[Federal Register Volume 71, Number 81 (Thursday, April 27, 2006)]
[Proposed Rules]
[Pages 24824-24829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-6355]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF EDUCATION

34 CFR Part 76

RIN 1890-AA13


State-Administered Programs

AGENCY: Department of Education.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Secretary proposes to amend the regulations in 34 CFR part 
76 governing State reporting requirements. States are required to 
submit their performance reports, financial reports, and any other 
required reports, in the manner prescribed by the Secretary, including 
through electronic submission, if the Secretary has obtained approval 
from the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act of 1995 (PRA). The amendments proposed in this notice 
would provide that: (1) Failure to submit these reports in the manner 
prescribed by the Secretary constitutes a failure, under section 454 of 
the General Education Provisions Act, 20 U.S.C. 1234c, to comply 
substantially with a requirement of law applicable to the funds made 
available under the program for which the reports are submitted; and 
(2) if the Secretary chooses to require submission of information 
electronically, the Secretary may establish a transition period during 
which a State would not be required to submit such information 
electronically in the format prescribed by the Secretary, if the State 
meets certain requirements. The Secretary proposes these changes to the 
regulations in 34 CFR part 76 to highlight that the U.S. Department of 
Education (Department) may require, through the PRA clearance process, 
that States report certain information electronically; and to establish 
that the Department may take administrative action against a State for 
failure to submit reports in the manner prescribed by the Secretary. 
The proposed changes will facilitate the use of the Department's 
electronic EDFacts data management system (EDFacts) (Approved under OMB 
Control No. 1880-0541) for electronic submission of certain reports and 
provide the Department with more timely and accessible data for 
accountability and decision-making. The Department's goal in requiring 
electronic submission of information is to reduce State reporting 
burden significantly and to streamline dozens of data collections 
currently required by the Department.

DATES: We must receive your comments on or before May 30, 2006.

ADDRESSES: Address all comments about these proposed regulations to 
Bonny

[[Page 24825]]

Long, U.S. Department of Education, 400 Maryland Avenue, SW., room 
7C110, Washington, DC 20202. If you prefer to send your comments 
through the Internet, you may address them to us at the U.S. Government 
Web site: http://www.regulations.gov or you may send your Internet 
comments to us at the following address: [email protected].
    You must include the term ``State Reporting/EDFacts Regulation'' in 
the subject line of your electronic message.

FOR FURTHER INFORMATION CONTACT: Bonny Long. Telephone: (202) 401-0325 
or via Internet: [email protected].
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Relay Service (FRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION:

Invitation to Comment

    We invite you to submit comments regarding these proposed 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the proposed regulations that each of 
your comments addresses and to arrange your comments in the same order 
as the proposed regulations. In particular, we invite specific comments 
on the Department's approach to implementing these regulations in 
regard to the following issues:
     Whether the proposed two-year transition period discussed 
in both the background section of this preamble and in Sec.  
76.720(c)(3) is sufficient; and
     Whether the Department's intent to require States to 
submit data electronically through EDFacts beginning with the 2006-07 
school year, discussed in the background section of this preamble, is 
feasible and the effects of this action for States.
    We also invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these proposed 
regulations. Please let us know of any further opportunities we should 
provide to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the 
Department's State-administered programs.
    During and after the comment period, you may inspect all public 
comments about these proposed regulations in room 7C110, 400 Maryland 
Avenue, SW., Washington, DC, between the hours of 9 a.m. and 4 p.m., 
Eastern time, Monday through Friday of each week except Federal 
holidays.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these proposed regulations. If you want to 
schedule an appointment for this type of aid, please contact the person 
listed under FOR FURTHER INFORMATION CONTACT.

