently encourage schools to place 
children in certain disability categories outside the regular 
classroom.
    In response to the Department of Education's findings, we certified 
on January 2, 2001, that we would correct the ISEP formula. We 
presented these changes in the regulations to the various Indian tribes 
at consultation proceedings in several locations. We then reviewed and 
considered comments generated by those sessions and made changes to the 
formula based upon those comments. The changes resulting from this 
process:
    1. Change the funding mechanism under ISEP to comply with Part B of 
IDEA;
    2. Ensure the Department of Education that the Bureau is in 
compliance with the law; and
    3. Provide a free and appropriate public education to children with 
disabilities and place them in an educational setting which provides 
the least restrictive environment appropriate to the child's 
disability.

No Child Left Behind Act of 2001--Negotiated Rulemaking Requirement

    This interim rule is not intended to supplant the requirements of 
negotiated rulemaking defined under Public Law 107-110, No Child Left 
Behind Act of 2001 (NCLBA). We recognize our responsibility to include 
the ISEP formula in the negotiated rulemaking process and will do so. 
Negotiating changes under NCLBA would delay compliance with IDEA for at 
least 2 years and would jeopardize funding under Part B of IDEA. 
Therefore, until we complete the negotiated rulemaking process, the 
changes we publish today will ensure that we do not forfeit Part B 
monies because we have failed to comply with our certification to the 
Department of Education. In addition, it is in the public interest that 
all eligible students attending Bureau funded schools receive a free 
and appropriate public education in the least restrictive environment. 
Any delay in implementing these changes, pending notice and comment, 
might place those children in jeopardy of not receiving those services.

Determination To Make Rule Effective Immediately

    The Department has determined that the public notice and comment 
provisions of the Administrative Procedure Act, 5 U.S.C. 553(b), do not 
apply because of the good cause exception created under 5 U.S.C. (b)(3) 
which allows the agency to suspend the notice and comment period 
provisions. The Department further concludes that this rule should be 
effective

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immediately because it relieves possible restrictions on the efficient 
and necessary distribution of IDEA Part B funds for all Bureau funded 
schools. It is in the public interest, and in the interest of the IDEA 
eligible students attending Bureau funded schools, not to delay 
implementation. However, BIA invites and will consider public comments 
submitted in response to this final rule. BIA will consider the 
comments and amend the rule as appropriate.

General Comments

    Interested persons may submit written comments regarding the 
interim rule to William Mehojah, Director, Office of Indian Education 
Programs, Bureau of Indian Affairs, Department of the Interior, 1849 C 
Street, NW, Mail Stop 3512-MIB, Washington, DC, 20240; or hand-deliver 
to Room 3512 at the above address. You may send comments by facsimile 
to 202-208-3312. Our practice is to make comments, including names and 
home addresses of respondents, available for public review during 
regular business hours. Individual respondents may request that we 
withhold their home address from the rulemaking record. We will honor 
the request to the extent allowable by law. There also may be 
circumstances in which we would withhold from the rulemaking record a 
respondent's identity, as allowable by law. If you wish us to withhold 
your name and/or address, you must state this prominently at the 
beginning of your comment. However, we will not consider anonymous 
comments. We will make all submission from organizations or businesses, 
and from individuals identifying themselves as representatives or 
officials of organizations or businesses, available for public 
inspection in their entirety.

Electronic Access and Filing

    Electronic Access and Filing is not available at this time.

Regulatory Planning and Review (Executive Order 12866)

    This interim rule is not a significant regulatory action and is not 
subject to review by the Office of Management and Budget under 
Executive Order 12866.
    (a) This rule will not have an effect of $100 million or more on 
the economy. It will not adversely affect in a material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities. For example, in School Year 2001--2002, BIA received 
$48,938,830 in Part B funds to distribute to Bureau funded schools; in 
School Year 2002--2003, BIA will receive $62,179,630 in Part B funds 
for distribution.
    (b) This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency. This rule 
applies only to Bureau-funded elementary and secondary schools 
enrolling ISEP eligible students. The Bureau of Indian Affairs has 
worked closely with the Department of Education in preparing this rule.
    (c) This rule does not alter the budgetary effects or entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients. The program does not impose any additional rights to 
any other program.
    (d) This rule does not raise novel legal or policy issues. The 
regulations have not changed since the passage of Title XI, the 
Education Amendments of 1978, Public Law 95-561, November 1978, 
establishing formula funding for Bureau-funded elementary and secondary 
schools.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to Indian tribes.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more. The amount of money available for special education servicing 
eligible ISEP students is $48,938,830 in School Year 2001-2002, and 
$62,179,630 in School Year 2002-2003.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, local government 
agencies, or geographic regions.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
small amount of money and the student oriented uses of the funding are 
too limited to affect competition between U.S. firms and foreign-based 
firms.