Background

    Complete, accurate, and reliable data are essential for effective 
decision-making and for implementing the requirements of the Nation's 
education laws. The Department's ability to collect, store, and manage 
education data efficiently through electronic means allows for easier 
submission by States and reduces duplication of collections and burdens 
on States. It also facilitates the efficient use of data for analysis 
by program officials and other interested parties. Implementation of 
the No Child Left Behind Act of 2001 (Pub. L. 107-110) (NCLB) requires 
that educators have accurate and reliable data to assess the Nation's 
progress in reaching the goal of ensuring that every child achieves 
high academic standards. These data help educators know where they need 
to focus their attention in order to improve the academic achievement 
of all students.
    In 2003, the Department launched the Performance-Based Data 
Management Initiative (PBDMI) to design an elementary and secondary 
education data collection system that would: (1) Increase the 
analytical capabilities of Federal, State, and local governments in 
their efforts to improve outcomes for students; (2) improve the 
quality, timeliness, and accessibility of data; and (3) reduce State 
reporting burden by streamlining data collections and eliminating 
duplication in reporting. Through this initiative, the Department 
developed the Education Data Exchange Network (EDEN), a central 
repository and electronic data collection system for over 140 common 
data elements on student achievement, school characteristics, 
demographics, and program financial information. States have been 
submitting data to EDEN voluntarily for the past two years. The 
Department is now increasing the EDEN capabilities to include, in 
addition to the Web-based interface that allows States to submit data 
electronically into EDEN, a capability for States, Department staff, 
and, eventually, the public, to query the database and independently 
analyze the data, subject to all applicable privacy protections for 
disclosing statistical data. To signal the increased capabilities of 
the system, the Department is renaming EDEN and the expanded Web-based 
interface ``EDFacts.'' Accordingly, unless otherwise noted, for 
purposes of this preamble, the expanded system will be referred to as 
``EDFacts.''
    To date, submission of data through EDFacts has been voluntary and, 
therefore, regardless of whether States have reported data through 
EDFacts, they have been required to continue reporting data through 
dozens of existing data collections required by Congress and 
administered by the Department. These collections frequently request 
duplicative data, including, in particular, data on student achievement 
and school demographics. The Department has designed EDFacts to obtain 
the most commonly collected data elements so that States need only 
report these data once, through a centralized, electronic process. As 
EDFacts is implemented completely, the Department will retire dozens of 
separate data collections, either in full or in part, and reduce State 
reporting burden significantly.
    Nearly every State has submitted electronically some portion of the 
data that it eventually will be required to submit to the Department 
through EDFacts. However, EDFacts will only reach its full potential in 
reducing duplicative State reporting burden and increasing the ability 
of the Department and States to analyze and improve student achievement 
if all States provide their data through the system.
    Beginning with the data from the 2006-07 school year, the 
Department intends to obtain approval, pursuant to the PRA, of an 
information collection request that would require States to submit 
electronically through EDFacts the program and demographic information 
that States currently are required to report under separate and 
overlapping collections. This data collection request will eliminate 
the need for States to submit reports under current separate and 
overlapping collection instruments because the Department intends to 
discontinue any existing data collections that require submission of 
data that will be subject to the EDFacts information collection 
request.

[[Page 24826]]

    EDFacts has the capability to collect data at the State, district, 
and school levels and, for the 2006-2007 school year the Department 
plans to require States to submit electronically those data, including 
district and school level data, that States currently are required to 
provide under existing data collections. The Department will continue 
to work with States to collect the full range of data that can be 
collected through EDFacts, including data that are not currently 
subject to one of the Department's OMB-approved information collection 
requests if eventually approved through future PRA information 
collection requests. We plan to consolidate as many information 
requests in EDFacts as possible because it provides the best 
opportunity for efficient and effective data collection on key aspects 
of student achievement and program performance. In this regard, States 
will have the option to provide, through EDFacts, additional district- 
and school-level data that they are not currently required to provide 
under existing data collections. For example, when preparing other 
documents to submit to the Department (e.g., a performance report), a 
State and its subgrantees would be able to simply reference school- and 
district-level data already submitted through EDFacts rather than 
undertake the burden of reproducing the same data in multiple 
documents. Once data are submitted to EDFacts, ED would be able to 
prepopulate collection forms so that States would only have to provide 
the data that does not overlap with the EDFacts data. In general, the 
amount of burden reduction available to States would be correlated 
directly with the amount of data they would provide through EDFacts. If 
the voluntary submission of district- and school-level data to EDFacts 
proves successful, the Department will consider expanding EDFacts 
required reporting to cover those more detailed data elements. 
Accordingly, the Department welcomes comments on a State's capacity 
for, and interest in, electronic reporting of district- and school-
level data through EDFacts as an efficient means to centralize 
reporting and reduce State paperwork burden.
    Two ways the Department will reduce State burden and reporting 
duplication in connection with EDFacts in the short term are as 
follows:
    (1) The Department plans to eliminate existing collections that 
completely overlap with data required to be submitted through EDFacts. 
For reporting 2005-06 school year data, the Department is piloting this 
approach with four data collections for Individuals with Disabilities 
Education Act (IDEA) programs. Under this pilot, States that submit 
specified EDFacts data files that meet current program reporting 
standards will be relieved of submitting those data through other 
means.
    (2) For existing collections that partially overlap with data 
required to be submitted through EDFacts, the Department will pre-
populate those collections with the data that States submitted through 
EDFacts so that States need not submit those data more than once. The 
Department is piloting this approach with the Consolidated State 
Performance Report (CSPR) (Approved under OMB Collection No. 1810-
0614), required under section 9303 of the Elementary and Secondary 
Education Act of 1965, as amended by NCLB, for the 2004-05 school year 
data. Under this pilot, States will access a CSPR Web page that is pre-
populated with the EDFacts data they already have submitted, decreasing 
significantly the number of CSPR questions they must answer.
    Both the Department and each State already have committed 
significant resources to the Department's data management initiative; 
the Department believes that requiring full participation in EDFacts, 
while eliminating, either completely or partially, the majority of the 
Department's existing annual elementary and secondary education data 
collections, is the only way to ensure that those investments deliver 
their intended benefits, including reducing State reporting burden.
    As part of the Department's efforts to streamline its data 
collection processes and elevate the importance of State compliance 
with reporting requirements, the Department proposes to amend the 
regulations in 34 CFR part 76. As more fully discussed in the 
Significant Proposed Regulations section of this notice, the proposed 
regulations in Sec. Sec.  76.720 and 76.722 would provide the 
Department with enforcement capabilities that are not available under 
the PRA alone. The proposed regulations emphasize the critical need for 
accurate data reporting for the Department's programs, including those 
authorized under ESEA, by making failure to report data under a program 
administered by the Secretary, in a manner prescribed by the Secretary, 
a failure to comply substantially with a requirement of law applicable 
to the funds made available under that program. This standard comes 
from section 454 of the General Education Provisions Act (20 U.S.C. 
1234c) and gives the Secretary the authority to take administrative 
action against a recipient that does not comply with a program 
requirement.
    Finally, in recognition of the fact that some States may not be 
able to submit data electronically in the manner prescribed by the 
Secretary, e.g., through EDFacts, the Department proposes to amend 34 
CFR 76.720 to provide the Secretary with discretion to establish a 
transition period of up to two years following the date a State 
otherwise would be required to report the data in the electronic format 
prescribed by the Secretary (i.e., two years following the first 
reporting deadline established for the data collection through the PRA 
process). During this period, a State would not be required to submit 
reports in the electronic format prescribed by the Secretary if the 
State meets certain requirements. However, the Secretary may require 
the State to submit data in an alternative electronic format within the 
State's current capacity. This provision would permit those States that 
meet the requirements specified in proposed 34 CFR 76.720(c)(3)(i) 
through (iii) with a transition period, not to exceed two years 
following the reporting deadline for the data collection, to comply 
with any requirement to submit reports electronically in the manner 
prescribed by the Secretary. Regardless of whether a State has been 
authorized a transition period, the Secretary appreciates that from 
time to time a State may have temporary technical circumstances that 
would prevent it from making timely submission of data to EDFacts. Such 
a situation would not trigger the Secretary taking enforcement action 
against a State.

Significant Proposed Regulations

Section 76.720 State Reporting Requirements

    Current Sec.  76.720(a) states that Sec.  76.720 applies to State 
reports required under 34 CFR 80.40 (Monitoring and reporting of 
program performance) and 34 CFR 80.41 (Financial reporting).
    Proposed Sec.  76.720(a) would clarify that Sec.  76.720 applies to 
reports required under 34 CFR 80.40 and 34 CFR 80.41, as well as other 
State reports that the Secretary requires under program statutes or 
regulations if the reports are approved by OMB under the PRA. Pursuant 
to the PRA, the Department must give interested parties an opportunity 
to comment on, and must obtain OMB approval for, any data collection 
that requests data from more than nine entities, unless the collection 
meets one of the narrow exceptions to the PRA.