Unfunded Mandates Reform Act

    This interim rule imposes no unfunded mandates on any government or 
private entity of more than $100 million per year. The rule does not 
have a significant or unique effect on state, local, or tribal 
governments or the private sector because of the limited amount of 
special education funds available. A statement containing the 
information required by the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1501 et seq.) is not required.

Takings Implication Assessment (Executive Order 12630)

    The Department has determined that this interim rule does not have 
``significant'' takings implications. The interim rule does not pertain 
to ``taking'' of private property interests, nor does it impact private 
property.

Federalism (Executive Order 13132)

    The Department has determined that this interim rule does not have 
significant federalism effects because it pertains solely to Federal-
tribal relations and will not interfere with the roles, rights, and 
responsibilities of states.

Civil Justice Reform (Executive Order 12988)

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule does not unduly burden the 
judicial system and meets the requirement of sections 3(a) and 3(b)(2) 
of the Order.

National Environmental Policy Act

    The Department has determined that this interim rule does not 
constitute a major Federal action significantly affecting the quality 
of the human environment and that no detailed statement is required 
pursuant to the National Environmental Policy Act of 1969.

Paperwork Reduction Act of 1995

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507 
(d)), the Department of the Interior reviewed and sent an information 
collection request package to the Office of Management and Budget for 
its approval. The information collection, with OMB Control Number of 
1076-0122, was approved for use until June 30, 2002. We are currently 
renewing OMB approval for this information collection. This change to 
the regulations will not affect the information collection. All 
information is collected annually from each eligible ISEP student. The 
annual responses are submitted in order to maintain or to obtain a 
benefit, specifically funding for instructional and/or residential 
programs covered by the Indian School Equalization Program. Please note 
that we will not sponsor nor conduct, and a person need not respond to, 
a request for information unless we have a valid OMB Control Number.

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Consultation and Coordination With Indian Tribal Governments 
(Executive Order 13175)

    In keeping with this Executive Order and with the Bureau's 
Government-to-Government Consultation Policy, the rewriting of this 
interim rule was subject to a process involving the open discussion and 
joint deliberation of options with respect to potential issues or 
changes between the Bureau and all interested parties, in May 1998 and 
July 2000.

Clarity of This Regulation

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this rule easier to understand, including answers to questions such as 
the following: (1) Are the requirements in the rule clearly stated? (2) 
Does the rule contain technical language or jargon that interferes with 
it clarity? (3) Does the format of the rule (grouping and order of the 
sections, use of headings, paragraphing, etc.,) aid or reduce its 
clarity? (4) Would the rule be easier to understand if it were divided 
into more (but shorter) sections? (A ``section'' appears in bold type 
and is preceded by the symbol ``Sec. '' and a numbered heading; for 
example, Sec. 39.1 Purpose and scope). (5) Is the description of the 
rule in the SUPPLEMENTARY INFORMATION section of the preamble helpful 
in understanding the interim rule? What else could we do to make the 
rule easier to understand? Send a copy of any comments that concern how 
we could make this interim rule easier to understand to: Office of 
Regulatory Affairs, Department of the Interior, Room 7229, 1849 C 
Street NW., Washington, DC 20240.

List of Subjects in 25 CFR Part 39

    Indians--education, Schools, Elementary and secondary education 
programs, Grant programs--Indians, Government programs--education.


    For the reasons given in the preamble, we are amending selected 
sections of part 39 of Title 25 of the Code of Federal Regulations as 
follows:

PART 39--INDIAN SCHOOL EQUALIZATION PROGRAM

    1. The authority citation for part 39 continues to read as follows:


    Authority: 25 U.S.C. 13; 25 U.S.C. 2008.