[[Page 24827]]

    Proposed Sec.  76.720(b)(1) and (2) would not substantively change 
current Sec.  76.720(b) and (c), which specify the frequency with which 
States must submit reports to the Secretary.
    Proposed Sec.  76.720(c)(1) would be added to Sec.  76.720 to 
clarify that States must submit any reports required under Sec.  76.720 
in the manner prescribed by the Secretary, including, if so prescribed, 
through electronic submission. Proposed Sec.  76.720(c)(1) is necessary 
because it states in very clear terms that States must comply with the 
Secretary's requirements concerning the manner in which reports are 
submitted to the Department. The Secretary establishes submission 
requirements for Departmental data collection requests through the PRA 
clearance process. The language in proposed Sec.  76.720(c)(1), 
therefore, essentially states in a single regulatory provision that 
States must comply with requirements established through the PRA 
clearance process.
    Proposed Sec.  76.720(c)(2) would be added to Sec.  76.720 to 
provide that a State's failure to submit reports in the manner 
prescribed by the Secretary (such as electronic submission) constitutes 
a failure to comply substantially with a requirement of law applicable 
to the funds made available under the program for which the reports are 
submitted. Under section 454 of the General Education Provisions Act, 
20 U.S.C. 1234c, if the Secretary has reason to believe that any 
recipient of funds under an applicable program is failing to comply 
substantially with any requirement of law applicable to those funds, 
the Secretary may take administrative action to compel compliance. 
Proposed Sec.  76.720(c)(2) is necessary because it establishes that 
reporting requirements, such as electronic submission of reports, are 
substantial requirements of law such that failure to comply with these 
requirements would constitute a violation of section 454 of the General 
Education Provisions Act (20 U.S.C. 1234c). The Department proposes 
Sec.  76.720(c)(2) because failure of a recipient to comply with the 
Department's reporting requirements, including submitting reports 
electronically, harms the Federal interest in establishing what the 
Department deems is an efficient and effective means of obtaining 
accurate, reliable, and valid information on the performance of the 
Department's programs and the success of States in meeting their goals 
under such laws as NCLB. The Federal interest would be harmed because 
States would not be using a system that was specifically designed to 
reduce their burden and the Department would not be able to collect and 
use data as efficiently and easily. In addition, the data would not be 
in the form and of the quality necessary for the Department to assess 
program effectiveness. Moreover, States that do not comply with the 
Department's submission requirements would be using funds to submit 
reports that do not meet the Department's needs for accurate, reliable, 
and valid data.
    Proposed Sec.  76.720(c)(3) would be added to Sec.  76.720 to 
address difficulties that States may have in reporting data 
electronically in a manner prescribed by the Secretary on the date 
States otherwise would be required to report the data electronically. 
Proposed Sec.  76.720(c)(3) would provide that the Secretary has the 
discretion to establish a transition period of up to two years 
following the date by which a State otherwise would be required to 
report the data in the electronic manner prescribed by the Secretary. 
During this transition period, a State would not be required to comply 
with the electronic submission requirement as prescribed by the 
Secretary, such as the requirement to submit electronic reports through 
EDFacts, if the State submits the following to the Secretary: (a) 
Evidence satisfactory to the Secretary that the State is unable to 
comply with the electronic submission requirement specified by the 
Secretary in the data collection instrument on the first date the State 
otherwise would be required to report the data electronically; (b) any 
information requested in the report through an alternative means that 
is deemed acceptable to the Secretary, which may require submission in 
an alternative electronic format that is better suited to a State's 
current capacity; and (c) a plan showing how the State would come into 
compliance with the electronic submission and data quality requirements 
specified in the data collection instrument no later than two years 
following the date by which the State otherwise would be required to 
submit the data in the electronic manner prescribed by the Secretary.
    The following example describes how this regulatory provision would 
work.
    Example: The Department obtains approval for a new data collection 
instrument through the PRA process that would, for the first time, 
require States to submit data in an electronic format prescribed by the 
Secretary. The first date that States would be required to submit 
reports in this electronic format would be November 1, 2007. A State 
does not have the capacity to submit reports in the electronic format 
prescribed by the Secretary by November 1, 2007. The State would submit 
to the Secretary the following: (1) A request for a transition period, 
that includes evidence that the State is not able to comply with the 
electronic submission requirements; (2) the information requested in 
the report in an alternative means that is acceptable to the Secretary; 
and (3) a plan explaining the steps the State will take to submit the 
report in the electronic format prescribed by the Secretary no later 
than November 1, 2009.
    The Department proposes Sec.  76.720(c)(3) because, while it 
believes requiring electronic submission of reports ultimately will 
help reduce State reporting burden and streamline the Department's data 
management system, it recognizes that, at this time, States have 
varying capabilities to report information through electronic means.
    Therefore, with respect to EDFacts, the Department plans to use the 
discretion established under proposed Sec.  76.720(c)(3) to allow 
States that demonstrate that they do not have the capability to submit 
reports as specified through EDFacts, a period of up to two years 
following the dates the States otherwise would be required to report 
data through EDFacts (i.e., until the reporting deadlines established 
for the 2008-09 school year data through the PRA process) to phase in 
their compliance with the reporting requirements. For those States, the 
Department plans to accept the required data through alternative means 
approved by the Department, which may include alternative electronic 
submissions, if those States provide the Department with, and the 
Department approves, a plan to submit the required reports through 
EDFacts no later than the reporting deadlines established for the 2008-
09 school year reports through the PRA process.
    With respect to proposed Sec.  76.720(c)(3), the Department is 
particularly interested in receiving comment on: (a) Whether the 
proposed two-year transition period to phase in the electronic 
submission requirements prescribed by the Secretary for EDFacts is a 
sufficient period of time for States that cannot comply with these 
requirements to come into compliance; and (b) what kind of alternative 
electronic collection format would most help States that cannot comply 
with the requirement to submit reports electronically through EDFacts.

Section 76.722 Subgrantee Reporting Requirements

    Current Sec.  76.722 allows States to require subgrantees to 
furnish reports to the States that the States need to carry

[[Page 24828]]

out their obligations under the program for which the subgrantees 
receive funds.
    Proposed Sec.  76.722 would add language to Sec.  76.722 to allow 
States to require subgrantees to submit, in the format and manner 
designated by the States, any reports that the States need to comply 
with the requirements under proposed Sec.  76.720 and to carry out 
other responsibilities under the program. The proposed changes to 
current Sec.  76.722 are intended to make it easier for States to 
comply with the requirements under proposed Sec.  76.720 that the 
States submit reports to the Department in the manner prescribed by the 
Secretary.

Executive Order 12866

1. Potential Costs and Benefits

    The Department has determined that these proposed regulations are a 
significant regulatory action under Executive Order 12866 and OMB has 
reviewed them. In accordance with the Executive Order, the Department 
has also assessed the potential costs and benefits of this regulatory 
action. The potential costs associated with the proposed regulations 
are those resulting from statutory requirements and those we have 
determined to be necessary for administering the Department's State-
administered programs effectively and efficiently. These regulations 
are generally not expected to require undue additional State resources 
because they do not require States to report more data than they 
currently are required to report to the Department. However, a 
potential new cost related to these regulations is the acquisition of 
the necessary technology for those States that do not currently have 
the capability to report information through electronic means. The 
Department expects that most States currently have this technology and 
that this cost would apply to very few (if any) States. For those 
States to which the cost is applicable, the cost is likely to be 
minimal.
    The potential benefits of these proposed regulations have been 
identified above, but briefly include: more timely and accessible data 
for accountability and decision-making; reduced State reporting burden; 
and, ultimately, improved implementation of the requirements of the 
Nation's education laws.
    In assessing the potential costs and benefits of this regulatory 
action, we have determined that the benefits would justify the costs. 
The potential costs and benefits of the Department's information 
collection requests are identified in notices published in accordance 
with the PRA.