    2. In Sec. 39.11, remove paragraph (h)(2)(v) and remove paragraphs 
(i)(16) through (18).

    3. Revise Sec. 39.12 to read as follows:


Sec. 39.12  Instructional funding.

    (a) Schools are to use the following sources to fund their special 
Education programs:
    (1) 15 percent of the Indian Student Equalization Program (ISEP) 
funds generated by their ADM; and
    (2) Funds under Part B of the Individuals with Disabilities 
Education Act (IDEA), if the 15 percent of ISEP funds is inadequate to 
fund the services needed by all eligible ISEP students with 
disabilities.
    (b) All ISEP special education funds must be spent before the need 
for Part B of IDEA funds can be demonstrated. Part B funds are designed 
to provide for special education needs not funded by ISEP. By 
demonstrating that 15 percent of the ISEP base instructional funds were 
spent on special education, there is support for the need for Part B 
funds.
    (c) To receive ISEP special education funding a student must be:
    (1) At least 5 years old by December 31 to be counted as a 
kindergarten student;
    (2) At least 6 years old by December 31 to be counted as a first 
grade student; and
    (3) Under 22 years of age and not have received a high school 
diploma or its equivalent on the first day of full attendance during 
the ISEP student count week.
    (d) A school may spend ISEP funds on school-wide programs to 
benefit all students (including those without disabilities) only if all 
of the following conditions are met:
    (1) The school sets aside 15 percent of the basic instructional 
allotment to meet the needs of students with disabilities;
    (2) The school can document that it has met all needs of students 
with disabilities and addressed all components of IDEA; and
    (3) There are unspent funds after the conditions in paragraphs 
(d)(1) and (d)(2) of this section are met.
    (e) Public Law 100-297 establishes a weighted unit for each ISEP-
eligible full-time student that is gifted and talented. The weighted 
unit for gifted and talented is 2.0 weighted student units minus the 
basic instructional program weight by grade level. The weights for 
eligible gifted and talented students must be computed according to the 
following revised weighted student unit factors:

------------------------------------------------------------------------
                                                                 Add-on
                         Grade level                             weight
------------------------------------------------------------------------
Kindergarten.................................................       0.85
Grades 1 to 3................................................       0.62
Grades 4 to 6................................................       0.85
Grades 7 to 8................................................       0.62
Grades 9 to 12...............................................       0.50
------------------------------------------------------------------------

    (f) This paragraph applies to disabled students who are eligible 
for ISEP and were not counted during the ISEP Student Count Week. 
Schools must fund services for these students using the 15 percent of 
the ISEP funds based upon the school ADM for those students counted 
during the ISEP Student Count Week. See paragraph (a)(2) of this 
section for further guidance.
    (g) To compute the funding for individual elementary and secondary 
children, schools must use the weighted student unit factors in 
paragraphs (g)(1) and (g)(2) of this section.
    (1) The factors for basic programs are contained in the following 
table:

------------------------------------------------------------------------
                                                                  Base
                        Basic programs                          weights
------------------------------------------------------------------------
Kindergarten.................................................       1.15
Grades 1 to 3................................................       1.38
Grades 4 to 6................................................       1.15
Grades 7 to 8................................................       1.38
Grades 9 to 12...............................................       1.50
------------------------------------------------------------------------

    (2) For each student in the intense bilingual supplemental program, 
the school must add to the base weight an add-on weight of .20.

    4. Revise Sec. 39.13 to read as follows:


Sec. 39.13  Residential funding.

    Basic funds for student residential purposes must be computed 
according to the following weighted student unit factors:

------------------------------------------------------------------------
                                                                 Add-on
                        Basic programs                          weights
------------------------------------------------------------------------
Grades 1 to 3................................................       1.40
Grades 4 to 8................................................       1.25
Grades 9 to 12...............................................       1.25
Intensive Residential Guidance...............................        .50
------------------------------------------------------------------------


    Dated: August 5, 2002.
Neal A. McCaleb,
Assistant Secretary--Indian Affairs.
[FR Doc. 02-20497 Filed 8-12-02; 8:45 am]
BILLING CODE 4310-6W-P