2. Clarity of the Regulations

    Executive Order 12866 and the Presidential memorandum on ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following:
     Are the requirements in the proposed regulations clearly 
stated?
     Do the proposed regulations contain technical terms or 
other wording that interferes with their clarity?
     Does the format of the proposed regulations (grouping and 
order of sections, use of headings, paragraphing, etc.) aid or reduce 
their clarity?
     Could the description of the proposed regulations in the 
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in 
making the proposed regulations easier to understand? If so, how?
     What else could we do to make the proposed regulations 
easier to understand?
    Send any comments that concern how the Department could make these 
proposed regulations easier to understand to the person listed in the 
ADDRESSES section of the preamble.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities. Because the regulation would affect only States and State 
agencies, the regulations would not have an impact on small entities.

Paperwork Reduction Act of 1995

    These proposed regulations do not contain any new information 
collection requirements.

Intergovernmental Review

    These proposed regulations affect State-administered programs of 
the Department that are subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. One of the objectives of the Executive 
Order is to foster an intergovernmental partnership and to strengthen 
federalism. The Executive order relies on processes developed by State 
and local governments for coordination and review of proposed Federal 
financial assistance.
    This document provides early notification of the Department's 
specific plans and actions for these programs.

Assessment of Educational Impact

    The Secretary requests comments on whether these proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at this site: http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at the site listed above. If you have questions about using PDF, 
call the U.S. Government Printing Office (GPO), toll free, at 1-888-
293-6498; or in the Washington, DC area at (202) 512-1530.


    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html.


(Catalog of Federal Domestic Assistance Number does not apply.)

List of Subjects in 34 CFR Part 76

    Elementary and secondary education, Reporting and recordkeeping 
requirements.

    Dated: April 24, 2006.
Margaret Spellings,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary proposes 
to amend part 76 of title 34 of the Code of Federal Regulations as 
follows:

PART 76--STATE-ADMINISTERED PROGRAMS

    1. The authority citation for part 76 is revised to read as 
follows:


    Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.

    2. Section 76.720 is revised to read as follows:


Sec.  76.720  State reporting requirements.

    (a) This section applies to a State's reports required under 34 CFR 
80.40 (Monitoring and reporting of program performance) and 34 CFR 
80.41 (Financial reporting), and other reports required by the 
Secretary and approved by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
    (b) A State must submit these reports annually unless--
    (1) The Secretary allows less frequent reporting; or
    (2) The Secretary requires a State to report more frequently than 
annually,

[[Page 24829]]

including reporting under 34 CFR 80.12 (Special grant or subgrant 
conditions for ``high-risk'' grantees) or 34 CFR 80.20 (Standards for 
financial management systems).
    (c)(1) A State must submit these reports in the manner prescribed 
by the Secretary, including submitting any of these reports 
electronically and at the quality level specified in the data 
collection instrument.
    (2) Failure by a State to submit reports in accordance with 
paragraph (c)(1) of this section constitutes a failure, under section 
454 of the General Education Provisions Act, 20 U.S.C. 1234c, to comply 
substantially with a requirement of law applicable to the funds made 
available under that program.
    (3) For reports that the Secretary requires to be submitted in an 
electronic manner, the Secretary may establish a transition period of 
up to two years following the date the State otherwise would be 
required to report the data in the electronic manner, during which time 
a State will not be required to comply with that specific electronic 
submission requirement, if the State submits to the Secretary--
    (i) Evidence satisfactory to the Secretary that the State will not 
be able to comply with the electronic submission requirement specified 
by the Secretary in the data collection instrument on the first date 
the State otherwise would be required to report the data 
electronically;
    (ii) Information requested in the report through an alternative 
means that is acceptable to the Secretary, such as through an 
alternative electronic means; and
    (iii) A plan for submitting the reports in the required electronic 
manner and at the level of quality specified in the data collection 
instrument no later than the date two years after the first date the 
State otherwise would be required to report the data in the electronic 
manner prescribed by the Secretary.

(Authority: 20 U.S.C. 1221e-3, 1231a, and 3474)

    3. Section 76.722 is revised to read as follows:


Sec.  76.722  Subgrantee reporting requirements.

    A State may require a subgrantee to submit reports in a manner and 
format that assists the State in complying with the requirements under 
34 CFR 76.720 and in carrying out other responsibilities under the 
program.

(Authority: 20 U.S.C. 1221e-3, 1231a, and 3474)

 [FR Doc. E6-6355 Filed 4-26-06; 8:45 am]
BILLING CODE 4000-01-P